Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
PINNACLE ENTERTAINMENT, INC.,
PNK DEVELOPMENT 1, INC.,
and
AZTAR CORPORATION
Dated as of March 13, 2006
i
TABLE OF CONTENTS
ARTICLE I
The Merger
Section 1.01 The Merger..................................................1
Section 1.02 Closing 1
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; Exchange of Certificates
Section 2.01 Effect on Capital Stock.....................................2
Section 2.02 Exchange of Certificates....................................3
Section 2.03 Dissenting Shares...........................................5
ARTICLE III
Representations and Warranties
Section 3.01 Representations and Warranties of Aztar.....................6
Section 3.02 Representations and Warranties of Pinnacle..................23
ARTICLE IV
Covenants
Section 4.01 Covenants of Aztar Interim Operations.......................28
Section 4.02 Covenants of Pinnacle Interim Operations....................33
Section 4.03 No Solicitation by Aztar....................................33
Section 4.04 Other Actions...............................................36
Section 4.05. Control of the Aztar's Operations...........................36
ARTICLE V
Additional Agreements
Section 5.01 Preparation of the Proxy Statement; Stockholders Meeting....36
Section 5.02 Access to Information; Effect of Review.....................37
Section 5.03 Regulatory Matters; Reasonable Best Efforts.................37
Section 5.04 Stock Options; Restricted Stock and Equity Awards;
Stock Plans.................................................40
Section 5.05 Employee Matters............................................41
Section 5.06 Indemnification, Exculpation and Insurance..................42
Section 5.07 Fees and Expenses...........................................44
Section 5.08 Public Announcements........................................45
Section 5.09 Aztar Headquarters..........................................45
ARTICLE VI
Conditions Precedent
Section 6.01 Conditions to Each Party's Obligation to Effect the Merger..45
Section 6.02 Conditions to Obligations of Aztar..........................46
Section 6.03 Conditions to Obligations of Pinnacle.......................46
Section 6.04 Frustration of Closing Conditions...........................47
ARTICLE VII
Termination, Amendment and Waiver
Section 7.01 Termination.................................................47
Section 7.02 Effect of Termination.......................................48
Section 7.03 Amendment...................................................49
Section 7.04 Extension; Waiver...........................................49
ARTICLE VIII
General Provisions
Section 8.01 Nonsurvival of Representations and Warranties...............49
Section 8.02 Notices 49
Section 8.03 Definitions.................................................50
Section 8.04 Interpretation and Other Matters............................54
Section 8.05 Counterparts................................................55
Section 8.06 Entire Agreement; No Third-Party Beneficiaries..............55
Section 8.07 Governing Law...............................................55
Section 8.08 Assignment..................................................55
Section 8.09 Enforcement.................................................55
Section 8.10 Severability................................................56
Section 8.11 WAIVER OF JURY TRIAL........................................56
Section 8.12 Alternative Structure.......................................56
AGREEMENT AND PLAN OF MERGER, dated as of March 13, 2006 (this
"Agreement"), by and among Pinnacle Entertainment, Inc., a Delaware
corporation ("Pinnacle"), Aztar Corporation, a Delaware corporation ("Aztar"),
and PNK Development 1, Inc., a Delaware corporation and a wholly owned
subsidiary of Pinnacle ("Merger Sub").
WHEREAS, the respective Boards of Directors of Pinnacle, Aztar 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,
with Aztar surviving that merger (the "Surviving Corporation") (the "Merger");
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 $38.00 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 (the
"Aztar Preferred Stock") will be converted into the right to receive $401.90
per share in cash; and
WHEREAS, Pinnacle and Aztar 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., local time, on a date selected by Pinnacle, 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;
Exchange of Certificates
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 2.02(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 2.03(a)) shall be converted into the right to
receive $38.00 per share in cash (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 2.02,
without interest.
(c) Conversion of Aztar Preferred Stock. Subject to Section 2.02(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 $401.90 per share in
cash, 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 (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. 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 2.02, without interest.
(d) Conversion of Merger Sub Common Stock. The aggregate of all shares 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
canceled.
