1
EXHIBIT 2.1
PURCHASE AGREEMENT
among
NASHVILLE COUNTRY CLUB, INC.,
AWC ACQUISITION CORP.,
XXXXXX X. XXXXXX FAMILY TRUST,
XXXXXXXXXXX FAMILY TRUST,
XXXXX X. XXXXXX
and
XXXXXX & XXXX, INC.
July 31, 1997
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TABLE OF CONTENTS
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ARTICLE 1 - Purchase and Sale of Shares and Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Purchase and Sale of Shares and Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 Lost, Stolen or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2 - Representations and Warranties of NCCI and Acquisition Sub . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 NCCI Stock and NCCI SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Certain Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.6 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 3 - Representations and Warranties of the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Organization, Qualification and Corporate or Partnership Power . . . . . . . . . . . . . . . . . . . 7
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Authorization of Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Events Subsequent to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Tax Returns and Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.9 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11 Tangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.13 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.14 Suppliers and Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.15 Notes; Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.16 Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.17 Condition of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.19 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.20 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.21 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.22 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.23 Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.24 Certain Business Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.25 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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3.26 Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.27 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.28 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 4 - Conduct of Business Pending The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1 Conduct of Business Pending the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 No Other Bids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3 Lines of Business and Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.4 Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.5 Other Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.6 Conduct of Business by Acquisition Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 5 - Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.2 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.3 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.4 Taking of Necessary Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.5 Notice of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.6 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.7 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 6 - Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.1 Conditions to Obligations of Each Party to Effect the Closing . . . . . . . . . . . . . . . . . . . 25
6.2 Additional Conditions to NCCI's and Acquisition Sub's Obligations . . . . . . . . . . . . . . . . . 25
6.3 Additional Conditions to the Sellers' Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 7 - Termination, Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.3 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 8 - Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.1 By NCCI, Acquisition Sub and the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2 Claims for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.3 Defense by Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.4 Payment of Indemnification Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 9 - General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.2 Effect of Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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9.3 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.5 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.7 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.8 Material Adverse Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.9 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SCHEDULE 1 Disclosure Schedule
ANNEX I List of Shareholders of New Avalon, Inc., TBA Media, Inc.,
Xxxx/Xxxxxxxx Ltd., Inc. and Xxxx Xxxxxxxx Merchandising, Inc. and
Partners of Xxxxxx Xxxxxxx Amphitheater
ANNEX II List of NCCI SEC Documents
EXHIBIT A Form of Assignment of Partnership Interests
EXHIBIT B Form of Assignment of Booking, Management and Related Fee Interests
EXHIBIT C Form of Registration Rights Agreement
EXHIBIT D Form of Shareholders Agreement
EXHIBIT E Form of Employment Agreements
EXHIBIT F Form of Partners Agreement
EXHIBIT G Form of Opinion of Counsel to the Sellers
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of July 31, 1997 (this "Agreement"),
is by and among Nashville Country Club, Inc., a Tennessee corporation ("NCCI"),
AWC Acquisition Corp., a Delaware corporation and wholly owned subsidiary of
NCCI ("Acquisition Sub"), the Xxxxxx X. Xxxxxx Family Trust ("Geddes Family
Trust"), the Xxxxxxxxxxx Family Trust ("Xxxxxxxxxxx Family Trust") and Xxxxx X.
Xxxxxx ("Xxxxxx;" Xxxxxx Family Trust, Xxxxxxxxxxx Family Trust and Xxxxxx are
individually referred to herein as a "Selling Shareholder" and are collectively
referred to herein as the "Selling Shareholders"), and Xxxxxx & Xxxx, Inc., a
California corporation ("A&J;" the Selling Shareholders and A&J are
collectively referred to herein as the "Sellers").
RECITALS
WHEREAS, the Selling Shareholders own all of the issued and
outstanding capital stock (the "Capital Stock") of West Coast Amphitheater
Corp., a California corporation ("WCAC"), New Avalon, Inc., a California
corporation ("New Avalon"), TBA Media, Inc., a California corporation ("TBA"),
Xxxx/Xxxxxxxx Ltd., Inc., a Texas corporation ("ECL"), and Xxxx Xxxxxxxx
Merchandising, Inc., a California corporation ("ECM;" WCAC, ECM, New Avalon,
TBA and ECL are individually referred to herein as a "Company" and are
collectively referred to herein as the "Companies"); and
WHEREAS, the Selling Shareholders desire to sell fifty-one percent
(51%) of the Capital Stock (the "Shares") to NCCI, and NCCI desires to purchase
the Shares from the Selling Shareholders, on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, A&J is a general partner of Xxxxxx Xxxxxxx Amphitheater, a
California general partnership (the "Partnership"), and owns a twenty-five
percent (25%) interest (the "A&J Partnership Interest") in the capital and
profits of the Partnership as described in that certain Second Amended and
Completely Restated Agreement of General Partnership of Xxxxxx Xxxxxxx
Amphitheater, dated April 1, 1991, between A&J, IMA Investment Corp. ("IMA
Corp."), Xxxxxx Xxxxxxx, Inc. ("SMI") and Xxxx X. Xxxxxxx, as amended (the
"Partnership Agreement"); and
WHEREAS, IMA Corp. is a general partner of the Partnership and owns a
forty-five percent (45%) interest in the Partnership as described in the
Partnership Agreement (the "IMA Corp. Partnership Interest"); and
WHEREAS, Peach Street Partners, Ltd. ("Peach Street") is a general
partner of the Partnership and owns a five percent (5%) interest in the
Partnership as described in the Partnership Agreement (the "Peach Street
Partnership Interest"); and
WHEREAS, immediately prior to the closing of the transactions
contemplated by this Agreement, A&J will acquire one hundred percent (100%) of
the IMA Corp. Partnership Interest from IMA Corp. and eighty percent (80%) of
the Peach Street Partnership Interest (the "Assigned Peach Street Partnership
Interest") from Peach Street; and
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WHEREAS, A&J desires to sell eight percent (8%) of the A&J Partnership
Interest (the "Assigned A&J Partnership Interest"), one hundred percent (100%)
of the IMA Corp. Partnership Interest and the Assigned Peach Street Partnership
Interest to NCCI, which together shall constitute fifty-one percent (51%) of
the partnership interests in the Partnership (collectively, the "Partnership
Interests"), and NCCI desires to purchase the Partnership Interests from A&J on
the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions set forth herein, the parties
hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES AND PARTNERSHIP INTERESTS
1.1 Purchase and Sale of Shares and Partnership Interests. Subject
to the terms and conditions of and in reliance upon the representations and
warranties set forth in this Agreement, (a) the Selling Shareholders agree to
sell, assign, transfer and deliver to NCCI and NCCI agrees to purchase from
each of the Selling Shareholders the number of Shares of Capital Stock of each
of the Companies set forth opposite the name of each such Selling Shareholder
on Annex I attached hereto under the column entitled "Number of Shares Being
Sold," and (b) A&J agrees to sell, assign, transfer and deliver to NCCI and
NCCI agrees to purchase from A&J the Partnership Interests, in each case free
and clear of all security interests, liens and other encumbrances and claims,
except as set forth in the Disclosure Schedule (as hereinafter defined). The
sale of the Shares and the Partnership Interests to NCCI shall be referred to
as the "Acquisition."
1.2 Purchase Price. The aggregate purchase price (the "Purchase
Price") payable to the Sellers for the Shares and the Partnership Interests
will be equal to the greater of (1) $7,000,000 and (2) fifty-one percent (51%)
of the sum of (i) six times the average of EBITDA (as defined below), as
calculated in accordance with generally accepted accounting principles ("GAAP")
consistently applied, for the Partnership and WCAC for the years 1996, 1997 and
1998 (the "Computation Period") and (ii) six times the average of the net
income before taxes, as calculated in accordance with GAAP, of the Companies
other than WCAC for the Computation Period. For purposes of this Agreement,
"EBITDA" shall mean earnings before interest income and expense, income taxes,
depreciation and amortization. NCCI and the Sellers acknowledge and agree that
WCAC is a newly-formed entity through which NCCI is anticipated to develop
certain amphitheaters proposed to be constructed in Camarillo, California and
Portland, Oregon (the "Amphitheaters"). NCCI, Acquisition Sub and the Sellers
acknowledge and agree that if NCCI's development of the Amphitheaters is
delayed solely and exclusively due to NCCI's inability to adequately finance
such development for reasons other than the financial performance of
Acquisition Sub, the Computation Period for purposes of determining the average
of EBITDA for WCAC shall be extended by the period of such delay. NCCI,
Acquisition Sub and the Sellers further acknowledge and agree that in the event
the Computation Period is extended for purposes of determining the average of
EBITDA for WCAC, the parties shall proceed to a closing on the payment of any
additional consideration payable to the Sellers in respect of the Companies
other
PURCHASE AGREEMENT - PAGE 7
7
than WCAC, as set forth in this Section 1.2, without regard to the extension of
such Computation Period for purposes of determining whether any additional
consideration may be payable to the Sellers in respect of the Partnership and
WCAC. The Purchase Price shall be paid or delivered to the Sellers as follows:
(a) At the Closing, NCCI shall deliver to the Sellers by
wire transfer to one or more accounts designated in writing by the
Sellers to NCCI cash in an amount equal to Seven Million Dollars
($7,000,000) (the "Initial Purchase Price"). The Initial Purchase
Price shall be allocated among the Sellers as specified in Annex I.
(b) Within thirty (30) days following its receipt of the
audited financial statements for the Companies and the Partnership for
the Computation Period, NCCI will prepare a statement (the "Purchase
Price Statement") calculating the final Purchase Price for the
Acquisition and setting forth the amount, if any, of additional
consideration payable to the Sellers in respect of the Acquisition and
deliver such Purchase Price Statement to the Sellers. In the event the
Purchase Price set forth on the Purchase Price Statement is greater
than the Initial Purchase Price, NCCI shall issue and deliver to the
Sellers within thirty (30) days of its delivery of the Purchase Price
Statement a number of shares of NCCI's common stock (the "Common
Stock") valued in an amount equal to the difference between such
greater purchase price and the Initial Purchase Price. In the event
that the Purchase Price set forth on the Purchase Price Statement is
equal to or less than the Initial Purchase Price, the Initial Purchase
Price shall constitute the final Purchase Price and no additional
consideration shall be payable by NCCI to the Sellers in respect of
the Acquisition. For purposes of determining the number of shares of
Common Stock payable to the Sellers pursuant to this Section 1.2(b),
if any, the shares of Common Stock will be valued based on the average
closing price (the "Average Price") of the Common Stock as reported by
The Nasdaq Stock Market or other securities exchange on which the
Common Stock is traded for each trading day in the Computation Period.
No fraction of a share of NCCI Common Stock will be issued to the
Sellers but in lieu thereof each Seller who would otherwise be
entitled to receive fractional shares will be paid an amount in cash
equal to the product of (A) the number of fractional shares to which
such holder is otherwise entitled and (B) the Average Price. No
interest shall be paid on such amount. Any additional consideration
payable to the Sellers pursuant to this Section 1.2(b) shall be
allocated among the Sellers in accordance with the allocation of the
Initial Purchase Price among the Sellers as specified in Annex I
attached hereto. In the event there shall be any change in the number
of outstanding shares of Common Stock of the Company effected during
the Computation Period by reason of a stock split or stock dividend,
then the parties shall in good faith mutually determine whether such
change equitably requires an adjustment in the Average Price for
purposes of determining the number of shares of Common Stock payable
to the Sellers pursuant to this Section 1.2(b).
