Common use of REPRESENTATIONS AND WARRANTIES OF SCC Clause in Contracts

REPRESENTATIONS AND WARRANTIES OF SCC. SCC hereby makes the following representations and warranties: (a) SCC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own and hold under lease the properties and assets it purports to own and hold under lease and to carry on its business as now being conducted and is not required to be qualified to do business as a foreign corporation in any jurisdiction, except where so qualified or where the failure to be so qualified would not have a material adverse effect where so qualified or where the failure to be so qualified would not have a material adverse effect on the business or properties of SCC and its Subsidiaries (as defined in Paragraph 3(b)) taken as a whole. Accurate and complete copies of SCC's Certificate of Incorporation and Bylaws, together, in each case, with any amendments thereto to the date hereof, are attached as Exhibit B and Exhibit C hereto, respectively. (b) SCC owns a 50% or greater interest or otherwise controls each of the corporations, limited partnerships and the general partnership listed on Schedule 3(c) hereto (each, a "Subsidiary"), each of which is duly organized, validly existing and, in the case of the corporations and limited partnerships, in good standing under the laws of its state of organization, and has its chief executive offices in Los Angeles, California (except for the Reebok-Sports Club/NY, which has its chief executive offices in New York). Each Subsidiary has all requisite corporate or other power and authority to own and hold under lease the properties and assets its purports to own and hold under lease and to carry on its businesses now being conducted and is not required to be qualified to do business as a foreign corporation or partnership in any jurisdiction, except where so qualified to do business as a foreign corporation or partnership in any jurisdiction, except where so qualified or whether failure to be so qualified would not have a material adverse effect on the business or properties of SCC and the Subsidiaries taken as a whole. Schedule 3(b) hereto sets forth the name and state of organization of each Subsidiary. Except for the Subsidiaries, SCC does not own a 50% or greater interest or otherwise control any corporation, general partnership, limited partnership, limited liability company or other entity. (c) The authorized capital stock of SCC consists of 40,000,000 shares of Common Stock, 11,358,000 shares of which have been validly issued, and are fully paid and non-assessable, and except as set forth on Schedule 3(c) hereto, there do not exist any other authorized or outstanding securities, options, warrants, calls, commitments, rights to subscribe or other instruments, agreements or rights of any character, or any pre-emptive rights, convertible into or exchangeable for, or requiring or relating to the issuance, (d) The execution and the delivery by SCC of this Agreement, and the assumption of the MEP Assigned Interests hereunder, do not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in a violation of, or (iv) require any authorization, consent or approval not heretofore obtained pursuant to, any binding written or oral agreement or instrument including, without limitation, any charter, bylaw, trust instrument, indenture or evidence of indebtedness, lease, contract or other obligation or commitment (each, a "Contractual Obligation") binding upon SCC or any Subsidiary or any of their properties or assets, or any law, rule, regulation, restriction, order, writ, judgment, award, determination, injunction or decree of any court or government, or any decision or ruling of any arbitrator (each, a "Requirement of Law") binding upon or applicable to SCC or any Subsidiary or any of their properties or assets (excluding the consents described in Paragraph 5(d) hereof). (e) The issuance and sale of the Shares to Millennium has been duly authorized and if, as and when delivered to Millennium, the Shares will be duly and validly issued and outstanding, fully paid and nonassessable and will be free of any mortgage, lien, charge, security interest, pledge or other encumbrance (each, a "Lien"), other than those imposed pursuant to this Agreement and securities laws of general application. This Agreement constitutes the legal, valid and binding obligation of SCC and is enforceable against SCC in accordance with its terms, subject to applicable bankruptcy, insolvency or other similar laws or proceedings limiting creditors' rights generally and to general equitable principles. (f) Attached hereto as Schedule 3(f) are complete and accurate copies of SCC's Annual Report on Form 10-K for the year ended December 31, 1995, and the Quarterly Reports on Form 10-Q for the three fiscal quarters ending September 30, 1996 (the "Reports"), which include the consolidated financial statements of SCC for its fiscal year ended December 31, 1995, and for the nine months ended September 30, 1996 (collectively, the "SCC Financial Statements"). Each of the Reports complied in all material respects with the rules of the SEC applicable to such Report on the date filed with the SEC, and none of the Reports contained, on the date of filing with the SEC, any untrue statement of a material fact, or omitted to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not materially misleading. None of the Reports have been amended, nor has SCC filed any Report on Form 8-K since September 30, 1996. All of the SCC Financial Statements (subject to year-end accruals in the case of the September 30, 1996 financial