EXECUTION COPY
PURCHASE AGREEMENT
BY AND AMONG
AMERICAN GOLF CORPORATION,
GOLF ENTERPRISES, INC.,
NEW AGC LLC,
▇▇▇▇▇ ▇. ▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
THE ▇▇▇▇▇ ▇. ▇▇▇▇▇ TRUST AND THE DALLAS P. PRICE TRUST,
THE AGC SELLERS
AND
THE TRANSFERRED ENTITY SELLERS
DATED AS OF SEPTEMBER 14, 2002
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.................................................2
ARTICLE II THE AGC ACQUISITION........................................13
2.1 General.............................................................13
2.2 Instruments of Transfer; Payment of AGC Transfer Consideration......13
ARTICLE III THE GEI ACQUISITION........................................15
3.1 General.............................................................15
3.2 Instruments of Transfer; Payment of GEI Transfer Consideration......15
ARTICLE IV THE TRANSFERRED INTERESTS ACQUISITION......................16
4.1 General.............................................................16
4.2 Instruments of Transfer; Payment of Transferred Interest
Consideration.......................................................17
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PRICE GROUP..........17
5.1 Organization and Related Matters....................................18
5.2 Subsidiaries; Minority Interests....................................18
5.3 Authority; No Violation.............................................19
5.4 Consents and Approvals..............................................20
5.5 Authorized Capitalization; Ownership of Equity Interests............20
5.6 Regulatory Documents................................................22
5.7 Financial Statements................................................22
5.8 Contracts...........................................................23
5.9 No Other Broker.....................................................24
5.10 Legal Proceedings...................................................24
5.11 Compliance with Applicable Law......................................25
5.12 Environmental Liability.............................................26
5.13 Insurance...........................................................26
5.14 Employee Benefit Plans; ERISA.......................................27
5.15 Labor Matters.......................................................30
5.16 Technology and Intellectual Property................................30
5.17 Real Property.......................................................30
5.18 Asset Sales.........................................................32
5.19 Distributions.......................................................32
5.20 Filing Documents....................................................33
5.21 Transactions with Affiliates........................................33
5.22 Absence of Certain Changes..........................................34
5.23 State Takeover Statutes.............................................34
(i)
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE AGC SELLERS AND
THE TRANSFERRED ENTITY SELLERS.............................35
6.1 Authority; No Violation.............................................35
6.2 Consents and Approvals..............................................35
6.3 Ownership of Equity Interests.......................................35
6.4 Corporate Existence and Power.......................................36
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR.............36
7.1 Organization and Related Matters....................................36
7.2 Authority; No Violation.............................................37
7.3 Consents and Approvals..............................................37
7.4 Investment Purpose..................................................37
ARTICLE VIII COVENANTS..................................................38
8.1 Conduct of Business by the Price Entities...........................38
8.2 Insurance...........................................................41
8.3 Employees, Employee Benefits........................................41
8.4 Third-Party Proposals...............................................42
8.5 Officers' and Directors' Indemnification............................43
8.6 State Takeover Statutes.............................................43
8.7 Reasonable Best Efforts - Tax Treatment.............................44
8.8 Return Filing and Payment of Taxes..................................44
8.9 Pledges.............................................................44
8.10 Delivery of Documents...............................................44
8.11 Capital Expenditures................................................44
8.12 Financing...........................................................45
8.13 Subsequent Financial Statements.....................................45
8.14 Section 338(h)(10) Election.........................................45
ARTICLE IX ADDITIONAL AGREEMENTS......................................46
9.1 Regulatory Matters..................................................46
9.2 Access to Information...............................................47
9.3 Legal Conditions to Acquisition Transactions........................47
9.4 Additional Agreements...............................................48
9.5 Advice of Changes...................................................48
9.6 Director Designation Agreement......................................48
9.7 Intercompany Payables...............................................48
9.8 Seller Releases.....................................................49
9.9 Partners Agreement..................................................49
9.10 Title Insurance Affidavits..........................................49
9.11 Environmental Investigations........................................50
(ii)
ARTICLE X TAX MATTERS................................................51
10.1 Tax Indemnification.................................................51
10.2 Allocation of Certain Taxes.........................................52
10.3 Filing Responsibility; Payments.....................................52
10.4 Refunds.............................................................53
10.5 Control of Tax Audits...............................................54
10.6 Representations.....................................................55
10.7 Cooperation and Exchange of Information.............................56
10.8 Tax Sharing Agreements..............................................57
10.9 Survival............................................................57
ARTICLE XI CONDITIONS PRECEDENT.......................................57
11.1 Conditions to Each Party's Obligation to Effect the Transactions....57
11.2 Conditions to Obligations of Acquiror...............................58
11.3 Conditions to Obligations of the Price Group........................59
ARTICLE XII TERMINATION AND AMENDMENT..................................60
12.1 Termination.........................................................60
12.2 Effect of Termination...............................................62
12.3 Amendment...........................................................62
12.4 Extension; Waiver...................................................62
ARTICLE XIII INDEMNIFICATION............................................62
13.1 Indemnification by the Indemnifying Parties.........................62
13.2 Calculation and Payment of Losses...................................63
13.3 Termination of Indemnification......................................64
13.4 Procedures..........................................................64
13.5 Arbitration.........................................................66
9.11 Rights of Offset for Certain Breaches...............................68
13.6 Exclusive Remedy....................................................68
ARTICLE XV GENERAL PROVISIONS.........................................68
14.1 Closing.............................................................68
14.2 Survival of Representations, Warranties and Agreements..............68
14.3 Expenses............................................................69
14.4 Notices.............................................................69
14.5 Interpretation......................................................72
14.6 Counterparts........................................................73
14.7 Entire Agreement....................................................73
14.8 Governing Law.......................................................73
14.9 Severability........................................................73
14.10 Publicity...........................................................73
14.11 Assignment; Third Party Beneficiaries...............................74
(iii)
14.12 Waiver of Jury Trial................................................74
14.13 Termination of AGC Seller Agreements................................74
14.14 Representative of the AGC Sellers and Transferred Entity Sellers....74
Exhibits
Exhibit A - Amended and Restated Membership Deposit Agreements
Exhibit B-1 - Form of Warrant
Exhibit B-2 - Equity Interests in AGC, GEI and the Transferred Entities
Exhibit C - Knowledge of the Price Group
Exhibit D - Form of Closing Release
Exhibit E - Escrow Agreement
Exhibit F - AGC Seller Agreements
Exhibit G - Consent of Trustee
Exhibit H - Consent of Spouse
Exhibit I - Suspended Merger Agreement
Exhibit J Merger Agreement
(iv)
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of September 14, 2002 (this "AGREEMENT"),
by and among NEW AGC LLC., a Delaware limited liability company ("ACQUIROR"),
AMERICAN GOLF CORPORATION, a California corporation ("AGC"), GOLF
ENTERPRISES, INC., a Kansas corporation ("GEI"), the ▇▇▇▇▇ ▇. ▇▇▇▇▇ TRUST,
the DALLAS P. PRICE TRUST, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (collectively,
the "PRICES"), the AGC SELLERS and the TRANSFERRED ENTITY SELLERS.
WHEREAS, upon the terms and subject to the terms of this Agreement, the
Acquiror or its permitted assignees under Section 14.11 will acquire AGC, GEI
and the Transferred Entities;
WHEREAS, concurrently with the execution of this Agreement, certain
Affiliates of Acquiror are entering into an agreement and plan of merger (the
"MERGER AGREEMENT") with National Golf Properties, Inc., a Maryland corporation
("NGP") and National Golf Operating Partnership, L.P., a Delaware limited
partnership ("NGOP"), pursuant to which those Affiliates will acquire NGP and
NGOP as set forth in EXHIBIT J;
WHEREAS, the members of Acquiror and the Boards of Directors of AGC, GEI
and the Transferred Entities have determined that it is in the best interests of
their respective companies and members or stockholders, as the case may be, for
the Prices, AGC, GEI, the Transferred Entities and the Transferred Entity
Sellers to consummate the transactions contemplated hereby subject to the terms
and conditions set forth herein, including (i) the acquisition by Acquiror of
the AGC Interests from the AGC Sellers (the "AGC ACQUISITION"); (ii) immediately
after the AGC Acquisition, the acquisition by Acquiror of the GEI Interests from
the Trusts (the "GEI ACQUISITION"); and (iii) immediately after the GEI
Acquisition, the acquisition by Acquiror of the Transferred Interests from the
Transferred Entity Sellers (the "TRANSFERRED INTERESTS ACQUISITION");
WHEREAS, it is the intention of the parties that the AGC Acquisition, the
GEI Acquisition and the Transferred Interests Acquisition will be taxed as sales
or exchanges under Section 1001 of the Code with each of the AGC Sellers, the
Trusts and the Transferred Entity Sellers recognizing gain or loss, as
applicable, for income tax purposes in connection with the AGC Acquisition, the
GEI Acquisition and the Transferred Interests Acquisition, as applicable; and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Acquisition Transactions and also to
prescribe certain conditions to the Acquisition Transactions.
NOW, THEREFORE, in consideration of the premises, covenants,
representations, warranties and agreements contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following terms shall have the
respective meanings set forth as follows (such definitions to be equally
applicable to both the singular and plural forms of the terms herein defined):
"1994 PLAN" shall have the meaning set forth in Section 2.1.
"ACQUIROR" shall have the meaning set forth in the preamble.
"ACQUIROR DISCLOSURE SCHEDULE" shall have the meaning set forth in the
introduction to Article VII.
"ACQUIROR EQUITY INTERESTS" shall mean the membership interests of the
Acquiror.
"ACQUIROR INDEMNITEE LIMITATION EXCEPTION" shall have the meaning set
forth in Section 13.2(b).
"ACQUIROR INDEMNITEES" shall have the meaning set forth in Section
13.1(a).
"ACQUIROR MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
the ability of the Acquiror or any permitted assignee to complete the Closing
pursuant to the terms hereof and/or comply with its obligations hereunder, other
than any change, event, effect or occurrence to the extent arising from any
breach by any member of the Price Group of any of their respective
representations, warranties, covenants or agreements hereunder.
"ACQUISITION PROPOSAL" shall have the meaning set forth in Section 8.4.
"ACQUISITION TRANSACTIONS" shall mean the AGC Acquisition, and GEI
Acquisition and the Transferred Interests Acquisition.
"AFFILIATE" shall mean any individual, partnership, corporation, entity or
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the Person specified.
For purposes of this Agreement, (i) each of the Prices shall be deemed an
Affiliate of AGC, GEI and the Transferred Entities, and vice versa, prior to but
not after the Closing, (ii) the Transferred Entity Sellers shall be deemed
Affiliates of each Transferred Entity in which it holds an Equity Interest prior
to but not after the Closing, (iii) neither of the Prices shall be deemed an
Affiliate of NGP or NGOP, and vice versa, and (iv) none of NGP, NGOP or any of
their respective Subsidiaries shall be deemed an Affiliate of the Prices, the
Trusts, AGC, GEI or any of the Transferred Entities.
"AGC" shall have the meaning set forth in the preamble.
"AGC ACQUISITION" shall have the meaning set forth in the recitals.
"AGC GROUP" shall mean AGC, American Golf of Atlanta, a Georgia general
partnership, American Golf of Detroit, a Michigan general partnership, American
Golf (UK)
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Ltd., an English Private Company Limited by Shares, AGC - Park Hill
Joint Venture, a Colorado general partnership, CW Golf Partners, a California
limited partnership, AG Los Coyotes LLC, a California limited liability company,
American Golf Australia Pty Limited, an Australian Company Limited by Shares, AM
Golf Corporation, a Texas corporation and the Transferred Entities.
"AGC GROUP AUDITED GAAP FINANCIAL STATEMENTS" shall have the meaning set
forth in Section 5.7(d).
"AGC GROUP BALANCE SHEETS" shall have the meaning set forth in Section
5.7(d).
"AGC GROUP INTERIM FINANCIAL STATEMENTS" shall have the meaning set forth
in Section 5.7(d).
"AGC INTERESTS" shall mean all of the Equity Interests in AGC set forth on
EXHIBIT B hereto (including Equity Interests which AGC or any of its
Subsidiaries has committed or is obligated to issue (whether such commitment is
written or unwritten)).
"AGC LEASE CONSENT LETTER" shall mean the lease consent letter, dated as
of the date hereof, among the parties hereto.
"AGC OPTION" shall have the meaning set forth in Section 2.1.
"AGC OPTION HOLDER" shall have the meaning set forth in Section 2.1.
"AGC OPTION PLANS" shall have the meaning set forth in Section 2.1.
"AGC SELLER AGREEMENTS" shall have the meaning set forth in Section
14.13(a).
"AGC SELLERS" means all Persons identified in EXHIBIT B hereto as owning
AGC Interests.
"AGC TRANSFER CONSIDERATION" shall have the meaning set forth in Section
2.1.
"AGC/GEI CONSENTS" shall have the meaning set forth in Section 5.4(a).
"AGREEMENT" shall have the meaning set forth in the preamble.
"APPLICABLE LAW" shall mean any domestic or foreign federal, state or
local statute, law (whether statutory or common law, regulation or otherwise),
ordinance, rule, administrative interpretation, regulation, order, writ,
injunction, directive, judgment, decree, policy, guideline or other requirement
(including those of the NASD, NYSE or any other self-regulatory organization)
applicable to the Acquiror, the Prices, the AGC Sellers, the Transferred Entity
Sellers, the Price Entities, or any of their respective Affiliates, properties,
assets, officers, directors, employees or agents, as the case may be.
"ASSOCIATIONS" shall mean the following non-stock associations: ▇▇▇▇▇
Creek 19th Hole Club; ▇▇▇▇▇ Creek Tennis Club; Blackstone 19th Hole Club;
Buffalo Creek Golf Club; Mesquite
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Golf Course Beverage Club; Riverside Golf Course Beverage Club; Riverchase Bar
& Grill Club; Cobblestone Club Beverages; Diamond Oaks Association, Inc.; ECC
Club; Fort Worth Golf Club, Inc.; Ridgeview Beverages; Tribute 19th Hole Club;
Waterview 19th Hole Club; the Sycamore Club and Southwyck Club.
"BALANCE SHEETS" shall have the meaning set forth in Section 5.7(a).
"BUSINESS DAY" shall mean any day that the NYSE is normally open for
trading and that is not a day on which banks in the City of Los Angeles or the
City of New York are authorized or required to close for regular banking
business.
"CLOSING" shall have the meaning set forth in Section 14.1.
"CLOSING DATE" shall have the meaning set forth in Section 14.1.
"CLOSING RELEASE" shall mean the release, dated as of the Closing Date in
the form attached hereto as EXHIBIT D, to be signed by each of the Prices, the
Trusts, the AGC Sellers and the Transferred Entity Sellers.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section
9.2(b).
"CONSENT OF TRUSTEE" shall mean the consent from the trustee as provided
on EXHIBIT G hereto.
"CONTESTED CLAIM" shall have the meaning set forth in Section 13.4(c).
"CONTRACTS" shall have the meaning set forth in Section 5.8.
"SELLER DISCLOSURE SCHEDULE" shall have the meaning set forth in the
introduction to Article VI.
"CONTROLLED GROUP LIABILITY" shall mean any and all liabilities (i) under
Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and
4971 of the Code, (iv) as a result of a failure to comply with the continuation
coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the
Code or the group health plan requirements of Section 701 et seq. of the Code
and Section 701 et seq. of ERISA, and (v) under corresponding or similar
provisions of foreign laws or regulations.
"COVERED LEASES" shall have the meaning set forth in Section 11.2(d).
"DALLAS P. PRICE TRUST" shall mean that trust dated May 14, 1998 (as
amended) organized under the laws of the State of California, for which Dallas
P. Price is the sole trustee.
"▇▇▇▇▇ ▇. ▇▇▇▇▇ TRUST" shall mean that trust dated March 5, 1998 (as
amended) organized under the laws of the State of California, for which ▇▇▇▇▇ ▇.
▇▇▇▇▇ is the sole trustee.
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"DIRECTOR DESIGNATION AGREEMENT" shall mean the Amended and Restated
Director Designation Agreement, dated as of March 29, 1999, among NGP, NGOP and
▇▇▇▇▇ ▇. ▇▇▇▇▇.
"DISCLOSURE LETTER" shall mean the letter agreement, dated as of the date
hereof, by and among the parties hereto.
"EMPLOYEE" means, with respect to any such Person, each current, former,
or retired employee, officer, consultant, independent contractor, agent or
director of such Person.
"EMPLOYEE BENEFIT PLAN" shall mean any material employee benefit plan,
program, policy, practices, or other arrangement providing benefits to any
Employee of the Price Entities or any beneficiary or dependent thereof that is
sponsored or maintained by any of the Price Entities or to which any of the
Price Entities contributes or is obligated to contribute, whether or not
written, including without limitation any employee welfare benefit plan within
the meaning of Section 3(1) of ERISA, any employee pension benefit plan within
the meaning of Section 3(2) of ERISA (whether or not such plan is subject to
ERISA), and any material bonus, incentive, deferred compensation, vacation,
stock purchase, stock option, severance, employment, change of control or fringe
benefit plan, program or policy.
"EMPLOYMENT AGREEMENT" shall mean a contract, offer letter or agreement
(other than stock option agreements and other equity-based award agreements,
including performance share award agreements) of any of the Price Entities with
or addressed to any individual who is rendering or has rendered services thereto
as an employee or consultant pursuant to which any of the Price Entities has any
actual or contingent liability or obligation to provide compensation, severance
and/or benefits in consideration for past, present or future services.
"ENCUMBRANCE" shall mean any lien, pledge, hypothecation, security
interest, claim, charge, commitment, option, right of first offer, right of
first refusal, restriction on the right to transfer, dispose of or vote any
Equity Interests or receive dividends and/or distributions in respect of such
Equity Interests (other than a restriction on transferability imposed by
securities laws) or other encumbrance of any kind or nature whatsoever (whether
absolute or contingent).
"ENVIRONMENTAL CONSULTANT(S)" shall have the meaning set forth in Section
9.11.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in Section 5.12(a).
"ENVIRONMENTAL REPORTS" shall have the meaning set forth in Section 9.11.
"EQUITY INTEREST" of a Person shall mean any capital stock, membership
interest, partnership interest, joint venture interest and any other ownership
interest in that Person and any right or option to acquire such an interest.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules, regulations and class exemptions of the Department of
Labor thereunder.
"ERISA AFFILIATE" shall mean, with respect to any entity, trade or
business, any other entity, trade or business that is, or was at the relevant
time, a member of a group described in Section 414(b), (c), (m) or (o) of the
Code or Section 4001(b)(1) of ERISA that includes or
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included the first entity, trade or business, or that is, or was at the relevant
time, a member of the same "controlled group" as the first entity, trade or
business pursuant to Section 4001(a)(14) of ERISA; provided, however, that with
respect to the Price Entities, neither NGP nor any of its Subsidiaries,
including NGOP, shall be deemed to be an ERISA Affiliate for purposes of this
Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder.
"EXCLUDED TAXES" shall have the meaning set forth in Section 10.1(d).
"FINAL AWARD" shall have the meaning set forth in Section 13.5(d).
"FINANCING" shall mean the terms and conditions set forth in the term
sheet delivered to NGP signed by a responsible financial institution reflecting
the terms and conditions on which such institution would be willing to provide
Buyer (as defined in the Merger Agreement) sufficient funds to enable Buyer to
pay the Purchase Price (as defined in the Merger Agreement).
"FINANCIAL STATEMENTS" shall have the meaning set forth in Section 5.7(a).
"FMS FINANCIAL DATA" shall have the meaning set forth in Section 5.7(e).
"GEI" shall have the meaning set forth in the preamble.
"GEI ACQUISITION" shall have the meaning set forth in the recitals.
"GEI INTERESTS" shall mean all of the Equity Interests in GEI set forth on
EXHIBIT B hereto (including Equity Interests which GEI or any of its
Subsidiaries has committed or is obligated to issue (whether such commitment is
written or unwritten)).
"GEI TRANSFER CONSIDERATION" shall have the meaning set forth in Section
3.1.
"GOVERNMENTAL AUTHORITY" shall mean any United States or foreign
government, any state, local or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including the SEC or any other United
States or foreign government authority, agency, department, board, commission or
instrumentality of the United States, any state of the United States or any
political subdivision thereof or any foreign jurisdiction, and any court,
tribunal or arbitrator(s) of competent jurisdiction, and any United States or
foreign governmental or non-governmental self-regulatory organization, agency or
authority (including the NYSE and the NASD).
"GUARANTEES" shall have the meaning set forth in Section 9.8.
"GUARANTORS" shall have the meaning set forth in Section 9.8.
"HSR ACT" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
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"INCOME TAXES" shall mean any Tax imposed upon or measured by net income.
"INCURRED LOSSES" shall have the meaning set forth in Section 13.5(d).
"INDEBTEDNESS" shall mean (i) indebtedness for borrowed money, whether
secured or unsecured, (ii) obligations under conditional sale or other title
retention agreements relating to property purchased by such Person, (iii)
capitalized lease obligations, (iv) obligations under interest rate cap, swap,
collar or similar transaction or currency hedging transactions (valued at the
termination value thereof), and (v) guarantees of any such indebtedness of any
other Person (other than a wholly owned subsidiary).
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 13.4(a).
"INDEMNIFYING PARTIES" shall mean the Prices and the Trusts.
"INDEMNITY ESCROW ACCOUNT" shall mean the escrow account containing (i)
$15,000,000 in cash and (ii) the NGP Equity Interests of ▇▇▇▇▇ ▇▇▇▇▇, Dallas
Price and the Trusts.
"INJUNCTION" shall have the meaning set forth in Section 11.1(a).
"INSURANCE POLICIES" shall have the meaning set forth in Section 5.13.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in Section 5.16.
"IRS" shall mean the Internal Revenue Service.
"J.A.M.S." shall have the meaning set forth in Section 13.5(a).
"KNOWLEDGE" of the Price Group means actual knowledge after reasonable
inquiry by any of the Persons specified on EXHIBIT C.
"LEASE THRESHOLD AMOUNT" shall have the meaning set forth in the AGC Lease
Consent Letter.
"LEASED REAL PROPERTY" shall have the meaning set forth in Section
5.17(a).
"LEASES" shall have the meaning set forth in Section 5.17(b).
"LIEN" shall mean any mortgage, pledge, lien (statutory or otherwise),
encumbrance, deed of trust, charge or adverse claim, or a security interest of
any kind affecting title (including without limitation any conditional sale or
other title retention agreement or any lease in the nature thereof).
"LIQUOR LICENSES" shall have the meaning set forth in Section 5.11(a).
"LOSS" shall mean any and all claims, losses, liabilities, costs,
penalties, fines and amounts paid or expenses incurred (including reasonable
fees for attorneys, accountants, consultants and experts), damages, obligations
to third parties, expenditures, judgments, awards or settlements that are
imposed upon or otherwise incurred by the relevant party.
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"MERGER AGREEMENT" shall have the meaning set forth in the recitals.
"MULTIEMPLOYER PLAN" shall mean any "multiemployer plan" within the
meaning of Section 3(37) or Section 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" shall have the meaning set forth in Section
5.14(g).
"NASD" means the National Association of Securities Dealers, Inc., NASD
Regulation, Inc. and their respective Subsidiaries.
"NEW NGP" shall mean NGP L.L.C., a Delaware limited liability company.
"NGOP" shall have the meaning set forth in the recitals.
"NGOP LEASES" shall mean those leases for golf courses between NGOP and a
Price Entity.
"NGP" shall have the meaning set forth in the recitals.
"NGP EQUITY INTERESTS" shall mean the membership interests of New NGP
delivered to the AGC Sellers and the Transferred Entity Sellers pursuant to this
Agreement.
"NGP GROUND LEASE" shall mean a Lease as defined in the Merger Agreement.
"NGP LEASE CONSENT LETTER" shall mean the lease consent letter, dated as
of the date hereof, among the parties to the Merger Agreement.
"NGP MERGER" means the merger of NGP with and into NGP Merger Sub (as
defined in the Merger Agreement) in accordance with the terms of the Merger
Agreement.
"NGP PARTY" means National Golf Properties, Inc. and any employee,
officer, director or affiliate of National Golf Properties, Inc., including
(without limitation) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇.
"NONMATERIAL PROPERTY MATTERS" shall mean matters that (A) are not
substantial in character, amount or extent in relation to the applicable Owned
or Leased Real Property and (B) do not detract from the use, utility or value of
the applicable Owned or Leased Real Property or otherwise impair the present
business operations at such location (other than to a de minimis extent).
"NYSE" shall mean the New York Stock Exchange, Inc.
"ORGANIZATIONAL DOCUMENTS" shall mean the charter, bylaws, partnership
agreement, operating agreement or comparable constitutional or organizational
documents of any Person.
"OWNED REAL PROPERTY" shall have the meaning set forth in Section 5.17(c).
"PBGC" means the Pension Benefit Guaranty Corporation.
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"PENDING" with respect to a Proceeding shall mean filed with or brought by
a Governmental Authority or any other Person against a Person, for which written
notice has been delivered to such Person.
"PERMITS" shall have the meaning set forth in Section 5.11(a).
