STOCKHOLDERS AGREEMENT
THIS
STOCKHOLDERS AGREEMENT is made and entered into as of September 3, 2006 (this
"Agreement")
among
Pinnacle Entertainment, Inc., a Delaware corporation ("Parent"),
American Real Estate Holdings Limited Partnership, a Delaware limited
partnership ("AREH"),
and
AREP Sands Holding, LLC, a Delaware limited liability company ("AREP Sands")
(AREH and AREP Sands are each referred to herein as an "Icahn Affiliated Party"
and, collectively, as the "Icahn Affiliated Parties").
WHEREAS,
Parent, Atlantic Coast Entertainment Holdings, Inc., a Delaware corporation
(the
"Company"
or
"ACE
Hi"),
ACE
Gaming, LLC, a New Jersey limited liability company ("ACE
Lo"),
AREH,
AREP Boardwalk Properties LLC, a Delaware limited liability company
("Boardwalk"),
PSW
Properties LLC, a Delaware limited liability company ("MLK
I"),
AREH
MLK LLC, a Delaware limited liability company ("MLK
II"),
Mitre
Associates LLC, a Delaware limited liability company ("MLK
III"
and,
together with Boardwalk, MLK I and MLK II, the "AREH
Subs"),
are
entering into an Acquisition Agreement dated as of the date hereof (as the
same
may be amended or supplemented to reflect any Increased Parent Transaction
(as
defined in Section 5(a) below), the "Acquisition
Agreement");
capitalized terms used but not defined herein shall have the meanings set forth
in the Acquisition Agreement;
WHEREAS,
the Icahn Affiliated Parties collectively Beneficially Own (as defined below)
an
aggregate of 6,344,074 shares of common stock, $0.01 par value per share, of
the
Company ("Company
Common Stock"),
consisting of 4,029,084 shares of Company Common Stock and 2,314,990 shares
of
Company Common Stock issuable upon conversion of $35,124,000 in aggregate
principal amount of 3% Notes of the Company due July 22, 2008 ("3%
Notes"),
representing in the aggregate approximately 63.44% of the outstanding shares
of
Company Common Stock on a Fully Diluted Basis (as defined in Section 5). The
Icahn Affiliated Parties do not Beneficially Own any of the warrants to purchase
Company Common Stock at $0.01 per share ("Warrants");
WHEREAS,
each Icahn Affiliated Party which is a record owner of shares of Company Common
Stock (individually, a "Stockholder",
and,
collectively, the "Stockholders")
is the
record owner of shares of Company Common Stock set forth opposite its name
on
Schedule 1 hereto (such shares of Company Common Stock, together with any other
shares of capital stock of the Company acquired by the Stockholder after the
date hereof and during the term of this Agreement, being collectively referred
to herein as the "Subject
Shares"
of the
Stockholder);
WHEREAS,
each Icahn Affiliated Party which is a record holder of Warrants, other rights
to acquire shares of Company Common Stock or 3% Notes is the record holder
of
such securities set forth opposite its name on Schedule 1 hereto (such Warrants,
other rights and 3% Notes, together with any other securities or other interests
in securities of the Company (other than the Subject Shares) acquired by such
Icahn Affiliated Party after the date hereof and during the term of this
Agreement, being collectively referred to herein as the "Other
Subject Securities"
of such
Icahn Affiliated Party);
WHEREAS,
the Icahn Affiliated Parties Beneficially Own 7,748,744 shares of common stock,
$.01 par value per share (the "GB
Common Stock"),
of GB
Holdings, Inc. ("GB
Holdings"),
representing approximately 77.5% of the outstanding shares of GB Holdings'
common stock. On September 29, 0000, XX Xxxxxxxx filed a voluntary petition
for
relief under Chapter 11 of Title 11 of the United States Code with the United
States Bankruptcy Court for the District of New Jersey (the "Bankruptcy
Court"),
Case
No. 05-42736JHW, and is currently operating as a debtor in possession in such
Chapter 11 case. Such Chapter 11 case of GB Holdings, and any all appeals and
related proceedings (including without limitation those relating to any Federal
or state avoiding statute, in a non-bankruptcy court), is referred to herein
as
the "Bankruptcy
Case";
WHEREAS,
each Icahn Affiliated Party which is a record holder of GB Holdings common
stock
is the record holder of such securities set forth opposite its name on Schedule
1 hereto; and
WHEREAS,
as a condition to its willingness to enter into the Acquisition Agreement,
Parent has requested that each Icahn Affiliated Party enter into this
Agreement.
NOW,
THEREFORE, the parties hereto agree as follows:
SECTION 1. Representations
and Warranties of Icahn Affiliated Parties.
The
Icahn Affiliated Parties jointly and severally represent and warrant to Parent
as of the date hereof as follows:
(a) Organization;
Authority; Execution and Delivery; No Conflicts; Enforceability.
Each
Icahn Affiliated Party (if not a natural person) is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it
is
organized. Each Icahn Affiliated Party has all requisite power and authority
to
execute and deliver this Agreement and (if it is a Stockholder) the Written
Consent of the Holders of Common Stock of the Company attached hereto as Exhibit
A (the "Stockholder Consent") and to perform its obligations hereunder and
comply with the terms hereof. The execution and delivery by each Icahn
Affiliated Party of this Agreement and the Stockholder Consent (if it is a
Stockholder) and the performance of its obligations hereunder and compliance
with the terms hereof have been duly authorized by all necessary action on
the
part of such Icahn Affiliated Party. Each Icahn Affiliated Party has duly
executed and delivered this Agreement, and this Agreement constitutes the legal,
valid and binding obligation of such Icahn Affiliated Party, enforceable against
such Icahn Affiliated Party in accordance with its terms. The execution and
delivery by each Icahn Affiliated Party of this Agreement and the Stockholder
Consent (if it is a Stockholder) do not, and the performance of its obligations
hereunder and compliance with the terms hereof will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of
time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result
in
the creation of any Lien (other than Liens created pursuant to this Agreement)
upon any of the assets of such Icahn Affiliated Party under, any provision
of
(i) any organizational documents of such Icahn Affiliated Party,
(ii) any Contract to which such Icahn Affiliated Party is a party or by
which assets of such Icahn Affiliated Party are bound or (iii) subject to
the filings and other matters referred to in the next sentence, any provision
of
any Judgment or Law applicable to such Icahn Affiliated Party or the assets
of
such Icahn Affiliated Party, other than, in the case of clauses (ii) and (iii)
above, any such items that, individually or in the aggregate, have not
materially impaired or delayed, and are not reasonably likely to materially
impair or delay, such Icahn Affiliated Party’s ability to perform its
obligations hereunder or comply with the terms hereof. No Consent of, or
registration, declaration or filing with, any Governmental Entity is required
to
be obtained or made by or with respect to each Icahn Affiliated Party in
connection with the execution, delivery and performance of this Agreement or
the
execution and delivery of the Stockholder Consent (if it is a Stockholder)
or
the performance of its obligations hereunder or the compliance with the terms
hereof other than (x) the filing with the SEC of such reports under the Exchange
Act as may be required in connection with this Agreement and (y) such other
Consents, registrations, declarations or filings that are contemplated by the
Acquisition Agreement or the failure of which to obtain or make are not,
individually or in the aggregate, reasonably likely to materially impair or
delay such Icahn Affiliated Party’s ability to perform its obligations hereunder
or comply with the terms hereof.
