EXHIBIT 10.42
VOTING AGREEMENT
VOTING AGREEMENT, dated as of September 30, 1997 (this "Agreement"),
among Patriot American Hospitality Operating Company, a Delaware corporation
("PAHOC"), Patriot American Hospitality Operating Company Acquisition
Subsidiary, a Delaware corporation and a wholly owned subsidiary of PAHOC
("Acquisition Sub"), Patriot American Hospitality, Inc., a Delaware corporation
("Patriot") (collectively, PAHOC, Acquisition Sub and Patriot are referred to
herein as the "Parties"), and Xxxxxx X. Xxxxxxxx and National Amusements, Inc.,
a Maryland corporation (each, a "Stockholder" and collectively the
"Stockholders").
WHEREAS, as of the date hereof each Stockholder owns (i) of record and
beneficially, the number of shares of common stock, par value $.01 per share
(the "WHG Stock") of WHG Resorts & Casinos Inc., a Delaware corporation ("WHG"),
set forth in Column 1 of Exhibit A hereto and (ii) owns beneficially but not of
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record, the additional shares of WHG Stock set forth in Column 2 of Exhibit A
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hereto (all such shares and any shares hereafter acquired by the Stockholders
prior to the termination of this Agreement being referred to herein as the
"Shares");
WHEREAS, the Parties and WHG propose to enter into an Agreement and
Plan of Merger, dated as of the date hereof (as the same may be amended from
time to time, the "Merger Agreement"), which provides, upon the terms and
subject to the conditions thereof, for the merger of Acquisition Sub with and
into WHG (the "Merger"); and
WHEREAS, as a condition to the willingness of the Parties to enter
into the Merger Agreement, the Parties have requested that each Stockholder
agree, and, in order to induce the Parties to enter into the Merger Agreement,
the Stockholders have agreed to grant PAHOC irrevocable proxies to vote the
Stockholders' Shares subject to the terms set forth herein; and
WHEREAS, contemporaneously with the execution of this Agreement, each
Stockholder has delivered to the Parties an affiliate letter.
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants to the Parties as
follows:
SECTION 1.01. Due Authority. (a) Such Stockholder has full power and
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authority, corporate or otherwise, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by or on behalf of such Stockholder and, assuming its due
authorization, execution and delivery by the Parties, constitutes a legal, valid
and binding obligation of such Stockholder, enforceable against such Stockholder
in accordance with its terms, subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to the effect of
general principals of equity (regardless of whether such enforceability is
considered in proceeding in equity or at law).
(b) There is no beneficiary or holder of a voting trust certificate or
other interest of any trust of which such Stockholder is trustee whose consent
is required for the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
SECTION 1.02. No Conflict; Consents. (a) The execution and delivery of
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this Agreement by such Stockholder does not, and the performance of the
transactions contemplated by this Agreement by such Stockholder and the
compliance by such Stockholder with any provisions hereof shall not, (i)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to such Stockholder or by which such Stockholder's Shares are bound,
(ii) conflict with or violate the Stockholder's certificate of incorporation or
by-laws or other organizational document, if applicable to such Stockholder,
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of such Stockholder's Shares
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which such
Stockholder is a party or by which such Stockholder or such Stockholder's Shares
are bound, or (iv) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to such Stockholder or any of such
Stockholder's Shares.
(b) The execution and delivery of this Agreement by such Stockholder
do not, and the performance of this Agreement by such Stockholder shall not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, and
except where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
the performance by such Stockholder of his or her obligations under this
Agreement in any material respect.
SECTION 1.03. Title to Shares. (a) Such Stockholder is (i) the record and
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beneficial owner of the number of shares of WHG Stock set forth in Column 1 of
Exhibit A hereto free
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and clear of any proxy or voting restriction other than pursuant to this
Agreement and (ii) the beneficial owner of the additional number of shares of
WHG Stock set forth in Column 2 of Exhibit A hereto free and clear of any proxy
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or voting restriction other than pursuant to this Agreement. The Shares set
forth opposite such Stockholder's name on Exhibit A hereto constitute all of the
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shares of WHG Stock owned of record or beneficially by such Stockholder.
(b) Such Stockholder has sole power of disposition with respect to all
the Shares set forth opposite such Stockholder's name on Exhibit A hereto and
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the sole voting power with respect to the matters set forth in Article II
hereof, in each case with respect to all of the Shares set forth opposite such
Stockholder's name on Exhibit A hereto, with no restrictions on such rights,
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subject to any agreements pursuant to which margin loans have been obtained.
