AGREEMENT AND PLAN OF MERGER BY AND AMONG KERZNER INTERNATIONAL LIMITED, K-TWO HOLDCO LIMITED AND K-TWO SUBCO LIMITED MARCH 20, 2006
Exhibit
2.1
BY
AND
AMONG
XXXXXXX
INTERNATIONAL LIMITED,
K-TWO
HOLDCO LIMITED
AND
K-TWO
SUBCO LIMITED
MARCH
20,
2006
Page
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ARTICLE
I
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2 | |
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Section
1.1.
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2
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Section
1.2.
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9
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ARTICLE
II
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9
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Section
2.1.
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9
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Section
2.2.
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10
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Section
2.3.
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11
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Section
2.4.
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13
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ARTICLE
III
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14
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Section
3.1.
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14
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Section
3.2.
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14
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Section
3.3.
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15
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ARTICLE
IV
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15
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Section
4.1.
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15
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Section
4.2.
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15
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Section
4.3.
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16
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Section
4.4.
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16
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Section
4.5.
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17
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Section
4.6.
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17
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Section
4.7.
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18
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Section
4.8.
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19
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Section
4.9.
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19
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Section
4.10.
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19
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Section
4.11.
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19
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Section
4.12.
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20
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Section
4.13.
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20
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Section
4.14.
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21
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Section
4.15.
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21
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Section
4.16.
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22
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Section
4.17.
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22
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ARTICLE
V
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22
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Section
5.1.
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22
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Section
5.2.
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22
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Section
5.3.
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22
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Section
5.4.
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23
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Section
5.5.
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23
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Section
5.6.
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23
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Section
5.7.
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23
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Section
5.8.
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24
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Section
5.9.
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25
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Section
5.10.
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25
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ARTICLE
VI
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25
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Section
6.1.
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25
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Section
6.2.
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27
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Section
6.3.
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28
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ARTICLE
VII
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28
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Section
7.1.
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28
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Section
7.2.
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29
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Section
7.3.
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31
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Section
7.4.
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31
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Section
7.5.
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35
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Section
7.6.
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36
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Section
7.7.
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36
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Section
7.8.
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37
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Section
7.9.
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38
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Section
7.10.
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40
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Section
7.11.
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41
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Section
7.12.
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41
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Section
7.13.
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42
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ARTICLE
VIII
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42
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Section
8.1.
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42
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Section
8.2.
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43
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Section
8.3.
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43
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ARTICLE
IX
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44
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Section
9.1.
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44
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Section
9.2.
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45
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Section
9.3.
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47
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ARTICLE
X
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47
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Section
10.1.
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47
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Section
10.2.
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48
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Section
10.3.
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48
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Section
10.4.
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48
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Section
10.5.
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48
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Section
10.6.
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49
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Section
10.7.
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49
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Section
10.8.
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49
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Section
10.9.
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49
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Section
10.10.
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49
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Section
10.11.
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50
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Section
10.12.
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51
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Section
10.13.
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51
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This
AGREEMENT AND PLAN OF MERGER (this “Agreement”)
is
made and entered into as of this 20th day of March, 2006 by and among Xxxxxxx
International Limited, an international business company incorporated under
the
laws of the Commonwealth of The Bahamas (the “Company”),
K-Two
Holdco Limited, an international business company incorporated under the laws
of
the Commonwealth of The Bahamas (“Parent”),
and
K-Two Subco Limited, an international business company incorporated under the
laws of the Commonwealth of The Bahamas and a direct wholly-owned subsidiary
of
Parent (“Merger
Sub”).
RECITALS
A.
The
parties intend that Merger Sub be merged with and into the Company (the
“Merger”),
with
the Company surviving the Merger as a wholly-owned subsidiary of Parent (the
“Surviving
Corporation”).
The
name of the Surviving Corporation shall be Xxxxxxx International
Limited.
B.
The
Board of Directors of the Company, acting upon the unanimous recommendation
of
the Special Committee, has (i) determined that the Merger and this Agreement
are
fair to and in the best interests of the Company and its shareholders, (ii)
approved this Agreement and (iii) resolved to recommend that shareholders of
the
Company approve this Agreement.
C.
The
Board of Directors of Merger Sub has unanimously approved this Agreement.
D.
Certain existing shareholders of the Company desire to contribute Ordinary
Shares to Parent immediately prior to the Effective Time in exchange for shares
of capital stock of Parent.
E.
The
Company, Parent and Merger Sub desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to
prescribe certain conditions to the Merger, as set forth herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, intending to be legally
bound, the parties hereto agree as follows:
DEFINITIONS
Section
1.1. Definitions. For
purposes of this Agreement, the following terms have the respective meanings
set
forth below:
“6
¾
Notes Indenture”
has
the
meaning set forth in Section 7.10.
“6
¾%
Notes”
has
the
meaning set forth in Section 7.10.
“Acceptable
Confidentiality Agreement”
has
the
meaning set forth in Section 7.4(g)(i).
“Affiliate”
means,
with respect to any Person, any other Person, directly or indirectly,
controlling, controlled by, or under common control with, such Person. For
purposes of this definition, the term “control” (including the correlative terms
“controlling”, “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Agreement”
has
the
meaning set forth in the Preamble.
“Articles
of Merger”
has
the
meaning set forth in Section 2.1(b).
“Authorized
Agent”
has
the
meaning set forth in Section 10.11(c).
“Business
Day”
means
any day other than the days on which banks in New York, New York or The Bahamas
are not required or authorized to close.
“Certificate”
has
the
meaning set forth in Section 2.2(c).
“Closing”
has
the
meaning set forth in Section 2.1(d).
“Closing
Date”
has
the
meaning set forth in Section 2.1(d).
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Company”
has
the
meaning set forth in the Preamble.
“Company
Acquisition Proposal”
has
the
meaning set forth in Section 7.4(g)(ii).
“Company
Benefit Plan”
has
the
meaning set forth in Section 4.13(a).
“Company
Disclosure Letter”
has
the
meaning set forth in the preamble to Article IV.
“Company
Employees”
means
any current, former or retired employee, officer, consultant, independent
contractor or director of the Company or any of its Subsidiaries.
“Company
Equity Awards”
means
Company Options, Company Restricted Shares, Company SARs and Company
RSUs.
“Company
Joint Venture”
means,
with respect to the Company, any corporation or other entity (including
partnerships, limited liability companies and other business associations and
joint ventures) in which the Company, directly or indirectly, owns an equity
interest that does not have voting power under ordinary circumstances to elect
a
majority of the board of directors or other person performing similar functions
but in which the Company has rights with respect to the management of such
Person.
“Company
Options”
means
outstanding options to acquire Ordinary Shares from the Company granted to
Company Employees under the Company Stock Plans or otherwise.
“Company
Proxy Statement”
means
the proxy statement relating to the approval of the Merger by the Company’s
shareholders prepared in accordance with applicable Law and including the
information required to be included in the Schedule 13E-3.
“Company
Restricted Shares”
has
the
meaning set forth in Section 2.2(f).
“Company
RSU”
means
an outstanding restricted stock unit with respect to one Ordinary Share granted
to a Company Employee under a Company Stock Plan or otherwise.
“Company
SARs”
means
outstanding stock appreciation rights with respect to Ordinary Shares granted
to
Company Employees under the Company Stock Plans or otherwise.
“Company
SEC Reports”
has
the
meaning set forth in Section 4.7(a).
“Company
Securities”
has
the
meaning set forth in Section 4.5(b).
“Company
Shareholder Meeting”
has
the
meaning set forth in Section 7.1(a).
“Company
Stock Plans”
means
the
Xxxxxxx Gaming & Entertainment, Inc. 1994 Stock Option Plan (as amended on
May 10, 1996), the Sun International Limited 1997 Stock Option Plan, as amended,
the Company 2000 Stock Option Plan, the Company 2003 Stock Incentive Plan and
the Company 2005 Stock Incentive Plan.
“Compensation”
has
the
meaning set forth in Section 7.8(a).
“Confidentiality
Agreements”
has
the
meaning set forth in Section 7.4(g)(i).
“Contract”
has
the
meaning set forth in Section 4.4.
“Convertible
Notes”
has
the
meaning set forth in Section 4.5(b).
“Convertible
Notes Indenture”
has
the
meaning set forth in Section 7.10.
“Cooperation
Agreement”
means
the Cooperation Agreement dated as of the date hereof among the Company, HBK
and
SK.
“Current
Employee”
has
the
meaning set forth in Section 7.8(a).
“Current
Policies”
has
the
meaning set forth in Section 7.5(a).
“Damages”
has
the
meaning set forth in Section 7.5(a).
“Debt
Financing”
has
the
meaning set forth in Section 5.7.
“Debt
Financing Commitments”
has
the
meaning set forth in Section 5.7.
“Debt
Tender Offers”
has
the
meaning set forth in Section 7.10.
“Disbursing
Agent”
has
the
meaning set forth in Section 2.3(a).
“Disinterested
Director”
means
a
member of the Board of Directors of the Company who (i) has no direct or
indirect interest in Parent, whether as an investor or otherwise, (ii) is not
a
representative of any Person or entity who has any such interest in Parent
and
(iii) is not otherwise affiliated with Parent.
“Dissenting
Ordinary Shares”
has
the
meaning set forth in Section 2.2(d).
“DOJ”
has
the
meaning set forth in Section 7.2(b).
“Effective
Time”
has
the
meaning set forth in Section 2.1(b).
“Employee
Benefit Plan”
has
the
meaning set forth in Section 3(3) of ERISA.
“Employment
Agreement”
means
any employment, severance, retention, termination, indemnification, change
in
control or similar agreement between the Company or any of its Subsidiaries,
on
the one hand, and any current or former employee of the Company or any of its
Subsidiaries, on the other hand.
“End
Date”
has
the
meaning set forth in Section 9.1(b)(i).
“Equity
Financing”
has
the
meaning set forth in Section 5.7.
“Equity
Financing Commitments”
has
the
meaning set forth in Section 5.7.
“Equity
Rollover Commitments”
has
the
meaning set forth in Section 5.8.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Excluded
Party”
has
the
meaning set forth in Section 7.4(b).
“Financing”
has
the
meaning set forth in Section 5.7.
“Financing
Commitments”
has
the
meaning set forth in Section 5.7.
“Gaming
Authority”
means
any Governmental Authority with regulatory control or jurisdiction over casino
or other gaming activities and operations.
“Gaming
Law”
means,
with respect to any Person, any Law governing or relating to any current or
contemplated casino or other gaming activities and operations of such Person
and
its Affiliates.
“GAAP”
means
United States generally accepted accounting principles.
“Governmental
Authority”
means
any nation or government or any agency, public or regulatory authority,
instrumentality, department, commission, court, arbitrator, ministry, tribunal
or board of any nation or government or political subdivision thereof, in each
case, whether foreign or domestic and whether national, supranational, federal,
tribal, provincial, state, regional, local or municipal.
“HBK”
means
Xx. Xxxxxx X. Xxxxxxx.
“HSR
Act”
means
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
“IBCA”
means
the International Business Companies Act, 2000 of the Commonwealth of The
Bahamas, as amended.
“Indentures”
has
the
meaning set forth in Section 7.10.
“Insurance
Amount”
has
the
meaning set forth in Section 7.5(a).
“Interim
Investors Agreement”
has
the
meaning set forth in Section 6.2.
“Istithmar”
means
Istithmar PJSC, a public joint stock company incorporated under the laws of
Dubai, United Arab Emirates.
“Istithmar
Equity Rollover Commitment”
has
the
meaning set forth in Section 5.10.
“KINA”
has
the
meaning set forth in Section 7.10.
“Law”
means
applicable, statutes, common laws, rules, ordinances, regulations, codes,
licensing requirements, orders, judgments, injunctions, writs, decrees,
licenses, governmental guidelines or interpretations having the force of law,
permits, rules and bylaws, in each case, of a Governmental
Authority.
“Liens”
means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
“Material
Adverse Effect on the Company”
means
a
material adverse effect on the assets or liabilities, business, financial
condition or results of operations of the Company and its Subsidiaries, taken
as
a whole; provided,
however,
that in
no event shall any of the following, alone or in combination, be deemed to
constitute, nor shall any of the following be taken into account in determining
whether there has been, a Material Adverse Effect on the Company: (A) any fact,
change, development, circumstance, event, effect or occurrence (an “Effect”)
in
general economic or political conditions or in the financial or securities
markets, (B) any Effect generally affecting, or resulting from general changes
or developments in, the industries in which the Company and its Subsidiaries
operate, (C) any failure to meet internal or published projections, forecasts
or
revenue or earnings predictions for any period (provided that the underlying
causes of such failures shall not be excluded), (D) any change in the price
or
trading volume of the Ordinary Shares in and of itself (provided that the
underlying causes of such changes shall not be excluded), or (E) any Effect
that
is demonstrated to have resulted from the announcement of the Merger, or the
identity of Parent or any of its Affiliates as the acquiror of the Company,
except, in the case of clauses (A) and (B), to the extent such Effects referred
to therein would be reasonably likely to have a materially disproportionate
impact on the assets or liabilities, business, financial condition or results
of
operations of the Company and its Subsidiaries, taken as a whole, relative
to
other industry participants.
“Merger”
has
the
meaning set forth in the Recitals.
“Merger
Consideration”
has
the
meaning set forth in Section 2.2(c).
“Merger
Shares”
has
the
meaning set forth in Section 2.2(c).
“Merger
Sub”
has
the
meaning set forth in the Preamble.
“Merger
Sub Ordinary Shares”
means
the ordinary shares of Merger Sub, par value $0.001 per share.
“New
Financing Commitments”
has
the
meaning set forth in Section 7.9(c).
“Notes”
has
the
meaning set forth in Section 7.10.
“No-Shop
Period Start Date”
has
the
meaning set forth in Section 7.4(a).
“Ordinary
Shares”
means
ordinary shares, par value $0.001 per share, of the Company.
“Other
Antitrust Laws”
means
any Law enacted by any Governmental Authority relating to antitrust matters
or
regulating competition.
“Parent”
has
the
meaning set forth in the Preamble.
“Parent
Expenses”
has
the
meaning set forth in Section 9.2(d).
“Parent
Plan”
has
the
meaning set forth in Section 7.8(b).
“Permits”
means
any licenses, franchises, permits, certificates, consents, approvals or other
similar authorizations of, from or by a Governmental Authority (including any
Gaming Authority) possessed by or granted to or necessary for the ownership
of
the material assets or conduct of the business of the Company or its
Subsidiaries.
“Permitted
Liens”
means
(i) Liens for Taxes, assessments and governmental charges or levies not yet
due
and payable or that are being contested in good faith and by appropriate
proceedings; (ii) mechanics’, carriers’, workmen’s, repairmen’s, materialmen’s
or other Liens or security interests that secure a liquidated amount that are
being contested in good faith and by appropriate proceedings; or (iii) leases,
subleases and licenses (other than capital leases and leases underlying sale
and
leaseback transactions); (iv) Liens imposed by applicable Law; (v) pledges
or
deposits to secure obligations under workers’ compensation Laws or similar
legislation or to secure public or statutory obligations; (vi) pledges and
deposits to secure the performance of bids, trade contracts, leases, surety
and
appeal bonds, performance bonds and other obligations of a similar nature,
in
each case in the ordinary course of business; (vii) easements, covenants
and rights of way (unrecorded and of record) and other similar restrictions
of
record, and zoning, building and other similar restrictions, in each case that
do not adversely affect in any material respect the current use of the
applicable property owned, leased, used or held for use by the Company or any
of
its Subsidiaries; (viii) Liens the existence of which are specifically
disclosed in the notes to the consolidated financial statements of the Company
included in any Company SEC Report filed prior to the date of this Agreement;
and (x) any other Liens that do not secure a liquidated amount, that have been
incurred or suffered in the ordinary course of business and that would not,
individually or in the aggregate, have a material effect on the Company or
the
ability of Parent to obtain the Debt Financing.
“Person”
means
any individual, corporation, company, limited liability company, partnership,
association, trust, joint venture or any other entity or organization, including
any government or political subdivision or any agency or instrumentality
thereof.
“Preference
Shares”
has
the
meaning set forth in Section 4.5(a).
“Proceeding”
has
the
meaning set forth in Section 4.11.
“Recommendation”
has
the
meaning set forth in Section 7.1(a).
“Recommendation
Withdrawal”
has
the
meaning set forth in Section 7.4(d).
“Replacement
Policies”
has
the
meaning set forth in Section 7.5(a).
“Representatives”
has
the
meaning set forth in Section 7.4(a).
“Requisite
Shareholder Vote”
has
the
meaning set forth in Section 4.2(a).
“Restraint”
has
the
meaning set forth in Section 8.1(c).
“Schedule
13E-3”
means
a
Rule 13e-3 Transaction Statement on Schedule 13E-3 relating to the Merger and
the other transactions contemplated hereby.
“SEC”
means
the United States Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Side
Letter”
has
the
meaning set forth in Section 10.10.
“SK”
means
Xx. Xxxxxxx Xxxxxxx.
“Special
Committee”
means
a
committee of the Company’s Board of Directors, the members of which are not
affiliated with Parent or Merger Sub and are not members of the Company’s
management, formed for the reasons set forth in the resolution establishing
such
committee.
“Subsidiary”,
with
respect to any Person, means any other Person of which the first Person owns,
directly or indirectly, securities or other ownership interests having voting
power to elect a majority of the board of directors or other persons performing
similar functions (or, if there are no such voting interests, 50% or more of
the
equity interests of the second Person).
