CONTRACT FOR THE PURCHASE AND SALE OF REAL ESTATE
AND PERSONAL PROPERTY
This Contract made and entered into this the day of April, 1996, by and
between RIVER PARK HOTEL GROUP, INC., a Mississippi corporation (hereinafter
referred to as "Seller"), and LADY LUCK MISSISSIPPI, INC., a Mississippi
corporation (hereinafter referred to as "Purchaser").
In consideration of the mutual terms, covenants, conditions and
agreements hereinafter contained, and other good and valuable consideration, it
is hereby agreed by and between the parties hereto as follows:
I. SALE OF PROPERTY. Seller agrees to sell, convey, warrant,
assign, transfer and deliver to Purchaser, and the Purchaser agrees
to purchase, acquire and take from Seller the following described
property:
A. All of Seller's right, title and interest in and to that certain
real property used in connection with the operation of the hotel known as the
Best Western River Park (the "Hotel") located in the City of Natchez, Adams
County, Mississippi, more particularly described in Exhibit "A" attached hereto
and incorporated herein by reference, together with all hereditaments, rights,
privileges, franchises, tenements, easements and appurtenances thereunto
belonging or in any way appertaining, and all buildings, structures and
improvements situate thereon, (hereinafter collectively referred to as the
"Subject Premises").
B. All furniture, fixtures (whether actually or
constructively attached), equipment, machinery, fittings,
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appliances and other items of personal property owned by Seller and used in
connection with the operation of the Subject Premises and now located upon the
Subject Premises, except that certain antique Grand Piano located in the lobby
of the Subject Premises as completely and comprehensively described on Exhibit
"B" hereto and incorporated herein by reference.
C. All of Seller's right, title and interest, if any, in and to the
assignable licenses, permits, contracts, guaranties and warranties relating to
the operation of the Subject Premises as completely and comprehensively
described on Exhibit "C" attached hereto and incorporated herein by reference.
D. All of Seller's right, title and interest, if any, in and to the
non-exclusive business and trade name "River Park Hotel" under which the Subject
Premises have been managed and operated.
E. All opened and unopened food, sundry and beverages located at the
Subject Premises and relating to the operation thereof, subject to such
depletions, substitutions and replacements as shall occur and be made in the
ordinary course of business prior to the date of closing.
F. All china, glassware, linens and silverware, as completely and
comprehensively described on Exhibit "B" attached hereto and incorporated herein
by reference, and kitchen and bar small goods, paper goods, guest supplies,
cleaning supplies, operation supplies, printing stationery and uniforms and use
in connection with the operation of the Subject Premises, subject to such
depletions, substitutions and replacements as shall occur and be made in the
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ordinary course of business prior to the date of closing (The property described
in subparagraphs A through F hereof sometimes being referred to as the
"Property").
G. There is specifically reserved from the sale of the Property all
accounts receivable, credit card charges and cash in hand for services rendered
through 6:59 A.M. on April 15, 1996. Further, Seller shall remain responsible
for all accounts payable accruing through 6:59 A.M. on April 15, 1996, and
warrants that Purchaser shall have no liability for said accounts payable.
II. PRICE. The purchase price to be paid by Purchaser to
Seller for the Property shall be FOUR MILLION DOLLARS
($4,000,000.00) (hereinafter referred to as the "Purchase Price"),
payable as follows:
(a) Twenty-Five Thousand Dollars ($25,000.00) cash in earnest money
delivered to Seller contemporaneous with the execution hereof by Seller. The
$25,000.00 deposit shall hereinafter be referred to as the "Earnest Money." If
the transaction contemplated by this contract is consummated in accordance with
the terms hereof, the Earnest Money shall be credited against the cash due at
closing. In the event the transaction contemplated by this contract is not
consummated in accordance with the terms hereof, the Earnest Money shall be
delivered in accordance with Section V hereinafter.
(b) At closing, an additional payment of Nine Hundred Seventy-Five
Thousand Dollars ($975,000.00) shall be due in cash or by federal wire transfer
or other good federal funds to be received by Seller on the date of closing (as
herein defined). There shall
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be deducted from the cash paid to Seller at the time of closing Fifteen Thousand
Dollars ($15,000.00) to be paid toward closing costs, and there shall also be
deducted Seller's pro-rata portion of the real and personal property ad valorem
taxes due for 1996.
