SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of June 12, 2000
is made between STATION CASINOS, INC., a Nevada corporation ("Purchaser"), and
XXXX X. XXXXXX, an individual, XXXXX X. XXXXXX, an individual, and XXXXXXXXXXX
X. XXXXXX, an individual (each a "Principal Shareholder", and collectively the
"Principal Shareholders"). Capitalized terms not specifically defined herein
shall have the meanings given such terms in the Purchase Agreement (as
hereinafter defined).
WHEREAS, Santa Fe Hotel Inc., a Nevada corporation (the "Subsidiary"),
Santa Fe Gaming Corporation, a Nevada corporation (the "Company"), and Purchaser
are entering into that certain Asset Purchase Agreement dated as of the date
hereof (the "Purchase Agreement"), pursuant to which all or substantially all of
the assets of the Subsidiary shall be sold to Purchaser;
WHEREAS, each Principal Shareholder is the record and beneficial owner
of the number of shares of common stock or preferred stock of the Company
(collectively, the "Company Shares") set forth on Schedule A hereto;
----------
WHEREAS, as a condition to entering into the Purchase Agreement and
incurring the obligations set forth therein, the Company and Purchaser have
required that the Principal Shareholders agree to enter into this Agreement; and
WHEREAS, each Principal Shareholder believes that it is in the best
interests of the Company and its shareholders to induce Purchaser to enter into
the Purchase Agreement and, therefore, the Principal Shareholders are willing to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
----------------
1.1. Voting Agreement. Each Principal Shareholder hereby agrees that
----------------
during the time this Agreement is in effect, at any meeting of the shareholders
of the Company (the "Company Shareholders"), however called, and in any action
by consent of the shareholders of the Company, he shall vote all of his Company
Shares: (A) in favor of the transactions contemplated in the Purchase Agreement,
this Agreement (as it may be amended from time to time) and the transactions
contemplated by this Agreement, and (B) against any other proposal for any
recapitalization, merger or other transaction requiring a vote of the Company
Shareholders.
1.2. Irrevocable Proxy. In the event any Principal Shareholder shall
-----------------
fail to comply with the provisions of Section 1.1 hereof as determined by
-----------
Purchaser in its sole and absolute discretion, such Principal Shareholder agrees
that such failure shall result, without any further action by such Principal
Shareholder, in the irrevocable appointment of Purchaser, until
termination of this Agreement, as such Principal Shareholder's attorney and
proxy pursuant to the provisions of Nevada Revised Statutes Section 78.355, with
full power of substitution, to vote, and otherwise act (by written consent or
otherwise) with respect to the Company Shares which such Principal Shareholder
is entitled to vote at any meeting of Company Shareholders (whether annual or
special and whether or not an adjourned or postponed meeting) or consent in lieu
of any such meeting or otherwise, on the matters and in the manner specified in
Section 1.1 hereof. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED
-----------
WITH AN INTEREST. Each Principal Shareholder hereby revokes all other proxies
and powers of attorney with respect to the Company Shares which such Principal
Shareholder may have heretofore appointed or granted, and no subsequent proxy or
power of attorney shall be given or written consent executed (and if given or
executed, shall not be effective) by such Principal Shareholder with respect to
the matters covered by this proxy. All authority herein conferred or agreed to
be conferred shall survive the death or incapacity of any Principal Shareholder
and any obligation of such Principal Shareholder under this Agreement shall be
binding upon his heirs, personal representatives and successors.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
---------------------------------
PRINCIPAL SHAREHOLDERS
----------------------
Each Principal Shareholder hereby severally and not jointly represents
and warrants to Purchaser as follows:
2.1. Capacity and Authority. Each Principal Shareholder has full
----------------------
legal capacity and requisite right, power and authority to execute, deliver and
perform his obligations under this Agreement. This Agreement has been duly
executed and delivered by each Principal Shareholder, and such execution and
delivery has been duly approved and authorized by all requisite action on the
part of such Principal Shareholder and such approval and authorization has not
been rescinded. This Agreement constitutes the legal, valid and binding
obligation of each Principal Shareholder, enforceable against it in accordance
with its terms. The failure of the spouse, if any, of any Principal Shareholder
to be a party or signatory to this Agreement shall not (i) prevent such
Principal Shareholder from performing such Principal Shareholder's obligations
and consummating the transactions contemplated hereunder or (ii) prevent this
Agreement from constituting the legal, valid and binding obligation of such
Principal Shareholder in accordance with its terms.
