Exhibit 10.29
ASSET PURCHASE AGREEMENT
BY AND AMONG
MARKET STREET TRUCK PLAZA ACQUISITION CORP,
L.L.C.,
RICK
PERNICI
AND
GAMECO HOLDINGS, INC.
DATED: October 4,
2006
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STATE OF LOUISIANA
PARISH OF CADDO
ASSET PURCHASE
AGREEMENT
BE
IT KNOWN, that before the undersigned Notaries Public, and in the
presence of the undersigned competent witnesses, personally came
and appeared:
MARKET STREET TRUCK PLAZA
ACQUISITION CORP, LLC, a Delaware limited liability
company (“Market Street”), domiciled and having its
principal place of business in the Parish of Caddo and whose
mailing address is declared to be 1324 N. Market, Shreveport,
Louisiana 71101, herein represented by its duly authorized agent
Rick Pernici;
RICK PERNICI , a
Louisiana resident, whose mailing address is declared to be 6910
Gilbert, Shreveport, Louisiana 71106 (“Operating
Member”);
(Market Street and the Operating Member
shall collectively be referred to herein as “Sellers”
and each individually as a “Seller”);
and
GAMECO HOLDINGS,
INC , a Delaware corporation (the
“Purchaser”), domiciled and having a place of business
in the Parish of Lafayette, State of Louisiana and whose mailing
address is declared to be 718 S. Buchanan Street, Suite C,
Lafayette, Louisiana 70507, herein represented by its duly
authorized agent Jeffrey P. Jacobs,
each of whom did execute this Asset Purchase
Agreement (“Agreement”), to be effective as of this 4th
day of October, 2006 (the “Agreement Date”).
INTRODUCTION
A.
Sellers own the assets of a truck stop located at 1324 N. Market,
Shreveport, Louisiana 71101 (the “Truck
Stop”).
B.
The Truck Stop, inter alia , is currently under construction
and when completed will provide retail motor and diesel fuels,
convenience store and restaurant operations for sale to or use by
the general public as well as the necessary location and other
necessary physical requirements for the operation of video draw
poker devices for play by the general public.
C.
Buyer, for itself and its designees, desires to purchase and
Sellers desire to sell the Truck Stop.
NOW, THEREFORE, in consideration of the
promises, obligations, representations and warranties contained
herein, the receipt and sufficiency of which are hereby
acknowledged, and upon the terms and subject to the conditions
hereinafter set forth, the parties agree as follows:
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Section 1.
Definitions and Related Matters .
1.1
Definitions . For the purposes of this Agreement, the
following terms have the meanings set forth below (such meanings to
be applicable to both the singular and plural forms of the terms
defined):
“ Acquired Assets ” shall
mean all assets, accounts receivable, privileges, rights, real and
personal property, Intellectual Property Rights, licenses,
interests and claims (whether personal, tangible or intangible) of
every type and description owned by Sellers (subject only to the
leases identified on Schedule 6.9(a) and the Permitted
Encumbrances) and used in the operation of the Business, other than
the Excluded Assets. Acquired Assets, include, but are not
limited to, each of the following:
(a)
leasehold title arising pursuant to the Property Lease (subject to
Permitted Encumbrances hereinafter defined) in and to certain
improved real property located at 1324 N. Market, Shreveport,
Louisiana 71101 (the “Real Property”), consisting of
approximately 5.1 acres, more or less, and all improvements,
buildings, structures, issues, profits and rents, fixtures and all
rights pursuant to any leases, recorded or unrecorded, respecting
all or any part of the Real Property; together with, to the extent
legally transferable, all approvals, authorizations, consents,
licenses, permits, privileges, rights, variances and waivers
relating to the Real Property from any Governmental Body having
jurisdiction over the Real Property, if any, including, but not by
way of limitation, those with respect to building, effluent
control, environmental protection, fire, foundation, pollution
control, use, utilities and zoning heretofore held by or granted to
Sellers; together with any and all easements, rights and privileges
appurtenant thereto, including all right, title and interest of the
Sellers in and to any land lying in the bed of any street, road or
avenue currently adjoining, lying across or adjacent to or to be
opened or proposed in front of or adjoining the Real Property, and
all riparian rights; all of the foregoing being collectively
referred to as the Premises (the “Premises”) and being
further described in Exhibit A ;
(b)
the Sublessor’s interest in and under the Restaurant
Sublease;
(c)
those items of machinery, equipment, chattels and fixtures used in
or supporting the Business, as identified on Schedule 1.1(b)
;
(d)
all inventories of any kind related to or purchased for the
operation of the Business, including, but not limited to, those
items identified on Schedule 1.1(c) ;
(e)
all Intellectual Property Rights, subject to the qualifications in
Section 6.10 , used in or for the benefit of the
Business, excluding only those owned by the sublessee under the
Restaurant Sublease;
(f)
accurate, certified copies of all books and records relating to the
Business in the possession or under the control of the Sellers,
including, without limitation: (i) lists of all known
potential or past customers and suppliers; (ii) records with
respect to all equipment, including warranties and service
agreements, inventory and machinery; (iii) any and all
business plans and/or models; (iv) all financial records and
reports; (v) all employee records; and (vi) all other
books and records used by Sellers in the operation of the
Business;
(g)
all approvals, authorizations, consents, licenses, permits,
registrations, certificates, privileges, rights, variances and
waivers relating to or necessary for the operation of the Business
from any Governmental Body having jurisdiction over the Business,
to the extent the same are transferable;
(h)
all fixtures and improvements located on the Premises, other than
those owned by the sublessee under the Restaurant Sublease and
subject to the rights of the Landlord under the Property
Lease;
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(i)
all goodwill of the Business, subject to the rights of the
sublessee under the Restaurant Sublease; and
(j)
those Contracts identified on Schedule 6.9(b) , under terms
and conditions contained in Schedule 6.9(b) .
