Exhibit 10.2
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VOTING AND PROFIT SHARING AGREEMENT
BY
AND
AMONG
HARVEYS ACQUISITION CORPORATION
AND
THE INDIVIDUALS AND ENTITIES SIGNATORY HERETO
DATED AS OF FEBRUARY 1, 1998
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VOTING AND PROFIT SHARING AGREEMENT
VOTING AND PROFIT SHARING AGREEMENT (this "AGREEMENT"), dated as of
February 1, 1998, by and among Harveys Acquisition Corporation, a Nevada
corporation (together with its assignees or designees,"ACQ CORP"), the
Ledbetter Marital Trust (the "LEDBETTER MARITAL TRUST"), Kirk B. Ledbetter,
Jessica L. Ledbetter and William B. Ledbetter (the Ledbetter Marital Trust,
Kirk B. Ledbetter, Jessica L. Ledbetter and William B. Ledbetter hereinafter
being collectively referred to as the "SELLERS").
W I T N E S S E T H
WHEREAS, concurrently with the execution and delivery of this
Agreement, Harveys Casino Resorts, a Nevada corporation ("TARGET"), is
entering into an Agreement and Plan of Merger dated as of the date hereof
(the "MERGER AGREEMENT") with Acq Corp, pursuant to which Acq Corp shall
merge with and into Target (the "MERGER"), upon the terms and conditions set
forth therein;
WHEREAS, each Seller severally desires that the Acq Corp and Target
enter into the Merger Agreement;
WHEREAS, the Ledbetter Marital Trust established under the will of
Beverlee A. Ledbetter owns beneficially and of record 2,924,392 shares of
common stock, par value $.01 per share, of Target (the "COMMON STOCK"), which
shares represent approximately 29.5% of the issued and outstanding shares of
Common Stock, Kirk B. Ledbetter owns beneficially and of record 618,600
shares of Common Stock, which shares represent approximately 6.2% of the
issued and outstanding shares of Common Stock, Jessica L. Ledbetter owns
beneficially and of record 506,196 shares of Common Stock, which shares
represent approximately 5.1% of the issued and outstanding shares of Common
Stock, and William B. Ledbetter owns beneficially and of record 50 shares of
Common Stock, which shares represent less than 1.0% of the issued and
outstanding shares of Common Stock (such shares of Common Stock owned by the
Sellers being the "SHARES"); and
WHEREAS, as a condition to its willingness to enter into the
Merger, Acq Corp has requested that the Sellers enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, and for other
good
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and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
Certain capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Merger Agreement. All other
capitalized terms used but not otherwise defined herein or in the Merger
Agreement have the meanings set forth below. Unless the context otherwise
requires, such terms shall include the singular and plural and the
conjunctive and disjunctive forms of the terms defined.
"FAIR MARKET VALUE" means:
(a) with respect to a security listed on a domestic exchange or
quoted in the Nasdaq National Market, the Nasdaq SmallCap Market or the
domestic over-the-counter market,
(i) the average of the closing prices of the
security's sales on all domestic exchanges on which the security may at
the time be listed, or
(ii) if there shall have been no sales on any such
exchange on any day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day, or
(iii) if on any day the security is not so listed, the
average of the representative bid and asked prices quoted in the Nasdaq
National Market or Nasdaq SmallCap Market as of 3:30 P.M., Eastern time,
or
(iv) if on any day the security is not quoted in the
Nasdaq National Market or Nasdaq SmallCap Market, the average of the high
and low bid and asked prices on such day in the domestic over-the-counter
market as reported by the National Quotation Bureau, Incorporated, or any
similar successor organization,
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in each such case averaged over a period of ten (10) consecutive trading
days immediately prior to the day as of which the "Fair Market Value" is
being determined,
(b) with respect to any other security, the value of the
security as mutually agreed by Acq Corp and the Sellers, PROVIDED, HOWEVER,
that if Acq Corp and the Sellers are unable to mutually agree upon such
value, the members of the Board of Directors of Target who are not
Affiliates of Acq Corp or any of the Sellers (the "INDEPENDENT DIRECTORS")
shall select an Independent Financial Expert who shall determine the value
of such security.
(c) with respect to any other consideration, the value of the
consideration as mutually agreed by Acq Corp and the Sellers, PROVIDED,
HOWEVER, that if Acq Corp and the Sellers are unable to mutually agree upon
such value, the Independent Directors shall select an Independent Financial
Expert who shall determine the value of such security.
