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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
DATED AS OF
________________, 2001
AMONG
BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC.,
[GAMECO]
AND
[MERGER SUBSIDIARY]
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TABLE OF CONTENTS
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ARTICLE I THE MERGER; CLOSING................................................................1
Section 1.01. The Merger.............................................................1
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Section 1.02. Effective Time.........................................................1
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Section 1.03. Effects of the Merger..................................................1
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Section 1.04. Conversion of Shares...................................................1
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Section 1.05. Payment of Shares......................................................2
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Section 1.06. Stock Options..........................................................3
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Section 1.07. The Closing............................................................4
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Section 1.08. Dissenters' Rights.....................................................4
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ARTICLE II THE SURVIVING CORPORATION; DIRECTORS AND OFFICERS.................................4
Section 2.01. Articles of Incorporation..............................................4
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Section 2.02. Bylaws.................................................................4
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Section 2.03. Directors and Officers.................................................4
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY...................5
Section 3.01. Organization and Qualification.........................................5
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Section 3.02. Authority; Non-Contravention; Approvals................................5
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Section 3.03. Proxy Statement........................................................6
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Section 3.04. Financing..............................................................7
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Section 3.05. Brokers and Finders....................................................7
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................................7
Section 4.01. Organization and Qualification.........................................7
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Section 4.02. Capitalization.........................................................7
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Section 4.03. Subsidiaries...........................................................8
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Section 4.04. Authority; Non-Contravention; Approvals................................8
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Section 4.05. Reports and Financial Statements......................................10
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Section 4.06. Absence of Undisclosed Liabilities....................................10
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Section 4.07. Absence of Certain Changes or Events..................................10
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Section 4.08. Litigation............................................................10
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Section 4.09. Proxy Statement.......................................................10
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Section 4.10. No Violation of Law...................................................11
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Section 4.11. Compliance with Agreements............................................11
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Section 4.12. Taxes.................................................................11
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Section 4.13. Employee Benefit Plans; ERISA.........................................12
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Section 4.14. Labor Controversies...................................................13
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Section 4.15. Environmental Matters.................................................13
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Section 4.16. Title to Assets.......................................................15
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Section 4.17. Company Stockholders' Approval........................................15
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Section 4.18. Brokers and Finders...................................................15
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ARTICLE V COVENANTS.........................................................................15
Section 5.01. Conduct of Business by the Company Pending the Merger.................15
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Section 5.02. Control of the Company's Operations...................................17
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Section 5.03. Acquisition Transactions..............................................17
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Section 5.04. Access to Information.................................................18
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Section 5.05. Notices of Certain Events.............................................18
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Section 5.06. Meeting of the Company's Stockholders.................................19
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Section 5.07. Proxy Statement.......................................................19
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Section 5.08. Public Announcements..................................................20
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Section 5.09. Expenses and Fees.....................................................20
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Section 5.10. Agreement to Cooperate................................................21
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Section 5.11. Directors' and Officers' Indemnification..............................22
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ARTICLE VI CONDITIONS TO THE MERGER.........................................................23
Section 6.01. Conditions to the Obligations of Each Party...........................23
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Section 6.02. Conditions to Obligation of the Company to Effect the Merger..........24
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Section 6.03. Conditions to Obligations of Parent and Subsidiary to Effect
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the Merger............................................................24
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ARTICLE VII TERMINATION.....................................................................25
Section 7.01. Termination...........................................................25
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ARTICLE VIII MISCELLANEOUS..................................................................26
Section 8.01. Effect of Termination.................................................26
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Section 8.02. Nonsurvival of Representations and Warranties.........................26
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Section 8.03. Notices...............................................................26
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Section 8.04. Interpretation........................................................27
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Section 8.05. Miscellaneous.........................................................27
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Section 8.06. Counterparts..........................................................27
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Section 8.07. Amendments; No Waivers................................................27
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Section 8.08. Entire Agreement......................................................28
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Section 8.09. Severability..........................................................28
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Section 8.10. Specific Performance..................................................28
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as
of __________________, 2001 by and among [GAMECO], a [_________________]
corporation ("Parent"), __________________, a Colorado corporation and wholly
owned subsidiary of Parent ("Merger Subsidiary"), and Black Hawk Gaming &
Development Company, Inc., a Colorado corporation (the "Company"). Parent,
Merger Subsidiary and the Company are referred to collectively herein as the
"Parties."
WHEREAS, the respective Boards of Directors of Parent, Merger Subsidiary
and the Company have each approved the merger of Merger Subsidiary with and into
the Company on the terms and subject to the conditions set forth in this
Agreement (the "Merger");
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING
Section 1.01. The Merger. Upon the terms and subject to the conditions
of this Agreement, and in accordance with the Colorado Business Corporations
Act, articles 101 to 117 of title 7 of the Colorado Revised Statutes (the
"CBCA"), Merger Subsidiary shall be merged with and into the Company at the
Effective Time (as defined in Section 1.02). Following the Merger, the separate
existence of Merger Subsidiary shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and a wholly-owned
subsidiary of Parent, and shall succeed to and assume all the rights and
obligations of Merger Subsidiary in accordance with the CBCA.
Section 1.02. Effective Time. The Merger shall become effective when
articles of Merger (the "Articles of Merger"), executed in accordance with the
relevant provisions of the CBCA, are filed with the Secretary of State of the
State of Colorado; provided, however, that, upon mutual consent of the
constituent corporations to the Merger, the Articles of Merger may provide for a
later date of effectiveness of the Merger not more than 30 days after the date
the Articles of Merger are filed. When used in this Agreement, the term
"Effective Time" shall mean the date and time at which the Articles of Merger
are accepted for record or such later time established by the Articles of
Merger. The filing of the Articles of Merger shall be made on the date of the
Closing (as defined in Section 1.07).
Section 1.03. Effects of the Merger. The Merger shall have the effects
set forth in Section 0-000-000 of the Colorado Revised Statutes.
Section 1.04. Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Subsidiary, the
Company or the holders of any of the following securities:
(a) each issued and outstanding share of the Company's common
stock, par value $.001 per share "Company Common Stock") held by the Company as
treasury stock and each issued and outstanding share of Company Common Stock
owned by any subsidiary of the
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Company, Parent, Merger Subsidiary or any other subsidiary of Parent shall be
canceled and retired and shall cease to exist, and no payment or consideration
shall be made with respect thereto;
(b) each issued and outstanding share of Company Common Stock,
other than shares of Company Common Stock referred to in paragraph (a) above,
shall be converted into the right to receive an amount in cash, without
interest, equal to $11.00 (the "Merger Consideration"). At the Effective Time,
all such shares of Company Common Stock 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 of Company Common Stock shall
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration, without interest; and
(c) each issued and outstanding share of capital stock or
ownership interest of Merger Subsidiary shall be converted into one fully paid
and nonassessable share of common stock, par value $__________, of the Surviving
Corporation.
Section 1.05. Payment of Shares. (a) Prior to the Effective Time, Parent
shall appoint a bank or trust company reasonably satisfactory to the Company to
act as disbursing agent (the "Disbursing Agent") for the payment of Merger
Consideration upon surrender of certificates representing the shares of Company
Common Stock. Parent will enter into a disbursing agent agreement with the
Disbursing Agent, in form and substance reasonably acceptable to the Company. At
or prior to the Effective Time, Parent shall deposit or cause to be deposited
with the Disbursing Agent in trust for the benefit of the Company's stockholders
cash in an aggregate amount necessary to make the payments pursuant to Section
1.04 to holders of shares of Company Common Stock (such amounts being
hereinafter referred to as the "Exchange Fund"). The Disbursing Agent shall
invest the Exchange Fund, as the Surviving Corporation directs, in direct
obligations of the United States of America, obligations for which the full
faith and credit of the United States of America is pledged to provide for the
payment of all principal and interest or commercial paper obligations receiving
the highest rating from either Xxxxx'x Investors Service, Inc. or Standard &
Poor's, a division of The McGraw Hill Companies, or a combination thereof,
provided that, in any such case, no such instrument shall have a maturity
exceeding three months. Any net profit resulting from, or interest or income
produced by, such investments shall be payable to the Surviving Corporation. The
Exchange Fund shall be used only as provided in this Agreement.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause the Disbursing Agent to mail to each person who was a record holder
as of the Effective Time of an outstanding certificate or certificates which
immediately prior to the Effective Time represented shares of Company Common
Stock (the "Certificates"), and whose shares were converted into the right to
receive Merger Consideration pursuant to Section 1.04, a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Disbursing Agent) and instructions for use in effecting the
surrender of the Certificates in exchange for payment of the Merger
Consideration. Upon surrender to the Disbursing Agent of a Certificate, together
with such letter of transmittal duly executed and such other documents as may be
reasonably required by the Disbursing Agent, the holder of such Certificate
shall be paid promptly in exchange therefor cash in an amount equal to the
product of the number of shares of Company Common Stock represented by such
Certificate multiplied by the Merger Consideration, and such Certificate shall
forthwith be canceled. No interest will be paid or accrue on the cash payable
upon the
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surrender of the Certificates. If payment is to be made to a person other than
the person in whose name the Certificate surrendered is registered, it shall be
a condition of payment that the Certificate so surrendered be properly endorsed
or otherwise be in proper form for transfer and that the person requesting such
payment pay any transfer or other taxes required by reason of the payment to a
person other than the registered holder of the Certificate surrendered or
establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered in accordance with this
Section 1.05, each Certificate (other than Certificates representing shares of
Company Common Stock owned by any subsidiary of the Company, Parent, Merger
Subsidiary or any other subsidiary of Parent and shares of Company Common Stock
held in the treasury of the Company, which have been canceled) shall represent
for all purposes only the right to receive the Merger Consideration in cash
multiplied by the number of shares of Company Common Stock evidenced by such
Certificate, without any interest thereon.
