EXECUTION COPY
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER AND CONTRIBUTION
Dated as of March 3, 2005
By and Among
EMPIRE RESORTS, INC.,
EMPIRE RESORTS HOLDINGS, INC.,
EMPIRE RESORTS SUB, INC.,
CONCORD ASSOCIATES LIMITED PARTNERSHIP
and
SULLIVAN RESORTS LLC
TABLE OF CONTENTS
PAGE
ARTICLE I.
Definitions
Certain
Definitions............................................................2
ARTICLE II.
The Merger and Contribution; Closing
Section 2.1 Time and Place of
Closing........................................6
Section 2.2 The
Merger.......................................................6
Section 2.3 Effective
Time...................................................6
Section 2.4 Effects of the
Merger............................................6
Section 2.5 Certificate of Incorporation and Bylaws of Surviving
Corporation.6
Section 2.6 Name Change; Certificate of Incorporation and Bylaws
of Newco....7
Section 2.7 Officers and
Directors...........................................7
Section 2.8 Initial Board of Directors of
Newco..............................7
Section 2.9 Director's and Officer's
Insurance...............................8
Section 2.10 Effect on Capital
Stock..........................................8
Section 2.11 Effect on Class B and Class E Preferred
Stock....................8
Section 2.12 Stock
Options....................................................9
Section 2.13 Exchange of Shares in the
Merger.................................9
Section 2.14 Tax-Free
Treatment..............................................11
Section 2.15
Contribution....................................................11
Section 2.16 Issuance of Transferor Shares; Assumption of
Liabilities........13
ARTICLE III.
Representations and Warranties of Transferor
Section 3.1 Due Formation, Existence,
Etc...................................14
Section 3.2 Permits and
Approvals...........................................15
Section 3.3 Consents and
Approval...........................................15
Section 3.4 Ground
Lease....................................................15
Section 3.5
Licenses........................................................16
Section 3.6
Leases..........................................................16
Section 3.7 Service
Contracts...............................................16
Section 3.8 Empire Payment
Obligations......................................16
Section 3.9 Title to
Properties.............................................16
Section 3.10 Title to Ground
Lease...........................................16
Section 3.11 Title to Licenses and Service
Contracts.........................17
Section 3.12 Necessary
Property..............................................17
Section 3.13 No Tenants or
Occupants.........................................17
Section 3.14 Compliance with
Laws............................................17
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Section 3.15
Litigation......................................................17
Section 3.16
Condemnation....................................................17
Section 3.17 Purchase
Options................................................17
Section 3.18 Environmental
Matters...........................................17
Section 3.19
Insurance.......................................................18
Section 3.20 Brokers and
Finders.............................................18
Section 3.21
Taxes...........................................................18
Section 3.22 Employee
Benefits...............................................19
Section 3.23 Water
Capacity..................................................20
Section 3.24 Tax
Opinion.....................................................20
Section 3.25
Disclaimer......................................................20
ARTICLE IV.
Representations and Warranties of Empire
Section 4.1 Organization, Good Standing and
Qualification...................20
Section 4.2 Capital
Structure...............................................21
Section 4.3 Corporate Authority;
Approval...................................22
Section 4.4 Governmental Filings; No Violations; Certain
Contracts, Etc.....23
Section 4.5 Empire Reports; Financial
Statements............................23
Section 4.6 Absence of Certain
Changes......................................25
Section 4.7 Litigation and
Liabilities......................................25
Section 4.8 Compliance with Laws;
Licenses..................................25
Section 4.9 Material
Contracts..............................................26
Section 4.10 Takeover
Statutes...............................................26
Section 4.11 Affiliate
Transactions..........................................26
Section 4.12
Taxes...........................................................27
Section 4.13 Permits and
Approvals...........................................27
Section 4.14 Catskill Development,
L.L.C.....................................28
Section 4.15 Monticello
Property.............................................28
Section 4.16
Condemnation....................................................28
Section 4.17 Environmental
Matters...........................................28
Section 4.18 Labor and Employee
Benefits.....................................28
Section 4.19 Tax
Opinion.....................................................29
ARTICLE V.
Covenants of the Parties
Section 5.1 Interim Operations of
Empire....................................29
Section 5.2 Interim Operations of
Transferor................................30
Section 5.3 Land Use Applications and
Approvals.............................31
Section 5.4 Environmental
Remediation.......................................32
Section 5.5 Restrictions Regarding Certain Other
Transactions...............32
Section 5.6 Restrictions on Gaming Facilities on Retained
Property..........34
Section 5.7
Access..........................................................34
Section 5.8 Further Assurances; Reasonable Efforts to Satisfy
Conditions....34
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Section 5.9 Public
Announcements............................................35
Section 5.10 Proxy Statement; Registration Statement; Blue
Sky...............36
Section 5.11 Stockholders' Meeting; Board
Recommendation.....................37
Section 5.12
Condemnation....................................................37
Section 5.13
Casualty........................................................38
Section 5.14 Changes in Representations and
Warranties.......................38
Section 5.15 Additional
Agreements...........................................38
Section 5.16 Golf Courses and Additional
Property............................39
Section 5.17 Newco Operations on the Concord Owned
Property..................41
Section 5.18 Employment of
Employees.........................................41
Section 5.19 Tax-free
Qualification..........................................41
Section 5.20 Confidentiality; Release of
Information.........................41
Section 5.21 Tax
Representations.............................................41
Section 5.22 Requisite
Approvals.............................................42
Section 5.23 Refinancing Cooperation;
Satisfaction of Empire Payment
Obligations......................43
Section 5.24 HSR Act; Certain Registration
Rights............................43
ARTICLE VI.
Evidence and Condition of Title
Section 6.1 Evidence and Condition of
Title.................................43
Section 6.2 Preliminary Evidence of
Title...................................43
Section 6.3 Title
Defects...................................................44
Section 6.4 Material Title Defects and New Material Title
Defects Prior to
Closing........................................45
Section 6.5 Voluntary Title
Defects.........................................45
Section 6.6 Permitted
Exceptions............................................45
ARTICLE VII.
Conditions Precedent
Section 7.1 Conditions to Empire's
Obligations..............................46
Section 7.2 Conditions to Transferor's
Obligation...........................48
ARTICLE VIII.
Closing Deliveries
Section 8.1 Deliveries by Empire, Newco and/or Merger
Sub...................50
Section 8.2 Deliveries by
Transferor........................................51
Section 8.3
Apportionments..................................................53
ARTICLE IX.
Termination and Default
Section 9.1 Termination.
(a)..............................................55
Section 9.2
Default.........................................................57
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ARTICLE X.
Miscellaneous
Section 10.1
Counterparts....................................................58
Section 10.2 GOVERNING LAW; JURISDICTION AND FORUM; WAIVER OF JURY
TRIAL.....58
Section 10.3 Dispute
Resolution..............................................59
Section 10.4 Entire Agreement;
Beneficiaries.................................59
Section 10.5
Notices.........................................................59
Section 10.6 Successors and
Assigns..........................................60
Section 10.7 Headings;
Definitions...........................................60
Section 10.8 Amendments and
Waivers..........................................61
Section 10.9 Specific
Performance............................................61
Section 10.10
Severability....................................................61
Section 10.11 Fees and
Expenses...............................................61
Section 10.12
Transferor......................................................62
Section 10.13 Mutual
Drafting.................................................62
Section 10.14 Gaming
Facilities...............................................62
Section 10.15 Letter Agreement
Superseded.....................................62
EXHIBITS AND SCHEDULES
Exhibit A - Registration Rights Term Sheet
Exhibit B - Map of Concord Owned Property, Concord Hotel Site,
Golf Courses and
Retained Property
Exhibit C - Monticello Property
Exhibit D - Grossinger's Property
Exhibit E - Trademarks, Service Marks, Logos and Tradenames
Associated with
Grossinger's Property and Concord Property
Exhibit F - Form of Trade Name License Agreement
Exhibit G - Excluded Personal Property
Exhibit H - Golf Course Agreement Term Sheet
Exhibit I - REA Term Sheet Exhibit J - Form of Tax Representation
Certificates
Empire Disclosure Schedule
Transferor Disclosure Schedule
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DEFINED TERMS
Acquisition Proposal......................32 Golf Course
Agreement.....................38
Action....................................58 Governmental
Entity.......................22
Additional Agreements.....................38 Grossinger's
Property.....................11
Affiliate..................................2 Ground
Lease...............................3
Agreement..................................1 Hazardous
Materials.......................18
Assumed Liabilities.......................13 Indian Tribe
Agreement.....................3
Assumption Agreement......................13
knowledge..................................4
Audit Date................................23 Knowledge or
knowledge.....................4
Book Entry Shares..........................9
Law........................................4
Catskills Acquisition.....................33 Lead Based
Paint..........................18
Catskills Transfer........................33 Leased
Property...........................11
Certificate of Merger......................6
Leases....................................12
Certificates...............................9 Legal
Requirements........................17
Closing....................................5
Lender....................................14
Closing Conditions.........................5 Lender
Consents...........................15
Closing Date...............................6 Letter
Agreement...........................2
Code.......................................1
Licenses..................................12
Concord Associates.........................1
Lien.......................................4
Concord Owned Property....................11 MAC Notice
Party..........................56
Concord Property..........................11 Material
Adverse Effect....................4
Confidentiality Agreement.................34 materially
and adversely..................37
Contract..................................23
Merger.....................................1
Contribution...............................1 Merger
Sub.................................1
Covered Persons...........................26 Monticello
Property........................4
Deeds.....................................51 New Material
Title Defect(s)..............44
Delaware Secretary of State................6
Newco......................................1
DGCL.......................................3 Newco Common
Stock.........................8
Effective Time.............................6 Option
Agreement...........................2
Empire.....................................1 Owned
Property............................12
Empire Common Stock.......................20 Owner's
Title Commitments.................43
Empire Disclosure Schedule.................3 Permitted
Exceptions......................45
Empire Licenses...........................25
Person.....................................4
Empire Material Contracts.................26 Preferred
Stock...........................21
Empire Merger Consideration................8
Properties................................13
Empire Proxy Statement....................35 Purchase
Shares...........................13
Empire Reports............................23 Registration
Statement....................35
Empire Requisite Vote.....................22
Representatives...........................32
Environmental Legal Requirements..........18 Requisite
Approvals.......................42
Exchange Act...............................3 Requisite
Cayuga Approvals................42
Exchange Agent.............................9 Requisite
Seneca Cayuga Approvals.........42
Exchange Fund..............................9 Retained
Property..........................5
Frontline.................................35
SEC....................................5, 23
GAAP...................................... 3 Securities
Act.............................5
Gaming Facility............................4 Service
Contracts.........................52
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Shareholders Agreement.....................2 Tax
Returns................................5
SOXA,.....................................24 Title
Company.............................43
Stockholders Meeting......................37 Title Review
Period.......................44
Subsidiary.................................5 Trade Name
License Agreement..............12
Sullivan Resorts...........................1
Transactions...............................1
Surveys...................................43
Transferor.................................1
Surviving Corporation......................6 Transferor
Disclosure Schedule.............5
Takeover Statute..........................26 Transferor's
Title Cure Election Period...44
Tax Forms.................................52
U.S........................................5
Tax or Taxes...............................5 Voting
Agreements..........................2
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AGREEMENT AND PLAN OF MERGER AND CONTRIBUTION
THIS AGREEMENT AND PLAN OF MERGER AND
CONTRIBUTION (this
"AGREEMENT"), dated as of March 3, 2005, is entered into by and
among EMPIRE
RESORTS, INC., a Delaware corporation ("EMPIRE"), EMPIRE RESORTS
HOLDINGS, INC.,
a Delaware corporation and wholly owned subsidiary of Empire
("NEWCO"), EMPIRE
RESORTS SUB, INC., a Delaware corporation and wholly owned
subsidiary of Newco
("MERGER SUB"), and CONCORD ASSOCIATES LIMITED PARTNERSHIP, a New
York limited
partnership ("CONCORD ASSOCIATES") and SULLIVAN RESORTS, LLC, a New
York limited
liability company ("SULLIVAN RESORTS") (Concord Associates and
Sullivan Resorts
being referred to herein, collectively, as "TRANSFEROR").
