AGREEMENT AND PLAN OF MERGER
dated as of
March 6, 2000
among
MIRAGE RESORTS, INCORPORATED,
MGM GRAND, INC.
AND
A WHOLLY-OWNED SUBSIDIARY OF MGM GRAND, INC.
EXHIBIT 2
TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER; CLOSING
SECTION 1.01. The Merger.................................................1
SECTION 1.02. Effective Time.............................................1
SECTION 1.03. Effects of the Merger......................................1
SECTION 1.04. Conversion of Shares.......................................2
SECTION 1.05. Payment of Shares..........................................2
SECTION 1.06. Stock Options..............................................4
SECTION 1.07. The Closing................................................4
ARTICLE II
THE SURVIVING CORPORATION; DIRECTORS AND OFFICERS
SECTION 2.01. Articles of Incorporation..................................4
SECTION 2.02. Bylaws.....................................................5
SECTION 2.03. Directors and Officers.....................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY
SECTION 3.01. Organization and Qualification.............................5
SECTION 3.02. Authority; Non-Contravention; Approvals....................6
SECTION 3.03. Proxy Statement............................................7
SECTION 3.04. Ownership of Company Common Stock..........................8
SECTION 3.05. Financing..................................................8
SECTION 3.06. Reports, Financial Statements, etc.........................8
SECTION 3.07. Brokers and Finders........................................9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Organization and Qualification.............................9
SECTION 4.02. Capitalization............................................10
SECTION 4.03. Subsidiaries..............................................11
SECTION 4.04. Authority; Non-Contravention; Approvals...................11
SECTION 4.05. Reports and Financial Statements..........................13
SECTION 4.06. Absence of Undisclosed Liabilities........................13
SECTION 4.07. Absence of Certain Changes or Events......................14
SECTION 4.08. Litigation................................................14
SECTION 4.09. Proxy Statement...........................................14
SECTION 4.10. No Violation of Law.......................................14
SECTION 4.11. Compliance with Agreements................................15
SECTION 4.12. Taxes.....................................................15
SECTION 4.13. Employee Benefit Plans; ERISA.............................16
SECTION 4.14. Labor Controversies.......................................17
SECTION 4.15. Environmental Matters.....................................18
SECTION 4.16. Title to Assets...........................................19
SECTION 4.17. Company Stockholders' Approval............................20
SECTION 4.18. Brokers and Finders.......................................20
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TABLE OF CONTENTS
(continued)
Page
ARTICLE V ----
COVENANTS
SECTION 5.01. Conduct of Business by the Company Pending the Merger.....20
SECTION 5.02. Control of the Company's Operations.......................22
SECTION 5.03. Acquisition Transactions..................................23
SECTION 5.04. Access to Information.....................................24
SECTION 5.05. Notices of Certain Events.................................24
SECTION 5.06. Merger Subsidiary.........................................25
SECTION 5.07. Employee Benefits.........................................25
SECTION 5.08. Meeting of the Company's Stockholders.....................26
SECTION 5.09. Proxy Statement...........................................27
SECTION 5.10. Public Announcements......................................27
SECTION 5.11. Expenses and Fees.........................................27
SECTION 5.12. Agreement to Cooperate....................................28
SECTION 5.13. Directors' and Officers' Indemnification..................30
SECTION 5.14. Company Securities........................................32
SECTION 5.15. Continuing Directors......................................32
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.01. Conditions to the Obligations of Each Party...............32
SECTION 6.02. Conditions to Obligation of the Company to Effect
the Merger................................................32
SECTION 6.03. Conditions to Obligations of Parent and Subsidiary
to Effect the Merger......................................33
ARTICLE VII
TERMINATION
SECTION 7.01. Termination...............................................34
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Effect of Termination.....................................35
SECTION 8.02. Non-Survival of Representations and Warranties............36
SECTION 8.03. Notices...................................................36
SECTION 8.04. Interpretation............................................37
SECTION 8.05. Miscellaneous.............................................37
SECTION 8.06. Counterparts..............................................37
SECTION 8.07. Amendments; No Waivers....................................37
SECTION 8.08. Entire Agreement..........................................37
SECTION 8.09. Severability..............................................38
SECTION 8.10. Specific Performance......................................38
SECTION 8.11. Non-Involvement of Tracinda...............................38
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") is
entered into as of March 6, 2000 by and among MGM Grand, Inc., a
Delaware corporation ("Parent"), and Mirage Resorts, Incorporated,
a Nevada corporation (the "Company"). Promptly after the date
hereof, Parent shall cause one of its direct or indirect wholly
owned subsidiaries organized under the laws of Nevada ("Merger
Subsidiary") to enter into this Agreement. Parent and the Company
and, upon its execution of this Agreement, Merger Subsidiary, are
referred to collectively herein as the "Parties."
WHEREAS, the respective Boards of Directors of Parent
and the Company have each approved the merger of Merger Subsidiary
with and into the Company on the terms and subject to the
conditions set forth in this Agreement (the "Merger"); and
WHEREAS, as a condition to Parent's willingness to enter
into the transactions contemplated by this Agreement, Parent and
the Company have entered into a Stock Option Agreement which is
dated the date hereof.
NOW, THEREFORE, in consideration of the foregoing and
the respective representations, warranties, covenants and
agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions of this Agreement, and in accordance with the NRS,
Merger Subsidiary shall be merged with and into the Company at the
Effective Time (as defined in Section 1.02). Following the
Merger, the separate existence of Merger Subsidiary shall cease
and the Company shall continue as the surviving corporation (the
"Surviving Corporation") and a direct or indirect wholly-owned
subsidiary of Parent, and shall succeed to and assume all the
rights and obligations of Merger Subsidiary in accordance with the
NRS. The term "NRS" means Chapters 78, 92A and, if Merger
Subsidiary is organized under Chapter 86, Chapter 86 of the Nevada
Revised Statutes.
SECTION 1.02. Effective Time. The Merger shall become
effective when Articles of Merger (the "Articles of Merger"),
executed in accordance with the relevant provisions of the NRS,
are filed with the Secretary of State of the State of Nevada;
provided, however, that, upon mutual consent of the constituent
corporations to the Merger, the Articles of Merger may provide for
a later date of effectiveness of the Merger not more than 30 days
after the date the Articles of Merger are filed. When used in
this Agreement, the term "Effective Time" shall mean the date and
time at which the Articles of Merger are accepted for record or
such later time established by the Articles of Merger. The filing
of the Articles of Merger shall be made on the date of the Closing
(as defined in Section 1.07).
SECTION 1.03. Effects of the Merger. The Merger shall have the
effects set forth in Section 92A.250 of the NRS.
SECTION 1.04. Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of Parent,
Merger Subsidiary, the Company or the holders of any of the
following securities:
(a) each issued and outstanding share of the Company's common
stock, par value $.004 per share (together with the associated
Rights, "Company Common Stock") held by the Company as treasury
stock and each issued and outstanding share of Company Common
Stock owned by any subsidiary of the Company, Parent, Merger
Subsidiary or any other subsidiary of Parent shall be cancelled
and retired and shall cease to exist, and no payment or
consideration shall be made with respect thereto;
(b) each issued and outstanding share of Company Common Stock,
other than shares of Company Common Stock referred to in paragraph
(a) above shall be converted into the right to receive an amount
in cash, without interest, equal to $21.00 (the "Merger
Consideration"). At the Effective Time, all such shares of
Company Common Stock shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist,
and each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration,
without interest; and
(c) each issued and outstanding share of capital stock or
ownership interest of Merger Subsidiary shall be converted into
one fully paid and nonassessable share of common stock, par value
$.004, of the Surviving Corporation.
SECTION 1.05. Payment of Shares. (a) Prior to the Effective
Time, Parent shall appoint a bank or trust company reasonably
satisfactory to the Company to act as disbursing agent (the
"Disbursing Agent") for the payment of Merger Consideration upon
surrender of certificates representing the shares of Company
Common Stock. Parent will enter into a disbursing agent agreement
with the Disbursing Agent, in form and substance reasonably
acceptable to the Company. At or prior to the Effective Time,
Parent shall deposit or cause to be deposited with the Disbursing
Agent in trust for the benefit of the Company's stockholders cash
in an aggregate amount necessary to make the payments pursuant to
Section 1.04 to holders of shares of Company Common Stock (such
amounts being hereinafter referred to as the "Exchange Fund").
The Disbursing Agent shall invest the Exchange Fund, as the
Surviving Corporation directs, in direct obligations of the United
States of America, obligations for which the full faith and credit
of the United States of America is pledged to provide for the
payment of all principal and interest or commercial paper
obligations receiving the highest rating from either Xxxxx'x
Investors Service, Inc. or Standard & Poor's, a division of The
McGraw Hill Companies, or a combination thereof, provided that, in
any such case, no such instrument shall have a maturity exceeding
three months. Any net profit resulting from, or interest or
income produced by, such investments shall be payable to the
Surviving Corporation. The Exchange Fund shall not be used for
any other purpose except as provided in this Agreement.
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(b) Promptly after the Effective Time, the Surviving Corporation
shall cause the Disbursing Agent to mail to each person who was a
record holder as of the Effective Time of an outstanding
certificate or certificates which immediately prior to the
Effective Time represented shares of Company Common Stock (the
"Certificates"), and whose shares were converted into the right to
receive Merger Consideration pursuant to Section 1.04, a form of
letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the
Disbursing Agent) and instructions for use in effecting the
surrender of the Certificates in exchange for payment of the
Merger Consideration. Upon surrender to the Disbursing Agent of a
Certificate, together with such letter of transmittal duly
executed and such other documents as may be reasonably required by
the Disbursing Agent, the holder of such Certificate shall be paid
promptly in exchange therefor cash in an amount equal to the
product of the number of shares of Company Common Stock
represented by such Certificate multiplied by the Merger
Consideration, and such Certificate shall forthwith be canceled.
No interest will be paid or accrued on the cash payable upon the
surrender of the Certificates. If payment is to be made to a
person other than the person in whose name the Certificate
surrendered is registered, it shall be a condition of payment that
the Certificate so surrendered be properly endorsed or otherwise
be in proper form for transfer and that the person requesting such
payment pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions
of this Section 1.05, each Certificate (other than Certificates
representing shares of Company Common Stock owned by any
subsidiary of the Company, Parent, Merger Subsidiary or any other
subsidiary of Parent and shares of Company Common Stock held in
the treasury of the Company, which have been canceled) shall
represent for all purposes only the right to receive the Merger
Consideration in cash multiplied by the number of shares of
Company Common Stock evidenced by such Certificate, without any
interest thereon.
(c) From and after the Effective Time, there shall be no
registration of transfers of shares of Company Common Stock which
were outstanding immediately prior to the Effective Time on the
stock transfer books of the Surviving Corporation. From and after
the Effective Time, the holders of shares of Company Common Stock
outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such shares of Company Common
Stock except as otherwise provided in this Agreement or by
applicable law. All cash paid upon the surrender of Certificates
in accordance with the terms of this Article I shall be deemed to
have been paid in full satisfaction of all rights pertaining to
the shares of Company Common Stock previously represented by such
Certificates. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, such
Certificates shall be cancelled and exchanged for cash as provided
in this Article I. At the close of business on the day of the
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Effective Time the stock ledger of the Company shall be closed.