Section 2.02 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Pinnacle shall enter into
an agreement with such bank or trust company as may be mutually agreed by
Pinnacle and Aztar (the "Paying Agent"), pursuant to which Pinnacle 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 Pinnacle 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 Pinnacle that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.02, 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 Time, Certificates are presented to Pinnacle, 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 Pinnacle, upon demand, and any
holders of the Certificates who have not theretofore complied with this
Article II shall thereafter look only to Pinnacle for payment of their claims
for Merger Consideration.
(e) No Liability. None of Pinnacle, 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 Pinnacle, 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 Pinnacle, 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 Pinnacle.
(g) Withholding Rights. Pinnacle 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 Pinnacle 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 Pinnacle 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 Pinnacle, the posting by such person of a bond in such
reasonable amount as Pinnacle 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.
(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 2.03 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 Pinnacle 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 2005 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
Pinnacle 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 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
35,899,464 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 44,736.662 shares of Aztar Preferred Stock
were issued or outstanding as of the date of this
Agreement.
As of March 10, 2006, 18,824,868 shares of Aztar Common Stock and no
shares of 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 to Pinnacle prior to the date hereof.
As of the date of this Agreement, (x) 3,592,996 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 March 10,
2006, there were an aggregate of 3,566,647 shares of Aztar
Common Stock reserved for issuance pursuant to the Aztar
Employee Stock Plans, including 3,043,494 shares in
respect of Aztar Employee Stock Options and no shares in
respect of Aztar Awards, an aggregate of 473,153 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 March 10, 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 March 10, 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
March 10, 2006, in accordance with their respective terms.
From March 10, 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 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 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
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 (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.
(e) Aztar SEC Reports; Financial Statements.
(i) Aztar has made available to Pinnacle 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.
(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.
(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 accordance with, 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 Pinnacle 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 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 Pinnacle 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 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 Financial Statements delivered to Pinnacle 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.
(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 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.
(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 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 Pinnacle. 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.
(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, is not 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;
(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 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
(i) 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.
(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 between
Aztar and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agreement") exempts Pinnacle and its affiliates and associates (as
defined therein) from the operation of the provisions of the Rights Agreement,
(y) none of Pinnacle, 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.
(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(q) 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 to Pinnacle
prior to the date hereof.
Section 3.02 Representations and Warranties of Pinnacle. Except as and to
the extent set forth in the letter dated the date of this Agreement and
delivered to Pinnacle by Aztar concurrently with the execution and delivery of
this Agreement (the "Pinnacle 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 Pinnacle Reports (as defined in Section
3.02(f)) filed on or after January 1, 2005 and prior to the date hereof
(excluding 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), Pinnacle represents and warrants to Aztar as
follows:
(a) Financing Commitments. Pinnacle 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 Pinnacle or any of their respective subsidiaries
which Pinnacle deems it 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"). Pinnacle 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 Pinnacle 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
Pinnacle's and Aztar's cash and cash equivalents, will be sufficient for
Pinnacle to pay the aggregate Merger Consideration and to consummate the
Consent/Tender Offers, 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, Pinnacle 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 Pinnacle on or prior the Closing Date. Nothing in this
Agreement shall prevent Pinnacle 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 Pinnacle 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 expected to have a
material adverse effect (as defined in Section 8.03) on Pinnacle. Each of
Pinnacle 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 Pinnacle.
(d) Authority. Each of Pinnacle 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 Pinnacle and Merger
Sub and the consummation by Pinnacle and Merger Sub of the transactions
contemplated hereby have been duly and validly unanimously adopted and
approved by the Board of Directors of Pinnacle and Merger Sub and by Pinnacle
as the sole shareholder of Merger Sub. No other corporate proceedings on the
part of Pinnacle, Merger Sub or their stockholders are necessary to authorize
the execution, delivery and performance of this Agreement by Pinnacle or
Merger Sub and the consummation by Pinnacle and Merger Sub of the Merger and
the other transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Pinnacle and Merger Sub and constitutes a
legal, valid and binding obligation of Pinnacle and Merger Sub enforceable
against Pinnacle 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, the Exchange Act; and (C) by, with, to or from
any Gaming Authority with jurisdiction over Aztar's or
Pinnacle's gaming operations required under any Gaming Law
applicable to Pinnacle, including those set forth in
Section 3.02(e)(i)(C) of the Pinnacle Disclosure Letter
(collectively, the "Pinnacle 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 Aztar
with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by
Pinnacle or any of its subsidiaries from, any Governmental
Authority in connection with the execution, delivery and
performance of this Agreement by Pinnacle and the
consummation by Pinnacle of the Merger and the other
transactions contemplated hereby, including the Financing,
or in connection with the continuing operation of the
business of Pinnacle 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 Pinnacle.
