EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
among
BATON HOLDINGS INC.,
BATON ACQUISITION INC.
and
BOCA RESORTS, INC.
Dated as of October 20, 2004
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TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
SECTION 1.01 The
Merger......................................................1
SECTION 1.02
Closing.........................................................2
SECTION 1.03 Effective
Time..................................................2
SECTION 1.04 Effect of the
Merger............................................2
SECTION 1.05 Certificate of
Incorporation; Bylaws............................2
SECTION 1.06 Directors and
Officers..........................................2
SECTION 1.07 Other
Transactions..............................................2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01 Conversion of
Securities........................................3
SECTION 2.02 Exchange of
Certificates........................................4
SECTION 2.03 Stock Transfer
Books............................................5
SECTION 2.04 Company Stock
Options...........................................6
SECTION 2.05 Dissenting
Shares...............................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01 Organization and
Qualification; Subsidiaries....................7
SECTION 3.02 Certificate of Incorporation
and Bylaws.........................8
SECTION 3.03
Capitalization..................................................8
SECTION 3.04 Authority Relative to This
Agreement...........................10
SECTION 3.05 No Conflict; Required
Filings and Consents.....................10
SECTION 3.06 Permits;
Compliance............................................11
SECTION 3.07 SEC Filings; Financial Statements;
Undisclosed Liabilities.....11
SECTION 3.08 Information
Supplied...........................................12
SECTION 3.09 Absence of Certain Changes
or Events...........................12
SECTION 3.10 Absence of
Litigation..........................................13
SECTION 3.11 Employee Benefit
Plans.........................................14
SECTION 3.12 Labor and Employment
Matters...................................15
SECTION 3.13 Real Property; Title to
Assets.................................15
SECTION 3.14 Intellectual
Property..........................................17
SECTION 3.15
Taxes..........................................................18
SECTION 3.16 Environmental
Matters..........................................20
SECTION 3.17 Material
Contracts.............................................21
SECTION 3.18
Insurance......................................................23
SECTION 3.19 Board Approval; Vote
Required..................................23
SECTION 3.20 Interested Party
Transactions..................................24
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SECTION 3.21 Opinion of Financial
Advisor...................................24
SECTION 3.22
Brokers........................................................24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
SECTION 4.01 Corporate
Organization.........................................24
SECTION 4.02 Certificate of Incorporation
and Bylaws........................24
SECTION 4.03 Authority Relative to This
Agreement...........................24
SECTION 4.04 No Conflict; Required
Filings and Consents.....................25
SECTION 4.05 Information
Supplied...........................................25
SECTION 4.06 Absence of
Litigation..........................................26
SECTION 4.07 Operations of Merger
Sub.......................................26
SECTION 4.08
Financing......................................................26
SECTION 4.09
Guarantee......................................................26
SECTION 4.10
Brokers........................................................26
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 Conduct of Business by the
Company Pending the Merger..........27
SECTION 5.02 Conduct of Business by
Parent and Merger Sub Pending
the
Merger....................................................31
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Proxy Statement; Company
Stockholders' Meeting.................31
SECTION 6.02 Access to Information;
Confidentiality.........................32
SECTION 6.03 No Solicitation of
Transactions................................33
SECTION 6.04 Directors' and Officers'
Indemnification and Insurance.........35
SECTION 6.05 Employee Benefits
Matters......................................36
SECTION 6.06 Notification of Certain
Matters................................37
SECTION 6.07
Financing......................................................38
SECTION 6.08 Further Action; Reasonable
Best Efforts........................40
SECTION 6.09 Obligations of Parent and
Merger Sub...........................41
SECTION 6.10 Public
Announcements...........................................41
SECTION 6.11 Transfer
Taxes.................................................41
SECTION 6.12
Resignations...................................................41
SECTION 6.13 Termination of Management
Agreement............................42
SECTION 6.14 Matters Relating to New Boca
and Cosmos Group..................42
SECTION 6.15 Real Estate
Acquisition........................................42
SECTION 6.16 Soil Removal Approval
Letter...................................42
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to the
Obligations of Each Party....................43
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SECTION 7.02 Conditions to the
Obligations of Parent and Merger Sub.........43
SECTION 7.03 Conditions to the
Obligations of the Company...................44
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01
Termination....................................................45
SECTION 8.02 Effect of
Termination..........................................46
SECTION 8.03 Fees and
Expenses..............................................47
SECTION 8.04
Amendment......................................................49
SECTION 8.05
Waiver.........................................................49
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 Non-Survival of
Representations, Warranties and Agreements.....49
SECTION 9.02
Notices........................................................49
SECTION 9.03 Certain
Definitions............................................50
SECTION 9.04
Severability...................................................54
SECTION 9.05 Disclaimer of Other
Representations and Warranties.............54
SECTION 9.06 Entire Agreement;
Assignment...................................54
SECTION 9.07 Parties in
Interest............................................55
SECTION 9.08 Remedies; Specific
Performance.................................55
SECTION 9.09 Governing
Law..................................................55
SECTION 9.10 Waiver of Jury
Trial...........................................55
SECTION 9.11
Headings.......................................................56
SECTION 9.12
Counterparts...................................................56
Exhibit A Form of Amended and Restated
Certificate of Incorporation
Exhibit B Form of Amended and Restated
Bylaws
Exhibit C Form of Guarantee of Blackstone
Real Estate Partners IV L.P.
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AGREEMENT AND PLAN OF MERGER, dated as of October 20, 2004
(this "Agreement"), among BATON HOLDINGS
INC., a Delaware corporation
("Parent"), BATON ACQUISITION INC., a
Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and
BOCA RESORTS, INC., a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of each of the
Company, Parent and Merger Sub deem it in
the best interests of their respective
stockholders or members, as the case may
be, to consummate the merger (the
"Merger"), on the terms and subject to the
conditions set forth in this
Agreement, of Merger Sub with and into the
Company in which the Company would
become a wholly owned subsidiary of Parent,
and such Boards of Directors have
approved this Agreement and declared its
advisability (and, in the case of the
Board of Directors of the Company (the
"Company Board"), recommended that this
Agreement be adopted by the Company's
stockholders);
WHEREAS, as an inducement to Parent and Merger Sub entering
into this Agreement, Parent and certain
stockholders of the Company are entering
into a voting agreement simultaneously with
the execution and delivery of this
Agreement pursuant to which, among other
things, such stockholders have agreed,
subject to the terms thereof, to vote their
shares of the Company Common Stock
(as defined below) in favor of the adoption
of this Agreement; and
WHEREAS, upon consummation of the Merger, each issued and
outstanding share of Class A common stock,
par value $.01 per share, of the
Company (the "Company Class A Common
Stock", and each issued and outstanding
share of Class B common stock, par value
$.01 per share, of the Company (the
"Company Class B Common Stock" and,
together with the Company Class A Common
Stock, the "Company Common Stock"), will be
converted into the right to receive
$24.00 per share in cash, upon the terms
and subject to the conditions of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein
contained, and intending to be legally
bound hereby, Parent, Merger Sub and the
Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger. Upon the terms and subject to the
conditions set forth in Article VII, and in
accordance with the General
Corporation Law of the State of Delaware
(the "DGCL"), at the Effective Time,
Merger Sub shall be merged with and into
the Company. At the Effective Time, the
separate corporate existence of Merger Sub
shall cease and the Company shall
continue as the surviving corporation of
the Merger (the "Surviving
Corporation").
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SECTION 1.02 Closing. Unless this Agreement shall have been
terminated in accordance with Section 8.01,
the closing of the Merger (the
"Closing") will take place at 9:00 a.m.,
New York time, on a date to be
specified by the parties, which date shall
be (a) no earlier than November 19,
2004 without Parent's consent and (b) no
later than the second business day
after the satisfaction or waiver of the
conditions set forth in Article VII
(other than those that by their terms are
to be satisfied or waived at the
Closing), at the offices of Shearman &
Sterling LLP, 599 Lexington Avenue, New
York, New York 10022, unless another time,
date and/or place is agreed to in
writing by Parent and the Company.
