Exhibit 2.1
AGREEMENT AND PLAN OF
MERGER
BY AND AMONG
STATION CASINOS, INC.,
FERTITTA COLONY PARTNERS
LLC
AND
FCP ACQUISITION SUB
February 23, 2007
TABLE OF
CONTENTS
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ARTICLE I DEFINITIONS
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2
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Section 1.1.
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Definitions
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2
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Section 1.2.
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Terms Generally
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10
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ARTICLE II THE MERGER
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10
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Section 2.1.
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The Merger
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10
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Section 2.2.
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Conversion of
Securities
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11
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Section 2.3.
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Payment of Cash for Merger Shares
and Company Options
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12
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Section 2.4.
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Treatment of Company
Options
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14
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ARTICLE III THE SURVIVING
CORPORATION
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15
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Section 3.1.
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Articles of
Incorporation
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15
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Section 3.2.
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Bylaws
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15
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Section 3.3.
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Directors and
Officers
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15
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ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
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15
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Section 4.1.
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Corporate Existence and
Power
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15
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Section 4.2.
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Corporate
Authorization
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16
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Section 4.3.
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Governmental
Authorization
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16
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Section 4.4.
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Non-Contravention
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17
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Section 4.5.
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Capitalization
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17
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Section 4.6.
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Reports and Financial
Statements
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18
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Section 4.7.
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Undisclosed
Liabilities
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19
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Section 4.8.
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Disclosure Documents
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19
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Section 4.9.
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Absence of Certain Changes or
Events
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20
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Section 4.10.
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Finders’ Fees
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20
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Section 4.11.
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Opinion of Financial
Advisor
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20
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Section 4.12.
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Anti-Takeover
Provisions
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20
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Section 4.13.
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Compliance With Laws
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20
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ARTICLE V REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB
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21
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Section 5.1.
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Corporate Existence and
Power
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21
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Section 5.2.
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Corporate
Authorization
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21
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Section 5.3.
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Governmental
Authorization
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21
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Section 5.4.
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Non-Contravention
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22
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Section 5.5.
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Disclosure Documents
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22
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Section 5.6.
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Finders’ Fees
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22
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Section 5.7.
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Financing
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22
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Section 5.8.
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Equity Rollover Commitments;
Management Agreements
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23
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Section 5.9.
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Parent and Merger Sub
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23
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Section 5.10.
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Ownership of Shares
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23
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Section 5.11.
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Interest in
Competitors
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24
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Section 5.12.
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No Other Representations and
Warranties
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24
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Section 5.13.
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Guarantee
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24
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Section 5.14.
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Solvency
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24
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Section 5.15.
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Disclosure
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24
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ARTICLE VI CONDUCT OF BUSINESS
PENDING THE MERGER
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25
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Section 6.1.
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Conduct of the Company and
Subsidiaries
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25
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Section 6.2.
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Conduct of Parent and Merger
Sub
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28
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Section 6.3.
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No Control of Other Party’s
Business
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28
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ARTICLE VII ADDITIONAL
AGREEMENTS
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28
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Section 7.1.
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Stockholder Meeting; Proxy
Material
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28
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Section 7.2.
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Reasonable Best
Efforts
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29
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Section 7.3.
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Access to Information
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32
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Section 7.4.
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Solicitation
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32
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Section 7.5.
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Director and Officer
Liability
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36
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Section 7.6.
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Takeover Statutes
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37
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Section 7.7.
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Public Announcements
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37
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Section 7.8.
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Employee Matters
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37
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Section 7.9.
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Financing
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38
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Section 7.10.
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Debt Tender Offers
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41
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Section 7.11.
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Notices of Certain
Events
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42
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Section 7.12.
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Confidentiality
Agreements
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43
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Section 7.13.
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Vesting of Company Equity
Awards
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43
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Section 7.14.
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Rule 16b-3
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43
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ARTICLE VIII CONDITIONS TO THE
MERGER
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44
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Section 8.1.
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Conditions to the Obligations of
Each Party
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44
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Section 8.2.
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Conditions to the Obligations of
Parent and Merger Sub
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44
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Section 8.3.
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Conditions to the Obligations of the
Company
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45
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ARTICLE IX
TERMINATION
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45
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Section 9.1.
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Termination
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45
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Section 9.2.
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Termination Fee
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47
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Section 9.3.
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Effect of Termination
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49
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ARTICLE X
MISCELLANEOUS
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49
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Section 10.1.
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Notices
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49
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Section 10.2.
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Survival of Representations and
Warranties
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50
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Section 10.3.
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Expenses
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51
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Section 10.4.
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Amendment
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51
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Section 10.5.
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Waiver
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51
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Section 10.6.
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Successors and
Assigns
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51
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Section 10.7.
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Governing Law
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51
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Section 10.8.
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Counterparts; Effectiveness; Third
Party Beneficiaries
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51
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Section 10.9.
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Severability
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52
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ii
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Section 10.10.
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Entire Agreement
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52
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Section 10.11.
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Jurisdiction
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52
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Section 10.12.
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Authorship
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53
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Section 10.13.
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Remedies
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53
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iii
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER
(this “Agreement”) is made and entered into as of this
23rd day of February, 2007 by and among Station Casinos, Inc., a
Nevada corporation (the “Company”), Fertitta Colony
Partners LLC, a Nevada limited liability company
(“Parent”), and FCP Acquisition Sub, a Nevada
corporation and a wholly-owned subsidiary of Parent (“Merger
Sub”).
RECITALS
A.
The parties intend that Merger Sub be merged with and into the
Company (the “Merger”), with the Company surviving the
Merger as a direct or indirect wholly-owned subsidiary of Parent
(the “Surviving Corporation”). The Surviving
Corporation shall retain the name of the Company.
B.
The Board of Directors of the Company, acting upon the unanimous
recommendation of the Special Committee, has (i) determined
that the Merger and this Agreement are fair to and in the best
interests of the Company and its stockholders, (ii) approved
this Agreement and (iii) resolved to recommend that
stockholders of the Company approve this Agreement.
C.
The respective Boards of Directors of Parent and Merger Sub have
unanimously approved this Agreement.
D.
In the Merger, subject to the terms of Article II hereof, each
share of common stock, $.01 par value per share, of the Company,
including any Rights associated therewith (the
“Shares”), other than those shares held by Parent, will
be converted into the right to receive $90.00 per share in
cash.
E.
Certain existing stockholders of the Company desire to contribute
Shares to Parent immediately prior to the Effective Time in
exchange for equity interests in Parent.
F.
Concurrently with the execution of this Agreement, as a condition
and inducement to the Company’s and Parent’s
willingness to enter into this Agreement, the Company, Parent and
the Contributing Stockholders are entering into a voting agreement,
of even date herewith (the “ Voting Agreement
”), pursuant to which each of the Contributing Stockholders
has agreed, subject to the terms thereof, to vote their respective
Shares in favor of adoption of this Agreement.
G.
The Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection
with the Merger and also to prescribe certain conditions to the
Merger, as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing and the representations, warranties, covenants and
agreements contained herein, intending to be legally bound, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section
1.1.
Definitions . For purposes of this Agreement, the
following terms have the respective meanings set forth
below:
“6% Notes” has the
meaning set forth in Section 7.10.
“6% Notes Indenture” has
the meaning set forth in Section 7.10.
“6 ½% Notes”
has the meaning set forth in Section 7.10.
“6 ½% Notes
Indenture” has the meaning set forth in
Section 7.10.
“6 ⅝% Notes”
has the meaning set forth in Section 7.10.
