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Title: |
Asset Purchase Agreement |
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Date: |
2002 |
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Preview shows 20KB of 227KB total |
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$75 |
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#1289571 |
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ASSET PURCHASE AGREEMENT
-------------------------
between
CALIFA ENTERTAINMENT GROUP, INC.,
V.O.D., INC.,
STEVEN HIRSCH,
DEWI JAMES
&
WILLIAM ASHER
and
PLAYBOY ENTERPRISES, INC.
dated as of
June 29, 2001
Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omissions have been indicated by asterisks ("*****"), and the omitted
text has been filed separately with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE 1 ASSET PURCHASE........................................................................1
1.1 Purchase and Sale of Assets...........................................................1
1.2 Assumption of Certain Liabilities.....................................................2
ARTICLE 2 PURCHASE PRICE AND ALLOCATION.........................................................4
2.1 Purchase Price........................................................................4
2.2 Base Purchase Price...................................................................6
2.3 Performance-Based Purchase Price......................................................7
2.4 Purchase Price Allocation.............................................................8
2.5 Issuance of PEI Shares................................................................8
2.6 Deferral of Sale of Vivid TV Assets..................................................17
ARTICLE 3 CLOSING..............................................................................20
3.1 Closing Date.........................................................................20
3.2 Items to be Delivered at the Closing by the Seller Parties...........................20
3.3 Items to be Delivered at the Closing by PEI..........................................21
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER PArties.................................21
4.1 Organization and Related Matters.....................................................21
4.2 Ownership of Purchased Assets........................................................21
4.3 Authorization; No Conflicts..........................................................22
4.4 Financial Statements; No Changes; No Other Liabilities or Contingencies..............23
4.5 Receivables..........................................................................24
4.6 Accounting Records; Internal Controls................................................24
4.7 Tax and Other Returns and Reports....................................................24
4.8 Material Contracts...................................................................25
4.9 Intangible Property..................................................................26
4.10 Legal Proceedings....................................................................26
4.11 Insurance............................................................................26
4.12 Approvals and Permits................................................................27
4.13 Compliance with Law..................................................................27
4.14 Employee Matters.....................................................................27
4.15 Certain Interests....................................................................28
4.16 Intercompany Transactions............................................................28
4.17 Bank Accounts, Powers, etc...........................................................28
4.18 No Brokers or Finders................................................................28
4.19 Accuracy of Information..............................................................28
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PEI................................................29
5.1 Organization and Related Matters.....................................................29
5.2 Authorization........................................................................29
5.3 No Conflicts.........................................................................29
5.4 PEI Shares...........................................................................29
5.5 No Brokers or Finders................................................................30
5.6 Legal Proceedings....................................................................30
5.7 SEC Filings..........................................................................30
5.8 Bankruptcy...........................................................................30
ARTICLE 6 PRE-CLOSING COVENANTS................................................................30
6.1 Notification of Certain Matters......................................................30
6.2 Conduct of the Business Prior to the Closing Date....................................30
6.3 Preservation of Business Prior to Closing Date.......................................32
6.4 Permits and Approvals................................................................32
6.5 Exclusivity..........................................................................33
6.6 Sales Tax............................................................................33
ARTICLE 7 CONTINUING COVENANTS.................................................................34
7.1 Non-Competition Covenants............................................................34
7.2 Nondisclosure........................................................................35
7.3 *****................................................................................36
7.4 Employee Related Obligations.........................................................36
7.5 Bulk Sales Laws......................................................................36
7.6 Collective Action....................................................................36
7.7 Program Supply Agreements............................................................37
ARTICLE 8 CONDITIONS OF PURCHASE...............................................................37
8.1 General Conditions...................................................................37
8.2 Conditions to Obligations of PEI.....................................................38
8.3 Conditions to Obligations of Sellers.................................................38
ARTICLE 9 TERMINATION OF OBLIGATIONS; SURVIVAL.................................................39
9.1 Termination of Agreement.............................................................39
9.2 Effect of Termination................................................................40
9.3 Survival of Representations and Warranties...........................................40
ARTICLE 10 INDEMNIFICATION......................................................................40
10.1 Obligations of Sellers...............................................................40
10.2 Obligations of PEI...................................................................41
10.3 Certain Tax Matters..................................................................41
10.4 Procedure............................................................................42
10.5 Tax Adjustments......................................................................43
10.6 Limitation on Indemnity..............................................................44
10.7 Offset...............................................................................45
10.8 Notice...............................................................................45
10.9 Survival.............................................................................45
ARTICLE 11 DISPUTE RESOLUTION...................................................................45
11.1 Alternate Dispute Resolution.........................................................45
11.2 Notification and Negotiation.........................................................46
11.3 Arbitration..........................................................................46
11.4 Rules of Arbitration.................................................................46
11.5 Damages..............................................................................47
11.6 Fees and Expenses....................................................................47
11.7 Confidential Negotiations and Proceedings............................................47
11.8 Service of Process...................................................................47
11.9 Choice of Law; Place of Arbitration..................................................48
11.10 Availability of Equitable Relief.....................................................48
11.11 Survival.............................................................................48
ARTICLE 12 GENERAL..............................................................................48
12.1 Cash Payments........................................................................48
12.2 Waivers, Remedies Cumulative, Amendments, etc........................................48
12.3 Schedules; Exhibits; Integration.....................................................48
12.4 FurtherAssurances....................................................................49
12.5 Governing Law........................................................................49
12.6 Representation By Counsel; Interpretation............................................49
12.7 No Assignment; Third Party Beneficiary...............................................49
12.8 Severability.........................................................................49
12.9 Headings.............................................................................50
12.10 Counterparts.........................................................................50
12.11 Public Announcements.................................................................50
12.12 Confidentiality......................................................................50
12.13 Parties in Interest..................................................................51
12.14 Performance by Subsidiaries..........................................................51
12.15 Notices..............................................................................51
12.16 Expenses.............................................................................53
12.17 Knowledge Convention.................................................................53
12.18 Specific Performance.................................................................53
</TABLE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of
June 29, 2001 (the "Effective Date") among Playboy Enterprises, Inc., a
Delaware corporation ("PEI"), on the one hand, and Califa Entertainment
Group, Inc., a California corporation ("Califa"), V.O.D., Inc., a
California corporation ("VODI"; and together with Califa, the "Sellers"),
Steven Hirsch, an individual ("Hirsch"), Dewi James, an individual
("James"), and William Asher, an individual ("Asher"; and together with
Hirsch and James, the "Stockholders"), on the other hand. Sellers,
Stockholders and their respective Affiliates are collectively the "Seller
Parties". Capitalized terms used in the text of this Agreement without
definition are defined in Schedule 1.
