EXHIBIT 10.1
TAX REIMBURSEMENT AGREEMENT
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This Tax Reimbursement Agreement (the "Agreement"), dated as of June 18,
1998, is by and between Empress Entertainment, Inc. (the "Company") and the
Stockholders of the Company listed on the Signature Pages hereto (each a
"Stockholder and, collectively, the "Stockholders").
Recitals:
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WHEREAS, the Company has entered into that certain Indenture (the
"Indenture"), dated as of June 18, 1998, by and among the Company, the
Guarantors and U.S. Bank Trust National Association, as trustee (the "Trustee"),
pursuant to which the Company is permitted to make distributions of Tax Amounts
(as defined in the Indenture) to its Stockholders with respect to each tax year
that the Company receives a Certificate from an officer of the Company, and an
opinion of counsel to the Company, that the Company qualifies as an S
Corporation under the Internal Revenue Code of 1986, as amended, or any similar
provisions of state or local law.
WHEREAS, the Indenture provides that the Company shall enter into a binding
agreement with its Stockholders to provide for the reimbursement of the Company
by its Stockholders for the positive differences between the amounts distributed
to such Stockholders from time to time for the payment of taxes with respect to
a tax year (the "Distributed Tax Amount") and the Tax Amount (as defined in the
Indenture).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Reimbursement of Certain Distributed Amounts. Within 40 days of the
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earlier of Company's filing of Internal Revenue Service Form 1120S (the "1120S")
for the applicable taxable year or the last date such form is required to be
filed (without regard to extensions) (the "Determination Date"), the Company
shall determine (i) the Distributed Tax Amount and (ii) the Tax Amount for such
taxable year.
With respect to each of the Company's taxable years, each of the
Stockholders hereby agrees to make a contribution of capital to the Company
(within 5 business days of the Determination Date) in an amount equal to such
Stockholder's allocable share of the excess, if any, of the Distributed Tax
Amount over the Tax Amount. A Stockholder's allocable share of the excess, if
any, of the Distributed Tax Amount over the Tax Amount is equal to the product
of (i) such excess and (ii) the Tax Amount distributed to such Stockholder for
the relevant year divided by the Tax Amounts distributed to all Stockholders for
such year.
2. Amendments and Modification. This Agreement may only be amended in a
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writing signed by the parties hereto; provided, that any such amendment must be
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approved by the consent of the holders of a majority in aggregate principal
amount outstanding of the 8% Senior Unsecured Subordinated Notes due 2006 of the
Company issued pursuant to the Indenture. Notwithstanding the foregoing, the
parties may, without the consent of any Holder of Notes, amend this Agreement to
cure any ambiguity, defect or inconsistency herein.
3. Notices. All notices, payments, requests, reports, information and
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other communications, as applicable, between the parties hereto shall be in
writing and shall be sufficiently given if made by hand delivery, by telecopier
or registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company:
Empress Entertainment, Inc.
P. O. Box 2789
Joliet, Illinois 60434
Attn: Chief Financial Officer
Fax: (815) 744-5818
if to the Stockholders:
c/o Peter Ferro, Jr.
19941 Manhattan Road
Elwood, Illinois 60421
Fax: (815) 726-5614
if to the Trustee:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, Minnesota 55101
Attn: Corporate Trust Department
Fax: (612) 244-0711
4. Governing Law and Severability. The terms of this Agreement shall be
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governed by and construed under the internal laws of the State of Illinois,
without giving effect to principles of conflicts of law. In the event any
provision of this Agreement shall be determined to be invalid, such provision
shall be severed from this Agreement and all remaining parts of this Agreement
shall continue in full force and effect in accordance with its terms as though
the invalid, illegal or unenforceable portion had never been part of this
Agreement.
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5. Interpretation. Whenever the provisions of this Agreement and the
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provisions of the Indenture relating hereto shall be inconsistent, the
provisions of the Indenture shall govern. Whenever used herein, the singular
number shall include the plural, the plural, the singular, and the word
"Company" shall include its successors and assigns.
6. Entire Agreement. Other than as set forth in Section 5 above, this
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Agreement contains the entire understanding of the parties hereto in respect of
the subject matter contained herein, and supersedes all prior agreements,
contracts or understandings between the parties with respect to the subject
matter hereof.
7. No Third Party Beneficiary Rights. This Agreement is not intended to
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and shall not be construed to give any person or entity other than the parties
signatory hereto and the Trustee on behalf of the holders of the Notes, any
interest or rights (including, without limitation, any third party beneficiary
rights) with respect to or in connection with any agreement or provision
contained herein or contemplated hereby.
8. Assignability and Binding Effect. No party hereto shall assign any of
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his or her rights under this Agreement without the prior written consent of each
of the other parties hereto. Subject to the provisions of the preceding
sentence, all the terms and conditions of this Agreement shall be binding upon
the parties hereto and their heirs, legatees, legal representatives, successors
and assigns, and shall inure to the benefit of all the foregoing.
9. Counterparts. This Agreement may be executed in counterparts and each
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such counterpart shall be deemed an original, irrespective of the date of its
execution and delivery, and said counterparts together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
EMPRESS ENTERTAINMENT, INC.
By: /s/ Peter A. Ferro, Jr.
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Title: Chief Executive Officer
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STOCKHOLDERS:
/s/ Peter A. Ferro /s/ Robert W. Kegley, Sr.
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Peter A. Ferro, Jr. individually and as voting Robert W. Kegley, Sr.
trustee
/s/ Charles P. Hammersmith, Jr /s/ William J. McEnery
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Charles P. Hammersmith, Jr. William J. McEnery, individually and
as trustee
/s/ Thomas J. Lambrecht /s/ William J. Sabo
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Thomas J. Lambrecht William J. Sabo
_____________________________________ _____________________________________
Edward T. McGowan, individually and as Gayle M. Franzen
trustee
THE MELISSA KATE LAMBRECHT THE PAUL JOHN LAMBRECHT TRUST
TRUST U/T/A DATED MAY 3, 1993 U/T/A DATED MAY 3, 1993
/s/ William J. Sabo /s/ William J. Sabo
By:---------------------------------- By:----------------------------------
William J. Sabo, Co-Trustee William J. Sabo, Co-Trustee
By: /s/ Peter A. Ferro, Jr. By: /s/ Peter A. Ferro, Jr.
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Peter A. Ferro, Jr., Co-Trustee Peter A. Ferro, Jr., Co-Trustee
THE MATTHEW THOMAS LAMBRECHT
TRUST U/T/A DATED MAY 3, 1993
/s/ William J. Sabo /s/ Martin McNally
By:__________________________________ -------------------------------------
William J. Sabo, Co-Trustee Martin McNally
By: /s/ Peter A. Ferro, Jr.
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Peter A. Ferro, Jr., Co-Trustee
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