SECTION 1.04. No Encumbrances. Such Stockholder's Shares and the
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certificates representing such Shares are now and at all times during the term
hereof will be held by such Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or arrangements
or any other encumbrances whatsoever except for proxies arising under this
Agreement and any interest granted in connection with the margining of such
Stockholder's Shares.
SECTION 1.05. Acknowledgment of Reliance. Such Stockholder understands
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and acknowledges that the Parties are entering into the Merger Agreement in
reliance upon such Stockholder's execution and delivery of this Agreement.
SECTION 1.06. Brokers. The Parties shall not be obligated or otherwise
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liable for any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of any Stockholder.
ARTICLE II
TRANSFER AND VOTING OF SHARES
SECTION 2.01. Transfer of Shares. During the Proxy Term each Stockholder
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shall not (a) deposit such Stockholder's Shares into a voting trust or enter
into a voting agreement or arrangement with respect to such Shares or grant any
proxy or power of attorney with respect thereto, or (b) take any action that
would have the effect of preventing or disabling such Stockholder from
performing such Stockholder's obligations under this Agreement.
SECTION 2.02. Voting of Shares; Further Assurances. (a) Each Stockholder,
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by this
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Agreement, with respect to those Shares that such Stockholder currently owns of
record, does hereby constitute and appoint PAHOC, or any nominee of PAHOC, with
full power of substitution, during and for the Proxy Term, as such Stockholder's
true and lawful attorney and irrevocable proxy, for and in such Stockholder's
name, place and stead, to vote each of such Shares as such Stockholder's proxy,
at every meeting of the stockholders of WHG or any adjournment thereof or in
connection with any written consent of WHG's stockholders, (i) in favor of the
adoption of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, (ii) against (x) any
Acquisition Proposal, as that term is defined in the Merger Agreement, and any
proposal for any action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of WHG
under the Merger Agreement or which is reasonably likely to result in any of the
conditions of WHG's obligations under the Merger Agreement not being fulfilled
and (y) any change in the directors of WHG, any change in the present
capitalization of WHG or any amendment to WHG's certificate of incorporation or
bylaws, any other material change in WHG's corporate structure or business, or
any other action which in the case of each of the matters referred to in this
clause (y) could reasonably be expected to impede, interfere with, delay,
postpone or materially adversely affect the transactions contemplated by the
Merger Agreement or the likelihood of such transactions being consummated, and
(iii) in favor of any other matter necessary for consummation of the
transactions contemplated by the Merger Agreement which is considered at any
such meeting of stockholders or in such consent, and in connection therewith to
execute any documents which are necessary or appropriate in order to effectuate
the foregoing, including the ability for PAHOC or its nominees to vote such
Shares directly. Each Stockholder intends this proxy to be irrevocable and
coupled with an interest during the Proxy Term and hereby revokes any proxy
previously granted by such Stockholder with respect to such Stockholder's
Shares.
(b) Each Stockholder hereby further agrees, with respect to any Shares
not voted pursuant to paragraph (a) above, including without limitation any
Shares owned beneficially but not of record by such Stockholder, that during the
Proxy Term, at any meeting of stockholders of WHG, however called, or in
connection with any written consent of WHG's stockholders, such Stockholder
shall vote (or cause to be voted) all Shares whether or not owned of record or
beneficially by such Stockholder except as specifically requested in writing by
PAHOC in advance, (i) in favor of the adoption of the Merger Agreement and
approval of the Merger and the other transactions contemplated by the Merger
Agreement, (ii) against (x) any Acquisition Proposal, as that term is defined in
the Merger Agreement, and any proposal for any action or agreement that would
result in a breach of any covenant, representation or warranty or any other
obligation or agreement of WHG under the Merger Agreement or which is reasonably
likely to result in any of the conditions of WHG's obligations under the Merger
Agreement not being fulfilled or (y) any change in the directors of WHG, any
change in the present capitalization of WHG or any amendment to WHG's
certificate of incorporation or bylaws, any other material change in WHG's
corporate structure or business, or any other action which in the case of each
of the matters referred to in this clause (y) could reasonably be expected to,
impede, interfere with, delay, postpone or
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materially adversely affect the transactions contemplated by the Merger
Agreement or the likelihood of such transactions being consummated, and (iii) in
favor of any other matter necessary for consummation of the transactions
contemplated by the Merger Agreement which is considered at any such meeting of
stockholders or in such consent, and in connection therewith to execute any
documents which are necessary or appropriate in order to effectuate the
foregoing.
