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UNIT PURCHASE AGREEMENT
among
XXXX GAMING CORPORATION,
XXXX INDIANA, INC.,
BLUE CHIP CASINO, INC.,
BLUE CHIP CASINO, LLC,
and
THE INDIVIDUALS SET FORTH ON
THE SIGNATURE PAGES HERETO
Dated as of June 27, 1999
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TABLE OF CONTENTS
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ARTICLE I PURCHASE AND SALE OF UNITS.............................................1
Section 1.1 Purchase and Sale of Units.............................................1
Section 1.2 Payments at Closing....................................................1
Section 1.3 Closing................................................................1
Section 1.4 Deliveries by the Company and LLC......................................2
Section 1.5 Deliveries by Xxxx Indiana.............................................2
Section 1.6 Payments at Closing; Deferred Company Closing Payment..................3
Section 1.7 Contingent Purchase Price Payment......................................3
Section 1.8 LLC Working Capital Certificate........................................5
ARTICLE II CERTAIN PRE-CLOSING TRANSACTIONS.......................................8
Section 2.1 Transfer of Assets and Assumed Liabilities.............................8
Section 2.2 Deliveries.............................................................9
Section 2.3 Excluded Liabilities..................................................11
Section 2.4 Transfer Costs........................................................11
Section 2.5 Prorations............................................................11
Section 2.6 Post-Closing Deliveries...............................................11
Section 2.7 Termination of Agreements.............................................12
Section 2.8 Consents to Assignment of Assumed Agreements..........................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND LLC...............................................................13
Section 3.1 Ownership of LLC Units................................................13
Section 3.2 Organization and Qualification........................................13
Section 3.3 Authority.............................................................14
Section 3.4 Capitalization........................................................14
Section 3.5 Binding Effect, No Violation, Consents................................14
Section 3.6 Financial Information.................................................15
Section 3.7 No Undisclosed Liabilities............................................15
Section 3.8 Absence of Certain Changes............................................16
Section 3.9 Tax Matters...........................................................16
Section 3.10 Real Property and Riverboat...........................................17
Section 3.11 Leases................................................................18
Section 3.12 Title to Assets.......................................................19
Section 3.13 Tangible Personal Property............................................19
Section 3.14 Intellectual Property.................................................20
Section 3.15 Litigation............................................................21
Section 3.16 Insurance.............................................................21
Section 3.17 Labor Matters.........................................................22
Section 3.18 Compliance with WARN Act..............................................23
Section 3.19 Employee Benefit Plans; ERISA.........................................23
Section 3.20 Environmental Matters.................................................26
Section 3.21 No Condemnation or Expropriation......................................28
Section 3.22 Suppliers.............................................................28
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Section 3.23 Contracts and Commitments.............................................28
Section 3.24 Compliance with Applicable Laws.......................................30
Section 3.25 Bank Accounts.........................................................31
Section 3.26 Assets Necessary to Business..........................................32
Section 3.27 Commissions...........................................................32
Section 3.28 Disclosure of All Material Facts......................................32
Section 3.29 City Matters..........................................................32
Section 3.30 Year 2000.............................................................33
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF XXXX INDIANA
AND BGC...............................................................33
Section 4.1 Organization..........................................................33
Section 4.2 Authority.............................................................33
Section 4.3 Binding Effect, No Violation, Consents................................33
Section 4.4 Litigation............................................................34
Section 4.5 Commissions...........................................................34
Section 4.6 Disclosure of All Material Facts......................................34
ARTICLE V COVENANTS OF THE COMPANY AND LLC......................................35
Section 5.1 Operation of the Business.............................................35
Section 5.2 Access................................................................38
Section 5.3 Existence.............................................................38
Section 5.4 Consents..............................................................39
Section 5.5 Governmental Approvals................................................39
Section 5.6 Performance...........................................................39
Section 5.7 Updating of Information...............................................39
Section 5.8 Tax Status............................................................40
Section 5.9 Monthly Financial Statements; Weekly Gaming Revenue Reports;
Employment Information Updates........................................40
Section 5.10 Other Transactions....................................................40
Section 5.11 Owner's Affidavits....................................................40
Section 5.12 Confidentiality of Information........................................40
Section 5.13 Shareholder Meeting...................................................41
Section 5.14 Governmental Transfer Approvals.......................................41
Section 5.15 LLC Organization Documents............................................41
Section 5.16 Indebtedness..........................................................41
Section 5.17 Employees.............................................................42
Section 5.18 Potential Land Transfer...............................................42
Section 5.19 Insurance.............................................................43
ARTICLE VI COVENANTS OF XXXX INDIANA.............................................43
Section 6.1 Performance...........................................................43
Section 6.2 Governmental Filings..................................................43
Section 6.3 Employee Termination Payments.........................................43
ARTICLE VII ENVIRONMENTAL MATTERS.................................................44
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Section 7.1 Site Access...........................................................44
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF XXXX INDIANA.............................44
Section 8.1 Representations and Warranties Correct................................44
Section 8.2 Performance; No Default...............................................44
Section 8.3 Delivery of Certificate...............................................44
Section 8.4 Opinion of Counsel to the Company.....................................44
Section 8.5 Good Standing Certificates............................................45
Section 8.6 Consents..............................................................45
Section 8.7 Governmental Approvals................................................45
Section 8.8 Absence of Litigation.................................................45
Section 8.9 FIRPTA Certificate....................................................45
Section 8.10 Termination of Certain Contracts......................................45
Section 8.11 Post-Closing Escrow Agreements........................................46
Section 8.12 RPTA Certificate......................................................46
Section 8.13 Shareholder/Member Approval...........................................46
Section 8.14 Performance of the Obligations........................................46
Section 8.15 Condition of Real Property and Assets.................................46
Section 8.16 Release of Liens......................................................46
Section 8.17 Title Policy..........................................................46
ARTICLE IX CONDITIONS TO OBLIGATIONS OF THE COMPANY..............................46
Section 9.1 Representations and Warranties Correct................................46
Section 9.2 Performance; No Default...............................................47
Section 9.3 Delivery of Certificate...............................................47
Section 9.4 Opinion of Counsel to Xxxx Indiana....................................47
Section 9.5 Governmental Approvals................................................47
Section 9.6 Absence of Litigation.................................................47
Section 9.7 Shareholder Approval..................................................47
ARTICLE X ADDITIONAL COVENANTS..................................................47
Section 10.1 Asset Purchase/Purchase Price Allocation..............................47
Section 10.2 Noncompetition........................................................48
Section 10.3 Construction of the Hotel.............................................48
Section 10.4 Xxxxx Guaranty........................................................55
Section 10.5 Bonds.................................................................55
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER.....................................55
Section 11.1 Termination of Agreement..............................................55
Section 11.2 Effect of Termination.................................................56
ARTICLE XII SURVIVAL; ESCROWS; INDEMNIFICATION....................................56
Section 12.1 Survival of Representations...........................................56
Section 12.2 [Intentionally Omitted]...............................................56
Section 12.3 Company Escrow........................................................56
Section 12.4 Indemnification by the Company for Certain Matters....................57
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Section 12.5 Indemnification of the Company by Xxxx Indiana........................58
Section 12.6 Company Tax Indemnification Matters...................................59
Section 12.7 Preparation and Filing of LLC Tax Returns.............................60
Section 12.8 Defense of Claims By the Company and Xxxx Indiana.....................61
Section 12.9 Company Escrow Statements.............................................62
Section 12.10 Release of Company Reimbursable Losses................................63
Section 12.11 Release of Escrowed Funds to the Company..............................63
Section 12.12 Environmental Remediation Matters.....................................64
Section 12.13 Subrogation...........................................................64
Section 12.14 Adjustment to Purchase Price..........................................64
Section 12.15 Liquidation of Company................................................64
ARTICLE XIII MISCELLANEOUS.........................................................65
Section 13.1 Remedies Cumulative...................................................65
Section 13.2 Expenses..............................................................65
Section 13.3 Transfer Taxes........................................................65
Section 13.4 Press Releases and Announcements......................................65
Section 13.5 Entire Agreement......................................................65
Section 13.6 Amendment, Extension and Waiver.......................................66
Section 13.7 Headings..............................................................66
Section 13.8 Notices...............................................................66
Section 13.9 Assignment............................................................67
Section 13.10 Applicable Law........................................................68
Section 13.11 Words in Singular and Plural Form.....................................68
Section 13.12 Further Assurances; Antitrust Notification............................68
Section 13.13 Counterparts..........................................................69
Section 13.14 No Third-Party Beneficiaries..........................................69
Section 13.15 Severability..........................................................69
Section 13.16 Consent to Jurisdiction...............................................69
ARTICLE XIV DEFINITIONS...........................................................70
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INDEX OF EXHIBITS
Exhibit 2.1(a) Deed to Owned Property
Exhibit 2.1(b) Assignment of Leases
Exhibit 2.1(d) Xxxx of Sale (Tangible Personal Property)
Exhibit 2.1(e) Assignment of Contracts
Exhibit 2.1(f) Assignment of Governmental Approvals and Intangibles
Exhibit 2.1(g) Assignment of Development Agreement
Exhibit 2.2(h) FIRPTA Affidavit
Exhibit 2.2(q) City Consent
Exhibit 2.2(r) Contractor Estoppel Certificate
Exhibit 5.18 Potential Land Transfer Agreement
Exhibit 8.4 Opinion of Counsel to Company and LLC
Exhibit 9.4(a) Opinion of BGC's Counsel
Exhibit 9.4(b) Opinion of Xxxx Indiana's Counsel
Exhibit 12.3 Company Escrow Agreement
Exhibit 14.1 Title Commitment
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INDEX OF SCHEDULES
Schedule 1.8(a) Working Capital
Schedule 2.1(e) Assumed Contracts
Schedule 2.7 Certain Contracts
Schedule 3.6 Company Financial Information
Schedule 3.10(a) Owned Property
Schedule 3.10(b) Leased Property
Schedule 3.11(a) Leases
Schedule 3.13(a) Tangible Personal Property
Schedule 3.13(b) Tangible Personal Property (Leased)
Schedule 3.13(c) Tangible Personal Property (Gaming)
Schedule 3.14 Intellectual Property
Schedule 3.16(a) Insurance
Schedule 3.19(a)(1) Plans
Schedule 3.19(a)(2) Benefit Plan
Schedule 3.20(a) Environmental Permits
Schedule 3.20(d) Materials of Environmental Concern
Schedule 3.20(h) Company Environmental Reports
Schedule 3.22 Suppliers
Schedule 3.23(f) Contracts
Schedule 3.25 Bank Accounts
Schedule 3.29(d) Hotel Expenditures
Schedule 5.1 Operation of the Business
Schedule 5.1(d) Liens
Schedule 5.1(f) Debts or Claims
Schedule 5.17 Terminated Employees
Schedule 5.18 Legal Description of Potential Land
Schedule 7.1 Known Environmental Conditions
Schedule 10.1 Purchase Price Allocation
Schedule 10.2 Existing Engagements
Schedule 10.2(b) Excluded Employees
Schedule 10.3(g) Hotel Construction Budget
Schedule 10.5 Bonds
Schedule 13.2 Expenses
Schedule 14.1 Assumed Liabilities
Schedule 14.2 Excluded Assets
Schedule 14.3 Untitled Property
Schedule 14.4 Plans and Specifications
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UNIT PURCHASE AGREEMENT (this "Agreement") dated as of June 27, 1999,
among XXXX GAMING CORPORATION, a Nevada corporation ("BGC"), XXXX INDIANA, INC.,
an Indiana corporation, ("Xxxx Indiana"), BLUE CHIP CASINO, INC., an Indiana
corporation (the "Company"), BLUE CHIP CASINO, LLC, an Indiana limited liability
company ("LLC"), and each of the INDIVIDUALS SET FORTH UNDER THE CAPTION
"INDIVIDUAL COVENANTORS" ON THE SIGNATURE PAGES HERETO (each, an "Individual
Covenantor" and collectively, the "Individual Covenantors"). Collectively, BGC,
Xxxx Indiana, the Company, LLC and the Individual Covenantors are referred to as
the "parties." Capitalized terms used herein are defined in Article XIV.
WHEREAS, the Company is currently engaged in the business of owning and
operating a Riverboat casino and related facilities in Michigan City, Indiana,
including the construction of the Hotel (the "Business"); and
WHEREAS, the Company owns, and at the Closing will own, all of the
issued and outstanding membership units of LLC; and
WHEREAS, immediately prior to the Closing, and as a condition precedent
thereto, the Company will transfer to LLC all of the Company's rights, title and
interest in the Assets and the LLC will assume the Assumed Liabilities
associated with the Business; and
WHEREAS, this Agreement sets forth the terms and conditions pursuant to
which at the Closing Xxxx Indiana will purchase from the Company all of the
outstanding LLC Units.
NOW THEREFORE, in consideration of the premises and of the respective
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF UNITS
Section 1.1 Purchase and Sale of Units. Upon the terms and subject to
the satisfaction or waiver, if permissible, of all the conditions set forth
herein, at the Closing, the Company will sell, transfer and convey to Xxxx
Indiana, and Xxxx Indiana will purchase from the Company, one hundred (100) LLC
Units, representing all of the outstanding Units of LLC, free and clear of all
Liens, for an aggregate amount equal to the LLC Purchase Price.
Section 1.2 Payments at Closing. In consideration of the sale, transfer
and conveyance of the LLC Units to Xxxx Indiana by the Company and the other
agreements of the Company and the Individual Covenantors contained herein, at
the Closing Xxxx Indiana will deliver, or cause to be delivered as provided in
Section 1.6 hereof, (i) to the Company, the Initial Company Closing Payment, and
(ii) to the Escrow Agent, the Company Escrowed Funds. BGC guarantees Xxxx
Indiana's performance of its obligations under this Agreement, including the
payments pursuant to this Section 1.2.
Section 1.3 Closing. The Closing (the "Closing") on the purchase of the
LLC Units under this Agreement will take place at the offices of Xxxx, Xxxx &
Xxxxx, 00 Xxxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, at 8:00 A.M., Central
Standard time, on the second (2nd) Business Day after the satisfaction or
waiver, if permissible, of all the conditions set forth herein, or such other
time and place as Xxxx Indiana and the Company may mutually agree upon in
writing.
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Section 1.4 Deliveries by the Company and LLC. At the Closing, the
Company will deliver, or cause LLC to deliver, (unless previously delivered) to
Xxxx Indiana the following:
(a) membership certificates, if applicable, representing the LLC
Units, accompanied by unit transfer powers duly executed in blank, and otherwise
in form acceptable to Xxxx Indiana for transfer on the books of LLC;
(b) copies of the Articles of Incorporation, Bylaws, Articles of
Organization, operating agreement or other comparable organizational or
governing documents of each of the Company and LLC, certified (to the extent
available) as of a date within thirty (30) days of the Closing Date by the
Secretary of State of the State of Indiana;
(c) the certificate referred to in Section 1.8;
(d) the evidence of termination and release referred to in Section
2.7;
(e) the certified resolutions referred to in Section 3.3;
(f) the records referred to in Section 3.25;
(g) executed counterparts of any consents referred to in Section
5.14;
(h) the executive officer certificate referred to in Section 8.3;
(i) the opinions of counsel referred to in Section 8.4;
(j) the affidavits referred to in Section 5.11;
(k) resignations effective as of the Closing Date from such officers
and managers of LLC as Xxxx Indiana shall have requested in writing not less
than seven (7) days prior to the Closing Date;
(l) evidence that the Transfer shall have been consummated
immediately prior to the Closing; and
(m) all other previously undelivered documents, instruments or
writings required to be delivered by the Company or LLC to Xxxx Indiana at or
prior to the Closing pursuant to this Agreement or otherwise required in
connection herewith.
Section 1.5 Deliveries by Xxxx Indiana. At the Closing, Xxxx Indiana
shall deliver, or cause to be delivered, to the Company (unless previously
delivered) the following:
(a) the payments to the Company and the Individual Covenantors
required by Section 1.6;
(b) the certified resolutions referred to in Section 4.2;
(c) the executive officer certificate referred to in Section 9.3;
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(d) the opinions of counsel referred to in Section 9.4; and
(e) all other previously undelivered documents, instruments or
writings required to be delivered by Xxxx Indiana to the Company at or prior to
the Closing pursuant to this Agreement or otherwise required in connection
herewith.
Section 1.6 Payments at Closing; Deferred Company Closing Payment.
(a) At the Closing, Xxxx Indiana shall deliver by wire transfer of
immediately available funds (i) to the account or accounts of the Company
specified by the Company, an aggregate amount equal to the Initial Company
Closing Payment and (ii) to the Escrow Agent, the Company Escrowed Funds. In
addition, at the Closing, Xxxx Indiana shall deliver by wire transfer of
immediately available funds to the account or accounts specified by each
Individual Covenantor an aggregate amount, in the case of each Individual
Covenantor, equal to the Noncompetition Covenant Payment in consideration for
each Individual Covenantor's agreements under Sections 5.12, 10.2 and 12.15.
(b) On the first Business Day following the Closing, Xxxx Indiana
shall deliver by wire transfer of immediately available funds to the liquidation
account or accounts of the Company specified by the Company an aggregate amount
equal to the Deferred Company Closing Payment.
Section 1.7 Contingent Purchase Price Payment.
(a) As additional consideration for the purchase of the LLC Units,
Xxxx Indiana agrees to make the following payment (the "Contingent Purchase
Price Payment") to the Company (subject to the conditions set forth below and
the offset rights of Xxxx Indiana under Section 12.4(b)(v)):
(i) If the Computed Amount equals or exceeds an aggregate of
Two Hundred Ten Million and No/100 Dollars ($210,000,000.00) for the first
thirty-six (36) months subsequent to the Closing Date beginning on the first day
of the first such subsequent month ("Measurement Period"), then Xxxx Indiana
will pay the Company an aggregate amount equal to Five Million and No/100
Dollars ($5,000,000.00), as provided below.
(ii) If the Computed Amount for the Measurement Period is
less than Two Hundred Ten Million and No/100 Dollars ($210,000,000.00), no
Contingent Purchase Price Payment will be due or payable under this Agreement.
(b) Within sixty (60) days following the last day of the Measurement
Period, Xxxx Indiana shall prepare a statement setting forth the Computed Amount
for the Measurement Period ("Buyer's Computed Amount") describing in reasonable
detail how Buyer's Computed Amount was determined ("Buyer's Computed Amount
Statement"). Within twenty (20) days following the delivery of Buyer's Computed
Amount Statement, the Company may deliver to Xxxx Indiana a written statement
(the "Company's Computed Amount Statement") setting forth with reasonable
specificity any disagreement with Buyer's Computed Amount Statement. During such
twenty (20) day period, the Company shall be permitted to review the working
papers of Xxxx Indiana and its auditors relating to Buyer's Computed Amount
Statement. If the
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Company does not submit the Company's Computed Amount Statement on or prior to
such twentieth (20th) day, then the Computed Amount for the Measurement Period
shall be deemed to have been finally determined for purposes of this Agreement.
(c) If the Company does submit the Company's Computed Amount
Statement on or prior to such twentieth (20th) day, any amounts contained in
Buyer's Computed Amount Statement which are not disputed by the Company's
Computed Amount Statement shall be deemed to have been finally determined for
purposes of calculating the Computed Amount. For a period of fifteen (15) days,
Xxxx Indiana and the Company shall attempt to resolve in good faith any dispute
or disagreement between Buyer's Computed Amount Statement and the Company's
Computed Amount Statement. Amounts resolved by such attempts shall be deemed to
have been finally determined for purposes of calculating the Computed Amount.
(d) At the end of such fifteen (15) day period if the Company's and
Xxxx Indiana's disagreement concerning the calculation of the Computed Amount
has not been resolved, the Accounting Firm shall be deemed appointed by the
parties hereto to finally determine the Computed Amount. Within ten (10) days
thereafter, Xxxx Indiana shall submit to the Accounting Firm Buyer's Computed
Amount Statement and any supporting evidence and statements which it deems
necessary to verify and support Buyer's Computed Amount Statement, and the
Company shall (i) submit to the Accounting Firm the Company's Computed Amount
Statement and any supporting evidence and statements which it deems necessary to
verify and support the Company's Computed Amount Statement and (ii) provide an
arrangement satisfactory to the Accounting Firm and consented to by Xxxx Indiana
(which consent will not be unreasonably withheld) to assure payment of the
Accounting Firm's Fees in the event Company is the Losing Party as described
below. Neither party may revise the amounts claimed on its respective Computed
Amount Statement prior to submission to the Accounting Firm except to reflect
amounts finally determined pursuant to Section 1.7(b) or (c). Based solely upon
the foregoing submissions, the Accounting Firm shall make a final, binding and
unappealable determination of the matters in dispute and of whether the Computed
Amount, which the parties agree shall be conclusively binding upon all parties,
equals or exceeds Two Hundred Ten Million and No/100 Dollars ($210,000,000.00).
The "Losing Party" for purposes of this Section 1.7 shall be the Company if the
Computed Amount is less than Two Hundred Ten Million and No/100 Dollars
($210,000,000.00) for the Measurement Period and otherwise shall be Xxxx
Indiana. The Losing Party shall pay all fees, charges and expenses for the
services of the Accounting Firm (including any fees, charges and expenses of any
experts used by the Accounting Firm) plus any reasonable fees and expenses of
enforcement of a determination of the Accounting Firm. In addition, the Losing
Party shall reimburse (in cash) all reasonable attorneys' fees, charges and
expenses and reasonable accountant's fees, charges and expenses incurred by the
other party in connection with the dispute (all of the foregoing, for purposes
of this Section 1.7, the "Fees"). The Accounting Firm shall be instructed to
make its final determination within twenty (20) days of the submissions to the
Accounting Firm and, in any case, as soon as practicable after such submissions.
Within five (5) days of the Accounting Firm's determination of the Computed
Amount, the Accounting Firm shall deliver to Xxxx Indiana and the Company a
statement (the "Computed Amount Statement") setting forth the Computed Amount
and describing in reasonable detail how the Computed Amount was determined.
Within ten (10) days after the final determination by the Accounting Firm, the
party entitled to receive the Fees shall submit a statement setting forth its
Fees incurred and the
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Accounting Firm, within ten (10) days after such submission, will make a final,
binding and unappealable determination of the amount of such Fees and award such
amounts to such party.
(e) Any final determination and award of Fees shall be in writing
and shall state the reasons upon which it is based. Judgment upon the award may
be entered in any court having jurisdiction thereof. The provisions of this
Section 1.7 shall constitute the exclusive and sole means for resolving those
disputes, disagreements, controversies or claims between Xxxx Indiana and the
Company with respect to the Computed Amount.
(f) If the Computed Amount is equal to or greater than Two Hundred
Ten Million and No/100 Dollars ($210,000,000.00), Boyd Indiana shall, within two
(2) business days of Xxxx Indiana's receipt of the Computed Amount Statement or
other final determination of the Computed Amount, deliver by wire transfer of
immediately available funds to the liquidation account or accounts specified by
the Company an aggregate amount equal to Five Million and No/100 Dollars
($5,000,000.00).
(g) In the event that prior to the end of the Measurement Period,
Xxxx Indiana sells substantially all of the assets of LLC, LLC merges with
another entity in which LLC is not the surviving entity or the LLC Units are
sold to another Person, then the purchaser of such assets or LLC Units or the
surviving entity shall assume the obligations of Xxxx Indiana hereunder, but
such assumption shall not relieve BGC of its guaranty obligations hereunder.
(h) For each of the first two (2) years of the Measurement Period,
Boyd Indiana shall, within sixty (60) days of the end of each such year provide
to the Company a calculation of the Buyer's Computed Amount through the end of
such year.
Section 1.8 LLC Working Capital Certificate.
(a) On the second (2nd) Business Day prior to the scheduled Closing
Date, the Company shall cause LLC to deliver to Boyd Indiana a certificate of
the chief financial officer of LLC, dated the date of delivery, (i) estimating
in good faith the amount of Working Capital of LLC as of the Closing Date (the
"LLC Preliminary Working Capital Amount") assuming the Transfer occurs on the
scheduled Closing Date (which estimate shall be reasonably satisfactory to Boyd
Indiana) and (ii) certifying that such officer has no basis to believe that
Working Capital of LLC as of the Closing Date will vary materially from the LLC
Preliminary Working Capital Amount for LLC reflected in the certificate
(assuming that the Closing occurs on the scheduled Closing Date). "Working
Capital" for the purposes of this Section 1.8 shall be calculated in the manner
set forth in Schedule 1.8(a).
(b) Within thirty (30) days following the Closing Date, Boyd Indiana
shall prepare a statement setting forth the Working Capital of LLC as of the
Closing Date ("Buyer's LLC Working Capital Amount") describing in reasonable
detail how Buyer's LLC Working Capital Amount was determined ("Buyer's LLC
Working Capital Statement"). Within twenty (20) days following the delivery of
Buyer's LLC Working Capital Statement, the Company may deliver to Boyd Indiana a
written statement (the "Company's Working Capital Statement") setting forth with
reasonable specificity any disagreement with Buyer's LLC Working Capital
Statement. During such twenty (20) day period, the Company shall be permitted to
review the working
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papers of Boyd Indiana and its auditors relating to Buyer's LLC Working Capital
Statement. The Company's Working Capital Statement may disagree with Buyer's LLC
Working Capital Statement either on the basis that (i) Working Capital has not
been calculated in accordance with Schedule 1.8(a) or (ii) there has been an
arithmetical error in calculating Working Capital. If the Company does not
submit the Company's Working Capital Statement on or prior to such twentieth
(20th) day then Working Capital of LLC as of the Closing Date (the "LLC Closing
Date Working Capital Amount") shall be deemed to have been finally determined
for purposes of this Agreement.
(c) If the Company does submit the Company's Working Capital
Statement on or prior to such twentieth (20th) day, any amounts contained in
Buyer's LLC Working Capital Statement which are not disputed by the Company's
Working Capital Statement shall be deemed to have been finally determined for
purposes of calculating the LLC Closing Date Working Capital Amount. For a
period of ten (10) days, Boyd Indiana and the Company shall attempt to resolve
in good faith any dispute or disagreement between Buyer's LLC Working Capital
Statement and the Company's Working Capital Statement. During such ten (10) day
period, Boyd Indiana shall be permitted to review the working papers of the
Company and the Company's auditors relating to the Company's Working Capital
Statement. Amounts resolved by such attempts shall be deemed to have been
finally determined for purposes of calculating the LLC Closing Date Working
Capital Amount.
(d) At the end of such ten (10) day period, the Accounting Firm
shall be deemed appointed by the parties hereto to finally determine the LLC
Closing Date Working Capital Amount. Within ten (10) days thereafter, Boyd
Indiana shall submit to the Accounting Firm Buyer's LLC Working Capital
Statement and any supporting evidence and statements which it deems necessary to
verify and support Buyer's LLC Working Capital Statement, and the Company shall
submit to the Accounting Firm the Company's Working Capital Statement and any
supporting evidence and statements which it deems necessary to verify and
support the Company's Working Capital Statement. Neither party may revise the
amounts claimed on its respective Working Capital Statement prior to submission
to the Accounting Firm except to reflect amounts finally determined pursuant to
Section 1.8(b) or (c). Based solely upon the foregoing submissions, the
Accounting Firm shall make a final, binding and unappealable determination of
the matters in dispute and of the LLC Closing Date Working Capital Amount, which
the parties agree shall be conclusively binding upon all parties; provided,
however, that (i) the Accounting Firm must choose either the LLC Closing Date
Working Capital Amount set forth on Buyer's LLC Working Capital Statement or the
LLC Closing Date Working Capital Amount set forth on the Company's Working
Capital Statement (in each case relying without modification upon any portions
of the LLC Closing Date Working Capital Amount resolved pursuant to Section
1.8(c)) and may not choose any other amount and (ii) the Accounting Firm may not
make any determination with respect to any matter not in dispute between Buyer's
LLC Working Capital Statement and the Company's Working Capital Statement;
provided further, however, that any determination by the Accounting Firm shall
not be final, binding and nonappealable, and shall be without effect, if it does
not comply with the foregoing proviso. The party whose Working Capital Statement
is not selected is the "Losing Party" for purposes of this Section 1.8 and shall
pay all fees, charges and expenses for the services of the Accounting Firm
(including the fees, charges and expenses of any experts used by the Accounting
Firm) plus any reasonable fees and expenses of enforcement of a determination of
the Accounting Firm. In
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addition, the Losing Party shall reimburse (in cash) all reasonable attorneys'
fees, charges and expenses and reasonable accountant's fees, charges and
expenses incurred by the other party in connection with the dispute (all of the
foregoing, for purposes of this Section 1.8, the "Fees"). The Accounting Firm
shall be instructed to make its final determination within twenty (20) days of
the submissions to the Accounting Firm and, in any case, as soon as practicable
after such submissions. Within five (5) days of the Accounting Firm's
determination of the LLC Closing Date Working Capital Amount, the Accounting
Firm shall deliver to Boyd Indiana and the Company a statement (the "LLC Closing
Date Working Capital Statement") setting forth the LLC Closing Date Working
Capital Amount and describing in reasonable detail how the LLC Closing Date
Working Capital Amount was determined. Within ten (10) days after the final
determination by the Accounting Firm, the party entitled to receive the Fees
shall submit a statement setting forth its Fees incurred and the Accounting
Firm, within ten (10) days after such submission, will make a final, binding and
unappealable determination of the amount of such Fees and award such amounts to
such party.
(e) Any final determination and award of Fees shall be in writing
and shall state the reasons upon which it is based. Judgment upon the award may
be entered in any court having jurisdiction thereof. The provisions of this
Section 1.8 shall constitute the exclusive and sole means for resolving those
disputes, disagreements, controversies or claims between Boyd Indiana and the
Company with respect to the LLC Closing Date Working Capital Amount.
(f) To the extent the LLC Closing Date Working Capital Amount is (i)
greater than the LLC Preliminary Working Capital Amount, Boyd Indiana shall,
within ten (10) days of Boyd Indiana's receipt of the LLC Closing Date Working
Capital Statement or other final determination of the LLC Closing Date Working
Capital Amount, deliver by wire transfer of immediately available funds to the
liquidation account or accounts specified by the Company, an amount equal to
such excess or (ii) less than the LLC Preliminary Working Capital Amount, within
ten (10) days of the Company's receipt of the LLC Closing Date Working Capital
Statement or other final determination of the LLC Closing Date Working Capital
Amount there shall be released from the Company Escrowed Funds and delivered by
wire transfer of immediately available funds to the account or accounts
specified by Boyd Indiana an amount equal to such shortfall, in either case plus
interest on such amount at the Interest Rate for the period commencing on (and
including) the Closing Date to (but excluding) the date of payment, as well as
the amount of any Fees to be borne by LLC as a Losing Party under this Section
1.8.
(g) To the extent that following the settlement of the LLC Closing
Date Working Capital Amount described in Section 1.8(b), outstanding chips and
tokens that represent liabilities appearing on the LLC Closing Date Working
Capital Statement cannot legally be redeemed by LLC, the remaining amount of any
reserve for the liability represented by such chips and tokens shall be
delivered by wire transfer of immediately available funds to the Escrow Agent
and become part of the Company Escrowed Funds. The Company and Boyd Indiana each
agree that they shall each receive fifty percent (50%) of the net proceeds after
expenses of sale of that certain noncontiguous parcel of real estate to the Park
Land Partnership, whether or not such sale occurs pre-Closing or post-Closing,
so long as the Closing occurs.
