1
EXHIBIT 10.1
EXECUTION COPY
PURCHASE AND SALE AGREEMENT
among
ASCENT ENTERTAINMENT GROUP, INC.,
and
ASCENT SPORTS HOLDINGS, INC.
and
KMS SPORTS, LLC,
KMA STICK, LLC,
KMN BALL, LLC,
and
KMC CENTER, LLC
Dated as of April 24, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS...................................................................................2
1.1 Definitions...................................................................................2
ARTICLE II. PURCHASE AND SALE............................................................................18
2.1 AEG Ownership Interests......................................................................18
2.2 HC Ownership Interests.......................................................................18
2.3 LLC-II Membership Interest...................................................................18
2.4 Seller Ascent Arena Company Membership Interests.............................................18
2.5 Purchase Price...............................................................................18
ARTICLE III. COVENANTS OF SELLER..........................................................................19
3.1 Compliance with Contracts and Applicable Law.................................................19
3.2 Conduct of Business in the Ordinary Course...................................................19
3.3 Preservation of Business.....................................................................24
3.4 Maintenance of Insurance Coverage and Certain Policies.......................................24
3.5 Current Information..........................................................................24
3.6 Preservation of LDA's Ascent Arena Company Membership Interest...............................25
ARTICLE IV. CLOSING......................................................................................25
4.1 Closing......................................................................................25
4.2 Closing Deliveries by AEG....................................................................25
4.3 Closing Deliveries by HC.....................................................................26
4.4 Closing Deliveries by Purchasers.............................................................26
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER.....................................................27
5.1 General Corporate and Partnership Matters....................................................27
5.2 Title to Membership Interests and Partnership Interests......................................29
5.3 Financial Statements; Undisclosed Liabilities; Notes; Distributions..........................35
5.4 Litigation...................................................................................36
5.5 Employees....................................................................................36
5.6 Employee Benefits............................................................................36
5.7 Labor and Employment Matters.................................................................38
5.8 Intellectual Property........................................................................39
5.9 Environmental Compliance.....................................................................39
5.10 Insurance....................................................................................40
5.11 Tax Matters..................................................................................41
5.12 Sports Entities..............................................................................44
5.13 Ascent Arena Entities........................................................................48
5.14 Pepsi Center.................................................................................49
5.15 Mountain Mobile..............................................................................51
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5.16 Development Property.........................................................................52
5.17 Advisory Fees................................................................................52
5.18 Operations Since Effective Date..............................................................52
5.19 No Other Representations or Warranties.......................................................52
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.................................................53
6.1 Existence and Power..........................................................................53
6.2 Governmental Authorization...................................................................53
6.3 Non-Contravention............................................................................53
6.4 Securities Matters...........................................................................54
6.5 Advisory Fees................................................................................54
6.6 Litigation...................................................................................55
6.7 Beneficial Ownership.........................................................................55
6.8 No Other Representations.....................................................................55
6.9 Financial Matters............................................................................55
ARTICLE VII. CONDITIONS TO CLOSING........................................................................56
7.1 Conditions to Obligations of Purchasers......................................................56
7.2 Conditions to Obligations of Seller..........................................................58
ARTICLE VIII. TERMINATION..................................................................................59
8.1 Mutual Agreement.............................................................................59
8.2 Default by Seller............................................................................59
8.3 Default by Purchasers........................................................................60
8.4 Failure to Close.............................................................................60
8.5 Effect of Termination........................................................................60
ARTICLE IX. OTHER AGREEMENTS.............................................................................60
9.1 Further Assurances...........................................................................60
9.2 Certain Filings..............................................................................61
9.3 Administration of Accounts...................................................................61
9.4 Guarantee of Performance.....................................................................61
9.5 Taxes........................................................................................61
9.6 Employee Benefit Plans.......................................................................67
9.7 Publicity....................................................................................68
9.8 Costs and Expenses...........................................................................68
9.9 Conditions to Closing........................................................................69
9.10 City Consent.................................................................................69
9.11 NBA and NHL Consents.........................................................................69
9.12 Purchase and Sale of LDA Ascent Arena Membership Interest....................................69
9.13 Limitations on Required Actions..............................................................70
9.14 Amendment of Ascent Operating Agreement......................................................70
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ARTICLE X. MISCELLANEOUS................................................................................70
10.1 Notices......................................................................................70
10.2 Amendments; No Waivers.......................................................................72
10.3 Successors and Assigns.......................................................................72
10.4 Governing Law................................................................................72
10.5 Counterparts; Effectiveness..................................................................72
10.6 Entire Agreement.............................................................................73
10.7 Captions.....................................................................................73
10.8 Severability.................................................................................73
10.9 Construction.................................................................................73
10.10 Cumulative Remedies..........................................................................73
10.11 Survival of Representations and Covenants....................................................74
10.12 No Third Party Beneficiaries.................................................................74
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EXHIBITS AND SCHEDULES
EXHIBIT "A-1" Arena Land Legal Description
EXHIBIT "A-2" Development Property Legal Description
EXHIBIT "A-3" Auraria Lease Parcels Legal Description
EXHIBIT "B" Permitted Liens
SCHEDULE 1.1 Pepsi Center Plans and Specifications
SCHEDULE 3.2(a)(vi) Payable Indebtedness
SCHEDULE 3.2(b)(vii) Prepayable Arena Entities' and Development Property
Indebtedness
SCHEDULE 3.4 Maintenance of Insurance Coverage and Certain Policies
SCHEDULE 5.1(f) Subsidiaries/Advances/Investments
SCHEDULE 5.2 Exceptions to Title
SCHEDULE 5.2(b)(iii) Mountain Mobile Membership Interest
SCHEDULE 5.2(g) Restrictions
SCHEDULE 5.3(a) Financial Statements
SCHEDULE 5.3(b) Undisclosed Liabilities
SCHEDULE 5.4 Litigation
SCHEDULE 5.5(a) Sports Entities' Employees
SCHEDULE 5.5(b) Ascent Arena Entities' Employees
SCHEDULE 5.5(c) Key Employee Resignations
SCHEDULE 5.6(a)(i) Purchased Entities' Employee Plans
SCHEDULE 5.6(a)(iv) Purchased Entities' Employee Plan Accelerated Vesting
SCHEDULE 5.6(d) Multiemployer Plan Contingent Liability
SCHEDULE 5.7(a) Labor and Employment Matters
SCHEDULE 5.8(a) Intellectual Property
SCHEDULE 5.10(a) Sports Entities' Insurance Policies
SCHEDULE 5.10(b) Ascent Arena Entities Insurance Policies
SCHEDULE 5.11(a)(vi)(A) Tax Matters - Government Audits and Examinations
SCHEDULE 5.11(a)(vi)(B) Tax Matters - Deficiencies
SCHEDULE 5.11(a)(vi)(D) Tax Matters - Affiliated Groups
SCHEDULE 5.11(a)(vi)(E) Tax Matters - List of Consolidated, Combined or Unitary
State Income Tax Returns
SCHEDULE 5.11(a)(vi)(F) Tax Matters - Extensions of Time Requested to File Income
Tax Returns
SCHEDULE 5.11(a)(vi)(G) Tax Matters - Tax Sharing Agreements
SCHEDULE 5.11(a)(vii) Tax Matters - General Disclosures
SCHEDULE 5.12(a) Sports Entities - Absence of Certain Changes
SCHEDULE 5.12(b)(i) Sports Entities' Contracts
SCHEDULE 5.12(c)(vi) Survey Matters
SCHEDULE 5.12(e) Affiliate Contracts
SCHEDULE 5.12(f)(i) Sports Entities' Permits
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SCHEDULE 5.12(f)(ii) Sports Entities' Required Governmental/Contractual
Approvals/Consents
SCHEDULE 5.12(g) Compliance with Laws
SCHEDULE 5.13(d) Advance Booking Contracts
SCHEDULE 5.13(e) Ascent Arena Entity Contracts
SCHEDULE 5.14(b)(ii) Arena Contracts
SCHEDULE 5.14(b)(iv) Sale and Servicing Delegation of Duties
SCHEDULE 5.14(b)(ix) DURA Obligations
SCHEDULE 5.14(c) Arena Accounts
SCHEDULE 5.15(c) Mountain Mobile Compliance with Laws
SCHEDULE 6.7(a) Beneficial Ownership
SCHEDULE 9.5(j) Allocation Schedule (to be delivered at the time specified in
Section 9.5(j))
SCHEDULE 9.14 Agreed Modifications to Ascent Operating Agreement
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of April
24, 2000 (the "Effective Date"), among ASCENT ENTERTAINMENT GROUP, INC., a
Delaware corporation ("AEG"); ASCENT SPORTS HOLDINGS, INC., a Delaware
corporation ("HC" and, together with AEG, "Seller"); KMS SPORTS, LLC, a Missouri
limited liability company ("KMS Sports"); KMA STICK, LLC, a Missouri limited
liability company ("KMA Stick"); KMN BALL, LLC, a Missouri limited liability
company ("KMN Ball"); and KMC CENTER, LLC, a Missouri limited liability company
("KMC Center") (together with KMS Sports, KMA Stick and KMN Ball, "Purchasers"
and each individually, a "Purchaser").
RECITALS
A. AEG owns 100% of the capital stock of HC and HC owns 100% of the
membership interests of each of Ascent Sports LLC, a Delaware limited liability
company ("LLC-I"), and Ascent Arena and Development LLC, a Delaware limited
liability company ("LLC-II").
B. AEG and HC desire to sell to KMC Center, and KMC Center desires to
purchase from HC, 100% of the membership interests of LLC-II (the "LLC-II
Membership Interest"), all on the terms and conditions set forth in this
Agreement.
C. AEG and LLC-II own, in the aggregate, 93.48% of the membership
interests in Ascent Arena Company, LLC, a Colorado limited liability company
("Ascent Arena Company") (collectively, "Seller Ascent Arena Company Membership
Interests," and each individually a "Seller Ascent Arena Company Membership
Interest"). Liberty Denver Arena LLC, a Delaware limited liability company
("LDA"), owns the remaining 6.52% of the membership interests in Ascent Arena
Company (the "LDA Ascent Arena Company Membership Interest"). Ascent Arena
Company in turn owns the new indoor arena and related parking and site
improvements (including the Infrastructure Improvements as defined in the
Redevelopment Agreement) on the Arena Land and adjacent property, called the
"Pepsi Center," which is a state of the art sports and entertainment center with
seating for up to 20,000 occupants, depending on the event specific
configuration (the "Pepsi Center").
D. AEG desires to sell to KMS Sports, and KMS Sports desires to
purchase from AEG, its Ascent Arena Company Membership Interest, all on the
terms and conditions set forth in this Agreement. LDA desires to retain, and KMC
Center desires LDA to retain, the LDA Ascent Arena Company Membership Interest,
unless LDA is required to sell to KMC Center, and KMC Center is required to
purchase from LDA, the LDA Ascent Arena Company Membership Interest pursuant to
the terms and conditions set forth in this Agreement.
E. AEG owns a 1% membership interest (the "AEG Avalanche Membership
Interest") in Colorado Avalanche, LLC, a Colorado limited liability company
("Avalanche LLC"), and a 1% interest as a limited partner (the "AEG Nuggets LP
Partnership Interest") in The Denver Nuggets Limited Partnership, a Delaware
limited partnership ("Nuggets LP"). HC owns the remaining 99% of the membership
interests in Avalanche LLC (the "HC Avalanche Membership Interest"). LLC-I
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owns a 1% interest in Nuggets LP as a general partner (the "LLC-I Nuggets LP
Partnership Interest") and HC owns the remaining 98% of the interests in Nuggets
LP as a limited partner (the "HC Nuggets LP Partnership Interest").
F. Nuggets LP owns and operates the professional basketball team known
as the "Denver Nuggets" (the "Nuggets") and holds a franchise and membership in
the National Basketball Association (the "NBA"). Nuggets LP also owns (i)
subject to the City Transfer, fee title to the real property located in Denver,
Colorado on which the Pepsi Center was constructed, which real property is more
particularly described on Exhibit "A-1" (the "Arena Land"), and (ii) a 1/3
membership interest (the "Mountain Mobile Membership Interest") in Mountain
Mobile TV Limited Liability Company, a Nevada limited liability company
("Mountain Mobile").
G. Avalanche LLC owns and operates the professional hockey team known
as the "Colorado Avalanche" (the "Avalanche") and holds a franchise and
membership in the National Hockey League (the "NHL").
H. AEG desires to sell, on the terms and conditions set forth in this
Agreement, to KMS Sports, and KMS Sports desires to purchase from AEG, (i) the
AEG Nuggets LP Partnership Interest and (ii) the AEG Avalanche Membership
Interest.
I. HC desires to sell, on the terms and conditions set forth in this
Agreement, to KMA Stick, and KMA Stick desires to purchase from HC, the HC
Avalanche Membership Interest.
J. HC desires to sell, on the terms and conditions set forth in this
Agreement, to KMN Ball, and KMN Ball desires to purchase from HC, 100% of the
membership interests in LLC-I (the "LLC-I Membership Interest") and the HC
Nuggets LP Partnership Interest.
NOW, THEREFORE, in consideration of the foregoing recitals, and the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the
following meanings:
"Accounts" means, collectively, (a) the following accounts established
and maintained pursuant to, and as defined in, the Sale and Servicing Agreement:
(i) Collection Account; (ii) Construction Fund Account; (iii) Debt Service
Coverage Account; (iv) Debt Service Reserve Account; (v) Lease Reserve Account;
(vi) Paying Account; (vii) Capitalized Interest Account; and (vii) the Lockbox
Account (for deposit of funds received pursuant to the Revenue Agreements prior
to transfer of such funds to the Collection Account); (b) the Operating Account
established and maintained pursuant to the Operating and Management Agreement;
and (c) any Subservicing
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Account established by Ascent Operating Company as subservicer of the Sale and
Servicing Agreement pursuant to the Operating and Management Agreement.
"Adjusted Purchase Price" has the meaning set forth in Section 2.5.
"Advance Booking Contracts" has the meaning set forth in Section
5.13(d).
"AEG" has the meaning set forth in the introductory paragraph of this
Agreement.
"AEG Avalanche Membership Interest" has the meaning set forth in
Recital E.
"AEG Nuggets LP Partnership Interest" has the meaning set forth in
Recital E.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such other Person; provided, however, that in no event will AT&T Corp. or
any Affiliate of AT&T Corp. be deemed to be an Affiliate of Seller unless such
Person is Liberty Media Corporation or a Controlled Affiliate of Liberty Media
Corporation. "Control" for purposes of this definition means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership or voting
securities, by contract or otherwise. When used with reference to any natural
Person, the term "Affiliate" also includes (i) such Person's spouse, parents and
descendants (whether by blood or adoption, and including stepchildren), the
spouses of such Persons, and any relative of such Person's spouse who has the
same home as such Person, and (ii) any trust or other estate in which such
Person has a substantial beneficial interest or as to which such Person serves
as trustee or in a similar fiduciary capacity.
"Agreed Adjustment Amount" means $27,500,000.
"Agreement" means this Agreement and all Exhibits and Schedules
attached hereto.
"▇▇▇▇▇ & Company" means ▇▇▇▇▇ & Company Incorporated.
"Allocation Schedule" has the meaning set forth in Section 9.5(j).
"Applicable Law" means, with respect to any Person, any current
domestic or foreign, federal, state or local statute, law, common law,
ordinance, rule, administrative interpretation, regulation, order, writ,
injunction, directive, judgment, decree or other requirement of any Governmental
Authority (including any Environmental Law) applicable to such Person or any of
its Controlled Affiliates or any of their respective properties, assets,
managers, partners, officers, directors, employees, consultants or agents (in
connection with such manager's, partner's, officer's, director's, employee's,
consultant's or agent's activities on behalf of such Person or any of its
Controlled Affiliates).
"Approved Budgets" has the meaning set forth in Section 3.2(e).
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"Architect" means ▇▇▇▇▇▇▇, Obata & Kassabaum, P.C., a Colorado
professional corporation.
"Architect Agreement" means the Agreement for Architectural Services,
dated November 20, 1997, between Architect and Ascent Arena Company with respect
to the Pepsi Center.
"Arena Agreement" means the ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Agreement, dated as of
November 12, 1997, by and among Ascent Arena Company, the City, Nuggets LP and
Avalanche LLC, as amended.
"Arena Contracts" means, collectively, (i) the Arena Agreement; (ii)
the Trust Agreement; (iii) the Operating and Management Agreement; (iv) the Sale
and Servicing Agreement; (v) the Construction Contract; (vi) the Indenture;
(vii) the Ascent Entertainment Assignment; (viii) the Security Documents; (ix)
the User Agreements; (x) the Construction Phase Agreement, dated as of July 29,
1998, among the Denver Arena Trust, Ascent Arena Company and the Indenture
Trustee; (xi) the Revenue Agreements; (xii) the Club Seat Agreements; (xiii) the
Ground Lease; (xiv) the Indemnity Agreement, dated as of July 29, 1998, between
Ascent Arena Company and the Denver Arena Trust; (xv) the Levy Concession
Agreement; (xvi) the ▇▇▇▇▇ Concession Agreement; (xvii) the Redevelopment
Agreement; (xviii) the ERA; (xix) the Advance Booking Contracts; (xx) the
Architect Agreement; (xxi) the Conoco Agreement; (xxii) the Denver Post
Agreement; and (xxiii) the Contracts listed on Schedule 5.13(e).
"Arena Land" has the meaning set forth in Recital F.
"Arena Operating Company" means Ascent Arena Operating Company, LLC, a
Colorado limited liability company.
"Ascent Arena Company" has the meaning set forth in Recital C.
"Ascent Arena Entities" means, collectively, Ascent Arena Company,
LLC-II, Arena Operating Company, and Denver Arena Trust.
"Ascent Entertainment Assignment" means the Ascent Entertainment
Assignment of Certain Payments, dated as of July 29, 1998, among AEG, Denver
Arena Trust, Ascent Arena Company and the Indenture Trustee.
"Ascent Operating Agreement" means the operating agreement entered into
on November 14, 1997, among the then members of Ascent Arena Company, as
amended.
"Ascent Sports 401(k) Plan" has the meaning set forth in Section
9.6(c).
"Assets" means, with respect to any Person, all of such Person's
assets, properties, business, goodwill and rights of every kind and description,
real and personal, tangible and intangible, wherever situated and regardless of
whether reflected on the Financial Statements delivered to Purchasers pursuant
to this Agreement.
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"Authorizations" has the meaning set forth in Section 5.9(a).
"Avalanche" has the meaning set forth in Recital G.
"Avalanche Balance Sheet" means the unaudited balance sheet of
Avalanche LLC as of March 31, 2000.
"Avalanche Contracts" means all Contracts to which Avalanche LLC is a
party or by which it is bound.
"Avalanche LLC" has the meaning set forth in Recital E.
"Balance Sheet Date" means March 31, 2000.
"Business" means the business of owning, managing and operating (a) the
Nuggets as to Nuggets LP, (b) the Avalanche as to Avalanche LLC, (c) the Pepsi
Center and the Development Property as to the Ascent Arena Entities, and (d) the
Mountain Mobile Membership Interest and the business known and conducted as
Ascent Sports (formerly conducted by Ascent Sports, Inc., a Delaware corporation
which was merged into LLC-I) as to LLC-I.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Denver, Colorado or New York, New York are
authorized or required by law to close.
"City" means the City and County of Denver, Colorado.
"City Consent" means the consent of the City to all transactions
contemplated by this Agreement which require the approval or consent of the
City.
"City Lien" means the subordinate Lien granted by Ascent Arena Company
to the City on all of Ascent Arena Company's right, title and interest in, to
and under (i) the Luxury Suite License Agreements and the Revenue Agreement
Rights with respect thereto (which Lien was granted by Ascent Arena Company
prior to the conveyance of such agreements and rights by Ascent Arena Company to
the Denver Arena Trust pursuant to the Sale and Servicing Agreement), and (ii)
the Excess Collateral (and all proceeds of the foregoing) in order to secure the
obligations of Ascent Arena Company under the Arena Agreement.
"City Transfer" means the conveyance of the Arena Land to the City
pursuant to the Arena Agreement and the transactions related thereto.
"Closing" has the meaning set forth in Section 4.1.
"Closing Date" has the meaning set forth in Section 4.1.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Conoco Agreement" means the Agreement for Founding Partner,
Sponsorship and Promotion Rights, dated March 9, 1999, between Conoco, Inc. and
Ascent Arena Company.
"Conoco Lease" means the Lease, dated March 9, 1999, between Conoco,
Inc. and Ascent Development Corp.
"Construction Contract" means the Guaranteed Maximum Price Agreement,
dated as of November 20, 1997, between Ascent Arena Company and the Construction
Contractor.
"Construction Contractor" means M.A. ▇▇▇▇▇▇▇▇▇ Company.
"Construction Fund Account" means the account designated as such
established and maintained pursuant to the Sale and Servicing Agreement.
"Construction Reports" has the meaning set forth in Section 5.14(a)(i).
"Contract" means any written or oral contract, agreement, lease, plan,
instrument or other document, commitment, arrangement, or undertaking that is
binding on any Person or its property under Applicable Law, including, with
respect to Seller, the Arena Contracts.
"Controlled Affiliate" means, with respect to any Person, an Affiliate
of such Person that such Person Controls (as defined in the definition of
Affiliate).
"Coors Agreement" means the Agreement for Founding Partner Rights,
Sponsorship and Promotion, dated as of June 1, 1998, between Coors Brewing
Company and Ascent Arena Company, as amended and restated on July 29, 1998.
