Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
COLUMBIA SUSSEX CORPORATION,
WIMAR TAHOE CORPORATION D/B/A COLUMBIA ENTERTAINMENT,
WT-COLUMBIA DEVELOPMENT, INC.
and
AZTAR CORPORATION
Dated as of May 19, 2006
TABLE OF CONTENTS
ARTICLE I
The Merger
Section 1.01 The Merger......................................................1
Section 1.02 Closing.........................................................2
Section 1.03 Effective Time of the Merger....................................2
Section 1.04 Effects of the Merger...........................................2
Section 1.05 Organizational Documents........................................2
Section 1.06 Directors and Officers of Surviving Corporation.................2
ARTICLE II
Effects of the Merger on the Capital Stock of the Constituent Corporations;
Custodial Assets; Exchange of Certificates
Section 2.01 Effect on Capital Stock.........................................3
Section 2.02 Custodial Assets................................................4
Section 2.03 Exchange of Certificates........................................5
Section 2.04 Dissenting Shares...............................................7
ARTICLE III
Representations and Warranties
Section 3.01 Representations and Warranties of Aztar........................7
Section 3.02 Representations and Warranties of Sussex and Columbia..........24
ARTICLE IV
Covenants
Section 4.01 Covenants of Aztar Interim Operations..........................30
Section 4.02 Covenants of Sussex and Columbia Interim Operations............35
Section 4.03 No Solicitation by Aztar.......................................36
Section 4.04 Other Actions..................................................38
Section 4.05. Control of Aztar's Operations..................................38
i
ARTICLE V
Additional Agreements
Section 5.01 Preparation of the Proxy Statement; Stockholders Meeting.......39
Section 5.02 Access to Information; Effect of Review........................39
Section 5.03 Regulatory Matters; Reasonable Best Efforts....................40
Section 5.04 Stock Options; Restricted Stock and Equity Awards;
Stock Plans....................................................44
Section 5.05 Employee Matters...............................................44
Section 5.06 Indemnification, Exculpation and Insurance.....................45
Section 5.07 Fees and Expenses..............................................47
Section 5.08 Public Announcements...........................................49
Section 5.09 Aztar Headquarters.............................................49
Section 5.10 Pinnacle Termination Fee.......................................49
Section 5.11 Guarantee......................................................50
ARTICLE VI
Conditions Precedent
Section 6.01 Conditions to Each Party's Obligation to Effect the Merger.....50
Section 6.02 Conditions to Obligations of Aztar.............................51
Section 6.03 Conditions to Obligations of Columbia..........................52
Section 6.04 Frustration of Closing Conditions..............................52
ARTICLE VII
Termination, Amendment and Waiver
Section 7.01 Termination....................................................52
Section 7.02 Effect of Termination..........................................54
Section 7.03 Amendment......................................................54
Section 7.04 Extension; Waiver..............................................54
ARTICLE VIII
General Provisions
Section 8.01 Nonsurvival of Representations and Warranties..................55
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Section 8.02 Notices........................................................55
Section 8.03 Definitions....................................................56
Section 8.04 Interpretation and Other Matters...............................60
Section 8.05 Counterparts...................................................60
Section 8.06 Entire Agreement; No Third-Party Beneficiaries.................61
Section 8.07 Governing Law..................................................61
Section 8.08 Assignment.....................................................61
Section 8.09 Enforcement....................................................61
Section 8.10 Severability...................................................61
Section 8.11 WAIVER OF JURY TRIAL...........................................62
Section 8.12 Alternative Structure..........................................62
Exhibit A - Custody and Security Agreement
iii
AGREEMENT AND PLAN OF MERGER, dated as of May 19, 2006 (this
"Agreement"), by and among Aztar Corporation, a Delaware corporation ("Aztar"),
Columbia Sussex Corporation, a Kentucky corporation ("Sussex"), Wimar Tahoe
Corporation, d/b/a Columbia Entertainment, a Nevada corporation and affiliate of
Sussex ("Columbia"), and WT-Columbia Development, Inc., a Delaware corporation
and a wholly owned subsidiary of Columbia ("Merger Sub").
WHEREAS, Aztar, Pinnacle Entertainment, Inc. ("Pinnacle") and PNK
Development 1, Inc., a wholly owned subsidiary of Pinnacle, entered into an
Agreement and Plan of Merger, dated as of March 13, 2006, as amended and
restated as of April 28, 2006, and amended by Amendment No. 4, dated May 5, 2006
(together, the "Pinnacle Agreement");
WHEREAS, immediately prior to the execution and delivery of this
Agreement, Aztar terminated the Pinnacle Agreement in accordance with its terms;
WHEREAS, the respective Boards of Directors of Aztar, Sussex, Columbia
and Merger Sub have approved the consummation of the business combination
provided for in this Agreement, pursuant to which Merger Sub will merge with and
into Aztar (the "Merger"), with Aztar surviving that merger (the "Surviving
Corporation");
WHEREAS, in the Merger, subject to the terms of Article II, each share
of common stock, $.01 par value per share, of Aztar (the "Aztar Common Stock")
will be converted into the right to receive $54.00 per share in cash;
WHEREAS, in the Merger, subject to the terms of Article II, each share
of Series B ESOP Convertible Preferred Stock, $.01 par value per share, of Aztar
(the "Aztar Preferred Stock") will be converted into the right to receive
$571.13 per share in cash; and
WHEREAS, Aztar, Sussex, Columbia and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and the transactions contemplated by this Agreement and also to prescribe
various conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants and agreements contained in this
Agreement, the parties agree as follows:
ARTICLE I
The Merger
Section 1.01 The Merger. Upon the terms and subject to the satisfaction
or waiver of the conditions set forth in this Agreement, at the Effective Time
(as defined in Section 1.03), Merger Sub shall be merged with and into Aztar in
accordance with the Delaware General Business Corporation Law (the "DGCL").
Aztar shall be the Surviving Corporation in the
Merger and shall continue its corporate existence under the laws of the State of
Delaware and shall succeed to and assume all of the rights and obligations of
Aztar and Merger Sub in accordance with the DGCL.
Section 1.02 Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., New York City time, on a date selected by Columbia,
but not later than the fifth business day, following the satisfaction or waiver
of the conditions set forth in Article VI (other than those conditions that by
their terms are to be satisfied at the Closing, but subject to the satisfaction
or waiver of such conditions at such time) unless another time or date is agreed
to by the parties hereto. The date on which the Closing occurs is referred to in
this Agreement as the "Closing Date." The Closing shall be held at such location
in The City of New York as is agreed to by the parties hereto.
Section 1.03 Effective Time of the Merger. Subject to the provisions of
this Agreement, with respect to the Merger, as soon as practicable after 10:00
a.m., New York City time, on the Closing Date, the parties thereto shall file a
certificate of merger (the "Certificate of Merger") executed in accordance with,
and containing such information as is required by, the relevant provisions of
Section 251 of the DGCL with the Secretary of State of the State of Delaware.
The Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Secretary of State of the State of Delaware (the "Effective
Time").
Section 1.04 Effects of the Merger. The Merger shall generally have the
effects set forth in this Agreement and the applicable provisions of the DGCL.
Section 1.05 Organizational Documents. At the Effective Time, (A) the
certificate of incorporation of Merger Sub, shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law and (B) the by-laws of Merger Sub shall
be the by-laws of the Surviving Corporation, until thereafter changed or amended
as provided therein, in the certificate of incorporation of the Surviving
Corporation or by applicable law.
Section 1.06 Directors and Officers of Surviving Corporation. The
directors and officers of Merger Sub at the Effective Time shall, from and after
the Effective Time, be the initial directors and officers, respectively, of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified.
ARTICLE II
Effects of the Merger on the Capital Stock of the Constituent Corporations;
Custodial Assets; Exchange of Certificates
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Section 2.01 Effect on Capital Stock.
At the Effective Time, by virtue of the Merger and without any action
on the part of the holder of any shares of Aztar Common Stock or Aztar Preferred
Stock (together, the "Aztar Capital Stock") or any capital stock of Merger Sub:
(a) Cancellation of Certain Aztar Common Stock and Aztar Preferred
Stock. Each share of Aztar Common Stock or Aztar Preferred Stock that is owned
by Aztar shall automatically be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
(b) Conversion of Aztar Common Stock. Subject to Section 2.03(e), each
issued and outstanding share of Aztar Common Stock (other than shares to be
canceled in accordance with Section 2.01(a) and other than Aztar Dissenting
Shares (as defined in Section 2.04(a)) shall be converted into the right to
receive (i) $54.00 per share in cash plus (ii) if the Closing shall not have
occurred on or prior to the date which is six months from the date hereof for
reasons other than those set forth in Section 6.01(a) and Section 6.03 of this
Agreement, an amount in cash equal to $0.00888 per day for each day during the
period commencing on the day following the expiry date of the six months period
through the date of the Closing plus (iii) if the Closing shall not have
occurred on or prior to the date which is nine months from the date hereof for
reasons other than those set forth in Section 6.01(a) and Section 6.03 of this
Agreement, an amount in cash equal to $0.00296 per day for each day during the
period commencing on the day following the expiry date of the nine months period
through the date of the Closing, (together the "Common Stock Merger
Consideration"). As of the Effective Time, all such shares of Aztar 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 Aztar Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Common Stock Merger Consideration to be
paid therefor upon the surrender of such certificate in accordance with Section
2.03, without interest.
(c) Conversion of Aztar Preferred Stock. Subject to Section 2.03(e),
each issued and outstanding share of Aztar Preferred Stock (other than shares to
be canceled in accordance with Section 2.01(a) and other than Aztar Dissenting
Shares) shall be converted into the right to receive (i) $571.13 per share in
cash plus (ii) if the Closing shall not have occurred on or prior to the date
which is six months from the date hereof for reasons other than those set forth
in Section 6.01(a) and Section 6.03 of this Agreement, an amount in cash equal
to $0.09388 per day for each day during the period commencing on the day
following the expiry date of the six months period through the date of the
Closing, plus (iii) if the Closing shall not have occurred on or prior to the
date which is nine months from the date hereof for reasons other than those set
forth in Section 6.01(a) and Section 6.03 of this Agreement, an amount in cash
equal to $0.0313 per day for each day during the period commencing on the day
following the expiry date of the nine months period through the date of the
Closing, provided that with respect to any share of Aztar Preferred Stock that
has elected to receive the liquidation preference plus accrued and unpaid
dividends in accordance with the certification of designations, preferences and
rights of the Aztar Preferred Stock, each such share shall be converted into the
liquidation preference thereof plus accrued and unpaid dividends as of the
Effective Time (together, the "Preferred Stock Merger Consideration" and
together with the Common Stock Merger Consideration, the "Merger
Consideration"). The liquidation preference of a share of Aztar Preferred Stock
is $100.
3
As of the date hereof, the accrued and unpaid dividends thereon were less than
$180,000 in the aggregate. As of the Effective Time, all such shares of Aztar
Preferred 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 Aztar Preferred Stock shall cease to have any
rights with respect thereto, except the right to receive the Preferred Stock
Merger Consideration upon the surrender of such certificate in accordance with
Section 2.03, without interest.
(d) Conversion of Merger Sub Common Stock. Each share of the capital
stock of Merger Sub issued and outstanding immediately prior to the Effective
Time (of which, as of the date of this Agreement, 1000 shares of common stock,
par value $.01 per share, are issued and outstanding) shall be converted into
one duly authorized, validly issued, fully paid, and nonassessable share of
common stock, $.01 par value per share, of the Surviving Corporation so that,
after the Effective Time, Columbia shall be the holder of all of the issued and
outstanding capital stock of the Surviving Corporation.
Section 2.02 Custodial Assets. (a) Concurrently with the execution
hereof, Sussex shall deposit $313 million (such amount, including the interest
accrued thereon, the "Custodial Assets") with Deutsche Bank Trust Company
Americas (the "Custodian"), pursuant to a custody and security agreement dated
as of the date hereof and attached hereto as Exhibit A (the "Custody and
Security Agreement") executed and delivered by each of Sussex, Columbia, Merger
Sub, Aztar and the Custodian. At the Closing, the Custodial Assets then being
held by the Custodian shall be credited against the Payment Fund (as defined
below) and such Custodial Assets shall be promptly released and paid by the
Custodian to the Paying Agent (as defined below) pursuant to this Section
2.02(a) and the terms of the Custody and Security Agreement. Upon the
termination of this Agreement, the Custodial Assets shall be payable pursuant to
Section 5.07(d) hereof, and thereafter shall be promptly released by the
Custodian to Aztar or Sussex, as the case may be, pursuant to Section 5.07(d)
hereof and the terms of the Custody and Security Agreement.
(b) Aztar, Sussex, Columbia, and Merger Sub agree to execute and be
bound by such other reasonable and customary instructions as may be necessary or
reasonably required by the Custodian or the parties hereto in order to
consummate the Merger and the other transactions contemplated by this Agreement,
or otherwise to distribute and pay the funds as provided in this Agreement and
the Custody and Security Agreement; provided, that such instructions are
consistent with the terms of this Agreement and the Custody and Security
Agreement. In the event of any inconsistency between the terms and provisions of
such supplemental instructions and the terms and provisions of this Agreement,
or any inconsistency between the terms and provisions of the Custody and
Security Agreement and the terms and provisions of this Agreement, the terms and
provisions of this Agreement shall control, absent an express written agreement
between the parties hereto to the contrary which acknowledges this Section
2.02(b).
4
Section 2.03 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Columbia shall enter
into an agreement with such bank or trust company as may be mutually agreed by
Columbia and Aztar (the "Paying Agent"), pursuant to which Columbia shall
deposit with the Paying Agent at the Effective Time, for the benefit of the
holders of shares of Aztar Common Stock and Aztar Preferred Stock, for exchange
in accordance with this Article II, through the Paying Agent, cash representing
the Common Stock Merger Consideration payable to holders of shares of Aztar
Common Stock and cash representing the Preferred Stock Merger Consideration
payable to holders of shares of Aztar Preferred Stock (the "Payment Fund").
(b) Payment Procedures. As soon as reasonably practicable after the Effective
Time, the Paying Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of Aztar Common Stock or Aztar Preferred Stock (the
"Certificates") whose shares were converted into the right to receive cash
pursuant to Section 2.01, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Paying Agent and shall be in
such form and have such other provisions as Columbia may reasonably specify) and
(ii) instructions for use in surrendering the Certificates in exchange for the
applicable Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent, together with such letter of transmittal, duly
executed, and such other documents as may reasonably be required by the Paying
Agent, the holder of such Certificate shall be entitled to receive in exchange
therefor, in the case of Certificates formerly representing shares of Aztar
Common Stock, the Common Stock Merger Consideration, without interest, and in
the case of Certificates formerly representing shares of Aztar Preferred Stock,
the Preferred Stock Merger Consideration, without interest, in each case that
such holder has the right to receive pursuant to the provisions of this Article
II, and, in each case, the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Aztar Common Stock or Aztar
Preferred Stock that is not registered in the transfer records of Aztar, the
applicable Merger Consideration may be issued to a person other than the person
in whose name the Certificate so surrendered is registered only if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such issuance shall pay any transfer or other
taxes required by reason of the payment of the applicable Merger Consideration
to a person other than the registered holder of such Certificate or establish to
the satisfaction of Columbia that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.03, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the applicable Merger Consideration, which the
holder thereof has the right to receive in respect of such Certificate pursuant
to the provisions of this Article II. No interest shall be paid or will accrue
on the Merger Consideration or any cash payable to holders of Certificates
pursuant to the provisions of this Article II.
(c) No Further Ownership Rights in Aztar Capital Stock. All cash
payments of Merger Consideration upon the surrender for exchange of Certificates
in accordance with the terms of this Article II shall be deemed to have been
paid in full satisfaction of all rights pertaining to the shares of Aztar Common
Stock or Aztar Preferred Stock, as the case may be, theretofore represented by
such Certificates, and there shall be no further registration of transfers on
the stock transfer books of Aztar of the shares of Aztar Common Stock or Aztar
Preferred Stock that were outstanding immediately prior to the Effective Time.
If, after the Effective
5
Time, Certificates are presented to Columbia, Aztar or the Paying Agent for any
reason, they shall be canceled and exchanged as provided in this Article II,
except as otherwise provided by law.
(d) Termination of Payment Fund. Any portion of the Payment Fund that
remains undistributed to the holders of the Certificates for six months after
the Effective Time shall be delivered to Columbia, upon demand, and any holders
of the Certificates who have not theretofore complied with this Article II shall
thereafter look only to Columbia for payment of their claims for Merger
Consideration.
(e) No Liability. None of Columbia, Aztar or the Paying Agent or any of
their respective directors, officers, employees and agents shall be liable to
any person in respect of any cash representing the Merger Consideration or any
cash from the Payment Fund, in each case delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law. If any Certificate
shall not have been surrendered prior to two years after the Effective Time (or
immediately prior to such earlier date on which any Merger Consideration would
otherwise escheat to or become the property of any Governmental Authority (as
defined in Section 3.01(d)), any such Merger Consideration shall, to the extent
permitted by applicable law, become the property of Columbia, free and clear of
all claims or interest of any person previously entitled thereto.
(f) Investment of Payment Fund. The Paying Agent shall invest any cash
included in the Payment Fund, as directed by Columbia, on a daily basis, in
Permitted Investments (as defined in Section 8.03) or as otherwise consented to
by Aztar prior to the Effective Time (which consent shall not be unreasonably
withheld or delayed). Any interest and other income resulting from such
investments shall be paid to Columbia.
(g) Withholding Rights. Columbia and the Paying Agent shall be entitled
to deduct and withhold from any consideration payable pursuant to this Agreement
to any person who was a holder of Aztar Common Stock or Aztar Preferred Stock,
as the case may be, immediately prior to the Effective Time such amounts as
Columbia and the Paying Agent may be required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended (the "Code") or any other provision of applicable federal, state,
local or foreign tax law. To the extent that amounts are so withheld by Columbia
or the Paying Agent and duly paid over to the applicable taxing authority, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the person to whom such consideration would otherwise have been
paid.
(h) Lost, Stolen or Destroyed Certificates. If any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen or destroyed
and, if required by Columbia, the posting by such person of a bond in such
reasonable amount as Columbia may direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Paying Agent shall
issue in exchange for such lost, stolen or destroyed Certificate, the applicable
Merger Consideration pursuant to this Agreement.
6
(i) Adjustments to Prevent Dilution. In the event that Aztar changes
the number of shares of Aztar Common Stock or securities convertible or
exchangeable into or exercisable for shares of Aztar Common Stock, or shares of
Aztar Preferred Stock or securities convertible or exchangeable into or
exercisable for shares of Aztar Preferred Stock, issued and outstanding prior to
the Effective Time, in each case as a result of a reclassification, stock split
(including a reverse stock split), stock dividend or distribution,
recapitalization, merger, subdivision, issuer tender or exchange offer, or other
transaction, the applicable Merger Consideration shall be equitably adjusted.
Section 2.04 Dissenting Shares. Any holder of shares of Aztar Common
Stock or Aztar Preferred Stock who shall have exercised rights to dissent with
respect to the Merger in accordance with the DGCL and who has properly exercised
such holder's rights to demand payment of the "fair value" of the holder's
shares of Aztar Common Stock or Aztar Preferred Stock, as the case may be (the
"Aztar Dissenting Shares") as provided in the DGCL (the "Aztar Dissenting
Stockholder") shall thereafter have only such rights, if any, as are provided a
dissenting stockholder in accordance with the DGCL and shall have no rights to
receive the Merger Consideration pursuant to Section 2.01; provided, however,
that if a Aztar Dissenting Stockholder shall fail to properly demand payment (in
accordance with the DGCL) or shall have effectively withdrawn or lost such
rights to relief as a Aztar Dissenting Stockholder under the DGCL, then such
Aztar Dissenting Stockholder's Aztar Dissenting Shares automatically shall cease
to be Aztar Dissenting Shares and shall be converted into and represent only the
right to receive, upon surrender of the Certificate representing the Aztar
Dissenting Shares, the applicable Merger Consideration pursuant to Section 2.01,
without interest.