(ii) The execution, delivery and performance of this Agreement
by Pinnacle do not, and the consummation by Pinnacle of
the Merger and the other transactions contemplated hereby,
including the Financing, will not, constitute or result in
(A) a breach or violation of, or a default under, the
certificate of incorporation or by-laws of Pinnacle or the
comparable governing documents of any of its 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 Pinnacle or any of its
subsidiaries pursuant to any Contract binding upon
Pinnacle or any of its subsidiaries or, assuming (solely
with respect to performance of this Agreement and
consummation by Pinnacle 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 Pinnacle or any of its subsidiaries is subject; or
(C) any change in the rights or obligations of any party
under any Contract binding upon Pinnacle 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 Pinnacle.
(f) Pinnacle SEC Reports; Financial Statements.
(i) Pinnacle has made available to Aztar each registration
statement, report, proxy statement or information
statement prepared by it since December 31, 2002 and filed
with the SEC, including Pinnacle's Annual Report on Form
10-K for the year ended December 31, 2004 and Pinnacle's
Quarterly Reports on Form 10-Q for the quarterly periods
ending March 31, June 30 and September 30, 2005, each in
the form (including exhibits, annexes and any amendments
thereto) filed with the SEC. Pinnacle 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
"Pinnacle Reports"). Each of the Pinnacle Reports filed or
furnished on or prior to the date hereof, at the time of
its filing (except as and to the extent such Pinnacle
Report has been modified or superseded in any subsequent
Pinnacle Report filed and publicly available prior to the
date of this Agreement), complied or, in the case of any
Pinnacle Reports filed or furnished after the date hereof,
will comply in all material respects with the applicable
requirements of each of the Securities Act and the
Exchange Act and the rules and regulations thereunder and
complied 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 Pinnacle Reports did
not, and any Pinnacle 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.
(ii) Each of the consolidated balance sheets included in or
incorporated by reference into the Pinnacle Reports
(including the related notes and schedules) fairly
presents, or, in the case of the Pinnacle Reports filed or
furnished after the date hereof, will fairly present in
all material respects the consolidated financial position
of Pinnacle 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 Pinnacle Reports
(including any related notes and schedules) fairly
presents or in the case of the Pinnacle 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 Pinnacle 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 GAAP consistently applied during the
periods involved, except as may be noted therein.
(iii) All filings (other than immaterial filings) required to be
made by Pinnacle 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 Pinnacle.
(g) Absence of Certain Changes or Events. Since September 30, 2005 and
prior to the date hereof, there has not been any material adverse effect on
Pinnacle 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 Pinnacle. Since September 30, 2005 and prior to the date hereof,
Pinnacle 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 accordance with, the ordinary course of such
businesses.
(h) Permits; Compliance with Laws and Orders. The businesses of each of
Pinnacle and its 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 Pinnacle. No investigation, review, proceeding, notice of violation, order
of forfeiture or complaint by any Governmental Authority, including any Gaming
Authority, with respect to Pinnacle or any of its subsidiaries is pending or,
to the knowledge of Pinnacle, 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 Pinnacle. Each of Pinnacle and its 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 Pinnacle. 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 Pinnacle, 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 Pinnacle.
(i) 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
Pinnacle, threatened against Pinnacle 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 Pinnacle, threatened against Pinnacle 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 Pinnacle. None of Pinnacle 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 Pinnacle.