"Corporate Entity" has the meaning set forth in Section 5.11(a)(v).
"Denver Arena Trust" means the Denver Arena Trust, a Delaware business
trust created pursuant to the Trust Agreement.
"Denver Post Agreement" means the Agreement for Founding Partner
Rights, Sponsorship and Promotion, dated November 24, 1998, between The Denver
Post and Ascent Arena Company.
"Designated Representative" has the meaning set forth in Section
3.2(c).
"Development Property" means the real property more particularly
described in Exhibit "A-2."
"Drop Dead Date" has the meaning set forth in Section 8.2.
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"DURA" means the Denver Urban Renewal Authority.
"Effective Date" has the meaning set forth in the introductory
paragraph of this Agreement.
"Elitch Easements" has the meaning set forth in Section 5.12(c)(ii)(F).
"Elitch Property" has the meaning set forth in Section 5.12(c)(ii)(F).
"Employee Plan" of a Person means any plan, contract, commitment,
program, policy, arrangement or practice maintained or contributed to by the
Person and providing benefits to any current or former employee, director or
agent of the Person, or any spouse or dependent of such beneficiary, including,
without limitation, (1) any ERISA Plan, (2) any Multiemployer Plan, (3) any
other "employee benefit plan" (within the meaning of section 3(3) of ERISA), (4)
any profit-sharing, deferred compensation, bonus, stock option, stock purchase,
stock appreciation rights, phantom stock, restricted stock, other stock-based
pension, retainer, consulting, retirement, severance, welfare or incentive plan,
contract, commitment, program, policy, arrangement or practice and (5) any plan,
contract, commitment, program, policy, arrangement or practice providing for
"fringe benefits" or perquisites, including, without limitation, benefits
relating to automobiles, clubs, vacation, child care, parenting, sabbatical or
sick leave and medical, dental, hospitalization, life insurance and other types
of insurance.
"Employee Plan Event" means any of the following:
(i) "reportable event" (within the meaning of section 4043 of
ERISA) with respect to any ERISA Plan for which the
requirement of notice to the PBGC has not been waived by
regulation;
(ii) the failure to meet the minimum funding standard of
section 412 of the Code with respect to any ERISA Plan
(whether or not waived in accordance with section 412(d) of
the Code) or the failure to make by its due date a required
installment under section 412(m) of the Code with respect to
any ERISA Plan or the failure to make any required
contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any ERISA Plan
pursuant to section 4041(a)(2) of ERISA of a notice of intent
to terminate such plan in a distress termination described in
section 4041(c) of ERISA;
(iv) the withdrawal from any ERISA Plan during a plan year by
a "substantial employer" as defined in section 4001(a)(2) of
ERISA resulting in liability pursuant to section 4062(e) or
section 4063 of ERISA;
(v) the institution by the PBGC of proceedings to terminate
any ERISA Plan, or the occurrence of any event or condition
which might constitute grounds under
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ERISA for the termination of, or the appointment of a trustee
to administer, any ERISA Plan;
(vi) the imposition of liability pursuant to sections 4064 or
4069 of ERISA or by reason of the application of section
4212(c) of ERISA;
(vii) the withdrawal in a complete or partial withdrawal
(within the meaning of sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability
therefor, or the receipt of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to
sections 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under sections 4041A or 4042 of
ERISA;
(viii) the occurrence of an act or omission which could give
rise to the imposition of fines, penalties, taxes or related
charges under chapter 43 of the Code or under sections 409,
502(c), 502(i), 502(l) or 4071 of ERISA in respect of any such
Employee Plan;
(ix) the assertion of a material claim (other than routine
claims for benefits) against any Employee Plan other than a
Multiemployer Plan or the assets of any Employee Plan, or
against the Person maintaining or contributing to such plan in
connection with any such plan;
(x) receipt from the IRS of notice of the failure of any
Qualified Plan to qualify under section 401(a) of the Code, or
the failure of any trust forming part of any Qualified Plan to
fail to qualify for exemption from taxation under section
501(a) of the Code; or
(xi) the imposition of a lien pursuant to sections 401(a)(29)
or 412(n) of the Code or pursuant to ERISA with respect to any
ERISA Plan.
"Environmental Laws" means all Applicable Laws relating to the
protection of human health, safety or the environment including all requirements
pertaining to reporting, licensing, permitting, controlling, investigating or
remediating emissions, discharges, releases or threatened releases of Hazardous
Substances, into the air, surface water, ground water or land, or relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
"Environmental Liability(ies)" means all Liabilities of a Person
(whether such Liabilities result from obligations imposed directly upon a Person
under Environmental Laws or are owed by such Person to Governmental Authorities
or third parties or otherwise) whether presently in existence or arising
hereafter which arise under or relate to any Environmental Law.
"Equity Interests" has the meaning set forth in Section 4.1.
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"ERA" means the Environmental Responsibility Agreement, dated as of
November 14, 1997, between Southern Pacific Transportation Company and Ascent
Arena Company, as amended pursuant to the First Amendment and Supplement thereto
dated March 31, 1998.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the related regulations, in each case as amended as of the date hereof and as
the same may be amended or modified from time to time. References to titles,
subtitles, sections, paragraphs or other provisions of ERISA and the related
regulations also refer to successor provisions.
"ERISA Affiliate", as applied to any Person, means (i) any corporation
which is a member of a controlled group of corporations within the meaning of
section 414(b) of the Code of which such Person is a member, (ii) any trade or
business (whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of section 414(c) of the Code
of which such Person is a member, and (iii) any member of an affiliated service
group within the meaning of section 414(m) or (o) of the Code of which such
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA Affiliate of any of
the Purchased Entities shall continue to be considered an ERISA Affiliate within
the meaning of this definition with respect to the period such entity was an
ERISA Affiliate of any of the Purchased Entities and with respect to liability
arising after such period for which any of the Purchased Entities could be
liable under the Code or ERISA.
"ERISA Plan" of a Person means an "employee pension benefit plan"
(within the meaning of section 3(2) of ERISA), other than a Multiemployer Plan,
that is covered by Title IV of ERISA or subject to the minimum funding standards
of section 412 of the Code or section 302 of ERISA that is maintained by the
Person, to which the Person contributes or has an obligation to contribute or
with respect to which the Person is an "employer" (within the meaning of section
3(5) of ERISA).
"Financial Advisors" means ▇▇▇▇▇ & Company and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"Financial Statements" has the meaning set forth in Section 5.3(a).
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self- regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"Gross Purchase Price" has the meaning set forth in Section 2.5.
"Ground Lease" means (i) prior to the City Transfer, the Ground Lease
between Nuggets LP, as lessor, and Ascent Arena Company, as lessee, with respect
to the Arena Land, and (ii) after the City Transfer, the Lease Agreement between
the City, as lessor, and Ascent Arena Company, as
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16
lessee, with respect to the Arena Land and pursuant to the Arena Agreement (the
"City Ground Lease").
"Hazardous Substance" means any chemical substance: (i) the presence of
which requires investigation or remediation under any Applicable Law; or (ii)
that is defined as a "hazardous waste," "hazardous substance," "hazardous
material," "solid waste" or similarly designated substance under any Applicable
Law; or (iii) that contains gasoline, diesel fuel or other petroleum
hydrocarbons, polychlorinated biphenyls (PCBs) or asbestos.
"HC" has the meaning set forth in the introductory paragraph of this
Agreement.
"HC Avalanche Membership Interest" has the meaning set forth in Recital
E.
"HC Nuggets LP Partnership Interest" has the meaning set forth in
Recital E.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Income Taxes" means: (A) all Taxes imposed upon or measured by income,
profits or gross receipts; and (B) any interest, penalties or additions to tax
with respect to the items in clause (A).
"Indenture" means the Indenture, dated as of July 29, 1998, by and
between the Denver Arena Trust, as issuer, and the Indenture Trustee.
"Indenture Trustee" means The Bank of New York, as indenture trustee of
the Indenture.
"Intellectual Property" means any and all (a) trademarks, service
marks, trade names, logos, and registrations and applications for registration
thereof; (b) works in which copyright may be claimed and for which registrations
or applications for registration thereof have been made; (c) patents, patent
applications, and related technical information; and (d) intellectual property
rights substantially similar to any of the foregoing; that the Purchased
Entities own or have a right to pursuant to license, sublicense, agreement, or
written permission or otherwise.
"Intercreditor Agreement" means (i) prior to the City Transfer, the
Intercreditor Subordination and Release Agreement (Construction Term) among the
City, Denver Arena Trust, the Indenture Trustee and Ascent Arena Company dated
July 29, 1998 and (ii) after the City Transfer, the Intercreditor Agreement
among the City, Ascent Arena Company and Denver Arena Trust dated on or about
the date of the City Transfer.
"Interim Period Expenses" has the meaning set forth in Section 3.2(f).
"Interim Period Funds" has the meaning set forth in Section 3.2(f).
"Interim Period Intercompany Loans" has the meaning set forth in
Section 3.2(f).
- ▇▇ -
▇▇
"▇▇▇" ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Internal Revenue Service or any
Governmental Authority succeeding to any or all of its functions.
"Key Employees" (individually, a "Key Employee") means any employee
identified in Schedules 5.5(a) and 5.5(b) whose annual compensation exceeds
$100,000.
"KMA Stick" has the meaning set forth in the introductory paragraph of
this Agreement.
"KMC Center" has the meaning set forth in the introductory paragraph of
this Agreement.
"KMN Ball" has the meaning set forth in the introductory paragraph of
this Agreement.
"KMS Sports" has the meaning set forth in the introductory paragraph of
this Agreement.
"Knowledge" of Seller shall refer to whether any of Seller's executive
officers, including ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, Art ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇, had
actual knowledge of the matters involved, without any duty of investigation.
"Kroenke" means E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, individually.
"LDA" has the meaning set forth in Recital C.
"LDA Ascent Arena Company Membership Interest" has the meaning set
forth in Recital C.
"LDA Ascent Arena Company Membership Interest Value" means $18,668,716.
"Leased Property" has the meaning set forth in Section 5.12(c)(ii)(F).
"Levy Concession Agreement" means the Management Agreement, dated as of
April 3, 1998, between Ascent Arena Company and Levy Premium Food Service, Inc.
"Liabilities" means, with respect to any Person, any debts (including
interest thereon and any prepayment penalties applicable thereto), liabilities,
claims, or obligations of such Person of any kind, character or description,
whether absolute or contingent, monetary or non-monetary, accrued or unaccrued,
liquidated or unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined or determinable; it being
agreed that unknown liabilities of any nature not required to be disclosed on a
balance sheet prepared in accordance with GAAP shall not be deemed to be
Liabilities.
"Liability Issue" has the meaning set forth in Section 9.5(g)(ii).
"Liberty Acquisition Date" means March 28, 2000.
"Licenses" has the meaning set forth in Section 5.13(b).
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18
"Lien" means, with respect to any asset, any mortgage, title defect,
lien, pledge, charge, security interest, hypothecation, restriction, or
encumbrance of any kind in respect of such asset (other than Permitted Liens).
"LLC-I" has the meaning set forth in Recital A.
"LLC-I Membership Interest" has the meaning set forth in Recital J.
"LLC-I Nuggets LP Partnership Interest" has the meaning set forth in
Recital E.
"LLC-II" has the meaning set forth in Recital A.
"LLC-II Membership Interest" has the meaning set forth in Recital B.
"Luxury Suite License Agreements" means the licenses of luxury suites
in the Pepsi Center which have been granted and are in full force and effect as
of the Effective Date.
"Material Adverse Effect" means a change in, or effect on, the
operations, financial condition, results of operations, Assets, or Liabilities
of any of the Purchased Entities, the Development Property, the Arena Land or
the Pepsi Center, as applicable, that, individually or in the aggregate, results
in, or could reasonably be expected to result in, a material adverse effect on,
or a material adverse change in, either of (a) Avalanche LLC, or (b) Nuggets LP
and the Pepsi Center, taken as a whole, other than any such material adverse
effect, or material adverse change, resulting from a change, effect, condition,
event or circumstance that (i) affects the NBA and the NBA Member Teams
generally, (ii) affects the NHL and the NHL Member Teams generally, (iii) arises
out of or is attributable to general economic conditions, whether locally,
regionally or nationally, or (iv) relates to any matter contemplated by or
disclosed in this Agreement.
"Mortgage" means (i) prior to the City Transfer, that certain Fee and
Leasehold Deed of Trust, Assignment of Rents, Leases, Security Agreement and
Fixture Filing from Nuggets LP, as fee owner, and Ascent Arena Company, as
ground lessee and owner of the improvements on the Arena Land, to the Public
Trustee of the City for the benefit of the Denver Arena Trust, as assigned and
pledged to the Indenture Trustee, encumbering Nuggets LP's fee interest and
Ascent Arena Company's leasehold interest in the Arena Land under the Ground
Lease and the Ascent Arena Company's fee interest in the Pepsi Center, and (ii)
after the City Transfer, that certain Leasehold Deed of Trust, Assignment of
Leases and Rents, Security Agreement and Fixture Filing from Ascent Arena
Company as ground lessee and owner of the improvements on the Arena Land to the
Public Trustee of the City for the benefit of the Denver Arena Trust, as
assigned and pledged to the Indenture Trustee, encumbering Ascent Arena
Company's leasehold interest in the Arena Land under the City Ground Lease and
its interest in the improvements on the Arena Land.
"Mountain Mobile" has the meaning set forth in Recital F.
"Mountain Mobile Membership Interest" has the meaning set forth in
Recital F.
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19
"Multiemployer Plan" means a "multiemployer plan" as defined in section
3(37) of ERISA.
"NBA" has the meaning set forth in Recital F.
"NBA Member Teams" means the professional basketball teams holding NBA
franchises.
"NHL" has the meaning set forth in Recital G.
"NHL Member Teams" means the professional hockey teams holding NHL
franchises.
"NHL Strike Fund Amount" has the meaning set forth in Section 3.2(f).
"Non-Income Taxes" means all Taxes other than Income Taxes.
"Notes" means the revenue-backed notes issued pursuant to the
Indenture.
"Nuggets" has the meaning set forth in Recital F.
"Nuggets Balance Sheet" means the unaudited balance sheet of Nuggets LP
as of March 31, 2000.
"Nuggets Contracts" means all Contracts listed on Schedule 5.12(b)(i)
to which Nuggets LP is a party or by which it is bound.
"Nuggets LP" has the meaning set forth in Recital E.
"▇▇▇▇▇ Concession Agreement" means the Management Agreement, dated as
of April 3, 1998, between Ascent Arena Company and ▇▇▇▇▇ Entertainment, Inc.
"Operating and Management Agreement" means the Operating and Management
Agreement, dated as of July 29, 1998, by and between Ascent Arena Company, as
Owner, and Arena Operating Company, as Operator, with respect to the Pepsi
Center.
"Organizational Documents" means (i) for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
designation or instrument relating to the rights of preferred shareholders of
such corporation, and any shareholder rights agreement, (ii) for any limited
liability company, the certificate or articles of organization and operating or
equivalent agreement, and (iii) for any general or limited partnership, any
partnership certificate and the partnership agreement.
"Overhead Bridge" has the meaning set forth in Section 5.12(c)(ii)(F).
"P&P Entity" and "P&P Entities" have the meanings set forth in Section
5.11(a).
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20
"Partnership Entity" has the meaning set forth in Section 5.11(a)(v).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Pepsi Agreement" means the Agreement for Naming Rights, Pouring
Rights, Sponsorship and Promotion, dated as of June 2, 1998, by and between
Pepsi-Cola Company, a division of Pepsico, Inc., and Ascent Arena Company, as
amended and restated July 29, 1998.
"Pepsi Center" has the meaning set forth in Recital C.
"Permitted Liens" means (i) the limitations imposed by the NHL
Constitution, By-Laws, rules and regulations, (ii) the limitations imposed by
the NBA Constitution, By-Laws, rules and regulations, (iii) the City Lien, and
(iv) the Liens listed on Exhibit "B."
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, estate or other entity or organization,
including a Governmental Authority.
"Plans and Specifications" means the construction plans and
specifications for construction of the Pepsi Center, prepared by the Architect,
as listed on Schedule 1.1.
"Post-Closing Period" means any period with respect to which Taxes are
assessed that begins after the Closing Date and, with respect to any period that
begins before the Closing Date and ends after the Closing Date, the portion of
that period beginning after the Closing Date.
"Pre-Closing Period" means any period with respect to which Taxes are
assessed that ends on or prior to the Closing Date and, with respect to any
period that begins before the Closing Date and ends after the Closing Date, the
portion of that period ending on the Closing Date.
"Post-June 30 Loans" has the meaning set forth in Section 3.2(f).
"Predecessor Entity" means (i) Ascent Arena and Development
Corporation, a Delaware corporation, (ii) Ascent Sports, Inc., a Delaware
corporation, and (iii) any and all other legal entities (including corporations,
partnerships and limited liability companies) that have previously been
liquidated into or merged into or with any of the Purchased Entities and with
respect to which any of the Purchased Entities is a surviving entity and/or
succeeded by operation of law to the liabilities of such legal entity.
"Principals" (individually, a "Principal") has the meaning set forth in
Section 6.7(a).
"Proceedings" has the meaning set forth in Section 5.4.
"Proposed Return" has the meaning set forth in Section 9.5(e)(i).
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21
"Purchased Entities" means the Sports Entities and the Ascent Arena
Entities.
"Purchased Entities' Employee Plan" means any Employee Plan of any of
the Purchased Entities.
"Purchased Entities' ERISA Plan" means any ERISA Plan of any of the
Purchased Entities.
"Purchased Entities' Qualified Plan" means any Qualified Plan of any of
the Purchased Entities.
"Purchasers" and "Purchaser" have the meanings set forth in the
introductory paragraph of this Agreement.
"Qualified Plan" of a Person means any ERISA Plan of the Person and any
other pension, profit sharing or stock bonus plan within the meaning of section
401(a) of the Code maintained by the Person or to which the Person contributes
or has an obligation to contribute.
"Redevelopment Agreement" means the Redevelopment Agreement, dated as
of November 1, 1997, between DURA and Ascent Arena Company, as the same may be
amended from time to time.
"Returns" mean all returns, declarations, reports, forms, claims for
refund, estimates, information returns and statements, including amendments,
required to be filed with or supplied to any Governmental Authority in
connection with any Taxes.
"Return Preparation Standard" means the preparation of a Return and the
reporting of any item thereon in accordance with specific accounting practices
used by the particular Purchased Entity for Returns filed with respect to the
1996, 1997 and 1998 reporting periods (which accounting practices shall include
tax elections, income recognition practices, expense recognition practices,
asset write-off periods and other specific accounting methods) and to the extent
the reporting of any item is not covered by such accounting practices, in
accordance with applicable tax laws; provided, that if and to the extent any tax
elections must be made by any of the Purchased Entities pursuant to specific
provisions of this Agreement (including elections under section 754 of the
Code), such tax elections shall be deemed to be included in the Return
Preparation Standard.
"Revenue Agreements" means each of (a) the Luxury Suite License
Agreements; (b) the Pepsi Agreement; (c) the Coors Agreement; (d) the US West
Agreement; and (e) any Subsequent Revenue Agreement (as defined in the
Indenture).
"Revenue Agreement Rights" has the meaning set forth in the Indenture.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of July 29, 1998, among the Denver Arena Trust, Ascent Arena Company
and the Indenture Trustee.
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"Securities Act" means the Securities Act of 1933, as amended from time
to time, the regulations promulgated thereunder, and any successor statute.
"Security Documents" means (i) the Mortgage, and the assignment and
pledge thereof by the Denver Arena Trust to the Indenture Trustee; (ii) the
Pledge and Security Agreement, dated as of July 29, 1998, between Ascent Arena
Company and the Denver Arena Trust, pursuant to which Ascent Arena Company
grants to the Denver Arena Trust a first lien on the Excess Collateral (as
therein defined); (iii) the Pledge and Security Agreement, dated as of July 29,
1998, between the Denver Arena Trust and the Indenture Trustee, pursuant to
which the Denver Arena Trust grants the Indenture Trustee a first lien security
interest on the Collateral (as therein defined); (iv) the Pledge of Pledged
Contracts, dated as of July 29, 1998, from Ascent Arena Company to the Denver
Arena Trust, and the Assignment of Pledged Contracts, dated as of July 29, 1998
from the Denver Arena Trust to the Indenture Trustee, together with all obligor
consents delivered in connection therewith; (v) the Collateral Assignment of
Rents, Revenues and Agreements, dated as of July 29, 1998 by Ascent Arena
Company for the benefit of the City; (vi) the Intercreditor Agreement; (vii) the
Ascent Entertainment Assignment; (viii) the Estoppel Agreement dated as of July
29, 1998 among the City, the Denver Arena Trust and the Indenture Trustee with
respect to the Arena Agreement; and (ix) the Estoppel Agreement dated as of July
29, 1998, among DURA, the Denver Arena Trust and the Indenture Trustee with
respect to the Redevelopment Agreement, as any of the above may have been or may
be amended from time to time.
"Seller" has the meaning set forth in the introductory paragraph of
this Agreement.
"Seller Ascent Arena Company Membership Interest" has the meaning set
forth in Recital C.
"Seller's 401(k) Plan" has the meaning set forth in Section 9.6(c).
"Sports Entities" (individually, a "Sports Entity") means Nuggets LP,
Avalanche LLC and LLC-I.