Within twenty (20) days of its receipt of the Purchase Price
Statement, the Sellers shall notify NCCI of their objections, if any,
to the Purchase Price Statement and to NCCI's calculation of the final
Purchase Price and the aggregate number of shares of NCCI Common
Stock, if any, payable to the Sellers in respect of the Acquisition.
The Sellers' failure to object to NCCI's calculation of the final
Purchase Price and the
PURCHASE AGREEMENT - PAGE 8
8
additional consideration payable to the Sellers, if any, within such
twenty-day period shall constitute acceptance thereof. If the Sellers
object to the Purchase Price Statement and the Sellers and NCCI are
unable to resolve the disputed items and agree on the final Purchase
Price within fifteen (15) days of the Sellers' notification to NCCI of
its objections, such dispute shall be referred to Xxxxxx Xxxxxxxx LLP
or other independent accountants (the "Independent Accountants")
mutually acceptable to NCCI and the Sellers. The Independent
Accountants shall, within thirty (30) days following its selection,
deliver to NCCI and the Sellers a written report calculating the final
Purchase Price, which calculation shall be conclusive and binding on
NCCI and the Sellers. If the Sellers object to the Purchase Price
Statement, NCCI's obligation, if any, to deliver shares of NCCI Common
Stock to the Sellers shall be extended until thirty (30) days
following the final determination of the Purchase Price.
1.3 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C., 0000 Xxx Xxxxxx, 0000 Xxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxx, on July
31, 1997 or as soon as reasonably practicable thereafter as the conditions set
forth in Article 6 have been satisfied or waived (the "Closing Date"). At the
Closing:
(a) NCCI and Acquisition Sub will (i) pay to the Sellers
the Initial Purchase Price by wire transfer of immediately available
funds and (ii) execute and deliver to the Sellers such other documents
and instruments required to be executed and delivered by NCCI and
Acquisition Sub under the terms of this Agreement;
(b) Each Selling Shareholder will deliver to NCCI (i)
certificates representing the Shares listed opposite such Selling
Shareholder's name on Annex I under the column labeled "Number of
Shares Being Sold" and (ii) such other documents and instruments
required to be delivered by the Selling Shareholders under the terms
of this Agreement or reasonably requested by NCCI. The certificates
representing the Shares shall be duly endorsed in blank or accompanied
by stock powers duly executed by such Selling Shareholder transferring
the same. Each Selling Shareholder agrees to cure any deficiencies
with respect to the endorsement and transfer of the certificates
representing the Shares being sold by such Selling Shareholder; and
(c) A&J will deliver to NCCI (i) an assignment of the
Partnership Interests substantially in the form of Exhibit A attached
hereto, (ii) an assignment of all of its rights to receive booking,
management and related fees under the Partnership Agreement and under
that certain Promotion Agreement, dated January 1997, among A&J, SMI
and Western Amphitheater Partners (the "Promotion Agreement")
substantially in the form of Exhibit B attached hereto and (iii) such
other documents and instruments required to be delivered by A&J under
the terms of this Agreement or reasonably requested by NCCI.
1.4 Registration Rights. Each Seller will execute a Registration
Rights Agreement in the form attached hereto as Exhibit C and shall have the
registration and other rights provided in such Registration Rights Agreement
with respect to any shares of NCCI Common Stock issued pursuant to Section
1.2(b) hereof, which Registration Rights Agreement is hereby incorporated
herein by this reference as if set forth in full in this Agreement. The parties
hereto stipulate and
PURCHASE AGREEMENT - PAGE 9
9
agree that the execution and delivery of the Registration Rights Agreement is
intended to provide the Sellers with flexibility in disposing of any shares of
NCCI Common Stock that may be issued pursuant to Section 1.2(b) of this
Agreement and does not evidence any present intention to dispose of any such
shares upon their issuance.
1.5 Lost, Stolen or Destroyed Certificates. In the event any
certificates evidencing Shares shall have been lost, stolen or destroyed, NCCI
shall pay the Purchase Price in exchange for such lost, stolen or destroyed
certificate(s), upon the making of an affidavit of that fact by the holder
thereof; provided, however, that NCCI may, in its discretion and as a condition
precedent to the payment thereof, require the owner of such lost, stolen or
destroyed certificate(s) to deliver a bond in such sum as NCCI may reasonably
direct as indemnity against any claim that may be made against NCCI with
respect to the certificate(s) alleged to have been lost, stolen or destroyed.
1.6 Further Action. If, at any time after the Closing Date, any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest NCCI with full right, title and possession and all rights,
privileges and immunities with respect to the Shares and the Partnership
Interests, the Selling Shareholders and A&J, as appropriate, shall take all
such action.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF NCCI AND ACQUISITION SUB
NCCI and Acquisition Sub hereby represent and warrant to the Sellers
as follows as of the date hereof and as of the Closing Date:
2.1 Organization and Qualification. NCCI has been duly
incorporated and is validly existing as a corporation and is in good standing
under the laws of the State of Tennessee and has the requisite corporate power
to carry on its business as now conducted. Acquisition Sub has been duly
incorporated and is validly existing as a corporation and is in good standing
under the laws of the State of Delaware and has the requisite corporate power
to carry on its business as now conducted.
2.2 Authority Relative to this Agreement. Each of NCCI and
Acquisition Sub has the requisite corporate power and authority to enter into
this Agreement and to carry out its respective obligations hereunder. The
execution and delivery of this Agreement by NCCI and Acquisition Sub and the
consummation by NCCI and Acquisition Sub of the transactions contemplated
hereby have been duly authorized by the respective Boards of Directors of NCCI
and Acquisition Sub and no other corporate proceedings on the part of NCCI or
Acquisition Sub are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
NCCI and Acquisition Sub and constitutes the valid and binding obligation of
each such company, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity. None of the execution and delivery of this Agreement by
NCCI or Acquisition Sub, the performance by NCCI or Acquisition Sub of its
obligations hereunder or the consummation of the transactions
PURCHASE AGREEMENT - PAGE 10
10
contemplated hereby by NCCI or Acquisition Sub will require any consent,
approval or notice under, or violate, breach, be in conflict with or constitute
a default (or an event that, with notice or lapse of time or both, would
constitute a default) under, or permit the termination of, or result in the
creation or imposition of any lien upon any properties, assets or business of
NCCI or Acquisition Sub under any note, bond, indenture, mortgage, deed of
trust, lease, franchise, permit, authorization, license, contract, instrument
or other agreement or commitment or any order, judgment or decree to which NCCI
or Acquisition Sub is a party or by which NCCI or Acquisition Sub or any of
their respective assets or properties is bound or encumbered, except those that
have already been given, obtained or filed. Other than in connection with
filings under the Securities Act of 1933, as amended (the "Securities Act"), if
any, necessary to perfect an exemption from registration under the Securities
Act and to effect the registrations contemplated by the Registration Rights
Agreement, filings made with the National Association of Securities Dealers,
Inc. to list the shares of NCCI Common Stock that may be issued in connection
with the Acquisition in the National Market System of The Nasdaq Stock Market
and filings to be made with state securities regulatory agencies, no
authorization, consent or approval of, or filing with, any public body, court
or authority is necessary on the part of NCCI or Acquisition Sub for the
consummation by NCCI and Acquisition Sub of the transactions contemplated by
this Agreement.
2.3 NCCI Stock and NCCI SEC Documents. NCCI has furnished the
Sellers with a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by NCCI with the Securities and
Exchange Commission ("SEC") since January 1, 1996 (the "NCCI SEC Documents"),
which are all the documents (other than preliminary materials) that NCCI was
required to file with the SEC since such date and all of which documents are
listed on Annex II attached hereto. As of its date, each NCCI SEC Document was
in compliance, in all material respects, with the requirements of its form. The
financial statements of NCCI included in the NCCI SEC Documents complied, at
the time of filing with the SEC, as to form, in all material respects, with
applicable accounting requirements and published rules and regulations of the
SEC with respect thereto, were prepared in accordance with generally accepted
accounting principles, applied on a consistent basis during the periods
involved, and fairly presented, in all material respects (subject, in the case
of unaudited statements, to normal, recurring year-end audit adjustments) the
financial position of NCCI as at the dates thereof and the results of its
operations and changes in financial position for the periods then ended.
2.4 Certain Corporate Matters. Each of NCCI and Acquisition Sub is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the ownership of its properties, the employment
of its personnel or the conduct of its business requires it to be so qualified.
NCCI has full corporate power and authority and all authorizations, licenses
and permits necessary to carry on the business in which it engages or in which
it proposes presently to engage and to own and use the properties owned and
used by it. NCCI and Acquisition Sub have each delivered to the Sellers true,
accurate and complete copies of their charter documents and bylaws which
reflect all amendments made thereto at any time prior to the date of this
Agreement. The minute books containing the records of meetings of the
shareholders and boards of directors of NCCI and Acquisition Sub are accurate
and complete in all material respects. All material corporate actions taken by
NCCI and Acquisition Sub since
PURCHASE AGREEMENT - PAGE 11
11
their respective dates of incorporation have been duly authorized and/or
subsequently ratified, as necessary. Neither NCCI nor Acquisition Sub is in
default under, or in violation of, any provision of its charter or bylaws.
2.5 Broker's Fees. Neither NCCI nor anyone on its behalf has any
liability to any broker, finder, investment banker or agent, or has agreed to
pay any brokerage fees, finder's fees or commissions, or to reimburse any
expenses of any broker, finder, investment banker or agent in connection with
the Acquisition or any similar transaction.
2.6 Disclosure. The representations and warranties and statements
of fact made by NCCI and Acquisition Sub in this Agreement and in certificates
and other written statements or agreements delivered or to be delivered
pursuant to this Agreement are accurate, correct and complete on the date of
this Agreement and will, except as contemplated hereby, be accurate, correct
and complete at the Closing and do not and will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained herein or therein not
misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Except as set forth in the correspondingly numbered section of the
disclosure schedule attached hereto as Schedule 1 and incorporated herein by
this reference (the "Disclosure Schedule"), each Seller hereby jointly and
severally represents and warrants to NCCI and Acquisition Sub as follows as of
the date hereof and as of the Closing Date. The representations and warranties
in this Article 3 are made by each Seller only with respect to the Shares or
Partnership Interests, as the case may be, being sold by such Seller hereunder.
