PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into this 15th day of December, 1997, by and among XXXX XXXXXX ("Xxxxxx"), an
individual residing at 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx [Zip]; S. XXXXXXX
XXXXX, III ("Xxxxx"), an individual residing at 0000 Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx [Zip]; and XXXXX XXXXXX ("Xxxxxx"; and together with Xxxxxx and Xxxxx,
the "Shareholders"), an individual residing at 000 Xxxxxxx Xx., Xxxxxxx,
Xxxxxxx [Zip]; SOUTHERN PROMOTIONS, INC. ("Southern Promotions"), HIGH COTTON,
INC. ("High Cotton"); XXXXXX AND XXXXXX MANAGEMENT, INC. ("Xxxxxx and Xxxxxx
Management"; and together with Southern Promotions and High Cotton, the "Sale
Companies"), BUCKHEAD PROMOTIONS, INC. ("Buckhead Promotions"), NORTHERN
EXPOSURE, INC. ("Northern Exposure"), PURE COTTON, INC. ("Pure Cotton"), and
INTERFEST, INC. ("Interfest"; and together with Buckhead Promotions, Northern
Exposure and Pure Cotton, the "Asset Companies"), each a Georgia corporation
having an office for the conduct of its business at 0000 Xxxxxx Xxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000; CONCERT/SOUTHERN XXXXXXXX PROMOTIONS JOINT VENTURE
("Concert/Southern") and ROXY VENTURES JOINT VENTURE ("Roxy Ventures"; and
together with Concert/Southern, the "Joint Ventures") each having an office for
the conduct of its business at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000; and SFX CONCERTS, INC. ("SFX"), a Delaware corporation having an office
for the conduct of its business at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
WHEREAS, the Shareholders own all of the issued and outstanding
capital stock (the "Stock") of the Sale Companies; and
WHEREAS, the Sale Companies, the Asset Companies and the Joint
Ventures (collectively, the "Operating Entities") conduct all of the activities
of the Shareholders in the concert promotion, event production, artist
management, artist development, ticket distribution, corporate sponsorship,
venue operation, concessionaire, parking, security and all similar businesses
(the "Business"); and
WHEREAS, the Shareholders desire to sell and SFX desires to purchase
all of the Stock of the Sale Companies; and
WHEREAS, the Asset Companies and the Joint Ventures desire to sell and
SFX desires to purchase all of the Sale Assets (as defined in Section 1.2
hereof) on the terms and subject to the conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and upon the terms and
subject to the conditions hereinafter set forth, the parties hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase and Sale of Stock. On the Closing Date (as defined in
Section 3.1), the Shareholders shall sell to SFX, and SFX shall purchase from
the Shareholders, the Stock in accordance with the terms of this Agreement. At
the Closing (as defined in Section 3.1), the Shareholders shall deliver to SFX
certificates representing all of the Stock which is required to be delivered or
is otherwise deliverable by the Shareholders pursuant hereto duly endorsed in
blank for transfer or accompanied by duly executed stock powers assigning the
Stock in blank.
1.2 Purchase and Sale of Assets. On the Closing Date, the Asset
Companies and the Joint Ventures (collectively, the "Asset Sellers") shall
sell, assign, transfer and convey to SFX, and SFX shall purchase and assume
from the Asset Sellers, all of the assets, properties, interests and rights of
the Asset Sellers of whatsoever kind and nature, real and personal, tangible
and intangible, owned or leased by the Asset Sellers as the case may be, which
are used or held for use exclusively by or relate exclusively to the business
and operations of the Asset Sellers (the "Sale Assets"), including but not
limited to the Sale Assets described in paragraph 1 of Exhibit A hereto but
excluding the assets described in paragraph 2 thereof. The Sale Assets shall be
transferred to SFX free and clear of all debts, security interest, mortgages,
trusts, adverse claims, pledges, conditional sales agreements or other liens,
liabilities and encumbrances whatsoever ("Encumbrances"), other than
informational filings made by equipment lessors under the Uniform Commercial
Code.
1.3 Assumptions of Obligations. Subject to the provisions of this
Section 1.3, Section 1.4 and Section 2.3, on the Closing Date, SFX shall only
assume and undertake to pay, satisfy or discharge the liabilities, obligations
and commitments of the Asset Sellers arising under (i) the Real Estate
Contracts and the Contracts described in Sections 5.10 and 5.11; (ii) all other
contracts of the Asset Sellers arising in the ordinary course of business and
consistent with past practices between the date hereof and the Closing Date;
and (iii) any other contracts entered into between the date hereof and the
Closing Date which contract imposes monetary obligations of not more than Ten
Thousand Dollars ($10,000) or in the aggregate Forty Thousand Dollars ($40,000)
or which SFX expressly agrees in writing to assume. All of the foregoing
liabilities and obligations shall be referred to herein collectively as the
"Assumed Obligations".
1.4 Limitation. Except as set forth in Section 1.3 hereof, SFX
expressly does not, and shall not, assume or be deemed to assume, under this
Agreement or otherwise by reason of the transactions contemplated hereby, any
liabilities, obligations or commitments of the Asset Sellers of any nature
whatsoever. Without limiting the generality of the foregoing, except as set
forth in Section 1.3, SFX shall not assume or be liable for any liability or
obligation of the Asset Sellers arising out of any contract of employment,
collective bargaining agreement, insurance, pension, retirement, deferred
compensation, incentive bonus or profit sharing or employee benefit plan or
trust, or any judgment, litigation, proceeding or claim by any person or entity
relating to the business or operation of the Asset Sellers prior to the Closing
Date, whether or not such judgment, litigation, proceeding or claim is pending,
threatened or asserted before, on or after the Closing Date.
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1.5 Obligations of the Sale Companies. Subject to the provisions of
this Section 1.5 and Section 2.3, on the Closing Date the Sale Companies shall
only have the liabilities, obligations and commitments of the Sale Companies
arising under (i) the Real Estate Contracts and the Contracts described in
Sections 5.10 and 5.11; (ii) all other contracts of the Sale Companies arising
in the ordinary course of business and consistent with past practices between
the date hereof and the Closing Date; and (iii) any other contracts entered
into between the date hereof and the Closing Date which contract imposes
monetary obligations of not more than Ten Thousand Dollars ($10,000) or Forty
Thousand Dollars ($40,000) or which SFX expressly agrees in writing shall be a
liability of the Sale Companies.
ARTICLE 2
CONSIDERATION
2.1 Purchase Price. The aggregate consideration (the "Purchase Price")
for the acquisition of the Stock and the Sale Assets shall be the sum of (i)
Fifteen Million Dollars ($15,000,000), payable in cash at the Closing, plus, at
the option of the Shareholders and the Asset Sellers (collectively, the
"Sellers"), (ii) either (x) Two Million Dollars ($2,000,000), payable to the
Sellers in equal quarterly installments of One Hundred Thousand Dollars
($100,000) each over a period of five (5) years following the Closing, or (y)
an amount equal to the present value at Closing of Two Million Dollars
($2,000,000), using a 8% discount rate, payable to the Sellers in cash at the
Closing.
2.2 Manner of Payment. SFX shall pay the Purchase Price to the Sellers
by wire transfer of immediately available funds to a bank or banks designated
in writing by the Seller.
2.3 Proration of Revenue and Expenses.
2.3.1 Except as otherwise provided herein, all expenses and
all revenue earned arising from the conduct of the business and operations of
the Asset Sellers shall be prorated between SFX and the Asset Sellers and
within the Sale Companies in accordance with generally accepted accounting
principles as of 11:59 p.m., local time, on the date immediately preceding the
Closing Date (the "Prorated Date"). Such prorations shall include, without
limitation, all ad valorem, real estate and other property taxes (but excluding
taxes arising by reason of the transfer of the Sale Assets as contemplated
hereby, which shall be paid as set forth in Article 11 of this Agreement),
business and license fees (including any retroactive adjustments thereto, wages
and salaries of employees, including accruals up to the Closing Date for
bonuses, commissions, vacations and sick pay, and related payroll taxes,
utility expenses, rents and similar prepaid and deferred items attributable to
the ownership and operation of the Asset Sellers and the Sale Companies. Real
estate taxes shall be apportioned on the basis of taxes assessed for the
preceding year, with a reapportionment as soon as the new tax rate and
valuation can be ascertained. The prorations within the Sale Companies
attributable to the time after the Prorated Date shall be paid by SFX, and the
prorations attributable to the time period on and prior to the Prorated Date
shall be paid by the Shareholders in the same manner as the parties pay for the
prorations in the Asset Sellers.
