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EXHIBIT 10.64
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ASSET PURCHASE AGREEMENT
between
GREEN VALLEY ATHLETIC CLUB LIMITED PARTNERSHIP,
a Delaware limited partnership
and
THE SPORTS CLUB COMPANY, INC.,
a Delaware corporation
Dated as of May 1, 1997
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TABLE OF CONTENTS
PAGE
SECTION 1. PURCHASE AND SALE OF ASSETS. 1
1.1 ASSETS TO BE TRANSFERRED. 1
(a) LEASED REAL PROPERTY. 1
(b) PERSONAL PROPERTY LEASES. 1
(c) MACHINERY AND EQUIPMENT. 2
(d) CONTRACTS. 2
(e) MEMBERSHIP AGREEMENTS. 2
(f) RECORDS AND FILES. 2
(g) TELEPHONE NUMBERS. 2
(h) INVENTORY. 2
(i) PROPRIETARY ASSETS. 2
1.2 EXCLUDED ASSETS. 2
(a) CONSIDERATION. 2
(b) TAX CREDITS. 3
(c) PARTNERSHIP FRANCHISE. 3
(d) TAX RECORDS. 3
(e) LICENSES; PERMITS. 3
1.3 LIABILITIES TO BE ASSUMED. 3
(a) MEMBERSHIP AGREEMENTS. 3
(b) SPECIFIED CONTRACTUAL LIABILITIES. 3
(c) LIABILITIES UNDER LEASES, PERMITS AND LICENSES. 3
1.4 LIABILITIES NOT TO BE ASSUMED. 3
(a) CERTAIN CONTRACTS. 3
(b) TAXES ARISING FROM TRANSACTION. 4
(c) INCOME AND FRANCHISE TAXES. 4
(d) INSURED CLAIMS. 4
(e) LITIGATION MATTERS. 4
(f) TRANSACTION EXPENSES. 4
(g) LIABILITY FOR BREACH. 4
(h) LIABILITIES TO AFFILIATES. 4
(i) VIOLATION OF LAW. 4
(j) INFRINGEMENTS. 4
1.5 PURCHASE PRICE. 4
1.6 DELIVERIES INTO ESCROW. 6
1.7 SELLER'S CONDITIONS TO CLOSING. 7
1.8 PURCHASER'S CONDITIONS TO CLOSING. 7
1.9 CLOSING. 10
1.10 PURCHASE PRICE ALLOCATION. 11
1.11 SALES TAXES. 11
1.12 ACCOUNTING TREATMENT. 11
1.13 TAX CONSEQUENCES. 11
1.14 FURTHER ACTION. 11
1.15 PRORATIONS. 11
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER. 14
2.1 DUE ORGANIZATION; NO SUBSIDIARIES; ETC. 14
2.2 FINANCIAL STATEMENTS. 15
2.3 ABSENCE OF CHANGES. 15
2.4 TITLE TO ASSETS. 17
2.5 MEMBERS. 17
2.6 EQUIPMENT, ETC. 18
2.7 REAL PROPERTY. 18
2.8 PROPRIETARY ASSETS. 19
2.9 CONTRACTS. 19
2.10 COMPLIANCE WITH LEGAL REQUIREMENTS. 19
2.11 GOVERNMENTAL AUTHORIZATIONS. 20
2.12 EMPLOYEE MATTERS; LABOR MATTERS; AND BENEFIT PLANS. 20
2.13 ENVIRONMENTAL MATTERS. 21
2.14 RELATED PARTY TRANSACTIONS. 21
2.15 PROCEEDINGS; ORDERS. 22
2.16 AUTHORITY; BINDING NATURE OF AGREEMENTS. 22
2.17 NON-CONTRAVENTION; CONSENTS. 22
2.18 INFORMATION. 23
SECTION 3. "AS IS"; DUE DILIGENCE COMPLETED; DISCLAIMER OF ADDITIONAL WARRANTIES OF SELLER. 23
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. 24
4.1 DUE ORGANIZATION. 24
4.2 AUTHORITY; BINDING NATURE OF AGREEMENT. 24
4.3 NON-CONTRAVENTION; CONSENTS. 24
SECTION 5. INDEMNIFICATION, ETC. 25
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. 25
5.2 INDEMNIFICATION BY SELLER. 25
5.3 INDEMNIFICATION BY PURCHASER. 26
5.4 NONEXCLUSIVITY OF INDEMNIFICATION REMEDIES. 26
5.5 LIMITATIONS ON INDEMNIFICATION. 26
5.6 DEFENSE OF THIRD PARTY CLAIMS BY SELLER. 27
5.7 DEFENSE OF THIRD PARTY CLAIMS BY PURCHASER. 28
5.8 EXERCISE OF REMEDIES BY INDEMNITEES. 29
SECTION 6. ADDITIONAL COVENANTS AND AGREEMENTS. 29
6.1 INTERIM CONDUCT OF THE BUSINESS. 29
6.2 STANDSTILL BY SELLER. 29
6.3 ACCESS. 29
6.4 PRESERVATION OF BUSINESS AND RELATIONSHIPS. 30
6.5 NO INCONSISTENT ACTION. 30
6.6 INVESTMENT OBLIGATION. 30
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6.7 BULK SALE. 30
6.8 LIQUOR LICENSE. 30
6.9 COMPLIMENTARY MEMBERSHIPS. 31
6.10 [Intentionally omitted] 31
MISCELLANEOUS PROVISIONS. 32
7.1 FURTHER ASSURANCES. 32
7.2 FEES AND EXPENSES. 32
7.3 ATTORNEYS' FEES. 32
7.4 NOTICES. 33
7.5 PUBLICITY; CONFIDENTIALITY. 34
7.6 [INTENTIONALLY OMITTED] 35
7.7 TIME OF THE ESSENCE. 35
7.8 HEADINGS. 35
7.9 COUNTERPARTS. 35
7.10 GOVERNING LAW;. 36
7.11 SUCCESSORS AND ASSIGNS. 36
7.12 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. 36
7.13 WAIVER. 36
7.14 AMENDMENTS. 37
7.15 SEVERABILITY. 37
7.16 PARTIES IN INTEREST. 37
7.17 ENTIRE AGREEMENT. 37
7.18 BROKERS. 37
7.19 CONSTRUCTION. 37
7.21 AUTHORITY TO SIGN. 38
7.22 SURVIVAL POST-CLOSING. 39
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EXHIBITS
Exhibit A: Certain Definitions
Exhibit B: Form of Assignment of Contracts
Exhibit C: Form of Assignment of Leases
Exhibit D: Form of ▇▇▇▇ of Sale
Exhibit E: Form of Restrictive Use Covenant
Exhibit F: Form of IP License
Exhibit G: Form of CC&R Amendment
Exhibit H: Form of ARC Estoppel
SCHEDULES
Schedule 1.1(d) Assumed Contracts
Schedule 1.8(a)(ii) Additional Seller Delivery Items
Schedule 6.6 List of Possible Improvements
Disclosure Schedule
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
May 1, 1997, by and between GREEN VALLEY ATHLETIC CLUB LIMITED PARTNERSHIP, a
Delaware limited partnership ("Seller"), and THE SPORTS CLUB COMPANY, INC., a
Delaware corporation ("Purchaser"). Certain capitalized terms used in this
Agreement are defined on Exhibit A.
RECITALS
A. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from the Seller, (the "Acquisition") substantially all of the assets
used or held for use by Seller in the operation of the Green Valley Athletic
Club located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Club").
B. Seller leases the real property and improvements
(collectively, the "Real Property") constituting a part of the Club from Green
Valley Investment Company, Inc. (the "Fee Owner")
C. Concurrently with the consummation of the Acquisition, and as
a condition thereto, Purchaser intends to purchase the Real Property from the
Fee Owner pursuant to a separate purchase agreement, dated concurrently
herewith, between Purchaser and the Fee Owner (the "Real Property Purchase
Agreement").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, Purchaser, and Seller, intending to
be legally bound, agree as follows
SECTION 1. PURCHASE AND SALE OF ASSETS.
1.1 ASSETS TO BE TRANSFERRED. Subject to the terms and
conditions of this Agreement, on the Closing Date (as hereinafter defined)
Seller shall sell, transfer, convey, assign, and deliver to Purchaser and
Purchaser shall purchase and accept all of the business, rights, claims and
assets (of every kind, nature, character and description, whether real,
personal or mixed, whether tangible or intangible, whether accrued, contingent
or otherwise, and wherever situated) of the Seller, other than the Excluded
Assets (as hereinafter defined) relating to the Club (collectively, the
"Purchased Assets"). The Purchased Assets shall include, but not be limited to,
the following:
(a) LEASED REAL PROPERTY. All of the real
property leases of the Seller, including the leases described on Part 2.7 of
the Disclosure Schedule (the "Real Property Leases"), if any.
b) PERSONAL PROPERTY LEASES. All leases of
machinery, equipment,
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vehicles, furniture and other personal property leased by Seller, including all
such leases (the "Personal Property Leases") described on Part 2.6 of the
Disclosure Schedule.
(c) MACHINERY AND EQUIPMENT. All machinery,
equipment, vehicles, tools, supplies, spare parts, furniture and all other
personal property not included in inventory (other than personal property
leased pursuant to Personal Property Leases) owned, utilized or held for use by
Seller and relating to the Club, including, without limitation, the uninstalled
elevator, the uninstalled washer/drier and the Club's telephone system
($37,133.68 of the Purchase Price being specifically allocated to the purchase
of the telephone system free and clear of all liens, encumbrances or third
party claims).
(d) CONTRACTS. Other than the Membership
Agreements, all Contracts contractual rights, purchase orders and sales orders
(the "Assumed Contracts") of Seller that are listed on Schedule 1.1(d) and
expressly assumed by Purchaser.
(e) MEMBERSHIP AGREEMENTS. All of the Membership
Agreements, including rights to renewals, monthly membership fees subject to
Section 1.15, receivables and other rights related thereto.
(f) RECORDS AND FILES. All membership lists, in
both written format and Seller's customary machine readable format, records,
files, invoices, customer lists, blueprints, specifications, designs, drawings,
accounting records, business records, operating data and other data of Seller,
including without limitation all billing/accounting hardware and software.
(g) TELEPHONE NUMBERS. All local telephone
numbers associated with the Club.
(h) INVENTORY. All inventories of raw materials,
work-in-process and finished goods (including all such in transit) of the
Seller, together with related packaging materials (collectively the
"Inventory").
(i) PROPRIETARY ASSETS. All of Seller's right,
title and interest in any Proprietary Assets, except if and to the extent of
any rights of ANC, Inc. in and to the name "Green Valley" and the logo
identified in Part 2.8 of the Disclosure Schedule.
(j) STATUTE. The bronze statute, entitled "Match
Point", located in front of the Club.
1.2 EXCLUDED ASSETS. The provisions of Section 1.1
notwithstanding, Seller shall not sell, transfer, assign, convey or deliver to
Purchaser, and Purchaser will not purchase or accept the following assets of
Seller (collectively the "Excluded Assets"):
(a) CONSIDERATION. The consideration delivered by
Purchaser to Seller pursuant to this Agreement.
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(b) TAX CREDITS. Federal, state and local income
and franchise tax credits and tax refund claims.
(c) PARTNERSHIP FRANCHISE. Seller's franchise to
be a limited partnership, its certificate of limited partnership, and its books
and records having exclusively to do with its organization and capitalization.
(d) TAX RECORDS. Seller's income and franchise
tax returns and tax records.
(e) LICENSES; PERMITS. All licenses, permits and
approvals of Seller.
(f) CASH AND CASH EQUIVALENTS. All cash and
cash equivalents of Seller.
(g) STATUE. The bronze statue, entitled "Match
Point", located in front of the Club. Seller shall after the date of Closing
remove such statue, at Seller's sole expense, from in front of the Club. Such
removal shall be done so as to disrupt, to the minimum extent reasonably
possible, the daily operations of the Club. Such removal shall include
Seller's restoration of the former site of such statue to its condition
existing before such statue was first placed thereon.
1.3 LIABILITIES TO BE ASSUMED. Subject to the terms and
conditions of this Agreement, on the Closing Date, Purchaser shall assume and
agree to perform and discharge to the extent indicated below the following, and
only the following, specific debts, liabilities and obligations of the Seller
(collectively the "Assumed Liabilities"):
(a) MEMBERSHIP AGREEMENTS. Seller's obligation to
honor and service the Membership Agreements, other than any refunds arising
before Closing, the payment of which shall be the sole responsibility of Seller
and shall be paid by Seller directly.
(b) SPECIFIED CONTRACTUAL LIABILITIES. The
Specified Contractual Liabilities.
(c) LIABILITIES UNDER LEASES, PERMITS AND
LICENSES. Seller's obligations arising from and after the Closing Date under
the Real Property Leases and any of the permits or licenses assigned to
Purchaser at the Closing.
1.4 LIABILITIES NOT TO BE ASSUMED. Except as and to the
extent specifically set forth in Section 1.3, Purchaser is not assuming any
debts, liabilities, obligations or contracts of the Seller and all such debts,
liabilities, obligations and contracts shall be and remain the responsibility
of the Seller. Notwithstanding the provisions of Section 1.3 and without
limiting the generality of the foregoing, Purchaser is not assuming and the
Seller shall not be deemed to have transferred to Purchaser the following
debts, liabilities, obligations and contracts of Seller:
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(a) CERTAIN CONTRACTS. The obligations of the
Seller under and pursuant to any contract or lease (i) that by its terms may
not be assigned by Seller or (ii) that Seller may not assign, without another
party's consent, if such consent has not been obtained. Notwithstanding the
foregoing, however, the equipment leases identified in Part 2.6 of the
Disclosure Schedule shall be assigned to, and assumed by, Purchaser at Closing
regardless of whether the terms of such equipment leases permit such assignment
or whether the consent of any such equipment lessor has then been obtained.
(b) TAXES ARISING FROM TRANSACTION. Any United
States, foreign, state or other taxes applicable to, imposed upon or arising
out of the sale or transfer of the Purchased Assets to Purchaser and the other
transactions contemplated by this Agreement, including but not limited to any
transfer, sales, use, gross receipts or documentary stamp taxes.
(c) INCOME AND FRANCHISE TAXES. Any liability or
obligation of the Seller for Federal income taxes and any state or local
income, profit or franchise taxes (and any penalties or interest due on account
thereof).
