EXHIBIT 2.1 SALE AND PURCHASE AGREEMENT

 

 

                                                       EXHIBIT 2.1

 

                         SALE AND PURCHASE AGREEMENT

 

THIS SALE AND PURCHASE AGREEMENT is entered into as of this 15th day of

November, 2004, by and between The President Riverboat

Casino-Mississippi, Inc. ("PRC-Mississippi"), Vegas Vegas, Inc. ("VVI")

(each a debtor in Case No. 02-53005-172 pending in the United States

Bankruptcy Court for the Eastern District of Missouri (the "Bankruptcy

Court")), President Broadwater Hotel, LLC ("PBLLC") (collectively with

PRC-Mississippi and VVI, "Sellers"), on the one hand, and Broadwater

Properties, LLC ("Purchaser"), on the other hand, for the sale and

purchase of the owned and leased real property and businesses commonly

known as the President Casino Broadwater Resort in Biloxi, Mississippi

(the "Resort").

 

                                  BACKGROUND

 

The Sellers and Purchaser have negotiated toward a sale of the Resort,

pursuant to a letter of interest furnished to Sellers by Purchaser

together with an earnest money deposit of One Million Dollars

($1,000,000) (the "Deposit"), which is held in escrow for the parties by

US Bank National Association as escrow agent (the "Escrow Agent"); and

the Sellers and Purchaser have reached an agreement concerning the sale

of the Resort, the terms of which are set forth herein, and which sale is

subject to higher and better offers for the Resort from interested third

parties.

 

NOW, THEREFORE, the Sellers and Purchaser hereby agree as follows:

 

                                   ARTICLE 1

 

                       AGREEMENT FOR PURCHASE AND SALE

 

1.1   Assets to be Purchased.   Subject to the terms and conditions of this

Agreement and all necessary approvals of the Bankruptcy Court and others

as set forth herein, the respective Sellers agree to sell and cause to be

conveyed and/or assigned to Purchaser, as applicable, and Purchaser

agrees to purchase and/or assume, as applicable, the following assets of

Sellers (collectively, the "Assets"):

 

  (a)   The real property (including leasehold and easement interests) of

PBLLC generally described as the President Casino Broadwater Resort, 2110

Beach Boulevard, Biloxi, Mississippi 39531, and all buildings,

improvements, appurtenances and hereditaments of PBLLC pertaining

thereto, generally consisting of an assembled 73-acre property on which

is located an 18 hole golf course ("Golf Course") and a 330-room hotel

with banquet and meeting room facilities ("Resort Hotel"), all more

particularly described as Parcels 1, 2A, 2B, 3, 5, 6, 7 and 8 on Schedule

1.1(a) (the "Land");

 

  (b)   All of PBLLC's right, title and interest, if any, as lessee of

Ocean Beach Club of Biloxi, LLC, in and to the Broadwater Tower Hotel

Lease and PBLLC's leasehold estate created thereby, covering the 179-room

Broadwater Tower Hotel (the "Tower Hotel"), as more particularly

described on Schedule 1.1(b) (the "Broadwater Tower Leasehold");

 

  (c)   All of PBLLC's right, title and interest, as lessee of the State

of Mississippi or agencies thereof, in and to the Fastlands Lease and the

Tidelands Lease, and PBLLC's leasehold estates created thereby, more

particularly described as Parcel 4 on Schedule 1.1(a) (the "Public

Leaseholds"), together with all improvements thereon situated, including

but

 

<PAGE> 6

not limited to a 111-slip marina, inclusive of the space occupied by the

Vessel (the "Marina");

 

  (d)   The M/V President-Casino-Broadwater, U.S.C.G. serial no. 995650

(the "Vessel"), owned by PRC-Mississippi and used in the operation of a

gaming casino located at the property covered by the Tidelands Lease and

Fastlands Lease as defined in Section 6.1(d) below (the "Casino", and

collectively with the Golf Course, the Resort Hotel, the Tower Hotel and

the Marina, the "Businesses");

 

