===============================================================================
PURCHASE AGREEMENT
by and among
SFX ENTERTAINMENT, INC.,
▇▇▇▇▇▇ ▇▇▇▇▇,
PEACH STREET PARTNERS, LTD.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
INDIVIDUALLY AND AS TRUSTEE OF THE ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ FAMILY TRUST,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
AS CO-TRUSTEES OF THE ▇▇▇▇▇▇▇▇▇▇▇ FAMILY TRUST
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated as of May 13, 1998
===============================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS........................................................................................... 1
SECTION 1.01 DEFINED TERMS.................................................................................. 1
SECTION 1.02 INTERPRETATION................................................................................. 2
ARTICLE II. PURCHASE AND SALE.................................................................................... 2
SECTION 2.01 SALE AND PURCHASE OF THE STOCK AND THE PARTNERSHIP INTERESTS................................... 2
SECTION 2.02 CLOSING MATTERS................................................................................ 2
SECTION 2.03 TRANSFER OF SHARES AND PARTNERSHIP INTERESTS................................................... 2
SECTION 2.04 CONSIDERATION.................................................................................. 3
SECTION 2.05 [INTENTIONALLY OMITTED.]....................................................................... 4
SECTION 2.06 CONVEYANCE AND TRANSFER........................................................................ 4
SECTION 2.07 CERTAIN ASSETS................................................................................. 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLERS....................................................... 4
SECTION 3.01 ORGANIZATION, GOOD STANDING AND QUALIFICATION.................................................. 4
SECTION 3.02 AUTHORITY...................................................................................... 5
SECTION 3.03 CAPITALIZATION................................................................................. 5
SECTION 3.04 SUBSIDIARIES................................................................................... 6
SECTION 3.05 NO DEFAULT; NON-CONTRAVENTION.................................................................. 6
SECTION 3.06 CONSENTS AND APPROVALS......................................................................... 7
SECTION 3.07 PERSONAL PROPERTY.............................................................................. 7
SECTION 3.08 REAL PROPERTY.................................................................................. 8
SECTION 3.09 LITIGATION..................................................................................... 10
SECTION 3.10 INTELLECTUAL PROPERTY.......................................................................... 10
SECTION 3.11 CONTRACTS...................................................................................... 11
SECTION 3.12 FINANCIAL STATEMENTS........................................................................... 12
SECTION 3.13 ABSENCE OF LIABILITIES......................................................................... 12
SECTION 3.14 ABSENCE OF CERTAIN CHANGES..................................................................... 12
SECTION 3.15 TAXES.......................................................................................... 15
SECTION 3.16 COMPLIANCE WITH LAWS........................................................................... 17
SECTION 3.17 EMPLOYEE MATTERS............................................................................... 17
SECTION 3.18 EMPLOYEES AND RELATED AGREEMENTS; ERISA........................................................ 18
SECTION 3.19 ENVIRONMENTAL COMPLIANCE....................................................................... 21
SECTION 3.20 INSURANCE...................................................................................... 23
SECTION 3.21 ACCOUNTS RECEIVABLE............................................................................ 23
SECTION 3.22 TRANSACTIONS WITH AFFILIATES................................................................... 23
SECTION 3.23 FINDER'S FEES.................................................................................. 24
SECTION 3.24 ABSENCE OF CERTAIN BUSINESS PRACTICES.......................................................... 24
SECTION 3.25 CERTAIN PAYMENTS............................................................................... 24
SECTION 3.26 DISCLOSURE..................................................................................... 24
SECTION 3.27 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇................................................................................. 24
SECTION 3.28 CAMARILLO AMPHITHEATER PROJECT................................................................. 26
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE BUYER.......................................................... 28
SECTION 4.01 ORGANIZATION, GOOD STANDING AND QUALIFICATION.................................................. 28
SECTION 4.02 AUTHORITY...................................................................................... 28
SECTION 4.03 NO DEFAULT; NON-CONTRAVENTION.................................................................. 29
SECTION 4.04 CONSENTS AND APPROVALS......................................................................... 29
SECTION 4.05 FINDER'S FEES.................................................................................. 29
ARTICLE V. PRE-CLOSING COVENANTS OF THE SELLERS.................................................................. 29
SECTION 5.01 CONDUCT OF BUSINESS............................................................................ 29
SECTION 5.02 EXTRAORDINARY ACTS............................................................................. 30
SECTION 5.03 NO BREACH OF REPRESENTATIONS AND WARRANTIES.................................................... 33
SECTION 5.04 ACCESS BY THE BUYER............................................................................ 33
SECTION 5.05 HSR ACT........................................................................................ 33
SECTION 5.06 CONSENTS; NOTICES; TERMINATION................................................................. 33
SECTION 5.07 BEST EFFORTS................................................................................... 34
ARTICLE VI. PRE-CLOSING COVENANTS OF THE BUYER................................................................... 34
SECTION 6.01 NO BREACH OF REPRESENTATIONS AND WARRANTIES.................................................... 34
SECTION 6.02 HSR ACT........................................................................................ 34
SECTION 6.03 CONSENTS AND APPROVALS; NOTICES................................................................ 34
SECTION 6.04 BEST EFFORTS................................................................................... 34
ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF THE BUYER.......................................................... 34
SECTION 7.01 REPRESENTATIONS AND WARRANTIES................................................................. 35
SECTION 7.02 COVENANTS...................................................................................... 35
SECTION 7.03 OFFICER'S CERTIFICATE.......................................................................... 35
SECTION 7.04 OPINION OF COUNSEL............................................................................. 35
SECTION 7.05 CONSENTS....................................................................................... 35
SECTION 7.06 HSR ACT........................................................................................ 35
SECTION 7.07 LEGALITY....................................................................................... 35
SECTION 7.08 INJUNCTIONS.................................................................................... 35
SECTION 7.09 INSTITUTION OF PROCEEDINGS..................................................................... 35
SECTION 7.10 TITLE INSURANCE................................................................................ 36
SECTION 7.11 EMPLOYMENT AGREEMENTS.......................................................................... 36
SECTION 7.12 FIRPTA CERTIFICATES............................................................................ 36
SECTION 7.13 [INTENTIONALLY OMITTED.]....................................................................... 36
SECTION 7.14 AUDITED FINANCIAL STATEMENTS................................................................... 36
SECTION 7.15 CONSULTING SERVICES............................................................................ 36
SECTION 7.16 CERTAIN EVENTS................................................................................. 36
SECTION 7.17 CLOSING OF AWC TRANSACTION..................................................................... 37
SECTION 7.18 RELEASES....................................................................................... 37
SECTION 7.19 TRADEMARK ASSIGNMENT........................................................................... 37
SECTION 7.20 ACKNOWLEDGEMENT................................................................................ 37
SECTION 7.21 DELIVERY OF NOTICES............................................................................ 37
SECTION 7.22 ASSIGNMENT OF E/C ASSETS....................................................................... 37
ARTICLE VIII. CONDITIONS TO THE OBLIGATIONS...................................................................... 37
SECTION 8.01 REPRESENTATIONS AND WARRANTIES................................................................. 37
SECTION 8.02 COVENANTS...................................................................................... 38
SECTION 8.03 OFFICER'S CERTIFICATE.......................................................................... 38
SECTION 8.04 OPINION OF COUNSEL............................................................................. 38
SECTION 8.05 CONSENTS....................................................................................... 38
SECTION 8.06 HSR ACT........................................................................................ 38
SECTION 8.07 LEGALITY....................................................................................... 38
SECTION 8.08 INJUNCTIONS.................................................................................... 38
SECTION 8.09 INSTITUTION OF PROCEEDINGS..................................................................... 38
SECTION 8.10 DELIVERY OF CONSIDERATION...................................................................... 38
SECTION 8.11 EMPLOYMENT AGREEMENTS.......................................................................... 39
SECTION 8.12 CONSULTING SERVICES............................................................................ 39
ii
ARTICLE IX. ADDITIONAL AGREEMENTS OF THE PARTIES................................................................. 39
SECTION 9.01 TAX MATTERS.................................................................................... 39
SECTION 9.02 BULK TRANSFER LAWS............................................................................. 41
SECTION 9.03 [INTENTIONALLY OMITTED.]....................................................................... 42
SECTION 9.04 RESTRICTIVE COVENANTS.......................................................................... 42
SECTION 9.05 NON-SOLICITATION............................................................................... 42
SECTION 9.06 NO-SHOP........................................................................................ 43
SECTION 9.07 [INTENTIONALLY OMITTED.]....................................................................... 43
SECTION 9.08 SUBDIVISION.................................................................................... 43
SECTION 9.09 LICENSE OF OFFICE SPACE........................................................................ 43
SECTION 9.10 EXPENSES OF THE TRANSACTION.................................................................... 44
ARTICLE X. TERMINATION........................................................................................... 44
SECTION 10.01 TERMINATION................................................................................. 44
SECTION 10.02 EFFECT OF TERMINATION....................................................................... 45
ARTICLE XI. INDEMNIFICATION...................................................................................... 45
SECTION 11.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................................................. 45
SECTION 11.02 BY THE SELLERS.............................................................................. 46
SECTION 11.03 BY THE BUYER................................................................................ 46
SECTION 11.04 LIMITATIONS ON INDEMNIFICATION.............................................................. 46
SECTION 11.05 INDEMNIFICATION PROCEDURE FOR THIRD PARTY CLAIMS............................................ 47
ARTICLE XII. MISCELLANEOUS....................................................................................... 48
SECTION 12.01 FURTHER ASSURANCES.......................................................................... 48
SECTION 12.02 ENTIRE AGREEMENT............................................................................ 48
SECTION 12.03 NOTICES..................................................................................... 48
SECTION 12.04 BINDING EFFECT; SUCCESSORS AND ASSIGNS...................................................... 51
SECTION 12.05 GOVERNING LAW............................................................................... 51
SECTION 12.06 CAPTIONS.................................................................................... 51
SECTION 12.07 CONFIDENTIALITY OF DISCLOSURES.............................................................. 51
SECTION 12.08 PUBLICITY................................................................................... 52
SECTION 12.09 CONSENT TO JURISDICTION..................................................................... 52
SECTION 12.10 FEES AND EXPENSES........................................................................... 53
SECTION 12.11 THIRD PARTIES............................................................................... 53
SECTION 12.12 COUNTERPARTS................................................................................ 53
iii
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of May 13, 1998, by and among SFX
ENTERTAINMENT, INC. (the "BUYER"), a Delaware corporation, ▇▇▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇"), PEACH STREET PARTNERS, LTD., a California limited partnership
("PSP"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually ("GEDDES") and as trustee of the ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ FAMILY TRUST (the "GEDDES TRUST"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, as co-trustees of the ▇▇▇▇▇▇▇▇▇▇▇ FAMILY TRUST (the "▇▇▇▇▇▇▇▇▇▇▇
TRUST," and, together with the Geddes Trust, the "TRUSTS") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇▇▇▇▇" and, together with Azoff, PSP, Geddes and the Trusts, the "SELLERS").
W I T N E S S E T H:
WHEREAS, the Sellers are collectively the holders, directly
or indirectly, of (i) partnership interests (the "PARTNERSHIP INTERESTS")
representing in the aggregate a forty-nine percent (49%) partnership interest
in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Amphitheater, a California general partnership ("IMA") and
(ii) forty-nine percent (49%) of the issued and outstanding capital stock (the
"STOCK") of each of New Avalon, Inc., a California corporation, TBA Media,
Inc., a California corporation, and West Coast Amphitheater Corp., a California
corporation (each a "SUBSIDIARY" and, together with IMA, the "COMPANIES"), as
further set forth on Schedule 3.03 hereto;
WHEREAS, the Companies are engaged in the "at risk" music and
concert production and promotion businesses and certain of the Companies are
developing the Camarillo Creek Amphitheater (collectively, the "BUSINESSES");
and
WHEREAS, the Buyer desires to acquire from the Sellers, and
the Sellers desire to sell to the Buyer, all of the issued and outstanding
Partnership Interests and all of the issued and outstanding Stock directly or
indirectly owned by the Sellers (collectively, the "INTERESTS"), on the terms
and subject to the conditions set forth herein (the "ACQUISITION").
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms. For purposes of this Agreement, the terms
set forth on Schedule 1.01 shall have the respective meanings set forth
therein.
Section 1.02. Interpretation. In this Agreement, (a) words used herein
regardless of the gender specifically used shall be deemed and construed to
include any other gender, masculine, feminine or neuter, as the context shall
require, (b) all terms defined in the singular shall have the same meanings
when used in the plural and vice versa, (c) words denoting natural persons
shall include corporations, partnerships and other entities and vice versa,
unless the context otherwise requires and (d) all references to Articles,
Sections, Exhibits and Schedules refer to the Articles, Sections, Exhibits and
Schedules of and to this Agreement, except as otherwise specified herein to the
contrary.
ARTICLE II.
PURCHASE AND SALE
Section 2.01. Sale and Purchase of the Stock and the Partnership
Interests. On the Closing Date, the Sellers shall sell, transfer, convey and
assign to the Buyer, and the Buyer shall purchase from the Sellers, all of the
Interests. With respect to the Partnership Interests indirectly owned by each
of Geddes and Azoff, such Interests are directly owned by ▇▇▇▇▇▇ & ▇▇▇▇, Inc.
("AJI") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. ("SMI"), respectively, and the Buyer shall
acquire such Partnership Interests by acquiring all of the issued and
outstanding capital stock of each of AJI and SMI (THE "PARTNER STOCK") from
Azoff and Geddes. The Interests and the Partner Stock shall be sold,
transferred, conveyed and assigned to the Buyer free and clear of all Liens.
Section 2.02 Closing Matters.
(a) Closing. Subject to Section 10.01 hereof, the closing of the
transactions contemplated by Section 2.01 hereof (the "CLOSING") shall
take place at 10:00 a.m., New York time, on the business day which is
five business days after the fulfillment of the conditions set forth
in Articles VII and VIII hereof, at the offices of Rosenman & Colin
LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other
time or on such other date or at such other place as the Buyer and the
Sellers may agree. The date of the Closing is referred to herein as
the "CLOSING DATE."
(b) Actions Simultaneous. All actions to be taken and all documents to
be executed and delivered by all parties at the Closing shall be
deemed to have been taken and executed and delivered simultaneously
and no actions shall be deemed to have been taken nor shall any
documents be deemed to have been executed and delivered until all
actions have been taken and all documents shall have been executed and
delivered.
Section 2.03 Transfer of Shares and Partnership Interests. Each of the
Sellers agrees that at the Closing, such Seller shall transfer to the Buyer all
of the Interests owned by such Seller by delivering to the Buyer (a) in the
case of the Sellers, other than Azoff and Geddes, (i) one or more stock
certificates representing all of the issued and outstanding shares of Stock
owned by it, duly endorsed in blank or accompanied by duly executed stock
powers in blank and with any necessary transfer stamps affixed thereto and (ii)
certificates (or other evidence
2
satisfactory to the Buyer in its sole discretion) representing all of the
issued and outstanding Partnership Interests and (b) in the case of Azoff and
Geddes, one or more stock certificates representing all of the issued and
outstanding shares of SMI and AJI, as the case may be duly endorsed in blank or
accompanied by duly executed stock powers in blank and with any necessary
transfer stamps affixed thereto.
Section 2.04 Consideration.
(a) Purchase Price. The Interests (which, for purposes of this Section
2.04(a) shall also include the Partner Stock) shall be sold by the
Sellers and shall be purchased by the Buyer for an aggregate purchase
price (the "PURCHASE PRICE") of $16,585,000 plus (ii) the Sellers'
substantiated third-party out-of-pocket costs and expenses (excluding
any internal allocations of costs and expenses to any Affiliate of a
Seller), if any, incurred in connection with the development of the
Camarillo Creek amphitheater (the "AMPHITHEATER") including, without
limitation, expenses, if any, incurred by the Sellers after the
Closing Date, all of which costs and expenses the Sellers represent
are currently reflected in the existing construction plans and budget
(the "CONSTRUCTION BUDGET") for the Amphitheater (the "REIMBURSABLE
COSTS"), which Construction Budget has been provided to the Buyer and
which Construction Budget, from and after the Closing, may only be
amended by the Buyer and the expenditure of which Reimbursable Costs
by any Seller Entity, from and after the Closing, shall be subject to
the prior written approval of the Buyer (unless incurred in accordance
with the Construction Budget prior to the Closing Date).
(b) Form of Consideration. The Purchase Price shall be paid to the
Sellers by delivery of (i) $16,585,000 in cash by wire transfer of
immediately available funds at the Closing, (ii) reimbursement of the
applicable Seller in cash by wire transfer of immediately available
funds at the Closing of the Reimbursable Costs incurred by such Seller
prior to the Closing and set forth in part (b) of Section 2.04, and
(iii) reimbursement of the applicable Seller in cash by certified or
cashier's check of the Reimbursable Costs within 30 days after receipt
by the Buyer of receipts, invoices and/or other written documentation,
in form and substance reasonably satisfactory to the Buyer, of the
Reimbursable Costs for which a Seller is entitled to reimbursement,
but only to the extent such Reimbursable Costs have not been paid
pursuant to clause (ii) of this Section 2.04(b).
(c) Allocation of Purchase Price. The Purchase Price will be allocated
among the Partnership Interests (which, for purposes of this Section
2.04(c) shall also include the Partner Stock) and the Stock of each of
the Companies in accordance with part (c) of Schedule 2.04.
3
Section 2.05 [Intentionally Omitted.]
Section 2.06 Conveyance and Transfer. The parties hereto agree that
the purchase and sale of the Interests (which, for purposes of this Section
2.06, shall also include the Partner Stock) shall be effected by bills of sale,
stock powers, endorsements, deeds, assignments and other instruments of
transfer, all in such form as may be reasonably requested to vest in the Buyer
ownership of the Interests (which, for purposes of this Section 2.06, shall
also include the Partner Stock).