"Sports Entities' Contracts" means all Nuggets Contracts, Avalanche
Contracts and any other Contracts, whether written or oral, to which any Sports
Entity is a party or by which it is bound as of the Effective Date or on the
Closing Date providing for actual or contingent expenditures, receipts or
liabilities in excess of $500,000 per year all as set forth on Schedule
5.12(b)(i).
"Sports Entities' Insurance Policies" has the meaning set forth in
Section 5.10(a).
"Sports Entities' Permits" has the meaning set forth in Section
5.12(f)(i).
"Sports Entities' Required Consents" has the meaning set forth in
Section 5.12(f)(ii).
"Sports Entities' Required Contractual Consent" has the meaning set
forth in Section 5.12(f)(ii).
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"Sports Entities' Required Governmental Approval" has the meaning set
forth in Section 5.12(f)(ii).
"Subject Entities" (individually, a "Subject Entity") means Seller,
Ascent Arena Entities, and the Sports Entities.
"Subsidiary(ies)" means, with respect to any Person, any corporation or
other entity as to which more than 50% of the outstanding stock or other equity
interests having ordinary voting rights or power (and excluding stock or other
equity interests having voting rights only upon the occurrence of a contingency
unless and until such contingency occurs and such rights may be exercised) is
owned or controlled, directly or indirectly, by such Person and/or by one or
more of such Person's Subsidiaries.
"Tax Partnership" means a Partnership Entity and any other entity
treated as a partnership for federal income tax purposes in which a Purchased
Entity has a direct or indirect interest.
"Tax Proceeding" has the meaning set forth in Section 9.5(g)(iii).
"Taxes" mean all taxes, however denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof,
imposed by any Governmental Authority, which taxes shall include all income or
profits taxes, payroll and employee withholding taxes, unemployment insurance,
social security taxes, sales and use taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, business license taxes, occupation taxes,
real and personal property taxes, stamp taxes, environmental taxes, and transfer
taxes and other obligations of the same or of a similar nature to any of the
foregoing, any Purchased Entity is required to pay, withhold or collect.
"Teams" (individually, a "Team") means, collectively, the Nuggets and
the Avalanche.
"Transaction Documents" (individually, a "Transaction Document") means
this Agreement and all other documents delivered by Seller and Purchasers in
order to effect the transactions contemplated by this Agreement.
"Transfer Taxes" has the meaning set forth in Section 9.5(c).
"Trust Agreement" means the Amended and Restated Trust Agreement of
Denver Arena Trust, dated as of July 29, 1998, among Ascent Arena Company as
transferor, Wilmington Trust Company, as owner trustee, and The Bank of New
York, as certificate paying agent.
"Trust Certificates" has the meaning set forth in Section 5.2(d)(i).
"Trustee's Lien" means the lien created by those Security Documents
which create any lien or security interest for the benefit of the Indenture
Trustee.
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"US West Agreement" means the Agreement for Sponsorship and Promotion,
dated as of June 26, 1998, between US West, Inc. and Ascent Arena Company, as
amended and restated upon delivery to the Denver Arena Trust.
"User Agreements" means, collectively (i) the agreement between
Avalanche LLC and Ascent Arena Company concerning the use of the Pepsi Center by
the Colorado Avalanche, and (ii) the agreement between the Nuggets LP and Ascent
Arena Company concerning the use of the Pepsi Center by the Denver Nuggets.
"VCUP" means the Application for a Voluntary Cleanup Plan submitted to
the Colorado Department of Public Health and Environment, dated March 10, 1995,
and all correspondence, supplements, addenda, and extensions thereof.
"▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
ARTICLE II.
PURCHASE AND SALE
2.1 AEG Ownership Interests. At Closing, subject to the terms and
conditions of this Agreement, AEG shall sell, transfer, convey and deliver to
(i) KMS Sports, and KMS Sports shall purchase from AEG, free and clear of all
Liens, the AEG Avalanche Membership Interest, and (ii) KMS Sports, and KMS
Sports shall purchase from AEG, free and clear of all Liens, the AEG Nuggets LP
Partnership Interest. In addition, at Closing AEG will assign to KMS Sports the
license for Suite #95 at the Pepsi Center.
2.2 HC Ownership Interests. At Closing, subject to the terms and
conditions of this Agreement, HC shall sell, transfer, convey and deliver to (i)
KMA Stick, and KMA Stick shall purchase from HC, free and clear of all Liens,
the HC Avalanche Membership Interest, and (ii) KMN Ball, and KMN Ball shall
purchase from HC, free and clear of all Liens, the LLC-I Membership Interest and
the HC Nuggets LP Partnership Interest.
2.3 LLC-II Membership Interest. At Closing, subject to the terms and
conditions of this Agreement, HC shall sell, transfer, convey and deliver to KMC
Center, and KMC Center shall purchase from HC, free and clear of all Liens, the
LLC-II Membership Interest.
2.4 Seller Ascent Arena Company Membership Interests. At Closing,
subject to the terms and conditions of this Agreement, AEG shall sell, transfer,
convey and deliver to KMS Sports, and KMS Sports shall purchase from AEG, free
and clear of all Liens, AEG's 1% Ascent Arena Company Membership Interest.
2.5 Purchase Price. The aggregate purchase price shall be $450,000,000
(the "Gross Purchase Price"), subject to adjustment as provided in the following
sentence. The Gross Purchase Price shall be reduced by the sum of (i) the Agreed
Adjustment Amount, (ii) the outstanding
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principal amount of the Notes as of the Closing Date, which shall remain
outstanding immediately after the Closing Date, and (iii) the LDA Ascent Arena
Company Membership Interest Value (the Gross Purchase Price as so adjusted,
being referred to as the "Adjusted Purchase Price"). The Adjusted Purchase Price
shall be paid on the Closing Date by wire transfer of immediately available
funds to an account designated by Seller at least two Business Days prior to the
Closing Date.
ARTICLE III.
COVENANTS OF SELLER
3.1 Compliance with Contracts and Applicable Law. Subject to the
matters disclosed on Schedule 5.2,
(a) Nuggets. From the Effective Date through the Closing Date,
AEG, HC, LLC-I and Nuggets LP shall comply in all material respects with all
conditions and requirements set forth in (i) all applicable Sports Entities'
Contracts, (ii) the Organizational Documents applicable to such entities, (iii)
any and all applicable NBA agreements and documents or other material Contracts
of such entities, (iv) the VCUP, (v) Applicable Law, and (vi) this Agreement.
(b) Avalanche. From the Effective Date through the Closing
Date, AEG, HC, and Avalanche LLC shall comply in all material respects with all
conditions and requirements set forth in (i) all applicable Sports Entities'
Contracts, (ii) the Organizational Documents applicable to such entities, (iii)
any and all applicable NHL agreements and documents or other material Contracts
of such entities, (iv) the VCUP, (v) Applicable Law, and (vi) this Agreement.
AEG, HC and Avalanche LLC will coordinate with Purchasers the method of funding
of the NHL Strike Fund Amount, if any.
(c) Ascent Arena Entities. From the Effective Date through the
Closing Date, AEG, HC and the Ascent Arena Entities shall comply in all material
respects, or cause such compliance, with all conditions and requirements set
forth in (i) the Arena Contracts, (ii) the Licenses, (iii) the Organizational
Documents of such entities, (iv) the VCUP, (v) Applicable Law, and (vi) this
Agreement.
3.2 Conduct of Business in the Ordinary Course.
(a) Sports Entities. From the Effective Date through the
Closing Date, neither Seller nor the Sports Entities shall take any action or
fail to take any action if such action or inaction, as the case may be, would be
outside the ordinary course of business and inconsistent with past practices,
except as specifically contemplated by the terms of this Agreement (including
the City Transfer and the matters described in Sections 3.2(e), 3.2(f) and
9.11). Notwithstanding the foregoing, except as specifically contemplated by the
terms of this Agreement (including the City Transfer and the matters described
in Sections 3.2(e), 3.2(f) and 9.11), neither Seller nor any Sports Entity shall
take any of the following actions without the prior written consent of
Purchasers:
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26
(i) create, permit or suffer to exist any Lien on any
of the Assets of the Sports Entities, other than
Liens created in the ordinary course of business
consistent with past practices pursuant to
sponsorship agreements or agreements related to the
operation of the Avalanche and Nuggets and except
pursuant to the Arena Contracts after consultation
with the Designated Representative;
(ii) sell, transfer or convey, or enter into any
Contract (including any Contract that grants any
Person any right to use, access, lease or acquire any
of the Intellectual Property Assets of the Sports
Entities) with a value of more than $500,000 which
grants any Person any right to use, access (other
than on a short-term basis, i.e., for a term of one
year or less or for a term that is terminable without
penalty or premium at the option of any of the Sports
Entities on not more than 90 days' advance notice),
lease or acquire any of the material Assets of the
Sports Entities, except pursuant to the Arena
Contracts after consultation with the Designated
Representative;
(iii) amend any Sports Entities' Contract in any
manner that would require the prior written consent
of Purchasers under Section 3.2(a)(ii) if it were a
new Contract, except as expressly permitted by this
Agreement;
(iv) amend any Organizational Document of any of the
Sports Entities;
(v) make a loan (other than for reasonable travel
expenses in the ordinary course of business) to any
Person, including an Affiliate, other than to any
other Purchased Entity;
(vi) incur any indebtedness other than trade payables
incurred in the ordinary course of business pursuant
to Contracts now in effect or entered into in
accordance with this Section 3.2(a);
(vii) make any intercompany transfer from a Purchased
Entity to Seller, or make any distribution, dividend
or other payment from a Purchased Entity to its
members or partners, other than any other Purchased
Entity;
(viii) except for the indebtedness listed on Schedule
3.2(a)(vi), prepay any indebtedness to any Person
other than a Purchased Entity, including any
indebtedness to Seller;
(ix) enter into any Contract with any Affiliate or
enter into or terminate any Contract with obligations
on the part of any Sports Entity in excess of
$500,000;
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(x) amend any Employee Plan to increase benefits, or
create any new Employee Plan other than as required
by Applicable Law or previously existing contractual
commitment;
(xi) solicit from any Sports Entity, directly or
indirectly, for Seller or any other Person, any Key
Employee; or
(xii) make any material change in their accounting or
tax principles, methods or practices or in the manner
they keep their books and records.
Purchasers shall not unreasonably delay consent to or
rejection of any of the actions described in this Section 3.2(a). To the extent
that Seller takes or fails to take action on any matter described in this
Section 3.2(a) in accordance with instructions given to it by the Designated
Representative (or deemed to have been given in accordance with paragraph (c)
below), Purchasers shall be deemed to have waived in respect of such matter any
right they may otherwise have to claim a breach of a representation or to assert
any claim hereunder.
(b) Ascent Arena Entities and the Development Property. From
the Effective Date through the Closing Date, neither Seller nor any Ascent Arena
Entity shall take any action or fail to take any action if such action or
inaction, as the case may be, would be outside the ordinary course of business
and inconsistent with past practices, except as specifically contemplated by the
terms of this Agreement (including the City Transfer and the matters described
in Sections 3.2(e), 3.2(f), 9.11 and 9.14). Notwithstanding the foregoing,
except as specifically contemplated by the terms of this Agreement (including
the City Transfer and the matters described in Sections 3.2(e), 3.2(f), 9.11 and
9.14), neither Seller nor any Ascent Arena Entity shall take any of the
following actions without the prior written consent of Purchasers:
(i) create, permit or suffer to exist any Lien on the
Pepsi Center, the Development Property, or the Assets
of any Ascent Arena Entity, except the City Lien, the
Trustee's Lien, Liens created in the ordinary course
of business consistent with past practices related to
sponsorship agreements and other contracts disclosed
on Schedule 5.13(e) and except pursuant to the Arena
Contracts after consultation with the Designated
Representative;
(ii) sell, transfer or convey, or enter into any
Contract (including any Contract that grants any
Person any right to use, access, lease or acquire any
of the Intellectual Property Assets of any of the
Ascent Arena Entities) with a value in excess of
$500,000 which grants any Person any right to use,
access (other than on a short-term basis, i.e., for a
term of one year or less or for a term that is
terminable without penalty or premium at the option
of any of the Ascent Arena Entities on not more than
90 days' advance notice), lease or acquire the Pepsi
Center, any interest in or any portion thereof, or
any of the material Assets of any Ascent Arena
Entity, except pursuant to the Arena Contracts after
consultation with the Designated Representative;
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(iii) sell, transfer or convey, or enter into any
Contract with a value in excess of $500,000 which
grants any Person any right to use, access (other
than on a short-term basis, i.e., for a term of one
year or less or for a term that is terminable without
penalty or premium at the option of any of the Ascent
Arena Entities on not more than 90 days' advance
notice), lease or acquire the Development Property or
any interest in or any portion thereof, except
pursuant to the Arena Contracts after consultation
with the Designated Representative;
(iv) amend any Arena Contract in any manner that
would require the prior written consent of Purchasers
under Section 3.2(b)(ii) or (iii) if it were a new
Contract, except as expressly permitted by this
Agreement;
(v) amend any Organizational Document of any Ascent
Arena Entity;
(vi) make a loan (other than for reasonable travel
expenses in the ordinary course of business) to any
Person, including an Affiliate, other than to any
other Purchased Entity;
(vii) incur any indebtedness other than trade
payables incurred in the ordinary course of business
pursuant to Contracts now in effect or pursuant to
the Arena Contracts or entered into in accordance
with this Section 3.2(b);
(viii) make any intercompany transfer from a
Purchased Entity to Seller or make any distribution,
dividend or other payment from a Purchased Entity to
its members or shareholders, other than any other
Purchased Entity;
(ix) except for the indebtedness listed on Schedule
3.2(b)(vii), prepay any indebtedness to any Person
other than an Ascent Arena Entity, including any
indebtedness to Seller;
(x) enter into any Contract with any Affiliate or
enter into or terminate any Contract with obligations
on the part of any Ascent Arena Entity in excess of
$500,000;
(xi) amend any Employee Plan to increase benefits, or
create any new Employee Plan, other than as required
by Applicable Law or previously existing contractual
commitment;
(xii) solicit from any Ascent Arena Entity, directly
or indirectly, for Seller or any other Person, any
Key Employee; or
(xiii) make any material change in their accounting
or tax principles, methods or practices or in the
manner they keep their books and records.
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Purchasers shall not unreasonably delay consent to or
rejection of any of the actions described in this Section 3.2(b). To the extent
that Seller takes or fails to take action on any matter described in this
Section 3.2(b) in accordance with instructions given to it by the Designated
Representative (or deemed to have been given in accordance with paragraph (c)
below), Purchasers shall be deemed to have waived in respect of such matter any
right they may otherwise have to claim a breach of a representation or to assert
any claim hereunder.
(c) Designated Representative. Purchasers shall appoint a
person(s) to serve as primary contact for Seller in conjunction with Sections
3.2 and 3.5 (the "Designated Representative"). For purposes of Seller seeking
required approvals under this Section 3.2, Seller shall deliver written
notification (in the manner provided in Section 10.1) to the Designated
Representative as to the matter for which Seller is seeking approval. The
Designated Representative may grant or deny approval within 48 hours of such
notification or indicate that it shall accede to management's judgment. If the
Designated Representative does not deliver such written notification within the
48-hour period or indicates that it shall accede to management's judgment, such
approval shall be deemed to have been given.
(d) Notice. Seller shall promptly notify Purchasers, in
writing, of the occurrence or existence of any event or circumstance of which
Seller or any Purchased Entity is aware and which would (i) violate this Section
3.2, or (ii) make the satisfaction of any condition in Section 7.1 impossible or
unlikely.
(e) Approved Budgets. Seller has delivered to Purchasers, and
Purchasers have approved, operating and capital budgets for the period from
April 1, 2000 through September 30, 2000 for the following: (i) Nuggets LP, (ii)
Avalanche LLC, (iii) Ascent Arena Company, (iv) LLC-I, and (v) LLC-II (the
"Approved Budgets"). Expressly subject to the limitations and covenants provided
in Article III, Seller may take any actions or make any expenditures
substantially in accordance with the Approved Budgets without the prior written
consent of Purchasers.
(f) Intercompany Loans. Between the Balance Sheet Date and the
Closing Date, all revenues, cash, funds, notes, accounts receivable and the
like, of any kind, received by the Purchased Entities, including funds received
by any Purchased Entity with respect to season tickets, club seats, luxury
suites, television, radio, marketing, sponsorships or advertising, including
deferred revenues relating to prepayments for any such items (collectively, the
"Interim Period Funds"), will be retained by the Purchased Entities and may be
used by the Purchased Entities to pay for operating expenses and capital
expenditures relating to the Business in accordance with the Approved Budgets
(the "Interim Period Expenses"). If the Interim Period Funds are not sufficient
to pay the Interim Period Expenses, Seller or Liberty Media Corporation shall
advance funds to the Purchased Entities in an amount sufficient to cover the
shortfall between the amount of the Interim Period Expenses and the amount of
the Interim Period Funds, and any such advances shall be treated as intercompany
loans, which shall bear interest at the per annum rate of interest publicly
announced from time to time by The Bank of New York as its prime rate (or
reference rate) plus 1%, from Seller or Liberty Media Corporation, as the case
may be, and the Purchased Entities (the "Interim Period Intercompany Loans"). If
at any time between the Balance Sheet Date and the Closing Date the
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Purchased Entities have excess Interim Period Funds not required to pay Interim
Period Expenses, such excess Interim Period Funds may be used to repay, in whole
or in part, any Interim Period Intercompany Loans. On the Closing Date, any
unpaid principal balance of and any accrued but unpaid interest on any Interim
Period Intercompany Loans shall be paid by the Purchased Entities to Seller or
Liberty Media Corporation, as applicable, in full; provided, however, that if
the Purchased Entities do not have sufficient cash and cash equivalents on the
Closing Date to repay all outstanding Interim Period Intercompany Loans in full,
all cash and cash equivalents of the Purchased Entities will be used to repay in
part the Interim Period Intercompany Loans and any remaining balance of the
Interim Period Intercompany Loans will be forgiven and discharged, and provided
further, that if the Closing occurs after June 30, 2000, then (x) Seller or
Liberty Media Corporation shall be entitled at Closing to repayment in full of
any Interim Period Intercompany Loans made after June 30, 2000 (the "Post-June
30 Loans"), and Purchasers will provide cash to the Purchased Entities (either
as a loan or as a contribution, at the option of Purchasers) immediately prior
to the Closing, to the extent that the Purchased Entities otherwise would not
have sufficient cash and cash equivalents to repay the Post-June 30 Loans in
full, and (y) any revenues, cash, funds, notes, accounts receivable and the like
received by the Purchased Entities after June 30, 2000, shall not be used to
repay any Interim Period Intercompany Loans made before June 30, 2000.
Notwithstanding any of the preceding provisions of this Section 3.2(f) to the
contrary, if any one or more of the Purchased Entities make any expenditure or
advance of funds prior to Closing in connection with establishment of a strike
fund as required by the NHL (the "NHL Strike Fund Amount") and if the Purchased
Entities would not have sufficient cash and cash equivalents at Closing to repay
all Interim Period Intercompany Loans in full, Purchasers will provide cash to
the Purchased Entities (either as a loan or as a contribution, at the option of
Purchasers) immediately prior to Closing, in an amount equal to the lesser of
(i) the NHL Strike Fund Amount, and (ii) the amount of the Interim Period
Intercompany Loans that would otherwise not be repaid in full if Purchasers did
not provide cash to the Purchased Entities immediately prior to the Closing.
3.3 Preservation of Business. From the Effective Date through the
Closing Date, Seller shall cause the Purchased Entities to use their respective
reasonable best efforts to preserve intact the current Assets, business
organizations and relationships, and goodwill of the Purchased Entities, and to
keep available the services of the present officers, employees, players, agents
and other personnel of the Purchased Entities, excluding officers of Seller who
are not Key Employees, in each case to the extent commercially reasonable.
3.4 Maintenance of Insurance Coverage and Certain Policies. From the
Effective Date through the Closing Date, neither Seller nor any of the Purchased
Entities shall take or fail to take any action if such action or inaction, as
the case may be, would adversely affect the applicability, prior to the Closing
Date, of any insurance policies listed on Schedule 3.4. Seller shall maintain
the insurance policies listed on Schedule 3.4 in effect through the Closing
Date.
3.5 Current Information. From the Effective Date through the Closing
Date, Seller will cause one or more of its representatives to confer on a
regular basis with the Designated Representative with respect to the status of
the ongoing operations of the Purchased Entities. Seller promptly will notify
Purchasers of any material change in the normal course of business of the
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Purchased Entities or, if known to Seller, of any complaints from a Governmental
Authority or of any litigation known to Seller (or written communications
received by Seller or the Purchased Entities indicating that the same may be
contemplated) or, if known to Seller or the Purchased Entities, the institution
or the threatened institution of any litigation in each case that would
challenge, prevent, alter or materially delay any of the transactions
contemplated by the Transaction Documents and Seller will keep Purchasers
informed with respect to such events. Seller and Purchasers will notify each
other at mutually agreeable times of the status of applications with
Governmental Authorities and third party consents related to the transactions
contemplated by the Transaction Documents. In addition, Seller will deliver
promptly to Purchaser copies of all internal financial reports regularly
prepared by or for Seller and Returns filed with any Governmental Authority, and
will allow Purchasers and/or their representatives reasonable access to any and
all records, files, contracts, employees, representatives, agents and other
information or Persons deemed necessary by Purchasers and/or their
representatives to verify representations and warranties made by Seller herein
and other information provided by Seller to Purchasers in connection with the
transactions contemplated by the Transaction Documents.
