AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 18, 1997
AMONG
XXXXXX'X ENTERTAINMENT, INC.,
HEI ACQUISITION CORP.
AND
SHOWBOAT, INC.
TABLE OF CONTENTS
PAGE
ARTICLE I. THE MERGER 1
SECTION 1.1. THE MERGER 1
SECTION 1.2. EFFECTIVE TIME OF THE MERGER 1
SECTION 1.3. CLOSING 2
SECTION 1.4. EFFECT OF THE MERGER 2
SECTION 1.5. ARTICLES OF INCORPORATION AND BYLAWS OF
THE SURVIVING CORPORATION 2
SECTION 1.6. DIRECTORS AND OFFICERS OF THE SURVIVING
CORPORATION 2
ARTICLE II. EFFECT OF THE MERGER ON SECURITIES OF THE
CONSTITUENT CORPORATIONS 2
SECTION 2.1. CONVERSION OF SECURITIES 2
SECTION 2.2. PAYMENT FOR SHARES OF SHOWBOAT COMMON STOCK 3
SECTION 2.3. SHOWBOAT OPTION PLANS; SARS 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SHOWBOAT 5
SECTION 3.1. ORGANIZATION OF SHOWBOAT AND ITS SUBSIDIARIES 5
SECTION 3.2. CAPITALIZATION 6
SECTION 3.3. AUTHORITY; NO CONFLICT; REQUIRED FILINGS
AND CONSENTS 7
SECTION 3.4. PUBLIC FILINGS; FINANCIAL STATEMENTS 9
SECTION 3.5. NO UNDISCLOSED LIABILITIES 10
SECTION 3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS 10
SECTION 3.7. TAXES 11
SECTION 3.8. REAL PROPERTY 13
SECTION 3.9. TITLE TO PERSONAL PROPERTY; LIENS 15
SECTION 3.10. INTELLECTUAL PROPERTY 15
SECTION 3.11. AGREEMENTS, CONTRACTS AND COMMITMENTS 15
SECTION 3.12. LITIGATION 16
SECTION 3.13. ENVIRONMENTAL MATTERS 17
SECTION 3.14. EMPLOYEE BENEFIT PLANS 18
SECTION 3.15. COMPLIANCE 21
SECTION 3.16. PROXY STATEMENT 22
SECTION 3.17. LABOR MATTERS 22
SECTION 3.18. INSURANCE 23
SECTION 3.19. OPINION OF FINANCIAL ADVISOR 23
SECTION 3.20. NO EXISTING DISCUSSIONS 23
SECTION 3.21. SHOWBOAT RIGHTS PLAN; NEVADA TAKEOVER STATUTE 23
SECTION 3.22. BROKERS 23
SECTION 3.23. TRANSACTIONS WITH AFFILIATES 23
i
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF XXXXXX'X
AND MERGER SUB 24
SECTION 4.1. ORGANIZATION 24
SECTION 4.2. AUTHORITY; NO CONFLICT; REQUIRED FILINGS
AND CONSENTS 24
SECTION 4.3. PROXY STATEMENT 25
SECTION 4.4. BROKERS 26
SECTION 4.5. FINANCING 26
SECTION 4.6. COMPLIANCE WITH GAMING LAWS 26
ARTICLE V. COVENANTS 28
SECTION 5.1. CONDUCT OF BUSINESS OF SHOWBOAT 28
SECTION 5.2. COOPERATION; NOTICE; CURE 31
SECTION 5.3. NO SOLICITATION 31
SECTION 5.4. PROXY STATEMENT 32
SECTION 5.5. SPECIAL MEETING 33
SECTION 5.6. ACCESS TO INFORMATION 33
SECTION 5.7. GOVERNMENTAL APPROVALS 34
SECTION 5.8. PUBLICITY 35
SECTION 5.9. INDEMNIFICATION 35
SECTION 5.10. STOCKHOLDER LITIGATION 35
SECTION 5.11. EMPLOYMENT ARRANGEMENTS 36
SECTION 5.12. FURTHER ASSURANCES AND ACTIONS 36
SECTION 5.13. EMPLOYEE BENEFITS 36
SECTION 5.14. USE OF SHOWBOAT NAME 37
ARTICLE VI. CONDITIONS TO MERGER 37
SECTION 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION
TO EFFECT THE MERGER 37
SECTION 6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF
SHOWBOAT 38
SECTION 6.3. ADDITIONAL CONDITIONS TO OBLIGATIONS OF
XXXXXX'X 38
ARTICLE VII. TERMINATION AND AMENDMENT 39
SECTION 7.1. TERMINATION 39
SECTION 7.2. EFFECT OF TERMINATION 41
SECTION 7.3. FEES AND EXPENSES 41
SECTION 7.4. AMENDMENT 42
SECTION 7.5. EXTENSION; WAIVER 42
ARTICLE VIII. MISCELLANEOUS 42
SECTION 8.1. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES
AND AGREEMENTS 42
SECTION 8.2. NOTICES 42
SECTION 8.3. INTERPRETATION 43
SECTION 8.4. COUNTERPARTS 43
ii
SECTION 8.5. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES 44
SECTION 8.6. GOVERNING LAW 44
SECTION 8.7. ASSIGNMENT 44
EXHIBITS
Exhibit A Form of Stockholder Support Agreement
iii
TABLE OF DEFINED TERMS
CROSS REFERENCE
TERMS IN AGREEMENT
Acquisition Proposal Section 5.3(a)
Agreement Preamble
Alternative Transaction Section 5.3(c)
best knowledge Section 3.2(c)
Benefit Arrangement Section 3.14(a)
Articles of Merger Section 1.2
Closing Section 1.3
Closing Date Section 1.3
Code Section 3.7(a)
Confidentiality Agreements Section 5.3(a)
Effective Time Section 1.2
Employee Plans Section 3.14(a)
Environmental Condition Section 3.13
Environmental Laws Section 3.13
Environmental Liabilities and Costs Section 3.13
ERISA Section 3.14(a)
ERISA Affiliate Section 3.14(a)
Exchange Act Section 2.3
Exchange Agent Section 2.2(a)
Foreign Jurisdiction Section 3.3(c)
Foreign Plan Section 3.14(a)
Foreign Subsidiary Section 3.14(a)
Form 31 Section 3.11(e)
GAAP Section 3.4(c)
Governmental Approvals Section 5.7(a)
Governmental Entity Section 3.3(c)
Xxxxxx'x Preamble
Xxxxxx'x Disclosure Schedule Article IV
Xxxxxx'x Gaming Laws Section 4.6(b)
Xxxxxx'x Permits Section 4.6(c)
HSR Act Section 3.3(c)
Indebtedness Section 3.11(a)
Indemnified Parties Section 5.9(a)
IRS Section 3.7(d)
Merger Sub Preamble
Merger Section 1.1
Merger Consideration Section 2.1(a)
Multiemployer Plan Section 3.14(a)
Nonqualified Plans Section 3.14(c)
Notifying Party Section 5.7(a)
NRS Section 1.1
iv
CROSS REFERENCE
TERMS IN AGREEMENT
Option Settlement Amount Section 2.3
Options Section 2.3
Pension Plan Section 3.14(a)
Proxy Statement Section 3.16
Reporting Subsidiaries Section 3.4(a)
SARs Section 2.3
SAR Settlement Amount Section 2.3
Securities Act Section 3.4(a)
Showboat Preamble
Showboat Balance Sheet Section 3.4(c)
Showboat Common Stock Section 2.1(a)
Showboat Disclosure Schedule Article III
Showboat Gaming Laws Section 3.15(b)
Showboat Leased Property Section 3.8(a)
Showboat Material Adverse Effect Section 3.1
Showboat Material Contracts Section 3.11(a)
Showboat Owned Property Section 3.8(a)
Showboat Permits Section 3.15(a)
Showboat Preferred Stock Section 3.2(a)
Showboat Rights Plan Section 3.2(b)
Showboat SEC Reports Section 3.4(a)
Showboat Stock Appreciation Rights Plan Section 2.3
Showboat Stock Option Plans Section 2.3
Showboat Stock Plans Section 3.2(a)
Special Meeting Section 3.16
SEC Section 3.3(c)
Stockholder Support Agreements Preamble
Subsidiary Section 3.1
Superior Proposal Section 5.3(a)
Surviving Corporation Section 1.1
Sydney Harbour Section 3.2(c)
Sydney Harbour Management Agreement Section 3.11(e)
Sydney Harbour Material Contract Section 3.11(c)
Sydney Harbour Reports Section 3.4(b)
Tax Return Section 3.7(d)
Taxes Section 3.7(d)
Third Party Section 5.3(a)
Voting Debt Section 3.2(b)
Waterfront Section 3.5
Welfare Plan Section 3.14(a)
v
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of
December 18, 1997, by and among XXXXXX'X ENTERTAINMENT, INC., a
Delaware corporation ("Xxxxxx'x"), HEI ACQUISITION CORP., a
Nevada corporation and an indirect wholly-owned subsidiary of
Xxxxxx'x ("Merger Sub"), and SHOWBOAT, INC., a Nevada corporation
("Showboat").
WHEREAS, the Board of Directors of Showboat has determined
that the merger of Merger Sub with and into Showboat, upon the
terms and subject to the conditions set forth in this Agreement
(the "Merger"), is fair to, and in the best interest of, Showboat
and its stockholders;
WHEREAS, the Boards of Directors of Xxxxxx'x and Merger Sub
have determined that the Merger is in the best interests of
Xxxxxx'x and Merger Sub and their respective stockholders;
WHEREAS, the Boards of Directors of Xxxxxx'x, Merger Sub and
Showboat have each approved and adopted this agreement and
approved the Merger and the other transactions contemplated
hereby;
WHEREAS, concurrently with the execution and delivery of
this Agreement and as a condition and inducement to each of
Xxxxxx'x' and Merger Sub's willingness to enter into this
Agreement, certain stockholders of Showboat have entered into
Stockholder Support Agreements with Xxxxxx'x dated as of the date
of this Agreement in the form attached hereto as Exhibit A (the
"Stockholder Support Agreements"), pursuant to which such
stockholders have agreed, among other things, to vote all voting
securities of Showboat beneficially owned by them in favor of
approval and adoption of the Agreement and the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth below, the parties agree as follows:
ARTICLE I.
THE MERGER
Section 1.1. THE MERGER.
Upon the terms and subject to the provisions of this
Agreement and in accordance with Chapter 92A of the Nevada
Revised Statutes (the "NRS"), at the Effective Time (as defined
in Section 1.2), Merger Sub shall be merged with and into
Showboat (the "Merger"). As a result of the Merger, the separate
corporate existence of Merger Sub shall cease and Showboat shall
continue as the surviving corporation (the "Surviving
Corporation").
Section 1.2. EFFECTIVE TIME OF THE MERGER.
Subject to the provisions of this Agreement (including
Section 7.1 hereof), articles of merger with respect to the
Merger in such form as is required by NRS Section 92A.200 (the
"Articles of Merger") shall be duly prepared, executed and
acknowledged and thereafter delivered to the Secretary of State
of the State of Nevada for
1
filing, as provided in the NRS, as early as practicable on the
Closing Date (as defined in Section 1.3). The Merger shall
become effective at the later of the time of filing of the
Articles of Merger or at such time as is specified in the
Articles of Merger (the "Effective Time").
Section 1.3. CLOSING.
The closing of the Merger (the "Closing") will take place at
such time and place to be agreed upon by the parties hereto, on a
date to be specified by Xxxxxx'x and Showboat, which shall be no
later than the third business day after satisfaction or, if
permissible, waiver of the conditions set forth in Article VI
(the "Closing Date"), unless another date is agreed to by
Xxxxxx'x and Showboat.
Section 1.4. EFFECT OF THE MERGER.
Upon becoming effective, the Merger shall have the effects
set forth in the NRS. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all
properties, rights, privileges, powers and franchises of Merger
Sub and Showboat shall vest in the Surviving Corporation, and all
debts, liabilities and duties of Merger Sub and Showboat shall
become the debts, liabilities and duties of the Surviving
Corporation.
Section 1.5. ARTICLES OF INCORPORATION AND BYLAWS OF THE
SURVIVING CORPORATION.
At the Effective Time, the Articles of Incorporation and
Bylaws of the Surviving Corporation shall be amended to be
identical to the Articles of Incorporation and Bylaws,
respectively, of Merger Sub as in effect immediately prior to the
Effective Time (except that the name of the Surviving Corporation
shall be "Showboat, Inc."), in each case until duly amended in
accordance with applicable law.
Section 1.6. DIRECTORS AND OFFICERS OF THE SURVIVING
CORPORATION.
The directors of Merger Sub immediately prior to the
Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Articles
of Incorporation and Bylaws of the Surviving Corporation. The
officers of Merger Sub immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation, each
to hold office in accordance with the Articles of Incorporation
and Bylaws of the Surviving Corporation.
ARTICLE II.
EFFECT OF THE MERGER ON SECURITIES OF THE CONSTITUENT
CORPORATIONS
Section 2.1. CONVERSION OF SECURITIES.
At the Effective Time, by virtue of the Merger and without
any action on the part of any of the parties hereto or the
holders of any of the following:
(a) SHOWBOAT COMMON STOCK. Each share of Showboat Common
Stock, par value $1.00 per share, of Showboat ("Showboat Common
Stock") issued and outstanding immediately prior to the Effective
Time (other than shares to be canceled in accordance with Section
2.1(b)) shall be converted into the right to receive, without
interest, $30.75 in cash (the "Merger Consideration"). Payment
of Merger Consideration shall be made in the manner described in
Section 2.2. All shares of Showboat Common Stock, when so
converted, shall no longer be
2
outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any ownership or
other rights with respect thereto, except the right to receive
the Merger Consideration for such shares upon the surrender of
such certificate in accordance with Section 2.2.
(b) CANCELLATION OF TREASURY STOCK AND XXXXXX'X-OWNED
STOCK. All shares of Showboat Common Stock that are owned by
Showboat as treasury stock and any shares of Showboat Common
Stock owned by Xxxxxx'x or any wholly-owned Subsidiary (as
defined in Section 3.1) of Xxxxxx'x shall be canceled and retired
and shall cease to exist and no consideration shall be delivered
in exchange therefor.
(c) CAPITAL STOCK OF MERGER SUB. Each issued and
outstanding share of the common stock, par value $.01 per share,
of Merger Sub shall be converted into and become one fully paid
and nonassessable share of Common Stock, par value $.01 per
share, of the Surviving Corporation.
(d) SHOWBOAT DEBT SECURITIES. All notes and other debt
instruments of Showboat that are outstanding at the Effective
Time shall continue to be outstanding subsequent to the Effective
Time as debt instruments of the Surviving Corporation, subject to
their respective terms and provisions.
Section 2.2. PAYMENT FOR SHARES OF SHOWBOAT COMMON STOCK.
(a) Prior to the Effective Time, Xxxxxx'x shall appoint a
bank or trust company reasonably satisfactory to Showboat to act
as exchange agent for the purpose of paying the Merger
Consideration (the "Exchange Agent"). Immediately prior to the
Effective Time, Xxxxxx'x shall deposit or cause to be deposited
with the Exchange Agent, for the benefit of the holders of
Showboat Common Stock, cash in an aggregate amount sufficient to
pay the aggregate Merger Consideration. Not later than five
business days after the Effective Time, the Surviving Corporation
shall cause the Exchange Agent to mail to each person who was,
immediately prior to the Effective Time, a holder of record of
issued and outstanding shares of Showboat Common Stock, a form of
letter of transmittal and instructions for use in effecting the
surrender of the certificates which, immediately prior to the
Effective Time, represented any of such shares in exchange for
payment of the Merger Consideration. The Exchange Agent's
transmittal letter shall specify that delivery shall be effected
and risk of loss and title to the certificates shall pass only
upon proper delivery of the certificates to the Exchange Agent.
Upon surrender to the Exchange Agent of such certificates,
together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and
subject to Section 2.2(b), the Surviving Corporation shall
promptly cause to be paid to each person entitled thereto cash in
an amount equal to the product of (x) the number of shares of
Showboat Common Stock represented by such certificates and (y)
the Merger Consideration. Until surrendered in accordance with
the provisions of this Section 2.2(a), each certificate shall
represent for all purposes only the right to receive the Merger
Consideration, without any interest thereon.
(b) The Surviving Corporation or the Exchange Agent shall
be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of
shares of Showboat Common Stock such amounts as the Surviving
Corporation or the Exchange
3
Agent is required to deduct and withhold with respect to the
making of such payment under the Code (as defined in
Section 3.7(a)), or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by the Surviving
Corporation or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to
the holder of shares of Showboat Common Stock in respect of which
deduction and withholding was made by the Surviving Corporation
or the Exchange Agent.
(c) Promptly following the first anniversary of the
Effective Time, the Exchange Agent shall deliver to the Surviving
Corporation all cash, certificates and other documents in its
possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate.
Thereafter, each holder of a certificate formerly representing a
share of Showboat Common Stock may surrender such certificate to
the Surviving Corporation and (subject to applicable abandoned
property, escheat and similar laws) receive in consideration
therefor the aggregate Merger Consideration relating thereto,
without any interest or dividends thereon. None of Xxxxxx'x, the
Surviving Corporation or the Exchange Agent shall be liable to
any holder of shares of Showboat Common Stock for any cash
constituting the Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat
or similar law.
Section 2.3. SHOWBOAT OPTION PLANS; SARS.
At the Effective Time, each unexpired and unexercised
outstanding option, whether or not then vested or exercisable in
accordance with its terms, to purchase shares of Showboat Common
Stock ("Options") previously granted by Showboat or its
Subsidiaries under Showboat's 1989 Long Term Incentive Plan, 1994
Long Term Incentive Plan, 1992 Employee Stock Option Plan and
1989 Board of Directors' Stock Option Plan as amended and
restated on January 30, 1996 (collectively, the "Showboat Stock
Option Plans") will become exercisable in full and each holder of
an Option shall be entitled to receive from Showboat (or the
Surviving Corporation) in cancellation thereof a payment (subject
to applicable income tax withholding and employer taxes) in an
amount equal to the excess, if any, of the Merger Consideration
over the per share exercise price of such Option, multiplied by
the number of shares of Showboat Common Stock subject to such
Option (the "Option Settlement Amount"). The Option Settlement
Amount shall be paid in cash at the Effective Time. At the
Effective Time, each then outstanding stock appreciation right
granted by Showboat under its 1996 Stock Appreciation Rights Plan
(the "Showboat Stock Appreciation Rights Plan"), whether or not
then vested or exercisable in accordance with its terms
(collectively, "SARs"), shall become exercisable in full and each
holder of a SAR shall be entitled to receive from Showboat (or
the Surviving Corporation) in cancellation thereof a payment of
an amount in cash equal to the excess, if any, of the Merger
Consideration over the exercise price of such SAR multiplied by
the number of shares of Showboat Common Stock subject to such
SAR, subject to any withholding of taxes and any reduction in the
Rights Payments (as defined in the Showboat Stock Appreciation
Rights Plan) pursuant to the terms of Section IV of the Stock
Appreciation Rights Plan (the "SAR Settlement Amount"). The SAR
Settlement Amount shall be paid in cash at the Effective Time.
From and after the Effective Time, all Options and SARs shall
represent only the right of the holders of such Options or SARs
to receive payment of the Option Settlement Amount or SAR
Settlement Amount, as the case may be, upon the surrender
thereof. The surrender of an Option or a SAR shall be deemed a
release of any and all rights the holder had or may have in
respect of such Option or SAR.
4
Notwithstanding the foregoing, with respect to any person subject
to Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), any amount of the Option Settlement
Amount or the SAR Settlement Amount, as the case may be, shall be
paid as soon as practicable after the first date payment can be
made without liability to such person under Section 16(b) of the
Exchange Act. All agreements, plans, programs or arrangements of
Showboat and its Subsidiaries that provide for the issuance or
grant of Options or any other interest in respect of the capital
stock of Showboat or capital stock of or other ownership interest
in any of its Subsidiaries shall terminate as of the Effective
Time. Showboat shall take all permitted actions necessary to
ensure that, following the Effective Time, no participant in any
agreement, plan, program or arrangement of Showboat shall have
any right thereunder to acquire equity securities or other
ownership interests of Showboat, the Surviving Corporation or any
Subsidiary thereof and to terminate all such plans.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SHOWBOAT
Showboat represents and warrants to Xxxxxx'x and Merger Sub
that the statements contained in this Article III are true and
correct except as set forth herein and in the disclosure schedule
delivered by Showboat to Xxxxxx'x and Merger Sub on or before the
date of this Agreement (the "Showboat Disclosure Schedule"). The
Showboat Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained
in this Article III and the disclosure in any paragraph shall
qualify other paragraphs in this Article III only to the extent
that it is reasonable from a reading of such disclosure that it
also qualifies or applies to such other paragraphs.