"PERMITTED LIENS" shall mean (i) liens for Taxes not yet due and payable
or which are being contested in good faith and by appropriate proceedings; (ii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like
liens arising in the ordinary course of business which are less than $10,000 in
amount (or for which reserves equal to the amount of the liens have been
established on the financial statement of the applicable Price Entity) and which
are being contested in good faith and by appropriate proceedings; or (iii) with
respect to real property interests, easements, rights-of-way, encroachments,
restrictions, conditions and other similar encumbrances incurred or suffered in
the ordinary course of business and which, individually or in the aggregate, are
Nonmaterial Property Matters.
"PERSON" shall mean any individual, corporation, company, partnership
(limited or general), limited liability company, joint venture, association,
trust or other business entity.
"PHASE I REPORTS" shall have the meaning set forth in Section 9.11.
"PLAN" shall mean any Employee Benefit Plan other than a Multiemployer
Plan.
"PLEDGES" shall have the meaning set forth in Section 8.9.
"PLEDGORS" shall have the meaning set forth in Section 8.9.
"PRE-CLOSING PERIOD" means any taxable period (or portion thereof) that
ends on or before the Closing Date, including the portion of the Straddle Period
up to and including the Closing Date based on a closing of the books at the
close of the Closing Date, provided, however, that with respect to AGC and any
Transferred Entity that is an S corporation, the Pre-Closing Period shall
exclude the Closing Date.
"PRICE DISCLOSURE SCHEDULE" shall mean the disclosure schedule delivered
by the Price Group to the Acquiror concurrently herewith.
"PRICE EMPLOYEES" shall have the meaning set forth in Section 8.3(b).
"PRICE ENTITIES" shall mean AGC, GEI, the Transferred Entities and their
respective Subsidiaries.
"PRICE GROUP" shall mean the Prices, the Trusts, AGC, the AGC Sellers, GEI
and the Transferred Entity Sellers.
"PRICE GROUP INDEMNITY CAP" shall mean $25 million.
"PRICE GROUP INDEMNITY THRESHOLD" shall mean $1 million; provided,
however, that the Price Group Indemnity Threshold with respect to Losses solely
relating to or arising from
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inaccuracies or breaches of any representation or warranty contained in Section
5.7(b) shall be $7.5 million.
"PRICE MATERIAL ADVERSE CHANGE" shall mean (a) any change, effect,
circumstance or event that materially adversely affects the business, assets,
liabilities, financial condition or results of operation of AGC, GEI and the
Transferred Entities, taken as a whole, excluding the effects of changes to the
extent related to (A) conditions in the United States or global economy or
financial or capital markets generally, (B) general changes in conditions
(including changes in legal, regulatory or business conditions or changes in
U.S. GAAP or weather conditions) in or otherwise affecting the other
participants in the industries or businesses in which AGC, GEI and the
Transferred Entities operate (in the case of (A) or (B), except to the extent
that such changes materially disproportionately affect AGC, GEI and the
Transferred Entities compared to the manner in which the changes affect the
other participants in the industries or businesses in which AGC, GEI and the
Transferred Entities operate), (C) this Agreement or the Merger Agreement, the
announcement or performance hereof or thereof and the transactions and
obligations contemplated hereby or thereby; (D) the failure of any Price
Entities to pay amounts due under the NGOP Leases, subject, in each case, to the
terms of the Rent Deferral Agreement, or (E) the lawsuits designated on Schedule
7.10(a) of the Price Disclosure Schedule as the "Excepted Lawsuits," and any
similar suits filed subsequent to the date hereof, against any member of the
Price Group and/or the Transferred Entities alleging violations of federal
securities laws and breaches of fiduciary duties in connection with sales of
securities of NGP or with respect to the transactions contemplated by the
Suspended Merger Agreement or hereby or (b) an impairment on the ability of any
member of the Price Group from completing the Closing pursuant to the terms
hereof and/or comply with their respective obligations hereunder in all material
respects, other than any change, effect, event or occurrence to the extent
arising from any breach by Acquiror of any of its respective representations,
warranties, covenants and agreements hereunder.
"PRICE MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
the business, assets, liabilities, financial condition or results of operations
of AGC, GEI and the Transferred Entities, taken as a whole, or on the ability of
any member of the Price Group to complete the Closing pursuant to the terms
hereof and/or comply with their respective obligations hereunder, other than any
change, effect, event or occurrence to the extent arising from any breach by the
Acquiror of its representations, warranties, covenants and agreements hereunder.
"PRICE PARTNERS AGREEMENT" shall mean the Shareholders and Partners
Agreement, dated as of July 2, 1998, by and between Dallas P. Price and ▇▇▇▇▇
▇. ▇▇▇▇▇.
"PRICES" shall have the meaning set forth in the preamble.
"PRICE PARTY" means ▇▇▇▇▇ ▇. ▇▇▇▇▇, Dallas P. Price, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, American Golf Corporation and its affiliates, Golf
Enterprises, Inc. and its affiliates, and the Oaks Christian School and its
affiliates.
"PROCEEDING" shall have the meaning set forth in Section 5.10(a).
"QUALIFIED PLANS" shall have the meaning set forth in Section 5.14(c).
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"REGULATORY DOCUMENTS" shall mean, with respect to a Person, all forms,
reports, registration statements, schedules and other documents filed, or
required to be filed, by such Person pursuant to the Securities Laws.
"RENT DEFERRAL AGREEMENT" shall mean that certain Rent Deferral
Agreement dated as of July 19, 2002 by and among American International Golf,
Inc., NGP, NGOP, AGC, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and the ▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust.
"REPRESENTATIVE" shall have the meaning set forth in Section 14.14.
"REPRESENTED SELLERS" shall have the meaning set forth in Section 14.14.
"REQUISITE REGULATORY APPROVALS" shall have the meaning set forth in
Section 11.2(c).
"RETURNS" means returns, reports and forms required to be filed with any
domestic or foreign Taxing Authority.
"S CORPORATION" shall have the meaning set forth in Section 1361 of the
Code.
"SEC" shall mean the Securities and Exchange Commission, and any successor
thereto.
"SECURITIES" shall mean any securities as defined in the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder.
"SECURITIES LAWS" shall mean the Securities Act, the Exchange Act, the
Investment Company Act, the Advisers Act, all applicable state "blue sky" laws,
all applicable foreign securities laws, and the rules and regulations
promulgated thereunder.
"SELLERS" shall mean the AGC Sellers and the Transferred Entity Sellers,
other than the Prices and the Trusts.
"STRADDLE PERIOD" means with respect to any Price Entity any taxable
period that, with respect to such Price Entity, includes but does not end on the
Closing Date.
"SUBSIDIARY" of a Person shall mean any other Person 50% or more of the
voting stock (or of any other form of other voting or controlling equity
interest in the case of a Person that is not a corporation) of which is
beneficially owned by the Person directly or indirectly through one or more
other Persons.
"SUSPENDED MERGER AGREEMENT" means the Amended and Restated Reorganization
Agreement between NGP, NGOP, AGC and certain affiliated entities dated as of the
date hereof and attached as EXHIBIT I to this Agreement.
"TAX" or "TAXES" means all taxes (whether federal, state, local or
foreign) based upon or measured by income and any other tax whatsoever,
including gross receipts, profits, sales, use, occupation, value added, ad
valorem, transfer, franchise, withholding, payroll, employment,
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excise, or property taxes, together with any interest thereon or penalties or
additions to tax imposed with respect thereto.
"TAX AUDIT" shall mean any assessment, audit, examination or other
administrative or court proceeding, suit, dispute or other claim by or before a
Taxing Authority.
"TAX BENEFIT" shall mean a Tax deduction, Tax credit or other Tax benefit.
"TAXING AUTHORITY" means any government authority having jurisdiction over
the assessment, determination, collection, or other imposition of Tax.
"THIRD PARTY CLAIM" shall have the meaning set forth in Section 13.4(a).
"TITLE COMPANY" shall have the meaning set forth in Section 9.10 hereof.
"TRANSACTION EXPENSES" shall have the meaning set forth in Section 5.8.
"TRANSFERRED INTEREST CONSIDERATION" shall have the meaning set forth in
Section 4.1.
"TRANSFERRED ENTITIES" shall mean (1) European Golf LLC, a Delaware
limited liability company; (2) European Golf Corporation, a Nevada corporation;
(3) Fairway Systems, Inc., a Colorado corporation; (4) American Golf of
Glendale, a California corporation; (5) RSJ Golf, Inc., a California
corporation; (6) Myreshan, Inc., an Ohio corporation and (7) Kansas 19th Hole
Corporation, a Kansas corporation.
"TRANSFERRED ENTITY SELLERS" shall mean all Persons identified in EXHIBIT
B hereto as owning any of the Transferred Interests.
"TRANSFERRED INTERESTS" shall mean all of the Equity Interests in the
Transferred Entities set forth on EXHIBIT B hereto (including Equity Interests
which the Transferred Entities and any of their Subsidiaries has committed or is
obligated to issue (whether such commitment is written or unwritten)).
"TRANSFERRED INTERESTS ACQUISITION" shall have the meaning set forth in
the recitals.
"TREASURY REGULATIONS" shall mean the Treasury regulations promulgated
under the Code.
"TRUSTS" shall mean, together, the ▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust and the Dallas
P. Price Trust.
"UK GAAP" shall mean generally accepted accounting principles as used in
the United Kingdom as in effect at the time any applicable financial statements
were or are prepared or any act requiring the application of U.K. GAAP was
performed.
"U.S. GAAP" shall mean generally accepted accounting principles as used in
the United States of America as in effect at the time any applicable financial
statements were or are prepared or any act requiring the application of GAAP was
or is performed.
"VOTING DEBT" shall have the meaning set forth in Section 5.5(c).
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"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
those terms are defined in Part I of Subtitle E of Title IV of ERISA.
ARTICLE II
THE AGC ACQUISITION
2.1 General. Upon the terms and subject to the conditions hereof, each
AGC Seller agrees to sell, transfer, assign, convey and deliver, free and clear
of any Encumbrances, to Acquiror at the Closing, and Acquiror agrees to acquire
and accept from each AGC Seller at the Closing, all of such AGC Seller's AGC
Interests in exchange for, in the aggregate for all AGC Sellers, (i) a 99.63%
beneficial ownership interest in the warrants to purchase the common membership
interests in AGC LLC set forth in such warrant, substantially in the form
attached hereto as EXHIBIT B-1 and (ii) New NGP Equity Interests equal to an
aggregate of 1.9925% of the New NGP Equity Interests outstanding on the Closing
Date (together, the "AGC TRANSFER CONSIDERATION"), less such amount of the AGC
Transfer Consideration allocable to the AGC Option Holders pursuant to this
Section 2.1. Each AGC Seller shall receive the portion of the AGC Transfer
Consideration set forth on EXHIBIT B-2 hereto. Notwithstanding anything to the
contrary, as of the Closing Date, each outstanding option (or commitment or
obligation to be granted an option) to purchase an AGC Interest (an "AGC
OPTION") pursuant to the 1994 Equity Participation Plan of AGC (the "1994 PLAN")
and any other plan of a Price Entity or any agreement between a Person and a
Price Entity (collectively, the "AGC OPTION PLANS"), shall, by virtue of the AGC
Acquisition and without any action on the part of the holder of an AGC Option
(an "AGC OPTION HOLDER"), be assumed by Acquiror or its assignee and converted
into an option to purchase, upon payment of the exercise price of such converted
option, the portion of the AGC Transfer Consideration allocated to such AGC
Option Holder, with the AGC Option Holder's allocated portion of the AGC
Transfer Consideration and the exercise price of the converted option determined
and adjusted, by the AGC Board of Directors or compensation committee, as
applicable, in accordance with the terms of the applicable AGC Option Plan and
any award agreement thereunder, including without limitation, Section 9.4(e) of
the 1994 Plan. The portion of the AGC Transfer Consideration allocated to each
AGC Option Holder and the exercise price of each converted option shall be set
forth on Exhibit B-2. The Price Entities shall take all action necessary,
including using reasonable best efforts to obtain consents from any AGC Option
Holder, to effectuate the foregoing, provided that AGC shall not make any
payment for such consent. If following the date hereof and prior to the Closing
Date, AGC and an AGC Option Holder enter into a written agreement that
unambiguously provides for the forfeiture and cancellation of such AGC Option
Holder's AGC Option, without requiring the payment of any consideration for such
forfeiture and cancellation, then such cancelled AGC Option shall not be assumed
and converted in accordance with this Section 2.1, and the AGC Transfer
Consideration allocated to such cancelled AGC Option shall be available to be
allocated to the AGC Sellers and the other AGC Option Holders in the same
proportion in which they are allocated AGC Transfer Consideration in accordance
with this Section 2.1.
2.2 Instruments of Transfer; Payment of AGC Transfer Consideration.
(I) At the Closing:
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(a) Each AGC Seller shall deliver, or shall cause to be delivered, the
following:
(i) stock certificates and stock powers duly endorsed in
blank, representing all of such AGC Seller's AGC Interests and duly
executed by such AGC Seller, transferring all right, title and
interest in, to and under such AGC Interests to Acquiror;
provided, however, that if any certificate evidencing such AGC
-------- -------
Interests shall be mutilated, lost, stolen or destroyed, such AGC
Seller shall deliver an affidavit of that fact and, if required
by Acquiror, shall post a bond of customary amount as indemnity
against any claim that may be made with respect to such
certificate;
(ii) a Closing Release in the form of EXHIBIT D hereto,
signed by such AGC Seller, and a Consent of Spouse in the form of
EXHIBIT H hereto, signed by the spouse of such AGC Seller (if
applicable); and
(iii) such additional instruments, documents or certificates
as may be reasonably requested by Acquiror.
(b) AGC shall deliver, or shall cause to be delivered, the following:
(i) the documents applicable to AGC and its Subsidiaries, or
necessary to complete the AGC Acquisition, required to be delivered
pursuant to Section 11.2; and
(ii) such additional instruments, documents or certificates as
may be reasonably requested by Acquiror.
(c) Acquiror shall deliver, or shall cause to be delivered, the
following:
(i) to the AGC Sellers, the AGC Transfer Consideration;
(ii) to the lenders of the indebtedness set forth on
Schedule 2.2(c) of the Price Disclosure Schedule, cash sufficient to
repay in full all such indebtedness held by such lenders (or any other
person who shall have repaid such indebtedness and become subrograted to
the rights of such lenders in respect thereof);
(iii) the documents applicable to Acquiror, or necessary to
complete the AGC Acquisition, required to be delivered pursuant to
Section 11.3;
(iv) such additional instruments, documents or certificates as
may be reasonably requested by the AGC Sellers; and
(v) AGC shall use its reasonable best efforts to deliver, or
cause to be delivered, to Acquiror originals (or where not available
true copies) of all Leases
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and any accompanying title policies, permits and surveys with respect to the
Leased Real Property and the Owned Real Property.
ARTICLE III
THE GEI ACQUISITION
3.1 General. Upon the terms and subject to the conditions hereof, each
of the ▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust and the Dallas P. Price Trust, as applicable, agrees
to sell, transfer, assign, convey and deliver, free and clear of any
Encumbrances, other than the Encumbrances referenced on Schedule 3.1 of the
Price Disclosure Schedule, to Acquiror at the Closing, and Acquiror agrees to
acquire and accept from the Trusts at the Closing, all of such Trusts' GEI
Interests in exchange for a cash payment of $10,000 (the "GEI TRANSFER
CONSIDERATION"). Each of the ▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust and the Dallas P. Price Trust
shall receive the portion of the $10,000 payment set forth on Schedule 3.1 of
the Price Disclosure Schedule
3.2 Instruments of Transfer; Payment of GEI Transfer Consideration.
At the Closing:
(a) The ▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust and the Dallas P. Price Trust shall
deliver, or shall cause to be delivered, the following:
(i) stock certificates and stock powers duly endorsed in
blank, representing all of such trusts' GEI Interests and duly executed
by ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as applicable, as trustee,
transferring all right, title and interest in, to and under such
GEI Interests to Acquiror; provided, however, that if any
-------- -------
certificate evidencing such GEI Interests shall be mutilated,
lost, stolen or destroyed, such Trust shall deliver an affidavit
of that fact and, if required by Acquiror, shall post a bond of
customary amount as indemnity against any claim that may be made
with respect to such certificate; and
(ii) a Closing Release in the form of EXHIBIT D hereto, signed
by ▇▇▇▇▇ ▇. ▇▇▇▇▇ and Dallas P. Price, as applicable, as trustee.
(b) GEI shall deliver, or shall cause to be delivered, the following:
(i) the documents applicable to GEI and its Subsidiaries, or
necessary to complete the GEI Acquisition, required to be delivered
pursuant to Section 11.2; and
(ii) such additional instruments, documents or certificates as
may be reasonably requested by Acquiror.
(c) Acquiror shall deliver, or shall cause to be delivered, the
following:
(i) to the ▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust and the Dallas P. Price Trust,
the GEI Transfer Consideration;
(ii) the documents necessary to complete the GEI Acquisition
required to be delivered pursuant to Section 11.3; and
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(iii) such additional instruments, documents or certificates as
may be reasonably requested by the Prices.
ARTICLE IV
THE TRANSFERRED INTERESTS ACQUISITION
4.1 General. Upon the terms and subject to the conditions hereof, each
Transferred Entity Seller agrees to sell, transfer, assign, convey and deliver,
free and clear of any Encumbrances, other than Encumbrances referenced on
Schedule 4.1 hereof, to Acquiror at the Closing and Acquiror agrees to acquire
and accept from each such Transferred Entity Seller at the Closing, all of such
Transferred Entity Seller's Transferred Interests in exchange for, in the
aggregate for all Transferred Entity Sellers, (i) a 0.37% beneficial ownership
interest in the warrants to purchase the common membership interests in AGC LLC
set forth in such warrant, substantially in the form attached hereto as EXHIBIT
B-1 and (ii) New NGP Equity Interests equal to an aggregate of 0.0075% of the
New NGP Equity Interests outstanding on the Closing Date (together, the
"TRANSFERRED INTEREST CONSIDERATION"), less such amount of the Transferred
Interest Consideration allocable to the Transferred Interest Option Holders
pursuant to this Section 4.1. Each Transferred Entity Seller shall receive the
portion of the Transferred Interest Consideration set forth on EXHIBIT B-2
hereto. Notwithstanding anything to the contrary, as of the Closing Date, each
outstanding option (including any commitment or obligation to be granted an
option) to purchase a Transferred Interest (a "TRANSFERRED INTEREST OPTION")
pursuant to an AGC Option Plan or otherwise, shall, by virtue of the Transferred
Interests Acquisition and without any action on the part of the holder of a
Transferred Interest Option (a "TRANSFERRED INTEREST OPTION HOLDER"), be assumed
by Acquiror or its assignee and converted into an option to purchase, upon
payment of the exercise price of such converted option, the portion of the
Transferred Interest Consideration allocated to such Transferred Interest Option
Holder, with the Transferred Interest Option Holder's allocated portion of the
Transferred Interest Consideration and the exercise price of the converted
option determined and adjusted, by the compensation committee or Board of
Directors of the appropriate Price Entity, in accordance with the terms of the
applicable plan or agreement granting such option, if any. The portion of the
Transferred Interest Consideration allocated to each Transferred Interest Option
Holder and the exercise price of each converted option shall be set forth on
Exhibit B-2. The Price Entities shall take all action necessary, including using
reasonable best efforts to obtain consents from any Transferred Interest Option
Holder, to effectuate the foregoing, provided that a Transferred Entity shall
not make any payment for such consent. If following the date hereof and prior to
the Closing Date, the relevant Transferred Entity and a Transferred Interest
Option Holder enter into a written agreement that unambiguously provides for the
forfeiture and cancellation of such Transferred Interest Option Holder's
Transferred Interest Option, without requiring the payment of any consideration
for such forfeiture and cancellation, then such cancelled Transferred Interest
Option shall not be assumed and converted in accordance with this Section 4.1,
and the Transferred Interest Consideration allocated to such cancelled
Transferred Interest Option shall be available to be allocated to the
Transferred Entity Sellers and the other Transferred Interest Option Holders in
the same proportion in which they are allocated Transferred Interest
Consideration in accordance with this Section 4.1. Notwithstanding anything to
the contrary contained herein, Acquiror may, in its sole discretion, at any time
prior to the Closing, elect not to acquire the Transferred Interests of any
Transferred Entity so designated by the Acquiror,
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provided that no such election shall reduce the aggregate consideration payable
to the Transferred Entity Sellers pursuant to this Agreement
4.2 Instruments of Transfer; Payment of Transferred Interest
Consideration.
(I) At the Closing:
(a) Each Transferred Entity Seller shall deliver, or shall
cause to be delivered, the following:
(i) stock certificates or certificates, if any,
evidencing equity interests in any Transferred Entity that is
not a corporation, and stock powers duly endorsed in blank,
representing all of such Transferred Entity Seller's Transferred
Interests and duly executed by such Transferred Entity Seller,
transferring all right, title and interest in, to and under the
Transferred Interests to Acquiror; provided, however, that if
-------- -------
any certificate evidencing such Transferred Interests shall be
mutilated, lost, stolen or destroyed, such Transferred Entity
Seller shall deliver an affidavit of that fact and, if required
by Acquiror, shall post a bond of customary amount as indemnity
against any claim that may be made with respect to such
certificate;
(ii) a Closing Release in the form of EXHIBIT D hereto,
signed by such Transferred Entity Seller, and a Consent of
Spouse, in the form of EXHIBIT H hereto, signed by the spouse of
such Transferred Entity Seller (if applicable);
(iii) the documents applicable to the Transferred
Entities and their respective Subsidiaries, or necessary to
complete the Transferred Interests Acquisition required to be
delivered pursuant to Section 11.2; and
(iv) such additional instruments, documents or
certificates as may be reasonably requested by Acquiror.
(b) Acquiror shall deliver, or shall cause to be delivered,
the following:
(i) to the Transferred Entity Sellers, the Transferred
Interest Consideration;
(ii) the documents required to be delivered pursuant to
Section 11.3; and
(iii) such additional instruments, documents or
certificates as may be reasonably requested by the Transferred
Entity Sellers.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PRICE GROUP
Each of the Prices, the Trusts and each Price Entity hereby represents and
warrants to the Acquiror as follows (it being agreed and understood (i) that AGC
is making representations and
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warranties only to the Acquiror and only with respect to AGC and its
Subsidiaries, (ii) that GEI is making representations and warranties only to the
Acquiror and only with respect to GEI and its Subsidiaries and (iii) that each
Transferred Entity is making representations and warranties only to the Acquiror
and only with respect to such Transferred Entity and its Subsidiaries)
(except as otherwise provided in this Article V, references in this Article V to
the Price Group, Transferred Entity Sellers and AGC Sellers shall not include
the Sellers):
5.1 Organization and Related Matters.
(a) AGC is a corporation duly organized, validly existing and in
good standing under the laws of the State of California. AGC has the requisite
corporate power and authority to own or lease all of its properties and assets
and to carry on the business it conducts, and is duly licensed or qualified to
do business in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned or leased
by it makes such licensing or qualification necessary.
(b) GEI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Kansas. GEI has the requisite
corporate power and authority to own or lease all of its properties and assets
and to carry on the business it conducts, and is duly licensed or qualified to
do business in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned or leased
by it makes such licensing or qualification necessary.
(c) Each of the Transferred Entities is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Schedule 5.1(c) of the Price Disclosure Schedule lists each of the
Transferred Entities and its jurisdiction of organization. Each of the
Transferred Entities is corporation, partnership or limited liability company as
set forth on Schedule 5.1(c) of the Price Disclosure Schedule. Each of the
Transferred Entities has the requisite corporate power and authority to own or
lease all of its properties and assets and to carry on the business it conducts,
and is duly licensed or qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary.
(d) A copy of the Organizational Documents of each of AGC, GEI
and each Transferred Entity and each of their respective Subsidiaries has been
delivered to the Acquiror prior to execution of this Agreement and each such
copy is a complete and correct copy of such instrument as in effect on the date
hereof.
5.2 Subsidiaries; Minority Interests.
(a) Schedule 5.2 of the Price Disclosure Schedule lists each
Subsidiary of AGC, GEI and the Transferred Entities, its jurisdiction of
incorporation or organization, its issued and outstanding Equity Interests and
the record holders of such Equity Interests as of the date hereof. Except as set
forth on Schedule 5.2 of the Price Disclosure Schedule, all of the Equity
Interests of each such Subsidiary of AGC, GEI and the Transferred Entities have
been validly issued and are fully paid and nonassessable and are owned directly
or indirectly by AGC, GEI or one of the Transferred Entities, as the case may
be, free and clear of all Encumbrances
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(other than with respect to such Encumbrances on Equity Interests that are owned
by a Person other than any of the Prices, the Trusts or the Price Entities).
(b) Except as set forth on Schedule 5.2 of the Price Disclosure
Schedule, (i) none of the Price Entities beneficially owns directly or
indirectly any Equity Interest in any Person (x) constituting more than 20% of
the outstanding Equity Interests in such Person or (y) that is subject to any
assessment, additional payment by such Price Entity, Encumbrance or any
shareholder, partnership or limited liability company agreement or any similar
agreement; (ii) there is no option, warrant, convertible or exchangeable
security, right, subscription, call, right of first refusal, legally binding
commitment, preemptive right or other agreement or right of any kind to purchase
or otherwise acquire (including by exchange or conversion) from any Price Entity
any Equity Interest listed on Schedule 5.2; and (iii) all Equity Interests set
forth on Schedule 5.2 of the Price Disclosure Schedule have been validly issued
and are fully paid and nonassessable and are owned directly or indirectly by
AGC, GEI or such Transferred Entity free and clear of all Encumbrances.
