EXHIBIT 10.54
REAL PROPERTY PURCHASE AGREEMENT
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This Agreement is made and entered into as of October , 1993, by and between
Champs de Brionne Winery Associates, a Washington Limited Partnership
("Champs"), Summer Music Theater, Inc., a Washington Corporation ("SMT"),
Xxxxxxx X. Xxxxx, Xx. and Xxxxx X. Xxxxx (the "Xxxxxx") (Champs, SMT and the
Bryans are hereinafter collectively referred to as the "Sellers"), and MCA
Concerts, Inc. ("Buyer").
RECITALS
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A. Sellers are the owner of approximately 110-135 acres including,
surrounding, and/or adjacent to an amphitheatre located in County of Grant,
State of Washington.
X. Xxxxxxx, Summer Music Theatre, Inc. ("SMT"), Amphitheatre Services, Inc.
("ASI") and Buyer have entered into an Agreement dated April 14, 1993 (the
"Prior Agreement"), pursuant to which (i) Buyer agreed with Sellers, SMT and ASI
to lease a portion of the real property referred to in Recital A above for the
1993 Season (as such term is used in the Prior Agreement), and (ii) Buyer agreed
with Sellers to negotiate in good faith for the purchase of 100-115 acres
described on Exhibit A of the Prior Agreement and related assets in accordance
with certain specified terms.
C. Buyer desires to purchase the foregoing real property and related assets
and Sellers desire to sell such property and assets on the terms and
conditions contained in this Agreement.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, Buyer and Sellers agree as follows:
1. PURCHASE AND SALE
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1.1 Agreement to Buy and Sell. Subject to all of the terms and
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conditions of this Agreement, Sellers agree to sell and convey to Buyer and
Buyer agrees to acquire and purchase from Sellers the following (all of which
are collectively called the "Property" in this Agreement):
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1.1.1. That certain real property located in County of Grant,
State of Washington, described on "Exhibit A-1" attached hereto, plus that
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additional parcel comprising the northerly 160
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feet of that certain real property located in County of Grant, State of
Washington, described on "Exhibit A-2" attached hereto, including all minerals,
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oil, gas and other hydrocarbon substances thereon, allocated water rights on
Farm Xxxx 00 and on the remainder of the Land (subject to the Adjacent Owner
Agreements referred to in Section 4.9), air rights, all development rights
relating thereto, and any easements, rights-of-way, or other rights appurtenant
thereto or used in conjunction therewith (collectively, the "Land") except as
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disclosed in the PTR (defined below).
1.1.2. All improvements, structures and fixtures (other than
those listed on the attached Schedule of Improvements as excluded) now or at the
Closing located on the Land (collectively, the "Improvements"), subject to all
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claims (as defined below) by ASC (as defined below). Without derogating from
the generality of the foregoing, the Improvements include each of the
improvements, structures and fixtures specifically designated on the Schedule of
Improvements (and such others, if any, as are not listed on said Schedule as
being excluded) but exclude those specific improvements, structures and fixtures
as are designated on the aforementioned Schedule as being excluded.
1.1.3. All tangible personal property of Sellers listed on the
attached Schedule of Personal Property (collectively, the "Personal Property").
1.1.4. All intangible property (the "Intangible Property") now
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or at the Closing owned or held by any Seller or Related Party in connection
with the Land or the Personal Property, all other leases, contracts, contract
rights, building and trade names, transferable business licenses, permits,
applications, authorizations and other entitlements, transferable warranties
covering the Property or the construction or fabrication thereof and all
transferable utility contracts and telephone exchange numbers. There is excluded
from Intangible Property those items listed on the attached Schedule of Excluded
Intangible Property. A "Related Party" is (a) any partner or employee of any
Seller or of any partner of any Seller, (b) any corporation, partnership, trust
or other entity in which any Seller or any individual or entity named in clause
(a) above owns, directly or indirectly, an ownership interest and (c) any
parent, brother, sister or descendant of any Seller.
1.2. Purchase Price. The purchase price ("Purchase Price") of the
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Property shall be the sum of Four Million Six Hundred Forty-Two Thousand Dollars
($4,642,000).
1.3. Payment of Purchase Price. The Purchase Price shall be payable as
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follows:
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1.3.1. Concurrently with the execution of this Agreement by
Seller, Buyer shall pay to Seller the sum of Fifty Thousand Dollars ($50,000.00)
which payment shall apply to the Purchase Price in the event Closing occurs on
or before October 31, 1993 and which payment constitutes prepayment to Sellers
of the agreed amount of liquidated damages in the event this transaction does
not close on or before October 31, 1993 due to Buyer's default, and Buyer shall
also deposit into Escrow (as defined below) the sum of One Hundred Fifty
Thousand Dollars ($150,000) (the "Second Deposit"). Escrow Holder
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(as defined below) shall deposit the Second Deposit into an interest-bearing
account, pending disbursement of the Second Deposit in accordance with the
terms of this Agreement. The parties acknowledge that Buyer already has
delivered to Sellers the sum of Two Hundred Twenty Thousand Dollars ($220,000)
(the "Prior Payment"), and that Eighty Three Thousand Six Hundred Ninety Six
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and 72/100 Dollars ($83,696.72) of such amount (the "First Deposit") was
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deposited by Buyer into Escrow pursuant to Section 2 of the Prior Agreement.
The Prior Payment and the Second Deposit, and all interest earned on the Second
Deposit in the escrow account, shall be credited to the Purchase Price at
Closing (i. e. to Buyer's account). Additionally, the First Deposit and all
interest earned on the First Deposit, to the extent any portion thereof remains
after the payment of those obligations specified in the escrow instructions
delivered pursuant to the Prior Agreement, as well as the Second Deposit, shall
be delivered to Sellers together with the balance of the Purchase Price at
Closing.
In the event that Escrow fails to close for any reason Sellers shall retain the
Prior Payment and any interest accrued on the First Deposit and such sum shall
be the consideration for the execution by Sellers, SMT and AS1 of the Prior
Agreement and Sellers' leasing of the Lease Property (as defined in the Prior
Agreement) to Buyer for the 1993 Season.
The parties acknowledge and agree that the $50,000.00 payment concurrently made
to Sellers by Buyer constitutes the liquidated damages payable to Seller and
that the entire Second Deposit and any interest thereon shall be immediately
disbursed to Buyer by Escrow, in the event that Escrow fails to close for any
reason.
Notwithstanding anything to the contrary, each party shall bear half the
Escrow Holder's charges, and each party shall also bear such additional costs
and charges as are customarily borne by a purchaser or seller (as the case may
be) in unclosed transactions in accordance with common escrow practices in the
State of Washington.
1.3.2. At the Closing, Buyer shall deposit in immediately
available funds the additional sum of One Million Six Hundred Forty-Seven
Thousand Dollars ($1,647,000) into Escrow, less
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or plus the anticipated net debit or credit to Buyer by reason of the interest
earned in escrow, pro rations, and allocation of closing costs set forth below.
1.3.3. At Closing, the remaining Two Million Five Hundred
Seventy Five Thousand Dollars ($2,575,000) of the Purchase Price will be
evidenced and paid in accordance with the terms of a fully executed and
secured promissory note (the "Purchase Money Note") in the form of "Exhibit B"
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attached hereto. The Purchase Money Note shall be non-recourse and shall be
secured by one or more fully executed deeds of trust covering the Property in
the form of "Exhibit C" attached hereto. The Purchase Price Note and the deeds
of trust shall provide that if Buyer or any successor loses title to the
Property by reason of the foreclosure of the deeds of trust or the completion of
a trustee's sale pursuant to the power of sale under the deeds of trust, the
restrictive covenants referred to in Section 1.4 shall thereafter cease to have
any force or effect.
1.3.4. Allocation of Purchase Price. The Purchase Price shall
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be allocated for all purposes by the parties as follows:
Bryans Property:
Land and Improvements ---------$2,503,430.00
Personal Property ------------------5,000.00
Goodwill -------------------------600,000.00
Imputed Interest (at 5.84%
assuming a closing during
October, 1993)------------------939,570.00
SMT Property:
Land and Improvements ------------121,050.00
Goodwill --------------------------28,950.00
Champs Property
Land and Improvements-------------359,105.00
Goodwill --------------------------85,895.00
Total-----------------------------------------$4,642,00
Buyer and Sellers shall report the sale and purchase of the
Property for all federal, state, local and foreign tax purposes in a manner
consistent with the allocation set forth in this Section 1.3.4.
1.4. Restrictive Covenants.
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1.4.1. Attached as "Exhibit D" is a restrictive covenant to be
executed by Sellers and Related Parties and Buyer and delivered to Escrow Holder
for recording on the Closing.
1.4.2. After Closing Sellers shall be entitled to 8
complimentary seats in locations designated from time to time by Buyer. Said
reserved seats shall be located in the center of the
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center section - Sellers request row 10 (if there are no reserved seats to be
issued for a particular concert, the Sellers' shall be entitled, to 8 general
admission tickets) for each event at the amphitheatre. Sellers' rights under
this Section 1.4.2 shall expire when the Purchase Price referred to in Section
1.3.3 has been paid in full. Sellers' tickets will be available to be picked up
at Buyer's primary ticket outlet within the greater Seattle area within the
first 5 days following the public announcement of the availability of tickets.