(d) INSURED CLAIMS. Any liability of the Seller
insured against, to the extent such liability is or will be paid by an insurer.
(e) LITIGATION MATTERS. Any liability or
obligation with respect to any suits, actions, claims or Proceedings arising
out of or in any way related to the operation of the Club prior to Closing,
whether or not described on Part 2.15 of the Disclosure Schedule.
(f) TRANSACTION EXPENSES. All liabilities, costs,
obligations or expenses incurred by, or on behalf of the Seller in connection
with this Agreement and the transactions contemplated herein.
(g) LIABILITY FOR BREACH. Liabilities and
obligations of the Seller for any breach or failure to perform any of the
Seller's covenants and agreements contained in, or made pursuant to, this
Agreement, or, prior to the Closing, any other Contract, whether or not assumed
hereunder, including any breach arising from assignment of such contracts
hereunder without consent of third parties, unless Purchaser accepts such
assignment with Knowledge that such consent was not obtained.
(h) LIABILITIES TO AFFILIATES. Liabilities and
obligations of the Seller to its Affiliates.
(i) VIOLATION OF LAW. Any liability or obligation
with respect to any violation of or failure to comply with any Legal
Requirement or Order arising out of or in any way related to the Club or its
operations on or before Closing.
(j) INFRINGEMENTS. Any liability to a third party
under the Seller's
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Proprietary Assets.
1.5 PURCHASE PRICE.
(a) As consideration for the sale of Purchased
Assets, at Closing Purchaser shall (i) pay to the Seller a total of
$3,712,133.68 (the "Purchase Price"), and (ii) assume the Assumed Liabilities
by executing and delivering to Seller an Assignment of Contracts (the "Contract
Assignment") in substantially the form of Exhibit B and an Assignment of Leases
(the "Lease Assignment") in substantially the form of Exhibit C. The Purchase
Price shall be payable by Purchaser as follows:
(b) Purchaser has deposited into an interest
bearing escrow (the "Escrow") established with Nevada Title Company ("Deposit
Holder") the sum of $53,850, in immediately available funds (such amount,
together with the interest earned thereon, being hereinafter referred to as the
"Deposit"). The Deposit shall be credited against the Purchase Price.
(c) At Closing, such sum as may be necessary to
make Purchaser's total cash deposit with Deposit Holder equal the Purchase
Price, after giving effect to any and all of Purchaser's and Seller's credits
and debits pursuant hereto, including, without limitation, the Deposit.
(d) [Intentionally omitted]
(e) [Intentionally omitted]
(f) Purchaser and Seller agree that all sums
deposited by Purchaser pursuant hereto shall be invested in treasury bills,
certificates of deposit, short term money market instruments or bank repurchase
contracts approved by Purchaser and Seller, in such manner as to make all such
sums (and the interest earned thereon) available on the date for Closing.
Purchaser and Seller hereby instruct Deposit Holder to so invest such sums and
to return to Purchaser, upon Closing, all sums in excess of those needed to
satisfy Purchaser's obligations hereunder to Seller. Interest earned thereon
shall be for the account of Purchaser, and Purchaser shall provide Deposit
Holder with Purchaser's taxpayer identification number for use in opening the
Escrow.
(g) Any funds to be delivered hereunder shall be
immediately available federal funds wire transferred. It shall be Purchaser's
responsibility to obtain adequate wiring instructions for an escrow account of
Deposit Holder.
(h) If Purchaser has not previously terminated
this Agreement, by written notice to Seller and Deposit Holder pursuant to the
terms and conditions of this Agreement, then the Deposit Holder shall deliver
the Deposit to Seller, in accordance with such wire transfer instructions as
Seller shall give to Deposit Holder, immediately upon the expiration of the Due
Diligence Period. Thereafter, if the Closing shall fail to occur solely
because of the breach of Purchaser under this Agreement, then Seller shall be
entitled to
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retain the Deposit, as liquidated damages and not as a penalty and as Seller's
sole remedy. However, if Closing shall thereafter fail to occur for any other
reason or reasons, then Seller shall return the Deposit promptly to Purchaser
upon Purchaser's request therefor at any time after the scheduled date for
Closing, or on such sooner date as this transaction is cancelled by Purchaser
and Seller. THE PARTIES AGREE THAT THEY HAVE NEGOTIATED WITH REGARD TO THE
DETERMINATION OF DAMAGES AND HAVE CONCLUDED THAT, IF CLOSING FAILS TO OCCUR
SOLELY BECAUSE OF THE BREACH OF PURCHASER UNDER THIS AGREEMENT, THEN IT WOULD
BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO DETERMINE THE SELLER'S DAMAGES, THAT
THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES IN SUCH
EVENT, AND THAT THE SELLER, AS ITS SOLE REMEDY AND NOT AS A PENALTY, SHALL BE
ENTITLED TO RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES HEREBY
ACKNOWLEDGE THAT THEY ARE IN EQUAL BARGAINING POSITIONS, ARE SOPHISTICATED IN
BUSINESS MATTERS AND WERE REPRESENTED BY COUNSEL AT ALL TIMES DURING THE
NEGOTIATION OF THIS LIQUIDATED DAMAGES PROVISION.
__________________________ __________________________
Purchaser Seller
1.6 DELIVERIES INTO ESCROW.
(a) On or before the Closing Date, Seller, shall
deposit the following items (collectively, the "Seller Delivery Items") into
the Escrow:
(i) An estoppel certificate, in form and
substance reasonably acceptable to Purchaser, from each of the Subtenants whose
Subleases are to be an Assumed Contract.
(ii) Four fully executed and notarized
originals of the CC&R Amendment.
(iii) Four duly authorized and fully
executed originals of the ARC Estoppel.
(b) On or before the Closing Date, Purchaser
shall deposit the following items (collectively, the "Purchaser Delivery
Items") into Escrow:
(i) The Purchase Price, subject to and
in accordance with the terms and conditions of Section 1.5.
(c) On or before the Closing Date, Seller and
Purchaser shall deposit the following items (collectively, the "Joint Delivery
Items") into the Escrow:
(i) Four fully executed originals of the
Contract Assignment.
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(ii) Four fully executed and notarized
originals of the Lease Assignment.
(iii) Four fully executed originals of the
▇▇▇▇ of Sale.
(iv) Four fully executed originals of the
license agreement for the proprietary assets referenced in Part 2.8 of the
Disclosure Schedule in the form attached hereto as Exhibit F (the "IP
License").
The Seller Delivery Items, the Purchaser Delivery Items and the Joint Delivery
Items are referred to, collectively, as the "Delivery Items".
1.7 SELLER'S CONDITIONS TO CLOSING.
(a) Seller's obligations to consummate the
Transactions are conditioned upon the following:
(i) All Delivery Items shall have been
deposited into the Escrow.
(ii) All of the representations and
warranties of Purchaser contained herein shall be true and correct in all
material respects on and as of the Closing Date as though remade and
republished as of said date.
(iii) Purchaser shall have performed and
complied with all of its obligations and covenants hereunder in all material
respects.
(b) There is no Proceeding pending or threatened
pertaining to the Transactions or their consummation that shall have been
instituted or threatened by any Governmental Body or Person.
(c) The closing of the purchase and sale of the
Real Property shall have occurred simultaneously with Closing hereunder in
accordance with the Real Property Purchase Agreement. Notwithstanding anything
to the contrary contained in this Agreement, Purchaser and Seller expressly
agree that a proper election by either Purchaser or Seller to terminate this
Agreement at any time in accordance with any of the terms hereof shall be
deemed to be a proper election by Purchaser or the Fee Owner, respectively, to
terminate the Real Property Purchase Agreement and that a proper election by
either Purchaser or the Fee Owner to terminate the Real Property Purchase
Agreement at any time in accordance with any of the terms thereof shall be
deemed to be a proper election by Purchaser or Seller, respectively, to
terminate this Agreement.
(d) Deposit Holder shall hold, for recordation by
Deposit Holder prior to Deposit Holder's recordation of the Lease Assignment,
one fully executed and notarized original of the Restrictive Use Covenant.
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1.8 PURCHASER'S CONDITIONS TO CLOSING.
(a) Purchaser's obligations to consummate the
Transactions are conditioned upon the following:
(i) All Delivery Items shall have been
deposited into the Escrow.
(ii) All items listed on Schedule
1.8(a)(ii) shall have either been delivered to Purchaser or shall be located at
the Club at Closing.
(iii) A State of Nevada business license
and a City of Henderson business license (such two licenses, the "Identified
Approval") shall have been obtained by Purchaser in Purchaser's name so as to
enable Purchaser legally to operate the Club from and after Closing; it being
agreed that Purchaser shall work diligently, with Seller's assistance if and to
the extent reasonably required and at no out-of-pocket cost or liability to
Seller, to obtain all Identified Approvals. The Purchaser's obtaining either a
liquor license for the Club or the consent of any equipment lessor identified
in Part 2.6 of the Disclosure Schedule shall not be a condition precedent to
Purchaser's obligations to consummate the Transactions.
(iv) All of the representations and
warranties of Seller contained herein shall be true and correct in all material
respects on and as of the Closing Date as though republished and remade on and
as of that date; it being expressly understood and agreed, however, that
changes in representations and warranties which do not have a material adverse
effect upon the business of the Club shall in no event be a basis giving rise
to a right of Purchaser to terminate this Agreement pursuant to Section 1.8(c).
(v) Seller shall have performed and
complied with all of its obligations and covenants hereunder in all material
respects.
(vi) The closing of the purchase and sale
of the Real Property shall have occurred simultaneously with Closing hereunder
in accordance with the Real Property Purchase Agreement. Notwithstanding
anything to the contrary contained in this Agreement, Purchaser and Seller
expressly agree that a proper election by either Purchaser or Seller to
terminate this Agreement at any time in accordance with any of the terms hereof
shall be deemed to be a proper election by Purchaser or the Fee Owner,
respectively, to terminate the Real Property Purchase Agreement and that a
proper election by either Purchaser or the Fee Owner to terminate the Real
Property Purchase Agreement at any time in accordance with any of the terms
thereof shall be deemed to be a proper election by Purchaser or Seller,
respectively, to terminate this Agreement.
(vii) Purchaser's approval, in its sole
discretion, on or before the expiration of the Due Diligence Period, of any and
all aspects of the Club and/or its
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operations, including, without limitation, all financial records of Seller,
including without limitation, operating statements, payrolls records, capital
expenditures budgeted, bid and completed, inventory, warranties and service
agreements; the reciprocal easement agreement (parking agreement) governing
common areas of Town Center together with any amendments thereto; all parking
arrangements applicable to the Club; the Club's zoning; the results of
Purchaser's physical inspections of the Club and all components thereof,
including without limitation all building equipment; a current ALTA survey for
the Club; leases or license agreements with, and estoppels from, any
subtenants, licensees or concessionaires of Seller; a preliminary title report,
based upon a current ALTA survey, together with all underlying documentation;
and the status of Purchaser's continued right, after the Closing, to retain the
existing signage for the Club located within Town Center on Sunset.
Purchaser's failure to give notice to Seller terminating this Agreement on or
before the expiration of the Due Diligence Period shall conclusively be deemed
to be Purchaser's approval of any and all aspects of the Club and/or its
operations. Subject to the terms and conditions hereof, the "Due Diligence
Period" shall mean the period from May 2, 1997 to and including the Closing
Date (which actual date of Closing may differ from the deemed date for Closing
set forth in Section 1.9(a)). Without limiting the foregoing, the Due
Diligence Period under this Agreement shall automatically be extended if and to
the extent that the "Due Diligence Period" under the Real Property Purchase
Agreement is extended.
(viii) There is no Proceeding pending or
threatened pertaining to the Transactions or their consummation that shall have
been instituted or threatened by any Governmental Body or Person.
(ix) The State of Nevada child care
license (#294-97) currently held in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ name, as described in
Part 2.10 of the Disclosure Schedule, shall (A) be in full force and effect at
Closing and (B) shall be in full force and effective immediately following
Closing, assuming that Purchaser shall have offered to rehire ▇▇. ▇▇▇▇▇▇▇▇▇,
and ▇▇. ▇▇▇▇▇▇▇▇▇ shall have agreed to be rehired by Purchaser, immediately
following Closing.
(b) Seller shall have the right to modify, update
and supplement all representations, warranties, exhibits and schedules attached
to or delivered in connection with this Agreement through the Closing Date (any
such modification, update or supplement, a "Modification"). Notwithstanding
the foregoing, if Seller makes any Modification and if such Modification would
be likely to have a material adverse effect upon the Club and/or its
operations, then Purchaser shall have the right to terminate this Agreement by
giving a notice to Seller terminating this Agreement within 5 days of
Purchaser's receipt of the Modification, and whether or not the Due Diligence
Period has expired. If such 5-day period would expire after the Outside
Closing Date, then the Outside Closing Date shall be extended accordingly. In
the event of any such termination, the Deposit shall be returned promptly to
Purchaser, and the parties will have no further obligations to each other
hereunder. Purchaser's failure to give any such termination notice to Seller
within such 5-day period shall conclusively be deemed to be Purchaser's
approval of any such Modification.
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(c) If (i) Purchaser shall not have been able to
obtain any Identified Approvals, (ii) any material representation or warranty
of Seller shall prove to have been inaccurate or untrue in any material respect
when first made or (iii) Seller shall not have performed, in any material
respect, any of its material covenants contained in this Agreement, and in each
case by Closing, then Purchaser shall be entitled, without limitation, (A) not
to consummate the Transactions and have the Deposit Holder or Seller, as
applicable, return to Purchaser the Deposit (but without any interest thereon
for such period of time, if any, as it may have been held by Seller) less any
termination fees and expenses of Deposit Holder, or (B) to consummate the
Transactions if Purchaser, in its sole discretion, is willing to consummate the
Transactions on such basis.