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ARTICLE II
CERTAIN PRE-CLOSING TRANSACTIONS
Section 2.1 Transfer of Assets and Assumed Liabilities. Immediately
prior to the Closing, and as a condition precedent thereto, the Company shall
assign, convey and transfer (the "Transfer") to LLC all of the Company's right,
title and interest in the Assets and the Assumed Liabilities, and LLC shall
acquire the Assets and assume the Assumed Liabilities. The Transfer shall
include, but not be limited to, the following assignments, conveyances and
transfers:
(a) Owned Property. The Company shall convey to LLC title to the
Owned Property by a duly executed and acknowledged general warranty deed (the
"Deed") in substantially the form attached hereto as Exhibit 2.1(a). Evidence of
delivery of title to the Owned Property shall be the issuance by the Title
Company of an ALTA Form B (1970) Extended Coverage Owner's Policy (rev. 11-17-70
and 10-17-84) with regional exceptions deleted (the "Title Policy"). The Title
Policy shall be in an amount equal to Seventy-Five Million Nine Hundred Seventy
Thousand and No/100 Dollars ($75,970,000.00) and shall show title to the Owned
Property vested in LLC, subject to any Permitted Liens. The Title Policy shall
include contiguity, survey, zoning and such other endorsements as are reasonably
requested by Boyd Indiana. Prior to the Transfer Date, Boyd Indiana will order
an updated preliminary title report and an updated survey to verify that the
only Liens encumbering the Owned Property as of such date are the Permitted
Liens. Boyd Indiana shall have the right to notify the Company of any additional
Liens reflected on such updated survey or updated title report. Upon the
Company's receipt of such notice, the Company shall take such steps as is
necessary to cause the Title Company to remove such additional Liens prior to
the Transfer Date including, but not limited to, posting a bond or obtaining
additional endorsements to the Title Policy. In addition to the foregoing, the
Company shall convey to the LLC by quitclaim deed all of Company's right, title
and interest in and to the Untitled Property.
(b) Leased Property. The Company shall assign to LLC all of its
right, title and interest in and to the Leased Property included in the Assets
pursuant to that certain Assignment of Leases (the "Assignment of Leases") in
substantially the form attached hereto as Exhibit 2.1(b).
(c) Riverboat. The Company shall assign, transfer and convey to LLC
all of its right, title and interest to the Riverboat by a xxxx of sale (the
"Xxxx of Sale (Riverboat)") in the form required by the United States Coast
Guard free and clear of all Liens or interests of third parties not arising from
or through BGC or Boyd Indiana, except Permitted Liens.
(d) Tangible Personal Property. The Company shall assign, transfer
and convey to LLC all of its right, title and interest to the Tangible Personal
Property included in the Assets (other than the Riverboat) by a xxxx of sale
(the "Xxxx of Sale (Tangible Personal Property)") in substantially the form
attached hereto as Exhibit 2.1(d) free and clear of all Liens or interests of
third parties not arising from or through BGC or Xxxx Indiana, except Permitted
Liens. In connection with the Transfer, new chips and tokens will be required
under applicable Gaming Laws. In that regard, Xxxx Indiana will advise the
Company on the color, inserts and design of new chips and tokens to be utilized
by LLC, and the Company will implement Boyd Indiana's reasonable requests with
respect thereto at Boyd Indiana's expense as provided in Schedule 13.2.
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(e) Contracts and Equipment Leases; Plans and Specifications. The
Company shall assign, transfer and convey to LLC all of its right, title and
interest under the Contracts of the Company listed on Schedule 2.1(e) (the
"Assumed Contracts"), including all of its right, title and interest under the
Plans and Specifications and the Equipment Leases by an Assignment and
Assumption of Contracts (the "Assignment of Contracts") in substantially the
form attached hereto as Exhibit 2.1(e); provided that failure of the other party
or parties to an Assumed Contract to consent to such assignment will not be
deemed to be a breach of this Section 2.1(e).
(f) Governmental Approvals and Intangibles. The Company shall
assign, transfer and convey to LLC, all of its right, title and interest in and
to the Governmental Approvals and Intangibles (including, but not limited to,
the Liquor License and the Gaming License) by an Assignment and Assumption of
Governmental Approvals and Intangibles (the "Assignment of Governmental
Approvals and Intangibles") in substantially the form attached hereto as Exhibit
2.1(f); provided that failure to receive a consent from a Governmental Body to
the assignment of a Governmental Approval will not be deemed to be a violation
of this Section 2.1(f).
(g) Development Agreement. The Company shall assign, transfer and
convey to LLC, all of its right, title and interest in and to the Development
Agreement by an Assignment and Assumption of Development Agreement (the
"Assignment of Development Agreement") in substantially the form attached hereto
as Exhibit 2.1(g).
(h) Employees. The Company shall transfer to LLC all employees of
the Company who are employed as of the Transfer Date except for any employees
listed individually on Schedule 5.17 shown thereon as terminating on the Closing
Date, which employment shall be upon terms equivalent to those in effect
immediately prior to the Transfer Date; provided, however, in no event shall the
Company be obligated to transfer to LLC any employees who elect not to continue
their employment with LLC after the Transfer Date.
Section 2.2 Deliveries. Immediately prior to the Closing, and as a
condition precedent thereto, the Company and/or LLC, as applicable, shall have
executed, acknowledged where necessary and delivered to Boyd Indiana or their
authorized agents, as applicable, all of the following:
(a) The Assignment of Leases duly executed by the Company and LLC.
(b) The Assignment of Contracts duly executed by the Company and
LLC.
(c) The Xxxx of Sale (Tangible Personal Property) duly executed by
the Company.
(d) The Xxxx of Sale (Riverboat) duly executed by the Company,
together with originals of the current certificate of documentation, certificate
of inspection, vessel certificate of financial responsibility, vessel inspection
user fee renewal letter and such other documents required by applicable Laws
necessary to effect transfer of the Riverboat to LLC and permit LLC to use and
operate the Riverboat after the Transfer Date to the same extent in all material
respects as the Company prior to the Transfer Date.
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(e) The Assignment of Governmental Approvals and Intangibles duly
executed by the Company and LLC.
(f) All documents and consents as may be reasonably required in
connection with the transfer of the Liquor Assets to LLC.
(g) Originals, if available, or copies of all Books and Records.
(h) An affidavit (the "FIRPTA Affidavit") of the Company stating
that the Company is a "United States person," as referred to and defined in
Internal Revenue Code Paragraph 1445(f)(3) and 7701(g) in substantially the form
attached hereto as Exhibit 2.2(h).
(i) Originals, as applicable, of all Intangibles, Intellectual
Property and all other documents or instruments included in the Assets relating
to the Intangibles.
(j) Duly executed Governmental Approvals to or from any Governmental
Body or other Persons to whom notice is required to be given, or from whom
consent or approval is required upon, and material to, the Transfer or the
purchase and sale of the LLC Units to Boyd Indiana, or any portion thereof,
including, but not limited to the following:
(i) A copy of all Governmental Approvals necessary to the
transfer of the Riverboat from the Company to LLC including, but not limited to,
the consent of the United States Coast Guard, as well as originals of all
licenses, certificates and other documents relating to such transfer.
(ii) A copy of all Governmental Approvals necessary to the
transfer of the Gaming License from the Company to LLC including, but not
limited to, the consent of the Indiana Gaming Commission.
(k) A complete set of all keys and security codes for the Riverboat,
appropriately tagged or otherwise marked for identification.
(l) Originals or copies of such other documents as may be reasonably
requested by the Title Company.
(m) Originals of all Leases and all amendments thereto, and
originals or copies of all records and correspondence relating thereto.
(n) Originals of all material warranties or guaranties received by
the Company or LLC from any contractors, subcontractors, suppliers or
materialmen in connection with the Business.
(o) All marketing materials in the possession of the Company or LLC
with respect to the Business.
(p) All ledgers and financial statements for the Riverboat.
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(q) A duly executed Consent to Assignment (the "City Consent")
executed by the City in substantially the form attached hereto as Exhibit 2.2(q)
certifying, among other things, that there is no default under the Development
Agreement and that the City has consented to the assignment of the Development
Agreement and to all of the other transactions contemplated by this Agreement.
(r) A duly executed Estoppel Certificate and Consent to Assignment
(the "Contractor Estoppel Certificate") executed by the Contractor in
substantially the form attached hereto as Exhibit 2.2(r) certifying, among other
things, that there is no default under the Construction Contract to which the
Contractor is a party and that the Contractor has consented to the assignment of
such Construction Contract.
(s) The Assignment of Development Agreement duly executed by the
Company and LLC.
(t) Originals (to the extent available, or copies if originals are
not available) of all Assumed Contracts and the Management Agreement.
(u) The Potential Land Transfer Agreement, to the extent applicable
pursuant to Section 5.18.
(v) Such other documents, instruments, agreements, assignments,
instruments of assumption, correspondence and other items as Boyd Indiana may
reasonably request to evidence the Transfer to LLC and all other transactions
contemplated hereby.
Section 2.3 Excluded Liabilities. The Company hereby assumes and agrees
to pay and discharge, and will indemnify and hold harmless, to the extent and in
the manner provided in Section 12.4, LLC, Xxxx Indiana and BGC for all of the
Excluded Liabilities.
Section 2.4 Transfer Costs. The Company and Boyd Indiana shall bear the
fees, charges, commissions, expenses or taxes related to the Transfer in
accordance with Sections 2.8, 13.2 and 13.3. To the extent (but only to the
extent) any such costs are accrued or reserved for in the calculation of the LLC
Closing Date Working Capital Amount, they shall be deemed to have been paid by
the Company in apportioning such costs. No such Transfer costs shall reduce the
Computed Amount.
Section 2.5 Prorations. All special or general assessments, real and
personal property taxes (other than those taxes imposed in connection with the
transfer of the Owned Property) and any other taxes or assessments that may be
required to be prorated as of the Transfer Date pursuant to any Laws or by the
Title Company in order to issue the Title Policy shall be allocated and prorated
between the Company and LLC as of 12:01 A.M. on the Transfer Date on the basis
of the fiscal year for which they are assessed.
Section 2.6 Post-Closing Deliveries. As soon as practicable following
the Closing Date, the Company shall deliver or cause to be delivered to Boyd
Indiana the executed and recorded original Deed and an original of the Title
Policy.
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Section 2.7 Termination of Agreements. Immediately prior to the Closing,
the Company and/or LLC, as noted in Schedule 2.7, will cause the Contracts set
forth on Schedule 2.7 to be terminated and LLC and the LLC Units to be released
from any liability, restriction or required performance thereunder. Evidence of
such termination and release, in form and substance reasonably satisfactory to
BGC, shall be furnished by Company or LLC, as applicable, at the Closing.
Section 2.8 Consents to Assignment of Assumed Contracts. In the event
any Assumed Contract to which the Company is a party requires the consent of
another party thereto, the Company will make all reasonable efforts to obtain
such consent in writing prior to the Transfer Date. Expenses in relation thereto
shall be apportioned as set forth in Schedule 2.8. If another party to any
Assumed Contract requires a specific written assumption by LLC of the Company's
obligations thereunder as a condition to consent to assignment thereof, LLC
agrees to provide such written assumption on terms no less favorable in all
material respects to LLC than the existing terms of such Assumed Contract.
Nothing in this Agreement shall be construed as an attempt to assign any Assumed
Contract which is not assignable without the consent of the other party or
parties thereto, unless such consent shall have been obtained. If, after the
Company and LLC have made all reasonable efforts to obtain the consent of any
such other party to such Assumed Contract, such consent shall not have been
obtained at or prior to the Transfer Date, such Assumed Contract shall not be
deemed assigned to LLC hereunder, and the Company, LLC, and Xxxx Indiana shall
cooperate in an arrangement (each, an "Assignment Arrangement") reasonable to
both the Company and Boyd Indiana designed to provide LLC after the Closing Date
with all of the benefits of such Assumed Contract and all of the obligations
under such Assumed Contract arising on or after the Closing Date, including the
enforcement of any rights of the Company against such other party thereto
arising out of the breach or cancellation thereof by such other party or
otherwise. Boyd Indiana agrees to cause LLC to fulfill all obligations arising
on or after the Closing Date of any Assumed Contract for which it receives the
benefits pursuant to the foregoing, including all related payments thereunder,
on a timely basis and to indemnify and hold the Company harmless for any breach
of such Assignment Arrangement or any claim arising under such Assumed Contract
in connection with the operation of the Business after the Closing. The Company
and LLC shall, for a reasonable period, not to exceed ninety (90) business days
following the Closing Date, continue to use all reasonable efforts to attempt to
obtain such consents. If the Company and LLC enter into any Assignment
Arrangement in connection with any such Assumed Contract, LLC after the Closing
Date shall be responsible for the performance of such contract and any payments
required to be made to the other party to such contract or agreement to the same
extent as would have been required if the Assumed Contract had been effectively
assigned to LLC on the Transfer Date. In addition, after the Closing, in order
that the full value of every Assumed Contract and all claims and demands with
respect to such Assumed Contracts may be realized, the Company hereby agrees
that it will, at the written request and under the direction of Boyd Indiana and
as shall be permitted by law and the terms of such Assumed Contracts, take all
actions and do or cause to be done all things as shall be reasonably necessary
in order that LLC after the Closing Date may obtain the full benefit and
enjoyment of the Assumed Contracts, subject to the provisions of Schedule 2.8.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND LLC
Except as set forth in the corresponding subsection of the disclosure
letter delivered to Boyd Indiana at or prior to the execution of this Agreement
(the "Company/LLC Disclosure Schedule"), the Company and LLC, jointly and
severally, represent and warrant to Boyd Indiana, as of the date of this
Agreement and as of the Closing Date (unless a contrary date is indicated
below), as follows:
Section 3.1 Ownership of LLC Units. The Company owns and has an
unqualified right to and shall transfer to Boyd Indiana at the Closing good and
valid title to the LLC Units free and clear of all Liens. Other than this
Agreement, the LLC Units are not subject to any voting trust agreement or other
Contract, including any Contract restricting or otherwise relating to the voting
or disposition of such LLC Units.
Section 3.2 Organization and Qualification.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Indiana and has the
corporate power and authority to carry on its business as presently conducted,
to enter into this Agreement and the other documents and instruments to be
executed and delivered by it, to perform its obligations hereunder or thereunder
and to carry out the transactions contemplated hereby and thereby. LLC is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Indiana, has conducted no business prior to the
Transfer Date except as contemplated hereby and has the requisite power and
authority to carry on its business as presently conducted, to enter into this
Agreement and the other documents and instruments to be executed and delivered
by it, to perform its obligations hereunder or thereunder and to carry out the
transactions contemplated hereby and thereby.
(b) Neither the Company nor LLC has any Subsidiaries. Neither the
Company nor LLC directly or indirectly owns any capital stock of or other equity
interests in any Person and neither the Company nor LLC is a member of or
participant in any partnership, joint venture, limited liability corporation, or
similar Person.
(c) The copies of the Articles of Incorporation of the Company, and
all amendments thereto, as certified by the Secretary of State of Indiana, and
the Bylaws, as amended to date, of the Company, as certified by the Secretary of
the Company, which have heretofore been delivered to Boyd Indiana, are complete,
accurate and current. The copies of the organizational and governing documents
of LLC, and all amendments thereto, as certified by the Secretary of State of
the State of Indiana or, if not applicable, a manager or executive officer of
LLC, which have heretofore been delivered to Boyd Indiana, are complete,
accurate and current. The stock transfer books and minute books or similar
records of the Company and LLC, which have heretofore been made available to
Boyd Indiana, are complete, accurate and current.
(d) The Company is duly qualified or registered for the transaction
of business and is in good standing in Indiana and Illinois, which are the only
jurisdictions wherein the character of the properties so owned or leased by or
the nature of its business makes such licensing or qualification to do business
necessary, except for any such failures to so qualify or be licensed,
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which, when taken together with all other such failures, has not had and would
not reasonably be likely to have a Material Adverse Effect. At the Closing, LLC
will be duly qualified or registered to do business and in good standing in
Indiana.
Section 3.3 Authority. The execution and delivery of this Agreement by
the Company and LLC and the execution and delivery of the other instruments or
documents required or contemplated hereby and the consummation of the
transactions contemplated hereby by each of the Company and LLC have been duly
and validly authorized by the Board of Directors or other applicable governing
body of such entity. Prior to the Closing, each of the Company and LLC will
deliver to Boyd Indiana a complete and correct copy, certified by its Secretary
(or other appropriate executive officer or manager), of the resolutions
heretofore duly and validly adopted by its Board of Directors or other
applicable governing body evidencing such authorization and resolutions of the
Company's shareholders duly and validly adopted prior to the Closing, which
resolutions in each case will not have been rescinded prior to, and will be in
full force and effect on the date of, the Closing. No other corporate or limited
liability company act or proceeding on the part of any of the Company or LLC is
necessary to authorize this Agreement or the other documents and instruments to
be executed and delivered by the Company or LLC pursuant hereto or the
transactions contemplated hereby or thereby.
Section 3.4 Capitalization. The authorized capital of LLC consists
solely of one hundred (100) Units, of which one hundred (100) Units are issued
and outstanding and are owned of record by the Company. All of the issued and
outstanding Units of LLC have been duly authorized and are validly issued, fully
paid and nonassessable, are not subject to any preemptive rights and have not
been issued in violation of any applicable Laws, Articles of Organization,
operating agreement or the terms of any agreement to which the LLC, Company or,
to the knowledge of the Company and LLC, any shareholder of the Company is a
party or is bound. There are no units or other equity interest or securities of
LLC reserved for issuance or any outstanding subscriptions, options, warrants,
rights, "phantom" stock rights, convertible or exchangeable securities, stock
appreciation rights or other agreements or commitments (other than this
Agreement) granting to any Person any interest in or right to acquire at any
time, or upon the happening of any stated event, any Units or other equity
interest or securities of LLC, or any interest in, exchangeable for or
convertible into Units or other equity interest or securities of LLC or
restricting the Company's rights to transfer any of the LLC Units.
Section 3.5. Binding Effect, No Violation, Consents. This Agreement
constitutes, and, when executed and delivered, the other documents and
instruments to be executed and delivered by each of the Company and LLC pursuant
hereto will constitute, valid and binding agreements of each of the Company and
LLC, enforceable in accordance with their respective terms (except as such
enforceability may be affected by bankruptcy, reorganization, moratorium or
similar laws generally affecting creditors' rights and by general principles of
equity), and (assuming receipt of the consents, approvals and authorizations
specifically contemplated by the next sentence) neither the execution and
delivery of this Agreement and the other documents and instruments to be
executed and delivered by the Company and LLC pursuant hereto, nor the
consummation by the Company or LLC of the transactions contemplated hereby or
thereby will (i) violate or conflict with or result in any breach of any
provision of its Articles of Incorporation, Bylaws, Articles of Organization,
operating agreement or other organizational or governing documents; (ii) violate
or conflict with or constitute a default (or an event which, with
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notice or lapse of time, or both, would constitute a default) under or will
result in the termination of, or accelerate the performance required by, or
result in the creation of any Lien upon any of the assets under, any Assumed
Contract to which the Company or LLC is a party or by which the Company or LLC
or its respective assets or properties may be bound or affected; or (iii)
violate any Law, excluding from the foregoing clauses (ii) and (iii) such
defaults, rights and violations which, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Except for the consents required
under the Gaming Laws, the consent of the City under the Development Agreement
and the applicable requirements of the HSR Act, the consent of the United States
Coast Guard to the transfer of the Riverboat, and the consents of the Army Corps
of Engineers, the Indiana Department of Natural Resources and the Xxxxx
Construction Contract, no Governmental Approval, or consent, approval,
authorization or action by, notice to, or filing with, any other Person is
required in connection with the execution, delivery and performance of this
Agreement, the other documents and instruments to be executed and delivered by
the Company or LLC pursuant hereto or the consummation by the Company or LLC of
the transactions contemplated hereby or thereby, except in the case of
Governmental Approvals or consents, approvals, authorizations, actions, notices
or filings required under Contracts where the failure to obtain such consents
and approvals and give such notices would not reasonably be expected to have a
Material Adverse Effect.
Section 3.6 Financial Information. Set forth as Schedule 3.6 are audited
(a) consolidated balance sheets of the Company as at December 31, 1997 and 1998
(such balance sheet as at December 31, 1998 is sometimes referred to herein as
the "Company Balance Sheet") and (b) consolidated statements of income, cash
flows and changes in shareholders equity of the Company for each of the years
ended December 31, 1998 and 1997, all audited by Xxxxxx Xxxxxxxx LLP, whose
reports thereon are included therein (together with the balance sheets, and
including all notes thereto, the "Company Financial Statements"). Schedule 3.6
also contains the unaudited (a) consolidated balance sheet of the Company as at
March 31, 1999 and (b) the consolidated statements of income and cash flows of
the Company for the three months ended March 31, 1999. Such balance sheets and
the notes thereto are true, complete and accurate and fairly present the assets,
liabilities and financial condition of the Company on a consolidated basis as of
the respective dates thereof, and such consolidated statements of income, cash
flows and changes in shareholders' equity and the notes thereto are true,
complete and accurate and fairly present the results of operations of the
Company on a consolidated basis for the period therein referred to, all in
accordance with GAAP consistently applied throughout the periods involved,
except that the interim, quarterly unaudited financial information is subject to
normal and immaterial year-end audit adjustments.
Section 3.7 No Undisclosed Liabilities. The Company does not have any
material liability or obligation of any nature, whether fixed or contingent or
otherwise, whether due or to become due, including, without limitation, any
unfunded obligation under any pension plan, any liability for Taxes or any
environmental liabilities, that is not reflected or reserved against in the
Company Balance Sheet or otherwise disclosed in the notes thereto, other than
liabilities and obligations incurred subsequent to the date of the Company
Balance Sheet in the ordinary course of business consistent with past practice
and not in violation of this Agreement. The Company does not know or have any
reasonable expectation of any basis for the assertion against the Company or LLC
of any such liability or obligation. There are no agreements or arrangements
pursuant to which the Company or LLC has incurred Indebtedness or is liable for
payments to its
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shareholders or members or former shareholders or members, any Related Entity or
their respective Affiliates. As of the date of this Agreement, LLC has no
liabilities and, as of the Closing Date, LLC will have no liabilities except the
Assumed Liabilities, except for any liabilities arising from Excluded
Environmental Matters.
Section 3.8 Absence of Certain Changes. Except as otherwise contemplated
by this Agreement, (a) since the date of the Company Balance Sheet, the Business
has been conducted only in the ordinary course, consistent with past practice,
and there has not occurred any event, condition, circumstance, change or
development (whether or not in the ordinary course of business consistent with
past practice) that, individually or in the aggregate, has had or, in the
future, would reasonably be expected to have a Material Adverse Effect on the
Company or LLC and (b) since the date of the Company Balance Sheet, none of LLC,
the Company or, to the knowledge of the Company and LLC, any shareholder of the
Company has taken any action which, if taken after the date of this Agreement,
would constitute a breach of any of the covenants set forth in Section 5.1
(excluding any requirement set forth in Section 5.1 to give notice as to any
action occurring prior to the date of this Agreement).
Section 3.9 Tax Matters.
(a) The Company is a small business corporation as defined in
Section 1361 of the Code and has had in effect since January 1, 1998 a valid
election to be treated as an "S" corporation for federal Income Tax purposes
under the Code and in the State of Indiana, and neither the Company nor, to the
knowledge of the Company, any of its existing or former shareholders has taken
or caused or permitted to be taken any action during such periods that would
have caused a termination of such S election.
(b) The Company and LLC are not registered to do business as a
foreign entity in any state, and the Company files Tax Returns only in the
United States and the States of Indiana and Illinois. LLC has filed no Income
Tax returns with any local, state or federal taxing authority.
(c) Each of the Company and LLC has (i) duly filed with the
appropriate Governmental Bodies all Tax Returns required to be filed by it on or
prior to the date hereof, and such Tax Returns are true, correct and complete in
all material respects and (ii) duly paid in full or made provision in accordance
with GAAP for the payment of all Taxes for all periods ending through the date
hereof.
(d) There are no Liens for Taxes upon the LLC Units or the Assets
except for statutory liens for current Taxes not yet due.
(e) Since the date of the Company Balance Sheet, neither the Company
nor LLC has incurred any liability for Taxes other than in the ordinary course
of business consistent with past practice or as contemplated by this Agreement.
(f) Each of the Company and LLC has complied in all material
respects with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes (including, without limitation, withholding of Taxes
pursuant to Sections 1441, 1442, 3121, 3402, 3406 and 4421 of the Code or
similar provisions under any foreign laws) and has, within the time and the
manner prescribed by law, withheld from and paid over to the proper
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Governmental Bodies all amounts required to be so withheld and paid over under
applicable laws.
(g) No audits or other administrative proceedings or court
proceedings are presently pending with any Governmental Body with regard to any
Taxes or Tax Returns of either the Company or LLC, and neither the Company nor
LLC has received a written notice of any pending audits or proceedings. All
information statements have been filed under Section 401 of the Code.
(h) There are no outstanding written requests, agreements, consents
or waivers to extend the statutory period of limitations applicable to the
assessment of any Taxes or deficiencies against the Company or LLC.
(i) Neither the Company nor LLC is a party to any Contract providing
for the allocation or sharing of Taxes.
(j) Neither the Company nor LLC is a party to any Contract or
arrangement that could result, separately or in the aggregate, in the payment of
any "excess parachute payments" within the meaning of Section 280G of the Code.
(k) No power of attorney has been executed by either the Company or
LLC with respect to any matter relating to Taxes which is currently in force.
(l) At all times since the date of formation of LLC, and as of the
Closing, (i) the Company is and has been the sole owner of any and all issued
and outstanding Units of LLC; (ii) LLC has not conducted any business other than
that related to the consummation of the transactions contemplated hereby; (iii)
LLC does not have any assets or liabilities other than, following the Transfer,
the Assets, the Assumed Liabilities, the Excluded Environmental Matters and
assets acquired after the Transfer in the ordinary course of the Business; and
(iv) each of the Company and LLC has treated LLC for all Income Tax purposes as
being disregarded as an entity separate from the Company with the meaning of
Treasury Regulations Section 301.7701-3(b)(1)(ii) (a "Disregarded Entity") and
has not taken or caused or permitted to be taken any action inconsistent with
such treatment or failed to take any action if such failure would be
inconsistent with such treatment.
Section 3.10 Real Property and Riverboat.
(a) Schedule 3.10(a) sets forth the location and a description of
the Owned Property.
(b) Schedule 3.10(b) sets forth the location of the Leased Property.
(c) There are now in full force and effect duly issued certificates
of occupancy, where required, permitting the Real Property, the Riverboat and
the improvements located thereon to be legally used, occupied and operated as
the same presently exist. The Real Property and the Riverboat are used by the
Company or LLC exclusively for the Business. Neither the Real Property nor the
Riverboat violates any material provisions of any applicable Laws, including
without limitation, any building code, fire, health or safety regulations, and
the Company or LLC, as applicable, is in material compliance with all applicable
Laws and restrictions relating to
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the Real Property, the Riverboat or any part thereof; provided, however, that
this Section 3.10(c) shall not include Environmental Laws which shall be covered
by Section 3.20.
(d) The current use of the offices, if any, and other facilities
located on the Riverboat or the Real Property does not violate any Law,
including without limitation, any local zoning or similar land use or government
regulation, where such violation would reasonably be likely to have a Material
Adverse Effect.
(e) Neither the Company nor LLC has made or entered into any
Contracts to sell, mortgage, pledge or hypothecate, lease, sublease, convey,
alienate, transfer or otherwise dispose of the Riverboat or the Real Property,
or any portion thereof.
(f) Neither the Riverboat nor the Real Property is subject to any
outstanding purchase options, and no Person has any right or option to acquire,
or right of first refusal with respect to, the Company's or LLC's interest in
the Riverboat or the Real Property, or any part thereof.
(g) The Real Property is zoned for the lawful development of the
Hotel, and the Company or LLC has obtained to date, and will obtain with respect
to activities conducted by the Company or LLC up to the Closing Date, all
Governmental Approvals required for the lawful construction, development and
operation of the Hotel in accordance with the Plans and Specifications, except
where the failure to do so would not be reasonably expected to have a Material
Adverse Effect. To the knowledge of the Company and LLC, there are no material
impediments to or constraints on the development of the Hotel within the time
frame and for the cost set forth in the Hotel Construction Budget.
(h) The Company and LLC, as applicable, have obtained all
Governmental Approvals and other approvals required for the lawful acquisition,
ownership, use, operation, management and maintenance of the Riverboat as such
is owned, used, operated, managed and maintained and including, but not limited
to, all approvals required by the United States Coast Guard and the Army Corps
of Engineers, except where the failure to do so would not be reasonably expected
to have a Material Adverse Effect.
(i) To the knowledge of the Company, the Riverboat has been
constructed in a workmanlike manner, by duly licensed contractors in accordance
with applicable plans, specifications and Laws, and is in good working order
with no known material defects.
(j) Prior to Closing, LLC shall have provided Boyd Indiana a true
and complete list of each Person who, to the knowledge of the Company and LLC,
possesses keys or security codes for the Riverboat.
Section 3.11 Leases.
(a) All leases of real property leased or subleased by or for the
use or benefit of the Company, LLC or the Business and all leases as to which
the Company or LLC is the lessee or sublessee, and all amendments and
modifications thereof (collectively, the "Leases"), are listed on Schedule
3.11(a) and true, correct and complete copies thereof have been delivered to
Boyd Indiana. All such Leases are valid, binding and in full force and effect
and are enforceable by the Company or LLC, as applicable, in accordance with
their terms (except as such
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enforceability may be affected by bankruptcy, reorganization, moratorium or
similar laws generally affecting creditors' rights and by general principles of
equity) and have not been modified or amended; the Company or LLC, as
applicable, has performed all material obligations required to be performed by
it under each such Lease; and there has been no material breach or default under
any such Leases by the Company or LLC, or, to the knowledge of the Company or
LLC, any other party thereto, nor any such breach or default by the Company or
LLC, or, to the knowledge of the Company or LLC, any other party thereto which
with notice or lapse of time or both would constitute an event of default
thereunder.
(b) There are no oral or written leases, subleases, occupancy
agreements or tenancies in effect pertaining to the Owned Property, and no
parties other than the Company are in possession of the Owned Property.
Section 3.12 Title to Assets.
(a) The Company has and will have until the Transfer, and LLC will
have at the Closing, good, marketable and insurable title (fee title, in the
case of the Owned Property) to, and is, and will be in the case of LLC, the
owner of, the Owned Property (other than Owned Property included in the Excluded
Assets) and such ownership is and will be at the Closing free and clear of any
and all Liens, other than Permitted Liens.
(b) The Company has and will have until the Transfer good and
marketable title to the Riverboat and owns and will own until the Transfer the
Riverboat free and clear of all Liens and LLC, at the Closing, will have good
and marketable title to the Riverboat and will own the Riverboat free and clear
of all Liens, other than Permitted Liens.
