EQUITY PURCHASE AGREEMENT
by and among
VARI-LITE INTERNATIONAL, INC.,
SHOWCO, INC.,
CLAIR BROTHERS AUDIO ENTERPRISES, INC.
and
CLAIR ACQUISITION CORP.
TABLE OF CONTENTS
I. SALE AND PURCHASE OF INTEREST...................................................................2
1.1 SALE AND PURCHASE.............................................................2
1.2 GUARANTEE.....................................................................2
II. CONSIDERATION...................................................................................2
2.1 CLOSING.......................................................................2
2.2 PAYMENT OF PURCHASE PRICE.....................................................3
2.3 DELIVERIES BY SHOWCO AND VARI-LITE............................................3
2.4 DELIVERIES BY BUYER AND CLAIR BROTHERS........................................5
III. REPRESENTATIONS AND WARRANTIES OF SHOWCO AND VARI-LITE..........................................6
3.1 ORGANIZATION AND AUTHORITY OF SELLERS.........................................6
3.2 NO VIOLATION; CONSENTS AND APPROVALS..........................................7
3.3 LITIGATION....................................................................8
3.4 BROKERS.......................................................................9
3.5 STATUS OF CLEARSHO............................................................9
3.6 ASSET PURCHASE...............................................................10
IV. REPRESENTATIONS AND WARRANTIES OF BUYER AND CLAIR
BROTHERS.....................................................................................10
4.1 ORGANIZATION AND AUTHORITY...................................................10
4.2 NO VIOLATION; CONSENTS AND APPROVALS.........................................11
4.3 BROKERS......................................................................12
V. COVENANTS AND AGREEMENTS.......................................................................12
5.1 COVENANT NOT TO COMPETE......................................................12
5.2 USE OF NAMES.................................................................13
5.3 ACCESS TO INFORMATION........................................................14
5.4 FURTHER ASSURANCES...........................................................14
5.5 CERTAIN TAX MATTERS..........................................................15
5.6 EMPLOYEES AND EMPLOYEE BENEFITS..............................................16
5.7 TRANSITION RIGHTS............................................................19
VI. INDEMNIFICATION................................................................................20
6.1 SHOWCO AND VARI-LITE OBLIGATION TO INDEMNIFY.................................20
6.2 BUYER AND CLAIR BROTHERS OBLIGATION TO INDEMNIFY.............................20
6.3 LIMITATION ON OBLIGATION TO INDEMNITY........................................21
6.4 DEFENSE OF ACTIONS...........................................................22
6.5 NOTICES AND PAYMENTS.........................................................23
6.6 SOLE REMEDY..................................................................23
VII. MISCELLANEOUS..................................................................................23
7.1 PUBLICITY....................................................................23
7.2 EXPENSES.....................................................................24
7.3 NOTICES......................................................................24
7.4 SURVIVAL.....................................................................25
7.5 ENTIRE UNDERSTANDING; AMENDMENTS.............................................25
7.6 PARTIES IN INTEREST..........................................................26
7.7 ASSIGNMENT...................................................................26
7.8 NO WAIVERS...................................................................26
7.9 SEVERABILITY.................................................................27
7.10 COUNTERPARTS.................................................................27
7.11 INTERPRETATION...............................................................27
7.12 REFERENCES...................................................................27
7.13 GOVERNING LAW................................................................27
7.14 VENUE........................................................................28
EXHIBIT
A Definitions
SCHEDULE
3.2(a) Default
3.2(b) Showco Required Approvals
3.3(a) List of Claims, Actions, Suits, Proceedings, Investigations, and Pending Inquiries
5.6 Transferred Employees
EQUITY PURCHASE AGREEMENT
This Equity Purchase Agreement ("Agreement") is made and dated as of
this 17th day of November, 2000 by and among Vari-Lite International, Inc., a
Delaware corporation ("Vari-Lite"), Showco, Inc., a Delaware corporation and
wholly owned subsidiary of Vari-Lite ("Showco"), Clair Acquisition Corp., a
Pennsylvania corporation ("Buyer"), and Clair Brothers Audio Enterprises, Inc.,
a Pennsylvania corporation ("Clair Brothers"). From time to time in this
Agreement, Vari-Lite, Showco, Buyer and Clair Brothers are referred to,
individually, as a "Party" and, collectively, as the "Parties." Capitalized
terms used in this Agreement and not otherwise defined have the meanings set
forth in EXHIBIT A.
BACKGROUND
WHEREAS, Vari-Lite is the sole stockholder of Showco;
WHEREAS, Showco is the sole member of Clearsho, a Delaware limited
liability company ("Clearsho");
WHEREAS, Showco has been engaged in the business of providing and
servicing sound systems for large-scale events (the "Business");
WHEREAS, Showco desires to terminate its involvement in the Business;
WHEREAS, Showco is, on the date hereof, transferring, as a capital
contribution, substantially all of its assets to Clearsho, all in accordance
with the terms and conditions set forth in an Asset Transfer Agreement dated the
date hereof (the "Asset Transfer Agreement");
WHEREAS, Vari-Lite and Showco no longer want to be involved in the
Business indirectly through Clearsho;
WHEREAS, Showco desires to sell and Buyer desires to purchase all of
Showco's right, title and interest in and to its 100% membership interest in
Clearsho (the "Membership Interest"), all in accordance with the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, and of the
mutual covenants and agreements set forth in this Agreement, and intending to be
legally bound hereby, the Parties hereby agree as follows:
I. SALE AND PURCHASE OF INTEREST.
1.1 SALE AND PURCHASE. Subject to the terms and conditions of this
Agreement and for the consideration hereinafter specified, at the Closing,
Showco shall sell, convey, transfer, assign and deliver to Buyer, and Buyer
shall purchase from Showco, free and clear of all Liens, good, valid and
marketable title in and to the Membership Interest.
1.2 GUARANTEE. From and after the Closing, Clair Brothers shall
guarantee the payment, performance and discharge of the Assumed Liabilities, as
defined in and pursuant to and in accordance with the Asset Transfer Agreement.