  (e)   All tangible personal property of PRC-Mississippi located on,

attached or appurtenant to or used in connection with the Casino of

PRC-Mississippi (the "Casino Personal Property"), including, but not

limited to, the following:

 

    (i)   All gambling games, slot machines, tables and other gaming

equipment that are used in the operation of the Casino, together with

PRC-Mississippi's inventory of gaming chips, tokens, scrip, markers,

gaming supplies and other items held for use at the Casino in the

ordinary course of business (the "Gaming Equipment");

 

    (ii)   All cash on board the Vessel and on hand at the resort Hotel,

Tower Hotel, Marina and Golf Course as of the Closing (the "Cage Cash");

 

    (iii)   (A) all items falling within the classification of

"Inventories" in ledger accounts 13100-001 through 13180-001 as reflected

in the detail balance sheet of PRC-Mississippi as of October 31, 2004, a

copy of which is attached hereto as Schedule 1.2(b)-1 (the

"PRC-Mississippi Detail Balance Sheet"), (B) all items falling within the

classification of "Receivables" in ledger accounts 11205-001 through

11265-001 as reflected in the PRC-Mississippi Detail Balance Sheet, and

(C) all items falling within the classification of "Prepaid Expenses" in

ledger accounts 14100-001 through 14170-001 as reflected in the

PRC-Mississippi Detail Balance Sheet (together with all cash on board the

Vessel, the "PRC-Mississippi Current Assets"); and

 

    (iv)   Furniture, fixtures, equipment, including those held by Seller

in connection with its food service and dining facility located on the

Vessel; all uniforms and apparel; all shelving, racks, cash registers and

other supplies used in the operation of the gift shop on the Vessel;   all

appliances, racks, trays, crockery, plates, cutlery, flatware, cookware,

serving ware, utensils, uniforms, napkins, linens and other tangible

personal property held by Seller for use in connection with its food

service and dining facilities on the Vessel; all courtesy vehicles; all

life saving equipment (including life boats and inflatable boats),

supplies held for consumption in the operation of the Vessel, and radio

equipment and spare parts relating to any of the foregoing;

 

  (f)   With respect to the Tower Hotel, Resort Hotel, Golf Course and

Marina, (A) all items falling within the classification of "Inventories"

in ledger accounts 00-1201 through 00-1253 as reflected in the detail

balance sheet of PBLLC as of October 31, 2004, a copy of which is

attached hereto as Schedule 1.2(b)-2 (the "PBLLC Detail Balance Sheet"),

(B) all items falling within the classification of "Accounts Receivable"

in ledger accounts 00-1101 through 00-1119 as reflected in the PBLLC

Detail Balance Sheet, and (C) all items falling within the classification

of "Current Prepaids" in ledger accounts 00-1410 through 00-1496 as

reflected in the PBLLC Detail Balance Sheet (together with the cash on

hand at the Marina, Resort Hotel, Tower Hotel and Golf Course, the "PBLLC

Current Assets");

 

  (g)   All fixed assets and supplies of PBLLC located on or used in

connection

 

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with the Tower Hotel and Resort Hotel (the "Hotel Personal Property"),

including, but not limited to, the following:

 

    (i)   Furniture, fixtures, equipment, including those held by Seller

for use in connection with the food service, dining, banquet and meeting

room facilities at the Tower Hotel and Resort Hotel, courtesy vehicles,

vans, maintenance equipment, audio systems, entertainment systems and

spare parts relating to any of the foregoing; and

 

    (ii)   All hospitality items, uniforms, apparel, linens, towels and

sundries; all shelving, racks, cash registers and other supplies used in

the operation of the gift shop located at the Hotels; all appliances,

racks, trays, flatware, cookware, serving ware, crockery, plates,

cutlery, utensils, uniforms, napkins, linens and other tangible personal

property held for use in connection with the food service, dining,

banquet and meeting room facilities.

