AGREEMENT
AGREEMENT, dated as of November 29, 1995, among THE CLARIDGE
HOTEL AND CASINO CORPORATION, a New York corporation ("CHCC"), ATLANTIC CITY
BOARDWALK ASSOCIATES, L.P., a New Jersey limited partnership (the
"Partnership"), and THE CLARIDGE AT PARK PLACE, INCORPORATED, a New Jersey
corporation ("CPPI").
WHEREAS, it is proposed that CHCC, the Partnership, The
Claridge of Park Place, Incorporated ("CPPI") and Philip J. Dion, as Trustee for
the Valley of the Sun United Way (the "Seller"), enter into an Option Agreement
(the "Option Agreement"), dated as of November 29, 1995, providing for the
purchase by CHCC from the Seller of the Webb Payment (terms not defined herein
shall have the meanings given to them in the Option Agreement); and
WHEREAS, CPPI is a wholly owned subsidiary of CHCC; and
WHEREAS, CHCC desires to enter into the Option Agreement and,
upon exercise of the Option provided for therein, purchase the Webb Payment.
WHEREAS, CHCC has advised the Partnership that CHCC cannot and
will not take such actions unless the Partnership participates in such
transaction in accordance with the terms described herein.
WHEREAS, the Partnership is willing to provide such assurances
to CHCC as are provided herein.
NOW, THEREFORE, in consideration of the foregoing and the
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. As an inducement for CHCC and CPPI to enter into the Option
Agreement, and, upon the terms and conditions set forth in the Option Agreement,
to purchase the Option granted thereby and, upon exercise of the Option in
accordance with the provisions set forth herein, to purchase the Webb Payment,
the Partnership agrees as follows:
(a) Upon payment by CHCC of the Option Price and upon
receipt of all necessary approvals, paragraph (ii) under Section 1(b) of the
Third Amendment to Operating Lease and Expansion Operating Lease, dated as of
August 1, 1991 (the "Third Amendment"), between the Partnership and CPPI shall
be amended to read in its entirety as follows:
(ii) the aggregate Abatement shall not exceed
$39,320,000 for the period commencing on January 1,
1991 and ending on December 31, 1998; and
(b) If CHCC notifies the Partnership in writing of CHCC's
intention to exercise the Option before the date upon which the Option is
exercised (and if the Partnership does not object to such exercise pursuant to
Section 3 hereof), the Partnership shall (i) pay to CHCC or at the direction of
CHCC, as the portion of the Purchase Price of the Option being paid by the
Partnership, at least one day before the Purchase Price is to be paid to the
Escrow Agent pursuant to Section 2.3 of the Option Agreement, an amount equal to
the lesser of (x) $2,000,000 and (y) such portion of the cash that the
Partnership then has on hand as is not required by the Partnership to pay its
current operating expenses (together with a reasonable reserve therefor), and
(ii) no later than 14 days after payment of the Purchase Price to the Escrow
Agent pursuant to Section 2.3 of the Option Agreement, deposit in the
Distributing Trust such portion of the cash that the Partnership then has on
hand (after making the payment provided for in clause (i) of this sentence) as
is not required by the Partnership to pay its current operating expenses
(together with a reasonable reserve therefor) and does not exceed the amount to
be deposited (the "Required Amount") in the Distributing Trust pursuant to
Section 4(a) of the Escrow Agreement (the aggregate amounts so paid by the
Partnership pursuant to clauses (i) and (ii) of this sentence being referred to
as the "Contribution"); provided, however, that, if the amount to be deposited
by the Partnership pursuant to clause (ii) of this sentence is less than the
Required Amount, then the Partnership shall have no obligation to make such
deposit unless it has received from CHCC a written certification that CHCC or
CPPI has deposited with the Distributing Trust an amount equal to the excess of
the Required Amount over the amount to be deposited by the Partnership pursuant
to clause (ii) (and the Partnership and CHCC shall consult with each other to
assure that their respective deposits under this proviso are made in the
appropriate amounts and on a timely basis).
(c) If CHCC gives the Partnership the notice contemplated
by Section 1(b) and if the Escrow Agent delivers the Assignment Instrument to
CHCC pursuant to Section 4(a) of the Escrow Agreement, then paragraph (ii) under
Section 1(b) of the Third Amendment shall, upon receipt of all necessary
approvals, be amended to change the dollar amount therein, as amended as
provided in Section 1(a) hereof, from $39,320,000 to an amount equal to the sum
of (x) $39,320,000 plus (y) the excess, if any, of (i) the quotient of (A) the
sum of (1) the Purchase Price, plus (2) the Required Amount divided by (B) two
over (ii) the Contribution.
(d) If the Escrow Agent returns to CHCC any amount
supplied by the Partnership for deposit with the Escrow Agent pursuant to
Section 1(b) hereof, CHCC shall promptly return such amount to the Partnership.