2. OPENING OF ESCROW
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2.1. Escrow; Escrow Holder. In connection with the execution of this
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Agreement, an escrow account (the "Escrow") will be opened by Sellers and Buyer
with Chicago Title in Seattle Washington, Attention: Xxxxx Xxxxxx ("Escrow
Holder").
2.2. Escrow Instructions. The terms and conditions set forth in this
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Agreement shall constitute both an agreement between Buyer and Sellers and
escrow instructions for the Escrow Holder. Buyer and Sellers shall promptly
execute and deliver to Escrow Holder any additional escrow instructions
requested by Escrow Holder which are consistent with the terms of
this Agreement and the previously delivered Escrow Instructions. This Agreement
shall not modify or amend the provisions of the previously delivered Escrow
Instructions to Xxxxxxx E. P. S., Escrow Department, nor shall any
additional instructions modify or amend the provisions of this Agreement or the
previously delivered (to Xx. Xxxxx) Escrow Instructions, unless otherwise
expressly set forth by mutual consent of Buyer and Sellers.
A separate escrow to effectuate this Agreement (without terminating the
escrow relating to the First Deposit) will be established at the Seattle office
of Chicago Title, with the Escrow Holder to collect and disburse the cash
portion of the purchase price pursuant to instructions approved by Buyer and
Sellers each acting reasonably. As used in this Agreement, "Escrow Date" means
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the date of delivery of a fully executed (by all parties) copy, or counterparts,
of this Agreement to Escrow Holder (and if counterparts are received on
different dates, Escrow Date shall not occur until the counterpart bearing the
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last signature has been delivered to Escrow Holder) and acceptance of this
Agreement by Escrow Holder, but in any case no later than October 13, 1993. As
used in this Agreement, "Closing" means the recordation of the "Statutory
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Warranty Deed" (as defined below) (which deed is sometimes referred to in this
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Agreement as "Warranty Deed") in the official records of County of Grant,
Washington.
2.3. Investment of Deposits. Any sums deposited into Escrow by Buyer
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prior to Closing, and any interest thereon, shall
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be placed in an interest-bearing account or invested in interest-bearing
securities by Escrow Holder.
2.4. Closing Date. The Closing shall be held on a date set
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by Buyer, which shall be within 30 days after all conditions to the Close of
Escrow have been satisfied, but in no event later than October 31, 1993, subject
to Buyer's right to extend such date to a date not later than December 20,
1993. Buyer shall provide Sellers with at least 5 days prior written notice of
the Closing Date (the "Closing Date"). Notwithstanding the foregoing, Sellers
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may postpone the Closing Date for any number of days up to 15 days following the
date designated by Buyer by giving Buyer notice of such postponed date within 5
days after Buyer gave Sellers the notice of the Closing Date designated by
Buyer, and if Sellers do postpone the Closing Date, the time limitations
specified in the prior sentence shall be extended accordingly, provided, however
Sellers may not extend the Closing Date [illegible] Buyers agreement with ASC is
similarly extended.
Buyer may extend the Closing Date from October 3l, 1993 to a date not
later than November 20, 1993 by giving written notice to Seller and to Escrow
Holder on or before October 31, 1993: provided, however, upon Buyer giving such
notice the sum of Fifty Thousand Dollars ($50,000.00) paid to Seller shall no
longer be applicable to the Purchase Price and shall remain as a payment of
liquidated damages in the event the transaction does not thereafter close by
reason of Buyer's default.
Buyer may further extend the Closing Date to a date not later than
December 20, 1993 by giving written notice to Seller and by concurrently paying
Seller the sum of Fifty Thousand Dollars ($50,000.000) which sum shall not be
applicable to the Purchase Price and shall remain as a payment of additional
liquidated damages in the event the transaction does not thereafter close by
reason of Buyer's default.
3. ACTIONS PENDING CLOSING
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3.1. Delivers by Sellers. Sellers shall as soon after the Escrow Date as is
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reasonably possible but in any event, not later than the Date which is 20 days
after the date of Buyer's and Sellers' execution of this Agreement, deliver to
Buyer the following:
3.1.1. A preliminary title report issued by SECURITY TITLE GUARANTY, INC.
("Title Company") showing the condition of title to the Property, accompanied by
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copies of all documents referred to therein (collectively, the "PTR").
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3.1.2. Copies of the most recent property tax bills for the Property.
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3.1.3. A schedule (the "Schedule of Existing Contracts")listing and
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describing all existing leases, management, leasing and sale brokerage,
concession, service, supply and maintenance agreements and equipment leases
(collectively, the "Existing Contracts") with respect to or affecting the
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Property, together with true, correct and complete copies of all of the Existing
Contracts.
3.1.4. A schedule (the "Schedule of Easements") listing and
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describing all privileges, easements, rights of way, access, ingress and egress,
and any other rights appurtenant to the Property or used by Sellers or its
lessess in conjunction with the business currently being operated on the Land
(collectively, the "Easements"), together with true, correct and complete copies
of all documentation evidencing the foregoing, if any.
3.2. Title
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3.2.1. Buyer's Review of Title. Buyer, has caused a survey performed
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by Xxxxxxxxxx, Xxxxxx Associates, Inc. as Job No. 93064 dated September 27, 1993
(the "Survey") of the Land to be prepared and delivered to Title Company and
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Sellers. The parties have approved the Survey, subject to revision to add the
parcel consisting northerly 160 feet of the property described on "Exhibit A-2".
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The Survey shall meet the Title Company's requirements for the issuance of the
"Owner's Policy" (as defined in Section 4.2). As soon as the Survey has been
delivered to the Title Company, at Buyer's request Sellers shall cause the Title
Company to issue a supplement (the "Supplement")to the PTR, showing such
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additional matters which the Title Company would take exception to if it were
issuing the Owner's Policy to Buyer on the date the Supplement is issued
together with copies of all documents (not previously furnished) referred to in
the Supplement. With respect to any exceptions to title or other matters shown
on the PTR, Survey or Supplement, Buyer may, on or before the date which is 7
days from the date Buyer received the Supplement and copies of the documents
described in the prior sentence disapprove by notice to Sellers any such
exceptions ("Disapproved Exceptions"). Buyer's failure to provide such notice
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on or before such date shall constitute approval of the condition of title as
shown oh the PTR, Survey and Supplement. Within 7 days following Seller's
receipt of Buyer's notice of such disapproval, Sellers shall notify Buyer in
writing that: Sellers have removed such Disapproved Exceptions from title;
Sellers are covenanting to do so as of or before Closing; or Sellers will not
remove specified Disapproved Exceptions. If a Disapproved Exception is of the
type described in the last sentence of this Section 3.2.1, or if Sellers
otherwise covenant to remove any Disapproved Exceptions, such removal shall be
coordinated by Escrow Holder as a condition (waivable by Buyer) of Closing and
Buyer's obligations hereunder, and failure to effect such removal shall be a
breach by Sellers of this Agreement, unless
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arising out of the negligence of Escrow Holder. Notwithstanding the foregoing,
if Escrow Holder needs additional time to remove a Disapproved Exception, no
breach by Sellers shall result (but the agreed Closing Date shall be postponed
for the length of time required by Escrow Holder after the agreed Closing Date
plus 7 additional days).
The 2nd day after delivery to Buyer of Seller's aforementioned notice as to
whether Sellers have removed, or will or will not remove, a Disapproved
Exception is called the "Title Decision Date" in this Agreement. If Sellers do
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not remove or covenant to remove any such Disapproved Exception, Buyer shall
have the option to terminate this Agreement on or before the Title Decision Date
or to waive its objection to the Disapproved Exception in question, and proceed
to closing of the Escrow, in which case Sellers shall have no obligation to
remove the Disapproved from title.
If Buyer elects to terminate this Agreement, the provisions of Section 3.4 shall
apply. The exceptions to title shown by the PTR, Survey and Supplement (except
the Disapproved Exceptions Sellers remove or covenant to remove), the Adjacent
Owner Agreements referred to in Section 4.9, the Easements referred to in
Section 3.1.4, the Existing Contracts referred to in Section 3.1.3, and any ASC
claims are called the "Permitted Exceptions" in this Agreement. For purposes of
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this Agreement, "ASC" shall mean Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxx, Xxxxxx
Xxxxx, Xxxxx-Xxxxxxx Enterprises, Inc., Media One, Inc., Facility Sales
Management, Inc. and Arena Services Corporation, individually and collectively.
Notwithstanding the foregoing, Sellers in coordination with Escrow Holder shall
in any event be required to discharge and remove any and all liens affecting the
Property which secure an obligation to pay money (other than installments of
real estate taxes not delinquent as of the Closing) and at Closing cause the
removal of any exceptions which can be eliminated by payment and, even though
Buyer does not disapprove those liens and exceptions, they will not be Permitted
Exceptions.