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(b) The
Subject Shares, Other Subject Securities and GB Holdings
Securities.
Each
Stockholder is the record and Beneficial Owner of, or is the trustee of a trust
that is the record holder of, and whose beneficiaries are the Beneficial Owners
of, and has good and marketable title to, the Subject Shares set forth opposite
its name on Schedule 1 attached hereto, free and clear of any Liens (other
than Liens created pursuant to the terms of this Agreement or arising under
federal or state securities Laws). Each Stockholder does not own, of record
or
Beneficially, any shares of capital stock of the Company other than the Subject
Shares set forth opposite its name on Schedule 1 attached hereto. Each
Stockholder does not own, of record or beneficially, any other securities of
or
interests in the Company, or any options, warrants, convertible securities,
exchangeable securities or other similar rights entitling the holder thereof
to
acquire shares of capital stock of the Company, other than the Subject Shares
and the Other Subject Securities set forth opposite its name on Schedule 1
attached hereto. The Other Subject Securities are not entitled to vote on the
approval of the Acquisition Agreement or the Purchase. Each Stockholder has
the
sole right to vote such Subject Shares, and none of such Subject Shares is
subject to any voting trust or other agreement, arrangement or restriction
with
respect to the voting of such Subject Shares, except as contemplated by this
Agreement. The Icahn Affiliated Parties and any Affiliates of Icahn do not
own,
of record or Beneficially, any shares of capital stock or other securities
of or
interests in the Company or GB Holdings other than the capital stock, other
securities and interests set forth on Schedule 1 attached hereto and a loan
made
by AREH to GB Holdings in the original principal amount of
$1,200,000.
(c) The
authorized capital stock of the Company consists of 10,000,000 shares of Company
Common Stock, and 5,000,000 shares of preferred stock, par value $.01 per share
(“Company
Preferred Stock”
and,
together with the Company Common Stock, the “Company
Capital Stock”).
As of
the date hereof, (i) 6,912,016 shares of
Company Common Stock were issued and outstanding, (ii) no shares of Company
Common Stock were held by the Company in its treasury, and (iii) no shares
of
Company Preferred Stock were issued or outstanding or reserved for issuance
or
were held by the Company in its treasury. As of the date of this Agreement,
other than Warrants to acquire 619,096 shares of Company Common Stock and
$37,458,970 in aggregate principal amount of 3% Notes which are convertible
into
2,468,886 shares of Company Common Stock, there are no (i) options,
warrants or other rights, agreements, arrangements or commitments of any kind
relating to issued or unissued Company Capital Stock, (ii) securities
convertible into or exchangeable for Company Capital Stock,
(iii) obligations of the Company or any of its Affiliates to issue or sell
any Company Capital Stock, or (iv) bonds, debentures, notes or other
indebtedness of Company Capital Stock having voting rights (or convertible
into
securities having such rights) issued and outstanding.
The
Icahn Affiliated Parties own of record a majority of the outstanding shares
of
Company Common Stock.
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SECTION 2. Representations
and Warranties of Parent.
Parent
hereby represents and warrants to the Icahn Affiliated Parties as follows:
Parent is duly organized, validly existing and in good standing under the laws
of the State of Delaware. Parent has all requisite corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated by the Acquisition Agreement. The execution and delivery by Parent
of this Agreement and consummation of the transactions contemplated by the
Acquisition Agreement have been duly authorized by all necessary action on
the
part of Parent. Parent has duly executed and delivered this Agreement, and
this
Agreement constitutes the legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms. The execution and
delivery by Parent of this Agreement do not, and the consummation of the
transactions contemplated by the Acquisition Agreement and compliance with
the
terms hereof will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or result in the
creation of any Lien upon any of the properties or assets of Parent under,
any
provision of (i) any organizational documents of Parent, (ii) any
Contract to which Parent is a party or by which any assets of Parent are bound
or (iii) subject to the filings and other matters referred to in the next
sentence, any provision of any Judgment or Law applicable to Parent or the
assets of Parent, other than, in the case of clauses (ii) and (iii) above,
any
such items that, individually or in the aggregate, have not, and are not
reasonably likely to, materially impair or delay Parent’s ability to consummate
the transactions contemplated by the Acquisition Agreement. No Consent of,
or
registration, declaration or filing with, any Governmental Entity is required
to
be obtained or made by or with respect to Parent in connection with the
execution, delivery and performance of this Agreement or the consummation of
the
transactions contemplated by the Acquisition Agreement, other than such
Consents, registrations and filings contemplated by the Acquisition
Agreement.
SECTION 3. Consent,
Irrevocable Proxy and Related Covenants Relating to Stockholders.
Each
Stockholder covenants and agrees as follows, and the Icahn Affiliated Parties
jointly and severally covenant and agree that they will cause each Stockholder
to perform the following:
(a) Immediately
following the execution and delivery of this Agreement, each Stockholder shall,
in accordance with Section 228 of the Delaware General Corporation Law, consent
to the approval and adoption of the Acquisition Agreement and the transactions
contemplated thereby by delivering to the Company the Stockholder Consent in
respect to all of the Subject Shares set forth next to the name of the
Stockholder on Schedule 1. Subject to any right of termination pursuant to
an
ACE Lo Termination (as defined below), such consent shall be
irrevocable.