3.1 Organization, Qualification and Corporate or Partnership
Power. Each Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. Each Company is duly
qualified to do business as a foreign corporation and is in good standing in
the jurisdictions specified in Section 3.1 of the Disclosure Schedule, which
are the jurisdictions in which the ownership of its properties, the employment
of its personnel or the conduct of its business requires that it be so
qualified or where a failure to be so qualified or licensed would have a
material adverse effect on its financial condition, results of operation or
business. Each Company has full corporate power and authority and all
authorizations, licenses and permits necessary to carry on the business in
which it is engaged or in which it proposes presently to engage and to own and
use the properties owned and used by it. Each Company has delivered to NCCI
true, accurate and complete copies of its charter and bylaws which reflect all
amendments made thereto at any time prior to the date of this Agreement. The
minute books containing the records of meetings of the shareholders and boards
of directors of each Company, the stock certificate books and the stock record
books of each Company are complete and correct in all material respects. The
stock record books of each Company and the shareholder lists of each Company,
which each Company has previously furnished to NCCI, are complete and correct
in all respects and accurately reflect the record ownership and, to the
knowledge of the Shareholders, the beneficial ownership of all the outstanding
shares of each Company's capital stock and all other outstanding securities
issued by each Company. All material corporate actions
PURCHASE AGREEMENT - PAGE 12
12
taken by each Company since incorporation have been duly authorized and/or
subsequently ratified as necessary. None of the Companies is in default under
or in violation of any provision of its charter or bylaws. None of the
Companies or the Partnership is in default or in violation of any restriction,
lien, encumbrance, indenture, contract, lease, sublease, loan agreement, note
or other obligation or liability by which it is bound or to which any of its
assets is subject. The Partnership is duly organized, validly existing and in
good standing under the laws of the State of California and it has all
requisite partnership power and authority to carry on its business as it is now
being conducted and to own, lease or operate its properties as and in the
places where such business is now conducted. The Partnership is not required to
be qualified, licensed or domesticated as a foreign partnership in any
jurisdiction. The Sellers have delivered to NCCI true, accurate and complete
copies of the Partnership Agreement which reflect all amendments made thereto
at any time prior to the date of this Agreement. The books of account of the
Partnership are complete and correct in all material respects and there have
been no material transactions involving the business of the Partnership which
properly should have been set forth in those books and which are not accurately
so set forth. No consent of any person or entity is or will be required for A&J
to sell the Partnership Interests to NCCI pursuant to this Agreement which
consent has not been obtained.
3.2 Capitalization. New Avalon's entire authorized capital stock
consists of 100,000 shares of Common Stock (the "New Avalon Common Shares"), of
which 12,500 shares are issued and outstanding and 12,500 shares will be issued
and outstanding immediately prior to the Closing. ECM's entire authorized
capital stock consists of 100,000 shares of Common Stock (the "ECM Common
Shares"), of which 3,000 shares are issued and outstanding and 3,000 shares
will be issued and outstanding immediately prior to the Closing. TBA's entire
authorized capital stock consists of 50,000 shares of Common Stock (the "TBA
Common Shares"), of which 5,000 shares are issued and outstanding and 5,000
shares will be issued and outstanding immediately prior to the Closing. ECL's
entire authorized capital stock consists of 100,000 shares of Common Stock (the
"ECL Common Shares"), of which 1,000 shares are issued and outstanding and
1,000 shares will be issued and outstanding immediately prior to the Closing.
WCAC's entire authorized capital stock consists of 100,000 shares of Common
Stock (the "WCAC Common Shares"), of which 1,000 shares are issued and
outstanding and 1,000 shares will be issued and outstanding immediately prior
to the Closing (the New Avalon Common Shares, the ECM Common Shares, the TBA
Common Shares, the WCAC Common Shares and the ECL Common Shares are
collectively referred to herein as the "Common Shares"). All of the issued and
outstanding Common Shares have been and, as of the Closing Date, will be duly
authorized and are and, as of the Closing Date, will be validly issued, fully
paid and nonassessable and have not been and, as of the Closing Date, will not
be issued in violation of any pre-emptive rights. There are no outstanding or
authorized options, rights, warrants, calls, convertible securities, rights to
subscribe, conversion rights or other agreements or commitments to which any
Company is a party or which are binding upon any Company providing for the
issuance or transfer by any Company of additional shares of its capital stock
and no Company has reserved any shares of its capital stock for issuance, nor
are there any outstanding stock option rights, phantom equity or similar
rights, contracts, arrangements or commitments based upon the book value,
income or other attribute of any Company. There are no voting trusts or any
other agreements or understandings with respect to the voting of any Company's
capital stock. Upon consummation of the Acquisition, NCCI will own fifty-one
percent (51%) of the equity interest in each Company and no Company will have
outstanding any stock or securities convertible or
PURCHASE AGREEMENT - PAGE 13
13
exchangeable for any shares of its capital stock, nor have outstanding any
rights, options, agreements or arrangements to subscribe for or to purchase its
capital stock or any stock or securities convertible into or exchangeable for
its capital stock. Annex I attached hereto sets forth a true accurate and
complete list of all holders of capital stock of each Company and the number of
shares of capital stock held by each such person. All capital stock, options,
warrants and other securities issued by the Companies were issued in
compliance, in all respects, with all applicable federal and state securities
laws. At the time of the Closing, each of the Selling Shareholders will own,
beneficially and of record, the Common Shares reflected opposite such Selling
Shareholder's name on Annex I hereto free and clear of any liens, claims,
security interests, pledges or encumbrances of any nature. Upon consummation of
the Acquisition in accordance with the terms of this Agreement, NCCI will
acquire the Shares free and clear of any liens, claims, security interests,
pledges or encumbrances of any nature. No Selling Shareholder owns,
beneficially or of record, any capital stock of any Company other than the
Common Shares reflected on Annex I. Annex I correctly sets forth the ownership
interests in the Partnership. The Partnership Interests are owned by A&J free
and clear of all liens, security interests, claims, charges or other
encumbrances. Except as contemplated by this Agreement, neither A&J nor the
Partnership has granted any rights of any kind to any person or entity to
acquire any interest in the Partnership.
3.3 Authorization of Transaction. Each of the Sellers has the
requisite power and authority to enter into this Agreement and perform its
obligations hereunder. The execution, delivery and performance of this
Agreement and the transactions contemplated by this Agreement have been duly
authorized by all requisite action of the Sellers. This Agreement has been duly
executed and delivered by each of the Sellers and constitutes the valid and
binding obligation of each of the Sellers, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally or
by general principles of equity. None of the execution and delivery of this
Agreement by the Sellers, the performance by the Sellers of their obligations
hereunder or the consummation of the transactions contemplated hereby by the
Sellers will require any consent, approval or notice under, or violate, breach,
be in conflict with or constitute a default (or an event that, with notice or
lapse of time or both, would constitute a default) under, or permit the
termination of, or result in the creation or imposition of any lien upon any
properties, assets or business of any Company or the Partnership under any
charter, bylaws, partnership agreement, note, bond, indenture, mortgage, deed
of trust, lease, franchise, permit, authorization, license, contract,
instrument or other agreement or commitment or any order, judgment or decree to
which any Company or the Partnership is a party or by which any Company or the
Partnership or any of their respective assets or properties is bound or
encumbered, except those that have already been given, obtained or filed, all
as set forth in Section 3.3 of the Disclosure Schedule. No notice to, filing
with or authorization, consent or approval of any public body or authority is
necessary for the consummation by the Sellers of the transactions contemplated
by this Agreement.
3.4 Subsidiaries. None of the Companies owns or is obligated to
purchase any equity interest in or any other interest convertible into or
exchangeable for an equity interest in any entity.
PURCHASE AGREEMENT - PAGE 14
14
3.5 Financial Statements. The Sellers have delivered to NCCI (a)
audited balance sheets of each of the Companies (other than WCAC) and the
Partnership as of December 31, 1996, (b) audited statements of operations and
statements of cash flows of each of the Companies (other than WCAC) and the
Partnership for each of the years in the two-year period ended December 31,
1996, (c) unaudited balance sheets of each of the Companies and the Partnership
as of March 31, 1997, and (d) unaudited statements of operations and statements
of cash flows of each of the Companies and the Partnership for the three (3)
months ended March 31, 1997 (collectively, the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods covered
thereby and present fairly the financial condition of each of the Companies
(other than WCAC) and the Partnership as of such dates and the results of its
operations and changes in financial position for such periods.
3.6 Events Subsequent to Financial Statements. Except as disclosed
in the Financial Statements, since December 31, 1996, there has not been:
(a) any materially adverse change in the financial
condition, results of operations or business of any Company or the
Partnership;
(b) any sale, lease, transfer, license or assignment of
any material assets, tangible or intangible, of any Company or the
Partnership, other than in the ordinary course of business;
(c) any damage, destruction or property loss, whether or
not covered by insurance, affecting materially adversely the
properties or business of any Company or the Partnership;
(d) any declaration or setting aside or payment of any
dividend or distribution with respect to the shares of capital stock
of any Company or the ownership interests of the Partnership or any
redemption, purchase or other acquisition of any such shares or
interests;
(e) any mortgage or pledge of, or subjection to any
material lien, charge, security interest or encumbrance of any kind
on, any of the assets, tangible or intangible, of any Company or the
Partnership (other than liens arising by operation of law which secure
obligations which are not yet due and payable);
(f) any incurrence of indebtedness or liability or
assumption of obligations by any Company or the Partnership other than
(i) those incurred in the ordinary course of business, (ii) those
which do not exceed $100,000 in the aggregate, and (iii) those
incurred in the course of negotiating, documenting and consummating
the transactions contemplated by this Agreement;
(g) any cancellation or compromise by any Company or the
Partnership of any material debt or claim, except for adjustments made
in the ordinary course of business which, in the aggregate, are not
material;
PURCHASE AGREEMENT - PAGE 15
15
(h) any waiver or release by any Company or the
Partnership of any right of any material value;
(i) any sale, assignment, transfer or grant by any
Company or the Partnership of any rights under any concessions,
leases, licenses, agreements, patents, inventions, trademarks, trade
names or copyrights or with respect to any know-how or other
intangible assets;
(j) any material arrangement, agreement or undertaking
entered into by any Company or the Partnership not terminable on 30
days or less notice without cost or liability (including, without
limitation, any payment of or promise to pay any bonus or special
compensation) with employees or any increase in compensation or
benefits to officers or directors of any Company or partners of the
Partnership, other than in the ordinary course of business;
(k) except for the formation of WCAC and the transactions
contemplated by this Agreement, any change made or authorized in the
charter or bylaws of any Company or the Partnership Agreement of the
Partnership;
(l) except for the formation of WCAC and the transactions
contemplated by this Agreement, any issuance, sale or other
disposition by any Company or the Partnership of any shares of its
capital stock or partnership interests or other equity securities or
interests, or any grant of any options, warrants or other rights to
purchase or obtain (including upon conversion or exercise) shares of
capital stock or partnership interests or other equity securities or
interests;
(m) any loan to or other transaction with any officer,
director, shareholder or partner of any Company or the Partnership
giving rise to any claim or right of any Company or the Partnership
against any such person or of such person against any Company or the
Partnership;
(n) any payment to or other transaction with any officer,
director or shareholder of any Company or any partner of the
Partnership involving an amount in excess of $20,000, individually or
in the aggregate, other than the payment of monthly compensation
consistent with customary practice;
(o) any acceleration, termination, modification or
cancellation or threat thereof by any party of any contract, lease or
other agreement or instrument to which any Company or the Partnership
is a party or by which it is bound so as to affect, materially and
adversely, the properties or business of any Company or the
Partnership; or
(p) except for the formation of WCAC, the assignment of
rights to develop the Amphitheaters to WCAC and the transactions
contemplated by this Agreement, any other material transaction or
commitment entered into other than in the ordinary course of business
by any Company or the Partnership.