(c) Except as set forth on Schedule 5.2 of the Price Disclosure
Schedule, the Price Group has delivered or made available to the Acquiror each
shareholders' agreement, voting trust agreement, contract restricting or
otherwise relating to the voting, dividend rights or disposition of Equity
Interests and similar agreement to which any member of the Price Group or any of
the Price Entities is a party with respect to any Equity Interest held by any
Price Entity.
5.3 Authority; No Violation.
(a) Except as set forth on Schedule 5.3(a) of the Price
Disclosure Schedule, each member of the Price Group has full individual, limited
liability company, partnership, trust or corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. Except as set forth on Schedule
5.3(a), the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by all
requisite limited liability company, partnership, trust or corporate action on
the part of each member of the Price Group, and no other limited liability
company, partnership, trust, corporate or similar proceedings on the part of any
member of the Price Group are necessary to approve this Agreement or to
authorize or consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by each member of the Price Group
and (assuming the due authorization, execution and delivery of this Agreement by
the other parties hereto) constitutes a valid and binding obligation of each of
member of the Price Group enforceable against each of them in accordance with
its terms, except as limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditor's rights generally, and
(ii) general principles of equity, whether such enforceability is considered in
a proceeding in equity or at law, and to the discretion of the court before
which any proceeding therefore may be brought.
(b) Neither the execution and delivery of this Agreement by
any member of the Price Group, nor the consummation of any of the transactions
contemplated hereby to be performed by them, nor compliance by any of them with
any of the terms or provisions hereof or thereof, will (i) violate any provision
of the Organizational Documents of any member of the
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Price Group or any of the Price Entities or (ii) assuming that the consents and
approvals referred to in Section 5.4(a) and set forth on Schedule 5.4(a) of the
Price Disclosure Schedule are duly obtained, (x) violate, conflict with or
require any notice, filing, consent, waiver or approval under any Applicable Law
to which any member of the Price Group or any of the Price Entities or any of
their respective properties, contracts or assets are subject, or (y) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with or without notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate or result in a
right of acceleration of the performance required by, result in the creation of
any Encumbrance upon the Transferred Entity Interests of such Person or any Lien
upon the properties, contracts or assets of any of the Price Entities under, or
require any notice, approval, waiver or consent under, any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which such entity is a party, or by which any of the Price
Entities or any of their properties or assets, may be bound or affected, except,
in the case of (x) and (y), as would not, individually or in the aggregate, have
a Price Material Adverse Effect.
5.4 Consents and Approvals.
(a) Except for (x) the consents, approvals and notices as are
set forth on Schedule 5.4(a) of the Price Disclosure Schedule (the "AGC/GEI
CONSENTS"), (y) compliance with and filings under the Securities Laws as may be
required in connection with this Agreement and the transactions contemplated
hereby and (z) the applicable filings under the HSR Act or any foreign laws, if
required, no consents or approvals of or filings, declarations or registrations
with any Governmental Authority or any third party are necessary in connection
with (i) the execution and delivery by any member of the Price Group of this
Agreement and (ii) the consummation by any member of the Price Group of the
transactions contemplated hereby so as to permit each of the Price Entities to
continue their respective businesses and operations after the Closing Date in
all material respects as conducted on the date hereof, except in each case where
the failure to obtain such consent or approval would not have a Price Material
Adverse Effect.
(b) Further, Schedule 5.4(b) of the Price Disclosure Schedule
sets forth each obligation, liability, loan, pledge, guarantee or other
instrument of Indebtedness of any of the Price Entities, under which (i) the
Prices and/or (ii) any entity owned and controlled by the Prices and not
otherwise affiliated with any of the Price Entities are personally liable for
the repayment or the guarantee (including through the posting of collateral) of
all or part of such Indebtedness.
5.5 Authorized Capitalization; Ownership of Equity Interests.
(a) Schedule 5.5(a) of the Price Disclosure Schedule sets forth
all record Equity Interests holdings of any Person in each of AGC, GEI and each
of the Transferred Entities. There are no Equity Interests in any of the Price
Entities issued, reserved for issuance or outstanding other than those listed on
Schedule 5.5(a) of the Price Disclosure Schedule. All of the Equity Interests in
each of AGC, GEI and each of the Transferred Entities are, as of the date hereof
except as set forth in Schedule 5.5(a) of the Price Disclosure Schedule, and
will be, as of the Closing, duly authorized, validly issued, fully paid,
nonassessable and free of any preemptive rights and are not, as of the date
hereof, except as set forth in Schedule 5.5(a) of the Price
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Disclosure Schedule, and will not be, as of the Closing Date, except as set
forth in Schedule 5.5(a) of the Price Disclosure Schedule, subject to any
shareholders' agreement, voting trust agreement (or similar agreement) or other
contract restricting or otherwise relating to the voting, dividend rights or
disposition of such interests to which any Price Entity or such member of the
Price Group who owns such interests is a party.
(b) As of the date hereof, except as set forth in Schedule 5.5
(b) of the Price Disclosure Schedule, and at the Closing each member of the
Price Group owns beneficially and of record, and has good and valid title to,
all Equity Interests listed as owned by such party on Schedule 5.5(a) of the
Price Disclosure Schedule, free and clear of any Encumbrances. Upon delivery of
the stock certificates, or ▇▇▇▇ of sale, as applicable, of (i) each AGC Seller's
Equity Interest(s) in AGC, (ii) each of the Prices' Equity Interest(s) in GEI
and (iii) each Transferred Entity Seller's Equity Interest(s) in the Transferred
Entities, to the Acquiror, as provided in Articles II, III and IV, respectively,
good and valid title to the Equity Interests held by such party will pass to the
Acquiror, free and clear of all Encumbrances (other than, with respect to the
Transferred Interests, the Encumbrances set forth on Schedule 4.1).
(c) Schedule 5.5(c) of the Price Disclosure Schedule sets forth
each outstanding option, warrant, convertible or exchangeable security, right,
subscription, call, right of first refusal, legally binding commitment,
preemptive right or other agreement or right of any kind to purchase or
otherwise acquire (including by exchange or conversion) from any member of the
Price Group or any Price Entity any Equity Interest in any of AGC, GEI or any
of the Transferred Entities and for each identifies (i) the holder; (ii) the
date of grant; (iii) the number and type of Equity Interests into which it is
convertible, exchangeable or exercisable; (iv) the exercise price, if any; (v)
the vesting schedule or a statement that it is fully vested; and (vi) the
expiration date. As of the date hereof, except as set forth in Schedule 5.5(c)
of the Price Disclosure Schedule, there are, and at the Closing there will be,
no outstanding obligations of any of the Price Entities to redeem, repurchase or
otherwise acquire any of the Equity Interests in such Person or in any
Subsidiary of any of AGC, GEI or any of the Transferred Entities. As of the date
hereof, except as set forth in Schedule 5.5(c) of the Price Disclosure Schedule,
there are, and at the Closing there will be, no bonds, debentures, notes or
other Indebtedness generally having the right to vote (or convertible into, or
exchangeable for, Securities or limited liability company or partnership
interests having the right to vote) on any matters that holders of Equity
Interests in any of the Price Entities may consent or vote ("VOTING DEBT").
As of the date hereof, except as set forth in Schedule 5.5(c) of the Price
Disclosure Schedule, there are, and at the Closing there will be, no options,
warrants, rights, convertible or exchangeable Securities, "phantom" Equity
Interests (or similar "phantom" Securities), Equity Interest appreciation
rights, Equity Interest performance units, commitments, contracts, arrangements
or undertakings of any kind to which any member of the Price Group, any of the
Price Entities or any of their respective Subsidiaries is a party or by which
any of them is bound (i) obligating any of them to issue, deliver or sell, or
cause to be issued, delivered or sold, existing or additional Equity Interests
of any of the Price Entities, or any security convertible into or exercisable or
exchangeable for any of the foregoing or for Voting Debt, (ii) obligating any of
the Price Entities to issue, grant, extend or enter into any such option,
warrant, call, right, security commitment, contract, arrangement or undertaking,
iii) that give any Person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights accruing to holders
of the Equity Interests of any of the Price Entities or (iv) that give rise to
a right to receive any payment
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upon the execution of this Agreement or the consummation of the transactions
contemplated hereby.
5.6 Regulatory Documents.
(a) Since January 1, 1998, the Price Entities have timely filed
all forms, reports, registration statements, schedules and other documents,
together with any amendments required to be made with respect thereto, that were
required to be filed with any Governmental Authority and have timely paid in
full all fees and assessments due and payable in connection therewith, except in
each case with respect to matters contested in good faith by the appropriate
proceedings or for such failures to file or pay such amounts that would not,
individually or in the aggregate, have a Price Material Adverse Effect.
(b) As of their respective dates, the Regulatory Documents of the Price Entities
complied in all material respects with Applicable Law, and none of such
Regulatory Documents, as of their respective dates or as of such other dates so
required under Applicable Law, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, except as would not, individually or in
the aggregate, have a Price Material Adverse Effect.
5.7 Financial Statements.
(a) Schedule 5.7 of the Price Disclosure Schedule sets forth
true and correct copies of the audited balance sheets of AGC and each of its
Subsidiaries on a consolidated basis for the fiscal years ended December 31,
2001, 2000 and 1999 and the related audited consolidated statements of income,
changes in owners' equity and cash flows for each of the fiscal years ended
December 31, 2001, December 31, 2000 and December 31, 1999 (the balance sheets
referred to in this sentence, the "BALANCE SHEETS," and the Balance Sheets and
the other statements referred to in this sentence, together with the notes
thereto, the "FINANCIAL STATEMENTS"). The Balance Sheets are complete and
correct in all material respects and present fairly and accurately the
consolidated financial position of AGC and its Subsidiaries as of the date
thereof, and the Financial Statements (including the related notes thereto) are
complete and correct in all material respects and present fairly and accurately
the results of the operations and cash flows for the fiscal periods therein set
forth of AGC. Each of the Financial Statements has been prepared in accordance
with U.S. GAAP consistently applied during the periods involved.
(b) Except for (i) those liabilities reflected or reserved
against on the AGC Group Balance Sheet for the six-months ended June 30, 2002,
to the extent of such recorded liability or reserve, and (ii) those liabilities
listed on Schedule 5.7(b) hereto and (iii) those liabilities incurred in the
ordinary course of business consistent with past practice since June 30, 2002
and which are (x) liabilities incurred solely in the ordinary operation of the
golf courses operated by the Price Entities or liabilities that individually and
together with all other liabilities arising from the same transaction or series
of related transactions do not exceed $100,000 and (y) not liabilities to an
Affiliate of a Price Entity, none of the Price Entities has any liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due.
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(c) Except as set forth on Schedule 5.7(c) of the Price
Disclosure Schedule, since December 31, 2001, there has been no Price Material
Adverse Effect or any development or combination of developments that,
individually or in the aggregate, has had or is reasonably likely to have a
Price Material Adverse Effect.
(d) Schedule 5.7(d) of the Price Disclosure Schedule sets forth
true and correct copies of (i) the audited combined balance sheet of the AGC
Group (as defined therein) at December 31, 2001 and December 31, 2000 (such
balance sheets, the "AGC GROUP BALANCE SHEETS") and (ii) the audited combined
results of operations and changes in financial position or cash flows of the AGC
Group for the years ended December 31, 2001, December 31, 2000 and December 31,
1999 including in each case of clause (i) and (ii) the notes thereto (together,
the "AGC GROUP AUDITED GAAP FINANCIAL STATEMENTS"). The AGC Group Audited GAAP
Financial Statements fairly present in all material respects the combined
financial position of the AGC Group at the respective dates specified therein
and the combined results of operations and changes in financial position or cash
flows of the AGC Group for the respective periods specified therein (except as
may be indicated in the notes thereto), and were prepared in all material
respects in accordance with U.S. GAAP or UK GAAP, as applicable, consistently
applied. Schedule 5.7(d) also sets forth true and complete copies of the
combined unaudited balance sheet of the AGC Group at June 30, 2002 and the
combined unaudited results of operations and changes in financial position or
cash flows of the AGC Group for the six months ended June 30, 2002 (the "AGC
GROUP INTERIM FINANCIAL STATEMENTS"). The AGC Group Interim Financial Statements
fairly present in all material respects the combined financial position of the
AGC Group at June 30, 2002 and the combined results of operations and changes in
financial position or cash flows of the AGC Group for the six-month period then
ended and have been prepared in accordance with U.S. GAAP or UK GAAP, as
applicable, consistently applied (except as may be indicated in the notes
thereto and subject to year-end audit adjustments which are not expected to be
individually or in the aggregate material in amount or effect).
(e) Section 5.7(e) of the Price Disclosure Schedule contains
the interim management basis financial data relating to the AGC Group (other
than European Golf LLC, European Golf Corporation, Myreshan, Inc., RSJ Golf,
Inc. and Fairway Systems, Inc.) and the Associations for the six-month period
ended June 30, 2002 (the "FMS FINANCIAL DATA"). The FMS Financial Data
reports on a management basis, consistently applied, the financial
performance of the AGC Group (other than European Golf LLC, European Golf
Corporation, Myreshan, Inc., RSJ Golf, Inc. and Fairway Systems, Inc.), as
reported internally to the AGC's management.
5.8 Contracts. Schedule 5.8 of the Price Disclosure Schedule sets
forth a complete and accurate list or description of all written or oral
contracts, agreements, guarantees, leases (in each case, other than leases and
management contracts of real property, which are addressed in Section 5.17
below) and executory commitments in effect as of the date hereof to which any of
the Price Entities is a party or by which any of its properties or assets are
bound which: (i) contain obligations of the Price Entities that, if annualized,
would exceed $50,000 and that are not otherwise disclosed pursuant to clauses
(ii) through (vii) of this Section 5.8; (ii) involve payments based on profits
or revenues of the Price Entities; (iii) are employment, management, or
consulting agreements providing for annual total compensation in excess of
$75,000 or
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severance agreements or collective bargaining or union contracts; (iv) include
any noncompetition or nonsolicitation covenant or any exclusive dealing or
similar arrangement that limits the ability of any of the Price Entities to
compete (geographically or otherwise) in any line of business; (v) provide for
aggregate payments that exceed $50,000 to any of the Price Entities and that are
not otherwise disclosed pursuant to clauses (i) through (iv) and (vi) through
(vii) of this Section 5.8; (vi) represent Indebtedness for which any of the
Price Entities are liable, contingently or otherwise; or (vii) are otherwise
material to the businesses, properties or assets of any of the Price Entities
(all such contracts, agreements, guarantees, leases and commitments hereinafter
referred to collectively as the "CONTRACTS"). Schedule 5.8 also sets forth, (A)
an itemized list of all costs incurred by the Price Entities between January 1,
2002 and the date of this Agreement in connection with (x) the transactions
contemplated by this Agreement, the Reorganization Agreement and the Merger
Agreement and (y) the Restructuring Agreement and Limited Waiver dated as of
July 1, 2002 by and among AGC, Bank of America, N.A. and the purchasers set
forth therein, (the "TRANSACTION EXPENSES")and (B) a list of all contracts,
agreements or understandings to which the Price Entities are a party and which
obligate any of the Price Entities to pay any Transaction Expenses. Except as
set forth on Schedule 5.8 of the Price Disclosure Schedule, each of the
Contracts is a legal, valid and binding obligation of the applicable Price
Entity, and is in full force and effect and enforceable in accordance with its
terms. Except as set forth on Schedule 5.8 of the Price Disclosure Schedule, as
of the date hereof, none of the Price Entities has received written (or, to the
Knowledge of the Price Group, oral) notice of cancellation of or default under
or intent to cancel or call a default under any of the Contracts. Except as set
forth on Schedule 5.8 of the Price Disclosure Schedule, each of the Price
Entities has performed all material obligations required to be performed by it
to date under the Contracts, and assuming receipt of the AGC/GEI Consents, there
exists no event or condition which with or without notice or lapse of time or
both would be a breach or a default on the part of any of the Price Entities or,
to the Knowledge of the Price Entities, on the part of the other party to such
Contracts. True and complete copies of the Contracts, including all amendments
or modifications thereof and all side letters or other instruments affecting any
material obligations of any party thereunder, have been delivered or made
available to the Acquiror prior to the date hereof.
5.9 No Other Broker. Other than Banc of America Securities LLC, no
broker, finder or similar intermediary has acted for or on behalf of, or is
entitled to any broker's, finder's or similar fee or other commission from, any
member of the Price Group, any of the Price Entities or any of their respective
Affiliates in connection with this Agreement or the transactions contemplated
hereby. The Price Group has delivered to the Acquiror a true and correct copy of
all engagement letters with Banc of America Securities LLC, and all amendments
and modifications thereto, and such letters set forth all fee arrangements with
Banc of America Securities LLC with respect to the transactions contemplated
hereby.
5.10 Legal Proceedings.
(a) Except as set forth in Schedule 5.10(a) of the Price
Disclosure Schedule, there are no legal, administrative, arbitral or other
proceedings (including disciplinary proceedings), claims, suits, actions or
governmental or regulatory investigations of any nature (collectively,
"PROCEEDINGS") that are pending (or, to the Knowledge of any member of the Price
Group, threatened) against any of the Price Entities or any member of the Price
Group, or any of
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their respective properties, assets or businesses that would, individually or in
the aggregate, reasonably be expected to have a Price Material Adverse Effect or
that challenge the validity or propriety of the transactions contemplated by
this Agreement, and there is no injunction, order, judgment, decree or
regulatory restriction imposed upon any of the Price Entities or any member of
the Price Group or any of their respective properties, assets or businesses that
would, individually or in the aggregate, reasonably be expected to have a Price
Material Adverse Effect.
(b) Except as set forth in Schedule 5.10(b) of the Price
Disclosure Schedule, no member of the Price Group has any Proceedings or claims
that are pending or, to the Knowledge of the Price Group, threatened against any
of the Price Entities or any member of the Price Group, or any of their
respective properties, assets or businesses or that challenge the validity or
propriety of the transactions contemplated by this Agreement, and, to the
Knowledge of the Price Group, there is no basis on which any member of the Price
Group may bring any such Proceeding or claim.
5.11 Compliance with Applicable Law.
(a) Except as set forth on Schedule 5.11 of the Price Disclosure
Schedule, each of the Price Entities has the right to operate under all licenses
(including the liquor, beer and wine licenses disclosed on Schedule 5.11 of the
Price Disclosure Schedule whether or not held by the Price Entities (the "LIQUOR
LICENSES") unless otherwise indicated on Schedule 5.11), franchises, directed
exemptive orders, directed "no-action" positions, decrees, permits and
authorizations required under Applicable Law (collectively, "PERMITS") for the
lawful ownership, operation and use of its properties and assets and the conduct
of its businesses under and pursuant to Applicable Law, except for such Permits
which the failure to obtain or to have such right to use would not reasonably be
expected to have a Price Material Adverse Effect. Each of the Price Entities has
complied and is in compliance with each Permit, except such noncompliance as
would not reasonably be expected to have a Price Material Adverse Effect. None
of the Price Entities is in violation of any Applicable Law which violation,
individually or in the aggregate of all such violations, would reasonably be
expected to have a Price Material Adverse Effect, and except for such violation
none of the Price Entities has received written or, to the Knowledge of the
Price Group, oral notice asserting any such violation.
(b) Except as set forth on Schedule 5.11(b) of the Price Disclosure Schedule,
since December 31, 1998 no Governmental Authority has, to the Knowledge of any
of the member of the Price Group, initiated, and no Governmental Authority has
provided written, or, to the Knowledge of any member of the Price Group, oral
notice to any of them, of any threatened proceeding or investigation into the
business or operations of the Price Entities or any of their members, officers,
directors or employees in their capacity as such, which proceeding or
investigation if resolved unfavorably to the applicable Price Entity would,
individually or in the aggregate with all such proceedings or investigations,
reasonably be expected to have a Price Material Adverse Effect, and, to the
Knowledge of any member of the Price Group, no such proceedings or
investigations are contemplated. Except as set forth on Schedule 5.11(b) of the
Price Disclosure Schedule, there is no unresolved deficiency, violation or
exception claimed or asserted by any Governmental Authority with respect to any
examination of any of the Price Entities by such Governmental Authority which,
if finally resolved unfavorably to the applicable Price Entity, would,
individually or in the aggregate with all such deficiencies, violations and
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exceptions, reasonably be expected to have a Price Material Adverse Effect. As
of the date hereof, except as set forth on Schedule 5.11(b) of the Price
Disclosure Schedule, none of the Price Entities has received any written notice
from any Governmental Authority of any pending or threatened modification,
suspension or cancellation of a Liquor License or any proceeding related thereto
that has not been finally resolved.
5.12 Environmental Liability. Except as set forth on Schedule
5.12 of the Price Disclosure Schedule and except as would not, individually
or in the aggregate, have a Price Material Adverse Effect:
(a) there are no legal, administrative, arbitral or other
Proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations pending,
or, to the Knowledge of the Price Group, threatened, against any of the Price
Entities seeking to impose, or that, to the Knowledge of the Price Group, could
reasonably be expected to result in the imposition, on any of the Price Entities
of any liability or obligation arising under applicable common law or under any
applicable foreign, local, state or federal environmental statute, regulation or
ordinance including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (collectively,
"ENVIRONMENTAL LAWS");
(b) to the Knowledge of the Price Group, there is no reasonable
basis for any such Proceeding, claim, action or governmental investigation that
would impose any material liability or obligation;
(c) none of the Price Entities is subject to any order,
judgment, decree, letter or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any material liability or
obligation pursuant to any Environmental Law or any hazardous substances
regulated thereunder; and
(d) there is no condition at any property presently owned,
leased, subleased, licensed, managed, occupied or operated by the Price Entities
that is in violation of Environmental Laws, and to the Knowledge of the Price
Group, there is no condition at any property previously owned, leased,
subleased, licensed, managed, occupied or operated by the Price Entities that is
currently in violation of Environmental Laws, nor has any Price Entity received
any written, or to the Knowledge of the Price Group, oral, notice from any
person or entity of such violation or that it or its Subsidiaries or the
operation or condition of any property ever owned, leased, subleased, licensed,
managed, occupied, operated, held as collateral or held as a fiduciary by any of
them, are or were in violation of or otherwise are alleged to give rise to
potential liability under any Environmental Laws, including but not limited to
responsibility (or potential responsibility) for the cleanup or other
remediation of, or response action regarding, any pollutants, contaminants, or
hazardous or toxic wastes, chemicals, substances or materials at, on, beneath,
or originating from any such property.
5.13 Insurance. Schedule 5.13 of the Price Disclosure Schedule
includes a list of all material insurance policies maintained by any member of
the Price Group or the Price Entities with respect to which any of the Price
Entities is either an insured or a beneficiary (the "INSURANCE Policies").
Except as set forth on Schedule 5.13 of the Price Disclosure Schedule,
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each Insurance Policy of the Price Entities is in full force and effect
(assuming the other parties thereto are bound), all premiums due and payable
thereon have been paid and no member of the Price Group or any Price Entity has
received notice from any insurer or agent of any intent to cancel any such
insurance policy, other than those policies and bonds the absence or
cancellation of which would not, individually or in the aggregate, have a Price
Material Adverse Effect.
5.14 Employee Benefit Plans; ERISA.
(a) Schedule 5.14(a) includes a complete list of all Employee
Benefit Plans and all Employment Agreements.
(b) Except as set forth on Schedule 5.14(b) of the Price
Disclosure Schedule, with respect to each Plan, the Price Entities have
delivered or made available to the Acquiror a true, correct and complete copy
of: (i) each writing constituting a part of such Plan, including all plan
documents, employee communications, benefit schedules, trust agreements, and
insurance contracts and other funding vehicles; (ii) the most recent Annual
Report (Form 5500 Series) and accompanying schedule, if any; (iii) each final
summary plan description and any material modifications thereto, if any (in
each case, whether or not required to be furnished under ERISA); (iv) the most
recent annual financial report, if any; (v) the most recent actuarial report, if
any; and (vi) the most recent determination letter from the IRS, if any. The
Price Entities have delivered or made available to the Acquiror a true, correct
and complete copy of each Employment Agreement. Except as set forth on Schedule
5.14(b) or as specifically provided in the foregoing documents delivered or made
available to the Acquiror, there are no amendments to any Plan or Employment
Agreement that have been adopted or approved nor has any of the Price Entities
undertaken to make any such amendments or to adopt or approve any new Plan or
Employment Agreement.
(c) Schedule 5.14(c) identifies each Plan that is intended to be
a "qualified plan" within the meaning of Section 401(a) of the Code ("QUALIFIED
PLANS"). The IRS has issued a favorable determination letter with respect to
each Qualified Plan and the related trust that has not been revoked, and, to the
Knowledge of the Price Group, there are no existing circumstances and no events
have occurred that could adversely affect the qualified status of any Qualified
Plan or the related trust. Except as set forth on Schedule 5.14(c) of the Price
Disclosure Schedule, no trust funding any Plan is intended to meet the
requirements of Code Section 501(c)(9).
(d) All material contributions required to be made to any Plan
by Applicable Law or by any plan document or other contractual undertaking, and
all premiums due or payable with respect to insurance policies funding any Plan,
for any period through the date hereof have been timely made or paid in full or,
to the extent not required to be made or paid on or before the date hereof, have
been fully reflected on the Financial Statements. Except as set forth on
Schedule 5.14(d) of the Price Disclosure Schedule, each Employee Benefit Plan
that is an employee welfare benefit plan under Section 3(1) of ERISA either (i)
is funded through an insurance company contract and is not a "welfare benefit
fund" with the meaning of Section 419 of the Code or (ii) is unfunded.