ARTICLE III
Representations and Warranties
Section 3.01 Representations and Warranties of Aztar. Except as and to
the extent set forth in the letter dated the date of this Agreement and
delivered to Columbia by Aztar concurrently with the execution and delivery of
this Agreement (the "Aztar Disclosure Letter") and, to the extent the qualifying
nature of such disclosure is readily apparent therefrom, except as and to the
extent set forth in the Aztar Reports (as defined in Section 3.01(e)) filed on
or after January 1, 2006 and prior to the date hereof or in Aztar's definitive
proxy statement for its 2006 Annual Meeting of Stockholders (excluding, in each
case, any disclosures set forth in any risk factor section, in any section
relating to forward looking statements and any other disclosures included
therein to the extent that they are cautionary, predictive or forward-looking in
nature), Aztar represents and warrants to Columbia and Merger Sub as follows:
(a) Organization and Qualification. Each of Aztar and its subsidiaries
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has full power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its assets
and properties, except for such failures to be so organized, existing and in
good standing or to have such power and authority that, individually or in the
aggregate, have not had and would not reasonably be
7
expected to have a material adverse effect (as defined in Section 8.03) on
Aztar. Each of Aztar and its subsidiaries is duly qualified, licensed or
admitted to do business and is in good standing in each jurisdiction in which
the ownership, use or leasing of its assets and properties, or the conduct or
nature of its business, makes such qualification, licensing or admission
necessary, except for such failures to be so qualified, licensed or admitted and
in good standing that, individually or in the aggregate, have not had and would
not reasonably be expected to have a material adverse effect on Aztar. Except as
set forth in Section 3.01(a) of the Aztar Disclosure Letter, none of Aztar or
any of its subsidiaries is a party to any agreement, arrangement or
understanding relating to the securities of Aztar or any of its subsidiaries,
including with respect to the voting, holding, issuance, purchase, sale or
registration thereof or entitling any party to any put or call rights, rights of
first offer, rights of first refusal, tag-along or drag-along rights or any
similar rights or obligations, or to any agreement, arrangement or understanding
providing for any governance, veto or similar rights with respect to Aztar or
any of its subsidiaries.
(b) Capital Stock.
(i) The authorized capital stock of Aztar consists of:
(A) 100,000,000 shares of Aztar Common Stock, of which
36,158,655 shares were issued and outstanding as of the date of
this Agreement; and
(B) 100,000 shares of preferred stock, par value $.01 per
share, of which 44,689.657 shares of Aztar Preferred Stock were
issued or outstanding as of the date of this Agreement.
As of May 12, 2006, 18,871,010 shares of Aztar Common Stock and no
shares of Aztar Preferred Stock were held in the treasury of Aztar.
(ii) A true and correct copy of each of the 1989 Stock Option
and Incentive Plan, 1999 Employee Stock Option and Incentive Plan, 2004
Employee Stock Option and Incentive Plan, 1990 Nonemployee Directors
Stock Option Plan and 2000 Nonemployee Directors Stock Option Plan, in
each case as currently in effect and reflecting all amendments thereto
(collectively, the "Aztar Employee Stock Plans") has been delivered or
made available to Columbia prior to the date hereof. As of the date of
this Agreement, (x) 3,257,663 shares of Aztar Common Stock were subject
to outstanding Aztar Employee Stock Options (as defined in Section
5.04(a)) and (y) no shares of Aztar Common Stock were the subject of
other rights (whether contingent, accrued or otherwise), to acquire or
receive shares of Aztar Common Stock or benefits measured by the value
of shares of Aztar Common Stock or otherwise representing an award of
any kind consisting of shares of Aztar Common Stock under the Aztar
Employee Stock Plans (the items in this clause (y), the "Aztar
Awards"). The Aztar Employee Stock Plans are the only plans or other
obligations of Aztar or any of its subsidiaries with respect to Aztar
Awards or Aztar Employee Stock Options. Aztar has no shares of capital
stock reserved for issuance, except that, as of May 12, 2006, there
were an aggregate of 3,073,494 shares of Aztar Common Stock reserved
for issuance pursuant to the Aztar Employee Stock Plans, including
3,073,494 shares in respect of
8
Aztar Employee Stock Options and no shares in respect of Aztar Awards,
an aggregate of 472,656 shares of Aztar Common Stock reserved for
issuance upon conversion of the Aztar Preferred Stock and an aggregate
of 50,000 shares of preferred stock reserved for issuance in connection
with the Rights Agreement (as defined in Section 3.01(p)). Section
3.01(b)(ii) of the Aztar Disclosure Letter contains a correct and
complete list as of May 12, 2006 of (i) the number of outstanding Aztar
Employee Stock Options under each of the Aztar Employee Stock Plans,
the holders of such Aztar Employee Stock Options (if such holder is or
was an executive officer of Aztar), the exercise price of all Aztar
Employee Stock Options and the number of shares of Aztar Common Stock
issuable at each such exercise price, and (ii) the number of
outstanding Aztar Awards under each of the Aztar Employee Stock Plans
and the holders of such Aztar Awards. From May 12, 2006 to the date
hereof, Aztar has not issued any shares of Aztar Common Stock except
pursuant to the exercise of Aztar Employee Stock Options and the
settlement of Aztar Awards, in each case outstanding on May 12, 2006,
in accordance with their respective terms. From May 12, 2006 through
the date hereof, neither Aztar nor any of its subsidiaries has granted
or issued any Aztar Employee Stock Options or Aztar Awards. All Aztar
Employee Stock Options vest at the Effective Time pursuant to the terms
of the Aztar Employee Stock Plans as in effect on the date hereof.
(iii) All of the issued and outstanding shares of Aztar Common
Stock are, and all shares reserved for issuance will be, upon issuance
in accordance with the terms specified in the instruments or agreements
pursuant to which they are issuable, duly authorized, validly issued,
fully paid and nonassessable. All of the issued and outstanding shares
of Aztar Preferred Stock are duly authorized, validly issued, fully
paid and nonassessable.
(iv) Except as disclosed in this Section 3.01(b) and except
for this Agreement, as of the date of this Agreement, there are no
outstanding subscriptions, options, warrants, rights (including stock
appreciation rights), preemptive rights, redemption rights, repurchase
rights or other contracts, commitments, understandings or arrangements,
including any put or call right or right of conversion or exchange
under any outstanding security, instrument or agreement (collectively,
"Options"), obligating Aztar or any of its subsidiaries to acquire or
purchase or to issue or sell any shares of capital stock (or to make
payments measured by the value of shares of capital stock) or other
securities of Aztar or any of its subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or
giving any person a right to subscribe for or acquire, any capital
stock (or to make payments measured by the value of shares of capital
stock) or other securities of Aztar or any of its subsidiaries, or to
grant, extend or enter into any Option with respect thereto, and no
securities or obligations evidencing such rights or Options are
authorized, issued or outstanding. No Aztar subsidiary owns any shares
of Aztar Common Stock or Aztar Preferred Stock.
(v) Except as disclosed in Section 3.01(b)(v) of the Aztar
Disclosure Letter, all of the outstanding shares of capital stock and
other securities of each subsidiary of Aztar are duly authorized,
validly issued, fully paid and nonassessable and are owned,
beneficially and of record, by Aztar or a wholly owned subsidiary, free
and
9
clear of any liens, claims, mortgages, encumbrances, pledges, security
interests, equities and charges of any kind (each, a "Lien"), except
for any of the foregoing that, individually or in the aggregate, have
not had and would not reasonably be expected to have a material adverse
effect on Aztar. Except as disclosed in Section 3.01(b)(v) of the Aztar
Disclosure Letter, there are no (A) outstanding Options obligating
Aztar or any of its subsidiaries to issue or sell any shares of capital
stock of any subsidiary of Aztar or to grant, extend or enter into any
such Option or (B) voting trusts, proxies or other commitments,
understandings, restrictions or arrangements in favor of any person
other than Aztar or a wholly owned subsidiary of Aztar with respect to
the voting of or the right to participate in dividends or other
earnings on any capital stock of any subsidiary of Aztar.
(vi) No bonds, debentures, notes or other indebtedness or
obligations of Aztar or any of its subsidiaries having the right to
vote (or which are convertible into or exercisable for securities
having the right to vote) (collectively, "Aztar Voting Debt") on any
matters on which Aztar stockholders may vote are issued or outstanding
nor are there any outstanding Options obligating Aztar or any of its
subsidiaries to issue or sell any Aztar Voting Debt or to grant, extend
or enter into any Option with respect thereto. There are no securities
convertible into or exercisable for any such securities and no
commitments or obligations to issue any of the foregoing.
(c) Authority. The Aztar Board of Directors has unanimously (A)
declared that the Merger and the other transactions contemplated hereby are
advisable and has adopted this Agreement; (B) resolved to recommend adoption of
this Agreement to the holders of shares of Aztar Common Stock and Aztar
Preferred Stock; and (C) directed that this Agreement be submitted to the
holders of shares of Aztar Common Stock and Aztar Preferred Stock for their
adoption. Aztar has full corporate power and authority to enter into this
Agreement, to perform its obligations hereunder, and, subject to obtaining
Stockholder Approval (as defined in Section 3.01(p)), to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Aztar and the consummation by Aztar of the transactions
contemplated hereby have been duly and validly adopted and approved by the Board
of Directors of Aztar. No other corporate proceedings on the part of Aztar or
its stockholders are necessary to authorize the execution, delivery and
performance of this Agreement by Aztar and the consummation by Aztar of the
Merger and the other transactions contemplated hereby, other than obtaining
Stockholder Approval. This Agreement has been duly and validly executed and
delivered by Aztar and constitutes a legal, valid and binding obligation of
Aztar enforceable against Aztar in accordance with its terms. Aztar has received
the opinion of Xxxxxxx, Xxxxx & Co., Inc., dated the date of this Agreement, to
the effect that, as of the date of this Agreement, the Common Stock Merger
Consideration is fair from a financial point of view to the holders of Aztar
Common Stock.
(d) No Conflicts; Approvals and Consents.
(i) Other than the notices, reports, filings, consents,
registrations, declarations, approvals, permits or authorizations (A)
required by the Secretary of the State of Delaware as contemplated
hereby; (B) required under the Xxxx-Xxxxx-Xxxxxx
10
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
(C) by, with, to or from the Gaming Authorities (as defined in Section
8.03) in New Jersey, Nevada, Missouri and Indiana with jurisdiction
over Aztar's gaming operations under any Gaming Laws (as defined in
Section 8.03) applicable to Aztar (collectively, the "Aztar Required
Gaming Approvals"), except as set forth in Section 3.01(d)(i) of the
Aztar Disclosure Letter, no notices, declarations, reports or other
filings are required to be made by Aztar with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by Aztar or any of its subsidiaries from, any domestic or
foreign governmental or regulatory authority, agency, commission, body,
court or other legislative, executive or judicial governmental
authority (each, a "Governmental Authority"), in connection with the
execution, delivery and performance of this Agreement by Aztar and the
consummation by Aztar of the Merger and the compliance by Aztar with
the provisions of this Agreement, or in connection with the continuing
operation of the business of Aztar and its subsidiaries following the
Effective Time, except those that the failure to make or obtain,
individually or in the aggregate, have not had and would not reasonably
be expected to have a material adverse effect on Aztar.
(ii) The execution, delivery and performance of this Agreement
and the Custody and Security Agreement by Aztar do not, and the
consummation by Aztar of the Merger and the compliance by Aztar with
the provisions of this Agreement and the Custody and Security Agreement
will not, constitute or result in (A) a breach or violation of, or a
default under, the certificate of incorporation or by-laws of Aztar or
the comparable governing documents of any of its subsidiaries; (B)
except as set forth in Section 3.01(d)(ii)(B) of the Aztar Disclosure
Letter, with or without notice, lapse of time or both, a breach or
violation of, a termination (or right of termination) or default under,
the creation or acceleration of any obligations under or the creation
of a Lien on any of the assets of Aztar or any of its subsidiaries
pursuant to any agreement, lease, license, contract, note, mortgage,
indenture or other obligation, whether or not in writing (a
"Contract"), binding upon Aztar or any of its subsidiaries or, assuming
(solely with respect to performance of this Agreement by Aztar and
consummation by Aztar of the Merger) compliance with the matters
referred to in Section 3.01(d)(i), any Law (as defined in Section
3.01(j)) or governmental or non-governmental permit or license to which
Aztar or any of its subsidiaries is subject; or (C) any change in the
rights or obligations of any party under any Contract binding upon
Aztar or any of its subsidiaries (including, without limitation, any
change in pricing, term, put or call rights, rights of first offer,
rights of first refusal, tag-along or drag-along rights or any similar
rights or obligations which may be exercised in connection with the
Merger and the other transactions contemplated hereby), except in the
case of clause (B) and (C) as individually or in the aggregate have not
had and would not reasonably be expected to have a material adverse
effect on Aztar.
(iii) Section 3.01(d)(iii) of the Aztar Disclosure Letter sets
forth a correct and complete list of Material Contracts (as defined in
Section 3.01(m)) of Aztar or any of its subsidiaries pursuant to which
consents or waivers are required in connection with the performance by
Aztar of its obligations hereunder.
11
(e) Aztar EC Reports; Financial Statements.
(i) Aztar has made available to Columbia each registration
statement, report, proxy statement or information statement prepared by
it since December 31, 2002 and filed with the SEC, including Aztar's
Annual Report on Form 10-K for the year ended December 31, 2005, each
in the form (including exhibits, annexes and any amendments thereto)
filed with the Securities and Exchange Commission (the "SEC"). Aztar
has filed or furnished all forms, statements, reports and documents
required to be filed or furnished by it with the SEC pursuant to
applicable securities statutes, regulations, policies and rules since
December 31, 2002 (the forms, statements, reports and documents filed
or furnished with the SEC since December 31, 2002 and those filed or
furnished with the SEC subsequent to the date of this Agreement, if
any, including any amendments thereto, the "Aztar Reports"). Each of
the Aztar Reports filed or furnished on or prior to the date hereof, at
the time of its filing (except and as to the extent such Aztar Report
has been modified or superseded in any subsequent Aztar Report filed
and publicly available prior to the date of this Agreement), complied,
and each of the Aztar Reports filed or furnished after the date hereof
will comply, in all material respects with the applicable requirements
of each of the Exchange Act and the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations thereunder and
complied or will comply, as applicable, in all material respects with
the then applicable accounting standards. As of their respective dates,
except as and to the extent modified or superseded in any subsequent
Aztar Report filed and publicly available prior to the date of this
Agreement, the Aztar Reports did not, and any Aztar Reports filed or
furnished with the SEC subsequent to the date hereof will 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
made therein, in light of the circumstances in which they were made,
not misleading. The Aztar Reports filed or furnished on or prior to the
date hereof included, and if filed or furnished after the date hereof,
will include all certificates required to be included therein pursuant
to Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002, as amended
(the "SOX Act"), and the internal control report and attestation of
Aztar's outside auditors required by Section 404 of the SOX Act.
(ii) Each of the consolidated balance sheets included in or
incorporated by reference into the Aztar Reports (including the related
notes and schedules) fairly presents, or, in the case of the Aztar
Reports filed or furnished after the date hereof, will fairly present
in all material respects the consolidated financial position of Aztar
and its subsidiaries as of its date, and each of the consolidated
statements of income, changes in shareholders' equity and cash flows
included in or incorporated by reference into the Aztar Reports
(including any related notes and schedules) fairly presents, or in the
case of the Aztar Reports filed or furnished after the date hereof,
will fairly present in all material respects the net income, total
shareholders' equity and net increase (decrease) in cash and cash
equivalents, as the case may be, of Aztar and its subsidiaries for the
periods set forth therein (subject, in the case of unaudited
statements, to the absence of notes and normal year-end audit
adjustments that will not be material in amount or effect), in each
case in accordance with U.S. generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except as
may be noted therein.
12
(iii) The management of Aztar has (x) implemented disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Exchange
Act) that are reasonably designed to ensure that material information
relating to Aztar, including its consolidated subsidiaries, is made
known to the chief executive officer and chief financial officer of
Aztar by others within those entities, and (y) disclosed, based on its
most recent evaluation, to Aztar's outside auditors and the audit
committee of the Board of Directors of Aztar (A) all significant
deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting (as defined in Rule
13a-15(f) of the Exchange Act) which are reasonably likely to adversely
affect in any material respect Aztar's ability to record, process,
summarize and report financial data and (B) any fraud, whether or not
material, that involves management or other employees who have a
significant role in Aztar's internal controls over financial reporting.
Since December 31, 2002, any material change in internal control over
financial reporting required to be disclosed in any Aztar Report has
been so disclosed.
(iv) Since December 31, 2003, to Aztar's knowledge, (x) none
of Aztar or any of its subsidiaries, or any director, officer,
employee, auditor, accountant or representative of Aztar or any of its
subsidiaries, has received or otherwise had or obtained knowledge of
any material complaint, allegation, assertion or claim, whether written
or oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of Aztar or any of its subsidiaries or their
respective internal accounting controls relating to periods after
December 31, 2003, including any material complaint, allegation,
assertion or claim that Aztar or any of its subsidiaries has engaged in
questionable accounting or auditing practices (except for any of the
foregoing that have been resolved without any material impact and
except for any of the foregoing after the date hereof which have no
reasonable basis), and (y) no attorney representing Aztar or any of its
subsidiaries, whether or not employed by Aztar or any of its
subsidiaries, has reported evidence of a material violation of
securities Laws, breach of fiduciary duty or similar violation,
relating to periods after December 31, 2003, by Aztar or any of its
officers, directors, employees or agents to the Board of Directors of
Aztar or any committee thereof or, to the knowledge of the officers of
Aztar, to any director or officer of Aztar.
(v) All filings (other than immaterial filings) required to be
made by Aztar or any of its subsidiaries since December 31, 2002 under
any applicable state laws and regulations relating to gaming or similar
matters, have been filed with the applicable Governmental Authorities,
including all forms, statements, reports, agreements (oral or written)
and all documents, exhibits, amendments and supplements appertaining
thereto so required to be filed, and all such filings complied, as of
their respective dates, with all applicable requirements of the
applicable statute and the rules and regulations thereunder, except for
filings the failure of which to make or the failure of which to make in
compliance with all applicable requirements of the applicable statute
and the rules and regulations thereunder, individually or in the
aggregate, have not had and would not reasonably be expected to have a
material adverse effect on Aztar.
13
(f) Absence of Certain Changes or Events. Since December 31, 2005 (the
"Audit Date"), there has not been any material adverse effect on Aztar or any
change, event or development that, individually or in the aggregate, has had or
would reasonably be expected to have a material adverse effect on Aztar. Since
the Audit Date, Aztar and its subsidiaries have conducted their respective
businesses in all material respects only in, and have not engaged in any
material transaction other than in, the ordinary course of such businesses.
Since the Audit Date and prior to the date hereof, there has not been any action
or event that if taken on or after the date hereof without the consent of
Columbia would violate the provisions of Section 4.01(a) of this Agreement or
any agreement or commitment to do any of the foregoing.
(g) Absence of Undisclosed Liabilities. Except as set forth in Section
3.01(g) of the Aztar Disclosure Letter, there are no liabilities or obligations
of Aztar or any of its subsidiaries, whether or not accrued, contingent or
otherwise and whether or not required to be disclosed, or any other facts or
circumstances that would reasonably be expected to result in any obligations or
liabilities of, Aztar or any of its subsidiaries, other than: (a) liabilities or
obligations to the extent (I) reflected on the consolidated balance sheet of
Aztar included in the most recent audited financial statements included in the
Aztar Reports filed prior to the date hereof (the "Audited Financial
Statements"), or (II) readily apparent in the notes thereto, (b) liabilities or
obligations incurred in the ordinary course of business since December 31, 2005
that individually or in the aggregate, have not had and would not reasonably be
expected to have a material adverse effect on Aztar, (c) other liabilities or
obligations that individually or in the aggregate have not had and would not
reasonably be expected to have a material adverse effect on Aztar, (d)
performance obligations under Material Contracts required in accordance with
their terms, and (e) performance obligations, to the extent required under
applicable Law, in the case of each of clause (d) and (e) to the extent arising
after the date hereof.
