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PURCHASE AGREEMENT
by and among
SFX ENTERTAINMENT, INC.,
TBA ENTERTAINMENT CORPORATION
and
AWC ACQUISITION CORP.
Dated as of May 13, 1998
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................1
SECTION 1.01 DEFINED TERMS.............................................1
SECTION 1.02 INTERPRETATION............................................1
ARTICLE II PURCHASE AND SALE................................................2
SECTION 2.01 SALE AND PURCHASE OF THE STOCK AND THE
PARTNERSHIP INTERESTS.................................... 2
SECTION 2.02 CLOSING MATTERS...........................................2
SECTION 2.03 TRANSFER OF SHARES AND PARTNERSHIP INTERESTS..............2
SECTION 2.04 CONSIDERATION.............................................2
SECTION 2.05 [INTENTIONALLY OMITTED.]..................................3
SECTION 2.06 CONVEYANCE AND TRANSFER...................................3
SECTION 2.07 CERTAIN ASSETS............................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS...................3
SECTION 3.01 ORGANIZATION, GOOD STANDING AND QUALIFICATION.............3
SECTION 3.02 AUTHORITY.................................................4
SECTION 3.03 CAPITALIZATION............................................4
SECTION 3.04 SUBSIDIARIES..............................................5
SECTION 3.05 NO DEFAULT; NON-CONTRAVENTION.............................5
SECTION 3.06 CONSENTS AND APPROVALS....................................6
SECTION 3.07 PERSONAL PROPERTY.........................................6
SECTION 3.08 REAL PROPERTY.............................................7
SECTION 3.09 LITIGATION................................................9
SECTION 3.10 INTELLECTUAL PROPERTY.....................................9
SECTION 3.11 CONTRACTS................................................10
SECTION 3.12 FINANCIAL STATEMENTS.....................................10
SECTION 3.13 ABSENCE OF LIABILITIES...................................11
SECTION 3.14 ABSENCE OF CERTAIN CHANGES...............................11
SECTION 3.15 TAXES....................................................13
SECTION 3.16 COMPLIANCE WITH LAWS.....................................15
SECTION 3.17 EMPLOYEE MATTERS.........................................15
SECTION 3.18 EMPLOYEES AND RELATED AGREEMENTS; ERISA..................16
SECTION 3.19 ENVIRONMENTAL COMPLIANCE.................................19
SECTION 3.20 INSURANCE................................................20
SECTION 3.21 ACCOUNTS RECEIVABLE......................................21
SECTION 3.22 TRANSACTIONS WITH AFFILIATES.............................21
SECTION 3.23 FINDER'S FEES............................................21
SECTION 3.24 ABSENCE OF CERTAIN BUSINESS PRACTICES....................21
SECTION 3.25 CERTAIN PAYMENTS.........................................21
SECTION 3.26 DISCLOSURE...............................................22
SECTION 3.27 XXXXXX XXXXXXX...........................................22
SECTION 3.28 CAMARILLO AMPHITHEATER PROJECT...........................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER.....................26
SECTION 4.01 ORGANIZATION, GOOD STANDING AND QUALIFICATION............26
SECTION 4.02 AUTHORITY................................................26
SECTION 4.03 NO DEFAULT; NON-CONTRAVENTION............................26
SECTION 4.04 CONSENTS AND APPROVALS...................................27
SECTION 4.05 FINDER'S FEES............................................27
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ARTICLE V PRE-CLOSING COVENANTS OF THE SELLERS.............................27
SECTION 5.01 CONDUCT OF BUSINESSES....................................27
SECTION 5.02 EXTRAORDINARY ACTS.......................................28
SECTION 5.03 NO BREACH OF REPRESENTATIONS AND WARRANTIES..............30
SECTION 5.04 ACCESS BY THE BUYER......................................30
SECTION 5.05 HSR ACT..................................................31
SECTION 5.06 CONSENTS; NOTICES; TERMINATION...........................31
SECTION 5.07 BEST EFFORTS.............................................31
ARTICLE VI PRE-CLOSING COVENANTS OF THE BUYER..............................31
SECTION 6.01 NO BREACH OF REPRESENTATIONS AND WARRANTIES..............31
SECTION 6.02 HSR ACT..................................................32
SECTION 6.03 CONSENTS AND APPROVALS; NOTICES..........................32
SECTION 6.04 BEST EFFORTS.............................................32
ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE BUYER.....................32
SECTION 7.01 REPRESENTATIONS AND WARRANTIES...........................32
SECTION 7.02 COVENANTS................................................33
SECTION 7.03 OFFICER'S CERTIFICATE....................................33
SECTION 7.04 OPINION OF COUNSEL.......................................33
SECTION 7.05 CONSENTS.................................................33
SECTION 7.06 HSR ACT..................................................33
SECTION 7.07 LEGALITY.................................................33
SECTION 7.08 INJUNCTIONS..............................................33
SECTION 7.09 INSTITUTION OF PROCEEDINGS...............................34
SECTION 7.10 TITLE INSURANCE..........................................34
SECTION 7.11 EMPLOYMENT AGREEMENTS....................................34
SECTION 7.12 FIRPTA CERTIFICATES......................................34
SECTION 7.13 INTENTIONALLY OMITTED....................................34
SECTION 7.14 AUDITED FINANCIAL STATEMENTS.............................34
SECTION 7.15 CONSULTING SERVICES......................................34
SECTION 7.16 CERTAIN EVENTS...........................................35
SECTION 7.17 CLOSING OF 49% TRANSACTION...............................35
SECTION 7.18 RELEASES.................................................35
SECTION 7.19 TRADEMARK ASSIGNMENT.....................................35
SECTION 7.20 ACKNOWLEDGEMENT..........................................35
SECTION 7.21 DELIVERY OF NOTICES......................................35
SECTION 7.22 ASSIGNMENT OF E/C ASSETS.................................36
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE SELLERS..................36
SECTION 8.01 REPRESENTATIONS AND WARRANTIES...........................36
SECTION 8.02 COVENANTS................................................36
SECTION 8.03 OFFICER'S CERTIFICATE....................................36
SECTION 8.04 OPINION OF COUNSEL.......................................36
SECTION 8.05 CONSENTS.................................................36
SECTION 8.06 HSR ACT..................................................37
SECTION 8.07 LEGALITY.................................................37
SECTION 8.08 INJUNCTIONS..............................................37
SECTION 8.09 INSTITUTION OF PROCEEDINGS...............................37
SECTION 8.10 DELIVERY OF CONSIDERATION................................37
SECTION 8.11 EMPLOYMENT AGREEMENTS....................................37
SECTION 8.12 CLOSING OF THE 49% TRANSACTION...........................37
SECTION 8.13 TRADEMARK LICENSE AGREEMENT..............................38
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ARTICLE IX ADDITIONAL AGREEMENTS OF THE PARTIES............................38
SECTION 9.01 TAX MATTERS..............................................38
SECTION 9.02 BULK TRANSFER LAWS.......................................40
SECTION 9.03 [INTENTIONALLY OMITTED.].................................40
SECTION 9.04 RESTRICTIVE COVENANTS....................................40
SECTION 9.05 NON-SOLICITATION.........................................41
SECTION 9.06 NO-SHOP..................................................41
SECTION 9.07 [INTENTIONALLY OMITTED.].................................42
SECTION 9.08 [INTENTIONALLY OMITTED.].................................42
SECTION 9.09 SUBDIVISION..............................................42
SECTION 9.10 LICENSE OF OFFICE SPACE..................................42
SECTION 9.11 EXPENSES OF THE TRANSACTION..............................42
ARTICLE X TERMINATION......................................................43
SECTION 10.01 TERMINATION...........................................43
SECTION 10.02 EFFECT OF TERMINATION.................................44
ARTICLE XI INDEMNIFICATION.................................................44
SECTION 11.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES............44
SECTION 11.02 BY THE SELLERS........................................44
SECTION 11.03 BY THE BUYER..........................................44
SECTION 11.04 LIMITATIONS ON INDEMNIFICATION........................45
SECTION 11.05 INDEMNIFICATION PROCEDURE FOR THIRD PARTY CLAIMS......45
ARTICLE XII MISCELLANEOUS..................................................46
SECTION 12.01 FURTHER ASSURANCES....................................46
SECTION 12.02 ENTIRE AGREEMENT......................................46
SECTION 12.03 NOTICES...............................................47
SECTION 12.04 BINDING EFFECT; SUCCESSORS AND ASSIGNS................48
SECTION 12.05 GOVERNING LAW.........................................48
SECTION 12.06 CAPTIONS..............................................48
SECTION 12.07 CONFIDENTIALITY OF DISCLOSURES........................48
SECTION 12.08 PUBLICITY.............................................49
SECTION 12.09 CONSENT TO JURISDICTION...............................49
SECTION 12.10 FEES AND EXPENSES.....................................50
SECTION 12.11 THIRD PARTIES.........................................50
SECTION 12.12 COUNTERPARTS..........................................50
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of May 13, 1998, by and among SFX
ENTERTAINMENT, INC. (the "BUYER"), a Delaware corporation, TBA ENTERTAINMENT
CORPORATION ("TBA"), a Delaware corporation, and AWC ACQUISITION CORP., a
Delaware corporation and wholly-owned subsidiary of TBA ("AWC" and, together
with TBA, the "SELLERS").
W I T N E S S E T H:
WHEREAS, the Sellers are collectively the holders of (i) partnership
interests (the "PARTNERSHIP INTERESTS") representing in the aggregate a
fifty-one percent (51%) partnership interest in Xxxxxx Xxxxxxx Amphitheater, a
California general partnership ("IMA"), and (ii) fifty-one percent (51%) of the
issued and outstanding capital stock (the "STOCK") of each of New Avalon, Inc.,
a California corporation, TBA Media, Inc., a California corporation, and West
Coast Amphitheater Corp., a California corporation (each a "SUBSIDIARY" and,
together with IMA, the "COMPANIES"), as further set forth on Schedule 3.03
hereto;
WHEREAS, the Companies are engaged in the "at risk" music and concert
production and promotion businesses and certain of the Companies are developing
the Camarillo Creek Amphitheater (collectively, the "BUSINESSES"); and
WHEREAS, the Buyer desires to acquire from the Sellers, and the Sellers
desire to sell to the Buyer, all of the issued and outstanding Partnership
Interests and all of the issued and outstanding Stock owned by the Sellers
(collectively, the "INTERESTS"), on the terms and subject to the conditions set
forth herein (the "ACQUISITION").
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
For purposes of this Agreement, the terms set forth on Schedule 1.01 shall
have the respective meanings set forth therein.
Section 1.02 Interpretation.
In this Agreement, (a) words used herein regardless of the gender
specifically used shall be deemed and construed to include any other gender,
masculine, feminine or neuter, as the context shall require, (b) all terms
defined in the singular shall have the same meanings when used in the plural
and vice versa, (c) words denoting natural persons shall include corporations,
partnerships and other entities and vice versa, unless the context otherwise
requires, and (d) all references to Articles, Sections, Exhibits and Schedules
refer to the Articles, Sections, Exhibits and Schedules of and to this
Agreement, except as otherwise specified herein to the contrary.
ARTICLE II
PURCHASE AND SALE
Section 2.01 Sale and Purchase of the Stock and the Partnership Interests.
On the Closing Date, the Sellers shall sell, transfer, convey and assign
to the Buyer, and the Buyer shall purchase from the Sellers, all of the
Interests, free and clear of all Liens.
Section 2.02 Closing Matters.
(a) Closing. Subject to Section 10.01 hereof, the closing of the
transactions contemplated by Section 2.01 hereof (the "CLOSING") shall
take place at 10:00 a.m., New York time, on the business day which is five
business days after the fulfillment of the conditions set forth in Articles VII
and VIII hereof, at the offices of Rosenman & Colin LLP, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other time or on such other date or at
such other place as the Buyer and the Sellers may agree. The date of the
Closing is referred to herein as the "CLOSING DATE."
(b) Actions Simultaneous. All actions to be taken and all documents to
be executed and delivered by all parties at the Closing shall be deemed to have
been taken and executed and delivered simultaneously and no actions shall be
deemed to have been taken nor shall any documents be deemed to have been
executed and delivered until all actions have been taken and all documents
shall have been executed and delivered.
Section 2.03 Transfer of Shares and Partnership Interests.
The Sellers agree that at the Closing, the Sellers shall transfer to
the Buyer all of the Interests owned by them by delivering to the Buyer (i) one
or more stock certificates representing all of the issued and outstanding
shares of Stock owned by them, duly endorsed in blank or accompanied by duly
executed stock powers in blank and with any necessary transfer stamps affixed
thereto and (ii) certificates (or other evidence satisfactory to the Buyer in
its sole discretion) representing all of the issued and outstanding Partnership
Interests owned by them.
Section 2.04 Consideration.
(a) Purchase Price. The Interests shall be sold by the Sellers and
shall be purchased by the Buyer for an aggregate purchase price (the "PURCHASE
PRICE") of (i) $9,915,000 plus (ii) the Sellers' substantiated third-party
out-of-pocket costs and expenses (excluding any internal allocations of costs
and expenses to any Affiliate of a Seller), if any, incurred in connection with
the development of the Camarillo Creek amphitheater (the "AMPHITHEATER")
including, without limitation, expenses, if any, incurred by the Sellers after
the Closing Date, all of which costs and expenses the Sellers represent are
currently reflected in the existing construction plans and budget (the
"CONSTRUCTION BUDGET") for the Amphitheater (the "REIMBURSABLE COSTS"), which
Construction Budget has been provided to the Buyer and which Construction
Budget, from and after the Closing, may only be amended by the Buyer and the
expenditure of which Reimbursable Costs by any Seller Entity, from and after
the Closing, shall
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be subject to the prior written approval of the Buyer (unless incurred in
accordance with the Construction Budget prior to Closing Date).
(b) Form of Consideration. The Purchase Price shall be paid to the
Sellers by delivery of (i) $9,915,000 in cash by wire transfer of immediately
available funds at the Closing, (ii) reimbursement of the Sellers in cash by
wire transfer of immediately available funds at the Closing of the
Reimburseable Costs incurred by the Sellers prior to the Closing and set forth
in part (b) of Schedule 2.04, and (iii) reimbursement of the Sellers in cash by
certified or cashier's check of the Reimbursable Costs within 30 days after
receipt by the Buyer of receipts, invoices and/or other written documentation,
in form and substance reasonably satisfactory to the Buyer, of the Reimbursable
Costs for which a Seller is entitled to reimbursement, but only to the extent
such Reimbursable Costs have not been paid pursuant to clause (ii) of this
Section 2.04(b).
(c) Allocation of Purchase Price. The Purchase Price will be allocated
among the Partnership Interests and the Stock of each of the Companies in
accordance with part (c) of Schedule 2.04.
Section 2.05 [Intentionally Omitted.]
Section 14.06 Conveyance and Transfer.
The parties hereto agree that the purchase and sale of the Interests shall
be effected by bills of sale, stock powers, endorsements, deeds, assignments
and other instruments of transfer, all in such form as may be reasonably
requested to vest in the Buyer ownership of the Interests.
Section 14.07 Certain Assets.
On the Closing Date, the Sellers and certain of the 49% Sellers shall
cause Xxxx/Xxxxxxxx Ltd., Inc. ("XXXX/XXXXXXXX") to transfer and assign to the
Buyer, free and clear of all Liens and for no additional consideration, all of
the assets of Xxxx/Xxxxxxxx which are or have been used in any of the
Businesses (the "E/C ASSETS"). Such assignments and transfer shall be effected
by assignments and other instruments of transfer, all in such form as may be
reasonably requested to vest in the Buyer ownership of the E/C Assets.
ARTICLE XV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, represent and warrant to the Buyer that:
Section 3.01 Organization, Good Standing and Qualification.
(a) Each Seller, XXXX, Xxxx/Xxxxxxxx and each Subsidiary is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and is duly licensed or qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of the business transacted by it or the
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character of the property owned or leased by it makes such licensing or
qualification by it necessary.
(b) IMA is duly organized and validly existing as a general
partnership under the laws of the State of California and is duly licensed or
qualified to do business as a foreign general partnership and is in good
standing in each jurisdiction in which the nature of the business transacted by
it or the character of the property owned or leased by it makes such licensing
or qualification by it necessary.
(c) Part (c) of Schedule 3.01 sets forth a correct and complete list
of the jurisdictions of incorporation of each of the Sellers, CAMP and the
Subsidiaries and all jurisdictions in which each Company or CAMP is licensed or
qualified to do business.
Section 3.02 Authority.
Each Seller, CAMP and each Subsidiary has all requisite corporate power
and authority, and IMA has the requisite general partnership power and
authority, to own and operate its properties and to carry on its business as it
is now being conducted. Each of the Sellers has all requisite corporate power
and authority to execute and deliver this Agreement and each of the other
Documents to which it is or will be party, and to perform its obligations
hereunder and thereunder. The execution and delivery by each of the Sellers of
this Agreement and each of the Documents to which it is or will be a party and
the consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action. Assuming the due authorization,
execution and delivery hereof and of any Documents to be executed by the Buyer,
this Agreement constitutes, and each of the Documents to be executed by a
Seller, upon execution and delivery thereof by such Seller, will constitute, a
legal, valid and binding obligation of such Seller, in each case enforceable in
accordance with their respective terms, subject to bankruptcy, insolvency and
similar laws affecting the rights and remedies of creditors and secured parties
generally and general principles of equity.
