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EXHIBIT
10.35
PURCHASE AGREEMENT
[Broadway in Chicago,
LLC]
THIS PURCHASE AGREEMENT (this
“ Agreement ”) is executed and entered
into effective as of November 8, 2007 by and among
(i) LIVE NATION WORLDWIDE, INC. (“ Live
Nation ”), a Delaware corporation, (ii) LAURENCE
CHICAGO, LLC (“ LLC Purchaser ”), an
Illinois limited liability company, and (iii) LAURENCE CHICAGO
VENTURES, LLC (“ Corporate Purchaser ”
and, together with the LLC Purchaser, collectively called the
“ Purchasers ”), an Illinois
corporation.
RECITALS
A. Live Nation Theatrical
Group, Inc. (f/k/a PACE Theatrical Group, Inc.) (“
LNTG ”) and Nederlander Palace Acquisition, LLC
(“ NPA ”) are the sole members of Palace
Operating, LLC (“ Palace ”), an Illinois
limited liability company that is governed by that certain
Operating Agreement (“ Palace Operating
Agreement ”) dated June 19, 2000 and entered
into by and between LNTG and NPA.
B. SFX Theatrical Group, Inc.
(“ SFXTG ”), Windy City Broadway, LLC
(“ Windy ” and together with NPA,
sometimes herein called the “ Remaining
Partners ”) and Palace are the sole members of
Broadway in Chicago, LLC (“ BIC ”), an
Illinois limited liability company that is governed by that certain
Operating Agreement (“ BIC Operating Agreement
”) dated July 1, 2000 and entered into by and among
SFXTG, Windy and Palace.
C. Chicago Theater Company
(“ CTC ”) (i) owns fee simple title
to the Ford Center for the Performing Arts – Oriental Theater
located in Chicago, Illinois free and clear of any and all
mortgages, pledges, security interests or other liens and
(ii) has previously licensed to BIC the right to operate and
exploit the Ford Center for the Performing Arts – Oriental
Theater.
D. TCN Theater Group, Inc.
(“ TCN ”), a Delaware corporation, owns
all of the issued and outstanding shares of capital stock in
CTC.
E. SFXTG, LNTG and TCN
(i) are each direct wholly-owned subsidiaries of Live Nation
and (ii) shall be sometimes herein collectively referred to as
the “ LN Target Companies ”.
F. Upon the terms and subject
to the conditions hereinafter set forth, (i) Live Nation will
cause SFXTG to sell to the LLC Purchaser, and the LLC Purchaser
will purchase from SFXTG, all of SFXTG’s membership interest
in BIC, (ii) Live Nation will cause LNTG to sell to the LLC
Purchaser, and the LLC Purchaser will purchase from LNTG, all of
LNTG’s membership interest in Palace and (iii) Live
Nation will cause TCN to sell to the Corporate Purchaser, and the
Corporate Purchaser will purchase from TCN, all of the issued and
outstanding shares of capital stock in CTC (all of the foregoing
membership interests and shares of capital stock being herein
collectively called the “ LN Chicago Interests
”).
AGREEMENT
NOW THEREFORE, for and in
consideration of $10.00 and other good and valuable consideration
and the mutual covenants and agreements contained herein, the
receipt and sufficiency of which is hereby acknowledged, the
parties to this Agreement do hereby agree as follows:
1. Certain Introductory
Matters .
(a) General
Representations . Each party hereto represents and warrants to
the other parties as follows:
(i) Recitals . The
Recitals are true and correct to the extent that such recitals
relate to or describe such party or such party’s
Affiliates.
(ii) Organization and
Related Matters . Such party (i) is duly organized,
validly existing and in good standing under the laws of the
applicable state and/or country in which it is organized,
(ii) has all necessary power and authority to carry on its
business as now being conducted, and (iii) has the necessary
power and authority to execute, deliver and perform this Agreement
and any related agreements to which it is a party.