II. CONSIDERATION.
2.1 CLOSING. The sale, assignment, conveyance, transfer and
delivery of the Membership Interest by Showco to Buyer, and the purchase,
assumption and acquisition by Buyer of the Membership Interest and the
consummation of the other transactions contemplated hereby, shall take place at
a closing (the "Closing") to be held at the offices of Blank Rome ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, One ▇▇▇▇▇ Square, Philadelphia, Pennsylvania, at 10:00 a.m. local
time, on the date of this Agreement, or at such other date, time and location as
may be agreed
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upon in writing among the Parties. The date on which the Closing actually
occurs is referred to herein as the "Closing Date."
2.2 PAYMENT OF PURCHASE PRICE.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, in consideration of the sale, assignment, conveyance,
transfer and delivery of the Membership Interest, Buyer shall, at the Closing,
in the manner contemplated by Section 2.4(a), pay to Showco cash in an aggregate
amount equal to $12,746,023 (the "Purchase Price").
(b) The Parties acknowledge that the acquisition of the
Membership Interest shall be treated by Clair Brothers and Buyer as an
acquisition of the Assets for state and federal income tax purposes. As such,
for the tax year in which the Closing occurs, Buyer shall file Internal Revenue
Service Form 8594 and all Tax Returns in accordance with the allocation among
the Assets of the sum of the Purchase Price and the Assumed Liabilities as set
forth in SCHEDULE 2.2(b) (the "Allocation"). None of Vari-Lite, Showco or Buyer
shall report the transactions contemplated by this Agreement in a manner
inconsistent with the Allocation. Vari-Lite, Showco and Buyer shall each
promptly provide each other Party with any information or other cooperation
required, as requested, to complete Form 8594, with reasonable assistance in the
event of an examination, audit or other proceeding regarding the Allocation.
2.3 DELIVERIES BY SHOWCO AND VARI-LITE. At the Closing, Showco
and Vari-Lite shall deliver, or cause to be delivered, the following to Buyer:
(a) The full right, title and interest in the Membership
Interest in Buyer;
(b) The Escrow Agreement, duly executed by Showco;
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(c) The Certificate of the Secretary of each of Showco
and Vari-Lite, dated the Closing Date, certifying: (i) that attached are true,
complete and correct copies of its certificate of incorporation, bylaws and any
amendments thereto, and the resolutions duly adopted by its board of directors
and, in the case of Showco, stockholders authorizing the execution, delivery and
performance of this Agreement by it; (ii) the names, titles and signatures of
its officers who sign documents on its behalf in connection with this Agreement,
certifying the authority of each such officer to do so; and (iii) that attached
is a true, complete and correct copy of the Certificate of Formation of
Clearsho.
(d) A good standing certificate for each of Showco and
Vari-Lite issued by the Secretary of State of the State of Delaware, dated
within ten days prior to the Closing Date;
(e) Opinions of counsel to Showco and Vari-Lite, in form
and substance reasonably satisfactory to counsel for Buyer and Clair Brothers;
(f) Evidence, in form and substance reasonably
satisfactory to Buyer, demonstrating that Showco has obtained all approvals
indicated in SCHEDULE 3.2(b) and Showco and Clearsho have completed all
transactions contemplated by the Asset Transfer Agreement in accordance with its
terms;
(g) Such copies as Buyer may request of the various
closing deliveries under the Asset Transfer Agreement; and
(h) All such other agreements, documents, instruments and
writings as shall, in the reasonable opinion of Buyer and its counsel, be
necessary to sell, assign, convey, transfer and deliver to Buyer the Membership
Interest, in accordance with this Agreement.
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2.4 DELIVERIES BY BUYER AND CLAIR BROTHERS. At the Closing, Buyer
and Clair Brothers shall deliver, or cause to be delivered, the following:
(a) Buyer shall deliver by wire transfer of immediately
available funds, (i) $800,000 to the Escrow Agent, pursuant to the terms and
conditions of the Escrow Agreement (the "Escrow Funds"), and (ii) $11,946,023 to
the account of Showco designated as follows:
SunTrust Bank
ABA No. ▇▇▇-▇▇▇-▇▇▇
Wire Clearing General
Account No. ▇▇▇-▇▇▇-▇▇▇▇
Ref: Vari-Lite International
Attn: Agency Services
(b) The Escrow Agreement, duly executed by Buyer and the
Escrow Agent;
(c) The Certificate of the Secretary of each of Buyer and
Clair Brothers, dated the Closing Date, certifying (i) that attached are true
and correct copies of its articles of incorporation, bylaws and any amendments
thereto, and the resolutions duly adopted by its board of directors authorizing
its execution, delivery and performance of this Agreement, and (ii) the names,
titles and signatures of its officers who sign documents on its behalf in
connection with this Agreement, certifying the authority of each such officer to
do so;
(d) A good standing certificate for each of Buyer and
Clair Brothers issued by the Secretary of State of the Commonwealth of
Pennsylvania, dated within ten days prior to the Closing Date;
(e) An opinion of counsel to Buyer and Clair Brothers, in
form and substance reasonably satisfactory to counsel for Showco and Vari-Lite;
and
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(f) All such other agreements, documents, instruments and
writings as shall, in the reasonable opinion of Showco and its counsel, be
necessary for Buyer to purchase and acquire the Membership Interest, in
accordance with this Agreement.
III. REPRESENTATIONS AND WARRANTIES OF SHOWCO AND VARI-LITE
Showco and Vari-Lite hereby, jointly and severally, represent and
warrant to Buyer as follows:
3.1 ORGANIZATION AND AUTHORITY OF SELLERS.
(a) Each of Showco and Vari-Lite is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Clearsho is a limited liability company organized, validly existing
and in good standing under the laws of the State of Delaware. Each of Showco and
Vari-Lite has delivered to Buyer a true, complete and correct copy of its
certificate of incorporation and bylaws as presently in effect and a true,
complete and correct copy of the certificate of formation of Clearsho. Clearsho
is not governed by any agreement, regulation or bylaw other than its
certification of formation and its operating agreement, dated November 16, 2000,
a true and complete copy of which has been delivered to Buyer (the "Operating
Agreement").