Section 3.03 Capitalization.
(a) Each Subsidiary and CAMP is authorized to issue the amount and
class of shares of its capital stock set forth on part (a) of Schedule 3.03.
The number of issued and outstanding shares of capital stock of each Subsidiary
and CAMP as of the date hereof is as set forth on part (a) of Schedule 3.03.
Neither CAMP nor any Subsidiary has any series or classes of capital stock
authorized or issued and outstanding, except as set forth in part (a) of
Schedule 3.03, nor are any shares of any such corporation's capital stock held
in treasury.
(b) The partners of IMA are as set forth in part (b) of Schedule 3.03.
(c) There are no issued or outstanding bonds, debentures, notes or
other indebtedness of any Company or of CAMP which has the right to vote (or
which is convertible into other securities having the right to vote) on any
matters on which stockholders (or, in the case of IMA, partners) of any Company
or of CAMP may vote ("VOTING DEBT"). There are no outstanding or authorized
subscriptions, warrants, options, contracts, rights (preemptive or
4
otherwise), calls, commitments or demands of any character relating to any (i)
authorized and issued or unissued shares of capital stock of any Subsidiary or
of CAMP or (ii) partnership interests in IMA, or outstanding securities,
obligations, rights, Voting Debt or other instruments convertible into or
exchangeable for such stock or interests, or which obligate any Company or CAMP
to seek authorization to issue additional shares of any class of stock or
partnership interests or Voting Debt, nor will any be created by virtue of this
Agreement or the transactions contemplated hereby.
(d) All of the outstanding shares of capital stock (or, in the case of
IMA, all of the outstanding general partnership interests) of each Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are owned beneficially and of record by the Sellers and the 49% Sellers, as set
forth in part (d) of Schedule 3.03 hereto, and, as to the Sellers, free and
clear of all Liens, and are not subject to, nor have they been issued in
violation of, any preemptive rights and, except for the general partnership
interests in IMA, no personal liability is attached to the ownership thereof.
All of the outstanding shares of capital stock of CAMP have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
beneficially and of record by West Coast Amphitheater Corp., free and clear of
all Liens, and are not subject to, nor have they been issued in violation of,
any preemptive rights and, no personal liability is attached to the ownership
thereof.
Section 3.04 Subsidiaries.
Except as set forth on Schedule 3.04, no Company owns, beneficially or of
record, or controls, directly or indirectly, any capital stock, securities
convertible into or exchangeable for capital stock or any other ownership or
participation interest in any corporation, association, partnership, joint
venture, limited liability company or other entity. The Sellers and certain of
the 49% Sellers collectively own, beneficially and of record, all of the
outstanding shares of capital stock of Xxxx/Xxxxxxxx, as set forth on Schedule
3.04.
Section 3.05 No Default; Non-Contravention.
Neither the execution and delivery by either of the Sellers of this
Agreement or any of the Documents to which either are a party nor the
consummation by either of the Sellers of the transactions hereby and thereby
contemplated shall (a) constitute any violation or breach of either Seller's
certificate of incorporation or by-laws or (b) (i) subject to the receipt of
the consents listed on Schedule 3.06, constitute a default under or a breach
of, or result in the acceleration of any obligation under, any provision of any
contract, lease, mortgage or other instrument to which any Seller or Company is
a party or by which it is bound or by which any of the Businesses, Companies or
Interests or any of the assets of any Company or CAMP or any of the E/C Assets
may be affected; (ii) violate any Governmental Rule directly or indirectly
affecting any Seller, CAMP or any Company or any of the Businesses, E/C Assets
or Interests; (iii) result in the creation of any Lien on any of the assets of
any Company, any of the E/C Assets or on any of the Interests; or (iv) result
in the termination of any license, franchise, lease or Permit to which any
Seller or Company is a party or by which it is bound.
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Section 3.06 Consents and Approvals.
Except for all filings and the termination of the waiting period under the
HSR Act and as set forth on Schedule 3.06, no authorization, approval, order,
license, permit, franchise or consent and no registration, declaration, notice
or filing by or with any Governmental Body or other party is required for the
execution and delivery by any Seller of this Agreement or any other Document or
the consummation by any such party of the transactions contemplated hereby and
thereby.
Section 3.07 Personal Property.
(a) The Companies and CAMP have good and marketable title to all of
the personal property, tangible and intangible, reflected in the Financial
Statements for the year ended December 31, 1997, free and clear of all Liens of
every nature, other than Permitted Liens. The assets of the Companies and CAMP,
together with the E/C Assets, (i) are adequate for the conduct of the
Businesses as presently conducted and comprise the capacity and right to
perform the same services in the same manner as presently being performed by
the Companies and CAMP and (ii) notwithstanding the Sellers' rights after the
Closing under Section 9.04(a), represent all of the "at risk" music and concert
production or promotion businesses in the greater Los Angeles, California area
and the business involved in the development of the Amphitheater conducted by
the Sellers.
(b) By acquiring the Companies and CAMP (through the acquisition of
the Interests and the interests of the 49% Sellers in the Companies), the Buyer
is acquiring all of the Sellers' assets used by the Companies and CAMP in the
Businesses and no other material assets, other than the E/C Assets, are needed
to conduct the Businesses as the same are presently conducted. The tangible
assets of the Companies and the E/C Assets are in good working order, ordinary
wear and tear excepted, and except where the failure to be in such condition in
any one instance or in the aggregate would not have a Material Adverse Effect
on any Company or any Business. None of the Companies have any assets which are
not used in the Businesses.
(c) The E/C Assets are listed on Schedule 3.07 hereto. The transfer of
the E/C Assets pursuant to Section 2.07 has been duly authorized by all
necessary action. Xxxx/Xxxxxxxx has all requisite corporate power and authority
to own and operate the E/C Assets and to carry on its business as it is now
being conducted. Xxxx/Xxxxxxxx has all requisited corporate power and authority
to execute and deliver documentation evidencing the transfer by it to the Buyer
of the E/C Assets and to perform its obligations thereunder. Assuming the due
authorization, execution and delivery thereof by the Buyer, if applicable, each
such document will constitute, a legal, valid and binding obligation of
Xxxx/Xxxxxxxx, in each case enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency and similar laws affecting the rights
and remedies of creditors and secured parties generally and general principles
of equity.
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Section 3.08 Real Property.
(a) CAMP and each Company has good and marketable title, free and
clear of all Liens, to all of its real properties, except for (i) Permitted
Liens and (ii) Liens noted on the title commitment attached hereto as Exhibit
A.
(b) Set forth in part (b) of Schedule 3.08 is a list of all of the
real property owned, leased or licensed by each Company and CAMP (collectively,
the "REAL PROPERTY"). Neither any Seller nor Xxxx/Xxxxxxxx owns, leases or
licenses any real property used in any Business. All of the licenses, leases
and subleases set forth in part (b) of Schedule 3.08 are in full force and
effect, free of subtenancies and other occupancy rights.
(c) All Real Property which is leased or licensed by a Company or CAMP
is subject to a valid and binding lease or license agreement which is
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy and other laws affecting the enforceability of creditors'
rights generally or laws governing the availability of specific performance or
other equitable remedies. A true and complete copy of each such lease agreement
has been delivered or made available to the Buyer. Each of CAMP and each
Company which is a party to any such lease or license agreement has performed
all of its obligations required to be performed by it thereunder, and no
default exists under any provision thereof, nor has any event occurred
thereunder which, with the lapse of time or the giving of notice or both, would
constitute a default thereunder by any party thereto.
(d) Part (d) of Schedule 3.08 sets forth a correct and complete list
of all Permits currently held by any of the Companies or CAMP with respect to
the Real Property. Neither any Seller nor Xxxx/Xxxxxxxx holds any Permit with
respect to the Real Property. No Seller Entity has received any notice of any
violation or revocation of any of such Permits nor, to any such party's
knowledge, has any such revocation been threatened.
(e) There are no special or other assessments for public improvements
or otherwise now affecting the Real Property nor are any such assessments
pending nor do any of the Seller Entities know of any proposed, contemplated or
threatened special or other assessments affecting the Real Property that may
result in special or other assessments affecting the Real Property.
(f) The Real Property and the current use, occupation and condition
thereof do not violate any Permits or Contracts or any applicable deed
restrictions or other covenants, restrictions or agreements, site plan
approvals, zoning or subdivision regulations or urban development plans
applicable to the Real Property or any other Governmental Rules applicable to
the Real Property.
(g) All roads bounding the Real Property are public roads.
(h) Except as set forth in part (o) of Schedule 3.08 and in the Option
Agreement and except for the Permits and approvals set forth on Schedule 1 to
the opinion of Xxxxx, Xxxxxxxxx & Xxxxxxx attached hereto as Exhibit B, no
subdivision or other approvals of any
7
Governmental Body relating to the Real Property are necessary in connection
with the transactions contemplated hereby.
(i) There has been no condemnation or taking of any part of the Real
Property and no condemnation or taking is pending or, to the knowledge of the
Seller Entities, threatened.
(j) No Seller Entity has received any notices (i) from any
Governmental Body alleging any fire, health, safety, building, pollution,
environmental, zoning or other violation of law with respect to the Real
Property which has not been corrected as of the date hereof, or (ii) from any
insurance company concerning the discontinuation or potential discontinuation
of any insurance coverage on the Real Property.
(k) All real property Taxes due on or with respect to the Real
Property (and, if payable by any Seller Entity as a tenant on leased
properties, real property Taxes due on or with respect to such leased
properties) and all pending Tax certiorari proceedings with respect to the Real
Property owner, in whole or in part, directly or indirectly, by any Seller
Entity, are set forth in part (k) of Schedule 3.08.
(l) Except as set forth in part (l) of Schedule 3.08, other than the
Companies and CAMP, there are no parties in possession of the Real Property and
there are no parties with any use or other possessory rights covering all or
any portion of the Real Property.
(m) There are no security deposits under any leases for Real Property,
except as set forth in part (m) of Schedule 3.08.
(n) To the knowledge of each Seller Entity, no tax lot of any other
party encroaches on the Real Property.
(o) Sufficient parking facilities for current use and satisfaction of
applicable Governmental Rules exist with respect to the Real Property, and,
except as set forth in part (o) of Schedule 3.08, such facilities are in
adequate condition to be used as such and the Companies and CAMP possess and
are transferring to the Buyer hereunder, all of their right, title and interest
therein, including, without limitation, the leases and Permits with respect
thereto.
(p) (i) There is no building system with respect to the Xxxxxx Xxxxxxx
Amphitheater which is not in working order, (ii) Except as set forth in part
(p) of Schedule 3.08, there is no physical damage to the Xxxxxx Xxxxxxx
Amphitheater in excess of $25,000 for which there is no insurance in effect
covering the full cost of restoration, (iii) There are no structural defects
relating to the Xxxxxx Xxxxxxx Amphitheater which would prevent the use of the
Xxxxxx Xxxxxxx Amphitheater in the manner in which it is intended to be used by
the Buyer and (iv) Except as set forth in part (p) of Schedule 3.08, there is
no current renovation or restoration or tenant improvement to the Xxxxxx
Xxxxxxx Amphitheater, the cost of which exceeds $25,000. Buyer shall be solely
responsible for payment for the repairs and improvements referred to on part
(p) of Schedule 3.08.
8
Section 3.09 Litigation.
Set forth on Schedule 3.09 is a complete and accurate list of all
litigations in which the Seller Entities or Xxxx/Xxxxxxxx are currently
involved (which in the case of the Sellers and Xxxx/Xxxxxxxx relate to the
Businesses, the E/C Assets, the Interests, CAMP or the Companies), regardless
of size, merits or whether covered by insurance. Schedule 3.09 also contains an
accurate and fair summary of each such litigation, including the description of
the claims, the perceived merit thereof, the name of counsel to the Seller
Entities or Xxxx/Xxxxxxxx, as applicable, the court in which the action is
pending, the amount of any damage claim, whether the claim is covered by
insurance, the relevant deductible with respect thereto and whether the
premiums have been paid to date on the applicable policy. Except as
specifically noted on Schedule 3.09, (i) there are no legal actions, suits,
proceedings, arbitrations, controversies or investigations (whether or not
purportedly on behalf of or against any Seller Entity or Xxxx/Xxxxxxxx) pending
or, to the knowledge of each Seller Entity, threatened or contemplated, by any
Governmental Body or other party against any Seller Entity or Xxxx/Xxxxxxxx in
any way relating to or affecting CAMP, any of the Interests, any of the
Companies, any of the Businesses, any of the E/C Assets or the transactions
contemplated by this Agreement and (ii) neither Xxxx/Xxxxxxxx nor any of the
Seller Entities is a party to or subject to any judgment, order, writ,
injunction or decree in any way relating to or affecting CAMP, any of the
Interests, any of the Companies, any of the E/C Assets or the Businesses or the
transactions contemplated by this Agreement.
Section 3.10 Intellectual Property.
Schedule 3.10 sets forth a correct and complete list and brief
identification of all assets of the Companies and Xxxx/Xxxxxxxx utilized in or
relating to the marketing, advertising and commercial exploitation of the
products and services of the Businesses, and all patents, patent rights,
unpatented inventions, trademarks, trade names, service marks, copyrights and
other similar proprietary rights (in each case, whether registered or not) and
all applications therefor which patents, patent rights, unpatented inventions,
trademarks, trade names, service marks, copyrights and other similar
proprietary rights are presently or were ever used in the Businesses (the
"INTELLECTUAL PROPERTY"). CAMP does not own any Intellectual Property. No
interest in any Intellectual Property or any manufacturing process, know-how or
trade secrets used in any of the Businesses has been assigned, transferred or
licensed to any third party. Each of the Companies owns or possesses licenses
or other rights to use all Intellectual Property, manufacturing processes,
know-how and trade secrets necessary to conduct the Businesses as now operated.
To the knowledge of the Seller Entities, the use of the Intellectual Property
and such manufacturing processes, know-how and trade secrets in connection with
the Businesses does not infringe upon the rights of any third party. There are
no suits, claims or assessments pending or, to the knowledge of any Seller
Entity, threatened relating to the use of the Intellectual Property or such
manufacturing processes, know-how and trade secrets. No Seller Entity is aware
of any pending or threatened cancellation or revocation of any agreement
granting to any Company rights to any of the Intellectual Property,
manufacturing process, or know-how of others used in the Businesses. Except as
set forth in Schedule 3.10, no person is
9
entitled to any payment in connection with any Intellectual Property,
manufacturing process or trade secret used in the Businesses.
Section 3.11 Contracts.
(a) Schedule 3.11 contains a complete and correct list of all
contracts, arrangements, leases, licenses and agreements as in effect on the
date hereof (the "CONTRACTS") to which CAMP or any Company is a party,
including evidences of indebtedness, whether written or oral, talent
agreements, venue agreements, purchase or sale agreements, agency or
advertising contracts, sponsorship agreements, agreements with employees, sales
representatives and distributors, and agreements with factors, banks or other
lending institutions, except for the leases and licenses for Real Property and
the licenses of Intellectual Property listed on Schedule 3.08 and Schedule
3.10, respectively, and except for any Contract which does not involve a
payment by or to a Company of more than $7,500. The Contracts are all of the
contracts, arrangements, licenses, leases and agreements relating to the
Businesses. A true and complete copy of each written Contract listed on
Schedule 3.11 and a complete and correct summary of each oral Contract listed
on Schedule 3.11 has heretofore been provided or made available to the Buyer.
CAMP or the Company which is a party to a Contract has performed all of its
obligations required to be performed by it, has paid all payments, advances and
royalties required to be paid by it and is not in default under any Contract,
and no event has occurred thereunder in each case which, with the lapse of time
or the giving of notice or both, would constitute such a default and, no other
party to any Contract is in default thereunder. Each of the Contracts listed on
Schedule 3.11 constitutes a valid, binding, enforceable and legal obligation of
CAMP or the Company which is a party thereto and the other parties thereto in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the rights and remedies of creditors and secured parties generally
and general principles of equity. No Seller Entity has received notice that any
party to any of the Contracts is in default thereunder.
(b) Except as set forth in part (b) of Schedule 3.11, none of the
Contracts requires the consent of a third party in connection with the
transactions contemplated hereby.
(c) Except as set forth in part (c) of Schedule 3.11, no Seller Entity
is aware of the assertion by any third party of any claim or potential claim of
breach or default under any of the Contracts or the intention on the part of
any party to any Contract listed on Schedule 3.11 (i) to terminate or
significantly change its existing business relationship with any of the
Companies, CAMP or any of the Businesses or (ii) to fail to renew or extend its
existing business relationship with any of the Companies, CAMP or any of the
Businesses at the end of the term of any existing contractual arrangement
between such third party and any Company, CAMP or any Business.