(d) At any time more than six months after the Effective Time,
the Surviving Corporation shall be entitled to require the
Disbursing Agent to deliver to it any funds which had been made
available to the Disbursing Agent and not disbursed in exchange
for Certificates (including, without limitation, all interest and
other income received by the Disbursing Agent in respect of all
such funds). Thereafter, holders of shares of Company Common
Stock shall look only to Parent (subject to the terms of this
Agreement, abandoned property, escheat and other similar laws) as
general creditors thereof with respect to any Merger Consideration
that may be payable, without interest, upon due surrender of the
Certificates held by them. If any Certificates shall not have
been surrendered prior to five years after the Effective Time (or
immediately prior to such time on which any payment in respect
hereof would otherwise escheat or become the property of any
governmental unit or agency), the payment in respect of such
Certificates shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled
thereto. Notwithstanding the foregoing, none of Parent, the
Company, the Surviving Corporation nor the Disbursing Agent shall
be liable to any holder of a share of Company Common Stock for any
Merger Consideration delivered in respect of such share of Company
Common Stock to a public official pursuant to any abandoned
property, escheat or other similar law.
SECTION 1.06. Stock Options. At the Effective Time, each
unexercised option, whether or not then vested or exercisable in
accordance with its terms, to purchase shares of Company Common
Stock (the " Options") previously granted by the Company or its
subsidiaries shall be canceled automatically and the Parent shall
or shall cause the Surviving Corporation to provide the holder
thereof with a lump sum cash payment equal to the product of (i)
the total number of shares of Company Common Stock subject to such
Option immediately prior to the Effective Time and (ii) the
excess of the Merger Consideration over the exercise price per
share of Company Common Stock subject to such Option.
SECTION 1.07. The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at
the executive offices of Parent in Las Vegas, Nevada, commencing
at 9:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other
than conditions with respect to actions the respective parties
will take at the Closing itself) or such other place and date as
the Parties may mutually determine (the "Closing Date").
ARTICLE II
THE SURVIVING CORPORATION; DIRECTORS AND OFFICERS
SECTION 2.01. Articles of Incorporation. The Restated Articles
of Incorporation of the Company in effect at the Effective Time
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shall be the articles of incorporation of the Surviving
Corporation until amended in accordance with applicable law and
the terms of this Agreement; provided, however, that at the
Effective Time, such articles shall be amended by virtue of this
Agreement as follows:
(i) Article Fourth shall be amended by deleting the existing
language in its entirety and replacing it with the following:
The total number of shares of capital stock which the
Corporation shall be authorized to issue shall be 1,000 shares,
$.004 par value, of common stock.
(ii) Article Fifth shall be amended by deleting the existing
language in its entirety and replacing it with the following:
"The members of the governing board shall be styled directors and
their number shall be not less than 3 and not more than 9, and
each member shall be elected each year to hold office for a one-
year term."
(iii) The text of Articles Thirteenth and Fourteenth shall be
deleted and replaced with the following "[Reserved]".
SECTION 2.02. Bylaws. The bylaws of Merger Subsidiary in
effect at the Effective Time shall be the bylaws of the Surviving
Corporation, it being agreed that such bylaws shall include the
provisions set forth in Article V of the Company's bylaws until
amended in accordance with applicable law and the terms of this
Agreement.
SECTION 2.03. Directors and Officers. The directors of Merger
Subsidiary immediately prior to the Effective Time shall be the
directors of the Surviving Corporation as of the Effective Time.
The officers of the Company (together with the persons designated
by Parent and notified to the Company in writing at least two
business days prior to the Effective Time) shall be the officers
of the Surviving Corporation as of the Effective Time subject to
the right of the Board of Directors of the Surviving Corporation
to appoint or replace officers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY
Parent and Merger Subsidiary jointly and severally
represent and warrant to the Company that, except as set forth in
the Disclosure Schedule dated as of the date hereof and signed by
an authorized officer of Parent (the "Parent Disclosure
Schedule"), it being agreed that disclosure of any item on the
Parent Disclosure Schedule shall be deemed disclosure with respect
to all Sections of this Agreement if the relevance of such item is
reasonably apparent from the face of the Parent Disclosure
Schedule:
SECTION 3.01. Organization and Qualification. Parent is a
corporation and Merger Subsidiary is a corporation or limited
liability company, in each case duly organized, validly existing
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and in good standing under the laws of the state of its
incorporation and has the requisite corporate power and authority
to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted. Each of Parent and
Merger Subsidiary is qualified to transact business and is in good
standing in each jurisdiction in which the properties owned,
leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the failure
to be so qualified and in good standing would not reasonably be
expected to have Parent Material Adverse Effect. In this
Agreement, the term "Parent Material Adverse Effect" means an
effect that is materially adverse to (i) the business, financial
condition or ongoing operations of Parent and its subsidiaries,
taken as a whole or (ii) the ability of Parent or any of its
subsidiaries to obtain financing for or to consummate any of the
transactions contemplated by this Agreement.
SECTION 3.02. Authority; Non-Contravention; Approvals. (a)
Parent and Merger Subsidiary each have full corporate or similar
power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby, including without
limitation, the consummation of the financing of the Merger
pursuant to the Financing Commitment (as defined in Section 3.05)
(the "Financing"). This Agreement and the Merger have been
approved and adopted by the Boards of Directors of Parent and
Merger Subsidiary and the sole stockholder or member of Merger
Subsidiary, and no other corporate or similar proceedings on the
part of Parent or Merger Subsidiary are necessary to authorize the
execution and delivery of this Agreement or the consummation by
Parent and Merger Subsidiary of the transactions contemplated
hereby, including without limitation, the Financing. This
Agreement has been duly executed and delivered by each of Parent
and Merger Subsidiary and, assuming the due authorization,
execution and delivery hereof by the Company, constitutes a valid
and legally binding agreement of each of Parent and Merger
Subsidiary enforceable against each of them in accordance with its
terms, except that such enforcement may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors'
rights generally and (ii) general equitable principles.
(b) The execution, delivery and performance of this Agreement by
each of Parent and Merger Subsidiary and the consummation of the
Merger and the transactions contemplated hereby, including without
limitation the Financing, do not and will not violate, conflict
with or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or, other than in the
case of the Financing, result in the creation of any lien,
security interest or encumbrance upon any of the properties or
assets of Parent or any of its subsidiaries under any of the
terms, conditions or provisions of (i) the respective
certificates of incorporation or bylaws of Parent or any of its
subsidiaries, (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of
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any court or governmental authority applicable to Parent or any of
its subsidiaries or any of their respective properties or assets,
subject, in the case of consummation, to obtaining (prior to the
Effective Time) the Parent Required Statutory Approvals (as
defined in Section 3.02(c)), or (iii) any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession,
contract, lease or other instrument, obligation or agreement of
any kind (each a "Contract" and collectively "Contracts") to
which Parent or any of its subsidiaries is now a party or by which
Parent or any of its subsidiaries or any of their respective
properties or assets may be bound or affected. Excluded from the
foregoing sentence of this paragraph (b), insofar as it applies to
the terms, conditions or provisions described in clauses (ii) and
(iii) of this paragraph (b), are such violations, conflicts,
breaches, defaults, terminations, accelerations or creations of
liens, security interests or encumbrances that would not
reasonably be expected to have a Parent Material Adverse Effect
and would not materially delay the consummation of the Merger.
(c) Except for (i) the filings by Parent required by the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (ii) applicable filings, if any, with the Securities
and Exchange Commission (the "SEC") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (iii)
filing of Articles of Merger with the Secretary of State of the
State of Nevada in connection with the Merger, and (iv) filings
with and approvals by any regulatory authority with jurisdiction
over the Company's gaming operations required under any Federal,
state, local or foreign statute, ordinance, rule, regulation,
permit, consent, approval, license, judgment, order, decree,
injunction or other authorization governing or relating to the
current or contemplated casino and gaming activities and
operations of the Company, including the Nevada Gaming Control Act
and the rules and regulations promulgated thereunder, the New
Jersey Casino Control Act and the rules and regulations
promulgated thereunder, the Mississippi Gaming Control Act and the
rules and regulations promulgated thereunder, and the Michigan
Gaming Control Act and the rules and regulations promulgated
thereunder (collectively, the "Gaming Laws") (the filings and
approvals referred to in clauses (i) through (iv) are
collectively referred to as the "Parent Required Statutory
Approvals"), no declaration, filing or registration with, or
notice to, or authorization, consent or approval of, any
governmental or regulatory body or authority is necessary for the
execution and delivery of this Agreement by Parent or Merger
Subsidiary or the consummation by Parent or Merger Subsidiary of
the transactions contemplated hereby, including without
limitation, the Financing, other than such declarations, filings,
registrations, notices, authorizations, consents or approvals
which, if not made or obtained, as the case may be, would not
reasonably be expected to have a Parent Material Adverse Effect
and would not materially delay the consummation of the Merger.
SECTION 3.03. Proxy Statement. None of the information to be
supplied by Parent or its subsidiaries for inclusion in any proxy
statement to be distributed in connection with the Company's
meeting of stockholders to vote upon this Agreement and the
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transactions contemplated hereby (the "Proxy Statement") will, at
the time of the mailing of the Proxy Statement and any amendments
or supplements thereto, and at the time of the meeting of
stockholders of the Company to be held in connection with the
transactions contemplated by this Agreement, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they are made, not misleading.
SECTION 3.04. Ownership of Company Common Stock. Neither
Parent nor any of its subsidiaries beneficially owns any shares of
Company Common Stock as of the date hereof.
SECTION 3.05. Financing. (a) At the Effective Time, Parent
shall have on hand and available for deposit with the Disbursing
Agent in accordance with Section 1.05 cash in the amount of
$4,410,000,000.
(b) Parent has obtained written commitments (the "Financing
Commitment") for the financing necessary to consummate the Merger
and to pay all associated costs and expenses (including any
refinancing of indebtedness of Parent or the Company required in
connection therewith). The Financing Commitment has not been
amended, modified, withdrawn, terminated or replaced, except that
they may be amended or replaced in a manner which (i) does not
adversely affect the ability of Parent to consummate the Merger or
(ii) is not reasonably likely to cause a material delay in the
consummation of the Merger. Parent has provided true, accurate
and complete copies of such commitments (and any amendment or
replacement thereof) to the Company.
SECTION 3.06. Reports, Financial Statements, etc. . Since
January 1, 1997, Parent has filed with the SEC all material forms,
statements, reports and documents (including all exhibits, post-
effective amendments and supplements thereto) (the "Parent SEC
Reports") required to be filed by it under each of the Securities
Act of 1933, as amended (the "Securities Act"), the Exchange Act
and the respective rules and regulations thereunder, all of which,
as amended if applicable, complied when filed in all material
respects with all applicable requirements of the appropriate act
and the rules and regulations thereunder. As of their respective
dates, the Parent SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements and
unaudited financial statements of Parent included in Parent's
Annual Report on Form 10-K for the twelve months ended December
31, 1998 and Parent's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, June 30 and September 30, 1999
(collectively, the "Parent Financial Statements") have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto) and fairly present in
all material respects the financial position of Parent and its
subsidiaries as of the dates thereof and the results of their
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operations and changes in financial position for the periods then
ended (subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments).
Since the date of the most recent Parent SEC Report that
contains consolidated financial statements of Parent filed prior
to the date of this Agreement, there has not been any Parent
Material Adverse Effect.
SECTION 3.07. Brokers and Finders. Except as disclosed in the
Parent Disclosure Schedule, Parent has not entered into any
contract, arrangement or understanding with any person or firm
which may result in the obligation of the Company to pay any
investment banking fees, finder's fees or brokerage fees in
connection with the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger
Subsidiary that, except as set forth in the disclosure schedule
dated as of the date hereof and signed by an authorized officer of
the Company (the "Company Disclosure Schedule"), it being agreed
that disclosure of any item on the Company Disclosure Schedule
shall be deemed disclosure with respect to all Sections of this
Agreement if the relevance of such item is reasonably apparent
from the face of the Company Disclosure Schedule:
SECTION 4.01. Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and has the requisite
corporate power and authority to own, lease and operate its assets
and properties and to carry on its business as it is now being
conducted. The Company is qualified to transact business and is
in good standing in each jurisdiction in which the properties
owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where
the failure to be so qualified and in good standing would not
reasonably be expected to have a Company Material Adverse Effect.