(iii) Authorization .
The execution, delivery and performance of this Agreement and any
related agreements by such party has been duly and validly
authorized by all necessary action on the part of such party. This
Agreement constitutes the legal, valid and binding obligation of
such party, enforceable against such party in accordance with its
terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors’
rights generally.
(iv) No Conflicts .
The execution, delivery and performance of this Agreement and any
related agreements by such party does not or, if to be delivered
after the date hereof, will not as of the date of such delivery
violate or constitute a breach or default (whether upon lapse of
time and/or the occurrence of any act or event or otherwise), or
require a consent approval from a third party or filing or
notification to a third party, under (a) the charter documents
of such party, (b) any law to which such party is subject or
(c) any contract to which such party is a party that is
material to the condition, results of operations or conduct of the
business of such party.
(v) Legal Proceedings
. There is no order or action pending or, to the knowledge of such
party, threatened against or affecting such party or any of its
subsidiaries that individually or when aggregated with one or more
other actions has or might reasonably be expected to have a
material adverse effect on such party’s ability to perform
this Agreement or any other aspect of the transactions described
herein.
(vi) Title . Such
party has good and marketable title to all of the rights it is
agreeing to transfer hereunder, free and clear of all liens and
security interests (other than those that will be released at
closing), and, at the closing, such party will deliver such rights
to the other party free and clear of liens and security
interests.
(b) HSR Act . The
transactions contemplated by this Agreement are exempt from the
filing requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated
thereunder for the reasons reflected in the analysis attached
hereto as Exhibit “B” (the “ HSR
Analysis ”). The Purchasers, jointly and severally,
represent and warrant to Live Nation that all of the underlying
facts and information, including the information related to the
ownership of the Remaining Partners and the Purchasers, contained
in the HSR Analysis are true and correct.
(c) Definition of
Affiliate . As used in this Agreement, the term “
Affiliate ” shall mean, with respect to any
specified person, any other person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or
is under common control with such specified person. The term
“person” used in the immediately preceding sentence
shall refer to any individual, partnership, firm, corporation,
association, trust, unincorporated organization, joint venture,
limited liability company or other entity.
2. Closing; Purchase and
Sale . The Closing of the transaction contemplated by this
Agreement (the “ Closing ”) shall be held
at the offices of Gardere Wynne Sewell LLP, 1000 Louisiana, Suite
3400, Houston, Texas 77002-5011 at 9:00 a.m. central time on
December 17, 2007 or such other date as may be mutually agreed
upon by the Purchasers and Live Nation (the day on which the
Closing takes place being herein referred to as the “
Closing Date ”). At the Closing, Live Nation
will cause the LN Target Companies to sell to the Purchasers, and
the Purchasers shall purchase from the LN Target Companies, all of
the LN Chicago Interests, free and clear of all encumbrances, as
more fully set forth herein.
3. Purchase Price
.
(a) The Purchasers will pay
to Live Nation, at the Closing, a cash payment (the “
Purchase Price ”) in an amount equal to the sum
of (i) US $60,000,000 and (ii) fifty percent
(50%) of the amount of BIC’s Excess Cash (herein
defined), payable by wire transfer of immediately available funds
to an account designated in writing by Live Nation in advance of
the execution of this Agreement.
(b) As used herein, “
BIC’s Excess Cash ” shall mean the sum of
(i) all undistributed cash flow of BIC through the Closing
Date and (ii) the amount of undistributed working
capital held by BIC as of the Closing Date, which is typically in
the amount of approximately $200,000. The foregoing amounts shall
be calculated using the same methodology that is used in
calculating the monthly distributions made by BIC to its
members.