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2.3.2 The prorations and adjustments contemplated by this
Section, to the extent practicable, shall be made on the Closing Date. As to
those prorations and adjustments not capable of being ascertained on the
Closing Date, an adjustment and proration shall be made within ninety (90)
calendar days of the Closing Date.
2.3.3 In the event of any disputes between the parties as to
such adjustments, the amounts not in dispute shall nonetheless be paid at the
time provided in Section 2.3.2 and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the parties, and
the fees and expenses of such accountant shall be paid one-half by the Asset
Sellers and one-half by SFX.
ARTICLE 3
CLOSING
3.1 Closing. Except as otherwise mutually agreed upon by the Sellers
and SFX, the consummation of the acquisition of the Stock and the Sale Assets
(the "Closing") shall occur simultaneously on the later to occur of (i) five
(5) business days following the date of expiration or termination of all
waiting periods, including any extensions thereof, which are applicable to the
transactions contemplated by this Agreement pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules
and regulations promulgated thereunder, and (ii) March 31, 1998. In the event a
second request for additional information is received from the Fair Trade
Commission in connection with the HSR Act filing, the March 31, 1998 date will
be extended to June 30, 1998. The Closing shall be held at SFX's offices in New
York City, New York, or at such other place as SFX shall designate.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SFX
SFX hereby makes the following representations and warranties to the
Sellers, each of which is true and correct on the date hereof, shall remain
true and correct to and including the Closing Date, shall be unaffected by any
notice to the Sellers and shall survive the Closing.
4.1 Organization and Standing. SFX is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has the corporate power and authority to own the Stock and the Sale Assets
and to carry on the business of the Asset Sellers as now being conducted and as
proposed to be conducted by the Asset Sellers between the date hereof and the
Closing Date.
4.2 Authorization and Binding Obligation. SFX has all necessary power
and authority to enter into and perform this Agreement and the transactions
contemplated hereby, and to own the Stock and the Sale Assets and to carry on
the business and operations of the Asset Sellers as they are now being
conducted, and SFX's execution, delivery and performance of this Agreement and
the
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transactions contemplated hereby have been duly and validly authorized by all
necessary action on its part. This Agreement has been duly executed and
delivered by SFX, and this Agreement constitutes, and the other agreements to
be executed in connection herewith will constitute, the valid and binding
obligation of SFX, enforceable in accordance with their terms, except as
limited by laws affecting the enforcement of creditors' rights or equitable
principles generally.
4.3 Litigation and Compliance with Law. There is no litigation,
administrative proceeding, arbitration or other proceeding, or petition,
complaint or, to the best of SFX's knowledge, investigation, before any court
or governmental body pending against SFX or any of its principals that would
adversely affect SFX's ability to perform its obligations pursuant to this
Agreement or the agreements to be executed in connection herewith. To the best
of SFX's knowledge, there is no violation of any law, regulation or ordinance
or any other requirement of any governmental body or court which would have a
material adverse effect on SFX or its ability to perform its obligations
pursuant to this Agreement or the agreements to be executed in connection
herewith.
4.4 Investment Intent. SFX is acquiring the Stock solely for its own
account and not with a view to sale or distribution thereof in violation of any
securities laws. SFX acknowledges that it has received, or has had access to,
information which it considers necessary or advisable to enable it to make a
decision concerning its purchase of the Stock, provided that the foregoing
shall not limit or otherwise affect the rights or remedies of SFX hereunder
with respect to the breach of any representations, warranties, covenants or
agreements of the Shareholders contained herein.
4.5 Accuracy of Information. No written statement made by SFX herein
and no information provided by SFX herein or in the documents, instruments or
other written communications made or delivered directly by SFX to the Sellers
in connection with the negotiations covering the purchase and sale of the Stock
and the Sale Assets contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein or herein not
misleading, and there is no fact known to SFX which relates to any information
contained in any such written document, instrument or communications which SFX
has not disclosed to the Sellers in writing which could materially affect
adversely the Sellers. To the extent that a representation or other information
is made to SFX's knowledge or is otherwise qualified by its terms, this
representation shall not be interpreted to expand such limitations or
qualifications.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers as hereinafter defined hereby make the following
representations and warranties to S FX, each of which is true and correct on
the date hereof, shall remain true and correct to and including the Closing
Date, shall be unaffected by any notice to SFX other than in the Disclosure
Schedule (as defined herein) and shall survive the Closing. Such
representations and warranties are subject to, and qualified by, any fact or
facts disclosed in the separate Disclosure Schedule which is annexed hereto
(the "Disclosure Schedule"). As to Southern Promotions, the representations and
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warranties regarding that corporation shall be made only by Xxxxx and Xxxxxx.
As to High Cotton, the representations and warranties regarding that
corporation shall be applicable only to Xxxxxx. As to Xxxxxx and Xxxxxx
Management, the representations and warranties regarding that corporation are
made by only Xxxxxx and Xxxxxx. As to all other entities, the representations
and warranties are joint and several liabilities of all of the Sellers.
5.1 Organization and Standing. Each of the Asset Companies and the
Sale Companies (collectively, the "Companies") is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia
and has the power and authority to own, lease and operate its respective assets
and to carry on its Business and operations as now being conducted and as
proposed to be conducted by the Asset Companies between the date hereof and the
Closing Date. Each of the Joint Ventures has the power and authority to own,
lease and operate its respective assets and to carry on its Business and
operations as now being conducted and as proposed to be conducted by the Joint
Ventures between the date hereof and the Closing Date.
5.2 Authorization and Binding Obligation. Each of the Sellers has the
power and authority to enter into and perform this Agreement and the
transactions contemplated hereby, and the Sellers' execution, delivery and
performance of this Agreement and the transactions contemplated hereby have
been duly and validly authorized by all necessary action on their part. This
Agreement has been duly executed and delivered by each of the Sellers, and this
Agreement constitutes, and the other agreements to be executed in connection
herewith will constitute, the valid and binding obligation of each of the
Sellers, enforceable in accordance with their terms, except as limited by laws
affecting the enforcement of creditor's rights or equitable principles
generally.
5.3 Capitalization. The authorized capital stock, the issued and
outstanding shares, and the record or beneficial owner of the Shares for each
of the Sale Companies is set forth in Schedule 5.3. All outstanding Stock has
been duly authorized and validly issued, is fully paid and nonassessable and
was not issued in violation of any preemptive rights. There is outstanding no
security, option, warrant, right, call, subscription, agreement, commitment or
understanding of any nature whatsoever, fixed or contingent, that directly or
indirectly (i) calls for the issuance, sale, pledge or other disposition of any
Stock or of any capital stock of any of the Sale Companies or any securities
convertible into, or other rights to acquire, any such Stock or other capital
stock of any of the Sale Companies; or (ii) obligates any of the Sale Companies
or the Shareholders to grant, offer or enter into any of the foregoing; or
(iii) relates to the voting or control of such Stock, capital stock, securities
or rights. No person has any right to require any of the Sale Companies to
register any of its securities under the Securities Act.
5.4 Title to Shares. The sale and delivery of the Stock to SFX
pursuant to this Agreement shall vest in SFX legal and valid title to the
Stock, free and clear of all Encumbrances, other than Encumbrances created by
SFX and restrictions on resales of the Stock under applicable securities laws.
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5.5 Absence of Conflicting Agreements or Required Consents. Except as
set forth in Section 5.5 of the Disclosure Schedule, delivery and performance
of this Agreement by each of the Sellers: (a) does not require the consent of
any third party except the consent or right of first refusal under the Xxxxxxxx
Ventures Joint Venture with Xxxxxx X. Xxxxxxxx Arts Center, Inc.; (b) will not
violate any applicable law, judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority to which each of the Sellers
is a party or by which they, the Sale Assets or the Stock are bound; (c) will
not, either alone or with the giving of notice or the passage of time, or both,
conflict with, constitute grounds for termination of or result in a breach of
the terms, conditions or provisions of, or constitute a default under, any
contract, agreement, instrument, license or permit to which any of the Sellers
or the Stock is now subject; and (d) will not result in the creation of any
lien, charge or Encumbrance on any of the Sale Assets or the Stock.
5.6 Government Authorizations. Section 5.6 of the Disclosure Schedule
contains a true and complete list of the material licenses, permits or other
authorizations from governmental and regulatory authorities which are required
for the lawful conduct of the Business and operations of the Operating Entities
in the manner and to the full extent they are presently conducted. Each of the
Operating Entities is the authorized legal holder of the licenses, permits and
authorizations listed in Section 5.6 of the Disclosure Schedule, none of which
is subject to any restrictions or condition which would limit in any respect
the full operation of the Operating Entities as now operated, except the
licenses issued by the State of Georgia and City of Atlanta for the dispensing
of beer, wine and liquors at Xxxxxxxx Park, the Roxy Theater, the Cotton Club
and the operation of concert business by Interfest..
5.7 Subsidiaries. None of the Operating Entities owns any equity
ownership interest, directly or indirectly, in any person, corporation or other
entity, other than as set forth in Section 5.7 of the Disclosure Schedule.
5.8 Taxes. Each of the Operating Entities has filed all federal,
state, local and foreign income, franchise, sales, use, property, excise,
payroll and other tax returns required by law and has paid in full all taxes,
estimated taxes, interest, assessments, and penalties due and payable. All
returns and forms which have been filed have been true and correct in all
material respects and no tax or other payment in a material amount other than
as shown on such returns and forms are required to be paid and have been paid
by each of the Operating Entities. There are no present disputes as to taxes of
any nature payable by any of the Operating Entities.
5.9 Personal Property. Section 5.9 of the Disclosure Schedule contains
a list of all material tangible personal property and assets owned or held by
each of the Operating Entities and used primarily or exclusively in the conduct
of the Business and operations of the Operating Entities (the "Personal
Property"). Except as disclosed in Section 5.9 of the Disclosure Schedule, and
except as may be subject to lease agreements of the Operating Entities
specifically identified in Section 5.9 of the Disclosure Schedule, each of the
Operating Entities owns and has, and will on the Closing Date have, good and
marketable title to all such property (and to all other tangible and intangible
personal property and assets including cash and receivables to be transferred
to SFX hereunder), and
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none of such property is, or at the Closing will be, subject to any security
interest, mortgage, pledge, conditional sales agreement or other lien or
encumbrance other than as set forth in Section 5.9 of the Disclosure Schedule.
All of the items of tangible personal property and assets included in Section
5.9 of the Disclosure Schedule are in all respects in good operating condition
(ordinary wear and tear excepted) and are available for immediate use in the
conduct of the Business and operations of the Operating Entities.
5.10 Real Property. Section 5.10 of the Disclosure Schedule contains a
complete and accurate list of all real property (i) leased by the Operating
Entities and used by them in their Business and operations, together with a
summary of the applicable leases (collectively the "Real Estate Contracts"),
and (ii) owned by the Operating Entities (the real property located on Monroe
Drive in Atlanta, Georgia owned jointly by Southern Promotions and High Cotton,
is not presently used in the operations of the business and is an Excluded
Asset). The Real Estate Contracts listed in Section 5.10 of the Disclosure
Schedule (a) constitute valid and binding obligations of the Operating Entities
and, to the best of the Operating Entities' knowledge, of all other persons
purported to be parties thereto and are in full force and effect as of the date
hereof, and (b) will on the Closing Date constitute valid and binding
obligations of the Operating Entities and, to the best of the Operating
Entities' knowledge, of all other persons purported to be parties thereto and
shall be in full force and effect. Except as set forth in Section 5.10 of the
Disclosure Schedule, none of the Operating Entities is in material default
under any of such Real Estate Contracts, none has received or given written
notice of any default thereunder from or to any of the other parties thereto
and none will have received any such notice at or prior to the Closing.
5.11 Contracts. Section 5.11 of the Disclosure Schedule lists and
summarizes the terms of all written and oral contracts (the "Contracts") as of
the date of this Agreement for which the operating Entities shall continue to
be liable as of the Closing Date, except contracts entered into in the ordinary
course of business (i) of less than three (3) months duration and which impose
monetary obligations of not more than Ten Thousand Dollars ($10,000) in the
aggregate, or (ii) which are currently scheduled to expire prior to the Closing
Date and for which the Operating Entities will no longer be liable. Those
contracts which the Sellers and SFX agree are critical to the consummation of
the transactions contemplated hereby are identified in Section 5.11 of the
Schedule as "Material Contracts". Notwithstanding the foregoing, if it is
discovered before the Closing that the Operating Entities failed to list any
contract in Section 5.11 of the Disclosure Schedule which was required to be
listed, the failure by the Operating Entities to disclose such contract shall
not permit SFX to refuse to close under this Agreement or to bring an action
for damages against the Operating Entities if the absence of such contract
would not have a material adverse effect on SFX or the Operating Entities.
5.12 Status of Contracts. Except as noted in Section 5.12 of the
Disclosure Schedule, the Operating Entities have delivered to SFX true and
complete copies of all written Material Contracts, including any and all
amendments and other modifications to such Material Contracts. All Material
Contracts are valid, binding and enforceable by the Operating Entities in
accordance with their respective terms, except as limited by laws affecting
creditors' rights or equitable principles generally. To the best of the
Operating Entities' knowledge, the Operating Entities have complied
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in all material respects with all Material Contracts and are not in default
beyond any applicable grace periods under any of the Material Contracts, and no
other contracting party is in default under any of the Material Contracts.
5.13 Environmental Matters. None of the Operating Entities has
unlawfully disposed of any hazardous waste or hazardous substance in a manner
which has caused, or could cause, SFX to incur a material liability under
applicable law in connection therewith. To the best of the Operating Entities'
knowledge, each of the Operating Entities has complied in all material respects
with all federal, state and local environmental laws, rules and regulations
applicable to the Operating Entities and their operations. To the best of the
Operating Entities' knowledge, no hazardous waste has been disposed of by any
other person on the real estate owned or leased by the Operating Entities. As
used herein, the term "hazardous waste" shall mean as defined in the Resource
Conservation and Recovery Act (RCRA) as amended and in the equivalent state
statute under applicable state law. SFX may at its expense conduct a Phase I
environmental study of the real property owned or leased by the Operating
Entities. If SFX learns between the date of this Agreement and the Closing Date
that the Operating Entities are in breach of the representation and warranty
set forth in this Section 5.13, the Operating Entities shall begin remedial
action promptly and use reasonable efforts to complete such remedial action
before the Closing, and if such remedial measures are not materially completed
prior to Closing, SFX shall have the sole discretion to consummate this
Agreement or terminate this Agreement; provided, however, that if such remedial
action is likely to cost the Operating Entities in excess of Seventy-five
Thousand Dollars ($75,000) in the aggregate, the Operating Entities may in the
alternative in their sole discretion terminate this Agreement prior to Closing
and the Operating Entities shall have no liability to SFX as a result of such
termination.
5.14 Copyrights, Trademarks and Similar Rights. Section 5.14 of the
Disclosure Schedule lists, in all material respects, all copyrights,
trademarks, trade names, licenses, patents, permits, and other similar
intangible property rights and interests applied for, issued to or owned by the
Operating Entities or under which the Operating Entities are a licensee or
franchisee and which are used in the conduct of the Business and operations of
the Operating Entities. Except as set forth in Section 5.14 of the Disclosure
Schedule, all of such rights and interests are issued to or owned by the
Operating Entities, or if licensed or franchised to the Operating Entities, to
the best of the Operating Entities' knowledge, are valid and in good standing
and uncontested. The Operating Entities have delivered or made available to SFX
copies of all material documents, if any, establishing such rights, licenses or
other authority. None of the Operating Entities has received any written notice
nor has any knowledge of any infringements or unlawful use of such property.
5.15 Personnel Information. Section 5.15 of the Disclosure Schedule
contains a true and complete list of all persons employed by the Operating
Entities, including a description of material compensation arrangements and
employee benefit plans and a list of other terms of any and all agreements
affecting such persons. Except as set forth in Section 5.15 of the Disclosure
Schedule, none of the Operating Entities has received notification that any of
its employees who are listed in Section 5.15 of the Disclosure Schedule
presently plan to terminate their employment, whether by reason of the
transactions contemplated hereby or otherwise.
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5.15.1 Except as disclosed in Section 5.15 of the Disclosure
Schedule, none of the Operating Entities is a party to any contract with any
labor organization, nor have any of the Operating Entities agreed to recognize
any union or other collective bargaining unit, nor has any union or other
collective bargaining unit been certified as representing any of the Operating
Entities' employees. None of the Operating Entities has any knowledge of any
organizational effort currently being made or threatened by or on behalf of any
labor union with respect to employees of any of the Operating Entities. During
the past three (3) years, none of the Operating Entities has experienced any
strikes, work stoppages, grievance proceedings, claims of unfair labor
practices filed or other significant labor difficulties of any nature.