3.6 Preservation of LDA's Ascent Arena Company Membership Interest. LDA
agrees not to sell or otherwise transfer, pledge, hypothecate or encumber the
LDA Ascent Arena Company Membership Interest prior to the Closing.
ARTICLE IV.
CLOSING
4.1 Closing. Subject to the terms and conditions of this Agreement, the
sale and purchase of (a) the LLC-I Membership Interest, (b) the LLC-II
Membership Interest, (c) the Seller Ascent Arena Company Membership Interests,
(d) the AEG Nuggets LP Partnership Interest, (e) the AEG Avalanche Membership
Interest, (f) the HC Avalanche Membership Interest, and (g) the HC Nuggets LP
Partnership Interest (subsections (a), (b), (c), (d), (e), (f) and (g), and the
LLC-I Nuggets LP Partnership Interest are referred to collectively as the
"Equity Interests") contemplated by this Agreement shall take place at a closing
(the "Closing") to be held at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.C. in Denver,
Colorado on June 30, 2000, if all conditions to the obligations of the parties
set forth in this Agreement have been satisfied or waived on or prior to such
date, or at such other place or at such other time or on such other date as the
parties may mutually agree upon in writing (the day on, and the time at, which
the Closing takes place being the "Closing Date").
4.2 Closing Deliveries by AEG. At the Closing, AEG shall deliver, or
cause to be delivered, to Purchasers (all in form and substance reasonably
satisfactory to Purchasers):
(a) An assignment to KMS Sports of all of AEG's right, title
and interest in and to its 1% Ascent Arena Company Membership Interest, together
with AEG's resignation as manager thereof, if applicable, effective as of the
Closing Date.
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(b) An assignment to KMS Sports of all of AEG's right, title
and interest in and to the AEG Nuggets LP Partnership Interest.
(c) An assignment to KMS Sports of all of AEG's right, title
and interest in and to the AEG Avalanche Membership Interest, together with
AEG's resignation as manager thereof, if applicable, effective as of the
Closing.
(d) An assignment to KMS Sports of the license for Suite #95
at the Pepsi Center.
(e) A certificate executed by AEG pursuant to which AEG
represents and warrants to KMC Center, as of the Closing Date, the then-existing
balance of funds in each of the Accounts and the outstanding principal amount of
the Notes.
(f) The certificates, consents and other documents required to
be delivered pursuant to Section 7.1.
(g) All books, records and accounting papers of the Purchased
Entities, other than any required to be retained by AEG or any Purchased Entity
by Applicable Law, in which event copies will be delivered to Purchasers.
4.3 Closing Deliveries by HC. At the Closing, HC shall deliver, or
cause to be delivered, to Purchasers:
(a) An assignment to KMN Ball of all of HC's right, title and
interest in and to the LLC-I Membership Interest.
(b) An assignment to KMC Center of all of HC's right, title
and interest in and to the LLC-II Membership Interest.
(c) An assignment to KMN Ball of all of HC's right, title and
interest in the HC Nuggets LP Partnership Interest.
(d) An assignment to KMA Stick of all of HC's right, title and
interest in the HC Avalanche Membership Interest.
4.4 Closing Deliveries by Purchasers. At the Closing, Purchasers shall
deliver, or cause to be delivered, to Seller:
(a) By wire transfer of immediately available funds, the
Adjusted Purchase Price and any funds required to be provided by Purchasers to
the Purchased Entities pursuant to Section 3.2(f).
(b) The certificates and other documents required to be
delivered pursuant to Section 7.2 in form and substance reasonably satisfactory
to AEG.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to enter into this Agreement, Seller represents and
warrants to Purchasers that the following matters are true and correct as of the
Effective Date and as of the Closing Date unless limited to a specific date.
5.1 General Corporate and Partnership Matters.
(a) Organization and Standing. Each Subject Entity:
(i) is a Person duly organized, validly existing and
in good standing under the laws of the jurisdiction
of its formation;
(ii) has full power and authority to own, lease and
operate its Assets and to conduct its Business as now
being conducted; and
(iii) is qualified or licensed to do business in all
states and other jurisdictions where its ownership,
leasing or operation of its Assets, or the conduct of
its Business, requires such qualification or
licensing, except where the failure to be so
qualified or registered would not result in a
Material Adverse Effect.
(b) Organizational Documents. The Purchased Entities have
delivered or made available to Purchasers true and complete copies of their
respective Organizational Documents and corporate, partnership or limited
liability company books, records and ledgers. Such documents contain true and
complete minutes and records of all issuances and transfers of any stock,
membership, partnership or other ownership interests in the Purchased Entities,
and all minutes and records of all meetings, consents, proceedings and other
actions of the partners, members, shareholders, board of directors and
committees of the board of directors of the Purchased Entities since the date of
incorporation or formation.
(c) Corporate Power; Authorization; No Contravention;
Consents.
(i) Seller has all requisite legal and corporate
power to enter into this Agreement and to carry out
and perform its obligations under the terms of this
Agreement and any other Transaction Document to which
it is a party.
(ii) The execution, delivery and performance of the
Transaction Documents and the consummation of the
transactions contemplated thereby have been duly
authorized by all necessary corporate action on the
part of Seller, and no other corporate proceedings or
action on the part of Seller are
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necessary to authorize the Transaction Documents or
to consummate the transactions contemplated thereby.
(iii) The execution, delivery, and performance by
Seller of the Transaction Documents will not, and the
restructuring effected by AEG after July, 1999 with
respect to certain Purchased Entities and Predecessor
Entities did not:
(A) conflict with or violate any of the
Organizational Documents of Seller or any of the
Purchased Entities;
(B) result in any breach or violation of, or
constitute a default (with or without notice or lapse
of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any
Contract except as would not have a Material Adverse
Effect;
(C) result in the creation of any Lien on
any of the Assets of a Purchased Entity;
(D) require any consent or approval of any
third party or any party to any Contract of Seller or
the Purchased Entities the absence of which would
result in a Material Adverse Effect, other than the
City Consent, the consent of the other members of
Mountain Mobile with respect to the Mountain Mobile
Membership Interest and the Sports Entities' Required
Contractual Consents; or
(E) conflict with or violate any Applicable
Law (other than such conflicts or violations that
would not have a Material Adverse Effect).
(d) Binding Effect. Each of the Transaction Documents to which
Seller is a party constitutes a legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
(e) Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or registration,
declaration or filing with, any Governmental Authority is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, Seller of any Transaction Document, other than:
(i) compliance with any applicable requirements of
the HSR Act with respect to the consummation of the
transactions contemplated hereby;
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(ii) compliance with the registration requirements of
the Securities Act, or an exemption therefrom, and
any applicable state blue sky laws and the Securities
Exchange Act of 1934;
(iii) the City Consent;
(iv) any Sports Entities' Required Governmental
Approval; and
(v) as set forth in this Agreement.
(f) Subsidiaries. Except as set forth in Schedule 5.1(f) and
as provided herein, the Purchased Entities have no directly or indirectly owned
Subsidiaries and have made no advances to or investments in, and do not own any
securities of or other interests in, any Person.
5.2 Title to Membership Interests and Partnership Interests. Except as
set forth on Schedule 5.2,
(a) Ascent Arena Company.
(i) The membership interests comprising Ascent Arena
Company are as follows:
AEG 1%
LLC-II 92.48%
LDA 6.52%
(ii) AEG and LLC-II have good title to the Seller
Ascent Arena Company Membership Interests, free and
clear of all Liens other than those created by the
Ascent Operating Agreement or this Agreement. AEG and
LLC-II are the record and beneficial owners of the
Seller Ascent Arena Company Membership Interests in
the ratios stated in Section 5.2(a)(i).
(iii) The Seller Ascent Arena Company Membership
Interests have been duly authorized and validly
issued, are fully paid and nonassessable, were not
issued in violation of the terms of any Contract
binding upon Ascent Arena Company, AEG, or LLC-II and
were issued in compliance with all applicable
Organizational Documents and Applicable Law.
(iv) Except as set forth in the Ascent Operating
Agreement, there are: (A) no existing Contracts or
rights of any character with respect to the purchase,
redemption or acquisition of any membership or other
interest in Ascent Arena Company, existing or
contingent, at any time, or upon the happening of any
stated event; (B) no outstanding interests that are
convertible into or exchangeable for membership or
other interests in Ascent Arena Company;
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and (C) no Contracts or rights of any character to
purchase or otherwise acquire from AEG, Ascent Arena
Company, or LLC-II any such convertible or
exchangeable interests.
(b) Mountain Mobile.
(i) The membership interests comprising Mountain
Mobile are as follows:
Nuggets LP 1/3
Fox Sports Rocky Mountain 1/3
Norac 1/3
(ii) Nuggets LP has good title to the Mountain Mobile
Membership Interest, free and clear of all Liens
other than those created by the Operating Agreement
of Mountain Mobile or this Agreement. Nuggets LP is
the record owner and LLC-I is the beneficial owner of
the Mountain Mobile Membership Interest, with the
sole right to vote, dispose of, and receive
distributions and dividends in respect of such
membership interest.
(iii) Except as set forth on Schedule 5.2(b)(iii),
the Mountain Mobile Membership Interest has been duly
authorized and validly issued, is fully paid and
nonassessable, and to the Knowledge of Seller, was
not issued in violation of the terms of any Contract
binding upon Mountain Mobile or Nuggets LP and was
issued in compliance with all applicable
Organizational Documents and Applicable Law.
(iv) Except as set forth in the Operating Agreement
of Mountain Mobile, and to the Knowledge of Seller,
there are: (A) no existing Contracts or rights of any
character with respect to the purchase, redemption or
acquisition of the Mountain Mobile Membership
Interest or any other membership interest in Mountain
Mobile, existing or contingent, at any time, or upon
the happening of any stated event that would dilute
the Mountain Mobile Membership Interest; (B) no
outstanding interests that are convertible into or
exchangeable for membership or other interests in
Mountain Mobile that would dilute the Mountain Mobile
Membership Interest; and (C) no Contracts or rights
of any character to purchase or otherwise acquire any
such convertible or exchangeable interests.
(c) Arena Operating Company.
(i) Ascent Arena Company is the sole member and
manager of Arena Operating Company, and no other
membership, management, equity or other interests in
Arena Operating Company exist.
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(ii) Ascent Arena Company's interest in Arena
Operating Company is free and clear of all Liens
other than those created by the Arena Operating
Agreement or this Agreement. Ascent Arena Company has
the sole right to vote, dispose of, and receive
distributions and dividends in respect of Arena
Operating Company membership interests.
(iii) Ascent Arena Company's interest in Arena
Operating Company has been duly authorized and
validly issued, is fully paid and nonassessable, was
not issued in violation of the terms of any Contract
binding upon Arena Operating Company or Ascent Arena
Company, and was issued in compliance with all
applicable Organizational Documents and Applicable
Law.
(iv) Other than the Permitted Liens, there are: (A)
no existing Contracts or rights of any character with
respect to the purchase or acquisition of any
membership or other interest in Arena Operating
Company, existing or contingent, at any time, or upon
the happening of any stated event; (B) no outstanding
interests that are convertible into or exchangeable
for membership or other interests in Arena Operating
Company; and (C) no Contracts or rights of any
character to purchase or otherwise acquire from the
Arena Operating Company or Ascent Arena Company any
such convertible or exchangeable interests.
(d) Denver Arena Trust.
(i) Ascent Arena Company is the sole certificate
holder of the trust certificates of the Denver Arena
Trust (the "Trust Certificates"), and there are no
other outstanding trust certificates, and no
outstanding subscriptions, options, warrants, puts,
calls, rights, exchangeable or convertible securities
or other commitments or agreements of any nature
relating to the trust certificates of the Denver
Arena Trust. Ascent Arena Company has the sole right
to receive distributions with respect to the Residual
Interest as defined in the Trust Agreement, subject
only to the City Lien.
(ii) The Trust Certificates are free and clear of all
Liens, other than those created by the Trust
Agreement, this Agreement and the City Lien. The
Trust Certificates were issued in compliance with the
Trust Agreement and Applicable Law.
(iii) The Denver Arena Trust is not a business trust
within the meaning of section 101(9)(A)(v) of the
Bankruptcy Code. For federal, state and local income
and franchise tax purposes, by virtue of there being
a sole Trust Certificate holder, the Denver Arena
Trust constitutes a security arrangement, with the
assets being held by the trust, the owner of the
trust assets being the
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sole Trust Certificate holder, and the Notes being
non-recourse debt of the sole Trust Certificate
holder. The Denver Arena Trust has not elected
treatment as an association under Treasury
Regulations Section 301.7701-3(a) for federal income
tax purposes. The Denver Arena Trust shall be
considered part of Ascent Arena Company for purposes
of the definition of Partnership Entity.
(iv) The Denver Arena Trust does not own, directly or
indirectly, any equity or similar interest in, or any
interest convertible or exchangeable or exercisable
for any equity or similar interest in, any
corporation, partnership, joint venture, limited
liability company or other business association or
entity.
(v) Ascent Arena Company has received certain
distributions of the Residual Interest and other
amounts pursuant to the Trust Agreement. Such
distributions have been made in compliance with the
Trust Agreement.
(e) Avalanche LLC.
(i) The membership interests in Avalanche LLC are as
follows:
AEG 1%
HC 99%
(ii) AEG and HC have good title to the Avalanche LLC
membership interests, free and clear of all Liens
other than those created by the Operating Agreement
of Avalanche LLC or this Agreement, and are the
record and beneficial owners of the Avalanche LLC
membership interests in the ratios stated in Section
5.2(e)(i) with the sole right to vote, dispose of,
and receive distributions and dividends in respect of
the Avalanche LLC membership interests.
(iii) The Avalanche LLC membership interests have
been duly authorized and validly issued, are fully
paid and nonassessable, were not issued in violation
of the terms of any Contract binding upon Avalanche
LLC, HC or AEG and were issued in compliance with all
applicable Organizational Documents and Applicable
Law.
(iv) Other than the Permitted Liens, there are: (A)
no existing Contracts or rights of any character with
respect to the purchase, redemption or acquisition of
any membership or other interest in Avalanche LLC,
existing or contingent, at any time, or upon the
happening of any stated event; (B) no outstanding
interests that are convertible into or exchangeable
for membership or other interests in Avalanche LLC;
and (C) no Contracts or
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rights of any character to purchase or otherwise
acquire from AEG, HC or Avalanche LLC any such
convertible or exchangeable interests.
(f) Nuggets LP.
(i) The Nuggets LP partnership interests are as
follows:
AEG 1% as a limited partner
HC 98% as a limited partner
LLC-I 1% as general partner
(ii) AEG, HC and LLC-I have good title to the Nuggets
LP partnership interests, free and clear of all Liens
other than those created by the Limited Partnership
Agreement of Nuggets LP or this Agreement. AEG, HC
and LLC-I are the record and beneficial owners of the
Nuggets LP partnership interests in the ratios stated
in Section 5.2(f)(i) with the sole right to vote,
dispose of, and receive distributions and dividends
in respect of the Nuggets LP partnership interests.
(iii) The Nuggets LP partnership interests have been
duly authorized and validly issued, are fully paid
and nonassessable, were not issued in violation of
the terms of any Contract binding upon Nuggets LP,
AEG, HC or LLC-I and were issued in compliance with
all applicable Organizational Documents and
Applicable Law.
(iv) Other than Permitted Liens, there are: (A) no
existing Contracts or rights of any character with
respect to the purchase, redemption or acquisition of
any partnership or other interest in Nuggets LP,
existing or contingent, at any time, or upon the
happening of any stated event; (B) no outstanding
interests that are convertible into or exchangeable
for partnership or other interests in Nuggets LP; and
(C) no Contracts or rights of any character to
purchase or otherwise acquire from AEG, Nuggets LP,
HC or LLC-I any such convertible or exchangeable
interests.
(g) Restrictions. Except as disclosed on Schedule 5.2(g),
there is no voting or other trust or agreement, option, warrant, preemptive
right, right of first offer, right of first refusal, escrow arrangement, proxy,
buy-sell agreement, power of attorney or other Contract, or any order, judgment
or decree, relating to any of the Equity Interests which, conditionally or
unconditionally, (i) grants to any Person the right to purchase, redeem or
otherwise acquire, or obligates any Person to sell or otherwise dispose of or
issue, or otherwise results or, whether upon the occurrence of any event or with
notice or lapse of time or both or otherwise, may result in any Person
acquiring, (A) any of such Equity Interests; (B) any of the proceeds of, or any
distributions paid or which are or may become payable in respect of, any of such
Equity Interests; or (C) any interest in such Equity Interests or any such
proceeds or distributions; (ii) restricts or, whether upon the occurrence of any
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event or with notice or lapse of time or both or otherwise, is reasonably likely
to restrict the transfer or voting of, or the exercise of any rights or the
enjoyment of any benefits arising by reason of ownership of, any such Equity
Interests or any such proceeds or distributions; or (iii) creates or, whether
upon the occurrence of any event or with notice or lapse of time or both or
otherwise, is reasonably likely to create a Lien or purported Lien affecting
such Equity Interests, proceeds or distributions.
(h) LLC-I.
(i) HC is the sole member and manager of LLC-I, and
no other membership, management, equity or other
interests in LLC-I exist.
(ii) HC has good title to the LLC-I Membership
Interest, free and clear of all Liens other than
those created by the Operating Agreement of LLC-I or
this Agreement, and is the record and beneficial
owner of the LLC-I Membership Interest as stated in
Section 5.2(h)(i) with the sole right to vote,
dispose of, and receive distributions and dividends
in respect of the LLC-I Membership Interest.
(iii) The LLC-I Membership Interest has been duly
authorized and validly issued, is fully paid and
nonassessable, was not issued in violation of the
terms of any Contract binding upon LLC-I, HC or AEG
and was issued in compliance with all applicable
Organizational Documents and Applicable Law.
(iv) Other than the Permitted Liens, there are: (A)
no existing Contracts or rights of any character with
respect to the purchase, redemption or acquisition of
any membership or other interest in LLC-I, existing
or contingent, at any time, or upon the happening of
any stated event; (B) no outstanding interests that
are convertible into or exchangeable for membership
or other interests in LLC-I; and (C) no Contracts or
rights of any character to purchase or otherwise
acquire from AEG, HC or LLC-I any such convertible or
exchangeable interests.
(i) LLC-II.
(i) HC is the sole member and manager of LLC-II, and
no other membership, management, equity or other
interests in LLC-II exist.
(ii) HC has good title to the LLC-II Membership
Interest, free and clear of all Liens other than
those created by the Operating Agreement of LLC-II or
this Agreement, and is the record and beneficial
owner of the LLC-II Membership Interest as stated in
Section 5.2(i)(i) with the sole right to vote,
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dispose of, and receive distributions and dividends
in respect of the LLC-II Membership Interest.
(iii) The LLC-II Membership Interest has been duly
authorized and validly issued, is fully paid and
nonassessable, was not issued in violation of the
terms of any Contract binding upon LLC-II, HC or AEG
and was issued in compliance with all applicable
Organizational Documents and Applicable Law.
(iv) Other than the Permitted Liens, there are: (A)
no existing Contracts or rights of any character with
respect to the purchase, redemption or acquisition of
any membership or other interest in LLC-II, existing
or contingent, at any time, or upon the happening of
any stated event; (B) no outstanding interests that
are convertible into or exchangeable for membership
or other interests in LLC-II; and (C) no Contracts or
rights of any character to purchase or otherwise
acquire from AEG, HC or LLC-II any such convertible
or exchangeable interests.
5.3 Financial Statements; Undisclosed Liabilities; Notes;
Distributions.
(a) Seller has delivered to Purchasers the financial
statements described in Schedule 5.3(a) (collectively, the "Financial
Statements"). The Financial Statements in each case have been prepared based on
the books and records of the Purchased Entities in accordance with GAAP (except
in the case of internally prepared statements which may not include all
information and footnote disclosures normally included in financial statements
prepared in accordance with GAAP), consistently applied throughout the periods
covered thereby and fairly present in all material respects the financial
condition, results of operations and statements of cash flow of the Purchased
Entities as of the dates or periods indicated (subject in the case of interim
financial statements to normal year-end adjustments). Since the Liberty
Acquisition Date and the Balance Sheet Date, each of the Purchased Entities has
conducted its Business in all material respects in a manner consistent with past
practice without change of accounting policy or procedure including its
practices in connection with the treatment of revenue recognition,
capitalization policies, reserves and expenses.
(b) Undisclosed Liabilities. Except as set forth on Schedule
5.3(b), the Purchased Entities do not have any Liabilities except for
Liabilities (i) reflected on or reserved against in the Financial Statements of
such Persons, (ii) disclosed in this Agreement, or (iii) incurred in the
ordinary course of business consistent with past practice since the Balance
Sheet Date or otherwise entered into in accordance with this Agreement.
(c) Notes. As of the Effective Date and as of the Closing
Date, the outstanding principal amount of the Notes is and will be $136,170,000.
(d) Distributions. From the Liberty Acquisition Date through
the Effective Date, none of the Purchased Entities has made any intercompany
transfer, distribution, dividend or other
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payment to Seller or any Affiliates thereof, including any payment of any
intercompany account (other than to any other Purchased Entity and other than
those that would be permitted to be made under Section 3.2(f)).