(c) From and after the Effective Time, there shall be no
registration of transfers of shares of Company Common Stock which were
outstanding immediately prior to the Effective Time on the stock transfer books
of the Surviving Corporation. From and after the Effective Time, the holders of
shares of Company Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such shares of Company
Common Stock except as otherwise provided in this Agreement or by applicable
law. All cash paid upon the surrender of Certificates in accordance with this
Article I shall be deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Company Common Stock previously represented by such
Certificates. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, such Certificates shall be canceled and
exchanged for cash as provided in this Article I. At the close of business on
the day of the Effective Time the stock ledger of the Company shall be closed.
(d) At any time more than six months after the Effective Time,
the Surviving Corporation shall be entitled to require the Disbursing Agent to
deliver to it any funds which had been made available to the Disbursing Agent
and not disbursed in exchange for Certificates (including, without limitation,
all interest and other income received by the Disbursing Agent in respect of all
such funds). Thereafter, holders of shares of Company Common Stock shall look
only to Parent (subject to the terms of this Agreement, abandoned property,
escheat and other similar laws) as general creditors thereof with respect to any
Merger Consideration that may be payable, without interest, upon due surrender
of the Certificates held by them. If any Certificates shall not have been
surrendered prior to five years after the Effective Time (or immediately prior
to such time on which any payment in respect hereof would otherwise escheat or
become the property of any governmental unit or agency), the payment in respect
of such Certificates 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. Notwithstanding the
foregoing, none of Parent, the Company, the Surviving Corporation nor the
Disbursing Agent shall be liable to any holder of a share of Company Common
Stock for any Merger Consideration in respect of such share of Company Common
Stock delivered to a public official pursuant to any abandoned property, escheat
or other similar law.
Section 1.06. Stock Options. At the Effective Time, each unexercised
option, whether or not then vested or exercisable in accordance with its terms,
to purchase shares of Company Common Stock (the "Options") previously granted by
the Company or any of its subsidiaries shall be canceled automatically and the
Parent shall or shall cause the Surviving Corporation to provide the holder
thereof with a lump sum cash payment equal to the product of (i) the total
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number of shares of Company Common Stock subject to such Option immediately
prior to the Effective Time and (ii) the excess (if any) of the Merger
Consideration over the exercise price per share of Company Common Stock subject
to such Option.
Section 1.07. The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the executive offices of
[_____________ in ________________], commencing at 9:00 a.m. local time on the
second business day following the satisfaction or waiver of all conditions to
the obligations of the Parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the Parties will take at
the Closing) or such other place and date as the Parties may mutually determine
(the "Closing Date").
Section 1.08. Dissenters' Rights. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger and who has dissented from the Merger in accordance with
article 113 of title 7 of the Colorado Revised Statutes ("Dissenting Shares")
shall not be converted into the right to receive the Merger Consideration as
provided in Section 1.05, unless and until such holder fails to perfect or
withdraws or otherwise loses his right to payment under the CBCA. If, after the
Effective Time, any such holder fails to perfect or withdraws or loses his right
to such payment, such Dissenting Shares shall thereupon be treated as if they
had been converted as of the Effective Time into the right to receive the Merger
Consideration, if any, to which such holder is entitled, without interest
thereon. Company shall give Parent and Merger Subsidiary prompt notice of any
notice of dissent received by Company and, prior to the Effective Time, Parent
and Merger Subsidiary shall have the right to participate in all negotiations
and proceedings with respect to such dissents. Prior to the Effective Time,
Company shall not, except with the prior written consent of Parent and Merger
Subsidiary, make any payment with respect to, or settle or offer to settle, any
such dissents.
ARTICLE II
THE SURVIVING CORPORATION; DIRECTORS AND OFFICERS
Section 2.01. Articles of Incorporation. The Articles of Incorporation
of the Company in effect at the Effective Time shall be the articles of
incorporation of the Surviving Corporation until amended in accordance with
applicable law and this Agreement.
Section 2.02. Bylaws. The bylaws of Merger Subsidiary in effect at the
Effective Time shall be the bylaws of the Surviving Corporation, until amended
in accordance with applicable law and this Agreement.
Section 2.03. Directors and Officers. The directors of Merger Subsidiary
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation as of the Effective Time. The officers of the Company shall be the
officers of the Surviving Corporation as of the Effective Time, subject to the
right of the Board of Directors of the Surviving Corporation to appoint or
replace officers.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY
Parent and Merger Subsidiary jointly and severally represent and warrant
to the Company that, except as set forth in the Disclosure Schedule dated as of
the date hereof and signed by an authorized officer of Parent (the "Parent
Disclosure Schedule"), it being agreed that disclosure of any item on the Parent
Disclosure Schedule shall be deemed disclosure with respect to all Sections of
this Agreement if the relevance of such item is reasonably apparent from the
face of the Parent Disclosure Schedule:
Section 3.01. Organization and Qualification. Parent is a corporation
and Merger Subsidiary is a corporation, in each case duly organized, validly
existing and in good standing under the laws of the state of its incorporation
and has the requisite corporate power and authority to own, lease and operate
its assets and properties and to carry on its business as it is now being
conducted. Each of Parent and Merger Subsidiary is qualified to transact
business and is in good standing in each jurisdiction in which the properties
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so qualified
and in good standing would not reasonably be expected to have Parent Material
Adverse Effect. In this Agreement, the term "Parent Material Adverse Effect"
means an effect that is materially adverse to (i) the business, financial
condition or ongoing operations of Parent and its subsidiaries, taken as a whole
or (ii) the ability of Parent or any of its subsidiaries to obtain financing for
or to consummate any of the transactions contemplated by this Agreement.
Section 3.02. Authority; Non-Contravention; Approvals. (a) Each of
Parent and Merger Subsidiary has full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby,
including without limitation, the consummation of the financing of the Merger
pursuant to the Financing Arrangement (as defined in Section 3.04) (the
"Financing"). This Agreement and the Merger have been approved and adopted by
the Boards of Directors of Parent and Merger Subsidiary and the sole stockholder
of Merger Subsidiary, and no other corporate or similar proceeding on the part
of Parent or Merger Subsidiary is necessary to authorize the execution and
delivery of this Agreement or the consummation by Parent and Merger Subsidiary
of the transactions contemplated hereby, including without limitation, the
Financing. This Agreement has been duly executed and delivered by each of Parent
and Merger Subsidiary and, assuming the due authorization, execution and
delivery hereof by the Company, constitutes a valid and legally binding
agreement of each of Parent and Merger Subsidiary enforceable against each of
them in accordance with its terms, except that such enforcement may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and (ii)
general equitable principles.
(b) The execution, delivery and performance of this Agreement by
each of Parent and Merger Subsidiary and the consummation of the Merger and the
transactions contemplated hereby, including without limitation the Financing, do
not and will not violate, conflict with or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien, security interest or
encumbrance upon any of the properties
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or assets of Parent or any of its subsidiaries under any of the terms,
conditions or provisions of (i) the respective certificates of incorporation or
bylaws of Parent or any of its subsidiaries, (ii) any statute, law, ordinance,
rule, regulation, judgment, decree, order, injunction, writ, permit or license
of any court or governmental authority applicable to Parent or any of its
subsidiaries or any of their respective properties or assets, subject, in the
case of consummation, to obtaining (prior to the Effective Time) the Parent
Required Statutory Approvals (as defined in Section 3.02(c)), or (iii) any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of any
kind (each a "Contract" and collectively "Contracts") to which Parent or any of
its subsidiaries is now a party or by which Parent or any of its subsidiaries or
any of their respective properties or assets may be bound or affected, except,
with respect to any item referred to in clause (ii) or (iii), for any such
violation, conflict, breach, default, termination, acceleration or creation of
liens, security interests or encumbrances that would not reasonably be expected
to have a Parent Material Adverse Effect and would not materially delay the
consummation of the Merger.
(c) Except for (i) the filings by Parent required by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) applicable filings, if any, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (iii) filing of Articles of Merger with the
Secretary of State of the State of Colorado in connection with the Merger, and
(iv) filings with and approvals by any regulatory authority with jurisdiction
over the Company's gaming operations required under any Federal, state, local or
foreign statute, ordinance, rule, regulation, permit, consent, approval,
license, judgment, order, decree, injunction or other authorization governing or
relating to the current or contemplated casino and gaming activities and
operations of the Company, including the Nevada Gaming Control Act and the rules
and regulations promulgated thereunder, and the Colorado Limited Gaming Act and
the rules and regulations promulgated thereunder and all other rules and
regulations, statutes and ordinances having authority or with which compliance
is required for the conduct of gambling, gaming and casino activities
(collectively, the "Gaming Laws") (the filings and approvals referred to in
clauses (i) through (iv) being collectively referred to as the "Parent Required
Statutory Approvals"), no declaration, filing or registration with, or notice
to, or authorization, consent or approval of, any governmental or regulatory
body or authority is necessary for the execution and delivery of this Agreement
by Parent or Merger Subsidiary, or the consummation by Parent or Merger
Subsidiary of the transactions contemplated hereby, including without
limitation, the Financing, other than such declarations, filings, registrations,
notices, authorizations, consents or approvals which, if not made or obtained,
as the case may be, would not reasonably be expected to have a Parent Material
Adverse Effect and would not materially delay the consummation of the Merger.
