Exhibit 10.43
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of
May 29, 1996, by and among Clearview Cinema Group, Inc., a Delaware corporation
("CCG"), CCC Washington Cinema Corp., a Delaware corporation ("WCC"), CCC
Xxxxxxx Cinema Corp., a Delaware corporation ("ACC"), and CCC New City Cinema
Corp., a Delaware corporation ("NCC," and collectively with CCG, WCC, ACC, and
NCC, the "Purchasers"), and Township of Washington Theatre, Inc., a New Jersey
corporation ("Washington"), Xxxxxxx Xxxxxxx Cinema, Inc., a New Jersey
corporation ("Xxxxxxx"), and New City Cinema, Inc., a New York corporation ("New
City," and collectively with Washington and Xxxxxxx, the "Sellers").
The Sellers currently own and operate the Theaters, as
hereinafter defined.
The Sellers desire to sell to the Purchasers, and the Purchasers
desire to purchase from the Sellers, certain of the assets owned by the Sellers
and utilized in the operation of the Theaters, upon the terms and subject to the
conditions set forth below.
In consideration of the representations, warranties, covenants,
and agreements contained in this Agreement, the parties, each intending to be
legally bound hereby, agree as set forth below:
I ARTICLE
DEFINITIONS; CONSTRUCTION
1.01. Definitions. As used in this Agreement, the following terms have
the meanings specified in this Section. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"Agreement" means this Asset Purchase Agreement, as it may be amended
from time to time.
"Benefit Plan" has the meaning given that term in Section 3.19(a).
"Business" means business of the operation of the Theaters conducted by
Sellers.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List pursuant to Superfund.
"Closing" has the meaning given that term in Section 2.05.
"Closing Date" has the meaning given that term in Section 2.05.
"Code" means the Internal Revenue Code of 1986, as amended, and the
applicable rulings and regulations thereunder.
"Contract" and "Contracts" have the respective meanings given those
terms in Section 3.10.
"Damages" has the meaning given that term in Section 7.05.
"Defined Benefit Plan" has the meaning given that term in Section
3.19(e).
"Encumbrance" means any mortgage, deed of trust, pledge, security
interest, encumbrance, option, right of first refusal, agreement of sale,
adverse claim, easement, lien, lease, assessment, restrictive covenant,
encroachment, right-of-way, burden or charge of any kind or nature whatsoever or
any item similar or related to the foregoing.
"Environmental Law" means any applicable Law relating to public health
and safety or protection of the environment, including common law nuisance,
property damage and similar common law theories.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the applicable rulings and regulations thereunder.
"Escrowed Funds" means the funds held in escrow subject to the Escrow
Agreement dated as of May 16, 1996 among CCG, Washington, Allwood, New City, and
Xxxx Xxxxxxxx, as Escrow Agent, and the other parties thereto.
"FASB" means the Financial Accounting Standards Board or its successor.
"Financial Statements" has the meaning given that term in Section
3.04(a).
"GAAP" means United States generally accepted accounting principles.
"Governing Documents" means, with respect to any Person who is not a
natural Person, the certificate or articles of incorporation, bylaws, deed of
trust, formation or governing agreement and other charter documents or
organization or governing documents or instruments of such Person.
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"Governmental Body" means any court, government (federal, state, local
or foreign), department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority or instrumentality.
"Indemnification Escrow Fund" has the meaning given that term In Section
2.06.
"Indemnified Party" has the meaning given that term in Section 7.05.
"Indemnifying Party" has the meaning given that term in Section 7.04.
"Intellectual Property" has the meaning given that term in Section 3.18.
"IRS" means the Internal Revenue Service.
"knowledge" as to any person means, as to a natural person, the actual
knowledge of such person and, as to any other person, the actual knowledge of an
executive officer of such person.
"Law" means any applicable federal, state, municipal, local or foreign
statute, law, ordinance, rule, regulation, judgment or order of any kind or
nature whatsoever including any public policy, judgment or order of any
Governmental Body or principle of common law.
"Leases" has the meaning given that term in Section 3.12.