5.4 Litigation. Except as specifically disclosed in Schedule 5.4, as of
the Effective Date, there are no actions, suits, hearings, arbitrations,
proceedings (public or private), claims, disputes, or governmental
investigations (collectively, "Proceedings") pending, or to the Knowledge of
Seller, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against the Pepsi Center or any of the Purchased
Entities or any of their respective Assets (excluding any Proceedings pending or
threatened against the NBA or the NBA Member Teams generally or against the NHL
or the NHL Member Teams generally), provided that Seller shall list all such
litigation of which it has Knowledge on Schedule 5.4 as to which an adverse
determination would result in a Material Adverse Effect.
5.5 Employees.
(a) Sports Entities' Employees. Except as disclosed in
Schedule 5.12(b)(i), Schedule 5.5(a) lists, as of the Effective Date, the name,
date and place of employment, current annual salary and any other bonuses, and a
description of position of each current exempt employee, officer, director,
consultant or agent of any Sports Entity. Seller shall deliver to Purchasers an
updated version of Schedule 5.5(a) on the Closing Date.
(b) Ascent Arena Entities' Employees. Except as disclosed in
Schedule 5.13(e), Schedule 5.5(b) lists, as of the Effective Date, the name,
date and place of employment, current annual salary and any other bonuses, and a
description of position of each current exempt employee, officer, director,
consultant or agent of any Ascent Arena Entity. Seller shall deliver to
Purchasers an updated version of Schedule 5.5(b) on the Closing Date.
(c) No Resignations by Key Employees. Except as disclosed on
Schedule 5.5(c), as of the Effective Date, no Key Employee has delivered a
letter of resignation or has communicated in writing to any Sports Entity or any
Ascent Arena Entity an intention to deliver a letter of resignation in the
future.
(d) No Solicitation of Key Employees. Neither Seller nor any
of its Controlled Affiliates (excluding the Purchased Entities) has solicited,
directly or indirectly, for themselves or any other Person, any Key Employee.
5.6 Employee Benefits.
(a) Purchased Entities' Employee Plans.
(i) Schedule 5.6(a)(i) sets forth a correct and
complete list of all material Purchased Entities'
Employee Plans. Seller and the Purchased Entities
have made available to Purchasers true and complete
copies of the Purchased
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Entities' Employee Plans and all related summary
descriptions, including copies of any employee
handbooks listing or describing any Purchased
Entities' Employee Plans and summary descriptions of
any Purchased Entities' Employee Plan not otherwise
in writing.
(ii) Except for any failure or default that would not
have a Material Adverse Effect, each of the Purchased
Entities has fulfilled or has taken all actions
necessary to enable it to fulfill when due all of its
obligations under each Purchased Entities' Employee
Plan. To the Knowledge of Seller, there are no
negotiations, demands or proposals which are pending
or which have been made to Seller or the Purchased
Entities which concern material matters now covered,
or that would be covered, by any Purchased Entities'
Employee Plan that would have a Material Adverse
Effect.
(iii) Each of the Purchased Entities is in full
compliance with all Applicable Law applicable to each
Purchased Entities' Employee Plan except where
noncompliance would not have a Material Adverse
Effect. There has been no Employee Plan Event which
is continuing or in respect of which there is any
outstanding liability of any of the Purchased
Entities that, individually or in the aggregate,
would have a Material Adverse Effect, and no such
Employee Plan Event is reasonably expected to occur,
with respect to any Purchased Entities' Employee
Plan.
(iv) Except as disclosed in Schedule 5.6(a)(iv), the
execution and delivery of the Transaction Documents
and the conclusion of the transactions contemplated
by this Agreement will not cause the acceleration of
vesting in, or payment of, any benefits under any
Purchased Entities' Employee Plan.
(v) None of the Purchased Entities has any formal
plan or commitment, whether legally binding or not,
to create any additional Employee Plan or to modify
or change any existing Employee Plan that would
affect any current or former employee of any of the
Purchased Entities.
(vi) Schedule 5.6(a)(i) separately identifies any
Purchased Entities' Employee Plan that provides life
insurance or employee welfare plan benefits (within
the meaning of section 3(1) of ERISA), now or in the
future, to any former employee at any cost to any of
the Purchased Entities (except as required by
Applicable Law).
(b) Employee Plans of the Purchased Entities' ERISA
Affiliates. Except as would not have a Material Adverse Effect, there has been
no Employee Plan Event with respect to any Employee Plan of any Person that is
an ERISA Affiliate of the Purchased Entities or who was an ERISA Affiliate of
the Purchased Entities at any time since December 31, 1993, in respect of which
any liability could be expected to be incurred by any of the Purchased Entities.
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(c) Purchased Entities' Qualified Plans.
(i) Each Purchased Entities' Qualified Plan has
received a favorable determination letter (or opinion
letter) from the IRS providing that each such plan
satisfies the requirements of section 401(a) of the
Code, and each trust under each such plan is exempt
from Taxes under section 501(a) of the Code. To the
Knowledge of Seller, no event has occurred that will,
or would reasonably be expected to, give rise to
disqualification or loss of tax-exempt status of any
such plan or trust under such sections.
(ii) Seller and the Purchased Entities have made
available to Purchasers for each Purchased Entities'
Qualified Plan copies of the following documents, if
applicable: (A) the Form 5500 filed for each of the
three most recent plan years, including all schedules
thereto and financial statements with attached
opinions of independent accountants; and (B) the most
recent determination letter from the IRS.
(d) Purchased Entities' ERISA Plans and Multiemployer Plans.
No Purchased Entities' Employee Plan is, and no Employee Plan maintained by any
of the Purchased Entities during the three-year period prior to the date hereof
was, an ERISA Plan. None of the Purchased Entities has during the three-year
period prior to the date hereof contributed to, or withdrawn in a complete or
partial withdrawal from, any Multiemployer Plan or incurred any contingent
liability under section 4204 of ERISA, nor is there any current potential
liability for withdrawal from a Multiemployer Plan, in either case that would
have a Material Adverse Effect, except as disclosed in Schedule 5.6(d).
5.7 Labor and Employment Matters.
(a) Except as set forth in Schedule 5.7(a), (i) to the
Knowledge of Seller, none of the Purchased Entities is currently, or has been
within the past three years, engaged in any practice, act or course of conduct
which constitutes an unfair labor practice or discriminatory act or course of
conduct not in compliance with Applicable Law; (ii) as of the Effective Date,
there is no labor strike, dispute, slow down or stoppage pending or, to the
Knowledge of Seller, threatened against or directly affecting any of the
Purchased Entities; (iii) as of the Effective Date, none of the Purchased
Entities is a party to any pending grievance or arbitration proceeding arising
out of or under any collective bargaining agreement, and to the Knowledge of
Seller no claims therefor exist; (iv) no collective bargaining agreement exists
that is binding on any of the Purchased Entities; and (v) as of the Effective
Date, neither Seller, the Purchased Entities, nor any of their respective
Controlled Affiliates has received any written notice or has Knowledge of any
threatened labor or civil rights dispute, controversy or grievance or any other
unfair labor practice proceeding or breach of contract claim or action with
respect to claims of, or obligations to, any employee or group of employees of
any Purchased Entity, and the same will be true as of the Closing Date, except
as would not have a Material Adverse Effect.
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(b) To the Knowledge of Seller, as of the Effective Date,
there are no organizational efforts presently being made involving any
nonorganized employees of any of the Purchased Entities.
5.8 Intellectual Property.
(a) To the Knowledge of Seller, Schedule 5.8(a) sets forth a
complete and correct list of all material Intellectual Property.
(b) Immediately after the Closing and except as a result of
any actions by Purchasers thereafter, the Purchased Entities' ownership and/or
right to Intellectual Property (i) to the Knowledge of Seller will be the same
as the Purchased Entities' ownership and/or right immediately before the
Closing, (ii) will be free from any Liens, and (iii) will be free from any
requirement of any royalty payments, license fees, charges or other payments,
conditions or restrictions, except for Permitted Liens and otherwise as noted in
the Contracts identified in Schedule 5.8(a).
(c) Schedule 5.8(a) sets forth a complete and correct list of
all material agreements (i) pursuant to which the Purchased Entities have
licensed Intellectual Property, or have permitted any Person to use Intellectual
Property, and (ii) pursuant to which the Purchased Entities have been granted a
license to Intellectual Property. All such agreements (A) are in full force and
effect in accordance with their terms and no default exists thereunder by the
Purchased Entities, or to the Knowledge of Seller, by any other party thereto,
(B) are free and clear of all Liens, and (C) do not contain any
change-in-control provisions or other terms or conditions that will become
applicable or inapplicable as a result of the Closing, except as may be provided
in Contracts listed on Schedule 5.8(a).
(d) Except as set forth in Schedule 5.8(a), no claim or demand
has been made, nor is there any proceeding that is pending, or to the Knowledge
of Seller, threatened, that (i) challenges the Purchased Entities' rights in
Intellectual Property, (ii) asserts that the Purchased Entities are infringing
upon the intellectual property rights of another, or (iii) claims that any
default exists under any Contract listed in Schedule 5.8(a), in each case that
would have a Material Adverse Effect. None of the Intellectual Property is
subject to any outstanding order, ruling, decree, judgment or stipulation by or
with any court, arbitrator, or administrative agency, or has been the subject of
any litigation within the five years prior to the Effective Date, whether or not
resolved in favor of the Purchased Entities.
5.9 Environmental Compliance.
(a) To the Knowledge of Seller, each Purchased Entity has
obtained all approvals, authorizations, certificates, consents, licenses,
orders, and permits or other similar authorizations (collectively,
"Authorizations") of all Governmental Authorities, or from any other Person,
that are required under any Environmental Law, and all such Authorizations are
currently in effect, except where the failure to have any Authorization would
not have a Material Adverse Effect.
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(b) To the Knowledge of Seller, each Purchased Entity has been
and currently is in compliance in all material respects with all terms and
conditions of all Authorizations of all Governmental Authorities (and all other
Persons) required under all Environmental Laws, including the VCUP, and is also
in compliance in all material respects with all other limitations, restrictions,
conditions, standards, requirements, schedules and timetables required or
imposed under all Environmental Laws, including the VCUP, in each case except
where the failure to be in compliance would not have a Material Adverse Effect.
(c) Seller has not received notice of any claims which are
pending and, to the Knowledge of Seller, there are not any claims which are
threatened, relating to or alleging noncompliance or liability under any
Environmental Law with respect to any of the Purchased Entities or their
respective Assets (including the Arena Land and the Development Property),
except where such noncompliance or liability would not have a Material Adverse
Effect.
(d) True and complete copies of all permits, investigations,
studies, documents, reports, audits, tests, analytical data and correspondence
related to the environmental condition of the Assets of the Purchased Entities
which are in the possession or control of Seller or an Affiliate of Seller or
its respective consultants and agents have been made available to Purchasers.
5.10 Insurance.
(a) Sports Entities' Insurance Policies. Schedule 5.10(a) sets
forth a complete and correct list of all insurance policies of any kind or
nature whatsoever currently in force with respect to the Businesses of the
Sports Entities (the "Sports Entities' Insurance Policies"), including all
"occurrence based" liability policies regardless of the periods to which they
relate. Seller has delivered or made available to Purchasers complete and
correct copies of all Sports Entities' Insurance Policies, except for those
which are in the control of a Person other than Seller or its respective
consultants or agents. The Sports Entities' Insurance Policies as currently in
effect constitute insurance against risks of a character and in such amounts as
are reasonable and customary to be insured against by similarly situated
companies in the same or similar businesses, all of such insurance policies are
in full force and effect and are valid, outstanding and enforceable, and all
premiums due thereon have been paid currently.
(b) Ascent Arena Entities' Insurance Policies. The Ascent
Arena Entities have the benefit, pursuant to policies carried by such entities
or by the Construction Contractor for their benefit, of policies of fire and
casualty, general liability and excess or umbrella liability, builder's risk,
business automotive, workers' compensation, employers' liability, business
interruption and other forms of insurance in such amounts, with such deductibles
and against such risks and losses as are reasonable in relation to the operation
of the businesses of such entities, including construction of the Pepsi Center,
and which comply in all material respects with the insurance requirements set
forth in the Operating and Management Agreement. All such policies are in full
force and effect, all premiums due and payable thereon as of the date hereof
have been paid, and no notice of cancellation or termination has been received
with respect to any such policy which policy has not been replaced prior to the
date of such cancellation. The activities of the Ascent Arena Entities have
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been conducted in a manner so as to conform in all material respects to all
applicable provisions of such insurance policies. Except as set forth on
Schedule 5.10(b), the coverage of such policies will not cease upon Closing, and
to the Knowledge of Seller the Ascent Arena Entities will continue to be
entitled to the benefits of such policies assuming compliance post-Closing by
Purchasers with the terms and conditions of such policies.
5.11 Tax Matters.
(a) Purchased Entities and Predecessor Entities.
(i) All Returns required to be filed by or on behalf
of any Purchased Entity, and all Returns required to
be filed by or on behalf of any Predecessor Entities
(which, together with the Purchased Entities, are
each referred to herein individually as a "P&P
Entity" and collectively as the "P&P Entities"), have
been duly filed on a timely basis and all Returns
filed by or on behalf of each P&P Entity (including
all attached statements and schedules) are true,
complete and correct in all respects, except for such
failures to file and failures to be true, complete
and correct as would not, individually or in the
aggregate, have a Material Adverse Effect. No claim
has been made or threatened in writing by any
jurisdiction where a P&P Entity does not file Returns
that the P&P Entity is or may be subject to Taxes in
that jurisdiction. All Taxes shown to be payable on
such Returns or on subsequent assessments with
respect thereto have been paid in full on a timely
basis. No other Taxes are payable by any P&P Entity
with respect to items or periods covered by such
Returns (whether or not shown on or reportable on
such Returns), except for such Taxes as would not,
individually or in the aggregate, have a Material
Adverse Effect.
(ii) Each P&P Entity has withheld and paid over all
Taxes required to have been withheld and paid over
(including any estimated Taxes), and has complied
with all information reporting and backup withholding
requirements, including maintenance of required
records with respect thereto, in connection with
amounts paid or owing to any employee, creditor,
independent contractor or other third party, except
for such failures to withhold or pay over and such
failures to comply as would not, individually or in
the aggregate, have a Material Adverse Effect.
(iii) There are no Liens on any of the Assets of a
P&P Entity with respect to Taxes, other than Liens
for Taxes not yet due and payable or for Taxes that
are being contested in good faith through appropriate
proceedings and for which appropriate reserves have
been established, except for such Liens as would not,
individually or in the aggregate, have a Material
Adverse Effect.
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(iv) Prior to Closing, Seller shall make available to
Purchasers, during normal business hours, true and
complete copies of all Returns of each P&P Entity for
all periods beginning after December 31, 1995, all
tax audit reports, work papers, statements of
deficiencies, closing or other agreements received by
a P&P Entity or on its behalf relating to Taxes of
any P&P Entity for any period beginning after
December 31, 1995 (and with respect to periods
beginning on or before December 31, 1995, any
Returns, tax audit reports, work papers, statements
of deficiencies, closing or other agreements received
by or relating to Taxes of any P&P Entity that are in
Seller's possession), and Purchasers shall be
permitted to inspect and make copies of such Returns,
audit reports, work papers, statements and
agreements.
(v) Each of the Purchased Entities, other than the
Denver Arena Trust, LLC-I and LLC-II, has been
properly classified as a "partnership" for federal
income tax purposes, at all times since its
formation. (Each Purchased Entity that is classified
as a partnership for federal income tax purposes as
of the Closing Date is referred to herein as a
"Partnership Entity.") Each of LLC-I and LLC-II has
been properly treated as a "disregarded entity" for
federal income tax purposes at all times since
formation (that is, for federal income tax purposes,
LLC-I and LLC-II each is and has been at all times
treated as a division of HC and not as a separate
entity). The Denver Arena Trust has been properly
treated as a "disregarded entity" for federal income
tax purposes at all times since its formation (that
is, for federal income tax purposes, The Denver Arena
Trust is and has been at all times treated as a
division of Ascent Arena Company and not as a
separate entity). Each Predecessor Entity was at all
times prior to its merger or liquidation into a
Purchased Entity properly classified as a corporation
for federal income tax purposes (each such
Predecessor Entity that was at any time classified as
a corporation for federal income tax purposes being
referred to herein as a "Corporate Entity").
(vi) (A) Except as disclosed on Schedule
5.11(a)(vi)(A), there are no audits, inquiries,
investigations or examinations relating to any
Returns referred to in Section 5.11(a)(i) pending or,
to the Knowledge of Seller, threatened in writing.
(B) Except as disclosed on Schedule
5.11(a)(vi)(B), no deficiencies exist or have been
asserted in writing with respect to Taxes of any P&P
Entity, and no written notice has been received by a
P&P Entity (or by any partner that is a Controlled
Affiliate of Seller of any P&P Entity that is a
Partnership Entity) with respect to the failure to
file any Return or pay any Taxes.
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(C) No P&P Entity is a party to any action
or proceeding for assessment or collection of Taxes,
nor has such action or proceeding been asserted or
threatened in writing against it or any of its
assets.
(D) Except as set forth on Schedule
5.11(a)(vi)(D), no Corporate Entity has ever been
included in an affiliated group of corporations,
within the meaning of section 1504 of the Code, and
none has ever been a member of any combined or
unitary group, in each case other than a group the
common parent of which was AEG.
(E) For all periods beginning on or after
July 1, 1997 until the liquidation or merger of a
Corporate Entity into a Purchased Entity, each
Corporate Entity joined or will join in the filing of
consolidated federal income tax returns as part of
the consolidated group of which AEG is the parent
company and joined or will join in the filing of
consolidated, combined or unitary state income tax
returns as part of a consolidated, combined or
unitary group of which AEG is the parent company for
the states listed on Schedule 5.11(a)(vi)(E).
(F) Except as disclosed on Schedule
5.11(a)(vi)(F), no extension of time to file any
Return (which has not been filed) has been requested
by or granted by a P&P Entity. No waiver or extension
of any statute of limitations is in effect with
respect to Taxes or Returns of a P&P Entity.
(G) Except as disclosed on Schedule
5.11(a)(vi)(G), no P&P Entity is or was a party to
any tax sharing agreement, tax indemnity agreement,
tax allocation agreement, or similar arrangement with
any Person.
(H) The amount of each P&P Entity's
liability for unpaid Taxes for all periods ending on
or before the Balance Sheet Date, determined on a
GAAP basis (taking into account the Return
Preparation Standard) does not exceed the amount of
the current liability accruals for Taxes (excluding
reserves for deferred Taxes) as of that date, and the
amount of a P&P Entity's liability for unpaid Taxes
for all periods ending on or before the Closing Date
determined on a GAAP basis (taking into account the
Return Preparation Standard) will not exceed the
amount of the current liability accruals for Taxes
(excluding reserves for deferred Taxes) as such
accruals will be reflected on the balance sheet of
the Purchased Entities as of the Closing Date, except
to the extent any excess of such Taxes over the
relevant current liability accrual amount would not
have a Material Adverse Effect.
(vii) Except as disclosed on Schedule 5.11(a) (vii):
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(A) No P&P Entity is required to treat any
Asset as owned by another Person for federal income
tax purposes or as tax-exempt bond financed property
or tax-exempt use property within the meaning of
section 168 of the Code. No P&P Entity has made or is
bound by any election under section 197(f)(9)(B) of
the Code.
(B) No P&P Entity has disposed of any
property that is currently being accounted for under
the installment method.
(C) Within the last five years, no P&P
Entity has agreed to make, and has not been required
to make, any adjustment under section 481 of the Code
by reason of a change in accounting method or
otherwise.
(D) No P&P Entity is a member of any joint
venture or partnership or a party to any other
arrangement or contract that is treated as a
partnership for federal income tax purposes, except
another Purchased Entity and Mountain Mobile.
(E) No P&P Entity has made elections
comparable to those described in this section under
any state, local or foreign tax law or is required to
apply any rules comparable to those described in this
section under any state, local or foreign tax laws.
(F) The transactions contemplated hereby are
not subject to the tax withholding provisions of
section 3406 of the Code, or of Subchapter A of
Chapter 3 of the Code, or of any other provision of
Applicable Law.
(G) No Corporate Entity has made any
election under section 338 of the Code, and no action
has been taken that would result in any Income Tax
liability with respect to any such Corporate Entity
as a result of a deemed election within the meaning
of section 338 of the Code.
5.12 Sports Entities.
(a) Absence of Certain Changes. Except as set forth in
Schedule 5.12(a), since the Balance Sheet Date there has not been any event,
occurrence, or change in the Business of any of the Sports Entities (including
any uninsured damage, destruction or other casualty loss) or change affecting
such Business that would result in a Material Adverse Effect.
(b) Sports Entities' Contracts.
(i) As of the Effective Date, Schedule 5.12(b)(i)
contains an accurate and complete list of all Sports
Entities' Contracts, including all amendments thereto
and modifications thereof (whether written or oral).
Seller shall
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deliver to Purchasers an updated version of Schedule
5.12(b)(i) on the Closing Date.
(ii) Seller has made available true and correct
copies of the Sports Entities' Contracts to
Purchasers. As of the Effective Date, each of the
Sports Entities' Contracts is in full force and
effect and is binding upon and enforceable in
accordance with its terms against the Sports Entities
and, to the Knowledge of Seller, each other party
thereto, subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of
equity (whether or not such enforcement is considered
in a Proceeding at law or in equity). As of the
Closing Date, each of the Sports Entities' Contracts
will be in full force and effect and will be binding
upon and enforceable in accordance with its terms
against the Sports Entities and, to the Knowledge of
Seller, each other party thereto, subject to (i)
bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws
affecting creditors' rights generally and (ii)
general principles of equity (whether or not such
enforcement is considered in a Proceeding at law or
in equity), except for any failure to be in full
force and effect or to be so binding and enforceable
as would not have a Material Adverse Effect.