Section 3.12 Financial Statements.
True and complete copies of the unaudited balance sheets of each of the
Companies as of the years ended December 31, 1995, 1996 and 1997 and the three
month period ended March 31, 1998, and the related unaudited statements of
operations for each of the periods then ended (the "FINANCIAL STATEMENTS") have
heretofore been delivered to the Buyer. The Financial Statements
10
have been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby. The Financial Statements present fairly the financial
condition of each of the Companies as of the dates for which they were
prepared, and the results of operations for the periods then ended.
Section 3.13 Absence of Liabilities.
Except as set forth in the Financial Statements or on Schedules 3.08,
3.09, 3.11, 3.13, 3.14, 3.15, 3.18, and 3.22, neither CAMP nor any Company had,
as of the date thereof, any direct or indirect indebtedness, liability, claim,
loss, damage, deficiency or obligation, fixed or unfixed, xxxxxx or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise (collectively, the "LIABILITIES"), which individually or in the
aggregate exceed $7,500. Except as otherwise set forth on Schedule 3.13, there
are no other Liabilities with respect to the Companies, CAMP or the Businesses
relating to or arising out of any act, transaction, circumstance or state of
facts which occurred or existed after March 31, 1998, other than those
Liabilities arising in the ordinary course of business consistent with industry
and past practice and the terms and conditions of this Agreement and of the
same character, type and magnitude as incurred in the past and which
individually do not exceed $50,000 or, in the case of Liabilities to any Seller
Entity, CAMP or any Affiliate thereof, $25,000. Neither CAMP nor any Company
has any Liabilities other than Liabilities incurred in connection with the
operation of the Businesses.
Section 3.14 Absence of Certain Changes.
Since March 31, 1998, except as set forth on Schedule 3.14, neither CAMP
nor any Company has:
(a) failed to maintain its status as a corporation or general
partnership subsisting under the laws of its jurisdiction of incorporation or
organization;
(b) declared or made any dividend or any distribution or transfer of
any of its assets, real or personal, tangible or intangible to its equity
holders or any of their Affiliates;
(c) made any capital expenditures or commitments for capital
expenditures, including any capitalized lease obligations (for purchase of
equipment or otherwise), in excess of $25,000 or entered into or committed to
enter into any operating lease in connection with its assets, real or personal,
tangible or intangible, or the Businesses for any property or equipment calling
for net increased rentals in excess of the lesser of 5% or $25,000 annually per
lease (over present rentals), or acquired any assets or properties with an
individual or aggregate value in excess of $25,000, in connection with its
assets, real or personal, tangible or intangible or the Business or contracted
to do so;
(d) made any advance or investment to or in any individual, firm,
corporation or other entity, whether by loan, purchase of stock or other
securities, by contributions to capital or otherwise;
11
(e) (i) incurred any Liability relating to the Businesses, other than
those Liabilities arising in the ordinary course of business consistent with
past practice and the terms and conditions of this Agreement, of the same
character, type and magnitude as incurred in the past and which do not exceed
$25,000 in the aggregate or, in the case of the construction of the
Amphitheater, which are consistent with the existing construction budget for
the Amphitheater, or (ii) accelerated the payment of any Liability;
(f) purchased, acquired, sold, assigned or transferred or entered into
any contract or agreement for the purchase, acquisition, sale, assignment or
transfer of any of its assets which are valued in excess of $25,000 in the
aggregate;
(g) subjected to a Lien, any of its assets, real or personal, tangible
or intangible, other than Permitted Liens;
(h) waived any material rights relating to its assets or the
Businesses, whether or not in the ordinary course of business;
(i) made or suffered, or agreed to make or suffer, any new material
contract, arrangement, lease, license or agreement relating to its assets or
the Businesses or any amendment, modification or termination of any existing
Contract, whether or not in the ordinary course of business, other than talent
agreements entered into the ordinary course of business and consistent with
past practice;
(j) made or entered into any bonus payment or arrangement with any of
its employees, officers or agents or granted any increase in the compensation
or fringe benefits (whether or not provided under or pursuant to a Plan) of any
employee or officer, or taken any action that results in an increase in the
cost of any Plan;
(k) changed any of its business policies, including, without
limitation, advertising, marketing policy, payment, collection, budget or other
material policies, or terminated any of its operations;
(l) altered or revised the accounting principles, procedures, methods
or practices relating to the Businesses or any of the assets or liabilities
with respect thereto, including, without limitation, the creation or
modification of any reserves other than as required by GAAP;
(m) disposed of or permitted to lapse any Intellectual Property;
(n) entered into any agreements or arrangements or engaged in any
transactions with or made any cash payments to any of the Seller Entities or
their respective Affiliates;
(o) created, suffered or incurred any damage, destruction or loss
(whether or not covered by insurance) or any other event or condition of any
character which could have a Material Adverse Effect on any Company or CAMP or
any of its assets or any of the Businesses;
12
(p) failed to (i) maintain in full force and effect each Plan (whether
or not listed on Schedule 3.18) in which any employee of CAMP or any Company
participates, (ii) make timely all required contributions thereto or (iii)
administer each such Plan in accordance with its terms and all applicable laws;
(q) authorized for issuance, issued, or sold any shares of its capital
stock or other securities or ownership interests, acquired directly or
indirectly, by redemption or otherwise, any such capital stock or other
securities or ownership interests, reclassified or split-up any such capital
stock, or granted or entered into any options, warrants, calls, agreements or
commitments of any kind with respect thereto;
(r) made any Tax election or entered into any agreement or settlement
with any Tax Authority that affects or could affect the basis for Tax purposes
of its assets or the timing for Tax purposes of income or deduction;
(s) effected or caused to occur any "plant closing" or "mass layoff"
as those terms are defined in the WARN Act or taken any action which caused or
is reasonably likely to cause any liability under any other Governmental Rule
affecting any site of employment, facility, operating unit or employee of any
Business; or
(t) agreed, whether in writing or otherwise, to take any action
described in this Section 3.14.
Section 3.14 Taxes.
(a) Except as otherwise set forth in part (a) of Schedule 3.15, CAMP
and each of the Companies (and each Seller with respect to CAMP and the
Companies) has filed, within the time and manner prescribed by law, all Tax
Returns that it was required to file. All such Tax Returns were correct and
complete in all material respects. Except as otherwise set forth in part (a) of
Schedule 3.15, all Taxes owed by CAMP or any of the Companies (whether or not
shown on any Tax Return) have been paid. Except as otherwise set forth in part
(a) of Schedule 3.15, neither CAMP nor any of the Companies currently is the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by any Tax Authority in a jurisdiction where CAMP or
any of the Companies do not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. There are no Liens on any of the assets of CAMP
or any of the Companies that arose in connection with any failure (or alleged
failure) to pay any Tax. All written assessments of Taxes due and payable by,
on behalf of or with respect to each of the Seller Entities pertaining to CAMP
or any of the Companies have been paid by such party, or, to the extent
disclosed to the Buyer in writing prior to the Closing, are being contested in
good faith by appropriate proceedings and have been reserved against in
accordance with GAAP.
(b) The sale of the Partnership Interests shall cause the current
taxable year of IMA to close on the Closing Date pursuant to Treasury
Regulation Section 1.708-1(b)(1)(iii)(b), and shall cause IMA to terminate
solely for U.S. federal income Tax purposes pursuant to Section 708(b)(1)(B) of
the Code. Since the Sellers purchased their Partnership Interests in
13
IMA, there has not been any sale, transfer, assignment or other disposition of
any interest in IMA, nor has there been any distribution by IMA of any assets
other than cash.
(c) CAMP and each of the Companies has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing by it to each employee, independent contractor, creditor, stockholder,
partner or other third party.
(d) Neither CAMP nor any Company nor any director or officer (or
employee responsible for Tax matters) of either CAMP or any Company expects or
has reason to expect any Tax Authority to assess any additional Taxes for any
period for which Tax Returns have been filed. There is no dispute or claim
concerning any Tax Liability of CAMP or any Company either (i) claimed or
raised by any Tax Authority in writing or (ii) as to which any Seller Entity or
any director or officer (or employee responsible for Tax matters) of CAMP or
any Company has knowledge. Part (d) of Schedule 3.15 lists all U.S. federal,
state, local and foreign income Tax Returns filed with respect to CAMP or any
of the Companies for taxable periods ended after December 31, 1992, and
indicates those Tax Returns that have been audited or are currently the subject
of an audit. The Seller Entities have delivered to the Buyer correct and
complete copies of all federal Tax Returns, examination reports and statements
of deficiencies assessed against or agreed to by CAMP or any Company for any
period subsequent to December 31, 1992.
(e) Neither CAMP nor any Company has waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(f) Neither CAMP nor any Company has filed a consent under Code
Section 341(f) concerning collapsible corporations. Neither CAMP nor any
Company has made any payments, is obligated to make any payments, or is a party
to any agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Section 280G. Neither CAMP nor
any Company has been a United States real property holding corporation within
the meaning of Code Section 897(c)(2) during the applicable period specified in
Code Section 897(c)(1)(A)(ii). CAMP and each Company has disclosed on its
federal Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of Code
Section 6662. Neither CAMP nor any Company is a party to any Tax allocation or
sharing agreement. Neither CAMP nor any Company (i) has ever been a member of
an affiliated group filing a consolidated federal income Tax Return (other than
a group that consisted of only the Companies or CAMP) or (ii) has any Liability
for the Taxes of any other individual, corporation, partnership or other entity
(other than any of the Companies or CAMP) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local, or foreign law) as a
transferee or successor, by contract, or otherwise.
(g) Part (g) of Schedule 3.15 sets forth the following information
with respect to each Company and CAMP as of the most recent practicable date:
(i) the basis of each Company and CAMP in its assets; (ii) the basis of each of
the Sellers in its Interests, and of each of the Companies in its subsidiary's
stock or partnership interests (or the amount of any excess loss account);
(iii) the amount of any net operating loss, net capital loss, unused investment
or other
14
credit, unused foreign tax, or excess charitable contribution allocable to any
such party; and (iv) the amount of any deferred gain or loss allocable to each
party arising out of any deferred intercompany transaction.
(h) The unpaid Taxes of CAMP and the Companies (i) did not, as of
April 30, 1998, exceed the reserve for Tax liabilities (rather than any reserve
for deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the most recent balance sheet (rather than
in any notes thereto) included in the Financial Statements and (ii) do not
exceed that reserve as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of CAMP and the Companies
in filing their Tax Returns.
Section 3.16 Compliance with Laws.
Schedule 3.16 sets forth a correct and complete list of all Permits of
any Governmental Body presently held by the Companies and by CAMP in connection
with the Businesses. The Permits listed in Schedule 3.16 constitute all Permits
which are required in order to allow the Companies and CAMP to continue to
carry on the Businesses and use their assets and properties with respect
thereto as now conducted. Neither Xxxx/Xxxxxxxx nor any Seller holds any
Permits in connection with any of the Businesses. Each Seller Entity, to the
extent applicable, is in compliance in all respects with such Permits and all
applicable Governmental Rules required to be complied with in order to allow it
to continue to carry on the Businesses and use its assets as now being
conducted and used by it. No Seller Entity has received any written
notification of any failure or asserted failure to comply with any such Permits
or any Governmental Rules nor are any of them aware of any failure or asserted
failure to comply with any such Permits or Governmental Rules.
Section 3.17 Employee Matters.
(a) Set forth in part (a) of Schedule 3.17 is a true and complete list
of the name and position of each current employee of each of the Companies,
CAMP and each of the Businesses who earned more than $20,000 in salary, bonus
and overtime and of each independent contractor and agent who was paid more
than $20,000 with respect to the year ended December 31, 1997 or who is
expected to be paid in connection with services provided to the Companies, CAMP
or the Businesses at least such amount with respect to the year ending December
31, 1998.
(b) The Companies, the Business and CAMP are each in full compliance
with all applicable Governmental Rules respecting employment and employment
practices, terms and conditions of employment, wages and hours and
non-discrimination in employment and is not engaged in any unfair labor
practice. There are no pending or, to any Seller Entity's knowledge, threatened
disputes, grievances, charges, complaints, petitions or proceedings involving
the employees of CAMP or any of the Companies or Businesses or any collective
bargaining representatives, and neither CAMP nor any of the Companies or
Businesses has suffered, nor is there pending or, to any Seller Entity's
knowledge, threatened, any strike, lockouts or general work stoppages which
have caused or would cause a cessation of operations of any Business or
15
any facility of such Business, nor is any such strike, lockout or work
stoppage pending or threatened. Neither CAMP nor any of the Companies or
Businesses has been the subject of any orders to show cause, notices of
debarment or administrative proceedings relating to its employment practices.
(c) Except as disclosed in part (c) of Schedule 3.17, none of the
employees of CAMP, the Businesses or the Companies is covered by a collective
bargaining agreement.
(d) The Seller Entities are in compliance with their respective
obligations pursuant to the WARN Act and all other notification and bargaining
obligations arising under any Governmental Rule or otherwise with regard to
employees of the Businesses.
Section 3.18 Employees and Related Agreements; ERISA.
(a) Except as set forth in part (a) of Schedule 3.18, neither any of
the Companies nor any ERISA Affiliate maintains or contributes to, or has any
obligation to contribute to or, during the last six years, has maintained,
contributed to or been obligated to contribute to, and neither any of the
Companies nor any ERISA Affiliate has any liability (including, without
limitation, a liability arising out of an indemnification, guarantee, hold
harmless or similar agreement) with respect to, any Plan. No severance pay
policy or procedure is maintained by any of the Companies or CAMP which does or
could apply to employees of any of the Companies or the Businesses in any form,
whether written or unwritten, and whether or not disclosed to one or more
employees. All Plans identified in part (a) of Schedule 3.18 are in compliance
in all material respects with the applicable provisions of ERISA, the Code and
the Plan documents.
(b) Neither any of the Companies nor any ERISA Affiliate maintains,
contributes to or is obligated to contribute to, or, during the last six years,
has maintained, contributed to or been obligated to contribute to, any Single
Employer Defined Benefit Plan and, except as set forth in part (b) of Schedule
3.18, neither any of the Companies nor any ERISA Affiliate maintains,
contributes to or is obligated to contribute to or, during the last six years,
has maintained, contributed to or been obligated to contribute to, any
Multiemployer Plan or any Multiple Employer Plan or multiple employer welfare
arrangement as defined in Section 3(40) of ERISA.
(c) No event has occurred in connection with which CAMP or any of the
Companies or any Plan identified in Schedule 3.18 or any "plan administrator"
(as defined in Section 3(16) of ERISA) thereof, directly or indirectly, is or
could be subject to liability, other than for routine claims for benefits,
contingent or otherwise, or any lien, whether or not perfected, under the terms
of any Plan or under ERISA, the Code or any other law, regulation or
governmental order applicable to any Plan at any time maintained or contributed
to by any of the Companies or any ERISA Affiliate, including, without
limitation, Sections 302(f), 404, 406, 409, 502(c)(1), 502(c)(3), 502(g),
502(i), 502(1), 601, 602, 603, 604, 605, 606, 607, 608, 4062, 4063, 4064, 4068,
4069, 4071 or 4201 of ERISA, or Sections 412(n), 4971, 4975, 4976, 4980B or
5000 of the Code, or under any agreement, instrument, statute, rule of law or
regulation pursuant to or under which CAMP or any of the Companies has agreed
to indemnify or is required to indemnify
16
any person against liability incurred under, or for a violation or failure to
satisfy the requirements of, any such statute, regulation or order. No Plan
listed in Schedule 3.18 is subject to Section 302 of ERISA or Section 412 of
the Code.
(d) All payments and contributions due from CAMP or the Companies
under each Plan identified in Schedule 3.18 have been made and all amounts
properly accrued to date as liabilities of CAMP or the Companies which have not
been paid have been or will, prior to the Closing Date, have been properly
recorded on the books of CAMP or the Companies and, to the extent not
theretofore paid, will be reflected as a liability on Schedule 3.18 hereto.
(e) No Welfare Benefit Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured) with respect to
any current or former employee of CAMP or any of the Companies or the
Businesses beyond his or her retirement or other termination of service other
than (i) coverage mandated by applicable law or (ii) disability benefits that
have been fully provided for by insurance or otherwise.
(f) The transactions contemplated by this Agreement will not result in
any payment or series of payments by the Buyer, CAMP or any of the Companies to
any person of an "excess parachute payment" within the meaning of Section 280G
of the Code.
(g) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any employee or former employee of CAMP or any
of the Companies or the Businesses to severance pay, unemployment compensation
or any other payment except as expressly provided in this Agreement or (ii)
result in any prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not available.
