AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER BY AND AMONG KERZNER INTERNATIONAL LIMITED, K-TWO HOLDCO LIMITED AND K-TWO SUBCO LIMITED APRIL 30, 2006
Exhibit
2.1
AMENDED
AND RESTATED
BY
AND
AMONG
▇▇▇▇▇▇▇
INTERNATIONAL LIMITED,
K-TWO
HOLDCO LIMITED
AND
K-TWO
SUBCO LIMITED
APRIL
30,
2006
ii
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Page
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ARTICLE
X
MISCELLANEOUS
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49
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Section
10.1. Notices
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49
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Section
10.2. Survival of Representations and
Warranties
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50
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Section
10.3. Expenses
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50
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Section
10.4. Amendment
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50
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Section
10.5. Waiver
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50
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Section
10.6. Successors and
Assigns
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50
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Section
10.7. Governing Law
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51
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Section
10.8. Counterparts; Effectiveness; Third Party
Beneficiaries
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51
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Section
10.9. Severability
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51
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Section
10.10. Entire Agreement
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51
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Section
10.11. Jurisdiction
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51
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Section
10.12. Authorship
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53
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Section
10.13. Remedies
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53
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Section
10.14. Termination of Other
Agreements
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53
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iii
AMENDED
AND RESTATED AGREEMENT AND PLAN OF MERGER
This
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this “Agreement”)
is
made and entered into as of this 30th day of April, 2006 by and among ▇▇▇▇▇▇▇
International Limited, an international business company incorporated under
the
laws of the Commonwealth of The Bahamas (the “Company”),
K-Two
Holdco Limited, an international business company incorporated under the laws
of
the Commonwealth of The Bahamas (“Parent”),
and
K-Two Subco Limited, an international business company incorporated under the
laws of the Commonwealth of The Bahamas and a direct wholly-owned subsidiary
of
Parent (“Merger
Sub”).
RECITALS
A.
The
parties have entered into an Agreement and Plan of Merger, dated as of March
20,
2006 (the “Original
Merger Agreement”).
B.
The parties intend that Merger Sub be merged with and into the Company (the
“Merger”),
with
the Company surviving the Merger as a wholly-owned subsidiary of Parent (the
“Surviving
Corporation”).
The
name of the Surviving Corporation shall be ▇▇▇▇▇▇▇ International
Limited.
C.
The Board of Directors of the Company, acting upon the unanimous recommendation
of the Special Committee, has (i) determined that the Merger and this Agreement
are fair to and in the best interests of the Company and its shareholders,
(ii)
approved this Agreement and (iii) resolved to recommend that shareholders of
the
Company approve this Agreement.
D.
The Board of Directors of Merger Sub has unanimously approved this Agreement.
E.
Certain existing shareholders of the Company desire to contribute Ordinary
Shares to Parent immediately prior to the Effective Time in exchange for shares
of capital stock of Parent.
F.
The Company, Parent and Merger Sub desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to
prescribe certain conditions to the Merger, as set forth herein.
G.
The Company, Parent and Merger Sub desire to amend and restate the Original
Merger Agreement in order to make certain amendments thereto.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, intending to be legally
bound, the parties hereto agree as follows:
DEFINITIONS
Section
1.1. Definitions.
For
purposes of this Agreement, the following terms have the respective meanings
set
forth below:
“6
¾%
Notes Indenture”
has
the
meaning set forth in Section 7.10.
“6
¾%
Notes”
has
the
meaning set forth in Section 7.10.
“Acceptable
Confidentiality Agreement”
has
the
meaning set forth in Section 7.4(g)(i).
“Affiliate”
means,
with respect to any Person, any other Person, directly or indirectly,
controlling, controlled by, or under common control with, such Person. For
purposes of this definition, the term “control” (including the correlative terms
“controlling”, “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Agreement”
has
the
meaning set forth in the Preamble.
“Articles
of Merger”
has
the
meaning set forth in Section 2.1(b).
“Authorized
Agent”
has
the
meaning set forth in Section 10.11(c).
“Business
Day”
means
any day other than the days on which banks in New York, New York or The Bahamas
are not required or authorized to close.
“Certificate”
has
the
meaning set forth in Section 2.2(c).
“Closing”
has
the
meaning set forth in Section 2.1(d).
“Closing
Date”
has
the
meaning set forth in Section 2.1(d)
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Company”
has
the
meaning set forth in the Preamble.
“Company
Acquisition Proposal”
has
the
meaning set forth in Section 7.4(g)(ii).
“Company
Benefit Plans”
has
the
meaning set forth in Section 4.13(a).
“Company
Disclosure Letter”
has
the
meaning set forth in the preamble to Article IV.
“Company
Employees”
means
any current, former or retired employee, officer, consultant, independent
contractor or director of the Company or any of its Subsidiaries.
2
“Company
Equity Awards”
means
Company Options, Company Restricted Shares, Company SARs and Company
RSUs.
“Company
Joint Venture”
means,
with respect to the Company, any corporation or other entity (including
partnerships, limited liability companies and other business associations and
joint ventures) in which the Company, directly or indirectly, owns an equity
interest that does not have voting power under ordinary circumstances to elect
a
majority of the board of directors or other person performing similar functions
but in which the Company has rights with respect to the management of such
Person.
“Company
Options”
means
outstanding options to acquire Ordinary Shares from the Company granted to
Company Employees under the Company Stock Plans or otherwise.
“Company
Proxy Statement”
means
the proxy statement relating to the approval of the Merger by the Company’s
shareholders prepared in accordance with applicable Law and including the
information required to be included in the Schedule 13E-3.
“Company
Restricted Shares”
means,
as of a particular date, Ordinary Shares granted to Company Employees under
the
Company Stock Plans that are then outstanding but at such time are subject
to
forfeiture conditions or other lapse restrictions pursuant to the Company Stock
Plans and any applicable restricted stock award agreements.
“Company
RSU”
means
an outstanding restricted stock unit with respect to one Ordinary Share granted
to a Company Employee under a Company Stock Plan or otherwise.
“Company
SARs”
means
outstanding stock appreciation rights with respect to Ordinary Shares granted
to
Company Employees under the Company Stock Plans or otherwise.
“Company
SEC Reports”
has
the
meaning set forth in Section 4.7(a).
“Company
Securities”
has
the
meaning set forth in Section 4.5(b).
“Company
Shareholder Meeting”
has
the
meaning set forth in Section 7.1(a).
“Company
Stock Plans”
means
the
▇▇▇▇▇▇▇ Gaming & Entertainment, Inc. 1994 Stock Option Plan (as amended on
May 10, 1996), the Sun International Limited 1997 Stock Option Plan, as amended,
the Company 2000 Stock Option Plan, the Company 2003 Stock Incentive Plan and
the Company 2005 Stock Incentive Plan.
“Compensation”
has
the
meaning set forth in Section 7.8(a).
“Confidentiality
Agreements”
has
the
meaning set forth in Section 7.4(g)(i).
“Contract”
has
the
meaning set forth in Section 4.4.
“Convertible
Notes”
has
the
meaning set forth in Section 4.5(b).
“Convertible
Notes Indenture”
has
the
meaning set forth in Section 7.10.
3
“Current
Employee”
has
the
meaning set forth in Section 7.8(a).
“Current
Policies”
has
the
meaning set forth in Section 7.5(a).
“Damages”
has
the
meaning set forth in Section 7.5(a).
“Debt
Financing”
has
the
meaning set forth in Section 5.7.
“Debt
Financing Commitments”
has
the
meaning set forth in Section 5.7.
“Debt
Tender Offers”
has
the
meaning set forth in Section 7.10.
“Director
Options”
means
Company Options granted to an individual who, at the time of grant, was a member
of the Board of Directors of the Company (including any such member who is
also
an employee of the Company).
“Director
Restricted Shares”
means
Company Restricted Shares granted to an individual who, at the time of grant,
was a member of the Board of Directors of the Company (including any such member
who is also an employee of the Company).
“Director
SARs”
means
Company SARs granted to an individual who, at the time of grant, was a member
of
the Board of Directors of the Company (including any such member who is also
an
employee of the Company).
“Disbursing
Agent”
has
the
meaning set forth in Section 2.3(a).
“Disinterested
Director”
means
a
member of the Board of Directors of the Company who (i) has no direct or
indirect interest in Parent, whether as an investor or otherwise, (ii) is not
a
representative of any Person or entity who has any such interest in Parent
and
(iii) is not otherwise affiliated with Parent.
“Dissenting
Ordinary Shares”
has
the
meaning set forth in Section 2.2(d).
“DOJ”
has
the
meaning set forth in Section 7.2(b).
“Effective
Time”
has
the
meaning set forth in Section 2.1(b).
“Employee
Benefit Plan”
has
the
meaning set forth in Section 3(3) of ERISA.
“Employee
Equity Awards”
means
Employee Options, Employee Restricted Shares and Employee SARs.
“Employee
Options”
means
Company Options that are not Director Options.
“Employee
Restricted Shares”
means
Company Restricted Shares that are not Director Restricted Shares.
“Employee
SARs”
means
Company SARs that are not Director SARs.
4
“Employment
Agreement”
means
any employment, severance, retention, termination, indemnification, change
in
control or similar agreement between the Company or any of its Subsidiaries,
on
the one hand, and any current or former employee of the Company or any of its
Subsidiaries, on the other hand.
“End
Date”
has
the
meaning set forth in Section 9.1(b)(i).
“Equity
Award Consideration”
has
the
meaning set forth in Section 2.4(b).
“Equity
Financing”
has
the
meaning set forth in Section 5.7.
“Equity
Financing Commitments”
has
the
meaning set forth in Section 5.7.
“Equity
Rollover Commitments”
has
the
meaning set forth in Section 5.8.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Execution
Date”
means
the date on which this Agreement is executed and delivered by each of the
parties hereto.
“Financing”
has
the
meaning set forth in Section 5.7.
“Financing
Commitments”
has
the
meaning set forth in Section 5.7.
“FTC”
has
the
meaning set forth in Section 7.2(b).
“Gaming
Authority”
means
any Governmental Authority with regulatory control or jurisdiction over casino
or other gaming activities and operations.
“Gaming
Law”
means,
with respect to any Person, any Law governing or relating to any current or
contemplated casino or other gaming activities and operations of such Person
and
its Affiliates.
“GAAP”
means
United States generally accepted accounting principles.
“Governmental
Authority”
means
any nation or government or any agency, public or regulatory authority,
instrumentality, department, commission, court, arbitrator, ministry, tribunal
or board of any nation or government or political subdivision thereof, in each
case, whether foreign or domestic and whether national, supranational, federal,
tribal, provincial, state, regional, local or municipal.
“HBK”
means
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
“IBCA”
means
the International Business Companies Act, 2000 of the Commonwealth of The
Bahamas, as amended.
5
“Indentures”
has
the
meaning set forth in Section 7.10.
“Insurance
Amount”
has
the
meaning set forth in Section 7.5(a).
“Interim
Investors Agreement”
has
the
meaning set forth in Section 6.2.
“Istithmar”
means
Istithmar PJSC, a public joint stock company incorporated under the laws of
Dubai, United Arab Emirates.
“KINA”
has
the
meaning set forth in Section 7.10.
“Law”
means
applicable, statutes, common laws, rules, ordinances, regulations, codes,
licensing requirements, orders, judgments, injunctions, writs, decrees,
licenses, governmental guidelines or interpretations having the force of law,
permits, rules and bylaws, in each case, of a Governmental
Authority.
“Liens”
means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
“Material
Adverse Effect on the Company”
means
a
material adverse effect on the assets or liabilities, business, financial
condition or results of operations of the Company and its Subsidiaries, taken
as
a whole; provided,
however,
that in
no event shall any of the following, alone or in combination, be deemed to
constitute, nor shall any of the following be taken into account in determining
whether there has been, a Material Adverse Effect on the Company: (A) any fact,
change, development, circumstance, event, effect or occurrence (an “Effect”)
in
general economic or political conditions or in the financial or securities
markets, (B) any Effect generally affecting, or resulting from general changes
or developments in, the industries in which the Company and its Subsidiaries
operate, (C) any failure to meet internal or published projections, forecasts
or
revenue or earnings predictions for any period (provided that the underlying
causes of such failures shall not be excluded), (D) any change in the price
or
trading volume of the Ordinary Shares in and of itself (provided that the
underlying causes of such changes shall not be excluded), or (E) any Effect
that
is demonstrated to have resulted from the announcement of the Merger, or the
identity of Parent or any of its Affiliates as the acquiror of the Company,
except, in the case of clauses (A) and (B), to the extent such Effects referred
to therein would be reasonably likely to have a materially disproportionate
impact on the assets or liabilities, business, financial condition or results
of
operations of the Company and its Subsidiaries, taken as a whole, relative
to
other industry participants.
“Merger”
has
the
meaning set forth in the Recitals.
“Merger
Consideration”
has
the
meaning set forth in Section 2.2(c).
“Merger
Shares”
has
the
meaning set forth in Section 2.2(c).
“Merger
Sub”
has
the
meaning set forth in the Preamble.
“Merger
Sub Ordinary Shares”
means
the ordinary shares of Merger Sub, par value $0.001 per share.
6
“New
Financing Commitments”
has
the
meaning set forth in Section 7.9(c).
“Notes”
has
the
meaning set forth in Section 7.10.
“Notice
Period”
has
the
meaning set forth in Section 7.4(d)(ii).
“Ordinary
Shares”
means
ordinary shares, par value $0.001 per share, of the Company.
“Original
Merger Agreement”
has
the
meaning set forth in the Recitals.
“Other
Antitrust Laws”
means
any Law enacted by any Governmental Authority relating to antitrust matters
or
regulating competition.
“Parent”
has
the
meaning set forth in the Preamble.
“Parent
Expenses”
has
the
meaning set forth in Section 9.2(d).
“Parent
Plan”
has
the
meaning set forth in Section 7.8(b).
“Permits”
means
any licenses, franchises, permits, certificates, consents, approvals or other
similar authorizations of, from or by a Governmental Authority (including any
Gaming Authority) possessed by or granted to or necessary for the ownership
of
the material assets or conduct of the business of the Company or its
Subsidiaries.
“Permitted
Liens”
means
(i) Liens for Taxes, assessments and governmental charges or levies not yet
due
and payable or that are being contested in good faith and by appropriate
proceedings; (ii) mechanics’, carriers’, workmen’s, repairmen’s, materialmen’s
or other Liens or security interests that secure a liquidated amount that are
being contested in good faith and by appropriate proceedings; (iii) leases,
subleases and licenses (other than capital leases and leases underlying sale
and
leaseback transactions); (iv) Liens imposed by applicable Law; (v) pledges
or
deposits to secure obligations under workers’ compensation Laws or similar
legislation or to secure public or statutory obligations; (vi) pledges and
deposits to secure the performance of bids, trade contracts, leases, surety
and
appeal bonds, performance bonds and other obligations of a similar nature,
in
each case in the ordinary course of business; (vii) easements, covenants
and rights of way (unrecorded and of record) and other similar restrictions
of
record, and zoning, building and other similar restrictions, in each case that
do not adversely affect in any material respect the current use of the
applicable property owned, leased, used or held for use by the Company or any
of
its Subsidiaries; (viii) Liens the existence of which are specifically
disclosed in the notes to the consolidated financial statements of the Company
included in any Company SEC Report filed prior to the date of this Agreement;
and (ix) any other Liens that do not secure a liquidated amount, that have
been
incurred or suffered in the ordinary course of business and that would not,
individually or in the aggregate, have a material effect on the Company or
the
ability of Parent to obtain the Debt Financing.
“Person”
means
any individual, corporation, company, limited liability company, partnership,
association, trust, joint venture or any other entity or organization, including
any government or political subdivision or any agency or instrumentality
thereof.
7
“Preference
Shares”
has
the
meaning set forth in Section 4.5(a).
“Proceeding”
has
the
meaning set forth in Section 4.11.
“Recommendation”
has
the
meaning set forth in Section 7.1(a).
“Recommendation
Withdrawal”
has
the
meaning set forth in Section 7.4(d).
“Replacement
Policies”
has
the
meaning set forth in Section 7.5(a).
“Representatives”
has
the
meaning set forth in Section 7.4(a).
“Requisite
Shareholder Vote”
has
the
meaning set forth in Section 4.2(a).
“Restraint”
has
the
meaning set forth in Section 8.1(c).
“Schedule
13E-3”
means
a
Rule 13e-3 Transaction Statement on Schedule 13E-3 relating to the Merger and
the other transactions contemplated hereby.
“SEC”
means
the United States Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“SK”
means
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
“Special
Committee”
means
a
committee of the Company’s Board of Directors, the members of which are not
affiliated with Parent or Merger Sub and are not members of the Company’s
management, formed for the reasons set forth in the resolution establishing
such
committee.
“Subsidiary”,
with
respect to any Person, means any other Person of which the first Person owns,
directly or indirectly, securities or other ownership interests having voting
power to elect a majority of the board of directors or other persons performing
similar functions (or, if there are no such voting interests, 50% or more of
the
equity interests of the second Person).
“Subsidiary
Securities”
has
the
meaning set forth in Section 4.6(b).
“Superior
Proposal”
has
the
meaning set forth in Section 7.4(g)(iii).
“Superior
Proposal Effective Time”
has
the
meaning set forth in Section 7.12.
“Surviving
Corporation”
has
the
meaning set forth in the Recitals.
“Takeover
Statute”
has
the
meaning set forth in Section 4.17.
