EXHIBIT 10.48
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ESCROW AGREEMENT
This Escrow Agreement is made this 2ND day of July, 1996, by and among LRGP
HOLDINGS, INC., a Louisiana corporation ("Purchaser"), CASINO AMERICA, INC., a
Delaware corporation ("Casino America"), LOUISIANA RIVER SITE DEVELOPMENT, INC.,
a Louisiana corporation ("LRSD"), LOUISIANA DOWNS, INC., a Louisiana corporation
("Louisiana Downs"), and Boult, Cummings, Conners & Berry, PLC ("Escrowee").
RECITALS:
A. Pursuant to the terms of a Purchase Agreement, dated the date hereof
(the "Purchase Agreement"), Purchaser is obligated to purchase the interests of
LRSD (the "Seller") in Louisiana Riverboat Gaming Partnership (the
"Partnership") and LRG Hotels, L.L.C. ("LRGH"), in consideration of the payment
of the consideration described therein, including the cash payment of $85
million.
B. Purchaser has agreed to post collateral and place the same into escrow
in order to secure its obligation to consummate the transactions contemplated by
the Purchase Agreement (the "Purchase").
C. Purchaser, Casino America, LRSD and Louisiana Downs desire Escrowee to
act, and Escrowee has agreed to act, as the Escrow Agent pursuant to the terms
hereof.
NOW, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:
1. Deposit of Collateral. On behalf of Purchaser, on or before July 10,
1996, Casino America shall transfer unto Escrowee a stock certificate of Casino
America, representing 625,000 shares of common stock of Casino America (the
"Escrowed Shares"), together with stock powers executed in blank by Casino
America (the "Collateral"), to hold for the benefit of Seller to secure the
obligation of Purchaser to consummate the Purchase. The parties acknowledge
that the Escrowed Shares shall not have been registered for resale with the
Securities and Exchange Commission (the "SEC"). Escrowee shall provide to
Casino America a written acknowledgement of its receipt of such certificate.
2. Holding of Collateral. Escrowee agrees to cause the Collateral to be
held in a secure location in the custody of the Escrowee. While in such
custody, and for so long as the Escrowed Shares have not been paid over to
Seller pursuant to the terms
hereof, Purchaser shall be entitled to receive any dividends or distributions
paid on such Escrowed Shares, and shall have the power to vote said Escrowed
Shares on all matters that may be brought for a vote while said Escrowed Shares
are held in escrow.
3. Release of Collateral. The Collateral shall be released and delivered
to the Seller on the latest of (i) October 2, 1996, (ii) November 2, 1996, in
the event that the Closing Date (as defined in the Purchase Agreement) has been
extended thereunder to November 1, 1996 and not subsequently extended, or (iii)
December 2, 1996, in the event that the Closing Date has been extended
thereunder to December 1, 1996, but in each case only in the event that Escrowee
shall have received written notice signed by Seller (by officers acting therefor
with apparent authority so to act, there being no obligation on the part of
Escrowee to ascertain such authority) in the form of Annex I hereto; provided,
that in the event that the failure of Purchaser to consummate the transactions
contemplated by the Purchase Agreement results solely from the failure to obtain
consents or approvals that may be required from the Louisiana Gaming Control
Board and the Louisiana State Police Riverboat Gaming Enforcement Division, or
otherwise under Louisiana law, and Purchaser has delivered the notice described
in the following paragraph, then Seller shall only be entitled to foreclose on
that portion of the Collateral equal in value to $750,000, valuing the Escrowed
Shares at $8.00 per share, with the composition of such $750,000 (in the case
where both Escrowed Shares and cash are being held) to be in proportion to the
cash and Escrowed Shares being held. In such instance, the balance of the
Collateral shall be returned to Casino America, or to such other party as may be
directed by Casino America. In the event that the Purchase is consummated,
Purchaser, Casino America, LRSD and Louisiana Downs shall execute and deliver to
Escrowee a joint direction, directing that the Collateral be released and paid
to Casino America, or such other party as may be directed by Casino America.
The parties hereto (other than Escrowee) shall deliver such a notice to Escrowee
simultaneously upon consummation of the Purchase.