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(b) Each
Stockholder hereby grants to Parent an irrevocable proxy to exercise, at any
time and from time to time, solely in order to approve the Acquisition Agreement
and the transactions contemplated thereby and the form, terms and provisions
thereof and the consummation by the Company and ACE Lo of the transactions
contemplated thereby, including the Purchase,: (i) all rights and powers of
such
Stockholder with respect to its Subject Shares to vote, give approvals,
consents, call meetings, give, receive and waive notices of meetings, and grant
proxies to others; and (ii) without limitation of the rights and powers referred
to in the preceding clause (i), all voting, approval, consent and waiver rights
and powers that such Stockholder possesses or may in the future possess as
record owner or Beneficial Owner of its Subject Shares, provided,
however,
that
until such time as the Stockholders have delivered to Parent the Stockholder
Consent with respect to a majority of the outstanding shares of Company Common
Stock, each Stockholder's irrevocable proxy grant to Parent shall include the
power to exercise voting power with respect to such Stockholder's Subject Shares
to prevent any other action, including any other merger and any consolidation,
sale of assets or securities, reorganization or recapitalization, liquidation
or
winding up of the Company or ACE Lo or any other extraordinary transaction
involving the Company or ACE Lo or any other corporate action the consummation
of which could reasonably be expected to, directly or indirectly, frustrate
the
purposes of, or prevent or delay the consummation of, the transactions
contemplated by this Agreement or the Acquisition Agreement. By giving this
proxy such Stockholder hereby revokes all other proxies granted by such
Stockholder to vote any of its Subject Shares solely with respect to the
foregoing matters. The power and authority hereby conferred shall not be
terminated by any act of such Stockholder or by operation of law, by lack of
appropriate power or authority or by the occurrence of any other event or events
except the Closing or an ACE Lo Termination and shall be binding upon all such
Stockholder's beneficiaries, distributees, successors, assigns and legal
representatives. If, after execution of this Agreement, such Stockholder shall
cease to have appropriate power or authority, Parent is nevertheless authorized
and directed to vote the Stockholder's Subject Shares in accordance with the
terms of this Agreement as if such lack of appropriate power or authority had
not occurred and regardless of notice thereof. This proxy is irrevocable, is
coupled with an interest and is granted in consideration of Parent's entering
into the Acquisition Agreement. This proxy and all rights and powers conferred
by this paragraph shall terminate upon the earlier to occur of (x) the
Closing and (y) an ACE Lo Termination.
(c) If
the
proxy granted in this Section 3 is invalid or is ineffective for any reason,
each Stockholder hereby irrevocably agrees to vote, give approvals, consents,
call meetings, give, receive and waive notices of meetings, and grant proxies
to
others in such manner as Parent may, in its sole discretion, deem necessary
or,
in Parent's reasonable discretion, desirable in order to secure the consent,
adoption and approval by the stockholders of the Company of the Acquisition
Agreement and the form, terms and provisions thereof and the consummation by
the
Company of the transactions contemplated thereby, including the Purchase. The
obligations of each Stockholder and all rights and powers conferred under this
Section 3(c) shall terminate upon the earlier to occur of (x) the Closing
and (y) an ACE Lo Termination.
(d) Each
Stockholder agrees that Parent may deliver a copy of this Agreement to the
Secretary of the Company and to any inspector or judges of elections, transfer
agents, registrars or others to whom Parent wishes to give notice of the rights
hereby granted.
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SECTION 4. Covenants
of Icahn Affiliated Parties.
The
Icahn Affiliated Parties jointly and severally covenant and agree as
follows:
(a) At
any
meeting of stockholders of the Company or at any adjournment thereof or in
any
other circumstances upon which an Icahn Affiliated Party’s vote, consent or
other approval is sought, such Icahn Affiliated Party agrees not to grant a
proxy to any person to vote in favor of, and such Icahn Affiliated Party shall
vote or consent (or cause to be voted or a consent given) the Subject Shares
and
Other Subject Securities of such Icahn Affiliated Parties against, (i) any
Takeover Proposal, and (ii) any amendment of the Company's certificate of
incorporation or bylaws or ACE Lo's operating agreement or other proposal or
transaction involving the Company, ACE Lo, any AREH Sub or any subsidiary
thereof, which amendment or other proposal or transaction in any manner is
reasonably likely to impede, frustrate, prevent, delay or nullify any provision
of the Acquisition Agreement, the Purchase or the consummation of any of the
transactions contemplated hereby or thereby or change in any manner the voting
rights of any class of Company capital stock. Each Icahn Affiliated Party shall
not commit or agree to take any action inconsistent with the foregoing. The
obligations of each Icahn Affiliated Party and all rights and powers conferred
under this Section 4(a) shall terminate upon the earlier to occur of (x) the
Closing and (y) an ACE Lo Termination.
(b) Except
as
contemplated by this Agreement, no Icahn Affiliated Party shall be restricted
from voting in favor of, against or abstaining with respect to any matter
presented to the stockholders or other securityholders of the
Company.
(c) In
any
circumstance in which an Icahn Affiliated Party’s or its Affiliate's vote,
consent or other approval is sought with respect to the AREH Subs, such Icahn
Affiliated Party agrees not to, and shall cause its Affiliate not to, grant
a
proxy to any person to vote in favor of, and such Icahn Affiliated Party shall
vote or consent (or cause to be voted or a consent given) any interests held
by
such Icahn Affiliated Parties or Affiliates against, (i) any AREH Subs
Takeover Proposal, and (ii) any amendment of the AREH Subs' respective
operating agreement or other organizational documents or other proposal or
transaction involving the Company, ACE Lo, any AREH Sub or any subsidiary
thereof, which amendment or other proposal or transaction in any manner is
reasonably likely to impede, frustrate, prevent, delay or nullify any provision
of the Acquisition Agreement, the Purchase or the consummation of any of the
transactions contemplated hereby or thereby or change in any manner the voting
rights of any class of Company capital stock. Each Icahn Affiliated Party shall
(and shall cause any of its Affiliates) not commit or agree to take any action
inconsistent with the foregoing. The obligations of each Icahn Affiliated Party
and all rights and powers conferred under this Section 4(c) shall terminate
upon
the earlier to occur of (x) the Closing and (y) a Complete Termination (as
defined below).
(d) Prior
to
the Closing, the Icahn Affiliated Parties shall cause each of AREH's
wholly-owned subsidiaries that hold 3% Notes (the "Applicable
Subsidiaries")
to
convert the 3% Notes it holds into equity securities of the Company and to
deliver a Demand Payment Notice (as defined in that certain indenture governing
the 3% Notes, dated as of July 22, 2004, by and among the Company, ACE Lo and
Xxxxx Fargo Bank, National Association, as Trustee (the “Indenture”))
in
order to cause the conversion of all 3% Notes held by others, in each case,
in
accordance with the terms of the Indenture (the "Conversion").
