EXHIBIT 10.1
AGREEMENT
This Agreement (herein so called) is entered into this 27th day of June,
1998 by and among Greate Bay Hotel and Casino, Inc. ("GBHC"), GB Holdings, Inc.,
("GBH"), GB Property Funding Corp. ("GBPF") (collectively, the "Debtors"), and
Advanced Casino Systems International, Inc. ("ACSI"), on the one hand, and
Greate Bay Casino Corp., New Jersey Management, Inc., ("NJMI") Pratt Casino
Corporation ("PCC"), PRT Funding Corp. ("PRT"), PPI Corporation ("PPI"),
Advanced Casino Systems Corporation ("ACSC") (collectively, "GBCC"), and
Hollywood Casino Corporation ("HCC"), on the other.
R E C I T A L S
A. On January 5, 1998, the Debtors commenced proceedings under Chapter 11 of
Title 11 of the Unites States Code (the "Chapter 11 Proceedings") in the
United States Bankruptcy Court for the District of New Jersey, Camden
Vicinage.
B. On May 22, 1998, the Debtors filed a Motion (hereinafter so called) in the
Chapter 11 Proceedings seeking approval for the rejection of the Management
Services Agreement, dated August 19, 1987, as amended (the "NJMI
Agreement"), between GBHC and NJMI.
C. The parties desire to compromise and settle certain issues that have arisen
in connection with the Motion and as set forth in the Agreement.
NOW, THEREFORE, the Debtors, ACSI, GBCC, and where applicable, HCC
stipulate and agree as follows:
1. Except as provided in this paragraph one and in paragraph two below,
the management of the Debtors will be under the control of the existing Board of
Directors of the Debtors until the effective date of a plan of reorganization
for GBHC ("Plan Confirmation"). Until Plan Confirmation, GBCC, including any
newly created subsidiaries or affiliates, will not change the composition of the
Board of Directors of any of the Debtors except upon Order and subject to the
supervision and jurisdiction of the Bankruptcy Court.
2. Upon the effective date of this Agreement, Richard Knight will resign
his positions as Chairman, President and Chief Executive Officer of the Debtors
and their subsidiaries.
3. The second sentence of numbered paragraph 5 of that certain letter
agreement dated May 26, 1998 between GBCC and the Debtors will remain in effect,
and otherwise the letter agreement dated May 26, 1998 is superseded by this
Agreement upon the effective date of this Agreement.
4. Upon approval of this Agreement by the Bankruptcy Court, and, if
required, upon approval by the Casino Control Commission ("CCC") of the
provisions of this paragraph, the NJMI Agreement will be suspended from May 1,
1998 until entry of a Final Order deciding the Motion ("the Interim Period").
GBCC and HCC shall fully support an application to the Bankruptcy Court for
approval of this Agreement, and of any petition to the CCC. GBHC agrees to
adjourn the Motion until Monday September 28, 1998, or such earliest date
thereafter as may be accommodated by the Bankruptcy Court. GBHC and NJMI may
negotiate an agreement to adjourn the Motion to a later date, but any party
shall be free to terminate negotiations at any time, or to adopt any position in
the course of negotiation in its sole and unreviewable
discretion, without incurring any liability whatsoever, and without breach of
this Agreement. During the Interim Period, NJMI shall have no other duties
except for those duties specified in this Agreement.