 

  (h)   All fixed assets and supplies of PBLLC used in the operation of

the Golf Course (the "Golf Course Personal Property"), including, but not

limited to, furniture, fixtures, clubhouse assets, carts, maintenance

equipment and supplies and spare parts relating thereto, all

groundskeeper tools;

 

  (i)   All tangible personal property used in the operation of the Marina

(the "Marina Personal Property"), including, but not limited to,

furniture, fixtures, equipment, tanks, pumps, lifts, hoists, boats used

in operations, supplies held for consumption in the operation of the

Marina, boathouse assets, maintenance equipment and spare parts relating

thereto;

 

  (j)   All of Sellers' rights, title and interest in and to the executory

leases and contracts of Sellers, not previously listed above, which are

either (i) leases and contracts listed on Schedule 1(i), which schedule

shall be subject to the parties' mutual agreement and attached hereto

prior to the expiration of the Inspection Period (as hereinafter defined)

and which will be assumed by Seller subject to entry of an order of the

Bankruptcy Court, (ii) post-petition leases and contracts relating to the

operation of the Businesses which will be assigned by the applicable

Seller to Purchaser at the Closing at Purchaser's request, subject to any

necessary third party consent, or (iii) contracts to which PBLLC is a

party, which will be assigned by PBLLC to Purchaser at the Closing at

Purchaser's request, subject to any applicable third-party consent

(collectively, the "Executory Contracts");

 

  (k) [Intentionally omitted]

 

  (l)   All of Sellers' transferable rights, title and interest in and to

licenses, permits, approvals, registrations, consents and authorizations

pertaining to the Resort, including, without limitation, those listed in

Schedule 1(l);

 

  (m) (i) All of Seller's right, title and interest in and to the Biloxi

Bucks and Crazy Quarters registered trademarks and the goodwill of

Seller's business

relating thereto, (ii) the rights to use the name "President Casino"

within a 100-mile radius of the Resort ("Territory") and/or use of the

name "Broadwater" in connection with the operation of the Resort and each

of the Businesses, and (iii) the rights to use within the Territory each

other trademark and service mark of the Businesses listed on Schedule

1(m), trade secrets, copyrights, applications therefor, intellectual

property licenses (both as licensor and licensee), franchises,

discoveries, know-how and all goodwill of the respective Businesses

associated therewith (collectively, the "Intellectual Property"; and to

the extent Seller's parent company owns any interest in such Intellectual

Property, Seller shall cause such parent company to deliver the same at

the time of the Closing;

 

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  (n)   All of Sellers' transferable rights, title and interest in and to

all post office boxes, e-mail addresses, telephone and facsimile numbers

and domain names held for use in connection with the operation of the

Resort and any of the Businesses; and

 

  (o)   To the extent relating to Sellers' marketing and operation of the

Resort or the Businesses, all books, records, files and papers, whether

in hard copy or computer format, including, without limitation, books of

account, sales and promotional literature, manuals and data, sales and

purchase correspondence, lists of present and former suppliers, personnel

and employment records of present or former employees, and documentation

developed or used for accounting or marketing purposes.

 

1.2   Excluded Assets.   The following assets of Sellers shall be excluded

from the Assets:

 

  (a) [Intentionally Omitted];

 

  (b) Officer and crew personal effects;

 

  (c)   All non-assignable computer software, proprietary or otherwise,

and risk management, general ledger and fixed asset software (excluding

data and related documentation), in each case which are owned, used or

licensed by any Seller as licensee or licensor in connection with the

Assets (but excluding player tracking data and other customer information

or lists, fixed asset, general ledger and risk management data.   Sellers

will provide Purchaser with technical support to incorporate the fixed

asset, general ledger and risk management data into Purchaser's computer

systems.);

 

  (d)   Any tax credits, refunds, carryforwards, operating losses and

other tax attributes, including any rights to tax refunds accruing to the

owner of the Assets for any period prior to the Closing Date;

 

  (e)   Any insurance refunds due and payable to Sellers;

 

  (f)   The Sellers' tax returns, work papers, financial statements and

ledgers, minute books, stock records and other records pertaining to the

Sellers' financial records and corporate existence;

 

  (g)   All rights of the bankrupt Sellers to claims or recoveries under

Chapter 5 of the United States Bankruptcy Code;

 

