Exhibit No. 10.7 to Form 8-K dated July 12, 1996 File No. 0-25022
------------------------------------------------ ----------------
A S S E T P U R C H A S E A G R E E M E N T
This Asset Purchase Agreement ("Agreement") is made and entered into this
July 12, 1996 by and among CASINO CASINO PLC, a company organized in the Island
of Nevis under Section 4(6) of the Nevis Business Corporation Ordinance 1984, as
amended, whose address is P.O. Box 556, Main Street, Charlestown, Nevis, as the
Seller (the "Seller"); and CHELSEA ATWATER, INC., a Nevada corporation whose
address is 90 Madison, Suite 707, Denver, Colorado 80206, as Purchaser
("Chelsea").
RECITALS:
A. West Indies Casinos and Consultants Limited, a limited liability
company organized in St. Vincent and the Grenadines under the provisions of the
Companies Act, Chapter 219 ("Landlord"), owns in fee simple that certain
property described as all that part or portion of the main building situated at
the town of Peniston, on a portion of the Peniston Estate in the Parish of St.
Andrew in the State of St. Vincent and the Grenadines, being the portion of the
buildings there situated known as the Emerald Valley Resort and Casino in which
a gambling casino is operated known as "Casino Peniston", including the bar area
lounge, rooms, restrooms, office and the generator room, and including all
gaming table apparatus, cutlery, furniture, fixtures and equipment
(collectively, the "Casino Premises"), together with the immediate curtilage and
the front gardens and lawn and the first buildings which contain Chalets 7/8,
9/10 and 11/12, including all furniture, fixtures, equipment and bedding. All
such premises, including the Casino Premises, are hereinafter referred to as the
"Demised Premises."
B. Emerald Isle Casino Limited, a limited liability company organized in
St. Vincent and the Grenadines under the provisions of the Companies Act,
Chapter 219 ("Emerald Isle"), holds a valid gaming license granted under the
relevant laws of St. Vincent and the Grenadines to operate a casino and gaming
operations on the Casino Premises (the "License").
C. Pursuant to that certain Lease dated December 31, 1994, among Landlord,
Emerald Isle and the San Jose Group, an unincorporated partnership of Thomas
Evans and Richard C. Ayers ("San Jose Group"), as tenant, the San Jose Group was
granted a lease of (i) the Demised Premises generally and of the Casino Premises
specifically, and (ii) the License itself and all right of Emerald Isle to
operate a casino or gaming operations on the Casino Premises or elsewhere
pursuant to the License, all for six (6) one-year periods commencing with the
year beginning on February 1, 1995 and ending January 31, 1996, and for the five
(5) suceeding one-year periods thereafter, ending on January 31, 2000 (the
"Premises and Casino Lease").
D. San Jose Group has, by instrument dated February 1, 1995, assigned to
E.V.A. LIMITED, a limited liability company organized in St. Vincent and the
Grenadines under the provisions of the Companies Act, Chapter 219 ("EVA"), all
of its rights whatever in, to and under the Premises and Casino Lease (the
"Lease Assignment").
E. Pursuant to that certain Option to Purchase dated June 26, 1996,
between EVA and Seller, EVA granted to Seller an option for a period of eighteen
months (the "Option") to purchase, for the sum of US$500,000.00 in cash (the
"Exercise Price"), a direct assignment by EVA of the Premises and Casino Lease,
or alternatively, to purchase for such sum all of the issued and outstanding
shares of capital stock of EVA, excepting such nominal number of those shares as
may be required by law or otherwise to be retained by citizens or residents of
St. Vincent and the Grenadines (the "EVA Option Shares").
F. Pursuant to that certain Management Agreement dated June 26, 1996,
between EVA and Seller ("Management Agreement"), EVA appointed Seller for an
eighteen-month period as the sole and exclusive manager for the purposes of
operating and managing the sports betting portion of the casino business carried
on by EVA at Casino Peniston pursuant to the Casino License (the "Sportsbook").
G. WHEREAS, Chelsea desires to buy from Seller, and Seller desires to
sell and assign to Chelsea, or a wholly owned subsidiary of Chelsea, upon the
terms and subject to the conditions of this Agreement, all of Seller's rights
and obligations under the Management Agreement and Option.
H. WHEREAS, the respective boards of directors of Chelsea and Seller
have approved the execution of this Agreement and performance of their
respective obligations hereunder.