(h) There has been delivered or made available to the Buyer with
respect to each Plan identified in Schedule 3.18:
(i) A copy of the annual report (with accompanying schedules and
exhibits), if required under ERISA, which has been filed with respect to
such Plan for the two most recently completed plan years. The information
contained in such report (including such schedules and exhibits) is true
and complete and there has been no material adverse change in the
condition of such Plan, Financial or otherwise, since the date thereof;
(ii) A copy of the actuarial report, if any, with respect to
each such Plan for the last two years. The information contained therein,
and the information furnished by the administrator of such Plan or by any
of the Companies or any ERISA Affiliate in connection with the preparation
thereof, is true and complete and there has been no material adverse
change therein since the date thereof;
(iii) A copy of the most recent summary plan description,
Together with each Summary of Material Modifications with respect thereto,
required under ERISA with respect to such Plan, all material employee
communications relating to such Plan,
17
distributed within the last 12 months and a true and complete copy of such
Plan together with any current filings with the Internal Revenue Service;
(iv) If such Plan is funded through a trust or any third party
funding vehicle, a copy of the trust or other funding vehicle and the
latest financial statements thereof; and
(v) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan that is intended to
qualify under Section 401 of the Code.
(i) Neither any of the Companies nor any ERISA Affiliate has made any
agreement, understanding or promise, whether written or oral, to create,
establish, sponsor, maintain or contribute, directly or indirectly, to or under
any additional Plan for the benefit of current or former employees of CAMP, the
Companies or the Businesses nor, except as set forth in part (i) of Schedule
3.18, to amend or modify any existing Plan identified in Schedule 3.18 in any
manner not reflected in the plan documents of such Plan delivered or provided
to the Buyer on or before the date hereof.
(j) Each Plan to which any of the Companies or any ERISA Affiliate
contributes or has any obligation to contribute which is intended to be
qualified under Section 401 of the Code, has received a favorable determination
letter from the Internal Revenue Service with respect to such qualification and
with respect to the exemption from tax of the trusts created thereunder under
Section 501(a) of the Code, or will within the appropriate remedial amendment
period under Section 401(b) of the Code, apply for such letter, and nothing has
occurred that has affected or is likely to affect adversely such qualification
or exemption since the date of any such letter with respect to each Plan.
(k) All material reports and other information required under ERISA
or any other applicable law or regulation to be filed in respect of any Plan by
the administrator thereof or by any of the Companies or any ERISA Affiliate on
or prior to the date hereof with the relevant governmental authority and/or
distributed or made available to any Plan participant and beneficiary
(including "alternate payees", as such term is defined in Section 206(d)(3)(K)
of ERISA), as the case may be, have been filed, distributed or made available
in accordance with ERISA or such other applicable law or regulation, as the
case may be, and all such reports and other information are true and complete
in all material respects as of the date given.
(l) Neither CAMP nor any of the Companies has entered into any
agreement, written or otherwise, relating to any Plan providing medical
benefits obligating CAMP or any of the Companies or its successor in interest
to make any supplemental or retrospective premium payments for the current or
any prior contract period in the event of adverse experience, termination of
the minimum premium arrangement or termination of an insurance contract
relating to such Plan.
(m) There are no claims, lawsuits, arbitrations or other actions
pending or threatened against any of the Companies or any ERISA Affiliate or
any administrator, trustee or
18
other fiduciary of any Plan listed on Schedule 3.18 with respect to any Plan
listed on Schedule 3.18. No prohibited transaction has occurred under any such
Plan.
(n) No Plan listed on Schedule 3.18 is under audit or investigation
by the Internal Revenue Service or the U.S. Department of Labor or any other
governmental body, and no completed audit or investigation, if any, has
resulted in the imposition of any tax or penalty.
(o) There are no leased employees within the meaning of Section
414(n) of the Code who perform services for CAMP or any of the Companies or the
Businesses.
Section 3.19 Environmental Compliance.
(a) (i) Hazardous Substances have not been generated, used, treated,
handled, stored, released or disposed of, on, at, from, under or about (x) any
property or facility now or previously owned, operated or occupied by any
Seller Entity (or any of its predecessors) and used in connection with the
Businesses or by the Companies or CAMP (or any of their predecessors), (y) any
property or facility now or previously owned, operated or occupied by any
Affiliate of any Seller Entity (or any of its predecessors) and used in
connection with the Businesses or by the Companies or CAMP (or any of their
predecessors) or (z) the property on which the Amphitheater is to be built
(collectively, the "PREMISES"), or transported to or from such Premises, except
in compliance with Environmental Laws, (ii) the activities, operations and
business carried out at or on the Premises by the Seller Entities, their
Affiliates and their predecessors, including, but not limited to, the business
conducted at the Premises or any past or ongoing alterations or improvements at
the Premises is, and has been at all times in compliance with all Environmental
Laws, and with all agreements with governmental agencies, court orders, and
administrative orders regarding Environmental Laws and Environmental Conditions
at or relating to the Premises, and (iii) no further action is required to
remedy any Environmental Condition or the violation of any Environmental Law.
(b) Except as disclosed on Schedule 3.09, there are no pending, and
no Seller Entity is aware of any threatened, litigations or proceedings before
any Governmental Body arising under any Environmental Law, or the existence of
any Environmental Condition at, from or caused by operations now or previously
conducted at the Premises or by the Businesses, and no Seller Entity has (i)
received any notice of and has no actual or constructive knowledge that any
third party, Governmental Body or any employee or agent thereof, has determined
or has alleged, threatens to determine or requires an investigation under any
Environmental Law to determine that there exists any Environmental Condition or
any violation of any Environmental Law, or the presence, release, threat of
release, or placement on, at, under or about the Premises, or the use,
handling, manufacturing, generation, production, storage, treatment,
processing, transportation or disposal of any Hazardous Substances on, at,
under, from or about the Premises; (ii) received any notice under the citizen
suit provision of any Environmental Law in connection therewith; or (iii) other
than with respect to the environmental surveys to be performed on behalf of the
Buyer in connection with the Acquisition, received any request for inspection
or request for information, notice, demand, administrative inquiry or any
formal or informal complaint or claim with respect to or in connection with any
Environmental Condition
19
or any Environmental Law, including, without limitation, any Environmental Law
referring or relating to Hazardous Substances relating to the Premises or any
facilities, operations or activities conducted thereon or any business
conducted by any Company or any of its predecessors.
(c) No Lien has been imposed or asserted on any assets of any Seller
Entity by any Governmental Body or other person in connection with any
Environmental Law or Environmental Condition.
(d) CAMP and each Company (i) has all Permits required pursuant to
any Environmental Laws necessary for its activities and operations of its
Business and for any past or ongoing alterations or improvements at any
Premises, (ii) is not in violation of any such Permits and has applied for
renewals where necessary and (iii) such Permits are assignable to the Buyer or
will not terminate or lapse as a result of the consummation of the Acquisition.
(e) No storage tanks presently exist on, at, under or about any
Premises, or, to the knowledge of any Seller Entity, previously existed on, at,
under or about any Premises, or, to the knowledge of the Seller Entities, are
located on any adjoining property.
(f) The Seller Entities have heretofore delivered to the Buyer copies
of all documents, records, and information in the possession or control or, to
the Seller Entities' knowledge, available to the Seller Entities concerning
Environmental Conditions relevant to the Businesses, the Premises, any
predecessors and/or any facilities or operations of the Companies, CAMP or the
Businesses, whether generated by a Seller Entity or others, including, without
limitation, environmental audits, environmental risk assessments, or site
assessments of the Premises and/or any adjacent property or other property in
the vicinity of any Premises owned or operated by any Seller Entity or others,
documentation regarding offsite disposal of Hazardous Substances, reports and
correspondence (the "ENVIRONMENTAL DOCUMENTS").
(g) The Businesses have been operated in compliance with all
Governmental Rules regarding so-called noise pollution. CAMP and each of the
Companies has all Permits required pursuant to any applicable Governmental
Rules necessary for its activities and operations of its Business, is not in
violation of any such Permits and has applied for renewals where necessary and
such Permits are assignable to the Buyer or will not terminate or lapse as a
result of the consummation of the Acquisition. There are no pending, and no
Seller Entity is aware of any threatened, litigations or proceedings before any
Governmental Body in which any person or entity alleges the violation of any
Governmental Rule regarding noise or seeks, directly or indirectly, to revoke
or limit the relevant Permits or the activities of the Businesses with respect
to such matter.
Section 3.20 Insurance.
CAMP and each Company has reasonably adequate insurance coverage for its
assets and the operations of the Businesses owned or operated by it. Set forth
on Schedule 3.20 is a complete and correct list of all policies of insurance
carried by CAMP and each Company or pursuant to which such party is named
beneficiary or pursuant to which its assets or its Business
20
are currently insured or have been insured for the past five years and a brief
description of each such policy, including, without limitation, the
identification of the insured, the amount and purpose of the insurance and the
amount of the deductible. True and complete copies of all such policies have
been delivered or made available to the Buyer. All of such policies are in full
force and effect; all premiums due and payable in respect of such policies have
been paid in full; and there exists no default or other circumstance which
would create the substantial likelihood of the cancellation or non-renewal of
any such policy. The Seller Entities have notified such insurers of any claim
known to them which they believe is covered by any such insurance policy and
have delivered to the Buyer a copy of any such claim.
Section 3.21 Accounts Receivable.
All accounts receivable of CAMP and the Companies arose from bona fide
transactions in the ordinary course of business of the Businesses, represent
credit extended in a manner consistent with the historic trade and credit
practices of the Businesses and industry practice.
Section 3.22 Transactions with Affiliates.
Except as set forth in Schedule 3.22, no Seller Entity is, nor for the
past year has been, a party to, bound by, benefited from, or obligated under,
any agreements, understandings, indebtedness, obligation or any other
transaction with any other Seller Entity relating to, CAMP, the Companies, the
Businesses, the E/C Assets or the Interests.
Section 3.23 Finder's Fees.
Neither Xxxx/Xxxxxxxx nor any Seller Entity has incurred any liability for
finder's or brokerage fees or agent's commissions in connection with this
Agreement or the transactions hereby contemplated.
Section 3.24 Absence of Certain Business Practices.
All tickets sold in connection with the operation of the Businesses are
sold in conformity with all venue agreements, all talent agreements and
industry practice, and are sold in compliance with all Governmental Rules and
solely through nationally recognized ticket outlets or the Business itself, and
not to or through ticket brokers or scalpers, and no Seller Entity authorizes,
or is aware of, the withholding of any tickets from public on-sale availability
for the purpose of making such tickets available to ticket brokers or scalpers.
The Businesses and the Companies have established, and are in compliance with,
policies and procedures to ensure the foregoing.
Section 3.25 Certain Payments.
No Seller Entity, nor any director, officer, agent, partner or
employee thereof or any other person associated with or acting for or on behalf
of such Seller Entity has directly or indirectly (a) made or agreed to make any
contribution, gift, bribe, rebate, payoff, influence payment, kickback or other
payment (whether in cash or otherwise) to any person, private or public,
21
regardless of form, whether in money, property, or services, in violation of
any applicable law, rule or regulation (i) to obtain favorable treatment in
securing business, (ii) to pay for favorable treatment for business secured,
(iii) to obtain special concessions or for special concessions already
obtained, for or in respect of any Seller Entity or (iv) to pay for any
lobbying or similar services or (b) established or maintained any fund or asset
that has not been recorded in the books and records of such Seller Entity.
Section 3.26 Disclosure.
No representations or warranties made by the Seller Entities in this
Agreement and no statement contained in any Document (including, without
limitation, the schedules hereto and thereto), certificate, or other writing to
be executed and delivered by any of the Seller Entities or Xxxx/Xxxxxxxx
pursuant to the provisions hereof or the transactions contemplated hereby,
contains or will contain any untrue statement of material fact, or omits or
will omit to state any material fact necessary in light of the circumstances
under which it was made, in order to make the statements herein or therein not
misleading.
Section 3.27 Xxxxxx Xxxxxxx.
Without limiting any other representations or warranties contained in
Article III:
(a) Based upon the advice of Xxxxxxxx, Xxxxxx and Xxxxxxx, Los
Angeles, California, the Seller Entities do not believe that the Amended and
Restated Agreement Re Ground Lease, dated October 1, 1991 between The Irvine
Company and IMA, is in force or effect or that the indemnification obligations
of the parties thereto are enforceable. That certain Ground Lease dated as of
March 1, 1997 between The Irvine Company and IMA (the "GROUND LEASE"), is in
full force and effect and has not been modified or amended by either party
thereto (except for the modifications contained in the consent of the Irvine
Company delivered in connection with the transactions contemplated hereby).
Neither party is in default under such agreement.
(b) Except for the litigation described under the subheading "Xxxxxx
Xxxxxxx Amphitheater" on pages 2 and 3 on Schedule 3.09, there is no pending or
threatened litigation or other challenge to the validity of the Ground Lease or
to the tenant's estate and rights thereunder. Based upon the advice of
Xxxxxxxx, Xxxxxx and Xxxxxxx, Los Angeles, California, the Seller Entities do
not believe that the claims and challenges of Lion Country Safari are likely to
result in the demolition of the Xxxxxx Xxxxxxx amphitheater or are meritorious.
(c) Except as disclosed in part (p) of Schedule 3.08 and part (o) of
Schedule 3.14, the Xxxxxx Xxxxxxx amphitheater and related improvements have
not been damaged in any material respect by fire or, to any Seller Entity's
knowledge, earthquake, or other casualty and neither such improvements nor
their site is the subject of any pending or, to the knowledge of any Seller
Entity, threatened condemnation or similar proceeding.
(d) Except as disclosed in part (p) of Schedule 3.08 and part (o) of
Schedule 3.14, the Xxxxxx Xxxxxxx amphitheater, related improvements, parking
facilities, and roadways
22
comply in all material respects with all relevant zoning, subdivision, land
use, environmental, seismic, building code and similar Governmental Rules
(after giving effect to any "grandfathering" or similar provision of any
Governmental Rule which as applied to the Xxxxxx Xxxxxxx Amphitheater would
require different compliance than for any structure currently under
construction). No notices of violations of any nature have been issued or
threatened.
(e) The Sellers have delivered to the Buyer true and complete copies
of all plans and specifications, engineering reports, studies and consultant's
reports, and made available all correspondence files and other relevant
information in its possession concerning the physical aspects and the operation
of the Xxxxxx Xxxxxxx amphitheater.
(f) Except for the consent of The Irvine Company, as lessor under the
Ground Lease, no third-party consent (from any Governmental Body or any other
Person, other than such consents previously received by the Sellers and which
remain in full force and effect) is required in connection with the transfer of
ownership and control of IMA (and its material assets, including without
limitation, the Xxxxxx Xxxxxxx amphitheater) to the Buyer (or an Affiliate of
the Buyer) as contemplated by this Agreement. All costs and expenses payable to
The Irvine Company associated with such consent shall be paid by the Sellers.
(g) Conditional Use Permit 80 CP 0358 (i) is in full force and
effect, (ii) has not been modified and (iii) does not materially affect or
limit the use or operation of the Xxxxxx Xxxxxxx amphitheater as the same has
been historically used and operated. No Seller Entity has any reason to believe
that there will be any material change in the manner in which said Permit is
enforced. All of the terms set forth in said Permit have been materially
complied with and are currently being materially complied with and no Seller
Entity has received a notice of default thereunder.
(h) The operation of El Toro Marine Base, as currently and
historically operated, has not materially and adversely affected the operation
of the Xxxxxx Xxxxxxx amphitheater, as currently and historically operated, and
none of the Seller Entities has any knowledge of any change or proposed change
in the operation of El Toro Marine Base that is reasonably likely to materially
and adversely affect the use and operation of the Xxxxxx Xxxxxxx amphitheater
in the manner in which it is intended to be operated. Other than speculation in
news reports that El Toro Marine Base may be converted to residential or civil
aviation use, the Seller Entities have no knowledge of any future non-military
use of El Toro Marine Base.
(i) Wild Rivers, a California general partnership, will approve the
form of reciprocal easement agreement regarding parking, ingress, egress and
drainage at the Xxxxxx Xxxxxxx amphitheater, a copy of which is attached hereto
as Exhibit C as required in connection with the City of Irvine's approval of
the subdivision maps with respect thereto, and the Sellers have no reason to
believe Wild Rivers will not approve the form of reciprocal easement agreement.
Said reciprocal easement shall be submitted to the City of Irvine as soon as
practicable and the Sellers have no reason to believe that approval thereof
will not be granted without material changes thereto.
23
Section 3.28 Camarillo Amphitheater Project.
Without limiting any other representations or warranties contained in
Article III:
(a) The Camarillo Amphitheater Option Agreement (the "OPTION
AGREEMENT"), dated as of May 21, 1996, between the County of Ventura and
Camarillo Amphitheater Managing Partners, Inc. ("CAMP"), a wholly-owned
subsidiary of West Coast Amphitheater Corp., is in full force and effect and,
except as disclosed on Schedule 3.11, has not been amended, modified,
transferred or assigned by either party thereto. Neither party is in default
under the Option Agreement nor does any condition exist which, with the giving
of notice, the passage of time or both, would constitute a default thereunder,
except as set forth in Paragraph 1 of the Camarillo Amphitheater Option
Agreement Extension, dated March 17, 1998. The County of Ventura has not
notified any Seller Entity or CAMP that it intends to nor, to the knowledge of
the Seller Entities and CAMP, has the County of Ventura threatened to terminate
or cancel the Option Agreement. The form of concession agreement attached to
the Option Agreement (the "CONCESSION AGREEMENT") has not been modified, and
CAMP's right under the Option Agreement to enter into the Concession Agreement
and to develop, own and operate the Project (as hereinafter defined) has not
been challenged by pending or threatened government action or litigation or,
except as disclosed under the subheading "Camarillo Amphitheater" on Schedule
3.09, by similar actions of private parties.