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(e) Except as set forth on Schedule 5.14(e) of the Price
Disclosure Schedule, with respect to each Employee Benefit Plan, the Price
Entities have complied, and are now in compliance with all provisions of ERISA,
the Code and all laws and regulations applicable to such Employee Benefit Plans,
except as would not reasonably be expected to result in a Price Material Adverse
Effect. Each Plan has been administered in accordance with its terms, except as
would not reasonably be expected to result in a Price Material Adverse Effect.
There is not now, nor to the knowledge of the Price Group, do any circumstances
exist that could give rise to, any requirement for the posting of security with
respect to a Plan or the imposition of any lien on the assets of the Price
Entities under ERISA or the Code.
(f) No Plan is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code, and none of the Price Entities or any of their
subsidiaries, nor any of their respective ERISA Affiliates, has, within the past
six years, sponsored, maintained or contributed to, or been obligated to
sponsor, maintain or contribute to, any "employee pension benefit plan" (within
the meaning of Section 3(2) of ERISA) subject to Title IV or Section 302 of
ERISA or Section 412 or 4971 of the Code.
(g) Except as set forth on Schedule 5.14(g) of the Price
Disclosure Schedule: (i) No Employee Benefit Plan is a Multiemployer Plan or a
plan that has two or more contributing sponsors at least two of whom are not
under common control, within the meaning of Section 4063 of ERISA (a "MULTIPLE
EMPLOYER PLAN"); (ii) none of the Price Entities nor any of their respective
ERISA Affiliates has, at any time during the last six years, contributed to or
been obligated to contribute to any Multiemployer Plan or Multiple Employer
Plan; and (iii) none of the Price Entities nor any of their respective ERISA
Affiliates has incurred any Withdrawal Liability that has not been satisfied in
full. With respect to each Employee Benefit Plan that is a Multiemployer Plan:
(i) neither the Price Entities nor any of their ERISA Affiliates expect to
withdraw in a "complete withdrawal" or "partial withdrawal" within the meaning
of Section 4203 and 4205 of ERISA; and (ii) neither the Price Entities nor any
of their ERISA Affiliates has received any notification, nor has any reason to
believe, that any such Employee Benefit Plan is in reorganization, has been
terminated, is insolvent, or may reasonably be expected to be in reorganization,
to be insolvent, or to be terminated.
(h) Except as would not reasonably be expected to result in a
Price Material Adverse Effect, (i) there does not now exist, nor, to the
Knowledge of the Price Group, do any circumstances exist that could reasonably
be expected to result in, any Controlled Group Liability that would be a
liability of the Price Entities following the Closing and (ii) without limiting
the generality of the foregoing, neither the Price Entities nor any of their
respective ERISA Affiliates has engaged in any transaction described in Section
4069 or Section 4204 or 4212 of ERISA.
(i) Except as set forth on Schedule 5.14(i) of the Price
Disclosure Schedule, the Price Entities have no liability for life, health,
medical or other welfare benefits to former employees or beneficiaries or
dependents thereof, except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA and at no expense to the
Price Entities.
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(j) Except as set forth on Schedule 5.14(j) of the Price
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby (either alone or in
conjunction with any other event) will (i) result in any payment (including,
without limitation, severance, unemployment compensation, forgiveness of
indebtedness or otherwise) becoming due to any officer, director or employee of
the Price Entities under any Employee Benefit Plan or otherwise; (ii) increase
any benefits otherwise payable under any Employee Benefit Plan; (iii) result in
any acceleration of the time of payment or vesting of any amounts or benefits;
(iv) require the funding of any trust or other funding vehicle; or (v) limit or
prohibit the ability to amend, merge, terminate or receive a reversion of assets
from any Employee Benefit Plan, trust or other funding vehicle.
(k) None of the Price Entities nor any other person, including
any fiduciary, has engaged in any "prohibited transaction" (as defined in
Section 4975 of the Code or Section 406 of ERISA), which could subject any of
the Employee Benefit Plans or their related trusts, the Price Entities or any
person that the Price Entities has an obligation to indemnify, to any tax or
penalty imposed under Section 4975 of the Code or Section 502 of ERISA that
would reasonably be expected to result in a Price Material Adverse Effect.
(l) Except as set forth on Schedule 5.14(1) of the Price
Disclosure Schedule, there are no pending or threatened claims (other than
claims for benefits in the ordinary course), lawsuits or arbitrations which have
been asserted or instituted, and, to Knowledge of the Price Group, no set of
circumstances exists which may give rise to a claim or lawsuit, against the
Plans, any fiduciaries thereof with respect to their duties to the Plans or the
assets of any of the trusts under any of the Plans, in each case, which could
reasonably be expected to result in any material liability of the Price Entities
to the PBGC, the Department of Treasury, the Department of Labor, any
Multiemployer Plan, any Plan, any participant in a Plan, or any other party. The
Price Entities and each member of their respective business enterprises has
complied with the Worker Adjustment and Retraining Notification Act and all
similar state, local and foreign laws.
(m) All Employee Benefit Plans subject to the laws of any
jurisdiction outside of the United States (i) have been maintained in all
material respects in accordance with all applicable requirements, (ii) if they
are intended to qualify for special tax treatment meet all requirements for such
treatment, and (iii) if they are intended to be funded and/or book-reserved are
fully funded and/or book reserved, as appropriate, based upon reasonable
actuarial assumptions.
(n) Schedule 5.14(n) of the Price Disclosure Schedule sets forth
a correct and complete list of the total amounts due as of the date hereof, or
which may become payable in the future (whether actual or contingent or subject
to the satisfaction of vesting requirements, performance goals or other
conditions), under the terms of each long- or short-term incentive compensation,
severance, stay bonus or retention bonus plan, program, arrangement or agreement
of any of the Price Entities, other than (i) stock options granted under the AGC
Option Plans and the award agreements thereunder, (ii) severance required by
Applicable Law in jurisdictions outside of the United States, including pursuant
to agreements that provide for the payment of such required severance, and (iii)
severance under employment agreements entered into with employees in
jurisdictions outside of the United States.
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5.15 Labor Matters. Except as disclosed on Schedule 5.15 of the
Price Disclosure Schedule, no labor organization or group of Employees of the
Price Entities has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to the Knowledge of any member
of the Price Group, threatened to be brought or filed, with the National Labor
Relations Board or any other labor relations tribunal or authority. There are no
organizing activities, strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances, or other material labor disputes pending
or, to the Knowledge of any member of the Price Group, threatened against or
involving the Price Entities. Each of the Price Entities is in compliance with
all applicable laws and collective bargaining agreements respecting employment
and employment practices, terms and conditions of employment, wages and hours
and occupational safety and health, except for such noncompliance that would
not, individually or in the aggregate, have a Price Material Adverse Effect.
5.16 Technology and Intellectual Property. Except as disclosed on
Schedule 5.16 of the Price Disclosure Schedule, each of the Price Entities owns
or has a valid license to use all trade secrets, know-how, trademarks, service
marks and trade names (including any registrations or applications for
registration of any of the foregoing) (collectively, the "INTELLECTUAL
PROPERTY") necessary to carry on its business substantially as currently
conducted. No member of the Price Group or any of the Price Entities has
received any written (or, to the Knowledge of the Price Group, oral) notice of
infringement of, or conflict with, and, to the Knowledge of the Price Group,
there are no infringements of or conflicts with, the rights of others with
respect to the use of any Intellectual Property, except as would not,
individually or in the aggregate, reasonably be expected to have a Price
Material Adverse Effect.
5.17 Real Property.
(a) Schedule 5.17(a) of the Price Disclosure Schedule sets forth
a complete and accurate list and description of all real property leased,
subleased, operated, licensed, managed or otherwise occupied by the Price
Entities (collectively, the "LEASED REAL PROPERTY"), such description including,
for each Leased Real Property, an identification of the lease, license or
management agreement therefor, the title and date thereof, the names of the
lessor and lessee thereunder, and the address of the premises leased thereunder.
As of the date hereof, the Price Entities hold good and valid leasehold title to
the Leased Real Property, free and clear of any Liens, other than Permitted
Liens, and assuming that the AGC/GEI Consents are duly obtained, the Price
Entities will at Closing hold good and valid leasehold title to the Leased Real
Property, free and clear of any Liens, other than Permitted Liens.
(b) All of the leases, subleases, licenses, management and
consulting agreements governing the Leased Real Property (collectively, the
"LEASES") are valid and binding obligations of the applicable Price Entity and
are in full force and effect. Except as set forth on Schedule 5.17(b) of the
Price Disclosure Schedule and except for the NGOP Leases, subject to Nonmaterial
Property Matters, no Lease is subject to any Lien, sublease, assignment, license
or other agreement granting to any third party any interest in such Lease or any
right to the use or occupancy of any Leased Real Property. Except as set forth
on Schedule 5.17(b) of the Price Disclosure Schedule, subject to Nonmaterial
Property Matters, no NGOP Lease is subject to any Lien, sublease, assignment,
license or other agreement pursuant to which a Price
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Entity has granted to any third party any interest in such NGOP Lease or any
right to the use or occupancy of any NGOP Lease governing the Leased Real
Property. True and complete copies of the Leases have been made available to the
Acquiror, including all amendments or modifications thereof and all side letters
or other instruments affecting the obligations of any party thereunder. A Price
Entity, as lessee under each Lease, is now in possession of each Leased Real
Property. Except as set forth on Schedule 5.17(b) of the Price Disclosure
Schedule, there is no pending or, to the Knowledge of any Price Entity,
threatened, proceeding which might interfere with the use and quiet enjoyment of
any tenant under a Lease. Except as set forth on Schedule 5.17(b) of the Price
Disclosure Schedule, there are no outstanding defaults or circumstances which,
upon the giving of notice or passage of time or both, would constitute a default
or breach by either party under any Lease, except for such default or breaches
which would not reasonably be expected to have a Price Material Adverse Effect.
Except as set forth on Schedule 5.17(b) no written notice of termination or
written notice of material default has been received by any of the Price
Entities in respect of any of the Leases. Except as set forth on Schedule
5.17(b) of the Price Disclosure Schedule and except for Nonmaterial Property
Matters, the Price Entities have not assigned, mortgaged, pledged or otherwise
encumbered their interest under any Lease. Except as set forth on Schedule
5.17(b) of the Price Disclosure Schedule, the Price Entities have exercised
within the time prescribed in each Lease any option provided therein to extend
or renew the term thereof. Notwithstanding anything to the contrary contained in
this Section 5.17(b), no representation or warranty is made with respect to the
status of title held by any Person of property leased to a Price Entity or
contracted to a Price Entity for the management of such property, as distinct
from the leasehold and or fee title, as the case may be, held by a Price Entity
which is being represented to herein; provided that, subject to Nonmaterial
Property Matters to the actual knowledge of any Price Entity (without in each
case the requirement of inquiry) and except as set forth on Schedule 5.17(b) of
the Price Disclosure Schedule, the leasehold estate of the lessee under each
Leased Real Property is either (i) prior in right to any and all mortgages or
deeds of trust with respect to such property or (ii) the beneficiary of a valid
commercially reasonable non-disturbance agreement, executed by the holder of
any such prior Lien or other encumbrance, which has been recorded in the
appropriate land records (it being understood that a breach of this clause (ii)
with respect to any Leased Property will not be deemed to have occurred unless
it is reasonably likely that there would be a foreclosure on lessor's interest
in such property). As used herein, the term "lease" or "Lease" shall also
include licenses, management agreements, consulting agreements, maintenance
agreements and operating agreements, subleases, the term "lessor" shall also
include any sublessor, and the term "lessee" shall also include any sublessee.
(c) Schedule 5.17(c) of the Price Disclosure Schedule sets forth
a complete and accurate list and description of all real property and interests
in real property owned in fee by the Price Entities (collectively, the "OWNED
REAL PROPERTY"), such description including, for each parcel of Owned Real
Property, the legal description and address thereof, the use thereof, and the
nature of any improvements thereon. As of the date hereof, the Price Entities
hold good, valid and marketable fee title to the Owned Real Property, free and
clear of any Liens, mortgages, easements, rights-of-way, licenses, use
restrictions, claims, charges, options, title defects or encumbrances of any
nature whatsoever, except for the Permitted Liens, and the Price Entities will
at Closing hold good, valid and marketable fee title to the Owned Real Property,
free and clear of any Liens, mortgages, easements, rights-of-way, licenses, use
restrictions, claims, charges, options, title defects or encumbrances of any
nature whatsoever, other than
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Permitted Liens. Except for Nonmaterial Property Matters, no improvements
constituting a part of the Owned Real Property encroach on real property not
owned or leased by the Price Entities. Except for Nonmaterial Property Matters
and as would not reasonably be expected to have a Price Material Adverse Effect,
there is no pending or, to the Knowledge of any Price Entity, threatened actions
or proceedings by any governmental authority for assessment or collection of
taxes, impact fees or special assessments affecting any part of any Owned Real
Property, and no condemnation or eminent domain proceeding against any part of
any Owned Real Property is pending or, to the knowledge of any Price Entity,
threatened. Except as provided for in Schedule 5.17(c) of the Price Disclosure
Schedule and for Nonmaterial Property Matters, the Price Entities have granted
no presently outstanding options and have entered into no presently outstanding
contracts with others for the sale, mortgage, pledge, hypothecation, assignment,
sublease, lease or other transfer of all or any part of the Owned Real Property.
No person or entity has any right or option to acquire, or right of first
refusal with respect to, the Price Entities' interests in the Owned Real
Property or any part thereof. Except for Nonmaterial Property Matters, there are
no unrecorded easements or encroachments affecting any portion of the Owned Real
Property.
(d) As of the date hereof, except as set forth on Schedule
5.17(d) of the Price Disclosure Schedules, to the actual knowledge of each Price
Entity (without in each case the requirement of inquiry), each Owned Real
Property and each Leased Real Property has access to (with no representation
being made in this Agreement as to the future water service) water to service
the operation of the golf course located thereon consistent with past practice.
No Price Entity has received written notice of any current event or condition
which would reasonably be expected to have a material adverse effect on the
supply of water to any Owned Real Property or Leased Real Property.
5.18 Asset Sales. Except as set forth on Schedule 5.18 of the Price
Disclosure Schedule, since December 31, 2000, none of the Price Entities has
conveyed, pledged, hypothecated, sold or otherwise transferred (a) a material
amount of its properties or assets for consideration less than the fair market
value of such assets at the time of such conveyance, pledge, hypothecation, sale
or other transfer or (b) its interest in a golf course. As of the date hereof,
there are no pending, or to the Knowledge of the Price Entities, threatened
indemnification claim against the Price Entities, in each case in excess of
$50,000 in amount, pursuant to any agreement by which any such sale has been
effected.
5.19 Distributions.
For purposes of this Section 5.19, references to Affiliates of the
Prices shall include each sibling, parent or descendant of the Prices, and any
spouse of any such sibling or descendant, and any trust or other entity in which
any of the foregoing has a substantial beneficial interest.
(a) Except as set forth on Schedule 5.19 of the Price Disclosure
Schedule, from December 31, 2000 through June 29, 2002, none of the Price
Entities has, directly or indirectly, distributed cash or any other asset or
made any payment to any Person (including through the cancellation of
indebtedness or forgiveness of liabilities) other than to a Person who is not an
Affiliate of the Prices or of any of the Price Entities in the ordinary course
of business and on an arms-length basis.
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(b) Except as set forth on Schedule 5.19 of the Price Disclosure
Schedule, since June 30, 2002, none of the Price Entities has, directly or
indirectly, distributed cash or any other asset or made any payment to any
Person (including through the cancellation of indebtedness or forgiveness of
liabilities) other than to a Person who is not an Affiliate of the Prices or of
any of the Price Entities in the ordinary course of business and on an
arm's-length basis.
(c) To the Knowledge of the Price Entities, there is no
encumbrance or restriction on the ability of any Price Entity to cause any
Subsidiary of such Price Entity to (i) (a)pay dividends pro rata or make any
other distributions pro rata with respect to any capital stock of such
Subsidiary or any other interest or participation in, or measured by, such
Subsidiary's profits, or (b) pay any Indebtedness owed by such Subsidiary to
such Price Entity or any of such Price Entity's other Subsidiaries, (ii) make
loans or advances to such Price Entity or any of such Price Entity's
Subsidiaries or (iii) transfer any of its properties or assets pro rata to such
Price Entity or any of such Price Entity's Subsidiaries.
5.20 Filing Documents. None of the information regarding any member
of the Price Group or any of the Price Entities supplied or to be supplied
by such member of the Price Group or such Price Entity on or prior to the
Closing Date included in any documents to be filed with any Governmental
Authority in connection with the transactions contemplated by this Agreement or
the Merger Agreement contains at the Closing, or at the respective times such
documents were or are filed with any Governmental Authority, any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
5.21 Transactions with Affiliates.
For purposes of Sections 5.21(a) and 5.21(b) references to
Affiliates of the Prices shall include each sibling, parent or descendant of the
Prices, and any spouse of any such sibling or descendant, and any trust or other
entity in which any of the foregoing has a substantial beneficial interest.
(a) Except as set forth in Schedule 5.21(a) of the Price
Disclosure Schedule, (i) from December 31, 2000 through June 29, 2002, none
of the Price Entities has entered into or agreed to enter into any transaction,
contract, agreement, understanding or arrangement with any Affiliate of such
Price Entity or the Prices that is not a Price Entity and (ii) since June 30,
2002 none of the Price Entities has entered into or agreed to enter into any
transaction, contract, agreement, understanding or arrangement with any
Affiliate of such Price Entity or the Prices that is not a Price Entity.
(b) Except for this Agreement, the Merger Agreement and the
other agreements contemplated to be entered into in connection with the
transactions contemplated hereby and thereby, and except as set forth in
Schedule 5.21(b) of the Price Disclosure Schedule, no material contract,
agreement, understanding or arrangement between any of the Prices (or any
Affiliate of the Prices that is not a Price Entity) and the Transferred Entity
Sellers, on the one hand, and any of the Price Entities, on the other hand, will
continue in effect subsequent to the Closing Date. Except as set forth on
Schedule 5.21(b), after the Closing, none of the Prices (or
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any Affiliate of the Prices that is not a Price Entity) and the Transferred
Entity Sellers will have any interest in any property (real or personal,
tangible or intangible) or contract, agreement, understanding or arrangement of
the Price Entities used in or pertaining to the business of the Price Entities,
other than pursuant to ownership of the NGP Equity Interests. Except as provided
on Schedule 5.21(b) of the Price Disclosure Schedule, from and after the Closing
Date, none of the Prices or the Transferred Entity Sellers or any Affiliate of
the Prices that is not a Price Entity will provide any services to the Price
Entities.
(c) Except for this Agreement, the Merger Agreement and the
other agreements contemplated to be entered into in connection with the
transactions contemplated hereby and thereby, and except as set forth in
Schedule 5.21(c) of the Price Disclosure Schedule, as of the Closing Date none
of the Prices nor any of their respective Affiliates, on the one hand, will be
owed any obligation or liability by NGP, NGOP or any of the Price Entities or
their respective Affiliates, on the other hand. In addition, no Affiliates of
the Prices (which for the purposes of this sentence shall include each sibling,
parent or descendant of the Prices, and any spouse of any such sibling or
descendant) receives any wages or remuneration or other benefits from any of
Price Entities except for wages or remuneration in the annual amount set forth
on Schedule 5.21(c) and other benefits, commensurate with those of similarly
situated employees who are not Affiliates.
5.22 Absence of Certain Changes. Except as set forth in Schedule
5.22 of the Price Disclosure Schedule, since December 31, 2000, (x) the
Price Entities have conducted their respective businesses in the ordinary
course, consistent with past practice, and (y) there has not been (i) any
material change by the Price Entities in accounting principles, practices or
methods other than as required by U.S. GAAP or Applicable Law, (ii) any
declaration, setting aside or payment of any dividend or other distribution with
respect to the Equity Interests in any of the Price Entities (other than wholly
to another Price Entity) or any other action or event that would have required
the consent of the Acquiror pursuant to Sections 8.1(b), (c), (d) (with respect
to clause (iii) thereof, only with respect to sales and dispositions in excess
of $100,000 individually and material pledges and Encumbrances and with respect
to clause (iv)(A) thereof, only with respect to settlements in excess of
$100,000), (g), (h) (with respect to Affiliates, officers and directors and with
respect to increases in compensation in excess of $25,000 only), (i) (only with
respect to any amendment of an Employee Benefit Plan sponsored or maintained by
a Price Entity that resulted in the enhancement of benefits to employees
participating in, or the increase of costs to a Price Entity under, such plan),
(j), (k) (only with respect to Affiliates that are not Price Entities), (l),
(n), (p), (q), and (r) (only with respect to the foregoing), (iii) forgiveness
of any Indebtedness or liabilities owed to any of the Price Entities or (iv)
except as reflected on the Financial Statements of the applicable Price Entity
relating to the applicable period, any event or events that, individually or in
the aggregate, constitute a Price Material Adverse Change.
5.23 Capital Expenditure. Schedule 5.23 of the Price Disclosure
Schedule sets forth a list, which is true and correct in all material
respects, of capital expenditure paid, incurred or committed or agreed to be
paid, incurred or committed by AGC, GEI or the Transferred Entities and their
Subsidiaries between April 25, 2002 and September 10, 2002.
5.24 State Takeover Statutes. Each of AGC, GEI and each of the
Transferred Entities has taken all steps necessary to exempt (or continue
the exemption of) the transactions
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contemplated hereby from, and challenge the validity of, any applicable state
takeover law, as now or hereafter in effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE AGC SELLERS AND THE TRANSFERRED ENTITY
SELLERS
Except as disclosed in the Seller Disclosure Schedule delivered to the
Acquiror concurrently herewith (the "SELLER DISCLOSURE SCHEDULE"), each Seller
hereby represents and warrants to the Acquiror as follows:
6.1 Authority; No Violation.
(a) Except as set forth on Schedule 6.1, the Seller has full
individual, limited liability company, partnership, trust or corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by all
requisite limited liability company, partnership, trust or corporate action on
the part of the Seller, and no other limited liability company, partnership,
trust, corporate or similar proceedings on the part of the Seller are necessary
to approve this Agreement or to authorize or consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Seller and (assuming the due authorization, execution and
delivery of this Agreement by the other parties hereto) constitutes a valid and
binding obligation of such Seller enforceable against each of the Seller in
accordance with its terms.
(b) Except as set forth on Schedule 6.1, neither the execution
and delivery of this Agreement by the Seller, nor the consummation of any
of the transactions contemplated hereby to be performed by it, nor compliance by
it with any of the terms or provisions hereof or thereof, will, as applicable,
(i) violate any provision of the Organizational Documents, if any, of the
Seller, (ii) violate, conflict with or require any notice, filing, consent,
waiver or approval under any Applicable Law to which the Seller is subject, or
(iii) result in the creation of any Encumbrance upon the Seller's Equity
Interests.
6.2 Consents and Approvals. Except as set forth on Schedule 6.2, no
consents or approvals of or filings, declarations or registrations with any
Governmental Authority or any third party are necessary in connection with (i)
the execution and delivery by the Seller of this Agreement, and (ii) the
consummation by the Seller of the transactions contemplated hereby.
6.3 Ownership of Equity Interests.
(a) As of the date hereof, except as set forth in Schedule
6.3(a) of the Seller Disclosure Schedule, and at the Closing, the Seller
owns beneficially and of record, and has good and valid title to, all Equity
Interests in AGC and/or the Transferred
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Entities listed as owned by such party on Schedule 6.3(a) of the Seller
Disclosure Schedule, free and clear of any Encumbrances. Except as set forth on
Schedule 6.3(a), upon delivery of the stock certificates or ▇▇▇▇ of sale, as
applicable, of each Seller's Equity Interests in AGC and/or the Transferred
Entities to the Acquiror, as provided in Sections 4.2 and 6.2, respectively,
good and valid title to the Equity Interests held by such party will pass to
Acquiror, free and clear of all Encumbrances.
(b) Except as set forth on Schedule 6.3(b) of the Seller
Disclosure Schedule, there is no outstanding option, warrant, convertible
or exchangeable security, right, subscription, call, right of first refusal,
legally binding commitment, preemptive right or other agreement or right of any
kind to purchase or otherwise acquire (including by exchange or conversion) from
the Seller any Equity Interest in AGC and/or any of the Transferred Entities
owned by the Seller, and Schedule 6.3(b) identifies with respect to each (i) the
holder; (ii) the date of grant; (iii) the number and type of Equity Interests
into which it is convertible, exchangeable or exercisable; (iv) the exercise
price, if any; (v) the vesting schedule or a statement that it is fully vested;
and (vi) the expiration date. As of the date hereof, except as set forth in
Schedule 6.3(b) of the Seller Disclosure Schedule, there are, and at the Closing
there will be, no outstanding obligations of the Seller to redeem, repurchase or
otherwise acquire any of the Equity Interests in AGC and/or any of the
Transferred Entities. As of the date hereof, except as set forth in Schedule
6.3(b) of the Seller Disclosure Schedule, there are, and at the Closing there
will be, no options, warrants, rights, convertible or exchangeable Securities,
"phantom" Equity Interests (or similar "phantom" Securities), Equity Interest
appreciation rights, Equity Interest performance units, commitments, contracts,
arrangements or undertakings of any kind to which the Seller is a party or by
which any of them is bound (i) obligating any of them to issue, deliver or sell,
or cause to be issued, delivered or sold, existing or additional Equity
Interests of AGC and/or the Transferred Entities, or any security convertible
into or exercisable or exchangeable for any of the foregoing or for Voting Debt
or (ii) obligating the Seller to issue, grant, extend or enter into any such
option, warrant, call, right, security commitment, contract, arrangement or
undertaking.