(c) At the time of closing, Lady Luck Mississippi, Inc., will execute a
Non-Recourse Promissory Note (the "Note") made payable to Seller in the amount
of Three Million Dollars ($3,000,000.00) and shall execute such security
instruments as are reasonably necessary to pledge the Subject Premises and
Property as security for repayment of said indebtedness. The note shall bear
interest calculated quarterly at the annual rate of 1 1/2% over prime (as
published by the Wall Street Journal or such other national publication agreed
to by the parties), and shall be due and payable as follows:
Commencing three (3) months from the date of the transaction and
continuing on a quarterly basis until such time as the total principal
amount is repaid in full, such payments shall be based on a twenty (20)
year amortization schedule providing equal payments each three month
period based on the outstanding principal amount as of the date of
calculation. Lady Luck shall pay all of the remaining principal
(together with any accrued and unpaid interest) owed on or before the
tenth anniversary of the closing. Notwithstanding the foregoing,
Purchaser shall, at its option, have the right at any time or from time
to time, to repay the principal balance owed at any time without
penalty.
Payments shall be made to Concordia Bank & Trust Company
pursuant to a Loan Servicing Agreement executed between the
parties. The negotiation and execution of such Loan Servicing
Agreement by the parties and Concordia is a condition precedent to
Purchaser's obligations hereunder. The Purchaser hereby
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acknowledges that its title to the premises shall be encumbered by outstanding
debts (the "Existing Debt") owed by Seller to Concordia and that such
indebtedness will not be cancelled at the time of closing and conveyance.
Pursuant to the Loan Servicing Agreement, however, Lady Luck Mississippi, Inc.,
shall make quarterly payments directly to Concordia who will credit to the
account of Seller such funds as are necessary to keep the note current and
disburse the remainder to Seller. The Loan Servicing Agreement shall provide
that so long as Purchaser makes the payments required by the Note, Concordia and
Seller will not exercise any rights or remedies available to them pursuant to
any agreement or understanding relating to the Existing Debt.
III. CLOSING. The closing of the transaction contemplated
herein shall take place on April 15, 1996, or such day prior
thereto as may be mutually agreed upon by Purchaser and Seller,
which day is herein referred to as the "Date of Closing." The
parties can mutually agree to extend the Date of Closing upon
written modification to this contract.
(a) On the Date of Closing, Seller shall execute and deliver to
Purchaser the following documents:
(i) A general warranty deed in recordable form, conveying
Seller's title to the Subject Premises to Purchaser;
(ii) A bill of sale in from reasonably acceptable to
Purchaser's counsel conveying Property as described above;
(iii) An assignment in form reasonably acceptable to Purchaser's
counsel of Seller's interest in the assignable licenses, permits, contracts,
guaranties and warranties listed on
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Exhibit "C", and an assumption, in form reasonably acceptable to Purchaser's
counsel, by Purchaser of all responsibility and liability thereunder existing on
or after the Date of Closing;
(iv) An owner's policy of title insurance covering the
"Subject Premises";
(v) Such documents in a form reasonably acceptable to Purchaser's
counsel of Seller which authorize the sale of the Property to Purchaser and the
execution of closing documents by Seller as are required by the title insurance
company issuing the owner's policy of title insurance;
(vi) Closing Statement; and
(vii) Copies of all books and records relating to the
property in Seller's possession;
(viii) All additional documents and instruments, in the reasonable
discretion of Purchaser's counsel, necessary to properly consummate the
transaction contemplated hereby.
Purchaser hereby agrees to indemnify, defend and hold Seller harmless
from and against all costs, damages and expenses (including attorney's fees)
resulting directly or indirectly from any claim arising out of the matters which
Purchaser is required to assume as of the Date of Closing.
(b) On the Date of Closing, Purchaser shall deliver to
Seller:
(i) The Purchase Price calculated pursuant to Paragraph II
hereof.
