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EXHIBIT 99.10.A
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
AND JOINT VENTURE INTEREST
DATED AS OF DECEMBER 31, 1997
BETWEEN AND AMONG BLACK HAWK GAMING &
DEVELOPMENT COMPANY, INC.
(A COLORADO CORPORATION)
AND
GILPIN VENTURES, INC.
(A COLORADO CORPORATION)
GOLDEN GAMBLE, INC.
(A COLORADO CORPORATION)
AND
GILPIN HOTEL VENTURE
(A COLORADO JOINT VENTURE)
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. AMENDED GROUND LEASE . . . . . . . . . . . . . . . . . 1
Section 1.3. ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4. AUTHORITIES . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5. BASE PRICE . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7. CLOSING . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.8. CLOSING DATE . . . . . . . . . . . . . . . . . . . . . 2
Section 1.9. ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10. EXCLUDED PROPERTY . . . . . . . . . . . . . . . . . . 2
Section 1.11. [This Section has been deleted.] . . . . . . . . . . . 2
Section 1.12. GAMING ACT . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.13. GAMING APPROVAL . . . . . . . . . . . . . . . . . . . 3
Section 1.14. GAMING COMMISSION . . . . . . . . . . . . . . . . . . 3
Section 1.15. GROUND LEASE . . . . . . . . . . . . . . . . . . . . . 3
Section 1.16. INTERESTS . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.17. INVENTORY . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.18. KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.19. LAND . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.20. LIQUOR ACT . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.21. LIQUOR AUTHORITY . . . . . . . . . . . . . . . . . . . 3
Section 1.22. LIQUOR CONSENT . . . . . . . . . . . . . . . . . . . 3
Section 1.23. LAND OWNERS . . . . . . . . . . . . . . . . . . . . . 3
Section 1.24. MATERIAL . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.25. AGREEMENT WITH GAMBLE . . . . . . . . . . . . . . . . 4
Section 1.26. PROPERTY . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.27. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . 5
Section 1.28 REALTY . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.29. TAXES . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.30. TRANSACTION . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
SALE AND PURCHASE OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1. SALE AND TRANSFER . . . . . . . . . . . . . . . . . . 5
Section 2.2. PURCHASE PRICE AND PAYMENT . . . . . . . . . . . . . . 6
Section 2.3. ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . 6
Section 2.4. LIABILITIES NOT ASSUMED BY BLACK HAWK . . . . . . . . 7
Section 2.5 PROFIT AND RESERVE DISTRIBUTIONS . . . . . . . . . . . 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GVI AND GAMBLE . . . . . . . . . . . . . . 8
Section 3. 1. ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . 8
Section 3.2. AUTHORIZATION OF AGREEMENT . . . . . . . . . . . . . . 8
Section 3.3. NO AUTHORIZATION REQUIRED . . . . . . . . . . . . . . 9
Section 3.4. TITLE TO PROPERTIES AND ASSETS . . . . . . . . . . . . 9
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Section 3.5. INSURANCE . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.6. INTERESTS . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.7. AUTHORITIES . . . . . . . . . . . . . . . . . . . . . 9
Section 3.8. TAXES . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.9. LITIGATION . . . . . . . . . . . . . . . . . . . . . 10
Section 3.10. COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . 10
Section 3.11. NO OTHER COMMITMENT TO SELL . . . . . . . . . . . . 10
Section 3.12. DISCLAIMER OF FRAUDULENT INTENT . . . . . . . . . . 10
Section 3.13. CONDITION OF PROPERTY . . . . . . . . . . . . . . . 10
Section 3.14. ACCURATE INFORMATION . . . . . . . . . . . . . . . . 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BLACK HAWK . . . . . . . . . . . . . . . 11
Section 4.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION . . . 11
Section 4.2. AUTHORIZATION OF AGREEMENT . . . . . . . . . . . . . 11
Section 4.3. LITIGATION . . . . . . . . . . . . . . . . . . . . . 11
Section 4.4. FINANCING . . . . . . . . . . . . . . . . . . . . . 11
Section 4.5. QUALIFICATION . . . . . . . . . . . . . . . . . . . 12
Section 4.6. NO APPROVALS REQUIRED . . . . . . . . . . . . . . . 12
Section 4.7. TAXES . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.8. COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . 12
Section 4.9. ACCURATE INFORMATION . . . . . . . . . . . . . . . . 12
Section 4.10 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . 12
ARTICLE V
COVENANTS AND OBLIGATIONS OF SELLERS . . . . . . . . . . . . . . . . . . . 13
Section 5.1. ACCESS TO INFORMATION AND FACILITIES . . . . . . . . 13
Section 5.2. CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . 13
Section 5.3. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 13
Section 5.4. COOPERATION . . . . . . . . . . . . . . . . . . . . 13
Section 5.5 CONTINUED EFFORTS . . . . . . . . . . . . . . . . . 13
ARTICLE VI
COVENANTS AND OBLIGATIONS OF BLACK HAWK . . . . . . . . . . . . . . . . . . 14
Section 6.1. CONTINUED EFFORTS . . . . . . . . . . . . . . . . . 14
Section 6.2. GAMING APPROVAL, LIQUOR AND OTHER CONSENTS . . . . . 14
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Section 6.3. FINANCING . . . . . . . . . . . . . . . . . . . . . 14
Section 6.4. CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . 14
Section 6.5. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 14
Section 6.6 PARKING OBLIGATIONS . . . . . . . . . . . . . . . . 14
ARTICLE VII
MUTUAL COVENANTS AND OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . 15
Section 7.1. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . 15
Section 7.2. ADDITIONAL ACTIONS, ETC . . . . . . . . . . . . . . 15
Section 7.3 CAPITAL EXPENDITURES/POLICY BOARD . . . . . . . . . 16
Section 7.4 STAY OF ARBITRATION . . . . . . . . . . . . . . . . 16
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATION OF BLACK HAWK TO CLOSE . . . . . . . . . 17
Section 8.1. ACCURACY OF REPRESENTATIONS AND
PERFORMANCE OF CONDITIONS . . . . . . . . . . . . . 17
Section 8.2. NO PROCEEDING OR LITIGATION . . . . . . . . . . . . 17
Section 8.3. REGULATORY APPROVALS . . . . . . . . . . . . . . . . 17
Section 8.4. FIRPTA COMPLIANCE . . . . . . . . . . . . . . . . . 17
Section 8.5. NO OPPOSITION . . . . . . . . . . . . . . . . . . . 17
Section 8.6. DELIVERIES PRECEDENT TO BLACK HAWK'S
OBLIGATIONS TO CONSUMMATE THE PURCHASE . . . . . . . 17
Section 8.7 NEW OR MODIFIED AGREEMENTS . . . . . . . . . . . . . 18
Section 8.8 GENERAL RELEASE AND WAIVER . . . . . . . . . . . . . 18
Section 8.9 PURCHASE OF REALTY . . . . . . . . . . . . . . . . . 18
Section 8.10 CANCELLATION OF AGREEMENTS . . . . . . . . . . . . . 14
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATION OF SELLERS TO CLOSE . . . . . . . . . . 19
Section 9.1. ACCURACY OF REPRESENTATIONS AND PERFORMANCE OF
CONDITIONS . . . . . . . . . . . . . . . . . . . . . 19
Section 9.2. NO PROCEEDING OR LITIGATION . . . . . . . . . . . . 19
Section 9.3. REGULATORY APPROVAL . . . . . . . . . . . . . . . . 19
Section 9.4. NO OPPOSITION . . . . . . . . . . . . . . . . . . . 19
Section 9.5. PAYMENT . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.6. APPROVAL . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.7. CERTIFICATE OF BUYER . . . . . . . . . . . . . . . . 19
Section 9.8. CONSENTS . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.9. NEW OR MODIFIED AGREEMENTS . . . . . . . . . . . . . 20
Section 9.10. GENERAL RELEASE AND WAIVER . . . . . . . . . . . . . 20
Section 9.11. PURCHASE OF REALTY . . . . . . . . . . . . . . . . . 20
Section 9.12. ASSUMPTION AGREEMENT . . . . . . . . . . . . . . . . 20
Section 9.13. DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . 20
Section 9.14. PARKING . . . . . . . . . . . . . . . . . . . . . . 20
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ARTICLE X
THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 10.1. CLOSING AND CLOSING PROVISIONS . . . . . . . . . . . 20
Section 10.2. DELIVERIES BY SELLERS . . . . . . . . . . . . . . . 21
Section 10.3. DELIVERIES BY BLACK HAWK . . . . . . . . . . . . . . 21
ARTICLE XI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 11.1. NON-PERFORMANCE . . . . . . . . . . . . . . . . . . 21
ARTICLE XII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 12.1. INDEMNIFICATION . . . . . . . . . . . . . . . . . . 22
Section 12.2. CLAIMS FOR INDEMNIFICATION . . . . . . . . . . . . . 22
Section 12.3. DEFENSE BY BLACK HAWK . . . . . . . . . . . . . . . 23
Section 12.4. LIMITATIONS ON CLAIMS . . . . . . . . . . . . . . . 23
ARTICLE XIII
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.1. INVESTIGATION . . . . . . . . . . . . . . . . . . . 23
Section 13.2. COMMISSIONS . . . . . . . . . . . . . . . . . . . . 23
Section 13.3. EXPENSES . . . . . . . . . . . . . . . . . . . . . . 24
Section 13.4. HEADINGS . . . . . . . . . . . . . . . . . . . . . . 24
Section 13.5. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . 24
Section 13.6. RIGHTS OF PARTIES . . . . . . . . . . . . . . . . . 24
Section 13.7. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . 24
Section 13.8. BINDING AGREEMENT . . . . . . . . . . . . . . . . . 24
Section 13.9. NOTICES . . . . . . . . . . . . . . . . . . . . . . 25
Section 13.10. APPLICABLE LAW AND REMEDIES . . . . . . . . . . . . 25
Section 13.11. EXPENSES OF ENFORCEMENT . . . . . . . . . . . . . . 26
Section 13.12. ADDITIONAL INSTRUMENTS AND ASSISTANCE . . . . . . . 26
Section 13.13. SEVERABILITY . . . . . . . . . . . . . . . . . . . . 26
Section 13.14. PRONOUNS AND TERMS . . . . . . . . . . . . . . . . . 26
Section 13.15. TIME OF ESSENCE . . . . . . . . . . . . . . . . . . 26
Section 13.16. DISCLOSURE . . . . . . . . . . . . . . . . . . . . . 26
Section 13.17. TAXES . . . . . . . . . . . . . . . . . . . . . . . 26
Section 13.18. ENTIRE AGREEMENT, MODIFICATION AND WAIVER . . . . . 26
Section 13.19. ARBITRATION . . . . . . . . . . . . . . . . . . . . 27
Section 13.20. SUBMISSION TO JURISDICTION . . . . . . . . . . . . . 27
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AGREEMENT FOR PURCHASE AND SALE OF ASSETS
AND JOINT VENTURE INTEREST
This Agreement is made this 31st day of December 1997 by, between and
among Black Hawk Gaming & Development Company, Inc., a Colorado corporation,
formerly known as Mountain Casino Properties, Inc. (hereinafter "Black Hawk"),
Gilpin Ventures, Inc., a Colorado corporation ("GVI"), Golden Gamble, Inc., a
Colorado corporation ("Gamble") and Gilpin Hotel Venture, a Colorado joint
venture ("GHV"). Together, GVI and Gamble are referred to as "Sellers."
