EXHIBIT 10.40
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is made as of February 25, 1998 among
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Hilton Gaming (Switzerland County) Corporation, a Nevada corporation ("Seller"),
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Boomtown Hoosier, Inc., a Nevada corporation ("Purchaser") and Hollywood Park,
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Inc., a Delaware corporation ("Hollywood Park").
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R E C I T A L S
A. Indiana Ventures, LLC is a limited liability company organized under
the laws of the State of Nevada (the "Company"), with the authority to issue
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1000 Units consisting of 970 Voting Units and 30 Non-Voting Units (as Units,
Voting Units and Non-Voting Units are defined in the Operating Agreement, as
amended, of the Company.) Capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Operating Agreement.
B. Seller and Purchaser each own 485 Voting Units in the Company.
C. Seller and Purchaser have reached an agreement for the sale by Seller
and the purchase by Purchaser of Seller's Voting Units in the Company.
D. Hollywood Park is the ultimate parent entity of Purchaser and in
consideration of the agreements of Seller set forth herein has agreed to join in
certain of the provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations hereinafter contained, and subject to the conditions hereinafter
set forth, it is agreed as follows:
1. Sale. Upon the terms and conditions set forth herein, Seller shall
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sell to Purchaser, and Purchaser shall purchase from Seller, 485 Voting Units
(the "Sold Units") in the Company, constituting all of Seller's Voting Units in
the Company.
2. Purchase Price. The sales price of the Sold Units (the "Purchase
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Price") will be $750,000.00. The Purchase Price shall be evidenced by a
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promissory note in the form of Exhibit A attached hereto and incorporated herein
by reference (the "Promissory Note").
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3. Representations.
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(a) Seller's Representations. Seller represents and warrants to Purchaser
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that:
(i) Seller is the owner of all of the Sold Units, free and clear of
all liens and encumbrances.
(ii) Seller has full power to transfer the Sold Units to Purchaser
without obtaining the consent or approval of any person or governmental
authority.
(iii) This Agreement is the valid and binding obligation of Seller
enforceable against Seller in accordance with its terms.
(b) Purchaser's Representations. Purchaser and Hollywood Park represent
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and warrant to Seller that:
(i) Purchaser has full power to purchase the Sold Units from Seller
without obtaining the consent or approval of any person or governmental
authority.
(ii) This Agreement is the valid and binding obligation of Seller and
Hollywood Park, enforceable against Purchaser and Hollywood Park in accordance
with its terms.
4. As-Is Sale. The parties acknowledge that Purchaser and Seller have
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been jointly responsible for management and operation of the Company and its
business and as such Purchaser is fully informed as to the assets, rights,
obligations and liabilities of the Company. Purchaser represents and warrants to
Seller that Purchaser has independent knowledge regarding the Company and the
Sold Units and Purchaser has entered into this Agreement based upon such
personal knowledge, and not based upon any representation or warranty of Seller,
except as specifically set forth in Section 3 above. Purchaser agrees that the
Sold Units shall be transferred to Purchaser AS-IS and WITH ALL FAULTS, without
warranty, express, implied or statutory, including any warranty of
merchantability or fitness for a particular purpose excepting only those
warranties specifically set forth in Section 3 above.
5. Costs: Indemnification.
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(a) Costs. Pursuant to the terms of the Operating Agreement, the Members
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agreed to make Initial Capital Contributions and, under certain circumstances,
additional Capital Contributions, from time to time. Pursuant to the terms of a
letter agreement (the "Letter Agreement") dated May 16, 1996 among Purchaser,
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Seller and Full House L.L.C. ("Full House"), Purchase and Seller agreed to fund
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the Initial Capital Contributions and certain Additional Capital Contributions
of Full House. Purchaser acknowledges that Seller has fully paid all of its
Initial Capital Contributions and any additional Capital Contributions, together
with its share of any Capital Contributions on behalf of Full House under the
Letter Agreement, through February 25, 1998. Seller hereby assigns to Purchaser
all of Seller's obligations under the Letter Agreement and Purchaser hereby
assumes all of Seller's obligations and agrees that Purchaser shall be fully
liable for funding any Capital Contributions thereunder. From and after the
date hereof, Seller shall have no further obligation for any Capital
Contributions pursuant to the Operating Agreement, the Letter Agreement or
otherwise and Purchaser hereby assumes all liability with respect thereto.