(j) Receipt of Licenses. As of the date hereof, to the knowledge of
Pinnacle, there is no state of facts that would be reasonably likely to
prevent the receipt by Pinnacle of a new gaming license in a jurisdiction in
which Pinnacle is not currently licensed which Pinnacle is required to obtain
in connection with the consummation of the transactions contemplated hereby.
(k) Ownership and Operations of Merger Sub. Pinnacle 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.
(l) Brokers and Finders. Neither Pinnacle nor any of its 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. Pinnacle has employed Bear, Xxxxxxx &
Co. Inc. and Xxxxxx Brothers Inc. 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 Pinnacle 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 Pinnacle may approve in writing or (C) as set forth in
the applicable subsection of Section 4.01(a) of 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;
(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 Aztar
Disclosure Letter, and other than capital expenditures as
set forth in Section 4.01(a)(xi) of 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
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
$150 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 Pinnacle (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 Last 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(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 Pinnacle;
(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
Pinnacle, 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, any Covered
Contract, other than in the ordinary course of business
consistent with past practice after consultation with
Pinnacle, 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 on Schedule 4.01(a)(xix), 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 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 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, or (H) 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 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 Pinnacle all cooperation reasonably requested
by Pinnacle 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 Pinnacle, 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 Pinnacle in preparing offering
memoranda, private placement memoranda, prospectuses and similar documents,
(iv) furnishing Pinnacle and its financing sources with financial and other
pertinent information regarding Aztar and its subsidiaries as may reasonably
be requested by Pinnacle, 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 Commitment
Letter (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
Pinnacle; 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 Pinnacle's
post-Closing plans or any post-Closing projections, (vi) obtaining any
necessary rating agencies' confirmations or approvals for Pinnacle's financing
as may be reasonably requested by Pinnacle and (vii) reasonably facilitating
the pledge of collateral, including taking any actions and executing any
documents reasonably requested by Pinnacle in connection, in each case to
become effective at the Closing. Aztar will use its reasonable best efforts to
provide to Pinnacle and its financing sources as promptly as practicable (but
in no event later than the time periods, if any, specified in Exhibit D to the
Commitment Letter), 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 D 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 Commitment Letters 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.
(c) Without limiting the foregoing, at the request of Pinnacle, prior to
the Effective Time, Aztar shall use its reasonable best efforts to cooperate
with Pinnacle 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 Pinnacle, 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 Pinnacle shall request ("Consent/Tender Offers") in each case with
the cooperation of Pinnacle. All Consent/Tender Offers shall be in accordance
with applicable Law and shall be on the terms and conditions reasonably agreed
by Pinnacle 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 Pinnacle consents in writing to such consummation. Aztar agrees to use
its reasonable efforts to cooperate with Pinnacle 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.
Pinnacle 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 Pinnacle. 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 Pinnacle
to the maximum extent permitted by Law or to take any action other than in
their capacity as an officer. Pinnacle 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 Pinnacle Interim Operations. Pinnacle 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. Pinnacle 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. Pinnacle
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 Pinnacle
believes is reasonably likely to prevent or delay the receipt of the
Financing. Pinnacle shall use its reasonable best efforts to comply with the
covenants in the Commitment Letter 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 Pinnacle
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 Pinnacle 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 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 Pinnacle, 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, a "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 Pinnacle in
writing of the determination that such Takeover Proposal constitutes a
Superior Proposal and (II) at least three business days following receipt by
Pinnacle 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
Pinnacle in writing of the decision to do so at least three business days
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 Pinnacle 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
Pinnacle, 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 Pinnacle 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 Pinnacle 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 Pinnacle, directly or indirectly, rights to control or
direct Aztar's operations prior to the Effective Time. Prior to the Effective
Time, Aztar shall exercise, 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.
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(a) As soon as reasonably practicable following the date of this
Agreement, Aztar shall prepare and file the Proxy Statement with the SEC and
Pinnacle 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, Pinnacle or any subsidiary of
Aztar or Pinnacle, respectively, or any change occurs with respect to
information supplied by or on behalf of Aztar or Pinnacle, 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 Pinnacle, as applicable, shall promptly notify the other of such event, and
Aztar or Pinnacle, as applicable, shall cooperate with the other 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
Pinnacle 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 Pinnacle
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.