WHEREAS, Black Hawk and GVI are the sole joint venturers of GHV.
WHEREAS, the parties wish to provide for (i) the termination of the joint
venture known as Gilpin Hotel Venture, and all agreements between and/or among
Black Hawk, GVI and GHV specifically including those described in Section
1.26B.; (ii) the sale of all GVI's and Gamble's interests of whatever kind and
nature in GHV and its properties, real, personal and appurtenant thereto; and
(iii) the payment of cash by Black Hawk to GVI and Gamble in consideration
therefor.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, GHV, Sellers and Black Hawk,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, certain terms used in this Agreement and
not otherwise defined herein shall have the meanings designated below:
Section 1.1. AGREEMENT means all or any part of this Agreement, including
schedules, exhibits, and appendices, as any of the foregoing may be amended,
modified or supplemented and incorporated in this Agreement with the consent of
the parties, expressed in writing from time to time.
Section 1.2. AMENDED GROUND LEASE shall mean that certain Amended and
Restated Lease currently between, or to be entered into immediately after
Closing by, Black Hawk and Gilpin Gold, Inc. ("Gold") together as Lessor, and
GHV as Lessee. Reference to the Amended Ground Lease, for purposes of Section
8.7, shall also mean the Memorandum of Ground Lease attached hereto as Exhibit
C.
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Section 1.3. ASSETS is defined in subparagraph A. of the definition of
Property at Section 1.26.
Section 1.4. AUTHORITIES is defined in subparagraph D. of the definition
of Property at Section 1.26.
Section 1.5. BASE PRICE is defined in subparagraph A. of Section 2.2.
Section 1.6. BUSINESS means the limited gaming casino, restaurant, bar
and retail businesses operated and conducted by GHV in the State of Colorado
relating to the Property.
Section 1.7. CLOSING shall have the meaning specified in Section 10.1.
Section 1.8. CLOSING DATE shall have the meaning specified in Section
10.1.
Section 1.9. ENCUMBRANCES means any and all encumbrances, security
interests, liens, taxes, claims, liabilities, options, commitments, charges,
restrictions or other obligations of whatsoever kind, quantity or nature,
whether accrued, absolute, contingent or otherwise, excepting the lien for ad
valorem taxes or other taxes not yet due and payable, governmental conditions
and restrictions under the Authorities and contractual terms and conditions
which constitute a part of the written terms and conditions of the Interests.
Section 1.10. EXCLUDED PROPERTY means (i) Sellers' bank accounts,
receivables and cash on hand at the Closing; (ii) the properties, assets,
privileges, rights and interests (whether tangible or intangible, real,
personal or mixed), if any, identified in Schedule 1.10 as being excluded from
the Property to be transferred to Black Hawk; (iii) any insurance policy, bond,
letter of credit, or other similar item, and any cash surrender value in regard
thereto owned personally by Sellers; (iv) all books and records that Sellers
are required by law to retain or that relate solely to internal corporate
matters; (v) all claims, rights and interests in and to any refunds for
federal, state or local franchise, or income or other taxes or fees of any
nature whatsoever for periods prior to the Closing Date excepting only parking
impact fees, gaming taxes or other similar items; and (vi) any pension, profit
sharing or employee benefit plans owned personally by Sellers. Until the
Closing and for a reasonable time thereafter, Black Hawk shall have the right
upon reasonable notice, for reasonable cause and during normal business hours
to inspect and copy the Excluded Property in clause (iv) above subject to a
continuing duty to maintain the confidentiality thereof.
Section 1.11. [THIS SECTION HAS BEEN DELETED.]
Section 1.12. GAMING ACT means the Colorado Limited Gaming Act, as
amended, and all rules and regulations promulgated thereunder.
Section 1.13. GAMING APPROVAL means the consent issued by the Gaming
Commission to Black Hawk for the operation of the Business (subject to and
together with the Amended Ground Lease as a single operating unit).
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Section 1.14. GAMING COMMISSION means the Colorado Limited Gaming
Commission or any other Colorado agency which succeeds in whole or in part to
its jurisdiction so far as the subject matter of this Agreement is concerned.
Section 1.15. GROUND LEASE means that certain ground lease, dated as of
February 28, 1992, between Black Hawk and Gold, as Lessor, and GHV, as Lessee.
Section 1.16. INTERESTS is defined in subparagraph B. of the definition of
Property at Section 1.26.
Section 1.17. INVENTORY means saleable goods, food and beverages used by
customers of the Business as of the Closing Date.
Section 1.18. KNOWLEDGE means actual knowledge of the person referenced
and constructive knowledge of facts which would have been discovered after due
inquiry. Notwithstanding the foregoing, a person also has "knowledge" when
known facts and circumstances create a reasonable doubt as to the accuracy of
any covenant, representation, warranty, or other material statement made
herein. If the person referenced is an entity, "knowledge" of the
representative of the entity having executive responsibility for the subject
matter referenced is knowledge of the entity.
Section 1.19. LAND means the real property owned by Black Hawk and Gold,
currently leased to GHV pursuant to the Ground Lease.
Section 1.20. LIQUOR ACT means the Colorado Liquor Code and the municipal
liquor ordinance as amended and the rules and regulations issued thereunder
applicable to the Business.
Section 1.21. LIQUOR AUTHORITY means the Colorado Liquor License Division
of the Department of Revenue and the local Liquor Licensing Authority which
have asserted jurisdiction over the Business.
Section 1.22. LIQUOR CONSENT means the consent issued by the Liquor
Authority to the operation of the Business by Black Hawk in a manner
substantially similar to the current operation of GHV's Business.
Section 1.23. LAND OWNERS are Black Hawk and Gold, the sole owners of the
Land.
Section 1.24. MATERIAL means having significant consequences to the
operations, properties or financial condition of the entity to which the event,
representation or warranty inures.
Section 1.25. AGREEMENT WITH GAMBLE shall mean that portion of the
Development, Management and Consultancy Agreement described in Section 1.26B.
pursuant to which Gamble is entitled to certain consultancy fees.
Section 1.26. PROPERTY means all of Sellers' right, title and interest in
and to the assets and properties, except the Excluded Property, used in the
Business of whatever kind, character
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and description, and whether tangible, intangible, corporeal or incorporeal,
real, personal or mixed, and wherever located. Without limiting the generality
of the foregoing, the Property includes the following Assets, Interests,
Authorities, and Proprietary Information:
A. ASSETS mean all of Sellers' fixed or tangible or corporeal
movable assets, including, without limitation, Sellers' interest in the GHV
bank accounts, any GHV cash on hand, GHV accounts receivable, GHV checks,
buildings, improvements, slot machines, chips, gambling tables, restaurant
tables and chairs, kitchen equipment, utensils, materials and supplies,
maintenance manuals, word processors, typewriters and other business machines,
tools, trade fixtures, furniture, furnishings, office equipment, facilities and
supplies, as set forth in Schedule 1.26A and Inventory as set forth in Schedule
1.17.
B. INTERESTS means all of Sellers' rights, privileges, benefits
and interests under certain agreements dated on or about February 28, 1992 and
others as follows:
(i) Gilpin Hotel Joint Venture Agreement (the "Joint
Venture Agreement") between Black Hawk and GVI;
(ii) Development, Management and Consulting Agreement
(the "Management Agreement") among GHV, Black Hawk
and Gamble;
(iii) in connection with the Business, all contracts,
agreements, consents, or licenses, permits or
certificates (except those included as
Authorities), including computer software licenses;
agreements, permits, leases and arrangements with
respect to intangible or personal property or
interests therein, including passenger vehicle
services; equipment leases and motor vehicle
leases; employment agreements whether oral or
written; consents; agreements with suppliers and
customers; business licenses; prepaid expenses; and
any sales agent or sales affiliate agreements used
or owned in connection with the Business.
C. [INTENTIONALLY DELETED].
D. AUTHORITIES means all of Sellers' right, title and interest
in and to licenses or authorizations granted by the Gaming Commission and
Liquor Authority including any as a limited gaming operation and sale of
alcoholic beverages owned by GHV and used to develop and operate the Business
all as set forth in Schedule 1.26D.
E. PROPRIETARY INFORMATION means all of Sellers' right, title
and interest in and to information, records and data utilized in the operation
of the Business, including, without limitation, business trade secrets, any and
all names and addresses of customers, customer gaming histories and records,
employee records, and repair and maintenance records respecting the Assets.