1.9 CLOSING.
(a) Closing shall be deemed to occur, if at all,
at 12:01 a.m. on Friday, August 1, 1997, unless the date for Closing shall be
extended pursuant to the terms of this Agreement (August 1, 1997 or any such
other date, as applicable, the "Outside Closing Date"); it being further agreed
that Closing may actually occur, if at all, at a date and time different from
the Outside Closing Date. If all conditions precedent set forth in Sections
1.7 and 1.8 have not been satisfied or waived and the Closing shall not have
occurred on or before the Outside Closing Date, then either Purchaser or Seller
may unilaterally cancel this Agreement, at any time thereafter prior to such
satisfaction or waiver, by notice to the other, except that if the unsatisfied
condition(s) is for the benefit of the party not giving said notice, then such
party shall have the right, within three Business Days after its being served
with said notice, to waive such unsatisfied condition(s) and proceed to effect
Closing immediately. Four Business Days after the effective date of said
notice, if Closing has not been agreed to by the party not giving said notice,
as provided above, then all funds deposited by Purchaser, and all interest
earned thereon, shall be returned immediately to Purchaser but subject to
Section 1.5(h).
(b) Consummation of the Transactions (the
"Closing") will take place at the offices of Jolley, Urga, ▇▇▇▇▇ & Woodbury,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ on the Closing Date.
(c) If Closing has not occurred in accordance
with the terms and conditions of this Agreement, then this Agreement shall
automatically terminate without any further action required, and the parties
shall have no further liability hereunder.
(d) When all conditions precedent to Closing set
forth in Sections 1.7 and 1.8 shall have been satisfied, or Deposit Holder
shall have received written instruction from the party or parties, or their
respective counsel, for whose benefit any such unsatisfied condition precedent
exists waiving the satisfaction of such conditions precedent, and when each of
the parties hereto shall have otherwise instructed Deposit Holder to proceed
with the Closing, then Deposit Holder shall take the following actions in the
following order:
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(i) Disburse the Purchase Price to
Seller in accordance with Seller's instructions.
(ii) Deliver two fully executed original
copies of each of the Contract Assignment, Lease Assignment, ▇▇▇▇ of Sale, ARC
Estoppel and the IP License and one fully executed original of the CC&R
Amendment to Seller.
(iii) Deliver two fully executed original
copies of each of the Contract Assignment, ▇▇▇▇ of Sale, CC&R Amendment, ARC
Estoppel and the IP License and one fully executed original of the Lease
Assignment to Purchaser.
(iv) Record the Lease Assignment and
deliver conformed copies of the duly recorded Lease Assignment to each of
Seller and Purchaser.
(v) Record the CC&R Amendment and
deliver conformed copies of the duly recorded CC&R Amendment to each of Seller
and Purchaser.
1.10 PURCHASE PRICE ALLOCATION. On or prior to the Closing
Date, Purchaser, and Seller shall agree on an allocation of the Purchase Price
and Seller liabilities (which liabilities shall be treated as an additional
amount paid by Purchaser to Seller) among the Purchased Assets (the "Allocation
Statement"). The allocation set forth in the Allocation Statement will conform
to the requirements of the Treasury Regulations under Section 1060 of the Code.
The parties agree to report (on Form 8594 and otherwise) the allocation of the
Purchase Price and Seller liabilities in a manner consistent with the
Allocation Statement. The allocation prescribed by the Allocation Statement
shall be conclusive and binding upon each party for all purposes. No party
shall file any tax return or other document with, or make any statement or
declaration to, any governmental body if such document, statement or
declaration is inconsistent with the allocation prescribed by the Allocation
Statement
1.11 SALES TAXES. The Seller shall bear and pay any sales
taxes, use taxes, transfer taxes, documentary charges, recording fees, or
similar taxes, charges, fees or expenses that are or may become payable in
connection with the sale of the Purchased Assets to Purchaser or in connection
with any of the Transactions
1.12 ACCOUNTING TREATMENT. The parties intend that the
Acquisition will be treated as a purchase for accounting purposes.
1.13 TAX CONSEQUENCES. For federal income tax purposes,
the Acquisition is intended to constitute a taxable transaction.
1.14 FURTHER ACTION. After the Closing Date, Seller shall
execute and deliver such bills of sale, endorsements, assignments and other
documents and take any further action as may be reasonably necessary to assign,
convey, transfer and deliver to Purchaser good and valid title to the Purchased
Assets free and clear of any Encumbrances.
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1.15 PRORATIONS.
(a) Except as otherwise hereinafter provided, at
and as of Closing, Purchaser and Seller shall prorate in cash (i) real property
taxes and assessments for the Club on the basis of the current fiscal year if
and to the extent that Seller shall be liable for real property taxes and
assessments under the Real Property Leases, (ii) rents under the Real Property
Leases, (iii) rents under the Personal Property Leases, (iv) utility and sewer
charges, (v) payments under the Assumed Contracts, (vi) operating expenses
(including, without limitation, any relating to the summer camp and tennis
tournament operations of Seller), (vii) payments relating to Town Center and
(viii) other items customarily prorated in transactions of this sort. Seller
shall maintain in place all deposits under the Real Property Leases and all
utilities and other deposits for the benefit of the Purchaser. Seller shall
deliver to Purchaser at Closing any deposits under any Subleases that are to be
Assumed Contracts. Purchaser shall not reimburse Seller, including without
limitation by way of a credit to Seller, for any such deposits under any
Subleases that are to be Assumed Contracts so delivered by Seller to Purchaser.
Purchaser shall reimburse Seller for all other such deposits, including without
limitation by way of a credit to Seller, with an offsetting debit to Purchaser,
in the calculation of the closing prorations. Purchaser shall not, however, be
required to pay, or otherwise to bear the cost of, its share of any item to be
prorated under both this Agreement and the Real Property Purchase Agreement
more than once, i.e., Purchaser shall only be required to pay, or otherwise to
bear the cost, of its share of any such item under one of the two agreements
but not under both agreements.
(b) No pro ration shall be made for insurance
premiums on insurance policies of Seller (none of which Purchaser elects to
accept and none of which Seller elects to assign), for management fees or for
employee salaries, vacations, benefits, bonuses, payroll taxes or other
employee costs. Seller shall terminate, or cause to be terminated, as of
Closing all employees and independent contractors working at the Club and shall
pay, or cause to be paid, all employee salaries, vacations, benefits, bonuses,
payroll taxes and other employee and independent contractor costs as of and
including the Closing Date. Subject to the willingness of such employees and
independent contractors to be interviewed and, if asked by Purchaser, to be
rehired, Purchaser shall be permitted to interview and, at its election,
rehire, from and after Closing, any or all of such terminated employees and
independent contractors and shall provide all such rehired employees (but not
any rehired independent contractors) with health care insurance and benefits
and worker's compensation insurance generally consistent with that generally
provided by Purchaser to its employees.
(c) At and as of the Closing Date, Purchaser and
the Seller shall proportionately allocate all prepaid items of income,
including, without limitation, monthly dues, dues paid more than one month in
advance, and prepayments relating to the summer camp and tennis tournament
operations of Seller. Notwithstanding anything contained herein to the
contrary, there shall be no proportionate allocation of initiation fees paid
and collected in the Ordinary Course of Business. Membership dues and
prepayments collected by Purchaser or Seller, as applicable, during the first
30 days following the Closing Date shall be applied (A) first to any prorated
amounts due Seller for the month in which the
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Closing shall have occurred, (B) next to any prorated amounts due Purchaser for
the month in which the Closing shall have occurred, (C) next to any amounts due
Purchaser for the month following the month in which the Closing shall have
occurred and (D) then to any accounts receivable due Seller as of the Closing
Date for any periods prior to the month in which the Closing shall have
occurred. Membership dues and prepayments received by Purchaser or Seller, as
applicable, more than 30 days following the Closing Date shall be applied first
to the current period and then to past periods in reverse chronological order,
i.e. to more recent periods before less recent periods. Any membership dues
collected by the Seller from and after the Closing shall be held in trust for
the account of Purchaser and shall be promptly remitted to Purchaser minus any
amounts owed to the Seller as set forth in this Section 1.15(c) together with
an accounting of such membership dues in reasonable detail satisfactory to
Purchaser. Any membership dues collected by Purchaser from and after the
Closing that are owed to the Seller as set forth in this Section 1.15(c) shall
be held in trust for the account of the Seller and shall be promptly remitted
to the Seller together with an accounting of such membership dues in reasonable
detail satisfactory to the Seller.
(d) For a period of ninety (90) days following
the Closing, Purchaser agrees that Purchaser shall, in accordance with
Purchaser's standard practice in conducting and operating clubs such as the
Club, attempt to collect any monthly dues under those Member Agreements
assigned to and assumed by Purchaser which are attributable to the period prior
to the Closing; provided, however, Purchaser shall have no obligation to
commence any actions or proceedings or take any further action to collect any
such compensation, fees, revenues or income due to Seller hereunder. After the
Closing, Seller shall not take any action against any party to any Membership
Agreement assigned to and assumed by Purchaser by reason of any unpaid monthly
dues owed Seller thereunder.
(e) If real estate taxes and/or assessments,
utility charges or any other item is prorated as of Closing on any basis other
than actual amounts charged for the current period, such item or items shall be
re-prorated upon determination of such actual amounts, and the party owing
funds to the other shall promptly remit such funds to the other. If either
party owing funds hereunder to the other does not remit them within 30 days
after demand therefor, such funds shall thereafter bear interest at the lesser
of 10% per annum and the maximum lawful rate. In all events, the amount of any
refund or credit shall be the amount the refund or credit would have been
without giving effect to the Transactions. The parties shall further cooperate
so as to calculate such net final proration amount within 75 days of the
Closing. Any disagreement with respect to such final calculation shall be
resolved pursuant to binding arbitration before a "Big 6" accounting firm to be
designated by Purchaser or any other accounting firm that shall be mutually
agreed upon by the parties. Each party shall bear its own cost and expenses in
connection with such arbitration and one-half of the fees and expenses of the
arbitrator. Each party shall be entitled to provide the arbitrator with such
information as each party shall deem appropriate with respect to the matters to
be determined by such arbitrator.
(f) Final proration of percentage rents and
similar apportionable
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items which are dependent for their calculation upon the economic performance
of any Entity over a specified interval of time shall be accomplished as
follows: The parties shall await the expiration of the specified interval to
determine the gross rents, gross receipts and other economic performance over
the entire interval and then prorate the item by allocating to Seller the
product of the rents or other similar apportionable item for the entire
interval multiplied by a fraction, the numerator of which is the number of days
within the specified interval which occur before Closing and the denominator of
which is the number of days in the entire specified interval.
(g) Operating expenses which are payable (or
reimbursable) by any present Subtenant shall not be prorated hereunder (except
to the extent that Seller is due a credit for having already paid such
expense). Purchaser shall send customary statements for reimbursement of
operating expenses and taxes to said tenants after consulting with Seller with
respect to appropriate amounts due therefor, and shall remit to Seller, upon
receipt, Seller's prorated share thereof, determined as provided in subsection
(f) above.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants, to and for the benefit of the
Purchaser Indemnitees, as follows. Notwithstanding anything contained herein
to the contrary, and except for the representations and warranties made in
Sections 2.1, 2.4(a), but only if and to the extent there shall be any Breach
of such representation and warranty giving rise to Damages for which payment
shall not be available pursuant to the policy of title insurance to be issued
to Purchaser under the Real Property Purchase Agreement upon closing
thereunder, and 2.16, all of the representations and warranties made in this
Section 2 are hereby made to the Knowledge of the Seller.
2.1 DUE ORGANIZATION; NO SUBSIDIARIES; ETC.
(a) Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller is in good standing and qualified to do business under the
laws of, and in, the State of Nevada. Seller has all necessary power and
authority:
(i) to conduct its business in the
manner in which its business is currently being conducted;
(ii) to own and use its assets in the
manner in which its assets are currently owned and used; and
(iii) to perform its obligations under all
Seller Contracts.
(b) Seller's sole general partner is General
Partner. General Partner is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada and has all necessary
power and authority:
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(i) to conduct its business in the
manner in which its business is currently being conducted;
(ii) to own and use its assets in the
manner in which its assets are currently owned and used; and
(iii) to perform, as Seller's general
partner and on behalf of Seller as such general partner, Seller's obligations
under all Seller Contracts.
(c) Except as set forth on Part 2.1 of the
Disclosure Schedule, Seller has never conducted any business under or otherwise
used, for any purpose or in any jurisdiction, any fictitious name, assumed
name, trade name or other name.
2.2 FINANCIAL STATEMENTS.
(a) Seller has delivered, or caused to be
delivered, to Purchaser the following financial statements for the Club:
(i) the reviewed balance sheet of the
Seller at December 31, 1994 (the "Fiscal 1994 Balance Sheet"), and the related
audited statements of operations, changes in stockholder's equity and cash
flows of the Seller for the year ended December 31, 1994;
(ii) the reviewed balance sheet of the
Seller at December 31, 1995 (the "Fiscal 1995 Balance Sheet"), and the related
audited statements of operations, changes in stockholder's equity and cash
flows of the Seller for the year ended December 31, 1995;
(iii) the reviewed balance sheet of the
Seller at December 31, 1996 (the "Fiscal 1996 Balance Sheet"), and the related
audited statements of operations, changes in stockholder's equity and cash
flows of the Seller for the year ended December 31, 1996;
(iv) the unaudited balance sheet of the
Seller at January 31, 1997, February 28, 1997, March 31, 1997, April 30, 1997,
May 31, 1997 and for each completed month thereafter prior to Closing and the
related unaudited statements of operations and cash flows of the Seller, in the
format customarily prepared by Seller for its own internal use, for the one,
two, three, four, five month periods and any corresponding periods thereafter,
respectively, ended on such dates (the items referred to in Sections 2.2(a)(i),
(ii), (iii) and (iv) being collectively referred to as the "Seller Financial
Statements"); and
(b) All of the Seller Financial Statements are
accurate and complete in all material respects, and the dollar amount of each
line item included in the Seller Financial
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Statements is accurate in all material respects. The Seller Financial
Statements present fairly the financial position of the Seller as of the
respective dates thereof and the results of operations and cash flows of Seller
for the periods covered thereby. The Seller Financial Statements have been
prepared in accordance with income tax basis accounting applied on a consistent
basis throughout the periods covered.
