EXHIBIT 99.1 CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
dated as of February 8, 1999
among
Jackpot Enterprises, Inc.
JEI Merger Corp.
and
Players International, Inc.
EXHIBIT 99.1 CONFORMED COPY
TABLE OF CONTENTS
Page
ARTICLE I.
THE MERGER..................................................................1
Section 1.1. The Merger....................................................1
Section 1.2. Effective Time of the Merger..................................2
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................................................................3
Section 2.1. Conversion of Securities......................................3
Section 2.2. Exchange of Certificates......................................4
Section 2.3. Acceleration and Payment for Players Options..................6
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF Players...................................7
Section 3.1. Organization of Players and its Subsidiaries..................7
Section 3.2. Capitalization................................................8
Section 3.3. Authority; No Conflict; Required Filings and Consents.........9
Section 3.4. Public Filings; Financial Statements.........................11
Section 3.5. No Undisclosed Liabilities...................................11
Section 3.6. Absence of Certain Changes or Events.........................11
Section 3.7. Taxes........................................................12
Section 3.8. Real Property, Title and Related Matters.....................13
Section 3.9. Title to Personal Property; Liens............................14
Section 3.10. Intellectual Property........................................15
Section 3.11. Agreements, Contracts and Commitments........................15
Section 3.12. Litigation...................................................16
Section 3.13. Environmental Matters........................................16
Section 3.14. Employee Benefit Plans.......................................17
Section 3.15. Compliance...................................................19
Section 3.16. Labor Matters................................................20
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EXHIBIT 99.1 CONFORMED COPY
Section 3.17. Insurance....................................................20
Section 3.18. Information in Proxy Statement/Prospectus....................20
Section 3.19. State Takeover Statute.......................................21
Section 3.20. Voting Requirements..........................................21
Section 3.21. Players Rights Agreement.....................................21
Section 3.22. Year 2000....................................................21
Section 3.23. Opinion of Financial Advisor.................................21
Section 3.24. Brokers......................................................22
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB.....................22
Section 4.1. Organization of Buyer and its Subsidiaries...................22
Section 4.2. Capitalization...............................................23
Section 4.3. Authority; No Conflict; Required Filings and Consents........24
Section 4.4. Public Filings; Financial Statements.........................25
Section 4.5. No Undisclosed Liabilities...................................26
Section 4.6. Absence of Certain Changes or Events.........................26
Section 4.7. Taxes........................................................26
Section 4.8. Real Property, Title and Related Matters.....................27
Section 4.9. Title to Personal Property; Liens............................28
Section 4.10. Intellectual Property........................................28
Section 4.11. Agreements, Contracts and Commitments........................28
Section 4.12. Litigation...................................................29
Section 4.13. Environmental Matters........................................29
Section 4.14. Employee Benefit Plans.......................................30
Section 4.15. Compliance...................................................31
Section 4.16. Registration Statement; Joint Proxy Statement/Prospectus.....32
Section 4.17. Labor Matters................................................33
Section 4.18. Insurance....................................................33
Section 4.19. [Intentionally Omitted]......................................33
Section 4.20. Voting Requirements..........................................33
Section 4.21. Year 2000....................................................34
Section 4.22. Opinion of Financial Advisor.................................34
Section 4.23. Brokers......................................................34
Section 4.24. No Operations or Liabilities of Merger Sub...................34
Section 4.25. Ownership of Securities......................................34
ARTICLE V.
COVENANTS..................................................................35
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EXHIBIT 99.1 CONFORMED COPY
Section 5.1. Conduct of Business..........................................35
Section 5.2. Cooperation; Notice; Cure....................................39
Section 5.3. No Solicitation..............................................39
Section 5.4. Joint Proxy Statement/ Prospectus; Registration Statement....40
Section 5.5. Special Meeting..............................................40
Section 5.6. Access to Information........................................41
Section 5.7. Governmental Approvals.......................................41
Section 5.8. Publicity....................................................42
Section 5.9. Indemnification..............................................42
Section 5.10. Stockholder Litigation.......................................43
Section 5.11. Employee Benefits............................................43
Section 5.12. Further Assurances and Actions...............................44
Section 5.13. Rights Plan..................................................45
Section 5.14. Buyer's Board of Directors...................................45
ARTICLE VI.
CONDITIONS TO MERGER.......................................................45
Section 6.1. Conditions to Each Party's Obligation to Effect the Merger...45
Section 6.2. Additional Conditions to Obligations of Players..............46
Section 6.3. Additional Conditions to Obligations of Buyer................47
ARTICLE VII.
TERMINATION AND AMENDMENT..................................................47
Section 7.1. Termination..................................................47
Section 7.2. Effect of Termination........................................49
Section 7.3. Fees and Expenses............................................49
Section 7.4. Amendment....................................................51
Section 7.5. Extension; Waiver............................................51
ARTICLE VIII.
MISCELLANEOUS..............................................................51
Section 8.1. Nonsurvival of Representations, Warranties and Agreements....51
Section 8.2. Notices......................................................51
Section 8.3. Interpretation...............................................52
Section 8.4. Counterparts.................................................53
Section 8.5. Entire Agreement; No Third Party Beneficiaries...............53
Section 8.6. Governing Law................................................53
Section 8.7. Assignment...................................................53
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EXHIBIT 99.1 CONFORMED COPY
Section 8.8. Severability; Enforcement....................................53
Section 8.9. Specific Performance.........................................53
iv
TABLE OF DEFINED TERMS
Cross Reference
Terms in Agreement
----- ---------------
Accountant Section 5.11(d)
Accountant's Report Section 5.11(d)
Acquisition Proposal Section 5.3
Agreement Preamble
Articles of Merger Section 1.2
Average Buyer Common Stock Price Section 2.1(a)
Buyer Preamble
Buyer Balance Sheet Section 4.4(b)
Buyer Common Stock Section 2.1(a)
Buyer Disclosure Schedule Article IV
Buyer Employee Plans Section 4.14(a)
Buyer Gaming Laws Section 4.15(b)
Buyer Material Adverse Effect Section 4.1
Buyer Material Contracts Section 4.11(a)
Buyer Options Section 4.2(a)
Buyer Permits Section 4.15(a)
Buyer Preferred Stock Section 4.2(a)
Buyer Reporting Subsidiaries Section 4.4(a)
Buyer SEC Reports Section 4.4(a)
Buyer Special Meeting Section 5.5
Buyers Stock Option Plans Section 4.2(a)
Buyer Stockholder Approval Section 4.20
Buyer Welfare Plan Section 4.14(g)
Cash Consideration Section 2.1(a)
Certificate Section 2.1(f)
Closing Section 1.3
Closing Date Section 1.3
Code Section 2.2(f)
Confidentiality Agreement Section 5.6
CRC Section 5.1(b)
CRC Transaction Section 5.1(b)
DLJ Section 3.23
Encumbrances Section 3.8(b)
Effective Time Section 1.2
Employment Agreements Section 5.11(d)
Environmental Law Section 3.13(b)
ERISA Section 3.14(a)
v
Cross Reference
Terms in Agreement
----- ---------------
ERISA Affiliate Section 3.14(a)
Exchange Act Section 3.3(c)
Exchange Agent Section 2.2(a)
Exchange Fund Section 2.2(a)
Exchange Ratio Section 2.1(a)
Executives Section 5.11(d)
GAAP Section 3.4(b)
Governmental Approvals Section 5.7(a)
Governmental Entity Section 3.3(c)
Hazardous Substance Section 3.13(c)
HSR Act Section 3.3(c)
Indebtedness Section 3.11(a)
Indemnified Parties Section 5.9(a)
IRS Section 3.7(b)
Joint Proxy Statement/Prospectus Section 5.4(a)
Leased Real Property Section 3.8(b)
Liens Section 3.1
Merger Preamble
Merger Consideration Section 2.1(a)
Merger Sub Preamble
Merger Sub Common Stock Section 4.2(c)
Xxxxxxx Xxxxx Section 4.22
Multiemployer Plan Section 3.14(e)
Notifying Party Section 5.7(a)
NRS Section 1.1
NYSE Section 2.1(a)
Offer Documents Section 5.12(c)
Offer to Purchase Section 5.12(c)
Outside Date Section 7.1(b)
Owned Real Property Section 3.8(b)
PBGC Section 3.14(f)
Permitted Encumbrances Section 3.8(b)
Per Share Amount Section 2.1(a)
Perskie Option Section 2.3
Players Preamble
Players Balance Sheet Section 3.4(b)
Players Common Stock Section 2.1(a)
Players Disclosure Schedule Article III
Players Employee Plans Section 3.14(a)
Players Gaming Laws Section 3.15(b)
vi
Cross Reference
Terms in Agreement
----- ---------------
Players, Inc. Section 1.5
Players Material Adverse Effect Section 3.1
Players Material Contracts Section 3.11(a)
Players Option Section 2.3
Players Permits Section 3.15(a)
Players Preferred Stock Section 3.2(a)
Players Rights Plan Section 3.2(b)
Players SAR Section 2.3
Players SEC Reports Section 3.4(a)
Players Special Meeting Section 5.5
Players Stockholder Approval Section 3.20
Players Stock Option Plans Section 2.3
Players Welfare Plan Section 3.14(g)
Reduced Amount Section 5.11(d)
Registration Statement Section 5.4(a)
Rights Agreement Section 3.21
SEC Section 3.3(c)
Securities Act Section 3.4(a)
Senior Notes Section 5.12(c)
Software Section 3.22
Stock Consideration Section 2.1(a)
Stockholder Support Agreements Preamble
Stock Option Plan for Non-Employee Directors Section 2.3
Subsidiary Section 3.1
Superior Proposal Section 5.3
Surviving Corporation Section 1.1
Taxes Section 3.7(a)
Tender Offer Section 5.12(c)
Tender Offer and Consent Solicitation Section 5.12(c)
Terminating Buyer Breach Section 7.1(h)
Terminating Players Breach Section 7.1(g)
Third Party Section 5.3
Voting Debt Section 3.2(b)
Warrant Agreement Section 2.3
1985 Plan Section 2.3
1990 Plan Section 2.3
1993 Plan Section 2.3
1994 Plan Section 2.3
vii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of February 8,
1999, by and among JACKPOT ENTERPRISES, INC., a Nevada corporation ("Buyer"),
JEI MERGER CORP., a Nevada corporation and a wholly-owned subsidiary of Buyer
("Merger Sub"), and PLAYERS INTERNATIONAL, INC., a Nevada corporation
("Players").
WHEREAS, the Board of Directors of Players has determined that the
merger of Merger Sub with and into Players, upon the terms and subject to the
conditions set forth in this Agreement (the "Merger"), is fair to, and in the
best interests of, Players and its stockholders;
WHEREAS, the Boards of Directors of Buyer and Merger Sub have
determined that the Merger is in the best interests of Buyer and Merger Sub and
their respective stockholders;
WHEREAS, the Boards of Directors of Buyer, Merger Sub and Players have
each approved and adopted this Agreement and approved the Merger and the other
transactions contemplated hereby; and
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to each of Players', Buyer's and Merger Sub's
willingness to enter into this Agreement, certain stockholders of Players and of
Buyer have entered into Stockholder Support Agreements with Buyer and Players,
respectively, dated as of the date of this Agreement in the forms 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 Players or Buyer, as the case may be, beneficially owned by them in favor of
approval of the transactions contemplated by this Agreement;
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 Players. As a result of the Merger, the
separate corporate existence of Merger Sub shall cease and Players 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 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 date of filing of the Articles of Merger or
at such time within 90 days of the date of filing 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 Buyer and Players, 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 Buyer and Players.
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 Players shall vest
in the Surviving Corporation, and all debts, liabilities and duties of Merger
Sub and Players 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 "Players International, 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:
2
(a) Players Common Stock. Each share of common stock, par
value $0.005 per share, of Players ("Players Common Stock") issued and
outstanding immediately prior to the Effective Time (other than shares to be
canceled in accordance with Section 2.1(b)), together with all rights in respect
thereto, shall be converted, subject to Section 2.1(e) and 2.1(f), into the
right to receive from the Surviving Corporation (i) a net amount of $6.75 in
cash, without interest and subject to adjustment in accordance with the next
sentence (the "Cash Consideration") and (ii) a fraction (the "Exchange Ratio")
of a share of common stock, par value $.01 per share of Buyer ("Buyer Common
Stock") equal to the quotient (calculated to the nearest 0.0001) of $1.50
divided by the Average Buyer Common Stock Price (as defined herein); provided
that the Exchange Ratio shall not exceed 0.30 (the "Stock Consideration" and
together with the Cash Consideration, the "Merger Consideration"). If but for
the proviso in the preceding sentence the Exchange Ratio would have exceeded
0.30, Buyer may increase the Cash Consideration amount specified in clause (i)
above by the amount necessary so that at the Effective Time the sum of (a) the
Cash Consideration (as so increased) and (b) the Average Buyer Common Stock
Price multiplied by the Exchange Ratio is equal to $8.25. If Buyer fails to
increase the Merger Consideration to the amount set forth in the preceding
sentence, Players may terminate this Agreement.
For purposes of this Agreement, "Average Buyer Common Stock
Price" shall mean the average regular way closing price per share of Buyer
Common Stock on the New York Stock Exchange (the "NYSE") as reported on the NYSE
Composite Tape during the thirty (30) consecutive NYSE trading days immediately
preceding the second NYSE trading day prior to the Closing Date.
All shares of Buyer Common Stock issued as Merger
Consideration shall be validly issued, fully-paid and non-assessable. As of the
Effective Time, all shares of Players Common Stock upon which the Merger
Consideration is payable pursuant to this Section 2.1(a) shall no longer be
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 in exchange for such shares upon the surrender
of such certificate in accordance with Section 2.2.
(b) Cancellation of Treasury Stock and Buyer-Owned Stock. All
shares of Players Common Stock that are owned by Players as treasury stock and
any shares of Players Common Stock owned by Buyer or any wholly-owned Subsidiary
(as defined in Section 3.1) of Buyer 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) Players Debt Securities. Except as otherwise repaid,
redeemed or purchased in connection with the transactions contemplated hereby,
all notes and other debt instruments of
3
Players 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.
(e) Adjustments to Merger Consideration. The Merger
Consideration shall be adjusted to reflect fully the effect of any stock split,
reverse split, stock dividend (including any dividend or distribution of
securities convertible into Players Common Stock, as applicable),
reorganization, recapitalization or any other like change with respect to
Players Common Stock or Buyer Common Stock occurring after the date hereof and
prior to the Effective Time.
(f) Fractional Shares. No certificates or scrip representing
fractional shares of Buyer Common Stock shall be issued in connection with the
Merger, and fractional share interests will not entitle the owner thereof to
vote or to any other rights as a stockholder of Buyer. In lieu of any such
fractional shares, each holder of a certificate evidencing Players Common Stock
(a "Certificate") upon surrender of such Certificate for exchange shall be paid
an amount in cash (without interest), rounded up to the nearest cent, determined
by multiplying (i) the Average Buyer Common Stock Price, by (ii) the fractional
interest to which such holder would otherwise be entitled (after taking into
account all shares of Players Common Stock then held of record by such holder).
Section 2.2. Exchange of Certificates.
(a) Exchange Agent. At or prior to the Effective Time, Buyer
shall deposit with a bank or trust company designated by Buyer (the "Exchange
Agent"), for the benefit of the holders of shares of Players Common Stock
outstanding immediately prior to the Effective Time, for exchange in accordance
with this Section 2.2, through the Exchange Agent, (i) certificates evidencing
the shares of Buyer Common Stock sufficient to pay the Stock Consideration and
(ii) cash in an aggregate amount sufficient to pay the Cash Consideration and
for fractional shares pursuant to Section 2.1(f) (the shares and cash so
deposited being hereinafter referred to collectively as the "Exchange Fund").
Any interest, dividends or other income earned on the investment of cash or
other property held in the Exchange Fund shall be for the account of and payable
to Buyer.
(b) Exchange Procedures. Promptly after the Effective Time,
Buyer will instruct the Exchange Agent to mail to each holder of record of
Players Common Stock (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to a Certificate shall
pass, only upon proper delivery of the Certificate to the Exchange Agent and
shall be in such form and have such other provisions as Buyer may reasonably
specify), and (ii) instructions to effect the surrender of the Certificate in
exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, and such other customary documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor cash in an amount equal to the Merger Consideration
multiplied by the number of shares represented by such Certificate, and the
Certificate so registered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Players Common Stock which is not registered
in the transfer records of
4
Players as of the Effective Time, the Merger Consideration may be issued and
paid in accordance with this Article II to a transferee if the Certificate
evidencing such shares of Players Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer pursuant to this Section 2.2(b) and by evidence that any applicable
stock transfer taxes have been paid. Until so surrendered, each outstanding
Certificate that prior to the Effective Time represented shares of Players
Common Stock will be deemed from and after the Effective Time for all corporate
purposes (other than the payment of dividends and subject to Section 2.1(e)), to
evidence the right to receive the Merger Consideration without interest. No
interest will be paid or will accrue on the cash payable upon the surrender of
any Certificate.
