ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of June 23, 1999, by
and among CEC Entertainment, Inc. ("Purchaser") and Discovery Zone,
Inc., and Discovery Zone Licensing, Inc., each a debtor and
debtor-in-possession under Chapter 11 Case No. 99-941 (JJF),
jointly administered (individually each a "Seller" and collectively
"Sellers"). In consideration of the mutual covenants, agreements
and warranties herein contained, the parties hereto agree as
follows:
CERTAIN DEFINITIONS
Unless otherwise defined herein, terms used herein shall have
the meanings set forth below:
"Agreement" means this Asset Purchase Agreement, including all
Exhibits and Schedules hereto, as the same may be amended from time
to time in accordance with its terms.
"Acquired Assets" shall have the meaning set forth in Article I
hereof.
"Bankruptcy Code" means title 11 of the United States Code, $$
101-1330.
"Bankruptcy Court" means the United States Bankruptcy Court for
the District of Delaware, having jurisdiction over Sellers and
their assets in the Chapter 11 Cases.
"Business" means the business conducted utilizing those
operating assets and operations of Sellers for the purpose of
operating family entertainment centers in the United States.
"Chapter 11 Cases" means the pending cases commenced by Sellers
on April 20, 1999 under chapter 11 of the Bankruptcy Code, pending
in the Bankruptcy Court under docket no. 99-941 (JJF), jointly
administered.
"Claim" means any claim, lawsuit, demand, suit, inquiry made,
hearing, investigation, notice of violation, litigation,
proceeding, arbitration, or other dispute, whether civil, criminal,
administrative or otherwise.
"Closing" means the consummation of the transactions
contemplated herein in accordance with Article IX hereof.
"Closing Date" means the date set forth in Section 9.1 of this
Agreement.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Contaminant" means any substance regulated under any
Environmental Law, or any substance defined as or included in the
statutory or regulatory definitions of pollutant, hazardous
substances, hazardous or toxic wastes, hazardous materials, or
"toxic substances" under any Environmental Law.
"Contract" means any agreement, contract, commitment, or other
binding arrangement or understanding, whether written or oral, to
which Sellers are a party.
"Dollars" or "$" means dollars of the United States of America.
"Environmental Law" means any Regulation that relates to or
otherwise imposes liability or standards of conduct concerning
discharges, releases or threatened releases of noxious odors or any
Contaminants into ambient air, water or land, or otherwise relating
to the manufacture, processing, generation, distribution, use,
treatment, storage, disposal, cleanup, transport or handling of
Contaminants.
"Environmental Liabilities and Costs" means all losses from any
claim, by a Person, whether based on contract, tort, implied or
express warranty, strict liability, criminal or civil statute,
including under any Remedial Action, any Environmental Law, any
Permit required by or pursuant to any applicable Environmental Law,
any Lien in favor of any authority for Environmental Liabilities
and Costs, any Order or agreement with any authority, arising from
environmental, health or safety conditions, or the Release of a
Contaminant into the environment.
"Escrow Agreement" means an escrow agreement in such form as
may be mutually agreeable to Purchaser and Sellers, to be entered
into by the Purchaser and Sellers, with respect to the
establishment and maintenance of acounts to hold the Third-Party
Escrow and the Adjustment Escrow
"FunCenters" means the premises identified in Schedule 1.2 and
as items 1 through 13 in Schedule 3.5 from which Sellers operate
the Business.
"FunCenter Lease" means, individually, any lease of a FunCenter
or Other FunCenter.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
"Indebtedness" with respect to any Person means any obligation
of such Person for borrowed money, and in any event shall include
(a) any obligation incurred for all or any part of the purchase
price of property or other assets or for the cost of property or
other assets constructed or of improvements thereto, other than
accounts payable included in current liabilities and incurred in
respect of property purchased in the ordinary course of business,
(b) the face amount of all letters of credit issued for the account
of such Person, (c) obligations (whether or not such Person has
assumed or become liable for the payment of such obligation)
secured by Liens, (d) capitalized lease obligations, (e) all
guarantees of such Person, (f) all accrued interest, fees and
charges in respect of any Indebtedness, and (g) all prepayment
premiums and penalties, and any other fees, expenses, indemnities
and other amounts payable as a result of the prepayment or
discharge of any Indebtedness.
"Lien" means any security interest, lien, charge, mortgage,
deed, assignment, pledge, hypothecation, encumbrance, easement,
restriction or interest of another Person of any kind or nature.
"Order" means any decree, order, injunction, rule, judgment,
consent of or by any court or governmental authority.
"Ordinary Course of Business" means the operation of the
Business by Sellers in the usual and ordinary course in a manner
substantially similar to the manner in which Sellers have operated
since the commencement of the Chapter 11 Cases.
"Other FunCenters" means any family entertainment centers
operated by Sellers other than the FunCenters.
"Person" means any corporation, partnership, joint venture,
limited liability company, organization, entity, authority or
natural person.
"Purchaser" means, as applicable herein, CEC Entertainment, Inc.
"Regional Headquarters" means the administrative offices of
Sellers identified in Schedule 1.3(g).
"Regulation" means any law, statute, regulation, ruling, rule or
order of, administered or enforced by or on behalf of any court or
governmental authority.
"Release" means any release, spill, emission, leaking, pumping,
disposal, discharge, dispersal or migration of any Contaminant into
the indoor or outdoor environment or into or out of any property or
assets (including the Acquired Assets) owned or leased by Sellers,
including the movement of Contaminants through or in the air, soil,
surface water, groundwater or property.
"Remedial Action" means all actions required under any
applicable Environmental Law to (a) clean up, remove, treat or in
any other way address Contaminants in the indoor or outdoor
environment; (b) prevent the Release or threat of Release or
minimize the further Release of Contaminants so they do not migrate
or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (c) perform pre-remedial studies
and investigations and post-remedial monitoring and care.
"Sale Order" means that certain order(s) to be entered by the
Bankruptcy Court in the Chapter 11 Cases, in substantially the form
attached as Exhibit "B" to this Agreement, inter alia, approving
the transactions contemplated by this Agreement.
"Schedules" means the schedules hereto.
"Sellers" means Discovery Zone, Inc. and Discovery Zone
Licensing, Inc.