Unless otherwise
specified, capitalized terms used herein shall have the meaning
ascribed to them
in Article I.
WHEREAS, Newco is a newly formed corporation that
has issued and
outstanding 100 shares of capital stock, all of which are owned by
Empire; and
WHEREAS, Empire has caused Newco to form Merger
Sub, all of the
outstanding capital stock of which is owned by Newco; and
WHEREAS, the respective Boards of Directors of Empire
and Merger Sub
have approved this Agreement and the merger of Merger Sub with and
into Empire,
with Empire continuing as the surviving corporation (the
"MERGER"), upon the
terms and subject to the conditions set forth in this Agreement;
and
WHEREAS, Transferor owns fee simple or leasehold
title to the
Properties (as defined below); and
WHEREAS, Transferor desires to contribute and
Newco desires to
acquire, INTER ALIA, the Properties in exchange for the
Transferor Shares (as
hereinafter defined) and the assumption or payment by Newco
of certain
liabilities of Transferor on the terms and conditions hereinafter
set forth (the
"CONTRIBUTION" and collectively with the Merger, the
"TRANSACTIONS"); and
WHEREAS, the Board of Directors of Newco has
approved this
Agreement, the Transactions and the other transactions
contemplated hereby and
the Contribution upon the terms and subject to the conditions set
forth in this
Agreement; and
WHEREAS, for U.S. federal income tax purposes, it is
intended that
the Merger will qualify as a reorganization within the meaning of
Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "CODE"),
and that the
Merger and the Contribution, taken together, will qualify as a
transaction
described in Section 351 of the Code; and
WHEREAS, each outstanding share of Empire Common
Stock (other than
shares of Empire Common Stock held in the treasury of Empire)
shall cease to
exist and shall be converted into the right to receive one share of
Newco Common
Stock; and
WHEREAS, Empire and Transferor have executed and
delivered a letter
agreement, dated as of November 12, 2004 (the "LETTER AGREEMENT"),
pursuant to
which the parties agreed to enter into this Agreement and
consummate the
Transactions and the other transactions contemplated hereby
subject to the
provisions hereof; and
WHEREAS, in connection with the parties' execution
and delivery of
the Letter Agreement, (a) certain stockholders of Empire
entered into Voting
Agreements with Transferor dated as of November 12, 2004
(the "VOTING
AGREEMENTS"), as amended by Amendment No. 1 to Voting Agreement
dated as of the
date hereof (the "Voting Agreement Amendment"); and (b) Empire
entered into an
Option Agreement with Concord Associates, dated as of November
12, 2004, as
amended by Amendment No. 1 to Option Agreement dated as of the
date hereof (the
"OPTION AGREEMENT") and (c) the parties agreed, as a
condition to the
consummation of the Transactions, to enter into a Registration
Rights Agreement
on substantially the same terms as are set forth in the term
sheet attached as
EXHIBIT A hereto and otherwise in reasonable and customary
form (the
"REGISTRATION RIGHTS AGREEMENT"); and
WHEREAS, in order to more fully and completely describe
and document
the transactions provided for in the Letter Agreement, the
parties have agreed
to execute and deliver this Agreement, which shall
supersede the Letter
Agreement in all respects.
NOW, THEREFORE, in consideration of the foregoing
and the mutual
covenants and agreements contained in this Agreement, and
intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
CERTAIN DEFINITIONS. As used in this Agreement the
following terms
shall have the following respective meanings:
"AFFILIATE" means, with respect to any Person,
another Person that
directly or indirectly controls, is controlled by, or is
under common
control with, such first Person, where "control" means
the possession,
directly or indirectly, of the power to direct or cause the
direction of
the management policies of a Person, whether through the
ownership of
voting securities, by contract, as trustee or executor, or
otherwise.
"CONCORD HOTEL SITE" means up to approximately 100
acres of land
owned by Concord Associates in Kiamesha Lake, New York,
which is intended
to be conveyed to the United States in trust for a native
american indian
tribe or nation and is intended to be a portion of Lots
1A, 1B and/or 2
more particularly described in EXHIBIT B hereto.
"CONTEMPLATED BUSINESS" means (a) with respect to
Transferor, the
ownership, development, operation, use and maintenance of
the Retained
Property for residential purposes, including the use of
the Golf Course
pursuant to the Golf Course Agreement and (b) with
respect to Empire
and/or Newco, the ownership, development, operation, use
and maintenance
of Class III gaming facilities.
2
"DGCL" shall mean the General Corporation Law of
the State of
Delaware.
"EMPIRE DISCLOSURE SCHEDULE" shall mean the Disclosure
Schedule of
Empire, dated as of the date hereof.
"ERISA" shall mean the Employee Retirement Income
Security Act of
1974, as amended.
"ERISA AFFILIATE" of any Person means any other
Person that,
together with such Person, would be treated as a single
employer under
Section 414 of the Code.
"EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as
amended, and the regulations promulgated thereunder.
"GAAP" shall mean U.S. generally accepted accounting
principles,
consistently applied.
"GROUND LEASE" shall mean the Lease, dated July 1,
1968, executed by
Nalou Realty Corp., as landlord, and Kiamesha Concord, Inc.,
as tenant as
amended, modified and supplemented by that certain order of
the Bankruptcy
Court, dated October 16, 1998 and docketed on October
22, 1998, the
Stipulation of Settlement Resolving the 1968 Lease Issues,
dated January
15, 1999, and docketed on January 20, 1999 and the
Amendment to Lease,
dated December 1, 2001.
"HSR ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"INDIAN TRIBE AGREEMENTS" shall mean the (a)
Gaming Facility
Development and Construction Agreement, dated as of April 3,
2003, by and
among Cayuga Catskill Gaming Authority, Monticello Raceway
Development
Company, L.L.C., and Cayuga Nation of New York, (b)
Shared Facilities
Agreement, contemplated to be executed by and between
Cayuga Catskill
Gaming Authority and Monticello Raceway Management, Inc.
("MRMI"), (c)
Land Purchase Agreement, dated as of April 3, 2003, by and
between Cayuga
Catskill Gaming Authority and Catskill Development, L.L.C.,
as amended by
the First Amendment of Land Purchase Agreement, dated as
of April 30,
2004, by and between Catskill Development, L.L.C. and
Cayuga Catskill
Gaming Authority, (d) Gaming Facility Management Agreement,
dated as of
3
April 3, 2003, by and among Cayuga Catskill Gaming
Authority, Monticello
Casino Management, L.L.C., and Cayuga Nation of New
York, (e) Letter
Agreement, dated as of April 3, 2003, by and among Alpha
Hospitality
Corporation, Catskill Development, L.L.C. and Cayuga Nation
of New York,
as amended by the First Amendment of Letter Agreement,
dated as of April
30, 2004, by and between Empire Resorts, Inc. and Catskill
Development,
L.L.C. and Cayuga Nation of New York and Cayuga Catskill
Gaming Authority
and by the Letter Agreement, dated as of December 23, 2004,
by and between
Empire Resorts, Inc. and the Cayuga Nation of New York,
(f) Letter
Agreement, dated as of August 19, 2004, by and between
Empire Resorts,
Inc. and the Seneca-Cayuga Tribe of Oklahoma and (g)
Memorandum from
Martin R. Gold to the Cayuga Nation of New York, dated
November 14, 2004,
signed by the Cayuga Nation of New York and Empire Resorts,
Inc.