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(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 respective subsidiaries to afford to Pinnacle 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 Pinnacle to discuss material operational
and regulatory matters and the general status of its ongoing operations, (ii)
advise Pinnacle 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
Pinnacle promptly all other information concerning its business, properties
and personnel, in each case as Pinnacle may reasonably request. Pinnacle 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. Pinnacle 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 March 11, 2006 between Aztar and Pinnacle (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.
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(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. Pinnacle 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 Aztar shall provide and cause its affiliates to provide
Pinnacle with any information required in connection with such filings as
promptly as practicable; and Aztar shall have the right to review and approve
(which comments Aztar shall provide as promptly as practicable, but in any
event within three days of Pinnacle'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. Aztar and Pinnacle
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 Pinnacle 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
Pinnacle and all "key persons" (as defined under applicable Gaming Laws). Each
of Pinnacle 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, Pinnacle shall seek to obtain
interim casino authorization at the earliest practicable date. Each of
Pinnacle 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. Pinnacle shall have the
exclusive 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 Pinnacle with respect thereto. Aztar shall agree if, but solely
if, requested by Pinnacle 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 Pinnacle'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 Pinnacle to obtain a Governmental Consent,
provided that any such action shall be conditioned upon the consummation of
the Merger and the transactions contemplated hereby.
(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 entity, (i) promptly notify the
other party of any material 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 Authorities, and, consult
with the other party in advance regarding any material proposed written
communication relating to the Merger and the transactions contemplated hereby
to any of the foregoing in response thereto; and (ii) furnish the other party
or its outside counsel with copies of all material 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; provided,
further, that notwithstanding anything in this Agreement to the contrary,
Pinnacle shall not be required to provide Aztar with copies of any individual
gaming applications and shall be entitled to redact any corporate gaming
applications to the extent reasonable to do so under the circumstances. Aztar
will not, and will not permit any of its representatives to participate in any
substantive meeting or discussion with any Governmental Authority in respect
of any filings, investigation or inquiry concerning this Agreement or the
Merger without the consent of Pinnacle, unless requested by such Governmental
Authority and upon prior written notice by Aztar to Pinnacle of such request.
(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 Pinnacle 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 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
Pinnacle 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 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 Pinnacle or any of their
respective subsidiaries with, or obtained prior to the Effective Time by Aztar
or Pinnacle 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 last sentence 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 any hotel casino
property outside the State of Nevada owned by Aztar that represents less than
20% of Aztar's revenue for the year ending December 31, 2005 (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 Pinnacle
(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 Pinnacle 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 Pinnacle'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. None of Aztar or any of its subsidiaries
may take or agree to take any action, or consent to or agree to consent to any
such restriction without the consent of Pinnacle. For purposes of
clarification, Pinnacle agrees that if necessary in order to obtain the
Required Governmental Consents (as defined in Section 6.01(c)), Pinnacle 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 (B) conduct or agree
to conduct its business in a particular manner unless such conduct 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 Pinnacle 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 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.
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) Pinnacle 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 Pinnacle and its subsidiaries (including,
after Closing, the Surviving Corporation), Pinnacle 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 prior to the Effective Time) as service rendered to Pinnacle 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 Pinnacle 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. Pinnacle shall also cause each Pinnacle 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). Pinnacle shall recognize any accrued but unused
vacation of the Company Employees as of the Effective Time, and Pinnacle shall
cause Aztar and its subsidiaries to provide such paid vacation. For purposes
of this Agreement, a "Pinnacle 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 Pinnacle 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 Pinnacle 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, Pinnacle
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,
Pinnacle shall not, for at least six 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 Pinnacle 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 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 Pinnacle 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, Pinnacle 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 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.