“Tax”
means
(i) all U.S. Federal, state, local, foreign and other taxes (including
withholding taxes), fees and other governmental charges of any kind or nature
whatsoever, together with any interest, penalties or additions imposed with
respect thereto, (ii) any liability for payment of amounts described in clause
(i) whether as a result of transferee liability or joint and several liability
for being a member of an affiliated, consolidated, combined or unitary group
for
any period, and (iii) any liability for the payment of amounts described in
clause (i) or (ii) as a result of any tax sharing, tax indemnity or tax
allocation agreement or any other express or implied agreement to pay or
indemnify any other Person.
8
“Tax
Return”
means
any return, declaration, report, statement, information statement or other
document filed or required to be filed with respect to Taxes, including any
amendments or supplements to any of the foregoing.
“Termination
Fee”
means
$95,404,000.
“Voting
Agreement”
has
the
meaning set forth in Section 5.10.
“WLG”
means
World Leisure Group Limited, a company incorporated under the laws of the
British Virgin Islands.
Section
1.2. Terms
Generally. The
definitions in Section 1.1 shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”, unless the context expressly provides otherwise.
All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits
or Schedules shall be deemed references to Sections, paragraphs, subparagraphs
or clauses of, or Exhibits or Schedules to this Agreement, unless the context
requires otherwise. Unless otherwise expressly defined, terms defined in this
Agreement have the same meanings when used in any Exhibit or Schedule hereto,
including the Company Disclosure Letter. Unless otherwise specified, the words
“herein”, “hereof”, “hereto” and “hereunder” and other words of similar import
refer to this Agreement as a whole (including the Schedules and Exhibits) and
not to any particular provision of this Agreement. The term “or” is not
exclusive. The word “extent” in the phrase “to the extent” shall mean the degree
to which a subject or other thing extends, and such phrase shall not mean simply
“if”. The phrase “date hereof” or “date of this Agreement” shall be deemed to
refer to March 20, 2006. Any Contract, instrument or Law defined or referred
to
herein or in any Contract or instrument that is referred to herein means such
Contract, instrument or Law as from time to time amended, modified or
supplemented, including (in the case of Contracts or instruments) by waiver
or
consent and (in the case of Laws) by succession of comparable successor Laws
and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and
assigns.
THE
MERGER
Section
2.1. The
Merger.
(a)
At
the
Effective Time, in accordance with the IBCA, and upon the terms and subject
to
the conditions set forth in this Agreement, Merger Sub shall be merged with
and
into the Company, at which time the separate existence of Merger Sub shall
cease
and the Company shall survive the Merger as a wholly-owned subsidiary of Parent.
9
(b)
On
the
Closing Date, the Company and Merger Sub shall file articles of merger (the
“Articles
of Merger”)
meeting the requirements of the IBCA with the Registrar of Companies of the
Bahamas. The Merger shall become effective at such time as the Articles of
Merger are registered by the Registrar of Companies of the Bahamas, or at such
later time as the Company and Merger Sub may agree and specify in the Articles
of Merger (such time as the Merger becomes effective, the “Effective
Time”).
(c)
The
Merger shall have the effects set forth in the applicable provisions of the
IBCA. Without limiting the generality of the foregoing, and subject thereto,
from and after the Effective Time, all property, rights, privileges, immunities,
powers, franchises, licenses and authority of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities, obligations,
restrictions and duties of each of the Company and Merger Sub shall become
the
debts, liabilities, obligations, restrictions and duties of the Surviving
Corporation.
(d)
The
closing of the Merger (the “Closing”)
shall
take place (i) at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP located in
New York, New York, as soon as reasonably practicable (but in any event, no
later than the second Business Day) after the day on which the last condition
to
the Merger set forth in Article VIII is satisfied or validly waived (other
than
those conditions that by their nature cannot be satisfied until the Closing
Date, but subject to the satisfaction or valid waiver of such conditions)
(provided, that if all the conditions set forth in Article VIII shall not have
been satisfied or validly waived on such day, then the Closing shall take place
on the first Business Day on which all such conditions shall have been or can
be
satisfied or shall have been validly waived) or (ii) at such other place and
time or on such other date as the Company and Parent may agree in writing (the
actual date of the Closing, the “Closing
Date”).
Section
2.2. Conversion
of Securities. At
the
Effective Time, pursuant to this Agreement and by virtue of the Merger and
without any action on the part of the Company, Parent, Merger Sub or the holders
of the Ordinary Shares:
(a)
Each
Ordinary Share held by the Company as treasury stock or otherwise owned by
Parent, Merger Sub or any wholly-owned Subsidiary of the Company immediately
prior to the Effective Time (including Ordinary Shares acquired by Parent
immediately prior to the Effective Time pursuant to the Equity Rollover
Commitments), if any, shall be canceled and retired and shall cease to exist,
and no payment or distribution shall be made or delivered with respect
thereto.
(b)
Each
Merger Sub Ordinary Share issued and outstanding immediately prior to the
Effective Time shall be converted into and become one newly issued, fully paid
and non-assessable ordinary share, par value $1.00 per share, of the Surviving
Corporation.
10
(c)
Each
Ordinary Share (including any Director Restricted Shares but excluding any
Employee Restricted Shares) issued and outstanding immediately prior to the
Effective Time (other than Ordinary Shares to be canceled pursuant to Section
2.2(a) and Dissenting Ordinary Shares), automatically shall be canceled and
converted into the right to receive $81.00 in cash, without interest (the
“Merger
Consideration”),
payable to the holder thereof upon surrender of the certificate formerly
representing such Ordinary Share (a “Certificate”)
in the
manner provided in Section 2.3. Such Ordinary Shares (including any Director
Restricted Shares but excluding any Employee Restricted Shares), other than
those canceled pursuant to Section 2.2(a) and Dissenting Ordinary Shares,
sometimes are referred to herein as the “Merger
Shares.”
(d)
Notwithstanding
any provision of this Agreement to the contrary, if required by the IBCA (but
only to the extent required thereby), Ordinary Shares that are issued and
outstanding immediately prior to the Effective Time (other than Ordinary Shares
to be canceled pursuant to Section 2.2(a)) and that are held by holders of
such
Ordinary Shares who have not voted in favor of the approval of this Agreement
or
consented thereto in writing and who have properly exercised dissenters’ rights
with respect thereto in accordance with, and who have complied with, Section
83
of the IBCA (the “Dissenting
Ordinary Shares”)
will
not be convertible into the right to receive the Merger Consideration, and
holders of such Dissenting Ordinary Shares will be entitled to receive payment
of fair value of such Dissenting Ordinary Shares in accordance with the
provisions of such Section 83 unless and until any such holder fails to perfect
or effectively withdraws or loses its rights to dissent and payment under the
IBCA. If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or loses such right, each of such holder’s Dissenting
Ordinary Shares will thereupon be treated as if they had been converted into,
at
the Effective Time, the right to receive the Merger Consideration and have
become exchangeable therefor, without any interest thereon. At the Effective
Time, any holder of Dissenting Ordinary Shares shall cease to have any rights
with respect thereto, except the rights provided in Section 83 of the IBCA
and
as provided in the previous sentence. The Company will give Parent (i) notice
of
any written objections or elections to dissent and (ii) the opportunity to
participate in and direct all negotiations and proceedings with respect to
such
notices and demands for payment. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to any demands for
payment of fair value or settle any such demands.
(e)
If
between the date of this Agreement and the Effective Time the number of
outstanding Ordinary Shares is changed into a different number of shares or
a
different class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split-up, combination, exchange of shares or the like, other
than pursuant to the Merger, the amount of Merger Consideration payable per
Ordinary Share shall be correspondingly adjusted.
(f)
Each
Director Restricted Share outstanding immediately prior to the Effective Time
shall, by virtue of this Agreement and, without further action of the Company,
Parent, Merger Sub or the holder of such Director Restricted Share, vest and
become free of such restrictions immediately prior to the Effective Time and
shall be canceled, retired and shall cease to exist and shall be converted
into
the right to receive the Merger Consideration in accordance with Section
2.2(c).
(g)
For
the
avoidance of doubt, the parties acknowledge and agree that the contribution
of
Ordinary Shares (including Director Restricted Shares, if any) to Parent
pursuant to the Equity Rollover Commitments shall be deemed to occur immediately
prior to the Effective Time and prior to any other above-described
event.
11
(h)
The
Company Equity Awards (other than the Director Restricted Shares) outstanding
immediately prior to the Effective Time shall be treated as provided in
Section 2.4.
Section
2.3. Payment
of Cash for Merger Shares.
(a)
Prior
to
the Closing Date, Parent shall designate a bank or trust company that is
reasonably satisfactory to the Company to serve as the disbursing agent for
the
Merger Consideration and payments in respect of the Director Options, Director
SARs and Company RSUs, unless another agent is designated as provided in Section
2.4(a) (the “Disbursing
Agent”).
Promptly after the Effective Time, Parent will cause to be deposited with the
Disbursing Agent cash in the aggregate amount sufficient to pay the Merger
Consideration in respect of all Merger Shares outstanding immediately prior
to
the Effective Time plus any cash necessary to pay for Director Options, Director
SARs and Company RSUs outstanding immediately prior to the Effective Time
pursuant to Section 2.4. Pending distribution of the cash deposited with
the Disbursing Agent, such cash shall be held in trust for the benefit of the
holders of Merger Shares, Director Options, Director SARs and Company RSUs
outstanding immediately prior to the Effective Time and shall not be used for
any other purposes; provided,
however,
that
Parent may direct the Disbursing Agent to invest such cash in (i) obligations
of
or guaranteed by the United States of America or any agency or instrumentality
thereof, (ii) money market accounts, certificates of deposit, bank repurchase
agreement or banker’s acceptances of, or demand deposits with, commercial banks
having a combined capital and surplus of at least $500,000,000, or (iii)
commercial paper obligations rated P-1 or A-1 or better by Standard & Poor’s
Corporation or ▇▇▇▇▇’▇ Investor Services, Inc. Any profit or loss resulting
from, or interest and other income produced by, such investments shall be for
the account of Parent.
(b)
As
promptly as practicable after the Effective Time, the Surviving Corporation
shall send, or cause the Disbursing Agent to send, to each record holder of
Merger Shares as of immediately prior to the Effective Time a letter of
transmittal and instructions for exchanging their Merger Shares for the Merger
Consideration payable therefor. The letter of transmittal will be in customary
form and will specify that delivery of Certificates will be effected, and risk
of loss and title will pass, only upon delivery of the Certificates to the
Disbursing Agent. Upon surrender of such Certificate or Certificates to the
Disbursing Agent together with a properly completed and duly executed letter
of
transmittal and any other documentation that the Disbursing Agent may reasonably
require, the record holder thereof shall be entitled to receive the Merger
Consideration payable in exchange therefor, without interest. Until so
surrendered and exchanged, each such Certificate shall, after the Effective
Time, be deemed to represent only the right to receive the Merger Consideration,
and until such surrender and exchange, no cash shall be paid to the holder
of
such outstanding Certificate in respect thereof.
(c)
If
payment is to be made to a Person other than the registered holder of the Merger
Shares formerly represented by the Certificate or Certificates surrendered
in
exchange therefor, it shall be a condition to such payment that the Certificate
or Certificates so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such payment shall
pay
to the Disbursing Agent any applicable stock transfer taxes required as a result
of such payment to a Person other than the registered holder of such Merger
Shares or establish to the satisfaction of the Disbursing Agent that such stock
transfer taxes have been paid or are not payable.
12
(d)
After
the
Effective Time, there shall be no further transfers on the stock transfer books
of the Company of the Ordinary Shares that were outstanding immediately prior
to
the Effective Time. If, after the Effective Time, Certificates are presented
to
the Surviving Corporation, Parent or the Disbursing Agent, such shares shall
be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article II.
(e)
If
any
cash deposited with the Disbursing Agent remains unclaimed twelve months after
the Effective Time, such cash shall be returned to Parent or the Surviving
Corporation upon demand, and any holder who has not surrendered such holder’s
Certificates for the Merger Consideration payable in respect thereof prior
to
that time shall thereafter look only to the Surviving Corporation for payment
of
the Merger Consideration. Notwithstanding the foregoing, none of Parent, Merger
Sub, the Company, the Surviving Corporation or the Disbursing Agent shall be
liable to any holder of Certificates for an amount paid to a public official
pursuant to any applicable unclaimed property laws. Any amounts remaining
unclaimed by holders of Certificates as of a date immediately prior to such
time
that such amounts would otherwise escheat to or become property of any
Governmental Authority shall, to the extent permitted by applicable Law, become
the property of the Surviving Corporation on such date, free and clear of any
claims or interest of any Person previously entitled thereto.
(f)
No
dividends or other distributions with respect to capital stock of the Surviving
Corporation with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate, including Dissenting Ordinary
Shares.
(g)
Except
as
provided in Section 2.2(a), from and after the Effective Time, the holders
of Ordinary Shares (other than Dissenting Ordinary Shares) outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Ordinary Shares, other than the right to receive the Merger
Consideration as provided in this Agreement.
(h)
In
the
event that any Certificate has been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such Certificate to be
lost,
stolen or destroyed, in addition to the posting by such holder of any bond
in
such reasonable amount as the Surviving Corporation or the Disbursing Agent
may
direct as indemnity against any claim that may be made against the Surviving
Corporation or the Disbursing Agent with respect to such Certificate, the
Disbursing Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration in respect thereof entitled to be received
pursuant to this Agreement.
(i)
Parent,
Surviving Corporation and the Disbursing Agent shall be entitled to deduct
and
withhold from the Merger Consideration otherwise payable hereunder any amounts
required to be deducted and withheld under any applicable Tax Law. To the extent
any amounts are so withheld, such withheld amounts shall be treated for all
purposes as having been paid to the holder from whose Merger Consideration
the
amounts were so deducted and withheld.
13
Section
2.4. Treatment
of Company Equity Awards (Other than Director Restricted
Shares)
(a)
Treatment
of Director Options, Director SARs and Company RSUs.
(i)
Prior
to
the Effective Time, the Company and Parent will adopt such resolutions and
take
such other commercially reasonable actions as are reasonably necessary in order
to effectuate the actions contemplated by Section 2.2(f) and this
Section 2.4(a), without paying any additional consideration or incurring
any additional debts or obligations on behalf of the Company or the Surviving
Corporation, provided
that
such resolutions and actions shall expressly be conditioned upon the
consummation of the Merger and the other transactions contemplated hereby and
shall be of no effect if this Agreement is terminated.
(ii)
As
of the
Effective Time, each Director Option and each Director SAR that is outstanding
immediately prior to the Effective Time will be canceled and extinguished,
and
the holder thereof will be entitled to receive an amount in cash equal to the
product of (A) the number of Ordinary Shares subject to such Director
Option or Director SAR and (B) the excess, if any, of the Merger
Consideration over the exercise price per share of such Director Option or
Director SAR, without interest. All
payments with respect to canceled Director Options and canceled Director SARs
shall be made by the Disbursing Agent (or such other agent reasonably acceptable
to the Company as Parent shall designate prior to the Effective Time) as
promptly as reasonably practicable after such payment becomes payable pursuant
to this Section 2.4(a) from funds deposited by or at the direction of Parent
for
the purpose of paying such amounts in accordance with
Section 2.3(a).
(iii)
As
of the
Effective Time, each Company RSU that is outstanding immediately prior to the
Effective Time will be canceled and extinguished, and the holder thereof will
be
entitled to receive an amount in cash equal to the Merger Consideration, without
interest. All payments with respect to canceled Company RSUs shall be made
by
the Disbursing Agent (or such other agent reasonably acceptable to the Company
as Parent shall designate prior to the Effective Time) as promptly as reasonably
practicable after the Effective Time from funds deposited by Parent for the
purpose of paying such amounts in accordance with Section 2.3(a).
(iv)
Parent,
the Surviving Corporation and the Disbursing Agent (or such other agent
reasonably acceptable to the Company as Parent shall designate prior to the
Effective Time) shall be entitled to deduct and withhold from any amounts to
be
paid under this Section 2.4(a) in respect of Director Options, Director SARs
and
Company RSUs amounts required to be deducted and withheld under any applicable
Tax Law. To the extent any amounts are so withheld, such withheld amounts shall
be treated for all purposes as having been paid to the holder of Director
Options, Director SARs or Company RSUs from whose payments in respect of
Director Options, Director SARs or Company RSUs the amounts were so deducted
and
withheld.
(b)
Treatment
of Employee Equity Awards.
14
(i)
Immediately
prior to the Effective Time, the Company and Parent will adopt such resolutions
and take such other commercially reasonable actions, in a manner consistent
with
applicable Law, as are reasonably necessary in order to effectuate the actions
contemplated by this Section 2.4(b), without paying any additional
consideration or incurring any additional debts or obligations on behalf of
the
Company or the Surviving Corporation, provided that such resolutions and actions
shall expressly be conditioned upon the consummation of the Merger and the
other
transactions contemplated hereby and shall be of no effect if this Agreement
is
terminated. Notwithstanding anything in this Section 2.4(b) or any other
provision of this Agreement to the contrary, none of the Company, any of its
Subsidiaries or the Board of Directors of the Company shall be required to
take
any action pursuant to this Section 2.4(b) that would (A) require the Company,
any of its Subsidiaries or the Board of Directors of the Company to obtain
the
consent of the holder of an Employee Option, Employee SAR or Employee Restricted
Share or (B) require the Company to file a registration statement pursuant
to
the Securities Act or any Federal, state or foreign securities Law prior to
the
Effective Time.