"Taxes" means all taxes, charges, fees, duties, levies or other
assessments, including, without limitation, income, gross receipts,
net proceeds, ad valorem, turnover, real and personal property
(tangible and intangible), sales, use, franchise, excise, value
added, license, payroll, unemployment, environmental, customs
duties, capital stock, disability, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational and interest
equalization, windfall profits, severance and employees' income
withholding and Social Security taxes imposed by the United States
or any other country or by any state, municipality, subdivision or
instrumentality of the United States or of any other country or by
any other tax authority, including all applicable penalties and
interest, and such term shall include any interest, penalties or
additions to tax attributable to such Taxes.
"Tax Return" means any report, return or other information
required to be supplied to a taxing authority in connection with
Taxes.
"Third Party" means any Person other than Sellers, Purchaser or
any of their respective affiliates.
ARTICLE I
PURCHASE AND SALE; ASSUMPTION OF CERTAIN LIABILITIES
1.1 Purchase and Sale of Assets. Subject to the terms and
conditions set forth in this Agreement, at the Closing, Sellers
shall sell, assign, transfer and deliver, free and clear of all
liens, security interests and other encumbrances, to Purchaser, and
Purchaser shall purchase, acquire and take assignment and delivery
of the following assets owned by Sellers (wherever located) related
to, or used in conjunction with, the Business, and all of Sellers'
right, title and interest therein and thereto, but not including
those assets specifically excluded in Section 1.3 (all of the
assets to be sold, assigned, transferred and delivered to Purchaser
hereunder shall be deemed included in the term "Acquired Assets" as
used herein):
(a) cash in the amount necessary to assure that on the day
immediately following the Closing each FunCenter location will have
cash on hand equal to the sum of $1,500.00 per location.
(b) all supplies, materials and inventories actually located
at any FunCenter prior to the Closing (collectively, the
"Inventory");
(c) all machinery, equipment, tools, vehicles, furniture,
furnishings, leasehold improvements, goods, and other tangible
personal property owned by Sellers, except to the extent the same
are located within the Other FunCenters located in the Commonwealth
of Puerto Rico ("FFE");
(d) all transferable licenses, permits, approvals,
certificates of occupancy, authorizations, operating permits,
registrations, plans and the like applicable to the FunCenters
(collectively, the "Permits");
(e) the Owned Intellectual Property (as defined in Section
3.9 hereof);
(f) all game tokens and prize redemption tickets owned by
Sellers at the FunCenters and Other FunCenters (collectively,
"Tokens");
(g) all real estate owned by any Sellers identified in
Schedule 3.5 ("Owned Real Property"); and
(h) all structural plans and diagrams in Sellers' possession
for FunCenters located on Owned Real Property or upon any real
property leased pursuant to an Assumed FunCenter Lease.
1.2 Assignment and Assumption of FunCenter Leases. Subject
to the terms and conditions set forth in this Agreement, Sellers
will assign and transfer to Purchaser, effective as of the Closing
Date, all of Sellers' right, title and interest in and to, and
Purchaser will take assignment of and assume, the FunCenter Leases
identified in Schedule 1.2 ("Assumed FunCenter Leases"). All
right, title and interest of Sellers (or any of them) under the
Assumed FunCenter Leases shall be deemed included in the term
"Acquired Assets" as used herein. Notwithstanding the foregoing,
on or prior to the seventh day before the Closing Date, Purchaser,
in Purchaser's sole discretion, may make a determination that it
will not assume any or all of the Assumed FunCenter Leases. In the
event Purchaser notifies Sellers that it will not assume one or
more Assumed FunCenter Leases, (i) the family entertainment centers
operated under such Assumed FunCenter Leases shall be deemed to be
Other FunCenters; and (ii) there shall be no adjustment to the
Purchase Price payable by Purchaser under this Agreement.
1.3 Excluded Assets. Notwithstanding anything to the
contrary in this Agreement, the following assets of Sellers, as
well as any other assets not defined as Acquired Assets, shall be
retained by Sellers and are not being sold or assigned to Purchaser
hereunder (all of the following are referred to collectively as the
"Excluded Assets"):
(a) any and all personal property of Sellers, wherever
located, that is held pursuant to any lease including, without
limitation, any capital lease;
(b) any stock held by any Seller or any affiliates of
Sellers;
(c) any and all avoidance claims or causes of action
arising under the Bankruptcy Code or applicable state law,
including, without limitation, all rights and avoidance claims of
Sellers arising under Sections 544, 547, 548, 549 and 550 of the
Bankruptcy Code;
(d) all instruments, prepaid assets and deposits,
receivables, unbilled costs and fees, tax refunds, co-op
advertising allowances, and accounts;
(e) all Claims (excluding Claims relating to existing
violations of any rights with respect to Owned Intellectual
Property) and rights of action and all choses in action arising out
of occurrences before or after the consummation of the proposed
transactions contemplated herein;
(f) all cash, except as provided in Section 1.1(a);
(g) the Regional Headquarters identified in Schedule 1.3(g)
and the leases for the Other FunCenters; and
(h) subject to the terms of Section 1.6 hereof, all
machinery, equipment, tools, vehicles, furniture, furnishings,
leasehold improvements, goods, supplies, materials and inventory,
including redemption merchandise, and other tangible personal
property owned by Sellers, located within the Other FunCenters
located in the Commonwealth of Puerto Rico.
1.4 No Other Liabilities Assumed. Sellers acknowledge and
agree that pursuant to the terms and provisions of this Agreement
and under any Contract, Purchaser will not assume any obligation of
Sellers (including any Cure Amounts), other than obligations
assumed under the Assumed FunCenter Leases. In furtherance and not
in limitation of the foregoing, neither Purchaser nor any of its
affiliates shall assume, and shall not be deemed to have assumed,
other than as specifically set forth in Section 1.2 above, any
debt, claim, obligation or other liability of Sellers or any of its
affiliates whatsoever, including, but not limited to: (i) any
Environmental Liabilities and Costs for any act, omission,
condition, event or circumstance to the extent occurring or
existing prior to the Closing Date, including without limitation
all Environmental Liabilities and Costs relating in any manner to
Sellers' direct or indirect handling, transportation or disposal of
any Contaminants, (ii) any of Sellers' liabilities in respect of
Taxes, (iii) any brokers' or finders' fees arising by reason of
Sellers' dealings with brokers or other third parties, or other
liability of Sellers for costs and expenses (including legal fees
and expenses) incurred in connection with this Agreement, (iv) any
Indebtedness, (v) except as otherwise provided in Section 6.2
hereof with respect to the accrued and unused vacation of Sellers'
Employees, any obligations or liabilities for Sellers' Employees,
including severance, pension, profit sharing or any other employee
benefit plans, compensation or retiree medical and other benefits
and obligations, (vi) any obligation or liability arising as a
result of or whose existence is a breach of Sellers'
representations, warranties, agreements or covenants herein, (vii)
any liability subject to compromise, (viii) any obligation of any
affiliate of Sellers, and (ix) rebates, allowances, deductions
and/or price discrepancies relating in any manner to products or
services sold in pursuit of the Business prior to the Closing Date.