"INDEPENDENT FINANCIAL EXPERT" means a nationally recognized
investment banking firm selected by the Independent Directors (a) that has
not been, and at the time it is called upon to serve as an Independent
Financial Expert under this Agreement is not (and none of whose directors,
officers, employees or Affiliates is) a promoter, director or officer of the
Target, that has not been retained by any of the Sellers, the Target or any
of their respective Affiliates for any purpose within the preceding twelve
months, and that, in the reasonable judgment of the Independent Directors,
is otherwise qualified to serve as an independent financial advisor. Any
such person may receive customary compensation and indemnification by the
Target for opinions or services it provides as an Independent Financial
Expert.
"NEVADA ACT" means the Nevada Gaming Control Act, as amended, and
the rules and regulations promulgated thereunder.
"NON-MERGER SALE" has the meaning set forth in Section 4.07 hereto.
"PROFIT SHARING TERMINATION DATE" has the meaning set forth in
Section 4.07 hereto.
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ARTICLE II
VOTING AGREEMENTS
SECTION 2.01. STOCKHOLDER MEETINGS. Subject to the provisions of
Article VI, each Seller agrees that at any meeting of stockholders of Target
called to vote upon the Merger or the Merger Agreement, or at any adjournment
thereof, or in any other circumstances upon which a vote, consent or other
approval of the stockholders of Target with respect to the Merger, the Merger
Agreement or any of the other transactions contemplated thereby or hereby is
sought, such Seller shall cause its Shares to be present for quorum purposes
and to vote (or caused to be voted) its Shares in favor of the terms thereof
and each of the other transactions contemplated by the Transaction and this
Agreement and any actions required in furtherance thereof and hereof.
SECTION 2.02. COMPETING TRANSACTION. Subject to the provisions of
Article VI, each Seller agrees that at any meeting of stockholders of Target,
or at any adjournment thereof, or in any other circumstances upon which their
vote, consent or other approval is sought, such Seller shall vote (or cause
to be voted) its Shares against (i) any Takeover Proposal and (ii) any
amendment of Target's Restated Articles of Incorporation or Bylaws or other
proposal or transaction involving Target or any of its subsidiaries which
amendment or other proposal or transaction would in any manner impede,
interfere with, materially delay, frustrate, prevent or nullify or result in
a breach of any covenant, representation or warranty or any other obligation
or agreement of Target or any Seller under or with respect to, the Merger,
the Merger Agreement or any of the other transactions contemplated by the
Merger Agreement or by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Sellers. Each
of the Sellers severally and not jointly represents and warrants to Acq Corp
as follows:
(a) ORGANIZATION AND STANDING. Such Seller has all requisite
power and authority to enter into and perform its obligations under this
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Agreement and, if such Seller is not a natural person, such Seller is duly
organized, validly existing and in good standing under the laws of its
state of organization.
(b) AUTHORITY. The execution and delivery of this Agreement,
and the performance by such Seller of its obligations hereunder, have been
duly authorized by all necessary action on the part of such Seller. This
Agreement has been duly executed and delivered by such Seller and, assuming
the due execution and delivery hereof by Acq Corp and assuming that
approval of this Agreement by Target remains effective, this Agreement
constitutes a valid and binding obligation of such Seller, enforceable
against such Seller in accordance with its terms.
(c) THE SHARES. Such Seller is the record and beneficial owner
of, and has good and valid title to, the number of Shares recited to be
owned by it in the recitals hereof, free and clear of all Liens except as
indicated in Schedule 3.01(c) (i) and in Section 4.02 hereof. Except for
this Agreement and as indicated in Schedule 3.01(c) (i) and in Section 4.02
hereof, there are no outstanding warrants, subscriptions, rights (including
preemptive rights), options, calls, commitments or other agreements or
Liens to encumber, purchase or acquire any of the Shares of such Seller or
securities convertible into or exchangeable for the Shares of such Seller.
Except as indicated in Schedule 3.01(c)(ii), neither such Seller nor any of
its affiliates or associates (as such terms are defined in Rule 12b-2
promulgated under the Exchange Act) holds either of record or beneficially
any securities, capital stock, warrants, subscriptions, rights (including
preemptive rights), options, calls, commitments or other instruments of
Target or any of Target's direct or indirect subsidiaries other than such
Seller's Shares.