(ii) The assignment and assumption of licenses, permits and
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contracts described above;
(iii) Closing Statement;
(iv) Promissory Note, in a form reasonably acceptable to
Purchaser's counsel, in the sum of Three Million Dollars
($3,000,000.00);
(v) Such documents as are reasonably necessary to authorize
fully the purchase of the Property by Purchaser and the execution
of all closing documents;
(vi) Deed of Trust, Security Agreement and UCC documents, in a form
reasonably acceptable to Purchaser's counsel, reasonably necessary to grant to
Seller a security interest in the Subject Premises and Property conveyed to
insure repayment of the Promissory Note.
Purchaser shall execute and deliver such other documents as may be
reasonably required to close and effectuate this transaction in accordance with
the terms and conditions as set forth in this contract.
The obligations of Purchaser hereunder shall be subject to the
satisfaction of the conditions set forth below, any of which may be waived by
Purchaser in writing, to be fulfilled or performed at or prior to the Closing
Date.
(a) Seller shall have performed, in all material respects, all
obligations required to be performed by it under this Contract at or prior to
the Closing date.
(b) Purchaser shall have received a certificate signed on
behalf of Seller by an executive officer of Seller stating that the
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conditions set forth in this Section have been satisfied.
(c) The representations and warranties of Seller contained in
this Contract shall be true and correct in all material respects, both as of the
date when made and as though restated and made again on the Closing Date.
(d) There shall have been no order or preliminary or permanent
injunction entered in any action or proceeding before any governmental entity
including, but not limited to, any court of competent jurisdiction or other
action taken, nor statute, rule, regulation, legislation, interpretation,
judgment or order enacted, entered, enforced, promulgated, amended, issued or
deemed applicable to Seller, the transactions contemplated by this Contract by
any governmental entity and which shall have or would have the effect of (i)
making illegal, materially delaying or otherwise directly or indirectly
restraining or prohibiting the consummation of the transactions contemplated by
this Contract; or (ii) prohibiting or materially limiting the ownership or
operation by Purchaser of all or any material portion of the Subject Premises or
the Property. In addition, none of the above shall be pending or threatened
against Seller which attacks the legality of the transactions contemplated by
this Contract or which seeks preliminary or permanent equitable relief against
such transactions.
(e) A Loan Servicing Agreement by and between Purchaser, Seller and
Concordia shall have been fully executed by all parties thereto and delivered.
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(f) Seller shall have delivered the commitment in a form
reasonably suitable to Purchaser.
(g) Seller shall have provided to Purchaser such bills of sale,
assignments and other instruments of transfer or any other necessary documents,
in form and substance reasonably acceptable to the Purchaser, and sufficient to
transfer ownership of the Subject Premises and the Property, free and clear of
all liens and encumbrances except the Existing Debt.
IV. TAXES. All real and personal ad valorem taxes and
special assessments payable upon the Property shall be pro-rated
between Seller and Purchaser for the tax year in which the Closing
is held on the basis of the tax statement for the immediate prior
tax year.
V. TITLE EXAMINATION AND SURVEY. On or before April ,
1996, Seller shall cause to be furnished to Lady Luck a current
title commitment (the "Commitment") to issue an owner's policy of
title insurance, through a title company mutually acceptable to the
parties hereof, setting forth the status of title to the Subject
Premises and setting forth all exceptions, including liens,
easements, conditions, restrictions, rights-of-way, covenants,
leases, reservations and all other matters affecting the Subject
Premises which would appear as exceptions in the owner's policy of
title insurance to be issued at Closing. In the event any
exceptions appear in the Commitment that are unacceptable to the
Purchaser, then Purchaser shall notify Seller in writing of any
exceptions to which it objects. Thereafter, Seller, at Seller's
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sole option and expense, may correct or remove all title objections and deliver
an amended title Commitment reflecting the correction or deletion of such
matters. In the event Seller fails or refuses to eliminate the objectionable
exceptions to satisfaction of Purchaser, then Purchaser, at its sole discretion,
shall have the option to terminate this agreement and receive a refund of
Twenty- Five Thousand Dollars ($25,000.00) in Earnest Money paid upon the
execution of this contract.
