Agreement and Plan of Merger - Sport Entertainment Enterprises Inc. and CKX Inc.
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of March 25,
2005, is entered into between Sports Entertainment Enterprises, Inc., a public
company incorporated in the State of Colorado ("SPEA" or the "Company"), and
CKX, Inc., a Delaware corporation and a wholly owned subsidiary of the Company
("CKX"). RECITALS
WHEREAS, the Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado;
WHEREAS, in connection with the transaction contemplated herein, the Board
of Directors of the Company has unanimously approved an amendment of the
Articles of Incorporation of the Company in order to increase the authorized
number of the Company's shares of capital stock from one hundred million
(100,000,000) shares of common stock, no par value, and five million (5,000,000)
shares of preferred stock, no par value, to two hundred seventy-five million
(275,000,000) shares of capital stock, consisting of two hundred million
(200,000,000) shares of common stock, par value $0.01 per share (the "SPEA
Common Stock"), and seventy-five million (75,000,000) shares of blank check
preferred stock, par value $0.01 per share (the "SPEA Preferred Stock,"as
described in more detail below), of which sixty-six million five hundred
thirty-one thousand six hundred and thirty-seven (66,531,637) shares of SPEA
Common Stock are issued and outstanding, no shares of Series A Convertible
Redeemable Preferred Stock of the Company (the "SPEA Series A Preferred Stock")
are issued and outstanding, one million four hundred and ninety-one thousand
eight hundred and seventeen (1,491,817) shares of Series B Convertible Preferred
Stock of the Company (the "SPEA Series B Preferred Stock") are issued and
outstanding, and one (1) share of Series C Convertible Preferred Stock of the
Company (the "SPEA Series C Preferred Stock") is issued and outstanding;
WHEREAS, CKX is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and on the date of this
Agreement has authority to issue two hundred million (200,000,000) shares of
common stock, par value $0.01 per share (the "CKX Common Stock"), and
seventy-five million (75,000,000) shares of blank check preferred stock, par
value $0.01 per share (the "CKX Preferred Stock"), of which 100 shares of CKX
Common Stock are issued and outstanding and owned by the Company;
WHEREAS, the respective Boards of Directors of the Company and CKX and the
stockholder of CKX have determined that, for purposes of effecting the
reincorporation of the Company in the State of Delaware, it is advisable, to the
advantage of and in the best interests of CKX and its stockholder and the
Company and its shareholders that the Company merge with and into CKX upon the
terms and subject to the conditions herein provided (the "Reincorporation
Merger");
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WHEREAS, the parties intend, by executing this Agreement, to adopt a plan
of reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code"), and to cause the Reincorporation Merger to
qualify as a reorganization under the provisions of Section 368 of the Code; and
WHEREAS, the respective Boards of Directors of the Company and CKX and the
stockholder of CKX have unanimously adopted and approved this Agreement, and the
Board of Directors of the Company has directed that this Agreement be submitted
for approval by vote of the holders (the "Shareholders") of shares of (a) SPEA
Common Stock, (b) SPEA Series A Preferred Stock, (c) SPEA Series B Preferred
Stock, and (d) SPEA Series C Preferred Stock.
NOW, THEREFORE, in consideration of the premises and of the agreements of
the parties hereto contained herein, the parties hereto agrees as follows:
ARTICLE I
THE REINCORPORATION MERGER; EFFECTIVE TIME
1.1. The Reincorporation Merger. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time (as defined
below), the Company shall be merged with and into CKX whereupon the separate
existence of the Company shall cease. CKX shall be the surviving corporation
(sometimes hereinafter referred to as the "Surviving Corporation") in the
Reincorporation Merger and shall continue to be governed by the laws of the
State of Delaware. The Surviving Corporation shall continue to operate the
business of the Company under the name "CKX, Inc." The Reincorporation Merger
shall have the effects specified in the General Corporation Law of the State of
Delaware, as amended (the "DGCL") and in the Colorado Business Corporation Act,
as amended (the "CBCA"), and the Surviving Corporation shall succeed, without
other transfer, to all of the assets and property (whether real, personal or
mixed), rights, privileges, franchises, immunities and powers of the Company,
and shall assume and be subject to all of the duties, liabilities, obligations
and restrictions of every kind and description of the Company, including,
without limitation, all employee benefit plans and arrangements, stock options
plans, and all indebtedness, of the Company.
1.2. Effective Time. Provided that the condition set forth in Section 5.1
has been fulfilled or waived in accordance with this Agreement and that this
Agreement has not been terminated or abandoned pursuant to Section 6.1, on the
date of the closing of the Reincorporation Merger, the Company and CKX shall
cause a Statement of Merger to be executed and filed with the Secretary of State
of Colorado (the "Colorado Statement of Merger") and a Certificate of Merger to
be executed and filed with the Secretary of State of Delaware (the "Delaware
Certificate of Merger"). The Reincorporation Merger shall become effective at
3:00 p.m., New York City time, on March 25, 2005, or upon the date and time
specified in the Colorado Statement of Merger and the Delaware Certificate of
Merger (the "Effective Time").