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(e) Other
than pursuant to the Conversion, until after the earlier of the Closing or
an
ACE Lo Termination, each Icahn Affiliated Party shall not (and shall cause
its
Affiliates not to) directly or indirectly (i) sell, transfer, pledge,
assign or otherwise dispose of (including by gift) (collectively, "Transfer"),
or
enter into any Contract, option or other arrangement with respect to the
Transfer of, or any profit sharing arrangement relating to, any Subject Shares,
any Other Subject Securities or any securities or interests such Icahn
Affiliated Party and its Affiliates owns or holds in GB Holdings, Boardwalk
or
the AREH Subs to or with any person other than pursuant to the Acquisition
Agreement or (ii) enter into any voting arrangement, whether by proxy,
voting agreement or otherwise, with respect to any Subject Shares or any Other
Subject Securities or any securities or interests it owns or holds in GB
Holdings, Boardwalk or the AREH Subs and shall not commit or agree to take
any
of the foregoing action, other than, in each case, any of the foregoing actions
that, individually or in the aggregate, are not reasonably likely to impair
or
delay, such Icahn Affiliated Party’s or its Affiliates' ability to perform its
obligations hereunder or comply with the terms hereof. The parties hereto hereby
acknowledge and agree that financing activities by the Icahn Affiliated Parties,
whether or not secured, that do not involve the direct Transfer of Subject
Shares or Other Subject Securities are not restricted by this Sections
(provided, however, that a foreclosure or other exercise of a secured party's
right to take title to or dispose of collateral involving Subject Shares or
Other Subject Shares shall be considered a direct Transfer).
The
obligations of each Icahn Affiliated Party and all rights and powers conferred
under this Section 4(e) shall terminate upon the earlier to occur of (x) the
Closing and (y) an ACE Lo Termination.
(f) Each
Icahn Affiliated Party acknowledges the terms and conditions of Section 9.4
(No
Solicitation) of the Acquisition Agreement and agrees to comply with such terms
and conditions to the extent applicable to such Icahn Affiliated
Party.
(g) Subject
to the actions permitted to be taken in accordance with Section 9.4 of the
Acquisition Agreement:
Each
Icahn Affiliated Party shall use commercially reasonable efforts (it being
understood that in no event shall such commercially reasonable efforts obligate
any Icahn Affiliated Party to pay money) 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 requested by Parent from the
Icahn
Affiliated Party in its capacity as a stockholder or other interestholder of
the
Company to consummate and make effective, in the most expeditious manner
reasonably practicable, the Purchase and the other transactions contemplated
hereby and by the Acquisition Agreement as in effect on the date hereof. In
its
capacity as a stockholder or other interestholder in GB Holdings, each Icahn
Affiliated Party shall (and shall cause its Affiliates to) refrain from taking
any action in the Bankruptcy Case for the purpose or with the intent of
impeding, frustrating, preventing, delaying or nullifying any provision of
the
Acquisition Agreement or the Purchase or the consummation of any of the
transactions contemplated hereby or thereby. In addition, each Icahn
Affiliated Party agrees not to (and shall cause its Affiliates not to) authorize
the filing of a bankruptcy petition by the Company or ACE Lo and not to directly
or indirectly cause an involuntary bankruptcy petition to be filed against
the
Company or ACE Lo. The
obligations of each Icahn Affiliated Party and all rights and powers conferred
under this Section 4(g) shall terminate upon the earlier to occur of (x) the
Closing and (y) an ACE Lo Termination.
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(h) The
Icahn
Affiliated Parties, on the one hand, and Parent and/or any of its Affiliates,
on
the other hand, shall not issue any press release or make any other public
statement with respect to the Purchase or any transaction contemplated hereby
or
by the Acquisition Agreement, except after having provided the other the
reasonable opportunity for review and comment on such press release or other
public statement by, the other party to the extent practicable, except as any
party, after consultation with counsel, determines is required by applicable
law
or applicable rule or regulation of any national securities exchange on such
party's securities are listed; provided that the provisions of this paragraph
shall not require prior consultation with respect to any disclosure containing
the same or substantially similar information which the other party previously
had the opportunity to review.
(i) Each
Icahn Affiliated Party hereby consents to and approves the actions taken by
the
Board of Directors of the Company in approving the Acquisition Agreement, the
sale of substantially all the assets contemplated therein and the other
transactions contemplated thereby.
SECTION 5. Payments
to Parent in the Event of an Alternative Disposition.
(a) If:
(A) the
Acquisition Agreement is terminated pursuant to an ACE Lo Termination or a
Complete Termination (i) by the Company pursuant to Section 11.1(g) of the
Acquisition Agreement, (ii) by Parent pursuant to Section 11.(d) or Section
11.1(h) of the Acquisition Agreement, or (iii) by either Parent or the Sellers
pursuant to Section 11.1(b) or 11.1(c), and,
in the
case of a termination described in clauses (i), (ii) or (iii), within twelve
(12) months following such termination, the Company, ACE Lo, the AREH Subs,
and/or any Icahn Affiliated Party or any of their Affiliates enters into a
definitive agreement with respect to a Superior Proposal, Takeover Proposal
and/or an AREH Subs Takeover Proposal (provided however that such requirement
shall also be deemed satisfied in the event of a termination of the Acquisition
Agreement described in clause (i) (I) in the event that the definitive agreement
with respect to the Superior Proposal giving rise to such termination is entered
into at any time following such termination but is not consummated and within
twelve (12) months following the termination of the definitive agreement
relating to such Superior Proposal the Company enters into any definitive
agreement with respect to a Superior Proposal, Takeover Proposal and/or AREH
Subs Takeover Proposal, or (II) in the event that the Company does not enter
into the definitive agreement with respect to the Superior Proposal giving
rise
to such termination, but within twelve (12) months following the termination
of
discussions with the other party regarding such Superior Proposal (but in the
case of this clause (II), in no event later than twenty-four (24) months
following the termination of the Acquisition Agreement described in clause
(i)
above) the Company enters into any definitive agreement with respect to a
Superior Proposal, Takeover Proposal and/or AREH Subs Takeover Proposal)
and
the
transactions contemplated by such Superior Proposal, Takeover Proposal and/or
AREH Subs Takeover Proposal (any such transaction, a “Third