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F. TRADE NAME means all of Sellers' right, title and interest
in and to the trade name "Gilpin Hotel Casino" and all variants thereof, and
any associated trademarks.
Section 1.27. PURCHASE PRICE shall have the meaning specified in Section
2.2.
Section 1.28. REALTY means the real properties described in the "Agreement
for Purchase and Sale of Real Property" (the "Real Estate Agreement") of even
date herewith between Black Hawk and Gold, as currently subject to either (i) a
lease dated February 28, 1992, or (ii) the Amended Ground Lease, each as
between Black Hawk and Gold as Lessor, and GHV as Lessee.
Section 1.29. TAXES means any and all taxes, sums or amounts assessed or
assessable, levied and due or which may be levied and become due by any
federal, state or county or other local governmental authority or agency,
including without limitation, real and personal property taxes, income taxes,
whether measured by gross or net income or profit, franchise, excise, sales and
use taxes, employee and employee withholding, social security, unemployment
taxes and any other taxes required to be paid by the respective parties hereto,
including interest and penalties in respect thereof, whether disputed or not,
and whether accrued, contingent, due, absolute, deferred, unknown or other,
together with any and all penalties, interests and additions on or to all such
taxes, sums or amounts.
Section 1.30. TRANSACTION means the transaction contemplated by this
Agreement.
ARTICLE II
SALE AND PURCHASE OF PROPERTY
Section 2.1. SALE AND TRANSFER. Subject to the terms and conditions set
forth in this Agreement, Sellers shall sell, convey, transfer, assign and
deliver to Black Hawk and Black Hawk shall purchase and receive from Sellers at
the Closing, all of the Property, excepting only the Excluded Property. The
Material Assets, Inventory, Interests and Authorities, are set forth and
described in Schedules 1.26A, 1.17., and 1.26D, respectively. Conveyance of
the Assets, Inventory, Interests and Authorities shall be made by the
Assignment and Bill of Sale in the form attached hereto as Exhibit A along with
such other documents of conveyance as reasonably requested by Black Hawk.
Notwithstanding the foregoing, the parties agree that if Black Hawk and GVI
decide to structure the sale of the GVI's interest in the Property as a sale of
all of GVI's stock in lieu of an asset sale, the parties hereto shall
negotiate in good faith and use all reasonable efforts to enter into, as
quickly as possible after such determination, (a) a Purchase and Sale of Stock
Agreement ("Stock Sale Agreement") with respect to the purchase and sale of all
of GVI's stock, which agreement shall include all of the material terms and
provisions set forth herein as applicable, and (b) an agreement for the
termination and release of all rights of Gamble in and to consulting fees under
Section 9g of the Management Agreement, effective upon completion and
consummation of the Closing, in form substantially similar to Exhibit F
attached hereto.
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Section 2.2. PURCHASE PRICE AND PAYMENT.
A. BASE PRICE. The Purchase Price to be paid by Black Hawk for the
Property shall be a total of Five Million Two Hundred and Fifty Thousand
Dollars ($5,250,000.00) (the "Base Price").
B. EARNEST MONEY DEPOSIT. GVI acknowledges Black Hawk's deposit
with GVI of the sum of Fifty Thousand Dollars ($50,000) which shall be a non-
refundable deposit. The deposit money is hereinafter referred to as "Earnest
Money Deposit." On the Closing Date, the Earnest Money Deposit shall be
credited against the Base Price.
C. PAYMENT OF BASE PRICE. The Base Price, shall be payable to GVI
and Gamble at the Closing as follows:
(1) by credit for the $50,000 of Earnest Money Deposit;
(2) by payment of $4,950,000 to GVI; and
(3) by payment of $250,000 to Gamble.
D. EXTENSION OF CLOSING DATE. The Closing Date may be extended
("Extension") for not more than three one-month periods upon written notice by
Black Hawk delivered to Sellers not less than 5 days prior to the Closing Date,
together with payment by Black Hawk of $50,000 ("Extension Fee") with each
delivery of a notice of Extension. Any such amounts paid for Extensions shall
be nonrefundable deposits, provided however that each Extension Fee shall be
credited against the Base Price to be paid at Closing if such fee was paid
within 30 days prior to the date the Closing occurs.
E. ALLOCATION. The Purchase Price shall be allocated among the
elements as described in Schedule 2.2E. The parties shall report for all
purposes the transactions contemplated by this Agreement in accordance with
such allocation. The parties shall agree to the content of IRS Form 8594 at
Closing.
Section 2.3. ASSUMPTION OF LIABILITIES. GVI is an obligor on and liable
for numerous GHV obligations including, but not limited to: (i) the Note
payable to the order of Dolly's Casino, Inc. (the "Dolly's Note") in connection
with the purchase of the Pic-A-Dilly Casino; (ii) the Note payable to the order
of Prime Financial Corp. in connection with the purchase of certain slot
machines and equipment; and (iii) the Advance Account described in Paragraph 14
of the Joint Venture Agreement. As a condition to Closing, Black Hawk shall
execute an Assumption Agreement in the form attached hereto as Exhibit B under
which it will assume all obligations of and to GHV, and release GVI and Gamble,
and all shareholders, directors, officers and employees of GVI and Gamble (the
"Released Parties") from all obligations of and to GHV, which release shall
include the removal of the Released Parties from any and all obligation
documents to which a Released Party is a party. In connection therewith, Black
Hawk agrees to either (i) to obtain from Dolly's Casino, Inc. a release of the
real property on which the Pic-A-Dilly Casino is located (the "Pic Property"),
which is currently subject to a "springing lease" in the event of a default
under
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the Dolly's Note, or (ii) provide in the Assumption Agreement that in the event
of a default by Black Hawk under the Dolly's Note and the exercise by Dolly's
Casino, Inc. of its right to invoke the "springing lease" on the Pic Property,
Black Hawk will be liable to Gold for reimbursement of any offset of rent under
such "springing lease" from Dolly's Casino, Inc.
Section 2.4. LIABILITIES NOT ASSUMED BY BLACK HAWK. Notwithstanding any
other provision in this Agreement to the contrary (including any other
provision with the same or similar qualifying language as the foregoing), Black
Hawk shall not be deemed by anything contained in this Agreement to have
assumed, and Sellers hereby agree to pay and discharge when due all liabilities
of Sellers not listed in Exhibit B, including, but not limited to:
A. Any liability of Sellers to any person or entity the existence of
which constitutes a breach of any covenant, agreement, representation, or
warranty of Sellers contained in this Agreement;
B. Any liability of Sellers (but not GHV) for any Taxes (as defined
in Section 1.29);
C. Any accrued or other liability for contributions or payments to
be made in respect of service under any employee pension benefit plan (as
defined in Section 3(2)) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") or other employee benefit plan maintained for the
employees of Sellers only (and not GHV); and
D. Any personal liabilities of Sellers asserted by any person other
than Black Hawk or its officers, directors or agents, and not set forth on
Schedule 2.4D.
Section 2.5 PROFIT AND RESERVE DISTRIBUTIONS. (i) As soon as possible
after receiving GHV's results of operations for the year ended December 31,
1997 as audited by Deloitte & Touche LLP, a distribution will be made to GVI in
accordance with Paragraph 14A of the Joint Venture Agreement in the amount,
when added to previous distributions to GVI of net income made during 1997,
will equal 50% of audited net income for the year 1997. Moreover, during the
period from January 1, 1998 and until the Closing Date, GHV shall make
distributions in a manner consistent with past practices, the determination of
which may be reviewed by Deloitte & Touche LLP, to insure consistency of
accounting principles with prior periods. If the Closing occurs, all such
distributions shall be made without adjustment for reserves (except those
authorized under Section 7.3) and without repayment by GVI to the Advance
Account. If Closing does not occur, such distributions and activities for
calendar year 1998 will be subject to the provisions of the Advance Account.
Gamble shall be paid all monies due under the Gamble Agreement through the date
of the Closing.
(ii) In addition to the payments above, at the Closing, GHV
shall establish a $1,500,000 operational reserve (described on the GHV Balance
Sheet as the operating account, credit card account, petty cash, change banks,
poker podium, black jack table fills, slot hopper fills, house bank poker table
fills, currency/cash/checks, and miscellaneous), and at the GVI Closing, all
other reserve amounts shall be distributed one-half to GVI and one-half to
Black Hawk, which distribution may be reviewed by Deloitte & Touche LLP, all of
which reserves shall be maintained in the ordinary course of business.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GVI AND GAMBLE
Notwithstanding any statement in this Article III or otherwise in this
Agreement to the contrary, the representations and warranties of GVI and Gamble
shall not be deemed to cover the Business (except as otherwise expressly
provided herein) or any matter affecting the casino industry generally.
Subject to the foregoing qualification, each of GVI and Gamble for a period of
one year from the date of this Agreement represents, covenants, and warrants to
Black Hawk as follows:
Section 3. 1. ORGANIZATION AND GOOD STANDING. Each of GVI and Gamble,
respectively, is a corporation duly organized, validly existing and in good
standing under the laws of Colorado, with all requisite power and authority to
own, operate and lease its properties and to carry on its business in general
and as presently conducted.
Section 3.2. AUTHORIZATION OF AGREEMENT. The execution and delivery of
this Agreement by GVI and Gamble, the consummation of the Transaction, and the
performance by GVI and Gamble of their respective obligations hereunder have
been approved by their respective Board of Directors and shareholders, and are
within their respective power and authority, will not contravene or constitute
a material default under any provision of their respective organizational
documents, and, to each of GVI's and Gamble's Knowledge, will not result in any
material breach of any term, condition or provision of, or constitute a
material default under, any note, mortgage, indenture, contract, agreement,
judgment or order to which each of GVI and Gamble is a party and, to GVI's and
Gamble's Knowledge, will not contravene any provision of applicable law or
regulation. Any actions required by GVI's and Gamble's respective articles of
incorporation, any applicable agreements, or bylaws necessary to authorize the
execution, delivery and performance of this Agreement by each of GVI and Gamble
respectively and the consummation of the Transaction have been duly and validly
taken by each of GVI and Gamble on or prior to the date hereof, and certified
copies of any such approval, resolutions or minutes shall be delivered to Black
Hawk upon execution of this Agreement.