(c) For the purposes of this Agreement, "Proxy Term" shall mean the
period from the execution of this Agreement until the earlier of (i) the
termination of the Merger Agreement pursuant to Section 11.1; (ii) March 31,
1998, or (iii) the termination of this Agreement in accordance with Section
2.02(e).
(d) During the Proxy Term, each Stockholder shall perform such further
acts and execute such further documents and instruments as may reasonably be
required to carry out the provisions of this Agreement.
(e) Notwithstanding any other provision of this Agreement,
Stockholders may terminate this agreement by joint written notice to Patriot
following (i) the making of a Stockholder Superior Proposal to the Board of
Directors of WHG; or (ii) within ten business days after the date on which the
Average Closing Price of a Paired Share is less than $19.50 per Share. For the
purposes of this Agreement, a "Stockholder Superior Proposal" means any bona
fide Acquisition Proposal made after the date hereof in writing, the terms of
which provide for the stockholders of WHG to receive value superior to the value
to be received under the proposed Merger Agreement, and the "Average Closing
Price" shall mean the average per share closing price of a Paired Share as
reported on the NYSE over the ten (10) trading days immediately preceding the
day of any determination.
SECTION 2.03. Certain Events. Each Stockholder agrees that this Agreement
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and the obligations hereunder shall attach to such Stockholder's Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including without limitation such Stockholder's heirs, guardians, administrators
and successors.
SECTION 2.04. Non-Transferability of Restrictions. Nothing in this
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Agreement shall prohibit the Stockholders from disposing of any of their Shares
free and clear from the restrictions in this Agreement, or from pledging such
Shares in connection with the receipt of margin loans or otherwise.
ARTICLE III
GENERAL PROVISIONS
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SECTION 3.01. Severability. If any term or other provision of this
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Agreement is determined by any appropriate court to be 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 so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 3.02. Entire Agreement. This Agreement constitutes the entire
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agreement of the parties and supersedes all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
SECTION 3.03. Amendments. This Agreement may not be modified, amended,
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altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
SECTION 3.04. Assignment. This Agreement shall not be assigned by
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operation of law or otherwise.
SECTION 3.05. Parties in Interest. This Agreement shall be binding upon
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and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any person
any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
SECTION 3.06. Specific Performance. The parties hereto agree that
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irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions and other equitable remedies to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof in
any Delaware Court (as defined below), this being in addition to any other
remedy to which they are entitled at law or in equity. Any requirements for the
securing or posting of any bond with respect to such remedy are hereby waived by
each of the parties hereto.
SECTION 3.07. Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws. Each of the parties hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Delaware and of the United States of America located in the
State of Delaware (the "Delaware Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not
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to commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in any inconvenient forum.
SECTION 3.08. Counterparts. This Agreement may be executed in one or more
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counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 3.09. Definitions. Terms used in this Agreement and not otherwise
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defined herein shall have the meanings set forth in the Merger Agreement.
SECTION 3.10. Patriot and PAHOC agree to either, at their option, (i) take
such actions reasonably necessary to register the shares of Patriot and PAHOC
stock received by the Stockholders in the merger for resale pursuant to the Form
S-4 or (ii) promptly after the Effective Time, register such shares pursuant to
a registration statement on Form S-3. Patriot and PAHOC shall maintain the
effectiveness of any such registration statement (subject to the right of
Patriot and PAHOC to convert to a Form S-3 registration from the Form S-4 at any
time and subject to customary blackout provisions) until the earlier of (i) the
first anniversary of the Effective Time or (ii) the date that neither of the
Stockholders owns any such shares.
[Remainder of Page Intentionally Left Blank}
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY
By: /s/ Xxxxxx Xx
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Name: Xxxxxx Xx
Title: Senior Vice President
PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY ACQUISITION SUBSIDIARY
By: /s/ Xxxxxxx X. Xxxxx, III
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Name: Xxxxxxx X. Xxxxx, III
Title: President
PATRIOT AMERICAN HOSPITALITY, INC.
By: /s/ Xxxxxxx X. Xxxxx, III
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Name: Xxxxxxx X. Xxxxx, III
Title: President
NATIONAL AMUSEMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President and Chief Executive
Officer
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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EXHIBIT A
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Number of Shares of
WHG Stock Number of Shares of
Owned of Record and WHG Stock
Name and Address Beneficially by Owned Beneficially But
of Stockholder Stockholder Not of Record by Stockholder
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National Amusements, Inc. 0 Common 870,975 Common
Xxxxxx X. Xxxxxxxx 0 Common 858,450 Common