(c) Transfers of Ownership. At the Effective Time, the stock
transfer books of Players shall be closed, and there shall be no further
registration of transfers of Players Common Stock thereafter on the records of
Players.
(d) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the former stockholders of Players as of the
date which is twelve months after the Effective Time shall be delivered to
Buyer, upon demand, and thereafter such former stockholders of Players who have
not theretofore complied with this Section 2.2 shall be entitled to look only to
Buyer for payment of the Merger Consideration to which they are entitled
pursuant hereto.
(e) No Liability. None of Buyer, Merger Sub, Players or the
Exchange Agent shall be liable to any holder of Players Common Stock for any
Merger Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates shall not have
been surrendered immediately prior to the date on which the Merger Consideration
or any dividends or distributions with respect to Players Common Stock in
respect of such Certificate would otherwise escheat to or become the property of
any Governmental Entity, any such Merger Consideration, dividends or
distributions in respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto on such date
prior to the time such escheat laws become applicable.
(f) Withholding Rights. Buyer or the Exchange Agent shall be
entitled to deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of Certificates which prior to the
Effective Time represented shares of Players Common Stock such amounts as Buyer
or the Exchange Agent is required to deduct and withhold with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local, or foreign tax law. To the extent
that amounts are so withheld by Buyer or the Exchange Agent and remitted to the
proper authority, such withheld amounts thereafter shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Players Common Stock in respect of which such deduction and withholding was made
by Buyer or the Exchange Agent.
5
(g) Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
pay in exchange for such lost, stolen or destroyed Certificates, upon the making
of an affidavit of that fact by the holder thereof such Merger Consideration as
may be required pursuant to Section 2.2; provided, however, that Buyer may, in
its discretion, and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed Certificates to deliver a bond in
such sum as it may reasonably direct as indemnity against any claim that may be
made against Buyer, the Surviving Corporation or the Exchange Agent with respect
to the Certificates alleged to have been lost, stolen or destroyed.
(h) Distributions with Respect to Unsurrendered Certificates.
No dividends or other distributions declared or made after the Effective Time
with respect to Buyer Common Stock with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect to the
shares of Buyer Common Stock the holder thereof is entitled to receive upon
surrender thereof, and no cash payment in lieu of any fractional shares shall be
paid to any such holder pursuant to Section 2.1(f), until the holder of such
Certificate shall surrender such Certificate. Subject to the effect of escheat,
tax or other applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of Certificates representing whole shares of Buyer
Common Stock issued in exchange therefor, without interest, (i) promptly, the
amount of any cash payable with respect to a fractional share of Buyer Common
Stock to which such holder is entitled pursuant to Section 2.1(f) and the amount
of dividends or other distributions with a record date after the Effective Time
and theretofore paid with respect to such whole shares of Buyer Common Stock,
and (ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole shares of Buyer Common Stock. After the Effective Time, each
outstanding Certificate which theretofore represented shares of Players Common
Stock shall, until surrendered for exchange in accordance with this Section 2.2,
be deemed for all purposes to evidence ownership of the number of shares of
Buyer Common Stock and cash into which the shares of Players Common Stock
(which, prior to the Effective Time, were represented thereby) shall have been
so converted.
Section 2.3. Acceleration and Payment for Players Options. Following
the execution of this Agreement, the Board of Directors of Players (or, if
appropriate, any committee administering the Players Stock Option Plans (as
defined below)) shall adopt such resolutions or use its best efforts to take
such other actions as are required to provide that each then outstanding stock
option to purchase shares of Players Common Stock (a "Players Option")
heretofore granted under any stock option or other stock-based incentive plan,
program or arrangement of Players including (i) the 1985 Incentive Stock Option
Plan ("1985 Plan"), (ii) the 1990 Incentive Stock Option and Non-Qualified
Option Plan ("1990 Plan"), (iii) the Amended and Restated 1993 Stock Incentive
Plan ("1993 Plan"), (iv) the 1994 Directors Stock Incentive Plan ("1994 Plan"),
(v) the Stock Option Plan for Non-Employee Directors (which consists of
individual option grants in 1993 to outside directors) ("Stock Option Plan for
Non-Employee Directors"), (vi) the option granted to Xxxxxx X. Xxxxxxx pursuant
to the Retirement Agreement and General Release, dated September 30, 1996
("Perskie Option") (with the plans referred to in clauses (i)-(vi) above
collectively referred to as the "Players
6
Stock Option Plans") and (vii) the Warrant Agreement dated as of June 16, 1994
between Players and Gem Gaming, Inc. (the "Warrant Agreement") shall be
accelerated and canceled immediately prior to the Effective Time in exchange for
payment of an amount of cash equal to the product of (x) the number of shares of
Players Common Stock subject to such Stock Option immediately prior to the
consummation of the Merger and (y) the excess, if any, of the Merger
Consideration over the per share exercise price of such Stock Option; provided,
however, that such excess shall not be less than zero. Notwithstanding anything
in this Section 2.3 to the contrary, any Players Option or stock appreciation
right ("Players SAR") granted under any stock option or other stock-based
incentive plan, program or arrangement of Players, including, without
limitation, the Players Stock Option Plans and Warrant Agreement, having a per
share exercise price that is greater than the Merger Consideration, whether or
not vested and exercisable, shall be accelerated and, if not exercised before
the Effective Time, shall be canceled as of the Effective Time and shall have no
further force or effect as of the Effective Time, without regard to the fact
that the holder of such Players Option or Players SAR shall have received no
payment for the Players Option or Players SAR.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF Players
Players represents and warrants to Buyer 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 Players to Buyer and
Merger Sub on or before the date of this Agreement (the "Players Disclosure
Schedule"), or as otherwise expressly contemplated by this Agreement. Any
reference in the Merger Agreement to Players' "best knowledge," or "the best of
Players' knowledge," or words of similar import, shall be deemed a reference to
the actual knowledge of any of the corporate officers of Players or any of its
Subsidiaries, for all purposes. The Players Disclosure Schedule has been
prepared based upon the foregoing definition.
Section 3.1. Organization of Players and its Subsidiaries. Each of
Players 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 Players 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) or results of operations of Players and its
Subsidiaries, taken as a whole (a "Players Material Adverse Effect"). Players
has delivered to Buyer a true and correct copy of the Articles of Incorporation
and Bylaws of Players, in each case as amended to the date of this Agreement.
Assuming regulatory compliance by Buyer, the respective organizational documents
of Players' Subsidiaries do not contain any provision that would limit or
otherwise restrict the ability of Buyer, following the Effective Time, from
owning or operating such Subsidiaries on the same basis as Players. Except as
set forth on the Players
7
Disclosure Schedule, all the outstanding shares of capital stock of, or other
equity interests in, each such Subsidiary have been validly issued and are fully
paid and nonassessable and are owned directly or indirectly by Players, free and
clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens") and free of
any other restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests). Except as
set forth in Exhibit 21(18) to the Players Annual Report on Form 10-K for the
year ended March 31, 1998, neither Players nor any of its Subsidiaries directly
or indirectly owns (other than ownership interests in Players 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.
Section 3.2. Capitalization.
(a) The authorized capital stock of Players consists of
90,000,000 shares of Players Common Stock, $0.005 par value per share, and
10,000,000 shares of preferred stock, with no par value per share ("Players
Preferred Stock"). As of the date hereof, (i) 32,024,737 shares of Players
Common Stock were issued and outstanding, all of which are validly issued, fully
paid and nonassessable, (ii) 672,100 shares of Players Common Stock were held in
the treasury of Players or by Subsidiaries of Players, and (iii) no shares of
Players Preferred Stock are issued and outstanding. Section 3.2(a)(i) of the
Players Disclosure Schedule sets forth the number of shares of Players Common
Stock reserved for future issuance upon exercise of Players Options granted and
outstanding as of the date hereof and under the Players Stock Option Plans.
Section 3.2(a)(i) of the Players Disclosure Schedule also sets forth as of the
date hereof, for each Players Stock Option Plan, the dates on which Options and
Players SARs which are still outstanding under such plan were granted, the
number of outstanding Options and Players SARs granted on each such date and the
exercise price thereof. Except as disclosed in Section 3.2(a)(i) of the Players
Disclosure Schedule, since September 30, 1998 through the date of this
Agreement, Players has not made any grants under any of the Players Stock Option
Plans. Except as disclosed in Section 3.2(a)(i) of the Players Disclosure
Schedule with respect to Players SARs, as of the date of this Agreement, Players
has not granted any contractual rights the value of which is derived from the
financial performance of Players or from the value of shares of Players Common
Stock. Except as disclosed in Section 3.2(a)(ii) of the Players Disclosure
Schedule, there are no obligations contingent or otherwise, of Players or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
Players 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
8
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
Players' Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable and, except as disclosed in Section 3.2(a)(iii) of the Players
Disclosure Schedule and except as required by gaming industry regulation, all
such shares and ownership interests are owned by Players or another Subsidiary
of Players free and clear of all security interests, liens, claims, pledges,
agreements, limitations on Players' 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 Players or any of its Subsidiaries issued and
outstanding. Except as set forth in Section 3.2(a) or in this Section 3.2(b) or
as reserved for future grants of options under the Players Stock Option Plans
and except for the common stock purchase rights issued and issuable under the
Stockholders' Rights Plan dated as of January 27, 1997 (the "Players Rights
Plan"), as of the date hereof, (i) there are no shares of capital stock of any
class of Players, or any security exchangeable into or exercisable for such
equity securities, issued, reserved for issuance or outstanding; (ii) except as
set forth in Section 3.2(b) of the Players Disclosure Schedule there are no
options, warrants, equity securities, calls, rights, commitments or agreements
of any character to which Players or any of its Subsidiaries is a party or by
which it is bound obligating Players 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 Players or
any of its Subsidiaries or obligating Players 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 Players. All shares of Players 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.
Section 3.3. Authority; No Conflict; Required Filings and Consents.
(a) Players has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Players have been duly
authorized by all necessary corporate action on the part of Players, subject
only to the approval and adoption of this Agreement and the Merger by a majority
of Players' stockholders. This Agreement has been duly executed and delivered by
Players and constitutes the valid and binding obligation of Players, enforceable
against Players in accordance with its terms.
(b) Other than as disclosed in Section 3.3(b) of the Players
Disclosure Schedule, the execution and delivery of this Agreement by Players
does not, and the consummation of the transactions contemplated hereby will not,
(i) conflict with, or result in any violation or breach of, any provision of the
Articles of Incorporation or Bylaws of Players or the comparable charter or
9
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 Players 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 Players 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
Players Material Adverse Effect or (y) would not prevent or materially delay the
consummation of the Merger.
(c) Except as disclosed in Section 3.3(c) of the Players
Disclosure Schedule, 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 Players or any of its
Subsidiaries in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, 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"), (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 any Joint Proxy Statement/Prospectus
(as such term is defined in Section 5.4(a) below) with the Securities and
Exchange Commission (the "SEC") in accordance with the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (iv) any approvals and filing of
notices required under any applicable gaming industry regulation, (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
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, and (vii) such other filings,
consents, approvals, orders, registrations and declarations as may be required
under the laws of any jurisdiction in which Players or any of its Subsidiaries
conducts any business or owns any assets the failure of which to obtain would
not have a Players Material Adverse Effect.
Section 3.4. Public Filings; Financial Statements.
(a) None of Players' Subsidiaries is required to file forms,
reports and documents with the SEC. Players has filed with the SEC all reports,
schedules, forms, statements and other documents required to be filed by the
Securities Act and the Exchange Act since March 31, 1998. Except as set forth in
Section 3.4(a) of the Players Disclosure Schedule and except for matters
otherwise corrected by the subsequent filing with the SEC of an appropriate
amendment prior to the date of this Agreement, the reports, forms, documents
filed by Players with the SEC prior to the date
10
of this Agreement (the "Players 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
Players SEC Reports or necessary in order to make the statements in such Players
SEC Reports, in the light of the circumstances under which they were made, not
misleading.
(b) Except as set forth in Section 3.4(a), each of the
consolidated financial statements (including, in each case, any related notes)
of Players contained in the Players 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 Players 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 statements were or are subject to
normal and recurring year-end adjustments which, with respect to interim periods
since December 31, 1998, were not or are not expected to be material in amount.
The audited balance sheet of Players as of March 31, 1998 is referred to herein
as the "Players Balance Sheet."
Section 3.5. No Undisclosed Liabilities. Except as disclosed in the
Players SEC Reports or in Section 3.5 of the Players Disclosure Schedule, and
except for liabilities and obligations incurred since the date of the Players
Balance Sheet in the ordinary course of business consistent with past practices,
Players and its consolidated Subsidiaries do not have any liabilities accrued,
contingent or otherwise, of the type required to be reflected in financial
statements, including the notes thereto, in accordance with GAAP, and whether
due or to become due, which would be reasonably likely to have a Players
Material Adverse Effect.
Section 3.6. Absence of Certain Changes or Events. Except as disclosed
in the Players SEC Reports or in Section 3.6 of the Players Disclosure Schedule
since the date of the Players Balance Sheet, Players and its Subsidiaries have
conducted their respective businesses only in the ordinary course consistent
with past practice, and there has not been (i) any Players Material Adverse
Effect, (ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of
Players' capital stock, (iii) any split, combination or reclassification of any
of its 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 its
capital stock, (iv) (w) any granting by Players or any of its Subsidiaries to
any director or officer of Players or its Subsidiaries of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of the date
of the most recent financial statements included in the Players SEC Reports, (x)
any granting by Players
11
or any of its Subsidiaries to any director or officer of any stock options,
except as was required under employment agreements in effect as of the date of
the most recent financial statements included in the Players SEC Reports, (y)
any granting by Players or any of its Subsidiaries to any officer of any
increase in severance or termination pay, except as was required under any
employment, severance or termination agreements, plans or arrangements in effect
as of the date of the most recent financial statements included in the Players
SEC Reports or (z) any entry by Players or any of its Subsidiaries into any
employment, severance or termination agreement with any officer, (v) any change
in accounting methods, principles or practices having a material adverse effect
on Players, except insofar as may have been required by a change in GAAP, (vi)
any tax election that individually or in the aggregate would have a Players
Material Adverse Effect, or (vii) any settlement of pending or threatened
litigation involving Players or any of its Subsidiaries (whether brought by a
private party or a Governmental Entity) other than any settlement which is not
reasonably likely to have a Players Material Adverse Effect.
Section 3.7. Taxes.
(a) For the purposes of this Agreement, a "Tax" or,
collectively, "Taxes," means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
gains, franchise, withholding, payroll, recapture, employment, excise,
unemployment insurance, social security, business license, occupation, business
organization, stamp, environmental and property taxes, together with all
interest, penalties and additions imposed with respect to such amounts. 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. ss. 1.1502-6 or comparable
provisions of state, local or foreign tax law) and including any liability for
Taxes of any predecessor entity.
(b) Players and each of its Subsidiaries have (i) filed all
federal, state, local and foreign Tax returns and reports required to be filed
by them prior to the date of this Agreement (taking into account all applicable
extensions) and such Tax returns and reports (taking into account all amendments
thereto) are true, correct and complete in all material respects, (ii) paid or
accrued all Taxes due and payable, and (iii) paid or accrued all Taxes for which
a notice of assessment or collection has been received (other than amounts being
contested in good faith by appropriate proceedings with the relevant taxing
authority and for which adequate reserves in accordance with GAAP are being
maintained). Except as set forth in Section 3.7(b) of the Players Disclosure
Schedule, neither the Internal Revenue Service (the "IRS") nor any other taxing
authority has asserted any claim for Taxes, or to the actual knowledge of the
executive officers of Players, is threatening to assert any claims for Taxes.
Players and its Subsidiaries have withheld or collected and paid over to the
appropriate governmental authorities (or are properly holding for such payment)
all Taxes required by law to be withheld or collected. Neither Players nor any
of its Subsidiaries has made an election under Section 341(f) of the Code. There
are no liens for Taxes upon the assets of Players or any of its Subsidiaries
(other than liens for Taxes that are not yet due or delinquent or that
12
are being contested in good faith by appropriate proceedings, with the relevant
taxing authority and for which adequate reserves in accordance with GAAP are
being maintained).
(c) Neither Players 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) other than a group the common parent of which is or was Players or any
Subsidiary of Players.
(d) Neither Players nor any of its Subsidiaries has any
obligation under any agreement or arrangement with any other person with respect
to Taxes of such other person (including pursuant to Treas. Reg. ss. 1.1502-6 or
comparable provisions of state, local or foreign tax law) and including any
liability for Taxes of any predecessor entity.
Section 3.8. Real Property, Title and Related Matters.