5.15.2 Except as disclosed in Section 5.15 of the Disclosure
Schedule, to the best of their knowledge and belief each of the Operating
Entities has complied in all material respects with all laws relating to the
employment of labor, including, without limitation, the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and those laws relating to
wages, hours, collective bargaining, unemployment insurance, workers'
compensation, equal employment opportunity, sexual harassment and payment and
withholding of taxes. More specifically, to the best of their knowledge and
belief each of the Operating Entities has substantially complied with and is
not in default in any material respect under any laws, rules and regulations
relating to employment of labor, including those relating to wages, hours,
equal employment opportunities, sexual harassment, employment of protected
minorities (including women and persons over 40 years of age), collective
bargaining and the withholding and payment of taxes and contributions and has
withheld all amounts required or agreed to be withheld from wages and salaries
of its employees, and is not liable for any arrearage of wages or for any tax
or penalty or failure to comply with the foregoing. There are no claims or
complaints pending or, to the knowledge of the Operating Entities, threatened
against any of the Operating Entities before any court or governmental agency
and involving any alleged unlawful employment practices, whether or not
relating to the laws described above. None of the Operating Entities has
consented to any decree involving any claim of unfair labor practice nor been
held in any Judicial proceeding to have committed any unfair labor practice,
and there are no material controversies pending or threatened between any of
the Operating Entities and any of their employees.
5.16 Financial Statements. The Combined Balance Sheet as of September
30, 1997 and related Combined Statement of Operations, Cash Flow and
Stockholders' Equity for the nine months then ended for the Operating Entities
prepared and audited by Ernst & Young at SFX's request and direction fairly
present the combined position of the Operating Entities and their results of
operations as of those dates. The Operating Entities have not acquired, either
directly or indirectly, any other corporation, business or assets with respect
to which there is not available financial information consistent with the
financial information provided by the Operating Entities.
5.17 Liabilities. Except as set forth in Section 5.17 of the
Disclosure Schedule and the Financial Statements, the Operating Entities have
no debts, obligations or liabilities of any kind or nature, either direct or
indirect, absolute or contingent, matured or unmatured.
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5.18 Absence of Certain Changes or Events. Except as set forth in
Section 5.18 of the Disclosure Schedule or except as otherwise contemplated by
this Agreement, since September 30, 1997, there has not been (a) any damage,
destruction or casualty loss to the physical properties of the Operating
Entities (whether covered by insurance or not); (b) any material change in the
Business, operations or financial condition of the Operating Entities except
normal seasonal operating results; (c) any entry into any transaction,
commitment or agreement (including without limitation any borrowing or capital
expenditure) material to the Operating Entities' Business; (d) any redemption
or other acquisition by the Operating Entities of their capital stock or any
declaration, setting aside or payment of any dividend or other distribution in
cash, stock or property with respect to the Operating Entities' capital stock;
(e) any increase in the rate or terms of compensation payable or to become
payable by any of the Operating Entities to their directors, officers or
employees or any increase in the rate or terms of any bonus, pension, insurance
or other employee benefit plan, payment or arrangement made to, for or with any
such directors, officers or key employees, except as set forth in Schedule
5.18; (f) any change in or acceleration of sales, or reduction of aggregate
administrative, marketing, advertising and promotional expenses or research
expenditures other than in the ordinary course of business; (g) any sale,
transfer or other disposition of any asset of the Operating Entities to any
party, except for payment of third-party obligations incurred in the ordinary
course of business in accordance with the Operating Entities' regular payment
practices; (h) any termination or waiver of any rights of value to the business
of the Operating Entities; or (i) any failure by the Operating Entities to pay
their accounts payable or other obligations in the ordinary course of business
consistent with past practices.
5.19 Title to Properties. Except as set forth in Section 5.19 of the
Disclosure Schedule, each of the Operating Entities has good and marketable
title to all of the assets and properties which it purports to own and which
are reflected on the Financial Statements, free and clear of all Encumbrances,
except for (a) liens for current taxes not yet due and payable or for taxes the
validity of which is being contested in good faith by appropriate proceedings,
and (b) Encumbrances which individually or in the aggregate do not materially
and adversely affect the Business, operations or financial condition of the
Operating Entities.
5.20 Litigation. Except as set forth in Section 5.20 of the Disclosure
Schedule, none of the Operating Entities subject to a judgment, award, order,
writ, injunction, arbitration decision or decree materially adversely affecting
the conduct of the Business of the Operating Entities, and there is no
litigation, arbitration, administration or other proceeding or, to the best of
the Operating Entities' knowledge, investigation pending or any basis for any
person to assert a claim or, to the best of the Operating Entities' knowledge,
threatened against any of the Operating Entities in any federal, state or local
court, or before any administrative agency or arbitrator, or before any other
tribunal duly authorized to resolve disputes, which would reasonably be
expected to have any material adverse effect upon the Business, property,
assets or condition (financial or otherwise) of the Operating Entities or which
seeks to enjoin or prohibit, or otherwise questions the validity of, any action
taken or to be taken pursuant to or in connection with this Agreement.
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5.21 Compliance With Laws. Except as set forth in Section 5.21 of the
Disclosure Schedule, (a) none of the Operating Entities has received any notice
asserting any noncompliance by it in connection with the Business or operation
of the Operating Entities with any applicable statute, rule or regulation,
whether federal, state or local; (b) none of the Operating Entities is in
default with respect to any judgment, order, injunction or decree of any court,
administrative agency or other governmental authority or any other tribunal
duly authorized to resolve disputes in any respect material to the transactions
contemplated hereby; and (c) each of the Operating Entities to the best of
their knowledge and belief is in compliance with all material laws, regulations
and governmental orders applicable to the conduct of the Business and
operations of the Operating Entities, the failure to comply with which would
have a material adverse effect on the Business, operations or financial
condition of the Operating Entities, and their present use of the Sale Assets
to the best of their knowledge and belief does not violate any of such laws,
regulations or orders, violation of which would have a material adverse effect
on the Operating Entities' operations.
5.22 Insurance. All insurance policies with respect to the properties,
assets, operations and Business of the Operating Entities (the "Insurance
Policies") are in full force and effect. Except as set forth in Section 5.22 of
the Disclosure Schedule, there are no pending claims against the Insurance
Policies by the Operating Entities as to which the insurers have denied
liability and with respect to which there is a reasonable likelihood of a
settlement or determination adverse to the Operating Entities. To the best of
the Operating Entities' knowledge, there are no circumstances existing which
would enable the insurers to avoid liability under the Insurance Policies, nor
are there any other parties having an interest under the Insurance Policies.
Except as set forth in Section 5.22 of the Disclosure Schedule, (i) there exist
no material claims under the Insurance Policies that have not been properly
filed by the Operating Entities; (ii) no insurance company has refused to renew
any material insurance policy of the Operating Entities during the past
eighteen (18) months; and (iii) there have been no material rate or premium
increases or written notice of prospective changes therein on general
liability, property or directors and officers liability Insurance Policies
during the past eighteen (18) months. The Disclosure Schedule lists all
Insurance Policies of the Operating Entities.
5.23 Accuracy of Information. All written statements, documents,
instruments or other written communications made or delivered by the Sellers to
SFX in connection with the negotiations covering the purchase and sale of the
Stock and the Sale Assets are listed in Schedule 5.23 and such items listed in
Schedule 5.23 do not contain any untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein or herein not
misleading and there is no fact known to the Sellers which relates to any
information contained in any such written document, instrument or
communications which the Sellers have not disclosed to SFX in writing which
materially and adversely affects the Operating Entities. To the extent that a
representation or other information is made to any of the Sellers' knowledge or
is otherwise qualified by its terms, this representation shall not be
interpreted to expand such limitations or qualifications.
5.24 Accounts Receivable. All accounts and notes receivable reflected
on the Financial Statements represent sales actually made or services actually
rendered in the ordinary course of
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business on or prior to September 30, 1997; all accounts and notes receivable
of the Operating Entities as of the Closing Date will represent sales actually
made or services actually rendered in the ordinary course of business
consistent with past practices prior to the Closing Date.
5.25 Payola/Plugola. None of the Sellers has paid or agreed to pay any
money, service or any valuable consideration, as defined in, and other than any
such payments or agreements to pay made in accordance with, Sections 317 and
507 of the Communications Act of 1934, as amended, for the radio broadcast of
any matter whatsoever.