(b) The development and construction of the Amphitheater (the
"PROJECT"), as contemplated by the Option Agreement and the Concession
Agreement, and as described in (i) the plans and specifications therefor
prepared by Xxx Xxxx Associates and dated January 12, 1998, February 26, 1998
and April 23, 1998 and (ii) the Construction Budget, can be substantially
completed as proposed in, and in accordance with, such plans and specifications
and Budget and for the amounts currently set forth in the Construction Budget,
except as disclosed on the final page of the Construction Budget with respect
to assets to be leased. Upon the Closing, the Buyer will be the beneficial
owner of the plans and specifications therefor prepared by Xxx Xxxx Associates.
(c) The plans and specifications for the Project (other than the
redesign of the entrance to the Project to respond to the "wetlands" issue)
have been submitted for approval to the County of Ventura and no Seller Entity
has any reason to believe that such plans and specifications will not be
approved without material changes thereto.
(d) The Project, as described in the plans and specifications
therefor, complies in all material respects with all applicable municipal and
regional zoning, subdivision and land use requirements, except that a portion
of the Project site consists of "wetlands" under federal and state Governmental
Rules.
(e) Although a portion of the Project site consists of "wetlands"
under federal and state Governmental Rules, based on advice from the Sellers'
land use consultant, the Sellers have no reason to believe that approval of the
Project by the United States Army Corps of Engineers is required in view of the
minimal effect of the Project on such wetlands.
24
(f) The letters, dated March 19, 1998 and March 24, 1998,
respectively, between the United States Department of the Interior and the
County of Ventura, copies of which are attached hereto as Exhibits D-1 and D-2,
are the only correspondence known to the Seller Entities with the United States
Department of the Interior and relating to the Project. No Seller Entity has
any reason to believe that the United States Department of the Interior intends
to take any action which could reasonably be expected to adversely affect the
Project, the development thereof in accordance with the plans and
specifications therefor or the change in control of CAMP to the Buyer or an
Affiliate of the Buyer.
(g) All required environmental impact reports for the Project have
been duly submitted and approved and, except as disclosed on Schedule 3.09, are
not currently subject to pending or threatened litigation or other challenges
by any Governmental Body or private parties.
(h) Intentionally Omitted.
(i) The Sellers have delivered to the Buyer true and complete copies
of all plans and specifications, studies, consultants' reports and feasibility
analyses and made available all correspondence files and similar materials and
information in their possession or control relating to the Project.
(j) Except for the consent of Ventura County, no third-party consent
(from any Governmental Body or other Person) is required in connection with the
transfer of ownership and control of CAMP to the Buyer or any Affiliate of the
Buyer as contemplated by this Agreement.
(k) CAMP may exercise the Option Agreement at any time upon executing
the Concession Agreement, notwithstanding that certain ministerial or
non-material changes thereto may be requested or required.
(l) The Sellers have requested the approval of the County of Ventura
to the change in control of CAMP to Buyer or a Subsidiary of Buyer, have
requested such to be placed on the agenda of the May 12, 1998 meeting of the
Board of Supervisors of the County of Ventura, and have no reason to believe
that the approval of the Board of Supervisors of the County of Ventura to such
change in control will not be granted at such meeting and, in any event, in the
form presented, without conditions.
25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers that:
Section 4.01 Organization, Good Standing and Qualification.
The Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly licensed or
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the nature of the business transacted by it or the
character of the property owned or leased by it makes such licensing or
qualification by it necessary, other than in such jurisdictions where the
failure so to qualify would not, individually or in the aggregate, have a
Material Adverse Effect on the Buyer and its subsidiaries, taken as a whole.
Section 4.02 Authority.
The Buyer has all requisite corporate power and authority to own and
operate its properties and to carry on its business as it is now being
conducted and to execute and deliver this Agreement and each of the Documents
to which it is or will be a party, and to perform its obligations hereunder and
thereunder. The execution and delivery by the Buyer of this Agreement and each
of the Documents to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action of the Buyer. This Agreement constitutes, and each
of the Documents upon execution and delivery thereof will constitute, the
legal, valid and binding obligations of the Buyer, in each case enforceable in
accordance with their respective terms, subject to bankruptcy, insolvency and
similar laws affecting the rights and remedies of creditors and secured parties
generally and general principles of equity.
Section 4.03 No Default; Non-Contravention.
Neither the execution and delivery of this Agreement and all of the other
Documents to which the Buyer is or will be a party nor the consummation of the
transactions hereby and thereby contemplated shall (a) constitute a violation
or breach of the Certificate of Incorporation or By-laws of the Buyer, (b)
except as listed in Schedule 4.03, and subject to the receipt of the consents
listed on Schedule 4.04, (i) constitute a default under or a breach of, or
result in acceleration of any obligation under, any provision of any contract,
lease, mortgage or other instrument to which it is a party or by which any of
its assets may be affected or secured, which default, breach or acceleration
has not been waived; (ii) violate any Governmental Rule affecting the Buyer or
any of its assets; (iii) result in the creation of any Lien on any of the
assets or properties of the Buyer; or (iv) result in the termination of any
license, franchise, lease or permit to which the Buyer is a party or by which
it is bound, except in the case of those items specified in clause (b) above
which would not, individually or in the aggregate, limit the ability of the
26
Buyer to consummate the transactions hereby contemplated or have a Material
Adverse Effect on the Buyer and its subsidiaries taken as a whole.
Section 4.04 Consents and Approvals.
Except for the filing and the termination of the waiting period under the
HSR Act and as set forth on Schedule 4.04, no authorization, approval, order,
license, permit, franchise or consent, and no registration, declaration, notice
or filing by or with any Governmental Body or other party is required in
connection with the execution and delivery by the Buyer of this Agreement and
the other Documents to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby, except such consents as shall
have been obtained on or prior to the Closing Date.
Section 4.05 Finder's Fees.
The Buyer has not incurred any liability for finder's or brokerage fees or
agent's commissions in connection with this Agreement or the transactions
hereby contemplated.
ARTICLE V
PRE-CLOSING COVENANTS OF THE SELLERS
Each of the Sellers, jointly and severally, agrees that, subsequent to the
date hereof and until the Closing:
Section 5.01 Conduct of Businesses.
Except as otherwise consented to or approved by the Buyer in writing and
except as otherwise agreed to herein,
(a) Each of the Sellers shall, and shall cause each Company, CAMP and
Xxxx/Xxxxxxxx to:
(i) Operate the assets of CAMP, the Companies and the Businesses
and the E/C Assets in the ordinary course and consistent with prior
practice and use best efforts to (A) preserve the present business
organization of CAMP and each of the companies intact, (B) keep available
the services of the present officers of CAMP and each of the Companies,
(C) preserve the present relationships of CAMP and each Company with
employees and independent contractors (except to the extent of voluntary
terminations of employment), customers, patrons and suppliers of the
Businesses, (D) maintain in force, and renew upon expiration, all
insurance policies with respect to its assets and the Businesses, as the
same have been previously represented to the Buyer and (E) maintain in
effect all Permits;
27
(ii) maintain its books, accounts and records, in the usual and
ordinary manner, and reflect income, expenses, assets and liabilities in a
manner consistent with its past practices; and
(iii) maintain its assets in good repair, order and condition
and consistent with sound business practice and all applicable
governmental rules.
(b) none of the Sellers shall take, and the Sellers shall prevent
each Company, CAMP and Xxxx/Xxxxxxxx from taking, each action (including,
without limitation, by voting its Interests) which directly or indirectly could
adversely affect the Businesses, the Interests, the Companies, CAMP, the
Acquisition, the E/C Assets or any of the transactions contemplated hereby.
Section 5.02 Extraordinary Acts.
(a) Without limiting the general applicability of Section 5.01,
except as otherwise consented to or approved by the Buyer in writing, or as
otherwise permitted pursuant to Section 5.02(b), no Seller shall take or agree,
whether in writing or otherwise, to take, any action (including, without
limitation, by voting its Interests) which, directly or indirectly, causes any
Company, CAMP or Xxxx/Xxxxxxxx to:
(i) fail to maintain its status as a corporation or general
partnership subsisting under the laws of its state of incorporation or
organization;
(ii) declare or make any dividend or any distribution or
transfer of any of its assets or properties to its equity holders or any
of their Affiliates;
(iii) make any capital expenditures or commitments for capital
expenditures, including any capitalized lease obligations (for purchase of
equipment or otherwise) or enter into or commit to enter into any
operating lease for any property or equipment calling for net increased
rentals, or acquire any assets or properties or contract to do so, except
with respect to the construction of the Amphitheater but subject to
Section 2.04(a) hereof;
(iv) make any advance or investment either by purchase of stock
or other securities or contributions to capital of any individual, firm,
corporation or other entity;
(v) incur any Liability, other than those Liabilities arising in
the ordinary course of business and consistent with past practice and the
terms and conditions of this Agreement and of the same character, type and
magnitude as incurred in the past, or accelerate the payment of any
Liability;
(vi) purchase, sell, assign or transfer or enter into any
contract or agreement for the purchase, sale, assignment or transfer of
any of its assets or properties, or cancel any debts or claims;
28
(vii) subject to a Lien, any assets, other than Permitted Liens;
(viii) waive any material rights relating to its assets,
properties or Business, whether or not in the ordinary course of business;
(ix) make or suffer, or agree to make or suffer, any new
contract or agreement or any amendment, modification or termination of any
existing contract, lease or other agreement, whether or not in the
ordinary course of business other than talent agreements entered into the
ordinary course of business consistent with past practice;
(x) make or enter into any bonus payment or arrangement with any
of its employees, officers or agents or grant any increase in the
compensation or fringe benefits (whether or not provided under or pursuant
to a Plan) of any employee or officer;
(xi) change any of its business policies, including, without
limitation, construction plans, advertising, marketing policy, sales
policy, purchasing, payment, collection, budget or other material
policies, or terminate any of its operations;
(xii) alter or revise its accounting principles, procedures,
methods or practices, including, without limitation, the creation or
modification of any reserves other than as required by GAAP;
(xiii) dispose of or permit to lapse any Intellectual Property
which comprises a part of its assets or which is used by or in any of the
Businesses;
(xiv) enter into any agreements or arrangements or engage in any
transaction with any Seller Entity or its Affiliates;
(xv) create, suffer or incur any damage, destruction or loss
(whether or not covered by insurance) or any other event or condition of
any character which would have a Material Adverse Effect on its assets,
properties or Business;
(xvi) fail to maintain in full force and effect each Plan in
which any of its employees participate and timely make all required
contributions thereto and administer each such Plan in accordance with its
terms and all applicable laws;
(xvii) authorize for issuance, issue, or sell any shares of its
capital stock or other securities or ownership interests, acquire directly
or indirectly, by redemption or otherwise, any such capital stock,
securities or ownership interests, reclassify or split-up any such capital
stock, securities or ownership interests, or grant or enter into any
options, warrants, calls or commitments of any kind with respect thereto;
(xviii) make any Tax election or enter into any agreement or
settlement with any Tax authority that affects or could affect the basis
for Tax purposes of its assets or the timing for Tax purposes of income or
deduction; or
29
(xix) effectuate a "plant closing" or "mass layoff," as those
terms are defined in the WARN Act or take any action that causes, or could
reasonably be expected to cause, liability under any Governmental Rule
affecting any site of employment facility, operating unit or employee of
any Business.
(b) Notwithstanding anything in Section 5.01 or 5.02 to the contrary,
neither CAMP nor any Company shall, and no Seller shall, directly or
indirectly, cause CAMP or any Company to, enter into any contract, arrangement,
lease, license or agreement or any modification of any Contract (other than
talent agreements entered into in the ordinary course of business and
consistent with past practice) which requires a payment of or to CAMP or a
Company in excess of $50,000 or which has a term of one year or longer without
the Buyer's written consent, which consent shall not be unreasonably withheld.
If the Buyer shall not notify the appropriate Seller Entity of the Buyer's
consent or denial of consent within three business days after the Buyer's
actual receipt of the request for consent, such consent shall be deemed to have
been given.
Section 5.03 No Breach of Representations and Warranties.
None of the Sellers shall take any action (or cause, directly or
indirectly, XXXX, Xxxx/Xxxxxxxx or any Company to take any action) which would
cause or constitute a material breach of any of its representations and
warranties set forth in this Agreement. Each of the Sellers shall, in the event
of, or promptly after the occurrence of, or promptly after obtaining knowledge
of the occurrence of or the impending or threatened occurrence of, any fact or
event which would cause or constitute a breach of any of the representations
and warranties set forth herein at any time after the date hereof and through
the Closing Date, give detailed notice thereof to the Buyer and shall use its
best efforts to prevent or promptly to remedy such breach.
Section 5.04 Access by the Buyer.
The officers, employees and representatives of the Buyer (collectively,
the "BUYER REPRESENTATIVES") shall be permitted access, during usual business
hours and as often as may be reasonably requested, to, and will be permitted to
make copies of and extracts from, the accounts, minute books, other records,
books of account, other books, deeds, leases, title documents, insurance
policies, contracts, commitments, sale orders, purchase orders, Tax Returns,
records, files and such other information relating to the Interests, any of the
Companies, their assets, CAMP, the E/C Assets and the Businesses as the Buyer
shall reasonably request. The Buyer Representatives shall be permitted access,
during usual business hours, and as often as may be reasonably requested, to
the premises and physical properties used in connection, in whole or in part,
with or by the Companies and CAMP. The Buyer Representatives shall be permitted
to discuss the Interests, the affairs, finances and accounts of the Companies,
the E/C Assets and CAMP with the Sellers and with officers and employees of the
Companies and CAMP and, with the consent of the Seller Entities (which consent
shall not be unreasonably withheld or delayed), with distributors, sales
representatives, licensees, licensors, suppliers and customers of the
Businesses.
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Section 5.05 HSR Act.
The Sellers shall file promptly with the United States Department of
Justice and the United States Federal Trade Commission true, correct and
complete copies of its pre-merger notification report forms and any other
information and documents required under the HSR Act in connection with the
transactions contemplated hereby and shall promptly notify the Buyer of any
communications in respect of either filing from the Department of Justice or
the Federal Trade Commission. The Seller Entities shall promptly furnish to the
Buyer (a) copies of all pleadings, notices or other communications received by
them that relate to the transactions contemplated by this Agreement and (b)
true, correct and complete copies of all other information in their possession
as may be necessary for completion of the reports or notifications to be filed
by the Buyer under the HSR Act. The determination of whether any filings are
required under the HSR Act shall be made by the Buyer's counsel.
Section 5.06 Consents; Notices; Termination.
The Sellers shall use their best efforts to obtain and deliver to the
Buyer written consents, in form and substance reasonably satisfactory to the
Buyer required in connection with this Agreement or the transactions hereby
contemplated. The Sellers or the Seller Entities shall also deliver all notices
to third parties required to be delivered in connection with the execution of
this Agreement and the transactions hereby contemplated.
Section 5.07 Best Efforts.
Each of the Seller Entities shall use its best efforts to effectuate the
transactions hereby contemplated and to fulfill the conditions to the
obligations of the Buyer under Article VII of this Agreement.
ARTICLE VI
PRE-CLOSING COVENANTS OF THE BUYER
The Buyer agrees that, subsequent to the date hereof and until the
Closing:
Section 6.01 No Breach of Representations and Warranties.
The Buyer shall not take any action which would cause or constitute a
material breach of any of its representations and warranties set forth herein.
The Buyer shall, in the event of, or promptly after the occurrence of, or
promptly after obtaining knowledge of the occurrence or the impending or
threatened occurrence of, any fact or event which would cause or constitute a
breach of any of the representations and warranties set forth herein at any
time after the date hereof and through the Closing Date, give detailed notice
thereof to the Sellers and the Buyer shall use its best efforts to prevent or
promptly to remedy such breach.
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Section 6.02 HSR Act.
The Buyer shall promptly file with the United States Department of Justice
and the United States Federal Trade Commission true, correct and complete
copies of its pre-merger notification report forms and any other information
and documents required under the HSR Act in connection with the transactions
contemplated hereby and shall promptly notify the Sellers of any communications
with respect to either filing from the Department of Justice or the Federal
Trade Commission. The Buyer shall promptly furnish to the Sellers (a) copies of
all pleadings, notices or other communications received by it that relate to
the transactions contemplated by this Agreement and (b) true, correct and
complete copies of all other information in their possession as may be
necessary for the completion of the reports or notifications to be filed by the
Seller Entities under the HSR Act.
Section 6.03 Consents and Approvals; Notices.