In this Agreement, the term "Company Material Adverse Effect"
means an effect or effects (other than an effect or effects
arising out of or resulting from changes in or affecting the
travel, hospitality or gaming industries generally or in the
states of Nevada, New Jersey or Mississippi and other than any
effect resulting from the entering into or the public announcement
or disclosure of this Agreement and the transactions contemplated
hereby) that, individually or in the aggregate, (i) have an
adverse economic effect of more than $200,000,000 to the business,
financial condition or ongoing operations of the Company and its
subsidiaries, taken as a whole or (ii) have a materially adverse
effect on the ability of the Company to consummate the Merger or
the ability of the Parties hereto to retain any Material Gaming
License. True, accurate and complete copies of the Company's
Restated Articles of Incorporation and bylaws, in each case as in
effect on the date hereof, including all amendments thereto, have
heretofore been delivered to Parent. A "Material Gaming License"
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is a license or similar authorization under any Gaming Law without
which Parent or the Company, as the case may be, would be
prohibited from operating any one of its major gaming/hotel
properties in the state in which such property is located.
SECTION 4.02. Capitalization. (a) The authorized capital stock
of the Company consists of (1) 1,125,000,000 shares of Company
Common Stock and (2) 5,000,000 shares of preferred stock, par
value $.10 per share ("Company Preferred Stock"). As of March 5,
2000, (i) 190,342,423 shares of Company Common Stock, including
the associated Rights (as defined in Section 4.02(b)), were issued
and outstanding, all of which shares of Company Common Stock were
validly issued and are fully paid, nonassessable and free of
preemptive rights, and no shares of Company Preferred Stock were
issued and outstanding, (ii) 44,805,227 shares of Company Common
Stock and no shares of Company Preferred Stock were held in the
treasury of the Company, (iii) 35,613,037 shares of Company
Common Stock were reserved for issuance upon exercise of Options
issued and outstanding, and (iv) 400,000 shares of Company
Preferred Stock to be designated as Series A Junior Participating
Preferred Stock reserved for issuance under the Rights Agreement
(as defined in Section 4.02(b)). Assuming the exercise of all
outstanding Options, as of March 5, 2000, there would be
225,955,460 shares of Company Common Stock issued and outstanding.
Since March 5, 2000, except as permitted by this Agreement, (i)
no shares of capital stock of the Company have been issued except
in connection with the exercise of the instruments referred to in
the second sentence of this Section 4.02(a) and (ii) no options,
warrants, securities convertible into, or commitments with respect
to the issuance of shares of capital stock of the Company have
been issued, granted or made, except Rights in accordance with the
terms of the Rights Agreement.
(b) Except for the Preferred Stock Purchase Rights (the
"Rights") issued pursuant to the Rights Agreement (the "Rights
Agreement"), to be dated as of or about March 6, 2000 between the
Company and American Stock Transfer & Trust Company (the "Rights
Agent"), or as set forth in Section 4.02(a), as of the date hereof
and as of March 5, there are no outstanding subscriptions,
options, calls, contracts, commitments, understandings,
restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security,
instrument or other agreement and also including any rights plan
or other anti-takeover agreement, obligating the Company or any
subsidiary of the Company to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of the capital
stock of the Company or obligating the Company or any subsidiary
of the Company to grant, extend or enter into any such agreement
or commitment. There are no outstanding stock appreciation rights
or similar derivative securities or rights of the Company or any
of its subsidiaries. Except as disclosed in the Company SEC
Reports or as otherwise contemplated by this Agreement, there are
no voting trusts, irrevocable proxies or other agreements or
understandings to which the Company or any subsidiary of the
Company is a party or is bound with respect to the voting of any
shares of capital stock of the Company. The Board of Directors of
the Company has taken all action to amend the Rights Agreement
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(subject only to the execution of such amendment by the Rights
Agent, which execution the Company shall cause to take place as
promptly as reasonably practicable following the date of this
Agreement) to provide that (i) none of the Parent and its
subsidiaries shall become an "Acquiring Person" as a result of the
execution, delivery and performance of this Agreement and the
consummation of the Merger, and (ii) no "Distribution Date" shall
occur as a result of the announcement of or the execution of this
Agreement or any of the transactions contemplated hereby. Upon
execution of the Rights Agreement by the Rights Agent, the
amendment to the Rights Agreement shall become effective and shall
remain in full force and effect until immediately following the
termination of this Agreement in accordance with its terms.
SECTION 4.03. Subsidiaries. Each direct and indirect
subsidiary of the Company is duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation and has the requisite power and authority to own,
lease and operate its assets and properties and to carry on its
business as it is now being conducted and each subsidiary of the
Company is qualified to transact business, and is in good
standing, in each jurisdiction in which the properties owned,
leased or operated by it or the nature of the business conducted
by it makes such qualification necessary; except, in all cases,
where the failure to be so organized, existing, qualified and in
good standing would not reasonably be expected to have a Company
Material Adverse Effect. All of the outstanding shares of capital
stock of each subsidiary of the Company are validly issued, fully
paid, nonassessable and free of preemptive rights. There are no
subscriptions, options, warrants, rights, calls, contracts or
other commitments, understandings, restrictions or arrangements
relating to the issuance or sale with respect to any shares of
capital stock of any subsidiary of the Company, including any
right of conversion or exchange under any outstanding security,
instrument or agreement. For purposes of this Agreement, the term
"subsidiary" means, with respect to any specified person (the
"Owner") any other person of which more than 50% of the total
voting power of shares of capital stock or other equity interests
entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers, trustees or other
governing body thereof is at the time owned or controlled,
directly or indirectly, by such Owner and/or one or more of the
other subsidiaries of such Owner.
SECTION 4.04. Authority; Non-Contravention; Approvals. (a)
The Company has full corporate power and authority to enter into
this Agreement and, subject to the Company Stockholders' Approval
(as defined in Section 6.01(a)) with respect solely to the
Merger, to consummate the transactions contemplated hereby. This
Agreement and the Merger have been approved and adopted by the
Board of Directors of the Company, and no other corporate
proceedings on the part of the Company are necessary to authorize
the execution and delivery of this Agreement or, except for the
Company Stockholders' Approval with respect solely to the Merger,
the consummation by the Company of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by
the Company, and, assuming the due authorization, execution and
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delivery hereof by Parent and Merger Subsidiary, constitutes a
valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii)
general equitable principles.
(b) The execution, delivery and performance of this Agreement by
the Company and the consummation of the Merger and the
transactions contemplated hereby do not and will not violate,
conflict with or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under,
contractually require any offer to purchase or any prepayment of
any debt, or result in the creation of any lien, security interest
or encumbrance upon any of the properties or assets of the Company
or any of its subsidiaries under any of the terms, conditions or
provisions of (i) the respective certificates of incorporation or
bylaws of the Company or any of its Material Subsidiaries, (ii)
any statute, law, ordinance, rule, regulation, judgment, decree,
order, injunction, writ, permit or license of any court or
governmental authority applicable to the Company or any of its
subsidiaries or any of their respective properties or assets,
subject, in the case of consummation, to obtaining (prior to the
Effective Time) the Company Required Statutory Approvals (as
defined in Section 4.04(c)) and the Company Stockholders'
Approval, or (iii) any Contract to which the Company or any of
its subsidiaries is now a party or by which the Company or any of
its subsidiaries or any of their respective properties or assets
may be bound or affected, subject, in the case of consummation, to
obtaining (prior to the Effective Time) consents required from
commercial lenders, lessors or other third parties as specified in
Section 4.04(b) of the Company Disclosure Schedule. Excluded
from the foregoing sentence of this paragraph (b), insofar as it
applies to the terms, conditions or provisions described in
clauses (ii) and (iii) of this paragraph (b), are such
violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens, security interests or
encumbrances that would not reasonably be expected, individually
or in the aggregate, to have a Company Material Adverse Effect and
would not prevent or materially delay the consummation of the
Merger.
(c) Except for (i) the filings by the Company required by the
HSR Act, (ii) the filing of the Proxy Statement with the SEC
pursuant to the Exchange Act, (iii) the filing of Articles of
Merger with the Secretary of State of the State of Nevada in
connection with the Merger, (iv) any filings with or approvals
from authorities required solely by virtue of the jurisdictions in
which Parent or its subsidiaries conduct any business or own any
assets, and (v) filings with and approvals in respect of Gaming
Laws (the filings and approvals referred to in clauses (i)
through (v) and those disclosed in Section 4.04(c) of the
Company Disclosure Schedule are collectively referred to as the
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"Company Required Statutory Approvals"), no declaration, filing or
registration with, or notice to, or authorization, consent or
approval of, any governmental or regulatory body or authority is
necessary for the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions
contemplated hereby, other than such declarations, filings,
registrations, notices, authorizations, consents or approvals
which, if not made or obtained, as the case may be, would not
reasonably be expected, individually or in the aggregate, to have
a Company Material Adverse Effect and would not prevent or
materially delay the consummation of the Merger.
SECTION 4.05. Reports and Financial Statements. Since January
1, 1997, the Company has filed with the SEC all material forms,
statements, reports and documents (including all exhibits, post-
effective amendments and supplements thereto) (the "Company SEC
Reports") required to be filed by it under each of the Securities
Act, the Exchange Act and the respective rules and regulations
thereunder, all of which, as amended if applicable, complied when
filed in all material respects with all applicable requirements of
the appropriate act and the rules and regulations thereunder. As
of their respective dates, the Company SEC Reports did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The audited consolidated
financial statements of the Company included as an exhibit to the
Company's proxy statement relating to its 2000 annual meeting of
stockholders (and which is a Company SEC Report) (the "Company
Financial Statements") have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis (except as may be indicated therein or in the notes thereto)
and fairly present in all material respects the financial position
of the Company and its subsidiaries as of the dates thereof and
the results of their operations and changes in financial position
for the periods then ended.
SECTION 4.06. Absence of Undisclosed Liabilities. Except as
disclosed in the Company SEC Reports or the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries had at
December 31, 1999, or has incurred since that date and as of the
date hereof, any liabilities or obligations (whether absolute,
accrued, contingent or otherwise) of any nature, except (a)
liabilities, obligations or contingencies (i) which are accrued
or reserved against in the Company Financial Statements or
reflected in the notes thereto or (ii) which were incurred after
December 31, 1999 in the ordinary course of business and
consistent with past practices, (b) liabilities, obligations or
contingencies which (i) would not reasonably be expected,
individually or in the aggregate, to have a Company Material
Adverse Effect, or (ii) have been discharged or paid in full
prior to the date hereof in the ordinary course of business, and
(c) liabilities, obligations and contingencies which are of a
nature not required to be reflected in the consolidated financial
statements of the Company and its subsidiaries prepared in
accordance with generally accepted accounting principles
consistently applied.
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SECTION 4.07. Absence of Certain Changes or Events. Since the
date of the most recent Company SEC Report filed prior to the date
of this Agreement that contains consolidated financial statements
of the Company, there has not been any Company Material Adverse
Effect.