"KNOWLEDGE" or "knowledge" shall mean and be
limited to (i) with
respect to Empire, when used in the phrase "TO EMPIRE'S
KNOWLEDGE" or
similar phrases, the actual knowledge of the following
individuals: Morad
Tahbaz and Robert Berman, and the knowledge a reasonably
prudent person
would be expected to have acting in such person's capacity
in the conduct
of similar business and (ii) with respect to Transferor
when used in the
phrase "TO TRANSFEROR'S KNOWLEDGE" or similar phrases,
the actual
knowledge of the following individuals: Louis Cappelli and
Bruce Berg, and
the knowledge a reasonably prudent person would be expected
to have acting
in such person's capacity in the conduct of similar business.
"LAW" shall mean any U.S. federal, state or local, or
any foreign,
order, writ, injunction, judgment, award, decree, common
law, statute,
code, ruling, law, agency requirement, arbitration award,
ordinance, rule,
regulation, license or permit of any Governmental Entity.
"LIEN" shall mean any easement, encroachment,
security interest,
pledge, mortgage, lien (including, without limitation,
environmental, Tax
and ERISA liens), charge, judgment, claim, encumbrance,
proxy, voting
trust or voting agreement.
"MATERIAL ADVERSE EFFECT" with respect to any
Person means (x) a
material adverse effect on the condition (financial or
other), properties,
assets, liabilities or business with respect to or in
connection with the
Contemplated Business of such Person and its Subsidiaries or
(y) an effect
that would prevent, materially delay or materially impair
the ability of
such Person to consummate the transactions contemplated by
this Agreement
(including, without limitation, with respect to Newco
the ability to
develop, construct and operate a Resort Facility at the
Concord Property,
which Resort Facility shall include a hotel containing
approximately 1500
rooms).
"MONTICELLO PROPERTY" shall mean the land located in
Monticello, New
York and described on EXHIBIT C hereto, and all buildings,
structures and
other improvements thereon, which property is owned by
MRMI, a wholly
owned subsidiary of Empire and known as the Monticello
Raceway.
"PERSON" shall mean any individual, corporation,
partnership,
limited liability company, association, trust or
other entity or
organization, including a government or political subdivision
or an agency
or instrumentality thereof.
4
"RESORT FACILITY" shall mean a hotel(s) and resort
complex, which,
with respect to the Concord Hotel Site, shall include a
fully licensed
Class III gaming enterprise.
"RETAINED PROPERTY" shall mean the land owned or
leased by Concord
Associates in Kiamesha Lake, New York and which is
outside of the Golf
Courses and Concord Owned Property marked or indicated
on EXHIBIT B
hereto, and all buildings, structures and improvements
located thereon,
and all rights and interests appurtenant thereto.
"SEC" shall mean the U.S. Securities and Exchange
Commission.
"SECURITIES ACT" shall mean the Securities Act of
1933, as amended,
and the regulations promulgated thereunder.
"SUBSIDIARY" shall mean, with respect to any
Person, any other
Person, whether incorporated or unincorporated, of
which at least a
majority of the securities or ownership interests having
by their terms
voting power to elect a majority of the board of
directors or other
Persons performing similar functions is directly or
indirectly owned or
controlled by such entity or by one or more of its
respective
Subsidiaries.
"TAX" or "TAXES" shall mean all federal, state, local
or foreign net
or gross income, gross receipts, net proceeds, sales,
use, ad valorem,
value added, franchise, bank shares, withholding, payroll,
employment,
excise, property, alternative minimum, environmental or
other taxes,
assessments, duties, fees, levies or other governmental
charges of any
nature whatsoever, whether disputed or not, together with
any interest,
penalties, additions to tax or additional amounts with
respect thereto,
whether disputed or not, in each case including such
taxes for which a
Person is or may be liable (i) as a result of Treasury
Regulation Section
1.1502-6 (or a similar provision of state, local or
foreign law), as
transferee or successor, and (ii) as a result of being
party to any
agreement or any expressed or implied obligation to indemnify
any Person.
"TAX RETURNS" shall mean any federal, state,
local or foreign
returns, reports, claims for refund, information returns
or statements
(including any amended returns or information returns)
filed or required
to be filed for purposes of a particular Tax.
"TRANSFEROR DISCLOSURE SCHEDULE" shall mean the
Disclosure Schedule
of Transferor, dated as of the date hereof.
"U.S." shall mean the United States of America.
5
ARTICLE II.
THE MERGER AND CONTRIBUTION; CLOSING
Section 2.1 TIME AND PLACE OF CLOSING. The
closing of the
Transactions (the "CLOSING") shall take place at the offices
of Empire's
counsel, Latham & Watkins LLP, in New York City, on such date
and time that is
substantially contemporaneous with the last to be satisfied or
waived of the
conditions to Closing (the "CLOSING CONDITIONS") set forth in
Article VII, but
in no event later than 5 business days following satisfaction or
waiver of the
Closing Conditions (the date of the Closing, the "CLOSING DATE");
PROVIDED that
if all such Closing Conditions shall not have been satisfied
and/or waived by
December 31, 2005, then either party shall have such rights to
terminate this
Agreement as are set forth in SECTION 9.1 hereof.
Section 2.2 THE MERGER. Upon the terms and subject to
the conditions
hereof, at the Closing, and in accordance with the DGCL, Merger
Sub shall be
merged with and into Empire at the Effective Time (as defined
below). Following
the Merger, the separate corporate existence of Merger Sub
shall cease and
Empire shall continue as the surviving corporation (the
"SURVIVING
CORPORATION").
Section 2.3 EFFECTIVE TIME. As promptly as
practicable on the
Closing Date, Merger Sub and Empire shall (a) file with the
Secretary of State
of the State of Delaware (the "DELAWARE SECRETARY OF STATE") a
certificate of
merger (the "CERTIFICATE OF MERGER") in such form as is required by
and executed
in accordance with the relevant provisions of the DGCL, and (b)
make all other
filings or recordings required under the DGCL. The Merger shall
become effective
at such time as the Certificate of Merger is duly filed with
the Delaware
Secretary of State or at such subsequent time as Empire and
Transferor shall
agree and as shall be specified in the Certificate of Merger (the
date and time
the Merger becomes effective being the "EFFECTIVE TIME").
Section 2.4 EFFECTS OF THE MERGER. At and after the
Effective Time,
the Merger will have the effects set forth in the DGCL. Without
limiting the
generality of the foregoing, and subject thereto, at the Effective
Time all the
property, rights, privileges, powers and franchises of Empire
and Merger Sub
shall be vested in the Surviving Corporation, and all debts,
liabilities and
duties of Empire and Merger Sub shall become the debts,
liabilities and duties
of the Surviving Corporation.
Section 2.5 CERTIFICATE OF INCORPORATION AND BYLAWS
OF SURVIVING
CORPORATION. The certificate of incorporation of Empire shall be
amended to read
in its entirety as the certificate of incorporation of Merger
Sub in effect
immediately prior to the Effective Time, except that (a)
Article I of the
certificate of incorporation shall provide that the name of
the surviving
corporation is "Empire Resorts Properties, Inc." and (b) such
certificate of
incorporation shall state that the total number of authorized
shares of common
stock shall be 1000. The bylaws of Empire shall be amended
to read in its
entirety as the bylaws of Merger Sub in effect immediately
prior to the
Effective Time, until thereafter changed or amended as provided
therein or by
applicable Law.
6
Section 2.6 NAME CHANGE; CERTIFICATE OF INCORPORATION
AND BYLAWS OF
NEWCO. At the Effective Time, Empire shall cause Newco's name to
be changed to
"Empire Resorts, Inc." Empire shall cause Newco's certificate of
incorporation
and bylaws to be amended as of immediately prior to the Effective
Time to be the
same as Empire's certificate of incorporation and bylaws as of the
date hereof,
until thereafter changed or amended as provided therein or by
applicable Law.
Section 2.7 OFFICERS AND DIRECTORS. The officers of
Empire at the
Effective Time shall be the officers of the Surviving
Corporation, until the
earlier of their resignation or removal or otherwise ceasing to be
an officer or
until their respective successors are duly elected and qualified,
as the case
may be. The Board of Directors of Empire at the Effective Time
shall be the
Board of Directors of the Surviving Corporation until the
earlier of their
resignation or removal or otherwise ceasing to be a member of
the Board of
Directors or until their respective successors are duly elected
and qualified.
The initial Board of Directors of Newco to be in office at the
Closing shall be
as set forth in Section 2.8 below.