“Subsidiary
Securities”
has
the
meaning set forth in Section 4.6(b).
“Superior
Proposal”
has
the
meaning set forth in Section 7.4(g)(iii).
“Superior
Proposal Effective Time”
has
the
meaning set forth in Section 7.13.
“Surviving
Corporation”
has
the
meaning set forth in the Recitals.
“Takeover
Statute”
has
the
meaning set forth in Section 4.17.
“Tax”
means
(i) all U.S. Federal, state, local, foreign and other taxes (including
withholding taxes), fees and other governmental charges of any kind or nature
whatsoever, together with any interest, penalties or additions imposed with
respect thereto, (ii) any liability for payment of amounts described in clause
(i) whether as a result of transferee liability or joint and several liability
for being a member of an affiliated, consolidated, combined or unitary group
for
any period, and (iii) any liability for the payment of amounts described in
clause (i) or (ii) as a result of any tax sharing, tax indemnity or tax
allocation agreement or any other express or implied agreement to pay or
indemnify any other Person.
“Tax
Return”
means
any return, declaration, report, statement, information statement or other
document filed or required to be filed with respect to Taxes, including any
amendments or supplements to any of the foregoing.
“Termination
Fee”
means
$88,920,000, except (i) in the event that any third party has made a bona fide
Company Acquisition Proposal on or before the No-Shop Period Start Date, which
Company Acquisition Proposal then constituted, or could have reasonably been
expected to result in, a Superior Proposal, and this Agreement is terminated
by
the Company pursuant to Section 9.1(c)(ii) in order to enter into a definitive
agreement with respect to a
Company
Acquisition Proposal with such third party or (ii) in the case of Section 9.2(c)
only, in the event the Company Acquisition Proposal with respect to which a
definitive agreement is ultimately entered into or consummated is not at a
price
per Ordinary Share in excess of the Merger Consideration, in which cases
Termination Fee shall mean $29,640,000.
“Voting
Agreement”
has
the
meaning set forth in Section 5.10.
“WLG”
means
World Leisure Group Limited, a company incorporated under the laws of the
British Virgin Islands.
Section
1.2. Terms
Generally. The
definitions in Section 1.1 shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”, unless the context expressly provides otherwise.
All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits
or Schedules shall be deemed references to Sections, paragraphs, subparagraphs
or clauses of, or Exhibits or Schedules to this Agreement, unless the context
requires otherwise. Unless otherwise expressly defined, terms defined in this
Agreement have the same meanings when used in any Exhibit or Schedule hereto,
including the Company Disclosure Letter. Unless otherwise specified, the words
“herein”, “hereof”, “hereto” and “hereunder” and other words of similar import
refer to this Agreement as a whole (including the Schedules and Exhibits) and
not to any particular provision of this Agreement. The term “or” is not
exclusive. The word “extent” in the phrase “to the extent” shall mean the degree
to which a subject or other thing extends, and such phrase shall not mean simply
“if”. Any Contract, instrument or Law defined or referred to herein or in any
Contract or instrument that is referred to herein means such Contract,
instrument or Law as from time to time amended, modified or supplemented,
including (in the case of Contracts or instruments) by waiver or consent and
(in
the case of Laws) by succession of comparable successor Laws and references
to
all attachments thereto and instruments incorporated therein. References to
a
Person are also to its permitted successors and assigns.
THE
MERGER
(a) At
the
Effective Time, in accordance with the IBCA, and upon the terms and subject
to
the conditions set forth in this Agreement, Merger Sub shall be merged with
and
into the Company, at which time the separate existence of Merger Sub shall
cease
and the Company shall survive the Merger as a wholly-owned subsidiary of Parent.
(b)
On
the
Closing Date, the Company and Merger Sub shall file articles of merger (the
“Articles
of Merger”)
meeting the requirements of the IBCA with the Registrar of Companies of the
Bahamas. The Merger shall become effective at such time as the Articles of
Merger are registered by the Registrar of Companies of the Bahamas, or at such
later time as the Company and Merger Sub may agree and specify in the Articles
of Merger (such time as the Merger becomes effective, the “Effective
Time”).
(c)
The
Merger shall have the effects set forth in the applicable provisions of the
IBCA. Without limiting the generality of the foregoing, and subject thereto,
from and after the Effective Time, all property, rights, privileges, immunities,
powers, franchises, licenses and authority of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities, obligations,
restrictions and duties of each of the Company and Merger Sub shall become
the
debts, liabilities, obligations, restrictions and duties of the Surviving
Corporation.
(d)
The
closing of the Merger (the “Closing”)
shall
take place (i) at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP located in
New York, New York, as soon as reasonably practicable (but in any event, no
later than the second Business Day) after the day on which the last condition
to
the Merger set forth in Article VIII is satisfied or validly waived (other
than
those conditions that by their nature cannot be satisfied until the Closing
Date, but subject to the satisfaction or valid waiver of such conditions)
(provided, that if all the conditions set forth in Article VIII shall not have
been satisfied or validly waived on such day, then the Closing shall take place
on the first Business Day on which all such conditions shall have been or can
be
satisfied or shall have been validly waived) or (ii) at such other place and
time or on such other date as the Company and Parent may agree in writing (the
actual date of the Closing, the “Closing
Date”).
Section
2.2. Conversion
of Securities.
At the
Effective Time, pursuant to this Agreement and by virtue of the Merger and
without any action on the part of the Company, Parent, Merger Sub or the holders
of the Ordinary Shares:
(a)
Each
Ordinary Share held by the Company as treasury stock or otherwise owned by
Parent, Merger Sub or any wholly-owned Subsidiary of the Company immediately
prior to the Effective Time (including Ordinary Shares acquired by Parent
immediately prior to the Effective Time pursuant to the Equity Rollover
Commitments), if any, shall be canceled and retired and shall cease to exist,
and no payment or distribution shall be made or delivered with respect
thereto.
(b)
Each
Merger Sub Ordinary Share issued and outstanding immediately prior to the
Effective Time shall be converted into and become one newly issued, fully paid
and non-assessable ordinary share, par value $1.00 per share, of the Surviving
Corporation.
(c)
Each
Ordinary Share (including any Company Restricted Shares) issued and outstanding
immediately prior to the Effective Time (other than Ordinary Shares to be
canceled pursuant to Section 2.2(a) and Dissenting Ordinary Shares),
automatically shall be canceled and converted into the right to receive $76.00
in cash, without interest (the “Merger
Consideration”),
payable to the holder thereof upon surrender of the certificate formerly
representing such Ordinary Share (a “Certificate”)
in the
manner provided in Section 2.3. Such Ordinary Shares (including any Company
Restricted Shares), other than those canceled pursuant to Section 2.2(a) and
Dissenting Ordinary Shares, sometimes are referred to herein as the
“Merger
Shares.”
(d)
Notwithstanding
any provision of this Agreement to the contrary, if required by the IBCA (but
only to the extent required thereby), Ordinary Shares that are issued and
outstanding immediately prior to the Effective Time (other than Ordinary Shares
to be canceled pursuant to Section 2.2(a)) and that are held by holders of
such
Ordinary Shares who have not
voted
in
favor of the approval of this Agreement or consented thereto in writing and
who
have properly exercised dissenters’ rights with respect thereto in accordance
with, and who have complied with, Section 83 of the IBCA (the “Dissenting
Ordinary Shares”)
will
not be convertible into the right to receive the Merger Consideration, and
holders of such Dissenting Ordinary Shares will be entitled to receive payment
of fair value of such Dissenting Ordinary Shares in accordance with the
provisions of such Section 83 unless and until any such holder fails to perfect
or effectively withdraws or loses its rights to dissent and payment under the
IBCA. If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or loses such right, each of such holder’s Dissenting
Ordinary Shares will thereupon be treated as if they had been converted into,
at
the Effective Time, the right to receive the Merger Consideration and have
become exchangeable therefor, without any interest thereon. At the Effective
Time, any holder of Dissenting Ordinary Shares shall cease to have any rights
with respect thereto, except the rights provided in Section 83 of the IBCA
and
as provided in the previous sentence. The Company will give Parent (i) notice
of
any written objections or elections to dissent and (ii) the opportunity to
participate in and direct all negotiations and proceedings with respect to
such
notices and demands for payment. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to any demands for
payment of fair value or settle any such demands.
(e) If
between the date of this Agreement and the Effective Time the number of
outstanding Ordinary Shares is changed into a different number of shares or
a
different class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split-up, combination, exchange of shares or the like, other
than pursuant to the Merger, the amount of Merger Consideration payable per
Ordinary Share shall be correspondingly adjusted.
(f) Each
Ordinary Share outstanding immediately prior to the Effective Time subject
to
vesting or other lapse restrictions pursuant to the Company Stock Plans and
any
applicable restricted stock award agreements (collectively, the “Company
Restricted Shares”)
shall,
by virtue of this Agreement and, without further action of the Company, Parent,
Merger Sub or the holder of such Company Restricted Shares, vest and become
free
of such restrictions immediately prior to the Effective Time and shall be
canceled, retired and shall cease to exist and shall be converted into the
right
to receive the Merger Consideration in accordance with Section
2.2(c).
(g) The
Company Options, Company SARs and Company RSUs outstanding immediately prior
to
the Effective Time shall be treated as provided in Section 2.4.
(h) For
the
avoidance of doubt, the parties acknowledge and agree that the contribution
of
Ordinary Shares (including Company Restricted Shares, if any) to Parent pursuant
to the Equity Rollover Commitments shall be deemed to occur immediately prior
to
the Effective Time and prior to any other above-described event.
(a)
Prior
to
the Closing Date, Parent shall designate a bank or trust company that is
reasonably satisfactory to the Company to serve as the disbursing agent for
the
Merger Consideration and payments in respect of the Company Options, Company
SARs and Company
RSUs,
unless another agent is designated as provided in Section 2.4(a) (the
“Disbursing
Agent”).
Promptly after the Effective Time, Parent will cause to be deposited with the
Disbursing Agent cash in the aggregate amount sufficient to pay the Merger
Consideration in respect of all Merger Shares outstanding immediately prior
to
the Effective Time plus any cash necessary to pay for Company Options, Company
SARs and Company RSUs outstanding immediately prior to the Effective Time
pursuant to Section 2.4. Pending distribution of the cash deposited with
the Disbursing Agent, such cash shall be held in trust for the benefit of the
holders of Merger Shares, Company Options, Company SARs and Company RSUs
outstanding immediately prior to the Effective Time and shall not be used for
any other purposes; provided,
however,
that
Parent may direct the Disbursing Agent to invest such cash in (i) obligations
of
or guaranteed by the United States of America or any agency or instrumentality
thereof, (ii) money market accounts, certificates of deposit, bank repurchase
agreement or banker’s acceptances of, or demand deposits with, commercial banks
having a combined capital and surplus of at least $500,000,000, or (iii)
commercial paper obligations rated P-1 or A-1 or better by Standard & Poor’s
Corporation or Xxxxx’x Investor Services, Inc. Any profit or loss resulting
from, or interest and other income produced by, such investments shall be for
the account of Parent.
(b) As
promptly as practicable after the Effective Time, the Surviving Corporation
shall send, or cause the Disbursing Agent to send, to each record holder of
Merger Shares as of immediately prior to the Effective Time a letter of
transmittal and instructions for exchanging their Merger Shares for the Merger
Consideration payable therefor. The letter of transmittal will be in customary
form and will specify that delivery of Certificates will be effected, and risk
of loss and title will pass, only upon delivery of the Certificates to the
Disbursing Agent. Upon surrender of such Certificate or Certificates to the
Disbursing Agent together with a properly completed and duly executed letter
of
transmittal and any other documentation that the Disbursing Agent may reasonably
require, the record holder thereof shall be entitled to receive the Merger
Consideration payable in exchange therefor, without interest. Until so
surrendered and exchanged, each such Certificate shall, after the Effective
Time, be deemed to represent only the right to receive the Merger Consideration,
and until such surrender and exchange, no cash shall be paid to the holder
of
such outstanding Certificate in respect thereof.
(c) If
payment is to be made to a Person other than the registered holder of the Merger
Shares formerly represented by the Certificate or Certificates surrendered
in
exchange therefor, it shall be a condition to such payment that the Certificate
or Certificates so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such payment shall
pay
to the Disbursing Agent any applicable stock transfer taxes required as a result
of such payment to a Person other than the registered holder of such Merger
Shares or establish to the satisfaction of the Disbursing Agent that such stock
transfer taxes have been paid or are not payable.
(d) After
the
Effective Time, there shall be no further transfers on the stock transfer books
of the Company of the Ordinary Shares that were outstanding immediately prior
to
the Effective Time. If, after the Effective Time, Certificates are presented
to
the Surviving Corporation, Parent or the Disbursing Agent, such shares shall
be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article II.
(e) If
any
cash deposited with the Disbursing Agent remains unclaimed twelve months after
the Effective Time, such cash shall be returned to Parent or the Surviving
Corporation upon demand, and any holder who has not surrendered such holder’s
Certificates for the Merger Consideration payable in respect thereof prior
to
that time shall thereafter look only to the Surviving Corporation for payment
of
the Merger Consideration. Notwithstanding the foregoing, none of Parent, Merger
Sub, the Company, the Surviving Corporation or the Disbursing Agent shall be
liable to any holder of Certificates for an amount paid to a public official
pursuant to any applicable unclaimed property laws. Any amounts remaining
unclaimed by holders of Certificates as of a date immediately prior to such
time
that such amounts would otherwise escheat to or become property of any
Governmental Authority shall, to the extent permitted by applicable Law, become
the property of the Surviving Corporation on such date, free and clear of any
claims or interest of any Person previously entitled thereto.
(f) No
dividends or other distributions with respect to capital stock of the Surviving
Corporation with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate, including Dissenting Ordinary
Shares.
(g) Except
as
provided in Section 2.2(a), from and after the Effective Time, the holders
of Ordinary Shares (other than Dissenting Ordinary Shares) outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Ordinary Shares, other than the right to receive the Merger
Consideration as provided in this Agreement.
(h)
In
the
event that any Certificate has been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such Certificate to be
lost,
stolen or destroyed, in addition to the posting by such holder of any bond
in
such reasonable amount as the Surviving Corporation or the Disbursing Agent
may
direct as indemnity against any claim that may be made against the Surviving
Corporation or the Disbursing Agent with respect to such Certificate, the
Disbursing Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration in respect thereof entitled to be received
pursuant to this Agreement.
(i) Parent,
Surviving Corporation and the Disbursing Agent shall be entitled to deduct
and
withhold from the Merger Consideration otherwise payable hereunder any amounts
required to be deducted and withheld under any applicable Tax Law. To the extent
any amounts are so withheld, such withheld amounts shall be treated for all
purposes as having been paid to the holder from whose Merger Consideration
the
amounts were so deducted and withheld.
(a)
As
of the
Effective Time, each Company Option and each Company SAR that is outstanding
immediately prior to the Effective Time will be canceled and extinguished,
and
the holder thereof will be entitled to receive an amount in cash equal to the
product of (i) the number of Ordinary Shares subject to such Company Option
or Company SAR and (ii) the excess, if any, of the Merger Consideration
over the exercise price per share of such Company Option or Company SAR, without
interest. All payments with respect to canceled Company Options and canceled
Company SARs shall be made by the Disbursing Agent (or
such
other agent reasonably acceptable to the Company as Parent shall designate
prior
to the Effective Time) as promptly as reasonably practicable after the Effective
Time from funds deposited by or at the direction of Parent for the purpose
of
paying such amounts in accordance with Section 2.3(a).
(b) As
of the
Effective Time, each Company RSU that is outstanding immediately prior to the
Effective Time will be canceled and extinguished, and the holder thereof will
be
entitled to receive an amount in cash equal to the Merger Consideration, without
interest. All payments with respect to canceled Company RSUs shall be made
by
the Distributing Agent (or such other agent reasonably acceptable to the Company
as Parent shall designate prior to the Effective Time) as promptly as reasonably
practicable after the Effective Time from funds deposited by Parent for the
purpose of paying such amounts in accordance with Section 2.3(a).
(c) Prior
to
the Effective Time, the Company and Parent will adopt such resolutions and
take
such other commercially reasonable actions as are reasonably necessary in order
to effectuate the actions contemplated by Section 2.2(f) and this Section 2.4,
without paying any consideration or incurring any debts or obligations on behalf
of the Company or the Surviving Corporation, provided
that
such resolutions and actions shall expressly be conditioned upon the
consummation of the Merger and the other transactions contemplated hereby and
shall be of no effect if this Agreement is terminated.
(d) Parent,
the Surviving Corporation and the Disbursing Agent (or such other agent
designated pursuant to Section 2.4(a) or Section 2.4(b) hereof), shall
be entitled to deduct and withhold from any amounts to be paid hereunder in
respect of Company Options, Company SARs and Company RSUs amounts required
to be
deducted and withheld under any applicable Tax Law. To the extent any amounts
are so withheld, such withheld amounts shall be treated for all purposes as
having been paid to the holder of Company Options, Company SARs or Company
RSUs
from whose payments in respect of Company Options, Company SARs or Company
RSUs
the amounts were so deducted and withheld.
THE
SURVIVING CORPORATION
Section
3.1. Memorandum
of Association.
The
memorandum of association of the Company, as amended to read in its entirety
as
the memorandum of association of Merger Sub as in effect immediately prior
to
the Effective Time, shall be the memorandum of association of the Surviving
Corporation until thereafter amended in accordance with the terms thereof and
as
provided by applicable Law.