"Liabilities" with respect to any Person, means all debts, liabilities
and obligations of such Person of any nature or kind whatsoever, whether or not
due or to become due, accrued, fixed, absolute, matured, determined,
determinable or contingent and whether or not incurred directly by such Person
or by any predecessor of such Person, and whether or not arising out of any act,
omission, transaction, circumstance, sale of goods or service or otherwise.
"Litigation" has the meaning given that term in Section 3.09.
"Multiemployer Plan" has the meaning given that term in Section 3.19(f).
"Other Agreement" means each other agreement or document to be executed
and delivered in connection with the transactions contemplated by this Agreement
on or before Closing.
"Permit" and "Permits" have the respective meanings given those terms in
Section 3.11.
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"Permitted Encumbrances" means (i) liens for current taxes not yet due,
and (ii) Encumbrances that do not or will not either individually or in the
aggregate adversely affect the value of the property encumbered or prohibit or
interfere with the operations of the Business.
"Person" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, any other legal entity, or
a Governmental Body.
"Purchase Price" has the meaning given that term in Section 2.04.
"Purchased Assets" has the meaning given that term in Section 2.01.
"Purchaser Damages" has the meaning given that term in Section 7.02.
"Purchaser Indemnitees" has the meaning given that term in Section 7.02.
"Qualified Plan" has the meaning given that term in Section 3.19(d).
"Real Property" has the meaning given that term in Section 3.12.
"Regulated Material" means any hazardous substance as defined by any
Environmental Law and any other material regulated by any applicable
Environmental Law, including petroleum, petroleum-related material, crude oil or
any fraction thereof, polychlorinated biphenyls, and any friable asbestos.
"Related Party" means (i) Seller, (ii) any Affiliate of any Seller,
(iii) any officer or director of any Person identified in clauses (i) or (ii)
preceding, and (iv) any spouse, sibling, ancestor or lineal descendant of any
natural Person identified in any one of the preceding clauses.
"Retained Assets" has the meaning given that term in Section 2.02.
"Retained Liabilities" has the meaning given that term in Section 2.03.
"Security Right" means, with respect to any security, any option,
warrant, subscription right, preemptive right, other right, proxy, put, call,
demand, plan, commitment, agreement, understanding or arrangement of any kind
relating to such security, whether issued or unissued, or any other security
convertible into or exchangeable for any such security. "Security Right"
includes any right relating to issuance, sale, assignment, transfer, purchase,
redemption, conversion, exchange, registration or voting and includes rights
conferred by statute, by the issuer's Governing Documents or by agreement.
"Seller Damages" has the meaning given that term in Section 7.03.
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"Seller Indemnitees" has the meaning given that term in Section 7.03.
"Seller Plan" has the meaning given that term in Section 3.19(b).
"Superfund" means the Comprehensive Environmental Response Compensation
and Liability Act of 1980, 42 U.S.C. Sections 6901 et seq., as amended.
"Tax" means any domestic or foreign federal, state, county, local or
foreign tax, levy, impost or other charge of any kind whatsoever, including any
interest or penalty thereon or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to any Tax, including any schedule or
attachment thereto, and including any amendment thereof.
"Theaters" means the movie theaters operated by the Sellers at the
locations set forth in the Leases.
"12-31-95 Balance Sheet" means balance sheet of any Seller dated
12-31-95.