2.3 ABSENCE OF CHANGES.
(a) Except as set forth in Part 2.3 of the
Disclosure Schedule, since December 31, 1996 (unless another date is specified
below) and as relates to the Purchased Assets:
(i) since May 1, 1997, there has not
been any loss, damage or destruction to or any interruption in the use of, any
of the Seller's assets (whether or not covered by insurance);
(ii) the Seller has not effected or been
a party to any material Acquisition Transaction;
(iii) [Intentionally omitted]
(iv) since May 1, 1997, the Seller has
not sold or otherwise transferred, and has not leased or licensed, any asset to
any other Person except for products sold by the Seller from its inventory in
the Ordinary Course of Business;
(v) the Seller has not pledged or
hypothecated any of its assets, including, without limitation, its Membership
Agreements, or otherwise permitted any of such assets to become subject to any
Encumbrance;
(vi) none of the Purchased Assets has
become bound by any Contract that is not an Excluded Contract;
(vii) no Contract relating to the Club
that is not an Excluded Contract and by which the Seller or any of the assets
owned or used by the Seller is or was bound, or under which the Seller has or
had any rights or interest, has been amended or terminated other than in the
Ordinary Course of Business or as disclosed in this Agreement, including
without limitation in the Disclosure Schedule; and
(viii) except for the Transactions, the
Seller has not entered into any transaction or taken any other action outside
the Ordinary Course of Business, including without limitation, any sales of new
or promotional Membership Agreements or any renewals of existing Membership
Agreements other than in the Ordinary Course of Business.
(ix) there has not been any material
adverse change in the Seller's business, condition, assets, liabilities,
operations, financial performance or net income, and no event has occurred that
is likely to have a material adverse effect upon
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any thereof; it being agreed that if any such material adverse change or any
such event occurs and becomes known to Seller and/or Purchaser during the last
5 days of the Due Diligence Period, then the Due Diligence Period shall be
extended until 5 business days from the earlier of (A) Purchaser's actual
knowledge of the material details of such material adverse change or such event
or (B) Purchaser's receipt of notice from Seller to Purchaser of the material
details of such material adverse change or such event. Seller shall
immediately notify Purchaser of the material details of any such material
adverse change or such event, whether the same shall occur before or after the
expiration of the Due Diligence Period. In addition, if any such material
adverse change or such event shall occur within 5 days of the otherwise
scheduled date for Closing, then the scheduled date for Closing shall be
extended until 5 Business Days from the earlier of (a) Purchaser's actual
knowledge of the material details of such material adverse change or such event
or (b) Purchaser's receipt of notice from Seller to Purchaser of the material
details of such material adverse change or such event.
2.4 TITLE TO ASSETS.
(a) Seller owns, and has good and valid title to,
all of the Purchased Assets, including, without limitation, the Membership
Agreements, free and clear of any Encumbrances.
(b) Part 2.4 of the Disclosure Schedule
identifies all material assets that are being leased or licensed to the Seller,
other than the Personal Property Leases, which are set forth in Part 2.6 of the
Disclosure Schedule, and the Real Property Leases, which are set forth in Part
2.7 of the Disclosure Schedule.
2.5 MEMBERS.
(a) Attached as Part 2.5 of the Disclosure
Schedule is the form of Membership Agreement used by the Club to govern the
memberships of its Members.
(b) Part 2.5 of the Disclosure Schedule sets
forth, as of a recent date, all accounting information that Seller maintains,
in accordance with its present operational practices and standards, regarding
its Members and the status of their Memberships (the "Facilities Schedule").
The Facilities Schedule is true, accurate and complete.
(c) Part 2.5 of the Disclosure Schedule sets
forth the Memberships issued on a promotional and/or non-fee basis. The
information set forth in this Section 2.5(c) shall also constitute a part of
the Facilities Schedule.
(d) [Intentionally omitted]
(e) Except as set forth in Part 2.5 of the
Disclosure Schedule, the terms and provisions of each Membership Agreement
comply with the provisions of Nevada Revised Statutes Section 598.948 et seq.
If and to the extent that Purchaser shall be
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required to give any refund to any Member after Closing as a result of any
failure of such Member's Membership Agreement to comply with the provisions of
Nevada Revised Statutes Section 598.948 et seq., then Seller shall pay to
Purchaser, promptly upon demand, any portion of such refund that may correspond
to either (i) any pro ration credit that Seller may have received at Closing
with respect to such Member or (ii) any initiation fee, or portion thereof,
paid by such Member to Seller prior to Closing. Neither Seller nor Purchaser
is required to notify any Member of any right arising out of the Transactions
to a refund.
(f) Initiation fees and prepaid monthly Club fees
obtained by or on behalf of the Seller from any Members are not refundable
except pursuant to the provisions of Nevada Revised Statutes Sections 598.950,
598.952, 598.954, 598.956, 598.958 and 598.960 and the terms of the Membership
Agreements.
2.6 EQUIPMENT, ETC. Part 2.6 of the Disclosure Schedule
identifies substantially all equipment owned or leased by the Seller. In the
case of leased equipment, Part 2.6 of the Disclosure Schedule further
specifies, for each piece of leased equipment, the lessor, the amount of
monthly lease payment, the remaining balance of lease payments and the
scheduled expiration date of such lease, and whether Seller may assign the
Personal Property Lease for such equipment to Purchaser without such lessor's
consent.
2.7 REAL PROPERTY. Seller does not own any real property
or any interest in real property, except for the leaseholds created under the
real property leases identified in Part 2.7 of the Disclosure Schedule (the
"Leases"). Part 2.7 of the Disclosure Schedule provides an accurate and
complete description of the monthly rental rate under each such Lease, the
termination date thereof, and extension periods thereunder. Except for the
Members, no Person has any right to occupy any part of the Club, except for
those Subtenants identified in Part 2.7 of the Disclosure Schedule. If an
estoppel certificate for the benefit of Purchaser and acceptable to Purchaser
in its sole discretion has not been obtained for any Subleases, then Part 2.7
of the Disclosure Schedule provides an accurate and complete description of the
monthly rental rate applicable to each such Sublease, the termination date
thereof, extension periods thereunder and the use thereunder. Seller has
received no notice, whether written or verbal, from the tenant under the
so-called "Wellness Center" Sublease extending, or purporting to extend, such
Sublease. Seller enjoys peaceful and undisturbed possession of the premises
under the Leases, which premises are supplied with utilities and other services
reasonably necessary for the operation thereof. Except as disclosed in Part
2.7 of the Disclosure Schedule, (a) all Leases and Subleases are legally valid
and binding and are in full force and effect; (b) there have not been and there
currently are not any material defaults thereunder by the Seller or by any
other party thereto; (c) no event has occurred which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute a default thereunder entitling the landlord or any third party to
terminate any Lease or Sublease and (d) the real property, the improvements
thereon and the uses thereof that are the subject of the Leases conform with
all applicable ordinances, regulations and building, zoning and other
applicable law. There has been no substantial damage to any portion of
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such property caused by fire or other casualty which has not been repaired to
restored. Seller has not received written notice of any Proceeding by any
Governmental Body to modify or amend the zoning statutes, ordinances,
regulations or laws, including any conditional use permits, applicable to any
such leased facilities, which would materially impair the use of such leased
facilities as currently being used or materially detract from the value
thereof. Seller has not received written notice of any Proceeding commenced by
any private person which would materially impair the use of such leased
facilities as currently being used or materially detract from the value
thereof.
2.8 PROPRIETARY ASSETS.
(a) Except as set forth in Part 2.8 of the
Disclosure Schedule, there is no material Proprietary Asset that is owned by or
licensed to the Seller or that is otherwise used in connection with the
Seller's business and that cannot freely be assigned to Purchaser.
(b) Except as set forth in Part 2.8 of the
Disclosure Schedule, the Seller has not received any written notice of any
infringement of any Proprietary Asset owned or used by any other Person.
2.9 CONTRACTS.
(a) Part 2.9 of the Disclosure Schedule lists
each Seller Contract affecting the Club and/or the Real Property, except for
any Excluded Contract and Membership Agreement. Seller has delivered to
Purchaser accurate and complete copies of all Seller Contracts identified in
Part 2.9 of the Disclosure Schedule, including all amendments thereto.
(b) Each Seller Contract identified in Part 2.9
of the Disclosure Schedule is valid and in full force and effect, and is
enforceable by the Seller in accordance with its terms, except as enforcement
may be limited by applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting creditors rights, and
subject to general equity principles and to limitations on availability or
equitable relief, including specific performance.
(c) Except as set forth in Part 2.9 of the
Disclosure Schedule, the Seller has not received any written notice regarding
any violation or breach of, or default under, any Seller Contract, other than
any Excluded Contracts.
(d) Except as set forth in Part 2.9 of the
Disclosure Schedule, the Seller has not guaranteed or otherwise agreed to
cause, insure or become liable for, or pledged any of its assets to secure, the
performance or payment of any obligation or other Liability of any other
Person.
(e) The Contracts identified in Part 2.9 of the
Disclosure Schedule, the Membership Agreements, and the Excluded Contracts
collectively constitute
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all of the Contracts that the Seller has currently obtained, or that currently
are in force, to conduct its business in the manner in which its business is
currently being conducted.
2.10 COMPLIANCE WITH LEGAL REQUIREMENTS. Parts 2.10 and
2.11 of the Disclosure Schedule together set forth all licenses, permits and
approvals that the Seller has currently obtained, or that currently are in
force, in connection with the ownership and/or operation of the Club. Except
as set forth in Part 2.10 of the Disclosure Schedule, the Seller has not
received, at any time, any written notice from any Governmental Body or any
other Person regarding any violation of, or failure to comply with, any Legal
Requirement
2.11 GOVERNMENTAL AUTHORIZATIONS. Parts 2.10 and 2.11 of
the Disclosure Schedule together set forth all licenses, permits and approvals
that the Seller has currently obtained, or that currently are in force, in
connection with the ownership and/or operation of the Club. Except as set
forth in Part 2.11 of the Disclosure Schedule, the Seller has not received any
written notice from any Governmental Body or any other Person regarding any
violation of or failure to comply with any term or requirement of any
Governmental Authorization.
2.12 EMPLOYEE MATTERS; LABOR MATTERS; AND BENEFIT PLANS.
(a) Part 2.12 of the Disclosure Schedule sets
forth the name, position and current annual compensation and/or current hourly
rate, as applicable, of all current employees and independent contractors of
Seller, each identified as such. No management level employee has given notice
of intent to terminate employment from and after May 1, 1997, except ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇. Seller
has furnished to Purchaser true, correct and complete copies of each employment
agreement entered into with any employee of Seller.
(b) Part 2.12 of the Disclosure Schedule sets
forth a list of each collective bargaining agreement to which Seller is a party
and any other collective bargaining agreement which pertains to employees of
Seller. No legal organization or group of employees of Seller has made a
pending written demand for recognition or certification, and there are no
representation proceeds presently pending or threatened in writing, with the
National Labor Relations Board or any other Governmental Body. There are no
other organizing activities involving Seller presently being conducted or
threatened in writing, by any labor organization or group of employees of
Seller. There are no strikes, work stoppages, slow downs, lock outs, labor
disputes and materials grievances pending or threatened in writing against
Seller. There are no unfair labor practice charges or complaints pending or
threatened in writing by or on behalf of any employee or group of employees of
Seller. There are no complaints, charges or claims pending or threatened in
writing against Seller by any Governmental Body based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by Seller of any individual. There has been no "mass layoff" or
"plant closing" as defined by the WARN Act with respect to Seller within two
(2) years prior to the date hereof.
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(c) Part 2.12 of the Disclosure Schedule briefly
describes all Benefit Plans maintained or formerly maintained by Seller. As
respects all Benefit Plans: (a) there are no funding deficiencies (determined
on a plan determination basis); (b) no Reportable Event, as defined by ERISA,
has occurred during the immediately preceding two (2) years; (c) no benefit
plan is a Multiemployer Plan, as defined in Section 4001 of ERISA; (d) no
Benefit Plan provides medical benefits, life insurance or other similar
benefits to retirees or their families; (e) no Benefit Plan is self-funded; (f)
Seller has not effected the termination or partial termination of any Benefit
Plan or participation in any Benefit Plan within the immediately preceding five
(5) years; (g) no disabled current or former employee of Seller claims or
receives or is entitled to receive disability, pension, health, welfare or life
insurance benefits from Seller; and (h) all Benefit Plans may be terminated or
modified by Seller in Seller's discretion without penalty or premium.
2.13 ENVIRONMENTAL MATTERS.
(a) During the period that the Seller has owned
or operated the Club, there have been no disposals, releases or threatened
releases of Hazardous Material on, from under or onto the Club that would give
rise to, or result in the Seller becoming subject to any Liability. Seller has
no Knowledge of any presence, disposals, releases or threatened releases of
Hazardous Material on, from, under or onto the Club that may have occurred
prior to the Seller having taken possession of any of the Club. For the
purposes of this Agreement, the terms "disposal", "release" and "threatened
release" shall have the definitions assigned thereto by CERCLA.
(b) Seller has not used, handled, generated,
manufactured or stored on under or about the Club or transported to or from the
Club any Hazardous Material, except such as are used, in the Ordinary Course of
Business, in the operation of the Club.
(c) There has been no Proceeding brought or
threatened in writing against the Seller by, or any settlement reached by the
Seller with, any party or parties alleging that the Seller is liable for the
presence, disposal, release or threatened release of any Hazardous Material on,
from, under or onto the Club or for a violation or alleged violation of any
Environmental Law relating to the Club.
(d) Seller is and at all times was in compliance
with all applicable Environmental Laws and has used and is in compliance with
all licenses, permits and authorizations required by the applicable
Environmental Laws relating to the Real Property and the Club.
(e) There are no active or inactive underground
storage tanks located on the Real Property.
2.14 RELATED PARTY TRANSACTIONS. Except as set forth in
Part 2.14 of the Disclosure Schedule, no Related Party has any direct or
indirect interest of any nature in
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any asset used in or otherwise relating to the Club.
2.15 PROCEEDINGS; ORDERS.
(a) Except as set forth in Part 2.15 of the
Disclosure Schedule, there is no pending Proceeding, and the Seller has not
received any written notice of any Proceeding:
(i) that involves the Seller or that
otherwise relates to or might affect the Purchased Assets; or
(ii) that challenges, or that could be
reasonably likely to have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the Transactions.
Except as set forth in Part 2.15 of the Disclosure Schedule, no event
has occurred, and no claim, dispute or other condition or circumstance exists,
that would directly or indirectly give rise to or serve as a basis for the
commencement of any such Proceeding.
(b) Except as set forth in Part 2.15 of the
Disclosure Schedule, the Seller has received no written notice of any Order to
which the Seller, or any of the Purchased Assets owned or used by the Seller in
the operation of the Club, is subject.