(h) Legal Proceedings; Litigation and Liabilities. Except as set forth
in Section 3.01(h) of the Aztar Disclosure Letter, there are no (A) civil,
criminal or administrative actions, suits, claims, hearings, arbitrations,
investigations or proceedings pending or, to the knowledge of Aztar, threatened
against Aztar or any of its subsidiaries or affiliates or (B) litigations,
arbitrations, investigations or other proceedings, or injunctions or final
judgments relating thereto, pending or, to the knowledge of Aztar, threatened
against Aztar or any of its subsidiaries or affiliates before any Governmental
Authority, including any Gaming Authority, except in the case of either clause
(A) or (B), for those that, individually or in the aggregate, have not had and
would not reasonably be expected to have a material adverse effect on Aztar.
None of Aztar or any of its subsidiaries or affiliates is a party to or subject
to the provisions of any judgment, order, writ, injunction, decree or award of
any Governmental Authority, including any Gaming Authority, which, individually
or in the aggregate, have had or would reasonably be expected to have a material
adverse effect on Aztar.
(i) Information Supplied. None of the information supplied or to be
supplied by Aztar for inclusion or incorporation by reference in the proxy
statement (the "Proxy Statement") to be mailed to Aztar's stockholders in
connection with the Stockholders Meeting (as defined in Section 5.01(b)) will,
at the date it is first mailed to Aztar's
14
stockholders or at the time of the Stockholders Meeting contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation is made by Aztar with respect to statements made or incorporated
by reference therein based on information supplied by or on behalf of Columbia
for inclusion or incorporation by reference in the Proxy Statement.
(j) Permits; Compliance with Laws and Orders. The businesses of each of
Aztar and its subsidiaries have not been conducted in violation of any federal,
state, local or foreign law, statute or ordinance, common law, or any rule,
regulation, standard, judgment, order, writ, injunction, decree, arbitration
award, agency requirement, license or permit of any Governmental Authority,
including any Gaming Authority (collectively, "Laws"), except for such
violations that, individually or in the aggregate, have not had and would not
reasonably be expected to have a material adverse effect on Aztar. Except as set
forth in Section 3.01(j)(1) of the Aztar Disclosure Letter, no investigation,
review, proceeding, notice of violation, order of forfeiture or complaint by any
Governmental Authority, including any Gaming Authority, with respect to Aztar or
any of its subsidiaries is pending or, to the knowledge of Aztar, threatened,
nor has any Governmental Authority, including any Gaming Authority, indicated an
intention to conduct the same, except for any such investigations or reviews
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a material adverse effect on Aztar. Except as set forth in
Section 3.01(j)(2) of the Aztar Disclosure Letter, each of Aztar and its
subsidiaries has obtained and is in compliance with all permits, licenses,
certifications, approvals, registrations, consents, authorizations, franchises,
variances, exemptions and orders issued or granted by a Governmental Authority,
including any Gaming Authority ("Licenses") necessary to conduct its business as
presently conducted, except for any failures to have or to be in compliance with
such Licenses which, individually or in the aggregate, have not had and would
not reasonably be expected to have a material adverse effect on Aztar. The
actions of the applicable Governmental Authorities, including any Gaming
Authority, granting all Licenses have not been reversed, stayed, enjoined,
annulled or suspended, and there is not pending or, to the knowledge of Aztar,
threatened, any application, petition, objection or other pleading with any
Governmental Authority, including any Gaming Authority, which challenges or
questions the validity of or any rights of the holder under any License, except
for any of the foregoing that, individually or in the aggregate, have not had
and would not reasonably be expected to have a material adverse effect on Aztar.
(k) Taxes.
(i) Each of Aztar and its subsidiaries has timely filed, or
has caused to be timely filed on its behalf, all material Tax Returns
(as defined below) required to be filed by it, and all such Tax Returns
are true, complete and accurate in all material respects. All Taxes (as
defined below) shown to be due and owing on such Tax Returns
15
have been timely paid, except for such amounts as would not,
individually or in the aggregate, be material.
(ii) The most recent financial statements contained in the
Aztar Reports delivered to Columbia prior to the date of this Agreement
reflect, in accordance with GAAP, an adequate reserve for all Taxes
payable by Aztar and its subsidiaries for all taxable periods through
the date of such financial statements.
(iii) Except as set forth in Section 3.01(k)(iii) of the Aztar
Disclosure Letter, there is no audit, examination, deficiency, refund
litigation, proposed adjustment or matter in controversy with respect
to any material Taxes or material Tax Return of Aztar or its
subsidiaries; to the knowledge of Aztar, neither Aztar nor any of its
subsidiaries has received written notice of any material claim (not
subsequently withdrawn) made by a governmental authority in a
jurisdiction where Aztar or any of its subsidiaries, as applicable,
does not file a Tax Return, that Aztar or such subsidiary is or may be
subject to income taxation by that jurisdiction; no material deficiency
with respect to any Taxes has been proposed, asserted or assessed
against Aztar or any of its subsidiaries; and no requests for waivers
of the time to assess any material amount Taxes are pending.
(iv) The federal income Tax Returns of Aztar and its
subsidiaries have been examined by and settled with the Internal
Revenue Service ("IRS") (or the applicable statutes of limitation have
lapsed) for all years through 2003. All material assessments for Taxes
due with respect to such completed and settled examinations or any
concluded litigation have been fully paid.
(v) Except as set forth in Section 3.01(k)(v) of the Aztar
Disclosure Letter, there are no outstanding written agreements,
consents or waivers to extend the statutory period of limitations
applicable to the assessment of any material Taxes or deficiencies
against Aztar or any of its subsidiaries, and no power of attorney
granted by either Aztar or any of its subsidiaries with respect to any
material Taxes is currently in force.
(vi) Except as set forth in Section 3.01(k)(vi) of the Aztar
Disclosure Letter, neither Aztar nor any of its subsidiaries is a party
to any agreement providing for the allocation or sharing of any
material amount of Taxes imposed on or with respect to any individual
or other person (other than (I) such agreements with customers,
vendors, lessors or the like entered into in the ordinary course of
business and (II) agreements with or among Aztar or any of its
subsidiaries), and neither Aztar nor any of its subsidiaries (A) has
been a member of an affiliated group (or similar state, local or
foreign filing group) filing a consolidated U.S. federal income Tax
Return (other than the group the common parent of which is Aztar) or
(B) has any liability for the Taxes of any person (other than Aztar or
any of its subsidiaries) (I) under Treasury Regulation ss. 1.1502-6 (or
any similar provision of state, local or foreign law), or (II) as a
transferee or successor.
(vii) There are no material Liens for Taxes (other than for
current Taxes not yet due and payable) on the assets of Aztar and its
subsidiaries.
16
(viii) Neither Aztar nor any subsidiary has distributed stock
of another person, or has had its stock distributed by another person,
in a transaction that was purported or intended to be governed in whole
or in part by Code Section 355.
For purposes of this Agreement:
"Taxes" means any and all federal, state, local, foreign or other taxes
of any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any governmental
authority, including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, unemployment, social
security, workers' compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, ad valorem or value added.
"Tax Return" means any return, report or similar statement (including
the schedules attached thereto) required to be filed with respect to Taxes,
including, without limitation, any information return, claim for refund, amended
return, or declaration of estimated Taxes.
(l) Employee Benefit Plans; ERISA.
(i) For purposes of this Agreement, (x) "Aztar Employee
Benefit Plans" means any material employee compensation and benefit
policies, arrangements or payroll practices including bonus (including
any retention bonus plan), incentive compensation, deferred
compensation, long term incentive, pension, profit sharing, retirement,
supplemental retirement, stock purchase, stock option, stock ownership,
restricted stock, stock appreciation rights, phantom stock, sick leave,
leave of absence, layoff, vacation, day or dependent care, legal
services, cafeteria, life, health, medical, accident, disability,
workmen's compensation or other insurance, salary continuation for
disability, hospitalization, scholarship programs, retiree medical, or
other material benefit plan, agreement, practice, policy, program,
scheme or arrangement of any kind, whether written or oral, including
any "employee benefit plan" within the meaning of Section 3(3) of ERISA
or other material benefit arrangements that are maintained, contributed
to or sponsored by Aztar or any of its subsidiaries for the benefit of
any current or former employee, officer or director of Aztar or any of
its subsidiaries and all "employee pension benefit plans," as defined
in Section 3(2) of ERISA, maintained or contributed to by Aztar or any
ERISA Affiliate or to which Aztar or any of its subsidiaries or any
ERISA Affiliate contributed or is obligated to contribute thereunder
within six years prior to the Closing; and (y) "Aztar Employment
Agreements" means all individual employment, consulting, termination,
separation, severance, change in control, retention, post-employment
and other compensation agreements existing as of the date of this
Agreement, which are between Aztar or any of its subsidiaries and any
current or former director, officer or employee thereof, including the
name of such current or former director, officer or employee.
(ii) (A) All Aztar Employee Benefit Plans are in compliance in
all material respects with all applicable requirements of law,
including ERISA (as defined
17
below) and the Code, (B) each of Aztar and its subsidiaries has
performed all material obligations required to be performed by it under
any Aztar Employee Benefit Plan and is not in any material respect in
default under or in violation of any Aztar Employee Benefit Plan, (C)
no material action, dispute, suit, claim, arbitration or legal,
administrative or other proceeding or governmental action (other than
claims for benefits in the ordinary course) is pending or, to the
knowledge of Aztar, threatened (x) with respect to any Aztar Employee
Benefit Plan by any current or former employee, officer or director of
Aztar or any of its subsidiaries, (y) alleging any breach of the
material terms of any Aztar Employee Benefit Plan or any fiduciary
duties or (z) with respect to any violation of any applicable law with
respect to any such Aztar Employee Benefit Plan, and (D) there does not
now exist any circumstance that would reasonably be expected to result
in any Controlled Group Liability that would be a material liability of
Aztar or any of its subsidiaries following the Closing.
(iii) As used herein:
(A) "Controlled Group Liability" means any and all liabilities
(i) under Title IV of ERISA, (ii) under Section 302 of ERISA, (iii)
under Sections 412 and 4971 of the Code, and (iv) as a result of a
failure to comply with the continuation coverage requirements of
Section 601 et seq. of ERISA and Section 4980B of the Code.
(B) "ERISA" means the Employee Retirement and Income Security
Act of 1974, as amended, and the rules and regulations thereunder;
(C) "ERISA Affiliate" means any trade or business (whether or
not incorporated) under common control with a person or any of its
subsidiaries and which, together with such person or any of its
subsidiaries, is treated as a single employer within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
(iv) Each Aztar Employee Benefit Plan that is intended to be
qualified under Section 401(a) of the Code or Section 401(k) of the
Code has received a favorable determination letter from the IRS that it
is so qualified and each related trust that is intended to be exempt
from federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that it is so exempt and,
to the knowledge of Aztar, no fact or event has occurred since the date
of such determination letter or letters from the Internal Revenue
Service that would reasonably be expected to affect adversely the
qualified status of any such Aztar Employee Benefit Plan or the exempt
status of any such trust.
(v) Neither Aztar nor any of its ERISA Affiliates has
withdrawn in a complete or partial withdrawal from any Aztar Employee
Benefit Plan that is a multiemployer plan (within the meaning of
Section 3(37) or 4001(a)(3) of ERISA) ("Aztar Multiemployer Plan") or
has any unsatisfied material liability arising from a complete or
partial withdrawal, nor has any of them incurred any present or
contingent liability due to the termination or reorganization of any
Aztar Multiemployer Plan, nor are any of them reasonably expected to
incur liability under Section 4063 or 4064 of
ERISA with respect to any such Aztar Multiemployer Plan.
18
(vi) Neither Aztar nor any ERISA Affiliate has any present or
contingent material liability under Title IV of ERISA to the Pension
Benefit Guaranty Corporation or to a trustee appointed under Section
4042 of ERISA, and no events have occurred and no circumstances exist
that would reasonably be expected to result in any such material
liability to Aztar or any ERISA Affiliate.
(vii) There does not now exist any circumstance that would
reasonably be expected to result in material liability to Aztar or any
of its ERISA Affiliates arising from a breach of fiduciary duty in
connection with the Aztar Employee Benefit Plans or a non-exempt
"prohibited transaction" within the meaning of Section 4975 of the Code
or Section 406 of ERISA.
(viii) All contributions, premiums and other payments required
by law or any Aztar Employee Benefit Plan or applicable collective
bargaining agreement have been made under any such plan to any fund,
trust or account established thereunder or in connection therewith by
the due date thereof; and any and all contributions, premiums and other
payments with respect to compensation or service before and through the
Closing Date, or otherwise with respect to periods before and through
the Closing Date, due from any of Aztar or its subsidiaries to, under
or on account of each Aztar Employee Benefit Plan shall have been paid
prior to the Closing Date or shall have been fully reserved and
provided for or accrued on Aztar's financial statements.
(ix) Except as set forth in Section 3.01(l)(ix) of the Aztar
Disclosure Letter, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by this
Agreement, whether alone, or in connection with any other event will
(A) result in the acceleration of the time of payment of or vesting in,
or an increase in the amount of, compensation or benefits due any
current or former employee, director or officer of Aztar or its
subsidiaries (including any equity compensation), (B) result in any
forgiveness of indebtedness or obligation to fund benefits with respect
to any such employee, director or officer or (C) result in any payment
or any entitlement to payment (including, but not limited to, any
retention bonuses, parachute payments or noncompetition payments)
becoming due to any employee or former employee or group of employees
or former employees or to any director or former director or (D) result
in the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code with respect to a current or former employee
of Aztar or any of its subsidiaries. Section 3.01(l)(ix) of the Aztar
Disclosure Letter sets forth a good-faith estimate of the amount of any
estimated severance payment (including estimated gross-up payments, if
applicable) owed under the Aztar Employment Agreements with the five
most highly compensated Company Employees (as defined in Section
5.05(a)) employed at Aztar's corporate headquarters due to the
transactions contemplated by this Agreement and any subsequent
termination of employment.
(m) Material Contracts. Except as set forth in Section 3.01(m) of the
Aztar Disclosure Letter, neither Aztar nor any of its subsidiaries is a party to
or bound by, as of
19
the date hereof, any of the following (whether or not in writing), collectively
with all exhibits and schedules to such Contracts:
(i) any agreement or series of related agreement providing for
the acquisition or disposition of securities of any person or any
assets, in each case involving more than $1,000,000 individually or in
the aggregate, other than in the ordinary course of business consistent
with past practice or in connection with the capital expenditure
budgets included in Section 4.01(a)(xi) of the Aztar Disclosure Letter;
(ii) any Contract that imposes payment, cancellation penalties
or other obligations in connection with the redevelopment or future
operation (other than ordinary course hotel operations) of all or any
portion of Aztar's property, facility or operations in Las Vegas,
Nevada (the "Las Vegas Site");
(iii) any Contract or commitment relating to indebtedness for
borrowed money or the deferred purchase price of property (in either
case, whether incurred, assumed, guaranteed or secured by any asset) in
excess of $1,000,000; and
(iv) any Contract that would be required to be filed as an
exhibit to an Annual Report on Form 10-K pursuant to Item 601(b)(10) of
Regulation S-K under the Securities Act; (the Contracts described in
clauses (i) - (iv), together with all exhibits and schedules to such
Contracts, being the "Material Contracts").
A true and complete copy of each Material Contract has previously been
delivered or made available to Columbia. Except as individually or in the
aggregate has not had and would not reasonably be expected to have a material
adverse effect on Aztar, each Contract by which Aztar or its subsidiaries is
bound is a valid and binding agreement of Aztar or one of its subsidiaries
enforceable against Aztar or one of its subsidiaries, and, to the knowledge of
Aztar, the counterparties thereto in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar Laws relating to or affecting creditors rights
generally and to equitable principles (whether considered in a proceeding at law
or in equity). Aztar and its subsidiaries are not (and to the knowledge of
Aztar, no counterparty 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 or Aztar, would result in a
default under, any Contract to which Aztar 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 have not had and would not
reasonably be expected, individually or in the aggregate, to have a material
adverse effect on Aztar. The execution, delivery and performance of this
Agreement by Aztar do not, and the consummation by Aztar of the Merger and the
compliance by Aztar with the provisions of this Agreement will not, constitute
or result in, with or without notice, lapse of time or both, a material breach
or violation of, a material default under, or the creation of a Lien on any of
the assets of Aztar or any of its subsidiaries pursuant to the Pinnacle
Agreement. Aztar has in all material respects complied with its obligations
under the Pinnacle Agreement, and the Pinnacle Agreement has been terminated in
accordance with the terms thereof.
20
(n) Title to Assets. Except as set forth in Section 3.01(n) of the
Aztar Disclosure Letter, Aztar and each of its subsidiaries has good and valid
title in fee simple to all their owned real property, as reflected in the most
recent balance sheet included in the Audited Financial Statements included in
the Aztar Reports, 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) liens for current taxes, payments of which are not
yet delinquent or are being disputed in good faith, (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, or Aztar's intended use as of the date hereof,
of the property subject thereto or affected thereby, or otherwise materially
impair Aztar's business operations (in the manner presently carried on by Aztar
or intended, as of the date hereof, to be carried on by Aztar), or (iii) for
such matters which have not had and would not reasonably be expected,
individually or in the aggregate, to have a material adverse effect on Aztar.
Aztar and each of its subsidiaries have good and valid leasehold interests in
all real property leased by them. All leases under which Aztar or any of its
subsidiaries leases any real or personal property are in good standing, valid
and effective against Aztar, and to Aztar's knowledge the counterparties
thereto, in accordance with their respective terms, and there is not, under any
of such leases, any existing default by Aztar, or to Aztar's knowledge the
counterparties thereto, or event which with notice or lapse of time or both
would become a default by Aztar or to Aztar's knowledge the counterparties
thereto other than failures to be in good standing, valid and effective and
defaults under such leases which have not had and would not reasonably be
expected, individually or in the aggregate, to have a material adverse effect on
Aztar.
(o) Environmental Matters. Except for matters set forth in Section
3.01(o) of the Aztar Disclosure Letter and such matters as, individually or in
the aggregate, have not had and would not reasonably be expected to result in a
material adverse effect on Aztar: (i) Aztar and its subsidiaries have complied
at all times with all applicable Environmental Laws (as defined below); (ii) no
property currently owned, leased or operated by Aztar or any of its subsidiaries
(including soils, groundwater, surface water, buildings or other structures) is
contaminated with any Hazardous Substance (as defined below) in a manner that is
or would be required to be Remediated or Removed (as such terms are defined
below), that is in violation of any Environmental Law, or that is reasonably
likely to give rise to any Environmental Liability (as defined below); (iii)
Aztar and its subsidiaries have no information that any property formerly owned,
leased or operated by Aztar or any of its subsidiaries was contaminated with any
Hazardous Substance in a manner requiring Remediation or Removal under
applicable Environmental Law, during or prior to such period of ownership,
leasehold, or operation; (iv) neither Aztar nor any of its subsidiaries nor any
prior owner or operator has incurred in the past or is now subject to any
Environmental Liabilities (as defined below); (v) neither Aztar nor any of its
subsidiaries has received any notice, demand, letter, claim or request for
information alleging that Aztar or any of its subsidiaries may be in violation
of or subject to liability under any Environmental Law; (vi) neither Aztar nor
any of its subsidiaries is subject to any order, decree, injunction or agreement
with any Governmental Authority, or any
21
indemnity or other agreement with any third party, concerning liability or
obligations relating to any Environmental Law or otherwise relating to any
Hazardous Substance or any environmental, health or safety matter; and (vii) to
the knowledge of Aztar, there are no other circumstances or conditions involving
Aztar or any of its subsidiaries that would reasonably be expected to result in
any Environmental Liability.
(A) As used herein, the term "Environmental Laws" means all
Laws (including any common law) relating to: (A) the protection,
investigation or restoration of the environment, health, safety, or
natural resources, (B) the handling, use, presence, disposal,
Release or threatened release of any Hazardous Substance or (C)
noise, odor, indoor air, employee exposure, electromagnetic fields,
wetlands, pollution, contamination or any injury or threat of
injury to persons or property relating to any Hazardous Substance.