Section 2.8 INITIAL BOARD OF DIRECTORS OF NEWCO. The
initial Board
of Directors of Newco to be in office at the Effective Time shall
be comprised
of eleven (11) members, two (2) of whom shall be designees of
Transferor (such
designees or such other individuals designated from time to time
by Transferor
to take their place or places, the "TRANSFEROR DESIGNEES"). Newco
and Transferor
agree that the Transferor Designees shall be members of the class
of directors
who will not be subject to reelection until the annual meeting
to be held in
2008. Of the remaining nine (9) members of the initial Board of
Directors at
least seven (7) members of the Board of Directors will be
independent. Newco and
Transferor agree that the seven (7) initial independent
members shall be
comprised as follows: (1) in addition to Transferor's right to
designate the
Transferor Designees, Transferor will be entitled to designate
three (3) of the
seven (7) independent members of the Board of Directors; (2)
Newco will be
entitled to designate three (3) independent directors selected from
the existing
independent directors on the Board of Directors of Empire,
as of the date
hereof; and (3) the six (6) independent directors selected
pursuant to (1) and
(2) above will together select the seventh independent
director. Committee
representation will be proportionate to representation on the Board
of Directors
(except that committees that are required to be comprised of
independent
directors will have comparable proportionate independent
representatives). To
the extent permitted by applicable NASDAQ rules and by
applicable law, for a
period of at least three years after the Effective Time, at
least one of the
Transferor Designees shall be entitled to serve as a member of each
committee of
the Board of Directors. If prior to the expiration of any
Transferor Designee's
term, any Transferor Designee ceases to be a member of the Board
of Directors
(for any reason other than for cause), Newco will use its
commercially
reasonable efforts (subject to any NASDAQ regulations,
applicable law and
fiduciary duties and obligations of Newco's directors then in
office) to appoint
a new member of the Board of Directors designated by Transferor
to fill the
vacancy left by such departing member so that until at least the
annual meeting
held in 2008, at least two Transferor Designees will be members of
the Board of
Directors. Newco agrees that each of Scott Rechler and Louis
Cappelli are
acceptable as Transferor Designees (without limiting Transferor's
rights to make
replacements), provided that Scott Rechler and Louis Cappelli are
able to comply
with the suitability requirements of applicable state, federal and
tribal gaming
regulators with jurisdiction over Empire's operations, and if
Scott Rechler or
Louis Cappelli do not so comply, Transferor shall be
entitled to name
7
replacement designees who meet such requirements. Transferor hereby
acknowledges
and agrees that all members of the Board of Directors shall
be subject to
suitability requirements of applicable state, federal and
tribal gaming
regulators. Empire and Newco agree to use commercially
reasonable efforts to
effect the foregoing, including seeking and obtaining any required
shareholder
approvals of the foregoing at the Stockholders Meeting (or any
adjournment(s) or
postponement(s) thereof), or any other meeting of shareholders
of Empire or
Newco at which the matters contemplated by this Agreement or this
Agreement are
to be presented to a vote of shareholders of Empire or
Newco (or any
adjournment(s) or postponement(s) thereof). Empire and Newco also
agree that in
connection with seeking and obtaining any required shareholder
approvals of the
foregoing it shall undertake the same efforts and comply
with the same
obligations with respect to seeking and obtaining such approvals
as those set
forth in Section 5.11 of this Agreement. Notwithstanding
anything in this
Agreement to the contrary, in the event that any such required
shareholder
approval is not obtained for any reason, the parties agree that
such failure
shall be treated for all purposes (including, for purposes of
determining the
exercisability of the Option and the termination of this Agreement)
as a failure
to satisfy the shareholder approval condition to Closing set
forth in Section
7.1(a) of this Agreement. The terms and provisions of this
Section 2.8 shall
survive the Closing.
Section 2.9 DIRECTOR'S AND OFFICER'S INSURANCE.
On or prior to the Effective Time, Empire shall
obtain, or shall
cause to be obtained, a new policy of director's and officer's
insurance or an
endorsement to Empire's existing director's and officer's
insurance policy for
the officers and Board of Directors of Newco. Such policy or
endorsement shall
provide the same coverage to the Newco officers and Board of
Directors as is
provided to Empire's officers and Board of Directors as of the date
hereof.
Section 2.10 EFFECT ON CAPITAL STOCK. (a) At the
Effective Time, by
virtue of the Merger, each share of Empire Common Stock issued and
outstanding
immediately prior to the Effective Time (other than shares held in
the treasury
of Empire) shall cease to exist and be converted into the right
to receive one
share of common stock, par value $0.01 per share, of Newco
("NEWCO COMMON
STOCK").
(b) At the Effective Time, by virtue of the Merger,
each share of
the common stock, par value $0.01 per share, of Merger Sub
issued and
outstanding immediately prior to the Effective Time shall cease to
exist and be
converted into the right to receive one share of common stock, par
value $0.01,
of the Surviving Corporation.
(c) At the Effective Time, by virtue of the Merger,
each share of
Empire Common Stock held in the treasury of Empire immediately
prior to the
Effective Time shall automatically be canceled and retired and
shall cease to
exist, and no consideration shall be delivered in exchange thereof.
Section 2.11 EFFECT ON CLASS B AND CLASS E PREFERRED
STOCK. (a) At
the Effective Time, by virtue of the Merger, each share of
Empire Class B and
Class E Preferred Stock (the "EMPIRE PREFERRED STOCK") issued and
outstanding
8
immediately prior to the Effective Time (other than shares held in
the treasury
of Empire) shall cease to exist and be converted into the right
to receive one
share of preferred stock, par value $0.01 per share, of Newco,
having equivalent
terms to the Class B and Class E Preferred Stock,
respectively, of Empire
("NEWCO PREFERRED STOCK", together with Newco Common Stock, the
"EMPIRE MERGER
CONSIDERATION").
(b) At the Effective Time, by virtue of the Merger,
each share of
Empire Preferred Stock held in the treasury of Empire immediately
prior to the
Effective Time shall automatically be canceled and retired and
shall cease to
exist, and no consideration shall be delivered in exchange thereof.
Section 2.12 STOCK OPTIONS. At the Effective Time, by
virtue of the
Merger, each stock option or warrant exercisable for shares of
Empire Common
Stock (the "EMPIRE STOCK OPTIONS") outstanding immediately
prior to the
Effective Time shall be converted automatically at the Effective
Time into an
option or warrant to purchase a number of shares of Newco Common
Stock (a "NEWCO
STOCK OPTION") equal to the same number of shares of Empire Common
Stock subject
to such Empire Stock Option. The terms and conditions (including
the exercise
price per share) of the Newco Stock Options shall otherwise
remain the same as
the terms and conditions of each Empire Stock Option.
Notwithstanding the
foregoing, each Empire Stock Option (whether such option is a
non-qualified
stock option or an option that is intended to be an "incentive
stock option" (as
defined under Section 422 of the Code)) shall be adjusted in
accordance with the
principles set forth in Section 424 of the Code.
Section 2.13 EXCHANGE OF SHARES IN THE MERGER. (a) At
the Effective
Time, Newco shall make available to an exchange agent selected
by Newco and
reasonably acceptable to Transferor (the "EXCHANGE AGENT"), for
the benefit of
those Persons who immediately prior to the Effective Time were
the holders of
shares of Empire Common Stock or Empire Preferred Stock, a
sufficient number of
certificates representing shares of Newco Common Stock or Newco
Preferred Stock,
as the case may be, required to effect the delivery of the
aggregate Empire
Merger Consideration required to be issued pursuant to Section
2.10(a) (the
certificates representing shares of Newco Common Stock or Newco
Preferred Stock
comprising such aggregate Empire Merger Consideration being
hereinafter referred
to as the "EXCHANGE FUND").
(b) Promptly after the Effective Time, the Exchange
Agent shall mail
to each holder of record of a certificate or certificates which
immediately
prior to the Effective Time represented outstanding shares of
Empire Common
Stock or Empire Preferred Stock (the "CERTIFICATES") (i) a form
of letter of
transmittal (which shall specify that delivery shall be effected,
and risk of
loss and title to the Certificates shall pass, only upon proper
delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use
in effecting
the surrender of the Certificates for exchange therefor or for
effecting the
exchange of Certificates for shares of Newco Common Stock or
Newco Preferred
Stock, as the case may be, to be held in book entry form.
Promptly after the
Effective Time, the Exchange Agent shall also mail to each holder
of record of
shares of Empire Common Stock and Empire Preferred Stock held in
book entry form
("BOOK ENTRY SHARES") instructions for use in effecting the
exchange of said
Book Entry Shares for shares of Newco Common Stock or Newco
Preferred Stock, as
the case may be. Upon surrender of Certificates to the Exchange
Agent, together
with such letter of transmittal duly executed and any other
required documents,
9
or, in the case of Book Entry Shares, compliance with the
instructions for the
exchange thereof, the holder of such Certificates or Book Entry
Shares shall be
entitled to receive for the Empire Common Stock or Empire
Preferred Stock, as
the case may be, represented by such Certificates the
Empire Merger
Consideration, and the Certificates so surrendered or Book
Entry Shares so
exchanged shall forthwith be canceled. Until so surrendered,
Certificates, and
until exchanged as contemplated by this Section 2.13(b), Book
Entry Shares,
shall represent solely the right to receive the Empire Merger
Consideration. No
dividends or other distributions that are declared after the
Effective Time on
shares of Newco Common Stock or Newco Preferred Stock and payable
to the holders
of record thereof after the Effective Time will be paid to Persons
entitled by
reason of the Merger to receive shares of Newco Common Stock or
Newco Preferred
Stock, as the case may be, until such Persons surrender their
Certificates or
comply with the procedures for exchanging Book Entry Shares.
After such
surrender or compliance, as the case may be, there shall be paid
to the Person
in whose name the shares of Newco Common Stock or Newco
Preferred Stock are
issued any dividends or other distributions on such shares of Newco
Common Stock
or Newco Preferred Stock, as the case may be, which shall have
a record date
after the Effective Time but prior to such surrender provided
that the payment
date occurs after such surrender, and, in such event, such payment
shall be made
on such payment date. In no event shall the Persons entitled to
receive such
dividends or other distributions be entitled to receive
interest on such
dividends or other distributions. If any Certificate
representing shares of
Newco Common Stock or Newco Preferred Stock is to be issued in a
name other than
that in which the Certificate surrendered in exchange therefor is
registered, it
shall be a condition of such exchange that the Certificate so
surrendered shall
be properly endorsed and otherwise in proper form for transfer
and that the
Person requesting such exchange shall pay to the Exchange Agent
any transfer or
other Taxes required by reason of the issuance of certificates
for such shares
of Newco Common Stock or Newco Preferred Stock, as the case may
be, in a name
other than that of the registered holder of the Certificate
surrendered, or
shall establish to the satisfaction of the Exchange Agent that such
Tax has been
paid or is not applicable. The Exchange Agent shall not be
entitled to vote or
exercise any rights of ownership with respect to the shares of
Newco Common
Stock and Newco Preferred Stock held by it from time to time
hereunder, except
that it shall receive and hold all dividends or other
distributions paid or
distributed with respect to such shares of Newco Common
Stock and Newco
Preferred Stock for the account of the Persons entitled thereto.
