Michael Jackson’s agreement with AEG was NOT FINAL. We can RELAX now. part 5

Part 5 and Postcript

Speaking about the AEG ‘contract’ one of the readers said to me that “the one you posted was NOT the final version”.

I both agreed and disagreed. Agreed because the papers available to the AEG officials can hardly be called the final or even any contract at all – and disagreed because these papers are indeed final in a sense that this is all Randy Phillips had from Michael Jackson even despite Dr. Tohme and attorney Dennis Hawk ardently working against him behind his back.

Earlier I said that the so-called AEG contract looked like a mere cut-and-paste job where some of the most horrendous pages were inserted into the inside of the letter to Tohme after Michael Jackson had signed its last page (on his own behalf, as the Artist only).

The reason why AEG did this cut-and-paste job was most probably Michael’s refusal to accept their terms and their consequent need to bring together the text of the Promissory Note/ Inducement Letter signed by Michael at another point in time and the only other signed document they had from him (letter to Tohme) in order to reach at least some semblance of a final contract they allegedly had with Michael Jackson.

I will not go over the many reasons why I think their ‘contract’ is a cut-and-paste job (you can read it in previous parts) – all I want to do now is bring out into the open another major contradiction which is related exactly to whether this ‘contract’ is considered final or not.

As is always with AEG papers my discovery was made in a place where I least expected it – in Miscellaneous clause.

What is a Miscellaneous clause?  It is the least important and the most casual of all clauses in a contract as this is a place to store all those small bits and pieces which didn’t fit into the essential clauses of the contract – for example, the number of its copies, the languages it was made in, the equal power of each copy or translation and other necessary but not too important things of the same kind.

Since we know by now that AEG has a very bad habit of concealing the most crucial terms of their agreements in places which are least suitable for them, you probably half-expect now to discover in this clause something extremely important, don’t you? And you are absolutely right in your expectations.

Only two pages prior to the last page of their ‘contract’ which is expressing a wish that the definitive agreement is still to be negotiated,  AEG’s version of Miscellaneous says … you can’t imagine what … it says that this agreement is final and may not be modified or amended except by writing!

What it means is that the middle pages of the AEG paper say that the contract is final and fully agreed on  – while the last page of it hopes that the definitive agreement is still to be made and negotiated “expeditiously and in good faith”.

Amazing, isn’t it? However when someone does a cut-and-paste job such unpleasant discrepancies can occur and are not surprising at all….

On the other hand this discrepancy may not be accidental and may be left there on purpose. Realizing that the last page of their ‘contract’ looks terribly inconclusive AEG crammed the inside pages of it with all sorts of legal demagogue aiming to compensate for all the deficiencies the first and last pages of the letter to Tohme are suffering from.

Last page of the Letter of Intent with a genuine signature of Michael Jackson as the Artist and a fake one for Michael as head of his company

We must understand how difficult a task of these swindlers was. In the absence of a genuine final agreement from the Artist and in order to come up with something more or less credible these crooks needed to tie together the crucial Promissory Note and Inducement Letter and the ordinary Letter of Intent addressed to Tohme – which was most probably the only other signed document they had from Michael Jackson.

But a big problem with the Letter of intent was that it inappropriately closed with “Very truly yours” and this demanded a corresponding opening – so they had no other choice but insert that shabby first page into their ‘contract’ too, though it was awkwardly addressed to “Dear Dr. Tohme” and didn’t even minimally look like a contract.

In fact it isn’t even called a contract but simply states its main subject – Michael Jackson.

The first page of their Letter of Intent sent "For the attention of Dr. Tohme" and addressed to "Dear Dr. Tohme Tohme"

However a good point for the crooks was that the letter carried a date (January 26, 2009) and had at least one Michael’s signature on it (for the Artist only) – so this was at least something they could start with….

The date of that letter was incorporated into the text of the Promissory Note and Inducement Letter which were then presented to Michael as the only condition on which he could get his advances. And when Michael finally signed those papers they happily attached them to the Letter of Intent most probably throwing away its inside and replacing it with a new content – but thus trapping themselves and making this version of their ‘contract’ the only one they can have in principle as all their papers are now forcefully revolving around one date only, which is January 26, 2009.