The Buyer shall use its best efforts to obtain and deliver to the Sellers
written consents, in form and substance reasonably satisfactory to the Sellers,
required in connection with this Agreement or the transactions hereby
contemplated. The Buyer shall also deliver all notices to third parties
required to be delivered in connection with the execution of this Agreement and
the transactions hereby contemplated.
Section 6.04 Best Efforts.
The Buyer shall use its best efforts to effectuate the transactions hereby
contemplated and to fulfill the conditions to the Sellers' obligations under
Article VIII of this Agreement.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE BUYER
All obligations of the Buyer under this Agreement are subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part by the Buyer in its sole
discretion:
Section 7.01 Representations and Warranties.
The representations and warranties of each of the Sellers contained in
Article III hereof and elsewhere herein if specifically qualified by
materiality, shall be true and correct and, if not so qualified, shall be true
and correct in all material respects in each case as of the Closing Date, as
though such representations and warranties were made on and as of such date,
except for those representations and warranties which are expressly made as of
a specified earlier date.
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Section 7.02 Covenants.
The Seller Entities shall have performed and complied in all material
respects with all agreements, covenants and conditions on their part required
by this Agreement to be performed or complied with on or prior to the Closing
Date.
Section 7.03 Officer's Certificate.
The Buyer shall have received a certificate of each of the Sellers, dated
the Closing Date, certifying to the fulfillment of the conditions specified in
Sections 7.01 and 7.02 hereof.
Section 7.04 Opinion of Counsel.
The Buyer shall have received an opinion of counsel for the Seller
Entities, dated the Closing Date, in form and substance reasonably acceptable
to the Buyer and its counsel, which opinion shall include, without limitation,
a zoning opinion (unless a zoning endorsement satisfactory to the Buyer in its
sole discretion is provided by the Sellers (at their sole expense) to the title
coverage for the Real Property) addressing among other things, public assembly
issues.
Section 7.05 Consents.
The Buyer shall have received (in form and substance reasonably
satisfactory to it) all approvals set forth in Schedule 3.06 from all
Governmental Bodies and other third parties in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions hereby contemplated.
Section 7.06 HSR Act.
The Sellers shall have made all pre-merger notification filings required
to be made by them (or any of them) under the HSR Act, all applicable waiting
periods thereunder shall have expired or been terminated without any request
from any appropriate governmental agency for additional information or, if
additional information has been requested, all applicable extended waiting
periods shall have expired.
Section 7.07 Legality.
No change shall have occurred in any law, rule or regulation which would
prohibit the performance of the obligations of the Buyer under Article II
hereof.
Section 7.08 Injunctions.
No court, agency or other authority shall have issued any order, decree or
judgment to set aside, restrain, enjoin or prevent the performance of the
obligations of the Buyer under Article II hereof. No statute, rule, regulation,
executive order, decree or injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Body of competent jurisdiction
which prohibits the consummation of the Acquisition or any other transaction
contemplated hereby.
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Section 7.09 Institution of Proceedings.
There shall not have been instituted by any third party any suit or
proceeding to restrain or invalidate this Agreement or the transactions hereby
contemplated or seeking damages from or to impose obligations upon the Buyer by
reason of this Agreement or the transactions hereby contemplated which, in the
good faith judgment of the Buyer, would involve expenses or lapse of time that
would materially and adversely affect the purpose and intent of and cost to the
Buyer in entering into this Agreement.
Section 7.10 Title Insurance.
The Sellers shall provide the Buyer, at the Seller's cost, with a title
policy (together with a non-imputation endorsement and a zoning endorsement
acceptable to Buyer) issued by Fidelity National Title Insurance Company, in
the amount of $10 million, insuring IMA's leasehold interest under the Ground
Lease.
Section 7.11 Employment Agreements.
The employment agreements between certain of the Companies and each of
Xxxxxx, Xxxxx Xxxxxx, and Xxxx Xxxxx shall be in full force and effect.
Section 7.12 FIRPTA Certificates.
Each Seller shall have delivered to the Buyer a certificate which states,
under penalty of perjury, the taxpayer identification number and office address
of each transferor of Real Property as well as a statement that such transferor
is not a "foreign person" within the meaning of Section 1445(f)(3) of the Code.
Section 7.13 Intentionally Omitted.
Section 7.14 Audited Financial Statements.
True and complete copies of the (i) audited consolidated balance sheets of
TBA as of December 31, 1997, 1996 and 1995, and the related audited statements
of operations, cash flows and stockholders' equity for each of the years then
ended, all of which have been certified by Xxxxxx Xxxxxxxx LLP and (ii) balance
sheet and statement of operations in a consolidating format of the Companies as
of December 31, 1997 and a letter from Xxxxxx Xxxxxxxx LLP dated May 5, 1998,
with respect thereto (the "AUDITED FINANCIAL STATEMENTS"), shall have been
delivered to the Buyer and shall be consistent in all material respects with
the Financial Statements for the same periods.
Section 7.15 Consulting Services.
The Buyer (directly or through CAMP, a Company or other Affiliate)
shall have entered into a consulting agreement with Xxxxxx X. Xxxxxx
("GEDDES"), providing that, among other things, from and after the Closing Date
through the earlier of (i) completion of development of
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the Amphitheater or (ii) December 31, 1998, Geddes will provide consulting
services to the Buyer with respect to such development at such times and on
such terms as the Buyer and Geddes may reasonably determine; provided, however,
that Geddes shall assume no liability with respect to such services and the
Buyer shall agree to indemnify Geddes from and against any and all liabilities
that may arise with respect to the development of the Amphitheater, except for
liabilities that may arise with respect to Geddes' gross negligence or willful
misconduct or that are a result of a material misrepresentation by Geddes.
Section 7.16 Certain Events.
Without regard to whether or not any Seller shall have breached any
covenant set forth in Article V, neither CAMP nor any Company nor Xxxx/Xxxxxxxx
shall have (i) failed to take any action described in Section 5.01 or (ii)
taken any action described in Section 5.02.
Section 7.17 Closing of 49% Transaction.
The closing of the purchase from the 49% Sellers of the remaining 49% of
(i) the issued and outstanding Stock and (ii) the Partnership Interests shall
occur simultaneously with the Closing.
Section 7.18 Releases.
The Sellers and the Sellers' employees designated on Schedule 7.18 shall
have executed and delivered to the Buyer releases in form and substance
reasonably satisfactory to the Buyer.
Section 7.19 Trademark Assignment.
Each of Geddes and Xxxxx X. Xxxxxx ("XXXXXX") shall have transferred to
the Buyer all of his right, title and interest in and to the trademarks
identified on Schedule 7.19.
Section 7.20 Acknowledgement.
The Sellers shall have executed and delivered to the Buyer an
acknowledgement in form and substance reasonably satisfactory to the Buyer
relating to the role Geddes and Xxxxxx Xxxxxxxxxxx played in negotiating both
the terms of the Acquisition and the terms of the 49% Acquisition Agreement and
certain conflicts of interests of Geddes, Xx. Xxxxxxxxxxx and Xxxxxx due to
their positions with the Sellers and their interests under the 49% Acquisition
Agreement.
Section 7.21 Delivery of Notices.
The Buyer shall have received copies of all notices required (i) to be
delivered under any Contract as a result of or in connection with the
transactions contemplated hereunder or (ii) in order to obtain any permit or
license necessary to consummate the transactions contemplated hereunder,
together with evidence of the delivery of all of such notices, in form and
substance reasonably satisfactory to the Buyer.
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Section 7.22 Assignment of E/C Assets.
Xxxx/Xxxxxxxx shall have executed and delivered to the Buyer assignments
and other instruments of transfer in form and substance reasonably satisfactory
to the Buyer in order to assign and transfer the E/C Assets to the Buyer.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS
OF THE SELLERS
All obligations of the Sellers under this Agreement are subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part by the Sellers in their
sole discretion:
Section 8.01 Representations and Warranties.
The representations and warranties of the Buyer contained in Article IV
hereof and elsewhere herein shall be true and correct on and as of the Closing
Date as though such representations and warranties were made on and as of such
date, except for those representations and warranties which are expressly made
as of a specified earlier date.
Section 8.02 Covenants.
The Buyer shall have performed and complied with all agreements, covenants
and conditions on its part required by this Agreement to be performed or
complied with on or prior to the Closing Date.
Section 8.03 Officer's Certificate.
The Sellers shall have received a certificate of an executive officer of
the Buyer, dated the Closing Date, certifying to the fulfillment of the
conditions specified in Sections 8.01 and 8.02 hereof.
Section 8.04 Opinion of Counsel.
The Sellers shall have received an opinion of counsel for the Buyer, dated
the Closing Date, in form and substance reasonably acceptable to the Sellers
and their counsel.
Section 8.05 Consents.
The Seller Entities shall have received (in form and substance reasonably
satisfactory to them) all approvals set forth in Schedule 4.04 hereto from all
Governmental Bodies and other third parties in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions hereby contemplated.
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Section 8.06 HSR Act.
The Buyer shall have made all pre-merger notification filings required to
be made by them under the HSR Act, all applicable waiting periods thereunder
shall have expired or been terminated without any request from any appropriate
governmental agency for additional information or, if additional information
has been requested, all applicable extended waiting periods shall have expired.
Section 8.07 Legality.
No change shall have occurred in any law, rule or regulation which would
prohibit the performance of any of the Sellers' obligations under Article II
hereof.
Section 8.08 Injunctions.
No court, agency or other authority shall have issued any order, decree or
judgment to set aside, restrain, enjoin or prevent the performance of any of
the Seller Entities' obligations under Article II hereof. No statute, rule,
regulation, executive order, decree or injunction shall have been enacted,
entered, promulgated or enforced by any Governmental Body of competent
jurisdiction which prohibits the consummation of the Acquisition or any other
transaction contemplated hereby.
Section 8.09 Institution of Proceedings.
There shall not have been instituted by any third party any suit or
proceeding to restrain or invalidate this Agreement or the transactions hereby
contemplated or seeking damages from or to impose obligations upon any of the
Sellers by reason of this Agreement or the transactions hereby contemplated
which, in their good faith judgment, would involve expenses or lapse of time
that would materially and adversely affect the purpose and intent of and cost
to the Sellers in entering into this Agreement.
Section 8.10 Delivery of Consideration.
There shall have been delivered to the Sellers the portion of the Purchase
Price to be paid to the Sellers at the Closing pursuant to Section 2.04.
Section 8.11 Employment Agreements.
The employment agreements between certain of the Companies and each of
Xxxxxx, Xxxxx Xxxxxx and Xxxx Xxxxx shall be in full force and effect.
Section 8.12 Closing of the 49% Transaction.
The closing of the purchase from the 49% Sellers of the remaining 49% of
(i) the issued and outstanding Stock and (ii) the partnership interests in IMA
shall occur simultaneously with the Closing.
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Section 8.13 Trademark License Agreement.
The Buyer, TBA and certain Affiliates of TBA shall have entered into a
Trademark License Agreement relating to the name and xxxx "Avalon" and related
registrations, in form and substance reasonably satisfactory to the Buyer and
TBA.
ARTICLE XXI.
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 9.01 Tax Matters.
(a) From and after the Closing, each of the Sellers, on the one hand,
and the Buyer, on the other hand, shall cooperate fully with each other and
make available or cause to be made available to each other for consultation,
inspection and copying (at such other party's expense) in a timely fashion such
personnel, tax data, Tax Returns and filings, files, books, records, documents,
financial, technical and operating data, computer records and other information
as may be reasonably required (i) for the preparation by any of them of any Tax
Returns, elections, consents or certificates required to be prepared and filed
by such parties or any of the Companies (which, for purposes of this Section,
shall include CAMP) or (ii) in connection with any audit or proceeding relating
to Taxes relating to the assets of the Companies or the Businesses. The Buyer
agrees (A) to retain all books and records with respect to Tax matters
pertinent to the Companies relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Buyer or Sellers, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (B) to give the other party reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, the Buyer shall allow the other
party to take possession of such books and records.
(b) The Sellers shall prepare or cause to be prepared all sales, use
or other transfer tax returns required to be filed with any taxing authority
relating to the transfer of the Interests to the Buyer (collectively, "TRANSFER
TAX RETURNS"), as well as all income Tax Returns of the Companies covering the
taxable period ending on the Closing Date and all other (non-income) Tax
Returns of the Companies covering any taxable period (or portion thereof)
preceding the Closing Date. In the case of the Transfer Tax Returns and all
other Tax Returns described in the preceding sentence, at least 25 days prior
to the due date thereof (including extensions), the Sellers shall provide a
copy of such Tax Returns of the Companies, in the form proposed to be filed, to
Buyer for its good faith review and approval. The Buyer shall provide the
Sellers with any comments it has on such Tax Returns at least 10 days prior to
the due date thereof and, if no comments are provided to the Sellers within
such period, shall be deemed to have approved such Tax Returns. IMA shall make
a valid election under sections 743 and 754 of the Code (and any corresponding
provisions of state and local Tax law as the Buyer requests) on its income Tax
Return for the taxable period ending on the Closing Date. The partners of IMA
shall report the
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Tax consequences of the sale of the Partnership Interests
consistently with all allocations and Tax basis adjustments of the Purchase
Price made by the Buyer with respect to the purchase of IMA.
(c) None of the parties hereto shall cause an election to be made, an
accounting method for Tax purposes to be adopted, or a position to be taken on
any Tax Return, or in any Tax Proceeding, other than an election under sections
743 and 754 of the Code described in (b) above, that is inconsistent with the
provisions of this Agreement. In addition to the foregoing and not in
limitation thereof, the Sellers shall not, and shall use their best efforts to
cause the Companies to not, without the written consent of the Buyer, cause any
election to be made, or any accounting method to be adopted or any position to
be taken with respect to the assets of the Companies in any Tax Return that has
not yet been filed or in any Tax Proceeding if such election, method or
position is inconsistent with any election, accounting method or position
previously adopted, taken or elected by any Subsidiary or is inconsistent with
any representation herein or covenant hereunder.
(d) From and after the Closing, the Sellers shall pay and shall
indemnify and hold harmless the Buyer from and against, any and all Taxes
levied by any foreign, federal, state or local Taxing Authority with respect to
the ownership or use of the assets of the Companies or the conduct of the
Businesses on or prior to the Closing Date, including, without limitation, any
and all of any such Seller Entity's Tax liabilities, whether a direct liability
or a joint and several liability imposed pursuant to Treasury Regulation
Section 1.1502-6 or any comparable provision under foreign, state or local laws
by reason of any Seller Entity having been a member of any consolidated,
combined, unitary or similar group at any time, and the Buyer shall pay, and
shall indemnify and hold harmless the Sellers from and against, any and all
such Taxes with respect to the ownership or use of such assets or the conduct
of the Businesses after the Closing Date. The Sellers shall be entitled to
retain or the Buyer shall pay TBA all refunds of Taxes (whether in the form of
payment, credit or otherwise) from any Taxing Authority to the extent that such
refunds are attributable to the Taxes with respect to the ownership or use of
the assets or the conduct of the Businesses on or prior to the Closing Date.
The indemnification agreements of the Sellers on the one hand, and the Buyer on
the other hand, pursuant to this Section 9.01(d) shall not be subject to
Section 11.04 of this Agreement.
(e) The Buyer will file a consolidated federal income Tax return
which will include the operations of the Companies or the conduct of the
Businesses after the Closing Date.
(f) The Buyer and the Sellers further agree, upon request, to use
their best efforts to obtain any certificate or other documents from any
Governmental Body or any other Person as may be necessary, at no material cost
to the Sellers, to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated
hereby).
(g) The Buyer and the Sellers further agree, upon request, to provide
the other party with all information that either party may be required to
report pursuant to Section 6043 of the Code and all Treasury Department
Regulations promulgated thereunder.
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(h) All tax sharing agreements or similar agreements with respect to
or involving the Companies shall be terminated as of the Closing Date and,
after the Closing Date, the Companies shall not be bound thereby or have any
liability thereunder.
(i) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement, shall be paid by the Sellers when due, and the
Sellers will, at their own expense, file all necessary Tax Returns in
accordance with Section 9.01(b) and shall deliver copies of all tax Returns and
other documentation filed with respect thereto to the Buyer promptly after
filing.
(j) Intentionally Omitted.
(k) The partners of IMA shall report, for U.S. federal income Tax
purposes, 100% in the aggregate of all taxable income, gain, loss and
deductions of IMA for the taxable year of IMA ending on the Closing Date.
(l) As of the close of the day immediately preceding the Closing
Date, IMA shall have no liability for unpaid Taxes, other than Taxes (if any)
of IMA that have accrued as of such date in the ordinary course of the Business
but are not yet due and payable.
Section 9.02 Bulk Transfer Laws.
The Buyer hereby waives compliance by the Sellers with the provisions of
any so-called bulk transfer laws of any jurisdiction in connection with the
sale and transfer of the Interests to the Buyer. Each of the Sellers agrees,
jointly and severally, to indemnify the Buyer against any and all losses,
costs, expenses, liabilities or damages which may be asserted by third parties
against the Buyer as a result of non-compliance with any such bulk transfer
laws. The agreement to indemnify the Buyer pursuant to this Section 9.02 shall
not be subject to Section 11.04 of this Agreement.