(a) Real Property. Section 3.8 (a) of the Players Disclosure
Schedule sets forth a true and complete list as of the date of this Agreement of
(i) all contracts or agreements relating to the Leased Real Property, and (ii) a
brief description of each piece of Owned Real Property. Players or a Subsidiary
of Players, as the case may be, has (A) good and marketable title to all Owned
Real Property and to all fixtures thereon, free and clear of any Encumbrances,
except for Permitted Encumbrances, and (B) except as set forth in Section 3.8(a)
of the Players Disclosure Schedule, Item (I)(1)(c), the right to quiet enjoyment
of the Leased Real Property for the full term of the leases. Each lease or other
contract referred to in Section 3.8(a) of the Players Disclosure Schedule is a
valid contract or agreement enforceable against Players or its Subsidiary, as
the case may be, in accordance with its terms and, to the knowledge of Players,
against the other parties thereto. To the knowledge of Players, there are no
rights or options of any third party to acquire such leased property or any
ownership therein. Neither Players nor any of its Subsidiaries are in default,
nor have received any written notice alleging that it or they are in default,
under the leases, ground leases, subleases, licenses, options or other
agreements set forth in Section 3.8(a) of the Players Disclosure Schedule. To
the knowledge of Players, no other party to any such leases, ground leases,
licenses, options or other agreements is in default thereunder.
(b) Definitions. As used in this Section 3.8, the following
terms shall have the following meanings:
"Encumbrances" means all leases, mortgages, liens, pledges,
charges, options, encumbrances or defects of any kind or character.
"Leased Real Property" means all of the real property leased
or subleased by Players or a Subsidiary of Players as tenant and listed on
Section 3.8(a) of the Players Disclosure Schedule or by Buyer or a Subsidiary of
Buyer as tenant and listed on Section 4.8 of the Buyer Disclosure Schedule, as
applicable, together with, to the extent leased by Players or Buyer, as
applicable, all
13
buildings and other structures, facilities or improvements currently or
hereafter located thereon, all fixtures, systems, equipment and personal
property of Players or Buyer attached or appurtenant thereto, and all easements,
licenses, rights and appurtenances related to the foregoing.
"Owned Real Property" means all of the real property owned by
Players or any of its Subsidiaries and listed on Section 3.8(a) of the Players
Disclosure Schedule or by Buyer or any of Buyer's Subsidiaries and listed on
Section 4.8 of the Buyer Disclosure Schedule, as applicable, together with all
buildings and other structures, facilities or improvements currently or
hereafter located thereon, all fixtures, systems, equipment and personal
property attached or appurtenant thereto and all easements, licenses, rights and
appurtenances relating to the foregoing.
"Permitted Encumbrances" means such of the following as to
which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (i) Encumbrances that are disclosed in Section 3.8(a)
of the Players Disclosure Schedule or Section 4.8 of the Buyer Disclosure
Schedule, as applicable, except for (A) any Encumbrance which would prevent the
use of the subject property for its current use, or (B) any Encumbrance which
secures any indebtedness (other than indebtedness that is otherwise permitted by
this Agreement, (ii) liens for taxes, assessments, fees, and other governmental
charges or levies which are not yet due, payable or delinquent, (iii) such
survey exceptions or reciprocal easement agreements that do not prevent Players
or its Subsidiaries or Buyer or its Subsidiaries, and would not prevent the
Surviving Corporation, from conducting Players' or Buyer's business as
applicable as currently conducted and which would not have a Players Material
Adverse Effect or a Buyer Material Adverse Effect, (iv) the provisions of any
federal, state or local law, ordinance or regulation, provided the same are not
violated by the current use of the property, (v) Encumbrances imposed by law,
such as materialmen's, mechanics', carriers', workmen's and repairmen's liens
and other similar liens arising in the ordinary course of business securing
obligations that are not in excess of $250,000.00 in the aggregate at any time,
and (vi) pledges or deposits to secure obligations under workers' compensation
laws or similar legislation or to secure public or statutory obligations.
Section 3.9. Title to Personal Property; Liens. To the best knowledge
of Players, Players 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 Players and its
Subsidiaries) in order to allow it to conduct, and continue to conduct, its
business as and where currently conducted, except for such matters which,
individually or in the aggregate, would not be reasonably likely to have a
Players Material Adverse Effect. Except as disclosed in Section 3.9 of the
Players Disclosure Schedule, such material tangible personal assets and
properties are sufficiently free of liens to allow each of Players and its
Subsidiaries to conduct, and continue to conduct, its business as currently
conducted and to the best knowledge of Players, 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 Players Material Adverse Effect.
14
Section 3.10. Intellectual Property. Section 3.10 of the Players
Disclosure Schedule lists all (i) trademark and service xxxx registrations and
applications owned by Players or any of its Subsidiaries and (ii) trademark,
service xxxx and trade name license agreements to which Players or any of its
Subsidiaries is a party. Except as disclosed in Section 3.10 of the Players
Disclosure Schedule, 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 used in connection with the businesses of Players
and its Subsidiaries as currently conducted are without material restrictions or
material conditions on use, and there is no conflict with the intellectual
property rights of Players and its Subsidiaries therein or any conflict by them
with the intellectual property rights of others therein which, individually or
in the aggregate, would be reasonably likely to have a Players Material Adverse
Effect.
Section 3.11. Agreements, Contracts and Commitments.
(a) Except as disclosed in the Players SEC Reports or as
disclosed in Section 3.11(a) of the Players Disclosure Schedule, as of the date
of this Agreement, neither Players 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 material assets of
Players or any of its Subsidiaries outside the ordinary course of business, (iv)
other contract, agreement or commitment to be performed after the date hereof
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 relationship, etc.), (vi)
contract, agreement or commitment which materially restricts (geographically or
otherwise) the conduct of any line of business by Players or any of its
Subsidiaries, (vii) any contract, agreement or other instrument having as a
party a partnership, joint venture or limited liability company in which Players
or any of its Subsidiaries is a partner, joint venture party or member which
would otherwise satisfy the criteria in clauses (i), (iii), (iv), (v) or (vi) if
Players or any of its Subsidiaries were a party to such contract, agreement or
other instrument or (viii) any other material contract requiring annual or
remaining payments in excess of $250,000 after the date hereof and which is not
cancelable on less than 30 days' notice (collectively, the "Players 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 Players or any of its Subsidiaries.
(b) Except as disclosed in the Players SEC Reports filed prior
to the date of this Agreement or as disclosed in Section 3.11(b) of the Players
Disclosure Schedule, as of the date of this Agreement, (i) each of the Players
Material Contracts is valid and binding upon Players or any of its Subsidiaries
(and, to Players' 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
15
Players or any of its Subsidiaries under any of the Players Material Contracts,
whether or not such breach, violation or default has been waived, and (iii) no
event has occurred with respect to Players or any of its Subsidiaries which,
with the 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 Players 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 Players Material Adverse Effect.
Section 3.12. Litigation. Except as disclosed in the Players SEC
Reports or in Section 3.12 of the Players Disclosure Schedule, there is no
action, suit or proceeding, claim, arbitration or investigation against or
affecting Players or any of its Subsidiaries pending, or as to which Players or
any of its Subsidiaries has received any written notice of assertion against or
affecting, Players or any of its Subsidiaries or any property or asset of
Players or any of its 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 Players Material Adverse Effect or (ii) prevent or materially delay
the consummation of the transactions contemplated by this Agreement.
Section 3.13. Environmental Matters.
(a) Except as disclosed in Section 3.13 of the Players
Disclosure Schedule, the Players SEC Reports and as would not be reasonably
likely to have a Players Material Adverse Effect: (i) Players and its
Subsidiaries have complied with all applicable Environmental Laws (as defined in
Section 3.13(b)); (ii) the properties currently owned or operated by Players and
its Subsidiaries (including soils, groundwater, surface water, buildings or
other structures) are not contaminated with any Hazardous Substances (as defined
in Section 3.13(c)); (iii) neither Players nor its Subsidiaries are subject to
liability for any Hazardous Substance disposal or contamination on any third
party property; (iv) neither Players nor any of its Subsidiaries has been
associated with any release or threat of release of any Hazardous Substance; (v)
neither Players nor any of its Subsidiaries has received any notice, demand,
letter, claim or request for information alleging that Players or any of its
Subsidiaries may be in violation of or liable under any Environmental Law; (vi)
neither Players nor any of its Subsidiaries is subject to any orders, decrees,
injunctions or other arrangements with any Governmental Entity or is subject to
any indemnity or other agreement with any third party relating to liability
under any Environmental Law or relating to Hazardous Substances; and (vii) there
are no circumstances or conditions involving Players or any of its Subsidiaries
that could reasonably be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use or transfer of any
property of Players or any of its Subsidiaries pursuant to any Environmental
Law.
(b) For purposes of this Agreement, the term "Environmental
Law" means any federal, state, local or foreign law, regulation, order, decree,
permit, authorization, opinion, common law or agency requirement relating to:
(A) the protection, investigation or restoration of the
16
environment, health and safety, or natural resources, (B) the handling, use,
presence, disposal, release or threatened release of any Hazardous Substance or
(C) noise, odor, wetlands, pollution, contamination or any injury or threat of
injury to persons or property.
(c) For purposes of this Agreement, the term "Hazardous
Substance" means any substance that is: (A) listed, classified or regulated
pursuant to any Environmental Law; (B) any petroleum product or by-product,
asbestos-containing material, lead-containing paint or plumbing, polychlorinated
biphenyls, radioactive materials or radon; or (C) any other substance which is
the subject of regulatory action by any Governmental Entity pursuant to any
Environmental Law.
Section 3.14. Employee Benefit Plans.
(a) Section 3.14(a) of the Players Disclosure Schedule
contains a true and complete list of all employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), all employment, retention, change of control and severance
agreements, and all bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar employee
benefit plans, programs, policies and agreements, written or otherwise, in each
case that is sponsored, maintained, contributed to or required to be contributed
to by Players or any of its Subsidiaries or any trade or business (whether or
not incorporated) which, together with Players or any of its Subsidiaries, would
be deemed a "single employer" under Section 4001 (b) of ERISA (an "ERISA
Affiliate"), or to which Players, any of its Subsidiaries or any ERISA Affiliate
is a party for the benefit of any current or former employee, consultant,
director or independent contractor of Players or any of its Subsidiaries
(together, the "Players Employee Plans").
(b) Players has delivered or made available to Buyer all
material documents related to the Players Employee Plans, including, without
limitation: (i) true and complete copies of all Players Employee Plan documents
and any summary plan descriptions, summary annual reports and insurance
contracts relating thereto, (ii) detailed summaries of all unwritten Players
Employee Plans, (iii) true and complete copies of the most recent financial
statements and actuarial reports with respect to all Players Employee Plans for
which financial statements or actuarial reports are required or have been
prepared; (iv) the most recent determination letter from the IRS (if applicable)
for any such Players Employee Plan, and (v) true and complete copies of any
filing with or report to any Governmental Entity with respect to any Players
Employee Plan made by Players or any of its Subsidiaries during the twenty-four
months prior to the date of this Agreement, including, without limitation,
annual reports for Players Employee Plans, and a copy of any correspondence to
Players or any of its Subsidiaries from any Governmental Entity with respect to
any such Players Employee Plan during such period.
(c) All Players Employee Plans conform in all material
respects to, and are being administered and operated in all material respects in
compliance with, the requirements of ERISA, the Code and all other applicable
laws, including applicable laws of foreign jurisdictions. Except as set forth in
Section 3.14(c) of the Players Disclosure Schedule, there have not been any
17
"prohibited transactions," as such term is defined in Section 4975 of the Code
or Section 406 of ERISA, involving any of the Players Employee Plans that could
subject Players or any of its Subsidiaries to any penalties or taxes imposed
under the Code or ERISA. Section 3.14(c) of the Players Disclosure Schedule sets
forth a true and complete list of all outstanding loans from Players or any of
its Subsidiaries to any current or former director, officer, employee or
consultant.
(d) Except as set forth in Section 3.14(d) of the Players
Disclosure Schedule, any Players Employee Plan that is intended to be qualified
under Section 401 (a) of the Code and exempt from tax under Section 501 (a) of
the Code has been determined by the Internal Revenue Service to be so qualified,
has received a favorable determination letter from the IRS covering provisions
of the Tax Reform Act of 1986, and such determination remains in effect and has
not been revoked. Nothing has occurred since the date of any such determination
that is reasonably likely to affect adversely such qualification or exemption in
any material respect, or result in the imposition of material excise taxes or
income taxes on unrelated business income under the Code or ERISA with respect
to any Players Employee Plan. All contributions or other amounts payable by
Players or any of its Subsidiaries with respect to each Players Employee Plan
have been paid or accrued in accordance with GAAP, ERISA, the Code and the terms
of each such plan.
(e) Except as set forth in Section 3.14(e) of the Players
Disclosure Schedule, neither Players, any of its Subsidiaries nor any ERISA
Affiliate (i) at any time in the past has had a current or contingent obligation
to contribute to any multiemployer plan (as defined in Section 3(37) of ERISA)
("Multiemployer Plan") or (ii) at any time in the past has had any liability,
contingent or otherwise, under Title IV of ERISA or Section 412 of the Code. As
of the date of this Agreement, no Players Employee Plan is subject to Title IV
of ERISA and no Players Employee Plan is a Multiemployer Plan.
(f) There are no pending, or to Players' knowledge, any
threatened or anticipated claims by or on behalf of any Players Employee Plan,
or by or on behalf of any individual participants or beneficiaries of any
Players Employee Plan, alleging any breach of fiduciary duty on the part of
Players or any of its Subsidiaries or any of the officers, directors or
employees of Players or any of its Subsidiaries under ERISA or any other
applicable Regulations, or claiming benefit payments other than those made in
the ordinary operation of such plans, or alleging any violation of any other
applicable Laws. To the knowledge of Players or any of its Subsidiaries, the
Players Employee Plans are not the subject of any investigation, audit or action
by the Internal Revenue Service, the Department of Labor or the Pension Benefit
Guaranty Corporation ("PBGC").
(g) With respect to any Players Employee Plan that is an
employee welfare benefit plan (within the meaning of Section 3(l) of ERISA) (a
"Players Welfare Plan"), (i) each Players Welfare Plan for which contributions
are claimed as deductions under any provision of the Code is in compliance in
all material respects with all applicable requirements pertaining to such
deduction and (ii) any Players Employee Plan that is a group health plan (within
the meaning of Section 4980B(g)(2) of the Code) complies, and in each and every
case has complied in all material respects, with all of the requirements of
ERISA and Section 4980B of the Code. No welfare benefit fund
18
(within the meaning of Section 419(e)(1) of the Code) or voluntary employees'
beneficiary association (within the meaning of 501 (c)(9) of the Code) has been
established or maintained in connection with a Players Welfare Plan.
Section 3.15. Compliance.
(a) Except as disclosed in Section 3.15 of the Players
Disclosure Schedule, each of Players and its Subsidiaries, and each of their
respective directors (but with respect to non-employee directors, only to
Players' best knowledge), officers, persons performing management functions
similar to officers and, to Players' 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, the Merchant Marine Act
of 1920 and the Shipping Act of 1916, Certificates of Inspection issued by the
US Coast Guard and permits and approvals issued by the United States Army Corps
of Engineers and Players Gaming Laws (as defined below)), necessary to conduct
the business and operations of Players and each of its Subsidiaries as currently
conducted, each of which is in full force and effect in all material respects
and no notice of revocation has been received in respect thereof, except where
the failure to hold such permits, registrations, findings of suitability,
licenses, variances, exemptions, certificates of occupancy, orders and approvals
would not, individually or in the aggregate, be reasonably likely to have a
Players Material Adverse Effect (the "Players Permits"). Except as disclosed in
the Players SEC Reports, as disclosed in Section 3.15 of the Players Disclosure
Schedule, or as would not be reasonably likely to have a Players Material
Adverse Effect, the businesses of Players and its Subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity.
(b) The term "Players 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 Players or any of its Subsidiaries,
including any applicable state gaming law and any federal or state laws relating
to currency transactions.
(c) Except as disclosed in Section 3.15 of the Players
Disclosure Schedule (i) neither Players nor any of its Subsidiaries, nor any
director (but with respect to non-employee directors, only to Players' best
knowledge), officer, key employee or, to Players' best knowledge, partners of
Players 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 Players Gaming Laws which did or would be reasonably likely to
result in fines or penalties of $250,000 or more; (ii) to the best knowledge of
Players, there are no facts, which if known to the regulators under the Players
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 any officer, director, other person performing
management functions similar to an officer or partner, under any Players Gaming
19
Laws; and (iii) neither Players 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 Players Gaming Laws.