If, after the
Effective Time, Certificates or unexchanged Book Entry Shares
representing
shares of Empire Common Stock or Empire Preferred Stock outstanding
prior to the
Effective Time are presented to Newco, they shall be cancelled and
exchanged for
the consideration provided for, and in accordance with the
procedures set forth,
in this Article II.
(c) Any portion of the Exchange Fund which remains
unclaimed by the
former holders of Empire Common Stock or Empire Preferred Stock, as
the case may
be, for six months after the Effective Time shall be delivered to
Newco, upon
demand of Newco, and any former holders of Empire Common
Stock and Empire
Preferred Stock shall thereafter look only to Newco for payment
of their claim
for the Empire Merger Consideration for the shares of Empire
Common Stock and
Empire Preferred Stock.
(d) Notwithstanding anything to the contrary in this
Agreement to
the fullest extent permitted by Law, none of the Exchange Agent,
Newco or the
Surviving Corporation shall be liable to a holder of shares of
Empire Common
10
Stock or Empire Preferred Stock for any amount properly
paid to a public
official pursuant to any applicable abandoned property, escheat or
similar law.
(e) Newco and the Exchange Agent shall be entitled
to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement to
any holder of shares of Empire Common Stock or Empire Preferred
Stock such
amounts as Newco (or any Affiliate thereof) or the Exchange Agent
are required
to deduct and withhold with respect to the making of such payment
under the Code
or any provision of any applicable state, local or foreign
Tax Law. To the
extent that amounts are so withheld by Newco or the Exchange
Agent, such
withheld amounts will be treated for all purposes of this
Agreement as having
been paid to the holder of the shares of Empire Common Stock or
Empire Preferred
Stock, as the case may be, in respect of whom such deduction and
withholding
were made by Newco.
(f) Newco agrees that from and after the Effective
Time, it will
assume and perform any obligations of Empire with respect to
registration of
securities under Federal or state securities laws, listing
obligations and
related obligations that Empire had immediately prior to the
Effective Time to
holders of Empire Common Stock or securities, options, warrants
or instruments
convertible, exchangeable or exercisable for Empire Common
Stock as if Newco
were Empire and as if those obligations were with respect to Newco
Common Stock
or securities, options, warrants or instruments convertible,
exchangeable or
exercisable for Newco's common stock. Empire represents and
warrants to
Transferor that such obligations will not conflict with or
prevent the
consummation of the Registration Rights Agreement, and Empire
and Newco agree
that they shall not enter into or become subject to any agreement
that conflicts
with or prevents the consummation of the Registration Rights
Agreement.
Section 2.14 TAX-FREE TREATMENT. The Parties intend
that the Merger
will meet the requirements of Section 368(a) of the Code
and rules and
regulations promulgated thereunder, that the Merger and the
Contribution, taken
together, will meet the requirements described in Section 351 of
the Code and
the rules and regulations promulgated thereunder, and that this
Agreement shall
constitute the "plan of reorganization."
Section 2.15 CONTRIBUTION. Upon the terms and
conditions set forth
in this Agreement, on the Closing Date and immediately following
the Effective
Time, Transferor will convey to Newco or its designee (which
designee shall be a
permitted assignee described in Section 10.6 hereof), and Newco or
such designee
will obtain title to, all of Transferor's right, title and
interest in and to
the following, subject only to the Permitted Exceptions and
subject to Section
5.16 hereof:
(a) the land located in Liberty, New York and described
on EXHIBIT D
hereto and commonly known as the Grossinger's Hotel and
Golf Resort
consisting of approximately 582 acres (the "GROSSINGER'S
PROPERTY");
(b) the land located in Kiamesha Lake, New York and
described on
EXHIBIT B hereto, commonly known as the Concord Hotel
and Resort,
consisting of approximately 163 acres (including the
Concord Hotel Site,
the owned portion of the Golf Courses and the Challenger golf
course) (the
"CONCORD OWNED PROPERTY");
11
(c) the land located in Kiamesha Lake, New York and
substantially
described on EXHIBIT B, hereto and commonly known as the
Monster and
International golf courses (the "GOLF COURSES" and,
collectively with the
Concord Owned Property, the "CONCORD PROPERTY"), a portion
of which land
is leased by Concord Associates pursuant to the Ground Lease
and a portion
of which land is owned by Concord Associates (with the
owned portion of
the Golf Courses being deemed to be included in the
definition of "CONCORD
OWNED PROPERTY");
(d) all buildings, structures and improvements
located on the
Grossinger's Property and the Concord Owned Property, and
(subject to the
terms and provisions of the Ground Lease) on the Golf
Courses;
(e) with respect to the Grossinger's Property and the
Concord Owned
Property (collectively, the "OWNED PROPERTY"), (i) the
easements, rights,
privileges and appurtenances belonging thereto, and any
abutting strips or
gores, (ii) any land lying in the bed of any street, road or
avenue, open
or proposed, in front of or adjoining such property,
and (iii) all
appurtenant easements for ingress, egress, utilities and
other purposes;
(f) the leases, subleases, occupancy agreements,
license agreements,
concession agreements and other tenancy arrangements
(including, without
limitation, all amendments and modifications thereto
and guarantees
thereof) of space and/or improvements at the Owned
Property or the Golf
Courses (collectively, the "LEASES");
(g) all Service Contracts which Empire elects to
assume at Closing
as more fully provided herein;
(h) the trademarks, service marks, logos and
tradenames (including,
without limitation, those listed on EXHIBIT E attached
hereto and made a
part hereof) associated with the Grossinger's Property
and the Concord
Property, provided that Transferor shall retain or shall
license from
Newco, without additional consideration, the right to use
(i) the name
"Concord" in connection with any residential development
projects at the
Retained Property and (ii) the name "Concord" or
"Grossinger's" for
reasonable uses unrelated to hotel, resort and/or gaming
operations of
Newco or Empire (including, without limitation, retail
uses) pursuant to
the license agreement attached as EXHIBIT F hereto (the
"TRADE NAME
LICENSE AGREEMENT");
(i) all licenses, franchises, certificates,
authorizations,
approvals, variances and permits issued or approved by any
Governmental
Entity and relating to the development, operation,
ownership, maintenance
and use of the Grossinger's Property or the Concord
Property or any part
thereof including, without limitation, all applications
and/or filings for
environmental approvals and consents, licenses and building
permits, and
land use and subdivision approvals, all to the extent
assignable (the
"LICENSES");
(j) all machinery, equipment, fixtures,
furnishings and other
tangible personal property (including, without limitation,
golf carts,
clubs, equipment utilized in greens maintenance and
other golfing
12
equipment situated in or upon or used in connection with the
operation or
maintenance of the Grossinger's Property or the Concord
Property or any
part thereof, and all replacements additions or
accessories thereto
between the date hereof and the Closing Date (hereinafter
defined), but
excluding any personal property owned by tenants under any
Leases and any
other personal property described in EXHIBIT G; and
(k) all architectural plans and specifications
(including all design
drawings and concept plans), engineering reports
(structural and
mechanical), other development plans and site plans and all
environmental,
zoning, feasibility and other reports relating to the
condition and
development of the Grossinger's Property or the Concord
Property, all to
the extent assignable (all of the foregoing property, real,
personal and
mixed, described in clauses (a) through (k) of this
Section 2.15 being
collectively called the "PROPERTIES").
Section 2.16 ISSUANCE OF TRANSFEROR SHARES;
ASSUMPTION OF
LIABILITIES. (a) Upon the terms and subject to the conditions set
forth in this
Agreement, at the Closing and contemporaneous with the
Contribution, Newco shall
issue to Transferor a total of Eighteen Million (18,000,000)
shares of Newco
Common Stock (the "TRANSFEROR SHARES"); PROVIDED, HOWEVER that
if, prior to or
at the Closing, the number of outstanding shares of Empire
Common Stock shall
have been changed into a different number of shares or a
different class by
reason of any stock dividend, subdivision, reclassification,
recapitalization,
split, reverse split, combination or exchange of shares, or shall
have increased
as a result of the issuance of additional shares of Empire Common
Stock from the
number of shares outstanding as of the date hereof (other than
any issuance of
Empire Common Stock in connection with the payment of
dividends on or the
conversion of Empire's Preferred Stock in accordance with the
current terms of
Empire's Preferred Stock, the exercise of employee stock options
or warrants,
the conversion of existing convertible debt in accordance with the
terms of the
Indenture, dated as of July 26, 2004, as of the date hereof, or
the issuance of
Empire Common Stock for cash or in exchange for assets,
contributions or
services, which issuance for cash, assets, contributions or
services are in the
ordinary course of Empire's gaming and hospitality business
(collectively, the
"EXCLUDED SHARES")), then the number of Transferor
Shares shall be
correspondingly adjusted to reflect such stock dividend,
subdivision,
reclassification, recapitalization, split, reverse split,
combination, exchange
of more shares or other similar transactions, or issuance such
that Transferor
receives 40% of any newly issued shares that are not Excluded
Shares. The
Transferor Shares will be issued by Newco to Transferor at
Closing, free and
clear of all Liens (exclusive of any restrictions imposed or
referred to by this
Agreement or by applicable federal or state licensing and
securities laws).