Section 3.03. Proxy Statement. None of the information to be supplied by
Parent or its subsidiaries for inclusion in any proxy statement to be
distributed in connection with the Company's meeting of stockholders to vote
upon this Agreement and the transactions contemplated hereby (the "Proxy
Statement") will, at the time of the mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the meeting of
stockholders of the Company to be held in connection with the transactions
contemplated by this Agreement, 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 the light of the circumstances under
which they are made, not misleading.
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Section 3.04. Financing. Parent intends to raise $________________ in a
debt financing pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Act"); and Rule 144(A) promulgated under the Act by the Securities
and Exchange Commission in order to provide financing for the Merger (the
"Financing Arrangement") and has engaged U.S. Bancorp Libra to provide financial
advisory and related services in connection therewith.
Section 3.05. Brokers and Finders. Except as disclosed in the Parent
Disclosure Schedule, Parent has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of the
Company to pay any investment banking fees, finder's fees or brokerage fees in
connection with the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Subsidiary
that, except as set forth in the disclosure schedule dated as of the date hereof
and signed by an authorized officer of the Company (the "Company Disclosure
Schedule"), it being agreed that disclosure of any item on the Company
Disclosure Schedule shall be deemed disclosure with respect to all Sections of
this Agreement if the relevance of such item is reasonably apparent from the
face of the Company Disclosure Schedule:
Section 4.01. Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado and has the requisite corporate power and authority to
own, lease and operate its assets and properties and to carry on its business as
it is now being conducted. The Company is qualified to transact business and is
in good standing in each jurisdiction in which the properties owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not reasonably be expected to have a Company Material Adverse
Effect. In this Agreement, the term "Company Material Adverse Effect" means an
effect or effects that, individually or in the aggregate, (i) have an adverse
economic effect of more than $________________ to the business, financial
condition or ongoing operations of the Company and its subsidiaries, taken as a
whole or (ii) have a materially adverse effect on the ability of the Company to
consummate the Merger or the ability of the Parties hereto to retain any
Material Gaming License. A "Material Gaming License" is a license or similar
authorization under any Gaming Law without which Parent or the Company, as the
case may be, would be prohibited from operating any of its gaming properties in
the state in which such property is located. True, accurate and complete copies
of the Company's Articles of Incorporation and bylaws, in each case as in effect
on the date hereof, including all amendments thereto, have heretofore been
delivered to Parent.
Section 4.02. Capitalization. (a) The authorized capital stock of the
Company consists of (1) 40,000,000 shares of Company Common Stock and (2)
10,000,000 shares of preferred stock, par value $.001 per share ("Company
Preferred Stock"). As of _____________________, (i) ______________ shares of
Company Common Stock were issued and outstanding, all of which shares of Company
Common Stock were validly issued and are fully paid, nonassessable and free of
preemptive rights, and no shares of Company Preferred Stock were issued and
outstanding, (ii) _________________ shares of Company Common Stock and no shares
of Company Preferred Stock were held in the treasury of the Company, (iii)
______________
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shares of Company Common Stock were reserved for issuance upon exercise of
Options issued and outstanding. Assuming the exercise of all outstanding
options, as of _______________, there would be ______________ shares of Company
Common Stock issued and outstanding. Since _____________, except as permitted by
this Agreement, (i) no shares of capital stock of the Company have been issued
except in connection with the exercise of the instruments referred to in the
second sentence of this Section 4.02(a) and (ii) no options, warrants,
securities convertible into, or commitments with respect to the issuance of,
shares of capital stock of the Company have been issued, granted or made.
(b) Except as set forth in Section 4.02(a), as of the date
hereof, there are no outstanding subscriptions, options, calls, contracts,
commitments, understandings, restrictions, arrangements, rights or warrants,
including any right of conversion or exchange under any outstanding security,
instrument or other agreement and including any rights plan or other
anti-takeover agreement, obligating the Company or any subsidiary of the Company
to issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of the capital stock of the Company or obligating the Company or any
subsidiary of the Company to grant, extend or enter into any such agreement or
commitment. There are no outstanding stock appreciation rights or similar
derivative securities or rights of the Company or any of its subsidiaries.
Except as disclosed in the Company SEC Reports or as otherwise contemplated by
this Agreement, there are no voting trusts, irrevocable proxies or other
agreements or understandings to which the Company or any subsidiary of the
Company is a party or is bound with respect to the voting of any shares of
capital stock of the Company.
Section 4.03. Subsidiaries. Each direct and indirect subsidiary of the
Company is duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization and has the requisite power
and authority to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted and each subsidiary of the Company
is qualified to transact business, and is in good standing, in each jurisdiction
in which the properties owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary; except, in all
cases, where the failure to be so organized, existing, qualified and in good
standing would not reasonably be expected to have a Company Material Adverse
Effect. All of the outstanding shares of capital stock of or other equity
interests in each subsidiary of the Company are validly issued, fully paid,
nonassessable and free of preemptive rights. There are no subscriptions,
options, warrants, rights, calls, contracts or other commitments,
understandings, restrictions or arrangements relating to the issuance or sale
with respect to any shares of capital stock of or other equity interests in any
subsidiary of the Company, including any right of conversion or exchange under
any outstanding security, instrument or agreement. For purposes of this
Agreement, the term "subsidiary" means, with respect to any specified person
(the "Owner") any other person of which more than 50% of the total voting power
of shares of capital stock or other equity interests entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers, trustees or other governing body thereof is at the time owned or
controlled, directly or indirectly, by such Owner or one or more of the other
subsidiaries of such Owner.
Section 4.04. Authority; Non-Contravention; Approvals. (a) The Company
has full corporate power and authority to enter into this Agreement and, subject
to the Company Stockholders' Approval (as defined in Section 6.01(a)) with
respect solely to the Merger, to consummate the transactions contemplated
hereby. This Agreement and the Merger have been approved and adopted by the
Board of Directors of the Company, and no other corporate
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proceedings on the part of the Company are necessary to authorize the execution
and delivery of this Agreement or, except for the Company Stockholders' Approval
with respect solely to the Merger, the consummation by the Company of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery hereof by Parent and Merger Subsidiary, constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) general
equitable principles.
(b) The execution, delivery and performance of this Agreement by
the Company and the consummation of the Merger and the transactions contemplated
hereby do not and will not violate, conflict with or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, contractually require any offer to purchase
or any prepayment of any debt, or result in the creation of any lien, security
interest or encumbrance upon any of the properties or assets of the Company or
any of its subsidiaries under any of the terms, conditions or provisions of (i)
the respective certificates of incorporation or bylaws of the Company or any of
its Material Subsidiaries, (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any court or
governmental authority applicable to the Company or any of its subsidiaries or
any of their respective properties or assets, subject, in the case of
consummation, to obtaining (prior to the Effective Time) the Company Required
Statutory Approvals (as defined in Section 4.04(c)) and the Company
Stockholders' Approval, or (iii) any Contract to which the Company or any of its
subsidiaries is now a party or by which the Company or any of its subsidiaries
or any of their respective properties or assets may be bound or affected,
subject, in the case of consummation, to obtaining (prior to the Effective Time)
consents required from commercial lenders, lessors or other third parties as
specified in Section 4.04(b) of the Company Disclosure Schedule, except, with
respect to any item referred to in clause (ii) or (iii), for any such violation,
conflict, breach, default, termination, acceleration or creation of liens,
security interests or encumbrances that would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect and
would not prevent or materially delay the consummation of the Merger.
(c) Except for (i) the filings by the Company required by the
HSR Act, (ii) the filing of the Proxy Statement with the SEC pursuant to the
Exchange Act, (iii) the filing of Articles of Merger with the Secretary of State
of the State of Colorado in connection with the Merger, (iv) any filings with or
approvals from authorities required solely by virtue of the jurisdictions in
which Parent or its subsidiaries conduct any business or own any assets, and (v)
filings with and approvals in respect of Gaming Laws (the filings and approvals
referred to in clauses (i) through (v) and those disclosed in Section 4.04(c) of
the Company Disclosure Schedule being collectively referred to as the "Company
Required Statutory Approvals"), no declaration, filing or registration with, or
notice to, or authorization, consent or approval of, any governmental or
regulatory body or authority is necessary for the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby, other than such declarations, filings, registrations,
notices, authorizations, consents or approvals which, if not made or obtained,
as the case may be, would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect and would not prevent or
materially delay the consummation of the Merger.
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Section 4.05. Reports and Financial Statements. Since January 1, 1998,
the Company has filed with the SEC all forms, statements, reports and documents
(including all exhibits, post-effective amendments and supplements thereto) (the
"Company SEC Reports") required to be filed by it under each of the Securities
Act, the Exchange Act and the respective rules and regulations thereunder, all
of which, as amended if applicable, complied when filed in all material respects
with all applicable requirements of the applicable act and the rules and
regulations thereunder. As of their respective dates, the Company SEC Reports
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements of the Company
included as an exhibit to the Company's proxy statement relating to its 2000
annual meeting of stockholders (and which is a Company SEC Report) (the "Company
Financial Statements") have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and fairly present in all material respects the
financial position of the Company and its subsidiaries as of the dates thereof
and the results of their operations and changes in financial position for the
periods then ended.