SECTION 4.08. Litigation. Except as referred to in the Company
SEC Reports, there are no claims, suits, actions or proceedings
pending or, to the knowledge of the Company, threatened against,
relating to or affecting the Company or any of its subsidiaries,
before any court, governmental department, commission, agency,
instrumentality or authority, or any arbitrator that would
reasonably be expected, individually or in the aggregate, to have
a Company Material Adverse Effect. Except as referred to in the
Company SEC Reports or as may be entered into with Parent's prior
written consent in connection with Section 5.12(b), neither the
Company nor any of its subsidiaries is subject to any judgment,
decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or authority, or
any arbitrator which prohibits the consummation of the
transactions contemplated hereby or would reasonably be expected,
individually or in the aggregate, to have a Company Material
Adverse Effect.
SECTION 4.09. Proxy Statement. None of the information to be
supplied by the Company or its subsidiaries for inclusion in the
Proxy Statement will, at the time of the mailing thereof and any
amendments or supplements thereto, and at the time of the meeting
of stockholders of the Company to be held in connection with the
transactions contemplated by this Agreement, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they are made, not misleading. The Proxy Statement will comply,
as of its mailing date, as to form in all material respects with
all applicable laws, including the provisions of the Exchange Act
and the rules and regulations promulgated thereunder, except that
no representation is made by the Company with respect to
information supplied by Parent, Merger Subsidiary or any
stockholder of Parent for inclusion therein.
SECTION 4.10. No Violation of Law. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement,
neither the Company nor any of its subsidiaries is in violation of
or has been given written (or, to the knowledge of the Company's
executive officers, oral) notice of any violation of, any law,
statute, order, rule, regulation, ordinance or judgment
(including, without limitation, any applicable environmental law,
ordinance or regulation) of any governmental or regulatory body
or authority, except for violations which would not reasonably be
expected, individually or in the aggregate, to have a Company
Material Adverse Effect. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement, to the
knowledge of the Company, no investigation or review by any
governmental or regulatory body or authority is pending or
threatened, nor has any governmental or regulatory body or
authority indicated an intention to conduct the same, other than,
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in each case, those the outcome of which, as far as reasonably can
be foreseen, would not reasonably be expected, individually or in
the aggregate, to have a Company Material Adverse Effect. The
Company and its subsidiaries are not in violation of the terms of
any permits, licenses, franchises, variances, exemptions, orders
and other governmental authorizations, consents and approvals
necessary to conduct their businesses as presently conducted
(collectively, the "Company Permits"), except for delays in filing
reports or violations which would not reasonably be expected,
individually or in the aggregate, to have a Company Material
Adverse Effect.
SECTION 4.11. Compliance with Agreements. Except as disclosed
in the Company SEC Reports, the Company and each of its
subsidiaries are not in breach or violation of or in default in
the performance or observance of any term or provision of, and no
event has occurred which, with lapse of time or action by a third
party, would result in a default under, any Contract to which the
Company or any of its subsidiaries is a party or by which any of
them is bound or to which any of their property is subject, other
than breaches, violations and defaults which would not reasonably
be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. To the knowledge of the Company's
executive officers, the Company's insurance policies relating to
directors' and officers' liability are in full force and effect.
SECTION 4.12. Taxes. (a) The Company and its subsidiaries
have (i) duly filed with the appropriate governmental authorities
all Tax Returns required to be filed by them, and such Tax Returns
are true, correct and complete, and (ii) duly paid in full or
reserved in accordance with generally accepted accounting
principles on the Company Financial Statements all Taxes required
to be paid, except, in the case of (i) and (ii), as would not,
individually or in the aggregate, have a Company Material Adverse
Effect. Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, there are no liens for
Taxes upon any property or asset of the Company or any subsidiary
thereof, other than liens for Taxes not yet due or Taxes contested
in good faith and reserved against in accordance with generally
accepted accounting principles. There are no unresolved issues of
law or fact arising out of a notice of deficiency, proposed
deficiency or assessment from the Internal Revenue Service (the
"IRS") or any other governmental taxing authority with respect to
Taxes of the Company or any of its subsidiaries which would
reasonably be expected to have a Company Material Adverse Effect.
Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, neither the Company nor its
subsidiaries has agreed to an extension of time with respect to a
Tax deficiency, other than extensions which are no longer in
effect. Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, neither the Company nor
any of its subsidiaries is a party to any agreement providing for
the allocation or sharing of Taxes with any entity that is not,
directly or indirectly, a wholly-owned subsidiary of the Company,
other than agreements the consequences of which are fully and
adequately reserved for in the Company Financial Statements.
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(b) Except as would not, individually or in the aggregate, have
a Company Material Adverse Effect, the Company and each of its
subsidiaries have withheld or collected and have paid over to the
appropriate governmental entities (or are properly holding for
such payment) all material Taxes required to be collected or
withheld.
(c) For purposes of this Agreement, "Tax" (including, with
correlative meaning, the terms "Taxes") means all federal, state,
local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, communications
services, severance, stamp, payroll, sales, employment,
unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or
assessments of any nature whatsoever, together with all interest,
penalties and additions imposed with respect to such amounts and
any interest in respect of such penalties and additions, and
includes any liability for Taxes of another person by contract, as
a transferee or successor, under Treas. Reg. 1.1502-6 or analogous
state, local or foreign law provision or otherwise, and "Tax
Return" means any return, report or similar statement (including
attached schedules) required to be filed with respect to any Tax,
including without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
SECTION 4.13. Employee Benefit Plans; ERISA. (a) The Company
SEC Reports and the Company Disclosure Letter set forth each
material employee or director benefit plan, arrangement or
agreement, including without limitation any employee welfare
benefit plan within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), any
employee pension benefit plan within the meaning of Section 3(2)
of ERISA (whether or not such plan is subject to ERISA) and any
bonus, incentive, deferred compensation, vacation, stock purchase,
stock option, severance, employment, change of control or fringe
benefit plan, program or agreement (excluding any multi-employer
plans as defined in Section 3(37) of ERISA (a "Multi-employer
Plan") and any multiple employer plan within the meaning of
Section 413(c) of the Code) that is sponsored, maintained or
contributed to by the Company or any of its subsidiaries or by any
trade or business, whether or not incorporated, all of which
together with the Company would be deemed a "single employer"
within the meaning of Section 4001 of ERISA (the "Company Plans").
(b) Except as disclosed in the Company SEC Reports or in the
Company Disclosure Schedule, (i) there have been no prohibited
transactions within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code with respect to any of the Company Plans
that could result in penalties, taxes or liabilities which would
reasonably be expected to have a Company Material Adverse Effect,
(ii) no Company Plan is subject to Title IV of ERISA, (iii) each
of the Company Plans has been operated and administered in
accordance with applicable laws during the period of time covered
by the applicable statute of limitations, except for failures to
comply which would not reasonably be expected, individually or in
the aggregate, to have a Company Material Adverse Effect, (iv)
each of the Company Plans which is intended to be "qualified"
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within the meaning of Section 401(a) of the Code has been
determined by the IRS to be so qualified and such determination
has not been revoked by failure to satisfy any condition thereof
or by a subsequent amendment thereto or a failure to amend, except
that it may be necessary to make additional amendments
retroactively to maintain the "qualified" status of such Company
Plans, and the period for making any such necessary retroactive
amendments has not expired, (v) to the knowledge of the Company
and its subsidiaries, there are no pending, threatened or
anticipated claims involving any of the Company Plans other than
claims for benefits in the ordinary course or claims which would
not reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect, (vi) no Company Plan
provides post-retirement medical benefits to employees or
directors of the Company or its subsidiaries beyond their
retirement or other termination of service, other than coverage
mandated by applicable law, (vii) all material contributions or
other amounts payable by the Company or its subsidiaries as of the
date hereof with respect to each Company Plan in respect of
current or prior plan years have been paid or accrued in
accordance with generally accepted accounting principles, (viii)
with respect to each Multi-employer Plan contributed to by the
Company, to the knowledge of the Company and its subsidiaries, as
of the date hereof, none of the Company or its subsidiaries has
received any notification that any such Multi-employer Plan is in
reorganization, has been terminated or is insolvent, (ix) the
Company and its subsidiaries has complied in all respects with the
Worker Adjustment and Retraining Notification Act, except for
failures which would not reasonably be expected, individually or
in the aggregate, to have a Company Material Adverse Effect, and
(x) no act, omission or transaction has occurred with respect to
any Company Plan that has resulted or could result in any
liability of the Company or any subsidiary under Sections 409 or
502(c)(1) or (l) of ERISA or Chapter 43 of Subtitle (A) of the
Code, except for liabilities which would not reasonably be
expected, individually or in the aggregate, to have a Company
Material Adverse Effect.
(c) Except as set forth in the Company Disclosure Schedule, and
excluding payments in respect of outstanding Options, neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance or
"excess parachute payment" (within the meaning of Section 280G of
the Code)) becoming due to any director or employee of the
Company or any of its subsidiaries under any Company Plan, (ii)
materially increase any benefits otherwise payable under any
Company Plan or (iii) result in any acceleration of the time of
payment or vesting of any such benefits. For purposes of this
paragraph (c) only, "material" shall mean in excess of $10
million.
SECTION 4.14. Labor Controversies. Except as disclosed in the
Company SEC Reports, (a) there are no significant controversies
pending or, to the knowledge of the Company, threatened between
the Company or its subsidiaries and any representatives (including
unions) of any of their employees, and (b) to the knowledge of
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the Company, there are no material organizational efforts
presently being made involving any of the presently unorganized
employees of the Company or its subsidiaries, except for such
controversies and organizational efforts which would not
reasonably be expected, individually or in the aggregate, to have
a Company Material Adverse Effect.
SECTION 4.15. Environmental Matters. (a) Except as disclosed
in the Company SEC Reports, (i) the Company and its subsidiaries
have conducted their respective businesses in compliance with all
applicable Environmental Laws, including, without limitation,
having all permits, licenses and other approvals and
authorizations necessary for the operation of their respective
businesses as presently conducted, (ii) none of the properties
owned by the Company or any of its subsidiaries contain any
Hazardous Substance as a result of any activity of the Company or
any of its subsidiaries in amounts exceeding the levels permitted
by applicable Environmental Laws, (iii) since January 1, 1998,
neither the Company nor any of its subsidiaries has received any
notices, demand letters or requests for information from any
Federal, state, local or foreign governmental entity indicating
that the Company or any of its subsidiaries may be in violation
of, or liable under, any Environmental Law in connection with the
ownership or operation of their businesses, (iv) there are no
civil, criminal or administrative actions, suits, demands, claims,
hearings, investigations or proceedings pending or threatened,
against the Company or any of its subsidiaries relating to any
violation, or alleged violation, of any Environmental Law, (v) no
Hazardous Substance has been disposed of, released or transported
in violation of any applicable Environmental Law from any
properties owned by the Company or any of its subsidiaries as a
result of any activity of the Company or any of its subsidiaries
during the time such properties were owned, leased or operated by
the Company or any of its subsidiaries, and (vi) neither the
Company, its subsidiaries nor any of their respective properties
are subject to any material liabilities or expenditures (fixed or
contingent) relating to any suit, settlement, court order,
administrative order, regulatory requirement, judgment or claim
asserted or arising under any Environmental Law, except for
violations of the foregoing clauses (i) through (vi) that would
not reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect.
(b) As used herein, "Environmental Law" means any federal,
state, local or foreign law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent, legal
doctrine, order, judgment, decree, injunction, requirement or
agreement with any governmental entity relating to (x) the
protection, preservation or restoration of the environment
(including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land,
plant and animal life or any other natural resource) or to human
health or safety, or (y) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous
Substances, in each case as amended and as in effect at the
Effective Time. The term "Environmental Law" includes, without
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limitation, (i) the Federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments
and Reauthorization Act, the Federal Water Pollution Control Act
of 1972, the Federal Clean Air Act, the Federal Clean Water Act,
the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the
Federal Solid Waste Disposal Act and the Federal Toxic Substances
Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, and the Federal Occupational Safety and Health Act of 1970,
each as amended and as in effect at the Effective Time, and (ii)
any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of, effects of or exposure
to any Hazardous Substance.