(B) As used herein, the term "Environmental Liability" means
any obligations or liabilities (including any notices, claims,
complaints, suits or other assertions of obligations or
liabilities) that are: (A) related to environment, health or safety
issues (including on-site or off-site contamination by Hazardous
Substances of surface or subsurface soil or water, and occupational
safety and health); and (B) based upon (I) any provision of
Environmental Laws or (II) any order, consent, decree, writ,
injunction or judgment issued or otherwise imposed by any
Governmental Authority. The term "Environmental Liabilities"
includes, without limitation: (A) fines, penalties, judgments,
awards, settlements, losses, damages (including consequential
damages), costs, fees (including attorneys' and consultants' fees),
expenses and disbursements relating to environmental, health or
safety matters; (B) defense and other responses to any
administrative or judicial action (including notices, claims,
complaints, suits and other assertions of liability) relating to
environmental, health or safety matters; and (C) financial
responsibility for (x) cleanup costs and injunctive relief,
including any Removal, Remedial or Response actions, and natural
resource damages, and (y) other Environmental Laws compliance or
remedial measures.
(C) As used herein, the term "Hazardous Substance" means any
"hazardous substance" and any "pollutant or contaminant" as those
terms are defined in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"); any
"hazardous waste" as that term is defined in the Resource
Conservation and Recovery Act ("RCRA"); and any "hazardous
material" as that term is defined in the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.), as amended
(including as those terms are further defined, construed, or
otherwise used in rules, regulations, standards, orders,
guidelines, directives, and publications issued pursuant to, or
otherwise in implementation of, said Laws); and including, without
limitation, any petroleum product or byproduct, solvent, flammable
or explosive material, radioactive material, asbestos, lead paint,
polychlorinated biphenyls (or PCBs), dioxins, dibenzofurans, heavy
metals, radon gas, toxic mold and mycotoxins.
22
(D) As used herein, the term "Release" means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, placing, discarding,
abandonment, or disposing into the environment (including the
placing, discarding or abandonment of any barrel, container or
other receptacle containing any Hazardous Substance or other
material).
(E) As used herein, the term "Removal, Remedial or Response"
actions include the types of activities covered by CERCLA, RCRA,
and other comparable Environmental Laws, and whether such
activities are those which might be taken by a Governmental
Authority or those which a Governmental Authority or any other
person might seek to require of waste generators, handlers,
distributors, processors, users, storers, treaters, owners,
operators, transporters, recyclers, reusers, disposers, or other
persons under "removal," "remedial," or other "response" actions.
(p) Vote Required. The affirmative vote of the holders of record of at
least a majority of the outstanding shares of Aztar Common Stock and Aztar
Preferred Stock, voting together as a single class, with respect to the adoption
of this Agreement (the "Stockholder Approval"), is the only vote of the holders
of any class or series of the capital stock of Aztar or its subsidiaries
required to approve this Agreement, the Merger and the other transactions
contemplated hereby. No "fair price", "merger moratorium", "control share
acquisition", or other anti-takeover or similar statute or regulation applies or
purports to apply to this Agreement, the Merger or the other transactions
contemplated hereby, except for those which have been made not applicable to
this Agreement, the Merger and the other transactions contemplated hereby by
valid action of the Board of Directors of Aztar prior to the execution and
delivery hereof. Prior to the execution and delivery hereof, the Board of
Directors of Aztar has taken all action necessary to assure that (x) the Rights
Agreement, dated as of December 14, 1999, as amended, between Aztar and Mellon
Investor Services LLC (as successor to ChaseMellon Shareholder Services,
L.L.C.), as Rights Agent (the "Rights Agreement") exempts Columbia and its
affiliates and associates (as defined therein) from the operation of the
provisions of the Rights Agreement, (y) none of Columbia, or its affiliates or
associates are or will become an Acquiring Person (as defined in the Rights
Agreement) as a result of the execution, delivery and performance of this
Agreement and (z) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby are exempt from the
provisions thereof. Aztar has taken such action as is necessary so that this
Agreement is not subject to the provisions of Article Ninth of its Restated
Certificate of Incorporation, as amended.
(q) Labor and Employment Matters.
(i) Except as set forth on Section 3.01(q)(i) of the Aztar
Disclosure Letter, neither Aztar nor any its subsidiaries is a party to
any material collective bargaining agreement or other current labor
agreement with any labor union or organization nor does Aztar or any of
its subsidiaries have any knowledge of any activity or proceeding of
any labor organization (or representative thereof) or employee group
(or representative thereof) to organize any such employees.
23
(ii) There is no material unfair labor practice charge or
grievance arising out of a collective bargaining agreement or other
grievance procedure pending, or, to the knowledge of Aztar, threatened
against Aztar or any of its subsidiaries.
(iii) Except as set forth on Section 3.01(q)(iii) of the Aztar
Disclosure Letter, there is no material complaint, lawsuit or
proceeding in any forum by or on behalf of any present or former
employee, any applicant for employment or any classes of the foregoing,
alleging breach of any express or implied contract of employment, any
law or regulation governing employment or the termination thereof or
discriminatory, wrongful or tortious conduct in connection with the
employment relationship pending, or, to the knowledge of Aztar,
threatened against Aztar or any of its subsidiaries. There is no
strike, slowdown, work stoppage or lockout pending, or, to the
knowledge of Aztar, threatened, against or involving Aztar or any of
its subsidiaries. Aztar and each of its subsidiaries are in compliance
in all material respects with all applicable laws in respect of
employment and employment practices, terms and conditions of
employment, wages, hours of work and occupational safety and health.
(r) Insurance. Except for failures to maintain insurance or
self-insurance that, individually or in the aggregate, have not had and would
not reasonably be expected to have a material adverse effect on Aztar, since
December 31, 2002, each of Aztar and its subsidiaries has been continuously
insured with financially responsible insurers or has self-insured, in each case,
except as set forth on Section 3.01(r) of the Aztar Disclosure Letter, in such
amounts and with respect to such risks and losses as Aztar in its good faith
judgment believes are reasonable and adequate for companies conducting the
business conducted by Aztar and its subsidiaries. Neither Aztar nor any of its
subsidiaries has received any notice of cancellation or termination or denial of
coverage with respect to any insurance policy of Aztar or any of its
subsidiaries in effect as of the date hereof (or under which Aztar has any
pending claims), except as set forth on Section 3.01(r) of the Aztar Disclosure
Letter and except with respect to any cancellation or termination that,
individually or in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on Aztar.
(s) Brokers and Finders. Neither Aztar nor any of its subsidiaries nor
any other person has employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finders, fees in connection with the Merger
or the other transactions contemplated in this Agreement, in each case for which
Aztar or any of its subsidiaries will be liable, except that Aztar has employed
Xxxxxxx, Xxxxx & Co., and a true and complete copy of the engagement letter with
such financial advisor has been provided or made available to Columbia prior to
the date hereof.
Section 3.02 Representations and Warranties of Sussex and Columbia .
Except as and to the extent set forth in the letter dated the date of this
Agreement and delivered to Aztar by Columbia concurrently with the execution and
delivery of this Agreement (the "Columbia Disclosure Letter"), Sussex and
Columbia jointly and severally represent and warrant to Aztar as follows:
24
(a) Financing Commitments. Columbia has obtained written commitments
(the "Financing Commitments") for the financing necessary to consummate the
Merger and the other transactions contemplated hereby (including any refinancing
of indebtedness of Aztar or Columbia or any of their respective subsidiaries
which Columbia deems is advisable to refinance in connection with the
consummation of the Merger and the other transactions contemplated hereby) and
to pay all associated fees, costs and expenses (the "Financing"). Columbia has
provided true, accurate and complete copies of such commitments to Aztar. None
of the Financing Commitments has been amended, modified or terminated prior to
the date of this Agreement, and the respective commitments contained in the
Financing Commitments have not been withdrawn or rescinded in any respect. As of
the date hereof, the Financing Commitments are in full force and effect and
(based on and assuming the accuracy of the representations and warranties of
Aztar in this Agreement and the compliance by Aztar with its obligations
hereunder) no event has occurred which, with or without notice, lapse of time
(other than the expiration of the term thereof) or both, would constitute a
default on the part of Columbia under any of the Financing Commitments. There
are no conditions precedent or other contingencies related to the funding of the
full amount of the Financing, other than as set forth in or contemplated by the
Financing Commitments. The aggregate proceeds to be disbursed pursuant to the
agreements contemplated by the Financing Commitments, together with Columbia's
and Aztar's cash and cash equivalents, will be sufficient for Columbia to pay
the aggregate Merger Consideration and to consummate the Consent/Tender Offers
(as defined in Section 4.01(c)), if any (and any other repayment or refinancing
of debt contemplated in this Agreement or the Financing Commitments), and to pay
all related fees and expenses. Based on and assuming the accuracy of the
representations and warranties of Aztar in this Agreement and the compliance by
Aztar with its obligations hereunder, Columbia has no reason as of the date
hereof to believe that any of the conditions to the Financing contemplated by
the Financing Commitments will not be satisfied or that the Financing will not
be made available to Columbia on or prior to the Closing Date. Nothing in this
Agreement shall prevent Columbia from amending or modifying the Financing
Commitments or from seeking to raise equity or other alternative sources of
funds prior to the Closing, as long as such amendment or modification or other
action does not prevent, delay or reduce the likelihood of the consummation of
the Merger.
(b) Solvency. As of the Effective Time and after giving effect to all
of the transactions contemplated by this Agreement, including the payment of the
aggregate Merger Consideration, the Financing, consummation of the
Consent/Tender Offers, if any (and any other repayment or refinancing of debt
contemplated in this Agreement or the Financing Commitments), and payment of all
related fees and expenses, and assuming the accuracy of the representations and
warranties of Aztar in this Agreement and the compliance by Aztar with its
obligations hereunder, the Surviving Corporation (on a combined basis with its
subsidiaries) will be solvent (as defined in Section 8.03).
(c) Organization. Each of Sussex, Columbia and their respective
subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has full power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its assets and properties, except for such failures to be so organized,
existing and in good standing or to have such power and authority that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a material
25
adverse effect (as defined in Section 8.03) on Sussex and Columbia, taken as a
whole. Each of Sussex, Columbia and their respective subsidiaries is duly
qualified, licensed or admitted to do business and is in good standing in each
jurisdiction in which the ownership, use or leasing of its assets and
properties, or the conduct or nature of its business, makes such qualification,
licensing or admission necessary, except for such failures to be so qualified,
licensed or admitted and in good standing that, individually or in the
aggregate, have not had and would not reasonably be expected to have a material
adverse effect on Sussex and Columbia, taken as a whole.
(d) Authority. Each of Sussex, Columbia and Merger Sub has full
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by each of Sussex,
Columbia and Merger Sub and the consummation by each of Sussex, Columbia and
Merger Sub of the transactions contemplated hereby have been duly and validly
unanimously adopted and approved by the Board of Directors of each of Sussex,
Columbia and Merger Sub and by Columbia as the sole shareholder of Merger Sub.
No other corporate proceedings on the part of any of Sussex, Columbia, Merger
Sub or their stockholders are necessary to authorize the execution, delivery and
performance of this Agreement by any of Sussex, Columbia or Merger Sub and the
consummation by any of Sussex, Columbia and Merger Sub of the Merger and the
other transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Sussex, Columbia and Merger Sub and
constitutes a legal, valid and binding obligation of each of Sussex, Columbia
and Merger Sub enforceable against each of Sussex, Columbia and Merger Sub in
accordance with its terms.
(e) No Conflicts; Approvals and Consents.
(i) Other than the notices, reports, filings, consents,
registrations, declarations, approvals, permits or authorizations (A)
required by the Secretary of the State of Delaware as contemplated
hereby; (B) required under the HSR Act; and (C) by, with, to or from
any Gaming Authority with jurisdiction over any of Aztar's, Sussex's or
Columbia's gaming operations required under any Gaming Law applicable
to Sussex or Columbia, including those set forth in Section
3.02(e)(i)(C) of the Columbia Disclosure Letter (collectively, the
"Columbia Required Gaming Approvals" and together with the Aztar
Required Gaming Approvals, the "Required Gaming Approvals"), no
notices, declarations, reports or other filings are required to be made
by Sussex or Columbia with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Sussex
or Columbia or any of their respective subsidiaries from, any
Governmental Authority in connection with the execution, delivery and
performance of this Agreement by Sussex or Columbia and the
consummation by Sussex or Columbia of the Merger and the other
transactions contemplated hereby, including the Financing, or in
connection with the continuing operation of the business of Sussex and
Columbia and their respective subsidiaries following the Effective
Time, except those that the failure to make or obtain, individually or
in the aggregate, have not had and would not reasonably be expected to
have a material adverse effect on Sussex and Columbia, taken as a
whole.
(ii) The execution, delivery and performance of this Agreement
and the Custody and Security Agreement by each of Sussex and Columbia
does not, and the consummation by each of Sussex and Columbia of the
Merger and the other transactions
26
contemplated hereby and thereby, including the Financing, will not,
constitute or result in (A) a breach or violation of, or a default
under, the articles of incorporation, by-laws or any equivalent
organizational documents of Sussex or Columbia or the comparable
governing documents of any of their respective subsidiaries; (B) with
or without notice, lapse of time or both, a breach or violation of, a
termination (or right of termination) or default under, the creation or
acceleration of any obligations under or the creation of a Lien on any
of the assets of Sussex or Columbia or any of their respective
subsidiaries pursuant to any Contract binding upon Sussex or Columbia
or any of their respective subsidiaries or, assuming (solely with
respect to performance of this Agreement and consummation by Sussex and
Columbia of the Merger and the other transactions contemplated hereby)
compliance with the matters referred to in Section 3.02(e)(i), any Law
or governmental or non-governmental permit or license to which Sussex
or Columbia or any of their respective subsidiaries is subject; or (C)
any change in the rights or obligations of any party under any Contract
binding upon Sussex or Columbia or any of their respective subsidiaries
(including, without limitation, any change in pricing, term, put or
call rights, rights of first offer, rights of first refusal, tag-along
or drag-along rights or any similar rights or obligations which may be
exercised in connection with the Merger and the other transactions
contemplated hereby), except in the case of clause (B) and (C) as
individually or in the aggregate, have not had and would not reasonably
be expected to have a material adverse effect on Sussex and Columbia,
taken as a whole.
(f) Financial Statements.
(i) Each of Sussex and Columbia has made available to Aztar
its consolidated balance sheets, consolidated statements of income,
changes in shareholders' equity and cash flows as of and for the years
ended December 31, 2005, 2004, 2003, and 2002, as audited by its
independent certified public accountants, and its unaudited
consolidated balance sheet and consolidated statement of income as of
and for the period ended March 31, 2006, and within forty-five (45)
days after the end of each calendar quarter thereafter, each of Sussex
and Columbia shall furnish to Aztar its unaudited consolidated balance
sheet, consolidated statement of income, a listing of any equity issued
or repurchased during the calendar quarter, a listing of any borrowings
and repayment of borrowings during the calendar quarter and a listing
of capital expenditures (including acquisition of assets) (all of the
foregoing collectively, the "Columbia Financial Statements"). Each of
the consolidated balance sheets included in the Columbia Financial
Statements (including the related notes and schedules) fairly presents,
or, in the case of the Columbia Financial Statements furnished after
the date hereof, will fairly present in all material respects the
consolidated financial position of each of Sussex and Columbia and
their respective subsidiaries as of its date, and each of the
consolidated statements of income, changes in shareholders' equity and
cash flows included in the Columbia Financial Statements (including any
related notes and schedules) fairly presents or in the case of the
Columbia Financial Statements furnished after the date hereof, will
fairly present in all material respects the net income, total
shareholders' equity and net increase (decrease) in cash and cash
equivalents, as the case may be, of each of Sussex and Columbia and
their respective subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to the absence of notes
and
27
normal year-end audit adjustments that will not be material in amount
or effect), in each case in accordance with GAAP consistently applied
during the periods involved, except as may be noted therein. All of the
assets and businesses reflected on the consolidated balance sheets of
Sussex and the combined balance sheets of Columbia, each as of March
31, 2006 and each of which forms a part of the Columbia Financial
Statements, are owned by Sussex, Columbia or a wholly-owned subsidiary
of Sussex or Columbia, other than assets disposed of in the ordinary
course of business since such date which are not material,
individually, or in the aggregate, and other than as described in
Section 3.02(f)(i) of the Columbia Disclosure Letter.
(ii) All filings (other than immaterial filings) required to
be made by each of Sussex or Columbia or their respective subsidiaries
since December 31, 2002 under any applicable state laws and regulations
relating to gaming or similar matters, have been filed with the
applicable Governmental Authorities, including all forms, statements,
reports, agreements (oral or written) and all documents, exhibits,
amendments and supplements appertaining thereto so required to be
filed, and all such filings complied, as of their respective dates,
with all applicable requirements of the applicable statute and the
rules and regulations thereunder, except for filings the failure of
which to make or the failure of which to make in compliance with all
applicable requirements of the applicable statute and the rules and
regulations thereunder, individually or in the aggregate, have not had
and would not reasonably be expected to have a material adverse effect
on Sussex and Columbia, taken as a whole.
(g) Debt, Distributions, etc. As of March 31, 2006, each of Sussex and
Columbia and each of such parties' respective subsidiaries had in the aggregate
debt as set forth in Section 3.02(g) of the Columbia Disclosure Letter, and from
March 31, 2006 through the date hereof, neither Columbia nor Sussex has incurred
additional debt in excess of the amount set forth in Section 3.02(g) of the
Columbia Disclosure Letter. Except as set forth in Section 3.02(g) of the
Columbia Disclosure Letter, since December 31, 2005, neither Sussex nor Columbia
has (i) declared, set aside or paid any dividend or distribution (whether in
cash, stock or property or any combination thereof) or (ii) made any loans,
advances or capital contributions to, or investments in, any affiliate.
(h) Absence of Certain Changes or Events. Since December 31, 2005 and
prior to the date hereof, there has not been any material adverse effect on
Sussex and Columbia, taken as a whole, or any change, event or development that,
individually or in the aggregate, has had or would reasonably be expected to
have a material adverse effect on Sussex and Columbia, taken as a whole. Since
December 31, 2005 and prior to the date hereof, each of Sussex and Columbia and
their respective subsidiaries have conducted their respective businesses in all
material respects only in, and have not engaged in any material transaction
other than in accordance with, the ordinary course of such businesses.
(i) Permits; Compliance with Laws and Orders. The businesses of each of
Sussex and Columbia and their respective subsidiaries have not been conducted in
violation of any Laws, except for such violations that, individually or in the
aggregate, have not had and would not reasonably be expected to have a material
adverse effect on Sussex and Columbia, taken as a whole. No investigation,
review, proceeding, notice of violation, order of forfeiture or
28
complaint by any Governmental Authority, including any Gaming Authority, with
respect to any of Sussex or Columbia or their respective subsidiaries is pending
or, to the knowledge of any of Sussex or Columbia, threatened, nor has any
Governmental Authority, including any Gaming Authority, indicated an intention
to conduct the same, except for any such investigations or reviews that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a material adverse effect on Sussex and Columbia, taken as a
whole. Each of Sussex and Columbia and their respective subsidiaries has
obtained and is in compliance with all Licenses necessary to conduct its
business as presently conducted, except for any failures to have or to be in
compliance with such Licenses which, individually or in the aggregate, have not
had and would not reasonably be expected to have a material adverse effect on
Sussex and Columbia, taken as a whole. The actions of the applicable
Governmental Authorities, including any Gaming Authority, granting all Licenses
have not been reversed, stayed, enjoined, annulled or suspended, and there is
not pending or, to the knowledge of any of Sussex and Columbia, threatened in
writing, any application, petition, objection or other pleading with any
Governmental Authority, including any Gaming Authority, which challenges or
questions the validity of or any rights of the holder under any License, except
for any of the foregoing that, individually or in the aggregate, have not had
and would not reasonably be expected to have a material adverse effect on Sussex
and Columbia, taken as a whole. Except as set forth in Section 3.02(i) of the
Columbia Disclosure Letter, since January 1, 2004, no inquiries regarding, or
investigations of, Sussex or Columbia have been conducted by any Gaming
Authority. As of the date of this Agreement, no inquiries or investigations of
Sussex or Columbia are pending, or to the knowledge of Sussex or Columbia,
threatened by any Gaming Authority.