3.2.2. Conditions of Title at Closing. Upon the Closing, Sellers shall
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convey to Buyer good and marketable fee simple title to the Land and
Improvements and by a duly executed and acknowledged statutory warranty deed of
the Land in form and content acceptable to Buyer and Sellers acting reasonably
(the "Statutory Warranty Deed"), subject only to the Permitted Exceptions. Upon
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the Closing, Sellers shall convey to Buyer good and marketable title to the
Personal Property and the Intangible Property by a duly executed xxxx of sale
and assignment of the Personal Property and the Intangible Property in form and
content acceptable to Buyer and Sellers acting reasonably (the "Xxxx of Sale"),
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free and clear of any and all liens, encumbrances, security interests, pledges,
hypothecations or other rights or claims to or
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by any third party, except (i) any and all of those claims by ASC and (ii) any
claims by XxXxxxxxx & Xxxxxxx arising out of any Buyer's acts or omissions
during the 1993 Season (but not including any claims by XxXxxxxxx & Xxxxxxx
relating to prior periods or relating to any period after the Closing, including
without limitation any claim arising out of the cancellation of the XxXxxxxxx &
Xxxxxxx Concession Service Contract dated July 11, 1990). If title to the
Property would not, but for this sentence, be in the condition called for by
this Agreement on the Closing Date, then Escrow Agent shall use the funds
otherwise payable by Buyer hereunder to cause title on the closing Date to be in
such condition.
3.3. Sellers represents that there are no agreements or contracts which
Buyer would not be free, without liability, to terminate upon acquiring title
to the Property, except for the Concession Service Contract dated July 11, 1990,
which will be terminated on or before the Closing Date at no cost to Buyer
except as provided for in this paragraph, and the updated Service Agreement with
Waste Management of Ellensburg which has a three (3) year term beginning June 8,
1992. At Closing, Buyer agrees to deposit with Escrow Holder the sum of Fifty
Thousand Dollars ($50,000.00)to be disbursed by Escrow Holder as a portion of
the consideration Seller has agreed to pay in order to terminate the said
Concession Service Contract. Escrow Holder is directed to send to XxXxxxxxx &
Xxxxxxx Concession Services, Inc. the said $50,000 along with the additional
consideration provided for in a Termination Agreement to be provided to Escrow
Holder by Sellers.
3.4. Termination By Buyer. If Buyer elects to terminate this Agreement in
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accordance with Article 3, then, on or before the Title Decision Date, Buyer
shall give Sellers and Escrow Holder written notice that Buyer elects to
terminate this Agreement. Said notice shall list Buyer's reason(s) for
termination. Buyer's failure to provide such notice by the specified deadline
shall constitute Buyer's waiver of Buyer's right to terminate this Agreement for
the reasons for which that deadline applies. Upon such termination of this
Agreement, Buyer shall return to Sellers all items provided by Sellers (and all
copies, duplications or other record thereof) referred to in this Agreement and
Escrow Holder will promptly proceed pursuant to Section 1.3.1 upon receipt of
the Buyer's notice of termination.
3.5. Operation of the Property. Until the Closing, Sellers shall operate
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and manage the Property in substantially the same manner as on the date of this
Agreement and shall maintain the Property in good condition and repair, subject
to the provisions of Section 3 of the Prior Agreement relating to the leasing of
the Property to Buyer. Notwithstanding the foregoing, Sellers shall not be
responsible for any failure of Buyer to comply with Buyer's obligation under the
Prior Agreement. Until the closing, unless
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Buyer's prior written consent is first obtained, Sellers shall not (i)enter into
any other lease, concession agreement or license agreement affecting the
Property or any portion thereof or any renewals or amendments to any of the same
nor any other contract or agreement with respect to the Property which is not
cancelable without advance notice without cost or expense to Buyer, or (ii)
offer to sell the Property, advertise or market the Property or solicit offers
to purchase the Property. Nothing contained above in this Section 3.5 derogates
from Buyer's rights under the Prior Agreement.
4. CONDITIONS TO CLOSING
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In addition to the conditions provided elsewhere in this Agreement, the
Closing and Buyer's or Sellers', as the case may be, obligation to perform
hereunder are conditioned upon the fulfillment of each and all of the following,
any of which conditions the party for whose benefit the condition was included
in this Agreement may waive in whole or in part (Sellers acknowledging that the
conditions specified in Sections 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, and 4.8 are for
the sole benefit of Buyer).
4.1. Due Performance. Due performance by Sellers and Buyers of all of their
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respective obligations hereunder and the truthfulness of each representation and
warranty contained in Section 5 or any other part of this Agreement at the time
the same is made and as of the Closing.
4.2. Owner's Policy. The commitment and ability of Title Company to issue
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the "Owner's Policy" to Buyer, dated as of the date and time of the Closing.
"Owner's Policy" means Title Company's ALTA Owner's Extended Coverage Policy of
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Title Insurance, without general exceptions (except with respect to water rights
and except that an exception relating to U.S. patents shall be included as a
special exception subject to Buyer's right to request an endorsement protecting
against loss or damage), in the full amount of the Purchase Price, insuring fee
simple title to the Land and all access, ingress and egress, and utility
easements and rights of way conveyed to Buyer hereunder as vested in Buyer,
subject only to installments of real estate taxes not delinquent and the
Permitted Exceptions. Sellers have agreed to pay for the cost of the Title
Company's ALTA Owner's Standard Coverage Policy and Buyer has agreed to pay for
the difference in cost for the Extended Owner's Policy and for any additional
coverage requested by Buyer. Sellers shall be entitled at its expense to request
from Title Company a standard mortgage policy covering the Deed of Trust
securing the Purchase Money Note.
4.3. Moratoriums. That no moratorium, statute, regulation, ordinance, or
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federal, state, county or local legislation, or order, judgment, ruling or
decree of any governmental agency or of
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any court is enacted, adopted, issued, or entered which would materially and
adversely affect Buyer's use of the Property for "contemporary music" concerts
as were conducted in 1992, unless arising out of Buyer's activities pursuant to
the Prior Agreement.
4.4. Damage or Destruction. The risk of any loss, damage or destruction
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to any of the Property from fire, wind, flooding, or other natural disaster
shall be borne by Sellers at all times prior to the Closing, except to the
extent Buyer is responsible under Section 3.9 of the Prior Agreement. If damage
to or destruction of the Property or any portion of the Property shall occur
prior to Closing (and such damage or destruction is not the responsibility of
Buyer under Section 3.9 of the Prior Agreement), then at Buyer's election either
(i) all insurance proceeds payable by reason of such damage or destruction shall
be assigned to and paid to Buyer, or (ii) Sellers shall be entitled to use such
insurance proceeds and shall otherwise at Sellers' sole cost and expense cause
such damage or destruction to be repaired as soon as possible.
4.5. Condemnation. That no condemnation or eminent domain action shall
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have been commenced or to either party's knowledge (supported by a writing from
a government agency) be contemplated by a government agency to acquire the
Property or any portion thereof. If Buyer waives this condition and a Closing
occurs following any condemnation or eminent domain action has been commenced or
contemplated, Buyer shall be entitled to the entire condemnation award made with
respect to the Property, less the amount still remaining on the Purchase Price
Note, which shall immediately be paid to Sellers and credited to the earliest
payment[s] due under said note, and if the award also includes compensation for
property beyond the Property, Buyer's share shall be as allocated by the
condemning authority, and in the absence of such an allocation, as determined by
court.
4.6. Bankruptcy. That no action or proceeding shall have been commenced
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against any of the Sellers under the federal bankruptcy code or any state law
for the relief of debtors or for the enforcement of the rights of creditors.
That no attachment, execution, lien or levy shall have attached to or been
issued with respect to the Property or any portion thereof, that cannot be (or
is not) cured at Closing.
4.7. Non-Foreign Affidavit. That each of the Sellers shall have delivered
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to Escrow Holder, for delivery to Buyer, an affidavit or qualifying statement
satisfying the requirements of Section 1445 of the Internal Revenue Code of
1986, as amended, and the regulations thereunder (the "Non-Foreign Affidavit").
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4.8. Buyer's Purchase of Assets from ASC. That the purchase by Buyer of
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certain businesses and real property from ASC
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has successfully closed on or prior to November 20, 1993, or Buyer has elected
to waive this condition in which event Buyer shall be obligated to deliver the
indemnity and hold harmless agreement referred to in Section 6.4.4.
4.9. Adjacent Owner Agreements. Execution of the agreements between Buyer
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and Seller pertaining to easements and other agreements applicable to the
Property and to other property of Seller, all of which are to be executed in
recordable form in substantially the form of the agreements attached hereto as
Exhibits F-1 through F-12. Upon Closing, Escrow Holder is directed to record the
same in the Grant County Auditor's Office.
4.10. Corporate Existence. A certificate submitted by Buyer to the Title
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Company (in form required by the Title Company) verifying that Buyer has a legal
corporate existence in Washington State such that it can contract for and take
title to the Property in the name of MCA Concerts, Inc..
4.11. Buyer's Performance. Buyer shall have performed and complied with
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all material terms', covenants and conditions of this Agreement that are
required to be performed or complied with by it on or before the Closing Date
and deliver to Sellers through Escrow Holder the following:
(a) Cash in the amount of Two Million Sixty-Seven Thousand Dollars
($2,067,000) adjusted as provided in Section 3.1.1 plus the additional sum of
Fifty Thousand Dollars ($50,000.00) as provided in Section 3.3.