(c) As used herein, "Hazardous Substance" means any substance
presently or hereafter listed, defined, designated or classified
as hazardous, toxic, radioactive, or dangerous, or otherwise
regulated, under any Environmental Law. Hazardous Substance
includes any substance to which exposure is regulated by any
government authority or any Environmental Law including, without
limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste,
industrial substance or petroleum or any derivative or by-product
thereof, radon, radioactive material, asbestos, or asbestos
containing material, urea formaldehyde foam insulation, lead or
polychlorinated biphenyls.
SECTION 4.16. Title to Assets. The Company and each of its
subsidiaries has good and valid title in fee simple to all its
real property and good title to all its leasehold interests and
other properties, as reflected in the most recent balance sheet
included in the Company Financial Statements, except for
properties and assets that have been disposed of in the ordinary
course of business since the date of such balance sheet, free and
clear of all mortgages, liens, pledges, charges or encumbrances of
any nature whatsoever, except (i) the lien for current taxes,
payments of which are not yet delinquent, (ii) such imperfections
in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially
detract from the value, or interfere with the present use of the
property subject thereto or affected thereby, or otherwise
materially impair the Company's business operations (in the manner
presently carried on by the Company), or (iii) as disclosed in
the Company SEC Reports, and except for such matters which would
not reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect. All leases under which
the Company or any of its subsidiaries leases any real or personal
property are in good standing, valid and effective in accordance
with their respective terms, and there is not, under any of such
leases, any existing default or event which with notice or lapse
of time or both would become a default other than failures to be
in good standing, valid and effective and defaults under such
leases which would not reasonably be expected, individually or in
the aggregate, to have a Company Material Adverse Effect.
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SECTION 4.17. Company Stockholders' Approval. Assuming that
Section 3.04 is and remains true and correct in all respects, the
affirmative vote of stockholders of the Company required for
approval and adoption of this Agreement and the Merger is a
majority of the outstanding shares of Company Common Stock
entitled to vote thereon.
SECTION 4.18. Brokers and Finders. The Company has not entered
into any contract, arrangement or understanding with any person or
firm which may result in the obligation of the Company to pay any
investment banking fees, finder's fees or brokerage fees in
connection with the transactions contemplated hereby, other than
fees payable to Xxxxxxx, Xxxxx & Company (the "Company Financial
Advisor"), or as disclosed in Section 4.18 of the Company
Disclosure Schedule. An accurate copy of any fee agreement with
the Company Financial Advisor has been made available to Parent.
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business by the Company Pending the
Merger. Except as otherwise contemplated by this Agreement or
disclosed in Section 5.01 of the Company Disclosure Schedule,
after the date hereof and prior to the Effective Time or earlier
termination of this Agreement, unless Parent shall otherwise agree
in writing, the Company shall, and shall cause its subsidiaries
to:
(a) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice,
including with respect to casino credit policies;
(b) not (i) amend or propose to amend their respective
certificates of incorporation or bylaws or equivalent
constitutional documents, (ii) split, combine or reclassify their
outstanding capital stock or (iii) declare, set aside or pay any
dividend or distribution payable in cash, stock, property or
otherwise, except for the payment of dividends or distributions to
the Company or a wholly-owned subsidiary of the Company by a
direct or indirect wholly-owned subsidiary of the Company;
(c) not issue, sell, pledge or dispose of, or agree to issue,
sell, pledge or dispose of, any additional shares of, or any
options, warrants or rights of any kind to acquire any shares of
their capital stock of any class or any debt or equity securities
convertible into or exchangeable for such capital stock, except
that the Company may issue shares upon the exercise of Options
outstanding on the date hereof;
(d) not (i) incur or become contingently liable with respect to
any indebtedness for borrowed money other than (A) borrowings in
the ordinary course of business or borrowings under the existing
credit facilities of the Company or any of its subsidiaries up to
the existing borrowing limit on the date hereof, and (B)
borrowings to refinance existing indebtedness on terms which are
reasonably acceptable to Parent; provided that in no event shall
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aggregate indebtedness of the Company and its subsidiaries, net of
all cash and cash equivalents, exceed $2.15 billion, (ii) redeem,
purchase, acquire or offer to purchase or acquire any shares of
its capital stock or any options, warrants or rights to acquire
any of its capital stock or any security convertible into or
exchangeable for its capital stock other than in connection with
the exercise of outstanding Options pursuant to the terms of the
Company Option Plans, (iii) make any acquisition of any assets or
businesses other than expenditures for current assets in the
ordinary course of business and expenditures for fixed or capital
assets in the ordinary course of business, (iv) without Parent's
consent, acquire any gaming property within 150 miles of Detroit,
Michigan, (v) sell, pledge, dispose of or encumber any assets or
businesses other than (A) sales of businesses or assets disclosed
in Section 5.01 of the Company Disclosure Schedule, (B) pledges
or encumbrances pursuant to Existing Credit Facilities or other
permitted borrowings, (C) sales or dispositions of businesses or
assets consented to in writing by Parent (which consent shall not
be unreasonably withheld) or for which consent is not denied
within 72 hours after the Company notifies Parent (such notice to
be delivered during business hours on a business day) in writing
that it desires to effect such sale or disposition, (D) sales of
real estate, assets or facilities for cash consideration
(including any debt assumed by the buyer of such real estate,
assets or facilities) to non-affiliates of the Company of less
than $1,000,000 in each such case and $7,000,000 in the aggregate,
(E) sales or dispositions of businesses or assets as may be
required by applicable law, and (F) sales or dispositions of
assets in the ordinary course or (vi) except as contemplated by
the following proviso, enter into any binding contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(e) use all reasonable efforts to preserve intact their
respective business organizations and goodwill, keep available the
services of their respective present officers and key employees,
and preserve the goodwill and business relationships with
customers and others having business relationships with them other
than as expressly permitted by the terms of this Agreement;
(f) not enter into, amend, modify or renew any employment,
consulting, severance or similar agreements with, or grant any
salary, wage or other increase in compensation or increase in any
employee benefit to, any directors or officers of the Company or
its subsidiaries, except (i) for changes that are required by
applicable law, (ii) to satisfy obligations existing as of the
date hereof, or (iii) in the ordinary course of business
consistent with past practice;
(g) not enter into, establish, adopt, amend or modify any
pension, retirement, stock purchase, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare plan, agreement, program or
arrangement, in respect of any directors, officers or employees of
the Company or its subsidiaries, except, in each such case, as may
be required by applicable law or by the terms of contractual
obligations existing as of the date hereof , including any
collective bargaining agreement;
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(h) not make expenditures, including, but not limited to,
capital expenditures, or enter into any binding commitment or
contract to make expenditures, except (i) expenditures which the
Company or its subsidiaries are currently committed to make, (ii)
(A) expenditures relating to the Company's Le Jardin project and
Xxxxx Xxxx Theatre, meeting, convention and exhibit space project,
in each case in accordance with current plans, (B) expenditures
not exceeding $1,000,000 in connection with the Bellagio Spa Tower
project, and (C) other expenditures not exceeding $3,000,000
individually or $80,000,000 in the aggregate, (iii) for emergency
repairs and other expenditures necessary in light of circumstances
not anticipated as of the date of this Agreement which are
necessary to avoid significant disruption to the Company's
business or operations consistent with past practice (and, if
reasonably practicable, after consultation with Parent), or (iv)
for repairs and maintenance in the ordinary course of business
consistent with past practice. With respect to the subject matter
of this paragraph (h), if the Company requests approval of Parent
to exceed the limits set forth herein, Parent shall respond to
such request and grant or withhold approval promptly following
receipt of such request;
(i) not make, change or revoke any material Tax election unless
required by law or make any agreement or settlement with any
taxing authority regarding any material amount of Taxes or which
would reasonably be expected to materially increase the
obligations of the Company or the Surviving Corporation to pay
Taxes in the future.
SECTION 5.02. Control of the Company's Operations. (a)
Nothing contained in this Agreement shall give to Parent, directly
or indirectly, rights to control or direct the Company's
operations prior to the Effective Time. Prior to the Effective
Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of
its operations.
(b) Anything in this Article V to the contrary notwithstanding,
nothing herein shall prohibit or limit the Company or any of its
subsidiaries from selling or disposing of any artwork owned by the
Company or any such subsidiary provided that Parent shall have
consented to such disposition or sale. In connection with any
sale or disposal of any such artwork with Parent's consent during
the period ending at the Effective Time and for five years
thereafter, Xxxxxxx X. Xxxx shall have a right of first refusal on
any such proposed sale or disposition. Specifically, if the
Company or any of its subsidiaries determines to sell or dispose
of any artwork owned by the Company or any of its subsidiaries,
prior to the completion of such sale or disposition the Company or
relevant subsidiary shall offer Xx. Xxxx the opportunity to
purchase such artwork at a price equal to the lower of (A) if a
firm offer has been made by any third party which the Company or a
subsidiary is prepared to accept, the amount of such firm offer
and (B) the higher of (1) the book value of such work of art and
(2) the appraised fair market value of the work of art as
determined by Sotheby's Inc. or Christie's International Plc. (or
their respective affiliates).
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SECTION 5.03. Acquisition Transactions. (a) After the date
hereof and prior to the Effective Time or earlier termination of
this Agreement, the Company shall not, and shall not permit any of
its subsidiaries to, initiate, solicit, negotiate, encourage or
provide confidential information to facilitate, and the Company
shall use all reasonable efforts to cause any officer, director or
employee of the Company, or any attorney, accountant, investment
banker, financial advisor or other agent retained by it or any of
its subsidiaries, not to initiate, solicit, negotiate, encourage
or provide non-public or confidential information to facilitate,
any proposal or offer to acquire all or any substantial part of
the business, properties or capital stock of the Company, whether
by merger, purchase of assets, tender offer or otherwise, whether
for cash, securities or any other consideration or combination
thereof (any such transactions being referred to herein as an
"Acquisition Transaction").
(b) Notwithstanding the provisions of paragraph (a) above, (i)
the Company may, prior to receipt of the Company Stockholders'
Approval, in response to an unsolicited bona fide written offer or
proposal with respect to a potential or proposed Acquisition
Transaction ("Acquisition Proposal") from a corporation,
partnership, person or other entity or group (a "Potential
Acquirer") which the Company's Board of Directors determines, in
good faith and after consultation with its independent financial
advisor, would reasonably be expected to result (if consummated
pursuant to its terms) in an Acquisition Transaction more
favorable to the Company's stockholders than the Merger (a
"Qualifying Proposal"), furnish (subject to the execution of a
confidentiality agreement substantially similar to the
confidentiality provisions of the Confidentiality Agreement (as
defined in Section 5.04)) confidential or non-public information
to, and negotiate with, such Potential Acquirer, may resolve to
accept, or recommend, and, upon termination of this Agreement in
accordance with Section 7.01(v) and after payment to Parent of the
fee pursuant to Section 5.11(b), enter into agreements relating
to, a Qualifying Proposal as to which the Company's Board of
Directors, in good faith, has determined is reasonably likely to
be consummated (such Qualifying Proposal being a "Superior
Proposal") and (ii) the Company's Board of Directors may take
and disclose to the Company's stockholders a position contemplated
by Rule 14e-2 under the Exchange Act or otherwise make disclosure
required by the federal securities laws. It is understood and
agreed that negotiations and other activities conducted in
accordance with this paragraph (b) shall not constitute a
violation of paragraph (a) of this Section 5.03.