(c) Prior to the Closing, the
Purchasers will cause BIC’s staff to prepare, in good faith,
and deliver to Live Nation, a statement (“ Estimated
Cash Flow Statement ”) containing the best estimate
of the amount of the undistributed cash flow of BIC through the
Closing Date (the “ Tentative Amount ”),
using the same methodology that is used in calculating the monthly
distributions made by BIC to its members. At the Closing, the
Tentative Amount shall be used for purposes of determining the
amount of BIC’s Excess Cash and the resulting calculation of
the amount of the Purchase Price. Live Nation shall have the right
to challenge the Tentative Amount by providing notice (“
Challenge Notice ”) to the Purchasers within 30
days following the Closing Date. If Live Nation does not provide a
Challenge Notice within such 30 day period, then the Tentative
Amount shall be final and no subsequent adjustments to the Purchase
Price will be made. If Live Nation should provide a Challenge
Notice to the Purchasers within 30 days following the Closing Date,
then the actual amount of undistributed cash flow through the
Closing Date (“ Undistributed Cash Amount
”) shall be determined as follows:
(i) During the 30 day period
(“ Review Period ”) following delivery of
a timely given Challenge Notice, Live Nation and its
representatives, upon advance request, will be provided with
reasonable access to BIC’s books and records for purposes of
allowing Live Nation to evaluate and verify the Undistributed Cash
Amount. Throughout the Review Period, the parties will cooperate
with one another in attempting to reach mutual agreement regarding
the Undistributed Cash Amount.
(ii) If the parties are
unable to reach mutual agreement with respect to the Undistributed
Cash Amount, then Live Nation may, by written notice to the
Purchasers after the Review Period, require that the calculation of
the Undistributed Cash Amount be finally determined by an
independent certified public accounting firm mutually selected by
the Purchasers and Live Nation (the “ Accounting
Reviewer ”), using the same methodology that is used
in calculating the monthly distributions made by BIC to its
members. The Accounting Reviewer will, within 30 days after being
engaged for such purpose, review the disputed items and make a
final determination of the Undistributed Cash Amount which
determination (i) will be evidenced by the Accounting
Reviewer’s submission to both Live Nation and the Purchasers
of a written report evidencing and supporting in reasonable detail
such determination and (ii) will be final, binding and
conclusive as to the parties for purposes of determining the
Undistributed Cash Amount hereunder and shall not be subject to
further appeal, challenge or alternate dispute resolution or remedy
of any party hereto. All fees and expenses charged by the
Accounting Reviewer shall be paid one-half by Live Nation and
one-half by the Purchasers.
If the Undistributed Cash Amount, as
determined by the Accounting Reviewer or by mutual agreement
between the parties, is more or less than the Tentative Amount,
then the amount of the Purchase Price shall be adjusted
accordingly, and either Live Nation or the Purchasers, as
appropriate, will be required to make an adjusting payment to the
other as necessary to correct the amount of the Purchase Price that
should have been paid at Closing as if the finally determined
Undistributed Cash Amount had been used to calculate the amount of
the Purchase Price at the Closing.
(d) Upon execution of this
Agreement, the Purchasers have (i) provided to Live Nation a
true, correct and complete copy of all agreements, letters and
other documents that evidence commitments for the debt and
financing that will be utilized by the Purchasers to fund the
Purchase Price and (ii) available to them sufficient committed
funds to purchase the LN Chicago Interests in accordance with the
terms of this Agreement and to pay all related fees and expenses.
The right of the Purchasers to receive such committed funds is not
subject to any material condition other than the satisfaction of
the conditions set forth in Section 6 hereof.
4. Closing Deliveries
. In order to close the transaction contemplated herein, the
parties shall do the following at the Closing:
(a) Closing Documents
.
(i) Live Nation shall cause
LNTG to execute and deliver to the LLC Purchaser an Assignment of
Membership Interest in Palace Operating LLC in the form attached as
Exhibit A-1 , and the LLC Purchaser shall execute and
deliver to Live Nation such Assignment of Membership Interest in
Palace Operating LLC.