(b) In addition, at the Closing, subject to Section
5.23 hereof,
Newco shall (i) assume, pursuant to an assumption agreement in
form mutually
satisfactory to Transferor and Empire (the "ASSUMPTION AGREEMENT"),
or otherwise
satisfy the liabilities and obligations of Concord Associates
and/or Sullivan
Resorts under those mortgage loans and the provisions of the
limited partnership
agreement of Concord Associates relating to Resort Group Investors
LLC, in each
case, as more particularly described in Section 3.8 of the
Transferor Disclosure
Schedule and (ii) subject to Section 5.16 hereof, pay to
Transferor or to the
ground lessor under the Ground Lease at Transferor's
direction, the amount
required to be paid to exercise the purchase option under the
Ground Lease as of
the Closing Date (the "EMPIRE PAYMENT OBLIGATIONS"),
PROVIDED that,
13
notwithstanding anything to the contrary contained in this
Agreement, in no
event shall Empire be obligated to assume or otherwise
satisfy any Empire
Payment Obligations to the extent the amount of such
obligations exceeds
$30,000,000 (and with the Empire Payment Obligation allocated
to the Ground
Lease being deemed to equal the purchase option price under the
Ground Lease as
of the Closing Date). In addition, at Closing, Empire and/or Newco
shall provide
guarantees or such other credit enhancement to the holders of any
such mortgages
in order to cause (i) any personal guarantees of the current
borrowers and any
outstanding guarantees of such mortgages from any Affiliates
of Concord
Associates and/or Sullivan Resorts to be released and discharged
at Closing (in
each case, except to the extent such guarantees survive the
repayment or
maturity of such mortgages) and (ii) any deposits or cash
collateral held by any
such lender to be released to Transferor (it being understood
and agreed that
none of Empire's or Newco's officers, directors, stockholders
(other than Newco
as a stockholder of Empire) or Affiliates will be expected to
provide personal
guaranties of any nature).
(c) In the event Newco is required under applicable law
to deduct or
withhold any Taxes with respect to the delivery of the Transferor
Shares, Newco
shall be entitled to receive from Transferor a payment of money
in an amount
equal to such required deduction or withholding. To the extent that
such amounts
are paid by Transferor to Newco, Newco shall promptly remit such
funds to the
relevant Tax authority in accordance with applicable Law and
shall provide
Transferor with evidence of such payment.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR
Transferor hereby represents and warrants to
Empire, Newco and
Merger Sub as follows:
Section 3.1 DUE FORMATION, EXISTENCE, ETC.
Transferor is duly
formed, validly existing, and in good standing, and has the
requisite power and
authority to own, lease, and operate its properties as it is now
owned, leased
and operated. Transferor has full power and authority and has
taken all limited
partnership and/or limited liability company action necessary
to execute and
deliver this Agreement and to perform the obligations of
Transferor hereunder,
and all limited partnership and/or limited liability company action
necessary to
authorize the person(s) executing this Agreement on behalf of
Transferor to
execute and deliver this Agreement and all documents to be
executed by
Transferor pursuant to this Agreement on behalf of Transferor and
to perform the
obligations of Transferor hereunder. This Agreement is a
valid and binding
agreement of Transferor enforceable against Transferor in
accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization,
moratorium and similar Laws of general applicability relating to
or affecting
creditors' rights and to general equity principles. The execution
and delivery
by Transferor of, and the performance and compliance by
Transferor with, the
terms and provisions of this Agreement do not (a) violate any term,
condition or
provision of Transferor's organizational or governing documents;
(b) violate any
judgment, order, injunction, decree, regulation or ruling of any
court or other
Governmental Entity to which Transferor is subject; or (c)
require any consent
or approval under, result in any breach of or any loss of any
benefit under,
give rise to other's right of termination, vesting, amendment,
acceleration, or
14
cancellation of, result in the creation of any Lien on the
Properties pursuant
to, or cause a violation of any agreement, promissory note,
bond, mortgage,
indenture, contract, lease, license, or any other instrument of
obligation to
which Transferor is a party or by which Transferor is bound,
subject, however,
to the receipt of the consent of (i) subject to section 5.23, each
holder (each
"LENDER") of a mortgage that is part of the Empire Payment
Obligations to the
transfer of the applicable Property, the assumption of any such
Empire Payment
Obligations by Newco and the releases as described in Section
2.16(b) (the
"LENDER CONSENTS") and (ii) such other consents as are set forth
in Section 3.3
of the Transferor Disclosure Schedule and except that, in the
case of clauses
(b) or (c) above, for any breach, violation, termination, default,
acceleration,
creation or change that would not, individually or in the
aggregate, reasonably
be expected to have a Material Adverse Effect on Transferor.
Section 3.2 PERMITS AND APPROVALS. Transferor has (a)
all material
zoning and governmental approvals and all certificates
of occupancy,
underwriters certificates, building, housing, safety,
fire, health,
environmental and other similar approvals, and all other
material permits
necessary to maintain, operate and use the Properties in the manner
in which the
same are presently being maintained, operated and used, and (b)
with respect to
the site plan for the Concord Property (the "SITE PLAN")
described in Section
3.2 of the Transferor Disclosure Schedule, obtained the
governmental approvals
described in Section 3.2 of the Transferor Disclosure Schedule
(the "SITE PLAN
APPROVALS"), and, in each case, all of such items have been issued
and are valid
and in full force and effect. All of the foregoing are
assignable and
transferable to Newco without the consent or approval of any person
or entity or
the payment of any material fee or charge (it being understood
and agreed that
Transferor shall pay any such fees or charges at Closing).
Transferor has no
Knowledge of any existing or threatened facts or circumstances
that would cause
the Site Plan Approvals to be attacked, revoked, rescinded,
impaired or
otherwise rendered ineffective or would result in the inability
of Empire or
Newco, under applicable law, to use the Concord Hotel Site for
purposes of
development and construction of a Resort Facility. For purposes of
this Section
3.2 "threatened facts or circumstances" shall mean a
threat from any
Governmental Entity, or a material, written threat from an
adjacent property
owner or other party who has standing to attack or oppose
the Site Plan
Approvals. Transferor has not received any written notice
revoking any
certificate of occupancy for the improvements located at the
Properties, which
revocation has not been cured. Transferor has no Knowledge of any
alterations
performed or alteration applications on file which would require an
amendment or
any certificate of occupancy.
Section 3.3 CONSENTS AND APPROVAL. Other than Lender
Consent and
such other consents as are set forth in Section 3.3 of the
Transferor Disclosure
Schedule, no consent, waiver, authorization, permit, or approval
by any third
party or governmental entity which heretofore has not been
obtained is required
in connection with the execution and delivery by Transferor of this
Agreement or
the performance by Transferor of the obligations to be
performed under this
Agreement by Transferor.
Section 3.4 GROUND LEASE. The Ground Lease is in
full force and
effect, and no material rights or interests of Transferor
as the tenant
thereunder have been waived or released by Transferor,
including, without
limitation, the tenant's purchase option contained therein.
Neither the
Transferor nor, to Transferor's Knowledge, the ground lessor is in
default under
the Ground Lease nor has any event occurred that with the giving of
notice, the
passage of time or both would give rise to a default thereunder.
15
Section 3.5 LICENSES. Section 3.5 of the
Transferor Disclosure
Schedule is a true, correct and complete list of each of the
material Licenses,
as amended and in effect, (b) each of the material Licenses is in
full force and
effect, and (c) Transferor does not know of, and neither
Transferor nor any
agent or employee of Transferor has received notice of, any
intention on the
part of the issuing authority to cancel, suspend or modify any of
such Licenses
or to take any action or institute any proceedings to
effect such a
cancellation, suspension or modification. The Licenses identified
in Section 3.5
of the Transferor Disclosure Schedule comprise all licenses,
franchises,
certifications, authorizations, approvals and permits
required by any
governmental or quasi-governmental authority for the use and
operation of the
Properties as the same are presently used and operated, and the
Properties are
operated and occupied in compliance with each of the Licenses,
except for such
noncompliance that would not cause a Material Adverse Effect.
Section 3.6 LEASES. The Leases, which are set forth
in Section 3.6
of the Transferor Disclosure Schedule are all of the real
property leases
affecting the Properties as of the date hereof. Transferor hereby
represents and
warrants that all Leases are in full force and effect, and
no rights or
interests of the landlord thereunder have been waived or released
by Transferor.
Neither Transferor, as landlord, nor (to Transferor's Knowledge)
any tenant is
in default under any Lease.
Section 3.7 SERVICE CONTRACTS. Section 3.7 of
the Transferor
Disclosure Schedule contains a list of all of the Service
Contracts affecting
the Properties, including, without limitation, the operation of the
golf courses
thereon, and Empire has been provided with a copy of each of
the Service
Contracts, and amendments and modifications thereof, and such
copies are true,
correct and complete in all material respects. Transferor is
not in material
default and has not received any written notice of default
under any of the
Service Contracts that has not been cured, and all of the Service
Contracts are
in full force and effect and are terminable without material cost
to Transferor
upon not more than thirty (30) days' notice thereunder.
Section 3.8 EMPIRE PAYMENT OBLIGATIONS. Empire has
been provided
with copies of each of the documents securing and/or
evidencing the Empire
Payment Obligations and listed in Section 3.8 of the
Transferor Disclosure
Schedule, and all amendments and modifications thereof, and
such copies are
true, correct and complete in all respects, there are no defaults
under any of
such documents that have not been cured, and such documents are
in full force
and effect.
Section 3.9 TITLE TO PROPERTIES. Transferor owns fee
simple title to
the Grossinger's Property and to the Concord Owned Property free
and clear of
Liens, other than the Permitted Exceptions.
Section 3.10 TITLE TO GROUND LEASE. Transferor has
good and valid
leasehold title to the portion of the Golf Courses leased by
Transferor pursuant
to the Ground Lease, free and clear of Liens, other than
the Permitted
Exceptions.
16
Section 3.11 TITLE TO LICENSES AND SERVICE CONTRACTS.
The interest
of Transferor in the Service Contracts and Licenses is free and
clear of all
Liens and has not been assigned to any other Person, except
with respect to
Permitted Exceptions.
Section 3.12 NECESSARY PROPERTY. The Properties
(together with any
rights of Newco under the REA) represent all of the real and
personal property
necessary in connection with the use, operation and maintenance
of the Golf
Courses as currently used, operated and maintained. To
Transferor's Knowledge
and subject to the provisions of SECTION 5.16 hereof, the Retained
Property is
not necessary for the use, operation, maintenance or compliance
with applicable
Law of the Properties as currently used or as contemplated to
be used as a
Resort Facility and the lack of conveyance by Transferor of
the Retained
Property to Newco will not otherwise result in a Material Adverse
Effect.