(b) Buyer's Purchase Money Note in the amount of Two Million Five Hundred
Seventy Five Thousand Dollars ($2,575,000), together with the Deed of Trust
securing such Purchase Money Note.
(c) A certified copy of a resolution of Buyer's board of directors
authorizing this transaction.
(d) A certificate from Buyer to the effect that all warranties and
representations of Sellers herein are true and correct as Of the Closing Date.
(e) All other instruments and documents to fulfill any obligation required
to be fulfilled by Buyer on the Closing Date.
(f) The release executed by ASC or the indemnity executed by Buyer as
specified in Section 6.4.4.
5. REPRESENTATIONS AND WARRANTIES
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5.1. Sellers' Representations and Warranties. Each of the Sellers,
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jointly and severally, represents and warrants to and agrees with Buyer as
follows:
5.1.1. Authority. Champs is a limited partnership duly formed
---------
under the laws of State of Washington, which has filed certificate of
dissolution, but not a certificate of cancellation, and is in the process of
winding up its affairs. Each of the Sellers has the power and authority to own
the Property it is selling and to consummate the transactions contemplated by
this Agreement. This Agreement and all instruments, documents and agreements to
be executed by Sellers in connection herewith are or when delivered will be duly
authorized, executed and delivered by Sellers and will be valid, binding and
enforceable obligations of Sellers. Neither this Agreement nor any instrument,
document or agreement to be executed by any Seller in connection herewith nor
anything provided in or contemplated by any of the same does constitute a breach
or default or invalidate, make inoperative or interfere with any contract,
agreement, lease, easement, right or interest affecting or relating to the
Property (but Sellers make no representation or warranty about the rights of ASC
with respect to the Property). Each individual executing this Agreement on
behalf of any Seller is duly authorized to do so.
5.1.2. Title. Upon the Closing, Buyer will acquire good,
-----
marketable and insurable title to the Land, Easements, and Improvements, and the
entire right, title and interest in the Personal Property and the Intangible
Property, all free and clear of any liens, encumbrances, security interests,
liabilities, assessments, agreements, leases, judgments, claims, rights,
easements, restrictions or other matters other than the Permitted Exceptions,
and Adjacent Owner Agreements (which contain Sellers' easements).
5.1.3. Consents. As of the Closing, Sellers will have obtained
--------
all consents and approvals required to consummate the transactions contemplated
by this Agreement.
5.1.4. Activities on the Property. Except as disclosed on
--------------------------
"Exhibit E" to Sellers' knowledge all of the contemporary music concert
activities taking place on or in the vicinity of the Land in 1992, were, with
the exception of activities on Department of Wildlife land, conducted entirely
within the confines of the Land, and to Sellers' knowledge the owner of the
Property can and may, in the future, continue to conduct the same contemporary
music concert activities as were conducted in 1992 without any burdens other
than those which were applicable and enforced in 1992. Notwithstanding the
foregoing, burdens, restrictions, impediments, financial requirements or the
like may be imposed on Buyer as a direct or indirect result of Buyer's
activities in 1993, but Sellers will, if and to the extent Sellers are aware of
the same,
13
promptly notify Buyer thereof as soon as Sellers become so aware. Buyer
acknowledges that Sellers have notified Buyer about, and Buyer is aware of, the
phased improvements required by the State and County Department of Health and
the statements pertaining to restricting attendance at events, made by
representatives of Grant County agencies.
5.1.5. Utilities, Streets, Easements. The Property has a potable
-----------------------------
public water system, sanitary sewage facilities, telephone, and electricity. No
easements are required by the owner of the Land for any access and full use or
in connection with any utilities. Except as specifically set forth in the
Adjacent Owner Agreements, no easement affecting the Land which benefits any
third party interferes with the use of the Property by Sellers or its lessees.
5.1.6. Soils. To the best knowledge of Sellers the Land is not in
-----
an area identified by an agency or department of the federal, state or local
government as having special flood or mudslide hazards, or other special hazards
or adverse soils conditions (other than being rocky) and to the best knowledge
of Sellers the Land is not subject to any of the foregoing.
5.1.7. Intentionally Omitted.
5.1.8. Permits and Zoning. All building permits, certificates of
------------------
occupancy (other than any certificates required because of Buyer's activities in
1993 which were different than, or beyond the scope of, or involved more people
than, the activities engaged in on the Property in 1992), business licenses and,
without limitation, all other notices, licenses, permits, certificates and
authority in the possession of Sellers pertaining to the construction, use or
occupancy of the Property will be delivered to Buyer and all of the foregoing
(whether or not in the possession of Sellers) are to the knowledge of Sellers in
effect and in good standing and all conditions of approval imposed in connection
with any of the same have been satisfied except as specified in the first
sentence of Section 5.1.9 and conditional permits issued may be required for
overnight parking. The Land (as contemplated in the Prior Agreement) has P.U.D.
Zoning. The use of the buildings and business included thereon are in
conformance with the P.U.D. use designation.
5.1.9. Compliance. Sellers have no notice or knowledge that any
----------
government agency considers the current operation, use or development of the
Property to have failed to comply with any law, ordinance, regulation or order
or that any investigation has been commenced or is contemplated respecting any
such possible failure or compliance except the use of irrigation water on the
Land, including but not limited to the amphitheatre itself. Sellers do not have
any knowledge of any intended public
14
improvement which may involve any charge being levied or assessed or which may
result in the creation of any lien on the Property, or of any intended or
proposed federal, state or local statute, ordinance, order, requirement, law or
regulation which may adversely affect the use of the Property. Sellers do not
have any knowledge of any unsatisfied requests for repairs, restorations or
improvements from any entity or authority, including, but not limited to, any
lender, insurance carrier or government authority, except those improvements
required by the State and County Departments of Health and Grant County Building
Department.
5.1.10. Financial Information. All books, records, financial
---------------------
statements and other financial information which have been or are hereafter
delivered to Buyer shall be full, true and correct in all material respects and
have been and will be prepared in accordance with generally accepted accounting
principles, consistently applied. All such financial statements will fairly
present the respective financial conditions of the subjects thereof as of the
respective dates thereof, and no material adverse change has occurred from the
respective dates thereof to the date hereto. If a material adverse change has
occurred or shall have occurred in the condition (financial or otherwise) of the
Property between dates of the statements delivered in accordance with Section
3.3.4 and the Closing Sellers will give Buyer Notice. None of the occurrences
specified in Section 4.6 has occurred. Notwithstanding anything to the contrary
in this Agreement, Sellers shall not be required to deliver financial
information related, to Champs Winery related operations or activities on the
Land relating primarily to agricultural activities. Sellers do not have, and
within the last five years have not had, any appraisals or appraisal reports
with respect to the Land (or including the Land).
5.1.11. Existing Agreements. There are no agreements or
-------------------
understandings relating to the Property, except for the Permitted Exceptions,
Adjacent Owner Agreements, the Existing Contracts and the Prior Agreement. To
Sellers' best knowledge, none of the Existing Contracts violates any federal,
state or local law, rule or regulation.
5.1.12. Default. Sellers are not and will not be at any time or
-------
times as of or before the Closing in default in respect of any of its
obligations or liabilities pertaining to the Property. Without limitation on the
foregoing, the Continuing Contracts, and the Permitted Exceptions are free from
default by Sellers, and to the best knowledge of Sellers, by any other party
thereto. There is not any state of facts or circumstances or conditions or
events which, after notice or lapse of time or both, would constitute or result
in any such default by any Sellers under its said obligations or liabilities or,
to the best knowledge of Sellers, by any party under or related to the Existing
Contracts, or the Permitted Exceptions. Sellers are not aware of any claim
15
by any person or entity which is inconsistent with provisions of this Section
5.1.12. Sellers shall not be deemed in violation of this Section 5.1.12 with
respect to any matter which can be cured by the payment of money and which is
in fact cured at or before the Closing.
5.1.13. Litigation; Condemnation. Except as specified on Exhibit I,
------------------------
to Sellers' best knowledge, there are no actions, suits or proceedings pending,
before or by any judicial body or any governmental authority, against or
affecting Sellers or relating to the Property or the transactions contemplated
by this Agreement. To Sellers' best knowledge, there is no known eminent domain
or similar proceeding which would affect the Land or Improvements in any way
whatsoever.
5.1.14. Insurance Policies. All Sellers insurance policies
------------------
covering or relating to the Property or any part thereof are in full force and
effect on the date hereof and all premiums coming due with respect thereto prior
to the date hereof have been paid. No notice of cancellation has been received
with respect thereto. Sellers will maintain all such insurance policies (or
renewals thereof) in effect to the Closing, at Sellers' sole cost and expense.
5.1.15. No Surviving Concessions/Leases. Except as disclosed in
-------------------------------
the Schedule of Existing Contracts and the Permitted Exceptions, there are no
concession agreements, leases, licenses, or any other agreements conferring any
right on a third person to use, or occupy, or conduct business upon all or any
part of the Property which will survive the Closing.