Section 3.16. Labor Matters. Except as disclosed in Section 3.16 of the
Players Disclosure Schedule, (i) there are no proceedings pending between
Players or any of its Subsidiaries and any of their respective employees before
the Equal Employment Opportunity Commission, Department of Labor, or any other
Governmental Entity; (ii) to the best knowledge of Players, there are no
activities or proceedings of any labor union to organize any non-unionized
employees; (iii) neither Players nor any of its Subsidiaries has received notice
of any alleged unfair labor practice charges and/or complaints pending against
Players or any of its Subsidiaries or any of their respective representatives or
employees before the National Labor Relations Board or any current union
representation questions involving employees of Players or any of its
Subsidiaries; and (iv) Players' employment policies and practices comply in all
material respects with applicable law; and (v) there is no strike, slowdown,
work stoppage, labor dispute or lockout, or, to the best knowledge of Players,
threat thereof, by or with respect to any employees of Players or any of its
Subsidiaries. Players and its Subsidiaries are not parties to any collective
bargaining agreements or other labor union contracts applicable to individuals
employed or previously employed by Players or any of its Subsidiaries and,
except as disclosed in Players Disclosure Schedule 3.16, no collective
bargaining agreement or labor union contract is being negotiated by Players or
any such Subsidiary.
Section 3.17. Insurance. All material fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance policies maintained by Players or any of its Subsidiaries are
listed on Section 3.17 of the Players Disclosure Schedule. At the Effective
Time, all such insurance policies, or replacements thereof, will be outstanding
and duly in force. To Players' knowledge, no notice of termination or
non-renewal of any such insurance policy has been received by Players.
Section 3.18. Information in Proxy Statement/Prospectus. The Joint
Proxy Statement/Prospectus, as such term is defined in Section 5.4(a) below (or
any amendment thereof or supplement thereto), at the date mailed to Players'
stockholders and at the time of the Players Special Meeting, will not 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, provided, however, that no representation is made by Players with
respect to statements made therein based on information supplied by Buyer or
Merger Sub for inclusion in the Proxy Statement/Prospectus. The Proxy
Statement/Prospectus will comply in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder.
Section 3.19. State Takeover Statute. The Board of Directors of Players
has approved the Merger, this Agreement and the Stockholder Support Agreements
and, assuming the accuracy of the representations contained in Section 4.25
hereof (without giving effect to the knowledge qualification therein), such
approval is sufficient to render inapplicable to the Merger, this
20
Agreement and the Stockholder Support Agreements and the transactions
contemplated hereby and thereby the provisions of Section 78.378 through 78.3793
of the NRS to the extent, if any, such Sections are applicable to the Merger,
this Agreement and the Stockholder Support Agreements and the transactions
contemplated hereby and thereby.
Section 3.20. Voting Requirements. The affirmative vote of the holders
of a majority of the outstanding shares of Players Common Stock entitled to vote
thereon at the Players Special Meeting with respect to the approval of the
Merger (the "Players Stockholder Approval") is the only vote of the holders of
any class or series of Players' capital stock necessary to approve and adopt
this Agreement and the transactions contemplated by this Agreement.
Section 3.21. Players Rights Agreement. The Players Rights Agreement
dated as of January 27, 1997 (the "Rights Agreement") has been amended as of
February 8, 1999, in the form attached hereto as Exhibit B, so as to provide
that (i) no "Distribution Date," "Stock Acquisition Date," or "Trigger Event"
thereunder shall be deemed to have occurred, (ii) none of Buyer or any of its
Subsidiaries will be an "Acquiring Person" thereunder and (iii) no holder of
rights issued thereunder shall be entitled to exercise such rights under, or be
entitled to any rights or benefits pursuant to, the Rights Agreement, in each
case solely by reason of the approval and execution of this Agreement or the
execution of the Stockholder Support Agreements, or the consummation of the
transactions contemplated hereby or thereby.
Section 3.22. Year 2000. Except as disclosed in Section 3.22 of the
Players Disclosure Schedule, as of the date hereof, all computer software
necessary for the conduct of its business (the "Software") is (or will be, prior
to December 31, 1999, as provided in Section 3.22 of the Players Disclosure
Schedule) designed to be used prior to, during, and after December 31, 1999, and
the Software will operate during each such time period without error relating to
the year 2000, specifically including any error relating to, or the product of,
date data which represents or references different centuries or more than one
century. Players further represents and warrants that as of the date hereof, the
Software either does or will, prior to December 31, 1999 as provided in Section
3.22 of the Players Disclosure Schedule accept, calculate, sort, extract and
otherwise process date inputs and date values, and return and display date
values, in a consistent manner regardless of the dates used, whether before, on,
or after January 1, 2000.
Section 3.23. Opinion of Financial Advisor. Players has received the
oral opinion of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ") as
of the date of this Agreement, to the effect that the Merger Consideration is
fair to the holders of Players Common Stock from a financial point of view.
Section 3.24. Brokers. None of Players, 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, finder's or other fees in connection with the transactions
contemplated by this Agreement, except that Players has retained DLJ as its
financial advisor.
21
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB
Buyer and Merger Sub represent and warrant to Players that the
statements contained in this Article III are true and correct except as set
forth herein and in the disclosure schedule delivered by Buyer and Merger Sub to
Players on or before the date of this Agreement (the "Buyer Disclosure
Schedule"), or as otherwise expressly contemplated by this Agreement. Any
reference in the Merger Agreement to Buyer's "best knowledge," or "the best of
Buyer's knowledge," or words of similar import, shall be deemed a reference to
the actual knowledge of any of the corporate officers of Buyer or any of its
Subsidiaries, for all purposes. The Buyer Disclosure Schedule has been prepared
based upon the foregoing definition.
Section 4.1. Organization of Buyer and its Subsidiaries. Each of Buyer
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 Buyer 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) or
results of operations of Buyer and its Subsidiaries, taken as a whole (a "Buyer
Material Adverse Effect"). Buyer has delivered to Players a true and correct
copy of the Certificate of Incorporation and Bylaws of Buyer, in each case as
amended to the date of this Agreement. Except as set forth on the Buyer
Disclosure Schedule, all the outstanding shares of capital stock of, or other
equity interests in, each such Subsidiary have been validly issued and are fully
paid and nonassessable and are owned directly or indirectly by Buyer, free and
clear of all liens and free of any other restriction (including any restriction
on the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests). Except as set forth in Section 4.1 of the Buyer Disclosure
Schedule, neither Buyer nor any of its Subsidiaries directly or indirectly owns
(other than ownership interests in Buyer 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.
Section 4.2. Capitalization.
(a) The authorized capital stock of Buyer consists of
30,000,000 shares of Buyer Common Stock, $.01 par value per share, and 1,000,000
shares of preferred stock, with $1.00 par value per share ("Buyer Preferred
Stock"). As of the date hereof, (i) 8,616,680 shares of Buyer Common Stock were
issued and outstanding, all of which are validly issued, fully paid and
nonassessable, (ii) 1,243,572 shares of Buyer Common Stock were held in the
treasury of Buyer or by Subsidiaries of Buyer, and (iii) no shares of Buyer
Preferred Stock are issued and outstanding. Section 4.2(a)(i) of the Buyer
Disclosure Schedule sets forth the number of shares of Buyer Common
22
Stock reserved for future issuance upon exercise of options to acquire shares of
Buyer Common Stock ("Buyer Options") granted and outstanding as of the date
hereof and under Buyer's stock option plans ("Buyer Stock Option Plans").
Section 4.2(a)(i) of the Buyer Disclosure Schedule also sets forth as of the
date hereof, for each Buyer Stock Option Plan, the dates on which Options and
Buyer SARs which are still outstanding under such plan were granted, the number
of outstanding Options and Buyer SARs granted on each such date and the exercise
price thereof. Except as disclosed in Section 4.2(a)(i) of the Buyer Disclosure
Schedule, since December 31, 1998 through the date of this Agreement, Buyer has
not made any grants under any of the Buyer Stock Option Plans. Except as
disclosed in Section 4.2(a)(i) of the Buyer Disclosure Schedule, as of the date
of this Agreement, Buyer has not granted any contractual rights the value of
which is derived from the financial performance of Buyer or from the value of
shares of Buyer Common Stock. Except as disclosed in Section 4.2(a)(ii) of the
Buyer Disclosure Schedule, there are no obligations contingent or otherwise, of
Buyer or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of Buyer 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 Buyer's Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable and, except as disclosed in Section 4.2(a)(iii) of the Buyer
Disclosure Schedule and except as required by gaming industry regulation, all
such shares and ownership interests are owned by Buyer or another Subsidiary of
Buyer free and clear of all security interests, liens, claims, pledges,
agreements, limitations on Buyer's voting rights, charges or other encumbrances
or restrictions on transfer of any nature.
(b) There is no Voting Debt of Buyer or any of its
Subsidiaries issued and outstanding. Except as set forth in Section 4.2(a) or in
this Section 4.2(b) or as reserved for future grants of options or restricted
stock under the Buyer Stock Option Plans as of the date hereof, (i) there are no
shares of capital stock of any class of Buyer, or any security exchangeable into
or exercisable for such equity securities, issued, reserved for issuance or
outstanding; (ii) except as set forth in Section 4.2(b) of the Buyer Disclosure
Schedule there are no options, warrants, equity securities, calls, rights,
commitments or agreements of any character to which Buyer or any of its
Subsidiaries is a party or by which it is bound obligating Buyer 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 Buyer or any of its Subsidiaries or obligating Buyer 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 Buyer. All shares
of Buyer Common Stock subject to issuance as specified in this Section 4.2(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.
23
(c) The authorized capital stock of Merger Sub consists of
2,500 shares of common stock, par value $.01 per share ("Merger Sub Common
Stock"), of which 1,000 shares are issued and outstanding. Buyer owns directly
all the outstanding shares of Merger Sub Common Stock. The outstanding shares of
Merger Sub Common Stock are duly authorized, validly issued, fully paid and
assessable and free of any preemptive rights.
Section 4.3. Authority; No Conflict; Required Filings and Consents.
(a) Buyer and Merger Sub have all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by Buyer and Merger Sub
have been duly authorized by all necessary corporate action on the part of Buyer
and Merger Sub, subject only to the Buyer Stockholder Approval specified in
Section 4.20 hereof and the review by Buyer's Compliance Committee, as required
by Buyer's internal reporting system, of this Agreement, the transactions
identified herein, and the persons designated by Players to serve on Buyer's
Board of Directors, such review to be completed no later than 60 days after the
date of this Agreement. This Agreement has been duly executed and delivered by
Buyer and Merger Sub and constitutes the valid and binding obligation of Buyer
and Merger Sub, enforceable against each of them in accordance with its terms.
(b) Other than as disclosed in Section 4.3(b) of the Buyer
Disclosure Schedule, the execution and delivery of this Agreement by Buyer and
Merger Sub does not, and the consummation of the transactions contemplated
hereby will not, (i) conflict with, or result in any violation or breach of, any
provision of the Certificate of Incorporation or Bylaws of Buyer 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 Buyer 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 4.3(c), conflict with or violate any permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Buyer 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
Buyer Material Adverse Effect or (y) would not impair or materially delay the
consummation of the Merger.
(c) Except as disclosed in Section 4.3(c) of the Buyer
Disclosure Schedule, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Buyer or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, other than (i) the filing of the pre-merger notification
report under the XXX
00
Xxx, (xx) 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 any Joint
Proxy Statement/Prospectus (as such term is defined in Section 5.4(a) (below)
with the SEC in accordance with the Exchange Act, (iv) any approvals and filing
of notices required under any applicable gaming industry regulation, (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
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 (vii) such other filings, consents, approvals, orders,
registrations and declarations as may be required under the laws of any
jurisdiction in which Buyer or any of its Subsidiaries conducts any business or
owns any assets the failure of which to obtain would not have a Buyer Material
Adverse Effect.
Section 4.4. Public Filings; Financial Statements.
(a) Buyer and its Subsidiaries that are required to file, or
that file, forms, reports or other documents with the SEC (the "Buyer Reporting
Subsidiaries") have filed and made available to Players all forms, reports and
documents required to be filed by Buyer and the Buyer Reporting Subsidiaries
with the SEC since January 1, 1995 (the "Buyer SEC Reports"). The Buyer 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, 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
Buyer SEC Reports or necessary in order to make the statements in such Buyer SEC
Reports, in the light of the circumstances under which they were made, not
misleading.
(b) Except as set forth in Section 4.4(a), each of the
consolidated financial statements (including, in each case, any related notes)
of Buyer contained in the Buyer 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 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 Buyer 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 statements were
or are subject to normal and recurring year-end adjustments which, with respect
to interim periods since December 31, 1998, were not or are not expected to be
material in amount. The audited balance sheet of Buyer as of June 30, 1998 is
referred to herein as the "Buyer Balance Sheet."
Section 4.5. No Undisclosed Liabilities. Except as disclosed in the
Buyer SEC Reports or in Section 4.5 of the Buyer Disclosure Schedule, and except
for liabilities and obligations incurred since the date of the Buyer Balance
Sheet in the ordinary course of business consistent with past
25
practices, Buyer and its consolidated Subsidiaries do not have indebtedness,
obligations, or liabilities of any kind, whether accrued, contingent or
otherwise, of the type required to be reflected in financial statements,
including the notes thereto, in accordance with GAAP, and whether due or to
become due, which would be reasonably likely to have a Buyer Material Adverse
Effect.
Section 4.6. Absence of Certain Changes or Events. Except as disclosed
in the Buyer SEC Reports or in Section 4.6 of the Buyer Disclosure Schedule,
since the date of the Buyer Balance Sheet, Buyer and its Subsidiaries have
conducted their respective businesses only in the ordinary course and in a
manner consistent with past practice, and there has not been (i) any Buyer
Material Adverse Effect, (ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with respect
to any of Buyer's capital stock, (iii) any split, combination or
reclassification of any of its 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 its capital stock, (iv) (w) any granting by
Buyer or any of its Subsidiaries to any director or officer of Buyer or its
Subsidiaries of any increase in compensation, except in the ordinary course of
business consistent with prior practice or as was required under employment
agreements in effect as of the date of the most recent financial statements
included in the Buyer SEC Reports, (x) any granting by Buyer or any of its
Subsidiaries to any director or officer of any stock options, except as was
required under employment agreements in effect as of the date of the most recent
financial statements included in the Buyer SEC Reports, (y) any granting by
Buyer or any of its Subsidiaries to any officer of any increase in severance or
termination pay, except as was required under any employment, severance or
termination agreements, plans or arrangements in effect as of the date of the
most recent financial statements included in the Buyer SEC Reports or (z) any
entry by Buyer or any of its Subsidiaries into any employment, severance or
termination agreement with any officer, (v) any change in accounting methods,
principles or practices having a material adverse effect on Buyer, except
insofar as may have been required by a change in GAAP, (vi) any tax election
that individually or in the aggregate would have a Buyer Material Adverse
Effect, or (vii) any settlement of pending or threatened litigation involving
Buyer or any of its Subsidiaries (whether brought by a private party or a
Governmental Entity) other than any settlement which is not reasonably likely to
have a Buyer Material Adverse Effect.
Section 4.7. Taxes.
(a) Buyer and each of its Subsidiaries have (i) filed all
federal, state, local and foreign Tax returns and reports required to be filed
by them prior to the date of this Agreement (taking into account all applicable
extensions) and such Tax returns and reports (taking into account all amendments
thereto) are true, correct and complete in all material respects, (ii) paid or
accrued all Taxes due and payable, and (iii) paid or accrued all Taxes for which
a notice of assessment or collection has been received (other than amounts being
contested in good faith by appropriate proceedings with the relevant taxing
authority and for which adequate reserves in accordance with GAAP are being
maintained). Except as set forth in Section 4.7(a) of the Buyer Disclosure
Schedule, neither the IRS nor any other taxing authority has asserted any claim
for Taxes, or to the actual knowledge of the executive officers of Buyer, is
threatening to assert any claims for Taxes.
26
Buyer and its Subsidiaries have withheld or collected and paid over to the
appropriate governmental authorities (or are properly holding for such payment)
all Taxes required by law to be withheld or collected. Neither Buyer nor any of
its Subsidiaries has made an election under Section 341(f) of the Code. There
are no liens for Taxes upon the assets of Buyer or any of its Subsidiaries
(other than liens for Taxes that are not yet due or delinquent or that are being
contested in good faith by appropriate proceedings, with the relevant taxing
authority and for which adequate reserves in accordance with GAAP are being
maintained).
(b) Neither Buyer 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) other than a group the common parent of which is or was Buyer or any
Subsidiary of Buyer.
(c) Neither Buyer nor any of its Subsidiaries has any
obligation under any agreement or arrangement with any other person with respect
to Taxes of such other person (including pursuant to Treas. Reg. ss. 1.1502-6 or
comparable provisions of state, local or foreign tax law) and including any
liability for Taxes of any predecessor entity.