In the event that Purchaser shall deliver a notice to Escrowee (with a copy
to the parties hereto) not later than the third business day prior to the date
that the Collateral is to be disbursed to Seller that Purchaser does not intend
to consummate the transactions contemplated by the Purchase Agreement, and that
such failure to consummate will result solely from the failure to obtain
consents or approvals that may be required from the Louisiana State Police
Riverboat Gaming Enforcement Division, or otherwise under Louisiana law, then
Seller shall either (i) notify the parties hereto of its agreement with such
notification, in which case the Collateral shall be disbursed as provided in the
proviso in the foregoing paragraph, or (ii)
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notify the parties hereto of its disagreement with such notification, in which
case the Escrowee shall deliver to Seller on the appropriate date its $750,000
of Collateral, and Seller and Purchaser shall seek to resolve their disagreement
regarding the remaining $4,250,000 of Collateral (which shall continue to be
held by Escrowee pending such resolution or deposited pursuant to Section 5.2).
The losing party in any such proceeding brought for this purpose shall pay all
costs and expenses of the prevailing party.
4. Substitution of Collateral; Registration of Escrowed Shares. On no
more than one occasion prior to the termination of the Purchase Agreement, and
prior to the consummation of the Purchase, Purchaser and Casino America shall
have the right, in their sole discretion, to substitute cash for all or any
portion of the Escrowed Shares, using a conversion rate of $8.00 per Escrowed
Share, and upon any such substitution shall give prompt written notice thereof
to the other parties hereto. Escrowee shall cooperate with Purchaser and Casino
America in affecting such conversion. Any cash so received by the Escrowee
shall be held in an interest-bearing account, with accrued interest being
payable upon the termination of this Agreement (i) to Seller if the Collateral
is paid to Seller at the termination of this Agreement, or (ii) to Purchaser if
the Collateral is paid to Purchaser at the termination of this Agreement, or
(iii) proportionately if the Collateral is paid to both parties. In addition,
Purchaser agrees to cause the Escrowed Shares to be registered with the SEC for
resale on or prior to October 1, 1996, unless the Closing shall take place prior
to October 1, 1996 as contemplated by the Purchase Agreement, which registration
shall be at Purchaser's expense. In the event that the Closing Date is extended
by Purchaser pursuant to the Purchase Agreement to a date beyond October 1,
1996, Purchaser shall not be relieved of its obligation to so cause the Escrowed
Shares to be so registered, but the failure to do so shall not constitute a
default under the Purchase Agreement or relieve Seller of its obligation to
consummate the sale of the Seller's Interests (as defined in the Purchase
Agreement) thereunder; provided, that Casino America may be liable to Seller for
damages suffered by Seller arising directly as a result of the failure of CSNO
or Casino America to so register the Escrowed Shares.
In the event that between the date hereof and the date of termination of
this Agreement, Casino America shall (i) recapitalize Casino America through a
split-up of the outstanding common shares; (ii) declare a dividend on its common
shares, payable in common shares or other securities convertible into common
shares, of (iii) consummate any stock split of its common shares, the number of
shares held by Escrowee pursuant hereto shall be given the same privileges as
those outstanding or be adjusted, so as to maintain the percentage interest in
Casino
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America represented by the Escrowed Shares. In no event shall the rights
offering being conducted by Casino America on the date hereof give rise to any
such adjustment.
5. Escrowee.
5.1. Duties. Escrowee's obligations and duties in connection herewith are
confined to those specifically enumerated in this Agreement. Escrowee shall not
be in any manner liable or responsible for the sufficiency, correctness,
genuineness or validity of any instruments deposited with it or with reference
to the form of execution thereof, or the identity, authority or rights of any
person executing or depositing same, and Escrowee shall not be liable for any
loss that may occur by reason of forgery, false representation or the exercise
of its discretion in any particular manner or for any other reason. Purchaser,
Casino America, LRSD and Louisiana Downs shall jointly and severally indemnify,
defend and hold Escrowee harmless from any demands, suits or causes of action
arising out of this Escrow Agreement, except where such liability results from
Escrowee's gross negligence or willful misconduct.