(iii) Except as disclosed in Schedule 5.12(b)(i) with
respect to the Local Television License Agreement (as
described on such Schedule), there has not occurred
any default, event of default or, to the Knowledge of
Seller, any circumstance that with notice or the
passage of time, or both, would constitute a default
or event of default of the Sports Entities or, to the
Knowledge of Seller, of any other party to a Sports
Entities' Contract, except in either case for any
defaults or events of default that would not
constitute a Material Adverse Effect.
(iv) Except as set forth in the Sports Entities'
Contracts themselves, no Sports Entity has assigned
any of its rights pursuant to any Sports Entities'
Contract to any Person, and each applicable Sports
Entity holds its rights pursuant to the Sports
Entities' Contracts free and clear of any Lien.
(c) Arena Land.
(i) As of the Effective Date and prior to the City
Transfer,
(A) Nuggets LP has good and marketable title
to the Arena Land, subject to the Permitted Liens.
Except as provided in the Arena Agreement, there are
no outstanding rights of first refusal, rights of
reverter or options relating to the Arena Land or any
interest therein, subject to the Permitted Liens. To
Seller's Knowledge, except as disclosed on Exhibit
"B," there are
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no unrecorded or undisclosed documents or other
matters which affect title to the Arena Land. No
Person holding a security interest in the Arena Land
or any part thereof has the right to consent or deny
consent to the transactions contemplated by this
Agreement, other than the City Consent.
(B) The current zoning of the Arena Land is
PUD 440, which permits the current improvements
thereon (including the Pepsi Center) and Seller's
currently contemplated uses of the Arena Land, and
there is no pending or, to the Knowledge of Seller,
contemplated rezoning.
(C) To the Knowledge of Seller, there is no
violation of any Applicable Law or the VCUP relating
to the Arena Land, except any such violation as would
not result in a Material Adverse Effect. Nuggets LP
has not leased or subleased any parcel or any portion
of the Arena Land (other than pursuant to the Ground
Lease) to any other Person.
(D) There are no condemnation proceedings or
eminent domain proceedings of any kind pending or, to
the Knowledge of Seller, threatened against the Arena
Land.
(ii) As of the Effective Date and as of the Closing
Date (whether before or after the City Transfer,
except as otherwise specifically provided),
(A) No improvements on the Arena Land and
none of Seller's currently contemplated uses violate,
or will violate, in any material respect any
applicable deed restrictions or other applicable
covenants, restrictions, agreements, existing site
plan approvals, zoning or subdivision regulations or
urban redevelopment plans as modified by any duly
issued variances, except any such violation as would
not result in a Material Adverse Effect. No permits,
licenses or certificates pertaining to the ownership
or operation of all improvements on the Arena Land,
other than those which are transferable with the
Arena Land, are required by any Governmental
Authority having jurisdiction over the Arena Land.
(B) Except as disclosed on Schedule
5.12(c)(vi), to the Knowledge of Seller, all
improvements on the Arena Land are wholly within the
lot limits of the Arena Land and do not encroach on
any adjoining premises, and there are no
encroachments on the Arena Land by any improvements
located on any adjoining premises, in each case,
other than the Permitted Liens.
(C) Ascent Arena Company is the lessee of
the Arena Land pursuant to the Ground Lease. Neither
Ascent Arena Company, as lessee, nor, prior to the
City Transfer, Nuggets LP, as lessor, or, after the
City Transfer, to the Knowledge of Seller, the City,
as lessor, is in default under
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the Ground Lease, and there has not occurred any
event or circumstance that, with notice or the
passage of time, or both, would constitute a default
under the Ground Lease.
(D) The Purchased Entities, as applicable,
have obtained and currently hold all approvals,
authorizations, certificates, consents, licenses,
orders, and permits or other similar authorizations
of all Governmental Authorities that are required to
their stage of construction as of the Effective Date
under any Applicable Law to permit development of the
Pepsi Center on the Arena Land.
(E) All easements required or necessary as
of the Effective Date for Seller's intended use and
development of the Arena Land and the Pepsi Center
have been obtained.
(F) Subject to the Permitted Liens, Ascent
Arena Company is (A) the owner of the improvements on
the Arena Land, (B) the owner of the overhead
pedestrian bridge (the "Overhead Bridge") connecting
(and over a portion of) the Arena Land and the Elitch
Gardens Amusement Park (the "Elitch Property"), (C)
the licensee (either individually or jointly with
Nuggets LP) of a City permit regarding the ownership,
operation and maintenance of that portion of the
Overhead Bridge over City property and right-of-way,
(D) the grantee (either individually or jointly with
Nuggets LP) of easements on the Elitch Property
regarding the use of the Elitch Property for the
Overhead Bridge and for parking for the Pepsi Center
(the "Elitch Easements"), and (E) the tenant of
property adjacent to the Arena Land described in
Exhibit "A-3" (the "Leased Property") pursuant to
Lease Agreement dated March 28, 2000 between Ascent
Arena Company and the Board of Directors of the
Auraria Higher Education Center.
(d) Tangible Assets. The Sports Entities own and have good
title to or, in the case of leased properties or properties held under license,
a good and valid leasehold or license interest in, all of their material Assets
reflected in the Financial Statements, Nuggets Balance Sheet and the Avalanche
Balance Sheet, except those Assets disposed of in the ordinary course of
business after the date thereof, free and clear of all Liens.
(e) Affiliate Contracts. As of the Effective Date, Schedule
5.12(e) identifies all Sports Entities' Contracts between any Sports Entity, on
the one hand, and any Affiliate of such Sports Entity, on the other hand. Seller
shall deliver to Purchasers an updated version of Schedule 5.12(e) on the
Closing Date.
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(f) Permits; Required Consents.
(i) Schedule 5.12(f)(i) sets forth all material
certificates, licenses, orders and permits or other
similar authorizations of all Governmental
Authorities (and all other Persons) necessary for the
operation of the Sports Entities and their respective
Businesses in substantially the same manner as
currently operated (the "Sports Entities' Permits").
(ii) Schedule 5.12(f)(ii) lists (A) each governmental
or other registration, filing, application, notice,
transfer, consent, approval, order, qualification and
waiver (each, a "Sports Entities' Required
Governmental Approval") required under Applicable Law
to be obtained by the Sports Entities by virtue of
the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby
to avoid the loss of any material Sports Entities'
Permit, and (B) each Sports Entities' Contract with
respect to which the consent of the other party or
parties thereto that must be obtained by the
applicable Sports Entity by virtue of the execution
and delivery of this Agreement or the consummation of
the transactions contemplated hereby (each, a "Sports
Entities' Required Contractual Consent" and
collectively with the Sports Entities' Required
Governmental Approvals, the "Sports Entities'
Required Consents"). Except as set forth in Schedule
5.12(f)(i), each Sports Entities' Permit is valid and
in full force and effect in all material respects
and, assuming the related Sports Entities' Required
Consents have been obtained prior to the Closing
Date, will be in full force and effect immediately
after the Closing, except where any such failure to
be in full force and effect would not result in a
Material Adverse Effect.
(g) Compliance with Laws. Except as set forth in Schedule
5.12(g), the Sports Entities are operating their respective Businesses in
compliance in all material respects with all Applicable Laws, or any material
order, writ, injunction or decree of any Governmental Authority, except where
any such noncompliance would not result in a Material Adverse Effect.
5.13 Ascent Arena Entities.
(a) Denver Arena Trust. Ascent Arena Company has received
certain distributions of the Residual Interest or other amounts pursuant to the
Trust Agreement. Such distributions have been made in compliance with the Trust
Agreement.
(b) Licenses. To the Knowledge of Seller, Ascent Arena
Entities hold all licenses, franchises, authorizations, permits, and approvals
(collectively, the "Licenses") which are necessary for or material to
construction, ownership, use, operation or maintenance of the Pepsi Center. No
License has been revoked or suspended, and to the Knowledge of Seller, no such
revocation or suspension is pending or threatened. The Licenses will be in full
force and effect immediately after the Closing.
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(c) Title to Assets. The Ascent Arena Entities hold good title
to all of their respective material Assets reflected in the Financial
Statements, except those Assets disposed of in the ordinary course of business
after the date thereof, free and clear of all Liens.
(d) Advance Booking Contracts. As of the Effective Date,
Schedule 5.13(d) sets forth all material advance bookings for events or
entertainment at the Pepsi Center (collectively, the "Advance Booking
Contracts"). Seller shall deliver to Purchasers an updated version of Schedule
5.13(d) on the Closing Date.
(e) Ascent Arena Entity Contracts. Except for the Contracts
disclosed in Schedule 5.13(d) and the Arena Contracts, Schedule 5.13(e)
contains, as of the Effective Date, an accurate and complete list of all
material Contracts to which any Ascent Arena Entity is a party or by which it is
bound. Seller shall deliver to Purchasers an updated version of Schedule 5.13(e)
on the Closing Date.
5.14 Pepsi Center.
(a) Construction Issues.
(i) Seller has made available to Purchasers true and
complete copies of the Plans and Specifications and
all material written reports regarding construction
of the Pepsi Center, including those reports
delivered to Denver Arena Trust or the Indenture
Trustee by its construction consultant (the
"Construction Reports").
(ii) Interim or final lien waivers have been obtained
from the Architect, Construction Contractor and all
subcontractors, materialmen and suppliers performing
any work or supplying any materials with respect to
the Pepsi Center, pursuant to which each such Person
has waived all lien rights and claims with respect to
all interim payments made to such Person. Neither
Seller nor any of its Affiliates have received a
notice of intent to file a lien against the Arena
Land or the Pepsi Center, and no mechanics' lien or
claim of lien has been asserted or threatened against
the Arena Land or the Pepsi Center that has not been
resolved as of the Effective Date.
(iii) Other than the Permitted Liens, all portions of
the Pepsi Center are located on the Arena Land,
without encroachment onto any other real property.
All portions of the Pepsi Center constructed as of
the Effective Date and as of the Closing have been
constructed substantially in accordance with the
Plans and Specifications.
(iv) Utility service lines and connections necessary
to provide water, sewer, gas, electricity and
telephone service to the Pepsi Center at levels
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sufficient to support its operation, use and
maintenance in accordance with the Arena Agreement
have been installed and are available for use.
(v) The Plans and Specifications were approved by all
Governmental Authorities, design review committees
and similar entities whose approval of construction
or use of the Pepsi Center is required prior to
construction under any Applicable Law, covenant,
condition, restriction or reservation. All such
approvals remain effective, and, to the Knowledge of
Seller, there exist no violations of such approvals
or conditions of such approvals which have not been
satisfied.
(b) Arena Contracts.
(i) Seller has made available to Purchasers true and
complete copies of the Arena Contracts. Each of the
Arena Contracts is in full force and effect and is
binding upon and enforceable in accordance with its
terms against the Ascent Arena Entities and, to the
Knowledge of Seller, each other party thereto,
subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of
equity (whether or not such enforcement is considered
in a Proceeding at law or in equity), except for any
failure to be in full force and effect or to be so
binding and enforceable as would not have a Material
Adverse Effect.
(ii) Except as disclosed on Schedule 5.14(b)(ii),
there has not occurred any default, event of default
or, to the Knowledge of Seller, any circumstance that
with notice or the passage of time, or both, would
constitute a default or event of default of any
Ascent Arena Entities under any Arena Contract or, to
the Knowledge of Seller, any default or event of
default of any other party to an Arena Contract,
except in either case for any defaults or events of
default that would not constitute a Material Adverse
Effect.
(iii) Except as set forth in the Arena Contracts
themselves, no Ascent Arena Entity has assigned any
of its rights pursuant to any Arena Contract to any
Person, other than pursuant to the City Lien and the
Trustee's Lien, and each Ascent Arena Entity holds
its rights pursuant to the Arena Contracts, free and
clear of any Lien.
(iv) Except as set forth in Schedule 5.14(b)(iv),
Ascent Arena Company has not delegated any of its
duties pursuant to the Sale and Servicing Agreement,
other than pursuant to the subservicing portions of
the Operating and Management Agreement.
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(v) Seller has made available to Purchasers true and
complete copies of all Servicer's Remittance Reports
prepared and delivered to the Indenture Trustee
pursuant to the Sale and Servicing Agreement.
(vi) Fees payable to Ascent Arena Company pursuant to
the Sale and Servicing Agreement have not been
prepaid, and Ascent Arena Company is entitled to
receipt of such fees as provided in the Sale and
Servicing Agreement.
(vii) Other than as set forth in the Arena Contracts,
no prepayments have been made under any Arena
Contract.
(viii) A true and correct copy of the current annual
operating budget for the Pepsi Center prepared
pursuant to the Operating and Management Agreement
was delivered or made available to Purchasers
pursuant to this Agreement. Such operating budget
constitutes a reasonable estimate of the annual
operating expenses for operation of the Pepsi Center
based upon reasonable assumptions in light of current
circumstances regarding the operation of the Pepsi
Center under Seller's indirect ownership.
(ix) Except as disclosed on Schedule 5.14(b)(ix),
Seller has no Knowledge of any event or circumstance
that would limit or impair in any material respect
DURA's obligation or ability to honor its
reimbursement or payment obligations pursuant to the
Redevelopment Agreement.
(c) Accounts. The balances of the Accounts are as set forth on
Schedule 5.14(c) as of the date indicated on such Schedule. All required
deposits into and transfers among the Accounts have been made in compliance with
the Sale and Servicing Agreement.
5.15 Mountain Mobile.
(a) No Defaults. To the Knowledge of Seller, Mountain Mobile
is not in default of any obligation to any Person pursuant to any Contract,
which default would have a Material Adverse Effect.
(b) No Additional Capital Contributions or Loans. By virtue of
becoming a member of Mountain Mobile, KMS Sports will not have any obligation to
contribute capital or make loans to Mountain Mobile except to the extent
provided in or permitted by the Operating Agreement of Mountain Mobile delivered
to Purchasers pursuant to this Agreement.
(c) Compliance with Laws. Except as set forth in Schedule
5.15(c), to the Knowledge of Seller, Nuggets LP, and LLC-I, Mountain Mobile has
operated its Business in compliance in all material respects with all Applicable
Laws and any applicable material order, writ, injunction or decree of any
Governmental Authority.
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5.16 Development Property.
(a) LLC-II has good and marketable title to the Development
Property, subject to the Permitted Liens. There are no outstanding rights of
first refusal, rights of reverter or options relating to the Development
Property or any interest therein other than the Permitted Liens. To the
Knowledge of Seller, there are no unrecorded or undisclosed documents or other
matters which affect title to the Development Property (other than Permitted
Liens). LLC-II has not leased or subleased any parcel or any portion of any
parcel of the Development Property to any other Person other than pursuant to
the Conoco Lease.
(b) To the Knowledge of Seller, LLC-II has not committed any
violation of any Applicable Law (including any building, planning or Applicable
Law related to zoning and all approvals, authorizations, certificates, consents,
licenses, orders, and permits or other similar authorizations of all
Governmental Authorities (and all other Persons) required under the VCUP and any
other Environmental Law) relating to any of the Development Property, except any
such violation as would not result in a Material Adverse Effect.
(c) There are no condemnation proceedings or eminent domain
proceedings of any kind pending or, to the Knowledge of Seller, threatened
against any of the Development Property.
(d) Other than the Permitted Liens and other than pursuant to
the Conoco Lease, the Development Property is vacant, unimproved land having a
zoning classification of PUD 440 pursuant to Applicable Law related to zoning,
and there is no pending or, to the Knowledge of Seller, contemplated rezoning.
(e) Other than Permitted Liens, to the Knowledge of Seller
there are no encroachments onto the Development Property by any improvements
located on any adjoining premises, including the Arena Land.
5.17 Advisory Fees. No Seller has retained or authorized any investment
banker, broker, finder or other intermediary or advisor to act on behalf of
Seller or any of its respective Affiliates in connection with the Transactions
contemplated by this Agreement, except for the Financial Advisors as financial
advisors to Seller. Seller shall be solely responsible for all costs and
expenses due the Financial Advisors.
5.18 Operations Since Effective Date. From the Effective Date through
the Closing Date, AEG has performed and complied in all material respects with
all of the terms of Article III of this Agreement.
5.19 No Other Representations or Warranties. Purchasers acknowledge
that Seller has not made and does not make, and Purchasers have not relied on,
any representation or warranty, whether express or implied, of any kind or
character except as expressly set forth in this Article ▇.
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▇▇
▇▇▇▇▇▇▇ ▇▇.
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
As an inducement to Seller to enter into this Agreement, Purchasers, as
applicable, each represent, warrant and covenant to Seller, that the following
matters are true and correct as of the Effective Date and as of the Closing Date
unless limited to a specific date.
6.1 Existence and Power. Each Purchaser is a limited liability company
duly formed, validly existing and in good standing under the laws of the State
of Missouri, and will be duly registered in and authorized by the State of
Colorado to transact business in the State of Colorado as of the Closing Date
(or as of such earlier date as may be required by the City). Each Purchaser has
all power and authority to enter into this Agreement and to carry out and
perform its obligations under the terms of this Agreement and any other
Transaction Document to which it is a party. The execution, delivery and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of each Purchaser. This Agreement and each other Transaction
Document constitutes a legal, valid and binding agreement of each Purchaser,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
6.2 Governmental Authorization. The execution, delivery and performance
by Purchasers of this Agreement and each other Transaction Document require no
action by, consent or approval of, or filing with, any Governmental Authority
other than:
(a) compliance with any applicable requirements of the HSR Act
with respect to the consummation of the transactions contemplated hereby;
(b) compliance with the registration requirements of the
Securities Act, or an exemption therefrom, and any applicable state blue sky
laws; and
(c) as set forth in this Agreement.
6.3 Non-Contravention. The execution, delivery and performance by
Purchasers of this Agreement and each other Transaction Document does not and
will not (a) contravene or conflict with the limited liability company
agreements of Purchasers, (b) contravene or conflict with or constitute a
violation of any Applicable Law binding upon or applicable to Purchasers, (c)
constitute a default under any contract, agreement or other commitment to which
any Purchaser is a party or by which any Purchaser is bound, or (d) contravene
or conflict with or constitute a violation of, or require any consent or
approval under or filing under, any rules or regulations of the National
Football League that are binding upon or applicable to Purchasers, Kroenke or
any Person in which Kroenke or any Affiliate of Kroenke has an interest.
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6.4 Securities Matters.
(a) The Equity Interests are being acquired for Purchasers'
own accounts, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act.
(b) Purchasers understand that the Equity Interests have not
been registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act pursuant to section 4(2) thereof, that Seller has no present
intention of registering the Equity Interests, that the Equity Interests must be
held by Purchasers indefinitely, and that Purchasers must therefore bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from registration.
(c) During the negotiation of the transactions contemplated
herein, Purchasers and their representatives have been furnished with and have
had access to such information as Purchasers have considered necessary to make a
determination as to the purchase of the Equity Interests, have been afforded an
opportunity to ask such questions of Seller and the Purchased Entities'
officers, employees and representatives concerning the Purchased Entities'
business, operations, financial condition, assets, liabilities and other
relevant matters as they have deemed necessary or desirable, and have been given
all such information as has been requested, in order to evaluate the merits and
risks of the prospective investments contemplated herein.
(d) Purchasers and their representatives have been solely
responsible for Purchasers' own due diligence investigation of the Purchased
Entities and its management and business, for their own analysis of the merits
and risks of this investment, and for their own analysis of the fairness and
desirability of the terms of the investment. In taking any action or performing
any role relative to the arranging of the proposed investment, Purchasers have
acted solely in their own interest, and no Purchaser (or any of their agents or
employees) has acted as an agent of Seller.
(e) Each Purchaser (i) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of such Purchaser's prospective investment in the Equity Interests; (ii)
has the ability to bear the economic risks of such Purchaser's prospective
investment, including a complete loss of Purchaser's investment in the Equity
Interests; and (iii) has not been offered the Equity Interests by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.
6.5 Advisory Fees. No Purchaser has retained or authorized any
investment banker, broker, finder or other intermediary or advisor to act on
behalf of Purchasers or their Affiliates who might be entitled to any fee,
commission or reimbursement of expenses from Purchasers, Seller or any of its
respective Affiliates upon consummation of the transactions contemplated by this
Agreement.
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6.6 Litigation. There is no proceeding pending or, to the knowledge of
Kroenke or any Purchaser, threatened against or affecting Kroenke or any
Purchaser before any court or arbitrator or any governmental body, agency or
official, that in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by the Transaction Documents.
6.7 Beneficial Ownership.
(a) The Persons who "beneficially own" (within the meaning of
section 13(d)(3) of the Securities Exchange Act of 1934, as amended) any
interests in Purchasers (such Persons collectively referred to as the
"Principals," and individually as a "Principal"), and the amount of such
interests each such Principal "beneficially owns," are set forth on Schedule
6.7(a). No other Person not listed on Schedule 6.7(a) has or will have as of the
Closing Date any right, contract, agreement, arrangement or understanding with
respect to any interests in any Purchaser.