Inducement Letter carries Michaels signature but has no date. The only thing it does it referring to the date of their "contract" (click on the image to enlarge)

Even if some madman says now that AEG has a beautiful final version of the contract its date should by all means come after the Letter of Intent of January 26, 2009 – but since they have already incorporated this date into their Promissory Note and Inducement Letter, they have fallen into their own trap and cannot say they have anything different from the compilation version they are presenting to us now.

However the shoddiness of all this paperwork was evidenly worrying AEG – so to compensate for the inconclusiveness, indefiniteness and fraudulence of their ‘contract’ (the last page of which carries a forged signature of Michael Jackson as a head of his company) they had to fortify the inside of their ‘contract’ by saying in their Miscellaneous clause that the contract was  final after all…

This won’t do for a court of law of course, but would probably be enough to intimidate and frighten the Artist into thinking that they somehow managed to forge a definitive contract and he will not be able to get away from its terms now…

Let us have a closer look at the Miscellaneous clause which has the audacity to claim that this cut-and-paste paperwork is final.  All of it is extremely interesting as in contrast to usual Miscellaneous not-too-much meaningful  clauses the information contained here is absolutely formidable.

Firstly, it is the only place in the ‘contract’ which refers to the Collateral put up by the Artist as security for Artistco performing its obligations, including repayment of the advances received by the Artist.

The Collateral described in this clause is far more all-inclusive than the one specified in the Promissory Note – now AEG’s greed is such that they want to lay their hands on everything the Artist ever had and will ever have, no matter where it is located and whether owned at present or only in the future – see point 16.3 “Security”:

The formidable MISCELLANEOUS clause in AEGs "contract" with the Artist

If after reading this information anyone dares tell me that the Collateral demanded by AEG is anything similar to what Sony ever did or wanted to do to Michael Jackson, they should be ready for extremely harsh treatment from me as I am no longer prepared to put up with haters’ mantras which focus on the “horrible Sony of 2002” but completely disregard the monstrous AEG of 2009.

Let me remind you that Sony had an option to peacefully obtain 25% of Michael’s share in the Beatles catalog under an agreement with Michael for their help in restructuring his debt,  but up till now they have not exercised this right – while what AEG was planning to do to Michael was not only getting the full share of his catalog but stripping him naked and sending him to a plantation to work for them in unbearable conditions for many years to come:

• 16.3  Security. To secure the faithful performance of Artistco, of Artistco’s and Artist’s obligations under this Agreement (including to repay the Advances), Artistco hereby grants Promoter a lien in all of Artistco’s right, title and interest in, to, and under the following properties, assets and rights wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same being hereinafter referred to collectively as, the “Collateral”): contract rights or rights to the payment of money in which Artistco and/or Artist has an interest, insurance claims and proceeds, commercial tort claims, securities and all other investment property, and all general intangibles (including all accounts receivable and payment intangibles). 
• Artistco shall reasonably cooperate with Promoter in its efforts to perfect such security interest.

Michael Jackson’s company is to “reasonably cooperate” with these gangsters so that they “perfect” the above conditions to enable them to obtain the gigantic Michael’s collateral?

And they have the nerve to say it?!

Let me pass over to the rest of the points in this Miscellaneous clause or I might strangle these monstrous AEG guys or anyone supporting them with my own hands now….

The dreadful Miscellaneous clause also contains a Confidentiality point denying the parties the right to disclose terms of this ‘agreement’ to anyone except the judge (the point which initially prevented Katherine Jackson from seeing this monstrosity):

16.2. Confidentiality. … The material terms of this Agreement shall be kept confidential except to the extent necessary to enforce the terms hereof or as required to comply with the law (such as for example, pursuant to a court order, or where a party must disclose such information to a tax advisor ro accountant for purposes of preparing tax returns or financial statements).