Section 2.07 Certain AOn the Closing Date, the Sellers that own a
direct or indirect interest in ▇▇▇▇/▇▇▇▇▇▇▇▇ Ltd., Inc. ("▇▇▇▇/▇▇▇▇▇▇▇▇") and
the 51% Sellers shall cause ▇▇▇▇/▇▇▇▇▇▇▇▇ to transfer and assign to the Buyer,
free and clear of all Liens and for no additional consideration, all of the
assets of ▇▇▇▇/▇▇▇▇▇▇▇▇ which are or have been used in any of the Businesses
(the "E/C ASSETS"). Such assignment and transfer shall be effected by
assignments and other instruments of transfer, all in such form as may be
reasonably requested to vest in the Buyer ownership of the E/C Assets.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers represents and warrants to the Buyer as to (i)
such Seller (which, for purposes hereof, shall include, in the case of Geddes
and Azoff, AJI and SMI, respectively), and (ii) each of the Companies (which,
for purposes hereof, shall include CAMP) in which such Seller owns any Interest
but not as to any other Seller or any Company in which such Seller does not own
any Interest, that:
Section 3.01 Organization, Good Standing and Qualification.
(a) Each of SMI, AJI, CAMP and ▇▇▇▇/▇▇▇▇▇▇▇▇ and each Subsidiary is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and is duly
licensed or qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the nature of the
business transacted by it or the character of the property owned or
leased by it makes such licensing or qualification by it necessary.
(b) PSP is duly organized, validly existing and in good standing as a
limited partnership under the laws of the State of California and is
duly licensed or qualified to do business as a foreign limited
partnership and is in good standing in each jurisdiction in which the
nature of the business transacted by it or the character of the
property owned or leased by it makes such licensing or qualification
by it necessary.
(c) IMA is duly organized and validly existing as a general
partnership under the laws of the State of California and is duly
licensed or qualified to do business as a foreign general partnership
and is in good standing in each jurisdiction in which
4
the nature of the business transacted by it or the character of the
property owned or leased by it makes such licensing or qualification
by it necessary.
(d) Part (d) of Schedule 3.01 sets forth a correct and complete list
of the jurisdictions of incorporation of each of SMI, AJI, CAMP and
the Subsidiaries and all jurisdictions in which each Company or CAMP
is licensed or qualified to do business. (e) Each Trust is duly
organized, validly existing and in good standing as a revocable trust
under the laws of the State of California.
Section 3.02 Authority. Each of SMI, AJI and CAMP and each Subsidiary
has all requisite corporate power and authority, PSP has the requisite limited
partnership power and authority, IMA has the requisite general partnership
power and authority, and the Trusts and the Trustees thereof have the requisite
power and authority, to own and operate its properties and to carry on its
business as it is now being conducted. Each of Azoff, Geddes and ▇▇▇▇▇▇ has the
legal capacity to execute and deliver this Agreement and each of the other
Documents to which he is or will be a party, and to perform his obligations
hereunder and thereunder. Each of SMI and AJI has all requisite corporate power
and authority, PSP has the requisite limited partnership power and authority
and each Trust and each trustee thereof has the requisite power and authority
to execute and deliver each of the Documents to which it is or will be a party,
and to perform its obligations hereunder and thereunder. The execution and
delivery by each of SMI, AJI, PSP and each of the Trusts (or the trustees
thereof) of each of the Documents to which it is or will be a party and the
consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action. Assuming the due authorization,
execution and delivery hereof and of any Documents to be executed by the Buyer,
this Agreement constitutes, and each of the Documents to be executed by a
Seller, SMI or AJI, upon execution and delivery thereof by such Person, will
constitute, a legal, valid and binding obligation of such Person, in each case
enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency and similar laws affecting the rights and remedies of creditors and
secured parties generally and general principles of equity.
Section 3.03 Capitalization.
(a) Each of AJI, SMI and CAMP and each Subsidiary is authorized to
issue the amount and class of shares of its capital stock set forth on
part (a) of Schedule 3.03. The number of issued and outstanding shares
of capital stock of each of AJI and SMI and each Subsidiary as of the
date hereof is as set forth on part (a) of Schedule 3.03. Neither CAMP
nor any Subsidiary has any series or classes of capital stock
authorized or issued and outstanding, except as set forth in part (a)
of Schedule 3.03, nor are any shares of any such corporation's capital
stock held in treasury.
(b) The partners of IMA are as set forth in part (b) of Schedule 3.03.
5
(c) There are no issued or outstanding bonds, debentures, notes or
other indebtedness of any Company or of CAMP which has the right to
vote (or which is convertible into other securities having the right
to vote) on any matters on which stockholders (or, in the case of IMA,
partners) of any Company or of CAMP may vote ("VOTING Debt"). There
are no outstanding or authorized subscriptions, warrants, options,
contracts, rights (preemptive or otherwise), calls, commitments or
demands of any character relating to any (i) authorized and issued or
unissued shares of capital stock of any Subsidiary or of CAMP or (ii)
partnership interests in IMA, or outstanding securities, obligations,
rights, Voting Debt or other instruments convertible into or
exchangeable for such stock or interests, or which obligate any
Company or CAMP to seek authorization to issue additional shares of
any class of stock or partnership interests or Voting Debt, nor will
any be created by virtue of this Agreement or the transactions
contemplated hereby.
(d) All of the outstanding shares of capital stock (or, in the case of
IMA, all of the outstanding general partnership interests) of each
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are owned beneficially and of record by the
Sellers and AWC Acquisition Corp. ("AWC"), a Delaware corporation and
wholly-owned subsidiary of TBA Entertainment Corporation, a Delaware
corporation ("TBA"), as set forth in part (d) of Schedule 3.03 hereto,
and, as to the Sellers, free and clear of all Liens, and are not
subject to, nor have they been issued in violation of, any preemptive
rights and, except for the general partnership interests in IMA, no
personal liability is attached to the ownership thereof. All of the
outstanding shares of capital stock of CAMP have been duly authorized
and validly issued, are fully paid and nonassessable and are owned
beneficially and of record by West Coast Amphitheater Corp. free and
clear of all Liens, and are not subject to, nor have they been issued
in violation of, any preemptive rights and no personal liability is
attached to the ownership thereof.
Section 3.04 Subsidiaries. Except as set forth on Schedule 3.04, no
Company owns, beneficially or of record, or controls, directly or indirectly,
any capital stock, securities convertible into or exchangeable for capital
stock or any other ownership or participation interest in any corporation,
association, partnership, joint venture, limited liability company or other
entity. Certain of the Sellers and the 51% Sellers collectively own,
beneficially and of record, all of the outstanding shares of capital stock of
▇▇▇▇/▇▇▇▇▇▇▇▇, as set forth on Schedule 3.04.
Section 3.05 No Default; Non-Contravention. Neither the execution and
delivery by any of the Sellers of this Agreement or any of the Documents to
which it is a party nor the consummation by it of the transactions hereby and
thereby contemplated shall (a) constitute any violation or breach of such
Seller's certificate of incorporation, by-laws, trust agreement or other
governing documents or (b) (i) subject to the receipt of the consents listed on
Schedule 3.06, constitute a default under or a breach of, or result in the
acceleration of any obligation under, any provision of any contract, lease,
mortgage or other instrument to which any Seller or Company is
6
a party or by which it is bound or by which any of the Businesses, Companies or
any of the Interests or any of the assets of any Company or CAMP or any of the
E/C Assets may be affected; (ii) violate any Governmental Rule directly or
indirectly affecting any Seller, CAMP or any Company, or any of the Businesses,
E/C Assets or Interests; (iii) result in the creation of any Lien on any of the
assets of any Company, any of the E/C Assets or on any of the Interests (which,
for purposes hereof, shall include the Partner Stock); or (iv) result in the
termination of any license, franchise, lease or Permit to which any Seller or
Company is a party or by which it is bound.
Section 3.06 Consents and Approvals. Except for all filings and the
termination of the waiting period under the HSR Act and as set forth on
Schedule 3.06, no authorization, approval, order, license, permit, franchise or
consent and no registration, declaration, notice or filing by or with any
Governmental Body or other party is required for the execution and delivery by
any Seller of this Agreement or any other Document or the consummation by any
such party of the transactions contemplated hereby and thereby.
Section 3.07 Personal Property.
(a) The Companies and CAMP have good and marketable title to all of
the personal property, tangible and intangible, reflected in the
Financial Statements for the year ended December 31, 1997, free and
clear of all Liens of every nature, other than Permitted Liens. The
assets of the Companies and CAMP, together with the E/C Assets, (i)
are adequate for the conduct of the Businesses as presently conducted
and comprise the capacity and right to perform the same services in
the same manner as presently being performed by the Companies and CAMP
and (ii) represent all of the "at risk" music and concert production
or promotion businesses in the greater Los Angeles, California area
and the business involved in the development of the Amphitheater
conducted by the Sellers. The representations made in clause (ii) of
the preceding sentence are made neither by nor with respect to Azoff.
(b) By acquiring the Companies and CAMP (through the acquisition of
the Interests and the interests of AWC in the Companies), the Buyer is
acquiring all of the Sellers' assets used by the Companies and CAMP in
the Businesses and no other material assets, other than the E/C
Assets, are needed to conduct the Businesses as the same are presently
conducted. The tangible assets of the Companies and the E/C Assets are
in good working order, ordinary wear and tear excepted, and except
where the failure to be in such condition in any one instance or in
the aggregate would not have a Material Adverse Effect on any Company
or any Business. None of the Companies have any assets which are not
used in the Businesses.
(c) The E/C Assets are listed on Schedule 3.07 hereto. The transfer of
the E/C Assets pursuant to Section 2.07 has been duly authorized by
all necessary action. ▇▇▇▇/▇▇▇▇▇▇▇▇ has all requisite corporate power
and authority to own and operate the E/C Assets and to carry on its
business as it is now being conducted.
7
▇▇▇▇/▇▇▇▇▇▇▇▇ has all requisite corporate power and authority to
execute and deliver documentation evidencing the transfer by it to the
Buyer of the E/C Assets and to perform its obligations thereunder.
Assuming the due authorization, execution and delivery thereof by the
Buyer, if applicable, each such document will constitute a legal,
valid and binding obligation of ▇▇▇▇/▇▇▇▇▇▇▇▇, in each case
enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency and similar laws affecting the rights and
remedies of creditors and secured parties generally and general
principles of equity.
Section 3.08 Real Property.
(a) CAMP and each Company has good and marketable title, free and
clear of all Liens, to all of its real properties, except for (i)
Permitted Liens and (ii) Liens noted on the title commitment attached
hereto as Exhibit A.
(b) Set forth in part (b) of Schedule 3.08 is a list of all of the
real property owned, leased or licensed by each Company and CAMP
(collectively, the "REAL PROPERTY"). Neither any Seller nor
▇▇▇▇/▇▇▇▇▇▇▇▇ owns, leases or licenses any real property used in any
Business. All of the licenses, leases and subleases set forth in part
(b) of Schedule 3.08 are in full force and effect, free of
subtenancies and other occupancy rights.
(c) All Real Property which is leased or licensed by a Company or CAMP
is subject to a valid and binding lease or license agreement which is
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy and other laws affecting the
enforceability of creditors' rights generally or laws governing the
availability of specific performance or other equitable remedies. A
true and complete copy of each such lease agreement has been delivered
or made available to the Buyer. Each of CAMP and each Company which is
a party to any such lease or license agreement has performed all of
its obligations required to be performed by it thereunder, and no
default exists under any provision thereof, nor has any event occurred
thereunder which, with the lapse of time or the giving of notice or
both, would constitute a default thereunder by any party thereto.
(d) Part (d) of Schedule 3.08 sets forth a correct and complete list
of all Permits currently held by any of the Companies or CAMP with
respect to the Real Property. Neither any Seller nor ▇▇▇▇/▇▇▇▇▇▇▇▇
holds any Permits with respect to the Real Property. No Seller Entity
has received any notice of any violation or revocation of any of such
Permits nor, to any such party's knowledge, has any such revocation
been threatened.
(e) There are no special or other assessments for public improvements
or otherwise now affecting the Real Property nor are any such
assessments pending nor do any of the Seller Entities know of any
proposed, contemplated or
8
threatened special or other assessments affecting the Real Property
that may result in special or other assessments affecting the Real
Property.
(f) The Real Property and the current use, occupation and condition
thereof do not violate any Permits or Contracts or any applicable deed
restrictions or other covenants, restrictions or agreements, site plan
approvals, zoning or subdivision regulations or urban development
plans applicable to the Real Property or any other Governmental Rules
applicable to the Real Property.
(g) All roads bounding the Real Property are public roads.
(h) Except as set forth in part (o) of Schedule 3.08 and in the Option
Agreement and except for the Permits and approvals set forth on
Schedule 1 to the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ attached
hereto as Exhibit B, no subdivision or other approvals of any
Governmental Body relating to the Real Property are necessary in
connection with the transactions contemplated hereby.
(i) There has been no condemnation or taking of any part of the Real
Property and no condemnation or taking is pending or, to the knowledge
of the Seller Entities, threatened.
(j) No Seller Entity has received any notices (i) from any
Governmental Body alleging any fire, health, safety, building,
pollution, environmental, zoning or other violation of law with
respect to the Real Property which has not been corrected as of the
date hereof, or (ii) from any insurance company concerning the
discontinuation or potential discontinuation of any insurance coverage
on the Real Property.
(k) All real property Taxes due on or with respect to the Real
Property (and, if payable by any Seller Entity as a tenant on leased
properties, real property Taxes due on or with respect to such leased
properties) and all pending Tax certiorari proceedings with respect to
the Real Property owner, in whole or in part, directly or indirectly,
by any Seller Entity, are set forth in part (k) of Schedule 3.08.
(l) Except as set forth in part (l) of Schedule 3.08, other than the
Companies and CAMP, there are no parties in possession of the Real
Property and there are no parties with any use or other possessory
rights covering all or any portion of the Real Property. (m) There are
no security deposits under any leases for Real Property, except as set
forth in part
(m) of Schedule 3.08.
(n) To the knowledge of each Seller Entity, no tax lot of any other
party encroaches on the Real Property.
9
(o) Sufficient parking facilities for current use and satisfaction of
applicable Governmental Rules exist with respect to the Real Property,
and, except as set forth in part (o) of Schedule 3.08, such facilities
are in adequate condition to be used as such and the Companies and
CAMP possess and are transferring to the Buyer hereunder, all of their
right, title and interest therein, including, without limitation, the
leases and Permits with respect thereto.
(p) (i) There is no building system with respect to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Amphitheater which is not in working order. (ii) Except as set forth
in part (p) of Schedule 3.08, there is no physical damage to the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Amphitheater in excess of $25,000 for which there is no
insurance in effect covering the full cost of restoration. (iii) There
are no structural defects relating to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Amphitheater
which would prevent the use of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Amphitheater in the
manner in which it is intended to be used by the Buyer. (iv) Except as
set forth in part (p) of Schedule 3.08, there is no current renovation
or restoration or tenant improvement to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Amphitheater, the cost of which exceeds $25,000. Buyer shall be solely
responsible for the repairs and improvements referred to on part (p)
of Schedule 3.08.
Section 3.09 Litigation. Set forth on Schedule 3.09 is a complete and
accurate list of all litigations in which the Seller Entities or ▇▇▇▇/▇▇▇▇▇▇▇▇
are currently involved (which, in the case of the Sellers and ▇▇▇▇/▇▇▇▇▇▇▇▇,
relate to the Businesses, the E/C Assets, the Interests, CAMP or the
Companies), regardless of size, merits or whether covered by insurance.
Schedule 3.09 also contains an accurate and fair summary of each such
litigation, including the description of the claims, the perceived merit
thereof, the name of counsel to the Seller Entities or ▇▇▇▇/▇▇▇▇▇▇▇▇, as
applicable, the court in which the action is pending, the amount of any damage
claim, whether the claim is covered by insurance, the relevant deductible with
respect thereto and whether the premiums have been paid to date on the
applicable policy. Except as specifically noted on Schedule 3.09, (i) there are
no legal actions, suits, proceedings, arbitrations, controversies or
investigations (whether or not purportedly on behalf of or against any Seller
Entity or ▇▇▇▇/▇▇▇▇▇▇▇▇) pending or, to the knowledge of each Seller Entity,
threatened or contemplated, by any Governmental Body or other party against any
Seller Entity or ▇▇▇▇/▇▇▇▇▇▇▇▇ in any way relating to or affecting CAMP, or any
of the Interests (which, for purposes hereof, shall include the Partner Stock),
any of the Companies, any of the Businesses, any of the E/C Assets or the
transactions contemplated by this Agreement and (ii) neither ▇▇▇▇/▇▇▇▇▇▇▇▇ nor
any of the Seller Entities is a party to or subject to any judgment, order,
writ, injunction or decree in any way relating to or affecting CAMP, or any of
the Interests (which, for purposes hereof, shall include the Partner Stock),
any of the Companies, any of the E/C Assets or the Businesses or the
transactions contemplated by this Agreement.
Section 3.10 Intellectual Property. Schedule 3.10 sets forth a correct
and complete list and brief identification of all assets of the Companies and
▇▇▇▇/▇▇▇▇▇▇▇▇ utilized in or relating to the marketing, advertising and
commercial exploitation of the products and services of the Businesses, and all
patents, patent rights, unpatented inventions, trademarks, trade names, service
marks, copyrights and other similar proprietary rights (in each case, whether
registered or
10
not) and all applications therefor which patents, patent rights, unpatented
inventions, trademarks, trade names, service marks, copyrights and other
similar proprietary rights are presently or were ever used in the Businesses
(the "INTELLECTUAL PROPERTY"). CAMP does not own any Intellectual Property. No
interest in any Intellectual Property or any manufacturing process, know-how or
trade secrets used in any of the Businesses has been assigned, transferred or
licensed to any third party. Each of the Companies owns or possesses licenses
or other rights to use all Intellectual Property, manufacturing processes,
know-how and trade secrets necessary to conduct the Businesses as now operated.