PURCHASE AGREEMENT - PAGE 16
16
3.7 Undisclosed Liabilities. None of the Companies or the
Partnership has any material liability or obligation whatsoever, known or
unknown, either accrued, absolute, contingent or otherwise, except to the
extent shown on the Financial Statements, incurred in the normal and ordinary
course of business of any Company since January 1, 1997 (provided that,
liabilities or obligations incurred in connection with the termination of
employees shall not be considered liabilities incurred in the ordinary course
of business), or incurred in the course of negotiating, documenting and
consummating the transactions contemplated by this Agreement. None of the
Companies or the Partnership is indebted, directly or indirectly, to any person
who is an officer, director or shareholder of any Company or any affiliate of
any such person in any amount whatsoever other than for salaries for services
rendered or reimbursable business expenses, and no such officer, director,
shareholder or affiliate is indebted to any Company, except for advances made
to employees of the Companies in the ordinary course of business to meet
reimbursable business expenses anticipated to be incurred by such obligor.
3.8 Tax Returns and Audits. The taxable year of each Company and
the Partnership ends December 31. Each Company and the Partnership has duly and
timely filed or caused to be filed all tax returns (the "Tax Returns") required
to be filed on behalf of itself and has paid in full or fully reserved against
in the Financial Statements all taxes, interest, penalties, assessments and
deficiencies due or claimed to be due on behalf of itself to foreign, federal,
state or local taxing authorities (including taxes on properties, income,
franchises, licenses, sales, use and payrolls). Such Tax Returns are correct in
all material respects, and no Company or the Partnership is required to pay any
other taxes for such periods except as shown in such Tax Returns. The income
tax returns filed by the Companies and the Partnership have not been, and are
not being, to the knowledge of the Sellers, examined by the Internal Revenue
Service or other applicable taxing authorities for any period. All taxes or
estimates thereof that are due, or are claimed or asserted by any taxing
authority to be due, have been timely and appropriately paid so as to avoid
penalties for underpayment. Except for amounts not yet due and payable, all tax
liabilities to which the properties of the Companies or the Partnership may be
subject have been paid and discharged. The provisions for income and other
taxes payable reflected in the Financial Statements make adequate provision for
all then accrued and unpaid taxes of the Companies and the Partnership. There
are no tax liens (other than liens for taxes which are not yet due and payable)
on any of the properties of the Companies or the Partnership, nor are there any
pending or threatened examinations or tax claims asserted. No Company has
granted any extensions of limitation periods applicable to tax claims or filed
a consent under Section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code") relating to collapsible corporations. Except in jurisdictions in
which a Company voluntarily files tax returns, no claim has ever been made by a
taxing authority that either a Company is or may be subject to taxation by that
jurisdiction. True and correct copies of all federal, foreign, state and local
income and other tax returns, notices from foreign, federal, state and local
taxing authorities, tax examination reports and statements of deficiencies
assessed against or agreed to by any Company since January 1, 1994, have been
delivered to NCCI, and the same are listed in Section 3.8 of the Disclosure
Schedule. None of the Companies or the Partnership is a party to, or bound by,
any tax indemnity, tax sharing or tax allocation agreement. None of the
Companies is a party to any agreement that has resulted or would result in the
payment of any "excess parachute payments" within the meaning of Section 280G
of the Code. None of the Companies has ever been a member of an "affiliated
group," as defined in Section 1504(a) of the Code (other than a group of which
such Company is the common parent). All positions taken on federal Tax Returns
that
PURCHASE AGREEMENT - PAGE 17
17
could give rise to a penalty for substantial understatement pursuant to Section
6662(d) of the Code have been disclosed on such Tax Returns. None of the
Companies or the Partnership is a United States real property holding
corporation as defined in Section 897 of the Code. None of the Sellers is a
foreign person within the meaning of Section 1445(b)(2) of the Code. None of
the Companies has made any tax elections under any section of the Code,
including, without limitation under any of Sections 108, 168, 338, 441, 463,
472, 1017, 1033 or 4977 of the Code (or any predecessor thereof). None of the
assets and properties of any Company or the Partnership is an asset or property
that NCCI or any of its affiliates is or will be required to treat as being (i)
owned by any other Person pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended, and in effect immediately before
the enactment of the Tax Reform Act of 1986, or (ii) tax-exempt use property
within the meaning of Section 168(h)(1) of the Code. No closing agreement
pursuant to Section 7121 of the Code (or any predecessor provision) or any
similar provision of any state, local, or foreign law has been entered into by
or with respect to any Company or any assets thereof. None of the Companies has
agreed to or is required to make any adjustment pursuant to Section 481(a) of
the Code (or any predecessor provision) by reason of any change in any
accounting method, none of the Companies has applications pending with any
taxing authority requesting permission for any changes in any accounting
method, and the Internal Revenue Service has not proposed any such adjustment
or change in accounting method therefor. None of the Companies has been or is
in violation (or with notice or lapse of time or both, would be in violation)
of any applicable law relating to the payment of withholding of taxes. Each
Company has duly and timely withheld from salaries, wages and other
compensation and paid over to the appropriate taxing authorities all amounts
required to be so withheld and paid over for all periods under all applicable
laws.
3.9 Books and Records. The general ledgers and books of account of
the Companies and the Partnership, all federal, state and local income,
franchise, property and other tax returns filed by the Companies and the
Partnership, with respect to their assets, and all other books and records of
the Companies and the Partnership are in all material respects complete and
correct and have been maintained in accordance with good business practice and
in accordance with all applicable procedures required by laws and regulations
in all material respects.
3.10 Real Property. Set forth in Section 3.10 of the Disclosure
Schedule is a complete and accurate list and a brief description of all real
property owned or leased by the Companies and the Partnership. With respect to
each lease so set forth, except as contemplated by this Agreement: (a) the
lease has been validly executed and delivered by the Companies and the
Partnership, as applicable, and, to the knowledge of the Sellers, by the other
party or parties thereto and is in full force and effect; (b) neither the
Companies or the Partnership, as applicable, and, to the knowledge of the
Sellers, any other party to the lease is in material breach or default, and no
event has occurred on the part of the Companies or the Partnership, as
applicable or, to the knowledge of the Sellers, on the part of any other party
which, with notice or lapse of time, would constitute such a breach or default
or permit termination, modification or acceleration under the lease; (c) the
lease will continue to be binding in accordance with its terms following the
consummation of the Acquisition; (d) none of the Companies or the Partnership
has repudiated and, to the knowledge of the Sellers, no other party to the
lease has repudiated any provision thereof; (e) there are no disputes, oral
agreements or delayed payment programs in
PURCHASE AGREEMENT - PAGE 18
18
effect as to the lease; and (f) all facilities leased thereunder have been
approved by all necessary governmental authorities, have been maintained in
accordance with normal industry practice and are in good condition, working
order and repair.
3.11 Tangible Property. Each of the Companies and the Partnership
have good and marketable title to, or a valid leasehold interest in, each item
of tangible property, whether real, personal or mixed, reflected on their books
and records as owned or used by them, subject to no material encumbrances,
loans, security interests, mortgages or pledges.
3.12 Intellectual Property.
(a) Section 3.12(a) of the Disclosure Schedule sets
forth a list of intellectual property owned by each of the Companies
and the Partnership including all patents, patent applications,
trademarks, service marks, trade dress, trade names, trade secrets,
corporate names, customer lists, copyrights, mask works, technology or
intellectual property that are material to the business of the
Companies and the Partnership and registrations or applications to
register any of the foregoing and a list of all licenses or other
contracts related thereto (collectively, the "Intellectual Property").
With respect to each such item of Intellectual Property:
(i) a Company or the Partnership is the sole and
exclusive owner and has the sole and exclusive right to use
the item in the conduct of its business;
(ii) no proceedings have been instituted, are
pending or are threatened which challenge the validity,
enforceability, use or ownership thereof;
(iii) the item (A) does not infringe upon or
otherwise violate the rights of others, (B) to the knowledge
of the Sellers, is not being infringed upon by others and (C)
is not subject to any outstanding order, decree, judgment,
stipulation or charge;
(iv) no license, sublicense or agreement
pertaining to the item has been granted by any Company or the
Partnership;
(v) no Company or the Partnership has received
any charge of interference or infringement with respect to the
item;
(vi) except in the ordinary course of business, no
Company or the Partnership has agreed to indemnify any person
or entity for or against any infringement with respect to the
item;
(vii) the transactions contemplated by this
Agreement will have no material adverse effect on the right,
title and interest of any Company or the Partnership in the
item;
(viii) the Companies and the Partnership have taken
all steps which are commercially reasonable to protect the
rights set forth in Section 3.12(a) of the
PURCHASE AGREEMENT - PAGE 19
19
Disclosure Schedule and will continue to use commercially
reasonable efforts to maintain those rights prior to the
Closing Date so as to not materially adversely affect the
validity or enforcement of such rights; and
(ix) the Sellers have supplied NCCI with true and
complete copies of all written documentation evidencing the
ownership of the item and of all licenses and other contracts
related thereto.
(b) Section 3.12(b) of the Disclosure Schedule sets
forth a list describing all patents, trademarks, trade names, service
marks, copyrights, trade secrets and mask works of others which any
Company or the Partnership practices or uses that are material to such
Company or the Partnership. With respect to each such item of
intellectual property:
(i) any license agreement covering the item is a
valid and binding agreement and is in full force and effect;
(ii) no event has occurred which constitutes a
breach of such license agreement, no Company or the
Partnership has repudiated and, to the knowledge of the
Sellers, no other party thereto has repudiated any provision
thereof and there are no disputes, oral arrangements or
delayed payment programs in effect as to any such license
agreement;
(iii) the Sellers have supplied NCCI with a true
and complete copy of the license agreement;
(iv) the transactions contemplated by this
Agreement will have no material adverse effect on the ability
of the Companies and the Partnership to continue using or
practicing each such item; and
(v) the Sellers are not aware of any claim that
the exercise of the rights granted to any Company or the
Partnership with respect to such item infringes upon the
intellectual property rights of any third party.
(c) No Company or the Partnership has infringed,
misappropriated or otherwise violated any intellectual property rights
of any third party. The Sellers are not aware of any infringement,
misappropriation or violation with respect to intellectual property
which will occur as a result of the continued operation of the
business of the Companies and the Partnership as now conducted or as
presently proposed to be conducted.
(d) The Companies and the Partnership have taken
commercially reasonable security measures to protect the security,
confidentiality and value of all the material intellectual property
owned by them.
3.13 Contracts. Section 3.13 of the Disclosure Schedule lists the
following contracts and written arrangements, true and complete copies of which
have been delivered to NCCI, to which a Company or the Partnership is a party:
PURCHASE AGREEMENT - PAGE 20
20
(a) any contract for the lease of personal property from
or to third parties providing for lease payments in excess of
$10,000.00 per annum;
(b) any contract for the purchase or sale of supplies,
products manufactured by a Company or the Partnership or other
personal property or for the furnishing or receipt of services which
contract calls for performance over a period of more than one year or
which involves more than the sum of $10,000.00, except no license
agreement need be disclosed pursuant to this Section 3.13 unless it
calls for performance over a period of more than one year and involves
more than the sum of $15,000.00;
(c) any joint venture agreement;
(d) any agreement or instrument under which a Company or
the Partnership is or may become indebted for borrowed money;
(e) any noncompetition agreement;
(f) any other contract in which the consequences of a
default or termination would have a materially adverse effect on the
financial condition of any Company or the Partnership or on the
prospects or the conduct of the business of any Company or the
Partnership;
(g) any standard form of license agreement; and
(h) any other contract or arrangement not entered into in
the ordinary course of business.