Section 3.1. ORGANIZATION OF SHOWBOAT AND ITS
SUBSIDIARIES.
Each of Showboat and its Subsidiaries (as defined below) is
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all
requisite corporate, partnership or limited liability company
power and authority to carry on its business as now being
conducted and as proposed to be conducted. Each of Showboat and
its Subsidiaries is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary,
except where the failure to be so qualified, licensed or in good
standing would not have a material adverse effect on the
business, properties, condition (financial or otherwise), results
of operations or prospects of Showboat and its Subsidiaries,
taken as a whole, or any of the three separate businesses
operated as the Atlantic City Showboat, the East Chicago Showboat
and the Sydney Harbour Casino (a "Showboat Material Adverse
Effect"). Showboat has delivered to Xxxxxx'x a true and correct
copy of the Articles of Incorporation and Bylaws of Showboat, in
each case as amended to the date of this Agreement. Assuming
compliance by Xxxxxx'x with all Showboat Gaming Laws (as defined
in Section 3.15(b)) (including obtaining all necessary consents
and approvals), the respective organizational documents of
Showboat's Subsidiaries do not contain any provision that would
limit or otherwise restrict the ability of Xxxxxx'x, following
the Effective Time, from owning or operating such Subsidiaries on
the same basis as Showboat. Except as set forth in Showboat SEC
Reports (as defined in Section 3.4)
5
filed prior to the date hereof or as disclosed in Section 3.1 of
the Showboat Disclosure Schedule, neither Showboat nor any of its
Subsidiaries directly or indirectly owns (other than ownership
interests in Showboat or in one or more of its Subsidiaries) any
equity or similar interest in, or any interest convertible into
or exchangeable or exercisable for, any corporation, partnership,
joint venture or other business association or entity. As used
in this Agreement, the word "Subsidiary" means, with respect to
any party, any corporation or other organization, whether
incorporated or unincorporated, of which (i) such party or any
other Subsidiary of such party is a general partner or (ii) at
least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or
more of its Subsidiaries, or by such party and one or more of its
Subsidiaries. Without limiting the generality of the foregoing,
the partnership between Showboat Australia Pty Ltd. and Leighton
Properties Pty Ltd. shall be considered a "Subsidiary" of
Showboat for all purposes of this Agreement.
Section 3.2. CAPITALIZATION.
(a) The authorized capital stock of Showboat consists of
50,000,000 shares of Showboat Common Stock and 1,000,000 shares
of preferred stock, $1.00 par value per share ("Showboat
Preferred Stock"). As of the date hereof, (i) 16,228,620 shares
of Showboat Common Stock were issued and outstanding, all of
which are validly issued, fully paid and nonassessable,
(ii) 137,070 shares of Showboat Common Stock were held in the
treasury of Showboat or by Subsidiaries of Showboat, and (iii) no
shares of Showboat Preferred Stock are issued and outstanding.
Section 3.2(a) of the Showboat Disclosure Schedule sets forth the
number of shares of Showboat Common Stock reserved for issuance
upon exercise of Options granted and outstanding as of the date
hereof and the Showboat Stock Option Plans and shares reserved
for issuance in connection with Showboat's employee stock
purchase plans (the "Showboat Stock Purchase Plans," and together
with the Showboat Stock Option Plans, the "Showboat Stock
Plans"). Section 3.2(a) of the Showboat Disclosure Schedule also
sets forth, for each Showboat Stock Option Plan, the dates on
which Options under such plan were granted, the number of Options
granted on each such date and the exercise price thereof. Since
September 30, 1997, Showboat has not made any grants under any of
the Showboat Stock Plans. As of the date of this Agreement,
Showboat has not granted any SARs or any other contractual rights
the value of which is derived from the financial performance of
Showboat or the value of shares of Showboat Common Stock, except
for 640,000 SARs granted to employees of Showboat at an exercise
price of $24.58, prior to the date of this Agreement pursuant to
the Showboat Stock Appreciation Rights Plan. Except as disclosed
in Section 3.2(a) of the Showboat Disclosure Schedule, there are
no obligations, contingent or otherwise, of Showboat or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of Showboat Common Stock or the capital stock or ownership
interests of any Subsidiary or to provide funds to or make any
material investment (in the form of a loan, capital contribution
or otherwise) in any such Subsidiary or any other entity other
than guarantees of bank obligations or indebtedness for borrowed
money of Subsidiaries entered into in the ordinary course of
business. All of the outstanding shares of capital stock
(including shares which may be issued upon exercise of
outstanding options) or other ownership interests of each of
Showboat's Subsidiaries are duly authorized, validly issued,
fully paid and nonassessable and, except as disclosed in Section
3.2 of
6
the Showboat Disclosure Schedule, all such shares and ownership
interests are owned by Showboat or another Subsidiary of Showboat
free and clear of all security interests, liens, claims, pledges,
agreements, limitations on Showboat's voting rights, charges or
other encumbrances or restrictions on transfer of any nature.
(b) There are no bonds, debentures, notes or other
indebtedness having voting rights (or convertible into securities
having such rights) ("Voting Debt") of Showboat or any of its
Subsidiaries issued and outstanding. Except as set forth in this
Section 3.2(b) or as reserved for future grants of options or
restricted stock under the Showboat Stock Plans and except for
the preferred stock purchase rights issued and issuable under the
Rights Agreement dated October 5, 1995, between Showboat and
American Stock Transfer and Trust Company (the "Showboat Rights
Plan"), (i) there are no shares of capital stock of any class of
Showboat, or any security exchangeable into or exercisable for
such equity securities, issued, reserved for issuance or
outstanding; (ii) there are no options, warrants, equity
securities, calls, rights, commitments or agreements of any
character to which Showboat or any of its Subsidiaries is a party
or by which it is bound obligating Showboat or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other
ownership interests (including Voting Debt) of Showboat or any of
its Subsidiaries or obligating Showboat or any of its
Subsidiaries to grant, extend, accelerate the vesting of or enter
into any such option, warrant, equity security, call, right,
commitment or agreement; and (iii) there are no voting trusts,
proxies or other voting agreements or understandings with respect
to the shares of capital stock of Showboat. All shares of
Showboat Common Stock subject to issuance as specified in this
Section 3.2(b) are duly authorized and, upon issuance on the
terms and conditions specified in the instruments pursuant to
which they are issuable, shall be validly issued, fully paid and
nonassessable.
(b) To the best knowledge of Showboat, the capitalization
of Sydney Harbour Casino Holdings Limited ("Sydney Harbour") is
accurately described in the Showboat SEC Reports (as defined in
Section 3.4(a)) or the Sydney Harbour Reports (as defined in
Section 3.4(b)). As used in this Agreement, "best knowledge"
means, with respect to Showboat or Xxxxxx'x, as the case may be,
the actual knowledge (without inquiry) of such entity's executive
officers (including, for the purposes of Section 3.7, Showboat's
Vice President of Taxes). All of the outstanding shares of
capital stock (including shares which may be issued upon exercise
of outstanding options) or other ownership interests held by
Showboat or any of its Subsidiaries in Sydney Harbour are (or, in
the case of options, the shares subject to such options will be)
duly authorized, validly issued, fully paid, and nonassessable
and, except as disclosed in Schedule 3.2(c) of the Showboat
Disclosure Schedule, all such shares and ownership interests are
owned by Showboat or a Subsidiary of Showboat free and clear of
all security interests, liens, claims, pledges, agreements,
limitations on Showboat's or its Subsidiary's voting rights,
charges or other encumbrances or restrictions on transfer of any
nature.
Section 3.3. AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND
CONSENTS.
(a) Showboat has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated by this
7
Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement
by Showboat have been duly authorized by all necessary corporate
action on the part of Showboat, subject only to the approval and
adoption of this Agreement and the Merger by two-thirds of
Showboat's stockholders. This Agreement has been duly executed
and delivered by Showboat and constitutes the valid and binding
obligations of Showboat, enforceable against it in accordance
with their terms.
(b) Other than as disclosed in Section 3.3(b) of the
Showboat Disclosure Schedule, the execution and delivery of this
Agreement by Showboat does not, and the consummation of the
transactions contemplated by this Agreement will not,
(i) conflict with, or result in any violation or breach of, any
provision of the Articles of Incorporation or Bylaws of Showboat
or the comparable charter or organizational documents of any of
its Subsidiaries, (ii) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a
default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit)
under, or require a consent or waiver under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to
which Showboat or any of its Subsidiaries is a party or by which
any of them or any of their properties or assets may be bound, or
(iii) subject to the governmental filings and other matters
referred to in Section 3.3(c), conflict with or violate any
permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to
Showboat or any of its Subsidiaries or any of its or their
properties or assets, except in the case of clauses (ii) and
(iii) for any such conflicts, violations, defaults, terminations,
cancellations or accelerations which (x) are not, individually or
in the aggregate, reasonably likely to have a Showboat Material
Adverse Effect or (y) would not impair or delay the consummation
of the Merger.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court,
administrative agency, commission, gaming authority or other
governmental authority or instrumentality ("Governmental Entity")
is required by or with respect to Showboat or any of its
Subsidiaries in connection with the execution and delivery of
this Agreement or the consummation of the transactions
contemplated hereby or thereby, except for (i) the filing of the
pre-merger notification report under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended ("HSR Act") and
any similar statute, rule or regulation of any foreign country,
state, province, territory or city (each, a "Foreign
Jurisdiction"), (ii) the filing of the Articles of Merger with
respect to the Merger with the Secretary of State of the State of
Nevada, (iii) the filing of the Proxy Statement (as defined in
Section 3.16 below) with the Securities and Exchange Commission
(the "SEC") in accordance with the Exchange Act, (iv) any
approvals and filing of notices required under the Showboat
Gaming Laws (as defined in Section 3.15(b)), (v) such consents,
approvals, orders, authorizations, permits, filings or
registrations related to, or arising out of, compliance with
statutes, rules or regulations regulating the consumption, sale
or serving of alcoholic beverages, (vi) such consents, approvals,
orders, authorizations, registrations, declarations and filings
as may be required under applicable state securities laws and the
securities laws of any Foreign Jurisdiction, (vii) the approvals
required from the Australian Securities Commission (with respect
to compliance with the Australian Corporations Law) and the
Australian Foreign Investment Review Board, (viii) such
immaterial filings and consents as may be required under any
environmental health or safety law or regulation pertaining to
any notification, disclosure or required approval triggered by
the Merger
8
or the transactions contemplated by this Agreement, and (ix) such
other filings, consents, approvals, orders, registrations and
declarations as may be required under the laws of any
jurisdiction in which Showboat or any of its Subsidiaries
conducts any business or owns any assets the failure of which to
obtain would not have a Showboat Material Adverse Effect.
Section 3.4. PUBLIC FILINGS; FINANCIAL STATEMENTS.
(a) Showboat and its Subsidiaries that are required to
file forms, reports or other documents with the SEC (the
"Reporting Subsidiaries") have filed and made available to
Xxxxxx'x all forms, reports and documents required to be filed by
Showboat and the Reporting Subsidiaries with the SEC since
January 1, 1995 (collectively, the "Showboat SEC Reports"). The
Showboat SEC Reports (including any financial statements filed as
a part thereof or incorporated by reference therein) (i) at the
time filed, complied in all material respects with the applicable
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act, as the case may be, and
(ii) did not, at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then
on the date of such filing), contain any untrue statement of a
material fact or omit to state a material fact required to be
stated in such Showboat SEC Reports or necessary in order to make
the statements in such Showboat SEC Reports, in the light of the
circumstances under which they were made, not misleading. Other
than Showboat Marina Casino Partnership and Showboat Marina
Finance Corporation, none of Showboat's Subsidiaries is a
Reporting Subsidiary.
(b) To the best knowledge of Showboat, the forms, reports,
and documents required to be filed by Sydney Harbour with the
Australian Securities Commission since June 1, 1995
(collectively, the "Sydney Harbour Reports"), when taken together
with the Showboat SEC Reports, did not, at the time they were
filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing), contain any
untrue statement of a material fact or omit to state a material
fact required to be stated in such Sydney Harbour Reports and the
Showboat SEC Reports or necessary in order to make the statements
in such Sydney Harbour Reports and Showboat SEC Reports, in the
light of the circumstances in which they were made, not
misleading. Except as disclosed in Section 3.4(b) of the
Showboat Disclosure Schedule and to the best knowledge of
Showboat, since the end of the most recent fiscal year of Sydney
Harbour for which audited financial statements have been filed in
a Sydney Harbour Report, there has not been any event,
development, state or affairs or condition, or series or
combination of events, developments, states of affairs or
conditions, which, individually or in the aggregate, has had or
is reasonably likely to have a Showboat Material Adverse Effect.
(c) Each of the consolidated financial statements
(including, in each case, any related notes) of Showboat
contained in the Showboat SEC Reports complied as to form in all
material respects with the applicable published rules and
regulations of the SEC with respect thereto, was prepared in
accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted
by Form 10-Q under the Exchange Act) and fairly presented the
consolidated financial position of Showboat and its consolidated
Subsidiaries as of the dates and the consolidated results of its
operations and cash flows for the periods indicated, except that
the unaudited interim financial
9
statements were or are subject to normal and recurring year-end
adjustments which, with respect to interim periods since
December 31, 1996, were not or are not expected to be material in
amount. The audited balance sheet of Showboat as of December 31,
1996 is referred to herein as the "Showboat Balance Sheet."
Section 3.5. NO UNDISCLOSED LIABILITIES.
Except as disclosed in the Showboat SEC Reports and the
Sydney Harbour Reports filed prior to the date hereof or in
Section 3.5 of the Showboat Disclosure Schedule, and except for
liabilities and obligations incurred since December 31, 1996 in
the ordinary course of business consistent with past practices,
Showboat and its consolidated Subsidiaries (and, to the best
knowledge of Showboat, Sydney Harbour) do not have any
indebtedness, obligations or liabilities of any kind, whether
accrued, contingent or otherwise (whether or not required to be
reflected in financial statements in accordance with GAAP), and
whether due or to become due, which would be reasonably likely to
have a Showboat Material Adverse Effect. Without limiting the
generality of the foregoing, as of the date of this Agreement (a)
Waterfront Entertainment & Development, Inc. ("Waterfront") has
not incurred any expense relating to Showboat Mardi Gras Casino
which is material to Showboat Marina Partnership that has not
been reimbursed which would entitle Waterfront to receive
preferential distributions from Showboat Marina Partnership, and
(b) except as disclosed in Section 3.5 of the Showboat Disclosure
Schedule, Showboat Marina Partnership has no liabilities,
obligations or commitments to any Governmental Entity arising out
of or relating to the involvement of Showboat Marina Partnership
with the Showboat Mardi Gras Casino which are material to
Showboat Marina Partnership.
Section 3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as disclosed in the Showboat SEC Reports filed prior
to the date hereof or in Section 3.6 of the Showboat Disclosure
Schedule, since the date of the Showboat Balance Sheet, Showboat
and its Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice
and, since such date, there has not been (i) any event,
development, state of affairs or condition, or series or
combination of events, developments, states of affairs or
conditions, which, individually or in the aggregate, has had or
is reasonably likely to have a Showboat Material Adverse Effect;
(ii) any damage, destruction or loss (whether or not covered by
insurance) with respect to Showboat or any of its Subsidiaries
which is reasonably likely to have a Showboat Material Adverse
Effect; (iii) any material change by Showboat in its accounting
methods, principles or practices of which Xxxxxx'x has not
previously been informed; (iv) any revaluation by Showboat of any
of its assets which is reasonably likely to have a Showboat
Material Adverse Effect; (v) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash,
stock or property) with respect to the equity interests of
Showboat or of any of its Subsidiaries, other than dividends paid
by wholly owned Subsidiaries or the $0.025 per share cash
dividend on shares of Showboat Common Stock declared on November
20, 1997 and payable on January 9, 1998, or any redemption,
purchase or other acquisition by Showboat or any of its
Subsidiaries of any securities of Showboat or any of its
Subsidiaries; (vi) any split, combination or reclassification of
any of Showboat's capital stock or any issuance or the
authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for, shares of Showboat's
capital stock; (vii) any increase in or establishment of any
bonus, insurance, severance, deferred compensation, pension,
retirement, profit sharing, stock option, stock purchase or other
employee benefit plan, or any other increase in the
10
compensation payable or to become payable to any officers or key
employees of Showboat or any Subsidiary other than increases
which would not be material, individually or in the aggregate,
with respect to such officers or employees receiving such benefit
or compensation (based on a comparison to benefits and
compensation received in the year ended December 31, 1996);
(viii) any entry into, renewal, modification or extension of, any
material contract, arrangement or agreement with any other party
except for contracts, arrangements or agreements in the ordinary
course of business or as contemplated by this Agreement; or (ix)
any settlement of pending or threatened litigation involving
Showboat or any of its Subsidiaries (whether brought by a private
party or a Governmental Entity) other than any settlement which
is not likely to have a Showboat Material Adverse Effect.
Section 3.7. TAXES.
(a) Except as set forth in Section 3.7(a) of the Showboat
Disclosure Schedule:
(i) Each of Showboat and its Subsidiaries (and any
affiliated group (within the meaning of Section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code"))) of which
Showboat or any of its Subsidiaries is now or has been a member)
has timely filed with the appropriate taxing authorities all
federal, state and local income Tax Returns (as defined in
Section 3.7(c)) and all other material Tax Returns required to be
filed through the date hereof and will timely file any such
returns required to be filed on or prior to the Closing Date.
Such Tax Returns are (and, to the extent they will be filed prior
to the Effective Time, will be) complete and accurate in all
material respects. None of Showboat, its Subsidiaries, nor any
affiliated group (within the meaning of Section 1504 of the Code)
of which Showboat or its Subsidiaries is now or was a member, has
pending any request for an extension of time within which to file
federal, state or local income Tax Returns. Showboat has
provided to Xxxxxx'x and Merger Sub complete and accurate (in all
material respects) copies of Showboat's federal and state income
Tax Returns for the taxable years ended June 30, 1995, June 30,
1996 and December 31, 1996.
(ii) All Taxes (as defined in Section 3.7(c)) in
respect of periods beginning before the Closing Date have been
paid or will be timely paid, or an adequate reserve has been or
will be established therefor in accordance with GAAP by each of
Showboat and its Subsidiaries subject to such exceptions as are
not likely to have a Showboat Material Adverse Effect.
(iii) Showboat and its Subsidiaries have complied in
all respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes and have, within
the time and the manner prescribed by law, withheld and paid over
to the proper governmental authorities all amounts required to be
so withheld and paid over under applicable laws subject to such
exceptions as are not likely to have a Showboat Material Adverse
Effect.
(iv) No federal, state, local or foreign audits or
other administrative proceedings or court proceedings are
presently pending with regard to any material Taxes or material
Tax Returns of any of Showboat or its Subsidiaries subject to
such exceptions as are not likely to have a Showboat Material
Adverse Effect. Neither Showboat nor any of its Subsidiaries has
received a written notice of any such pending audits
or proceedings.
11
(v) Neither the IRS nor any other taxing authority
(whether domestic or foreign) has asserted, or to the best
knowledge of Showboat, is threatening to assert, against Showboat
or any of its Subsidiaries any material deficiency or material
claim for Taxes in excess of the reserves established therefor
except as which is not likely to have a Showboat Material Adverse
Effect.
(b) Except as set forth in Section 3.7(b) of Showboat
Disclosure Schedule:
(i) There are no liens for Taxes upon any property or
assets of Showboat or any Subsidiary thereof, except for liens
for Taxes not yet due and payable and liens for Taxes that are
being contested in good faith by appropriate proceedings as set
forth in Section 3.7(a) of Showboat Disclosure Schedule and as to
which adequate reserves have been established in accordance with
generally accepted accounting standards except as which is not
likely to have a Showboat Material Adverse Effect.
(ii) Neither Showboat nor any of its Subsidiaries is or
has been a member of an affiliated group of corporations filing a
consolidated federal income tax return (or a group of
corporations filing a consolidated, combined or unitary income
tax return under comparable provisions of state, local or foreign
tax law) for any taxable period beginning on or after the taxable
period ending June 30, 1992, other than a group the common parent
of which is or was Showboat or any Subsidiary of Showboat.