6.4 Corporate Existence and Power. If not an individual, the Seller
is duly organized, validly existing and in good standing under the laws of
the state of its organization and has all corporate, trust and other powers
required to carry out its responsibilities under this Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
Except as set forth in the written disclosure schedule delivered
concurrently herewith to the Price Group by the Acquiror (the "ACQUIROR
SCHEDULE"), the Acquiror represents and warrants to the Price Group as follows:
7.1 Organization and Related Matters. The Acquiror is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the organizational power and authority to carry on its
business as it is now being conducted and as is contemplated to be conducted
after giving effect to the Acquisition Transactions, and to own, lease and
operate all of its properties and assets. Acquiror is (or, on the Closing Date,
will be) taxable as a corporation for United States federal tax purposes, and
has no present plan or intention to change its tax status as a corporation,
including, without limitation, by electing to be taxable as a partnership for
United States federal income tax purposes.
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7.2 Authority; No Violation.
(a) The Acquiror has organizational power and authority to
execute and deliver this Agreement and to consummate the transactions to be
performed by it as contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby to be
performed by the Acquiror have been duly authorized by all necessary action on
its part, and no other organizational action on its part is necessary to approve
this Agreement or authorize or consummate the transactions contemplated hereby
(other than the consents and approvals listed on Schedule 7.3 of the Acquiror
Disclosure Schedule). This Agreement has been duly and validly executed and
delivered by the Acquiror and (assuming the due authorization, execution and
delivery of this Agreement by each of the other parties hereto) constitutes a
valid and binding obligation of the Acquiror enforceable against it in
accordance with its terms except as limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditor's rights
generally, and (ii) general principles of equity, whether such enforceability is
considered in a proceeding in equity or at law, and to the discretion of the
court before which any proceeding therefore may be brought.
(b) Neither the execution and delivery of this Agreement by the
Acquiror nor the consummation by it of the transactions contemplated hereby
to be performed by it, nor compliance by the Acquiror with any of the terms or
provisions hereof, will (i) violate any provision of the Organizational Document
of the Acquiror, or (ii) assuming that the consents and approvals referred to in
Schedule 7.3 of the Acquiror Disclosure Schedule are duly obtained, violate,
conflict with or require any notice, filing, consent or approval under any
Applicable Law to which the Acquiror or any of its Subsidiaries or any of its
properties, contracts or assets are subject.
7.3 Consents and Approvals. Except for (i) the consents, approvals
and notices as are set forth in Schedule 7.3 hereto, (ii) the applicable
filings under the HSR Act, if required, (iii) compliance with and filings under
the Securities Laws as may be required in connection with this Agreement and the
transactions contemplated hereby, (iv) those consents, approvals and notes that
may be required solely by reason of the participation of any member of the Price
Group or the Price Entities (as opposed to any other third party) in the
transactions contemplated hereby and (v) those consents, approvals, notices,
filings or registrations the failure of which to be obtained or made would not
be reasonably likely, individually or in the aggregate, to have an Acquiror
Material Adverse Effect, no consents or approvals of or filings or registrations
with any Governmental Authority or any third party are necessary in connection
with (i) the execution and delivery by the Acquiror of this Agreement and (ii)
the consummation by the Acquiror of the transactions to be performed by them as
contemplated hereby.
7.4 Investment Purpose. Acquiror is acquiring the AGC Interests, the
GEI Interests and the Transferred Entity Interests, for the purpose of
investment and not with a view to, or for offer or sale in connection with, any
public distribution thereof in violation of the registration requirements of the
Securities Act. The Acquiror understands that the AGC Interests, the GEI
Interests and the Transferred Entity Interests have not been, and will not be,
registered under the Securities Act by reason of a specific exemption therefrom,
and that any such exemption will depend, among other things, upon the bona fide
nature of the investment intent and the accuracy of the Acquiror's
representations as expressed in this Agreement, and that the AGC Interests and
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the Transferred Entity Interests cannot be resold by the Acquiror, unless they
are registered under the Securities Act or unless an exemption from registration
is available.
7.5 Intention to transfer. As of the date hereof and as of the
Closing Date, Acquiror has no present plan or intention to transfer any of
the assets it receives in the AGC Acquisition, the GEI Acquisition or the
Transferred Interests Acquisition to Acquiror's owners, the NGP Surviving
Company, the NGOP Surviving Partnership, NGP, NGOP or any of their respective
Affiliates or related parties.
7.6 Ownership of New NGP. Acquiror acquired the NGP Equity Interests
from Acquiror's members as a capital contribution by such members in exchange
for interests in Acquiror. Such members of Acquiror acquired such interests in
New NGP in exchange for a cash contribution to New NGP. No entity directly
owns, or will at Closing directly own, a more than fifty percent capital or
profits interest in New NGP, and no such entity has any present plan or
intention to acquire a more than fifty percent direct capital or profits
interest in New NGP.
7.7 Ownership of Acquiror. None of Buyer, NGP Merger Sub, NGOP
Merger Sub, NGP or NGOP nor any corporation, partnership, estate or trust
in which any such entity owns an equity interest owns an equity interest in
Acquiror, and Acquiror has no present plan or intention to sell an equity
interest in Acquiror to any such entity.
7.8 No Broker. No broker, finder or similar intermediary has acted
for or on behalf of, or is entitled to any broker's, finder's or similar
fee or other commission from Acquiror in connection with this Agreement or the
transactions contemplated hereby.
ARTICLE VIII
COVENANTS
8.1 Conduct of Business by the Price Entities. For purposes of this
Section 8.1, references to Affiliates in clauses (j), (l) and (p) shall be
deemed to include each sibling, parent or descendent of the Prices, and any
spouse of any such sibling or descendant, and any trust or any other entity in
which any of the foregoing has a substantial beneficial interest. Except as (i)
otherwise contemplated by this Agreement, including as set forth on Schedule 8.1
with respect to each clause below, (ii) required by Applicable Law or (iii)
subject to Applicable Law, consented to in writing by Acquiror (which consent
shall be deemed to have been given in respect of any specific consent if the
Acquiror does not respond to a written request for such consent within 3
Business Days of such request) after the date hereof (and, in connection with
clause (l) only, after consultation with NGP in connection with the exercise of
its rights under the comparable provision of Suspended Merger Agreement) and
prior to the Closing, the Price Entities shall, and the Price Group shall cause
the Price Entities to:
(a) conduct their respective businesses in the ordinary course
of business; provided, however, that no action by any Price Entity that is
expressly permitted by any other provision of this Article VIII shall be deemed
a breach of this Section 8.1(a) unless such action would constitute a breach of
one or more other such provisions;
(b) not (i) amend or propose to amend their respective
Organizational Documents or the Suspended Merger Agreement, (ii) split, combine
or reclassify their
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outstanding Equity Interests or (iii) declare, set aside or pay any dividend or
distribution payable in cash, stock, property or otherwise, provided that a
Price Entity that is treated as an S corporation or a partnership, or that is
disregarded as an entity, in each case for federal income Tax purposes, may make
distributions (after consultation with the Acquiror regarding the timing and
amount of any such distribution) to its shareholders, partners or members, as
the case may be, to enable such shareholders, partners or members to pay any
Income Taxes attributable to their interest in the applicable Price Entity to
the extent (A) such Price Entity has positive taxable income during the period
which begins on March 29, 2002 and ends on the last day of the month immediately
preceding the proposed distribution and (B) such Price Entity has adequate
excess cash flow (which the parties acknowledge and agree will not be the case
so long any amounts due to NGP or any of its Affiliates pursuant to any of the
Leases have not been paid);
(c) not issue, sell, pledge or dispose of, or agree to issue,
sell, pledge or dispose of, any additional Equity Interests in any of the
Price Entities, or any options, warrants or rights of any kind to acquire any of
their Equity Interests or any debt securities that are convertible into or
exchangeable for such Equity Interests in any of the Price Entities;
(d) not (i) voluntarily incur or become contingently liable with
respect to any Indebtedness for borrowed money in excess of $10,000
individually or $50,000 in the aggregate, (ii) redeem, purchase, acquire or
offer to purchase or acquire any shares of its Equity Interests or any options,
warrants or rights to acquire any of its Equity Interests or any security
convertible into or exchangeable for Equity Interests, (iii) sell, pledge,
dispose of or voluntarily encumber any assets or businesses other than pledges
or encumbrances pursuant to existing credit facilities and Permitted Liens
arising in the ordinary course of business or (iv) settle any claim, action or
proceeding involving (A) any liability for money damages in excess of the sum of
(x) the amount reserved for on such Person's most recent Financial Statements
delivered to Acquiror prior to the date of this Agreement in respect of such
claim, action or proceeding and (y) the amount fully recovered from insurers or
(B) any material restrictions on any of its operations, or waive any right with
respect to any claim exceeding $50,000 or any action or proceeding or (C) any of
the lawsuits designated on Schedule 7.10(a) of the Price Disclosure Schedule as
the "Excepted Lawsuits", and any similar suits filed subsequent to the date
hereof, against any member of the Price Group and/or the Transferred Entities or
any of their respective directors or officers alleging violations of federal
securities laws or breaches of fiduciary duties in connection with sales of
securities of NGP, or with respect to the transactions contemplated hereby or in
the Suspended Merger Agreement (it being understood that the decision of the
Acquiror to grant or withhold its consent with respect to the settlement of any
such claim, action or proceeding pursuant to clause (d)(iv) shall be made within
a reasonable time and shall be based upon maintaining the assets of the Price
Entities and preserving the goodwill and business relationships of the Price
Entities with customers, vendors and others having business relationships with
them);
(e) (i) use reasonable best efforts to preserve intact their
respective business organizations and goodwill, keep available the services
of their respective present officers and employees, and preserve the goodwill
and business relationships with customers and others having business
relationships with them, (ii) maintain all of the assets owned or used by them
in the ordinary course consistent with past practice, (iii) maintain its books
and records in a manner and on a basis consistent with prior years and (iv) not
modify in any material respect, amend in
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any material respect, exercise its right to extend the term of, or
terminate any of its Contracts or Leases (other than Contracts or Leases that
terminate automatically by their terms) or enter, or agree to enter, into or
assume or adopt any Lease (it being agreed that any amendment or modification to
a Lease (unless consistent with or agreed to in accordance with and in
furtherance of Section 11.2), that increases the rent or other monetary
obligations of the lessee thereunder, requires the lessee to make capital
expenditures or changes the terms thereof shall be deemed to be a material
amendment to such Lease);
(f) not sell, assign, mortgage or otherwise encumber its
interest in any Owned or Leased Property except in accordance with existing
agreements as of the date hereof set forth in Schedule 5.18 of the Price
Disclosure Schedule;
(g) not enter into, adopt or amend any employment, severance,
change in control, retention, special pay arrangement with respect to
termination of employment or other similar plans, arrangements or agreements
with or for the benefit of any Employees of the Price Entities (excluding any
non-material arrangements with independent contractors who work on average over
any three-month period less than 20 hours per week) except offer letters for
at-will employment that do not provide for any severance (it being understood
that the decision of the Acquiror to grant or withhold its consent with respect
to the matters described in this clause (g) shall be made within a reasonable
time and shall be based upon maintaining the assets of the Price Entities and
preserving the goodwill and business relationships of the Price Entities with
customers, vendors and others having business relationships with them);
(h) not increase the salary, monetary compensation, incentive
compensation or benefits of any Employee of the Price Entities (excluding
any non-material arrangements with independent contractors who work on average
over any three-month period less than 20 hours per week) except, (i) for annual
merit increases or non-material increases in benefits in the ordinary course of
business consistent with past practice to the base salary or wages of Employees
of the Price Entities who are not officers, senior managers or directors, and
(ii) as required by Applicable Law;
(i) not adopt, enter into or amend or commit themselves to
adopt, enter into or amend any Employee Benefit Plan or plan, programs or
arrangement that would be an Employee Benefit Plan under this Agreement if it
were in effect as of the date hereof, except for amendments as required by
Applicable Law;
(j) notwithstanding any other clause of this Section 8.1, not
make any loan or advance to any of its Affiliates, officers, directors,
employees, consultants, agents or other representatives (other than reasonable
and customary travel advances made in the ordinary course of business);
(k) not acquire or agree to acquire in any manner, including by
way of merger, consolidation or purchase of an Equity Interest or assets, any
business of any Person;
(l) not, directly or indirectly, make any payment or
distribution of cash or any other asset (x) to any Affiliate (other than AGC,
GEI or any Transferred Entity), (y) in excess of $10,000 individually or $50,000
in the aggregate in any one month (except as permitted pursuant
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to Section(s) 8.1(b) and 8.11) or (z) to the Prices or any other holder of
Equity Interests of AGC, GEI or the Transferred Entities or Affiliates
thereof (in each case, except as provided in clause (b) above) (it being
understood that the decision of the Acquiror to grant or withhold its consent to
a payment or distribution in whole or in part pursuant to this clause (l) shall
be made within a reasonable time and shall be based upon maintaining the assets
of the Price Entities and preserving the goodwill and business relationships of
the Price Entities with customers, vendors and others having business
relationships with them);
(m) not make, revoke or take any action inconsistent with any
material Tax election or surrender any right to claim a Tax refund;
provided, however, that AGC may after reasonable written notice to the Acquiror
elect to change its taxable year to December 31;
(n) not change any method of accounting or accounting practice
used by such Price Entity other than changes required by U.S. GAAP;
provided that the applicable Price Entity shall give Acquiror prompt written
notice of any such change;
(o) not take any corporate action for its winding up,
dissolution or reorganization or for the appointment of a receiver,
administrator or administrative receiver, trustee or similar officer of any or
all of its assets of revenue;
(p) notwithstanding any other clause of this Section 8.1, not
discharge, cancel, forgive, settle or pay off any claims, indebtedness,
liabilities or obligations of any kind or any nature involving Affiliates; and
(q) enter into any binding contract, agreement, commitment or
arrangement with respect to any of the foregoing.
8.2 Insurance. The Price Entities shall use their reasonable best
efforts to maintain in effect and to pay all premiums due thereon for the
period ending on the Closing Date with respect to Insurance Policies and surety
or fidelity bonds maintained by them on the date hereof or to procure,
comparable replacement policies and bonds (or such replacement coverage as is
obtainable on a commercially reasonable basis) and maintain such policies and
bonds in full force and effect until the Closing Date. The Price Entities shall
advise the Acquiror (a) if any Price Entity is denied coverage by insurance
providers or if any of the Price Group or the Price Entities is notified that an
insurance provider is defending any material claim and reserving its rights to
contest its obligation with respect to such claim, and (b) if any of the Price
Group or the Price Entities is refused any insurance coverage sought or applied
for (including with respect to any claims).
8.3 Employees, Employee Benefits.
(a) The Acquiror shall, and shall cause its Subsidiaries (including each Price
Entity) to, honor, in accordance with the terms and conditions of the applicable
plan, policy, agreement and/or arrangement, all Employment Agreements and all
benefits and obligations accrued (and not therefore used, paid or canceled) as
of the Closing Date by current and former employees of the Price Entities under
the Plans.
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(b) Through the date six months from the date of Closing, the
Acquiror shall maintain (or cause to be maintained) employee benefit plans,
policies and arrangements which, with respect to the employees of the Price
Entities employed as of the Closing ("PRICE EMPLOYEES") provide benefits that
are comparable in the aggregate to the benefits provided to such employees under
the Plans as in effect immediately prior to the Closing Date but not including
any employer stock based benefit plans (including phantom stock or stock unit
plans).
(c) For purposes of determining eligibility to participate,
vesting and determination of the level of benefits (but not accrual or
entitlement to benefits (other than for the purposes of severance benefit
accrual where the length of service is relevant)) for Price Employees under all
employee benefit plans and arrangements of the Acquiror, the Acquiror shall or
shall cause its Subsidiaries to recognize service with the Price Entities to the
same extent recognized under a comparable Plan as in effect immediately prior to
the Closing Date.
(d) The Acquiror shall or shall cause its respective
Subsidiaries to (i) waive all limitations as to pre-existing conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Price Employees under all employee benefit plans
in which such employees may be eligible to participate after the Closing Date,
other than limitations or waiting periods that are already in effect with
respect to such employees and that have not been satisfied as of the Closing
Date under any Plan immediately prior to the Closing Date and (ii) provide each
Price Employee with credit for any co-payments and deductibles paid prior to the
Closing Date in satisfying any applicable deductible or out-of-pocket
requirements for the year in which the Closing Date occurs under all employee
benefit plans in which such employees are eligible to participate after the
Closing Date.
8.4 Third-Party Proposals. No member of the Price Group shall, nor
shall they, as applicable, permit any of their respective Subsidiaries,
officers, directors, employees, advisors, representatives or agents, including
any investment banker, attorney, consultant or accountant engaged by any of them
to, directly or indirectly (i) solicit, initiate or encourage any inquiry or
proposal that constitutes, or may reasonably be expected to lead to, a proposal
or offer to enter into any merger, consolidation, amalgamation, refinancing of
debt, acquisition of any equity interest (other than as contemplated by this
Agreement), prepackaged bankruptcy plan, plan of liquidation or dissolution,
recapitalization, sale and/or purchase of all or substantially all of the assets
of AGC, GEI or any of the Transferred Entities or any similar business
combination, acquire any interest in, dispose of or otherwise result in a change
of control of any of the Price Entities or any of their respective material
assets (any of the foregoing inquiries or proposals, an "ACQUISITION PROPOSAL";
provided, however, that the transactions contemplated by the Suspended Merger
Agreement shall not be deemed an Acquisition Proposal hereunder); (ii) engage in
negotiations or discussions concerning, or provide any information to any person
or entity relating to, an Acquisition Proposal; or (iii) agree to any
Acquisition Proposal. Each member of the Price Group shall notify the Acquiror
promptly (but in any event within 24 hours) after receipt of any Acquisition
Proposal, any amendment or modification to an Acquisition Proposal, or any
request for nonpublic information relating to the Price Group in connection with
an Acquisition Proposal. Such notice to the Acquiror shall be made in writing
and shall indicate the identity of the person making the Acquisition Proposal or
requesting nonpublic information and the terms of any such Acquisition Proposal
or modification or amendment to an Acquisition Proposal. It is understood that
any breach of the restrictions set forth in this Section 8.4 by the
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Prices, any holder of Equity Interests of any of the Price Entities, any
executive officer of any member of any of the Price Entities or any investment
banker, attorney, consultant, accountant or other agent, advisor or
representative of the Prices or the Price Entities, shall be deemed to be a
breach of this Section 8.4 by the Price Group. No member of the Price Group or
any of the Price Entities or, as applicable, any of their respective officers,
directors, employees, representatives or agents, including any investment
banker, attorney, consultant or accountant engaged by any of them, shall amend,
modify, waive or terminate, or otherwise release any Person from, any
standstill, confidentiality or similar agreement or arrangement currently in
effect relating to the Merger Agreement, this Agreement or the transactions
contemplated hereby. Each member of the Price Group and each of the Price
Entities shall, as applicable, cause their respective officers, directors,
agents, advisors to comply with the provisions of this Section 8.4 and as of the
date hereof, terminate any existing activities, discussions or negotiations with
any third parties that may be ongoing with respect to any Acquisition Proposal
and shall request that all confidential information previously furnished to any
such third parties be returned promptly.
8.5 Officers' and Directors' Indemnification.
(a) The Acquiror agrees that, for a period of six years
following the Closing Date, it will not cause AGC, GEI or any of the
Transferred Entities to amend their respective Organizational Documents in a
manner which would alter the rights of indemnification or exculpation existing
in favor of the directors and officers of AGC, GEI or any of the Transferred
Entities as provided in the Organizational Documents of AGC, GEI and the
Transferred Entities, respectively, in effect on the date hereof with respect to
matters occurring prior to the Closing Date (unless the Organizational Documents
of a successor entity would contain provisions providing for indemnification or
exculpation that are the same as the comparable provisions in the predecessor's
Organizational Documents); provided, however, that no indemnity shall be
available to any Person in respect of any amounts payable by an Indemnifying
Party in respect of Losses as to which the Acquiror Indemnitee is entitled to
indemnity from such Indemnifying Party pursuant to the provisions of Article X
or Article XIII or would be so entitled but for the limitations and restrictions
set forth in Section 13.2 or Section 14.2, except to the extent any payment in
respect thereof is covered by officers' and directors' liability insurance.
(b) Until the sixth anniversary of the Closing Date, Acquiror
shall (or shall cause any applicable Subsidiary to) maintain officers' and
directors' liability insurance covering the Persons who are presently covered by
the officers' and directors' liability insurance policies of the Price Entities
with respect to acts and omissions occurring on or prior to the Closing Date, by
obtaining tail coverage of such existing insurance policies on terms that are no
less favorable than the terms of the current insurance in effect on the date
hereof and providing coverage only with respect to matters occurring on or prior
to the Closing Date, to the extent that such tail insurance coverage can be
maintained at an annual cost to such surviving entity of not greater than 150%
of the annual premium for the current insurance policies and, if such tail
coverage cannot be maintained at such cost, providing such coverage as can be so
maintained at a cost equal to 150% of the annual premium for the current
insurance policies.
8.6 State Takeover Statutes. Each of AGC, GEI and each of the
Transferred Entities shall take all steps necessary to exempt (or continue
the exemption of) the transactions
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contemplated hereby from, and challenge the validity of, any applicable
state anti-takeover or similar law, as now or hereafter in effect.
8.7 Reasonable Best Efforts - Tax Treatment. Each party will use
reasonable best efforts to ensure the AGC Acquisition, the GEI Acquisition
and the Transferred Interests Acquisition will be taxed as sales or exchanges
under Section 1001 of the Code with each of the AGC Sellers, the Trusts and the
Transferred Entity Sellers recognizing gain or loss, as applicable, for federal
income tax purposes in connection with such transactions.
8.8 Return Filing and Payment of Taxes. From and after the date
hereof and prior to the Closing, the Price Entities shall use their
reasonable best efforts and the Indemnifying Parties shall use their reasonable
best efforts to cause the Price Entities (A) to timely file all Returns required
to be filed by any of the Price Entities during such period in a manner that is
correct and complete in all material respects, (B) to pay all Taxes shown as due
on such Returns that the relevant Price Entity has the ability to pay (it being
agreed and understood that, for purposes of this Section 8.8(B), no member of
the Price Group shall be required to contribute or loan funds to the Price
Entities) and (C) to duly withhold and collect and pay over to the proper Taxing
Authority (or properly hold for payment) with respect to all employees, all
employee income, social security, unemployment and any other payroll Taxes
required to be withheld, collected or paid over (or held for payment).
8.9 Pledges. The parties hereto agree to use their reasonable best
efforts to cause each of the pledgors (the "PLEDGORS") of the collateral
pledged in connection with the pledges set forth on Schedule 8.9 of the Price
Disclosure Schedule (the "PLEDGES") to be released from any and all obligations
arising from the Pledges.
8.10 Delivery of Documents. The Price Group shall use its reasonable
best efforts (A) to deliver to the Acquiror as soon as practicable and, if
possible using such efforts, on or before the Closing Date, a photocopy of the
Hillary ▇▇▇▇ ▇▇▇▇▇▇▇▇ Revocable Trust dated December 2, 1996 and (B) to search
AGC's records for any Tax election forms the Acquiror shall reasonably request
and deliver a photocopy of such election forms to the Acquiror.
8.11 Capital Expenditures. Subject to Section 11.2, without the
prior written consent of Acquiror, between the date of this Agreement and
the Closing Date, none of AGC, GEI and the Transferred Entities and their
Subsidiaries will incur any capital expenditures or agree or commit to incur any
capital expenditures on any items other than capital expenditures: (w) required
by the terms of the Leases as in effect on the date hereof, (x) for or in
relation to, and in the amounts of, those specific commitments set forth on
Section 8.11 of the Price Disclosure Schedule, (y) expenditures of up to
$100,000 per occurrence as may be required for emergency property repair where
obtaining the consent of the Acquiror pursuant to Section 8.1 could expose the
business to damage or loss, and (z) as may be required by Applicable Law. The
decision of Acquiror to grant or withhold its consent with respect to any
capital expenditures other than those permitted in accordance with this Section
8.11 shall be made within a reasonable time and shall be reasonable and shall be
based upon maintaining the assets of and preserving the goodwill and business
relationships of the Price Entities with customers, vendors, landlords and
others having business relationships with them.
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8.12 Financing.
(a) In connection with the financing of the transactions
contemplated by this Agreement, the Price Group and the Price Entities
agree to use their reasonable best efforts, and to cooperate with Acquiror, in
completing and delivering all necessary documentation for such financing,
including without limitation, schedules, customary legal opinions and other
supporting documentation.