Party Transaction”)
are
consummated, or
(B) prior
to
the earlier of (x) the Closing or (y) an ACE Lo Termination or a Complete
Termination, an Applicable Court determines that GB Holdings is deemed to own
(either directly or through one or more wholly-owned and/or majority-controlled
subsidiaries or through nominees) the Casino Land and/or the Traymore Land
and a
Takeover Proposal and/or an AREH Subs Takeover Proposal (substituting GB
Holdings for ACE Hi and ACE Lo in such definitions if applicable) in lieu of
the
Acquisition Agreement is (i) approved or required by an order of, or pursuant
to
an approved process (including without limitation an auction) ordered by, an
Applicable Court and consummated or (ii) consummated pursuant to or in
furtherance of the terms of a plan of reorganization in an Applicable Bankruptcy
Case, including pursuant to any process (including without limitation an
auction) conducted by a Chapter 7 or 11 trustee or a liquidating or creditors
trust established in an Applicable Bankruptcy Case, whether by reorganization,
recapitalization, dissolution, liquidation or otherwise (any such transaction,
a
“Bankruptcy
Court Transaction”),
or
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(C) (i)
Parent matches or exceeds the terms of a Superior Proposal pursuant to Section
9.4(b) of the Acquisition Agreement or (ii) for any other reason (including
without limitation pursuant to an auction or other proceeding by, or approved
or
required by, an Applicable Court or conducted pursuant to or in furtherance
of
the terms of a plan of reorganization in an Applicable Bankruptcy Case,
including by a Chapter 7 or 11 trustee or a liquidating or creditors trust
established in an Applicable Bankruptcy Case, whether by reorganization,
recapitalization, dissolution, liquidation or otherwise), Parent increases
the
purchase consideration paid for the Purchase or other acquisition of the
Properties (or entities owning the Properties) (any such transaction in clause
(i) or (ii), an “Increased
Parent Transaction”
and
together with any Third Party Transaction and any Bankruptcy Court Transaction,
an “Alternative
Disposition”)
and
the
transactions contemplated by such Increased Parent Transaction are
consummated,
then
the
Icahn Affiliated Parties shall, jointly and severally, pay to Parent (in
accordance with Section 5(c)) an aggregate amount in cash equal to the Excess
Profit (as defined below), if any, realized by the Icahn Affiliated Parties
and
their Affiliates from the consummation of the applicable Alternative
Disposition. The Excess Profit shall be paid to Parent irrespective of any
amounts Parent receives as a consequence of breakup or termination fees, if
any,
they receive pursuant to the Acquisition Agreement, except that such fees are
permitted to be included in the costs and expenses to be deducted from the
calculation of the Excess Profit below to the extent that such fees are paid
by
ACE Hi out of the proceeds of such Alternative Disposition.
(b) For
purposes of this Section 5, the following terms shall have the meanings set
forth below:
"Alternative
Disposition Consideration"
means,
without duplication, the portion of the purchase price (as finally determined
under the applicable definitive documents relating to such Alternative
Disposition) that would be received directly or indirectly, by the Icahn
Affiliated Parties and their Affiliates in respect of their debt claims and
equity interests in the Company, ACE Lo and GB Holdings or any
successor-in-interest or assignee of the foregoing pursuant to such Alternative
Disposition (w) determined on a Fully-Diluted Basis (as defined below), (x)
assuming the Company, ACE Lo, GB Holdings and any other entity holding such
consideration were liquidated (disregarding any equitable subordination of
interests or claims) immediately following the consummation of such Alternative
Disposition, (y) after deduction of reasonable costs and expenses (but excluding
income taxes of the security holders), and (z) valuing any non-cash
consideration at its Fair Market Value (as defined below) on the date of such
consummation; provided,
however,
that in
no event shall GB Holdings be deemed to be an Affiliate of any Icahn Affiliated
Parties. In the event that any Icahn Affiliated Parties or any of their
Affiliates is the acquirer in an Alternative Disposition, the Fair Market Value
of any continuing ownership interest in the entity or entities that result
from
such Alternative Disposition held by any Icahn Affiliated Parties or any of
their Affiliates, together with any consideration conveyed by the acquirer,
shall be considered Alternative Disposition Consideration realized by the Icahn
Affiliated Parties and their Affiliates from such Alternative
Disposition.
An
"Applicable
Court"
shall
mean the Bankruptcy Court or any other court in the Bankruptcy Case or any
bankruptcy proceeding arising out of or relating to the GB Claims.
An
"Applicable
Bankruptcy Case"
shall
mean any of the Bankruptcy Case or any bankruptcy proceeding of any person
or
entity which has a direct or indirect ownership interest in the Casino Land
and/or the Traymore Land (including without limitation the Company or ACE
Lo).
-9-
"Baseline
Amount"
shall
mean, without duplication, the portion of the Purchase Price (as defined in
the
form of Acquisition Agreement entered into on the date hereof, the “Initial
Acquisition Agreement”))
(subject to all adjustments provided in the Initial Acquisition Agreement)
that
would have been received, directly or indirectly, by the Icahn Affiliated
Parties and their Affiliates in respect of their debt claims and equity
interests in the Company, ACE Lo and GB Holdings or any successor-in-interest
or
assignee of the foregoing pursuant to the consummation of the transactions
contemplated by the Initial Acquisition Agreement (had such transactions been
consummated on November 15, 2006 (w) determined on a Fully-Diluted Basis, (x)
assuming the Company, ACE Lo, GB Holdings and any other entity holding such
consideration were liquidated (disregarding any equitable subordination of
interests or claims) immediately following the consummation of such Alternative
Disposition, (y) after deduction of reasonable costs and expenses and payments
to creditors (but excluding income taxes of the security holders), and (z)
valuing any non-cash consideration at its Fair Market Value on the date of
such
consummation; provided,
however,
that in
no event shall GB Holdings be deemed to be an Affiliate of any Icahn Affiliated
Parties. To
the
extent that such Alternative Disposition involves only the Casino Property
(or
ACE Lo) or portion thereof or only the Traymore Property (or Boardwalk) or
portion thereof, then the Baseline Amount shall be adjusted to correspond to
that portion of the Purchase Price in the Initial Acquisition Agreement
corresponding to the Closing Ace Purchase Price or portion thereof or the AREH
Purchase Price or portion thereof, as applicable.
"Excess
Profit"
means
the amount by which the Alternative Disposition Consideration exceeds the
Baseline Amount (but not less than zero) calculated consistent with the
methodology set forth in Schedule 2 hereto.