1.02. Construction. As used herein, unless the context otherwise
requires: (i) references to "Article" or "Section" are to an article or section
hereof; (ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits
and Schedules attached hereto and are incorporated herein by reference and made
a part hereof; (iii) "include," "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
ARTICLE II
PURCHASE AND SALE
2.01. Sale and Purchase of Assets. At the Closing, Sellers shall sell
and transfer to Purchasers, and Purchasers shall purchase from Sellers, all of
Sellers' properties and business as a going concern and goodwill and assets of
every kind, nature and description existing on the Closing Date, wherever such
assets are located and whether real, personal or mixed, tangible or intangible,
in electronic form or otherwise, and whether or not any of such assets have any
value for accounting purposes or are carried or reflected on or specifically
referred to in its books or financial statements, except those assets
specifically excluded pursuant to Section 2.02, free and clear of all
Encumbrances other than Permitted Encumbrances. The properties, business,
goodwill and assets of Seller to be transferred hereunder (collectively, the
"Purchased Assets") shall include but not be limited to the following:
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(a) All of Sellers' furniture, fixtures, equipment, paper concession
goods, and supplies including the items listed on Schedule 2.01(a);
(b) All of Sellers' rights under the Leases (as defined in Section 3.12)
and all of Sellers' rights under all other leases, contracts, agreements and
purchase and sale orders (collectively, the "Contracts") including any and all
security deposits paid under the Leases and the Contracts (the "Security
Deposits") and all of Sellers' rights in and to the telephone numbers currently
used for the Theaters;
(c) All of Sellers' goodwill and rights in and to the names of each of
the Theaters and in any other tradename, trademark, fictitious name or service
xxxx, or any variant of any of them, and any applications therefor or
registrations thereof, and any other forms of Intellectual Property;
(d) To the extent not described above, all of the assets reflected on
the Balance Sheets.
2.02. Retained Assets. Sellers shall retain and the Purchased Assets
shall not include the following assets: (i) the consideration to be delivered to
Sellers pursuant to this Agreement, (ii) Sellers' other rights hereunder, (iii)
Sellers' minute book, stock book and seal, (iv) all claims, choses in action,
causes of action and judgments in respect of any litigation matter identified on
Schedule 3.12 and with respect to any other Retained Liability, and (v) all of
Sellers' cash, cash in banks, cash equivalents, bank and mutual fund accounts,
trade and other notes and accounts receivable, deposits (other than the Security
Deposits), investments, securities, advance payments, prepaid items and
expenses, deferred charges, rights of offset and credits and claims for refund
(collectively, the "Retained Assets").
2.03. Assumption of Certain Obligations; Retained Liabilities. At the
Closing, each of WCC, ACC, and NCC shall respectively assume the liabilities and
obligations of Washington, Xxxxxxx and New City arising from the Leases (as
defined in Section 3.12) and the Contracts. Except as expressly provided in this
Agreement, the Purchasers do not and shall not assume or in any way undertake to
pay, perform, satisfy or discharge any other liabilities or obligations of the
Sellers (the "Retained Liabilities") and the Sellers shall pay and satisfy when
due all Retained Liabilities.
2.04. Purchase Price; Allocation of Purchase Price.
(a) Purchase Price. The aggregate purchase price for the Purchased
Assets (the "Purchase Price") shall be Four Million Eight Hundred Thousand
Dollars ($4,800,000).
(b) Allocation. The Purchase Price shall be allocated among the
Purchased Assets in accordance with the allocation set forth in Schedule 2.04.
Purchasers and Sellers shall report the federal, state and local income and
other tax consequences of the purchase and sale contemplated hereby in a manner
consistent with such allocation and shall not take
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any position inconsistent therewith upon examination of any tax return, in any
refund claim, in any litigation, or otherwise.
2.05. Closing. Subject to the terms and conditions of this Agreement,
the sale and purchase of the Purchased Assets and the assumption of the Assumed
Liabilities contemplated hereby shall take place at a closing (the "Closing") at
the offices of Xxxxxxxxxxx & Xxxxxxxx LLP, 1251 Avenue of the Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at such time or on such date as the Sellers and
the Purchasers may mutually agree (the day on which the Closing takes place
being the "Closing Date"), but in no event later than July 31, 1996.
2.06. Payment of the Purchase Price. At Closing, the Purchase Price
shall be paid by Purchasers to Sellers as follows:
(i) delivery by Xxxx Xxxxxxxx, as Escrow Agent, to Sellers of the
Escrowed Funds
(ii) wire transfer of federal funds in the amount of $100,000 to
be held in Escrow (the "Indemnification Escrow Fund") by Xxxx Xxxxxxxx, Esq. as
Escrow Agent pursuant to the Indemnification Escrow Agreement in the form of
Exhibit A hereto (the "Indemnification Escrow Agreement"); and
(iii) the remainder of the Purchase Price (calculated as (A) the
Purchase Price minus (B) the sum of (1) the Escrowed Funds and (2) the
Indemnification Escrow Fund) by wire transfer of federal funds to Sellers
pursuant to wire transfer instructions supplied by Sellers to Purchasers.