  (h)   All rights of Sellers to receive the proceeds of any pending

litigation, arbitration or other pending adversary proceeding in which

any Seller is a plaintiff or counter-plaintiff (including without

limitation proceeds of insurance maintained by such Seller or by any

third party, and rights of contribution and/or reimbursement from

responsible tortfeasors and other parties, whether or not presently

identified in any such proceeding), and proceeds obtained through

settlement, judgment and the enforcement thereof;

 

  (i)   All insurance recoveries relating or attributable to assets that

are not part of the Assets, including without limitation, returns of

premium;

 

  (j)   All executory leases and contracts of Sellers not being acquired

by Purchaser;

 

  (k)   All rights of Sellers under employee benefit plans and related

trusts and insurance policies and similar arrangements sponsored or

maintained by Sellers for current or former employees; and  

 

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  (l)   All licenses, permits, authorizations, franchises and similar

items which cannot lawfully be transferred to or for the benefit of

Purchaser.

 

                                  ARTICLE 2

 

                                PURCHASE PRICE

 

2.1   Computation of Purchase Price.   The aggregate consideration to be

paid by Purchaser to Sellers for the Assets shall be the assumption of

the Assumed Liabilities as set forth in Article 3, and the payment of an

amount ("Purchase Price") equal to the sum of:

 

  (a)   Sixty Six Million Dollars ($66,000,000) (the "Base Price"),

subject to increase as set forth in Section 2.2, plus

 

  (b)   the Separate Asset Value, plus or minus

 

  (c)   the aggregate amount of the Adjustments.

 

The term "Separate Asset Value" means the aggregate book value as of

Closing of the PRC-Mississippi Current Assets and the PBLLC Current

Assets (subject to a post-closing adjustment to credit Purchaser for the

value of any "accounts receivable" described in Sections 1.1(e)(iii) and

1.1(f) above that remain uncollected by Purchaser by a date to be

mutually agreed upon by Purchaser and Sellers), plus the Cage Cash, in

each case determined in accordance with generally accepted accounting

principles, consistently applied.   The term "Adjustments" means an amount

representing the net amount due Sellers or Purchaser after taking into

account the following:   (i) the book value of the Casino Obligations (as

defined in Section 3(c) below) of PRC-Mississippi, which shall be a

credit to Purchaser; (ii) the book value of the Business Obligations (as

defined in Section 3(f) below) of PBLLC, which shall be a credit to

Purchaser; (iii) the net adjustment resulting from the apportionments set

forth in Section 2.4 below; (iv) the credit due Purchaser for unapplied

security deposits as set forth in Section 2.5 below; (v) the net amount

due Seller or Purchaser as a result of the real estate related

apportionments in Sections 5.4 and 5.5 below; (vi) the Transfer Tax

payable under Section 5.6 below, which shall be a credit to Purchaser;

and (vii) any other net credit due Sellers or Purchaser as provided in

this Agreement or another agreement executed by Sellers and Purchaser

prior to Closing.

 

2.2   Increase in Purchase Price.   If the Purchaser increases the amount

of the consideration payable for the Assets in a successful attempt to

outbid a proponent of a higher and better offer at or after the Auction

referred to in Section 8.1, then the Purchase Price shall automatically

be increased by an equal amount and the Purchaser and Sellers shall

execute a written instrument to memorialize the increased Purchase Price.

 

2.3   Closing Payment.   At Closing, Sellers shall deliver to Purchaser the

Sellers' good faith written estimate of the Separate Asset Value and the

net amount of the Adjustments as of Closing.   Purchaser shall pay to

Sellers at Closing, by wire transfer of immediately available funds, an

amount equal to (a) the Base Price, plus (b) ninety percent (90%) of the

Sellers' estimate of the Separate Asset Value and net Adjustments.