(b) Each of Showco and Vari-Lite has all requisite
corporate power and authority to enter into this Agreement, the Escrow Agreement
and any instrument and agreement contemplated herein required to be executed and
delivered by it pursuant to this Agreement (collectively, the "Showco Related
Instruments"), and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and the
Showco Related Instruments to which it is a party, and the consummation of the
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transactions contemplated hereby and thereby, have been duly authorized by all
necessary action on the part of Showco and Vari-Lite. This Agreement has been,
and each Showco Related Instrument to which it is a party when executed and
delivered will be, duly executed and delivered by each of Showco and Vari-Lite
and constitutes, or when executed and delivered will constitute, the valid and
binding obligation of each of Showco and Vari-Lite, enforceable against it in
accordance with its terms, except that (i) such enforcement may be subject to
any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws, now or hereafter in effect, relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Each of Showco and Vari-Lite has delivered to Buyer a true, complete and correct
copy of resolutions duly and validly adopted by its Board of Directors and, in
the case of Showco, by Vari-Lite as its sole stockholder, evidencing its
authorization of the execution and delivery of this Agreement and the Showco
Related Instruments to which it is a party, and the consummation of the
transactions contemplated hereby and thereby (which resolutions have not been
modified, revoked or rescinded in any respect).
3.2 NO VIOLATION; CONSENTS AND APPROVALS.
(a) The execution and delivery of this Agreement and the
Showco Related Instruments do not, and the consummation of the transactions
contemplated hereby or thereby and compliance with the terms hereof or thereof
will not, (i) conflict with, or result in any violation of or constitute a
default under, (A) any provision of the certificate of incorporation,
certificate of formation or bylaws, or similar organizational documents, of
Showco, Clearsho or
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Vari-Lite or (B) any judgment, order or decree, or statute, law, ordinance, rule
or regulation, applicable to Showco, Clearsho, Vari-Lite or the Business; or
(ii) except as set forth in SCHEDULE 3.2(a), conflict with or result in any
violation of or constitute a default (or an event or condition which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or cause the
acceleration of the maturity of any liability or obligation pursuant to, or
result in the creation or imposition of any Lien under, any Contract.
(b) Except as set forth in SCHEDULE 3.2(b), no consent,
approval, order or authorization of, notice to, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental entity, authority or instrumentality, whether domestic or foreign
("Governmental Entity"), or any other Person, is required to be obtained or made
in connection with the execution and delivery by Showco and Vari-Lite of this
Agreement or any Showco Related Instrument to which it is a party, or the
consummation by Showco and Vari-Lite of the transactions contemplated hereby or
thereby, or compliance by Showco and Vari-Lite with the terms hereof or thereof.
3.3 LITIGATION.
(a) SCHEDULE 3.3(a) sets forth a true, complete and
correct list of any and all claims, actions, suits, proceedings, investigations
and inquiries pending, asserted or, to the knowledge of Showco and Vari-Lite,
threatened by or before any Governmental Entity, or by or on behalf of any third
party, against Showco or Clearsho or which otherwise relates to the Membership
Interest.
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(b) There is no claim, action, suit, proceeding,
investigation or inquiry pending, asserted or, to the knowledge of Showco and
Vari-Lite, threatened by or before any Governmental Entity, or by or on behalf
of any third party, which challenges the validity of this Agreement or any
Showco Related Instrument or which, if adversely determined, would, individually
or in the aggregate, (i) affect the ability of Showco and Vari-Lite to
consummate the transactions contemplated by this Agreement and the Showco
Related Instruments to which it is a party, or to comply with the terms hereof
and thereof or (ii) have a Material Adverse Effect.
3.4 BROKERS. No broker, finder or financial advisor or other
Person is entitled to any brokerage fee, commission, finders' fee or financial
advisory fee in connection with the transactions contemplated hereby by reason
of any action taken by Showco or any affiliate, employee, representative or
agent of Showco.
3.5 STATUS OF CLEARSHO. Showco is the sole member of Clearsho.
Clearsho has only one class of membership interest. There are no other
membership interests or equity rights in Clearsho of any kind. There have not
been granted any rights with respect to issuance or acquisition of any such
membership interests or equity rights; and, specifically, there are no options,
warrants, rights of first refusal, preemptive rights or other rights of any
person to acquire any such membership interest or equity rights in Clearsho.
Clearsho does not have any managers or any operating agreement or other
agreement governing its affairs, except for the Operating Agreement. Clearsho
has been formed solely to complete the transactions contemplated by the Asset
Transfer Agreement and has not conducted any business or been involved in any
transaction other than the transactions contemplated by the express terms of the
Asset Transfer Agreement. Other than under and as defined in the Asset Transfer
Agreement, Clearsho has not
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incurred, assumed or other become liable for any duty, obligation, liability,
claim or charge of any kind. Without limiting the foregoing, Clearsho is not
party to or bound by any contract or agreement other than the Asset Transfer
Agreement and the Seller Related Instruments (as defined in the Asset Transfer
Agreement).
3.6 ASSET PURCHASE. The transactions contemplated to occur at the
Closing under the Asset Transfer Agreement have all been completed in accordance
with its terms, without waiver or modification. No party has breached the Asset
Transfer Agreement or failed to satisfy any condition or requirement specified
therein and required to be performed on or before the date of this Agreement.
Showco and Vari-Lite have delivered a true, complete and correct copy of the
Asset Transfer Agreement and all related exhibits and schedules to Buyer. Such
Asset Transfer Agreement is the valid, legal and binding obligation of Showco
and Vari-Lite, enforceable in accordance with its terms.
IV. REPRESENTATIONS AND WARRANTIES OF BUYER AND CLAIR BROTHERS.
Each of Buyer and Clair Brothers, solely with respect to itself, and
severally and not jointly, hereby represents and warrants to Showco and
Vari-Lite that:
4.1 ORGANIZATION AND AUTHORITY.
(a) It is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania.