2.16 AUTHORITY; BINDING NATURE OF AGREEMENTS. Seller and
General Partner each has the absolute and unrestricted right, power and
authority to enter into and to perform its obligations under this Agreement and
the other Transactional Agreements to which it is a party; and the execution,
delivery and performance by the Seller and General Partner of this Agreement
and the other Transactional Agreements have been duly authorized by all
necessary action on the part of the Seller and its partners and on the part of
General Partner and its stockholders, board of directors and officers. The
board of directors of General Partner has approved, adopted and authorized this
Agreement.
2.17 NON-CONTRAVENTION; CONSENTS. Except as set forth in
Part 2.17 of the Disclosure Schedule, neither the execution and delivery of any
of the Transactional Agreements, nor the consummation or performance of any of
the Transactions, will directly or indirectly (with or without notice or lapse
of time):
(a) contravene, conflict with or result in a
violation of (i) any of the provisions of the Seller's partnership agreement or
General Partner's articles of incorporation or bylaws or (ii) any resolution
adopted by General Partner's stockholders, General Partner's board of directors
or any committee of the General Partner's board of directors;
(b) contravene, conflict with or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to
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which the Seller, or any of the Purchased Assets owned or used by the Seller,
is subject;
(c) contravene, conflict with or result in a
violation or breach of, or result in a default under, any provision of, or give
any Person the right to declare a default under, any Assumed Contract:
(d) give any Person the right to (i) declare a
default or exercise any remedy under any Assumed Contract, (ii) accelerate the
maturity or performance of any Assumed Contract, or (iii) cancel, terminate or
modify any Assumed Contract; or
(e) result in the imposition or creation of any
Encumbrance upon or with respect to any Purchased Asset owned or used by the
Seller.
Except as set forth in Part 2.17 of the Disclosure Schedule, the
Seller was not, is not or will not be required to make any filing with or give
any notice to, or to obtain any Consent from, any Person in connection with the
execution and delivery of any of the Transactional Agreements or the
consummation or performance of any of the Transactions
2.18 INFORMATION. Seller has furnished and will continue
to furnish promptly to Purchaser detailed information with respect to the Club,
Purchased Assets, Assumed Liabilities, Assumed Contracts and earnings and
business operations of Seller and the Club. All information contained in the
exhibits and schedules attached to this Agreement and in the documents
furnished to Purchaser by Seller pursuant to this Agreement or otherwise, is
and shall be at the Closing, true, correct and complete. All underlying
documents incorporated or referred to in such exhibits and schedules, or in
documents otherwise furnished to Purchaser by Seller, are true, correct and
complete copies thereof, as the same have been or shall be amended or modified.
SECTION 3. "AS IS"; DUE DILIGENCE COMPLETED; DISCLAIMER OF ADDITIONAL
WARRANTIES OF SELLER.
Purchaser acknowledges that Purchaser has had or will have the
opportunity to review all documents and other information made available to
Purchaser or its Representatives. In addition, Purchaser has had or will have
the opportunity to review all reports, studies, inspections, audits,
appraisals, and other similar items which Purchaser may perform or have
performed in connection with the Transactions, and Purchaser will otherwise do
what it deems necessary in order to evaluate the financial condition, status of
title, zoning and land use and the economical and operational viability of the
Club. Purchaser acknowledges further that, prior to Closing, it will complete,
or have had the opportunity to complete, physical and financial examinations
relating to the Club and will consummate the Transactions on the basis of all
such examinations. Purchaser further acknowledges to and agrees with Seller
that, except for the representations and warranties set forth in Section 2
hereof, and subject to the terms and conditions of this Agreement, the Club
shall be sold, at Closing, "AS IS" without any warranties or representations
either expressed or implied, of any nature or type whatsoever from or on behalf
of Seller.
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SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants, to and for the benefit of
the Seller Indemnitees, as follows:
4.1 DUE ORGANIZATION. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and has all necessary power and authority:
(a) to conduct its business in the manner in
which its business is currently being conducted; and
(b) to own and use its assets in the manner in
which its assets are currently owned and used.
4.2 AUTHORITY; BINDING NATURE OF AGREEMENT.
(a) Purchaser has the absolute and unrestricted
right, power and authority to enter into and perform its obligations under this
Agreement and the other Transactional Agreements to which it is a party; and
(b) The execution, delivery and performance of
this Agreement and the other Transactional Agreements by Purchaser has been
duly authorized by all necessary action on the part of Purchaser and its board
of directors.
4.3 NON-CONTRAVENTION; CONSENTS. To Purchaser's
Knowledge, neither the execution and delivery of any of the Transactional
Agreements, nor the consummation or performance of any of the Transactions,
will directly or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a
violation of (i) any of the provisions of Purchaser's certificate or articles
of incorporation or bylaws, or (ii) any resolution adopted by Purchaser's
stockholders, Purchaser's board of directors or any committee of Purchaser's
board of directors;
(b) contravene, conflict with or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which the Purchaser, or any
of the assets owned or used by the Purchaser, is subject;
(c) contravene, conflict with or result in a
violation or breach of, or result in a default under, any provision of, or give
any Person the right to declare a default under, any contract to which
Purchaser is a party or by which it or any of its assets are bond.
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SECTION 5. INDEMNIFICATION, ETC.
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties made by
the parties hereto in this Agreement shall survive the Closing and shall expire
on the first anniversary of the Closing Date: provided, that if, at any time
prior to the first anniversary of the Closing Date any Indemnitee (acting in
good faith) delivers a written notice alleging the existence of a Breach of any
of such representations and warranties and asserting a claim for recovery under
Section 5 based on such alleged Breach, then the claim asserted in such notice
shall survive the first anniversary of the Closing until such time as such
claim is fully and finally resolved.
(b) For purposes of this Agreement, each
statement or other item of information set forth in the Disclosure Schedule
shall be deemed to be a representation and warranty in this Agreement made by
the party by whom such schedule was delivered.
5.2 INDEMNIFICATION BY SELLER. Seller shall hold harmless
and indemnify each of the Purchaser Indemnitees from and against, and shall
compensate and reimburse each of the Purchaser Indemnitees for, any Damages
which are suffered or incurred by any of the Purchaser Indemnitees or to which
any of the Purchaser Indemnitees may otherwise become subject at any time
(regardless of whether or not such Damages relate to any third-party claim) and
which arise from, or as a result of, or are connected with:
(a) any Breach of any representation or warranty
made by Seller in this Agreement or any of the Transactional Agreements;
(b) any Breach of any covenant or obligation of
Seller in this Agreement or any of the Transactional Agreements;
(c) any Liability that arises from or relates to
any Seller Transaction Costs; or
(d) any Liability to which any of the Purchaser
Indemnitees may become subject and that arises from or relates to (i) any of
the Purchased Assets prior to Closing or (ii) Excluded Assets or (iii) any
Liability of the Seller not specifically assumed by Purchaser pursuant to this
Agreement or (iv) the operation of the Club through and including Closing;
(e) any Liability to which any of the Purchaser
Indemnitees may become subject and that arises from or relates to any claim,
demand or other action taken or made by any limited partner of Seller as a
result of or in connection with how any element(s) of the purchase prices under
this Agreement and the Real Property Purchase Agreement have been allocated as
between the two agreements and the assets being sold under each thereof.
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(f) any Liability to which any of the Purchaser
Indemnitees may become subject and that arises from or relates to any claim,
demand or other action taken or made by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D. dba The
Medical Wellness Center under its sublease or otherwise to the effect that such
Subtenant is owed any monies for or on account of its tenant improvements;
(g) any Proceeding commenced relating to any
Breach, Liability or matter of the type referred to in clauses (a), (b), (c),
(d), (e) or (f) of this Section 5.3.
5.3 INDEMNIFICATION BY PURCHASER. Purchaser shall hold
harmless and indemnify each of the Seller Indemnitees from and against, and
shall compensate and reimburse each of the Seller Indemnitees for, any Damages
which are suffered or incurred by any of the Seller Indemnitees or to which any
of the Seller Indemnitees may otherwise become subject at any time (regardless
of whether or not such Damages relate to any third-party claim) and that arise
from, or as a result of, or are connected with:
(a) any Breach of any representation or warranty
made by Purchaser in this Agreement or any of the Transactional Agreements;
(b) any Breach of any covenant or obligation of
Purchaser in this Agreement or any of the Transactional Agreements;
(c) any Liability that arises from or relates to
any Purchaser Transaction Costs;
(d) any Liability to which any of the Seller
Indemnitees may become subject and that arises from or relates to (i) any of
the Purchased Assets subsequent to Closing or (ii) any Assumed Liability or
(iii) the operation of the Club after Closing;
(e) any Proceeding commenced relating to any
Breach, Liability or matter of the type referred to in any of clauses (a), (b)
(c) or (d) of this Section 5.3.
5.4 NONEXCLUSIVITY OF INDEMNIFICATION REMEDIES. The
indemnification remedies and other remedies provided in this Section 5 shall
not be deemed to be exclusive. Accordingly, the exercise by any Person of any
of its rights under this Section 5 shall not be deemed to be an election of
remedies and shall not be deemed to prejudice, or to constitute or operate as a
waiver of, any other right or remedy that such Person may be entitled to
exercise. In addition to any rights of setoff or other right or remedy that
any of the Indemnitees may be entitled to exercise (whether under this
Agreement under any other Contract, under any statute, rule or other Legal
Requirement, at common law in equity or otherwise), each Indemnitee shall have
the right to withhold and deduct any sum that may be owed to such Indemnitee
under this Section 5 from any amount otherwise payable by such Indemnitee to
the indemnifying party
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5.5 LIMITATIONS ON INDEMNIFICATION.
(a) Seller shall not be required to make any
indemnification payment pursuant to Section 5.2 for any Breach of any of its
representations and warranties until such time as the total amount of all
Damages (including the Damages arising from such Breach and all other Damages
arising from any other Breaches of any representations or warranties) that have
been suffered or incurred by any one or more of the Purchaser Indemnitees, or
to which any one or more of the Purchaser Indemnitees has or have otherwise
become subject, exceeds $50,000 in the aggregate, at which time such
Indemnitees shall be entitled to be indemnified against only the amount of such
Damages in excess of $50,000. Seller acknowledges and agrees that (i) the
purchase of the Purchased Assets pursuant to this Agreement is specifically
conditioned upon and directly related to the purchase of the Real Property and
related assets pursuant to the Real Property Purchase Agreement and (ii)
Purchaser is also the recipient of certain representations, warranties and
indemnification from the Fee Owner pursuant to the Real Property Purchase
Agreement. Accordingly, whether the $50,000 threshold referenced above in this
Section 5.5(a) has been exceeded is to be calculated inclusive of any "Damages"
that are suffered or incurred by any of the "Buyer's Indemnities", as
referenced in Section 13.5(i) of the Real Property Purchase Agreement.
(b) Purchaser shall not be required to make any
indemnification payment pursuant to Section 5.3 for any Breach of any of its
representations and warranties until such time as the total amount of all
Damages (including the Damages arising from such Breach and all other Damages
arising from any other Breaches of any representations or warranties) that have
been suffered or incurred by any one or more of the Seller Indemnitees, or to
which any one or more of the Seller Indemnitees has or have otherwise become
subject, exceeds $50,000 in the aggregate, at which time such Indemnitees shall
be entitled to be indemnified against only the amount of such Damages in excess
of $50,000. Purchaser acknowledges and agrees that the purchase of the
Purchased Assets pursuant to this Agreement is specifically conditioned upon
and directly related to the purchase of the Real Property and related assets
pursuant to the Real Property Purchase Agreement and (ii) Fee Owner is also the
recipient of certain representations, warranties and indemnification from
Purchaser pursuant to the Real Property Purchase Agreement. Accordingly,
whether the $50,000 threshold referenced above in this Section 5.5(b) has been
exceeded is to be calculated inclusive of any "Damages" that are suffered or
incurred by any of the "Seller's Indemnities", as referenced in Section
13.5(ii) of the Real Property Purchase Agreement.
(c) The obligations of the parties hereto to
indemnify and hold harmless a Person, pursuant to Sections 5.2(a) and 5.3(a)
above, shall terminate when the applicable representation and warranty
terminates pursuant to Section 5 .1 (a) above; provided however, such
obligation to indemnify and hold harmless shall not terminate with respect to
any matter about which an Indemnitee shall have, before the expiration of the
applicable time period, delivered written notice alleging the existence of a
Breach of any of such representations and warranties and asserting a claim for
recovery under Section 5.
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5.6 DEFENSE OF THIRD PARTY CLAIMS BY SELLER. In the event
of the assertion or commencement by any Person of any claim or Proceeding with
respect to which Seller may become obligated to indemnify, hold harmless,
compensate or reimburse any Purchaser Indemnitee pursuant to this Section 5,
Seller shall defend such claim or Proceeding at its sole expense, in which
case:
(a) Seller shall proceed to defend such claim or
Proceeding in a diligent manner with counsel reasonably satisfactory to
Purchaser;
(b) Purchaser shall make available to Seller any
non-privileged documents and materials in the possession of Purchaser that may
be necessary to the defense of such claim or Proceeding;
(c) Seller shall endeavor to keep Purchaser
informed of all material developments and events relating to such claim or
Proceeding;
(d) Purchaser shall have the right to
participate, at its own cost, in the defense of such claim or Proceeding;
(e) Purchaser shall cooperate with Seller, in a
timely manner, in the defense of such claim or Proceeding; and
(f) Seller shall have the right to settle, adjust
or compromise such claim or Proceeding with the prior written consent of
Purchaser; provided, however, that Purchaser shall not unreasonably withhold,
delay or condition such consent.
5.7 DEFENSE OF THIRD PARTY CLAIMS BY PURCHASER. In the
event of the assertion or commencement by any Person of any claim or Proceeding
with respect to which Purchaser may become obligated to indemnify, hold
harmless, compensate or reimburse any Seller Indemnitee pursuant to this
Section 5, Purchaser shall defend such claim or Proceeding at its sole expense,
in which case:
(a) Purchaser shall proceed to defend such claim
or Proceeding in a diligent manner with counsel reasonably satisfactory to
Seller;
(b) Seller shall make available to Purchaser any
non-privileged documents and materials in the possession of Seller that may be
necessary to the defense of such claim or Proceeding;
(c) Purchaser shall endeavor to keep Seller
informed of all material developments and events relating to such claim or
Proceeding;
(d) Seller shall have the right to participate,
at its own cost, in the defense of such claim or Proceeding;
(e) Seller shall cooperate with Purchaser, in a
timely manner, in
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the defense of such claim or Proceedings; and
(f) Purchaser shall have the right to settle,
adjust or compromise such claim or Proceeding with the prior written consent of
Seller; provided, however, that Purchaser shall not unreasonably withhold,
delay or condition such consent.