(c) The Company has and will have until the Transfer, and LLC will
have at the Closing, good and marketable title to the Assets (other than the
Owned Property and the Riverboat which are covered by Section 3.12(a) and (b)),
free and clear of any and all Liens, other than Permitted Liens.
Section 3.13 Tangible Personal Property. Schedule 3.13(a) lists each
item of Tangible Personal Property (other than inventory and supplies) owned by
the Company or LLC having an initial purchase price in excess of Ten Thousand
and No/100 Dollars ($10,000.00); Schedule 3.13(b) lists each item of Tangible
Personal Property leased by the Company or LLC (other than pursuant to
individual leases having an annual rental of less than Ten Thousand and No/100
Dollars ($10,000.00) or which are terminable by the Company or LLC, as
applicable, within ninety (90) days of the date hereof without penalty) and each
item of Tangible Personal Property having a value of Ten Thousand and No/100
Dollars ($10,000.00) or more used by the Company or LLC and owned or leased by
Persons providing services to the Company or LLC; and Schedule 3.13(c) lists
each live gaming device (including all gaming tables), electronic gaming device
(including all slot machines) and other gaming-related equipment owned, leased
or otherwise used by the Company or LLC. The Tangible Personal Property set
forth on the above-referenced Schedules constitutes substantially all of the
tangible personal property used in the operation of the Business and constitutes
substantially all tangible personal property necessary to conduct the Business
as presently conducted by the Company. The Tangible Personal Property owned by
the Company or LLC and all other material personal property,
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whether tangible or intangible, owned by the Company or LLC is free and clear of
any and all Liens, except for Permitted Liens. All Tangible Personal Property
owned by the Company or LLC (other than Excluded Assets) is located at the Real
Property or the Riverboat, and there is no tangible personal property material
to the operation of the Business located at the Real Property or the Riverboat
which is not owned or leased by the Company or LLC. The Tangible Personal
Property owned or leased by the Company or LLC is in all material respects in
working order, ordinary wear and tear excepted. All the material Tangible
Personal Property owned by the Company or LLC has been maintained in all
material respects in accordance with the past practice of the Company or LLC.
All leased Tangible Personal Property of the Company or LLC is in all material
respects in the condition required of such property by the terms of the lease
applicable thereto during the term of the lease.
Section 3.14 Intellectual Property.
(a) Schedule 3.14 contains a true, correct and complete list of the
Intellectual Property and all license agreements relating thereto to which the
Company or LLC is a party (either as licensor or licensee) (the "License
Agreements"), provided that Schedule 3.14 need not list end-user licenses
granted to the Company or LLC relating to standard "off the shelf" personal
computer software that is generally available from vendors, including software
made available from such vendors on a "shrinkwrap license" basis.
(b) The Company is and until the Transfer will be, and LLC will be
at Closing, the sole and exclusive owner of the Intellectual Property (other
than Intellectual Property licensed from third parties) and Company's rights
under the License Agreements, and all registrations and applications for
registration therefor are currently standing and, until the Transfer will be, in
the name of the Company and will be assigned to LLC on the Transfer Date. The
Intellectual Property (other than Intellectual Property licensed from third
parties), License Agreements and Business Know-How are free and clear of all
Liens, and the Intellectual Property and Business Know-How owned by the Company
or LLC are free of all licenses to third parties. Neither the Company nor LLC
owns or is a party to any License Agreement with respect to any patent or
application therefor. The Intellectual Property owned by the Company or LLC and,
to the knowledge of the Company and LLC, the Intellectual Property licensed from
third parties, is valid and enforceable, all registrations relating to the
Intellectual Property owned by the Company or LLC were validly obtained, and no
such registration has lapsed, expired or been abandoned, or is subject to any
pending or threatened opposition or cancellation proceeding before the United
States Patent and Trademark Office or any other registration authority, except
where such invalidity, unenforceability, lapse, expiration, abandonment or
proceeding would not, individually or in the aggregate, reasonably be expected
to have a material effect on the use by the Company or LLC of such Intellectual
Property. Neither the Company nor LLC knows of any reason why any of the
Company's or LLC's material trademarks or service marks would not be registrable
in any United States jurisdiction. There are no claims pending or, to the
Company's or LLC's knowledge, threatened, and neither the Company nor LLC has
received notice of any claims alleging that the Company's or LLC's activities
infringe upon or constitute the unauthorized use of the proprietary rights of
any third party, or challenging the Company's or LLC's, as applicable, ownership
or the validity or enforceability of the Intellectual Property or the Business
Know-How owned by the Company or the License Agreements. To the Company's and
LLC's knowledge, there are no infringements of the Intellectual Property owned
by the
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Company or the License Agreements by third parties. Neither the Company nor LLC
has entered into any consent, indemnification, forbearance to xxx, or settlement
agreement with any third party relating to the Intellectual Property, Business
Know-How or License Agreements, or the intellectual property or business
know-how of any third party.
Section 3.15 Litigation.
(a) There are no claims, actions, suits, proceedings or
investigations pending or threatened by the Company, LLC or by any Related
Entity (with respect to the Business) at law or in equity or before any
Governmental Body or before any arbitration body.
(b) There are no claims, actions, suits, proceedings or
investigations pending or, to the Company's or LLC's knowledge, threatened
against the Company, LLC or any Related Entity (with respect to the Business),
or involving their respective Assets or the Business, at law or in equity or
before any Governmental Body or any arbitration body which, as of the date of
this Agreement, (i) involves a claim against the Company, LLC or such Related
Entity of more than Ten Thousand and No/100 Dollars ($10,000.00); (ii) seeks any
injunctive relief or punitive damages not covered by insurance against the
Company, LLC or any Related Entity; or (iii) individually or in the aggregate
would reasonably be expected to have a Material Adverse Effect, and neither the
Company nor LLC knows or has any reasonable expectation of any basis for any
such claim, action, suit, proceeding or investigation. Other than shareholder
statutory dissenters' rights, if any, there are no pending or threatened claims,
actions, suits, proceedings or investigations which challenge the legality or
validity of the transactions contemplated hereby or seek damages in excess of
One Hundred Thousand and No/100 Dollars ($100,000.00) in connection with the
consummation of the transactions contemplated hereby. To the knowledge of the
Company and LLC, none of the Company, LLC or any Related Entity is a party or
subject to or in default under any material judgment, order, injunction or
decree of any Governmental Body or arbitration tribunal applicable to it or any
of its respective properties, Assets, operations or the Business.
Section 3.16 Insurance.
(a) Schedule 3.16(a) sets forth a complete and accurate list
reasonably identifying all policies of fire, liability, business interruption,
hull and machinery, protection and indemnity, pollution, product liability,
workers' compensation, health and other forms of insurance presently in effect
with respect to the Company and LLC, true copies of which have heretofore been
delivered to Boyd Indiana.
(b) All such policies are valid, outstanding and enforceable
policies in accordance with their terms (except as such enforceability may be
affected by bankruptcy, reorganization, moratorium or similar laws generally
affecting creditors' rights and by general principles of equity) and provide
insurance coverage for the properties, assets and operations of the Company and
LLC covered thereby and of the kinds, in the amounts and against the risks
customarily maintained by organizations similarly situated. The Company has
kept, and the Company and LLC will keep through the Closing Date, the Riverboat
insured under marine (including navigation and port risk), hull, protection and
indemnity, machinery and pollution liability insurance. Neither the Company nor
LLC has been refused any insurance with respect to any
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aspect of the ownership and operations of the Business, nor has the coverage
been limited by any insurance carrier to which it has applied for insurance or
with which it has insurance during the last three (3) years. All premium and/or
club calls respecting each such policy of insurance have been paid through the
end of each respective policy quarter. No insurance or proceeds thereof have
been assigned by the Company or LLC to any Person.
Section 3.17 Labor Matters.
(a) Each of the Company and LLC is, and has at all times been, in
material compliance with all applicable Laws respecting employment and
employment practices, terms and conditions of employment, wages, hours of work
and occupational safety and health, and is not engaged in any unfair labor
practices as defined in the National Labor Relations Act or other applicable
Law, ordinance or regulations.
(b) There is no labor strike, dispute, slowdown, stoppage or lockout
actually pending, or, to the knowledge of the Company and LLC, threatened
against or affecting the Company, LLC or the Business, and during the past three
(3) years there has not been any such action.
(c) No union represents the employees of either the Company or LLC.
(d) Neither the Company nor LLC is a party to or bound by any
collective bargaining or similar agreement with any labor organization, or work
rules or practices agreed to with any labor organization or employee association
applicable to employees of the Company or LLC.
(e) None of the employees of the Company or LLC is represented by
any labor organization in their capacities as employees of the Company or LLC
and, to the knowledge of the Company and LLC, there are no current union
organizing activities among the employees of the Company or LLC, nor does any
question concerning representation exist concerning such employees.
(f) The Company has delivered to Boyd Indiana a copy of all written
personnel policies, rules or procedures applicable to employees of the Company
or LLC.
(g) None of the Company or LLC has received notice of any unfair
labor practice charge or complaint against the Company or LLC pending or
threatened before the National Labor Relations Board or any other Governmental
Body.
(h) Neither the Company nor LLC has received notice of any grievance
arising out of any collective bargaining agreement or other grievance procedure
against either of such entities.
(i) Neither the Company nor LLC has received notice of any charges
with respect to or relating to any of such entities pending before the Equal
Employment Opportunity Commission or any other Governmental Body responsible for
the prevention of unlawful employment practices.
(j) Neither the Company nor LLC has received notice of the intent of
any Governmental Body responsible for the enforcement of labor or employment
laws to conduct an investigation.
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(k) Neither the Company nor LLC has received notice of any material
complaints, lawsuits or other proceedings pending or threatened in any forum by
or on behalf of any present or former employee of such entities, any applicant
for employment or classes of the foregoing alleging breach of any express or
implied contract of employment, any Law governing employment or the termination
thereof or other discriminatory, wrongful or tortious conduct in connection with
the employment relationship.
(l) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) constitute an event under any benefit plan,
policy, arrangement or agreement or any trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increases in benefits or obligation to
fund benefits with respect to any employee of the Company or LLC. The only
severance agreements or severance policies applicable to the Company or LLC are
the agreements and policies specifically referred to in the Company/LLC
Disclosure Schedule.
Section 3.18 Compliance with WARN Act. Since the enactment of the Worker
Adjustment and Retraining Notification Act of 0000 (xxx "XXXX Xxx"), xxxx of the
Company, LLC and the Business has effectuated (i) a "plant closing" (as defined
in the WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment or facility of any of such
entities or (ii) a "mass layoff" (as defined in the WARN Act) affecting any site
of employment or facility of any of such entities, nor has any of such entities
been affected by any transaction or engaged in layoffs or employment
terminations sufficient in number to trigger application of any similar Law.
None of the employees of any of the Company, LLC or an Affiliate has suffered an
"employment loss" (as defined in the WARN Act) since January 1, 1993.
Section 3.19 Employee Benefit Plans; ERISA.
(a) Schedule 3.19(a)(1) contains a true and complete list of each
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance or termination pay, hospitalization or other medical, life or
other insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program, agreement or arrangement, and each other employee
benefit plan program, agreement or management, whether formal or informal,
written or oral (each, a "Plan"), that is maintained or contributed to at any
time by the Company, LLC or a Related Entity with respect to the Business or,
solely with respect to a Plan that is subject to Section 302 or Title IV of
ERISA, by any other trade or business, whether or not incorporated, which
together with the Company, LLC or a Related Entity would be deemed a "single
employer" within the meaning of Section 4001 of ERISA or Section 414(b), (c),
(m) or (o) of the Code (an "ERISA Affiliate"), or was so maintained or
contributed to within the last six (6) years, for the benefit of any employee,
former employee, consultant, officer or director of the Company or LLC or, if
applicable, any ERISA Affiliate. Schedule 3.19(a)(2) identifies each Plan that
is an "employee benefit plan" within the meaning of Section 3(3) of ERISA (a
"Benefit Plan").
(b) With respect to each Plan, the Company has heretofore delivered
to Xxxx Indiana true and complete copies of each of the following documents to
the extent applicable:
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(i) the current version of the Plan (including all
amendments thereto);
(ii) the annual report with respect to each such Plan for the
last two (2) most recently completed plan years for which such a report was
filed;
(iii) the most recent Summary Plan Description, together with
each Summary of Material Modifications distributed since the most recent Summary
Plan Description;
(iv) if the Plan is funded through a trust or any third-party
funding vehicle, the trust or other funding agreement (including all amendments
thereto) and the latest financial statements of the trust or third-party funding
vehicle thereto;
(v) all Contracts relating to any Plan with respect to which
the Company, LLC or any ERISA Affiliate may have any material liability,
including, without limitation, insurance contracts, investment management
agreements, subscription or participation agreements and record keeping or other
servicing or administration agreements;
(vi) the most recent determination letter received from the
IRS with respect to each Benefit Plan intended to qualify under Section 401 of
the Code; and
(vii) any determinations by a Governmental Authority based on
an examination or audit of the Plans.
All reports, returns and similar documents with respect to the Benefit Plans
required to be filed with any Governmental Body or distributed to any Benefit
Plan participant or beneficiary have been duly and timely filed or distributed,
except where failure to do so would not reasonably be expected to have a
Material Adverse Effect and all reports, returns and similar documents actually
filed or distributed were true, complete and correct in all material respects.
(c) No Benefit Plan is a "multiemployer plan," as such term is
defined in Section 3(37) of ERISA and no Benefit Plan is subject to Title IV or
Section 302 of ERISA. Each of the Benefit Plans is, and has always been,
operated in all material respects in accordance with the requirements of all
applicable Laws. Each of the Benefit Plans intended to be "qualified" within the
meaning of Section 401(a) of the Code, and each related trust intended to be
tax-exempt under Section 501(a) of the Code, has received a favorable
determination letter from the Internal Revenue Service. No such favorable
determination letter has been revoked, and, to the knowledge of the Company,
revocation has not been threatened. To the knowledge of the Company, no event
has occurred and no circumstances exist that would adversely affect the
tax-qualification of such a Benefit Plan. No Benefit Plan has been amended since
the effective date of its most recent determination letter.
(d) All contributions to, and payments from, the Benefit Plans
required to be made by the Company, LLC or any ERISA Affiliate in accordance
with the terms of the Benefit Plans have been timely made as of the last day of
the most recent plan year thereof ended prior to the date of this Agreement, or
will be timely made in accordance with Section 404(a)(6) of the Code. All
required contributions to, and payments from, the Plans for any period on or
before December 31, 1998 that were not required to be made as of such date were
properly accrued and
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reflected on the Company Balance Sheet and will be properly accrued on a monthly
basis through Closing.
(e) No Plan provides benefits, including, without limitation, death
or medical benefits (whether or not insured), with respect to current or former
employees of the Company, LLC or any ERISA Affiliate for periods extending
beyond their retirement or other termination of service (other than (i) coverage
mandated by applicable law; (ii) death benefits or retirement benefits under any
"employee pension plan," as that term is defined in Section 3(2) of ERISA; (iii)
deferred compensation benefits accrued as liabilities on the books of the
Company or an ERISA Affiliate; or (iv) benefits the full cost of which is borne
by the current or former employee (or his beneficiary)).
(f) There has been no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Benefit
Plan; none of the Company, LLC or an ERISA Affiliate has incurred any liability
for any excise tax arising under Section 4975 or 4976 of the Code or civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA and, to the
Company's and LLC's knowledge, no fact or event exists that could give rise to
any such liability with respect to any Benefit Plan; there are no pending, or,
to the knowledge of the Company and LLC, threatened or anticipated claims (other
than routine claims for benefits) by, on behalf of or against any of the Plans,
or any trusts related thereto or any trustee or administrator thereof, and no
litigation or administrative or other proceeding has occurred or, to the
knowledge of the Company and LLC, is threatened involving any Plan or any trusts
related thereto or any trustee or administrator thereof.
(g) No provision of any Benefit Plan that is an "employee welfare
benefit plan," as such term is defined in Section 3(1) of ERISA (each, a
"Welfare Plan"), limits the ability of the Company, LLC or a Related Entity, as
applicable, to amend or terminate such Welfare Plan at any time after the
Closing Date and there have been no written or, to the Company's or LLC's
knowledge, oral communications to employees, former employees or their
respective dependents by the Company, LLC or a Related Entity to the contrary.
The list of plans in Schedule 3.19(a)(1) discloses whether each Welfare Plan is
(i) unfunded; (ii) funded through a "welfare benefit fund," as such term is
defined in Section 419(e) of the Code, or other funding mechanism; or (iii)
insured.
(h) The consummation of the transactions contemplated by this
Agreement will not (i) except as a result of the termination pursuant to Section
2.7 of the Contracts referred to in Schedule 2.7, (a) entitle any current or
former employee or officer of the Company, LLC or a Related Entity associated
with the Business to severance pay, unemployment compensation or any other
similar payment or (b) accelerate the time of payment vesting or increase the
amount of compensation due any such employee or officer or (ii) result in any
prohibited transaction described in Section 406 of ERISA or Section 4975 of the
Code.
(i) No employee of the Company, LLC or a Related Entity with respect
to the Business is a "leased employee" within the meaning of Section 414(n) of
the Code.
(j) With respect to each Benefit Plan,
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(i) no action or claim (other than routine claims for
benefits made in the ordinary course of plan administration for which plan
administrative review procedures have not been exhausted) is pending, or, to the
knowledge of the Company and LLC, threatened or imminent against or with respect
to the Benefit Plan, any employer who is participating (or who has participated)
in any Benefit Plan or any fiduciary (as defined in Section 3(21) of ERISA), of
the Benefit Plan; and
(ii) neither the Company, LLC, any ERISA Affiliate nor any
fiduciary of the Benefit Plan has any knowledge of any facts that could give
rise to any such action or claim.
(k) Each Plan provides that it may be amended or terminated at any
time and, except for benefits protected under Section 411(d) of the Code, all
benefits payable to current employees, terminated employees or any beneficiary
may be amended or terminated by the Company, LLC or the ERISA Affiliate, as
applicable, at any time without liability.
(l) None of the Company, LLC or any ERISA Affiliate has any
liability or is threatened with any liability (whether joint or several) (i) for
any excise tax imposed by Sections 4971, 4975, 4976, 4977 or 4979 of the Code or
(ii) to a fine under Section 502 of ERISA.
(m) All of the Benefit Plans, to the extent applicable, are in
compliance with the continuation of group health coverage provisions contained
in Section 4980B of the Code and Sections 601 through 608 of ERISA.
Section 3.20 Environmental Matters.
(a) Each of the Company, LLC and any Related Entity is in compliance
in all material respects with all applicable Environmental Laws concerning,
affecting or relating to the Business or the Real Property, which compliance
includes, but is not limited to, the possession by such entities of, and their
compliance in all material respects with terms and conditions of, all
Governmental Approvals and certificates of financial responsibility required
under applicable Environmental Laws ("Environmental Permits"). None of the
Company, LLC or any Related Entity has received any communication (written or
oral) that alleges that any such entity is not in such compliance, and there are
no circumstances or conditions that under existing Environmental Laws would
reasonably be expected to prevent or interfere with such compliance in all
material respects in the future. All Environmental Permits currently held by the
Company or LLC pursuant to Environmental Laws are identified in Schedule
3.20(a).
(b) There is no Environmental Claim pending or, to the Company's or
LLC's knowledge, threatened against the Company, LLC or any Related Entity or,
to the Company's and LLC's knowledge, pending or threatened against any Person
whose liability for any Environmental Claim the Company, LLC or a Related Entity
has contractually retained or assumed.
(c) There are no past or present actions, activities, circumstances,
conditions, events or incidents involving the Company, LLC or a Related Entity,
or, to the knowledge of the Company, any other Person, including, without
limitation, the presence, release, emission, discharge or disposal by the
Company, LLC or any other Person of any Materials of
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Environmental Concern (except in compliance with Environmental Laws) at, under
or in the vicinity of any facility currently or formerly owned or operated by
the Company, LLC or a Related Entity, that could form the basis of any material
Environmental Claim against any Person whose liability for any Environmental
Claim the Company, LLC or a Related Entity has contractually retained or
assumed.
(d) Without in any way limiting the generality of the foregoing, (i)
all on-site and off-site locations where the Company, LLC or a Related Entity
has stored, disposed or arranged for the disposal of Materials of Environmental
Concern are identified in Schedule 3.20(d); (ii) all known underground storage
tanks, and the capacity and contents of such tanks, located on property owned or
leased by the Company, LLC or a Related Entity are identified in Schedule
3.20(d); (iii) there is no asbestos contained in, or forming part of any
building, building component, vessel, structure or office space owned or, to the
knowledge of the Company or LLC, leased by the Company, LLC or a Related Entity;
and (iv) no polychlorinated biphenyls (PCBs) are used or stored at any property
owned or, to the knowledge of the Company or LLC, leased by the Company, LLC or
a Related Entity.
(e) All dredging operations and disposal of dredge spoils by or on
behalf of the Company and LLC have been carried out in material compliance with
all applicable Environmental Laws, and the Company and LLC are aware of no
facts, conditions or circumstances, other than conditions imposed by the
Company's or LLC's Environmental Permits or other requirements of Law that have
been specifically applied by a Governmental Body to the Company's or LLC's
dredging operations, that could prevent or restrict in any material manner the
continuation of such dredging in substantially the same manner and at
substantially the same locations as previously carried out.
(f) Each of Company and LLC has provided or otherwise made available
to Xxxx Indiana copies or other evidence (as appropriate) of all material
communications, oral or written (whether from a Governmental Body, citizens'
group, employee or other Person), which the Company and LLC has received
regarding (i) alleged or suspected noncompliance of the Real Property or the
Riverboat with any Environmental Laws or Environmental Permits; (ii) alleged or
suspected liability of the Company, LLC or a Related Entity under any
Environmental Law; or (iii) the presence of any Materials of Environmental
Concern or other condition associated with the Riverboat and Real Property which
could give rise to potential liability under Environmental Laws.
(g) There are no Liens on the Real Property which arose pursuant to
or in connection with any Environmental Law or Environmental Claim and no
government actions have been taken or, to the knowledge of the Company or LLC,
threatened to be taken or are in process which could subject the Real Property
to such Liens.
(h) Schedule 3.20(h) contains a list of each environmental report,
study, analysis, test results or similar items in the possession of the Company
or LLC with respect to the environmental condition of the Real Property
(collectively, the "Company Environmental Reports"). The Company has previously
delivered or made available to Xxxx Indiana true and complete copies of each
Company Environmental Report. To the Company's and LLC's knowledge, none of the
matters disclosed by the Company Environmental Reports would,
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individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company and LLC have no knowledge of any facts or
circumstances relating to the environmental condition of any Real Property that
would reasonably be expected to result in a Material Adverse Effect.
Section 3.21 No Condemnation or Expropriation. Neither the whole nor any
portion of the Real Property or any other Assets is subject to any governmental
decree or order to be sold or is being condemned, expropriated or otherwise
taken by any public authority, with or without payment of compensation therefor,
nor has any such condemnation, expropriation or taking been proposed.
Section 3.22 Suppliers. Schedule 3.22 contains a true and complete list
of the names and addresses of the twenty-five (25) largest suppliers (indicating
approximate dollar volume for each) of products and services to the Company
during the twelve (12) months ended December 31, 1998, indicating the existing
contractual arrangements, if any, for continued supply from each such firm.
Neither the Company nor LLC has received any notice of, and knows of no
reasonable basis for, any development which threatens to affect adversely its
arrangements with its suppliers that would reasonably be expected to have a
Material Adverse Effect. There are no supply arrangements between the Company or
LLC and the shareholders of the Company or Affiliates of the shareholders of the
Company which are on terms materially more or less favorable to a such entity
than could be obtained by it in transactions with unaffiliated third parties.
Section 3.23 Contracts and Commitments.
(a) None of the Company, LLC or a Related Entity is party to or
bound by any Contract which is material to the Business or the prospects of the
Business or which involves, or is reasonably likely to involve, the expenditure
or receipt by the Company or LLC after the date of this Agreement of more than
Twenty-Five Thousand and No/100 Dollars ($25,000.00). Subject to obtaining any
required consents, the legal enforceability after the Closing by LLC of the
Material Assumed Contracts will not be affected in any material respect by the
Transfer or the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.
(b) No material purchase commitment of any of the Company or LLC, or
by which either of them is bound, is materially in excess of the normal,
ordinary and usual requirements of the Business or, to the knowledge of the
Company or LLC, is at an excessive price.
(c) Neither the Company nor LLC is a party to or bound by (i) any
Contract (other than this Agreement) with its shareholders, members or former
shareholders or members, or any Person known to the Company or LLC to be an
Affiliate of a shareholder, member, or former shareholder or member; (ii) any
Contract with officers, employees, agents, consultants, advisors, salesmen,
sales representatives, distributors or dealers that is not cancelable by the
Company or LLC, as applicable, at will without liability, penalty or premium;
(iii) any Contract providing for the payment of any bonus or commission based on
sales or earnings; (iv) any Contract that contains any severance or termination
or change in control pay liability or obligation; (v) any Contract for the
purchase or sale of any security (other than this Agreement); (vi) any Contract
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for the borrowing of money (or guarantee of indebtedness); (vii) any Contract
for leasing personal property which requires annual payments in excess of Fifty
Thousand and No/100 Dollars ($50,000.00) or the term of any of which exceeds two
(2) years; (viii) any Contract relating to express product or service
warranties; (ix) any Contract containing a covenant not to compete by the
Company, LLC or a Related Entity; (x) any Contract granting a material Lien,
security interest or other material encumbrance on any property or asset of the
Company, LLC or any Related Entity, other than Permitted Liens; (xi) any
Contract providing for exclusive purchases by or from the Company, LLC or any
Related Entity (with respect to the Business) or containing a requirement
purchase obligation; (xii) any Contract with the City or any other Governmental
Body; (xiii) any Contract providing for administration, service, utilization
review, adjustment, claims management or similar functions relating to
insurance, litigation or Plans of the Company, LLC or any Related Entity (with
respect to the Business); or (xiv) any Contract for the sale of any of the
Assets or rights of the Company, LLC or any Related Entity (with respect to the
Business) outside of the ordinary course of business, except as contemplated by
this Agreement.
(d) None of the Company, LLC or a Related Entity (with respect to
the Business) has given any power of attorney (whether revocable or irrevocable)
to any Person that is or may hereafter be in force for any purpose whatsoever.
(e) None of the Company, LLC or a Related Entity (with respect to
the Business) is paying, or has any obligation to pay, any pension, deferred
compensation or retirement allowance to any Person.
(f) Schedule 3.23(f) contains (i) a true and complete list of any
Contract providing for aggregate payments to or by the Company or LLC in excess
of Fifty Thousand and No/100 Dollars ($50,000.00) and any other Contract that is
necessary to operate the Business and (ii) a separate list or indication setting
forth any such Contract in (i) that will be a Material Assumed Contract
("Material Assumed Contract"). In addition to the updating permitted by Section
5.7, upon mutual agreement of the Company and Xxxx Indiana, Schedule 3.23(f) may
be amended after the date of this Agreement to add additional agreements as
Material Assumed Contracts. Each Material Assumed Contract of the Company is
valid and binding upon such entity and, to the knowledge of the Company and LLC,
is valid and binding upon each other party thereto, and is in full force and
effect and enforceable by the Company or LLC, as applicable, in accordance with
its terms (except as such enforceability may be affected by bankruptcy,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by general principles of equity). Each of the Company and, after the
Transfer Date as to any Material Assumed Contract, LLC, has performed all
material obligations required to be performed by it under each Material Assumed
Contract to which such entity is a party, and there has been no breach or
default or claim of default by such entity or, to the knowledge of the Company
or LLC by any other party thereto, under any provision thereof and no event has
occurred which, with or without notice, the passage of time or both, would
constitute a default by the Company or, after the Transfer Date as to any
Material Assumed Contract, LLC, or, to the knowledge of the Company and LLC any
other party thereto, under any provision thereof or which would permit
modification, acceleration or termination of any Material Assumed Contract by
any other party thereto or by the Company or LLC, except for such defaults which
in the aggregate would not reasonably be expected to have a Material Adverse
Effect.
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(g) The Construction Contracts are in full force and effect and
enforceable by the Company and, after the Transfer Date, LLC in accordance with
their terms (except as such enforceability may be affected by bankruptcy,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by general principles of equity). Each of the Company and, after the
Transfer Date, LLC has performed all material obligations required to be
performed by it under the Construction Contracts, and there has been no breach
or default or claim of default by the Company, or after the Transfer Date, LLC,
or, to the knowledge of the Company or LLC, by any other party thereto, under
any provision thereof and no event has occurred which, with or without notice,
the passage of time or both, would constitute a default by the Company or LLC
or, to the knowledge of the Company or LLC, any other party thereto, under any
provision thereof or which would permit modification, acceleration or
termination of the Construction Contracts by any other party thereto or by the
Company or LLC. To the knowledge of the Company or LLC, there are no facts or
circumstances that exist which would reasonably be expected to cause the Hotel
Construction Budget to exceed Eighteen Million Six Hundred Ten Thousand Six
Hundred Thirty-Four and No/100 Dollars ($18,610,634.00) (the "Maximum Hotel
Cost"). The Company has full power and authority to assign the Construction
Contracts to LLC pursuant to the Assignment of Contracts.
(h) True, complete and correct copies of each of the Contracts set
forth in Schedule 3.23(f) have heretofore been provided to Xxxx Indiana by the
Company.
Section 3.24 Compliance with Applicable Laws.
(a) (i) Each of the Company and LLC and their Affiliates has in the
past complied and is presently complying with all applicable Laws except for
such failures to comply that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; (ii) none of the
Company, LLC or a Related Entity has received notification of any asserted
present or past failure to so comply; and (iii) to the knowledge of the Company
and LLC, each of the Company and LLC is in compliance in all material respects
with all applicable Laws governing or relating to the current or contemplated
casino and gaming activities and operations of the Company and LLC, including
without limitation all Gaming Laws.
(b) To the knowledge of the Company, the Company has and will have
in effect until the Transfer Date, and LLC will have in effect after the
Transfer Date, all Governmental Approvals necessary for them to acquire, own,
lease or operate the Assets and to carry on the Business as now conducted other
than such Governmental Approvals the absence of which would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, and
there has occurred no default under any such Governmental Approval other than
such defaults which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. The Company has obtained and
maintained and will maintain until the Transfer Date, and after the Transfer
Date, LLC will obtain and maintain, in full force and effect all United States
Coast Guard permits and approvals, United States Army Corps of Engineers permits
and approvals and all other material Governmental Approvals, certificates,
licenses and permits necessary to operate (including all matters related to the
cruising schedule and route) and dock the Riverboat in the manner in which it is
currently operated. The Riverboat has been operated in material compliance with
all United States Coast Guard documentation and inspection requirements and the
Riverboat is, as of the Transfer Date entitled to be, documented
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as a vessel of the United States and authorized to engage in the trade in which
the vessel is operating. The Company has complied, and will comply until the
Transfer Date, and has caused, and will cause until the Transfer Date, the
Riverboat to comply, and, after the Transfer Date, LLC will comply and will
cause the Riverboat to comply, in all material respects with all Laws and
Governmental Approvals applicable to the ownership or operation of the
Riverboat.