2.07. Proration of Expenses. All accrued expenses associated with the
Leases included in the Purchased Assets, such as electricity, gas, water, sewer,
telephone, property taxes, security services and similar items, shall be
prorated between Purchasers and Sellers as of the Closing Date. Purchasers and
Sellers shall settle such amounts on or before forty-five days after the Closing
Date.
2.08. Passage of Title. Title to all Purchased Assets shall pass from
Sellers to Purchasers at Closing, subject to the terms and conditions of this
Agreement. Purchasers assume no risk of loss to the Purchased Assets prior to
Closing.
2.09. Certain Consents. Nothing in this Agreement shall be construed as
an attempt to assign any contract, agreement, Permit, franchise, or claim
included in the Purchased Assets which is by its terms or in law nonassignable
without the consent of the other party or parties thereto, unless such consent
shall have been given, or as to which all the remedies for the enforcement
thereof enjoyed by Seller would not, as a matter of law, pass to Purchasers as
an incident of the assignments provided for by this Agreement. In order,
however, to provide Purchasers with the full realization and value of every
contract, agreement, Permit, franchise and claim of the character described in
the immediately preceding sentence, Sellers
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agree that on and after the Closing, they will, at the request and under the
direction of Purchasers, in the name of Sellers or otherwise as Purchasers shall
specify take all reasonable action (including without limitation the appointment
of the appropriate Purchaser as attorney-in-fact for Sellers) and do or cause to
be done all such things as shall in the opinion of Purchasers or their counsel
be necessary or proper (i) to assure that the rights of Sellers under such
contracts, agreements, Permits, franchises and claims shall be preserved for the
benefit of Purchasers and (ii) to facilitate receipt of the consideration to be
received by Sellers in and under every such contract, agreement, Permit,
franchise and claim, which consideration shall be held for the benefit of, and
shall be delivered to, Purchasers. Nothing in this Section shall in any way
diminish Sellers' obligations hereunder to obtain all consents and approvals and
to take all such other actions prior to or at Closing as are necessary to enable
Sellers to convey or assign valid title to all the Purchased Assets to
Purchasers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers represent and warrant, jointly and severally, to the
Purchasers as follows:
3.01. Organization, Qualification; Capitalization. Each Seller is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has the corporate power and authority
to own or lease its properties, and carry on the Business as now conducted, and
each Seller has the power and authority to enter into this Agreement and the
Other Agreements to which it is or is to become a party and perform its
obligations hereunder and thereunder. Each Seller is duly qualified and in good
standing as a foreign corporation and is duly authorized to transact business in
each jurisdiction wherein the character of the properties owned or leased by it,
or the nature of the activities conducted by it make such qualification and good
standing necessary, except in those jurisdictions where the failure to be so
qualified and in good standing would not have a material adverse effect on such
Seller. The authorized capital stock of each Seller and the issued and
outstanding shares and the record owners thereof, respectively, are as set forth
on Schedule 3.01.
3.02. Authorization; Enforceability. This Agreement and each Other
Agreement to which each Seller is a party have been duly executed and delivered
by and constitute the legal, valid and binding obligations of such Seller,
enforceable against such Seller in accordance with their respective terms and
each Other Agreement to which each Seller is to become a party pursuant to the
provisions hereof, when executed and delivered by such Seller, will constitute
the legal, valid and binding obligation of such Seller, enforceable against such
Seller in accordance with the terms of such Other Agreement, except as may be
limited by applicable bankruptcy, insolvency, moratorium, fraudulent transfer,
preference and other laws and equitable principles affecting the scope and
enforcement to creditors' rights generally, and are also limited by Purchaser's
implied covenants of good faith, fair dealing and commercially reasonable
conduct, and by the effects of judicial discretion on the availability of
remedies and realization of benefits under and enforceability of this Agreement
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and the Other Agreements in all respects as written. All actions contemplated by
this Agreement have been duly and validly authorized by all necessary
proceedings by each Seller.