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ARTICLE II
CHARTER AND BYLAWS OF THE SURVIVING CORPORATION
2.1. The Certificate of Incorporation. The certificate of incorporation of
CKX in effect at the Effective Time shall be the certificate of incorporation of
the Surviving Corporation, until amended in accordance with the provisions
provided therein or applicable law.
2.2. The Bylaws. The bylaws of CKX in effect at the Effective Time shall
be the bylaws of the Surviving Corporation, until amended in accordance with the
provisions provided therein or applicable law.
ARTICLE III
OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
3.1. Officers. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation,
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal.
3.2. Directors. The directors and the members of the various committees of
the board of directors of the Company at the Effective Time shall, from and
after the Effective Time, be the directors and members of such committees of the
Surviving Corporation, until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal.
ARTICLE IV
EFFECT OF MERGER ON CAPITAL STOCK
4.1 Effect of Merger on Capital Stock. At the Effective Time, as a result
of the Reincorporation Merger and without any action on the part of the Company,
CKX or the Shareholders:
(a) Each share of SPEA Common Stock (other than shares ("Dissenting
Shares") that are owned by shareholders ("Dissenting Shareholders") exercising
dissenters' rights pursuant to Article 113 of the CBCA), issued and outstanding
immediately prior to the Effective Time shall be converted (without the
surrender of stock certificates or any other action) into one fully paid and
non-assessable share of CKX Common Stock, with the same rights, powers and
privileges as the shares so converted, and all shares of SPEA Common Stock shall
be cancelled and retired and shall cease to exist. At the Effective Time, the
shares of CKX Common Stock shall be listed for quotation on the NASDAQ National
Market, under the ticker symbol, "CKXE."
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(b) Each share of SPEA Series A Preferred Stock, issued and outstanding
immediately prior to the Effective Time, shall be converted (without the
surrender of stock certificates or any other action) into one fully paid and
non-assessable share of Series A Convertible Redeemable Preferred Stock of CKX
("CKX Series A Preferred Stock"), with the same rights, powers and privileges as
the shares so converted, and all shares of SPEA Series A Preferred Stock shall
be cancelled and retired and shall cease to exist.
(c) Each share of SPEA Series B Preferred Stock, issued and outstanding
immediately prior to the Effective Time, shall be converted (without the
surrender of stock certificates or any other action) into one fully paid and
non-assessable share of Series B Convertible Preferred Stock of CKX ("CKX Series
B Preferred Stock"), with the same rights, powers and privileges as the shares
so converted, and all shares of SPEA Series B Preferred Stock shall be cancelled
and retired and shall cease to exist.
(d) Each share of SPEA Series C Preferred Stock, issued and outstanding
immediately prior to the Effective Time, shall be converted (without the
surrender of stock certificates or any other action) into one fully paid and
non-assessable share of Series C Convertible Preferred Stock of CKX ("CKX Series
C Preferred Stock"), with the same rights, powers and privileges as the shares
so converted, and all shares of SPEA Series C Preferred Stock shall be cancelled
and retired and shall cease to exist.
(e) Each option, warrant, purchase right, unit or other security of the
Company issued and outstanding immediately prior to the Effective Time, by
virtue of the Merger Reincorporation and without any action on part of the
holder thereof, shall be (i) converted into and shall be an identical security
of CKX, and (ii) in the case of securities to purchase shares of SPEA Common
Stock, converted into the right to purchase the same number of shares of CKX
Common Stock as the number of shares of SPEA Common Stock that were acquirable
pursuant to such security, at a price per share equal to the exercise price of
such security, and upon the same terms and subject to the same conditions as set
forth in the agreements entered into by the Company pertaining to such security.
A number of shares of CKX Common Stock shall be reserved for the purposes of the
exercise of such options, warrants, purchase rights, units or other securities
equal to the number of shares of SPEA Common Stock so reserved immediately prior
to the Effective Time.
(f) Each share of treasury stock owned by the Company shall no longer
be outstanding and shall be cancelled and retired and shall cease to exist.
(g) At the Effective Time, the 100 shares of CKX Common Stock presently
issued and outstanding in the name of the Company shall be cancelled and retired
and resume the status of authorized and unissued shares of CKX Common Stock, and
no shares of CKX Common Stock or other securities of CKX Common Stock shall be
issued in respect thereof.
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4.2. Certificates. At and after the Effective Time, all of the outstanding
certificates which immediately prior thereto represented shares of SPEA Common
Stock (other than Dissenting Shares), or options, warrants, purchase rights,
units or other securities of the Company, if any, shall be deemed for all
purposes to evidence ownership of and to represent the shares of the respective
CKX Common Stock, or options, warrants, purchase rights, units or other
securities of CKX, if any, as the case may be, into which the shares of SPEA
Common Stock, or options, warrants, purchase rights, units or other securities
of the Company represented by such certificates have been converted as herein
provided and shall be so registered on the books and records of the Surviving
Corporation or its transfer agent. The registered owner of any such outstanding
certificate shall, until such certificate shall have been surrendered for
transfer or otherwise accounted for to the Surviving Corporation or its transfer
agent, have and be entitled to exercise any voting and other rights with respect
to, and to receive any dividends and other distributions upon, the shares of CKX
Common Stock, or options, warrants, purchase rights, units or other securities
of CKX, if any, as the case may be, evidenced by such outstanding certificate,
as above provided.