“Miscellaneous” also tells us of conditions on which advances and even Initial advances are to be given to the Artist. The Promissory Note, by the way, did not set any conditions for the Initial advances – on the contrary, it was full of pleasantries and friendly invitations to take their money at no interest at all and for some 14 months too. However now that the Promissory Note is signed, this ‘contract’ is suddenly making tough demands on the Artist as an indispensable condition for obtaining the advances:

The Miscellaneous clause continued - conditions for the advances to the Artist

These conditions include not only the obligation of the Artist to agree to their tour itinerary, and to all Promoters’ activities including their calculation of the Production costs to be borne by the Artist, but also the need to obtain a cancellation insurance to cover the Production costs of the Artist (the proceeds of which will go to AEG) as well as a condition that the Promoter obtains a cancellation insurance in their favor to cover the risk of loss of their Pool expenses – as if it were the Artist’s business whether AEG obtains this cancellation insurance or not!

The clause also obliges the Artist to pay to 2 Seas Records LLC. whatever they ask of him (even if it is the sum equivalent to his advances) or otherwise he will not see the Initial Advances at all:

16.4.2 …Promoter shall have no obligation to pay the Initial Advance until such time as Artistco delivers to Promoter evidence satisfactory to Promoter that the dispute with 2 Seas Records LLC has been settled and that Artistco has either paid the amounts owing to 2 Seas Records LLC under such settlement agreement or will pay such amounts (including by permitting some or all of the Initial Advance to be paid to 2 Seas Records LLC).

AEG’s dragon version of a Miscellaneous clause also contains a very important “Severability” point which means that if the court finds one point of this ‘contract’ invalid the rest will still remain enforceable. The dictionary defines Severability as:

• A clause in a contract that allows for the terms of the contract to be independent of one another, so that if a term in the contract is deemed unenforceable by a court, the contract as a whole will not be deemed unenforceable. If there were no severability clause in a contract, a whole contract could be deemed unenforceable because of one unenforceable term.

It is also in the Miscellaneous clause that AEG says that all approvals and consents “in respect of this Agreement” will be considered duly given if they are sent by fax  – which enables our dear Dr. Tohme to send whatever he likes to AEG and it will become binding on the Artist…

It is “Miscellaneous” again which provides the Addresses of all those to whom all notices and approvals are to be sent – who in this case is only Dr. Tohme and nobody else but Dr. Tohme (plus Dennis J. Hawk, Esq. who is working for Dr. Tohme too).

Everything is to be sent to Dr.Tohme only (and Dennis J.Hawk). Michael Jackson is not even mentioned in these addresses!

Michael Jackson is not even mentioned in those addresses. No, the only star shining in AEG’s sky is dear Dr. Tohme Tohme who, despite being a legal nobody to this ‘agreement’, is the one who will receive and send all approvals and consents on behalf of Michael Jackson. And all photocopies of Michael’s signatures will be considered as valid as originals under this “contract” of theirs too…

But let us get back to the first point of the Miscellaneous clause. And the first point of it brings us to the matter we started here with – the question whether this  ‘contract’ is final or not.

This point is called “Integrated agreement” and since this definition is somewhat of a mystery to us, let us see what the dictionary says about it:

• “In contract law, an integration clause, or merger clause is a term in the language of the contract that declares it to be the complete and final agreement between the parties. It is often placed at or towards the end of the contract.”
• “An agreement is integrated when the parties adopt the writing or writings as the final and complete expression of the agreement.” http://www.answers.com/topic/integrated-agreement

So a mere inclusion of this clause into the contract points to AEG’s desire to create the impression that the agreement is final?  Let us go on with the interpretation of this intergration clause and see what the dictionary says about the force of it.

The follow-up text makes it clear that the ‘integration clause” is now specified mostly for effect as it does not preclude the parties from having other agreements besides those guarded by this clause:

• In the United States, the existence of such a term is normally not conclusive proof that no varied or additional conditions exist with respect to the performance of the contract beyond those that are in the writing but instead is simply evidence of that fact.
• A contract that has such a clause may be deemed an integrated contract, and any previous negotiations in which the parties to the contract had considered different terms will be deemed superseded by the final writing. However, many modern cases have found merger clauses to be only a rebuttable presumption. http://www.answers.com/topic/integration-clause

Aha, so despite all its ‘finality’ many court cases now regard an integrated agreement clause as something which is a presumption only (and not an undisputed obligaiton) which can be even rebutted?  This is a very nice piece of information we should keep in mind in case we need to rebut those who tell us that this clause could make the contract final and binding on Michael Jackson and force him into the slavery terms planned for him by AEG.

