Exhibit 10.15
STOCK PUT AGREEMENT
THIS AGREEMENT
made as of this 15th day of October, 2003 between DONALD F.
CONWAY, THE CHAPTER 11 TRUSTEE FOR THE
BANKRUPTCY
ESTATE OF ROBERT E.
BRENNAN
(the "Seller"), maintaining an office at Druker,
Rahl & Fein, 3625 Quakerbridge
Road, Hamilton, New Jersey 08619, and
INTERNATIONAL THOROUGHBRED BREEDERS, INC.,
a Delaware corporation ("Purchaser" or "ITB") maintaining an office at 211
Beningo Boulevard, Bellmawr, New Jersey
08031.
Background
A. On August 7,
1995, Robert E.
Brennan (the "Brennan") filed a voluntary
petition for relief under Chapter 11 of Title 11 of the
United States Code (the
"Bankruptcy Code") in the United States
Bankruptcy Court for the District of New
Jersey, Case No. 95-35502(KCF).
Seller is the duly
appointed Chapter 11 Trustee
of the Brennan bankruptcy estate.
B. ITB is the
corporate grandparent of ITG Vegas, Inc. ("ITG"). ITB derives
substantially all of its revenue through ITG's operation of the Palm Beach
Princess, f/k/a The Viking Princess,
Patente of Navigation
No. 14348-84-84-D,
Radio Call Signal 3FNQ2, an ocean-faring casino cruise ship, registered in
Panama (the "Ship"). ITG operates the Ship
from the Port of Palm Beach, Florida.
MJQ Corporation ("MJQ") holds title to the Ship.
Francis W. Murray owns MJQ and
is an officer and director of each of ITG,
ITGD and ITB.
C. ITG, ITB and
the Seller, together
with a number of other
persons, are
parties to that certain Master Settlement Agreement dated as of February 22,
2002 and effective as of April 30, 2001 (the "Master
Settlement
Agreement"),
pursuant to which and also pursuant to
certain Settlement
Documents (as defined
in the Master Settlement Agreement) the parties agreed to resolve certain
matters between themselves as provided in
the Master Settlement Agreement.
D. The
Seller is the holder
of a certain
Promissory Note dated
as of May
13, 1999 in the principal amount of $12,000,000 made by MJQ (the "Note") and a
certain Indenture of Second Note Mortgage also dated as of May 13, 1999,
encumbering the Ship, made by MJQ to secure
its obligations under
the Note (the
"Mortgage"; and collectively, together with
the Note, the "Ship Obligations").
E. Pursuant to
the Master Settlement
Agreement and a
certain Purchase and
Sale Agreement (as defined in the Master
Settlement
Agreement),
ITG agreed to
purchase the Ship Obligations from the Seller for a total
purchase price of
$13,750,000, $9,750,000 of which was due and payable on January 6, 2003 as a
balloon payment (the "Balloon Payment"). ITG was unable to pay the
Balloon
Payment to the Seller as and when due,
and on January 3, 2003, ITG and MJQ
(collectively, the "Debtors") each filed a
voluntary petition for
relief under
Chapter 11 of Title 11 of the United States
Code in the United States Bankruptcy
Court for the Southern District of Florida
(the "Chapter 11 Cases").
F. The Seller is
the holder of 3,746,805 shares of common stock of ITB (the
"ITB Shares"). Pursuant to the Master Settlement
Agreement and a
certain Stock
Purchase Agreement (as defined in the Master Settlement Agreement and as
amended) and certain Stock Option
Agreement,
ITB agreed to
repurchase the ITB
Shares from the Seller for the price of
$.50 per share. In
payment for the ITB
Shares, ITB delivered to the Seller a
certain Promissory Note dated December 13,
2002 in the original principal amount of $1,648,402.50 (the "Stock Note"),
secured by a certain Pledge and Security
Agreement also dated
December 13, 2002
(as amended, the "ITB Security Agreement").
ITB has defaulted in its obligations
under the Stock Note.
G. The Debtors, ITB and the Seller have engaged in good faith in
negotiations with the objective of reaching an agreement with regard to the
Debtors' plan of reorganization in the Chapter 11 Cases (the
"Plan") and the
restructure of ITB's obligations pursuant to the Stock Note. The Seller has
entered into a certain Amendment to Master Settlement Agreement executed
simultaneously herewith (as the same may be
amended, modified or
supplemented,
from time to time, the "Amendment
Agreement") with the
Debtors and ITB pursuant
to which the Seller agreed to restructure
the respective outstanding obligations
of the Debtors and ITB pursuant to the
Master Settlement Agreement, the Purchase
and Sale Agreement, the Stock Purchase Agreement, the Stock Note and Stock
Option Agreement (the "Payment Obligations") on the terms and conditions
described therein.
H. The Seller is
willing to restructure the Payment Obligations pursuant to
the Amendment Agreement on certain conditions. One such condition is that the
Pledgor shall have entered into this
Agreement which replaces and cancels the
Stock Option Agreement as more fully set forth
below. This
Agreement is being
executed and delivered pursuant to Section
9.2 of the Amendment Agreement.
I. Purchaser agrees to purchase all shares of
ITB common stock,
if any,
that Seller may come into possession and control of (the "Future Shares")
(except for shares purchased in the open market or private sale) and, in
Seller's sole discretion, elects to sell
(the "Put Shares").
Agreement
NOW,
THEREFORE,
in consideration of the mutual covenants and
agreements
contained herein, the parties agree as
follows:
1. Requirement
to Purchase Shares.