Disclosure of any obligation or liability on any schedule to this
Agreement shall not create any liability of Purchaser.
1.5 Other FunCenters to be Closed. (a) Sellers and
Purchaser acknowledge that (i) effective June 14, 1999 Sellers were
operating one hundred thirty (130) family entertainment centers
including both the FunCenters and Other FunCenters , a complete
list of which is attached hereto as Schedule 1.5; and (ii) after
the Closing Sellers will not operate the Other FunCenters. Upon
the closing of any Other FunCenters, Sellers shall adequately
secure the premises upon which such Other FunCenters are located
and the Purchase Price shall be adjusted by an amount not to
exceed $10,000 per Other FunCenter if the FFE at any Other
FunCenter is materially different from the amount of FFE reflected
in the "Master Inventory of FunCenter Assets" schedule of FFE
previously delivered to Purchaser by Sellers on or about June 19,
1999.
(b) Sellers shall deliver written notice to Purchaser two
(2) business days' prior to the availability of any FFE and Tokens
at any Other FunCenter(s) (each an "Availability Notice"). For a
period of seven (7) days after delivery of an Availability Notice
("Removal Period"), Purchaser shall have the right to remove FFE
and Tokens from the Other FunCenter(s) referenced in such
Availability Notice. Any FFE and Tokens not removed from an Other
FunCenter at the expiration of the Removal Period shall be excluded
from the Acquired Assets and not purchased by Purchaser and there
shall be no adjustment to the Purchase Price payable by Purchaser
with respect to such FFE and Tokens.
(c) In the event that Purchaser removes FFE and Tokens from
any Other FunCenter and a Closing does not occur under this
Agreement, at Purchaser's election, Purchaser shall either (i)
liquidate such removed FFE and Tokens on behalf of Sellers and
deliver the proceeds of such liquidation to Sellers, or (ii)
purchase such removed FFE and Tokens from Sellers at such price as
Purchaser and Sellers shall mutually agree.
1.6 Puerto Rico. Sellers and Purchaser hereby acknowledge
that Sellers will sell the two (2) Other FunCenters located in the
Commonwealth of Puerto Rico including, without limitation, the
furniture, fixtures and equipment located therein to a Person
unrelated to Purchaser; and will remove, or cause to be removed,
any identifying signage and other indicia of the Owned Intellectual
Property from such Other FunCenters on or before the earlier of (i)
Closing Date, and (ii) the date such Other FunCenters are sold.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 Payment of Purchase Price. The aggregate purchase price
for the Acquired Assets (the "Purchase Price") shall be the sum of
the following:
(a) The ▇▇▇▇▇▇▇ money deposit equal to $100,000.00 paid by
Purchaser pursuant to bidding procedures approved by the Bankruptcy
Court in the Chapter 11 Cases; plus
(b) An additional ▇▇▇▇▇▇▇ money deposit of $1,800,000.00 to
be paid by Purchaser and to be held in escrow upon entry of the
Sale Order pursuant to a Deposit Escrow Agreement by and among
Sellers, Purchaser and Young ▇▇▇▇▇▇▇ Stargatt & ▇▇▇▇▇▇, LLP of even
date herewith; plus
(c) In accordance with Section 1.2 hereof, Purchaser's
assumption of the Assumed FunCenter Leases; plus
(d) Purchaser's payment to Sellers of an amount equal to
$16,100,000.00 less any amount set aside as the Adjustment Escrow
pursuant to Section 2.3 hereof, in immediately available funds at
Closing; plus
(e) Purchaser's payment to the escrow agent under the Escrow
Agreement of the sum of $1,000,000.00 (the "Third-Party Escrow
Amount") to be held by such escrow agent pursuant to the terms of
the Escrow Agreement; plus
(f) A sum equal to the aggregate amount of any cash
purchased by Purchaser pursuant to Section 1.1(a).
2.2 Further Assurances. From time to time after the Closing
and without further consideration, (i) Sellers, upon the request of
Purchaser and at Sellers' expense, shall execute and deliver such
documents and instruments of conveyance and transfer as Purchaser
may reasonably request in order to consummate more effectively the
purchase and sale of the Acquired Assets as contemplated hereby and
to vest in Purchaser title to the Acquired Assets transferred
hereunder, provided that (x) Sellers shall not be required to
execute or deliver any document or instrument pursuant to this
Section 2.2 that includes any provision(s) that impose obligations
upon Sellers that are greater than those imposed upon Sellers under
the other provisions of this Agreement or the documents executed
pursuant hereto, and (y) in no event shall Sellers be required to
incur any material cost or expense in the performance of its
obligations under this Section 2.2, Section 5.1 or Section 5.3 (it
being understood that notwithstanding the foregoing, the Purchaser
shall in any event be entitled to require Sellers to take such
action as Sellers would otherwise be required to take pursuant to
this Section 2.2, Section 5.1 or Section 5.3 but for the cost
thereof by advancing to Sellers the amounts Sellers reasonably
anticipate incurring in excess of immaterial costs and expenses in
taking the action), and (ii) Purchaser, upon the request of Sellers
and at Purchaser's expense, shall execute and deliver such
documents and instruments of assumption as Sellers may reasonably
request in order to confirm Purchaser's liability for the
obligations under the Assumed FunCenter Leases or otherwise more
fully consummate the transactions contemplated by this Agreement.
2.3 Owned Real Estate.
(a) Within two (2) business days of execution of this
Agreement, Sellers shall deliver to Purchaser title reports on each
parcel of Owned Real Property ("Title Reports"). After the receipt
of the Title Reports, but in no event later than July 6, 1999,
Purchaser shall identify to Sellers, in writing, each parcel of
Owned Real Property that Purchaser determines, on a commercially
reasonable basis, as to which there exists use restrictions of
record that would individually or in the aggregate (i) with respect
to Owned Real Property located at Kennesaw, Georgia and Sterling
Heights, Michigan, prevent the construction or operation of a
prototypical ▇▇▇▇▇ ▇. Cheese's restaurant or (ii) with respect to
any of the Owned Real Property, other than Kennesaw or Sterling
Heights properties, materially detracts from the value of, or
impairs the use of, the affected properties (each a "NCP").
(b) In the event Purchaser shall identify one or more NCPs,
such NCPs shall be transferred to Purchaser at Closing and the
entire Purchase Price shall be paid. If one or more NCPs are
identified by Purchaser, $1,000,000.00 of the Purchase Price shall
be deposited with the escrow agent under the Escrow Agreement in a
separate escrow account (the "Adjustment Escrow") for purposes of
satisfying any Purchase Price adjustment required under this
Section 2.3. All liens, claims and encumbrances that now attach to
the Owned Real Property shall attach in their current order of
validity, priority and enforceability to the Adjustment Escrow
pending resolution and payment of any Purchase Price adjustment, if
any.
(c) Within thirty (30) days of Closing, the Purchase Price
shall be adjusted with respect to each NCP by such amount as (i)
Purchaser, Sellers and ▇▇▇▇▇▇▇▇'▇ Corporation ("McDonald's") shall
mutually agree within thirty (30) days of Closing, or (ii)
thereafter as is determined through binding "Baseball Arbitration".
For this purpose, Baseball Arbitration shall mean an arbitration
where Sellers, Purchaser and McDonald's each propose a price
adjustment for each NCP (based on whatever factors each believes
are relevant) and the arbitral panel chooses one of the submissions
without any hearing.
(d) "Baseball Arbitration" shall be conducted as set forth
in this subparagraph (d).
(i) There shall be a panel of three (3)
arbitrators; one each to be selected by each of Purchaser, Sellers
and McDonald's, with each arbitrator to have professional
experience in the marketing and valuation of retail real estate in
the geographic area in which the subject NCPs are located;
(ii) The adjustment to the purchase price with
respect to each NCP will be determined assuming an aggregate
purchase price for all Owned Real Property of $15,500,000.00 (net
of selling and carry costs), to be offset by positive EBITDA less
direct overhead allocated to acquired Owned Real Property.
(A) If the aggregate value of the fifteen (15)
properties (including NCPs) equals or exceeds $15,500,000.00 no
adjustment will be made to the Purchase Price.
(B) If the aggregate value of the fifteen (15)
properties (including NCPs) is less than $15,500,000.00 an
adjustment will be made to reduce the Purchase Price based on the
determination of the arbitrators of the impairment of NCP property,
but in no event will the adjustment to the Purchase Price increase
the value of the fifteen (15) properties above $15,500,000.00;
provided, however, the reduction to the Purchase Price will not, in
any event, exceed $1,000,000.00 in aggregate, and shall be payable
out of the Adjustment Escrow. Any payment remitted to Purchaser in
satisfaction of any Purchase Price shall be free of liens, claims
and encumbrances.
(e) McDonald's shall be a third party beneficiary of this
Agreement solely to the extent of this Section 2.3, provided,
however, that upon the payment in full of McDonald's allowed claim
in the Chapter 11 Cases, whether on consent or otherwise, any
rights of McDonald's under this Section 2.3 shall automatically
terminate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers jointly and severally represent and warrant to Purchaser
as of the date of this Agreement and the Closing Date, as follows:
3.1 Due Incorporation; Valid Existence. Sellers are
corporations incorporated under the laws of the state(s) of their
respective incorporation and are validly existing as of the date
hereof and as of the Closing.
3.2 Authority. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the
Bankruptcy Court.
3.3 No Conflict; Required Filings and Consents. Assuming
the satisfaction of the conditions set forth in Article VII and
compliance with the applicable requirements for consents,
approvals, authorizations, permits or filings referred to in this
Section 3.3, the execution and delivery, of this Agreement by
Sellers does not, and the performance of this Agreement by Sellers
will not, (a) violate any provisions of Sellers' respective
certificates of incorporation, bylaws or other organizational
documents, or (b) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental
authority, domestic or foreign, or of any other Person except (i)
approvals of the Bankruptcy Court, (ii) applicable requirements, if
any, under the HSR Act, and (iii) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such
filings or notifications would not prevent or materially delay the
consummation by Sellers of the transactions contemplated by this
Agreement.
3.4 Title To and Condition of Properties. At and as of the
Closing Date, Sellers will have good title to, and will have the
right to sell, convey, transfer, assign and deliver to Purchaser
the Acquired Assets. At and as of the Closing Date, the ▇▇▇▇ of
Sale, the Assignment and Assumption and Deed of Assignment (each as
defined in Section 9.2 below) together with the deeds for the Owned
Real Property and the Sale Order will be effective, when recorded,
where required, to vest in Purchaser good title to the Acquired
Assets. To Sellers' knowledge, at and as of the Closing Date,
Sellers will have good title to, and will have the right to sell,
convey, transfer, assign and deliver to Purchaser the Owned
Intellectual Property.
3.5 Owned Real Property. Schedule 3.5 lists all Owned Real
Property to be conveyed to Purchaser at Closing free and clear of
all encumbrances other than (a) non-material matters set forth in
title reports delivered by Sellers to Purchaser, (b) non-material
liens for Taxes not yet due and payable, and (c) laws, ordinances
and governmental regulations, and (d) other matters of record and
imperfections of title, easements and encumbrances.
3.6 FunCenter Leases. Schedule 1.2 lists all Assumed
FunCenter Leases. True, correct and complete copies of the Assumed
FunCenter Leases in effect as of the date hereof have heretofore
been delivered by Sellers to Purchaser. Except for Assumed
FunCenter Leases that have expired pursuant to their terms, upon
the Closing and subject to any condemnation or casualty and such
limitations arising under the Chapter 11 Cases, (a) all Assumed
FunCenter Leases will be valid, binding leases therefor that are in
full force and effect and enforceable by Sellers in accordance with
their respective terms; (b) Sellers have the full right to occupy
the real property leased under the Assumed FunCenter Leases; and
(c) the Assumed FunCenter Leases have not been assumed or rejected
(as such terms are used in Section 365 of the Bankruptcy Code).
3.7 Personal Property. As of the Closing, except for any
Excluded Assets, Sellers own or have a valid leasehold interests in
or have legal right to use all of the tangible personal property
necessary to carry on the Business of Sellers consistent with past
practice, free and clear of all encumbrances, other than
encumbrances that, upon the Closing, will be released.