SECTION 1.03 Effective Time. Upon the terms and subject to the
conditions set forth in this Agreement, as
soon as practicable after the
satisfaction or waiver of the conditions
set forth in Article VII, the parties
hereto shall (i) file a certificate of
merger (the "Certificate of Merger") in
such form as is required by, and executed
and acknowledged in accordance with,
the relevant provisions of the DGCL and
(ii) make all other filings or
recordings required under the DGCL to
effect the Merger. The Merger shall become
effective at such date and time as the
Certificate of Merger is duly filed with
the Secretary of State of the State of
Delaware or at such subsequent date and
time as Parent and the Company shall agree
and specify in the Certificate of
Merger. The date and time at which the
Merger becomes effective is referred to
in this Agreement as the "Effective
Time".
SECTION 1.04 Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided
in Section 259 of the DGCL.
SECTION 1.05 Certificate of Incorporation; Bylaws. (a) At the
Effective Time, the Certificate of
Incorporation of the Company, as in effect
immediately prior to the Effective Time,
shall be amended to read in its
entirety as set forth in Exhibit A attached
hereto and, as so amended, shall be
the Certificate of Incorporation of the
Surviving Corporation until thereafter
amended in accordance with the provisions
thereof and as provided by Law.
(b) At the Effective Time, the Bylaws of the Company, as in
effect immediately prior to the Effective
Time, shall be amended and restated to
read in their entirety as set forth in
Exhibit B attached hereto and, as so
amended and restated, shall be the Bylaws
of the Surviving Corporation until
thereafter amended as provided by Law, the
Certificate of Incorporation of the
Surviving Corporation and such Bylaws.
SECTION 1.06 Directors and Officers. The directors of Merger
Sub immediately prior to the Effective Time
shall be the initial directors of
the Surviving Corporation, each to hold
office in accordance with the
Certificate of Incorporation and Bylaws of
the Surviving Corporation, and the
officers of Merger Sub immediately prior to
the Effective Time shall be the
initial officers of the Surviving
Corporation, in each case until their
respective successors are duly elected or
appointed and qualified or until the
earlier of their death, resignation or
removal.
SECTION 1.07 Other Transactions. Parent shall have the option,
in its sole discretion and without
requiring the further consent of the Company
or the Company's Board of Directors or
stockholders, upon reasonable notice to
the Company, to request that the Company,
immediately prior to the Closing, (a)
convert one or more Subsidiaries that are
organized as
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corporations into limited liability
companies and one or more Subsidiaries that
are organized as limited partnerships into
limited liability companies, on the
basis of organizational documents as
reasonably requested by Parent, and (b)
sell to an affiliate of Parent all of the
stock, limited partnership interests
or limited liability interests owned,
directly or indirectly, by the Company in
one or more Subsidiaries at a price
designated by Parent based on a third-party
appraisal of the assets and liabilities of
such Subsidiary; provided, however,
that (i) the Company shall not be required
to take any action in contravention
of any organizational document or other
Material Contract relating to any
applicable Subsidiary, (ii) any such
actions or transactions shall be contingent
upon the receipt by the Company of a
written notice from Parent confirming that
Parent and Merger Sub are prepared to
proceed immediately with the Closing (it
being understood that in any event the
transactions described in clauses (a) and
(b) will be deemed to have occurred prior
to the Closing), and (iii) such
actions (or the inability to complete such
actions) shall not affect or modify
in any respect the obligations of Parent or
Merger Sub under this Agreement,
including payment of the Merger
Consideration. Parent shall, promptly upon
request by the Company, reimburse the
Company for all reasonable out-of-pocket
costs incurred by the Company in connection
with any actions taken by the
Company in accordance with this Section
1.07. Parent and Merger Sub shall, on a
joint and several basis, indemnify and hold
harmless the Company and its
Representatives for and against any and all
liabilities, losses, damages,
claims, costs, expenses, interest, awards,
judgments and penalties suffered or
incurred by them in connection with such
actions.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any
action on the part of Merger Sub, the
Company or the holders of any of the
following securities:
(a) Conversion of Company Common Stock. Each share of Company
Common Stock (all issued and outstanding shares of Company Common
Stock
being hereinafter collectively referred to as the "Shares") issued
and
outstanding immediately prior to the Effective Time (other than
any
Shares to be canceled pursuant to Section 2.01(b) and any
Dissenting
Shares) shall be canceled and shall be converted automatically into
the
right to receive $24.00 in cash, without interest (the "Merger
Consideration"), payable upon surrender, in the manner provided
in
Section 2.02, of the certificate that formerly evidenced such
Share.
(b) Cancellation of Treasury Stock and Parent-Owned Stock.
Each Share held in the treasury of the Company and each Share owned
by
Merger Sub, Parent or any direct or indirect wholly owned
subsidiary of
Parent or of the Company immediately prior to the Effective Time
shall
automatically be canceled without any conversion thereof and no
payment
or distribution shall be made with respect thereto.
(c) Capital Stock of Merger Sub. Each share of common stock,
par value $0.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective
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Time shall be converted into and become one validly issued, fully
paid
and nonassessable share of common stock, par value $0.01 per share,
of
the Surviving Corporation.
SECTION 2.02 Exchange of Certificates. (a) Paying Agent. Prior
to the Effective Time, Parent shall (i)
appoint a bank or trust company
reasonably acceptable to the Company (the
"Paying Agent"), and (ii) enter into a
paying agent agreement, in form and
substance reasonably acceptable to the
Company, with such Paying Agent for the
payment of the Merger Consideration in
accordance with this Article II. At the
Effective Time, Parent shall deposit, or
cause the Surviving Corporation to deposit,
with the Paying Agent, for the
benefit of the holders of Shares, cash in
an amount sufficient to pay the
aggregate Merger Consideration required to
be paid pursuant to Section 2.01(a)
(such cash being hereinafter referred to as
the "Exchange Fund"). The Exchange
Fund shall not be used for any other
purpose. The Exchange Fund shall be
invested by the Paying Agent as directed by
Parent; provided, however, that such
investments shall be in obligations of or
guaranteed by the United States of
America or any agency or instrumentality
thereof and backed by the full faith
and credit of the United States of America,
in commercial paper obligations
rated A-1 or P-1 or better by Moody's
Investors Service, Inc. or Standard &
Poor's Corporation, respectively, or in
certificates of deposit, bank repurchase
agreements or banker's acceptances of
commercial banks with capital exceeding $1
billion (based on the most recent financial
statements of such bank which are
then publicly available). Any net profit
resulting from, or interest or income
produced by, such investments shall be
payable to the Surviving Corporation.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time, Parent shall cause the
Paying Agent to mail to each person who
was, at the Effective Time, a holder of
record of Shares entitled to receive the
Merger Consideration pursuant to Section
2.01(a): (i) a letter of transmittal
(which shall be in customary form and shall
specify that delivery shall be
effected, and risk of loss and title to the
certificates evidencing such Shares
(the "Certificates") shall pass, only upon
proper delivery of the Certificates
to the Paying Agent) and (ii) instructions
for use in effecting the surrender of
the Certificates in exchange for the Merger
Consideration. Upon surrender to the
Paying Agent of a Certificate for
cancellation, together with such letter of
transmittal, duly completed and validly
executed in accordance with the
instructions thereto, and such other
documents as may be required pursuant to
such instructions, the holder of such
Certificate shall be entitled to receive
in exchange therefor the amount of cash
which such holder has the right to
receive in respect of the Shares formerly
represented by such Certificate
pursuant to Section 2.01(a), and the
Certificate so surrendered shall forthwith
be canceled. In the event of a transfer of
ownership of Shares that is not
registered in the transfer records of the
Company, payment of the Merger
Consideration may be made to a person other
than the person in whose name the
Certificate so surrendered is registered if
the Certificate representing such
Shares shall be properly endorsed or
otherwise be in proper form for transfer
and the person requesting such payment
shall pay any transfer or other taxes
required by reason of the payment of the
Merger Consideration to a person other
than the registered holder of such
Certificate or establish to the reasonable
satisfaction of Parent that such tax has
been paid or is not applicable. Until
surrendered as contemplated by this Section
2.02, each Certificate shall be
deemed at all times after the Effective
Time to represent only the right to
receive upon such surrender the Merger
Consideration to which the holder of such
Certificate is entitled pursuant to this
Article II. No interest shall be paid
or will accrue on any cash payable to
holders of Certificates pursuant to the
provisions of this Article II.