(ii) Live Nation shall cause
SFXTG to execute and deliver to the LLC Purchaser an Assignment of
Membership Interest in Broadway in Chicago LLC in the form attached
as Exhibit A-2 , and the LLC Purchaser shall execute
(and cause its designee to execute) and deliver to Live Nation such
Assignment of Membership Interest in Broadway in Chicago
LLC.
(iii) Live Nation will cause
TCN to execute and deliver to the Corporate Purchaser an Assignment
of Stock in Chicago Theater Company in the form attached hereto as
Exhibit A-3 and to further deliver to the Corporate
Purchaser the certificate evidencing the shares of stock in CTC as
required by the terms of such Assignment of Stock, and the
Corporate Purchaser shall execute and deliver to Live Nation such
Assignment of Stock in Chicago Theater Company.
(iv) Live Nation will provide
to the Purchasers a fully signed copy of an instrument of release
in which (i) Live Nation, on behalf of itself and all of its
Affiliates, releases CTC from any and all liabilities and
obligations owed to Live Nation or any of its Affiliates, including
any intra-company accounts, notes and payables and (ii) CTC
releases Live Nation and all of its Affiliates from any and all
liabilities and obligations owed to CTC, including any
intra-company accounts, notes or payables.
(v) Live Nation will cause
the members of BIC’s Management Committee that were appointed
by SFXTG to sign instruments of resignation in which such
individuals resign from their respective position as a member of
BIC’s Management Committee and shall deliver originally
signed counterparts thereof to the Purchasers.
(vi) Live Nation will cause
any officers of Palace who are employed by Live Nation or any of
its Affiliates to sign instruments of resignation in which such
individuals resign from their respective position as an officer of
Palace and shall deliver originally signed counterparts thereof to
the Purchasers.
(vii) Live Nation will cause
all of the officers and directors of CTC to sign instruments of
resignation in which such individuals resign from their respective
position as an officer and/or director of CTC and shall deliver
originally signed counterparts thereof to the
Purchasers.
(b) Delivery of Purchase
Price . The Purchasers shall pay and deliver the Purchase Price
to Live Nation by wire transfer in accordance with wiring
instructions provided by Live Nation to the Purchasers prior to
Closing.
(c) Mutual Release .
Live Nation will execute and deliver to the Remaining Partners, and
the Purchasers will cause the Remaining Partners and BIC to execute
and deliver to Live Nation, originally executed counterparts of a
Mutual Release in the form attached hereto as Exhibit A-4
.
5. Confidentiality of this
Agreement .
(a) Without the prior written
consent of Live Nation, except as required by law (such requirement
to be confirmed by a written legal opinion of counsel reasonably
acceptable to Live Nation and addressed to Live Nation) or as
specifically permitted pursuant to Section 5(b), the
Purchasers will not disclose to any person, firm or corporation the
financial terms of this Agreement (“ Confidential
Information ”).
(b) The Purchasers may
disclose the Confidential Information only as follows:
(i) to directors, officers,
employees, legal and business advisors of the Purchasers (the
foregoing being referred to collectively as the Purchasers’
“ Representatives ”) who (A) are
directly involved in the efforts to finance the purchase of the LN
Chicago Interests, (B) are required by written agreement, or
pursuant to the nature of the relationship with the Purchasers, to
maintain the Confidential Information in accordance with this
Agreement; and (C) have a specific need to know such
information; and
(ii) to individual employees
of proposed lenders of the Purchasers (“ Proposed
Lenders ”) who (A) are directly involved in the
consideration of a proposed lending transaction for the funding of
the purchase of the LN Chicago Interests, (B) have signed and
delivered to the Purchasers a written agreement adopting the
confidentiality obligations herein; (C) have a specific need
to know such information and (D) have been identified in
advance to, and reasonably approved by, Live Nation.
The Purchasers shall be responsible to
Live Nation for any breach of this Agreement by any of its
Representatives or Proposed Lenders that receive any of the
Confidential Information pursuant to this
Section 5(b).