“ Affiliate ” of any
particular Person means any other Person directly or indirectly
controlling, controlled by or under common control with such
particular Person. The term “ control ”
means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the
ownership of securities, by contract or otherwise.
“ Annualized EBITDA ” shall
mean the sum of all of the monthly EBITDA (as defined below)
arising from or related to the operation of the Business and earned
by the Purchaser (not including the EBITDA earned by any third
party under a lease), calculated for the last full twelve (12)
calendar months of that period from the first full calendar month
following the date upon which Devices are legally operating at the
Premises through the end of the eighteenth (18) full calendar month
following the Closing Date (i.e. months 7 through 18, inclusive),
after making appropriate adjustments for any non-recurring
transactions and incorporating the expenses limitations set forth
in the Proforma Income Statement as defined below.
“ Assumed Contracts ” shall
mean the contracts specifically identified in Schedule
6.9(b) .
“ Business ” shall mean all
of the operations and business of the Truck Stop located at 1324 N.
Market, Shreveport, Louisiana 71101, including, but not limited to,
its gaming operations (if any), convenience store, restaurant
facility and its motor and diesel fuel sales.
“ Business Day ” means any
day other than a Saturday, Sunday or public holiday under the laws
of the State of Louisiana or any other day on which banking
institutions are obligated to close in Shreveport,
Louisiana.
“ Capital Expenditures ”
means all expenditures for any capital or fixed assets or
improvements, or for replacements, substitutions or additions
thereto, which have a useful life of more than one (1) year
(including expenditures with respect to Capitalized Lease
Obligations but excluding expenditures which are fully expensed in
the period incurred in accordance with GAAP consistently
applied).
“ Capitalized Lease ” means
a lease under which the obligations of the lessee should, in
accordance with GAAP consistently applied, be included in
determining total liabilities as shown on the liability side of a
balance sheet of the lessee.
“ Capitalized Lease Obligations
” means the amount of the liability reflecting the aggregate
discounted amount of future payments under all Capitalized Leases
calculated in accordance with GAAP consistently applied and
Statement of Financial Accounting Standards No. 13.
“ Closing ” has the
meaning set forth in Section 2.2.
“ Closing Certificate ” has
the meaning set forth in Section 7.1(c).
“ Closing Date ” has the
meaning set forth in Section 2.2.
“ Closing Reports ” shall
mean: (i) that certain contract, dated May 8,
2006, by and between Market Street and John Philip Sipes for the
construction of the Truck Stop, together with all amendments,
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modifications
or changes thereto; (ii) any change orders related to the
foregoing; (iii) all payment applications, evidence of
payments and any other records, instruments or agreements related
to the construction of the Truck Stop; and (iv) the financial
reports of the Business, excluding any portion that shall be leased
to a third-party unless any Seller has such information in their
possession or control, setting forth the income, expenses, assets,
liabilities and cashflow of the Business monthly, from its opening
to the general public during the calendar year of 2006 through the
Closing Date.
“ Code ” means the Internal
Revenue Code of 1986, as amended, and any reference to any
particular Code section shall be interpreted to include any
revision of or successor to that section regardless of how numbered
or classified.
“ Completed ” shall mean, as
related to the Truck Stop, that each of the following have been
completed: (i) the construction of the Truck Stop has
been completed pursuant to the Plans and Specifications, to the
Purchaser’s reasonable satisfaction, and in compliance with
any and all building, construction or zoning laws, rules or
regulations of any Governmental Body, including, but not limited
to, the Liquor and Gaming Laws of the State of Louisiana;
(ii) an occupancy certificate or its equivalent has been
issued by the applicable Governmental Body(ies) for the
unconditional occupation of the Truck Stop; (iii) lien
waivers and reasonable proof of payment has been received from the
general contractor for the construction of the Truck Stop and from
any and all other contractors, sub-contractors, suppliers,
material-men or laborers providing labor, materials or services for
the same; and (iv) the Truck Stop, as of the Closing Date, has
all necessary improvements as required for the placement and
operation of fifty (50) Devices.
“ Contract ” has the meaning
set forth in Section 6.9(a).
“ Deposit ” shall mean the
sum of One Hundred Fifty Thousand and no/100 Dollars
($150,000.00).
“ Devices ” shall mean
“Video Draw Poker Devices” as defined in the Video Draw
Poker Devices Control Law, Louisiana Revised Statutes, Title 27:301
et seq ., as amended from time to time.
“ Earn-Out Payment ” shall
be the sum that equals 5.0 times Annualized EBITDA less the
Minimum Purchase Price; provided, however, in no event shall
the total Earn-Out Payment hereunder exceed One Million Five
Hundred Thousand and no/100 Dollars ($1,500,000.00).
“
EBITDA ” shall mean for any one (1) calendar
month period the sum of: (i) net income, plus
(ii) interest expenses, plus (iii) the aggregate amount
of federal, state and local taxes on or measured by income (whether
or not payable during that period), and plus (iv) depreciation
and amortization, all as shall be computed by the Purchaser’s
accountants which computation shall be made strictly in accordance
with GAAP, consistently applied, and verified by an accountant
chosen by the Sellers. Notwithstanding the past practices of
the Sellers, when calculating EBITDA hereunder, the parties agree
to use the accrual method of accounting, including, but not limited
to, accruing for all licenses, permits, any gaming licenses and
occupational fees, insurance costs, vacation benefits, payments due
under the Property Lease and real property taxes if paid by the
lessee under the Property Lease; provided further, however,
that all monthly expenses used to calculate EBITDA will be based
upon the Proforma Income Statement. Those line items
identified with an “*” on the Proforma Income Statement
shall be included in the calculations of EBITDA in whatever amounts
equal the actual expense for each such line item during any given
calendar month. With regard to all other expense items
as identified on the Proforma Income Statement, if the actual
amount of any such expense shall exceed the amount for that line
item identified on the Proforma Income Statement, any increase must
first be approved by both the Purchaser and the Sellers, and if not
approved by the Sellers in their sole and absolute discretion, such
expense amount when calculating EBITDA hereunder shall not exceed
the amount on an annual basis as set forth in the Proforma
Income
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Statement, regardless
of the actual amount of such expenses; provided, however,
Purchaser shall have no obligation to spend any amounts within each
such expense category beyond the amount listed on the Proforma
Income Statement regardless of the impact upon EBITDA.