“6 ⅝% Notes
Indenture” has the meaning set forth in
Section 7.10.
“6 ⅞% Notes”
has the meaning set forth in Section 7.10.
“6 ⅞% Notes
Indenture” has the meaning set forth in
Section 7.10.
“7 ¾% Notes”
has the meaning set forth in Section 7.10.
“7 ¾% Notes
Indenture” has the meaning set forth in
Section 7.10.
“Affiliate” means, with
respect to any Person, any other Person, directly or indirectly,
controlling, controlled by, or under common control with, such
Person. For purposes of this definition, the term
“control” (including the correlative terms
“controlling”, “controlled by” and
“under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise. For purposes of this Agreement, Parent and Merger
Sub shall be deemed not to be Affiliates of the Company.
“Agreement” has the
meaning set forth in the Preamble.
“Articles of Merger” has
the meaning set forth in Section 2.1(b).
“Book-Entry Share” has
the meaning set forth in Section 2.2(c).
“Business Day” means any
day other than the days on which banks in Las Vegas, Nevada or New
York, New York are required or authorized to close.
2
“Certificate” has the
meaning set forth in Section 2.2(c).
“Closing” has the
meaning set forth in Section 2.1(d).
“Closing Date” has the
meaning set forth in Section 2.1(d).
“Code” means the
Internal Revenue Code of 1986, as amended.
“Company” has the
meaning set forth in the Preamble.
“Company Acquisition
Proposal” has the meaning set forth in
Section 7.4(g)(i).
“Company Benefit Plan”
means each Employee Benefit Plan (other than any multiemployer plan
within the meaning of ERISA Section 3(37)) and all stock
purchase, stock option, severance, employment, change-in-control,
fringe benefit, bonus, incentive, deferred compensation and other
material employee benefit plans, agreements, programs, policies or
other arrangements, whether or not subject to ERISA, under which
any Company Employee has any present or future right to benefits,
maintained or contributed to by the Company or any of its
Subsidiaries or under which the Company or any of its Subsidiaries
has any present or future liability.
“Company Disclosure
Letter” has the meaning set forth in the preamble to
Article IV.
“Company Employees”
means any current, former or retired employee, officer, consultant,
independent contractor or director of the Company or any of its
Subsidiaries.
“Company Equity Awards”
means Company Options and Company Restricted Shares.
“Company Joint Venture”
means, with respect to the Company, any corporation or other entity
(including partnerships, limited liability companies and other
business associations and joint ventures) in which the Company,
directly or indirectly, owns an equity interest that does not have
voting power under ordinary circumstances to elect a majority of
the board of directors or other person performing similar functions
but in which the Company has rights with respect to the management
of such Person.
“Company Options”
means outstanding options to acquire Shares from the Company
granted to Company Employees under the Company Stock Plans or
otherwise.
“Company Proxy
Statement” means the proxy statement, together with any
amendments or supplements thereto and any other related proxy
materials, relating to the approval of this Agreement by the
Company’s stockholders prepared in accordance with applicable
Law and including the information required to be included in the
Schedule 13E-3.
“Company Restricted
Shares” has the meaning set forth in
Section 2.2(e).
“Company SEC Reports”
has the meaning set forth in Section 4.6(a).
“Company Securities” has
the meaning set forth in Section 4.5(b).
3
“Company Stockholder
Meeting” has the meaning set forth in
Section 7.1(a).
“Company Stock Plans”
means the 2005 Stock Compensation Plan, the Incentive Stock Option
Plan, the Compensatory Stock Option Plan, the Restricted Share
Plan, the Non-employee Director Stock Option Plan, the 1999
Compensatory Stock Option Plan, and the 1999 Share Plan.
“Compensation” has the
meaning set forth in Section 7.8(a).
“Confidentiality
Agreements” means, collectively, the Confidentiality
Agreement, dated October 12, 2006, between the Company and Colony
Capital Acquisitions, LLC, and the Confidentiality Agreement, dated
as of December 1, 2006, between the Company and Fertitta Colony
Partners LLC.
“Contract” has the
meaning set forth in Section 4.4.
“Contributing
Stockholders” means, individually or collectively, Frank J.
Fertitta III, Lorenzo J. Fertitta, Blake L. Sartini and Delise F.
Sartini and their respective Affiliates which contribute Shares to
Parent pursuant to the Equity Rollover Commitments.
“Current Employee” has
the meaning set forth in Section 7.8(a).
“Current Policies” has
the meaning set forth in Section 7.5(a).
“Damages” has the
meaning set forth in Section 7.5(a).
“Debt Financing” has the
meaning set forth in Section 5.7.
“Debt Financing
Commitments” has the meaning set forth in
Section 5.7.
“Debt Tender Offers” has
the meaning set forth in Section 7.10.
“Disbursing Agent” has
the meaning set forth in Section 2.3(a).
“Disinterested Director”
means a member of the Board of Directors of the Company who is
independent within the meaning of Section 303A.02 of the New
York Stock Exchange Listing Standards and who, accordingly, does
not have a direct or indirect material relationship with the
Company.
“DOJ” has the meaning
set forth in Section 7.2(b).
“Effective Time” has the
meaning set forth in Section 2.1(b).
“Employee Benefit Plan”
has the meaning set forth in Section 3(3) of ERISA.
“Employment Agreement”
means any employment, severance, retention, termination,
indemnification, change in control or similar agreement between the
Company or any of its Subsidiaries, on the one hand, and any
current or former employee of the Company or any of its
Subsidiaries, on the other hand.
4
“End Date” has the
meaning set forth in Section 9.1(b)(i).
“Equity Financing” has
the meaning set forth in Section 5.7.
“Equity Financing
Commitment” has the meaning set forth in
Section 5.7.
“Equity Rollover
Commitments” has the meaning set forth in
Section 5.8.
“ERISA” means the
Employee Retirement Income Security Act of 1974, as
amended.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Excluded Party” has the
meaning set forth in Section 7.4(b).
“Expected Date” has the
meaning set forth in Section 7.9(a).
“Fertittas” means Frank
J. Fertitta III and Lorenzo J. Fertitta.
“Financing” has the
meaning set forth in Section 5.7.
“Financing Commitments”
has the meaning set forth in Section 5.7.
“FTC” has the
meaning set forth in Section 7.2(b).
“Gaming Approvals” has
the meaning set forth in Section 7.2(e).
“Gaming Authority” means
any Governmental Authority with regulatory control or jurisdiction
over casino or other gaming activities and operations, including,
without limitation, the Nevada Gaming Commission, the Nevada State
Gaming Control Board and the National Indian Gaming
Commission.
“Gaming Law” means, with
respect to any Person, any Law governing or relating to any current
or contemplated casino or other gaming activities and operations of
such Person and its Subsidiaries, including, without limitation,
the rules and regulations established by any Gaming
Authority.
“GAAP” means United
States generally accepted accounting principles.
“Governmental Authority”
means any nation or government or any agency, public or regulatory
authority, instrumentality, department, commission, court,
arbitrator, ministry, tribunal or board of any nation or government
or political subdivision thereof, in each case, whether foreign or
domestic and whether national, supranational, federal, tribal,
provincial, state, regional, local or municipal.
“HSR Act” means the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
“Indentures” has the
meaning set forth in Section 7.10.
5
“Interim LLC
Agreement” has the meaning set forth in
Section 6.2.
“Law” means applicable
statutes, common laws, rules, ordinances, regulations, codes,
licensing requirements, orders, judgments, injunctions, writs,
decrees, licenses, governmental guidelines or interpretations
having the force of law, permits, rules and bylaws, in each case,
of a Governmental Authority.