To the knowledge of the Seller Entities, the use of the Intellectual Property
and such manufacturing processes, know-how and trade secrets in connection with
the Businesses does not infringe upon the rights of any third party. There are
no suits, claims or assessments pending or, to the knowledge of any Seller
Entity, threatened relating to the use of the Intellectual Property or such
manufacturing processes, know-how and trade secrets. No Seller Entity is aware
of any pending or threatened cancellation or revocation of any agreement
granting to any Company rights to any of the Intellectual Property,
manufacturing process, or know-how of others used in the Businesses. Except as
set forth in Schedule 3.10, no person is entitled to any payment in connection
with any Intellectual Property, manufacturing process or trade secret used in
the Businesses.
Section 3.11 Contracts.
(a) Schedule 3.11 contains a complete and correct list of all
contracts, arrangements, leases, licenses and agreements as in effect
on the date hereof (the "CONTRACTS") to which CAMP or any Company is a
party, including evidences of indebtedness, whether written or oral,
talent agreements, venue agreements, purchase or sale agreements,
agency or advertising contracts, sponsorship agreements, agreements
with employees, sales representatives and distributors, and agreements
with factors, banks or other lending institutions, except for the
leases and licenses for Real Property and the licenses of Intellectual
Property listed on Schedule 3.08 and Schedule 3.10, respectively, and
except for any Contract which does not involve a payment by or to a
Company of more than $7,500. The Contracts are all of the contracts,
arrangements, licenses, leases and agreements relating to the
Businesses. A true and complete copy of each written Contract listed
on Schedule 3.11, and a complete and correct summary of each oral
Contract listed on Schedule 3.11, has heretofore been provided or made
available to the Buyer. CAMP or the Company which is a party to a
Contract has performed all of its obligations required to be performed
by it, has paid all payments, advances and royalties required to be
paid by it and is not in default under any Contract, and no event has
occurred thereunder in each case which, with the lapse of time or the
giving of notice or both, would constitute such a default and, no
other party to any Contract is in default thereunder. Each of the
Contracts listed on Schedule 3.11 constitutes a valid, binding,
enforceable and legal obligation of CAMP or the Company which is a
party thereto and the other parties thereto in accordance with its
terms, subject to bankruptcy, insolvency and similar laws affecting
the rights and remedies of creditors and secured parties
11
generally and general principles of equity. No Seller Entity has
received notice that any party to any of the Contracts is in default
thereunder.
(b) Except as set forth in part (b) of Schedule 3.11, none of the
Contracts requires the consent of a third party in connection with the
transactions contemplated hereby.
(c) Except as set forth in part (c) of Schedule 3.11, no Seller Entity
is aware of the assertion by any third party of any claim or potential
claim of breach or default under any of the Contracts or the intention
on the part of any party to any Contract listed on Schedule 3.11 (i)
to terminate or significantly change its existing business
relationship with any of the Companies, CAMP or any of the Businesses
or (ii) to fail to renew or extend its existing business relationship
with any of the Companies, CAMP or any of the Businesses at the end of
the term of any existing contractual arrangement between such third
party and any Company, CAMP or any Business.
Section 3.12 Financial Statements. True and complete copies of the
unaudited balance sheets of each of the Companies as of the years ended
December 31, 1995, 1996 and 1997 and the three month period ended March 31,
1998, and the related unaudited statements of operations for each of the
periods then ended (the "FINANCIAL STATEMENTS") have heretofore been delivered
to the Buyer. The Financial Statements have been prepared in accordance with
GAAP consistently applied throughout the periods covered thereby. The Financial
Statements present fairly the financial condition of each of the Companies as
of the dates for which they were prepared, and the results of operations for
the periods then ended.
Section 3.13 Absence of Liabilities. Except as set forth in the
Financial Statements, or in Schedules 3.08, 3.09, 3.11, 3.13, 3.14, 3.15 and
3.18, neither CAMP nor any Company had, as of the date thereof, any direct or
indirect indebtedness, liability, claim, loss, damage, deficiency or
obligation, fixed or unfixed, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated,
secured or unsecured, accrued, absolute, contingent or otherwise (collectively,
the "LIABILITIES") which individually or in the aggregate exceed $7,500. Except
as otherwise set forth on Schedule 3.13, there are no other Liabilities with
respect to the Companies, CAMP or the Businesses relating to or arising out of
any act, transaction, circumstance or state of facts which occurred or existed
after March 31, 1998, other than those Liabilities arising in the ordinary
course of business consistent with industry and past practice and the terms and
conditions of this Agreement and of the same character, type and magnitude as
incurred in the past and which individually do not exceed $50,000 or, in the
case of Liabilities to any Seller Entity, CAMP or any Affiliate thereof,
$25,000. Neither CAMP nor any Company has any Liabilities other than
Liabilities incurred in connection with the operation of the Businesses.
Section 3.14 Absence of Certain Changes. Since March 31, 1998, except
as set forth on Schedule 3.14, neither CAMP nor any Company has:
(a) failed to maintain its status as a corporation or general
partnership subsisting under the laws of its jurisdiction of
incorporation or organization;
12
(b) declared or made any dividend or any distribution or transfer of
any of its assets, real or personal, tangible or intangible to its
equity holders or any of their Affiliates;
(c) made any capital expenditures or commitments for capital
expenditures, including any capitalized lease obligations (for
purchase of equipment or otherwise), in excess of $25,000 or entered
into or committed to enter into any operating lease in connection with
its assets, real or personal, tangible or intangible, or the
Businesses for any property or equipment calling for net increased
rentals in excess of the lesser of 5% or $25,000 annually per lease
(over present rentals), or acquired any assets or properties with an
individual or aggregate value in excess of $25,000 in connection with
its assets, real or personal, tangible or intangible or the Business
or contracted to do so;
(d) made any advance or investment to or in any individual, firm,
corporation or other entity, whether by loan, purchase of stock or
other securities, by contributions to capital or otherwise;
(e) (i) incurred any Liability relating to the Businesses, other than
those Liabilities arising in the ordinary course of business
consistent with past practice and the terms and conditions of this
Agreement, of the same character, type and magnitude as incurred in
the past and which do not exceed $25,000 in the aggregate or, in the
case of the construction of the Amphitheater, which are consistent
with the existing construction budget for the Amphitheater, or (ii)
accelerated the payment of any Liability;
(f) purchased, acquired, sold, assigned or transferred or entered into
any contract or agreement for the purchase, acquisition, sale,
assignment or transfer of any of its assets which are valued in excess
of $25,000 in the aggregate;
(g) subjected to a Lien, any of its assets, real or personal, tangible
or intangible, other than Permitted Liens;
(h) waived any material rights relating to its assets or the
Businesses, whether or not in the ordinary course of business;
(i) made or suffered, or agreed to make or suffer, any new material
contract, arrangement, lease, license or agreement relating to its
assets or the Businesses or any amendment, modification or termination
of any existing Contract, whether or not in the ordinary course of
business, other than talent agreements entered into the ordinary
course of business and consistent with past practice;
(j) made or entered into any bonus payment or arrangement with any of
its employees, officers or agents or granted any increase in the
compensation or fringe benefits (whether or not provided under or
pursuant to a Plan) of any
13
employee or officer, or taken any action that results in an increase
in the cost of any Plan;
(k) changed any of its business policies, including, without
limitation, advertising, marketing policy, payment, collection, budget
or other material policies, or terminated any of its operations;
(l) altered or revised the accounting principles, procedures, methods
or practices relating to the Businesses or any of the assets or
liabilities with respect thereto, including, without limitation, the
creation or modification of any reserves other than as required by
GAAP;
(m) disposed of or permitted to lapse any Intellectual Property;
(n) entered into any agreements or arrangements or engaged in any
transactions with or made any cash payments to any of the Seller
Entities or their respective Affiliates;
(o) created, suffered or incurred any damage, destruction or loss
(whether or not covered by insurance) or any other event or condition
of any character which could have a Material Adverse Effect on any
Company or CAMP or any of its assets or any of the Businesses;
(p) failed to (i) maintain in full force and effect each Plan (whether
or not listed on Schedule 3.18) in which any employee of CAMP or any
Company participates, (ii) make timely all required contributions
thereto or (iii) administer each such Plan in accordance with its
terms and all applicable laws;
(q) authorized for issuance, issued, or sold any shares of its capital
stock or other securities or ownership interests, acquired directly or
indirectly, by redemption or otherwise, any such capital stock or
other securities or ownership interests, reclassified or split-up any
such capital stock, or granted or entered into any options, warrants,
calls, agreements or commitments of any kind with respect thereto;
(r) made any Tax election or entered into any agreement or settlement
with any Tax Authority that affects or could affect the basis for Tax
purposes of its assets or the timing for Tax purposes of income or
deduction;
(s) effected or caused to occur any "plant closing" or "mass layoff"
as those terms are defined in the WARN Act or taken any action which
caused or is reasonably likely to cause any liability under any other
Governmental Rule affecting any site of employment, facility,
operating unit or employee of any Business; or
14
(t) agreed, whether in writing or otherwise, to take any action
described in this Section 3.14.
Section 3.15 Taxes.
(a) Except as otherwise set forth in part (a) of Schedule 3.15, CAMP
and each of the Companies (and each Seller with respect to CAMP and
the Companies) has filed, within the time and manner prescribed by
law, all Tax Returns that it was required to file. All such Tax
Returns were correct and complete in all material respects. Except as
otherwise set forth in part (a) of Schedule 3.15, all Taxes owed by
CAMP or any of the Companies (whether or not shown on any Tax Return)
have been paid. Except as otherwise set forth in part (a) of Schedule
3.15, neither CAMP nor any of the Companies currently is the
beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by any Tax Authority in a
jurisdiction where CAMP or any of the Companies does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
There are no Liens on any of the assets of CAMP or any of the
Companies that arose in connection with any failure (or alleged
failure) to pay any Tax. All written assessments of Taxes due and
payable by, on behalf of or with respect to each of the Seller
Entities pertaining to CAMP or any of the Companies have been paid by
such party, or, to the extent disclosed to the Buyer in writing prior
to the Closing, are being contested in good faith by appropriate
proceedings and have been reserved against in accordance with GAAP.
(b) The sale of the Partnership Interests shall cause the current
taxable year of IMA to close on the Closing Date pursuant to Treasury
Regulation Section 1.708-1(b)(1)(iii)(b), and shall cause IMA to
terminate solely for U.S. federal income Tax purposes pursuant to
Section 708(b)(1)(B) of the Code. Except as otherwise required by law,
with respect to the Partnership Interests held by ▇▇▇▇▇▇ & ▇▇▇▇, Inc.
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc., for Federal income tax purposes, the current
taxable year of IMA shall end as of the close of the day preceding the
Closing Date, respectively, and, with respect to all other income
taxes, the Sellers will, unless prohibited by applicable law, close
the taxable period of IMA as of the close of the day preceding the
Closing Date. The Sellers and the Buyer shall not take any position
inconsistent with the preceding sentence on any Tax return. Except for
the sale of 51% of the Partnership Interests in IMA to the 51%
Sellers, there has not been any sale, transfer, assignment or other
disposition of any interest in IMA, nor has there been any
distribution by IMA of any assets other than cash.
(c) Camp and each of the Companies has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts
paid or owing by it to each employee, independent contractor,
creditor, stockholder, partner or other third party.
15
(d) Neither CAMP nor any Company nor any director or officer (or
employee responsible for Tax matters) of CAMP or any Company expects
or has reason to expect any Tax Authority to assess any additional
Taxes for any period for which Tax Returns have been filed. There is
no dispute or claim concerning any Tax Liability of CAMP or any
Company either (i) claimed or raised by any Tax Authority in writing
or (ii) as to which any Seller Entity or any director or officer (or
employee responsible for Tax matters) of CAMP or any Company has
knowledge. Part (d) of Schedule 3.15 lists all U.S. federal, state,
local and foreign income Tax Returns filed with respect to CAMP or any
of the Companies for taxable periods ended after December 31, 1992,
and indicates those Tax Returns that have been audited or are
currently the subject of an audit. The Seller Entities have delivered
to the Buyer correct and complete copies of all federal Tax Returns,
examination reports and statements of deficiencies assessed against or
agreed to by CAMP or any Company for any period subsequent to December
31, 1992.
(e) Neither CAMP nor any Company has waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to
a Tax assessment or deficiency.
(f) Neither CAMP nor any Company has filed a consent under Code
Section 341(f) concerning collapsible corporations. Neither CAMP nor
any Company has made any payments, is obligated to make any payments,
or is a party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible under
Code Section 280G. Neither CAMP nor any Company has been a United
States real property holding corporation within the meaning of Code
Section 897(c)(2) during the applicable period specified in Code
Section 897(c)(1)(A)(ii). CAMP and each Company has disclosed on its
federal Tax Returns all positions taken therein that could give rise
to a substantial understatement of federal income Tax within the
meaning of Code Section 6662. No Company is a party to any Tax
allocation or sharing agreement. Neither CAMP nor any Company (i) has
ever been a member of an affiliated group filing a consolidated
federal income Tax Return (other than a group that consisted of only
the Companies or CAMP) or (ii) has any Liability for the Taxes of any
other individual, corporation, partnership or other entity (other than
any of the Companies or CAMP) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local, or foreign law) as
a transferee or successor, by contract, or otherwise.
(g) Part (g) of Schedule 3.15 sets forth the following information
with respect to each Company and CAMP as of the most recent
practicable date: (i) the basis of each Company and CAMP in its
assets; (ii) the basis of each of the Sellers in its Interests, and of
each of the Companies in its subsidiary's stock or partnership
interests (or the amount of any excess loss account); (iii) the amount
of any net operating loss, net capital loss, unused investment or
other credit, unused foreign
16
tax, or excess charitable contribution allocable to any such party;
and (iv) the amount of any deferred gain or loss allocable to each
party arising out of any deferred intercompany transaction.
(h) The unpaid Taxes of CAMP and the Companies (i) did not, as of
April 30, 1998, exceed the reserve for Tax liabilities (rather than
any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of the
most recent balance sheet (rather than in any notes thereto) included
in the Financial Statements and (ii) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of CAMP and the Companies
in filing their Tax Returns.
Section 3.16 Compliance with Laws. Schedule 3.16 sets forth a correct
and complete list of all Permits of any Governmental Body presently held by the
Companies and by CAMP in connection with the Businesses. Neither ▇▇▇▇/▇▇▇▇▇▇▇▇
nor any Seller holds any Permits in connection with any of the Businesses. The
Permits listed in Schedule 3.16 constitute all Permits which are required in
order to allow the Companies and CAMP to continue to carry on the Businesses
and use their assets and properties with respect thereto as now conducted. Each
Seller Entity, to the extent applicable, is in compliance in all respects with
such Permits and all applicable Governmental Rules required to be complied with
in order to allow it to continue to carry on the Businesses and use its assets
as now being conducted and used by it. No Seller Entity has received any
written notification of any failure or asserted failure to comply with any such
Permits or any Governmental Rules nor are any of them aware of any failure or
asserted failure to comply with any such Permits or Governmental Rules.
Section 3.17 Employee Matters.
(a) Set forth in part (a) of Schedule 3.17 is a true and complete list
of the name and position of each current employee of each of the
Companies, CAMP and each of the Businesses who earned more than
$20,000 in salary, bonus and overtime and of each independent
contractor and agent who was paid more than $20,000 with respect to
the year ended December 31, 1997 or who is expected to be paid in
connection with services provided to the Companies, CAMP or the
Businesses at least such amount with respect to the year ending
December 31, 1998.
(b) The Companies, the Businesses and CAMP are each in full compliance
with all applicable Governmental Rules respecting employment and
employment practices, terms and conditions of employment, wages and
hours and non-discrimination in employment and is not engaged in any
unfair labor practice. There are no pending or, to any Seller Entity's
knowledge, threatened disputes, grievances, charges, complaints,
petitions or proceedings involving the employees of CAMP or any of the
Companies or Businesses or any collective bargaining representatives,
and neither CAMP nor any of the Companies or Businesses has suffered,
nor is there pending or, to any Seller Entity's knowledge, threatened,
any strike, lockouts or general work stoppages which have caused or
would cause a cessation of operations of any Business or any facility
of such Business, nor is
17
any such strike, lockout or work stoppage pending or threatened.
Neither CAMP nor any of the Companies or Businesses has been the
subject of any orders to show cause, notices of debarment or
administrative proceedings relating to its employment practices.
(c) Except as disclosed in part (c) of Schedule 3.17, none of the
employees of CAMP, the Businesses or the Companies is covered by a
collective bargaining agreement.
(d) The Seller Entities are in compliance with their respective
obligations pursuant to the WARN Act and all other notification and
bargaining obligations arising under any Governmental Rule or
otherwise with regard to employees of the Businesses.
Section 3.18 Employees and Related Agreements; ERISA.
(a) Except as set forth in part (a) of Schedule 3.18, neither any of
the Companies nor any ERISA Affiliate maintains or contributes to, or
has any obligation to contribute to or, during the last six years, has
maintained, contributed to or been obligated to contribute to, and
neither any of the Companies nor any ERISA Affiliate has any liability
(including, without limitation, a liability arising out of an
indemnification, guarantee, hold harmless or similar agreement) with
respect to, any Plan. No severance pay policy or procedure is
maintained by any of the Companies or CAMP which does or could apply
to employees of any of the Companies or the Businesses in any form,
whether written or unwritten, and whether or not disclosed to one or
more employees. All Plans identified in part (a) of Schedule 3.18 are
in compliance in all material respects with the applicable provisions
of ERISA, the Code and the Plan documents.
(b) Neither any of the Companies nor any ERISA Affiliate maintains,
contributes to or is obligated to contribute to, or, during the last
six years, has maintained, contributed to or been obligated to
contribute to, any Single Employer Defined Benefit Plan and, except as
set forth in part (b) of Schedule 3.18, neither any of the
Companies nor any ERISA Affiliate maintains, contributes to or is
obligated to contribute to or, during the last six years, has
maintained, contributed to or been obligated to contribute to, any
Multiemployer Plan or any Multiple Employer Plan or multiple employer
welfare arrangement as defined in Section 3(40) of ERISA.