Within thirty (30) days after Closing, Sellers shall deliver to Purchaser

the Sellers' final statement of the Separate Asset Value and the

Adjustments, and Purchaser shall have thirty (30) days to review such

statement and to object to any matter set forth therein.   The Sellers

shall furnish Purchaser with such additional information and documents as

Purchaser shall reasonably request in connection with its review.   If the

Purchaser does not object to such statement within thirty (30) days after

its receipt thereof, then such calculations shall be final and

 

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<PAGE> 10

binding upon all parties of interest.   If the Purchaser objects to

Sellers' calculations in writing within such thirty (30) day period, then

representatives of the parties shall meet promptly thereafter to resolve

any disputes.   To the extent the parties cannot reach an agreement on the

amount of the Separate Asset Value or Adjustments, then such dispute

shall be referred to a mutually agreeable accounting firm in St. Louis,

Missouri (the "Independent Accounting Firm") for a final determination,

the cost of such determination to be divided equally between Purchaser

and Sellers, as a group, with Sellers' portion to be deducted from the

Purchase Price.   Within three (3) business days after the amount of the

Separate Asset Value and Adjustments has been finally determined, whether

by the concurrence of the Purchaser, the failure of the Purchaser to

object, or the determination of the Independent Accounting Firm, the

Purchaser shall pay to Seller the balance of the Separate Asset Value and

Adjustments, or the Seller shall refund to Purchaser the amount by which

ninety percent (90%) of the estimate at Closing exceeds the actual

Separate Asset Value and Adjustments, whichever applies.

 

2.4   Risk of loss and apportionments.

 

  (a)   The risk of loss with respect to the Assets, and all financial,

operational and other risks and benefits associated with the Assets and

Business Obligations, shall pass from Sellers to Buyer as of (i)   1:59:59

A.M. on the Closing Date, in the case of the Casino and the Casino

Obligations, and (ii) 11:59:59 P.M. on the day immediately preceding the

Closing Date, in the case of the Resort Hotel, Tower Hotel, Marina and

Golf Course, and the respective Business Obligations relating thereto

(the "Adjustment Time").

 

  (b)   Without duplication for the Assumed Liabilities in Section 3(f),

the following apportionments shall be made as of the Adjustment Time:

 

    (i)   With respect to leases among the Executory Contracts under which

a Seller is lessor, rents and additional rents for the month in which the

Closing Date occurs (the "Closing Month") shall be allocated between

Sellers, as a group, and Purchaser on a per diem basis.   If past due

rents or other sums are owing by tenants for any period prior to the

Closing (the "Rent Arrearages"), then promptly after the Closing Date

Purchaser shall bill all

such tenants for sums owed and shall use its reasonable efforts to

collect all Rent Arrearages.   Rents collected after Closing shall be

applied first to Rent Arrearages and then to current rents due.   If, as

and when the Purchaser collects payments from a tenant on account of Rent

Arrearages, Purchaser shall hold such funds as trustee for the Sellers

and shall pay an amount equal to the Rent Arrearages to Sellers within

ten days after Purchaser or its agent receives each such payment.

 

    (ii)   After the Closing, Purchaser shall deliver to Sellers a monthly

collection report showing the sum, if any, paid by each tenant with

respect to Rent Arrearages and the unpaid balance owed by such tenant

pursuant to its lease through the end of such calendar month; such

collection report shall be delivered to Sellers within ten days after the

last day of each calendar month after the Closing until Sellers has

received all Rent Arrearages.   The Sellers shall have the right to review

and audit the Purchaser's records with respect to the Rent Arrearages

payable to or collected by Purchaser.

 

    (iii)   All real and personal property taxes and assessments, rental

payments, electric, gas, water, sewer and telephone charges and all other

apportionable operating costs and charges and expenses with respect to

the Assets, shall be allocated between Sellers and Purchaser as of the

Adjustment Time on a per diem basis for the period for which assessed.

 

    (iv)   All gaming revenues, food and beverage revenues, gift shop

revenues,

 

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vending machines, in room movies, telephone and facsimile charges, room

charges, meeting charges, event hosting fees, greens fees, tournament

receipt and deposits, and other revenues associated with the Assets,

shall be allocated between Sellers and Purchaser based on actual receipts

through the Adjustment Time.

 

     (v)   Charges under Executory Contracts (other than leases) affecting

the Assets on the Closing Date, shall be allocated between Sellers and

Purchaser on a per diem basis.