5.1.16. Adverse Information. Sellers have no information of any
-------------------
change contemplated in any applicable laws, ordinances, or restrictions, or any
judicial or administrative action, or any action by adjacent landowners, or
natural or artificial conditions upon the Property, or any other material fact,
circumstance or condition which would prevent, limit, or impede, or render more
costly Buyer's use of the Property as a contemporary music concert venue, other
than as provided for elsewhere in this Agreement or disclosed in the Prior
Agreement. Sellers will have no liability under this Section 5.1.16
if and to the extent Buyer has knowledge of a particular matter as a consequence
of Buyer (or its representatives) having attended meetings held in 1993 between
representatives of Grant County, the State of Washington, or other governmental
agencies or contractors or as a result of Buyer receiving information from any
of said agencies.
5.1.17. Toxic or Hazardous Materials. During the time when Sellers
----------------------------
owned the Property, and to the best of Sellers' knowledge, prior thereto,
neither Sellers nor, to the best of
16
Sellers' knowledge, any third party, has used, generated, manufactured, stored
or disposed of on, under or about the Property or transported to or from the
Property in a manner which violated any statute, regulation or ordinance any
Hazardous Materials except those listed and described on "Exhibit G". As used in
this Agreement, "Hazardous Materials" means any substance, material or waste
which is or becomes regulated by any local governmental authority, the State of
Washington or the United States Government; flammable, explosive, and
radioactive materials; petroleum and petroleum products; asbestos; any chemical
substance, material or waste which is hazardous, toxic, or radioactive, or is
defined, classified, or designated as hazardous, toxic, or radioactive, or other
similar term, by any federal, state or local statute, regulation, or ordinance
presently in effect, including but not limited to Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec.
9601, et seq.; Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
et seq.; Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.; Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; Clean Air Act, 42
U.S.C. Section 7401 et seq.; Water Pollution Control Act, Federal Clean Water
Act of 1977, 33 U.S.C. Section 1251 et seq.; Insecticide, Fungicide, and
Rodenticide Act; Safe Drinking Water Act, 42 U.S C. Section 300(f) et seq.;
Washington Water Pollution Control Act, RCW Chapter 90.48; Washington Clean Air
Act, RCW Chapter 70.94; Washington Solid Waste Management-Recovery and Recycling
Act, RCW Chapter 70.95; Washington Hazardous Waste Management Act, RCW Chapter
70.105; Washington Hazardous Waste Fees Act, RCW Chapter 70.105(a); Washington
Hazardous Waste Clean-up - Model Toxics Control Act, RCW Chapter 70.105D;
Washington Nuclear Energy and Radiation Act, RCW Chapter 70.98; and Washington
Radioactive Waste Storage and Transportation Act of 1980, RCW Chapter 70.99.
5.2. Buyer's Representations and Warranties. Buyer represents an
--------------------------------------
warrants to Sellers that the following statements are true and correct on the
date hereof and will be true and correct on the Closing Date as though made on
such date:
5.2.1 Organization, Corporate Power and Authority. Buyer is a
-------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of Washington, and has the requisite corporate power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby.
5.2.2 Authorization, Binding Effect and No Conflicts. The
----------------------------------------------
execution, delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly and validly executed and delivered by Buyer and
constitutes the valid and binding obligation of Buyer, enforceable in accordance
with its terms. The
17
execution, delivery and performance by Sellers of this Agreement and the
consummation by Sellers of the transactions contemplated hereby will not (x)
violate any provision of law, rule or regulation to which Sellers or Buyer is
subject, (y) violate any order, judgement or decree applicable to Sellers or
Buyer, or (z) conflict with, or result in a breach or default under, any term or
condition of the Articles of Incorporation or the Bylaws of Buyer, or any
agreement or other instrument to which Sellers are a party or by which Sellers
may be bound; except in each case, for violations, conflicts, breaches or
defaults which in the aggregate would not materially hinder or impair the
consummation of the transactions contemplated hereby.
5.2.3 Consents and Approvals. Neither the execution of this
----------------------
Agreement nor the consummation of the sale of the Assets requires the approval
or consent of any governmental authority having jurisdiction over the business
of Buyer nor of any party to any agreement with Buyer.
5.2.4 Availability of Funds. Buyer has available and will have
---------------------
available on the Closing Date sufficient funds to enable it to consummate the
transactions contemplated by this Agreement. The Purchase Price Note shall be
paid to Sellers in full and in installments as specified therein on or before
when due.
5.3. Reaffirmation. The representations and warranties of Sellers and
-------------
Buyer set forth above in Section 5.1 and 5.2 respectively, are true and correct
as of the date of this Agreement and shall be true and correct as of Closing. At
Buyer's or Sellers' election, as the case may be, each may require the other to
execute a document reaffirming those representations and warranties and deliver
the same to Buyer or Sellers, as the case may be, upon Closing. Except with
respect to events or circumstance occurring or arising after the Closing, these
representations and warranties shall survive the Closing and the delivery and
recording of the Warranty Deed. The parties shall be entitled to rely upon those
representations and warranties, notwithstanding any inspection or investigation
of the Property which was made or could have been made by Buyer.
5.4 No Sandbagging. A party (the "claiming party") shall not be
--------------
entitled to recover from the other party on account of any breach or alleged
breach of any representation or warranty made by the other party if and to the
extent the other party can establish by a preponderance of the evidence that the
claiming party knew prior to the Closing that a particular representation or
warranty made by the other party was not true.
6. CLOSING
-------
18
6.1. Deposits Into Escrow.
--------------------
6.1.1. Not less than 5 business days prior to the Closing Date,
Sellers shall deposit into the Escrow the Statutory Warranty Deed, and the Non-
Foreign Affidavit, and the restrictive covenants referred to in Section 1.4.1.
6.1.2. On or prior to the Closing Date, Buyer shall deposit into
the Escrow the funds required to be deposited pursuant to the provisions of
Section 1.3.2 above, the deed(s) of trust and the Purchase Price Note.
6.1.3. Sellers and Buyer shall each deposit into Escrow such other
instruments (including without limitation, the Adjacent Owner Agreements) and
funds as are reasonably required by the Escrow Holder or otherwise required to
complete Escrow and consummate the purchase of the Property in accordance with
the terms of this Agreement.
6.2. Prorations. The following prorations shall be made as of 12:01 a.m.
----------
on the day the Closing occurs on the basis of a 365-day year. At least 10
business days prior to the Closing Date, Escrow Holder shall deliver to Sellers
and Buyer a tentative proration schedule setting forth a preliminary
determination. In the event the parties are unable to agree on the proration of
an item of income or expense within seven (7) calendar days the matter shall be
referred to the firm of Ernst & Young, Certified Public Accountants, for
determination. The determination of Ernst & Young shall be final and binding on
the parties with respect to proration of the disputed item, and any amount owing
by one party to the other shall be paid in cash within five (5) days of Ernst &
Young's determination. Prior to submission of the disputed item to Ernst &
Young, each party shall give to the other its written determination of how it
believes the item should be prorated. The party whose determination is closest
to that of Ernst & Young shall be indemnified by the other party for all
reasonable costs incurred in resolving the dispute, including the fees of Ernst
& Young. Closing shall not be delayed because of the fact that any prorations
have not been finally determined by the date otherwise set for the Closing.
However, if the prorations have not been finally determined by the Closing,
Escrow Holder and the party shall proceed as if the Escrow Holder's tentative
proration schedule were final, except that Escrow Holder shall hold back any
proration amounts which are in dispute and shall disburse them after the Closing
in accordance with mutual instructions by the parties (and the parties shall be
obligated to give instructions on the basis of the resolution procedures
specified above in this Section 6.2) and any additional payments owing by one
party to the other shall be made outside of Escrow.
19
6.2.1. Real estate taxes and personal property taxes shall be
prorated as of the Closing on the basis of the most recent tax statement for the
Property. If the prorations are not made on the basis of the current tax year
or if supplemental taxes are assessed after the Closing, but only if said
supplemental taxes are assessed on or before December 31, 1995 or on or before
December 31, 1995 Buyer has notified Sellers that Buyer has become aware that
such supplemental taxes will be assessed, for the period prior to the Closing,
the parties shall make any necessary adjustment after Closing by cash payment to
the party entitled thereto so that Sellers shall have borne all taxes allocable
to the period prior to the Closing (including all supplemental taxes which are
allocable to the period prior to the Closing) and Buyer shall bear all taxes
allocable to the period after the Closing (including all supplemental taxes
which are allocable to the period after the Closing).
6.2.2. Except for payments made to Sellers under the Prior
Agreement, rentals, prepaid rentals, prepaid payments and security deposits
(and all accrued interest thereon, if any) (collectively, "Rent") shall be
----
prorated on the basis that Buyer shall receive a credit for all Rent which
Sellers have actually collected which is allocable to the period after the
Closing. Sellers shall not receive a credit for any Rent Sellers have not
collected as of the Closing which is allocable to the period prior to the
Closing. Nevertheless, if Buyer collects any such Rent after the Closing, Buyer
shall promptly pay the same to Sellers.
6.2.3. Utility bills relating to the Property (with the assumption
that utility charges were uniformly incurred during the billing period in which
the Closing occurs).