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(c) No Further Rights. From and after the Effective Time,
holders of Certificates shall cease to have
any rights as stockholders of the
Company, except as provided herein or by
Law.
(d) Termination of Exchange Fund. Any portion of the Exchange
Fund that remains undistributed to the
holders of Shares for one year after the
Effective Time shall be delivered to
Parent, upon demand, and any holders of
Shares who have not theretofore complied
with this Article II shall thereafter
look only to Parent for, and Parent shall
remain liable for, payment of their
claim for the Merger Consideration. Any
portion of the Exchange Fund remaining
unclaimed by holders of Shares as of a date
which is immediately prior to such
time as 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 Parent free and clear of
any claims or interest of any person
previously entitled thereto.
(e) No Liability. None of the Paying Agent, Parent, Merger Sub
or the Surviving Corporation shall be
liable to any holder of Shares for any
cash (including any dividends or
distributions with respect to such Shares)
delivered to a public official pursuant to
any abandoned property, escheat or
similar Law.
(f) Withholding Rights. Each of the Paying Agent, the
Surviving Corporation and Parent shall be
entitled to deduct and withhold from
the consideration otherwise payable
pursuant to this Agreement to any holder of
Shares such amounts as it is required to
deduct and withhold with respect to
such payment under all applicable Tax laws.
To the extent that amounts are so
withheld by the Paying Agent, the Surviving
Corporation or Parent, as the case
may be, such withheld amounts shall be
treated for all purposes of this
Agreement as having been paid to the holder
of the Shares in respect of which
such deduction and withholding was made by
the Paying Agent, the Surviving
Corporation or Parent, as the case may
be.
(g) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon (i) the
making of an affidavit of that fact by
the person claiming such Certificate to be
lost, stolen or destroyed, and (ii)
if required by the Surviving Corporation,
(A) in the event such person is a
holder of over 10 Shares, the posting by
such person of a bond, in such
reasonable amount as the Surviving
Corporation may direct, or (B) in the event
such person is a holder of 10 or fewer
Shares, reasonable personal assurances
from such person, in each case as indemnity
against any claim that may be made
against the Surviving Corporation with
respect to such Certificate, the Paying
Agent shall pay in respect of such lost,
stolen or destroyed Certificate the
Merger Consideration to which the holder
thereof is entitled pursuant to Section
2.01(a).
SECTION 2.03 Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall
be closed and there shall be no
further registration of transfers of Shares
thereafter on the records of the
Company. From and after the Effective Time,
the holders of Certificates
representing Shares outstanding immediately
prior to the Effective Time shall
cease to have any rights with respect to
such Shares, except as otherwise
provided in this Agreement or by Law. On or
after the Effective Time, any
Certificates presented to the Paying Agent
or Parent for any reason shall be
canceled against delivery of the Merger
Consideration to which the holders
thereof are entitled pursuant to Section
2.01(a).
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SECTION 2.04 Company Stock Options. (a) Between the date of
this Agreement and the Effective Time, the
Company shall take all necessary
action (which action shall be effective as
of the Effective Time), including
obtaining the consent of the individual
option holders and the adoption of
Company Board resolutions, if necessary, to
(i) terminate the Company's Third
Amended and Restated 1996 Stock Option Plan
( the "Company Stock Option Plan"),
and (ii) cancel, as of the Effective Time,
each option to purchase Shares
granted under the Company Stock Option Plan
(each, a "Company Stock Option")
that is outstanding and unexercised, as of
the Effective Time (in each case,
without the creation of additional
liability to the Company or any
Subsidiaries).
(b) Each holder of a Company Stock Option that is outstanding
and unexercised as of the Effective Time
and has an exercise price per Share
that is less than the per share Merger
Consideration shall (subject to the
provisions of this Section 2.04) be paid by
the Surviving Corporation, in
exchange for the cancellation of such
Company Stock Option, an amount in cash
(subject to any applicable withholding
Taxes) equal to the product of (i) the
difference between the per share Merger
Consideration and the applicable
exercise price of such Company Stock
Option, and (ii) the aggregate number of
Shares issuable upon exercise of such
Company Stock Option (the "Option
Payment"). The Surviving Corporation shall
make the Option Payments as promptly
as practicable after the Effective Time.
Any such payments shall be subject to
all applicable federal, state and local Tax
withholding requirements.
SECTION 2.05 Dissenting Shares. (a) Notwithstanding any
provision of this Agreement to the contrary
and to the extent available under
the DGCL, Shares that are outstanding
immediately prior to the Effective Time
and that are held by any stockholder who is
entitled to demand and properly
demands the appraisal for such Shares (the
"Dissenting Shares") pursuant to, and
who complies in all respects with, the
provisions of Section 262 of the DGCL
("Section 262") shall not be converted
into, or represent the right to receive,
the Merger Consideration. Any such
stockholder shall instead be entitled to
receive payment of the fair value of such
stockholder's Dissenting Shares in
accordance with the provisions of Section
262; provided, however, that all
Dissenting Shares held by any stockholder
who shall have failed to perfect or
who otherwise shall have withdrawn or lost
such stockholder's rights to
appraisal of such Shares under Section 262
shall thereupon be deemed to have
been converted into, and to have become
exchangeable for, as of the Effective
Time, the right to receive the Merger
Consideration, without any interest
thereon, upon surrender in the manner
provided in Section 2.02 of the
Certificate or Certificates that formerly
evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands received by the Company for
appraisal of any Shares, withdrawals of such
demands and any other instruments served
pursuant to the DGCL and received by
the Company and (ii) the opportunity to
participate in and direct all
negotiations and proceedings with respect
to demands for appraisal under the
DGCL. The Company shall not, except with
the prior written consent of Parent,
make any payment or agree to make any
payment with respect to any demands for
appraisal or offer to settle or settle any
such demands.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered by
the Company to Parent and Merger Sub
concurrently with the execution and
delivery of this Agreement (the "Company
Disclosure Schedule") (provided that
disclosure of any fact or item in any
section of the Company Disclosure Schedule
shall, should the existence of such fact or
item be relevant to any other
section, be deemed to be disclosed with
respect to that other section so long as
the relevance of such disclosure to such
other section is reasonably apparent),
the Company hereby represents and warrants
to Parent and Merger Sub as follows:
SECTION 3.01 Organization and Qualification; Subsidiaries. (a)
Each of the Company and each subsidiary of
the Company (each a "Subsidiary") is
a corporation, limited liability company,
limited partnership or limited
liability partnership duly organized,
validly existing and in good standing
under the laws of the jurisdiction of its
organization and has the requisite
power and authority and all necessary
governmental approvals to own, lease and
operate its properties and to carry on its
business as it is now being
conducted. Each of the Company and each
Subsidiary is duly qualified or licensed
as a foreign corporation to do business,
and is in good standing, in each
jurisdiction where the character of the
properties owned, leased or operated by
it or the nature of its business makes such
qualification or licensing
necessary, except for such failures to be
so qualified or licensed and in good
standing that would not reasonably be
expected to have a Company Material
Adverse Effect. The term "Company Material
Adverse Effect" means any event,
circumstance, development, change or effect
that, individually or in the
aggregate with all other events,
circumstances, developments, changes and
effects, is materially adverse to the
business, operations, assets, condition
(financial or otherwise) or results of
operations of the Company and the
Subsidiaries taken as a whole or would
reasonably be expected to prevent or
materially delay the consummation of the
Merger and the other transactions
contemplated hereby (collectively, the
"Transactions") or prevent or materially
impair or delay the ability of the Company
to perform its obligations hereunder;
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, or will be, a Company
Material Adverse Effect: any event,
circumstance, change or effect resulting
from or relating to (i) a change in general
economic or financial market
conditions, (ii) a change in industry
conditions, (iii) seasonal fluctuations in
the business of the Company and the
Subsidiaries, (iv) any acts of terrorism or
war (except to the extent such event,
circumstance, change or effect has had a
disproportionate effect on the Company and
the Subsidiaries as compared to other
persons in the industry in which the
Company and the Subsidiaries conduct their
business), (v) the announcement of the
execution of this Agreement or the
pendency or consummation of the
Transactions, or (vi) compliance with the terms
of, or the taking of any action required
by, this Agreement; provided further
that the exceptions set forth in clauses
(v) and (vi) will not apply with
respect to the representations and
warranties set forth in Section 3.05.