Section
3.2. Articles
of Association.
The
articles of association of the Company, as amended to read in its entirety
as
the articles of association of Merger Sub as in effect immediately prior to
the
Effective Time shall be the articles of association of the Surviving Corporation
until thereafter amended in accordance with the terms thereof and as provided
by
applicable Law.
Section
3.3. Directors
and Officers.
From
and after the Effective Time, (i) the directors of Merger Sub at the Effective
Time shall be the directors of the Surviving Corporation and (ii) the officers
of the Company at the Effective Time (other than those who Parent determines
shall not remain as officers of the Surviving Corporation) shall be the officers
of the Surviving Corporation, in each case until their respective successors
are
duly elected or appointed and qualified in accordance with applicable
Law.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
(x) as set forth in the corresponding sections or subsections of the disclosure
letter delivered to Parent and Merger Sub by the Company concurrently with
entering into this Agreement (the “Company
Disclosure Letter”)
(it
being understood that any information set forth in a particular section or
subsection of the Company Disclosure Letter shall be deemed to be disclosed
in
each other section or subsection thereof to which the relevance of such
information is reasonably apparent) or (y) as may be disclosed in the Company
SEC Reports filed prior to the date of this Agreement, the Company hereby
represents and warrants to Parent and Merger Sub that:
Section
4.1. Corporate
Existence and Power.
Each of
the Company and its Subsidiaries is duly organized, validly existing and in
good
standing under the laws of its jurisdiction (with respect to jurisdictions
that
recognize the concept of good standing). Each of the Company, its Subsidiaries
and, to the knowledge of the Company, the Company Joint Ventures has all
corporate or similar powers and authority required to own, lease and operate
its
respective properties and to carry on its business as now conducted. Each of
the
Company and its Subsidiaries is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such qualification necessary, except where the failure to be so licensed or
qualified has not had, and would not be reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on the Company. Neither the
Company nor any Subsidiary nor, to the Company’s knowledge, any Company Joint
Venture, is in violation of its organizational or governing documents in any
material respect.
Section
4.2. Corporate
Authorization.
(a)
The
Company has full corporate power and authority to execute and deliver this
Agreement and to consummate the Merger and the other transactions contemplated
hereby and to perform each of its obligations hereunder. The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the Merger and the other transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the Company. Except
for
the approval of this Agreement by a simple
majority of the Ordinary Shares present, in person or by proxy, at a meeting
of
Company shareholders called for such purpose (the “Requisite
Shareholder Vote”),
no
other corporate proceedings on the part of the Company are necessary to approve
this Agreement or to consummate the Merger or the other transactions
contemplated hereby. The
Board
of Directors of the Company, acting upon the unanimous recommendation of the
Special Committee, at a duly held meeting has (i) determined that the
Merger and this Agreement are fair to and in the best
interests
of the Company and its shareholders, (ii) approved the Merger, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, and (iii) resolved to recommend that the
Company shareholders approve this Agreement and directed that such matter be
submitted for consideration of the shareholders of the Company at the Company
Shareholder Meeting.
(b) This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due and valid execution and delivery of this Agreement by Parent
and Merger Sub, constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar Laws affecting the enforcement of creditors’ rights
generally and general equitable principles.
Section
4.3. Governmental
Authorization.
The
execution, delivery and performance by the Company of this Agreement and the
consummation of the Merger by the Company do
not
require any consent, approval, authorization or permit of, action by, filing
with or notification to any Governmental Authority, other than
(i) the
filing of the Articles of Merger; (ii) compliance with the applicable
requirements of the HSR Act or the applicable Other Antitrust Laws of
jurisdictions other than the United States; (iii)
filings with, and approvals by, Gaming Authorities specified in Section 4.3(iii)
of the Company Disclosure Letter; (iv)
compliance with the applicable requirements of the Exchange Act including the
filing of the Schedule 13E-3; (v) compliance with the rules and regulations
of the New York Stock Exchange; (vi) compliance with any applicable foreign
or
state securities or Blue Sky laws; and (vii) any
such
consent, approval, authorization, permit, action, filing or notification the
failure of which to make or obtain would not (A) be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Company
or
(B) prevent or materially delay the consummation of the Merger or the Company’s
ability to observe and perform its material obligations hereunder.
Section
4.4. Non-Contravention.
The
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the Merger and the other transactions
contemplated hereby do not and will not (i) contravene or conflict with the
organizational or governing documents of the Company or any of its Subsidiaries
or Company Joint Ventures; (ii) assuming compliance with the matters
referenced in Section 4.3 and the receipt of the Requisite Shareholder Vote,
contravene or conflict with or constitute a violation of any provision of any
Law binding upon or applicable to the Company or any of its Subsidiaries or
Company Joint Ventures or any of their respective properties or assets;
(iii)
require
the consent, approval or authorization of, or notice to or filing with any
third
party with respect to, result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both would become
a
default) or result in the loss of benefit under, or give rise to any right
of
termination, cancellation, amendment or acceleration of any right or obligation
of the Company or any of its Subsidiaries, or result in the creation of any
Lien
on any of the properties or assets of the Company or its Subsidiaries under
any
loan or credit agreement, note, bond, mortgage, indenture, contract, agreement,
lease, license, permit or other instrument or obligation (each, a “Contract”)
to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or its or any of their respective properties or
assets are bound,
except
in the case of clauses (ii) and (iii) above, which would not (A) be reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on
the Company or (B) prevent
or
materially delay the consummation of the Merger or the Company’s ability to
observe and perform its material obligations hereunder.
Section
4.5. Capitalization.
(a)
The
authorized share capital of the Company is $350,000 divided into 250,000,000
Ordinary Shares and 100,000,000 Preference Shares, par value $0.001 per share
(the “Preference
Shares”).
As of
February 28, 2006, there were (i) 36,718,698 Ordinary Shares issued and
outstanding (including 1,041,446 outstanding Company Restricted Shares) and
no
Preference Shares issued and outstanding and (ii) outstanding Company Options
to
purchase an aggregate of 2,533,382 Ordinary Shares, with a weighted average
exercise price of $35.20per share.
All
outstanding Ordinary Shares are duly authorized, validly issued, fully paid
and
non-assessable, and are not subject to and were not issued in violation of
any
preemptive or similar right, purchase option, call or right of first refusal
or
similar right.
(b)
Except
as
set forth in Section 4.5(a) and except for 922,853 Ordinary Shares reserved
for
issuance upon conversion of the Company’s 2.375% Convertible Senior Subordinated
Notes due 2024 (the “Convertible
Notes”)
and
4,604,856 Ordinary Shares reserved for issuance pursuant to the Company Stock
Plans, as of February 28, 2006, there have not been reserved for issuance,
and
there are no outstanding (i) shares of capital stock or other voting securities
of the Company; (ii) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of the Company; (iii) Company Options or other rights or options
to
acquire from the Company, or obligations of the Company to issue, any shares
of
capital stock, voting securities or securities convertible into or exchangeable
for shares of capital stock or voting securities of the Company; or (iv) equity
equivalent interests in the ownership or earnings of the Company or other
similar rights in respect of the Company (the items in clauses (i) through
(iv)
collectively, “Company
Securities”).
There
are no outstanding obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any Company Securities. There are no preemptive
rights of any kind which obligate the Company or any of its Subsidiaries to
issue or deliver any Company Securities. There are no shareholder agreements,
voting trusts or other agreements or understandings to which the Company or
any
of its Subsidiaries is a party or by which it is bound relating to the voting
or
registration of any shares of capital stock of the Company or preemptive rights
with respect thereto.
(c)
Other
than the issuance of Ordinary Shares upon exercise of Company Options or Company
SARs or upon conversion of the Convertible Notes, from February 28, 2006 to
the
date of this Agreement, the Company has not declared or paid any dividend or
distribution in respect of any Company Securities, and neither the Company
nor
any Subsidiary of the Company has issued, sold or repurchased any Company
Securities, and their respective Boards of Directors have not authorized any
of
the foregoing.
(d)
No
bonds,
debentures, notes or other indebtedness having the right to vote on any matters
on which Company shareholders may vote are outstanding.
Section
4.6. Company
Subsidiaries and Joint Ventures.
(a)
Section
4.6 of the Company Disclosure Letter sets forth all Company Joint Ventures.
All
equity interests of any
Subsidiary
of the Company held by the Company or any other Subsidiary of the Company are
validly issued, fully paid and non-assessable (to the extent such concepts
are
applicable) and were not issued in violation of any preemptive or similar
rights, purchase option, call, or right of first refusal or similar rights.
All
such equity interests in Subsidiaries held by the Company or any Subsidiary
of
the Company are free and clear of any Liens or any other limitations or
restrictions on such equity interests (including any limitation or restriction
on the right to vote, pledge or sell or otherwise dispose of such equity
interests) other than Permitted Liens. All equity interests of the Company
Joint
Ventures held by the Company or any Subsidiary of the Company are free and
clear
of any Liens other than Permitted Liens.
(b)
There
have not been reserved for issuance, and there are no outstanding (i) securities
of the Company or any of its Subsidiaries convertible into or exchangeable
for
shares of capital stock or voting securities of any Subsidiary of the Company;
(ii) rights or options to acquire from the Company or its Subsidiaries, or
obligations of the Company or its Subsidiaries to issue, any shares of capital
stock, voting securities or securities convertible into or exchangeable for
shares of capital stock or voting securities of any Subsidiary of the Company;
or (iii) equity equivalent interests in the ownership or earnings of any
Subsidiary of the Company or other similar rights in respect of any Subsidiary
of the Company (the items in clauses (i) through (iii) collectively,
“Subsidiary
Securities”).
There
are no outstanding obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any Subsidiary Securities. There are no preemptive
rights of any kind which obligate the Company or any of its Subsidiaries to
issue or deliver any Subsidiary Securities. There are no shareholder agreements,
voting trusts or other agreements or understandings to which the Company or
any
of its Subsidiaries is a party or by which it is bound relating to the voting
or
registration of any shares of capital stock of any Subsidiary of the Company
or
preemptive rights with respect thereto.
Section
4.7. Reports
and Financial Statements.
(a)
The
Company has filed all forms, reports, statements, certifications and other
documents (including all exhibits, amendments and supplements thereto) required
to be filed by it with the SEC since January 1, 2003 (all such forms, reports,
statements, certificates and other documents filed with or furnished to the
SEC
since January 1, 2003, with any amendments thereto, collectively, the
“Company
SEC Reports”),
each
of which, including any financial statements or schedules included therein,
as
finally amended prior to the date hereof, has complied as to form in all
material respects with the applicable requirements of the Securities Act and
Exchange Act as of the date filed with the SEC. None of the Company’s
Subsidiaries is required to file periodic reports with the SEC. None of the
Company SEC Reports contained, when filed with the SEC and, if amended, as
of
the date of such amendment, any untrue statement of a material fact or omitted
to state a material fact required to be stated or incorporated by reference
therein or necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading. As of the date
of
this Agreement, there are no outstanding or unresolved comments in comment
letters received from the SEC staff with respect to the Company SEC Reports.
To
the knowledge of the Company, none of the Company SEC Reports is the subject
of
ongoing SEC review, outstanding SEC comment or outstanding SEC
investigation.
(b)
Each
of
the consolidated financial statements of the Company and its Subsidiaries
included (or incorporated by reference) in the Company SEC Reports (including
the related notes and schedules, where applicable) fairly present (subject,
in
the case of the unaudited statements, to normal year-end auditing adjustments,
none of which are expected to be material in nature or amount) the results
of
the consolidated operations and changes in shareholders’ equity and consolidated
financial position of the Company and its Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth. Each of such
consolidated financial statements (including the related notes and schedules,
where applicable) complied, as of the date of filing, in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC applicable thereto and each of such financial statements
(including the related notes and schedules, where applicable) were prepared
in
accordance with GAAP (except, in the case of unaudited statements, as permitted
by the rules and regulations of the SEC) consistently applied during the periods
involved, except in each case as indicated in such statements or in the notes
thereto.
Section
4.8. Undisclosed
Liabilities.
Except
(i) for those liabilities that are fully reflected or reserved against on the
consolidated balance sheet of the Company included in the Company’s Annual
Report on Form 20-F for the year ended December 31, 2004, (ii) for liabilities
incurred in the ordinary course of business consistent with past practice since
December 31, 2004, which are not material taken as a whole, or (iii) for
liabilities that have been discharged or paid in full prior to the date hereof
in the ordinary course of business consistent with past practice, neither the
Company nor any of its Subsidiaries has incurred any material liability of
any
nature whatsoever (whether absolute, accrued or contingent or otherwise and
whether due or to become due), and to knowledge of the Company there is no
existing condition, event or circumstances that could reasonably be expected
to
result in any such material liability in the future, except in any such case
as
contemplated by this Agreement.
Section
4.9. Disclosure
Documents.
The
Schedule 13E-3 and the Company Proxy Statement will not, at the date it is
filed
with the SEC (in the case of the Schedule 13E-3), at the date it is first mailed
to shareholders of the Company (in the case of the Company Proxy Statement)
or
at the time of the Company Shareholder Meeting (other than as to information
supplied by Parent, Merger Sub or any of their Affiliates, for inclusion
therein), contain any untrue statement of a material fact or omit to state
any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not
misleading. The Company will cause the Company Proxy Statement, the Schedule
13E-3 and all related SEC filings to comply as to form in all material respects
with the requirements of the Exchange Act applicable thereto and any other
applicable Law as of the date of such filing. No representation is made by
the
Company with respect to statements made in the Company Proxy Statement or the
Schedule 13E-3 based on information supplied by Parent, Merger Sub or their
Affiliates specifically for inclusion therein.
Section
4.10. Absence
of Certain Changes or Events.
Since
December 31, 2004, no change, circumstance, event or effect has occurred which
has had or would be reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on the Company.
Section
4.11. Litigation.
Except
as publicly disclosed in the Company SEC Reports filed with or furnished to
the
SEC prior to the date hereof, neither the Company nor any
of
its
Subsidiaries is a party to any, and there are no pending or, to the Company’s
knowledge, threatened, legal, administrative, arbitral or other material
proceedings, claims, actions or governmental or regulatory investigations (a
“Proceeding”)
of any
nature against the Company or any of its Subsidiaries or challenging the
validity or propriety of the transactions contemplated by this Agreement, except
for any Proceeding which (i) has not had or would not be reasonably likely
to
have, individually or in the aggregate, a Material Adverse Effect on the Company
or (ii) would prevent
or materially delay the consummation of the Merger or the Company’s ability to
observe and perform its obligations hereunder.
Neither
the Company nor any of its Subsidiaries or any of their businesses or properties
are subject to or bound by any injunction, order, judgment, decree or regulatory
restriction of any Governmental Authority specifically imposed upon the Company,
any of its Subsidiaries or their respective properties or assets, except for
any
injunction, order, judgment, decree or regulatory restriction which (i) has
not
had or would not be reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on the Company or (ii) would prevent
or materially delay the consummation of the Merger or the Company’s ability to
observe and perform its obligations hereunder.
Section
4.12. Taxes.
Except
as have not had or would not be reasonably likely to have, individually or
in
the aggregate, a Material Adverse Effect on the Company:
(a)
all
Tax
Returns required to be filed by the Company or any of its Subsidiaries have
been
properly prepared and timely filed, and all such Tax Returns (including
information provided therewith or with respect thereto) are true, correct and
complete;
(b)
the
Company and its Subsidiaries have fully and timely paid all Taxes (whether
or
not shown to be due on the Tax Returns referred to in Section 4.12(a))
other than Taxes that are not yet due and payable or that are being contested
in
good faith;
(c)
no
audit
or other proceeding by any taxing authority is pending or, to the knowledge
of
the Company, threatened in writing against the Company or any of its
Subsidiaries;
(d)
there
are
no Tax sharing agreements (or similar agreements) to which the Company or any
of
its Subsidiaries is a party to or by which the Company or any of its
Subsidiaries is bound (other than agreements exclusively between or among the
Company and its Subsidiaries).
Section
4.13. ERISA.
(a)
Each
Employee Benefit Plan (other than any multiemployer plan within the meaning
of
ERISA Section 3(37)) and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, bonus, incentive, deferred
compensation and other material employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA, whether formal
or informal, oral or written, legally binding or not, under which any Company
Employee has any present or future right to benefits, maintained or contributed
to by the Company or any of its Subsidiaries or under which the Company or
any
of its Subsidiaries has any present or future liability (the “Company
Benefit Plans”)
has
been operated, funded and administered in compliance with its terms, the terms
of
any
applicable collective bargaining agreement and with all applicable requirements
of Law, including ERISA and the Code, except as would not subject the Company
or
any of its Subsidiaries to any liability that has had or would be reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on
the Company. Except
as
has not had and would not be reasonably likely to have, individually or in
the
aggregate, a Material Adverse Effect
on the
Company,
none of
the Company, any of its Subsidiaries, any officer of the Company or any of
its
Subsidiaries or any Company Benefit Plan that is subject to ERISA, or, to the
knowledge of the Company, any trust created thereunder or any trustee or
administrator thereof, has engaged in
a
nonexempt “prohibited transaction” (as such term is defined in Section 406
of ERISA and Section 4975 of the Code). Except
as
has not had and would not be reasonably likely to have, individually or in
the
aggregate, a Material Adverse Effect on the Company,
no
“accumulated funding deficiency” (as such term is defined in Section 302 of
ERISA and Section 412 of the Code (whether or not waived)) has occurred
with respect to any Company Benefit Plan.