(b) Indemnity. Purchaser and Hollywood Park agree to indemnify Seller,
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Seller's affiliates, its and their officers, directors, agents, employees,
shareholders, and each of their successors and assigns (collectively, the
"Indemnified Persons"), and to save and hold the Indemnified Persons harmless
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from and against any liability, obligation, loss, damage, penalty, cost and
expense, suit, claim, action or demand, asserted against, or incurred by, the
Indemnified Persons (including, without limitation, reasonable attorneys' fees
and expenses) as a result of, under, arising from, or in connection with (a) a
breach of this Agreement by Purchaser or Hollywood Park or (b) the Project, the
Company, the Sold Units, the Letter Agreement or otherwise from and after the
date of this Agreement.
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6. Closing. The closing of the purchase and sale of the Sold Units (the
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"Closing") shall occur concurrently with, and be effective as of the date of,
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this Agreement. Concurrently with the execution of this Agreement, Seller shall
execute and deliver to Purchaser an assignment transferring the Sold Units to
Purchaser and Purchaser shall execute and deliver to Seller the Promissory Note.
Promptly after the Closing Seller shall deliver to Purchaser all books, records,
agreements, drawings, plans, aerial photographs and other documents and papers
relating to the Project and belonging to the Company.
7. Miscellaneous.
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(a) Notices. Any and all notices and demands by any party hereto to any
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other party required or desired to be given hereunder shall be in writing and
shall be validly given or made only if deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested or if made by
Federal Express or other similar delivery service keeping records of deliveries
and attempted deliveries or if sent by telecopy. Service by United States Mail
or by Federal Express or other similar delivery service shall be conclusively
deemed made on the first business day delivery is attempted or upon receipt,
whichever is sooner. Service by telecopy shall be deemed made upon confirmed
transmission. Any notice or demand to Seller shall be addressed c/o Bally's
Park Place, Park Place and The Boardwalk, Atlantic City, New Jersey, Attention:
Wallace R. Barr. Any notice or demand to Purchaser shall be addressed c/o
Boomtown, Inc., P.O. Box 399, Verdi, Nevada, 89839, Attention: Robert List. Any
notice or demand to Hollywood Park shall be addressed c/o Boomtown, Inc., P.O.
Box 399, Verdi, Nevada 89839, Attention: Robert List. The parties may change
their address for the purpose of receiving notices or demands as herein provided
by a written notice given in the manner aforesaid to the others, which notice of
change of address shall not become effective, however, until the actual receipt
thereof by the others.
(b) Binding Effect. This Agreement shall inure to the benefit of and be
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binding upon the parties hereto and their respective successors and assigns.
(c) Partial Invalidity. If any term, provision, covenant or condition of
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this Agreement, or any application thereof, should be held by a court of
competent jurisdiction to be invalid, void or unenforceable by the laws
applicable thereto, all provisions, covenants, and conditions of this Agreement,
and all applications thereof, not held invalid, void or unenforceable, shall
continue in full force and effect and shall in no way be affected, impaired or
invalidated thereby.
(d) Entire Agreement. This Agreement contains the entire agreement between
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the parties and cannot be changed or terminated orally.
(e) Attorneys' Fees. In the event any action or proceeding is commenced by
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any party against any other in connection herewith, including but not limited to
any proceeding in bankruptcy, the prevailing party shall be entitled to recover
from the other party all costs and expenses, including, without limitation,
reasonable attorneys' fees and costs, incurred in such action or proceeding,
including, but not limited to any proceeding in bankruptcy, in addition to any
other relief awarded by the court.
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(f) Time of Essence. Time is of the essence of this Agreement and all of
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the terms, provisions, covenants and conditions hereof.
(g) Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same Agreement. The
parties agree and intend that executed copies of this Agreement, transmitted
from the parties to each other by facsimile machine, shall constitute original
executed counterparts of this Agreement and such facsimile signatures shall have
the same effect as original signatures.
(h) Severability. If any of the provisions of this Agreement shall be held
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by any court of competent jurisdiction to be unlawful, void or unenforceable for
any reason as to any person or circumstances, such provision or provisions shall
be deemed severable from and shall in no way affect the enforceability and
validity of the remaining provisions of this Agreement.