6.3. Payment of Closing Costs.
------------------------
6.3.1. Closing Costs Borne by Sellers. Sellers shall bear
------------------------------
and Escrow Holder shall discharge on Sellers' behalf out of the sums payable to
Sellers hereunder the costs and expenses associated with a Standard Owner's
Policy, and all sale, excise (or similar tax, such as a documentary transfer
tax), and use taxes required in connection with the transfer of the Land and
Improvements to Buyer, the sums necessary to obtain and the cost of recording
any reconveyance required hereby, one-half of Escrow Holder's fee (including any
fees of Chicago Title should it act to collect and disburse the cash portion of
the purchase price as specified in Section 2.2), and any additional costs and
charges customarily charged to sellers in accordance with common escrow
practices in the State of Washington.
6.3.2. Closing Costs Borne by Buyer. Buyer shall bear and pay
----------------------------
into Escrow and Escrow Holder shall discharge on Buyer's behalf out of the
additional sums required by Buyer hereunder, the
20
additional costs and expenses associated with an Extended Owner's Policy (beyond
those if the title company had issued the Standard Owner's Policy as evidenced
in the PTR), the fee for recordation of the Warranty Deed, one half of Escrow
Holder's fee, and any additional charges customarily charged to buyers in
accordance with common escrow practices in the State of Washington.
6.4. Closing of Escrow.
-----------------
6.4.1. General Conditions To Be Satisfied. Escrow Holder shall hold
----------------------------------
the Closing on the Closing Date if: (a) it has received in a timely manner all
the funds and materials required to be delivered into Escrow by Buyer and
Sellers: (b) it has received the Owner's Policy from the Title Company, issued
subject only to the Permitted Exceptions, Adjacent Owner Agreements, and (c) all
of the conditions to Closing have been satisfied or waived by the party entitled
to waive.
6.4.2. Actions By Escrow Holder. To Close the Escrow, Escrow Holder
------------------------
shall:
(a) Cause the Statutory Warranty Deed, the restrictive covenant
agreements referred to in Section 1.4.1., the Adjacent Owner Agreements referred
to in Section 4.9, the deed[s] of trust referred to in Section 1.3.3, and any
other recordable instruments, to be recorded by the County Recorder of the
County of Grant, Washington, and thereafter the Statutory Warranty Deed and the
restrictive covenant agreements shall be mailed to Buyer, and the deed[s] of
trust shall be mailed to Sellers, and each of the Adjacent Owner Agreements for
the primary benefit of Buyer or Sellers, as the case may be, shall be mailed to
such party with photocopies of the recorded instrument being mailed to the
other, and Escrow Holder shall deliver the Owner's Policy, the Non-Foreign
Affidavits and any surplus funds deposited by Buyer to Buyer, and any other
documents will be mailed to the appropriate party; and
(b) Promptly deliver to the Sellers the Purchase Money Note and funds
which in the aggregate equal the amount of the Purchase Price less the portion
of the Prior Payment previously delivered to Sellers or paid to third parties
pursuant to the escrow instructions delivered in connection with the execution
of the Prior Agreement, and less amounts paid to discharge liens and
encumbrances or paid otherwise to enable Sellers to comply with their
obligations under this Agreement and less or plus the net debit or credit to
Sellers by reason of the prorations and allocation of closing costs provided for
in this Agreement; and
(c) Cause to be recorded and thereafter mailed to such Buyer and
Sellers, such other instruments as Buyer and Sellers may specify.
21
6.4.3. Deliveries By Sellers. Concurrently with the Closing, in
---------------------
addition to delivering to Escrow Holder the instruments executed by Sellers
required to enable Escrow Holder to comply with Section 6.4.2, Sellers shall
deliver to Buyer:
(a) The Xxxx of Sale:
(b) Specific assignments of the Continuing Contracts and other
leases, easements and agreements as designated by Buyer in recordable form and
otherwise in form and content acceptable to Buyer and Sellers, each acting
reasonably;
(c) Termination agreements between Sellers and each of SMT and ASI
for all leases between such parties which relate to or affect all or part of the
Property;
(d) A release in favor of ASC with respect to any and all claims by
Sellers relating to or arising out of the Property or any of Sellers' contracts
with ASC, with the terms of such release being agreed upon between Buyer and
Sellers, each acting reasonably; Buyer shall have the right to deliver the
release to ASC at any time, or not deliver it at all. Sellers shall also deliver
to Buyer an assignment on terms agreed upon between Buyer and Sellers, each
acting reasonably, of Sellers' rights, remedies and defenses against or relating
to ASC; and
(e) The document required by Section 5.3, if requested by Buyer.
6.4.4. Delivery by Buyer. Buyer shall deliver to Sellers,
-----------------
concurrently with the Closing, either a release executed by ASC or an indemnity
and hold harmless agreement executed by Buyer, in each case, in favor of
Sellers, with respect to any and all claims by ASC relating to or arising out of
the Property or any of Sellers' contracts with ASC. Such release and/or
indemnity and hold harmless agreement shall be on terms agreed to between Buyer
and Sellers, each acting reasonably, including without limitation the obligation
of Buyer under the indemnity (if a release of Sellers is not obtained) to defend
Sellers at Buyer's expense. Buyer shall also deliver the document required by
Section 5.3, if requested by Sellers. Buyer shall also deliver to Escrow Holder
the instruments executed by Buyer required to enable Escrow Holder to comply
with Section 6.4.2.
6.5. Failure to Close, Cancellation. Unless Buyer and Sellers mutually
------------------------------
agree in writing and inform Escrow Holder to the contrary, or Sellers have
postponed the Closing Date for up to 15 days as provided in Section 2.4, (in
which case the time limitations for the Closing to occur, for example, below in
this Section 6.5 and in Section 6.6, shall be extended accordingly), or Escrow
Holder received an order from court to the contrary, if the
22
Closing has not occurred by October 31, 1993, or any extended date through
December 20, 1993 to which Buyer has extended the Closing Date as provided
for in Section 2.4, then Escrow Holder shall distribute the funds in the Escrow
to Buyer.
6.6. LIQUIDATION DAMAGES. BUYER AND SELLERS AGREE THAT IN THE EVENT BUYER
-------------------
DEFAULTS IN ITS OBLIGATION TO PURCHASE THE SALE PROPERTY, THE DAMAGES TO SELLERS
WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN, AND THAT
THEREFORE, IN SUCH CIRCUMSTANCES, THE SUM OF FIFTY THOUSAND DOLLARS ($50,000)
PAID TO SELLER CONCURRENTLY WITH THE EXECUTION OF THIS AGREEMENT IS A REASONABLE
ESTIMATE OF THE DAMAGES TO SELLERS, SUCH DAMAGES INCLUDE COSTS OF NEGOTIATING
AND DRAFTING OF THIS AGREEMENT, COSTS OF COOPERATING IN SATISFYING CONDITIONS TO
CLOSING COSTS OF SEEKING ANOTHER BUYER, COSTS AND OTHER RISKS RELATED TO
EXTENSIONS OF THE CLOSING AND OTHER COSTS AND LOSSES INCURRED IN CONNECTION
HEREWITH. BUYER AND SELLERS AGREE THAT SAID SUM, AS WELL AS SELLERS' RIGHT TO
RETAIN THE PRIOR PAYMENT AS CONSIDERATION FOR SELLERS' EXECUTION OF THE PRIOR
AGREEMENT AND LEASING OF THE LEASE PROPERTY TO BUYER FOR THE 1993 SEASON, SHALL
BE THE SOLE DAMAGES AND THE SOLE AND EXCLUSIVE REMEDY OF SELLERS FOR BUYER'S
FAILURE TO CLOSE, AND BUYER SHALL BE ENTITLED TO ALL FUNDS DEPOSITED BY BUYER IN
ESCROW, EXCEPT BUYER AND SELLERS SHALL EACH BEAR ITS RESPECTIVE SHARE OF COSTS
AS SPECIFIED IN SECTION 3.4.
SELLERS ACKNOWLEDGE RECEIPT OF THE SUM OF FIFTY THOUSAND DOLLARS ($50,000.00) AS
PAYMENT OF LIQUIDATED DAMAGES, WHICH AMOUNT SHALL BE APPLIED TO THE PURCHASE
PRICE IN THE EVENT CLOSING OCCURS ON OR BEFORE OCTOBER 31, 1993 BUT SHALL NOT BE
APPLIED IF CLOSING OCCURS THEREAFTER.
/s/ VB
--------
Initials of Buyer: /s/ B Initials of Sellers: /s/ CB
------ --------
6.7. Return of Funds not a Release. The return of funds held in Escrow
-----------------------------
shall not relieve Sellers or Buyer of liability for any failure to comply with
the terms of this Agreement and shall be in addition to any other right Buyer or
Sellers may have at law or in equity against the other. The foregoing sentence,
however, is not meant to place any further liability than provided for elsewhere
in this Agreement on any party who, in accordance with the terms of this
Agreement, exercises the right to terminate this Agreement, or to expand Buyer's
liability beyond that provided for in Section 6.6 which shall take precedance
over this Section 6.7.