(c) The Company holds, and will hold until the Transfer Date, and,
after the Transfer Date, LLC will hold, the Gaming License, and the Gaming
License is in full force and effect and has not been revoked or suspended, and
there has occurred no material violation under the Gaming License. The Company
has maintained and will maintain until the Transfer Date, and, after the
Transfer Date, LLC will maintain, at all times reserves for working capital,
capital improvements, replacements and/or contingencies to the extent, and in
the amounts, required by the Gaming Laws, including the cash reserve
requirements thereunder.
(d) Neither the Company nor any Affiliate of the Company has (i)
ever applied for a casino, racing or other gaming license in any state or other
jurisdiction and been denied; (ii) experienced any revocation or failure to
renew any such license; or (iii) not applied for any such license or renewal
after being informed orally or in writing by any regulatory authority in any
state or other jurisdiction, or any representative of such regulatory authority,
that the Company or such Affiliate of the Company, as the case may be, would be
denied such a license or renewal if it were applied for.
(e) The Company has given and will provide Xxxx Indiana access to
any of the following in the Company's possession: (i) copies of all material
correspondence between the Indiana Gaming Commission and the Company relating to
the Company's compliance with the rules and regulations of the Indiana Gaming
Commission and the terms of the Gaming License or the transfer to LLC of the
Gaming License; (ii) a true and complete copy of the Company's and LLC's Gaming
Application for an Owner's License filed with the Indiana Gaming Commission
(excluding Personal Disclosure Forms of the Company's shareholders or LLC's
members, as applicable), and any and all amendments, renewals and updates made
thereto; and (iii) all correspondence between the Indiana Gaming Commission and
the LLC. Except as disclosed in such correspondence and such applications,
neither the Company nor LLC is aware of any facts or circumstances relating to
the conduct of the Company or LLC, or any director, officer, employee, member or
shareholder of the Company or LLC that would reasonably be expected to cause the
Indiana Gaming Commission to revoke, suspend or fail to renew the Gaming License
(or transfer the Gaming License to LLC) or take disciplinary action against the
Company, LLC, any Related Entity or any shareholder or equityholder thereof.
(f) Neither Company nor LLC, nor, to the Company's and LLC's
knowledge, any of their Affiliates, has made any payments to any Person in
connection with the Business, which payments violate applicable Law, including
without limitation the Foreign Corrupt Practices Act.
Section 3.25 Bank Accounts. Schedule 3.25 sets forth the names and
locations of all banks in which LLC has a bank account or safe deposit box, if
any, and the names of all Persons authorized to draw thereon or to have access
thereto. At the Closing, the Company and LLC will deliver to Xxxx Indiana copies
of all records, if any, including all signature or authorization cards,
pertaining to such bank accounts and safe deposit boxes.
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Section 3.26 Assets Necessary to Business. The Company has and will have
until the Transfer Date, and after the Transfer Date LLC will have, good, valid
and marketable title to all material property and assets, real, personal and
mixed, tangible and intangible, and all leases, licenses and other agreements,
necessary to permit LLC to carry on the Business as presently conducted.
Section 3.27 Commissions. There are no claims for brokerage commissions
or finder's fees incurred by reason of any action taken by any of the Company,
LLC, any Related Entity or any shareholder or member thereof.
Section 3.28 Disclosure of All Material Facts. The Company and LLC have
disclosed to Xxxx Indiana in writing in or pursuant to this Agreement all
information requested by Xxxx Indiana. No representation or warranty to Xxxx
Indiana contained herein, and no statement contained in any certificate,
schedule, list or other writing furnished to Xxxx Indiana pursuant to the
provisions of this Agreement, when considered in the context of the other
representations, warranties, statements and information so delivered, contains
any untrue statement of a material fact or omits to state a material fact which
is necessary in order to make the information given by or on behalf of the
Company or LLC to Xxxx Indiana or their representatives prior to the Closing not
misleading.
Section 3.29 City Matters.
(a) The transactions contemplated hereby, including the Transfer to
LLC and the sale of the LLC Units to Xxxx Indiana, do not and will not violate
or constitute a default under any Contracts between the City and any of the
Company, LLC, any Related Entity or a shareholder or member thereof, including
without limitation, the Development Agreement.
(b) None of the Company, LLC or any Related Entity is, nor will be
as of the Closing Date, in material breach or violation of any such Contract
referenced in Section 3.29(a).
(c) The City has not asserted the existence of any violation, breach
or default under any such Contract referenced in Section 3.29(a). The City has
not made any such assertion with regard to which the assertion (in light of the
likelihood that the City will take further action in connection therewith) or
the alleged violation (in light of the likelihood that the assertion is correct
and the consequences if it is correct) would reasonably be expected to have a
Material Adverse Effect.
(d) The Development Agreement is in full force and effect and
enforceable by the Company until the Transfer, and, after the Transfer, by LLC,
in accordance with its terms except as such enforceability may be affected by
bankruptcy, reorganization, moratorium or similar laws generally affecting
creditor's rights and by general principles of equity. The Company and LLC have
performed all material obligations required to be performed by either of them to
date under the Development Agreement, and there has been no breach or default or
claim of default by the Company or LLC or, to the knowledge of the Company or
LLC, by any other party thereto under any provision thereof, and no event has
occurred which, with or without notice, the passage of time or both, would
constitute a default by the Company or LLC, to the knowledge of the Company or
LLC, any other party thereto under any provision thereof or which would permit
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modification, acceleration or termination of the Development Agreement by any
other party thereto or by the Company or LLC. Through March 31, 1999, the
Company had expended the amount shown on Schedule 3.29(d) on the Hotel. As of
the date of this Agreement, the Company has expended an amount in excess of that
required by Section 2.6 of the Development Agreement relating to land
acquisition, the "On-Site and Off Site Improvement Work" and the "Riverboat
Complex Work" (as such quoted terms are defined in the Development Agreement).
The City has approved the Plans and Specifications and all applicable appeal
periods to such approval have expired. The Company has full power and authority
to assign the Development Agreement to LLC pursuant to the Assignment of
Development Agreement.
Section 3.30 Year 2000. All material software, hardware, systems,
computer systems, equipment and other business processes (collectively, the
"Systems") of or utilized by the Company or LLC in, and material to the
operation of, the Business are Year 2000 Compliant in all material respects. The
Company or LLC has received assurances from the lessors or licensors of all such
systems owned by others and used by the Company or LLC in the Business that such
systems are Year 2000 Compliant in all material respects. "Year 2000 Compliant"
shall mean that the occurrence in or use by any System of dates on or after
January 1, 2000 ("Millennial Dates") will not adversely affect its performance
at any level with respect to date-dependent data, computations, output or other
functions (including, without limitation, calculating, comparing and
sequencing).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BOYD INDIANA AND BGC
Except as set forth in the corresponding subsection of the disclosure
letter delivered to the Company, LLC and each Individual Covenantor at or prior
to the execution of this Agreement (the "Buyer's Disclosure Schedule"), Boyd
Indiana and BGC, jointly and severally, represent and warrant to the Company,
LLC and each Individual Covenantor, as of the date of this Agreement and as of
the Closing Date (unless a contrary date is indicated below), as follows:
Section 4.1 Organization. BGC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. Boyd
Indiana is a corporation duly organized, validly existing and in good standing
under the laws of the State of Indiana.
Section 4.2 Authority. Each of BGC and Boyd Indiana has the corporate
power and authority to execute, deliver and perform this Agreement and the other
instruments and documents required or contemplated hereby. BGC and Boyd Indiana
will each deliver to the Company prior to the Closing a complete and correct
copy, certified by its Secretary, of the resolutions heretofore duly and validly
adopted by its Board of Directors evidencing such authorization (which
resolutions will not have been rescinded prior to and will be in full force and
effect on the date of the Closing). No other corporate act or proceeding on the
part of Boyd Indiana, BGC or their respective shareholders is necessary to
authorize this Agreement or the other documents and instruments to be executed
and delivered by Boyd Indiana and BGC pursuant hereto or the transactions
contemplated hereby or thereby.
Section 4.3 Binding Effect, No Violation, Consents. This Agreement
constitutes, and, when executed and delivered, the other documents, instruments
or third party approvals to be executed and delivered by Boyd Indiana and BGC
pursuant hereto will constitute, valid and
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binding agreements of Boyd Indiana and BGC, enforceable in accordance with their
respective terms (except as such enforceability may be affected by bankruptcy,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by general principles of equity), and (assuming receipt of the consents,
approvals and authorizations specifically contemplated by the next sentence)
neither the execution and delivery of this Agreement or the other documents and
instruments to be executed and delivered by Boyd Indiana or BGC pursuant hereto,
nor the consummation by Boyd Indiana and BGC of the transactions contemplated
hereby or thereby will (i) violate or conflict with or result in any breach of
any provision of the Articles of Incorporation or Bylaws of Boyd Indiana or BGC;
(ii) violate or conflict with or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under or will
result in the termination of, or accelerate the performance required by, or
result in the creation of any Lien upon any of the assets under, any Contract to
which Boyd Indiana or BGC is a party or by which its assets or properties may be
bound or affected; or (iii) violate any Law applicable to BGC and Boyd Indiana,
excluding from the foregoing clauses (ii) and (iii) such defaults, rights and
violations which, in the aggregate, would not reasonably be expected to have a
material adverse effect on the ability of Boyd Indiana or BGC to perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby. Except for the consents required under the Gaming Laws, the consent of
the City under the Development Agreement and the applicable requirements of the
HSR Act, the consent of the United States Coast Guard to the transfer of the
Riverboat, and the consents of the Army Corps of Engineers and the Indiana
Department of Natural Resources, no Governmental Approval or consent, approval,
authorization or action by, notice to or filings with any other Person is
required in connection with the execution of this Agreement, the other documents
and instruments to be executed and delivered by Boyd Indiana and BGC pursuant
hereto or the consummation by Boyd Indiana and BGC of the transactions
contemplated hereby or thereby, except in the case of consents, approvals,
authorizations, actions or filings where the failure to obtain such consents and
approvals and give such notice or make such filing would not reasonably be
expected to have a material adverse effect on the ability of Boyd Indiana and
BGC to perform their respective obligations under this Agreement or to
consummate the transactions contemplated hereby.
Section 4.4 Litigation. There are no claims, actions, suits, proceedings
or investigations pending or threatened by or against Boyd Indiana or BGC, at
law or in equity or before or by any Governmental Body, other than claims,
actions, suits, proceedings or investigations pending or threatened which
individually or in the aggregate would not reasonably be expected to have a
material adverse effect on the ability of Boyd Indiana and BGC to perform their
obligations under this Agreement or to consummate the transactions contemplated
hereby, and neither Boyd Indiana nor BGC knows or has any reason to know of any
basis for any such claim, action, suit, proceeding or investigation.
Section 4.5 Commissions. There are no claims for brokerage commissions
or finder's fees incurred by reason of any action taken by Boyd Indiana or BGC
in connection with the transactions contemplated by this Agreement.
Section 4.6 Disclosure of All Material Facts. No representation or
warranty of Boyd Indiana or BGC contained herein, and no statement contained in
any certificate, schedule, list or other writing furnished to the Company, LLC
or any Individual Covenantor pursuant to the
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provisions of this Agreement, when considered in the context of the other
representations, warranties, statements and information so delivered, contains
any untrue statement of a material fact or omits to state a material fact which
is necessary in order to make the information given by or on behalf of Boyd
Indiana or BGC to the Company, LLC or any Individual Covenantor, or their
respective representatives prior to the Closing not misleading.
ARTICLE V
COVENANTS OF THE COMPANY AND LLC
Each of the Company and LLC covenants and agrees with Boyd Indiana that,
from the date hereof until the Closing, it will do (or cause to be done) the
following:
Section 5.1 Operation of the Business. Other than as disclosed in
Schedule 5.1, each of the Company and LLC (i) will conduct its respective
business (including, without limitation, the management of Working Capital)
diligently, only in the ordinary course and substantially in the same manner as
heretofore conducted; provided, however, that (A) the Company and LLC may
declare and pay certain cash dividends or cash distributions prior to the
Closing in amounts greater than such entity has paid historically, so long as
the LLC Closing Date Working Capital Amount shall be greater than or equal to
Zero and No/100 Dollars ($0.00) and (B) that the Company and LLC may take such
actions outside the ordinary course of business as required by Law or as
expressly contemplated or required by this Agreement, including the transfer to
LLC of the Assets and the assumption by LLC of the Assumed Liabilities and (ii)
will obtain Boyd Indiana's consent to any business decision reasonably likely to
have a material financial or operational effect on the Business, the Company or
LLC. Without limiting the foregoing, unless Boyd Indiana otherwise consents in
advance in writing and except as disclosed in Schedule 5.1:
(a) The Company and LLC will give prompt notice to Boyd Indiana of
(i) any breach or default (or notice thereof) of any Material Assumed Contract
or (ii) any event that has resulted or would reasonably be expected to result in
a Material Adverse Effect.
(b) The Company and LLC will not incur or guarantee any obligation
or liability (whether absolute, accrued, contingent or otherwise and whether due
or to become due) material to the Business, the Company or LLC or enter into any
Contract that (had such Contract been in existence on the date hereof) would
have been required to be set forth as a Material Assumed Contract on Schedule
3.23(f) or amend any of their respective Articles of Incorporation, Bylaws,
Articles of Organization, operating agreements or other organizational or
governing documents, as applicable.
(c) The Company and LLC will (i) make such capital expenditures as
are necessary to maintain its Assets and Business consistent with past-practice
in accordance with existing commitments and (ii) not make other capital
expenditures except (A) with the prior written consent of Xxxx Indiana (which
Xxxx Indiana shall not unreasonably withhold with respect to capital
expenditures that do not involve any post-Closing liability to or obligation or
commitment of LLC or Boyd Indiana) ("Approved Capital Expenditures"); or (B) as
required to meet an emergency (it being understood and agreed that the Company
shall promptly notify Boyd Indiana of any such emergency and the emergency
expenditures and other actions to be taken by the Company and LLC in response
thereto).
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(d) Except as set forth in Schedule 5.1(d), neither the Company nor
LLC will pay, discharge or satisfy any material Lien or liability (whether
absolute, accrued, contingent or otherwise and whether due or to become due),
other than liabilities shown on the Company Balance Sheet, Excluded Liabilities,
and liabilities incurred after the date thereof in the ordinary course of
business in normal amounts, and no such payment, discharge or satisfaction shall
be effected other than in accordance with the ordinary payment terms relating to
the liability paid, discharged or satisfied.
(e) Neither Company nor LLC will permit or allow any of their
respective properties or assets, real, personal or mixed, tangible or
intangible, to be subjected to any material Lien, except for any Permitted
Liens.
(f) Except as set forth in Schedule 5.1(f), neither the Company nor
LLC will cancel any debts or claims except in the ordinary course of business
and consistent with past practice, or waive any rights of material value or,
except for inventory sold in the ordinary course of business, disposal of
obsolete assets and the transfer of the Assets in accordance with this
Agreement, sell, transfer or convey any of their respective properties or
assets, real, personal or mixed, tangible or intangible, except in the ordinary
course of business consistent with past practice and except for Excluded Assets
and Excluded Liabilities.
(g) Neither the Company nor LLC will dispose of or permit to lapse
any material Intellectual Property other than the transfer to LLC of the
Intellectual Property as contemplated by this Agreement.
(h) Except as provided in Section 3.19, neither the Company nor LLC
will adopt, amend or terminate any Benefit Plan, except as required by law and
will not enter into any employment contract or compensation arrangement of any
kind whatsoever, or change (including, without limitation, any change pursuant
to any bonus, pension, profit-sharing or other plan, commitment, policy or
arrangement) the compensation payable or to become payable to any of their
respective officers, directors, employees or agents, except for such changes
which are in the ordinary course of business and are not material or are
required by law. No ERISA Affiliate will take any of the actions described in
this Section 5.1(h) with respect to any defined benefit pension plan.
(i) None of the Company, LLC or any ERISA Affiliate will make any
pension, retirement, profit-sharing, bonus or other employee welfare or benefit
payment or contribution, other than in the ordinary course of business and
consistent with past practice except that the Company may accelerate bonus and
401(k) plan payments (but not vesting under the 401(k) plan), provided that all
such payments are fully reflected in the computation of the LLC Preliminary
Working Capital Amount.
(j) Neither the Company nor LLC will declare, pay or make, or set
aside for payment or making, any dividend or other distribution (other than cash
dividends or distributions) in respect of its capital stock, Units or other
securities, or directly or indirectly redeem, purchase or otherwise acquire any
of the capital stock or other securities of either of such entities.
(k) LLC will not subdivide or in any way reclassify the LLC Units.
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(l) LLC will not (i) issue, grant or sell any Units or any equity
interest or security or (ii) issue, grant or sell any security, option, warrant,
call, subscription or other right of any kind, fixed or contingent, that
directly or indirectly calls for the issuance, sale, pledge or other disposition
of any equity interest or security.
(m) Neither Company nor LLC will make any change in any accounting
principles, practices or methods, including their principles, practices or
methods relating to calculation of reserves for receivables.
(n) Other than the transfer of the Assets referred to in Section 2.1
and the termination of the Contracts referred to in Section 2.7, in each case in
accordance with this Agreement, neither the Company nor LLC will pay, loan, or
advance any amount to or in respect of, or sell, transfer or lease any property
or assets (real, personal or mixed, tangible or intangible) to, or enter into
any transaction with or for the benefit of, any of their respective officers,
directors or managers or any Affiliate of any of their respective officers,
directors, managers or any of the shareholders or members or any Affiliate of
any of its shareholders or members.
(o) Neither the Company nor LLC will enter into any lease of real
property or material lease of personal property (other than, in the case of
leases that would otherwise expire and that constitute an Assumed Contract,
renewals thereof or the entering into of a replacement lease as provided in
Section 5.1(p)), without Boyd Indiana's consent, provided that, if the Company
does not enter into such a lease (including any such renewal) as a result of
Boyd Indiana's refusal to consent to such lease, the failure to enter into such
lease will not be deemed to constitute a violation of this Section 5.1.
(p) Except as provided in Section 3.23, neither the Company nor LLC
will terminate or amend, or fail to perform any of its material obligations or
cause any material breach under, any Assumed Contract. In the event that an
Assumed Contract is scheduled to terminate prior to the Closing Date, the
Company will notify Boyd Indiana and will consult with Boyd Indiana as to
whether such a contract or program should be renewed. If it is determined that
any such Assumed Contract should be renewed, the Company and LLC will exercise
all commercially reasonable efforts to renew such Assumed Contract.
(q) Each of the Company and LLC will use all commercially reasonable
efforts to preserve intact the existing relationships with its suppliers,
customers and employees and others with which it has business relationships and
shall continue marketing programs, billboard advertisements, promotions,
advertising, level of complementary rooms and benefits, player tournaments and
events, bus programs and similar activities in the ordinary course of business
consistent with past practice. In that regard, the Company and LLC will not
curtail marketing expenditures from historic levels, and will preserve billboard
leases, marketing contracts and bus programs. In the event a billboard,
marketing contract or bus program is subject to renewal, the Company will notify
Boyd Indiana and will consult with Boyd Indiana as to whether such a contract or
program should be renewed. The Company and LLC will permit Boyd Indiana, in
consultation and cooperation with the representatives of such entities, to
contact suppliers, customers and employees. The Company agrees to work with Boyd
Indiana to facilitate a transition marketing program that will insure sufficient
marketing programs exist for the operation of the Business by Boyd Indiana and
LLC after the Closing Date (the "Transition
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Marketing Program"). Beginning not later than sixty (60) days prior to the
estimated Closing Date, the Company and Boyd Indiana will implement such
marketing programs, surveys, promotions, advertising and similar activities
reasonably requested by Boyd Indiana in connection with the Transition Marketing
Program, and Boyd Indiana will pay all out-of-pocket expenses of implementing
the Transition Marketing Program to the extent such expenses are in excess of
historical level expenditures.
(r) Each of the Company and LLC will maintain (or replace with
substantially similar coverage or increased coverage as required by the Gaming
Commission) the insurance referred to in Schedule 3.16(a).
(s) Each of the Company and LLC will duly comply in all material
respects with all Laws applicable to such entity and its properties, operations,
business and employees, except for failures to comply that in the aggregate
would not reasonably be expected to have a Material Adverse Effect. The Company
and LLC will maintain at all times reserves for working capital, capital
improvement, replacements and/or contingencies to the extent, and in the
amounts, required by all applicable Gaming Laws. The Company, and LLC after the
transfer of the Assets, will own and operate the Riverboat at all times in
material compliance with its United States Coast Guard marine document and all
applicable stability letters. The Company, and LLC after the transfer of the
Assets, will maintain the Riverboat in good working order, subject to ordinary
wear and tear, in accordance with the past practice of the Company. The Company,
and LLC after the transfer of Assets, will comply, and cause the Riverboat to
comply, in all material respects with all Laws or Governmental Approvals
applicable to the ownership or operation of the Riverboat, except for failures
to comply that in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
(t) Neither the Company nor LLC will change any of the Company's
current policies or practices relating to the extension of credit to customers
or the collection from customers of receivables arising from gaming operations.
Section 5.2 Access. The Company and LLC will permit Boyd Indiana and
their authorized representatives at all reasonable times, and upon reasonable
notice, to have access to and to examine all premises, properties, and Books and
Records and other information of the Company and LLC (including the right to
make extracts therefrom or copies thereof), and will cooperate with Boyd Indiana
in their investigation of the Company and LLC. Each of the Company and LLC will
permit representatives of Boyd Indiana to consult with its management personnel
concerning all financial and operational matters relating to the Company, LLC or
the Business and will make available its management personnel to consult with
such representatives. The Company and LLC will promptly furnish to Boyd Indiana
all existing surveys and title and lien searches, examinations, binders and
commitments as are reasonably available. The Company and LLC will promptly
furnish to Boyd Indiana such other documents relevant to the transaction
contemplated hereby as may reasonably be requested from time to time.
Section 5.3 Existence. Except as expressly contemplated by and in
accordance with Section 2.1, the Company and LLC will take such action as may be
necessary to maintain, preserve, renew and keep in full force and effect each
such entity's existence (corporate or otherwise), rights and franchises and will
not amend its Articles of Incorporation or Xxxxxx,
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Articles of Organization, operating agreement or other applicable organizational
or governing document.
Section 5.4 Consents. The Company and LLC shall use their reasonable
best efforts to, at the expense of the parties as provided in Section 13.2,
obtain prior to the Closing all material consents, other than Governmental
Approvals which are governed by Section 5.5, necessary to the consummation of
the transactions contemplated hereby, including, without limitation, such other
material non-governmental consents as Boyd Indiana or their counsel shall
reasonably determine to be necessary, including any required consents to the
assignment of the Material Assumed Contracts. All such consents shall be in
writing, and executed counterparts thereof shall be delivered to Boyd Indiana
promptly after receipt thereof by the Company or LLC but in no event later than
immediately prior to the Closing.
Section 5.5 Governmental Approvals. Each of the Company and LLC will, at
the expense of the parties as provided in Section 13.2, respectively, as
promptly as practicable, make any required governmental filings, including
filings pursuant to the Gaming Laws and the HSR Act, obtain any required
Governmental Approvals, including the consent of the City and those Governmental
Approvals set forth in Section 8.7, and comply with any applicable governmental
waiting periods, notification or other procedures required to be complied with
by it in connection with the transactions contemplated by this Agreement,
including the Transfer, other then any failures to do the foregoing that
individually, or in the aggregate, would not reasonably be likely to have a
Material Adverse Effect.
Section 5.6 Performance. The Company and LLC will perform all acts to be
performed by them pursuant to this Agreement and will refrain from taking or
omitting to take any action that would violate the Company's or LLC's
representations and warranties hereunder or render them inaccurate in any
material respect as of the date hereof or the Closing Date or that in any way
would prevent or materially adversely affect the consummation of the
transactions contemplated hereby. The Company and LLC will use all commercially
reasonable efforts to satisfy or cause to be satisfied all the conditions to the
obligations of Boyd Indiana set forth in Article VIII.
Section 5.7 Updating of Information. Each of the Company and LLC shall
have the continuing obligation to supplement or amend, within a reasonable
period of time prior to the Closing Date, the Company/LLC Disclosure Schedule
and other Schedules being delivered by it concurrently with the execution of
this Agreement and annexed hereto with respect to any matter hereafter arising
or discovered which, if existing or known at the date of this Agreement, would
have been required to be set forth or described in the Schedules and, except as
set forth in the following proviso, any such supplement or amendment shall be
deemed to modify the applicable representation and warranty made by the Company
or LLC hereunder; provided, however, that such supplement or amendment of the
Company/LLC Disclosure Schedule or Schedules shall not modify the
representations and warranties made by the Company or LLC hereunder (i) for
purposes of satisfying the condition set forth in Section 8.1 or for the
purposes of Article XII to the extent that such matter was known or should
reasonably have been expected to have been known by the Company or LLC on the
date of this Agreement or (ii) for the purposes of Article XII to the extent the
matter arose after the date of this Agreement and any liability
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associated therewith is reflected (but only to the extent reflected) in the
computation of the LLC Closing Date Working Capital Amount.
Section 5.8 Tax Status. The status of the Company as an S corporation
and of LLC as a Disregarded Entity for federal and state Income Tax purposes
will be maintained.
Section 5.9 Monthly Financial Statements; Weekly Gaming Revenue Reports;
Employment Information Updates.
(a) The Company and LLC will deliver to Boyd Indiana promptly after
they become available and in any case within thirty (30) days after the end of
each calendar month, an unaudited balance sheet of each of the Company and LLC
as of the end of such month and unaudited statements of income of each of the
Company and LLC for the one (1) month period then ending and the period since
January 1, 1999. Such balance sheets and statements of income of the Company
shall be in the form currently prepared by the Company. All such balance sheets
and statements of income shall be prepared in good faith, consistent with prior
periods and derived from the books and records of the Company and LLC.
(b) The Company and LLC will deliver to Boyd Indiana, promptly after
they become available and in any case within five (5) days after the end of each
week, reports setting forth the gross gaming win of the Company or LLC, as
applicable, during such week. Such reports shall be prepared in good faith,
consistent with prior periods and derived from the Books and Records of the
Company and LLC.
(c) The Company and LLC will deliver to Boyd Indiana monthly reports
setting forth all hirings of, terminations of and resignations by employees of
the Company or LLC, as applicable, which reports shall specify (i) the age,
gender and race (if known) of each employee; (ii) the date of termination or
resignation; and (iii) the stated reason or cause (if known) for such
termination or resignation.
Section 5.10 Other Transactions. Except as expressly contemplated by
this Agreement, from the date of this Agreement to the Closing, none of the
Company, LLC or (to the extent within the control of the Company or LLC) any of
their Affiliates shall, nor shall they permit any of their respective officers,
directors, stockholders, equityholders or other representatives to, directly or
indirectly, encourage, solicit, initiate or participate in discussions or
negotiations with, or provide any information or assistance to, any person or
group (other than Boyd Indiana and their representatives) concerning any merger,
sale of securities, sale of substantial assets or similar transaction involving
any of the Company or LLC. In the event that any of the Company, LLC or any of
their Affiliates receives a proposal relating to any such transaction, the party
receiving such a proposal shall promptly notify Boyd Indiana of such proposal.
Section 5.11 Owner's Affidavits. The Company shall deliver to the title
insurance companies issuing the Title Policy to LLC such customary owner's
affidavits as reasonably requested by Boyd Indiana or the Title Company as will
enable the Title Company to issue the Title Policy in the form set forth in
Section 2.1(a) above.
Section 5.12 Confidentiality of Information. Each of the BGC and Boyd
Indiana, on the one hand, and the Company, LLC and the Individual Covenantors,
on the other hand, and their
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respective representatives and employees, shall keep strictly confidential and
shall not disclose or use, except as required by Law, for any purpose other than
this Agreement and the transactions contemplated hereby, any and all
confidential and proprietary information ("Confidential Information") disclosed
by any of the parties (an "Informing Party") to any other party (an "Informed
Party") or learned by the Informed Party from the premises, properties,
personnel, books and records or Contracts to which it is given access. Each
party shall limit disclosure of Confidential Information to its representatives,
lenders and potential financing sources, financial advisors and employees on a
need to know basis. The term "Confidential Information" does not include the
generalized know-how with respect to the gaming business or methods of operation
that are common in the industry or generally known to the public or employees of
Persons engaged in restaurant, hotel, gambling, casino, riverboat or gaming
operations or information which (i) is or becomes generally available to the
public other than as a result of a disclosure by the Informed Party or its
representatives; (ii) was available to the Informed Party on a non-confidential
basis prior to its disclosure to the Informed Party by the Informing Party or
its representatives; or (iii) becomes available to the Informed Party on a
non-confidential basis from a source other than the Informing Party or its
representatives; provided, however, that such source is not bound by a
confidentiality agreement with the Informing Party or its representatives. This
Section 5.12 shall supersede the Confidentiality Agreement dated April 5, 1999,
between BGC and the Company. Each of the parties shall ensure that its
representatives and employees comply with this Section 5.12. This Section 5.12
shall survive Closing; provided, however, that Confidential Information relating
to the Business and LLC shall be deemed Confidential Information of Boyd Indiana
as of Closing.
Section 5.13 Shareholder Meeting. The Company shall call a meeting of
its shareholders to be held as promptly as practicable for the purpose of voting
upon the approval of this Agreement and the transactions contemplated
thereunder, including the Transfer, and the actions of the Company in connection
with such shareholders' meeting, including all disclosures made to shareholders
in connection therewith, shall comply with applicable law. The Company will,
through its Board of Directors, recommend to its shareholders approval of such
matters. Each individual or entity executing this Agreement, to the extent such
individual is a shareholder of the Company, agrees to vote all of such Person's
shares of Company stock in favor of this Agreement and the transactions
contemplated hereby, including the Transfer.
Section 5.14 Governmental Transfer Approvals. The Company shall, at the
expense of the parties as provided in Section 13.2, use its commercially
reasonable efforts to obtain any and all Governmental Approvals necessary to
permit the Transfer, and the change of control in LLC upon the purchase and sale
of the LLC Units to Boyd Indiana, including, but not limited to, the consents
set forth in Sections 2.2 and 8.7 hereof. All such consents shall be in writing,
and executed counterparts thereof shall be delivered to Boyd Indiana promptly
after receipt by the Company or LLC, but in no event later than immediately
prior to the Closing.
Section 5.15 LLC Organization Documents. The Company has provided to
Boyd Indiana drafts of the Articles of Organization, operating agreement and
other organizational documents and related filings of LLC and permitted Boyd
Indiana to comment on such documents prior to their being finalized.
Section 5.16 Indebtedness. LLC will not have any Indebtedness as of the
Closing Date.