(ii)
As
of the
Effective Time, each Employee Option and each Employee SAR that is outstanding
immediately prior to the Effective Time will be canceled and extinguished,
and
the holder thereof will be entitled to receive an amount in cash equal to the
product of (A) the number of Ordinary Shares subject to such Employee
Option or Employee SAR and (B) the excess, if any, of the Merger
Consideration over the exercise price per share of such Employee Option or
Employee SAR, without interest (the “Equity
Award Consideration”);
provided,
however,
that,
except to the extent otherwise agreed between Parent and the holder of any
Employee Option or Employee SAR, no holder of any Employee Option or Employee
SAR shall have any right to receive payment of the Equity Award Consideration,
and Parent shall have no obligation to pay the Equity Award Consideration,
in
respect of such Employee Option or Employee SAR until the earlier of (1) such
time as such Employee Option or Employee SAR would have otherwise vested and
become exercisable in accordance with the terms of the applicable Company Stock
Plan or any applicable agreement, notice or letter evidencing the grant of
such
Employee Option or Employee SAR and (2) the later of (x) the six-month
anniversary of the Closing and (y) January 1, 2007; provided further
that the
right to receive the Equity Award Consideration in respect of any Employee
Option or Employee SAR shall be forfeited if the holder of such Employee Option
or Employee SAR ceases to be employed by the Company or any of its Subsidiaries
(other than as a result of such holder’s death, disability or Qualifying
Termination (as defined in the applicable Company Stock Plan)) prior to such
time as the Equity Award Consideration would have been otherwise payable
pursuant to clause (1) or (2) of this Section 2.4(b)(ii).
(iii)
Each
Employee Restricted Share outstanding immediately prior to the Effective Time
shall be canceled, retired and shall cease to exist at the Effective Time and
shall be converted into the right to receive the Merger Consideration in
accordance with this Section 2.4(b)(iii). Except to the extent otherwise agreed
between Parent and the holder of any Employee Restricted Shares, no holder
of
any Employee Restricted Shares shall have any right to receive payment of the
Merger Consideration, and Parent shall have no obligation to pay the Merger
Consideration, in respect of such Employee Restricted Shares until the earlier
15
of
(1)
such time as such Employee Restricted Shares would have otherwise vested and
become free of any other restrictions in accordance with the terms of the
applicable Company Stock Plan or any applicable agreement, notice or letter
evidencing the grant of such Employee Restricted Shares and (2) the later of
(x)
the six-month anniversary of the Closing and (y) January 1, 2007; provided,
however,
that
the right to receive the Merger Consideration in respect of any Employee
Restricted Shares shall be forfeited and such Employee Restricted Shares shall
not vest if the holder of such Employee Restricted Shares ceases to be employed
by the Company or any of its Subsidiaries (other than as a result of such
holder’s death, disability or Qualifying Termination (as defined in the
applicable Company Stock Plan)) prior to such time as the Merger Consideration
with respect to such holder’s Employee Restricted Shares would have been
otherwise payable pursuant to clause (1) or (2) or this Section
2.4(b)(iii).
(iv)
Parent
shall cause the Surviving Corporation to pay all amounts payable pursuant to
Sections 2.4(b)(ii) and (iii) at the earlier of the times set forth in
clauses (1) and (2) of Section 2.4(b)(ii) or (iii), as the case may be. The
Surviving Corporation shall be entitled to deduct and withhold from any amounts
to be paid under this Section 2.4(b) in respect of Employee Options, Employee
SARs and Employee Restricted Shares amounts required to be deducted and withheld
under any applicable Tax Law. To the extent any amounts are so withheld, such
withheld amounts shall be treated for all purposes as having been paid to the
holder of Employee Options, Employee SARs or Employee Restricted Shares from
whose payments in respect of Employee Options, Employee SARs or Employee
Restricted Shares the amounts were so deducted and withheld.
THE
SURVIVING CORPORATION
Section
3.1. Memorandum
of Association. The
memorandum of association of the Company, as amended to read in its entirety
as
the memorandum of association of Merger Sub as in effect immediately prior
to
the Effective Time, shall be the memorandum of association of the Surviving
Corporation until thereafter amended in accordance with the terms thereof and
as
provided by applicable Law.
Section
3.2. Articles
of Association.
The articles of association of the Company, as amended to read in its
entirety as the articles of association of Merger Sub as in effect immediately
prior to the Effective Time shall be the articles of association of the
Surviving Corporation until thereafter amended in accordance with the terms
thereof and as provided by applicable Law.
Section
3.3. Directors
and Officers.
From and after the Effective Time, (i) the directors of Merger Sub at the
Effective Time shall be the directors of the Surviving Corporation and (ii)
the
officers of the Company at the Effective Time (other than those who Parent
determines shall not remain as officers of the Surviving Corporation) shall
be
the officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified in accordance with
applicable Law.
16
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
(x) as set forth in the corresponding sections or subsections of the disclosure
letter delivered to Parent and Merger Sub by the Company on March 20, 2006
(the
“Company
Disclosure Letter”)
(it
being understood that any information set forth in a particular section or
subsection of the Company Disclosure Letter shall be deemed to be disclosed
in
each other section or subsection thereof to which the relevance of such
information is reasonably apparent) or (y) as may be disclosed in the Company
SEC Reports filed prior to the date of this Agreement, the Company hereby
represents and warrants to Parent and Merger Sub that:
Section
4.1. Corporate
Existence and Power.
Each of the Company and its Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction (with respect
to jurisdictions that recognize the concept of good standing). Each of the
Company, its Subsidiaries and, to the knowledge of the Company, the Company
Joint Ventures has all corporate or similar powers and authority required to
own, lease and operate its respective properties and to carry on its business
as
now conducted. Each of the Company and its Subsidiaries is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such qualification necessary, except where
the failure to be so licensed or qualified has not had, and would not be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on the Company. Neither the Company nor any Subsidiary nor, to the
Company’s knowledge, any Company Joint Venture, is in violation of its
organizational or governing documents in any material respect.
Section
4.2. Corporate
Authorization.
(a)
The
Company has full corporate power and authority to execute and deliver this
Agreement and to consummate the Merger and the other transactions contemplated
hereby and to perform each of its obligations hereunder. The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the Merger and the other transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the Company. Except
for
the approval of this Agreement by a simple
majority of the Ordinary Shares present, in person or by proxy, at a meeting
of
Company shareholders called for such purpose (the “Requisite
Shareholder Vote”),
no
other corporate proceedings on the part of the Company are necessary to approve
this Agreement or to consummate the Merger or the other transactions
contemplated hereby. The
Board
of Directors of the Company, acting upon the unanimous recommendation of the
Special Committee, at a duly held meeting has (i) determined that the Merger
and
this Agreement are fair to and in the best interests of the Company and its
shareholders, (ii) approved the Merger, the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby,
and (iii) resolved to recommend that the Company shareholders approve this
Agreement and directed that such matter be submitted for consideration of the
shareholders of the Company at the Company Shareholder Meeting.
(b)
This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due and valid execution and delivery of this Agreement by Parent
and Merger Sub, constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar Laws affecting the enforcement of creditors’ rights
generally and general equitable principles.
17
Section
4.3. Governmental
Authorization.
The execution, delivery and performance by the Company of this Agreement
and the consummation of the Merger by the Company do
not
require any consent, approval, authorization or permit of, action by, filing
with or notification to any Governmental Authority, other than
(i) the
filing of the Articles of Merger; (ii) compliance with the applicable
requirements of the applicable Other Antitrust Laws of jurisdictions other
than
the United States; (iii)
filings with, and approvals by, Gaming Authorities specified in Section 4.3(iii)
of the Company Disclosure Letter; (iv)
compliance with the applicable requirements of the Exchange Act including the
filing of the Schedule 13E-3; (v) compliance with the rules and regulations
of the New York Stock Exchange; (vi) compliance with any applicable foreign
or
state securities or Blue Sky laws; and (vii) any
such
consent, approval, authorization, permit, action, filing or notification the
failure of which to make or obtain would not (A) be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Company
or
(B) prevent or materially delay the consummation of the Merger or the Company’s
ability to observe and perform its material obligations hereunder.
Section
4.4. Non-Contravention.
The execution, delivery and performance by the Company of this Agreement
and the consummation by the Company of the Merger and the other transactions
contemplated hereby do not and will not (i) contravene or conflict with the
organizational or governing documents of the Company or any of its Subsidiaries
or Company Joint Ventures; (ii) assuming compliance with the matters
referenced in Section 4.3 and the receipt of the Requisite Shareholder Vote,
contravene or conflict with or constitute a violation of any provision of any
Law binding upon or applicable to the Company or any of its Subsidiaries or
Company Joint Ventures or any of their respective properties or assets;
(iii)
require
the consent, approval or authorization of, or notice to or filing with any
third
party with respect to, result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both would become
a
default) or result in the loss of benefit under, or give rise to any right
of
termination, cancellation, amendment or acceleration of any right or obligation
of the Company or any of its Subsidiaries, or result in the creation of any
Lien
on any of the properties or assets of the Company or its Subsidiaries under
any
loan or credit agreement, note, bond, mortgage, indenture, contract, agreement,
lease, license, permit or other instrument or obligation (each, a “Contract”)
to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or its or any of their respective properties or
assets are bound,
except
in the case of clauses (ii) and (iii) above, which would not (A) be reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on
the Company or (B) prevent
or materially delay the consummation of the Merger or the Company’s ability to
observe and perform its material obligations hereunder.
Section
4.5. Capitalization.
(a)
The
authorized share capital of the Company is $350,000 divided into 250,000,000
Ordinary Shares and 100,000,000 Preference Shares, par value $0.001 per share
(the “Preference
Shares”).
As of
February 28, 2006, there were (i) 36,718,698 Ordinary Shares
18
issued
and outstanding (including 1,041,446 outstanding Company Restricted Shares)
and
no Preference Shares issued and outstanding and (ii) outstanding Company Options
to purchase an aggregate of 2,533,382 Ordinary Shares, with a weighted average
exercise price of $35.20 per share.
All
outstanding Ordinary Shares are duly authorized, validly issued, fully paid
and
non-assessable, and are not subject to and were not issued in violation of
any
preemptive or similar right, purchase option, call or right of first refusal
or
similar right.
(b)
Except
as
set forth in Section 4.5(a) and except for 922,853 Ordinary Shares reserved
for
issuance upon conversion of the Company’s 2.375% Convertible Senior Subordinated
Notes due 2024 (the “Convertible
Notes”)
and
4,604,856 Ordinary Shares reserved for issuance pursuant to the Company Stock
Plans, as of February 28, 2006, there have not been reserved for issuance,
and
there are no outstanding (i) shares of capital stock or other voting securities
of the Company; (ii) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of the Company; (iii) Company Options or other rights or options
to
acquire from the Company, or obligations of the Company to issue, any shares
of
capital stock, voting securities or securities convertible into or exchangeable
for shares of capital stock or voting securities of the Company; or (iv) equity
equivalent interests in the ownership or earnings of the Company or other
similar rights in respect of the Company (the items in clauses (i) through
(iv)
collectively, “Company
Securities”).
There
are no outstanding obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any Company Securities. There are no preemptive
rights of any kind which obligate the Company or any of its Subsidiaries to
issue or deliver any Company Securities. There are no shareholder agreements,
voting trusts or other agreements or understandings to which the Company or
any
of its Subsidiaries is a party or by which it is bound relating to the voting
or
registration of any shares of capital stock of the Company or preemptive rights
with respect thereto.
(c)
Other
than the issuance of Ordinary Shares upon exercise of Company Options or Company
SARs or upon conversion of the Convertible Notes, from February 28, 2006 to
the
date of this Agreement, the Company has not declared or paid any dividend or
distribution in respect of any Company Securities, and neither the Company
nor
any Subsidiary of the Company has issued, sold or repurchased any Company
Securities, and their respective Boards of Directors have not authorized any
of
the foregoing.
(d)
No
bonds,
debentures, notes or other indebtedness having the right to vote on any matters
on which Company shareholders may vote are outstanding.
Section
4.6. Company
Subsidiaries and Joint Ventures.
(a)
Section
4.6 of the Company Disclosure Letter sets forth all Company Joint Ventures.
All
equity interests of any Subsidiary of the Company held by the Company or any
other Subsidiary of the Company are validly issued, fully paid and
non-assessable (to the extent such concepts are applicable) and were not issued
in violation of any preemptive or similar rights, purchase option, call, or
right of first refusal or similar rights. All such equity interests in
Subsidiaries held by the Company or any Subsidiary of the Company are free
and
clear of any Liens or any other limitations or restrictions on such equity
interests (including any limitation or restriction on the right to vote, pledge
or sell or otherwise dispose of such equity interests) other than Permitted
Liens. All equity interests of the Company Joint Ventures held by the Company
or
any Subsidiary of the Company are free and clear of any Liens other than
Permitted Liens.
19
(b)
There
have not been reserved for issuance, and there are no outstanding (i) securities
of the Company or any of its Subsidiaries convertible into or exchangeable
for
shares of capital stock or voting securities of any Subsidiary of the Company;
(ii) rights or options to acquire from the Company or its Subsidiaries, or
obligations of the Company or its Subsidiaries to issue, any shares of capital
stock, voting securities or securities convertible into or exchangeable for
shares of capital stock or voting securities of any Subsidiary of the Company;
or (iii) equity equivalent interests in the ownership or earnings of any
Subsidiary of the Company or other similar rights in respect of any Subsidiary
of the Company (the items in clauses (i) through (iii) collectively,
“Subsidiary
Securities”).
There
are no outstanding obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any Subsidiary Securities. There are no preemptive
rights of any kind which obligate the Company or any of its Subsidiaries to
issue or deliver any Subsidiary Securities. There are no shareholder agreements,
voting trusts or other agreements or understandings to which the Company or
any
of its Subsidiaries is a party or by which it is bound relating to the voting
or
registration of any shares of capital stock of any Subsidiary of the Company
or
preemptive rights with respect thereto.
Section
4.7. Reports
and Financial Statements.
(a)
The
Company has filed all forms, reports, statements, certifications and other
documents (including all exhibits, amendments and supplements thereto) required
to be filed by it with the SEC since January 1, 2003 (all such forms, reports,
statements, certificates and other documents filed with or furnished to the
SEC
since January 1, 2003, with any amendments thereto, collectively, the
“Company
SEC Reports”),
each
of which, including any financial statements or schedules included therein,
as
finally amended prior to the date hereof, has complied as to form in all
material respects with the applicable requirements of the Securities Act and
Exchange Act as of the date filed with the SEC. None of the Company’s
Subsidiaries is required to file periodic reports with the SEC. None of the
Company SEC Reports contained, when filed with the SEC and, if amended, as
of
the date of such amendment, any untrue statement of a material fact or omitted
to state a material fact required to be stated or incorporated by reference
therein or necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading. As of the date
of
this Agreement, there are no outstanding or unresolved comments in comment
letters received from the SEC staff with respect to the Company SEC Reports.
To
the knowledge of the Company, none of the Company SEC Reports is the subject
of
ongoing SEC review, outstanding SEC comment or outstanding SEC
investigation.
(b)
Each
of
the consolidated financial statements of the Company and its Subsidiaries
included (or incorporated by reference) in the Company SEC Reports (including
the related notes and schedules, where applicable) fairly present (subject,
in
the case of the unaudited statements, to normal year-end auditing adjustments,
none of which are expected to be material in nature or amount) the results
of
the consolidated operations and changes in shareholders’ equity and consolidated
financial position of the Company and its Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth. Each of such
consolidated financial statements (including the related notes and schedules,
where applicable) complied, as of the date of filing, in all material respects
with applicable accounting
20
requirements
and with the published rules and regulations of the SEC applicable thereto
and
each of such financial statements (including the related notes and schedules,
where applicable) were prepared in accordance with GAAP (except, in the case
of
unaudited statements, as permitted by the rules and regulations of the SEC)
consistently applied during the periods involved, except in each case as
indicated in such statements or in the notes thereto.
Section
4.8. Undisclosed
Liabilities.
Except (i) for those liabilities that are fully reflected or reserved
against on the consolidated balance sheet of the Company included in the
Company’s Annual Report on Form 20-F for the year ended December 31, 2004, (ii)
for liabilities incurred in the ordinary course of business consistent with
past
practice since December 31, 2004, which are not material taken as a whole,
or
(iii) for liabilities that have been discharged or paid in full prior to the
date hereof in the ordinary course of business consistent with past practice,
neither the Company nor any of its Subsidiaries has incurred any material
liability of any nature whatsoever (whether absolute, accrued or contingent
or
otherwise and whether due or to become due), and to knowledge of the Company
there is no existing condition, event or circumstances that could reasonably
be
expected to result in any such material liability in the future, except in
any
such case as contemplated by this Agreement.
Section
4.9. Disclosure
Documents.
The Schedule 13E-3 and the Company Proxy Statement will not, at the date
it is filed with the SEC (in the case of the Schedule 13E-3), at the date it
is
first mailed to shareholders of the Company (in the case of the Company Proxy
Statement) or at the time of the Company Shareholder Meeting (other than as
to
information supplied by Parent, Merger Sub or any of their Affiliates, for
inclusion therein), contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
are
made, not misleading. The Company will cause the Company Proxy Statement, the
Schedule 13E-3 and all related SEC filings to comply as to form in all material
respects with the requirements of the Exchange Act applicable thereto and any
other applicable Law as of the date of such filing. No representation is made
by
the Company with respect to statements made in the Company Proxy Statement
or
the Schedule 13E-3 based on information supplied by Parent, Merger Sub or their
Affiliates specifically for inclusion therein.
Section
4.10. Absence
of Certain Changes or Events.
Since December 31, 2004, no change, circumstance, event or effect has
occurred which has had or would be reasonably likely to have, individually
or in
the aggregate, a Material Adverse Effect on the Company.