All contracts and arrangements listed in Section 3.13 of the Disclosure
Schedule are valid and binding agreements. No Company or the Partnership is
and, to the knowledge of the Sellers, no other party is in breach or default,
and no event has occurred on the part of any Company or the Partnership or, to
the knowledge of the Sellers, on the part of any other party to any such
contract or arrangement which with notice or lapse of time would constitute a
breach or default or permit termination under any such contract or arrangement.
None of such contracts or arrangements will be terminated or modified by the
consummation of the Acquisition. The Sellers have previously made available to
NCCI all of the material service agreements of the Companies and the
Partnership with their customers. No Company or the Partnership is a party to
any verbal contract or arrangement which, if reduced to written form, would be
required to be listed in Section 3.13 of the Disclosure Schedule under the
terms of subsections (a)-(h) of this Section 3.13.
3.14 Suppliers and Customers. Section 3.14 of the Disclosure
Schedule is a true and correct list of all suppliers to whom any Company or the
Partnership made payments during the year ended December 31, 1996, in excess of
five percent of such paying entity's gross revenues as reflected in the
Financial Statements for such year and all customers of any Company or the
Partnership that paid, during the fiscal year ended December 31, 1996, more
than five percent of the gross revenues of such Company or the Partnership as
reflected in the Financial Statements for such year. Since December 31, 1996,
no material customer of any Company or the
PURCHASE AGREEMENT - PAGE 21
21
Partnership has notified such Company or the Partnership that it will
substantially decrease or cease doing business with such Company or the
Partnership.
3.15 Notes; Accounts Receivable. As of the Closing Date, all notes
payable to and accounts receivable of the Companies and the Partnership will be
properly reflected on their books and records and will be valid receivables
subject to no setoffs or counterclaims.
3.16 Powers of Attorney. There are no outstanding material powers
of attorney or similar instruments executed by any Company or the Partnership.
3.17 Condition of Property. Each building, fixture, machine and
piece of equipment (having a net book value of $5,000.00 or more) owned or used
by any Company or the Partnership is in good operating condition and repair,
subject to normal wear and tear, and is in compliance with all zoning, building
and fire codes in all material respects. Each Company and the Partnership owns
or leases under valid lease all buildings, machinery, equipment and other
tangible assets used in the conduct of its business as presently conducted.
3.18 Insurance. The Companies and the Partnership are insured under
the policies listed in Section 3.18 of the Disclosure Schedule (the "Insurance
Policies"). The Insurance Policies are in full force and effect. All premiums
due on the Insurance Policies or renewals thereof have been paid and there is
no default under any of the Insurance Policies.
3.19 Litigation. Section 3.19 of the Disclosure Schedule sets forth
any instances in which (a) any Company or the Partnership is subject to any
judgment or order (other than orders of general applicability) of any court or
quasi-judicial or administrative agency of any jurisdiction, domestic or
foreign, or where there is any charge, complaint, lawsuit or governmental
investigation pending or threatened against any Company or the Partnership; or
(b) any Company or the Partnership is a plaintiff in any action, domestic or
foreign, judicial or administrative, or any such action exists in which a
counterclaim against any Company or the Partnership is pending or might be
brought. None of the actions, suits, proceedings or investigations set forth in
Section 3.19 of the Disclosure Schedule could result in any adverse change in
the condition, financial or otherwise, of the Companies and the Partnership,
the same being fully reserved against in the Financial Statements. There are no
unsatisfied judgments, orders (other than orders of general applicability),
decrees or stipulations affecting any Company or the Partnership or to which
any Company or the Partnership is a party and there is no reason to believe
that any such action, suit, proceeding or investigation may be brought or
threatened against any Company or the Partnership.
3.20 Employees. Section 3.20 of the Disclosure Schedule sets forth
and the Sellers have furnished to NCCI true and complete copies of: (a) any
written employment agreements with officers and directors of the Companies; and
(b) any written employment agreements which by their terms may not be
terminated by a Company or the Partnership, as applicable, at will or which
xxxxx xxxxxxxxx payments. No Company or the Partnership has entered into any
similar oral employment agreements. To the Seller's knowledge, no key employee
or group of employees has any plans to terminate employment with any Company or
the Partnership. No Company or the Partnership is a party to or bound by any
collective bargaining agreement. There are no loans or other obligations
payable or owing by any Company to any shareholder,
PURCHASE AGREEMENT - PAGE 22
22
officer, director or employee of a Company (except salaries and wages incurred
and accrued in the ordinary course of business), nor are there any loans or
debts payable or owing by any of such persons to any Company or any guarantees
by any Company of any loan or obligation of any nature to which any such person
is a party. The Companies have complied in all material respects with all laws
and regulations which relate to the employment of labor, employee civil rights
or equal employment opportunities.
3.21 Employee Benefit Plans. Section 3.21 of the Disclosure
Schedule sets forth and the Sellers have furnished to NCCI true and complete
copies of (a) any nonqualified deferred or incentive compensation or retirement
plans or arrangements, (b) any qualified retirement plans or arrangements, (c)
any other employee compensation, severance or termination pay or welfare
benefit plans, programs or arrangements and (d) any related trusts, insurance
contracts or other funding arrangements maintained, established or contributed
to by any Company or the Partnership or to which any Company or the Partnership
is a party or otherwise is bound ("Employee Benefit Plans"). None of the
Companies or the Partnership is a member of a "controlled group" or an
"affiliated service group" as both of such terms are defined in Section 414 of
the Code. Except as required by law, none of the Companies or the Partnership
maintains or contributes or has never maintained or contributed to any funded
or unfunded medical, health or life insurance plan or arrangement for retirees
or terminated employees. None of the Companies or the Partnership contributes
or has any obligation to make and has never contributed or had any obligation
to make any payment or contribution to a "multiemployer plan," as that term is
defined in Section 3(37) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and no Company or the Partnership has any actual or
potential liability under Section 4201 of ERISA for any complete or partial
withdrawal from a multiemployer plan. No Company or the Partnership maintains,
contributes to or has any liability with respect to any employee pension
benefit plan (as defined in Section 3(2) of ERISA) which is intended to meet
the requirements of a qualified plan under Section 401(a) of the Code. No
Company or the Partnership maintains, contributes to or has any liability with
respect to a plan which is subject to Title IV of ERISA or Section 412 of the
Code. With respect to the employee benefit plans listed in Section 3.21 of the
Disclosure Schedule, the Sellers have furnished to NCCI true and complete
copies of (i) any summary plan description or other employee communication
materials, (ii) the latest financial statements and annual reports and (iii)
all documents filed with the Internal Revenue Service or the Department of
Labor since December 31, 1994. All employee benefit plans and related trusts
listed in Section 3.21 of the Disclosure Schedule and maintained or contributed
to by any Company or the Partnership or with respect to which any Company or
the Partnership now has or has ever had any liability or potential liability
comply in form and in operation with all requirements of ERISA and the Code.
All required reports with respect to such plans required by applicable law have
been filed and all contributions or payments presently anticipated hereunder
have been made or properly accrued. No applications for rulings, determination
letters, advisory opinions or prohibited transaction exemptions are currently
pending before Internal Revenue Service, the Department of Labor or the Pension
Benefit Guaranty Corporation with respect to any such employee benefit plans or
arrangements or any related trusts. None of such employee benefit plans or
arrangements, any related trusts, the trustees of any related trusts or the
directors, officers and employees of any Company or the Partnership is the
subject of any lawsuit, arbitration or other proceeding concerning any benefit
claim or other benefit-related matter (other than routine claims in the
ordinary course of business), and there have been no prohibited transactions as
described
PURCHASE AGREEMENT - PAGE 23
23
in Section 406 of ERISA or as defined in Section 4975 of the Code with respect
to any such plan. Neither the Companies, their directors, officers and
employees nor any other fiduciary, as such term is defined in Section 3 of
ERISA, has committed any breach of fiduciary responsibility imposed by ERISA or
any other applicable law which would subject a Company or its directors,
officers and employees to liability under ERISA or any applicable law.
3.22 Guarantees. No Company or the Partnership is a guarantor or
otherwise liable for any material indebtedness of any other person, firm or
corporation other than endorsements for collection in the ordinary course of
business.
3.23 Legal Compliance. The Companies and each of their directors,
officers and employees (the individuals only in their capacities as
representatives of any Company) and the Partnership have complied in all
material respects with all applicable laws and regulations of foreign, federal,
state and local governments and all agencies thereof, and no claim has been
filed against any Company or the Partnership alleging a violation of any such
laws or regulations. The Companies hold all of the material permits, licenses,
certificates or other authorizations of foreign, federal, state or local
governmental agencies required for the conduct of their business as presently
conducted or proposed to be conducted.
3.24 Certain Business Relationships. To the knowledge of the
Sellers, none of the present or former shareholders, directors, officers or
employees of any Company owns, directly or indirectly, any interest in any
business, corporation or other entity (other than investments in publicly held
companies) which, on the date hereof or within the past 12 months, has been
involved in any manner in any business arrangement or relationship with any
Company, and none of the foregoing persons owns any property or rights,
tangible or intangible, which are used in the business of any Company.
3.25 Broker's Fees. No Company or the Partnership nor anyone on
their behalf has any liability to any broker, finder, investment banker or
agent, or has agreed to pay any brokerage fees, finder's fees or commissions,
or to reimburse any expenses of any broker, finder, investment banker or agent
in connection with the Acquisition or any similar transaction.
3.26 Investment Representations.
(a) In the event that NCCI issues shares of Common Stock
to the Sellers pursuant to Section 1.2(b) of this Agreement, each
Seller will acquire NCCI Common Stock for his or its own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intent of distributing or
selling such shares.
(b) Each Seller has reviewed the representations
concerning NCCI contained in this Agreement and has made or has had
the opportunity to make inquiry concerning NCCI. Each Seller has
sufficient knowledge and experience so as to be able to evaluate the
risks and merits of his or its investment in NCCI, and such Seller is
able financially to bear the risks thereof. Each Seller is entering
into the transactions contemplated herein based on such Seller's own
assessments of the merits and risks, upon such Seller's own experience
as an officer and shareholder of a Company and is not relying on any
business
PURCHASE AGREEMENT - PAGE 24
24
plan, projections, valuations or other financial information provided
to such Seller by NCCI other than the NCCI SEC Documents. Each Seller
further acknowledges and agrees that NCCI and Acquisition Sub have
made no assurances of any nature whatsoever regarding the future
operations of NCCI and Acquisition Sub and have made no guarantees as
to the profitability of an investment therein. Each Seller further
acknowledges that he is an accredited investor as defined in Rule 501
of Regulation D of the Securities Act.