VI. DAMAGE, DESTRUCTION AND CONDEMNATION.
A. In the event that all or any portion of the Property shall
be taken in condemnation or under the right of eminent domain before the Date of
Closing, Purchaser may, at its option, either (i) terminate this contract by
delivering written notice thereof to Seller and receive an immediate refund of
the earnest money, or (ii) proceed to close the transaction contemplated herein
pursuant to the terms hereof, in which event Seller shall deliver to the
Purchaser at the Closing, or as soon as available, any proceeds actually
received by Seller or to be awarded from the Property from such condemnation or
eminent domain proceeding, shall assign to Purchaser any right it may have to
receive proceeds attributable to the Property from such condemnation or eminent
domain proceedings, and there shall be no reduction in the Purchase Price.
B. In the event that all or any portion of the Property shall be
damaged or destroyed by fire or other casualty after the effective date and
before the Date of Closing, Purchaser may, at its option, either (i) terminate
this contract by written notice
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thereof to Seller and receive an immediate refund of the earnest money, or (ii)
proceed to close the transaction contemplated herein pursuant to the terms
hereof, in which event Seller shall deliver to Purchaser at the Closing, or as
soon as available, any insurance proceeds actually received by Seller
attributable to the Property from such casualty, shall assign to Purchaser any
right it may have to receive insurance proceeds attributable to the Property
from such casualty, and there shall be no reduction in the Purchase Price.
C. Purchaser shall have the right to terminate this contract within ten
(10) days after written notice of such damage, destruction or condemnation as
described in the preceding two paragraphs. If Purchaser does not elect to
terminate this contract, the Purchaser shall be obligated to consummate this
transaction as provided.
VII. ASSIGNMENT. Purchaser shall not assign its rights,
duties or obligations under this contract without the prior written
consent of Seller, which approval shall be at the sole discretion
of Seller.
VIII. SURVIVAL. The terms, covenants, conditions,
indemnities, representations, warranties, disclaimers and
agreements of this contract shall survive and remain enforceable
after the Date of Closing, except as expressly provided herein and
shall survive the filing of the deed for record and shall not be
merged therein.
IX. NOTICES. Any notices or elections required or permitted
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to be given or served by any party hereto upon any other party shall be deemed
given or served in accordance with the provisions of this contract if delivered
personally or telecopies (which is confirmed) to the parties at the following
addresses (or at such other address as shall be specified by like notice):
In the case of notices directed to Seller:
River Park Hotel Group, Inc.
c/o Joe Fortunato, President
P.O. Box 1087
Natchez, MS 39121;
Fax:
In the case of notices directed to Purchaser:
Mr. Andrew H. Tompkins
President
Lady Luck Mississippi, Inc.
P.O. Box 1060
Las Vegas, NV 89125.
Fax: 702-477-3003
With a copy to:
Rory J. Reid
Secretary
Lady Luck Mississippi, Inc.
P.O. Box 1060
Las Vegas, NV 89125
Fax: 702-477-3003.
X. ENTIRE CONTRACT, MODIFICATION. This written contract constitutes the
entire, complete agreement between the parties hereto and supersedes any prior
oral or written agreements between the parties with respect to the Property. It
is expressly agreed that there are no verbal understandings or agreements which
in any way change the terms, covenants and conditions herein set forth, and that
no modification of this contract and no waiver of any of its terms and
conditions shall be effective unless made in writing
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and duly executed by the parties hereto.
XI. BINDING EFFECT. All covenants, agreements, warranties,
representations and provisions of this contract shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
XII. CONTROLLING LAW. This contract has been made and
entered into under the laws of the United States of America and the
State of Mississippi, and said law shall control the interpretation
hereof.
XIII. RISK OF LOSS. Between the date hereof and Date of Closing, the
risks and obligations of ownership in loss of the Property and the correlative
rights against insurance carriers and third parties shall belong to the Seller,
but after the Date of Closing, such risks relating to events occurring
subsequent to the Date of Closing shall be borne by Purchaser.
The parties hereto agree that if any of the provisions of this contract
were not performed in accordance with their specific terms or were otherwise
breached irreparable injury would occur, no adequate remedy at law would exist
and damages would be difficult to determine and that the parties shall be
entitled to specific performance on the terms hereof in addition to any other
remedy.
XIV. DELIVERY OF POSSESSION. Possession of the Property
shall be granted to Purchaser no later than the time of Closing.