“Lease” means the lease
of certain real property assets by PropCo to the Company, as set
forth in the form of Master Lease Agreement, to be dated as of the
Closing Date (the “Lease Agreement”), by and between
the Company and PropCo.
“Lease Agreement” has
the meaning set forth in the definition of
“Lease”.
“Liens” means, with
respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such
asset.
“Limited Guarantee” has
the meaning set forth in Section 5.13.
“Majority-Minority Vote”
has the meaning set forth in Section 4.2(a).
“Marketing Period” has
the meaning set forth in Section 7.9(a).
“Material Adverse Effect on
the Company” means a material adverse effect on the assets or
liabilities, business, financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole; provided,
however, that in no event shall any of the following, alone or in
combination, be deemed to constitute, nor shall any of the
following be taken into account in determining whether there has
been, a Material Adverse Effect on the Company: (A) any
fact, change, development, circumstance, event, effect or
occurrence (an “Effect”) in general economic or
political conditions, whether locally, nationally or
internationally, or in the financial or securities markets, or any
outbreak or escalation of hostilities or declared or undeclared
acts of terrorism; (B) any Effect generally affecting, or
resulting from general changes or developments in, the travel,
hospitality or gaming industries; (C) any failure to meet
internal or published projections, forecasts or revenue or earnings
predictions for any period (provided that the underlying causes of
such failures shall not be excluded); (D) any change in the
price or trading volume of the Shares in and of itself (provided
that the underlying causes of such changes shall not be excluded);
(E) any Effect that is demonstrated to have resulted from the
announcement of the proposal of the Merger or this Agreement and
the transactions contemplated hereby, or the identity of Parent or
any of its Affiliates as the acquiror of the Company; (F) any
Effect arising from any action taken by the Company to comply with
its obligations under this Agreement; or (G) any changes in Law or
GAAP (or the interpretation thereof), except, in the case of
clauses (A) and (B), to the extent such Effects referred to
therein have had a materially disproportionate impact on the assets
or liabilities, business, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole,
relative to other participants in the travel, hospitality or gaming
industries.
“Merger” has the meaning
set forth in the Recitals.
“Merger Consideration”
has the meaning set forth in Section 2.2(c).
6
“Merger Shares” has the
meaning set forth in Section 2.2(c).
“Merger Sub” has the
meaning set forth in the Preamble.
“Merger Sub Shares”
means the shares of common stock of Merger Sub, par value
$0.001 per share.
“New Financing
Commitments” has the meaning set forth in
Section 7.9(c).
“NewCo” means FCP NewCo,
LLC, a Delaware limited liability company and a wholly-owned
subsidiary of the Company.
“Notes” has the meaning
set forth in Section 7.10.
“No-Shop Period Start
Date” has the meaning set forth in
Section 7.4(a).
“NRS” has the meaning
set forth in Section 2.1(a).
“Operating Subsidiaries”
has the meaning set forth in the definition of
“Sale”.
“Parent” has the meaning
set forth in the Preamble.
“Parent Disclosure
Letter” has the meaning set forth in the preamble to Article
V.
“Parent Expenses” has
the meaning set forth in Section 9.2(e).
“Parent Plan” has the
meaning set forth in Section 7.8(b).
“Permits” means any
licenses, franchises, permits, certificates, consents, approvals or
other similar authorizations of, from or by a Governmental
Authority (including any Gaming Authority) possessed by or granted
to or necessary for the ownership of the material assets or conduct
of the business of the Company or its Subsidiaries.
“Permitted Liens” means
(i) Liens for Taxes, assessments and governmental charges or
levies not yet due and payable or that are being contested in good
faith and by appropriate proceedings; (ii) mechanics’,
carriers’, workmen’s, repairmen’s,
materialmen’s or other Liens or security interests that
secure a liquidated amount that are being contested in good faith
and by appropriate proceedings or with respect to which there
remains an opportunity to contest; or (iii) leases, subleases
and licenses (other than capital leases and leases underlying sale
and leaseback transactions); (iv) Liens imposed by applicable
Law; (v) pledges or deposits to secure obligations under
workers’ compensation Laws or similar legislation or to
secure public or statutory obligations; (vi) pledges and
deposits to secure the performance of bids, trade contracts,
leases, surety and appeal bonds, performance bonds and other
obligations of a similar nature, in each case in the ordinary
course of business; (vii) easements, covenants and rights of
way (unrecorded and of record) and other similar restrictions of
record, and zoning, building and other similar restrictions, in
each case that do not adversely affect in any material respect the
current use of the applicable property owned, leased, used or held
for use by the Company or any of its Subsidiaries;
(viii) Liens the existence of which are specifically disclosed
in the notes to
7
the consolidated financial
statements of the Company included in any Company SEC Report filed
prior to the date of this Agreement; and (ix) any other Liens
that do not secure a liquidated amount, that have been incurred or
suffered in the ordinary course of business and that would not,
individually or in the aggregate, have a material adverse effect on
the Company or the ability of Parent to obtain the Debt
Financing.
“Person” means any
individual, corporation, company, limited liability company,
partnership, association, trust, joint venture or any other entity
or organization, including any government or political subdivision
or any agency or instrumentality thereof.
“PropCo” means FCP
PropCo, LLC, a Delaware limited liability company and a wholly
owned-subsidiary of the Company.
“Purchase Agreement” has
the meaning set forth in the definition of
“Sale”.
“Recommendation” has the
meaning set forth in Section 7.1(a).
“Recommendation
Withdrawal” has the meaning set forth in
Section 7.4(d).
“Regulatory Termination
Fee” means $106,000,000.
“Replacement Policies”
has the meaning set forth in Section 7.5(a).
“Representatives” has
the meaning set forth in Section 7.4(a).
“Required Financial
Information” has the meaning set forth in
Section 7.9(a).
“Requisite Stockholder
Vote” has the meaning set forth in
Section 4.2(a).
“Restraint” has the
meaning set forth in Section 8.1(c).
“Rights” has the meaning
set forth in the Rights Agreement.
“Rights Agreement” has
the meaning set forth in Section 4.12.
“Reverse Termination
Fee” means $160,000,000.
“Sale” means the sale of
certain real property assets by Boulder Station, Inc., Fiesta
Station Holdings, LLC, Lake Mead Station Holdings, LLC, Palace
Station Hotel & Casino, Inc., Santa Fe Station, Inc., and
Sunset Station, Inc. (collectively, the “Operating
Subsidiaries”) to NewCo, as set forth in the Purchase and
Sale Agreement, dated as of even date herewith (the “Purchase
Agreement”), by and among the Operating Subsidiaries and
NewCo.
“Sale and Lease-Back
Agreements” means, collectively, (i) the Purchase Agreement,
(ii) the Lease Agreement, and (iii) the form of Sublease
Agreements, to be dated as of the Closing Date, by and among the
Company and each of the Operating Subsidiaries.
“Schedule 13E-3”
means a Rule 13e-3 Transaction Statement on
Schedule 13E-3, together with any amendments or supplements
thereto, relating to the Merger.
8
“SEC” means the United
States Securities and Exchange Commission.
“Securities Act” means
the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“Share” has the meaning
set forth in the Recitals.
“Special Committee”
means a committee of the Company’s Board of Directors, the
members of which are not affiliated with Parent or Merger Sub and
are not members of the Company’s management, formed for the
reasons set forth in the resolution establishing such
committee.
“Subsidiary” means, with
respect to any Person, any other Person of which the first Person
owns, directly or indirectly, securities or other ownership
interests having voting power to elect a majority of the board of
directors or other persons performing similar functions (or, if
there are no such voting interests, 50% or more of the equity
interests of the second Person).