NOW THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, and
subject to the terms and conditions of this Agreement, the parties hereto agree
as follows:
1. PURCHASE AND SALE.
1.01 Assets to be Sold and Purchased. (a) Subject to and upon the terms
and conditions of this Agreement, at the closing Seller shall sell, transfer,
assign, convey and deliver to Chelsea or Chelsea's wholly owned subsidiary, free
and clear of all adverse claims, security interests, liens, claims and
encumbrances (other than as specifically agreed to herein by Chelsea), and
Chelsea or its subsidiary shall purchase, accept and acquire from Seller, all of
Seller's rights and obligations under the Option and Management Agreement (the
"Assets") except the retained interest described below. This purchase and sale
transaction is sometimes referred to herein as the "Purchase". Chelsea shall
receive good and merchantable title to the Assets. In full payment for the
Assets, Chelsea shall sell, issue and deliver to Seller the following
securities:
(i) 239,007 shares of the authorized but heretofore unissued common
stock of Chelsea, $.001 par value per share (the "Exchange Shares"); and
(ii) options (the "Exchange Options") to purchase an aggregate of
900,000 shares of the authorized but heretofore unissued common stock of
Chelsea, $.001 par value per share (the "Exchange Option Shares"), as more
particularly described below:
(A) Options to purchase 300,000 shares, exercisable from the
date of issuance through July 7, 1999 at a price of US$2.50 per
share, subject to adjustment; and
(B) Options to purchase 300,000 shares, exercisable from the
date of issuance through July 7, 2001 at a price of US$5.00 per
share, subject to adjustment; and
(C) Options to purchase 300,000 shares, exercisable from the
date of issuance through July 7, 2002 at a price of US$10.00 per
share, subject to adjustment.
(b) In order to exercise the Exchange Options, holders thereof shall
be required, unless waived by the Company, to give the Company not less than
sixty-five (65) days' written notice prior to such exercise. Otherwise, any
attempted exercise shall be effective only upon the earlier of (i) 65 days from
the date the exercising holder originally notified the Company in writing of his
intent to exercise, or (ii) if the holder gave no prior notice of intent to
exercise to the Company, 65 days from the date of the Company's receipt of the
exercise, which shall be treated as the required notice and shall not be
effective as an exercise until the lapse of the 65-day period from the Company's
receipt thereof.
(c) The number of Exchange Option Shares purchasable upon exercise
of any Exchange Options will be subject to adjustment if the Company is
reorganized, merged, consolidated or party to a plan of exchange with another
corporation pursuant to which shareholders of the Company receive any shares of
stock or other securities, or in the event of any sale or other transfer of all
or substantially all of the Company's assets, or in case of any reclassification
of Company's common stock. Holders of Exchange Options shall be entitled, after
the occurrence of any such event, to receive on exercise thereof the kind and
amount of shares of stock or other securities, cash or other property receivable
upon such event by a holder of the number of Common Shares issuable upon
exercise of the Exchange Option immediately prior to occurrence of the event. In
addition, the number of Exchange Option Shares issuable will be appropriately
adjusted if the Company's common stock is split or combined.
(d) The Exchange Shares and Exchange Options together constitute the
entire Purchase Price and consideration payable for the Assets. Seller shall
execute under seal and deliver to Chelsea a formal assignment of the Option and
Management Agreement. The Exchange Shares shall not be subject to any preemptive
rights, options or similar rights on the part of any shareholder or creditor of
Chelsea or any other person. Seller acknowledges the sufficiency of the Purchase
Price. Seller acknowledges that the Purchase will not qualify as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended, or
applicable tax laws of the Island of Nevis, and Seller shall be responsible for
any income or other taxes payable by it in respect of the sale of the Assets.
Upon consummation of the Closing, Seller shall have no further rights in or
claims as to the Assets and shall have only the rights of shareholders and
option holders of Chelsea.
1.02 Exchange Shares not Registered. (a) Seller acknowledges and agrees
that the Exchange Shares and Exchange Options have not been registered under the
Securities Act of 1933, as amended ("Act"), but are being sold and issued in
reliance upon exemptions from registration provided by Rule 903(c)(2) of
Regulation S under the Act, on the grounds that the Purchase does not involve
any offer or sale of the Exchange Shares, Exchange Options or Exchange Option
Shares within the United States of America or to any "U.S. Person", as defined
in Regulation S.