(b) Provided that the Price Group will not incur any expense,
the Price Entities shall use their reasonable best efforts to assist
Acquiror in mitigating and reducing (i) mortgage recording fees and taxes,
including by effecting at the request of Acquiror, the assignment of mortgages,
(ii) premiums for title insurance that Acquiror may obtain for itself, its
lenders or its financing sources, and (iii) any other recording taxes or fees in
connection with (i) and (ii).
8.13 Subsequent Financial Statements.
(a) As soon as reasonable practicable and in any event within 20
calendar days after the end of each month during the period from the first
day of the month during which this Agreement is dated until the Closing Date,
AGC will deliver to Acquiror copies of the combined pro forma financial
statements reflecting the hypothetical combined operations of NGP, the NGP
Subsidiaries (as defined in the Merger Agreement) and the AGC Group generated by
the financial model referred to as the "Stratocaster" model for the month just
ended. As soon as reasonably practicable after the date hereof, AGC will deliver
to Acquiror Newco Pro Forma Consolidating Worksheets (income statement and
balance sheet) for the year ended December 31, 2000 and the six months ended
June 30, 2002, substantially in the form previously delivered to Aquiror for the
year ended December 31, 2001 (which present a business combination at book value
of NGP, the NGP Subsidiaries and the AGC Group taking into account the
intercompany eliminations set forth in Section 11.11 of the Suspended Merger
Agreement).
(b) The Price Group and the Price Entities shall, and shall
cause their officers, employees, auditors and agents to use their
reasonable best efforts to provide Acquiror and representatives and lenders of
Acquiror access to, and copies of, such additional financial and operating data
and other documents and information as Acquiror may from time to time reasonably
request.
8.14 Section 338(h)(10) Election.
(a) If AGC Sellers so request, Acquiror and the AGC Sellers
shall jointly make timely and irrevocable elections under Section
338(h)(10) of the Code with respect to AGC, and, if permissible, shall make all
similar elections under any applicable state or local Tax laws with respect to
AGC (collectively, the "Section 338 Elections"). AGC Sellers and Acquiror shall
report the transactions consistent with the making of the Section 338 Elections
and shall take no position contrary thereto without the written consent of the
other parties.
(b) AGC (at the direction of the Prices) shall be responsible
for preparing drafts of all forms, attachments and schedules necessary to
effectuate the Section 338 Elections including, without limitation, IRS Form
8023 or applicable successor form, and any similar
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forms or applicable successor forms under applicable state or local income
tax laws (the "Section 338 Forms"). Acquiror shall cooperate in good faith with
AGC and the Prices and shall promptly file with the Prices all information
reasonably requested by them and relevant to the preparation of the Section 338
Forms. In the event, however, any Section 338 Forms are not executed at the
Closing, at least 90 days prior to the latest date for the filing of such
Section 338 Forms, the AGC Sellers shall furnish Acquiror with a copy of each
such form for its review and comment, together with AGC Sellers' proposed
determination of the ADSP (as defined in applicable Treasury Regulations under
Section 338) and allocation of the ADSP to the assets of AGC and other relevant
items (the "Allocation"). All parties each agree to consult in good faith with
regard to the proposed determination of the ADSP and the Allocation.
(c) In the event that AGC Sellers and Acquiror cannot agree on
the Allocation within 30 days of the delivery of the Allocation to the
Acquiror, AGC Sellers and Acquiror shall hire an internationally recognized
accounting firm mutually agreeable to them to perform the Allocation. AGC
Sellers and Acquiror hereby agree to be bound by the resultant Allocation, and
further agree to each pay one-half of the accounting firm's fees.
ARTICLE IX
ADDITIONAL AGREEMENTS
9.1 Regulatory Matters.
(a) The parties hereto shall cooperate with each other and use
their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, to
obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Authorities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement, and to comply with the terms and conditions of all such permits,
consents, approvals and authorizations of all such Governmental Authorities. The
Acquiror, on the one hand, and the Prices, AGC and GEI, on the other hand, shall
be provided with the opportunity to review in advance, and, to the extent
practicable, each will consult the other on, in each case subject to applicable
laws relating to the exchange of information, all the information relating to
AGC, GEI or the Transferred Entities, as the case may be, and any of their
respective Subsidiaries, which appear in any filing made with, or written
materials submitted to, any third party or any Governmental Authority in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Authorities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(b) The Acquiror, on the one hand, and the Prices, AGC, GEI and
the Transferred Entities on the other hand, shall, upon request, furnish each
other with all information concerning themselves, their Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with any
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statement, filing, notice or application made by or on behalf of the
Acquiror, AGC, GEI, the Transferred Entities or any of their respective
Subsidiaries to any Governmental Authority in connection with the transactions
contemplated by this Agreement.
(c) The Acquiror, on the one hand, and the Prices, AGC, GEI and
the Transferred Entities on the other hand, shall promptly advise each
other upon receiving any communication from any Governmental Authority whose
consent or approval is required for consummation of the transactions
contemplated by this Agreement which causes such party to believe that there is
a reasonable likelihood that any Requisite Regulatory Approval will not be
obtained or that the receipt of any such approval will be materially delayed.
9.2 Access to Information.
(a) Subject to Applicable Law relating to the exchange of
information, each member of the Price Group and each Price Entity shall,
and shall cause each of their respective Subsidiaries to, afford to the
officers, employees, accountants, counsel and other representatives of the
Acquiror and its financing sources, access, during normal business hours during
the period prior to the Closing, to all its properties, books, contracts,
commitments and records and, during such period, each member of the Price Group
and each of the Price Entities shall, and shall cause their respective
Subsidiaries (i) to, make available to the Acquiror (x) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of the Securities Laws and (y)
all other information concerning its business, properties and personnel as the
Acquiror may reasonably request and (ii) to use reasonable efforts to cause its
employees, officers and agents, upon prior notice to such applicable member of
the Price Group and such Price Entity, to consult with Acquiror and its
representatives in relation to Acquiror's plans for the business following
Closing at reasonable times and to a reasonable extent. No member of the Price
Group or any Price Entity shall be required to provide access to or to disclose
information where such access or disclosure would jeopardize the attorney-client
privilege of the institution in possession or control of such information or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or
binding agreement entered into prior to the date of this Agreement. The parties
hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
(b) The parties shall comply with, and shall cause their
respective Representatives and affiliates to comply with, all of their
respective obligations under the confidentiality agreement, dated as of March 4,
2002, between NGP and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., as amended, and the confidentiality
agreement, dated as of February 25, 2002, between NGP and Starwood Capital Group
Global, L.L.C., as amended (together, the "CONFIDENTIALITY AGREEMENT"),
including with respect to the information disclosed pursuant to this Section 9.2
9.3 Legal Conditions to Acquisition Transactions. The Acquiror and
each member of the Price Group shall, and shall cause its Subsidiaries to,
use their reasonable best efforts to take, or cause to be taken, all actions
necessary, proper or advisable (including amending or restructuring any leases
to which any of the Price Entities is a party in a manner otherwise permitted
under the terms of this Agreement) (a) to comply promptly with all legal
requirements
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which may be imposed on such party or its Subsidiaries to consummate the
transactions contemplated by this Agreement, and (b) to obtain (and to cooperate
with the other party to obtain) any consent, authorization, order or approval
of, or any exemption by, any Governmental Authority and any other third party
which is required to be obtained by any of them or any of their respective
Subsidiaries in connection with the transactions contemplated by this Agreement;
provided, however, that no member of the Price Group or its respective
Subsidiaries shall be required to make any payment (other than ordinary filing
fees) or enter into any modification or amendment to a Lease that alters the
Lease in a manner that is adverse to the lessee Price Entity in connection with
obtaining any such consent, authorization, order, approval or exemption. Each
party hereto shall use its reasonable best efforts to consummate the
transactions contemplated hereby. In addition to and not in limitation of the
foregoing, Acquiror shall and shall cause its Affiliates to use their reasonable
best efforts to cooperate with the Price Entities in satisfying the condition
set forth in Section 11.2(d), including promptly providing all information
(including information relating to net worth and golf industry and real estate
experience) requested by the landlord and lessors in connection with the Price
Entities obtaining any necessary consents with respect to the leases set forth
on Schedule 11.2(d) of the Price Disclosure Schedule and to cause its
Representatives to meet with the lessors and landlords under such leases to the
extent reasonably requested by the Price Entities in connection therewith.
9.4 Additional Agreements. If, at any time after the Closing Date,
any further action is necessary or desirable to carry out the purposes of
this Agreement or to vest the Acquiror in connection with the transfer of the
AGC Interests, the GEI Interests or the Transferred Interests, with full title
to all properties, assets, rights, approvals, immunities and franchises of any
of the parties to such transfers, the proper officers and directors of each
party to this Agreement and their respective Subsidiaries shall take all such
necessary action as may be reasonably requested by the Acquiror. Each party
hereto shall use its reasonable best efforts prior to the Closing to cause the
relationship between each Association and the applicable Price Entity to
continue in substantially the same manner after the Closing as such relationship
exists on the date hereof. On the date hereof AGC, the Prices, the Trusts and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ have entered into amended and restated membership deposit
assumption agreements in the form attached as EXHIBIT A.
9.5 Advice of Changes. The Acquiror, on the one hand, and the Price
Group, on the other hand, shall each promptly advise the other party of any
change or event which it believes would or would be reasonably likely to cause
or constitute a material breach of any of its representations, warranties or
covenants contained herein, and the Acquiror, on the one hand, and the Price
Group, on the other hand, shall each promptly advise the other party of any
change or event having a Acquiror Material Adverse Effect and a Price Material
Adverse Effect, as applicable.
9.6 Director Designation Agreement. The Acquiror and ▇▇▇▇▇ ▇. ▇▇▇▇▇
hereby agree that the Director Designation Agreement shall terminate
automatically on the Closing Date without any further action by the parties
hereto.
9.7 Intercompany Payables. Notwithstanding anything herein to the
contrary, the parties acknowledge that after the date hereof and prior to
the Closing Date, in repayment of (x) the net amounts owing to any member of the
Price Group (other than AGC, GEI and the
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Transferred Entities) by AGC, GEI and the Transferred Entities, less (y)
the net amounts owing to AGC, GEI, the Transferred Entities and their
Subsidiaries by any member of the Price Group (other than AGC, GEI and the
Transferred Entities) (the parties agreeing that as of the date hereof the
amount in clause (x) is greater than the amount in clause (y)), the Shareholder
Loans (as defined in Schedule 9.7(a) of the Price Disclosure Schedule)
(including accrued interest thereon) shall be transferred to the Prices and the
borrowers and lenders with respect to the loans set forth on Schedule 9.7(b) of
the Price Disclosure Schedule shall cause the settlement of such loans
(including interest accrued thereon) as described on Schedule 9.7(b), it being
acknowledged and agreed that no distribution shall be made by any of the Price
Entities to any Person (other than any of the other Price Entities) in
connection with such settlement. Each of the Prices and the Trusts, on the one
hand, and the Price Entities, on the other hand, shall release and forever
discharge, from and after the date of the transaction described in this Section
9.7, the other from any and all claims, demands, damages, actions, causes of
action or suits of any kind, whether known or unknown, that such party may have
arising out of or relating to the loans set forth on Schedule 9.7(b), other than
a breach of the representations set forth at Section 10.6(f). The borrowers
under each such loan set forth on Schedules 9.7(a) and (b) shall not be
obligated to make any payment of interest or principal otherwise due under such
loan prior to the settlement thereof, notwithstanding the accrual of interest on
such loan. If after the completion of the transactions set forth on Schedule
9.7(b), there are any loans outstanding between any of AGC, GEI and the
Transferred Entities then such entities shall repay, cancel or otherwise settle
such loans prior to Closing, in such manner as AGC, GEI and the Transferred
Entities may reasonably determine, provided that, such mechanism does not have
any adverse tax consequences to the Acquiror.
9.8 Seller Releases. The parties hereto agree to use their
reasonable best efforts to cause each of the guarantors (the "GUARANTORS")
of the guarantees set forth on Schedule 9.8 to the Price Disclosure Schedule
(the "GUARANTEES") to be released from any and all obligations arising from the
Guarantees on or after the Closing Date; provided, however, that to the extent
any Guarantor is required to make a payment with respect to a Guarantee (i)
after the date hereof but prior to the Closing Date, such Guarantor shall be
subrogated to the rights of the Person who enforced such Guarantee against
Guarantor, and such subrogation shall not be subject to the Closing Release of
such Guarantor, and (ii) after the Closing Date, (x) if there is an otherwise
unsatisfied Loss for which such Guarantor must indemnify the Acquiror pursuant
to Section X or XIII, the amount of such Loss otherwise payable by such
Guarantor shall be reduced by an amount equal to the payment such Guarantor made
pursuant to such Guarantee (provided that if the amount paid by such Guarantor
exceeds the amount of such Loss, the excess amount shall be subject to clause
(y)) or (y) if there is no such Loss, such Guarantor shall be subrogated to the
rights of the Person who enforced such Guarantee against such Guarantor.
9.9 Partners Agreement. ▇▇▇▇▇ ▇. ▇▇▇▇▇ and Dallas P. Price hereby
agree that the Price Partners Agreement shall terminate automatically on
the Closing Date without any further action by the parties hereto; provided,
however, that Section 3 of the Price Partners Agreement shall be deemed waived
by each of ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in connection with any vote by
holders of NGP Common Stock (as defined in the Merger Agreement) and NGOP Common
Units (as defined in the Merger Agreement).
9.10 Title Insurance Affidavits.
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(a) At or prior to Closing, the Price Entities shall deliver to
a title insurance company chosen by the Acquiror and reasonably approved by
the Price Entities (the "TITLE COMPANY"), such affidavits, certifications,
evidence of corporate authority, and other customary instruments as the Title
Company shall reasonably require in order to issue either or both (i) updated
title insurance policies for the Owned Real Property and/or (ii) non-imputation
affidavits to the existing title insurance policies. In addition, as soon as
reasonably practicable after the date of this Agreement, the Price Entities
shall use commercially reasonable efforts to make available to Acquiror copies
(or originals where available) of all title insurance polices, surveys and
Leases in its possession (which documents may be copied by Acquiror at
Acquiror's expense).
(b) The Price Group shall use commercially reasonable efforts,
taking into account the need to cause any Covered Lease to be a Consented
Lease, to obtain and deliver to the Acquiror at Closing estoppel certificates
(which certificates shall not be conditioned on any increased rental or other
payments or reduction of the lease term), in form and substance satisfactory to
the Acquiror in its commercially reasonable judgment; provided that the Price
Group shall not be required to seek or deliver estoppel certificates relating to
any NGOP Leases.
9.11 Environmental Investigations.
(a) AGC shall engage and direct ENSR International and at
Acquiror's request such other additional reputable environmental
consultant(s) as selected by Acquiror and as may be reasonably agreed to by AGC
(the "ENVIRONMENTAL CONSULTANT(S)") to conduct phase I environmental assessments
in accordance with ASTM standard E-1527-00, as supplemented by Archon's protocol
and to prepare phase I environmental reports (the "PHASE I REPORTS") on all
Owned Real Properties and Leased Real Properties (excepting therefrom all non
golf course Leased Real Property that is not adjacent to or used directly in the
operation of any golf course) where, assuming AGC is in compliance with its
covenants in this Section 9.11(a), 9.11(c)(with respect to the Phase I Reports)
and 9.2 (with respect to the access necessary to complete the environmental
assessments referred to in this Section 9.11(a)), such Phase I Reports can be
completed in eight (8) weeks or less from the date hereof (and AGC shall deliver
to Acquiror a copy of each such Phase I Reports); provided, however, in the case
of the Leased Real Properties such phase I environmental assessments shall be
conducted in accordance with and to the extent permitted under the terms of the
Leases and provided, further, that if and to the extent such Leases prohibit
such phase I environmental assessments, AGC shall use commercially reasonable
efforts to seek such permission, waiver or exception from the applicable
landlords (Acquiror hereby agreeing that it is commercially reasonable for AGC
to take into account the need to cause any Covered Lease to be a Consented Lease
in determining whether and to what extent to seek such permission, waiver or
exception).
(b) AGC shall also engage and direct the Environmental
Consultant(s) to conduct such further investigations (which may include
sampling of soil, sediment, ground water, surface water and/or building
material) and to prepare such further or supplementary environmental reports as
are reasonably necessary to investigate violations of Environmental Law and
Recognized Environmental Conditions (as defined in ASTM standard E-1527-00)
identified in the Phase I Reports or, in the reasonable judgment of Acquiror or
the lenders providing the Financing, to investigate potentially adverse
environmental conditions identified in the Phase I Reports (as evidenced by a
certificate addressed to Acquiror from such lenders which states that such
investigative requirements are, in such lenders' sole judgment, consistent with
such lenders' customary practices for similar transactions), such further or
supplementary reports
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to be prepared in accordance with such standards and in a manner customary
for such reports and within a reasonable period of time following delivery of
the Phase I Reports (together with the Phase I Reports, the "ENVIRONMENTAL
REPORTS"). AGC shall deliver to Buyer a copy of each such Environmental Report.
In addition to that which is required under ASTM standard E-1527-00, as
supplemented by Archon's protocol, the Environmental Consultant(s) shall provide
an estimated cost of all investigation (other than any phase II investigations
performed pursuant to this Section 9.11 or Section 6.14 of the Merger
Agreement), cleanup, remediation, disposal and corrective action necessary to
address the Recognized Environmental Conditions (as defined in ASTM standard
E-1527-00) identified in such Environmental Reports. Notwithstanding the
foregoing, with respect to the Leased Real Properties such further
investigations shall be limited by and performed in accordance with the terms of
the Leases; provided, however, that if and to the extent such Leases prohibit or
limit such further investigations, AGC shall use commercially reasonable efforts
to seek such permission, waiver or exception from the applicable landlords
(Acquiror hereby agreeing that it is commercially reasonable for AGC to take
into account the need to cause any Covered Lease to be a Consented Lease in
determining whether and to what extent to seek such permission, waiver or
exception).
(c) AGC shall use reasonable best efforts to cause the
Environmental Consultant(s) to: (i) deliver to Acquiror copies of all
drafts of the Environmental Reports supplied to AGC and reflect in such reports
such comments as Acquiror shall reasonably propose, (ii) make available to
Acquiror and its Representatives all pertinent documents in the Environmental
Consultant's possession relating to the Environmental Reports, and (iii) at no
cost to Acquiror, provide to Acquiror, its underwriters or those persons
providing financing to Acquiror the right to rely on the Environmental Reports,
as evidenced by a reliance letter from the Environmental Consultant(s)
reasonably satisfactory to Acquiror and those persons providing financing to
Acquiror. AGC shall consider all reasonable requests from Acquiror and its
Representatives to consult with the Environmental Consultant(s) in relation to
the content of the Environmental Reports.
ARTICLE X
TAX MATTERS
10.1 Tax Indemnification. From and after the Closing, each of the
Indemnifying Parties, jointly and severally, shall be liable for, and shall
indemnify and hold harmless each of the Acquiror Indemnitees against any and all
Losses with respect to:
(a) all Taxes of the Price Entities for all Pre-Closing Periods
that have become due (it being agreed and understood that for the purposes
of this Agreement Taxes shall not be considered due until the date on which they
become delinquent (excluding any Taxes not delinquent on account of a voluntary
agreement between any of the Price Entities and a taxing authority)) on or
before March 29, 2002, (but including Taxes attributable to any period prior to
January 1, 2002 which were due prior to March 29,2002 and are assessed after
March 29, 2002 as a result of any audit adjustments or amended Returns) but only
to the extent not paid by the relevant Price Entity prior to the Closing;
(b) any breach by such Person of any of the representations set forth in
Section 10.6; and
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(c) any breach by such Person of any of the covenants set forth
in this Article X or in Sections 8.1(m), 8.7, and 8.8, of this Agreement.
(d) any income, franchise or similar Taxes based in whole or in
part on net income incurred by any of the Price Entities arising in respect
of or due during the period or periods or portions thereof after December 31,
2001 and up to an including the earlier of March 30, 2003 or the Closing Date,
that have become due on or before the earlier of March 30, 2003 or the Closing
Date, but only to the extent of the excess, if any, of the aggregate amount of
such Taxes over $250,000 not paid by the relevant Price Entity prior to Closing,
and provided that any indemnification pursuant to this Section 10.1(d) shall
specifically exclude any liability for Taxes based on sales, revenue or property
values, including, without limitation sales, use, business, license, VAT,
payroll or other similar Taxes ((a), (b), (c) and (d) collectively, "EXCLUDED
TAXES").
For purposes of this Article X, "Losses" shall not include (A) any
reduction in a net capital loss, net operating loss, or foreign Tax credit,
carryforward or carryback, or similar Tax attribute (unless such reduction
results in an actual tax liability for which indemnification would be required
under Section 10.1) or (B) a Loss which is offset by a Tax Benefit of a Price
Entity attributable to a taxable period (or portion thereof) ending on or before
the Closing Date to which the Prices, the AGC Sellers and the Transferred Entity
Sellers are not entitled under Section 10.4. Notwithstanding anything else to
the contrary in this Agreement, the Indemnifying Parties shall not be required
to indemnify or hold harmless the Acquiror Indemnitees against the amounts set
forth on Schedule 10.1(a) and such amounts shall not be Excluded Taxes.
10.2 Allocation of Certain Taxes.
(a) The parties agree that if any Price Entity is permitted
under applicable foreign, state or local Tax law or administrative practice
to treat the Closing Date as the last day of a taxable period, such day shall be
treated as the last day of a taxable period for purposes of such relevant Tax
law.
(b) To the extent any Price Entity has agreed (as tenant) to pay
real, personal or intangible property Taxes with respect to the leased
premises pursuant to a lease, and but for such lease, the payment of such Taxes
would have been the obligation of the landlord, such amounts shall be considered
rent, and not Taxes, for purposes of this Article X.
10.3 Filing Responsibility; Payments.
(a) Any Return with respect to Acquiror, any of its
Subsidiaries, or any of the Price Entities shall be prepared and filed by
the person required under the law to file such Return; provided, however, that
-------- -------
all income, franchise and similar Returns which relate solely to a Pre-Closing
Period with respect to any of the Price Entities which are S corporations or
partnerships for United States federal income Tax purposes (the "PRICE RETURNS")
shall be prepared and filed by the Prices, except to the extent that the Prices
are not permitted by law to file a Return, in which case Acquiror or the
applicable Subsidiary agrees (subject to Section 10.3(b)) to execute and file
such Return, as prepared by the Prices, provided that such Return complies with
applicable law.
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(b) With respect to any Return required to be filed from and
after the date hereof by any Price Entity that could reasonably be expected
to affect Taxes for which the Acquiror or any of its Subsidiaries may be liable
(without regard to Section 10.1), such Price Entity shall, and the Prices shall
cause such Price Entity to, deliver to the Acquiror for its review, comment and
approval (which approval shall not be unreasonably withheld or delayed) a copy
of its proposed Return no later than thirty (30) days prior to the due date
(including extensions), and except with respect to Returns for which the Tax
liability of the Acquiror or any of its Subsidiaries is immaterial compared with
the Tax liability of the Indemnifying Parties, including the Price Returns,
shall make such changes as are reasonably requested by the Acquiror.
(c) With respect to any Return for any of the Price Entities
required to be prepared and filed from and after the date hereof by
Acquiror or any of its Subsidiaries or any of their members, that could
reasonably be expected to affect Taxes for which any of the Indemnifying Parties
may be liable, the Acquiror shall cause the appropriate entity to deliver to the
Prices for their review, comment and approval (which approval shall not be
unreasonably withheld or delayed) a copy of the proposed Return no later than
thirty (30) days prior to the due date (including extensions), and except with
respect to Returns for which the Tax liability of the Indemnifying Parties is
immaterial compared with the Tax liability of the Acquiror or any of its
Subsidiaries shall make such changes as are reasonably requested by the Prices.
(d) To the extent any Excluded Taxes are not paid prior to the
Closing Date, the Prices shall pay to the Acquiror the amount of such
Excluded Taxes two Business Days prior to the date such Excluded Taxes are due
to the relevant Taxing Authority. The Acquiror shall pay such amounts over, or
shall cause such amounts to be paid over, to the relevant Taxing Authority.
10.4 Refunds.
(a) The Acquiror or its Subsidiaries, as applicable, shall be
entitled to any refunds, the benefit of any credits actually realized in cash
and any amounts credited against Tax to which the Prices, the AGC Sellers or the
Transferred Entity Sellers become entitled, of or with respect to Taxes of
the Price Entities except to the extent such refunds or credits are attributable
to Excluded Taxes or Taxes paid by the Price Group (except for Taxes set forth
on Schedule 10.1(a)). The Acquiror or its Subsidiaries, as applicable, shall be
entitled to any refunds, the benefit of any credits actually realized in cash
and any amounts credited against Tax of the Acquiror or any of its Subsidiaries
(other than the Price Entities) for all periods.
(b) The Prices, the AGC Sellers or the Transferred Entity
Sellers, as applicable, shall be entitled to any refunds, the benefit of
any credits actually realized in cash and any amounts credited against Tax to
which the Acquiror or any of its Subsidiaries become entitled, of or with
respect to Taxes of the Price Entities to the extent such refunds or credits are
attributable to Excluded Taxes or Taxes paid by the Price Group (except for
Taxes set forth on Schedule 10.1(a)).