(b) Except
in
the ordinary course of business or as required by applicable Law, since December
31, 2005, there has been no amendment to any Company Benefit Plan that would
increase materially the expense to the Company or any of its Subsidiaries of
maintaining such plan above the level of the expense incurred by the Company
or
its Subsidiaries therefor for the most recent fiscal year. Except as
contemplated by this Agreement, the execution of this Agreement and the
consummation of the transactions contemplated hereby will not (either alone
or
together with any other related event) (i) result in any material payment by
the
Company or any of its Subsidiaries to any Company Employee of any money or
other
property under any Company Benefit Plan or Company Stock Plan or (ii) result
in
the accelerated vesting or funding through a trust or otherwise of a material
amount of compensation or benefits under any Company Benefit Plan or Company
Stock Plan, in each case, whether or not such payment would constitute a
“parachute payment” within the meaning of Section 280G of the Code.
Section
4.14. Compliance
With Laws.
(a)
The
Company and each of its Subsidiaries is, and at all times has been, in
compliance with all Laws (including Gaming Laws) applicable to the Company,
its
Subsidiaries and their respective businesses and activities, except for such
noncompliance that has not had, and would not be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the
Company.
(b)
The
Company and each Subsidiary of the Company has and maintains in full force
and
effect, and is in compliance with, all Permits and all orders from Governmental
Authorities necessary for the Company and each Subsidiary to carry on their
respective businesses as currently conducted and currently proposed to be
conducted, except as has not had, and would not be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the
Company.
Section
4.15. Finders’
Fees.
No
agent, broker, investment banker, financial advisor or other firm or person
except X.X. Xxxxxx Securities Inc. is or will be entitled to any broker’s or
finder’s fee or any other similar commission or fee in connection with any of
the
transactions
contemplated by this Agreement. The Company has disclosed to Parent all material
terms of the engagement of X.X. Xxxxxx Securities Inc., including the amount
of
such fees and any right of first offer or other “tail” provisions.
Section
4.16. Opinion
of Financial Advisor.
X.X.
Xxxxxx Securities Inc. has delivered to the Special Committee, an opinion to
the
effect that, as of the date of this Agreement, the consideration to be received
by holders of Ordinary Shares (other than SK, HBK and Istithmar and their
Affiliates and any other holder who will contribute Ordinary Shares to Parent)
in the Merger is fair, from a financial point of view, to such
holders.
Section
4.17. Anti-Takeover
Provisions.
The
Board of Directors of the Company has taken all necessary action so that any
takeover, anti-takeover, moratorium, “fair price”, “control share” or other
similar Law enacted under any Law applicable to the Company (each, a
“Takeover
Statute”)
do
not, and will not, apply to this Agreement, the Merger or the other transactions
contemplated hereby. The Company does not have any shareholder rights plan
in
effect.
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Parent
and Merger Sub hereby jointly and severally represent and warrant to the Company
that:
Section
5.1. Corporate
Existence and Power. Each
of
Parent and Merger Sub is a corporation duly organized, validly existing and
in
good standing under the laws of the Commonwealth of The Bahamas and has all
corporate power and authority required to execute and deliver this Agreement
and
to consummate the Merger and the other transactions contemplated hereby and
to
perform each of its obligations hereunder.
Section
5.2. Corporate
Authorization.
The
execution, delivery and performance by Parent and Merger Sub of this Agreement
and the consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Parent and Merger Sub. Except for the approval of this
Agreement by Parent, as the sole shareholder of Merger Sub (which shall have
occurred prior to the Effective Time), no other corporate proceedings other
than
those previously taken or conducted on the part of Parent or Merger Sub are
necessary to approve this Agreement or to consummate the other transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub and, assuming the due and valid execution
and
delivery of the Agreement by the Company, constitutes a legal, valid and binding
agreement of Parent and Merger Sub, respectively, enforceable against Parent
and
Merger Sub in accordance with its terms, except as such enforceability may
be
limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws
affecting the enforcement of creditors’ rights generally and general equitable
principles.
Section
5.3. Governmental
Authorization.
The
execution, delivery and performance by Parent and Merger Sub of this Agreement
and the consummation by Parent and Merger Sub of the Merger and other
transactions contemplated by this Agreement do not require
any
consent, approval, authorization or permit of, action by, filing with or
notification to any Governmental Authority, other than (i) the filing of the
Articles of Merger; (ii) compliance with the applicable requirements of the
HSR Act or the applicable Other Antitrust Laws of jurisdictions other than
the
United States; (iii) filings
with, and approvals by, Gaming Authorities specified in Section 4.3(iii) of
the
Company Disclosure Letter, (iv) compliance
with the applicable requirements of the Exchange Act including the filing of
the
Schedule 13E-3; (v) compliance with any applicable foreign or state
securities or Blue Sky laws; and (vi) any such consent, approval,
authorization, permit, action, filing or notification the failure of which
to
make or obtain would not be reasonably likely to adversely effect in any
material respect, or prevent
or materially delay, the consummation of the Merger or Parent’s or Merger Sub’s
ability to observe and perform its material obligations hereunder.
Section
5.4. Non-Contravention.
The
execution, delivery and performance by Parent and Merger Sub of this Agreement
and the consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby do not and will not (i) contravene or conflict
with the organizational or governing documents of Parent or Merger Sub, (ii)
assuming compliance with the items specified in Section 5.3, contravene,
conflict with or constitute a violation of any provision of any Law binding
upon
or applicable to Parent or Merger Sub or any of their respective properties
or
assets, or (iii) require
the consent, approval or authorization of, or notice to or filing with any
third
party with respect to, result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both would become
a
default), or give rise to any right of termination, cancellation, amendment
or
acceleration of any right or obligation of Parent or Merger Sub or to a loss
of
any material benefit to which Parent or Merger Sub is entitled under any
Contract.
Section
5.5. Disclosure
Documents.
None of
the information supplied or to be supplied by Parent or Merger Sub or any of
their Affiliates specifically for inclusion in the Company Proxy Statement
or
Schedule 13E-3 will, at the date it is filed with the SEC (in the case of the
Schedule 13E-3), at the date it is first mailed to shareholders of the Company
(in the case of the Company Proxy Statement), or at the time of the Company
Shareholder Meeting, contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
are
made, not misleading.
Section
5.6. Finders’
Fees.
No
agent, broker, investment banker, financial advisor or other firm or person
except Deutsche Bank AG and Groton Partners LLC is or will be entitled to any
broker’s or finder’s fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement.
Section
5.7. Financing.
Parent
has delivered to the Company true and complete copies of (i) the commitment
letter with respect to the senior secured credit facilities, dated as of the
date hereof, among Parent, Deutsche Bank AG New York Branch, Deutsche Bank
Securities Inc. and Xxxxxxx Xxxxx Credit Partners L.P. and the commitment letter
with respect to the senior subordinated bridge facility, dated as of the date
hereof, among Parent, Deutsche
Bank AG Cayman Islands Branch and Xxxxxxx Sachs Credit Partners L.P.
(collectively,
the “Debt
Financing Commitments”),
pursuant to which the lenders party thereto committed, subject to the terms
thereof, to lend the amounts set forth therein (the “Debt
Financing”),
and
(ii) the equity
commitment
letters, dated as of the date hereof, from (A) Istithmar , (B) Whitehall Street
Global Real Estate Limited Partnership 0000, Xxxxxxxxx Xxxxxx International
Real
Estate Limited Partnership 0000,
Xxxxxxxxx Xxxxxx Global Employee Fund 2005, L.P. and Whitehall Street
International Employee Fund 2005 (Delaware), L.P., (C) Colony Investors VII
L.P.
, (D) Providence Equity Offshore Partners V L.P. and (E) The Related Companies,
L.P. (the “Equity
Financing Commitments”
and
together with the Debt Financing Commitments, the “Financing
Commitments”),
pursuant to which such parties have committed, subject to the terms thereof,
to
invest the cash amounts set forth therein (the “Equity
Financing”
and
together with the Debt Financing, the “Financing”).
Prior
to the date of this Agreement, (i) none of the Financing Commitments has been
amended or modified, and (ii) the respective commitments contained in the
Financing Commitments have not been withdrawn or rescinded in any respect.
As of
the date of this Agreement, the Financing Commitments are in full force and
effect. The
only
conditions precedent to the obligations of the lenders and other Persons
committing pursuant to the Financing Commitments to make the Financing available
to Parent or its Affiliates are those contemplated by the terms of the Financing
Commitments. As of the date hereof, assuming the accuracy of the Company’s
representations and warranties contained herein, neither Parent, Merger Sub
nor
any direct investor in Parent has any knowledge that any event has occurred
which, with or without notice, lapse of time or both, would constitute a default
or breach on the part of Parent, Merger Sub or any direct investor in Parent
under any term or condition of the Financing Commitments or otherwise be
reasonably likely to result in any portion of the Financing contemplated thereby
to be unavailable. As of the date hereof, assuming the accuracy of the Company’s
representations and warranties contained herein, neither Parent, Merger Sub
nor
any of the direct investors in Parent has any reason to believe that it will
be
unable to satisfy on a timely basis any term or condition to be satisfied by
it
and contained in the Financing Commitments. Parent, Merger Sub and their
respective Affiliates have fully paid any and all commitment fees or other
fees
required by the terms of the Financing Commitments to be paid on or before
the
date of this Agreement. Assuming the accuracy of the Company’s representations
and warranties contained herein, the proceeds from the Financing constitute
all
of the financing required to be provided by Parent for the consummation of
the
Merger and other transactions contemplated by this Agreement.
Section
5.8. Equity
Rollover Commitments.
Parent
has delivered to the Company true and complete copies of the equity rollover
letters, dated as of the date hereof, from (i) WLG, SK and HBK and (ii)
Istithmar (the “Equity
Rollover Commitments”),
pursuant to which such parties have committed to contribute to Parent that
number of Ordinary Shares set forth in such letters for shares of capital stock
of Parent immediately prior to the Effective Time. As of the date of this
Agreement, the Equity Rollover Commitments are in full force and effect. The
only conditions precedent to the obligations of (i) WLG, SK or HBK or
(ii) Istithmar under the Equity Rollover Commitments are those contemplated
by
the terms of the Equity Rollover Commitments. As of the date hereof, assuming
the accuracy of the Company’s representations and warranties contained herein,
neither Parent, Merger Sub nor any direct investor in Parent (or, in the case
of
WLG, SK or HBK) has any knowledge that any event has occurred which, with or
without notice, lapse of time or both, would constitute a default or breach
under any term or condition of the Equity Rollover Commitments or otherwise
be
reasonably likely to result in any portion of the commitments contemplated
thereby to be unavailable. As of the date hereof, assuming the accuracy of
the
Company’s representations and warranties contained herein, neither Parent,
Merger Sub nor any direct investor in Parent (or, in
the
case
of WLG, SK or HBK) has any reason to believe that (i) WLG, SK or HBK or (ii)
Istithmar will be unable to satisfy on a timely basis any term or condition
to
be satisfied by it and contained in the Equity Rollover Commitments.
Section
5.9. Parent
and Merger Sub.
Each of
Parent and Merger Sub has been formed solely for the purpose of engaging in
the
transactions contemplated hereby and prior to the Effective Time will have
engaged in no other business activities and will have incurred no liabilities
or
obligations other than as contemplated herein, including in connection with
arranging the Financing. As of March 20, 2006, there were 10 ordinary shares
of
Merger Sub outstanding, representing the only shares of Merger Sub outstanding
and entitled to vote on the Merger.
Section
5.10. Voting
Arrangements.
Other
than the voting agreement dated the date hereof among the Company, WLG, SK
and
HBK (the “Voting
Agreement”)
and
the equity rollover letters, dated as of the date hereof, from Istithmar (the
“Istithmar
Equity Rollover Commitment”),
no
direct or indirect equity investor in Parent or Merger Sub, or any Affiliate
thereof (other than the Company or any of its Subsidiaries), is subject to
any
voting trust or other agreement, arrangement or restriction with respect to
the
voting of any Ordinary Shares it owns beneficially (determined for the purposes
of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) or of record in respect of the Merger or any transaction involving a
Company Acquisition Proposal or Superior Proposal or any other transactions
contemplated hereby or thereby.
CONDUCT
OF BUSINESS PENDING THE MERGER
Section
6.1. Conduct
of the Company and Subsidiaries.
Except
for matters (x) set forth in Section 6.1 of the Company Disclosure Letter or
as
otherwise contemplated by or specifically provided in this Agreement, or (y)
consented to in writing by Parent, from the date hereof until the Effective
Time, the Company shall, and shall cause its Subsidiaries to, conduct their
respective businesses in the ordinary and usual course consistent with past
practice. Without limiting the generality of the foregoing, and except for
matters set forth in Section 6.1 of the Company Disclosure Letter or as
otherwise contemplated by or specifically provided in this Agreement, without
the prior written consent of Parent (which consent shall not be unreasonably
withheld or delayed), the Company shall not, and shall not permit its
Subsidiaries to:
(a)
propose
or adopt any change in its organizational or governing documents;
(b)
merge
or
consolidate the Company or any of its Subsidiaries with any Person;
(c)
sell,
lease or otherwise dispose of a material amount of assets or securities,
including by merger, consolidation, asset sale or other business combination
(including formation of a Joint Venture);
(d)
redeem,
repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify
in
any material respect the terms of, indebtedness for borrowed money or assume,
guarantee or endorse or otherwise become responsible for, whether directly,
contingently or
otherwise,
the obligations of any Person, other than the incurrence, assumption or
guarantee of indebtedness in the ordinary course consistent with past practice,
including any borrowings under the existing credit facilities of the Company
and
its Subsidiaries to fund working capital needs, and such other actions taken
in
the ordinary course of business consistent with past practice;
(e)
offer,
place or arrange any issue of debt securities or commercial bank or other credit
facilities that could be reasonably expected to compete with or impede the
Debt
Financing or cause the breach of any provisions of the Debt Financing
Commitments or cause any condition set forth in the Debt Financing Commitments
not to be satisfied;
(f)
make
any
material loans, advances or capital contributions to, acquisitions or licenses
of, or investments in, any other Person, except as required by existing
contracts;
(g)
authorize
any capital expenditures in excess of $10,000,000 per project or related series
of projects of $50,000,000 in the aggregate, other than expenditures necessary
to maintain existing assets in good repair and expenditures contemplated by
the
Company’s 2006 budget and approved development plans, as delivered to Parent
prior to the date hereof;
(h)
pledge
or
otherwise encumber shares of capital stock or other voting securities of the
Company or any of its Subsidiaries;
(i)
mortgage
or pledge any of its material assets, tangible or intangible, or create, assume
or suffer to exist any Lien thereupon (other than Permitted Liens);
(j)
enter
into or amend any Contract with any executive officer, director or other
Affiliate of the Company or any of its Subsidiaries or any Person beneficially
owning 5% or more of the Ordinary Shares;
(k)
(i)
split, combine or reclassify any Company Securities or Subsidiary Securities
or
amend the terms of any Company Securities or Subsidiary Securities, (ii)
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of Company Securities
or Subsidiary Securities other than a dividend or distribution by a wholly
owned
Subsidiary of the Company to its parent corporation in the ordinary course
of
business, (iii) issue or offer to issue any Company Securities or Subsidiary
Securities, or redeem, repurchase or otherwise acquire or offer to redeem,
repurchase, or otherwise acquire, any Company Securities or Subsidiary
Securities, other than in connection with (A) the exercise of Company Options
or
Company SARs or conversion of the Convertible Notes, (B) the withholding of
Company Securities to satisfy tax obligations with respect to Company Equity
Awards, (C) the acquisition by the Company of Company Securities in connection
with the forfeiture of Company Equity Awards, (D) the acquisition by the Company
of Company Securities in connection with the net exercise of Company Options
in
accordance with the terms thereof, and (E) the issuance of Company Securities
as
required to comply with any Company Benefit Plan or Employment Agreement as
in
effect on the date of this Agreement;
(l) except
(i) as required pursuant to existing written agreements or any Company Benefit
Plan, Employment Agreement or collective bargaining agreement in
effect on
the
date
hereof, (ii) as effected in the ordinary course of business or (iii) as required
by applicable Law (including Section 409A of the Code), (A) adopt, amend or
terminate any Company Benefit Plan or enter into or amend any collective
bargaining agreement or any Employment Agreement with any officer or director
of
the Company, except for entry into Employment Agreements with persons who are
not executive officers or directors to the extent necessary to replace a
departing employee or fill an existing vacancy, (B) take any action to
accelerate the vesting or payment, or fund or in any other way secure the
payment, of compensation or benefits under any Company Benefit Plan or (C)
increase in any manner the compensation or fringe benefits of any officer or
director of the Company by an amount in excess of $1,000,000 in the
aggregate;
(m)
settle
or
compromise any litigation, or release, dismiss or otherwise dispose of any
claim
or arbitration, other than settlements or compromises of litigation, claims
or
arbitration that do not exceed $10,000,000 in the aggregate and do not involve
any material injunctive or other non-monetary relief or impose material
restrictions on the business or operations of the Company;
(n)
make
or
change any material Tax election, or settle or compromise any material Tax
liability of the Company or any of its Subsidiaries, agree to an extension
of
the statute of limitations with respect to the assessment or determination
of
Taxes of the Company or any of its Subsidiaries, file any amended Tax Return
with respect to any material Tax, enter into any closing agreement with respect
to any Tax or surrender any right to claim a Tax refund;
(o)
make
any
change in financial accounting methods or method of Tax accounting, principles
or practices materially affecting the reported consolidated assets, liabilities
or results of operations of the Company and its Subsidiaries, except insofar
as
may have been required by a change in GAAP or Law;
(p)
adopt
a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
of
its Subsidiaries (other than the Merger and consolidations, mergers or
reorganizations solely among wholly owned Subsidiaries of the Company), or
a
letter of intent or agreement in principle with respect thereto;
(q)
take
any
action that is intended to or would result in any of the conditions to effecting
the Merger set forth in Sections 8.1 and 8.2 becoming incapable of being
satisfied;
(r)
take
any
action or fail to take any action which would, or would be reasonably likely
to,
individually or in the aggregate, prevent, materially delay or materially impede
the ability of the Company to consummate the Merger or the other transactions
contemplated by this Agreement; or
(s)
authorize,
agree or commit to do any of the foregoing.