(c) No event has occurred in connection with which CAMP or any of the
Companies or any Plan identified in Schedule 3.18 or any "plan
administrator" (as defined in Section 3(16) of ERISA) thereof,
directly or indirectly, is or could be subject to liability, other
than for routine claims for benefits, contingent or otherwise, or any
lien, whether or not perfected, under the terms of any Plan or under
ERISA, the Code or any other law, regulation or governmental order
applicable to any Plan at any time maintained or contributed to by any
of the
18
Companies or any ERISA Affiliate, including, without limitation,
Sections 302(f), 404, 406, 409, 502(c)(1), 502(c)(3), 502(g),
502(i), 502(1), 601, 602, 603, 604, 605, 606, 607, 608, 4062,
4063, 4064, 4068, 4069, 4071 or 4201 of ERISA, or Sections 412(n),
4971, 4975, 4976, 4980B or 5000 of the Code, or under any agreement,
instrument, statute, rule of law or regulation pursuant to or under
which CAMP or any of the Companies has agreed to indemnify or is
required to indemnify any person against liability incurred under, or
for a violation or failure to satisfy the requirements of, any such
statute, regulation or order. No Plan listed in Schedule 3.18 is
subject to Section 302 of ERISA or Section 412 of the Code.
(d) All payments and contributions due from the Companies or CAMP
under each Plan identified in Schedule 3.18 have been made and all
amounts properly accrued to date as liabilities of CAMP or the
Companies which have not been paid have been or will, prior to the
Closing Date, have been properly recorded on the books of CAMP and the
Companies and, to the extent not theretofore paid, will be reflected
as a liability on Schedule 3.18 hereto.
(e) No Welfare Benefit Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured) with
respect to any current or former employee of CAMP or any of the
Companies or the Businesses beyond his or her retirement or other
termination of service other than (i) coverage mandated by applicable
law or (ii) disability benefits that have been fully provided for by
insurance or otherwise.
(f) The transactions contemplated by this Agreement will not result in
any payment or series of payments by the Buyer, CAMP or any of the
Companies to any person of an "excess parachute payment" within the
meaning of Section 280G of the Code.
(g) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any employee or former employee of CAMP
or any of the Companies or the Businesses to severance pay,
unemployment compensation or any other payment except as expressly
provided in this Agreement or (ii) result in any prohibited
transaction described in Section 406 of ERISA or Section 4975 of the
Code for which an exemption is not available.
(h) There has been delivered or made available to the Buyer with
respect to each Plan identified in Schedule 3.18:
(i) A copy of the annual report (with accompanying
schedules and exhibits), if required under ERISA, which has
been filed with respect to such Plan for the two most
recently completed plan years. The information contained in
such report (including such schedules and exhibits) is true
and complete and there has been no material adverse change in
the condition of such Plan, financial or otherwise, since the
date thereof;
19
(ii) A copy of the actuarial report, if any, with
respect to each such Plan for the last two years. The
information contained therein, and the information furnished
by the administrator of such Plan or by any of the Companies
or any ERISA Affiliate in connection with the preparation
thereof, is true and complete and there has been no material
adverse change therein since the date thereof;
(iii) A copy of the most recent summary plan
description, together with each Summary of Material
Modifications with respect thereto, required under ERISA with
respect to such Plan, all material employee communications
relating to such Plan, distributed within the last 12 months
and a true and complete copy of such Plan together with any
current filings with the Internal Revenue Service;
(iv) If such Plan is funded through a trust or any
third party funding vehicle, a copy of the trust or other
funding vehicle and the latest financial statements thereof;
and
(v) The most recent determination letter received
from the Internal Revenue Service with respect to each Plan
that is intended to qualify under Section 401 of the Code.
(i) Neither any of the Companies nor any ERISA Affiliate has made any
agreement, understanding or promise, whether written or oral, to
create, establish, sponsor, maintain or contribute, directly or
indirectly, to or under any additional Plan for the benefit of current
or former employees of CAMP, the Companies or the Businesses nor,
except as set forth in part (i) of Schedule 3.18, to amend or modify
any existing Plan identified in Schedule 3.18 in any manner not
reflected in the plan documents of such Plan delivered or provided to
the Buyer on or before the date hereof.
(j) Each Plan to which any of the Companies or any ERISA Affiliate
contributes or has any obligation to contribute which is intended to
be qualified under Section 401 of the Code, has received a favorable
determination letter from the Internal Revenue Service with respect to
such qualification and with respect to the exemption from tax of the
trusts created thereunder under Section 501(a) of the Code, or will
within the appropriate remedial amendment period under Section 401(b)
of the Code, apply for such letter, and nothing has occurred that has
affected or is likely to affect adversely such qualification or
exemption since the date of any such letter with respect to each Plan.
(k) All material reports and other information required under ERISA or
any other applicable law or regulation to be filed in respect of any
Plan by the administrator thereof or by any of the Companies or any
ERISA Affiliate on or prior to the date hereof with the relevant
governmental authority and/or distributed or made available to any
Plan participant and beneficiary (including "alternate payees", as
20
such term is defined in Section 206(d)(3)(K) of ERISA), as the case
may be, have been filed, distributed or made available in accordance
with ERISA or such other applicable law or regulation, as the case may
be, and all such reports and other information are true and complete
in all material respects as of the date given.
(l) Neither CAMP nor any of the Companies has entered into any
agreement, written or otherwise, relating to any Plan providing
medical benefits obligating CAMP or any of the Companies or its
successor in interest to make any supplemental or retrospective
premium payments for the current or any prior contract period in the
event of adverse experience, termination of the minimum premium
arrangement or termination of an insurance contract relating to such
Plan.
(m) There are no claims, lawsuits, arbitrations or other actions
pending or threatened against any of the Companies or any ERISA
Affiliate or any administrator, trustee or other fiduciary of any Plan
listed on Schedule 3.18 with respect to any Plan listed on Schedule
3.18. No prohibited transaction has occurred under any such Plan.
(n) No Plan listed on Schedule 3.18 is under audit or investigation by
the Internal Revenue Service or the U.S. Department of Labor or any
other governmental body, and no completed audit or investigation, if
any, has resulted in the imposition of any tax or penalty.
(o) There are no leased employees within the meaning of Section 414(n)
of the Code who perform services for CAMP or any of the Companies or
the Businesses.
Section 3.19 Environmental Compliance.
(a) (i) Hazardous Substances have not been generated, used, treated,
handled, stored, released or disposed of, on, at, from, under or about
(x) any property or facility now or previously owned, operated or
occupied by any Seller Entity (or any of its predecessors) and used in
connection with the Businesses or by the Companies or CAMP (or any of
their predecessors), (y) any property or facility now or previously
owned, operated or occupied by any Affiliate of any Seller Entity (or
any of its predecessors) and used in connection with the Businesses or
by the Companies or CAMP (or any of their predecessors) or (z) the
property on which the Amphitheater is to be built (collectively, the
"PREMISES"), or transported to or from such Premises, except in
compliance with Environmental Laws, (ii) the activities, operations
and business carried out at or on the Premises by the Seller Entities,
their Affiliates and their predecessors, including, but not limited
to, the business conducted at the Premises or any past or ongoing
alterations or improvements at the Premises is, and has been at all
times in compliance with all Environmental Laws, and with all
agreements with governmental agencies, court orders, and
administrative orders regarding
21
Environmental Laws and Environmental Conditions at or relating to the
Premises, and (iii) no further action is required to remedy any
Environmental Condition or the violation of any Environmental Law.
(b) Except as set forth on Schedule 3.09, there are no pending, and no
Seller Entity is aware of any threatened, litigations or proceedings
before any Governmental Body arising under any Environmental Law, or
the existence of any Environmental Condition at, from or caused by
operations now or previously conducted at the Premises or by the
Businesses, and no Seller Entity has (i) received any notice of and
has no actual or constructive knowledge that any third party,
Governmental Body or any employee or agent thereof, has determined or
has alleged, threatens to determine or requires an investigation under
any Environmental Law to determine that there exists any Environmental
Condition or any violation of any Environmental Law, or the presence,
release, threat of release, or placement on, at, under or about the
Premises, or the use, handling, manufacturing, generation, production,
storage, treatment, processing, transportation or disposal of any
Hazardous Substances on, at, under, from or about the Premises; (ii)
received any notice under the citizen suit provision of any
Environmental Law in connection therewith; or (iii) other than with
respect to the environmental surveys to be performed on behalf of the
Buyer in connection with the Acquisition, received any request for
inspection or request for information, notice, demand, administrative
inquiry or any formal or informal complaint or claim with respect to
or in connection with any Environmental Condition or any Environmental
Law, including, without limitation, any Environmental Law referring or
relating to Hazardous Substances relating to the Premises or any
facilities, operations or activities conducted thereon or any business
conducted by any Company or any of its predecessors.
(c) No Lien has been imposed or asserted on any assets of any Seller
Entity by any Governmental Body or other person in connection with any
Environmental Law or Environmental Condition.
(d) CAMP and each Company (i) has all Permits required pursuant to any
Environmental Laws necessary for its activities and operations of its
Business and for any past or ongoing alterations or improvements at
any Premises, (ii) is not in violation of any such Permits and has
applied for renewals where necessary and (iii) such Permits are
assignable to the Buyer or will not terminate or lapse as a result of
the consummation of the Acquisition.
(e) No storage tanks presently exist on, at, under or about any
Premises, or, to the knowledge of any Seller Entity, previously
existed on, at, under or about any Premises, or, to the knowledge of
the Seller Entities, are located on any adjoining property.
(f) The Seller Entities have heretofore delivered to the Buyer copies
of all documents, records, and information in the possession or
control or, to the Seller
22
Entities' knowledge, available to the Seller Entities concerning
Environmental Conditions relevant to the Businesses, the Premises, any
predecessors and/or any facilities or operations of the Companies,
CAMP or the Businesses, whether generated by a Seller Entity or
others, including, without limitation, environmental audits,
environmental risk assessments, or site assessments of the Premises
and/or any adjacent property or other property in the vicinity of any
Premises owned or operated by any Seller Entity or others,
documentation regarding offsite disposal of Hazardous Substances,
reports and correspondence (the "ENVIRONMENTAL DOCUMENTS").
(g) The Businesses have been operated in compliance with all
Governmental Rules regarding so-called noise pollution. CAMP and each
of the Companies has all Permits required pursuant to any applicable
Governmental Rules necessary for its activities and operations of its
Business, is not in violation of any such Permits and has applied for
renewals where necessary and such Permits are assignable to the Buyer
or will not terminate or lapse as a result of the consummation of the
Acquisition. There are no pending, and no Seller Entity is aware of
any threatened, litigations or proceedings before any Governmental
Body in which any person or entity alleges the violation of any
Governmental Rule regarding noise or seeks, directly or indirectly, to
revoke or limit the relevant Permits or the activities of the
Businesses with respect to such matter.
Section 3.20 Insurance. CAMP and each Company has reasonably adequate
insurance coverage for its assets and the operations of the Businesses owned or
operated by it. Set forth on Schedule 3.20 is a complete and correct list of
all policies of insurance carried by CAMP and each Company or pursuant to which
such party is named beneficiary or pursuant to which its assets or its Business
are currently insured or have been insured for the past five years and a brief
description of each such policy, including, without limitation, the
identification of the insured, the amount and purpose of the insurance and the
amount of the deductible. True and complete copies of all such policies have
been delivered or made available to the Buyer. All of such policies are in full
force and effect; all premiums due and payable in respect of such policies have
been paid in full; and there exists no default or other circumstance which
would create the substantial likelihood of the cancellation or non-renewal of
any such policy. The Seller Entities have notified such insurers of any claim
known to them which they believe is covered by any such insurance policy and
have delivered to the Buyer a copy of any such claim.
Section 3.21 Accounts Receivable. All accounts receivable of CAMP and
the Companies arose from bona fide transactions in the ordinary course of
business of the Businesses, represent credit extended in a manner consistent
with the historic trade and credit practices of the Businesses and industry
practice.
Section 3.22 Transactions with Affiliates. Except as set forth in
Schedule 3.22, no Seller Entity is, nor for the past year has been, a party to,
bound by, benefited from, or obligated under, any agreements, understandings,
indebtedness, obligation or any other transaction with
23
any other Seller Entity relating to CAMP, the Companies, the Businesses, the
E/C Assets or the Interests (which, for purposes hereof, include the Partner
Stock).
Section 3.23 Finder's Fees. Neither ▇▇▇▇/▇▇▇▇▇▇▇▇ nor any Seller
Entity has incurred any liability for finder's or brokerage fees or agent's
commissions in connection with this Agreement or the transactions hereby
contemplated.
Section 3.24 Absence of Certain Business Practices. All tickets sold
in connection with the operation of the Businesses are sold in conformity with
all venue agreements, all talent agreements and industry practice, and are sold
in compliance with all Governmental Rules and solely through nationally
recognized ticket outlets or the Business itself, and not to or through ticket
brokers or scalpers, and no Seller Entity authorizes, or is aware of, the
withholding of any tickets from public on-sale availability for the purpose of
making such tickets available to ticket brokers or scalpers. The Businesses and
the Companies have established, and are in compliance with, policies and
procedures to ensure the foregoing.
Section 3.25 Certain Payments. No Seller Entity, nor any director,
officer, agent, partner or employee thereof or any other person associated with
or acting for or on behalf of such Seller Entity has directly or indirectly (a)
made or agreed to make any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment (whether in cash or otherwise) to any
person, private or public, regardless of form, whether in money, property, or
services, in violation of any applicable law, rule or regulation (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of any Seller Entity or (iv) to
pay for any lobbying or similar services or (b) established or maintained any
fund or asset that has not been recorded in the books and records of such
Seller Entity.
Section 3.26 Disclosure. No representations or warranties made by the
Seller Entities in this Agreement and no statement contained in any Document
(including, without limitation, the schedules hereto and thereto), certificate,
or other writing to be executed and delivered by any of the Seller Entities or
▇▇▇▇/▇▇▇▇▇▇▇▇ pursuant to the provisions hereof or the transactions
contemplated hereby, contains or will contain any untrue statement of material
fact, or omits or will omit to state any material fact necessary in light of
the circumstances under which it was made, in order to make the statements
herein or therein not misleading.
Section 3.27 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Without limiting any other
representations or warranties contained in Article III:
(a) Based upon the advice of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Los
Angeles, California, the Seller Entities do not believe that the
Amended and Restated Agreement Re Ground Lease, dated October 1, 1991
between The Irvine Company and IMA, is in force or effect or that the
indemnification obligations of the parties thereto are enforceable.
That certain Ground Lease dated as of March 1, 1997 between The Irvine
Company and IMA (the "GROUND LEASE"), is in full force and effect and
has not been modified or amended by either party thereto (except for
the modifications contained in the consent of the Irvine Company
24
delivered in connection with the transactions contemplated hereby).
Neither party is in default under such agreement.
(b) Except for the litigation described under the subheading "▇▇▇▇▇▇
▇▇▇▇▇▇▇ Amphitheater" on pages 2 and 3 of Schedule 3.09, there is no
pending or threatened litigation or other challenge to the validity of
the Ground Lease or to the tenant's estate and rights thereunder.
Based upon the advice of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Los Angeles,
California, the Seller Entities do not believe that the claims and
challenges of Lion Country Safari are likely to result in the
demolition of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater or are meritorious.
(c) Except as disclosed in part (p) of Schedule 3.08 and part (o) of
Schedule 3.14, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater and related
improvements have not been damaged in any material respect by fire or,
to any Seller Entity's knowledge, earthquake, or other casualty and
neither such improvements nor their site is the subject of any pending
or, to the knowledge of any Seller Entity, threatened condemnation or
similar proceeding.
(d) Except as disclosed in part (p) of Schedule 3.08 and part (o) of
Schedule 3.14, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater, related improvements,
parking facilities, and roadways comply in all material respects with
all relevant zoning, subdivision, land use, environmental, seismic,
building code and similar Governmental Rules (after giving effect to
any "grandfathering" or similar provision of any Governmental Rule
which, as applied to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater, would require
different compliance than for any structure currently under
construction). No notices of violations of any nature have been issued
or threatened.
(e) The Sellers have delivered to the Buyer true and complete copies
of all plans and specifications, engineering reports, studies and
consultant's reports and made available all correspondence files and
other relevant information in its possession concerning the physical
aspects and the operation of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater.
(f) Except for the consent of The Irvine Company, as lessor under the
Ground Lease, no third-party consent (from any Governmental Body or
any other Person, other than such consents previously received by the
Sellers and which remain in full force and effect) is required in
connection with the transfer of ownership and control of IMA (and its
material assets, including without limitation, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
amphitheater) to the Buyer (or an Affiliate of the Buyer) as
contemplated by this Agreement. All costs and expenses payable to The
Irvine Company associated with such consent shall be paid by the
Sellers.
(g) Conditional Use Permit 80 CP 0358 (i) is in full force and effect,
(ii) has not been modified and (iii) does not materially affect or
limit the use or operation of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater as the
same has been historically used and operated. No Seller Entity has any
reason to believe that there will be any
25
material change in the manner in which said Permit is enforced. All of
the terms set forth in said Permit have been materially complied with
and are currently being materially complied with and no Seller Entity
has received a notice of default thereunder.
(h) The operation of El Toro Marine Base, as currently and
historically operated, has not materially and adversely affected the
operation of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater, as currently and
historically operated, and none of the Seller Entities has any
knowledge of any change or proposed change in the operation of El Toro
Marine Base that is reasonably likely to materially and adversely
affect the use and operation of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater in the
manner in which it is intended to be operated. Other than speculation
in news reports that El Toro Marine Base may be converted to
residential or civil aviation use, the Seller Entities have no
knowledge of any future non-military use of El Toro Marine Base.