(b) It has all requisite corporate power and authority to
enter into this Agreement, the Escrow Agreement and any instrument and agreement
contemplated herein required to be executed and delivered by it pursuant to this
Agreement (collectively, the "Buyer Related Instruments"), and to consummate the
transactions contemplated hereby and thereby.
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The execution, delivery and performance of this Agreement and the Buyer
Related Instruments to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by
all necessary action on its part. This Agreement has been, and each Buyer
Related Instrument to which it is a party when executed and delivered will
be, duly executed and delivered by it and constitutes, and each Buyer Related
Instrument when executed and delivered by it will constitute, its valid and
binding obligation, enforceable against it in accordance with its terms,
except that (i) such enforcement may be subject to any bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws,
now or hereafter in effect, relating to or limiting creditors' rights
generally and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought. Each of Buyer and Clair Brothers has delivered to Showco a true,
complete and correct copy of resolutions duly and validly adopted by its
Board of Directors evidencing its authorization of the execution and delivery
of this Agreement and the Buyer Related Instruments to which it is a party,
and the consummation of the transactions contemplated hereby and thereby
(which resolutions have not been modified, revoked or rescinded in any
respect).
4.2 NO VIOLATION; CONSENTS AND APPROVALS.
(a) The execution and delivery of this Agreement and the
Buyer Related Instruments do not, and the consummation of the transactions
contemplated hereby or thereby and compliance with the terms hereof or
thereof will not, (i) conflict with, or result in any violation of or
constitute a default under, (A) any provision of its articles of
incorporation or bylaws, or similar organizational documents, or (B) any
judgment, order or decree, or statute,
11
law, ordinance, rule or regulation, applicable to it, or conflict with or
result in any violation of or constitute a default (or an event or condition
which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance
required by, or cause the acceleration of the maturity of any liability or
obligation pursuant to, or result in the creation or imposition of any Lien
under, any contract of any kind or character to which it is a party.
(b) No consent, approval, order or authorization of,
notice to, or registration, declaration or filing with, any Governmental
Entity, or any other Person, is required to be obtained or made in connection
with the execution and delivery by it of this Agreement or any Buyer Related
Instrument to which it is a party, or the consummation by it of the
transactions contemplated hereby or thereby, or compliance by it with the
terms hereof or thereof.
4.3 BROKERS. No broker, finder or financial advisor or other
Person is entitled to any brokerage fee, commission, finders' fee or financial
advisory fee in connection with the transactions contemplated hereby by reason
of any action taken by Buyer or any affiliate, employee, representative or agent
of Buyer.
V. COVENANTS AND AGREEMENTS.
5.1 COVENANT NOT TO COMPETE.
(a) For a period of five years after the Closing Date,
neither Showco nor Vari-Lite, nor any subsidiary of Vari-Lite, shall,
directly or indirectly, (i) whether by ownership, control, management,
operation or financing, compete with the Business as conducted by Clearsho
and/or Buyer ("Competitive Business"), provided, however, that the
restriction contained herein will not prohibit in any way the acquisition by
such Persons, directly or
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indirectly, of up to 1% in the aggregate of the publicly traded stock of any
Person engaged in a Competitive Business, or (ii) employ, or solicit for
employment, any employee of Clearsho, Buyer or Clair Brothers.
(b) Each of Showco and Vari-Lite acknowledges and agrees
that the provisions of this Section 5.1 are necessary and reasonable to
protect Buyer in the conduct of the Business and to provide Buyer with the
full benefits it has bargained for under this Agreement. If any court of
competent jurisdiction shall hold any restriction contained in this Section
5.1 to be invalid, illegal, or unenforceable by reason of the extent,
duration, or geographical scope thereof, or otherwise, then the court making
such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby.
(c) Each of Showco and Vari-Lite acknowledges and agrees
that any breach by either of them of this Section 5.1 may result in Buyer
suffering a loss which cannot adequately be compensated for in damages and
that Buyer shall be entitled to injunctive relief (without the necessity of
posting a bond or other security) in addition to any and all other remedies
available to it, whether at law or in equity.
5.2 USE OF NAMES. At or prior to the Closing, Showco shall cause
to be adopted and effected an amendment to its Certificate of Incorporation and
that of any of its affiliates changing its and their name to a name bearing no
resemblance to "Showco, Inc." or "Showco" or any trade name or service name
included in the Intellectual Property (as defined in the Asset Transfer
Agreement). At the Closing, Showco shall deliver to Buyer duly executed
duplicate originals of any such amendment in proper form for filing with the
appropriate Governmental Entities. From
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and after the Closing, except as required by Applicable Law, Showco and
Vari-Lite shall not use or permit any of Vari-Lite's subsidiaries to use the
name Showco or any trade name or service name included in the Intellectual
Property or any variant or derivative of any thereof.
5.3 ACCESS TO INFORMATION. For a period of five years after the
Closing Date, each of Vari-Lite and Showco, on the one hand, and Buyer, on the
other hand, and their respective representatives shall have reasonable access to
all of the books and records of the Business, including all employee records, in
the possession of the other such Party to the extent that such access may
reasonably be required by such Party in connection with the Assumed Liabilities,
or other matters relating to or affected by the ownership of the Membership
Interest or Buyer's operation of the Business. Such access shall be afforded by
the Party in possession of any such books and records upon receipt of reasonable
advance notice and during normal business hours. The Party exercising this right
of access shall be solely responsible for any costs or expenses incurred by it
or the other Party with respect to such access pursuant to this Section 5.3. If
the Party in possession of such books and records shall desire to dispose of any
books and records during such five-year period, such Party shall, prior to such
disposition, give the other Party a reasonable opportunity, at such other
Party's cost and expense, to segregate and remove such books and records as such
other Party may select.
5.4 FURTHER ASSURANCES. Subject to the terms and conditions of
this Agreement, each of Vari-Lite, Showco and Buyer shall use its reasonable
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or advisable under Applicable Law to
consummate and make effective the purchase and sale of the Membership Interest
pursuant to this Agreement.
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5.5 CERTAIN TAX MATTERS.