(c) Notwithstanding the
foregoing, it is understood and agreed that Live Nation will have
the right to disclose the terms and existence of this Agreement as
follows without violating any express or implied duty or obligation
to the contrary:
(i) pursuant to disclosures
made to any persons selected by Live Nation that have a specific
need to know such information; and
(ii) pursuant to any public
disclosure or filing, including public filings with the Securities
Exchange Commission, filings with the New York Stock Exchange or
any publicly disseminated press release.
If any information is disclosed by Live
Nation in writing to third parties, the Purchasers shall be
released from their confidentiality obligations under this
Section 5 to the extent of that information so
disclosed.
6. Conditions to
Closing .
(a) The obligation of Live
Nation to consummate the transaction contemplated by this Agreement
shall be subject to the satisfaction (or waiver by Live Nation), at
or prior to the Closing, of each of the following
conditions:
(i) The representations and
warranties of the Purchasers contained in this Agreement and to be
contained in the Assignments attached hereto as
Exhibits A-1 , A-2, A-3 and A-4 shall be
true and correct in all material respects as of the Closing Date,
in each case as if made as of the Closing Date.
(ii) The covenants and
agreements contained in this Agreement to be complied with by the
Purchasers at or before the Closing shall have been complied with
in all material respects.
(iii) Live Nation shall have
received a certificate from each of the Purchasers signed by an
executive officer of such Purchaser confirming that the conditions
described in Section 6(a)(i) and (ii) have been satisfied
with respect to such Purchaser.
(b) The obligation of the
Purchasers to consummate the transaction contemplated by this
Agreement shall be subject to the satisfaction (or waiver by the
Purchasers), at or prior to the Closing, of each of the following
conditions:
(i) The representations and
warranties of Live Nation and the LN Target Companies contained in
this Agreement and to be contained in Exhibits A-1 ,
A-2 , A-3 and A-4 shall be true and correct in
all material respects as of the Closing Date, in each case as if
made as of the Closing Date.
(ii) The covenants and
agreements contained in this Agreement to be complied with by Live
Nation at or before the Closing shall have been complied with in
all material respects.
(iii) The Purchasers shall
have received a certificate from Live Nation signed by an executive
officer thereof confirming that the conditions described in
Section 6(b)(i) and (ii) have been satisfied.
7. Termination and
Waiver . This Agreement may be terminated prior to the Closing
in accordance with the following provisions:
(a) Live Nation or the
Purchasers, upon notice to the other, may terminate this Agreement
at any time after the date specified for Closing pursuant to the
provisions of Section 2 hereof if the Closing shall not have
occurred on or before such date; provided, however, that the right
to terminate this Agreement under this Section 7(a) shall not
be available to any party whose failure to fulfill any obligation
under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur on or prior to
such date.
(b) Live Nation or the
Purchasers, if not then in material breach or default under this
Agreement, may terminate this Agreement upon notice to the
non-terminating party, upon a material breach or default by the
non-terminating party that is not cured within thirty
(30) days after receipt by the non-terminating party of
written notice from the terminating party specifying with
particularity such breach or default.
(c) Live Nation and the
Purchasers may terminate this Agreement by mutual written
consent.
If this Agreement should be terminated
as provided in this Section 7, then this Agreement shall
forthwith become void and of no further force or effect and there
shall be no liability on the part of either party except that
nothing herein shall relieve either party from liability for any
breach of this Agreement.
8. Remedies for
Default . If either party fails to perform, or tender
performance, of its obligations under this Agreement, then the
non-defaulting party may, in addition to any other rights or
remedies available at law or in equity, elect to pursue any one or
more of the following rights or remedies:
(a) terminate the
non-defaulting party’s right to close on the sale and
purchase of the LN Chicago Interests;
(b) pursue an action for
actual damages for the defaulting par
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