(b) It is intended that the Exchange Shares and Exchange Options
will be distributed by Seller to its shareholders of record, none of which is a
U.S. Person ("Shareholders"). Each Shareholder must acquire the Exchange Shares
and Exchange Options for his, her or its own account, with no intent to evade
the registration requirements of the Act. Each Shareholder shall be required,
prior to receiving any Exchange Shares or Exchange Options, to execute and
deliver to Chelsea a subscription agreement in customary form prepared by
Chelsea. The Exchange Shares and Exchange Options shall be subject to a 40-day
restricted period, which shall commence on the date that the offering of
Exchange Shares and Exchange Options is deemed to be completed; and during such
40-day restricted period, neither the Exchange Shares, Exchange Options nor any
Exchange Share Options may be offered or sold within the United States nor to
any U.S. Person.
1.03 No Restrictive Legend. Certificates evidencing Exchange Shares,
Exchange Options and Exchange Option Shares shall not bear any form of
investment or other legend.
1.04 Reservation of Retained Interest. Notwithstanding paragraph (a)
preceding or any other provision of this Agreement, Seller shall retain forever
and shall not be deemed to transfer as part of the Assets the right to eight
percent (8%) of the net revenues produced by the Sportsbook, as such term is
defined in the Management Agreement, and actually paid to and received by
Chelsea (the "Retained Interest"). The term "net revenues" means revenues to
Chelsea after payment or deduction of all payouts to winning bettors, all
expenses, charges and reserves, any other revenue interests granted by Chelsea
and any other revenue or net revenue burdens, such as payments to licensees. The
Retained Interest shall not affect or apply to any part of the operations of
Casino Peniston whatsoever other than Sportsbook operations thereof or apply to
any other operations or revenues of Chelsea whasotever.
1.05 Closing. Subject to the conditions precedent set forth herein, the
closing of all transactions herein contemplated ("Closing") shall occur at a
place and time and on a date established by mutual agreement of the parties.
This Agreement shall be effective and binding when signed by all parties.
1.06 Certain Filings. Seller acknowledges that Chelsea is subject to
the reporting and informational requirements of the Securities Exchange Act of
1934, as amended ("Exchange Act") and that certain filings with the U.S.
Securities and Exchange Commission ("Commission) may be necessary in relation to
the purchase of Assets. Seller further acknowledges that it will be required to
file with the Commission, within 10 days of issuance of the Exchange Shares, a
report of beneficial ownership on Form 3, unless the Exchange Shares and
Exchange Options are transferred as soon as possible to the shareholders of
Seller.
1.07 Continuing Obligation of Seller. The parties acknowledge and agree
that the purpose of this Agreement and related agreements is to irrevocably
convey and deliver to Chelsea all existing and potential rights of Seller under
the Option and Management Agreement. Seller therefore agrees to execute and
deliver to Chelsea such other or further agreements or instruments as may become
necessary to accomplish the intent of the parties herein.
1.08 Consent of Shareholders. Should the consent of Seller's shareholders
be deemed for any reason be deemed necessary for the sale of the Assets, Seller
shall take such lawful steps as may be necessary to obtain such consent and
affirmatively represents and warrants to Chelsea that such consent has been
obtained informally and can be formally obtained without undue delay or expense.
2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents
and warrants to Chelsea that the following are true and correct as of the date
hereof and will be true and correct through the Closing Date as if made on that
date:
(a) Seller is a company duly organized in the Island of Nevis under
Section 4(6) of the Nevis Business Corporation Ordinance 1984, as amended,
validly existing and in good standing under the provisions of such law, with all
requisite power and authority to carry on the business in which it is engaged,
to have and hold the Option and Management Agreement in accordance with their
respective terms. Seller is not a public company and its shares are not publicly
quoted or traded.
(b) As of the effective date of this Agreement, the authorized
capital stock of Seller consists of 20,000,000 shares of common stock, $.0001
each, of which 1,000,000 shares are issued and outstanding, all of which are
validly issued, fully paid and nonassessable. Chelsea shall be given a current
list of the registered holders of all such outstanding shares and the number of
shares held by each. No shares of preferred stock are authorized or outstanding.
(c) There are no claims, actions, suits, proceedings or
investigations of any kind pending or threatened against or affecting Seller or
any of its properties or assets or business anywhere in the world.
(d) The Option to Purchase and Management Agreement were duly
executed and consummated and were duly approved by all requisite corporate
action of EVA and are in full force and effect and are not in default in any
way.