 

2.5   Security Deposits.   Effective as of the Adjustment Time, Purchaser

will receive a credit against the Purchase Price in an amount equal to

all unapplied security deposits payable to tenants under Executory

Contracts under which any Seller is lessor in effect on the Closing Date,

and all deposits and prepayments made with respect to meetings, events

and tournaments that will not occur until after Closing, against

Purchaser's receipt and indemnification therefor.   Upon making such

credit, Purchaser will be deemed to have received all such security

deposits and other deposits and shall be fully responsible for the same

as if a cash amount equal to such security deposits and other deposits

were actually delivered to Purchaser.   Prior to the Closing, Sellers

reserve the right to apply all security deposits as provided under the

respective leases, and all other deposits in accordance with Sellers'

historical practice.

 

2.6   Allocation.   The Purchase Price shall be allocated in accordance

with Internal Revenue Service ("IRS") Form Paragraph 8594 which shall be

prepared by Purchaser and delivered to Seller within forty-five (45) days

after the Closing Date for Seller's approval (not to be unreasonably

withheld) and to be filed by Seller with the IRS.   After the Closing, the

parties shall make consistent use of the allocation, fair market value

and useful lives specified in IRS Form Paragraph 8594 for all tax

purposes and in all filings, declarations and reports with the IRS in

respect thereof.   In the event of any action, audit, hearing,

investigation, litigation or any other proceeding in respect of this

Agreement or any of the transactions contemplated hereunder, neither

Purchaser nor Seller shall contend or represent that such allocation is

not a correct allocation.

 

                                  ARTICLE 3

 

                          ASSUMPTION OF LIABILITIES

 

Subject to the entry by the Bankruptcy Court of the Sale Order as set

forth in Article 8 below, effective as of Closing:

 

  (a)   PRC-Mississippi and VVI (together, "Debtors") shall assume as

their obligations as provided in Section 8.2, and shall assign to

Purchaser in writing, all of Sellers' right, title and interest in and to

the Executory Contracts to which they are parties;

 

  (b)   PBLLC shall assign to the Purchaser all Executory Contracts to

which it is a party;

 

  (c)   Purchaser shall assume the accrued liability of PRC-Mississippi as

of Closing to pay the ultimate winnings owed to individuals playing

progressive slot machines, games primary progressive reserve, games

reserve for top awards, slots reserve for top awards, poker progressive

reserve, gift shop certificate liability, lost and found money, customer

safekeeping deposits, players club accrual (or other outstanding

complimentaries), outstanding chips/tokens and employee benefit accruals

for holiday, vacation, personal day, sick day and severance benefits

(collectively the "Casino Obligations").   

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The progressive slot liability shall be determined by a meter reading by

Purchaser and Seller at Closing.   The remainder of the Casino Obligations

shall be determined by Purchaser and Seller at Closing in accordance with

good and customary gaming practice.  

 

  (d)   Purchaser shall assume all ordinary course, ongoing liabilities

and obligations of PBLLC incurred with respect to the operation of the

Tower Hotel and Resort Hotel, including but not limited to the

obligations to provide rooms to customers then staying at the hotel or

who then have confirmed or unconfirmed reservations, to host meetings,

conventions, banquets and other events then in progress or booked for

future performance, to process cash payments, credit card and other

payments for services rendered prior to and after Closing (with all

expenses and receipts to be prorated as provided in Section 2.4), to

provide continuing space and/or services to concessionaires, and

obligations relating to lost and found, safekeeping deposits, outstanding

complimentaries and discounts, and employee benefit accruals for holiday,

vacation, personal day, sick day and severance benefits (collectively,

the "Hotel Obligations").

 

  (e)   Purchaser shall assume all ordinary course, ongoing liabilities

and obligations of PBLLC incurred with respect to the operation of the

Marina, including but not limited to the obligations to provide temporary

or indefinite mooring privileges to customers then having boats at the

Marina or who have contracted for future mooring privileges, to process

cash payments, credit card and other payments for services rendered prior

to and after Closing (with all expenses and receipts to be prorated as

provided in Section 2.4), and obligations relating to lost and found,

long term storage, boat, motor and lift repairs and maintenance,

outstanding discounts, and employee

benefit accruals for holiday, vacation, personal day, sick day and

severance benefits (collectively, the "Marina Obligations").