(j) Legal Proceedings; Litigation and Liabilities. There are no (A)
civil, criminal or administrative actions, suits, claims, hearings,
arbitrations, investigations or proceedings pending or, to the knowledge of any
of Sussex or Columbia, threatened against any of Sussex or Columbia or any of
its subsidiaries or affiliates or (B) litigations, arbitrations, investigations
or other proceedings, or injunctions or final judgments relating thereto,
pending or, to the knowledge of any of Sussex or Columbia, threatened against
any of Sussex or Columbia or any of its subsidiaries or affiliates before any
Governmental Authority, including any Gaming Authority, except in the case of
either clause (A) or (B), for those that, individually or in the aggregate, have
not had and would not reasonably be expected to have a material adverse effect
on Sussex and Columbia, taken as a whole. None of Sussex or Columbia or any of
their respective subsidiaries or affiliates is a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of any
Governmental Authority, including any Gaming Authority, which, individually or
in the aggregate, have had or would reasonably be expected to have a material
adverse effect on Sussex and Columbia, taken as a whole.
(k) Receipt of Licenses. As of the date hereof, to the knowledge of any
of Sussex or Columbia, there is neither any state of facts, nor has there been
any indication from any Gaming Authority of any state of facts or circumstances,
that would be reasonably likely to delay or prevent the receipt by Columbia of a
new gaming license in a jurisdiction in which Columbia is not currently licensed
which Columbia is required to obtain in connection with the consummation of the
transactions contemplated hereby.
29
(l) Ownership and Operations of Sussex and Columbia. The record and
beneficial ownership of all outstanding shares of capital stock or ownership
interests of each of Sussex and Columbia is set forth on Section 3.02(l) of the
Columbia Disclosure Letter.
(m) Ownership and Operations of Merger Sub; Organizational Structure.
Columbia owns of record and beneficially owns all outstanding shares of capital
stock of Merger Sub. Merger Sub has engaged in no other business or other
activities or incurred any liabilities, other than in connection with the
transactions contemplated hereby. Prior to the date hereof, Columbia has
provided to Aztar or its representatives true and correct copies of the
organizational structure of each of Sussex and Columbia.
(n) Brokers and Finders. None of Sussex nor Columbia nor any of their
respective subsidiaries has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders, fees in connection
with the Merger or the other transactions contemplated in this Agreement, in
each case for which Aztar or any of its subsidiaries will be liable. Columbia
has employed Banc of America Securities LLC and Libra Securities, LLC as its
financial advisors in connection with the transactions contemplated by this
Agreement.
ARTICLE IV
Covenants
Section 4.01 Covenants of Aztar Interim Operations. (a) Aztar covenants
and agrees as to itself and its subsidiaries that, after the date hereof and
prior to the Effective Time, unless Columbia shall otherwise approve in writing
and except as otherwise expressly contemplated by this Agreement or as required
by applicable Laws, the business of it and its subsidiaries shall be conducted
in all material respects in the ordinary and usual course and, to the extent
consistent therewith, it and its subsidiaries shall use their respective
reasonable best efforts to substantially preserve their business organizations
intact and maintain existing relations and goodwill with Governmental
Authorities, customers, suppliers, distributors, creditors, lessors, employees
and business associates and keep available the services of the present employees
and agents of Aztar and its subsidiaries in all material respects. In
furtherance of the foregoing, Aztar agrees to resume and continue the taking of
reservations at its Las Vegas, Nevada hotel and to pursue ordinary course
marketing activities in connection with such facility as promptly as
practicable. Without limiting the generality of the foregoing and in furtherance
thereof, from the date of this Agreement until the Effective Time, subject to
applicable Law, except (A) as otherwise expressly required by this Agreement,
(B) as Columbia may approve in writing or (C) as set forth in the applicable
subsection of Section 4.01(a) of the Aztar Disclosure Letter, Aztar will not and
will not permit its subsidiaries to:
(i) adopt or propose any change in its certificate of
incorporation or by-laws or other applicable governing instruments or
amend any term of the shares of Aztar Common Stock or Aztar Preferred
Stock;
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(ii) merge or consolidate Aztar or any of its subsidiaries
with any other person;
(iii) acquire assets outside of the ordinary course of
business from any other person with a value or purchase price in excess
of $1,000,000 in the aggregate, other than acquisitions set forth in
Section 4.01(a)(iii) of the Aztar Disclosure Letter, and other than
capital expenditures as set forth in Section 4.01(a)(xi) of the Aztar
Disclosure Letter;
(iv) other than in connection with Aztar's application for a
gaming license in Allentown, Pennsylvania, (i) enter into any material
line of business in any geographic area other than the current lines of
business of Aztar or any of its subsidiaries, and in the geographic
areas where they are currently conducted, as of the date hereof or (ii)
engage in the conduct of any business in any new jurisdiction which
would require the receipt of any additional Governmental Consent (as
defined in Section 5.03(f)) in connection with the consummation of the
Merger and the transactions contemplated hereby;
(v) other than upon exercise of Aztar Employee Stock Options
or conversion of Aztar Preferred Stock, issue, sell, pledge, dispose
of, grant, transfer, lease, license, guarantee, encumber, or authorize
the issuance, sale, pledge, disposition, grant, transfer, lease,
license, guarantee or encumbrance of, any shares of capital stock of
Aztar or any its subsidiaries, or securities convertible or
exchangeable into or exercisable for any shares of such capital stock,
or any options, warrants, conversion rights, stock appreciation rights,
redemption rights, repurchase rights, agreements, arrangements, calls,
commitments or other rights of any kind to acquire any shares of such
capital stock or such convertible or exchangeable securities;
(vi) other than as required in accordance with the terms of
Aztar's credit facility as in effect on the date hereof, create or
incur any Lien (other than mechanics', warehousemen's or similar Liens
incurred in accordance with Law in connection with construction
projects in New Jersey and Indiana and routine maintenance, in each
case, permitted by this Section 4.01 for amounts not past due) on any
assets of Aztar or any of its subsidiaries;
(vii) make any loans, advances or capital contributions to or
investments in any person, other than (a) loans, advances, capital
contributions or investments not in excess of $750,000 in the
aggregate, (b) loans, advances, capital contributions or investments
pursuant to commitments set forth on Section 4.01(a)(vii) of the Aztar
Disclosure Letter or (c) intercompany loans and advances to
wholly-owned subsidiaries in the ordinary course of business consistent
with past practice;
(viii) other than for regular cash dividends on the Aztar
Preferred Stock at the times and in the amounts required by the terms
thereof, declare, set aside or pay any dividend or distribution
(whether in cash, stock or property or any combination thereof) on (i)
any shares of Aztar Common Stock or (ii) any shares of capital stock of
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any subsidiary (other than wholly owned subsidiaries and pro rata
dividends payable to holders of interests in non wholly owned
subsidiaries);
(ix) reclassify, split, combine, subdivide or repurchase,
redeem or otherwise acquire, directly or indirectly, any of its capital
stock or securities convertible or exchangeable into or exercisable for
any shares of its capital stock, except for required redemptions of
Aztar Preferred Stock in the ordinary course of business;
(x) incur, redeem or repurchase any indebtedness for borrowed
money or guarantee such indebtedness of another person, or issue or
sell any debt securities or warrants or other rights to acquire any
debt security of Aztar or any of its subsidiaries, except for the
incurrence of indebtedness for borrowed money incurred under Aztar's
existing revolving credit facility in the ordinary course of business
as long as the aggregate amount outstanding under Aztar's existing
revolving credit facility does not exceed $175 million at any time, and
except for the incurrence of indebtedness for borrowed money in
replacement of existing indebtedness upon maturity thereof for borrowed
money on customary commercial terms;
(xi) without the consent of Columbia (such consent not to be
unreasonably withheld or delayed in connection with maintenance and
similar capital expenditures) and except for capital expenditures as
set forth in Section 4.01(a)(xi) of the Aztar Disclosure Letter, make
or authorize any capital expenditure;
(xii) enter into any commitment or Contract with respect to
the redevelopment or future operation of the Las Vegas Site (other than
ordinary course hotel operation); provided, however, that Aztar shall
be permitted to continue design work that is in progress and
substantially complete as of the date of this Agreement in connection
with the redevelopment of the Las Vegas Site in the ordinary course of
business consistent with past practice, the cost of which design work
shall not exceed $2.5 million after the date hereof;
(xiii) except as expressly permitted by Section 4.01(a)(xix),
enter into any Covered Contract (as defined in Section 8.03) other than
in the ordinary course of business consistent with past practice after
consultation with Columbia;
(xiv) make any changes with respect to accounting policies or
procedures, except as required by changes in GAAP or by applicable Law
or except as Aztar, based upon the advice of its independent auditors
after prior notice to Columbia, determines in good faith is advisable
to conform to best accounting practices;
(xv) settle any litigation or other proceedings for an amount
to be paid by Aztar or any of its subsidiaries in excess of $2,000,000
or which would be reasonably likely to have any material adverse impact
on the operations of Aztar or any of its subsidiaries;
(xvi) (i) except as expressly permitted by Section 4.01(xix),
amend or modify in any material respect, or terminate or waive any
material right or benefit under,
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any Covered Contract, other than in the ordinary course of business
consistent with past practice after consultation with Columbia, or (ii)
cancel, modify in any material respect or waive any debts or claims
held by it or waive any rights having in each case a value in excess of
$1,000,000;
(xvii) except as required by Law, make any material Tax
election or take any material position on any Tax Return filed on or
after the date of this Agreement or adopt any method therefor that is
inconsistent with elections made, positions taken or methods used in
preparing or filing similar Tax Returns in prior periods;
(xviii) sell, lease, license or otherwise dispose of any
assets of Aztar or its subsidiaries except (i) in the ordinary course
of business or obsolete assets or (ii) except as set forth on Section
4.01(a)(xviii) of the Aztar Disclosure Letter, sales, leases, licenses
or other dispositions of assets with a fair market value not in excess
of $1,000,000 in respect of any one asset and not in excess of
$10,000,000 in the aggregate;
(xix) except as set forth in Section 4.01(a)(xix) of the Aztar
Disclosure Letter, required pursuant to existing written, binding
agreements in effect prior to the date of this Agreement or as
otherwise required by applicable Law, including without limitation as
may be required to comply with Section 409A of the Code (provided that
any such changes shall be done in a manner as to not materially
increase the present value of any payments), (A) enter into any
commitment to provide any severance or termination benefits to (or
amend any existing arrangement with) any director, officer, consultant
or employee of Aztar or any of its subsidiaries, (B) increase the
compensation or benefits payable or to become payable to the directors,
officers, consultants or employees of Aztar or any of its subsidiaries
other than in the ordinary course of business consistent with past
practice with respect to base pay for non-officer employees, (C)
establish, adopt, enter into or amend or terminate (except for
technical amendments in the ordinary course of business consistent with
past practice, provided that such amendments do not increase the cost
of such arrangements to Aztar) any collective bargaining agreement,
Aztar Employee Stock Plan, Aztar Employee Benefit Plan or Aztar
Employment Agreement (or any such agreement, plan or arrangement which
would otherwise be considered a Aztar Employee Stock Plan, Aztar
Employee Benefit Plan or Aztar Employment Agreement if established,
adopted or entered into after the date hereof), (D) grant or, if the
Closing occurs during 2006, accelerate the vesting of any awards under
any Aztar Employee Stock Plan, Aztar Employee Benefit Plan or Aztar
Employment Agreement, (E) take any action to fund or in any other way
secure the payment of compensation or benefits under any Aztar Employee
Benefit Plan or Aztar Employment Agreement, (F) materially change any
actuarial or other assumptions used to calculate funding obligations
with respect to any Aztar Employee Benefit Plan or change the manner in
which contributions to such plans are made or the basis on which such
contributions are determined, except as may be required by GAAP, (G)
amend the terms of any outstanding equity-based award, (H) if the
Closing occurs during 2006, exercise any discretion to cash out any
benefits or awards, (I) make any material determinations not in the
ordinary course of business consistent with past practice under any
collective bargaining agreement, Aztar Employee Stock Plan, Aztar
Employment
33
Agreement or Aztar Employee Benefit Plan, (J) grant or promise any tax
offset payment award under any Aztar Employee Stock Plan or (K) make
any loan or cash advance to any current or former director, officer,
employee, consultant or independent contractor; or
(xx) agree or commit to do any of the foregoing.
(b) Prior to the Closing, subject to applicable Law, Aztar agrees to
provide, and shall cause its subsidiaries to provide, and Aztar and its
subsidiaries shall use their reasonable best efforts to cause their respective
officers, employees, representatives and advisors, including legal advisors and
accountants, to provide, to Columbia all cooperation reasonably requested by
Columbia that is necessary or advisable in connection with the arrangement of
the Financing or any equity Financing in lieu thereof in whole or in part, in
each case as may reasonably be requested by Columbia, including, without
limitation, (i) upon reasonable advance notice, participation in meetings,
drafting sessions, due diligence sessions, management presentation sessions,
road shows and sessions with rating agencies, (ii) providing reasonable
assistance with the preparation of materials for rating agency presentations,
business projections and financial statements (including those required by the
SEC), (iii) providing reasonable assistance to Columbia in preparing offering
memoranda, private placement memoranda, prospectuses and similar documents, (iv)
furnishing Columbia and its financing sources with financial and other pertinent
information regarding Aztar and its subsidiaries as may reasonably be requested
by therewith, including all financial statements and financial data of the type
required by Regulation S-X and Regulation S-K under the Securities Act and of
the type and form customarily included in private placements under Rule 144A or
public offerings under the Securities Act, to consummate the offering of debt
securities contemplated by the Financing Commitments (as defined in Section
4.02(b)) or other financing at the time during Aztar's fiscal year such
offerings will be made, (v) using reasonable best efforts to obtain accountants'
comfort letters, legal opinions, officers' certificates, surveys and title
insurance as may be reasonably requested by Columbia; provided, that Aztar's
officers shall only be required to deliver certificates and opinions to the
extent relating to Aztar or its subsidiaries on a stand-alone basis without
giving effect to the Merger or Columbia's post-Closing plans or any post-Closing
projections, (vi) obtaining any necessary rating agencies' confirmations or
approvals for Columbia's financing as may be reasonably requested by Columbia
and (vii) reasonably facilitating the pledge of collateral, including taking any
actions and executing any documents reasonably requested by Columbia in
connection therewith, in each case to become effective at the Closing. Aztar
will use its reasonable best efforts to provide to Columbia and its financing
sources as promptly as practicable (but in no event later than the time periods,
if any, specified in Exhibit E to the Financing Commitments), with the audited,
unaudited and pro forma and other financial information or data that are
required as a condition to the Financing, in each case prepared in accordance
with the standards set forth in such Exhibit E or that are required in
connection with any equity offering and will use its reasonable best efforts to
take all other actions required to be taken by Aztar under the Financing
Commitments if reasonably required to obtain the Financing. Aztar shall cause
its officers, in their capacity as officers, to deliver such customary
management representation letters as the accountants may require in connection
with any comfort letters or similar documents as may be required in connection
with the Financing. Notwithstanding anything to the contrary in this Agreement,
Aztar shall not be required to execute and deliver any commitment letters,
underwriting or placement agreements, pledge and security documents, or other
definitive financing documents in connection with the Financing.
34
(c) Without limiting the foregoing, at the request of Columbia, prior
to the Effective Time, Aztar shall use its reasonable best efforts to cooperate
with Columbia in obtaining any consents or waivers to, and in respect of, any of
its indebtedness, provided that Aztar shall not be required to permit any of the
foregoing to become effective prior to the Effective Time. At the request of
Columbia, Aztar shall, and shall cause its subsidiaries to, use its reasonable
best efforts to commence consent solicitations or issuer tender or exchange
offers with respect to their respective indebtedness as and at the times that
Columbia shall request ("Consent/Tender Offers") in each case with the
cooperation of Columbia. All Consent/Tender Offers shall be in accordance with
applicable Law and shall be on the terms and conditions reasonably agreed by
Columbia and Aztar; provided, that all Consent/Tender Offers (and all
obligations to make any payments to holders of all or any portion of any
indebtedness in connection therewith or to modify the terms or provisions of any
indebtedness) shall be conditioned upon the consummation of the Merger, and
shall terminate immediately upon the termination of this Agreement prior to the
Effective Time. Aztar agrees not to consummate any Consent/Tender Offer unless
Columbia consents in writing to such consummation. Aztar agrees to use its
reasonable efforts to cooperate with Columbia and to use its reasonable best
efforts to consummate all Consent/Tender Offers, provided that the effectiveness
of any Consent/Tender Offer shall be conditioned on the Closing. Columbia shall
indemnify Aztar and its directors and officers for any and all liabilities
arising out of or in connection with any action taken pursuant to this Section
4.01(c) to the maximum extent permitted by Law.
(d) Nothing in Section 4.01(b) or 4.01(c) shall require Aztar and its
subsidiaries to provide any assistance which would interfere unreasonably with
the business or operations of Aztar and its subsidiaries. All reasonable
out-of-pocket expenses incurred by Aztar or any of its subsidiaries, officers,
employees, representatives and advisors in connection with their respective
obligations pursuant to Section 4.01(b) and 4.01(c) shall be borne (or
reimbursed promptly following demand therefor) by Columbia. Nothing in Section
4.01(b) or 4.01(c) shall require Aztar or any of its subsidiaries, officers,
employees, representatives or advisors to take any action that might result in
any liability in connection with the Financing unless indemnified by Columbia to
the maximum extent permitted by Law or to take any action other than in their
capacity as an officer. Columbia hereby agrees and acknowledges that Financing
and the Consent/Tender Offers do not constitute conditions to the consummation
of the transactions contemplated by this Agreement.
Section 4.02 Covenants of Sussex and Columbia Interim Operations. (a)
Each of Sussex and Columbia covenants and agrees that, except as Aztar may
approve in writing and except as set forth in
(i) Section 4.02(a)(i) of the Columbia Disclosure Letter, it
will not declare, set aside or pay any dividend or distribution
(whether in cash, stock or property or any combination thereof) on any
shares of its capital stock or the capital stock of any affiliate;
35
(ii) Section 4.02(a)(ii) of the Columbia Disclosure Letter, it
and each of its respective subsidiaries will not incur any indebtedness
or guarantee indebtedness of another person, or issue or sell any debt
securities or warrants or other rights to acquire any debt security of
Sussex or Columbia or any of their respective affiliates; or
(iii) Section 4.02(a)(iii) of the Columbia Disclosure Letter,
it and each of its respective subsidiaries will not acquire, or agree
to acquire, all or substantially all of the assets, or a controlling
interest in, any other person.
(b) Each of Sussex and Columbia will not take, and will not permit its
subsidiaries to take, any action that at the time of taking such action is
reasonably likely to prevent or materially delay the consummation of the Merger.
Each of Sussex and Columbia agrees to use its reasonable best efforts to obtain
the Financing necessary for the consummation of the transactions contemplated
hereby at or prior to the Closing Date. Each of Sussex and Columbia shall use
its reasonable best efforts to keep Aztar informed of the status of its efforts
to obtain the Financing and of any development that any of Sussex or Columbia
believes is reasonably likely to prevent or delay the receipt of the Financing.
Each of Sussex and Columbia shall use its reasonable best efforts to comply with
the covenants in the Financing Commitments which are within its control.
Section 4.03 No Solicitation by Aztar.
(a) Aztar shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any of its directors, officers or employees, or
any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or knowingly encourage (including by way of
furnishing non-public information), or knowingly take any other action designed
to facilitate, any inquiries or the making of any proposal that constitutes a
Takeover Proposal (as defined below) or (ii) participate in any negotiations or
discussions (other than to state that they are not permitted to have
discussions) regarding any Takeover Proposal; provided, however, that if, at any
time prior to receipt of the Stockholder Approval (the "Applicable Period"), the
Board of Directors of Aztar determines in good faith, after consultation with
its legal and financial advisors, that a Takeover Proposal that was not
solicited by it after the date hereof and that did not otherwise result from a
breach of this Section 4.03(a) is, or is reasonably likely to result in, a
Superior Proposal (as defined in Section 4.03(b)), and subject to providing
prior written notice of its decision to take such action to Columbia and
compliance with Section 4.03(c), Aztar may (x) furnish information with respect
to Aztar and its subsidiaries to the person making such proposal (and its
representatives) pursuant to a customary confidentiality agreement (provided,
that such confidentiality agreement shall not in any way restrict Aztar from
complying with its disclosure obligations under this Agreement, including with
respect to such proposal; provided further, that any such confidentiality
agreement need not contain a standstill or similar provision) and (y)
participate in discussions or negotiations regarding such proposal. Aztar agrees
to provide Columbia with any information provided in writing or orally to the
person making such Takeover Proposal and its representatives substantially
simultaneously with the provision thereof to such other person. Aztar, its
subsidiaries and their representatives immediately shall cease and cause to be
terminated any activities, discussions or negotiations with any parties existing
on the
36
date hereof with respect to any Takeover Proposal. For purposes of this
Agreement, "Takeover Proposal" means any bona fide inquiry, proposal or offer
from any person relating to (i) any direct or indirect acquisition or purchase
of a business (a "Material Business") that constitutes 20% or more of the net
revenues, net income or the assets (including equity securities) of Aztar and
its subsidiaries, taken as a whole, (ii) any direct or indirect acquisition or
purchase of 20% or more of any class of voting securities of Aztar or 20% or
more of the voting power of any class of stock of any subsidiary of Aztar
owning, operating or controlling a Material Business, (iii) any tender offer or
exchange offer (or other offer to purchase or acquire) that if consummated would
result in any person beneficially owning 20% or more of any class of voting
securities of Aztar or 20% or more of the voting power of any class of stock of
any subsidiary of Aztar owning, operating or controlling a Material Business,
(iv) any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Aztar or any such
subsidiary of Aztar owning, operating or controlling a Material Business or (v)
any direct or indirect acquisition or purchase of, any joint venture or
partnership or similar arrangement involving, or any recapitalization,
restructuring or leveraged financing or similar transaction involving all or any
portion of the Las Vegas Site (except as expressly specified in Section
4.01(a)(xii), in each case other than the transactions contemplated by this
Agreement.