2. As an inducement for the Partnership to execute the Option
Agreement, it is agreed that if the Escrow Agent delivers the Assignment
Instrument to CHCC pursuant to Section 4(a) of the Escrow Agreement, then CHCC
shall take such action as is appropriate to cancel the Webb Payment so that if
and when, after the Escrow Agent makes the delivery of the Assignment Instrument
pursuant to Section 4(a) of the Escrow Agreement, the Partnership, CHCC or CPPI
deposits any amount in the Distributing Trust, no portion of the amount so
deposited will be paid to CHCC, in its capacity as holder of the Webb Payment.
3. As an inducement for the Partnership to execute the Option
Agreement, it is agreed that, if CHCC gives the Partnership the notice
contemplated by Section 1(b) hereof, CHCC shall not exercise the Option unless
at least thirty days before the date on which CHCC intends to exercise the
Option, CHCC gives written notice of such intent to the Partnership and the
Partnership does not, within such thirty-day period, notify CHCC in writing of
its objection to such exercise.
4. As an inducement for the Partnership to execute the Option
Agreement, it is agreed that on or before December 31, 1999, CHCC and the
Partnership will engage in good faith negotiations with a view to reaching a
mutually satisfactory agreement regarding payment of the amounts due, or
extension of the time for payment of the amounts due, under the [expandable
wraparound mortgage due 2000].
5. CHCC agrees to indemnify the General Partners of the
Partnership on demand against, and hold each such person harmless from, all
losses, judgments, amounts paid in settlement of actions, all claims,
liabilities, taxes, cost, damages and expenses (including but not limited to
reasonable attorneys' fees and disbursements) as incurred, accruing from or
resulting by reason of any action, proceeding or claim arising out of the
execution and delivery of the Option Agreement or this Agreement or any
transaction contemplated by the Option Agreement or this Agreement. CPPI,
acknowledging that it is a creditor of the Partnership, consents to the payments
to be made by the Partnership hereunder.
6. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof, and no party shall be liable or bound to the other in any manner by any
warranties, representations or covenants except as specifically set forth
herein.
7. Assignment. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors, however such succession is effected and whether or not
such succession is permitted by this Agreement (including any succession that
may occur by sale of securities or assets, assignment, merger, reverse merger,
consolidation, operation of law or, without limitation, otherwise), provided
that no such succession will relieve any party of its obligations under this
Agreement. Neither this Agreement, nor any of the rights or obligations
hereunder, may be assigned by either party to this Agreement without the written
consent of the other party hereto.
8. Notices and Other Communications. Any notice or other
communication required or permitted to be given under this Agreement must be in
writing and will be deemed effective when delivered in person or sent by
facsimile, cable, telegram or telex, or by overnight delivery service or by
registered or certified mail, postage prepaid, return receipt requested, to the
following addresses:
If to the Buyer to:
The Claridge Hotel and Casino Corporation
Boardwalk & Park Place
Atlantic City, New Jersey 08401
Attention: Frank A. Bellis, Jr., Esq.
Telephone: (609) 340-3400
Telecopier: (609) 340-3589
With a copy to:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Leonard B. Mackey, Jr., Esq.
Telephone: (212) 878-8489
Telecopier: (212) 878-8375
If to the Partnership:
Atlantic City Boardwalk Associates, L.P.
2880 W. Meade Avenue
Suite 204
Las Vegas, Nevada 89102
Attention: Anthony C. Atchley
Telephone: (702) 253-7662
Telecopier: (702) 253-7663
With a copy to:
Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
65 Livingston Avenue
Roseland, New Jersey 07068
Attention: Peter H. Ehrenberg
Telephone: (201) 992-8700
Telecopier: (201) 992-5820
The parties to this Agreement may change the address to which notices or other
communications are to be sent by a notice to the other given as provided in this
Section 8.
9. Amendment and Waiver. Any provision of this Agreement may
be amended and the observance of any term hereof may be waived (either
prospectively or retroactively and either generally or in a particular instance)
only by a document in writing signed by the parties to this Agreement who are
entitled to the benefit thereof.
10. Governing Law. This Agreement will be governed by, and
construed under, the laws of the State of New York.
11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same agreement.
12. New Jersey Casino Control Act. Notwithstanding anything to
the contrary contained in this Agreement, this Agreement shall be deemed to
include all provisions required by the New Jersey Casino Control Act (the
"Act"), and shall be conditioned upon the approval of the CCC. To the extent
that anything in this Agreement is inconsistent with the Act, the provisions of
the Act shall govern. All provisions of the Act, to the extent required by law
to be included in this Agreement, are incorporated by reference as if fully
restated in this Agreement.
13. No Personal Liability. Each of the parties hereto hereby
acknowledges that none of the General Partners of the Partnership shall have any
personal liability or other obligation with respect to any agreement or
obligation of the Partnership under this Agreement, any such liability or
obligation being payable solely out of any assets the Partnership may from time
to time have available therefor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
THE CLARIDGE HOTEL AND CASINO CORPORATION
By: _____________________________________
Name:
Title:
ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.
By: ____________________________________
Name: Anthony Atchley
Title: General Partner
By: ____________________________________
Name: Gerald C. Heetland
Title: General Partner
THE CLARIDGE AT PARK PLACE, INCORPORATED
By:_____________________________________
Name:
Title: