SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 19, 1996
GRIFFIN GAMING & ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-4748 59-0763055
(State or other (Commission (IRS employer
jurisdiction of file number) identification
incorporation) number)
1133 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip code)
Registrant's telephone number,
including area code: (609) 344-6000
Exhibit Index is presented on page 5
Total No. of Pages 125<PAGE>
Item 5. Other Events
On August 19, 1996, Griffin Gaming & Entertainment, Inc.
("GGE") entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Sun International Hotels Limited ("SIHL") and
Sun Merger Corp., a wholly owned subsidiary of SIHL. Under the
Merger Agreement, through a stock-for-stock merger, GGE will be
merged with and into a wholly owned subsidiary of SIHL (the
"Merger"). Each share of GGE Common Stock will be exchanged for
.4324 Ordinary Shares of SIHL. SIHL's Ordinary Shares closed at
$51.875 on Friday, August 16, 1996, implying a purchase price of
$22.43 for each share of GGE Common Stock. If the average share
price of SIHL's Ordinary Shares (determined during a pricing
period preceding the closing of the Merger) falls below $47.41,
the exchange ratio will be adjusted upward so that, except under
certain circumstances, each share of GGE Common Stock will be
exchanged for $20.50 of SIHL's Ordinary Shares. If the average
share price of SIHL's Ordinary Shares falls below $41.625, SIHL
can terminate the Merger Agreement unless GGE elects to go
forward with the Merger at a fixed exchange ratio whereby each
share of GGE Common Stock will be exchanged for .4925 Ordinary
Shares of SIHL.
Each share of GGE's Class B Common Stock, which was issued
and trades on the American Stock Exchange as part of a unit with
$1,000 principal amount of Resorts International Hotel Financing,
Inc. 11.375% Junior Mortgage Notes due 2004 (the "Junior Notes"),
will be exchanged for .1928 Ordinary Shares of SIHL, implying a
purchase price of $10 per share, which fraction will continue to
trade as a unit with the Junior Notes.
GGE's Board of Directors has, and GGE is informed that
SIHL's Board of Directors has, unanimously approved the Merger.
The Merger is subject to certain customary conditions, including
approval of the New Jersey Casino Control Commission. The
transaction will also require a shareholder vote by the
shareholders of GGE and SIHL.
In connection with the Merger Agreement, SIHL has entered
into an agreement with an affiliate of Merv Griffin, the Chairman
of the Board of GGE, who controls in excess of 25% of the
outstanding shares of GGE Common Stock. This agreement provides,
among other things, that Mr. Griffin will vote such shares for
the Merger and that, upon consummation of the Merger, an
affiliate of Mr. Griffin will enter into a new license and
services agreement with GGE and its subsidiary which owns and
operates Merv Griffin's Resorts Casino Hotel in Atlantic City,
New Jersey.
Also in connection with the Merger Agreement, GGE has
entered into an agreement with Sun International Investments
Limited ("SIIL"), the holder of a majority of the Ordinary Shares
2<PAGE>
of SIHL, which agreement provides, among other things, that SIIL
will vote its Ordinary Shares so as to amend the charter of SIHL
in order to enable SIHL to consummate the Merger.
Item 7(c). Exhibits
The following exhibits are filed as part of this report:
Exhibit
Number Exhibit
(2)(a) Agreement and Plan of Merger, dated August 19, 1996,
among Sun International Hotels Limited, Sun Merger
Corp. and Griffin Gaming & Entertainment, Inc.
(2)(b) Stockholder Agreement, dated August 19, 1996, among Sun
International Hotels Limited and the various
Stockholders of Griffin Gaming & Entertainment, Inc.
set forth therein.
(2)(c) Stockholder Agreement, dated August 19, 1996, between
Griffin Gaming & Entertainment, Inc. and Sun
International Investments Limited.
Certain disclosure schedules prepared by GGE and SIHL
setting forth certain exceptions to their respective
representations and warranties are not filed herewith. GGE
agrees to furnish them to the Securities and Exchange Commission
supplementally upon request.
3<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
GRIFFIN GAMING & ENTERTAINMENT, INC.
(Registrant)
/s/ Matthew B. Kearney
Matthew B. Kearney
Executive Vice President -
Finance
(Authorized Officer of
Registrant and Chief
Financial Officer)
Date: August 23, 1996
4<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC.
Form 8-K dated August 19, 1996
EXHIBIT INDEX
Exhibit Page Number
Number Exhibit in Form 8-K
(2)(a) Agreement and Plan of Merger,
dated August 19, 1996, among
Sun International Hotels
Limited, Sun Merger Corp. and
Griffin Gaming & Entertainment,
Inc. 6
(2)(b) Stockholder Agreement, dated
August 19, 1996, among Sun
International Hotels Limited
and the various Stockholders
of Griffin Gaming &
Entertainment, Inc. set forth
therein. 91
(2)(c) Stockholder Agreement, dated
August 19, 1996, between
Griffin Gaming & Entertainment,
Inc. and Sun International
Investments Limited. 121
5<PAGE>
EXHIBIT(2)(a)
AGREEMENT AND PLAN OF MERGER
Dated as of August 19, 1996,
Among
SUN INTERNATIONAL HOTELS LIMITED
SUN MERGER CORP.
And
GRIFFIN GAMING & ENTERTAINMENT, INC.
6<PAGE>
TABLE OF CONTENTS
ARTICLE I
The Merger
SECTION 1.01. The Merger . . . . . . . . . . . . . . . 2
SECTION 1.02. Closing . . . . . . . . . . . . . . . . 3
SECTION 1.03. Effective Time . . . . . . . . . . . . . 3
SECTION 1.04. Effects of the Merger . . . . . . . . . 3
SECTION 1.05. Certificate of Incorporation
and By-laws . . . . . . . . . . . . . 3
SECTION 1.06. Directors . . . . . . . . . . . . . . . 4
SECTION 1.07. Officers . . . . . . . . . . . . . . . . 4
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock . . . . . . . . 4
SECTION 2.02. Exchange of Certificates . . . . . . . . 6
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties
of the Company . . . . . . . . . . . . 10
SECTION 3.02. Representations and Warranties
of Parent and Sub . . . . . . . . . . 33
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business . . . . . . . . . . 40
SECTION 4.02. No Solicitation . . . . . . . . . . . . 44
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form F-4
and the Proxy Statement;
Stockholders Meetings . . . . . . . . 46
SECTION 5.02. Letters of the Company's Accountants . . 48
7<PAGE>
2
SECTION 5.03. Letters of Parent's Accountants . . . . 48
SECTION 5.04. Access to Information; Confidentiality . 48
SECTION 5.05. Reasonable Efforts . . . . . . . . . . . 49
SECTION 5.06. Stock Options; Warrants . . . . . . . . 50
SECTION 5.07. Benefit Plans . . . . . . . . . . . . . 53
SECTION 5.08. Indemnification and Insurance . . . . . 53
SECTION 5.09. Fees and Expenses . . . . . . . . . . . 54
SECTION 5.10. Public Announcements . . . . . . . . . . 55
SECTION 5.11. Affiliates . . . . . . . . . . . . . . . 55
SECTION 5.12. NYSE Listing . . . . . . . . . . . . . . 55
SECTION 5.13. Stockholder Litigation . . . . . . . . . 56
SECTION 5.14. Title Policies; Title Insurance . . . . 56
SECTION 5.15. Surveys . . . . . . . . . . . . . . . . 56
SECTION 5.16. Class B Option . . . . . . . . . . . . . 57
SECTION 5.17. Amendments to Junior Mortgage
Notes Indenture . . . . . . . . . . . 57
SECTION 5.18. Chalfonte Project Parking Garage . . . . 58
SECTION 5.19. Supplemental Indenture . . . . . . . . . 58
SECTION 5.20. ICA Election . . . . . . . . . . . . . . 58
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's
Obligation To Effect the Merger . . . 58
SECTION 6.02. Conditions to Obligations of Parent
and Sub . . . . . . . . . . . . . . . 59
SECTION 6.03. Conditions to Obligation of
the Company . . . . . . . . . . . . . 61
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination . . . . . . . . . . . . . . 62
SECTION 7.02. Effect of Termination . . . . . . . . . 64
SECTION 7.03. Amendment . . . . . . . . . . . . . . . 65
SECTION 7.04. Extension; Waiver . . . . . . . . . . . 65
SECTION 7.05. Procedure for Termination, Amendment,
Extension or Waiver . . . . . . . . . 65
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations
and Warranties . . . . . . . . . . . . 66
8<PAGE>
3
SECTION 8.02. Notices . . . . . . . . . . . . . . . . 66
SECTION 8.03. Definitions . . . . . . . . . . . . . . 67
SECTION 8.04. Interpretation . . . . . . . . . . . . . 69
SECTION 8.05. Counterparts . . . . . . . . . . . . . . 70
SECTION 8.06. Entire Agreement;
No Third-Party Beneficiaries . . . . . 70
SECTION 8.07. Governing Law . . . . . . . . . . . . . 70
SECTION 8.08. Assignment . . . . . . . . . . . . . . . 70
SECTION 8.09. Enforcement . . . . . . . . . . . . . . 71
9<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of
August 19, 1996, among Sun International
Hotels Limited, a corporation organized and
existing under the laws of the Commonwealth
of the Bahamas ("Parent"), Sun Merger Corp.,
a Delaware corporation and a wholly owned
subsidiary of Parent ("Sub"), and Griffin
Gaming & Entertainment, Inc., a Delaware
corporation (the "Company").
WHEREAS the respective Boards of Directors of
Parent, Sub and the Company, and Parent acting as the sole
stockholder of Sub, have approved the merger of the Company
with and into Sub (the "Merger"), upon the terms and subject
to the conditions set forth in this Agreement, whereby
(i) each issued and outstanding share of Common Stock, par
value $.01 per share, of the Company ("Company Common
Stock"), other than shares owned directly or indirectly by
Parent or the Company, will be converted into the right to
receive the Merger Consideration (as defined in
Section 2.01(c)) and (ii) each issued and outstanding share
of Class B Common Stock, par value $.01 per share, of the
Company ("Company Class B Common Stock") which was issued,
and trades, as a unit (the "Units") with the Company's
11.375% Junior Mortgage Notes due 2004 (the "Junior Mortgage
Notes"), other than shares forming a part of Units owned
directly or indirectly by Parent or the Company, will be
converted into the right to receive the Class B
Consideration (as defined in Section 2.01(d));
WHEREAS, as a condition of the willingness of
Parent to enter into this Agreement, those stockholders of
the Company (the "Company Significant Stockholders") listed
on Schedule A attached to the Company Stockholder Agreement
(as defined below) have entered into the Stockholder
Agreement dated as of the date hereof (the "Company
Stockholder Agreement") with Parent, which provides, among
other things, that, subject to the terms and conditions
thereof, each Company Significant Stockholder will vote its
shares of Company Common Stock in favor of the Merger and
the approval and adoption of this Agreement;
WHEREAS, as a condition of the willingness of the
Company to enter into this Agreement, Sun International
Investments Limited (the "Parent Significant Stockholder")
has entered into the Stockholder Agreement dated as of the
date hereof (the "Parent Stockholder Agreement", and,
10<PAGE>
2
together with the Company Stockholder Agreement, the
"Stockholder Agreements") with the Company, which provides,
among other things, that, subject to the terms and
conditions thereof, the Parent Significant Stockholder will
vote its Ordinary Shares, $.001 par value per share, of
Parent (the "Ordinary Shares") in favor of certain
amendments to Parent's Articles of Association necessary to
comply with the New Jersey Casino Control Act;
WHEREAS the Board of Directors of the Company has
approved the terms of the Company Stockholder Agreement;
WHEREAS Parent, Sub and the Company desire to make
certain representations, warranties, covenants and
agreements in connection with the Merger and also to
prescribe various conditions to the Merger; and
WHEREAS, for Federal income tax purposes, it is
intended that the Merger shall qualify as a reorganization
under the provisions of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained in this Agreement, the parties agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. (a) Upon the terms
and subject to the conditions set forth in this Agreement,
and in accordance with the Delaware General Corporation Law
(the "DGCL"), the Company shall be merged with and into Sub
at the Effective Time (as defined in Section 1.03).
Following the Effective Time, the separate corporate
existence of the Company shall cease and Sub shall continue
as the surviving corporation (the "Surviving Corporation")
and shall succeed to and assume all the rights and
obligations of the Company in accordance with the DGCL.
(b) At the election of Parent, any direct wholly
owned subsidiary (as defined in Section 8.03) of Parent may
be substituted for Sub as a constituent corporation in the
Merger. In such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect
11<PAGE>
3
such substitution. Furthermore, at the election of Parent
(the "DD Election"), the structure of the Merger (as set
forth in this Section 1.01) will be changed in order to
qualify the transaction as another form of tax-free
incorporation transaction under Section 351 of the Code (and
in the latter case the Company Common Stock will be
converted into the right to receive common stock of a newly-
formed corporation of which both Parent and the Company will
become wholly owned subsidiaries and the Company Class B
Common Stock shall remain outstanding, and otherwise on
substantially the same terms as set forth in this
Agreement). In the case of the DD Election, the parties
agree to execute an appropriate amendment to this Agreement
in order to reflect such change in structure.
SECTION 1.02. Closing. The closing of the Merger
(the "Closing") will take place at 10:00 a.m. on a date to
be specified by the parties (the "Closing Date"), which
(subject to satisfaction or waiver of the conditions set
forth in Sections 6.01, 6.02 and 6.03) shall be no later
than the second business day after satisfaction or waiver of
the conditions set forth in Section 6.01 and
Section 6.02(e), at the offices of Cravath, Swaine & Moore,
Worldwide Plaza, 825 Eighth Avenue, New York, New
York 10019, unless another time, date or place is agreed to
in writing by the parties hereto.
SECTION 1.03. Effective Time. Subject to the
provisions of this Agreement, as soon as practicable on or
after the Closing Date, the parties shall file a certificate
of merger or other appropriate documents (in any such case,
the "Certificate of Merger") executed in accordance with the
relevant provisions of the DGCL and shall 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 other time as Sub and the Company shall agree
should be specified in the Certificate of Merger (the time
the Merger becomes effective being hereinafter referred to
as the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger
shall have the effects set forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and
By-laws. (a) The Certificate of Incorporation of Sub, as
in effect immediately prior to the Effective Time, shall be
amended as of the Effective Time to read as set forth in
12<PAGE>
4
Exhibit A and, as so amended, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The By-laws of Sub as in effect at the
Effective Time shall be the By-laws of the Surviving
Corporation, until thereafter changed or amended as provided
therein or by applicable law.
SECTION 1.06. Directors. The directors of Sub
immediately prior to the Effective Time shall become the
directors of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective
successors are duly elected and qualified, as the case may
be.
SECTION 1.07. Officers. The officers of the
Company immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective
successors are duly elected and qualified, as the case may
be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. As of the
Effective Time, by virtue of the Merger and without any
action on the part of the holder of any shares of capital
stock of the Company or Sub:
(a) Capital Stock of Sub. Each issued and
outstanding share of common stock, par value $.01 per
share, of Sub shall continue to be one validly issued
and outstanding, fully paid and nonassessable share of
common stock, par value $.01 per share, of the
Surviving Corporation. Each certificate representing
any such shares of Sub shall continue to represent the
same number of shares of the Surviving Corporation
(b) Cancellation of Treasury Stock and Parent-
Owned Stock. Each share of Company Common Stock or
Company Class B Common Stock that is owned by the
Company or by any subsidiary of the Company and each
share of Company Common Stock or Company Class B Common
13<PAGE>
5
Stock that is owned by Parent, Sub or any other subsidiary
of Parent shall automatically be cancelled and retired and
shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject
to Section 2.02(e), each issued and outstanding share
of Company Common Stock (other than shares to be
cancelled in accordance with Section 2.01(b)) shall be
converted into the right to receive the Conversion
Number (as defined below) of a fully paid and
nonassessable Ordinary Share (the "Merger
Consideration"). Subject to the proviso to Section
7.01(h), the "Conversion Number" means .4324; provided,
however, if the average of the closing sales prices of
one Ordinary Share as reported on the New York Stock
Exchange ("NYSE") Composite Transactions List (as
reported in the Wall Street Journal or, if not reported
thereby, any other authoritative source) for each of
the 15 consecutive trading days immediately preceding
the fifth trading day prior to the Effective Time (the
"Average Market Price") is less than $47.41, then the
Conversion Number shall be the quotient, rounded to the
fourth decimal place, obtained by dividing 20.5 by the
Average Market Price. As of the Effective Time, all
such shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company
Common Stock shall cease to have any rights with
respect thereto, except the right to receive the Merger
Consideration and any cash in lieu of fractional
Ordinary Shares to be issued or paid in consideration
therefor upon surrender of such certificate in
accordance with Section 2.02, without interest.
(d) Conversion of Company Class B Common
Stock. Each issued and outstanding share of Company
Class B Common Stock (other than shares to be cancelled
in accordance with Section 2.01(b)) shall be converted
into the right to receive .1928 of a fully paid and
nonassessable Ordinary Share (the "Class B
Consideration"). As of the Effective Time, all such
shares of Company Class B Common Stock shall no longer
be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company
Class B Common Stock shall cease to have any rights
14<PAGE>
6
with respect thereto, except the right to receive the
Class B Consideration to be issued in consideration
therefor upon surrender of such certificate in
accordance with Section 2.02, without interest. As of
the Effective Time, the fraction of an Ordinary Share
into which a share of Company Class B Common Stock is
converted shall be issued, and trade, as a unit with
the related Junior Mortgage Note in lieu of such share
of Company Class B Common Stock.
SECTION 2.02. Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Parent shall
deposit with such bank or trust company as may be designated
by Parent (the "Exchange Agent"), for the benefit of the
holders of shares of Company Common Stock and Company
Class B Common Stock, for exchange in accordance with this
Article II, through the Exchange Agent, certificates
representing the Ordinary Shares (such Ordinary Shares,
together with any dividends or distributions with respect
thereto with a record date after the Effective Time, and any
cash payable in lieu of any fractional Ordinary Shares being
hereinafter referred to as the "Exchange Fund") issuable
pursuant to Section 2.01 in exchange for outstanding shares
of Company Common Stock and Company Class B Common Stock.
(b) Exchange Procedures. As soon as reasonably
practicable 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 Company Common Stock (the
"Common Certificates") or Company Class B Common Stock (the
"Class B Certificates", and, together with the Common
Certificates, the "Certificates") whose shares were
converted into the right to receive the Merger Consideration
or the Class B Consideration, as applicable, pursuant to
Section 2.01, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery
of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for
the Merger Consideration or the Class B Consideration, as
applicable. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Parent, together with such
letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Exchange
15<PAGE>
7
Agent (including, in the case of Class B Certificates, the
related Junior Mortgage Notes), the holder of such
Certificate shall be entitled to receive in exchange
therefor (i) in the case of Common Certificates, a
certificate representing that number of whole Ordinary
Shares and cash, if any, which such holder has the right to
receive pursuant to the provisions of this Article II, and
(ii) in the case of Class B Certificates, a certificate
representing that number of fractional Ordinary Shares and
cash, if any, which such holder has the right to receive
pursuant to the provisions of this Article II, together with
the Junior Mortgage Notes surrendered with such Class B
Certificates and, in each case, the Certificate so
surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Company Common Stock or Units which
is not registered in the transfer records of the Company, a
certificate representing the proper number of Ordinary
Shares may be issued to a person (as defined in Section
8.03) other than the person in whose name the Certificate so
surrendered is registered, if such Certificate 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
issuance of Ordinary Shares to a person other than the
registered holder of such Certificate or establish to the
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 any time
after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration or the
Class B Consideration, as applicable, and cash, if any,
which the holder thereof has the right to receive in respect
of such Certificate pursuant to the provisions of this
Article II. No interest will be paid or will accrue on any
cash payable to holders of Certificates pursuant to the
provisions of this Article II.
(c) Distributions with Respect to Unexchanged
Shares. No dividends or other distributions with respect to
Ordinary Shares with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate
with respect to the Ordinary Shares represented thereby, and
no cash payment in lieu of fractional shares shall be paid
to any such holder pursuant to Section 2.02(e), and all such
dividends, other distributions and cash in lieu of
fractional Ordinary Shares shall be paid by Parent to the
Exchange Agent and shall be included in the Exchange Fund,
in each case until the surrender of such Certificate in
16<PAGE>
8
accordance with this Article II. Subject to the effect of
applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the
certificate representing whole (or, in the case of Class B
Certificates, fractional) Ordinary Shares issued in exchange
therefor, without interest, (i) at the time of such
surrender, the amount of any cash payable in lieu of a
fractional Ordinary Share to which such holder is entitled
pursuant to Section 2.02(e), in the case of Common
Certificates, and the amount of dividends or other
distributions with a record date after the Effective Time
theretofore paid with respect to such whole (or, in the case
of Class B Certificates, fractional) Ordinary Shares, and
(ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after
the Effective Time but prior to such surrender and with a
payment date subsequent to such surrender payable with
respect to such whole (or, in the case of Class B
Certificates, fractional) Ordinary Shares.
(d) No Further Ownership Rights in Company Common
Stock or Company Class B Common Stock. All Ordinary Shares
issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article II (including any
cash paid pursuant to this Article II) shall be deemed to
have been issued (and paid) in full satisfaction of all
rights pertaining to the shares of Company Common Stock or
Company Class B Common Stock, as applicable, theretofore
represented by such Certificates, subject, however, to the
Surviving Corporation's obligation to pay any dividends or
make any other distributions with a record date prior to the
Effective Time which may have been declared or made by the
Company on such shares of Company Common Stock or Company
Class B Common Stock, as applicable, in accordance with the
terms of this Agreement or prior to the date of this
Agreement and which remain unpaid at the Effective Time, and
there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the
shares of Company Common Stock or Company Class B Common
Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates
are presented to the Surviving Corporation or the Exchange
Agent for any reason, they shall be cancelled and exchanged
as provided in this Article II, except as otherwise provided
by law.
(e) No Fractional Shares. (i) No certificates
or scrip representing fractional Ordinary Shares shall be
17<PAGE>
9
issued upon the surrender for exchange of Common
Certificates, no dividend or distribution of Parent shall
relate to such fractional share interests and such
fractional share interests will not entitle the owner
thereof to vote or to any rights of a shareholder of Parent.
(ii) Notwithstanding any other provision of this
Agreement, each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have
been entitled to receive a fraction of an Ordinary Share
(after taking into account all Common Certificates delivered
by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional
part of an Ordinary Share multiplied by the closing sales
price of one Ordinary Share on the NYSE Composite
Transactions List (as reported by the Wall Street Journal
or, if not reported thereby, any other authoritative source)
on the Closing Date.
(f) Termination of Exchange Fund. Any portion of
the Exchange Fund which remains undistributed to the holders
of the Certificates for six months after the Effective Time
shall be delivered to Parent, upon demand, and any holders
of the Certificates who have not theretofore complied with
this Article II shall thereafter look only to Parent for
payment of their claim for the Merger Consideration or the
Class B Consideration, as applicable, and any cash or
dividends or distributions payable to such holders pursuant
to this Article II.
(g) No Liability. None of Parent, Sub, the
Company or the Exchange Agent shall be liable to any person
in respect of any Ordinary Shares (or any dividends or
distributions with respect thereto or with respect to any
shares of Company Common Stock or Company Class B Common
Stock, as applicable, theretofore represented by any
Certificate) or any cash from the Exchange Fund delivered to
a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificate shall
not have been surrendered prior to seven years after the
Effective Time (or immediately prior to such earlier date on
which any Merger Consideration or Class B Consideration, as
applicable, or any cash or other dividends or distributions
payable to the holder of such Certificate pursuant to this
Article II would otherwise escheat to or become the property
of any Governmental Entity (as defined in Section 3.01(d))),
any such Merger Consideration or Class B Consideration, as
applicable, or cash or other dividends or distributions
18<PAGE>
10
shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all
claims or interest of any person previously entitled
thereto.
(h) Investment of Exchange Fund. The Exchange
Agent shall invest any cash included in the Exchange Fund,
as directed by Parent, on a daily basis. Any interest and
other income resulting from such investments shall be paid
to Parent. In the event the Exchange Fund shall realize a
loss on any such investment, Parent shall deposit additional
cash in the Exchange Fund to the extent necessary to satisfy
its obligation to distribute cash to the holders of Company
Common Stock in lieu of fractional shares as set forth in
Section 2.02(e) or cash dividends or other distributions as
set forth in Section 2.02(c).
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of
the Company. Except as set forth with respect to a
specifically identified representation and warranty on the
Disclosure Schedule delivered by the Company to Parent prior
to the execution of this Agreement (the "Company Disclosure
Schedule"), the Company represents and warrants to Parent
and Sub as follows:
(a) Organization, Standing and Corporate Power.
Each of the Company and each of its Significant
Subsidiaries (as defined in Section 8.03) is a
corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in
which it is incorporated and has the requisite
corporate power and authority to carry on its business
as now being conducted. Each of the Company and each
of its Significant Subsidiaries is duly qualified or
licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such
qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified
or licensed or to be in good standing individually or
in the aggregate would not have a material adverse
effect (as defined in Section 8.03) on the Company.
The Company has delivered to Parent prior to the
19<PAGE>
11
execution of this Agreement complete and correct copies
of its certificate of incorporation and by-laws and the
certificates of incorporation and by-laws (or
comparable organizational documents) of its Significant
Subsidiaries, in each case as amended to date.
(b) Subsidiaries. The Company Disclosure
Schedule sets forth a true and complete list of each
subsidiary of the Company. All the outstanding shares
of capital stock of each subsidiary of the Company have
been validly issued and are fully paid and
nonassessable and are owned by the Company, by another
subsidiary of the Company or by the Company and another
such subsidiary, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of
any kind or nature whatsoever (collectively, "Liens").
Except for the capital stock of its subsidiaries, the
Company does not own, directly or indirectly, any
capital stock or other ownership interest in any
corporation, limited liability company, partnership,
joint venture or other entity.
(c) Capital Structure. The authorized capital
stock of the Company consists of 100,000,000 shares of
Company Common Stock, 120,000 shares of Company Class B
Common Stock and 10,000,000 shares of Preferred Stock,
par value $.01 per share, of the Company ("Company
Preferred Stock"). At the close of business on
August 15, 1996, (i) 7,941,035 shares of Company Common
Stock were issued and outstanding, (ii) 35,000 shares
of Company Class B Common Stock were issued and
outstanding, (iii) no shares of Company Preferred Stock
were issued and outstanding, (iv) 0 shares of Company
Common Stock and 12,899 shares of Company Class B
Common Stock were held by the Company in its treasury
or by subsidiaries of the Company, (v) 1,240,362 shares
of Company Common Stock were reserved for issuance
pursuant to the Stock Plans (as defined in
Section 5.06(a)), (vi) 933,370 shares of Company Common
Stock were reserved for issuance upon exercise of all
outstanding warrants of the Company (the "Company
Warrants") and (vii) 208,354 shares of Company Common
Stock were reserved for issuance upon settlement of
Other Class 3C Claims, as defined in the Company's plan
of reorganization which was effected in 1990. Except
as set forth above, at the close of business on
August 15, 1996, no shares of capital stock or other
voting securities of the Company were issued, reserved
20<PAGE>
12
for issuance or outstanding. There are no outstanding
stock appreciation rights or rights (other than the
Employee Stock Options (as defined in Section 5.06(a))
to receive shares of Company Common Stock on a deferred
basis granted under the Stock Plans or otherwise. The
Company Disclosure Schedule sets forth a complete and
correct list, as of August 15, 1996, of the holders of
all Employee Stock Options, the number of shares
subject to each such option and the exercise prices
thereof. All outstanding shares of capital stock of
the Company are, and all shares which may be issued
pursuant to the Stock Plans and the Company Warrants
will be, when issued, duly authorized, validly issued,
fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures,
notes or other indebtedness of the Company having the
right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any
matters on which stockholders of the Company may vote;
provided, however, that shares of the Company Class B
Common Stock trade as a unit with the Junior Mortgage
Notes and the holders of such shares are entitled to
vote on the election of certain directors to the Board
of Directors of the Company. Except as set forth above
and except for the Company's obligation to issue shares
of Company Class B Common Stock upon the issuance of
additional Junior Mortgage Notes, there are no
outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of
its subsidiaries is a party or by which any of them is
bound obligating the Company or any of its subsidiaries
to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock
or other voting securities of the Company or of any of
its subsidiaries or obligating the Company or any of
its subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
Except for the provisions set forth in the Amended and
Restated Certificate of Incorporation of the Company
with respect to the redemption of the securities of the
Company pursuant to the provisions of the New Jersey
Casino Control Act and additional provisions regarding
the redemption of shares of Company Class B Stock,
there are no outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock
21<PAGE>
13
of the Company or any of its subsidiaries. There are
no outstanding contractual obligations of the Company
to vote or to dispose of any shares of the capital
stock of any of its subsidiaries.
(d) Authority; Noncontravention. The Company has
all requisite corporate power and authority to enter
into this Agreement and, subject to the Company
Stockholder Approval (as defined in Section 3.01(m))
with respect to the Merger, to consummate the
transactions contemplated by this Agreement. The
execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions
contemplated by this Agreement have been duly
authorized by all necessary corporate action on the
part of the Company, subject, in the case of the
Merger, to the Company Stockholder Approval. This
Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation
of the Company, enforceable against the Company in
accordance with its terms. The execution and delivery
of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will
not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to
loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or
assets of the Company or any of its subsidiaries under,
(i) the Amended and Restated Certificate of
Incorporation or By-laws of the Company or the
comparable charter or organizational documents of any
of its subsidiaries, (ii) subject to the governmental
filings and other matters referred to in the following
sentence, any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license
applicable to the Company or any of its subsidiaries or
any of their respective properties or assets or
(iii) subject to the governmental filings and other
matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to the Company or any of its
subsidiaries or any of their respective properties or
assets, other than, in the case of clauses (ii) and
(iii), any such conflicts, violations, defaults, rights
22<PAGE>
14
or Liens that individually or in the aggregate would
not (x) have a material adverse effect on the Company,
(y) impair the ability of the Company to perform its
obligations under this Agreement in any material
respect or (z) delay in any material respect or prevent
the consummation of any of the transactions
contemplated by this Agreement or the Company
Stockholder Agreement. No consent, approval, order or
authorization of, or registration, declaration or
filing with, any Federal, state or local government or
any court, administrative or regulatory agency or
commission or other governmental authority or agency (a
"Governmental Entity"), is required by the Company or
any of its subsidiaries in connection with the
execution and delivery of this Agreement by the Company
or the consummation by the Company of the transactions
contemplated by this Agreement, except for (1) the
filing of a premerger notification and report form by
the Company under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act");
(2) the filing with the Securities and Exchange
Commission (the "SEC") of (A) a proxy statement (such
proxy statement, as amended or supplemented from time
to time, the "Proxy Statement") relating to the Company
Stockholders Meeting (as defined in Section 5.01(b)),
and (B) such reports under Section 13(a) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with
this Agreement and the transactions contemplated by
this Agreement; (3) the approval by the New Jersey
Casino Control Commission under the New Jersey Casino
Control Act and the rules and regulations promulgated
thereunder; (4) the filing of the Certificate of Merger
with the Delaware Secretary of State and appropriate
documents with the relevant authorities of other states
in which the Company is qualified to do business;
(5) such filings with Governmental Entities as may be
required to satisfy the applicable requirements of
state securities or "blue sky" laws in connection with
the transactions contemplated by this Agreement;
(6) filings under the New Jersey Industrial Site
Recovery Act; (7) the filing of International Capital
Form S of the U.S. Department of the Treasury; and
(8) such filings with and approvals of the American
Stock Exchange ("ASE") to permit the Units and the
Junior Mortgage Notes to continue to be listed on the
ASE.
23<PAGE>
15
(e) SEC Documents; Undisclosed Liabilities. The
Company has filed all required reports, schedules,
forms, statements and other documents with the SEC
since January 1, 1995 (the "SEC Documents"). As of
their respective dates, the SEC Documents complied in
all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC
Documents when filed contained any untrue statement of
a material fact or omitted to state a material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not
misleading. Except to the extent that information
contained in any SEC Document has been revised or
superseded by a later-filed SEC Document, none of the
SEC Documents contains any untrue statement of a
material fact or omits 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 were made, not
misleading. The financial statements of the Company
included in the SEC Documents comply as to form in all
material respects with applicable accounting
requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting
principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods
involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial
position of the Company and its consolidated
subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed SEC
Documents (as defined in Section 3.01(g)), and, except
for liabilities and obligations incurred since June 30,
1996 in the ordinary course of business consistent with
past practice, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or
otherwise) required by generally accepted accounting
principles to be recognized or disclosed on a
24<PAGE>
16
consolidated balance sheet of the Company and its
consolidated subsidiaries or in the notes thereto and
which, individually or in the aggregate, could
reasonably be expected to have a material adverse
effect on the Company.
(f) Information Supplied. None of the
information supplied or to be supplied by the Company
specifically for inclusion or incorporation by
reference in (i) the registration statement on Form F-4
to be filed with the SEC by Parent in connection with
the issuance of Ordinary Shares in the Merger (the
"Form F-4") will, at the time the Form F-4 is filed
with the SEC, at any time it is amended or supplemented
or at the time it becomes effective under the
Securities Act, contain any untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading or (ii) 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, contain any untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form
in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by
the Company with respect to statements made or
incorporated by reference therein based on information
supplied by Parent or Sub specifically for inclusion or
incorporation by reference in the Proxy Statement.
(g) Absence of Certain Changes or Events. Except
as disclosed in the SEC Documents filed and publicly
available prior to the date of this Agreement (the
"Filed SEC Documents"), since the date of the most
recent audited financial statements included in the
Filed SEC Documents, the Company has conducted its
business only in the ordinary course, and there has not
been (i) any material adverse change (as defined in
Section 8.03) in the Company, (ii) any declaration,
setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with
respect to any of the Company's capital stock,
(iii) any split, combination or reclassification of any
25<PAGE>
17
of its capital stock or any issuance or the
authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for shares
of its capital stock, (iv) (x) any granting by the
Company or any of its subsidiaries to any executive
officer or other key employee of the Company or any of
its subsidiaries of any increase in compensation,
except for normal increases in the ordinary course of
business consistent with past practice or as required
under any employment agreement in effect as of the date
of the most recent audited financial statements
included in the Filed SEC Documents, or (y) any
granting by the Company or any of its subsidiaries to
any such executive officer or key employee of any
increase in severance or termination pay, except as was
required under any employment, severance or termination
agreement in effect as of the date of the most recent
audited financial statements included in the Filed SEC
Documents, (v) any damage, destruction or loss, whether
or not covered by insurance, that has or could
reasonably be expected to have a material adverse
effect on the Company, (vi) except insofar as may have
been disclosed in the Filed SEC Documents or required
by a change in generally accepted accounting
principles, any change in accounting methods,
principles or practices by the Company materially
affecting its assets, liabilities or business or
(vii) any other action taken which would have
constituted a breach of Section 4.01(a) (other than
Section 4.01(a)(iii)) had it been in effect.
(h) Litigation. Except as disclosed in the Filed
SEC Documents, there is no suit, action or proceeding
pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its
subsidiaries that individually or in the aggregate
could reasonably be expected to (i) have a material
adverse effect on the Company, (ii) impair the ability
of the Company to perform its obligations under this
Agreement in any material respect or (iii) delay in any
material respect or prevent the consummation of any of
the transactions contemplated by this Agreement or the
Company Stockholder Agreement, nor is there any
judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against
the Company or any of its subsidiaries having, or
which, insofar as reasonably can be foreseen, in the
26<PAGE>
18
future would have, any effect referred to in
clause (i), (ii) or (iii) above.
(i) Absence of Changes in Benefit Plans. Except
as disclosed in the Filed SEC Documents, since the date
of the most recent audited financial statements
included in the Filed SEC Documents, there has not been
any adoption or amendment in any material respect by
the Company or any of its subsidiaries of any
collective bargaining agreement or any bonus, pension,
profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding (whether or
not legally binding) providing benefits to any current
or former employee, officer or director of the Company
or any of its subsidiaries (collectively, "Benefit
Plans"). Without limiting the foregoing, except as
disclosed in the Filed SEC Documents, since the date of
the most recent audited financial statements included
in the Filed SEC Documents, there has not been any
change in any actuarial or other assumption used to
calculate funding obligations with respect to any
Pension Plan (as defined below), or in the manner in
which contributions to any Pension Plan are made or the
basis on which such contributions are determined.
Except as disclosed in the Filed SEC Documents, there
exist no employment, consulting, severance, termination
or indemnification agreements, arrangements or
understandings between the Company or any of its
subsidiaries and any current or former employee,
officer or director of the Company or any of its
subsidiaries.
(j) ERISA Compliance. (i) The Company
Disclosure Schedule contains a list of each "employee
pension benefit plan" (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (a "Pension Plan"), each "employee
welfare benefit plan" (as defined in Section 3(1) of
ERISA) (a "Welfare Plan"), and each other plan
arrangement or policy (written or oral) relating to
stock options, stock purchases, compensation, deferred
compensation, severance, fringe benefits or other
employee benefits, in each case maintained, contributed
to or required to be maintained or contributed to by
the Company, any of its subsidiaries or any other
27<PAGE>
19
person or entity that, together with the Company, is
treated as a single employer under Section 414(b), (c),
(m) or (o) of the Code (each, a "Commonly Controlled
Entity") which is currently in effect for the benefit
of any current or former employees, agents, officers,
directors or independent contractors of the Company or
any of its subsidiaries (collectively, "Benefit
Plans"). None of the Benefit Plans, other than any
Benefit Plan that is a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA (a "Multiemployer
Plan"), are subject to Title IV of ERISA. No Commonly
Controlled Entity has, within the past five years prior
to the date of this Agreement, maintained or
contributed to a plan which was subject to Title IV of
ERISA other than a Multiemployer Plan. The Company has
delivered (or will deliver as soon as practicable after
the date of execution of this Agreement) to Parent
true, complete and correct copies of (w) each Benefit
Plan (or, in the case of unwritten Benefit Plans,
descriptions thereof), (x) the two most recent annual
reports on Form 5500 filed with the Internal Revenue
Service with respect to each Benefit Plan (if any such
report was required), (y) the most recent summary plan
description for each Benefit Plan for which such
summary plan description is required and (z) each
currently effective trust agreement, insurance or group
annuity contract and each other funding or financing
arrangement relating to any Benefit Plan.
(ii) Each Benefit Plan has been administered in
material compliance with its terms, the applicable
provisions of ERISA, the Code and all other applicable
laws and the terms of all applicable collective
bargaining agreements. The Company has not received
notice of any investigations by any governmental agency,
termination proceedings or other claims (except routine
claims for benefits payable under the Benefit Plans),
suits or proceedings against any Benefit Plan or
asserting any rights or claims to benefits under any
Benefit Plan.
(iii) Each Pension Plan that is intended to be a
tax-qualified plan has been the subject of a
determination letter from the Internal Revenue Service
to the effect that such Pension Plan and related trust
is qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code;
no such determination letter has been revoked, and, to
28<PAGE>
20
the best knowledge of the Company, revocation has not
been threatened; and such Pension Plan has not been
amended since the effective date of its most recent
determination letter in any respect that would
adversely affect its qualification. The Company has
delivered (or will deliver as soon as practicable after
the date of this Agreement) to Parent a copy of the
most recent determination letter received with respect
to each Pension Plan for which such a letter has been
issued, as well as a copy of any pending application
for a determination letter. No event has occurred that
could subject any Pension Plan to tax under Section 511
of the Code.
(iv) (1) Neither the Company nor any of its
subsidiaries has engaged in a "prohibited transaction" (as
defined in Section 4975 of the Code or Section 406 of ERISA)
that involves the assets of any Benefit Plan that is
reasonably likely to subject the Company, any of its
subsidiaries, any employee of the Company or its
subsidiaries or, to the best knowledge of the Company, a
non-employee trustee, non-employee administrator or other
non-employee fiduciary of any trust created under any
Benefit Plan to the tax or penalty on prohibited trans-
actions imposed by Section 4975 of the Code; and (2) none of
the Company, any of its subsidiaries or, to the best
knowledge of the Company, any non-employee trustee, non-
employee administrator or other non-employee fiduciary of
any Benefit Plan has breached the fiduciary duty provisions
of ERISA or any other applicable law.
(v) No Commonly Controlled Entity has incurred
any liability to a Pension Plan (other than for
contributions not yet due to a Defined Benefit Plan and
other than for the payment of premiums to the Pension
Benefit Guaranty Corporation not yet due), which
liability, to the extent currently due, has not been
fully paid as of the date hereof or has not been
accrued on the Company's financial statements.
(vi) No Commonly Controlled Entity has announced
an intention to withdraw, but has not yet completed
withdrawal, from a Multiemployer Plan; and no action
has been taken by any Commonly Controlled Entity to
withdraw from a Multiemployer Plan. The Company
Disclosure Schedule also lists for each Benefit Plan
that is a Multiemployer Plan either the Company's best
estimate of the amount of withdrawal liability that
29<PAGE>
21
would be incurred if each Commonly Controlled Entity
were to make a complete withdrawal from such plan as of
the Closing Date and the amount of "unfunded vested
benefits" (within the meaning of Section 4211 of ERISA)
as of the end of the most recently completed plan year
and as of the date of this Agreement or a statement of
the number of employees of the Company and its Commonly
Controlled Entities who are currently eligible to
participate therein.
(vii) No Commonly Controlled Entity has withdrawn
from any Multiemployer Plan where such withdrawal has
resulted in any "withdrawal liability" (as defined in
Section 4201 of ERISA) for which any Commonly
Controlled Entity has any liability which has not been
fully paid.
(viii) Except as specifically provided in this
Agreement, no employee of the Company or any of its
subsidiaries will be entitled to any additional
benefits or any acceleration of the time of payment or
vesting of any benefits under any Benefit Plan or under
any employment, severance, termination or compensation
agreement or as a result of the transactions
contemplated by this Agreement.
(ix) Except as provided in this Agreement, no
compensation payable by the Company or any of its
subsidiaries to any of their employees under any
existing contract, Benefit Plan or other employment
arrangement or understanding would be subject to
disallowance under Section 162(m) of the Code.
(k) Taxes. (i) The Company, each subsidiary of
the Company, and each consolidated, combined or
affiliated group of which the Company or any subsidiary
of the Company is or has been a member, each has timely
filed or caused to be filed, with the appropriate
Taxing Authorities (as defined in Section 8.03), within
the time and in the manner prescribed by law, all
material consolidated and separate Tax Returns (as
defined in Section 8.03) required to be filed by or on
behalf of it and each such Tax Return was complete and
correct in all material respects at the time of filing.
(ii) All material Taxes (as defined in
Section 8.03) required to be shown on a consolidated or
separate Tax return of the Company and each subsidiary
30<PAGE>
22
of the Company (collectively, "Covered Taxes") have
been duly and timely paid.
(iii) No Liens for Taxes exist with respect to
any assets or properties of the Company or any
subsidiary of the Company, except for statutory Liens
for Taxes not yet due.
(iv) No material Tax Returns with respect to
Covered Taxes are under audit or examination by any
Taxing Authority, and no written or unwritten notice of
such an audit or examination has been received by the
Company or any affiliate (as defined in Section 8.03)
of the Company. Each material deficiency resulting
from any audit or examination relating to Covered Taxes
by any Taxing Authority has been paid, except for
deficiencies being contested in good faith. No
material issues were raised in writing by the relevant
Taxing Authority during any audit or examination
relating to Covered Taxes, and no issues relating to
Covered Taxes which could reasonably be expected to
have a material adverse effect on the Company during a
Post-Closing Tax Period (as defined in Section 8.03)
were raised in writing by any Taxing Authority during
any audit or examination relating to other Taxes of the
Company or any affiliate of the Company.
(v) The Company Disclosure Schedule lists
each state, county, local, municipal or foreign
jurisdiction in which the Company or any subsidiary of
the Company files, has ever filed, is required to file
or has been required to file a material Tax Return
(other than a Tax Return with respect to which the
applicable statute of limitations has expired).
(vi) There is no agreement or other document
extending, or having the effect of extending, the
period of assessment or collection of any material
amount of Covered Taxes and no power of attorney with
respect to any material amount of Covered Taxes has
been executed or filed with any Taxing Authority.
(vii) The Company Disclosure Schedule lists
each non-federal consolidated, combined, unitary or
affiliated group for purposes of filing Tax Returns or
paying Taxes of which the Company or any subsidiary of
the Company is or has been a member, the jurisdiction
in which such consolidated, combined, unitary or
31<PAGE>
23
affiliated group has filed or has been required to file
a Tax Return that includes the Company or any
subsidiary of the Company, or the income, assets or
activities of any subsidiary of the Company, and the
parent corporation and/or other person that is or was
responsible for filing such Tax Returns.
(viii) Each subsidiary of the Company has been
included as a member of the consolidated group, within
the meaning of Treas. Reg. Section 1.1502-1(h), of
which the Company is the common parent for purposes of
filing Federal tax returns for such consolidated group.
(ix) Neither the Company nor any subsidiary of
the Company shall be required to include in a Post-
Closing Tax Period a material amount of taxable income
attributable to income that accrued in a Pre-Closing
Tax Period but was not recognized in any Pre-Closing
Tax Period as a result of the installment method of
accounting, the completed contract method of
accounting, the long-term contract method of
accounting, the cash method of accounting or Section
481 of the Code or comparable provisions of state,
local or foreign Tax law.
(l) No Excess Parachute Payments. Except as
provided in this Agreement, any amount that could be
received (whether in cash or property or the vesting of
property) as a result of any of the transactions
contemplated by this Agreement by any employee,
officer, director or independent contractor of Company
or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed
Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other
compensation arrangement or Benefit Plan currently in
effect would not be characterized as an "excess
parachute payment" (as such term is defined in Section
280G(b)(1) of the Code).
(m) Voting Requirements. The affirmative vote of
the holders of a majority of the outstanding shares of
the Company Common Stock and, to the extent required
under applicable law, the Company Class B Common Stock
(voting as a separate class) at the Company
Stockholders Meeting (the "Company Stockholder
Approval") is the only vote of the holders of any class
or series of the Company's capital stock necessary to
32<PAGE>
24
approve and adopt this Agreement and the transactions
contemplated by this Agreement.
(n) State Takeover Statutes. The Board of
Directors of the Company has approved the terms of this
Agreement and the Company Stockholder Agreement and the
consummation of the Merger and the other transactions
contemplated by this Agreement and the Company
Stockholder Agreement, and such approval is sufficient
to render inapplicable to the Merger and the other
transactions contemplated by this Agreement and the
Company Stockholder Agreement the provisions of
Section 203 of the DGCL. To the best of the Company's
knowledge, no other state takeover statute or similar
statute or regulation applies or purports to apply to
the Merger, this Agreement, the Company Stockholder
Agreement or any of the transactions contemplated by
this Agreement or the Company Stockholder Agreement and
no provision of the certificate of incorporation,
by-laws or other governing instruments of the Company
or any of its subsidiaries would, directly or
indirectly, restrict or impair the ability of Parent or
any of its subsidiaries to vote, or otherwise to
exercise the rights of a stockholder with respect to,
shares of the Company and its subsidiaries that may be
acquired or controlled directly or indirectly by
Parent.
(o) Labor Matters. Neither the Company nor any
of its subsidiaries is the subject of any suit, action
or proceeding which is pending or, to the best
knowledge of the Company, threatened, asserting that
the Company or any of its subsidiaries has committed an
unfair labor practice (within the meaning of the
National Labor Relations Act or applicable state
statutes) or seeking to compel the Company or any of
its subsidiaries to bargain with any labor organization
as to wages and conditions of employment, in any such
case, that is reasonably expected to result in a
material liability of the Company and its subsidiaries.
No strike or other labor dispute involving the Company
or any of its subsidiaries is pending or, to the best
knowledge of the Company, threatened, except for any
such actual or threatened strike or other labor dispute
arising after the date of this Agreement which,
individually or in the aggregate, would not have a
material adverse effect on the Company. To the best
knowledge of the Company, there is no activity
33<PAGE>
25
involving any employees of the Company or any of its
subsidiaries seeking to certify a collective bargaining
unit or engaging in any other organizational activity,
except for any such activity which would not have a
material adverse effect on the Company.
(p) Brokers. No broker, investment banker,
financial advisor or other person, other than Morgan
Stanley & Co. Incorporated, the fees and expenses of
which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other
similar fee or commission in connection with the
transactions contemplated by this Agreement or the
Stockholder Agreements based upon arrangements made by
or on behalf of the Company or any of its subsidiaries.
The Company has furnished to Parent true and complete
copies of all agreements under which any such fees or
expenses may be payable and all indemnification and
other agreements related to the engagement of the
persons to whom such fees may be payable.
(q) Opinion of Financial Advisor. The Company
has received the opinion of Morgan Stanley & Co.
Incorporated, dated the date of this Agreement, to the
effect that, as of such date, the Merger Consideration
is fair to the Company's stockholders from a financial
point of view, a photocopy of which signed opinion has
been delivered to Parent.
(r) Compliance with Applicable Laws. (i) Each of
the Company and each of its subsidiaries has in effect
all Federal, state and local governmental approvals,
authorizations, certificates, filings, franchises,
licenses, notices, permits and rights ("Permits")
necessary for it to own, lease or operate its
properties and assets and to carry on its business as
now conducted, and there has occurred no default under
any such Permit, except for the lack of Permits and for
defaults under Permits which lack or default could not,
individually or in the aggregate, reasonably be
expected to result in a material adverse effect on the
Company. Except as disclosed in the Filed SEC
Documents, each of the Company and each of its
subsidiaries are in compliance with all applicable
statutes, laws, ordinances, rules, regulations,
judgments, decrees and orders of any Governmental
Entity, except for possible noncompliance that could
not, individually or in the aggregate, reasonably be
34<PAGE>
26
expected to result in a material adverse effect on the
Company.
(ii) Each of the Company and each of its
subsidiaries is in compliance with all applicable
Gaming Laws, except for possible noncompliance that
could not, individually or in the aggregate, reasonably
be expected to result in a material adverse effect on
the Company. The term "Gaming Laws" means, with
respect to any person, any Federal, state or local
statute, law, ordinance, rule, regulation, permit,
consent, approval, license, judgment, order, decree,
injunction or other authorization governing or relating
to the current or contemplated casino and gaming
activities and operations of such person and its
subsidiaries, including the New Jersey Casino Control
Act and the rules and regulations promulgated
thereunder.
(iii) Neither the Company nor any subsidiary of
the Company nor any director or officer of the Company
or any subsidiary of the Company has received any
written claim, demand, notice, complaint, court order
or administrative order from any Governmental Entity
since May 3, 1994 (the "Consummation Date"), asserting
that a license of it or them, as applicable, under any
Gaming Laws should be revoked or suspended.
(iv) Each of the Company and its subsidiaries is,
and has been, and each of the Company's former
subsidiaries, while a subsidiary of the Company, was in
compliance with all applicable Environmental Laws,
except for possible noncompliance that could not,
individually or in the aggregate, reasonably be
expected to have a material adverse effect on the
Company. The term "Environmental Laws" means any
Federal, state, local or foreign statute, ordinance,
rule, regulation, permit, consent, approval, license,
judgment, order, decree, injunction or authorization
relating to: (A) Releases (as defined in 42 U.S.C. Section
9601(22)) or threatened Releases of Hazardous Materials
(as hereinafter defined) into the natural environment
or workplace, (B) the generation, treatment, storage,
disposal, use, handling, management, manufacturing,
transportation or shipment of, or exposure to, a
Hazardous Material or (C) the preservation of, or the
encroachment on, the natural environment (including the
Federal Water Pollution Control Act, the New Jersey
35<PAGE>
27
Freshwater Wetlands Act and the New Jersey Coastal Area
Facilities Review Act).
(v) Neither the Company nor any subsidiary of the
Company has received any claim, demand, notice,
complaint, court order, administrative order or request
for information from any Governmental Entity or private
party in the past five years, alleging violation of, or
asserting any noncompliance with or liability under or
potential liability under, any Environmental Laws which
violation, noncompliance or liability could,
individually or in the aggregate, reasonably be
expected to result in a material adverse effect on the
Company.
(vi) During the period of ownership or operation
by the Company and its subsidiaries of any of their
current or previously owned or leased properties, there
have been no Releases of Hazardous Materials in, on,
under or affecting such properties and none of the
Company or its subsidiaries have disposed of any
Hazardous Materials or any other substance in a manner
that has led, or could reasonably be anticipated to
lead to a Release except in each case for those
Releases which individually or in the aggregate are not
reasonably likely to have a material adverse effect on
the Company. Prior to the period of ownership or
operation by the Company and its subsidiaries of any of
their respective current or previously owned or leased
properties, to the best knowledge of the Company, no
Hazardous Materials were generated, treated, stored,
disposed of, used, handled, managed or manufactured at
or transported, shipped or disposed of from, such
current or previously owned or leased properties, and
there were no Releases of Hazardous Materials in, on,
under or affecting any such property or any surrounding
site, except in each case for those actions or
omissions which individually or in the aggregate would
not be reasonably likely to have a material adverse
effect on the Company. The term "Hazardous Material"
means (1) hazardous or toxic substances or wastes as
defined under any Environmental Law, (2) petroleum,
including crude oil and any fractions thereof, (3)
natural gas, synthetic gas and any mixtures thereof,
(4) asbestos and/or asbestos-containing material or (5)
polychlorinated biphenyls (PCBs) or materials
containing PCBs and any material regulated as a medical
waste or infectious waste.
36<PAGE>
28
(vii) To the Company's knowledge, there are no
underground storage tanks or asbestos-containing
materials located in, at or under any of the facilities
or real property owned, leased or operated by the
Company or any subsidiary of the Company, the presence
of which could, individually or in the aggregate,
reasonably be expected to result in a material adverse
effect on the Company.
(viii) The Company Disclosure Schedule identifies
the most current environmental audits, assessments or
studies completed within the last five years that are
in the possession of the Company or any subsidiary of
the Company with respect to the material facilities or
real property owned, leased or operated by the Company
or any subsidiary of the Company. The Company has
furnished to Parent complete and correct copies of all
such audits, assessments and studies.
(s) Contracts; Debt Instruments. (i) Except for
this Agreement and as disclosed in the Filed SEC
Documents, there are no contracts or agreements that
are material to the business, properties, assets,
condition (financial or otherwise), results of
operations or prospects of the Company and its
subsidiaries taken as a whole. Neither the Company nor
any of its subsidiaries is in violation of or in
default under (nor does there exist any condition which
upon the passage of time or the giving of notice would
cause such a violation of or default under) any loan or
credit agreement, note, bond, mortgage, indenture,
lease, permit, concession, franchise, license or any
other contract, agreement, arrangement or understanding
to which it is a party or by which it or any of its
properties or assets is bound, except for violations or
defaults that could not, individually or in the
aggregate, reasonably be expected to result in a
material adverse effect on the Company.
(ii) Set forth on the Company Disclosure Schedule
is (x) a list of all loan or credit agreements, notes,
bonds, mortgages, indentures and other agreements and
instruments pursuant to which any indebtedness of the
Company or any of its subsidiaries in an aggregate
principal amount in excess of $1,000,000 is outstanding
or may be incurred and (y) the respective principal
amounts currently outstanding thereunder. For purposes
of this Agreement, "indebtedness" shall mean, with
37<PAGE>
29
respect to any person, without duplication, (A) all
obligations of such person for borrowed money, or with
respect to deposits or advances of any kind to such
person, or upon which interest charges are customarily
paid, (B) all obligations of such person evidenced by
bonds, debentures, notes or similar instruments,
(C) all obligations of such person under conditional
sale or other title retention agreements relating to
property purchased by such person, (D) all obligations
of such person issued or assumed as the deferred
purchase price of property or services (excluding
obligations of such person to creditors for materials,
inventory, services and supplies incurred in the
ordinary course of such person's business), (E) all
capitalized lease obligations of such person, (F) all
obligations of others secured by any Lien on property
or assets owned or acquired by such person, whether or
not the obligations secured thereby have been assumed,
(G) all obligations of such person under interest rate
or currency hedging transactions (valued at the
termination value thereof), (H) all letters of credit
issued for the account of such person and (I) all
guarantees and arrangements having the economic effect
of a guarantee of such person of any indebtedness of
any other person.
(t) Intellectual Property. The Company and its
subsidiaries own, or are validly licensed or otherwise
have the right to use, all patents, patent rights,
trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights
and other proprietary intellectual property rights and
computer programs (collectively, "Intellectual Property
Rights") which are material to the conduct of the
business of the Company or any of its subsidiaries.
The Company Disclosure Schedule sets forth a
description of all Intellectual Property Rights which
are material to the conduct of the business of the
Company or any of its subsidiaries. Except as set
forth in the Company Disclosure Schedule, no claims are
pending or, to the knowledge of the Company, threatened
that the Company or any of its subsidiaries is
infringing or otherwise adversely affecting the rights
of any person with regard to any Intellectual Property
Right. To the knowledge of the Company, except as set
forth in the Company Disclosure Schedule, no person is
infringing the rights of the Company or any of its
38<PAGE>
30
subsidiaries with respect to any Intellectual Property
Right.
(u) Title to Properties; Assets Other than Real
Property Interests. (i) The Company Disclosure
Schedule sets forth a complete list of all real
property and interests in real property owned or leased
by the Company or any of its subsidiaries and indicates
whether such property is owned or leased (each such
owned property, an "Owned Property" and each such
leased property, a "Leased Property", and collectively,
the "Real Property"). Except as set forth in the
Company Disclosure Schedule, the Company or one of its
subsidiaries has good and marketable title to each
Owned Property, or a valid leasehold interest in each
Leased Property, in each case free and clear of all
liens (as defined in Section 8.03), except for
easements, covenants, or restrictions of record that,
individually or in the aggregate, do not and will not
materially interfere with its ability to conduct its
business at such Real Property as currently conducted.
Except as set forth in the Company Disclosure Schedule,
each of the lessors (under each such lease) and the
Company or its subsidiary, as the case may be has
complied in all respects with the terms of all leases
relating to the Leased Property, except for any such
noncompliance that, individually or in the aggregate,
does not and will not materially interfere with its
ability to conduct its business at such Leased Property
as currently conducted, and there are no defaults
thereunder, or conditions that if left unchanged could
result in a default thereunder, and all such leases are
in full force and effect. The Company enjoys peaceful
and undisturbed possession under all such leases.
(ii) Each of the Company and each of its
subsidiaries has good and valid title to all its
properties and assets, in each case free and clear of
all Liens, except (A) mechanics', carriers', workmen's,
repairmen's or other similar Liens arising or incurred
in the ordinary course of business, (B) Liens arising
under conditional sales contracts and equipment leases
with third parties entered into in the ordinary course
of business, (C) Liens for taxes which are not due and
payable or which may thereafter be paid without
penalty, (D) Liens which secure debt that is reflected
as a liability on the balance sheet of the Company and
its consolidated subsidiaries as of June 30, 1996,
39<PAGE>
31
contained in the Filed SEC Documents and the existence
of which is indicated in the notes thereto and
(E) other imperfections of title or encumbrances, if
any, which do not, individually or in the aggregate,
materially impair the continued use and operation of
the assets to which they relate in the business of the
Company and its subsidiaries. This paragraph (ii) does
not relate to Real Property or interests in Real
Property, such items being the subject of paragraph (i)
above.
(v) Insurance. Since the Consummation Date, the
Company and its subsidiaries have obtained and
maintained in full force and effect insurance with
responsible and reputable insurance companies or
associations in such amounts, on such terms and
covering such risks, including fire and other risks
insured against by extended coverage, as is reasonably
prudent, and since the Consummation Date each has
maintained in full force and effect public liability
insurance, insurance against claims for personal injury
or death or property damage occurring in connection
with any of the activities of the Company or its
subsidiaries or any of any properties owned, occupied
or controlled by the Company or its subsidiaries, in
such amount as reasonably deemed necessary by the
Company or its subsidiaries.
(w) Additional Real Estate Representations.
(i) The occupancies and uses of the Real Property
identified as "Material Real Property" in
Section 3.01(w) of the Company Disclosure Schedule (the
"Material Real Property"), as well as the development,
construction, management, maintenance, servicing and
operation of such Real Property, comply in all material
respects with all applicable laws, ordinances, rules,
regulations, orders and requirements of all
Governmental Entities having jurisdiction and are not
in violation of any thereof in any manner reasonably
likely, individually or in the aggregate, to have a
material adverse effect on the use, value or operation
of the Real Property to which it relates; and the
certificate(s) of occupancy, if required by applicable
law, and all other licenses and permits required by law
for the proper use and operation of such Real Property
are in full force and effect. All approvals, consents,
permits, utility installations and connections, curb
cuts and street openings required for the development,
40<PAGE>
32
construction, maintenance, operation and servicing of
the Material Real Property as currently used by the
Company have been granted, effected, or performed and
completed (as the case may be), and all fees and
charges therefor have been fully paid. Neither the
Company nor any subsidiary of the Company has received
written notice of any violations, suits, orders,
decrees or judgments relating to the violation of any
applicable law, ordinance, rule or regulation relating
to zoning, building use and occupancy, traffic, fire,
health, sanitation, air pollution, ecological,
environmental or other laws or regulations, against, or
with respect to, the Material Real Property.
(ii) There is access between each Owned Property
or Leased Property and public roads adequate to serve
the Company's current use of each such Real Property
and there are no pending or, to the Company's
knowledge, threatened proceedings that could have the
effect of impairing or restricting such access in any
material respect. There are sufficient parking spaces
on Material Real Property as currently used to comply
with all applicable provisions of any agreements to
which such Real Property is subject, local zoning
requirements and all other applicable laws and
governmental requirements. The material improvements
upon the Material Real Property contain no asbestos and
the roof, foundation, sprinkler mains, structural,
mechanical and HVAC systems and masonry walls in any of
the material improvements upon the Material Real
Property are in good working condition and order and no
significant repairs thereof are required, and all
periodic maintenance has been done and is being done
which is consistent with commercially reasonable
maintenance standards for real property of similar size
and age in the vicinity of such Real Property.
(iii) This Section 3.01(w) does not relate to
Environmental Laws, such items being the subject of
Section 3.01(r) above.
SECTION 3.02. Representations and Warranties of
Parent and Sub. Except as set forth with respect to a
specifically identified representation and warranty on
the Disclosure Schedule delivered by Parent to the
Company prior to the execution of this Agreement (the
41<PAGE>
33
"Parent Disclosure Schedule"), Parent and Sub represent
and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power.
Each of Parent and Sub is a corporation duly organized,
validly existing and in good standing under the laws of
the jurisdiction in which it was organized and has the
requisite corporate power and authority to carry on its
business as now being conducted. Each of Parent and
Sub is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of
its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the
failure to be so qualified or licensed or to be in good
standing individually or in the aggregate would not
have a material adverse effect on Parent. Parent has
delivered to the Company complete and correct copies of
its Articles of Association and By-laws and the
Certificate of Incorporation and By-laws of Sub, in
each case as amended to the date hereof.
(b) Capital Structure. As of the date of this
Agreement, the authorized capital stock of Parent
consists of 250,000,000 Ordinary Shares and 100,000,000
preference shares, par value $.001 per share
("Preference Shares"). At the close of business on
August 15, 1996, (i) 29,051,842 Ordinary Shares were
issued and outstanding, (ii) no Preference Shares were
issued and outstanding, (iii) no Ordinary Shares were
held by Parent in its treasury and (iv) 2,000,000
Ordinary Shares were reserved for issuance pursuant to
Parent's Stock Option Plan (the "Parent Stock Plan").
Except as set forth above, at the close of business on
August 15, 1996, no shares of capital stock or other
voting securities of Parent were issued, reserved for
issuance or outstanding. All outstanding shares of
capital stock of Parent are, and all shares which may
be issued pursuant to this Agreement will be, when
issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. As
of the date of this Agreement, there are no bonds,
debentures, notes or other indebtedness of Parent
having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote)
on any matters on which shareholders of Parent may
vote. Except as set forth above or as otherwise
contemplated by this Agreement, as of the date of this
42<PAGE>
34
Agreement, there are no outstanding securities,
options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to
which Parent is a party or by which it is bound
obligating Parent to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of
capital stock or other voting securities of Parent or
obligating Parent to issue, grant, extend or enter into
any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. As
of the date of this Agreement, there are no outstanding
contractual obligations of Parent to repurchase, redeem
or otherwise acquire any shares of capital stock of
Parent. As of the date of this Agreement, the
authorized capital stock of Sub consists of
1,000 shares of common stock, par value $.01 per share,
100 of which have been validly issued, are fully paid
and nonassessable and are owned by Parent free and
clear of any Lien.
(c) Authority; Noncontravention. Parent and Sub
have all requisite corporate power and authority to
enter into this Agreement and, subject to the Parent
Shareholder Approval (as defined in Section 3.02(g)),
to consummate the transactions contemplated by this
Agreement. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated by this Agreement by Parent and Sub, as
the case may be, have been duly authorized by all
necessary corporate action on the part of Parent and
Sub, subject, in the case of Parent, to the Parent
Shareholder Approval. This Agreement has been duly
executed and delivered by Parent and Sub and
constitutes a valid and binding obligation of each such
party, enforceable against such party in accordance
with its terms. The execution and delivery of this
Agreement does not, and the consummation of the
transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will
not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to
loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or
assets of Parent, Sub or any of Parent's other
subsidiaries under, (i) the Articles of Association or
By-laws of Parent or the comparable charter or
43<PAGE>
35
organizational documents of Sub or any such other
subsidiary, (ii) subject to the governmental filings
and other matters referred to in the following
sentence, any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license
applicable to Parent, Sub or such other subsidiary or
any of their respective properties or assets or
(iii) subject to the governmental filings and other
matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Parent, Sub or such other
subsidiary or any of their respective properties or
assets, other than, in the case of clauses (ii) and
(iii), any such conflicts, violations, defaults, rights
or Liens that individually or in the aggregate would
not (x) have a material adverse effect on Parent,
(y) impair the ability of Parent and Sub to perform
their respective obligations under this Agreement in
any material respect or (z) delay in any material
respect or prevent the consummation of any of the
transactions contemplated by this Agreement or the
Parent Stockholder Agreement. No consent, approval,
order or authorization of, or registration, declaration
or filing with, any Governmental Entity is required by
Parent or Sub in connection with the execution and
delivery of this Agreement or the consummation by
Parent or Sub, as the case may be, of any of the
transactions contemplated by this Agreement, except for
(1) the filing of a premerger notification and report
form by Parent under the HSR Act; (2) the filing with
the SEC of the Form F-4 and the filing or furnishing
with or to the SEC of such reports under Section 13 of
the Exchange Act as may be required in connection with
this Agreement, the Stockholder Agreements and the
transactions contemplated by this Agreement and the
Stockholder Agreements; (3) the approval by the New
Jersey Casino Control Commission under the New Jersey
Casino Control Act and the rules and regulations
promulgated thereunder; (4) the filing of the
Certificate of Merger with the Delaware Secretary of
State and appropriate documents with the relevant
authorities of other states in which the Company is
qualified to do business; (5) such filings with
Governmental Entities as may be required to satisfy the
applicable requirements of state securities or "blue
sky" laws in connection with the transactions
contemplated by this Agreement; (6) such filings with
44<PAGE>
36
and approvals of the NYSE and the ASE to permit the
Ordinary Shares that are to be issued in the Merger and
under the Stock Plans to be listed on the NYSE and the
Units to continue to be listed on the ASE; (7) Form
BE-13 and related forms to be filed with the U.S.
Department of Commerce; and (8) such filings and
approvals as may be required solely by reason of the
Company's (as opposed to any third party's)
participation in the transactions contemplated by this
Agreement.
(d) SEC Documents. Parent has filed all reports,
schedules, forms, statements and other documents
required to be filed with the SEC since January 1, 1995
(including any Reports on Form 6-K, the "Parent SEC
Documents"). As of their respective dates, the Parent
SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to such
Parent SEC Documents, and none of the Parent SEC
Documents when filed contained any untrue statement of
a material fact or omitted to state a material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not
misleading. Except to the extent that information
contained in any Parent SEC Document has been revised
or superseded by a later-filed Parent SEC Document,
none of the Parent SEC Documents contains any untrue
statement of a material fact or omits 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 were made,
not misleading. The financial statements of Parent
included in the Parent SEC Documents comply as to form
in all material respects with applicable accounting
requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting
principles (except, in the case of unaudited
statements, as permitted by the rules and regulations
of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated
financial position of Parent and its consolidated
subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows
45<PAGE>
37
for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed Parent
SEC Documents (as defined in Section 3.02(f)), and
except for liabilities and obligations incurred since
March 31, 1996, in the ordinary course of business
consistent with past practice, neither Parent nor any
of its subsidiaries has any liabilities or obligations
of any nature (whether accrued, absolute, contingent or
otherwise) required by generally accepted accounting
principles to be recognized or disclosed on a
consolidated balance sheet of Parent and its
consolidated subsidiaries or in the notes thereto and
which, individually or in the aggregate, could
reasonably be expected to have a material adverse
effect on Parent.
(e) Information Supplied. None of the
information supplied or to be supplied by Parent or Sub
specifically for inclusion or incorporation by
reference in (i) the Form F-4 will, at the time the
Form F-4 is filed with the SEC, at any time it is
amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any
material fact required to be stated therein or
necessary to make the statements therein not
misleading, or (ii) the Proxy Statement will, at the
date the Proxy Statement is first mailed to Company
stockholders or at the time of the Company Stockholders
Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they are made, not misleading. The Form F-4 will
comply as to form in all material respects with the
requirements of the Securities Act and the rules and
regulations promulgated thereunder, except that no
representation or warranty is made by Parent or Sub
with respect to statements made or incorporated by
reference in the Form F-4 based on information supplied
by the Company specifically for inclusion or
incorporation by reference therein.
(f) Absence of Certain Changes or Events. Except
as disclosed in the Parent SEC Documents filed (or
furnished to the SEC) and publicly available prior to
the date of this Agreement (the "Filed Parent SEC
46<PAGE>
38
Documents"), since the date of the most recent audited
financial statements included in the Filed Parent SEC
Documents, Parent has conducted its business only in
the ordinary course, and there has not been (i) any
material adverse change in Parent, (ii) any split,
combination or reclassification of any of its capital
stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock
or (iii) any damage, destruction or loss, whether or
not covered by insurance, that has or is likely to have
a material adverse effect on Parent.
(g) Voting Requirements. The affirmative vote at
the Parent Shareholders Meeting (as defined in
Section 5.01(c)) of the holders of a majority of the
voting power of the outstanding Ordinary Shares
entitled to vote generally in an annual election of
directors (the "Parent Shareholder Approval") is the
only vote of the holders of any class or series of
Parent's capital stock necessary to approve and adopt
the amendments to Parent's Articles of Association that
are necessary to comply with the New Jersey Casino
Control Act and no other vote of holders of any class
or series of Parent's capital stock is necessary to
approve the transactions contemplated by this
Agreement.
(h) Brokers. No broker, investment banker,
financial advisor or other person, other than Bear,
Stearns & Co. Inc., the fees and expenses of which will
be paid by Parent, is entitled to any broker's,
finders, financial advisor's or other similar fee or
commission in connection with the transactions
contemplated by this Agreement or the Stockholder
Agreements based upon arrangements made by or on behalf
of Parent or Sub.
(i) Interim Operations of Sub. Sub was formed
solely for the purpose of engaging in the transactions
contemplated hereby and has engaged in no other
business other than incident to its creation and this
Agreement and the transactions contemplated hereby.
(j) Permits. To the actual knowledge of Parent,
there is no fact or circumstance which would reasonably
be expected to prevent or materially delay the
obtaining of any consent or approval by Parent which is
47<PAGE>
39
required to be obtained by Parent in connection with
this Agreement. The Parent Disclosure Schedule
identifies the filings made by Parent with the New
Jersey Casino Control Commission as of the date hereof
in connection with its licensing efforts in New Jersey.
(k) Litigation. Except as disclosed in the Filed
Parent SEC Documents, there is no suit, action or
proceeding pending or, to the knowledge of Parent,
threatened against or affecting Parent or any of its
subsidiaries that individually or in the aggregate
could reasonably be expected to (i) have a material
adverse effect on Parent, (ii) impair the ability of
Parent to perform its obligations under this Agreement
in any material respect or (iii) delay in any material
respect or prevent the consummation of any of the
transactions contemplated by this Agreement or the
Parent Stockholder Agreement, nor is there any
judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against
Parent or any of its subsidiaries having, or which,
insofar as reasonably can be foreseen, in the future
would have, any effect referred to in clause (i), (ii)
or (iii) above.
(l) Compliance with Applicable Laws. (i) Each of
Parent and each of its subsidiaries has in effect all
Permits necessary for it to own, lease or operate its
properties and assets and to carry on its business as
now conducted, and there has occurred no default under
any such Permit, except for the lack of Permits and for
defaults under Permits which lack or default could not,
individually or in the aggregate, reasonably be
expected to result in a material adverse effect on
Parent. Except as disclosed in the Filed Parent SEC
Documents, each of Parent and each of its subsidiaries
are in compliance with all applicable statutes, laws,
ordinances, rules, regulations, judgments, decrees and
orders of any Governmental Entity, except for possible
noncompliance that could not, individually or in the
aggregate, reasonably be expected to result in a
material adverse effect on Parent.
(ii) Each of Parent and each of its subsidiaries
is in compliance with all applicable Gaming Laws,
except for possible noncompliance that could not,
individually or in the aggregate, reasonably be
48<PAGE>
40
expected to result in a material adverse effect on
Parent.
(iii) Neither Parent nor any subsidiary of Parent
nor any director or officer of Parent or any subsidiary
of Parent has received any written claim, demand,
notice, complaint, court order or administrative order
from any Governmental Entity since the Consummation
Date, asserting that a license of it or them, as
applicable, under any Gaming Laws should be revoked or
suspended.
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business. (a) Conduct
of Business by the Company. During the period from the date
of this Agreement to the Effective Time, the Company shall,
and shall cause its subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore
conducted and in compliance in all material respects with
all applicable laws and regulations and, to the extent
consistent therewith, use all reasonable efforts to preserve
intact their current business organizations, keep available
the services of their current officers and employees and
preserve their relationships with customers, suppliers,
licensors, licensees and others having business dealings
with them to the end that their goodwill and ongoing
businesses shall not be impaired at the Effective Time.
Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Effective Time
without the prior consent of Parent, the Company shall not,
and shall not permit any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends
on, or make any other distributions in respect of, any
of its capital stock, other than dividends and
distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent, (y) split,
combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of
its capital stock or (z) purchase, redeem or otherwise
acquire any shares of capital stock of the Company or
any of its subsidiaries or any other securities thereof
49<PAGE>
41
or any rights, warrants or options to acquire any such
shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other
voting securities or any securities convertible into,
or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities,
including, subject to Section 5.16, any of the Units
that are owned by the Company or by any subsidiary of
the Company (other than the issuance of Company Common
Stock upon the exercise of Employee Stock Options
outstanding on the date of this Agreement and in
accordance with their present terms);
(iii) amend its certificate of incorporation,
by-laws or other comparable charter or organizational
documents;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any
business or any corporation, limited liability company,
partnership, joint venture, association or other
business organization or division thereof, or (y) any
assets that individually or in the aggregate are
material to the Company and its subsidiaries taken as a
whole;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of
any of its properties or assets, except in the ordinary
course of business consistent with past practice;
(vi) (x) issue any additional Junior Mortgage
Notes, (y) except as set forth in Section 4.01(a) of
the Company Disclosure Schedule, incur any indebtedness
or (z) make any loans, advances or capital
contributions to, or investments in, any other person,
other than to the Company or any direct or indirect
wholly owned subsidiary of the Company;
(vii) make or agree to make any capital expenditure
except for (A) capital expenditures in respect of
projects other than the Chalfonte Project (as defined
in Section 4.01(a) of the Company Disclosure Schedule)
as set forth in the Company's capital expenditure
budget for 1996 delivered to Parent prior to the date
50<PAGE>
42
of this Agreement, and in the case of capital
expenditures for 1997, in accordance with the Company's
capital expenditure budget for 1997, which shall be
prepared on a reasonable basis consistent with such
1996 budget, and (B) capital expenditures in respect of
the Chalfonte Project (other than the Chalfonte Garage
(as defined in Section 5.18) and other than capital
expenditures for work completed on the Chalfonte
Project prior to the date of this Agreement but not yet
paid for by the Company as set forth in Section 4.01(a)
of the Company Disclosure Schedule) during the times
and in the amounts set forth below:
(w) from September 1, to September 30, 1996, up to
$900,000.00; (x) from October 1, to October 31,
1996, up to $800,000.00; (y) from November 1, to
November 30, 1996, up to $700,000.00; from
December 1, to December 31, 1996, up to
$600,000.00; and during each calendar month in
1997, up to $600,000.00;
(viii) make any material Tax election or settle or
compromise any material Tax liability;
(ix) except in the ordinary course of business or
except as would not reasonably be expected to have a
material adverse effect on the Company, modify, amend
or terminate any material contract or agreement to
which the Company or any subsidiary is a party or
waive, release or assign any material rights or claims
thereunder;
(x) pay, discharge or satisfy any claims, liabili-
ties or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in
accordance with their terms, of liabilities reflected
or reserved against in, or contemplated by, the most
recent consolidated financial statements (or the notes
thereto) of the Company included in the Filed SEC
Documents or incurred after the date of such financial
statements in the ordinary course of business
consistent with past practice, or waive the benefits
of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to
which the Company or any of its subsidiaries is a
party;
51<PAGE>
43
(xi) make any material change to its accounting
methods, principles or practices, except as may be
required by generally accepted accounting principles;
or
(xii) except as required to comply with applicable
law and as disclosed in Section 4.01(a) of the Company
Disclosure Schedule, (v) adopt, enter into, terminate
or amend any Benefit Plan or other arrangement for the
benefit or welfare of any director, officer or current
or former employee, (w) increase in any manner the
compensation or fringe benefits of, or pay any bonus
to, any director, officer or employee (except for
normal increases or bonuses in the ordinary course of
business consistent with past practice), (x) pay any
benefit not provided for under any Benefit Plan, (y)
except as permitted in clause (w), grant any awards
under any bonus, incentive, performance or other
compensation plan or arrangement or Benefit Plan
(including the grant of stock options, stock
appreciation rights, stock based or stock related
awards, performance units or restricted stock, or the
removal of existing restrictions in any Benefit Plans
or agreement or awards made thereunder) or (z) take any
action to fund or in any other way secure the payment
of compensation or benefits under any employee plan,
agreement, contract or arrangement or Benefit Plan); or
(xiii) authorize, or commit or agree to take, any
of the foregoing actions.
(b) Conduct of Business by Parent. During the period
from the date of this Agreement to the Effective Time,
Parent shall not, and shall not permit any of its
subsidiaries to:
(i) (x) declare, set aside or pay any dividends
on, or make any other distributions in respect of, the
Ordinary Shares or (y) split, combine or reclassify the
Ordinary Shares or issue or authorize the issuance of
any other securities in respect of, in lieu of or in
substitution for the Ordinary Shares; or
(ii) authorize, or commit or agree to take, any of
the foregoing actions.
(c) Other Actions. The Company and Parent shall not,
and shall not permit any of their respective subsidiaries
52<PAGE>
44
to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and
warranties of such party set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of
such representations and warranties that are not so
qualified becoming untrue in any material respect or
(iii) any of the conditions set forth in Article VI not
being satisfied, except actions expressly permitted by
Section 4.02 that could have the effect specified in
clause (iii) of this sentence.
(d) Advice of Changes. The Company and Parent shall
promptly advise the other party orally and in writing of
(i) any representation or warranty made by it contained in
this Agreement that is qualified as to materiality becoming
untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming
untrue or inaccurate in any material respect, (ii) the
failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement or (iii) any
change or event having, or which, insofar as can reasonably
be foreseen, would have, a material adverse effect on such
party and its subsidiaries taken as a whole or on the truth
of their respective representations and warranties or the
ability of the conditions set forth in Article VI to be
satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
SECTION 4.02. No Solicitation. (a) The Company
shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any officer, director or
employee of or any investment banker, attorney or other
advisor or representative of, the Company or any of its
subsidiaries to, (i) solicit, initiate or encourage the
submission of any takeover proposal (as defined in Section
8.03) or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with
respect to, or take any other action to facilitate the
making of any proposal that constitutes, or may reasonably
be expected to lead to, any takeover proposal; provided,
however, that if, at any time prior to the receipt of the
Company Stockholder Approval, in the opinion of the Board of
Directors of the Company after consultation with outside
counsel, such failure to so act would be inconsistent with
its fiduciary duties to the Company's stockholders under
53<PAGE>
45
applicable law, the Company may, in response to an
unsolicited takeover proposal, and subject to compliance
with Section 4.02(c), (x) furnish information with respect
to the Company pursuant to a customary confidentiality
agreement to any person making such proposal and
(y) participate in negotiations regarding such proposal.
Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding
sentence by any officer, director or employee of the Company
or any of its subsidiaries, whether or not such person is
purporting to act on behalf of the Company or any of its
subsidiaries or otherwise, shall be deemed to be a breach of
this Section 4.02(a) by the Company.
(b) Except as set forth in this Section 4.02(b),
neither the Board of Directors of the Company nor any
committee thereof shall (x) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent or Sub,
the approval or recommendation by such Board of Directors or
any such committee of this Agreement or the Merger,
(y) approve or recommend or propose to approve or recommend,
any takeover proposal or (z) enter into any agreement with
respect to any takeover proposal. Notwithstanding the
foregoing, if in the opinion of the Board of Directors of
the Company, after consultation with outside counsel,
failure to do so would be inconsistent with its fiduciary
duties to the Company's stockholders under applicable law,
the Board of Directors of the Company may (subject to the
terms of this and the following sentences) withdraw or
modify its approval or recommendation of this Agreement or
the Merger, approve or recommend a competitive proposal (as
defined in Section 8.03), or enter into an agreement with
respect to a competitive proposal, in each case at any time
after the second business day following Parent's receipt of
written notice (a "Notice of Competitive Proposal") advising
Parent that the Board of Directors of the Company has
received a competitive proposal, specifying the material
terms and conditions of such competitive proposal and
identifying the person making such competitive proposal;
provided that the Company shall not enter into an agreement
with respect to a competitive proposal unless the Company
shall have furnished Parent with written notice no later
than 12:00 noon two business days in advance of any date
that it intends to enter into such agreement. In addition,
if the Company proposes to enter into an agreement with
respect to any takeover proposal, it shall concurrently with
entering into such agreement pay, or cause to be paid, to
54<PAGE>
46
Parent the Expenses and the Termination Fee (each as defined
in Section 5.09(b)).
(c) In addition to the obligations of the Company
set forth in paragraphs (a) and (b) of this Section 4.02,
the Company promptly shall advise Parent of any request for
information or of any takeover proposal, the identity of the
person making any such request or takeover proposal and all
the material terms and conditions thereof. The Company will
keep Parent fully informed of the status and details
(including amendments or proposed amendments) of any such
request or takeover proposal.
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form F-4 and the
Proxy Statement; Stockholders Meetings. (a) As soon as
practicable following the date of this Agreement, the
Company and Parent shall prepare and the Company shall file
with the SEC the Proxy Statement and Parent shall prepare
and file with the SEC the Form F-4, in which the Proxy
Statement will be included as a prospectus. Each of the
Company and Parent shall use all reasonable efforts to have
the Form F-4 declared effective under the Securities Act as
promptly as practicable after such filing. The Company will
use all reasonable efforts to cause the Proxy Statement to
be mailed to the Company's stockholders, and Parent will use
all reasonable efforts to cause an appropriate proxy or
information statement to be mailed to Parent's shareholders,
in each case as promptly as practicable after the Form F-4
is declared effective under the Securities Act. Each of the
Company and Parent shall also take any action (other than
qualifying to do business in any jurisdiction in which it is
not now so qualified or filing a general consent to service
of process) required to be taken under any applicable state
securities or "blue sky" laws in connection with the
issuance of Ordinary Shares in the Merger and under the
Stock Plans and the Company shall furnish all information
concerning the Company and the holders of the Company Common
Stock and rights to acquire Company Common Stock pursuant to
the Stock Plans as may be reasonably requested in connection
with any such action.
(b) The Company will, as soon as practicable
following the date of this Agreement, duly call, give notice
55<PAGE>
47
of, convene and hold a meeting of its stockholders (the
"Company Stockholders Meeting") for the purpose of obtaining
the Company Stockholder Approval. Without limiting the
generality of the foregoing, the Company agrees that its
obligations pursuant to the first sentence of this
Section 5.01(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to the
Company of any takeover proposal. The Company will, through
its Board of Directors, recommend to its stockholders the
approval and adoption of this Agreement and the transactions
contemplated hereby, except to the extent that the Board of
Directors of the Company shall have withdrawn its
recommendation of this Agreement or the Merger as permitted
by Section 4.02(b).
(c) Parent will, as soon as practicable following
the date of this Agreement, duly call, give notice of,
convene and hold a meeting of its shareholders (the "Parent
Shareholders Meeting") for the purpose of obtaining the
Parent Shareholder Approval. Parent will, through its Board
of Directors, recommend to its shareholders the approval and
adoption of the amendments to its Articles of Association to
add such provisions as may be necessary to comply with the
New Jersey Casino Control Act as a result of consummation of
the transactions contemplated by this Agreement.
(d) The Company and Parent will use reasonable
efforts to hold the Company Stockholders Meeting and the
Parent Stockholders Meeting as soon as practicable after the
date hereof.
(e) As of the date which is two business days
prior to the date on which the Form F-4 is to become
effective under the Securities Act, if Parent and the
Company shall have reasonably concluded, based upon the
advice of their respective proxy solicitation firms and
other relevant facts and circumstances, that it is
reasonably likely that any approval of the holders of
Company Class B Common Stock that may be required under
applicable law in connection with the transactions
contemplated by this Agreement will not be obtained at the
Company Stockholders Meeting, then, at the written request
of the Company delivered to Parent on such date, Parent
shall exercise the DD Option; provided, that Parent shall
not be obligated to exercise the DD Option if it is
reasonably likely that such exercise would result in a
material adverse effect on Parent.
56<PAGE>
48
SECTION 5.02. Letters of the Company's
Accountants. The Company shall use all reasonable efforts
to cause to be delivered to Parent a letter of Ernst & Young
LLP, the Company's independent public accountants, dated a
date within two business days before the date on which the
Form F-4 shall become effective and a letter of Ernst &
Young LLP dated a date within two business days before the
Closing Date, each addressed to Parent, in form and
substance reasonably satisfactory to Parent and customary in
scope and substance for letters delivered by independent
public accountants in connection with registration
statements similar to the Form F-4.
SECTION 5.03. Letters of Parent's Accountants.
Parent shall use all reasonable efforts to cause to be
delivered to the Company letters of Arthur Andersen, LLP,
Arthur Andersen, chartered accountants, and Ernst & Young
LLP, Parent's independent public accountants for the
relevant periods prior to the date hereof, dated a date
within two business days before the date on which the
Form F-4 shall become effective and letters of Arthur
Andersen, LLP, Arthur Andersen, chartered accountants and
Ernst & Young LLP dated a date within two business days
before the Closing Date, each addressed to the Company, in
form and substance reasonably satisfactory to the Company
and customary in scope and substance for letters delivered
by independent public accountants in connection with
registration statements similar to the Form F-4.
SECTION 5.04. Access to Information;
Confidentiality. Subject to the Confidentiality Agreement
(as defined below), the Company shall, and shall cause each
of its subsidiaries to, afford to Parent and to the
officers, employees, accountants, counsel, financial
advisors and other representatives of Parent, reasonable
access during normal business hours during the period prior
to the Effective Time to all their properties, books,
contracts, commitments, personnel and records and, during
such period, the Company shall, and shall cause each of its
subsidiaries to, furnish promptly to Parent (a) a copy of
each report, schedule, registration statement and other
document filed by it during such period pursuant to the
requirements of Federal or state securities laws and (b) all
other information concerning its business, properties and
personnel as Parent may reasonably request. Parent will
hold, and will cause officers, employees, accountants,
counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in accordance
57<PAGE>
49
with the terms of the Confidentiality Agreement dated as of
August 9, 1996, between Parent and the Company (the
"Confidentiality Agreement").
SECTION 5.05. Reasonable Efforts. (a) Upon the
terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all reasonable
efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement and the
Stockholder Agreements, including (i) in the case of Parent,
(1) the obtaining of all necessary approvals by the New
Jersey Casino Control Commission under the New Jersey Casino
Control Act and the rules and regulations promulgated
thereunder required in connection with the Merger and this
Agreement, (2) promptly filing a petition requesting
"Interim Casino Authorization" pursuant to NJSA 5:12-95.12
et seq. (the "ICA Petition"), and (3) not withdrawing the
ICA Petition or Parent's and Sub's application to the New
Jersey Casino Control Commission for a permanent license
under the New Jersey Casino Control Act, (ii) the obtaining
of all necessary actions or nonactions, waivers, consents
and approvals from other Governmental Entities and the
making of all necessary registrations and filings (including
filings with Governmental Entities, such as those referred
to in Sections 3.01(d)(1)-(8) and 3.02(c)(1)-(8)) and the
taking of all reasonable steps as may be necessary to obtain
an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (iii) the obtaining
of all necessary consents, approvals or waivers from third
parties, (iv) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging
this Agreement or the Stockholder Agreements or the
consummation of the transactions contemplated by this
Agreement or the Stockholder Agreements, including seeking
to have any stay or temporary restraining order entered by
any court or other Governmental Entity vacated or reversed,
and (v) the execution and delivery of any additional
instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of,
this Agreement and the Stockholder Agreements; provided,
however, that a party shall not be obligated to take any
action pursuant to the foregoing if the taking of such
action or the obtaining of any waiver, consent, approval or
exemption is reasonably likely (x) to be materially
58<PAGE>
50
burdensome to such party and its subsidiaries taken as a
whole or to impact in a materially adverse manner the
economic or business benefits of the transactions
contemplated by this Agreement or the Stockholder Agreements
so as to render inadvisable the consummation of the Merger
or (y) in the case of Parent, to result in the imposition of
a condition or restriction of the type referred to in
clause (ii), (iii), (iv) or (v) of Section 6.02(d);
(b) In connection with and without limiting the
foregoing, the Company and its Board of Directors shall
(i) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or
becomes applicable to the Merger, this Agreement, the
Company Stockholder Agreement or any of the other
transactions contemplated by this Agreement or the Company
Stockholder Agreement and (ii) if any state takeover statute
or similar statute or regulation becomes applicable to the
Merger, this Agreement, the Company Stockholder Agreement or
any other transaction contemplated by this Agreement or the
Company Stockholder Agreement, take all action necessary to
ensure that the Merger and the other transactions
contemplated by this Agreement and the Stockholder
Agreements may be consummated as promptly as practicable on
the terms contemplated by this Agreement and the Stockholder
Agreements and otherwise to minimize the effect of such
statute or regulation on the Merger and the other
transactions contemplated by this Agreement and the Company
Stockholder Agreement.
SECTION 5.06. Stock Options; Warrants. (a) As
soon as practicable following the date of this Agreement,
the Board of Directors of the Company (or, if appropriate,
any committee administering the Stock Plans) shall adopt
such resolutions or take such other actions as may be
required to effect the following:
(i) adjust the terms of all outstanding
(x) employee and director stock options to purchase
shares of Company Common Stock ("Employee Stock
Options") granted under the Company's Stock Option
Plan, as amended and restated through the date hereof,
(the "Stock Plans") whether vested or unvested, as
necessary to provide that, at the Effective Time, each
Employee Stock Option outstanding immediately prior to
the Effective Time shall be deemed to constitute an
option to acquire, on the same terms and conditions as
were applicable under such Employee Stock Option,
59<PAGE>
51
including vesting (and, where applicable under the
terms of such Employee Stock Option, accelerated
vesting) and the rights of the holder under the terms
of such Employee Stock Option, the same number of
Ordinary Shares as the holder of such Employee Stock
Option would have been entitled to receive pursuant to
the Merger had such holder exercised such Employee
Stock Option in full immediately prior to the Effective
Time (the "Deemed Parent Share Amount"), at a price per
Ordinary Share equal to (A) the aggregate exercise
price for the shares of Company Common Stock otherwise
purchasable pursuant to such Employee Stock Option
divided by (B) the aggregate Deemed Parent Share Amount
with respect to such Employee Stock Option (each, as so
adjusted, an "Adjusted Option"); provided, however,
that in the case of any option to which Section 421 of
the Code applies by reason of its qualification under
any of Sections 422 through 424 of the Code ("qualified
stock options"), the option price, the number of shares
purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be
determined in order to comply with Section 424 of the
Code; and
(ii) subject to the consent of Parent, such consent
not to be unreasonably withheld, make such other
changes to the Stock Plans as the Company and Parent
may determine appropriate to give effect to the Merger.
(b) The provisions in the Stock Plans and any
other Benefit Plan providing for the issuance, transfer or
grant of any capital stock of the Company or any interest in
respect of any capital stock of the Company shall be deleted
as of the Effective Time, and the Company shall use its best
efforts to ensure that following the Effective Time no
holder of an Employee Stock Option or any participant in any
Stock Plan shall have any right thereunder to acquire any
capital stock of the Company or Parent, except as provided
in Section 5.06(a).
(c) As soon as practicable after the Effective
Time, Parent shall deliver to the holders of Employee Stock
Options appropriate notices setting forth such holders'
rights pursuant to the respective Stock Plans and the
agreements evidencing the grants of such Employee Stock
Options shall continue in effect on the same terms and
conditions (subject to the adjustments required by this
Section 5.06 after giving effect to the Merger and the
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52
provisions of paragraphs (a)(ii) and (f) of this
Section 5.06). Parent shall comply with the terms of the
Stock Plans and ensure, to the extent required by, and
subject to the provisions of, the Stock Plans, that the
Employee Stock Options which qualified as qualified stock
options prior to the Effective Time continue to qualify as
qualified stock options after the Effective Time.
(d) Parent shall take such actions as are
reasonably necessary for the assumption of the Stock Plans
of the Company pursuant to Section 5.06(a), including the
reservation, issuance and listing of Ordinary Shares as is
necessary to effectuate the transactions contemplated by
Section 5.06(a). As soon as reasonably practicable after
the Effective Time, Parent shall prepare and file with the
SEC a registration statement on Form S-8 with respect to
Ordinary Shares subject to Employee Stock Options and shall
use its best efforts to maintain the effectiveness of a
registration statement or registration statements covering
such Employee Stock Options (and maintain the current status
of the prospectus or prospectuses contained therein) for so
long as such Employee Stock Options remain outstanding.
(e) A holder of an Adjusted Option may exercise
such Adjusted Option in whole or in part in accordance with
its terms and the terms of the related Stock Plan by
delivering a properly executed notice of exercise to Parent,
together with the consideration therefor and the Federal
withholding tax information, if any, required in accordance
with the related Stock Plan.
(f) All restrictions or limitations on transfer
and vesting with respect to Employee Stock Options awarded
under the Stock Plans, to the extent that such restrictions
or limitations shall not have already lapsed, shall remain
in full force and effect with respect to such options after
giving effect to the Merger and the assumption by Parent as
set forth above.
(g) At the Effective Time, the Surviving
Corporation shall assume the due and punctual observance and
performance of the covenants and conditions of the Company
Warrants pursuant to Section 3.1(i) thereof (as in effect on
the date hereof).
SECTION 5.07. Benefit Plans. Except as provided
in Section 5.06, Parent currently intends to cause the
Surviving Corporation to maintain for a period of two years
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53
after the Effective Time employee benefit plans, programs
and policies for the employees of the Company and its
subsidiaries which, in the aggregate, provide benefits that
are no less favorable to those provided to them under such
plans, programs and policies on the date hereof.
SECTION 5.08. Indemnification and Insurance.
Parent and Sub agree that all rights to indemnification for
acts or omissions occurring prior to the Effective Time now
existing in favor of the current or former directors or
officers of the Company and its subsidiaries as provided in
their respective certificates of incorporation or by-laws
(or comparable charter or organizational documents) shall
survive the Merger and shall continue in full force and
effect in accordance with their terms for a period of not
less than six years from the Effective Time. Parent will
cause to be maintained for a period of not less than six
years from the Effective Time the Company's current
directors' and officers' insurance and indemnification
policy to the extent that it provides coverage for events
occurring prior to the Effective Time ("D&O Insurance") for
all persons who are directors and officers of the Company on
the date of this Agreement, so long as the annual premium
for such D&O Insurance is not in excess of 150% of the last
annual premium paid prior to the date of this Agreement (the
amount equal to such percentage of such last annual premium,
the "Maximum Premium"); provided, however, that Parent may,
in lieu of maintaining such existing D&O Insurance as
provided above, cause coverage to be provided under any
policy maintained for the benefit of Parent or any of its
subsidiaries, so long as the terms thereof are no less
advantageous to the intended beneficiaries thereof than the
existing D&O Insurance. Parent and the Company agree that
an annual premium in excess of the Maximum Premium would not
be presumed to be reasonable and acceptable in accordance
with Article V, Section I of the Amended and Restated
Certificate of Incorporation of the Company. If the
existing D&O Insurance expires, is terminated or cancelled
during such six-year period, Parent will use all reasonable
efforts to cause to be obtained as much D&O Insurance as can
be obtained for the remainder of such period for an
annualized premium not in excess of the Maximum Premium, on
terms and conditions no less advantageous to the covered
persons than the existing D&O Insurance. The Company
represents to Parent that the Maximum Premium is $1,297,500.
SECTION 5.09. Fees and Expenses. (a) Except as
provided below in this Section 5.09, all fees and expenses
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54
incurred in connection with the Merger, this Agreement, the
Stockholder Agreements and the transactions contemplated by
this Agreement and the Stockholder Agreements shall be paid
by the party incurring such fees or expenses, whether or not
the Merger is consummated, except that each of Parent and
the Company shall bear and pay one-half of the costs and
expenses incurred in connection with the filing, printing
and mailing of the Form F-4, the Proxy Statement and
Parent's proxy or information statement referred to in
Section 5.01(a).
(b) The Company shall pay, or cause to be paid,
in same day funds to Parent the sum of (x) all of Parent's
reasonably documented out-of-pocket expenses in an amount up
to but not to exceed $940,000.00 (the "Expenses") and
(y) $9,400,000.00 (the "Termination Fee") upon demand if
(i) Parent or Sub terminates this Agreement under
Section 7.01(f); provided, however, that Parent shall be
entitled to only the Expenses where Parent or Sub terminates
this Agreement under Section 7.01(f)(i) or (iii); provided
further, however, that if the Company subsequently
consummates or enters into an agreement relating to a
competitive proposal within 12 months of such termination,
the Company shall also pay to Parent the Termination Fee,
(ii) the Company terminates this Agreement pursuant to
Section 7.01(c) or (iii) prior to any termination of this
Agreement, a takeover proposal shall have been made and
within 12 months of such termination, a transaction
constituting a takeover proposal is consummated or the
Company enters into an agreement with respect to, or
approves or recommends a takeover proposal. The amount of
Expenses so payable shall be the amount set forth in an
estimate delivered by Parent, subject to upward or downward
adjustment (not to be in excess of the amount set forth in
clause (x) above) upon delivery of reasonable documentation
therefor.
(c) Unless Parent and the Company shall have
reached the agreement described in Section 5.18, Parent
shall pay, or cause to be paid, an amount equal to the ICA
Amount (as defined below), in same day funds to the Company
upon demand, if the Company or Parent terminates this
Agreement under Section 7.01(d) or Section 7.01(e). "ICA
Amount" shall mean $9,400,000.00 minus the aggregate capital
expenditures made by the Company in respect of the Chalfonte
Project from the date hereof to the date of such termination
(other than capital expenditures for work completed on the
Chalfonte Project prior to the date of this Agreement but
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55
not yet paid for by the Company as set forth in
Section 4.01(a) of the Company Disclosure Schedule).
SECTION 5.10. Public Announcements. Parent and
Sub, on the one hand, and the Company, on the other hand,
will consult with each other before issuing, and provide
each other the opportunity to review and comment upon any
press release or other public statements with respect to the
transactions contemplated by this Agreement or the
Stockholder Agreements, including the Merger, and shall not
issue any such press release or make any such public
statement prior to such consultation, except as may be
required by applicable law, court process or by obligations
pursuant to any listing agreement with any national
securities exchange. The parties agree that the initial
press release to be issued with respect to the transactions
contemplated by this Agreement and the Stockholder
Agreements shall be in the form heretofore agreed to by the
parties.
SECTION 5.11. Affiliates. Prior to the Closing
Date, the Company shall deliver to Parent a letter
identifying all persons who are, at the time the Merger is
submitted for approval to the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under
the Securities Act. The Company shall use all reasonable
efforts to cause each such person to deliver to Parent on or
prior to the Closing Date a written agreement substantially
in the form attached as Exhibit B. The Company shall not
register, and shall instruct its transfer agent not to
register, the transfer of any certificate representing
Company Common Stock owned of record or beneficially by any
Company Significant Stockholder, unless such transfer is
made in compliance with the terms of the Company Stockholder
Agreement.
SECTION 5.12. NYSE Listing. Parent shall use all
reasonable efforts to cause the Ordinary Shares to be issued
in the Merger as part of the Merger Consideration, upon
exercise of Company Warrants and under the Stock Plans to be
approved for listing on the NYSE, subject to official notice
of issuance, prior to the Closing Date.
SECTION 5.13. Stockholder Litigation. The
Company shall give Parent the opportunity to participate in
the defense or settlement of any stockholder litigation
against the Company and its directors relating to the
transactions contemplated by this Agreement; provided,
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56
however, that no such settlement shall be agreed to without
Parent's consent, which consent shall not be unreasonably
withheld.
SECTION 5.14. Title Policies; Title Insurance.
At Parent's request and expense, as soon as reasonably
practicable, the Company shall deliver to Parent, with
respect to each parcel of Material Real Property, a policy
of title insurance insuring that the Company is the owner in
fee simple or of a valid and subsisting leasehold estate, as
applicable, in each parcel of Material Real Property, and
its related improvements and fixtures in an amount not less
than the current fair market value of such Real Property
which policy shall (i) be issued by a title company
acceptable to Parent, (ii) include such reinsurance
arrangements (with provisions for direct access) as shall be
reasonably acceptable to Parent, (iii) have been
supplemented by such endorsements, or, where such
endorsements are not available at commercially reasonable
premium costs, and where opinions customarily are given with
respect to such matters, reasonably acceptable opinion
letters of special counsel, architects or other
professionals, which counsel, architects or other
professionals shall be acceptable to Parent, as shall be
required by Parent (including endorsements or opinion
letters on matters relating to nonimputation, public road
access, contiguity (where appropriate), survey and so-called
comprehensive coverage over covenants and restrictions),
(iv) contain only such exceptions to title as are permitted
by Section 3.01(u) and (w) be effective on the Closing Date.
SECTION 5.15. Surveys. At Parent's request and
expense, the Company shall provide in respect of the
Material Real Property, as soon as reasonably practicable,
surveys (i) prepared by a surveyor or engineer licensed to
perform surveys in the state where such Real Property is
located (ii) dated not earlier than 30 days prior to the
date of delivery thereof, (iii) certified by the surveyor in
a manner reasonably acceptable to Parent and (iv) complying
in all respects with the minimum detail requirements of the
American Land Title Association, or local equivalent, as
such requirements are in effect on the date of preparation
of such survey.
SECTION 5.16. Class B Option. (a) The Company
hereby grants to Parent an unconditional, irrevocable option
to purchase, at any time or from time to time during the
term of this Agreement, any or all of the Units that are
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57
owned by the Company or by any subsidiary of the Company at
the time or times of exercise of such option by Parent at a
purchase price equal to the per unit closing price of such
Units on the ASE Transaction List (as reported by the Wall
Street Journal or, if not reported thereby, any other
authoritative source) for the trading day immediately
preceding the exercise date (the "Class B Option").
(b) The Class B Option may be exercised at any
time or from time to time by Parent (or its designee which
must be a direct or indirect wholly owned subsidiary of
Parent), by delivery of written notice to the Company of
such exercise, specifying the number of Units to be
purchased and the place, time and date of the closing of
such purchase. At such closing, the Company shall (or shall
cause its subsidiary to) deliver to Parent or such designee
a certificate or certificates evidencing all of the Units to
be purchased, duly endorsed in blank or accompanied by an
assignment duly endorsed in blank in proper form for
transfer, against delivery by Parent or such designee of the
aggregate purchase price for such Units, by wire transfer of
same day funds to the account designated in writing by the
Company.
(c) In the event that Parent shall exercise the
Class B Option and this Agreement shall thereafter be
terminated, Parent shall promptly thereafter execute and
deliver to the Company an agreement, in form and substance
reasonably satisfactory to Parent and the Company, to vote
any Company Class B Common Stock directly or indirectly
owned by Parent (i) in any election of directors in
accordance with the recommendation of the Board of Directors
of the Company and (ii) at the Company's request, in favor
of any proposed amendment to the Company's certificate of
incorporation and by-laws necessary to eliminate the Company
Class B Common Stock or to eliminate the Class B Directors.
SECTION 5.17. Amendments to Junior Mortgage Notes
Indenture. The Company hereby agrees to enter into any
amendments to the indenture relating to the Junior Mortgage
Notes as may be reasonably required in connection with the
Merger and the transactions contemplated by this Agreement.
SECTION 5.18. Chalfonte Project Parking Garage.
During the 60-day period following the date hereof, Parent
and the Company shall use all reasonable efforts to reach
mutual agreement on the site for the parking garage in
respect of the Chalfonte Project (the "Chalfonte Garage"),
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58
and the budget, schedule and specifications for the
construction of the Chalfonte Garage.
SECTION 5.19. Supplemental Indenture. As soon as
practicable on or after the Closing Date, Parent will cause
the Surviving Corporation to execute and deliver the
supplemental indenture required pursuant to
Section 6.01(a)(1) of the Indenture dated as of
September 14, 1990, among Resorts International, Inc., as
issuer and Bank of New York, as trustee, with respect to
$105,333,000 First Mortgage Non-Recourse Pass-Through Notes
due June 30, 2000.
SECTION 5.20. ICA Election. If the relief
requested by the ICA Petition shall not have been granted by
January 31, 1997, the Company shall be entitled to elect to
proceed with the construction of a parking garage in respect
of the Chalfonte Project (the "ICA Election"), on such site
and under such budget, schedule and specifications for the
construction of such parking garage as the Company shall
reasonably determine, and to make capital expenditures in
connection therewith.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's
Obligation To Effect the Merger. The respective obligation
of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Company Stockholder Approval and Parent
Shareholder Approval. The Company Stockholder Approval
and the Parent Shareholder Approval shall have been
obtained.
(b) HSR Act. The waiting period (and any
extension thereof) applicable to the Merger under the
HSR Act shall have been terminated or shall have
expired.
(c) No Injunctions or Restraints. No statute,
rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction
or other order enacted, entered, promulgated, enforced
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59
or issued by any court of competent jurisdiction or
other Governmental Entity or other legal restraint or
prohibition preventing the consummation of the Merger
shall be in effect.
(d) Form F-4. The Form F-4 shall have become
effective under the Securities Act and shall not be the
subject of any stop order or proceedings seeking a stop
order.
(e) NYSE and ASE Listings. The Ordinary Shares
issuable to the Company's stockholders pursuant to this
Agreement, upon exercise of Company Warrants and under
the Stock Plans shall have been approved for listing on
the NYSE, subject to official notice of issuance, and
the Units shall continue to be approved for listing on
the ASE.
SECTION 6.02. Conditions to Obligations of Parent
and Sub. The obligations of Parent and Sub to effect the
Merger are further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The repre-
sentations and warranties of the Company set forth in
this Agreement that are qualified as to materiality
shall be true and correct, and the representations and
warranties of the Company set forth in this Agreement
that are not so qualified shall be true and correct in
all material respects, in each case as of the date of
this Agreement and as of the Closing Date as though
made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and Parent shall have
received a certificate signed on behalf of the Company
by the chief executive officer and the chief financial
officer of the Company to such effect.
(b) Performance of Obligations of the Company.
The Company shall have performed in all material
respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date,
and Parent shall have received a certificate signed on
behalf of the Company by the chief executive officer
and the chief financial officer of the Company to such
effect.
(c) Letters from Company Affiliates. Parent
shall have received from each person identified in the
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60
letter referred to in Section 5.11 an executed copy of
an agreement substantially in the form attached as
Exhibit B.
(d) No Litigation. There shall not be pending or
threatened any suit, action or proceeding by any
Governmental Entity, or any suit, action or proceeding
by any other person which has a reasonable likelihood
of success, in each case (i) challenging the
acquisition by Parent or Sub of any shares of capital
stock of the Company or the Surviving Corporation,
seeking to restrain or prohibit the consummation of the
Merger or any of the other transactions contemplated by
this Agreement or the Stockholder Agreements or seeking
to obtain from the Company, Parent or Sub any damages
that are material in relation to the Company and its
subsidiaries taken as a whole, (ii) seeking to prohibit
or limit the ownership or operation by the Company,
Parent or any of their respective subsidiaries of any
material portion of the business or assets of the
Company, Parent or any of their respective
subsidiaries, or to compel the Company, Parent or any
of their respective subsidiaries to dispose of or hold
separate any material portion of the business or assets
of the Company, Parent or any of their respective
subsidiaries, as a result of the Merger or any of the
other transactions contemplated by this Agreement or
the Stockholder Agreements, (iii) seeking to impose
limitations on the ability of Parent or Sub to acquire
or hold, or exercise full rights of ownership of, any
shares of capital stock of the Company or the Surviving
Corporation, including the right to vote the Company
Common Stock, or common stock of the Surviving
Corporation, on all matters properly presented to the
stockholders of the Company or the Surviving
Corporation, respectively, (iv) seeking to prohibit
Parent or any of its subsidiaries from effectively
controlling in any material respect the business or
operations of the Company or its subsidiaries or
(v) which otherwise could reasonably be expected to
have a material adverse effect on the Company or
Parent. In addition, there shall not be any statute,
rule, regulation, judgment or order enacted, entered,
enforced or promulgated that is reasonably likely to
result, directly or indirectly, in any of the
consequences referred to in clauses (ii) through (iv)
above.
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61
(e) Consents, Approvals and Authorizations, etc.
All consents, approvals, orders or authorizations of
any Governmental Entity, including approvals by the
New Jersey Casino Control Commission under the
New Jersey Casino Control Act and the rules and
regulations promulgated thereunder and approvals under
the New Jersey Industrial Site Recovery Act, required
in connection with the Merger or this Agreement or the
Stockholder Agreements or the consummation of any of
the transactions contemplated by this Agreement or the
Stockholder Agreements shall have been obtained and
shall be in full force and effect without the
imposition of any conditions or restrictions of the
type referred to in Section 6.02(d) (ii), (iii) or
(iv), it being understood that receipt of the relief
requested by the ICA Petition shall not satisfy this
condition insofar as this condition relates to
approvals under the New Jersey Casino Control Act.
(f) Tax Opinions. Parent shall have received
from Cravath, Swaine & Moore, counsel to Parent, on the
date of the Proxy Statement and on the Closing Date
opinions, in each case dated as of such respective
dates and stating that the Merger will be treated for
Federal income tax purposes as a reorganization within
the meaning of Section 368(a) of the Code and that
Parent, Sub and the Company will each be a party to
that reorganization within the meaning of
Section 368(b) of the Code. In rendering such
opinions, counsel for Parent shall be entitled to rely
upon representations of officers of Parent, Sub and the
Company reasonably satisfactory in form and substance
to such counsel.
(g) Blue Sky. Parent shall have received all
state securities or "blue sky" authorizations necessary
to issue the Ordinary Shares issuable pursuant to this
Agreement.
SECTION 6.03. Conditions to Obligation of the
Company. The obligation of the Company to effect the Merger
is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The repre-
sentations and warranties of Parent and Sub set forth
in this Agreement that are qualified as to materiality
shall be true and correct, and the representations and
70<PAGE>
62
warranties of Parent and Sub set forth in this
Agreement that are not so qualified shall be true and
correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date
as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement, and the
Company shall have received a certificate signed on
behalf of Parent by an executive officer of Parent to
such effect.
(b) Performance of Obligations of Parent and Sub.
Parent and Sub shall have performed in all material
respects all obligations required to be performed by
them under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate
signed on behalf of Parent by an executive officer of
Parent to such effect.
(c) Tax Opinions. The Company shall have
received from Gibson, Dunn & Crutcher, counsel to the
Company, on the date of the Proxy Statement and on the
Closing Date opinions, in each case dated as of such
respective dates and stating that the Merger will be
treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of
the Code and that Parent, Sub and the Company will each
be a party to that reorganization within the meaning of
Section 368(b) of the Code. In rendering such
opinions, counsel for the Company shall be entitled to
rely upon representations of officers of Parent, Sub
and the Company reasonably satisfactory in form and
substance to such counsel.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether
before or after the Company Stockholder Approval or the
Parent Stockholder Approval:
(a) by mutual written consent of Parent, Sub and
the Company; or
(b) by either Parent or the Company:
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63
(i) if, upon a vote at a duly held Company
Stockholders Meeting or any adjournment thereof at
which the Company Stockholder Approval shall have
been voted upon, the Company Stockholder Approval
shall not have been obtained;
(ii) if the Merger shall not have been
consummated on or before June 30, 1997, unless the
failure to consummate the Merger is the result of
a willful and material breach of this Agreement by
the party seeking to terminate this Agreement;
provided, however, that the passage of such period
shall be tolled for any part thereof during which
any party shall be subject to a nonfinal order,
injunction, decree, ruling or action restraining,
enjoining or otherwise prohibiting the
consummation of the Merger or the calling or
holding of the Company Stockholders Meeting or the
Parent Shareholders Meeting;
(iii) if any Governmental Entity shall have
issued an order, injunction, decree or ruling or
taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger
and such order, injunction, decree, ruling or
other action shall have become final and
nonappealable; or
(iv) in the event of a breach by the other
party of any representation, warranty, covenant or
other agreement contained in this Agreement which
(A) would give rise to the failure of a condition
set forth in Section 6.02(a) or (b) or
Section 6.03(a) or (b), as applicable, and
(B) cannot be or has not been cured within 30 days
after the giving of written notice to the
breaching party of such breach (a "Material
Breach") (provided that the terminating party is
not then in Material Breach of any representation,
warranty, covenant or other agreement contained in
this Agreement);
(c) by the Company in connection with entering
into a definitive agreement in accordance with
Section 4.02(b), provided it has complied with all
provisions thereof, including the notice provisions
therein, and that it makes simultaneous payment of the
Termination Fee and the Expenses;
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64
(d) by either Parent or the Company if the relief
requested by the ICA Petition shall have been denied
and such denial shall have become final and
nonappealable;
(e) by either Parent or the Company if the New
Jersey Casino Control Commission shall have denied
Parent a permanent license under the New Jersey Casino
Control Act and such denial shall have become final and
nonappealable;
(f) by Parent if (i) the Board of Directors of the
Company or any committee thereof shall have withdrawn
or modified in a manner adverse to Parent or Sub its
approval or recommendation of the Merger or this
Agreement, or approved or recommended any takeover
proposal, (ii) the Company shall have entered into any
agreement with respect to any competitive proposal in
accordance with Section 4.02(b), or (iii) the Board of
Directors of the Company or any committee thereof shall
have resolved to take any of the foregoing actions;
(g) by Parent if, upon a vote at a duly held
Parent Shareholders Meeting or any adjournment thereof
at which the Parent Shareholder Approval shall have
been voted upon, the Parent Shareholder Approval shall
not have been obtained;
(h) by Parent if the Average Market Price is less
than $41.625; provided, however, that Parent shall
furnish the Company with written notice two NYSE
trading days in advance of the date that it intends to
terminate this Agreement pursuant to this Section
7.01(h) and, during such two trading day period, the
Company shall be entitled to elect to go forward with
the Merger and, if the Company shall timely make such
election, Parent shall not terminate this Agreement
pursuant to this Section 7.01(h) and the "Conversion
Number" shall mean .4925; or
(i) by Parent if the Company shall have made the
ICA Election.
SECTION 7.02. Effect of Termination. In the
event of termination of this Agreement by either the Company
or Parent as provided in Section 7.01, this Agreement shall
forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Sub or the
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65
Company, other than the provisions of Section 3.01(p),
Section 3.02(h), the last sentence of Section 5.04,
Section 5.09, Section 5.16(c), this Section 7.02 and
Article VIII and except to the extent that such termination
results from the willful and material breach by a party of
any of its representations, warranties, covenants or
agreements set forth in this Agreement.
SECTION 7.03. Amendment. This Agreement may be
amended by the parties at any time before or after the
Company Stockholder Approval or the Parent Shareholder
Approval; provided, however, that after any such approval,
there shall not be made any amendment that by law requires
further approval by the stockholders of the Company or the
shareholders of Parent without the further approval of such
stockholders or shareholders, as the case may be. This
Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
SECTION 7.04. Extension; Waiver. At any time
prior to the Effective Time, a party may (a) extend the time
for the performance of any of the obligations or other acts
of the other parties, (b) waive any inaccuracies in the
representations and warranties of the other parties
contained in this Agreement or in any document delivered
pursuant to this Agreement or (c) subject to the proviso of
Section 7.03, waive compliance by the other parties with any
of the agreements or conditions contained in this Agreement.
Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of
any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a
waiver of such rights.
SECTION 7.05. Procedure for Termination,
Amendment, Extension or Waiver. A termination of this
Agreement pursuant to Section 7.01, an amendment of this
Agreement pursuant to Section 7.03 or an extension or waiver
pursuant to Section 7.04 shall, in order to be effective,
require in the case of Parent, Sub or the Company, action by
its Board of Directors or, except in the case of Sub or the
Company with respect to any amendment to this Agreement, the
duly authorized designee of its Board of Directors.
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66
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and
Warranties. None of the representations and warranties in
this Agreement or in any instrument delivered pursuant to
this Agreement shall survive the Effective Time. This
Section 8.01 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance
after the Effective Time.
SECTION 8.02. Notices. All notices, requests,
claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if
delivered personally, telecopied (which is confirmed) or
sent by overnight courier (providing proof of delivery) to
the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Sun International Hotels Limited
Badgemore House
Gravel Hill
Henley-on-Thames, RG94NR
England
Telecopy No.: 011-441-491 576526
Attention: Charles D. Adamo, Esq.
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Telecopy No.: (212) 474-3700
Attention: Peter S. Wilson, Esq.; and
(b) if to the Company, to
Griffin Gaming & Entertainment, Inc
1133 Boardwalk
Atlantic City, NJ 08401
Telecopy No.: (609) 345-3260
Attention: Thomas E. Gallagher
75<PAGE>
67
with a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166-0193
Telecopy No.: (212) 351-4035
Attention: Steven R. Finley, Esq.
SECTION 8.03. Definitions. For purposes of this
Agreement:
(a) an "affiliate" of any person means another
person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under
common control with, such first person;
(b) "competitive proposal" means (x) a bona fide
takeover proposal to acquire, directly or indirectly,
for consideration consisting of cash and/or securities,
more than 50% of the shares of Company Common Stock
then outstanding or all or substantially all the assets
of the Company, and (y) otherwise on terms which the
Board of Directors of the Company determines in its
good faith reasonable judgment to be more favorable to
the Company's stockholders than the Merger (taking into
account any improvements to the Merger proposed by
Parent);
(c) "indebtedness" has the meaning assigned
thereto in Section 3.01(s)(ii);
(d) in respect of Real Property only, "lien" means
any conditional sale agreement, lease, sublease,
option, easement, right-of-way, encroachment,
encumbrance, hypothecation, lien, mortgage, pledge,
reservation, restriction, security interest, title
retention or other security arrangement, or any adverse
right or interest, charge or claim of any nature
whatsoever of, on, or with respect to any asset,
property or property interest; provided, however, that
the term "lien" shall not include (i) liens for water
and sewage charges and current taxes not yet due and
payable or being contested in good faith,
(ii) mechanics', carriers', workers', repairers',
materialmens', warehousemens' and other similar liens
arising or incurred in the ordinary course of business
76<PAGE>
68
or (iii) all encumbrances approved in writing by the other
party hereto;
(e) "material adverse change" or "material adverse
effect" means, when used in connection with the Company
or Parent, any change or effect (or any development
that, insofar as can reasonably be foreseen, is likely
to result in any change or effect) that is materially
adverse to the business, properties, assets, condition
(financial or otherwise), results of operations or
prospects of such party and its subsidiaries taken as a
whole;
(f) "person" means an individual, corporation,
partnership, limited liability company, joint venture,
association, trust, unincorporated organization or
other entity;
(g) "Post-Closing Tax Period": means all taxable
periods beginning after the Closing Date and the
portion beginning on the day after the Closing Date of
any taxable period that includes (but does not begin
on) such day.
(h) a "Significant Subsidiary" of the Company
means each of GGRI, Inc., Resorts International Hotel,
Inc., Resorts International Hotel Financing, Inc.,
Griffin Entertainment, Inc. and any other subsidiary of
the Company that would constitute a Significant
Subsidiary within the meaning of Rule 1-02 of
Regulation S-X of the SEC;
(i) a "subsidiary" of any person means another
person, an amount of the voting securities or other
voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if
there are no such voting securities or interests, 50%
or more of the equity interests of which) is owned
directly or indirectly by such first person;
(j) "takeover proposal" means any proposal or
offer from any person relating to any direct or
indirect acquisition or purchase of a material amount
of assets of the Company or any of its subsidiaries or
of over 20% of any class of equity securities (other
than acquisitions of stock by institutional investors
in the ordinary course of business) of the Company or
77<PAGE>
69
any of its subsidiaries or any tender offer or exchange
offer that if consummated would result in any person
beneficially owning 20% or more of any class of equity
securities of the Company or any of its subsidiaries or
which would require approval under any Gaming Law, or
any merger, consolidation, business combination, sale
of substantially all assets, recapitalization,
liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries other
than the transactions contemplated by this Agreement,
or any other transaction the consummation of which
would reasonably be expected to impede, interfere with,
prevent or materially delay the Merger or which would
reasonably be expected to dilute materially the
benefits to Parent of the transactions contemplated
hereby;
(k) "Taxes" mean all Federal, state, local,
foreign and other governmental taxes, assessments,
duties, fees, levies or similar charges of any kind,
including all sales, payroll, employment and other
withholding taxes, and including all obligations under
any tax sharing agreement, tax indemnity obligation or
similar written or unwritten agreement, arrangement or
practice, and including all interest, penalties and
additions imposed with respect to such amounts;
(l) "Tax Return" means any return (including
information returns), report, declaration or statement
relating to Taxes, including any schedule or attachment
thereto or amendment thereof; and
(m) "Taxing Authority" means any governmental or
quasi-governmental body exercising any Taxing authority
or Tax regulatory authority.
SECTION 8.04. Interpretation. When a reference
is made in this Agreement to an Article, Section or Exhibit,
such reference shall be to an Article or Section of, or an
Exhibit to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed
by the words "without limitation". The words "hereof",
"herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a
78<PAGE>
70
whole and not to any particular provision of this Agreement.
All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine
and neuter genders of such term. Any agreement, instrument
or statute defined or referred to herein or in any agreement
or instrument that is referred to herein means such
agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of
agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and
instruments incorporated therein. References to a person
are also to its permitted successors and assigns and, in the
case of an individual, to his or her heirs and estate, as
applicable.
SECTION 8.05. Counterparts. This Agreement may
be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 8.06. Entire Agreement; No Third-Party
Beneficiaries. This Agreement (including the documents and
instruments referred to herein) and the Confidentiality
Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter
of this Agreement and (b) except for the provisions of
Article II, Section 5.06 and Section 5.08, are not intended
to confer upon any person other than the parties any rights
or remedies.
SECTION 8.07. Governing Law. This Agreement
shall be governed by, and construed in accordance with, the
laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of
conflicts of laws thereof.
SECTION 8.08. Assignment. Neither this Agreement
nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without
the prior written consent of the other parties, except that
79<PAGE>
71
Sub may assign, in its sole discretion, any of or all its
rights, interests and obligations under this Agreement to
Parent or to any direct or indirect wholly owned subsidiary
of Parent, but no such assignment shall relieve Sub of any
of its obligations under this Agreement. Any assignment in
violation of the preceding sentence shall be void. Subject
to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
SECTION 8.09. Enforcement. The parties agree
that irreparable damage would occur and that the parties
would not have any adequate remedy at law in the event that
any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in any Federal court
located in the State of Delaware or in Delaware state court,
this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal
jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that
it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any
such court and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions
80<PAGE>
72
contemplated by this Agreement in any court other than a
Federal court sitting in the State of Delaware or a Delaware
state court.
IN WITNESS WHEREOF, Parent, Sub and the Company
have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first
written above.
SUN INTERNATIONAL HOTELS LIMITED,
by
/s/Charles D. Adamo
Name: Charles D. Adamo
Title: Executive Vice President,
General Counsel
SUN MERGER CORP.,
by
/s/Charles D. Adamo
Name: Charles D. Adamo
Title: Vice President,
Secretary
GRIFFIN GAMING & ENTERTAINMENT,
INC.,
by
/s/Thomas E. Gallagher
Name: Thomas E. Gallagher
Title: President and Chief
Executive Officer
81<PAGE>
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SUN MERGER CORP.
ARTICLE I
The name of the corporation (hereinafter called
the "Corporation") is Sun Merger Corp.
ARTICLE II
The address of the Corporation's registered office
in the State of Delaware is Corporation Trust Center,
1209 Orange Street, Wilmington, New Castle County, Delaware.
The name of the registered agent at such address is The
Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of
Delaware.
ARTICLE IV
The total number of shares of all classes of stock
that the Corporation shall have authority to issue is
82<PAGE>
2
1,000 shares of Common Stock having the par value of $.01
per share.
ARTICLE V
The name and mailing address of the incorporator
is Matthew H. Kluger, 825 Eighth Avenue, 46th Floor, New
York, New York 10019.
ARTICLE VI
In furtherance and not in limitation of the powers
conferred upon it by law, the Board of Directors of the
Corporation is expressly authorized to adopt, amend or
repeal the By-laws of the Corporation.
ARTICLE VII
Unless and except to the extent that the By-laws
of the Corporation so require, the election of directors of
the Corporation need not be by written ballot.
ARTICLE VIII
To the fullest extent from time to time permitted
by law, no director of the Corporation shall be personally
liable to any extent to the Corporation or its stockholders
for monetary damages for breach of his fiduciary duty as a
director.
83<PAGE>
3
ARTICLE IX
This Certificate of Incorporation shall be subject
to the New Jersey Casino Control Act, N.J.S.A. 5:12-1 et
seq., and the rules and regulations of the New Jersey Casino
Control Commission (the "Commission") as they currently
exist or as they hereinafter may be amended (the "Act"),
including without limitation the following:
A. The securities of the Corporation shall always
be subject to redemption by the Corporation, by action of
the Board of Directors, if, in the judgment of the Board of
Directors, such action should be taken, pursuant to
Section 151(b) of the General Corporation Law of Delaware or
any other applicable provision of law, to the extent
necessary to prevent the loss or secure the reinstatement of
any government-issued license or franchise held by the
Corporation or any Subsidiary (as defined in Paragraph E of
this Article IX) to conduct any portion of the business of
the Corporation or such Subsidiary, which license or
franchise is conditioned upon some or all of the holders of
the Corporation's securities possessing prescribed
qualifications. In the event a holder of the Corporation's
securities is found not to possess such prescribed
qualifications by the Commission pursuant to the Act (a
"Disqualified Holder"), such Disqualified Holder shall
84<PAGE>
4
indemnify the Corporation for any and all direct or indirect
costs, including attorneys' fees, incurred by the
Corporation as a result of such holder's continuing
ownership or failure to divest promptly.
B. Except as is otherwise expressly provided in
instruments containing the terms of the Corporation's
securities, which instruments have been approved by the
Commission, so long as the Corporation shall remain a
publicly traded holding company as defined in the Act, in
accordance with N.J.S.A. 5:12-82(d)(7) and (9), all
securities of the Corporation shall be held subject to the
condition that if a holder thereof is found to be a
Disqualified Holder, such holder shall dispose of his
interest in the Corporation within 120 days following the
Corporation's receipt of notice (the "Notice Date") of the
holder's disqualification. Promptly following its receipt
of notice from the Commission that a holder of securities of
the Corporation has been found disqualified, the Corporation
shall either deliver such written notice personally to the
Disqualified Holder, mail it to such Disqualified Holder at
the address shown on the Corporation's books and records, or
use any other reasonable means to provide notice. Failure
of the Corporation to provide notice to a Disqualified
85<PAGE>
5
Holder after making reasonable efforts to do so shall not
preclude the Corporation from exercising its rights.
If any Disqualified Holder fails to dispose of his
securities within 120 days of the Notice Date, the
Corporation may redeem such securities at the lesser of
(i) the lowest closing sale price of such securities between
the Notice Date and the date 120 days after the Notice Date,
or (ii) such holder's original purchase price.
C. So long as the Corporation shall remain a
privately-held intermediary company as defined in the Act,
in accordance with N.J.S.A. 5:12-82(d)(7), (8) and (10), the
Commission shall have the right of prior approval with
regard to transfers of securities, shares, and other
interests in the Corporation and the Corporation shall have
the absolute right to redeem at the market price or purchase
price, whichever is the lesser, any security, share or other
interest in the Corporation in accordance with the Act.
D. So long as the Corporation shall remain an
intermediary company as defined in the Act, in accordance
with N.J.S.A. 5:12-105(e), commencing on the date the
Commission serves notice on the Corporation that a security
holder has been found disqualified, it shall be unlawful for
the Disqualified Holder to (i) receive any dividends or
interest upon any such securities of the Corporation held by
86<PAGE>
6
such holder; (ii) exercise, directly or through any trustee
or nominee, any right conferred by such securities; or
(iii) receive any remuneration in any form, for services
rendered or otherwise, from any Subsidiary of the
Corporation that holds a casino license.
E. For purpose of this Article IX, the term
"Subsidiary" shall have the meaning set forth in N.J.S.A.
5:12-47.
87<PAGE>
EXHIBIT B
Form of Company Affiliate Letter
Gentlemen:
The undersigned, a holder of shares of Common
Stock, par value $.01 per share ("Company Stock"), of
Griffin Gaming & Entertainment, Inc., a Delaware corporation
(the "Company"), is entitled to receive in connection with
the merger (the "Merger") of the Company with and into Sun
Merger Corp., a Delaware corporation, securities (the
"Parent Securities") of Sun International Hotels Limited
("Parent"). The undersigned acknowledges that the
undersigned may be deemed an "affiliate" of the Company
within the meaning of Rule 145 ("Rule 145") promulgated
under the Securities Act of 1933 (the "Act"), although
nothing contained herein should be construed as an admission
of such fact.
If in fact the undersigned were an affiliate under
the Act, the undersigned's ability to sell, assign or
transfer the Parent Securities received by the undersigned
in exchange for any shares of Company Stock pursuant to the
Merger may be restricted unless such transaction is
registered under the Act or an exemption from such
registration is available. The undersigned understands that
such exemptions are limited and the undersigned has obtained
advice of counsel as to the nature and conditions of such
exemptions, including information with respect to the
applicability to the sale of such securities of Rules 144
and 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants
with the Company that the undersigned will not sell, assign
or transfer any of the Parent Securities received by the
undersigned in exchange for shares of Company Stock pursuant
to the Merger except (i) pursuant to an effective
registration statement under the Act or (ii) in a
transaction which, in the opinion of independent counsel
reasonably satisfactory to Parent (the reasonable fees of
which counsel will be paid by Parent) or as described in a
"no-action" or interpretive letter from the Staff of the
Securities and Exchange Commission (the "SEC"), is not
required to be registered under the Act.
The undersigned further represents to and
covenants with the Company that the undersigned has not,
within the preceding 30 days, sold, transferred or otherwise
88<PAGE>
2
disposed of any shares of Company Stock held by it and that
it will not sell, transfer or otherwise dispose of any
Parent Securities received by it in the Merger until after
such time as results covering at least 30 days of combined
operations of the Company and Parent have been published by
Parent, in the form of a quarterly earnings report, an
effective registration statement filed with the SEC, a
report to the SEC on Form 20-F or 6-K, or any other public
filing or announcement which includes such combined results
of operations.
In the event of a sale or other disposition by the
undersigned of Parent Securities pursuant to Rule 145, the
undersigned will supply Parent with evidence of compliance
with such Rule, in the form of a letter in the form of
Annex I hereto and the opinion of counsel or no-action
letter referred to above. The undersigned understands that
Parent may instruct its transfer agent to withhold the
transfer of any Parent Securities disposed of by the
undersigned, but that upon receipt of such evidence of
compliance the transfer agent shall effectuate the transfer
of the Parent Securities sold as indicated in the letter.
The undersigned acknowledges and agrees that
appropriate legends will be placed on certificates
representing Parent Securities received by the undersigned
in the Merger or held by a transferee thereof, which legends
will be removed by delivery of substitute certificates upon
receipt of an opinion in form and substance reasonably
satisfactory to Parent from independent counsel reasonably
satisfactory to Parent (the reasonable fees of which counsel
will be paid by Parent) to the effect that such legends are
no longer required for purposes of the Act.
The undersigned acknowledges that (i) the
undersigned has carefully read this letter and understands
the requirements hereof and the limitations imposed upon the
distribution, sale, transfer or other disposition of Parent
Securities and (ii) the receipt by Parent of this letter is
an inducement and a condition to Parent's obligations to
consummate the Merger.
Very truly yours,
Dated:
89<PAGE>
ANNEX I
TO EXHIBIT B
[Name]
On , the undersigned sold the
securities ("Securities") of Sun International Hotels
Limited ("Parent") described below in the space provided for
that purpose (the "Securities"). The Securities were
received by the undersigned in connection with the merger of
Griffin Gaming & Entertainment, Inc. with and into Sun
Merger Corp.
Based upon the most recent report or statement
filed by Parent with the Securities and Exchange Commission,
the Securities sold by the undersigned were within the
prescribed limitations set forth in paragraph (e) of Rule
144 promulgated under the Securities Act of 1933, as amended
(the "Act").
The undersigned hereby represents that the
Securities were sold in "brokers' transactions" within the
meaning of Section 4(4) of the Act or in transactions
directly with a "market maker" as that term is defined in
Section 3(a)38 of the Securities Exchange Act of 1934, as
amended. The undersigned further represents that the
undersigned has not solicited or arranged for the
solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the
offer or sale of the Securities to any person other than to
the broker who executed the order in respect of such sale.
Very truly yours,
[Space to be provided for description of securities]
90<PAGE>
EXHIBIT (2)(b)
STOCKHOLDER AGREEMENT dated as of
August 19, 1996, among SUN INTERNATIONAL
HOTELS LIMITED, a corporation organized and
existing under the laws of the Commonwealth
of the Bahamas ("Parent"), and the individual
and the other party listed on Schedule A
attached hereto (each, a "Stockholder" and,
collectively, the "Stockholders").
WHEREAS Parent, Sun Merger Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"),
and Griffin Gaming & Entertainment, Inc., a Delaware
corporation (the "Company"), propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as
the same may be amended or supplemented from time to time,
including any amendment pursuant to Section 1.01 thereof,
the "Merger Agreement") providing for the merger of the
Company with and into Sub (the "Merger") upon the terms and
subject to the conditions set forth in the Merger Agreement;
and
WHEREAS each Stockholder owns (beneficially and of
record) (i) the number of shares of Common Stock, par
value $.01 per share, of the Company (the "Common Stock")
set forth opposite its name on Schedule A attached hereto
(such shares of Common Stock owned of record, together with
any other shares of Common Stock acquired by such
Stockholder after the date hereof and during the term of
this Agreement being collectively referred to herein as the
"Subject Shares") and (ii) options issued under the 1994
Stock Option Plan (the "Options") and warrants (the
"Warrants") to acquire the number of shares of Common Stock,
if any, set forth opposite its name on Schedule A attached
hereto, and each Stockholder desires that the Company,
Parent and Sub enter into the Merger Agreement; and
WHEREAS, as a condition to its willingness to
enter into, and to cause Sub to enter into, the Merger
Agreement, Parent has requested that the Stockholders enter
into this Agreement.
NOW, THEREFORE, to induce Parent and Sub to enter
into, and in consideration of Parent and Sub entering into,
the Merger Agreement, and in consideration of the premises
and the representations, warranties and agreements contained
herein, the parties hereto agree as follows:
91<PAGE>
2
SECTION 1. Definitions. Capitalized terms used
but not defined herein shall have the meanings assigned to
such terms in the Merger Agreement.
SECTION 2. Representations and Warranties of the
Stockholders. Each Stockholder hereby, severally and not
jointly, represents and warrants to Parent in respect of
itself as follows:
(a) The Stockholder has all requisite power and
authority to enter into this Agreement and to
consummate the transactions contemplated hereby. This
Agreement has been duly authorized, executed and
delivered by the Stockholder and constitutes a valid
and binding obligation of the Stockholder enforceable
in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation
of the transactions contemplated hereby and compliance
with the terms hereof will not, conflict with, or
result in any violation of, or default (with or without
notice or lapse of time or both) under any provision
of, any trust agreement, loan or credit agreement,
note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise,
license, judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to the
Stockholder or to any of the Stockholder's property or
assets. If the Stockholder is married and any of the
Stockholder's Subject Shares, Options or Warrants
constitute community property or otherwise need spousal
or other approval for this Agreement to be legal, valid
and binding, this Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and
binding agreement of, the Stockholder's spouse or the
person giving such other approval, enforceable against
such spouse or person in accordance with its terms.
(b) The Stockholder is the record and beneficial
owner of, and has good and marketable title to, the
Subject Shares and the Options and Warrants, if any,
set forth opposite its name on Schedule A attached
hereto, free and clear of any claims, liens,
encumbrances, security interests and other restrictions
on rights of disposition whatsoever. As of the date
hereof, the Stockholder does not own, of record or
beneficially, any shares of capital stock of the
Company other than the Subject Shares and the shares of
92<PAGE>
3
Common Stock subject to any Options or Warrants set
forth opposite its name on Schedule A attached hereto.
The Stockholder has the sole right to vote such Subject
Shares, and none of such Subject Shares is subject to
any voting trust or other agreement, arrangement or
restriction with respect to the voting of such Subject
Shares, except as contemplated by this Agreement.
(c) No broker, investment banker, financial
adviser or other person is entitled to any broker's,
finder's, financial adviser's or other similar fee or
commission in respect of this Agreement or in
connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of the
Stockholder.
SECTION 3. Representations and Warranties of
Parent. Parent hereby represents and warrants to the
Stockholders that Parent has all requisite corporate power
and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and
delivery of this Agreement by Parent, and the consummation
of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of
Parent. This Agreement has been duly executed and delivered
by Parent and constitutes a valid and binding obligation of
Parent enforceable in accordance with its terms.
SECTION 4. Agreements to Vote; Grant of
Irrevocable Proxy; Appointment of Proxy. Until the
termination of this Agreement in accordance with Section 11,
each Stockholder, severally and not jointly, agrees as
follows:
(a) At any meeting of stockholders of the Company
or at any adjournment thereof or in any other circum-
stances upon which its vote, consent or other approval
is sought, the Stockholder shall vote (or cause to be
voted) the Stockholder's Subject Shares (i) in favor of
the Merger, the approval and adoption of the Merger
Agreement and the approval of the terms of the Merger
Agreement and each of the other transactions
contemplated by the Merger Agreement and (ii) against
(A) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation,
combination, sale of substantial assets,
reorganization, recapitalization, dissolution,
liquidation or winding up of or by the Company or any
93<PAGE>
4
other takeover proposal as such term is defined in
Section 8.03 of the Merger Agreement (a "Takeover
Proposal") or (B) any amendment of the Company's
Amended and Restated Certificate of Incorporation or
by-laws or other proposal or transaction involving the
Company or any of its subsidiaries, which amendment or
other proposal or transaction would in any manner
impede, frustrate, prevent or nullify the Merger, the
Merger Agreement or any of the other transactions
contemplated by the Merger Agreement or change in any
manner the voting rights of any class of capital stock
of the Company. Subject to Section 13, the Stockholder
further agrees not to commit or agree to take any
action inconsistent with the foregoing.
(b) The Stockholder represents that any proxies
heretofore given in respect of the Stockholder's
Subject Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) Upon Parent's request, the Stockholder hereby
agrees to irrevocably grant to, and appoint, Parent,
and any person who may hereafter be designated by
Parent as permitted under applicable law, and each of
them individually, the Stockholder's proxy and
attorney-in-fact (with full power of substitution), for
and in the name, place and stead of the Stockholder, to
vote the Stockholder's Subject Shares, or grant a
consent or approval in respect of such Subject Shares,
in favor of or against, as the case may be, the matters
set forth in Section 4(a), and to execute and deliver
an appropriate instrument irrevocably granting such
proxy, provided that Parent has obtained all approvals
as may be necessary in connection with the granting of
such proxy to comply with the New Jersey Casino Control
Act.
(d) The Stockholder hereby affirms that any
irrevocable proxy granted pursuant to Section 4(c) will
be given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy will be
given to secure the performance of the duties of the
Stockholder under this Agreement. The Stockholder
hereby further affirms that, if granted pursuant to
such Section, the irrevocable proxy will be coupled
with an interest and may under no circumstances be
revoked. If so granted, the Stockholder hereby
ratifies and confirms all that such irrevocable proxy
94<PAGE>
5
may lawfully do or cause to be done by virtue thereof.
Such irrevocable proxy, if and when executed, is
intended to be irrevocable in accordance with the
provisions of Section 212(e) of the Delaware General
Corporation Law.
SECTION 5. Covenants of the Stockholders. Until
the termination of this Agreement in accordance with
Section 11, each Stockholder, severally and not jointly,
agrees as follows:
(a) Except as provided in the immediately
succeeding sentence, the Stockholder agrees not to
(i) sell, transfer, pledge, assign or otherwise
encumber or dispose of (including by gift)
(collectively, "Transfer"), or enter into any contract,
option or other arrangement (including any profit
sharing arrangement) with respect to the Transfer of,
the Subject Shares, any Option or Warrant or any shares
of Common Stock subject to any Option or Warrant to any
person other than pursuant to the terms of the Merger,
(ii) enter into any voting arrangement, whether by
proxy, power-of-attorney, voting agreement, voting
trust or otherwise, in connection with, directly or
indirectly, any Takeover Proposal or (iii) exercise any
Option or Warrant, in whole or in part, and agrees not
to commit or agree to take any of the foregoing
actions. Notwithstanding the foregoing, the
Stockholder shall have the right, for estate planning
purposes, to Transfer Subject Shares to a transferee
following the due execution and delivery to Parent by
each transferee of a legal, valid and binding
counterpart to this Agreement.
(b) Subject to the terms of Section 13, the
Stockholder shall not, nor shall it permit any
director, officer, employee, investment banker,
attorney or other adviser or representative of the
Stockholder to, (i) solicit, initiate or encourage the
submission of any Takeover Proposal or (ii) participate
in any discussions or negotiations regarding, or
furnish to any person any information with respect to,
or take any other action to facilitate any inquiries or
the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover
Proposal.
95<PAGE>
6
(c) Until after the Merger is consummated or the
Merger Agreement is terminated pursuant to its terms,
the Stockholder shall use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the
other transactions contemplated by the Merger
Agreement.
(d) The Stockholder shall execute and deliver the
letter contemplated by Section 5.11 of the Merger
Agreement.
(e) (i) In the event that the Merger Agreement
shall have been terminated under circumstances
where Parent is or may become entitled to receive
the Termination Fee, the Stockholder shall pay to
Parent on demand an amount equal to 50% of all
profit (determined in accordance with
Section 5(e)(ii)) of the Stockholder from the
consummation of any Takeover Proposal that is
consummated within one year of such termination or
with respect to which a definitive agreement is
executed within one year of such termination.
(ii) For purposes of this Section 5(e), the
profit of the Stockholder from any Takeover
Proposal shall equal (A) the aggregate
consideration received by the Stockholder,
directly or indirectly, pursuant to or in
connection with such Takeover Proposal, valuing
any non-cash consideration (including any residual
interest in the Company) at its fair market value
on the date of such consummation plus (B) the fair
market value, on the date of disposition, of all
Subject Shares, Options and Warrants of the
Stockholder or shares of Common Stock acquired by
the Stockholder upon exercise of any Option or
Warrant disposed of after the termination of the
Merger Agreement and prior to the date of such
consummation less (C) the fair market value of the
aggregate consideration that would have been
issuable or payable to the Stockholder if it had
received the Merger Consideration pursuant to the
Merger Agreement as originally executed, valued as
of immediately prior to the first public
96<PAGE>
7
announcement of the termination of, or the
intention of Parent or the Company to terminate,
the Merger Agreement, as if the Merger had been
consummated on the date of such public
announcement.
(iii) In the event that (x) prior to the
Effective Time, a Takeover Proposal shall have
been made and (y) the Effective Time shall have
occurred and Parent for any reason shall have
increased the amount of Merger Consideration
payable over that set forth in the Merger
Agreement in effect on the date hereof (the
"Original Merger Consideration"), the Stockholder
shall pay to Parent on demand an amount in cash
equal to the product of (i) the sum of the number
of Subject Shares of the Stockholder and the
number of shares of Common Stock subject to
Options and Warrants held by the Stockholder as of
the Effective Time and (ii) 50% of the excess, if
any, of (A) the per share cash consideration or
the per share fair market value of any non-cash
consideration, as the case may be, received by the
Stockholder pursuant to the Merger Agreement, as
amended, determined as of the Effective Time, over
(B) the fair market value of the Original Merger
Consideration determined as of the time of the
first increase in the amount of the Original
Merger Consideration.
(iv) For purposes of this Section 5(e), the
fair market value of any non-cash consideration
consisting of:
(A) securities listed on a national
securities exchange or traded on
the NASDAQ/NMS shall be equal to
the average closing price per share
of such security as reported on
such exchange or NASDAQ/NMS for the
five trading days after the date of
valuation; and
(B) consideration which is other than
cash or securities of the form
specified in clause (A) of this
Section 5(e)(iv) shall be
determined by a nationally
97<PAGE>
8
recognized independent investment
banking firm mutually agreed upon
by the parties within 10 business
days of the event requiring
selection of such banking firm;
provided, however, that if the
parties are unable to agree within
two business days after the date of
such event as to the investment
banking firm, then the parties
shall each select one firm, and
those firms shall select a third
investment banking firm, which
third firm shall make such
determination; provided further,
that the fees and expenses of such
investment banking firm shall be
borne equally by Parent, on the one
hand, and the Stockholders, on the
other hand. The determination of
the investment banking firm shall
be binding upon the parties.
(v) Any payment of profit under this
Section 5(e) may be paid (x) in cash, by wire
transfer of same day funds to an account
designated by Parent, or (y) through a mutually
agreed transfer of securities, to the extent such
transfer is permitted by applicable law and the
transfer of such securities to Parent would not
adversely impact Parent or the value of such
securities, by delivery of such securities,
suitably endorsed for transfer, to Parent or its
designee.
SECTION 6. Stop Transfer; Legend. The Company
agrees with, and covenants to, Parent that the Company shall
not register the transfer of any certificate representing
any Stockholder's Subject Shares, unless such transfer is
made to Parent or Sub or otherwise in compliance with this
Agreement. Each Stockholder agrees that the Stockholder
will tender to the Company, within five business days after
the date hereof, any and all certificates representing the
Stockholder's Subject Shares and the Company will inscribe
or cause to be inscribed upon such certificates the
following legend: "The shares of Common Stock, par value
$0.01 per share, of Griffin Gaming & Entertainment, Inc.
represented by this certificate are subject to a Stockholder
98<PAGE>
9
Agreement dated as of August 19, 1996, and may not be sold,
transferred, pledged, assigned or otherwise encumbered or
disposed of, except in accordance therewith. Copies of such
Agreement may be obtained at the principal executive offices
of Griffin Gaming & Entertainment, Inc.
SECTION 7. Termination of License and Services
Agreement. The License and Services Agreement dated as of
September 17, 1992, as amended, among, The Griffin Group
Inc., the Company and Resorts International Hotel, Inc., is
hereby terminated, effective as of the Effective Time, and
no payments shall be required to be made by any party
thereto with respect to such termination. Parent, the
Company and The Griffin Group Inc. agree that at the
Closing, The Griffin Group Inc., the Surviving Corporation
and Resorts International Hotel, Inc. will enter into a
License and Services Agreement substantially in the form
attached hereto as Exhibit A (the "New License Agreement").
In the event the Stockholders are required to make any
payments under Section 5(e), each Stockholder shall pay to
Parent on demand 50% of the amount equal to the excess of
(a) any consideration received by such Stockholder, directly
or indirectly, in respect of employment, services, licenses
or other agreements or arrangements over (b) the
consideration, if any, that would have been received by such
Stockholder pursuant to the New License Agreement (valuing
any non-cash consideration in accordance with
Section 5(e)(ii)).
SECTION 8. Further Assurances. Each Stockholder
will, from time to time, execute and deliver, or cause to be
executed and delivered, such additional or further consents,
documents, proxies and other instruments and take such
further actions as Parent or Sub may reasonably request for
the purpose of effectively carrying out the transactions
contemplated by this Agreement.
SECTION 9. Assignment. Neither this Agreement
nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the
prior written consent of the other parties, except that
Parent may assign, in its sole discretion, any or all of its
rights, interests and obligations hereunder to any direct or
indirect wholly owned subsidiary of Parent. Any assignment
in violation of the foregoing shall be void. Subject to the
preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns.
99<PAGE>
10
SECTION 10. Public Announcements. Each
Stockholder will consult with Parent before issuing, and
provide Parent with the opportunity to review and comment
upon, any press release or other public statements with
respect to the transactions contemplated by this Agreement,
including the Merger, and shall not issue any such press
release or make any such public statement prior to such
consultation, except as may be required by applicable law or
court process.
SECTION 11. Termination. This Agreement shall
terminate upon the earlier of (a) July 31, 1997 or (b) the
Effective Time; provided, however, that if the Company is
not in breach of any of its obligations under the Merger
Agreement and none of the Stockholders are in breach of any
of their obligations under this Agreement, this Agreement
shall terminate at the time the Merger Agreement is
terminated (i) pursuant to Section 7.01(a) thereof, (ii) by
the Company pursuant to Section 7.01(b)(iv), 7.01(d) or
7.01(e) thereof or (iii) by Parent pursuant to Section
7.01(g) or 7.01(h) thereof. Notwithstanding the foregoing,
Section 5(e) and the last sentence of Section 7 shall
survive the consummation of the Merger or the termination of
the Merger Agreement.
SECTION 12. Miscellaneous.
(a) Amendments. This Agreement may not be
amended except by an instrument in writing signed by
each of the parties hereto.
(b) Notices. All notices and other
communications hereunder shall be in writing and shall
be deemed given if delivered personally, telecopied
(which is confirmed) or sent by overnight courier
(providing proof of delivery) to Parent in accordance
with Section 8.02 of the Merger Agreement and to the
Stockholders at their respective addresses set forth on
Schedule A attached hereto (or at such other address
for a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in
this Agreement to a Section, such reference shall be to
a Section of this Agreement unless otherwise indicated.
The headings contained in this Agreement are for
reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Wherever the words "include", "includes" or "including"
100<PAGE>
11
are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
(d) Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become
effective when one or more counterparts have been
signed by each of the parties and delivered to the
other parties.
(e) Entire Agreement; No Third-Party
Beneficiaries. This Agreement (including the documents
and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the
parties with respect to the subject matter hereof and
(ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies
hereunder.
(f) Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws
of the State of Delaware regardless of the laws that
might otherwise govern under applicable principles of
conflicts of law thereof.
(g) Severability. If any term, provision,
covenant or restriction herein, or the application
thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions herein
and the application thereof to any other circumstances,
shall remain in full force and effect, shall not in any
way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law, and
the parties hereto shall reasonably negotiate in good
faith a substitute term or provision that comes as
close as possible to the invalidated or unenforceable
term or provision, and that puts each party in a
position as nearly comparable as possible to the
position each such party would have been in but for the
finding of invalidity or unenforceability, while
remaining valid and enforceable.
(h) Enforcement. The parties agree that
irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in
101<PAGE>
12
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement
in any court of the United States located in the State
of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties
hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in
the State of Delaware or any Delaware state court in
the event any dispute arises out of this Agreement or
any of the transactions contemplated hereby,
(ii) agrees that such party will not attempt to deny or
defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees
that such party will not bring any action relating to
this Agreement or the transactions contemplated hereby
in any court other than a Federal court sitting in the
state of Delaware or a Delaware state court and
(iv) waives any right to trial by jury with respect to
any claim or proceeding related to or arising out of
this Agreement or any of the transactions contemplated
hereby.
SECTION 13. Stockholder Capacity. No person
executing this Agreement who is or becomes during the term
hereof a director or officer of the Company makes any
agreement herein in his capacity as such director or
officer. Each Stockholder signs solely in his capacity as
the record holder and beneficial owner of such Stockholder's
Subject Shares or Options or Warrants and nothing herein
shall limit or affect any actions taken by a Stockholder in
his capacity as an officer or director of the Company to the
extent specifically permitted by the Merger Agreement.
IN WITNESS WHEREOF, each of Parent and the
Stockholder that is a corporation has caused this Agreement
to be signed by its officer thereunto duly authorized and
each other Stockholder has signed this Agreement, all as of
the date first written above.
102<PAGE>
SUN INTERNATIONAL HOTELS LIMITED,
By: /s/ Charles D. Adamo
Name: Charles D. Adamo
Title: Executive Vice
President, General Counsel
ATLANTIC RESORTS HOLDINGS, INC.
By: /s/ Lawrence Cohen
Name: Lawrence Cohen
Title: Vice President
/s/ Merv Griffin
Merv Griffin
IN WITNESS WHEREOF, each of the Company, The
Griffin Group Inc., and Resorts International Hotel, Inc.
consent to the provisions of Section 7 hereof, and the
Company consents to the provisions of Section 6 hereof, all
as of the date first written above.
GRIFFIN GAMING & ENTERTAINMENT,
INC.,
By: /s/ Thomas E. Gallagher
Name:
Title: President and CEO
THE GRIFFIN GROUP INC.,
By: /s/ Lawrence Cohen
Name: Lawrence Cohen
Title: Vice President
103<PAGE>
RESORTS INTERNATIONAL HOTEL, INC.,
By: /s/ Matthew B. Kearney
Name:
Title:
104<PAGE>
SCHEDULE A
Number
of
Shares Number of
Number of of Shares of Number of
Shares of Common Common Shares of
Common Stock Stock Common
Name and Stock Subject Subject Stock
Address of Owned to to Beneficial
Stockholder of Record Options Warrants ly Owned
Atlantic Resorts 2,125,108 0 746,696 2,871,804
Holdings, Inc.
c/o The Griffin
Group, Inc.
780 Third Avenue
New York, NY
10017
Merv Griffin 0 0 0 2,871,804
c/o The Griffin
Group, Inc.
780 Third Avenue
New York, NY
10017
105<PAGE>
EXHIBIT A
LICENSE AND SERVICES AGREEMENT
THIS LICENSE AND SERVICES AGREEMENT is made and entered into as
of ________________, 1997, by and among THE GRIFFIN GROUP INC., 780
Third Avenue, New York, New York 10017 ("Group") for the name,
likeness and services of Merv Griffin, GRIFFIN GAMING & ENTERTAINMENT,
INC., a Delaware corporation, 1133 Boardwalk, Atlantic City, New
Jersey 08401 [or Survivor Corporation] ("GGE"), and RESORTS
INTERNATIONAL HOTEL, INC., a New Jersey corporation, 1133 Boardwalk,
Atlantic City, New Jersey 08401 ("RIH") (references herein to "the
Company" shall mean both GGE and RIH).
In consideration of the mutual covenants, representations,
warranties, agreements and obligations herein contained and other good
and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Scope of License. (a) Group grants to the Company for the
term of this Agreement, the non-exclusive license to utilize the name
and likeness of Merv Griffin ("Name and Likeness") in connection with
print advertisements, radio and television commercials, and in
connection with limited merchandising, all for the sole purpose of
advertising and promoting (i) the Company's Casino Hotel in Atlantic
City, New Jersey (the "Atlantic City Property"), (ii) the Atlantis
Resort and Casino on Paradise Island, the Bahamas, and (iii) the
Mohegan Sun Casino located in Connecticut managed by an affiliate of
Sun International Hotels, Ltd. (all such properties hereinafter
collectively referred to as the "Casino Properties"), subject to the
terms, conditions and limitations provided herein.
(b) The Company shall not use the Name or Likeness in any
company or business name or in any way other than as expressly
authorized herein. Specifically, but without limitation, neither the
Merv Griffin name nor likeness shall be used in any manner in
connection with any products, services, programs, plans, ideas,
promotions or tie-ins except only as may be expressly approved by
Group in the manner contemplated by Section 8 hereof and then only for
purposes of advertising and promoting the Casino Properties.
(c) The Company shall have the non-exclusive right during
the term of this Agreement to use the shows and gaming concepts
created by Group or Merv Griffin as set forth on Schedule A annexed
hereto ("Shows and Concepts") at the Atlantic City Property.
106<PAGE>
2
2. Services. (a) Group agrees to provide to the Company, for
the term of this Agreement, on a pay or play basis, the non-exclusive
services of Merv Griffin, subject to the performance by the Company of
each and all of its obligations under this Agreement and in particular
the indemnification and insurance obligations contemplated by Sections
5 and 6 hereof, as a host, producer, presenter and featured performer
relative to various shows to be presented at the Casino Properties, to
furnish marketing and consulting services, to participate in radio,
television and print advertisements, and to serve as spokesperson for
the Company, all such services to be subject to Merv Griffin's
availability in respect of other professional or business matters and
to any personal matters. Merv Griffin shall not, however, be required
to make more than two (2) radio commercials and two (2) television
commercials during each contract year of this Agreement with respect
to the Casino Properties. All photo sessions, tapings and appearances
for radio and television commercials shall be scheduled at a mutually
convenient time to Merv Griffin. Group shall, in addition, approve
the makeup and wardrobe person to be used for Merv Griffin on any
television commercial (the cost of which shall be paid solely by the
Company).
(b) In connection with all of the services set forth above
and elsewhere herein and subject to reimbursement for certain costs
and expenses as expressly set forth herein, Group shall provide such
personnel in addition to Merv Griffin, and provide such overhead
expenses, as are necessary to carry out its duties hereunder.
3. Term. The rights and license granted hereunder shall be
effective as of the date hereof and shall continue in force (unless
earlier terminated in accordance with the provisions of this
Agreement) until September 16, 2001.
4. Compensation. Upon the execution of this Agreement, GGE is
paying to Group the amount of $10,973,000, which amount represents
compensation in the amount of $2,546,000 for the services hereunder
for the period September 17, 1997 to September 16, 1998, $2,673,000
for the services hereunder for the period September 17, 1998 to
September 16, 1999, $2,807,000 for the services hereunder for the
period September 17, 1999 to September 16, 2000, and $2,947,000 for
the services hereunder for the period September 17, 2000 to September
16, 2001. Group acknowledges payment under the Prior License
Agreement (as defined in Section 19 hereof) for the period from the
date hereof to September 16, 1997.
5. Indemnification; Insurance. (a) The Company hereby
indemnifies and agrees to defend and hold harmless forever Group, and
its officers, directors, shareholders, employees, agents and
representatives, and Merv Griffin against any and all claims, demands,
losses, costs and expenses (including attorneys' fees),
investigations, damages, judgments, penalties, and liabilities of any
kind or nature whatsoever, directly or indirectly arising out of,
resulting from, relating to or connected with (i) any use of the Name
and Likeness by the Company or any person or entity obtaining the
right to use the Name and Likeness directly or indirectly
107<PAGE>
3
from the Company, or (ii) any breach of, or alleged breach of, or
action which is inconsistent with, any representation, warranty or
covenant of the Company hereunder, or (iii) any actual or alleged
damage or any injury resulting from, occurring on the premises of,
relating to or in any way connected with the Casino Properties or its
promotions, or (iv) any actual or alleged inaccuracies or
misrepresentations in connection with the use of the Name and Likeness
by the Company. The Company shall promptly upon receipt of notice of
any such claim engage counsel approved by Group (which approval shall
not be unreasonably withheld) and defend such claim at the Company's
sole cost and expense (which cost and expense must be reasonable); or,
if the Company shall fail or refuse to do so, Group, at its option,
may engage counsel and defend such claim at the Company's sole cost
and expense, which cost and expense the Company shall pay to Group
within five (5) business days upon being invoiced therefor.
(b) The Company agrees, at its sole cost and expense, to
deliver to Group on or before execution of this Agreement and to
maintain during the term of this Agreement and for any applicable
statute of limitations period thereafter (but in no event less than
six (6) years after the term of this Agreement) an endorsement naming
Group and Merv Griffin, individually, as named insureds on all
insurance policies covering the Company including, without limitation,
with respect to comprehensive public liability and personal injury
insurance, each such policy in amounts no less than Two Million
Dollars ($2,000,000.00) per occurrence and an umbrella coverage of no
less than Twenty Five Million Dollars ($25,000,000.00) against all
such liability. The Company will submit to Group certified copies,
signed by a legal representative of the insurance company, of fully
paid policies of insurance as specified above naming Group and Merv
Griffin, individually, each as an insured party, and requiring that
the insurer shall not terminate or materially modify such instance
without written notice to Group and Merv Griffin, individually, at
least sixty (60) days in advance thereof. Without limiting any rights
or remedies of Group or Merv Griffin hereunder, all rights granted
hereunder to the Company will terminate automatically upon any failure
by the Company to maintain the insurance required hereby.
6. Directors and Officers Indemnification. (a) The Company
shall indemnify Merv Griffin and any officer, director or employee of
Group who at any time during the term of this Agreement serves as an
officer or director of GGE or any subsidiary or affiliate thereof
(each an "Indemnitee" and collectively "Indemnitees") to the fullest
extent permitted by Delaware law in effect as the date hereof against
all costs, expenses, liabilities and losses (including, without
limitation, attorneys' fees, judgments, fines, penalties, ERISA excise
taxes and amounts paid in settlement) reasonably incurred by an
Indemnitee in connection with a Proceeding. For the purpose of this
Section 6, a "Proceeding" shall mean any action, suit or proceeding by
reason of the fact that such person is or was an officer, director or
employee of GGE or any subsidiary or affiliate hereof or is or was
serving as an officer, director, member, employee, trustee or agent of
any other entity at the request of GGE.
108<PAGE>
4
(b) The Company shall advance to each Indemnitee all
reasonable costs and expenses incurred by such Indemnitee in
connection with a Proceeding within 20 days after such receipt by the
Company of a written request for such advance. Such request shall
include an itemized list of the costs and expenses and an undertaking
by such Indemnitee to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified
against such costs and expenses.
(c) No Indemnitee shall be entitled to indemnification
under this Section 6 unless such Indemnitee meets the standard of
conduct specified in the Delaware General Corporation Law.
Notwithstanding the foregoing, to the extent permitted by law neither
Section 145 (d) of the Delaware General Corporation Law nor any
similar provision shall apply to indemnification under this Section 6,
so that if an Indemnitee in fact meets the applicable standard of
conduct, he shall be entitled to such indemnification whether or not
GGE (whether by the board of directors, the shareholders, independent
legal counsel or other party) determines that indemnification is
proper because such Indemnitee has met such applicable standard of
conduct. Neither the failure of GGE to have made such a determination
prior to the commencement by an Indemnitee of any suit or arbitration
proceeding seeking indemnification nor a determination by GGE that
such Indemnitee has not met such applicable standard of conduct shall
create a presumption that such Indemnitee has not met the applicable
standard of conduct.
(d) The Company shall not settle any proceeding or claim in
any manner which would impose on any Indemnitee any penalty or
limitation without such Indemnitee's prior written consent. Neither
the Company nor any Indemnitee will unreasonable withhold its or his
consent to any proposed settlement.
(e) GGE shall maintain beginning with the date hereof and
continuing for a period of six (6) years following the expiration or
termination of this Agreement directors' and officers' liability
insurance policies as in effect on the date hereof or replacement
policies substantially equivalent in amount and scope of coverage and
shall include and maintain in its Certificate of Incorporation and
Bylaws directors' and officers' liability indemnification provisions
not less favorable than those in effect on the date hereof.
7. Copyright, Trademark, Goodwill. (a)
Except as otherwise expressly provided in Section 1 of this
Agreement, the Company has no rights in and shall not apply for,
register, use or claim any rights in any copyright, trademark, service
mark, trade name or business name incorporating the Name and Likeness
or any element thereof or in any of the Shows and Concepts. The
Company acknowledges and agrees that the concept, format, music and
scripts of such Shows and Concepts
109<PAGE>
5
are the property of Group. The Company further agrees to offer to
Group at the conclusion of its use of the Shows and Concepts any and
all sets, costumes, gamewalls, recorded music, and other materials
customarily returned by the Company to a producer of such creative
properties.
(b) The Company understands and agrees that this license is
non-exclusive and that Group and Merv Griffin in its and his sole
discretion has the right to utilize the rights described herein and to
grant other licenses in and to such rights on any terms and conditions
it or he deems appropriate. The Company acknowledges that the use of
the Name and Likeness outside the scope of this Agreement is an
infringement of Group's or Merv Griffin's right, title and interest in
and to the Name and Likeness, and the Company expressly covenants that
during the term of this Agreement, and after the expiration or
termination hereof, the Company shall not, directly or indirectly,
commit any act of infringement of such Name and Likeness or take any
other action in derogation thereof.
(c) The Company recognizes the great value of the publicity
and goodwill associated with the Name and Likeness, that the Name and
Likeness have acquired a secondary meaning in the mind of the public
whereby the Name and Likeness are identified exclusively with Group
and Merv Griffin and, in such connection, the Company acknowledges
that such goodwill exclusively belongs to Group and Merv Griffin
except only to the limited extent of the specific rights granted to
the Company hereunder.
8. Approvals. The Company agrees that each use of the Name
and Likeness, whenever practicable, shall be subject to the prior
written approval of Group, which shall not, however, be unreasonably
withheld. The Company agrees, whenever practicable, to furnish Group
for its prior written approval, the complete text and layout and all
artwork and graphics of all print advertisements, promotional material
and any other publicity, a list of the publications in which such
advertisements or publicity may be issued, the complete script of any
radio commercial, and complete script and storyboard for any
television commercial in which the Name and Likeness will be used or
embodied, in each case before any use of the Name and Likeness in
connection therewith. Each radio and television commercial shall be
played in full for Group's written approval prior to any public
broadcast thereof, which approval shall not be unreasonably withheld.
Any proposed change in any approved item must be resubmitted for the
prior written approval of Group. Group shall have twenty (20)
business days following receipt of any request for approval to approve
or reject same; provided that Group shall be deemed to have approved
such submission unless Group disapproves same in writing within such
twenty (20) day period, and Group or Merv Griffin may agree to waive
or shorten the required submission period on a case by case basis but
any such agreement or waiver shall apply only to the submissions
specified therein.
9. Additional Undertakings of the Company. The Company
agrees and covenants that:
110<PAGE>
6
(a) It will not attack the title of Group in and to the
Name and Likeness, nor will it attack the right of Group to grant the
license granted hereunder or the legality of the terms hereof;
(b) It will not harm, misuse or bring into disrepute the
Name and Likeness;
(c) It will utilize the Name and Likeness and otherwise
conduct its business or cause the same to be done only in an ethical,
lawful, first-class and high quality manner and in accordance with the
terms and intent of this Agreement;
(d) It will not create any expense or incur any liability
chargeable to Group; and
(e) It will comply with all applicable laws, regulations,
ordinances and other requirements relating or pertaining to the
advertising, promotion and operation of the Casino Properties; it will
obtain all necessary permits, licenses and other consents for the
operation of its business; and it will comply with the requests of any
regulatory agencies which shall have jurisdiction over the Casino
Properties.
10. Additional Representations and Warranties of the Company.
GGE and RIH each represent and warrant that:
(a) GGE is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware; RIH is a
corporation duly organized, validly existing and in good standing
under the laws of the State of New Jersey; each of GGE and RIH has
full corporate power and authority to conduct its business as now
being conducted and as contemplated hereby; is duly qualified to do
business in each jurisdiction in which the nature of the business
conducted by it requires such qualification; and holds all necessary
licenses and permits from federal, state, county and local authorities
for the proper conduct of said business;
(b) There is not outstanding or threatened any order, writ,
injunction, decree or legal or administrative proceeding of any kind
against or affecting either GGE or RIH which would impair the ability
of either GGE or RIH to perform its obligations hereunder;
(c) Each of GGE and RIH is in compliance with all
applicable federal, state, county and municipal laws, including any
such laws which require the obtaining of licenses or permits to
conduct it business; and
(d) Each of GGE or RIH has the unrestricted right, power
and authority to enter into this Agreement and perform its obligations
hereunder.
111<PAGE>
7
11. Representations and Warranties of Group. Group
represents and warrants that:
(a) Group is a corporation duly organized, validly existing
and in good standing under the laws of the State of Connecticut; has
full power and authority to conduct its business as now being
conducted and as contemplated hereby; is duly qualified to do business
in each jurisdiction necessary in order for Group to fully perform
under this Agreement; and holds all necessary licenses and permits
from federal, state, county and local authorities for the proper
conduct of said business;
(b) There is not outstanding or threatened any order, writ,
injunction, decree or legal or administrative proceeding of any kind
against or affecting Group which would impair Group's ability to
perform its obligations hereunder;
(c) Group is in compliance with all applicable federal,
state, county and municipal laws, including any such laws which
require the obtaining of licenses or permits to conduct its business;
and
(d) Group has the unrestricted right, power and authority
to enter into this Agreement and perform its obligations hereunder.
12. Termination by Group.
(a) This Agreement shall terminate, at Group's option, and
Merv Griffin may at his option terminate all of his obligations under
this Agreement, upon written notice to the Company, without prejudice
to any other rights or remedies which Group or Merv Griffin may have,
whether under the provisions of this Agreement, in law, or in equity
or otherwise, upon the occurrence of any one or more of the following
events at any time during the term hereof:
(i) if any governmental agency shall determine that
the advertising or promotion or operation of the Casino Properties is
materially improper, and as a consequence thereof, any material fine,
penalty, sanctions or liability should be imposed against the Company
or any officer or director thereof; or
(ii) if the Company shall be unable to pay its debts
when due, or shall make any assignment for the benefit of creditors,
or shall file or permit to be filed any petition under the bankruptcy
or insolvency laws of any jurisdiction or shall have or suffer a
receiver or trustee to be appointed for its business or property, or
be adjudicated a bankrupt or an insolvent, or an order for relief
shall have been entered (whether voluntary or involuntary) under the
federal Bankruptcy Code with respect to either GGE or RIH; or
112<PAGE>
8
(iii) if (notwithstanding any other provision hereof)
as determined by Group in good faith there is a substantial likelihood
of damage to the name or reputation of Group or Merv Griffin because
of its or his association with the Company; or
(iv) if the Company breaches any of its other
material covenants, representations, warranties, conditions,
agreements or obligations hereunder and shall fail to cure such breach
within sixty (60) days following written notice of such breach.
Upon any such termination, Group shall be entitled to retain all
monies paid to it hereunder, including under Section 4 hereof, and
shall be entitled to be paid all amounts owing to it as of the date of
termination.
(b) Upon the expiration of this Agreement or in the event
of any termination of this Agreement on account of any of the matters
set forth in this Section 12:
(i) the Company's representations, warranties,
covenants and obligations, and the Company's indemnification of Group
hereunder, shall survive such expiration or termination and the
insurance provided for in Section 5(b) and Section 6 shall be
maintained in full force and effect as therein provided;
(ii) The Company shall as soon as practicable and in
no event later than 60 days following such termination immediately
cease any and all use of the Name and Likeness in any manner
whatsoever and shall in addition take the a actions specified in
clauses (a) through (d) of Section 18 hereof;
(iii) All rights granted by Group hereunder shall
revert to Group; and the Company shall reimburse Group or Merv Griffin
for expenses incurred but not yet reimbursed, and pay any other
compensation and benefits to which Merv Griffin may be entitled under
any applicable plans, programs and agreements of the Company.
13. Termination by the Company. This Agreement shall
terminate, at the Company's option, in the case of any event described
in clause (a) of this Section 13 upon one hundred and twenty (120)
days prior written notice to Group, in the case of any event described
in clauses (b) through (f) of this Section 13 , upon 30 days prior
written notice to Group, and in the case of any event described in
clause (g) of this Section 13, without prior notice, without prejudice
to any other rights or remedies which the Company may have, whether
under the provisions of this Agreement, in law or in equity or
otherwise, upon the occurrence of any one or more of the following
events:
113<PAGE>
9
(a) in the event of the death of Merv Griffin, or if by
reason of permanent mental or physical disability Merv Griffin is
unable to provide his services as required under this Agreement; or
(b) if Group or Merv Griffin shall be unable to pay their
debts when due, or shall make any assignment for the benefit of
creditors, or shall file or permit to be filed any petition under the
bankruptcy or insolvency laws of any jurisdiction, county or place, or
shall have or suffer a receiver or trustee to be appointed for its
business or property or be adjudicated a bankrupt or an insolvent, or
an order for relief shall have been entered (whether voluntary or
involuntary) under the federal Bankruptcy Code with respect to either
Group or Merv Griffin; or
(c) if Group or Merv Griffin shall be convicted of, or
enter a plea of no contest to any indictment for, a felony involving
moral turpitude under the laws of the United States or any state, by
any court of competent jurisdiction; or
(d) if Group or Merv Griffin shall be convicted of, or
enter a plea of no contest to any indictment or any other crime under
the laws of the Untied States or any state, which includes as an
essential element thereof, larceny, fraud, misappropriation or self-
dealing; or
(e) if Group breaches any of its other material covenants,
representations, warranties, conditions, agreements or obligations
hereunder and shall fail to cure such breach within sixty (60) days
following written notice of such breach; or
(f) if any governmental authority having jurisdiction over
the Company shall enter a final judgment as to which all appeals have
been exhausted, to the effect that the implementation of this
Agreement or any material provisions thereof is in violation of any
applicable law, order or regulation and as a consequence thereof any
material fine, penalty, sanctions or liability shall be imposed
against the Company or any officer or director thereof, or if any such
governmental authority shall enter a judgment which is not final to
such effect, if such judgment is obtained on the basis of any action
initiated by a person not a party to this Agreement and on the basis
of alleged misconduct by Merv Griffin or Group constituting a breach
by either of them of the terms of this Agreement; or
(g) the Company shall have determined in its sole
discretion to terminate the Agreement.
Upon any termination of this Agreement on account of any of the
matters set forth in this Section 13, each of the Company's financial
obligations to Group pursuant to this Agreement shall thereupon
terminate and neither party shall thereupon have any continuing rights
or obligations under this Agreement, except for the Company's
indemnification and insurance obligations, which shall continue,
without modification or limitation, in the manner set forth in
Sections 6
114<PAGE>
10
and 7 of this Agreement, with respect to any and all matters occurring
prior to such termination, and except that:
(i) within 60 days after such termination the
Company shall cease the use of the Name and Likeness;
(ii) within 60 days after such termination the
Company shall terminate all print advertisements, and radio and
television commercials, utilizing the Name and Likeness;
(iii) within 60 days after such termination the
Company shall remove or otherwise delete or obliterate from any real
or personal property constituting any part of or asset belonging to or
used in connection with any of the Casino Properties any image
display, logo and other reference to or use of the Name and Likeness;
and
(iv) the Company after such termination shall have
the right to liquidate in the ordinary course of its business or
otherwise dispose of all remaining stocks or promotional materials and
merchandise bearing the Name and Likeness.
Upon any such termination, Group shall be entitled to retain all
monies paid to it hereunder, including under Section 4 hereof, and
shall be entitled to be paid all amounts owing to it under Section 17
hereof as of the date of termination.
14. Injunctive and Other Relief. (a) The Company recognizes
the unique and special nature and value of the use of the Name and
Likeness and agrees that it is extremely difficult and impractical to
ascertain the extent of the detriment to Group which would be caused
in the event of any use of the Name and Likeness contrary to the terms
of this Agreement. The Company furthermore acknowledges that Group
and Merv Griffin will have no adequate remedy at law in the event the
Company uses the Name and Likeness in any way not permitted hereunder,
and that Group and Merv Griffin shall be entitled to equitable relief
by way of temporary and permanent injunction, and such other and
further relief as any court of competent jurisdiction may deem just
and proper, in addition to any and all other remedies provided for
herein and available to Group or Merv Griffin at law or equity.
(b) Group recognizes the unique and special nature and
value of the use of the Name and Likeness and agrees that it is
extremely difficult and impractical to ascertain the extent of the
detriment to the Company which would be caused in the event the use of
the Name and Likeness as provided in this Agreement were not to be
available to the Company. Group furthermore acknowledges that the
Company will have no adequate remedy at law in the event the Name and
Likeness is not available to the Company as provided in this Agreement
and that the Company shall be entitled to equitable relief by way of
115<PAGE>
11
temporary and permanent injunction, and such other and further relief
as any court of competent jurisdiction may deem just and proper, in
addition to any and all other remedies provided for herein and
available to the Company at law or equity.
15. Reservation of Rights. Group retains all rights not
expressly and exclusively conveyed herein.
16. Performances. The specific terms regarding shows to be
hosted or produced by Merv Griffin at the Atlantic City Property or in
which Merv Griffin is to be featured performer shall be subject to
good faith negotiation; provided, however, that the Company shall
provide and pay for all production personnel, equipment, materials,
dressing rooms, musicians, props, staging, lighting, sound systems,
and other goods and services as required by Group to set up, produce
and close the show; sufficient suites, other accommodations, food and
beverages for the show's entourage; rehearsal time, stage, lighting,
sound and personnel; and a minimum of twenty-five (25) complimentary
tickets. Group shall have sole approval of all credits and billing,
any opening and closing act, any sponsors and all publicity and
advertising in connection with each show. The Company shall not
permit any taping, filming, recording or any collateral use whatsoever
of any such show or any element thereof other than by Group.
17. Business, Travel and Other Expenses.
The Company shall reimburse Group promptly upon invoice, or, if
requested by Group, shall make the arrangements, advance the funds and
pay directly, in connection with Group's personnel's and Merv
Griffin's need to travel for personal appearances or any advertising,
publicity, promotional or other services specifically requested
hereunder, all required round trip transportation to and from all
destinations (including all required air and ground transportation),
hotel accommodations, food and other living and incidental expense,
which in the case of Merv Griffin, shall be of a first class quality
consistent with his celebrity status. All such payments should be in
addition to any other payments set forth herein or in any other
agreement between the parties. Any legal, consulting fees or other
expenses incurred in connection with the preparation and negotiation
of this Agreement shall be paid by the Company.
18. Sale of Resort Property. In the event of any sale or
other disposition by the Company of any of the Casino Properties, and
as soon thereafter as practicable, and in no event later than 60 days
following such sale (120 days if in connection with such disposition,
the Company has entered into an agreement whereby the Company is to
provide operating services to such Casino Property), the Company
shall:
(a) cease the use of the Name and Likeness with respect to
such Casino Property;
116<PAGE>
12
(b) terminate all print advertisements, and radio and
television commercials, utilizing the Name and Likeness with respect
to such Casino Property;
(c) remove or otherwise delete or obliterate from any real
or personal property constituting any part of or asset belonging to or
used in connection with such Casino Property any image display, logo
and other reference to or use of the Name and Likeness; and
(d) liquidate in the ordinary course of its business or
otherwise dispose of all remaining stocks of promotional materials and
merchandise bearing the Name and Likeness.
19. Termination of Prior License and Services Agreement. Group
and the Company agree that the License and Services Agreement dated as
of September 17, 1992, as amended (the "Prior License Agreement"),
among Group, GGE and RIH shall terminate as of the date hereof.
Notwithstanding any provision of the Prior License Agreement to the
contrary, no payments shall be required to be made by any party
thereto with respect to such termination. Notwithstanding the
termination of the Prior License Agreement, (i) GGE shall pay Group
all monies owing to Group thereunder and (ii) GGE shall be required to
continue, without modification or limitation, the indemnification and
insurance obligations provided for in Sections 7 and 8 of the Prior
License Agreement for acts prior to such termination.
20. Notices. All notices and statements provided for herein
shall be in writing and are to be sent to the respective parties at
the addresses first set forth above, unless otherwise provided in
writing.
21. Relationship of Parties. This Agreement does not constitute
and shall not be construed as constituting a partnership or joint
venture or agency relationship between any of the parties hereto. The
Company shall have no right to obligate or bind Group in any manner
whatsoever, and nothing herein contained shall give or is intended to
give any rights of any kind to any third person.
22. Non-Assignability. No party to this Agreement, without each
other party's prior written approval, may sell, sublicense, lease,
pledge as collateral, give, assign, franchise or otherwise transfer
any of its rights hereunder or any interest herein, directly in any
manner whatsoever. Neither this Agreement nor any of the rights of
any party hereunder shall devolve by operation of law or otherwise
upon any assignee, receiver, liquidator, trustee or other party.
23. Construction; Forum. This Agreement shall be construed in
accordance with the laws of the State of New York as applied to
contracts executed and intended to be fully performed therein. THE
COMPANY HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY NEW
YORK STATE COURT OR ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK IN
CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR
117<PAGE>
13
RELATING TO THIS AGREEMENT, AND SUCH COURTS ARE THE EXCLUSIVE COURTS
IN WHICH ANY SUCH ACTION MAY BE BROUGHT AND DECIDED.
24. Severability. If any provision or portion of this Agreement
shall be invalid or unenforceable for any reason, there shall be
deemed to be made such minor changes (and only such minor changes) in
such provision or portion of this Agreement as are necessary to make
it valid and enforceable. The invalidity or unenforceability of any
provision or portion of this Agreement shall not affect the validity
or enforceability of any other provision or portion of this Agreement.
25. Counterparts. This Agreement may be executed in several
counterparts, each one of which shall be an original as to the signing
party and all of which shall constitute one and the same Agreement.
26. Waiver; Entire Agreement; Amendment. The waiver by any
party of any breach of this Agreement shall not in any way be
construed as a waiver by such party of any subsequent breach, whether
similar or not, of this Agreement. This Agreement sets forth the
entire understanding and agreement of the parties hereto with respect
to the subject matter hereof and supersedes all existing agreements
and understandings between them. This Agreement may not be altered,
amended or modified in any way except upon the agreement of the
parties hereto in writing.
27. Legal Fees. If any legal action, arbitration, or other
proceeding is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with this Agreement, the successful or prevailing party
shall be entitled to recover reasonable attorney's fees and other
costs it incurred in that action or proceeding, in addition to any
other relief to which it may be entitled.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.
THE GRIFFIN GROUP INC.
By:_________________________
GRIFFIN GAMING & ENTERTAINMENT, INC.
By:_________________________
RESORTS INTERNATIONAL HOTEL, INC.
By:_________________________
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14
I hereby affirm that The Griffin Group Inc. is fully authorized
to make and perform each of the undertakings of this Agreement,
particularly as they relate to the licensing of my name and likeness
and the furnishing of related services by me.
____________________________
MERV GRIFFIN
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15
Schedule A
- Griffin Games
- Funderful
- Winfall
- Merv Griffin's Star Card
120<PAGE>
EXHIBIT (2)(c)
STOCKHOLDER AGREEMENT dated as of
August 19, 1996, among GRIFFIN GAMING &
ENTERTAINMENT, INC., a Delaware corporation
(the "Company"), and SUN INTERNATIONAL
INVESTMENTS LIMITED (the "Stockholder").
WHEREAS Sun International Hotels Limited, a
corporation organized and existing under the laws of the
Commonwealth of the Bahamas ("Parent"), Sun Merger Corp., a
Delaware corporation and a wholly owned subsidiary of Parent
("Sub"), and the Company propose to enter into an Agreement
and Plan of Merger dated as of the date hereof (as the same
may be amended or supplemented from time to time, including
any amendment pursuant to Section 1.01 thereof, the "Merger
Agreement") providing for the merger of the Company with and
into Sub (the "Merger") upon the terms and subject to the
conditions set forth in the Merger Agreement; and
WHEREAS the Stockholder owns Ordinary Shares, par
value $.001 per share, of Parent (the "Ordinary Shares");
and
WHEREAS, as a condition to its willingness to
enter into, the Merger Agreement, the Company has requested
that the Stockholder enter into this Agreement.
NOW, THEREFORE, to induce the Company to enter
into, and in consideration of the Company entering into, the
Merger Agreement, and in consideration of the premises and
the representations, warranties and agreements contained
herein, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used
but not defined herein shall have the meanings assigned to
such terms in the Merger Agreement.
SECTION 2. Representations and Warranties of the
Stockholder. The Stockholder hereby represents and warrants
to the Company that it has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been
duly authorized, executed and delivered by the Stockholder
and constitutes a valid and binding obligation of the
Stockholder enforceable in accordance with its terms. The
execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and
121<PAGE>
2
compliance with the terms hereof will not, conflict with, or
result in any violation of, or default (with or without
notice or lapse of time or both) under any provision of, any
trust agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise, license, judgment, order,
notice, decree, statute, law, ordinance, rule or regulation
applicable to the Stockholder or to any of the Stockholder's
property or assets.
SECTION 3. Representations and Warranties of the
Company. The Company hereby represents and warrants to the
Stockholder that the Company has all requisite corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company, and
the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action
on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable in
accordance with its terms.
SECTION 4. Voting Agreements. (a) Until the
termination of this Agreement in accordance with Section 8,
the Stockholder agrees to vote the Ordinary Shares then
owned of record by it, or grant a consent or approval in
respect of such Ordinary Shares, at any meeting of
stockholders of Parent or at any adjournment thereof or in
any other circumstances upon which its vote, consent or
other approval is sought, (i) in favor of any amendments to
Parent's Articles of Association that add such provisions as
may be necessary as a result of consummation of the
transactions contemplated by the Merger Agreement to comply
with the New Jersey Casino Control Act and (ii) if the
Merger Agreement is amended pursuant to Section 1.01
thereof, in favor of the approval and adoption of the Merger
Agreement and the approval of the terms of the Merger
Agreement and each of the transactions contemplated by the
Merger Agreement.
SECTION 5. Further Assurances. The Stockholder
will, from time to time, execute and deliver, or cause to be
executed and delivered, such additional or further consents,
documents and other instruments and take such further
actions as the Company may reasonably request for the
purpose of effectively carrying out the transactions
contemplated by this Agreement.
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3
SECTION 6. Assignment. Neither this Agreement
nor any of the rights, interests or obligations hereunder
shall be assigned by either of the parties hereto without
the prior written consent of the other party. Any
assignment in violation of the foregoing shall be void.
Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and
assigns.
SECTION 7. Termination. This Agreement shall
terminate upon the earlier of (a) the termination of the
Merger Agreement or (b) the Effective Time of the Merger.
SECTION 8. Miscellaneous.
(a) Amendments. This Agreement may not be
amended except by an instrument in writing signed by
each of the parties hereto.
(b) Notices. All notices and other
communications hereunder shall be in writing and shall
be deemed given if delivered personally, telecopied
(which is confirmed) or sent by overnight courier
(providing proof of delivery) to the Company in
accordance with Section 8.02 of the Merger Agreement
and to the Stockholder care of Parent in accordance
with Section 8.02 of the Merger Agreement (or at such
other address for a party as shall be specified by like
notice).
(c) Interpretation. When a reference is made in
this Agreement to a Section, such reference shall be to
a Section of this Agreement unless otherwise indicated.
The headings contained in this Agreement are for
reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Wherever the words "include", "includes" or "including"
are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
(d) Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become
effective when one or more counterparts have been
signed by each of the parties and delivered to the
other party.
123<PAGE>
4
(e) Entire Agreement; No Third-Party
Beneficiaries. This Agreement (including the documents
and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the
parties with respect to the subject matter hereof and
(ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies
hereunder.
(f) Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws
of the Commonwealth of the Bahamas regardless of the
laws that might otherwise govern under applicable
principles of conflicts of law thereof.
(g) Severability. If any term, provision,
covenant or restriction herein, or the application
thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions herein
and the application thereof to any other circumstances,
shall remain in full force and effect, shall not in any
way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law, and
the parties hereto shall reasonably negotiate in good
faith a substitute term or provision that comes as
close as possible to the invalidated or unenforceable
term or provision, and that puts each party in a
position as nearly comparable as possible to the
position each such party would have been in but for the
finding of invalidity or unenforceability, while
remaining valid and enforceable.
(h) Enforcement. The parties agree that
irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this
124<PAGE>
5
Agreement, this being in addition to any other remedy
to which they are entitled at law or in equity.
IN WITNESS WHEREOF, each of the Company and the
Stockholder has caused this Agreement to be signed by its
officer thereunto duly authorized as of the date first
written above.
GRIFFIN GAMING & ENTERTAINMENT,
INC.,
By: /s/ Thomas E. Gallagher
Name:
Title: President and CEO
SUN INTERNATIONAL INVESTMENTS
LIMITED,
By: /s/ Charles D. Adamo
Name: Charles D. Adamo
Title: Authorized Signatory
125<PAGE>