Section 9.02 [Intentionally Omitted.]
Section 9.04 Restrictive Covenants.
(a) For the two-year period commencing on the Closing Date, without
the prior written consent of the Buyer, the Sellers shall not, directly or
indirectly, as a director, officer, agent, employee, consultant, or independent
contractor, or in any other individual or representative capacity (i) develop,
construct, operate or manage venues within the greater Los Angeles, California
area which shall include, but not be limited to, Los Angeles, Ventura and Santa
Xxxxxxx Counties, (ii) engage in the production or promotion of "at risk" music
or concert productions or promotions in the greater Los Angeles, California
area which is inconsistent with past practice and in any event which generate
gross revenues which exceed $10,000,000, or (iii) develop, construct, operate
or manage a venue in Portland, Oregon.
(b) It is the intent and understanding of each party hereto that if
in any action before any court or agency legally empowered to enforce this
Section 9.04, any term, restriction,
40
covenant or promise in this Section 9.04 is found to be unreasonable and for
that reason unenforceable, then such term, restriction, covenant or promise
shall be construed so as thereafter to be limited or reduced to make it
enforceable by such court or agency under applicable law, it being understood
that the parties hereto regard such restrictions as reasonable and compatible
with their respective rights.
(c) Without limiting the right of the Buyer to pursue all other
remedies available for a violation of this Section 9.04, it is agreed that,
because of the unique nature of each Seller's services and in view of the
nature of the Businesses, each Seller acknowledges that a breach or threatened
breach by him of this Section 9.04 will cause the Buyer irreparable damage and
incalculable harm and, accordingly, the Buyer shall be entitled to seek
preliminary and permanent injunctive and other relief to prevent a violation or
continuing violation hereof, without the necessity of proving damages or the
posting of a bond.
Section 9.05 Non-Solicitation.
For the two-year period commencing on the Closing Date, no Seller nor any
Affiliate of any Seller shall, on his or its own behalf or on behalf of any
other person, partnership, association, corporation, or other entity, (i)
persuade or attempt to persuade any person providing goods or services to the
Buyer, CAMP or any Company not to do business with the Buyer, CAMP or such
Company or to reduce the amount of business it does with the Buyer, CAMP or
such Company; (ii) persuade or attempt to persuade any performer, act or
customer not to do business with the Buyer, CAMP or any Company or to reduce
the amount of business it does with the Buyer, CAMP or such Company; (iii)
dissuade or attempt to dissuade any individual who was a director, officer or
employee of CAMP or a Company prior to the date hereof from hereafter becoming
a director, officer or employee of the Buyer or (iv) hire or solicit any
employee of any Company, or any Affiliate thereof listed on Schedule 9.05 (an
"EMPLOYEE") or in any manner, directly or indirectly, solicit, induce or
attempt to persuade or influence any Employee to leave the employment of a
Company or such Affiliate thereof; provided, however, nothing in this Section
9.05 shall prevent a Seller from hiring, or soliciting to hire, any Employee
who is terminated by a Company, or any Affiliate thereof, during such two-year
period. The Buyer acknowledges that employees of the Companies may voluntarily
terminate their employment prior to the Closing Date.
Section 9.06 No-Shop.
From the date hereof until the Closing, the Sellers covenant and agree
that no Seller shall, and the Sellers shall use their best efforts to cause the
Companies and CAMP not to, authorize or permit any Affiliate, officer,
director, shareholder or employee of, or any investment banker, attorney,
accountant or other representative retained by, any Seller or Company to make,
solicit, initiate, encourage or respond to a submission of a proposal or offer
from any person or entity (other than the Buyer) relating to the liquidation,
dissolution, recapitalization, merger, consolidation, acquisition or purchase
of all or a material portion of the assets of any Company or of CAMP, the E/C
Assets, or the outstanding equity interests of any Company, of CAMP or of
Xxxx/Xxxxxxxx or other similar transaction or business combination involving
any Company and
41
CAMP (hereinafter collectively referred to as a "THIRD PARTY
OFFER"). The Sellers will, and will cause the Companies, CAMP and Xxxx/Xxxxxxxx
to, immediately cease and cause to be terminated any contracts or negotiations
currently pending with respect to Third Party Offers, if any.
Section 9.07 [Intentionally Omitted.]
Section 9.08 [Intentionally Omitted.]
Section 9.09 Subdivision.
From and after the Closing, the Sellers will continue the process of filing
subdivision maps with respect to Xxxxxx Xxxxxxx amphitheater and obtaining the
reciprocal easement agreement relating thereto or, at the Buyer's option, will
assist the Buyer in filing such maps and obtaining the reciprocal easement
agreement relating thereto. All costs and expenses arising out of filing such
maps and obtaining the reciprocal easement agreement relating thereto,
including, without limitation, those costs and expenses associated with the
reciprocal easement required by the City of Irvine or with amending the Ground
Lease in connection therewith, if necessary, will be paid by the Sellers and
the 49% Sellers.
Section 9.10 License of Office Space.
Notwithstanding any provisions hereof to the contrary, the Buyer agrees
that the Sellers may continue to occupy up to 1,500 square feet of space (the
"HOLD-OVER PREMISES") under that certain lease dated June 12, 1995, between New
Avalon Inc., as tenant, and R&D Building Company, as landlord (as described on
Schedule 3.08 attached hereto), for a period not to exceed 30 days after the
Closing. The Sellers shall be obligated to pay for all utilities (including,
without limitation, telephone bills) but shall not be obligated to pay rent.
Except as set forth in the prior sentence, the Sellers, jointly and severally,
shall indemnify and hold Buyer harmless from any and all costs, expenses,
claims or liabilities arising out of Seller's use of the Hold-over Premises.
The foregoing indemnity shall not be subject to the limitations set forth in
Section 11.04(a). The Sellers acknowledge and agree that its vacating the
Hold-over Premises is an essential term of this Agreement and if the Sellers
breach such obligation, the Buyer will suffer substantial damages and shall
have available all rights and remedies at law or equity.
Section 9.11 Expenses of the Transaction.
Except as otherwise set forth herein, each of the parties hereto agrees to
pay its own fees and expenses in connection with this Agreement and the
transactions contemplated hereby. The Sellers hereby covenant and agree that
they will not pay their expenses incurred in connection with the transactions
contemplated hereby (including, without limitation, attorneys' and auditors'
fees and expenses) prior to the Closing Date and that subsequent thereto, they
shall use the Purchase Price to pay such expenses.
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ARTICLE X
TERMINATION
Section 10.01 Termination.
This Agreement may be terminated at any time prior to the Closing Date:
(a) by mutual consent of the parties hereto;
(b) by the Buyer, if there has been a material violation or breach by
any of the Sellers of any representation, warranty, covenant or agreement
contained in this Agreement or any failed condition to the obligations of the
Buyer under Article VII hereof and such breach, violation or failed condition
is not cured within a reasonable period, not to exceed 30 days, after written
notice thereof is given;
(c) by any of the Sellers, if there has been a material violation or
breach by the Buyer of any representation, warranty, covenant or agreement
contained in this Agreement or any failed condition to the obligations of the
Sellers under Article VIII hereof and such breach, violation or failed
condition is not cured within a reasonable period, not to exceed 30 days, after
written notice thereof is given;
(d) by the Buyer or by the Sellers acting together, if the
Acquisition shall not have been consummated within 10 business days after the
date on which all consents of Governmental Bodies required to consummate the
transactions contemplated by this Agreement shall have been received (unless
(i) the failure to consummate the Acquisition by such date shall be (A) due to
the action or failure to act of the party or parties seeking to terminate this
Agreement or (B) in any way attributable to the fault of any party seeking to
terminate this Agreement, which fault, for purposes hereof, shall include,
without limitation, the making by any Seller in this Agreement or the Letter
Agreement of any material misrepresentation and the failure by any Seller to
make in this Agreement or the Letter Agreement any statement necessary to make
the statements contained herein or therein not misleading, in light of the
circumstances in which they were made or (ii) the conditions to the obligations
of the non-terminating party or parties shall not have been satisfied by such
date) and the non-terminating party refuses to close within 30 days of the
terminating party's notice of termination; provided, however, that if the
non-breaching party shall have given the appropriate notice under Article XI
hereof prior to any such termination, then the indemnification provisions set
forth in Article XI hereof shall survive any such termination of this Agreement
as to any party who shall be in breach of this Agreement as at such date or at
any earlier date of the termination of this Agreement pursuant hereto, unless
the survival of such provisions is specifically waived by the non-breaching
party or parties hereto; or
(e) by any party, if (i) the conditions to obligations of such party
or any other party shall have become impossible to satisfy, other than as a
result of its own acts or omissions in violation of its obligations hereunder
or (ii) any permanent injunction or other order of a court or other competent
authority preventing the consummation of the Acquisition shall have become
final and nonappealable.
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Section 10.02 Effect of Termination.
If this Agreement shall be terminated pursuant to Section 10.01 hereof,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party hereto or its Affiliates, directors,
officers or stockholders, other than the provisions of Article XI and Sections
12.07 and 12.08 hereof; provided, however, that nothing contained in this
Section 10.02 shall be deemed to constitute a release or waiver by any party of
any claim at law or in equity against another party hereto based on any breach
of such party's representations, warranties, covenants or agreements contained
herein.
ARTICLE XI
INDEMNIFICATION
Section 11.01 Survival of Representations and Warranties.
All representations and warranties made hereby by the parties to this
Agreement, unless waived in writing and notwithstanding any examination by or
on behalf of any party hereto and the consummation of the transactions hereby
contemplated, shall survive for a period of two years after the Closing;
provided, however, that the representations and warranties made in Sections
3.15, 3.17, 3.18, 3.19 and 9.01 hereto shall survive for the statute of
limitations applicable thereto. Notwithstanding the foregoing, any
representation or warranty hereof shall survive the time at which it would
otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy or breach thereof or the claim thereunder shall have been given to
the party from whom indemnity may be sought in respect thereof prior to the
expiration of the applicable survival period therefor. All covenants and
agreements made hereby by the parties to this Agreement shall, unless waived in
writing, survive the Closing.
Section 11.02 By the Sellers.
Each of the Sellers, jointly and severally, agrees to indemnify and hold
harmless the Buyer and its directors, officers, employees and agents (the
"BUYER PARTIES") against, and to reimburse the Buyer Parties on demand with
respect to, any and all losses, liabilities, obligations, suits, proceedings,
demands, judgments, damages, claims, expenses and costs (including, without
limitation, reasonable fees, expenses and disbursements of counsel)
(collectively, "LOSSES") which each may suffer, incur or pay, by reason of (i)
the breach by any Seller of any representation or warranty contained in this
Agreement or in any other Document executed by a Seller and delivered to a
Buyer Party pursuant to the provisions of this Agreement, or (ii) the failure
of any Seller to perform any agreement required hereby or by any other
Document.
Section 11.03 By the Buyer.
The Buyer agrees to indemnify and hold harmless the Sellers and their
respective directors, officers, employees and agents (the "SELLER PARTIES")
against, and to reimburse the Seller Parties on demand with respect to, any and
all Losses which each may suffer, incur or pay by reason of (i) the breach by
the Buyer of any representation or warranty contained in this
44
Agreement or in any other Document executed by the Buyer and delivered to the
Sellers pursuant to the provisions of this Agreement, (ii) the failure of the
Buyer to perform any agreement required hereby or any agreement executed
pursuant to the provisions hereof, or (iii) claims and liabilities of the
Companies disclosed in the Financial Statements or on the Schedules hereto or
with respect to the ownership and operation of the Companies on or after the
Closing Date, subject to (A) any right to indemnification to which the Buyer is
entitled with respect thereto hereunder and (B) any and all other rights of the
Buyer hereunder.
Section 11.04 Limitations on Indemnification.
(a) Except as otherwise provided herein neither the Buyer Parties, on
the one hand, nor the Seller Parties, on the other hand, shall be entitled to
be indemnified pursuant to Section 11.02 or Section 11.03 hereof unless and
until the aggregate of all Losses incurred by the Buyer Parties or the Seller
Parties, as the case may be, exceeds $50,000 and, upon exceeding such amount,
the Buyer Parties or the Seller Parties shall be entitled to be indemnified for
all Losses in excess of such $50,000 threshold on a dollar for dollar basis.
(b) The Sellers shall be jointly and severally liable for all
obligations of the Seller under Section 10.02.
Section 11.05 Indemnification Procedure for Third Party Claims.
Promptly, and in any event within 30 days after the receipt by any party
hereto of notice of any claim or the commencement of any action or proceeding
by a third party, such party will, if a claim with respect thereto is to be
made against any party obligated to provide indemnification hereunder (the
"INDEMNIFYING Party"), give such Indemnifying Party written notice of such
claim or the commencement of such action or proceeding, but any failure to
timely notify the Indemnifying Party shall not relieve the Indemnifying Party
of its obligations hereunder except to the extent it was actually prejudiced
thereby. Upon unconditional and unqualified written acknowledgment of the
Indemnified Party's entitlement to indemnification therefor and if the
Indemnifying Party has sufficient resources to pay any final judgment, such
Indemnifying Party shall have the right, at its option, to settle, compromise
or defend, at its own expense and with its own counsel, any such claim, action
or proceeding involving the asserted liability of the party seeking such
indemnification (the "INDEMNIFIED PARTY"), provided that the Indemnifying Party
shall not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding except with the consent of
the Indemnified Party (which consent shall not be unreasonably withheld or
delayed). If the Indemnifying Party fails to assume the defense of such claim,
action or proceeding within 30 days of receipt of notice of such claim, action
or proceeding, or if at any time the Indemnifying Party shall fail to defend in
good faith any such claim, action or proceeding, the Indemnified Party may
assume the defense thereof and may employ counsel with respect thereto and all
fees and expenses of such counsel shall be paid by the Indemnifying Party, and
the Indemnified Party may conduct and defend such claim, action or proceeding
in such manner as it may deem appropriate, subject, however, to the last
sentence of this Section 11.05. If any Indemnifying Party undertakes to
compromise, settle or defend any such asserted liability, it shall promptly
notify the Indemnified
45
Party of its intention to do so, and the Indemnified
Party agrees to cooperate fully with the Indemnifying Party and its counsel in
the compromise of, or defense against, any such asserted liability. The
Indemnified Party may appoint, at its own expense, associate counsel to
participate in the joint defense of any such matter with respect to which the
Indemnifying Party has undertaken the defense, and the Indemnifying Party may
appoint, at its own expense, associate counsel to participate in the joint
defense of any such matter which the Indemnified Party is defending. No
Indemnified Party shall settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding except with
the consent of the Indemnifying Party (which consent shall not be unreasonably
withheld or delayed).
ARTICLE XII
MISCELLANEOUS
Section 12.01 Further Assurances.
Each of the parties agrees and covenants promptly to execute and deliver,
or cause to be executed and delivered, to each of the other parties such
documents or instruments, in addition to those expressly required by the
Agreement to be executed and delivered, as any of the other parties may
reasonably deem necessary or desirable to carry out or implement any provision
of the Agreement and the transactions contemplated hereby. In addition to the
foregoing and not in limitation thereof, each of the Sellers hereby constitutes
and appoints the Buyer as its true and lawful attorney, with full power of
substitution, in the name of the Xxxxxxx, Xxxx/Xxxxxxxx and each of them, but
for the benefit of the Buyer, (a) to collect, assert or enforce any claim,
right or title of any kind in or to the Interests or the E/C Assets, to
institute and prosecute claims, actions, suits and proceedings which the Buyer
may deem proper in order to collect, assert or enforce any such claim, right or
title, to defend and compromise all claims, actions, suits and proceedings in
respect of any such Interest or any E/C Asset and to do all acts and things in
relation thereto as the Buyer shall deem advisable and (b) to take all such
action which the Buyer may deem proper in order to provide for it the benefits
of the Interests and the E/C Assets, including, without limitation, where any
required consent of a third party to the assignment thereof to the Buyer shall
not have been obtained. Each of the Sellers acknowledges that such powers are
coupled with an interest and may not be revoked by it in any manner or for any
reason.
Section 12.02 Entire Agreement.
This Agreement and the Letter Agreement, together with all agreements,
schedules, exhibits, documents and other instruments attached hereto or to be
delivered hereunder sets forth the entire understanding between the parties,
there are no terms, conditions, representations, warranties or covenants other
than those contained herein and in such agreements, schedules, exhibits,
documents and other instruments attached hereto or to be delivered hereunder,
and all prior agreements, contracts, promises, representations and statements,
if any, among the parties hereto as to the subject matter hereof, are merged
into this Agreement. Notwithstanding anything to the contrary contained herein,
to the extent that the Letter Agreement and this Agreement are inconsistent,
the terms of this Agreement shall control.
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Section 12.03 Notices.