XV. CONDITION OF PROPERTY. Commencing on the date of this
agreement and extending through the Date of Closing hereunder,
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Seller shall use reasonable best efforts to ensure the Subject Premises and the
Property shall remain in the same condition as on the date hereof, except,
however, wear and tear, condemnation, eminent domain, damage or destruction due
to casualties, acts of God and occurrences over which Seller has no control.
Seller shall also use reasonable best efforts to safeguard the Property. On or
before the Date of Closing, Seller shall provide Purchaser access to the Subject
Premises and the Property so that Purchaser can ascertain the condition of the
Subject Premises and the Property described on Exhibits "B" and "C" hereof.
XVI. ATTORNEY'S FEES. Should either Purchaser or Seller employ an
attorney or attorneys to enforce any of the provisions and conditions hereof, or
to protect any right, title or interest created or evidenced hereby, or to
recover damages for the breach of the terms and conditions hereof, the
non-prevailing party in any action pursued in a court of competent jurisdiction
shall pay to the prevailing party all reasonable costs, damages, and expenses,
including attorney's fees expended or incurred by the prevailing party in trial,
appellate and bankruptcy proceedings.
XVII. Each of the parties hereto represents that to the extent that any
broker's or finder's fee or commission, loan modification fee or other similar
fee is due to any entity or person in connection with any of the transactions
contemplated hereby, then each party shall be responsible for the fee incurred
by them and that the other party shall have no responsibility or liability
therefor.
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XVIII. SELLER'S WARRANTIES. Seller, at the Closing, shall
represent and warrant to Purchaser that:
(a) Seller owns indefeasible title to the Property and is
fully authorized to convey the Subject Premises and Property to
Purchaser;
(b) That there are no existing or pending litigation claims or to the
best knowledge of Seller threatened litigation, with respect to the Property and
as of the Closing Date, no such actions, suits, proceedings or claims are
threatened or asserted; and all work that has been performed in or about the
Subject Premises and all materials furnished in connection therewith have been
paid for in full;
(c) During the period that Seller has owned the Property, there has
been no storage, production, transportation, disposal, treatment or release of
any solid waste, hazardous waste, toxic substance or any other pollutants or
contaminants on or in the Subject Premises, and that Seller has complied with
all applicable local, state or federal environmental laws and regulations.
Further, there are no wells, underground storage tanks, covered surface
impoundments or other sources of environmental pollutants or contaminants on the
Property and has received no oral or written communication from any party that
alleges Seller and the Hotel are not in compliance with such laws;
(d) That Seller has no knowledge of any roadway easements
across the land for the purposes of providing access to adjoining
properties;
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(e) Seller has no knowledge of any condemnation proceedings
having been instituted or threatened against the Property;
(f) Seller is a corporation duly organized, validly existing and in
good standing under the laws of Mississippi, and has all the requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Seller has all requisite power and authority to enter
into this contract and to consummate the transactions contemplated hereby, and
is duly qualified and in good standing to do business in each jurisdiction in
which it is required by law to be so qualified. This contract and the deeds,
bills of sale, assignments and the other agreements and instruments of transfer
to be executed on behalf of Seller and delivered to Purchaser in consummation of
the transactions contemplated hereby have been (or, upon execution and delivery,
shall have been) duly executed and delivered, have been effectively authorized
by all necessary action, and the legal, valid and binding obligations of Seller
enforceable against Seller in accordance with their terms;
(g) The execution and delivery of this contract, the consummation of
the transactions contemplated hereby and the fulfillment of the terms hereof
will not (i) constitute, with or without the giving of notice or passage of
time, or both, a breach of any of the terms or provisions of, or a default
under, any agreement, indenture or other instrument to which Seller is a party,
(ii) result in the creation of any claim, lien, encumbrance, security interest,
restriction or other charge upon the Subject
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Premises or the Property, or (iii) violate any judgment, decree, order or award
of any court, governmental body or arbitrator binding upon or affecting Seller
or any of its Property;
(h) No consent, approval or authorization prescribed by any law,
statute, rule or regulation, or by any agreement to which Seller is a party, or
by which Seller or its property or business is bound or affected, is required in
order to permit the consummation of the transactions contemplated by this
Seller;
(i) Seller holds all permits, licenses, warranties, exemptions, orders
and approvals of all governmental entities necessary for the lawful conduct of
the Hotel operation is in compliance with the terms of the Permits. No
investigation or review by any governmental entity with respect to the Hotel is
pending or threatened, nor has any governmental entity indicated an intention to
conduct the same;
(j) Except as disclosed on Exhibit "C" attached hereto, Seller is not a
party to or is not bound by any contract or agreement which will or could bind
the Company or affect or relate to the Hotel or the Subject Premises or the
Property after the Closing Date;
(k) The Seller's Subject Premises is in compliance with all applicable
zoning, building, health, fire, water, use or similar statutes, codes,
ordinances, laws, rules or regulations. The zoning of each parcel of Subject
Premises permits the existing improvements and the continuation following
consummation of the transaction contemplated hereby of the Hotel business as
presently
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conducted thereon.