Section
4.11. Litigation.
Except as publicly disclosed in the Company SEC Reports filed with or
furnished to the SEC prior to the date hereof, neither the Company nor any
of
its Subsidiaries is a party to any, and there are no pending or, to the
Company’s knowledge, threatened, legal, administrative, arbitral or other
material proceedings, claims, actions or governmental or regulatory
investigations (a “Proceeding”)
of any
nature against the Company or any of its Subsidiaries or challenging the
validity or propriety of the transactions contemplated by this Agreement, except
for any Proceeding which (i) has not had or would not be reasonably likely
to
have, individually or in the aggregate, a Material Adverse Effect on the Company
or (ii) would prevent
or materially delay the consummation of the Merger or the Company’s ability to
observe and perform its obligations hereunder.
Neither
the Company nor any of its Subsidiaries or any of
21
their
businesses or properties are subject to or bound by any injunction, order,
judgment, decree or regulatory restriction of any Governmental Authority
specifically imposed upon the Company, any of its Subsidiaries or their
respective properties or assets, except for any injunction, order, judgment,
decree or regulatory restriction which (i) has not had or would not be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on the Company or (ii) would prevent
or materially delay the consummation of the Merger or the Company’s ability to
observe and perform its obligations hereunder.
Section
4.12. Taxes.
Except as have not had or would not be reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on the Company:
(a)
all
Tax
Returns required to be filed by the Company or any of its Subsidiaries have
been
properly prepared and timely filed, and all such Tax Returns (including
information provided therewith or with respect thereto) are true, correct and
complete;
(b)
the
Company and its Subsidiaries have fully and timely paid all Taxes (whether
or
not shown to be due on the Tax Returns referred to in Section 4.12(a))
other than Taxes that are not yet due and payable or that are being contested
in
good faith;
(c)
no
audit
or other proceeding by any taxing authority is pending or, to the knowledge
of
the Company, threatened in writing against the Company or any of its
Subsidiaries;
(d)
there
are
no Tax sharing agreements (or similar agreements) to which the Company or any
of
its Subsidiaries is a party to or by which the Company or any of its
Subsidiaries is bound (other than agreements exclusively between or among the
Company and its Subsidiaries).
Section
4.13. ERISA.
(a)
Each
Employee Benefit Plan (other than any multiemployer plan within the meaning
of
ERISA Section 3(37)) and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, bonus, incentive, deferred
compensation and other material employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA, whether formal
or informal, oral or written, legally binding or not, under which any Company
Employee has any present or future right to benefits, maintained or contributed
to by the Company or any of its Subsidiaries or under which the Company or
any
of its Subsidiaries has any present or future liability (the “Company
Benefit Plans”)
has
been operated, funded and administered in compliance with its terms, the terms
of any applicable collective bargaining agreement and with all applicable
requirements of Law, including ERISA and the Code, except as would not subject
the Company or any of its Subsidiaries to any liability that has had or would
be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on the Company. Except
as
has not had and would not be reasonably likely to have, individually or in
the
aggregate, a Material Adverse Effect
on the
Company,
none of
the Company, any of its Subsidiaries, any officer of the Company or any of
its
Subsidiaries or any Company Benefit Plan that is subject to ERISA, or, to the
knowledge of the Company, any trust created
22
thereunder
or any trustee or administrator thereof, has engaged in
a
nonexempt “prohibited transaction” (as such term is defined in Section 406
of ERISA and Section 4975 of the Code). Except
as
has not had and would not be reasonably likely to have, individually or in
the
aggregate, a Material Adverse Effect on the Company,
no
“accumulated funding deficiency” (as such term is defined in Section 302 of
ERISA and Section 412 of the Code (whether or not waived)) has occurred
with respect to any Company Benefit Plan.
(b)
Except
in
the ordinary course of business or as required by applicable Law, since December
31, 2005, there has been no amendment to any Company Benefit Plan that would
increase materially the expense to the Company or any of its Subsidiaries of
maintaining such plan above the level of the expense incurred by the Company
or
its Subsidiaries therefor for the most recent fiscal year. Except as
contemplated by this Agreement, the execution of this Agreement and the
consummation of the transactions contemplated hereby will not (either alone
or
together with any other related event) (i) result in any material payment by
the
Company or any of its Subsidiaries to any Company Employee of any money or
other
property under any Company Benefit Plan or Company Stock Plan or (ii) result
in
the accelerated vesting or funding through a trust or otherwise of a material
amount of compensation or benefits under any Company Benefit Plan or Company
Stock Plan, in each case, whether or not such payment would constitute a
“parachute payment” within the meaning of Section 280G of the Code.
Section
4.14. Compliance
With Laws.
(a)
The
Company and each of its Subsidiaries is, and at all times has been, in
compliance with all Laws (including Gaming Laws) applicable to the Company,
its
Subsidiaries and their respective businesses and activities, except for such
noncompliance that has not had, and would not be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the
Company.
(b)
The
Company and each Subsidiary of the Company has and maintains in full force
and
effect, and is in compliance with, all Permits and all orders from Governmental
Authorities necessary for the Company and each Subsidiary to carry on their
respective businesses as currently conducted and currently proposed to be
conducted, except as has not had, and would not be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the
Company.
Section
4.15. Finders’
Fees.
No agent, broker, investment banker, financial advisor or other firm or person
except ▇.▇. ▇▇▇▇▇▇ Securities Inc. is or will be entitled to any broker’s or
finder’s fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement. The Company has disclosed
to
Parent all material terms of the engagement of ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
including the amount of such fees and any right of first offer or other “tail”
provisions.
Section
4.16. Opinion
of Financial Advisor.
▇.▇. ▇▇▇▇▇▇ Securities Inc. has delivered to the Special Committee, an opinion
to the effect that, as of the Execution Date, the consideration to be received
by holders of Ordinary Shares (other than SK, HBK and Istithmar and their
Affiliates and any other holder who will contribute Ordinary Shares to Parent)
in the Merger is fair, from a financial point of view, to such
holders.
23
Section
4.17. Anti-Takeover
Provisions.
The Board of Directors of the Company has taken all necessary action so that
any
takeover, anti-takeover, moratorium, “fair price”, “control share” or other
similar Law enacted under any Law applicable to the Company (each, a
“Takeover
Statute”)
do
not, and will not, apply to this Agreement, the Merger or the other transactions
contemplated hereby. The Company does not have any shareholder rights plan
in
effect.
Section
4.18. Absence
of Company Acquisition Proposals.
During the period from March 20, 2006 through, and including, the Execution
Date, the Company has not received any inquiries, proposals or offers which
constitute, or could reasonably be expected to result in, a Company Acquisition
Proposal with respect to which the requirements of Section 7.4(b) could be
satisfied from and after the Execution Date.
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Parent
and Merger Sub hereby jointly and severally represent and warrant to the Company
that:
Section
5.1. Corporate
Existence and Power.
Each of Parent and Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of The Bahamas and
has
all corporate power and authority required to execute and deliver this Agreement
and to consummate the Merger and the other transactions contemplated hereby
and
to perform each of its obligations hereunder.
Section
5.2. Corporate
Authorization.
The execution, delivery and performance by Parent and Merger Sub of this
Agreement and the consummation by Parent and Merger Sub of the Merger and the
other transactions contemplated hereby have been duly and validly authorized
by
the Board of Directors of Parent and Merger Sub. Except for the approval of
this
Agreement by Parent, as the sole shareholder of Merger Sub (which shall have
occurred prior to the Effective Time), no other corporate proceedings other
than
those previously taken or conducted on the part of Parent or Merger Sub are
necessary to approve this Agreement or to consummate the other transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub and, assuming the due and valid execution
and
delivery of the Agreement by the Company, constitutes a legal, valid and binding
agreement of Parent and Merger Sub, respectively, enforceable against Parent
and
Merger Sub in accordance with its terms, except as such enforceability may
be
limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws
affecting the enforcement of creditors’ rights generally and general equitable
principles.
Section
5.3. Governmental
Authorization.
The execution, delivery and performance by Parent and Merger Sub of this
Agreement and the consummation by Parent and Merger Sub of the Merger and other
transactions contemplated by this Agreement do not require any consent,
approval, authorization or permit of, action by, filing with or notification
to
any Governmental Authority, other than
24
(i)
the
filing of the Articles of Merger; (ii) compliance with the applicable
requirements of the applicable Other Antitrust Laws of jurisdictions other
than
the United States; (iii) filings
with, and approvals by, Gaming Authorities specified in Section 4.3(iii) of
the
Company Disclosure Letter, (iv) compliance
with the applicable requirements of the Exchange Act including the filing of
the
Schedule 13E-3; (v) compliance with any applicable foreign or state
securities or Blue Sky laws; and (vi) any such consent, approval,
authorization, permit, action, filing or notification the failure of which
to
make or obtain would not be reasonably likely to adversely effect in any
material respect, or prevent
or materially delay, the consummation of the Merger or Parent’s or Merger Sub’s
ability to observe and perform its material obligations hereunder.
Section
5.4. Non-Contravention.
The execution, delivery and performance by Parent and Merger Sub of this
Agreement and the consummation by Parent and Merger Sub of the Merger and the
other transactions contemplated hereby do not and will not (i) contravene or
conflict with the organizational or governing documents of Parent or Merger
Sub,
(ii) assuming compliance with the items specified in Section 5.3, contravene,
conflict with or constitute a violation of any provision of any Law binding
upon
or applicable to Parent or Merger Sub or any of their respective properties
or
assets, or (iii) require
the consent, approval or authorization of, or notice to or filing with any
third
party with respect to, result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both would become
a
default), or give rise to any right of termination, cancellation, amendment
or
acceleration of any right or obligation of Parent or Merger Sub or to a loss
of
any material benefit to which Parent or Merger Sub is entitled under any
Contract.
Section
5.5. Disclosure
Documents.
None of the information supplied or to be supplied by Parent or Merger Sub
or
any of their Affiliates specifically for inclusion in the Company Proxy
Statement or Schedule 13E-3 will, at the date it is filed with the SEC (in
the
case of the Schedule 13E-3), at the date it is first mailed to shareholders
of
the Company (in the case of the Company Proxy Statement), or at the time of
the
Company Shareholder Meeting, contain any untrue statement of a material fact
or
omit to state any material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.
Section
5.6. Finders’
Fees.
No agent, broker, investment banker, financial advisor or other firm or person
except Deutsche Bank AG and Groton Partners LLC is or will be entitled to any
broker’s or finder’s fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement.
Section
5.7. Financing.
Parent
has delivered to the Company true and complete copies of (i) the commitment
letter with respect to the senior secured credit facilities, dated as of the
Execution Date, among Parent, Deutsche Bank AG New York Branch, Deutsche Bank
Securities Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. and the commitment letter
with respect to the senior subordinated bridge facility, dated as of the
Execution Date, among Parent, Deutsche
Bank AG Cayman Islands Branch and ▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
(collectively,
the “Debt
Financing Commitments”),
pursuant to which the lenders party thereto committed, subject to the terms
thereof, to lend the amounts set forth therein (the “Debt
Financing”),
and
(ii) the equity commitment letters, dated as of the Execution Date, from
(A)
25
Istithmar
, (B) Whitehall Street Global Real Estate Limited Partnership ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ International Real Estate Limited Partnership ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Global Employee Fund 2005, L.P. and Whitehall Street International Employee
Fund
2005 (Delaware), L.P., (C) Colony Investors VII L.P., (D) Providence Equity
Offshore Partners V L.P. and (E) The Related Companies, L.P. (the “Equity
Financing Commitments”
and
together with the Debt Financing Commitments, the “Financing
Commitments”),
pursuant to which such parties have committed, subject to the terms thereof,
to
invest the cash amounts set forth therein (the “Equity
Financing”
and
together with the Debt Financing, the “Financing”).
Prior
to the Execution Date, (i) none of the Financing Commitments has been amended
or
modified, and (ii) the respective commitments contained in the Financing
Commitments have not been withdrawn or rescinded in any respect. As of the
Execution Date, the Financing Commitments are in full force and effect.
The
only
conditions precedent to the obligations of the lenders and other Persons
committing pursuant to the Financing Commitments to make the Financing available
to Parent or its Affiliates are those contemplated by the terms of the Financing
Commitments. As of the Execution Date, assuming the accuracy of the Company’s
representations and warranties contained herein, neither Parent, Merger Sub
nor
any direct investor in Parent has any knowledge that any event has occurred
which, with or without notice, lapse of time or both, would constitute a default
or breach on the part of Parent, Merger Sub or any direct investor in Parent
under any term or condition of the Financing Commitments or otherwise be
reasonably likely to result in any portion of the Financing contemplated thereby
to be unavailable. As of the Execution Date, assuming the accuracy of the
Company’s representations and warranties contained herein, neither Parent,
Merger Sub nor any of the direct investors in Parent has any reason to believe
that it will be unable to satisfy on a timely basis any term or condition to
be
satisfied by it and contained in the Financing Commitments. Parent, Merger
Sub
and their respective Affiliates have fully paid any and all commitment fees
or
other fees required by the terms of the Financing Commitments to be paid on
or
before the Execution Date. Assuming the accuracy of the Company’s
representations and warranties contained herein, the proceeds from the Financing
constitute all of the financing required to be provided by Parent for the
consummation of the Merger and other transactions contemplated by this
Agreement.
Section
5.8. Equity
Rollover Commitments.
Parent has delivered to the Company true and complete copies of the equity
rollover letters, dated as of the Execution Date, from (i) WLG, SK and HBK
and
(ii) Istithmar (the “Equity
Rollover Commitments”),
pursuant to which such parties have committed to contribute to Parent that
number of Ordinary Shares set forth in such letters for shares of capital stock
of Parent immediately prior to the Effective Time. As of the Execution Date,
the
Equity Rollover Commitments are in full force and effect. The only conditions
precedent to the obligations of (i) WLG, SK or HBK or (ii) Istithmar under
the
Equity Rollover Commitments are those
26
contemplated
by the terms of the Equity Rollover Commitments. As of the Execution Date,
assuming the accuracy of the Company’s representations and warranties contained
herein, neither Parent, Merger Sub nor any direct investor in Parent (or, in
the
case of WLG, SK or HBK) has any knowledge that any event has occurred which,
with or without notice, lapse of time or both, would constitute a default or
breach under any term or condition of the Equity Rollover Commitments or
otherwise be reasonably likely to result in any portion of the commitments
contemplated thereby to be unavailable. As of the Execution Date, assuming
the
accuracy of the Company’s representations and warranties contained herein,
neither Parent, Merger Sub nor any direct investor in Parent (or, in the case
of
WLG, SK or HBK) has any reason to believe that (i) WLG, SK or HBK or (ii)
Istithmar will be unable to satisfy on a timely basis any term or condition
to
be satisfied by it and contained in the Equity Rollover Commitments.
Section
5.9. Parent
and Merger Sub.
Each of Parent and Merger Sub has been formed solely for the purpose of engaging
in the transactions contemplated hereby and prior to the Effective Time will
have engaged in no other business activities and will have incurred no
liabilities or obligations other than as contemplated herein, including in
connection with arranging the Financing. As of March 20, 2006, there were 10
ordinary shares of Merger Sub outstanding, representing the only shares of
Merger Sub outstanding and entitled to vote on the Merger.
Section
5.10. Voting
Arrangements.
Other than the Voting Agreement, dated as of the Execution Date, among the
Company, WLG, SK, HBK and Istithmar (the “Voting
Agreement”),
no
direct or indirect equity investor in Parent or Merger Sub, or any Affiliate
thereof (other than the Company or any of its Subsidiaries), is subject to
any
voting trust or other agreement, arrangement or restriction with respect to
the
voting of any Ordinary Shares it owns beneficially (determined for the purposes
of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) or of record in respect of the Merger or any transaction involving a
Company Acquisition Proposal or Superior Proposal or any other transactions
contemplated hereby or thereby.
CONDUCT
OF BUSINESS PENDING THE MERGER
Section
6.1. Conduct
of the Company and Subsidiaries.