5.2. Interpleader. In the event of a dispute between the parties hereto
sufficient in the sole discretion of Escrowee to justify its doing so, Escrowee
shall be entitled to tender into the registry or custody of any court of
competent jurisdiction all money or property in its hands under this Agreement,
together with such legal pleadings as it deems appropriate, and thereupon be
discharged from all further duties and liabilities under this Agreement. Any
such legal action may be brought in such court in New Orleans or the Eastern
District of Louisiana as Escrowee shall determine to have jurisdiction thereof.
5.3 Reliance, Etc.
a. Escrowee shall be protected in acting upon any written notice,
request, waiver, consent, certificate, receipt, authorization or other paper or
document which Escrowee reasonably believes to be genuine and what it purports
to be.
b. Escrowee may confer with legal counsel in the event of any
dispute or question as to the construction of any of the provisions hereof, or
its duties hereunder, and it shall incur no liability and it shall be fully
protected in acting in good faith in accordance with the opinions and
instructions of such counsel.
c. In the event Escrowee incurs legal fees and expenses in
connection with any legal proceeding arising out of this Escrow Agreement, the
non-prevailing party which is a party to such legal proceeding shall be
responsible for paying or
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reimbursing, as the case may be, any and all such fees and expenses. In the
event that any such legal proceeding does not proceed to final judgment or no
"non-prevailing party" results from such legal proceeding, any and all such
reasonable fees and expenses shall be paid (i) pursuant to the terms of a
written agreement settling such litigation or, (ii) in the absence of any such
agreement, equally by Purchaser and LRSD.
5.4 Successor Escrowee. Escrowee shall have the right to resign as
Escrowee hereunder by delivering 30 days prior notice in writing to Purchaser,
Casino America, LRSD and Louisiana Downs. If Escrowee resigns, a successor
Escrowee shall be appointed by mutual agreement of Purchaser, Casino America,
LRSD and Louisiana Downs, such resignation shall take effect upon such
appointment, and Escrowee shall deliver the Collateral to such successor
Escrowee. Any successor Escrowee at any time serving hereunder shall be
entitled to all rights, powers and indemnities granted to the Escrowee hereunder
as if originally named herein.
5.5 Waiver of Conflict. Purchaser and Casino America hereby acknowledge
that Escrowee has from time to time served as counsel to LRSD and Louisiana
Downs, and hereby waive any claim of conflict or disqualification resulting
therefrom, and covenants that it will not object to Escrowee's continuing
representation of LRSD and Louisiana Downs.
6. Termination. This Escrow Agreement shall terminate upon the delivery
in full of the Collateral or otherwise at the mutual discretion of Purchaser,
Casino America, LRSD and Louisiana Downs.
7. Miscellaneous.
a. Any notice or other communication required or desired to be given
hereunder shall be delivered in writing and shall be deemed delivered upon the
hand delivery or facsimile transmission thereof during business hours, or upon
the earlier of receipt or three (3) days after posting by registered mail or
certified mail, return receipt requested, or on the next business day following
delivery to a reliable or recognized air freight delivery service, provided such
notices shall be addressed or delivered to the parties at their respective
addressed set forth below, or if via facsimile transmission, to the facsimile
telephone numbers set forth below:
1. If to Purchaser or Casino America, on the one hand, or LRSD or
Louisiana Downs, on the other hand, at the addresses set forth for
Casino America or LRSD, respectively, in the Purchase Agreement.
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2. If to Escrowee:
Boult, Cummings, Conners & Berry, PLC
414 Union Street, Suite 1600
Nashville, TN 37219
Attn: Christopher Harris, Esq.
Facsimile: (615) 252-2380
or at such other address as may from time to time be designated in writing by
the party to be given notice.
b. This Escrow Agreement shall be governed by the internal laws of
the State of Louisiana, without regard to its conflict of law provisions.
c. This Escrow Agreement shall be binding on each of the parties
hereto and upon their successors and assigns.
d. The parties hereto agree that no assignment of the interest of
any of the parties hereto shall be binding upon the Escrowee unless and until
written evidence of such assignment in form satisfactory to Escrowee shall be
filed with Escrowee.
e. The parties hereto agree that in case said property shall be
attached, garnished, or levied upon under any order of court, or the delivery
thereof shall be stayed or enjoined by an order of court, or any order, judgment
or decree shall be made or entered by any court affecting the property deposited
under this agreement, or any part hereof, Escrowee is hereby expressly
authorized, in its sole discretion, to obey and comply with all writs, orders or
decrees so entered or issued, whether with or without jurisdiction, and in case
Escrowee obeys or complies with any such writ, order or decree it shall not be
liable to any of the parties hereto or to any other person, firm or corporation,
by reason of such compliance notwithstanding such writ, order or decree being
subsequently reversed, modified, annulled, set aside or vacated.