(iii) Neither Showboat nor any of its Subsidiaries has
any obligation under any Tax sharing agreement or similar
arrangement with any other person with respect to Taxes of such
other person.
(iv) Neither Showboat nor any of its Subsidiaries has,
with regard to any assets or property held or acquired by any of
them, filed a consent to the application of Section 341(f) of the
Code, or agreed to have Section 341(f)(2) of the Code apply to
any disposition of a subsection (f) asset (as such term is
defined in Section 341(f)(4) of the Code) owned by Showboat or
any of its Subsidiaries;
(v) To the best knowledge of Showboat no member of the
Showboat affiliated group (as defined in Section 1504 of the
Code) has recognized any gain in connection with any intercompany
transaction that has been deferred for federal, state, local or
foreign income tax purposes, except for such gains as have been
taken into account on Tax Returns filed prior to the date hereof
in accordance with Treas. Reg. Section 1.1502-13 or comparable
provisions of state, local or foreign Tax laws except as which is
not likely to have a Showboat Material Adverse Effect.
(c) "TAXES" shall mean any and all taxes, charges, fees,
levies, duties, liabilities, impositions or other assessments,
including, without limitation, income, gross receipts, profits,
excise, real or personal property, environmental, recapture,
sales, use, value-added, withholding, social security,
retirement, employment, unemployment, occupation, service,
license, net worth, payroll, franchise, gains, stamp, transfer
and recording taxes, fees and charges, imposed by the Internal
Revenue Service ("IRS") or any other taxing authority (whether
domestic or foreign
12
including, without limitation, any state, county, local or
foreign government or any subdivision or taxing agency thereof
(including a United States possession)), whether computed on a
separate, consolidated, unitary, combined or any other basis; and
such term shall include any interest whether paid or received,
fines, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees,
levies or other assessments. For purposes of this Agreement,
"Taxes" also includes any obligations under any agreements or
arrangements with any other person with respect to Taxes of such
other person (including pursuant to Treas. Reg. Sec. 1.1502-6 or
comparable provisions of state, local or foreign tax law) and
including any liability for Taxes of any predecessor entity.
"Tax Return" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any
taxing authority or jurisdiction (foreign or domestic) with
respect to Taxes, including, without limitation, information
returns, any documents with respect to or accompanying payments
of estimated Taxes, or with respect to or accompanying requests
for the extension of time in which to file any such report,
return, document, declaration or other information.
Section 3.8. REAL PROPERTY
(a) Section 3.8(a) of the Showboat Disclosure Schedule
identifies all real property owned by Showboat and its
subsidiaries (the "Showboat Owned Property") and all real
property leased or operated by Showboat and its Subsidiaries (the
"Showboat Leased Property"). The Showboat Owned Property and the
Showboat Leased Property is referred to herein collectively as
the "Showboat Real Property."
(b) Showboat and its Subsidiaries have good and marketable
fee simple title to the Showboat Owned Property, and a valid
leasehold interest in the Showboat Leased Property, free and
clear of any and all liens, encumbrances, restrictions, leases,
options to purchase, options to lease, conditions, covenants,
assessments, defects, claims or exceptions, except for the
exceptions described in the Showboat SEC Reports or on Schedule
3.8(b) of the Showboat Disclosure Schedule and such other liens
or exceptions that do not and would not, individually or in the
aggregate, materially interfere with the use of the Showboat Real
Property as currently used.
(c) True and correct copies of the documents under which
the Showboat Owned Property and Showboat Leased Property is
leased or operated (the "Lease Documents") have been delivered or
made available for review to Xxxxxx'x. The Lease Documents are
unmodified and in full force and effect, and there are no other
agreements, written or oral, between Showboat or any of its
Subsidiaries in the Showboat Owned Property, Showboat Leased
Property or otherwise relating to the use and occupancy of the
Showboat Owned Property or Showboat Leased Property. None of
Showboat, its Subsidiaries or any other party is in material
default under the Lease Documents, and, to the best knowledge of
Showboat, no defaults (whether or not subsequently cured) by
Showboat, its Subsidiaries or any other party have been alleged
thereunder. To the best knowledge of Showboat and its
Subsidiaries, each landlord named in any of the Lease Documents
is not in material default thereunder, and no material defaults
(whether or not subsequently cured) by such landlord have been
alleged thereunder.
13
(d) Except as disclosed in Section 3.8(d) of the Showboat
Disclosure Schedule, (i) to the best knowledge of Showboat, no
land or property adjacent to the Showboat Real Property is in
material violation of any applicable laws, regulations or
Restrictions, except for such violations which, individually or
in the aggregate, would not be reasonably likely to result in a
Showboat Material Adverse Effect; and (ii) there are no material
defects in the physical condition of the Showboat Real Property
or the improvements located on the Showboat Real Property, except
for defects which, individually or in the aggregate, would not be
reasonably likely to have a Showboat Material Adverse Effect.
(e) Except as disclosed in Section 3.8(e) of the Showboat
Disclosure Schedule, there is no action, proceeding or litigation
pending (or, to the best knowledge of Showboat, overtly
contemplated or threatened) (i) to take all or any portion of the
Showboat Real Property, or any interest therein, by eminent
domain; (ii) to modify the zoning of, or other governmental rules
or restrictions applicable to, the Showboat Real Property or the
use or development thereof; (iii) for any street widening or
changes in highway or traffic lanes or patterns in the immediate
vicinity of the Showboat Real Property; or (iv) otherwise
relating to the Showboat Real Property or the interests of
Showboat and its Subsidiaries therein, or which otherwise would
interfere with the use, ownership, improvement, development
and/or operation of the Showboat Real Property; in each case
except for such actions, proceedings or litigation which,
individually or in the aggregate, would not be reasonably
expected to have a Showboat Material Adverse Effect.
(f) Except as disclosed in Section 3.8(f) of the Showboat
Disclosure Schedule, no portion of the Showboat Real Property or
the roads immediately adjacent to the Showboat Real Property: (i)
based on title reports and surveys, is situated in a "Special
Flood Hazard Area," as set forth on a Federal Emergency
Management Agency Flood Insurance Rate Map or Flood Hazard
Boundary Map; (ii) to the best knowledge of Showboat, was the
former site of any public or private landfill, dump site,
retention basin or settling pond; (iii) to the best knowledge of
Showboat, was the former site of any oil or gas drilling
operations; or (iv) to the best knowledge of Showboat, was the
former site of any experimentation, processing, refining,
reprocessing, recovery or manufacturing operation for any
petrochemicals.
(g) The parcels constituting the Showboat Real Property are
assessed separately from all other adjacent property for purposes
of real property taxes.
(h) The Showboat Real Property is connected to and serviced
by adequate water, sewage disposal, gas and electricity
facilities and all material systems (heating, air conditioning,
electrical, plumbing and the like) for the basic operation of the
Showboat Real Property are operable and in good condition
(ordinary wear and tear excepted), except as would not be
reasonably expected to have a Showboat Material Adverse Effect.
(i) There are no material commitments to or agreements with
any governmental authority or agency (federal, state or local)
affecting the Showboat Real Property which are not listed in
Schedule 3.8(i) of the Showboat Disclosure Schedule or described
in the Showboat SEC Reports.
14
(j) There are no contracts or other obligations outstanding
for the sale, exchange, lease or transfer of any of the Showboat
Real Property, or any portion of it, or the businesses operated
by Showboat or any of its Subsidiaries thereon, except as
disclosed on Schedule 3.8(j) of the Showboat Disclosure Schedule
and other than contracts and obligations entered into after the
date of this Agreement in compliance with Section 5.1.
Section 3.9. TITLE TO PERSONAL PROPERTY; LIENS.
To the best knowledge of Showboat, Showboat and each of its
Subsidiaries has sufficiently good and valid title to, or an
adequate leasehold interest in, its material tangible personal
properties and assets (including all riverboats operated by
Showboat and its Subsidiaries) in order to allow it to conduct,
and continue to conduct, its business as currently conducted.
Such material tangible personal assets and properties are
sufficiently free of liens to allow each of Showboat and its
Subsidiaries to conduct, and continue to conduct, its business as
currently conducted and, to the best knowledge of Showboat, the
consummation of the transactions contemplated by this Agreement
will not alter or impair such ability in any respect which,
individually or in the aggregate, would be reasonably likely to
have a Showboat Material Adverse Effect. There are no defects in
the physical condition or operability of such material tangible
personal assets and properties which would impair the use of such
assets and properties as such assets and properties are currently
used, except for such defects which, individually or in the
aggregate, would not be reasonably likely to have a Showboat
Material Adverse Effect.
Section 3.10. INTELLECTUAL PROPERTY.
Section 3.10 of the Showboat Disclosure Schedule lists all
(i) trademark and service xxxx registrations and applications
owned by Showboat or any of its Subsidiaries and (ii) trademark,
service xxxx and trade name license agreements to which Showboat
or any of its Subsidiaries is a party. Except as disclosed in
Section 3.10 of the Showboat Disclosure Schedule, Showboat and
its Subsidiaries own or possess adequate and enforceable rights
to use all material trademarks, trademark applications, trade
names, service marks, trade secrets (including customer lists and
customer databases), copyrights, patents, licenses, know-how and
other proprietary intellectual property rights as are necessary
in connection with the businesses of Showboat and its
Subsidiaries as currently conducted without material restrictions
or material conditions on use, and, to the best knowledge of
Showboat, there is no conflict with the rights of Showboat and
its Subsidiaries therein or any conflict by them with the rights
of others therein which, individually or in the aggregate would
be reasonably likely to have a Showboat Material Adverse Effect.
Section 3.11. AGREEMENTS, CONTRACTS AND COMMITMENTS.
(a) Except as disclosed in the Showboat SEC Reports filed
prior to the date of this Agreement or as disclosed in Section
3.11(a) of the Showboat Disclosure Schedule, neither Showboat nor
any of its Subsidiaries is a party to any oral or written (i)
agreement, contract, indenture or other instrument relating to
Indebtedness (as defined below) in an amount exceeding
$1,000,000, (ii) partnership, joint venture or limited liability
or management agreement with any person, (iii) agreement,
contract, or other instrument relating to any merger,
consolidation, business combination, share exchange, business
acquisition, or for the purchase, acquisition, sale or
disposition of any assets of Showboat or any of its Subsidiaries
outside the ordinary course of business, (iv) other contract,
agreement or commitment to be performed after the date hereof
15
which would be a material contract (as defined in Item 601(b)(10)
of Regulation S-K of the SEC), (v) agreement, contract, or other
instrument relating to any "strategic alliances" (i.e., cross-
marketing, affinity relationships, etc.) or (vi) contract,
agreement or commitment which materially restricts
(geographically or otherwise) the conduct of any line of business
by Showboat or any of its Subsidiaries or Sydney Harbour
(collectively, the "Showboat Material Contracts").
"Indebtedness" means any liability in respect of (A) borrowed
money, (B) capitalized lease obligations, (C) the deferred
purchase price of property or services (other than trade payables
in the ordinary course of business) and (D) guarantees of any of
the foregoing incurred by any other person other than Showboat or
any of its Subsidiaries.
(b) Except as disclosed in the Showboat SEC Reports or as
disclosed in Section 3.11(b) of the Showboat Disclosure Schedule,
(i) each of the Showboat Material Contracts is valid and binding
upon Showboat or any of its Subsidiaries (and, to Showboat's best
knowledge, on all other parties thereto) in accordance with its
terms and is in full force and effect, (ii) there is no material
breach or violation of or default by Showboat or any of its
Subsidiaries under any of the Showboat Material Contracts,
whether or not such breach, violation or default has been waived,
and (iii) no event has occurred with respect to Showboat or any
of its Subsidiaries which, with notice or lapse of time or both,
would constitute a material breach, violation or default, or give
rise to a right of termination, modification, cancellation,
foreclosure, imposition of a lien, prepayment or acceleration
under any of the Showboat Material Contracts, which breach,
violation or default referred to in clauses (ii) or (iii), alone
or in the aggregate with other such breaches, violations or
defaults referred to in clauses (ii) or (iii), would be
reasonably likely to have a Showboat Material Adverse Effect.
Section 3.11(b) of the Showboat Disclosure Schedule describes any
consents or approvals required to terminate or transfer the
Casino Complex Management Agreement, dated April 21, 1994,
relating to the Sydney Harbour Casino.
(c) Except as disclosed in Section 3.11(c) of the Showboat
Disclosure Schedule, Showboat and its Subsidiaries have
terminated, and have no continuing liabilities or obligations
under, any agreement, contract or arrangement with any person or
entity relating to the Southboat Casino project in Xxxxx,
Missouri.
Section 3.12. LITIGATION.
Except as disclosed in the Showboat SEC Reports or the
Sydney Harbour Reports filed prior to the date of this Agreement
or in Section 3.12 of the Showboat Disclosure Schedule, (a) there
is no action, suit or proceeding, claim, arbitration or
investigation against Showboat, Sydney Harbour or any of their
respective Subsidiaries pending, or as to which Showboat, Sydney
Harbour or any of their respective Subsidiaries has received any
written notice of assertion or, to the best knowledge of
Showboat, threatened against or affecting, Showboat, Sydney
Harbour or any of their respective Subsidiaries or any property
or asset of Showboat, Sydney Harbour or any of their respective
Subsidiaries, before any court, arbitrator, or administrative,
governmental or regulatory authority or body, domestic or
foreign, that, individually or in the aggregate, could reasonably
be expected to (i) have a Showboat Material Adverse Effect or
(ii) prevent the consummation of the transactions contemplated by
this Agreement; and (b) there is no judgment, order, injunction
or decree of any Governmental Entity outstanding against
Showboat, Sydney Harbour or any of their respective Subsidiaries
that could reasonably be expected to have any effect referred to
in clauses (i) or (ii) above.
16
Section 3.13. ENVIRONMENTAL MATTERS.
Except as disclosed in Section 3.13 of the Showboat
Disclosure Schedule and as would not be reasonably likely to have
a Showboat Material Adverse Effect, (a) Showboat is in compliance
with all applicable Environmental Laws, (b) there are no
Environmental Liabilities and Costs of Showboat and its
Subsidiaries, (c) there are no Environmental Conditions, (d) none
of Showboat and its Subsidiaries has received any notices from
any governmental agency or other third party alleging liability
under or violation of any Environmental Law, or alleging
responsibility for the removal, clean-up, or remediation of any
Environmental Condition, (e) Showboat is not subject to any
enforcement or investigatory action by any governmental agency
regarding an Environmental Condition with respect to any Showboat
Real Property or any other property related in any way to
Showboat or its Subsidiaries, (f) no asbestos containing
materials or polychlorinated biphenyls (i.e., PCBs) are contained
in or stored on any of the Showboat Real Properties, and (g)
there have been no leaks, releases, spills or discharge of fluids
from any underground or above-ground storage tanks located on any
of the Showboat Real Properties, and each underground storage
tank meets 1998 monitoring standards. As used herein, the terms
"toxic" or "hazardous" wastes, substances or materials shall
include, without limitation, all those so designated and all
those in any way regulated by any Environmental Laws.
For purposes of this Section 3.13, the following definitions
shall apply:
"ENVIRONMENTAL LAWS" means all applicable foreign, federal,
state and local statutes or laws, common law, judgments, orders,
regulations, licenses, permits, rules and ordinances relating to
pollution or protection of health, safety or the environment,
including, but not limited to the Federal Water Pollution Control
Act (33 U.S.C. Sec. 1251 ET SEQ.), Resource Conservation and Recovery
Act (42 U.S.C. Sec. 6901 ET SEQ.), Safe Drinking Water Act (42 U.S.C.
Sec. 3000(f) ET SEQ.), Toxic Substances Control Act (15 U.S.C. Sec.
2601 ET SEQ.), Clean Air Act (42 U.S.C. Sec. 7401 ET SEQ.),
Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Sec. 9601 ET SEQ.) and other similar state and local
statutes, in effect as of the date hereof.
"ENVIRONMENTAL CONDITION" means the release into the
environment of any pollution, including without limitation any
contaminant, pollutant, hazardous or toxic waste, substance or
material as a result of which Showboat (1) has or may become
liable to any person, (2) is or was in violation of any
Environmental Law, (3) has or may be required to incur response
costs for investigation or remediation, or (4) by reason of which
any of the Properties or other assets of Showboat, may be subject
to any lien under Environmental Laws.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities,
obligations, responsibilities, obligations to conduct cleanup,
losses, damages, deficiencies, punitive damages, consequential
damages, treble damages, costs and expenses (including, without
limitation, all reasonable fees, disbursements and expenses of
counsel, expert and consulting fees and costs of investigations
and feasibility studies and responding to government requests for
information or documents), fines, penalties, restitution and
monetary sanctions, interest, direct or indirect, known or
unknown, absolute or contingent, past, present or future,
resulting from any claim or demand, by any person or entity,
under any Environmental Law, or arising from environmental,
health or safety conditions.
17
Section 3.14. EMPLOYEE BENEFIT PLANS
(a) DEFINITIONS. The following terms, when used in this
Section 3.14 shall have the following meanings. Any of these
terms may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
(i) BENEFIT ARRANGEMENT. "Benefit Arrangement" shall
mean any employment, consulting, severance or other similar
contract, arrangement or policy and each plan, program or
agreement providing for workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, life insurance, health, accident benefits
(including without limitation any "voluntary employees'
beneficiary association" as defined in Section 501(c)(9) of the
Code providing for the same or other benefits), deferred
compensation, profit-sharing bonuses, stock options, stock
appreciation rights, stock purchases or other forms of incentive
compensation which
(1) is not a Welfare Plan, Pension Plan, Foreign
Plan or Multiemployer Plan under which Showboat or ERISA
Affiliate may incur any liability, and (2) covers any employee or
former employee of Showboat or any ERISA Affiliate (with respect
to their relationship with such entities).
(ii) CODE. "Code" shall have the meaning set forth in
Section 3.7(a)(vi).
(iii) EMPLOYEE PLANS. "Employee Plans" shall mean all
Benefit Arrangements, Multiemployer Plans, Foreign Plans, Pension
Plans and Welfare Plans.
(iv) ERISA. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
(v) ERISA AFFILIATE. "ERISA Affiliate" shall mean any
entity which is (or at any relevant time was) a member of a
"controlled group of corporations" with, under "common control"
with, or a member of an "affiliated service group" with, Showboat
as defined in Section 414(b), (c), (m) or (o) of the Code or any
partnership of which Showboat or any of its Subsidiaries is a
general partner.
(vi) FOREIGN PLAN. "Foreign Plan" shall mean any
employee benefit plan covering employees or former employees of
any Subsidiary of Showboat or any ERISA Affiliate which is
organized under the laws of any country other than the U.S. (with
respect to such employees' relationship with such entities) which
if maintained or administered in or otherwise subject to the laws
of the United States would constitute a Pension Plan, a
Multiemployer Plan or Welfare Plan.
(vii) MULTIEMPLOYER PLAN. "Multiemployer Plan" shall
mean any "multiemployer plan," as defined in Section 4001(a)(3)
of ERISA, under which Showboat or any ERISA Affiliate may incur
any liability.
18
(viii) PENSION PLAN. "Pension Plan" shall mean any
"employee pension benefit plan" as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan) under which Showboat or
any ERISA Affiliate may incur any liability.
(ix) WELFARE PLAN. "Welfare Plan" shall mean any
"employee welfare benefit plan" as defined in Section 3(1) of
ERISA, under which Showboat or any ERISA Affiliate may incur any
liability.
(b) DISCLOSURE; DELIVERY OF COPIES OF RELEVANT DOCUMENTS
AND OTHER INFORMATION. Section 3.14 of the Showboat Disclosure
Schedule contains a complete list of the Employee Plans. Each
copy of each (i) an Employee Plan (other than any Multiemployer
Plan) and, if applicable, related trust agreement, and any
amendment thereto, (ii) a determination letter issued by the IRS
or analogous ruling under foreign law with respect to each
Employee Plan, (iii) an Annual Report on Form 5500 Series
required to be filed with any governmental agency for each
Pension Plan and Welfare Plan, and (iv) an actuarial report
prepared for a Pension Plan, in each case delivered by Showboat
to Xxxxxx'x is a true and complete copy of such documents.
(c) REPRESENTATIONS. Except as set forth in Section
3.14(c) of the Showboat Disclosure Schedule:
(i) EMPLOYEE PLANS
(A)No Pension Plan is subject to Title IV of
ERISA or the minimum funding requirements of Section 412 of the
Code. Each Pension Plan and each related trust that is intended
to qualify under the provisions of Code Section 401(a) and 501(a)
has so qualified during the period from its adoption to date.