(b) Except as contemplated by this Section 4.03, neither the Board of
Directors of Aztar nor any committee thereof shall (i) withdraw or modify, or
propose publicly to withdraw or modify, in a manner adverse to Columbia, the
approval or recommendation by such Board of Directors or such committee of this
Agreement or the Merger, (ii) approve or recommend, or propose publicly to
approve or recommend, any Takeover Proposal, or (iii) cause Aztar to enter into
any letter of intent, agreement in principle, acquisition agreement or other
similar agreement (other than a confidentiality agreement of the type and under
the circumstances described in Section 4.03(a)) related to any Takeover Proposal
(each, an "Aztar Acquisition Agreement"). Notwithstanding the foregoing, in
response to a Takeover Proposal that was not solicited by it and that did not
otherwise result from a breach of Section 4.03(a), during the Applicable Period,
the Board of Directors of Aztar may, if it determines in good faith, after
consulting with outside counsel, that taking such action is reasonably required
by the Board of Directors' fiduciary obligations under applicable law, (A)
withdraw or modify, or propose publicly to withdraw or modify, the approval or
recommendation by such Board of Directors or any committee thereof of this
Agreement or the Merger, (B) approve or recommend, or propose to approve or
recommend, any Superior Proposal, or (C) terminate this Agreement pursuant to
Section 7.01(d) simultaneously with the payment of the Termination Fee and the
Termination Expenses, but only after (1) such Board of Directors has determined
in good faith that such Takeover Proposal constitutes a Superior Proposal, and
(2) (I) Aztar has notified Columbia in writing of the determination that such
Takeover Proposal constitutes a Superior Proposal and (II) at least 48 hours
following receipt by Columbia of such notice, the Board of Directors of Aztar
has determined that such Superior Proposal remains a Superior Proposal.
Notwithstanding the foregoing, other than in connection with a Takeover
Proposal, the Board of Directors of Aztar may, if it determines in good faith,
after consulting with outside counsel, that the failure to take such action
would result in a breach of the Board of Directors' fiduciary obligations under
applicable Law withdraw or modify the approval or recommendation by such Board
of Directors or any committee thereof of this Agreement or the Merger if Aztar
has notified Columbia in
37
writing of the decision to do so at least 48 hours prior to the taking of such
action, which notice shall specify in writing the reasons therefor.
For purposes of this Agreement, "Superior Proposal" means any written
Takeover Proposal that the Board of Directors of Aztar determines in good faith
(after consultation with a financial advisor of nationally recognized
reputation) to be more favorable (taking into account (i) all financial and
strategic considerations, including relevant legal, financial, regulatory and
other aspects of such Takeover Proposal and the Merger and the other
transactions contemplated by this Agreement deemed relevant by the Board of
Directors, (ii) the identity of the third party making such Takeover Proposal,
(iii) the anticipated timing, conditions and prospects for completion of such
Takeover Proposal, including the prospects for obtaining regulatory approvals
and financing, and any third party shareholder approvals and (iv) the other
terms and conditions of such Takeover Proposal) to Aztar's stockholders than the
Merger and the other transactions contemplated by this Agreement (taking into
account all of the terms of any proposal by Columbia to amend or modify the
terms of the Merger and the other transactions contemplated by this Agreement),
except that (x) the reference to "20%" in clauses (i), (ii) and (iii) of the
definition of "Takeover Proposal" in Section 4.03(a) shall be deemed to be a
reference to "50%", (y) the "Takeover Proposal" must refer to a transaction
involving Aztar as a whole, and not any of its subsidiaries or Material
Businesses or the Las Vegas Site, and (z) the references to any subsidiary of
Aztar owning, operating or controlling a Material Business in clauses (ii),
(iii) and (iv) shall be deemed to be deleted.
(c) In addition to the obligations of Aztar set forth in paragraphs (a)
and (b) of this Section 4.03, Aztar shall as promptly as practicable advise
Columbia, orally and in writing, of any request for information or of any
Takeover Proposal (and in any case within 24 hours of such request or the
receipt of such Takeover Proposal), the principal terms and conditions of such
request or Takeover Proposal and the identity of the person making such request
or Takeover Proposal. Aztar shall keep Columbia informed of the status and
material details (including amendments or proposed amendments) of any such
request or Takeover Proposal as promptly as practicable.
(d) Nothing contained in this Agreement shall prohibit Aztar from
issuing a "stop-look-and-listen communication" pursuant to Rule 14d-9(f), taking
and disclosing to its stockholders a position as required by Rule 14d-9 or Rule
14e-2 promulgated under the Exchange Act or taking any action required by any
order or decree of a Governmental Authority, in each case, subject to the
provisions of Section 7.01(f).
Section 4.04 Other Actions. Each of Aztar and Columbia shall use its
reasonable best efforts not to, and shall use its reasonable best efforts not to
permit any of their respective subsidiaries to, take any action that would, or
that would reasonably be expected to, result in any condition to the Merger set
forth in Article VI not being satisfied.
Section 4.05 Control of Aztar's Operations. Nothing contained in this
Agreement shall give to Columbia, directly or indirectly, rights to control or
direct Aztar's operations prior to the Effective Time. Prior to the Effective
Time, Aztar shall exercise,
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consistent with the terms and conditions of this Agreement, complete control and
supervision of its operations.
ARTICLE V
Additional Agreements
Section 5.01 Preparation of the Proxy Statement; Stockholders Meeting.
(a) As soon as reasonably practicable following the date of this
Agreement, Aztar shall prepare the Proxy Statement and Columbia shall assist
Aztar in such preparation. Aztar shall use its reasonable best efforts to file
the Proxy Statement with the SEC as soon as possible and to respond as promptly
as possible to any comments of the SEC with respect thereto. Aztar will use its
reasonable best efforts to cause the Proxy Statement to be mailed to Aztar's
stockholders as promptly as practicable. Each party will advise the other,
promptly after it receives notice thereof, of the receipt of any comments from
the SEC with respect to the Proxy Statement or any supplement or amendment, or
any request by the SEC for amendment of the Proxy Statement or comments thereon
and responses thereto or requests by the SEC for additional information. If
prior to the Effective Time any event occurs with respect to Aztar, Columbia or
any subsidiary of Aztar or Columbia, respectively, or any change occurs with
respect to information supplied by or on behalf of Aztar or Columbia,
respectively, for inclusion in the Proxy Statement that, in each case, is
required to be described in an amendment of, or a supplement to, the Proxy
Statement, Aztar or Columbia, as applicable, shall promptly notify the other of
such event, and Columbia shall cooperate with Aztar in the prompt filing with
the SEC of any necessary amendment or supplement to the Proxy Statement and, as
required by law, in disseminating the information contained in such amendment or
supplement to Aztar's stockholders. Aztar shall provide Columbia with a
reasonable opportunity to review and comment on any draft Proxy Statement, any
draft amendment thereto, and any correspondence with the SEC concerning the
Proxy Statement, and shall file or submit any of the foregoing only once such
draft is in a form reasonably acceptable to Columbia and Aztar.
(b) Aztar shall, as soon as reasonably practicable following the date
of this Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Stockholders Meeting") for the purpose of obtaining the
Stockholder Approval. Without limiting the generality of the foregoing, Aztar
agrees that its obligations pursuant to the first sentence of this Section
5.01(b) shall not be affected by (i) the commencement, proposal, disclosure or
communication to Aztar of any Takeover Proposal, (ii) the withdrawal or
modification by the Board of Directors of Aztar of its approval or
recommendation of this Agreement, the Merger or the other transactions
contemplated hereby, or (iii) the approval or recommendation of any Superior
Proposal.
Section 5.02 Access to Information; Effect of Review.
(a) Access. To the extent permitted by applicable Law and
confidentiality obligations and upon reasonable advance notice, Aztar shall, and
shall cause each of its
39
respective subsidiaries to afford to Columbia and to its officers, employees,
accountants, counsel, financial advisors and other representatives (and to its
potential financing sources and their respective representatives) reasonable
access during normal business hours during the period prior to the Effective
Time to all its Contracts, properties, books, contracts, commitments, personnel
and records and, during such period, to the extent permitted by applicable law
and confidentiality provisions, Aztar shall, and shall cause its subsidiaries,
to, (i) confer on a regular and frequent basis with one or more representatives
of Columbia to discuss material operational and regulatory matters and the
general status of its ongoing operations, (ii) advise Columbia of any change or
event that has had or would reasonably be expected to have a material adverse
effect on such party, and (iii) furnish to Columbia promptly all other
information concerning its business, properties and personnel, in each case as
Columbia may reasonably request. Columbia shall schedule and coordinate all
inspections with the individual(s) set forth in Section 5.02(a) of the Aztar
Disclosure Letter. Aztar shall be entitled to have representatives present at
all times during any such inspection. Notwithstanding the foregoing, neither
Aztar nor its subsidiaries shall be required to provide access to or to disclose
any information (i) where such access or disclosure could jeopardize the
attorney-client privilege or work product privilege of Aztar or its subsidiaries
or contravene any Law or binding agreement entered into prior to the date of
this Agreement, or (ii) to the extent that outside counsel to Aztar advises that
such access or disclosure should not be disclosed in order to ensure compliance
with any Gaming Law or other applicable Law. Columbia agrees to hold
confidential all information which it has received or to which it has gained
access pursuant to this Section 5.02(a) in accordance with the Confidentiality
Agreement, dated as of April 16, 2006, between Aztar and Columbia (the
"Confidentiality Agreement").
(b) Effect of Review. No investigation or review pursuant to Section
5.02(a) shall have any effect for the purpose of determining the accuracy of any
representation or warranty given by any of the parties hereto to any of the
other parties hereto.
Section 5.03 Regulatory Matters; Reasonable Best Efforts.
(a) Regulatory Approvals. Each party hereto shall cooperate and
promptly prepare and file all necessary documentation, to effect all necessary
applications, notices, petitions and filings, and shall use reasonable best
efforts to take or cause to be taken all actions, and do or cause to be done all
things in order to obtain all approvals and authorizations of all Governmental
Authorities, necessary or advisable to consummate and make effective, in the
most expeditious manner reasonably practicable, the Merger and the other
transactions contemplated by this Agreement. Columbia shall have the
responsibility for the preparation and filing of any required applications,
filings or other materials, including in the State of New Jersey, a trust
agreement necessary to obtain interim casino authorization; provided, however
that (i) Aztar shall provide and cause its affiliates to provide Columbia with
any information required in connection with such filings as promptly as
practicable, (ii) Aztar shall have the right to review, comment on and approve
(which comments Aztar shall provide as promptly as practicable, but in any event
within three days of Columbia's request for such approval) in advance all
characterizations of the information relating to Aztar that appear in any
application, notice, petition or filing made in connection with the Merger or
the other transactions contemplated by this Agreement, and (iii) Aztar shall
have the right to review and comment on
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(which comments Aztar shall provide as promptly as practicable, but in any event
within three days of Columbia's request for such approval, and which comments
Columbia shall consider in good faith) in advance all applications, notices,
petitions or filings made in connection with the Merger or the other
transactions contemplated by this Agreement. Aztar and Columbia agree that they
will consult and cooperate with each other with respect to the obtaining of all
such necessary approvals and authorizations of Governmental Authorities.
(b) Filings. Each of Columbia and Aztar 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 as soon as practicable after the date hereof (and in any event
within 45 days), including the filing of all required applications for Columbia
and all "key persons" (as defined under applicable Gaming Laws). Each of
Columbia and Aztar shall use its reasonable best efforts to request as soon as
practicable an accelerated review (to the extent available) from any Gaming
Authorities in connection with such filings and in the case of Gaming Approvals
required in the State of New Jersey, Columbia shall seek to obtain interim
casino authorization at the earliest practicable date. Each of Columbia and
Aztar shall respond as promptly as practicable under the circumstances 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 Governmental Authority in
connection with any Law. Except with respect to the Missouri Divestiture or
Closing (as defined below) and except as otherwise provided herein, Columbia
shall have the right to direct and control the process of obtaining the
Governmental Consents (as defined below) required in connection with the Merger
and the transactions contemplated hereby and Aztar agrees to reasonably
cooperate with Columbia with respect thereto. Aztar shall agree if, but solely
if, requested by Columbia to, in compliance with Gaming Laws, divest, hold
separate or otherwise take or commit to take any action that limits or prohibits
Aztar's or Columbia's freedom of action with respect to, or its ability to
retain, any of the businesses, services, employees or assets of Aztar or any of
its subsidiaries, in each case at or after the Effective Time and only in order
to enable Columbia to obtain or to avoid having to obtain a Governmental
Consent, provided that any such action shall be conditioned upon the
consummation of the Merger and the transactions contemplated hereby.
Notwithstanding anything to the contrary in this Agreement, Aztar shall use
commercially reasonable efforts to divest its casino property in the State of
Missouri in accordance with applicable law in a bona fide arms length
transaction, provided that, in the event that (i) Aztar and/or the purchaser
fails to enter into a purchase and sale agreement with respect to its casino
property in the State of Missouri within 90 days of the date hereof, (ii) if, in
the event a purchase and sale agreement is entered into within 90 days of the
date hereof, Aztar fails to obtain the Required Gaming Approvals for such sale
within six months following the date hereof or (iii) any party to such agreement
terminates such agreement prior to the consummation of the Merger, Aztar shall,
at its sole discretion, use commercially reasonable efforts to close the
operation of such property in accordance with applicable law (the "Missouri
Divestiture or Closing"). At the option of Aztar, any of the actions taken in
connection with the Missouri Divestiture or Closing may be conditioned on the
consummation of the Merger. Columbia shall promptly reimburse Aztar for any and
all costs and expenses in connection with the Missouri Divestiture or Closing,
including any termination fee or expenses payable to a third party.
41
(c) Cooperation. In addition, each party shall, subject to applicable
law and to the terms and conditions hereof, except as prohibited by any
applicable representative of any applicable Governmental Authority, (i) promptly
notify the other party of any communication to that party relating to the Merger
and the transactions contemplated hereby from the FTC, the Antitrust Division,
any Governmental Authority, including any Gaming Authority, and consult with the
other party in advance regarding, and provide a reasonable opportunity to
comment on, any proposed written communication relating to the Merger and the
transactions contemplated hereby to any of the foregoing persons; and (ii)
furnish the other party or its outside counsel with copies of all
correspondence, filings, and written communications (and memoranda setting forth
the substance thereof) between them and its affiliates and their respective
representatives on the one hand, and any government or regulatory authority or
members of their respective staffs on the other hand, with respect to this
Agreement and the Merger, provided, however, that the parties may redact
discussions of the value of the Merger or any other acquisition, sale, or
divestiture, except with respect to the Missouri Divestiture or Closing;
provided, further, that notwithstanding anything in this Agreement to the
contrary, Columbia shall be entitled to redact any corporate gaming applications
to the extent containing personal information, including personal financial
information. Each of Columbia and Aztar, and their respective representatives,
will have the right to participate in any meeting or discussion with any
Governmental Authority in respect of any filings, investigation or inquiry
concerning this Agreement or the Merger.
(d) Objections. In furtherance and not in limitation of the covenants
of the parties contained in Section 5.03(a), (b) and (c), but subject to Section
5.03(g), each of Columbia and Aztar shall use its reasonable best efforts to
resolve such objections, if any, as may be asserted by a Governmental Authority
or other person with respect to the transactions contemplated hereby under any
Antitrust Law (as defined in Section 8.03) or Gaming Law or by any Gaming
Authority. In connection with the foregoing, if any administrative or judicial
action or proceeding, including any proceeding by a private party, is instituted
(or threatened to be instituted) challenging any transaction contemplated by
this Agreement as violative of any Antitrust Law, Gaming Law or the rules and
regulations of any Gaming Authority, subject to Section 5.03(g), each of
Columbia and Aztar shall cooperate in all material respects with each other and
use its respective reasonable best efforts to, as promptly as practicable,
contest and resist any such action or proceeding, to limit the scope or effect
of any proposed action of, or remedy sought to be obtained or imposed by, any
Gaming Authority, and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts the
consummation of the transactions contemplated by this Agreement.
(e) Further Actions. Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
reasonably necessary or advisable under applicable Laws (including the HSR Act
and the Gaming Laws) to consummate and make effective, in the most expeditious
manner reasonably practicable, the Merger and the other transactions
contemplated by this Agreement, including (i) obtaining any required third party
consents and Governmental Consents
42
and (ii) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by this Agreement.
(f) Governmental Consents. For purposes of this Agreement, the term
"Governmental Consents" shall mean all notices, reports, filings, consents,
applications, registrations, approvals, permits or authorizations required to be
made prior to the Effective Time by Aztar or Columbia or any of their respective
subsidiaries with, or obtained prior to the Effective Time by Aztar or Columbia
or any of their respective subsidiaries from, any Governmental Authority in
connection with the execution and delivery of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby (and
shall include the expiration or termination of the waiting period under the HSR
Act).
(g) Specified Material Adverse Effect. Notwithstanding the foregoing
(but subject to the fourth and fifth sentences of Section 5.03(b)), as used in
this Section 5.03, "reasonable best efforts" shall not include nor require any
party to (A) sell, or agree to sell, hold or agree to hold separate, or
otherwise dispose, or agree to dispose of, any asset, in each case other than
(i) a hotel casino property owned by Aztar or Columbia or their affiliates in
Laughlin, Nevada designated by Columbia, and/or (ii) the hotel casino property
owned by Aztar in Indiana (the "Specified Assets") or (B) conduct or agree to
conduct its business in any particular manner, if such conduct has had or would,
individually or in the aggregate, reasonably be expected to (i) have a material
adverse effect on Columbia (after giving effect to the consummation of the
Merger and reflecting the business, assets, results of operations and financial
condition of Aztar and its subsidiaries) (clauses (A) or (B), a "Specified
Material Adverse Effect") or (ii) result in either Columbia or Aztar or their
respective subsidiaries failing to meet the standards for licensing, suitability
or character under any Gaming Laws relating to the conduct of Columbia's or
Aztar'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 Specified Material Adverse Effect. Except for the Missouri
Closing or Divestiture, none of Aztar or any of its subsidiaries may take or
agree to take any such action, or consent to or agree to consent to any such
restriction, without the consent of Columbia (such consent not to be
unreasonably withheld or delayed). For purposes of clarification, Columbia
agrees that if necessary in order to obtain, or to avoid having to obtain, the
Required Governmental Consents (as defined in Section 6.01(c)), Columbia will
(A) sell, or agree to sell, hold or agree to hold separate, or otherwise
dispose, or agree to dispose of, the Specified Assets (or ask Aztar to do the
same) or (B) conduct or agree to conduct its business in a particular manner or
take such other actions as may be requested by a Governmental Authority, unless
such conduct or other action has had or would reasonably be expected to result
in a Specified Material Adverse Effect.