“ Environmental and Safety
Requirements ” means all federal, state, parish and local
statutes, regulations, rules, ordinances and similar provisions
having the force or effect of law, all licenses, permits,
authorizations, approvals, covenants or criteria having the force
or effect of law, all guidelines having the force or effect of law,
all judicial and administrative orders and determinations, all
contractual obligations and all common law and equitable doctrines
(including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict
liability), in each case concerning public health and safety,
worker health and safety and pollution or protection of the
environment (including, without limitation, all those relating to
the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any hazardous or otherwise regulated
materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise
or radiation), each as amended and as now or hereafter in effect,
including, by way of illustration and not limitation, the
Occupational Safety and Health Act of 1970, 29 U.S.C. §§
651, et seq. , the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§9601,
et seq. , the Resource Conservation and Recovery Act of
1976, 42 U.S.C. §§ 6901, et seq. , the Clean Air
Act, 42 U.S.C. §§ 7401, et seq. , the Solid Waste
Disposal Act, 42 U.S.C. §§ 6901, et seq. , the
Clean Water Act, 33 U.S.C. §§1251, et seq. , and
the Toxic Substances Control Act, 15 U.S.C. §§ 2601,
et seq. , and any similar or corresponding state, local,
municipal and/or parish ordinance, rule, regulation, law or act,
(or any successor legislation thereto).
“ ERISA ” shall mean the
Employee Retirement Income Security Act of 1974 (or any successor
legislation thereto), as amended from time to time and any
regulations promulgated thereunder.
“ Escrow Agent ” shall mean
United Title of Louisiana having an address at 6452 Youree Drive,
Shreveport, Louisiana 71105..
“ Escrow Hold Back ” shall
equal Fifty Thousand and no/100 Dollars ($50,000.00).
“ Excluded Assets ” shall
mean the following:
(a)
All restaurant equipment, inventory, furniture, fixtures and other
items of personal property owned by the sublessee under the
Restaurant Sublease;
(b)
The original copies of all books and records of the Sellers and
related to the Truck Stop;
(c)
Rights of the Sellers pursuant to or under this Agreement;
(d)
Any federal, state or local tax refunds or tax credits of the
Sellers;
(e)
Any leases, not necessary to or used in the operation of the
Business, by Sellers of any personal property other than the
Assumed Contracts;
(f)
All notes, bonds, guarantees or other evidence of indebtedness of
any Person held by the Sellers;
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(g)
All cash, cash equivalents, investments and all deposits of the
Sellers, excepting there from, all cash, cash equivalents,
investments and all deposits arising from or related to the
Business on or after the Closing Date which shall be the property
of the Purchaser;
(h)
Any and all insurance policies of the Sellers or any of their
Affiliates and all rights to any refunds in connection therewith;
provided, however, the Purchaser shall have no
responsibility for any loss of prepaid premiums or other costs,
expenses or charges arising from or associated with the foregoing;
and
(i)
All rights, claims and causes of action relating to any of the
property included in the preceding description of Excluded
Assets.
“ GAAP ” means United States
generally accepted accounting principles as promulgated by the
Financial Accounting Standards Board, as in effect from time to
time.
“ Governmental Body ” means
any federal, state, parish, municipal or other governmental or
quasi-governmental agency, department, board, commission, bureau or
other like entity or instrumentality.
“ Indebtedness ” means any
indebtedness in any form, nature or type whatsoever, including but
not limited to: (i) any indebtedness for borrowed money or
issued in substitution for or exchange of indebtedness for borrowed
money; (ii) any indebtedness evidenced by any note, bond,
debenture or other debt instrument; (iii) any indebtedness for
the deferred purchase price of property or services with respect to
which a Person is liable, contingently or otherwise, as obligor or
otherwise; (iv) any commitment by which a Person assures a
creditor against loss (including, without limitation, contingent
reimbursement obligations with respect to letters of credit);
(v) any obligations for which a Person is obligated pursuant
to a guarantee; (vi) any obligations under Capitalized Leases
with respect to which a Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or with respect to
which obligations a Person assures a creditor against loss;
(vii) any indebtedness secured by a Lien on a Person’s
assets; and (viii) net obligations under hedging arrangements
(including, without limitation, derivatives) designed to protect a
Person against fluctuations in interest rates, currency exchange
rates, commodity prices or other financial transactions.
“ Intellectual Property Rights
” means all (i) patents, patent applications, patent
disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and business names and
registrations and applications for registration thereof, together
with all of the goodwill associated therewith,
(iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for
registration thereof, (iv) mask works and registrations and
applications for registration thereof, (v) computer software,
data, databases and documentation thereof, (vi) trade secrets
and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial and
marketing plans and customer and supplier lists and other
information), (vii) other intellectual property rights and
(viii) copies and tangible embodiments thereof (in whatever
form or medium).