Section 4.06. Absence of Undisclosed Liabilities. Except as disclosed in
the Company SEC Reports or the Company Disclosure Schedule, neither the Company
nor any of its subsidiaries had at September 30, 2000, or has incurred since
that date and as of the date hereof, any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of any nature, except (a)
liabilities, obligations or contingencies (i) which are accrued or reserved
against in the Company Financial Statements or reflected in the notes thereto or
(ii) which were incurred after September 30, 2000 in the ordinary course of
business and consistent with past practice, (b) liabilities, obligations or
contingencies which (i) would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect, or (ii) have been
discharged or paid in full prior to the date hereof in the ordinary course of
business, and (c) liabilities, obligations and contingencies which are of a
nature not required to be reflected in the consolidated financial statements of
the Company and its subsidiaries prepared in accordance with generally accepted
accounting principles consistently applied.
Section 4.07. Absence of Certain Changes or Events. Since the date of
the most recent Company SEC Report filed prior to the date of this Agreement
that contains consolidated financial statements of the Company, there has not
been any Company Material Adverse Effect.
Section 4.08. Litigation. Except as referred to in the Company SEC
Reports, there are no claims, suits, actions or proceedings pending or, to the
knowledge of the Company, threatened against, relating to or affecting the
Company or any of its subsidiaries, before any court, governmental department,
commission, agency, instrumentality or authority, or any arbitrator that would
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. Except as referred to in the Company SEC Reports,
neither the Company nor any of its subsidiaries is subject to any judgment,
decree, injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or authority, or any arbitrator which
prohibits the consummation of the transactions contemplated hereby or would
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect.
Section 4.09. Proxy Statement. None of the information to be supplied by
the Company or any of its subsidiaries for inclusion in the Proxy Statement
will, at the time of the mailing thereof and any amendments or supplements
thereto, and at the time of the meeting of
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stockholders of the Company to be held in connection with the transactions
contemplated by this Agreement, 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 the light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply as to form
in all material respects with all applicable laws, including the provisions of
the Exchange Act and the rules and regulations promulgated thereunder, except
that no representation is made by the Company with respect to information
supplied by Parent, Merger Subsidiary or any stockholder of Parent for inclusion
therein.
Section 4.10. No Violation of Law. Except as disclosed in the Company
SEC Reports filed prior to the date of this Agreement, neither the Company nor
any of its subsidiaries is in violation of or has been given written (or, to the
knowledge of the Company's executive officers, oral) notice of any violation of,
any law, statute, order, rule, regulation, ordinance or judgment (including,
without limitation, any applicable environmental law, ordinance or regulation)
of any governmental or regulatory body or authority, except for violations which
would not reasonably be expected, individually or in the aggregate, to have a
Company Material Adverse Effect. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement, to the knowledge of the Company, no
investigation or review by any governmental or regulatory body or authority is
pending or threatened, nor has any governmental or regulatory body or authority
indicated an intention to conduct the same, other than, in each case, those the
outcome of which would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect. The Company and its
subsidiaries are not in violation of the terms of any permit, license,
franchise, variance, exemption, order or other governmental authorization,
consent or approval necessary to conduct their businesses as presently conducted
(collectively, the "Company Permits"), except for delays in filing reports or
violations which would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.
Section 4.11. Compliance with Agreements. Except as disclosed in the
Company SEC Reports, neither the Company nor any of its subsidiaries is in
breach or violation of or in default in the performance or observance of any
term or provision of, and no event has occurred which, with lapse of time or
action by a third party, would result in a default under, any Contract to which
the Company or any of its subsidiaries is a party or by which any of them is
bound or to which any of their property is subject, other than breaches,
violations and defaults which would not reasonably be expected, individually or
in the aggregate, to have a Company Material Adverse Effect. To the knowledge of
the Company's executive officers, the Company's insurance policies relating to
directors' and officers' liability are in full force and effect.
Section 4.12. Taxes. (a) The Company and its subsidiaries have (i) duly
filed with the appropriate governmental authorities all Tax Returns required to
be filed by them, and such Tax Returns are true, correct and complete, and (ii)
duly paid in full or reserved in accordance with generally accepted accounting
principles on the Company Financial Statements all Taxes required to be paid,
except in each such case as would not, individually or in the aggregate, have a
Company Material Adverse Effect. Except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, there are no liens for Taxes
upon any property or asset of the Company or any subsidiary thereof, other than
liens for Taxes not yet due or Taxes contested in good faith and reserved
against in accordance with generally accepted accounting principles. There are
no unresolved issues of law or fact arising out of a notice of deficiency,
proposed deficiency or assessment from the Internal Revenue Service (the "IRS")
or any other
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governmental taxing authority with respect to Taxes of the Company or any of its
subsidiaries which would individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect,
neither the Company nor any of its subsidiaries has agreed to an extension of
time with respect to a Tax deficiency, other than extensions which are no longer
in effect. Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, neither the Company nor any of its subsidiaries is a
party to any agreement providing for the allocation or sharing of Taxes with any
entity that is not, directly or indirectly, a wholly-owned subsidiary of the
Company, other than agreements the consequences of which are fully and
adequately reserved for in the Company Financial Statements.
(b) Except as would not, individually or in the aggregate, have
a Company Material Adverse Effect, the Company and each of its subsidiaries has
withheld or collected and has paid over to the appropriate governmental entities
(or is properly holding for such payment) all material Taxes required to be
collected or withheld.
(c) For purposes of this Agreement, "Tax" (including, with
correlative meaning, the term "Taxes") means all federal, state, local and
foreign income, profits, franchise, gross receipts, environmental, customs duty,
capital stock, communications services, severance, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and includes any liability for Taxes of another person by contract,
as a transferee or successor, under Treas. Reg. 1.1502-6 or analogous state,
local or foreign law provision or otherwise, and "Tax Return" means any return,
report or similar statement (including attached schedules) required to be filed
with respect to any Tax, including without limitation, any information return,
claim for refund, amended return or declaration of estimated Tax.
Section 4.13. Employee Benefit Plans; ERISA. (a) The Company SEC Reports
and the Company Disclosure Letter set forth each employee or director benefit
plan, arrangement or agreement, including without limitation any employee
welfare benefit plan within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), any employee
pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not
such plan is subject to ERISA) and any bonus, incentive, deferred compensation,
vacation, stock purchase, stock option, severance, employment, change of control
or fringe benefit plan, program or agreement (excluding any multi-employer plan
as defined in Section 3(37) of ERISA (a "Multi-employer Plan") and any multiple
employer plan within the meaning of Section 413(c) of the Code) that is
sponsored, maintained or contributed to by the Company or any of its
subsidiaries or by any trade or business, whether or not incorporated, all of
which together with the Company would be deemed a "single employer" within the
meaning of Section 4001 of ERISA (the "Company Plans").
(b) Except as disclosed in the Company SEC Reports or in the
Company Disclosure Schedule, (i) there have been no prohibited transactions
within the meaning of Section 406 or 407 of ERISA or Section 4975 of the Code
with respect to any of the Company Plans that could result in penalties, taxes
or liabilities which would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (ii) no Company Plan is
subject to Title IV of ERISA, (iii) each of the Company Plans has been operated
and administered in accordance with all applicable laws during the period of
time covered by the
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applicable statute of limitations, except for failures to comply which would not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect, (iv) each of the Company Plans which is intended to be
"qualified" within the meaning of Section 401(a) of the Code has been determined
by the IRS to be so qualified and such determination has not been revoked by
failure to satisfy any condition thereof or by a subsequent amendment thereto or
a failure to amend, except that it may be necessary to make additional
amendments retroactively to maintain the "qualified" status of such Company
Plans, and the period for making any such necessary retroactive amendments has
not expired, (v) to the knowledge of the Company and its subsidiaries, there are
no pending, threatened or anticipated claims involving any of the Company Plans
other than claims for benefits in the ordinary course or claims which would not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect, (vi) no Company Plan provides post-retirement medical
benefits to employees or directors of the Company or any of its subsidiaries
beyond their retirement or other termination of service, other than coverage
mandated by applicable law, (vii) all material contributions or other amounts
payable by the Company or its subsidiaries as of the date hereof with respect to
each Company Plan in respect of current or prior plan years have been paid or
accrued in accordance with generally accepted accounting principles, (viii) with
respect to each Multi-employer Plan contributed to by the Company, to the
knowledge of the Company and its subsidiaries, as of the date hereof, none of
the Company or any of its subsidiaries has received any notification that any
such Multi-employer Plan is in reorganization, has been terminated or is
insolvent, (ix) the Company and each of its subsidiaries has complied in all
respects with the Worker Adjustment and Retraining Notification Act, except for
failures which would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect, and (x) no act, omission
or transaction has occurred with respect to any Company Plan that has resulted
or could result in any liability of the Company or any subsidiary under Section
409 or 502(c)(1) or (l) of ERISA or Chapter 43 of Subtitle (A) of the Code,
except for liabilities which would not reasonably be expected, individually or
in the aggregate, to have a Company Material Adverse Effect.