statements): (i) have been prepared from and on the basis of, and are in accordance with, the books and records of SCC and with generally accepted accounting principles applied on a basis consistent with prior accounting periods; (ii) fairly and accurately present the financial condition of SCC as of the date of each such SCC Financial Statement and the results of its operations for the periods therein specified; and (iii) except in the case of the September 30, 1996 financial statements, are accompanied by the audit opinion of SCC's independent public accountants. There are no undisclosed liabilities which should be disclosed in the SCC Financial Statements pursuant to generally accepted accounting principles. (g) Except as set forth on Schedule 3(g), since September 30,, 1996, there has not been nor is there currently pending any change in the business, business plan, operations, commercial practices, properties, assets or condition, financial or otherwise, of SCC and the Subsidiaries other than changes in the ordinary course of business, none of which, singly or in the aggregate, would have a material adverse effect on SCC and the Subsidiaries, taken as a whole (a "Material Adverse Effect"). (h) SCC and each Subsidiary have complied with all Requirements of Law in the conduct of its business and corporate affairs, and SCC and each Subsidiary have all governmental consents, licenses, approvals, permits or authorizations and all other rights required for the operation of its business, as now conducted, except where failure to comply, singly or in the aggregate, would not have a Material Adverse Effect. (i) Except as set forth on Schedule 3(i) there is not pending, or, to the best knowledge of SCC, threatened, any action, suit, ruling, order, decree, judgment, stipulation or legal, administrative, arbitration or other proceeding or governmental investigation (each, a "Proceeding") to which SCC or any Subsidiary is a party, which if adversely determined, would have a Material Adverse Effect. (j) There has been no material violation or violations by SCC or any Subsidiary of any environmental or safety statute, law or regulation (collectively, "Environmental Laws"). As of the Closing, no "Hazardous Material", as defined below, is or will be present on any SCC or Subsidiary facility in violation of any Environmental Law. There are no Hazardous Materials present at any SCC or Subsidiary facility that would have a Material Adverse Effect. For the purposes of this section, the term "Hazardous Material" shall mean any material or substances which are prohibited or regulated by any environmental law or which has been designated by any governmental authority to be radioactive, toxic, hazardous or otherwise a danger to health, reproduction or the environment.

REPRESENTATIONS AND WARRANTIES OF SCC. SCC hereby makes the following representations and warranties: (a) SCC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own and hold under lease the properties and assets it purports to own and hold under lease and to carry on its business as now being conducted and is not required to be qualified to do business as a foreign corporation in any jurisdiction, except where so qualified or where the failure to be so qualified would not have a material adverse effect where so qualified or where the failure to be so qualified would not have a material adverse effect on the business or properties of SCC and its Subsidiaries (as defined in Paragraph 3(b)) taken as a whole. Accurate and complete copies of SCC's Certificate of Incorporation and Bylaws, together, in each case, with any amendments thereto to the date hereof, are attached as Exhibit B and Exhibit C hereto, respectively. (b) SCC owns a 50% or greater interest or otherwise controls each of the corporations, limited partnerships and the general partnership listed on Schedule 3(c) hereto (each, a "Subsidiary"), each of which is duly organized, validly existing and, in the case of the corporations and limited partnerships, in good standing under the laws of its state of organization, and has its chief executive offices in Los Angeles, California (except for the Reebok-Sports Club/NY, which has its chief executive offices in New York). Each Subsidiary has all requisite corporate or other power and authority to own and hold under lease the properties and assets its it purports to own and hold under lease and to carry on its businesses now being conducted and is not required to be qualified to do business as a foreign corporation or partnership in any jurisdiction, except where so qualified to do business as a foreign corporation or partnership in any jurisdiction, except where so qualified or whether failure to be so qualified would not have a material adverse effect on the business or properties of SCC and the Subsidiaries taken as a whole. Schedule 3(b) hereto sets forth the name and state of organization of each Subsidiary. Except for the Subsidiaries, SCC does not own a 50% or greater interest or otherwise control any corporation, general partnership, limited partnership, limited liability company or other entity. (c) The authorized capital stock of SCC consists of 40,000,000 shares of Common Stock, 11,358,000 shares of which have been validly issued, and are fully paid and non-assessable, and except as set forth on Schedule 3(c) hereto, there do not exist any other authorized or outstanding securities, options, warrants, calls, commitments, rights to subscribe or other instruments, agreements or rights of any character, or any pre-emptive rights, convertible into or exchangeable for, or requiring or relating to