(c) The Company shall promptly notify Parent after receipt of
any Acquisition Proposal, indication of interest or request for
non-public information relating to the Company or its subsidiaries
in connection with an Acquisition Proposal or for access to the
properties, books or records of the Company or any subsidiary by
any person or entity that informs the Board of Directors of the
Company or such subsidiary that it is considering making, or has
made, an Acquisition Proposal. Such notice to Parent shall be
made orally and in writing and shall indicate in reasonable detail
the identity of the offeror and the material terms and conditions
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of such proposal, inquiry or contact.
(d) After the date hereof and prior to the Effective Time or
earlier termination of this Agreement, the Parent shall promptly
notify the Company after receipt of any proposal or offer to
acquire all or any substantial part of the business, properties or
capital stock of Parent, whether by merger, purchase of assets,
tender offer or otherwise, whether for cash, securities or any
other consideration or combination thereof and shall indicate in
reasonable detail the identity of the offeror or person and the
material terms and conditions of such proposal or offer and the
financing arrangements, if any, relating thereto.
SECTION 5.04. Access to Information. Subject to applicable
law, the Company and its subsidiaries shall afford to Parent and
Merger Subsidiary and their respective accountants, counsel,
financial advisors, sources of financing and other representatives
(the "Parent Representatives") reasonable access during normal
business hours with reasonable notice throughout the period prior
to the Effective Time to all of their respective properties,
books, contracts, commitments and records (including, but not
limited to, Tax Returns) and, during such period, shall furnish
promptly (i) a copy of each report, schedule and other document
filed or received by any of them pursuant to the requirements of
federal or state securities laws or filed by any of them with the
SEC in connection with the transactions contemplated by this
Agreement, and (ii) such other information concerning its
businesses, properties and personnel as Parent or Merger
Subsidiary shall reasonably request and will use reasonable
efforts to obtain the reasonable cooperation of the Company's
officers, employees, counsel, accountants, consultants and
financial advisors in connection with the investigation of the
Company by Parent and the Parent Representatives. All nonpublic
information provided to, or obtained by, Parent in connection with
the transactions contemplated hereby shall be "Information" for
purposes of the Confidentiality Agreement dated March 2, 2000
between Parent and the Company (the "Confidentiality Agreement"),
provided that Parent, Merger Subsidiary and the Company may
disclose such information as may be necessary in connection with
seeking the Parent Required Statutory Approvals, the Company
Required Statutory Approvals and the Company Stockholders'
Approval. Notwithstanding the foregoing, the Company shall not be
required to provide any information which it reasonably believes
it may not provide to Parent by reason of applicable law, rules or
regulations, which constitutes information protected by
attorney/client privilege, or which the Company or any subsidiary
is required to keep confidential by reason of contract, agreement
or understanding with third parties.
SECTION 5.05. Notices of Certain Events. (a) The Company
shall promptly as reasonably practicable after executive officers
of the Company acquire knowledge thereof, notify Parent of: (i)
any notice or other communication from any person alleging that
the consent of such person (or another person) is or may be
required in connection with the transactions contemplated by this
Agreement which consent relates to a material Contract to which
the Company or any of its subsidiaries is a party or the failure
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of which to obtain would materially delay consummation of the
Merger; (ii) any notice or other communication from any
governmental or regulatory agency or authority in connection with
the transactions contemplated by this Agreement; and (iii) any
actions, suits, claims, investigations or proceedings commenced
or, to the best of its knowledge threatened against, relating to
or involving or otherwise affecting the Company or any of its
subsidiaries that, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Sections
4.08 or 4.10 or which relate to the consummation of the
transactions contemplated by this Agreement.
(b) Each of Parent and Merger Subsidiary shall promptly as
reasonably practicable after executive officers of the Parent
acquire knowledge thereof, notify the Company of: (i) any notice
or other communication from any person alleging that the consent
of such person (or other person) is or may be required in
connection with the transactions contemplated by this Agreement
which consent relates to a material Contract to which Parent or
its subsidiaries are a party or the failure of which to obtain
would materially delay the Merger, (ii) any notice or other
communication from any governmental or regulatory agency or
authority in connection with the transactions contemplated by this
Agreement, and (iii) any actions, suits, claims, investigations
or proceedings commenced or, to the best of its knowledge
threatened, against Parent or Merger Subsidiary, which relate to
consummation of the transactions contemplated by this Agreement.
(c) Subject to the provisions of Section 5.03, each of the
Company, Parent and Merger Subsidiary agrees to give prompt notice
to each other of, and to use commercially reasonable efforts to
remedy, (i) the occurrence or failure to occur of any event which
occurrence or failure to occur would be likely to cause any of its
representations or warranties in this Agreement to be untrue or
inaccurate at the Effective Time unless such failure or occurrence
would not have a Company Material Adverse Effect or a Parent
Material Adverse Effect, as the case may be, and (ii) any failure
on its part to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder unless
such failure or occurrence would not have a Company Material
Adverse Effect or a Parent Material Adverse Effect, as the case
may be; provided, however, that the delivery of any notice
pursuant to this Section 5.05(c) shall not limit or otherwise
affect the remedies available hereunder to the party receiving
such notice.
SECTION 5.06. Merger Subsidiary. Parent will take all action
necessary (a) to cause Merger Subsidiary to be formed and
organized as promptly as practicable, (b) to cause the board of
directors or managing directors to approve this Agreement and the
Merger Agreement as promptly as practicable, (c) to cause Merger
Subsidiary to execute this Agreement as promptly as practicable,
and (d) to cause Merger Subsidiary to perform its obligations
under this Agreement and to consummate the Merger on the terms and
conditions set forth in this Agreement.
SECTION 5.07. Employee Benefits. (a) From and after the
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Effective Time, the benefits to be provided to employees of the
Company and its subsidiaries as of the Effective Time ("Company
Employees") shall be either the Company Plans or the benefit
plans and programs provided to similarly situated employees of
Parent. For purposes of all plans, programs or arrangements
maintained, sponsored or contributed to by Parent or the Surviving
Corporation in which the Company Employees shall be eligible to
participate, Parent shall cause each such plan, program or
arrangement to treat the prior service of each Company Employee
with the Company or its subsidiaries as service rendered to Parent
or the Surviving Corporation for purposes of eligibility, vesting,
levels of benefits and benefits accruals (but not for purposes of
benefit accruals under any defined benefit pension plan), except
to the extent such treatment would result in the duplication of
benefits with respect to the same period of service. From and
after the Effective Time, Parent shall (i) cause any pre-existing
conditions or limitations and eligibility waiting periods under
any group health plans of Parent or its subsidiaries to be waived
with respect to the Company Employees and their eligible
dependents and (ii) give each Company Employee credit for the
plan year in which the Effective Time (or the transition from the
Company Plans to Parent's or the Surviving Corporation's plans)
occurs towards applicable deductibles and annual out-of-pocket
limits for expenses incurred prior to the Effective Time (or such
later transition date). Notwithstanding the foregoing, Company
Employees who are covered under a collective bargaining agreement
shall be provided the benefits that are required by such
collective bargaining agreement from time to time.
(b) Notwithstanding anything contained herein to the contrary,
Parent shall cause the Surviving Corporation to honor in
accordance with their terms all benefits and obligations under the
employee benefit plans and agreements of the Company and its
subsidiaries, including, without limitation, any rights or
benefits arising as a result of the transactions contemplated by
this Agreement (either alone or in combination with any other
event), as well as those set forth on Section 5.07 of the Company
Disclosure Schedule; it being understood that for purposes of all
such plans and agreements, the transactions contemplated by this
Agreement are, or will be deemed to be, a "change of control."
(c) Nothing in this Section 5.07 shall be interpreted as
preventing Parent or the Surviving Corporation from amending,
modifying or terminating any Company Plan, in accordance with its
terms and applicable law.
SECTION 5.08. Meeting of the Company's Stockholders. The
Company shall as promptly as practicable after the date of this
Agreement take all action necessary in accordance with the NRS and
its Restated Articles of Incorporation and bylaws to convene a
meeting of the Company's stockholders (the "Company Stockholders'
Meeting") to act on this Agreement. The Board of Directors of
the Company shall recommend that the Company's stockholders vote
to approve the Merger and adopt this Agreement; provided, however,
that the Company may change its recommendation in any manner if
its recommendation of the Merger would be reasonably likely to be
inconsistent with the board of directors' fiduciary duties under
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applicable law, as concluded by the board of directors in good
faith after consultation with its financial and legal advisors.
SECTION 5.09. Proxy Statement. As promptly as practicable
after execution of this Agreement, the Company shall prepare the
Proxy Statement, file it with the SEC under the Exchange Act, and
use all reasonable efforts to have the Proxy Statement cleared by
the SEC. Parent, Merger Subsidiary and the Company shall
cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Parent of the receipt of
any comments of the SEC with respect to the Proxy Statement and of
any requests by the SEC for any amendment or supplement thereto or
for additional information and shall provide to Parent promptly
copies of all correspondence between the Company or any
representative of the Company and the SEC. The Company shall give
Parent and its counsel the opportunity to review the Proxy
Statement prior to its being filed with the SEC and shall give
Parent and its counsel the opportunity to review all amendments
and supplements to the Proxy Statement and all responses to
requests for additional information and replies to comments prior
to their being filed with, or sent to, the SEC. Each of the
Company, Parent and Merger Subsidiary agrees to use its reasonable
best efforts, after consultation with the other parties hereto to
respond promptly to all such comments of and requests by the SEC.
As promptly as practicable after the Proxy Statement has been
cleared by the SEC, the Company shall mail the Proxy Statement to
the stockholders of the Company. Prior to the date of approval of
the Merger by the Company's stockholders, each of the Company,
Parent and Merger Subsidiary shall correct promptly any
information provided by it to be used specifically in the Proxy
Statement that shall have become false or misleading in any
material respect and the Company shall take all steps necessary to
file with the SEC and cleared by the SEC any amendment or
supplement to the Proxy Statement so as to correct the same and to
cause the Proxy Statement as so corrected to be disseminated to
the stockholders of the Company, in each case to the extent
required by applicable law.
SECTION 5.10. Public Announcements. Parent and the Company
will consult with each other before issuing any press release or
making any public statement with respect to this Agreement and the
transactions contemplated hereby and, except as may be required by
applicable law or any listing agreement with the NYSE, will not
issue any such press release or make any such public statement
prior to such consultation.
SECTION 5.11. Expenses and Fees. (a) All costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
expenses, except that those expenses incurred in connection with
printing and filing the Proxy Statement shall be shared equally by
Parent and the Company.
(b) The Company agrees to pay to Parent a fee equal to $135
million if:
(i) the Company terminates this Agreement pursuant to clause (v)
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of Section 7.01;
(ii) Parent terminates this Agreement pursuant to clause (vii)
of Section 7.01, which fee shall be payable within two business
days of such termination;
(iii) this Agreement is terminated for any reason at a time
at which Parent was not in material breach of its representations,
warranties, covenants and agreements contained in this Agreement
and was entitled to terminate this Agreement pursuant to clause
(viii) of Section 7.01, and (A) prior to the time of the Company
Stockholders' Meeting a proposal by a third party relating to an
Acquisition Transaction had been publicly proposed or publicly
announced, and (B) on or prior to the 12 month anniversary of the
termination of this Agreement the Company or any of its
subsidiaries or affiliates enters into an agreement or letter of
intent (or resolves or announces an intention to do) with respect
to an Acquisition Transaction involving a person, entity or group
if such person, entity, group (or any member of such group, or any
affiliate of any of the foregoing) made a proposal with respect
to an Acquisition Transaction on or after the date hereof and
prior to the Company Stockholders' Meeting and such Acquisition
Transaction is consummated.