3.8 Brokers. Sellers have incurred no liability to any
broker, finder or agent with respect to the payment of any
commission regarding the consummation of the transactions
contemplated hereby, except for certain fees and commissions
payable to Ladenburg ▇▇▇▇▇▇▇ in connection with the consummation of
the transactions contemplated herein, the payment of which shall be
the sole responsibility of Sellers. Sellers agree that if any
claims for commissions, fees or other compensation, including,
without limitation, brokerage fees, finder's fees, or commissions
are ever asserted against Purchaser or the Sellers in connection
with this transaction, all such claims shall be handled and paid by
the party whose actions form the basis of such claim and such party
shall indemnify, defend (with counsel reasonably satisfactory to
the party(ies) entitled to indemnification), protect and save and
hold the other harmless from and against any and all such claims or
demands asserted by any person, firm or corporation in connection
with the transaction contemplated hereby.
3.9 Intellectual Property Rights. The sole assets of
Discovery Zone Licensing, Inc. consist of the patents, patent
applications, licenses, service names, service marks, trade names,
trademarks, trade name and trademark registrations (and
applications therefor), copyrights and copyright registrations (and
applications therefor), inventions and designs set forth in
Schedule 3.9 and any of their derivatives as used on products
related to the Business and goodwill, trade secrets, processes and
know-how that relate in any manner to the Business (collectively,
the "Owned Intellectual Property"). Prior to or at Closing,
Sellers will deliver all Sellers' customer lists to Purchasers and
such customer lists shall be deemed to be included in the Owned
Intellectual Property. The Owned Intellectual Property is all
intellectual property owned by Sellers and the Consenting Parties
(excluding any rights to the use of the name "Block Party").
Sellers hold free and clear of all material encumbrances (other
than encumbrances that, upon the Closing, will be released) and
free from material contractual restrictions and any other material
restrictions good title to, or valid and subsisting licenses in,
all registrations and applications for registration, extensions or
renewals of the Owned Intellectual Property used by Sellers in the
conduct of the Business. Sellers are not in material default, and
no event has occurred that with notice or lapse of time would
constitute a material default under any of the agreements, licenses
or sublicenses of Sellers relating to the Owned Intellectual
Property.
3.10 Environmental Matters. To Sellers' knowledge:
(a) All Owned Real Property and all real property leased
under the Assumed FunCenter Leases are in material compliance with
all applicable Environmental Laws;
(b) Sellers have not received written notice of any pending
or threatened claims, complaints, or other information with respect
to any alleged material violation of any Environmental Laws with
respect to the Acquired Assets;
(c) Sellers have been issued and are in compliance with
all material permits, certificates, approvals, licenses and
registrations required under Environmental Laws with respect to the
Acquired Assets; and
(d) Sellers have disclosed all material environmental
reports in its possession or control pertaining to Owned Real
Property and real property leased under the FunCenter Leases.
3.11 Insurance. All policies of fire and casualty, property,
liability. workers' compensation, extended coverage, business
interruption, public and product liability, and other forms of
insurance providing insurance to or for Sellers have been provided
or made available to the Purchaser. All such policies of insurance
are maintained for the benefit of Sellers and will be maintained by
Sellers through the Closing Date.
3.12 Licenses and Permits: Compliance with Laws. Sellers have
all material licenses, permits and authorizations necessary in
order to operate and conduct the Business as presently conducted
and as proposed to be conducted.
3.13 Exclusivity of Representations. (a) The representations
and warranties made by Sellers in this Agreement are in lieu of and
are exclusive of all other representations and warranties,
including, without limitation, any implied warranties. Sellers
hereby disclaim any such other or implied representations or
warranties. notwithstanding the delivery or disclosure to Purchaser
or its officers, directors, employees, agents, or representatives
of any documentation or other information (including any financial
projections or other supplemental data).
(b) Notwithstanding any other provision to the contrary,
Sellers make no representation or warranty with respect to the
Excluded Assets.
As used herein, the term "Sellers' knowledge" and similar terms
shall mean and refer only to matters actually known to the
President, Chief Financial Officer and General Counsel of Discovery
Zone, Inc. holding such offices as of the execution date hereof,
without any inquiry or investigation. None of the representations
and warranties of Sellers contained in this Article III shall
survive the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers as follows:
4.1 Due Incorporation; Valid Existence. Purchaser is a
corporation incorporated under the laws of the state of its
incorporation, and is validly existing as of the date hereof and
the date of Closing.
4.2 Authority. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized and do
not and will not violate any provisions of the certificate of
organization, partnership agreement, limited liability company
agreement, by-laws, or similar instrument of Purchaser.
4.3 Consents. No notice to, filing with, authorization of,
exemption by, or consent of any authority is required in order for
Purchaser to consummate the transactions contemplated hereby.
4.4 Brokers. Purchaser has incurred no liability to any
broker, finder or agent with respect to the payment of any
commission regarding the consummation of the transactions
contemplated hereby. Purchaser agrees that if any claims for
commissions, fees or other compensation, including, without
limitation, brokerage fees, finder's fees, or commissions are ever
asserted against Purchaser or the Sellers in connection with this
transaction, all such claims shall be handled and paid by the party
whose actions form the basis of such claim and such party shall
indemnify, defend (with counsel reasonably satisfactory to the
party(ies) entitled to indemnification), protect and save and hold
the other harmless from and against any and all such claims or
demands asserted by any person, firm or corporation in connection
with the transaction contemplated hereby.
4.5 "AS IS" Purchase. Purchaser hereby acknowledges and
agrees that, except as otherwise expressly provided herein, (i)
Sellers make no representations or warranties whatsoever, express
or implied, with respect to any matter relating to the Acquired
Assets, and (ii) Purchaser shall accept the Acquired Assets "AS
IS," "WHERE IS," and "WITH ALL FAULTS" as of the Closing Date.
Without in any way limiting the foregoing, Sellers hereby disclaim
any warranty (express or implied) of merchantability or fitness for
any particular purpose as to any Acquired Asset.
None of the representations and warranties of Purchaser contained
in this Article IV shall survive the Closing.