(c) The Acquiror and its Subsidiaries shall promptly forward to
the Prices, the AGC Sellers or the Transferred Entity Sellers,
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as applicable, any amounts to which such parties are entitled under Section
10.4(b). The Prices, the AGC Sellers or the Transferred Entity Sellers, as
applicable, shall promptly forward to the Acquiror (as applicable) any amounts
to which the Acquiror or any of its Subsidiaries (including the Price Entities)
are entitled under Section 10.4(a).
10.5 Control of Tax Audits.
(a) Subject to Section 10.5(c), the Prices shall have the right,
at their own expense, to control any Tax Audit, initiate any claim for
refund, contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment, or consent to any
extension or waiver of the limitations period applicable to any Tax claim or
assessment, in each case to the extent relating to any Excluded Taxes or Taxes
paid by the Price Group (except for Taxes set forth on Schedule 10.1(a)).
(b) Subject to Section 10.5(d), the Acquiror shall have the
right, at its own expense, to control any Tax Audit, initiate any claim for
refund, contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment or consent to any
extension or waiver of the limitations period applicable to any Tax claim or
assessment, in each case, (A) to the extent relating to any Taxes of the Price
Entities other than Excluded Taxes or Taxes paid by the Price Group (except for
Taxes set forth on Schedule 10.1(a)) and (B) to the extent relating to Taxes of
the Acquiror or any of its Subsidiaries (other than the Price Entities) with
respect to any taxable period.
(c) From and after the date hereof, the Prices shall not settle
or cause or permit any Price Entity to settle any Tax Audit initiate any
claim for refund, contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment or consent to any
extension or waiver of the limitations period applicable to any Tax claim or
assessment, (i) if such settlement or other action would reasonably be expected
based on available Returns of the Price Entities to adversely affect the Tax
liability of the Acquiror or any of its Subsidiaries without the prior written
consent of the Acquiror, which consent shall not be unreasonably withheld and
(ii) in case of the settlement of any Tax Audit, without providing evidence
reasonably satisfactory to the Acquiror of the payment (or provision for
payment) of any Taxes arising from such settlement.
(d) From and after the date hereof, neither the Acquiror nor any
of its Subsidiaries shall settle any Tax Audit and, from and after the
Closing Date, neither the Acquiror nor any of its Subsidiaries shall settle any
Tax Audit, initiate any claim for refund, contest, resolve and defend against
any assessment, notice of deficiency, or other adjustment or proposed adjustment
or consent to any extension or waiver of the limitations period applicable to
any Tax claim or assessment, if such settlement or other action would reasonably
be expected based on available Returns of the Price Entities to adversely affect
any Excluded Taxes or any Tax liability of the Prices, the AGC Sellers or the
Transferred Entity Sellers without the prior written consent of the Prices,
which consent shall not be unreasonably withheld.
(e) The parties shall cooperate with one another in a manner comparable to that
described for such Party in Section 10.7 to effect the purposes of this Section
10.5.
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10.6 Representations. Except as disclosed in Section 10.6 of the
Price Disclosure Schedule, each member of the Price Group (other than the
Sellers) hereby represents and warrants to the Acquiror as follows (it being
agreed and understood, however, (i) that AGC is making representations and
warranties only to Acquiror and only with respect to AGC and its Subsidiaries,
(ii) that GEI is making representations and warranties only to Acquiror and only
with respect to GEI and its Subsidiaries, and (iii) that each Transferred Entity
is making representations and warranties only to the Acquiror, and only with
respect to such Transferred Entity and its Subsidiaries):
(a) Each of the Price Entities (A) has timely filed all material
Returns required to be filed on or before March 29, 2002 and all such filed
Returns are complete and correct in all material respects, or requests for
extensions to file such Returns have been timely filed, granted and have not
expired, (B) have paid all Taxes shown as due on such Returns, (C) within the
past five years, have not been a "distributing corporation" or a "controlled
corporation" in a distribution intended to qualify under Section 355(a) of the
Code, and (D) has duly withheld and collected and paid over to the proper Taxing
Authority (or are properly holding for payment) with respect to all employees,
all employee income, social security, unemployment and any other payroll Taxes
required to be withheld, collected or held for payment for all taxable periods
ending, and will duly withhold, collect and pay to the proper Taxing Authority
all such Taxes that become due, on or before March 29, 2002. With respect to
each of the Price Entities, (i) there are no outstanding powers of attorney
enabling any party to represent the Price Entities, or any of them, with respect
to any matter relating to Taxes, (ii) no extension of the statute of limitations
for the assessment of Taxes has been granted and (iii) no notice of deficiency
or proposed deficiency or assessment or proposed assessment has been received
from any Taxing Authority with respect to liabilities for Taxes which have not
been paid or fully settled and (iv) there are no written or unwritten Tax
sharing, allocation or indemnification agreements or arrangements. No Price
Entity has ever been a member of any consolidated, combined or unitary group for
federal, state, local or foreign Tax purposes or has any liability for the Taxes
of any other Person under Treasury Regulation Section 1.1502-6 (or any
comparable provision of state, local or foreign law), as successor or
transferee, by contract or otherwise.
(b) Each of European Golf LLC, American Golf (UK) Limited,
American Golf of Atlanta, American Golf of Detroit, CW Golf Partners,
American Golf Australia Pty Ltd., AGC-Park Hill Joint Venture, Golf Acquisitions
LLC, AG Los Coyotes LLC and each of their Subsidiaries that are organized as
partnerships or limited liability companies as set forth on Schedule 5.2 has,
for all taxable periods since their respective dates of formation, been properly
classified for U.S. federal income Tax purposes as a partnership or a
disregarded entity and not as an association or publicly traded partnership
within the meaning of Section 7704(b) of the Code and the Treasury Regulations
thereunder.
(c) Each of AGC, European Golf Corporation, American Golf of
Glendale, Myreshan, Inc., and RSJ Golf, Inc. has made a valid election
under Subchapter S of the Code to which all Persons who were shareholders on the
date of such election gave their (and if necessary each shareholder's spouse
gave his or her) consent and each such election has been effective for all
taxable periods since each of their respective dates of formation.
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(d) No amount paid or payable (whether in cash, in property or
in the form of benefits, or due to the acceleration of the payment or
distribution of any cash, property or benefits), separately or in the aggregate,
by the Price Entities in connection with the transactions contemplated by this
Agreement (either solely as a result thereof or as a result of such transactions
in conjunction with any other event) will be an "excess parachute payment"
within the meaning of Section 280G of the Code.
(e) No withholding is required under Section 1445 of the Code in
respect of the Prices, any AGC Seller, or any Transferred Entity Seller
with respect to the Acquisition Transactions.
(f) None of the transactions set forth in Schedules 9.7(a) and
(b) will result in the recognition of any income or gain by any of the Price
Entities.
10.7 Cooperation and Exchange of Information.
(a) The parties shall cooperate with one another with respect to
matters related to Taxes of the Price Entities.
(b) From and after the Closing Date, as soon as practicable, but
in any event within forty-five (45) days after a request by the Prices, the
Acquiror shall provide (or cause to be provided) the Prices with such
cooperation and shall deliver to the Prices such information and data concerning
the operations of the Price Entities and make available such knowledgeable
employees of the Price Entities as the Prices may reasonably request, to enable
the Prices to complete and file all Returns that the Prices, any Price Entity
(to the extent such Return is prepared or filed by the Prices pursuant to
Section 10.3 of this Agreement) or any of their respective Affiliates may be
required to file with respect to the operations and business of the Price
Entities or to respond to any Tax Audit with respect to such operations. Such
cooperation and information by or from the Acquiror shall include promptly
forwarding copies of appropriate notices and forms or other communications
received from or sent to any Taxing Authority that relate to Excluded Taxes or
any other Taxes of the Prices, the AGC Sellers or the Transferred Entity
Sellers, and providing copies of all relevant Returns, together with
accompanying schedules and related workpapers, documents relating to rulings or
other determinations by any Taxing Authority and records concerning the
ownership and tax basis of property, which the Acquiror or its Subsidiaries may
possess. The Prices and any of their Affiliates shall provide the Acquiror and
its Subsidiaries with similar reasonable cooperation, information and data to
the extent the Prices or any of their Affiliates have such records and
information in their possession or such employees in their employ.
(c) The parties shall cooperate in the preparation of all
Returns relating in whole or in part to any Pre-Closing Period that are
required to be filed after the Closing Date, including furnishing relevant
portions of prior years' Returns or Return preparation packages illustrating
previous reporting practices or containing historical information relevant to
the preparation of such Returns, and furnishing such other information within
such party's possession reasonably requested by the person filing such Returns
as is relevant to their preparation. In the case of any federal, state, local or
foreign joint, consolidated, combined, unitary or group relief system Returns,
such cooperation shall also relate to any other taxable
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periods in which one party could reasonably require the assistance of another
party in obtaining any necessary information.
(d) For a period of seven (7) years after the Closing Date or such
longer period as may be required by law, the Acquiror shall, and shall
cause its Subsidiaries to, retain all Returns, books and records of, or with
respect to the activities of, the Price Entities for all Pre-Closing Periods.
Thereafter, prior to disposing of such Returns, books and records, Acquiror
shall, and shall cause their respective Subsidiaries to, provide the Prices
reasonable notice and opportunity to take possession of such Returns, books and
records at the Prices' expense.
10.8 Tax Sharing Agreements. Any Tax sharing agreements between any
of the Price Entities, on the one hand, and any Affiliates of the Price
Entities that are not themselves Price Entities, on the other hand, shall be
terminated on or before the Closing Date and shall thereafter have no further
effect for any past, present or future taxable year.
10.9 Survival. Notwithstanding any other provision of this
Agreement, the provisions of this Article X and the second sentence of
Section 7.1, Sections 7.5, 7.6, 7.7, 8.7 and 8.14 shall survive the Closing
until the expiration of all applicable statutes of limitations.
ARTICLE XI
CONDITIONS PRECEDENT
11.1 Conditions to Each Party's Obligation to Effect the
Transactions. The respective obligations of the parties to effect or
participate in, as applicable, the AGC Acquisition, the GEI Acquisition and the
Transferred Interests Acquisition shall be subject to the satisfaction, or
waiver, at or prior to the Closing of the following conditions:
(a) No Injunctions or Restraints; Illegality. No order,
injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition (an "INJUNCTION")
preventing the consummation of the AGC Acquisition, the GEI Acquisition, the
Transferred Interests Acquisition or any of the other transactions contemplated
by this Agreement shall be in effect. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, promulgated or enforced
by any Governmental Authority which prohibits, materially restricts or makes
illegal consummation of the AGC Acquisition, the GEI Acquisition, the
Transferred Interests Acquisition or any other transaction contemplated by this
Agreement.
(b) Antitrust Approval. Any waiting period applicable under the
HSR Act, or other applicable antitrust laws, shall have been terminated or
expired and any applicable material foreign legal requirements relating to the
consummation of the transactions contemplated by the Acquisition Transactions
shall have been complied with, as necessary.
(c) Consummation of the Transactions Contemplated by the Merger
Agreement. Each of the conditions set forth in Article VII of the Merger
Agreement (other than the condition set forth in Section 7.01(c)) shall have
been satisfied or waived and the parties to the Merger Agreement shall be
prepared to close the transactions contemplated by such agreement substantially
simultaneously with the Closing hereunder.
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11.2 Conditions to Obligations of Acquiror. The obligations of
Acquiror to effect the AGC Acquisition, the GEI Acquisition and the
Transferred Interests Acquisition, are also subject to the satisfaction, or
waiver by the Acquiror, at or prior to the Closing, of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Price Group set forth in this Agreement shall be true and
correct as of the date of this Agreement (except that if such representations
and warranties speak as of an earlier date they shall be true and correct as of
such date) and as of the Closing Date as though made on and as of the Closing
Date, provided, however, that for purposes of this paragraph, such
representations and warranties (other than the representations set forth in
Sections 5.3(a), 5.5, 6.1 and 6.3 which shall be true in all respects, and the
representations and warranties set forth in Section 5.7, which shall be true in
all material respects) shall be deemed to be true and correct unless the failure
or failures of such representations and warranties to be so true and correct,
individually or in the aggregate, and without giving effect to any qualification
as to materiality set forth in such representations or warranties, would have a
Price Material Adverse Effect. Acquiror shall have received a certificate signed
on behalf of each of AGC, GEI and each of the Transferred Entities by the Chief
Executive Officer and the Chief Financial Officer of such entity and a
certificate signed by the Prices and the Trusts on behalf of each of AGC, GEI
and each of the Transferred Entities and on their own behalf to the foregoing
effect.
(b) Performance of Obligations of the Price Group. Each member
of the Price Group shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date, and Acquiror shall have received a certificate signed on
behalf of each of AGC, GEI and each of the Transferred Entities by the Chief
Executive Officer and the Chief Financial Officer of such entity and a
certificate signed by the Prices on behalf of each of AGC, GEI and each of the
Transferred Entities and on their own behalf to the foregoing effect.
(c) Regulatory Approvals. Liquor licenses and other operating
permits and consents shall be in place, and be reasonably expected to
remain in place for the foreseeable future, so that after the Closing alcoholic
beverages can continue to be sold and served in essentially the same manner and
on essentially the same terms as before the Closing in compliance with
Applicable Law at facilities subject to Leases or located at Owned Real
Properties that account for at least 80% of the total revenue from the sale
and/or service of beverages recognized by the Price Entities as set forth in
Schedule 11.2(c) of the Disclosure Letter, and all statutory waiting periods in
respect thereof shall have expired (all such approvals and the expiration of all
such waiting periods being referred to herein as the "REQUISITE REGULATORY
APPROVALS").
(d) Lessor Approvals. The aggregate budgeted lease amount set
forth opposite all Leases and NGP Ground Leases on Schedule 11.2(d) of the
AGC Lease Consent Letter (the "COVERED LEASES") which at the Closing are not
Consented Leases shall not exceed the Lease Threshold Amount and Aquiror shall
have received a certificate signed on behalf of AGC by the Chief Executive
Officer and the Chief Financial Officer of AGC to the foregoing effect.
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(e) Other Approvals. The Price Entities shall have received
(and furnished to Acquiror evidence thereof reasonably satisfactory to
Acquiror) the consents set forth on EXHIBIT J (which shall not have expired or
been withdrawn) and to maintain the Contracts and Permits in effect following
the Closing on substantially the same terms as in effect on the date hereof
(excluding all Requisite Regulatory Approvals and approvals or consents relating
to the Leases), other than any such approvals and consents the absence of which
does not and would not reasonably be expected to have a Price Material Adverse
Effect.
(f) Environmental. Environmental Reports for the Owned Real
Properties and the Leased Real Properties to be prepared in accordance with
Section 9.11 of this Agreement shall have been completed (excepting therefrom
all non golf course Leased Real Property that is not adjacent to or used
directly in the operation of any golf course), and the aggregate reasonably
estimated cost of all investigations (other than any phase II investigations
required to be performed pursuant to Section 9.11 of this Agreement or Section
6.14 of the Merger Agreement), cleanup, remediation, disposal and corrective
action identified in such Environmental Reports (with respect to the Leases
excluding costs for which AGC or any of the Price Entities is indemnified or is
otherwise entitled to seek reimbursement from a landlord or other responsible
party who has reasonably sufficient credit to pay such costs) that is either (i)
required to be taken in order that the Owned Real Properties and the Leased Real
Properties or the current use and operation thereof comply with, or have no
liability under, Environmental Laws or (ii) required to be taken by the lenders
providing the Financing or for which funds are required by such lenders to be
reserved and not used for any other purpose or otherwise required by such
lenders to be contributed to Acquiror by its owners to pay such costs (as
evidenced by a certificate addressed to Acquiror to such effect from such
lenders which states that such requirements are, in such lenders' sole judgment,
consistent with such lenders' customary practices for similar transactions),
shall not exceed, in the case of clauses (i) and (ii) when aggregated with the
estimated costs in Section 7.03(h) of the Merger Agreement, $25 million.
11.3 Conditions to Obligations of the Price Group. The obligation of
each member of the Price Group to effect the AGC Acquisition, the GEI
Acquisition and the Transferred Entity Acquisition, as the case may be, is also
subject to the satisfaction or waiver by each member of the Price Group at or
prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Acquiror set forth in this Agreement shall be true and
correct as of the date of this Agreement and (except that if such
representations and warranties speak as of an earlier date they shall be true
and correct as of such date) as of the Closing Date as though made on and as of
the Closing Date; provided, however, that for purposes of this paragraph, such
representations and warranties (other than the representations set forth in
Section 7.2(a), which shall be true in all respects) shall be deemed to be true
and correct unless the failure or failures of such representations and
warranties to be so true and correct, individually or in the aggregate, and
without giving effect to any qualification as to materiality set forth in such
representations or warranties, would have an Acquiror Material Adverse Effect.
The Price Group shall have received a certificate signed on behalf of Acquiror
by an authorized officer, the Chief Executive Officer and the Chief Financial
Officer of Acquiror to the foregoing effect.
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(b) Performance of Obligations of Acquiror. Acquiror shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and the Price Group
shall have received a certificate signed on behalf of Acquiror by an authorized
officer, the Chief Executive Officer and the Chief Financial Officer of Acquiror
to such effect.
ARTICLE XII
TERMINATION AND AMENDMENT
12.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual consent of the Acquiror, on the one hand, and
the Price Group, on the other hand, in a written instrument;
(b) by the Acquiror, if any Governmental Authority or
Authorities fail to grant a regulatory approval or consent and such denial
has become final and nonappealable, as a result of which the condition set forth
in Section 11.2(c), (d) or (e) shall become incapable of being satisfied prior
to the six-month anniversary of the date of this Agreement, or any Governmental
Authority of competent jurisdiction shall have issued a final nonappealable
order permanently enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement, unless the failure of this
condition to have been satisfied shall be due to the failure of the Acquiror to
perform or observe the covenants and agreements of such party set forth herein;
(c) by the Price Group, if any Governmental Authority of
competent jurisdiction shall have issued a final nonappealable order
permanently enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement and such order has had a Price
Material Adverse Effect, unless the failure of this condition to have been
satisfied shall be due to the failure of any member of the Price Group to
perform or observe the covenants and agreements of the Acquiror set forth
herein;
(d) by the Acquiror, on the one hand, or the Price Group, on the
other hand, if the Merger Agreement shall have been terminated pursuant to
Section 8.01 thereof;
(e) by the Acquiror, on the one hand, or the Price Group, on the
other hand, if the Closing shall not have been consummated on or before
March 31, 2003, unless the failure of the Closing to occur by such date shall be
due to the failure of the party seeking to terminate this Agreement to perform
or observe the covenants and agreements (other than the representations and
warranties, which are addressed in Section 8.1(f)) of such party set forth
herein
(f) by the Acquiror, on the one hand, or the Price Group, on the
other hand (provided that the terminating party is not then in material
breach of any representation or warranty (without giving effect to any
qualification as to materiality set forth in such representation or warranty) or
any covenant or other agreement contained herein) if there shall have been a
breach of any of the covenants or agreements or any of the representations or
warranties set forth in this Agreement on the part of any member of the Price
Group, in the case of a termination by the Acquiror, or the Acquiror, in the
case of a termination by the Price Group, which breach, individually or together
with all other such breaches, would constitute, if occurring or continuing on
the Closing Date, the failure of any of the conditions set forth in
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Section 11.2 or 11.3, as the case may be, and which is not cured within 30 days
following written notice to the party committing such breach or by its nature or
timing cannot be cured prior to the Closing Date;
(g) by the Acquiror, if any of the Price Entities shall (i) have
an order of relief entered with respect to it under the federal bankruptcy
laws, (ii) make an assignment for the benefit of creditors, (iii) apply for,
seek, consent to or acquiesce in the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any material portion
of its assets, (iv) institute any proceeding seeking an order for relief under
the federal bankruptcy laws as now or hereinafter in effect or seeking to
adjudicate it as a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or (v) take any action authorize or effect any of the
foregoing;
(h) by the Acquiror, if a receiver, trustee, examiner,
liquidator or similar official shall be appointed for any of the Price
Entities or a proceeding described in Section 12.1(f)(iv) shall be instituted
against any of AGC, GEI or any of the Transferred Entities and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of thirty consecutive days;
(i) by the Price Group, if any of Acquiror, NGP or NGOP shall
(i) have an order of relief entered with respect to it under the federal
bankruptcy laws, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to or acquiesce in the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
material portion of its assets, (iv) institute any proceeding seeking an order
for relief under the federal bankruptcy laws as now or hereinafter in effect or
seeking to adjudicate it as a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or (v) take any action authorize or effect
any of the foregoing;
(j) by the Price Group, if a receiver, trustee, examiner,
liquidator or similar official shall be appointed for any of Acquiror, NGP
or NGOP or a proceeding described in Section 8.1(i)(iv) shall be instituted
against any of Acquiror, NGP or NGOP and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of thirty
consecutive days;
(k) by the Acquiror, on the one hand, or ▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, on the other hand, if AGC shall have an order of relief
entered with respect to it under the federal bankruptcy laws and the Closing
shall not have been consummated on or before the nine-month anniversary of the
date of this Agreement, unless the failure of the Closing to occur by such date
shall be due to the failure of the party seeking to terminate this Agreement to
perform or observe the covenants and agreements of such party set forth herein.
It is agreed and understood that a termination by the Price Group pursuant
to this Section 12.1 shall be effective only when a certificate to that effect
signed by the Prices, the Trusts and the Representative is delivered to the
Acquiror.
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12.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 12.1, this Agreement shall forthwith
become void and have no effect, and none of the Acquiror, the Price Group, any
of their respective Subsidiaries or any of the officers or directors of any of
them shall have any liability of any nature whatsoever hereunder, or in
connection with the transactions contemplated hereby, except that (i) Sections
9.2(b) and Section 14.3 shall survive any termination of this Agreement and (ii)
notwithstanding anything to the contrary contained in this Agreement, none of
the Acquiror or any member of the Price Group shall be relieved or released from
any liabilities or damages arising out of its fraud or willful breach of any
provision of this Agreement.
12.3 Amendment. Subject to compliance with Applicable Law, this
Agreement may be amended by the parties hereto, by action taken or
authorized by their respective Boards of Directors or comparable governing body.
Notwithstanding anything herein to the contrary, it is agreed and understood
that this Agreement may not be amended except by an instrument in writing signed
by the Acquiror, the Prices, the Trusts and the Representative on behalf of each
of the parties hereto.
12.4 Extension; Waiver. At any time prior to the Closing, the
parties hereto, by action taken or authorized by their respective Board of
Directors or comparable governing body, may, to the extent legally allowed, (a)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions contained herein.
Notwithstanding anything herein to the contrary, any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
a written instrument signed on behalf of such party (or, in the case of the
Represented Sellers, the Representative), but such extension or waiver or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
ARTICLE XIII
INDEMNIFICATION
13.1 Indemnification by the Indemnifying Parties.
(a) From and after the Closing, the Indemnifying Parties,
jointly and severally, shall be liable for, and shall indemnify the
Acquiror and its Subsidiaries and each of their respective officers, directors,
employees, stockholders, agents and representatives (the "ACQUIROR
INDEMNITEES"), against and hold them harmless from, any Losses suffered or
incurred by any such Acquiror Indemnitee (other than any Loss relating to Taxes,
for which the indemnification provisions set forth in Section 10.1 shall govern)
arising from, relating to or otherwise in respect of (i) any inaccuracy or
breach of any representation or warranty made by any member of the Price Group
in Sections 5.3(a), 5.5, 5.7 (other than any inaccuracy or breach to the extent
arising from or relating to the requirements of any Environmental Law), 5.8,
5.17 (other than any breach or inaccuracy arising from or relating to Section
5.17(d) or the proviso in the second to last sentence of Section 5.17(b)), 5.18,
5.19, 5.21, 5.22 and 5.23 of this Agreement (it being agreed that solely for
purposes of establishing whether any matter is indemnifiable pursuant to this
clause (i), the accuracy of the representations and warranties made by the Price
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Group shall be determined without giving effect to any qualifications
relating to materiality (including a Price Material Adverse Effect), but with
giving effect to qualifications as to Nonmaterial Property Matters), (ii) the
breach of any covenant or agreement of any covenant of the Price Group in this
Agreement (other than covenants and agreements contained in Articles VI and X),
(iii) any claims by any person other than the parties hereto to any portion of
the consideration provided for hereunder or to any other amounts based thereon,
(iv) all liabilities and obligations of Myreshan, Inc. and RSJ Golf, Inc. with
respect to acts or omissions occurring on or prior to the Closing Date; and (v)
all Losses incurred by the Price Entities in resolving claims arising out of the
matters disclosed in items 5.14(d), (e) and (f)(relating to 401k and VEBA loan
issues) of Schedule 5.14 of the Price Disclosure Schedule.
(b) The Indemnifying Parties shall not be required to indemnify
any Acquiror Indemnitee under Section 13.1(a)(i), and shall not have any
liability under Section 13.1(a)(i), in relation to claims arising under Sections
5.3(a), 5.7, 5.8, 5.17, 5.18, 5.19(a), 5.19(c), 5.21(a)(i), 5.22 and 5.23,
unless the aggregate of all Losses for which the Indemnifying Parties would, but
for this Section 13.1(b), be liable thereunder exceeds on a cumulative basis an
amount equal to the Price Group Indemnity Threshold whereupon, the Indemnifying
Parties shall be required to indemnify the Acquiror Indemnitees for all Losses
from the first dollar of Loss; provided, however, that the Indemnifying Parties
shall be liable for Losses to the extent relating to or arising from
inaccuracies or breaches of any representation or warranty contained in Section
5.7(b), only if such Losses exceed the Price Group Indemnity Threshold and then
only to the extent that the aggregate of all such Losses exceeds on a cumulative
basis $2.5 million.