Except for matters (x) set forth in Section 6.1 of the Company Disclosure Letter
or as otherwise contemplated by or specifically provided in this Agreement,
or
(y) consented to in writing by Parent, from the date hereof until the Effective
Time, the Company shall, and shall cause its Subsidiaries to, conduct their
respective businesses in the ordinary and usual course consistent with past
practice. Without limiting the generality of the foregoing, and except for
matters set forth in Section 6.1 of the Company Disclosure Letter or as
otherwise contemplated by or specifically provided in this Agreement, without
the prior written consent of Parent (which consent shall not be unreasonably
withheld or delayed), the Company shall not, and shall not permit its
Subsidiaries to:
(a)
propose
or adopt any change in its organizational or governing documents;
(b)
merge
or
consolidate the Company or any of its Subsidiaries with any Person;
(c)
sell,
lease or otherwise dispose of a material amount of assets or securities,
including by merger, consolidation, asset sale or other business combination
(including formation of a Joint Venture);
(d)
redeem,
repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify
in
any material respect the terms of, indebtedness for borrowed money or assume,
guarantee or endorse or otherwise become responsible for, whether directly,
contingently or otherwise, the obligations of any Person, other than the
incurrence, assumption or guarantee of indebtedness in the ordinary course
consistent with past practice, including any borrowings under the existing
credit facilities of the Company and its Subsidiaries to fund working capital
needs, and such other actions taken in the ordinary course of business
consistent with past practice;
27
(e)
offer,
place or arrange any issue of debt securities or commercial bank or other credit
facilities that could be reasonably expected to compete with or impede the
Debt
Financing or cause the breach of any provisions of the Debt Financing
Commitments or cause any condition set forth in the Debt Financing Commitments
not to be satisfied;
(f)
make
any
material loans, advances or capital contributions to, acquisitions or licenses
of, or investments in, any other Person, except as required by existing
contracts;
(g)
authorize
any capital expenditures in excess of $10,000,000 per project or related series
of projects of $50,000,000 in the aggregate, other than expenditures necessary
to maintain existing assets in good repair and expenditures contemplated by
the
Company’s 2006 budget and approved development plans, as delivered to Parent
prior to the date hereof;
(h)
pledge
or
otherwise encumber shares of capital stock or other voting securities of the
Company or any of its Subsidiaries;
(i)
mortgage
or pledge any of its material assets, tangible or intangible, or create, assume
or suffer to exist any Lien thereupon (other than Permitted Liens);
(j)
enter
into or amend any Contract with any executive officer, director or other
Affiliate of the Company or any of its Subsidiaries or any Person beneficially
owning 5% or more of the Ordinary Shares;
(k)
(i)
split, combine or reclassify any Company Securities or Subsidiary Securities
or
amend the terms of any Company Securities or Subsidiary Securities, (ii)
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of Company Securities
or Subsidiary Securities other than a dividend or distribution by a wholly
owned
Subsidiary of the Company to its parent corporation in the ordinary course
of
business, (iii) issue or offer to issue any Company Securities or Subsidiary
Securities, or redeem, repurchase or otherwise acquire or offer to redeem,
repurchase, or otherwise acquire, any Company Securities or Subsidiary
Securities, other than in connection with (A) the exercise of Company Options
or
Company SARs or conversion of the Convertible Notes, (B) the withholding of
Company Securities to satisfy tax obligations with respect to Company Equity
Awards, (C) the acquisition by the Company of Company Securities in connection
with the forfeiture of Company Equity Awards, (D) the acquisition by the Company
of Company Securities in connection with the net exercise of Company Options
in
accordance with the terms thereof, and (E) the issuance of Company Securities
as
required to comply with any Company Benefit Plan or Employment Agreement as
in
effect on the date of this Agreement;
(l)
except
(i) as required pursuant to existing written agreements or any Company Benefit
Plan, Employment Agreement or collective bargaining agreement in effect on
the
date hereof, (ii) as effected in the ordinary course of business or (iii) as
required by applicable Law (including Section 409A of the Code), (A) adopt,
amend or terminate any Company Benefit Plan or enter into or amend any
28
collective
bargaining agreement or any Employment Agreement with any officer or director
of
the Company, except for entry into Employment Agreements with persons who are
not executive officers or directors to the extent necessary to replace a
departing employee or fill an existing vacancy, (B) take any action to
accelerate the vesting or payment, or fund or in any other way secure the
payment, of compensation or benefits under any Company Benefit Plan or (C)
increase in any manner the compensation or fringe benefits of any officer or
director of the Company by an amount in excess of $1,000,000 in the
aggregate;
(m)
settle
or
compromise any litigation, or release, dismiss or otherwise dispose of any
claim
or arbitration, other than settlements or compromises of litigation, claims
or
arbitration that do not exceed $10,000,000 in the aggregate and do not involve
any material injunctive or other non-monetary relief or impose material
restrictions on the business or operations of the Company;
(n)
make
or
change any material Tax election, or settle or compromise any material Tax
liability of the Company or any of its Subsidiaries, agree to an extension
of
the statute of limitations with respect to the assessment or determination
of
Taxes of the Company or any of its Subsidiaries, file any amended Tax Return
with respect to any material Tax, enter into any closing agreement with respect
to any Tax or surrender any right to claim a Tax refund;
(o)
make
any
change in financial accounting methods or method of Tax accounting, principles
or practices materially affecting the reported consolidated assets, liabilities
or results of operations of the Company and its Subsidiaries, except insofar
as
may have been required by a change in GAAP or Law;
(p)
adopt
a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
of
its Subsidiaries (other than the Merger and consolidations, mergers or
reorganizations solely among wholly owned Subsidiaries of the Company), or
a
letter of intent or agreement in principle with respect thereto;
(q)
take
any
action that is intended to or would result in any of the conditions to effecting
the Merger set forth in Sections 8.1 and 8.2 becoming incapable of being
satisfied;
(r)
take
any
action or fail to take any action which would, or would be reasonably likely
to,
individually or in the aggregate, prevent, materially delay or materially impede
the ability of the Company to consummate the Merger or the other transactions
contemplated by this Agreement; or
(s)
authorize,
agree or commit to do any of the foregoing.
Section
6.2. Conduct
of Parent and Merger Sub.
Each of Parent and Merger Sub agrees that, from the date hereof to the Effective
Time, it shall not (i) take any action (including by way of amendment to the
Amended and Restated Interim Investors Agreement dated as of the Execution
Date
among Parent and the investors named therein (the “Interim
Investors Agreement”))
that
is intended to or would result in any of the conditions to effecting the Merger
set forth in Sections 8.1 and 8.3 becoming incapable of being satisfied; or
(ii)
take
29
any
action or fail to take any action which would, or would be reasonably likely
to,
individually or in the aggregate, prevent, materially delay or materially impede
the ability of Parent and Merger Sub to consummate the Merger or the other
transactions contemplated by this Agreement. Parent has provided to the Company
a summary of the material provisions of the Interim Investors Agreement relating
to “Gaming/HSR Approvals” and “Remedies”.
Section
6.3. No
Control of Other Party’s Business.
Nothing contained in this Agreement is intended to give Parent, directly or
indirectly, the right to control or direct the Company’s or its Subsidiaries’
operations prior to the Effective Time, and nothing contained in this Agreement
is intended to give the Company, directly or indirectly, the right to control
or
direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time,
each of Parent and the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and
its
Subsidiaries respective operations.
ADDITIONAL
AGREEMENTS
Section
7.1. Shareholder
Meeting; Proxy Material.
(a)
The
Company shall (i) take all action necessary to duly call, give notice of,
convene and hold a meeting of its shareholders (the “Company
Shareholder Meeting”)
for
the purpose of obtaining the approval of this Agreement by the Company
shareholders in accordance with applicable Law as promptly as reasonably
practicable after the SEC confirms that it has no further comments on the
Schedule 13E-3, (ii) use reasonable best efforts to solicit the approval of
this
Agreement by the Company shareholders, and (iii) except to the extent that
the
Board of Directors of the Company (acting through the Special Committee, if
such
committee still exists) shall have withdrawn or modified its approval or
recommendation of this Agreement as permitted by Section 7.4(c), include in
the
Company Proxy Statement the recommendation of the Board of Directors of the
Company that the shareholders of the Company approve this Agreement (the
“Recommendation”).
Notwithstanding any Recommendation Withdrawal, this Agreement shall be submitted
to the Company shareholders at the Company Shareholder Meeting for the purpose
of obtaining the approval of this Agreement by the Company shareholders, and
nothing contained herein, including any rights of the Company to take certain
actions pursuant to Section 7.4, shall be deemed to relieve the Company of
such obligation or its obligation to convene and hold the Company Shareholder
Meeting as promptly as reasonably practicable after the SEC confirms that it
has
no further comments on the Schedule 13E-3.
(b)
In
connection with the Company Shareholder Meeting, the Company will (i) as
promptly as reasonably practicable prepare the Company Proxy Statement and
the
Schedule 13E-3 and file, jointly with Parent and Merger Sub, the Schedule 13E-3
with the SEC as promptly as reasonably practicable, (ii) respond as promptly
as
reasonably practicable to any comments received from the SEC with respect to
such filing and will provide copies of such comments to Parent and Merger Sub
promptly upon receipt and copies of proposed responses to Parent and Merger
Sub
a reasonable time prior to filing to allow meaningful comment, (iii) as promptly
as reasonably practicable prepare and file (after Parent and Merger Sub have
had
a reasonable opportunity to review and comment on) any amendments or supplements
necessary
30
to
be
filed in response to any SEC comments or as required by Law, (iv) use its
reasonable best efforts to have the SEC confirm that it has no further comments
on the Schedule 13E-3 and will thereafter mail to its shareholders as promptly
as reasonably practicable the Company Proxy Statement and all other customary
proxy or other materials for meetings such as the Company Shareholder Meeting,
(v) to the extent required by applicable Law, as promptly as reasonably
practicable prepare, file and distribute to the Company shareholders any
supplement or amendment to the Company Proxy Statement and the Schedule 13E-3
if
any event shall occur which requires such action at any time prior to the
Company Shareholder Meeting, and (vi) otherwise use reasonable best efforts
to
comply with all requirements of Law applicable to the Company Shareholder
Meeting and the Merger. Parent and Merger Sub shall cooperate with the Company
in connection with the preparation of the Company Proxy Statement and the
preparation and filing of the Schedule 13E-3, including promptly furnishing
the
Company upon request with any and all information as may be required to be
set
forth in the Company Proxy Statement and the Schedule 13E-3 under applicable
Law. The Company will provide Parent and Merger Sub a reasonable opportunity
to
review and comment upon the Company Proxy Statement and the Schedule 13E-3,
or
any amendments or supplements thereto, prior to mailing the Company Proxy
Statement to its shareholders and filing the Schedule 13E-3 with the SEC.
Section
7.2. Reasonable
Best Efforts.
(a)
Subject
to the terms and conditions of this Agreement, each party will use its
reasonable best efforts to take, or cause to be taken, all actions, to file,
or
cause to be filed, all documents and to do, or cause to be done, all things
necessary, proper or advisable to consummate the transactions contemplated
by
this Agreement, including preparing and filing as promptly as practicable all
documentation to effect all necessary filings, consents, waivers, approvals,
authorizations, Permits or orders from all Governmental Authorities (including
Gaming Authorities) or other Persons and, in the case of Parent, using
reasonable best efforts to enforce any remedies available to Parent in the
Interim Investors Agreement. In furtherance and not in limitation of the
foregoing, each party hereto
agrees to make, or cause to be made, the filings and authorizations required
under the Other Antitrust Laws of jurisdictions other than the United States
as
promptly as reasonably practicable after the Execution Date and to supply as
promptly as reasonably practicable any additional information and documentary
material that may be requested pursuant to the Other Antitrust Laws of
jurisdictions other than the United States and use its reasonable best efforts
to take or cause to be taken all other actions necessary, proper or advisable
consistent with this Section 7.2 to cause the expiration or termination of
the
applicable waiting periods, or receipt of required authorizations, as
applicable, under the Other Antitrust Laws of jurisdictions other than the
United States as soon as practicable; provided that in no event shall any
shareholder of Parent, or any Affiliate of any shareholder of Parent, be
required to take any action with respect to any portfolio company or agree
to
undertake any divestiture or restrict its conduct with regard to any business
other than the business of the Company and its Subsidiaries.
(b)
Each
of
Parent and Merger Sub, on the one hand, and the Company, on the other hand,
shall, in connection with the efforts referenced in Section 7.2(a) to obtain
all
requisite approvals and authorizations for the transactions contemplated by
this
Agreement, use its reasonable best efforts to (i) cooperate in all respects
with each other in connection with any filing or submission and in connection
with any investigation or other inquiry, including any proceeding initiated
by a
private party; (ii) keep the other party reasonably informed of any
communication received by such party from, or given by such party to, the
Federal Trade Commission (the “FTC”),
the
Antitrust Division
31
of
the
Department of Justice (the “DOJ”)
or any
other Governmental Authority and of any communication received or given in
connection with any proceeding by a private party, in each case regarding any
of
the transactions contemplated hereby; and (iii) permit the other party to
review any communication given by it to, and consult with each other in advance
of any meeting or conference with, the FTC, the DOJ or any other Governmental
Authority or, in connection with any proceeding by a private party, with any
other person, and to the extent permitted by the FTC, the DOJ or such other
applicable Governmental Authority or other person, give the other party the
opportunity to attend and participate in such meetings and conferences.
(c)
In
furtherance and not in limitation of the covenants of the parties contained
in
Sections 7.2(a) and (b), if any objections are asserted with respect to the
transactions contemplated hereby under any Law or if any suit is instituted
(or
threatened to be instituted) by the FTC, the DOJ or any other applicable
Governmental Authority or any private party challenging any of the transactions
contemplated hereby as violative of any Law or which would otherwise prevent,
materially impede or materially delay the consummation of the transactions
contemplated hereby, each of Parent, Merger Sub and the Company shall use its
reasonable best efforts to resolve any such objections or suits so as to permit
consummation of the transactions contemplated by this Agreement, including
in
order to resolve such objections or suits which, in any case if not resolved,
would reasonably be expected to prevent, materially impede or materially delay
the consummation of the Merger or the other transactions contemplated hereby,
including selling, holding separate or otherwise disposing of or conducting
its
business in a manner which would resolve such objections or suits or agreeing
to
sell, hold separate or otherwise dispose of or conduct its business in a manner
which would resolve such objections or suits or permitting the sale, holding
separate or other disposition of, any of its assets or the assets of its
Subsidiaries or the conducting of its business in a manner which would resolve
such objections or suits so long as such actions, individually or in the
aggregate, do not have, and would not be reasonably likely to have, a Material
Adverse Effect on the Company; provided,
however,
that
the Company may expressly condition any such sale, holding separate or other
disposal, and any agreement to take any such action or to conduct its business
in any manner, upon the consummation of the Merger and the other transactions
contemplated hereby; and provided
further,
however,
that in
no event shall any shareholder of Parent, or any Affiliate of any shareholder
of
Parent be required to take any action with respect to any portfolio company
or
agree to undertake any divestiture or restrict its conduct with regard to any
business other than the business of the Company and its
Subsidiaries. Without
excluding other possibilities, the transactions contemplated by this Agreement
shall be deemed to be materially delayed if unresolved objections or suits
delay
or would reasonably be expected to delay the consummation of the transactions
contemplated hereby beyond the End Date.
(d)
Subject
to the obligations under Section 7.2(c), in the event that any administrative
or
judicial action or proceeding is instituted (or threatened to be instituted)
by
a Governmental Authority or private party challenging the Merger or any other
transaction contemplated by this Agreement, or any other agreement contemplated
hereby, each of Parent, Merger Sub and the Company shall cooperate in all
respects with each other and use its respective reasonable best efforts to
contest and resist any such action or proceeding and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement.
32
(e)
Notwithstanding
anything to the contrary in this Agreement, in connection with obtaining any
approval or consent from any person with respect to the Merger, (i) without
the
prior written consent of Parent (which shall not be unreasonably withheld or
delayed), none of the Company or any of its Subsidiaries shall pay or commit
to
pay to such person whose approval or consent is being solicited any cash or
other consideration, make any commitment or incur any liability or other
obligation due to such person and (ii) no party or its Affiliates shall be
required to pay or commit to pay to such person whose approval or consent is
being solicited any cash or other consideration, make any commitment or to
incur
any liability or other obligation (provided,
however,
that
such party shall give the other parties hereto the opportunity to make such
payments).
Section
7.3. Access
to Information.
(a)
Subject
to applicable Law, the Company will provide and will cause its Subsidiaries
and
its and their respective Representatives to provide Parent and Merger Sub and
their respective authorized Representatives, during normal business hours and
upon reasonable advance notice (i) such access to the offices, properties,
books
and records of the Company and such Subsidiaries (so long as such access does
not unreasonably interfere with the operations of the Company) as Parent or
Merger Sub reasonably may request and (ii) all documents that Parent or Merger
Sub reasonably may request. Notwithstanding the foregoing, Parent, Merger Sub
and their Representatives shall not have access to any books, records, documents
and other information (i) to the extent that books, records, documents or
other information is subject to the terms of a confidentiality agreement with
a
third party (provided that the Company shall use its reasonable best efforts
to
obtain waivers under such agreements or implement requisite procedures to enable
reasonable access without violating such agreement), (ii) to the extent
that the disclosure thereof would result in the loss of attorney-client
privilege, (iii) to the extent required by applicable Law (provided that
the Company shall use its reasonable best efforts to enable the provision of
reasonable access without violating such law) or (iv) to the extent
relating to pricing or other matters that are highly sensitive if the exchange
of such books, records, documents or other information (or portions thereof),
as
reasonably determined by the Company’s counsel, would be reasonably likely to
result in antitrust difficulties for the Company (or any of its Affiliates).
The
parties will make appropriate substitute arrangements under circumstances in
which the restrictions of the preceding sentence apply. All information
exchanged pursuant to this Section 7.3(a) shall be subject to the
Confidentiality Agreements and the confidentiality agreement dated February
5,
2006, among WLG, SK and HBK and the Company.
(b)
No
investigation by any of the parties or their respective Representatives shall
affect the representations or warranties of the other set forth
herein.
Section
7.4. No
Solicitation.
(a)
Until
the
Effective Time or, if earlier, the termination of this Agreement in accordance
with Article IX, none of the Company, the Company’s Subsidiaries nor any of
their respective officers, directors, employees, consultants, agents, advisors,
affiliates and other representatives (“Representatives”)
shall,
directly or indirectly, (A) initiate, solicit or encourage (including by way
of
providing
33
information)
the submission of any inquiries, proposals or offers that constitute or may
reasonably be expected to lead to, any Company Acquisition Proposal or engage
in
any discussions or negotiations with respect thereto or otherwise cooperate
with
or assist or participate in, or facilitate any such inquiries, proposals,
discussions or negotiations, or (B) approve or recommend, or propose to approve
or recommend, a Company Acquisition Proposal or enter into any merger agreement,
letter of intent, agreement in principle, share purchase agreement, asset
purchase agreement or share exchange agreement, option agreement or other
similar agreement providing for or relating to a Company Acquisition Proposal
or
enter into any agreement or agreement in principle requiring the Company to
abandon, terminate or fail to consummate the transactions contemplated hereby
or
breach its obligations hereunder or propose or agree to do any of the foregoing.