(e) To the best of Seller's knowledge, EVA has complied in all
material respects with the Premises and Casino Lease and the Casino License and
all applicable laws, regulations and rules, applicable to the Demised Premises,
the Casino Premises and the business of Casino Peniston.
(f) No consent, approval, authorization or order of any court, or
other agency or authority of the Island of Nevis or of St. Vincent and the
Grenadines is required for Seller to execute, deliver or consummate this
Agreement or sell or deliver the Assets.
(g) All originals and/or copies of Seller's Memorandum of
Association and Articles of Association, each as amended to date, and all
minutes of meetings and written consents in lieu of meetings of shareholders,
directors and committees of directors of Seller, financial data, and any and all
other documents, material, data, files, or information which have been or will
be furnished to Chelsea, are and will be true, complete, correct and unmodified
originals and/or copies of such documents, information, data, files or material.
(h) Prior to the consummation of the proposed Purchase, the Seller
shall not, without the prior written consent of Chelsea, make or consent to any
changes in either the Option or Management Agreement.
(i) No shareholder of record or person known to Seller to be a
beneficial owner of Seller's capital stock or to have a beneficial ownership
interest in or to Seller's capital stock is a "U.S. Person" as such term is
defined in Rule 902(o) of Regulation S under the Act.
(j) The sale of the Assets will not constitute a sale of all or
substantially all of Seller's assets or constitute a "bulk sale" of Seller's
assets, and no prior or subsequent approval of the sale or delivery of the
Assets by Seller's shareholders will be necessary for any purpose.
(k) Seller agrees to make available to Chelsea access to any and all
corporate and financial files and records of Seller for inspection prior to
Closing.
3. REPRESENTATIONS AND WARRANTIES OF CHELSEA. Unless specifically stated
otherwise in this Agreement, Chelsea represents and warrants to Seller that the
following are true and correct as of the date hereof and will be true and
correct through the Closing Date as if made on that date.
(a) The Exchange Shares, Exchange Options and Exchange Option Shares
will be, when issued, validly issued, fully paid and nonassessable, the sale,
issuance and delivery thereof on the terms herein contemplated has been
authorized by all requisite corporate action of Chelsea, and that such shares
will not be be subject to any preemptive rights, options or similar rights on
the part of any shareholder or creditor of Chelsea or any other person.
(b) Chelsea is and on the Closing Date will be duly organized, validly
existing and in good standing under the laws of the State of Nevada, with all
requisite power and authority to carry on the business in which it is engaged,
to own the properties and assets it owns, and is duly qualified and licensed to
do business and is in good standing in all jurisdictions where the nature of its
business makes such qualification necessary.
(c) As provided in its Articles of Incorporation, the authorized
capital stock of Chelsea consists of 50,000,000 common shares, US$.001 par
value, of which 622,649 common shares have been issued and are outstanding; and
5,000,000 preferred shares, par value US$.001, none of which has been issued or
are outstanding.
(d) Except as disclosed in writing to Seller, Chelsea has no
outstanding warrants, options or similar rights to subscribe for or purchase
shares of its capital stock (nor any securities convertible into or exchangeable
for its capital stock), nor are there any other securities outstanding
convertible into or exchangeable for its common stock, and there are no
contracts or commitments pursuant to which any person may acquire or Chelsea may
become bound to issue any shares of its capital stock.
(e) There are no claims, actions, suits, proceedings or investigations
pending or threatened against or affecting Chelsea in any court or by or before
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or other instrumentality, domestic or foreign, or
arbitration tribunal or other forum. There are no judgments, decrees,
injunctions, writs, orders or other mandates outstanding to which Chelsea is a
party or by which it is bound or affected.
(f) Chelsea will provide to Seller Chelsea's audited balance sheet and
the other financial statements of Chelsea for such periods as Seller's
reasonably requests. All such statements shall fairly present the assets,
liabilities and financial condition of Chelsea as of the respective dates
thereof, and all shall have been prepared in conformity with generally accepted
accounting principles, consistently applied during the periods covered. For
purposes of this Agreement, such statements shall include all notes thereto.
(g) Chelsea has not incurred any liabilities or obligations whatever
(whether direct, indirect, accrued, contingent, absolute, secured or unsecured
or otherwise), which singly or in the aggregate are material to its assets,
operations or financial condition, except as reflected in Chelsea's financial
statements or disclosed in writing to Seller.