"Fair
Market Value"
means,
with respect to any non-cash consideration consisting of:
(i) securities
listed on a national securities exchange or traded on the Nasdaq National
Market, an amount equal to the average closing price per share of such security
as reported on such exchange or Nasdaq National Market for the ten trading
days
prior to the date of determination; and
(ii) consideration
which is other than securities of the form specified in clause (i) above, an
amount determined by a nationally recognized independent investment banking
firm
mutually agreed upon by the parties within 10 business days of the event
requiring selection of such banking firm; provided,
however,
that if
the parties are unable to agree within two business days after the date of
such
event as to the investment banking firm, then the parties shall each select
one
firm, and those firms shall select a third investment banking firm, which third
firm shall make such determination, provided
further,
that
the reasonable and customary fees and expenses of all such investment banking
firms shall be borne equally by Parent, on the one hand, and the Stockholders,
on the other hand. The determination of the Fair Market Value of any non-cash
consideration by the investment banking firm shall be binding upon the
parties.
"Fully-Diluted
Basis"
shall
mean the equity interests of the Company, ACE Lo and GB Holdings held by the
Icahn Affiliated Parties and their Affiliates assuming that all outstanding
Warrants of all holders thereof were exercised and that all options, other
rights (other than the Warrants), convertible securities and exchangeable
securities (including, without limitation, the 3% Notes) in the Company, ACE
Lo
and GB Holdings or any successor-in-interest or assignee of the foregoing
outstanding on the date of consummation of the Alternative Disposition were
exercised or converted into or exchanged for equity interests in the Company,
ACE Lo and GB Holdings, in each case in accordance with the terms of such
securities.
(c) Calculation
and Payment of Excess Profit.
-10-
(i) Within
three business days after the consummation of a Third Party Transaction or
a
Bankruptcy Court Transaction or concurrently with the consummation of an
Increased Parent Transaction, as the case may be, the Icahn Affiliated Parties
shall (i) pay to Parent the Icahn Affiliated Parties’ good faith estimate of the
Excess Profit (the “Estimated
Excess Profit”),
if
any, payable under this Section 5, by wire transfer of same day funds to an
account designated by Parent to the Icahn Affiliated Parties in writing prior
to
the date of such payment and (ii) provide to Parent a written statement
substantially in the form of Schedule 2 hereto illustrating the Icahn Affiliated
Parties’ calculation of the Estimated Excess Profit, which calculation shall be
performed on a basis consistent with Schedule 2 hereto. Within three business
days following the date on which the purchase price payable pursuant to the
applicable Alternative Disposition is finally determined under the applicable
definitive documents relating to such Alternative Disposition (the “Final
Purchase Price”),
the
Icahn Affiliated Parties shall provide to Parent a written statement (the
“IAP
Final Statement”)
substantially in the form of Schedule 2 hereto illustrating the Icahn Affiliated
Parties’ calculation of the final Excess Profit (the “IAP
Final Excess Profit”)
based
on the Final Purchase Price, which calculation shall be performed on a basis
consistent with Schedule 2 hereto.
(ii) If
Parent
shall disagree with the calculation of the IAP Final Excess Profit, it shall,
within thirty (30) business days after its receipt of the IAP Final Statement,
notify the Icahn Affiliated Parties of such disagreement in writing, setting
forth in detail the particulars of such disagreement. In the event that Parent
does not provide such notice of disagreement within such thirty (30) business
day period, Parent shall be deemed to have accepted the IAP Final Statement
and
the calculation of the IAP Final Excess Profit set forth therein, which shall
be
final, binding and conclusive for purposes of this Section 5 with respect to
the
payment of any Excess Profit. In the event any such notice of
disagreement is timely provided, Parent and the Icahn Affiliated Parties, in
conjunction with their respective independent accounting firms, shall use
commercially reasonable efforts for a period of ten (10) business days (or
such
longer period as they may mutually agree) to resolve any disagreements with
respect to the calculation of the Excess Profit. If, at the end of such period,
they are unable to resolve such disagreements, then an independent accounting
firm of recognized national standing with no existing relationship with any
of
the parties and which Parent and the Icahn Affiliated Parties shall not have
otherwise retained on other matters prior to the resolution of the IAP Final
Excess Profit or, to the extent Parent and the Icahn Affiliated Parties cannot
agree on such independent accounting firm, an arbitrator from the National
Panel
of Professional Accounting and Related Services Disputes of the American
Arbitration Association selected by the mutual agreement of Parent and the
Icahn
Affiliated Parties (the “Auditor”;
provided, however, if Parent and ACE Hi have selected an Auditor pursuant to
the
Acquisition Agreement, then such Auditor shall be the Auditor under this
Agreement) shall resolve any remaining disagreements provided, that if Parent
and the Icahn Affiliated Parties cannot mutually agree on an Auditor, any
remaining disagreements shall be resolved by a court of competent jurisdiction
in accordance with Section 8(l) hereof. For the avoidance of doubt, the
following procedures by the Auditor shall only be applicable if Parent and
the
Icahn Affiliated Parties mutually agree on the selection of an Auditor. The
parties and the Auditor shall agree on reasonable procedures for determining
the
disputed line items; provided,
that,
that
such procedures shall include the following: (i) each of Parent, on the one
hand, and the Icahn Affiliated Parties, on the other hand, shall have the right
to make one (1) written submission to the Auditor regarding the disputed line
items submitted to the Auditor, (ii) each party shall have the right to make
one
(1) written submission to the Auditor in response to the other party’s written
submission in subclause (i), (iii) the Auditor may submit follow-up questions
to
either party, and such parties shall have the right to respond to such
questioning by the Auditor, (iv) each party shall have the right to submit
one
written response to the other party’s response to the Auditor pursuant to
subclause (iii), and (v) copies of all written materials submitted to the
Auditor (and summaries of all discussions with the Auditor) shall be promptly
provided to the other party. The Auditor shall promptly deliver to Parent,
on
the one hand, and the Icahn Affiliated Parties, on the other hand, its
determination in writing, which determination shall be made subject to the
definitions and principles set forth in this Agreement and shall select either
the position of Parent, on the one hand, or the Icahn Affiliated Parties, on
the
other hand, and no compromise position, with respect to each of the disputed
line items submitted to the Auditor. The Auditor shall determine as promptly
as
practicable whether the IAP Final Statement and the calculation of the IAP
Final
Excess Profit set forth therein was prepared in accordance with the standards
set forth in this Agreement and, only with respect to the disagreements
submitted to the Auditor, whether and to what extent (if any) the Estimated
Excess Profit requires adjustment. The Auditor shall promptly deliver to Parent
and the Icahn Affiliated Parties its determination in writing, which
determination shall be made subject to the definitions and principles set forth
in this Agreement, and shall be (x) consistent with either the position of
Parent or the Icahn Affiliated Parties or (y) between the positions of
Parent and the Icahn Affiliated Parties (the amount of Excess Profit, if any,
as
finally determined pursuant to this Section 5(c)(ii), the “Final
Excess Profit”).