(d) NO CONFLICT. The execution of this Agreement and the
consummation of the transactions contemplated hereby will not require
notice to, or the consent of, any party to any Contract to which such
Seller is a party or by which it is bound, or the consent, approval, order
or authorization of, or the registration, declaration or filing with, any
governmental authority, except for those (i) required under the HSR Act, if
any; (ii) required by any Gaming Authority, including approvals under the
Nevada Act; and (iii) pertaining to approval by the Target Board of
Directors (which the Sellers represent has been granted). Assuming that
the notices, consents and approvals referred to in the preceding sentence
have been given, made or ob-
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tained and remain effective, the execution, delivery and performance by
such Seller of this Agreement and the consummation of the transactions
contemplated hereby will not (i) violate any Laws, (ii) result in a
breach or violation of any provision of, constitute a default under, or
result in the termination of, or an acceleration of indebtedness or
creation of any Lien under, any contract to which such Seller is a party
or by which it is bound or (iii) conflict with or violate any provision
of the organizational or similar documents of such Seller.
(e) MERGER AGREEMENT REPRESENTATIONS. Such Seller has reviewed
the provisions of Article IV of the Merger Agreement (including the
schedules thereto) and, based upon such review, nothing has come to such
Seller's attention that would cause such Seller to believe that the
representations and warranties of Target made therein are not true,
complete and correct in all material respects as of the time made. The
parties hereto agree that this Section 3.01(e) shall not survive the
Closing Date.
(f) BROKERS, FINDERS, ETC. No broker, investment banker,
financial advisor, finder or other person (other than DLJ in connection
with the Merger, the fees and expenses of which are not the responsibility
of Acq Corp) is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of the Sellers.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF ACQ CORP. Acq Corp
hereby represents and warrants to each of the Sellers as follows:
(a) ORGANIZATION AND STANDING. Acq Corp is duly organized,
validly existing and in good standing under the laws of its state of
incorporation, and has all requisite power and authority to enter into and
perform its obligations under this Agreement.
(b) AUTHORITY. The execution and delivery of this Agreement,
and the performance by Acq Corp of its obligations hereunder, have been
duly authorized by all necessary action on the part of Acq Corp. This
Agreement has been duly executed and delivered on behalf of Acq Corp and,
assuming the due execution and delivery hereof by the Sellers and assuming
that approval of this Agreement by Target remains effective, this Agreement
constitutes a valid and binding obligation of Acq Corp, enforceable against
Acq Corp in accordance with its terms.
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(c) NO CONFLICT. The execution of this Agreement and the
consummation of the transactions contemplated hereby will not require
notice to, or the consent of, any party to any Contract to which Acq Corp
or any of its affiliates is a party or by which any of them is bound, or
the consent, approval, order or authorization of, or the registration,
declaration or filing with, any governmental authority, except for (i)
those required under the HSR Act, if any, (ii) approvals, as necessary, by
any Gaming Authority, including approvals under the Nevada Act, (iii)
approval by the Target Board of Directors (which the Sellers represent has
been granted); and (iv) as set forth on Schedule 3.02(c). Assuming that
the notices, consents and approvals referred to in the preceding sentence
have been given, made or obtained and remain effective, the execution,
delivery and performance by Acq Corp of this Agreement and the consummation
of the transactions contemplated hereby will not (i) violate any Laws, (ii)
result in a breach or violation of any provision of, or constitute a
default under, any contract to which Acq Corp is a party or by which it is
bound or (iii) conflict with any provision of the articles of incorporation
or bylaws of Acq Corp.
ARTICLE IV
COVENANTS
SECTION 4.01. NO SOLICITATION.
(a) Each Seller agrees that it shall not, nor shall it authorize
or permit any Affiliate, agent, partner or employee of, or any investment
banker, attorney or other advisor or representative of, such Seller to,
directly or indirectly, (i) solicit or initiate, or encourage any inquiries
regarding or the submission of, any Takeover Proposal (including without
limitation any proposal or offer to Target's stockholders) or (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to
facilitate the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Takeover Proposal; PROVIDED, HOWEVER, that it
is understood that this Section 4.01(a) will not be deemed to have been
violated if in response to an unsolicited inquiry, the Seller states solely
that he or she is subject to the provisions of this Agreement, and PROVIDED
FURTHER, that this Section 4.01(a) and the following Section
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4.01(b) shall not be deemed to have been violated as a result of any
actions taken by such Seller in his or her capacity as an officer or
director of Target (although Acq Corp reserves all rights and remedies it
may have other than pursuant to this Agreement in respect of conduct of
the sort covered by the foregoing further proviso).