5.26 Business of the Companies. The Operating Entities conduct all of
the activities of the Shareholders in connection with the Business.
ARTICLE 6
COVENANTS OF SFX
6.1 Closing. On the Closing Date, SFX shall purchase the Stock and the
Sale Assets from the Sellers as provided in Article 1 hereof and shall deliver
or cause to be delivered to the Sellers the Purchase Price as provided in
Article 2 hereof.
6.2 Notification. SFX shall notify the Sellers of any litigation,
arbitration or administrative proceeding pending or, to its knowledge,
threatened against SFX which challenges the transactions contemplated hereby.
6.3 No Inconsistent Action. SFX shall not take any other action which
is materially inconsistent with its obligations under this Agreement.
6.4 Required Consents. On the Closing Date, SFX shall deliver any and
all necessary third party consents to the execution, delivery and performance
of this Agreement by SFX.
6.5 Accounts Receivable. SFX acknowledges that all accounts receivable
in connection with the operation of the Sale or Asset Sellers for services
performed prior to the Closing Date shall remain the property of the Sale or
Asset Sellers and that SFX shall not acquire any beneficial right or interest
therein or responsibility therefor, with the following limited exception: for a
period of ninety (90) days following the Closing Date, SFX agrees to use
reasonable efforts to collect such accounts receivable in the normal and
ordinary course of business and will apply all such amounts collected to the
account debtor's oldest account receivable first, except that any such accounts
collected by SFX from persons who are also indebted to SFX may be applied to
SFX's account where (i) there is a pre-existing bona fide dispute between the
Sale or Asset Sellers and such account debtor with respect to such account or
where the account debtor specifically designates that payment is to be applied
to SFX's account; (ii) SFX has notified the Sale or Asset Sellers of such
dispute or specific designation of payment by the account debtor; and (iii)
thirty (30) days have elapsed since the date notice was given by SFX to the
Sale or Asset Sellers and such account remains subject to dispute or such
account debtor has not rescinded its specific designation of payment. Such
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obligation and authority shall not extend to the institution of litigation,
employment of counsel or a collection agency or any other extraordinary means
of collection unless authorized in writing by the Sale or Asset Sellers. The
Sale or Asset Sellers agree to transfer to SFX all bank accounts, postal boxes
or drop or lock boxes normally utilized by the Sale or Asset Sellers in the
collection of their accounts receivable to facilitate SFX's collection of their
accounts receivable during this period. SFX agrees to cooperate with the Sale
or Asset Sellers as to any litigation or other collection efforts instituted by
the Sale or Asset Sellers to collect delinquent accounts receivable. On the
30th, 60th and 90th days following the Closing Date, SFX shall deliver to the
Sale or Asset Sellers a statement or report showing all such collections
effected since the Closing Date, together with a check or draft for the amount
of such collections net of commissions in the event an outside collection
agency or other third party has been utilized in connection with the collection
of accounts receivable. If at any time SFX determines that any such accounts
are uncollectible, SFX shall notify the Sale or Asset Sellers of such
determination; and upon the Sale or Asset Sellers' written request, and in any
event on the 90th day following the Closing Date, SFX shall furnish or make
available to the Sale or Asset Sellers all records, files and data relating to
the collection efforts of SFX with respect to such accounts.
ARTICLE 7
COVENANTS OF THE SELLERS
7.1 Pre-closing Covenants. The Sellers covenant and agree that between
the date hereof and the Closing Date, except as expressly permitted by this
Agreement or with the prior written consent of SFX, they shall act in
accordance with the following:
7.1.1 The Operating Entities shall conduct their Business and
operations in the ordinary and prudent course of business and with the intent
of preserving the ongoing operations and assets of the Operating Entities,
including, but not limited to, using their reasonable best efforts to retain
the services of their employees and keeping in good standing, all licenses,
permits and authorizations.
7.1.2 The Operating Entities shall use reasonable efforts to
preserve the Business of the Operating Entities intact and to preserve the
Operating Entities' customers, suppliers and others having business relations
with the Operating Entities and continue to conduct the financial operations of
the Operating Entities, including their credit and collection policies, in the
ordinary course of business with substantially the same effort, and to
substantially the same extent and in the same manner as in the prior conduct of
the business of the Operating Entities.
7.1.3 The Operating Entities shall operate their Business in
accordance with all material laws, regulations, rules and orders.
7.1.4 The Operating Entities shall not other than in the
ordinary course of business or in accordance with a preexisting plan or
arrangement listed in Section 7.1 of the Disclosure Schedule (i) sell or
dispose of or commit to sell or dispose of any of their assets except the
property
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located on Monroe Drive in Atlanta, Georgia; (ii) grant or agree to grant any
general increases in the rates of salaries or compensation payable to employees
of any of the Operating Entities except as shown on Schedule 7.1.4; (iii) grant
or agree to grant any specific bonus or increase to any executive or management
employee of any of the Operating Entities; (iv) provide for any new pension,
retirement or other employment benefits for employees of any of the Operating
Entities or any increases in any existing benefits, other than as required by
law; or (v) incur any liability not currently reflected on the Financial
Statements.
7.1.5 The Sellers shall provide SFX with prompt written
notice of any change in any of the information contained in the representations
and warranties made in Article 5 hereof or any Exhibits or the Disclosure
Schedule herein or attached hereto.
7.1.6 Between the date of this Agreement and the Closing
Date, the Operating Entities will, and the Shareholders will cause the
Operating Entities to (i) give SFX and its authorized representatives
reasonable access to all books, records, offices and other facilities and
properties of the Operating Entities; (ii) permit SFX to make such inspections
thereof, during regular business hours, as SFX may reasonably request; and
(iii) cause their officers to furnish SFX with such financial and operating
data, including tax returns and supporting work papers and schedules, and other
information with respect to the business and properties of the Operating
Entities as SFX may from time to time reasonably request. The Shareholders
shall cause the Operating Entities' officers and managerial employees, counsel
and auditors to be available on reasonable notice and during normal working
hours for such questions of SFX and its authorized representatives concerning
the Business and affairs of the Operating Entities as SFX shall reasonably
request.
7.1.7 The Operating Entities shall provide SFX with monthly
unaudited statements of revenue and expenses for the Operating Entities, such
monthly statements to be provided to SFX within thirty (30) days of the end of
each month.
7.1.8 Without the prior written consent of SFX, the Operating
Entities shall not enter into or renew or modify in any material respect any
agreements, commitments or contracts, including the Contracts listed in Section
5.11 of the Disclosure Schedule, except in the ordinary course of business
consistent with the past practices of the Operating Entities.
7.1.9 The Operating Entities shall not permit any of their
Insurance Policies to be canceled or terminated, or any of the coverage
thereunder to lapse, unless simultaneously with such termination, cancellation
or lapse, replacement insurance policies providing coverage equal to or greater
than coverage remaining under those canceled, terminated or lapsed policies are
in full force and effect.
7.1.10 The Operating Entities shall not, and the Shareholders
shall not permit the Operating Entities to, amend any of their certificates of
incorporation or partnership certificates, or their by-laws.
15
7.2 Notification. The Sellers shall notify SFX of any material
litigation, arbitration or administrative proceeding pending or, to their
knowledge, threatened against the Sellers or any of them which challenges the
transactions contemplated hereby.
7.3 No Inconsistent Action. The Sellers shall take no action which is
materially inconsistent with their obligations under this Agreement.
7.4 Closing Covenant. On the Closing Date, the Shareholders shall sell
and deliver the Stock and the Asset Sellers shall sell and deliver the Sale
Assets to SFX as provided in Article 1 of this Agreement.
7.5 No Shopping. Except as required by the Joint Venture Agreement
with the Xxxxxxxx Arts Center, Inc., from and after the date hereof until the
termination of this Agreement in accordance with its terms, none of the Sellers
or any representative or agent thereof, nor any officer, director, employee or
partner of any of the Operating Entities, shall directly or indirectly solicit
or knowingly encourage, including by way of furnishing information, the
initiation of any inquiries or proposals regarding, or engaging in any
discussions or entering into any agreements regarding, any merger, sale of
shares of capital stock, sale of all or substantially all of the assets or
similar business combination or transaction involving any of the Operating
Entities
ARTICLE 8
JOINT COVENANTS
SFX and the Sellers covenant and agree that between the date hereof
and the Closing Date, they shall act in accordance with the following:
8.1 Conditions. Except as otherwise provided in this Agreement, if any
event should occur, either within or without the control of any party hereto,
which would prevent fulfillment of the conditions upon the obligations of any
party hereto to consummate the transactions contemplated by this Agreement, the
parties hereto shall use their reasonable best efforts to cure the event as
expeditiously as possible.