Section 3.3. NO AUTHORIZATION REQUIRED. No authorization or approval of,
or filing with, any governmental agency, authority or other body or any other
third persons will be required in connection with GVI's and Gamble's execution
and delivery of this Agreement or their consummation of the Transaction and
thereby, except as expressly referred to in this Agreement including, without
limitation, Section 8.3.
Section 3.4. TITLE TO PROPERTIES AND ASSETS. To GVI's Knowledge, GVI has
good and marketable title to its one-half undivided share of all Assets,
Interests, Proprietary Information and Authorities free and clear of all
Encumbrances, except (i) those approved in writing by Black Hawk prior to
Closing and contained in the documents constituting or creating or evidencing
the Authorities or Interests, or limitations on title warranties contained in
instruments of conveyance provided to and approved by Black Hawk, or otherwise
disclosed in this Agreement or on Schedule 3.4, (ii) the lien of current taxes
not yet due and payable, and (iii) immaterial matters that are not in the
aggregate, substantial in amount and do not materially detract from or
interfere with the operation of the Business. GVI is not a party to, nor to
GVI's Knowledge is the
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Property subject to any judgment, judicial order, writ, injunction or decree
that materially adversely affects the Property or the use thereof by GVI or
GHV.
Section 3.5. INSURANCE. Schedule 3.5 to this Agreement is a description
of any insurance policies held by GVI and Gamble relating to the Property and
the Business (not including any such policies held by GHV).
Section 3.6. INTERESTS. To the Knowledge of GVI the Interests are in
full force and effect, valid and enforceable in accordance with their
respective terms, and there are no existing defaults of GVI or events of
default that, with the giving of notice or lapse of time, or both, would
constitute defaults of GVI under any of those Interests, nor are material
amendments pending with respect to any of those Interests. Except as set forth
in Schedule 3.6, GVI has not received notice of, nor made any claimed default
with respect to, any of the Interests.
Section 3.7. AUTHORITIES. To GVI's Knowledge, the Authorities are in
full force and effect, materially unimpaired by any act or omission of GVI.
Section 3.8. TAXES. To GVI's Knowledge, all federal, state and local
income, excise or franchise tax returns and real estate and sales and use tax
returns or other filings or returns for Taxes required to be filed by GVI in
connection with the Business have been filed, and all Taxes owed in connection
with the Business have been paid, except Taxes which have not yet accrued or
otherwise become due or which, as described in Schedule 3.8, are being
contested in good faith and by appropriate proceedings. Except as set forth in
Schedule 3.8, to GVI's Knowledge, there are no audits pending or any
outstanding agreements or waivers extending the statutory period of limitations
applicable to any Taxes or tax return or document for any period.
Section 3.9. LITIGATION. Except as expressly set forth on Schedule 3.9,
or otherwise of which Black Hawk has knowledge, neither GVI nor Gamble has been
served with any summons or complaint and there is no action or suit, equitable
or legal to which GVI or Gamble is a party, nor any administrative, arbitration
or other proceeding pending or, to GVI's or Gamble's Knowledge, threatened
against neither GVI nor Gamble which could, if adversely decided, have a
material adverse effect upon operation of the Business or Property. Neither
GVI nor Gamble is in default with respect to any currently effective judgment,
order, writ, injunction or decree issued by any court identifying GVI or Gamble
therein. Neither GVI nor Gamble is charged or, to the Knowledge of GVI or
Gamble, threatened with or under investigation with respect to, any violation
of any provision of any federal, state, municipal or other law or
administrative rule or regulation.
Section 3.10. COMPLIANCE WITH LAWS. With respect to the Business, to
GVI's and Gamble's Knowledge, to the date of this Agreement GVI and Gamble have
complied and through the Closing will continue to comply in all material
respects with federal, state and local laws, rules and regulations applicable
to the Business.
Section 3.11. NO OTHER COMMITMENT TO SELL. No Property is subject to any
written or oral commitment or arrangement, in whole or in part, for sale or
transfer, other than as contemplated by this Agreement.
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Section 3.12. DISCLAIMER OF FRAUDULENT INTENT. The Transaction has been
undertaken in good faith, considering GVI's and Gamble's obligations to any
person or entity to whom GVI and Gamble owes a right to payment, whether or not
the right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured (collectively such persons with such claims are called "creditors"
under this Section), and has undertaken the Transaction without any intent to
hinder, delay or defraud any such creditors, and either has disclosed in the
ordinary course of business or will undertake to disclose to all such creditors
the existence of this Transaction, and has not and will not conceal this
Transaction or the proceeds of this Transaction from any such creditors.
Section 3.13. CONDITION OF PROPERTY. All buildings, structures, fixtures,
equipment, inventory and other tangible personal property which constitutes the
Property are not subject to any warranty of condition by GVI or Gamble, and the
Property shall be transferred as is, where is; provided however, that neither
GVI nor Gamble shall take any action which would limit or adversely modify any
warranties or guaranties of manufacturers, vendors, suppliers, materialmen,
laborers and the like which pertain to the Property.
Section 3.14. ACCURATE INFORMATION. No representation and warranty made
by GVI or Gamble in this Agreement nor any statement or certificate furnished
or to be furnished by it pursuant to this Agreement contains or will contain
any untrue statement of a material fact or omits or will omit any material fact
the omission of which would be misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BLACK HAWK
Black Hawk hereby represents and warrants to GVI and Gamble as follows:
Section 4.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION. Black Hawk
is a Colorado corporation duly organized, validly existing and in good-standing
under the laws of the State of Colorado. Black Hawk possesses all requisite
power and authority to own, operate and lease its properties and carry on its
business as presently conducted, to acquire and own the Property and conduct
the Business, and to enter into this Agreement and complete the Transaction
subject to obtaining applicable consents and approvals.
Section 4.2. AUTHORIZATION OF AGREEMENT. All actions required by Black
Hawk's organizational documents or the laws of its formation, necessary to
authorize the execution, delivery and performance of this Agreement by Black
Hawk and the consummation of the Transaction, including approval of its Board
of Directors, have been duly and validly taken on or prior to the date hereof,
and certified copies of such approval resolutions or minutes shall be delivered
to Sellers upon execution of this Agreement.
Section 4.3. LITIGATION. There is no action, suit or proceeding pending
or, to the Knowledge of Black Hawk, threatened against Black Hawk which might
interfere with its ability to consummate the Transaction. Black Hawk is not in
default with respect to any judgment, order, writ, injunction, decree, demand
or assessment issued by any court or of any federal, state, municipal or other
governmental agency, board, commission, bureau, instrumentality or department.
Black Hawk is not charged or, to the Knowledge of Black Hawk, threatened with
or
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under investigation with respect to, any violation of any provision of any
federal, state, municipal or other law or administrative rule or regulation.
Section 4.4. FINANCING. Black Hawk intends to use diligent efforts to
obtain all monies or requisite financing necessary to fund and deliver the
required portion of the Purchase Price to GVI and Gamble at the Closing and
believes such efforts have a reasonable probability of success. More
specifically, Black Hawk will use its best efforts to: (i) file a registration
statement with the United States Securities and Exchange Commission as soon as
reasonably practicable;(ii) to consummate an offering of its securities
thereunder; and/or (iii) obtain private debt or equity financing necessary to
fund the required portion of the Purchase Price at Closing.
Section 4.5. QUALIFICATION. Subject to the conditions precedent in
Article VIII, Black Hawk is, or at the Closing will be, qualified to be a
transferee of the Authorities under all applicable federal, state and local
laws.
Section 4.6. NO APPROVALS REQUIRED. No authorization or approval of, or
filing with, any governmental agency, authority or other body or any other
third persons will be required in connection with Black Hawk's execution and
delivery of this Agreement or its consummation of the transactions contemplated
hereby and thereby, except Gaming Approval, Liquor Consent, the consent of
Dolly's Casino, Inc. and the consent of Prime Financial Corp. as expressly
referred to in this Agreement and except as otherwise expressly provided in
this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby are not events
which of themselves or with the giving of notice or the passage of time or both
would constitute, on the part of Black Hawk, of themselves or with the giving
of notice or the passage of time or both would constitute, on the part of Black
Hawk, a violation of or conflict with or result in any breach of, or default
under the terms, conditions or provisions of, any order, writ, injunction,
decree, judgment, law or regulation, relating to Black Hawk or of Black Hawk's
organizational documents or any agreement or instrument to which Black Hawk is
a party or by or to which it or any of its assets or properties are bound or
subject.
Section 4.7. TAXES. To Black Hawk's Knowledge, all federal, state and
local income, excise or franchise tax returns and real estate and sales and use
tax returns or other filings or returns for Taxes required to be filed by Black
Hawk or GHV in connection with the operation of the Business have been filed
and all Taxes owned in connection with its operations have been paid, except
Taxes which have not yet accrued or otherwise become due or which are being
protested in good faith and by appropriate proceedings. To Black Hawk's
Knowledge, there are no audits pending or any outstanding agreements or waivers
extending the statutory period of limitations applicable to any Taxes or tax
return or document for any period.
Section 4.8. COMPLIANCE WITH LAWS. To Black Hawk's Knowledge, to the
date of this Agreement Black Hawk has complied and through the Closing will
continue to comply in all material respects with federal, state and local laws,
rules and regulations effecting its assets or the operation of the Business.