(b) Purchasers and the Principals understand and acknowledge
that each of the City, the NBA and the NHL have various requirements regarding
the suitability of owners of, respectively, Ascent Arena Company, an NBA
franchise and an NHL franchise, and Purchasers and the Principals are familiar
with such requirements. To the knowledge of Purchasers and the Principals, no
Person listed on Schedule 6.7(a) has: (i) ever had a petition under the federal
bankruptcy laws or any state bankruptcy or insolvency laws filed by or against
such Person or any partnership in which such Person was a general partner at the
time of or within two years prior to such filing, any limited liability company
in which such Person was a member at the time of or within two years prior to
such filing, or any corporation or business association of which such Person was
an executive officer or director at the time of or within two years prior to
such filing; (ii) been convicted in a criminal proceeding or been named subject
of a pending criminal proceeding (excluding minor traffic violations or other
minor offenses); (iii) been the subject of any order, judgment, or decree not
subsequently reversed, suspended or vacated, of any Governmental Authority,
permanently or temporarily enjoining such Person from, or otherwise limiting
such Person from, engaging in any type of business activity; (iv) ever had any
ties to or relationships with organized crime or any Persons involved in
organized crime; or (v) engaged in any illegal, unethical or inappropriate
conduct that could reasonably be expected to serve as a basis for any of the
City, the NBA or the NHL to not approve Purchasers or any Principals as an owner
of, respectively, Ascent Arena Company, the Nuggets or the Avalanche.
Additionally, each of the Principals has a net worth and financial liquidity
that are reasonably expected to meet the requirements of the City, the NBA and
the NHL.
6.8 No Other Representations. Seller acknowledges that Purchasers and
the Principals have not made and do not make, and Seller has not relied on, any
representation or warranty, whether express or implied, of any kind or character
except as expressly set forth in this Article VI.
6.9 Financial Matters. Purchasers have, or at Closing will have,
sufficient funds available to consummate the transactions contemplated by this
Agreement.
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ARTICLE VII.
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Purchasers. The obligations of
Purchasers to consummate the Closing are subject to the satisfaction, or waiver
by Purchasers, of each of the following conditions:
(a) Seller shall have performed and complied in all material
respects with all of the terms of this Agreement to be performed and complied
with by Seller prior to or at Closing.
(b) All of the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
as of the Closing Date, except for those representations and warranties which
are made as of a specific date, which shall be true and correct in all material
respects as of such date.
(c) Seller shall have delivered to Purchasers a certificate
signed by an authorized officer stating that, as of the Closing Date, the
conditions set forth in Sections 7.1(a) and 7.1(b) have been satisfied.
(d) No temporary restraining order, preliminary or permanent
injunction, stay, cease and desist order or other order issued by any court of
competent jurisdiction or any competent Governmental Authority prohibiting the
consummation of the Closing shall be in effect.
(e) Except the City Consent (which shall be governed by
Section 7.1(h)) and compliance with the HSR Act (which shall be governed by
Section 7.1(i)), all material Sports Entities' Required Governmental Approvals
shall have been obtained without the imposition of any conditions unacceptable
to Purchasers in their reasonable discretion. All such Sports Entities' Required
Governmental Approvals shall be in effect, all applicable waiting periods with
respect to such Sports Entities' Required Governmental Approvals shall have
expired, and all conditions and requirements prescribed by Applicable Law or by
such Sports Entities' Required Governmental Approvals to be satisfied on or
prior to the Closing Date shall have been satisfied to the extent necessary such
that all such Sports Entities' Required Governmental Approvals are in full force
and effect as of the Closing.
(f) Except the consents of the NBA and NHL (which shall be
governed by Section 7.1(g)), all material Sports Entities' Required Contractual
Consents shall have been obtained without the imposition of any conditions
unacceptable to Purchasers in their reasonable discretion. All such Sports
Entities' Required Contractual Consents shall be effective, and all conditions
and requirements prescribed by any such Sports Entities' Required Contractual
Consent to be satisfied on or prior to the Closing Date shall have been
satisfied to the extent necessary such that all such Sports Entities' Required
Contractual Consents are in full force and effect as of the Closing.
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(g) All required written consents of the NBA and the NHL to
the transfer of membership and partnership interests contemplated by this
Agreement shall have been obtained on customary or otherwise reasonable terms
and conditions; provided that terms and conditions similar to those included in
the existing Consent Agreements of the Avalanche or the existing Agreements and
Undertakings of the Nuggets, including any Consent Agreement of the Avalanche
and any Agreement and Undertaking of the Nuggets entered into in connection with
the acquisition of control of Sellers by Liberty Media Corporation, or otherwise
consistent with conditions imposed on other NBA (including specifically former
American Basketball Association) teams or NHL teams will be deemed to be
customary or otherwise reasonable terms and conditions. Each of KMS Sports and
KMN Ball shall have received satisfactory assurance, either through written
confirmation from the NBA that league approval was obtained at a meeting of the
NBA's board of governors, or by a unanimous authorization by the NBA Member
Teams, the NBA, or otherwise in accordance with such league's Organizational
Documents, to the transfer of the Nuggets to each of KMS Sports and KMN Ball.
(h) The City Consent shall have been obtained without the
imposition of any conditions that are unreasonable and unacceptable to
Purchasers in their reasonable judgment, it being understood that the conditions
described in Section 9.10 in no event will be deemed unreasonable or
unacceptable to Purchasers.
(i) If the filing of a Notification Form under the HSR Act is
required, the waiting period applicable to the consummation of the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
terminated.
(j) Purchasers must have received (i) a "date-down"
endorsement, in form and substance reasonably satisfactory to Purchasers, to the
existing title insurance policy covering the Arena Land, unless the Arena Land
has been conveyed to the City pursuant to the Arena Agreement, and (ii) either
an extended coverage title insurance policy pursuant to the existing title
commitment covering the Development Property, if one has not been issued prior
to the Closing, or a "date-down" endorsement, in form and substance reasonably
satisfactory to Purchasers, to the title insurance policy covering the
Development Property previously issued pursuant to such title commitment.
(k) Purchasers must have received evidence reasonably
satisfactory to them that all Liabilities of any Purchased Entity to Seller or
any other Purchased Entity have been forgiven and discharged, other than
Liabilities created by this Agreement.
(l) Purchasers must have received current certificates of good
standing from the Delaware Secretary of State with regard to AEG, HC, LLC-I,
Nuggets LP, LLC-II, and, if applicable, Denver Arena Trust.
(m) Purchasers must have received current certificates of good
standing from the Colorado Secretary of State with regard to Ascent Arena
Company, Arena Operating Company, Avalanche LLC and the Nevada Secretary of
State with regard to Mountain Mobile.
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(n) Purchasers must have received a copy of the independent
public accountants' report to be submitted on or before May 31, 2000, pursuant
to the Sale and Servicing Agreement, and such report must state that such
accountants have performed certain procedures in connection with Ascent Arena
Company's compliance with respect to its servicing obligations under the Sale
and Servicing Agreement and identify results of such procedures and including
any exceptions and notes.
(o) All documents required to be delivered under Article IV
must have been delivered.
7.2 Conditions to Obligations of Seller. The obligations of Seller to
consummate the Closing are subject to the satisfaction, or waiver by Seller, of
each of the following conditions:
(a) Purchasers must have performed and complied in all
material respects with all of the terms of this Agreement to be performed and
complied with by Purchasers prior to or at Closing.
(b) The representations and warranties of Purchasers contained
in this Agreement must be true and correct in all material respects as of the
Closing Date.
(c) No temporary restraining order, preliminary or permanent
injunction, stay, cease and desist order or other order issued by any court of
competent jurisdiction or any competent Governmental Authority prohibiting the
consummation of the Closing shall be in effect.
(d) The NBA shall have released AEG from any guaranty of
Nuggets LP's obligations under the Agreement and Undertaking, dated as of June
27, 1997, between the NBA, Seller and Nuggets LP and shall have released any
Person other than a Purchased Entity from any guaranty under any Agreement and
Undertaking entered into in connection with the acquisition of control of Seller
by Liberty Media Corporation.
(e) The NHL shall have released AEG from any guaranty of
Avalanche LLC's obligations under the Consent Agreements, dated as of July 1,
1995 and June 27, 1997, between the NHL, Seller, and Avalanche LLC and shall
have released any Person other than a Purchased Entity from any guaranty under
any Consent Agreement entered into in connection with the acquisition of control
of Seller by Liberty Media Corporation.
(f) AEG shall have been released from its guaranty to the City
of performance by Ascent Arena Company, Nuggets LP and Avalanche LLC pursuant to
the Arena Agreement.
(g) AEG shall have been released from its guarantees (i) under
that certain Guaranty, dated November 14, 1997, of Ascent Arena Company's
obligations under the ERA (as the same may from time to time be modified,
extended and otherwise amended), and (ii) under that certain Guaranty Agreement,
dated as of November 1, 1997, of Ascent Arena Company's obligations under the
Redevelopment Agreement (as the same may from time to time be modified, extended
or
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otherwise amended); provided, however, that if either of such releases has not
been obtained and all other conditions to Closing have been satisfied or waived,
Seller will proceed with the Closing, in which event Kroenke and Ascent Arena
Company will (A) use their best efforts to obtain such releases as soon as
practically possible after the Closing, and (B) indemnify and hold harmless AEG
from any liability (including any costs and expenses) that may be incurred by
AEG after the Closing pursuant to such guarantees.
(h) Purchasers shall have acknowledged in writing that all
Liabilities of Seller to any Purchased Entity (or of any Purchased Entity to any
other Purchased Entity) shall have been forgiven and discharged, excluding only
the Liabilities created by this Agreement.
(i) All material Sports Entities' Required Governmental
Approvals shall have been obtained as required under Section 7.1(e).
(j) All material Sports Entities' Required Contractual
Consents shall have been obtained as required under Section 7.1(f).
(k) The written consent of the NBA and the NHL to the transfer
of membership and partnership interests contemplated by this Agreement shall
have been obtained as required under Section 7.1(g).
(l) The City Consent shall have been obtained as required
under Section 7.1(h).
(m) If the filing of a Notification Form under the HSR Act is
required, the waiting period applicable to the consummation of the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
terminated.
(n) Any Interim Period Intercompany Loans shall have been
repaid in accordance with Section 3.2(f).
(o) The deliveries required to be made by Purchasers under
Section 4.4 shall have been made.
ARTICLE VIII.
TERMINATION
8.1 Mutual Agreement. This Agreement may be terminated at any time
prior to the Closing by the mutual written agreement of Seller and Purchasers.
8.2 Default by Seller. This Agreement may be terminated by Purchasers
prior to the Closing at any time following the expiration of 30 days from the
date that Purchasers have given written notice to Seller that any representation
or warranty of Seller in this Agreement is not true and correct in all material
respects or that there shall have been a breach by Seller with respect to any
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material obligation of Seller in this Agreement, in either case which breach
would entitle Purchasers not to consummate the transactions contemplated by this
Agreement in accordance with Section 7.1, and such breach cannot be cured by
June 30, 2000 (the "Drop Dead Date").
8.3 Default by Purchasers. This Agreement may be terminated by Seller
prior to the Closing at any time following the expiration of 30 days from the
date that Seller has given written notice to Purchasers that any representation
or warranty of Purchasers in this Agreement is not true and correct in all
material respects or that there shall have been a breach by Purchasers with
respect to any material obligation of Purchasers in this Agreement, in either
case which breach would entitle Seller not to consummate the transactions
contemplated by this Agreement in accordance with Section 7.2, and such breach
cannot be cured by the Drop Dead Date.
8.4 Failure to Close. This Agreement may be terminated by Purchasers or
Seller if the Closing shall not have been consummated by the Drop Dead Date;
provided, however, that neither Seller nor Purchasers may terminate this
Agreement pursuant to this Section 8.4 (i) if the Closing shall not have been
consummated within such time period by reason of the failure of such party or
any of its Affiliates to perform in all material respects any of its or their
respective covenants or agreements contained in this Agreement, or (ii) prior to
August 31, 2000, if the Closing shall not have been consummated prior to such
date solely because any one or more of the conditions set forth in Sections
7.1(e), (f), (g), or (h) has not been satisfied if the applicable party has and
continues to reasonably pursue obtaining the consents required to be obtained in
order for such conditions to be satisfied in accordance with the provisions of
this Agreement.
8.5 Effect of Termination. In the event of termination of this
Agreement pursuant to this Article VIII, this Agreement forthwith shall become
void and of no further force or effect, and no party hereto shall have any
liability or obligation hereunder, except that any such termination shall not
affect (i) the provisions of Sections 9.7 (Publicity) and 9.8 (Costs and
Expenses), and the terms of any Confidentiality Agreement entered into between
any of the parties to this Agreement, all of which shall survive any such
termination, and (ii) the rights and remedies available to a party as a result
of any willful breach of any provisions of this Agreement.
ARTICLE IX.
OTHER AGREEMENTS
9.1 Further Assurances. Subject to the terms and conditions of this
Agreement (including Section 9.13), Seller and Purchasers will use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under Applicable Law to
consummate the transactions contemplated by this Agreement. Seller and
Purchasers agree, subject to the satisfaction of the conditions contained in
this Agreement, to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be
reasonably necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.
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9.2 Certain Filings. The parties hereto shall cooperate with one
another in determining whether any action by or in respect of, or filing with,
any Governmental Authority is required or reasonably appropriate, or any action,
consent, approval or waiver from any party to any Sports Entities' Contract,
Arena Contract or other Contract binding upon any Purchased Entity is required
or reasonably appropriate, in connection with the consummation of the
transactions contemplated by this Agreement. Subject to the terms and conditions
of this Agreement (including Section 9.13), in taking such actions or making any
such filings, the parties hereto shall furnish information required in
connection therewith and seek timely to obtain any such actions, consents,
approvals or waivers. Without limiting the foregoing, the parties hereto shall
each promptly complete and file all reports and forms, and respond to all
requests or further requests for additional information, as may be required or
authorized under the HSR Act.
9.3 Administration of Accounts. All payments and reimbursements made by
any third party to Seller in the name of or to any of the Purchased Entities,
the Pepsi Center, the Arena Land, the Development Property, the Nuggets or the
Avalanche after the Closing Date shall be held by Seller in trust for the
benefit of Purchasers and, immediately upon receipt by Seller of any such
payment or reimbursement, Seller shall pay, or cause to be paid, over to
Purchasers the amount of such payment or reimbursement without right of set off.
9.4 Guarantee of Performance. The obligations of Purchasers pursuant to
this Agreement and to consummate the transactions contemplated by the
Transaction Documents will be personally guaranteed by Kroenke.
9.5 Taxes.
(a) Pre-Closing Matters.
(i) Seller shall cause any tax-sharing agreements,
tax indemnity agreements, tax allocation agreements,
or similar agreements with respect to any P&P Entity,
and any power of attorney with respect to Tax matters
of any P&P Entity, to be terminated on or prior to
the Closing Date so that from and after the Closing
Date the P&P Entities shall not be bound thereby nor
have any liability thereunder.
(ii) No material new elections with respect to Taxes
nor any material changes in current elections with
respect to Taxes affecting any P&P Entity shall be
made after the Effective Date without the prior
written consent of Purchasers.
(iii) Prior to Closing, Seller shall provide
Purchasers with a clearance certificate or similar
document that may be required by any state taxing
authority in order to relieve Purchasers of (A) any
obligation to withhold any portion of the Purchase
Price with respect to any of the P&P Entities and (B)
any potential bulk sales tax liability.
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(iv) Seller shall deliver to Purchasers at Closing a
"Certificate of Nonforeign Status" under section 1445
of the Code in a form reasonably satisfactory to
Purchasers.
(v) Each Partnership Entity has or will have an
election under section 754 of the Code in effect for
the tax year that includes the Closing Date. The tax
matters partner for each Partnership Entity shall
resign effective on or before the Closing Date.
(vi) Seller shall reasonably cooperate with
Purchasers with respect to structure matters relating
to Tax efficiencies prior to Closing.
(vii) Prior to the Closing, Seller shall pay all
Non-Income Taxes of each P&P Entity no later than the
last date on which such Non-Income Taxes are due and
payable.
(viii) Seller shall not be obligated to make any
indemnification payments to Purchasers under Section
9.5(d) unless and until the amount of unpaid Taxes
not accrued as of the Closing Date on a consolidated
balance sheet for the Purchased Entities prepared in
a manner consistent with the balance sheets for the
Purchased Entities as at the Balance Sheet Date that
are included in the Financial Statements equals
$400,000 in the aggregate, in which event Purchasers
shall be entitled to indemnification for 50% of all
unpaid Taxes in excess of such amount.
(b) Allocation of Income Taxes for Pre-Closing and
Post-Closing Periods.
(i) Seller shall pay all Income Taxes of each P&P
Entity allocable to any Pre-Closing Period whether
such Taxes are due before or after Closing, including
(i) all Income Taxes specifically attributable to a
Predecessor Entity ceasing to be a member of Seller's
consolidated group (which shall include any income
from an intercompany transaction described in
Treasury Regulation Section 1.1502-13 or with respect
to any excess loss account described in Treasury
Regulation Section 1.1502-19 or pursuant to any
comparable provisions of state, local or foreign tax
law), (ii) all Income Taxes with respect to income,
gain or loss from the sale of the interests in the
Purchased Entities, and (iii) any Taxes related to
the mergers of the Predecessor Entities with or into
the Purchased Entities prior to the Effective Date.
Subject to the provisions below, the Income Taxes
allocable to a Pre-Closing Period shall be determined
on the accrual accounting method and on the basis of
a closing of the books of each Purchased Entity as of
the end of the Closing Date. The Income Taxes
attributable to a Purchased Entity's direct and
indirect interest in any Tax Partnerships shall be
determined by a closing of the books of each Tax
Partnership as of the end of the Closing Date, and
all Income Taxes
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attributable to the operations and activities of a
Tax Partnership through the end of the Closing Date
using the accrual accounting method shall be
considered Income Taxes of the Purchased Entity
allocable to a Pre-Closing Period.
(ii) For federal income tax purposes, Seller shall
include all income of each Corporate Entity for all
Pre-Closing Periods beginning on or after July 1,
1997 in the consolidated federal income tax Returns
of Seller's consolidated group and shall pay any
Income Taxes attributable to such income. Any
position on such Returns that relates to a Corporate
Entity shall comply with the Return Preparation
Standard. Purchasers shall prepare and deliver to
Seller, within 45 days after Closing, books and
working papers (prepared on a GAAP basis) that
demonstrate the operations, activities and income of
each Purchased Entity for the period ending on the
Closing Date. Seller shall prepare and deliver to
Purchasers within 30 days after the receipt of the
books and working papers described in the preceding
sentence, a statement prepared on a tax basis
reflecting the operations, activities and income of
each Purchased Entity for the period ending on the
Closing Date.
(c) Transfer Taxes. Purchasers shall pay 100% of any sales,
use, transfer, stamp, documentary or other similar Taxes and any recording and
filing fees (collectively "Transfer Taxes"), with respect to the transactions
contemplated by the Transaction Documents, and Purchasers shall prepare and
timely file all Returns with respect to such Transfer Taxes.
(d) Indemnification.
(i) Subject to Section 9.5(a)(viii), Seller shall
indemnify and hold harmless Purchasers, each
Purchased Entity and their Affiliates from and
against (without duplication) any loss incurred by
Purchasers, any Purchased Entity, or any of their
Affiliates:
(A) With respect to any Income Taxes of a
Purchased Entity or Corporate Entity attributable to
a Pre-Closing Period taking into account the
provisions of Section 9.5(b)(i) but excluding any
Taxes described in Section 9.5(d)(ii)(B) or
(d)(ii)(C);
(B) With respect to any Income Taxes
specifically attributable to a Corporate Entity
leaving Seller's consolidated group (which shall
include any deferred intercompany gain under Treasury
Regulation Section 1.1502-13 and income with respect
to an excess loss account under Treasury Regulation
Section 1.1502-19, or pursuant to any comparable
provision of state, local or foreign tax law);
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(C) With respect to any liability of a
Purchased Entity or Corporate Entity for any
Pre-Closing Period for the Income Taxes of any other
Person (other than another Purchased Entity or
Corporate Entity) as a transferee, a successor, by
contract, pursuant to Treasury Regulation ss.
1.1502-6, or otherwise; and
(D) With respect to any loss resulting from
the breach of any of the representations or
warranties of Seller set forth in Section 5.11 or any
of the covenants or agreements of Seller set forth in
this Section 9.5.
(ii) Purchasers shall indemnify and hold harmless
Seller and its respective Affiliates from and against
(without duplication) any loss incurred by Seller or
its Affiliates:
(A) With respect to any Taxes of a Purchased
Entity attributable to a Post-Closing Period;
(B) With respect to any Taxes resulting from
transactions or actions taken by a Purchased Entity
that occur on the Closing Date but after the Closing
and that are not in the ordinary course of business;
(C) With respect to any Taxes resulting from
an actual or deemed election by Purchasers under
section 338 of the Code (or any similar provisions of
state law or the law of any other taxing
jurisdiction) with respect to any of the Purchased
Entities in connection with any of the transactions
contemplated by this Agreement;
(D) With respect to any Transfer Taxes that
are the obligation of Purchasers under Section
9.5(c); and
(E) With respect to any loss resulting from
the breach of any of the covenants or agreements of
Purchasers set forth in this Section 9.5.
(iii) Any indemnity payments made between the parties
shall be treated as an adjustment to the Adjusted
Purchase Price.
(e) Preparation of Returns.