However, AEG is doing its best to present an ‘integrated agreement’ clause as a clause which can make the contract final and binding upon the Artist.

It is trying to intimidate the Artist and make him think that all this cut-and-paste mess – which starts as a letter, closes as a letter, and cites all these absolutely dreadful conditions in between – is actually a final contract which may not be modified or amended except by a written consent of the party “to be bound” by such consent.

Please note that AEG includes in its wording all attachments (Exhibits) but never bothers to specify which ones they are (though it is standard practice to enumerate them giving all the necessary details),  thus explaining to us that no matter what Exhibits are attached to this ‘contract’ all of them will be still fine, agreed and obligatory for the Artist even if they add a hundred of them and the Artist never sees them:

16. Miscellaneous.

 16.1 Integrated Agreement. This Agreement, with its Exhibits, is intended by the parties to be the complete and final expression of their agreement, and is specifically intended to be an integrated contract with respect to the matters affected herein. Each party agrees that any prior negotiations, statements, representations or agreements with respect to the subject matter herein are merged in and superseded by this Agreement, and that such party has not relied on any representation or promise, oral or otherwise, which is not set forth in this Agreement. This Agreement may not be modified or amended except by a writing signed by the party to be bound.

You’ve probably noticed that AEG is playing with words in this clause as one and the same word is used here in two meanings – Agreement (with a capital letter) means a “contract” while the same word without a capital letter means the Artist’s consent to the terms stated ‘herein’ and his final acceptance of them.

Thus the sentence which you previously thought contained just a simple repetition of ‘Agreement of agreement’:

• “This Agreement, with its Exhibits, is intended by the parties to be the complete and final expression of their agreement …to the matters affected herein”

should actually read as a ‘Contract expressing the final acceptance of’:

• “This Contract, with its Exhibits, is intended by the parties to be complete and final expression of their acceptance of the terms contained “herein”.

16.1 "INTEGRATED AGREEMENT" within the Miscellaneous clause

The only word which adds a little doubt to the finality of what is happening here is the word “intended” which points to the intentions of the parties only – but you will probably agree that if the intentions are presented as the “final expression of the agreement” finding out whether it is an intention only or the final agreement already is no easy task which can be probably resolved only in arbitration.

After reading about all these ‘final’ agreements in the Miscellaneous clause (which may be rebutted in court though) it is extremely interesting to compare them with the first page of Randy Phillips’s letter to Tohme and refresh in our memory his earlier expectations that “Artistco and Promoter shall reasonably cooperate with each other in an effort to arrive at mutually approved itineraries…” or that “the parties shall attempt in good faith to agree upon the number of Shows that need to be scheduled…”.

The last page of Randy Phillips’s letter to Tohme is also making a dramatic contrast with all this finality inside the Miscellaneous clause as the sentence under which Michael Jackson actually put his signature expressed a strong desire on the part of AEG to still “negotiate the definitive agreement expeditiously and in good faith”.

And if – in addition to all these inconsistencies – you further recall that the last page of this compilation effort was signed by Michael Jackson as an Artist only and not as the head of Michael Jackson Company, LLC and that his signature there is most probably forged – you will understand that calling all this compilation work final, integral, made “in good faith” and with clean hands too will be a very grave exaggeration indeed.

Recently I’ve come across a wealth of legal advice from attorney Ivan Hoffman whose main business lies in the field of Entertainment and Publishing Law.