Section 4.9. ACCURATE INFORMATION. No representation and warranty made
by Black Hawk in this Agreement nor any statement or certificate furnished or
to be furnished by it
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pursuant to this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit any material fact the omission of which
would be misleading.
Section 4.10 FINANCIAL STATEMENTS. Black Hawk has delivered to GVI
balance sheets of GHV as of December 31, 1996, and the related statements of
operations, stockholders' equity and changes in financial position for these
years then ending, certified by Deloitte & Touche LLP, independent certified
public accountants. To Black Hawk's Knowledge, these financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied followed and fairly present the financial position of GHV
and the results of operations of GHV for the periods indicated, and since
December 31, 1996, there has been no material change in the financial condition
of GHV.
ARTICLE V
COVENANTS AND OBLIGATIONS OF SELLERS
Sellers covenant and agree that between the date of this Agreement and
Closing:
Section 5.1. ACCESS TO INFORMATION AND FACILITIES. Sellers will afford
Black Hawk and its representatives full access during normal business hours to
all facilities, properties, books, accounts, records, contracts and documents
of or relating to the Business and Property in Sellers' possession and control.
Sellers shall furnish or cause to be furnished to Black Hawk and its
representatives all data and information concerning the Property and the
Business as shall reasonably be requested by Black Hawk.
Section 5.2. CONDUCT OF BUSINESS. Sellers will use their reasonable
efforts to: (a) keep available to Black Hawk the services of GHV's present
employees; and (b) maintain and preserve GHV's business relationships with
suppliers, customers, and others having business relationships with GHV.
Section 5.3. NEGATIVE COVENANTS. Sellers will not (a) modify, amend,
cancel or terminate any material interest in the Property; (b) enter into, make
or cancel any material contracts regarding the Property; (c) sell, assign,
lease, hypothecate or otherwise transfer or dispose of, any of the Property
except as permitted by this Agreement; or (d) materially disrupt existing
customer, vendor or service relationships.
Section 5.4. COOPERATION. Sellers agree to cooperate with Black Hawk in
connection with Black Hawk's obligation to obtain and secure the Gaming
Approval and Liquor Consent to the assignment of the Authorities and will
cooperate in obtaining any other consents or approvals required to consummate
the Transaction.
Section 5.5. CONTINUED EFFORTS. Sellers will use their continual
reasonable efforts to (a) cause to be fulfilled and satisfied all of the
conditions to the Closing; (b) cause to be performed all of the matters
required upon the Closing; and (c) take such steps and do such acts as may be
necessary to make all of their warranties and representations true and correct
as of the Closing Date with the same effect as if the same has been made, and
this Agreement had been dated, as of the Closing Date.
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ARTICLE VI
COVENANTS AND OBLIGATIONS OF BLACK HAWK
Black Hawk hereby covenants and agrees that from the date of this
Agreement until the Closing Date:
Section 6.1. CONTINUED EFFORTS. Black Hawk will use its continual
reasonable efforts to (a) cause to be fulfilled all of the conditions to the
Closing to be satisfied by it; (b) cause to be performed all of the matters
required of it upon the Closing; and (c) take such steps and do such acts as
may be necessary to make all of its warranties and representations true and
correct as of the Closing with the same effect as if the same had been made,
and this Agreement had been dated, as of the Closing Date.
Section 6.2. GAMING APPROVAL, LIQUOR AND OTHER CONSENTS. Black Hawk
shall promptly file any necessary applications and provide all information
necessary in connection with obtaining the Gaming Approval and the Liquor
Consent; it will also promptly undertake to obtain the approvals and consents
of Dolly's Casino, Inc., Prime Financial Corp. and any other necessary
approvals or consents.
Section 6.3. FINANCING. Black Hawk reaffirms as a covenant the
representation and warranty set forth in Section 4.4.
Section 6.4. CONDUCT OF BUSINESS. Black Hawk will use its reasonable
efforts to: (a) maintain the services of GHV's present employees; and (b)
maintain and preserve GHV's business relationships with suppliers, customers,
and others having business relationships with GHV.
Section 6.5. NEGATIVE COVENANTS. Black Hawk will not (a) modify, amend,
cancel or terminate any material interest in the Property; (b) enter into, make
or cancel any material contracts regarding the Property; (c) sell, assign,
lease, hypothecate or otherwise transfer or dispose of, any of the Property
except as permitted by this Agreement; or (d) materially disrupt existing
customer, vendor or service relationships.
Section 6.6. PARKING OBLIGATIONS.
(a) Black Hawk shall design and construct parking facilities (the
"Parking Facility") currently contemplated by the parties (estimated at
approximately $2,500,000), with appropriate access on the northwest portion of
Millsite 30 and will pay for all costs related to construction of the Parking
Facility, which costs shall not be subject to the recoupment provisions of
paragraph 10B of the Joint Venture Agreement or otherwise, and shall not be
deemed a contribution by Black Hawk to the Advance Account or a capital
contribution to GHV.
(b) The Parking Facility, together with parking on Millsite 29, the
unused portion of Millsite 30 not covered by the Parking Facility, and between
the Gilpin and Canyon Casinos, shall provide for use by the Gilpin Hotel Casino
approximately 179 parking spaces, of
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which 162 shall be striped, or such greater number as is sufficient to avoid
the City of Black Hawk's Parking Improvement Fee.
(c) The Parking Facility (or such portion thereof sufficient to
provide the parking spaces described in Section 6.6(b) above) shall be
completed no later than June 30, 1998, and the approximately 100 of such
required parking spaces located in the Parking Facility and on the unused
portion of Millsite 30 not covered by the Parking Facility shall be subject to
a lease in favor of GHV providing for (i) an initial term of 10 years at a
monthly rental cost of $80,000, (ii) a CPI adjustment to rent every 5th year,
and (iii) two 5-year extension options which extensions shall also be subject
to a CPI adjustment to rent every 5th year.
ARTICLE VII
MUTUAL COVENANTS AND OBLIGATIONS
Section 7.1. CONFIDENTIALITY. Sellers and Black Hawk will use their best
efforts to keep confidential any and all information furnished to either of
them or their representatives, accountants, counsel, advisors or bankers in the
course of negotiations relating to this Agreement and the business and
financial reviews and investigations referred to in this Agreement, except to
the extent that any such information may be generally available to the public.
Sellers and Black Hawk have instructed their respective officers, employees and
other representatives having access to such information of such obligation of
confidentiality; provided, however, that any disclosure of such information may
be made to the extent required by applicable law or regulation, judicial or
regulatory process, reviews by financial institutions for the purpose of
lending to either party, and such information may be used as evidence in or in
connection with any pending or threatened litigation relating to this Agreement
or the Transaction. In the event the Transaction is not consummated for any
reason, each party agrees to return to the other party all such materials
immediately on request. The obligations arising under this Section 7.1 shall
survive any termination or abandonment of this Agreement.
Section 7.2. ADDITIONAL ACTIONS, ETC. Each party covenants, commencing
promptly upon the execution and delivery of this Agreement, to use all
reasonable efforts in good faith to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations, expeditiously and practicably to consummate
and make effective the Transaction, including using its reasonable efforts to
obtain all necessary actions, waivers, consents and approvals from third
parties or governmental or regulatory bodies and to effect all necessary
filings (including, without limitation, any filings under the Gaming Act and
other necessary filings with governmental regulatory authorities).
Section 7.3. CAPITAL EXPENDITURES/POLICY BOARD.
A. Until the Closing Date, Black Hawk, as manager under the
Management Agreement, shall have the right to incur capital expenditures upon
prior written approval of the Policy Board, consistent with past practices and
the terms of the Management Agreement, including expenditures incurred in
accordance with the following:
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(i) all reasonable and necessary capital expenditures not
exceeding $100,000 in the aggregate;
(ii) capital expenditures financed through leases or other
long-term arrangements; or
(iii) otherwise, as approved in writing by GVI.
B. GVI and Black Hawk shall each designate two representatives with
authority to act on all things pertaining to the GHV and shall endeavor to
agree upon the selection of an independent and impartial person to serve as the
fifth member of the Policy Board on any deadlocked matter; provided either GVI
or Black Hawk may, at any time, apply to the American Arbitration Association
for the appointment of the fifth Policy Board member. Black Hawk shall
continue management of the Gilpin Hotel in the normal course of business and
without deviation from Policy Board directives until GVI Closing, and shall
take no action not previously approved by the Policy Board in writing which
would materially damage the Business.
Section 7.4. STAY OF ARBITRATION. Black Hawk and GVI acknowledge that
there may be issues between them which are arbitrable under provisions of the
Joint Venture Agreement and the Management Agreement. Black Hawk and GVI agree
that neither will institute proceedings in arbitration during the period
commencing with the date hereof and ending if Black Hawk fails to pay the
Purchase Price in accordance with Section 2.2; provided, however and
notwithstanding the foregoing, Black Hawk or GVI may initiate arbitration:
(i) for appointment of a fifth Policy Board member as
provided for in Section 7.3;
(ii) for departure from the material intent of this
Agreement;
(iii) for breach of this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATION OF BLACK HAWK TO CLOSE
The obligations of Black Hawk to purchase the Property to be sold,
assigned, transferred and delivered to Black Hawk hereunder are, unless waived
in writing by Black Hawk, subject to the satisfaction, on the Closing Date, of
the following conditions:
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Section 8.1. ACCURACY OF REPRESENTATIONS AND PERFORMANCE OF CONDITIONS.
The representations and warranties of Sellers contained in this Agreement shall
be true and correct in all material respects at and as of the Closing Date with
the same force and effect as though made on and as of such Date, except to the
extent that such representations and warranties shall be incorrect as of the
Closing Date because of events or changes occurring or arising after the date
hereof in the ordinary course of business of Sellers or as otherwise permitted
by this Agreement; each and all of the conditions and covenants to be performed
or satisfied by Sellers hereunder at or prior to the Closing Date shall have
been duly performed or satisfied in all material respects; and Sellers shall
have furnished Black Hawk with Sellers' certificate to that effect.