(B)Each Employee Plan has been maintained in
material compliance with its terms and, both as to form and in
operation, with the requirements prescribed by any and all
applicable laws, including without limitation ERISA and the Code
to the extent applicable, except for such non-compliance which
would not be reasonably likely to have a Showboat Material
Adverse Effect.
(C)Section 3.14 (c) of the Showboat Disclosure
Schedule sets forth Showboat's good faith estimate as of
September 30, 1997 of the accrued liability under Showboat's
401(k) Restoration Plan, which has been accrued on Showboat's
financial statements in accordance with GAAP. Section 5.13(e) of
the Showboat Disclosure Schedule also sets forth the actuarial
assumptions and reflects the methodologies used by Showboat to
determine participants' benefits and Showboat's liabilities under
Showboat's Supplemental Executive Retirement Plan and Showboat's
good faith estimate of Showboat's projected liabilities under the
Supplemental Executive Retirement Plan as of May 31, 1998,
assuming enhancements of such benefits pursuant to Showboat's
change in control severance agreements and assuming that the
employment of all participants who are parties to such agreements
is terminated without cause on May 1, 1998 immediately after a
change in control of Showboat.
19
(ii) MULTIEMPLOYER PLANS
(A)Neither Showboat nor any ERISA Affiliate has,
at any time, withdrawn from a Multiemployer Plan in a "complete
withdrawal" or a "partial withdrawal" as defined in Sections 4203
and 4205 of ERISA, respectively, so as to result in a liability,
contingent or otherwise (including without limitation the
obligations pursuant to an agreement entered into in accordance
with Section 4204 of ERISA), of Showboat or any ERISA Affiliate
which has not been fully satisfied. Neither Showboat nor any
ERISA Affiliate has engaged in, or is a successor or parent
corporation to an entity that has engaged in, a transaction
described in Section 4212(c) of ERISA.
(B)To the best of Showboat's knowledge, with
respect to each Multiemployer Plan: (1) no such Multiemployer
Plan has been terminated or is in reorganization under ERISA so
as to result, directly or indirectly, in any liability,
contingent or otherwise, of Showboat or any ERISA Affiliate under
Title IV of ERISA; and (2) no proceeding has been initiated by
any person (including the Pension Benefit Guaranty Corporation)
to terminate any Multiemployer Plan.
(iii) WELFARE PLANS. None of Showboat, any ERISA
Affiliate or any Welfare Plan has any present or future
obligation to make any payment to, or with respect to any present
or former employee of Showboat or any ERISA Affiliate pursuant
to, any retiree medical benefit plan, or other retiree Welfare
Plan, except to the extent required by the Code or ERISA.
(iv) DEDUCTIBILITY OF PAYMENTS. There is no contract,
agreement, plan or arrangement covering any employee or former
employee of Showboat (with respect to its relationship with such
entities) that, individually or collectively, provides for the
payment by Showboat of any amount (i) that is not deductible
under Section 404 of the Code or (ii) that is an "excess
parachute payment" pursuant to Section 280G of the Code.
(v) LITIGATION. There is no material action, order,
writ, injunction, judgment or decree outstanding or claim, suit,
litigation, proceeding, arbitral action, governmental audit or
investigation relating to or seeking benefits under any Employee
Plan that is pending against Showboat, any ERISA Affiliate or any
Employee Plan (other than routine claims for benefits).
(vi) NO ACCELERATION OR CREATION OF RIGHTS. Except as
provided in Section 2.3, 5.11 or disclosed in Section 5.13(c) of
the Showboat Disclosure Schedule neither the execution and
delivery of this Agreement by Showboat nor the consummation of
the transactions contemplated hereby will result in the
acceleration or creation of any rights of any current or former
employee of Showboat or any of its Subsidiaries to benefits under
any Employee Plan (including, without limitation, the
acceleration of the vesting or exercisability of any stock
options, the acceleration of the vesting of any restricted stock,
the acceleration of the accrual or vesting of any benefits under
any Pension Plan or the acceleration or creation of any rights
under any severance, parachute or change in control agreement).
20
Section 3.15. COMPLIANCE.
(a) Each of Showboat and its Subsidiaries, and each of
their respective directors (but with respect to non-employee
directors, only to Showboat's best knowledge), officers, persons
performing management functions similar to officers and, to
Showboat's best knowledge, partners hold all permits,
registrations, findings of suitability, licenses, variances,
exemptions, certificates of occupancy, orders and approvals of
all Governmental Entities (including all authorizations under
Environmental Laws, Showboat Gaming Laws, the Merchant Marine Act
of 1920 and the Shipping Act of 1916 and Certificates of
Inspection issued by the U.S. Coast Guard), necessary to conduct
the business and operations of Showboat and each of its
Subsidiaries, each of which is in full force and effect in all
material respects, except for such permits, registrations,
findings of suitability, licenses, variances, exemptions,
certificates of occupancy, orders and approvals the failure of
which to hold would not, individually or in the aggregate, be
reasonably likely to have a Showboat Material Adverse Effect (the
"Showboat Permits") and no event has occurred which permits, or
upon the giving of notice or passage of time or both would
permit, revocation, non-renewal, modification, suspension,
limitation or termination of any Showboat Permit that currently
is in effect the loss of which either individually or in the
aggregate would be reasonably likely to have a Showboat Material
Adverse Effect. Each of Showboat and its Subsidiaries, and each
of their respective directors (but with respect to non-employee
directors, only to Showboat's best knowledge), officers, persons
performing management functions similar to officers and, to
Showboat's best knowledge, partners, are in compliance with the
terms of the Showboat Permits, except for such failures to
comply, which singly or in the aggregate, would not, individually
or in the aggregate, be reasonably likely to have a Showboat
Material Adverse Effect. Except as disclosed in the Showboat SEC
Reports filed prior to the date of this Agreement, the businesses
of Showboat and its Subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental
Entity (including, without limitation, any Showboat Gaming Laws),
except for possible violations which individually or in the
aggregate do not and would not be reasonably likely to have a
Showboat Material Adverse Effect. No investigation or review by
any Governmental Entity with respect to Showboat or any of its
Subsidiaries is pending, or, to the best knowledge of Showboat,
threatened, nor has any Governmental Entity indicated any
intention to conduct the same, other than those the outcome of
which would not, individually or in the aggregate, be reasonably
likely to have a Showboat Material Adverse Effect.
(b) The term "Showboat Gaming Laws" means any Federal,
state, local or foreign statute, ordinance, rule, regulation,
permit, consent, registration, finding of suitability, approval,
license, judgment, order, decree, injunction or other
authorization, including any condition or limitation placed
thereon, governing or relating to the current or contemplated
casino and gaming activities and operations of Showboat or any of
its Subsidiaries, including, without limitation, the Nevada
Gaming Control Act and the rules and regulations promulgated
thereunder, the City of Las Vegas Ordinances, the Xxxxx County,
Nevada Code and the rules and regulations promulgated thereunder,
the Riverboat Gambling Act and the rules and regulations of the
Indiana Gaming Commission, the codes, rules and regulations
promulgated thereunder, the New Jersey Casino Control Act and the
rules and regulations promulgated thereunder, the Casino Control
Act 1992 (New South Wales) and the rules and regulations
promulgated thereunder, the Indian Gaming Regulatory Act of 1988
and the rules and regulations promulgated thereunder, any state-
21
tribal gaming compact and any applicable state gaming law and any
federal or state laws relating to currency transactions.
(c) Except as disclosed in Section 3.15(c) of the Showboat
Disclosure Schedule, neither Showboat nor any of its
Subsidiaries, nor any director (but with respect to non-employee
directors, only to Showboat's best knowledge), officer, key
employee or, to Showboat's best knowledge, partners of Showboat
or any of its Subsidiaries has received any written claim,
demand, notice, complaint, court order or administrative order
from any Governmental Entity in the past three years under, or
relating to any violation or possible violation of any Showboat
Gaming Laws which did or would be reasonably likely to result in
fines or penalties of $50,000 or more. To Showboat's best
knowledge, there are no facts, which if known to the regulators
under the Showboat Gaming Laws could reasonably be expected to
result in the revocation, limitation or suspension of a license,
finding of suitability, registration, permit or approval of it or
them, or of any officer, director, other person performing
management functions similar to an officer or partner, under any
Showboat Gaming Laws. Neither Showboat nor any of its
Subsidiaries has suffered a suspension or revocation of any
material license, finding of suitability, registration, permit or
approval held under the Showboat Gaming Laws.
(d) For purposes of this Section 3.15, Sydney Harbour and
each of its Subsidiaries shall be considered a "Subsidiary" of
Showboat such that the representations contained in this Section
3.15 shall apply to Sydney Harbour, except that all such
representations shall be limited to Showboat's best knowledge.
Section 3.16. PROXY STATEMENT.
None of the information with respect to Showboat or its
Subsidiaries to be included or incorporated by reference in the
proxy statement to be sent to the stockholders of Showboat in
connection with the meeting of Showboat's stockholders to
consider the Agreement and Merger (the "Proxy Statement"), or any
amendment thereof or supplement thereto, will, on the date filed
with the SEC, at the time of the mailing of the Proxy Statement
or any amendment or supplement, at the time of the meeting of
Showboat's stockholders (the "Special Meeting") and at the
Effective Time, 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
Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and
regulations thereunder; provided, however, that Showboat makes no
representation with respect to any information supplied or to be
supplied by Xxxxxx'x or Merger Sub for inclusion in the Proxy
Statement or any amendment thereof or supplement thereto.
Section 3.17. LABOR MATTERS.
Except as disclosed in Section 3.17 of the Showboat
Disclosure Schedule or as would not have a Showboat Material
Adverse Effect, (i) there are no controversies pending or, to the
best knowledge of Showboat, threatened between Showboat or any of
its Subsidiaries and any of their respective employees; (ii) to
the best knowledge of Showboat, there are no activities or
proceedings of any labor union to organize any non-unionized
employees; (iii) neither Showboat nor any of its Subsidiaries has
breached or otherwise failed to comply with any provision of any
collective bargaining agreement or contract and there are no
grievances outstanding against Showboat or any of its
Subsidiaries under any
22
such agreement or contract; (iv) there are no unfair labor
practice complaints pending against Showboat or any of its
Subsidiaries before the National Labor Relations Board, or any
similar foreign labor relations governmental bodies, or any
current union representation questions involving employees of
Showboat or any of its Subsidiaries; and (v) there is no strike,
slowdown, work stoppage or lockout, or, to the best knowledge of
Showboat, threat thereof, by or with respect to any employees of
Showboat or any of its Subsidiaries. Showboat and its
Subsidiaries are not parties to any collective bargaining
agreements, except for collective bargaining agreements disclosed
in Section 3.17 of the Showboat Disclosure Schedule.
Section 3.18. INSURANCE.
Showboat has provided to Xxxxxx'x accurate and complete
copies of all material fire and casualty, general liability,
business interruption, product liability, and sprinkler and water
damage insurance policies maintained by Showboat or any of its
Subsidiaries. All such insurance policies are with reputable
insurance carriers and provide coverage as is reasonably prudent
to cover normal risks incident to the business of Showboat and
its Subsidiaries and their respective properties and assets.
Section 3.19. OPINION OF FINANCIAL ADVISOR.
Showboat has received the opinion of Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, dated the date of this
Agreement, to the effect that the Merger Consideration is fair to
the holders of Showboat Common Stock from a financial point of
view.
Section 3.20. NO EXISTING DISCUSSIONS.
As of the date hereof, Showboat is not engaged, directly or
indirectly, in any discussions or negotiations with any other
party with respect to an Acquisition Proposal (as defined in
Section 5.3).
Section 3.21. Showboat Rights Plan; Nevada Takeover
Statute.
(a) Under the terms of the Showboat Rights Plan, neither
the execution of this Agreement, the Stockholder Support
Agreements, nor the transactions contemplated hereby or thereby,
will cause a Distribution Date to occur or cause the rights
issued pursuant to the Showboat Rights Plan to become
exercisable, and all such rights shall become non-exercisable at
the Effective Time.
(b) As of the date hereof and at all times on or prior to
the Effective Date, the restrictions of Sections 78.378 through
78.3793 of the NRS are, and shall be, inapplicable to the Merger,
and the transactions contemplated by this Agreement.
Section 3.22. BROKERS.
None of Showboat, any of its Subsidiaries, or any of their
respective officers, directors or employees have employed any
broker, financial advisor or finder or incurred any liability for
any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement, except that
Showboat has retained Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation as its financial advisor, the arrangements with which
have been disclosed in writing to Xxxxxx'x and Merger Sub prior
to, and will not be modified subsequent to, the date of this
Agreement.
Section 3.23. TRANSACTIONS WITH AFFILIATES.
Other than the transactions contemplated by this Agreement
and except to the extent disclosed in the Showboat SEC Documents
or as
23
disclosed in Section 3.23 of the Showboat Disclosure Schedule,
from January 1, 1995 through the date of this Agreement, there
have been no transactions, agreements, arrangements or
understandings between Showboat or any of its Subsidiaries, on
the one hand, and Showboat's affiliates or other persons, on the
other hand, that would be required to be disclosed under Item 404
of Regulation S-K under the Securities Act.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF XXXXXX'X AND MERGER SUB
Xxxxxx'x and Merger Sub represent and warrant to Showboat
that the statements contained in this Article IV are true and
correct except as set forth herein and in the disclosure schedule
delivered by Xxxxxx'x and Merger Sub to Showboat on or before the
date of this Agreement (the "Xxxxxx'x Disclosure Schedule"). The
Xxxxxx'x Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained
in this Article IV and the disclosure in any paragraph shall
qualify other paragraphs in this Article IV only to the extent
that it is reasonable from a reading of such disclosure that it
also qualifies or applies to such other paragraphs.
Section 4.1. ORGANIZATION.
Each of Xxxxxx'x and its Subsidiaries is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite corporate,
partnership and limited liability company power and authority to
carry on its business as now being conducted and as proposed to
be conducted. Each of Xxxxxx'x and its Subsidiaries is duly
qualified or licensed to do business and is in good standing in
each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to
be so qualified, licensed or in good standing would not have a
material adverse effect on the business, properties, condition
(financial or otherwise), results of operations or prospects of
Xxxxxx'x and its Subsidiaries, taken as a whole (a "Xxxxxx'x
Material Adverse Effect"). Xxxxxx'x has delivered to Showboat
true and correct copy of the Certificate of Incorporation and
Bylaws of each of Xxxxxx'x and Merger Sub, in each case as
amended to the date of this Agreement.
Section 4.2. Authority; No Conflict; Required Filings and
Consents.
(a) Xxxxxx'x and Merger Sub have all requisite corporate
power and authority to enter into this Agreement and the
Stockholder Support Agreements to which each is a party and to
consummate the transactions contemplated by this Agreement and
the Stockholder Support Agreements. The execution and delivery
of this Agreement and the Stockholder Support Agreements and the
consummation of the transactions contemplated by this Agreement
and the Stockholder Support Agreements by Xxxxxx'x and Merger Sub
have been duly authorized by all necessary corporate action on
the part of Xxxxxx'x and Merger Sub. This Agreement and the
Stockholder Support Agreements have been duly executed and
delivered by Xxxxxx'x and Merger Sub (as applicable) and
constitute the valid and binding obligations of Xxxxxx'x and
Merger Sub (as applicable), enforceable against each of them in
accordance with their terms.
24
(b) Other than or as disclosed in Section 4.2(b) of the
Xxxxxx'x Disclosure Schedule, the execution and delivery of this
Agreement and the Stockholder Support Agreements by Xxxxxx'x and
Merger Sub (as applicable) does not, and the consummation of the
transactions contemplated by this Agreement and the Stockholder
Support Agreements will not, (i) conflict with, or result in any
violation or breach of, any provision of the Certificate of
Incorporation or Bylaws of Xxxxxx'x or the comparable charter or
organizational documents of any of its Subsidiaries, (ii) result
in any violation or breach of, or constitute (with or without
notice or lapse of time, or both) a default (or give rise to a
right of termination, cancellation or acceleration of any
obligation or loss of any material benefit) under, or require a
consent or waiver under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which
Xxxxxx'x or any of its Subsidiaries is a party or by which any of
them or any of their properties or assets may be bound, or
(iii) subject to the governmental filings and other matters
referred to in Section 4.2(c), conflict with or violate any
permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to
Xxxxxx'x or any of its Subsidiaries or any of its or their
properties or assets, except in the case of clauses (ii) and
(iii) for any such conflicts, violations, defaults, terminations,
cancellations or accelerations which (x) are not, individually or
in the aggregate, reasonably likely to have a Xxxxxx'x Material
Adverse Effect or (y) would not impair or delay the consummation
of the Merger.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
is required by or with respect to Xxxxxx'x or any of its
Subsidiaries in connection with the execution and delivery of
this Agreement or the consummation of the transactions
contemplated hereby or thereby, except for (i) the filing of the
pre-merger notification report under the HSR Act and any similar
statute, rule or regulation of any Foreign Jurisdiction, (ii)
the filing of the Articles of Merger with respect to the Merger
with the Secretary of State of the State of Nevada, (iii) any
approvals and filing of notices required under the Xxxxxx'x
Gaming Laws (as defined in Section 4.6) or the Showboat Gaming
Laws, (iv) such consents, approvals, orders, authorizations,
permits, filings, or registrations related to, or arising out of,
compliance with statutes, rules or regulations regulating the
consumption, sale or serving of alcoholic beverages, (v) such
consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable
state securities laws and the securities laws of any Foreign
Jurisdiction, (vii) the approvals required from the Australian
Securities Commission (with respect to compliance with the
Australian Corporations Law) and the Australian Foreign
Investment Review Board, (viii) such immaterial filings and
consents as may be required under any environmental health or
safety law or regulation pertaining to any notification,
disclosure or required approval triggered by the Merger or the
transactions contemplated by this Agreement, and (ix) such other
filings, consents, approvals, orders, registrations and
declarations as may be required under the laws of any
jurisdiction in which the Company or any of its Subsidiaries
conducts any business or owns any assets the failure of which to
obtain would not have a Xxxxxx'x Material Adverse Effect.
Section 4.3. PROXY STATEMENT.
None of the information supplied or to be supplied by
Xxxxxx'x or Merger Sub for inclusion in the Proxy Statement and
any amendments thereof or supplements thereto will, on the date
filed with the SEC, at the time of the mailing of the Proxy
Statement or any amendment or supplement thereto to the
stockholders of Showboat, at the time
25
of the Special Meeting and at the Effective Time, 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 made therein, in light of the circumstances under
which they were made, not misleading.
Section 4.4. BROKERS.
None of Xxxxxx'x, any of its Subsidiaries, or any of their
respective officers, directors or employees have employed any
broker, financial advisor or finder or incurred any liability for
any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement, except that
Xxxxxx'x has retained XX Xxxxxxxxxx and Xxxxxx Xxxxxxx & Co. as
financial advisors, the arrangements with which have been
disclosed in writing to Showboat prior to the date hereof.
Section 4.5. FINANCING.
Xxxxxx'x has received and provided to Showboat a letter,
dated December 18, 1997, from Bankers Trust Company. Xxxxxx'x
will have available on the Closing Date sufficient funds to
enable Xxxxxx'x to (i) pay the Merger Consideration, the Option
Settlement Amount and the SAR Settlement Amount and (ii) purchase
any of Showboat's outstanding 9 1/4% First Mortgage Bonds due 2008
and 13% Senior Subordinated Notes due 2009 required to be
purchased pursuant to the change of control provisions contained
in the instruments governing such indebtedness.
Section 4.6. Compliance with Gaming Laws.