(i) Wild Rivers, a California general partnership, will approve the
form of reciprocal easement agreement regarding parking, ingress,
egress and drainage at the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ amphitheater, a copy of
which is attached hereto as Exhibit C, as required in connection with
the City of Irvine's approval of the subdivision maps with respect
thereto, and the Sellers have no reason to believe Wild Rivers will
not approve the form of reciprocal easement agreement. Said reciprocal
easement shall be submitted to the City of Irvine as soon as
practicable and the Sellers have no reason to believe that approval
thereof will not be granted without material changes thereto.
Section 3.28 Camarillo Amphitheater Project. Without limiting any
other representations or warranties contained in Article III:
(a) The Camarillo Amphitheater Option Agreement (the "OPTION
AGREEMENT"), dated as of May 21, 1996, between the County of Ventura
and Camarillo Amphitheater Managing Partners, Inc. ("CAMP"), a
wholly-owned subsidiary of West Coast Amphitheater Corp., is in full
force and effect and, except as disclosed on Schedule 3.11, has not
been amended, modified, transferred or assigned by either party
thereto. Neither party is in default under the Option Agreement nor
does any condition exist which, with the giving of notice, the passage
of time or both, would constitute a default thereunder, except as set
forth in Paragraph 1 of the Camarillo Amphitheater Option Agreement
Extension, dated March 17, 1998. The County of Ventura has not
notified any Seller Entity or CAMP that it intends to nor, to the
knowledge of the Seller Entities and CAMP, has the County of Ventura
threatened to terminate or cancel the Option Agreement. The form of
concession agreement attached to the Option Agreement (the "CONCESSION
AGREEMENT") has not been modified, and CAMP's right under the Option
Agreement to enter into the Concession Agreement and to develop, own
and operate the Project (as hereinafter defined), has not been
challenged by
26
pending or threatened government action or litigation or, except as
disclosed under the subheading "Camarillo Amphitheater" on Schedule
3.09, by similar actions of private parties.
(b) The development and construction of the Amphitheater (the
"PROJECT"), as contemplated by the Option Agreement and the Concession
Agreement, and as described in (i) the plans and specifications
therefor prepared by ▇▇▇ ▇▇▇▇ Associates and dated January 12, 1998,
February 26, 1998 and April 23, 1998 and (ii) the Construction Budget,
can be substantially completed as proposed in, and in accordance with,
such plans and specifications and Budget and for the amounts currently
set forth in the Construction Budget, except as disclosed on the final
pages of the Construction Budget with respect to assets to be leased.
Upon the Closing, the Buyer will be the beneficial owner of the plans
and specifications therefor prepared by ▇▇▇ ▇▇▇▇ Associates.
(c) The plans and specifications for the Project (other than the
redesign of the entrance to the Project to respond to the "wetlands
issue") have been submitted for approval to the County of Ventura and
no Seller Entity has any reason to believe that such plans and
specifications will not be approved without material changes thereto.
(d) The Project, as described in the plans and specifications
therefor, complies in all material respects with all applicable
municipal and regional zoning, subdivision and land use requirements,
except that a portion of the Project site consists of "wetlands" under
federal and state Governmental Rules.
(e) Although a portion of the Project site consists of "wetlands"
under federal and state Governmental Rules, based on advice from the
Sellers land use consultant, the Sellers have no reason to believe
that approval of the Project by the United States Army Corps of
Engineers is required in view of the minimal effect of the Project on
such wetlands.
(f) The letters, dated March 19, 1998 and March 24, 1998,
respectively, between the United States Department of the Interior and
the County of Ventura, copies of which are attached hereto as Exhibits
D-1 and D-2, are the only correspondence known to the Seller Entities
with the United States Department of the Interior and relating to the
Project. No Seller Entity has any reason to believe that the United
States Department of the Interior intends to take any action which
could reasonably be expected to adversely affect the Project, the
development thereof in accordance with the plans and specifications
therefor or the change in control of CAMP to the Buyer or an Affiliate
of the Buyer.
(g) All required environmental impact reports for the Project have
been duly submitted and approved, and, except as disclosed on Schedule
3.09, are not currently subject to pending or threatened litigation or
other challenges by any Governmental Body or private parties.
27
(h) [Intentionally Omitted.]
(i) The Sellers have delivered to the Buyer true and complete copies
of all plans and specifications, studies, consultants' reports and
feasibility analyses and made available all correspondence files and
similar materials and information in their possession or control
relating to the Project.
(j) Except for the consent of Ventura County, no third-party consent
(from any Governmental Body or other Person) is required in connection
with the transfer of ownership and control of CAMP to the Buyer or any
Affiliate of the Buyer as contemplated by this Agreement.
(k) CAMP may exercise the Option Agreement at any time upon executing
the Concession Agreement, notwithstanding that certain ministerial or
non-material changes thereto may be requested or required.
(l) The Sellers have requested the approval of the County of Ventura
to the change in control of CAMP to Buyer or a Subsidiary of Buyer,
have requested such to be placed on the agenda of the May 12, 1998
meeting of the Board of Supervisors of the County of Ventura, and have
no reason to believe that the approval of the Board of Supervisors of
the County of Ventura to such change in control will not be granted at
such meeting, and, in any event, in the form presented, without
conditions.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers that:
Section 4.01 Organization, Good Standing and Qualification. The Buyer
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and is duly licensed or qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the nature of the business transacted by it or the character of the
property owned or leased by it makes such licensing or qualification by it
necessary, other than in such jurisdictions where the failure so to qualify
would not, individually or in the aggregate, have a Material Adverse Effect on
the Buyer and its subsidiaries, taken as a whole.
Section 4.02 Authority. The Buyer has all requisite corporate power
and authority to own and operate its properties and to carry on its business as
it is now being conducted and to execute and deliver this Agreement and each of
the Documents to which it is or will be a party, and to perform its obligations
hereunder and thereunder. The execution and delivery by the Buyer of this
Agreement and each of the Documents to which it is a party and the consummation
by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action of the Buyer. This Agreement
constitutes, and each of the Documents upon execution and delivery thereof will
constitute, the legal, valid and binding obligations of
28
the Buyer, in each case enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency and similar laws affecting the rights and
remedies of creditors and secured parties generally and general principles of
equity.
Section 4.03 No Default; Non-Contravention. Neither the execution and
delivery of this Agreement and all of the other Documents to which the Buyer is
or will be a party nor the consummation of the transactions hereby and thereby
contemplated shall (a) constitute a violation or breach of the Certificate of
Incorporation or By-laws of the Buyer, (b) except as listed in Schedule 4.03
hereto, (i) constitute a default under or a breach of, or result in
acceleration of any obligation under, any provision of any contract, lease,
mortgage or other instrument to which it is a party or by which any of its
assets may be affected or secured, which default, breach or acceleration has
not been waived; (ii) violate any Governmental Rule affecting the Buyer or any
of its assets; (iii) result in the creation of any Lien on any of the assets or
properties of the Buyer; or (iv) result in the termination of any license,
franchise, lease or permit to which the Buyer is a party or by which it is
bound, except in the case of those items specified in clause (b) above which
would not, individually or in the aggregate, limit the ability of the Buyer to
consummate the transactions hereby contemplated or have a Material Adverse
Effect on the Buyer and its subsidiaries taken as a whole.
Section 4.04 Consents and Approvals. Except for the filing and the
termination of the waiting period under the HSR Act and as set forth on
Schedule 4.04, no authorization, approval, order, license, permit, franchise or
consent, and no registration, declaration, notice or filing by or with any
Governmental Body or other party is required in connection with the execution
and delivery by the Buyer of this Agreement and the other Documents to which it
is a party and the consummation by it of the transactions contemplated hereby
and thereby, except such consents as shall have been obtained on or prior to
the Closing Date.
Section 4.05 Finder's Fees. The Buyer has not incurred any liability
for finder's or brokerage fees or agent's commissions in connection with this
Agreement or the transactions hereby contemplated.
ARTICLE V.
PRE-CLOSING COVENANTS OF THE SELLERS
Each of the Sellers agrees as to (i) such Seller (which, for purposes
hereof, shall include, in the case of Geddes and Azoff, AJI and SMI,
respectively), and (ii) each of the Companies (which, for purposes hereof,
shall include CAMP) in which such Seller owns any Interest but not as to any
other Seller or any Company in which such Seller does not own any Interest,
that, subsequent to the date hereof and until the Closing:
Section 5.01 Conduct of Business Except as otherwise consented to or
approved by the Buyer in writing and except as otherwise agreed to herein,
(a) each of the Sellers shall, and shall use their best efforts to
cause each Company, CAMP and ▇▇▇▇/▇▇▇▇▇▇▇▇ to:
29
(i) operate the assets of CAMP, the Companies and
the Businesses and the E/C Assets in the ordinary course and
consistent with prior practice and use best efforts to (A)
preserve the present business organization of CAMP and each
of the Companies intact, (B) keep available the services of
the present officers of CAMP and each of the Companies, (C)
preserve the present relationships of CAMP and each Company
with employees and independent contractors (except to the
extent of voluntary terminations of employment), customers,
patrons and suppliers of the Businesses, (D) maintain in
force, and renew upon expiration, all insurance policies with
respect to its assets and the Businesses, as the same have
been previously represented to the Buyer and (E) maintain in
effect all Permits;
(ii) maintain its books, accounts and records, in
the usual and ordinary manner, and reflect income, expenses,
assets and liabilities in a manner consistent with its past
practices; and
(iii) maintain its assets in good repair, order and
condition and consistent with sound business practice and all
applicable Governmental Rules.
(b) none of the Sellers shall take, and each of the Sellers shall use
its best efforts to prevent any Company, CAMP and ▇▇▇▇/▇▇▇▇▇▇▇▇ from
taking, any action (including, without limitation, by voting its
Interests) which directly or indirectly could adversely affect the
Businesses, the Interests (which, for purposes hereof, shall include
the Partner Stock), the Companies, CAMP, the Acquisition, the E/C
Assets or any of the transactions contemplated hereby.
Section 5.02 Extraordinary Acts.
(a) Without limiting the general applicability of Section 5.01, except
as otherwise consented to or approved by the Buyer in writing or as
otherwise permitted pursuant to Section 5.02(b), none of the Sellers
shall take or agree, whether in writing or otherwise, to take, any
action (including, without limitation, by voting its Interests) which,
directly or indirectly, causes any Company, CAMP or ▇▇▇▇/▇▇▇▇▇▇▇▇ to,
(i) fail to maintain its status as a corporation or
general partnership subsisting under the laws of its state of
incorporation or organization;
(ii) declare or make any dividend or any
distribution or transfer of any of its assets or properties
to its equity holders or any of their Affiliates;
30
(iii) make any capital expenditures or commitments
for capital expenditures, including any capitalized lease
obligations (for purchase of equipment or otherwise) or enter
into or commit to enter into any operating lease for any
property or equipment calling for net increased rentals, or
acquire any assets or properties or contract to do so except
with respect the construction of the Amphitheater but subject
to Section 2.04(a) hereof;
(iv) make any advance or investment either by
purchase of stock or other securities or contributions to
capital of any individual, firm, corporation or other entity;
(v) incur any Liability, other than those
Liabilities arising in the ordinary course of business and
consistent with past practice and the terms and conditions of
this Agreement and of the same character, type and magnitude
as incurred in the past or accelerate the payment of any
Liability;
(vi) purchase, sell, assign or transfer or enter
into any contract or agreement for the purchase, sale,
assignment or transfer of any of its assets or properties or
cancel any debts or claims;
(vii) subject to a Lien any assets, other than
Permitted Liens;
(viii) waive any material rights relating to its
assets, properties or Business, whether or not in the
ordinary course of business;
(ix) make or suffer, or agree to make or suffer, any
new contract or agreement or any amendment, modification or
termination of any existing contract, lease or other
agreement, whether or not in the ordinary course of business
other than talent agreements entered into the ordinary course
of business consistent with past practice;
(x) make or enter into any bonus payment or
arrangement with any of its employees, officers or agents or
grant any increase in the compensation or fringe benefits
(whether or not provided under or pursuant to a Plan) of any
employee or officer;
(xi) change any of its business policies, including,
without limitation, construction plans, advertising,
marketing policy, sales policy, purchasing, payment,
collection, budget or other material policies, or terminate
any of its operations;
(xii) alter or revise its accounting principles,
procedures, methods or practices, including, without
limitation, the creation or modification of any reserves
other than as required by GAAP;
31
(xiii) dispose of or permit to lapse any
Intellectual Property which comprises a part of its assets or
which is used by or in any of the Businesses;
(xiv) enter into any agreements or arrangements or
engage in any transaction with any Seller Entity or its
Affiliates;
(xv) create, suffer or incur any damage, destruction
or loss (whether or not covered by insurance) or any other
event or condition of any character which would have a
Material Adverse Effect on its assets, properties or
Business;
(xvi) fail to maintain in full force and effect each
Plan in which any of its employees participate and timely
make all required contributions thereto and administer each
such Plan in accordance with its terms and all applicable
laws;
(xvii) authorize for issuance, issue, or sell any
shares of its capital stock or other securities or ownership
interests, acquire directly or indirectly, by redemption or
otherwise, any such capital stock, securities or ownership
interests, reclassify or split-up any such capital stock,
securities or ownership interests, or grant or enter into any
options, warrants, calls or commitments of any kind with
respect thereto;
(xviii) make any Tax election or enter into any
agreement or settlement with any Tax Authority that affects
or could affect the basis for Tax purposes of its assets or
the timing for Tax purposes of income or deduction; or
(xix) effectuate a "plant closing" or "mass layoff,"
as those terms are defined in the WARN Act or take any action
that causes, or could reasonably be expected to cause,
liability under any Governmental Rule affecting any site of
employment facility, operating unit or employee of any
Business.
(b) Notwithstanding anything in Section 5.01 or 5.02 to the contrary,
neither CAMP nor any Company shall, and none of the Sellers shall,
directly or indirectly, cause CAMP or any Company to, enter into any
contract, arrangement, lease, license or agreement or any modification
of any Contract (other than talent agreements entered into in the
ordinary course of business and consistent with past practice) which
requires a payment of or to CAMP or a Company in excess of $50,000 or
which has a term of one year or longer without the Buyer's written
consent, which consent shall not be unreasonably withheld. If the
Buyer shall not notify the appropriate Seller Entity of the Buyer's
consent or denial of consent within three business days after the
Buyer's actual receipt of the request for consent, such consent shall
be deemed to have been given.
32
Section 5.03 No Breach of Representations and Warranties. None of the
Sellers shall take any action (or cause, directly or indirectly, ▇▇▇▇,
▇▇▇▇/▇▇▇▇▇▇▇▇ or any Company to take any action) which would cause or
constitute a material breach of any of its representations and warranties set
forth in this Agreement. Each of the Sellers shall, in the event of, or
promptly after the occurrence of, or promptly after obtaining knowledge of the
occurrence of or the impending or threatened occurrence of, any fact or event
which would cause or constitute a breach of any of its representations and
warranties set forth herein at any time after the date hereof and through the
Closing Date, give detailed notice thereof to the Buyer and shall use its best
efforts to prevent or promptly to remedy such breach.
Section 5.04 Access by the Buyer. The officers, employees and
representatives of the Buyer (collectively, the "BUYER REPRESENTATIVES") shall
be permitted access, during usual business hours and as often as may be
reasonably requested, to, and will be permitted to make copies of and extracts
from, the accounts, minute books, other records, books of account, other books,
deeds, leases, title documents, insurance policies, contracts, commitments,
sale orders, purchase orders, Tax Returns, records, files and such other
information relating to the Interests, any of the Companies, their assets,
CAMP, the E/C Assets and the Businesses as the Buyer shall reasonably request.
The Buyer Representatives shall be permitted access, during usual business
hours, and as often as may be reasonably requested, to the premises and
physical properties used in connection, in whole or in part, with or by the
Companies and CAMP. The Buyer Representatives shall be permitted to discuss the
Interests, the affairs, finances and accounts of the Companies, the E/C Assets
and CAMP with the Sellers and with officers and employees of the Companies and
CAMP and, with the consent of the Seller Entities (which consent shall not be
unreasonably withheld or delayed), with distributors, sales representatives,
licensees, licensors, suppliers and customers of the Businesses.
Section 5.05 HSR Act. The Sellers shall cooperate with AWC, TBA and
the Buyer to enable such Persons to file promptly with the United States
Department of Justice and the United States Federal Trade Commission true,
correct and complete copies of its pre-merger notification report forms and any
other information and documents required under the HSR Act in connection with
the transactions contemplated hereby and shall promptly notify the Buyer of any
communications in respect of either filing from the Department of Justice or
the Federal Trade Commission. The Seller Entities shall promptly furnish to the
Buyer (a) copies of all pleadings, notices or other communications received by
them that relate to the transactions contemplated by this Agreement and (b)
true, correct and complete copies of all other information in their possession
as may be necessary for completion of the reports or notifications to be filed
by the Buyer under the HSR Act.
Section 5.06 Consents; Notices; Termination. The Sellers shall use
their best efforts to obtain and deliver to the Buyer written consents, in form
and substance reasonably satisfactory to the Buyer required in connection with
this Agreement or the transactions hereby contemplated. The Sellers or the
Seller Entities shall also deliver all notices to third parties required to be
delivered in connection with the execution of this Agreement and the
transactions hereby contemplated.
33
Section 5.07 Best Efforts. Each of the Seller Entities shall use its
best efforts to effectuate the transactions hereby contemplated and to fulfill
the conditions to the obligations of the Buyer under Article VII of this
Agreement.
ARTICLE VI.
PRE-CLOSING COVENANTS OF THE BUYER
The Buyer agrees that, subsequent to the date hereof and until the
Closing:
Section 6.01 No Breach of Representations and Warranties. The Buyer
shall not take any action which would cause or constitute a material breach of
any of its representations and warranties set forth herein. The Buyer shall, in
the event of, or promptly after the occurrence of, or promptly after obtaining
knowledge of the occurrence or the impending or threatened occurrence of, any
fact or event which would cause or constitute a breach of any of the
representations and warranties set forth herein at any time after the date
hereof and through the Closing Date, give detailed notice thereof to the
Sellers and the Buyer shall use its best efforts to prevent or promptly to
remedy such breach.