(a) All transfer, sales and similar Taxes ("Transfer
Taxes") incurred in connection with this Agreement and the Asset Transfer
Agreement, and the transactions contemplated hereby and thereby shall be
borne by Showco and Vari-Lite (and, to the extent paid by Buyer or Clearsho,
Showco and Vari-Lite shall reimburse Buyer upon request). Showco and
Vari-Lite, at their expense, shall prepare and file, to the extent required
by, or permissible under, Applicable Law, all necessary Tax Returns and other
documentation with respect to all such Transfer Taxes, and, if required by
Applicable Law, Buyer shall join in the execution of all such Tax Returns and
other documentation; provided, however, that prior to the Closing Date, to
the extent applicable and requested by Showco, Buyer shall provide to Showco
and Vari-Lite appropriate certificates of Tax exemption from each applicable
Governmental Authority. Except as provided above, all Tax Returns required to
be filed and Tax required to be paid by Clearsho on or before Closing shall
be the sole responsibility of Showco and all Tax Returns required to be filed
and tax required to be paid by Clearsho after Closing shall be the sole
responsibility of Buyer.
(b) Each of Vari-Lite, Showco and Buyer shall provide such
assistance as may reasonably be requested by the other Party in connection
with the preparation of any Tax Return, audit or other examination, or any
proceeding, by or before any Governmental Entity relating to liability for
Taxes, and each such Party shall provide the requesting Party with all books
and records or other information which may be relevant to such Tax Return,
audit, examination or
15
proceeding. All books, records and information obtained pursuant to this
Agreement relating to Taxes shall be kept confidential by such Parties.
(c) In the event that a dispute arises between Vari-Lite
and Showco, on the one hand, and Buyer, on the other hand, regarding Taxes or
any amount due under this Section 5.5, such Parties shall attempt in good
faith to resolve such dispute and any agreed-upon amount shall be promptly
paid to the appropriate Party. If any such dispute is not resolved within
thirty days after notice thereof is given by one such Party to any other
Party, such Parties shall submit the dispute to an Independent Accounting
Firm for resolution, which resolution shall be final, binding and conclusive
on such Parties. Notwithstanding anything in this Agreement to the contrary,
the fees and expenses of the Independent Accounting Firm in resolving the
dispute shall be borne equally by such Parties. Any payment required to be
made as a result of the resolution by the Independent Accounting Firm of any
such dispute shall be made within five business days after such resolution,
together with any interest determined by the Independent Accounting Firm to
be appropriate.
(d) To the extent that Vari-Lite or Showco, on the one
hand, or Buyer, on the other hand, receives a Tax refund or credit with
respect to a Tax that was paid or incurred by the other Party, such receiving
such Party shall promptly pay the amount of such Tax refund or credit to such
other Party.
5.6 EMPLOYEES AND EMPLOYEE BENEFITS.
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(a) SCHEDULE 5.6 list those Employees who have accepted
offers of employment, effective as of the Closing Date, with Buyer (the
"Transferred Employees"). Effective on the Closing Date, Vari-Lite, if
applicable, and Showco shall terminate, or accept the resignation of, each
Transferred Employee from employment with such Party. From and after the
Closing Date, other than with respect to liabilities and obligations to
Transferred Employees that arise on or after the Closing Date pursuant to
agreements, contracts, arrangements, understandings and policies expressly
entered into or adopted by Clearsho or Buyer, or under Applicable Law, for
which only Clearsho and Buyer shall be responsible, neither Clearsho, Buyer,
nor Clair Brothers shall have any liability or obligation with respect to any
Employee, including under any Plan, or any employment, severance or similar
agreement, contract, arrangement, understanding or policy, or Applicable Law.
From and after the Closing, Vari-Lite, if applicable, and Showco shall take
all actions necessary to pay, perform and discharge all liabilities and
obligations to all Transferred Employees in respect of periods prior to the
Closing Date, including under any Plan, or any employment, severance or
similar agreement, contract, arrangement, understanding or policy, or
Applicable Law.
(b) In furtherance but not in limitation of Section
5.6(a), Showco and Vari-Lite shall be responsible for performing and
discharging all requirements under the WARN Act and under Applicable Laws for
the notification of Employees of any "employment loss" (within the meaning of
the WARN Act) which occurs prior to the Closing Date.
(a) (i) Effective as of the Closing Date, Buyer shall
offer to Transferred Employees participation in employee benefit plans,
programs, policies and arrangements
17
("Benefits") that are available to similarly situated employees of Buyer.
With respect to Benefits provided by Buyer after the Closing, service accrued
by Transferred Employees with Vari-Lite or Showco prior to the Closing Date
shall be recognized for purposes of any Qualified Plan and welfare benefit
plan described in Section 5.6(c)(ii), except to the extent necessary to
prevent any duplication of benefits.
(ii) Each Transferred Employee shall be immediately
eligible to participate, without any waiting time, in welfare benefit plans
of Buyer made available to Transferred Employees. For purposes of each
welfare benefit plan of Buyer providing medical, dental, pharmaceutical
and/or vision benefits to any Transferred Employee, Buyer shall cause all
pre-existing condition exclusions and actively-at-work requirements of such
plans to be waived for such Transferred Employee and his or her covered
dependents. If Buyer's health benefits are subject to co-payments and
deductibles, Buyer will give full credit for all co-payments and deductibles
satisfied prior to the Closing by Transferred Employees in the same plan year
under Vari-Lite's or Showco's welfare plan.