Section
6.2. Conduct
of Parent and Merger Sub.
Each of
Parent and Merger Sub agrees that, from the date hereof to the Effective Time,
it shall not (i) take any action (including by way of amendment to the Interim
Investors Agreement dated as of the date hereof among Parent and the investors
named therein (the “Interim
Investors Agreement”)
that
is
intended
to or would result in any of the conditions to effecting the Merger set forth
in
Sections 8.1 and 8.3 becoming incapable of being satisfied; or (ii) take any
action or fail to take any action which would, or would be reasonably likely
to,
individually or in the aggregate, prevent, materially delay or materially impede
the ability of Parent and Merger Sub to consummate the Merger or the other
transactions contemplated by this Agreement. Parent has provided to the Company
a summary of the material provisions of the Interim Investors Agreement relating
to “Gaming/HSR Approvals” and “Remedies”.
Section
6.3. No
Control of Other Party’s Business.
Nothing
contained in this Agreement is intended to give Parent, directly or indirectly,
the right to control or direct the Company’s or its Subsidiaries’ operations
prior to the Effective Time, and nothing contained in this Agreement is intended
to give the Company, directly or indirectly, the right to control or direct
Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of
Parent and the Company shall exercise, consistent with the terms and conditions
of this Agreement, complete control and supervision over its and its
Subsidiaries respective operations.
ADDITIONAL
AGREEMENTS
Section
7.1. Shareholder
Meeting; Proxy Material.
(a)
The
Company shall (i) take all action necessary to duly call, give notice of,
convene and hold a meeting of its shareholders (the “Company
Shareholder Meeting”)
for
the purpose of obtaining the approval of this Agreement by the Company
shareholders in accordance with applicable Law as promptly as reasonably
practicable after the SEC confirms that it has no further comments on the
Schedule 13E-3, (ii) use reasonable best efforts to solicit the approval of
this
Agreement by the Company shareholders, and (iii) except to the extent that
the
Board of Directors of the Company (acting through the Special Committee, if
such
committee still exists) shall have withdrawn or modified its approval or
recommendation of this Agreement as permitted by Section 7.4, include in the
Company Proxy Statement the recommendation of the Board of Directors of the
Company that the shareholders of the Company approve this Agreement (the
“Recommendation”).
(b)
In
connection with the Company Shareholder Meeting, the Company will (i) as
promptly as reasonably practicable prepare the Company Proxy Statement and
the
Schedule 13E-3 and file, jointly with Parent and Merger Sub, the Schedule 13E-3
with the SEC as promptly as reasonably practicable, (ii) respond as promptly
as
reasonably practicable to any comments received from the SEC with respect to
such filing and will provide copies of such comments to Parent and Merger Sub
promptly upon receipt and copies of proposed responses to Parent and Merger
Sub
a reasonable time prior to filing to allow meaningful comment, (iii) as promptly
as reasonably practicable prepare and file (after Parent and Merger Sub have
had
a reasonable opportunity to review and comment on) any amendments or supplements
necessary to be
filed
in response to any SEC comments or as required by Law, (iv) use its reasonable
best efforts to have the SEC confirm that it has no further comments on the
Schedule 13E-3 and will thereafter mail to its shareholders as promptly as
reasonably practicable the Company Proxy Statement and all other customary
proxy
or other materials for meetings such as the Company
Shareholder
Meeting (provided that the Company shall be under no obligation to mail the
Company Proxy Statement to its shareholders prior to the No-Shop Period Start
Date), (v) to the extent required by applicable Law, as promptly as reasonably
practicable prepare, file and distribute to the Company shareholders any
supplement or amendment to the Company Proxy Statement and the Schedule 13E-3
if
any event shall occur which requires such action at any time prior to the
Company Shareholder Meeting, and (vi) otherwise use reasonable best efforts
to
comply with all requirements of Law applicable to the Company Shareholder
Meeting and the Merger. Parent and Merger Sub shall cooperate with the Company
in connection with the preparation of the Company Proxy Statement and the
preparation and filing of the Schedule 13E-3, including promptly furnishing
the
Company upon request with any and all information as may be required to be
set
forth in the Company Proxy Statement and the Schedule 13E-3 under applicable
Law. The Company will provide Parent and Merger Sub a reasonable opportunity
to
review and comment upon the Company Proxy Statement and the Schedule 13E-3,
or
any amendments or supplements thereto, prior to mailing the Company Proxy
Statement to its shareholders and filing the Schedule 13E-3 with the SEC.
Section
7.2. Reasonable
Best Efforts.
(a)
Subject
to the terms and conditions of this Agreement, each party will use its
reasonable best efforts to take, or cause to be taken, all actions, to file,
or
cause to be filed, all documents and to do, or cause to be done, all things
necessary, proper or advisable to consummate the transactions contemplated
by
this Agreement, including preparing and filing as promptly as practicable all
documentation to effect all necessary filings, consents, waivers, approvals,
authorizations, Permits or orders from all Governmental Authorities (including
Gaming Authorities) or other Persons and, in the case of Parent, using
reasonable best efforts to enforce any remedies available to Parent in the
Interim Investors Agreement. In furtherance and not in limitation of the
foregoing, each party hereto
agrees to make an appropriate filing of a Notification and Report Form pursuant
to the HSR Act with respect to the transactions contemplated by this Agreement
as promptly as practicable after the date hereof (and in any event within 10
Business Days) and to make, or cause to be made, the filings and authorizations
required under the Other Antitrust Laws of jurisdictions other than the United
States as promptly as reasonably practicable after the date hereof and to supply
as promptly as reasonably practicable any additional information and documentary
material that may be requested pursuant to the HSR Act or the Other Antitrust
Laws of jurisdictions other than the United States and use its reasonable best
efforts to take or cause to be taken all other actions necessary, proper or
advisable consistent with this Section 7.2 to cause the expiration or
termination of the applicable waiting periods, or receipt of required
authorizations, as applicable, under the HSR Act or the Other Antitrust Laws
of
jurisdictions other than the United States as soon as practicable; provided
that
in no event shall any shareholder of Parent, or any Affiliate of any shareholder
of Parent, be required to take any action with respect to any portfolio company
or agree to undertake any divestiture or restrict its conduct with regard to
any
business other than the business of the Company and its Subsidiaries. Without
limiting the foregoing, the parties shall request and shall use reasonable
best
efforts to obtain early termination of the waiting period under the HSR
Act.
(b)
Each
of
Parent and Merger Sub, on the one hand, and the Company, on the other hand,
shall, in connection with the efforts referenced in Section 7.2(a) to obtain
all
requisite approvals and authorizations for the transactions contemplated by
this
Agreement, use its reasonable best efforts to (i) cooperate in all respects
with each other in connection with any
filing
or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party; (ii) keep the other party
reasonably informed of any communication received by such party from, or given
by such party to, the Federal Trade Commission (the “FTC”),
the
Antitrust Division of the Department of Justice (the “DOJ”)
or any
other Governmental Authority and of any communication received or given in
connection with any proceeding by a private party, in each case regarding any
of
the transactions contemplated hereby; and (iii) permit the other party to
review any communication given by it to, and consult with each other in advance
of any meeting or conference with, the FTC, the DOJ or any other Governmental
Authority or, in connection with any proceeding by a private party, with any
other person, and to the extent permitted by the FTC, the DOJ or such other
applicable Governmental Authority or other person, give the other party the
opportunity to attend and participate in such meetings and conferences.
(c)
In
furtherance and not in limitation of the covenants of the parties contained
in
Sections 7.2(a) and (b), if any objections are asserted with respect to the
transactions contemplated hereby under any Law or if any suit is instituted
(or
threatened to be instituted) by the FTC, the DOJ or any other applicable
Governmental Authority or any private party challenging any of the transactions
contemplated hereby as violative of any Law or which would otherwise prevent,
materially impede or materially delay the consummation of the transactions
contemplated hereby, each of Parent, Merger Sub and the Company shall use its
reasonable best efforts to resolve any such objections or suits so as to permit
consummation of the transactions contemplated by this Agreement, including
in
order to resolve such objections or suits which, in any case if not resolved,
would reasonably be expected to prevent, materially impede or materially delay
the consummation of the Merger or the other transactions contemplated hereby,
including selling, holding separate or otherwise disposing of or conducting
its
business in a manner which would resolve such objections or suits or agreeing
to
sell, hold separate or otherwise dispose of or conduct its business in a manner
which would resolve such objections or suits or permitting the sale, holding
separate or other disposition of, any of its assets or the assets of its
Subsidiaries or the conducting of its business in a manner which would resolve
such objections or suits so long as such actions, individually or in the
aggregate, do not have, and would not be reasonably likely to have, a Material
Adverse Effect on the Company; provided,
however,
that
the Company may expressly condition any such sale, holding separate or other
disposal, and any agreement to take any such action or to conduct its business
in any manner, upon the consummation of the Merger and the other transactions
contemplated hereby; and provided
further,
however,
that in
no event shall any shareholder of Parent, or any Affiliate of any shareholder
of
Parent be required to take any action with respect to any portfolio company
or
agree to undertake any divestiture or restrict its conduct with regard to any
business other than the business of the Company and its
Subsidiaries. Without
excluding other possibilities, the transactions contemplated by this Agreement
shall be deemed to be materially delayed if unresolved objections or suits
delay
or would reasonably be expected to delay the consummation of the transactions
contemplated hereby beyond the Termination Date.
(d)
Subject
to the obligations under Section 7.2(c), in the event that any administrative
or
judicial action or proceeding is instituted (or threatened to be instituted)
by
a Governmental Authority or private party challenging the Merger or any other
transaction contemplated by this Agreement, or any other agreement contemplated
hereby, each of Parent, Merger Sub and the Company shall cooperate in all
respects with each other and use its
respective
reasonable best efforts to contest and resist any such action or proceeding
and
to have vacated, lifted, reversed or overturned any decree, judgment, injunction
or other order, whether temporary, preliminary or permanent, that is in effect
and that prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement.
(e)
Notwithstanding
anything to the contrary in this Agreement, in connection with obtaining any
approval or consent from any person with respect to the Merger, (i) without
the
prior written consent of Parent (which shall not be unreasonably withheld or
delayed), none of the Company or any of its Subsidiaries shall pay or commit
to
pay to such person whose approval or consent is being solicited any cash or
other consideration, make any commitment or incur any liability or other
obligation due to such person and (ii) no party or its Affiliates shall be
required to pay or commit to pay to such person whose approval or consent is
being solicited any cash or other consideration, make any commitment or to
incur
any liability or other obligation (provided,
however,
that
such party shall give the other parties hereto the opportunity to make such
payments).
Section
7.3. Access
to Information.
(a)
Subject
to applicable Law, the Company will provide and will cause its Subsidiaries
and
its and their respective Representatives to provide Parent and Merger Sub and
their respective authorized Representatives, during normal business hours and
upon reasonable advance notice (i) such access to the offices, properties,
books
and records of the Company and such Subsidiaries (so long as such access does
not unreasonably interfere with the operations of the Company) as Parent or
Merger Sub reasonably may request and (ii) all documents that Parent or Merger
Sub reasonably may request. Notwithstanding the foregoing, Parent, Merger Sub
and their Representatives shall not have access to any books, records, documents
and other information (i) to the extent that books, records, documents or
other information is subject to the terms of a confidentiality agreement with
a
third party (provided that the Company shall use its reasonable best efforts
to
obtain waivers under such agreements or implement requisite procedures to enable
reasonable access without violating such agreement), (ii) to the extent
that the disclosure thereof would result in the loss of attorney-client
privilege, (iii) to the extent required by applicable Law (provided that
the Company shall use its reasonable best efforts to enable the provision of
reasonable access without violating such law) or (iv) to the extent
relating to pricing or other matters that are highly sensitive if the exchange
of such books, records, documents or other information (or portions thereof),
as
reasonably determined by the Company’s counsel, would be reasonably likely to
result in antitrust difficulties for the Company (or any of its Affiliates).
The
parties will make appropriate substitute arrangements under circumstances in
which the restrictions of the preceding sentence apply. All information
exchanged pursuant to this Section 7.3(a) shall be subject to the
Confidentiality Agreements and the confidentiality agreement dated February
5,
2006, among WLG, SK and HBK and the Company.
(b)
No
investigation by any of the parties or their respective Representatives shall
affect the representations or warranties of the other set forth
herein.
Section
7.4. Solicitation.
(a) Notwithstanding
any other provision of this Agreement to the contrary, during the period
beginning on the date of this Agreement and continuing until 11:59 p.m. (EST)
on
May 4,
2006 (the “No-Shop
Period Start Date”),
the
Company and its Subsidiaries and their respective officers, directors,
employees, consultants, agents, advisors, affiliates and other representatives
(“Representatives”)
shall
have the right (acting under the direction of the Special Committee) to: (i)
initiate, solicit and encourage, whether publicly or otherwise, Company
Acquisition Proposals (as hereinafter defined), including by way of providing
access to non-public information pursuant to (but only pursuant to) one or
more
Acceptable Confidentiality Agreements (as hereinafter defined); provided
that the
Company shall promptly provide to Parent and Merger Sub any material non-public
information concerning the Company or its Subsidiaries that is provided to
any
Person given such access which was not previously provided to Parent and Merger
Sub (subject to the right of the Company to withhold such portions of documents
or information to the extent relating to pricing or other matters that are
highly sensitive if the exchange of such information (or portions thereof),
as
reasonably determined by the Company’s counsel, would be reasonably likely to
result in antitrust difficulties for the Company (or any of its Affiliates));
and (ii) enter into and maintain discussions or negotiations with respect to
Company Acquisition Proposals or otherwise cooperate with or assist or
participate in, or facilitate any such inquiries, proposals, discussions or
negotiations or the making of any Company Acquisition Proposal.
(b)
Subject
to Section 7.4(c), from the No-Shop Period Start Date until the Effective Time
or, if earlier, the termination of this Agreement in accordance with Article
IX,
none of the Company, the Company’s Subsidiaries nor any of their respective
Representatives shall, directly or indirectly, (A) initiate, solicit or
encourage (including by way of providing information) the submission of any
inquiries, proposals or offers that constitute or may reasonably be expected
to
lead to, any Company Acquisition Proposal or engage in any discussions or
negotiations with respect thereto or otherwise cooperate with or assist or
participate in, or facilitate any such inquiries, proposals, discussions or
negotiations, or (B) approve or recommend, or propose to approve or recommend,
a
Company Acquisition Proposal or enter into any merger agreement, letter of
intent, agreement in principle, share purchase agreement, asset purchase
agreement or share exchange agreement, option agreement or other similar
agreement providing for or relating to a Company Acquisition Proposal or enter
into any agreement or agreement in principle requiring the Company to abandon,
terminate or fail to consummate the transactions contemplated hereby or breach
its obligations hereunder or propose or agree to do any of the foregoing.
Subject to Section 7.4(c) and except with respect to any Company Acquisition
Proposal received prior to the No-Shop Period Start Date with respect to which
the requirements of Section 7.4(c) can be satisfied from and after the No-Shop
Period Start Date (an “Excluded
Party”)
(provided,
that
any Excluded Party shall cease to be an Excluded Party for all purposes under
this Agreement at such time as the Company Acquisition Proposal made by such
party fails to satisfy the requirements of Section 7.4(c)), on the No-Shop
Period Start Date, the Company shall immediately cease and cause to be
terminated any solicitation, encouragement, discussion or negotiation with
any
Persons conducted theretofore by the
Company, its Subsidiaries or any Representatives with respect to any Company
Acquisition Proposal and shall use its (and will cause its Representatives
to
use their) reasonable best efforts to require the other parties thereto to
promptly return or destroy in accordance with the terms of such agreement any
confidential information previously furnished by the Company, the Company’s
Subsidiaries or their respective Representatives thereunder.