(b) A true and complete list of all the Subsidiaries, together
with the jurisdiction of organization of
each Subsidiary and the percentage of
the outstanding capital
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stock or other equity interests of each
Subsidiary owned by the Company, each
other Subsidiary and any other person, is
set forth in Section 3.01(b) of the
Company Disclosure Schedule.
(c) Section 3.01(c) of the Company Disclosure Schedule lists
any and all persons of which the Company
directly or indirectly owns an equity
or similar interest, or an interest
convertible into or exchangeable or
exercisable for an equity or similar
interest, of less than 50% (collectively,
the "Investments"). The Company or a
Subsidiary, as the case may be, owns all
Investments free and clear of all Liens,
and there are no outstanding
contractual obligations of the Company or
any Subsidiary permitting the
repurchase, redemption or other acquisition
of any of its interest in the
Investments or to provide funds to, or make
any investment (in the form of a
loan, capital contribution or otherwise)
in, or provide any guarantee with
respect to, any Investment.
(d) Section 3.01(d) of the Company Disclosure Schedule sets
forth the following information in respect
of Boca Raton Hotel and Club Limited
Partnership, a Florida limited partnership
("Old Boca") and its ownership
interest in Panthers BRHC Limited, a
Florida limited partnership ("New Boca"):
(i) a list of all persons holding a
partnership interest in Old Boca (including
a list of all Class A limited partners of
Old Boca) as of the date of this
Agreement, along with the number of units
held by such limited partners in Old
Boca as of the date of this Agreement, and
(ii) each person owning an
partnership interest in BRMC, L.P., a
Delaware limited partnership ("BRMC LP"),
as of the date of this Agreement, along
with the class and percentage of such
person's ownership interest as of the date
of this Agreement. Old Boca does not
hold any direct equity or similar interest
in the Company or any Subsidiary
other than the interest it holds in New
Boca. The Company has provided to Parent
complete and correct copies of the Old Boca
and BRMC LP partnership agreements,
each as amended to date. Pursuant to that
certain Amended and Restated
Contribution and Exchange Agreement, dated
as of March 20, 1997 (the
"Contribution and Exchange Agreement"), the
Company has the option to acquire,
directly or through its designee, the
general partnership interest in Old Boca
held by BRMC LP for $1.00, and such right
is valid, remains in full force and
effect and has not expired. Other than BRMC
LP, no person holds any general
partnership interest in Old Boca.
SECTION 3.02 Certificate of Incorporation and Bylaws. The
Company has made available to Parent a
complete and correct copy of the
Certificate of Incorporation and the Bylaws
or similar organizational documents,
each as amended to date, of the Company and
each Subsidiary. Such Certificates
of Incorporation and Bylaws or similar
organizational documents are in full
force and effect and no other
organizational documents are applicable or binding
upon the Company or any of its
Subsidiaries. Neither the Company nor any
Subsidiary is, nor has the Company been, in
violation of any of the provisions
of its Certificate of Incorporation or
Bylaws or similar organizational
documents. No Subsidiary has been in
material violation of any of the provisions
of its Certificate of Incorporation, Bylaws
or similar organizational documents.
The Company has made available to Parent
complete and correct copies of the
minutes of all meetings of the Company
Board (and each committee thereof) and of
the stockholders of the Company, in each
case since July 1, 2001.
SECTION 3.03 Capitalization. (a) The authorized capital stock
of the Company consists of (i) 100,000,000
shares of Company Class A Common
Stock, (ii)
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10,000,000 shares of Company Class B Common
Stock, and (iii) 5,000,000 shares of
preferred stock, par value $.01 per share
("Company Preferred Stock").
(b) As of October 18, 2004, (i) 40,018,789 shares of Company
Class A Common Stock and 255,000 shares of
Company Class B Common Stock were
issued and outstanding, all of which are
validly issued, fully paid and
nonassessable and were issued free of
preemptive (or similar) rights, (ii)
1,219,623 shares of Company Class A Common
Stock and no shares of Company Class
B Common Stock were held in the treasury of
the Company, (iii) no shares of
Company Common Stock were held by the
Subsidiaries, (iv) 6,491,094 shares of
Company Class A Common Stock are issuable
upon exercise of outstanding Company
Stock Options granted under the Company
Stock Option Plan at a weighted average
per share exercise price of $14.137, (v)
7,677,071 shares of Company Class A
Common Stock are reserved for future
issuance in connection with the Company
Stock Option Plan (including shares
reserved pursuant to outstanding Company
Stock Options), and (vi) 255,000 shares of
Company Class A Common Stock were
reserved for future issuance pursuant to
the conversion of shares of Company
Class B Common Stock. Since October 18,
2004 through the date of this Agreement,
other than in connection with the issuance
of Shares pursuant to the exercise of
Company Stock Options outstanding as of
October 18, 2004, there has been no
change in the number of shares of
outstanding capital stock of the Company or
the number of outstanding Company Stock
Options. As of the date of this
Agreement, no shares of Company Preferred
Stock are issued and outstanding. The
Company does not have a "poison pill" or
similar stockholder rights plan. Except
as set forth in this Section 3.03, there
are no (A) options, warrants or other
rights, agreements, arrangements or
commitments of any character relating to the
issued or unissued capital stock of the
Company or any Subsidiary or obligating
the Company or any Subsidiary to issue or
sell any shares of capital stock of,
or other equity interests in, the Company
or any Subsidiary, (B) voting
securities of the Company or securities
convertible, exchangeable or exercisable
for shares of capital stock or voting
securities of the Company, or (C) equity
equivalents, interests in the ownership or
earnings of the Company or any
Subsidiary or similar rights. All shares of
Company Common Stock subject to
issuance as aforesaid, upon issuance on the
terms and conditions specified in
the instruments pursuant to which they are
issuable, will be duly authorized,
validly issued, fully paid and
nonassessable and free of preemptive (or similar)
rights. There are no outstanding
contractual obligations of the Company or any
Subsidiary to repurchase, redeem or
otherwise acquire any shares of Company
Common Stock or any capital stock of any
Subsidiary or to provide funds to or
make any investment (in the form of a loan,
capital contribution or otherwise)
in any Subsidiary or any other person. None
of the Company or any Subsidiary is
a party to any stockholders' agreement,
voting trust agreement or registration
rights agreement relating to any equity
securities of the Company or any
Subsidiary or any other Contract relating
to disposition, voting or dividends
with respect to any equity securities of
the Company or of any Subsidiary.
(c) Each outstanding share of capital stock, each limited
liability company membership interest and
each partnership interest of each
Subsidiary is duly authorized, validly
issued, fully paid and nonassessable and
was issued free of preemptive (or similar)
rights, and each such share or
interest is owned by the Company or another
Subsidiary free and clear of all
options, rights of first refusal,
agreements, limitations on the Company's or
any Subsidiary's voting, dividend or
transfer rights, charges and other
encumbrances or Liens of any nature
whatsoever.
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(d) As of the date of this Agreement, the only outstanding
indebtedness for borrowed money of the
Company and the Subsidiaries is
$200,000,000 in aggregate principal amount
of term loans under the Credit
Agreement, dated as of July 22, 2004, as
amended, among the Company, Boca
Resorts Hotel Corporation, various
Subsidiaries, Deutsche Bank Securities Inc.,
Deutsche Bank Trust Company Americas and
various lenders (the "Credit
Agreement").