6.8. Possession. Possession of the Property shall be delivered to Buyer
----------
upon Closing, free of any tenancy or right of
23
occupancy or possession, except as specified in the Existing Contracts,
Permitted Exceptions, and Adjacent Owner Agreements. Notwithstanding the
foregoing, Sellers shall have a reasonable period of time to remove any grape
crop on the Property remaining to be harvested for the 1993 crop.
7. INDEMNIFICATION
---------------
7.1. Indemnification of Buyer. Sellers, jointly and severally, shall hold
------------------------
harmless, indemnify and defend Buyer from and against: (a) any and all third
party claims, demands, causes of action, losses, liabilities, liens or
encumbrances, whether direct, contingent or consequential and no matter how
arising, in any way related to the Property and occurring before the Closing, or
in any way related to or arising from any act, conduct, omission, contract or
commitment of Sellers occurring at any time or times before the Closing (except
any claims arising from any act, conduct, omission occurring before or after the
Closing with respect to any claims arising or accruing under any agreement with
ASC prior to Closing); and (b) any loss or damage to Buyer resulting from a
material inaccuracy in or material breach of any representation or warranty of
Sellers under this Agreement or resulting from any material breach or default by
Sellers under this Agreement. Buyer shall notify Sellers of any such claim
against Buyer within 10 days after it has notice of such claim. Should Sellers
fail to discharge or undertake to defend Buyer against such liability upon
learning of the same, then Buyer may settle such liability and Sellers'
liability to Buyer shall be conclusively established by such settlement, the
amount of such liability to include both the settlement consideration and the
reasonable costs and expenses, including reasonable attorneys' fees, incurred by
Buyer in effecting such settlement, together with interest thereon from the date
of payment of any of the same by Buyer until repayment is made by Sellers at the
lesser of ten per cent (10%) per annum or the maximum rate then allowed by
applicable law. Notwithstanding anything to the contrary, Sellers shall not be
required to defend, hold harmless, or indemnify Buyer, or be liable for any
claims, demands, causes of action, losses, liabilities, liens or encumbrances,
whether direct, contingent or consequential arising from any act, conduct,
contract, or commitment of Sellers to any governmental agency at any time or
times before Closing with respect to improvements to be made to the Property.
7.2. Indemnification of Sellers. Buyer hereby agrees to indemnify, defend
--------------------------
and hold Sellers harmless from and against any and all damage or deficiency
resulting from any misrepresentations, breach of warranty, or breach or default
by Buyer, or any claim by a party to an Existing Contract arising out of Buyer's
acts or omissions after the Closing. Without limiting the foregoing, Buyer
shall defend, hold harmless, and indemnify Sellers, for any claims, demands,
causes of action, losses, liabilities, liens or
24
encumbrances, whether direct, contingent or consequential and no matter how
arising, in any way related to the Property arising from any act, conduct,
contract, or commitment of Sellers to any governmental agency at any time or
times before Closing with respect to improvements to be made to the Property.
Sellers shall notify Buyer of any such claim against Sellers within 10 days
after Sellers have notice of such claim. Should Buyer fail to discharge or
undertake to defend Sellers against such liability upon learning of the same,
then Sellers may settle such liability and Buyer's liability to Sellers shall be
conclusively established by such settlement, the amount of such liability to
include both the settlement consideration and the reasonable costs and expenses,
including reasonable attorneys' fees, incurred by Sellers in effecting such
settlement, together with interest thereon from the date of payment of any of
the same by Sellers until repayment is made by Buyer at the lesser of ten
percent (10%) per annum or the maximum rate then allowed by applicable law.
7.3 Indemnification per Prior Agreement. Notwithstanding anything set
-----------------------------------
forth in Sections 7.1 and 7.2 above, the provisions of Section 3.11 of the
Prior Agreement remain in full force and effect (except, as provided in Section
8.2, Sellers shall have no claims against the Buyer for damage to the Property
if the Closing occurs), and in the event of a conflict between Sections 7.1 or
7.2 and this Section 7.3, this Section 7.3 shall prevail. Section 3.11 of the
Prior Agreement reads as follows:
3.11 Seller shall indemnify and hold MCA harmless from and against
any and all third party claims for occurrences taking place on
Property D, or Property E, or the Adjacent Area. Seller shall also
indemnify and hold MCA harmless from and against any and all third
party claims for occurrences taking place on the Lease Property
arising out of acts or omissions of Seller, its employees, agents, or
contractors during the 1993 Season. Seller will indemnify and hold MCA
harmless from and against any and all third party claims for
occurrences taking place on the Lease Property during times other than
the calendar day immediately preceding, the calendar day of, and the
calendar day immediately following an event held by MCA at the
Amphitheater, unless such claim arises out of the active negligence of
MCA, its employees, agents or contractors. MCA will indemnify and hold
Seller harmless from and against any and all third party claims for
occurrences taking place on the Lease Property anytime during the 1993
Season (and not just
25
during the 3 day periods specified in the prior sentence) arising out
of the active negligence of MCA, its employees, agents, contractors,
patrons, or performers. The indemnification obligations specified
above in this Section 3.11 and the insurance obligations specified
below in Section 3.12 inure and extend not only to the benefit of
Seller and MCA, respectively, but also respectively to Seller's and
MCA's shareholders, partners, directors, officers, employees, and
agents.
Certain of the words and phrases used in the aforementioned Section
3.11 are defined elsewhere in the Prior Agreement and such definitions are
incorporated herein by this reference.
26
8. GENERAL PROVISIONS
------------------
8.1. Counterparts; No Offer. This Agreement may be executed in
----------------------
counterparts, each of which shall be deemed an original, but all of which, taken
together, shall constitute one and the same instrument. None of the
preparation, circulation of drafts or negotiations of this Agreement shall
constitute an offer by Sellers to sell the Property nor an offer by Buyer to
purchase the Property. Neither Buyer nor Sellers shall have any right, duty or
obligation under this Agreement unless and until this Agreement or counterparts
hereof have been executed by Buyer and each of the Sellers.
8.2. Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties respecting the subject matter of this Agreement and
supersedes all prior understandings and agreements, whether oral or in writing,
between the parties respecting the subject matter of this Agreement. Without
derogating from the generality of the foregoing, this Agreement supersedes
Section 1.2 of the Prior Agreement and any other provision of the Prior
Agreement insofar as such other provisions relate to the purchase and sale of
the Property. Notwithstanding the foregoing, (except as specified in the prior
sentence) this Agreement shall not supersede the Prior Agreement except that if
Closing occurs, the lease contemplated by the Prior Agreement shall terminate
and Sellers shall have no claims against Buyer for damage of the Property (but
the foregoing is not intended to derogate from any provision of the deed of
trust securing the Purchase Money Note), and Buyer shall have no claims against
Sellers arising out of the Prior Agreement, provided that Section 3.11 of the
Prior Agreement shall survive the Closing.
8.3. Legal Advice; Neutral Interpretation; Headings. Each party has
----------------------------------------------
received independent legal advice from its attorneys with respect to the
advisability of executing this Agreement and the meaning of the previsions
hereof. The provisions of this Agreement shall be construed and interpreted as
to their fair meaning, and not for or against any party based upon any
attribution to such party as the source of language in question. Headings used
in this Agreement are for convenience of reference only and shall not be used in
construing this Agreement.
8.4. Choice of Law. This Agreement shall be governed by the laws of the
-------------
State of Washington applicable to contracts to be wholly performed therein.
8.5. Severability. If any term, covenant, condition or provision of this
------------
Agreement, or the application thereof to any person or circumstance, shall to
any extent be held by a court of competent jurisdiction to be invalid, void or
unenforceable, the
27
remainder of the terms, covenants, conditions or provisions of this Agreement,
or the application thereof to any person or circumstance, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby.
8.6 Waiver of Covenants, Conditions or Remedies. The waiver by one party
--------------------------------------------
of the performance of any covenant or condition under this Agreement shall not
invalidate this Agreement nor shall it be considered a waiver by it of any other
covenant or condition under this Agreement. The waiver by either or both
parties of the time for performing any act under this Agreement shall not
constitute a waiver of the time for performing any other act or an identical
act required to be performed at a later time. If for any reason any item
required to be delivered to Buyer under this Agreement is not delivered when
required, then Sellers shall nevertheless remain obligated to deliver the same
to Buyer and nothing (including, without limitation, the occurrence of the
Closing) shall constitute a waiver by Buyer of any such requirement, unless with
respect to any post-Closing obligation Sellers establish that Buyer was aware of
the non-delivery of such item. Notwithstanding the foregoing, if Sellers give
notice to Buyer anytime within 10 days prior to the Closing that Sellers will
not be delivering a specific item or items, and if and to the extent Buyer does
not object to such non-delivery by giving notice to Sellers prior to the
Closing, then Sellers shall have no obligation to deliver after the Closing any
item or items as to which Buyer did not object to non-delivery. The exercise of
any remedy provided in this Agreement shall not be a waiver of any consistent
remedy provided by law or in equity, and the provision in this Agreement for any
remedy shall not exclude other remedies unless they are expressly excluded.
8.7. Exhibits and Schedules; Sections. All exhibits and schedules to
--------------------------------
which reference is made in this Agreement are deemed incorporated in this
Agreement, whether or not actually attached. References to Sections are to
Sections of this Agreement unless stated otherwise.