(c) Each Seller understands that any certificates of NCCI
Common Stock to be issued to him pursuant to this Agreement will bear
a restrictive legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such shares are registered under
such Act or an opinion of counsel satisfactory to NCCI is
obtained to the effect that such registration is not
required."
The foregoing legend shall be removed from the certificates, at the
request of the holder thereof, at such time as they become registered for
resale or eligible for resale pursuant to Rule 144(k) under the Securities Act.
3.27 Disclosure. The representations and warranties and statements
of fact made by the Sellers in this Agreement, in the Disclosure Schedule and
in certificates and other written statements or agreements delivered or to be
delivered pursuant to this Agreement are accurate, correct and complete in all
material respects on the date of this Agreement and will, except as
contemplated hereby, be accurate, correct and complete in all material respects
at the Closing Date and do not and will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained herein or therein not misleading.
3.28 Knowledge. Where the foregoing representations and warranties
are qualified "to the knowledge of the Sellers" or words of similar import,
such terms shall (i) as to the Companies, mean matters of which either Xxxxxx
X. Xxxxxx, Xxxxxx Xxxxxxxxxxx or Xxxxx X. Xxxxxx has actual knowledge and (ii)
as to the Partnership, matters of which Xxxxxx X. Xxxxxx has actual knowledge.
ARTICLE 4
CONDUCT OF BUSINESS PENDING THE CLOSING
4.1 Conduct of Business Pending the Closing. The Sellers covenant
and agree that, prior to the Closing, unless NCCI shall otherwise agree in
writing or as otherwise expressly contemplated or permitted by this Agreement:
(a) Each Company and the Partnership shall conduct its
business and operations, including its cash management practices, the
collection of receivables,
PURCHASE AGREEMENT - PAGE 25
25
maintenance of facilities and payment of payables, only in the usual
and ordinary course of business and consistent with past custom and
practice in all material respects;
(b) No Company or the Partnership shall directly or
indirectly do any of the following: (i) sell, pledge, dispose of or
encumber any material portion of its assets, except in the ordinary
course of business; (ii) amend or propose to amend its charter or
bylaws or Partnership Agreement; (iii) split, combine or reclassify
any outstanding shares of its capital stock, or declare, set aside or
pay any dividend or other distribution payable in cash, stock,
property or otherwise with respect to shares of its capital stock;
(iv) redeem, purchase or acquire or offer to acquire any shares of its
capital stock or other securities; (v) create any subsidiaries; or
(vi) enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in this
Section 4.1(b);
(c) No Company or the Partnership shall (i) issue, sell,
pledge or dispose of, or agree to issue, sell, pledge or dispose of,
any additional shares of, or any options, warrants, conversion
privileges or rights of any kind to acquire any shares of, its
capital; (ii) acquire (by merger, consolidation, acquisition of stock
or assets or otherwise) any corporation, partnership or other business
organization or division or material assets thereof; (iii) incur any
material indebtedness for borrowed money, issue any debt securities or
guarantee any indebtedness to others; or (iv) enter into or modify any
contract, agreement, commitment or arrangement with respect to any of
the foregoing;
(d) No Company or the Partnership shall (i) enter into or
modify any employment, severance or similar agreements or arrangements
with, or grant any bonus, salary increase, severance or termination
pay to, any officers or directors; or (ii) in the case of employees
who are not officers or directors, take any action other than in the
ordinary course of business and consistent in all material respects
with past practice (none of which shall be unreasonable or unusual)
with respect to the grant of any bonuses, salary increases, severance
or termination pay or with respect to any increase of benefits payable
in effect on January 1, 1997;
(e) No Company or the Partnership shall adopt or amend
any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment or other employee
benefit plan, agreement, trust, fund or arrangement for the benefit or
welfare of any employee;
(f) Except as otherwise required by its charter or
bylaws, by this Agreement or by applicable law, no Company shall call
any meeting of its shareholders and, with respect to any meeting of
its shareholders called by any Company, the Selling Shareholders shall
provide to NCCI copies of all written materials and other information
given to the shareholders prior to the time such materials and
information are given to the shareholders;
(g) Each Company and the Partnership shall use
commercially reasonable efforts to cause its current insurance (or
reinsurance) policies not to be cancelled or terminated or any of the
coverage thereunder to lapse, unless simultaneously with such
PURCHASE AGREEMENT - PAGE 26
26
termination, cancellation or lapse, replacement policies underwritten
by insurance and reinsurance companies of nationally recognized
standing providing coverage equal to or greater than the coverage
under the cancelled, terminated or lapsed policies for substantially
similar premiums are in full force and effect;
(h) Each Company and the Partnership shall (i) use
commercially reasonable efforts to preserve intact its business
organization and goodwill, keep in full force and effect all material
rights, licenses, permits and franchises relating to its business,
keep available the services of its officers and employees as a group
and maintain satisfactory relationships with suppliers, distributors,
customers and others having business relationships with it; (ii)
report on a regular and frequent basis, at reasonable times, to
representatives of NCCI regarding operational matters and the general
status of ongoing operations; (iii) use commercially reasonable
efforts not to take any action which would render, or which reasonably
may be expected to render, any representation or warranty made in this
Agreement untrue in any material respect at any time prior to the
Closing Date if then made; and (iv) notify NCCI of any emergency or
other change in the normal course of their respective business or in
the operation of its properties and of any tax audits, tax claims,
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated) if such
emergency, change, audit, claim, complaint, investigation or hearing
would be material, individually or in the aggregate, to the financial
condition, results of operations or business of any Company or the
Partnership, or to the ability the Sellers or NCCI to consummate the
transactions contemplated by this Agreement;
(i) The Sellers shall deliver to NCCI promptly (but in
any event within two business days) after the discovery or receipt of
notice of any default under any material agreement to which it is a
party or any other material adverse event or circumstance affecting
any Company or the Partnership (including the filing of any material
litigation against any Company or the Partnership or the existence of
any dispute with any person or entity which involves a reasonable
likelihood of such litigation being commenced), a certificate of the
President of the applicable Company specifying the nature and period
of the existence thereof and what actions such Company has taken and
proposes to take with respect thereto;
(j) Each Company and the Partnership shall use
commercially reasonable efforts to maintain its assets in customary
repair, order and condition, replace in accordance with past practice
its inoperable, worn out or obsolete assets with assets of quality at
least comparable to the original quality of the assets being replaced
and maintain in all material respects its books, accounts and records
in accordance with past custom and practice as used in the preparation
of the Financial Statements;
(k) Each Company and the Partnership shall use
commercially reasonable efforts to maintain in full force and effect
the existence of all material patents, inventions, trademarks, service
marks, trade dress, trade names, corporate names, copyrights, mask
works, trade secrets, licenses, computer software, data and
documentation and other proprietary rights, which it uses or owns; and
PURCHASE AGREEMENT - PAGE 27
27
(l) Each Company and the Partnership shall comply in all
material respects with all legal requirements and contractual
obligations applicable to its operations and business and pay all
applicable taxes.
Notwithstanding any other provision of this Agreement, the amendment
or modification of the Disclosure Schedule by the Sellers after the time NCCI
has signed this Agreement shall have no effect with respect to the agreements,
covenants and obligations of the Sellers, NCCI and Acquisition Sub pursuant to
this Section 4.1 and Sections 6.2 and 6.3 of this Agreement.
4.2 No Other Bids. The Sellers covenant and agree that no Company
or the Partnership shall authorize or knowingly permit any officer, director,
shareholder or employee of, or any investment banker, attorney, accountant or
other representative retained by, any Company, the Partnership or any Seller
to, make, solicit, initiate, encourage or respond to a submission of a proposal
or offer from any person or entity (other than NCCI) relating to any
liquidation, dissolution, recapitalization, merger, consolidation or
acquisition or purchase of all or a material portion of the assets of any
Company or the Partnership, or the Shares or the Partnership Interests or other
similar transaction or business combination involving any Company, the
Partnership or any Seller (hereinafter collectively referred to as a "Third
Party Offer"). No Seller will participate in any negotiations regarding, or
furnish to any person or entity (other than NCCI) any information with respect
to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any person or entity (other
than NCCI) to do or seek any of the foregoing. The Sellers will immediately
cease and cause to be terminated any contacts or negotiations currently pending
with respect to Third Party Offers, if any, and shall use their best efforts to
cause all reports, material, data and other written information heretofore
disseminated by them or on their behalf by any such officer, director or
employee or any investment banker, attorney, accountant or other representative
in connection with any such Third Party Offer or any inquiry or proposal
related thereto to be promptly returned to them. The Sellers shall promptly
notify NCCI of the receipt of any Third Party Offer or any inquiry or
communication which might reasonably be expected to lead to any Third Party
Offer and will provide NCCI with all information that NCCI may reasonably
request with respect thereto.
4.3 Lines of Business and Capital Expenditures. Unless approved in
writing by NCCI, the Sellers covenant that they will not permit the Companies
or the Partnership to (a) enter into any new material lines of business; (b)
change their investment, liability management and other material policies in
any material respect; or (c) incur or commit to any capital expenditures,
obligations or liabilities in connection therewith.
4.4 Accounting Methods. Unless approved in writing by NCCI, the
Sellers covenant that none of the Companies or the Partnership will change its
methods of accounting in effect at December 31, 1996, except as required by
changes in generally accepted accounting principles as concurred in by NCCI's
independent accountants.
4.5 Other Actions. Unless approved in writing by NCCI, the Sellers
covenant that none of the Companies or the Partnership will take any action
that would or might reasonably be expected to result in any of the
representations and warranties of the Sellers set forth in this
PURCHASE AGREEMENT - PAGE 28
28
Agreement becoming untrue in any material respect after the date hereof or any
of the conditions to the Acquisition set forth in Article 6 of this Agreement
not being satisfied.
4.6 Conduct of Business by Acquisition Sub. Prior to the Closing
Date, NCCI covenants that Acquisition Sub will not conduct any business
activities and will not incur any material liabilities.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the other agreements
contemplated hereby and the transactions contemplated hereby and thereby shall
be paid by NCCI or the Seller incurring such expenses. The parties acknowledge
that the Sellers may charge expenses incurred by them to the Companies. All
costs and expenses incurred by NCCI and Acquisition Sub in connection with this
Agreement shall be borne by NCCI.
5.2 Notification of Certain Matters. Each party shall give prompt
notice to the others of (a) the occurrence or failure to occur of any event,
which occurrence or failure would result in any Material Adverse Breach (as
defined in Section 9.8 of this Agreement), and (b) any failure of such party,
or any officer, director, employee or agent thereof, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied
hereunder.
5.3 Access to Information. From the date hereof to the Closing
Date, each of the Sellers, Acquisition Sub and NCCI shall, and shall cause
their respective officers, directors, employees and agents to, afford the
officers, employees, agents and representatives of the other parties hereto
complete access at all reasonable times to such officers, employees and agents
and their properties, books and records (all such access to be arranged through
the respective officers of the parties hereto so as not to be unreasonably
disruptive to any of the parties), and shall furnish each of such parties all
financial, operating, personnel, compensation, tax and other data and
information as such parties, through their respective officers, employees,
agents or representatives, may request.