Section 4.8. Real Property, Title and Related Matters. Section 4.8 of
the Buyer Disclosure Schedule sets forth a true and complete list as of the date
of this Agreement of (i) all contracts or agreements relating to the Leased Real
Property and (ii) a brief description of each piece of Owned Real Property.
Buyer or a Subsidiary of Buyer, as the case may be, has, except as set forth in
Section 4.8 of the Buyer Disclosure Schedule, (A) the right to quiet enjoyment
of the Leased Real Property for the full term of the leases, and (B) good and
marketable title to all Owned Real Property and to all fixtures thereon, free
and clear of any Encumbrances, except for Permitted Encumbrances. Each lease or
other contract referred to in Section 4.8 of the Buyer Disclosure Schedule is a
valid contract or agreement enforceable against Buyer or its Subsidiary, as the
case may be, in accordance with its terms and, to the knowledge of Buyer,
against the other parties thereto. To the knowledge of Buyer, there are no
rights or options of any third party to acquire such leased property or any
ownership therein. Neither Buyer nor any of its Subsidiaries are in default, nor
have received any written notice alleging that it or they are in default, under
the leases, ground leases, subleases, licenses, options or other agreements set
forth in Section 4.8 of the Buyer Disclosure Schedule. To the knowledge of
Buyer, no other party to any such leases, ground leases, licenses, options or
other agreements is in default thereunder.
Section 4.9. Title to Personal Property; Liens. To the best knowledge
of Buyer, Buyer 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 in order to allow it to conduct, and continue to conduct,
its business as and where currently conducted, except for such matters which,
individually or in the aggregate, would not be reasonably likely to have a Buyer
Material Adverse Effect. Except as disclosed in Section 4.9 of the Buyer
Disclosure Schedule, such material tangible personal assets and properties are
sufficiently free of liens to allow each of Buyer and its Subsidiaries to
conduct,
27
and continue to conduct, its business as currently conducted and to the best
knowledge of Buyer, 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 Buyer
Material Adverse Effect.
Section 4.10. Intellectual Property. Section 4.10 of the Buyer
Disclosure Schedule lists all (i) trademark and service xxxx registrations and
applications owned by Buyer or any of its Subsidiaries and (ii) trademark,
service xxxx and trade name license agreements to which Buyer or any of its
Subsidiaries is a party. Except as disclosed in Section 4.10 of the Buyer
Disclosure Schedule, 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 used in connection with the businesses of Buyer and
its Subsidiaries as currently conducted are without material restrictions or
material conditions on use, and there is no conflict with the intellectual
property rights of Buyer and its Subsidiaries therein or any conflict by them
with the intellectual property rights of others therein which, individually or
in the aggregate, would be reasonably likely to have a Buyer Material Adverse
Effect.
Section 4.11. Agreements, Contracts and Commitments.
(a) Except as disclosed in the Buyer SEC Reports or as
disclosed in Section 4.11(a) of the Buyer Disclosure Schedule, as of the date of
this Agreement, neither Buyer nor any of its Subsidiaries is a party to any oral
or written (i) agreement, contract, indenture or other instrument relating to
Indebtedness 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 material assets of Buyer or any of its
Subsidiaries outside the ordinary course of business, (iv) other contract,
agreement or commitment to be performed after the date hereof 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 relationship, etc.), (vi) contract,
agreement or commitment which materially restricts (geographically or otherwise)
the conduct of any line of business by Buyer or any of its Subsidiaries, (vii)
any contract, agreement or other instrument having as a party a partnership,
joint venture or limited liability company in which Buyer or any of its
Subsidiaries is a partner, joint venture party or member which would otherwise
satisfy the criteria in clauses (i), (iii), (iv), (v) or (vi) if Buyer or any of
its Subsidiaries were a party to such contract, agreement or other instrument or
(viii) any other material contract requiring annual or remaining payments in
excess of $250,000 after the date hereof and which is not cancelable on less
than 30 days' notice (collectively, the "Buyer Material Contracts").
(b) Except as disclosed in the Buyer SEC Reports filed prior
to the date of this Agreement or as disclosed in Section 4.11(b) of the Buyer
Disclosure Schedule, as of the date of this Agreement, (i) each of the Buyer
Material Contracts is valid and binding upon Buyer or any of its Subsidiaries
(and, to Buyer's best knowledge, on all other parties thereto) in accordance
with its
28
terms and is in full force and effect, (ii) there is no material breach or
violation of or default by Buyer or any of its Subsidiaries under any of the
Buyer Material Contracts, whether or not such breach, violation or default has
been waived, and (iii) no event has occurred with respect to Buyer or any of its
Subsidiaries which, with the 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 Buyer 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 Buyer Material Adverse Effect.
Section 4.12. Litigation. Except as disclosed in the Buyer SEC Reports
or in Section 4.12 of the Buyer Disclosure Schedule, there is no action, suit or
proceeding, claim, arbitration or investigation against or affecting Buyer or
any of its Subsidiaries pending, or as to which Buyer or any of its Subsidiaries
has received any written notice of assertion against or affecting, Buyer or any
of its Subsidiaries or any property or asset of Buyer or any of its
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 Buyer Material Adverse
Effect or (ii) prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
Section 4.13. Environmental Matters. Except as disclosed in Section
4.13 of the Buyer Disclosure Schedule, the Buyer SEC Reports and as would not be
reasonably likely to have a Buyer Material Adverse Effect: (i) Buyer and its
Subsidiaries have complied with all applicable Environmental Laws (as defined in
Section 3.13(b)); (ii) the properties currently owned or operated by Buyer and
its Subsidiaries (including soils, groundwater, surface water, buildings or
other structures) are not contaminated with any Hazardous Substances (as defined
in Section 3.13(c)); (iii) neither Buyer nor its Subsidiaries are subject to
liability for any Hazardous Substance disposal or contamination on any third
party property; (iv) neither Buyer nor any of its Subsidiaries has been
associated with any release or threat of release of any Hazardous Substance; (v)
neither Buyer nor any of its Subsidiaries has received any notice, demand,
letter, claim or request for information alleging that Buyer or any of its
Subsidiaries may be in violation of or liable under any Environmental Law; (vi)
neither Buyer nor any of its Subsidiaries is subject to any orders, decrees,
injunctions or other arrangements with any Governmental Entity or is subject to
any indemnity or other agreement with any third party relating to liability
under any Environmental Law or relating to Hazardous Substances; and (vii) there
are no circumstances or conditions involving Buyer or any of its Subsidiaries
that could reasonably be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use or transfer of any
property of Buyer or any of its Subsidiaries pursuant to any Environmental Law.
29
Section 4.14. Employee Benefit Plans.
(a) Section 4.14(a) of the Buyer Disclosure Schedule contains
a true and complete list of all employee benefit plans (as defined in Section
3(3) of ERISA), all employment, retention, change of control and severance
agreements, and all bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar employee
benefit plans, programs, policies and agreements, written or otherwise, in each
case that is sponsored, maintained, contributed to or required to be contributed
to by Buyer or any of its Subsidiaries or any ERISA Affiliate, or to which
Buyer, any of its Subsidiaries or any ERISA Affiliate is a party for the benefit
of any current or former employee, consultant, director or independent
contractor of Buyer or any of its Subsidiaries (together, the "Buyer Employee
Plans").
(b) Buyer has delivered or made available to Players all
material documents related to the Buyer Employee Plans, including, without
limitation: (i) true and complete copies of all Buyer Employee Plan documents
and any summary plan descriptions, summary annual reports and insurance
contracts relating thereto, (ii) detailed summaries of all unwritten Buyer
Employee Plans, (iii) true and complete copies of the most recent financial
statements and actuarial reports with respect to all Buyer Employee Plans for
which financial statements or actuarial reports are required or have been
prepared; (iv) the most recent determination letter from the IRS (if applicable)
for any such Buyer Employee Plan, and (v) true and complete copies of any filing
with or report to any Governmental Entity with respect to any Buyer Employee
Plan made by Buyer or any of its Subsidiaries during the twenty-four months
prior to the date of this Agreement, including, without limitation, annual
reports for Buyer Employee Plans, and a copy of any correspondence to Buyer or
any of its Subsidiaries from any Governmental Entity with respect to any such
Buyer Employee Plan during such period.
(c) All Buyer Employee Plans conform in all material respects
to, and are being administered and operated in all material respects in
compliance with, the requirements of ERISA, the Code and all other applicable
laws, including applicable laws of foreign jurisdictions. Except as set forth in
Section 4.14(c) of the Buyer Disclosure Schedule, there have not been any
"prohibited transactions," as such term is defined in Section 4975 of the Code
or Section 406 of ERISA, involving any of the Buyer Employee Plans that could
subject Buyer or any of its Subsidiaries to any penalties or taxes imposed under
the Code or ERISA. Section 4.14(c) of the Buyer Disclosure Schedule sets forth a
true and complete list of all outstanding loans from Buyer or any of its
Subsidiaries to any current or former director, officer, employee or consultant.
(d) Except as set forth in Section 4.14(d) of the Buyer
Disclosure Schedule, any Buyer Employee Plan that is intended to be qualified
under Section 401 (a) of the Code and exempt from tax under Section 501 (a) of
the Code has been determined by the IRS to be so qualified, has received a
favorable determination letter from the IRS covering provisions of the Tax
Reform Act of 1986, and such determination remains in effect and has not been
revoked. Nothing has occurred since the date of any such determination that is
reasonably likely to affect adversely such qualification or exemption in any
material respect, or result in the imposition of material excise taxes
30
or income taxes on unrelated business income under the Code or ERISA with
respect to any Buyer Employee Plan. All contributions or other amounts payable
by Buyer or any of its Subsidiaries with respect to each Buyer Employee Plan
have been paid or accrued in accordance with GAAP, ERISA, the Code and the terms
of each such plan.
(e) Except as set forth in Section 4.14(e) of the Buyer
Disclosure Schedule, neither Buyer, any of its Subsidiaries nor any ERISA
Affiliate (i) at any time in the past has had a current or contingent obligation
to contribute to any Multiemployer Plan or (ii) at any time in the past has had
any liability, contingent or otherwise, under Title IV of ERISA or Section 412
of the Code. As of the date of this Agreement, no Buyer Employee Plan is subject
to Title IV of ERISA and no Buyer Employee Plan is a Multiemployer Plan.
(f) There are no pending, or to Buyer's knowledge, any
threatened or anticipated claims by or on behalf of any Buyer Employee Plan, or
by or on behalf of any individual participants or beneficiaries of any Buyer
Employee Plan, alleging any breach of fiduciary duty on the part of Buyer or any
of its Subsidiaries or any of the officers, directors or employees of Buyer or
any of its Subsidiaries under ERISA or any other applicable Regulations, or
claiming benefit payments other than those made in the ordinary operation of
such plans, or alleging any violation of any other applicable Laws. To the
knowledge of Buyer or any of its Subsidiaries, the Buyer Employee Plans are not
the subject of any investigation, audit or action by the IRS, the Department of
Labor or the PBGC.
(g) With respect to any Buyer Employee Plan that is an
employee welfare benefit plan (within the meaning of Section 3(l) of ERISA) (a
"Buyer Welfare Plan"), (i) each Buyer Welfare Plan for which contributions are
claimed as deductions under any provision of the Code is in compliance in all
material respects with all applicable requirements pertaining to such deduction
and (ii) any Buyer Employee Plan that is a group health plan (within the meaning
of Section 4980B(g)(2) of the Code) complies, and in each and every case has
complied in all material respects, with all of the requirements of ERISA and
Section 4980B of the Code. No welfare benefit fund (within the meaning of
Section 419(e)(1) of the Code) or voluntary employees' beneficiary association
(within the meaning of 501(c)(9) of the Code) has been established or maintained
in connection with a Buyer Welfare Plan.
Section 4.15. Compliance.
(a) Except as disclosed in Section 4.15 of the Buyer
Disclosure Schedule, each of Buyer and its Subsidiaries, and each of their
respective directors (but with respect to non-employee directors, only to
Buyer's best knowledge), officers, persons performing management functions
similar to officers and, to Buyer'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, the Merchant Marine Act
of 1920 and the Shipping Act of 1916, Certificates of Inspection issued by the
US Coast Guard and permits and approvals issued by the United States Army Corps
of Engineers
31
and Buyer Gaming Laws (as defined below)), necessary to conduct the business and
operations of Buyer and each of its Subsidiaries as currently conducted, each of
which is in full force and effect in all material respects and no notice of
revocation has been received in respect thereof, except where the failure to
hold such permits, registrations, findings of suitability, licenses, variances,
exemptions, certificates of occupancy, orders and approvals would not,
individually or in the aggregate, be reasonably likely to have a Buyer Material
Adverse Effect (the "Buyer Permits"). Except as disclosed in the Buyer SEC
Reports, as disclosed in Section 4.15 of the Buyer Disclosure Schedule, or as
would not be reasonably likely to have a Buyer Material Adverse Effect, the
businesses of Buyer and its Subsidiaries are not being conducted in violation of
any law, ordinance or regulation of any Governmental Entity.
(b) The term "Buyer 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 Buyer or any of its Subsidiaries, including
any applicable state gaming law and any federal or state laws relating to
currency transactions.
(c) Except as disclosed in Section 4.15 of the Buyer
Disclosure Schedule (i) neither Buyer nor any of its Subsidiaries, nor any
director (but with respect to non-employee directors, only to Buyer's best
knowledge), officer, key employee or, to Buyer's best knowledge, partners of
Buyer 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 Buyer Gaming Laws which did or would be reasonably likely to result in
fines or penalties of $250,000 or more; (ii) to the best knowledge of Buyer,
there are no facts, which if known to the regulators under the Buyer 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 any officer, director, other person performing
management functions similar to an officer or partner, under any Buyer Gaming
Laws; and (iii) neither Buyer 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 Buyer Gaming Laws.
Section 4.16. Registration Statement; Joint Proxy Statement/Prospectus.
The information supplied by Buyer for inclusion or incorporation by reference in
the Registration Statement shall not at the time the Registration Statement (as
defined in Section 5.4(a) below) is declared effective by the SEC contain any
untrue statement of a material fact or omit to state any material fact required
to be stated in the Registration Statement or necessary in order to make the
statements in the Registration Statement, in light of the circumstances under
which they were made, not misleading. The information supplied by Buyer for
inclusion or incorporation by reference in the Joint Proxy Statement/Prospectus
(as defined in Section 5.4(a) below) shall not, on the date the Joint Proxy
Statement/Prospectus is first mailed to stockholders of Players or Buyer, at the
time of the Players and the Buyer Special Meeting (as provided for in Section
5.5) and at the Effective Time, contain
32
any statement which, at such time and in light of the circumstances under which
it shall be made, is false or misleading with respect to any material fact, omit
to state any material fact necessary in order to make the statements made in the
Joint Proxy Statement/Prospectus not false or misleading, or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Players Special Meeting
which has become false or misleading.
Section 4.17. Labor Matters. Except as disclosed in Section 4.17 of the
Buyer Disclosure Schedule, (i) there are no proceedings pending between Buyer or
any of its Subsidiaries and any of their respective employees before the Equal
Employment Opportunity Commission, Department of Labor, or any other
Governmental Entity; (ii) to the best knowledge of Buyer, there are no
activities or proceedings of any labor union to organize any non-unionized
employees; (iii) neither Buyer nor any of its Subsidiaries has received notice
of any alleged unfair labor practice charges and/or complaints pending against
Buyer or any of its Subsidiaries or any of their respective representatives or
employees before the National Labor Relations Board or any current union
representation questions involving employees of Buyer or any of its
Subsidiaries; and (iv) Buyer's employment policies and practices comply in all
material respects with applicable law; and (v) there is no strike, slowdown,
work stoppage, labor dispute or lockout, or, to the best knowledge of Buyer,
threat thereof, by or with respect to any employees of Buyer or any of its
Subsidiaries. Buyer and its Subsidiaries are not parties to any collective
bargaining agreements or other labor union contracts applicable to individuals
employed or previously employed by Buyer or any of its Subsidiaries and, except
as disclosed in Buyer Disclosure Schedule 4.17, no collective bargaining
agreement or labor union contract is being negotiated by Buyer or any such
Subsidiary.
Section 4.18. Insurance. All material fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance policies maintained by Buyer or any of its Subsidiaries are
listed on Section 4.18 of the Buyer Disclosure Schedule. At the Effective Time,
all such insurance policies, or replacements thereof, will be outstanding and
duly in force. To Buyer's knowledge, no notice of termination or non-renewal of
any such insurance policy has been received by Buyer.
Section 4.19. [Intentionally Omitted].
Section 4.20. Voting Requirements. The affirmative vote of the holders
of a majority of Buyer Common Stock present at the Buyer Special Meeting (at
which a quorum is present, in favor of the issuance of Buyer Common Stock
pursuant to this Agreement, consistent with the requirements of the NYSE (the
"Buyer Stockholder Approval"), is the only vote of the holders of any class or
series of Buyer's capital stock necessary to approve the transactions
contemplated by this Agreement.