(i) All Returns for a P&P Entity (other than Mountain
Mobile) with respect to any Pre-Closing Period that
are to be filed after the Effective Date and before
the Closing Date shall be prepared and filed by
Seller and Seller shall pay all Taxes due on those
Returns. Any federal consolidated income tax return
and any state consolidated, unitary or combined
income tax return that includes a P&P Entity with
respect to any Pre-Closing Period and any
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Return for a P&P Entity for which Seller is liable
for Income Taxes allocable to any Pre-Closing Period
under Section 9.5(b)(i) and that is to be filed after
the Closing Date shall be prepared and filed by
Seller. Seller shall pay all Taxes shown as due on
those Returns; provided that if any amount shown as
due on those Returns is the obligation of Purchasers
under Section 9.5(d)(ii), Purchasers shall pay such
amount to Seller at least five Business Days prior to
the filing of such Returns. The Returns described
above shall be prepared in accordance with the Return
Preparation Standard insofar as such Returns relate
to a P&P Entity (other than Mountain Mobile). Seller
shall provide Purchasers with a copy of each such
Return (and supporting schedules) in the form
proposed to be filed by Seller (a "Proposed Return")
at least 30 days in advance of the due date
(including any extensions) for such Return.
Purchasers and their authorized representatives shall
have the right to review and comment on the Proposed
Return, and Seller shall make any changes reasonably
requested by Purchasers in order to cause the
Proposed Return to comply with the Return Preparation
Standard. Neither Seller nor any Affiliate shall file
any amended Return or claim for Tax refund with
respect to any P&P Entity with respect to any
Pre-Closing Period, without the consent of
Purchasers, if the requested adjustment would
increase the Tax liability of Purchasers for any
period unless Seller or the Affiliate, as the case
may be, agrees to indemnify Purchasers for the full
cost of such increased Tax liability of Purchasers.
(ii) Except for state and federal income Tax Returns
described in paragraph (i) above, all Returns with
respect to a P&P Entity that are to be filed after
the Closing Date shall be prepared and filed by
Purchasers, and Purchasers shall pay any amount shown
as due on such Returns.
(iii) Seller and Purchasers agree to furnish or cause
to be furnished to each other, upon request, as
promptly as practicable, such information and
assistance (including access to books, records and
accounting work papers) relating to a P&P Entity as
is reasonably necessary for the preparation of any
Return, claim for refund or audit, and the
prosecution or defense of any claim, suit or
proceeding relating to any proposed adjustment.
(f) Notification of Proceedings. In the event that Purchasers
receive written notice of any Tax matter with respect to a P&P Entity that could
affect Seller, or Seller receives written notice of any Tax matter with respect
to a P&P Entity that could affect Purchasers, the party receiving such written
notice shall notify in writing the potentially affected party within five
Business Days after receipt of such notice. The failure of any party to give the
notice required by this Section 9.5(f) shall not impair that party's rights
under this Agreement except to the extent that the other party demonstrates that
it has been damaged or prejudiced thereby.
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(g) Cooperation.
(i) After the Closing, Seller and Purchasers shall,
each at its own expense, cooperate with each other
and with each other's agents, including accounting
firms and legal counsel, in connection with the
preparation or audit of any Return, refund claim or
Tax controversy matter with respect to any P&P Entity
or its activities. Such cooperation shall include
making available any information, records and
documents in their possession or under their control
related to any P&P Entity that is relevant to the
preparation or audit of any Return, refund claim or
Tax controversy matter with respect to any P&P Entity
or its activities. Any information provided or
obtained under this paragraph shall be kept
confidential, except as may otherwise be necessary in
connection with the filing of a Return, refund
claims, tax audits, tax claims or tax litigation or
as required by law.
(ii) Seller shall have the right to control, at its
expense, any Tax Proceeding (as defined below) to the
extent such proceeding relates to any Tax issue that
could give rise to a liability of Seller to
Purchasers under Section 9.5(d)(i) (a "Liability
Issue"). Seller shall furnish to Purchasers copies of
any inquiries or requests for information from any
taxing authority concerning any Liability Issue, and
Seller shall furnish to Purchasers advance written
notification of the position(s) that Seller intends
or expects to take in such Tax Proceedings.
Purchasers shall have the right to consult with
Seller regarding any response to such requests.
Seller shall provide to Purchasers copies of all
written communications and documents submitted to any
taxing authority with respect to a Liability Issue.
Seller and Purchasers shall each furnish to the
other, promptly after receipt, a copy of all
information document requests, notices of proposed
adjustment, revenue agent's reports or similar
reports or notices of deficiency together with all
relevant documents and memos related to the foregoing
documents, notices or reports, relating to any
Liability Issue. Notwithstanding the foregoing,
Seller shall not take or propose to take any
unreasonable position in any Tax Proceeding involving
or with respect to any of the P&P Entities. Every
position that Seller proposes to take in such Tax
Proceedings shall be deemed to be reasonable unless
Purchasers provide to Seller a written opinion of
nationally recognized tax counsel that concludes that
the position taken by Seller is unreasonable. In that
event, Seller shall cease to maintain such position
unless and until Seller is able to provide to
Purchasers a written opinion of nationally recognized
tax counsel that the position that Seller is taking
is reasonable.
(iii) Subject to the provisions of subparagraph (ii)
above, Purchasers shall have complete control over
the handling, disposition and settlement of any Tax
controversy with respect to a Purchased Entity,
including any
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administrative, judicial or other proceeding in
connection with any Tax controversy (a "Tax
Proceeding").
(h) Record Retention. Seller and Purchasers shall retain and
provide to each other upon reasonable request any records or other information
(including accounting work papers) that is in their possession or readily
obtainable and may be relevant to any Return, audit or examination, proceeding,
or determination that affects any amount required to be shown on any Return of a
P&P Entity for any period. Without limiting the generality of the foregoing,
Seller and Purchasers shall retain, until the applicable statutes of limitations
(including any extensions) have expired, copies of all Returns, supporting work
papers, and other records or information that may be relevant to such Returns of
a P&P Entity and shall not destroy or otherwise dispose of any such records
without first providing the other party with a reasonable opportunity to review
and copy the same.
(i) Treatment of Purchase. For federal income tax purposes,
Seller and Purchasers shall treat the purchase of 100% of the membership
interests in LLC-I and LLC-II as the purchase of the assets of LLC-I and LLC-II
pursuant to Revenue Ruling 99-5.
(j) Allocation of Purchase Price. Within 75 days after the
Closing Date, Purchasers will deliver to Seller proposed Schedule 9.5(j) (the
"Allocation Schedule"), which shall set forth an allocation of the total amount
of the consideration paid by Purchasers to Seller in connection with the
consummation of the transactions contemplated by this Agreement to the Assets
acquired by Purchasers from Seller hereunder. The allocation shall take into
account an appraisal prepared by PricewaterhouseCoopers, or another nationally
recognized appraiser reasonably acceptable to Purchasers and Seller, who shall
be retained by Purchasers at Purchasers' expense. Seller shall reasonably
cooperate in providing information and assistance to any such appraiser. Within
ten Business Days after delivery of the Allocation Schedule by Purchasers to
Seller, Seller will notify Purchasers in writing whether Seller approves or
disapproves the Allocation Schedule; provided, however, that Seller will not
disapprove the Allocation Schedule unless Seller determines in its reasonable
judgment that (i) either the appraisal is not reasonably supportable or the
allocation proposed by Purchasers on the Allocation Schedule is not reasonably
consistent with the appraisal, and (ii) that the allocation proposed by
Purchasers on the Allocation Schedule will result in Seller being required to
recognize both ordinary income and capital loss in an amount that is more than
de minimus. Unless Seller disapproves the Allocation Schedule pursuant to the
immediately preceding sentence, the Allocation Schedule will be attached to and
incorporated as part of this Agreement within 90 days after the Closing Date,
and all parties to this Agreement shall prepare and file all applicable Returns
in a manner consistent with the allocation set forth on the Allocation Schedule.
9.6 Employee Benefit Plans.
(a) This Section 9.6 contains the covenants and agreements of
the parties with respect to the employee benefits and employee benefit plans
provided or covering the employees of the Purchased Entities. Nothing herein
expressed or implied confers upon any such employee any rights or remedies of
any nature or kind whatsoever under or by reason of this Section 9.6.
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(b) Purchasers agree to cause the Purchased Entities' Employee
Plans to be maintained substantially in accordance with their current terms and
conditions, except to the extent any change may be required by Applicable Law,
through the first anniversary of the Closing Date.
(c) Purchasers agree to cause to be made available on and
after the Closing Date to employees of the Purchased Entities on the Closing
Date who participate in Seller's 401(k) Plan ("Seller's 401(k) Plan") a 401(k)
plan sponsored by LLC-I (the "Ascent Sports 401(k) Plan"). The Ascent Sports
401(k) Plan shall, through the first anniversary of the Closing Date, provide
benefits, and contain terms and provisions, substantially the same as provided
under Seller's 401(k) Plan. The Ascent Sports 401(k) Plan shall accept direct
and indirect rollovers of such employees' account balances in Seller's 401(k)
Plan, including direct rollovers of any outstanding employee loans under
Seller's 401(k) Plan in kind. To the extent that distributions from Seller's
401(k) Plan to the employees of the Purchased Entities are prohibited by law, as
determined by Seller, Seller and Purchasers agree to use their reasonable best
efforts to effect a transfer of the account balances (including participant
loans, if any, and any portion of such accounts attributable to qualifying
employer securities, as defined in ERISA section 407) of the employees of the
Purchased Entities held in Seller's 401(k) Plan to the Ascent Sports 401(k) Plan
within a reasonable period of time after the Closing Date.
(d) Each welfare plan (within the meaning of section 3(1) of
ERISA) or policy maintained or sponsored by the Purchased Entities or by
Purchaser in which any employees of the Purchased Entities who currently
participate in welfare plans maintained by Seller will be eligible to
participate shall (i) permit such employees to enroll in such plans effective
upon the Closing Date, subject to satisfaction of any eligibility requirements
but without regard to any waiting periods, (ii) waive any pre-existing condition
limitation or exclusion and (iii) credit all payments made for health care
expenses during the current plan year of Seller's plans for purposes of
satisfying deductible, co- insurance and maximum out-of-pocket provisions for
the balance of the current plan year of the Purchased Entities' or Purchasers'
plans.
(e) Purchasers shall (i) cause the Purchased Entities to
continue, for the balance of the current plan year, any Code section 125
cafeteria plans based on the current elections of the participants who are
employed by the Purchased Entities on the Closing Date; or (ii) establish a
similar Code section 125 cafeteria plan that will accept transfers of account
balances from any Code section 125 cafeteria plans in which employees of the
Purchased Entities participate.
9.7 Publicity. The parties hereto understand and acknowledge that
Seller will be obligated to disclose promptly after signing all of the material
terms and conditions of this Agreement, and shall thereafter be required to file
this Agreement with the Securities and Exchange Commission. Subject to the
foregoing, the parties agree that no press release will be made by Seller or
Purchasers or any of their respective agents concerning the transactions
contemplated under this Agreement until such release has been reviewed by and
coordinated with the other parties.
9.8 Costs and Expenses. Seller and Purchasers shall each be responsible
for and bear their own costs and expenses incurred in connection with the
transactions contemplated under this
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Agreement; provided, however, that Seller and Purchasers shall each pay one-half
of any HSR Act filing fees required to be paid in connection with the
transactions contemplated under this Agreement.
9.9 Conditions to Closing. Subject to the terms and conditions of this
Agreement (including Sections 9.10, 9.11, 9.12 and 9.13), Seller and Purchasers
shall use all reasonable efforts to satisfy the applicable conditions to the
Closing set forth in Article VII.
9.10 City Consent. Purchasers and Kroenke shall use their reasonable
efforts to obtain the City Consent, including, if requested by the City, (a)
Kroenke will execute a guarantee of the obligations under the Arena Agreement
and the Ground Lease with the City to be entered into upon the City Transfer, in
form and substance reasonably satisfactory to Kroenke and the City; provided,
however, that a guarantee substantially similar to the guarantee in favor of the
City provided by AEG, the form of which is attached as an exhibit to the Arena
Agreement, will be deemed to be reasonably acceptable to Kroenke, and (b)
Purchasers and Kroenke will grant or cause to be granted for the benefit of the
City security interests in one or more Persons holding, directly or indirectly,
all of the interests in the Purchased Entities or any successor entities that
hold all of the interests in the Nuggets, Avalanche and Pepsi Center, in form
and substance reasonably satisfactory to Purchasers, Kroenke and the City,
subject to an inter-creditor agreement pursuant to which any lender to
Purchasers would agree to subordinate to any such security interests granted for
the benefit of the City.
9.11 NBA and NHL Consents. Subject to the last sentence of this Section
9.11, any other provision of this Agreement to the contrary notwithstanding
(including any covenants of Seller in Article III), nothing in this Agreement
will be deemed to restrict the ability of Seller or any Affiliate of Seller to
take (or agree to take) or refrain from taking (or agree to refrain from taking)
any action required by the NBA or NHL in order to obtain any consents required
with respect to the transactions contemplated by this Agreement, subject to
Purchaser's consent, which will not be unreasonably withheld or delayed, except
that Purchasers' consent will not be required in connection with (i) any
resolution of the pending dispute between the Avalanche and the NHL concerning
certain television rights in favor of the NHL, (ii) execution by Seller or any
Purchased Entity of any Consent Agreement of the Avalanche and any Agreement and
Undertaking of the Nuggets in connection with obtaining approval of the NHL and
the NBA with respect to the acquisition of control of Seller and the Purchased
Entities by Liberty Media Corporation, or (iii) any action taken by Seller or
any Affiliate of Seller if such action will not be binding on any Purchased
Entity immediately after the Closing. Nothing contained in this Section 9.11
will be deemed (a) to require Seller or any Affiliate of Seller to take or agree
to take any action, including any action that Seller or any Affiliate of Seller
specifically is not required to take pursuant to Section 9.13 or (b) to conflict
with or be inconsistent with the provisions of Section 7.1(g).
9.12 Purchase and Sale of LDA Ascent Arena Membership Interest. If
required by the NBA or NHL to obtain consents to the transactions contemplated
by this Agreement, LDA will sell to Purchasers, and Purchasers will acquire from
LDA, the LDA Ascent Arena Membership Interest for a purchase price equal to the
LDA Ascent Arena Membership Interest Value.
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9.13 Limitations on Required Actions. Any other provision of this
Agreement to the contrary notwithstanding except Section 9.12, in no event shall
Purchasers or any Affiliate of Purchasers or Seller or any Affiliate of Seller
(specifically including Liberty Media Corporation and AT&T Corp.) be required to
take, or agree to take, any extraordinary actions, including any of the
following actions, in order to satisfy any applicable conditions to the Closing,
including to obtain any required approval of the NBA or NHL or the City Consent:
(a) payment of any consideration other than customary fees required to be paid
to the NBA and NHL consistent with past transactions and any reasonable and
customary filing or application fees, (b) acceptance of any requirement to
divest, hold separate, or otherwise rearrange the composition of, any portion of
its assets or business, (c) acceptance of the imposition of any material
limitations on its ability effectively to exercise full rights of ownership of
any assets (including the right to vote any shares of stock in any Person or
voting rights with respect to any other equity interests in any Person), (d)
acceptance of any condition that would make the holding of any assets (including
shares of stock or other equity interests in any Person) illegal or subject to
any materially burdensome requirement or condition, or (e) acceptance of any
requirement to cease or refrain from engaging in any business; provided,
however, that with respect to Purchasers or any Affiliate of Purchasers, in no
event will the provisions of paragraphs (b), (c), (d) or (e) be deemed to apply
to any direct or indirect interest in any sports team, including the St. Louis
Rams, owned by Kroenke, Purchasers or any Affiliate of Purchasers.
9.14 Amendment of Ascent Operating Agreement. Promptly after the
Effective Date, KMS Sports and LDA will negotiate in good faith to reach
agreement on a form of Amended and Restated Operating Agreement for Ascent Arena
Company to be entered into on the Closing Date, which will be based on the
Ascent Operating Agreement with the modifications set forth on Schedule 9.14.
ARTICLE X.
MISCELLANEOUS
10.1 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (a) if
personally delivered, when so delivered, (b) if mailed, two Business Days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid and addressed to the intended recipient as set forth below, (c)
if given by telex or telecopier, once such notice or other communication is
transmitted to the telex or telecopier number specified below and the
appropriate answer back or telephonic confirmation is received, provided that
such notice or other communication is promptly thereafter mailed in accordance
with the provisions of clause (b) above, or (d) if sent through an overnight
delivery service in circumstances to which such service guarantees next day
delivery, the day following being so sent:
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If to Seller:
Ascent Entertainment Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Liberty Media Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy similarly addressed to:
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchasers:
KMS Sports, LLC
KMA Stick, LLC
KMN Ball, LLC
KMC Center, LLC
c/o The Kroenke Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
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If to Designated Representative:
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o The Kroenke Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
10.2 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by all parties hereto, or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No waiver by a party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent occurrence. No failure or delay by a party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
10.3 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. No party hereto may assign either this Agreement or any of
its rights, interests or obligations hereunder without the prior written
approval of each other party.
10.4 Governing Law. This Agreement shall be construed in accordance
with and governed by the internal laws (without reference to choice or conflict
of laws) of the State of Colorado.
10.5 Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other parties hereto.
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10.6 Entire Agreement. Except as otherwise provided herein, this
Agreement (including the Schedules and Exhibits referred to herein, which are
hereby incorporated by reference) constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, understandings and negotiations, both written and oral, between the
parties with respect to the subject matter of this Agreement. Neither this
Agreement nor any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
10.7 Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. All references to an Article or Section include all subparts thereof.
10.8 Severability. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
10.9 Construction.
(a) The language used in this Agreement will be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against either party. Any reference
to any Applicable Law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. Whenever required
by the context, any gender shall include any other gender, the singular shall
include the plural and the plural shall include the singular. The words
"herein," "hereof," "hereunder," and words of similar import refer to the
Agreement as a whole and not to a particular section. The words "include,"
"includes" and "including" shall be deemed followed by the phrase "without
limitation."
(b) In the event of a conflict or inconsistency between any
provision contained in this Agreement and any provision contained in any of the
Schedules or Exhibits to this Agreement, the provision in the Agreement shall be
controlling.
10.10 Cumulative Remedies. Except as provided in Section 9.5, the
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law. Each
of Seller and Purchasers acknowledges that a party and its Affiliates will
suffer irreparable damage if the other party does not perform its obligations
under this Agreement, and without limiting other rights or remedies to which a
party may be entitled, agrees that with respect to such obligations, an
injunction may be issued without the requirement of any bond or other security
and enforcement may be obtained by a decree of specific performance.
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10.11 Survival of Representations and Covenants. Except for the
representations and warranties in Sections 5.1, 5.2 and 5.17 which shall survive
for the applicable statute of limitations period, the representations and
warranties and covenants and agreements to be performed by their terms prior to
the Closing contained in this Agreement or in any other document delivered
pursuant to this Agreement shall not survive the consummation of the
transactions contemplated by this Agreement or the termination of this Agreement
in accordance with its terms. Covenants and agreements to be performed by their
terms in whole or in part after the Closing (including covenants and agreements
in Section 9.5(d)) will survive the consummation of the transactions
contemplated by this Agreement in accordance with their terms.
10.12 No Third Party Beneficiaries. Except as expressly provided in
this Agreement, including the guarantee contemplated by Section 9.4, no Person
other than Purchasers and Seller shall have any right, benefit or obligation
under this Agreement as a third party beneficiary or otherwise.
[Remainder of page intentionally left blank]
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COUNTERPART SIGNATURE PAGE TO
PURCHASE AND SALE AGREEMENT AMONG ASCENT
ENTERTAINMENT GROUP, INC., ASCENT SPORTS
HOLDINGS, INC., AND KMS SPORTS, LLC, KMA STICK, LLC,
KMN BALL, LLC AND KMC CENTER, LLC
DATED AS OF APRIL 24, 2000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers or managers as of the day
and year first above written.
AEG
ASCENT ENTERTAINMENT GROUP, INC., a
Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
HC
ASCENT SPORTS HOLDINGS, INC., a Delaware
corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
82
COUNTERPART SIGNATURE PAGE TO
PURCHASE AND SALE AGREEMENT AMONG ASCENT
ENTERTAINMENT GROUP, INC., ASCENT SPORTS
HOLDINGS, INC., AND KMS SPORTS, LLC, KMA STICK, LLC,
KMN BALL, LLC AND KMC CENTER, LLC
DATED AS OF APRIL 24, 2000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers or managers as of the day
and year first above written.
KMS SPORTS, LLC
By:
-------------------------------------
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
KMA STICK, LLC
By:
-------------------------------------
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
KMN BALL, LLC
By:
-------------------------------------
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
KMC CENTER, LLC
By:
-------------------------------------
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
83
COUNTERPART SIGNATURE PAGE TO
PURCHASE AND SALE AGREEMENT AMONG ASCENT
ENTERTAINMENT GROUP, INC., ASCENT SPORTS
HOLDINGS, INC., AND KMS SPORTS, LLC, KMA STICK, LLC,
KMN BALL, LLC AND KMC CENTER, LLC
DATED AS OF APRIL 24, 2000
ACKNOWLEDGED AND AGREED WITH
RESPECT TO SECTIONS 3.6, 9.12 and 9.14:
LIBERTY DENVER ARENA LLC
By: LMC Denver Arena, Inc.,
its sole member
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
ACKNOWLEDGED AND AGREED WITH RESPECT
TO SECTIONS 7.2(g), 9.4 and 9.10:
----------------------------------------
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