“ Investment ” as applied to
any Person means (i) any direct or indirect ownership,
purchase or other acquisition by such Person of any notes,
obligations, instruments, stock, securities or ownership interests
(including partnership interests, membership interests and joint
venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
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“ Knowledge ” or any
derivation thereof whether or not capitalized, shall mean,
knowledge of a condition or set of facts as has been obtained from
any source, including, regardless of any common law or statutory
definition of the foregoing, information which would cause a
reasonable person to inquire further.
“ Lien ” means any mortgage,
deed of trust, pledge, security interest, encumbrance, lien,
claims, charge or other restriction of any kind whatsoever
(including any conditional sale or other title retention agreement
or lease in the nature thereof), any sale of receivables with
recourse against the Business, any filing of or agreement to file a
financing statement as debtor under the Uniform Commercial Code or
any similar statute other than to reflect ownership by a third
party of property leased to the Sellers for use in the Business
under a lease which is not in the nature of a conditional sale or
title retention agreement.
“ Liquor and Gaming Laws of the State
of Louisiana ” shall mean the laws promulgated in the
Louisiana Revised Statutes Title 27:1 et seq ., and Title
26:1 et seq ., as amended from time to time and the
Louisiana Administrative Code provisions interpreting the
same.
“ Material Adverse Effect ”
or “ Material Adverse Change ” means any matter
or matters which would, alone or in the aggregate, have an adverse
effect on (i) the financial condition, operating
results, assets, liabilities, operations, condition (financial or
otherwise), business or prospects of the Sellers, the Business or
any Affiliate of the Sellers, (ii) the ability of the Sellers
or the Business to perform any of their obligations related to the
operations of the Business (each, a “Material Adverse
Effect”), or (iii) the ability of the Premises to
qualify as a truck stop facility under the Liquor and Gaming Laws
of the State of Louisiana capable of placing and operating not less
than 50 Devices. Material Adverse Effect or Material Adverse
Change specifically includes, but is not limited to: (a) any
violation by the Sellers or the Business, in any form and for any
reason, of the Liquor and Gaming Laws of the State of Louisiana; or
(ii) the revocation or suspension, for any period of time, of
any liquor or gaming license issued by the State of Louisiana to
the Sellers or the Business and used in the operations of the
Business, or (iii) the ability of the Premises to qualify as a
truck stop facility under the Liquor and Gaming Laws of the State
of Louisiana.
“ Minimum Purchase Price ”
shall be the sum of Four Million and no/100 Dollars
($4,000,000.00).
“ Plans and Specifications ”
shall mean those plans and specifications for the construction and
furnishing of the Truck Stop as attached hereto as
Exhibit B .
“ Permitted Encumbrances ”
means:
(a)
real estate and ad valorem taxes not yet due and
payable;
(b)
interests or title of a lessor or lessee under any lease identified
in Schedule 6.9(b) ; and
(c)
to the extent existing on the Closing Date hereof, matters which
are described on Schedule 1.1(Permitted
Encumbrances) , and approved of in writing by the Purchaser
prior to the Closing.
“ Person ” means an
individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, a governmental entity or
any department, agency or political subdivision thereof and any
other entity.
“ Proforma Income Statement
:” shall mean the proforma income statement attached hereto
as Exhibit C.
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“ Property Lease ” shall
mean that certain Lease Agreement, dated July 15, 2004,
between Earnest Properties, LLC, as Lessor, and Market Street Truck
Plaza, LLC, as Lessee, as amended by those certain First and Second
Addendums to the Lease Agreement, dated May 19, 2006 and
August 7, 2006, respectively, correct and complete copies of
which are attached hereto as Exhibit D. Market Street
Truck Plaza, LLC’s interest in the Property Lease Agreement
was assigned to Market Street Truck Plaza Acquisition Corp.,
L.L.C., pursuant to that certain Amended and Restated Memorandum of
Understanding, effective as of December 20, 2005, a correct
and complete copy of which is also attached hereto as
Exhibit D.
“ Purchaser ” means Gameco
Holdings, Inc., a Delaware corporation, its successors,
assigns and/or designees, in its sole discretion.
“ Restaurant Sublease ”
shall mean that certain sublease agreement, dated January 30,
2006, by and between Market Street, as Sublessor, and D&M,
L.L.C., dba Williams Fried Chicken, as Subleasee.
“ Settlement Statement
” shall mean a statement, signed by the Sellers and the
Purchaser and to be received by the Escrow Agent at least
twenty-four (24) hours prior to the Closing, identifying all funds
to be received by the Escrow Agent as of the Closing and further
identifying how and to whom all such funds are to be paid by the
Escrow Agent, such that all Acquired Assets are transferred to the
Purchaser free and clear of any and all Liens whatsoever, except
Permitted Encumbrances.
“ Survey ” shall have the
meaning given it in Section 3.4 .
“ Tax ” or “
Taxes ” means any federal, state, county, parish,
local, foreign or other income, gross receipts, ad valorem,
franchise, profits, sales or use, transfer, registration, excise,
utility, gaming, environmental, communications, real or personal
property, capital stock, membership interest, license, payroll,
wage or other withholding, employment, social security, severance,
stamp, occupation, alternative or add-on minimum, estimated and
other taxes or fees of any kind whatsoever (including deficiencies,
penalties, additions to tax or fees, and interest attributable
thereto) whether disputed or not.
“ Tax Return ” means any
return, information report or filing with respect to Taxes,
including any schedules attached thereto and including any
amendment thereof.
“ Title Company ” shall mean
United Title of Louisiana having an address at 6452 Youree Drive,
Shreveport, Louisiana 71105.
“ Title Evidence ” shall
mean the Title Policy and the Survey, as defined in Sections 3.3
and 3.4 , respectively.