Section 3.13 NO TENANTS OR OCCUPANTS. Except for
Transferor and
tenants, or their permitted subtenants or other occupants or
assignees, under
the Leases, there are no persons in possession or occupancy of the
Properties,
nor are there any persons who have possessory or other occupancy
rights with
respect to the Properties.
Section 3.14 COMPLIANCE WITH LAWS. Except as
described on Section
3.14 to the Transferor Disclosure Schedule, the Properties are
presently used
and operated in compliance in all material respects with
(a) all legal
requirements applicable to the Properties ("LEGAL REQUIREMENTS"),
and (b) all
Permitted Exceptions.
Section 3.15 LITIGATION. Except as set forth in
Section 3.15 of the
Transferor Disclosure Schedule, there are no claims, causes of
action or other
litigation or proceedings pending or, to Transferor's Knowledge,
threatened with
respect to Transferor. Except as set forth in Section 3.15 of
the Transferor
Disclosure Schedule, there are no material claims, causes of
action or other
litigation or proceedings pending or, to Transferor's Knowledge,
threatened with
respect to the Properties, except possible claims for workers'
compensation,
personal injury or property damage which are covered by insurance
maintained by
Transferor.
Section 3.16 CONDEMNATION. Except as set forth in
Section 3.16 of
the Transferor Disclosure Schedule, there is no existing, pending
or to the best
of Transferor's Knowledge, threatened (a) condemnation of all or
any part of the
Properties, (b) widening, change of grade or limitation on
use of streets
abutting the Properties, (c) special Tax or assessment to be
levied against the
Properties, (d) change in the zoning classification of the
Properties, or (e)
change in the tax assessment of the Properties.
Section 3.17 PURCHASE OPTIONS. Transferor has not
granted any
purchase options or options to lease with respect to all or any
portion of the
Properties.
Section 3.18 ENVIRONMENTAL MATTERS. Except as set
forth in Section
3.18 of the Transferor Disclosure Schedule (including in the
reports and other
documents listed therein) and, to Transferor's Knowledge, (a)
there currently
are, and have been, no Hazardous Materials (as defined below) or
underground
storage tanks located in, on or under the Properties, (b)
Hazardous Materials
17
have not been released into the environment, or discharged,
placed or disposed
of at, on or under the Properties in violation of
Environmental Legal
Requirements (as defined below) or which would require
remediation or
notification under Environmental Legal Requirements, (c) the
Properties have not
been used as a landfill, including without limitation for
debris, waste or
Hazardous Materials, (d) Transferor has not received any written
notice or other
written communication from any person relating to actual or
potential liability
pursuant to, or violation of, Environmental Legal Requirements at
or due to the
Properties, (e) the Properties currently comply, and have
complied, with
applicable Environmental Legal Requirements in all respects, and
(f) Transferor
has provided to Empire in writing all material information
relating to
environmental conditions in, on, under or from the
Properties known to
Transferor or contained in Transferor's files or records,
including but not
limited to any such reports relating to Hazardous Materials in,
on, under or
migrating to or from the Properties and/or the environmental
condition of the
Properties.
For purposes of this SECTION 3.18, the term
"HAZARDOUS MATERIALS"
shall include without limitation (a) asbestos or
asbestos-containing materials,
polychlorinated biphenyls, petroleum or petroleum products or
byproducts,
flammable explosives, radioactive materials, Lead Based Paint,
mold, infectious
substances or raw materials which include hazardous
constituents or (b) any
hazardous, toxic or harmful substances, wastes, materials,
pollutants,
contaminants, or any other substances or materials which are
regulated by, or
may form the basis of liability under, any Environmental Legal
Requirement.
For purposes of this SECTION 3.18, the term
"ENVIRONMENTAL LEGAL
REQUIREMENTS" shall mean all federal, state and local Legal
Requirements
relating to contamination or the protection of human health and the
environment,
including, without limitation, the Comprehensive
Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. ss. 9601 ET
SEQ.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. ss. 6901
ET SEQ.), the
Federal Water Pollution Control Act (33 U.S.C. ss. 1251 ET SEQ.),
the Clean Air
Act (42 U.S.C. ss. 7401 ET SEQ.), the Emergency
Planning and
Community-Right-to-Know Act (42 U.S.C. ss. 11001 ET SEQ.),
the Endangered
Species Act (16 U.S.C. ss. 1531 ET SEQ.), the Toxic Substances
Control Act (15
U.S.C. ss. 2601 ET SEQ.), the Occupational Safety and Health Act
(29 U.S.C. ss.
651 ET SEQ.), the Hazardous Materials Transportation Act (49
U.S.C. ss. 1801 ET
SEQ.), and those relating to paint containing more than .05% lead
by dry weight
("LEAD BASED PAINT") and the regulations promulgated pursuant to
said laws, all
as amended from time to time.
Section 3.19 INSURANCE. Section 3.19 of the
Transferor Disclosure
Schedule is a list of all insurance policies presently affording
coverage with
respect to the Properties, and the information contained thereon is
complete and
accurate in all material respects as of the date hereof.
Section 3.20 BROKERS AND FINDERS. Neither Transferor
nor any of its
officers, directors or employees has employed any broker or
finder or incurred
any liability for any brokerage fees, commissions or finders fees
in connection
with the transactions contemplated in this Agreement.
Section 3.21 TAXES. (a) Except as would not,
individually or in the
aggregate, reasonably be expected to have a Material
Adverse Effect on
Transferor, (i) each Transferor has duly and timely (subject to
any extensions
18
permitted by applicable law) filed all material Tax Returns
required to be filed
by it and all such Tax Returns are true, complete and accurate in
all material
respects, (ii) each Transferor has paid all material Taxes that
are required to
be paid by it or that it is obligated to withhold from amounts
owing to any
employee, creditor or third party, (iii) there are no
pending audits,
examinations, investigations, deficiencies, claims or other
proceedings in
respect of material Taxes relating to either Transferor, (iv) there
are no Liens
for Taxes on any of the Properties, except for Taxes not yet due
and payable,
(v) neither Transferor has made any election, or is required, to
treat any of
the Properties owned by it as owned by another Person for Tax
purposes, (vi)
none of the Properties directly or indirectly secures any debt
the interest on
which is tax-exempt under Section 103(a) of the Code, and
(vii) none of the
Properties is "tax-exempt use property" within the meaning of
Section 168(h) of
the Code.
(b) Notwithstanding the foregoing, the
representations and
warranties set forth in SECTION 3.21(a)(i), (ii) and (iii) hereof
shall not be
applicable to the extent that the Properties cannot be made subject
to Tax liens
and Newco (or its Affiliates) cannot be held liable for Taxes
relating to
matters constituting any breach of such representations and
warranties.
(c) Neither Transferor has taken any action or
knows of any fact
that is reasonably likely to prevent (i) the Merger from
qualifying as a
"reorganization" within the meaning of Section 368(a) of the
Code or (ii) the
Merger and the Contribution, taken together, from qualifying as
a transaction
described in Section 351 of the Code.
Section 3.22 EMPLOYEE BENEFITS
(a) Section 3.22 of the Transferor Disclosure
Schedule contains a
complete and accurate list of all operations and maintenance
employees at the
Properties as of the date hereof (the "TRANSFERRED EMPLOYEES"),
their positions,
their annual/weekly/hourly rate of compensation (as applicable),
maximum bonus
opportunity (if any) and benefits received as of the date hereof.
Section 3.22
of the Transferor Disclosure Schedule lists each employee benefit
plan (within
the meaning of Section 3(3) of ERISA), program or arrangement
providing benefits
to any Transferred Employee or any beneficiary or dependent
thereof that is
sponsored or maintained by any Transferor or any ERISA
Affiliate of any
Transferor or to which any Transferor or any ERISA Affiliate of
any Transferor
contributes or is obligated to contribute.
(b) No Transferor has any liability under Title IV of
ERISA (whether
absolute or contingent) with respect to any "single-employer
plan" within the
meaning of Section 4001(a)(15) of ERISA or "multiemployer
plan" within the
meaning of section 3(37) of ERISA. No Transferor or any
subsidiary of any
Transferor is subject to any lien or has provided, or is
required to provide,
security to any "employee benefit pension plan" (as defined in
Section 3(2) of
ERISA) or single-employer plan of an ERISA Affiliate pursuant
to Section
401(a)(29) of the Code.
(c) Transferor is not a party to any collective
bargaining
agreement, contract, or other agreement with any labor union with
respect to any
Transferred Employer. No Transferred Employee is a party to any
(i) individual
contract, written or oral, with Transferor for the employment of
the Transferred
Employee or the provision of severance, retention or change of
control benefits
19
or (ii) confidentiality, non-solicitation or non-competition
agreement with
Transferor. Each Transferor is in compliance in all material
respects with all
applicable legal requirements relating to the employment of the
Transferred
Employees, including with respect to employment discrimination,
equal pay, wages
and hours, and there are no complaints, charges or claims against
Transferors
pending or, to the Knowledge of the Transferors, threatened in
respect thereof.
Section 3.23 WATER CAPACITY. Transferor has no
Knowledge of any
existing or threatened facts or circumstances that would
materially impair or
prevent adequate water capacity from being available to the
Concord Hotel Site
upon completion of the improvements thereon as contemplated by
the Site Plan,
either from Kiamesha Artesian Spring Water Company and/or from
an alternative
source readily available at or adjacent to the Concord Hotel Site.
Section 3.24 TAX OPINION. Transferor has no Knowledge
of any facts
or circumstances that would cause Wachtell, Lipton, Rosen &
Katz not to deliver
the tax opinion described in Section 7.2(h) hereof in a
form reasonably
satisfactory to Transferor.