SECTION 3.04 Authority Relative to This Agreement. (a) The
Company has all necessary corporate power
and authority to execute and deliver
this Agreement, to perform its obligations
hereunder and to consummate the
Transactions. The execution, delivery and
performance of this Agreement by the
Company and the consummation by the Company
of the Transactions have been duly
and validly authorized by all necessary
corporate action, and no other corporate
proceedings on the part of the Company are
necessary to authorize this Agreement
or to consummate the Transactions (other
than, with respect to the Merger, the
adoption of this Agreement by the
affirmative vote of a majority of the combined
voting power of the outstanding shares of
Company Common Stock entitled to vote
thereon and the filing and recordation of
appropriate merger documents as
required by the DGCL). This Agreement has
been duly and validly executed and
delivered by the Company and, assuming the
due authorization, execution and
delivery by Parent and Merger Sub,
constitutes a legal, valid and binding
obligation of the Company, enforceable
against the Company in accordance with
its terms, subject to the effect of any
applicable bankruptcy, insolvency
(including all laws relating to fraudulent
transfers), reorganization,
moratorium or similar laws affecting
creditors' rights generally and subject to
the effect of general principles of
equity.
SECTION 3.05 No Conflict; Required Filings and Consents. (a)
The execution and delivery of this
Agreement by the Company do not, and the
performance of this Agreement by the
Company and the consummation by the Company
of the Transactions will not, (i) conflict
with or violate the Certificate of
Incorporation or Bylaws (or similar
organizational documents) of the Company or
any Subsidiary, (ii) assuming that all
consents, approvals and other
authorizations described in Section 3.05(b)
have been obtained and that all
filings and other actions described in
Section 3.05(b) have been made or taken,
conflict with or violate any statute, law,
ordinance, regulation, rule, code,
executive order, judgment, decree or other
order ("Law") applicable to the
Company or any Subsidiary or by which any
property or asset of the Company or
any Subsidiary is bound or affected, or
(iii) 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) under,
require consent or result in a material
loss of a material benefit under, give rise
to a right or obligation to purchase
or sell assets or securities under, give to
others any right of termination,
amendment, acceleration or cancellation of,
or result in the creation of a Lien
on any property or asset of the Company or
any Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract
(written or oral), agreement, lease,
license, permit, franchise or other binding
commitment, instrument or obligation
(each, a "Contract") to which the Company
or any Subsidiary is a party or by
which the Company or a Subsidiary or any
property or asset of the Company or any
Subsidiary is bound or affected, except,
with respect to clauses (ii) and (iii),
for any such conflicts, violations,
breaches, defaults or other occurrences
which would not reasonably be expected to
have a Company Material Adverse
Effect.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this
Agreement by the Company and the
consummation by the Company of
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<PAGE>
the Transactions will not, require any
consent, approval, authorization or
permit of, or filing with or notification
to, any supranational, national,
provincial, federal, state or local
government, regulatory or administrative
authority, or any court, tribunal, or
judicial or arbitral body (a "Governmental
Authority"), except for (i) applicable
requirements, if any, of the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"), (ii) the filing with the
Securities and Exchange Commission (the
"SEC") of a proxy statement relating to
the adoption of this Agreement by the
Company's stockholders (as amended or
supplemented from time to time, the "Proxy
Statement"), (iii) any filings
required under the rules and regulations of
the New York Stock Exchange (the
"NYSE"), (iv) the filing and recordation of
appropriate merger documents as
required by the DGCL and appropriate
documents with the relevant authorities of
other states in which the Company or any
Subsidiary is qualified to do business,
(v) any applicable state or federal Laws
governing the sale of liquor, (vi) the
notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and
regulations promulgated thereunder (the "HSR
Act"), and (vii) where the failure to
obtain such consents, approvals,
authorizations or permits, or to make such
filings or notifications, would not
reasonably be expected to have a Company
Material Adverse Effect.
SECTION 3.06 Permits; Compliance. Each of the Company and each
Subsidiary is in possession of all
franchises, grants, authorizations, licenses
(including liquor licenses), permits,
easements, variances, exceptions,
consents, certificates, approvals and
orders of any Governmental Authority
necessary for each such entity to own,
lease and operate its properties
(including the operation of any marinas) or
to carry on its business as it is
now being conducted (the "Company
Permits"), except where the failure to have,
or the suspension or cancellation of, any
of the Company Permits would not
reasonably be expected to have a Company
Material Adverse Effect. No suspension
or cancellation of any of the Company
Permits is pending or, to the knowledge of
the Company, threatened, except where the
failure to have, or the suspension or
cancellation of, any of the Company Permits
would not reasonably be expected to
have a Company Material Adverse Effect.
Each of the Company and each Subsidiary
is in compliance with, and since July 1,
2001 has been or has taken any
necessary steps to become in compliance
with, (a) any Law applicable to such
entity or by which any property or asset of
such entity is bound or affected,
and (b) any Contract or Company Permit to
which such entity is a party or by
which such entity or any property or asset
of such entity is bound, except, with
respect to clauses (a) and (b), for any
such conflicts, defaults, breaches or
violations that would not reasonably be
expected to have a Company Material
Adverse Effect.
SECTION 3.07 SEC Filings; Financial Statements; Undisclosed
Liabilities. (a) The Company has filed all
forms, reports, statements, schedules
and other documents required to be filed by
it with the SEC since July 1, 2001
(collectively, the "SEC Reports"). The SEC
Reports (i) were prepared in
accordance with the applicable requirements
of the Securities Act of 1933, as
amended (the "Securities Act"), the
Exchange Act, the Sarbanes-Oxley Act of 2002
and, in each case, the rules and
regulations promulgated thereunder, and (ii)
did not, at the time they were filed, or,
if amended, as of the date of such
amendment, contain any untrue statement of
a material fact or omit to state a
material fact required to be stated therein
or necessary in order to make the
statements made therein, in the light of
the circumstances under which they were
made, not misleading (including any
financial statements or other documentation
incorporated by reference therein). No
Subsidiary is required to file any form,
report or other document with the SEC. The
Company has made available to Parent
copies of all
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<PAGE>
correspondence between the SEC, on the one
hand, and the Company and any of the
Subsidiaries, on the other hand, since July
1, 2001 through the date of this
Agreement.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained
in the SEC Reports, when filed,
complied with applicable accounting
requirements and with published rules and
regulations of the SEC with respect
thereto, was prepared in accordance with
United States generally accepted accounting
principles ("GAAP") applied on a
consistent basis throughout the periods
indicated (except as may be indicated in
the notes thereto or, in the case of
unaudited statements, as permitted by Form
10-Q of the SEC) and each fairly presents,
in all material respects, the
consolidated financial position, results of
operations and cash flows of the
Company and its consolidated Subsidiaries
as at the respective dates thereof and
for the respective periods indicated
therein (subject, in the case of unaudited
statements, to normal and recurring
year-end adjustments). All of the
Subsidiaries are consolidated for
accounting purposes.
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the
consolidated Subsidiaries as at June 30,
2004 (including the notes thereto) included
in the Company's Annual Report on
Form 10-K for the fiscal year ended June
30, 2004, neither the Company nor any
Subsidiary has any liability or obligation
of any nature (whether accrued,
absolute, contingent or otherwise), except
for liabilities and obligations
incurred (i) in connection with the
Transactions, or (ii) in the ordinary course
of business and in a manner consistent with
past practice since June 30, 2004
that would not reasonably be expected to
have a Company Material Adverse Effect.
(d) The Company has made available to Parent a complete and
correct copy of any amendments or
modifications which have not yet been filed
with the SEC to Contracts which previously
have been filed by the Company with
the SEC pursuant to the Securities Act or
the Exchange Act.
SECTION 3.08 Information Supplied(a). None of the information
included or incorporated by reference in
the Proxy Statement will, at the date
it is first mailed to the Company's
stockholders or at the time of the Company
Stockholders' Meeting or at the time of any
amendment or supplement thereof,
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, except that no representation
is made by the Company with respect to
statements made or incorporated by
reference therein based on information
supplied by Parent or Merger Sub in
connection with the preparation of the Proxy
Statement for inclusion or incorporation by
reference therein. The Proxy
Statement will comply as to form in all
material respects with the requirements
of the Exchange Act and the rules and
regulations promulgated thereunder.