(h) All income, excise, unemployment, social security, occupational,
franchise and other taxes, duties, assessments or charges levied, assessed or
imposed upon Chelsea by the United States or by any state or municipal
government or subdivision or instrumentality thereof have been duly paid or
adequately provided for, and all required tax returns or reports concerning any
such items have been duly filed or will be so filed.
(i) The execution, delivery and performance by Chelsea of this
Agreement and any other agreements contemplated hereby, and the consummation of
the transactions contemplated hereby and thereby, have been duly authorized by
all requisite corporate action of Chelsea. This Agreement and any other
agreement contemplated hereby have been or will be as of the Closing Date duly
executed and delivered by Chelsea and constitutes and will constitute legal,
valid and binding obligations of Chelsea, enforceable against it in accordance
with their respective terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies. The approval of Chelsea's shareholders is
not necessary for Chelsea's execution and performance of this Agreement.
(j) No consent, approval, authorization or order of any court or
governmental agency or other body is required for Chelsea to execute and perform
its obligations under this Agreement. Neither the execution, delivery,
consummation or performance of this Agreement shall conflict with, constitute a
breach of Chelsea's articles of incorporation and bylaws, as amended to date, or
any note, mortgage, indenture, deed of trust or other agreement of instrument to
which Chelsea is a party or by which it is bound nor, to the best of Chelsea's
knowledge and belief, any existing law, rule, regulation, or any decree of any
court or governmental department, agency, commission, board or bureau, domestic
or foreign, having jurisdiction over Chelsea.
(k) Chelsea is subject to the reporting and information requirements
of Section 13 of the Exchange Act, and is current in all filings required
thereunder.
(l) The execution and performance of this Agreement and compliance
with the provisions hereof will not violate, with or without giving notice
and/or the passage of time, any provisions of law applicable to Chelsea. All
statements made by Chelsea in this Agreement, or in any exhibit or schedule
hereto, or in any document or certificate executed and delivered herewith, are
true, correct and complete as of the date of this Agreement and will be so as of
the Closing Date. All copies of documents provided and to be provided by Chelsea
are and shall be true and correct copies of such documents.
4. CONDITIONS TO OBLIGATIONS OF THE PARTIES; DELIVERIES. All obligations
of the parties under this Agreement are subject to the fulfillment, prior to the
Closing, of all conditions precedent and to performance of all covenants and
agreements and completion of all deliveries contemplated herein, unless
specifically waived in writing by the party entitled to performance or to demand
fulfillment of the covenant or delivery of the documents. Chelsea's obligations
to purchase and pay for the Assets are further subject to the representations
and warranties of Seller being true and correct at the Closing and to the actual
sale and delivery of the Assets at Closing; and the sale, transfer, assignment,
conveyance and delivery of the Assets is further subject to the representations
and warranties of Chelsea being true and correct at the Closing.
4.01 Documents to be Delivered to Chelsea. At the Closing, the following
documents shall be delivered to Chelsea by Seller or the Shareholders, as the
case may be, which documents shall be satisfactory in form and content to
Chelsea's counsel:
(a) A copy of the directors' resolution or the minutes of the meeting
of the directors of Seller approving the execution and performance of this
Agreement.
(b) Any schedules and exhibits called for in this Agreement, properly
completed.
(c) Formal assignments of the Option and Management Agreement, which
shall reflect the existence of the Retained Interest.
4.02 Documents to be Delivered to Seller. At the Closing, the following
documents shall be delivered to Seller by Chelsea, which documents shall be
satisfactory in form and content to Seller's counsel:
(a) To the Shareholders, certificates evidencing the Exchange Shares
and Exchange Options in the proper denominations.
(b) To Seller, a copy of the directors' resolution or the mintutes of
the meeting of the directors of Chelsea approving the execution and performance
of this Agreement.
(d) To Seller, any schedules and exhibits called for in this
Agreement.
4.04 Conditions Precedent. The obligations of the parties under this
Agreement are subject to the satisfaction of the following conditions, unless
waived in writing, on or prior to the Closing, in addition to any other terms
and conditions precedent set forth in this Agreement:
(a) The representations and warranties of every party contained in
this Agreement shall be in all material respects true and correct on and as of
the Closing Date as if made on such date.
(b) Chelsea and Seller each shall have performed all covenants and
agreements, satisfied all conditions and complied with all other terms and
provisions of this Agreement to be respectively performed, satisfied or complied
with by it as of the Closing Date.