4.3. Rights of Former Holders. From and after the Effective Time, no
holder of certificates which evidenced SPEA Common Stock or SPEA Preferred Stock
immediately prior to the Effective Time shall have any rights with respect to
the shares formerly evidenced by those certificates, other than to receive the
shares of CKX Common Stock or CKX Preferred Stock into which such SPEA Common
Stock or SPEA Preferred Stock shall have been converted pursuant to the
Reincorporation Merger.
4.4. Dissenters' Rights. No Dissenting Shareholder shall be entitled to
shares of CKX Common Stock under this Article IV unless and until the holder
thereof shall have failed to perfect or shall have effectively withdrawn or lost
such holder's right to dissent from the Reincorporation Merger under the CBCA,
and any Dissenting Shareholder shall be entitled to receive only the payment
provided by Article 113 of the CBCA with respect to Dissenting Shares owned by
such Dissenting Shareholder. If any person or entity who otherwise would be
deemed a Dissenting Shareholder shall have failed to properly perfect or shall
have effectively withdrawn or lost the right to dissent with respect to any
shares which would be Dissenting Shares but for that failure to perfect or
withdrawal or loss of the right to dissent, such Dissenting Shares shall
thereupon be treated as though such Dissenting Shares had been converted into
shares of CKX Common Stock pursuant to Section 4.1 hereof.
ARTICLE V
CONDITION
5.1. Condition to Each Party's Obligation to Effect the Reincorporation
Merger. The respective obligation of each party hereto to effect the
Reincorporation Merger is subject to receipt prior to the Effective Time of the
requisite approval of this Agreement and the transactions contemplated hereby by
the Shareholders pursuant to the CBCA and the Articles of Incorporation and
bylaws of the Company.
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ARTICLE VI
TERMINATION
6.1. Termination. This Agreement may be terminated, and the
Reincorporation Merger may be abandoned, at any time prior to the Effective
Time, whether before or after approval of this Agreement by the Shareholders, if
the board of directors of the Company determines for any reason, in its sole
judgment and discretion, that the consummation of the Reincorporation Merger
would be inadvisable or not in the best interests of the Company and its
shareholders. Notwithstanding the foregoing, the Company retains the right to
elect not to proceed with the Reincorporation Merger if greater than 1% of the
Shareholders entitled to vote properly exercise their dissenters' rights. In the
event of the termination and abandonment of this Agreement, this Agreement shall
become null and void and have no effect, without any liability on the part of
either the Company or CKX, or any of their respective shareholders, directors or
officers.
ARTICLE VII
MISCELLANEOUS AND GENERAL
7.1. Further Assistance. From and after the Effective Time, as and when
required by CKX or by its successor and assigns, there shall be executed and
delivered on behalf of the Company such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other action, as
shall be appropriate or necessary in order to vest, perfect or confirm, of
record or otherwise, in CKX the title to and possession of all the property,
interests, assets, rights, privileges, immunities, power, franchises and
authority of the Company, and otherwise to carry out the purposes of this
Agreement, and the officers and directors of CKX are fully authorized in the
name and on behalf of the Company or otherwise to take any and all such action
and to execute and deliver any and all such deeds and other instruments.
7.2. Modification or Amendment. Subject to the provisions of applicable
law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement; provided, however, that an amendment made subsequent to
the approval of this Agreement by the holders of SPEA Common Stock shall not (i)
alter or change the amount or kind of shares and/or rights to be received in
exchange for or on conversion of all or any of the shares or any class or series
thereof of such corporation, (ii) alter or change any provision of the
certificate of incorporation of the Surviving Corporation to be effected by the
Reincorporation Merger, or (iii) alter or change any of the terms or conditions
of this Agreement if such alteration or change would adversely affect the
holders of any class or series of capital stock of any of the parties hereto.
7.3. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
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7.4. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
7.5. Entire Agreement. This Agreement constitutes the entire agreement and
supercedes all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof.
7.6. No Third Party Beneficiaries. This Agreement is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
7.7. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is determined by any court or other authority of competent
jurisdiction to be invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
7.8. Headings. The headings herein are for convenience of reference only,
do not constitute part of this Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof.
7.9. Approval of the Company as the Sole Stockholder of CKX. By its
execution and delivery of this Agreement, the Company, as the sole stockholder
of CKX, consents to, approves and adopts this Agreement and approves the
Reincorporation Merger, subject to the approval and adoption of this Agreement
by the affirmative vote of a majority of the shares of capital stock of the
Company entitled to vote. The Company agrees to execute such instruments as may
be necessary or desirable to evidence its approval and adoption of this
Agreement and Reincorporation Merger as the sole stockholder of the Delaware
Corporation.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
SPORTS ENTERTAINMENT ENTERPRISES, INC.
By: /s/Kraig G. Fox
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Name: Kraig G. Fox
Title: Chief Corporate Development Officer
and Secretary
CKX, INC.
By:
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Name: Jason Horowitz
Title: Chief Executive Officer