(iii) Except to the extent prohibited by the terms of
a Qualified Plan or Applicable Laws, Vari-Lite shall cause the account
balances of each Transferred Employee in the Qualified Plans to be paid to,
or on behalf of, the Transferred Employee as soon as administratively
practicable following the Closing. If the payments contemplated in the
preceding sentence cannot be made, Buyer may request Vari-Lite to cause the
account balances of the Transferred Employees in the Qualified Plans to be
transferred to a defined contribution Plan maintained by Buyer containing a
qualified cash or deferred arrangement within the
14
meaning of Section 401(k) of the Code ("Buyer's 401(k) Plan"), provided that
prior to such transfer, Buyer shall have provided to Vari-Lite (i) a
determination letter from the Internal Revenue Service to the effect that
Buyer's 401(k) Plan meets the requirements for qualification under Section
401(a) of the Code and (ii) a representation that Buyer's 401(k) plan
complies with Section 411(d)(6) of the Code with respect of the account
balances of Transferred Employees to be transferred to the Buyer's 401 (k)
Plan. As soon as administratively practicable following the receipt by
Vari-Life of such transfer request, Vari-Lite shall cause to be transferred
to Buyer's 401(k) Plan cash or such other assets as the parties may agree
having fair market value equal to the aggregate value of the account balances
in the Qualified Plans as of the date of transfer for Transferred Employees
(such transfer to include notes evidencing loans to Transferred Employees
from their account balances), and shall also transfer all qualified domestic
relations orders, within the meaning of Section 414(p) of the Code,
applicable to Transferred Employees. Following such transfer of assets, Buyer
shall assume all of Vari-Lite's and Showco's liabilities under the Qualified
Plans with respect to Transferred Employees.
5.7 TRANSITION RIGHTS. Showco hereby grants to Buyer an
irrevocable right through and until the date that is thirty days after the
Closing Date to the real property, and buildings thereon, located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Temporary Site"), for purposes of
storing, having access to, and removing any assets of Clearsho located at or on
the Temporary Site, such access and removal to take place during normal business
hours. Buyer shall, during such thirty (30) day period, have exclusive control
over access to and from the Temporary Site. Buyer shall be liable to Showco, and
to other Persons, for any and all actions,
19
suits, claims, demands, debts, liabilities, obligations, losses, damages,
costs and expenses (including attorneys' fees and expenses), in each case,
arising out of, relating to or in connection with, or caused by, directly or
indirectly, actions taken by Buyer in the exercise of its rights under this
Section 5.7, or Buyer's wilful misconduct or negligence except to the extent
caused by Showco's wilful misconduct or negligence with respect to the
Temporary Site, in which case Showco shall be liable to Buyer.
VI. INDEMNIFICATION.
6.1 SHOWCO AND VARI-LITE OBLIGATION TO INDEMNIFY. From and after
the Closing Date, Showco and Vari-Lite shall, jointly and severally, defend,
indemnify and hold harmless Clearsho, Buyer, and their respective successors and
permitted assigns, from and against any and all actions, suits, claims, demands,
debts, liabilities, obligations, losses, damages, costs and expenses (including
reasonable attorneys' fees and expenses), in each case, arising out of, relating
to or in connection with, or caused by, directly or indirectly, any or all of
the following: (a) any breach of any representation or warranty made by Showco
and Vari-Lite in this Agreement or the Showco Related Instruments; (b) any
failure or refusal by Showco or Vari-Lite to satisfy, comply with or perform any
agreement, term or condition of this Agreement or the Showco Related Instruments
to be satisfied, complied with or performed by it; or (c) any debt, liability or
obligation of Vari-Lite, Showco or, with respect to any time prior to the
Closing, Clearsho (other than the Assumed Liabilities under the Asset Transfer
Agreement) of any nature, known or unknown, fixed or contingent.
20
6.2 BUYER AND CLAIR BROTHERS OBLIGATION TO INDEMNIFY. From and
after the Closing Date, each of Buyer and Clair Brothers, severally and not
jointly, shall defend, indemnify and hold harmless Showco and Vari-Lite, and
their respective successors and permitted assigns, from and against any and
all actions, suits, claims, demands, debts, liabilities, obligations, losses,
damages, costs and expenses (including reasonable attorneys' fees and
expenses), in each case, arising out of, relating to or in connection with,
or caused by, directly or indirectly, any or all of the following: (a) any
breach of any representation or warranty made by such Party in this
Agreement; or (b) any failure or refusal by it to satisfy, comply with or
perform any agreement, term or condition of this Agreement to be satisfied,
complied with or performed by it, it being understood that the sole such
agreement, term or condition as to Clair Brothers shall be as set forth in
Sections 1.2, 7.1 and 7.2.
6.3 LIMITATION ON OBLIGATION TO INDEMNITY.
Notwithstanding any provision hereof to the contrary, (a)
no Party hereto shall have any obligation to indemnify any Person for breach
of representation or warranty pursuant to Section 6.1(a) or 6.2(a) unless the
Person seeking such indemnification shall have notified the Indemnitor within
the period during which such representation or warranty shall survive the
Closing in accordance with Section 7.4, (b) Showco and Vari-Lite, on the one
hand, and Buyer and Clair Brothers, on the other hand, shall have no
obligation to indemnify any Person pursuant to Section 6.1(a) or 6.2(a)
unless and until the aggregate amount for which Showco and Vari-Lite, on the
one hand, or Buyer and Clair Brothers, on the other hand, would be liable
pursuant to Section 6.1(a) or 6.2(a) but for this provision, taken together
with amounts for which such
21
Persons would be liable (including, in the case of Buyer and Clair Brothers,
amounts for which Clearsho would be liable) under the indemnification
provisions of the Asset Transfer Agreement, exceeds $175,000, and then only
to the extent of such excess, and (c) in no event shall Showco and Vari-Lite,
on the one hand, or Buyer and Clair Brothers, or the other hand, have any
liability to indemnify any Person pursuant to Section 6.1(a) or 6.2(a) in an
amount, when taken together with amounts for which such Persons would be
liable (including, in the case of Clair Brothers and Buyer, for which
Clearsho would be liable) under the indemnification provisions of the Asset
Transfer Agreement, in excess of Nine Million Dollars ($9,000,000). The
intent of the Parties is that claims under this Agreement and the Asset
Transfer Agreement shall be aggregated for purposes of determining
satisfaction of the $175,000 "basket" and the $9,000,000 liability limit.