3.03. No Violation of Laws or Agreements; Consents. Neither the
execution and delivery of this Agreement or any Other Agreement to which any
Seller is or is to become a party, the consummation of the transactions
contemplated hereby or thereby nor the compliance with or fulfillment of the
terms, conditions or provisions hereof or thereof by such Seller will: (
contravene any provision of any Governing Document of any Seller, ( conflict
with, result in a breach of, constitute a default or an event of default (or an
event that might, with the passage of time or the giving of notice or both,
constitute a default or event of default) under any of the terms of, result in
the termination of, result in the loss of any right under, or give to any other
Person the right to cause such a termination of or loss under, any Purchased
Asset or any other contract, agreement or instrument to which such Seller is a
party or by which any of its assets may be bound or affected, ( result in the
creation, maturation or acceleration of any Assumed Liability or any other
Liability of any Seller (or give to any other Person the right to cause such a
creation, maturation or acceleration), ( violate any Law or violate any judgment
or order of any Governmental Body to which any Seller is subject or by which any
of the Purchased Assets or any of its other assets may be bound or affected, or
( result in the creation or imposition of any Encumbrance upon any of the
Purchased Assets or give to any other Person any interest or right therein.
Except as set forth on Schedule 3.03, no consent, approval or authorization of,
or registration or filing with, any Person is required in connection with the
execution and delivery by any Seller of this Agreement or any of the Other
Agreements to which such Seller is or is to become a party pursuant to the
provisions hereof or the consummation by Sellers of the transactions
contemplated hereby or thereby.
3.04. Financial Information.
(a) Financial Statements. The Sellers have previously provided to
the Purchasers a balance sheet, income statement and statement of cash flows for
each Seller at December 31, 1995 and for the year then ended, and income
statements and statements of cash flows for each Seller at December 31, 1993 and
December 31, 1994 and for the years then ended (collectively, the "Financial
Statements"). The Financial Statements: (i) have been prepared in accordance
with GAAP on a consistent basis throughout the indicated periods, and (ii)
fairly present the financial condition, assets and liabilities and results of
operation of Sellers at the dates and for the relevant periods indicated in
GAAP. All references in this Agreement to a Seller's "12-31-95 Balance Sheet"
mean such Seller's balance sheet dated 12-31-95.
(b) The aggregate gross box office and concession revenues for the
period from January 1, 1995 through December 31, 1995 are in excess of
$3,490,000.
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3.05. Undisclosed Liabilities. None of the Sellers has any debt,
obligation or liability, absolute, fixed, contingent or otherwise, of any nature
whatsoever, whether due or to become due, including any unasserted claim,
whether incurred directly or by any predecessor thereto, and whether arising out
of any act, omission, transaction, circumstance, sale of goods or services,
state of facts or other condition, except: (i) those reflected or reserved
against on the 12-31-95 Balance Sheet in the amounts shown therein; (ii) those
not required under GAAP to be reflected or reserved against in the 12-31-95
Balance Sheet that are expressly quantified and set forth in the Contracts
identified pursuant to Section 3.15; (iii) those disclosed on Schedule 3.05; and
(iv) those of the same nature as those set forth on the 12-31-95 Balance Sheet
that have arisen in the ordinary course of business of the Company after
December 31, 1995 through the date hereof, all of which have been consistent in
amount and character with past practice and experience, and none of which,
individually or in the aggregate, has had or will have an adverse effect on the
business, financial condition or prospects of any of the Sellers and none of
which is a liability for breach of contract or warranty or has arisen out of
tort, infringement of any intellectual property rights, or violation of Law or
is claimed in any pending or threatened legal proceeding.