(a) Each of Xxxxxx'x and its Subsidiaries, and each of
their respective directors (but with respect to non-employee
directors, only to Xxxxxx'x' best knowledge), officers, persons
performing management functions similar to officers and, to
Xxxxxx'x' best knowledge, partners, hold all permits,
registrations, findings of suitability, licenses, variances,
exemptions, certificates of occupancy, orders and approvals of
all Governmental Entities under the Xxxxxx'x Gaming Laws
necessary to conduct the business and operations of Xxxxxx'x and
each of its Subsidiaries, each of which is in full force and
effect in all material respects, except for such permits,
registrations, findings of suitability, licenses, variances,
exemptions, certificates of occupancy, orders and approvals the
failure of which to hold would not, individually or in the
aggregate, be reasonably likely to have a Xxxxxx'x Material
Adverse Effect (the "Xxxxxx'x Permits") and no event has occurred
which permits, or upon the giving of notice or passage of time or
both would permit, revocation, non-renewal, modification,
suspension, limitation or termination of any Xxxxxx'x Permit that
currently is in effect the loss of which either individually or
in the aggregate would be reasonably likely to have a Xxxxxx'x
Material Adverse Effect. Each of Xxxxxx'x and its Subsidiaries,
and each of their respective directors (but with respect to non-
employee directors, only to Xxxxxx'x' best knowledge), officers,
persons performing management functions similar to officers and,
to Xxxxxx'x' best knowledge, partners, are in compliance with the
terms of the Xxxxxx'x Permits, except for such failures to
comply, which singly or in the aggregate, would not, individually
or in the aggregate, be reasonably likely to have a Xxxxxx'x
Material Adverse Effect. Except as disclosed in the forms,
reports, and documents required to be filed by Xxxxxx'x with the
SEC since January 1, 1995 and filed prior to the date of this
Agreement, the businesses of Xxxxxx'x and its Subsidiaries are
not being conducted in violation of any Xxxxxx'x Gaming Law,
except for possible violations which individually or in the
aggregate do not and would not be reasonably likely to have a
Xxxxxx'x Material Adverse Effect. No investigation or review by
26
any Governmental Entity under any Xxxxxx'x Gaming Law with
respect to Xxxxxx'x or any of its Subsidiaries is pending, or, to
the best knowledge of Xxxxxx'x, threatened, nor has any
Governmental Entity indicated any intention to conduct the same,
other than those the outcome of which would not, individually or
in the aggregate, be reasonably likely to have a Xxxxxx'x
Material Adverse Effect.
(b) The term "Xxxxxx'x Gaming Laws" means any Federal,
state, local or foreign statute, ordinance, rule, regulation,
permit, consent, registration, finding of suitability, approval,
license, judgment, order, decree, injunction or other
authorization, including any condition or limitation placed
thereon, governing or relating to the current or contemplated
casino and gaming activities and operations of Xxxxxx'x or any of
its Subsidiaries, including, without limitation, the Nevada
Gaming Control Act and the rules and regulations promulgated
thereunder, the Xxxxx County, Nevada Code and the rules and
regulations promulgated thereunder, the Xxxxxxx County, Nevada
Code and the rules and regulations promulgated thereunder, the
Louisiana Economic Development and Gaming Act and the rules and
regulations promulgated thereunder, the Louisiana Riverboat
Economic Gaming Control Act and the rules and regulations
promulgated thereunder, the New Jersey Casino Control Act and the
rules and regulations promulgated thereunder, the Casino Control
Act of 1990 (New Zealand) and the rules and regulations
promulgated thereunder, the Illinois Riverboat Gambling Act and
the rules and regulations promulgated thereunder, the Mississippi
Gaming Control Act and the rules and regulations promulgated
thereunder, the Missouri Riverboat Gambling Act and the rules and
regulations promulgated thereunder, the Indian Gaming Regulatory
Act of 1988 and the rules and regulations promulgated thereunder,
any state-tribal gaming compact and any applicable state gaming
law and any federal or state laws relating to currency
transactions.
(c) Except as disclosed in Section 4.6(c) of the Xxxxxx'x
Disclosure Schedule, neither Xxxxxx'x nor any of its
Subsidiaries, nor any director (but with respect to non-employee
directors, only to Xxxxxx'x' best knowledge), officer, key
employee or, to Xxxxxx'x' best knowledge, partners of Xxxxxx'x or
any of its Subsidiaries has received any written claim, demand,
notice, complaint, court order or administrative order from any
Governmental Entity in the past three years under, or relating to
any violation or possible violation of any Xxxxxx'x Gaming Laws
which did or would be reasonably likely to result in fines or
penalties of $50,000 or more. To Xxxxxx'x' best knowledge, there
are no facts, which if known to the regulators under the Xxxxxx'x
Gaming Laws could reasonably be expected to result in the
revocation, limitation or suspension of a license, finding of
suitability, registration, permit or approval of it or them, or
of any officer, director, person performing management functions
similar to an officer or partner, under any Xxxxxx'x Gaming Laws.
Neither Xxxxxx'x nor any of its Subsidiaries has suffered a
suspension or revocation of any material license , finding of
suitability, registration, permit or approval held under the
Xxxxxx'x Gaming Laws.
27
ARTICLE V.
COVENANTS
Section 5.1. CONDUCT OF BUSINESS OF SHOWBOAT.
During the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement
or the Effective Time, Showboat agrees as to itself and each of
its Subsidiaries (except to the extent that Xxxxxx'x shall
otherwise consent in writing) to carry on its business in the
usual, regular and ordinary course in substantially the same
manner as previously conducted, to pay its debts and taxes when
due subject to good faith disputes over such debts or taxes, to
pay or perform its other obligations when due, and, to the extent
consistent with such business, use all reasonable efforts
consistent with past practices and policies to preserve intact
its present business organization, keep available the services of
its present officers and key employees and preserve its
relationships with customers, suppliers, distributors, and others
having business dealings with it. Without limiting the
generality of the foregoing and except as expressly contemplated
by this Agreement, except as disclosed on Section 5.1 of the
Showboat Disclosure Schedule, during the period from the date of
this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, without the
written consent of Xxxxxx'x, Showboat shall not and shall not
permit any of its Subsidiaries to:
(i) adopt any amendment to its Articles of
Incorporation or Bylaws or comparable charter or organizational
documents;
(ii) (A) issue, pledge or sell, or authorize the
issuance, pledge or sale of additional shares of capital stock of
any class (other than upon exercise of Options outstanding on the
date of this Agreement), or securities convertible into capital
stock of any class, or any rights, warrants or options to acquire
any convertible securities or capital stock, or any other
securities in respect of, in lieu of, or in substitution for,
shares of Showboat Common Stock outstanding on the date hereof or
(B) amend, waive or otherwise modify any of the terms of any
option, warrant or stock option plan of Showboat or any of its
Subsidiaries, including without limitation, the Options or the
Showboat Stock Plans;
(iii) declare, set aside or pay any dividend or other
distribution (whether in cash, securities or property or any
combination thereof) in respect of any class or series of its
capital stock other than (A) between any wholly-owned Subsidiary
of Showboat and Showboat or any other wholly-owned Subsidiary of
Showboat or (B) regular quarterly dividends on shares of Showboat
Common Stock not to exceed $.025 per share;
(iv) split, combine, subdivide, reclassify or redeem,
purchase or otherwise acquire, or propose to redeem or purchase
or otherwise acquire, any shares of its capital stock, or any of
its other securities;
(v) increase the compensation or fringe benefits
payable or to become payable to its directors, officers or
employees (whether from Showboat or any of its Subsidiaries), or
pay any benefit not required by any existing plan or arrangement
(including, without limitation, the granting of stock options,
stock appreciation rights, shares of restricted
28
stock or performance units) or grant any severance or termination
pay to (except pursuant to existing agreements or policies, which
shall be interpreted and implemented in a manner consistent with
past practice), or enter into any employment or severance
agreement with, any director, officer or employee of Showboat or
any of its Subsidiaries or establish, adopt, enter into, or amend
any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension,
retirement, savings, welfare, deferred compensation, employment,
termination, severance or other employee benefit plan, agreement,
trust, fund, policy or arrangement for the benefit or welfare of
any directors, officers or current or former employees, including
any Benefit Arrangement, Pension Plan or Welfare Plan, except (i)
to the extent required by applicable law or regulation, (ii)
pursuant to any collective bargaining agreements or Employee Plan
as in effect on the date of this Agreement consistent with past
practices or (iii) for salary increases in the ordinary course of
business consistent with past practice to employees other than
executive officers of Showboat;
(vi) (A) sell, pledge, lease, dispose of, grant,
encumber, or otherwise authorize the sale, pledge, disposition,
grant or encumbrance of any of the properties or assets of
Showboat or any of its Subsidiaries, except for (1) sales of
assets in the ordinary course of business in connection with
Showboat's gaming operations in an amount not to exceed $500,000
individually or $2,000,000 in the aggregate or (2) other sales
which, individually do not exceed $100,000 or which, in the
aggregate, do not exceed $250,000 or (B) acquire (including,
without limitation, by merger, consolidation, lease or
acquisition of stock or assets) any corporation, partnership,
other business organization or any division thereof (or a
substantial portion of the assets thereof) or any other assets,
except for (1) acquisitions of assets in the ordinary course of
business in connection with Showboat's gaming operations in an
amount individually not to exceed $500,000 or (2) other
acquisitions which, individually, do not exceed $100,000 or
which, in the aggregate, do not exceed $250,000;
(vii) (A) incur, assume or pre-pay any long-term debt
or incur or assume any short-term debt, except that Showboat and
its Subsidiaries may incur or pre-pay debt in the ordinary course
of business consistent with past practice under existing lines of
credit, (B) assume, guarantee, endorse or otherwise become liable
or responsible (whether directly, contingently or otherwise) for
the obligations of any other person except in the ordinary course
of business consistent with past practice, or (C) make any loans,
advances or capital contributions to, or investments in, any
other person except in the ordinary course of business consistent
with past practice (including advances to employees) and except
for loans, advances, capital contributions or investments between
any wholly-owned Subsidiary of Showboat and Showboat or another
wholly-owned Subsidiary of Showboat;
(viii) authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial liquidation or
dissolution of Showboat or any of its Subsidiaries;
(ix) make or rescind any material express or deemed
election relating to Taxes, settle or compromise any material
claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, or except
as may be required by applicable law, make any change to any of
its material methods of reporting income or deductions for
federal income tax purposes from those employed in the
preparation of its federal income tax
29
return for the taxable year ending December 31, 1996, provided,
however, that Xxxxxx'x shall not unreasonably withheld its
consent to any such matter that would preclude Showboat from
timely filing its Tax Returns or timely paying its Tax
Liabilities;
(x) pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted,
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or
reserved against in the consolidated financial statements of
Showboat;
(xi) other than in the ordinary course of business and
consistent with past practice, waive any rights of substantial
value or make any payment, direct or indirect, of any material
liability of Showboat or of any of its Subsidiaries before the
same comes due in accordance with its terms;
(xii) fail to maintain its existing insurance coverage
of all types in effect or, in the event any such coverage shall
be terminated or lapse, to the extent available at reasonable
cost, procure substantially similar substitute insurance policies
which in all material respects are in at least such amounts and
against such risks as are currently covered by such policies;
(xiii) enter into any collective bargaining agreement
or any successor collective bargaining agreement other than
collective bargaining agreements covering employees at the Las
Vegas Showboat on terms consistent with those agreed to by the
majority of casinos in Downtown Las Vegas;
(xiv) take any action, other than reasonable and usual
actions in the ordinary course of business and consistent with
past practice, with respect to accounting policies or procedures,
unless required by GAAP or the SEC;
(xv) modify, amend or terminate any of the Showboat
Material Contracts or waive, release or assign any material
rights or claims, except in the ordinary course of business
consistent with past practice;
(xvi) take, or agree to commit to take, any action that
would make any representation or warranty of Showboat contained
herein inaccurate in any respect at, or as of any time prior to,
the Effective Time;
(xvii) engage in any transaction with, or enter into
any agreement, arrangement, or understanding with, directly or
indirectly, any of Showboat's affiliates which involves the
transfer of consideration or has a financial impact on Showboat,
other than pursuant to such agreements, arrangements, or
understandings existing on the date of this Agreement;
(xviii) close, shut down, or otherwise eliminate any of
the casinos owned or operated by Showboat or any of its
Subsidiaries, except for such closures, shutdowns or eliminations
which are (i) required by action, order, writ, injunction,
judgment or decree or otherwise required by law, or (ii) due to
acts of God or other force majeure events; or
30
(xix) enter into an agreement, contract, commitment or
arrangement to do any of the foregoing, or to authorize,
recommend, propose or announce an intention to do any of the
foregoing.
Section 5.2. COOPERATION; NOTICE; CURE.
Subject to compliance with applicable law, from the date
hereof until the Effective Time, each of Xxxxxx'x and Showboat
shall confer on a regular and frequent basis with one or more
representatives of the other party to report on the general
status of ongoing operations. Each of Xxxxxx'x and Showboat
shall promptly notify the other in writing of, and will use all
commercially reasonable efforts to cure before the Closing Date,
any event, transaction or circumstance, as soon as practical
after it becomes known to such party, that causes or will cause
any covenant or agreement of Xxxxxx'x or Showboat under this
Agreement to be breached in any material respect or that renders
or will render untrue in any material respect any representation
or warranty of Xxxxxx'x or Showboat contained in this Agreement.
No notice given pursuant to this paragraph shall have any effect
on the representations, warranties, covenants or agreements
contained in this Agreement for purposes of determining
satisfaction of any condition contained herein.
Section 5.3. NO SOLICITATION.
(a) Showboat shall not, directly or indirectly, through any
officer, director, employee, financial advisor, representative or
agent of such party (i) solicit, initiate, or encourage any
inquiries or proposals that constitute, or could reasonably be
expected to lead to, a proposal or offer for a merger,
consolidation, business combination, sale of substantial assets,
sale of shares of capital stock (including without limitation by
way of a tender offer) or similar transaction involving Showboat
or any of its Subsidiaries, other than the transactions
contemplated by this Agreement (any of the foregoing inquiries or
proposals being referred to in this Agreement as an "Acquisition
Proposal"), (ii) engage in negotiations or discussions with any
person (or group of persons) other than Xxxxxx'x or its
respective affiliates (a "Third Party") concerning, or provide
any non-public information to any person or entity relating to,
any Acquisition Proposal, or (iii) agree to or recommend any
Acquisition Proposal; provided, however, that nothing contained
in this Agreement shall prevent Showboat or its Board of
Directors from (A) furnishing non-public information to, or
entering into discussions or negotiations with, any person or
entity in connection with an unsolicited bona fide written
proposal for an Alternative Transaction (as defined below) by
such person or entity or modifying or withdrawing its
recommendation with respect to the transactions contemplated
hereby or recommending an unsolicited bona fide written proposal
for an Alternative Transaction to the stockholders of Showboat,
if and only to the extent that (1) a Third Party has made a
written proposal to the Board of Directors of Showboat to
consummate an Alternative Transaction, which proposal identifies
a price or range of values to be paid for the outstanding
securities or substantially all of the assets of Showboat,
(2) the Board of Directors of Showboat believes in good faith,
after consultation with its financial advisor, that such
Alternative Transaction is reasonably capable of being completed
on the terms proposed and would, if consummated, result in a
transaction more favorable to the stockholders of such party than
the transaction contemplated by this Agreement (a "Superior
Proposal"), (3) the Board of Directors of Showboat determines in
good faith, based on the advice of outside legal counsel, that
the failure to take such action would be inconsistent with its
fiduciary duties to Showboat's stockholders under
31
applicable law, and (4) prior to furnishing such non-public
information to, or entering into discussions or negotiations
with, such person or entity, such Board of Directors receives
from such person or entity an executed confidentiality and
standstill agreement with material terms no less favorable to
such party than those contained in the Confidentiality Agreements
dated September 16, 1997 between Xxxxxx'x and Showboat (the
"Confidentiality Agreements"); or (B) complying with Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition
Proposal. Showboat agrees not to release any Third Party from,
or waive any provision of, any standstill agreement to which it
is a party or any confidentiality agreement between it and
another person who has made, or who may reasonably be considered
likely to make, an Acquisition Proposal, unless the Board of
Directors of Showboat determines in good faith, based on the
written advice of outside legal counsel, that the failure to take
such action would be inconsistent with its fiduciary duties to
Showboat's stockholders under applicable law.
(b) Showboat shall notify Xxxxxx'x immediately after
receipt by Showboat or (or any of their advisors) of any
Acquisition Proposal or any request for non-public information in
connection with an Acquisition Proposal or for access to the
properties, books or records of such party by any person or
entity that informs such party that it is considering making, or
has made, an Acquisition Proposal. Such notice shall be made
orally and in writing and shall indicate the identity of the
offeror and the terms and conditions of such proposal, inquiry or
contact. Notwithstanding the foregoing, Showboat shall not
accept or enter into any agreement concerning a Superior Proposal
for a period of at least two business days after Xxxxxx'x'
receipt of the notification of the terms thereof pursuant the
second preceding sentence, during which period Xxxxxx'x shall be
afforded the opportunity to match the terms and conditions
contained in such Superior Proposal.
(c) As used in this Agreement, "Alternative Transaction"
means (i) a transaction pursuant to which any Third Party
acquires more than 30% of the outstanding shares of Showboat
Common Stock, pursuant to a tender offer or exchange offer or
otherwise, (ii) a merger or other business combination involving
Showboat pursuant to which any Third Party (or the stockholders
of a Third Party) acquires more than 30% of the outstanding
shares of Showboat Common Stock, as the case may be, or the
entity surviving such merger or business combination, or
(iii) any other transaction pursuant to which any Third Party
acquires control of assets (including for this purpose the
outstanding equity securities of Subsidiaries of Showboat, and
the entity surviving any merger or business combination including
any of them) of Showboat having a fair market value (as
determined by the Board of Directors of Showboat, in good faith)
equal to more than 30% of the fair market value of all the assets
of Showboat, and its Subsidiaries, taken as a whole, immediately
prior to such transaction.
(d) Nothing contained in this Section 5.3 is intended to or
shall limit in any respect Showboat's ability to solicit,
negotiate and consummate any transaction permitted by Section
5.1(vi) of this Agreement or in Section 5.1 of the Seller
Disclosure Schedule.
Section 5.4. PROXY STATEMENT.
(a) As promptly as practical after the execution of this
Agreement, Showboat shall prepare and file with the SEC the Proxy
Statement under the Exchange Act, and shall use
32
reasonable efforts to have the Proxy Statement cleared by the SEC
as soon after such filing as practical. Xxxxxx'x, Merger Sub and
Showboat shall cooperate with each other in the preparation of
the Proxy Statement, and Showboat shall notify Xxxxxx'x of the
receipt of any comments of the SEC with respect to the Proxy
Statement and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall
provide to Xxxxxx'x promptly copies of all correspondence between
Showboat or any representative of Showboat and the SEC. Showboat
shall give Xxxxxx'x and its counsel the opportunity to review the
Proxy Statement prior to its being filed with the SEC and shall
give Xxxxxx'x and its counsel the opportunity to review all
amendments and supplements to the Proxy Statement and all
responses to requests for additional information and replies to
comments prior to their being filed with, or sent to, the SEC.
Each of Showboat, Xxxxxx'x and Merger Sub agrees to use all
reasonable efforts, after consultation with the other parties
hereto, to respond promptly to all such comments of and requests
by the SEC and to cause the Proxy Statement and all required
amendments and supplements thereto to be mailed to the holders of
shares of Showboat Common Stock entitled to vote at the Special
Meeting at the earliest practicable time.
(b) Subject to the provisions of Section 5.3, the Proxy
Statement shall include the recommendation of the Board of
Directors of Showboat in favor of adoption of this Agreement and
the Merger; provided that the Board of Directors of Showboat may
modify or withdraw such recommendation if Showboat's Board of
Directors believes in good faith, based on the advice of outside
legal counsel, that the failure to modify or withdraw such
recommendation would be inconsistent with its fiduciary duties to
Showboat's stockholders under applicable law.
Section 5.5. SPECIAL MEETING.
Showboat shall call a meeting of its stockholders to be held
as promptly as practicable for the purpose of voting upon this
Agreement and the Merger. Subject to Sections 5.3 and 5.4,
Showboat shall, through its Board of Directors, recommend to its
stockholders adoption of this Agreement and approval of such
matters and shall use its best efforts to hold such meeting as
soon as practicable after the date hereof. Showboat shall use
all reasonable efforts to solicit from its stockholders proxies
in favor of such matters unless doing so would be inconsistent
with the Showboat Board of Directors' fiduciary duties to its
stockholders under applicable law based on the advice of outside
legal counsel.
Section 5.6. ACCESS TO INFORMATION.
Upon reasonable notice, Showboat shall (and shall cause its
Subsidiaries to) afford to the officers, employees, accountants,
counsel and other representatives of Xxxxxx'x, access, during
normal business hours during the period prior to the Effective
Time, to all its personnel, properties, books, contracts,
commitments and records and, during such period, Showboat shall,
and shall cause its Subsidiaries to, furnish promptly to the
other (a) copies of monthly financial reports and development
reports, (b) a copy of each report, schedule, registration
statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws
and (c) all other information concerning its business, properties
and personnel as Xxxxxx'x may reasonably request. Xxxxxx'x will
hold any such information furnished to it by Showboat which is
nonpublic in confidence in accordance with the Confidentiality
Agreement binding Xxxxxx'x. No information or knowledge obtained
in any investigation pursuant to this Section 5.6 shall affect or
be deemed to modify any representation or warranty contained in
this Agreement or the conditions to the obligations of the
parties to consummate the Merger. Paragraph 7 of the
Confidentiality Agreement binding
33
Xxxxxx'x shall be terminated and be without effect upon any
termination of this Agreement pursuant to Sections 7.1(e) or
7.1(f).