Subject to the terms of this Agreement,
Seller shall have the right, but no obligation, to sell any Future Shares and
Purchaser hereby agrees to purchase all Put
Shares (i.e. all Future Shares that
Seller elects to sell) for the price per
share set forth in Section 2.
2
<PAGE>
2. Purchase Price. The purchase price per share for the Put Shares
(the
"Purchase Price") shall be U.S. $.50 (fifty
cents). The per share Purchase Price
shall be equitably adjusted in the event of any stock
split, reverse stock
split, recapitalization, reclassification, reorganization or other
transaction
which affects the capital structure of ITB or changes the
number or the nature
of the Put Shares from the date hereof to
the Closing.
3. Notice of Put
Shares. At any time
after the Effective Date of the Plan,
the Trustee may provide written notice to Purchaser of his
election to sell Put
Shares until the earlier of (a) the closing
of Brennan's
bankruptcy
proceeding
under section 350 of the Bankruptcy Code or
(b) all the Secured Obligations have
been indefeasibly paid and/or performed in
full.
4. Payment of Purchase Price. The Purchase Price shall become due and
payable immediately upon the thirtieth (30th) day after the date that all
Secured Obligations have been indefeasibly
paid in full or if such day is not a
Business Day, the next Business Day (the
"Closing Date"). In
the event that the
Purchase Price is equal to or less than the
sum of $50,000, it
shall be paid in
cash on the Closing Date. In the event that the Purchase
Price exceeds the
sum
of $50,000, the Purchase Price shall be
paid by Purchaser on the Closing Date by
the delivery to Seller by Purchaser of its
duly executed
promissory
note (the
"Note") in the principal amount of the Purchase Price with
principal payments
due and payable in annual increments of
$50,000 (the "Incremental Payment") with
the first Incremental Payment due on the Closing Date and all subsequent
Incremental Payments due on each successive
anniversary
date from the
Closing
Date. The last incremental payment of Purchase Price shall be hereinafter
referred to as the Final Payment Date. By
way of example, if the
Purchase Price
shall equal $140,000, Purchaser shall deliver (a) on the
Closing Date the Note
in the amount of $140,000 and make a cash
payment in the amount of $50,000, (b)
on the one year anniversary of the Closing Date, make a cash payment in the
amount of $50,000, and (c) on the two year
anniversary date of the Closing Date,
make a cash payment in the amount of
$40,000 (a/k/a the Final Payment Date).
5. No
Interest. No interest shall accrue on any portion of the
Purchase
Price deferred under Section 4 of this
Agreement.
6. Security for Purchase Price. In the event that any portion of the
Purchase Price is paid by the Note,
Purchaser's obligation
under the Note shall
be secured by all of the Put Shares
and the parties shall enter into a new
security agreement (the "Security
Agreement") on terms
and conditions
mutually
satisfactory to the parties.
7. No
Obligation
of Seller to Take
Shares. The parties
acknowledge
and
agree that this Agreement is not intended
to constitute an election of remedy of
Seller in any action commenced in Brennan's
bankruptcy proceeding.
Seller shall
have no obligation to take possession or
control of Future Shares, regardless of
its ability to do so.
3
<PAGE>
8. Closing.
(a) The closing of the purchase and sale of Put Shares (the
"Closing")
shall take place at the office of Drinker
Biddle & Reath
LLP, 500 Campus Drive,
Florham Park, New Jersey 07932 on the
Closing Date.
(b) If the Purchase Price is $50,000 or less:
(i)
Seller shall
deliver or cause to be delivered to
Purchaser at the Closing the following:
(1) certificates
representing
the Put Shares duly
endorsed for transfer or with duly executed stock powers
affixed thereto; and
(2) a certificate
dated as of the
Closing Date to
the
effect set forth in Section 10.
(ii)
Purchaser shall deliver to Seller the following:
(1) Purchase Price in cash;
(2) a certificate, dated the Closing Date, to the effect
set forth in Section 9; and
4
<PAGE>
(3) a copy of the
resolutions of the board of directors
of
Purchaser authorizing
the execution, delivery and
performance by Purchaser of this Agreement.
(c) If the Purchase Price is more than $50,000:
(i)
Seller shall
deliver or cause to be delivered to
Purchaser the following:
(1) at Closing, a
certificate
dated as of the
Closing
Date to the effect set forth in Section 10; and
(2) at Final Payment Date, certificates representing the
Put Shares
duly endorsed for transfer or with duly
executed stock powers affixed thereto.
(ii)
Purchaser shall deliver to Seller the following:
(1) at Closing, cash in the amount of $50,000;
(2) the Note;
(3) the Security Agreement;
(4) a certificate, dated the Closing Date, to the effect
set forth in Section 9; and
(5) a copy of the
resolutions of the board of directors
of Purchaser
authorizing the
execution,
delivery and
performance by Purchaser of this Agreement.
9. Representations and Warranties of
Purchaser. Purchaser
represents and
warrants to Seller, knowing and intending that Seller is relying
hereon, as
follows:
(a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of
Delaware and has all requisite
corporate power and authority to enter into this
Agreement and to
perform its
obligations hereunder;
(b) The execution,
delivery and
performance of this
Agreement and the
consummation by Purchaser of the
transactions contemplated hereby have been duly
authorized by the Board of Directors of Purchaser, and no other corporate
proceedings on the part of Purchaser are
necessary to authorize
this Agreement
and the transactions contemplated
hereby;
(c) This Agreement has been duly executed and delivered by
Purchaser and
constitutes the legal, valid and binding obligations of Purchaser
enforceable
against Purchaser in accordance with its
terms;
(d) The execution, delivery and performance by P