2.2. No Conflicts. Except as set forth on Schedule 2.2, neither the
------------ ------------
execution, delivery and performance of this Agreement by each Principal
Shareholder, nor the consummation by each Principal Shareholder of the
transactions contemplated hereby, will (a) conflict with, or result in a breach
of, any of the terms, conditions or provisions of the Articles of Incorporation
or Bylaws of the Company, (b) conflict with, result in a breach or violation of
any Laws or give rise to a default under or result in the acceleration of
performance under any contract to which such Principal Shareholder or any of his
assets, properties or businesses may be subject, which conflict, breach,
default, violation or acceleration would materially prevent or delay
consummation of the transactions contemplated by this Agreement, or (c) give
rise to an
2
imposition of any Lien of any nature whatsoever upon any of the Principal
Shareholders' Company Shares.
2.3. Ownership of Shares. Each Principal Shareholder has good and
-------------------
marketable title to such Principal Shareholder's Company Shares free and clear
of any Liens and is not a party to any agreement, trust or other arrangement
that in any way restricts such Principal Shareholder's ability to perform his
obligations under this Agreement, including, without limitation, voting or
transferring such Company Shares.
2.4. Government Approvals and Filings. No approval, authorization,
--------------------------------
consent, license, clearance or order of, declaration, or notification to, or
filing, registration or compliance with any governmental or regulatory authority
is required to permit each Principal Shareholder to enter into this Agreement or
to consummate the transactions contemplated herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
OF PURCHASER
------------
Purchaser hereby represents and warrants to the Principal Shareholders
as follows:
3.1. Purchaser's Organization and Good Standing. Purchaser is a
------------------------------------------
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada, and it has all corporate power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted. Purchaser is duly qualified to do business and is in good standing in
each jurisdiction where the character of property owned or leased by it or the
nature of its activities makes such qualification necessary, except for those
jurisdictions where the failure to be so qualified would not materially prevent
or delay consummation of the transactions contemplated by this Agreement.
3.2. Power and Authority; Execution and Delivery. Purchaser has all
-------------------------------------------
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly approved and authorized by all requisite corporate action of
Purchaser, and such approval has not been modified or rescinded. This Agreement
has been duly executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms.
3.3. Governmental Approvals and Filings. No approval, authorization,
----------------------------------
consent, license, clearance or order of, declaration or notification to, or
filing, registration or compliance with, any governmental or regulatory
authority, is required in order to permit Purchaser to enter into this Agreement
or to consummate the transactions contemplated herein.
3.4. No Conflict. Neither the execution, delivery and performance of
-----------
this Agreement by Purchaser, nor the consummation by Purchaser of the
transactions contemplated hereby, will (i) conflict with, or result in a breach
of any of the terms, conditions or provisions of
3
the Articles of Incorporation or By-laws of Purchaser, (ii) conflict with,
result in a breach or violation of, give rise to a default under or result in
the acceleration of performance under any mortgage, lease, agreement, note,
bond, indenture, guarantees or any Laws to which Purchaser may be subject, which
conflict, breach, default, violation or acceleration would not materially
prevent or delay consummation of the transactions contemplated by this
Agreement, or (iii) give rise to an imposition of any Lien, charge, security
interest or encumbrance of any nature whatsoever upon any of the assets of
Purchaser.
ARTICLE IV
COVENANTS OF THE PRINCIPAL SHAREHOLDERS
---------------------------------------
4.1. No-Sale Agreements. Each Principal Shareholder agrees that he
------------------
shall not between the date hereof and the Transfer Time, make any sale, transfer
or other disposition of, or permit the incurrence of any Lien on, his Company
Shares.
4.2. No Solicitation or Negotiation. Each Principal Shareholder
------------------------------
agrees that between the date of this Agreement and the earlier of (i) the
Transfer Time under the Purchase Agreement, and (ii) the termination of this
Agreement, the Principal Shareholders nor any of their Affiliates,
representatives or agents will (a) solicit, initiate, consider, encourage or
accept any other proposals or offers from any person or entity (A) relating to
any acquisition or purchase of all or any portion of the capital stock or a
material portion of the assets of the Subsidiary, (B) to enter into any business
combination with the Company, or (C) to enter into any other extraordinary
business transaction involving or otherwise relating to the Company or the
Subsidiary, or (b) knowingly participate in any discussions, conversations,
negotiations or other communications regarding, or furnish to any other person
or entity any information with respect to, or otherwise cooperate in any way,
assist or participate in, facilitate or encourage, any effort or attempt by any
other person or entity to seek to do any of the foregoing. Each Principal
Shareholder agrees to immediately cease and cause to be terminated all existing
discussions, conversations, negotiations and other communications with any
persons or entities conducted heretofore with respect to any of the foregoing.