(c) Notwithstanding
anything to the contrary contained in Section 7.4(b), if at any time following
the No-Shop Period Start Date and prior to obtaining the Requisite Shareholder
Vote, (i) the Company has otherwise complied in all material respects with
its
obligations under this Section 7.4 and the Company has received a written
Company Acquisition Proposal from a third party that the Board of Directors
of
the Company (acting through the Special Committee, if such committee still
exists, or otherwise by resolution of a majority of its Disinterested Directors)
believes in good faith to be bona fide and (ii) the Board of Directors of the
Company (acting through the Special Committee, if such committee still exists,
or otherwise by resolution of a majority of its Disinterested Directors)
determines in good faith, after consultation with its independent financial
advisors and outside counsel, that such Company Acquisition Proposal constitutes
or could reasonably be expected to result in a Superior Proposal, then the
Company may (A) furnish information with respect to the Company and its
Subsidiaries to the Person making such Company Acquisition Proposal and (B)
participate in discussions or negotiations with the Person making such Company
Acquisition Proposal regarding such Company Acquisition Proposal; provided,
that
the Company (x) will not, and will not allow Company Representatives to,
disclose any non-public information to such Person without entering into an
Acceptable Confidentiality Agreement, and (y) will promptly provide to Parent
and Merger Sub any material non-public information concerning the Company or
its
Subsidiaries provided to such other Person which was not previously provided
to
Parent and Merger Sub (subject to the right of the Company to withhold such
portions of documents or information to the extent relating to pricing or other
matters that are highly sensitive if the exchange of such information (or
portions thereof), as reasonably determined by the Company’s counsel, would be
reasonably likely to result in antitrust difficulties for the Company (or any
of
its Affiliates)). Notwithstanding anything to the contrary contained in Section
7.4(b), the Company shall be permitted prior to obtaining the Requisite
Shareholder Vote to take the actions described in clauses (A) and (B) above
with
respect to any Excluded Party. From and after the No-Shop Period Start Date,
the
Company shall promptly (within one Business Day) notify Parent and Merger Sub
in
the event it receives a Company Acquisition Proposal from a Person or group
of
related Persons other than an Excluded Party, including the material terms
and
conditions thereof and the identity of the party making such proposal or
inquiry, and shall keep Parent and Merger Sub reasonably apprised as to the
status and any material developments, discussions and negotiations concerning
the same. Without limiting the foregoing, from and after the No-Shop Period
Start Date, the Company shall promptly (within one Business Day) notify Parent
and Merger Sub orally and in writing if it determines to begin providing
information or to engage in negotiations concerning a Company Acquisition
Proposal received on or after the No-Shop Period Start Date from a Person or
group of related Persons other than an Excluded Party pursuant to this Section
7.4(c).
(d)
Neither
the Board of Directors of the Company nor any committee thereof shall directly
or indirectly (i) withdraw or modify in a manner adverse to Parent or Merger
Sub, or publicly propose to withdraw or modify in a manner adverse to Parent
or
Merger Sub, the Recommendation
or (ii) take any other action or make any other public statement in connection
with the Company Shareholder Meeting inconsistent with such Recommendation;
provided,
that at
any time prior to obtaining the Requisite Shareholder Vote, if the Company
receives a Company Acquisition Proposal which the Board of Directors of the
Company (acting through the Special Committee, if such committee still exists,
or otherwise by resolution of a majority of its Disinterested Directors)
concludes in good faith constitutes a Superior Proposal, then the
Board
of
Directors of the Company (acting through the Special Committee, if such
committee still exists, or otherwise by resolution of a majority of its
Disinterested Directors) may withdraw or modify its Recommendation in a manner
adverse to Parent and Merger Sub (“Recommendation
Withdrawal”)
if
such Board of Directors determines in good faith (after consultation with
outside counsel) that failure to take such action would violate its fiduciary
duties under applicable Law.
(e)
Nothing
contained in this Section 7.4 or elsewhere in this Agreement shall prohibit
the Company from (i) taking and disclosing to its shareholders a position
contemplated by Rule 14d-9 and 14e-2(a) promulgated under the Exchange Act
or (ii) making any disclosure to the Company’s shareholders if, in the good
faith judgment of the Board of Directors (acting through the Special Committee,
if such committee still exists, or otherwise by resolution of a majority of
its
Disinterested Directors), after receipt of advice from its outside legal
counsel, failure so to disclose would be inconsistent with disclosure
requirements under applicable Law; provided,
any
such disclosure made pursuant to clause (i) or (ii) (other than a “stop, look
and listen” letter or similar communication of the type contemplated by Rule
14d-9(f) under the Exchange Act) shall be deemed to be a Recommendation
Withdrawal unless the Board of Directors of the Company (acting through the
Special Committee if such committee still exists) expressly reaffirms in such
disclosure its recommendation in favor of the approval of this
Agreement.
(f)
The
Company agrees that any violations of the restrictions set forth in this Section
7.4 by any Representative of the Company or any of its Subsidiaries, shall
be
deemed to be a breach of this Section 7.4 by the Company.
(g)
As
used
in this Agreement, the term:
(i)
“Acceptable
Confidentiality Agreement”
means
a
confidentiality and standstill agreement that contains provisions that are
no
less favorable in the aggregate to the Company than those contained in the
confidentiality agreements (A) dated February 7, 2006 between Colony Capital
Acquisitions, LLC and the Company, (B) dated February 23, 2006, between The
Related Company, L.P. and the Company, (C) dated February 7, 2006, between
Providence Equity Partners Inc. and the Company and (D) dated February 7, 2006,
between Whitehall Street Global Real Estate Limited Partnership 2005 and the
Company (the “Confidentiality
Agreements”),
provided,
however,
that an
Acceptable Confidentiality Agreement may include provisions that are less
favorable in the aggregate to the Company than those contained in the
Confidentiality Agreements, so long as the Company offers to amend the
Confidentiality Agreements concurrently with execution of such Acceptable
Confidentiality Agreement to include substantially similar provisions for the
benefit of the parties thereto;
(ii)
“Company
Acquisition Proposal”
means
any inquiry, proposal or offer from any Person or group of Persons other than
Parent, Merger Sub or their respective Affiliates relating to any direct or
indirect acquisition or purchase (whether in a single transaction or a series
of
transactions) of a business or businesses that constitutes 30% or more of the
net revenues, net income or assets of the Company and its Subsidiaries, taken
as
a whole, or 30% or more of any class or series of Company Securities or
Subsidiary
Securities,
any tender offer or exchange offer that if consummated would result in any
Person or group of Persons beneficially owning 30% or more of any class or
series of Company Securities or Subsidiary Securities, or any merger,
reorganization, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the
Company (or any Subsidiary or Subsidiaries of the Company whose business or
businesses constitute(s) 30% or more of the net revenues, net income or assets
of the Company and its Subsidiaries, taken as a whole);
(iii)
“Superior
Proposal”
means
a
Company Acquisition Proposal, which was not obtained in violation of this
Section 7.4, and which the Board of Directors of the Company (acting through
the
Special Committee, if such committee still exists, or otherwise by resolution
of
a majority of its Disinterested Directors) in good faith determines, would,
if
consummated, result in a transaction that is more favorable from a financial
point of view to the shareholders of the Company (in their capacities as
shareholders) than the transactions contemplated hereby (x) after receiving
the
advice of its financial advisor (who shall be a nationally recognized investment
banking firm), (y) after taking into account the likelihood of consummation
of
such transaction on the terms set forth therein (as compared to the terms
herein) and (z) after taking into account all appropriate legal (with the advice
of outside counsel), financial (including the financing terms of any such
proposal), regulatory or other aspects of such proposal; provided
that for
purposes of the definition of “Superior
Proposal”,
the
references to “30% or more” in the definition of Company Acquisition Proposal
shall be deemed to be references to “a majority” and the definition of Company
Acquisition Proposal shall only refer to a transaction or series of transactions
(i) directly involving the Company (and not exclusively its Subsidiaries) or
(ii) involving a sale or transfer of all or substantially all of the assets
of
the Company and its Subsidiaries, taken as a whole.
Section
7.5. Director
and Officer Liability.
(a)
From
and
after the Effective Time, the Surviving Corporation shall comply with all of
the
Company’s and its respective Subsidiaries’ obligations to indemnify and hold
harmless (including any obligations to advance funds for expenses) (i) the
present and former officers and directors thereof against any and all costs
or
expenses (including reasonable attorneys’ fees and expenses), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any actual or threatened claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative
(“Damages”),
arising out of, relating to or in connection with any acts or omissions
occurring or alleged to occur prior to or at the Effective Time to the extent
provided under the Company’s or such Subsidiaries’ respective organizational and
governing documents or agreements in effect on the date hereof, including the
approval of this Agreement, the Merger or the other transactions contemplated
by
this
Agreement or arising out of or pertaining to the transactions contemplated
by
this Agreement; and (ii) such persons against any and all Damages arising out
of
acts or omissions in connection with such persons serving as an officer,
director or other fiduciary in any entity if such service was at the request
or
for the benefit of the Company or any of its Subsidiaries. For a period of
six
years after the Effective Time, the Surviving Corporation shall cause to be
maintained in effect the current policies of officers’ and directors’ liability
insurance maintained
on
the
date hereof by the Company and its respective Subsidiaries (the “Current
Policies”);
provided,
however,
that
the Surviving Corporation may, and in the event of the cancellation or
termination of such policies shall, substitute therefor policies with reputable
and financially sound carriers providing at least the same coverage and amount
and containing terms and conditions that are no less favorable to the covered
persons (the “Replacement
Policies”)
in
respect of claims arising from facts or events that existed or occurred prior
to
or at the Effective Time under the Current Policies; provided,
further,
however,
that in
no event will the Surviving Corporation be required to expend annually in excess
of 300% of the annual premium currently paid by the Company under the Current
Policies (the “Insurance
Amount”)
(in
which event, the Surviving Corporation shall obtain as much comparable insurance
as available for the Insurance Amount); provided,
further,
however,
that in
lieu of the foregoing insurance coverage, Parent may direct the Company to
purchase “tail” insurance coverage that provides coverage no less favorable than
the coverage described above, provided
that the
Company shall not be required to pay any amounts in respect of such coverage
prior to the Closing.
(b)
This
Section 7.5 shall survive the consummation of the Merger and is intended to
be
for the benefit of, and shall be enforceable by, present or former directors
or
officers of the Company or its Subsidiaries, their respective heirs and personal
representatives and shall be binding on the Surviving Corporation and its
successors and assigns. In the event that the Surviving Corporation or any
of
its successors or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially
all its properties and assets to any person (including by dissolution), then,
and in each such case, Parent shall cause proper provision to be made so that
the successors and assigns of the Surviving Corporation assume and honor the
obligations set forth in this Section 7.5.
(c)
The
agreements and covenants contained herein shall not be deemed to be exclusive
of
any other rights to which any such present or former director or officer is
entitled, whether pursuant to Law, contract or otherwise. Nothing in this
Agreement is intended to, shall be construed to or shall release, waive or
impair any rights to directors’ and officers’ insurance claims under any policy
that is or has been in existence with respect to the Company or any of its
Subsidiaries or their respective officers, directors and employees, it being
understood and agreed that the indemnification provided for in this Section
7.5
is not prior to or in substitution for any such claims under any such policies.
Section
7.6. Takeover
Statutes.
The
parties shall use their respective reasonable best efforts (i) to take all
action necessary so that no Takeover Statute is or becomes applicable to the
Merger or any of the other transactions contemplated by this Agreement and
(ii)
if any such Takeover Statute is or becomes applicable to any of the foregoing,
to take all action necessary so that the Merger and the other transactions
contemplated by this Agreement may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such Takeover Statute on the Merger and
the
other transactions contemplated by this Agreement.
Section
7.7. Public
Announcements.
Except
with respect to any Recommendation Withdrawal or any action taken by the
Company
or its Board of Directors pursuant to, and in accordance with, Section 7.4,
so
long as this Agreement is in effect, the
parties
will consult with each other before issuing any press release or making any
public statement with respect to this Agreement or the transactions contemplated
hereby and, except for any press release or public statement as may be required
by applicable Law, court process or any listing agreement with the New York
Stock Exchange, will not issue any such press release or make any such public
statement without the consent of the other parties (not to be unreasonably
withheld or delayed).
Section
7.8. Employee
Matters.
(a)
Without
limiting any additional rights that any Company Employee employed by the Company
or any of its Subsidiaries at the Effective Time (“Current
Employee”)
may
have under any Company Benefit Plan, Employment Agreement or collective
bargaining agreement, Parent shall cause the Surviving Corporation and each
of
its Subsidiaries, for the period commencing at the Effective Time and ending
on
the first anniversary thereof, to maintain for each Current Employee (i) base
salary or hourly wage rate, target cash bonus opportunities under annual
programs and commissions, but excluding equity and equity equivalents
(collectively, “Compensation”),
that
in the aggregate is no less favorable than, and (ii) welfare benefits that
in
the aggregate are no less favorable than, in the case of the foregoing clauses
(i) and (ii), the Compensation and benefits maintained for and provided to
such
Current Employee immediately prior to the Effective Time; provided,
however,
that,
subject to the obligations set forth in this Section 7.8, nothing herein shall
(A) prevent the amendment or termination of any Company Benefit Plans in
accordance with their respective terms, or (B) interfere with the Surviving
Corporation’s right or obligation to make such changes as are necessary to
conform with applicable Law. Nothing in this Section 7.8 shall limit the right
of Parent, the Surviving Corporation or any of their Subsidiaries to terminate
the employment of any Current Employee at any time in a manner consistent with
any applicable contractual obligations and any applicable employee benefit
plans.
(b)
As
of and
after the Effective Time, Parent will, or will cause the Surviving Corporation
to, give each Current Employee full credit for purposes of eligibility to
participate and vesting (but not for benefit accrual purposes, except for
purposes of vacation and severance) under any Employee Benefit Plans and any
other employee compensation and incentive plans, benefit (including vacation)
plans, programs, policies and arrangements, in each case maintained for the
benefit of Current Employees as of and after the Effective Time by Parent,
its
Subsidiaries or the Surviving Corporation (each, a “Parent Plan”) for such
Current Employee’s service prior to the Effective Time with the Company and its
Subsidiaries and their predecessor entities, to the same extent such service
is
recognized by the Company or its Subsidiaries immediately prior to the Effective
Time. With respect to each Parent Plan that is a “welfare benefit plan” (as
defined in Section 3(1) of ERISA),
Parent or its Subsidiaries shall (i) cause there to be waived any
pre-existing condition or eligibility limitations or exclusions and
actively-at-work requirements with respect to the Current Employees and their
eligible dependents and (ii) give effect, for the year in which the Closing
occurs, for purposes of satisfying any deductible and maximum out-of-pocket
limitations, to claims incurred and amounts paid by, and amounts reimbursed
to,
Current Employees and their eligible dependents under similar plans maintained
by the Company and its Subsidiaries in which such Current Employees and their
eligible dependents participated immediately prior to the Effective
Time.
(c)
From
and
after the Effective Time, Parent will cause the Surviving Corporation and all
of
their Subsidiaries to assume and honor, in accordance with their respective
terms, (i) each existing employment, change in control, severance and
termination plan, policy or agreement of or between the Company or any of its
Subsidiaries, on the one hand, and any officer, director or employee of that
company, on the other hand, (ii) each equity-based plan, program or agreement
and each bonus plan, program or agreement and (iii) all obligations pursuant
to
existing benefit restoration plans, equity-based plans, programs or agreements,
bonus plans, programs or agreements, bonus deferral plans, vested and accrued
benefits under any employee benefit plan, program or arrangement of the Company
or its Subsidiaries and similar employment compensation and benefit arrangements
and agreements in effect as of the Effective Time, in the case of each of the
foregoing clauses (i), (ii) and (iii), to the extent legally binding on the
Company or any of its Subsidiaries.
(d)
The
provisions of this Section 7.8 are for the sole benefit of the parties to this
Agreement and nothing herein, expressed or implied, is intended or shall be
construed to confer upon or give to any person (including for the avoidance
of
doubt any Company Employees), other than the parties hereto and their respective
permitted successors and assigns, any legal or equitable or other rights or
remedies (with respect to the matters provided for in this Section 7.8) under
or
by reason of any provision of this Agreement.
Section
7.9. Financing. (a)
Prior
to
the Effective Time, the Company shall provide, and shall cause its Subsidiaries
to, and shall use its reasonable best efforts to cause their respective
Representatives, including legal and accounting, to, provide all cooperation
reasonably requested by Parent in connection with the Financing and the other
transactions contemplated by this Agreement, including (i) participation in
a reasonable number of meetings, presentations, road shows, due diligence
sessions and sessions with rating agencies, (ii) assisting with the
preparation of materials for rating agency presentations, offering documents,
private placement memoranda, bank information memoranda, prospectuses and
similar documents required in connection with the Financing,
(iii) executing and delivering any pledge and security documents, other
definitive financing documents, or other certificates, legal opinions or
documents as may be reasonably requested by Parent (including a certificate
of
the chief financial officer of the Company or any Subsidiary with respect to
solvency matters and consents of accountants for use of their reports in any
materials relating to the Debt Financing) and otherwise reasonably
facilitating the pledging of collateral, in each case effective on or after
the
Effective Time, (iv) furnishing Parent and its Financing sources with
financial and other pertinent information regarding the Company as may be
reasonably requested by Parent, including all financial statements and financial
data of the type required by Regulation S-X and Regulation S-K under the
Securities Act and of type and form customarily included in private placements under Rule 144A of the Securities Act in
respect of foreign
private issuers (as such term is defined under the Exchange Act), to consummate
the offering of debt securities contemplated by the Debt Financing Commitments,
(v) using reasonable best efforts to obtain accountants’ comfort letters,
legal opinions, surveys and title insurance as reasonably requested by Parent,
(vi) using its commercially reasonable efforts to provide monthly financial
statements (excluding footnotes) within 25 days of the end of each month prior
to the Closing Date, (vii) taking all actions reasonably necessary to (A) permit
the prospective lenders involved in the Financing to evaluate the Company’s
current assets, cash management and accounting systems, policies and procedures
relating thereto for the purpose of establishing collateral arrangements
and
(B)
effective on or after the Effective Time, establish bank and other accounts
and
blocked account agreements and lock box arrangements in connection with the
foregoing, and (viii) taking all corporate actions reasonably necessary to
permit the consummation of the Debt Financing and to permit the proceeds thereof
to be made available to the Company (it being understood that (A) to the
greatest extent practicable, the actions contemplated by this Section
7.9(a)(viii) shall not be required to be taken until immediately prior to the
Closing and that prior to the taking of such actions, any current member of
the
Board of Directors may resign and (B) if such member of the Board of Directors
resigns, the failure of any such director to take any such action shall not
constitute a failure to satisfy a condition to Closing). Parent shall, promptly
upon request by the Company, reimburse, or cause its Affiliates to reimburse,
the Company for all reasonable and documented out-of-pocket costs incurred
by
the Company or its Subsidiaries in connection with such cooperation.