“Superior Proposal” has
the meaning set forth in Section 7.4(g)(ii).
“Superior Proposal Effective
Time” has the meaning set forth in
Section 7.13.
“Surviving Corporation”
has the meaning set forth in the Recitals.
“Takeover Statute” has
the meaning set forth in Section 4.12.
“Tax” means (i) all
U.S. Federal, state, local, foreign and other taxes (including
withholding taxes), fees and other governmental charges of any kind
or nature whatsoever, together with any interest, penalties or
additions imposed with respect thereto, (ii) any liability for
payment of amounts described in clause (i) whether as a result
of transferee liability or joint and several liability for being a
member of an affiliated, consolidated, combined or unitary group
for any period, and (iii) any liability for the payment of
amounts described in clause (i) or (ii) as a result of
any tax sharing, tax indemnity or tax allocation agreement or any
other express or implied agreement to pay or indemnify any other
Person for the payment of Taxes.
“Tax Return” means any
return, declaration, report, statement, information statement or
other document filed or required to be filed with respect to Taxes,
including any amendments or supplements to any of the
foregoing.
“Termination Fee” means
$160,000,000, except in the event that any third party has made a
bona fide Company Acquisition Proposal before the No-Shop Period
Start Date, which Company Acquisition Proposal then constituted a
Superior Proposal, and this Agreement is terminated by the Company
pursuant to Section 9.1(c)(ii) in order to enter into a definitive
agreement with respect to such Company Acquisition Proposal with
such third party, the Termination Fee shall mean
$106,000,000.
“Voting Agreement” has
the meaning set forth in the Recitals.
9
Section
1.2.
Terms Generally . The definitions in Section 1.1
shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words “include”,
“includes” and “including” shall be deemed
to be followed by the phrase “without limitation”,
unless the context expressly provides otherwise. All
references herein to Sections, paragraphs, subparagraphs, clauses,
Exhibits or Schedules shall be deemed references to Sections,
paragraphs, subparagraphs or clauses of, or Exhibits or Schedules
to this Agreement, unless the context requires otherwise.
Unless otherwise expressly defined, terms defined in this Agreement
have the same meanings when used in any Exhibit or Schedule hereto,
including the Company Disclosure Letter. Unless otherwise
specified, the words “herein”, “hereof”,
“hereto” and “hereunder” and other words of
similar import refer to this Agreement as a whole (including the
Schedules and Exhibits) and not to any particular provision of this
Agreement. The term “or” is not exclusive.
The word “extent” in the phrase “to the
extent” shall mean the degree to which a subject or other
thing extends, and such phrase shall not mean simply
“if”. Any Contract, instrument or Law defined or
referred to herein or in any Contract or instrument that is
referred to herein means such Contract, instrument or Law as from
time to time amended, modified or supplemented, including (in the
case of Contracts or instruments) by waiver or consent and (in the
case of Laws) by succession of comparable successor Laws and
references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted
successors and assigns.
ARTICLE II
THE MERGER
Section
2.1.
The Merger .
(a)
At the Effective Time, in accordance with the Nevada Revised
Statutes (the “NRS”), and upon the terms and subject to
the conditions set forth in this Agreement, Merger Sub shall be
merged with and into the Company, at which time the separate
existence of Merger Sub shall cease and the Company shall survive
the Merger as a direct or indirect wholly-owned subsidiary of
Parent.
(b)
Subject to the provisions of this Agreement, with respect to the
Merger, as soon as practicable after 10:00 a.m., Las Vegas time, on
the Closing Date, Merger Sub shall file the Articles of Merger (the
“Articles of Merger”) executed in accordance with, and
containing such information as is required by, the relevant
provisions of the NRS with the Secretary of State of the State of
Nevada. The Merger shall become effective at such time as the
Articles of Merger are duly filed with the Secretary of State of
the State of Nevada or at such other date and time as is agreed
between the parties and specified in the Articles of Merger in
accordance with the relevant provisions of the NRS (such date and
time is hereinafter referred to as the “Effective
Time”).
(c)
The Merger shall generally have the effects set forth in Section
92A.250, and any other applicable provisions, of the NRS and this
Agreement. Without limiting the generality of the foregoing,
and subject thereto, from and after the Effective Time, all
property, rights, privileges, immunities, powers, franchises,
licenses and authority of the Company and
10
Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities, obligations,
restrictions and duties of each of the Company and Merger Sub shall
become the debts, liabilities, obligations, restrictions and duties
of the Surviving Corporation.
(d)
The closing of the Merger (the “Closing”) shall take
place (i) at the offices of Milbank, Tweed, Hadley &
McCloy LLP, located in Los Angeles, California, or (ii) at
such other place and time or on such other date as the Company and
Parent may agree in writing (the actual date of the Closing, the
“Closing Date”), as soon as reasonably practicable but
in any event, no later than the later to occur of (i) the second
Business Day after the day on which the last condition to the
Merger set forth in Article VIII is satisfied or validly
waived (other than those conditions that by their nature cannot be
satisfied until the Closing Date, but subject to the satisfaction
or valid waiver of such conditions), or (ii) the date of completion
of the Marketing Period (or, if Parent so notifies the Company, a
date during the Marketing Period not less than three Business Days
following such notice to the Company).
Section
2.2.
Conversion of Securities . At the Effective Time,
pursuant to this Agreement and by virtue of the Merger and without
any action on the part of the Company, Parent, Merger Sub or the
holders of the Shares:
(a)
Each Share held by the Company as treasury stock or otherwise owned
by Parent, Merger Sub or any wholly-owned Subsidiary of the Company
immediately prior to the Effective Time (including Shares acquired
by Parent immediately prior to the Effective Time), if any, shall
be canceled and retired and shall cease to exist, and no payment or
distribution shall be made or delivered with respect
thereto.
(b)
Each Merger Sub Share issued and outstanding immediately prior to
the Effective Time shall be converted into and become one newly
issued, fully paid and non-assessable share of common stock of the
Surviving Corporation.
(c)
Each Share (including any Company Restricted Shares) issued and
outstanding immediately prior to the Effective Time (other than
Shares to be canceled pursuant to Section 2.2(a))
automatically shall be canceled and converted into the right to
receive $90.00 in cash, without interest (the “Merger
Consideration”), payable to the holder thereof upon surrender
of the certificate (a “Certificate”) or the book-entry
share (a “Book-Entry Share”) formerly representing such
Share in the manner provided in Section 2.3. Such Shares
(including any Company Restricted Shares), other than those
canceled pursuant to Section 2.2(a), sometimes are referred to
herein as the “Merger Shares.”
(d)
If between the date of this Agreement and the Effective Time the
number of outstanding Shares is changed into a different number of
shares or a different class, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split-up,
combination, exchange of shares or the like, other than pursuant to
the Merger, the amount of Merger Consideration payable per Share
and any other dependent items shall be appropriately adjusted to
provide the holders of the Shares the same economic effect as
contemplated by this Agreement prior to such action and as so
adjusted shall, from and after the date of such event, be the
Merger Consideration or other dependent items, subject to further
adjustment in accordance with this Section 2.2(d).
11
(e)
Each Share (other than those canceled pursuant to Section 2.2(a))
outstanding immediately prior to the Effective Time, granted
subject to vesting or other lapse restrictions pursuant to the
Company Stock Plans or any applicable restricted stock award
agreements (collectively, the “Company Restricted
Shares”) shall, by virtue of this Agreement and in accordance
with Section 2.4(b), vest and become free of such restrictions
immediately prior to the Effective Time and shall be canceled,
retired and shall cease to exist and shall be converted into the
right to receive the Merger Consideration in accordance with
Section 2.2(c).