(h) State Anti-Takeover Statutes. Without limiting the generality of
Section 5.03(b), Aztar and Columbia shall (i) take all reasonable action
necessary to ensure that no state anti-takeover statute or similar statute or
regulation or charter, bylaw or similar provision becomes applicable to the
Merger, this Agreement or any of the other transactions contemplated by this
Agreement and (ii) if any state anti-takeover statute or similar statute or
regulation, charter, bylaw or similar provision becomes applicable to the
Merger, this Agreement or any other transaction contemplated by this Agreement,
take all action necessary to ensure that the Merger and the other transactions
contemplated by this Agreement may be consummated as
43
promptly as reasonably practicable on the terms contemplated by this Agreement
and otherwise to minimize the effect of such statute or regulation, charter,
bylaw or similar provision on the Merger and the other transactions contemplated
by this Agreement.
(i) Additional Financing. At the Closing, Columbia will have in place a
revolving credit facility in the principal amount of $180 million, which shall
be supported by a guaranty of Sussex in the amount of $80 million.
Section 5.04 Stock Options; Stock Plans.
(a) Each stock option to purchase Aztar Common Stock (the "Aztar
Employee Stock Options") granted under the Aztar Employee Stock Plans that is
outstanding as of or immediately prior to the Effective Time, shall be converted
into the right to receive an amount in cash as soon as practicable following the
Effective Time equal to the product of (x) the excess, if any, of the Common
Stock Merger Consideration over the exercise price per Aztar Common Stock
subject to such Aztar Employee Stock Option and (y) the total number of shares
of Aztar Common Stock subject to such Aztar Employee Stock Option immediately
before the Effective Time, with the aggregate amount of such payment rounded to
the nearest cent, less such amounts as are required to be withheld or deducted
under the Code or any provision of U.S. state, U.S. local or foreign Tax Law
with respect to the making of such payment;
(b) Prior to the Effective Time, the Board of Directors of Aztar (or,
if appropriate, any committee administering the Aztar Employee Stock Plans)
shall adopt such resolutions or take all such other actions as may be required
to effect the foregoing and shall ensure that following the Effective Time no
holder of Aztar Employee Stock Option or any participant in any Aztar Employee
Stock Plan or other Aztar Employee Benefit Plan or Aztar Employment Agreement
shall have any right thereunder to acquire any capital stock (including any
"phantom" stock or stock appreciation rights) of Aztar or the Surviving
Corporation.
Section 5.05 Employee Matters.
(a) Columbia agrees that, during the period commencing at the Effective
Time and ending on the first anniversary of the Effective Time, the employees of
Aztar and any of its subsidiaries who are employed as of the Closing Date and
continue employment (the "Company Employees") will continue to be provided with
salary and benefits under employee benefit and commission or similar plans that
are substantially similar, in the aggregate, to those currently provided by
Aztar or any of its subsidiaries to such employees; provided that discretionary
benefits shall remain discretionary.
(b) For purposes of all employee benefit plans, programs and agreements
maintained by or contributed to by Columbia and its subsidiaries (including,
after Closing, the Surviving Corporation), Columbia shall, or shall cause its
subsidiaries to cause each such plan, program or arrangement to treat the prior
service with Aztar or any of its subsidiaries immediately prior to the Closing
of any Company Employee (to the same extent such service is recognized under
analogous plans, programs or arrangements of Aztar or any of its subsidiaries
44
prior to the Effective Time) as service rendered to Columbia or any of its
subsidiaries, as the case may be, for all purposes; provided, however, that such
crediting of service shall not (i) operate to duplicate any benefit or the
funding of such benefit under any plan, (ii) require the crediting of past
service for benefit accrual purposes under any defined benefit pension plan or
(iii) be credited if past service credit has not been or will not be provided to
employees of Columbia or its subsidiaries participating in such plan. Company
Employees shall also be given credit for any deductible or co-payment amounts
paid in respect of the plan year in which the Closing occurs, to the extent
that, following the Closing, they participate in any other plan for which
deductibles or co-payments are required. Columbia shall also cause each Columbia
Plan (as defined below) to waive any preexisting condition or waiting period
limitation which would otherwise be applicable to a Company Employee on or after
the Effective Time (to the extent such limitation would not apply under the
corresponding Aztar Employee Benefit Plan). Columbia shall recognize any accrued
but unused vacation of the Company Employees as of the Effective Time, and
Columbia shall cause Aztar and its subsidiaries to provide such paid vacation.
For purposes of this Agreement, a "Columbia Plan" shall mean such employee
benefit plan, as defined in Section 3(3) of ERISA, or a nonqualified employee
benefit or deferred compensation plan, stock option, bonus or incentive plan or
other employee benefit or fringe benefit program, that may be in effect
generally for employees of Columbia and its subsidiaries from time to time.
(c) Except as provided specifically in this Section 5.05, nothing in
this Agreement shall limit or restrict the rights of Columbia or Aztar to
modify, amend, terminate or establish employee benefit plans or arrangements, in
whole or in part, at any time after the Effective Time.
(d) No provision of this Section 5.05 shall create any third party
beneficiary rights in any Company Employee or any current or former director or
consultant of Aztar or its subsidiaries in respect of continued employment (or
resumed employment) or any other matter.
(e) Notwithstanding anything in this Agreement to the contrary,
Columbia shall or shall cause its affiliates to honor and perform all
obligations under any collective bargaining agreements pertaining to any Company
Employees.
(f) Notwithstanding any provision of this Agreement to the contrary,
Columbia shall not, for at least twelve months following the Closing, cause
there to be adopted any amendment to any Aztar Employee Benefit Plan that is a
severance or retention plan, program, policy or agreement that would result in a
diminution of benefits thereunder.
Section 5.06 Indemnification, Exculpation and Insurance.
(a) Each of Aztar and Columbia agrees that, to the fullest extent
permitted under applicable law, all rights to indemnification and exculpation
from liabilities for acts or omissions occurring at or prior to the Effective
Time now existing in favor of the current or former directors, officers,
employees or fiduciaries under benefit plans currently indemnified of Aztar and
its subsidiaries as provided in their respective certificate or articles of
incorporation, by-laws (or comparable organizational documents) or other
agreements providing
45
indemnification shall survive the Merger and shall continue in full force and
effect in accordance with their terms. The certificate of incorporation and
by-laws of the Surviving Corporation shall continue to contain provisions no
less favorable with respect to indemnification, advancement of expenses and
exculpation of former or present directors and officers than are presently set
forth in the Aztar's certificate of incorporation and by-laws, which provisions
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 any such individuals.
(b) For six years after the Effective Time, the Surviving Corporation
shall maintain in effect the directors' and officers' liability (and fiduciary)
insurance policies covering acts or omissions occurring on or prior to the
Effective Time with respect to those persons who are currently covered by
Aztar's respective directors' and officers' liability (and fiduciary) insurance
policies on terms with respect to such coverage and in amounts at least as
favorable as those set forth in the relevant policy in effect on the date of
this Agreement, except in no event shall the Surviving Corporation be required
to make annual premium payments in connection therewith in excess of the amount
set forth on Section 5.06(b) of the Aztar Disclosure Letter (the "Maximum
Amount"), and if the Surviving Corporation is unable to obtain the insurance
required by this Section 5.06(b), the Surviving Corporation shall maintain the
most advantageous policies of directors' and officers' insurance otherwise
obtainable for an annual premium equal to the Maximum Amount. Notwithstanding
the foregoing, either Columbia or Aztar may elect in lieu of the foregoing
insurance, prior to the Effective Time, to obtain and fully pay for a policy
(providing only for the Side A coverage for the Aztar Indemnified Parties (as
defined in clause (c) below) with a claims period of at least six years from the
Effective Time from an insurance carrier with the same or better credit rating
as Aztar's current insurance carrier with respect to directors' and officers'
liability insurance in an amount and scope the same as Aztar's existing policies
with respect to matters existing or occurring at or prior to the Effective Time;
provided that the cost thereof does not exceed $4,435,000.
(c) From and after the Effective Time, Columbia agrees to cause the
Surviving Corporation to indemnify and hold harmless each present or former
director and officer of Aztar or any of its subsidiaries (in each case, for acts
or failures to act in such capacity), determined as of the date hereof, and any
person who becomes such a director or officer between the date hereof and the
Effective Time (collectively, the "Aztar Indemnified Parties"), against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs") incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of matters
existing or occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time (including any matters arising
in connection with the transactions contemplated by this Agreement), to the
fullest extent permitted by applicable law (and the Surviving Corporation shall
also advance expenses as incurred to the fullest extent permitted under
applicable law, provided that if required by applicable law the person to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such person is not entitled to indemnification).
(d) The obligations of the Surviving Corporation under this Section
5.06 shall not be terminated or modified by such parties in a manner so as to
adversely affect any Aztar
46
Indemnified Party or any other person entitled to the benefit of Sections
5.06(a) and (b), as the case may be, to whom this Section 5.06 applies without
the consent of the affected Aztar Indemnified Party or such other person, as the
case may be. If the Surviving Corporation (i) shall consolidate with or merge
into any other corporation or entity and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (ii) shall
transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then, and in each such case, proper
provisions shall be made so that the successors and assigns of the Surviving
Corporation, as the case may be, shall assume all of the obligations set forth
in Section 5.06.
(e) The provisions of Section 5.06 are (i) intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her heirs
and his or her representatives and (ii) in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by contract or otherwise.
Section 5.07 Fees and Expenses.
(a) Except as provided in this Section 5.07 or Section 4.01(d), all
fees and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated.
(b) In the event that (i)(A) the condition set forth in Section
6.01(c)(ii) shall have been satisfied, (B) following the Stockholder Approval, a
Takeover Proposal (or the intention of any person to make one), whether or not
conditional, shall have been made known to Aztar or shall have been publicly
disclosed and thereafter (C)(x) this Agreement is terminated by Aztar or
Columbia pursuant to Section 7.01(b)(i) and (y) within 6 months of such
termination Aztar or any of its subsidiaries enters into any Aztar Acquisition
Agreement or any person consummates any Takeover Proposal, (ii) prior to or
during the Stockholders Meeting (or any subsequent meeting of Aztar stockholders
at which it is proposed that the Merger be approved), a Takeover Proposal (or
the intention of any person to make one), whether or not conditional, shall have
been publicly disclosed, and thereafter (x) this Agreement is terminated by
either Aztar or Columbia pursuant to Section 7.01(b)(ii) and (y) within 9 months
of such termination Aztar or any of its subsidiaries enters into any Aztar
Acquisition Agreement or any person consummates any Takeover Proposal, (iii)
this Agreement is terminated by Aztar pursuant to Section 7.01(d), (iv) this
Agreement is terminated by Columbia pursuant to Section 7.01(f)(i) and within 9
months of such termination Aztar or any of its subsidiaries enters into any
Aztar Acquisition Agreement or any person consummates any Takeover Proposal, (v)
this Agreement is terminated by Columbia pursuant to Section 7.01(f)(ii), or
(vi) this Agreement is terminated by Columbia pursuant to Section 7.01(g) as a
result of a material and intentional breach by Aztar, then in each case Aztar
shall pay Columbia a fee equal to $55.228 million (the "Termination Fee") and
shall reimburse Columbia for its fees and expenses incurred in connection with
the transactions contemplated hereby up to a maximum of $27.36 million (the
"Termination Expenses"), payable by wire transfer of same day funds; (for the
purposes of the foregoing the terms "Aztar Acquisition Agreement" and "Takeover
Proposal" shall have the meanings assigned to such terms in Section 4.03 except
that the references to "20%" in the definition of "Takeover
47
Proposal" in Section 4.03(a) shall be deemed to be references to "50%". Payment
of the Termination Fee and Termination Expenses to Columbia pursuant to (A)
clauses (i), (ii) or (iv) above shall be made concurrently with the earlier of
the consummation of the Takeover Proposal or the entry of the Aztar Acquisition
Agreement, (B) clause (iii) above shall be made concurrently with termination of
this Agreement or (C) clause (v) or (vi) above shall be made within two business
days of termination of this Agreement.
(c) Aztar acknowledges that the agreement contained in Section 5.07(b)
is an integral part of the transactions contemplated by this Agreement, and
that, without this agreement, Columbia would not enter into this Agreement;
accordingly, if Aztar fails promptly to pay any amount due pursuant to Section
5.07(b), and, in order to obtain such payment, Columbia commences a suit that
results in a judgment against Aztar for the payments set forth in Section
5.07(b), Aztar shall pay to Columbia its costs and expenses (including
attorneys' fees and expenses) in connection with such suit, together with
interest on the amount of the fee at the prime rate plus 2% per annum of
Citibank N.A. in effect on the date such payment was required to be made.
(d) In the event of the termination of this Agreement pursuant to (i)
Section 7.01(b)(i), if at the time of such termination, the condition set forth
in Section 6.01(c)(ii) has not been satisfied, (ii) Section 7.01(b)(iii), if the
Restraint is issued by a Governmental Authority and relates to any Required
Gaming Approval or any Gaming Law applicable in any jurisdiction, (iii) Section
7.01(b)(iv), if the condition that is incapable of satisfaction is the condition
set forth in Section 6.01(c)(ii) or the condition set forth in Section 6.01(b)
(to the extent the Restraint is issued by a Governmental Authority and relates
to any Required Gaming Approval or Gaming Law) or (iv) Section 7.01(c), the
Custodial Assets, together with any interest earned thereon, shall be paid to
Aztar as liquidated damages. Columbia and Sussex each acknowledges that payment
of the Custodial Assets constitutes a non-exclusive remedy and does not deprive
Aztar of, or limit Aztar to, any other remedies Aztar may have under this
Agreement, at law or in equity, upon a termination of this Agreement if there
has been a willful and material breach by Sussex or Columbia of any of its
representations, warranties, covenants or other agreements contained in this
Agreement or the Custody and Security Agreement, which breach has not been cured
by Sussex or Columbia prior to such termination. Aztar acknowledges that payment
of the Custodial Assets constitutes Aztar's exclusive remedy and deprives Aztar
of any other remedies Aztar may have under this Agreement, at law or in equity,
upon a termination of this Agreement, except if there has been a willful and
material breach by Sussex or Columbia of any of its representations, warranties,
covenants or other agreements contained in this Agreement which breach has not
been cured by Sussex or Columbia prior to such termination. In the event of the
termination of this Agreement pursuant to (i) Section 7.01(a), (ii) Section
7.01(b)(i), if at the time of such termination, the condition set forth in
Section 6.01(c)(ii) has been satisfied, (iii) Section 7.01(b)(ii), (iv) Section
7.01(b)(iii), unless the Restraint is issued by a Governmental Authority and
relates to any Required Gaming Approval or any Gaming Law applicable in any
jurisdiction, (v) Section 7.01(b)(iv), unless the condition that is incapable of
satisfaction is the condition set forth in Section 6.01(c)(ii) or the condition
set forth in Section 6.01(b) (to the extent the Restraint is issued by a
Governmental Authority and relates to any Required Gaming Approval or Gaming
Law), (vi) Section 7.01(d), (vii) Section 7.01(e), (viii) Section 7.01(f) or
(ix) Section 7.01(g), the Custodial Assets, together with any interest earned
thereon, shall be paid
48
to Sussex; provided, however, that in the event (A) this Agreement is terminated
pursuant to Section 7.01(b)(ii) or Section 7.01(f)(i), (B) at or prior to the
time of such termination, Sussex or Columbia has breached or failed to perform
any of its representations, warranties, covenants or other agreements contained
in this Agreement to an extent that would reasonably be expected to prevent or
delay beyond the Termination Date the consummation of the transactions
contemplated by this Agreement, and (C) at or prior to the time of such
termination, Aztar has not breached or failed to perform any of its
representations, warranties, covenants or other agreements contained in this
Agreement to an extent that would reasonably be expected to prevent or delay
beyond the Termination Date the consummation of the transactions contemplated by
this Agreement, the Custodial Assets, together with any interest earned thereon,
shall be paid to Aztar.
Section 5.08 Public Announcements. Aztar, on the one hand, and Sussex
and Columbia, on the other hand, will consult with each other before issuing,
and provide each other the reasonable opportunity to review, comment upon and
concur with, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Merger, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as any party, after consultation with counsel, determines
is required by applicable law or applicable rule or regulation of the NYSE;
provided, that Sussex and Columbia or Aztar, as the case may be, may issue its
own press releases and make public statements with respect to the Transactions
contemplated by this Agreement so long as the substance of such statements has
already been disclosed publicly.
Section 5.09 Aztar Headquarters. For a period of not less than 9 months
following the Effective Time, Columbia shall maintain the current headquarters
of Aztar in Phoenix, Arizona as a divisional headquarters. For the avoidance of
doubt, nothing contained herein, shall be deemed to obligate Columbia or any of
its subsidiaries to employ any individual or group of individuals at such
location after the Closing.
Section 5.10 Pinnacle Termination Fee. Aztar shall, concurrently with
the termination of the Pinnacle Agreement, pay to Pinnacle the full amount of
the "Termination Fee" and the "Termination Expenses" as defined in the Pinnacle
Agreement (together the "Pinnacle Fees") in accordance with Section 5.07(b) of
the Pinnacle Agreement. Upon payment of the Pinnacle Fees by Aztar in accordance
with the previous sentence, Aztar shall be reimbursed therefor in accordance
with the Custody and Security Agreement. If this Agreement is terminated in
circumstances requiring payment of the Termination Fee pursuant to Section
5.07(b), or under circumstances requiring the payment of the Custodial Assets to
Columbia pursuant to Section 5.07(d), then Aztar shall reimburse Columbia for
the Pinnacle Fees. Any reimbursement by Aztar of the Pinnacle Fees shall be made
at the time that the Termination Fee and/or Custodial Assets are due to
Columbia.
49
Section 5.11 Guarantee.
(a) Sussex absolutely, unconditionally and irrevocably guarantees to
Aztar the due and punctual observance, performance and discharge of all of the
covenants, agreements, obligations and liabilities of Columbia and Merger Sub
pursuant to this Agreement, whether fixed, contingent, now existing or hereafter
arising, created, assumed, incurred or acquired (the "Obligations").
(b) Sussex agrees that the obligations of Sussex hereunder shall not be
released or discharged, in whole or in part, or otherwise affected by (i) the
failure of Aztar to assert any claim or demand or to enforce any right or remedy
against Columbia or Merger Sub, (ii) any change in the time, place or manner of
payment of any of the Obligations or any rescission, waiver, compromise,
consolidation or other amendment or modification of any of the terms of
provisions of this Agreement, (iii) any change in the corporate existence,
structure or ownership of Columbia or Merger Sub, (iv) any insolvency,
bankruptcy, reorganization or other similar proceeding affecting Columbia or
Merger Sub, (v) any lack of validity or enforceability of this Agreement, (vi)
the existence of any claim, set-off or other rights which Sussex may have at any
time against Columbia, Merger Sub or Aztar, whether in connection with the
Obligations or otherwise, and (vii) any other act or omission which might in any
manner or to any extent vary the risk of Sussex or otherwise operate as a
release or discharge of Sussex, all of which may be done without notice to
Sussex. Aztar shall not be bound or obliged to exhaust its recourse against
Columbia or Merger Sub or pursue any other remedy whatsoever before being
entitled to demand the satisfaction of the Obligations by Sussex hereunder. To
the fullest extent permitted by law, Sussex hereby expressly waives any and all
rights or defenses arising by reason of any law which would otherwise require
any election of remedies by Aztar. Sussex acknowledges that it will receive
substantial direct and indirect benefits from the Merger and the other
transactions contemplated by this Agreement and that the waivers set forth
herein are knowingly made in contemplation of such benefits.
(c) This guarantee shall remain in full force and effect and shall be
binding on Sussex, its successors and assigns until all of the Obligations have
been indefeasibly paid, observed, performed or satisfied in full.
ARTICLE VI
Conditions Precedent
Section 6.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approvals. The Stockholder Approval shall have been
obtained.
(b) No Injunctions or Restraints. (i) No (x) temporary restraining
order or preliminary or permanent injunction or other order by any Federal or
state court of competent jurisdiction preventing consummation of either of the
Merger or the other transactions contemplated hereby or (y) applicable Federal
or state law prohibiting
50
consummation of either of the Merger or the other transactions contemplated
hereby (collectively, "Restraints") shall be in effect. (ii) No Governmental
Authority shall have instituted (or if instituted, shall not have withdrawn) any
proceeding seeking any Order the issuance of which would be reasonably likely to
result in the failure of the condition set forth in Section 6.01(b)(i).