8.2 Confidentiality. Except as required by the Joint Venture Agreement
with the Xxxxxxxx Arts Center, Inc., SFX and the Sellers shall each keep
confidential all information obtained by it or them with respect to the other
in connection with this Agreement and the negotiations preceding this
Agreement, and will use such information solely in connection with the
transactions contemplated by this Agreement, and if the transactions
contemplated hereby are not consummated for any reason, each shall return to
the other, without retaining a copy thereof, any schedules, documents or other
written information obtained from the other in connection with this Agreement
and the transactions contemplated hereby. Notwithstanding the foregoing, no
party shall be required to keep confidential or return any information which
(i) is known or available through other lawful sources, not bound by a
confidentiality agreement with the disclosing party, (ii) is or becomes
publicly known through no fault of the receiving party or its agents, (iii) is
required to be
16
disclosed pursuant to an order or request of a judicial or governmental
authority or because of the rules and regulations of the Securities and
Exchange Agreement (the "SEC") (provided the other parties are given reasonable
prior notice), or (iv) is developed by the receiving party independently of the
disclosure by the disclosing party. The Sellers hereby acknowledge that SFX is
a reporting person under the rules and regulations of the SEC and may be
required, upon the execution of this Agreement, to disclose and file this
Agreement (not including the Disclosure Schedules and the Exhibits hereto) with
its regularly required SEC reports, provided, that SFX shall afford the Sellers
reasonable time to review and comment on the text accompanying any such
disclosure prior to such filing.
8.3 Cooperation. SFX and the Sellers shall cooperate fully with each
other in taking any actions, including actions to obtain the required consent
of any governmental instrumentality or any third party necessary or helpful to
accomplish the transactions contemplated by this Agreement; provided, however,
that no party shall be required to take any action which would have a material
adverse effect upon it or any affiliated entity.
8.4 Governmental Consents. Promptly following the execution of this
Agreement, the parties shall proceed to prepare and file with the appropriate
governmental entities such requests, reports, or notifications as may be
required in connection with this Agreement and shall diligently and
expeditiously prosecute, and shall cooperate fully with each other in the
prosecution of, such matters. Without limiting the foregoing, promptly
following the execution of this Agreement, the parties shall (a) file with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "DOJ") the notifications and other information (if
any) required to be filed under the HSR Act with respect to the transactions
contemplated hereby and shall use their commercially reasonable efforts to
cause all applicable waiting periods under the HSR Act to expire or be
terminated as of the earliest possible date; and (b) make all necessary filings
and, thereafter, make any other required submissions with respect to the
transactions contemplated hereby under the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder and any other applicable
federal or state securities laws.
ARTICLE 9
CONDITIONS OF CLOSING BY SFX
The obligations of SFX hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
9.1 Representations, Warranties and Covenants.
9.1.1 All representations and warranties of each of the
Sellers made in this Agreement shall be true and complete in all material
respects as of the date hereof and on and as of the Closing Date as if made on
and as of that date.
17
9.1.2 All of the terms, covenants and conditions to be
complied with and performed by each of the Sellers on or prior to Closing Date
shall have been complied with or performed in all material respects.
9.1.3 SFX shall have received a certificate, dated as of the
Closing Date, executed by a duly qualified officer of each of the Operating
Entities and by each of the Shareholders, to the effect that their respective
representations and warranties contained in this Agreement are true and
complete in all material respects on and as of the Closing Date as if made on
and as of that date, and that each has complied with or performed all terms,
covenants and conditions to be complied with or performed by it in all material
respects on or prior to the Closing Date.
9.2 Governmental Consents. Each of the Sellers and SFX as required in
connection with the transactions contemplated hereby shall have filed the
requisite forms with the DOJ and the FTC pursuant to the HSR Act, and all
applicable waiting periods with respect to each such filing (including any
extensions thereof) shall have expired or been terminated.
9.3 Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending against, and no order, decree or judgment of any
court, agency or other governmental authority shall have been rendered against,
any party hereto which would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in accordance with its
terms.
9.4 Legal Opinion. The Sellers shall have delivered to SFX a written
opinion of their counsel, dated as of the Closing Date, substantially in the
form attached hereto as Exhibit B.
9.5 Delivery of Stock. On the Closing Date, SFX shall have received
certificates representing the Stock duly endorsed in blank for transfer or
accompanied by duly executed stock powers assigning the Stock in blank.
9.6 Resignations. On the Closing Date, SFX shall have received
the resignations of all of the officers and directors of each of the Operating
Entities.
9.7 Third Party Consents. The Asset Sellers shall have obtained and
shall have delivered to SFX all third party consents to the Material Contracts
and to all other Contracts assigned or transferred hereunder, except those the
absence of which will not have a material adverse effect on the business and
operations of the Asset Sellers.
9.8 Closing Documents. The Asset Sellers shall have delivered or
caused to be delivered to SFX on the Closing Date all deeds, bills of sale,
endorsements, assignments and other instruments of conveyance and transfer
reasonably satisfactory in form and substance to SFX, effecting the sale,
transfer, assignment and conveyance of the Sale Assets to SFX, including
without limitation the documents required to be delivered pursuant to Article
13.
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ARTICLE 10
CONDITIONS OF CLOSING BY THE SELLERS
The obligations of the Sellers hereunder are, at their option, subject
to satisfaction, at or prior to the Closing Date, of each of the following
conditions:
10.1 Representations, Warranties and Covenants.
10.1.1 All representations and warranties of SFX shall be
true and complete in all material respects as of the date hereof and on and as
of the Closing Date as if made on and as of that date.
10.1.2 All the terms, covenants and conditions to be complied
with and performed by SFX on or prior to the Closing Date shall have been
complied with or performed in all material respects.
10.1.3 The Sellers shall have received a certificate, dated
as of the Closing Date, executed by a duly qualified officer of SFX, to the
effect that the representations and warranties of SFX contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date, and that SFX has complied with
or performed all terms, covenants and conditions to be complied with or
performed by it in all material respects on or prior to the Closing Date.
10.2 Governmental Consents. Each of the Sellers and SFX as required in
connection with the transactions contemplated hereby shall have filed the
requisite forms with the DOJ and the FTC pursuant to the HSR Act, and all
applicable waiting periods with respect to each such filing (including any
extensions thereof) shall have expired or been terminated.
10.3 Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending against, and no other, decree or judgment of any
court, agency or other governmental authority shall have been rendered against
any party hereto which would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in accordance with its
terms.
10.4 Legal Opinion. SFX shall have delivered to the Sellers an opinion
of its corporate counsel, dated as of the Closing Date, substantially in the
form attached hereto as Exhibit C.
10.5 Miscellaneous Agreements. SFX shall have entered into (i)
employment agreements with each of Xxxxxx and Xxxxxx (the "Employment
Agreements") in the forms of Exhibit D and Exhibit E, respectively, and (ii) an
agreement with Xxxxx with respect to certain preferred tickets for SFX
promotions in Atlanta (the "Xxxxx Agreement") on terms to be mutually agreed
upon by SFX and Xxxxx, and (iii) the Xxxxxx X. Xxxxxxxx Arts Center, Inc. has
either consented to the sale or its rights to purchase the assets contemplated
by this Agreement have terminated..
19
10.6 Payment of Purchase Price. SFX shall have delivered or caused to
be delivered to the Sellers the Purchase Price in accordance with the terms of
Article 2 hereof.
ARTICLE 11
TRANSFER TAXES, FEES AND EXPENSES
11.1 Expenses. Except as set forth in Sections 11.2 and 11.3 hereof,
each party hereto shall be solely responsible for all costs and expenses
incurred by it in connection with the negotiation, preparation and performance
of and compliance with the terms of this Agreement.
11.2 Transfer Taxes and Similar Charges. All costs of transferring the
Stock and the Sale Assets in accordance with this Agreement, including
recordation, transfer and documentary taxes and fees, and any excise, sales or
use taxes, shall be borne equally by SFX and the Sellers.
11.3 Governmental Filing or Grant Fees. Any filing or grant fees
imposed by any governmental authority the consent of which is required to the
transactions contemplated hereby, including but not limited to any fees for
filings required under the HSR Act, shall be the obligation of SFX.