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Section 5.17 Employees. Upon execution of this Agreement, the Company
and Boyd Indiana shall hold joint meetings with all employees of the Company to
provide preliminary information relating to this transaction, and thereafter,
the Company shall provide Boyd Indiana with access to all employees of the
Company upon the terms and conditions set forth in this Agreement. Without
limiting the foregoing, Boyd Indiana shall be entitled to conduct one-on-one
meetings with all employees of the Company employed by the Company on or after
the date of this Agreement at such times as Boyd Indiana shall reasonably
request and at space provided by the Company at the Owned Property or at such
other location as shall be reasonably acceptable to Boyd Indiana. In connection
therewith, the Company shall provide Boyd Indiana with access to complete
personnel files of all employees of the Company employed by the Company on or
after the date of this Agreement. Upon execution of this Agreement, the Company
shall also provide Boyd Indiana with space at the Owned Property upon which Boyd
Indiana shall be entitled to establish an information center to be staffed and
equipped by Boyd Indiana at its sole cost and expense. Boyd Indiana shall also
be entitled to make, at Boyd Indiana's sole cost and expense, general
distributions to all employees of newsletters, company brochures and other
information relating to this transaction or to BGC and the operations of it and
its subsidiaries. Such distributions may include distributions through the
information center or by direct mail to the employees. In consideration of the
resignations, effective as of the Closing Date, of those employees associated
with its Chicago office listed on Schedule 5.17, Boyd Indiana will make the
resignation payments set forth in Schedule 5.17. The Company will also terminate
the existing employment agreement with Xxxxxx XxXxxxx, effective on the Closing
in exchange for the termination payment to be made to Xx. XxXxxxx by Xxxx
Indiana as described in Schedule 5.17. The Company will also terminate the
employment agreement with Xxxxx Xxxxxx, effective as of the Closing Date, in
consideration of Boyd Indiana's undertaking to agree to the transition
employment arrangement and severance payment with Xx. Xxxxxx described in
Schedule 5.17.
Section 5.18 Potential Land Transfer. In the event that at any time
prior to the Transfer Date, the Company obtains fee title to all of that certain
real property located in the City of Michigan City, County of La Porte, State of
Indiana and more particularly described on Schedule 5.18 (the "Potential Land"),
then the Company shall have the right to transfer the Potential Land to LLC on
the terms and conditions set forth herein. Immediately following the acquisition
of the Potential Land by the Company, the Company shall provide Boyd Indiana
with written notice thereof (the "Notice of Acquisition"). Upon Boyd Indiana's
receipt of the Notice of Acquisition, the Company Closing Payment shall
automatically be increased by the amount of the Potential Land Price and,
subject to the terms and conditions of this Section 5.18, Boyd Indiana shall be
obligated to accept the Potential Land as part of the Owned Property. Boyd
Indiana shall have a period (the "Potential Land Inspection Period") of sixty
(60) days after Boyd Indiana's receipt of the Notice of Acquisition, but in no
event later than two (2) days prior to the Closing Date, to approve or
disapprove the Potential Land and make such inspections, conduct such testing
and investigate all other matters relating to the Potential Land as Boyd
Indiana's consultants deem advisable including, but not limited to, reviewing
the state of title and conducting environmental investigations. Boyd Indiana's
right to disapprove the Potential Land pursuant to this Section 5.18 shall be
limited to the existence of one or more title encumbrance or environmental
matters that, in the aggregate, materially decreases the value of the Potential
Land. On or before the last day of the Potential Land Inspection Period, Boyd
Indiana shall deliver written notice to the Company of its approval or
disapproval of the Potential Land. In the event that Xxxx Indiana
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approves the Potential Land, then (a) the Potential Land shall be deemed to be
added to the Owned Property for purposes of this Agreement and (b) the Permitted
Liens shall be deemed to be modified to include those exceptions to title set
forth on the Potential Land Title Commitment. In the event that Boyd Indiana
disapproves the Potential Land pursuant to the criteria set forth above, then
the Company shall not transfer the Potential Land to LLC as part of the Owned
Property. In the event that the Company has not acquired title to the Potential
Land prior to the Transfer Date, then the Company shall execute and deliver to
Boyd Indiana in accordance with Section 2.2(u), the Potential Land Transfer
Agreement substantially in the form attached hereto as Exhibit 5.18, which
provides that in the event that the Company acquires title to the Potential Land
at any time during the period that is two (2) years after the Closing Date, then
LLC will pay to the Company the Potential Land Price and LLC will have the
obligation to accept the Potential Land subject to LLC's disapproval of the
Potential Land based upon the criteria set forth above.
Section 5.19 Insurance. To the extent that the Company continues to
carry any insurance policies with the Business or the Assets after the Closing,
the Company will take such steps to name LLC and Boyd Indiana as additional
insureds under such policies to the extent permitted by law.
ARTICLE VI
COVENANTS OF XXXX INDIANA
Xxxx Indiana covenants and agrees with the Company and LLC that from the
date hereof until the Closing:
Section 6.1 Performance. Boyd Indiana will perform all acts to be
performed by it pursuant to this Agreement and will refrain from taking or
omitting to take any action that would violate their representations and
warranties hereunder or render them inaccurate as of the date hereof or the
Closing Date or that in any way would prevent or adversely affect the
consummation of the transactions contemplated hereby. Boyd Indiana will use all
commercially reasonable efforts to satisfy or cause to be satisfied all the
conditions to the obligations of the Company and LLC relating to Boyd Indiana
set forth in Article IX.
Section 6.2 Governmental Filings. Boyd Indiana will, as promptly as
practicable, make any required governmental filings required of Boyd Indiana,
including filings pursuant to the Gaming Laws and the HSR Act, obtain any
required Government Approvals and comply with any applicable governmental
waiting periods or notification or other procedures required to be complied with
by them in connection with the transactions contemplated by this Agreement. Xxxx
Indiana's filings with the Indiana Gaming Commission in connection with the
transactions contemplated hereby shall be true, complete and correct in all
material respects.
Section 6.3 Employee Termination Payments. Subject to the satisfaction
of the conditions set forth in Section 5.17, Boyd Indiana agrees to make the
employee termination and severance payments to the individuals listed in
Schedule 5.17 as described therein.
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ARTICLE VII
ENVIRONMENTAL MATTERS
Section 7.1 Site Access. Prior to the execution hereof, Boyd Indiana has
conducted a Phase I Environmental Assessment of the Real Property ("Buyer's
Phase I Environmental Investigation") to determine, among other things, whether
and to what extent Materials of Environmental Concern are present at, on or
under the Real Property. Schedule 7.1 sets forth certain environmental
conditions and other matters disclosed by Buyer's Phase I Environmental
Investigation (the "Known Environmental Conditions").
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF XXXX INDIANA
The obligation of Xxxx Indiana to purchase the LLC Units at the Closing
is subject to the satisfaction or waiver by Boyd Indiana of the following
conditions on or before the Closing Date:
Section 8.1 Representations and Warranties Correct. Each representation
and warranty of the Company and LLC made herein, and the statements contained in
the Exhibits, Company/LLC Disclosure Schedule and Schedules hereto or in any
instrument or certificate delivered by the Company or LLC pursuant to this
Agreement shall be true and correct in all material respects (except for
representations and warranties or applicable subsections or portions thereof
already qualified as to materiality, in which case such representations and
warranties or applicable subsections or portions thereof shall be true and
correct), in each case as of the date made and, except to the extent such
representation, warranty or statement expressly provides that it relates solely
to the date hereof or an earlier date, at and as of the Closing Date, with the
same force and effect as though made at and as of the Closing Date; provided,
however, that any representation or warranty that is modified after the date of
this Agreement by an amendment to the Company/LLC Disclosure Schedule that
qualifies under Section 5.7 as a modification of the original representation and
warranty for the purposes of this Section 8.1 ("Permitted Modification") shall
be deemed to be made, as so modified, as of the date the representation and
warranty was originally made and/or as of the Closing Date, as the case may be
(depending upon when the matter or matters covered by the Permitted Modification
arose), unless the matter or matters described in the Permitted Modification,
when combined with all other Permitted Modifications, has had or would
reasonably be expected to have, a Material Adverse Effect.
Section 8.2 Performance; No Default. Each of the Company and LLC will
have performed and complied in all material respects with all the obligations,
agreements and conditions required by this Agreement to be performed or complied
with by them at or prior to the Closing.
Section 8.3 Delivery of Certificate. Each of the Company and LLC shall
have delivered to Boyd Indiana a certificate, dated the Closing Date, executed
by an executive officer, certifying to the fulfillment of the conditions set
forth in Sections 8.1 and 8.2.
Section 8.4 Opinion of Counsel to the Company. The Company will have
delivered to Boyd Indiana an opinion of Xxxx, Xxxx & Xxxxx, special counsel to
the Company, dated the Closing Date, containing the opinions set forth on
Exhibit 8.4.
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Section 8.5 Good Standing Certificates. Boyd Indiana shall have received
the following certificates for each of the Company and LLC, in form and
substance reasonably satisfactory to Xxxxxxxx & Xxxxxxxx LLP, counsel to Boyd
Indiana: (a) from the Secretary of State of its state of organization evidencing
its continued existence and its good standing as a corporation or limited
liability company organized under the laws of such state; and (b) from each
jurisdiction in which it is qualified or licensed to do business as a foreign
corporation or a limited liability company, evidencing its continued good
standing as a corporation or limited liability company as licensed or qualified,
except for any jurisdictions in which such failures to be in good standing,
individually and in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect.
Section 8.6 Consents. Boyd Indiana shall have received executed
counterparts of the consents required, if any, to the assignment of the Material
Assumed Contracts, all of which consents shall be in form and substance
reasonably satisfactory to Boyd Indiana.
Section 8.7 Governmental Approvals. All Governmental Approvals
(including, without limitation, approval from the Indiana Gaming Commission, the
consent of the City, the consent of the United States Coast Guard to the
transfer of the Riverboat as required by applicable Laws and all required
consents and approvals to the transfer of the Liquor Assets) from, and all
declarations, filings and registrations with, any Governmental Body required to
consummate the transactions contemplated by this Agreement (other than any of
the foregoing which, if not obtained or made, would not, individually or in the
aggregate, reasonably be expected to limit in any material way LLC's ability to
operate the Business and the Assets after the Closing) shall have been obtained
or made without the imposition of any material conditions, and all applicable
waiting periods under the HSR Act shall have expired or been terminated.
Section 8.8 Absence of Litigation. There shall be no suit, action or
other proceeding pending or threatened seeking to enjoin, restrain, hinder or
delay the Transfer or the purchase and sale of the LLC Units, or the other
transactions contemplated hereby, or to impose limitations on the ability of
Boyd Indiana to acquire or hold, or exercise full rights of ownership of the LLC
Units, or to prohibit Boyd Indiana or any of their Affiliates from effectively
controlling in any material respects the Business or the business or operations
of LLC, at law or in equity by any Governmental Body, nor shall any injunction
or order of any such entity be in effect as of the Closing which restrains or
prohibits the Transfer, the purchase and sale of the LLC Units, or the other
transactions contemplated hereby.
Section 8.9 FIRPTA Certificate. Boyd Indiana shall have received from
the Company the FIRPTA Affidavit. Notwithstanding anything to the contrary set
forth herein, if the Company fails to provide Xxxx Indiana with such affidavit,
Xxxx Indiana shall be entitled to withhold the requisite amounts from the LLC
Purchase Price payments in accordance with Section 1445 of the Code.
Section 8.10 Termination of Certain Contracts. Boyd Indiana shall have
received evidence (in form and substance satisfactory to Boyd Indiana) as to the
termination of the Contracts referred to in Section 2.7 and the release of Boyd
Indiana, BGC and LLC from any liability, restriction or required performance
thereunder.
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Section 8.11 Post-Closing Escrow Agreements. The Company shall have duly
executed and delivered to Boyd Indiana the Company Escrow Agreement
substantially in the form of Exhibit 12.3.
Section 8.12 RPTA Certificate. Not later than thirty (30) days prior to
the Closing, the Company shall have delivered to Boyd Indiana an environmental
disclosure statement duly executed and acknowledged by all applicable parties as
required under the Indiana Responsible Property Transfer Law (Indiana Code
13-7-22.5 through 13-7-22.15).
Section 8.13 Shareholder/Member Approval. The shareholders of the
Company shall have approved this Agreement and the transactions contemplated
hereunder, including the Transfer, and Boyd Indiana shall have received evidence
(in form and substance satisfactory to Boyd Indiana) of such approval.
Section 8.14 Performance of the Obligations. Each of the Company and LLC
shall have performed all of its duties and obligations in all material respects
required to be performed prior to the Closing pursuant to this Agreement,
including the Transfer contemplated by Article II.
Section 8.15 Condition of Real Property and Assets. The Real Property
and the Assets shall be in substantially the same condition as such existed as
of the date of this Agreement, normal wear and tear and weathering excepted, and
the number of live gaming devices (including gaming tables) and electronic
gaming devices (including slot machines) shall be substantially the same as the
number shown on Schedule 3.13(c).
Section 8.16 Release of Liens. All existing deeds of trust or other
Liens on the Owned Property (other than the Permitted Liens) shall be in a
position to be released of record concurrently with the Closing.
Section 8.17 Title Policy. The Title Company shall be irrevocably
committed to issue to LLC the Title Policy in the form provided in Section
2.1(a).
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligation of the Company to sell the LLC Units at the Closing is
subject to the satisfaction or waiver by the Company of the following conditions
on or before the Closing Date:
Section 9.1 Representations and Warranties Correct. Each representation
and warranty of Boyd Indiana and BGC made herein, and the statements contained
in the Exhibits, Buyer's Disclosure Schedule and Schedules hereto or in any
instrument or certificate delivered by Boyd Indiana pursuant to this Agreement
shall be true and correct in all material respects (except for representations
and warranties or applicable subsections or portions thereof already qualified
as to materiality, in which case such representations and warranties or
applicable subsections or portions thereof shall be true and correct), in each
case as of the date made and, except to the extent such representation, warranty
or statement expressly provides that it relates solely to the date hereof or an
earlier date, at and as of the Closing Date, with the same force and effect as
though made at and as of the Closing Date.
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Section 9.2 Performance; No Default. Boyd Indiana and BGC will have
performed and complied in all material respects with all the obligations,
agreements and conditions required by this Agreement to be performed or complied
with by them at or prior to the Closing.
Section 9.3 Delivery of Certificate. Boyd Indiana and BGC shall have
delivered to the Company a certificate, dated the Closing Date, executed by an
executive officer, certifying to the fulfillment of the conditions set forth in
Sections 9.1 and 9.2.
Section 9.4 Opinion of Counsel to BGC and Boyd Indiana. BGC will have
delivered to the Company an opinion of McDonald, Carano, Wilson, McCune, Xxxxxx,
Xxxxxxxxxx & Xxxxx, counsel to BGC, dated the Closing Date, containing the
opinions set forth on Exhibit 9.4(a), and Boyd Indiana will have delivered an
opinion of Bose, XxXxxxxx & Xxxxx, local counsel to Boyd Indiana, dated the
Closing Date, containing the opinions set forth on Exhibit 9.4(b).
Section 9.5 Governmental Approvals. All Governmental Approvals
(including, without limitation, approval from the Indiana Gaming Commission)
from, and all declarations, filings and registrations with, any Governmental
Body required to consummate the transactions contemplated by this Agreement
(other than any of the foregoing which, if not obtained or made, would not,
individually or in the aggregate, reasonably be expected to limit in any
material way LLC's ability to operate the Business and the Assets after the
Closing) shall have been obtained or made without the imposition of any material
conditions, and all applicable waiting periods under the HSR Act shall have
expired or been terminated.
Section 9.6 Absence of Litigation. There shall be no suit, action or
other proceeding pending or threatened seeking to enjoin, restrain, hinder or
delay the Transfer or the purchase and sale of the LLC Units, or the other
transactions contemplated hereby, at law or in equity before any Governmental
Body, nor shall any injunction or order of any such entity be in effect as of
the Closing which restrains or prohibits the Transfer or the purchase and sale
of the LLC Units, or the other transactions contemplated hereby.
Section 9.7 Shareholder Approval. The shareholders of the Company shall
have approved this Agreement and the transactions contemplated hereunder,
including the Transfer.
ARTICLE X
ADDITIONAL COVENANTS
Section 10.1 Asset Purchase/Purchase Price Allocation.
(a) The Company and Boyd Indiana agree that the acquisition of the
LLC Units by Boyd Indiana shall be treated for all Income Tax purposes as a
purchase by Boyd Indiana of the Assets of the Company, other than the Excluded
Assets, and an assumption by Boyd Indiana of the Assumed Liabilities (not
including the Excluded Liabilities). The Company and Boyd Indiana shall report
for Income Tax purposes the purchase by Boyd Indiana of the LLC Units pursuant
to this Agreement consistent with the treatment described in the preceding
sentence and shall take no position inconsistent therewith in any Income Tax
Return, any proceeding before any Income Tax authority or otherwise.
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(b) In connection with the purchase by Boyd Indiana of the LLC Units
pursuant to this Agreement, not later than the Closing, the Company and Boyd
Indiana shall act together in good faith to determine and agree upon the proper
allocations for Income Tax purposes (the "Allocations") of the LLC Purchase
Price (including the Assumed Liabilities) among the assets of LLC (in accordance
with Section 1060 of the Code and the Treasury Regulations promulgated
thereunder and Schedule 10.1 attached hereto). The Company and Boyd Indiana
shall (i) be bound by such determinations and such Allocations for purposes of
determining any Income Taxes; (ii) prepare and file their Income Tax Returns,
including filing a timely Form 8594, on a basis consistent with such
determinations and such Allocations; and (iii) take no position inconsistent
with such determinations and Allocations on any applicable Income Tax Return, in
any Income Tax proceeding before any Income Tax authority or otherwise. In the
event that any such allocation is disputed by any taxing authority, the party
receiving notice of the dispute shall promptly notify the other party hereto
concerning resolution of the dispute. To the extent that the additional
Contingent Purchase Price Payment is made, or the LLC Purchase Price is
otherwise adjusted in accordance with the terms of this Agreement, Boyd Indiana
and the Company agree, if necessary, to revise and amend the Allocations and IRS
Form 8594.
Section 10.2 Noncompetition.
(a) For a period of three (3) years following the Closing, without
the written consent of Boyd Indiana, none of the Company, any Individual
Covenantor or any Affiliates of the foregoing Persons shall, directly or
indirectly, through equity ownership or otherwise, own, operate or make an
Investment (collectively, "Engage" or an "Engagement") in a business engaged in
one or more or all of riverboat, land-based, barge or dockside casino-style
gaming anywhere in the State of Indiana (other than riverboat gaming on the Ohio
River watershed) or in the State of Michigan within 250 miles of the Riverboat
(a "Gaming Business"); provided, however, this Section 10.2 shall not apply to
(i) existing Engagements by the Individual Covenantors or their Affiliates as
set forth in Schedule 10.2; (ii) Investments in publicly traded companies in
which the Company and its Affiliates, in the aggregate, do not own and,
following such Investment, will not own, more than ten percent (10%) of the
voting securities; or (iii) passive Investments made following the date hereof
with the written consent of Boyd Indiana, which consent shall not be
unreasonably withheld.
(b) For a period of three (3) years following the Closing, none of
the Company, any Individual Covenantor or any Affiliates of the foregoing
Persons shall, directly or indirectly, solicit, induce or encourage any employee
or consultant or group of employees or consultants who are then employed or
retained by Boyd Indiana, LLC, or any of their Affiliates (other than the
employees identified in Schedule 10.2(b) of the Company/LLC Disclosure Schedule)
to leave the faithful employment of or terminate consultation with any of Boyd
Indiana, LLC or their Affiliates; provided this shall not impinge on any general
solicitation of employees directed to the public at large (as opposed to
solicitations directed at employees of Boyd Indiana, LLC or their Affiliates),
in any newspaper, or radio or television broadcast or other media whose
principal areas of circulation, impact, reception, electronic delivery or
subscription are not in the geographical areas covered by the non-compete
covenant in Section 10.2(a).
Section 10.3. Construction of the Hotel.
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(a) Workmanlike Manner. Prior to the Closing, the Company shall
oversee and diligently pursue the construction and development of the Hotel in a
good and workmanlike manner in accordance with the Plans and Specifications, as
modified pursuant to Section 10.3(b), and shall timely pay all costs and
expenses incurred in connection with the construction and development of the
Hotel (the "Construction Costs") to the extent such costs are incurred prior to
the Closing Date. The Company shall provide Boyd Indiana with copies of all
applications for payment and related back-up documentation, proof of payment,
and unconditional lien releases to the extent available and such other evidence
as reasonably requested ("Evidence of Payment") with respect to the Construction
Costs paid by it. From and after the Closing, LLC shall oversee and diligently
pursue the construction and development of the Hotel in a good and workmanlike
manner in accordance with the Plans and Specifications as modified pursuant to
Section 10.3(b) and shall pay for all Construction Costs incurred on and after
the Closing Date up to the LLC Maximum Construction Cost Amount. LLC shall
provide the Company with Evidence of Payment with respect to the Construction
Costs paid by it. To the extent that the actual amount of the Construction Costs
incurred by LLC on and after the Closing Date, exceeds the LLC Maximum
Construction Cost Amount, then LLC shall provide the Company with written notice
of such excess amount and, within five (5) calendar days after receipt of
written notice from LLC, there shall be released from the Company Escrowed Funds
and delivered by wire transfer immediately available funds to the account or
accounts specified by Boyd Indiana, an amount equal to such excess amount. As
provided further in Section 10.3(j), to the extent that the Actual Completion
Cost Amount is less than the sum of the LLC Maximum Construction Cost Amount
plus any additional amounts paid to LLC pursuant to this Section 10.3(a), then
LLC shall pay to the Company the amount of the difference in accordance with
Section 10.3(j).
(b) Contracts. The Company until the Transfer Date and LLC from and
after the Transfer Date and after the Closing Date shall submit to Boyd Indiana
copies of all change orders and requests for information relating to the
construction and development of the Hotel immediately upon their receipt
thereof. Boyd Indiana reserves the right, at its option, to approve in advance
all Contracts or work orders arising after the date of this Agreement with
materialmen, mechanics, suppliers, subcontractors, contractors or other parties
providing labor or materials in connection with the construction and development
of the Hotel. Boyd Indiana shall have the right to require prior to and after
the Closing Date modifications and changes to the Plans and Specifications and
the relevant Contracts, in Boyd Indiana's sole and absolute discretion subject,
however, to the limitations of applicable Contracts and Governmental Approvals;
provided that incremental costs of effecting such changes (the "Incremental
Construction Costs") shall be taken into account through the definition of the
"LLC's Maximum Completion Cost Amount." The Company until the Transfer Date and
LLC after the Transfer Date shall amend the Plans and Specifications and the
relevant Contracts to the extent requested by Boyd Indiana and shall take such
other steps as are necessary to implement all change orders required by Boyd
Indiana. All change orders to modify or amend the Plans and Specifications or
the relevant Contracts shall be subject to the prior approval of Boyd Indiana in
its sole and absolute discretion. The Company until the Transfer Date and LLC
after the Transfer Date shall not amend the Construction Contracts, the Plans
and Specifications or any relevant Contracts without the written approval of
Boyd Indiana in its sole and absolute discretion.
(c) Inspections. Boyd Indiana shall have the right, but not the
obligation, to inspect and monitor the construction and development of the Hotel
pursuant to this Section 10.3(c). The
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Company until the Transfer Date and LLC after the Transfer Date shall permit
Boyd Indiana and Boyd Indiana's agents and representatives (including Boyd
Indiana's engineer, architect or inspector) to enter onto the Real Property
during normal business hours and without interference with construction activity
to inspect the progress of the construction and development of the Hotel and all
materials being used in connection therewith and to examine all plans and
drawings other than the Plans and Specifications relating to such construction
and development of the Hotel and the financial and other Books and Records
relating to the costs incurred by the Company or LLC in connection therewith.
The Company, and LLC after the Transfer Date, shall use all commercially
reasonable efforts to cause all contractors and subcontractors to cooperate with
Xxxx Indiana or Xxxx Indiana's representatives or such other persons described
above in connection with inspections described in this Section 10.3(c). If Boyd
Indiana in good faith determines that any work or materials do not conform,
individually or in the aggregate, in all material respects to the approved Plans
and Specifications or sound building practice, or otherwise depart from the
requirements of this Agreement, Boyd Indiana may require the Company to
diligently resolve such matters through the dispute resolution process set forth
in the Construction Contracts, which includes, but is not limited to,
consultation with the architect and, under certain circumstances, the suspension
of construction activities. In such event, the Company until the Transfer Date
and LLC after the Transfer Date shall promptly correct, or cause to be
corrected, the work to Boyd Indiana's reasonable satisfaction. In no event will
any inspection by Boyd Indiana constitute a representation that there has been
or will be compliance with the Plans or Specifications or that the construction
is free from defective materials or workmanship. The Company, and LLC after the
Transfer Date, shall provide Boyd Indiana upon its request with copies of all
applications for payment and related back-up documents, building permits,
building department inspection reports, evidence of payment, lien releases and
any correspondence in connection with the construction and development of the
Hotel.
(d) Lien-Free Completion. The construction of the Hotel up to the
Closing Date, and all materials, equipment, fixtures, or any other item
comprising a part of the Hotel up to the Closing Date shall be constructed,
installed or completed, as applicable, free and clear of all mechanic's,
materialman's or other Liens to the extent such Liens relate to the activities
of the Company or LLC or any of their agents, consultants, employees or
invitees, except for the Permitted Liens.
(e) Compliance with Laws. The construction and development of the
Hotel shall comply in all material respects with all applicable Laws and
applicable insurance requirements, including applicable building codes, special
use permits, Environmental Laws and requirements of insurance underwriters.
(f) Insurance Requirements. The Company shall provide or cause to be
provided workmen's compensation insurance, builder's risk, and public liability
insurance, and such other insurance to the extent required under applicable
Laws, in connection with the construction and development of the Hotel. All such
policies shall be in form and amount reasonably satisfactory to Boyd Indiana and
shall name each member of the Boyd Indiana Group and LLC as an additional
insured.
(g) Hotel Construction Budget. Schedule 10.3(g) sets forth the
budget for the construction and development of the Hotel in accordance with the
Plans and Specifications (the
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"Hotel Construction Budget") and in the column entitled "Construction Expense"
the committed amounts with respect to each line item set forth in such Schedule
for the construction and development of the Hotel pursuant to the Plans and
Specifications. Schedule 10.3(g) sets forth in the column entitled "Construction
Expense" the amount that each contractor referred to in such Schedule has agreed
to charge, or that the Company or the Contractor has estimated, for all of its
services to be provided in connection with the construction and development of
the Hotel.
(h) Calculation of Company's Estimated Construction Cost Amount. On
the date which is ten (10) days prior to the Closing Date, the Company shall
prepare and submit to Boyd Indiana, a statement (the "Preliminary Construction
Costs Statement"), which statement shall be reasonably satisfactory to Boyd
Indiana and shall set forth in line item detail the amount (the "Company's
Estimated Construction Cost Amount") equal to the sum of the costs actually
incurred by Company as of such date, plus the estimated amount of the costs to
be incurred prior to the Closing Date to complete the Hotel up to the Maximum
Hotel Cost, plus the Incremental Construction Costs together with all Evidence
of Payment.
(i) Calculation of Company's Actual Construction Cost Amount.
(i) Within fifteen (15) calendar days after the Closing
Date, the Company shall revise the Preliminary Construction Costs Statement to
reflect all amounts set forth thereon as of the Closing Date (the "Company's
Construction Costs Statement"). Within twenty (20) days following the delivery
of Company's Construction Costs Statement, LLC may deliver to the Company a
written statement (the "Buyer's Construction Costs Statement") setting forth
with reasonable specificity any disagreement with the Company's Construction
Costs Statement. During such twenty (20) day period, LLC shall be permitted to
review the working papers of the Company and its auditors relating to the
Company's Construction Costs Statement and all other Evidence of Payment. If LLC
fails to object on or prior to such twentieth (20th) day, then all of the
amounts set forth on the Company's Construction Costs Statement shall be deemed
to have been finally determined for purposes of calculating the Company's Actual
Construction Cost Amount.
(ii) If LLC does submit Buyer's Construction Costs Statement
on or prior to such twentieth (20th) day, any amounts contained in the Buyer's
Construction Costs Statement which are not disputed by the Company's
Construction Costs Statement shall be deemed to have been finally determined for
purposes of calculating the Company's Actual Construction Cost Amount. For a
period of fifteen (15) days, LLC and the Company shall attempt to resolve in
good faith any dispute or disagreement between the Company's Construction Costs
Statement and Buyer's Construction Costs Statement. During such fifteen (15) day
period, the LLC shall be permitted to review the working papers of the Company
and the Company's auditors relating to Buyer's Construction Costs Statement. Any
amounts resolved by such attempts shall be deemed to have been finally
determined for purposes of calculating the Company's Actual Construction Cost
Amount.
(iii) At the end of such fifteen (15) day period, the
Accounting Firm shall be deemed appointed by the parties hereto to finally
determine the Company's Actual Construction Cost Amount. Within ten (10) days
thereafter, the Company shall submit to the Accounting Firm the Company's
Construction Costs Statement and any supporting evidence and statements
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which it deems necessary to verify and support the Company's Construction Costs
Statement, and LLC shall submit to the Accounting Firm Buyer's Construction
Costs Statement and any supporting evidence and statements which it deems
necessary to verify and support Buyer's Construction Costs Statement. Neither
party may revise the amounts claimed on its respective construction costs
statement prior to submission to the Accounting Firm except to reflect amounts
finally determined pursuant to Section 10.3(i)(i) or (ii). Based solely upon the
foregoing submissions, the Accounting Firm shall make a final, binding and
unappealable determination of the matters in dispute and of the Company's Actual
Construction Cost Amount, which the parties agree shall be conclusively binding
upon all parties; provided, however, that (A) the Accounting Firm must choose
either the Company's Actual Construction Cost Amount set forth on the Company's
Construction Costs Statement or the Company's Actual Construction Cost Amount
set forth on Buyer's Construction Costs Statement (in each case relying without
modification upon any portions of the Company's Actual Construction Cost Amount
resolved pursuant to Section 10.3(i)(ii)) and may not choose any other amount
and (B) the Accounting Firm may not make any determination with respect to any
matter not in dispute between the Company's Construction Costs Statement and
Buyer's Construction Costs Statement; provided further, however, that any
determination by the Accounting Firm shall not be final, binding and
nonappealable, and shall be without effect, if it does not comply with the
foregoing proviso. The party whose Construction Costs Statement is not selected
is the "Losing Party" for purposes of Section 10.3(i) and shall pay all fees,
charges and expenses for the services of the Accounting Firm (including the
fees, charges and expenses of any experts used by the Accounting Firm) plus any
reasonable fees and expenses of enforcement of a determination of the Accounting
Firm. In addition, the Losing Party shall reimburse (in cash) all reasonable
attorneys' fees, charges and expenses and reasonable accountant's fees, charges
and expenses incurred by the other party in connection with the dispute (all of
the foregoing, for purposes of this Section 10.3(i), the "Fees"). The Accounting
Firm shall be instructed to make its final determination within twenty (20) days
of the submissions to the Accounting Firm referred to above and, in any case, as
soon as practicable after such submissions. Within five (5) days of the
Accounting Firm's determination of the Company's Actual Construction Cost
Amount, the Accounting Firm shall deliver to LLC and the Company a statement
(the "Final Construction Costs Statement") setting forth the Company's Actual
Construction Cost Amount and describing in reasonable detail how the Company's
Actual Construction Cost Amount was determined. Within ten (10) days after the
final determination by the Accounting Firm, the party entitled to receive the
Fees shall submit a statement setting forth its Fees incurred and the Accounting
Firm, within ten (10) days after such submission, will make a final, binding and
unappealable determination of the amount of such Fees and award such amounts to
such party.