the issuance,, transfer or sale of, any shares of capital stock or other securities of SCC (collectively, "Equity Securities") or any Subsidiary. (d) The execution and the delivery by SCC of this Agreement, and the assumption of the MEP Assigned Interests hereunder, do not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in a violation of, or (iv) require any authorization, consent or approval not heretofore obtained pursuant to, any binding written or oral agreement or instrument including, without limitation, any charter, bylaw, trust instrument, indenture or evidence of indebtedness, lease, contract or other obligation or commitment (each, a "Contractual Obligation") binding upon SCC or any Subsidiary or any of their properties or assets, or any law, rule, regulation, restriction, order, writ, judgment, award, determination, injunction or decree of any court or government, or any decision or ruling of any arbitrator (each, a "Requirement of Law") binding upon or applicable to SCC or any Subsidiary or any of their properties or assets (excluding the consents described in Paragraph 5(d) hereof). (e) The issuance and sale of the Shares to Millennium has been duly authorized and if, as and when delivered to Millennium, the Shares will be duly and validly issued and outstanding, fully paid and nonassessable and will be free of any mortgage, lien, charge, security interest, pledge or other encumbrance (each, a "Lien"), other than those imposed pursuant to this Agreement and securities laws of general application. This Agreement constitutes the legal, valid and binding obligation of SCC and is enforceable against SCC in accordance with its terms, subject to applicable bankruptcy, insolvency or other similar laws or proceedings limiting creditors' rights generally and to general equitable principles. (f) Attached hereto as Schedule 3(f) are complete and accurate copies of SCC's Annual Report on Form 10-K for the year ended December 31, 1995, and the Quarterly Reports on Form 10-Q for the three fiscal quarters ending September 30, 1996 (the "Reports"), which include the consolidated financial statements of SCC for its fiscal year ended December 31, 1995, and for the nine months ended September 30, 1996 (collectively, the "SCC Financial Statements"). Each of the Reports complied in all material respects with the rules of the SEC applicable to such Report on the date filed with the SEC, and none of the Reports contained, on the date of filing with the SEC, any untrue statement of a material fact, or omitted to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not materially misleading. None of the Reports have been amended, nor has SCC filed any Report on Form 8-K since September 30, 1996. All of the SCC Financial Statements (subject to year-end accruals in the case of the September 30, 1996 financial statements): (i) have been prepared from and on the basis of, and are in accordance with, the books and records of SCC and with generally accepted accounting principles applied on a basis consistent with prior accounting periods; (ii) fairly and accurately present the financial condition of SCC as of the date of each such SCC Financial Statement and the results of its operations for the periods therein specified; and (iii) except in the case of the September 30, 1996 financial statements, are accompanied by the audit opinion of SCC's independent public accountants. There are no undisclosed liabilities which should be disclosed in the SCC Financial Statements pursuant to generally accepted accounting principles. (g) Except as set forth on Schedule 3(g), since September 30,, 1996, there has not been nor is there currently pending any change in the business, business plan, operations, commercial practices, properties, assets or condition, financial or otherwise, of SCC and the Subsidiaries other than changes in the ordinary course of business, none of which, singly or in the aggregate, would have a material adverse effect on SCC and the Subsidiaries, taken as a whole (a "Material Adverse Effect"). (h) SCC and each Subsidiary have complied with all Requirements of Law in the conduct of its business and corporate affairs, and SCC and each Subsidiary have all governmental consents, licenses, approvals, permits or authorizations and all other rights required for the operation of its business, as now conducted, except where failure to comply, singly or in the aggregate, would not have a Material Adverse Effect. (i) Except as set forth on Schedule 3(i) there is not pending, or, to the best knowledge of SCC, threatened, any action, suit, ruling, order, decree, judgment, stipulation or legal, administrative, arbitration or other proceeding or governmental investigation (each, a "Proceeding") to which SCC or any Subsidiary is a party, which if adversely determined, would have a Material Adverse Effect. (j) There has been no material violation or violations by SCC or any Subsidiary of any environmental or safety statute, law or regulation (collectively, "Environmental Laws"). As of the Closing, no "Hazardous Material", as defined below, is or will be present on any SCC or Subsidiary facility in violation of any Environmental Law. There are no Hazardous Materials present at any SCC or Subsidiary facility that would have a Material Adverse Effect. For the purposes of this section, the term "Hazardous Material" shall mean any material or substances which are prohibited or regulated by any environmental law or which has been designated by any governmental authority to be radioactive, toxic, hazardous or otherwise a danger to health, reproduction or the environment.