ARTICLE 12
COMMISSIONS OR FINDER'S FEE
12.1 SFX's Representation and Agreement to Indemnify. SFX represents
and warrants to the Sellers that neither it nor any person or entity acting on
its behalf has agreed to pay a commission, finder's fee or similar payment in
connection with this Agreement or any matter related hereto to any person or
entity. SFX further agrees to indemnify, defend and hold the Sellers harmless
from and against any and all claims, losses, liabilities and expenses
(including reasonable attorney's fees) arising out of a claim by any person or
entity based on any such arrangement or agreement made or alleged to have been
made by SFX.
12.2 The Sellers' Representation and Agreement to Indemnify. The
Sellers represent and warrant to SFX that neither they nor any person or entity
acting on their behalf has agreed to pay a commission, finder's fee or similar
payment in connection with this Agreement or any matter related hereto to any
person or entity. The Sellers further agree to indemnify, defend and hold SFX
harmless from and against any and all claims, losses, liabilities and expenses
(including reasonable attorney's fees) arising out of a claim by any person or
entity based on any such arrangement or agreement made or alleged to have been
made by the Sellers.
ARTICLE 13
DOCUMENTS TO BE DELIVERED AT CLOSING
13.1 The Sellers' Documents. At the Closing, the Sellers shall deliver
or cause to be delivered to SFX the following:
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13.1.1 Certified resolutions of the Board of Directors of
each of the Companies and of the general partner of the Joint Ventures
approving the execution and delivery of this Agreement and of each of the other
documents and agreements referred to herein and authorizing the consummation of
the transactions contemplated hereby and thereby;
13.1.2 Certificates, dated the Closing Date, by each of the
Operating Entities and the Shareholders in the form described in Section 9.1.3
above;
13.1.3 Governmental certificates showing that each of the
Operating Entities is duly incorporated and in good standing in the State of
Georgia dated not more than forty-five (45) calendar days before the Closing
Date;
13.1.4 Articles of Incorporation and Bylaws of each of the
Companies certified by their respective corporate secretaries or assistant
secretaries as of the Closing Date;
13.1.5 Bills of sale, deeds, assignments and other good and
sufficient instruments of conveyance, transfer and assignment, all in form and
substance reasonably satisfactory to counsel for SFX, as shall be effective to
vest in SFX or its permitted assignees good and marketable title in and to the
Sale Assets transferred in accordance with this Agreement;
13.1.6 The opinion letter, dated the Closing Date, referenced in
Section 9.4 above;
13.1.7 Certificates evidencing the Stock duly endorsed in blank;
13.1.8 All stock books and records, minute books and all
files and records pertaining to the business and operations of the Sale
Companies; and
13.1.9 Such additional information and material as SFX shall
have requested in a timely manner in writing and which is reasonably necessary
for the Closing.
13.2 SFX's Documents. At the Closing, SFX shall deliver or cause to be
delivered to the Sellers the following:
13.2.1 The Purchase Price in accordance with Section 2.2 hereof;
13.2.2 A certificate, dated the Closing Date, by SFX in the form
described in Section 10.1.3 above;
13.2.3 The opinion of SFX's corporate counsel, dated the Closing Date,
to the effect set forth in Section 10.3;
21
13.2.4 Governmental certificates showing that SFX is duly
incorporated and in good standing in the State of Delaware and that SFX is
qualified as a foreign corporation in the State of Georgia, dated not more than
forty-five (45) calendar days before the Closing Date;
13.2.5 Certified resolutions of the Board of Directors of SFX
approving the execution and delivery of this Agreement and each of the other
documents and agreements referred to herein and authorizing the consummation of
the transactions contemplated hereby and thereby;
13.2.6 Articles of Incorporation and Bylaws of SFX certified by SFX's
corporate secretary or assistant secretary as of the Closing Date;
13.2.7 An assignment and assumption agreement or agreements
reasonably satisfactory in form and substance to counsel for the Asset Sellers
effecting the assumption of the Assumed Liabilities;
13.2.8 The Employment Agreements and the Xxxxx Agreement; and
13.2.9 Such additional information and material as the
Sellers shall have requested in a timely manner in writing and which is
reasonably necessary for the Closing.
ARTICLE 14
INDEMNIFICATION
14.1 The Sellers' Indemnities. The Sellers hereby agree to indemnify,
defend and hold SFX harmless with respect to any and all demands, claims,
actions, suits, proceedings, assessments, judgments, costs, losses, damages,
liabilities and expenses (including, without limitation, reasonable attorneys'
fees) asserted against, resulting from, imposed upon or incurred by SFX
directly or indirectly relating to or arising out of the inaccuracy of any
representation or warranty, or the breach of any covenant or agreement,
contained herein or in any instrument or certificate delivered pursuant hereto.
14.2 SFX's Indemnities. SFX hereby agrees to indemnify, defend and
hold the Sellers harmless with respect to any and all demands, claims, actions,
suits, proceedings, assessments, judgments, costs, losses, damages, liabilities
and expenses (including, without limitation, reasonable attorneys' fees)
asserted against, resulting from, imposed upon or incurred by the Sellers
directly or indirectly relating to or arising out of the inaccuracy of any
representation or warranty, or the breach of any covenant or agreement,
contained herein or in any instrument or certificate delivered pursuant hereto.
14.3 Rights. SFX and the Sellers agree that the rights of
indemnification provided in this Article 14 are exclusive of and in addition to
any and all other such rights of SFX and the Sellers hereunder.
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14.4 Survival of Representations and Warranties. The representations
and warranties contained herein shall survive the Closing for a period of
twelve (12) months following the Closing Date (the "Claims Period"), and upon
the expiration of the Claims Period shall lapse and be of no further effect.
14.5 Limitations on Indemnity. Notwithstanding anything to the
contrary contained in this Agreement, and subject to the proviso set forth in
this Section 14.5, neither SFX nor the Sellers shall have any liability or
obligation to the other for breach of any representation, warranty, covenant or
agreement of such other party made in this Agreement except to the extent that
the aggregate of all claims by such other party for such breaches exceed One
Hundred Thousand Dollars ($100,000) in the aggregate (the "Threshold Amount"),
in which event the party so liable shall then be liable for all claims for any
such breaches, including the sums constituting the Threshold Amount. Any claim
for indemnification must be made within the Claims Period.
14.6 Procedures.
14.6.1 Promptly after the receipt by any party (the
"Indemnified Party") of notice of (A) any claim or (B) the commencement of any
action or proceeding which may entitle such party to indemnification under this
Section, such party shall give the other party (the "Indemnifying Party")
written notice of such claim or the commencement of such action or proceeding
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting from such claim. The failure to give the
Indemnifying Party timely notice under this clause shall not preclude the
Indemnified Party from seeking indemnification from the Indemnifying Party
unless such failure has materially prejudiced the Indemnifying Party's ability
to defend the claim or litigation.
14.6.2 If Indemnifying Party assumes the defense of any such
claim or litigation resulting therefrom with counsel reasonably acceptable to
Indemnified Party, the obligations of the Indemnifying Party as to such claim
shall be limited to taking all steps necessary in the defense or settlement of
such claim or litigation resulting therefrom and to holding the Indemnified
Party harmless from and against any losses, damages and liabilities caused by
or arising out of any settlement approved by the Indemnifying Party or any
judgment in connection with such claim or litigation resulting therefrom;
however, the Indemnified Party may participate, at its or his expense, in the
defense of such claim or litigation provided that the Indemnifying Party shall
direct and control the defense of such claim or litigation. The Indemnified
Party shall cooperate and make available all books and records reasonably
necessary and useful in connection with the defense. The Indemnifying Party
shall not, in the defense of such claim or any litigation resulting therefrom,
consent to entry of any judgment, except with the written consent of the
Indemnified Party, or enter into any settlement, except with the written
consent of the Indemnified Party, which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the Indemnified
Party of a release from all liability in respect of such claim or litigation.
14.6.3 If the Indemnifying Party shall not assume the defense
of any such claim or litigation resulting therefrom, the Indemnified Party may,
but shall have no obligation to, defend
23
against such claim or litigation in such manner as it may deem appropriate, and
the Indemnified Party may compromise or settle such claim or litigation without
the Indemnifying Party's consent. The Indemnifying Party shall promptly
reimburse the Indemnified Party for the amount of all expenses, legal or
otherwise, incurred by the Indemnified Party in connection with the defense
against or settlement of such claim or litigation. If no settlement of the
claim or litigation is made, the Indemnifying Party shall promptly reimburse
the Indemnified Party for the amount of any judgment rendered with respect to
such claim or in such litigation and of all expenses, legal or otherwise,
incurred by the Indemnified Party in the defense against such claim or
litigation.