Since I initially assumed (in part 1) that this ‘contract’ was a letter of intent only and have now come a full circle by bringing up this matter again, let us see what Ivan Hoffman says about the validity of this kind of document, should the court also regarded as a letter of intent:

• “In order to be a valid and enforceable agreement, a document must contain certain essential legal provisions and must not leave either undecided or to be determined at some time in the future any aspect of such essential legal provisions. [this reminder should be sent to AEG so that they don’t forget to make their future contracts clear, definitive and conclusive].
• If these essential elements are not present, then the document is not a binding one and is often referred to by courts as an “agreement to agree” or a letter of intent, both of which are not enforceable as contracts. [agreement to agree? Isn’t it interesting that we have the same wording in the Miscellaneous clause?]
• …the letter of intent is essentially a legally worthless document. [great!]
• It is not clear to me the reason any party would ever bother to create such a document and yet I have seen it used on many occasions. [for some tricksters it is a way to safeguard themselves – in case no final agreement is signed they can meddle with the text of the letter of intent and turn it into a ‘final’ contract].
• However, sometimes one of the parties prepares a document believing it to be a valid and enforceable agreement only to find, after expensive litigation, that it was not a binding agreement at all but merely a non-binding, non-enforceable agreement to agree, or letter of intent”.

So another definition of a letter of intent is “agreement to agree”? But didn’t we see exactly the same wording in our “integrated agreement” clause which also spoke of the “Agreement intended by the parties to be their final agreement”? Which is by the way was only intended by the parties but not really made?

Then what other proof do we need to show that what we are looking at – even after all the adjustments made to it by AEG – is nothing by a Letter of Intent only?

To demonstrate the difference between a contract and a letter of intent Ivan Hoffman describes a dispute which arose from the parties’ wrong interpretation of a letter of intent as the final contract. Since it is very close to what we have in AEG’s case it is an interesting read:

“In Richie Co. LLP vs. Lyndon Insurance Group, Inc., a federal case, … the Court was called upon to decide if a document was a binding obligation or merely an unbinding letter of intent, agreement to agree.  Although the case dealt with an interpretation of Minnesota law, the same general principles of contract law are applicable in most states.

The summary of the facts in that case is as follows:  the plaintiff, Richie, had a previously existing contractual relationship with another entity, Mechanical Breakdown Protection, Inc. (“MBPI”) and proposed, on April 16, 1999, in a writing called “letter of agreement,” [AEG’s document isn’t called anything at all] which writing was signed by all parties, an agreement with the defendant Lyndon, that the defendant would pay Richie on terms that were “substantially identical” to the terms in the MBPI agreement. 

The April 16, 1999 writing set forth certain terms regarding payment to Richie, which terms were to be included in a “subsequently-drafted ‘Service Contract Agreement.’”  This “Service Contract Agreement” was to be entered into within 180 days after the defendant acquired a specific company, called FPC.  That event took place on March 6, 2000.  However, the Service Contract Agreement was never entered into.

The plaintiff sued, claiming that the defendant breached the April 16, 1999 “agreement” by failing to enter into that said Service Contract Agreement.  The Court held that the April 16, 1999 “agreement” was not an agreement at all but a non-binding letter of intent and agreement to agree. 

          The Court stated:  A letter creating an agreement to negotiate in good faith in the future is not enforceable where the parties have contemplated that the agreement is not the complete and final agreement governing the transaction at issue.

          The Court stated further:  However, the parties need not agree on every point, but only that the parties’ intent as to fundamental terms be reasonably certain. But where substantial and necessary terms are left open for future negotiation, the purported contract is void.  [in AEG’s case even such basic things as definitions of various terms were not properly clarified or agreed on, and were stated in some God-forsaken Exhibit with no date or signature on it]

The Court discussed a similar case in which certain terms also stated that “the parties shall enter into a definite purchase agreement which shall be drafted by the buyers within 30 days.”  The Court agreed that such “agreement” was not a binding agreement but merely an agreement to agree and that the setting forth of such definitive terms was merely a “summary of negotiations.”

          The Court stated further: That language spoke of future actions and agreements contemplated but not yet completed by the parties, and showed that the letter “was not the complete and final agreement the parties contemplated would govern” but “merely created an agreement to negotiate in good faith.” [we have exactly the same language!]  Such language clearly manifests an intention to do something essential at a later date…thus the document is not a binding contract but merely an unenforceable agreement to agree and a non-binding letter of intent.’  http://www.ivanhoffman.com/letter.html

Though I have never dealt in legal disputes between parties, the above example seems to me very much close to what we have in the AEG cut-and-paste contract with Michael Jackson. Despite the “integrated agreement” clause added to it, all it has is a mere intention of the parties to agree or agreement to agree, while the definitive agreement is still to be negotiated expeditiously and in good faith.