Section 8.2. NO PROCEEDING OR LITIGATION. No order restraining,
preventing or challenging this Agreement or the Transaction shall be in effect.
Section 8.3. REGULATORY APPROVALS. Evidence reasonably satisfactory to
Black Hawk of the approval by the Gaming Authority and the Liquor Authority, of
the operation of limited gaming, restaurant and bar and retail business, under
Black Hawk's and GHV's existing licenses.
Section 8.4. FIRPTA COMPLIANCE. Sellers shall have delivered either an
affidavit that Sellers are not foreign persons within the meaning of Section
1445(b)(2) of the Internal Revenue Code of 1986, as amended, or an affidavit of
Sellers that complies with Section 1445(b)(3) thereof.
Section 8.5. NO OPPOSITION. All requirements and waiting periods under
the Hart-Scott-Rodino Improvement Act of 1976 amending Section 7 of the Clayton
Act, 15 U.S.C. Section 18a (Supp. 1979), if applicable, shall have been
fulfilled and no suit, action or proceeding shall be pending on the Closing
Date before or by any court or governmental body seeking to restrain or
prohibit, or damages or other relief in connection with, the execution and
delivery of this Agreement or the consummation of the Transaction.
Section 8.6. DELIVERIES PRECEDENT TO BLACK HAWK'S OBLIGATIONS TO
CONSUMMATE THE PURCHASE. Sellers shall deliver to Black Hawk each of the
following items:
A. CONVEYANCES AND OTHER DOCUMENTS. (1) All instruments of transfer
and assignment as are required hereunder, and (2) all agreements, documents,
instruments and certificates in the form required by this Agreement.
B. CERTIFICATES OF SELLERS. The certificates of appropriate
officers of Sellers stating material compliance with the requirements of
Section 8.1.A. and B. and that Sellers have no Knowledge of any breach or of
any event which of itself or with the giving of notice or the passage of time
or both would constitute any breach by Sellers of any of the representations,
warranties, agreements or covenants of Sellers under this Agreement.
C. SELLERS' APPROVAL. Certified copies of the resolutions of the
shareholders and Board of Directors of Sellers, pertaining to the authorization
and execution of this Agreement and the consummation of the Transaction and a
certificate executed by the secretary or assistant secretary of each Seller, as
to the due election, qualification and incumbency and valid signature
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of its officers authorized to sign this Agreement or any document, instrument
or certificate to be delivered under it.
Section 8.7. NEW OR MODIFIED AGREEMENTS. Black Hawk and Gold shall have
executed either (a)(i) the Amended and Restated Ground Lease, and (ii) a new or
amended Tenancy in Common Agreement, both relating to the Realty, or (b) a
Memorandum of Lease which sets forth the primary terms of such agreements in
form substantially similar to Exhibit C attached hereto, providing:
(i) in the Amended and Restated Ground Lease, a term for a
minimum monthly rent of $60,000 payable to Gold (in
consideration for which Black Hawk shall have an option to
extend the closing of Gold's interest in the Realty through
July 2, 1999); provided however that such minimum rent term
shall not in any way limit the payment of additional amounts
which may be due under the existing rent calculations based
on the gross income of GHV; and
(ii) in the new or amended Tenancy in Common Agreement, certain
other arm's length provisions regarding management of the
Realty and consents for actions to be taken on the Premises
(as defined therein).
Section 8.8. GENERAL RELEASE AND WAIVER. Black Hawk, GVI and Gamble
shall have executed a mutual release and waiver in form substantially similar
to Exhibit D attached hereto, releasing each other from all claims, damages,
duties, responsibilities, and obligations under the agreements described in
Section 1.26B and resulting from their relationships thereunder.
Section 8.9. PURCHASE OF REALTY. Simultaneously with the execution of
this Agreement, Black Hawk and Gold shall have entered into the Agreement to
Purchase and Sell Real Estate of even date herewith.
Section 8.10. CANCELLATION OF AGREEMENTS. The Agreements set forth in
Section 1.26B(i) and (ii) including the interest of Gamble arising from
Paragraph 9g of the Management Agreement shall be terminated and canceled in
their entireties, effective as of the completion and consummation of the
Closing, in form substantially similar to Exhibit F attached hereto.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATION OF SELLERS TO CLOSE
The obligations of Sellers to sell, assign, transfer and deliver the
Property to Black Hawk hereunder are, unless waived in writing by Sellers,
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
Section 9.1. ACCURACY OF REPRESENTATIONS AND PERFORMANCE OF CONDITIONS.
The representations and warranties of Black Hawk contained in this Agreement
shall be true and correct in all material respects at and as of the Closing
Date with the same force and effect as though made on and as of such Date,
except to the extent that such representations and warranties shall be
incorrect as of the Closing Date because of events or changes occurring or
arising after the date hereof in the ordinary course of business of Black Hawk
or as otherwise
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permitted by this Agreement; each and all of the conditions and covenants to be
performed or satisfied by Black Hawk hereunder at or prior to the Closing Date
shall have been duly performed or satisfied in all material respects; and Black
Hawk shall have furnished Sellers with Black Hawk's certificate to that effect.
Section 9.2. NO PROCEEDING OR LITIGATION. No order restraining,
preventing or challenging this Agreement or the Transaction shall be in effect.
Section 9.3. REGULATORY APPROVAL. Gaming Approval and Liquor Consent
shall have occurred.
Section 9.4. NO OPPOSITION. All requirements and waiting periods under
the Hart-Scott-Rodino Improvements Act of 1976 amending Section 7 of the
Clayton Act, if applicable, shall have been fulfilled and no suit, action or
proceeding shall be pending on the Closing Date before or by any court or
governmental body seeking to restrain or prohibit the execution and delivery of
this Agreement or the consummation of the Transaction.
Section 9.5. PAYMENT. Black Hawk shall have delivered the Purchase Price
for the Property as provided in Section 2.2.
Section 9.6. APPROVAL. Certified copies of all Black Hawk's resolutions
pertaining to the authorization of this Agreement and the consummation of the
Transaction, and a certificate executed by the secretary or assistant secretary
of Black Hawk as to the due election, qualification and incumbency and valid
signatures of its officers authorized to sign this Agreement or any document or
certificates to be delivered under it shall have been delivered to Sellers.
Section 9.7. CERTIFICATE OF BUYER. Black Hawk shall have delivered to
Sellers a certificate of Black Hawk in form reasonably satisfactory to Sellers
that, as of the Closing Date, Black Hawk has no Knowledge of any breach or of
any event which of itself or with the giving of notice or the passage of time
or both would constitute any breach by Black Hawk of any of the
representations, warranties, agreements or covenants of Black Hawk under this
Agreement.
Section 9.8. CONSENTS. The consents listed in Schedule 9.8 ("Material
Consents") shall have been obtained by the parties.
Section 9.9 NEW OR MODIFIED AGREEMENTS. Black Hawk and Gold shall have
executed (a) the Amended and Restated Ground Lease, and (b) a new or amended
Tenancy in Common Agreement, both relating to the Realty, with the primary
terms of Section 8.7.
Section 9.10 GENERAL RELEASE AND WAIVER. Black Hawk, GVI and Gamble
shall have executed a mutual release and waiver in form substantially similar
to Exhibit D attached hereto, releasing each other from all claims, damages,
duties, responsibilities, and obligations under the agreements described in
Section 1.26B and resulting from their relationships thereunder.
Section 9.11 PURCHASE OF REALTY. Prior to or contemporaneous with the
Closing, Black Hawk and Gold shall have entered into the Agreement to Purchase
and Sell Real Estate of even date herewith.
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Section 9.12. ASSUMPTION AGREEMENT. The Assumption Agreement described in
Section 2.3 shall be delivered.
Section 9.13. DISTRIBUTIONS. The amounts due under Section 2.5 shall be
delivered to GVI and Gamble by Black Hawk or GHV by certified check or wire
transfer.
Section 9.14. PARKING. Black Hawk's agreement under Section 6.6 hereof to
provide approximately 179 parking spaces, of which 162 shall be striped, or
such greater number as is sufficient to avoid the City of Black Hawk's Parking
Improvement Fee will be available to the Gilpin Hotel Casino shall be assigned
to Gold.
ARTICLE X
THE CLOSING
Section 10.1. CLOSING AND CLOSING PROVISIONS. The Closing Date shall be
the earlier of (a) 30 days after closing of Black Hawk's financing described in
Section 4.4, or (b) June 30, 1998 unless extended for up to three months (i.e.,
until September 30, 1998) as provided in Section 2.2D, or (c) such other date
as may be agreed to by Sellers and Black Hawk. The Closing shall take place on
the Closing Date commencing at 8:00 a.m. at the offices of Jones & Keller,
P.C., 1625 Broadway, Suite 1600, Denver, Colorado 80202, or at such other place
as the parties may agree in writing. Black Hawk may give Sellers written
notice of an earlier Closing Date at any time in the calendar year 1998 after
the execution hereof and Closing shall occur on such designated Closing Date.
Section 10.2. DELIVERIES BY SELLERS. At or prior to the Closing, Sellers
shall deliver to Black Hawk all of the matters designated as conditions
precedent and deliveries precedent to Black Hawk's obligation to close under
this Agreement. Sellers shall also deliver such further instruments of sale,
transfer, conveyance, assignment or delivery covering the Property or any part
thereof as Black Hawk may reasonably require to assure the full and effective
sale, transfer, conveyance, assignment or delivery to Black Hawk of the
Property.
Section 10.3. DELIVERIES BY BLACK HAWK. At the Closing Black Hawk shall
deliver to Sellers the Purchase Price, and the distributions set forth in
Section 2.5 in the manner and form provided for in this Agreement, and all the
certificates and other documents designated as deliveries and conditions
precedent to Sellers' obligation to close under this Agreement.