(b) Each Seller agrees that it shall not enter into any
agreement with respect to any Takeover Proposal.
SECTION 4.02. NO TRANSFER; NO INCONSISTENT ARRANGEMENTS. Each
Seller agrees that it shall not (including by way of any gift, sale, pledge
or other disposition, including without limitation in connection with
foreclosures by lenders secured by pledges of Shares) transfer or pledge, or
consent to the transfer or pledge of, any or all of the Shares owned by it or
of any interest therein, enter into any contract, option or other agreement
or understanding with respect to any such transfer of any such Shares, or any
interest therein, grant any proxy, power-of-attorney or other authorization
in or with respect to any such Shares, deposit any such Shares into a voting
trust or enter into a voting agreement or arrangement with respect to any
such Shares or take any action that would in any way restrict, limit or
interfere or in any way be inconsistent with the performance of its
obligations hereunder or the transactions contemplated hereby or by the
Merger Agreement. Notwithstanding the foregoing, after the later to occur of
(i) June 30, 1998 and (ii) approval and adoption of the Merger Agreement by
the affirmative vote of holders of at least two-thirds of all shares of
Common Stock entitled to vote thereon, if the Closing has not occurred and no
Seller is in breach hereof, the Sellers, collectively, or any of them, may in
the aggregate (subject to the next following sentence) (i) transfer up to
100,000 Shares in open market sales pursuant to Rule 144 under the Securities
Act of 1933, as amended, and (ii) transfer up to 200,000 Shares pursuant to
pledge arrangements securing bona fide commercial loans, PROVIDED that the
terms of all such pledges shall not prohibit the performance by the Sellers
of their obligations under Section 4.07 hereof with respect to such pledged
Shares or otherwise. In the case of any transfers pursuant to clause (i) of
the immediately preceding sentence, the number of Shares permitted to be so
transferred shall be reduced by the percentage equal to the difference
between 100% and the percentage obtained by dividing the number of Shares
transferred pursuant to clause (ii) of the immediately preceding sentence by
200,000, and in the case of any transfers pursuant to clause (ii) of the
immediately preceding sentence, the number of Shares permitted to be so
transferred shall be reduced by the percentage equal to the difference
between
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100% and the percentage obtained by dividing the number of Shares transferred
pursuant to clause (i) of the immediately preceding sentence by 100,000.
SECTION 4.03. FURTHER ASSURANCES. From time to time, whether
before, at, or after the Closing, each party hereto agrees to execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates and other documents, and to take such other action, as may be
necessary or advisable in order to carry out the terms and provisions of this
Agreement and the transactions contemplated hereby (including voting the
Shares in favor of any such transaction) or to cause the elimination of any
circumstance that would cause a condition under Article V hereof not to be
satisfied on the Closing Date.
SECTION 4.04. EXPENSES. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such fees or expenses, whether or not the
Merger is consummated.
SECTION 4.05. PUBLICITY. Each Seller and Acq Corp agree that,
prior to the Closing, no public release or announcement concerning this
Agreement shall be issued by any such party without the prior written consent
(which consent shall not be unreasonably withheld) of the other parties
hereto, except as such release or announcement may be required by law (in
which event the other parties hereto shall have the right to comment promptly
on the form and content of the disclosure).
SECTION 4.06. NOTICE OF CERTAIN EVENTS. Acq Corp and each Seller
agrees to notify each other party hereto promptly of (a) any event or
condition that, with or without notice or lapse of time, would or could
reasonably be expected to cause any of the representations and warranties
made by such party herein to be no longer complete and accurate as of any
date on or before the Closing Date, or (b) any failure, with or without
notice or lapse of time, on the part of such party to comply with any of the
covenants or agreements on its part contained herein at any time on or before
the Closing Date.