ARTICLE V
COVENANTS OF SELLERS
5.1 Consents and Approvals. Sellers shall use their
reasonable efforts (i) to obtain all consents and approvals, as
reasonably requested by Purchaser, to consummate the purchase and
sale of the Acquired Assets and the assignment of the Assumed
Obligations, together with any other necessary consents and
approvals to consummate the transactions contemplated hereby,
including, without limitation, obtaining the Sale Order, (ii) to
make, as reasonably requested by Purchaser, all filings,
applications, statements and reports to all authorities that are
required to be made prior to the Closing Date by or on behalf of
Sellers or any of their affiliates pursuant to any applicable
Regulation in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, all required
filings under the HSR Act, and (iii) to obtain, as reasonably
requested by Purchaser, all required consents and approvals (if
any) to assign and transfer the Permits to Purchaser at Closing
and, to the extent that one or more of the Permits are not
transferable, to assist Purchaser in obtaining replacements
therefor; provided that Sellers shall not be required to make any
filing in connection with the transfer of a Permit or take any
other action required by this sentence unless Purchaser advances
any and all fees and other charges imposed by any applicable
authority in connection with such filing, transfer or other
requested action. In the event that certain Permits are not
transferable or replacements therefor are not obtainable on or
before the Closing, but such Permits are transferable or
replacements therefor are obtainable after the Closing, Sellers
shall continue to use such reasonable efforts in cooperation with
Purchaser after the Closing as may be required to obtain all
required consents and approvals to transfer, or obtain replacements
for, such Permits after Closing and shall do all things reasonably
necessary to give Purchaser the benefits that would be obtained
under such Permits; provided, however, Sellers shall in no event be
required to make any filing in connection with the transfer of a
Permit or take any other action required by this sentence unless
Purchaser advances any and all fees and other charges imposed by
any applicable authority in connection with such filing, transfer
or other requested action.
5.2 Insurance. Provided that any claim by Purchaser in no
way prejudices or otherwise affects Sellers' right to look to such
policies with respect to claims arising prior to the Closing Date,
Purchaser, to the extent Sellers would have the right to do so,
shall be entitled to make claims against Sellers' insurance
policies and coverage that are occurrence policies from and after
the Closing Date for all matters, injuries and claims arising prior
to the Closing Date relating in any way to the Acquired Assets or
Assumed Obligations in the same manner and subject to the same
terms, conditions and limitations as Sellers prior to the Closing
Date and provided that Sellers shall not incur any cost by virtue
of such claims by Purchaser. Purchaser will have no obligations or
liabilities under such insurance policies for premiums, additional
premiums or similar payments after the Closing Date, either due to
retroactive adjustments, audits, roll-backs or otherwise. Subject
to the provisions of Section 2.2 and to the same proviso as is set
forth at the beginning of this Section 5.2, and at no cost or
expense to Sellers, Sellers will cooperate after the Closing Date
with Purchaser and its insurance carriers and agents in connection
with the foregoing and with Purchaser in establishing new insurance
policies and coverage for Purchaser from and after the Closing
Date. Without in any way limiting the foregoing, Purchaser shall
be entitled to make claims against Sellers' insurance policies and
coverage only to the extent permitted by the carriers of such
insurance. Notwithstanding the foregoing, this Section 5.2 shall
not entitle Purchaser to any portion of, or claim against, any
self-insured retention of Sellers and Sellers shall have no duty or
obligation to continue any self-insured retention after the Closing
Date.
5.3 Sellers' Employees. Except as provided in Section 6.2,
Purchaser has not agreed to hire any of Sellers' employees or
independent contractors retained by Sellers.
5.4 Cure Amounts. On or before the Closing Date, Sellers
shall (i) cure all defaults and arrearages under the Assumed
FunCenter Leases, pursuant to $ 365 of the Bankruptcy Code
(hereinafter, individually a "Cure Amount," and collectively the
"Cure Amounts"); and (ii) pay all real and personal property taxes,
apportioned as of the Closing Date, that create or constitute a
lien upon any Acquired Assets. All Cure Amounts and taxes required
to be paid pursuant to this Section 5.4 shall be paid on or before
the Closing Date out of the Third-Party Escrow Amount.
5.5 Operation of FunCenters. Sellers will make all
reasonable efforts to continue to operate the FunCenters through
the Closing Date in the Ordinary Course of Business.
ARTICLE VI
COVENANTS OF PURCHASER
6.1 Assumed Obligations. Subsequent to the Closing and
except for the Cure Amounts, Purchaser agrees to assume and perform
the Assumed FunCenter Leases and shall indemnify and hold Sellers
harmless with respect to the Assumed FunCenter Leases.
6.2 Employees. Effective as of the Closing, Purchaser shall
have no obligation to offer employment to any active employees of
Sellers.
6.3 Payment of Transfer Costs. Purchaser shall pay, on the
Closing Date, the title insurance premium for the owner's policy
(including all the costs of endorsements thereto and expanded
coverage thereunder), and all other charges of the title company
customarily paid by the purchaser in transactions of the same or
similar nature in the county in which the any Owned Real Property
is located.
6.4 Removal of FFE. Purchaser covenants that any contractor
hired to remove FFE and Tokens from any Other FunCenter will be
fully bonded and that such contractor shall have sufficient
casualty, liability and workers' compensation insurance with
respect to its employees, subcontractors and the work to be
performed by such contractor in connection with the removal of the
FFE and Tokens at any Other FunCenter.
6.5 HSR Filing. Within five (5) business days after
execution of this Agreement, Purchaser shall make any initial
filing required to be made by Purchaser under the HSR Act in
connection with the transactions contemplated hereunder and shall
promptly respond to any additional requests for information
received from any governmental authority in connection with or
pursuant to the HSR Act.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
The obligations of Purchaser under this Agreement are, at the
option of Purchaser, subject to satisfaction of the following
conditions precedent on or before the Closing Date.
7.1 Warranties True as of Both Present Date and Closing
Date. Each of the representations and warranties of Sellers
contained herein shall be true and correct in all material respects
on and as of the date of this Agreement, and shall also be true and
correct in all material respects (except for such changes as are
contemplated by the terms of this Agreement) on and as of the
Closing Date with the same force and effect as though made on and
as of the Closing Date.
7.2 Bankruptcy Condition. The Sale Order shall have been
entered by the Bankruptcy Court and no stay with respect thereto
shall be in effect as of the Closing Date.
7.3 Purchaser's Investigation. Purchaser acknowledges that
prior to executing this Agreement Purchaser has conducted due
diligence regarding the Business and the FunCenters. Immediately
upon Sellers' execution and delivery of this Agreement, Sellers
shall continue to provide Purchaser (or its designated
representatives) full and complete access to Sellers' employees,
books and records, corporate offices and other facilities for the
purpose of conducting such additional investigation as Purchaser
deems appropriate or necessary respecting the Business at the
FunCenters, in its discretion, in order to facilitate Purchaser's
efforts to consummate the transaction provided for herein. Sellers
shall hereby covenant and agree to cooperate with Purchaser in this
regard.