The
Company hereby consents to the use of its and its Subsidiaries’ logos in
connection with the Debt Financing, provided that such logos are used solely
in
a manner that is not intended to nor reasonably likely to harm or disparage
the
Company or the reputation or goodwill of the Company and its marks.
(b)
Parent
shall use its reasonable best efforts to arrange the Debt Financing on the
terms
and conditions described in the Debt Financing Commitments as promptly as
practicable on the terms and conditions described in the Debt Financing
Commitments, including using reasonable best efforts to (i) negotiate
definitive agreements with respect thereto on the terms and conditions contained
therein or on other terms no less favorable to Parent and Merger Sub and
(ii) to satisfy on a timely basis all conditions applicable to Parent in
such definitive agreements that are within its control. In the event that all
conditions applicable to the Financing Commitments (other than in connection
with the Debt Financing, the availability or funding of any of the Equity
Financing) have been satisfied in Parent’s good faith judgment, Parent shall use
its reasonable best efforts to cause the lenders and the other Persons providing
such Financing to fund the Financing required to consummate the Merger on the
Closing Date (including by taking enforcement action to cause such lenders
and
other Persons providing such Financing to fund such Financing). In the event
any
portion of the Debt Financing becomes unavailable on the terms and conditions
contemplated in the Debt Financing Commitments, Parent shall use its reasonable
best efforts to arrange to obtain alternative financing from alternative sources
on terms no less favorable, taken as a whole, to Parent and Merger Sub (as
determined in the reasonable judgment of Parent) as promptly as practicable
following the occurrence of such event. Parent and Merger Sub shall keep the
Company reasonably apprised of material developments relating to the
Financing.
(c)
Parent
shall
not agree to any amendments or modifications to, or grant any waivers of, any
condition or other material provision under the Financing Commitments
without
the
consent of the Company if such amendments, modifications or waivers would impose
new or additional conditions or otherwise amend,
modify or waive any of the conditions to the receipt
of the
Financing
in a
manner that would be reasonably
likely to cause any material delay in the satisfaction of the conditions set
forth in Article VIII. Notwithstanding
anything in this Agreement to the contrary, one or more Debt Financing
Commitments may be superseded at the option of Parent and Merger Sub after
the
date hereof but prior to the Effective Time by new debt financing commitments
(the “New
Financing Commitments”)
which
replace existing Debt Financing Commitments; provided,
that
the terms of the New Financing Commitments shall not (A) impose new or
additional conditions to the receipt of the Financing as set forth in the Debt
Financing
Commitments in any material respect or (B) be
reasonably likely to cause any material delay in the satisfaction of the
conditions set forth in Article VIII.
In such
event, the term “Financing
Commitments”
as
used
herein shall be deemed to include the Financing Commitments that are not so
superseded at the time in question and the New Financing Commitments to the
extent then in effect.
(d)
In
no
event shall Parent or any of its Affiliates (which for purposes of this Section
7.9(d) shall be deemed to include each direct or indirect investor or potential
investor in Parent, or any of WLG’s, Parent’s or any such investor’s financing
sources or potential financing sources or other Representatives) (i) award
any
agent, broker, investment banker, financial advisor or other firm or Person
except Deutsche Bank AG and Groton Partners LLC any financial advisory role
on
an exclusive basis (or until the No-Shop Period Start Date, any additional
firm
or Person on a non-exclusive basis), or (ii) engage any bank or investment
bank
or other provider of financing other than Deutsche Bank AG and its Affiliates
and Xxxxxxx Xxxxx Credit Partners and its Affiliates on an exclusive basis
(or
otherwise on terms that could reasonably be expected to prevent such provider
from providing or seeking to provide financing to any third party in connection
with a transaction relating to the Company or its Subsidiaries), in the case
of
clauses (i) and (ii) in connection with the Merger or the other transactions
contemplated hereby, provided,
however,
that
following the No-Shop Period Start Date, Parent may engage one additional
provider of debt financing and one additional financial advisor, in each case,
on an exclusive basis. Until the No-Shop Period Start Date, neither Parent
nor
any of its Affiliates shall seek or obtain any equity commitments or equity
financing in respect of the Merger or any of the other transactions contemplated
hereby, or provide any information in respect thereof to any
potential
investor in Parent, or any of Parent’s or any such investor’s financing sources
or potential financing sources or other Representatives who have not been
provided any such information prior to the date hereof, other than as set forth
in the Equity Financing Commitments, as in effect on the date hereof.
Notwithstanding the foregoing, Parent and its Affiliates can take any of the
actions otherwise prohibited by the preceding sentence with respect to up to
an
aggregate of $50 million of equity investments or equity financing to entities
or persons who (i) are not principally involved in the private equity business
or (ii) other than SK, HBK, Istithmar and their respective Affiliates, are
not
required to file a Schedule 13G or Schedule 13D under the Exchange Act as of
the
date of this Agreement but without giving effect to the transactions
contemplated hereby. No action shall be taken pursuant to the immediately
preceding sentence that would violate Section 7.12 of this Agreement. Parent
shall cause its Affiliates to comply with the foregoing covenant.
Section
7.10. Debt
Tender Offers.
As soon
as reasonably practicable after the No-Shop Period Start Date, the Company
shall, and with respect to the 6 ¾% Notes shall cause Xxxxxxx International
North America, Inc.
(“KINA”)
to,
commence offers to purchase and related consent solicitations with respect
to
all of the outstanding aggregate principal amount of the Company’s and KINA’s 6
¾% Senior Subordinated Notes due 2015 (the “6
¾%
Notes”
and,
together with the Convertible Notes, the “Notes”)
and
the Convertible Notes on such terms and conditions as are reasonably acceptable
to Parent and the Company (including the related consent solicitations,
collectively, the “Debt
Tender Offers”)
and
Parent shall assist the Company in connection therewith. Promptly following
the
expiration date of the consent solicitations, assuming the requisite consents
are received, the Company shall execute supplemental indentures to (i) the
Indenture, dated as of September 22, 2005, among the Company, the
guarantors
named therein and The Bank of New York Trust Company, N.A., as trustee (the
“6
¾%
Notes Indenture”)
and
(ii) the Indenture, dated as of April 5, 2004, between the Company and The
Bank
of New York Trust Company, N.A., as trustee (the “Convertible
Notes Indenture”
and,
together with the 6 ¾ Notes Indenture, the “Indentures”),
reflecting the amendments to such indentures consented to in the Debt Tender
Offers, which supplemental indentures shall become operative concurrently with
the Effective Time, and shall use its reasonable best efforts to cause the
trustees under the Indentures to promptly enter into such supplemental
indentures, as applicable. The Company shall provide, and shall cause its
Subsidiaries to, and shall use its reasonable best efforts to cause their
respective Representatives to, provide all cooperation requested by Parent
in
connection with the Debt Tender Offers. The closing of the Debt Tender Offers
shall be conditioned on the occurrence of the Closing, and the parties shall
use
their reasonable best efforts to cause the Debt Tender Offers to close on the
Closing Date. Concurrent with the Effective Time, and in accordance with the
terms of the Debt Tender Offers, Parent shall cause the Surviving Corporation
to
accept for purchase and purchase the Notes properly tendered and not properly
withdrawn in the Debt Tender Offers and provide to the Surviving Corporation
cash in an amount sufficient to fund such purchase, including any applicable
premiums, and all related fees and expenses. Parent shall reimburse, or cause
its Affiliates to reimburse, the Company for its reasonable out-of-pocket fees
and expenses (including any consent fees paid but only to the extent consented
to by Parent) incurred pursuant to this Section 7.10. The Debt Tender Offers
and
other actions taken in connection therewith shall be conducted in accordance
with the terms of the applicable Indentures and all applicable rules and
resolutions of the SEC and other applicable Laws. Notwithstanding anything
to
the contrary contained in this Agreement, prior to the Effective Time, neither
the Company nor any of its Subsidiaries shall be required to (i) make any cash
expenditures or (ii) take any action that could obligate the Company or any
of
its Subsidiaries to repurchase any Notes or incur any additional obligations
to
the holders of the Notes prior to the consummation of the Debt Tender
Offers.
Section
7.11. Confidentiality
Agreements.
Parent
acknowledges on behalf of its Affiliates and each investor in Parent party
to
any Confidentiality Agreement or the confidentiality agreement dated February
5,
2006, among SK, HBK, WLG and the Company that such Affiliates and investors
continue to be bound by such Confidentiality Agreements (including any
“standstill” provisions therein), and the parties hereto acknowledge and agree
that this Agreement does not in any manner modify or limit the Company’s or such
Affiliate’s rights under such agreements. For purposes of Sections 7.11 and 7.12
of this Agreement, Parent acknowledges that it is an affiliate of WLG for
purposes of the Registration Rights and Governance Agreement dated July 3,
2001
among, inter alia, the Company and WLG.
Section
7.12. Management.
In no
event shall Parent or any of its Affiliates (which for purposes of this Section
shall be deemed to include each direct investor in Parent) enter into any
arrangements with any member of the Company’s management or any other Company
Employee (other than SK or HBK) on terms that prohibit or restrict such member
of management or such Company Employee from discussing, negotiating or entering
into any arrangements with any third party in connection with a transaction
relating to the Company or its Subsidiaries or seek to do so.
Parent
shall cause its Affiliates to comply with the foregoing covenant.
Section
7.13. Vesting
of Company Equity Awards.
As
promptly as practicable (and in any event within 15 days from the date of this
Agreement), the Company shall take such actions as may be reasonably required
to
irrevocably amend the terms of the Company Equity Awards to provide that to
the
extent that a “change of control” (as defined in the applicable Company Stock
Plan or in any applicable agreement, notice or letter evidencing the grant
of a
Company Equity Award) shall occur with respect to any Company Equity Awards
as a
result of the consummation of a Superior Proposal that results in the
termination of this Agreement, any such Company Equity Awards that are unvested
as of the effective time of such Superior Proposal (the “Superior
Proposal Effective Time”)
shall
become fully vested (and, in the case of Company Options and Company SARs,
immediately exercisable in full) and all restrictions on such Company Equity
Awards shall lapse, in each case not later than the earlier to occur of (a)
the
expiration of the six-month period immediately following such Superior Proposal
Effective Time and (b) a holder's Qualifying Termination (as defined in the
applicable Company Stock Plan), provided that (1) such Company Equity Awards
are
still outstanding at (and have not terminated prior to) the relevant time,
and
were not terminated at the Superior Proposal Effective Time in consideration
for
the payment of any amount required pursuant to the provisions of the applicable
Company Stock Plan (including Section 14(a)(ii) of the Company 2003 Stock
Incentive Plan or the Company 2005 Stock Incentive Plan, as applicable) or
any
applicable agreement, notice or letter evidencing the grant of such Company
Equity Award, (2) such Company Equity Awards have not yet become fully vested
or
exercisable prior to the relevant time and (3) such amendments shall expressly
be conditioned upon the consummation of a Superior Proposal that results in
the
termination of this Agreement and shall be of no effect if such Superior
Proposal is not consummated.
CONDITIONS
TO THE MERGER
Section
8.1. Conditions
to the Obligations of Each Party.
The
obligations of the Company, Parent and Merger Sub to consummate the Merger
are
subject to the satisfaction of the following conditions:
(a)
Shareholder
Approval.
This
Agreement shall have been approved by the Requisite Shareholder
Vote.
(b)
Regulatory
Approval.
(i) Any
applicable waiting period under the HSR Act (and any extension thereof) relating
to the Merger shall have expired or been terminated, (ii) approval of the
Financing by The Central Bank of The Bahamas shall have been obtained and (iii)
all other required approvals of any Governmental Authority (including any Gaming
Authority)
set forth on Annex A hereto shall have been obtained or any applicable waiting
period thereunder shall have been terminated or shall have expired, in each
case, without any requirement to take any action, or agree to take any action,
or agree to any conditions or restrictions in connection with obtaining the
foregoing that would be reasonably likely to have a Material Adverse Effect
on
the Company, and except, in the case of clause (iii), if failure to obtain
such
approval or failure of such waiting period to terminate or expire would not
be
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect on the Company.
(c)
No
Injunctions or Restraints; Illegality.
No
temporary restraining order, preliminary or permanent injunction or other
judgment or order issued by any court or agency of competent jurisdiction or
other Law (each, a “Restraint”)
shall
be in effect which prohibits, restrains or renders illegal the consummation
of
the Merger or which otherwise would be reasonably likely to have a Material
Adverse Effect on the Company (provided,
that
prior to asserting this condition, the party asserting this condition shall
have
used its reasonable best efforts (in the manner contemplated by
Section 7.2) to prevent the entry of any such Restraint and to appeal as
promptly as possible any judgment that may be entered).
Section
8.2. Conditions
to the Obligations of Parent and Merger Sub.
The
obligations of Parent and Merger Sub to consummate the Merger are subject to
the
satisfaction or valid waiver of the following further conditions:
(a)
Representations
and Warranties.
Subject
to the preamble to Article IV, the representations and warranties (i) set forth
in Section 4.5 shall be true and correct in all material respects as of the
date
of this Agreement and as of the Effective Time as if made at and as of such
time
and (ii) set forth in Article IV, other than those described in clause (i)
above, shall be true and correct (without giving effect to any qualification
as
to “materiality” or “Material Adverse Effect” set forth therein) as of the date
of this Agreement and as of the date of the Effective Time as if made at and
as
of such time, except in the case of this clause (ii) where the failure to be
so
true and correct, individually and in the aggregate, has not had, and would
not
be reasonably likely to have, a Material Adverse Effect on the Company,
provided
in each
case that representations made as of a specific date shall be required to be
so
true and correct subject to such qualifications) as of such date only. Parent
and Merger Sub shall have received a certificate signed by a senior officer
of
the Company attesting to the foregoing.
(b)
Performance
of Obligations of the Company.
The
Company shall have performed in all material respects all obligations, and
complied in all material respects with the agreements and covenants, required
to
be performed by or complied with by it hereunder. Parent and Merger Sub shall
have received a certificate signed by a senior officer of the Company attesting
to the foregoing.
(c)
Financing.
The
Debt Financing shall be available for borrowing on the Closing Date on the
terms
and conditions set forth in the Debt Financing Commitments, or upon terms and
conditions that are no less favorable, in the aggregate, to Parent and Merger
Sub (as determined in the reasonable judgment of Parent).
Section
8.3. Conditions
of the Obligations of the Company.
The
obligation of the Company to consummate the Merger is subject to the
satisfaction or valid waiver of the following further conditions:
(a)
Representations
and Warranties.
The
representations and warranties of Parent and Merger Sub contained in this
Agreement that are qualified as to materiality shall be true and correct as
of
date of this Agreement and as of the Effective Time as if made at and as of
such
time and those which are not so qualified shall be true and correct in all
material respects as of date of this Agreement and as of the Effective Time
as
if made at and as of such time,
provided
that
representations made as of a specific date shall be required to be true as
of
such date only. The Company shall have received a certificate signed by a senior
officer of Parent and Merger Sub attesting to the foregoing.
(b)
Performance
of Obligations of Parent and Merger Sub.
Each of
Parent and Merger Sub shall have performed in all material respects all
obligations, and complied in all material respects with the agreements and
covenants, required to be performed by or complied with by it hereunder. The
Company shall have received a certificate signed by a senior officer of Parent
and Merger Sub attesting to the foregoing.