SECTION 4.07. EXCESS PROCEEDS. Each of the Sellers hereby
severally agrees to pay to Acq Corp an amount equal to the product of 62.5%
of the amount, if any, by which the Fair Market Value of the gross proceeds
per Share from any sale, transfer or other disposition (including without
limitation to Acq Corp or an affiliate thereof) of its Shares (a "NON-MERGER
SALE") exceeds the sum of (x) $28.00 plus (y) any additional consideration
that becomes payable under Section 3.01(c) of
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the Merger Agreement as in effect on the date hereof, and the number of
Shares so sold, transferred or otherwise disposed of by such Seller in any
Non-Merger Sale, if such Non-Merger Sale (x) occurs on or prior to the date
(the "PROFIT SHARING TERMINATION DATE") which is 12 months subsequent to the
date of the termination of the Merger Agreement under circumstances pursuant
to which Acq Corp is entitled to a Termination Fee under Section 7.07(b)
thereof or (y) is effected pursuant to an agreement or understanding, oral or
written, which is entered into, or with respect to which any agreement in
principle is reached, on or prior to the Profit Sharing Termination Date.
The Sellers shall make the payment referenced herein within two business days
of receipt of such proceeds.
ARTICLE V
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
The obligation of each of the Sellers pursuant to Article II shall
be subject to the satisfaction or waiver on the Closing Date of each of the
following conditions precedent:
SECTION 5.01. NO INJUNCTIONS OR RESTRAINTS. No temporary
restraining order or preliminary or permanent injunction of any court or
administrative agency of competent jurisdiction prohibiting the transactions
contemplated by this Agreement shall be in effect.
SECTION 5.02. NO VIOLATION OF LAW. The performance of the
obligations of each of the Sellers pursuant to Article II shall not
constitute a violation of any Laws.
SECTION 5.03. REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Acq Corp set forth in this Agreement shall be true and
correct in all material respects on and as of the Closing Date, as though
made on and as of the Closing Date, except as otherwise contemplated by this
Agreement.
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ARTICLE VI
TERMINATION AND AMENDMENT
SECTION 6.01. TERMINATION. This Agreement shall terminate
without any further action on the part of Acq Corp or any of the Sellers (i)
if the Closing has occurred, (ii) if the Merger has been consummated in
accordance with the terms of the Merger Agreement, (iii) if the Merger
Agreement has been terminated under circumstances pursuant to which Acq Corp
is entitled to a Termination Fee under Section 7.07(b) thereof or (iv) if, as
of the Applicable Date (as defined in the next following sentence) the
Closing shall not have occurred. The "Applicable Date" shall mean February
1, 1999; PROVIDED, HOWEVER, in the event that Target and Acq Corp shall have
received from any responsible individual of each Gaming Authority (i) the
approval of which is required to be obtained to permit Acq Corp to consummate
the Merger and (ii) which has not prior to February 1, 1999 finally
determined whether such approval shall be granted, reasonable assurances
(written or oral) that a hearing is scheduled or can reasonably be expected
to be scheduled on or prior to April 1, 1999, then, in such event, the
Applicable Date shall mean April 1, 1999.
SECTION 6.02. EFFECT OF TERMINATION. In the event this Agreement
shall have been terminated in accordance with Section 6.01 of this Agreement,
this Agreement shall forthwith become void and have no effect, except (i) to
the extent such termination results from a breach by any of the parties
hereto of any of its representations, warranties or obligations hereunder (in
which case such breaching party shall be liable for all damages allowable at
law and any relief available in equity), (ii) as otherwise set forth in any
written termination agreement, if any, and (iii) that Section 4.07 shall
survive the termination of this Agreement.
SECTION 6.03. AMENDMENT. This Agreement and the Schedules and
Exhibits hereto may not be amended except by an instrument or instruments in
writing signed and delivered on behalf of each of the parties hereto. At any
time prior to the Closing Date, any party hereto which is entitled to the
benefits hereof may (a) extend the time for the performance of any of the
obligations or other acts of any other party, (b) waive any inaccuracy in the
representations and warranties of any other party contained herein, in any
Schedule and Exhibit hereto, or in any document delivered pursuant hereto,
and (c), subject to applicable law, waive compliance with any of the
agreements of any other party hereto or any conditions contained herein. Any
agreement on the part of any of the parties hereto to any such extension or
waiver (i) shall be valid only if set forth in an instrument in writing
signed and delivered on
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behalf of each such party, and (ii) shall not be construed as a waiver or
extension of any subsequent breach or time for performance hereunder.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. NOTICES. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Acq Corp, to:
c/o Colony Capital, Inc.