REPRESENTATIONS AND WARRANTIES OF SCC. SCC hereby makes the following representations and warranties: (a) SCC is a corporation duly organized, validly existing and in good standing 2 Millennium Entertainment Partners, L.P. December 29, 1997 Page 2 under the laws of the State of Delaware, has all requisite corporate power and authority to own and hold under lease the properties and assets it purports to own and hold under lease and to carry on its business as now being conducted and is not required to be qualified to do business as a foreign corporation in any jurisdiction, except where so qualified or where the failure to be so qualified would not have a material adverse effect where so qualified or where the failure to be so qualified would not have a material adverse effect on the business business, financial condition or properties of SCC and its Subsidiaries (as defined in Paragraph 3(b)) ), taken as a whole. Accurate and complete copies of SCC's Certificate of Incorporation and Bylaws, together, in each case, with any amendments thereto to the date hereof, are attached as Exhibit B and Exhibit C hereto, respectively. (b) SCC owns a 50% or greater interest or otherwise controls each of the corporations, limited partnerships and the general partnership listed on Schedule 3(c3(b) hereto (each, a "Subsidiary"), each of which is duly organized, validly existing and, in the case of the corporations and limited partnerships, in good standing under the laws of its state of organization, and has its chief principal executive offices in Los Angeles, California (except for the Reebok-Sports Club/NY, which has its chief executive offices in New York). Each Subsidiary has all requisite corporate or other power and authority to own and hold under lease the properties and assets its it purports to own and hold under lease and to carry on its businesses now being conducted and is not required to be qualified to do business as a foreign corporation or partnership in any jurisdiction, except where so qualified to do business as a foreign corporation or partnership in any jurisdiction, except where so qualified or whether failure to be so qualified would not have a material adverse effect on the business or properties of SCC and the Subsidiaries taken as a whole. Schedule 3(b) hereto sets forth the name and state of organization of each Subsidiary. Except for the Subsidiaries, SCC does not own a 50% or greater interest in, have a material economic interest in, or otherwise control any corporation, general partnership, limited partnership, limited liability company or other entity. (c) The authorized capital stock of SCC consists of 40,000,000 shares of Common Stock, 11,358,000 13,757,621 shares of which have been duly authorized and validly issued, and are fully paid and non-assessable, and except as set forth on Schedule 3(c) hereto, there do not exist any other authorized or outstanding securities, options, warrants, calls, commitments, rights to subscribe or other instruments, agreements or rights of any character, or any pre-emptive rights, convertible into or exchangeable for, or requiring or relating to the issuance,, transfer or sale of, any shares of capital stock or other securities of SCC (collectively, "Equity Securities") or any Subsidiary. (d) The execution and the delivery by SCC of this Agreement, and the assumption consummation of the MEP Assigned Interests hereundertransactions contemplated hereby, do not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in a violation of, or (iv) require any authorization, consent or approval not heretofore obtained pursuant to, any binding written or oral agreement or instrument including, without limitation, any charter, bylaw, trust instrument, indenture or evidence of indebtedness, lease, contract or other obligation or commitment (each, a "Contractual Obligation") binding upon SCC or any Subsidiary or any of their properties or assets, or any law, rule, regulation, restriction, order, writ, judgment, Millennium Entertainment Partners, L.P. December 29, 1997 Page 3 award, determination, injunction or decree of any court or government, or any decision or ruling of any arbitrator (each, a "Requirement of Law") binding upon or applicable to SCC or any Subsidiary or any of their properties or assets (excluding the consents described in Paragraph 5(d) hereof)assets. (e) The issuance and sale of the Shares to Millennium has and the consummation of all other transactions contemplated hereunder have been duly authorized and if, as and when the Shares are delivered to Millennium, the