ARTICLE 15
TERMINATION RIGHTS
15.1 Termination. This Agreement may be terminated by either SFX or
the Sellers, if the party seeking to terminate is not then in material default
or breach of this Agreement, upon written notice to the other upon the
occurrence of any of the following:
(a) if, on or prior to t he Closing Date, a party defaults in
any material respect in the observance or in the due and timely performance of
any of its covenants or agreements herein contained and such material default
shall not be cured within thirty (30) calendar days of the date of written
notice of default served by the party claiming such material default; or
(b) if the Closing has not occurred by March 31, 1998, unless
extended to June 30, 1998, pursuant to Section 3.1 above; or
(c) if there shall be in effect any judgment, final decree or
order that would prevent or make unlawful the Closing of this Agreement; or
(d) by the mutual written consent of SFX and the Sellers; or
(e) by SFX, if the conditions set forth in Sections 9.2 or
9.3 shall have become incapable of fulfillment and shall not have been waived
by SFX; or
(f) by the Sellers, if the conditions set forth in Sections
10.2 or 10.3 shall have become incapable of fulfillment and shall not have been
waived by the Sellers; or
(g) as provided in Sections 5.13 and 16.2 or any other
Section of this Agreement which specifically provides for termination.
15.2 Right to Cure. A defaulting party under Section 15.1(a) of this
Agreement shall only be entitled to invoke the cure provisions thereof once
during the term of this Agreement.
15.3 Liability. The termination of this Agreement under Section 15.1
shall not relieve any party of any liability for breach of this Agreement prior
to the date of termination.
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ARTICLE 16
OTHER PROVISIONS
16.1 Liquidated Damages. If the parties hereto shall fail to
consummate this Agreement on the Closing Date due to SFX's breach of any
material representation, warranty, covenant or condition hereunder, and the
Sellers are not at that time in breach of any material representation,
warranty, covenant or condition hereunder, then the Sellers would suffer direct
and substantial damages, which damages cannot be determined within reasonable
certainty. Therefore, because of the expense and delay which would be incurred
in such event by the Sellers, SFX shall pay to the Sellers the amount of Two
Million Dollars ($2,000,000), which amount shall constitute liquidated damages.
It is understood and agreed that such liquidated damage amount represents SFX's
and the Sellers' reasonable estimate of actual damages and does not constitute
a penalty. Recovery of liquidated damages shall be the sole and exclusive
remedy of the Sellers against SFX for failing to consummate this Agreement on
the Closing Date and shall be applicable regardless of the actual amount of
damages sustained; provided, however, that the Sellers shall be entitled to
recover all expenses, including attorney's fees, reasonably incurred by the
Sellers in enforcing this Section 16.1.
16.2 Risk of Loss. The risk of loss or damage to the Sale Assets prior
to the Closing Date shall be upon the Sellers. The Sellers shall repair,
replace and restore any such damaged or lost asset to its prior condition, as
soon as possible and in no event later than the Closing Date. Except as
provided below, if the Sellers fail to restore or replace any such asset having
a value exceeding Fifty Thousand Dollars ($50,000), SFX may elect either to
terminate this Agreement pursuant to Article 15 hereof or to consummate the
Closing on the Closing Date. If the Sellers fail to restore or replace such
asset and SFX does not elect to terminate this Agreement, the Sellers shall
assign or cause to be assigned to SFX at Closing its rights under any insurance
policy or pay over to SFX all proceeds of insurance covering such asset's
damage, destruction or loss. If the restoration and replacement of any damaged
or destroyed property has not been completed at the time the Closing would
otherwise be held, then unless the Sellers and SFX otherwise agree, the Closing
Date shall be delayed and shall take place within fifteen (15) calendar days
after the Sellers give written notice to SFX of completion of the restoration
or replacement of such asset. Time is of the essence in the Sellers'
restoration or replacement of the assets.
16.3 Specific Performance. In the event of a material breach by the
Sellers of their representations and obligations hereunder, not cured within
thirty (30) calendar days after written notice to that effect from SFX, SFX
shall have the right to bring an action to enforce the terms of this Agreement
by decree of specific performance, it being agreed that the property to be
transferred hereunder is unique and not readily available in the open market,
and the Sellers hereby further agree to waive any and all defenses against any
such action for specific performance based on the grounds that there is an
adequate remedy for money damages available.
16.4 Further Assurances. After the Closing, the Sellers shall from
time to time, at the request of and without further cost or expense to SFX,
execute and deliver such other instruments
25
of conveyance and transfer and take such other actions as may reasonably be
requested in order to more effectively consummate the transactions contemplated
hereby to vest in SFX good and marketable title to the assets being transferred
hereunder, and SFX shall from time to time, at the request of and without
further cost or expense to the Sellers, execute and deliver such other
instruments and take such other actions as may reasonably be requested in order
to more effectively relieve the Sellers of any obligations being assumed by SFX
hereunder.
16.5 Benefit and Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party may voluntarily or involuntarily
assign its interest under this Agreement without the prior written consent of
the other party, except for any assignment by SFX to an affiliate of SFX in
which case SFX shall remain fully obligated under this Agreement as an
assignor.
16.6 Entire Agreement. This Agreement, the Disclosure Schedule and the
Exhibits hereto embody the entire agreement and understanding of the parties
hereto and supersede any and all prior agreements, arrangements and
understandings relating to the matters provided for herein. In the event of a
conflict between the terms of this Agreement and any other agreement executed
in connection herewith, the terms of this Agreement shall prevail. No
amendment, waiver of compliance with any provision or condition hereof or
consent pursuant to this Agreement shall be effective unless evidenced by an
instrument in writing signed by the party against whom enforcement of any
waiver, amendment, change, extension or discharge is sought.
16.7 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
16.8 Governing Law. The construction and performance of this Agreement
shall be governed by the laws of the State of Georgia without giving effect to
the choice of law provisions thereof.
16.9 Notices. Any notice, demand or request required or permitted to
be given under the provisions of this Agreement shall be in writing and shall
be deemed to have been duly delivered and received on the date of personal
delivery or on the date of receipt, if mailed by registered or certified mail,
postage prepaid and return receipt requested, or on the date of a stamped
receipt, if sent by an overnight delivery service, or on the date of written
confirmation of delivery by facsimile or telecopy transmission, and shall be
addressed to the following addresses, or to such other address as any party may
request, in the case of the Sellers, by notifying SFX, and in the case of SFX,
by notifying the Sellers:
To the Sellers: Xxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxxx and Xxxxxx Management, Inc.
0000 Xxxxxx Xxxxxx; Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
26
Telecopy #: (000) 000-0000
With Copies to: Xxxxx X. Xxxxxx, Esq.
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
Suite 3100, Promenade II
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Telecopy #: (000) 000-0000
S. Xxxxxxx Xxxxx, III
Xxxxx Enterprises
0000 Xxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy #: (000) 000-0000
To SFX: SFX Concerts, Inc.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
President
Telecopy #: (000) 000-0000
With a Copy to: Xxxxxxx X. Xxxxx, Esq.
SFX Concerts, Inc.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy #: (000) 000-0000
16.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
SFX CONCERTS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
--------------------------------------
SOUTHERN PROMOTIONS, INC.
By: /s/ S. Xxxxxxx Xxxxx, III
--------------------------------------
Name: S. Xxxxxxx Xxxxx, III
--------------------------------------
Title: President
--------------------------------------
HIGH COTTON, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: President
--------------------------------------
BUCKHEAD PROMOTIONS, INC.
By: /s/ S. Xxxxxxx Xxxxx, III
--------------------------------------
Name: S. Xxxxxxx Xxxxx, III
--------------------------------------
Title: President
--------------------------------------
NORTHERN EXPOSURE, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: President
--------------------------------------
INTERFEST, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: President
--------------------------------------
XXXXXX AND XXXXXX MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxx Xxxxxx
--------------------------------------
Title: President
--------------------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
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CONCERT/SOUTHERN XXXXXXXX
PROMOTIONS
By: /s/ Xxxxx Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxx Xxxxxx
--------------------------------------
Title: President
--------------------------------------
ROXY VENTURES
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: President
--------------------------------------
/s/ Xxxx Xxxxxx
--------------------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
/s/ S. Xxxxxxx Xxxxx, III
--------------------------------------
S. Xxxxxxx Xxxxx, III
PURE COTTON, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: President
--------------------------------------
29