Section 4.21. Year 2000. Except as disclosed in Section 4.21 of the
Buyer Disclosure Schedule, as of the date hereof, all computer software
necessary for the conduct of its business (the "Software") is (or will be, prior
to December 31, 1999, as provided in Section 4.22 of the Buyer
33
Disclosure Schedule) designed to be used prior to, during, and after December
31, 1999, and the Software will operate during each such time period without
error relating to the year 2000, specifically including any error relating to,
or the product of, date data which represents or references different centuries
or more than one century. Buyer further represents and warrants that as of the
date hereof, the Software either does or will, prior to December 31, 1999 as
provided in Section 4.21 of the Buyer Disclosure Schedule accept, calculate,
sort, extract and otherwise process date inputs and date values, and return and
display date values, in a consistent manner regardless of the dates used,
whether before, on, or after January 1, 2000.
Section 4.22. Opinion of Financial Advisor. Buyer has received the
opinion of Merrill, Lynch, Xxxxxx, Xxxxxx and Xxxxx Incorporated ("Xxxxxxx
Xxxxx") dated the date of this Agreement, to the effect that the Merger
Consideration is fair to the holders of Buyer Common Stock from a financial
point of view.
Section 4.23. Brokers. None of Buyer, 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, finder's or other fees in connection with the transactions
contemplated by this Agreement, except that Buyer has retained Xxxxxxx Xxxxx as
its financial advisor.
Section 4.24. No Operations or Liabilities of Merger Sub. Other than in
connection with the transactions contemplated by this Agreement, since its date
of incorporation, Merger Sub has not conducted any business, has not owned,
leased or operated any real property and has not incurred, and is not subject
to, any liabilities or obligations of any nature, whether or not accrued,
contingent or otherwise.
Section 4.25. Ownership of Securities. As of the date hereof, neither
Buyer nor, to Buyer's knowledge, any of its affiliates or associates (as such
terms are defined under the Exchange Act), (i) beneficially owns, directly or
indirectly, or (ii) is party to an agreement, arrangement or understanding
(other than this Agreement) for the purpose of acquiring, holding or disposing
of, in each case, shares of Players Common Stock representing at least 20% of
the total number of outstanding shares of Players Common Stock.
ARTICLE V.
COVENANTS
Section 5.1. Conduct of Business.
(a) By Buyer. Except as disclosed in Section 5.1 of the Buyer
Disclosure Schedule or in the Buyer SEC Reports, during the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, Buyer agrees as to itself and its Subsidiaries
(except to the extent that Players shall otherwise consent in writing)
34
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 commercially 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, during the period from the date of this Agreement until the Effective
Time, Buyer agrees (except as otherwise contemplated by this Agreement, or to
the extent that Players shall otherwise consent in writing) as follows:
(i) Governing Documents. Buyer shall not amend its
Certificate of Incorporation, By-laws or other charter or
organizational documents.
(ii) No Acquisitions. Buyer shall not and shall cause its
Subsidiaries not to acquire or agree to acquire (including, without
limitation, by merger, consolidation or acquisition of stock or assets)
any material business, including through the acquisition of any
interest in any corporation, partnership, joint venture, association or
other business organization or division thereof nor, in the case of the
pending acquisition (the "CRC Transaction") of CRC Holdings, Inc.
("CRC"), shall it complete such acquisition on terms and conditions
materially less advantageous to Buyer or Buyer's stockholders than
those previously disclosed to Players; provided, however, that Buyer
will be permitted to acquire for fair value Nevada based route
businesses for consideration not exceeding $20,000,000 in the
aggregate.
(iii) No Dispositions. Buyer shall not and shall cause its
Subsidiaries not to sell, lease, license, mortgage or otherwise
encumber or otherwise dispose of any of its material properties or
assets, other than in the ordinary course of business consistent with
past practice.
(iv) Accounting Matters. Buyer shall not make any material
change in accounting methods, principles or practices except as
required by GAAP, or the applicable regulations under the Securities
Act and the Exchange Act.
(v) Issuance of Securities. Buyer shall not and shall cause
its Subsidiaries not to issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options
to acquire, any such shares, voting securities or convertible
securities (other than the issuance of shares of Buyer Common Stock
upon the exercise of Buyer Options outstanding on the date of this
Agreement and in accordance with their present terms, pursuant to this
Agreement or the transactions contemplated herein or in connection with
the CRC Transaction; provided, however, that Buyer will be permitted to
issue Buyer Common Stock (or securities convertible into or exercisable
for Buyer Common Stock), at a per share price
35
not less than the then current market price; not exceeding $15,000,000
in the aggregate in order to consummate Nevada based route business
acquisitions permitted by clause (ii) above.
(vi) Indebtedness. Buyer shall not and shall cause its
Subsidiaries not to (y) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of Buyer or any of its Subsidiaries, or guarantee any debt
securities of another person, other than short-term bank financing in
the ordinary course of business consistent with past practice or (z)
make any loans, advances or capital contributions to, or investments
in, any other person, other than in the ordinary course of business
consistent with past practice, except as required under this Agreement
and the transactions contemplated herein or in connection with the CRC
Transaction; provided, however, that Buyer will be permitted to incur
indebtedness in an aggregate principal amount not exceeding $15,000,000
in order to consummate Nevada based route business acquisitions
permitted by clause (ii) above.
(vii) Settlement. Buyer shall not and shall cause its
Subsidiaries not to settle any pending or threatened litigation
involving Buyer or any of its Subsidiaries (whether brought by a
private party or a Government Entity), except for settlements that, in
the aggregate, involve payments, not covered by insurance, by Buyer or
any Subsidiaries of less than $250,000 and which settle entire claims
or causes of action arising out of the same or similar facts and
circumstances or do not impose any material restrictions on the
business or operations of Buyer or any of its Subsidiaries.
(viii) General. Buyer shall not and shall cause its
Subsidiaries not to authorize any of, or commit or agree to take any
of, the foregoing actions.
(b) By Players. Except as disclosed in Section 5.1 of the
Players 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, Players agrees as to itself and its respective Subsidiaries
(except to the extent that Buyer 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
commercially 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, during the period from the
date of this Agreement until the Effective Time, Players agrees (except as
otherwise contemplated by this Agreement, or to the extent that Buyer shall
otherwise consent in writing) as follows:
36
(i) Dividends; Changes in Stock. Players shall not and shall
cause its Subsidiaries not to, other than dividends and distributions
by a direct or indirect wholly owned Subsidiary of Players to its
parent (x) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, stock or property), in respect of
, any of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock (other than the issuance of shares of Players Common
Stock upon the exercise of Players Options outstanding on the date of
this Agreement and in accordance with their present terms) or (z)
purchase, redeem or otherwise acquire any shares of capital stock of
Players or any of its Subsidiaries or any other securities thereof or
any rights, warrants or options to acquire any such shares or other
securities.
(ii) Issuance of Securities. Players shall not and shall cause
its Subsidiaries not to issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options
to acquire, any such shares, voting securities or convertible
securities (other than the issuance of shares of Players Common Stock
upon the exercise of Players Options outstanding on the date of this
Agreement and in accordance with their present terms).
(iii) Governing Documents. Players shall not and shall cause
its Subsidiaries not to amend its Certificate of Incorporation, By-Laws
or other comparable charter or organizational documents.
(iv) No Acquisitions. Players shall not and shall cause its
Subsidiaries not to acquire or agree to acquire (including, without
limitation, by merger, consolidation or acquisition of stock or assets)
any business, including through the acquisition of any interest in any
corporation, partnership, joint venture, association or other business
organization or division thereof.
(v) No Dispositions. Players shall not and shall cause its
Subsidiaries not to sell, lease, license, mortgage or otherwise
encumber or otherwise dispose of any of its material properties or
assets, other than in the ordinary course of business consistent with
past practice.
(vi) Indebtedness. Players shall not and shall cause its
Subsidiaries not to (y) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of Players or any of its Subsidiaries, or guarantee any debt
securities of another person, other than short-term bank financing in
the ordinary course of business consistent with past practice or (z)
make any loans, advances or capital contributions to, or investments
in, any other person, other than in the ordinary course of business
consistent with past practice.
37
(vii) Employee Benefits. Players shall not and shall cause its
Subsidiaries not to, except as required by applicable law or, with
respect to the limitations contained in subclauses (C) and (G) of this
Section 5.1(b)(vii), agreements, plans or arrangements existing on the
date hereof, (A) adopt, enter into, terminate or amend any employment,
severance, retention or similar agreement or contract; (B) negotiate or
enter into any collective bargaining agreement or labor union contract;
(C) increase, in any manner, the compensation or fringe benefits of, or
pay any bonus to, any director, officer or employee (except for normal
increases of cash compensation or cash bonuses in the ordinary course
of business consistent with past practice); (D) adopt or establish any
new benefit plan; or amend any existing benefit plan, including,
without limitation, the Players Employee Plans and the Players Welfare
Plan, except as required by law; or pay any benefit not provided for
under any Players Employee Plan or Players Welfare Plan; (E) adopt,
establish or amend any severance pay plan; or increase in any manner
the severance or termination pay of any officer or employee; (F) modify
the provisions of any Players Stock Option Plan; or adjust or modify
the terms of any outstanding Players Options; or take any action to
accelerate the vesting of, or cash out rights associated with, any
Players Option or Players SAR, except as contemplated by the Employment
Agreements; or remove existing restrictions in any Players Stock Option
Plan or other plan or arrangement; (G) grant any new awards under any
Players Stock Option Plan or other bonus, incentive, performance or
compensation plan or arrangement, including the grant of Players
Options, Players SARs, stock-based or stock-related awards, performance
units or restricted stock; (H) take any action to fund or, in any other
way secure, the payment of compensation or benefits under any Players
Employee Plan, Players Welfare Plan or other employee plan, agreement,
contract or arrangement; or (I) hire any individual as an employee,
independent contractor or consultant who will be paid an annual base
salary that equals or exceeds $100,000, without the prior written
consent of the Buyer.
(viii) Material Contracts. Players shall not and shall cause
its Subsidiaries not to enter into any agreement of a nature that would
be required to be filed as an exhibit to Form 10-K under the Exchange
Act.
(ix) Accounting Matters. Players shall not and shall cause its
Subsidiaries not to make any material change in accounting methods,
principles or practices except as required by GAAP, or the applicable
regulations under the Securities Act and the Exchange Act.
(x) Tax Matters. Players shall not and shall cause its
Subsidiaries not to make any material tax election or enter into any
settlement or compromise with respect to any material income tax
liability.
(xi) Settlement. Players shall not and shall cause its
Subsidiaries not to settle any pending or threatened litigation
involving Players or any of its Subsidiaries (whether brought by a
private party or a Government Entity), except for settlements that, in
the aggregate, involve payments, not covered by insurance, by Players
or any Subsidiaries of less than
38
$250,000 and which settle entire claims or causes of action arising out
of the same or similar facts and circumstances or do not impose any
material restrictions on the business or operations of Players or any
of its Subsidiaries.
(xii) Capital Expenditures. Players together with its
Subsidiaries shall not make capital expenditures in excess of
$1,500,000 individually or $10,000,000 in the aggregate.
(xiii) General. Players shall not and shall cause its
Subsidiaries not to authorize any of, or commit or agree to take any
of, the foregoing actions.
Section 5.2. Cooperation; Notice; Cure. Subject to compliance with
applicable law, from the date hereof until the Effective Time, each of Buyer and
Players 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 Players and Buyer 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 Players or Buyer 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 Players or Buyer contained in this Agreement.
Section 5.3. No Solicitation. From and after the date hereof, Players
shall not, directly or indirectly, through any officer, director, employee,
financial advisor, representative or agent of such party (i) solicit, initiate,
or encourage (including by way of furnishing information) or take any other
action to facilitate knowingly 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 or exchange
offer) or similar transaction involving Players 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 Buyer 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 until approval of the Merger at
the Players Special Meeting (as defined below), nothing contained in this
Agreement shall prevent Players or its Board of Directors, from furnishing
non-public information to, or entering into discussions or negotiations with,
any person or entity in connection with an unsolicited bona fide written
Acquisition Proposal 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 Acquisition Proposal to the
stockholders of Players, if the Board of Directors of Players reasonably
believes in good faith that (i) such Acquisition Proposal after consultation
with, and receipt of advice from, DLJ is reasonably capable of being completed
on substantially the terms proposed and to be superior from a financial point of
view to the holders of Players Common Stock and (ii) after receipt of advice to
such effect from outside legal counsel (who may be Players' regularly engaged
outside legal counsel), determines in
39
good faith that such action is required for the Board of Directors of Players to
comply with its duties to holders of Players Common Stock imposed by applicable
law (a "Superior Proposal").
Section 5.4. Joint Proxy Statement/ Prospectus; Registration Statement.
(a) As promptly as practicable after the execution of this
Agreement, Players and Buyer shall prepare and file with the SEC, in preliminary
form, a joint proxy statement/prospectus to be sent to the respective
stockholders of each of Players and Buyer in connection with, and to consider
this Agreement and the Merger (the "Joint Proxy Statement/Prospectus") and the
related registration statement in which the Joint Proxy Statement/Prospectus
will be included as a prospectus (the "Registration Statement"), provided that
Players and Buyer may delay the filing of the Registration Statement until
approval of the Joint Proxy Statement/Prospectus by the SEC. Players and Buyer
shall use all reasonable efforts to cause the Registration Statement to become
effective as soon after such filing as practicable.
(b) Players and Buyer shall make all necessary filings with
respect to the Merger under the Securities Act, the Exchange Act, applicable
state blue sky laws and the rules and regulations thereunder.
(c) Buyer agrees that the Registration Statement shall enable
resales of Buyer Common Stock by former "affiliates" (as defined in Rule 405
under the Securities Act) of Players so that such former Players affiliates are
not subject to any volume limitation on resale pursuant to Rule 145(d) under the
Securities Act.
Section 5.5. Special Meeting. Players shall duly call, give notice of,
convene and hold a special meeting of its stockholders for the purpose of voting
upon this Agreement and the Merger (the "Players Special Meeting") and Buyer
shall duly call, give notice of, convene and hold a special meeting of its
stockholders for the purpose of voting upon and approving the transactions
contemplated by this Agreement (the "Buyer Special Meeting"), in each case as
promptly as reasonably practicable after the date hereof. Except as expressly
otherwise provided in Section 5.3 hereof, Players shall, through its Board of
Directors, recommend to its stockholders adoption and approval of this Agreement
and the Merger. Buyer shall through its Board of Directors, recommend to its
stockholders approval of the transactions contemplated by this Agreement, and
each party shall use all reasonable efforts to solicit from its stockholders
proxies in favor of such matters.
Section 5.6. Access to Information. Upon reasonable notice, each of
Buyer and Players (and each of their respective Subsidiaries) shall afford to
the other party and its officers, employees, accountants, counsel and other
representatives, reasonable 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, each of Buyer and
Players shall, and shall cause each of its respective 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
documents filed or received by it during such period pursuant to the
requirements of federal or state
40
securities laws and (c) all other information concerning its business,
properties and personnel as the other party may reasonably request. Each party
making such requests will hold any such information furnished to it by the other
party in confidence in accordance with the confidentiality agreement between the
parties (the "Confidentiality Agreement"). 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.
Section 5.7. Governmental Approvals.
(a) The parties hereto shall cooperate with each other and use
all commercially reasonable efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, to
obtain as promptly as practicable without conditions, restrictions or
limitations that are more restrictive than those conditions, restrictions and
limitations applicable to Players on the date hereof, 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 ("Governmental Approvals"). Each of
the parties hereto and their respective officers, directors and affiliates shall
file within 60 days after the date hereof, all required initial applications and
documents in connection with obtaining the Governmental Approvals and shall act
reasonably and promptly thereafter in responding to additional requests in
connection therewith. Players and Buyer 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 Players or to Buyer, 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 Players and Buyer (the
"Notifying Party") will notify the other reasonably promptly of the receipt of
material comments or requests from Governmental Entities relating to
Governmental Approvals, and will supply the other party with copies of all
material 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) Players and Buyer 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.
Players and Buyer 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, limitation, promptly appealing any
41
adverse court or administrative order or injunction to the extent reasonably
necessary for the foregoing purposes.
Section 5.8. Publicity. Players and Buyer 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, Buyer agrees that it
will, and will cause the Surviving Corporation to, indemnify and hold harmless
each present and former director and officer of Players (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 Players 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 three years after the Effective Time,
Buyer 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 Players' directors' and officers' liability
insurance policy (copies of which have been heretofore delivered by Players to
Buyer) with coverage in amount and scope at least as favorable as Players'
existing coverage; provided that in no event shall Buyer or the Surviving
Corporation be required to expend in the aggregate in excess of 200% of the
annual premium currently paid by Players for such coverage; and if such premium
would at any time exceed 200% of the such amount, then Buyer 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 Players 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. Players shall give Buyer the
reasonable opportunity to participate in the defense or settlement of any
stockholder litigation against Players and its directors relating to the
transactions contemplated hereby, provided, however, that no such settlement
shall be agreed to without Buyer's consent.