7.4 HSR Act. Any waiting period (and any extension thereof)
applicable to the consummation of the purchase of the Acquired
Assets under the HSR Act shall have expired or been terminated.
7.5 Bankruptcy Court Approval. Entry of the Sale Order,
inter alia, approving the sale of the Acquired Assets to Purchaser,
pursuant to the terms of this Agreement. The Sale Order shall be
in substantially the form attached hereto as Exhibit "B".
7.6 Lease Assumption and Assignment. The Sale Order shall
approve and authorize the assumption and assignment of the Assumed
FunCenter Leases set forth in Schedule 1.2.
7.7 Sale Order Deadline. The Sale Order shall be entered by
June 29, 1999.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers under this Agreement are, at the
option of Sellers, subject to the satisfaction of the following
conditions precedent on or before the Closing Date.
8.1 Warranties True as of Both Present Date and Closing
Date. The representations and warranties of Purchaser contained
herein shall be true and correct in all material respects on and as
of the date of this Agreement, and shall also be true in all
material respects (except for such changes as are contemplated by
the terms of this Agreement) on and as of the Closing Date with the
same force and effect as though made by Purchaser on and as of the
Closing Date.
8.2 HSR Act. Any waiting period (and any extension thereof)
applicable to the consummation of the purchase of the Acquired
Assets under the HSR Act shall have expired or been terminated.
8.3 Bankruptcy Condition. The Sale Order shall have been
entered by the Bankruptcy Court and no stay with respect thereto
shall be in effect as of the Closing Date.
ARTICLE IX
CLOSING
9.1 Closing. Provided that the Sale Order shall have been
entered by the Bankruptcy Court on or before the date set forth in
Section 7.7 and no stay with respect thereto shall be in effect,
the Closing shall take place on a date and time to be mutually
agreed upon by Sellers and Purchaser, but in no event later than
thirty (30) days after entry of the Sale Order.
9.2 Deliveries by Sellers. At the Closing, Sellers will
deliver the following to Purchaser: (a) a ▇▇▇▇ of sale in form and
content mutually satisfactory to Purchaser and Sellers ("▇▇▇▇ of
Sale"); (b) an Assignment and Assumption of the Assumed FunCenter
Leases in form and content mutually satisfactory to Purchaser and
Sellers (the "Assignment and Assumption"); (c) an Intellectual
Property Deed of Assignment in form and content mutually
satisfactory to Purchaser and Sellers (the "Deed of Assignment");
and (d) limited or special warranty deeds to convey the Owned Real
Property.
9.3 Deliveries by Purchaser. At the Closing, Purchaser will
deliver the following: (a) the Purchase Price payable pursuant to
and in accordance with Section 2.1; and (b) the duly-executed
Assignment and Assumption.
9.4 Termination. Purchaser may terminate this agreement if:
(a) the conditions set forth in Sections 7.2, 7.4,
7.5, and 7.6 are not satisfied on or prior to the expiration of the
thirty-day period after entry of the Sale Order; provided, however,
that the parties shall extend the Closing Date for a reasonable
amount of time not to exceed one hundred twenty (120) days after
entry of the Sale Order, to obtain HSR Act approval; or
(b) the condition set forth in Section 7.1, but
only to the extent that such condition relates to Sections 3.4,
3.5(a) through (c), 3.6, 3.9, and 3.10, is not satisfied on or
prior to the expiration of the thirty-day period after entry of the
Sale Order; provided, however, that the parties shall extend the
Closing Date for a reasonable amount of time not to exceed one
hundred twenty (120) days after entry of the Sale Order to allow
Sellers to cure any material breach of the representations and
warranties set forth in Sections 3.4, 3.5(a) through (c), 3.6, 3.9,
and 3.10; or
(c) the Chapter 11 Cases are converted to cases
under Chapter 7 of the Bankruptcy Code or a trustee is appointed
under the Chapter 11 Cases and, in either event, the trustee
appointed for such purposes does not agree and consent to a closing
hereunder and the Bankruptcy Court does not otherwise order the
trusee to close upon the transactions contemplated hereunder within
one hundred twenty (120) days after entry of the Sale Order.
In the event of a termination in accordance with this Section 9.4,
and provided that each of Sellers and Purchaser have used their
best efforts to effectuate a closing of the transactions
contemplated hereunder, except as provided in Section 1.5(c),
neither Sellers nor Purchaser shall suffer any liability or
obligation to the other.
ARTICLE X
MISCELLANEOUS
10.1 Expenses. Each party hereto shall bear its own costs
and expenses, including attorneys' fees, with respect to the
transactions contemplated hereby. Notwithstanding the foregoing,
in the event of any action or proceeding to interpret or enforce
this Agreement, the prevailing party in such action or proceeding
(i.e., the party who, in light of the issues contested or
determined in the action or proceeding, was more successful) shall
be entitled to have and recover from the non-prevailing party such
costs and expenses (including, without limitation, all court costs
and reasonable attorneys' fees) as the prevailing party may incur
in the pursuit or defense thereof.
10.2 Amendment. This Agreement may be amended, modified or
supplemented but only in writing signed by all of the parties
hereto.
10.3 Notices. Any notice, request, instruction or other
document to be given hereunder by a party hereto shall be in
writing and shall be deemed to have been given, (a) when received
if given in person, (b) on the date of transmission if sent by
telex, telecopy or other wire transmission (with answer back
confirmation of such transmission), (c) upon delivery, if delivered
by a nationally known commercial courier service providing next day
delivery service (such as Federal Express), or (d) upon delivery,
or refusal of delivery, if deposited in the U.S. mail, certified or
registered mail, postage prepaid:
If to Sellers, addressed as follows:
Discovery Zone, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Young ▇▇▇▇▇▇▇ Stargatt & ▇▇▇▇▇▇, LLP
11th Floor, ▇▇▇▇▇▇ Square North
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Foothill Capital Corporation
▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Otterbourg, Steindler, Houston & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser, addressed as follows:
CEC Entertainment, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
5400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other individual or address as a party hereto may
designate for itself by notice given as herein provided.
10.4 Waivers. The failure of a party hereto at any time or
times to require performance of any provision hereof shall in no
manner affect its right at a later time to enforce the same. No
waiver by a party of any condition or of any breach of any term,
covenant, representation or warranty contained in this Agreement
shall be effective unless in writing, and no waiver in any one or
more instances shall be deemed to be a further or continuing waiver
of any such condition or breach in other instances or a waiver of
any other condition or breach of any other term, covenant,
representation or warranty.