SECTION 5.12. Agreement to Cooperate. (a) Subject to the
terms and conditions of this Agreement, including Section 5.03,
each of the parties hereto shall use all reasonable best efforts
to take, or cause to be taken, all action and to do, or cause to
be done, all things necessary, proper or advisable under
applicable laws and regulations (including the HSR Act and the
Gaming Laws) to consummate and make effective the transactions
contemplated by this Agreement, including using its reasonable
best efforts to obtain all necessary or appropriate waivers,
consents or approvals of third parties required in order to
preserve material contractual relationships of Parent and the
Company and their respective subsidiaries, all necessary or
appropriate waivers, consents and approvals to effect all
necessary registrations, filings and submissions and to lift any
injunction or other legal bar to the Merger (and, in such case, to
proceed with the Merger as expeditiously as possible). In
addition, subject to the terms and conditions herein provided and
subject to the fiduciary duties of the respective boards of
directors of the Company and Parent, none of the parties hereto
shall knowingly take or cause to be taken any action (including,
but not limited to, in the case of Parent, (x) the incurrence of
material debt financing, other than the financing in connection
with the Merger and related transactions and other than debt
financing incurred in the ordinary course of business, and (y)
the acquisition of businesses or assets) which would reasonably
be expected to materially delay or prevent consummation of the
Merger. Parent shall use its reasonable best efforts to cause the
satisfaction of the conditions to the receipt of funds pursuant to
the Financing Commitment.
(b) Without limitation of the foregoing, each of Parent and the
Company undertakes and agrees to file as soon as practicable a
Notification and Report Form under the HSR Act with the United
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States Federal Trade Commission (the "FTC") and the Antitrust
Division of the United States Department of Justice (the
"Antitrust Division") and to make such filings and apply for such
approvals and consents as are required under the Gaming Laws.
Each of Parent and the Company shall (i) respond as promptly as
practicable to any inquiries received from the FTC or the
Antitrust Division or any authority enforcing applicable Gaming
Laws for additional information or documentation and to all
inquiries and requests received from any State Attorney General or
other governmental authority in connection with antitrust matters
or Gaming Laws, and (ii) not extend any waiting period under the
HSR Act or enter into any agreement with the FTC or the Antitrust
Division not to consummate the transactions contemplated by this
Agreement, except with the prior written consent of the other
parties hereto. Parent shall offer to take (and if such offer is
accepted, commit to take) all steps which it is capable of taking
to avoid or eliminate impediments under any antitrust,
competition, or trade regulation law or Gaming Laws that may be
asserted by the FTC, the Antitrust Division, any State Attorney
General or any other governmental entity with respect to the
Merger so as to enable the Effective Time to occur prior to the
Outside Date and shall defend through litigation on the merits any
claim asserted in any court by any party, including appeals.
Without limiting the foregoing, Parent shall propose, negotiate,
offer to commit and effect (and if such offer is accepted, commit
to and effect), by consent decree, hold separate order, or
otherwise, the sale, divestiture or disposition of such assets or
businesses of Parent or, effective as of the Effective Time, the
Surviving Corporation, or their respective subsidiaries or
otherwise offer to take or offer to commit to take any action
which it is capable of taking and if the offer is accepted, take
or commit to take such action that limits its freedom of action
with respect to, or its ability to retain, any of the businesses,
services or assets of Parent, the Surviving Corporation or their
respective subsidiaries, in order to avoid the entry of, or to
effect the dissolution of, any injunction, temporary restraining
order or other order in any suit or proceeding, which would
otherwise have the effect of preventing or delaying the Effective
Time beyond the Outside Date; provided; however, that anything to
the contrary in this Agreement notwithstanding, neither Parent nor
any of its subsidiaries shall be required to divest or dispose of
any property that is material to the business of Parent and its
subsidiaries, taken as a whole. At the request of Parent, the
Company shall agree to divest, hold separate or otherwise take or
commit to take any action that limits its freedom of action with
respect to, or its ability to retain, any of the businesses,
services, or assets of the Company or any of its subsidiaries,
provided that any such action may be conditioned upon the
consummation of the Merger and the transactions contemplated
hereby. Each party shall (i) promptly notify the other party of
any written communication to that party from the FTC, the
Antitrust Division, any State Attorney General or any other
governmental entity and, subject to applicable law, permit the
other party to review in advance any proposed written
communication to any of the foregoing; (ii) not agree to
participate in any substantive meeting or discussion with any
governmental authority in respect of any filings, investigation or
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inquiry concerning this Agreement or the Merger unless it consults
with the other party in advance and, to the extent permitted by
such governmental authority, gives the other party the opportunity
to attend and participate thereat; and (iii) furnish the other
party with copies of all correspondence, filings, and
communications (and memoranda setting forth the substance thereof)
between them and their affiliates and their respective
representatives on the one hand, and any government or regulatory
authority or members or their respective staffs on the other hand,
with respect to this Agreement and the Merger.
(c) Parent agrees to use its reasonable best efforts to obtain
the Financing in accordance with the Financing Commitment or
alternate commitments or arrangements that are not reasonably
likely to cause a material delay in the consummation of the Merger
or have a material adverse effect on the ability of Parent to
deliver to the Company's stockholders the economic benefits they
are reasonably expected to receive by virtue of the Merger.
SECTION 5.13. Directors' and Officers' Indemnification. (a)
The indemnification provisions of the articles of incorporation
and bylaws of the Company as in effect at the Effective Time shall
not be amended, repealed or otherwise modified for a period of six
years from the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who at the Effective
Time were directors, officers, employees or agents of the Company.
(b) Without limiting Section 5.13(a), after the Effective Time,
the Surviving Corporation shall, and Parent shall cause the
Surviving Corporation to, to the fullest extent permitted under
applicable law, indemnify and hold harmless, each present and
former director, officer, employee and agent of the Company or any
of its subsidiaries (each, together with such person's heirs,
executors or administrators, an "Indemnified Party" and
collectively, the "Indemnified Parties") against any costs or
expenses (including attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and amounts paid in settlement in
connection with any actual or threatened claim, action, suit,
proceeding or investigation, whether civil, criminal,
administrative or investigative (collectively, "Costs and
Expenses"), arising out of, relating to or in connection with (i)
any action or omission occurring or alleged to occur prior to the
Effective Time (including, without limitation, acts or omissions
in connection with such persons serving as an officer, director or
other fiduciary in any entity if such service was at the request
or for the benefit of the Company) and (ii) the Merger and the
other transactions contemplated by this Agreement or arising out
of or pertaining to the transactions contemplated by this
Agreement or the events and developments between Parent and the
Company leading up to this Agreement. In addition, Parent shall
indemnify and hold harmless each of the Indemnified Parties
against any Costs and Expenses arising out of, relating to or in
connection with the matters referred to in clause (ii) of the
preceding sentence. In the event of any actual or threatened
claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), (i) the Company or Parent
and the Surviving Corporation, as the case may be, shall pay the
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reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably
satisfactory to the Parent and the Surviving Corporation, promptly
after statements therefor are received and shall pay all other
reasonable expenses in advance of the final disposition of such
action, (ii) the Parent and the Surviving Corporation will
cooperate and use all reasonable efforts to assist in the vigorous
defense of any such matter, and (iii) to the extent any
determination is required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth
under the NRS and the Parent's or the Surviving Corporation's
respective articles of incorporation or bylaws, such determination
shall be made by independent legal counsel acceptable to the
Parent or the Surviving Corporation, as the case may be, and the
Indemnified Party; provided, however, that neither Parent nor the
Surviving Corporation shall be liable for any settlement effected
without its written consent (which consent shall not be
unreasonably withheld) and, provided further, that if Parent or
the Surviving Corporation advances or pays any amount to any
person under this paragraph (b) and if it shall thereafter be
finally determined by a court of competent jurisdiction that such
person was not entitled to be indemnified hereunder for all or any
portion of such amount, to the extent required by law, such person
shall repay such amount or such portion thereof, as the case may
be, to Parent or the Surviving Corporation, as the case may be.
The Indemnified Parties as a group may not retain more than one
law firm to represent them with respect to each matter unless
there is, under applicable standards of professional conduct, a
conflict on any significant issue between the positions of any two
or more Indemnified Parties.
(c) In the event the Surviving Corporation or Parent or any of
their successors or assigns (i) consolidates with or merges into
any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii)
transfers all or substantially all of its properties and assets to
any person, then and in each such case, proper provisions shall be
made so that the successors and assigns of the Surviving
Corporation or Parent shall assume the obligations of the
Surviving Corporation or the Parent, as the case may be, set forth
in this Section 5.13.
(d) For a period of six years after the Effective Time, Parent
shall cause to be maintained or shall cause the Surviving
Corporation to maintain in effect the current policies of
directors' and officers' liability insurance maintained by the
Company and its subsidiaries (provided that Parent may substitute
therefor policies of at least the same coverage and amounts
containing terms and conditions that are no less advantageous to
the Indemnified Parties, and which coverages and amounts shall be
no less than the coverages and amounts provided at that time for
Parent's directors and officers) with respect to matters arising
on or before the Effective Time; provided, however, that Parent
and the Surviving Corporation shall not be required to expend in
any year an amount in excess of 250% of the annual aggregate
premiums currently paid by the Company for such insurance; and
provided, further, that if the annual premiums of such insurance
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coverage exceed such amount, Parent and the Surviving Corporation
shall be obligated to obtain a policy with the best coverage
available, in the reasonable judgment of the Parent's board of
directors, for a cost not exceeding such amount.
(e) Parent shall pay all reasonable expenses, including
reasonable attorneys' fees, that may be incurred by any
Indemnified Party in enforcing the indemnity and other obligations
provided in this Section 5.13.
(f) The rights of each Indemnified Party hereunder shall be in
addition to, and not in limitation of, any other rights such
Indemnified Party may have under the charter or bylaws of the
Company, any indemnification agreement, under the NRS or
otherwise. The provisions of this Section 5.13 shall survive the
consummation of the Merger and expressly are intended to benefit
each of the Indemnified Parties.
SECTION 5.14. Company Securities. Between the date hereof and
the Effective Time, neither Parent nor any of its subsidiaries
shall acquire, or agree to acquire, whether in the open market or
otherwise, any rights in any equity securities of the Company
other than pursuant to the Merger.
SECTION 5.15. Continuing Directors. Prior to the Effective
Time, but to take effect as of the Effective Time, the Board of
Directors of the Company shall approve by the affirmative vote of
a majority of the directors present and voting (and not fewer than
three directors voting in the affirmative) the election to the
board of directors of the Surviving Corporation of each and any
person nominated or designated by Parent in writing.
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Subsidiary to
consummate the Merger are subject to the satisfaction of the
following conditions:
(a) this Agreement and the Merger shall have been adopted by the
requisite vote of the stockholders of the Company in accordance
with NRS (the "Company Stockholders' Approval");
(b) none of the parties hereto shall be subject to any order or
injunction of any governmental authority of competent jurisdiction
that prohibits the consummation of the Merger. In the event any
such order or injunction shall have been issued, each party agrees
to use its reasonable best efforts to have any such order
overturned or injunction lifted; and
(c) the waiting period applicable to consummation of the Merger
under the HSR Act shall have expired or been terminated.