Section 5.7. GOVERNMENTAL APPROVALS.
(a) The parties hereto shall cooperate with each other and
use their best efforts (and, with respect to the Showboat Gaming
Laws and the Xxxxxx'x Gaming Laws, shall use their best efforts
to cause their respective directors and officers to do so) to
promptly prepare and file all necessary documentation, to effect
all applications, notices, petitions and filings, to obtain as
promptly as practicable all permits, registrations, licenses,
findings of suitability, consents, variances, exemptions, orders,
approvals and authorizations of all third parties and
Governmental Entities which are necessary or advisable to
consummate the transactions contemplated by this Agreement,
including, without limitation, all filings required under the HSR
Act, the Australian Corporations Act, the Foreign Acquisitions &
Takeovers Act, the Showboat Gaming laws and the Xxxxxx'x Gaming
Laws ("Governmental Approvals"), and to comply (and, with respect
to the Showboat Gaming Laws and the Xxxxxx'x Gaming Laws, to
cause their respective directors and officers to so comply) with
the terms and conditions of all such Governmental Approvals.
Each of the parties hereto and their respective officers,
directors and affiliates shall use their best efforts to file
within 30 days after the date hereof, and in all events shall
file within 60 days after the date hereof, all required initial
applications and documents in connection with obtaining the
Governmental Approvals (including without limitation under
applicable Showboat Gaming Laws and Xxxxxx'x Gaming Laws) and
shall act reasonably and promptly thereafter in responding to
additional requests in connection therewith. Showboat and
Xxxxxx'x shall have the right to review in advance, and to the
extent practicable each will consult the other on, in each case
subject to applicable laws relating to the exchange of
information, all the information relating to Showboat or the
Xxxxxx'x, as the case may be, and any of their respective
Subsidiaries, directors, officers and stockholders which appear
in any filing made with, or written materials submitted to, any
third party or any Governmental Entity in connection with the
transactions contemplated by this Agreement. Without limiting
the foregoing, each of Showboat and Xxxxxx'x (the "Notifying
Party") will notify the other promptly of the receipt of comments
or requests from Governmental Entities relating to Governmental
Approvals, and will supply the other party with copies of all
correspondence between the Notifying Party or any of its
representatives and Governmental Entities with respect to
Governmental Approvals; provided, however, that it shall not be
required to supply the other party with copies of correspondence
relating to the personal applications of individual applicants
except for evidence of filing.
(b) Showboat and Xxxxxx'x shall promptly advise each other
upon receiving any communication from any Governmental Entity
whose consent or approval is required for consummation of the
transactions contemplated by this Agreement which causes such
party to believe that there is a reasonable likelihood that any
approval needed from a Governmental Entity will not be obtained
or that the receipt of any such approval will be materially
delayed. Showboat and Xxxxxx'x shall take any and all actions
reasonably necessary to vigorously defend, lift, mitigate and
rescind the effect of any litigation or administrative proceeding
adversely affecting this Agreement or the transactions
contemplated hereby or thereby, including, without limitation,
promptly appealing any adverse court or administrative order or
injunction to the extent reasonably necessary for the foregoing
purposes.
34
(c) Notwithstanding the foregoing or any other provision of
this Agreement, Xxxxxx'x shall have no obligation or affirmative
duty under this Section 5.7 to dispose of any of its assets or
properties, disassociate itself from any person or entity, or
agree to do any of the foregoing at any time in the future, in
connection with seeking any Governmental Approval.
Section 5.8. PUBLICITY.
Xxxxxx'x and Showboat shall agree on the form and content of
the initial press release regarding the transactions contemplated
hereby and thereafter shall consult with each other before
issuing, and use all reasonable efforts to agree upon, any press
release or other public statement with respect to any of the
transactions contemplated hereby and shall not issue any such
press release or make any such public statement prior to such
consultation, except as may be required by law.
Section 5.9. INDEMNIFICATION.
(a) From and after the Effective Time, Xxxxxx'x agrees that
it will, and will cause the Surviving Corporation to, indemnify
and hold harmless each present and former director and officer of
Showboat (the "Indemnified Parties"), against any costs or
expenses (including attorneys' fees), judgments, fines, losses,
claims, damages, liabilities or amounts paid in settlement
incurred in connection with any claim, action, suit, proceeding
or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing
or occurring at or prior to the Effective Time, whether asserted
or claimed prior to, at or after the Effective Time, to the
fullest extent that Showboat would have been permitted under
Nevada law and its Articles of Incorporation or Bylaws in effect
on the date hereof to indemnify such Indemnified Party.
(b) For a period of six years after the Effective Time,
Xxxxxx'x shall maintain or shall cause the Surviving Corporation
to maintain in effect a directors' and officers' liability
insurance policy covering those persons who are currently covered
by Showboat's directors' and officers' liability insurance policy
(copies of which have been heretofore delivered by Showboat to
Xxxxxx'x) with coverage in amount and scope at least as favorable
as Showboat's existing coverage; provided that in no event shall
Xxxxxx'x or the Surviving Corporation be required to expend in
the aggregate in excess of 200% of the annual premium currently
paid by Showboat for such coverage; and if such premium would at
any time exceed 200% of the such amount, then Xxxxxx'x or the
Surviving Corporation shall maintain insurance policies which
provide the maximum and best coverage available at an annual
premium equal to 200% of such amount.
(c) The provisions of this Section 5.9 are intended to be
an addition to the rights otherwise available to the current
officers and directors of Showboat by law, charter, statute,
bylaw or agreement, and shall operate for the benefit of, and
shall be enforceable by, each of the Indemnified Parties, their
heirs and their representatives.
Section 5.10. STOCKHOLDER LITIGATION.
Showboat shall give Xxxxxx'x the reasonable opportunity to
participate in the defense of any stockholder litigation against
Showboat and its directors relating to the transactions
contemplated hereby.
35
Section 5.11. EMPLOYMENT ARRANGEMENTS.
Prior to the Closing, Xxxxxx'x shall offer to enter into
employment agreements with X. Xxxx Houssels, III and H. Xxxxxxx
Xxxxx on terms mutually satisfactory to each such person and
Xxxxxx'x. Xxxxxx'x agrees to appoint, or take such actions as
are necessary to nominate and seek the election of X. Xxxx
Houssels, III to its Board of Directors for a three year term in
accordance with his employment agreement. For so long as X. Xxxx
Houssels, III is employed by Xxxxxx'x pursuant to such employment
agreement, Xxxxxx'x shall maintain a "Showboat Division" in its
business.
Section 5.12. FURTHER ASSURANCES AND ACTIONS.
(a) Subject to the terms and conditions herein, each of the
parties hereto agrees to use its reasonable best efforts to take,
or cause to be taken, all appropriate action, and to do, or cause
to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including,
without limitation, (i) using their respective reasonable best
efforts to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental
Entities and parties to contracts with each party hereto as are
necessary for consummation of the transactions contemplated by
this Agreement, and (ii) to fulfill all conditions precedent
applicable to such party pursuant to this Agreement.
(b) In case at any time after the Effective Date any
further action is necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation
with full title to all properties, assets, rights, approvals,
immunities, franchises of any of the parties to the Merger, the
proper officers and/or directors of Xxxxxx'x, Showboat and the
Surviving Corporation shall take all such necessary action.
Section 5.13. EMPLOYEE BENEFITS.
(a) For at least one year following the Effective Time,
Showboat's current employees (other than Showboat's employees
that are covered by collective bargaining agreements) shall be
entitled to participate in either, at Xxxxxx'x' option, (A)
benefits plans and arrangements substantially similar to
Showboat's existing benefit plans and arrangements, (B) Xxxxxx'x'
employee benefit plans and arrangements on substantially the same
basis as similarly-situated employees of Xxxxxx'x (based on such
employees' duties, geographic location, seniority and other
similar factors), or (C) some combination of the benefit plans
and arrangements described in clauses (A) and (B).
(b) Xxxxxx'x shall cause the Surviving Corporation to honor
all written employment, severance and termination agreements
(including change in control provisions) of the employees of
Showboat and its Subsidiaries provided to Xxxxxx'x on or prior to
the date of this Agreement.
(c) For purposes of determining eligibility to participate,
vesting and accrual or entitlement to benefits where length of
service is relevant under any employee benefit plan or
arrangement of Xxxxxx'x or the Surviving Corporation, employees
of Showboat and its Subsidiaries as of the Effective Time shall
receive service credit for service with Showboat and any of its
Subsidiaries to the same extent such service was granted under
the Employee Plans subject to offsets for previously accrued
benefits and no duplication of benefits.
36
(d) Prior to the Effective Time, Showboat shall amend its
Supplemental Executive Retirement Plan to clarify that only the
bonuses payable under the Executive Incentive Plan shall be taken
into account under the Supplemental Executive Retirement Plan.
(e) The Surviving Corporation shall cause the following
actions to be taken with respect to the Showboat's Supplemental
Executive Retirement Plan:
(i) retirement payments to Xxxxxxx Xxxxxx and Xxxxx
Modice shall continue to be paid in the same amount and in the
same manner as such payments are currently being made to such
participants;
(ii) retirement benefits shall be paid to X.X.
Xxxxxxxx, Xx. and Xxxxxxx Xxxxx and such benefits shall be non-
forfeitable for any reason other than death;
(iii) Xxxx Xxxxxx shall be eligible to receive a
retirement benefit under the Supplemental Executive Retirement
Plan notwithstanding his termination of employment, if any, prior
to September 1, 1998; and
(iv) retirement benefits shall be calculated and
payable to participants who have not yet commenced receipt of
such benefits in accordance with the actuarial methods and
assumptions set forth in Section 5.14(e) of the Showboat
Disclosure Schedule.
(f) From and after the Effective Time, Xxxxxx'x and the
Surviving Corporation shall not amend Showboat's Supplemental
Executive Retirement Plan in any manner that adversely affects a
participant's rights with respect to the amount of his or her
accrued benefit as of the Effective Time; provided, however, that
the Surviving Corporation reserves the right, in its sole
discretion, to terminate such plan at any time in accordance with
Section 5.2 thereof.
(g) Nothing in this Agreement is intended to create any
right of employment for any person or to create any obligation
for Xxxxxx'x or the Surviving Corporation to continue any Plan of
Showboat following the Effective Time.
(h) Showboat will use its reasonable best efforts to
cooperate with Xxxxxx'x to minimize the effect of the application
of Section 162(m) of the Code.
Section 5.14. USE OF SHOWBOAT NAME.
Until the third anniversary of the Effective Time, Xxxxxx'x
shall cause the "Showboat" name to be used in connection with its
hotel-casino operations as set forth on Section 5.14 of the
Xxxxxx'x Disclosure Schedule.
ARTICLE VI.
CONDITIONS TO MERGER
Section 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO
EFFECT THE MERGER.
The respective obligations of each party to this Agreement
to effect the Merger shall be subject to the satisfaction or
waiver by each party prior to the Effective Time of the following
conditions:
37
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger
shall have been approved by the stockholders of Showboat in the
manner required under the NRS and the Articles of Incorporation
of Showboat.
(b) NO INJUNCTIONS. No Governmental Entity shall have
enacted, issued, promulgated, enforced or entered any order,
executive order, stay, decree, judgment or injunction or statute,
rule, regulation which is in effect and which has the effect of
making the Merger illegal or otherwise prohibiting consummation
of the Merger.
(c) GOVERNMENTAL APPROVALS. All Governmental Approvals
required to consummate the transactions contemplated hereby shall
have been obtained (including, without limitation, under the
Showboat Gaming Laws and the Xxxxxx'x Gaming Laws), all such
approvals shall remain in full force and effect, all statutory
waiting periods in respect thereof (including, without
limitation, under the HSR Act) shall have expired and no such
approval shall contain any conditions, limitations or
restrictions which Xxxxxx'x reasonably determines in good faith
will have or would reasonably be expected to have a Showboat
Material Adverse Effect or a Xxxxxx'x Material Adverse Effect.
Section 6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF
SHOWBOAT.
The obligation of Showboat to effect the Merger is subject
to the satisfaction of each of the following conditions prior to
the Effective Time, any of which may be waived in writing
exclusively by Showboat:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Xxxxxx'x and Merger Sub set forth in this
Agreement shall be true and correct in all material respects
(except for those qualified as to materiality or a Xxxxxx'x
Material Adverse Effect, which shall be true and correct) as of
the date of this Agreement and, except to the extent such
representations speak as of an earlier date, as of the Closing
Date as though made on and as of the Closing Date, except for
changes contemplated by this Agreement. Showboat shall have
received a certificate signed on behalf of Xxxxxx'x by the chief
executive officer and the chief financial officer of Xxxxxx'x to
such effect.
(b) PERFORMANCE OF OBLIGATIONS OF XXXXXX'X. Xxxxxx'x shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date, and Showboat shall have received a certificate
signed on behalf of Xxxxxx'x by the chief executive officer and
the chief financial officer of Xxxxxx'x to such effect.
(c) THIRD-PARTY CONSENTS. Xxxxxx'x shall have received all
third-party consents and approvals required to be obtained by
Xxxxxx'x in connection with the transactions contemplated hereby
under any contract to which Xxxxxx'x or any of its Subsidiaries
may be a party, except for such third-party consents and
approvals as to which the failure to obtain, individually or in
the aggregate, would not reasonably be expected to impair or
delay the consummation of the Merger.
Section 6.3. ADDITIONAL CONDITIONS TO OBLIGATIONS OF
XXXXXX'X.
The obligations of Xxxxxx'x and Merger Sub to effect the
Merger are subject to the satisfaction of each of the following
conditions prior to the Effective Time, any of which may be
waived in writing exclusively by Xxxxxx'x:
38
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Showboat set forth in this Agreement shall be
true and correct in all material respects (except for those
qualified as to materially or a Showboat Material Adverse Effect,
which shall be true and correct) as of the date of this Agreement
and, except to the extent such representations and warranties
speak as of an earlier date, as of the Closing Date as though
made on and as of the Closing Date, except for changes
contemplated by this Agreement; provided that, with respect to
the truth and correctness of such representations and warranties
as of the Closing Date, the use of the term "Showboat Material
Adverse Effect" in such representations and warranties shall mean
a material adverse effect on the business, properties, condition
(financial or otherwise), results of operations or prospects of
Showboat and its Subsidiaries, taken as a whole. Xxxxxx'x shall
have received a certificate signed on behalf of Showboat by the
chief executive officer and the chief financial officer of
Showboat to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF SHOWBOAT. Showboat shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date; and Xxxxxx'x shall have received a certificate
signed on behalf of Showboat by the chief executive officer and
the chief financial officer of Showboat to such effect.
(c) NO MATERIAL ADVERSE CHANGE. Between the date of this
Agreement and the Effective Date, there shall have been no
material adverse change in the business, properties, assets,
liabilities, operations, condition (financial or otherwise) or
prospects of Showboat and its Subsidiaries, taken as a whole.
(d) THIRD-PARTY CONSENTS. Xxxxxx'x and Showboat shall have
received all third-party consents and approvals required to be
obtained by Xxxxxx'x or Showboat in connection with the
transactions contemplated hereby, under any contract to which
Xxxxxx'x or Showboat (or any of their respective Subsidiaries)
may be a party, except for such third-party consents and
approvals as to which the failure to obtain, either individually
or in the aggregate, would not reasonably be expected to result
in (i) a material adverse change in the business, properties,
assets, liabilities, operations, condition (financial or
otherwise) or prospects of Showboat and its Subsidiaries, taken
as a whole, or (ii) a Xxxxxx'x Material Adverse Effect, as the
case may be.
(e) NO TRIGGER OF SHOWBOAT RIGHTS PLAN. No event shall
have occurred that has or would result in the triggering of any
right or entitlement of stockholders of Showboat under the
Showboat Rights Plan, or will occur as a result of the
consummation of the Merger.
ARTICLE VII.
TERMINATION AND AMENDMENT
Section 7.1. TERMINATION.
This Agreement may be terminated at any time prior to the
Effective Time (with respect to Sections 7.1(b) through 7.1(h),
by written notice by the terminating party to the other party),
whether before or after approval of the matters presented in
connection with the Merger by the stockholders of Showboat:
39
(a) by mutual written consent of Showboat and Xxxxxx'x; or
(b) by either Xxxxxx'x or Showboat if the Merger shall not
have been consummated by July 1, 1998 (provided that (i) if the
Merger shall not have been consummated because the requisite
Governmental Approvals required under Section 6.1(c) shall not
have been obtained and are still being pursued, either Xxxxxx'x
or Showboat may extend such date to January 1, 1999 by providing
written notice thereof to the other party on or prior to July 1,
1998 and (ii) the right to terminate this Agreement under this
Section 7.1(b) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the cause
of or resulted in the failure of the Merger to occur on or before
such date); or
(c) by either Xxxxxx'x or Showboat if a court of competent
jurisdiction or other Governmental Entity shall have issued a
nonappealable final order, decree or ruling or taken any other
nonappealable final action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the
Merger; or
(d) by either Xxxxxx'x or Showboat, if, at the Special
Meeting (including any adjournment or postponement), the
requisite vote of the stockholders of Showboat in favor of the
approval and adoption of this Agreement and the Merger shall not
have been obtained; or
(e) by Xxxxxx'x, if (i) the Board of Directors of Showboat
shall have withdrawn or modified its recommendation of this
Agreement or the Merger in accordance with Sections 5.3, 5.4 or
5.5 (provided that Xxxxxx'x' right to terminate this Agreement
under such clause (i) shall not be available if at such time
Showboat would be entitled to terminate this Agreement under
Section 7.1(g)); (ii) after the receipt by Showboat of a proposal
for an Alternative Transaction, Xxxxxx'x requests in writing that
the Board of Directors of Showboat reconfirm its recommendation
of this Agreement and the Merger to the stockholders of Showboat
and the Board of Directors of Showboat fails to do so within five
business days after its receipt of Xxxxxx'x' request; (iii) the
Board of Directors of Showboat shall have recommended to the
stockholders of Showboat, or entered into a definitive agreement
with respect to, an Alternative Transaction; or (iv) for any
reason Showboat fails to call and hold the Stockholders' Meeting
by July 1, 1998 (provided that Xxxxxx'x' right to terminate this
Agreement under such clause (iv) shall not be available if at
such time Showboat would be entitled to terminate this Agreement
under Section 7.1(g)); or
(f) by Showboat, prior to the approval of this Agreement by
its stockholders, if, as a result of a Superior Proposal received
by such party from a Third Party, the Board of Directors of
Showboat determines in good faith, based on advice of outside
legal counsel, that the failure to accept such Superior Proposal
would be inconsistent with its fiduciary duties to stockholders
under applicable law; provided, however, that no termination
shall be effective pursuant to this Section 7.1(f) under
circumstances in which a termination fee is payable by Showboat
pursuant to Section 7.3(b)(iv), unless concurrently with such
termination, such termination fee is paid in full by Showboat in
accordance with Section 7.3(b)(iv); or
(g) by Xxxxxx'x or Showboat, if there has been a breach of
any representation, warranty, covenant or agreement on the part
of the other party set forth in this Agreement, which
40
breach will cause the conditions set forth in Section 6.2(a) or
(b) (in the case of termination by Showboat) or 6.3(a) or (b) (in
the case of termination by Xxxxxx'x) not to be satisfied.
Section 7.2. EFFECT OF TERMINATION.
In the event of termination of this Agreement as provided in
Section 7.1, this Agreement shall immediately become void and
there shall be no liability or obligation on the part of
Xxxxxx'x, Merger Sub or Showboat, or their respective officers,
directors, stockholders or Affiliates, except as set forth in
Section 7.3 and except that such termination shall not limit
liability for a willful breach of this Agreement; provided that,
the provisions of Section 7.3 of this Agreement and the
Confidentiality Agreement shall remain in full force and effect
and survive any termination of this Agreement.
Section 7.3. FEES AND EXPENSES.
(a) Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses, whether or not the Merger is
consummated.