10.5 Counterparts and Execution. This Agreement may be
executed simultaneously in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Any counterpart may be executed by
facsimile signature and such facsimile signature shall be deemed an
original.
10.6 Headings. The headings preceding the text of Articles
and Sections of this Agreement and the Schedules thereto are for
convenience only and shall not be deemed part of this Agreement.
10.7 APPLICABLE LAW AND JURISDICTION. THIS AGREEMENT (AND
ALL DOCUMENTS, INSTRUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED
PURSUANT TO THE TERMS AND PROVISIONS HEREOF (COLLECTIVELY,
"ANCILLARY DOCUMENTS")) SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY WITHIN
SUCH JURISDICTION. PURCHASER AND SELLERS FURTHER AGREE THAT THE
BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL
DISPUTES AND OTHER MATTERS RELATING TO (a) THE INTERPRETATION AND
ENFORCEMENT OF THIS AGREEMENT OR ANY ANCILLARY DOCUMENT; AND/OR (b)
THE ACQUIRED ASSETS AND/OR ASSUMED FUNCENTER LEASES AND PURCHASER
EXPRESSLY CONSENTS TO AND AGREES NOT TO CONTEST SUCH EXCLUSIVE
JURISDICTION.
10.8 Binding Nature; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interest or obligations hereunder
shall be assigned by any of the parties hereto without prior
written consent of the other parties; except, that (i) Purchaser
may assign any of its rights hereunder to any affiliate or
wholly-owned subsidiary, (ii) Purchaser may grant a security
interest in its rights and interests hereunder to its lenders, and
(iii) as otherwise provided in this Agreement. Nothing contained
herein, express or implied, is intended to confer on any Person
other than the parties hereto or their successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of
this Agreement.
10.9 No Third Party Beneficiaries. Except as provided in
Section 2.3 hereof as to McDonald's, this Agreement is solely for
the benefit of the parties hereto and their respective affiliates
and no provision of this Agreement shall be deemed to confer upon
third parties any remedy, claim, liability, reimbursement, claim of
action or other right in excess of those existing without reference
to this Agreement.
10.10 Tax Matters. Purchaser shall be responsible for the
timely payment of all sales, use, transfer (including, without
limitation, documentary transfer, stamp and like taxes) and similar
taxes payable in connection with the consummation of the
transactions contemplated by this Agreement.
10.11 Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to this
Agreement to express their mutual intent, and no rule of strict
construction shall be applied against any party. Any reference to
any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
10.12 Entire Understanding. This Agreement, the Exhibits and
Schedules hereto, and the Ancillary Documents contemplated
hereunder set forth the entire agreement and understanding of the
parties hereto in respect to the transactions contemplated hereby
and the Agreement, the Exhibits and Schedules hereto and the
Ancillary Documents contemplated hereunder supersede all prior
agreements, arrangements and understandings relating to the subject
matter hereof and is not intended to confer upon any other person
any rights or remedies hereunder. There have been no
representations or statements, oral or written, that have been
relied on by any party hereto, except those expressly set forth in
this Agreement, the Exhibits and Disclosure Schedules hereto, and
the Ancillary Documents contemplated hereunder.
{Signature Page Follows}
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered on the date first above
written.
PURCHASER:
CEC ENTERTAINMENT, INC.
By:--------------------
Name:
Title:
SELLERS:
DISCOVERY ZONE, INC.
By:
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Operating
Officer
DISCOVERY ZONE LICENSING, INC.
By:
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President -
Licensing
The undersigned corporations hereby acknowledge and consent to
the transactions contemplated in the foregoing Agreement and have
caused this Agreement to be executed as of the date and year first
above-written.
CONSENTING PARTIES
DZ PARTY, INC.
By:--------------------
Name:
Title:
DISCOVERY ZONE
(PUERTO RICO), INC.
By:
Name:
Title:
Exhibit "A"
Form of Sale Order
Schedule 1.2
Assumed FunCenter Leases
------------------------
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5. #▇▇▇ - ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
6. #▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
7. #▇▇▇ - ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇
Schedule 1.3(g)
Regional Headquarters
1. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
2. ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
3. ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
Schedule 1.5
Operating FunCenters
1 #201 Baltimore, MD
2 #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇ #▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
4 #219 New Hartford, NY
5 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
7 #225 Whitehall, PA
8 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇ #▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
10 #▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
12 #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇, ▇▇
14 #▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
16 #260 Paramus, NJ
17 #▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
19 #266 Middletown, NY
20 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇
22 #273 York, PA
23 #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
25 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
27 #308 Overland Park, KS
28 #309 Orland Park, IL
29 #▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
31 #▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
33 #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
35 #324 Exton, PA
36 #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
38 #335 Schaumburg, IL
39 #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
41 #340 Coon Rapids, MN
42 #▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
44 #▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
46 #348 San Antonio, TX
47 #▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
49 #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
51 #405 Knoxville, TN
52 #▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
54 #▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
56 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
58 #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
60 #▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
62 #431 Flint, MI
63 #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
65 #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
67 #▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇
68 #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
70 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
71 #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
73 #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
75 #502 Houston, TX
76 #▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇, ▇▇
78 #511 Ft. Worth, TX
79 #▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
81 #▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇, ▇▇
83 #518 Colorado Springs, CO
84 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
86 #▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
88 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
90 #542 Oklahoma City, OK
91 #546 Austin, TX
92 #547 Waipahu, HI
93 #549 Taylorsville, UT
94 #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
96 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
98 #563 Redwood City, CA
99 #565 Springfield, OR
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
105 #▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
107 #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
109 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
111 #746 Ft. ▇▇▇▇▇, IN
▇▇▇ #▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇
114 #755 Pembroke Pines, FL
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
117 #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
124 #792 Ft. ▇▇▇▇▇, FL
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
126 #797 Birmingham, AL
127 #▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
129 #901 Hatillo, Puerto Rico
130 #905 San ▇▇▇▇, Puerto Rico
Schedule 3.5
Owned Real Property
1. #307 - ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
2. #▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
3. #▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
4. #339 - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
5. #340 - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
6. #▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
7. #▇▇▇ - ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
8. #▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
9. #348 - ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
10. #349 - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
11. #353 - ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
12. #▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
13. #334 - ▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
14. Vacant land located in Vancouver, WA
15. Vacant land located in ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, PA
Schedule 3.9
Owned Intellectual Property
ATTACHED