5.8 EXERCISE OF REMEDIES BY INDEMNITEES. Notwithstanding
anything herein to the contrary, no Indemnitee (other than Purchaser or any
successor thereto or assign thereof for the Purchaser Indemnitees or Seller or
any successor thereto or assign thereof for the Seller Indemnitees) shall be
permitted to assert any indemnification claim or exercise any other remedy
under this Agreement.
SECTION 6. ADDITIONAL COVENANTS AND AGREEMENTS.
6.1 INTERIM CONDUCT OF THE BUSINESS. At all times from
and after the date of this Agreement and through and including the Closing
Date, Seller shall cause the Club to be operated only in the lawful, ordinary
and usual course of business, and Seller shall not take any action inconsistent
therewith or engage in any transaction other than in the lawful, ordinary and
usual course of business as heretofore conducted. Without limiting the
foregoing, Seller shall maintain in full force and effect until the Closing
Date a policy or policies of insurance on the Purchased Assets which provide a
scope and amount of coverage which are usual and customary in Seller's
business; not make any non-ordinary wage or salary increases or severance
packages; and subject to Purchaser's prior reasonable written approval, not
make any material changes in its member billing practices or rates, or enter
into any material third party agreements. Seller shall maintain all of the
Purchased Assets through Closing in substantially the same level of repair as
the Purchased Assets were in during Purchaser's physical inspection of the
Purchased Assets on May 20, 1997, ordinary wear and tear excepted. Seller
shall remedy prior to Closing any and all violations of any Legal Requirement
relating to all or any part of the Purchased Assets of which Seller had
Knowledge prior to Closing.
6.2 STANDSTILL BY SELLER. From and after the date hereof
and through and including the Closing and for so long as Purchaser shall not be
in default under this Agreement, Seller shall not directly or indirectly,
solicit or initiate discussions or engage in negotiations with, or provide any
information to, or authorize any financial advisor or other person to solicit
or initiate discussions or engage in negotiations with, or provide any such
information to, any corporation, partnership, person or other entity or group
(other than Purchaser) concerning any possible proposal regarding a sale of
shares of capital stock of, or a merger, consolidation, sale of assets or other
similar transaction involving, Seller or any division or asset of Seller.
6.3 ACCESS. From the date hereof through the Closing
Date, Seller shall give Purchaser and its Representatives, or cause them to be
permitted, during normal business hours and upon reasonable notice, full access
to all properties, books, files, data, contracts, leases, commitments and
records of Seller and the Club, and during this period Seller shall furnish
Purchaser with all financial and operating data and all other information
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as to the business, properties and assets of Seller and the Club as Purchaser
may from time to time reasonably request; provided, however, that such access
and investigation shall not interfere with the conduct of the Club by Seller.
At Purchaser's reasonable request, Seller shall direct its Representatives to
cooperate with Purchaser pursuant to this Section 6.3 at no additional cost to
Purchaser. In undertaking its due diligence, Purchaser shall not disturb, to
the minimum extent reasonably possible, the operations of the Club and will
communicate with only those employees of Seller as Seller shall reasonably
authorize with the scope and tenor of such communications to be subject to the
reasonable prior approval of Seller; it being agreed, however, that the purpose
of the foregoing restrictions are to minimize disruption to the operations of
the Club, to the minimum extent reasonably possible, and to preserve its value
as a going concern and not to limit the scope or depth of the information to be
made available to Purchaser in its due diligence. The exercise by Purchaser of
any of the preceding rights, or any other act of Purchaser, shall not negate
any representation, warranty or covenant of Seller or modify any of Purchaser's
rights or Seller's obligations in the event of any Breach by Seller of any of
Seller's representations, warranties or covenants of this Agreement. Purchaser
shall indemnify, defend and hold harmless Seller from and against any and all
Damages arising out of any entry within the Club by Purchaser or its
Representatives. The indemnification of Seller by Purchaser in the preceding
sentence shall survive any termination of this agreement or the Closing for a
period of 3 years from and after the date of termination or the Closing, as the
case may be.
6.4 PRESERVATION OF BUSINESS AND RELATIONSHIPS. From the
date hereof until the Closing, Seller shall use its commercially reasonable
efforts to preserve the Club's business and its organization intact, including
without limitation to preserve Seller's present relationships with suppliers,
customers and others having business relationships with Seller regarding the
Club. Seller shall promptly arrange for utility telephone service to be
transferred to Purchaser at Closing.
6.5 NO INCONSISTENT ACTION. Each of the parties hereto
will use such party's commercially reasonable efforts to consummate the
transaction contemplated by this Agreement and shall not take any action
inconsistent with such party's obligations hereunder or which could hinder or
delay the consummation of the transactions contemplated hereby.
6.6 INVESTMENT OBLIGATION. Purchaser shall invest not
less than $1.4 million in the Club during the first 3 years following the
Closing, which investment shall include, without limitation, any expenditures
on furnishings, fixtures or equipment. Such expenditures may, but need not, be
similar in nature and magnitude to those described in the list of possible
improvements set forth in the attached Schedule 6.6.
6.7 BULK SALE. At or prior to Closing, Seller, at its
expense, shall have fully complied with all bulk sales laws (if any) applicable
to the Transactions.
6.8 LIQUOR LICENSE. Seller shall cooperate with Purchaser
(without cost or liability to Seller) in Purchaser's obtaining a transfer of
the existing liquor license for the
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Club or, if such transfer shall not be possible, obtaining a new liquor
license; it being further agreed, however, that Seller shall not permit
Purchaser to operate under Seller's liquor license, even if such operation
would be permitted by law, after Closing while Purchaser obtains its own liquor
license if Purchaser has not yet obtained its own liquor license at Closing.
Purchaser's failure to have obtained its own liquor license at Closing shall
not be grounds for delaying Closing.
6.9 COMPLIMENTARY MEMBERSHIPS.
(a) [Intentionally omitted]
(b) Up to 71 nontransferable memberships at the
Club held by current or former limited partners of Seller and identified in
Part 2.5(b) of the Disclosure Schedule shall continue to be honored by
Purchaser through, but not later than, August 31, 2005. Such memberships shall
be at the highest level of membership available to members of the Club
immediately before Closing, shall require the payment of no monthly dues or
initiation fees but shall otherwise be subject to Purchaser's rules and
regulations for Club membership and the general operations of the Club applied
on a non-discriminatory basis.
(c) Up to 100 nontransferable memberships for
employees of Seller Companies shall be honored or continue to be honored, as
applicable, by Purchaser until the first to occur, for each such membership, of
(i) the date on which such employee shall cease to be an employee of a Seller
Company, (ii) the date on which such individual ceases to maintain his or her
primary residence in the greater Las Vegas area or (iii) the date occurring 2
years after the Closing Date. If a particular such membership terminates
pursuant to either of the foregoing clauses (i) or (ii), then such membership
shall become available for another employee of the Seller Companies on the same
terms as set forth in this Section 6.9(c). Each such membership shall be at
the level of benefits elected by such employee, from time to time and subject
to the then availability of the benefits so elected, shall require the payment
of no initiation fees, shall require the payment of 50% of the otherwise
applicable monthly dues and shall otherwise be subject to Purchaser's rules and
regulations for Club memberships and the general operations of the Club applied
on a non-discriminatory basis. The employees currently holding such
memberships are set forth in Part 2.5(b) of the Disclosure Schedule. The
"Seller Companies" are Greenspun, Inc.; ANC, Inc,; Las Vegas Sun; Prime Cable;
Nextlink; Primetel; Hospitality Network; Barleys Casino; Seven Hills; and HBC
Publications.
(d) Subject to the terms and conditions of this
Section 6.9, each of the memberships described in this Section 6.9 shall remain
valid for so long as such membership is kept in good standing in accordance
with the rules of the Club consistently applied. Nothing in this Section 6.9
shall give any recipient of a membership described in this Section 6.9 any
rights against Purchaser if Purchaser shall, from time to time, either cease
operating the Club or change the manner of its operations, in any such instance
for any reason whatsoever. All such memberships shall automatically terminate
upon any sale of the Club by Purchaser to a non-Affiliate. The parties
acknowledge and agree that the
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value attributable to these memberships is $0.
6.10 [Intentionally omitted]
6.11 ACCESS TO RECORDS. For a period of seven years from
and after Closing, upon reasonable prior written notice to Purchaser, Purchaser
shall provide Seller, from time to time, with reasonable access to the books
and records for the Club's operations prior to Closing if Seller demonstrates,
to Purchaser's reasonable satisfaction, a reasonable need for such access.
Seller shall, at its own expense, be permitted to make copies of any such
records, provided that Seller shall (i) keep all such information confidential
to the extent not inconsistent with the purpose for which such access was
sought and (ii) return all such information to Purchaser, if requested to do so
by Purchaser, when Seller has completed its use of such information. Seller's
exercise of this right, if at all and from time to time, shall not be done so
as to interfere with or disrupt the conduct of Purchaser's or the Club's
business or operations.
SECTION 7. MISCELLANEOUS PROVISIONS.
7.1 FURTHER ASSURANCES. Each party hereto shall execute
and/or cause to be delivered to each other party hereto such instruments and
other documents, and shall take such other actions, as such other party may
reasonably request (prior to, at or after the Closing) for the purpose of
carrying out or evidencing any of the Transactions. Without limiting the
generality of the foregoing, at any time and from time to time after the
Closing Date, the parties shall duly execute, acknowledge and deliver all such
further assignments, conveyances, instruments and documents, and will take such
other action consistent with the terms of this Agreement, in each case, as may
be reasonably necessary to assign, transfer and convey to Purchaser good and
marketable title to any and all of the Purchased Assets, free and clear of all
Encumbrances, to carry out the transactions contemplated by this Agreement, and
to comply with the terms hereof. No party will take or knowingly permit to be
taken any action or do or knowingly permit to be done anything in the conduct
of its business, or otherwise, which would be contrary to or in breach of any
of the terms or provisions of this Agreement, or which would cause any of the
representations or warranties contained herein to become untrue or incomplete.
7.2 FEES AND EXPENSES.
(a) Subject to the provisions of Section 5
(including the indemnification and other obligations of Purchaser thereunder)
Seller shall bear and pay all its own Transaction Costs and all Transaction
Costs (including all legal fees and expenses payable to Jolley, Urga, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇) that have been incurred or that are in the future incurred by, on
behalf of or for the benefit of, the Seller (the "Seller Transaction Costs).
(b) Subject to the provisions of Section 5
(including the indemnification and other obligations of Seller thereunder),
Purchaser shall bear and pay all Transaction Costs (including all legal fees
and expenses payable to ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
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▇▇▇▇▇▇ LLP) that have been incurred or that are in the future incurred by, or
on behalf of or for the benefit of, Purchaser (the "Purchaser Transaction
Costs").
7.3 ATTORNEYS' FEES. If any legal action or other legal
proceeding relating to any of the Transactional Agreements or the enforcement
of any provision of any of the Transactional Agreements is brought against any
party hereto, the prevailing party shall be entitled to recover reasonable
attorneys' and expert witness fees, costs and disbursements (in addition to any
other relief to which the prevailing party may be entitled).
7.4 NOTICES. Any notice or other communication required
or permitted to be delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and received when
delivered (by hand, by registered or certified mail, return receipt requested,
by courier or express delivery service or by telecopier with proof of
transmission and receipt) to the address or telecopier number set forth beneath
the name of such party below (or to such other address or telecopier number as
such party shall have specified in a written notice given to the other parties
hereto). In the case of any notice given by telecopier, a confirming copy
shall be sent, as soon as reasonably possible thereafter, by another approved
means specified above.
if to Purchaser: The Sports Club Company, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (not constituting notice) to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to Seller: Green Valley Athletic Club Limited
Partnership
c/o American Nevada Corporation
Green Valley Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (not constituting notice) to.
Jolley, Urga, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to Deposit Holder: Nevada Title Company
Green Valley ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, re escrow no. 97-06-0229 RWC
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (not constituting notice) to the party or
parties not giving such notice to Deposit Holder.
If notice is sent by telecopier, a copy of such notice shall be concurrently
sent by one of the other means set forth in this section. Failure to do so will
not affect the validity and due delivery of such notice.
7.5 PUBLICITY; CONFIDENTIALITY. At all times before and
after the Closing Date and except as may otherwise be required by any Legal
Requirement or by the rules and regulations of the American Stock Exchange or
the Securities and Exchange Commission:
(a) no press release or other publicity
concerning any of the Transactions shall be issued or otherwise disseminated by
or on behalf of the parties hereto unless mutually agreed upon by the parties
in advance. The parties shall issue a mutually approved press release promptly
following Closing. Each of the parties shall continue to keep the existence
and terms of this Agreement and the other Transactional Agreements strictly
confidential except to the extent such information is publicly available,
lawfully obtained from independent sources or as may be required by any Legal
Requirement.
(b) Purchaser agrees to keep confidential and not
to disclose to any third party, other than to Purchaser's actual or potential
lenders or investors or their Representatives, who in turn will agree to hold
such information confidential, any information and material obtained from
Seller or any of its Representatives or to which Purchaser has access related
to the business and assets of Seller except to the extent such information is
publicly available, previously lawfully known to Purchaser, lawfully obtained
from independent sources or as may be required by any Legal Requirement. No
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such information shall be used by any such party for their own benefit.
Purchaser will promptly return, and cause all of its actual and potential
lenders, investors and each of its and their respective Representatives
promptly to return, any and all such information to Seller if Closing does not
occur, for any reason whatsoever.
(c) Seller agrees to keep confidential and not to
disclose to any third party, other than to Seller's actual or potential lenders
or investors or their Representatives, who in turn will agree to hold such
information confidential, any information and material obtained from Purchaser
or any of their respective Representatives or to which Seller has access
related to the business and assets of Purchaser except to the extent such
information is publicly available, previously lawfully known to Seller,
lawfully obtained from independent sources or as may be required by any Legal
Requirement. No such information shall be used by any such party for their own
benefit. Seller will promptly return, and cause all of its actual and
potential lenders, investors and each of its and their respective
Representatives promptly to return, any and all such information to Purchaser
if Closing does not occur, for any reason whatsoever.