5.4 Taking of Necessary Action. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees, subject to
applicable laws, to use all reasonable efforts promptly to take or cause to be
taken all action and promptly to do or cause to be done all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement. Without
limiting the foregoing, the Sellers, Acquisition Sub and NCCI shall use their
best efforts to maintain and make all filings with and obtain all consents,
approvals, and/or assurances from third parties and appropriate governmental
agencies and authorities necessary or advisable for the consummation of the
transactions contemplated by this Agreement. Each party shall cooperate with
the other in good faith to help the other satisfy its obligations in this
Section 5.6.
5.5 Notice of Changes. The Sellers and NCCI shall each promptly
inform the other in writing if any change shall have occurred or shall have
been threatened (or any development
PURCHASE AGREEMENT - PAGE 29
29
shall have occurred or shall have been threatened involving a prospective
change) in NCCI's or any Company's or the Partnership's financial condition,
results of operations or business that is or may reasonably be expected to have
a material adverse effect on any such entity's financial condition, results of
operations or business.
5.6 Press Releases. The Sellers and NCCI shall consult with each
other as to the form and substance of any press release or other public
disclosure of matters related to this Agreement or any of the transactions
contemplated hereby; provided, however, that nothing in this Section 5.6 shall
be deemed to prohibit any party hereto from making any disclosure that is
required to fulfill such party's disclosure obligations imposed by law,
including, without limitation, federal securities laws.
5.7 Employee Matters. NCCI and the Sellers agree that all
employees of any Company or the Partnership immediately prior to the Closing
shall be employed by such Company or the Partnership immediately after the
Closing at such level of pay which is mutually agreed upon between each
employee and NCCI, it being understood that NCCI shall not have any obligations
to continue employing such employees for any length of time or at any level of
pay for any length of time thereafter, except as set forth in binding
agreements of employment. In the event any Employee Benefit Plans are not
continued after the Closing, employees will be eligible to participate in
comparable NCCI's employee benefit plans, provided that employees of any
Company or the Partnership who remain employees following the Closing shall be
credited (for purposes of both participation and vesting) with their periods of
service with any Company or the Partnership prior to the Closing.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Obligations of Each Party to Effect the Closing.
The respective obligations of each party to effect the Closing shall be subject
to the fulfillment at or prior to the Closing Date of the following condition:
(a) no order shall have been entered and remain in effect
in any action or proceeding before any foreign, federal or state court
or governmental agency or other foreign, federal or state regulatory
or administrative agency or commission that would prevent or make
illegal the consummation of the transactions contemplated hereby.
6.2 Additional Conditions to NCCI's and Acquisition Sub's
Obligations. The obligations of NCCI and Acquisition Sub to effect the
Acquisition are subject to the satisfaction of the following conditions on or
before the Closing Date:
(a) Except for breaches which do not constitute a
Material Adverse Breach (as defined in Section 9.8 of this Agreement)
by the Sellers, the representations and warranties set forth in
Article 3 of this Agreement (without regard to any amendments or
modifications of the Disclosure Schedule after the time NCCI has
signed this Agreement) will be true and correct as of the date hereof
and at and as of the Closing Date, as though then made and as though
the Closing Date were substituted for the date of this Agreement
PURCHASE AGREEMENT - PAGE 30
30
throughout such representations and warranties and with appropriate
modifications of tense with respect to representations and warranties
made as of a specified date;
(b) The Sellers shall have performed, in all material
respects, each obligation and agreement and complied, in all material
respects, with each covenant to be performed and complied with by them
under this Agreement prior to the Closing Date, including, without
limitation, all of their agreements contained in Articles 4 and 5 of
this Agreement;
(c) Except as otherwise disclosed on the Disclosure
Schedule, all consents by governmental or regulatory agencies or
otherwise that are required for the consummation of the transactions
contemplated hereby or that are required for NCCI to own the Shares or
the Partnership Interests or to prevent a breach of or a default under
or a termination of any agreement material to any Company or the
Partnership to which any Company or the Partnership is a party or to
which any material portion of the assets of any Company or the
Partnership is subject, will have been obtained;
(d) No action or proceeding before any court or
governmental body will be pending or threatened wherein a judgment,
decree or order would prevent any of the transactions contemplated
hereby or cause such transactions to be declared unlawful or rescinded
or which might adversely affect the right of NCCI to own the Shares or
the Partnership Interests;
(e) On the Closing Date, the Selling Shareholders shall
have entered into a Shareholders Agreement with Acquisition Sub
substantially in the form of Exhibit D attached hereto dated as of the
Closing Date (the "Shareholders Agreement");
(f) On the Closing Date, Xxxxxx Xxxxxxxxxxx, Xxxxx X.
Xxxxxx and Xxxxxx X. Xxxxxx shall have entered into Employment
Agreements with NCCI substantially in the form of Exhibit E attached
hereto dated as of the Closing Date (the "Employment Agreements");
(g) On the Closing Date, A&J shall have entered into a
Partners Agreement with Acquisition Sub substantially in the form of
Exhibit F attached hereto dated as of the Closing Date (the "Partners
Agreement");
(h) NCCI shall have received from Xxxxx Xxxxxxx & Xxxxx,
counsel to the Sellers, an opinion addressed to NCCI, dated the
Closing Date and substantially in the form of Exhibit G attached
hereto;
(i) Messrs. Xxxxxxxxxxx, Xxxxxx and Geddes shall have
terminated any existing employment agreements with any of the
Companies or the Partnership;
(j) At the Closing Date, the Sellers shall have delivered
to NCCI and Acquisition Sub the following:
PURCHASE AGREEMENT - PAGE 31
31
(i) a certificate executed by each Selling
Shareholder stating that the conditions set forth in Sections
6.2(a) through 6.2(d) of this Agreement have been satisfied;
(ii) good standing or comparable certificates for
each Company and the Partnership from the jurisdiction of its
incorporation or formation and from every jurisdiction where a
failure to be qualified or licensed would have a material
adverse effect on the consolidated financial condition,
results of operations or business of each Company and the
Partnership, dated not earlier than 10 days prior to the
Closing Date;
(iii) copies of all third party and governmental
consents (or other evidence satisfactory to NCCI) that the
Sellers are required to obtain in order to effect the
transactions contemplated by this Agreement;
(iv) a copy of each Company's charter certified by
the Secretary of State of the state of its incorporation;
(v) an assignment of the Partnership Interests
substantially in the form of Exhibit A executed by A&J;
(vi) an assignment of all of A&J's rights and
interests in booking, management and related fees under the
Partnership Agreement and under the Promotion Agreement
substantially in the form of Exhibit B executed by A&J;
(vii) certificates evidencing the Shares duly
endorsed for transfer;
(viii) affidavits of the trustees of the Geddes
Family Trust and the Xxxxxxxxxxx Family Trust; and
(ix) such other documents as NCCI or Acquisition
Sub may reasonably request in connection with the transactions
contemplated hereby; and
(k) All proceedings to be taken by the Sellers in
connection with the consummation of the Acquisition at the Closing
Date and the other transactions contemplated hereby and all documents
required to be delivered by the Sellers in connection with the
Acquisition and the other transactions contemplated hereby will be
reasonably satisfactory in form and substance to NCCI and Acquisition
Sub.
6.3 Additional Conditions to the Sellers' Obligations. The
obligations of the Sellers to effect the Acquisition are subject to the
satisfaction of the following conditions on or before the Closing Date;
(a) Except for breaches which do not constitute a
Material Adverse Breach (as defined in Section 9.8 of this Agreement)
by NCCI, the representations and warranties set forth in Article 2 of
this Agreement will be true and correct as of the date hereof and at
and as of the Closing Date, as though then made and as though the
Closing Date were
PURCHASE AGREEMENT - PAGE 32
32
substituted for the date of this Agreement throughout such
representations and warranties and with appropriate modifications of
tense with respect to representations and warranties made as of a
specified date;
(b) NCCI and Acquisition Sub shall have performed, in all
material respects, each obligation and agreement and complied, in all
material respects, with each covenant required to be performed and
complied with by them under this Agreement prior to the Closing Date;
(c) No action or proceeding before any court or
government body will be pending or threatened wherein a judgment,
decree or order would prevent any of the transactions contemplated
hereby or cause such transactions to be declared unlawful or
rescinded;
(d) On the Closing Date, NCCI and Acquisition Sub will
have delivered to the Sellers the following:
(i) a certificate executed on behalf of each of
NCCI and Acquisition Sub by their Presidents stating that the
conditions set forth in Sections 6.3(a) through (c) of this
Agreement have been satisfied;
(ii) certified copies of the resolutions duly
adopted by NCCI's and Acquisition Sub's respective boards of
directors approving the Acquisition and authorizing the
execution, delivery and performance of this Agreement;
(iii) good standing certificates for Acquisition
Sub and for NCCI from the Secretaries of State of the State of
Delaware and Tennessee, respectively, each dated not earlier
than five (5) days prior to the Closing Date;
(iv) copies of all third party and governmental or
regulatory consents (or other evidence satisfactory to the
Sellers) that NCCI and Acquisition Sub are required to obtain
in order to effect the transactions contemplated by this
Agreement;
(v) copies of Acquisition Sub's and NCCI's
charter certified by the Secretaries of State of the State of
Delaware and Tennessee, respectively; and
(vi) such other documents as the Sellers may
reasonably request in connection with the transactions
contemplated hereby;
(e) All proceedings to be taken by NCCI and Acquisition
Sub in connection with the consummation of the Acquisition and all
documents required to be delivered by NCCI and Acquisition Sub in
connection with the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Sellers;
PURCHASE AGREEMENT - PAGE 33
33
(f) Except as otherwise disclosed to the Sellers, all
consents by governmental or regulatory agencies or otherwise that are
required to be obtained by NCCI for the consummation of the
transactions contemplated hereby will have been obtained; and
(g) The Shareholders Agreement, Partners Agreement,
Employment Agreements and Registration Rights Agreement will have been
executed and delivered on the Closing Date and there will not have
been any changes, amendments or modifications to, or terminations of,
such agreements.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date upon the occurrence of any of the following:
(a) by mutual consent of the Sellers and the Board of
Directors of NCCI;
(b) by either NCCI or the Sellers if the Closing shall
not have been consummated by August 31, 1997 and provided that the
party seeking termination is not then in material breach of any
representation, warranty or agreement in this Agreement;
(c) by NCCI if there has been a misrepresentation or
breach of a representation or warranty or a failure to perform a
covenant on the part of the Sellers with respect to their
representations, warranties and covenants set forth in this Agreement
and any such breach or failure constitutes a Material Adverse Breach;
and
(d) by the Sellers if there has been a misrepresentation
or a breach of a representation or warranty or a failure to perform a
covenant on the part of NCCI or Acquisition Sub with respect to their
representations, warranties and covenants set forth in this Agreement
and any such breach or failure constitutes a Material Adverse Breach.
7.2 Amendment. This Agreement may not be amended except by an
instrument signed by each of the parties hereto.
7.3 Waiver. At any time prior to the Closing Date, (a) NCCI may
(i) extend the time for the performance of any of the obligations or other acts
of the Sellers or (ii) waive compliance with any of the agreements of the
Sellers or with any conditions to its own obligations, and (b) the Sellers may
(i) extend the time for the performance of any of the obligations or other acts
of NCCI and/or Acquisition Sub or (ii) waive compliance with any of the
agreements of NCCI and/or Acquisition Sub or with any conditions to their own
obligations in each case only to the extent such obligations, agreements and
conditions are intended for their benefit.