Each Principal Shareholder agrees to notify Purchaser promptly if any such
proposal or offer, or any inquiry or other contact with any person or entity
with respect thereto, is made and shall, in any such notice to Purchaser,
indicate in reasonable detail the identity of the person or entity making such
proposal, offer, inquiry or contact and the terms and conditions of such
proposal, offer, inquiry or other contact. Each Principal Shareholder agrees not
to, without the prior written consent of Purchaser, release any person or entity
from, or waive any provision of, any confidentiality or standstill agreement
relating to the Company to which such Principal Shareholder is a party. Pursuant
to the terms of any existing confidentiality agreement to which any Principal
Shareholder is a party, such Principal Shareholder agrees to cause the return or
destruction of any confidential or proprietary information relating to the
Company in the possession of any third party.
4.3. Confidentiality. Each Principal Shareholder agrees to, and shall
---------------
cause his Affiliates to, abide by the provisions of Section 14.06 of the
Purchase Agreement as those provisions pertain to Affiliates of the Company.
4
ARTICLE V
TERMINATION
-----------
5.1. Termination. The Principal Shareholders' obligations hereunder
-----------
shall terminate in the event of a termination pursuant to Article XII of the
Purchase Agreement, except that (i) the provisions of Section 4.3 of this
-----------
Agreement (with respect to confidential information of Purchaser and its
business) shall continue to apply to the same extent that the provisions of
Section 14.06 of the Purchase Agreement remain applicable, and (ii) nothing
contained herein shall relieve any party hereto from liability for breach of its
representations, warranties, covenants or agreements contained in this Agreement
or the Purchase Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
------------------------
6.1. Notices, Etc. All notices, requests, demands, and other
------------
communications hereunder shall be in writing and shall be deemed to have been
duly given, when delivered in person, or when mailed by certified or registered
mail, postage prepaid, or when given by confirmed facsimile transmission, as
follows:
(a) If to Purchaser:
Station Casinos, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to the Company:
Santa Fe Gaming Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
5
(c) If to any Principal Shareholder:
c/o Santa Fe Gaming Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx
Attention: [Principal Shareholder]
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Xxxxxx & Silver, Ltd.
0000 Xxxxxx Xxxxxx Xxxxxxx, /0xx/ Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other person as the person entitled to notice shall designate in
writing, such writing to be delivered to the other parties hereto in the manner
provided in this Section 6.1.
-----------
6.2. Entire Agreement; Amendment. This Agreement (including the
---------------------------
various Schedules and Exhibits hereto) sets forth the entire agreement and
understanding of the parties in respect of the transactions contemplated hereby
and supersedes all prior agreements, arrangements and understandings relating to
the subject matter hereof. This Agreement may be amended or modified only by a
written instrument executed by Purchaser and the Principal Shareholders.
6.3. Individual Provisions. If any provision of this Agreement is
---------------------
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (i) such provision will be
fully severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid and unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the legal, invalid or unenforceable
provision, and (iv) there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
6.4. Governing Law; Consent to Jurisdiction; Venue; Waiver of Jury
-------------------------------------------------------------
Trial. (a) This Agreement shall be governed by the law of the State of Nevada
-----
applicable to contracts executed and performed entirely with the State of
Nevada.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Nevada state court or federal court of the United States of America sitting in
Las Vegas, Nevada, and any appellate court from any appeal thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be
6
heard and determined in any such Nevada state court or, to the extent permitted
by law, in such federal court. Such party agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement in the courts
of any jurisdiction.
(c) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any Nevada
state or federal court. Such party hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each of the parties hereto hereby waives all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to this Agreement or the actions of the
parties in the negotiation, administration, performance or enforcement thereof.
6.5. 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.
6.6. General. This Agreement: (i) shall inure to the benefit of and
-------
be binding on the parties hereto and their heirs, personal representatives,
successors and permitted assigns, nothing in this Agreement, expressed or
implied, being intended to confer upon any other person any rights or remedies
hereunder; (ii) may not be assigned by a party without the prior written consent
of the other parties (provided, however, that it may be assigned by Purchaser to
-------- -------
an affiliate of Purchaser without the consent of the other parties hereto); and
(iii) may be executed in two or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument. The Section, Schedule and other headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(The remainder of this page is intentionally left blank)
7
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement the day and year first above written.
STATION CASINOS, INC.,
a Nevada corporation
By: /s/
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: EVP/CFO/CAO
PRINCIPAL SHAREHOLDERS:
/s/
------------------------------------
Xxxx X. Xxxxxx, an individual
/s/
------------------------------------
Xxxxx X. Xxxxxx, an individual
/s/
------------------------------------
Xxxxxxxxxxx X. Xxxxxx, an individual
8
SCHEDULE A
--------------------------------------------------------------------------------
Shareholder Name Number of Shares Owned
--------------------------------------------------------------------------------
Xxxx X. Xxxxxx _________
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxx _________
--------------------------------------------------------------------------------
Xxxxxxxxxxx X. Xxxxxx _________
--------------------------------------------------------------------------------
9