6.4 DEFENSE OF ACTIONS. With respect to each separate event,
occurrence or matter ("Indemnification Matter") against which a Party (the
"Indemnitee") is indemnified by any other Party or Parties (the "Indemnitor")
under this Article VI, the Indemnitor shall be responsible, at its sole
expense, for litigating, defending or otherwise attempting to resolve any
action, suit or proceeding underlying such Indemnification Matter, except
that (a) the Indemnitee may, at its option, participate in such defense or
resolution at its expense and through counsel of its choice; (b) the
Indemnitee may, at its option, assume control of such defense or resolution
if the Indemnitor does not in good faith pursue or prosecute such defense or
resolution in a reasonably timely manner; and (c) the Indemnitor shall not
agree to any settlement (other than such as involve only equitable remedies
that do not adversely affect the Indemnitee) without the
22
Indemnitee's prior written consent, which shall not be unreasonably withheld,
conditioned or delayed, unless the Indemnitee receives an unconditional and
irrevocable release from liability in connection therewith. In any event, the
Indemnitor and the Indemnitee shall in good faith cooperate with each other
and their respective counsel with respect to all such actions, suits or other
proceedings.
6.5 NOTICES AND PAYMENTS. With respect to each Indemnification
Matter:
(a) NOTICE. Upon the Indemnitee's receipt of written
documents pertaining to the Indemnification Matter, or, if the
Indemnification Matter does not involve a third party demand or claim, after
the Indemnitee first has actual knowledge of such Indemnification Matter, the
Indemnitee shall give reasonably prompt notice to the Indemnitor of the
nature of such Indemnification Matter and the amount demanded or claimed in
connection therewith.
(b) PAYMENT. After a final agreement is reached or a
final judgment or order is rendered with respect to any Indemnification
Matter, the Indemnitor shall promptly, but in no event later than three
business days after such determination, agreement, judgment or order, pay to
the Indemnitee the amount owing by the Indemnitor with respect to such
Indemnification Matter.
6.6 SOLE REMEDY. This Article VI is intended to and constitutes
the sole remedy available to the parties at law or equity (other than for
fraud) for breaches of representations and warranties set forth herein.
VII. MISCELLANEOUS
23
7.1 PUBLICITY. Except as required by Applicable Law (in which
event the Parties shall consult with each other and provide a reasonable
opportunity to comment), no Party shall make or issue any public
announcement, statement or press release concerning this Agreement or the
transactions contemplated hereby without the prior written consent of the
other Parties, which consent shall not be unreasonably withheld, conditioned
or delayed.
7.2 EXPENSES. Each Party shall pay all of the costs and
expenses incurred by it in preparing, negotiating, executing and delivering
this Agreement (and all other agreements, certificates, instruments and
documents executed in connection herewith) and in consummating the
transactions contemplated hereby.
7.3 NOTICES. All notices, consents or other communications
required or permitted to be given under this Agreement shall be in writing
and shall be deemed to have been duly given (a) when delivered personally, or
sent and confirmed by facsimile, (b) three business days after being mailed
by first class certified mail, return receipt requested, postage prepaid, or
(c) one business day after being sent by a nationally recognized express
courier service, postage or delivery charges prepaid, to the Parties at their
respective addresses set forth below:
If to Buyer or Clair Brothers to:
Clair Acquisition Corp.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
24
Blank Rome Comisky & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to Showco or Vari-Lite to:
Vari-Lite International, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇. ▇. ▇▇▇▇▇▇▇▇, III
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Any Party may change its address for notice and the address to which copies
must be sent by giving notice of the new address to the other Parties in
accordance with this Section 7.3, provided that any such change of address
notice shall not be effective until received.
7.4 SURVIVAL. The representations and warranties set forth
herein shall generally survive for a period of 15 months from the date
hereof, except that the representations and warranties of Sections 3.5 and
3.6 shall survive indefinitely. The covenants and agreements of
25
the Parties contained in this Agreement shall survive the Closing in
accordance with their respective terms.
7.5 ENTIRE UNDERSTANDING; AMENDMENTS. This Agreement, together
with the schedules and exhibits hereto, states the entire understanding
between the Parties with respect to the subject matter hereof and supersedes
all prior oral and written communications and agreements with respect to the
subject matter hereof, including the Letter of Intent dated October 26, 2000
among ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Showco and Vari-Lite. This
Agreement shall not be amended or modified except in a written document
signed by all Parties.
7.6 PARTIES IN INTEREST. This Agreement shall bind, benefit
and be enforceable by the Parties and their respective successors and
permitted assigns.
7.7 ASSIGNMENT. No Party may assign any of its rights,
interests or obligations under this Agreement without the prior written
consent of all other Parties hereto, which consent shall not be unreasonably
withheld, conditioned or delayed; provided, however, that (a) Buyer may,
without any such consent, assign all or any portion of its rights, interests
and obligations hereunder to or for the benefit of its lenders and (b) upon
any assignment by any Party, the assignor shall remain fully liable for (and
shall not be released or relieved of) the prompt and full payment,
performance and discharge of its obligations hereunder in accordance with the
terms of this Agreement.
7.8 NO WAIVERS. No waiver with respect to this Agreement shall
be enforceable unless in writing and signed by the Party against which
enforcement of such waiver is sought.
26
No failure to exercise, delay in exercising, or single or partial exercise of
any right, power or remedy by any Party, and no course of dealing between or
among any of the Parties, shall constitute a waiver of, or shall preclude any
other or further exercise of, the same or any other right, power or remedy.
7.9 SEVERABILITY. If any provision of this Agreement is
construed to be invalid, illegal or unenforceable, then the remaining
provisions hereof shall not be affected thereby and shall be enforceable
without regard thereto.
7.10 COUNTERPARTS. This Agreement may be executed and delivered
in any number of counterparts, each of which when so executed and delivered
shall be an original hereof, and all of which shall constitute one and the
same instrument.
7.11 INTERPRETATION. Section and subsection headings in this
Agreement are for convenience of reference only, and shall neither constitute
a part of this Agreement nor affect its interpretation. Ambiguities and
uncertainties in the wording of this Agreement shall not be construed for or
against any Party, but shall be construed in the manner that most accurately
reflects the Parties' intent as of the date of this Agreement. Each Party
acknowledges that it has been represented by counsel in connection with the
review and execution of this Agreement, and, accordingly, there shall be no
presumption that this Agreement or any provision hereof be construed against
the Party that drafted this Agreement.