1999 Avenue of the Stars, Suite 1200
Los Angeles, California 90067
Telephone: 310-282-8813
Facsimile: 310-282-8813
Attention: Kelvin L. Davis
and
c/o Colony Capital, Inc.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Telephone: 817-871-4023
Facsimile: 817-871-4088
Attention: Wade Hundley
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Jonathan H. Grunzweig, Esq.
Telephone: 213-687-5000
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Facsimile: 213-687-5600
(b) if to Kirk B. Ledbetter, to:
147 Granite Springs Drive
Stateline, Nevada 89449
Telephone: 702-588-2645
Facsimile: 702-588-8775
with a copy to:
Shartsis, Friese & Ginsburg LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
Attention: Robert C. Friese, Esq.
Telephone: 415-421-6500
Facsimile: 415-421-2922
and with a copy to:
Walther, Key, Maupin, Oats, Cox, Klaich & LeGoy
Lakeside Professional Plaza
3500 Lakeside Court
Reno, Nevada 89509
Attention: G. Barton Mowry, Esq.
Telephone: 702-827-2000
Facsimile: 702-827-2185
and with a copy to:
Michael Smiley Rowe, Esq.
1638 Esmeralda Street
P.O. Box 2080
Minden, Nevada 89423
Telephone: 702-782-8141
Facsimile: 702-782-3685
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(c) if to Jessica L. Ledbetter, to:
Thunderbird Ranch
575 Highway 88
Gardnerville, Nevada 89410
Telephone: 702-265-2025
Facsimile: 702-265-2024
with a copy to:
Shartsis, Friese & Ginsburg LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
Attention: Robert C. Friese, Esq.
Telephone: 415-421-6500
Facsimile: 415-421-2922
and with a copy to:
Walther, Key, Maupin, Oats, Cox, Klaich & LeGoy
Lakeside Professional Plaza
3500 Lakeside Court
Reno, Nevada 89509
Attention: G. Barton Mowry, Esq.
Telephone: 702-827-2000
Facsimile: 702-827-2185
and with a copy to:
Thomas J. Hall, Esq.
305 South Arlington Avenue
P.O. Box 3948
Reno, Nevada 89505
Telephone: 702-348-7011
Facsimile: 702-348-7211
(d) if to William B. Ledbetter, to:
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\ P.O. Box 128
Stateline, Nevada 89449
Telephone: 702-588-2411
Facsimile: 702-588-8155
with a copy to:
Shartsis, Friese & Ginsburg LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
Attention: Robert C. Friese, Esq.
Telephone: 415-421-6500
Facsimile: 415-421-2922
and with a copy to:
Walther, Key, Maupin, Oats, Cox, Klaich & LeGoy
Lakeside Professional Plaza
3500 Lakeside Court
Reno, Nevada 89509
Attention: G. Barton Mowry, Esq.
Telephone: 702-827-2000
Facsimile: 702-827-2185
and with a copy to:
William C. Sanford, Jr., Esq.
100 W. Liberty Street, Suite 900
P.O. Box 3438
Reno, Nevada 89505
Telephone: 702-329-4733
Facsimile: 702-322-6644
(e) if to the Ledbetter Marital Trust, to each of Kirk B.
Ledbetter, Jessica L. Ledbetter and William B. Ledbetter as provided in
this Section 7.01.
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SECTION 7.02. INTERPRETATION. When a reference is made in this
Agreement to an Article, Section or Schedule, such reference shall be to an
Article, Section or Schedule of this Agreement, unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The Merger Agreement and the consummation of the transactions
contemplated by such Merger Agreement are transactions contemplated by this
Agreement. To the extent any restriction on the activities of Target or its
subsidiaries under the terms of this Agreement requires prior approval under
any Gaming Law, such restriction shall be of no force or effect unless and
until such approval is obtained. If any provision of this Agreement is
illegal or unenforceable under any Gaming Law, such provision shall be void
and of no force or effect.
SECTION 7.03. SEVERABILITY. If any provision of this Agreement or
the application of any such provision shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof. In lieu of any such invalid, illegal or unenforceable
provision, the parties hereto intend that there shall be added as part of
this Agreement a valid, legal and enforceable provision as similar in terms
to such invalid, illegal or unenforceable provision as may be possible or
practicable under the circumstances.
SECTION 7.04. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 7.05. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement and the Merger Agreement, and the Schedules and Exhibits
thereto, constitute the entire agreements, and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter of these agreements and, except for the provisions of
article III, sections 7.05 and 7.06, each of the Merger Agreement, are not
intended to confer upon any person other than the parties any rights or
remedies hereunder.