(c) Except as set forth in the Company Disclosure Schedule, and
excluding payments in respect of outstanding Options, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without limitation, any
severance or "excess parachute payment" (within the meaning of Section 280G of
the Code)) becoming due to any director or employee of the Company or any of its
subsidiaries under any Company Plan, (ii) increase any benefits otherwise
payable under any Company Plan, or (iii) result in any acceleration of the time
of payment or vesting of any such benefits.
Section 4.14. Labor Controversies. Except as disclosed in the Company
SEC Reports, (a) there are no significant controversies pending or, to the
knowledge of the Company, threatened between the Company or any of its
subsidiaries and any representatives (including unions) of any of their
employees, and (b) to the knowledge of the Company, there are no organizational
efforts presently being made involving any of the presently unorganized
employees of the Company or any of its subsidiaries.
Section 4.15. Environmental Matters. (a) Except as disclosed in the
Company SEC Reports, (i) the Company and its subsidiaries have conducted their
respective businesses in compliance with all applicable Environmental Laws,
including, without limitation, having all permits, licenses and other approvals
and authorizations necessary for the operation of their
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respective businesses as presently conducted, (ii) none of the properties owned
by the Company or any of its subsidiaries contain any Hazardous Substance in
amounts exceeding the levels permitted by applicable Environmental Laws, (iii)
since January 1, 1998, neither the Company nor any of its subsidiaries has
received any notices, demand letters or requests for information from any
Federal, state, local or foreign governmental entity indicating that the Company
or any of its subsidiaries may be in violation of, or liable under, any
Environmental Law in connection with the ownership or operation of their
businesses, (iv) there are no civil, criminal or administrative actions, suits,
demands, claims, hearings, investigations or proceedings pending or threatened,
against the Company or any of its subsidiaries relating to any violation, or
alleged violation, of any Environmental Law, (v) no Hazardous Substance has been
disposed of, released or transported in violation of any applicable
Environmental Law from any properties owned by the Company or any of its
subsidiaries as a result of any activity of the Company or any of its
subsidiaries during the time such properties were owned, leased or operated by
the Company or any of its subsidiaries, and (vi) neither the Company, its
subsidiaries nor any of their respective properties are subject to any
liabilities or expenditures (fixed or contingent) relating to any suit,
settlement, court order, administrative order, regulatory requirement, judgment
or claim asserted or arising under any Environmental Law, except for violations
of the foregoing clauses (i) through (vi) that would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect.
(b) As used herein, "Environmental Law" means any federal,
state, local or foreign law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, legal doctrine, order,
judgment, decree, injunction, requirement or agreement with any governmental
entity relating to (x) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource) or to human health or safety, or (y)
the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Hazardous Substances, in each case as amended and as in effect at the
Effective Time. The term "Environmental Law" includes, without limitation, (i)
the Federal Comprehensive Environmental Response Compensation and Liability Act
of 1980, the Superfund Amendments and Reauthorization Act, the Federal Water
Pollution Control Act of 1972, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976 (including
the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste
Disposal Act and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Occupational Safety
and Health Act of 1970, each as amended and as in effect at the Effective Time,
and (ii) any common law or equitable doctrine (including, without limitation,
injunctive relief and tort doctrines such as negligence, nuisance, trespass and
strict liability) that may impose liability or obligations for injuries or
damages arising from or threatened as a result of, the presence of, effects of
or exposure to any Hazardous Substance.
(c) As used herein, "Hazardous Substance" means any substance
presently or hereafter listed, defined, designated or classified as hazardous,
toxic, radioactive, or dangerous, or otherwise regulated, under any
Environmental Law. Hazardous Substance includes any substance to which exposure
is regulated by any government authority or any Environmental Law including,
without limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial substance
or petroleum or any
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derivative or by-product thereof, radon, radioactive material, asbestos, or
asbestos-containing material, urea formaldehyde foam insulation, lead or
polychlorinated biphenyls.
Section 4.16. Title to Assets. The Company and each of its subsidiaries
has good and valid title in fee simple to all its real property and good title
to all its leasehold interests and other properties, as reflected in the most
recent balance sheet included in the Company Financial Statements, except for
properties and assets that have been disposed of in the ordinary course of
business since the date of such balance sheet, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever, except (i) the
lien for current taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject thereto or
affected thereby, or otherwise materially impair the Company's business
operations (in the manner presently carried on by the Company), or (iii) as
disclosed in the Company SEC Reports, and except for such matters which would
not reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. All leases under which the Company or any of its
subsidiaries leases any real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not, under
any of such leases, any existing default or event which with notice or lapse of
time or both would become a default other than failures to be in good standing,
valid and effective and defaults under such leases which would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect.
Section 4.17. Company Stockholders' Approval. The affirmative vote of
stockholders of the Company required for approval and adoption of this Agreement
and the Merger is a majority of the outstanding shares of Company Common Stock
entitled to vote thereon.
Section 4.18. Brokers and Finders. The Company has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of the Company to pay any investment banking fees, finder's
fees or brokerage fees in connection with the transactions contemplated hereby,
other than fees payable to ___________________________ (the "Company Financial
Advisor"), or as disclosed in Section 4.18 of the Company Disclosure Schedule.
An accurate copy of any fee agreement with the Company Financial Advisor has
been made available to Parent.
ARTICLE V
COVENANTS
Section 5.01. Conduct of Business by the Company Pending the Merger.
Except as otherwise contemplated by this Agreement or disclosed in Section 5.01
of the Company Disclosure Schedule, after the date hereof and prior to the
Effective Time or earlier termination of this Agreement, unless Parent shall
otherwise agree in writing, the Company shall, and shall cause its subsidiaries
to:
(a) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice, including with
respect to casino credit policies;
(b) not (i) amend or propose to amend their respective
certificates of incorporation or bylaws or equivalent constitutional documents,
(ii) split, combine or reclassify
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their outstanding capital stock or (iii) declare, set aside or pay any dividend
or distribution payable in cash, stock, property or otherwise, except for the
payment of dividends or distributions to the Company or a wholly-owned
subsidiary of the Company by a direct or indirect wholly-owned subsidiary of the
Company;
(c) not issue, sell, pledge or dispose of, or agree to issue,
sell, pledge or dispose of, any additional shares of, or any options, warrants
or rights of any kind to acquire any shares of, their capital stock of any class
or any debt or equity securities convertible into or exchangeable for any such
capital stock, except that the Company may issue shares upon the exercise of
Options outstanding on the date hereof;
(d) not (i) incur or become contingently liable with respect to
any indebtedness for borrowed money other than (A) borrowings in the ordinary
course of business or borrowings under the existing credit facilities of the
Company or of any of its subsidiaries up to the existing borrowing limit on the
date hereof, and (B) borrowings to refinance existing indebtedness on terms
which are reasonably acceptable to Parent; provided that in no event shall
aggregate indebtedness of the Company and its subsidiaries, net of all cash and
cash equivalents, exceed $______________, (ii) redeem, purchase, acquire or
offer to purchase or acquire any shares of its capital stock or any options,
warrants or rights to acquire any of its capital stock or any security
convertible into or exchangeable for its capital stock other than in connection
with the exercise of outstanding Options pursuant to the terms of the Company
Option Plans, (iii) make any acquisition of any assets or businesses other than
expenditures for current assets in the ordinary course of business and
expenditures for fixed or capital assets in the ordinary course of business,
(iv) without Parent's consent, acquire any gaming property in the State of
Colorado, (v) sell, pledge, dispose of or encumber any assets or businesses
other than (A) sales of businesses or assets disclosed in Section 5.01 of the
Company Disclosure Schedule, (B) pledges or encumbrances pursuant to Existing
Credit Facilities or other permitted borrowings, (C) sales of real estate,
assets or facilities for cash consideration (including any debt assumed by the
buyer of such real estate, assets or facilities) to non-affiliates of the
Company of less than $______________ in each such case and $____________ in the
aggregate, (D) sales or dispositions of businesses or assets as may be required
by applicable law, and (E) sales or dispositions of assets in the ordinary
course or (vi) enter into any binding contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(e) use all reasonable efforts to preserve intact their
respective business organizations and goodwill, keep available the services of
their respective present officers and key employees, and preserve the goodwill
and business relationships with customers and others having business
relationships with them other than as expressly permitted by the terms of this
Agreement;
(f) not enter into, amend, modify or renew any employment,
consulting, severance or similar agreement with, or grant any salary, wage or
other increase in compensation or increase in any employee benefit to, any
director or officer of the Company or of any of its subsidiaries, except (i) for
changes that are required by applicable law, (ii) to satisfy obligations
existing as of the date hereof, or (iii) in the ordinary course of business
consistent with past practice;
(g) not enter into, establish, adopt, amend or modify any
pension, retirement, stock purchase, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare plan, agreement, program or
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arrangement, in respect of any director, officer or employee of the Company or
of any of its subsidiaries, except, in each such case, as may be required by
applicable law or by the terms of contractual obligations existing as of the
date hereof, including any collective bargaining agreement;
(h) not make expenditures, including, but not limited to,
capital expenditures, or enter into any binding commitment or contract to make
expenditures, except (i) expenditures which the Company or its subsidiaries are
currently contractually committed to make, (ii) other expenditures not exceeding
$____________ individually or $_____________ in the aggregate, (iii) for
emergency repairs and other expenditures necessary in light of circumstances not
anticipated as of the date of this Agreement which are necessary to avoid
significant disruption to the Company's business or operations consistent with
past practice (and, if reasonably practicable, after consultation with Parent),
or (iv) for repairs and maintenance in the ordinary course of business
consistent with past practice. With respect to the subject matter of this
paragraph (h), if the Company requests approval of Parent to exceed the limits
set forth herein, Parent shall respond to such request and grant or withhold
approval promptly following receipt of such request;
(i) not make, change or revoke any material Tax election unless
required by law or make any agreement or settlement with any taxing authority
regarding any material amount of Taxes or which would reasonably be expected to
materially increase the obligations of the Company or the Surviving Corporation
to pay Taxes in the future.