1.2
Accounting Principles . The classification, character
and amount of all assets, liabilities, capital accounts and
reserves and of all items of income and expense to be determined,
and any consolidation or other accounting computation to be made,
and the interpretation of any definition containing any financial
term, pursuant to this Agreement shall be determined and made in
accordance with GAAP consistently applied.
1.3
Other Interpretive Matters . In this Agreement, unless
a clear contrary intention appears: (a) the singular
number includes the plural number and vice versa;
(b) reference to any Person includes such Person’s
successors and assigns but, if applicable, only if such successors
and assigns are permitted by this Agreement and reference to a
Person in a particular capacity excludes such Person in any other
capacity; (c) reference to any gender includes each other
gender; (d) reference to any agreement (including this
Agreement and the Schedules and Exhibits hereto), document or
instrument means such
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agreement, document or instrument as amended or
modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof (and without
giving effect to any amendment or modification that would not be
permitted in accordance with the terms hereof); (e) reference
to any applicable law means such applicable law as amended,
modified, codified or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated
thereunder and reference to any particular provision of any
applicable law shall be interpreted to include any revision of or
successor to that provision regardless of how numbered or
classified; (f) reference to any Article, Section or
Exhibit means such Article or Section hereof or such
Exhibit hereto; (g) “hereunder,”
“hereof,” “hereto” and words of similar
import shall be deemed references to this Agreement as a whole and
not to any particular Section or other provision hereof; and
(h) “including” (and with correlative meaning
“include”) means including without limiting the
generality of any description preceding such term.
Section 2.
Purchase of Assets and Closing .
2.1
Purchase and Sale of the Acquired Assets .
(a)
At the Closing, subject to the terms and conditions contained in
this Agreement, the Sellers, as applicable, shall sell, assign,
set-over, convey, deliver and transfer to the Purchaser, or its
designee, free and clear of any and all Liens and Indebtedness
whatsoever, excepting only Permitted Encumbrances, and the
Purchaser shall purchase from the Sellers, as applicable, all
rights, title and interests in and to the Acquired Assets for the
Minimum Purchase Price, and Purchaser shall pay to the Sellers the
Minimum Purchase Price, in immediately available funds, at the
Closing subject to the Escrow Hold Back and any other prorations
described in this Agreement.
(b)
Within ten (10) Business Days following the execution of this
Agreement by all parties hereto, the Purchaser shall deliver the
Deposit to the Escrow Agent. In every event, should the
transaction contemplated by this Agreement be consummated, the
Deposit shall be applied as a credit toward the Purchase Price by
the Escrow Agent at the Closing. In the event Purchaser shall
terminate this Agreement for any reason prior to that date which is
sixty-one (61) days after the Agreement Date (“Deposit
Forfeit Date”), upon notice to the Escrow Agent and the
Sellers of the Purchaser’s election to terminate this
Agreement, the Escrow Agent shall promptly release the Deposit to
the Purchaser in which event this Agreement shall thereafter be
null and void and no party shall have any further liability or
obligation hereunder. Promptly following the Deposit Forfeit
Date, and in no event later than 5 days following the same and
provided the Escrow Agent has not received a notice of termination
from the Purchaser prior to the Deposit Forfeit Date, the Escrow
Agent shall without further instruction release the Deposit to the
Sellers. In the event Purchaser shall terminate this
Agreement for any reason on or after the Deposit Forfeit Date, upon
notice to the Escrow Agent and the Sellers of the Purchaser’s
election to terminate this Agreement, this Agreement shall be null
and void and no party shall have any further liability or
obligation hereunder and the Sellers shall retain the Deposit as
full and final compensation for any and all damages they may have
incurred hereunder, and not as a penalty. Notwithstanding
anything contained in this Agreement to the contrary, in no event
shall the Purchaser have any liability for any damages to the
Sellers in excess of the Deposit.
(c)
The Closing of the purchase and sale of the Acquired Assets shall
take place at the offices of the Title Company or at such other
place as may be mutually agreeable to the Sellers and the
Purchaser. At the Closing, upon payment of the Minimum
Purchase Price, the Sellers, as applicable, shall deliver to the
Purchaser the Acquired Assets, together with such bills of sale,
powers of assignment, certificates, deed(s) and other
documents and instruments of conveyance as shall be reasonably
satisfactory to the Purchaser and its counsel to transfer record
ownership of the Acquired Assets, including, but not limited to,
those items identified in Section 10 below.
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(d)
On that date that is not later than nineteen (19) full calendar
months after Devices are legally operating at the Premises, the
Purchaser shall pay to the Sellers, in immediately available funds,
the Earn-Out Payment.
(e)
Sellers hereby instruct the Purchaser to pay the entire Minimum
Purchase Price and the Earn-Out Payment to Market Street and each
of the Sellers acknowledge that payment pursuant to the foregoing
directive shall satisfy any and all of the Purchaser’s
obligations for payment of the Minimum Purchase Price and the Earn
Out Payment hereunder to each of the Sellers. Notwithstanding
the foregoing, the parties agree that One Hundred Thousand and
no/100 Dollars ($100,000.00) of the Purchase Price, allocated
equally between the Sellers is the monetary consideration paid for
the “obligation not to do” as contained in
Section 11.21 . The parties acknowledge and agree
that this allocation is a reasonable allocation given the
entities’ and their relative abilities and experience in the
gaming industry. The parties each further acknowledge and
agree that payment of the Minimum Purchase Price and the Earn Out
Payment to the Sellers as outlined on the Settlement Statement is
appropriate consideration and reasonably related to the value of
the interests each party is transferring under this
Agreement.