XIX. CAPITAL IMPROVEMENTS. During the period of time that the Seller
retains a security interest in the subject premises and Property, Purchaser
agrees to expend no less than three percent (3%) of the gross revenues generated
by the Hotel or Fifty Thousand Dollars ($50,000.00), whichever is greater, for
capital improvements to the Subject Premises and the Property and shall provide
Seller verification of that expenditure on an annual basis. In the event that
Purchaser fails to make such expenditures for capital improvements, such failure
shall constitute a default under the deed of trust which will trigger remedies
available to Seller as provided in said deed of trust.
Seller hereby agrees to indemnify and hold harmless the Purchaser and
its affiliates, directors, officers and agents from and against any and all
costs, losses, liabilities, damages, claims or expenses incurred by any of them
arising out of or resulting from:
(a) Any misrepresentation, breach of any warranty, or the
non-fulfillment of any obligation or covenant made by Seller in this contract or
the exhibits annexed hereto in connection with this contract or the transaction
contemplation hereby;
(b) Any liability, obligation or commitment of Seller (whether known or
unknown, fixed or contingent, due or to become due) not expressly assumed by the
Purchaser including, but not limited to, (i) any and all liabilities, direct or
indirect, absolute or contingent for taxes (A) of Seller or any member of the
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affiliated group of which Seller is a member, whether or not incurred prior to
the Closing Date, or (B) incurred in connection with the operation of the Hotel
prior to the Closing Date, including, without limitation, any property, sales or
other taxes which are not due or assessed until after the Closing Date but which
are attributable to any period prior to and including the Closing Date, and (ii)
except as otherwise provided herein, any and all taxes due as a result of the
transactions contemplated by the contract;
(c) Any liability (whether contingent, liquidated or otherwise) that
the Purchaser may incur as result of any failure of Seller to comply with any
United States federal, state or local laws regarding bulk sales or transfers as
such laws relate to the Hotel; and
(d) Any failure of Seller to comply with the continued health care
requirements of COBRA with respect to qualifying events occurring up through and
including the Closing Date.
SELLER:
RIVER PARK HOTEL GROUP, INC.
BY:/s/Joe Fortunato
Joe Fortunato, President
PURCHASER:
LADY LUCK MISSISSIPPI, INC.
BY:/s/Rory J. Reid
Rory J. Reid, Secretary
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STATE OF MISSISSIPPI
COUNTY OF ADAMS
Personally appeared before me, the undersigned authority in and for
said county and state, on this day of , 1996, within my jurisdiction, the within
named JOE FORTUNATO, who acknowledged that he is President of RIVER PARK HOTEL
GROUP, INC., a Mississippi corporation, and that for and on behalf of said
corporation and as its act and deed, he executed the above and foregoing
instrument, after first having been duly authorized by said corporation so to
do.
Notary Public
MY COMMISSION EXPIRES:
STATE OF
COUNTY OF
Personally appeared before me, the undersigned authority in and for
said county and state, on this day of , 1996, within my jurisdiction, the within
named RORY J. REID, who acknowledged that he is Secretary of LADY LUCK
MISSISSIPPI, INC., a Mississippi corporation, and that for and on behalf of said
corporation and as its act and deed, he executed the above and foregoing
instrument, after first having been duly authorized by said corporation so to
do.
Notary Public
MY COMMISSION EXPIRES:
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