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(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) 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 (x) this Agreement is terminated by Aztar or Pinnacle
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 Pinnacle 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 Pinnacle 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 Pinnacle pursuant to Section
7.01(f)(ii), or (vi) this Agreement is terminated by Pinnacle pursuant to
Section 7.01(g) as a result of a material and intentional breach by Aztar,
then in each case Aztar shall pay Pinnacle a fee equal to $42 million (the
"Termination Fee") and shall reimburse Pinnacle for its fees and expenses
incurred in connection with the transactions contemplated hereby up to a
maximum of $13 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 Proposal" in Section 4.03(a) shall be deemed to be
references to "50%". Payment of the Termination Fee and Termination Expenses
to Pinnacle 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, Pinnacle would not enter into this Agreement;
accordingly, if Aztar fails promptly to pay any amount due pursuant to Section
5.07, and, in order to obtain such payment, Pinnacle commences a suit that
results in a judgment against Aztar for the payments set forth in Section
5.07, Aztar shall pay to Pinnacle 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.
Section 5.08 Public Announcements. Aztar and Pinnacle 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.
Section 5.09 Aztar Headquarters. For a period of not less than 9 months
following the Effective Time, Pinnacle 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 Pinnacle or
any of its subsidiaries to employ any individual or group of individuals at
such location after the Closing.Section 5.10
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 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, Indiana, 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 Pinnacle, 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
Pinnacle 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 the
ability of Pinnacle to consummate the transactions contemplated hereby.
(b) Performance of Obligations of Pinnacle. Pinnacle 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. Aztar shall have received a certificate signed by
an executive officer of Pinnacle, 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.
Section 6.03 Conditions to Obligations of Pinnacle. The obligation of
Pinnacle 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. Pinnacle 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
Pinnacle 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 Pinnacle;
(b) by either Aztar or Pinnacle:
(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;
(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
Pinnacle) 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 Pinnacle shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this 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 Pinnacle or is not cured by
Pinnacle 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 Pinnacle, 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, 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
within 120 days following receipt of written notice from Pinnacle of such
breach or failure to perform;
(f) by Pinnacle, 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 Pinnacle, 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 Pinnacle 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 Pinnacle, 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, 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 Pinnacle, if all of the conditions to Pinnacle'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
Pinnacle 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 Pinnacle 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 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 Pinnacle, to:
Pinnacle Entertainment, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx
Xxxxxxxxx X. Xxxxxxxx
Xxxx Xxxxxx
and to:
Irell & Xxxxxxx LLP
1800 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxxxx
C. Xxxxx XxXxxxxx
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) "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;
(c) "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;
(d) "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;
(e) "material adverse change" or "material adverse effect" means, when
used in connection with Aztar or Pinnacle, as the case may be, any change,
effect, event or 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), or (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 (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 and (G)
any matters disclosed in Section 8.03(e) of the Aztar Disclosure Letter or
(ii) that prevents or materially delays such person from performing its
material obligations under this Agreement or consummation of the transactions
contemplated hereby;
(f) "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;
(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,
Pinnacle 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, Pinnacle or its Affiliates) or (II) would
require the disposition of any material assets or line of
business of Pinnacle or its subsidiaries or, after the
Effective Time, Pinnacle 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.
(g) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity; and
(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 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
Pinnacle) 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) "solvent" means that, as of any date of determination, (a) the amount
of the "fair saleable value" of the assets of Pinnacle and its subsidiaries
(including Aztar and its subsidiaries) will, as of such date, exceed the value
of all "liabilities of Pinnacle 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)
Pinnacle 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) Pinnacle 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 Pinnacle 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.
(j) "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 Pinnacle 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 the 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) Pinnacle 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.
Section 8.06 Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) 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.
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's 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.
IN WITNESS WHEREOF, Pinnacle, Aztar and Merger Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
PINNACLE ENTERTAINMENT, INC.
By: /s/ Xxxxxx X. Xxx
----------------------------------
Name: Xxxxxx X. Xxx
Title: Chairman of the Board and Chief
Executive Officer
PNK DEVELOPMENT 1, INC.
By: /s/ Xxxxxx X. Xxx
----------------------------------
Name: Xxxxxx X. Xxx
Title: Chairman of the Board and Chief
Executive Officer
AZTAR CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer, Vice
President and Treasurer