SECTION 3.09 Absence of Certain Changes or Events. Since June
30, 2004, there has not been any event,
circumstance, change, development or
effect that, individually or in the
aggregate, has had or would reasonably be
expected to have, a Company Material
Adverse Effect. Since June 30, 2004 and
prior to the date of this Agreement, except
as expressly contemplated by this
Agreement, (a) the Company and the
Subsidiaries have conducted their
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<PAGE>
businesses only in the ordinary course of
business and in a manner consistent
with past practice, and (b) neither the
Company nor any Subsidiary has:
(i) amended or otherwise changed its Certificate of
Incorporation or Bylaws or similar organizational documents;
(ii) declared, set aside, made or paid any dividend or other
distribution, payable in cash, stock, property or otherwise,
with
respect to any of its capital stock, except for dividends or
other
distributions by any Subsidiary only to the Company or any direct
or
indirect wholly owned Subsidiary;
(iii) reclassified, combined, split, subdivided or redeemed,
or purchased or otherwise acquired, directly or indirectly, any of
its
capital stock;
(iv) increased the compensation payable or to become payable
or the benefits provided to its directors, officers or
employees,
except for increases in the ordinary course of business and in a
manner
consistent with past practice, or granted any severance or
termination
pay to, or entered into any employment, bonus, change of control
or
severance agreement with, any director or officer or, except in
the
ordinary course of business in a manner consistent with past
practice,
any other employee of the Company or of any Subsidiary;
(v) suffered any damage, destruction or loss (whether or not
covered by insurance), other than in the ordinary course of
business,
that has had a Company Material Adverse Effect;
(vi) made any change in financial or Tax accounting methods or
practices materially affecting its assets, liabilities or
business,
except insofar as may have been required by a change in GAAP;
(vii) made any acquisition or disposition of any real
property;
(viii) made any material tax election or settled or
compromised any material United States federal, state or local
income
tax liability; or
(ix) announced an intention, entered into any formal or
informal agreement or otherwise made a commitment, to do any of
the
foregoing.
SECTION 3.10 Absence of Litigation. There is no litigation,
suit, claim, action, proceeding, hearing,
petition, grievance, complaint or
investigation (an "Action") pending or, to
the knowledge of the Company,
threatened against the Company or any
Subsidiary, or any property or asset of
the Company or any Subsidiary, before any
Governmental Authority or arbitrator
that would reasonably be expected to have a
Company Material Adverse Effect. As
of the date of this Agreement, no officer
or director of the Company is a
defendant in any Action in connection with
his status as an officer or director
of the Company or any Subsidiary. Other
than pursuant to Certificates of
Incorporation, Bylaws or other
organizational documents, no Contract between the
Company or any Subsidiary and any current
or former director or officer exists
that provides for indemnification. Neither
the Company nor any
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<PAGE>
Subsidiary nor any property or asset of the
Company or any Subsidiary is subject
to any continuing order of, consent decree,
settlement agreement or other
similar written agreement with, or, to the
knowledge of the Company, continuing
investigation by, any Governmental
Authority, or any order, writ, judgment,
injunction, decree, determination or award
of any Governmental Authority that
would reasonably be expected to have a
Company Material Adverse Effect.
SECTION 3.11 Employee Benefit Plans. (a) Section 3.11(a) of
the Company Disclosure Schedule lists all
employee benefit plans (as defined in
Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended
("ERISA")) and all bonus, stock option,
stock purchase, restricted stock,
incentive, deferred compensation, retiree
medical or life insurance,
supplemental retirement, severance or other
benefit plans, programs or
arrangements, and all employment,
termination, severance or other contracts or
agreements to which the Company or any
Subsidiary is a party, with respect to
which the Company or any Subsidiary has any
obligation or which are maintained,
contributed to or sponsored by the Company
or any Subsidiary for the benefit of
any current or former employee, consultant,
officer or director of the Company
or any Subsidiary (collectively, the
"Plans"). The Company has made available to
Parent a true and complete copy of each
Plan and has made available to Parent a
true and complete copy of (where
applicable) (A) each trust or funding
arrangement prepared in connection with
each such Plan, (B) the two most
recently filed annual reports on Internal
Revenue Service ("IRS") Form 5500, (C)
the most recently received IRS
determination letter for each such Plan, (D) the
two most recently prepared actuarial
reports and financial statements in
connection with each such Plan, and (E) the
most recent summary plan description
and any material written communications (or
a description of any material oral
communications) by the Company or the
Subsidiaries to any current or former
employees, consultants, or directors of the
Company or any Subsidiary concerning
the extent of the benefits provided under a
Plan.
(b) Neither the Company nor any Subsidiary has now or any time
contributed to, sponsored, or maintained
(i) a pension plan (within the meaning
of Section 3(2) of ERISA) subject to
Section 412 of the Code or Title IV of
ERISA; (ii) a multiemployer plan (within
the meaning of Section 3(37) or
4001(a)(3) of ERISA) (a "Multiemployer
Plan"); or (iii) a single employer
pension plan (within the meaning of Section
4001(a)(15) of ERISA) for which the
Company or any Subsidiary could incur
liability under Section 4063 or 4064 of
ERISA (a "Multiple Employer Plan"). No Plan
exists that could result in the
payment to any present or former employee,
director or consultant of the Company
or any Subsidiary of any money or other
property or accelerate or provide any
other rights or benefits to any current or
former employee of the Company or any
Subsidiary as a result of the consummation
of the Transactions (whether alone or
in connection with any subsequent event).
There is no contract, plan or
arrangement (written or otherwise) covering
any current or former employee of
the Company or any Subsidiary that,
individually or collectively, could give
rise to the payment of any amount that
would not be deductible pursuant to the
terms of Section 280G of the United States
Internal Revenue Code of 1986, as
amended (the "Code").
(c) With respect to the Plans, no event has occurred and, to
the knowledge of the Company, there exists
no condition or set of circumstances,
in connection with which the Company or any
Subsidiary could reasonably be
expected to be subject to any actual or
14
<PAGE>
contingent liability under the terms of
such Plan or any applicable Law which
would reasonably be expected to have a
Company Material Adverse Effect.
(d) Each Plan that is intended to be qualified under Section
401(a) of the Code has received a favorable
determination letter or prototype
opinion letter from the IRS covering all of
the provisions applicable to the
Plan for which determination letters or
prototype opinion letters are currently
available that the Plan is so qualified and
each trust established in connection
with any Plan which is intended to be
exempt from federal income taxation under
Section 501(a) of the Code is so exempt,
and, to the knowledge of the Company,
no circumstance exists that could
reasonably be expected to result in the
revocation of such exemption.
(e) (i) Each Plan has been established and administered in
accordance with its terms, and in
compliance with the applicable provisions of
ERISA, the Code and other applicable Laws,
except to the extent such
noncompliance, individually or in the
aggregate, would not reasonably be
expected to have a Company Material Adverse
Effect, and (ii) no Plan provides
retiree welfare benefits, and neither the
Company nor any Subsidiary has any
obligation to provide any retiree welfare
benefits other than as required by
Section 4980B of the Code.
(f) With respect to any Plan, (i) no Actions (other than
routine claims for benefits in the ordinary
course) are pending or, to the
knowledge of the Company, threatened, that
would reasonably be expected to have
a Company Material Adverse Effect, (ii) to
the knowledge of the Company, no
facts or circumstances exist that could
reasonably be expected to give rise to
any such Actions, and (iii) no
administrative investigation, audit or other
administrative proceeding by the Department
of Labor, the IRS or other
Governmental Authority is pending, in
progress or, to the knowledge of the
Company, threatened that could reasonably
be expected to have a Company Material
Adverse Effect.
SECTION 3.12 Labor and Employment Matters. Neither the Company
nor any Subsidiary is a party to any
collective bargaining agreement or other
labor union contract applicable to persons
employed by the Company or any
Subsidiary, nor, to the knowledge of the
Company, are there any activities or
proceedings of any labor union to organize
any such employees. As of the date of
this Agreement, there are no unfair labor
practice complaints pending against
the Company or any Subsidiary before the
National Labor Relations Board or any
other Governmental Authority or any current
union representation questions
involving employees of the Company or any
Subsidiary. As of the date of this
Agreement, there is no strike, controversy,
slowdown, work stoppage or lockout,
or, to the knowledge of the Company,
threatened in writing, by or with respect
to any employees of the Company or any
Subsidiary.