3.06. No Changes. Since December 31, 1995, each Seller has conducted the
Business only in the ordinary course. Without limiting the generality of the
foregoing sentence, since December 31, 1995, except as set forth on Schedule
3.06, there has not been any: i) adverse change in the assets, Liabilities,
earning power, Business or prospects of any Seller; ii) damage or destruction to
or loss of any asset of any Seller, whether or not covered by insurance; iii)
strike or other labor trouble at any Seller; iv) creation of any Encumbrance on
any asset of the Seller other than any Permitted Encumbrance; v) increase in the
salary, wage or bonus of any employee of any Seller; vi) asset acquisition in
excess of $1000 for any individual acquisition, including capital expenditure,
other than the purchase of inventory in the ordinary course of business; vii)
disposition of any asset (other than inventory in the ordinary course of
business) for less than fair market value; viii) any failure to pay any
Liability when due; creation, termination or amendment of, or waiver of any
right under, any material agreement of Seller; or x) agreement or commitment to
do any of the foregoing.
3.07. Taxes. Each Seller has filed or caused to be filed on a timely
basis, or will file or cause to be filed on a timely basis or within a
timely-obtained extension, all Tax Returns that are required to be filed by it
prior to or on the Closing Date, pursuant to the Law of each governmental
authority with taxing power over it. No Seller has any Liability for any Tax
except Taxes disclosed on Schedule 3.07.
3.08. Condition of Assets; Title; Business. Sellers are engaged in the
Business and no other business. The Purchased Assets have been professionally
maintained and are in good working order and are suitable for the purposes for
which they are used in the Business. The Sellers have good, marketable and
exclusive title to all of the Purchased Assets subject to the terms of the
Leases; the Purchased Assets include all assets that are necessary for use in
and operation of the Business; and none of the Purchased Assets is
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subject to any Encumbrance or impairment, whether due to its condition, utility,
collectability or otherwise, other than Permitted Encumbrances.
3.09. No Pending Litigation or Proceedings. No action, suit,
investigation, claim or proceeding of any nature or kind whatsoever, whether
civil, criminal or administrative, by or before any Governmental Body or
arbitrator ("Litigation") is pending or, to the knowledge of any Seller,
threatened against or affecting Seller, the Business, any of the Purchased
Assets, the Assumed Liabilities, or any of the transactions contemplated by this
Agreement or any Other Agreement, and there is no basis for any such Litigation.
There is presently no outstanding judgment, decree or order of any Governmental
Body against or affecting any Seller, the Business, any of the Purchased Assets,
the Assumed Liabilities, or any of the transactions contemplated by this
Agreement or any Other Agreement. No Seller has pending Litigation against any
third party.
3.10. Contracts; Compliance. Disclosed on Schedule 3.10 and 3.12 is a
brief description of each contract, lease, indenture, mortgage, instrument,
commitment or other agreement, arrangement or understanding, oral or written,
formal or informal, that is included in the Purchased Assets (each, a "Contract"
and collectively, the "Contracts"). Each Contract is a legal, valid and binding
obligation of each Seller who is a party thereto and is in full force and
effect. Each Seller and each other party to each Contract has performed all
obligations required to be performed by it thereunder and is not in breach or
default, and is not alleged to be in breach or default, in any respect
thereunder, and no event has occurred and no condition or state of facts exists
(or would exist upon the giving of notice or the lapse of time or both) that
would become or cause a breach, default or event of default thereunder, would
give to any Person the right to cause such a termination or would cause an
acceleration of any obligation thereunder. No Seller is currently renegotiating
any Contract nor has any Seller received any notice of non-renewal or price
increase or sales or production allocation with respect to any Contract.
3.11. Permits; Compliance With Law. Schedule 3.11 sets forth for each
Seller the permits, certificates, licenses, franchises, privileges, approvals,
registrations and authorizations held by such Seller (each, a "Permit" and
collectively, "Permits"). The Permits are all such permits required under any
applicable Law or otherwise advisable in connection with the operation of the
Purchased Assets and Business. Each Permit is valid, subsisting and in full
force and effect. Each Seller is in compliance with and has fulfilled and
performed its obligations under each Permit held by it, and no event or
condition or state of facts exists (or would exist upon the giving of notice or
lapse of time or both) that could constitute a breach or default under any
Permit. No Seller is currently in violation of any Law or has received any
notice of any violation of Law, and no event has occurred or condition or state
of facts exists that could give rise to any such violation. No Seller has
received any notice of non-renewal of any Permit.