Section 5.02. Control of the Company's Operations. Nothing contained in
this Agreement shall give to Parent, directly or indirectly, rights to control
or direct the Company's operations prior to the Effective Time. Prior to the
Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
Section 5.03. Acquisition Transactions. (a) After the date hereof and
prior to the Effective Time or earlier termination of this Agreement, the
Company shall not, and shall not permit any of its subsidiaries to, initiate,
solicit, negotiate, encourage or provide confidential information to facilitate,
and the Company shall use all reasonable efforts to cause any officer, director
or employee of the Company, or any attorney, accountant, investment banker,
financial advisor or other agent retained by it or any of its subsidiaries, not
to initiate, solicit, negotiate, encourage or provide non-public or confidential
information to facilitate, any proposal or offer to acquire all or any
substantial part of the business, properties or capital stock of the Company,
whether by merger, purchase of assets, tender offer or otherwise, whether for
cash, securities or any other consideration or combination thereof (any such
transactions being referred to herein as an "Acquisition Transaction").
(b) Notwithstanding the provisions of paragraph (a) above, (i)
the Company may, prior to receipt of the Company Stockholders' Approval, in
response to an unsolicited bona fide written offer or proposal with respect to a
potential or proposed Acquisition Transaction ("Acquisition Proposal") from a
corporation, partnership, person or other entity or group (a "Potential
Acquirer") which the Company's Board of Directors determines, in good faith and
after consultation with its independent financial advisor, would reasonably be
expected to result (if consummated pursuant to its terms) in an Acquisition
Transaction more favorable to the Company's stockholders than the Merger (a
"Qualifying Proposal"), furnish (subject to the execution of a confidentiality
agreement substantially similar to the confidentiality provisions of
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the Confidentiality Agreement (as defined in Section 5.04)) confidential or
non-public information to, and negotiate with, such Potential Acquirer, may
resolve to accept, or recommend, and, upon termination of this Agreement in
accordance with Section 7.01(v) and after payment to Parent of the fee pursuant
to Section 5.09(b), enter into agreements relating to, a Qualifying Proposal
which the Company's Board of Directors, in good faith, has determined is
reasonably likely to be consummated (such Qualifying Proposal being a "Superior
Proposal") and (ii) the Company's Board of Directors may take and disclose to
the Company's stockholders a position contemplated by Rule 14e-2 under the
Exchange Act or otherwise make disclosure required by the federal securities
laws. It is understood and agreed that negotiations and other activities
conducted in accordance with this paragraph (b) shall not constitute a violation
of paragraph (a) of this Section 5.03.
(c) The Company shall promptly notify Parent after receipt of
any Acquisition Proposal, indication of interest or request for non-public
information relating to the Company or its subsidiaries in connection with an
Acquisition Proposal or for access to the properties, books or records of the
Company or any subsidiary by any person or entity that informs the Board of
Directors of the Company or such subsidiary that it is considering making, or
has made, an Acquisition Proposal. Such notice to Parent shall be given orally
and in writing and shall indicate in reasonable detail the identity of the
offeror and the material terms and conditions of such proposal, inquiry or
contact.
Section 5.04. Access to Information. The Company and its subsidiaries
shall afford to Parent and Merger Subsidiary and their respective accountants,
counsel, financial advisors, sources of financing and other representatives (the
"Parent Representatives") reasonable access during normal business hours with
reasonable notice throughout the period prior to the Effective Time to all of
their respective properties, books, contracts, commitments and records
(including, but not limited to, Tax Returns) and, during such period, shall
furnish promptly (i) a copy of each report, schedule and other document filed or
received by any of them pursuant to the requirements of federal or state
securities laws or filed by any of them with the SEC in connection with the
transactions contemplated by this Agreement, and (ii) such other information
concerning its businesses, properties and personnel as Parent or Merger
Subsidiary shall reasonably request and will obtain the reasonable cooperation
of the Company's officers, employees, counsel, accountants, consultants and
financial advisors in connection with the investigation of the Company by Parent
and the Parent Representatives. All nonpublic information provided to, or
obtained by, Parent or any Parent Representative in connection with the
transactions contemplated hereby shall be "Information" for purposes of the
Confidentiality Agreement dated ______________, 2001 between Parent and the
Company (the "Confidentiality Agreement"), provided that Parent, Merger
Subsidiary and the Company may disclose such information as may be necessary in
connection with seeking the Parent Required Statutory Approvals, the Company
Required Statutory Approvals and the Company Stockholders' Approval.
Notwithstanding the foregoing, the Company shall not be required to provide any
information which it reasonably believes it may not provide to Parent by reason
of applicable law, rules or regulations, which constitutes information protected
by attorney/client privilege, or which the Company or any subsidiary is required
to keep confidential by reason of contract, agreement or understanding with
third parties entered into prior to the date hereof.
Section 5.05. Notices of Certain Events. (a) The Company shall promptly
as reasonably practicable after executive officers of the Company acquire
knowledge thereof, notify Parent of: (i) any notice or other communication from
any person alleging that the consent of such person
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(or another person) is or may be required in connection with the transactions
contemplated by this Agreement which consent relates to a material Contract to
which the Company or any of its subsidiaries is a party or which if not obtained
would materially delay consummation of the Merger; (ii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement; and (iii) any
actions, suits, claims, investigations or proceedings commenced or, to the best
of its knowledge threatened against, relating to or involving or otherwise
affecting the Company or any of its subsidiaries that, if pending on the date of
this Agreement, would have been required to have been disclosed pursuant to
Section 4.08 or 4.10 or which relate to the consummation of the transactions
contemplated by this Agreement.
(b) Each of Parent and Merger Subsidiary shall as promptly as
reasonably practicable after executive officers of the Parent acquire knowledge
thereof, notify the Company of: (i) any notice or other communication from any
person alleging that the consent of such person (or other person) is or may be
required in connection with the transactions contemplated by this Agreement
which consent relates to a material Contract to which Parent or any of its
subsidiaries is a party or which if not obtained would materially delay the
Merger, (ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement, and (iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened, against
Parent or Merger Subsidiary, which relate to consummation of the transactions
contemplated by this Agreement.
(c) Each of the Company, Parent and Merger Subsidiary agrees to
give prompt notice to each other of, and to use commercially reasonable efforts
to remedy, (i) the occurrence or failure to occur of any event which occurrence
or failure would be likely to cause any of its representations or warranties in
this Agreement to be untrue or inaccurate at the Effective Time unless such
failure or occurrence would not have a Company Material Adverse Effect or a
Parent Material Adverse Effect, as the case may be, and (ii) any failure on its
part to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder unless such failure or occurrence
would not have a Company Material Adverse Effect or a Parent Material Adverse
Effect, as the case may be. The delivery of any notice pursuant to this Section
5.05(c) shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
Section 5.06. Meeting of the Company's Stockholders. The Company shall
as promptly as practicable after the date of this Agreement take all action
necessary in accordance with the CBCA and its Articles of Incorporation and
bylaws to convene a meeting of the Company's stockholders (the "Company
Stockholders' Meeting") to act on this Agreement. The Board of Directors of the
Company shall recommend that the Company's stockholders vote to approve the
Merger and adopt this Agreement; provided, however, that the Company may change
its recommendation in any manner if its recommendation of the Merger would be
inconsistent with the board of directors' fiduciary duties under applicable law,
as determined by the board of directors in good faith after consultation with
its financial and legal advisors.
Section 5.07. Proxy Statement. As promptly as practicable after
execution of this Agreement, the Company shall prepare the Proxy Statement, file
it with the SEC under the Exchange Act, and use all reasonable efforts to have
the Proxy Statement cleared by the SEC. Parent, Merger Subsidiary and the
Company shall cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Parent of the receipt of any comments of
the
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SEC with respect to the Proxy Statement and of any requests by the SEC for any
amendment or supplement thereto or for additional information and shall provide
to Parent promptly copies of all correspondence between the Company or any
representative of the Company and the SEC. The Company shall give Parent and its
counsel the opportunity to review the Proxy Statement prior to its being filed
with the SEC and shall give Parent and its counsel the opportunity to review all
amendments and supplements to the Proxy Statement and all responses to requests
for additional information and replies to comments prior to their being filed
with, or sent to, the SEC. Each of the Company, Parent and Merger Subsidiary
agrees to use its reasonable best efforts, after consultation with the other
parties hereto, to respond promptly to all such comments of and requests by the
SEC. As promptly as practicable after the Proxy Statement has been cleared by
the SEC, the Company shall mail the Proxy Statement to the stockholders of the
Company. Prior to the date of approval of the Merger by the Company's
stockholders, each of the Company, Parent and Merger Subsidiary shall correct
promptly any information provided by it to be used specifically in the Proxy
Statement that shall have become false or misleading in any material respect and
the Company shall take all steps necessary to file with the SEC and cleared by
the SEC any amendment or supplement to the Proxy Statement so as to correct the
same and to cause the Proxy Statement as so corrected to be disseminated to the
stockholders of the Company, in each case to the extent required by applicable
law.