SECTION 3.13 Real Property; Title to Assets. (a) Section
3.13(a) of the Company Disclosure Schedule
lists each parcel of real property
(including submerged land) currently owned
by the Company or any Subsidiary and
sets forth the Company or the applicable
Subsidiary owning such properties
(collectively, the "Owned Real
Properties"). The Company or the applicable
Subsidiary set forth on Section 3.13(a) of
the Company Disclosure Schedule owns
fee simple title to the Owned Real
Properties, free and clear of all mortgages,
pledges, liens, restrictions, security
interests, conditional and installment
sale agreements, encumbrances, charges or
other claims of third parties of any
kind, including any easement, right of way
or other encumbrance to title, or any
option, right of first refusal, or right of
first offer (collectively,
15
<PAGE>
"Liens"), other than (i) Liens for current
taxes and assessments not yet due and
payable, (ii) inchoate mechanics' and
materialmen's Liens for construction in
progress, and (iii) to the extent such
Liens would not reasonably be expected to
have a Company Material Adverse Effect, (A)
workmen's, repairmen's,
warehousemen's and carriers' Liens arising
in the ordinary course of business of
the Company or such Subsidiary consistent
with past practice, (B) all matters of
record, and (C) all Liens and other
imperfections of title and encumbrances that
are typical for the applicable property
type and locality and which would not
reasonably be expected to materially
interfere with the conduct of the business
of the Company (collectively, "Permitted
Liens"). None of the Properties is
subject to any governmental decree or order
to be sold nor is being condemned,
expropriated or otherwise taken by any
public authority with or without payment
of compensation therefore, nor, to the
knowledge of the Company, has any such
condemnation, expropriation or taking been
proposed. Neither the Company nor any
Subsidiary has violated any material
covenants, conditions or restrictions
affecting any Properties (as defined below)
which violations would reasonably be
expected to have a Company Material Adverse
Effect.
(b)
Section 3.13(b) of the Company Disclosure Schedule lists
each parcel of real property (including
submerged land) currently leased or
subleased by the Company or any Subsidiary
(collectively, the "Leased
Properties"; the Leased Properties,
together with the Owned Real Properties,
collectively, the "Properties") and sets
forth the Company or the Subsidiary
holding such leasehold interest, with the
name of the lessor and the date of the
lease, sublease, assignment of the lease,
any guaranty given or leasing
commissions remaining payable by the
Company or any Subsidiary in connection
therewith and each material amendment to
any of the foregoing (collectively, the
"Lease Documents"). The Company or the
applicable Subsidiary set forth on
Section 3.13(b) of the Company Disclosure
Schedule owns a valid leasehold
interest in the Leased Properties, free and
clear of all Liens other than
Permitted Liens. True, correct and complete
copies of all Lease Documents have
been delivered to Parent. Each of the Lease
Documents is valid, binding and in
full force and effect as against the
Company or the Subsidiaries and, to the
Company's knowledge, as against the other
party thereto. Neither the Company nor
any Subsidiary has received written notice
under any of the Lease Documents of
any default, and, to the Company's
knowledge, no event has occurred which, with
notice or lapse of time or both, would
constitute a material default by the
Company or the applicable Subsidiaries.
(c) There are no latent defects or adverse physical conditions
affecting any Property or the improvements
thereon, other than those that would
not reasonably be expected to have a
Company Material Adverse Effect.
(d) Valid policies of title insurance or title commitments for
which premiums have been paid
(collectively, the "Title Policies") have been
issued insuring the Company or the
applicable Subsidiary's fee simple or
leasehold title to the Properties owned or
ground leased by the Company or the
applicable Subsidiaries in amounts at least
equal to the purchase price thereof
paid by the Company or the applicable
Subsidiary, subject only to Permitted
Liens. No claim has been made against any
Title Policies. The Company and the
Subsidiaries have not received any written
notice and are not otherwise aware
that the Title Policies are not in full
force and effect.
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(e) Section 3.13(e) of the Company Disclosure Schedule lists
each Property which is under construction
as of the date hereof. The Company has
obtained valid construction permits with
respect to such Property.
(f) Neither the Company nor any Subsidiary is a party to any
management, franchise, license or other
agreement for the management of
operations conducted at any Property other
than the Hyatt Hotel Franchise
Agreement, dated November 14, 1994, between
Hyatt Franchise Corporation and Rahn
Pier Mgt., Inc, with respect to the Hyatt
Regency Pier 66 Resort (the "Franchise
Agreement"), and the License Agreement,
dated as of June 28, 1994, between
Radisson Hotels International, Inc. and
Rahn Bahia Mar Mgmt., Inc., with respect
to the Radisson Bahia Mar Resort (the
"License Agreement"). True, correct and
complete copies of each of the Franchise
Agreement and the License Agreement, as
amended, have been made available to
Parent. Each of the Franchise Agreement and
the License Agreement is valid, binding and
in full force and effect as against
the Company or the Subsidiaries, and, to
the Company's knowledge, as against the
other party thereto. Neither the Company
nor any Subsidiary has delivered or
received any written notice of any default
under the Franchise Agreement or the
License Agreement, and, to the Company's
knowledge, no event has occurred which,
with notice or lapse of time or both, would
constitute a material default by any
party under the Franchise Agreement or the
License Agreement.
(g) True, correct and complete copies of the Membership Plan
and Membership Rules and Regulations for
each of the Premier Clubs, as amended
(the "Premier Club Documents"), together
with a true, correct and complete list
of all Premier Club members (including
honorary lifetime members) and deposits
made thereby with respect to the Premier
Club, have been made available to
Parent. Except as would not reasonably be
expected to have a Company Material
Adverse Effect, (i) the Premier Club
Documents are valid, binding and in full
force and effect as against the Company or
the Subsidiaries, (ii) neither the
Company nor any Subsidiary has received any
written notice of any default by the
Company or any Subsidiary under the Premier
Club Documents, and (iii) to the
Company's knowledge, no event has occurred
which, with notice or lapse of time
or both, would constitute a default by the
Company or any Subsidiary under the
Premier Club Documents.
(h) The Company or the Subsidiaries own all material
furniture, fixtures, equipment, operating
supplies and other personal property
(the "Personal Property") necessary for the
operation of each Property, subject
to no Liens, except as would not reasonably
be expected to have a Company
Material Adverse Effect.
(i) None of 2301 SE 17th St., Ltd., Rahn Bahia Mar, Ltd.,
Florida Golf Management, Inc., New Boca,
LeHill Partners, L.P., Panthers RPN
Limited or Panthers Grey Oaks, Inc. (the
"Owned Real Estate Subsidiaries") has
owned real property other than the Owned
Real Property described on Section 3.13
(a) of the Company Disclosure Schedule or
has engaged in any business other than
the ownership and operation of such Owned
Real Property.
SECTION 3.14 Intellectual Property. (a) Except as would not
reasonably be expected to have a Company
Material Adverse Effect, (i) the
conduct of the business of the Company and
the Subsidiaries as currently
conducted does not infringe upon or
misappropriate the Intellectual Property
rights of any third party, and no claim has
been asserted to the Company
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or any Subsidiary that the conduct of the
business of the Company and the
Subsidiaries as currently conducted
infringes upon or may infringe upon or
misappropriates the Intellectual Property
rights of any third party; (ii) with
respect to each item of Intellectual
Property that is owned by the Company or a
Subsidiary ("Owned Intellectual Property"),
the Company or a Subsidiary is the
owner of the entire right, title and
interest in and to such Owned Intellectual
Property and is entitled to use such Owned
Intellectual Property in the
continued operation of its respective
business; (iii) with respect to each item
of Intellectual Property that is licensed
to or otherwise held or used by the
Company or a Subsidiary ("Licensed
Intellectual Property"), the Company or a
Subsidiary has the right to use such
Licensed Intellectual Property in the
continued operation of its respective
business in accordance with the terms of
the license agreement governing such
Licensed Intellectual Property; (iv) none
of the Owned Intellectual Property has been
adjudged invalid or unenforceable in
whole or in part and, to the knowledge of
the Company, the Owned Intellectual
Property is valid and enforceable; (v) to
the knowledge of the Company, no
person is engaging in any activity that
infringes upon the Owned Intellectual
Property; (vi) to the knowledge of the
Company, each license of the Licensed
Intellectual Property is valid and
enforceable, is binding on all parties to
such license, and is in full force and
effect; (vii) to the knowledge of the
Company, no party to any license of the
Licensed Intellectual Property is in
breach thereof or default thereunder;
(viii) the Company has taken all
reasonable actions (including executing
non-disclosure and intellectual property
assignment agreements) to protect, preserve
and maintain the Owned Intellectual
Property; and (ix) neither the execution of
this Agreement nor the consummation
of any Transaction shall adversely affect
any of the Company's rights with
respect to the Owned Intellectual Property
or the Licensed Intellectual
Property.