R E C I T A L S
A. Sellers own and operate the Business and Stockholders are the
record and beneficial owners of 100% of the Equity Securities of Sellers.
B. Califa desires to sell, and PEI desires to purchase
substantially all of Califa's assets used in the operation and distribution
of the television channels known as "The Hot Network" and "The Hot Zone" on
the terms and conditions set forth in this Agreement (the "Califa Assets").
C. VODI desires to sell, and PEI desires to purchase substantially
all of VODI's assets used in the operation and distribution of the
television channel known as "Vivid TV" and all of the assets used in the
operation and distribution of its video on demand business (other than the
Excluded VODI Businesses) on the terms and conditions set forth in this
Agreement (the "VODI Assets").
In consideration of the mutual promises contained herein and
intending to be legally bound, the parties agree as follows:
ARTICLE 1
ASSET PURCHASE
1.1 Purchase and Sale of Assets.
1.1.1 Purchased Assets. Subject to the terms and conditions of this
Agreement, on the Closing Date Sellers will sell to PEI or its
designated subsidiaries the Califa Assets and VODI Assets, which
are identified in Schedule 1.1.1 (the "Purchased Assets");
provided, however, that the sale of the Vivid TV Assets will be
further subject to Section 2.6. Sellers will identify in Schedule
1.1.1 which Purchased Assets are Califa Assets, Vivid TV Assets
(as defined below) and Other VODI Assets (as defined below).
1.1.2 Excluded Assets. The following assets used in the Business or in
the Excluded VODI Businesses are expressly excluded from the
Purchased Assets (the "Excluded Assets"):
(a) Tangible personal property consisting of vehicles, furniture,
fixtures, equipment, machinery and other tangible personal
property not identified in Schedule 1.1.1
(b) The Vivid Marks, which will be licensed to PEI pursuant to the
Trademark License Agreement.
(c) Intangible Property not identified in Schedule 1.1.1.
(d) The assets identified in Schedule 1.1.2; provided that, without
limiting Section 4.2, assets of Sellers unintentionally omitted
from Schedule 1.1.2 are not Purchased Assets unless identified on
Schedule 1.1.1.
1.2 Assumption of Certain Liabilities.
1.2.1 Liabilities Not Assumed. Except for the liabilities and
obligations specifically assumed pursuant to and identified in
Section 1.2.2, PEI will not assume, will not take the Purchased
Assets subject to and will not be liable for, any liabilities or
obligations of any kind or nature, whether absolute, contingent,
accrued, known or unknown, whenever arising, of any of the Seller
Parties (the "Excluded Liabilities"), including:
(a) Liabilities or obligations incurred, arising from or out of, in
connection with or as a result of claims made by or against any of
the Seller Parties or against PEI or its Affiliates as
successor(s) to the Business with respect to the Purchased Assets
or conduct of the Business prior to the Closing Date, including as
a result of the breach of any Contract by any of the Seller
Parties prior to the Closing Date or the violation by any of the
Seller Parties of any applicable Law prior to the Closing Date,
whether asserted before or after the Closing Date regardless of
whether the Vivid TV Assets transfer upon the Closing or upon the
Vivid TV Closing.
(b) Any liability for indebtedness for borrowed money of any of the
Seller Parties, except as expressly provided for in Section
1.2.2(c), including amounts owed to Hirsch and James for loans in
the amount of $232,950 each, or amounts owed to Califa in the
amount of $1,100,160..
(c) Liabilities or obligations (whether assessed or unassessed) of any
of the Seller Parties for any Taxes, including any Taxes arising
by reason of the transactions contemplated herein, for any period
or portion thereof ending on or prior to the Closing Date, except
as expressly provided for in Section 6.6.
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