Section 6.02 HSR Act. The Buyer shall promptly file with the United
States Department of Justice and the United States Federal Trade Commission
true, correct and complete copies of its pre-merger notification report forms
and any other information and documents required under the HSR Act in
connection with the transactions contemplated hereby and shall promptly notify
the Sellers of any communications with respect to either filing from the
Department of Justice or the Federal Trade Commission. The Buyer shall promptly
furnish to the Sellers (a) copies of all pleadings, notices or other
communications received by it that relate to the transactions contemplated by
this Agreement and (b) true, correct and complete copies of all other
information in their possession as may be necessary for the completion of the
reports or notifications to be filed by the Seller Entities under the HSR Act.
Section 6.03 Consents and Approvals; Notices. The Buyer shall use its
best efforts to obtain and deliver to the Sellers written consents, in form and
substance reasonably satisfactory to the Sellers, required in connection with
this Agreement or the transactions hereby contemplated. The Buyer shall also
deliver all notices to third parties required to be delivered in connection
with the execution of this Agreement and the transactions hereby contemplated.
Section 6.04 Best Efforts. The Buyer shall use its best efforts to
effectuate the transactions hereby contemplated and to fulfill the conditions
to the Sellers' obligations under Article VIII of this Agreement.
ARTICLE VII.
CONDITIONS TO THE OBLIGATIONS OF THE BUYER
All obligations of the Buyer under this Agreement are subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part by the Buyer in its sole
discretion:
34
Section 7.01 Representations and Warranties. The representations and
warranties of each of the Sellers contained in Article III hereof and elsewhere
herein if specifically qualified by materiality, shall be true and correct and,
if not so qualified, shall be true and correct in all material respects in each
case as of the Closing Date, as though such representations and warranties were
made on and as of such date, except for those representations and warranties
which are expressly made as of a specified earlier date.
Section 7.02 Covenants. The Seller Entities shall have performed and
complied in all material respects with all agreements, covenants and conditions
on their part required by this Agreement to be performed or complied with on or
prior to the Closing Date.
Section 7.03 Officer's Certificate. The Buyer shall have received a
certificate of each of the Sellers, dated the Closing Date, certifying to the
fulfillment of the conditions specified in Sections 7.01 and 7.02 hereof.
Section 7.04 Opinion of Counsel. The Buyer shall have received an
opinion of counsel for the Seller Entities, dated the Closing Date, in form and
substance reasonably acceptable to the Buyer and its counsel, which opinion
shall include, without limitation, a zoning opinion (unless a zoning
endorsement satisfactory to the Buyer in its sole discretion is provided by the
Sellers (at their sole expense) to the title coverage for the Real Property)
addressing among other things, public assembly issues.
Section 7.05 Consents. The Buyer shall have received (in form and
substance reasonably satisfactory to it) all approvals set forth in Schedule
3.06 from all Governmental Bodies and other third parties in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions hereby contemplated.
Section 7.06 HSR Act. The Sellers shall have fully cooperated in the
preparation of all pre-merger notification filings required to be made under
the HSR Act pursuant to this Agreement or in connection with the transactions
contemplated by Section 7.17 hereof, all applicable waiting periods thereunder
shall have expired or been terminated without any request from any appropriate
governmental agency for additional information or, if additional information
has been requested, all applicable extended waiting periods shall have expired.
Section 7.07 Legality. No change shall have occurred in any law, rule
or regulation which would prohibit the performance of the obligations of the
Buyer under Article II hereof.
Section 7.08 Injunctions. No court, agency or other authority shall
have issued any order, decree or judgment to set aside, restrain, enjoin or
prevent the performance of the obligations of the Buyer under Article II
hereof. No statute, rule, regulation, executive order, decree or injunction
shall have been enacted, entered, promulgated or enforced by any Governmental
Body of competent jurisdiction which prohibits the consummation of the
Acquisition or any other transaction contemplated hereby.
Section 7.09 Institution of Proceedings. There shall not have been
instituted by any third party any suit or proceeding to restrain or invalidate
this Agreement or the transactions
35
hereby contemplated or seeking damages from or to impose obligations upon the
Buyer by reason of this Agreement or the transactions hereby contemplated
which, in the good faith judgment of the Buyer, would involve expenses or lapse
of time that would materially and adversely affect the purpose and intent of
and cost to the Buyer in entering into this Agreement.
Section 7.10 Title Insurance. The Sellers shall provide the Buyer, at
the Sellers' cost, with a title policy (together with a non-imputation
endorsement and a zoning endorsement acceptable to Buyer) issued by Fidelity
National Title Insurance Company, in the amount of $10 million, insuring IMA's
leasehold interest under the Ground Lease.
Section 7.11 Employment Agreements. The employment agreements between
certain of the Companies and each of ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇ shall
be in full force and effect.
Section 7.12 FIRPTA Certificates. Each Seller shall have delivered to
the Buyer a certificate which states, under penalty of perjury, the taxpayer
identification number and office address of each transferor of Real Property as
well as a statement that such transferor is not a "FOREIGN PERSON" within the
meaning of Section 1445(f)(3) of the Code.
Section 7.13 [Intentionally Omitted.]
Section 7.14 Audited Financial Statements. True and complete copies of
the (i) audited consolidated balance sheets of TBA as of December 31, 1997,
1996 and 1995, and the related audited statements of operations, cash flows and
stockholders' equity for each of the years then ended, all of which have been
certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and (ii) balance sheet and statement of
operations in a consolidating format of the Companies as of December 31, 1997
and a letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated May 5, 1998, with respect thereto
(the "AUDITED FINANCIAL STATEMENTS"), shall have been delivered to the Buyer
and shall be consistent in all material respects with the Financial Statements
for the same periods.
Section 7.15 Consulting Services. The Buyer (directly or through CAMP,
a Company or other Affiliate) shall have entered into a consulting agreement
with Geddes, providing that, among other things, from and after the Closing
Date through the earlier of (i) completion of development of the Amphitheater
or (ii) December 31, 1998, Geddes will provide consulting services to the Buyer
with respect to such development at such times and on such terms as the Buyer
and Geddes may reasonably determine; provided, however, that Geddes shall
assume no liability with respect to such services and the Buyer shall agree to
indemnify Geddes from and against any and all liabilities that may arise with
respect to the development of the Amphitheater, except for liabilities that may
arise with respect to Geddes' gross negligence or willful misconduct or that
are a result of a material misrepresentation by Geddes.
Section 7.16 Certain Events. Without regard to whether or not any
Seller shall have breached any covenant set forth in Article V, neither CAMP
nor any Company nor ▇▇▇▇/▇▇▇▇▇▇▇▇ shall have (i) failed to take any action
described in Section 5.01 or (ii) taken any action described in Section 5.02.
36
Section 7.17 Closing of AWC Transaction. The closing of the purchase
from AWC of the remaining 51% of (i) the issued and outstanding Stock and (ii)
the Partnership Interests shall occur simultaneously with the Closing.
Section 7.18 Releases . The Sellers and the Sellers' employees
designated on Schedule 7.18 shall have executed and delivered to the Buyer
releases in form and substance reasonably satisfactory to the Buyer.
Section 7.19 Trademark Assignment. Each of Geddes and ▇▇▇▇▇▇ shall
have transferred to the Buyer all of his right, title and interest in and to
the trademarks identified on Schedule 7.19.
Section 7.20 Acknowledgement. The Sellers shall have executed and
delivered to the Buyer an acknowledgement in form and substance reasonably
satisfactory to the Buyer relating to the role Geddes and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
played in negotiating both the terms of the Acquisition and the terms of the
51% Acquisition Agreement and certain conflicts of interests of Geddes, Murphy
and ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ due to their positions with TBA and AWC and their interests
hereunder.
Section 7.21 Delivery of Notices. The Buyer shall have received copies
of all notices required (i) to be delivered under any Contract as a result of
or in connection with the transactions contemplated hereunder or (ii) in order
to obtain any permit or license necessary to consummate the transactions
contemplated hereunder, together with evidence of the delivery of all of such
notices, in form and substance reasonably satisfactory to the Buyer.
Section 7.22 Assignment of E/C Assets. ▇▇▇▇/▇▇▇▇▇▇▇▇ shall have
executed and delivered to the Buyer assignments and other instruments of
transfer in form and substance reasonably satisfactory to the Buyer in order to
assign and transfer the E/C Assets to the Buyer. ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS
OF THE SELLERS
All obligations of the Sellers under this Agreement are subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part by the Sellers in their
sole discretion:
Section 8.01 Representations and Warranties. The representations and
warranties of the Buyer contained in Article IV hereof and elsewhere herein
shall be true and correct on and as of the Closing Date as though such
representations and warranties were made on and as of such date, except for
those representations and warranties which are expressly made as of a specified
earlier date.
37
Section 8.02 Covenants. The Buyer shall have performed and complied
with all agreements, covenants and conditions on its part required by this
Agreement to be performed or complied with on or prior to the Closing Date.
Section 8.03 Officer's Certificate. The Sellers shall have received a
certificate of an executive officer of each of the Buyer, dated the Closing
Date, certifying to the fulfillment of the conditions specified in Sections
8.01 and 8.02 hereof.
Section 8.04 Opinion of Counsel. The Sellers shall have received an
opinion of counsel for the Buyer, dated the Closing Date, in form and substance
reasonably acceptable to the Sellers and their counsel.
Section 8.05 Consents. The Seller Entities shall have received (in
form and substance reasonably satisfactory to them) all approvals set forth in
Schedule 4.04 hereto from all Governmental Bodies and other third parties in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions hereby contemplated.
Section 8.06 HSR Act. The Buyer shall have made all pre-merger
notification filings required to be made by them under the HSR Act, all
applicable waiting periods thereunder shall have expired or been terminated
without any request from any appropriate governmental agency for additional
information or, if additional information has been requested, all applicable
extended waiting periods shall have expired.
Section 8.07 Legality. No change shall have occurred in any law, rule
or regulation which would prohibit the performance of any of the Sellers'
obligations under Article II hereof.
Section 8.08 Injunctions. No court, agency or other authority shall
have issued any order, decree or judgment to set aside, restrain, enjoin or
prevent the performance of any of the Seller Entities' obligations under
Article II hereof. No statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or enforced by any
Governmental Body of competent jurisdiction which prohibits the consummation of
the Acquisition or any other transaction contemplated hereby.
Section 8.09 Institution of Proceedings. There shall not have been
instituted by any third party any suit or proceeding to restrain or invalidate
this Agreement or the transactions hereby contemplated or seeking damages from
or to impose obligations upon any of the Sellers by reason of this Agreement or
the transactions hereby contemplated which, in their good faith judgment, would
involve expenses or lapse of time that would materially and adversely affect
the purpose and intent of and cost to the Sellers in entering into this
Agreement.
Section 8.10 Delivery of Consideration. There shall have been
delivered to the Sellers in the respective amounts according to the flow of
funds memorandum submitted by the Sellers to the Buyer the portion of the
Purchase Price to be paid to the Sellers at the Closing pursuant to Section
2.04.
38
Section 8.11 Employment Agreements. The employment agreements between
certain of the Companies and each of ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ shall
be in full force and effect.
Section 8.12 Consulting Services. The Buyer (directly or through a
Company or other Affiliate) shall have entered into a consulting agreement with
Geddes, providing that, among other things, from and after the Closing Date
through the earlier of (i) completion of development of the Amphitheater or
(ii) December 31, 1998, Geddes will provide consulting services to the Buyer
with respect to such development at such times and on such terms as the Buyer
and Geddes may reasonably determine; provided, however, that Geddes shall
assume no liability with respect to such services and the Buyer shall agree to
indemnify Geddes from and against any and all liabilities that may arise with
respect to the development of the Amphitheater, except for liabilities that may
arise with respect to Geddes' gross negligence or willful misconduct or that
are a result of a material misrepresentation by Geddes.
ARTICLE IX.
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 9.01 Tax Matters.
(a) From and after the Closing, each of the Sellers, on the one hand,
and the Buyer, on the other hand, shall cooperate fully with each
other and make available or cause to be made available to each other
for consultation, inspection and copying (at such other party's
expense) in a timely fashion such personnel, tax data, Tax Returns and
filings, files, books, records, documents, financial, technical and
operating data, computer records and other information as may be
reasonably required (i) for the preparation by any of them of any Tax
Returns, elections, consents or certificates required to be prepared
and filed by such parties or any of the Companies (which, for purposes
of this Section, shall include CAMP) or (ii) in connection with any
audit or proceeding relating to Taxes relating to the assets of the
Companies or the Businesses. The Buyer agrees (A) to retain all books
and records with respect to Tax matters pertinent to the Companies
relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent
notified by Buyer or Sellers, any extensions thereof) of the
respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (B) to give the
other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other
party so requests, the Buyer shall allow the other party to take
possession of such books and records.
(b) The Sellers shall prepare or cause to be prepared all sales, use
or other transfer tax returns required to be filed with any taxing
authority relating to the transfer of the Interests (which, for
purposes of this Section, shall include the Partner Stock) to the
Buyer (collectively, "TRANSFER TAX RETURNS"), as well as all income
Tax Returns of the Companies covering the taxable period ending on the
Closing Date
39
and all other (non-income) Tax Returns of the Companies covering any
taxable period (or portion thereof) preceding the Closing Date. In the
case of the Transfer Tax Returns and all other Tax Returns described
in the preceding sentence, at least 25 days prior to the due date
thereof (including extensions), the Sellers shall provide a copy of
such Tax Returns of the Companies, in the form proposed to be filed,
to Buyer for its good faith review and approval. The Buyer shall
provide the Sellers with any comments it has on such Tax Returns at
least 10 days prior to the due date thereof, and if no comments are
provided to the Sellers within such period, shall be deemed to have
approved such Tax Returns. IMA shall make a valid election under
sections 743 and 754 of the Code (and any corresponding provisions of
state and local Tax law as the Buyer requests) on its income Tax
Return for the taxable period ending on the Closing Date. The partners
of IMA shall report the Tax consequences of the sale of the
Partnership Interests consistently with all allocations and Tax basis
adjustments of the Purchase Price made by the Buyer with respect to
the purchase of IMA.
(c) None of the parties hereto shall cause an election to be made, an
accounting method for Tax purposes to be adopted, or a position to be
taken on any Tax Return, or in any Tax Proceeding, other than an
election under sections 743 and 754 of the Code described in (b)
above, that is inconsistent with the provisions of this Agreement. In
addition to the foregoing and not in limitation thereof, the Sellers
shall not, and shall use their best efforts to cause the Companies to
not, without the written consent of the Buyer, cause any election to
be made, or any accounting method to be adopted or any position to be
taken with respect to the assets of the Companies in any Tax Return
that has not yet been filed or in any Tax Proceeding if such election,
method or position is inconsistent with any election, accounting
method or position previously adopted, taken or elected by any
Subsidiary or is inconsistent with any representation herein or
covenant hereunder.
(d) From and after the Closing, the Sellers shall pay and shall
indemnify and hold harmless the Buyer from and against, any and all
Taxes levied by any foreign, federal, state or local Taxing Authority
with respect to the ownership or use of the assets of the Companies or
the conduct of the Businesses on or prior to the Closing Date,
including, without limitation, any and all of any such Seller Entity's
Tax liabilities, whether a direct liability or a joint and several
liability imposed pursuant to Treasury Regulation Section 1.1502-6 or
any comparable provision under foreign, state or local laws by reason
of any Seller Entity having been a member of any consolidated,
combined, unitary or similar group at any time, and the Buyer shall
pay, and shall indemnify and hold harmless the Sellers from and
against, any and all such Taxes with respect to the ownership or use
of such assets or the conduct of the Businesses after the Closing
Date. The 51% Sellers shall be entitled to retain or the Buyer shall
pay the 51% Sellers all refunds of Taxes (whether in the form of
payment, credit or otherwise) from any Taxing Authority to the extent
that such refunds are attributable to the Taxes with respect to the
40
ownership or use of the assets or the conduct of the Businesses on or
prior to the Closing Date. The indemnification agreements of the
Sellers on the one hand, and the Buyer on the other hand, pursuant to
this Section 9.01(d) shall not be subject to Section 11.04(a). The
indemnification agreement of the Sellers under this Section 9.01(d)
shall be subject to Section 11.04(b).
(e) The Buyer will file a consolidated federal income Tax return which
will include the operations of the Companies or the conduct of the
Businesses after the Closing Date.
(f) The Buyers and the Sellers further agree, upon request, to use
their best efforts to obtain any certificate or other documents from
any Governmental Body or any other Person as may be necessary, at no
material cost to the Sellers, to mitigate, reduce or eliminate any Tax
that could be imposed (including, but not limited to, with respect to
the transactions contemplated hereby).
(g) The Buyer and the Sellers further agree, upon request, to provide
the other party with all information that either party may be required
to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
(h) All tax sharing agreements or similar agreements with respect to
or involving the Companies shall be terminated as of the Closing Date
and, after the Closing Date, the Companies shall not be bound thereby
or have any liability thereunder.
(i) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest)
incurred in connection with this Agreement, shall be paid by the
Sellers when due, and the Sellers will, at their own expense, file all
necessary Tax Returns in accordance with Section 9.01(b) and shall
deliver copies of all Tax Returns and other documentation filed with
respect thereto to the Buyer promptly after filing.
(j) [Intentionally Omitted.]
(k) The partners of IMA shall report, for income Tax purposes, 100% in
the aggregate of all taxable income, gain, loss and deductions of IMA
for the taxable year of IMA ending on the Closing Date.
(l) As of the close of the day immediately preceding the Closing Date,
IMA shall have no liability for unpaid Taxes, other than Taxes (if
any) of IMA that have accrued as of such date in the ordinary course
of the Businesses but are not yet due and taxable.