(iv) Any final determination and award of Fees shall be in
writing and shall state the reasons upon which it is based. Judgment upon the
award shall be entered in any court having jurisdiction thereof. The provisions
of Section 10.3(i) shall constitute the exclusive and sole means for resolving
those disputes, disagreements, controversies or claims between LLC and the
Company with respect to the Company's Actual Construction Cost Amount.
(v) To the extent the Company's Actual Construction Cost
Amount as set forth on the Final Construction Costs Statement is (A) greater
than the Company's Estimated Construction Cost Amount, LLC shall, within two (2)
business days of LLC's receipt of the final determination of the Company's
Actual Construction Cost Amount, deliver by wire transfer
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immediately available funds to the liquidation account or accounts of the
Company and specified by the Company, an amount equal to such difference or (B)
less than Company's Estimated Construction Cost Amount, within two (2) business
days of the Company's receipt of the final determination of the Company's Actual
Construction Cost Amount, there shall be released from the Company Escrowed
Funds and delivered by wire transfer immediately available funds to the account
or accounts specified by LLC, an amount equal to such difference, in either case
plus interest on such amount at the Interest Rate for, the period commencing on
(and including) the Closing Date to (but excluding) the date of payment as well
as the amount of any Fees to be borne by LLC as a Losing Party under this
Section 10.3(i).
(j) Calculation of Actual Completion Cost Amount.
(i) In the event that the Hotel has not been completed in
accordance with the Plans and Specifications prior to the Closing Date, within
fifteen (15) calendar days after the Completion Date, LLC shall prepare and
submit to the Company a statement (the "LLC's Completion Costs Statement")
setting forth the actual amount of the Construction Costs incurred by LLC from
and after the Closing Date. Within twenty (20) days following the delivery of
LLC's Completion Costs Statement, the Company may deliver to LLC a written
statement (the "Company's Construction Costs Statement") setting forth with
reasonable specificity any disagreement with the LLC's Completion Costs
Statement. During such twenty (20) day period, the Company shall be permitted to
review the working papers of LLC and its auditors relating to the LLC's
Completion Costs Statement and all other Evidence of Payment. If the Company
fails to object on or prior to such twentieth (20th) day, then all of the
amounts set forth on the LLC's Completion Costs Statement shall be deemed to
have been finally determined for purposes of calculating the Actual Completion
Cost Amount.
(ii) If the Company does submit the Company's Completion
Costs Statement on or prior to such twentieth (20th) day, any amounts contained
in the LLC's Completion Costs Statement which are not disputed by the Company's
Completion Costs Statement shall be deemed to have been finally determined for
purposes of calculating the Actual Completion Cost Amount. For a period of
fifteen (15) days, LLC and the Company shall attempt to resolve in good faith
any dispute or disagreement between the Company's Completion Costs Statement and
LLC's Completion Costs Statement. During such fifteen (15) day period, LLC shall
be permitted to review the working papers of the Company and the Company's
auditors relating to Company's Completion Costs Statement. Any amounts resolved
by such attempts shall be deemed to have been finally determined for purposes of
calculating the Actual Completion Cost Amount.
(iii) At the end of such fifteen (15) day period, the
Accounting Firm shall be deemed appointed by the parties hereto to finally
determine the Actual Completion Cost Amount. Within ten (10) days thereafter,
the Company shall submit to the Accounting Firm the Company's Completion Costs
Statement and any supporting evidence and statements which it deems necessary to
verify and support the Company's Completion Costs Statement, and LLC shall
submit to the Accounting Firm LLC's Completion Costs Statement and any
supporting evidence and statements which it deems necessary to verify and
support LLC's Completion Costs Statement. Neither party may revise the amounts
claimed on its respective construction costs statement prior to submission to
the Accounting Firm except to reflect amounts finally
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determined pursuant to Section 10.3(j)(i) or (ii). Based solely upon the
foregoing submissions, the Accounting Firm shall make a final, binding and
unappealable determination of the matters in dispute and of the Actual
Completion Cost Amount, which the parties agree shall be conclusively binding
upon all parties; provided, however, that (A) the Accounting Firm must choose
either the Actual Completion Cost Amount set forth on the Company's Completion
Costs Statement or the Actual Completion Cost Amount set forth on LLC's
Completion Costs Statement (in each case relying without modification upon any
portions of the Actual Completion Cost Amount resolved pursuant to Section
10.3(j)(ii)) and may not choose any other amount and (B) the Accounting Firm may
not make any determination with respect to any matter not in dispute between the
Company's Completion Costs Statement and LLC's Completion Costs Statement;
provided further, however, that any determination by the Accounting Firm shall
not be final, binding and nonappealable, and shall be without effect, if it does
not comply with the foregoing proviso. The party whose Completion Costs
Statement is not selected is the "Losing Party" for purposes of Section 10.3(j)
and shall pay all fees, charges and expenses for the services of the Accounting
Firm (including the fees, charges and expenses of any experts used by the
Accounting Firm) plus any reasonable fees and expenses of enforcement of a
determination of the Accounting Firm. In addition, the Losing Party shall
reimburse (in cash) all reasonable attorneys' fees, charges and expenses and
reasonable accountant's fees, charges and expenses incurred by the other party
in connection with the dispute (all of the foregoing, for purposes of this
Section 10.3(j), the "Fees"). The Accounting Firm shall be instructed to make
its final determination within twenty (20) days of the submissions to the
Accounting Firm referred to above and, in any case, as soon as practicable after
such submissions. Within five (5) days of the Accounting Firm's determination of
the Actual Completion Cost Amount, the Accounting Firm shall deliver to LLC and
the Company a statement (the "Final Completion Costs Statement") setting forth
the Actual Completion Cost Amount and describing in reasonable detail how the
Actual Completion Cost Amount was determined. Within ten (10) days after the
final determination by the Accounting Firm, the party entitled to receive the
Fees shall submit a statement setting forth its Fees incurred and the Accounting
Firm, within ten (10) days after such submission, will make a final, binding and
unappealable determination of the amount of such Fees and award such amounts to
such party.
(iv) Any final determination and award of Fees shall be in
writing and shall state the reasons upon which it is based. Judgment upon the
award shall be entered in any court having jurisdiction thereof. The provisions
of Section 10.3(j) shall constitute the exclusive and sole means for resolving
those disputes, disagreements, controversies or claims between LLC and the
Company with respect to the Actual Completion Cost Amount.
(v) To the extent the Actual Completion Cost Amount as set
forth on the Final Completion Costs Statement is (A) less than the sum of the
LLC's Maximum Completion Cost Amount plus any amounts paid to LLC pursuant to
Section 10.3(a) above, LLC shall, within two (2) business days of LLC's receipt
of the final determination of the Actual Completion Cost Amount, deliver by wire
transfer immediately available funds to the liquidation account or accounts of
the Company and specified by the Company, an amount equal to such difference or
(B) greater than the sum of the Company's LLC's Maximum Completion Cost Amount
plus any amounts paid to LLC pursuant to Section 10.3(a) above, within two (2)
business days of the Company's receipt of the final determination of the Actual
Completion Cost Amount, there shall be released from the Company Escrowed Funds
and delivered by wire transfer immediately
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available funds to the account or accounts specified by LLC, an amount equal to
such difference, in either case plus interest on such amount at the Interest
Rate for, the period commencing on (and including) the Closing Date to (but
excluding) the date of payment as well as the amount of any Fees to be borne by
LLC as a Losing Party under this Section 10.3(j).
Section 10.4. Xxxxx Guaranty. Boyd Indiana will use its reasonable best
efforts to obtain the release by Travelers' Casualty and Insurance Company of
America ("Travelers") of the guaranty of the Xxxxx X. Xxxxx June, 1992
Non-Exempt Trust and the Xxxxx X. Xxxxx June, 1992 Non-Exempt Trust ("Xxxxx
Guaranty") of the outstanding surety bond issued by Travelers to the Gaming
Commission, by substituting Boyd Indiana's or BGC'S guaranty for the Xxxxx
Guaranty. In the event that the Xxxxx Guaranty is not so released by Travelers,
Boyd Indiana shall indemnify and hold harmless the Xxxxx X. Xxxxx June, 1992
Non-Exempt Trust and the Xxxxx X. Xxxxx June, 1992 Non-Exempt Trust from any
claims, demands, actions or causes of action, losses, damages, liabilities,
costs and expenses, including, without limitation, interest, penalties and
attorneys' fees and expenses as a result of any claim against the Xxxxx Guaranty
made after the Closing Date.
Section 10.5. Bonds. Boyd Indiana shall replace the Company's bond to
the Indiana Gaming Commission and guaranty to the City described in Schedule
10.5 with its own bond and guaranty and provide to the Company reasonably
satisfactory evidence of the replacement of the Company's bond and guaranty with
Boyd Indiana's bond and guaranty.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.1 Termination of Agreement. This Agreement may be terminated
at any time prior to the Closing:
(a) by mutual written consent of Boyd Indiana and the Company;
(b) by Boyd Indiana, if there has been a material violation in or
breach by any of the Company's, any of the Individual Covenantor's or LLC's
agreements, representations or warranties contained herein which has not been
waived by Boyd Indiana in writing;
(c) by the Company, if there has been a material violation or breach
by Boyd Indiana of any of the agreements, representations or warranties
contained herein which has not been waived by the Company in writing;
(d) by Boyd Indiana or the Company if the Closing shall not have
occurred on or before December 31, 1999; provided, however, that neither Boyd
Indiana nor the Company shall be entitled to terminate this Agreement pursuant
to this Section 11.1(d) if such party's (including, in the case of the Company
and LLC, any of the shareholders of the Company and members of LLC) knowing or
willful breach of this Agreement has prevented the consummation of the
transactions contemplated hereby; or
(e) by Boyd Indiana if any of the conditions to the obligations of
Boyd Indiana set forth in Article VIII shall have become incapable of
fulfillment and shall not have been waived by Boyd Indiana in writing, or by the
Company if any of the conditions to the obligations of the
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Company set forth in Article IX shall have become incapable of fulfillment and
shall not have been waived by the Company in writing; provided, however, that
neither Boyd Indiana nor the Company shall be entitled to terminate this
Agreement pursuant to this Section 11.1(e) if such party (including, in the case
of the Company and LLC, any of the shareholders of the Company or members of
LLC) is in breach in any material respect of its representations, warranties,
covenants or agreements contained in this Agreement.
Section 11.2 Effect of Termination. In the event of termination of this
Agreement by either Boyd Indiana or the Company as provided in Section 11.1,
this Agreement shall forthwith become void and of no further force and effect
(other than this Section 11.2, Section 5.12, Section 13.2, Section 13.8 and
Section 13.10) and there shall be no liability on the part of Boyd Indiana, the
Company or LLC (or their respective shareholders, members, officers, directors,
employees, Affiliates or representatives) to one another, except for any
liability of the breaching party for any breaches of this Agreement prior to the
time of such termination.
ARTICLE XII
SURVIVAL; ESCROWS; INDEMNIFICATION
Section 12.1 Survival of Representations. All representations and
warranties contained in this Agreement shall survive the Closing and any
investigation at any time made by or on behalf of any party hereto for the
Claims Period; provided, however, that the representations and warranties
contained in Section 3.9 (Tax Matters), the indemnification for which shall not
be limited to the Escrowed Funds to the extent provided in Section 12.4, shall
survive the Closing until the expiration of the applicable statute of
limitations associated with the matters set forth therein; and provided,
further, that the representations and warranties contained in Section 3.1
(Ownership of LLC Units), Section 3.4 (Capitalization), the indemnification for
which shall not be limited to the Escrowed Funds to the extent provided in
Section 12.4 and Section 12.15, shall survive the Closing indefinitely. All
covenants and agreements in this Agreement relating to periods after the Closing
Date shall survive the Closing indefinitely (except as provided therein).
Section 12.2 [Intentionally Omitted].
Section 12.3 Company Escrow. At the Closing, the Company, Boyd Indiana
and Xxxxxx Trust and Savings Bank or another escrow agent selected by Boyd
Indiana and reasonably satisfactory to the Company ("Escrow Agent") shall enter
into an escrow agreement (the "Company Escrow Agreement") substantially in the
form of Exhibit 12.3. Pursuant to Section 1.6, Boyd Indiana will place into the
escrow account established under the Company Escrow Agreement (the "Company
Escrow Account") the Company Escrowed Funds to be held by the Escrow Agent
pursuant to the terms of this Agreement during the Claims Period, subject to the
final determination of each Company Escrow Statement submitted hereunder with
respect to the Company Escrow Account and further subject to any amounts held in
the Company Escrow Account as reasonable reserves for any Indemnifiable Losses
from pending Company Indemnification Events during the Claims Period. The fees
and expenses of the Escrow Agent under the Company Escrow Agreement shall be
paid by Boyd Indiana annually and fifty percent (50%) of all such fees and
expenses shall be deemed Company Reimbursable Losses which are includable on
Company Escrow Statements pursuant to Section 12.9. For purposes of this
Agreement, the term "Company Escrowed Funds" shall include any interest or other
income earned with respect thereto.
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Section 12.4 Indemnification by the Company for Certain Matters.
(a) Subject to the limitations contained in Section 12.4(b), the
Company hereby agrees to indemnify, defend and hold harmless the Boyd Indiana
Group, from and after the Closing, for, from and against each Company General
Indemnification Event, each Company Tax Indemnification Event and each Company
Specified Indemnifiable Loss.
(b) The Company's liability under Section 12.4(a) shall be limited
as follows:
(i) Except with respect to Company Specified Indemnifiable
Losses, the Boyd Indiana Group's monetary recourse shall be limited to the
Company Escrowed Funds and the Boyd Indiana Group shall have no monetary
recourse against the Company in the event the Company Escrowed Funds are
insufficient to reimburse Xxxx Indiana or other members of the Xxxx Indiana
Group for all Company General Indemnification Events or Company Tax
Indemnification Events, subject to Boyd Indiana's offset rights described in
subparagraph (iv) below.
(ii) The Boyd Indiana Group's monetary recourse against the
Company with respect to all Company Specified Indemnifiable Losses asserted
against, resulting to, imposed upon or incurred by the Boyd Indiana Group (or
any member thereof), shall include recourse against the Company Escrowed Funds
and recourse against the Company; provided, however, that the Boyd Indiana
Group's monetary recourse against the Company in excess of the Company's
Escrowed Funds shall not exceed the LLC Purchase Price (taking into account any
Company Escrowed Funds recovered by the Boyd Indiana Group with respect to such
Specified Indemnifiable Loss).
(iii) The Boyd Indiana Group shall have no monetary recourse
against the Company or the Company Escrowed Funds with respect to any Company
General Indemnification Event or any Company Tax Indemnification Event to the
extent that (A) the Boyd Indiana Group has already fully recovered the
applicable Company Reimbursable Loss from a third party, or (B) the applicable
Company Reimbursable Loss arises by reason of or results from a breach of a
representation or warranty that has expired at the time a claim for
indemnification is made.
(iv) The Boyd Indiana Group shall have no recourse against
the Company Escrowed Funds for any Company Reimbursable Losses (other than
Company Specified Indemnifiable Losses) until the aggregate amount of such
Company Reimbursable Losses under this Article XII exceeds One Hundred Fifty
Thousand and No/100 Dollars ($150,000.00); provided that all such Company
Reimbursable Losses (including those included in the One Hundred Fifty Thousand
and No/100 Dollars ($150,000.00) amount) shall be recoverable from the Company
Escrowed Funds once the One Hundred Fifty Thousand and No/100 Dollars
($150,000.00) amount has been exceeded.
(v) Notwithstanding the other provisions of this Section
12.4, in the event that the Maximum Company Escrow Amount on the date provided
for in Section 12.3 exceeds the amount of Company Escrowed Funds in the Company
Escrow Account on that date, the amount of such excess may be offset against the
amount of any Contingent Purchase Price Payment
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otherwise payable to the Company under Section 1.7 to the extent such excess has
not been satisfied by recourse permitted under Section 12.4(b).
(c) Subject to the provision in clause (i) of this Section 12.4(c),
the parties hereto acknowledge and agree that in connection with each Company
Specified Indemnifiable Loss, the Boyd Indiana Group (or any member thereof)
shall have the right to pursue any and all remedies in equity or at law,
including, without limitation, the following remedies:
(i) bring an action at law for any and all losses, damages,
liabilities, costs and expenses, including, without limitation, interest,
penalties and attorneys' fees and expenses (individually and collectively,
"Losses") asserted against, resulting to, imposed upon or incurred by the Boyd
Indiana Group (or any member thereof), directly or indirectly, by reason of or
resulting from each Company Specified Indemnifiable Loss; provided, however,
that in the case of a Company Specified Indemnifiable Loss of the type described
in clause (e) of that defined term, the Boyd Indiana Group shall first seek
recourse against the Company Escrowed Funds; and
(ii) take recourse pursuant to this Article XII for Company
Reimbursable Losses asserted against, resulting to, imposed upon or incurred by
the Boyd Indiana Group (or any member thereof), directly or indirectly, by
reason of or resulting from each Company Specified Indemnifiable Loss against
the Company Escrowed Funds.
(d) Except as provided in Section 12.4(b), the indemnification
provisions of this Article XII shall provide the sole and exclusive monetary
remedy to the Boyd Indiana Group, following the Closing, with respect to or in
connection with any breach by the Company or LLC of any of their respective
representations, warranties, covenants or agreements contained herein, and
(except as set forth above) the Boyd Indiana Group shall have no monetary
recourse against the Company in the event the Company Escrowed Funds are
insufficient to reimburse Xxxx Indiana or other members of the Xxxx Indiana
Group for Company Reimbursable Losses.
Section 12.5 Indemnification of the Company by Xxxx Indiana. Xxxx
Indiana hereby agrees to indemnify, defend and hold harmless the Company, from
and after the Closing, for, from and against any and all Indemnifiable Losses
asserted against, resulting to, imposed upon or incurred by the Company directly
or indirectly, by reason of or resulting from any breach of any agreement,
covenant, representation or warranty of Boyd Indiana or BGC contained herein or
made pursuant to this Agreement, or any facts or circumstances constituting such
a breach, or any Environmental Claim concerning the Real Property arising from
the acts or omissions of LLC from and after the Closing. The Company shall have
no recourse against Boyd Indiana under this Section 12.5 for any Indemnifiable
Losses (other than Xxxx Indiana's payment obligations under Sections 1.6, 1.7,
1.8, 2.8, 5.18, 10.3(i), 10.3(j) 10.4, 10.5 13.2 and 13.3) until the aggregate
amount of such Indemnifiable Losses under this Section 12.5 exceeds One Hundred
Fifty Thousand and No/100 Dollars ($150,000.00); provided that all such
Indemnifiable Losses (including those included in the One Hundred Fifty Thousand
and No/100 Dollars ($150,000.00) amount) shall be recoverable from Xxxx Indiana
once the One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) amount has
been exceeded.
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Section 12.6 Company Tax Indemnification Matters.
(a) Xxxx Indiana shall indemnify, defend and hold the Company
harmless, at any time after the Closing, for, from and against any and all
Indemnifiable Losses, asserted against, resulting to, imposed upon or incurred
by the Company, directly or indirectly, by reason of or resulting from any and
all Taxes imposed upon LLC or the Company with respect to (i) any Post-Closing
Taxes for any Post-Closing Periods; (ii) any Straddle Taxes for any Straddle
Period, but only with respect to the portion of such Straddle Period beginning
on the day after the Closing Date and in the manner provided for in Section
12.6(b); and (iii) any Taxes incurred as a result of transactions that occur on
the Closing Date but after the Closing (other than any Taxes incurred in
connection with the Transfer in excess of any portion agreed to be paid by Xxxx
Indiana pursuant to Section 13.3, the Excluded Assets or the Excluded
Liabilities).
(b) For purposes of determining the amount of Straddle Taxes for or
which relate to a Straddle Period, the Closing Date shall be treated as the last
day of a taxable period, and the portion of any such Straddle Tax that is
allocable to the taxable period that is so deemed to end on and include the
Closing Date: (i) in the case of Straddle Taxes that are either (x) based upon
or related to receipts (other than Income Taxes) or (y) imposed in connection
with any sale or other transfer or assignment of property (real or personal,
tangible or intangible), shall be deemed equal to the amount which would be
payable if the period for which such Straddle Tax is assessed ended on and
included the Closing Date and (ii) in the cases of Straddle Taxes other than
Straddle Taxes described in clause (i) hereof, shall be computed on a per diem
basis.
(c) If a notice of deficiency, proposed adjustment, adjustment,
assessment, audit, examination, suit, dispute or other claim (a "Tax Claim")
shall be delivered, sent, commenced or initiated to or against a member of the
Boyd Indiana Group by any taxing authority with respect to Taxes for which the
Company or Boyd Indiana Group is entitled to indemnification from the other,
Boyd Indiana shall promptly notify the Company in writing of the Tax Claim. If a
Tax Claim with respect to Taxes for which the Company or Xxxx Indiana Group is
entitled to indemnification from the other shall be delivered, sent, commenced
or initiated to or against the Company by the relevant taxing authority, the
Company shall promptly notify Xxxx Indiana in writing of such Tax Claim.
(d) The Company may assume and control the defense of a Tax Claim at
the Company's own cost and expense and with its own counsel if the Company
notifies Xxxx Indiana of its intent to do so within thirty (30) calendar days of
receipt of notice of the asserted Tax liability (but not less than five (5) days
before the due date of any protest or other claim in respect thereof) and
acknowledges in writing, in form and substance satisfactory to Xxxx Indiana,
that such Tax Claim involves only Straddle Taxes for which the Company is
responsible pursuant to Section 12.4(a). If the Company elects to assume the
defense of any such Tax Claim, notwithstanding anything to the contrary
contained herein, (i) the Company shall consult with Boyd Indiana and shall not
enter into any settlement with respect to any such Tax Claim without Xxxx
Indiana's prior written consent (which shall not be unreasonably withheld) if
the effect of such settlement would be to materially increase the liability for
Taxes of Boyd Indiana or LLC under this Section 12.6 for periods after the
Closing Date; (ii) the Company shall keep Boyd Indiana informed of all material
developments and events relating to such Tax Claim; and
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(iii) Xxxx Indiana shall have the right to participate, at its own cost and
expense, in (but not to control) the defense of such Tax Claim.
(e) If the Company (i) does not timely assume control of a Tax Claim
involving only Straddle Taxes for which the Company is responsible pursuant to
this Section 12.6; or (ii) where notice is received by the Company of a Tax
Claim with respect to Straddle Taxes of the Company, does not provide Boyd
Indiana with the notice of a Tax Claim involving Taxes for which Boyd Indiana is
entitled to indemnification pursuant to Section 12.4(a), Boyd Indiana shall have
the full right to contest such Tax Claim and shall be entitled to settle or pay
in full such Tax Claim (in its sole discretion) and thereafter pursue its right
to indemnification under Section 12.4 without prejudice.
(f) With respect to any Tax Claim involving Taxes for which both
Boyd Indiana and the Company are responsible, Xxxx Indiana and the Company shall
attempt to separate such Tax Claim into two (2) Tax Claims, one (1) involving
only Straddle Taxes for which Xxxx Indiana is solely responsible and another
involving only Straddle Taxes for which the Company is solely responsible
pursuant to Sections 12.4(a) and 12.6(a); provided, however, that, if the
Company agrees, Xxxx Indiana shall control the defense of such Tax Claim without
separation, and Section 12.6(e) shall apply to such Tax Claim. If Xxxx Indiana
and the Company do not succeed in separating such Tax Claim, each shall
cooperate reasonably in the defense of such Tax Claim, neither Xxxx Indiana nor
the Company shall take any action with respect to such Tax Claim without the
other's written consent (which shall not be unreasonably withheld), and Xxxx
Indiana and the Company shall agree as to any settlement or compromise of such
Tax Claim.
(g) For purposes of determining whether and when a Company Tax
Indemnification Event has taken place, a Company Tax Indemnification Event shall
be deemed to occur immediately after the occurrence of the Indemnifiable Loss
which constitutes the Company Tax Indemnification Event.
(h) Boyd Indiana shall pay to the Company any amount which Boyd
Indiana agrees is payable pursuant to Section 12.6(a) within ten (10) days after
receipt of written notice from the Company of a Indemnifiable Loss giving rise
to an obligation of the Company. If Boyd Indiana and the Company cannot agree on
the amount payable by Boyd Indiana with respect to such noticed Indemnifiable
Loss, either party may commence legal proceedings to resolve any such dispute
after the expiration of such ten (10) day period following the Company's notice
of Indemnifiable Loss.
Section 12.7 Preparation and Filing of LLC Tax Returns.
(a) The Company shall cause the LLC to prepare and file (in each
case, at the Company's cost and expense and in a manner consistent with past
practice) on a timely basis all Tax Returns of LLC for all Pre-Closing Periods,
which Tax Returns are due (giving effect to any extensions thereto) on or before
the Closing Date. Xxxx Indiana shall cause LLC to pay all Taxes shown to be due
and payable thereon that are Excluded Taxes and the Company shall pay all Taxes
shown to be due and payable thereon in excess of, or other than, Excluded Taxes.
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(b) Following the Closing Date, Boyd Indiana shall cause LLC to
prepare and file (in each case, at Xxxx Indiana's cost and expense and in a
manner consistent with past practice) on a timely basis all Tax Returns of LLC
other than those provided for in Section 12.7(a). Subject to Section 12.4(a) and
Section 12.6 Xxxx Indiana shall cause the LLC to pay all Taxes shown to be due
and payable thereon. With respect to Tax Returns for Straddle Periods, no later
than ten (10) Business Days before such Tax Returns are filed, Xxxx Indiana
shall provide drafts of such Tax Returns to the Company for its reasonable
review.
Section 12.8 Defense of Claims By the Company and Xxxx Indiana.
(a) Except as otherwise provided in this Agreement or as provided in
Section 12.8(c), the appropriate member of the Xxxx Indiana Group will control
the defense or settlement of all claims, actions or proceedings made or brought
by any Person or group who is not a party to this Agreement ("Independent Party
Claims") which may give rise to a Company Reimbursable Loss constituting a
Company Indemnification Event giving rise to a claim for indemnification under
Section 12.4. Xxxx Indiana shall provide notice of any such claim, action or
proceeding to the Company, which shall be entitled to participate, through
counsel selected by it, at the Company's expense, in the defense of such claim.
Xxxx Indiana shall consult with the Company prior to settling any such claim (if
such settlement will be satisfied, in part or in whole, from Company Escrowed
Funds) and will not settle such claim to the extent it involves a Company
Reimbursable Loss in excess of Ten Thousand and No/100 Dollars ($10,000.00)
without the consent of the Company, which consent will not be unreasonably
withheld.
(b) In addition, if the Independent Party Claim represents a claim
in connection with any pre-Closing Date action or event arising in the ordinary
course of business which is either (i) covered by insurance or (ii) would have
been handled prior to the Closing Date by the Company's personnel, the matter
will be handled by LLC's personnel under Section 12.8(b) so long as no out of
pocket costs are incurred by LLC or Boyd Indiana in connection with the defense
thereof. The Company hereby authorizes Boyd Indiana to settle any Independent
Party Claim under this Section 12.8(b), subject to the same limitations of the
third sentence of Section 12.8(a), and any amounts paid in settlement of any
Independent Party Claim under this Section 12.8(b) will be paid by the Company
upon receipt of a release of such claim, or to the extent the Company fails to
pay such amounts, such amounts will be treated as a Company Specified
Indemnifiable Loss.
(c) In the event of an Independent Party Claim relating to a
criminal action or civil fraud by any of the Company or LLC, or relating to any
of the other events giving rise to an obligation of the Company to indemnify the
Boyd Indiana Group pursuant to Section 12.4, Boyd Indiana will provide the
Company with notice of such claim. The Company may, by giving written notice to
Boyd Indiana, elect to assume at its own expense the defense of such Independent
Party Claim if the Company acknowledges in writing its obligation to indemnify
Xxxx Indiana pursuant to this Agreement with respect to (and in the full amount
provided for by this Agreement) such Independent Party Claim and the Independent
Party Claim involved seeks (and continues to seek) primarily monetary damages;
provided, however, that counsel selected by the Company shall be reasonably
satisfactory to Xxxx Indiana. Xxxx Indiana will defend in good faith any
Independent Party Claim as to which it has so assumed the defense under this
Section 12.8. Notwithstanding the Company's election to assume the defense, the
Xxxx Indiana
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Group shall have the right to employ separate counsel (including local counsel),
and the Company will pay the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the Company would present
such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both a member of the Boyd
Indiana Group and the Company and the member of the Boyd Indiana Group shall
have reasonably concluded that there may be legal defenses available to it
and/or other members of the Xxxx Indiana Group which are different from or
additional to those available to the Company (in which case, if such member of
the Xxxx Indiana Group notifies the Company in writing that it elects to employ
separate counsel at the expense of the Company, the Company shall not have the
right to assume the defense of such action on behalf of such member of the Boyd
Indiana Group); (iii) the Company shall not have employed counsel reasonably
satisfactory to the member of the Boyd Indiana Group to represent the member of
the Boyd Indiana Group within thirty (30) days after notice of the institution
of such action; or (iv) the Company shall authorize the member of the Xxxx
Indiana Group to employ separate counsel at the expense of the Company. Without
obtaining a complete and unconditional release of the Xxxx Indiana Group from
all liability in respect of such Independent Party Claim, the Company will not
enter into any settlement of such Independent Party Claim without the consent of
the Boyd Indiana Group, which consent shall not be unreasonably withheld.
Notwithstanding the above, the Boyd Indiana Group, during the period the Company
is determining whether to elect to assume the defense of a matter covered by
this Section 12.8(c) (which period shall not exceed thirty (30) days), may take
such reasonable actions as are necessary to preserve any and all rights with
respect to such matter, without such actions being construed as a waiver of the
Xxxx Indiana Group's rights to defense and indemnification pursuant to this
Section 12.8(c) and Section 12.4.
Section 12.9 Company Escrow Statements.
(a) During the Claims Period or within thirty (30) days after the
end of the Claims Period, Boyd Indiana may at any time or from time to time
deliver, on behalf of the Boyd Indiana Group, to the Company a statement (a
"Company Escrow Statement") setting forth with reasonable specificity the amount
and nature of Indemnifiable Losses from Company Indemnification Events incurred
or allocated during the Claims Period (whether or not liquidated during the
Claims Period), together with such invoices, bills, statements and other
documentation as shall reasonably verify the amounts so claimed. If Xxxx Indiana
does not submit any Company Escrow Statement during the period referred to in
the preceding sentence, the amount of Company Reimbursable Losses shall be
deemed to be Zero and No/100 Dollars ($0.00).