Notwithstanding the foregoing, Escrowee shall give prompt notice to the other
parties hereto of the institution of any proceedings of the type described
above, and shall keep the parties apprised of material developments in any such
proceedings.
f. This Escrow Agreement may be executed in two or more
counterparts, which when taken together will serve as one fully executed
original.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
as of the date first above written.
LRGP HOLDINGS, INC.
By:___________________________
Title:___________________
CASINO AMERICA, INC.
By:___________________________
Title:___________________
LOUISIANA RIVER SITE DEVELOPMENT, INC.
By:___________________________
Title:___________________
LOUISIANA DOWNS, INC.
By:___________________________
Title:___________________
BOULT, CUMMINGS, CONNERS & BERRY,
PLC, as Escrowee
By:___________________________
Title:___________________
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Annex I
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LOUISIANA RIVER SITE DEVELOPMENT, INC.
C/O THE EDWARD J. DEBARTOLO CORPORATION
7620 MARKET STREET
YOUNGSTOWN, OHIO 44513-3287
[DATE]
Boult, Cummings, Conners
& Berry, PLC
414 Union Street, Suite 1600
Nashville, TN 37219
Attn: Christopher Harris
Gentlemen:
This notice is being delivered to you pursuant to Section 3 of the Escrow
Agreement, dated July 2, 1996, among LRGP Holdings, Inc., Casino America, Inc.,
Louisiana River Site Development, Inc., Louisiana Downs, Inc. and you (the
"Escrow Agreement"). You are acting as Escrowee thereunder.
Pursuant to Section 3 of the Escrow Agreement, this is to notify you, and
the undersigned hereby represents to you, to Purchaser, to Casino America, Inc.
and to CSNO, Inc. as follows:
1. The Purchase Agreement referred to in the Escrow Agreement (the
"Purchase Agreement") has terminated by its terms, without the
termination date thereunder having been extended pursuant to the terms
of the Agreement or by mutual agreement of the parties.
2. All conditions precedent to the obligations of the Purchaser to
consummate the transactions contemplated by the Purchase Agreement
have been fulfilled.
[ALTERNATIVE ONE:
3. Purchaser has not delivered to the parties to the Escrow Agreement a
notice of the type referred to in the second paragraph of Section 3 of
the Escrow Agreement.
4. Accordingly, you are hereby directed, pursuant to the terms of the
Escrow Agreement, to deliver to the undersigned all of the Collateral
being held by you (together with any accrued interest thereon)
thereunder, to Seller at [Insert Address].]
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[ALTERNATIVE TWO:
3. Purchaser has delivered to the parties to the Escrow Agreement a
notice of the type referred to in the second paragraph of Section 3 of
the Escrow Agreement, and Seller agrees with such notice.
4. Accordingly, you are hereby directed, pursuant to the terms of the
Escrow Agreement, to deliver to the undersigned $750,000 of the
Collateral being held by you (together with a proportionate amount of
any accrued interest thereon) thereunder, to Seller at [Insert
Address], and to deliver the balance of the Collateral (together with
a proportionate amount of any accrued interest thereon) to Purchaser,
at Purchaser's address as set forth in the Escrow Agreement.]
[ALTERNATIVE THREE:
3. Purchaser has delivered to the parties to the Escrow Agreement a
notice of the type referred to in the second paragraph of Section 3 of
the Escrow Agreement, and Seller disagrees with such notice.
4. Accordingly, you are hereby directed, pursuant to the terms of the
Escrow Agreement, to deliver to the undersigned $750,000 of the
Collateral being held by you (together with a proportionate amount of
any accrued interest thereon) thereunder, to Seller at [Insert
Address], and to continue to hold the balance of the Collateral in
accordance with the terms of the Escrow Agreement]
Very truly yours,
Louisiana River Site Development, Inc.
By: _________________________
Title: ______________________
cc: John A. Gallaway
Allan B. Soloman
Paul W. Theiss
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