Section 9.02 Bulk Transfer Laws. The Buyer hereby waives compliance by
the Sellers with the provisions of any so-called bulk transfer laws of any
jurisdiction in connection with the sale and transfer of the Interests to the
Buyer. Each of the Sellers agrees to indemnify
41
the Buyer against any and all losses, costs, expenses, liabilities or damages
which may be asserted by third parties against the Buyer as a result of
non-compliance with any such bulk transfer laws. The agreement to indemnify the
Buyer pursuant to this Section 9.02 shall not be subject to Section 11.04(a) of
this Agreement.
Section 9.03 [Intentionally Omitted.]
Section 9.04 Restrictive Covenants.
(a) For the two-year period commencing on the Closing Date, without
the prior written consent of the Buyer, except for ▇▇▇▇▇▇'▇
employment, if any, with the Buyer, the Sellers shall not, directly or
indirectly, as a director, officer, agent, employee, consultant, or
independent contractor, or in any other individual or representative
capacity (i) develop, construct, operate or manage venues within the
greater Los Angeles, California area which shall include, but not be
limited to, Los Angeles, Ventura and Santa ▇▇▇▇▇▇▇ Counties, (ii) act
in any such capacity with any business engaged in the production or
promotion of "at risk" music or concert productions or promotions in
the greater Los Angeles, California area, or (iii) develop, construct,
operate or manage a venue in Portland, Oregon.
(b) It is the intent and understanding of each party hereto that if in
any action before any court or agency legally empowered to enforce
this Section 9.04, any term, restriction, covenant or promise in this
Section 9.04 is found to be unreasonable and for that reason
unenforceable, then such term, restriction, covenant or promise shall
be construed so as thereafter to be limited or reduced to make it
enforceable by such court or agency under applicable law, it being
understood that the parties hereto regard such restrictions as
reasonable and compatible with their respective rights.
(c) Without limiting the right of the Buyer to pursue all other
remedies available for a violation of this Section 9.04, it is agreed
that, because of the unique nature of each Seller's services and in
view of the nature of the Businesses, each Seller acknowledges that a
breach or threatened breach by him of this Section 9.04 will cause the
Buyer irreparable damage and incalculable harm and, accordingly, the
Buyer shall be entitled to seek preliminary and permanent injunctive
and other relief to prevent a violation or continuing violation
hereof, without the necessity of proving damages or the posting of a
bond.
(d) Notwithstanding anything to the contrary contained herein, the
parties hereby acknowledge that Azoff is not bound by the terms of
this Section 9.04.
Section 9.05 Non-Solicitation. For the two-year period commencing on
the Closing Date, no Seller nor any Affiliate of any Seller shall, on his or
its own behalf or on behalf of any other person, partnership, association,
corporation, or other entity, (i) persuade or attempt to persuade any person
providing goods or services to the Buyer, CAMP or any Company not to do
42
business with the Buyer, CAMP or such Company or to reduce the amount of
business it does with the Buyer, CAMP or such Company; (ii) persuade or attempt
to persuade any performer, act or customer not to do business with the Buyer,
CAMP or any Company or to reduce the amount of business it does with the Buyer,
CAMP or such Company; (iii) dissuade or attempt to dissuade any individual who
was a director, officer or employee of CAMP or a Company prior to the date
hereof from hereafter becoming a director, officer or employee of the Buyer or
(iv) hire or solicit any employee of any Company, or any affiliate thereof,
listed on Schedule 9.05 (an "EMPLOYEE") or in any manner, directly or
indirectly, solicit, induce or attempt to persuade or influence any Employee to
leave the employment of a Company or such Affiliate thereof; provided, however,
that (x) Azoff is not bound by the terms of clauses (i), (ii) and (iii) of this
Section 9.05 and (y) nothing in this Section 9.05 shall prevent a Seller from
hiring, or soliciting to hire, any Employee who is terminated by a Company, or
any Affiliate thereof, during such two-year period. The Buyer acknowledges that
employees of the Companies may voluntarily terminate their employment prior to
the Closing Date.
Section 9.06 No-Shop. From the date hereof until the Closing, the
Sellers covenant and agree that no Seller shall, and the Sellers shall use
their best efforts to cause the Companies and CAMP not to, authorize or permit
any Affiliate, officer, director, shareholder or employee of, or any investment
banker, attorney, accountant or other representative retained by, any Seller or
Company to make, solicit, initiate, encourage or respond to a submission of a
proposal or offer from any person or entity (other than the Buyer) relating to
the liquidation, dissolution, recapitalization, merger, consolidation,
acquisition or purchase of all or a material portion of the assets of any
Company or of CAMP, the E/C Assets, or the outstanding equity interests of any
Company, of CAMP or of ▇▇▇▇/▇▇▇▇▇▇▇▇, or other similar transaction or business
combination involving any Company and CAMP (hereinafter collectively referred
to as a "THIRD PARTY OFFER"). The Sellers will, and will cause the Companies,
CAMP and ▇▇▇▇/▇▇▇▇▇▇▇▇ to, immediately cease and cause to be terminated any
contracts or negotiations currently pending with respect to Third Party Offers,
if any.
Section 9.07 [Intentionally Omitted.]
Section 9.08 Subdivision. From and after the Closing, the Sellers will
continue the process of filing subdivision maps with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
amphitheater and obtaining the reciprocal easement agreement relating thereto
or, at the Buyer's option, will assist the Buyer in filing such maps and
obtaining the reciprocal easement agreement relating thereto. All costs and
expenses arising out of filing such maps and obtaining the reciprocal easement
agreement relating thereto, including, without limitation, those costs and
expenses associated with the reciprocal easement required by the City of Irvine
or with amending the Ground Lease, in connection therewith, if necessary, shall
be paid by the Sellers and the 51% Sellers.
Section 9.09 License of Office Space. Notwithstanding any provisions
hereof to the contrary, the Buyer agrees that the Sellers (other than Azoff)
may continue to occupy up to 1,500 square feet of space (the "HOLD-OVER
PREMISES") under that certain lease dated June 12, 1995, between New Avalon
Inc., as tenant, and R&D Building Company, as landlord (as described on
Schedule 3.08 attached hereto), for a period not to exceed 30 days after the
Closing. The Sellers
43
(other than Azoff) shall be obligated to pay for all utilities (including,
without limitation, telephone bills) but shall not be obligated to pay rent.
Except as set forth in the prior sentence, the Sellers (other than Azoff),
jointly and severally, shall indemnify and hold Buyer harmless from any and all
costs, expenses, claims or liabilities arising out of Seller's (other than
Azoff) use of the Hold-over Premises. The foregoing indemnity shall not be
subject to the limitations set forth in Section 11.04(a). The Sellers (other
than Azoff) acknowledge and agree that its vacating the Hold-over Premises is
an essential term of this Agreement and if the Sellers (other than Azoff)
breach such obligation, the Buyer will suffer substantial damages and shall
have available all rights and remedies at law or equity.
Section 9.10 Expenses of the Transaction. Except as otherwise set
forth in this Agreement, each of the parties hereto agrees to pay its own fees
and expenses in connection with this Agreement and the transactions
contemplated hereby. The Sellers hereby covenant and agree that they will not
pay their expenses incurred in connection with the transactions contemplated
hereby (including, without limitation attorneys' and auditors' fees and
expenses) prior to the Closing Date and that subsequent thereto, they shall use
the Purchase Price to pay such expenses.
ARTICLE X.
TERMINATION
Section 10.01 Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual consent of the parties hereto;
(b) by the Buyer, if there has been a material violation or breach by
any of the Sellers of any representation, warranty, covenant or
agreement contained in this Agreement or any failed condition to the
obligations of the Buyer under Article VII hereof and such breach,
violation or failed condition is not cured within a reasonable period,
not to exceed 30 days, after written notice thereof is given;
(c) by any of the Sellers, if there has been a material violation or
breach by the Buyer of any representation, warranty, covenant or
agreement contained in this Agreement or any failed condition to the
obligations of the Sellers under Article VIII hereof and such breach,
violation or failed condition is not cured within a reasonable period,
not to exceed 30 days, after written notice thereof is given;
(d) by the Buyer or by all of the Sellers acting unanimously, if the
Acquisition shall not have been consummated within 10 business days
after the date on which all consents of Governmental Bodies required
to consummate the transactions contemplated by this Agreement shall
have been received (unless (i) the failure to consummate the
Acquisition by such date shall be (A) due to the action or failure to
act of the party or parties seeking to terminate this Agreement or (B)
in any way attributable to the fault of any party seeking to terminate
this Agreement,
44
which fault, for purposes hereof, shall include, without limitation,
the making by any Seller in this Agreement or the Letter Agreement of
any material misrepresentation and the failure by any Seller to make
in this Agreement or the Letter Agreement any statement necessary to
make the statements contained herein or therein not misleading, in
light of the circumstances in which they were made or (ii) the
conditions to the obligations of the non-terminating party or parties
shall not have been satisfied by such date) and the non-terminating
party refuses to close within 30 days of the terminating party's
notice of termination; provided, however, that if the non-breaching
party shall have given the appropriate notice under Article XI hereof
prior to any such termination, then the indemnification provisions set
forth in Article XI hereof shall survive any such termination of this
Agreement as to any party who shall be in breach of this Agreement as
at such date or at any earlier date of the termination of this
Agreement pursuant hereto, unless the survival of such provisions is
specifically waived by the non-breaching party or parties hereto; or
(e) by any party, if (i) the conditions to obligations of such party
or any other party shall have become impossible to satisfy, other than
as a result of its own acts or omissions in violation of its
obligations hereunder or (ii) any permanent injunction or other order
of a court or other competent authority preventing the consummation of
the Acquisition shall have become final and nonappealable.
Section 10.02 Effect of Termination. If this Agreement shall be
terminated pursuant to Section 10.01 hereof, this Agreement shall forthwith
become void and have no effect, without any liability on the part of any party
hereto or its Affiliates, directors, officers or stockholders, other than the
provisions of Article XI and Sections 12.07 and 12.08 hereof; provided,
however, that nothing contained in this Section 10.02 shall be deemed to
constitute a release or waiver by any party of any claim at law or in equity
against another party hereto based on any breach of such party's
representations, warranties, covenants or agreements contained herein.
ARTICLE XI.
INDEMNIFICATION
Section 11.01 Survival of Representations and Warranties. All
representations and warranties made hereby by the parties to this Agreement,
unless waived in writing and notwithstanding any examination by or on behalf of
any party hereto and the consummation of the transactions hereby contemplated,
shall survive for a period of two years after the Closing; provided, however,
that (i) the representations and warranties made in Sections 3.15, 3.17, 3.18
and 9.01 hereto shall survive for the statute of limitations applicable thereto
and (ii) the representations and warranties contained in Section 3.19 shall
survive for a period of four years after the Closing. Notwithstanding the
foregoing, any representation or warranty hereof shall survive the time at
which it would otherwise terminate pursuant to the preceding sentence, if
notice of the inaccuracy or breach thereof or the claim thereunder shall have
been given to the party from whom indemnity may be sought in respect thereof
prior to the expiration of the
45
applicable survival period therefor. All covenants and agreements made hereby
by the parties to this Agreement shall, unless waived in writing, survive the
Closing.
Section 11.02 By the Sellers. Subject to Section 11.04(b), each of the
Sellers agrees to indemnify and hold harmless the Buyer and its directors,
officers, employees and agents (the "BUYER PARTIES") against, and to reimburse
the Buyer Parties on demand with respect to, any and all losses, liabilities,
obligations, suits, proceedings, demands, judgments, damages, claims, expenses
and costs (including, without limitation, reasonable fees, expenses and
disbursements of counsel) (collectively, "LOSSES") which each may suffer, incur
or pay, by reason of (i) the breach by any Seller of any representation or
warranty contained in this Agreement or in any other Document executed by a
Seller and delivered to a Buyer Party pursuant to the provisions of this
Agreement or, (ii) the failure of any Seller to perform any agreement required
hereby or by any other Document .
Section 11.03 By the Buyer. The Buyer agrees to indemnify and hold
harmless the Sellers and their respective directors, officers, employees any
agents (the "SELLER PARTIES") against, and to reimburse them on demand with
respect to, any and all Losses which each may suffer, incur or pay by reason of
(i) the breach by the Buyer of any representation or warranty contained in this
Agreement or in any other Document executed by the Buyer and delivered to the
Sellers pursuant to the provisions of this Agreement, (ii) the failure of the
Buyer to perform any agreement required hereby or any agreement executed
pursuant to the provisions hereof, or (iii) claims and liabilities of the
Companies disclosed in the Financial Statements or on the Schedules hereto or
with respect to the ownership and operation of the Companies on or after the
Closing Date, subject to (A) any right to indemnification to which the Buyer is
entitled with respect thereto hereunder and (B) any and all other rights of the
Buyer hereunder.
Section 11.04 Limitations on Indemnification.
(a) Except as otherwise provided herein, neither the Buyer Parties, on
the one hand, nor the Seller Parties, on the other hand, shall be
entitled to be indemnified pursuant to Section 11.02 or Section 11.03
hereof unless and until the aggregate of all Losses incurred by the
Buyer Parties or the Seller Parties, as the case may be, exceeds
$50,000 and, upon exceeding such amount, the Buyer Parties or the
Seller Parties shall be entitled to be indemnified for all Losses in
excess of such $50,000 threshold on a dollar for dollar basis.
(b) Notwithstanding anything herein to the contrary, the liability of
each Seller for Losses suffered, incurred or paid by Buyer Parties
shall be limited as follows:
(i) Each Seller shall only be liable for Losses which any
Buyer Party may suffer, incur or pay by reason of breaches of
representations or warranties, failures to perform
agreements, or liabilities or debts described in clauses (i),
(ii) or (iii) of Section 11.02 by, of, or in any way relating
to (a) such Seller (and any of its assets) and (b) each of
the Companies in which such Seller has a direct or indirect
ownership interest (and any of its assets) but
46
not as to (x) any other Seller or (y) any of the Companies in
which such Seller has no direct or indirect ownership
interest
(ii) In respect of any Loss described in clause (b) of
Subsection 11.04(b)(i) above, each Seller's liability shall
be limited to a percentage of such Loss equal to such
Seller's percentage direct and indirect ownership interest in
such Company as set forth in parts (a) and (b) of Schedule
3.03.
Section 11.05 Indemnification Procedure for Third Party Claims.
Promptly, and in any event within 30 days after the receipt by any party hereto
of notice of any claim or the commencement of any action or proceeding by a
third party, such party will, if a claim with respect thereto is to be made
against any party obligated to provide indemnification hereunder (the
"INDEMNIFYING PARTY"), give such Indemnifying Party written notice of such
claim or the commencement of such action or proceeding, but any failure to
timely notify the Indemnifying Party shall not relieve the Indemnifying Party
of its obligations hereunder except to the extent it was actually prejudiced
thereby. Upon unconditional and unqualified written acknowledgment of the
Indemnified Party's entitlement to indemnification therefor and if the
Indemnifying Party has sufficient resources to pay any final judgment, such
Indemnifying Party shall have the right, at its option, to settle, compromise
or defend, at its own expense and with its own counsel, any such claim, action
or proceeding involving the asserted liability of the party seeking such
indemnification (the "INDEMNIFIED PARTY"), provided that the Indemnifying Party
shall not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding except with the consent of
the Indemnified Party (which consent shall not be unreasonably withheld or
delayed). If the Indemnifying Party fails to assume the defense of such claim,
action or proceeding within 30 days of receipt of notice of such claim, action
or proceeding, or if at any time the Indemnifying Party shall fail to defend in
good faith any such claim, action or proceeding, the Indemnified Party may
assume the defense thereof and may employ counsel with respect thereto and all
fees and expenses of such counsel shall be paid by the Indemnifying Party, and
the Indemnified Party may conduct and defend such claim, action or proceeding
in such manner as it may deem appropriate, subject, however, to the last
sentence of this Section 11.05. If any Indemnifying Party undertakes to
compromise, settle or defend any such asserted liability, it shall promptly
notify the Indemnified Party of its intention to do so, and the Indemnified
Party agrees to cooperate fully with the Indemnifying Party and its counsel in
the compromise of, or defense against, any such asserted liability. The
Indemnified Party may appoint, at its own expense, associate counsel to
participate in the joint defense of any such matter with respect to which the
Indemnifying Party has undertaken the defense, and the Indemnifying Party may
appoint, at its own expense, associate counsel to participate in the joint
defense of any such matter which the Indemnified Party is defending. No
Indemnified Party shall settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding except with
the consent of the Indemnifying Party (which consent shall not be unreasonably
withheld or delayed).
47
ARTICLE XII.
MISCELLANEOUS
Section 12.01 Further Assurances. Each of the parties agrees and
covenants promptly to execute and deliver, or cause to be executed and
delivered, to each of the other parties such documents or instruments, in
addition to those expressly required by the Agreement to be executed and
delivered, as any of the other parties may reasonably deem necessary or
desirable to carry out or implement any provision of the Agreement and the
transactions contemplated hereby. In addition to the foregoing and not in
limitation thereof, each of the Sellers hereby constitutes and appoints the
Buyer as its true and lawful attorney, with full power of substitution, in the
name of the ▇▇▇▇▇▇▇, ▇▇▇▇/▇▇▇▇▇▇▇▇ and each of them, but for the benefit of the
Buyer, (a) to collect, assert or enforce any claim, right or title of any kind
in or to the Interests or the E/C Assets, to institute and prosecute claims,
actions, suits and proceedings which the Buyer may deem proper in order to
collect, assert or enforce any such claim, right or title, to defend and
compromise all claims, actions, suits and proceedings in respect of any
Interest or any E/C Asset and to do all acts and things in relation thereto as
the Buyer shall deem advisable and (b) to take all such action which the Buyer
may deem proper in order to provide for it the benefits of the Interests or any
E/C Asset including, without limitation, where any required consent of a third
party to the assignment thereof to the Buyer shall not have been obtained. Each
of the Sellers acknowledges that such powers are coupled with an interest and
may not be revoked by it in any manner or for any reason.