(b) Showboat shall pay Xxxxxx'x a termination fee of $20
million upon the earliest to occur of the following events:
(i) the termination of this Agreement by Xxxxxx'x or
Showboat pursuant to Section 7.1(d), if a proposal for an
Alternative Transaction involving Showboat shall have been
publicly announced prior to the Stockholders' Meeting and either
a definitive agreement for an Alternative Transaction is entered
into, or an Alternative Transaction is consummated, within one
year of such termination;
(ii) the termination of this Agreement by Xxxxxx'x
pursuant to Section 7.1(e)(i), (iii) or (iv);
(iii) the termination of this Agreement by Xxxxxx'x
pursuant to Sections 7.1(e)(ii), and either a definitive
agreement for an Alternative Transaction is entered into, or an
Alternative Transaction is consummated, within one year of such
termination; or
(iv) the termination of this Agreement by Showboat
pursuant to Section 7.1(f).
Showboat's payment of a termination fee pursuant to
this subsection shall be the sole and exclusive remedy of
Xxxxxx'x against Showboat and any of its Subsidiaries and their
respective directors, officers, employees, agents, advisors or
other representatives with respect to the occurrences giving rise
to such payment; provided that this limitation shall not apply in
the event of a willful breach of this Agreement by Showboat.
(c) The fees payable pursuant to Section 7.3(b) shall be
paid concurrently with the first to occur of the events described
in Section 7.3(b)(i), (ii), (iii) or (iv).
(d) In the event that this Agreement is terminated by
Xxxxxx'x or Showboat pursuant to Section 7.1(b) and all the
conditions to Closing set forth in Article VI have been
41
satisfied or waived except for obtaining the consents of lenders
set forth in Section 4.2 of the Xxxxxx'x Disclosure Schedule or
the continued accuracy at such time of Xxxxxx'x' representation
in Section 4.5, Xxxxxx'x shall pay to Showboat liquidated damages
in the amount of $10.0 million. Showboat's payment of such
liquidated damages pursuant to this subsection shall be the sole
and exclusive remedy of Showboat against Xxxxxx'x and any of its
Subsidiaries and their respective directors, officers, employees,
agents, advisors or other representatives with respect to the
occurrences giving rise to such payment.
Section 7.4. AMENDMENT.
This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters
presented in connection with the Merger by the stockholders of
Showboat, but, after any such approval, no amendment shall be
made which (i) by law requires further approval by such
stockholders or (ii) is in any manner adverse to the stockholders
of Showboat, in each case without such further approval. This
Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
Section 7.5. EXTENSION; WAIVER.
At any time prior to the Effective Time, the parties
hereto, by action taken or authorized by their respective Boards
of Directors, may, to the extent legally allowed (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) waive compliance
with any of the agreements or conditions contained here. Any
agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument
signed on behalf of such party.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES
AND AGREEMENTS.
None of the representations, warranties and agreements in
this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, except for the
agreements contained in Sections 1.4, 2.1, 2.2, 2.3, 5.9, 5.11,
5.13 and 5.14 and Article VIII. The Confidentiality Agreements
shall survive the execution and delivery of this Agreement.
Section 8.2. NOTICES.
All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or mailed by registered or
certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
42
(a) if to Showboat, to
Showboat, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Attn: H. Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
with a copy to
Weil, Gotshal & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX
Attn: Xxxxxx Xxxx Xxxx, Esq.
Telecopy: (000) 000-0000
(b) if to Xxxxxx'x or Merger Sub, to
Xxxxxx'x Entertainment, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxxxxxxxx, Xx., Esq.
Telecopy: (000) 000-0000
Section 8.3. INTERPRETATION.
When a reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement they shall be deemed to be
followed by the words "without limitation." The phrase "made
available" in this Agreement shall mean that the information
referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the
date of this Agreement", "the date hereof," and terms of similar
import, unless the context otherwise requires, shall be deemed to
refer to December 18, 1997.
Section 8.4. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties,
it being understood that all parties need not sign the same
counterpart.
43
Section 8.5. ENTIRE AGREEMENT; NO THIRD PARTY
BENEFICIARIES.
This Agreement and all documents and instruments referred to
herein (a) constitute the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and
(b) except as provided in Section 5.9 are not intended to confer
upon any person other than the parties hereto any rights or
remedies hereunder; provided that the Confidentiality Agreements
shall remain in full force and effect until the Effective Time.
Each party hereto agrees that, except for the representations and
warranties contained in this Agreement, none of Xxxxxx'x, Merger
Sub or Showboat makes any other representations or warranties,
and each hereby disclaims any other representations and
warranties made by itself or any of its officers, directors,
employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of
this Agreement or the transactions contemplated hereby,
notwithstanding the delivery or disclosure to any of them or
their respective representatives of any documentation or other
information with respect to any one or more of the foregoing.
Section 8.6. GOVERNING LAW.
This Agreement shall be governed and construed in accordance
with the laws of the State of Nevada without regard to any
applicable conflicts of law.
Section 8.7. ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties, except that Merger
Sub may assign its rights and obligations hereunder to any direct
or indirect wholly-owned subsidiary of Xxxxxx'x; provided that no
such assignment shall relieve Xxxxxx'x of its obligations
hereunder. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
44
IN WITNESS WHEREOF, Xxxxxx'x Entertainment, Inc., HEI
Acquisition Corp. and Showboat, Inc. have caused this Agreement
to be signed by their respective duly authorized officers as of
the date first written above.
XXXXXX'X ENTERTAINMENT, INC.
/s/ X. X. Xxxxxxxx, Xx.
-----------------------------
By: X. X. Xxxxxxxx, Xx.
Its: Senior Vice President
HEI ACQUISITION CORP.
/s/
-----------------------------
By:
Its:
SHOWBOAT, INC.
/s/ X. X. Xxxxxxxx
-----------------------------
By:
Its:
EXHIBIT A
FORM OF STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of December 18, 1997
(this "Agreement"), by _______________ ("Stockholder") to and for
the benefit of Xxxxxx'x Entertainment, Inc., a Delaware
corporation ("Xxxxxx'x"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings
assigned to them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, Stockholder owns of record
and beneficially ________ shares (such shares, together with any
other voting or equity securities of Showboat, Inc., a Nevada
corporation ("Showboat"), hereafter acquired by Stockholder prior
to the termination of this Agreement, being referred to herein
collectively as the "Shares") of common stock, par value $1.00
per share ("Showboat Common Stock");
WHEREAS, concurrently with the execution of this Agreement,
Xxxxxx'x, HEI Acquisition Corp., a Nevada corporation and
indirect wholly-owned subsidiary of Xxxxxx'x ("Merger Sub"), and
Showboat are entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "Merger Agreement"), pursuant to
which, upon the terms and subject to the conditions thereof,
Merger Sub will be merged with and into Showboat such that
Showboat will become an indirect wholly-owned subsidiary of
Xxxxxx'x (the "Merger"); and
WHEREAS, as a condition to the willingness of Showboat,
Xxxxxx'x and Merger Sub to enter into the Merger Agreement,
Xxxxxx'x has requested the Stockholder agree, and in order to
induce Xxxxxx'x and Merger Sub to enter into the Merger
Agreement, the Stockholder is willing to agree to vote in favor
of adopting the Merger Agreement and approving the Merger, upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending
to be legally bound hereby, the parties hereby agree, severally
and not jointly, as follows:
Section 1. VOTING OF SHARES. Until the termination of
this Agreement in accordance with the terms hereof, Stockholder
hereby agrees that, at the Special Meeting (as defined in the
Merger Agreement) or any other meeting of the stockholders of
Showboat, however called, and in any action by written consent of
the stockholders of Showboat, Stockholder will vote all of his or
her respective Shares (a) in favor of adoption of the Merger
Agreement and approval of the Merger and the other transactions
contemplated by the Merger Agreement, and (b) in favor of any
other matter necessary to the consummation of the transactions
contemplated by the Merger Agreement and considered and voted
upon by the stockholders of Showboat (or any class thereof).
Stockholder acknowledges receipt and review of a copy of the
Merger Agreement.
Section 2. TRANSFER OF SHARES. Until the termination of
this Agreement in accordance with the terms hereof, Stockholder
will not, directly or indirectly, (a) sell, assign, transfer,
pledge, encumber or otherwise dispose of any of the Shares, (b)
deposit any of the Shares into a voting trust or enter into a
voting agreement or arrangement with respect to the Shares or
grant
any proxy or power of attorney with respect thereto which is
inconsistent with this Agreement or (c) enter into any contract,
option or other arrangement or undertaking with respect to the
direct or indirect sale, assignment, transfer (including by
merger, testamentary disposition, interspousal disposition
pursuant to a domestic relations proceeding or otherwise by
operation of law) or other disposition of any Shares; provided,
however, that Stockholder may transfer the Shares to family
members or to a trust so long as such trust or family member
takes such Shares subject to the obligations and restrictions
contained in this Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER. Stockholder hereby represents and warrants to
Xxxxxx'x with respect to himself or herself and his or her
ownership of the Shares as follows:
(a) OWNERSHIP OF SHARES. On the date hereof, the
Shares are owned of record and beneficially by Stockholder.
Stockholder has sole voting power, without restrictions, with
respect to all of the Shares.
(b) POWER, BINDING AGREEMENT. Stockholder has
the legal capacity, power and authority to enter into and perform
all of his or her obligations under this Agreement. The
execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which
Stockholder is a party, including, without limitation, any voting
agreement, shareholders' agreement, partnership agreement or
voting trust. This Agreement has been duly and validly executed
and delivered by Stockholder and constitutes a valid and binding
obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(c) NO CONFLICTS. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit
agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Stockholder or any of his or her
properties or assets, other than such conflicts, violations or
defaults or terminations, cancellations or accelerations which
individually or in the aggregate do not materially impair the
ability of Stockholder to perform his or her obligations
hereunder. No consent, approval, order or authorization of, or
registration, declaration, or filing with, any governmental
entity is required by or with respect to the execution and
delivery of this Agreement by Stockholder and the consummation by
Stockholder of the transactions contemplated hereby.
Section 4. NO SOLICITATION. Prior to the termination of
this Agreement in accordance with its terms, Stockholder agrees
(a) that he or she will not, nor will he or she authorize or
permit any of his or her employees, agents and representatives
to, directly or indirectly, initiate or solicit any inquiries or
the making of any Acquisition Proposal (as defined in the Merger
2
Agreement) and (b) that he or she will notify Xxxxxx'x as soon as
possible if any such inquiries or proposals are received by, any
information or documents is requested from, or any negotiations
or discussions are sought to be initiated or continued with, him
or her or any of his or her affiliates [(b) only as to JKH, III].
Section 5. TERMINATION. This Agreement shall terminate
upon the earliest to occur of (i) the Effective Time (as such
term is defined in the Merger Agreement) or (ii) any termination
of the Merger Agreement in accordance with the terms thereof
(including, without limitation, any termination pursuant to
Section 7.1(f) thereof); provided that the provisions of Section
8 shall survive any termination of this Agreement, and provided
further that no such termination shall relieve any party of
liability for a breach hereof prior to termination.
Section 6. SPECIFIC PERFORMANCE. The parties hereto
agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 7. FIDUCIARY DUTIES. Notwithstanding anything
in this Agreement to the contrary, the covenants and agreements
set forth herein shall not prevent Stockholder from serving on
Showboat's Board of Directors and from taking any action, subject
to the applicable provisions of the Merger Agreement, while
acting in such designee's capacity as a director of Showboat.
Section 8. MISCELLANEOUS.
(a) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with
respect thereto. This Agreement may not be amended, modified or
rescinded except by an instrument in writing signed by each of
the parties hereto.
(b) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect. 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 to the fullest extent permitted by applicable
law in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest
extent possible.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada
without regard to the principles of conflicts of law thereof.
(d) This Agreement may be executed in
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
3
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be signed by their respective duly authorized
officers as of the date first written above.
STOCKHOLDER
-------------------------------
Agreed and Acknowledged:
XXXXXX'X ENTERTAINMENT, INC.
----------------------------
By:
Its:
S-1
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of December 18,
1997 (this "Agreement"), by X.X. Xxxxxxxx ("Stockholder") to and
for the benefit of Xxxxxx'x Entertainment, Inc., a Delaware
corporation ("Xxxxxx'x"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings
assigned to them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, Stockholder owns of
record and beneficially 1,178,357 shares (such shares, together
with any other voting or equity securities of Showboat, Inc., a
Nevada corporation ("Showboat"), hereafter acquired by
Stockholder prior to the termination of this Agreement, being
referred to herein collectively as the "Shares") of common stock,
par value $1.00 per share ("Showboat Common Stock"), of Showboat;
WHEREAS, concurrently with the execution of this
Agreement, the Company, HEI Acquisition Corp., a Nevada
corporation and indirect wholly-owned subsidiary of Xxxxxx'x
("Merger Sub"), and Showboat are entering into an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which, upon the terms and subject to the
conditions thereof, Merger Sub will be merged with and into
Showboat such that Showboat will become an indirect wholly-owned
subsidiary of Xxxxxx'x (the "Merger"); and
WHEREAS, as a condition to the willingness of Showboat,
Xxxxxx'x and Merger Sub to enter into the Merger Agreement,
Xxxxxx'x has requested the Stockholder agree, and in order to
induce Xxxxxx'x and Merger Sub to enter into the Merger
Agreement, the Stockholder is willing to agree to vote in favor
of adopting the Merger Agreement and approving the Merger, upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereby agree,
severally and not jointly, as follows:
Section 1. VOTING OF SHARES. Until the termination
of this Agreement in accordance with the terms hereof,
Stockholder hereby agrees that, at the Special Meeting (as
defined in the Merger Agreement) or any other meeting of the
stockholders of Showboat, however called, and in any action by
written consent of the stockholders of Showboat, Stockholder will
vote all of his or her respective Shares (a) in favor of adoption
of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, and (b) in
favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement and considered
and voted upon by the stockholders of Showboat (or any class
thereof). Stockholder acknowledges receipt and review of a copy
of the Merger Agreement.
Section 2. TRANSFER OF SHARES. Until the
termination of this Agreement in accordance with the terms
hereof, Stockholder will not, directly or indirectly, (a) sell,
assign, transfer, pledge, encumber or otherwise dispose of any of
the Shares, (b) deposit any of the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to the
Shares or grant any proxy or power of attorney with respect
thereto which is inconsistent with this Agreement or (c) enter
into any contract, option or other arrangement or undertaking
with respect to the direct or indirect sale, assignment, transfer
(including by merger, testamentary disposition, interspousal
disposition pursuant to a domestic relations proceeding or
otherwise by operation of law) or other disposition of any
Shares; provided, however, that Stockholder may transfer the
Shares to family members or to a trust so long as such trust or
family member takes such Shares subject to the obligations and
restrictions contained in this Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER. Stockholder hereby represents and warrants to
Xxxxxx'x with respect to himself or herself and his or her
ownership of the Shares as follows:
(a) OWNERSHIP OF SHARES. On the date hereof, the
Shares are owned of record and beneficially by Stockholder.
Stockholder has sole voting power, without restrictions, with
respect to all of the Shares.
(b) POWER, BINDING AGREEMENT. Stockholder has
the legal capacity, power and authority to enter into and perform
all of his or her obligations under this Agreement. The
execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which
Stockholder is a party, including, without limitation, any voting
agreement, shareholders' agreement, partnership agreement or
voting trust. This Agreement has been duly and validly executed
and delivered by Stockholder and constitutes a valid and binding
obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(c) NO CONFLICTS. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit
agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Stockholder or any of his or her
properties or assets, other than such conflicts, violations or
defaults or terminations, cancellations or accelerations which
individually or in the aggregate do not materially impair the
ability of Stockholder to perform his or her obligations
hereunder. No consent, approval, order or authorization of, or
registration, declaration, or filing with, any governmental
entity is required by or with respect to the execution and
delivery of this Agreement by Stockholder and the consummation by
Stockholder of the transactions contemplated hereby.
Section 4. NO SOLICITATION. Prior to the
termination of this Agreement in accordance with its terms,
Stockholder agrees that he or she will not, nor will he or she
authorize or permit any of his or her employees, agents and
representatives to, directly or indirectly, initiate or solicit
any inquiries or the making of any Acquisition Proposal (as
defined in the Merger Agreement).
Section 5. TERMINATION. This Agreement shall
terminate upon the earliest to occur of (i) the Effective Time
(as such term is defined in the Merger Agreement) or (ii) any
termination of the Merger Agreement in accordance with the terms
thereof (including, without limitation, any termination pursuant
to Section 7.1(f) thereof); provided that the provisions of
Section 8 shall survive any termination of this Agreement, and
provided further that no such termination shall relieve any party
of liability for a breach hereof prior to termination.
Section 6. SPECIFIC PERFORMANCE. The parties
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 7. FIDUCIARY DUTIES. Notwithstanding
anything in this Agreement to the contrary, the covenants and
agreements set forth herein shall not prevent Stockholder from
serving on Showboat's Board of Directors and from taking any
action, subject to the applicable provisions of the Merger
Agreement, while acting in such designee's capacity as a director
of Showboat.
Section 8. MISCELLANEOUS.
(a) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with
respect thereto. This Agreement may not be amended, modified or
rescinded except by an instrument in writing signed by each of
the parties hereto.
(b) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect. 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 to the fullest extent permitted by applicable
law in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest
extent possible.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada
without regard to the principles of conflicts of law thereof.
(d) This Agreement may be executed in
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be signed by their respective duly
authorized officers as of the date first written above.
X.X. XXXXXXXX
/s/ X. X. Xxxxxxxx
-------------------------------
Agreed and Acknowledged:
XXXXXX'X ENTERTAINMENT, INC.
/s/ X. X. Xxxxxxxx, Xx.
----------------------------
By: X. X. Xxxxxxxx, Xx.
Its: Senior Vice President
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of December 18,
1997 (this "Agreement"), by Xxxx X. Xxxxxxx ("Stockholder") to
and for the benefit of Xxxxxx'x Entertainment, Inc., a Delaware
corporation ("Xxxxxx'x"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings
assigned to them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, Stockholder owns of
record and beneficially 174,824 shares (such shares, together
with any other voting or equity securities of Showboat, Inc., a
Nevada corporation ("Showboat"), hereafter acquired by
Stockholder prior to the termination of this Agreement, being
referred to herein collectively as the "Shares") of common stock,
par value $1.00 per share ("Showboat Common Stock");
WHEREAS, concurrently with the execution of this
Agreement, Xxxxxx'x, HEI Acquisition Corp., a Nevada corporation
and indirect wholly-owned subsidiary of Xxxxxx'x ("Merger Sub"),
and Showboat are entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to
which, upon the terms and subject to the conditions thereof,
Merger Sub will be merged with and into Showboat such that
Showboat will become an indirect wholly-owned subsidiary of
Xxxxxx'x (the "Merger"); and
WHEREAS, as a condition to the willingness of Showboat,
Xxxxxx'x and Merger Sub to enter into the Merger Agreement,
Xxxxxx'x has requested the Stockholder agree, and in order to
induce Xxxxxx'x and Merger Sub to enter into the Merger
Agreement, the Stockholder is willing to agree to vote in favor
of adopting the Merger Agreement and approving the Merger, upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereby agree,
severally and not jointly, as follows:
Section 1. VOTING OF SHARES. Until the termination
of this Agreement in accordance with the terms hereof,
Stockholder hereby agrees that, at the Special Meeting (as
defined in the Merger Agreement) or any other meeting of the
stockholders of Showboat, however called, and in any action by
written consent of the stockholders of Showboat, Stockholder will
vote all of his or her respective Shares (a) in favor of adoption
of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, and (b) in
favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement and considered
and voted upon by the stockholders of Showboat (or any class
thereof). Stockholder acknowledges receipt and review of a copy
of the Merger Agreement.
Section 2. TRANSFER OF SHARES. Until the
termination of this Agreement in accordance with the terms
hereof, Stockholder will not, directly or indirectly, (a) sell,
assign, transfer, pledge, encumber or otherwise dispose of any of
the Shares, (b) deposit any of the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to the
Shares or grant any proxy or power of attorney with respect
thereto which is inconsistent with this Agreement or (c) enter
into any contract, option or other arrangement or undertaking
with respect to the direct or indirect sale, assignment, transfer
(including by merger, testamentary disposition, interspousal
disposition pursuant to a domestic relations proceeding or
otherwise by operation of law) or other disposition of any
Shares; provided, however, that Stockholder may transfer the
Shares to family members or to a trust so long as such trust or
family member takes such Shares subject to the obligations and
restrictions contained in this Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER. Stockholder hereby represents and warrants to
Xxxxxx'x with respect to himself or herself and his or her
ownership of the Shares as follows:
(a) OWNERSHIP OF SHARES. On the date hereof, the
Shares are owned of record and beneficially by Stockholder.