5. The Current and Deferred Fees (hereafter defined) that are applicable
during the Interim Period shall be in complete satisfaction of all claims
accruing in favor of NJMI under the NJMI Agreement during the Interim Period,
and shall not bind any of the parties hereto as to the reasonableness of the
fees contained in the NJMI Agreement. NJMI through HCC shall provide the
services set forth on Exhibit A (the "Services"), and the provision of such
Services or the payments therefor shall not be offered into evidence or used in
any manner in the hearing on the Motion or in any other proceeding except in
respect of proceeding(s) to enforce the payment thereof. Upon any granting of
the Motion and termination of the NJMI Agreement, NJMI and HCC agree to
cooperate reasonably with the Debtors in effecting a smooth transition of the
assumption of any Services by the Debtors and agree that such cooperation
includes providing access to or copying of any and all related records. During
the Interim Period, but in no event for any period after October 15, 1998, and
only for so long as GBHC requests such services, HCC agrees to make Knight
available as a consultant for (i) meetings at the Sands at mutually agreeable
times to equal six days on site a month provided that each on site trip shall be
a minimum of two days and (ii) at mutually agreeable times for reasonable
telephone conferences and consultations in the ordinary course of business at
the Sands ("Consulting Services"). During the Interim Period, GBHC agrees to
reimburse Hollywood Casino Aurora, Inc. ("HCA") for 30% of Knight's salary, and
to reimburse HCA for reasonable costs associated with the costs of performance
of the Consulting Services, e.g., telephone and telecopier expense,
transportation, meals, lodging, and similar expenses. To the extent that GBHC
requests, but Knight does not provide, six days' on-site services in any
calendar month, then GBHC's obligation to reimburse HCA for 30% of Knight's
salary shall be proportionately reduced. In consideration of providing the
Services and Consulting Services, and during the Interim Period, GBHC agrees to
pay NJMI a fee of $122,000 in arrears on the last business day of each month
(the "Current Fee") and a deferred fee in the amount of $43,000 per month (the
"Deferred Fee") at Plan Confirmation. Any Current Fee otherwise due upon the
effective date of this Agreement will be paid forthwith.
6. As requested by GBHC, ACSC agrees to continue to provide GBHC before
and after Plan Confirmation with support, maintenance, and upgrades of all of
the software or related hardware components presently supported, maintained, or
provided by or through ACSC for GBHC (such software or hardware, collectively,
the "Software") in accordance with the terms set forth on the agreement attached
hereto as Exhibit B, which is incorporated herein as if fully set forth. ACSC
will provide mailing services under the same terms and conditions as currently
in effect for so long as (a) ACSC provides such services to other customers, (b)
GBHC shall continue to request such services, and (c) GBHC has paid all fees and
expenses then due and owing to ACSC for services rendered after GBHC's initial
filing of a petition in the Chapter 11 Proceedings ("Post Petition") within 45
days of receipt of an invoice therefor and less any sums owed to GBHC by ACSC
for services provided or expenses incurred Post Petition on behalf of ACSC. For
the purpose of the preceding sentence, a customer includes HCA or HWCC - Tunica,
Inc.
7. With respect to that certain Trademark License Agreement between HCC
and GBHC with an Effective Date of July 8, 1997 (the "TLA"), HCC and GBHC
acknowledge that HCC has provided notice to GBHC of its rejection of GBHC's
notice of renewal in accordance with the TLA. Except as set forth in
subsections (d) and (e) of this paragraph 7, GBHC will phase out the use of the
Licensed Marks, and the Licensed Goods and Services, as such terms are defined
in the TLA, and the name "Hollywood" in connection with the use of the Licensed
Marks or in any signage under the TLA, within the six month period provided
under Article 8.1 of the TLA. Notwithstanding any other provision of the TLA to
the contrary, (a) GBHC shall be under no obligation to offer to sell to HCC any
memorabilia owned by GBHC, (b) based on its prior use, GBHC shall be free to
display memorabilia and the like within or on the
premises of GBHC, except that nothing herein shall be deemed to have granted
GBHC any rights to operate in a manner or style which conflicts with proprietary
rights of HCC in any portion of GBHC's property provided that the "Epic Buffet",
the "Studio Store", and the "Studio Cafe" can be maintained as provided in
subsection (e) of this paragraph 7, (c) HCC shall, upon request of GBHC, deliver
at the transportation cost of GBHC any memorabilia owned by GBHC and stored by
HCC or its affiliates, (d) GBHC shall be free to use the Licensed Marks and
Licensed Goods and Services limited to the slot club for a phase out period
ending at the earlier to occur of June 30, 1999 or six months after Plan
Confirmation, and (e) for an additional two year phase out period beyond the six
month period otherwise provided, shall be free to continue to use the names
"Epic Buffet," "Studio Store" and/or "Studio Cafe" in connection with
restaurants or facilities bearing those names at GBHC, or in connection with
advertising or promotions related thereto provided that GBHC adheres to the
standards of quality control otherwise provided for in Article 2 of the TLA, and
complies with Articles 3, 4, and 5 of the TLA (except that a change of control
of the Sands resulting from either a sale or Plan Confirmation shall not require
the prior approval of HCC in respect of the continuation of operations at the
premises of the Sands otherwise provided herein), and GBHC may, at the
expiration of the extended phase out period, continue to operate such
restaurants and facilities by discontinuing the use of the words "Epic" and/or
"Studio" from such restaurants and facilities.