Section 12.02 Entire Agreement. This Agreement and the Letter
Agreement, together with all agreements, schedules, exhibits, documents and
other instruments attached hereto or to be delivered hereunder sets forth the
entire understanding between the parties, there are no terms, conditions,
representations, warranties or covenants other than those contained herein and
in such agreements, schedules, exhibits, documents and other instruments
attached hereto or to be delivered hereunder, and all prior agreements,
contracts, promises, representations and statements, if any, among the parties
hereto as to the subject matter hereof, are merged into this Agreement.
Notwithstanding anything to the contrary contained herein, to the extent that
the Letter Agreement and this Agreement are inconsistent, the terms of this
Agreement shall control.
Section 12.03 Notices.
(a) All notices, consents, demands or other communications required or
permitted to be given pursuant to the Agreement shall be in writing
and shall be deemed sufficiently given on (i) the day on which
delivered personally or by telecopy (with prompt confirmation by mail)
during a business day to the appropriate location listed as the
address below, (ii) three business days after the posting thereof by
United States registered or certified first class mail, return receipt
requested with postage and fees prepaid, or (iii) one business day
after deposit thereof for overnight delivery. Such notices, consents,
demands or other communications shall be addressed respectively:
As to the Buyer:
48
SFX Entertainment, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Rosenman & Colin LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
As to Geddes or the Geddes Trust:
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇/The ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Family Trust
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
As to ▇▇. ▇▇▇▇▇:
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇)-▇▇▇-▇▇▇▇
49
As to PSP:
Peach Street Partners, Ltd.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Good, ▇▇▇▇▇▇▇, Hegness & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
As to the ▇▇▇▇▇▇▇▇▇▇▇ Trust:
The ▇▇▇▇▇▇▇▇▇▇▇ Family Trust
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
As to ▇▇▇▇▇▇:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
50
with a copy to:
King, Turtich, Holmes, Paterno, and Berliner
1900 Avenue of the Stars
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
As to all Sellers, a copy to:
▇▇▇▇▇, Tarrant & ▇▇▇▇▇
Citizens Plaza
Louisville, Kentucky 40202
Attention: H. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to any other address or telecopy number which such party may have
subsequently communicated to the other parties in writing in accordance with
the terms of this Section 12.03, except such notice shall only be effective
upon actual receipt by the intended recipient.
(b) Except as otherwise provided in this Agreement, any notice,
consent, demand or other communication given hereunder may be signed
on behalf of a party by any duly authorized representative of that
party.
Section 12.04 Binding Effect; Successors and Assigns. Each and every
representation, warranty, covenant, agreement, indemnification, and provision
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.
This Agreement may not be assigned by any party hereto without the prior
written consent of the other parties hereto, except that the Buyer may assign
this Agreement to any of its Affiliates without the consent of any other party;
provided, however, that in the event of any such assignment the Buyer shall
remain liable for the payment and performance of its obligations hereunder. Any
purported assignment in violation of this Agreement shall be null and void.
Section 12.05 Governing Law. This Agreement and any other agreement
entered into in connection herewith shall be governed by, and construed under
and in accordance with, the laws of the State of New York without giving effect
to the conflict of laws principles thereof.
Section 12.06 Captions. The captions and the table of contents
appearing in this Agreement are inserted only as a matter of convenience and
for reference and in no way define, limit or describe the scope or intent of
this Agreement or any of the provisions hereof.
Section 12.07 Confidentiality of Disclosures. Any corporate
information, records, documents, descriptions or other disclosures of
whatsoever nature or kind made or disclosed by
51
any of the parties to any of the other parties, or to the authorized
representative thereof, or learned or discovered by such other party or by any
representative thereof in the course of the investigations pursuant to the
consummation of the transactions contemplated by this Agreement (whether prior
to or after the date of the execution of this Agreement) and not known by or
available to the public at large, shall be received in confidence and none of
the parties nor any such authorized representative shall disclose or make use
of such information or authorize anyone else to disclose or make use thereof
without the written consent of the other relevant parties hereto, except (a) as
necessary to consummate the transactions contemplated hereby, (b) that the
parties hereto shall continue such communications with directors, employees,
customers, suppliers, franchisees, lenders, lessors, shareholders, partners and
other particular groups as may be legally required or necessary or appropriate
and not inconsistent with the best interests of the other parties for the
proper consummation of the transactions contemplated herein, and (c) as
compelled by judicial or administrative process or by other requirements of
applicable law including any disclosure under federal securities laws;
provided, however, that in the case of any disclosure contemplated pursuant to
this clause (c), the party seeking to disclose such information shall give the
other party or parties reasonable prior written notice thereof in order to
afford such other party or parties reasonable opportunity to seek a protective
order or other limitation under such disclosure.
Section 12.08 Publicity. Any communications and notices to third
parties and all other publicity concerning the transactions contemplated by
this Agreement (other than governmental or regulatory filings) shall be planned
and coordinated by and among each of the parties and shall, to the extent
reasonably practicable, be provided to the other party at least 24 hours prior
to the release of any such publicity. Unless required by applicable law, none
of the parties shall disseminate or make public or cause to be disseminated or
made public any information regarding the transactions contemplated hereunder
without the prior written approval of the other parties, which approval shall
not be unreasonably withheld or delayed.
Section 12.09 Consent to Jurisdiction. With respect to any claim
arising out of this Agreement, each of the parties hereto irrevocably submits
to the non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan, the City
of New York (and of the appropriate appellate courts thereof). In addition,
each of the parties hereto irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any action, suit or proceeding arising
out of or relating to this Agreement brought in such courts, irrevocably waives
any claim that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum and further irrevocably waives the
right to object with respect to such claim, action, suit or proceeding brought
in any such court, that such court does not have jurisdiction over him or it,
as the case may be, or any other party hereto. The parties hereto hereby agree
that process in any such action or proceeding may be served on any party
anywhere in the world, whether within or without the State of New York,
provided that notice thereof is provided pursuant to the provisions of Section
12.03 hereof.
52
Section 12.10 Fees and Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses.
Section 12.11 Third Parties. Other than the parties hereto, no person
shall have any rights under or to enforce any provision of this Agreement.
Section 12.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same agreement.
53
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
SFX ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name:
Title:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
PEACH STREET PARTNERS, LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Partner
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, AS TRUSTEE OF THE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ FAMILY TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name:
Title: Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, AS CO-TRUSTEES OF THE
▇▇▇▇▇▇▇▇▇▇▇ FAMILY TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Trustee
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
SCHEDULE 1.01
Defined Terms
"51% Agreement" means that certain Purchase Agreement, dated as of
even date herewith by and among SFX, TBA and AWC, relating to the purchase of
the 51% of the issued and outstanding Partnership Interests and Stock not owned
by the Sellers.
"51% Sellers" means the Sellers under the 51% Agreement.
"Acquisition" has the meaning ascribed to such term in the third
recital to this Agreement.
"Affiliate" or "affiliate" means, with respect to a specified Person,
a Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the Person
specified.
"Amphitheater" has the meaning ascribed to such term in Section 2.04
hereof.
"Audited Financial Statements" has the meaning ascribed to such term
in Section 7.14 hereof.
"AJI" has the meaning ascribed to such term in Section 2.01.
"AWC" has the meaning ascribed to such term in Section 3.03 hereof.
"Azoff" has the meaning ascribed to such term in the preamble to this
Agreement.
"Businesses" has the meaning ascribed to such term in the second
recital to this Agreement.
"Buyer Parties" has the meaning ascribed to such term in Section 11.02
hereof.
"Buyer Representatives" has the meaning ascribed to such term in
Section 5.04 hereto.
"CAMP" has the meaning ascribed to such term in Section 3.28.
"Closing" has the meaning ascribed to such term in Section 2.02
hereof.
"Closing Date" has the meaning ascribed to such term in Section 2.02
hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute thereto.
"Commission" means the Securities and Exchange Commission.
S-1
"Companies" has the meaning ascribed to such term in the first recital
to this Agreement.
"Concession Agreement" has the meaning ascribed to such term in
Section 3.28 hereof.
"Construction Budget" has the meaning ascribed to such term in Section
2.04 hereof.
"Contracts" has the meaning ascribed to such term in Section 3.11
hereof.
"Documents" means this Agreement and the other documents, instruments
and agreements to be executed and delivered pursuant thereto.
"E/C Assets" has the meaning ascribed to such term in Section 2.07.
"▇▇▇▇/▇▇▇▇▇▇▇▇" has the meaning ascribed to such term in Section 2.07.
"Employee" has the meaning ascribed to such term in Section 9.05
hereof.
"Environment" means soil, surface waters, ground waters, land, stream
sediments, surface or subsurface strata, ambient air, and any environmental
medium.
"Environmental Condition" means (a) any condition with respect to the
Environment on the Premises, whether or not yet discovered caused by activities
conducted or conditions existing on the Premises, which constitutes a violation
of any Environmental Law or which could or does result in any damage, loss,
cost, expense, claim, demand, order or liability to or against the Buyer or any
of its affiliates, directly or indirectly, including, without limitation, any
condition resulting from the ownership or use of any property by any Company or
CAMP or, with respect to the Businesses, any of the Sellers or any of their
respective Affiliates or predecessors or the operation of the Businesses and/or
any activity or operation formerly conducted by any person on the Premises or
(b) the presence, Release or Threat of Release of Hazardous Substances on,
under or from the Premises.
"Environmental Documents" has the meaning ascribed to such term in
Section 3.19 hereof.
"Environmental Laws" means (a) any Governmental Rule regulating or
relating or pertaining to the Environment or the protection of human health,
whether existing as of the date hereof, previously enforced or subsequently
enacted, including, without limitation, the Resource Conservation and Recovery
Act, as amended, the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, or the Federal Clean Water Act, as amended; (b) any
Governmental Rule, whether existing as of the date hereof, that asserts or may
assert jurisdiction over the Sellers or the Premises Facilities or the
operations or activity at the Premises that relates or pertains to the
Environment, including, without limitation, those which regulate the presence,
release, emission, threat of release, use, handling, manufacturing, generation,
production, storage, treatment, processing, transportation or disposal of any
Hazardous Substance, including, but not limited to (i) requiring any permit,
license, approval, consent or authorization, or the renewal thereof, (ii)
regulating the amount, form, manner of storage,
S-2
transport and/or disposal of Hazardous Substances, or (iii) requiring any
reporting, inspection report, business plan, notification, or any other
dissemination of or access to information regarding Hazardous Substances,
including warnings or notices to tenants, subtenants, employees, occupants,
invitees or consumers.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, any successor statute thereto and all final or
temporary regulations promulgated thereunder.
"ERISA Affiliate" means all members of a controlled group of
corporations and all trades and businesses (whether or not incorporated) under
common control and all other entities which, together with any of the
Companies, are treated as a single employer under any or all of Sections
414(b), (c), (m) or (o) of the Code on either the date of this Agreement or the
Closing Date or at any time during the six year period ended on the date of
this Agreement.
"Facilities" means all Real Property now or previously owned by a
Company or CAMP or currently or previously used in connection with the
Businesses.
"Financial Statements" has the meaning ascribed to such term in
Section 3.12 hereof.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.
"Geddes" has the meaning ascribed to such term in the preamble to this
Agreement.
"Governmental Body" means any federal, state, local or foreign
governmental authority or regulatory body, any subdivision, agency, commission
or authority thereof (including, without limitation, environmental protection,
planning and zoning), or any quasi-governmental or private body asserting,
exercising or empowered to assert or exercise any regulatory authority
thereunder and any person directly or indirectly owned by and subject to the
control of any of the foregoing, or any court, arbitrator or other judicial or
quasi-judicial tribunal.
"Governmental Rules" means any statute, law, treaty, rule, code,
ordinance, regulation, permit, certificate or order of any Governmental Body or
any judgment, decree, injunction, writ, order or like action of any
Governmental Body, whether now or hereinafter enacted or in force.
"Ground Lease" has the meaning ascribed to such term in Section 3.27
hereof.
"Hazardous Substances" means (a) any pollutant, toxic substance,
contaminant, chemical, hazardous waste, hazardous material, petroleum product,
oil, radioactive material or energy; (b) any substance, gas material or
chemical which is or may be defined as or included in the definition of
"hazardous substances," "toxic substances," "hazardous materials," "hazardous
wastes," or words of similar import under any Governmental Rule or
Environmental Law; (c) radon gas, asbestos, urea formaldehyde foam insulation
or polychlorinated biphenyls in excess of federal, state or local safety
guidelines, whichever are more stringent; (d) any other chemical, material, gas
or substance, the exposure to or Release of which is or may be prohibited,
limited
S-3
or regulated by any Governmental Body, or (e) any other chemical, material, gas
or substance that does or may pose a hazard to health and/or safety of the
occupants of the Premises, or the owners and/or occupants of property adjacent
to or surrounding the Premises.
"Hold-over Premises" has the meaning ascribed to such term in Section
9.09.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"IMA" has the meaning ascribed to such term in the first recital to
this Agreement.
"Indemnified Party" has the meaning ascribed to such term in Section
11.05 hereof.
"Indemnifying Party" has the meaning ascribed to such term in Section
11.05 hereof.
"Intellectual Property" has the meaning ascribed to such term in
Section 3.10 hereof.
"Interests" has the meaning ascribed to such term in the third recital
to this Agreement.
"Letter Agreement" means that certain letter agreement, dated March 9,
1998, by and among SFX Entertainment, Inc., the Sellers and Pavilion Partners.
"Liabilities" has the meaning ascribed to such term in Section 3.13
hereof.
"Lien" means any mortgage, charge, pledge, lien, security interest,
claim, encumbrance or restriction, of any kind or nature.
"Losses" has the meaning ascribed to such term in Section 11.02
hereof.
"Material Adverse Effect" means a material adverse effect on the
business, assets, prospects, financial condition or results of operations of
the specified entity.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 3(37) or Section 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a single employer pension plan within
the meaning of Section 4001(a)(15) of ERISA which is subject to the provisions
of Sections 4063 and 4064 of ERISA.
"▇▇▇▇▇▇" has the meaning ascribed to such term in the Preamble to this
Agreement.
"Option Agreement" has the meaning ascribed to such term in Section
3.28.
"Partnership Interest" has the meaning ascribed to such term in the
first recital to this Agreement.
"Partner Stock" has the meaning ascribed to such term in Section 2.01.
S-4
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor to the functions thereof.
"Permit" means any permit, license, approval, consent, or
authorization issued by a Governmental Body or required by any Governmental
Rule.
"Permitted Liens" means (i) Liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due or which are
being contested in good faith and for which adequate reserves have been
accounted for in accordance with GAAP (ii) statutory Liens, such as
warehousemen, mechanics and materialmen Liens which arise by operation of law
and are incurred in the ordinary course of business and consistent with past
practice and are for sums not yet delinquent and (iii) as to property leased or
licensed, the Lien attributable to the existence of such lease or license.
"Person" means any individual, corporation, partnership, limited
liability company, limited liability partnership, joint venture, estate, trust,
cooperative, foundation, union, syndicate, league, consortium, coalition,
committee, society, firm, company or other enterprise, association,
organization or other entity or Governmental Body.
"Plan" means any written or unwritten plan, program, arrangement,
agreement or commitment which is a deferred compensation, pension, profit
sharing, savings, thrift or other retirement plan (including, without
limitation, any "employee pension benefit plan" as defined in Section 3(2) of
ERISA), stock purchase, stock option, performance share, bonus or other
incentive or severance pay plan, policy or procedure, or vacation or other
employee benefit plan, program, arrangement, agreement or commitment
(including, without limitation, any Welfare Benefit Plan), other than such
arrangement or arrangements which constitute a payroll practice within the
meaning of 29 C.F.R. ss. 2510.3-1(b).
"Premises" has the meaning ascribed to such term in Section 3.19
hereof.
"Project" has the meaning ascribed to such term in Section 3.28
hereof.
"Purchase Price" has the meaning ascribed to such term in Section 2.04
hereof.
"Real Property" has the meaning ascribed to such term in Section 3.08
hereof.
"Reimburseable Costs" has the meaning ascribed to such term in Section
2.04 hereof.
"Release" means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing,
abandoning or dumping into the Environment.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Entities" means, collectively, the Sellers, the Companies and
CAMP.
"Seller Parties" has the meaning ascribed to such term in Section
11.03 hereof.
S-5
"Sellers" has the meaning ascribed to such term in the preamble to
this Agreement.
"Single Employer Defined Benefit Plan" means an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA which is subject to
Subtitle B of Title IV of ERISA and which is not a Multiemployer Plan.
"SMI" has the meaning ascribed to such term in Section 2.01.
"Stock" has the meaning ascribed to such term in the first recital to
this Agreement.
"Subsidiary" has the meaning ascribed to such term in the first
recital to this Agreement.
"Tax" or "Taxes" means federal, state, local or foreign income,
capital gains, profits, gross receipts, payroll, capital stock, franchise,
employment, withholding, social security, unemployment, disability, real
property, personal property, stamp, excise, occupation, sales, use, transfer,
mining, value added, investment credit recapture, alternative or add-on
minimum, environmental, estimated or other taxes, duties or assessments of any
kind, including any interest, penalty and additions imposed with respect to
such amounts.
"Tax Authority" means any federal, national, foreign, state, municipal
or other local government, any subdivision, agency, commission or authority
thereof, or any quasi-governmental body or other authority exercising any
taxing or tax regulatory authority.
"Tax Proceedings" means any audit, other administrative proceeding or
judicial proceeding pending or threatened involving Taxes
"Tax Returns" mean all returns, information statements and reports
(including schedules attached to any of the foregoing) required to be filed
with or supplied to a Tax Authority with respect to Taxes.
"TBA" has the meaning ascribed to such term in Section 3.03 hereof.
"Threat of Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the Environment which may
result from such Release.
"Transfer Tax Returns" has the meaning ascribed to such term in
Section 9.01 hereof.
"Voting Debt" has the meaning ascribed to such term in Section 3.03
hereof.
"WARN Act" means the Worker Adjustment and Retraining Notification Act
of 1988.
"Welfare Benefit Plan" means an "Employee Welfare Benefit Plan" within
the meaning of Section 3(1) of ERISA.
S-6