(c) Statutory Approvals. (i) The waiting period applicable to the
consummation of the Merger and the other transactions contemplated hereby under
the HSR Act shall have expired or been earlier terminated, and (ii) all Required
Gaming Approvals required to be obtained for the consummation of the Merger and
the other transactions contemplated hereby from Gaming Authorities in Nevada,
New Jersey, Missouri (except in the event that Aztar completes the Missouri
Divestiture or Closing in accordance with Section 5.03(b) hereof), Indiana,
Mississippi and Louisiana, shall have been obtained and remain in full force and
effect (including by way of obtaining an interim casino authorization from the
State of New Jersey in the case of New Jersey) (the foregoing Governmental
Consents described in clauses (i) and (ii) collectively, the "Required
Governmental Consents"). In the case of the obligation of Columbia, all Required
Governmental Consents that have been obtained shall have been obtained without
the imposition of any term, condition or consequence the acceptance of which
would, individually or in the aggregate, reasonably be expected to have or
result in a Specified Material Adverse Effect.
Section 6.02 Conditions to Obligations of Aztar. The obligation of
Aztar to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations and warranties
of Sussex and Columbia set forth herein and in the Custody and Security
Agreement shall be true and correct both when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or "material adverse effect" set
forth therein) does not have, and would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the ability of
Columbia to consummate the transactions contemplated hereby.
(b) Performance of Obligations of Columbia. Each of Sussex and Columbia
shall have performed in all material respects all obligations required to be
performed by it under this Agreement and the Custody and Security Agreement at
or prior to the Closing Date.
(c) Closing Certificates. Aztar shall have received a certificate
signed by an executive officer of each of Sussex and Columbia, dated the
Effective Time, to the effect that, to such officer's knowledge, the conditions
set forth in Sections 6.02(a) and 6.02(b) have been satisfied.
51
Section 6.03 Conditions to Obligations of Columbia. The obligation of
Columbia to effect the Merger is further subject to satisfaction or waiver of
the following conditions:
(a) Representations and Warranties. (i) The representations and
warranties of Aztar contained in Sections 3.01(b), 3.01(c), 3.01(m)(ii), and
3.01(p) of this Agreement that are qualified as to materiality or by reference
to material adverse effect shall be true and correct, and such representations
and warranties of Aztar that are not so qualified shall be true and correct in
all material respects, in each case both when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date) and (ii) all other
representations and warranties of Aztar set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if made at and as
of such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation as to "materiality" or "material adverse effect" set forth therein)
does not have, and would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on Aztar.
(b) Performance of Obligations of Aztar. Aztar shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) Closing Certificates. Columbia shall have received a certificate
signed by an executive officer of Aztar, dated the Effective Time, to the effect
that, to such officer's knowledge, the conditions set forth in Sections 6.03(a)
and 6.03(b) have been satisfied.
Section 6.04 Frustration of Closing Conditions. Neither Aztar nor
Columbia may rely on the failure of any condition set forth in Section 6.01,
6.02 or 6.03, as the case may be, to be satisfied if such failure was caused by
such party's failure to use reasonable best efforts to consummate the Merger and
the other transactions contemplated by this Agreement, to the extent required by
and subject to Section 5.03.
ARTICLE VII
Termination, Amendment and Waiver
Section 7.01 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or (other than pursuant to clauses
(d) below) after the Stockholder Approval:
(a) by mutual written consent of Aztar and Columbia;
(b) by either Aztar or Columbia:
52
(i) if the Merger shall not have been consummated by the
12-month anniversary of the date of this Agreement (the "Termination
Date"); provided, however, that the right to terminate this Agreement
pursuant to this Section 7.01(b)(i) shall not be available to any party
whose failure to perform any of its obligations under this Agreement
results in the failure of the Merger to be consummated by such time;
provided, further, that if Aztar or Columbia reasonably determines that
additional time is necessary in connection with obtaining any Required
Gaming Approval referred to in Section 6.01(c)(ii) or in order to
comply with the terms of any such Required Gaming Approval to the
extent that such compliance is required to occur prior to the Effective
Time, or in order to complete the Missouri Divestiture or Closing,
Aztar or Columbia may extend the Termination Date for an additional
period of up to three months;
(ii) if the Stockholder Approval shall not have been obtained
at a Stockholders Meeting duly convened therefor or at any adjournment
or postponement thereof;
(iii) if any Restraint having the permanent effects set forth
in Section 6.01(b)(i) shall be in effect and shall have become final
and nonappealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 7.01(b)(iii) shall have used its
reasonable best efforts to prevent the entry of and to remove such
Restraint; or
(iv) if any condition to the obligation of such party to
consummate the Merger set forth in Section 6.02 (in the case of Aztar)
or in Section 6.03 (in the case of Columbia) becomes incapable of
satisfaction prior to the Termination Date; provided that the failure
of any such condition to be capable of satisfaction is not the result
of a material breach of this Agreement by the party seeking to
terminate this Agreement;
(c) by Aztar, if any of Sussex or Columbia shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement or the
Custody and Security Agreement, which breach or failure to perform (A) would
give rise to the failure of a condition set forth in Section 6.02(a) or (b), and
(B) is incapable of being cured by Sussex or Columbia or is not cured by Sussex
or Columbia within 120 days following receipt of written notice from Aztar of
such breach or failure to perform;
(d) by Aztar in accordance with Section 4.03(b); provided, that, in
order for the termination of this Agreement pursuant to this paragraph (d) to be
deemed effective, Aztar shall have complied with Section 4.03 and with
applicable requirements, including the payment of the Termination Fee and
Termination Expenses, of Section 5.07;
(e) by Columbia, if Aztar shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement or the Custody and Security Agreement,
which breach or failure to perform (A) would give rise to the failure of a
condition set forth in Section 6.03(a) or (b), and (B) is incapable of being
cured by Aztar or is not cured by Aztar
53
within 120 days following receipt of written notice from Columbia of such breach
or failure to perform;
(f) by Columbia, if the Board of Directors of Aztar (or any committee
thereof) (i) shall have withdrawn or modified, or proposed publicly to withdraw
or modify, the approval or recommendation by such Board of Directors of this
Agreement or the Merger, or (ii) shall have approved or recommended, or proposed
to approve or recommend, a Takeover Proposal (it being understood and agreed
that any "stop-look-and-listen" communication by the Board of Directors of Aztar
to the stockholders of Aztar limited to the matters specified in Rule 14d-9(f)
of the Exchange Act, or any similar communication to the stockholders of Aztar
in connection with the commencement of a tender offer or exchange offer limited
to the "stop-look-and-listen" matters specified in Rule 14d-9(f), shall not be
deemed to constitute an approval or recommendation of a Takeover Proposal); and
(g) by Columbia, in the event of a material breach of Section 4.03 or
Section 5.01(b).
Section 7.02 Effect of Termination. In the event of termination of this
Agreement by either Columbia or Aztar as provided in Section 7.01, this
Agreement shall forthwith become null and void and have no effect, without any
liability or obligation on the part of Aztar or Columbia, other than the fee and
indemnity provisions of Section 4.01(b), Section 4.01(c), and Section 4.01(d),
and the confidentiality provisions of Section 5.02, Section 5.07, this Section
7.02 and Article VIII, which provisions shall survive such termination, and
except to the extent that such termination results from the willful and material
breach by a party of any of its representations, warranties, covenants or
agreements set forth in this Agreement and in the Custody and Security
Agreement, in which case such termination shall not relieve any party of any
liability or damages resulting from its willful and material breach of this
Agreement or in the case of Columbia, if all of the conditions to Columbia's
obligation to consummate the Merger are satisfied (other than the condition set
forth in Section 6.03(c)) (and, in the case of the condition set forth in
Section 6.03(c), either such condition has been satisfied or Aztar confirms to
Columbia in writing that it is willing and able to deliver the certificate
referred to in Section 6.03(c) as of the Closing Date) and Columbia fails to
consummate the Merger in accordance with the terms and conditions hereof as a
result of its failure to obtain the Financing.
Section 7.03 Amendment. This Agreement may be amended by the parties at
any time before or after the Stockholder Approval; provided, however, that after
any such approval, there shall not be made any amendment that by law requires
further approval by the stockholders of Aztar without the further approval of
such stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
Section 7.04 Extension; Waiver. At any time prior to the Effective
Time, a party may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties
54
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 7.03, waive compliance by the
other parties with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
ARTICLE VIII
General Provisions
Section 8.01 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 8.01
shall not limit any covenant or agreement of the parties that by its terms
contemplates performance after the Effective Time and such provisions shall
survive the Effective Time.
Section 8.02 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given (as of the time of delivery or, in the case of a telecopied communication,
of electronic confirmation) if delivered personally, telecopied (which is
electronically confirmed) or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Aztar, to:
Aztar Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopy No.: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Xx.
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxx
Xxxxxx X. Xxxxxxxxx
(b) if to any of Sussex, Columbia or Merger Sub, to:
Wimar Tahoe Corporation d/b/a Columbia Entertainment
000 Xxxxxxxxx Xxxxx
Xx. Xxxxxxxx, XX 00000 Telecopy No.: (859)
578-1190
Attention: Xxxxxxx X. XxxxXxxxxxx, Vice President,
Chief Financial Officer
55
with a copy to:
Katz, Teller, Xxxxx & Xxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
and to:
Columbia Sussex Corporation
000 Xxxxxxxxx Xxxxx
Xx. Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Chief Legal Counsel
Section 8.03 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person, where "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise;
(b) "Antitrust Laws" mean any antitrust, competition and/or commerce or
trade regulatory laws, rules and/or regulations of any Governmental Authority;
(c) "capital stock" or "shares of capital stock" means (a) with respect
to a corporation, as determined under the laws of the jurisdiction of
organization of such entity, capital stock or such shares of capital stock; (b)
with respect to a partnership, limited liability company, or similar entity, as
determined under the laws of the jurisdiction of organization of such entity,
units, interests, or other partnership or limited liability company interests;
or (c) any other equity ownership or participation;
(d) "Covered Contracts" means any of the following Contracts (whether
or not in writing) collectively with all exhibits and schedules to such
Contracts:
(i) any lease of real or personal property providing for
annual rentals of $500,000 or more;
(ii) any agreement or series of related agreements involving
aggregate commitments over the term thereof of, by or to Aztar or in
the aggregate of $2,500,000 or more;
56
(iii) any agreement or series of related agreements that may
involve payments or other consideration to or from Aztar or any of its
subsidiaries in excess of $2,500,000 over the term thereof;
(iv) any agreement or agreements containing material
indemnification or similar obligations on the part of Aztar or any of
its subsidiaries;
(v) any neutrality agreements;
(vi) any agreement or series of related agreement providing
for the acquisition or disposition of securities of any person or any
assets, in each case involving more than $2,500,000 individually or in
the aggregate;
(vii) any partnership, joint venture or other similar
agreement or arrangement relating to the formation, creation,
operation, management or control of any partnership or joint venture
material to Aztar or any of its subsidiaries or in which Aztar or any
of its subsidiaries owns any interest valued at more than $2,500,000
without regard to percentage voting or economic interest (unless
pursuant to such agreement or arrangement, Aztar and its subsidiaries
do not have a future funding obligation reasonably likely to require
funding of more than $2,500,000);
(viii) any Material Contract;
(ix) any non-competition Contract or other Contract that (I)
purports to limit either the type of business in which Aztar or its
subsidiaries (or, after the Effective Time, Columbia or its affiliates)
may engage or the manner or locations in which any of them may so
engage in any business or contains exclusivity, most favored nation,
preferred provider or similar provisions that affect the operation of
Aztar and its subsidiaries (or, after the Effective Time, Columbia or
its affiliates) or (II) would require the disposition of any material
assets or line of business of Columbia or its subsidiaries or, after
the Effective Time, Columbia or its affiliates;
(x) any Contract that contains a put, call or similar right
pursuant to which Aztar or any of its subsidiaries would be required to
purchase or sell, as applicable, any equity interests of any person or
assets that have a fair market value or purchase price of more than
$500,000; or
(xi) any other Contract or group of Contracts with a single
counterparty (including its affiliates) that, if terminated or subject
to a default by any party thereto, individually or in the aggregate,
would have or would reasonably be expected to have a material adverse
effect on Aztar;
(e) "Gaming Authority" means any Governmental Authority with
jurisdiction over any person's gaming operations; for the avoidance of doubt, in
all cases, the term Governmental Authority includes Gaming Authorities whether
or not so specified;
57
(f) "Gaming Laws" means the 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 any
person;
(g) "material adverse change" or "material adverse effect" means, when
used in connection with Aztar, Columbia or Sussex, as the case may be, any
change, effect, event, occurrence or state of facts (i) that is materially
adverse to the business, assets, properties, financial condition or results of
operations of such person and its subsidiaries taken as a whole but excluding
any of the foregoing resulting from (A) changes in international or national
political or regulatory conditions generally (in each case, to the extent not
disproportionately affecting the applicable person as compared to other gaming
companies), (B) changes or conditions generally affecting the U.S. economy or
financial markets or generally affecting the industry in which the applicable
person or any of its subsidiaries operates, or any act of terrorism or war
occurring after the date hereof (in each case, to the extent not
disproportionately affecting the applicable person as compared to other gaming
companies), (C) changes in tax rates in any state in which Aztar or its
subsidiaries operates, (D) the introduction of gaming in any state adjoining any
state in which Aztar or its subsidiaries operates, (E) any change in Law that
legalizes other forms of gaming in any state in which Aztar operates, as long as
such change in Law does not reduce or alter the scope, manner of operation,
type, nature or timing of any permitted gaming activities which Aztar or its
subsidiaries are permitted to conduct, (F) any change in state Law, as long as
such change in Law does not reduce or alter the scope, manner of operation,
type, nature or timing of any permitted gaming activities which the applicable
person or its subsidiaries are permitted to conduct and as long as such change
in Law does not disproportionately affect the applicable person as compared to
other gaming companies in the state, (G) any matters disclosed in Section
8.03(g) of the Aztar Disclosure Letter, or (H) any loss of employees during the
pendency of the Merger, any change resulting from the Missouri Closing or
Divestiture or any change in the status of Aztar's gaming license application in
Allentown, Pennsylvania, or (I) any change resulting from (i) actions with
respect to any Specified Assets as contemplated by Section 5.03(g) above, or
(ii) other actions taken at Columbia's request to obtain, or to eliminate the
need to obtain, any Required Governmental Consents or (ii) that prevents or
materially delays such person from performing its material obligations under
this Agreement or consummation of the transactions contemplated hereby;
(h) "Permitted Investments" shall mean:
a. direct obligations of the United States of America or any member of the
European Union or any agency thereof or obligations guaranteed by the
United States of America or any member of the European Union or any
agency thereof, in each case with maturities not exceeding two years;
b. time deposit accounts, certificates of deposit and money market
deposits issued by a bank or trust company that is organized under the
laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America having capital,
surplus and undivided profits in excess of $250 million
58
and whose long-term debt, or whose parent holding company's long-term
debt, is rated A (or such similar equivalent rating or higher by at
least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act);
c. repurchase obligations for underlying securities of the types described
in clause (a) above entered into with a bank meeting the qualifications
described in clause (b) above;
d. commercial paper issued by a corporation (other than an affiliate of
Columbia) organized and in existence under the laws of the United
States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of P-1 (or higher) according to Xxxxx'x, or A-1 (or
higher) according to S&P;
e. securities issued or fully guaranteed by any State, commonwealth or
territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least A by S&P or
A by Xxxxx'x;
f. shares of mutual funds whose investment guidelines restrict 95% of such
funds' investments to those satisfying the provisions of clauses (a)
through (e) above; and
g. money market funds that (i) comply with the criteria set forth in Rule
2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by
S&P and Aaa by Xxxxx'x and (iii) have portfolio assets of at least
$5,000.0 million;
(i) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(j) "solvent" means that, as of any date of determination, (a) the
amount of the "fair saleable value" of the assets of Columbia and its
subsidiaries (including Aztar and its subsidiaries) will, as of such date,
exceed the value of all of Columbia and its subsidiaries (including Aztar and
its subsidiaries), including contingent and other liabilities," as of such date,
as such quoted terms are generally determined in accordance with applicable
federal laws governing determinations of the insolvency of debtors, and, (b)
Columbia and its subsidiaries (including Aztar and its subsidiaries) will not
have, as of such date, an unreasonably small amount of capital for the operation
of the businesses in which it is engaged or proposed to be engaged following
such date, and (c) each of Columbia and its subsidiaries (including Aztar and
its subsidiaries) reasonably believes it will be able to pay its liabilities,
including contingent and other liabilities, as they mature. For purposes of this
definition, (i) "not have ...an unreasonably small amount of capital for the
operation of the businesses in which it is engaged or proposed to be engaged"
and "able to pay its liabilities, including contingent and other liabilities, as
they mature" means that Columbia and its subsidiaries (including Aztar and its
subsidiaries) reasonably believes it will be able to generate enough cash from
operations, asset dispositions or refinancing, or a combination thereof, to meet
its obligations as they become due; and
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(k) "subsidiary" means, with respect to any person, any other person,
whether incorporated or unincorporated, of which more than 50% of either the
equity interests in, or the voting control of, such other person is, directly or
indirectly through subsidiaries or otherwise, beneficially owned by such first
person.
Section 8.04 Interpretation and Other Matters. (a) When a reference is
made in this Agreement to an Article, Section or Exhibit, such reference shall
be to an Article or Section of, or an Exhibit to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a person
are also to its permitted successors and assigns. "Knowledge" of a person and
similar terms shall mean the actual knowledge of the executive officers of such
person.
(b) Each of Aztar and Columbia has or may have set forth information in
its respective disclosure letter in a section thereof that corresponds to the
section of this Agreement to which it relates. A matter set forth in one section
of a disclosure letter need not be set forth in any other section of the
disclosure letter so long as its relevance to the latter section of the
disclosure letter or section of this Agreement is readily apparent on the face
of the information disclosed in the disclosure letter to the person to which
such disclosure is being made. The fact that any item of information is
disclosed in a disclosure letter to this Agreement shall not be construed to
mean that such information is required to be disclosed by this Agreement. Such
information and the dollar thresholds set forth herein shall not be used as a
basis for interpreting the terms "material," "material adverse effect" or other
similar terms in this Agreement.
(c) Columbia agrees to cause Merger Sub to comply with its respective
obligations under this Agreement.
Section 8.05 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each party and delivered to the other parties.
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Section 8.06 Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein), the
Custody and Security Agreement and the Confidentiality Agreement (i) constitute
the entire agreement, and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of
this Agreement and (ii) except for the provisions of Section 5.06 (which shall
be enforceable by the Indemnified Parties), are not intended to and shall not
confer upon any person other than the parties any rights or remedies.
Section 8.07 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflict of
laws.
Section 8.08 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties hereto without the
prior written consent of the other party. Any attempted or purported assignment
in violation of the preceding sentence shall be null and void and of no effect
whatsoever. Subject to the preceding two sentences, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
Section 8.09 Enforcement. The parties agree that irreparable damage
would occur and that the parties would not have any adequate remedy at law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal or state court located
in the State of Delaware, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of the federal and
state courts located in the State of Delaware in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court, and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal or state court
in the State of Delaware.
Section 8.10 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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Section 8.11 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
Section 8.12 Alternative Structure. The parties agree to cooperate in
the consideration of alternative structures to implement the transactions
contemplated by this Agreement as long as there is no change in the economic
terms thereof and such change does not impose any material delay on, or
condition to, the consummation of the Merger, or adversely affect Aztar, prior
to the Effective Time, or Aztar's stockholders or result in liability to Aztar
directors or officers. Any such alternative structure shall constitute a "change
of control" with respect to the Aztar Employee Benefit Plans and Aztar
Employment Agreements to the same extent that the transactions contemplated
hereby constitute a "change of control" with respect to the applicable Plan or
Agreement.
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IN WITNESS WHEREOF, each of Aztar, Sussex, Columbia and Merger Sub has
caused this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
COLUMBIA SUSSEX CORPORATION
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
WIMAR TAHOE CORPORATION
D/B/A COLUMBIA ENTERTAINMENT
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief
Executive Officer
WT-COLUMBIA DEVELOPMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
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AZTAR CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
Vice President and Treasurer
64