Shares will be duly and validly issued and outstanding, fully paid and nonassessable and will be free of any mortgage, lien, charge, security interest, pledge or other encumbrance (each, a "Lien"), other than those imposed pursuant to this Agreement and securities laws of general application. This Agreement constitutes the legal, valid and binding obligation of SCC and is enforceable against SCC in accordance with its terms, subject to applicable bankruptcy, insolvency or other similar laws or proceedings limiting creditors' rights generally and to general equitable principles. (f) Attached hereto as Schedule 3(f) are is a true and complete and accurate copies list of SCC's Annual Report on Form 10-K for the year ended December 31, 19951996, and the Quarterly Reports on Form 10-Q for the three fiscal quarters ending September 30, 1996 (the "Reports")1997, and all amendments thereto, which include the consolidated financial statements of SCC for its fiscal year ended December 31, 19951996, and for the nine months ended September 30, 1996 1997 (collectively, the "SCC Financial Statements") and all Form 8-Ks filed since December 31, 1996 (collectively, the "Reports"). Each of the Reports complied in all material respects with the rules of the SEC applicable to such Report on the date filed with the SEC, and none of the Reports contained, on the date of filing with the SEC, any untrue statement of a material fact, or omitted to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not materially misleading. None of the Reports have been amended, nor has SCC filed any Report on Form 8-K since September 30, 1996. All of the SCC Financial Statements (subject to year-end accruals in the case of the September 30, 1996 1997 financial statements): (i) have been prepared from and on the basis of, and are in accordance with, the books and records of SCC and with generally accepted accounting principles applied on a basis consistent with prior accounting periods; (ii) fairly and accurately present the financial condition of SCC as of the date of each such SCC Financial Statement and the results of its operations for the periods therein specified; and (iii) except in the case of the September 30, 1996 1997 financial statements, are accompanied by the audit opinion of SCC's independent public accountants. There are no undisclosed liabilities which should be disclosed in the SCC Financial Statements pursuant to generally accepted accounting principles. (g) Except as set forth on Schedule 3(g), since September 30,, 19961997, there has not been nor is there currently pending any change in the business, business plan, operations, commercial practices, properties, assets or condition, financial or otherwise, of SCC and the Subsidiaries other than changes in the ordinary course of business, none of which, singly or in the aggregate, would have a material adverse effect on the business, financial condition or properties of SCC and the Subsidiaries, taken as a whole (a "Material Adverse Effect"). (h) SCC and each Subsidiary have complied with all Requirements of Law in the conduct of its business and corporate affairs, and SCC and each Subsidiary have all governmental consents, licenses, approvals, permits or authorizations and all other rights required for the operation of its business, as now conducted, except where failure to comply, singly or in the aggregate, would not have a Material Adverse Effect. (i) Except as set forth on Schedule 3(i) there is not pending, or, to the best knowledge of SCC, threatened, any action, suit, ruling, order, decree, judgment, stipulation or legal, administrative, arbitration or other proceeding or governmental investigation (each, a "Proceeding") to which SCC or any Subsidiary is a party, which if adversely determined, would have a Material Adverse Effect. (j) There has been no material violation or violations by SCC or any Subsidiary of any environmental or safety statute, law or regulation (collectively, "Environmental Laws"). As of the Closing, no "Hazardous Material", as defined below, is or will be present on any SCC or Subsidiary facility in violation of any Environmental Law. There are no Hazardous Materials present at any SCC or Subsidiary facility that would have a Material Adverse Effect. For the purposes of this section, the term "Hazardous Material" shall mean any material or substances which are prohibited or regulated by any environmental law or which has been designated by any governmental authority to be radioactive, toxic, hazardous or otherwise a danger to health, reproduction or the environment.