ARTICLE XI
TERMINATION
Section 11.1. NON-PERFORMANCE. Sellers or Black Hawk each shall have the
right to terminate this Agreement at or prior to Closing in the event that the
other party is in default in the performance of any of its material obligations
to be performed hereunder, or should any covenant, warranty or representation
made by the other party in this Agreement prove to be materially incorrect;
provided, however, that the party against whom such termination is to be
exercised shall have the right, for a period of twenty (20) days following
receipt of written notice from the
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other specifying the alleged default and the basis therefor, to correct or
satisfy any such condition or covenant necessary to the consummation of this
Agreement. Nothing in this Section shall be construed as relieving a party
from liability for damages, including, without limitation, expenses reasonably
incurred in the negotiation and preparation of this Agreement, to the other
party for breach of its obligations under or by reason of this Agreement
whether or not this Agreement is terminated by the non-defaulting party under
the provisions of this Section 11.1, or as limiting GVI's right to retain the
Earnest Money Deposit. However, if a default both results from a third party's
refusal to grant one or more of the Material Consents and a good faith effort
was made to obtain the same, the parties shall not be liable for damages
hereunder.
Provided however, that Black Hawk has the right but not the obligation to
make the payments required in Section 2.2. In the event Black Hawk fails to
obtain the financing described in Section 4.4 hereof, the Sellers' remedies at
law or in equity pertaining to the matters contemplated in this Agreement shall
be specifically limited as follows:
(a) Black Hawk shall forfeit the deposit made under Section 2.2B, and
any deposits made under Section 2.2D.
(b) Black Hawk shall design and construct the Parking Facility
described in Section 6.6 and currently contemplated by the parties (estimated
at approximately $2,500,000), with appropriate access on the northwest portion
of Millsite 30 and will pay for all costs related to construction of the
Parking Facility, which costs shall not be subject to the recoupment provisions
of paragraph 10B of the Joint Venture Agreement or otherwise and shall not be
deemed a contribution by Black Hawk to the Advance Account or a capital
contribution to GHV.
(c) The Parking Facility, together with parking on Millsite 29, the
unused portion of Millsite 30 not covered by the Parking Facility, and between
the Gilpin and Canyon Casinos, shall provide for use by GHV of parking spaces
described in Section 9.14.
(d) The Parking Facility (or such portion thereof sufficient to
provide the parking spaces described in Section 9.14) shall be completed no
later than June 30, 1998, and the parking spaces shall be subject to a lease in
favor of GHV providing for (i) an initial term of 10 years at a monthly rental
cost of $80,000, (ii) a CPI adjustment to rent every 5th year, and (iii) two 5-
year extension options which extensions shall also be subject to a CPI
adjustment to rent every 5th year.
(e) The Advance Account shall be reduced by $250,000 (for accounting
matters currently at issue under the proposed arbitration as more particularly
described in Exhibit E hereto) and the Advance Account shall be deemed current
as of December 31, 1997.
(f) Black Hawk shall forfeit its right to purchase Gold's interest
under the Real Estate Agreement.
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ARTICLE XII
INDEMNIFICATION
Section 12.1. INDEMNIFICATION. After Closing, Black Hawk will indemnify,
defend and hold harmless Sellers, and each of their agents, employees, officers
and directors from and against any and all claims, actions, suits, costs,
expenses, fees (including reasonable attorney fees), liabilities and losses and
damages of any nature whatsoever in connection with GHV; provided however, such
indemnification shall not extend to any such claims, actions, suits, costs,
expenses, fees, liabilities, losses or damages resulting from or caused by the
gross negligence or willful misconduct of the Sellers or their employees,
officers or directors.
Section 12.2. CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise
for indemnification hereunder, the party entitled to indemnification (the
"indemnified party") shall promptly notify Black Hawk (the "indemnifying
party") of the claim and, when known, the facts constituting the basis for such
claim. In the event of any claim for indemnification hereunder resulting from
or in connection with any claim or legal proceedings by a third party, the
notice to the Black Hawk shall specify, if known, the amount or an estimate of
the amount of the liability arising therefrom. The indemnified party shall not
settle or compromise any claim by a third party for which it is entitled to
indemnification hereunder, without the prior written consent of Black Hawk
unless suit shall have been instituted against it and Black Hawk shall not have
taken control of such suit after notification thereof as provided in Section
12.3 of this Agreement.
Section 12.3. DEFENSE BY BLACK HAWK. In connection with any claim giving
rise to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person who is not a party to this Agreement, Black Hawk at its
sole cost and expense may, upon written notice to the indemnified party, assume
the defense of any such claim or legal proceeding if it acknowledges to the
indemnified party in writing its obligations to indemnify the indemnified party
with respect to all elements of such claim and provides adequate assurance of
its ability to do so. The indemnified party shall be entitled to participate
in (but not control) the defense of any such action, with its counsel and at
its own expense. If Black Hawk does not assume the defense of any such claim
or litigation resulting therefrom, (a) the indemnified party may defend against
such claim or litigation, in such manner as it may deem appropriate, including,
but not limited to, settling such claim or litigation, after giving notice of
the same to Black Hawk, on such terms as the indemnified party may deem
appropriate, and (b) Black Hawk shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its own expense.
If Black Hawk thereafter seeks to question the manner in which the indemnified
party defended such third party claim or the amount or nature of any such
settlement, Black Hawk shall have the burden to provide by a preponderance of
the evidence that the indemnified party did not defend or settle such third
party claim in a reasonably prudent manner.
Section 12.4. LIMITATIONS ON CLAIMS. Any Notice of Claim must be made as
provided herein on or before the first anniversary date of this Agreement;
provided, however, that any Claim by Sellers pertaining to the Business that is
attributable to ownership, operations or events after Closing or obligations
assumed by Black Hawk under this Agreement, may be made within the applicable
period of limitation of the statutes providing for limitations on claims and
causes of action.
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1. INVESTIGATION. Black Hawk may, through its accountants,
attorneys, engineers, agents, employees and others, make, and hereby
acknowledges and agrees that it has made or will make prior to Closing, such
investigations of the business, properties and assets and of the financial and
legal and other condition and location of the Business as it may deem necessary
or advisable with respect to those matters and the Transaction.
Section 13.2. COMMISSIONS. Each party represents and warrants that it has
dealt with no broker or finder in connection with this Agreement and, insofar
as it knows, no broker or other person is entitled to any commission or
finder's fee in connection with the consummation of the Transaction. If either
of the parties shall breach the foregoing warranty and representation, it shall
indemnify the other party and hold the other party harmless from and against
any damage, liability, loss, claim, or expense suffered by the other party as a
result of such breach.
Section 13.3. EXPENSES. Except as otherwise provided herein, each of the
parties shall pay all costs and expenses incurred or to be incurred by it in
the negotiation and preparation of this Agreement and in closing and carrying
out the Transaction.
Section 13.4. HEADINGS. The subject headings of the sections and
subsections of this Agreement are included only for purposes of convenience,
and shall not affect the construction or interpretation of any of its
provisions.
Section 13.5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13.6. RIGHTS OF PARTIES. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended
to relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action against any party to this Agreement.
Section 13.7. ASSIGNMENT. The rights, duties and obligations under this
Agreement, may not be assigned by any party hereto unless such assignment is to
an affiliate defined as a person controlling, controlled by or under common
control with the assignor or unless such assignment is made with the prior
written consent of the other parties hereto; provided however that the
indemnity obligations set forth in Article XII, shall not be assignable without
the express written consent of Sellers.
Section 13.8. BINDING AGREEMENT. This Agreement constitutes, and all
other documents to be executed by each party shall, when executed and
delivered, constitute the legal, valid and binding obligation of each party
enforceable in accordance with their respective terms and shall be binding upon
and inure to the benefit of its respective successors and assigns, except as
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights and remedies of creditors generally and the availability
of equitable remedies. No provision of this Agreement may be waived or
relinquished except by written instrument signed by the party to be charged
with such waiver. Failure by any party to this Agreement to enforce any
provision of this Agreement shall not constitute a waiver of such provision,
and no waiver by any party to this
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Agreement of any provision of this Agreement on one occasion shall constitute a
waiver of any other provision or of the same provision on another occasion.
Section 13.9. NOTICES. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered or
certified, return receipt requested, postage prepaid, and properly addressed as
following:
To GVI and Gamble:
Robert W. Dunlap, President
32391 Horseshoe Drive
Evergreen, Colorado 80439
(303) 670-3885
With a copy (which shall not constitute notice) to:
Philip A. Rouse, Jr.
303 East Seventeenth Avenue, Suite 800
Denver, Colorado 80203
(303) 813-9333
To Black Hawk:
Black Hawk Gaming & Development Company, Inc.
17301 West Colfax Avenue, Suite 170
Golden, Colorado 80401
Attention: Mr. Stephen R. Roark, President
(303) 216-0908
With a copy (which shall not constitute notice) to:
Jones & Keller, P.C.
Attention: Samuel E. Wing, Esq.
1625 Broadway, Suite 1600
Denver, Colorado 80202
(303) 573-1600
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
Section 13.10. APPLICABLE LAW AND REMEDIES. The terms, conditions and
other provisions of this Agreement and any documents or instruments delivered
in connection with it shall be governed and construed according to the internal
laws of the State of Colorado. All remedies at law, in equity, by statute or
otherwise shall be cumulative and may be enforced concurrently or from time to
time and, subject to the express terms of this Agreement, the election
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of any remedy or remedies shall not constitute a waiver of the right to pursue
any other available remedies.
Section 13.11. EXPENSES OF ENFORCEMENT. If any party believes in good
faith that it is required to initiate an action to enforce a provision of this
Agreement or any agreement, instrument or document made or delivered in
connection herewith, or for damages by reason of an alleged breach of any
provision, and such action is commenced or initiated, the prevailing party
shall be entitled to receive from the other party all costs and expenses,
including, without limitation, reasonable attorneys' fees and costs, incurred
in connection with such action.