(f)
The Company Options outstanding immediately prior to the Effective
Time shall be treated as provided in Section 2.4.
(g)
For the avoidance of doubt, the parties acknowledge and agree that
the contribution or sale of Shares (including Company Restricted
Shares, if any) to Parent by the Contributing Stockholders shall be
deemed to occur immediately prior to the Effective Time and prior
to any other above-described event and shall not be converted into
the right to receive the Merger Consideration.
Section
2.3.
Payment of Cash for Merger Shares and Company Options
.
(a)
Prior to the Closing Date, Parent shall designate a bank or trust
company that is reasonably satisfactory to the Company to serve as
the disbursing agent for the Merger Consideration and payments, if
applicable, in respect of the Company Options, unless another agent
is designated as provided in Section 2.4(a) (the
“Disbursing Agent”). Prior to or substantially
simultaneously with the filing of the Articles of Merger with the
Secretary of State of the State of Nevada, Parent will deposit, or
will cause to be deposited, with the Disbursing Agent cash in the
aggregate amount sufficient to pay the Merger Consideration in
respect of all Merger Shares outstanding immediately prior to the
Effective Time plus any cash necessary to pay for Company Options
outstanding immediately prior to the Effective Time pursuant to
Section 2.4 and pay any declared and unpaid dividends in
respect of the Shares. Pending distribution of the cash
deposited with the Disbursing Agent, such cash shall be held in
trust for the benefit of the holders of Merger Shares and Company
Options outstanding immediately prior to the Effective Time and
shall not be used for any other purposes; provided, however, that
Parent may direct the Disbursing Agent to invest such cash in
(i) obligations of or guaranteed by the United States of
America or any agency or instrumentality thereof, (ii) money
market accounts, certificates of deposit, bank repurchase agreement
or banker’s acceptances of, or demand deposits with,
commercial banks having a combined capital and surplus of at least
$500,000,000, or (iii) commercial paper obligations rated P-1
or A-1 or better by Standard & Poor’s Corporation or
Moody’s Investor Services, Inc. Any profit or loss
resulting from, or interest and other income produced by, such
investments shall be for the account of Parent.
(b)
As promptly as practicable after the Effective Time, the Surviving
Corporation shall send, or cause the Disbursing Agent to send, to
each record holder of Merger Shares as of immediately prior to the
Effective Time a letter of transmittal and instructions for
exchanging their Merger Shares for the Merger Consideration payable
therefor. The letter of transmittal will be in customary form
and will specify that delivery of Certificates or Book-Entry Shares
will be effected, and risk of loss and title will pass, only upon
delivery of the Certificates or Book-Entry Shares to the Disbursing
Agent. Upon surrender of such Certificate(s) or
Book-
12
Entry Share(s) to the Disbursing
Agent together with a properly completed and duly executed letter
of transmittal and any other documentation that the Disbursing
Agent may reasonably require, the record holder thereof shall be
entitled to receive the Merger Consideration payable in exchange
therefor, without interest. Until so surrendered and
exchanged, each such Certificate or Book-Entry Share shall, after
the Effective Time, be deemed to represent only the right to
receive the Merger Consideration and any declared and unpaid
dividend in respect of such Certificate or Book-Entry Share, and
until such surrender and exchange, no cash shall be paid to the
holder of such outstanding Certificate or Book-Entry Share in
respect thereof.
(c)
If payment is to be made to a Person other than the registered
holder of the Merger Shares formerly represented by the
Certificate(s) or Book-Entry Share(s) surrendered in exchange
therefor, it shall be a condition to such payment that the
Certificate(s) or Book-Entry Share(s) so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and
that the Person requesting such payment shall pay to the Disbursing
Agent any applicable stock transfer taxes required as a result of
such payment to a Person other than the registered holder of such
Merger Shares or establish to the satisfaction of the Disbursing
Agent that such stock transfer taxes have been paid or are not
payable.
(d)
After the Effective Time, there shall be no further transfers on
the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates or Book-Entry Shares are
presented to the Surviving Corporation, Parent or the Disbursing
Agent, such shares shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures
set forth, in this Article II.
(e)
If any cash deposited with the Disbursing Agent remains unclaimed
twelve months after the Effective Time, such cash shall be returned
to Parent or the Surviving Corporation upon demand, and any holder
who has not surrendered such holder’s Certificate(s) or
Book-Entry Share(s) for the Merger Consideration payable in respect
thereof prior to that time shall thereafter look only to the
Surviving Corporation for payment of the Merger
Consideration. Notwithstanding the foregoing, none of Parent,
Merger Sub, the Company, the Surviving Corporation, the Disbursing
Agent or any of their respective directors, officers, employees and
agents shall be liable to any holder of Certificates or Book-Entry
Shares for an amount paid to a public official pursuant to any
applicable unclaimed property laws. Any amounts remaining
unclaimed by holders of Certificates or Book-Entry Shares as of two
years after the Effective Time (or immediately prior to such
earlier date on which such amounts would otherwise escheat to or
become property of any Governmental Authority) shall, to the extent
permitted by applicable Law, become the property of the Surviving
Corporation on such date, free and clear of any claims or interest
of any Person previously entitled thereto.
(f)
No dividends or other distributions with respect to capital stock
of the Surviving Corporation with a record date after the Effective
Time shall be paid to the holder of any unsurrendered Certificate
or Book-Entry Share.
(g)
Except as provided in Section 2.2(a), from and after the
Effective Time, the holders of Shares outstanding immediately prior
to the Effective Time shall cease to have any
13
rights with respect to such Shares,
other than the right to receive the Merger Consideration as
provided in this Agreement.
(h)
In the event that any Certificate has been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed,
in addition to the posting by such holder of any bond in such
reasonable amount as the Surviving Corporation or the Disbursing
Agent may direct as indemnity against any claim that may be made
against the Surviving Corporation or the Disbursing Agent with
respect to such Certificate, the Disbursing Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger
Consideration in respect thereof entitled to be received pursuant
to this Agreement.
(i)
Notwithstanding the provisions of Section 2.2(c) or 2.2(e), Parent,
Surviving Corporation and the Disbursing Agent shall be entitled to
deduct and withhold from the Merger Consideration otherwise payable
hereunder any amounts required to be deducted and withheld under
any applicable Tax Law. To the extent any amounts are so
withheld, such withheld amounts shall be treated for all purposes
as having been paid to the holder from whose Merger Consideration
the amounts were so deducted and withheld.
Section
2.4.
Treatment of Company Options .
(a)
As of the Effective Time, each Company Option that is outstanding
immediately prior to the Effective Time will be canceled and
extinguished, and the holder thereof will be entitled to receive an
amount in cash equal to the product of (i) the number of
Shares subject to such Company Option and (ii) the excess, if
any, of the Merger Consideration over the exercise price per share
of such Company Option, without interest. All payments with
respect to canceled Company Options shall be made by the Disbursing
Agent (or such other agent reasonably acceptable to the Company as
Parent shall designate prior to the Effective Time) as promptly as
reasonably practicable after the Effective Time from funds
deposited by or at the direction of Parent for the purpose of
paying such amounts in accordance with
Section 2.3(a).
(b)
Prior to the Effective Time, the Company and Parent will adopt such
resolutions and take such other commercially reasonable actions as
are reasonably necessary in order to effectuate the actions
contemplated by Section 2.2(e) and this Section 2.4,
without paying any consideration or incurring any debts or
obligations on behalf of the Company or the Surviving Corporation,
provided that such resolutions and actions shall expressly be
conditioned upon the consummation of the Merger and the other
transactions contemplated hereby and shall be of no effect if this
Agreement is terminated.
(c)
Notwithstanding the provisions of Section 2.4(a), Parent, the
Surviving Corporation and the Disbursing Agent (or such other agent
designated pursuant to Section 2.4(a) hereof), shall be
entitled to deduct and withhold from any amounts to be paid
hereunder in respect of Company Options amounts required to be
deducted and withheld under any applicable Tax Law. To the
extent any amounts are so withheld, such withheld amounts shall be
treated for all purposes as having been paid to the holder of
Company Options from whose payments in respect of Company Options
the amounts were so deducted and withheld.
14
ARTICLE III
THE SURVIVING CORPORATION
Section
3.1.
Articles of Incorporation . The Amended and Restated
Articles of Incorporation of the Company, as amended to read in its
entirety as the articles of incorporation of Merger Sub as in
effect immediately prior to the Effective Time, shall be the
articles of incorporation of the Surviving Corporation until
thereafter amended in accordance with the terms thereof or as
provided by applicable Law; provided, however, that Article I
thereof shall read as follows: “The name of the
Corporation is Station Casinos, Inc.”
Section
3.2.
Bylaws . The bylaws of the Company, as amended to read
in its entirety as the bylaws of Merger Sub as in effect
immediately prior to the Effective Time, shall be the bylaws of the
Surviving Corporation until thereafter amended in accordance with
the terms thereof, in the articles of incorporation of the
Surviving Corporation or as provided by applicable Law.
Section
3.3.
Directors and Officers . From and after the Effective
Time, (i) the directors of Surviving Corporation at the
Effective Time shall be the Fertittas and Thomas Barrack (and such
other directors as may be designated by Parent) and (ii) the
officers of the Company at the Effective Time (other than those who
Parent determines shall not remain as officers of the Surviving
Corporation) shall be the officers of the Surviving Corporation, in
each case until their respective successors are duly elected or
appointed and qualified in accordance with applicable Law or any
contractual commitments with respect to the foregoing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (x) as set forth in the
corresponding sections or subsections of the disclosure letter
delivered to Parent and Merger Sub by the Company concurrently with
the execution and delivery of this Agreement (the “Company
Disclosure Letter”) (provided that the listing of an item in
one section of the Company Disclosure Letter shall be deemed to be
a listing in each section of the Company Disclosure Letter to which
such item relates only to the extent that it is reasonably apparent
from a reading of such disclosure that it also qualifies or applies
to such other section), (y) as may be disclosed in the Company
SEC Reports filed prior to the date of this Agreement or (z) as
otherwise known to any of the Fertittas on or prior to the date of
this Agreement, the Company hereby represents and warrants to
Parent and Merger Sub that:
Section
4.1.
Corporate Existence and Power . Each of the Company
and its Subsidiaries is duly organized, validly existing and in
good standing under the laws of its jurisdiction, except, in the
case of its Subsidiaries, where the failure to be so organized,
existing and in good standing has not had, and would not reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company. Each of the Company, its
Subsidiaries and, to the knowledge of the Company, the Company
Joint Ventures has all corporate or similar powers and authority
required to own, lease and operate its respective properties and to
carry on its business as now conducted, except, in the case of its
Subsidiaries,
15
where the failure to have such power
and authority has not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect
on the Company. Each of the Company and its Subsidiaries is
duly licensed or qualified to do business in each jurisdiction in
which the nature of the business conducted by it or the character
or location of the properties and assets owned or leased by it
makes such qualification necessary, except where the failure to be
so licensed or qualified has not had, and would not be reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on the Company. Neither the Company nor any
Subsidiary nor, to the Company’s knowledge, any Company Joint
Venture, is in violation of its organizational or governing
documents in any material respect.
Section
4.2.
Corporate Authorization.
(a)
The Company has full corporate power and authority to execute and
deliver this Agreement and, subject to receipt of the Requisite
Stockholder Vote, to consummate the Merger and to perform each of
its obligations hereunder. The execution, delivery and
performance by the Company of this Agreement and the consummation
by the Company of the Merger and the transactions contemplated by
the Sale and Lease-Back Agreements have been duly and validly
authorized by the Board of Directors of the Company. Except
for the approval of this Agreement by (i) 66 2/3% of the
outstanding Shares entitled to vote thereon, and (ii) a majority of
the outstanding Shares (excluding the Shares held by Parent, Merger
Sub, the Contributing Stockholders or any of their respective
Affiliates) present, in person or by proxy, and voting at the
Company Stockholder Meeting (the “Majority-Minority
Vote” and, together with the approval described in clause
(i), the “Requisite Stockholder Vote”), no other
corporate proceedings on the part of the Company are necessary to
approve this Agreement. The Board of Directors of the
Company, acting upon the unanimous recommendation of the Special
Committee, at a duly held meeting has (i) determined that the
Merger and this Agreement are fair to and in the best interests of
the Company and its stockholders (other than the Contributing
Stockholders), (ii) approved the Merger and the execution,
delivery and performance of this Agreement, and (iii) resolved
to recommend that the Company stockholders (other than the
Contributing Stockholders) approve this Agreement and directed that
such matter be submitted for the consideration of the stockholders
of the Company at the Company Stockholder Meeting.
(b)
This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due and valid authorization,
execution and delivery of this Agreement by Parent and Merger Sub,
constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar Laws affecting
the enforcement of creditors’ rights generally and general
equitable principles.
Section
4.3.
Governmental Authorization . The execution, delivery
and performance by the Company of this Agreement and the
consummation of the Merger by the Company do not require any
consent, approval, authorization or permit of, action by, filing
with or notification to any Governmental Authority, other than
(i) those required by the Secretary of State of the State of
Nevada as contemplated hereby; (ii) compliance with the
applicable requirements of the HSR Act; (iii) filings with,
and approvals by, Gaming Authorities; (iv) compliance with the
applicable requirements of the Exchange Act including the filing of
the Schedule 13E-3; (v) compliance with the rules and
regulations of the New York Stock Exchange;
16
(vi) compliance with any
applicable foreign or state securities or Blue Sky laws; and
(vii) any such consent, approval, authorization, permit,
action, filing or notification the failure of which to make or
obtain would not (A) be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the
Company or (B) prevent or materially delay the consummation of
the Merger or the Company’s ability to observe and perform
its material obligations hereunder.
Section
4.4.
Non-Contravention . The execution, delivery and
performance by the Company of this Agreement and the consummation
by the Company of the Merger and the other transactions
contemplated hereby do not and will not (i) contravene or
conflict with the organizational or governing documents of (A) the
Company or (B) any of its Subsidiaries or Company Joint Ventures;
(ii) assuming compliance with the matters referenced in
Section 4.3 and the receipt of the Requisite Stockholder Vote,
contravene or conflict with or constitute a violation of any
provision of any Law binding upon or applicable to the Company or
any of its Subsidiaries or Company Joint Ventures or any of their
respective properties or assets; (iii) except as set forth in
Section 4.4 of the Company Disclosure Letter, require the consent,
approval or authorization of, or notice to or filing with any third
party with respect to, result in any breach or violation of or
constitute a default (or an event which with notice or lapse of
time or both would become a default) or result in the loss of
benefit under, or give rise to any right of termination,
cancellation, amendment or acceleration of any right or obligation
of the Company or any of its Subsidiaries, or result in the
creation of any Lien on any of the properties or assets of the
Company or its Subsidiaries under any loan or credit agreement,
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit or other instrument or obligation (each, a
“Contract”) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries or its or any of their respective properties or assets
are bound, except in the case of clauses (i)(B), (ii) and
(iii) above, which would not (A) be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on the Company or (B) prevent or materially delay the
consummation of the Merger or the Company’s ability to
observe and perform its material obligations hereunder.
Section
4.5.
Capitalization .
(a)
As of December 31, 2006, the authorized capital stock of the
Company consists of:
(i)
135,000,000 Shares, of which 57,261,676 shares were issued and
outstanding (including 3,027,354 outstanding Company
Restricted Shares);
(ii)
5,000,000 shares of preferred stock, par value $.01 per share, none
of which were issued and outstanding; and
(iii)
outstanding Company Options to purchase an aggregate
of 2,187,107 Shares, with a weighted average exercise price of
$12.07 per share.
All outstanding Shares are duly
authorized, validly issued, fully paid and non-assessable, and are
not subject to and were not issued in violation of any preemptive
or similar right, purchase option, call or right of first refusal
or similar right. As of December 31, 2006, 23,245,751 Shares
were held in the treasury of the Company.
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(b)
Except as set forth in Section 4.5(a) and except
for 1,108,632 Shares reserved for issuance pursuant to the
Company Stock Plans and except for the Rights, as of the date of
this Agreement, there have not been reserved for issuance, and
there are no outstanding (i) shares of capital stock or other
voting securities of the Company; (ii) securities of the
Company or any of its Subsidiaries convertible into or exchangeable
for shares of capital stock or voting securities of the Company;
(iii) Company Options or other rights or options to acquire
from the Company, or obligations of the Company to issue, any
shares of capital stock, voting securities or securities
convertible into or exchangeable for shares of capital stock or
voting securities of the Company; or (iv) equity equivalent
interests in the ownership or earnings of the Company or other
similar rights in respect of the Company (the securities described
in clauses (i) through (iv) are collectively referred to
herein as the “Company Securities”). There are no
outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Company
Securities. There are no preemptive rights of any kind which
obligate the Company or any of its Subsidiaries to issue or deliver
any Company Securities. There are no stockholder agreements,
voting trusts or other agreements or understandings to which the
Company or any of its Subsidiaries is a party or by which it is
bound relating to the voting or registration of any shares of
capital stock of the Company or preemptive rights with respect
thereto.
(c)
From September 30, 2006 to the date of this Agreement, (i) other
than the issuance of Shares upon the exercise of Company Options,
the Company has not declared or paid any dividend or distribution
in respect of any Company Securities, other than (x) the dividend
of $0.2875 per Share paid on December 4, 2006 to stockholders of
record on November 13, 2006 and (y) the dividend of $0.2875 per
Share payable on March 12, 2007 to stockholders of record on
February 26, 2007, and (ii) other than, as of January 31,
2007, the redemption of 8,659 Shares by the Company in lieu
of employee tax obligations upon the vesting of certain Company
Restricted Shares, neither the Company nor any Subsidiary of the
Company has issued, sold or repurchased any Company Securities, and
their respective Boards of Directors have not authorized any of the
foregoing.
(d)
No bonds, debentures, notes or other indebtedness having the right
to vote on any matters on which Company stockholders may vote are
outstanding.
Section
4.6.
Reports and Financial Statements .
(a)
The Company has filed all forms, reports, statements,
certifications and other documents (including all exhibits,
amendments and supplements thereto) required to be filed by it with
the SEC since January 1, 2005 (all such forms, reports, statements,
certificates and other documents filed with or furnished to the SEC
since January 1, 2005, with any amendments thereto, collectively,
the “Company SEC Reports”), each of which, including
any financial statements or schedules included therein, as finally
amended prior to the date hereof, has complied as to form in all
material respects with the applicable requirements of the
Securities Act and Exchange Act as of the date filed with the
SEC. None of the Company’s Subsidiaries is required to
file periodic reports with the SEC. None of the Company SEC
Reports contained, when filed with the SEC and, if amended, as of
the date of such amendment, any untrue statement of a material fact
or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the
statements therein, in the
18
light of the circumstances under
which they were made, not misleading. As of the date of this
Agreement, (i) there are no outstanding or unresolved comments in
comment letters received from the SEC staff with respect to the
Company SEC Reports, and (ii) to the knowledge of the Company, none
of the Company SEC Reports is the subject of ongoing SEC review,
outstanding SEC comment or outstanding SEC
investigation.
(b)
Each of the consolidated financial statements of the Company and
its Subsidiaries included (or incorporated by reference) in the
Company SEC Reports (including the related notes and schedules,
where applicable) fairly present in all material respects (subject,
in the case of the unaudited statements, to normal year-end
auditing adjustments, none of which are expected to be material in
nature or amount) the results of the consolidated operations and
changes in stockholders’ equity and consolidated financial
position of the Company and its Subsidiaries for the respective
fiscal periods or as of the respective dates therein set
forth. Each of such consolidated financial statements
(including the related notes and schedules, where applicable)
complied, as of the date of filing, in all material respects with
applicable accounting requirements and with the published rules and
regulations of the SEC applicable thereto and each of such
financial statements (including the related notes and schedules,
where applicable) were prepared in accordance with GAAP (except, in
the case of unaudited statements, as permitted by the rules and
regulations of the SEC) consistently applied during the periods
involved, except in each case as indicated in such statements or in
the notes thereto.
Section
4.7.
Undisclosed Liabilities . Except (i) for those
liabilities that are fully reflected or reserved against on the
consolidated balance sheets (as restated, or the related notes
thereto) of the Company included in the Company SEC Reports,
(ii) for liabilities incurred in the ordinary course of
business consistent with past practice since the date of such
balance sheets, (iii) for liabilities that have been
discharged or paid in full prior to the date hereof in the ordinary
course of business consistent with past practice and (iv) for
transactions contemplated by this Agreement, neither the Company
nor any of its Subsidiaries has incurred any liability of any
nature whatsoever (whether absolute, accrued or contingent or
otherwise and whether due or to become due) that would reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
Section
4.8.
Disclosure Documents . The Schedule 13E-3 and the
Company Proxy Statement will not, at the date it is filed with the
SEC (in the case of the Schedule 13E-3), at the date it is
first mailed to stockholders of the Company (in the case of the
Company Proxy Statement), at the time of any amendments thereof or
supplements thereof, and at the time of the Company Stockholder
Meeting (other than as to information supplied by Parent, Merger
Sub or any of their respective Affiliates, for inclusion therein),
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Company will
cause the Company Proxy Statement and the Schedule 13E-3 to
comply as to form in all material respects with the requirements of
the Exchange Act applicable thereto and any other applicable Law as
of the date of such filing. No representation is made by the
Company with respect to statements made in the Company Proxy
Statement or the Schedule 13E-3 based on information supplied
by Parent, Merger Sub or their respective Affiliates specifically
for inclusion therein.
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Section
4.9.
Absence of Certain Changes or Events . Since
December 31, 2005, no change, circumstance, event or effect
has occurred which has had or would be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the
Company. Except as disclosed in Section 4.9 of the
Company Disclosure Letter, between December 31, 2005 and the
date hereof the Company and its Subsidiaries have conducted their
respective businesses in all material respects only in the ordinary
course consistent with past practice.
Section
4.10.
Finders’ Fees . No agent, broker, investment
banker, financial advisor or other firm or person retained by the
Company, except Bear, Stearns & Co. Inc. (“Bear
Stearns”), is or will be entitled to any broker’s or
finder’s fee or any other similar commission or fee payable
by the Company or any Subsidiary of the Company in connection with
any of the transactions contemplated by this Agreement. Prior
to the date hereof, the Company furnished Parent with a true and
complete copy of the engagement letter entered into between Company
and Bear Stearns.
Section
4.11.
Opinion of Financial Advisor . Bear Stearns has
delivered to the Special Committee an opinion to the effect that,
as of the date of this Agreement, the Merger Consideration to be
received by the stockholders of the Company (other than the
Contributing Stockholders) is fair, from a financial point of view,
to such stockholders.
Section
4.12.
Anti-Takeover Provisions . No “fair
price,” “merger moratorium,” “control share
acquisition,” or other anti-takeover or similar statute or
regulation (each, a “Takeover Statute”) applies or
purports to apply to this Agreement, the Merger or the other
transactions contemplated hereby, except for those which have been
made not applicable to this Agreement, the Merger and the other
transactions contemplated hereby by valid action of the Board of
Directors of the Company prior to the execution and delivery
hereof. Prior to the execution and delivery hereof, the Board
of Directors of the Company took all action necessary to ensure
that Parent, Merger Sub and their respective Affiliates and
Associates, as defined in the rights agreement (the “Rights
Agreement”), dated as of October 6, 1997, entered into by and
between the Company and Continental Stock Transfer & Trust
Company, are excepted from the definition of Acquiring Person in
the Rights Agreement only to the extent each is a Beneficial Owner
(as defined in the Rights Agreement) as a result of the approval,
execution and delivery of this Agreement or consummation of the
transactions contemplated hereby.
Section
4.13.
Compliance With Laws .
(a)
Except as set forth in Section 4.13 of the Company Disclosure
Letter, the Company and each of its Subsidiaries is in compliance
with all Laws (including Gaming Laws) applicable to the Company,
its Subsidiaries and their respective businesses and activities,
except for such noncompliance that has not had, and would not be
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
(b)
The Company and each Subsidiary of the Company has and maintains in
full force and effect, and is in compliance with, all Permits and
all orders from Governmental Authorities necessary for the Company
and each Subsidiary to carry on their respective businesses as
currently conducted and currently proposed to be conducted, except
as has not had,
20
and would not be reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the
corresponding sections or subsections of the disclosure letter
delivered to the Company by Parent and Merger Sub concurrently with
the execution and delivery of this Agreement (the “Parent
Disclosure Letter”) (provided that the listing of an item in
one section of the Parent Disclosure Letter shall be deemed to be a
listing in each section of the Parent Disclosure Letter to which
such item relates only to the extent that it is reasonably apparent
from a reading of such disclosure that it also qualifies or applies
to such other section), Parent and Merger Sub jointly and severally
hereby represent and warrant to the Company that:
Section
5.1.
Corporate Existence and Power . Each of Parent, a
limited liability company, and Merger Sub, a corporation, is duly
organized, validly existing and in good standing under the laws of
Nevada. Parent has all limited liability company power and
authority, and Merger Sub has all corporate power and authority,
required to execute and deliver this Agreement and to consummate
the Merger and the other transactions contemplated hereby and to
perform each of its obligations hereunder.
Section
5.2.
Corporate Authorization . The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Parent and Merger
Sub. No other corporate proceedings other than those
previously taken or conducted on the part of Parent or Merger Sub
are necessary to approve this Agreement or to consummate the other
transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Parent and Merger Sub
and, assuming the due and valid execution and delivery of the
Agreement by the Company, constitutes a legal, valid and binding
agreement of Parent and Merger Sub, respectively, enforceable
against Parent and Merger Sub in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar Laws affecting the
enforcement of creditors’ rights generally and general
equitable principles.
Section
5.3.
Governmental Authorization . The execution, delivery
and performance by Parent and Merger Sub of this Agreement and the
consummation by Parent and Merger Sub of the Merger and other
transactions contemplated by this Agreement do not require any
consent, approval, authorization or permit of, action by, filing
with or notification to any Governmental Authority, other than
(i) the filing of the Articles of Merger; (ii) compliance
with the applicable requirements of the HSR Act; (iii) filings
with, and approvals by, Gaming Authorities specified in
Section 5.3(iii) of the Parent Disclosure Letter,
(iv) compliance with the applicable requirements of the
Exchange Act including the filing of the Schedule 13E-3;
(v) compliance with any applicable state securities or Blue
Sky laws; and (vi) any such consent, approval, authorization,
permit, action, filing or notification the failure of which to make
or obtain would not be reasonably likely to adversely effect in any
material respect, or prevent or
21
materially delay, the consummation
of the Merger or Parent’s or Merger Sub’s ability to
observe and perform its material obligations hereunder.
Section
5.4.
Non-Contravention . The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby do not and will not
(i) contravene or conflict with the organizational or
governing documents of Parent or Merger Sub, (ii) assuming
compliance with the items specified in Section 5.3,
contravene, conflict with or constitute a violation of any
provision of any Law binding upon or applicable to Parent or Merger
Sub or any of their respective properties or assets, or
(iii) require the consent, approval or authorization of, or
notice to or filing with any third party with respect to, result in
any breach or violation of or constitute a default (or an event
which with notice or lapse of time or both would become a default),
or give rise to any right of termination, cancellation, amendment
or acceleration of any right or obligation of Parent or Merger Sub
or to a loss of any material benefit to which Parent or Merger Sub
is entitled under any Contract.
Section
5.5.
Disclosure Documents . None of the information
supplied or to be supplied by Parent or Merger Sub or any of their
respective Affiliates specifically for inclusion in the Company
Proxy Statement or Schedule 13E-3 will, at the date it is
filed with the SEC (in the case of the Schedule 13E-3), at the
date it is first mailed to stockholders of the Company (in the case
of the Company Proxy Statement), at the time of any amendments
thereof or supplements thereof and at the time of the Company
Stockholder Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading.
Section
5.6.
Finders’ Fees . No agent, broker, investment
banker, financial advisor or other firm or person except Deutsche
Bank Securities Inc. is or will be entitled to any broker’s
or finder’s fee or any other similar commission or fee
payable by Parent or Merger Sub in connection with any of the
transactions contemplated by this Agreement.
Section
5.7.
Financing . Parent has delivered to the Company true
and complete copies of (i) the commitment letter with respect
to the senior credit facilities, dated as of the date hereof, among
Parent and Deutsche Bank Securities Inc., Deutsche Bank Trust
Company Americas and JPMorgan Chase Bank and (ii) the commitment
letter with respect to the first lien mortgage loan, dated as of
the date hereof, among Parent and German American Capital
Corporation, Deutsche Bank AG, New York Branch and JPMorgan Chase
Bank (collectively, the “Debt Financing Commitments”),
pursuant to which the lenders party thereto committed, subject to
the terms thereof, to lend the amounts set forth therein (the
“Debt Financing”), and (iii) the equity commitment
letter, dated as of the date hereof, from FC Investor, LLC (the
“Equity Financing Commitment” and, together with the
Debt Financing Commitments, the “Financing
Commitments”), pursuant to which such parties have committed,
subject to the terms thereof, to invest the cash amounts set forth
therein (the “Equity Financing” and, together with the
Debt Financing, the “Financing”). The Financing
Commitments are in full force and effect and are legal, valid and
binding obligations of Parent and, to the knowledge of Parent, the
other parties thereto. None of the Financing Commitments has
been or will be amended or modified, except as consistent with
Section 7.9(c), and the respective commitments contained in
the
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Financing Commitments have not been
withdrawn or rescinded in any respect as of the date hereof.
As of the date of this Agreement, no event has occurred which,
with