(b) On or prior to the fifteenth (15th) day following the delivery
of a Company Escrow Statement, the Company may deliver to Xxxx Indiana a written
statement (a "Company Disputing Escrow Statement") setting forth with reasonable
specificity any disagreement with any of the amounts contained in a Company
Escrow Statement which could affect the necessity or amount of any release of
Company Escrowed Funds to any member of the Xxxx Indiana Group pursuant to
Section 12.10. If the Company does not submit a Company Disputing Escrow
Statement on or prior to such fifteenth (15th) day then such Company Escrow
Statement shall be deemed to have been finally determined for purposes of this
Agreement. If the Company does submit a Company Disputing Escrow Statement on or
prior to such fifteenth (15th) day, any amounts contained in such Company Escrow
Statement which are not disputed by the Company
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Disputing Escrow Statement shall be deemed to have been finally determined for
purposes of this Agreement.
(c) For a period of ten (10) days, Xxxx Indiana and the Company
shall attempt to resolve in good faith any dispute or disagreement between a
Company Escrow Statement and a Disputing Escrow Statement. Amounts contained on
a Company Escrow Statement and resolved by such attempts shall be deemed to have
been finally determined for purposes of this Agreement. After such ten (10) day
period, either party may commence legal proceedings to resolve any such dispute.
Section 12.10 Release of Company Reimbursable Losses. After a Company
Escrow Statement is finally determined as provided in Section 12.9, Xxxx Indiana
and the Company shall jointly submit such Company Escrow Statement to the Escrow
Agent. Within ten (10) days of the receipt of each such Company Escrow
Statement, the Escrow Agent shall record the total dollar amount of Company
Reimbursable Losses on the books and records of the Escrow Agent and shall
deliver by wire transfer of immediately available funds to the account or
accounts specified by Xxxx Indiana an aggregate amount equal to the Company
Reimbursable Losses shown on such Company Escrow Statement together with the pro
rata portion of the interest and earnings on the Company Escrowed Funds.
Section 12.11 Release of Escrowed Funds to the Company.
(a) Within two (2) business days of the latest to be made of the
payment (or release from escrow) of (i) the adjustment amount related to the
final determination of the LLC Closing Date Working Capital Amount or (ii) the
final determination of the Actual Completion Cost Amount, the Escrow Agent shall
record the total dollar amount of the positive difference ("Initial Company
Escrow Release Amount"), if any, resulting from the subtraction of (x) the sum
of any Company Escrowed Funds delivered under clauses (i) and (ii) above from
(y) the sum of Three Million Five Hundred Thousand and No/100 Dollars
($3,500,000.00) and the Escrow Adjustment Amount. The Escrow Agent shall
promptly deliver by wire transfer of immediately available funds to the
liquidation account or accounts specified by the Company an aggregate amount
equal to the Initial Company Escrow Release Amount, together with the pro rata
portion of the interest and earnings on the Company Escrowed Funds.
(b) To the extent the amount of Company Escrowed Funds in the
Company Escrow Account after the last day for delivery by Xxxx Indiana pursuant
to Section 12.9(a) of a Company Escrow Statement is greater than the Maximum
Company Escrow Amount, the Escrow Agent shall record the total dollar amount of
such excess on the books and records of the Escrow Agent and shall deliver on,
or as promptly as practicable after, the thirty first (31st) day following the
expiration of the Claims Period, by wire transfer of immediately available funds
to the liquidation account or accounts specified by the Company an aggregate
amount equal to such excess, together with the pro rata portion of the interest
and earnings on the Company Escrowed Funds.
(c) In the event that, at the time of the release to the account or
accounts specified by the Company pursuant to Section 12.11(b) there remain any
amount of Company Escrowed Funds with respect to (i) Company Escrow Statements
which have not yet been resolved
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pursuant to Sections 12.4 and 12.9 or (ii) indemnity payments for Company
Reimbursable Losses that have not yet been made to Xxxx Indiana, the Escrow
Agent shall promptly following the resolution of all such pending
indemnification matters, deliver by wire transfer of immediately available funds
to the liquidation account or accounts specified by the Company an aggregate
amount equal to the remaining Company Escrowed Funds, if any, together with the
pro rata portion of the interest and earnings on such remaining Company Escrowed
Funds.
Section 12.12 Environmental Remediation Matters. To the extent that an
Indemnifiable Loss includes claims arising from the obligation to conduct
environmental investigation and/or remediation or response, Indemnifiable Losses
for environmental investigation and/or remediation activities shall be limited
to those activities required by Law and arising from or related to the release,
threatened release or response, as those terms are defined in Environmental Law,
of any Materials of Environmental Concern or the violation of any Environmental
Law.
Section 12.13 Subrogation. Upon an Indemnifying Party making any payment
to an Indemnitee pursuant to this Article XII, such Indemnifying Party will, to
the extent of such payment, be subrogated to all rights of such Indemnitee
against any third party in respect of the Indemnifiable Loss to which the
payment relates; provided, however, that, until such Indemnitee recovers full
payment of its Indemnifiable Loss, any and all claims of the Indemnifying Party
against any such third party on account of said payment are hereby made
expressly subordinated and subjected in right of payment to the Indemnitee's
rights against such third party. Without limiting the generality of any other
provision, the Indemnitee and the Indemnifying Party will duly execute upon
request all instruments reasonably necessary to evidence and perfect the
above-described subrogation and subordination rights.
Section 12.14 Adjustment to Purchase Price. Except to the extent
otherwise provided by law, the parties hereto covenant and agree that each party
shall treat each payment, if any, made to or by it pursuant to this Article XII
as an adjustment to the LLC Purchase Price.
Section 12.15. Liquidation of Company. Xxxx Indiana acknowledges that
the Board of Directors of the Company has adopted a Plan of Liquidation to
voluntarily liquidate promptly following the Closing and to distribute proceeds
of such liquidation to its shareholders all in accordance with applicable
requirements of Indiana law. The Plan of Liquidation shall appoint a
representative or representatives to act on behalf of the Company for the
purposes of this Agreement following such a liquidation, including receiving any
payments hereunder following such liquidation. The liability of shareholders who
receive such proceeds in liquidation of the Company with respect to obligations
of the Company under this Agreement shall be subject to any applicable
limitations under the corporate dissolution laws of the State of Indiana;
provided that in the event (i) Xxxx Indiana's enforcement against the Company or
the shareholders of a claim governed by Section 12.4(b)(ii) for one or more
Company Specified Indemnifiable Losses is barred by reason of the expiration of
the limitation period under Ind. Code Section 23-1-45-7(c) or other applicable
Indiana law, and (ii) any Individual Covenantor had knowledge that the
representation or warranty giving rise to such claim was not true and correct in
all material respects as of the date given or made, each Individual Covenantor
hereby severally waives the benefit of the limitation period under Ind. Code
Section 23-1-45-7(c) or other applicable Indiana law limiting recourse against
the Company or its shareholders by reason of the Company's dissolution and
severally agrees that he shall be fully and primarily liable for, and severally
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agrees to pay and perform the full (as opposed to only a pro rata) amount of,
the Company's indemnification obligations under Section 12.4 with respect to
such claim, up to an aggregate maximum amount of Four Million and No/100 Dollars
($4,000,000) per each Individual Covenantor for all such claims, as and to the
same extent that the Company would be liable for such indemnification if the
Company had not been dissolved, provided that an Individual Covenantor shall be
obligated to pay for any Company Reimbursable Losses hereunder only to the
extent such Company Reimbursable Losses shall not already have been fully paid
by one or more other Individual Covenantors.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Remedies Cumulative. Except as herein expressly provided
(including the provisions of Section 12.4), the remedies provided herein shall
be cumulative and shall not preclude assertion by any party hereto of any other
rights or the seeking of any other remedies against any other party hereto.
Section 13.2 Expenses. Except as otherwise expressly provided in
Schedule 13.2, the Company and LLC, and Xxxx Indiana and BGC shall each pay its
own legal, accounting and other miscellaneous expenses incident to this
Agreement.
Section 13.3 Transfer Taxes. All transfer, sales, use, documentary or
other similar Taxes arising out of or related to the sale of the LLC Units or
the Transfer pursuant to this Agreement shall be borne fifty percent (50%) by
the Company and fifty percent (50%) by Xxxx Indiana. In the event that the
Company pays the full amount of such taxes prior to Closing, they shall be
reimbursed by Xxxx Indiana for fifty percent (50%) of such amount not later than
the Closing.
Section 13.4 Press Releases and Announcements. After the date of this
Agreement and prior to the Closing, no party to this Agreement will directly or
indirectly make or cause to be made any public announcement or disclosure, or
issue any notice with respect to this Agreement or the transactions contemplated
by this Agreement without the prior consent of the other parties to this
Agreement; provided, however, the Company may disclose such information, upon
the prior consultation with Xxxx Indiana of the means of such disclosure and the
specific items to be disclosed to (i) the City and the applicable gaming
authorities in the State of Indiana and (ii) employees and vendors, and Boyd
Indiana may disclose such information, upon the prior consultation with the
Company of the means of such disclosure and the specific items to be disclosed,
to the applicable gaming authorities in the States of Illinois, Louisiana,
Mississippi, Nevada and New Jersey; and provided further, that any party to this
Agreement may make any public announcement or disclosure which is required by
law or regulation (in which case the disclosing party shall to the extent
practicable advise the other parties to this Agreement and provide them with a
copy of such proposed disclosure prior to making the disclosure).
Section 13.5 Entire Agreement. This Agreement and the Disclosure
Schedules, Exhibits and Schedules and other writings referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to their subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter.
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Section 13.6 Amendment, Extension and Waiver. This Agreement may not be
amended except by an instrument in writing signed on behalf of all of the
parties hereto. Any agreement on the part of a party hereto to any extension or
waiver under this Section 13.6 shall be valid only if set forth in an instrument
in writing signed on behalf of such party. Except as expressly provided in this
Agreement, no delay on the part of any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder
operate as a waiver of any other right, power or privilege hereunder, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
Section 13.7 Headings. The article and section headings contained herein
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
Section 13.8 Notices. All notices, requests, demands and other
communications made under or by reason of the provisions of this Agreement will
be in writing and will be given by hand delivery, certified or registered mail,
return receipt requested, facsimile (with a copy also sent by hand delivery or
air courier, which shall not alter the time at which the facsimile notice is
deemed received) or air courier to the parties at the addresses set forth below.
Such notices shall be deemed given: at the time personally delivered, if
delivered by hand with receipt acknowledged; at the time received, if sent by
certified or registered mail; upon transmission thereof by the sender and
issuance by the transmitting machine of a confirmation slip that the number of
pages constituting the notice have been transmitted without error, if faxed; and
the first Business Day after timely delivery to the courier, if sent by air
courier specifying next day delivery.
If to the Company or (prior to the Closing) LLC:
Blue Chip Casino, Inc.
000 X. XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx and Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy (which shall not constitute notice) given in the manner
prescribed above to:
Xxxx, Xxxx & Xxxxx
Three First National Plaza, Suite 3300
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. XxXxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
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If to LLC after the Closing:
c/x Xxxx Gaming Corporation
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxx
Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: Xx. Xxxxxx: (000) 000-0000
Xx. Xxxxxx: (000) 000-0000
With a copy (which shall not constitute notice) given in the manner
prescribed above to:
Xxxxxxxx & Xxxxxxxx LLP
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Xxxx Indiana or BGC:
Xxxx Gaming Corporation
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxx
Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: Xx. Xxxxxx: (000) 000-0000
Xx. Xxxxxx: (000) 000-0000
With a copy (which shall not constitute notice) given in the manner
prescribed above to:
Xxxxxxxx & Xxxxxxxx LLP
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Section 13.9 Assignment. This Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors, legal
representatives and assigns, but this Agreement may not be assigned by any party
without the written consent of the other parties; provided, however, that (i)
Xxxx Indiana may assign all or any portion of their respective rights hereunder
without the prior written consent of the other parties hereto to an Affiliate of
Boyd Indiana, but such assignment shall not relieve Boyd Indiana of their
respective obligations hereunder and (ii) the Company may adopt and effect the
Plan of Liquidation provided for in
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Section 12.15 in connection with the liquidation of the Company. Any attempted
assignment in violation of this Section 13.9 shall be void.
Section 13.10 Applicable Law. This Agreement will be governed by and
construed and enforced in accordance with the laws of the State of Indiana
applicable to agreements made and to be performed entirely within such State,
without giving effect to the conflict of laws provisions thereof.
Section 13.11 Words in Singular and Plural Form. Words used in the
singular form in this Agreement shall be deemed to import the plural, and vice
versa, as the sense may require.
Section 13.12 Further Assurances; Antitrust Notification.
(a) Each of the Company, LLC, BGC and Xxxx Indiana will use all
commercially reasonable efforts to do or cause to be done all things necessary,
proper or advisable to consummate the transactions contemplated by this
Agreement. Without limiting the foregoing, the Company and Xxxx Indiana and BGC
will reasonably cooperate, and will cause their respective Affiliates, officers,
employees, agents, auditors and representatives reasonably to cooperate, in (i)
preparing and filing all Tax Returns (including amended returns and claims for
refund), including maintaining and making available to each other all records
necessary in connection with Taxes and in resolving all disputes and audits with
respect to all taxable periods relating to Taxes and (ii) providing to each
other all information and customary consents pertinent to the transactions
contemplated by this Agreement, including information as to their, if
applicable, ownership structure, corporate structure, officers and directors,
shareholders and members' identity, financing, transfers of interest and other
information, as shall be required by any Governmental Body with jurisdiction
over such parties in connection with the consummation of the transactions
contemplated hereby or with respect to any federal or state securities law
requirements in any jurisdiction in which such parties have an interest.
(b) Each of the Company, LLC, Xxxx Indiana and BGC (and any
shareholder or member thereof, as required) will as promptly as practicable, but
in no event later than ten (10) business days following the execution and
delivery of this Agreement, file or cause to be filed with the FTC and the DOJ
the notification and report form required for the transactions contemplated
hereby and any supplemental information requested in connection therewith
pursuant to the HSR Act. Any such notification and report form and supplemental
information will be in substantial compliance with the requirements of the HSR
Act. Each of Xxxx Indiana, BGC, LLC and the Company will furnish to the others
such necessary information and reasonable assistance as the others may request
in connection with the preparation of any filing or submission which is
necessary under the HSR Act. Each of the Company, LLC, Xxxx Indiana and BGC will
keep each other apprised of the status of any communications with, and inquiries
or requests for additional information addressed to the entity that filed a
notification and report form as an acquired or acquiring person from, the FTC or
the DOJ and shall comply or cause its respective filing person to comply
promptly with any such inquiry or request. Each of the Company, LLC, Xxxx
Indiana and BGC will use commercially reasonable efforts to obtain any clearance
required under the HSR Act for the purchase and sale of the LLC Units.
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Section 13.13 Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
Section 13.14 No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder. All references herein to the enforceability of agreements with third
parties, the existence or non-existence of third-party rights, the absence of
breaches or defaults by third parties, or similar matters or statements, are
intended only to allocate rights and risks between the Parties and were not
intended to be admissions against interests, give rise to any inference or proof
of accuracy, be admissible against any Party by any non-Party, or give rise to
any claim or benefit to any non-Party.
Section 13.15 Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof (or the remaining portion thereof) or the application
of such provision to any other persons or circumstance.
Section 13.16 Consent to Jurisdiction. Xxxx Indiana irrevocably submits
to the non-exclusive jurisdiction of (i) the circuit court of the State of
Illinois, Xxxx County, and (ii) the United States District Court for the
Northern District of Illinois, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
The Company and LLC irrevocably submits to the non-exclusive jurisdiction of (i)
the circuit court of the State of Nevada, Xxxxx County, and (ii) the United
States District Court for the Nevada District, for the purposes of any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby. Xxxx Indiana, the Company and LLC each further agrees that
service of any process, summons, notice or document by United States registered
mail to Xxxx Indiana's, the Company's or LLC's respective address shall be
effective service of process for any action, suit or proceeding in Illinois or
Nevada with respect to any matters to which it has submitted to jurisdiction in
such jurisdiction as set forth above in this Section 13.16. Xxxx Indiana
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or other proceeding arising out of this Agreement or the
transactions contemplated hereby in (x) the circuit court of the State of
Illinois, Xxxx County, or (y) the United States District Court for the Northern
District of Illinois, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
The Company and LLC irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or other proceeding arising out of this
Agreement or the transactions contemplated hereby in (i) the circuit court of
the State of Nevada, Xxxxx County, or (ii) the United States District Court for
the Nevada District, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
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ARTICLE XIV
DEFINITIONS
"Accounting Firm" shall mean PricewaterhouseCoopers LLP or its
successor.
"Actual Completion Cost Amount" shall mean the amount calculated
pursuant to Section 10.3(j) above.
"Actual Construction Cost Amount" shall mean the amount calculated
pursuant to Section 10.3(i) above.
"Affiliate" shall have the meaning defined in the rules and regulations
of the Securities and Exchange Commission under the Securities Act of 1933, as
amended, as of the date of this Agreement.
"Agreement" shall mean this Unit Purchase Agreement, including the
Exhibits, Disclosure Schedules and Schedules thereto, as they may be amended
from time to time.
"Allocations" shall have the meaning ascribed to such term in Section
10.1(b).
"Approved Capital Expenditures" shall have the meaning ascribed to such
term in Section 5.1(c).
"Assets" means all of the tangible and intangible assets and rights of
every nature, kind and description, wherever located, relating to or used in the
Business, but not including the Excluded Assets. The Assets shall include, but
are not limited to, the following (except to the extent constituting Excluded
Assets): (i) all Tangible Personal Property owned by the Company and existing on
the Transfer Date; (ii) all of the accounts receivable of the Company at the
Transfer Date; (iii) cash, cash equivalents and securities of the Company on
hand as of the Transfer Date; (iv) prepaid taxes, prepaid insurance, prepaid
deposits and all other prepaid expenses and all deferred charges of the Company
existing on the Transfer Date, except any prepayment relating to an Excluded
Liability; (v) all of the Company's right, title and interest in and under the
Assumed Contracts (except as otherwise provided in Section 2.8); (vi) all
customer and supplier lists, mailing lists, databases related thereto, marketing
studies, and analyses of any kind whether performed by or on behalf of the
Company, and all catalogs, brochures and handbooks existing on the Transfer
Date; (vii) all of the Company's right, title and interest in and to the
Intangibles of the Company, including all Governmental Approvals, excluding
those Governmental Approvals the transfer of which is prohibited by law; (viii)
all of the Company's right, title and interest to the Real Property (which
includes the Hotel) existing on the Transfer Date; (ix) all of the Company's
right, title and interest in and to the Riverboat; (x) all rights under the
Equipment Leases existing on the Transfer Date; and (xi) the originals or, if
not available, copies of all of the Books and Records, provided that the Company
shall be entitled to retain copies of any such materials the originals of which
have been delivered to Xxxx Indiana.
"Assignment Arrangement" shall have the meaning ascribed to such term in
Section 2.8.
"Assignment of Contracts" shall have the meaning ascribed to such term
in Section 2.1(e).
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"Assignment of Development Agreement" shall have the meaning ascribed to
such term in Section 2.1(g).
"Assignment of Governmental Approvals and Intangibles" shall have the
meaning ascribed to such term in Section 2.1(f).
"Assignment of Leases" shall have the meaning ascribed to such term in
Section 2.1(b).
"Assumed Contracts" shall mean those Contracts of the Company set forth
in Schedule 2.1(e). Upon mutual agreement by the Company and Xxxx Indiana,
Schedule 2.1(e) may be amended after the date of this Agreement to add
additional agreements as Assumed Contracts.
"Assumed Liabilities" means only the following liabilities (excluding
any Excluded Liabilities) of the Company: (i) liabilities relating directly or
indirectly to the Business or the Assets and set forth on Schedule 14.1; (ii)
liabilities arising from and after the Closing Date under the Assumed Contracts;
(iii) accrued accounts payable of the Business arising in the ordinary course of
Business to the extent reflected in the LLC Working Capital Statement; (iv)
accrued liabilities of the Business to the extent reflected in the LLC Working
Capital Statement arising in the ordinary course of business; and (v)
liabilities arising out of events or occurrences occurring from and after the
Closing Date and related to the operation of the Assets or the Business after
the Closing Date.
"Benefit Plan" shall have the meaning ascribed to such term in Section
3.19(a).
"BGC" means Xxxx Gaming Corporation, a Nevada corporation.
"Xxxx of Sale (Tangible Personal Property)" shall have the meaning
ascribed to such term in Section 2.1(d).
"Xxxx of Sale (Riverboat)" shall have the meaning ascribed to such term
in Section 2.1(c).
"Books and Records" means all books, documents, records, articles,
bylaws, organizational documents, minutes, consents, resolutions, financial and
operating data, and other similar items pertaining to the use, management,
acquisition, development or operation of the Business (including, without
limitation, all deeds, title policies, surveys, environmental reports, soils
studies, architectural plans and renderings, engineering studies, plans or
reports, mechanical and other plans, copies of Governmental Approvals, files,
writing papers and data in the possession of the independent public accountants,
internal audit reports, management letters from independent public accountants
with respect to the systems of internal control, notebooks, and other data
relating to the Business, whether in tangible form or in the form of intangible
computer storage media); provided, however, that Books and Records shall not
include any document or other materials (i) the disclosure of which would waive
the attorney-client privilege of the Company or attorney work product as to the
Company and (ii) which relate solely to Excluded Liabilities.
"Xxxx Indiana" shall have the meaning ascribed to such term in the
Preamble.
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"Boyd Indiana Group" means, at any time after the Closing, Xxxx Indiana,
BGC, LLC, or any of their respective Affiliates.
"Business" shall have the meaning ascribed to such term in the Preamble.
"Business Day" means any day (other than a Saturday or Sunday) on which
banks are permitted to be open and transact business in the City of Chicago,
Illinois.
"Business Know-How" means all books, records, technology, formulas,
know-how, quality control records, records relating to the adoption and use of
the Intellectual Property, marketing plans, sales records and histories, market
research data, promotional advertising and marketing materials, radio and
television commercials, print advertisements, customer lists, designs, films,
photography, mechanical art, color separations, prints, plates, and graphic
materials, and inventory records, used in or necessary to conduct the Business
as currently conducted, in any jurisdiction in which any of the Company or LLC
operates or does business.
"Buyer's Computed Amount" shall have the meaning ascribed to such term
in Section 1.7(b).
"Buyer's Computed Amount Statement" shall have the meaning ascribed to
such term in Section 1.7(b).
"Buyer's Construction Costs Statement" shall have the meaning ascribed
to such term in Section 10.3(i)(i).
"Buyer's Disclosure Schedule" shall have the meaning ascribed to such
term in Article IV.
"Buyer's Phase I Environmental Investigation" shall have the meaning
ascribed to such term in Section 7.1(a).
"Buyer's LLC Working Capital Amount" shall have the meaning ascribed to
such term in Section 1.8(b).
"Buyer's LLC Working Capital Statement" shall have the meaning ascribed
to such term in Section 1.8(b).
"City" means the City of Michigan City, Indiana and any political
subdivision or governmental authority thereof.
"City Consent" shall have the meaning ascribed to such term in Section
2.2(q).
"Claims Period" shall mean the period beginning on the Closing Date and
ending twelve (12) months after the Closing Date.
"Closing" shall have the meaning ascribed to such term in Section 1.3.
"Closing Date" means the date on which the Closing occurs.
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"Code" means the Internal Revenue Code of 1986, as amended, and
reference to any section of the Code shall refer to that section as in effect at
the date or, if such section has been modified, corresponding provisions of
subsequent Federal tax law in effect at the relevant time.
"Company" shall have the meaning ascribed to such term in the Preamble.
"Company Balance Sheet" shall have the meaning ascribed to such term in
Section 3.6.
"Company's Actual Construction Cost Amount" shall have the meaning
ascribed to such term in Section 10.3(i).
"Company Closing Payment" means (a) Two Hundred Fifty-One Million and
No/100 Dollars ($251,000,000.00) plus Company's Estimated Construction Cost
Amount; minus (b) the Company Escrowed Funds; minus (c) to the extent the LLC
Preliminary Working Capital Amount is less than Zero and No/100 Dollars ($0.00),
the amount of such shortfall; minus (d) the replacement cost of that number of
electronic gaming devices, if any, equal to the positive difference between the
number of slot machines shown in Schedule 3.13(c) and the number of slot
machines owned by LLC on the Closing Date; plus (e) to the extent the LLC
Preliminary Working Capital Amount is greater than Zero and No/100 Dollars
($0.00), the amount of such excess; plus (f) to the extent applicable pursuant
to Section 5.18, the Potential Land Price.
"Company's Computed Amount Statement" shall have the meaning ascribed to
such term in Section 1.7(b).
"Company Disputing Escrow Statement" shall have the meaning ascribed to
such term in Section 12.9(b).
"Company Environmental Reports" shall have the meaning ascribed to such
term in Section 3.20(h).
"Company Escrow Account" shall have the meaning ascribed to such term in
Section 12.3.
"Company Escrow Agreement" means the Escrow Agreement among Xxxx
Indiana, the Company and the Escrow Agent substantially in the form of Exhibit
12.3.
"Company Escrow Statement" shall have the meaning ascribed to such term
in Section 12.9(a).
"Company Escrowed Funds" means the portion of the Company Closing
Payment reserved from time to time in the Company Escrow Account, which amount
initially shall equal Seven Million and No/100 Dollars ($7,000,000.00) plus the
Escrow Adjustment Amount.
"Company Financial Statements" shall have the meaning ascribed to such
term in Section 3.6.
"Company General Indemnification Event" means any Company Reimbursable
Losses asserted against, resulting to, imposed upon or incurred by any member of
the Xxxx Indiana
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Group, directly or indirectly, during the applicable period of survival of such
agreement, covenant, representation or warranty by reason of or resulting from
(i) a breach of any agreement, covenant, representation or warranty of the
Company or LLC contained in or made pursuant to this Agreement, or any facts or
circumstances constituting such a breach or (ii) Excluded Environmental Matters.
"Company Indemnification Event" means either a Company General
Indemnification Event or a Company Tax Indemnification Event.
"Company Reimbursable Losses" means all Indemnifiable Losses which are
finally determined to be allocable to the Company pursuant to Section 12.9.
"Company/LLC Disclosure Schedule" shall have the meaning ascribed to
such term in Article III.
"Company Construction Costs Statement" shall have the meaning ascribed
to such term in Section 10.3(i)(i).
"Company Specified Indemnifiable Loss" means each Indemnifiable Loss
asserted against, resulting to, imposed upon or incurred by any member of the
Xxxx Indiana Group, directly or indirectly, by reason of or resulting from (a)
any and all criminal action or civil fraud of the Company or LLC, or any
shareholder or member thereof on or prior to the Closing Date; (b) any breach of
Section 3.1 (Ownership), Section 3.4 (Capitalization), Section 3.9(a) (Tax
Matters), Section 3.27 (Commissions) or Section 5.8 (Tax Status) (as it relates
to the Company or LLC); (c) any willful failure by the Company or LLC to
disclose to the Boyd Indiana Group herein any breach or any representation or
warranty to Xxxx Indiana contained herein of which breach (or any facts or
circumstances constituting such a breach) the Company or LLC has actual
knowledge as of the date hereof or on or prior to the Closing Date; (d) any
Excluded Asset, Excluded Liability, breach by the Company of its obligations to
transfer the Assets to LLC as set forth in Article II or breach of any of their
covenants, agreements and obligations hereto relating to the Excluded Assets or
the Excluded Liabilities; or (e) the amount of any fees owed by the Company as
the Losing Party under Section 1.8(d) or any shortfall pursuant to Section
1.8(f).
"Company Tax Indemnification Event" means any and all Indemnifiable
Losses asserted against, resulting to, imposed upon or incurred by any member of
the Xxxx Indiana Group, directly or indirectly, by reason of or resulting from
any and all Taxes imposed upon LLC, the Company or the Company's shareholders to
the extent not reserved for on the LLC Closing Date Working Capital Statement,
other than Excluded Taxes, (a) with respect to any Pre-Closing Periods; (b) with
respect to any Straddle Periods but only with respect to the portion of such
Straddle Period ending on the close of the Closing Date and in the manner
provided in Section 12.6(b); or (c) as to the Company, with respect to any
period (or portion thereof) after the Closing Date. Without limiting the
generality of the foregoing, a "Company Tax Indemnification Event" may arise
from (i) the failure of the Company to be an S corporation, the failure of LLC
to be a limited liability company or a Disregarded Entity or the termination of
the Company's status as an S corporation or LLC's status as a limited liability
company or a Disregarded Entity; (ii) the imposition of any Taxes on the Company
for any taxable period in which the Company's election of subchapter S status
was in effect (including but not limited
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to those Taxes described in Sections 1374 and 1375 of the Code); or (iii) the
imposition of any Taxes on LLC as a result of the retention by the Company of
the Excluded Assets or Excluded Liabilities described in Section 2.1.
"Company's Actual Construction Cost Amount" shall be the amount
calculated pursuant to Section 10.3(i) above.
"Company's Estimated Construction Cost Amount" shall be the amount set
forth on the Preliminary Construction Costs Statement.
"Company's Working Capital Statement" shall have the meaning ascribed to
such term in Section 1.8(b).
"Completion Date" means the date upon which all invoices for costs and
expenses incurred for labor, services, equipment or materials provided in
connection with the construction and development of the Hotel in accordance with
the Plans and Specifications have been paid in full and Company and LLC has
received an unconditional lien release for the invoiced amount from any and all
contractors, subcontractors, suppliers or materialmen who provided such labor,
services, equipment or materials, which releases the Company or LLC, as
applicable, shall diligently pursue.
"Computed Amount" means the combined earnings before interest, taxes,
depreciation and amortization of the Riverboat, Hotel and related facilities,
and before the cost of the Management Agreement (or any successor thereto) but
after the cost of all other consulting and management agreements, as reflected
in the financial statements of LLC prepared in accordance with GAAP,
consistently applied from period to period in accordance with BGC's normal
practice including allocation of overhead and payment for services of
Affiliates. There shall not be deducted in the computation of earnings any
amount actually offset from the Contingent Purchase Price Payment or any expense
for which Xxxx Indiana are reimbursed (i) under Section 12.4 from the Company
Escrowed Funds or by the Company directly or (ii) from insurance proceeds.
"Computed Amount Statement" shall have the meaning ascribed to such term
in Section 1.7(d).
"Confidential Information" shall have the meaning ascribed to such term
in Section 5.12.
"Construction Contracts" means collectively that certain (i) Standard
Form of Agreement dated February 8, 1999 by and between the Company and Xxxxx
Construction Company of Illinois, as amended, (ii) Owner Representative Letter
Agreement dated October 14, 1998 between the Company and Xxxxx XxXxxx
Construction Company and (iii) Standard Form of Agreement between the Company
and Aria Group Architects Inc. dated May 22, 1998.
"Construction Costs" shall have the meaning ascribed to such term in
Section 10.3(a).
"Consumable Items" means all food stuffs and alcoholic or nonalcoholic
beverages which are located on the Riverboat premises as of the Closing Date,
which shall be inventoried in accordance with previous practices at the
Riverboat.
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"Contingent Purchase Price Payment" shall have the meaning ascribed to
such term in Section 1.7(a).
"Contract" or "Contracts" means any agreement or understanding, whether
written or oral, including, without limitation, any commitment, letter of
intent, mortgage, indenture, note, guarantee, lease, license, contract, deed of
trust, option agreement, right of first refusal, security agreement, development
agreement, operating agreement, management agreement, service agreement,
partnership agreement, purchase, sale or other agreement, together with any
amendments thereto.