2.2
Closing. Subject to any extension under
Section 2.5(b) below, the sale and transfer of the
Acquired Assets from the Sellers, as applicable, to the Purchaser
(“Closing”), pursuant to the terms and subject to the
conditions hereof shall take place on January 12, 2007
(“Closing Date”).
2.3
Release of Sellers’ Interest and Claims against the
Business and the Acquired Assets . Sellers agree,
concurrently with the Closing, to release all of their interests in
and to and any claims against any of the Business or the Acquired
Assets. Sellers shall deliver to the Escrow Agent a fully
executed assignment, termination and/or modification agreement, to
be effective as of and only upon the Closing, in form and substance
reasonably acceptable to the Purchaser, terminating all interests
and claims of the Sellers in the Business to the Acquired
Assets as of the Closing Date. Nothing contained in the
foregoing is intended to nor shall it operate to release any claims
or causes of action the Sellers’ or any one of them may have
arising out of or under this Agreement.
2.4
Non-Assumption of Liabilities by Purchaser .
(a)
Except for the Assumed Obligations (as hereinafter defined), the
Purchaser does not assume and shall not be liable for any of the
Indebtedness, debts, obligations, expenses, claims, liabilities or
commitments, of any nature whatsoever (collectively
“Obligations”) of the Sellers, whether arising prior
to, on or after the Closing, including, but not limited to,
Obligations arising from or related to the Acquired Assets and/or
the Business. The Sellers agree, individually, that all
Obligations, other than Obligations under the Assumed Contracts
that accrue after the transfer of the Acquired Assets
(collectively, the “Assumed Obligations”), shall remain
the obligations of the Sellers, as applicable. The Sellers,
jointly and severally, do hereby indemnify, defend and hold
Purchaser harmless from and against any and all claims, losses,
expenses, damages or liabilities asserted against or suffered by
Purchaser arising out of or resulting from the Obligations (other
than the Assumed Obligations), and, provided the Closing hereunder
is consummated by the Purchaser, the Purchaser does hereby
indemnify, defend and hold the Sellers harmless from and against
any and all claims, losses, expenses, damages or liabilities
asserted against or suffered by the Sellers arising out of or
resulting from the Assumed Obligations and arising or related to
the period after the Closing Date.
(b)
The parties acknowledge that as of the Agreement Date, the Truck
Stop is under construction. It is the intent and purpose of
the parties hereunder that the Sellers: (i) shall fully
Complete the Truck Stop pursuant to the Plans and Specifications;
(ii) all mechanical systems and other improvements related to
the Truck Stop shall be fully operating and in good condition; and
(iii) the
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restaurant, convenience
store and fueling operations (but not any gaming operations) of the
Business shall be open to the general public prior to the Closing
hereunder. Any and all costs, fees or expenses arising from
or related to the Sellers’ obligations under the foregoing,
even if invoiced after the Closing Date, shall remain the sole
obligation of the Sellers. It is further acknowledged and
agreed by the Purchaser that it has the sole obligation to obtain
appropriate liquor and gaming licenses to sell liquor on the
Premises and permit the operation of the Devices on the
Premises. Purchaser’s failure to obtain any such
licenses after the Closing Date, shall not invalidate this
transaction or give the Purchaser the right to seek reimbursement
from the Sellers of the Minimum Purchase Price unless such failure
is a result of a breach by the Sellers of their other obligations
under this Agreement.
(c)
The Sellers do hereby indemnify, defend and shall hold harmless the
Purchaser and the Title Company, and shall execute such affidavits
and instruments as shall be necessary to protect both the Purchaser
and the Title Company, from any material-men’s or
mechanic’s liens that may be related to the foregoing
construction and filed after the Closing. Sellers shall
secure and deliver at the Closing lien releases, in form and
substance acceptable to the Purchaser and the Title Company from
the general contractor engaged to construct the Truck Stop and from
any and all other contractors, sub-contractors or material-men and
shall pay all sums due to the same or to any other person arising
from or related to the construction of the Truck Stop at or prior
to the Closing. Sellers shall further deliver to the Purchaser at
Closing an assignment of any enforcement rights under the
construction contract against the general contractor such that the
Purchaser may enforce such contract directly against the general
contractor; provided, however , Sellers shall remain solely
obligated to the general contractor for any performance under the
same.
2.5
Release of Funds .
(a)
Upon completion of the transfers and deliveries described in
Sections 2.1, 2.2, 2.3 and 2.4 above and the discharge of
all Liens and Indebtedness, the Escrow Agent shall release,
pursuant to the Settlement Statement, any and all funds then on
deposit hereunder. Any fees charged by the Escrow Agent for
its services hereunder shall be shared equally with the Purchaser
responsible for one-half (1/2) of such costs and the Seller
responsible for the remaining one-half (1/2).
(b)
Notwithstanding the foregoing, the parties agree that this
Agreement and the Closing Date shall be subject to the issuance to
or receipt by the Purchaser of the Consents (as defined on
Schedule 6.13 below) and the receipt by the Purchaser of the
funds from any financing source(s) being utilized by the
Purchaser for the acquisitions contemplated herein (collectively,
the “Funds”). If the Consents or any portion of
the Funds have not been received or issued as of the Closing Date,
the Closing Date shall be extended from day to day for no more than
nineteen (19) days until the third (3 rd ) day following
the date each such Consent and all Funds are received, satisfied or
waived. Notwithstanding the foregoing, nothing contained in
this paragraph shall delay the Closing for more than nineteen (19)
days. After the expiration of such nineteen (19) day
period, any party may upon written notice terminate this Agreement,
and thereafter this Agreement shall be null and void and of no
further force and effect and the Deposit shall be released pursuant
to the terms and conditions of
Section 2.1(b) above.
Section 3.