7.12 REFERENCES. All words in this Agreement shall be construed
to be of such number and gender as the context requires or permits. When
used in this Agreement, the words "including" shall be deemed in all cases to
be followed by the words "without limitation."
27
7.13 GOVERNING LAW. This Agreement is made under, and shall be
construed and enforced in accordance with, the substantive laws of the
Commonwealth of Pennsylvania applicable to agreements made and to be
performed solely therein (without giving effect to conflicts of law
principles).
7.14 VENUE. Venue in any and all suits, actions and proceedings
related to the subject matter of this Agreement shall be in the state and
federal courts located in and for the State of Delaware (the "Courts"), which
shall have exclusive jurisdiction for such purpose, and the Parties hereby
irrevocably submit to the exclusive jurisdiction of such Courts and
irrevocably waive the defense of an inconvenient forum to the maintenance of
any such suit, action or proceeding. Service of process may be made in any
manner recognized by such Courts. Each of the Parties hereby irrevocably
waives its right to a jury trial arising out of any dispute in connection
with this Agreement or the transactions contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
28
IN WITNESS WHEREOF, the Parties have duly executed and delivered
this Equity Purchase Agreement as of the date first written above.
VARI-LITE INTERNATIONAL, INC.
By:_____________________________________
Name: ▇. ▇. ▇▇▇▇▇▇▇▇ III
Title: Chairman and Chief
Executive Officer
SHOWCO, INC.
By:_____________________________________
Name: ▇. ▇. ▇▇▇▇▇▇▇▇ III
Title: Vice President
CLAIR ACQUISITION CORP.
By:_____________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CLAIR BROTHERS AUDIO ENTERPRISES, INC.
By:_____________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
{SIGNATURE PAGE TO EQUITY PURCHASE AGREEMENT}
29
EXHIBIT A
TO EQUITY PURCHASE AGREEMENT
DEFINITIONS
1. "Agreement" means this Equity Purchase Agreement, dated as of November 17, 2000.
2. "Applicable Law" has the meaning set forth in the Asset Transfer Agreement.
3. "Asset Transfer Agreement" has the meaning set forth in the "Background" section.
4. "Assumed Liabilities" has the meaning set forth in the Asset Transfer Agreement.
5. "Benefit" has the meaning set forth in Section 5.6(c).
6. "Business" has the meaning set forth in the "Background" section.
7. "Buyer" has the meaning set forth in the Preamble hereto.
8. "Buyer Related Instruments" has the meaning set forth in Section 4.1(b).
9. "Buyer's 401(K) Plan" has the meaning set forth in Section 5.6.
10. "Clair Brothers" has the meaning set forth in the preamble.
11. "Clearsho" has the meaning set forth in the "Background" section.
12. "Closing" has the meaning set forth in Section 2.1.
13. "Closing Date" has the meaning set forth in Section 2.1
14. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder from time to time.
15. "Competitive Business" has the meaning set forth in Section 5.1.
16. "Contract" has the meaning set forth in the Asset Transfer Agreement.
A-1
17. "Employee" has the meaning set forth in the Asset Transfer Agreement.
18. "Escrow Agent" means ▇▇▇▇▇▇ Bank, a Pennsylvania banking corporation.
19. "Escrow Agreement" means the Escrow Agreement, dated the date hereof, among
Showco, Buyer and the Escrow Agent.
20. "Escrow Funds" has the meaning set forth in Section 2.4(a).
21. "Governmental Entity" has the meaning set forth in Section 3.2(b).
22. "Indemnification Matter" has the meaning set forth in Section 6.4.
23. "Indemnitee" has the meaning set forth in Section 6.4.
24. "Indemnitor" has the meaning set forth in Section 6.4.
25. "Independent Accounting Firm" means such nationally recognized, independent accounting firm
as is mutually appointed by Vari-Lite and Buyer for purposes of this Agreement.
26. "Intellectual Property" has the meaning set forth in the Asset Transfer Agreement.
27. "Lien" means any and all liens, claims, charges, security interests, mortgages, restrictions,
limitations and encumbrances of any nature whatsoever.
28. "Membership Interest" has the meaning set forth in the "Background" section.
29. "Party or Parties" has the meaning set forth in the Preamble hereto.
30. "Person" means any individual, sole proprietorship, joint venture, partnership, limited
liability company, corporation, association, cooperative, trust, estate, Governmental
Entity, or other entity of any nature whatsoever.
A-2
31. "Plan" shall have the meaning provided in the Asset Transfer Agreement.
32. "Purchase Price" has the meaning set forth in Section 2.2.
33. "Qualified Plan" has the meaning set forth in the Asset Transfer Agreement.
34. "Showco" has the meaning set forth in the preamble.
35. "Showco Related Instruments" has the meaning set forth in Section 3.1(b).
36. "Showco Required Approvals" means, collectively, the consents, approvals, orders,
authorizations, notices, registrations and filings set forth in SCHEDULE 3.2(b).
37. "Tax Returns" means any and all returns, reports, information returns, declarations,
claims for refund, or other documents, together with all amendments and supplements
thereto (including all related or supporting information), required to be supplied to
any Governmental Entity responsible for the administration of laws governing Taxes.
38. "Tax" or "Taxes" means any and all taxes, surtaxes, charges, fees, levies, penalties
and other assessments imposed by any Governmental Entity, including income, gross
receipts, excise, property, sales, transfer, use, franchise, special franchise,
payroll, recording, withholding, social security, gross receipts, license, stamp,
occupation, employment or other taxes, including any interest, penalties or additions
attributable thereto or any liability for taxes incurred by reason of joining in the
filing of any consolidated, combined or unitary Tax Returns, in each case including
any interest, penalties or additions attributable thereto.
39. "Temporary Site" has the meaning set forth in Section 5.7.
A-3
40. "Transferred Employees" has the meaning set forth in Section 5.6.
41. "Transfer Taxes" has the meaning set forth in Section 5.5(a).
42. "Vari-Lite" has the meaning set forth in the Preamble hereto.
A-4