7.4 Effect of Termination. If this Agreement is terminated as
provided in Section 7.1, this Agreement shall become void and there shall be no
liability or further obligation on the part of any party hereto or any of their
respective shareholders, officers or directors, except (a) that nothing herein
and no termination pursuant hereto will relieve any party from liability for
any
PURCHASE AGREEMENT - PAGE 34
34
breach of this Agreement and (b) the provisions of Section 5.6 and any
confidentiality agreements by and between NCCI and the Sellers will survive
such termination.
ARTICLE 8
INDEMNIFICATION
8.1 By NCCI, Acquisition Sub and the Sellers. NCCI and Acquisition
Sub on the one hand and the Sellers on the other hand each hereby agree to
indemnify and hold harmless the other against all claims, damages, losses,
liabilities, costs and expenses (including, without limitation, settlement
costs and any legal, accounting or other expenses for defending any actions or
threatened actions) (collectively "Damages") reasonably incurred by NCCI,
Acquisition Sub and the Sellers in connection with each and all of the matters
set forth below to the extent they constitute a Material Adverse Breach.
(a) Any breach by the Indemnifying Party (as defined
below) of any representation or warranty made by such Indemnifying
Party in this Agreement;
(b) Any breach of any covenant, agreement or obligation
of the Indemnifying Party contained in this Agreement or any other
agreement, instrument or document contemplated by this Agreement; and
(c) Any misrepresentation contained in any statement,
certificate or schedule furnished by the Indemnifying Party pursuant
to this Agreement or in connection with the transactions contemplated
by this Agreement.
Each Seller severally, in proportion to its respective interest in the
Purchase Price, agrees to indemnify NCCI for any breaches of any representation
or warranty, covenant, agreement or obligation of such Seller made or
contained, respectively, in this Agreement or any other agreement, instrument
or document contemplated by this Agreement, or any misrepresentation by such
Seller, as described in (a) through (c) above to the extent they constitute a
Material Adverse Breach. The parties acknowledge that the Acquisition
represents the acquisition of fifty-one percent (51%) of the outstanding equity
interests in the Companies and the Partnership. Upon the realization of a loss
or claim to which this section applies, the parties shall consider the nature
and character of the los or claim to determine whether the indemnification
payable herein shall equitably equal fifty-one percent (51%) or one hundred
percent (100%) of such loss or claim.
8.2 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder, the party seeking indemnification (the "Indemnified
Party") shall promptly notify the party from whom indemnification is sought
(the "Indemnifying Party") of the claim and, when known, the facts constituting
the basis for such claim. In the event of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal proceedings
by a third party, the notice to the Indemnifying Party shall specify, if known,
the amount or an estimate of the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim by a third party for
which it is entitled to indemnification hereunder without the prior written
consent of the Indemnifying Party, which shall not be unreasonably
PURCHASE AGREEMENT - PAGE 35
35
withheld, unless suit shall have been instituted against it and the
Indemnifying Party shall not have taken control of such suit after notification
thereof as provided in Section 8.3 of this Agreement in which case the
Indemnified Party may settle or compromise such claim without the prior consent
of the Indemnifying Party. If the Indemnified Party fails to give prompt notice
of any claim and such failure prejudices the Indemnifying Party's position or
its ability to defend the claim, the Indemnifying Party's liability to the
Indemnified Party shall be reduced by the amount, if any, demonstrated to be
directly attributable to the failure to give such notice in a timely manner.
8.3 Defense by Indemnifying Party. In connection with any claim
giving rise to indemnity hereunder resulting from or arising out of any claim
or legal proceeding by a person who is not a party to this Agreement, the
Indemnifying Party at its sole cost and expense may, upon written notice to the
Indemnified Party, assume the defense of any such claim or legal proceeding if
it acknowledges to the Indemnified Party in writing its obligations to
indemnify the Indemnified Party with respect to all elements of such claim. The
Indemnified Party shall be entitled to participate in (but not control) the
defense of any such action, with its counsel and at its own expense. If the
Indemnifying Party does not assume the defense of any such claim or litigation
resulting therefrom within thirty (30) days after the date such claim is made,
(a) the Indemnified Party may defend against such claim or litigation, in such
manner as it may deem appropriate, including, but not limited to, settling such
claim or litigation, after giving notice of the same to the Indemnifying Party,
on such terms as the Indemnified Party may deem appropriate, and (b) the
Indemnifying Party shall be entitled to participate in (but not control) the
defense of such action, with its counsel and at its own expense. If the
Indemnifying Party thereafter seeks to question the manner in which the
Indemnified Party defended such third party claim or the amount or nature of
any such settlement, the Indemnifying Party shall have the burden to prove by a
preponderance of the evidence that the Indemnified Party did not defend or
settle such third party claim in a reasonably prudent manner.
8.4 Payment of Indemnification Obligation. All indemnification by
NCCI or a Seller hereunder shall be effected by payment by wire transfer or
delivery of a cashier's or certified check in the amount of the indemnification
liability. In no event shall any Seller be required to pay to NCCI in
accordance with this Article 8 an aggregate amount greater than the amount of
the cash received by such Seller hereunder from NCCI on the Closing Date.
ARTICLE 9
GENERAL PROVISIONS
9.1 Survival of Representations and Warranties. The
representations and warranties set forth in this Agreement shall survive the
Closing for a period of one (1) year. Notwithstanding the above, claims
resulting from any breach of any representation or warranty concerning tax or
Employee Benefit Plan matters shall expire one hundred twenty (120) days after
the expiration of any applicable statute of limitations. Any litigation arising
out of or attributable to a breach of any representation or warranty contained
herein must be commenced within the applicable period described above. If not
commenced within the applicable period, any such claim will thereafter
conclusively be deemed to be waived regardless of when such claim is or should
have been discovered.
PURCHASE AGREEMENT - PAGE 36
36
9.2 Effect of Due Diligence. No investigation by NCCI or the
Sellers into the business, operations and condition of the other shall diminish
in any way the effect of any representations or warranties made by either party
in this Agreement or shall relieve such party of any of its obligations under
this Agreement.
9.3 Specific Performance. NCCI and the Sellers understand and
agree that the covenants and undertakings on each of their parts herein
contained are uniquely related to the desire of NCCI and the Sellers to
consummate the Acquisition, that the Acquisition is a unique business
opportunity for NCCI, Acquisition Sub and the Sellers and that, although
monetary damages may be available for the breach of such covenants and
undertakings, monetary damages would be an inadequate remedy therefor.
Accordingly, NCCI, Acquisition Sub and the Sellers agree that NCCI and
Acquisition Sub shall be entitled to obtain specific performance by the Sellers
of every such covenant and undertaking contained herein to be performed by the
Sellers and that the Sellers shall be entitled to obtain specific performance
from NCCI and Acquisition Sub of each and every covenant and undertaking herein
contained to be observed or performed by NCCI or Acquisition Sub.
9.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally, sent by telex, telecopy, facsimile or overnight courier, or mailed
by registered or certified mail (postage prepaid and return receipt requested),
to the party to whom the same is so delivered, sent or mailed at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to NCCI or Acquisition Sub:
Nashville Country Club, Inc.
000 Xxxxxxxx Xxxxxxxxxx Xxx
Xxxxxxx Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx III
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to the Sellers:
c/o Xxxxxx Xxxxxxxxxxx
New Avalon, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
PURCHASE AGREEMENT - PAGE 37
37
with a copy to:
Xxxxx Xxxxxxx & Xxxxx
500 X. Xxxxxxxxx
00xx Xxxxx, Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: H. Xxxxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Notices delivered personally or by telex, telecopy or facsimile shall be deemed
delivered as of actual receipt, mailed notices shall be deemed delivered three
days after mailing and overnight courier notices shall be deemed delivered one
day after the date of sending.
9.5 Interpretation. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
9.6 Severability. If any term, provision, covenant or Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants, and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated and the parties shall negotiate in good faith
to modify the Agreement to preserve each party's anticipated benefits under the
Agreement.
9.7 Miscellaneous. This Agreement (together with all other
documents and instruments referred to herein): (a) except for any
confidentiality agreements executed in connection with the transactions
contemplated hereby, constitutes the entire agreement and supersedes all other
prior agreements and undertakings, both written and oral, among the parties
with respect to the subject matter hereof; (b) except as expressly set forth
herein, is not intended to confer upon any other person any rights or remedies
hereunder; (c) shall not be assigned by operation of law or otherwise, except
that NCCI and Acquisition Sub may assign all or any portion of their rights
under this Agreement to any wholly owned subsidiary but no such assignment
shall relieve NCCI and Acquisition Sub of their obligations hereunder, and
except that this Agreement may be assigned by operation of law to any
corporation with or into which NCCI may be merged; and (d) shall be governed in
all respects, including validity, interpretation and effect, by the internal
laws of the State of Tennessee, without giving effect to the principles of
conflict of laws thereof. Courts within the State of Tennessee will have
jurisdiction over any and all disputes between the parties hereto, whether in
law or equity, arising out of or relating to this Agreement. The parties
consent to and agree to submit to the jurisdiction of such courts. This
Agreement may be executed in two or more counterparts which together shall
constitute a single agreement.
9.8 Material Adverse Breach. Breaches of representations,
warranties and covenants by either party hereto which (a) individually results
in damages to the other party in excess of $100,000 or (b) in the aggregate
result in damages to the other party in excess of $200,000, shall constitute,
for purposes of this Agreement, a "Material Adverse Breach."
PURCHASE AGREEMENT - PAGE 38
38
9.9 Limitation of Liability. Neither NCCI, Acquisition Sub nor the
Sellers shall have any liability for breach of the representations, warranties
and covenants made by them and contained in this Agreement unless such breach
is a Material Adverse Breach.
9.10 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature to each such counterpart
were upon the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
PURCHASE AGREEMENT - PAGE 39
39
PURCHASE AGREEMENT
Signature Page
IN WITNESS WHEREOF, NCCI, Acquisition Sub, the Shareholders and A&J
have caused this Agreement to be executed on the date first written above by
their respective officers duly authorized.
NASHVILLE COUNTRY CLUB, INC.
/s/ Xxxxxx Xxxxxxx Xxxxxx III
-----------------------------------
By: Xxxxxx Xxxxxxx Xxxxxx III
Its: Chief Executive Officer
AWC ACQUISITION CORP.
/s/ Xxxxxx Xxxxxxx Xxxxxx III
-----------------------------------
By: Xxxxxx Xxxxxxx Xxxxxx III
Its: Chief Executive Officer
XXXXXX & XXXX, INC.
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxx
Its: President
XXXXXX X. XXXXXX FAMILY TRUST
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxx, Trustee
XXXXXXXXXXX FAMILY TRUST
/s/ Xxxxxx Xxxxxxxxxxx
-----------------------------------
By: Xxxxxx Xxxxxxxxxxx, Co-Trustee
/s/ Xxxxx X. Xxxxxx
-----------------------------------
XXXXX X. XXXXXX
PURCHASE AGREEMENT - PAGE 40