Section 13.12. ADDITIONAL INSTRUMENTS AND ASSISTANCE. Each party
hereto shall promptly from time to time execute and deliver such further
instruments and render such further assistance as the other party or its
counsel may reasonably request in order to complete and perfect the
transactions contemplated herein.
Section 13.13. SEVERABILITY. If any provision of this Agreement is
held or deemed to be invalid or unenforceable to any extent when applied to any
person or circumstance, the remaining provisions hereof and the enforcement of
such provision to other persons or circumstances, or to another extent, shall
not be affected thereby and each provision hereof shall be enforced to the
fullest extent allowed by law, unless the invalid or unenforceable provision
defeats the basis of the bargain herein.
Section 13.14. PRONOUNS AND TERMS. In this Agreement, the singular
shall include the plural, the plural the singular, and the use of any gender
shall include all genders.
Section 13.15. TIME OF ESSENCE. Time is of the essence for each
provision of this Agreement for which time is a factor.
Section 13.16. DISCLOSURE. No representation or warranty made by
either party in this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statement of facts
contained within it not misleading.
Section 13.17. TAXES. Black Hawk shall pay all sales, use, transfer
and conveyance taxes and title, recording, transfer and similar fees payable or
assessable in connection with the Transaction and its portion prorated as of
the Closing Date of state and local personal property taxes of the Business.
Black Hawk shall, to the extent required, remit these taxes and fees to the
appropriate authorities contemporaneously with the Closing.
Section 13.18. ENTIRE AGREEMENT, MODIFICATION AND WAIVER. This
Agreement merges all previous negotiations between the parties hereto,
supersedes all prior discussions and correspondence between the parties,
including, without limitation, that certain Nonbinding Letter of Intent dated
November 20, 1997 between and among the parties and this Agreement constitutes
the entire agreement and understanding between the parties with respect to the
subject matter of this Agreement. No alteration, modification, or change of
this Agreement shall be valid except by a written instrument executed by the
parties hereto.
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Section 13.19. ARBITRATION. Any controversy or claim arising out of,
or relating to this Agreement, or the breach thereof, shall be settled by
arbitration in Denver, Colorado in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
Section 13.20. SUBMISSION TO JURISDICTION. Each of the parties hereto
irrevocably consents that legal action or proceeding against it or any of its
property with respect to this Agreement or any other agreement executed in
connection herewith not inconsistent with Section 13.19, may be brought in any
court of the State of Colorado and the County of Jefferson or any Federal Court
of the United States of America located in the State of Colorado, or both, and
by the execution and delivery of this Agreement, each party hereto hereby
accepts with regard to any such action or proceeding for itself and in respect
of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each party hereto further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party at the address referred to in Section 13.9
hereof, such service to become effective upon receipt thereof by such party.
Nothing herein shall affect the right of any party to service process in any
other manner permitted by law.
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on
the date first above written.
BUYER:
BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC.
By: /s/ STEPHEN R. ROARK
President
SELLERS:
GILPIN VENTURES, INC.
By: /s/ ROBERT W. DUNLAP
President
GOLDEN GAMBLE, INC.
By: /s/ ROBERT W. DUNLAP
President
JOINED IN:
GILPIN HOTEL VENTURE
By: BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC.,
Venturer
By: /s/ STEPHEN R. ROARK
President
By: GILPIN VENTURES, INC., Venturer
By: /s/ ROBERT W. DUNLAP
President
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ATTACHMENTS TO AGREEMENT FOR PURCHASE AND SALE OF ASSETS
EXHIBIT A Documents of Assignment and Transfer
EXHIBIT B Assumption Agreement
EXHIBIT C Memorandum of Ground Lease
EXHIBIT D Mutual Release and Waiver
EXHIBIT E Arbitration Matters
EXHIBIT F Cancellation of Agreements
SCHEDULE 1.10 Excluded Property
1.17 Inventory of GHV
1.26A Sellers' Assets
1.26D Sellers' Authorities
2.2E Allocation to Purchase Price
2.4D Personal Liabilities of Sellers
3.4 Liens and Encumbrances
3.5 Sellers' Insurance Policies
3.6 Interests Owned by Sellers
3.8 Taxes
3.9 Litigation
9.8 Consents
33
EXHIBIT A
Documents of Assignment and Transfer
34
EXHIBIT B
Assumption Agreement
35
EXHIBIT C
Memorandum of Ground Lease
36
EXHIBIT D
Mutual Release and Waiver
37
EXHIBIT E
Arbitration Matters
GVI's one-half share of the following:
1. Certain specific financial transactions or treatments taken or adopted by
Black Hawk, acting as Manager of GHV, with respect to payments made or
credits given to itself in connection with a number of different matters.
2. The following disputed items:
1. Black Hawk requested permission for GHV to pay salaries, benefits and
bonuses to the Gilpin Hotel General Manager and the Food and Beverage
Manager, who are employees of Black Hawk and not employees of GHV. To
accommodate Black Hawk, GVI consented to such payments, subject to
Black Hawk's agreement to reimburse GHV for all such expenses for
these Black Hawk employees. Black Hawk has reimbursed GHV for some
portion, but not all of these expenses, and Black Hawk continues to be
indebted to GHV for such expenses in the amount of approximately
$286,000 plus interest.
2. Black Hawk requested that GHV lease certain casino equipment and incur
finance charges, including non-refundable rental deposits, in
connection therewith so that Black Hawk would not have to fund the
purchase of such equipment. Again to accommodate Black Hawk's needs,
GVI consented thereto, subject to Black Hawk's agreement to reimburse
GHV for all such finance charges incurred in connection with these
equipment leases. Black Hawk has reimbursed GHV for some of these
finance charges, but has never reimbursed GHV for the non-refundable
rental deposits and, thus, owes GHV approximately $31,000 plus
interest.
3. As a result of Black Hawk's operating practices, Black Hawk has caused
GHV to incur and to pay fines and penalties to the Colorado Gaming
Commission in the approximate amount of $27,500, in addition to very
significant legal and administrative costs and expense in responding
to the enforcement actions. These fines and penalties are solely Black
Hawk's responsibility under paragraph 5(h) of the Management Agreement
and must be reimbursed to GHV in full.
4. In addition to the fines and penalties described in subparagraph (c)
above, Black Hawk has incurred numerous other fines and penalties from
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governmental agencies, but has, despite paragraph 5(h) of the
Management Agreement, paid those fines and penalties out of GHV funds
without reimbursement.
5. As a result of its operating and financial management practices, Black
Hawk has caused GHV to improperly report its Colorado sales and use
tax in the approximate amount of $61,000 including penalties and
interest. Black Hawk has also caused GHV to improperly underreport
its taxable income to the Internal Revenue Service in the approximate
amount of $487,000 for the years 1992 through 1994. As a result, GVI,
as a venturer, will be required to pay income tax on one-half of this
amount for the relevant years and, in addition, to pay accrued
interest on such taxes. If Black Hawk had properly reported the sales
and use taxes and its taxable income when required, GVI would not have
incurred any of such interest expense in connection therewith, and GVI
is thus entitled to reimbursement for such interest in the approximate
amount of $65,000, the exact sum to be established at the hearing.
6. GVI's review of the GHV records has revealed additional items which
reflect payments or credits from GHV in favor of Black Hawk which are
unsupported and/or questioned by GVI as follows:
1. An item recorded as "return of capital" to Black Hawk in the
amount of $80,000 dated December 5, 1992.
2. An item recorded as payment by GHV of $10,000 "to reimburse
[Black Hawk]" for payment of a monthly consulting fee paid to
Golden Gamble in the amount of $10,000 dated October 15, 1992
when the fee should have been paid solely by Black Hawk;
3. Overpayment of pre-opening rents to Black Hawk totaling $15,000
and/or overpayment to Black Hawk of a rental equalization
adjustment in May 1995 based upon an unsupported "credit entry"
in the amount of $27,132 dated March 12, 1993.
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EXHIBIT F
Cancellation of Agreements
40
SCHEDULE 1.10
Excluded Property
3. Front Range Mountain Photograph
4. Pack-Premier Mining Company Sign
5. Old Jail Door
6. Collage Picture
7. Historic Black Hawk Photos (3)
8. Ore Cart, track and related items owned by third parties
9. Items listed on memorandum to John Goings (1992) listing other third-party
property
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SCHEDULE 1.17
Inventory of GHV
42
SCHEDULE 1.26A
Sellers' Assets
Greenbar Depreciation Schedule dated as of December __, 1997.
43
SCHEDULE 1.26D
Sellers' Authorities
44
SCHEDULE 2.2E
Allocation to Purchase Price
Description Approximate Amount
----------- ------------------
10. Cash $750,000
11. Cancellation of Golden Gamble, Inc.
Consulting Agreement 250,000
12. Building and Pic-A-Dilly Contractor 1,900,000
13. Furniture, Fixtures and Equipment 750,000
14. Goodwill and Other 1,600,000
----------
$5,250,000
==========
45
SCHEDULE 2.4D
Personal Liabilities of Sellers
None
46
SCHEDULE 3.4
Liens and Encumbrances
None to which Black Hawk is not a party or of which Black Hawk is not aware.
47
SCHEDULE 3.5
Sellers' Insurance Policies
None
48
SCHEDULE 3.6
Interests Owned by Sellers
None
49
SCHEDULE 3.8
Taxes
Income Tax Refund Audits for Calendar Years 1993, 1994, 1995.
50
SCHEDULE 3.9
Litigation
None
51
SCHEDULE 9.8
Consents
Dolly's Casino, Inc. regarding the Dolly's Note
International Gaming Technologies
Prime Financial Corp. regarding the Notes relating to the purchase of certain
slot machines and equipment
Division of Gaming regarding GHV gaming license
Sate Liquor Commission regarding GHV liquor license