7.6 [INTENTIONALLY OMITTED]
7.7 TIME OF THE ESSENCE. In connection with consummation
of the Acquisition and the Transactions, the parties agree that time is of the
essence; provided, however, that if any period or time set forth in this
Agreement ends or occurs on a day which is not a Business Day, then such period
or time shall instead end on the next immediately following Business Day.
7.8 HEADINGS. The underlined headings contained in this
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.
7.9 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute one agreement.
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7.10 GOVERNING LAW;. This Agreement shall be construed in
accordance with, and governed in all respects by the internal laws of the State
of Nevada (without giving effect to principles of conflicts of laws).
7.11 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon: the Seller and its successors and assigns (if any); and Purchaser
and its successors and assigns (if any). This Agreement shall inure to the
benefit of: Seller; Purchaser; and the respective successors and assigns (if
any) of the foregoing. Purchaser may only assign all of its rights under this
Agreement (including its indemnification rights under Section 5.2, and not any
part thereof, and then only if (a) the proposed assignee is a wholly-owned
subsidiary of Purchaser, (b) Seller is provided with a written assignment and
assumption agreement, reasonably acceptable to Seller, executed by Purchaser
and such assignee and pursuant to which such assignee assumes all of
Purchaser's rights, duties and obligations under the Transactional Agreements
and (c) Purchaser concurrently assigns all of its rights under the Real
Property Purchase Agreement to the same assignee in accordance with the terms
and conditions of the Real Property Purchase Agreement. Any such permitted
assignment and assumption shall relieve Purchaser of all of its duties and
obligations under the Transactional Agreements, except that Purchaser shall
remain liable, jointly and severally with any such assignee, for the
performance of the obligation to invest not less than $1.4 million in the Club
during the first 3 years following the Closing set forth in Section 6.6.
7.12 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights
and remedies of the parties hereto shall be cumulative (and not alternative).
Seller agrees that in the event of any Breach or threatened Breach by Seller of
any covenant, obligation or other provision set forth in this Agreement,
Purchaser shall be entitled (in addition to any other remedy that may be
available to it) to (i) a decree or order of specific performance or mandamus
to enforce the observance and performance of such covenant, obligation or other
provision, and (ii) an injunction restraining such Breach or threatened Breach.
7.13 WAIVER.
(a) Except as expressly set forth herein, no
failure on the part of any Person to exercise any power, right, privilege or
remedy under this Agreement, and no delay on the part of any Person in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege
or remedy.
(b) Except as expressly set forth herein, no
Person shall be deemed to have waived any claim arising out of this Agreement,
or any power, right, privilege or remedy under this Agreement, unless the
waiver of such claim, power, right, privilege or remedy is expressly set forth
in a written instrument duly executed and delivered on behalf of such Person:
and any such waiver shall not be applicable or have any effect except in the
specific instance in which it is given.
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7.14 AMENDMENTS. This Agreement may not be amended,
modified, altered or supplemented other than by means of a written instrument
duly executed and delivered on behalf of Purchaser and Seller.
7.15 SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as
to which it is determined to be invalid, unlawful, void or unenforceable, shall
not be impaired or otherwise affected and shall continue to be valid and
enforceable to the fullest extent permitted by law.
7.16 PARTIES IN INTEREST. Except for the provisions of
Section 5 hereof, none of the provisions of this Agreement is intended to
provide any rights or remedies to any Person other than the parties hereto and
their respective successors and assigns (if any).
7.17 ENTIRE AGREEMENT. The Transactional Agreements set
forth the entire understanding of the parties relating to the subject matter
thereof and supersede all prior agreements and understandings among or between
any of the parties relating to the subject matter thereof.
7.18 BROKERS. Purchaser and Seller each agrees to
indemnify, defend and hold the other harmless from any Damages arising out of
or in connection with any claim for any brokerage commission, finder's fee,
acquisition fee or like payment asserted against the indemnified party by
virtue of any action taken or allegedly taken by the indemnifying party in
connection with the Acquisition. Without limiting the generality of the
foregoing, Purchaser will pay a single $100,000 commission to The Weatherby
Company, who represents Purchaser, at Closing with respect to the acquisition
of both the Club and the Real Property and will satisfy any other obligation
owed to The Weatherby Company in connection with the closing of the Acquisition
and the acquisition of the Real Property.
7.19 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the
context requires: the singular number shall include the plural, and vice versa;
the masculine gender shall include the feminine and neuter genders; the
feminine gender shall include the masculine and neuter genders; and the neuter
gender shall include the masculine and feminine genders.
(b) The parties hereto agree that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of
this Agreement.
(c) As used in this Agreement, the words
"include" and
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"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references
in this Agreement to "Sections", "Exhibits" and "Schedules" are intended to
refer to Sections of this Agreement and Exhibits and Schedules to this
Agreement, all of which Exhibits and Schedules are hereby incorporated herein
by this reference as if set forth fully herein.
7.20 WAIVER OF JURY. With respect to any dispute arising
under or in connection with this Agreement or any related agreement, as to
which no party invokes the right to arbitration hereinabove provided, or as to
which legal action nevertheless occurs, each party hereby irrevocably waives
all rights it may have to a jury trial, and each party agrees that it will not
seek to consolidate any such action in which a jury trial has been waived with
any other action in which a jury trial cannot be or has not been waived. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY PURCHASER AND
SELLER AND EACH ACKNOWLEDGES THAT NEITHER THE OTHER PARTY NOR ANY PERSON ACTING
ON BEHALF OF THE OTHER PARTY HAS MADE ANY REPRESENTATION OF FACT TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.
PURCHASER AND SELLER EACH FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR
HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND
IN THE MAKING OF THIS WAIVER, BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL. PURCHASER AND SELLER EACH FURTHER ACKNOWLEDGES THAT IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
7.21 AUTHORITY TO SIGN. Each of the individuals executing
this Agreement on behalf of Purchaser and Seller, respectively, represents that
he is duly and validly authorized to do so.
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7.22 SURVIVAL POST-CLOSING. Any provisions of this
Agreement, or any other Transactional Agreement, which require observance,
performance or enforcement after Closing shall survive Closing and shall
continue to be binding on the parties hereto, subject to and in accordance with
the other terms and conditions of this Agreement and the other Transactional
Agreements.
The parties hereto have caused this Asset Purchase Agreement to be
executed and delivered as of May 1, 1997.
SELLER: GREEN VALLEY ATHLETIC CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: Green Valley Sports, Inc.,
a Nevada corporation,
its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
PURCHASER: THE SPORTS CLUB COMPANY, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
1. ACQUISITION. "Acquisition" shall have the meaning specified in Recital
A of the Agreement.
2. ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale or other disposition of all or any portion of the
Seller's business or assets (other than in the Ordinary Course of Business);
(b) the issuance, sale or other disposition of (i) any partnership
interest in the Seller, or (ii) any security, instrument or obligation that is
or may become convertible into or exchangeable for any partnership interest in
the Seller: or
(c) any merger, consolidation, business combination share exchange,
reorganization or similar transaction involving the Seller.
3. AFFILIATE. "Affiliate" shall mean and include:
(i) any current or former shareholder, director or officer of,
as applicable, the Seller or Purchaser;
(ii) any sibling, uncle, aunt, niece or nephew of any person
described in clause (i);
(iii) any ancestor or lineal descendant of any person described
in clauses (i) or (ii);
(iv) any current or former spouse of any person described in
clauses (i), (ii) or (iii) or any person who is a member of the same household
of the person described in clauses (i), (ii) or (iii) or who has resided with
such person for more than 10 days in any calendar year;
(v) any ancestor or lineal descendant of any person described in
clauses (i), (ii), (iii) or (iv);
(vi) any entity or person in which any of the foregoing have a
direct or indirect interest (except through ownership of less than 5% of the
outstanding shares of any entity whose securities are listed on a national
securities exchange or traded in the national over-the-counter market).
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4. ARCHITECTURAL REVIEW COMMITTEE. "Architectural Review Committee" shall
mean the Architectural Review Committee for Town Center established under the
CC&R.
5. ARC ESTOPPEL. "ARC Estoppel" shall mean an estoppel certificate from
the Architectural Review Committee, which shall be in form and substance
identical to the form of estoppel attached hereto and incorporated herein by
this reference as Exhibit H.
6. ASSUMED CONTRACTS. Assumed Contracts shall have the meaning set forth
in Section l.l(d).
7. ASSUMED LIABILITIES. Assumed Liabilities shall have the meaning set
forth in Section 1.3.
8. BENEFIT PLAN. "Benefit Plan" shall mean any defined benefit plan or
defined contribution plan maintained or formerly maintained by Seller or any
predecessor or Affiliate of Seller.
9. ▇▇▇▇ OF SALE. "▇▇▇▇ of Sale" shall have the meaning set forth in
Section 1.5(a) of the Agreement.
10. BREACH. There shall be deemed to be a "Breach" of a representation,
warranty, covenant, obligation or other provision if there is or has been any
inaccuracy in or breach of, or any failure to comply with or perform such
representation, warranty, covenant, obligation or other provision; and the term
"Breach" shall be deemed to refer to any such inaccuracy, breach or failure.
11. BUSINESS DAY. "Business Day" shall mean any day other than Saturday,
Sunday or any other day which is a legal holiday under the laws of either of the
States of California or Nevada.
12. CC&R. "CC&R" shall mean the Third Amendment to and Restatement of
Declaration of Covenants, Conditions and Restrictions recorded February 10, 1993
in Book 930218 as Document No. 00166 of Official Records of ▇▇▇▇▇ County, Nevada
regarding Town Center.
13. CC&R AMENDMENT. "CC&R Amendment" shall mean an amendment to the CC&R
which shall be in form and substance identical to the form of amendment attached
hereto and incorporated herein by this reference as Exhibit G.
14. CERCLA. "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
15. CLOSING. "Closing" shall have the meaning specified in Section 1.9(b)
of the Agreement.
16. CLOSING DATE. "Closing Date" shall mean the date on which the Closing
shall
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occur.
17. CLUB. "Club" shall have the meaning specified in Recital A of the
Agreement.
18. CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
19. CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
20. CONTRACT. "Contract" shall mean any written agreement, contract,
understanding, arrangement instrument, note, guaranty, indemnity,
representation, warranty, deed, assignment, power of attorney, certificate,
purchase order, work order, insurance policy, benefit plan, commitment covenant,
assurance or undertaking of any nature that relate to the Club and/or its
operations.
21. CONTRACT ASSIGNMENT. "Contract Assignment" shall have the meaning set
forth in Section 1.5(a) of the Agreement.
22. DAMAGES. "Damages" shall mean any loss, damage, injury, Liability,
claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including
any reasonable legal fee, expert fee, accounting fee or advisory fee), charge,
reasonable cost (including any reasonable cost of investigation) or reasonable
expense of any nature.
23. DELIVERY ITEMS. "Delivery Items" shall have the meaning set forth in
Section 1.6 of the Agreement.
24. DEPOSIT. "Deposit" shall have the meaning set forth in Section 1.5(b)
of the Agreement.
25. DEPOSIT HOLDER. "Deposit Holder" shall have the meaning set forth in
Section 1.5(b) of the Agreement.
26. DISCLOSURE SCHEDULE. "Disclosure Schedule" shall mean the schedule
(dated as of the date of the Agreement) delivered to Purchaser, a copy of which
is attached to the Agreement and incorporated in the Agreement by reference.
27. DUE DILIGENCE PERIOD. "Due Diligence Period" shall have the meaning
set forth in Section 1.8(a)(vii) of the Agreement.
28. ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, right of possession,
lease, tenancy, license, Order, option, right of first refusal, imperfection of
title, or Tax; provided that Encumbrance shall not include publicly recorded
Encumbrances (i) that are not liens, or (ii) that do not restrict or affect the
intended use of the Purchased Assets. Encumbrance shall further not include any
Taxes that are not yet due and payable if such Taxes are to be prorated between
Purchaser and Seller. Encumbrance shall further not include any matter
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disclosed in the Disclosure Schedule or the Restrictive Use Covenant.
29. ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
company, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
30. ENVIRONMENTAL LAW. "Environmental Law" shall mean CERCLA, the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sections 1100 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections
136 et seq., the Safe Drinking Water Act, 42 U.S.C. Sections 300f et seq., the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq., the Oil Pollution
Act of 1990, 33 U.S.C. Sections 1001 et seq., the Hazardous Materials
Transportation Act, as amended, 42 U.S.C. Sections 1801 et seq., and the
corresponding regulations, state laws and regulations, local ordinances and
permit requirements which may be applicable.
31. ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and all rules, regulations, directives and orders
promulgated thereunder.
32. ESCROW. "Escrow" shall have the meaning set forth in Section 1.5(b) of
the Agreement.
33. EXCLUDED ASSETS. "Excluded Assets" shall have the meaning set forth in
Section 1.2 of the Agreement.
34. EXCLUDED CONTRACT. "Excluded Contract" shall mean any Seller Contract,
other than the Membership Agreements, that:
(a) Seller has entered into in the Ordinary Course of Business;
(b) has a term of less than 30 days or may be terminated by the
Seller (without penalty) 30 days after the delivery of a termination notice by
the Seller; and
(c) does not contemplate or involve the payment of cash or other
consideration in an amount or having a value in excess of $10,000.
35. FACILITIES SCHEDULE. "Facilities Schedule" shall have the meaning set
forth in Section 2.5 of the Agreement.
36. FEE OWNER. "Fee Owner" shall have the meaning set forth in Recital B
of the Agreement.
37. FISCAL 1994 BALANCE SHEET. "Fiscal 1994 Balance Sheet" shall have the
meaning set forth in Section 2.2(a)(i) of the Agreement.
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38. FISCAL 1995 BALANCE SHEET. "Fiscal 1995 Balance Sheet" shall have the
meaning set forth in Section 2.2(a)(ii) of the Agreement.
39. FISCAL 1996 BALANCE SHEET. "Fiscal 1996 Balance Sheet" shall have the
meaning set forth in Section 2.2(a)(iii) of the Agreement.
40. GENERAL PARTNER. "General Partner" shall mean Green Valley Sports,
Inc., a Nevada corporation.
41. GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean
any:
(a) permit, license, certificate, franchise, concession, approval,
consent, ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or authorization
issuable or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement; or
(b) right under any Contract with any Governmental Body.