8.8. Amendment. This Agreement may be amended at any time prior to Closing
---------
by the written agreement of Buyer and Sellers. An amendment of this Agreement,
may be binding upon the parties despite any lack of legal consideration, so
long as the same shall be in writing and executed by the parties hereto.
8.9. Relationship of Parties. The parties agree that their relationship
-----------------------
is that of seller and buyer, and that nothing contained herein shall constitute
either party the agent or legal representative of the other for any purpose
whatsoever, nor shall this Agreement be deemed to create any form of business
organization between the parties hereto, nor is either party granted any right
or authority to assume or create any obligation or
28
responsibility on behalf of the other party, nor shall either party be in any
way liable for any debt of the other.
8.10. No Third Party Benefit. This Agreement is intended to benefit only
----------------------
the parties hereto and no other person or entity has or shall acquire any
rights hereunder. Notwithstanding the foregoing, affiliates of the parties and
others may be expressly benefited by the terms of Adjacent Owner Agreements.
8.11. Time of the Essence. Time shall be of the essence as to all dates
-------------------
and times of performance, whether contained herein or contained in any escrow
instructions to be executed pursuant to this Agreement, and all escrow
instructions shall contain a provision to this effect.
8.12. Further Acts. Each party hereby agrees that it shall, upon request
------------
of the other, execute and deliver such further documents (in form and substance
reasonably acceptable to the party to be charged) and do such other acts and
things as are reasonably necessary and appropriate to effectuate the terms and
conditions of this Agreement, including (without limitation) the execution and
delivery of such documents, and the doing of such acts or thinge as may be
required to satisfy the requirements of the Title Company to issue title
insurance in accordance with this Agreement and for Buyer to fully and
adequately perform its investigations of the Property.
8.13. Successors and Assigns. The terms and conditions of this Agreement
----------------------
shall inure to the benefit of, and shall be binding upon, the parties hereto,
their respective heirs, personal representatives, successors and assigns. This
Agreement may not be assigned or conveyed prior to the Closing by any party to
any person or entity without the prior written consent of the other party
hereto. In the event of an assignment, the assigning party shall not be relieved
of any of its obligations and undertakings contracted for herein, and if the
Closing occurs the Purchase Money Note shall not be discharged nor shall the
lien of the deed of trust securing said Note be released. The deed of trust
securing the Purchase Money Note contains provisions enabling the beneficiary to
accelerate the unpaid balance of the Purchase Money Note under certain
conditions upon a transfer of title of the Land and Improvements.
8.14. Attorneys' Fees. In the event of any litigation (including the
---------------
arbitration referred to in Section 8.16) involving the parties to this Agreement
to enforce any provision of this Agreement, to enforce any remedy available upon
default under this Agreement, or seeking a declaration of the rights of either
party under this Agreement, the prevailing party shall be entitled to recover
from the other such attorneys' fees and costs as may be reasonably incurred. All
other attorneys' fees and costs relating
29
to this Agreement and the transactions contemplated hereby shall be borne by the
party incurring the same.
8.15. Brokers. Buyer and Sellers each represent and warrant to the other
-------
that they have not dealt with any brokers or finders in connection with the
purchase and sale of the Property and no broker or other person is entitled to
any commission or finder's fee in connection with the purchase and sale of the
Property, except as follows: Xxxxxxxxx Xxxxxx which shall be Sellers'
responsibility and will be included in Sellers' indemnity set forth in the next
sentence. Sellers and Buyer each agree to indemnify and hold harmless the other
against any loss, liability, damage, cost, claim or expense incurred by the
indemnified party by reason of any brokerage fee, commission or finder's fee
alleged to be payable because of any act, omission or statement of the
indemnifying party.
8.16. Conflicting Demands. Should Escrow Holder receive or become aware
-------------------
of conflicting demands or claims with respect to the Escrow, the rights of any
party hereto, or funds, documents or property deposited with Escrow Holder,
Escrow Holder shall have the right to discontinue any further acts until such
conflict is resolved to its satisfaction, and it shall have the further right to
commence or defend any action for the determination of such conflict by
expedited arbitration (within 30 days) in accordance with the rules of Judicial
Arbitration and Mediation Services (J. A. M. S.). The parties shall,
immediately after demand therefor by Escrow Holder, reimburse Escrow Holder (in
such respective proportions as Escrow Holder shall determine) any reasonable
attorneys' fees and court costs incurred by Escrow Holder pursuant to this
Section.
8.17. Manner of Giving Notice. All notices and demands which either party
-----------------------
is required or desires to give to the other shall be given in writing by United
States registered or certified mail, return receipt requested, by personal
delivery, by telegram or by express courier service to the address set forth
below for the respective party, provided that if any party gives notices of a
change of name or address, notices to that party shall thereafter be given as
demanded in that notice. All notices and demands given by mail shall be
effective on the third business day after mailing; all notices and demands
otherwise given as provided above shall be effective upon receipt by the party
to whom notice or a demand is being given.
30
To Buyer: With Copies To:
--------- ---------------
MCA Concerts, Inc. Xxxxxxxxx, Xxxxx & Xxxxxx
000 Xxxxxxxxx Xxxx Xxxxx 0000 Xxxxxxxx Xxxx
Xxxxxxxxx Xxxx, XX 00000 Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxx Attn: Xxxxxxx X. Xxxxx
To Sellers: With Copies To:
----------- ---------------
Xxxxxxx X. Xxxxx, Xx. and Xxxxxxx X. Xxxxx III
Xxxxx X. Xxxxx Xxxx & Xxxxx
0000 00xx Xxxxxx, X.X. Xxxxx 000X
Xxxxxx Xxxxxx, XX 00000 0000 - 000xx Xxxxxx X.X.
Xxxxxxxx, XX 00000
8.18 Confidentiality. The terms of this Agreement and the information
---------------
and documents delivered pursuant to this Agreement shall be considered
confidential between the parties hereto and, unless a litigation or arbitration
should arise between the parties hereunder, or a party be legally compelled
to disclose (but the party under compulsion shall as soon as it becomes aware of
the likelihood of such compulsion advise the other party thereof), or a
particular matter is already in the public domain through no fault of the
disclosing party, no party shall disclose the terms of the Agreement to any
individual or entity other than the respective parties and their agents,
attorneys, and accountants. Buyer may terminate the effectiveness of this
Section 8.18 by notice to Sellers anytime after the first to occur of 2 years
from the Closing or December 31, 1995.
8.19. Buyer's Investigation. Unless and until the purchase and sale
---------------------
contemplated by this Agreement is closed, Buyer and its representatives shall
treat all information obtained in the investigation of Sellers' Property and
otherwise not in the public domain (and as long as such information is not
known by others through no fault of Buyer) as confidential, and shall return all
books, records and documents made available to it by Sellers by December 31,
1993, if the transaction contemplated herein is terminated or fails to close by
December 20, 1993. If Buyer's obligation specified in the prior sentence is
not sooner terminated, it shall expire on December 31, 1995. Nothing contained
in this Section 8.19 or in Section 8.18 shall restrict the right of Buyer to use
and disclose information and documents in connection with its evaluation of, and
in connection with its activities on, and development of, the Property.
8.20. Approval of Documents. Unless otherwise provided herein, all
----------------------
instruments and documents delivered pursuant to this Agreement shall be dated
as of the Closing Date, and shall be
31
satisfactory to the parties and to their respective counsel as to form and
content.
8.21. Short form Agreement. Either party shall, upon the request of the
--------------------
other, execute, acknowledge and deliver to the other a short form of this
Agreement in recordable form.
8.22. Survival. The terms and provisions of this Agreement and the
--------
Schedules and Exhibits shall survive the Closing and recording of the Warranty
Deed. In case of any termination by either party pursuant to the terms of this
Agreement, neither party shall have any further obligation to the other party
under the terms of this Agreement, except for the sharing of costs and for any
rights Buyer or Sellers may have against the other for breach (subject, in the
case of Buyer's liability, to Section 6.6).
9. DISCLAIMER
----------
Except as specifically provided in this Agreement, (i) Buyer has
agreed to purchase the Property "as is", "where is" and "with all faults"; and
(ii) Sellers disclaim any implied warranty with respect to the condition, grade,
suitability, accuracy or physical condition of the Property, including without
limitation, any implied warranties that the Property is merchantable or fit for
a particular purpose.
32
IN WITNESS WHEREOF, the parties have executed this Agreement or caused this
Agreement to be executed by their/its duly authorized officers as of the day and
year first written above.
SELLERS: BUYER:
/s/ Xxxxxxx X. Xxxxx, Xx. MCA CONCERTS, INC.
----------------------------- a California corporation
XXXXXXX X. XXXXX, XX.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxx Xxxxxxx
----------------------------- ---------------------------
XXXXX X. XXXXX Its: President
--------------------------
CHAMPS DE BRIONNE WINERY
ASSOCIATES, a Washington
limited partnership
By: /s/ Xxxxx X. Xxxxx
--------------------------
Its: General Partner
-------------------------
General Partner
SUMMER MUSIC THEATRE, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
--------------------------
Its: President
-------------------------
33