Due Diligence . Beginning on the Agreement Date and
continuing to and including the Closing Date (the “Due
Diligence Period”), Purchaser shall have the right to perform
the following due diligence pursuant to the terms and conditions
hereof.
3.1
General Testing and Inspections .
(a)
During the Due Diligence Period, Purchaser shall (subject to the
provisions of the Property Lease) have the right to conduct such
engineering, environmental, general business and
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feasibility studies,
inspections, testing, audits and/or reviews of the Acquired Assets,
the Premises and the Business and its assets, liabilities,
operations (including operations and records), financial
performance and affairs as Purchaser deems necessary, including
soil tests, borings, drainage tests and similar tests on any land
or improvement owned by the Sellers and used in the Business, and
audits and reviews of all of the Business’s financial and
business records, operations, documents and instruments, including
a financial and tax audit of the Business held by or under the
control of the Sellers. Such studies shall be conducted by
Purchaser and its agents at the Purchaser’s sole cost and
expense.
(b)
Subject to reasonable advance notice, the Sellers agree to allow
Purchaser and/or its agents access to all assets, records,
documents and instruments of the Business or the Acquired Assets to
conduct such studies, tests, inspections, reviews and audits,
provided such access shall not unreasonably interfere with the
activities of the Sellers. Purchaser shall save, defend,
indemnify and hold the Sellers and the landlord under the Property
Lease harmless from and against all claims, lawsuits, judgments,
losses, liabilities or expenses of any kind or nature which may be
asserted against or incurred by the Sellers as the result of the
examination, tests, inspections, reviews, audits or studies of the
Acquired Assets, the Premises or the Business by the Purchaser or
any of its manager’s, employees, agents, contractors or
designees (excluding the discovery of any preexisting condition on
the Premises and any consequential damages arising from the
foregoing). Notwithstanding anything contained herein to the
contrary, Purchaser’s indemnity obligations set forth in this
Section 3.1(b) shall survive any termination of
this Agreement.
3.2
Zoning . Prior to Closing, Purchaser shall have
confirmed that the Premises and the current and intended uses
thereof will be in compliance, as of the Closing Date, with all
applicable building and zoning codes and any restrictions unique
thereto.
3.3
Title Commitment; Defects .
(a)
Within thirty (30) days following the Agreement Date, the Purchaser
shall cause the Title Company to issue and deliver its commitment
(the “Commitment”) for issuance of an ALTA Owners
Policy (Form B - revised 10-17-92) of title insurance covering
the Premises in the full amount of the Purchase Price, which
Commitment shall show leasehold title to the Premises to be vested
in the Sellers, subject only to the Permitted Encumbrances.
Copies of the Commitment together with copies of each document
affecting title to the Premises referenced therein, except for
monetary encumbrances which are to be released at Closing, shall be
delivered to Purchaser and the Sellers.
(b)
Purchaser shall notify Sellers of Purchaser’s disapproval of
any matter contained in the Title Evidence within five
(5) days after Purchaser’s receipt of all of the Title
Evidence and copies of the documents referred to in the Title
Evidence as exceptions or exclusions from coverage. If the
Title Evidence is not satisfactory to Purchaser (collectively,
“Defects”), those Defects shall, as a condition to
Purchaser’s obligations under this Agreement, be cured or
removed from the Title Evidence at or prior to the Closing
Date. If Sellers elect not to or are otherwise unable to cure
and remove all Defects at or prior to the Closing Date (or any
extension thereof), this Agreement may be terminated, at
Purchaser’s sole election, by written notice given to Sellers
within five (5) days after expiration of the period allowed
for cure and the Deposit, if not already released, shall be
promptly released by the Escrow Agent pursuant to
Section 2.1(b) above, or Purchaser may, at
Purchaser’s sole election, waive such uncured Defects and
proceed to close this transaction with no diminution of the
Purchase Price.
(c)
Notwithstanding any provision of this Section 3.3 to
the contrary, Sellers shall have the obligation, on or prior to the
Closing Date, to secure releases, discharges or satisfactions, or
otherwise cure at no cost to Purchaser, any Defect which is a Lien
for the payment of money only which arises by or through the
Sellers (except real estate and ad valorem taxes and
assessments which shall be prorated in
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accordance with Section 10 ),
including, without limitation, all construction mortgages, any Lien
or encumbrance which may be released or discharged by the payment
of a definite sum of money or any exception to title which arose as
the result of the act or violation of Sellers or anyone claiming
by, from, through or under Sellers.
(d)
It shall be a condition precedent to Purchaser’s obligation
to consummate the transaction contemplated hereby that the Title
Company will, upon filing the instruments for conveyance of record,
issue its ALTA Owner’s Leasehold Policy (Form B revised
10-17-92) of title insurance (the “Title Policy”) in
the full amount of the Purchase Price, at standard rates, insuring
Purchaser in leasehold title to the Premises subject only to the
Permitted Encumbrances, and without the exception for certain of
the standard printed exceptions (encroachments, overlaps, boundary
line dispute, or any other matters which would be disclosed by an
accurate survey or inspection of the Premises, easements or claims
of easements not shown by the public records, or any lien or right
to a lien for services, labor or materials furnished to the
Premises, imposed by law, and not shown by the public records),
unless and except to the extent that any such matters included in
the so-called standard printed exceptions have been approved or
waived by Purchaser. The Title Policy shall also
affirmatively insure: (i) Purchaser’s right to use
any appurtenant easements in accordance with their terms and
conditions; (ii) contiguity of the parcels described in
Exhibit A (if more than one parcel); (iii) that
the Premises have the benefit of full and free ingress and egress,
both pedestrian and vehicular, directly to and from a public
highway; and (iv) such other and additional endorsements or
conditions as the Purchaser may require. Sellers agree to execute
and deliver to the Title Company such affidavits and instruments as
may be reasonably required to permit the Title Company to issue
Purchaser’s Title Evidence in the form required by this
subsection and to provide a copy of such affidavits and instruments
to Purchaser. The cost and expense of such Owner’s
Policy shall be borne solely by the Purchaser.