(c) Chelsea shall not have discovered any material error,
misstatement or omission in or failure of any representation or warranty made by
Seller, and Seller shall not have discovered any material error, misstatement or
omission in or failure of any representation or warranty made by Chelsea.
(d) Chelsea shall have completed a due diligence examination of
Seller reasonably satisfactory to Chelsea covering all books, records, contracts
and other documents and all financial affairs of Seller. Seller shall have
completed a due diligence examination of Chelsea reasonably satisfactory to
Seller covering all books, records, contracts and other documents and all
financial affairs.
(e) Between the date of this Agreement and the Closing Date, Seller
shall not have done any act or engaged in any course of conduct prohibited in
this Agreement without the prior written consent of Chelsea.
(f) All legal matters in connection with this Agreement and the
consummation of all transactions herein contemplated, and all documents and
instruments delivered in connection herewith shall be reasonably satisfactory in
form to each party.
(g) No injunction or restraining order of any federal or state court
is in effect which prevents the purchase of the Assets or issuance and delivery
of the Exchange Shares and Exchange Options, and no lawsuit or other proceeding
has been filed by any person by the Closing Date contesting or attempting to
enjoin either action, and no action is taken and no law is passed after the date
of this Agreement which prevents the purchase of the Assets or issuance and
delivery of the Exchange Shares and Exchange Options.
5. ADDITIONAL COVENANTS OF THE PARTIES. The parties agree that, prior to
the Closing:
(a) The parties hereto each will use their best efforts to cause this
Agreement and all related agreements to become effective, and all transactions
herein and therein contemplated to be consummated, in accordance with its and
their terms, to obtain all required consents, waivers and authorizations of
governmental entities and other third parties, to make all filings and give all
notices to those regulatory authorities or other third parties which may be
necessary or reasonably required in order to effect the transactions
contemplated in this Agreement, and to comply with all federal, local and state
laws, rules and regulations as may be applicable to the contemplated
transactions.
(b) The parties each agree that it will not do any thing or act
prohibited by this Agreement or any related agreement, or fail to do any thing
or act which it has undertaken to do in this Agreement or any related agreement.
6. TERMINATION OF THIS AGREEMENT.
6.01 Grounds for Termination. This Agreement shall terminate:
(a) By mutual written consent of Chelsea and Seller;
(b) By Seller or Chelsea, if:
(i) all the conditions precedent to its respective
obligations hereunder have not been satisfied or waived prior to the
Closing Date, as it may be accelerated or extended;
(ii) either party shall have defaulted or refused to perform
in any material respect under this Agreement, or if Chelsea or Seller
should have reasonable cause to believe there has been a material
representation concerning, or failure or breach of, any representation or
warranty by the other party, or if it appears that either Seller or Chelsea
has committed any unlawful acts affecting the other party;
(iii) the transactions contemplated in this Agreement and
related agreements have not been consummated on the Closing Date, as it may
be accelerated or extended, OR
(iv) either Chelsea or Seller shall reasonably determine that
the transactions contemplated in this Agreement have become inadvisable by
reason of the institution or threat by any federal, state or municipal
governmental authorities or by other person whatever of a formal
investigation or of any action, suit or proceeding of any kind against
either or both parties which in one party's reasonable belief is material
in light of the other party's business, prospects, properties or financial
condition;
6.02 Manner of Termination. Any termination of this Agreement shall be
made in accordance with the above listed grounds and, if terminated by a
corporation, shall be evidenced by written resolution of the terminating party's
board of directors. Written notice of termination shall be given to the other
party as required in this Agreement as promptly as is practical under the
circumstances. Upon a party's receipt of such termination notice, this Agreement
shall terminate and the transactions herein contemplated shall be abandoned
without further action by the parties.
6.03 Survival of Confidentiality Provisions. Upon termination of this
Agreement for any reason, (i) the covenants of the parties concerning the
confidentiality and proprietary nature of all docuemnts and other information
furnished hereunder shall remain in force except as to information which has
otherwise become public knowledge, and (ii) each party shall promptly return all
documents received from the other party in connection with this Agreement. This
Section constitutes a mutual covenant of the parties, and either may judicially
enforce it.