42. GOVERNMENTAL BODY. "Governmental Body" shall mean any:
(a) nation, principality, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department, agency, bureau,
branch, office, commission council, board, instrumentality, officer, official,
representative, organization, unit, body or Entity and any court or other
tribunal);
(d) multi-national organization or body; or
(e) individual, Entity or body exercising, or entitled to exercise,
any executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature.
43. HAZARDOUS MATERIAL. "Hazardous Material" shall mean:
(a) any petroleum, waste oil, crude oil, asbestos, urea formaldehyde
or polychlorinated biphenyl:
(b) any waste, gas or other substance or material that is explosive
or radioactive;
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(c) any "hazardous substance," "pollutant," "contaminant," "hazardous
waste." "regulated substance." "hazardous chemical" or "toxic chemical" as
designated, listed or defined (whether expressly or by reference) in any
Environmental Law (including CERCLA, any other so-called "superfund" or
"superlien" law, the Resource Conservation Recovery Act, the Federal Water
Pollution Control Act, the Toxic Substances Control Act, the Emergency Planning
and Community Right-to-Know Act and the respective regulations promulgated
thereunder);
(d) any other substance or material (regardless of physical form) or
form of energy that is subject to any Legal Requirement which regulates or
establishes standards of conduct in connection with, or which otherwise relates
to, the protection of human health, plant life, animal life, natural resources,
property or the enjoyment of life or property from the presence in the
environment of any solid, liquid, gas, odor, noise or form of energy; and
(e) any compound, mixture, solution, product or other substance or
material that contains any substance or material referred to in clause "(a)",
"(b)", "(c)" or "(d)" above
44. INDEMNITEES. "Indemnitees" shall as the context may indicate sometimes
refer to either the Purchaser Indemnitees or the Seller Indemnitees, or both.
45. IDENTIFIED APPROVALS. "Identified Approvals" shall have the meaning
set forth in Section 1.8(a)(iii).
46. INVENTORY. "Inventory" shall have the meaning set forth in Section
1.1(i) of the Agreement.
47. IP LICENSE. "IP License" shall have the meaning set forth in Section
1.6(c)(iv).
48. KNOWLEDGE. An individual shall be deemed to have "Knowledge" of a
particular fact or other matter only if such individual is actually aware of
such fact or other matter.
In the case of Purchaser, Purchaser shall be deemed to have "Knowledge" of
a particular fact or other matter only if any of D. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇,
or ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ has Knowledge of such fact or other matter.
In the case of Seller, Seller shall be deemed to have "Knowledge" of a
particular fact or other matter only if any of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇ has Knowledge of such fact or other matter.
49. LEASES. "Leases" shall have the meaning set forth in Section 2.7 of
the Agreement.
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50. LEASE ASSIGNMENT. "Lease Assignment" shall have the meaning set forth
in Section 1.5(a) of the Agreement.
51. LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state
local, municipal, foreign or other law, statute, legislation, constitution, law
resolution, ordinance, code edict, decree, proclamation, treaty, convention,
rule, regulation, ruling, directive, pronouncement, requirement, specification,
determination, decision, opinion or interpretation issued enacted adopted,
passed, approved, promulgated, made, implemented or otherwise put into effect by
or under the authority of any Governmental Body.
52. LIABILITY. "Liability" shall mean any debt, obligation, duty or
liability of any nature (whether known or unknown and whether absolute, accrued,
contingent or otherwise), regardless of whether such debt, obligation, duty or
liability would be required to be disclosed on a balance sheet and regardless of
whether such debt obligation, duty or liability is immediately due and payable.
53. MEMBER. "Member" shall mean an individual who as of the Closing Date
is a member in good standing of the Club under the terms of a valid Membership
Agreement.
54. MEMBERSHIP AGREEMENT. "Membership Agreement" shall mean any written
agreement between a Member and, or on behalf of, the Seller pursuant to which
such Member is entitled to use of the facilities and services of the Seller at
the Club.
55. MODIFICATION. "Modification" shall have the meaning set forth in
Section 1.8(b) of the Agreement.
56. ORDER. "Order" shall mean any:
(a) order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, verdict, sentence, subpoena,
writ or award issued, made, entered, rendered or otherwise put into effect by or
under the authority of any court, administrative agency or other Governmental
Body or any arbitrator or arbitration panel; or
(b) Contract with any Governmental Body that is or has been entered
into in connection with any Proceeding.
57. ORDINARY COURSE OF BUSINESS. An action taken by or on behalf of the
Seller shall not be deemed to have been taken in the "Ordinary Course of
Business" unless
(a) such action is generally consistent with the Seller's past
practices and is taken in the ordinary course of the Seller's normal day-to-day
operations; and
(b) such action is not required to be authorized by the Seller's
stockholders, the Seller's board of directors or any committee of the Seller's
board of directors and does not require any other separate or special
authorization of any nature.
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58. OUTSIDE CLOSING DATE. "Outside Closing Date" shall have the meaning
set forth in Section 1.9(a) of the Agreement.
59. PERSON. "Person" shall mean any individual, Entity or Governmental
Body.
60. PERSONAL PROPERTY LEASES. "Personal Property Leases" shall have the
meaning set forth in Section 1.1(b) of the Agreement.
61. PROCEEDING. "Proceeding" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), prosecution, contest, hearing, inquiry,
inquest, audit, examination or investigation brought, conducted or heard by or
before, or that otherwise involves, any Governmental Body, judge, arbitrator or
arbitration panel.
62. PROPRIETARY ASSET. "Proprietary Asset" shall mean any patent
application, trademark (whether registered or unregistered and whether or not
relating to a published work), trademark application, trade name, fictitious
business name, service ▇▇▇▇ (whether registered or unregistered), service ▇▇▇▇
application, copyright (whether registered or unregistered), copyright
application, trade secret, know-how, franchise, system, computer software,
invention, design, blueprint, proprietary product, technology, proprietary right
or other intellectual property right or intangible asset.
63. PURCHASE PRICE. "Purchase Price" shall have the meaning set forth in
Section 1.5(a) of the Agreement.
64. PURCHASED ASSETS. "Purchased Assets" shall have the meaning set forth
in Section 1.1 of the Agreement.
65. PURCHASER. "Purchaser" shall mean The Sports Club Company, Inc., a
Delaware corporation.
66. PURCHASER DELIVERY ITEMS. "Purchaser Delivery Items" shall have the
meaning set forth in Section 1.6(b) of the Agreement.
67. PURCHASER INDEMNITEES. "Purchaser Indemnitees" shall mean the
following Persons:
(a) Purchaser;
(b) Purchaser's current and future Affiliates;
(c) the respective Representatives of the Persons referred to in
clauses (a) and (b) above; and
(d) the respective successors and permitted assigns of the Persons
referred to in clauses (a), (b), and (c) above.
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68. PURCHASER TRANSACTION COSTS. "Purchaser Transaction Costs" shall have
the meaning specified in Section 7.2(b) of the Agreement.
69. REAL PROPERTY. "Real Property" shall have the meaning specified in
Recital B of the Agreement.
70. REAL PROPERTY LEASES. "Real Property Leases" shall have the meaning
set forth in Section 1.1(a).
71. REAL PROPERTY PURCHASE AGREEMENT. "Real Property Purchase Agreement"
shall have the meaning specified in Recital C of the Agreement.
72. RELATED PARTY. Each of the following shall be deemed to be a "Related
Party":
(a) Seller;
(b) each individual who is, or who has been within the past twelve
(12) months, an officer or shareholder of the Seller or of any of its
predecessors in interest;
(c) each member of the family of each of the individuals referred to
in clauses "(a)" and "(b)" above; and
(d) any Entity (other than the Seller) in which any one of the
individuals referred to in clauses "(a)", "(b)" and "(c)" above holds (or in
which more than one of such individuals collectively hold), beneficially or
otherwise, a material voting, proprietary or equity interest.
73. REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives. Seller
and all other Related Parties shall be deemed to be "Representatives" of Seller.
74. RESTRICTIVE USE COVENANT. "Restrictive Use Covenant" shall mean a
covenant restricting the uses to which the Real Property may be put, the form of
which is attached hereto as Exhibit E, that is to be executed by Fee Owner and
recorded as an Encumbrance against the Real Property as part of the closing
under the Real Property Purchase Agreement.
75. SELLER. "Seller" shall mean Green Valley Athletic Club Limited
Partnership, a Delaware limited partnership.
76. SELLER CONTRACT. "Seller Contract" shall mean any Contract:
(a) to which the Seller is a party;
(b) by which the Seller or any of its assets is bound or under which
the
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Seller has any obligation; or
(c) under which the Seller has any right or interest.
77. SELLER DELIVERY ITEMS. "Seller Delivery Items" shall have the meaning
set forth in Section 1.6(b) of the Agreement.
78. SELLER FINANCIAL STATEMENTS. "Seller Financial Statements" shall have
the meaning set forth in Section 2.2(iv) of the Agreement.
79. SELLER INDEMNITEES. "Seller Indemnities" shall mean the following
Persons:
(a) Seller;
(b) Seller's current and future Affiliates;
(c) the respective Representatives of the Persons referred to in
clauses (a) and (b) above; and
(d) the respective successors and permitted assigns of the Persons
referred to in clauses (a), (b) and (c) above.
80. SELLER TRANSACTION COSTS. "Seller Transaction Costs" shall have the
meaning specified in Section 7.2(a) of the Agreement.
81. SPECIFIED CONTRACTUAL LIABILITIES. "Specified Contractual Liabilities"
shall mean the obligations of the Seller under the Assumed Contracts, but only
to the extent such obligations (a) arise after the Closing Date, (b) do not
arise from or relate to any breach by, or on behalf of, the Seller of any
provision of any of such contracts, (c) do not arise from or relate to any
event, circumstance or condition occurring or existing on or prior to the
Closing Date that, with notice or lapse of time, would constitute or result in a
breach of, any of such contracts, and (d) are ascertainable (in nature and
amount) solely by reference to the express terms of such contracts; provided,
however that notwithstanding anything contained herein or in the Agreement, the
"Specified Contractual Liabilities" shall not include and Purchaser shall not be
required to assume or to perform or discharge, except if and to the extent the
same shall have been prorated as part of the Closing in favor of Purchaser or
except as may otherwise be expressly provided in the Agreement:
(i) any Liability with respect to any accounts payable or any
short-term or long-term indebtedness of the Seller;
(ii) any Liability of the Seller arising from or relating to any
action taken by the Seller, or any failure on the part of the Seller to take any
action, at any time prior to, on or after the Closing Date;
(iii) any Liability of the Seller arising from or relating to
(x) any
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services performed or provided by the Seller, or (y) any claim, Order or
Proceeding against the Seller;
(iv) any Liability of the Seller for the payment of any Tax;
(v) any Liability of the Seller to any employee or former
employee of the Seller (whether for salaries, wages, severance pay, vacation
pay, benefits or other compensation);
(vi) any Liability under any Contact, if (x) an accurate and
complete copy, in all material respects, of such Contract and all amendments
thereto insofar as it and they pertain to such liability shall not have been
furnished to Purchaser by the Seller prior to the Closing Date or (y) except for
any Identified Approvals, any Consent required to be obtained from any Person
with respect to the assignment or delegation to Purchaser of any rights or
obligations under such Contract shall not have been obtained prior to the
Closing Date;
(vii) any obligation of the Seller to indemnify or defend any
other Person against or in connection with any infringement claim or similar
claim;
(viii) any Liability that is inconsistent with or that
constitutes an inaccuracy in, or that arises or exists by virtue of any Breach
of, any covenant or obligation of the Seller; or
(ix) any other Liability that is not specifically included in
the Specified Contractual Liabilities or otherwise is not expressly assumed by
Purchaser in the Agreement.
82. SUBLEASE. "Sublease" shall mean any sublease, license agreement,
concession agreement or other agreement, written or oral, pursuant to which any
Person, other than a Member, has any right to occupy or use any portion of the
Club for any purpose whatsoever.
83. SUBTENANT. "Subtenant" shall mean any party having the right to use or
occupy any portion of the Club under any Sublease.
84. TAX. "Tax" shall mean any tax (including any income tax, franchise
tax, capital gains tax, estimated tax, gross receipts tax, value-added tax,
surtax, excise tax, ad valorem tax transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), (a) imposed,
assessed or collected by or under the authority of any Governmental Body, or (b)
payable pursuant to any tax-sharing agreement or similar Contract.
85. TOWN CENTER. "Town Center" shall mean that certain shopping center
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located on Sunset Road and Olympic Avenue between Mountain Vista Street and
Green Valley Parkway, ▇▇▇▇▇▇▇▇▇, Nevada.
86. TRANSACTIONAL AGREEMENTS. "Transactional Agreements" shall mean:
(a) the Agreement;
(b) the Contract Assignment;
(c) the Lease Assignment; and
(d) the ▇▇▇▇ of Sale.
87. TRANSACTION COSTS. "Transaction Costs" shall mean all fees, costs and
expenses (including all legal, auditing and accounting expenses) that have been
incurred or that are in the future incurred by, on behalf of or for the benefit
of any party hereto in connection with:
(a) the negotiation, preparation and review of any letter of intent
or similar document relating to any of the Transactions;
(b) the investigation and review conducted by the Purchaser and its
Representatives with respect to the Seller's business;
(c) the negotiation, preparation and review of this Agreement
(including the Disclosure Schedule), the other Transactional Agreements and all
certificates, opinions and other instruments and documents delivered or to be
delivered in connection with the Transactions;
(d) the preparation and submission of any filing or notice required
to be made or given in connection with any of the Transactions, and the
obtaining of any Consent required to be obtained in connection with any of the
Transactions; and
(e) the consummation and performance of the Transactions.
88. TRANSACTIONS. "Transactions" shall mean (a) the execution and delivery
of the respective Transactional Agreements, and (b) all of the transactions
contemplated by the respective Transactional Agreements, including:
(a) the Acquisition in accordance with the Agreement; and
(b) the performance by Seller and Purchaser of their respective
obligations under the Transactional Agreements and the exercise by the Seller
and Purchaser of their respective rights under the Transactional Agreements.
89. WARN ACT. "WARN Act" shall mean the Workers Adjustment and
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Retraining Notification Act, 29 U.S.C. 2201, as amended and all rules,
regulations, directives and orders promulgated thereunder.
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