8. With respect to that certain License Agreement originally between
Hughes Properties, Inc. and Pratt Hotel Corporation dated May 19, 1987, relating
to the use of the Trademark as defined therein (the "LA"), neither GBCC nor
anyone acting in concert or on behalf of GBCC shall take any action seeking to
terminate the LA or the rights of GBHC under the LA or otherwise at anytime
before the earliest of December 15, 1998, Plan Confirmation, or 15 days prior to
opening by the Venetian (formerly known as the Sands Hotel & Casino in Las
Vegas, Nevada) of a hotel tower or casino for business. GBHC agrees that it
will not assert that, by agreeing to the foregoing, GBCC has waived whatever
right it may have to terminate the LA.
9. During the remaining or any renewal terms of their employment
contracts, neither HCC, nor GBCC, nor any of their affiliates, nor any of their
officers or directors, shall solicit Gary Luderitz, or Jack Przybylski to leave
their employment with GBHC or to provide services as employees, consultants or
otherwise, and none of the parties in this paragraph will object to a two year
extension of the employment contract of Gary Luderitz.
10. This Agreement is without prejudice to any party's rights with respect
to the NJMI Agreement or the Motion except as expressly set forth herein, may
not be amended or modified in any respect except with the written consent of the
parties hereto, is binding upon the successors and assigns of the parties and
their successors in interest, and shall be interpreted in accordance with New
Jersey law without regard to the conflicts of laws principles of New Jersey law.
11. This Agreement will be effective when executed by all of the parties
hereto and when approved by the Bankruptcy Court and by the CCC, if required, as
provided in paragraph 4 above. This Agreement may be executed in counterparts
by the parties and a
THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK
telecopied signature is as effective as an original.
ACCEPTED AND AGREED:
Greate Bay Casino Corporation PPI Corporation
BY: /s/ Edward T. Pratt III BY: /s/ Edward T. Pratt III
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Advanced Casino Systems Corp. Pratt Casino Corporation
BY: /s/ Edward T. Pratt III BY: /s/ Edward T. Pratt III
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PRT Funding Corp. New Jersey Management, Inc.
BY: /s/ Edward T. Pratt III BY: /s/ Edward T. Pratt III
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Hollywood Casino Corporation
BY: /s/ Edward T. Pratt III
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Greate Bay Hotel and Casino, Inc GB Holdings, Inc.
BY: /s/ Timothy A. Ebling BY: /s/ Timothy A. Ebling
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Advanced Casino Systems
GB Property Funding Corp. International, Inc.
BY: /s/ Timothy A. Ebling BY: /s/ Timothy A. Ebling
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EXHIBIT A - SERVICES
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A) Regular Quarterly and Annual SEC Reporting and Compliance
B) Chart of Accounts Maintenance
C) Federal and State Tax Return Review Services
D) Insurance Procurement Services - NJMI through HCC, shall procure and
maintain the following insurance for GBHC, at GBHC's sole cost and expense:
General Liability Property (including Business Interruption)
Tail Flood
Auto Liability Directors & Officers
Umbrella Liability Pension Trust Liability
Excess Liability Crime
Workers Compensation Media/Memorabilia
Non-owned Aviation Business Travel
E) Surveillance Consultation Services
F) 401K Services - Inclusion in the HCC and Subsidiaries Retirement Savings
Plan on the same basis as currently exists, recognizing that a transition
to a stand alone plan for GBHC must begin prior to September 30, 1998.