7. NECESSARY INFORMATION. Seller shall furnish to Chelsea promptly upon
its request all information regarding Seller and its business, assets,
properties, and financial condition which, in the judgment of Chelsea, is
necessary to enable Chelsea to conduct its due diligence examination relating to
the proposed purchase of the Assets. Each of the parties hereto shall furnish to
the others all information concerning such party required for inclusion in any
application or statement to be filed or made by the other party with or to any
governmental agency or other third party in connection with the proposed sale of
the Assets.
8. MISCELLANEOUS PROVISIONS.
(a) This Agreement shall be binding upon the parties, and respective
successors, assigns and legal representatives and shall be governed and
interpreted under the laws of the State of Nevada. This Agreement shall be
interpreted as if all parties shared equally in its drafting and preparation.
(b) The parties agree to conduct themselves and their mutual dealings
in connection with this Agreement in accordance with the highest standards of
commercial honor.
(c) This Agreement and the agreements contemplated hereby constitute
the entire agreement of the parties regarding the subject matter hereof, and
supersede all prior agreements and understandings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.
(d) If any provision of this Agreement is held to be illegal, invalid
or unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable provision never
comprised a part hereof; and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Further, in lieu of such
illegal, invalid or unenforceable provision, there shall be added automatically
as part of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal, valid and
enforceable.
(e) This Agreement may be amended, modified, or supplemented only by
instrument in writing executed by all parties.
(f) The parties shall bear their own fees and expenses incurred in
connection with the transactions contemplated herein.
(g) This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument. Execution and delivery of this Agreement by
exchange of facsimile copies bearing facsimile signature of a party shall
constitute a valid and binding execution and delivery of this Agreement by such
party. Such facsimile copies shall constitute enforceable original documents.
(h) The failure of either party to insist, in any one or more
instances, upon the performance of any of the terms, covenants or conditions
herein or to exercise any right hereunder shall not be construed as a waiver or
relinquishment of the right in the future to insist upon full performance of
such term, covenant or condition.
(i) Neither this Agreement nor any right created hereby or in any
agreement entered into in connection with the transactions contemplated hereby
shall be assignable by any party hereto without the written consent of the
parties not seeking assignment. No such assignment shall relieve the assignor of
any obligations created under this Agreement.
(j) Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, legal representatives, successors and assigns. Neither
this Agreement nor any other agreement contemplated hereby shall be deemed to
confer upon any person not a party hereto or thereto any rights or remedies
hereunder or thereunder.
(k) Each party shall keep this Agreement and its terms confidential,
and shall make no press release or public disclosure, either written or oral,
regarding the transactions contemplated by this Agreement without the prior
knowledge and consent of the other parties hereto; provided that the foregoing
shall not prohibit any disclosure (i) by press release, Form 8-K filing or
otherwise that is required by federal securities laws, and (ii) to attorneys,
accountants, investment bankers or other agents of the parties assisting the
parties in connection with the transactions contemplated by this Agreement. In
the event that the transactions contemplated hereby are not consummated for any
reason whatsoever, the parties hereto agree not to disclose or use any
confidential information they may have concerning the affairs of the other
parties, except for information that is required by law to be disclosed.
(l) Any notice or communication hereunder or in any agreement entered
into in connection with the transactions contemplated hereby must be in writing
and given by depositing the same in the United States or Island of Nevis mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, by telefax transmission or by delivery
by use of a messenger which regularly retains its delivery receipts. Such notice
shall be deemed received on the date on which it is delivered to the addressee.
For purposes of notice, the addresses of the parties shall be the addresses set
forth in the preamble to this Agreement or any address subsequently furnished in
writing by a party.
(m) Each party represents and warrants to the others and agrees that
it has not employed or engaged, and will not employ or engage, any person as a
finder or broker in connection with the transactions contemplated herein, and
that no person is entitled to compensation as a finder or broker. Each party
hereby indemnifies the other parties and holds the other parties harmless from
and against any claims of any third persons claiming to have acted as a finder
or broker in connection with the transactions herein contemplated, and such
indemnity shall include all expenses, costs and damages arising from or related
to such claims, including reasonable attorneys fees.
IN WITNESS WHEREOF, all parties have executed this Agreement, and Seller
and Chelsea have initialled every preceding page hereof, as of the dates
respectively indicated below.
CHELSEA ATWATER, INC. CASINO CASINO, PLC
By: /s/ John D. Brasher Jr. By: /s/ Michael Ryan
-------------------------------- -----------------------------
John D. Brasher Jr., CEO Authorized Officer