Actually even the wording is repeated almost word for word here, not to mention other parts of this letter where they openly speak of their “attempts” to reach an agreement over some crucial issues in the future…

If the above “agreement” cited by Ivan Hoffman was ruled by the judge as void, then there is a very high chance that the same fate could befall the cut-and-paste AEG “agreement” with Michael Jackson if it ever came to it.  And if Michael Jackson’s signature as a head of his company also turned out to be forged, this would make the contract not only void, but illegal too and many heads – really many heads – might indeed roll off after that…

All of the above gives us a chance to relax at last and say in all honesty that whatever monstrous terms AEG included in their cut-and-paste contract, its terms were not binding on Michael Jackson as this document was simply not valid and Michael never accepted it, never agreed to it and never signed it.

This will enable us to examine the AEG ‘contract’ in future as an abstract idea only and study their dirty plans for Michael Jackson more dispassionately – as a scheme they envisaged but never implemented – with no other emotions involved but disgust and indignation at AEG’s greed, arrogance and no shame at using fraudulent methods in their relationship with a man whose little finger they were not worthy of.

P.S.

I’ve noticed that whenever I mention AEG people reply to me about Sony, so for those who think that these two separate entities are one I am making this postscriptum now.

We know that Michael said “they would kill me for my catalog” and I tend to take his words very seriously.

If the two major suspects are Sony (as everyone screamed aloud only recently) and AEG (about whom nobody is screaming) we should look at who had a better opportunity to do it and who wanted it really badly.

Sony did have an option to buy half of Michael’s share (or another 25% in addition to their 50%) but didn’t exercise this right even when they received this option in 2006-2007, if I remember it right and hasn’t done it up till now either. This absolutely does not show them to be someone who will be going out of their way to get Michael’s catalog.

AEG on the other hand wanted to have Michael’s assets badly, the whole of them and for a mere $6,2 mln., most of which wasn’t even going to Michael ($3mln. was for 2 Seas Records and $1,2 was for renting the house).

In case Michael didn’t pay his first installment in repayment of this advance under the Promissory note he signed with AEG they could immediately demand the rest of the advance back AND/OR exercise their right on the collateral, or all assets of Michael’s company.

There are two questions remaining here:

•  whether that Promissory note was legitimate or not (but its legitimity does not rule out the intent of it, as you understand)
• what assets Michael Jackson Company LLC had at the time this Promissory note was signed (this is very important and will require further research).

But you will probably agree that even the above information makes AEG a much bigger suspect in terms of “who wanted Michael’s assets more”.

As to whether AEG could or couldn’t put a lien against those assets this will still have to be analyzed, but my first impression is that they could, otherwise “cross-collateralization” would not be possible at all.

By cross-collateralization I mean that Michael’s main assets were used as collateral twice – for obtaining a loan from the Barclays bank (or initially Bank of America) and as collateral for an advance from AEG.

Sony, by the way, is not even a party to it, so I can’t understand how they come into this collateral business at all.

Financial dictionary says that one and the same asset can be used for obtaining two loans and calls it cross-collateral:

• Cross-Collateral: Collateral on one loan that is also used as collateral on another loan. In the event of default, both creditors have a claim on the collateral.  http://financial-dictionary.thefreedictionary.com/Cross-Collateral

So in the event of default it was both the Bank and AEG who could claim the collateral (again, Sony is not even near any such claim).

Now that my first series of posts about AEG is over I will be focusing on the above problems, the essence of the AEG “contract” with Michael and various opportunities arising from it. The reason why I am studying it is to see the background for Dr. Murray’s crime.

But for the moment AEG can relax – further investigation into their business with Michael Jackson will take time, so I will be giving opportunity to my co-admins to write on other MJ vindication issues in the meantime.