Section 3.25 DISCLAIMER. Empire, Newco and Merger
Sub acknowledge
and agree that, except as set forth in this Agreement, Transferor
has not made,
does not make and specifically negates and disclaims any
representations,
warranties, promises, covenants, agreements or guaranties of
any kind or
character whatsoever, whether express or implied, oral or
written, past or
present, of, as to, concerning or with respect to the Properties.
Additionally,
no person acting on behalf of Transferor is authorized to make, and
by execution
hereof Empire acknowledges that no person has made, on behalf of
Transferor, any
representation, agreement, statement, warranty, guaranty or
promise regarding
the Properties or the transactions contemplated herein
other than the
representations, agreements, statements, warranties, guaranties
and promises
contained in this Agreement; and no such other
representation, warranty,
agreement, guaranty, statement or promise, if any, made by any
person acting on
behalf of Transferor shall be valid or binding upon
Transferor unless
specifically set forth herein. Empire further acknowledges and
agrees that to
the extent permitted by law, the sale of the property as provided
for herein is
made on an "as is" condition and basis with all faults except
as expressly
provided in this Agreement.
The representations and warranties contained in
this Article III
shall not survive the Closing.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF EMPIRE
Empire hereby represents and warrants to Transferor as
follows:
Section 4.1 ORGANIZATION, GOOD STANDING AND
QUALIFICATION. Each of
Empire, Newco and Merger Sub is a legal entity duly organized,
validly existing
and in good standing under the laws of its respective
jurisdiction of
organization and has all requisite corporate or similar power and
authority to
own, lease and operate its properties and assets and to carry on
its business as
presently conducted and is qualified to do business and is in good
standing as a
20
foreign corporation in each jurisdiction where the ownership,
leasing or
operation of its assets or properties or conduct of its business
requires such
qualification except where such failures to be so qualified,
licensed, or in
good standing would not have a Material Adverse Effect on Empire.
Section 4.2 CAPITAL STRUCTURE. (a) The authorized
capital stock of
Empire consists of 75,000,000 shares of common stock, par value
$0.01 per share
(the "EMPIRE COMMON STOCK"), of which, as of the date of
this Agreement,
26,092,315 shares are issued and outstanding, and 5,000,000 shares
of preferred
stock, par value $0.01 per share (the "PREFERRED STOCK"), of
which, as of the
date of this Agreement, 1,774,954 shares are outstanding. All of
the outstanding
shares of Empire Common Stock and Preferred Stock have been duly
authorized and
are validly issued, fully paid and nonassessable. As of the date
hereof, Empire
has no shares of Empire Common Stock or Preferred Stock reserved
for issuance,
except as set forth on Section 4.2 of the Empire Disclosure
Schedule. Section
4.2 of the Empire Disclosure Schedule contains a true and
complete list as of
March 1, 2005 of (i) the number of outstanding options to
purchase shares of
empire Common Stock (each an "OPTION"), the exercise price of
all Options and
number of shares of Empire Common Stock issuable at such exercise
price and (ii)
the number of outstanding rights to receive, or rights the
value of which is
determined by reference to, shares of Empire Common Stock, the date
of grant and
number of shares of Empire Common Stock subject thereto. Each of
the outstanding
shares of capital stock or other securities of each of Empire's
Subsidiaries is
duly authorized, validly issued, fully paid and nonassessable
and owned by
Empire or by a direct or indirect wholly-owned Subsidiary of
Empire, free and
clear of any Lien. Each of the Transferor Shares when issued
will be validly
issued, fully paid and non-assessable, free and clear of any
Liens. Except as
set forth in Section 4.2 of the Empire Disclosure Schedule,
as of the date
hereof, there are no preemptive, registration or other
outstanding rights,
options, warrants, conversion rights, stock appreciation
rights, redemption
rights, repurchase rights, agreements, arrangements, calls,
commitments or
rights of any kind that obligate Empire or any of its Subsidiaries
to register,
issue or sell any shares of capital stock or other securities of
Empire or any
of its Subsidiaries or any securities or obligations convertible or
exchangeable
into or exercisable for, or giving any Person a right to
subscribe for or
acquire, any securities of Empire or any of its Subsidiaries, and
no securities
or obligations evidencing such rights are authorized, issued or
outstanding.
(b) Except as set forth in Section 4.2 of the
Empire Disclosure
Schedule, as of the date hereof (i) there are no outstanding
contractual
obligations of Empire or any of its Subsidiaries to
repurchase, redeem or
otherwise acquire any capital stock (or options to acquire any
such capital
stock) or other security or equity interest of Empire or its
Subsidiaries, and
(ii) Empire does not have outstanding any bonds, debentures,
notes or other
obligations the holders of which have the right to vote (or
convertible into or
exercisable for securities having the right to vote) with the
stockholders of
Empire on any matter.
(c) The authorized capital stock of Newco consists of
1,000 shares
of common stock, par value $0.01 per share (the "NEWCO COMMON
STOCK"), of which,
as of the date of this Agreement, 100 shares are issued and
outstanding, and 0
shares of preferred stock, par value $0.01 per share of which, as
of the date of
this Agreement, no shares are outstanding. All of the
outstanding shares of
Newco Common Stock have been duly authorized and are validly
issued, fully paid
and nonassessable. As of the date hereof, Newco has no shares of
Newco Common
21
Stock or preferred stock reserved for issuance. As of the date
hereof, there are
no preemptive, registration or other outstanding rights,
options, warrants,
conversion rights, stock appreciation rights, redemption
rights, repurchase
rights, agreements, arrangements, calls, commitments or rights of
any kind that
obligate Newco, or any of its Affiliates to register, issue or
sell any shares
of capital stock or other securities of Newco or any of its
Subsidiaries or any
securities or obligations convertible or exchangeable into or
exercisable for,
or giving any Person a right to subscribe for or acquire, any
securities of
Newco or any of its Subsidiaries, and no securities or
obligations evidencing
such rights are authorized, issued or outstanding.
(d) The authorized capital stock of Merger Sub
consists of 1,000
shares of common stock, par value $0.01 per share (the "MERGER
SUB COMMON
STOCK"), of which, as of the date of this Agreement, 1,000 shares
are issued and
outstanding, and 0 shares of preferred stock, par value $0.01
per share, of
which, as of the date of this Agreement, no shares are
outstanding. All of the
outstanding shares of Merger Sub Common Stock have been duly
authorized and are
validly issued, fully paid and nonassessable. As of the date
hereof, Merger Sub
has no shares of Merger Sub Common Stock or preferred stock
reserved for
issuance. As of the date hereof, there are no preemptive,
registration or other
outstanding rights, options, warrants, conversion rights, stock
appreciation
rights, redemption rights, repurchase rights, agreements,
arrangements, calls,
commitments or rights of any kind that obligate Merger Sub
or any of its
Affiliates to register, issue or sell any shares of capital
stock or other
securities of Merger Sub or any of its Subsidiaries or any
securities or
obligations convertible or exchangeable into or exercisable for,
or giving any
Person a right to subscribe for or acquire, any securities of
Merger Sub or any
of its Subsidiaries, and no securities or obligations evidencing
such rights are
authorized, issued or outstanding.
Section 4.3 CORPORATE AUTHORITY; APPROVAL. (a)
Empire, Newco, and
Merger Sub have all requisite corporate power and authority and
have taken all
corporate action necessary in order to execute, deliver and
perform their
obligations under this Agreement, subject only to adoption of this
Agreement by
the vote of holders of a majority of the outstanding shares of
Empire Common
Stock (such affirmative vote, the "EMPIRE REQUISITE VOTE"). The
Empire Requisite
Vote is the only vote of the holders of any class or series of
capital stock of
Empire necessary to adopt, approve or authorize this
Agreement and the
transactions contemplated hereby. This Agreement is a valid
and binding
agreement of Empire, Newco and Merger Sub, enforceable against
Empire, Newco and
Merger Sub in accordance with its terms, subject to bankruptcy,
insolvency,
fraudulent transfer, reorganization, moratorium and similar
Laws of general
applicability relating to or affecting creditors' rights and to
general equity
principles.
(b) Subject to SECTION 5.10 hereof, the Board of
Directors of Empire
has (i) by the affirmative vote of all directors voting, duly
approved this
Agreement, the Option Agreement, the Transactions and the other
transactions
contemplated hereby, including for purposes of Section 203 of
the Delaware
General Corporate Law; (ii) determined that this Agreement, the
Transactions and
the other transactions contemplated hereby are advisable and
in the best
interests of the holders of shares of Empire Common Stock; (iii)
resolved to
recommend approval of this Agreement and the Transactions to
the holders of
shares of Empire Common Stock; and (iv) directed that this
Agreement be
submitted to the holders of shares of Empire Common Stock for their
adoption.
22
Section 4.4 GOVERNMENTAL FILINGS; NO VIOLATIONS;
CERTAIN CONTRACTS,
ETC. (a) Other than the reports, filings, registrations,
consents, approvals,
permits, authorizations and/or notices set forth on Section 4.4
of the Empire
Disclosure Schedule, no notices, reports or other filings are
required to be
made by Empire or any of its Affiliates with, nor are
any consents,
registrations, approvals, permits or authorizations required to
be obtained by
Empire or any of its Affiliates from, any governmental or
regulatory authority,
agency, commission, body, court or other governmental
entity (each a
"GOVERNMENTAL ENTITY"), in connection with the execution and
delivery of this
Agreement by Empire and the consummation by Empire of the
transactions
contemplated hereby.
(b) The execution, delivery and performance of this
Agreement by
Empire do not, and the consummation by Empire of the transactions
contemplated
hereby will not, constitute or result in (i) a breach or
violation of, or a
default under, the certificate of incorporation or by-laws of
Empire or the
comparable governing instruments of any of its Subsidiaries; (ii)
except as set
forth in Section 4.4 of the Empire Disclosure Schedule, a breach
or violation
of, a termination (or ri
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