(i) Further Assurances. In addition to the acts and deeds recited herein
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and contemplated to be performed, executed and/or delivered by either Seller or
Purchaser, Seller and Purchaser shall perform, execute and/or deliver or cause
to be performed, executed and/or delivered at or prior to the Closing, or if
necessary, after the Closing, any and all further acts, deeds and assurances as
may, from time to time, be reasonably required to satisfy the conditions of this
Agreement or to consummate the transactions contemplated in this Agreement and
to confirm the transfer of the Shares from Seller to Purchaser. These
obligations shall survive the Closing.
(j) Governing Law. Nevada law shall govern the validity, construction,
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performance and effect of this Agreement.
(k) Interpretation. This Agreement is an agreement between financially
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sophisticated and knowledgeable parties and is entered into by the parties in
reliance upon the economic and legal bargains contained herein and shall be
interpreted and construed in a fair and impartial manner without regard to such
factors as the party who prepared (or caused the preparation of) this instrument
or the relative bargaining power of the parties.
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IN WITNESS WHEREOF, the parties have entered into this Agreement effective
the day and year above written.
"SELLER" "PURCHASER"
Hilton Gaming (Switzerland Boomtown Hoosier, Inc.
County) Corporation
By: /s/ Wallace R. Barr By: /s/ Robert F. List
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Name: Wallace R. Barr Name: Robert F. List
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Title: Executive Vice President Title: Secretary
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"HOLLYWOOD PARK"
Hollywood Park, Inc.
By: /s/ G. Michael Finnigan
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Name: G. Michael Finnigan
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Title: CFO
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The undersigned hereby consents to the transfer of the Sold Units to
Purchaser and the assignment by Seller to Purchaser of all of Seller's
obligations under the Letter Agreement, as defined above, and hereby releases
Seller from any liability under the Letter Agreement.
FULL HOUSE L.L.C.
By:
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Name:
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Title:
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Exhibit A
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PROMISSORY NOTE
$750,000 Las Vegas, Nevada July 14, 1998
For valuable consideration, Boomtown Hoosier, Inc., a Nevada corporation
("Promisor"), does hereby promise to pay to the order of Hilton Gaming
(Switzerland County) Corporation, a Nevada corporation ("Promisee"), the
principal sum of Seven Hundred Fifty Thousand Dollars ($750,000.00), together
with interest thereon, from date, at the rate of 8.5% per annum. The entire
outstanding principal balance of this Note, together with accrued interest
thereon, shall become due five (5) business days after the date on which
Pinnacle Gaming Development Corporation, Hollywood Park, Inc., Boomtown, Inc.,
Promisor, or any affiliate of any of them, is awarded a Certificate of
Suitability for riverboat gaming operations on the Ohio River for either of
Switzerland County or Crawford County, Indiana.
Both principal and interest are payable at the office of Promisee, in Las
Vegas, Nevada, or at such place as the holder hereof may from time to time
designate in writing. Promisor may prepay this Note in full or in part, at any
time.
Promisor and all others who may become liable for the payment of all or any
part of this obligation do hereby severally waive presentment for payment,
protest and demand, notice of protest, demand and dishonor, and nonpayment of
this Note and expressly agree that the maturity of this Note or any payment
hereunder may be extended from time to time, at the option of the holder hereof,
without in any way affecting the liability of each.
Promisor promises to pay all costs incurred in collection and/or
enforcement of this Note or any part thereof or otherwise in connection
herewith, including, but not limited to, reasonable attorneys' fees, and, in the
event of court action, all costs and such additional sums and attorneys' fees as
the court may adjudge reasonable.
If any term, provision, covenant or condition of this Note, or any
application thereof, should be held by a court of competent jurisdiction to be
invalid, void, or unenforceable, all provisions, covenants and conditions of
this Note and all applications thereof not held invalid, void or unenforceable,
shall continue in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
The laws of the State of Nevada shall govern the validity, construction,
performance and effect of this Note. Any action to enforce Promisor's
obligations hereunder may be brought in any court of competent jurisdiction in
the State of Nevada, and Promisor hereby consents to the jurisdiction of Nevada
courts over it.
Boomtown Hoosier, Inc.
By:
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Name:
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Title:
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