SECTION 7.06. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
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THE STATE OF NEVADA, WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF LAW,
EXCEPT TO THE EXTENT THE NEVADA GENERAL CORPORATION LAW SHALL BE HELD TO
GOVERN THE TERMS OF THE MERGER, AND EXCEPT THAT GAMING LAWS SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE RESPECTIVE JURISDICTIONS IN
WHICH APPROVALS FROM GAMING AUTHORITIES ARE REQUIRED TO BE OBTAINED.
SECTION 7.07. GAMING LAWS. Each of the provisions of this
Agreement is subject to and shall be enforced in compliance with the Gaming
Laws.
SECTION 7.08. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Acq Corp
may assign, in its sole discretion and without any Seller's consent, any of
or all its rights, interests and obligations under this Agreement to any
controlled affiliate of Colony Capital, Inc., but no such assignment shall
relieve Acq Corp of any of its obligations under this Agreement. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 7.09. ENFORCEMENT. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any court
of the United States located in the State of Nevada or in any Nevada state
court, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal court located in
the State of Nevada or any Nevada state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such
court and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any
court other than a Federal or state court sitting in the State of Nevada.
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SECTION 7.10. INDIVIDUAL CAPACITY. Notwithstanding anything
herein to the contrary, the Sellers enter into this Agreement solely in their
respective capacities as shareholders of Target. No person executing this
Agreement who is or becomes a director or officer of Target shall be deemed
to make any agreement herein in his or her capacity as director or officer.
Nothing herein shall limit or affect (a) actions taken by any Seller in his
or her capacity as director or officer or (b) the rights and remedies Acq
Corp may have other than pursuant to this Agreement in respect of such
conduct undertaken in the capacity of director or officer.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, each of the parties hereto has caused its duly
authorized officers to execute this Agreement as of the date first above
written.
HARVEYS ACQUISITION CORPORATION
By: /s/ Kelvin L. Davis
----------------------------------
Name: Kelvin L. Davis
Title: President
LEDBETTER MARITAL TRUST
By: /s/ Kirk B. Ledbetter
----------------------------------
Name: Kirk B. Ledbetter
Title: Co-Trustee
By: /s/ Jessica L. Ledbetter
----------------------------------
Name: Jessica L. Ledbetter
Title: Co-Trustee
By: /s/ William B. Ledbetter
----------------------------------
Name: William B. Ledbetter
Title: Co-Trustee
/s/ Kirk B. Ledbetter
---------------------------------------
KIRK B. LEDBETTER
/s/ Jessica L. Ledbetter
---------------------------------------
JESSICA L. LEDBETTER
/s/ William B. Ledbetter
---------------------------------------
WILLIAM B. LEDBETTER
VOTING AND PROFIT SHARING AGREEMENT
SCHEDULE 3.01(C)(ii)
AFFILIATE OWNERSHIP AND STOCK OPTIONS
1. The Ledbetter 1993 Irrevocable Trust, of which Wells Fargo Bank is the
sole trustee, owns 333,400 shares of stock of Target and is an affiliate.
2. Debbie Ledbetter, the wife of Kirk B. Ledbetter, and their children own
400 shares of stock of Target.
3. Each of William B. Ledbetter, Jessica L. Ledbetter and Kirk B. Ledbetter
are owners of certain stock option rights or stock appreciation rights
pursuant to Employment Agreements (Bill) or Board of Directors Compensation
Plan/Change of Control Plan (Kirk and Jessica).
VOTING AND PROFIT SHARING AGREEMENT
SCHEDULE 3.01(C)(ii)
LIENS ENCUMBERING SHARES
1. 400,000 shares of Target common stock have been pledged to secure a
Revolving Line of Credit Loan of up to $3,000,000 from Wells Fargo Bank to
the Marital trust created under article VI of the Will of Beverlee A.
Ledbetter (the "Marital Trust").
2. Pursuant to the Guaranty by the Marital Trust in favor of Wells Fargo
Bank of a Construction Loan made to William B. Ledbetter, the Marital Trust
has transferred physical possession, without a pledge, of 175,000 shares of
Target common stock.
3. Jessica L. Ledbetter has pledged 79,000 shares of target common stock to
secure a farm credit loan.