The
fees and expenses of the Auditor shall be paid one-half by Parent and one-half
by the Icahn Affiliated Parties. The determination of the Auditor shall be
final, binding and conclusive for purposes of this Section 5 and enforceable
as
an arbitration award, and shall represent the exclusive remedy with respect
to
the determination of any Excess Profit. The date on which the Excess Profit
is
finally determined in accordance with this Section 5(c) is hereinafter referred
to as the “Excess
Profit Determination Date.”
-11-
(iii) Within
three business days of the Excess Profit Determination Date, the amount (which
may be a positive or negative number) equal to
(x) the
Final Excess Profit, minus
(y) the
Estimated Excess Profit (such amount, the “Excess
Profit Adjustment”)
shall
be
paid (A) from Parent to the Icahn Affiliated Parties (if the Excess Profit
Adjustment is a negative amount), in cash by wire transfer of immediately
available funds to an account designated in writing by the Icahn Affiliated
Parties to Parent prior to the date of such payment or (B) from
the
Icahn Affiliated Parties to Parent (if the Excess Profit Adjustment is a
positive amount), in cash by wire transfer of immediately available funds to
an
account designated in writing by Parent to the Icahn Affiliated Parties prior
to
the date of such payment.
SECTION 6. Termination.
This
Agreement, other than Section 4(c) and Section 5 hereof, shall terminate
upon the earliest of (i) the Closing and (ii) an ACE Lo Termination,
other than with respect to the liability of any party for breach hereof prior
to
such termination. Section 4(c) shall terminate upon the earliest of (i) the
Closing and (ii) a Complete Termination. Section 5 hereof shall terminate
upon the expiration of all rights thereunder.
SECTION 7. Additional
Matters.
(a) The
Icahn
Affiliated Parties shall, from time to time, execute and deliver, or cause
to be
executed and delivered, such additional or further consents, documents and
other
instruments as Parent may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement and the Acquisition
Agreement.
(b) No
person
executing this Agreement who is or becomes during the term hereof a director
or
officer of the Company makes any agreement or understanding herein in his or
her
capacity as such director or officer of the Company. Each Stockholder signs
solely in its capacity as the record holder and Beneficial Owner of, or the
trustee of a trust whose beneficiaries are the Beneficial Owners of, the
Stockholder’s Subject Shares and/or Other Subject Securities and nothing herein
shall limit or affect any actions taken by any Stockholder in his capacity
as an
officer or director of the Company to the extent specifically permitted by
the
Acquisition Agreement.
SECTION 8. General
Provisions.
(a) Definition
of Beneficially Own or Beneficial Ownership.
For
purposes of this Agreement, the terms "Beneficially Own" or "Beneficial
Ownership" or variants thereof with respect to any securities shall mean having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
including pursuant to any agreement, arrangement or understanding, whether
or
not in writing. Without duplicative counting of the same securities by the
same
holder, securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons (who are Affiliates of such Person
excluding officers and directors of the Company) who together with such Person
would constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act.
(b) Amendments.
This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.
(c) Notice.
All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to Parent in accordance with Section 13.3 of the
Acquisition Agreement and to the Stockholders at their respective addresses
set
forth on Schedule 1 hereto (or at such other address for a party as shall be
specified by like notice).
-12-
(d) Interpretation.
When a
reference is made in this Agreement to a Section or Schedule, such reference
shall be to a Section of, or Schedule to, this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. 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 "hereby", "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. The words "date
hereof" shall refer to the date of this Agreement. The term "or" is not
exclusive. The word "extent" in the phrase "to the extent" shall mean the degree
to which a subject or other thing extends, and such phrase shall not mean simply
"if". The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms. Any agreement or instrument defined
or referred to herein or in any agreement or instrument that is referred to
herein means such agreement or instrument as from time to time amended, modified
or supplemented unless otherwise specified. References to a person are also
to
its permitted successors and assigns.
(e) Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule or Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
(f) Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement. This Agreement shall become effective
against any Stockholder when one or more counterparts have been executed by the
Stockholder and delivered to Parent. In respect of each Stockholder, this
Agreement shall become effective against Parent when one or more counterparts
have been signed by Parent and delivered to each Stockholder. Each party need
not sign the same counterpart.
(g) Trust
Funds.
In the
event that any party hereto should receive any funds that are to be paid to
another party pursuant to the terms of this Agreement, then the receiving party
shall hold such funds in trust for the benefit of the party entitled to receive
such funds and shall promptly pay such funds to the party entitled to receive
such funds in accordance with this Agreement.
(h) Recapitalization.
In the
event of a stock dividend or distribution, or any change in the Subject Shares
or Other Subject Securities by reason of any split-up, recapitalization,
combination, merger, consolidation, exchange of securities or the like, or
change or exchange ordered by any Applicable Court, the terms "Subject Shares"
and "Other Subject Securities" shall include, without limitation, all such
stock
dividends and distributions and any securities, interests or claims into which
for which any or all of the Subject Shares or Other Subject Securities (or
any
class thereof) may be changed or exchanged as may be appropriate to reflect
such
event (the "New Interests") and all obligations in this Agreement, including
the
obligation to grant a security interest, shall relate to the New Interests,
to
the extent applicable.
(i) Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (ii) is not intended to confer
upon any person other than the parties hereto any rights or remedies
hereunder.
(j) 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 conflicts of law thereof.
-13-
(k) Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties without the prior written consent of the
other
parties, except that (a) Parent may, without such prior written consent of
any
other party hereto, transfer or assign its rights hereunder (including without
limitation its right to receive Excess Profits) to one or more of its direct
or
indirect subsidiaries, written notice of which shall be given to the Icahn
Affiliated Parties, provided
that no
transfer or assignment shall relieve Parent from any of its agreements or
obligations hereunder. Any assignment in violation of this Section 8(k) shall
be
void. Subject to the preceding sentences, this Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
(l) Enforcement.