SECTION 6.02. Conditions to Obligation of the Company to Effect
the Merger. Unless waived by the Company, the obligation of the
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Company to effect the Merger shall be subject to the fulfillment
at or prior to the Effective Time of the following additional
conditions:
(a) Parent and Merger Subsidiary shall have performed in all
material respects their agreements contained in this Agreement
required to be performed on or prior to the Effective Time and the
representations and warranties of Parent and Merger Subsidiary
contained in this Agreement shall be true and correct on and as of
the Effective Time as if made at and as of such date (except to
the extent that such representations and warranties speak as of an
earlier date), except for such failures to perform or to be true
and correct that would not reasonably be expected to have a Parent
Material Adverse Effect, and the Company shall have received a
certificate of the chief executive officer or the chief financial
officer of Parent to that effect; and
(b) all Parent Statutory Approvals and Company
Statutory Approvals required to be obtained in order to permit
consummation of the Merger under applicable law shall have been
obtained, except for any such Parent Statutory Approvals or
Company Statutory Approvals the failure of which to obtain would
not, singly or in the aggregate, reasonably be expected to (i)
have a Company Material Adverse Effect after the Effective Time,
or (ii) result in the Company or its subsidiaries failing to meet
the standards for licensing, suitability or character under any
Gaming Laws relating to the conduct of Parent's or the Company's
business which (after taking into account the anticipated impact
of such failure to so meet such standards on other authorities)
would reasonably be expected to have a Company Material Adverse
Effect (after giving effect to the Merger).
SECTION 6.03. Conditions to Obligations of Parent and
Subsidiary to Effect the Merger. Unless waived by Parent and
Merger Subsidiary, the obligations of Parent and Merger Subsidiary
to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the additional following
conditions:
(a) the Company shall have performed in all material respects
its agreements contained in this Agreement required to be
performed on or prior to the Effective Time and the
representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the Effective
Time as if made at and as of such date (except to the extent that
such representations and warranties speak as of an earlier date),
except for such failures to perform and to be true and correct
that would not reasonably be expected to have a Company Material
Adverse Effect or, in the case of Section 4.02(a), shall be true
and correct when made except for immaterial exceptions thereto,
and Parent shall have received a certificate of the chief
executive officer or the chief financial officer of the Company to
that effect; and
(b) all Parent Statutory Approvals and Company Statutory
Approvals required to be obtained in order to permit consummation
of the Merger under applicable law shall have been obtained,
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except for any such Parent Statutory Approvals or Company
Statutory Approvals the failure of which to obtain would not
reasonably be expected to (i) have a Parent Material Adverse
Effect, or (ii) result in Parent or its subsidiaries failing to
meet the standards for licensing, suitability or character under
any Gaming Laws relating to the conduct of Parent's or the
Company's business which (after taking into account the
anticipated impact of such failure to so meet such standards on
other authorities) would reasonably be expected to have a Parent
Material Adverse Effect (after giving effect to the Merger).
ARTICLE VII
TERMINATION
SECTION 7.01. Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective
Time (notwithstanding any approval of this Agreement by the
stockholders of the Company):
(i) by mutual written consent of the Company and Parent;
(ii) by either the Company or Parent, if the Merger has not been
consummated by December 31, 2000 (the "Outside Date"), provided
that such date shall automatically be extended until March 31,
2001 if, on December 31, 2000, all of the conditions to the
Closing set forth in Article VI shall then be satisfied (other
than conditions with respect to actions the respective parties
will take at the Closing itself) except that (1) the waiting
period under the HSR Act has not expired or been terminated, (2)
any approval or consent under any Gaming Law, the absence of which
would cause a failure of a condition set forth in Section 6.02 or
6.03 has not been received, or (3) any injunction, order or decree
shall prohibit or restrain consummation of the Merger and provided
further that the right to terminate this Agreement under this
clause (ii) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement has been the
cause of or resulted in the failure to consummate the Merger by
such date;
(iii) by either the Company or Parent if any judgment,
injunction, order or decree of a court or governmental agency or
authority of competent jurisdiction shall restrain or prohibit the
consummation of the Merger, and such judgment, injunction, order
or decree shall become final and nonappealable and was not entered
at the request of the terminating party;
(iv) by either the Company or Parent, if (x) there has been a
breach by the other party of any representation or warranty
contained in this Agreement which would reasonably be expected to
have a Company Material Adverse Effect or a Parent Material
Adverse Effect, as the case may be, or prevent or delay the
consummation of the Merger beyond the Outside Date, and which has
not been cured in all material respects within 30 days after
written notice of such breach by the terminating party, or (y)
there has been a breach of any of the covenants or agreements set
forth in this Agreement on the part of the other party, which
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would reasonably be expected to have a Parent Material Adverse
Effect or a Company Material Adverse Effect, as the case may be,
or prevent or delay the consummation of the Merger beyond the
Outside Date, and which breach is not curable or, if curable, is
not cured within 30 days after written notice of such breach is
given by the terminating party to the other party;
(v) by the Company if, prior to receipt of the Company
Stockholders' Approval, the Company receives a Superior Proposal,
resolves to accept such Superior Proposal, and shall have given
Parent two days' prior written notice of its intention to
terminate pursuant to this provision; provided, however, that such
termination shall not be effective until such time as the payment
required by Section 5.11(b) shall have been received by Parent;
(vi) [Reserved];
(vii) by the Parent, if the Board of Directors of the Company
shall have failed to recommend, or shall have withdrawn, modified
or amended in any material respects its approval or recommendation
of the Merger or shall have resolved to do any of the foregoing,
or shall have recommended another Acquisition Proposal or if the
Board of Directors of the Company shall have resolved to accept a
Superior Proposal or shall have recommended to the stockholders of
the Company that they tender their shares in a tender or an
exchange offer commenced by a third party (excluding any affiliate
of Parent or any group of which any affiliate of Parent is a
member);
(viii) by Parent or the Company if the stockholders of the
Company fail to approve the Merger at a duly held meeting of
stockholders called for such purpose (including any adjournment or
postponement thereof); or
(ix) by the Company if the Financing Commitment has been (1)
amended or modified in a manner that is reasonably likely to cause
a material delay in the consummation of the Merger or have a
material adverse effect on the ability of Parent to deliver to the
Company's stockholders the economic benefits they are reasonably
expected to receive by virtue of the Merger or (2) withdrawn or
revoked and not replaced by alternate commitments or arrangements
that are not reasonably likely to cause a material delay in the
consummation of the Merger or have a material adverse effect on
the ability of Parent to deliver to the Company's stockholders the
economic benefits they are reasonably expected to receive by
virtue of the Merger, and, in the case of either of clause (1) or
(2), the withdrawal, revocation, amendment or modification (as the
case may be) shall not have been cured within 30 days.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Effect of Termination. In the event of
termination of this Agreement by either Parent or the Company
pursuant to the provisions of Section 7.01, this Agreement shall
forthwith become void and there shall be no liability or further
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obligation on the part of the Company, Parent, Merger Subsidiary
or their respective officers or directors (except as set forth in
this Section 8.01, in the second sentence of Section 5.04 and in
Section 5.11, all of which shall survive the termination).
Nothing in this Section 8.01 shall relieve any party from
liability for any breach of any covenant or agreement of such
party contained in this Agreement.
SECTION 8.02. Non-Survival of Representations and Warranties.
No representations, warranties or agreements in this Agreement or
in any instrument delivered pursuant to this Agreement shall
survive the Merger, and after effectiveness of the Merger neither
the Company, Parent, Merger Subsidiary nor their respective
officers or directors shall have any further obligation with
respect thereto except for the agreements contained in Articles I,
II and VIII and Sections 5.07 and 5.13.
SECTION 8.03. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, mailed by registered or certified mail
(return receipt requested) or sent via facsimile to the parties
at the following addresses (or at such other address for a party
as shall be specified by like notice):
If to the Company:
Mirage Resorts, Incorporated
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx, Esq.
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If to Parent or Merger Subsidiary:
MGM Grand, Inc.
0000 Xxx Xxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxx, Xxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Christensen, Miller, Fink, Jacobs, Xxxxxx, Xxxx & Xxxxxxx, LLP
2121 Avenue of the Stars
Xxxxxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
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SECTION 8.04. Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. In this
Agreement, unless a contrary intention appears, (i) the words
"herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision, (ii)
"knowledge" shall mean actual knowledge of the executive officers
of the Company or Parent, as the case may be, and (iii) reference
to any Article or Section means such Article or Section hereof.
No provision of this Agreement shall be interpreted or construed
against any party hereto solely because such party or its legal
representative drafted such provision. For purposes of
determining whether any fact or circumstance involves a material
adverse effect on the ongoing operations of a party, any special
transaction charges incurred by such party as a result of the
consummation of transactions contemplated by this Agreement shall
not be considered.
SECTION 8.05. Miscellaneous. This Agreement (including the
documents and instruments referred to herein): shall not be
assigned by operation of law or otherwise except that Merger
Subsidiary may assign its obligations under this Agreement to any
other wholly-owned subsidiary of Parent subject to the terms of
this Agreement, in which case such assignee shall become the
"Merger Subsidiary" for all purposes of this Agreement. THIS
AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY,
INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF NEVADA
APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN
SUCH STATE.
SECTION 8.06. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same
agreement.
SECTION 8.07. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective
Time if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Company, Parent and
Merger Subsidiary or, in the case of a waiver, by the party
against whom the waiver is to be effective; provided that any
waiver or amendment shall be effective against a party only if the
board of directors of such party approves such waiver or
amendment.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 8.08. Entire Agreement. This Agreement and the
Confidentiality Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and
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supersede all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement,
promise, understanding, condition or warranty not set forth herein
has been made or relied upon by either party hereto. Neither this
Agreement nor any provision hereof is intended to confer upon any
person other than the parties hereto any rights or remedies
hereunder except for the provisions of Section 5.13, which are
intended for the benefit of the Company's former and present
officers, directors, employees and agents, the provisions of
Articles I and II, which are intended for the benefit of the
Company's stockholders, including holders of Options, the
provisions of Section 5.07, which are intended for the benefit of
the parties to the agreements or participants in the plans
referred to therein, the provisions of Section 5.02(b), which are
for the benefit of Xxxxxxx X. Xxxx, and Section 8.11, which is
intended for the benefit of the person and entity named therein.
SECTION 8.09. Severability. If any term or other provision of
this Agreement is invalid, illegal or unenforceable, all other
provisions of this Agreement shall remain in full force and effect
so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially
adverse to any party.
SECTION 8.10. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any of the
provisions of this Agreement were not to be performed in
accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition
to any other remedies at law or in equity.
SECTION 8.11. Non-Involvement of Tracinda. The Parties
acknowledge that neither Xxxx Xxxxxxxxx nor Tracinda Corporation,
individually or collectively, is a party to this Agreement or any
exhibit or agreement provided for herein. Accordingly, the
Parties hereby agree that in the event (i) there is any alleged
breach or default by any Party under this Agreement or any exhibit
or agreement provided for herein, or (ii) any Party has any claim
arising from or relating to any such agreement, no Party, nor any
party claiming through it (to the extent permitted by applicable
law), shall commence any proceedings or otherwise seek to impose
any liability whatsoever against Xx. Xxxxxxxxx or Tracinda
Corporation by reason of such alleged breach, default or claim.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
MGM GRAND, INC.
/s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Financial Officer
MIRAGE RESORTS, INCORPORATED
/s/ Xxxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chairman, President and Chief
Executive Officer
Merger Subsidiary: MGMGMR ACQUISITION, INC.
/s/ Xxxxx Xxxxxxxx
____________________________________________
Name: Xxxxx Xxxxxxxx
Title: President
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