(b) For purposes of this Agreement, "Intellectual Property"
means (i) United States patents, patent
applications and statutory invention
registrations, (ii) trademarks, service
marks, trade dress, logos, trade names,
corporate names, domain names and other
source identifiers, and registrations
and applications for registration thereof,
(iii) copyrightable works,
copyrights, and registrations and
applications for registration thereof and (iv)
confidential and proprietary information,
including trade secrets and know-how.
SECTION 3.15 Taxes. (a) The Company and the Subsidiaries (i)
have timely filed or caused to be filed or
will timely file or cause to be filed
(taking into account any extension of time
to file granted or obtained) all
material Tax Returns required to be filed
by them, and all such filed Tax
Returns are true, correct and complete in
all material respects; and (ii) have
timely paid or will timely pay all material
amounts of Taxes due and payable
except to the extent that such Taxes are
being contested in good faith and for
which the Company or the appropriate
Subsidiary has set aside adequate reserves
in accordance with GAAP. All material
amounts of Taxes required to have been
withheld by or with respect to the Company
and its the Subsidiaries have been or
will be timely withheld and remitted to the
applicable taxing authority.
(b) There are no pending or, to the knowledge of the Company,
threatened audits, examinations,
investigations or other proceedings in respect
of any Tax or Tax matter of the Company or
any Subsidiary. No deficiency for any
material amount of Tax has been asserted or
assessed by any taxing authority in
writing against the Company or any
Subsidiary, which deficiency has not been
satisfied by payment, settled or been
withdrawn or contested in good faith and
for which the Company or the appropriate
Subsidiary has set aside adequate
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reserves in accordance with GAAP. There are
no Tax liens on any assets of the
Company or any Subsidiary (other than any
liens for Taxes not yet due and
payable for which adequate reserves have
been made in accordance with GAAP or
for Taxes being contested in good faith).
Neither the Company nor any Subsidiary
is subject to any accumulated earnings tax
or personal holding company tax.
(c) Neither the Company nor any Subsidiary has made or is
obligated to make any payment that would
not be deductible pursuant to Section
162(m) of the Code.
(d) There are no pending or, to the knowledge of the Company,
potential claims for indemnity (other than
customary indemnity under credit or
any other agreements or arrangements)
against the Company or any Subsidiary
(other than against each other) under any
indemnification, allocation or sharing
agreement with respect to income Taxes.
(e) Neither the Company nor any Subsidiary has waived any
statute of limitations in respect of Taxes
or agreed to any extension of time
with respect to a Tax assessment or
deficiency (other than pursuant to
extensions of time to file Tax Returns
obtained in the ordinary course).
(f) No claim is pending by a taxing authority in a
jurisdiction where the Company or any
Subsidiary does not file a Tax Return that
the Company or such Subsidiary is or may be
subject to Tax by such jurisdiction.
(g) Neither the Company nor any Subsidiary is a party to any
understanding or arrangement described in
Section 6111(d) or Section
6662(d)(2)(C)(iii) of the Code.
(h) There are no proposed reassessments of any property owned
by the Company and the Subsidiaries that
could result in a material increase in
the amount of any Tax to which the Company
or any such Subsidiary would be
subject.
(i) Neither the Company nor any Subsidiary will be required to
include any item of income in, or exclude
any item of deduction from, taxable
income as a result of any (1) adjustment
pursuant to Section 481 of the Code,
the regulations thereunder or any similar
provision under state or local Law,
(2) "closing agreement" as described in
Section 7121 of the Code (or any
corresponding or similar provision of
state, local or foreign income Tax Law)
executed on or prior to the Closing, (3)
intercompany transaction or excess loss
account described in the Treasury
Regulations under Section 1502 of the Code (or
any corresponding or similar provision of
state, local or foreign income Tax
Law), (4) installment sale or open
transaction disposition made on or prior to
the Closing, or (5) prepaid amount received
on or prior to the Closing.
(j) Neither the Company nor any Subsidiary has made an
election under Section 341(f) of the
Code.
(k) For purposes of this Agreement:
(i) "Tax" or "Taxes" shall mean any and all federal, state,
local and foreign income, gross receipts, license, payroll,
employment,
excise, severance, stamp,
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occupation, premium, windfall profits, environmental, customs
duties,
capital stock, franchise, profits, withholding, social
security,
unemployment, disability, real property, personal property, sales,
use,
transfer, registration, value added, alternative or add-on
minimum,
estimated, or other taxes of any kind (together with any and
all
interest, penalties, additions to tax and additional amounts
imposed
with respect thereto) imposed by any governmental or Tax
authority.
(ii) "Tax Returns" means any and all returns, declarations,
claims for refund, or information returns or statements, reports
and
forms relating to Taxes filed with any Tax authority (including
any
schedule or attachment thereto) with respect to the Company or
the
Subsidiaries, including any amendment thereof.
SECTION 3.16 Environmental Matters. (a) Except as would not
reasonably be expected to have a Company
Material Adverse Effect: (i) none of
the Company or any of the Subsidiaries has
violated, or is in violation of, any
Environmental Law; (ii) to the knowledge of
the Company, there is and has been
no presence, release or threat of release
of Hazardous Substances at, on, under
or affecting (A) any of the properties
currently owned, leased or operated by
the Company or any of the Subsidiaries or,
during the period of the Company's or
the Subsidiaries' ownership, lease or
operation thereof, formerly owned, leased
or operated by the Company or any of the
Subsidiaries, or (B) any location at
which Hazardous Substances are present for
which the Company or any of the
Subsidiaries is or is allegedly liable,
under conditions in the case of either
clauses (A) or (B) that would reasonably be
expected to result in a liability or
obligation to the Company or any of the
Subsidiaries, or, as the Company and the
Subsidiaries are currently operated,
adversely affect the revenues of the
Company or any of the Subsidiaries; (iii)
the Company and the Subsidiaries have
obtained and are and have been in
compliance with all, and have not violated
any, required Environmental Permits; (iv)
there are no written claims pending
or, to the knowledge of the Company,
threatened against the Company or any of
the Subsidiaries alleging violations of or
liability or obligations under any
Environmental Law or otherwise concerning
the presence or release of Hazardous
Substances; and (v) none of the Company or
any of the Subsidiaries has received
any written notice of, is a party to, or,
to the knowledge of the Company, is
reasonably likely to be affected by any
proceedings, any investigations or any
agreements concerning such matters. The
Company has provided to Parent a copy of
all material studies, audits, assessments
or investigations concerning
compliance with, or liability or
obligations under, Environmental Law affecting
the Company or any Subsidiary that is in
the possession or, to the knowledge of
the Company, control of the Company or any
Subsidiary.
(b) For purposes of this Agreement:
(i) "Environmental Laws" means any Laws (including common law)
of the United States federal, state, local, non-United States, or
any
other Governmental Authority, relating to (A) releases or
threatened
releases of Hazardous Substances or materials containing
Hazardous
Substances; (B) the manufacture, handling, transport, use,
treatment,
storage or disposal of Hazardous Substances or materials
containing
Hazardous Substances; or (C) pollution or protection of the
environment
or human health and safety as affected by Hazardous Substances
or
materials containing Hazardous Substances.
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(ii) "Environmental Permits" means any permit, license
registration, approval, notification or any other authorization
pursuant to Environmental Law.
(iii) "Hazardous Substances" means (A) those substances,
materials or wastes defined as toxic, hazardous, acutely
hazardous,
pollutants, contaminants