The Company shall immediately cease and cause to be terminated any solicitation,
encouragement, discussion or negotiation with any Persons conducted prior to
the
Execution Date by the Company, its Subsidiaries or any Representatives with
respect to any Company Acquisition Proposal and shall use its (and will cause
its Representatives to use their) reasonable best efforts to require the other
parties thereto to promptly return or destroy in accordance with the terms
of
any applicable confidentiality agreement any confidential information previously
furnished by the Company, the Company’s Subsidiaries or their respective
Representatives thereunder.
(b)
Notwithstanding
anything to the contrary contained in Section 7.4(a), if at any time prior
to
obtaining the Requisite Shareholder Vote, (i) the Company has otherwise complied
in all material respects with its obligations under this Section 7.4 and the
Company has received a written Company Acquisition Proposal from a third party
that the Board of Directors of the Company (acting through the Special
Committee, if such committee still exists, or otherwise by resolution of a
majority of its Disinterested Directors) believes in good faith to be bona
fide
and (ii) the Board of Directors of the Company (acting through the Special
Committee, if such committee still exists, or otherwise by resolution of a
majority of its Disinterested Directors) determines in good faith, after
consultation with its independent financial advisors and outside counsel, that
such Company Acquisition Proposal constitutes or could reasonably be expected
to
result in a Superior Proposal, then the Company may (A) furnish information
with
respect to the Company and its Subsidiaries to the Person making such Company
Acquisition Proposal and (B) participate in discussions or negotiations with
the
Person making such Company Acquisition Proposal regarding such Company
Acquisition Proposal; provided,
that
the Company (x) will not, and will not allow Company Representatives to,
disclose any non-public information to such Person without entering into an
Acceptable Confidentiality Agreement, and (y) will promptly provide to Parent
and Merger Sub any material non-public information concerning the Company or
its
Subsidiaries provided to such other Person which was not previously provided
to
Parent and Merger Sub (subject to the right of the Company to withhold such
portions of documents or information to the extent relating to pricing or other
matters that are highly sensitive if the exchange of such information (or
portions thereof), as reasonably determined by the Company’s counsel, would be
reasonably likely to result in antitrust difficulties for the Company (or any
of
its Affiliates)). The Company shall promptly (within one Business Day) notify
Parent and Merger Sub in the event it receives a Company Acquisition Proposal
from a Person or group of related Persons, including the material terms and
conditions thereof and the identity of the party making such proposal or
inquiry, and shall keep Parent and Merger Sub reasonably apprised as to the
status and any material developments, discussions and negotiations concerning
the same. Without limiting the foregoing, the Company shall promptly (within
one
Business Day) notify Parent and Merger Sub orally and in writing if it
determines to begin providing information or to engage in negotiations
concerning a Company Acquisition Proposal.
34
(c)
Subject
to Section 7.4(d), neither the Board of Directors of the Company nor any
committee thereof shall directly or indirectly (i) withdraw or modify in a
manner adverse to Parent or Merger Sub, or publicly propose to withdraw or
modify in a manner adverse to Parent or Merger Sub, the Recommendation or (ii)
take any other action or make any other public statement in connection with
the
Company Shareholder Meeting inconsistent with such Recommendation.
(d)
Notwithstanding
anything in this Agreement to the contrary, if, at any time prior to obtaining
the Requisite Shareholder Vote, the Company receives a Company Acquisition
Proposal which the Board of Directors of the Company (acting through the Special
Committee, if such committee still exists, or otherwise by resolution of a
majority of its Disinterested Directors) concludes in good faith constitutes
a
Superior Proposal after giving effect to all of the adjustments which may be
offered by Parent and Merger Sub pursuant to clause (iii) below, the Board
of
Directors of the Company (acting through the Special Committee, if such
committee still exists, or otherwise by resolution of a majority of its
Disinterested Directors) may withdraw or modify its Recommendation in a manner
adverse to Parent and Merger Sub (“Recommendation
Withdrawal”)
if the
Board of Directors of the Company (acting through the Special Committee, if
such
committee still exists, or otherwise by resolution of a majority of its
Disinterested Directors) determines in good faith (after consultation with
outside counsel) that failure to take such action would violate its fiduciary
duties under applicable Law; provided,
however
that that the Board of Directors or any committee thereof may not effect a
Recommendation Withdrawal pursuant to this Section 7.4(d) unless:
(i)
the
Company shall have complied in all material respects with this Section
7.4;
(ii)
the
Company shall have provided prior written notice to Parent and Merger Sub,
at
least five Business Days in advance (the “Notice
Period”),
of
its intention to effect a Recommendation Withdrawal in response to such Superior
Proposal, which notice shall specify the material terms and conditions of any
such Superior Proposal (including the identity of the party making such Superior
Proposal), and shall have contemporaneously provided a copy of the relevant
proposed transaction agreements with the party making such Superior Proposal
and
other material documents; and
(iii)
prior
to
effecting such Recommendation Withdrawal, the Company shall, and shall cause
its
financial and legal advisors to, during the Notice Period, negotiate with Parent
and Merger Sub in good faith (to the extent Parent and Merger Sub desire to
negotiate) to make such adjustments in the terms and conditions of this
Agreement so that such Company Acquisition Proposal ceases to constitute a
Superior Proposal.
35
The
Company shall be required to deliver a new written notice to Parent and Merger
Sub in the event of any material revisions to the Superior Proposal, in which
event the Notice Period shall commence following the receipt by Parent and
Merger Sub of such new written notice.
(e)
Nothing
contained in this Section 7.4 or elsewhere in this Agreement shall prohibit
the Company from (i) taking and disclosing to its shareholders a position
contemplated by Rule 14d-9 and 14e-2(a) promulgated under the Exchange Act
or (ii) making any disclosure to the Company’s shareholders if, in the good
faith judgment of the Board of Directors (acting through the Special Committee,
if such committee still exists, or otherwise by resolution of a majority of
its
Disinterested Directors), after receipt of advice from its outside legal
counsel, failure so to disclose would be inconsistent with disclosure
requirements under applicable Law; provided,
any
such disclosure made pursuant to clause (i) or (ii) (other than a “stop, look
and listen” letter or similar communication of the type contemplated by Rule
14d-9(f) under the Exchange Act) shall be deemed to be a Recommendation
Withdrawal unless the Board of Directors of the Company (acting through the
Special Committee if such committee still exists) expressly reaffirms in such
disclosure its recommendation in favor of the approval of this
Agreement.
(f)
The
Company agrees that any violations of the restrictions set forth in this Section
7.4 by any Representative of the Company or any of its Subsidiaries, shall
be
deemed to be a breach of this Section 7.4 by the Company.
(g)
As
used
in this Agreement, the term:
(i)
“Acceptable
Confidentiality Agreement”
means
a
confidentiality and standstill agreement that contains provisions that are
no
less favorable in the aggregate to the Company than those contained in the
confidentiality agreements (A) dated February 7, 2006 between Colony Capital
Acquisitions, LLC and the Company, (B) dated February 23, 2006, between The
Related Company, L.P. and the Company, (C) dated February 7, 2006, between
Providence Equity Partners Inc. and the Company and (D) dated February 7, 2006,
between Whitehall Street Global Real Estate Limited Partnership 2005 and the
Company (the “Confidentiality
Agreements”),
provided,
however,
that an
Acceptable Confidentiality Agreement may include provisions that are less
favorable in the aggregate to the Company than those contained in the
Confidentiality Agreements, so long as the Company offers to amend the
Confidentiality Agreements concurrently with execution of such Acceptable
Confidentiality Agreement to include substantially similar provisions for the
benefit of the parties thereto;
(ii)
“Company
Acquisition Proposal”
means
any inquiry, proposal or offer from any Person or group of Persons other than
Parent, Merger Sub or their respective Affiliates relating to any direct or
indirect acquisition or purchase of a business or businesses that constitutes
30% or more of the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole, or 30% or more of any class or series of Company
Securities or Subsidiary Securities, any tender offer or exchange offer that
if
consummated would result in any Person or group of Persons beneficially owning
30% or more of any class or series of Company Securities or Subsidiary
Securities, or any merger, reorganization, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company (or any Subsidiary or Subsidiaries of the
Company whose business or businesses constitute(s) 30% or more of the net
revenues, net income or assets of the Company and its Subsidiaries, taken as
a
whole);
36
(iii)
“Superior
Proposal”
means
a
Company Acquisition Proposal, which was not obtained in violation of this
Section 7.4, and which the Board of Directors of the Company (acting through
the
Special Committee, if such committee still exists, or otherwise by resolution
of
a majority of its Disinterested Directors) in good faith determines, would,
if
consummated, result in a transaction that is more favorable from a financial
point of view to the shareholders of the Company (in their capacities as
shareholders) than the transactions contemplated hereby (x) after receiving
the
advice of its financial advisor (who shall be a nationally recognized investment
banking firm), (y) after taking into account the likelihood of consummation
of
such transaction on the terms set forth therein (as compared to the terms
herein) and (z) after taking into account all appropriate legal (with the advice
of outside counsel), financial (including the financing terms of any such
proposal), regulatory or other aspects of such proposal; provided
that for
purposes of the definition of “Superior
Proposal”,
the
references to “30% or more” in the definition of Company Acquisition Proposal
shall be deemed to be references to “a majority” and the definition of Company
Acquisition Proposal shall only refer to a transaction (i) directly involving
the Company (and not exclusively its Subsidiaries) or (ii) involving a sale
or
transfer of all or substantially all of the assets of the Company and its
Subsidiaries, taken as a whole.
Section
7.5. Director
and Officer Liability.
(a)
From
and
after the Effective Time, the Surviving Corporation shall comply with all of
the
Company’s and its respective Subsidiaries’ obligations to indemnify and hold
harmless (including any obligations to advance funds for expenses) (i) the
present and former officers and directors thereof against any and all costs
or
expenses (including reasonable attorneys’ fees and expenses), 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
(“Damages”),
arising out of, relating to or in connection with any acts or omissions
occurring or alleged to occur prior to or at the Effective Time to the extent
provided under the Company’s or such Subsidiaries’ respective organizational and
governing documents or agreements in effect on the date hereof, including the
approval of this Agreement, the Merger or the other transactions contemplated
by
this Agreement or arising out of or pertaining to the transactions contemplated
by this Agreement; and (ii) such persons against any and all Damages arising
out
of acts or omissions in connection with such persons serving as an officer,
director or other fiduciary in any entity if such service was at the request
or
for the benefit of the Company or any of its Subsidiaries. For a period of
six
years after the Effective Time, the Surviving Corporation shall cause to be
maintained in effect the current policies of officers’ and directors’ liability
insurance maintained on the date hereof by the Company and its respective
Subsidiaries (the “Current
Policies”);
provided,
however,
that
the Surviving Corporation may, and in the event of the cancellation or
termination of such policies shall, substitute therefor policies with reputable
and financially sound carriers providing at least the same coverage and amount
and containing terms and conditions that are no less favorable to the covered
persons (the “Replacement
Policies”)
in
37
respect
of claims arising from facts or events that existed or occurred prior to or
at
the Effective Time under the Current Policies; provided,
further,
however,
that in
no event will the Surviving Corporation be required to expend annually in excess
of 300% of the annual premium currently paid by the Company under the Current
Policies (the “Insurance
Amount”)
(in
which event, the Surviving Corporation shall obtain as much comparable insurance
as available for the Insurance Amount); provided,
further,
however,
that in
lieu of the foregoing insurance coverage, Parent may direct the Company to
purchase “tail” insurance coverage that provides coverage no less favorable than
the coverage described above, provided
that the
Company shall not be required to pay any amounts in respect of such coverage
prior to the Closing.
(b)
This
Section 7.5 shall survive the consummation of the Merger and is intended to
be
for the benefit of, and shall be enforceable by, present or former directors
or
officers of the Company or its Subsidiaries, their respective heirs and personal
representatives and shall be binding on the Surviving Corporation and its
successors and assigns. In the event that the Surviving Corporation or any
of
its successors or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially
all its properties and assets to any person (including by dissolution), then,
and in each such case, Parent shall cause proper provision to be made so that
the successors and assigns of the Surviving Corporation assume and honor the
obligations set forth in this Section 7.5.
(c)
The
agreements and covenants contained herein shall not be deemed to be exclusive
of
any other rights to which any such present or former director or officer is
entitled, whether pursuant to Law, contract or otherwise. Nothing in this
Agreement is intended to, shall be construed to or shall release, waive or
impair any rights to directors’ and officers’ insurance claims under any policy
that is or has been in existence with respect to the Company or any of its
Subsidiaries or their respective officers, directors and employees, it being
understood and agreed that the indemnification provided for in this Section
7.5
is not prior to or in substitution for any such claims under any such policies.
Section
7.6. Takeover
Statutes.
The parties shall use their respective reasonable best efforts (i) to take
all
action necessary so that no Takeover Statute is or becomes applicable to the
Merger or any of the other transactions contemplated by this Agreement and
(ii)
if any such Takeover Statute is or becomes applicable to any of the foregoing,
to take all action necessary so that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as practicable
on
the terms contemplated by this Agreement and otherwise to minimize the effect
of
such Takeover Statute on the Merger and the other transactions contemplated
by
this Agreement.
Section
7.7. Public
Announcements.
Except with respect to any Recommendation Withdrawal or any action taken by
the
Company or its Board of Directors pursuant to, and in accordance with, Section
7.4, so long as this Agreement is in effect, the parties will consult with
each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except
for any press release or public statement as may be required by applicable
Law,
court process or any listing agreement with the New York Stock Exchange, will
not issue any such press release or make any such public statement without
the
consent of the other parties (not to be unreasonably withheld or
delayed).
38
Section
7.8. Employee
Matters.
(a)
Without
limiting any additional rights that any Company Employee employed by the Company
or any of its Subsidiaries at the Effective Time (“Current
Employee”)
may
have under any Company Benefit Plan, Employment Agreement or collective
bargaining agreement, Parent shall cause the Surviving Corporation and each
of
its Subsidiaries, for the period commencing at the Effective Time and ending
on
the first anniversary thereof, to maintain for each Current Employee (i) base
salary or hourly wage rate, target cash bonus opportunities under annual
programs and commissions, but excluding equity and equity equivalents
(collectively, “Compensation”),
that
in the aggregate is no less favorable than, and (ii) welfare benefits that
in
the aggregate are no less favorable than, in the case of the foregoing clauses
(i) and (ii), the Compensation and benefits maintained for and provided to
such
Current Employee immediately prior to the Effective Time; provided,
however,
that,
subject to the obligations set forth in this Section 7.8, nothing herein shall
(A) prevent the amendment or termination of any Company Benefit Plans in
accordance with their respective terms, or (B) interfere with the Surviving
Corporation’s right or obligation to make such changes as are necessary to
conform with applicable Law. Nothing in this Section 7.8 shall limit the right
of Parent, the Surviving Corporation or any of their Subsidiaries to terminate
the employment of any Current Employee at any time in a manner consistent with
any applicable contractual obligations and any applicable employee benefit
plans.
(b)
As
of and
after the Effective Time, Parent will, or will cause the Surviving Corporation
to, give each Current Employee full credit for purposes of eligibility to
participate and vesting (but not for benefit accrual purposes, except for
purposes of vacation and severance) under any Employee Benefit Plans and any
other employee compensation and incentive plans, benefit (including vacation)
plans, programs, policies and arrangements, in each case maintained for the
benefit of Current Employees as of and after the Effective Time by Parent,
its
Subsidiaries or the Surviving Corporation (each, a “Parent
Plan”)
for
such Current Employee’s service prior to the Effective Time with the Company and
its Subsidiaries and their predecessor entities, to the same extent such service
is recognized by the Company or its Subsidiaries immediately prior to the
Effective Time. With respect to each Parent Plan that is a “welfare benefit
plan” (as defined in Section 3(1) of ERISA), Parent or its Subsidiaries shall
(i) cause there to be waived any pre-existing condition or eligibility
limitations or exclusions and actively-at-work requirements with respect to
the
Current Employees and their eligible dependents and (ii) give effect, for
the year in which the Closing occurs, for purposes of satisfying any deductible
and maximum out-of-pocket limitations, to claims incurred and amounts paid
by,
and amounts reimbursed to, Current Employees and their eligible dependents
under
similar plans maintained by the Company and its Subsidiaries in which such
Current Employees and their eligible dependents participated immediately prior
to the Effective Time.
(c)
From
and
after the Effective Time, Parent will cause the Surviving Corporation and all
of
their Subsidiaries to assume and honor, in accordance with their respective
terms, (i) each existing employment, change in control, severance and
termination plan, policy or agreement of or between the Company or any of its
Subsidiaries, on the one hand, and any officer, director or employee of
39
that
company, on the other hand, (ii) each equity-based plan, program or agreement
and each bonus plan, program or agreement and (iii) all obligations pursuant
to
existing benefit restoration plans, equity-based plans, programs or agreements,
bonus plans, programs or agreements, bonus deferral plans, vested and accrued
benefits under any employee benefit plan, program or arrangement of the Company
or its Subsidiaries and similar employment compensation and benefit arrangements
and agreements in effect as of the Effective Time, in the case of each of the
foregoing clauses (i), (ii) and (iii), to the extent legally binding on the
Company or any of its Subsidiaries.
(d)
The
provisions of this Section 7.8 are for the sole benefit of the parties to this
Agreement and nothing herein, expressed or implied, is intended or shall be
construed to confer upon or give to any person (including for the avoidance
of
doubt any Company Employees), other than the parties hereto and their respective
permitted successors and assigns, any legal or equitable or other rights or
remedies (with respect to the matters provided for in this Section 7.8) under
or
by reason of any provision of this Agreement.