Stockholder has sole voting power, without restrictions, with
respect to all of the Shares.
(b) POWER, BINDING AGREEMENT. Stockholder has
the legal capacity, power and authority to enter into and perform
all of his or her obligations under this Agreement. The
execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which
Stockholder is a party, including, without limitation, any voting
agreement, shareholders' agreement, partnership agreement or
voting trust. This Agreement has been duly and validly executed
and delivered by Stockholder and constitutes a valid and binding
obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(c) NO CONFLICTS. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit
agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Stockholder or any of his or her
properties or assets, other than such conflicts, violations or
defaults or terminations, cancellations or accelerations which
individually or in the aggregate do not materially impair the
ability of Stockholder to perform his or her obligations
hereunder. No consent, approval, order or authorization of, or
registration, declaration, or filing with, any governmental
entity is required by or with respect to the execution and
delivery of this Agreement by Stockholder and the consummation by
Stockholder of the transactions contemplated hereby.
Section 4. NO SOLICITATION. Prior to the
termination of this Agreement in accordance with its terms,
Stockholder agrees that he or she will not, nor will he or she
authorize or permit any of his or her employees, agents and
representatives to, directly or indirectly, initiate or solicit
any inquiries or the making of any Acquisition Proposal (as
defined in the Merger Agreement).
Section 5. TERMINATION. This Agreement shall
terminate upon the earliest to occur of (i) the Effective Time
(as such term is defined in the Merger Agreement) or (ii) any
termination of the Merger Agreement in accordance with the terms
thereof (including, without limitation, any termination pursuant
to Section 7.1(f) thereof); provided that the provisions of
Section 8 shall survive any termination of this Agreement, and
provided further that no such termination shall relieve any party
of liability for a breach hereof prior to termination.
Section 6. SPECIFIC PERFORMANCE. The parties
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 7. FIDUCIARY DUTIES. Notwithstanding
anything in this Agreement to the contrary, the covenants and
agreements set forth herein shall not prevent Stockholder from
serving on Showboat's Board of Directors and from taking any
action, subject to the applicable provisions of the Merger
Agreement, while acting in such designee's capacity as a director
of Showboat.
Section 8. MISCELLANEOUS.
(a) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with
respect thereto. This Agreement may not be amended, modified or
rescinded except by an instrument in writing signed by each of
the parties hereto.
(b) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect. 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 to the fullest extent permitted by applicable
law in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest
extent possible.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada
without regard to the principles of conflicts of law thereof.
(d) This Agreement may be executed in
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be signed by their respective duly
authorized officers as of the date first written above.
XXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxxx
--------------------------------
Agreed and Acknowledged:
XXXXXX'X ENTERTAINMENT, INC.
/s/ X. X. Xxxxxxxx, Xx.
-----------------------------
By: X. X. Xxxxxxxx, Xx.
Its: Senior Vice President
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of December 18,
1997 (this "Agreement"), by Xxxxxxx X. Xxxxxx ("Stockholder") to
and for the benefit of Xxxxxx'x Entertainment, Inc., a Delaware
corporation ("Xxxxxx'x"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings
assigned to them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, Stockholder owns of
record and beneficially 203,208 shares (such shares, together
with any other voting or equity securities of Showboat, Inc., a
Nevada corporation ("Showboat"), hereafter acquired by
Stockholder prior to the termination of this Agreement, being
referred to herein collectively as the "Shares") of common stock,
par value $1.00 per share ("Showboat Common Stock");
WHEREAS, concurrently with the execution of this
Agreement, Xxxxxx'x, HEI Acquisition Corp., a Nevada corporation
and indirect wholly-owned subsidiary of Xxxxxx'x ("Merger Sub"),
and Showboat are entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to
which, upon the terms and subject to the conditions thereof,
Merger Sub will be merged with and into Showboat such that
Showboat will become an indirect wholly-owned subsidiary of
Xxxxxx'x (the "Merger"); and
WHEREAS, as a condition to the willingness of Showboat,
Xxxxxx'x and Merger Sub to enter into the Merger Agreement,
Xxxxxx'x has requested the Stockholder agree, and in order to
induce Xxxxxx'x and Merger Sub to enter into the Merger
Agreement, the Stockholder is willing to agree to vote in favor
of adopting the Merger Agreement and approving the Merger, upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereby agree,
severally and not jointly, as follows:
Section 1. VOTING OF SHARES. Until the termination
of this Agreement in accordance with the terms hereof,
Stockholder hereby agrees that, at the Special Meeting (as
defined in the Merger Agreement) or any other meeting of the
stockholders of Showboat, however called, and in any action by
written consent of the stockholders of Showboat, Stockholder will
vote all of his or her respective Shares (a) in favor of adoption
of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, and (b) in
favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement and considered
and voted upon by the stockholders of Showboat (or any class
thereof). Stockholder acknowledges receipt and review of a copy
of the Merger Agreement.
Section 2. TRANSFER OF SHARES. Until the
termination of this Agreement in accordance with the terms
hereof, Stockholder will not, directly or indirectly, (a) sell,
assign, transfer, pledge, encumber or otherwise dispose of any of
the Shares, (b) deposit any of the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to the
Shares or grant any proxy or power of attorney with respect
thereto which is inconsistent with this Agreement or (c) enter
into any contract, option or other arrangement or undertaking
with respect to the direct or indirect sale, assignment, transfer
(including by merger, testamentary disposition, interspousal
disposition pursuant to a domestic relations proceeding or
otherwise by operation of law) or other disposition of any
Shares; provided, however, that Stockholder may transfer the
Shares to family members or to a trust so long as such trust or
family member takes such Shares subject to the obligations and
restrictions contained in this Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER. Stockholder hereby represents and warrants to
Xxxxxx'x with respect to himself or herself and his or her
ownership of the Shares as follows:
(a) OWNERSHIP OF SHARES. On the date hereof, the
Shares are owned of record and beneficially by Stockholder.
Stockholder has sole voting power, without restrictions, with
respect to all of the Shares.
(b) POWER, BINDING AGREEMENT. Stockholder has
the legal capacity, power and authority to enter into and perform
all of his or her obligations under this Agreement. The
execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which
Stockholder is a party, including, without limitation, any voting
agreement, shareholders' agreement, partnership agreement or
voting trust. This Agreement has been duly and validly executed
and delivered by Stockholder and constitutes a valid and binding
obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(c) NO CONFLICTS. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit
agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Stockholder or any of his or her
properties or assets, other than such conflicts, violations or
defaults or terminations, cancellations or accelerations which
individually or in the aggregate do not materially impair the
ability of Stockholder to perform his or her obligations
hereunder. No consent, approval, order or authorization of, or
registration, declaration, or filing with, any governmental
entity is required by or with respect to the execution and
delivery of this Agreement by Stockholder and the consummation by
Stockholder of the transactions contemplated hereby.
Section 4. NO SOLICITATION. Prior to the
termination of this Agreement in accordance with its terms,
Stockholder agrees that he or she will not, nor will he or she
authorize or permit any of his or her employees, agents and
representatives to, directly or indirectly, initiate or solicit
any inquiries or the making of any Acquisition Proposal (as
defined in the Merger Agreement).
Section 5. TERMINATION. This Agreement shall
terminate upon the earliest to occur of (i) the Effective Time
(as such term is defined in the Merger Agreement) or (ii) any
termination of the Merger Agreement in accordance with the terms
thereof (including, without limitation, any termination pursuant
to Section 7.1(f) thereof); provided that the provisions of
Section 8 shall survive any termination of this Agreement, and
provided further that no such termination shall relieve any party
of liability for a breach hereof prior to termination.
Section 6. SPECIFIC PERFORMANCE. The parties
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 7. FIDUCIARY DUTIES. Notwithstanding
anything in this Agreement to the contrary, the covenants and
agreements set forth herein shall not prevent Stockholder from
serving on Showboat's Board of Directors and from taking any
action, subject to the applicable provisions of the Merger
Agreement, while acting in such designee's capacity as a director
of Showboat.
Section 8. MISCELLANEOUS.
(a) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with
respect thereto. This Agreement may not be amended, modified or
rescinded except by an instrument in writing signed by each of
the parties hereto.
(b) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect. 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 to the fullest extent permitted by applicable
law in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest
extent possible.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada
without regard to the principles of conflicts of law thereof.
(d) This Agreement may be executed in
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be signed by their respective duly
authorized officers as of the date first written above.
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Agreed and Acknowledged:
XXXXXX'X ENTERTAINMENT, INC.
/s/ X. X. Xxxxxxxx, Xx.
----------------------------
By: X. X. Xxxxxxxx, Xx.
Its: Senior Vice President
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of December 18,
1997 (this "Agreement"), by Xxxxxx X. Xxxxxxx ("Stockholder") to
and for the benefit of Xxxxxx'x Entertainment, Inc., a Delaware
corporation ("Xxxxxx'x"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings
assigned to them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, Stockholder owns of
record and beneficially 377,686 shares (such shares, together
with any other voting or equity securities of Showboat, Inc., a
Nevada corporation ("Showboat"), hereafter acquired by
Stockholder prior to the termination of this Agreement, being
referred to herein collectively as the "Shares") of common stock,
par value $1.00 per share ("Showboat Common Stock");
WHEREAS, concurrently with the execution of this
Agreement, Xxxxxx'x, HEI Acquisition Corp., a Nevada corporation
and indirect wholly-owned subsidiary of Xxxxxx'x ("Merger Sub"),
and Showboat are entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to
which, upon the terms and subject to the conditions thereof,
Merger Sub will be merged with and into Showboat such that
Showboat will become an indirect wholly-owned subsidiary of
Xxxxxx'x (the "Merger"); and
WHEREAS, as a condition to the willingness of Showboat,
Xxxxxx'x and Merger Sub to enter into the Merger Agreement,
Xxxxxx'x has requested the Stockholder agree, and in order to
induce Xxxxxx'x and Merger Sub to enter into the Merger
Agreement, the Stockholder is willing to agree to vote in favor
of adopting the Merger Agreement and approving the Merger, upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereby agree,
severally and not jointly, as follows:
Section 1. VOTING OF SHARES. Until the termination
of this Agreement in accordance with the terms hereof,
Stockholder hereby agrees that, at the Special Meeting (as
defined in the Merger Agreement) or any other meeting of the
stockholders of Showboat, however called, and in any action by
written consent of the stockholders of Showboat, Stockholder will
vote all of his or her respective Shares (a) in favor of adoption
of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, and (b) in
favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement and considered
and voted upon by the stockholders of Showboat (or any class
thereof). Stockholder acknowledges receipt and review of a copy
of the Merger Agreement.
Section 2. TRANSFER OF SHARES. Until the
termination of this Agreement in accordance with the terms
hereof, Stockholder will not, directly or indirectly, (a) sell,
assign, transfer, pledge, encumber or otherwise dispose of any of
the Shares, (b) deposit any of the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to the
Shares or grant any proxy or power of attorney with respect
thereto which is inconsistent with this Agreement or (c) enter
into any contract, option or other arrangement or undertaking
with respect to the direct or indirect sale, assignment, transfer
(including by merger, testamentary disposition, interspousal
disposition pursuant to a domestic relations proceeding or
otherwise by operation of law) or other disposition of any
Shares; provided, however, that Stockholder may transfer the
Shares to family members or to a trust so long as such trust or
family member takes such Shares subject to the obligations and
restrictions contained in this Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER. Stockholder hereby represents and warrants to
Xxxxxx'x with respect to himself or herself and his or her
ownership of the Shares as follows:
(a) OWNERSHIP OF SHARES. On the date hereof, the
Shares are owned of record and beneficially by Stockholder.
Stockholder has sole voting power, without restrictions, with
respect to all of the Shares.
(b) POWER, BINDING AGREEMENT. Stockholder has
the legal capacity, power and authority to enter into and perform
all of his or her obligations under this Agreement. The
execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which
Stockholder is a party, including, without limitation, any voting
agreement, shareholders' agreement, partnership agreement or
voting trust. This Agreement has been duly and validly executed
and delivered by Stockholder and constitutes a valid and binding
obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(c) NO CONFLICTS. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit
agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Stockholder or any of his or her
properties or assets, other than such conflicts, violations or
defaults or terminations, cancellations or accelerations which
individually or in the aggregate do not materially impair the
ability of Stockholder to perform his or her obligations
hereunder. No consent, approval, order or authorization of, or
registration, declaration, or filing with, any governmental
entity is required by or with respect to the execution and
delivery of this Agreement by Stockholder and the consummation by
Stockholder of the transactions contemplated hereby.
Section 4. NO SOLICITATION. Prior to the
termination of this Agreement in accordance with its terms,
Stockholder agrees that he or she will not, nor will he or she
authorize or permit any of his or her employees, agents and
representatives to, directly or indirectly, initiate or solicit
any inquiries or the making of any Acquisition Proposal (as
defined in the Merger Agreement).
Section 5. TERMINATION. This Agreement shall
terminate upon the earliest to occur of (i) the Effective Time
(as such term is defined in the Merger Agreement) or (ii) any
termination of the Merger Agreement in accordance with the terms
thereof (including, without limitation, any termination pursuant
to Section 7.1(f) thereof); provided that the provisions of
Section 8 shall survive any termination of this Agreement, and
provided further that no such termination shall relieve any party
of liability for a breach hereof prior to termination.
Section 6. SPECIFIC PERFORMANCE. The parties
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 7. FIDUCIARY DUTIES. Notwithstanding
anything in this Agreement to the contrary, the covenants and
agreements set forth herein shall not prevent Stockholder from
serving on Showboat's Board of Directors and from taking any
action, subject to the applicable provisions of the Merger
Agreement, while acting in such designee's capacity as a director
of Showboat.
Section 8. MISCELLANEOUS.
(a) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with
respect thereto. This Agreement may not be amended, modified or
rescinded except by an instrument in writing signed by each of
the parties hereto.
(b) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect. 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 to the fullest extent permitted by applicable
law in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest
extent possible.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada
without regard to the principles of conflicts of law thereof.
(d) This Agreement may be executed in
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be signed by their respective duly
authorized officers as of the date first written above.
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Agreed and Acknowledged:
XXXXXX'X ENTERTAINMENT, INC.
/s/ X. X. Xxxxxxxx, Xx.
----------------------------
By: X. X. Xxxxxxxx, Xx.
Its: Senior Vice President
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of December 18,
1997 (this "Agreement"), by X. Xxxx Houssels, III ("Stockholder")
to and for the benefit of Xxxxxx'x Entertainment, Inc., a
Delaware corporation ("Xxxxxx'x"). Capitalized terms used and
not otherwise defined herein shall have the respective meanings
assigned to them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, Stockholder owns of
record and beneficially 130,717 shares (such shares, together
with any other voting or equity securities of Showboat, Inc., a
Nevada corporation ("Showboat"), hereafter acquired by
Stockholder prior to the termination of this Agreement, being
referred to herein collectively as the "Shares") of common stock,
par value $1.00 per share ("Showboat Common Stock");
WHEREAS, concurrently with the execution of this
Agreement, Xxxxxx'x, HEI Acquisition Corp., a Nevada corporation
and indirect wholly-owned subsidiary of Xxxxxx'x ("Merger Sub"),
and Showboat are entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to
which, upon the terms and subject to the conditions thereof,
Merger Sub will be merged with and into Showboat such that
Showboat will become an indirect wholly-owned subsidiary of
Xxxxxx'x (the "Merger"); and
WHEREAS, as a condition to the willingness of Showboat,
Xxxxxx'x and Merger Sub to enter into the Merger Agreement,
Xxxxxx'x has requested the Stockholder agree, and in order to
induce Xxxxxx'x and Merger Sub to enter into the Merger
Agreement, the Stockholder is willing to agree to vote in favor
of adopting the Merger Agreement and approving the Merger, upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereby agree,
severally and not jointly, as follows:
Section 1. VOTING OF SHARES. Until the termination
of this Agreement in accordance with the terms hereof,
Stockholder hereby agrees that, at the Special Meeting (as
defined in the Merger Agreement) or any other meeting of the
stockholders of Showboat, however called, and in any action by
written consent of the stockholders of Showboat, Stockholder will
vote all of his or her respective Shares (a) in favor of adoption
of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, and (b) in
favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement and considered
and voted upon by the stockholders of Showboat (or any class
thereof). Stockholder acknowledges receipt and review of a copy
of the Merger Agreement.
Section 2. TRANSFER OF SHARES. Until the
termination of this Agreement in accordance with the terms
hereof, Stockholder will not, directly or indirectly, (a) sell,
assign, transfer, pledge, encumber or otherwise dispose of any of
the Shares, (b) deposit any of the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to the
Shares or grant any proxy or power of attorney with respect
thereto which is inconsistent with this Agreement or (c) enter
into any contract, option or other arrangement or undertaking
with respect to the direct or indirect sale, assignment, transfer
(including by merger, testamentary disposition, interspousal
disposition pursuant to a domestic relations proceeding or
otherwise by operation of law) or other disposition of any
Shares; provided, however, that Stockholder may transfer the
Shares to family members or to a trust so long as such trust or
family member takes such Shares subject to the obligations and
restrictions contained in this Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER. Stockholder hereby represents and warrants to
Xxxxxx'x with respect to himself or herself and his or her
ownership of the Shares as follows:
(a) OWNERSHIP OF SHARES. On the date hereof, the
Shares are owned of record and beneficially by Stockholder.
Stockholder has sole voting power, without restrictions, with
respect to all of the Shares.
(b) POWER, BINDING AGREEMENT. Stockholder has
the legal capacity, power and authority to enter into and perform
all of his or her obligations under this Agreement. The
execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which
Stockholder is a party, including, without limitation, any voting
agreement, shareholders' agreement, partnership agreement or
voting trust. This Agreement has been duly and validly executed
and delivered by Stockholder and constitutes a valid and binding
obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(c) NO CONFLICTS. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit
agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Stockholder or any of his or her
properties or assets, other than such conflicts, violations or
defaults or terminations, cancellations or accelerations which
individually or in the aggregate do not materially impair the
ability of Stockholder to perform his or her obligations
hereunder. No consent, approval, order or authorization of, or
registration, declaration, or filing with, any governmental
entity is required by or with respect to the execution and
delivery of this Agreement by Stockholder and the consummation by
Stockholder of the transactions contemplated hereby.
Section 4. NO SOLICITATION. Prior to the
termination of this Agreement in accordance with its terms,
Stockholder agrees (a) that he or she will not, nor will he or
she authorize or permit any of his or her employees, agents and
representatives to, directly or indirectly, initiate or solicit
any inquiries or the making of any Acquisition Proposal (as
defined in the Merger Agreement) and (b) that he or she will
notify Xxxxxx'x as soon as possible if any such inquiries or
proposals are received by, any information or documents is
requested from, or any negotiations or discussions are sought to
be initiated or continued with, him or her or any of his or her
affiliates.
Section 5. TERMINATION. This Agreement shall
terminate upon the earliest to occur of (i) the Effective Time
(as such term is defined in the Merger Agreement) or (ii) any
termination of the Merger Agreement in accordance with the terms
thereof (including, without limitation, any termination pursuant
to Section 7.1(f) thereof); provided that the provisions of
Section 8 shall survive any termination of this Agreement, and
provided further that no such termination shall relieve any party
of liability for a breach hereof prior to termination.
Section 6. SPECIFIC PERFORMANCE. The parties
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 7. FIDUCIARY DUTIES. Notwithstanding
anything in this Agreement to the contrary, the covenants and
agreements set forth herein shall not prevent Stockholder from
serving on Showboat's Board of Directors and from taking any
action, subject to the applicable provisions of the Merger
Agreement, while acting in such designee's capacity as a director
of Showboat.
Section 8. MISCELLANEOUS.
(a) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with
respect thereto. This Agreement may not be amended, modified or
rescinded except by an instrument in writing signed by each of
the parties hereto.
(b) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect. 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 to the fullest extent permitted by applicable
law in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest
extent possible.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada
without regard to the principles of conflicts of law thereof.
(d) This Agreement may be executed in
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be signed by their respective duly
authorized officers as of the date first written above.
X. XXXX HOUSSELS, III
/s/ X. Xxxx Houssels, III
-------------------------------
Agreed and Acknowledged:
XXXXXX'X ENTERTAINMENT, INC.
/s/ X. X. Xxxxxxxx, Xx.
----------------------------
By: X. X. Xxxxxxxx, Xx.
Its: Senior Vice President