The
parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement were not performed in accordance with their
specific terms or 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 Delaware state court or any Federal 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
(i) consents to submit itself to the personal jurisdiction of any Delaware
state court or any Federal court located in the State of Delaware in the event
any dispute arises out of this Agreement or any transaction contemplated hereby,
(ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court,
(iii) agrees that it will not bring any action relating to this Agreement
or any transaction in any court other than a Delaware state court or any Federal
court sitting in the State of Delaware and (iv) waives any right to trial
by jury with respect to any claim or proceeding related to or arising out of
this Agreement or any transaction contemplated hereby.
(m) Definition
of "ACE Lo Termination" and "Complete Termination".
For
purposes of this Agreement, the term "ACE Lo Termination" shall mean either
(i)
a termination of the Acquisition Agreement in accordance with its terms as
between Buyer and the ACE Selling Parties pursuant to Section 11.1(g) of the
Acquisition Agreement or (ii) a Complete Termination. For purposes of this
Agreement, the term "Complete Termination" shall mean a termination of the
Acquisition Agreement in accordance with its terms as between Buyer and the
Selling Parties pursuant to any provision of Section 11.1 of the Acquisition
Agreement other than Section 11.1(g) thereof. In the event that Buyer elects
to
effect a Revival pursuant to Section 9.4(e)(iii) of the Acquisition Agreement,
then the rights and obligations of Parent and the Icahn Affiliated Entities
under this Agreement shall also be reinstated in full, to the extent possible,
on the same terms and conditions as in this Agreement, modified as appropriate
to reflect changes in the timing and circumstances surrounding the transaction,
and the parties shall enter into appropriate documents and agreements for such
reinstatement as promptly as practicable.
[SIGNATURE
PAGE FOLLOWS]
-14-
IN
WITNESS WHEREOF, each party has duly executed this Agreement, all as of the
date
first written above.
| PINNACLE ENTERTAINMENT, INC. | |
| By: /s/ Xxxxxx X. Xxx | |
| Name: Xxxxxx X. Xxx | |
| Title: Chief Executive Officer |
[SIGNATURE
PAGE TO STOCKHOLDERS
AGREEMENT]
S-1
| ICAHN AFFILIATED PARTIES | |
| AMERICAN REAL ESTATE HOLDINGS | |
| LIMITED PARTNERSHIP | |
| By: American Property Investors, Inc., | |
|
general
partner
|
|
| By: /s/ Xxxxxx Xxxxxxx | |
|
Name: Xxxxxx
Xxxxxxx
|
|
|
Its:
CFO
|
|
| AREP SANDS HOLDING, LLC | |
|
By:
American
Real Estate Holdings
|
|
| Limited Partnership, sole member | |
|
By: American
Property Investors, Inc.,
general partner
|
|
| By: /s/ Xxxxxx Xxxxxxx | |
| Name: Xxxxxx Xxxxxxx | |
| Its: CFO |
EXHIBIT
A
WRITTEN
CONSENT
OF
THE
HOLDERS
OF COMMON STOCK
OF
ATLANTIC
COAST ENTERTAINMENT HOLDINGS, INC.
Dated
as
of [ ], 2006
Pursuant
to Section 228 of the General
Corporation
Law of the State of Delaware
The
undersigned, the holder of record of 4,029,084
shares
of
Common Stock, $0.01 par value per share (the "Company Common Stock"), of
Atlantic Coast Entertainment Holdings, Inc., a Delaware corporation (the
"Company"), representing at least a majority of the issued and outstanding
shares of Company Common Stock, hereby consents to the adoption of the following
resolutions without a meeting pursuant to Section 228(a) of the Delaware General
Corporation Law with the intent that said resolutions shall be as valid and
effectual as if they had been adopted and ratified at a formal meeting of
stockholders duly convened, which consent will be effective when the minimum
number of shares required to approve the action are obtained:
WHEREAS,
the Board of Directors of the Company (the "Board") has approved and the parties
have entered into that certain Acquisition Agreement dated as of September
3,
2006 by and among Pinnacle Entertainment, Inc., a Delaware corporation
("Parent"), the Company, ACE Gaming, LLC, a New Jersey limited liability company
("ACE Lo") and American Real Estate Holdings Limited Partnership, a Delaware
limited partnership ("AREH"), AREP Boardwalk Properties LLC, a Delaware limited
liability company ("Boardwalk"), PSW Properties LLC, Delaware limited liability
company ("MLK I"), AREH MLK LLC, a Delaware limited liability company ("MLK
II"), Mitre Associates LLC, a Delaware limited liability company ("MLK III"),
pursuant to which the Company will sell substantially all of its assets to
Parent or its assignee (the "Proposed Purchase");
A-1
WHEREAS,
reference is made to the Stockholders Agreement by and among Parent and the
Stockholders of the Company party thereto (the "Stockholders
Agreement");
NOW,
THEREFORE, BE IT RESOLVED that the form, terms and provisions of the executed
Acquisition Agreement, in the form attached hereto as Exhibit A, are hereby
approved and adopted in all respects, and that the Proposed Purchase described
therein is hereby approved;
RESOLVED
FURTHER, that the number of shares of Common Stock of the Company set forth
in
the preamble above are owned of record by the undersigned on the date of this
consent and that this consent is being given with respect to all of the shares
of Common Stock of the Company set forth in the preamble above;
RESOLVED
FURTHER, that the directors and officers of the Company be, and they are or
any
one of them is, hereby authorized, empowered and directed, from time to time,
in
the name and on behalf of the Company under its seal, if desired, to execute,
make oath to, acknowledge and deliver, any and all agreements, orders,
directives, certificates, notices, assignments and other documents, instruments
and papers and to take or cause to be taken such steps as they may determine
to
be necessary, appropriate or advisable to carry out the intent and purposes
of
the foregoing resolutions, such determination to be evidenced conclusively
by
the execution and delivery of such documents and the taking of such
steps.
This
action by written consent may be signed in counterparts, each of which shall
be
deemed an original, and all of which together shall constitute one instrument.
This action shall be delivered, by hand or by certified or registered mail,
return receipt requested, to the Company by delivery to its registered office
in
the State of Delaware, to the Company's principal place of business or to an
officer or agent of the Company having custody of the book in which proceedings
of meetings of stockholders of the Company are recorded, pursuant to Section
228(a) of the General Corporation Law of the State of Delaware and shall be
effective as of the date of such delivery.
*
* * *
*
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
A-2
IN
WITNESS WHEREOF, the undersigned has executed this Written Consent as of the
date first set forth above.
| AREP SANDS HOLDING, LLC | |
| By: | |
| Name: | |
| Its: | |
A-3
Exhibit
A
A-4