Section
7.9. Financing.
(a)
Prior
to
the Effective Time, the Company shall provide, and shall cause its Subsidiaries
to, and shall use its reasonable best efforts to cause their respective
Representatives, including legal and accounting, to, provide all cooperation
reasonably requested by Parent in connection with the Financing and the other
transactions contemplated by this Agreement, including (i) participation in
a reasonable number of meetings, presentations, road shows, due diligence
sessions and sessions with rating agencies, (ii) assisting with the
preparation of materials for rating agency presentations, offering documents,
private placement memoranda, bank information memoranda, prospectuses and
similar documents required in connection with the Financing,
(iii) executing and delivering any pledge and security documents, other
definitive financing documents, or other certificates, legal opinions or
documents as may be reasonably requested by Parent (including a certificate
of
the chief financial officer of the Company or any Subsidiary with respect to
solvency matters and consents of accountants for use of their reports in any
materials relating to the Debt Financing) and otherwise reasonably
facilitating the pledging of collateral, in each case effective on or after
the
Effective Time, (iv) furnishing Parent and its Financing sources with
financial and other pertinent information regarding the Company as may be
reasonably requested by Parent, including all financial statements and financial
data of the type required by Regulation S-X and Regulation S-K under the
Securities Act and of type and form customarily included in private placements
under Rule 144A of the Securities Act in respect of foreign private issuers
(as
such term is defined under the Exchange Act), to consummate the offering of
debt
securities contemplated by the Debt Financing Commitments, (v) using
reasonable best efforts to obtain accountants’ comfort letters, legal opinions,
surveys and title insurance as reasonably requested by Parent, (vi) using its
commercially reasonable efforts to provide monthly financial statements
(excluding footnotes) within 25 days of the end of each month prior to the
Closing Date, (vii) taking all actions reasonably necessary to (A) permit the
prospective lenders involved in the Financing to evaluate the Company’s current
assets, cash management and accounting systems, policies and procedures relating
thereto for the purpose of establishing collateral arrangements and (B)
effective on or after the Effective Time, establish bank and other accounts
and
blocked account agreements and lock box arrangements in connection with the
foregoing, and (viii) taking all corporate actions reasonably necessary to
permit the consummation of the Debt Financing and to permit the proceeds thereof
to be made available to the Company (it being understood that (A) to the
greatest
40
extent
practicable, the actions contemplated by this Section 7.9(a)(viii) shall not
be
required to be taken until immediately prior to the Closing and that prior
to
the taking of such actions, any current member of the Board of Directors may
resign and (B) if such member of the Board of Directors resigns, the failure
of
any such director to take any such action shall not constitute a failure to
satisfy a condition to Closing). Parent shall, promptly upon request by the
Company, reimburse, or cause its Affiliates to reimburse, the Company for all
reasonable and documented out-of-pocket costs incurred by the Company or its
Subsidiaries in connection with such cooperation.
The
Company hereby consents to the use of its and its Subsidiaries’ logos in
connection with the Debt Financing, provided that such logos are used solely
in
a manner that is not intended to nor reasonably likely to harm or disparage
the
Company or the reputation or goodwill of the Company and its marks.
(b)
Parent
shall use its reasonable best efforts to arrange the Debt Financing on the
terms
and conditions described in the Debt Financing Commitments as promptly as
practicable on the terms and conditions described in the Debt Financing
Commitments, including using reasonable best efforts to (i) negotiate
definitive agreements with respect thereto on the terms and conditions contained
therein or on other terms no less favorable to Parent and Merger Sub and
(ii) to satisfy on a timely basis all conditions applicable to Parent in
such definitive agreements that are within its control. In the event that all
conditions applicable to the Financing Commitments (other than in connection
with the Debt Financing, the availability or funding of any of the Equity
Financing) have been satisfied in Parent’s good faith judgment, Parent shall use
its reasonable best efforts to cause the lenders and the other Persons providing
such Financing to fund the Financing required to consummate the Merger on the
Closing Date (including by taking enforcement action to cause such lenders
and
other Persons providing such Financing to fund such Financing). In the event
any
portion of the Debt Financing becomes unavailable on the terms and conditions
contemplated in the Debt Financing Commitments, Parent shall use its reasonable
best efforts to arrange to obtain alternative financing from alternative sources
on terms no less favorable, taken as a whole, to Parent and Merger Sub (as
determined in the reasonable judgment of Parent) as promptly as practicable
following the occurrence of such event. Parent and Merger Sub shall keep the
Company reasonably apprised of material developments relating to the
Financing.
(c)
Parent
shall
not agree to any amendments or modifications to, or grant any waivers of, any
condition or other material provision under the Financing Commitments
without
the consent of the Company if such amendments, modifications or waivers would
impose new or additional conditions or otherwise amend,
modify or waive any of the conditions to the receipt
of the
Financing
in a
manner that would be reasonably
likely to cause any material delay in the satisfaction of the conditions set
forth in Article VIII. Notwithstanding
anything in this Agreement to the contrary, one or more Debt Financing
Commitments may be superseded at the option of Parent and Merger Sub after
the
Execution Date but prior to the Effective Time by new debt financing commitments
(the “New
Financing Commitments”)
which
replace existing Debt Financing Commitments; provided,
that
the terms of the New Financing Commitments shall not (A) impose new or
additional conditions to the receipt of the Financing as set forth in the Debt
Financing Commitments in any material respect or (B) be
reasonably likely to cause any material delay in the satisfaction of the
conditions set forth in Article VIII.
In such
event, the term “Financing
Commitments”
as
used
herein shall be deemed to include the Financing Commitments that are not so
superseded at the time in question and the New Financing Commitments to the
extent then in effect.
41
(d)
Neither
Parent nor any of its Affiliates shall seek or obtain, or engage in substantive
discussions in respect of, any equity commitments or equity financing in respect
of the Merger or any of the other transactions contemplated hereby from any
entities or persons (other than SK, HBK, Istithmar and their respective
Affiliates) who are required to file a Schedule 13G or Schedule 13D under the
Exchange Act as of the Execution Date but without giving effect to the
transactions contemplated hereby. Parent shall cause its Affiliates to comply
with the foregoing covenant.
Section
7.10. Debt
Tender Offers.
As soon as reasonably practicable, the Company shall, and with respect to the
6
¾% Notes shall cause ▇▇▇▇▇▇▇
International North America, Inc.
(“KINA”)
to,
commence offers to purchase and related consent solicitations with respect
to
all of the outstanding aggregate principal amount of the Company’s and KINA’s 6
¾% Senior Subordinated Notes due 2015 (the “6
¾%
Notes”
and,
together with the Convertible Notes, the “Notes”)
and
the Convertible Notes on such terms and conditions as are reasonably acceptable
to Parent and the Company (including the related consent solicitations,
collectively, the “Debt
Tender Offers”)
and
Parent shall assist the Company in connection therewith. Promptly following
the
expiration date of the consent solicitations, assuming the requisite consents
are received, the Company shall execute supplemental indentures to (i) the
Indenture, dated as of September 22, 2005, among the Company, the guarantors
named therein and The Bank of New York Trust Company, N.A., as trustee (the
“6
¾%
Notes Indenture”)
and
(ii) the Indenture, dated as of April 5, 2004, between the Company and The
Bank
of New York Trust Company, N.A., as trustee (the “Convertible
Notes Indenture”
and,
together with the 6 ¾ Notes Indenture, the “Indentures”),
reflecting the amendments to such indentures consented to in the Debt Tender
Offers, which supplemental indentures shall become operative concurrently with
the Effective Time, and shall use its reasonable best efforts to cause the
trustees under the Indentures to promptly enter into such supplemental
indentures, as applicable. The Company shall provide, and shall cause its
Subsidiaries to, and shall use its reasonable best efforts to cause their
respective Representatives to, provide all cooperation requested by Parent
in
connection with the Debt Tender Offers. The closing of the
42
Debt
Tender Offers shall be conditioned on the occurrence of the Closing, and the
parties shall use their reasonable best efforts to cause the Debt Tender Offers
to close on the Closing Date. Concurrent with the Effective Time, and in
accordance with the terms of the Debt Tender Offers, Parent shall cause the
Surviving Corporation to accept for purchase and purchase the Notes properly
tendered and not properly withdrawn in the Debt Tender Offers and provide to
the
Surviving Corporation cash in an amount sufficient to fund such purchase,
including any applicable premiums, and all related fees and expenses. Parent
shall reimburse, or cause its Affiliates to reimburse, the Company for its
reasonable out-of-pocket fees and expenses (including any consent fees paid
but
only to the extent consented to by Parent) incurred pursuant to this Section
7.10. The Debt Tender Offers and other actions taken in connection therewith
shall be conducted in accordance with the terms of the applicable Indentures
and
all applicable rules and resolutions of the SEC and other applicable Laws.
Notwithstanding anything to the contrary contained in this Agreement, prior
to
the Effective Time, neither the Company nor any of its Subsidiaries shall be
required to (i) make any cash expenditures or (ii) take any action that could
obligate the Company or any of its Subsidiaries to repurchase any Notes or
incur
any additional obligations to the holders of the Notes prior to the consummation
of the Debt Tender Offers.
Section
7.11. Confidentiality
Agreements.
Parent acknowledges on behalf of its Affiliates and each investor in Parent
party to any Confidentiality Agreement or the confidentiality agreement dated
February 5, 2006, among SK, HBK, WLG and the Company that such Affiliates and
investors continue to be bound by such Confidentiality Agreements (including
any
“standstill” provisions therein), and the parties hereto acknowledge and agree
that this Agreement does not in any manner modify or limit the Company’s or such
Affiliate’s rights under such agreements. For purposes of Section 7.11 of this
Agreement, Parent acknowledges that it is an affiliate of WLG for purposes
of
the Registration Rights and Governance Agreement dated July 3, 2001 among,
inter
alia, the Company and WLG.
Section
7.12. Management.
In no event shall Parent or any of its Affiliates (which for purposes of this
Section shall be deemed to include each direct investor in Parent) enter into
any arrangements that are effective prior to the Closing with any member of
the
Company’s management or any other Company Employee (other than SK or HBK) on
terms that expressly prohibit or restrict such member of management or such
Company Employee from discussing, negotiating or entering into any arrangements
with any third party in connection with a transaction relating to the Company
or
its Subsidiaries or seek to do so.
Parent
shall cause its Affiliates to comply with the foregoing covenant.
Section
7.13. Vesting
of Company Equity Awards.
(a)
As
promptly as practicable (and in any event within 15 days from the Execution
Date), the Company shall take such actions as may be reasonably required to
irrevocably amend the terms of the Employee Equity Awards to provide that to
the
extent that a “change of control” (as defined in the applicable Company Stock
Plan or in any applicable agreement, notice or letter evidencing the grant
of an
Employee Equity Award) shall occur with respect to any Employee Equity Awards
as
a result of the consummation of the Merger, any such Employee Equity Awards
that
are unvested as of the Effective Time shall become fully vested (and, in the
case of Employee Options and Employee SARs, immediately exercisable in full)
and
all restrictions on such Employee Equity Awards shall lapse, in each case not
later than the earlier to occur of (i) the later of (A) the six-month
anniversary of the Closing and (B) January 1, 2007 and (ii) a holder's
Qualifying Termination (as defined in the applicable Company Stock Plan),
provided,
that
such amendments shall expressly be conditioned upon the consummation of the
Merger and the other transactions contemplated hereby and shall be of no effect
if this Agreement is terminated.
(b)
As
promptly as practicable (and in any event within 15 days from the Execution
Date), the Company shall take such actions as may be reasonably required to
irrevocably amend the terms of the Company Equity Awards to provide that to
the
extent that a “change of control” (as defined in the applicable Company Stock
Plan or in any applicable agreement, notice or letter evidencing the grant
of a
Company Equity Award) shall occur with respect to any Company Equity Awards
as a
result of the consummation of a Superior Proposal that results in the
termination of this Agreement, any such Company Equity Awards that are unvested
as of the effective time of such Superior Proposal (the “Superior
Proposal Effective Time”)
shall
become fully vested (and, in the case of Company Options and Company SARs,
immediately exercisable in full) and all restrictions on such Company Equity
Awards shall lapse, in each case not later than the earlier to occur
43
of
(i)
the expiration of the six-month period immediately following such Superior
Proposal Effective Time and (ii) a holder’s Qualifying Termination (as defined
in the applicable Company Stock Plan), provided that (A) such Company Equity
Awards are still outstanding at (and have not terminated prior to) the relevant
time, and were not terminated at the Superior Proposal Effective Time in
consideration for the payment of any amount required pursuant to the provisions
of the applicable Company Stock Plan (including Section 14(a)(ii) of the Company
2003 Stock Incentive Plan or the Company 2005 Stock Incentive Plan, as
applicable) or any applicable agreement, notice or letter evidencing the grant
of such Company Equity Award, (B) such Company Equity Awards have not yet become
fully vested or exercisable prior to the relevant time and (C) such amendments
shall expressly be conditioned upon the consummation of a Superior Proposal
that
results in the termination of this Agreement and shall be of no effect if such
Superior Proposal is not consummated.
CONDITIONS
TO THE MERGER
Section
8.1. Conditions
to the Obligations of Each Party.
The obligations of the Company, Parent and Merger Sub to consummate the Merger
are subject to the satisfaction of the following conditions:
(a)
Shareholder
Approval.
This
Agreement shall have been approved by the Requisite Shareholder
Vote.
(b)
Regulatory
Approval.
(i)
Approval of the Financing by The Central Bank of The Bahamas shall have been
obtained and (ii) all other required approvals of any Governmental Authority
(including any Gaming Authority) set forth on Annex A hereto shall have been
obtained or any applicable waiting period thereunder shall have been terminated
or shall have expired, in each case, without any requirement to take any action,
or agree to take any action, or agree to any conditions or restrictions in
connection with obtaining the foregoing that would be reasonably likely to
have
a Material Adverse Effect on the Company, and except, in the case of clause
(ii), if failure to obtain such approval or failure of such waiting period
to
terminate or expire would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on the Company.
(c)
No
Injunctions or Restraints; Illegality.
No
temporary restraining order, preliminary or permanent injunction or other
judgment or order issued by any court or agency of competent jurisdiction or
other Law (each, a “Restraint”)
shall
be in effect which prohibits, restrains or renders illegal the consummation
of
the Merger or which otherwise would be reasonably likely to have a Material
Adverse Effect on the Company (provided,
that
prior to asserting this condition, the party asserting this condition shall
have
used its reasonable best efforts (in the manner contemplated by
Section 7.2) to prevent the entry of any such Restraint and to appeal as
promptly as possible any judgment that may be entered).
44
Section
8.2. Conditions
to the Obligations of Parent and Merger Sub.
The
obligations of Parent and Merger Sub to consummate the Merger are subject to
the
satisfaction or valid waiver of the following further conditions:
(a)
Representations
and Warranties.
Subject
to the preamble to Article IV, the representations and warranties (i) set forth
in Section 4.5 shall be true and correct in all material respects as of the
date
of this Agreement and as of the Effective Time as if made at and as of each
of
such times and (ii) set forth in Article IV, other than those described in
clause (i) above, shall be true and correct (without giving effect to any
qualification as to “materiality” or “Material Adverse Effect” set forth
therein) as of the date of this Agreement and as of the date of the Effective
Time as if made at and as of each of such times (except for those which were
incapable of being true and correct as of the date of this Agreement due to
the
fact that this Agreement was not then in existence, in which case, such
representations and warranties shall be true and correct (without giving effect
to any qualification as to “materiality” or “Material Adverse Effect” set forth
therein) as of the Execution Date and as of the Effective Time as if made at
and
as of each of such times), except in the case of this clause (ii) where the
failure to be so true and correct, individually and in the aggregate, has not
had, and would not be reasonably likely to have, a Material Adverse Effect
on
the Company, provided
in each
case that representations made as of a specific date shall be required to be
so
true and correct subject to such qualifications as of such date only. Parent
and
Merger Sub shall have received a certificate signed by a senior officer of
the
Company attesting to the foregoing.
(b)
Performance
of Obligations of the Company.
The
Company shall have performed in all material respects all obligations, and
complied in all material respects with the agreements and covenants, required
to
be performed by or complied with by it hereunder. Parent and Merger Sub shall
have received a certificate signed by a senior officer of the Company attesting
to the foregoing.
(c)
Financing.
The
Debt Financing shall be available for borrowing on the Closing Date on the
terms
and conditions set forth in the Debt Financing Commitments, or upon terms and
conditions that are no less favorable, in the aggregate, to Parent and Merger
Sub (as determined in the reasonable judgment of Parent).
Section
8.3. Conditions
to the Obligations of the Company.
The obligation of the Company to consummate the Merger is subject to the
satisfaction or valid waiver of the following further conditions:
(a)
Representations
and Warranties.
The
representations and warranties of Parent and Merger Sub contained in this
Agreement that are qualified as to materiality shall be true and correct as
of
date of this Agreement and as of the Effective Time as if made at
45
and
as of
each of such times (except for those which were incapable of being true and
correct as of the date of this Agreement due to the fact that this Agreement,
the Financing Commitments or the Equity Rollover Commitments were not then
in
existence, in which case, such representations and warranties shall be true
and
correct as of the Execution Date and as of the Effective Time as if made at
and
as of each of such times) and those which are not so qualified shall be true
and
correct in all material respects as of date of this Agreement and as of the
Effective Time as if made at and as of such time (except for those which were
incapable of being true and correct as of the date of this Agreement due to
the
fact that this Agreement, the Financing Commitments or the Equity Rollover
Commitments were not then in existence, in which case, such representations
and
warranties shall be true and correct in all material respects as of the
Execution Date and as of the Effective Time as if made at and as of each of
such
times), provided
that
representations made as of a specific date shall be required to be true as
of
such date only. The Company shall have received a certificate signed by a senior
officer of Parent and Merger Sub attesting to the foregoing.