3.4 Survey . Within ten
(10) days of the Agreement Date, Sellers shall deliver to the
Purchaser any surveys of the Premises in Sellers’ possession,
together with a copy of any reports, leases, documents, notices,
citations or records of any type or form in the possession of the
Sellers relating to or identifying: (i) a physical deficiency
in the Premises; (ii) an adverse effect on the Premises,
including, but not limited to, any records, notices or citations
relating to or concerning any aspect of the environmental condition
of the Premises; or (iii) a change in the current, zoning,
accessibility, physical characteristics, insurability, damage,
condemnation, takings of or to any portion of the Premises.
Following the Agreement Date, Purchaser shall have the right, at
its sole election, to cause a registered surveyor or professional
engineer to prepare a survey (the “Survey”) in form
sufficient to enable the Title Company to delete from the Title
Policy the so-called standard exception for matters disclosed by an
accurate Survey. A perimeter legal description of the
Premises as prepared by such surveyor or engineer shall be used to
describe the Premises in Exhibit A . The cost and
expense of such Survey shall be borne by the Purchaser. A
copy of the Survey shall be furnished to the Sellers. In the
event the Survey discloses any encroachments, overlaps, boundary
line disputes or any other matter affecting the Premises or which
violates any law, rule or regulation or is otherwise
unacceptable to the Purchaser, such matter(s) shall be
considered to be a Defect(s) and the relative rights and
obligations of the parties with respect thereto shall be governed
by the provisions of Section 3.3 hereof.
3.5
Environmental Matters .
Purchaser, at its sole election (subject to the
landlord’s consent under the Property Lease and
Purchaser’s agreement to repair any damage caused thereby),
may cause an environmental evaluation and/or consulting firm (the
“Consultant”) selected by Purchaser to conduct an
environmental inspection and audit of the Premises (the
“Audit”), including, without limitation, a Phase
I, II or III site assessment study. The cost and expense
of such Audit shall be borne by the Purchaser. To the extent
environmental audits for the Premises have been previously obtained
by Sellers; Sellers, as applicable, shall deliver
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copies of same to Purchaser within fifteen (15)
days of the Agreement Date. Purchaser and Sellers shall
cooperate in an attempt to achieve the result that the Audit is
performed as soon as practicable and is completed no later than the
Deposit Forfeit Date. In addition to providing any
information reasonably requested by the Consultant, Sellers shall
cooperate with Purchaser and the Consultant throughout the course
of the Audit and shall cooperate in any other way reasonably
requested by Purchaser or the Consultant.
3.6
Other Records and Documents .
(a)
In addition to the foregoing and to the extent the below-listed
documents are in the possession of the Sellers, the Sellers agree
to deliver to the Purchaser, within fifteen (15) days of the
Agreement Date, a full and accurate list and reasonably complete
details concerning each item described below and a copy of each
document to the extent such copies are in the possession or control
of the Sellers:
(i)
copies of any and all certificates of title, liens, encumbrances,
leases, deeds of trust, mortgages, judgments, rights-of-way,
easements, covenants, conditions or restrictions, other exceptions
or matters of record relating to or affecting any real or personal
property used in the Business;
(ii)
copies of all certificates of occupancy, zoning variances,
licenses, permits, authorizations and approvals relating to the
Premises or the Business from any Governmental Body having
jurisdiction over the Premises or the Business, together with any
other notices and agreements related thereto, including, but not
limited to, any and all gaming and liquor licenses and permits and
renewals of the same or applications therefore;
(iii)
to the extent not already required above, copies of any and all
environmental permits, notices, demands, action letters, reports,
assessments, audits, directives from any Governmental Body,
documentation of any environmental matter related to the Premises;
identification of which portion of the Premises has ever been or is
now being used for the storage, generation, treatment, manufacture,
disposal or release of any “hazardous substance” as
defined by any Environmental and Safety Requirements,
identification of all waste disposal sites and the location of all
underground storage tanks or lines, whether in use or abandoned; a
summary of all environmental testing done by the Sellers; and
identification of any event of non-compliance with an Environmental
and Safety Requirement;
(iv)
copies of all real estate, personal property, fuel and ad
valorem taxes, assessments, general and special, bills and
returns, gaming and liquor license fees and renewals and any and
all notices of violations, delinquencies and/or assessments of the
same received by the Sellers within twenty-four (24) months
preceding the Agreement Date;
(v)
copies of any and all leases affecting the Premises or the Business
in any manner, including, but not limited to, the Property Lease
and the Restaurant Sublease and any and all amendments or addendums
thereto;
(vi)
copies of monthly financial statements, including an income and
balance sheet statement for each month of the Business’s
operation if in the possession or control of the Sellers (and will
continue to provide Purchaser this information within fifteen (15)
days of the end of each calendar month during the term of this
Agreement during which the Business is open to the general public,
if the same is in the possession or under the control of the
Sellers);
(vii)
copies of any and all Contracts (as defined hereinafter) affecting
the Premises or the Business in any manner;
15
(viii)
copies of any and all invoices, bills, contracts, agreements,
payment applications, records and evidence of actual payments,
retainage statements, lien waivers, notices, etc., relating to the
construction of the Truck Stop and/or any other improvements on the
Premises; and
(ix)
any other documents and information reasonably requested by the
Purchaser.
Section 4.
Termination . Notwithstanding anything contained in
this Agreement to
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