"Contractor" means Xxxxx Construction Company of Illinois.
"Contractor Estoppel Certificate" shall have the meaning ascribed to
such term in Section 2.2(r).
"Deed" shall have the meaning ascribed to such term in Section 2.1(a).
"Deferred Company Closing Payment" means the Company Closing Payment
minus the Initial Company Closing Payment.
"Delivery" shall mean for purposes of Section 2.2, the actual delivery
to Xxxx Indiana or their authorized agents, as applicable, of those items
required to be delivered pursuant to Section 2.2 immediately prior to the
Closing; provided, however, that to the extent that the items set forth in
Sections 2.2(g), 2.2(i), 2.2(k), 2.2(m), 2.2(n), 2.2(o) and 2.2(p) are located
at the Real Property, such items shall remain at the Real Property unless
physically delivered to Boyd Indiana at the Closing and shall be deemed to be
delivered to Xxxx Indiana upon Xxxx Indiana's receipt of a certificate duly
executed by the Company certifying that all of such items are located at the
Real Property and providing detailed information as to where such items are
situated.
"Development Agreement" means the Riverboat Gaming Development
Agreement, dated as of June 10, 1997, by and between the City (acting through
the City's Board of Public Works and Safety), the Michigan City Port Authority
and the Company.
"Disregarded Entity" shall have the meaning ascribed to such term in
Section 3.9(l).
"DOJ" shall mean the United States Department of Justice.
"Engage" and "Engagement" shall have the meanings ascribed to such terms
in Section 10.2(a).
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup and removal costs, governmental enforcement and
response costs, natural resources damaged, property damages, economic loss,
personal injuries, or penalties) arising out of, based on or resulting from (a)
the presence, discharge or release or threatened discharge or release into the
environment, of any Materials of Environmental Concern at any location, whether
or not owned or operated by the Company or
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LLC or (b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
"Environmental Laws" means all Federal, state, local and foreign Laws
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater,
wetlands, land surface or subsurface strata), navigable waters, waters of
contiguous and exclusive economic zones, ocean waters and international waters,
including, without limitation, laws and regulations relating to emissions,
discharges, releases or threatened discharge or releases of Materials of
Environmental Concern or the dredging, handling and disposal of river sediments,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern.
"Environmental Permits" shall have the meaning ascribed to such term in
Section 3.20(a).
"Equipment Leases" means all interest as lessee under all oral or
written leases and rental agreements required to be accounted for as operating
leases under GAAP relating to the equipment, vehicles and furniture used in
connection with the operation, management and use of the Business as listed on
Schedule 2.1(e).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" shall have the meaning ascribed to such term in
Section 3.19(a).
"Escrow Adjustment Amount" means the difference, if any, between (a) the
amount that is one hundred twenty-five percent (125%) of the Estimated
Completion Cost Amount less (b) Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000.00).
"Escrow Agent" shall have the meaning ascribed to such term in Section
12.3.
"Estimated Completion Cost Amount" means the amount as of the Closing
Date of the estimated cost to complete the Hotel in accordance with the Plans
and Specifications free and clear of all Liens (except for the Permitted Liens),
which amount shall be determined by Xxxx Indiana immediately prior to the
Closing in the same manner as a reasonably prudent construction contractor.
"Evidence of Payment" shall have the meaning ascribed to such term in
Section 10.3(h).
"Excluded Assets" means those (a) assets of the Company set forth on
Schedule 14.2, which Schedule shall be prepared by the Company and agreed to by
Xxxx Indiana and attached hereto on the date of this Agreement; (b) all
Contracts of the Company that are not Assumed Contracts; (c) all Books and
Records relating exclusively to the Excluded Assets or the Excluded Liabilities;
and (d) the originals of the Articles of Incorporation, Bylaws, corporate
resolutions, minute books and stock transfer ledgers of the Company.
"Excluded Environmental Matters" shall have the meaning ascribed to such
term in subparagraph (c) of the definition of Excluded Liabilities.
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"Excluded Liabilities" means any liability of the Company which is not
an Assumed Liability and is not specifically covered by any of the exclusions
set forth in subparagraphs (a) through (o) below. Excluded Liabilities include,
without limitation, the following:
(a) Tort and Product Liabilities. Any liability (other than a
liability arising in the ordinary course of the Business to the extent reflected
as a current liability on the LLC Closing Date Working Capital Statement) with
respect to the Business arising from accidents, occurrences, misconduct,
negligence, breach of fiduciary duty, or statements made or omitted to be made
prior to the Closing Date, whether or not covered by workers' compensation or
other forms of insurance in effect either at the time of the accident,
occurrence, or relevant conduct or at the time at which the claim with respect
thereto is made, or claims for injuries, property damage, or other losses
arising with respect to the operation of the Business prior to the Closing Date.
(b) Employee and Agent Liabilities. Any liability with respect to
the Business arising from tort, contract, or otherwise to employees or agents of
the Company, or persons asserting claims on their behalf, or in respect of their
condition, injury, or death, in any case arising from or related to a condition
in existence or any act or omission occurring prior to the Closing Date, whether
or not covered by workers' compensation or other forms of insurance in effect
either at the time of the accident, act, omission, or relevant conduct or at the
time at which the claim with respect thereto is made, including any liability
relating to (i) any claim relating to an employee, employment compensation,
benefits, and similar matters; (ii) the termination of employment of any
employee of the Company prior to the Closing Date; (iii) any claim for any
injury suffered, illness contracted, condition developed, or exposure received,
by any employee or agent of the Company (including liability incurred after the
Closing Date for the pre-Closing portion of any such pre-existing injury,
illness, condition, or exposure); or (iv) any claim based on alleged
discrimination, harassment, or violation of any Law.
(c) Environmental Liabilities. Any liability for Environmental
Claims and all Losses of any kind or nature whatsoever in connection with or
arising from (i) the presence of any Materials of Environmental Concern on, in,
under, emitted from, or affecting all or any portion of the Assets prior to the
Closing Date (or any condition resulting therefrom) or (ii) the transportation
or presence at any other location of Materials of Environmental Concern relating
to the Business prior to the Closing Date (or any condition resulting
therefrom), including any such Losses incurred as a result of any natural
resource damages, or any violation of Environmental Laws or any investigation,
site monitoring, containment, clean-up, removal, restoration, or other remedial
work, excluding in the cases of (i) and (ii) any matter described therein
relating to the ownership or operation of the Real Property prior to the
Company's ownership thereof and as to which matter either the Company has no
knowledge as of the Closing Date or such matter is a Known Environmental
Condition ("Excluded Environmental Matters").
(d) Certain Liabilities Related to Contracts. Any liability (other
than a liability arising in the ordinary course of the Business to the extent
reflected as a current liability on the LLC Closing Date Working Capital
Statement) of the Company arising out of a breach occurring prior to the Closing
of any provision of a Contract, and any misrepresentation or omission to make
any statement prior to the Closing Date related to any Contract.
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(e) Litigation Liabilities. Any liability (other than a liability
arising in the ordinary course of the Business to the extent reflected as a
current liability on the LLC Closing Date Working Capital Statement) for any
claim, or arising in any legal proceeding, relating to the Business, to the
extent relating to any act, omission, event, occurrence, or condition before the
Closing Date, whether or not asserted, pending, or threatened before the Closing
Date, including but not limited to Xxxxxxxx Xxxxx, et al. v. City of Michigan
City, et al. filed on June 2, 1997 in Indiana Superior Court, Michigan City,
County of Xxxxxxx, Case No. 46D02-9812-CP172A.
(f) Liabilities for Violation of Law. Any liability of the Company
for any failure to comply with, or any violation of any law relating to the
Business, which failure or violation occurred or was alleged to have occurred
prior to the Closing Date.
(g) Liabilities for Infringement. Any liability of the Company to
the extent relating to periods before the Closing Date for any infringement of
the rights of any other Person relating to the use of the Intellectual Property,
or any rights of any other Person relating to the Intellectual Property pursuant
to any license, sublicense, or agreement.
(h) Liabilities Related to Excluded Assets. Any liability of the
Company under a Contract which is an Excluded Asset.
(i) Liabilities to Affiliates. Any liability (other than a liability
arising in the ordinary course of the Business to the extent reflected as a
current liability on the LLC Closing Date Working Capital Statement) of the
Company to any shareholder or Affiliate of the Company, other than liabilities
arising after the Closing Date under Assumed Contracts.
(j) Insured Liabilities. Any liability to the extent the Company is
covered by insurance.
(k) Tax Liabilities. Any liability of the Company for Taxes,
including without limitation (i) any liability for Taxes on the Transfer, (ii)
any liability for Taxes on the transfer of the LLC Units; (iii) any liabilities
for Taxes attributable to the assets or operations of the Company for any period
prior to the Closing Date; and (iv) any liability for the Taxes of any other
Person, whether as a transferee or successor, by contract, or otherwise, in each
case other than Excluded Taxes.
(l) Indebtedness. All liabilities of the Company for borrowed money,
including indebtedness under its Senior Subordinated Discount Notes due 2002.
(m) Employee Benefit Plan. Any liability related to any Plan of the
Company or any other employee benefit plan currently or previously maintained or
contributed to by any ERISA Affiliate other than (i) liabilities to the extent
reflected as a current liability on the LLC Closing Date Working Capital
Statement and (ii) liabilities arising on or after the Closing Date in
connection with any Plan constituting an Assumed Contract.
(n) Liabilities from Prior Operation of the Business. To the extent
not specifically included in any of the foregoing provisions of this definition,
all liabilities incurred in connection with the operation of the Business up to
the Closing Date, including, without limitation any and all loan documents
executed by the Company or LLC as obligor, unless any such liability or
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obligation (i) has been specifically identified as an Assumed Liability
hereunder or (ii) arose in the ordinary course of the Business prior to the
Closing Date and is reflected as a current liability in the LLC Closing Date
Working Capital Statement (but only to the extent so reflected).
(o) Commissions. Any liability for claims for brokerage commissions
or finder's fees incurred by reason of any action taken by any of the Company,
LLC, any Related Entity or any shareholder or member thereof.
"Excluded Taxes" means with respect to the Company and LLC those Taxes
that would have been reserved for on a Closing Date LLC Balance Sheet if a
Closing Date LLC Balance Sheet had been prepared on a basis consistent with the
Company Balance Sheet (provided, however, such Excluded Taxes shall not include
Taxes resulting to the Company or its shareholders from the sale of the LLC
Units hereunder or from the Transfer).
"Evidence of Payment" shall have the meaning ascribed to such term in
Section 10.3(a) above.
"FF&E" means all furniture, fixtures and equipment owned or leased by
the Company or LLC or otherwise used in connection with the Business, including,
without limitation, floor coverings, pictures, all furniture located within the
Riverboat and the Real Property, including, without limitation, all Operating
Equipment and all other equipment used in the operation of the casino, kitchens,
dining rooms, bars, cleaning equipment, office equipment, machinery, vehicles,
computers and other data processing hardware, special lighting and other
equipment of a like nature, with such additions and deletions as may occur in
the ordinary course of business; provided that "FF&E" shall not include any
Excluded Asset or any item owned by a vendor, lessor or service provider.
"FIRPTA Affidavit" shall have the meaning ascribed to such term in
Section 2.2(h).
"Final Construction Costs Statement" shall have the meaning ascribed to
such term in Section 10.3(i)(iii).
"Final Completion Costs Statement" shall have the meaning ascribed to
such term in Section 10.3(j)(iii).
"Xxxxx Guaranty" shall have the meaning ascribed to such term in Section
10.4.
"Foreign Corrupt Practices Act" means the Foreign Corrupt Practices Act
of 1977, as amended.
"FTC" shall mean the United States Federal Trade Commission.
"GAAP" means generally accepted accounting principles.
"Gaming Business" shall have the meaning ascribed to such term in
Section 10.2(a).
"Gaming Laws" means the Indiana Riverboat Gambling Act (IC 4-33-1-1, et
seq.) and the rules and regulations promulgated thereunder.
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"Gaming License" means the license currently held by the Company to own
and operate a riverboat gambling facility and related amenities issued under the
Gaming Laws.
"Governmental Approvals" shall mean any:
(a) permit, license, certificate, franchise, concession, approval,
consent, ratification, permission, clearance, confirmation, endorsement, waiver,
certification, filing, franchise, notice, variance, right, designation, rating,
registration, qualification or authorization that is or has been issued,
granted, given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Law; or
(b) right under any Contract with any Governmental Body that relates
to or is used in the Business, including, without limitation, the Development
Agreement.
"Governmental Body" shall mean any:
(a) nation, principality, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department, agency, bureau,
branch, office, commission, council, board, instrumentality, officer, official,
representative, organization, taxing authority, unit, body or Person and any
court or other tribunal);
(d) multinational organization or body; or
(e) individual, Person, or body exercising, or entitled to exercise,
any executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature.
"Hotel" means the Blue Chip Casino Hotel, a hotel currently under
construction, which will include 188 guest rooms, together with meeting rooms,
restaurants and other facilities as currently configured in its Plans and
Specifications as of the date of this Agreement as modified pursuant to Section
10.3(b).
"Hotel Construction Budget" shall have the meaning ascribed to such term
in Section 10.3(g).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"including" means including, without limitation.
"Income Tax" or "Income Taxes" means any federal, state, local or
foreign income, franchise or similar Tax.
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"Incremental Construction Costs" shall have the meaning set forth in
Section 10.3(b).
"Indebtedness" shall mean indebtedness of LLC as of the Closing Date for
borrowed money.
"Indemnifiable Losses" means any and all claims, demands, actions or
causes of action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, Taxes, interest, penalties and reasonable
attorneys' fees and expenses.
"Indemnitee" means any Person or group entitled to indemnification under
this Agreement.
"Indemnifying Party" means any person or group required to provide
indemnification under this Agreement.
"Independent Party Claims" shall have the meaning ascribed to such term
in Section 12.8(a).
"Individual Covenantor" shall have the meaning ascribed to such term in
the Preamble.
"Initial Company Closing Payment" means 20% of the Company Closing
Payment.
"Initial Company Escrow Release Amount" shall have the meaning ascribed
to such term in Section 12.11(a).
"Informed Party" shall have the meaning ascribed to such term in Section
5.12.
"Informing Party" shall have the meaning ascribed to such term in
Section 5.12.
"Intangibles" means all of the Company's interest in all intangible
rights and property relating to the Business, the Riverboat or the Hotel
including, without limitation, all Intellectual Property, warranties,
guaranties, utility or street improvement bonds, telephone exchange numbers, and
Governmental Approvals, including without limitation, building permits and
certificates of occupancy, as applicable, service contracts, agreements, the
Liquor Licenses, the Gaming License and all other licenses and approvals for the
Riverboat or the Hotel.
"Intellectual Property" means all, registered and unregistered,
trademarks, service marks trade names, corporate names, company names,
fictitious business names, trade styles, trade dress, logos, and other source or
business identifiers, patents, copyrights, proprietary formulas, recipes,
technology, know-how and other trade secrets and all other intellectual property
used in or necessary to conduct the Business as currently conducted, and all
registrations and recordings thereof, all applications for registration pending
therefor, all extensions and renewals thereof, all goodwill associated
therewith, and all proprietary rights therein; provided that Intellectual
Property shall not be deemed to include (a) the generalized know-how of
employees and directors of the Company and LLC with respect to the gaming
business or methods of operation which are common to the industry or known
generally to the public or employees, or directors of companies, persons or
entities engaged in restaurant, hotel, gaming, casino, riverboat or gaming
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operations, and (b) non-patented devices or equipment purchased or leased from
third parties and used in the operation of the Business.
"Interest Rate" means the prime rate in effect from time to time as
reported in The Wall Street Journal.
"Investment" in any Person means any direct or indirect loan, advance or
other extension of credit, or capital contribution to, or purchase or
acquisition of capital stock or indebtedness or similar instrument of, or equity
investment in, such person.
"IRS" means the Internal Revenue Service.
"Xxxxx Act" means 46 U.S.C. Section 688, as amended.
"Known Environmental Conditions" shall have the meaning ascribed to such
term in Section 7.1(a).
"Laws" shall mean all laws (whether statutory or otherwise), rules,
regulations, orders, writs, injunctions, ordinances, judgments or decrees of all
governmental authorities (federal, state, local or otherwise) including, but not
limited to, all Gaming Laws, the Federal Occupational Safety and Health Act and
all Laws relating to the safe conduct of business and environmental protection
and conservation, the Civil Rights Act of 1964 and Executive Order 11246
concerning equal employment opportunity obligations of federal contractors, the
Americans with Disabilities Act of 1990 and any applicable health, sanitation,
fire, safety, labor, zoning and building laws and ordinances.
"Leased Property" means each parcel of real property and each interest
in real property leased in connection with the Business by the Company, or LLC,
as applicable, as more particularly described on Schedule 3.10(b).
"Leases" means all of those certain leases set forth on the list
attached hereto as Schedule 3.11(a) concerning the Leased Property.
"License Agreements" shall have the meaning ascribed to such term in
Section 3.14(a).
"Liens" means all mortgages, pledges, security interests, liens,
charges, options, conditional sales agreements, claims, restrictions, covenants,
easements, rights of way, title defects or other encumbrances or restrictions of
any nature whatsoever, except to the extent any of the foregoing constitute a
non-monetary lien that does not result in a Material Adverse Effect, or arose
from or through Xxxx Indiana or BGC.
"Liquor Assets" means the Liquor Licenses, together with the inventory
of alcoholic beverages in or for the Riverboat.
"Liquor Licenses" means all those certain "off sale," "portable bar" and
other alcoholic beverage licenses issued by Governmental Bodies pursuant to
which the sale of alcoholic beverages is permitted in the restaurants, bars,
function rooms and guest rooms located in the Riverboat and to be located in the
Hotel.
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"LLC" shall mean Blue Chip Casino, LLC, an Indiana limited liability
company.
"LLC Closing Date Working Capital Amount" shall have the meaning
ascribed to such term in Section 1.8(b).
"LLC Closing Date Working Capital Statement" shall have the meaning
ascribed to such term in Section 1.8(d).
"LLC Maximum Construction Cost Amount" means the difference, if any,
between (a) the sum of the Maximum Hotel Cost plus the Incremental Construction
Costs, and (b) the Company's Actual Construction Cost Amount.
"LLC Preliminary Working Capital Amount" shall have the meaning ascribed
to such term in Section 1.8(a).
"LLC Purchase Price" shall mean the sum of the Company Closing Payment,
the Company Escrowed Funds and the amount payable under the LLC Contingent
Purchase Price Payment, if applicable.
"LLC Units" shall mean membership Units in LLC.
"Losses" shall have the meaning ascribed to such term in Section
12.4(c).
"Management Agreement" means that certain Management Agreement dated as
of October 30, 1996, between the Company and Towerton Company, LLC, a Delaware
limited liability company formerly named Blue Chip Management Company, LLC,
concerning the management of the Riverboat.
"Material Adverse Effect" means a material adverse effect on or change
in, directly or indirectly, (a) the business, property, condition, financial
position, prospects (financial or other) or operations of the Company or LLC,
the Assets or the Business or (b) on the ability of either the Company or LLC to
perform their respective obligations under this Agreement or to consummate the
transactions contemplated by this Agreement; provided, however, that no change,
effect, occurrence, action, activity or impact relating to (i) the possibility,
legal status or existence of existing competitive, potentially competitive, or
additional casino gaming, riverboat gaming, hotel or other activities similar in
nature to any portion of the Business by or through Native American tribes or
others or (ii) changes in Law, including changes in Tax Laws or rates, shall be
deemed to constitute a Material Adverse Effect.
"Material Assumed Contract" shall have the meaning ascribed to it in
Section 3.23(f).
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products,
including, without limitation, oil as defined in the Oil Pollution Act of 1990,
33 U.S.C. Section 2701 et seq., and any material or substance that is designated
as a hazardous material, contaminant, pollutant or hazardous substance under the
Federal Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. Section 9601 et seq., the Federal Water Pollution Control Act, 33
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U.S.C. Section 1221 et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., or any other Environmental Law.
"Maximum Company Escrow Amount" as of the date of determination shall
mean an amount equal to the sum of the amount of all Company Indemnifiable
Losses claimed by Xxxx Indiana on Company Escrow Statements which have not yet
been resolved pursuant to Section 12.4 and Section 12.9 (to the extent not
resolved) plus the amount of all Company Reimbursable Losses with respect to
which indemnity payments have not yet been made to Xxxx Indiana (in each case
together with the applicable pro rata portion of the interest and the Company
Escrowed Funds, as applicable).
"Maximum Hotel Cost" shall have the meaning ascribed to such term in
Section 3.23(g).
"Measurement Period" shall have the meaning ascribed to such term in
Section 1.7(a).
"Millennial Dates" shall have the meaning ascribed to such term in
Section 3.30.
"Notice of Acquisition" shall have the meaning ascribed to such term in
Section 5.18.
"Noncompetition Covenant Payment" shall mean the sum of One Million and
No/100 Dollars ($1,000,000.00).
"Operating Equipment" means all items owned or leased by the Company or
LLC and used in the Business, including in the operation or maintenance of the
Riverboat and the Real Property, or otherwise used in connection with the
Business, including, without limitation, all specialized casino equipment, such
as slot machines, cards, poker chips, gaming devices, dice, baccarat chips,
gaming tables, pneumatic stools, drop buckets, cans and racks, tokens, token
racks, card shuffler devices and accessories, change sorters, pit stands,
counting equipment, roulette table covers, casino and game table signage, cage
and game tables supplies, and all other gaming equipment relating to the
Business, and including, without limitation, food service preparation utensils,
chinaware, glassware, silverware and hollowware, food and beverage service
equipment, uniforms and the supply of and also including consumable supplies for
housekeeping, engineering, accounting and office use, together with paper
supplies and miscellaneous general supply items.
"Owned Property" means all real property owned in fee by the Company or
LLC and each non-fee interest (other than a leasehold interest) owned by the
Company or LLC in any real property and more particularly described in Schedule
3.10(a) (excluding, however, Parcels LIII and LV through LX, inclusive, to the
extent that the Company or any of its Affiliates does not hold fee title to such
Parcels as of the date of this Agreement and excluding Parcel XXXXVIII, the
Channel Property and the Peninsula), and any and all improvements, rights and
appurtenances located thereon or relating thereto, such as the Hotel, but
excluding the Untitled Property.
"parties" shall have the meaning ascribed to such term in the Preamble
to this Agreement.
"Permitted Liens" means (i) liens for current Taxes not yet due; (ii)
purchase money security interests granted to any lessor under any Equipment
Leases or any leased items set forth
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on Schedule 3.13(c); and (iii) those exceptions to title set forth in the
xxxx-up to the body of that certain Title Commitment No. 99-1816 issued by Title
Company and dated May 3, 1999, a copy of which is attached as Exhibit 14.1, as
supplemented pursuant to Section 5.18.
"Permitted Modification" shall have the meaning ascribed to such term in
Section 8.1.
"Person" means any individual, corporation, limited liability
corporation, joint stock company, joint venture, partnership, unincorporated
association, Governmental Body, country, state or political subdivision thereof,
trust or other entity.
"Plans and Specifications" means all of those certain plans and
specifications concerning the construction of the Hotel and the construction and
installation of the FF&E within the Hotel, as approved by Xxxx Indiana and set
forth on Schedule 14.4, and those certain plans and specifications for the
furnishing of certain Tangible Personal Property that is necessary to the
service and operation of the Hotel as a fully stocked hotel, including but not
limited to, furnishings, fixtures, equipment and supplies for each guest room,
conference room, administrative office and all common areas of the Hotel, and
all items necessary to fully service and operate the Hotel, including, but not
limited to, those items set forth on Schedule 14.4.
"Plan" shall have the meaning ascribed to such term in Section 3.19(a).
"Post-Closing Periods" shall mean any taxable period beginning after the
Closing Date.
"Post-Closing Taxes" shall mean Taxes imposed during Post-Closing
Periods.
"Potential Land Inspection Period" shall have the meaning ascribed to
such term in Section 5.18.
"Potential Land" shall have the meaning ascribed to such term in Section
5.18.
"Potential Land Price" means Two Hundred Forty Thousand and No/100
Dollars ($240,000.00).
"Potential Land Transfer Agreement" shall have the meaning ascribed to
such term in Section 5.18.
"Potential Land Title Commitment" shall mean the title commitment issued
by Title Company and approved by Xxxx Indiana that covers the Potential Land.
"Pre-Closing Periods" shall mean any taxable period ending on or before
the Closing Date.
"Pre-Closing Taxes" shall mean Taxes imposed during Pre-Closing Periods.
"Preliminary Construction Costs Statement" shall have the meaning
ascribed to such term in Section 10.3(h).
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"Purchase Price" shall mean the sum of the Company Closing Payment and
the Company Escrowed Funds, subject to adjustment in accordance with Section
1.8.
"Real Property" means the Owned Property, the Untitled Property and the
Leased Property.
"Related Entity" means (i) any subsidiary of the Company or (ii)
Towerton Company, LLC, a Delaware limited liability company.
"Riverboat" means that certain vessel named "Blue Chip Casino," home
port of Michigan City, Indiana and number D1056331, with all its components,
duly documented in the name of the Company under the laws of the United States,
together with all its engines, boilers, machinery, masts, boats, anchors,
cables, chains, rigging, tackle, apparel, furniture, capstans, outfit, tools,
pumps, gears, furnishings, appliances, fittings, spare and replacement parts and
all other appurtenances thereto appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not on board, and also any and all
additions, improvements and replacements hereinafter made in or to such vessel
or any part thereof, including all items and appurtenances as aforesaid.
"Straddle Periods" shall mean any taxable period beginning before the
Closing Date and ending after the Closing Date.
"Straddle Taxes" shall mean Taxes (other than Income Taxes) with respect
to a Straddle Period.
"Subsidiary" or "Subsidiaries" means as to any Person, a corporation,
limited liability corporation, partnership or other entity of which shares of
stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other managers of such corporation,
limited liability corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, or of which a majority
in equity ownership interest is held, by such Person.
"Systems" shall have the meaning ascribed to such term in Section 3.30.
"Tangible Personal Property" means all items of tangible personal
property owned or leased by the Company or LLC which relate to the Business,
including: (a) FF&E including, without limitation, Operating Equipment; (b)
Consumable Items; (c) Liquor Assets (other than Liquor Licenses); (d) inventory
and supplies; (e) accounting, inventory control and other business related
software used by the Company in connection with its operation of the Business
and existing on the Transfer Date; and (f) all such other items of tangible
personal property which are located at, and used in the operation of, the
Business.
"Tax Claim" shall have the meaning ascribed to such term in Section
12.6(c).
"Taxes" means all taxes, charges, fees, levies or other assessments,
including, without limitation, income, gross receipts, excise, gaming, property,
sales, withholding, social security, occupation, use, service, service use,
license, payroll, franchise, transfer and recording taxes, fees
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and charges, including estimated taxes, imposed by the United States or any
taxing authority (domestic or foreign), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall include
any interest, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to any such taxes, charges, fees, levies or other
assessments.
"Tax Return" or "Tax Returns" means any return, report or other document
or information required to be supplied to a taxing authority in connection with
Taxes.
"Title Company" means Lawyers Title Insurance Company.
"Transition Marketing Program" shall have the meaning ascribed to such
term in Section 5.1(q).
"Title Policy" shall have the meaning ascribed to such term in Section
2.1(a).
"Transfer Date" shall mean the date on which the Company consummates the
Transfer. References to time periods "after the Transfer Date" or word to
similar effect shall, unless otherwise provided, mean the time period, if any,
after the Transfer Date but prior to the Closing Date.
"Transfer" shall have the meaning ascribed to such term in Section 2.1.
"Travelers" shall mean Traveler's Casualty and Insurance Company of
America.
"Units" shall mean membership units in a limited liability company.
"Untitled Property" shall mean all of that certain real property as more
particularly described on Schedule 14.3.
"Xxxxx Construction Contract" means the Standard Form of Agreement dated
February 8, 1999 by and between the Company and Xxxxx Construction Company of
Illinois, as amended.
"WARN Act" shall have the meaning ascribed to such term in Section 3.18.
"Welfare Plan" shall have the meaning ascribed to such term in Section
3.19(g).
"Working Capital" shall have the meaning ascribed to such term in
Section 1.8(a) hereof and Schedule 1.8(a).
"Year 2000 Compliant" shall have the meaning ascribed to such term in
Section 3.30.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by a duly authorized officer of the Company, LLC,
Xxxx Indiana, BGC and each of the Individual Covenantors as of the day and year
first above written.
BLUE CHIP CASINO, INC. INDIVIDUAL COVENANTORS
By: /s/ XXXXX X. XXXXX /s/ XXXXX X. XXXXX
-------------------------------- ----------------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
BLUE CHIP CASINO, LLC ----------------------------------------
Name: Xxxxx X. Xxxxx
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx ----------------------------------------
Title: Chief Executive Officer Name: Xxxxxx Xxxxx
XXXX GAMING CORPORATION
----------------------------------------
By: /s/ XXXXXXX X. XXXX Name: Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chairman and
Chief Executive Officer
XXXX INDIANA, INC.
By: /s/ XXXXXXX X. XXXX
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by a duly authorized officer of the Company, LLC,
Xxxx Indiana, BGC and each of the Individual Covenantors as of the day and year
first above written.
BLUE CHIP CASINO, INC. INDIVIDUAL COVENANTORS
By:
-------------------------------- ----------------------------------------
Name: Name: Xxxxx X. Xxxxx
-------------------------------
Title: /s/ XXXXX X. XXXXX
----------------------------- ----------------------------------------
Name: Xxxxx X. Xxxxx
BLUE CHIP CASINO, LLC
/s/ XXXXXX XXXXX
By: ----------------------------------------
-------------------------------- Name: Xxxxxx Xxxxx
Name:
-------------------------------
Title: ----------------------------------------
----------------------------- Name: Xxxxxx X. Xxxxx
XXXX GAMING CORPORATION
By:
--------------------------------
Name:
-------------------------------
Title:
-----------------------------
XXXX INDIANA, INC.
By:
--------------------------------
Name:
-------------------------------
Title:
-----------------------------
89
98
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by a duly authorized officer of the Company, LLC,
Xxxx Indiana, BGC and each of the Individual Covenantors as of the day and year
first above written.
BLUE CHIP CASINO, INC. INDIVIDUAL COVENANTORS
By:
-------------------------------- ----------------------------------------
Name: Name: Xxxxx X. Xxxxx
-------------------------------
Title:
----------------------------- ----------------------------------------
Name: Xxxxx X. Xxxxx
BLUE CHIP CASINO, LLC
By: ----------------------------------------
-------------------------------- Name: Xxxxxx Xxxxx
Name:
------------------------------- /s/ XXXXXX X. XXXXX
Title: ----------------------------------------
----------------------------- Name: Xxxxxx X. Xxxxx
XXXX GAMING CORPORATION
By:
--------------------------------
Name:
-------------------------------
Title:
-----------------------------
XXXX INDIANA, INC.
By:
--------------------------------
Name:
-------------------------------
Title:
-----------------------------
89