Section 5.08. Public Announcements. Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and,
except as may be required by applicable law or any listing agreement with the
NASDAQ - National Market System, will not issue any such press release or make
any such public statement prior to such consultation.
Section 5.09. Expenses and Fees. (a) All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses, except that those expenses incurred
in connection with printing and filing the Proxy Statement shall be shared
equally by Parent and the Company.
(b) The Company agrees to pay to Parent a fee equal to
$_____________ if:
(i) the Company terminates this Agreement pursuant
to clause (v) of Section 7.01;
(ii) Parent terminates this Agreement pursuant to
clause (vi) of Section 7.01, which fee shall be payable within
two business days of such termination;
(iii) this Agreement is terminated for any reason at a
time at which Parent was not in material breach of its
representations, warranties, covenants and agreements contained
in this Agreement and was entitled to terminate this Agreement
pursuant to clause (vii) of Section 7.01, and (A) prior to the
time of the Company Stockholders' Meeting a proposal by a third
party relating to an Acquisition Transaction had been publicly
proposed or publicly announced, and (B) on or prior to the 12
month anniversary of the termination of this Agreement the
Company or any of its subsidiaries or affiliates enters into an
agreement or letter of intent (or resolves or announces an
intention to do) with respect to an Acquisition Transaction
involving a person, entity or group if such person, entity,
group (or any member of such group, or any affiliate of any of
the foregoing) made a proposal with respect to an Acquisition
Transaction on or after the date
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hereof and prior to the Company Stockholders' Meeting and such
Acquisition Transaction is consummated.
Section 5.10. Agreement to Cooperate. (a) Subject to the terms and
conditions of this Agreement, including Section 5.03, each of the parties hereto
shall use all reasonable best efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations (including the HSR Act and the Gaming Laws) to
consummate and make effective the transactions contemplated by this Agreement,
including using its reasonable best efforts to obtain all necessary or
appropriate waivers, consents or approvals of third parties required in order to
preserve material contractual relationships of Parent and the Company and their
respective subsidiaries, all necessary or appropriate waivers, consents and
approvals to effect all necessary registrations, filings and submissions and to
lift any injunction or other legal bar to the Merger (and, in that case, to
proceed with the Merger as expeditiously as possible). In addition, subject to
the terms and conditions herein provided and subject to the fiduciary duties of
the respective boards of directors of the Company and Parent, none of the
parties hereto shall knowingly take or cause to be taken any action (including,
but not limited to, in the case of Parent, (x) the incurrence of material debt
financing, other than the financing in connection with the Merger and related
transactions and other than debt financing incurred in the ordinary course of
business, and (y) the acquisition of businesses or assets) which would
reasonably be expected to delay materially or prevent consummation of the
Merger. Parent shall use its reasonable best efforts to cause the satisfaction
of the conditions to the receipt of funds pursuant to the Financing Arrangement.
(b) Without limitation of the foregoing, each of Parent and the
Company undertakes and agrees to file as soon as practicable a Notification and
Report Form under the HSR Act with the United States Federal Trade Commission
(the "FTC") and the Antitrust Division of the United States Department of
Justice (the "Antitrust Division") and to make such filings and apply for such
approvals and consents as are required under the Gaming Laws. Each of Parent and
the Company shall (i) respond as promptly as practicable to any inquiries
received from the FTC or the Antitrust Division or any authority enforcing
applicable Gaming Laws for additional information or documentation and to all
inquiries and requests received from any State Attorney General or other
governmental authority in connection with antitrust matters or Gaming Laws, and
(ii) not extend any waiting period under the HSR Act or enter into any agreement
with the FTC or the Antitrust Division not to consummate the transactions
contemplated by this Agreement, except with the prior written consent of the
other parties hereto. Each party shall (i) promptly notify the other party of
any written communication to that party from the FTC, the Antitrust Division,
any State Attorney General or any other governmental entity and, subject to
applicable law, permit the other party to review in advance any proposed written
communication to any of the foregoing; (ii) not agree to participate in any
substantive meeting or discussion with any governmental authority in respect of
any filings, investigation or inquiry concerning this Agreement or the Merger
unless it consults with the other party in advance and, to the extent permitted
by such governmental authority, gives the other party the opportunity to attend
and participate thereat; and (iii) furnish the other party with copies of all
correspondence, filings, and communications (and memoranda setting forth the
substance thereof) between them and their affiliates and their respective
representatives on the one hand, and any government or regulatory authority or
members or their respective staffs on the other hand, with respect to this
Agreement and the Merger.
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Section 5.11. Directors' and Officers' Indemnification. (a) The
indemnification provisions of the articles of incorporation and bylaws of the
Company as in effect at the Effective Time shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who at
the Effective Time were directors, officers, employees or agents of the Company.
(b) Without limiting Section 5.11(a), after the Effective Time,
the Surviving Corporation shall, and Parent shall cause the Surviving
Corporation to, to the fullest extent permitted under applicable law, indemnify
and hold harmless, each present and former director, officer, employee and agent
of the Company or any of its subsidiaries (each, together with such person's
heirs, executors or administrators, an "Indemnified Party" and collectively, the
"Indemnified Parties") against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any actual or threatened claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative (collectively, "Costs and Expenses"), arising out of, relating to
or in connection with (i) any action or omission occurring or alleged to occur
prior to the Effective Time (including, without limitation, acts or omissions in
connection with such persons serving as an officer, director or other fiduciary
in any entity if such service was at the request or for the benefit of the
Company) or (ii) the Merger and the other transactions contemplated by this
Agreement or arising out of or pertaining to the transactions contemplated by
this Agreement or the events and developments between Parent and the Company
leading up to this Agreement. Any Indemnified Party hereunder will (1) give
prompt notice to the Surviving Corporation of any claim which arises from or
after the Effective Time with respect to which it seeks indemnification and (2)
permit the Surviving Corporation to assume the defense of such claim with
counsel reasonably satisfactory to a majority of the Indemnified Parties. In
connection with the selection of counsel to represent the Indemnified Parties in
connection with clause (2) above, the Surviving Corporation shall propose
counsel to represent the Indemnified Parties. The applicable Indemnified Parties
shall have the right to approve such counsel, but such approval shall not be
unreasonably withheld. If the proposed counsel is not approved, the Surviving
Corporation shall continue to propose counsel until counsel is approved by the
applicable Indemnified Parties. Any Indemnified Party shall have the right to
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such person unless:
(x) the Surviving Corporation has agreed, in writing, to pay such fees or
expenses; (y) the Surviving Corporation shall have failed to assume the defense
of such claim after the receipt of notice from the Indemnified Party as required
above and failed to employ counsel reasonably satisfactory to a majority of the
Indemnified Parties or (z) based upon advice of counsel to such Indemnified
Party and concurrence therewith by counsel for the group of Indemnified Parties
in such matter, there shall be one or more defenses available to such
Indemnified Party that are not available to the Surviving Corporation or there
shall exist conflicts of interest between such Indemnified Party and the
Surviving Corporation or the other Indemnified Parties (in which case, if the
Indemnified Party notifies the Surviving Corporation in writing that such
Indemnified Party elects to employ separate counsel at the expense of the
Surviving Corporation, the Surviving Corporation shall not have the right to
assume the defense of such claim on behalf of such Indemnified Party), in each
of which events the reasonable fees and expenses of such counsel (which counsel
shall be reasonably acceptable to the Surviving Corporation) shall be at the
expense of the Surviving Corporation.
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(c) If the Surviving Corporation or Parent or any of their
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation or Parent shall assume the obligations of the Surviving Corporation
or the Parent, as the case may be, set forth in this Section 5.11.
(d) For a period of six years after the Effective Time, Parent
shall cause to be maintained or shall cause the Surviving Corporation to
maintain in effect the current policies of directors' and officers' liability
insurance maintained by the Company and its subsidiaries (provided that Parent
may substitute therefor policies of at least the same coverage and amounts
containing terms and conditions that are no less advantageous to the Indemnified
Parties, and which coverages and amounts shall be no less than the coverages and
amounts provided at that time for Parent's directors and officers) with respect
to matters arising on or before the Effective Time; provided, however, that
Parent and the Surviving Corporation shall not be required to expend in any year
an amount in excess of 125% of the annual aggregate premiums currently paid by
the Company for such insurance; and provided, further, that if the annual
premiums of such insurance coverage exceed such amount, Parent and the Surviving
Corporation shall be obligated to obtain a policy with the best coverage
available, in the reasonable judgment of the Parent's board of directors, for a
cost not exceeding such amount.
(e) The indemnification rights of the Indemnified Parties
granted under (i) this Agreement, (ii) the Articles and Bylaws of the Surviving
Corporation, as amended, and (iii) the CBCA, are the only indemnification rights
available to the Indemnified Parties and supersede any other rights to
indemnification under any other agreement. The provisions of this Section 5.11
shall survive the consummation of the Merger and expressly are intended to
benefit and be binding upon each of the Indemnified Parties.