13.2 Calculation and Payment of Losses.
(a) The amount of any Loss for which indemnification is provided
under this Article XIII or Article X shall be net of any amounts actually
recovered by the Indemnified Party under insurance policies with respect to such
Loss and shall be reduced to take account of any net Tax Benefit realized by the
Indemnified Party arising from the incurrence or payment of any such Loss, in
each case when and as such Tax cost or Tax Benefit is actually realized through
an increase or reduction of Taxes otherwise due. The amount due after any such
reduction shall then be increased to take account of any net Tax cost (other
than a reduction in Tax basis) incurred by the Indemnified Party arising from
the receipt of indemnity payments hereunder (grossed up for such increase). Any
indemnity payment under this Agreement shall be treated for tax purposes as an
adjustment to the consideration paid in the Acquisition Transaction.
(b) The aggregate indemnification obligations of the
Indemnifying Parties pursuant to Article X and this Article XIII, shall not
exceed the Price Group Indemnity Cap; provided that until indemnifiable Losses
in an amount equal to the Price Group Indemnity Cap have been claimed and
satisfied, Losses attributable to Income Taxes for which there is an
indemnification obligation pursuant to Section 10.1 shall be aggregated with all
other indemnifiable Losses for purposes of determining if the aggregate
indemnification obligations of the Indemnifying Parties has exceeded the Price
Group Indemnity Cap, and thereafter the Indemnifying Parties shall, jointly and
severally (notwithstanding anything to the contrary in this Section 13.2(b))
indemnify and hold harmless each of the Acquiror Indemnitees against one half of
all Losses attributable to Income Taxes for which there is an indemnification
obligation pursuant to Section 10.1 (other than Losses treated under Section
13.2(c)); and, provided further,
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that such limitation shall not apply to the extent that a Loss results
directly from (A) fraud, (B) a claim described in Section 13.1(a)(ii), (iii) or
(iv) or (C) a claim arising from a breach of the representations set forth in
Sections 5.5, 5.19(b) and 5.21(a)(ii) (each of (A), (B) and (C) an "ACQUIROR
INDEMNITEE LIMITATION EXCEPTION") and provided further, that such limitation
shall not apply to legal fees and expenses awarded under Section 13.5(b) and
incurred collecting a final determination of liability pursuant to this Article
XIII.
(c) Notwithstanding anything to the contrary in this Agreement,
the Indemnifying Parties shall, jointly and severally, indemnify and hold
harmless each of the Acquiror Indemnitees against any and all Losses
attributable to a breach of the representation in section 10.6(c) (but only to
the extent it related to AGC). Payments made pursuant to this Section 13.2(c)
shall not be aggregated with all other indemnifiable Losses for the purpose of
determining if the aggregate indemnification obligations of the Indemnifying
Parties has exceeded the Price Group Indemnity Cap.
(d) On or prior to the Closing, each of the Indemnifying Parties shall
execute and deliver to the Acquiror an escrow and pledge agreement in the
form attached as Exhibit E. On the Closing Date, the Indemnifying Parties shall
pledge to the Acquiror an amount equal to $14 million in cash and grant the
Acquiror a first priority lien on the Indemnifying Parties Acquiror Equity
Securities issuable upon exercise of the warrants and the NGP Equity Interests.
13.3 Termination of Indemnification. The obligations to indemnify
and hold harmless any Person pursuant to Article X and Section 13.1 shall
terminate when the applicable representation or warranty or covenant terminates
pursuant to Section 14.2 (subject to Section 10.9); provided that such
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the Person to be indemnified shall have, before the
expiration of the applicable period, previously made a bona fide claim by
delivering a notice of such claim pursuant to Section 13.4 to the Indemnifying
Party; provided, further, that in the event of a Acquiror Indemnitee Limitation
Exception, the obligation to indemnify shall continue until the expiration of
the applicable statute of limitations.
13.4 Procedures.
(a) Third Party Claims. In order for a Person (the "INDEMNIFIED
PARTIES") to be entitled to any indemnification provided for under Section
10.1 or Section 13.1 in respect of, arising out of or involving a claim made by
any Person (other than the parties hereto) against the Indemnified Parties (a
"THIRD PARTY CLAIM"), such Indemnified Parties must notify the indemnifying
party in writing of the Third Party Claim promptly following receipt by such
Indemnified Parties of written notice of the Third Party Claim; provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the indemnifying party
shall have been actually prejudiced as a result of such failure. Thereafter, the
Indemnified Parties shall deliver to the indemnifying party, as promptly as
practicable following the Indemnified Parties' receipt thereof, copies of all
notices and documents (including court papers) received by the Indemnified
Parties relating to the Third Party Claim that are not separately addressed to
the indemnifying party.
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(b) Assumption. If a Third Party Claim is made against any of
the Indemnified Parties, the Indemnifying Party shall (upon notice to the
Indemnified Parties) be entitled to participate in the defense thereof and, if
it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Parties; provided, however, that such counsel is not reasonably
objected to by the Indemnified Parties; provided further that the Indemnifying
Parties shall not be entitled to assume the defense of a Third Party Claim
unless and until the Indemnifying Parties have agreed in writing that it is
obligated to indemnify the Indemnified Parties in full for such Third Party
Claim. Except as provided below, if the Indemnifying Parties elect to assume the
defense of a Third Party Claim, the Indemnifying Parties shall not be liable to
the Indemnified Parties for any reasonable legal expenses subsequently incurred
by the Indemnified Parties in connection with the defense thereof. If the
Indemnifying Parties assume such defense, the Indemnified Parties shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Indemnifying Parties, it
being understood that the Indemnifying Parties shall control such defense;
provided that the Indemnifying Party shall bear the reasonable fees and expenses
of such separate counsel (i) if the parties to any such action or proceeding
(including impleaded parties) include any of the Indemnified Parties and any of
the Indemnifying Parties, and representation of such Indemnifying Parties and
any such Indemnified Parties, be inappropriate due to a conflict of interest or
(ii) if the Indemnifying Parties shall not have employed counsel (other than
counsel that is reasonably objected to by the Indemnified Parties) within a
reasonable time after the Indemnified Parties has given notice of the
institution of a Third Party Claim in compliance with Section 13.4(a). If the
Indemnifying Parties elects not to defend such Third Party Claims and the
Indemnified Parties litigates or otherwise contests or settles such Third Party
Claim, then the Indemnifying Parties shall promptly reimburse the Indemnified
Parties for all damages incurred by the Indemnified Parties, including the
amount of any judgment or settlement and reasonable attorney's fees. If the
Indemnifying Party chooses to defend or prosecute a Third Party Claim, all the
Indemnified Parties shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the Indemnifying Party's
request) the provision to the Indemnifying Party of records and information that
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. If the Indemnifying Party
assumes the defense of a Third Party Claim, the Indemnified Parties shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the Indemnifying Parties' prior written consent (which
consent shall not be unreasonably withheld or delayed). If the Indemnifying
Parties assume the defense of a Third Party Claim, the Indemnified Parties shall
not be obligated to agree to any settlement, compromise or discharge of a Third
Party Claim that the Indemnifying Parties may recommend, unless by its terms
such settlement, compromise or discharge obligates the Indemnifying Parties to
pay the full amount of the liability in connection with such Third Party Claim,
releases the Indemnified Parties completely in connection with such Third Party
Claim and would not otherwise materially adversely affect the Indemnified
Parties. Without limiting the foregoing, in connection with Third Party Claims
for which the Indemnifying Parties have indemnified the Acquiror pursuant to
Section 13.1(a)(v), the Indemnifying Parties may elect to have counsel for the
Acquiror assume the defense of such Third Party Claims, in which event, the
actions and strategy of the Indemnified Parties shall be subject to the
reasonable approval of the Indemnifying Parties,
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provided, however, that this sentence shall not be deemed a waiver of the
Indemnifying Parties to consent to any settlement with respect to any Third
Party Claim pursuant to this Section 13.4.
(c) Other Claims. In the event any Indemnified Parties shall
have a claim against any Indemnifying Parties under Section 10.1 or Section
13.1 that does not involve a Third Party Claim being asserted against or sought
to be collected from such Indemnified Parties, the Indemnified Parties shall
deliver notice of such claim with reasonable promptness to the Indemnifying
Parties. Subject to Sections 13.3 and 15.2, notwithstanding the foregoing, the
failure by any Indemnified Parties so to notify the Indemnifying Parties shall
not relieve the Indemnifying Parties from any liability that it may have to such
Indemnified Parties under Section 10.1 or Section 13.1, except to the extent
that the Indemnifying Parties shall have been actually prejudiced by such
failure. The Indemnifying Parties shall have a period of 15 days after the
receipt of notice of a claim within which to respond thereto. If any such
Indemnifying Parties do not respond in writing within such 15-day period, such
Indemnifying Parties shall be conclusively deemed to have consented to the
recovery by the Indemnified Person of the full amount of Losses specified in the
notice of claim. If such Indemnifying Parties rejects such claim in whole or in
part (a "CONTESTED CLAIM"), the parties shall resolve such claim by (i) a
written settlement agreement or (ii) in the absence of a written settlement
agreement, by submitting the Contested Claim to binding arbitration pursuant to
Section 13.5 of this Agreement.
13.5 Arbitration.
(a) The Acquiror and each of the Indemnifying Parties agree that
any Contested Claim which has not been settled within 15 days after the
Indemnifying Party rejects such claim in whole or in part shall be submitted to
mandatory, final and binding arbitration before J.A.M.S. ENDISPUTE or its
successor ("J.A.M.S."), pursuant to the United States Arbitration Act, 9 U.S.C.,
Section 1 et seq. and that any such arbitration will be conducted in Los Angeles
County, California. The Acquiror and the Indemnifying Parties may commence the
arbitration process called for by this Article XIII by filing a written demand
for arbitration with J.A.M.S. and giving a copy of such demand to each of the
other parties to this Agreement. The arbitration will be conducted in accordance
with the provisions of J.A.M.S.'s Streamlined Arbitration Rules and Procedures
in effect at the time of filing of the demand for arbitration, subject to the
provisions of this Section 13.5; provided however that in all events discovery
shall be available to each party to the same extent as it would be if the claim
were litigated in a judicial proceeding governed by Delaware law exclusively.
The parties will cooperate with J.A.M.S. and with each other in promptly
selecting an arbitrator from J.A.M.S.'s panel of neutrals, and in scheduling the
arbitration proceedings in order to fulfill the provisions, purposes and intent
of this Agreement. The parties covenant that they will participate in the
arbitration in good faith, and that they will share in its costs in accordance
with Section 13.5(b) below. The provisions of this Section 13.5 may be enforced
by any court of competent jurisdiction in the State of Delaware, and the party
seeking enforcement will be entitled to an award of all costs, fees and
expenses, including attorneys' fees, to be paid by the party against whom
enforcement is ordered. Subject to the provisions of Section 13.5(h) below,
judgment upon the award rendered by the arbitrator may be entered in any court
having competent jurisdiction.
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(b) Payment of Costs. The Acquiror, on the one hand, and the
Indemnifying Parties, on the other hand, will bear the expense of deposits
and advances required by the arbitrator in equal proportions, but either party
may advance such amounts, subject to recovery as an addition or offset to any
award. The arbitrator will award to the prevailing party, as determined by the
arbitrator, all reasonable costs, fees and expenses related to the arbitration,
including reasonable fees and expenses of attorneys, accountants and other
professionals incurred by the prevailing party. If such an award would result in
manifest injustice, however, the arbitrator may apportion such costs, fees and
expenses between the parties in such a manner as the arbitrator deems just and
equitable.
(c) Burden of Proof. For any Contested Claim submitted to
arbitration, the burden of proof will be as it would be if the claim were
litigated in a judicial proceeding governed by Delaware law exclusively.
(d) Award. Upon the conclusion of any arbitration proceedings
hereunder, the arbitrator will render findings of fact and conclusions of
law and a final written arbitration award setting forth the basis and reasons
for any decision reached (the "FINAL AWARD") and will deliver such documents to
the Acquiror and the Indemnifying Parties, together with a signed copy of the
Final Award. Subject to the provisions of Section 13.5(h) below, the Final Award
will constitute a conclusive determination of all issues in question, binding
upon the Acquiror and the Indemnifying Parties, and will include an affirmative
statement to such effect. To the extent that the Final Award determines that any
Indemnified Party has actually incurred Losses in connection with the Contested
Claim through the date of the Final Award ("INCURRED LOSSES"), the Final Award
will set forth and award to such indemnified person the amount of such Incurred
Losses. Nothing in this Section 13.5(d) shall be deemed to relieve any
Indemnified Party from any duty that may be imposed on such person by Applicable
Law to attempt to mitigate such person's damages.
(e) Timing. The Acquiror, the Indemnifying Parties and the
arbitrator will conclude each arbitration pursuant to this Section 13.5 as
promptly as possible for the Contested Claim being arbitrated.
(f) Terms of Arbitration. The arbitrator chosen in accordance
with these provisions will not have the power to alter, amend or otherwise
affect the terms of these arbitration provisions or the provisions of this
Agreement.
(g) Exclusive Remedy. Except as specifically otherwise provided
in this Agreement, arbitration conducted in accordance with this Agreement
will be the sole and exclusive remedy of the parties for any claim made pursuant
to this Article XIII and Section 10.1.
(h) Treatment of Losses. Upon issuance and delivery of the Final
Award as provided in Section 13.5(d) above, an Indemnified Party will
immediately be entitled to recover the amount of any Incurred Losses determined
and awarded to such Indemnified Party under such Final Award and such Incurred
Losses will be deemed to be owed to such Indemnified Party for purposes of this
Agreement.
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13.6 Rights of Offset for Certain Breaches. If the Closing shall
occur and the applicable parties hereto agree that at the time of Closing
the representations and warranties set forth in Sections 5.19(b) or 5.21(a)(ii)
and 5.21(b) are not true and correct in all respects, then Acquiror and
Acquiror's Affiliates will be entitled to exercise rights of set off against any
amounts payable to the Indemnifying Parties under this Agreement or the Merger
Agreement to the extent of any Losses of Acquiror arising out of the failure of
such representations and warranties to be correct, such payment shall for the
purposes of this Agreement be treated as indemnity payments pursuant to this
Article XIII.
13.7 Exclusive Remedy. The parties hereto hereby acknowledge and
agree that, from and after the Closing except in the case of fraud, willful
breach or with respect to matters for which the remedy of specific performance,
injunctive relief or other non-monetary equitable remedies (other than
declaratory judgment actions) are available, the sole and exclusive remedy of
the parties hereto with respect to any and all monetary claims arising from any
breach of any covenant, agreement, representation or warranty set forth herein
(other than in Sections 6.3 or 10.6) shall be pursuant to the indemnification
provisions set forth in this Article XIII, and the sole and exclusive remedy of
the parties hereto with respect to any and all monetary claims with respect to
any breach of any representation or warranty set forth in Section 10.6, shall be
pursuant to the indemnification provisions of Article X as modified by this
Article XIII.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Closing. Subject to the terms and conditions of this Agreement,
the closing of the AGC Acquisition, the GEI Acquisition and the Transferred
Entity Acquisition (the "CLOSING") will take place at 10:00 a.m. on a date and
at a place to be specified by the parties, which shall be no later than three
Business Days after the satisfaction or waiver (subject to applicable law) of
the latest to occur of the conditions set forth in Article IX, unless extended
by mutual agreement of the parties but in all circumstances will be on the same
date as the consummation of the NGP Merger, NGOP Merger and the other
transactions contemplated by the Merger Agreement (the "CLOSING DATE").
14.2 Survival of Representations, Warranties and Agreements.
Notwithstanding (a) any investigation or examination conducted with respect
to, or any knowledge acquired (or capable of being acquired) about the accuracy
or inaccuracy of or compliance with, any representation, warranty, covenant,
agreement, undertaking or obligation made by or on behalf of the parties hereto,
(b) the waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant, agreement,
undertaking or obligation or (c) the Closing hereunder, and subject to Section
10.9, all representations and warranties in this Agreement, including any
covenants, exhibits or schedules made a part of this Agreement, or in any
instrument executed and delivered in fulfillment of the requirements of this
Agreement and any covenants or other agreements the performance of which is
specified to occur on or prior to the Closing Date or the Closing shall survive
the Closing until March 31, 2004; except that the representations and warranties
in Section 5.5 shall not terminate, but shall continue until the expiration of
the statute of limitations relating thereto. Subject to Section 10.9, all
covenants or other agreements which by their terms are required to be performed
after the
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Closing shall survive the Closing indefinitely or for such lesser period of
time as may be specified herein.
14.3 Expenses. Except as otherwise expressly provided herein, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense provided however that all transfer taxes required to be paid in
connection with the transactions contemplated hereby shall be shared equally by
the Indemnifying Parties, on the one hand, and the Acquiror, on the other.
14.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, (b) on the first Business Day following the date of
dispatch if delivered by a nationally recognized next-day courier service, (c)
on the third Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid or (d)
if sent by facsimile transmission, when transmitted and receipt is confirmed.
All notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
(a) if to Acquiror, to:
New AGC LLC
▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
Dechert
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) if to the Prices, to:
▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the AGC Sellers, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇
American Golf Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if to American Golf Corporation, to:
American Golf Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax:
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(e) if to Golf Enterprises, Inc.:
Golf Enterprises, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax:
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with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(f) if to the Transferred Entity Sellers, to:
American Golf Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax:
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
14.5 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". No provision of this Agreement shall be construed to require the
Acquiror, the Prices, the Trusts, AGC, GEI, the AGC Sellers or the Transferred
Entity Sellers or any of their respective Subsidiaries or affiliates to take any
action which would violate Applicable Law. For purposes of this Agreement the
"ordinary course of business" shall mean the ordinary course of business for a
comparable company in the property management industry. It is agreed and
understood that any bankruptcy or similar proceeding with respect to a party to
a Contract instituted after the Closing Date, or a rejection of such Contract in
any such proceeding, shall not itself cause a breach of Section 5.8.
Notwithstanding anything herein to the contrary, no Seller shall have any
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obligation with respect to any covenant or agreement contained in Article
VIII, except pursuant to Sections 8.4 and 9.1.
14.6 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
14.7 Entire Agreement. This Agreement (including the attachments
hereto and the documents and the instruments referred to herein (including
the Disclosure Letter)) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof other than the Confidentiality
Agreement.
14.8 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law provisions thereof that may require the application
of the laws of another jurisdiction (except to the extent that mandatory
provisions of federal law are applicable). Subject to Section 13.5, the parties
hereby irrevocably submit to the exclusive jurisdiction of the courts of the
State of Delaware and the Federal courts of the United States of America located
in the State of Delaware in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and in respect of the transactions contemplated hereby, and hereby waive, and
agree not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such a Delaware State
or Federal court. Subject to Section 13.5, the parties hereby consent to and
grant any such court jurisdiction over the person of such parties and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in this Section 14.8 or in such other manner
as may be permitted by law shall be valid and sufficient service thereof.
14.9 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
14.10 Publicity. Except as otherwise required by Applicable Law,
none of the Acquiror, on the one hand, or the Price Group, on the other
hand, shall, or shall permit any of its Subsidiaries or Affiliates to, issue or
cause the publication of any press release or other public announcement with
respect to, or otherwise make any public statement concerning, the transactions
contemplated by this Agreement without the consent of the Prices, in the case of
a proposed announcement or statement by the Acquiror, or the Acquiror, in the
case of a proposed
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announcement or statement by any member of the Price Group, which consent
shall not be unreasonably withheld.
14.11 Assignment; Third Party Beneficiaries. Subject to the last
sentence of this Section 14.11, neither this Agreement nor any of the
rights, interests or obligations shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior written consent of
the other parties. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. Except with respect to Indemnified
Parties pursuant to Section 10.1 or Section 13.1, this Agreement (including the
documents and instruments referred to herein) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. This
Agreement and the rights, interests or obligations hereunder may be assigned by
the Acquiror to any Affiliate of the Acquiror provided that such assignment
shall not relieve the Acquiror from any obligation hereunder and provided
further that such assignment does not (a) alter the consideration or change the
amount of consideration to be issued in respect of the AGC Acquisition, the GEI
Acquisition and the Transferred Interest Acquisition as provided herein, (b)
materially delay the consummation of the transactions contemplated hereby, (c)
adversely affect any party's ability to satisfy any of the closing conditions
set forth in Article XI, or (d) adversely affect the tax consequences of any
Acquisition Transaction to any party, provided that, in the case of (d) the
affected party will use reasonable efforts to mitigate the adverse tax
consequences so as to permit the assignment.
14.12 Waiver of Jury Trial. THE ACQUIROR, THE PRICES, AGC, GEI, THE
AGC SELLERS AND THE TRANSFERRED ENTITY SELLERS HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
14.13 Termination of AGC Seller Agreements.
(a) The parties hereto agree that the agreements listed on
EXHIBIT F hereto (the "AGC SELLER AGREEMENTS") shall terminate as of the
Closing Date. Such termination shall: (i) fully release each party to the AGC
Seller Agreements and the AGC Equity Interests from any and all restrictions,
including voting restrictions contained in any of the AGC Seller Agreements;
(ii) fully release each party to the AGC Seller Agreements from any and all
pledges of AGC Equity Interests under any of the AGC Seller Agreements; and
(iii) fully release each party to the AGC Seller Agreements from any and all
obligations and rights provided under the AGC Seller Agreements.
(b) The Consent of Trustee in the form attached hereto as
EXHIBIT G shall be executed on the date hereof.
14.14 Representative of the AGC Sellers and Transferred Entity Sellers.
The AGC Sellers and Transferred Entity Sellers, other than the Trusts
(collectively, the "REPRESENTED SELLERS") hereby designate ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as their representative (collectively, the
"REPRESENTATIVE") and as the attorney-in-fact and agent for and
-74-
on behalf of each such person with respect to the taking by the
Representative of any and all actions and the making of any decisions required
or permitted to be taken by the Represented Sellers under this Agreement. The
Represented Sellers will be bound by all actions taken and documents executed by
the Representative in connection herewith, and Acquiror will be entitled to rely
on any action or decision of the Representative. In performing the functions
specified in this Agreement, the Representative will not be liable to any
Represented Seller or any other signatory to this Agreement in the absence of
gross negligence or willful misconduct on the part of the Representative. Any
out-of-pocket costs and expenses reasonably incurred by the Representative in
connection with actions taken by the Representative pursuant to the terms hereof
(including the hiring of legal counsel and the incurring of legal fees and
costs) will be paid by the Represented Sellers to the Representative pro rata in
proportion to their respective percentage equity interests as reflected in
EXHIBIT B to this Agreement. A majority of the percentage equity interests of
the Represented Sellers (as reflected in EXHIBIT B to this Agreement) may from
time to time in their sole and absolute discretion replace or substitute the
Representative by sending to the Acquiror written notice of their desire to
replace or substitute the Representative and stating the name of the successor
representative. Such successor representative shall be deemed the Representative
for all purposes of this Agreement.
(signature pages follow)
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IN WITNESS WHEREOF, the parties below have caused this Agreement to be
executed by themselves or their respective officers or representatives thereunto
duly authorized as of the date first above written.
NEW AGC LLC
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
AMERICAN GOLF CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
GOLF ENTERPRISES, INC.
By:/s/: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/: Dallas P. Price
---------------------------
Dallas P. Price
▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust dated March 5, Dallas P. Price Trust dated May 14,
1998, as amended 1998, as amended
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By:/s/ Dallas P. Price
------------------------ ------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ Dallas P. Price
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1995 Revocable Trust ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
dated March 30, 1995
/s/: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- ---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Revocable Trust dated ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
December 3, 1996
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Custodian under
-----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Trustee California Uniform Transfers to
Minors Act
The ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Trust dated April 4, 2001
By:/s/ Hillary ▇▇▇▇ ▇▇▇▇▇▇▇▇
By:/s/ Hillary ▇▇▇▇ ▇▇▇▇▇▇▇▇ ----------------------------
-------------------------- Hillary ▇▇▇▇ ▇▇▇▇▇▇▇▇, Custodian under
Hillary ▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee California Uniform Transfers to Minors
Act
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1996 Revocable
Trust dated December 2, 1996
By:/s/ Hillary ▇▇▇▇ ▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------ ------------------------------
Hillary ▇▇▇▇ ▇▇▇▇▇▇▇▇, Custodian under ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
California Uniform Transfer to Minors
Act
The S. ▇▇▇▇▇ ▇▇▇▇▇▇▇ 1996 Revocable
Trust dated December 2, 1996 (as
Amended and Restated October 18, 2000)
By:/s/ S. ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
S. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
/s/:▇▇▇▇▇ ▇▇▇▇ Price /s/: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇ ▇▇▇▇ Price, a married woman as ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, as her sole and
her sole and separate property separate property
/s/: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, a married woman ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, an unmarried woman
as her sole and separate property
/s/:▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇. /s/:▇▇▇▇▇ ▇▇▇▇▇ / ▇▇▇▇▇ ▇▇▇▇ Price
------------------------------ ------------------------------
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇., a married man as ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ Price,
his sole and separate property husband and wife as community property
/s/: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/:▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
RSJ Golf, Inc. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Income Trust, dated
August 23, 1998
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
Title:
/s/: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------- ---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