 

  (f)   Purchaser shall assume all ordinary course, ongoing liabilities

and obligations of PBLLC incurred with respect to the operation of the

Golf Course, including but not limited to the obligations to provide tee

times and fulfill tournament reservations, to process cash payments,

credit card and other payments for services rendered prior to and after

Closing (with all expenses and receipts to be prorated as provided in

Section 2.4), and obligations relating to lost and found, equipment

rental, repairs, outstanding discounts, and employee benefit accruals for

holiday, vacation, personal day, sick day and severance benefits

(collectively, the "Golf Course Obligations," and together with the

Casino Obligations, Hotel Obligations and Marina Obligations, the

"Business Obligations").

 

The Purchaser shall execute written instruments of assignment and

assumption satisfactory to Sellers, by which Purchaser shall agree to

assume as Purchaser's primary obligations, and to timely pay and perform

the Business Obligations and all obligations of the Sellers arising under

the Executory Contracts, to the extent such obligations accrue from and

after the date of the Closing (collectively, the "Assumed Liabilities").

Before the hearing on the Sale Order, Debtors shall take all appropriate

action to determine or to contest in good faith the cure amounts required

to be paid to the various other parties to the Executory Contracts in

order to permit the assumption by Debtors and assignment to Purchaser

thereof pursuant to Section 365 of the Bankruptcy Code, and Debtors at

their sole option shall either pay all such cure amounts in cash no later

than Closing, or shall direct Purchaser in writing to pay such cure

amounts out of the Cash Consideration otherwise required by this

Agreement to be paid to Sellers at Closing.   Other than the Assumed

Liabilities and the Permitted Encumbrances, Purchaser is not assuming or,

agreeing to pay for any liabilities or obligations of Sellers, or to take

the Assets subject to any liability or encumbrances.

 

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                                  ARTICLE 4

 

                        PHYSICAL CONDITION OF PROPERTY

 

Purchaser will inspect the Resort during the hereinafter described

Inspection Period to the extent Purchaser deems necessary in connection

with the transactions contemplated by this Agreement.   Purchaser

acknowledges that Sellers have not made and do not make and are unwilling

to make any express or implied representations or warranties as to the

present, past or future physical condition, income, expenses, operation,

legality of occupancy or any other matter affecting or related to the

Assets except as specifically set forth in Article 6 of this Agreement,

including the schedules hereto.   No representation, warranty or covenant

made by any Seller in this Agreement or any document delivered pursuant

hereto shall survive the Closing unless otherwise expressly provided in

this Agreement.   Purchaser agrees to purchase the Assets in their "AS IS"

condition and acknowledges and accepts that Sellers disclaim all implied

warranties that might otherwise be applicable, including, but not limited

to, the warranty of merchantability and fitness under the Uniform

Commercial Code.   Purchaser has not relied upon, and Sellers are not

liable or bound in any manner, by any verbal or written statements,

representations, real estate brokers' "setups" or information pertaining

to the Assets furnished by any real estate broker, agent, employee,

servant or other persons unless the same are expressly set forth in this

Agreement.   The

execution and delivery by Sellers at Closing of deeds, bills of sale,

instruments of assignment and other documents, and the acceptance thereof

by Purchaser, shall be deemed to be the full performance and discharge of

every obligation of Sellers to be performed under this Agreement prior to

the Closing Date and the truth or waiver of every representation or

warranty made by Sellers in this Agreement or in any Schedule attached

hereto or in any document, certificate, affidavit or other instrument

delivered by Sellers or its agents at or in connection with the Closing,

except for those warranties, representations and obligations of Sellers

which this Agreement expressly provides are to survive the Closing.

 

                                  ARTICLE 5

 

                     CONDITION OF TITLE, TITLE INSURANCE

 

5.1   Title Matters.   Within ten