42
Section 5.11. Employee Benefits.
(a) Buyer shall cause the Surviving Corporation to honor all
written employment, severance and termination agreements (including change in
control provisions) of the employees of Players and its Subsidiaries provided to
Buyer on or prior to the date of this Agreement and which are identified on
Players Disclosure Schedule 3.14(a).
(b) For purposes of determining eligibility for participation
and vesting under any employee benefit plan or arrangement of Buyer or the
Surviving Corporation, employees of Players and its Subsidiaries as of the
Effective Time shall receive service credit for service with Players and any of
its Subsidiaries to the same extent such service was granted under the Employee
Plans but not for purposes of determining benefit accruals. This Section 5.11
shall not obligate the Buyer or Surviving Corporation to provide duplicate
benefits to employees of Players and its Subsidiaries.
(c) Nothing in this Agreement is intended to create any right
of employment for any person or to create any obligation for Buyer or the
Surviving Corporation to continue any Plan of Players following the Effective
Time.
(d) Players shall obtain and deliver to Buyer prior to the
Closing Date a written resignation letter from each of Xxxxxx X. Xxxxxxxx, Xxxxx
X. Xxxxxx, Xxxx Xxxxx and Xxxxxxx Xxxxxxx, Xx. (the "Executives") which shall be
effective as of the Effective Time, and Buyer agrees that it will, and will
cause the Surviving Corporation to, (i) treat each such resignation as a
"Termination Upon a Change of Control" for purposes of the respective Employment
Agreement or Agreement with Players governing the terms of each Executive's
employment and severance from employment with Players, and for purposes of all
related option and other agreements affecting the terms and conditions of such
Executive's employment (collectively, the "Employment Agreements"), and (ii) pay
at Closing the amounts, and provide the benefits, required to be paid or
provided to each such Executive upon a Termination Upon a Change of Control
under the applicable Employment Agreement, in each case, without the need for
any further action by any Executive. To the extent permitted by and in
accordance with the Employment Agreements, the Buyer shall reduce the amounts
required to be paid to each Executive due to a Termination Upon Change of
Control or otherwise (the "Reduced Amount") to the extent necessary to avoid any
limitation of the Buyer's federal income tax deduction under Section 280G of the
Code and the rulings and regulations thereunder. The Reduced Amount shall
represent the maximum severance payment that an Executive may receive without
causing such payment to be subject to an excise tax and the limitations on
deductions under Section 280G of the Code. To the extent necessary to avoid any
limitation on the Buyer's deductions under Section 280G of the Code, after
determination of the Reduced Amount, the Buyer may also cause an Executive's
"parachute payments" (within the meaning of Code Section 280G) to be reduced to
the Reduced Amount, after consulting with each affected Executive to determine
which payments shall be reduced. At least ninety days before the Closing Date, a
report (the "Accountant's Report"), setting for the Reduced Amount, as described
in Section 5.11(d) hereof, for each Executive, prepared by Ernst & Young (the
"Accountant") shall be delivered to Buyer for its review.
43
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 Buyer, Players and the Surviving
Corporation shall take all such necessary action.
(c) Notwithstanding the foregoing, if Buyer reasonably
determines that it is necessary or desirable to consummate the Merger or any of
the other transactions contemplated by this Agreement, Buyer (or any Subsidiary
of Buyer) or, at Buyer's request, Players shall commence an offer (the "Tender
Offer") to purchase all of the outstanding 107/8% Senior Notes due 2005 (the
"Senior Notes") and a solicitation of consents to eliminate substantially all of
the restrictive covenants contained in the indenture governing the Senior Notes
(collectively, the "Tender Offer and Consent Solicitation"), which Tender Offer
and Consent Solicitation shall be commenced in sufficient time in advance of the
Closing Date so that the Tender Offer can be consummated on the Closing Date and
shall be on such terms as are reasonably designed to result in the acceptance of
such offer and consent by the holder of the Senior Notes representing at least
662/3% of the aggregate principal amount of Senior Notes outstanding at the time
the Tender Offer and Consent Solicitation is consummated. If Players commences
the Tender Offer and Consent Solicitation, Players shall prepare, subject to
advice and comments of Buyer, an offer to purchase and consent solicitation for
the Senior Notes and forms of related letters of transmittal (collectively, the
"Offer to Purchase") and summary advertisement, as well as all other information
and exhibits (collectively, the "Offer Documents"). All mailings to the holder
of the Senior Notes in connection with the Tender Offer and Consent Solicitation
shall be subject to prior review, comment and approval of Buyer. Players will
use commercially reasonable efforts to cause the Offer Documents to be mailed to
the holders of the Senior Notes as promptly as practicable following receipt of
the request from Buyer to do so. Players agrees to promptly correct any
information in the Offer Documents that shall or have become false or misleading
in any material respect. Players shall waive any of the conditions to the Tender
Offer and Consent Solicitation and make any other changes in the terms and
conditions of the Tender Offer and Consent Solicitation as may be reasonably
requested by Buyer; provided that the Tender Offer and Consent Solicitation are
not required to be consummated unless the Merger is consummated. If Players
commences the Tender Offer and Consent Solicitation at Buyer's request
44
pursuant to this Section 5.12(c) and this Agreement is subsequently terminated
under circumstances in which Buyer is entitled to neither the Termination Fee
pursuant to Section 7.3(b) nor reimbursement of expenses pursuant to Section
7.3(c), then Buyer shall reimburse Players for all its expenses related thereto.
Section 5.13. Rights Plan. Prior to the Effective Date and at Buyer's
request, Players shall take all necessary action (i) to redeem, for .005 per
Right (as defined in the Rights Agreement), all of the outstanding Rights under
the Rights Agreement, effective immediately prior to the Effective Time, and to
ensure that after such redemption (A) neither Buyer nor Merger Sub shall have
any obligations under the Rights or Rights Agreement and (B) none of the holders
of the Rights shall have any rights under the Rights or Rights Agreement or (ii)
to amend the Rights Agreement to provide that the Rights expire without any
payment in respect thereof immediately prior to the Effective Time.
Section 5.14. Buyer's Board of Directors. Buyer and Players shall use
their reasonable efforts to agree on two individuals to be appointed as
additional directors to serve on Buyer's Board of Directors commencing the
Effective Time. If, prior to the Effective Time, the CRC Transaction has not
closed, Players and Buyer shall agree on a third additional director to serve on
the Buyer's Board of Directors in the event the CRC Transaction ultimately fails
to close.
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:
(a) Stockholder Approval. This Agreement and the Merger shall
have been approved by the stockholders of Players in the manner required under
the NRS and the Articles of Incorporation of Players. The Buyer Stockholder
Approval shall have been received in accordance with the requirements of the
NYSE.
(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 by this Agreement shall
have been obtained, 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 either party reasonably determines
in good
45
faith will have or would reasonably be expected to have a Players Material
Adverse Effect or a Buyer Material Adverse Effect.
(d) Registration Statement. The Registration Statement shall
have been declared effective, and no stop order suspending the effectiveness of
the Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the SEC.
(e) NYSE. The shares of Buyer Common Stock to be issued in the
Merger shall have been authorized for listing on the NYSE, subject to official
notice of issuance.
Section 6.2. Additional Conditions to Obligations of Players. The
obligation of Players 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 Players:
(a) Representations and Warranties. The representations and
warranties of Buyer 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 Buyer 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; provided, that
notwithstanding anything contained herein, no condition involving the accuracy
of representations and warranties made by Buyer shall be deemed not fulfilled if
the respects in which the representations and warranties are inaccurate, in the
aggregate, are not materially adverse to the business, financial condition or
results of operations of Buyer and its Subsidiaries, taken as a whole. Players
shall have received a certificate signed on behalf of Buyer by the Chief
Executive Officer and the Chief Financial Officer of Buyer to such effect.
(b) Performance of Obligations of Buyer. Buyer shall have
performed in all material respects all material obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Players shall have received a certificate signed on behalf of Buyer by the Chief
Executive Officer and the Chief Financial Officer of Buyer to such effect.
(c) Buyer Acquisition. Buyer shall not have completed the CRC
Transaction on terms which are materially less advantageous to Buyer or Buyer's
stockholders than those contained in the form of agreement (including the forms
of agreements referenced therein) previously supplied to Players.
Section 6.3. Additional Conditions to Obligations of Buyer. The
obligations of Buyer 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 Buyer:
(a) Representations and Warranties. The representations and
warranties of Players set forth in this Agreement shall be true and correct in
all material respects (except for those
46
qualified as to materiality or a Players 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, notwithstanding anything
contained herein, no condition involving the accuracy of representations and
warranties made by Players shall be deemed not fulfilled if the respects in
which the representations and warranties are inaccurate, in the aggregate, are
not materially adverse to the business, financial condition or results of
operations of Players and its Subsidiaries, taken as a whole. Buyer shall have
received a certificate signed on behalf of Players by the Chief Executive
Officer and the Chief Financial Officer of Players to such effect.
(b) Performance of Obligations of Players. Players shall have
performed in all material respects all material obligations required to be
performed by it under this Agreement at or prior to the Closing Date. Buyer
shall have received a certificate signed on behalf of Players by the Chief
Executive Officer and the Chief Financial Officer of Players to each such
effect.
(c) Financing. Buyer shall have obtained financing sufficient
to allow Buyer to complete the transactions contemplated in this Agreement.
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(k), 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 the parties:
(a) by mutual written consent of Players and Buyer; or
(b) by either Buyer or Players if the Merger shall not have
been consummated by September 30, 1999 (the "Outside Date"); provided that
either Buyer or Players may extend the Outside Date to December 31, 1999 by
providing written notice thereof to the other party within five (5) business
days prior to and including September 30, 1999 if (i) the Merger shall not have
been consummated by such date because the requisite Governmental Approvals
required under Section 6.1(c) have not been obtained and are still being
pursued, (ii) the party requesting such extension has not violated any of its
obligations under this Agreement in a manner that was the cause of or resulted
in the failure of the Merger to occur on or before September 30, 1999, (iii) it
is reasonably probable, based on, among other things, the status of completed
regulatory filings, scheduled regulatory meetings and the advice of regulatory
counsel to such party, that the requisite Governmental Approvals will be
obtained within such extension period; and (iv) in the event such extension is
requested by Buyer, Buyer either (A) has furnished to Players a letter, dated as
of the date Buyer requests such extension, from Xxxxxxx Xxxxx to the effect that
Xxxxxxx Xxxxx is, as of the date of such
47
letter, highly confident that Xxxxxxx Xxxxx (or another nationally recognized
investment banking firm of comparable stature) will be able to raise funds
sufficient for Buyer to meet all of its financial obligations under this
Agreement, or (B) has permanently waived the condition to closing set forth in
Section 6.3(c); provided further that 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 or resulted in
the failure of the Merger to occur on or before such date; or
(c) by either Buyer or Players if a court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other final action not subject to appeal, in each case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger; or
(d) by either Buyer or Players, if, at the Players Special
Meeting (including any adjournment or postponement), the requisite vote of the
stockholders of Players in favor of the approval and adoption of this Agreement
and the Merger shall not have been obtained; or
(e) by Buyer, if the Board of Directors of Players shall have
(i) withdrawn or modified its recommendation of this Agreement or the Merger,
(ii) recommended an Acquisition Proposal to the stockholders of Players, or
(iii) failed to reaffirm its recommendation of this Agreement and the Merger
upon the request of Buyer at any time, in the case of (i), (ii) and (iii) in
accordance with the proviso in Section 5.3; or
(f) by Players, in accordance with Section 5.3; provided that
no termination under this Section 7.1(f) shall be effective until (i) the
termination fee required by Section 7.3(b) shall be paid and (ii) at least three
Business Days shall have elapsed after delivery to Buyer of a written notice
from Players providing a complete and accurate description of material terms of
the Superior Proposal, including the identity of all parties thereto.
(g) by Buyer, upon breach of any material representation,
warranty, covenant or agreement on the part of Players set forth in this
Agreement, or if any representation or warranty of Players shall have become
untrue, in either case such that the conditions set forth in Section 6.3 would
not be satisfied ("Terminating Players Breach"); provided, however, that, if
such Terminating Players Breach is curable by Players through best efforts
within 30 days and for so long as Players continues to exercise such best
efforts during such 30 day period, Buyer may not terminate this Agreement under
this Section 7.1(g); or
(h) by Players, upon breach of any material representation,
warranty, covenant or agreement on the part of Buyer set forth in this
Agreement, or if any representation or warranty of Buyer shall have become
untrue, in either case such that the conditions set forth in Section 6.2 would
not be satisfied ("Terminating Buyer Breach"); provided, however, that, if such
Terminating Buyer Breach is curable by Buyer through best efforts within 30 days
and for so long as Buyer continues to exercise such best efforts during such 30
day period, Players may not terminate this Agreement under this Section 7.1(h);
or
48
(i) by Players, if Buyer has not filed all required initial
applications and documents in connection with obtaining the Governmental
Approvals within 60 days after the date of this Agreement, as further set forth
in Section 5.7 hereof; provided, however, that Players shall not be permitted to
terminate this Agreement pursuant to this Section 7.1(i) if Buyer has filed all
such required initial applications and documents;
(j) by either Buyer or Players if, at the Buyer Special
Meeting (including any adjournment or postponement), the requisite vote of the
stockholders of Buyer in favor of the transactions contemplated by this
Agreement shall not have been obtained; or
(k) by Players pursuant to Section 2.1(a).
Neither Players nor Buyer shall have the right to terminate this Agreement based
on any findings of Buyer's Compliance Committee referenced in Section 4.3(a).
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 Buyer, Merger
Sub or Players, 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 (i) a willful breach of this Agreement or (ii) a
breach by Buyer or Merger Sub of its obligations pursuant to the second sentence
of Section 5.7(a); provided that the provisions of this Section 7.2 and 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 and the last
sentence of Section 5.12(c), 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. Fees
and expenses payable under this Section 7.3 to any party hereunder shall include
all costs of collection and interest from the date such payment is due at a rate
per annum of London Interbank Offered Rate plus 2%.
(b) Players shall pay Buyer a termination fee of $13,500,000
via wire transfer of same-day funds on the date of the earliest to occur of the
following events:
(i) the termination of this Agreement by Buyer or Players
pursuant to Section 7.1(d), if an Acquisition
Proposal involving Players shall have been publicly
announced and be pending at the time of the Special
Meeting;
(ii) the termination of this Agreement by Buyer pursuant
to Section 7.1(e); or
(iii) the termination of this Agreement by Players pursuant
to Section 7.1(f).
49
Players' payment of a termination fee pursuant to this
subsection shall be the sole and exclusive remedy of Buyer against Players 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 Players.
(c) In addition to the provisions of Section 7.3(b), if (i)
Buyer or Players terminates the Agreement pursuant to Section 7.1(d), (ii) Buyer
terminates this Agreement pursuant to Section 7.1(g) or (iii) Players or Buyer
terminates this Agreement pursuant to Section 7.1(b) and the condition specified
in Section 6.1(c) shall not have been satisfied because of facts or
circumstances relating to Players, its employees or operations not previously
disclosed to Buyer by Players, Players shall immediately thereafter reimburse
Buyer and Merger Sub all fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby up to an amount equal to
$1,000,000 plus, in the case of (i) above, a termination fee of $3,000,000;
provided, further, that Players shall reimburse Buyer and Merger Sub one-half of
all fees (i) incurred by Buyer in respect of Buyer's financing under this
Agreement and (ii) approved in writing by Players prior to the time incurred.
(d) If (i) Players terminates this Agreement pursuant to
Section 7.1(i), (ii) Buyer or Players terminates this Agreement pursuant to
Section 7.1(j), (iii) Players terminates this Agreement pursuant to Section
7.1(h) or (iv) Players or Buyer terminates this Agreement pursuant to Section
7.1(b) and the condition specified in Section 6.1(c) shall not have been
satisfied because of facts or circumstances relating to Buyer, its employees or
operations, Buyer shall immediately thereafter reimburse Players all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby up to an amount equal to $1,000,000 plus, in the case of
(ii) above, a termination fee of $3,000,000.
(e) If this Agreement is terminated by either Buyer or Players
pursuant to Section 7.1(b), and all conditions to closing other than that
contained in Section 6.3(c) are or would have been satisfied (or, with respect
to the conditions under Section 6.2, are capable of being waived by Players) at
a closing held on the date of termination, Buyer shall pay Players a termination
fee of $3,000,000 and shall reimburse Players all fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby up to an
amount equal to $1,000,000.