(b)
Performance
of Obligations of Parent and Merger Sub.
Each of
Parent and Merger Sub shall have performed in all material respects all
obligations, and complied in all material respects with the agreements and
covenants, required to be performed by or complied with by it hereunder. The
Company shall have received a certificate signed by a senior officer of Parent
and Merger Sub attesting to the foregoing.
TERMINATION
Section
9.1. Termination.
This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time (notwithstanding any prior approval of this
Agreement by the shareholders of the Company):
(a)
by mutual written consent of the Company, on the one hand, and Parent and Merger
Sub, on the other hand;
(b)
by
either
the Company or Parent:
(i)
if
the
Effective Time shall not have occurred on or before December 31, 2006 (the
“End
Date”)
unless
the failure of the Effective Time to occur by such date is principally the
result of, or caused by, the failure of the party seeking to exercise such
termination right to perform or observe any of the covenants or agreements
of
such party set forth in this Agreement;
(ii) if
any
Restraint having the effect set forth in Section 8.1(c) shall be in effect
and
shall have become final and nonappealable; provided,
however,
that
the right to terminate this Agreement pursuant to this Section 9.1(b)(ii) shall
not be available to any party whose breach of any provision of this Agreement
is
the principal cause of or resulted in the application or imposition of such
Restraint; or
(iii)
if
at the
Company Shareholder Meeting or any adjournment thereof at which this Agreement
has been voted upon, the Company shareholders fail to approve this Agreement
by
the Requisite Shareholder Vote;
(c)
by
the
Company, if a breach of any representation, warranty, covenant or agreement
on
the part of Parent or Merger Sub set forth in this Agreement shall have occurred
which would cause any of the conditions set forth in Sections 8.3(a) or (b)
not
to be satisfied, and such breach is incapable of being cured by the End Date;
provided,
however,
that
the Company is not then in material breach of this Agreement; or
46
(d)
by
Parent
or Merger Sub:
(i)
if
a
breach of any representation, warranty, covenant or agreement on the part of
the
Company set forth in this Agreement shall have occurred which would cause any
of
the conditions set forth in Section 8.2(a) or (b) not to be satisfied, and
such
breach is incapable of being cured by the End Date; provided,
however,
that
neither Parent nor Merger Sub is then in material breach of this Agreement;
(ii)
prior
to
the obtaining of the Requisite Shareholder Vote, if the Board of Directors
of
the Company or any committee thereof (A) shall have effected a Recommendation
Withdrawal, or publicly proposed to effect a Recommendation Withdrawal, or
(B)
shall have approved or recommended to the shareholders of the Company a Company
Acquisition Proposal other than the Merger, or shall have resolved to effect
the
foregoing; or
(iii)
if
the
Company shall have willfully and materially breached the terms of Section 7.4
of
this Agreement in any respect adverse to Parent and Merger Sub.
Section
9.2. Termination
Fee.
(a)
In
the
event that this Agreement is terminated by Parent pursuant to Section
9.1(d)(ii)(B) or Section 9.1(d)(iii), then the Company shall pay to Parent
the
Termination Fee as promptly as possible (but in any event within four Business
Days) following termination of this Agreement.
(b)
In
the
event that this Agreement is terminated by Parent pursuant to Section
9.1(d)(ii)(A) and, at any time after the date of this Agreement and prior to
the
event giving rise to Parent’s right to terminate this Agreement under Section
9.1(d)(ii)(A), a Company Acquisition Proposal shall have been publicly announced
or otherwise communicated or made known to any executive officer or director
of
the Company (or any person shall have publicly announced, or communicated or
made known a bona fide intention, whether or not conditional, to make a Company
Acquisition Proposal), then the Company shall pay to Parent the Termination
Fee
as promptly as possible (but in any event within four Business Days) following
termination of this Agreement.
(c)
In
the
event that this Agreement is terminated by Parent or the Company pursuant to
Section 9.1(b)(iii) under circumstances in which the obligations under the
Voting Agreement to vote in favor of the Merger Agreement have been satisfied
in
all material respects, and, at any time after the date of this Agreement and
prior to the Company Shareholder Meeting, a Company Acquisition Proposal shall
have been publicly announced or otherwise communicated or made known to any
executive officer or director of the Company (or any person shall have publicly
announced, or communicated or made known a bona fide intention, whether or
not
conditional, to make a Company Acquisition Proposal) prior to the Company
Shareholder Meeting, and, if within 12 months after such termination, the
Company or any of its Subsidiaries enters into a definitive agreement with
respect to, or consummates, any Company Acquisition Proposal (whether or not
the
same as that originally announced or consummated), then the Company shall pay
to
Parent the Termination Fee, less the amount of any Parent Expenses previously
paid to Parent by the Company, on the date of such execution or consummation
(provided
that
solely for purposes of this Section 9.2(c), the term “Company Acquisition
Proposal” shall have the meaning set forth in the definition of Company
Acquisition Proposal contained in Section 7.4 except that all references to
30%
shall be deemed to be references to 50%).
47
(d)
In
the
event that this Agreement is terminated by Parent or the Company pursuant to
Section 9.1(b)(iii) (or could have been terminated under such section) under
circumstances in which (i) the obligations under the Voting Agreement to vote
in
favor of the Merger Agreement have been satisfied in all material respects
and
(ii) the Termination Fee is not then payable pursuant to this Section 9.2,
then
the Company shall pay to Parent as promptly as possible (but in any event within
four Business Days) following receipt of an invoice therefor all of Parent’s and
Merger Sub’s actual and reasonably documented out-of-pocket fees and expenses
(including reasonable legal fees and expenses) actually incurred by Parent,
Merger Sub and their respective Affiliates on or prior to the termination of
this Agreement in connection with the transactions contemplated by this
Agreement, which amount shall not be greater than $12,000,000 (“Parent
Expenses”);
provided
that the
existence of circumstances which could require the Termination Fee subsequently
to become payable pursuant to Section 9.2(c) shall not relieve the Company
of
its obligations to pay the Parent Expenses pursuant to this Section 9.2(d);
and
provided, further
that the
payment by the Company of Parent Expenses pursuant to this Section 9.2(d) shall
not relieve the Company of any subsequent obligation to pay the Termination
Fee
pursuant to Section 9.2(c) except to the extent indicated in such Section
9.2(c).
(e)
Any
amount that becomes payable pursuant to Section 9.2(a), 9.2(b), 9.2(c) or 9.2(d)
shall be paid by wire transfer of immediately available funds to an account
designated by Parent.
(f)
The
Company acknowledges that the agreements contained in this Section 9.2 are
an
integral part of the transactions contemplated by this Agreement, that without
these agreements Parent and Merger Sub would not have entered into this
Agreement, and that any amounts payable pursuant to this Section 9.2 do not
constitute a penalty. If the Company fails to pay Parent any amounts due to
Parent pursuant to this Section 9.2 within the time periods specified in this
Section 9.2, the Company shall pay the costs and expenses (including reasonable
legal fees and expenses) incurred by Parent in connection with any action,
including the filing of any lawsuit, taken to collect payment of such amounts,
together with interest on such unpaid amounts at the prime lending rate
prevailing during such period as published in The
Wall Street Journal,
calculated on a daily basis from the date such amounts were required to be
paid
until the date of actual payment.
Section
9.3. Effect
of Termination.
If this Agreement is terminated pursuant to Section 9.1, this Agreement shall
forthwith become null and void and there shall be no liability or obligation
on
the part of the Company, Parent, Merger Sub or their respective Subsidiaries
or
Affiliates hereunder, except (i) Sections 7.3(a)(last sentence), 7.11, 7.12,
9.2, 9.3, 10.1, 10.3, 10.6, 10.11 and 10.13 will survive the termination hereof
and (ii) with respect to any liabilities for Damages incurred or suffered as
a
result of the willful and material breach by any other party of any of its
representations, warranties, covenants or other agreements set forth in this
Agreement.
48
MISCELLANEOUS
Section
10.1. Notices.
All notices, requests and other communications to any part hereunder shall
be in
writing (including facsimile or similar writing) and shall be
given:
if
to
Parent or Merger Sub, to:
K-Two
Holdco Limited
Coral
Towers
Paradise
Island
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax:
▇▇
▇▇▇ ▇▇▇ ▇▇▇▇
with
copies (which shall not constitute notice) to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
if
to the
Company, to:
▇▇▇▇▇▇▇
International Limited
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ -- ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Cravath,
Swaine & ▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇,
Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
49
or
such
other address or facsimile number as such party may hereafter specify by notice
to the other parties hereto. Each such notice, request or other communication
shall be effective (i) if given by telecopier, when such telecopy is transmitted
to the facsimile number specified above and electronic confirmation of
transmission is received or (ii) if given by any other means, when delivered
at
the address specified in this Section 10.1.
Section
10.2. Survival
of Representations and Warranties.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for those covenants and agreements contained
herein and therein which by their terms apply in whole or in part after the
Effective Time and then only to such extent.
Section
10.3. Expenses.
Except as otherwise expressly provided in Sections 7.9, 7.10 and 9.2, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section
10.4. Amendment.
This Agreement may be amended by the parties hereto by action taken by or on
behalf of their respective Boards of Directors (in the case of the Company,
acting through the Special Committee, if such committee still exists, or
otherwise by resolution of a majority of its Disinterested Directors) at any
time prior to the Effective Time, whether before or after approval of this
Agreement by the Company shareholders; provided,
however,
that,
after approval of this Agreement by the Company shareholders, no amendment
may
be made which under applicable Bahamian Law requires the further approval of
the
shareholders of the Company without such further approval. This Agreement may
not be amended except by an instrument in writing signed by the parties
hereto.
Section
10.5. Waiver.
At any time prior to the Effective Time, any party hereto may (i) extend the
time for the performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) subject to the requirements of applicable law, waive compliance with
any
of the agreements or conditions for the benefit of such party contained herein,
provided,
that
for so long as the Special Committee exists, the Company may not take any such
action unless previously authorized by the Special Committee, or otherwise
such
action shall be taken by resolution of a majority of its Disinterested
Directors. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby. The
failure of any party to assert any rights or remedies shall not constitute
a
waiver of such rights or remedies.
Section
10.6. Successors
and Assigns.
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, provided
that
no party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties hereto
(and any purported assignment without such consent shall be void and without
effect), except that Parent may assign all or any of its rights and obligations
hereunder to any direct or indirect wholly-owned Subsidiary of Parent;
provided,
however,
that no
such assignment shall relieve the assigning party of its obligations hereunder.
50
Section
10.7. Governing
Law.
This Agreement shall be governed by and construed in accordance with the laws
of
the State of Delaware (except that the IBCA shall apply to the Merger and the
Laws of the Commonwealth of The Bahamas shall apply to the fiduciary duties
and
responsibilities of the Board of Directors of the Company in connection with
the
Merger and the other transactions contemplated by this Agreement).
Section
10.8. Counterparts;
Effectiveness; Third Party Beneficiaries.
This Agreement may be executed by facsimile signatures and in any number of
counterparts, each of which shall be an original, with the same effect as if
the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective only when actually signed by each party hereto and each
such party has received counterparts hereof signed by all of the other parties
hereto. No provision of this Agreement is intended to or shall confer upon
any
Person other than the parties hereto any rights or remedies hereunder or with
respect hereto, except as otherwise expressly provided in Section 7.5.
Notwithstanding the immediately preceding sentence, following the Effective
Time
the provisions of Article II shall be enforceable by holders of Ordinary
Shares, Company Options, Company SARs or Company RSUs.
Section
10.9. Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by virtue of any Law, or due to any public policy,
all other conditions and provisions of this Agreement shall nevertheless remain
in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner so that
the
transactions contemplated hereby are fulfilled to the extent
possible.
Section
10.10. Entire
Agreement.
This Agreement, together with the Company Disclosure Letter and the Voting
Agreement, constitute the entire agreement of the parties hereto with respect
to
its subject matter and supersedes all oral or written prior or contemporaneous
agreements and understandings among the parties with respect to such subject
matter. None of the parties shall be liable or bound to any other party in
any
manner by any representations, warranties or covenants relating to such subject
matter hereof except as specifically set forth herein, in the Company Disclosure
Letter or the Voting Agreement.
Section
10.11. Jurisdiction.
(a) Each
party irrevocably submits to the jurisdiction of (i) any Delaware State court,
and (ii) any Federal court of the United States sitting in the State of
Delaware, solely for the purposes of any suit, action or other proceeding
between any of the parties hereto arising out of this Agreement or any
transaction contemplated hereby. Each party agrees to commence any suit, action
or proceeding relating hereto either in any Federal court of the United States
sitting in the State of Delaware or, if such suit, action or other proceeding
may not be brought
51
in
such
court for reasons of subject matter jurisdiction, in any Delaware State court.
Each party irrevocably and unconditionally waives any objection to the laying
of
venue of any suit, action or proceeding between any of the parties hereto
arising out of this Agreement or any transaction contemplated hereby in (i)
any
Delaware State court, and (ii) any Federal court of the United States sitting
in
the State of Delaware, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such suit, action
or
proceeding brought in any such court has been brought in an inconvenient forum.
Each party further irrevocably consents to the service of process out of any
of
the aforementioned courts in any such suit, action or other proceeding by the
mailing of copies thereof by registered mail to such party at its address set
forth in this Agreement, such service of process to be effective upon
acknowledgment of receipt of such registered mail; provided that nothing in
this
Section 10.11 shall affect the right of any party to serve legal process in
any
other manner permitted by law. The consent to jurisdiction set forth in this
Section 10.11 shall not constitute a general consent to service of process
in
the State of Delaware and shall have no effect for any purpose except as
provided in this Section 10.11. The parties agree that a final judgment in
any
such suit, action or proceeding shall be conclusive and may be enforced in
other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b)
EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH
PARTY
MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN
THIS SECTION 10.11.
(c)
Parent
and Merger Sub each (i) hereby appoints The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, as its
authorized agent (the “Authorized
Agent”)
upon
whom process may be served in any suit, action or proceeding arising out of
or
based upon this Agreement or the transactions contemplated hereby which may
be
instituted in any Delaware State court or any Federal court of the United States
sitting in the State of Delaware and (ii) agrees that service of process upon
such Authorized Agent shall be deemed in every respect effective service of
process upon Parent or Merger Sub, as applicable, in any such suit or
proceeding. Parent and Merger Sub each hereby represents and warrants that
the
Authorized Agent has accepted such appointment and has agreed to act as such
agent for service of process, and each of Parent and Merger Sub agrees to take
any and all action, including the filing of any and all documents that may
be
necessary to continue such appointment in full force and effect as
aforesaid.
(d)
The
Company (i) hereby appoints ▇▇▇▇▇▇▇
International North America, Inc.,
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇,
as its
authorized agent upon whom process may be served in any suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby which may be instituted in any Delaware State court or
any
Federal court of the
▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇ sitting in the State of Delaware and (ii) agrees that service of process
upon KINA shall be deemed in every respect effective service of process upon
Parent or Merger Sub, as applicable, in any such suit or proceeding. The Company
hereby represents and warrants that KINA has accepted such appointment and
has
agreed to act as such agent for service of process, and the Company agrees
to
take any and all action, including the filing of any and all documents that
may
be necessary to continue such appointment in full force and effect as
aforesaid.
Section
10.12. Authorship.
The parties agree that the terms and language of this Agreement were the result
of negotiations between the parties and their respective advisors and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against any party. Any controversy over construction of this
Agreement shall be decided without regard to events of authorship or
negotiation.
Section
10.13. Remedies.
(a)
Notwithstanding
any other provision of this Agreement (including Section 9.2 and
Section 9.3), the parties hereto agree that irreparable damage would occur,
damages would be difficult to determine and would be an insufficient remedy
and
no other adequate remedy would exist at law or in equity, in each case in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached (or any party
hereto threatens such a breach). It is accordingly agreed that in the event
of a
breach or threatened breach of this Agreement, the other parties hereto shall
be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement, in
addition to any other remedy to which they are entitled at law or in equity.
Each party hereto irrevocably waives any defenses based on adequacy of any
other
remedy, whether at law or in equity, that might be asserted as a bar to the
remedy of specific performance of any of the terms or provisions hereof or
injunctive relief in any action brought therefor by any other party
hereto.
(b)
Notwithstanding
any other provision of this Agreement, Parent and Merger Sub shall have no
right
to seek monetary damages against the Company for breaches of representations
and
warranties contained in Article IV of this Agreement to the extent that any
of
the certificates delivered to the Company by SK, HBK, Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
Mr.
▇▇▇▇ ▇▇▇▇▇▇▇ as of the date hereof were false in any respect related to the
representation or warranty which was breached.
Section
10.14. Termination
of Other Agreements.
The parties hereto acknowledge and agree that the Cooperation Agreement, dated
as of March 20, 2006, among the Company, HBK and SK, and the letter, dated
as of
March 20, 2006, from Istithmar to the Company, shall terminate concurrently
with
the execution and delivery of this Agreement by each of the parties hereto
and
shall thereafter be of no further force or effect and no person shall have
any
rights or obligations with respect thereto.
[signature
page follows]
53
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the day and year
first
written above.
|
▇▇▇▇▇▇▇
INTERNATIONAL LIMITED,
|
|
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ |
|
Name:
▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
Director
|
|
|
K-TWO
HOLDCO LIMITED,
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Title:
President
|
|
|
K-TWO
SUBCO LIMITED,
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Title:
President
|
|
54
Annex
A
Gaming
Board, Commonwealth of The Bahamas (PEL Casino License) and the approval of
any
directors of the Company who will remain directors of the Surviving Corporation
who have not been previously vetted and approved by the Bahamas Gaming Authority
(i.e., ▇▇▇▇▇▇▇ ▇▇▇▇).