(a) All notices, consents, demands or other communications required
or permitted to be given pursuant to the Agreement shall be in writing and
shall be deemed sufficiently given on (i) the day on which delivered personally
or by telecopy (with prompt confirmation by mail) during a business day to the
appropriate location listed as the address below, (ii) three business days
after the posting thereof by United States registered or certified first class
mail, return receipt requested with postage and fees prepaid, or (iii) one
business day after deposit thereof for overnight delivery. Such notices,
consents, demands or other communications shall be addressed respectively:
As to the Buyer:
SFX Entertainment, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
with a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
As to the Sellers:
TBA Entertainment Corporation
AWC Acquisition Corp.
000 Xxxxxxxx Xxxxxxxxxx Xxx
Xxxxxxx Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx Xxxxxx III
Telecopy No.: (000) 000-0000
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with a copy to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to any other address or telecopy number which such party may have
subsequently communicated to the other parties in writing in accordance with
the terms of this Section 12.03, except such notice shall only be effective
upon actual receipt by the intended recipient.
(b) Except as otherwise provided in this Agreement, any notice,
consent, demand or other communication given hereunder may be signed on behalf
of a party by any duly authorized representative of that party.
Section 12.04 Binding Effect; Successors and Assigns.
Each and every representation, warranty, covenant, agreement,
indemnification, and provision of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. This Agreement may not be assigned by any
party hereto without the prior written consent of the other parties hereto,
except that the Buyer may assign this Agreement to any of its Affiliates
without the consent of any other party; provided, however, that in the event of
any such assignment, the Buyer shall remain liable for the payment and
performance of its obligations hereunder. Any purported assignment in violation
of this Agreement shall be null and void.
Section 12.05 Governing Law.
This Agreement and any other agreement entered into in connection herewith
shall be governed by, and construed under and in accordance with, the laws of
the State of New York without giving effect to the conflict of laws principles
thereof.
Section 12.06 Captions.
The captions and the table of contents appearing in this Agreement are
inserted only as a matter of convenience and for reference and in no way
define, limit or describe the scope or intent of this Agreement or any of the
provisions hereof.
Section 12.07 Confidentiality of Disclosures.
Any corporate information, records, documents, descriptions or other
disclosures of whatsoever nature or kind made or disclosed by any of the
parties to any of the other parties, or to the authorized representative
thereof, or learned or discovered by such other party or by any
48
representative thereof in the course of the investigations pursuant to the
consummation of the transactions contemplated by this Agreement (whether prior
to or after the date of the execution of this Agreement) and not known by or
available to the public at large, shall be received in confidence and none of
the parties nor any such authorized representative shall disclose or make use
of such information or authorize anyone else to disclose or make use thereof
without the written consent of the other relevant parties hereto, except (a) as
necessary to consummate the transactions contemplated hereby, (b) that the
parties hereto shall continue such communications with directors, employees,
customers, suppliers, franchisees, lenders, lessors, shareholders, partners and
other particular groups as may be legally required or necessary or appropriate
and not inconsistent with the best interests of the other parties for the
proper consummation of the transactions contemplated herein, and (c) as
compelled by judicial or administrative process or by other requirements of
applicable law including any disclosure under federal securities laws;
provided, however, that in the case of any disclosure contemplated pursuant to
this clause (c), the party seeking to disclose such information shall give the
other party or parties reasonable prior written notice thereof in order to
afford such other party or parties reasonable opportunity to seek a protective
order or other limitation under such disclosure.
Section 12.08 Publicity.
Any communications and notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement (other than
governmental or regulatory filings) shall be planned and coordinated by and
among each of the parties and shall, to the extent reasonably practicable, be
provided to the other party at least 24 hours prior to the release of any such
publicity. Unless required by applicable law, none of the parties shall
disseminate or make public or cause to be disseminated or made public any
information regarding the transactions contemplated hereunder without the prior
written approval of the other parties, which approval shall not be unreasonably
withheld or delayed.
Section 12.09 Consent to Jurisdiction.
With respect to any claim arising out of this Agreement, each of the
parties hereto irrevocably submits to the non-exclusive jurisdiction of the
courts of the State of New York and the United States District Court located in
the Borough of Manhattan, the City of New York (and of the appropriate
appellate courts thereof). In addition, each of the parties hereto irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any action, suit or proceeding arising out of or relating to this Agreement
brought in such courts, irrevocably waives any claim that any such action, suit
or proceeding brought in any such court has been brought in an inconvenient
forum and further irrevocably waives the right to object with respect to such
claim, action, suit or proceeding brought in any such court, that such court
does not have jurisdiction over him or it, as the case may be, or any other
party hereto. The parties hereto hereby agree that process in any such action
or proceeding may be served on any party anywhere in the world, whether within
or without the State of New York, provided that notice thereof is provided
pursuant to the provisions of Section 12.03 hereof.
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Section 12.10 Fees and Expenses.
All costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses.
Section 12.11 Third Parties.
Other than the parties hereto, no person shall have any rights under or to
enforce any provision of this Agreement.
Section 12.12 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which taken together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
SFX ENTERTAINMENT, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name:
Title:
TBA ENTERTAINMENT CORPORATION
By: /s/ *
-------------------------------
Name:
Title:
AWC ACQUISITION CORP.
By: /s/ *
-------------------------------
Name:
Title:
SCHEDULE 1.01
Defined Terms
"49% Acquisition Agreement" means that certain Purchase Agreement, dated
as of even date herewith, by and among the Buyer, Xxxxxx Xxxxx, Xxxxxx X.
Xxxxxx, Peach Street Partners, Ltd., Xxxxxx X. Xxxxxx, as Trustee of The Xxxxxx
X. Xxxxxx Family Trust, Xxxxxx Xxxxxxxxxxx and Xxxxxxxx Xxxxxxxxxxx, as
Co-trustees of the Xxxxxxxxxxx Family Trust and Xxxxx X. Xxxxxx, relating to
the purchase of the 49% of the issued and outstanding Partnership Interests and
Stock not owned by the Sellers.
"49% Sellers" means parties to the 49% Acquisition Agreement (other than
the Buyer), who are the sellers under the 49% Acquisition Agreement.
"Acquisition" has the meaning ascribed to such term in the third recital
to this Agreement.
"Affiliate" or "affiliate" means, with respect to a specified Person, a
Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the Person
specified.
"Amphitheater" has the meaning ascribed to such term in Section 2.04
hereof.
"Audited Financial Statements" has the meaning ascribed to such term in
Section 7.14 hereof.
"AWC" has the meaning ascribed to such term in the Preamble hereto.
"Businesses" has the meaning ascribed to such term in the second recital
to this Agreement.
"Buyer" has the meaning ascribed to such term in the Preamble hereto.
"Buyer Parties" has the meaning ascribed to such term in Section 11.02
hereof.
"Buyer Representatives" has the meaning ascribed to such term in Section
5.04 hereto.
"CAMP" means Camarillo Amphitheater Managing Partners, Inc., a
wholly-owned subsidiary of West Coast Amphitheater Corp.
"Closing" has the meaning ascribed to such term in Section 2.02 hereof.
"Closing Date" has the meaning ascribed to such term in Section 2.02
hereof.
"Commission" means the Securities and Exchange Commission.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute thereto.
"Companies" has the meaning ascribed to such term in the first recital to
this Agreement.
"Concession Agreement" has the meaning ascribed to such term in Section
3.28 hereof.
"Construction Budget" has the meaning ascribed to such term in Section
2.04 hereof.
"Contracts" has the meaning ascribed to such term in Section 3.11 hereof.
"Documents" means this Agreement and the other documents, instruments and
agreements to be executed and delivered pursuant thereto.
"E/C Assets" has the meaning ascribed to such term in Section 2.07.
"Employee" has the meaning ascribed to such term in Section 9.05 hereof.
"Environment" means soil, surface waters, ground waters, land, stream
sediments, surface or subsurface strata, ambient air, and any environmental
medium.
"Environmental Condition" means (a) any condition with respect to the
Environment on the Premises, whether or not yet discovered, caused by
activities conducted or conditions existing on the Premises, which constitutes
a violation of any Environmental Law or which could or does result in any
damage, loss, cost, expense, claim, demand, order or liability to or against
the Buyer or any of its affiliates, directly or indirectly, including, without
limitation, any condition resulting from the ownership or use of any property
by any Company or CAMP or, with respect to the Businesses, any of the Sellers
or any of their respective Affiliates or predecessors, or the operation of the
Businesses and/or any activity or operation formerly conducted by any person on
the Premises or (b) the presence, Release or Threat of Release of Hazardous
Substances on, under or from the Premises.
"Environmental Laws" means (a) any Governmental Rule regulating or
relating or pertaining to the Environment or the protection of human health,
whether existing as of the date hereof, previously enforced or subsequently
enacted, including, without limitation, the Resource Conservation and Recovery
Act, as amended, the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, or the Federal Clean Water Act, as amended; (b) any
Governmental Rule, whether existing as of the date hereof, that asserts or may
assert jurisdiction over the Sellers or the Premises or the operations or
activity at the Premises that relates or pertains to the Environment,
including, without limitation, those which regulate the presence, release,
emission, threat of release, use, handling, manufacturing, generation,
production, storage, treatment, processing, transportation or disposal of any
Hazardous Substance, including, but not limited to (i) requiring any permit,
license, approval, consent or authorization, or the renewal thereof, (ii)
regulating the amount, form, manner of storage, transport and/or disposal of
Hazardous Substances, or (iii) requiring any reporting, inspection report,
business plan, notification, or any other dissemination of or access to
information
S-2
regarding Hazardous Substances, including warnings or notices to tenants,
subtenants, employees, occupants, invitees or consumers.
"Xxxx/Xxxxxxxx" has the meaning ascribed to such term in Section 2.07.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, any successor statute thereto and all final or
temporary regulations promulgated thereunder.
"ERISA Affiliate" means all members of a controlled group of corporations
and all trades and businesses (whether or not incorporated) under common
control and all other entities which, together with any of the Companies, are
treated as a single employer under any or all of Sections 414(b), (c), (m) or
(o) of the Code on either the date of this Agreement or the Closing Date or at
any time during the six year period ended on the date of this Agreement.
"Facilities" means all Real Property now or previously owned by a Company
or CAMP or currently or previously used in connection with the Businesses.
"Financial Statements" has the meaning ascribed to such term in Section
3.12 hereof.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time.
"Geddes" has the meaning ascribed to such term in Section 7.15.
"Governmental Body" means any federal, state, local or foreign
governmental authority or regulatory body, any subdivision, agency, commission
or authority thereof (including, without limitation, environmental protection,
planning and zoning), or any quasi-governmental or private body asserting,
exercising or empowered to assert or exercise any regulatory authority
thereunder and any person directly or indirectly owned by and subject to the
control of any of the foregoing, or any court, arbitrator or other judicial or
quasi-judicial tribunal.
"Governmental Rules" means any statute, law, treaty, rule, code,
ordinance, regulation, permit, certificate or order of any Governmental Body or
any judgment, decree, injunction, writ, order or like action of any
Governmental Body, whether now or hereinafter enacted or in force.
"Ground Lease has the meaning ascribed to such term in Section 3.27
hereof.
"Hazardous Substances" means (a) any pollutant, toxic substance,
contaminant, chemical, hazardous waste, hazardous material, petroleum product,
oil, radioactive material or energy; (b) any substance, gas material or
chemical which is or may be defined as or included in the definition of
"hazardous substances," "toxic substances," "hazardous materials," "hazardous
wastes," or words of similar import under any Governmental Rule or
Environmental Law; (c) radon gas, asbestos, urea formaldehyde foam insulation
or polychlorinated biphenyls in excess of federal, state or local safety
guidelines, whichever are more stringent; (d) any other chemical, material, gas
or substance, the exposure to or Release of which is or may be prohibited,
limited
S-3
or regulated by any Governmental Body, or (e) any other chemical, material, gas
or substance that does or may pose a hazard to health and/or safety of the
occupants of the Premises, or the owners and/or occupants of property adjacent
to or surrounding the Premises.
"Holdover Premises" has the meaning ascribed to such term in Section 9.10
hereof.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"IMA" has the meaning ascribed to such term in the first recital to this
Agreement.
"Indemnified Party" has the meaning ascribed to such term in Section 11.05
hereof.
"Indemnifying Party" has the meaning ascribed to such term in Section
11.05 hereof.
"Intellectual Property" has the meaning ascribed to such term in Section
3.10 hereof.
"Interests" has the meaning ascribed to such term in the third recital to
this Agreement.
"Letter Agreement" means that certain letter agreement, dated March 6,
1998, by and among SFX Entertainment, Inc., the Sellers and Pavilion Partners.
"Liabilities" has the meaning ascribed to such term in Section 3.13
hereof.
"Lien" means any mortgage, charge, pledge, lien, security interest, claim,
encumbrance or restriction, of any kind or nature.
"Losses" has the meaning ascribed to such term in Section 11.02 hereof.
"Material Adverse Effect" means a material adverse effect on the business,
assets, prospects, financial condition or results of operations of the
specified entity.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
3(37) or Section 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a single employer pension plan within the
meaning of Section 4001(a)(15) of ERISA which is subject to the provisions of
Sections 4063 and 4064 of ERISA.
"Xxxxxx" has the meaning ascribed to such term in Section 7.19.
"Option Agreement" has the meaning ascribed to such term in Section
3.28(a).
"Partnership Interests" has the meaning ascribed to such term in the first
recital to this Agreement.
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"Permit" means any permit, license, approval, consent, or authorization
issued by a Governmental Body or required by any Governmental Rule. "Permitted
Liens" means (i) Liens for Taxes or governmental assessments, charges or claims
the payment of which is not yet due or which are being contested in good faith
and for which adequate reserves have been accounted for in accordance with
GAAP, (ii) statutory Liens, such as warehousemen, mechanics and materialmen
Liens which arise by operation of law and are incurred in the ordinary course
of business and consistent with past practice and are for sums not yet
delinquent and (iii) as to property leased or licensed, the Lien attributable
to the existence of such lease or license.
"Person" means any individual, corporation, partnership, limited liability
company, limited liability partnership, joint venture, estate, trust,
cooperative, foundation, union, syndicate, league, consortium, coalition,
committee, society, firm, company or other enterprise, association,
organization or other entity or Governmental Body.
"Plan" means any written or unwritten plan, program, arrangement,
agreement or commitment which is a deferred compensation, pension, profit
sharing, savings, thrift or other retirement plan (including, without
limitation, any "employee pension benefit plan" as defined in Section 3(2) of
ERISA), stock purchase, stock option, performance share, bonus or other
incentive or severance pay plan, policy or procedure, or vacation or other
employee benefit plan, program, arrangement, agreement or commitment
(including, without limitation, any Welfare Benefit Plan), other than such
arrangement or arrangements which constitute a payroll practice within the
meaning of 29 C.F.R. 2510.3-1(b).
"Premises" has the meaning ascribed to such term in Section 3.19 hereof.
"Project" has the meaning ascribed to such term in Section 3.28 hereof.
"Purchase Price" has the meaning ascribed to such term in Section 2.04
hereof.
"Real Property" has the meaning ascribed to such term in Section 3.08
hereof.
"Release" means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing,
abandoning or dumping into the Environment.
"Seller Entities" means, collectively, the Sellers, the Companies and
CAMP.
"Seller Parties" has the meaning ascribed to such term in Section 11.03
hereof.
"Sellers" has the meaning ascribed to such term in the preamble hereto.
"Single Employer Defined Benefit Plan" means an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA which is subject to Subtitle
B of Title IV of ERISA and which is not a Multiemployer Plan.
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"Stock" has the meaning ascribed to such term in the first recital to this
Agreement.
"Subsidiary" has the meaning ascribed to such term in the first recital to
this Agreement.
"Tax" or "Taxes" means federal, state, local or foreign income, capital
gains, profits, gross receipts, payroll, capital stock, franchise, employment,
withholding, social security, unemployment, disability, real property, personal
property, stamp, excise, occupation, sales, use, transfer, mining, value added,
investment credit recapture, alternative or add-on minimum, environmental,
estimated or other taxes, duties or assessments of any kind, including any
interest, penalty and additions imposed with respect to such amounts.
"Tax Authority" means any federal, national, foreign, state, municipal or
other local government, any subdivision, agency, commission or authority
thereof, or any quasi-governmental body or other authority exercising any
taxing or tax regulatory authority.
"Tax Proceedings" means any audit, other administrative proceeding or
judicial proceeding pending or threatened involving Taxes.
"Tax Returns" means all returns, information statements and reports
(including schedules attached to any of the foregoing) required to be filed
with or supplied to a Tax Authority with respect to Taxes.
"TBA" has the meaning ascribed to such term in Section 3.03 hereof.
"Threat of Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the Environment which may
result from such Release.
"Transfer Tax Returns" has the meaning ascribed to such term in Section
9.01 hereof.
"Voting Debt" has the meaning ascribed to such term in Section 3.03
hereof.
"WARN Act" means the Worker Adjustment and Retraining Notification Act of
1988.
"Welfare Benefit Plan" means an "employee welfare benefit plan" within the
meaning of Section 3(1) of ERISA