TERMINATION
Section
9.1. Termination.
This
Agreement may be terminated and the Merger may be abandoned at any time prior
to
the Effective Time (notwithstanding any prior approval of this Agreement by
the
shareholders of the Company):
(a)
by
mutual
written consent of the Company, on the one hand, and Parent and Merger Sub,
on
the other hand;
(b)
by
either
the Company or Parent, if:
(i)
the
Effective Time shall not have occurred on or before December 31, 2006 (the
“End
Date”)
unless
the failure of the Effective Time to occur by such date is principally the
result of, or caused by, the failure of the party seeking to exercise such
termination right to perform or observe any of the covenants or agreements
of
such party set forth in this Agreement;
(ii)
if
any
Restraint having the effect set forth in Section 8.1(c) shall be in effect
and
shall have become final and nonappealable; provided,
however,
that
the right to terminate this Agreement pursuant to this Section 9.1(b)(ii) shall
not be available to any party whose breach of any provision of this Agreement
is
the principal cause of or resulted in the application or imposition of such
Restraint; or
(iii)
at
the
Company Shareholder Meeting or any adjournment thereof at which this Agreement
has been voted upon, the Company shareholders fail to approve this Agreement
by
the Requisite Shareholder Vote;
(c)
by
the
Company, if:
(i)
a
breach
of any representation, warranty, covenant or agreement on the part of Parent
or
Merger Sub set forth in this Agreement shall have occurred which would cause
any
of the conditions set forth in Sections 8.3(a) or (b) not to be satisfied,
and
such breach is incapable of being cured by the End Date; provided,
however,
that
the Company is not then in material breach of this Agreement;
(ii)
at
any
time after the date of this Agreement and prior to obtaining the Requisite
Shareholder Vote, the Company receives a Company Acquisition Proposal and
the
Board
of Directors (acting through the Special Committee if such committee still
exists, or otherwise by resolution of a majority of its Disinterested Directors)
shall have concluded in good faith that such Company Acquisition Proposal
constitutes a Superior Proposal; provided,
however,
that
the Company shall not terminate this Agreement pursuant to the foregoing clause
unless: (A) the Company shall have complied in all material respects with
Section 7.4 of this Agreement; (B) the Company concurrently pays the Termination
Fee payable pursuant to Section 9.2(a); and (C) the Board of Directors of the
Company concurrently approves, and the Company concurrently enters into, a
definitive agreement with respect to such Superior Proposal; or
(iii)
at
any
time prior to the No-Shop Period Start Date, the Cooperation Agreement is
breached in a manner that materially impairs the Company’s ability to take the
actions described in Section 7.4(a) of this Agreement, and the breaching party
has been given reasonable notice of such breach and a reasonable opportunity
to
cure such breach prior to the No-Shop Period Start Date;
(d)
by
Parent
or Merger Sub, if:
(i)
a
breach
of any representation, warranty, covenant or agreement on the part of the
Company set forth in this Agreement shall have occurred which would cause any
of
the conditions set forth in Section 8.2(a) or (b) not to be satisfied, and
such
breach is incapable of being cured by the End Date; provided,
however,
that
neither Parent nor Merger Sub is then in material breach of this Agreement;
(ii)
the
Board
of Directors of the Company or any committee thereof (A) shall have effected
a
Recommendation Withdrawal, or publicly proposed to effect a Recommendation
Withdrawal, or (B) shall have approved or recommended to the shareholders of
the
Company a Company Acquisition Proposal other than the Merger, or shall have
resolved to effect the foregoing; or
(iii)
the
Company shall have willfully and materially breached the terms of Section 7.4
of
this Agreement in any respect adverse to Parent and Merger Sub.
Section
9.2. Termination
Fee.
(a)
In
the
event that this Agreement is terminated by the Company pursuant to Section
9.1(c)(ii) or by Parent pursuant to Section 9.1(d)(ii)(B) or Section
9.1(d)(iii), then the Company shall pay to Parent the Termination Fee, at or
prior to the time of termination in the case of a termination pursuant to
Section 9.1(c)(ii) or as promptly as possible (but in any event within four
Business Days) following
termination of this Agreement in the case of a termination pursuant to Section
9.1(d)(ii)(B) or Section 9.1(d)(iii).
(b)
In
the
event that this Agreement is terminated by Parent pursuant to Section
9.1(d)(ii)(A) and, at any time after the date of this Agreement and prior
to the
event giving rise to Parent’s right to terminate this Agreement under Section
9.1(d)(ii)(A), a Company Acquisition Proposal shall have been publicly announced
or otherwise communicated or made known to any executive officer or director
of
the Company (or any person shall have publicly announced, or communicated
or
made known a bona fide intention, whether or not conditional, to make a Company
Acquisition Proposal), then the Company shall pay to Parent the Termination
Fee
as promptly as
possible
(but in any event within four Business Days) following termination of this
Agreement.
(c)
In
the
event that this Agreement is terminated by Parent or the Company pursuant to
Section 9.1(b)(iii) under circumstances in which the obligations under the
Voting Agreement and the Istithmar Equity Rollover Commitment to vote in favor
of the Merger Agreement have been satisfied in all material respects, and,
at
any time after the date of this Agreement and prior to the Company Shareholder
Meeting, a Company Acquisition Proposal shall have been publicly announced
or
otherwise communicated or made known to any executive officer or director of
the
Company (or any person shall have publicly announced, or communicated or made
known a bona fide intention, whether or not conditional, to make a Company
Acquisition Proposal) prior to the Company Shareholder Meeting, and, if within
12 months after such termination, the Company or any of its Subsidiaries enters
into a definitive agreement with respect to, or consummates, any Company
Acquisition Proposal (whether or not the same as that originally announced
or
consummated), then the Company shall pay to Parent the Termination Fee, less
the
amount of any Parent Expenses previously paid to Parent by the Company, on
the
date of such execution or consummation (provided
that
solely for purposes of this Section 9.2(c), the term “Company Acquisition
Proposal” shall have the meaning set forth in the definition of Company
Acquisition Proposal contained in Section 7.4 except that all references to
30%
shall be deemed references to 50%).
(d)
In
the
event that this Agreement is terminated by Parent or the Company pursuant to
Section 9.1(b)(iii) (or could have been terminated under such section) under
circumstances in which (i) the obligations under the Voting Agreement and
Istithmar Equity Rollover Commitment to vote in favor of the Merger Agreement
have been satisfied in all material respects and (ii) the Termination Fee is
not
then payable pursuant to this Section 9.2, then the Company shall pay to Parent
as promptly as possible (but in any event within four Business Days) following
receipt of an invoice therefor all of Parent’s and Merger Sub’s actual and
reasonably documented out-of-pocket fees and expenses (including reasonable
legal fees and expenses) actually incurred by Parent, Merger Sub and their
respective Affiliates on or prior to the termination of this Agreement in
connection with the transactions contemplated by this Agreement, which amount
shall not be greater than $12,000,000 (“Parent
Expenses”);
provided
that the
existence of circumstances which could require the Termination Fee subsequently
to become payable pursuant to Section 9.2(c) shall not relieve the Company
of
its obligations to pay the Parent Expenses pursuant to this Section 9.2(d);
and
provided, further
that the
payment by the Company of Parent Expenses pursuant to this Section 9.2(d) shall
not relieve the Company of any
subsequent obligation to pay the Termination Fee pursuant to Section 9.2(c)
except to the extent indicated in such Section 9.2(c).
(e)
Any
amount that becomes payable pursuant to Section 9.2(a), 9.2(b), 9.2(c) or 9.2(d)
shall be paid by wire transfer of immediately available funds to an account
designated by Parent.
(f)
The
Company acknowledges that the agreements contained in this Section 9.2 are
an
integral part of the transactions contemplated by this Agreement, that without
these agreements Parent and Merger Sub would not have entered into this
Agreement, and that any amounts payable pursuant to this Section 9.2 do not
constitute a penalty. If the Company fails to
pay
Parent any amounts due to Parent pursuant to this Section 9.2 within the time
periods specified in this Section 9.2, the Company shall pay the costs and
expenses (including reasonable legal fees and expenses) incurred by Parent
in
connection with any action, including the filing of any lawsuit, taken to
collect payment of such amounts, together with interest on such unpaid amounts
at the prime lending rate prevailing during such period as published in
The
Wall Street Journal,
calculated on a daily basis from the date such amounts were required to be
paid
until the date of actual payment.
Section
9.3. Effect
of Termination.
If this
Agreement is terminated pursuant to Section 9.1, this Agreement shall forthwith
become null and void and there shall be no liability or obligation on the part
of the Company, Parent, Merger Sub or their respective Subsidiaries or
Affiliates hereunder, except (i) Sections 7.3(a)(last sentence), 7.11, 7.13,
9.2, 9.3, 10.1, 10.3, 10.6, 10.11 and 10.13 will survive the termination hereof
and (ii) with respect to any liabilities for Damages incurred or suffered as
a
result of the willful and material breach by any other party of any of its
representations, warranties, covenants or other agreements set forth in this
Agreement.
MISCELLANEOUS
Section
10.1. Notices.
All
notices, requests and other communications to any part hereunder shall be in
writing (including facsimile or similar writing) and shall be
given:
if
to
Parent or Merger Sub, to:
K-Two
Holdco Limited
Coral
Towers
Paradise
Island
Attention:
Xxxxxxx X. Xxxxxx
Fax:
x0
000 000 0000
with
copies (which shall not constitute notice) to:
Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Fax:
(000) 000-0000
if
to the
Company, to:
Xxxxxxx
International Limited
000
Xxxxx
Xxxxxx -- Xxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxxxx
Fax:
(000) 000-0000
with
a
copy (which shall not constitute notice) to:
Cravath,
Swaine & Xxxxx LLP
000
Xxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxxx
Fax:
(000) 000-0000
Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000-0000
Attention:
Xxxxxxx X. Xxxxxxxxx
Fax:
000-000-0000
or
such
other address or facsimile number as such party may hereafter specify by notice
to the other parties hereto. Each such notice, request or other communication
shall be effective (i) if given by telecopier, when such telecopy is transmitted
to the facsimile number specified above and electronic confirmation of
transmission is received or (ii) if given by any other means, when delivered
at
the address specified in this Section 10.1.
Section
10.2. Survival
of Representations and Warranties.
None of
the representations, warranties, covenants and agreements in this Agreement
or
in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for those covenants and agreements contained herein
and
therein which by their terms apply in whole or in part after the Effective
Time
and then only to such extent.
Section
10.3. Expenses.
Except
as otherwise expressly provided in Sections 7.9, 7.10 and 9.2, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
Section
10.4. Amendment.
This
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors (in the case of the Company, acting
through the Special Committee, if such committee still exists, or otherwise
by
resolution of a majority of its Disinterested Directors) at any time prior
to
the Effective Time, whether before or after approval of this Agreement by the
Company shareholders; provided,
however,
that,
after approval of this Agreement by the Company shareholders, no amendment
may
be made which under applicable Bahamanian Law requires the further approval
of
the shareholders of the Company without such further approval. This Agreement
may not be amended except by an instrument in writing signed by the parties
hereto.
Section
10.5. Waiver.
At any
time prior to the Effective Time, any party hereto may (i) extend the time
for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) subject
to the requirements of applicable law, waive compliance with any of the
agreements or conditions for the benefit of such party contained herein,
provided,
that
for so long as the Special Committee exists, the Company may
not
take
any such action unless previously authorized by the Special Committee, or
otherwise such action shall be taken by resolution of a majority of its
Disinterested Directors. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby. The failure of any party to assert any rights or remedies shall not
constitute a waiver of such rights or remedies.
Section
10.6. Successors
and Assigns.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns, provided that
no
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties hereto
(and any purported assignment without such consent shall be void and without
effect), except that Parent may assign all or any of its rights and obligations
hereunder to any direct or indirect wholly-owned Subsidiary of Parent;
provided,
however,
that no
such assignment shall relieve the assigning party of its obligations hereunder.
Section
10.7. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware (except that the IBCA shall apply to the Merger).
Section
10.8. Counterparts;
Effectiveness; Third Party Beneficiaries.
This
Agreement may be executed by facsimile signatures and in any number of
counterparts, each of which shall be an original, with the same effect as if
the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective only when actually signed by each party hereto and each
such party has received counterparts hereof signed by all of the other parties
hereto. No provision of this Agreement is intended to or shall confer upon
any
Person other than the parties hereto any rights or remedies hereunder or with
respect hereto, except as otherwise expressly provided in Section 7.5.
Notwithstanding the immediately preceding sentence, following the Effective
Time
the provisions of Article II shall be enforceable by holders of Ordinary
Shares, Company Options, Company SARs or Company RSUs.
Section
10.9. Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by virtue of any Law, or due to any public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto
shall negotiate
in good faith to modify this Agreement so as to effect the original intent
of
the parties as closely as possible in an acceptable manner so that the
transactions contemplated hereby are fulfilled to the extent possible.
Section
10.10. Entire
Agreement.
This
Agreement, together with the Company Disclosure Letter, the Cooperation
Agreement, the Voting Agreement, the Istithmar Equity Rollover Commitment
(but
only with respect to those provisions relating to the voting of Ordinary
Shares)
and the letter, dated as of the date hereof, from Istithmar to the Company
(the
“Side
Letter”),
constitute the entire agreement of the parties hereto with respect to its
subject matter and supersedes all oral or written prior or contemporaneous
agreements and understandings among the parties with respect to such subject
matter. None of the parties shall
be
liable
or bound to any other party in any manner by any representations, warranties
or
covenants relating to such subject matter hereof except as specifically set
forth herein, in the Company Disclosure Letter, the Cooperation Agreement,
the
Voting Agreement or the Side Letter.
Section
10.11. Jurisdiction.
(a)
Each
party irrevocably submits to the jurisdiction of (i) any Delaware State court,
and (ii) any Federal court of the United States sitting in the State of
Delaware, solely for the purposes of any suit, action or other proceeding
between any of the parties hereto arising out of this Agreement or any
transaction contemplated hereby. Each party agrees to commence any suit, action
or proceeding relating hereto either in any Federal court of the United States
sitting in the State of Delaware or, if such suit, action or other proceeding
may not be brought in such court for reasons of subject matter jurisdiction,
in
any Delaware State court. Each party irrevocably and unconditionally waives
any
objection to the laying of venue of any suit, action or proceeding between
any
of the parties hereto arising out of this Agreement or any transaction
contemplated hereby in (i) any Delaware State court, and (ii) any Federal court
of the United States sitting in the State of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
any
such court that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. Each party further irrevocably
consents to the service of process out of any of the aforementioned courts
in
any such suit, action or other proceeding by the mailing of copies thereof
by
registered mail to such party at its address set forth in this Agreement, such
service of process to be effective upon acknowledgment of receipt of such
registered mail; provided that nothing in this Section 10.11 shall affect the
right of any party to serve legal process in any other manner permitted by
law.
The consent to jurisdiction set forth in this Section 10.11 shall not constitute
a general consent to service of process in the State of Delaware and shall
have
no effect for any purpose except as provided in this Section 10.11. The parties
agree that a final judgment in any such suit, action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law.
(b)
EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF
OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE
FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY
AND
(IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
10.11.
(c)
Parent
and Merger Sub each agree that within 5 Business Days from the date hereof,
each
shall appoint The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware (or such other Person reasonably acceptable
to the Company), as its authorized agent (the “Authorized
Agent”)
upon
whom process may be served in any suit, action or proceeding arising out of
or
based upon this Agreement or the transactions contemplated hereby which may
be
instituted in any Delaware State court or any Federal court of the United States
sitting in the State of Delaware and (ii) agrees that service of process upon
such Authorized Agent shall be deemed in every respect effective service of
process upon Parent or Merger Sub, as applicable, in any such suit or
proceeding.
(d)
The
Company (i) hereby appoints Xxxxxxx
International North America, Inc.,
0000
Xxxxx Xxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx,
XX 00000-0000,
as its
authorized agent upon whom process may be served in any suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby which may be instituted in any Delaware State court or
any
Federal court of the United States sitting in the State of Delaware and (ii)
agrees that service of process upon KINA shall be deemed in every respect
effective service of process upon Parent or Merger Sub, as applicable, in any
such suit or proceeding. The Company hereby represents and warrants that KINA
has accepted such appointment and has agreed to act as such agent for service
of
process, and the Company agrees to take any and all action, including the filing
of any and all documents that may be necessary to continue such appointment
in
full force and effect as aforesaid.
Section
10.12. Authorship.
The
parties agree that the terms and language of this Agreement were the result
of
negotiations between the parties and their respective advisors and, as a result,
there shall be no presumption that any ambiguities in this Agreement shall
be
resolved against any party. Any controversy over construction of this Agreement
shall be decided without regard to events of authorship or
negotiation.
Section
10.13. Remedies.
(a)
Notwithstanding
any other provision of this Agreement (including Section 9.2 and
Section 9.3), the parties hereto agree that irreparable damage would occur,
damages would be difficult to determine and would be an insufficient remedy
and
no other adequate remedy would exist at law or in equity, in each case in the
event that any of the provisions of this Agreement were not performed in
accordance with
their specific terms or were otherwise breached (or any party hereto threatens
such a breach). It is accordingly agreed that in the event of a breach or
threatened breach of this Agreement, the other parties hereto shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement, in addition
to
any other remedy to which they are entitled at law or in equity. Each party
hereto irrevocably waives any defenses based on adequacy of any other remedy,
whether at law or in equity, that might be asserted as a bar to the remedy
of
specific performance of any of the terms or provisions hereof or injunctive
relief in any action brought therefor by any other party hereto.
(b)
Notwithstanding
any other provision of this Agreement, Parent and Merger Sub shall have no
right
to seek monetary damages against the Company for breaches of representations
and
warranties contained in Article IV of this Agreement to the extent that any
of
the certificates delivered to the Company by SK, HBK, Mr. Xxxxxxx Xxxxxx
and Xx.
Xxxx
Xxxxxxx
as of the date hereof were false in any respect related to the representation
or
warranty which was breached.
[signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the day and year
first
written above.
| XXXXXXX INTERNATIONAL LIMITED | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxx | |
|
Name: Xxxx Xxxxxx |
||
| Title: Chairman of the Special Committee | ||
| K-TWO HOLDCO LIMITED | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxx | |
|
Name: Xxxxxx X. Xxxxxxx |
||
| Title: President | ||
| K-TWO SUBCO LIMITED | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxx | |
|
Name: Xxxxxx X. Xxxxxxx |
||
| Title: President | ||
ANNEX
A
Gaming
Board, Commonwealth of The Bahamas (PEL Casino License) and the approval
of any
directors of the Company who will remain directors of the Surviving Corporation
who have not been previously vetted and approved by the Bahamas Gaming Authority
(i.e., Xxxxxxx Xxxx).
54