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 Players, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders 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
50
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, covenants 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,
1.5, 1.6, 2.1, 2.2, 2.3, 5.9, and 5.11 and Article VIII. The Confidentiality
Agreement shall survive the execution and delivery of this Agreement.
Section 8.2. Notices. Any and all notices, demands or other
communications required or desired to be given hereunder by any party shall be
in writing and shall be validly given or made to another party if served
personally, or by facsimile or air courier, or deposited in the United States
mail, certified or registered, postage prepaid, return receipt requested. If
such notice, demand or other communications be served personally, or by
facsimile or air courier, service shall be conclusively deemed made at the time
of such service. If such notice, demand or other communications be given by
mail, it shall be conclusively deemed given three (3) days after the deposit
thereof in the United States mail, addressed to the party to whom such notice,
demand or other communication is to be given as hereinafter set forth:
(a) if to Players, to
Players International, Inc.
Attention: Chief Executive Officer
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
with a copy to
Xxxxxx, Xxxxx & Xxxxxxx LLP
Attention: Xxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
51
(b) if to Buyer or Merger Sub, to
Jackpot Enterprises, Inc.
Attention: Xxx X. Xxxxxxxxx
000 Xxxxx Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
with a copy to:
Camhy Xxxxxxxxx & Xxxxx LLP
Attention: Xxxx X. Annex, Esq.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Shearman & Sterling
Attention: Xxxx X. Xxxxxxxx, Xx., Esq.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
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
February 8, 1999.
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.
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 survive the execution and
delivery of this Agreement. Each party hereto agrees that, except for the
representations and warranties contained in this Agreement, none of Buyer,
Merger Sub or Players makes any other representations or warranties, and each
hereby disclaims any other representations and warranties made by itself or any
of its officers, directors,
52
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. Except to the extent that Nevada law
applies to the Merger as a matter of law, this Agreement shall be governed and
construed, and the obligations, rights and remedies of the parties hereunder
shall be determined, in accordance with the laws of the State of New York
without reference to the conflicts of law or choice of law doctrine of such
state.
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 party, except that Merger Sub may assign its rights and
obligations hereunder to any direct or indirect wholly-owned subsidiary of
Buyer; provided that no such assignment shall relieve Buyer 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.
Section 8.8. Severability; Enforcement. Except to the extent that the
application of this Section 8.8 would have a Buyer Material Adverse Effect with
respect to Buyer or a Players Material Adverse Effect with respect to Players,
the invalidity of any portion hereof shall not affect the validity, force or
effect of the remaining portions hereof. If it is ever held that any covenant
hereunder is too broad to permit enforcement of such covenant to its fullest
extent, each party agrees that a court of competent jurisdiction may enforce
such covenant to the maximum extent permitted by law, and each party hereby
consents and agrees that such scope may be judicially modified accordingly in
any proceeding brought to enforce such covenant.
Section 8.9. Specific Performance. Except as provided in Sections
7.3(b), the parties hereto agree that the remedy at law for any breach of this
Agreement will be inadequate and that any party by whom this Agreement is
enforceable shall be entitled to specific performance in addition to any other
appropriate relief or remedy. Such party may, in its sole discretion, apply to a
court of competent jurisdiction for specific performance or injunctive or such
other relief as such court may deem just and proper in order to enforce this
Agreement or prevent any violation hereof and, to the extent permitted by
applicable laws, each party hereto waives any objection to the imposition of
such relief.
Signatures Begin Next Page
53
IN WITNESS WHEREOF, Buyer, Inc., Buyer Sub Corp. and Players
International, Inc. have caused this Agreement to be signed by their respective
duly authorized officers as of the date first written above.
JACKPOT ENTERPRISES, INC.
/s/ Xxx X. Xxxxxxxxx
-----------------------------------
By: Xxx X. Xxxxxxxxx
Its: Chief Executive Officer
JEI MERGER CORP.
/s/ Xxx X. Xxxxxxxxx
-----------------------------------
By: Xxx X. Xxxxxxxxx
Its: Chief Executive Officer
PLAYERS INTERNATIONAL, INC.
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
54
Exhibit A
CORPORATION
FORM STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of February __,1999
(this "Agreement"), by the ____________, a ________ corporation ("Stockholder"),
to and for the benefit of Jackpot Enterprises, Inc., a Nevada corporation
("Buyer").
WHEREAS, as of the date hereof, Stockholder owns of record and
beneficially ___________ shares (such shares, together with any other voting or
equity securities of Players International, Inc., a Nevada corporation
("Players"), hereafter acquired by Stockholder prior to the termination of this
Agreement, being referred to herein collectively as the ("Shares") of common
stock, par value $0.005 per share ("Players Common Stock");
WHEREAS, concurrently with the execution of this Agreement,
Buyer, JEI Merger Corp., a Nevada corporation and an indirect wholly-owned
subsidiary of Buyer ("Merger Sub"), and Players are entering into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement";
capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Merger Agreement), pursuant to
which, upon the terms and subject to the conditions thereof, Merger Sub will be
merged with and into Players such that Players will become an indirect
wholly-owned subsidiary Buyer (the "Merger"); and
WHEREAS, as a condition to the willingness of Players, Buyer
and Merger Sub to enter into the Merger Agreement, Buyer has requested the
Stockholder agree, and in order to induce Buyer 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 Players Stockholders' Meeting or any other meeting of the stockholders of
Players, however called, and in any action by written consent of the
stockholders of Players, Stockholder will vote all of its 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, (b) against any
proposal for any recapitalization, merger (other than the Merger), sale of
assets or other business combination
between Players and any person or entity (other than Buyer or any subsidiary of
Buyer) or any other action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of
Players under the Merger Agreement or which could result in any of the
conditions to the Merger Agreement not being fulfilled and (c) 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
Players (or any class thereof). In addition, Stockholder agrees that it will,
upon request by Buyer, furnish written confirmation, in form and substance
reasonably acceptable to Buyer, of such Stockholders vote in favor of the Merger
Agreement and the Merger. Stockholder acknowledges receipt and review of a copy
of the Merger Agreement. Notwithstanding the foregoing, this Agreement shall not
limit or affect in any way Stockholder's rights with respect to the election of
directors of Players.
Section 2. Proxy. Subject to any required approval under
Players Gaming Laws, the Stockholder, by this Agreement, does hereby constitute
and appoint Buyer, or any nominee of Buyer, with full power of substitution, as
such Stockholder's irrevocable proxy and attorney-in-fact to vote the Shares as
indicated in Section 1, in the event such Stockholder fails to comply with its
obligations under such section. Each Stockholder intends this proxy to be
irrevocable and coupled with an interest and will take such further action and
execute such other instruments as may be necessary to effectuate the intent of
this proxy and hereby revokes any proxy previously granted by it with respect to
its Shares.
Section 3. Transfer of Shares. Stockholder represents and
warrants that it has no present intention of taking action, prior to the
termination of this Agreement in accordance with the terms hereof, to, directly
or indirectly, (a) sell, assign, transfer (including by merger or otherwise by
operation of law), 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 or otherwise by operation of law) or other disposition of any Shares.
Section 4. Representations and Warranties of Stockholder.
Stockholder hereby represents and warrants to Buyer with respect to itself and
its ownership of the Shares as follows:
(a) The Stockholder is a corporation duly incorporated,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all necessary corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.
(b) The Stockholder is the record or beneficial owner of
_________ Shares. Such Stockholder is the lawful owner of such Shares,
free and clear of all voting agreements and commitments of every kind,
other than this Agreement. Neither such Stockholder nor any of its
Affiliates owns or holds any rights to acquire any additional
Shares or other securities of Players or any interest therein or any
voting rights with respect to any additional Shares or any other
securities of Players.
(c) This Agreement has been approved by all necessary
corporate or partnership action on the part of such Stockholder for the
execution and performance hereof by such Stockholder.
(d) This Agreement has been duly executed and delivered by a
duly authorized officer of such Stockholder.
(e) This Agreement constitutes the valid and binding agreement
of such Stockholder, enforceable against such Stockholder in accordance
with its terms.
(f) The execution and delivery of this Agreement by such
Stockholder does not violate or breach, and will not give rise to any
violation or breach, of such Stockholder's charter or bylaws, or,
except as will not materially impair the ability of such Stockholder to
effectuate, carry out or comply with all of the terms of this
Agreement, any law, contract, instrument, arrangement or agreement by
which such Stockholder is bound.
Section 5. No Solicitation. Stockholder agrees that in its
corporate capacity it will not, nor will it authorize or permit any of its
officers, directors, financial advisors, employees, agents and representatives
to, other than in accordance with the Merger Agreement, directly or indirectly,
(a) initiate, solicit or encourage (including by way of furnishing information)
or take any other action to facilitate knowingly any inquiries or proposals that
constitute, or could reasonably be expected to lead to an Acquisition Proposal,
(b) agree to or recommend any Acquisition Proposal, or (c) engage in
negotiations or discussions with a Third party concerning or provide any
non-public information to any person or entity relating to, any Acquisition
Proposal.
Section 6. Termination. This Agreement shall terminate upon
the earliest to occur of (i) the Effective Time or (ii) the termination of the
Merger Agreement in accordance with the terms thereof; PROVIDED that the
provisions of Sections 7 and 8 of this Agreement 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 7. 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 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 New York 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.
CORPORATION
----------------------------------
By:
Its:
Agreed and Acknowledged:
JACKPOT ENTERPRISES, INC.
--------------------------------
By:
Its:
INDIVIDUAL
FORM STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of February __, 1999
(this "Agreement"), by _______________ ("Stockholder") to and for the benefit of
Jackpot Enterprises, Inc., a Nevada corporation ("Buyer").
WHEREAS, as of the date hereof, Stockholder owns of record and
beneficially _________ shares (such shares, together with any other voting or
equity securities of Players International, Inc., a Nevada corporation
("Players"), hereafter acquired by Stockholder prior to the termination of this
Agreement, being referred to herein collectively as the "Shares") of common
stock, par value $0.005 per share ("Players Common Stock");
WHEREAS, concurrently with the execution of this Agreement,
Buyer, JEI Merger Corp., a Nevada corporation and an indirect wholly-owned
subsidiary of Buyer ("Merger Sub"), and Players are entering into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement";
capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Merger Agreement), pursuant to
which, upon the terms and subject to the conditions thereof, Merger Sub will be
merged with and into Players such that Players will become an indirect
wholly-owned subsidiary of Buyer (the "Merger"); and
WHEREAS, as a condition to the willingness of Players, Buyer
and Merger Sub to enter into the Merger Agreement, Buyer has requested the
Stockholder agree, and in order to induce Buyer 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 Players Stockholders' Meeting or any other meeting of the stockholders of
Players, however called, and in any action by written consent of the
stockholders of Players, 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, (b)
against any proposal for any recapitalization, merger (other than the Merger),
sale of assets or other business combination between Players and any person or
entity (other than Buyer or any subsidiary of Buyer) or any
other action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Players under
the Merger Agreement or which could result in any of the conditions to the
Merger Agreement not being fulfilled and (c) 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 Players (or any
class thereof). In addition, Stockholder agrees that it will, upon request by
Buyer, furnish written confirmation, in form and substance reasonably acceptable
to Buyer, of such Stockholder's vote in favor of the Merger Agreement and the
Merger. Stockholder acknowledges receipt and review of a copy of the Merger
Agreement. Notwithstanding the foregoing, this Agreement shall not limit or
affect in any way Stockholder's rights with respect to the election of directors
of Players.
Section 2. Proxy. Subject to any required approval under the
Players Gaming Laws, the Stockholder, by this Agreement, does hereby constitute
and appoint Buyer, or any nominee of Buyer, with full power of substitution, as
such Stockholder's irrevocable proxy and attorney-in-fact to vote the Shares as
indicated in Section 1, in the event such Stockholder fails to comply with its
obligations under such section. Each Stockholder intends this proxy to be
irrevocable and coupled with an interest and will take such further action and
execute such other instruments as may be necessary to effectuate the intent of
this proxy and hereby revokes any proxy previously granted by it with respect to
its Shares.
Section 3. Transfer of Shares. Stockholder represents and
warrants that it has no present intention of taking action, prior to the
termination of this Agreement in accordance with the terms hereof, to, directly
or indirectly, (a) sell, assign, transfer (including by merger, testamentary
disposition, interspousal disposition pursuant to a domestic relations
proceeding or otherwise by operation of law), 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 if applicable,
Stockholder shall have the right to use the Shares in such amount as is required
in connection with the exercise of certain options previously granted to
Stockholder due to expire on March 31, 1999 as consideration for the purchase
price of the stock underlying such options.
Section 4. Representations and Warranties of Stockholder.
Stockholder hereby represents and warrants to Buyer 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, stockholders' 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. Subject to Players Gaming Laws, 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 5. No Solicitation. Stockholder agrees that in his or
her individual capacity, as opposed to his capacity as a director of Players, 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, (a) initiate,
solicit or encourage (including by way of furnishing information) or take any
other action to facilitate knowingly any inquiries or proposals that constitute,
or could reasonably be expected to lead to an Acquisition Proposal, (b) agree to
or recommend any Acquisition Proposal, or (c) engage in negotiations or
discussions with a Third Party concerning, or provide any non-public information
to any person or entity relating to, any Acquisition Proposal.
Section 6. Termination. This Agreement shall terminate upon
the earliest to occur of (i) the Effective Time or (ii) the termination of the
Merger Agreement in accordance with the terms thereof; PROVIDED that the
provisions of Sections 7 and 8 of this Agreement
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 7. 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 8. Miscellaneous.
d. 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.
e. 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.
f. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
principles of conflicts of law thereof.
g. 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.
[STOCKHOLDER'S NAME]
___________________________________
Agreed and Acknowledged:
JACKPOT ENTERPRISES, INC.
_________________________
By:
Its:
Exhibit B
FORM OF
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT, dated as of February 8, 1999, to the Rights Agreement, dated
as of January 27, 1997 (the "Rights Agreement"), between Players International,
Inc., a Nevada corporation (the "Company"), and Interwest Transfer Co., Inc., as
Rights Agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement;
WHEREAS, pursuant to Section 26 of the Rights Agreement, the Company
and the Rights Agent may from time to time supplement or amend the Rights
Agreement; and
WHEREAS, all acts and things necessary to make this Amendment a valid
agreement, enforceable according to its terms, have been done and performed, and
the execution and delivery of this Amendment by the Company and the Rights Agent
have been in all respects duly authorized by the Company and the Rights Agent.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. The definition of "Acquiring Person" in Section 1 of the Rights
Agreement is hereby amended by adding the following additional sentence to the
end of such definition:
Notwithstanding the foregoing, neither Jackpot Enterprises,
Inc., a Nevada corporation ("Jackpot"), nor JEI Merger Corp.,
a Nevada corporation and a wholly-owned subsidiary of Jackpot
("Merger Sub"), shall be deemed to be an Acquiring Person" to
the extent of the acquisition by Jackpot or Merger Sub of
Common Shares pursuant to the terms of the Agreement and Plan
of Merger, dated as of February 7, 1999 (the "Merger
Agreement"), by and among the Company, Jackpot and Merger Sub.
2. The definition of "Section 11(a)(ii) Event" contained in Section 1
of the Rights Agreement is hereby amended by adding the following additional
sentence to the end of such definition:
Notwithstanding the foregoing, the acquisition by Jackpot or
Merger Sub of Common Shares pursuant to the terms of the
Merger Agreement, the consummation of the transactions
contemplated by the Merger Agreement and the
execution by Jackpot and Merger Sub of the Merger Agreement
with the Company shall not in any case be deemed to be a
"Section 11(a)(ii) Event."
3. The definition of "Section 13 Event" contained in Section 1 of the
Rights Agreement is hereby amended by adding the following additional sentence
to the end of such definition:
Notwithstanding the foregoing, the acquisition by Jackpot or
Merger Sub of Common Shares pursuant to the terms of the
Merger Agreement, the consummation of the transactions
contemplated by the Merger Agreement and the execution by
Jackpot and Merger Sub of the Merger Agreement with the
Company shall not in any case be deemed to be a "Section 13
Event."
4. Unless otherwise defined herein, the terms used herein shall have
the meanings ascribed to them in the Rights Agreement.
5. This Amendment to the Rights Agreement may be executed in any number
of counterparts. It shall not be necessary that the signature of or on behalf of
each party appears on each counterpart, but it shall be sufficient that the
signature of or on behalf of each party appears on one or more counterparts. All
counterparts shall collectively constitute a single agreement.
6. Except as expressly set forth herein, this Amendment to the Rights
Agreement shall not by implication or otherwise alter, modify, amend or in any
way effect any of the terms, conditions, obligations, covenants or agreements
contained in the Rights Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect.
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
PLAYERS INTERNATIONAL, INC.
Attest:
By:________________________________
Title:
INTERWEST TRANSFER CO., INC.
Attest:
By:________________________________
Title:
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