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) this Agreement and the Merger shall have been adopted by the
requisite vote of the stockholders of the Company in accordance with CBCA (the
"Company Stockholders' Approval");
(b) none of the parties hereto shall be subject to any order or
injunction of any governmental authority of competent jurisdiction that
prohibits the consummation of the Merger. In the event any such order or
injunction shall have been issued, each party agrees to use its reasonable best
efforts to have any such order overturned or injunction lifted; and
(c) the waiting period applicable to consummation of the Merger
under the HSR Act shall have expired or been terminated.
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Section 6.02. Conditions to Obligation of the Company to Effect the
Merger. Unless waived by the Company, the obligation of the Company to effect
the Merger shall be subject to the fulfillment at or prior to the Effective Time
of the following additional conditions:
(a) Parent and Merger Subsidiary shall have performed in all
material respects their agreements contained in this Agreement required to be
performed on or prior to the Effective Time and the representations and
warranties of Parent and Merger Subsidiary contained in this Agreement shall be
true and correct on and as of the Effective Time as if made at and as of such
date (except to the extent that such representations and warranties speak as of
an earlier date), except for such failures to perform or to be true and correct
that would not reasonably be expected to have a Parent Material Adverse Effect,
and the Company shall have received a certificate of the chief executive officer
or the chief financial officer of Parent to that effect; and
(b) all Parent Statutory Approvals and Company Statutory
Approvals required to be obtained in order to permit consummation of the Merger
under applicable law shall have been obtained, except for any such Parent
Statutory Approvals or Company Statutory Approvals whose unavailability would
not, singly or in the aggregate, reasonably be expected to (i) have a Company
Material Adverse Effect after the Effective Time, or (ii) result in the Company
or its subsidiaries failing to meet the standards for licensing, suitability or
character under any Gaming Laws relating to the conduct of Parent's or the
Company's business which (after taking into account the anticipated impact of
such failure to so meet such standards on other authorities) would reasonably be
expected to have a Company Material Adverse Effect (after giving effect to the
Merger).
Section 6.03. Conditions to Obligations of Parent and Subsidiary to
Effect the Merger. Unless waived by Parent and Merger Subsidiary, the
obligations of Parent and Merger Subsidiary to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the additional
following conditions:
(a) the Company shall have performed in all material respects
its agreements contained in this Agreement required to be performed on or prior
to the Effective Time and the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the Effective
Time as if made at and as of such date (except to the extent that such
representations and warranties speak as of an earlier date), except for such
failures to perform and to be true and correct that would not reasonably be
expected to have a Company Material Adverse Effect or, in the case of Section
4.02(a), shall be true and correct when made except for immaterial exceptions
thereto, and Parent shall have received a certificate of the chief executive
officer or the chief financial officer of the Company to that effect; and
(b) all Parent Statutory Approvals and Company Statutory
Approvals required to be obtained in order to permit consummation of the Merger
under applicable law shall have been obtained, except for any such Parent
Statutory Approvals or Company Statutory Approvals whose unavailability would
not reasonably be expected to (i) have a Parent Material Adverse Effect, or (ii)
result in Parent or its subsidiaries failing to meet the standards for
licensing, suitability or character under any Gaming Laws relating to the
conduct of Parent's or the Company's business which (after taking into account
the anticipated impact of such failure to so meet such standards on other
authorities) would reasonably be expected to have a Parent Material Adverse
Effect (after giving effect to the Merger).
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(c) the Financing shall have been consummated and Parent shall
have received not less than $_______________ in proceeds therefrom on or before
the Outside Date.
ARTICLE VII
TERMINATION
Section 7.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company):
(i) by mutual written consent of the Company and
Parent;
(ii) by either the Company or Parent, if the Merger
has not been consummated by July 31, 2001 (the "Outside Date"),
provided that such date shall automatically be extended until
_________________, if, on July 31, 2001, all of the conditions
to the Closing set forth in Article VI shall then be satisfied
(other than conditions with respect to actions the respective
parties will take at the Closing itself) except that any
approval or consent under any Gaming Law, the absence of which
would cause a failure of a condition set forth in Section 6.02
or 6.03, has not been received, and provided further that the
right to terminate this Agreement under this clause (ii) shall
not be available to any party whose failure to fulfill any of
its obligations under this Agreement has been the cause of or
resulted in the failure to consummate the Merger by such date;
(iii) by either the Company or Parent if any judgment,
injunction, order or decree of a court or governmental agency or
authority of competent jurisdiction shall restrain or prohibit
the consummation of the Merger, and such judgment, injunction,
order or decree shall become final and nonappealable and was not
entered at the request of the terminating party;
(iv) by either the Company or Parent, if (x) there
has been a breach by the other party of any representation or
warranty contained in this Agreement which would reasonably be
expected to have a Company Material Adverse Effect or a Parent
Material Adverse Effect, as applicable, or prevent or delay the
consummation of the Merger beyond the Outside Date, and which
has not been cured in all material respects within 30 days after
written notice of such breach by the terminating party, or (y)
there has been a breach of any of the covenants or agreements
set forth in this Agreement on the part of the other party,
which would reasonably be expected to have a Parent Material
Adverse Effect or a Company Material Adverse Effect, as
applicable, or prevent or delay the consummation of the Merger
beyond the Outside Date, and which breach is not curable or, if
curable, is not cured within 30 days after written notice of
such breach is given by the terminating party to the other
party;
(v) by the Company if, prior to receipt of the
Company Stockholders' Approval, the Company receives a Superior
Proposal, resolves to accept such Superior Proposal, and shall
have given Parent two days' prior written notice of its
intention to terminate pursuant to this provision; provided,
however, that such
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termination shall not be effective until such time as the
payment required by Section 5.09(b) shall have been received by
Parent;
(vi) by the Parent, if the Board of Directors of the
Company shall have failed to recommend, or shall have withdrawn,
modified or amended in any material respect its approval or
recommendation of the Merger or shall have resolved to do any of
the foregoing, or shall have recommended another Acquisition
Proposal or if the Board of Directors of the Company shall have
resolved to accept a Superior Proposal or shall have recommended
to the stockholders of the Company that they tender their shares
in a tender or an exchange offer commenced by a third party
(excluding any affiliate of Parent or any group of which any
affiliate of Parent is a member); or
(vii) by Parent or the Company if the stockholders of
the Company fail to approve the Merger at a duly held meeting of
stockholders called for such purpose (including any adjournment
or postponement thereof).
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Effect of Termination. In the event of termination of this
Agreement by either Parent or the Company pursuant to Section 7.01, this
Agreement shall forthwith become void and there shall be no liability or further
obligation on the part of the Company, Parent, Merger Subsidiary or their
respective officers or directors (except as set forth in this Section 8.01, in
the second sentence of Section 5.04 and in Section 5.09, all of which shall
survive the termination). Nothing in this Section 8.01 shall relieve any party
from liability for any breach of any representation, warranty, covenant or
agreement of such party contained in this Agreement.
Section 8.02. Nonsurvival of Representations and Warranties. No
representation, warranty or agreement in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Merger, and after
effectiveness of the Merger neither the Company, Parent, Merger Subsidiary nor
any of their respective officers or directors shall have any further obligation
with respect thereto except for the agreements contained in Articles I, II and
VIII and Section 5.11.
Section 8.03. Notices. All notices and other communications hereunder
shall be in writing and shall be considered given if delivered personally,
mailed by registered or certified mail (return receipt requested) or sent via
facsimile to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to the Company:
Black Hawk Gaming & Development Company, Inc.
XX Xxx 00
000 Xxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
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If to Parent or Merger Subsidiary:
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
with a copy to:
Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Tel: 216/000-0000
Fax: 216/000-0000
Attn: Xxxxxx X. Xxxxxxx, Xx.
Section 8.04. Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, unless a contrary intention
appears, (i) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, (ii) "knowledge" shall mean actual
knowledge of the executive officers of the Company or Parent, as applicable, and
(iii) reference to any Article or Section means such Article or Section hereof.
Section 8.05. Miscellaneous. This Agreement (including the documents and
instruments referred to herein) shall not be assigned by operation of law or
otherwise except that Merger Subsidiary may assign its obligations under this
Agreement to any other wholly-owned subsidiary of Parent subject to the terms of
this Agreement, in which case such assignee shall become the "Merger Subsidiary"
for all purposes of this Agreement. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF COLORADO APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE.
Section 8.06. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be considered to be an original, but all
of which shall constitute one and the same agreement.
Section 8.07. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Parent and Merger Subsidiary or, in the case of a waiver, by the
party against whom the waiver is to be effective; however, any waiver or
amendment shall be effective against a party only if the board of directors of
such party approves such waiver or amendment.
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(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 8.08. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either party hereto. Neither this Agreement nor any provision
hereof is intended to confer upon any person other than the parties hereto any
rights or remedies hereunder except for Section 5.11, which is intended for the
benefit of the Company's former and present officers, directors, employees and
agents, Articles I and II, which are intended for the benefit of the Company's
stockholders, including holders of Options, and Section 5.06, which is intended
for the benefit of the parties to the agreements or participants in the plans
referred to therein.
Section 8.09. Severability. If any term or other provision of this
Agreement is invalid, illegal or unenforceable, all other provisions of this
Agreement shall 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.
Section 8.10. Specific Performance. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were
not to be 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 remedies at law or in equity.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC.
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Name:
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Title:
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[GAMECO]
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Name:
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Title:
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Merger Subsidiary:
[MERGER SUBSIDIARY]
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Name:
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Title:
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