3.12. Real Property. Schedule 3.12 sets forth the agreements of lease
(the "Leases") pursuant to which the Sellers lease real property (collectively,
the "Real
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Property") and identifies the record title holder of all of the Real Property.
Each Seller has the right to quiet enjoyment of all Real Property in which it
holds a leasehold interest for the full term, including all renewal rights, of
the lease or similar agreement relating thereto. The use and operation of all
Real Property conform to all applicable building, zoning, safety and subdivision
Laws, Environmental Laws and other Laws, and all restrictive covenants and
restrictions and conditions affecting title. No Seller has received any written
or oral notice of assessments for public improvements against any Real Property
or any written or oral notice or order by any Governmental Body, any insurance
company that has issued a policy with respect to any of such properties or any
board of fire underwriters or other body exercising similar functions that i)
relates to violations of building, safety or fire ordinances or regulations, ii)
claims any defect or deficiency with respect to any of such properties or iii)
requests the performance of any repairs, alterations or other work to or in any
of such properties or in the streets bounding the same. Such public utilities
are all connected pursuant to valid permits, are all in good working order and
are adequate to service the operations of such facilities as currently conducted
and permit full compliance with all requirements of Law. No Seller has received
any written notice of any proposed, planned or actual curtailment of service of
any utility supplied to any facility of such Seller.
3.13. Environmental Matters. Except as disclosed in Schedule 3.13:
(a) Compliance; No Liability. Each Seller has operated the
Business and each parcel of Real Property in compliance with all applicable
Environmental Laws. No Seller is subject to any Liability, penalty or expense
(including legal fees), and no Purchaser will suffer or incur any loss,
Liability, penalty or expense (including legal fees) by virtue of any violation
of any Environmental Law occurring prior to the Closing, any environmental
activity conducted on or with respect to any property at or prior to the Closing
or any environmental condition existing on or with respect to any property at or
prior to the Closing, in each case whether or not any Seller permitted or
participated in such act or omission.
(b) Treatment; CERCLIS. No Seller has treated, stored, generated,
recycled or disposed of any Regulated Material on any real property, and no
other Person has treated, stored, recycled or disposed of any Regulated Material
on any part of the Real Property. There has been no release of any Regulated
Material at, on or under any Real Property. No Seller has transported any
Regulated Material or arranged for the transportation of any Regulated Material
to any location that is listed or proposed for listing on the National
Priorities List pursuant to Superfund, on CERCLIS or any other location that is
the subject of federal, state or local enforcement action or other investigation
that may lead to claims against such Seller for cleanup costs, remedial action,
damages to natural resources, to other property or for personal injury including
claims under Superfund. None of the Real Property is listed or, to the knowledge
of Sellers, proposed for listing on the National Priorities List pursuant to
Superfund, CERCLIS or any state or local list of sites requiring investigation
or cleanup.
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(c) Notices; Existing Claims; Certain Regulated Materials; Storage
Tanks. No Seller has received any request for information, notice of claim,
demand or other notification that it is or may be potentially responsible with
respect to any investigation, abatement or cleanup of any threatened or actual
release of any Regulated Material. No Seller is required to place any notice or
restriction relating to the presence of any Regulated Material at any Real
Property or in any deed to any Real Property. Schedule 3.14(c) sets forth a list
of all sites to which Sellers transported any Regulated Material for recycling,
treatment, disposal, other handling or otherwise. There has been no past, and
there is no pending or contemplated, claim by Sellers under any Environmental
Law or Laws based on actions of others that may have impacted on the Real
Property, and Sellers have not entered into any agreement with any Person
regarding any Environmental Law, remedial action or other environmental
Liability or expense. There are no storage tanks located on the Real Property,
whether underground or aboveground.
3.14. Customer Relations. There exists no condition or state of facts or
circumstances involving Sellers' customers, suppliers, distributors or
representatives that any Seller can reasonably foresee could adversely affect
the Business or the Purchased Assets after the Closing Date.
3.15. Transactions With Related Parties. No Related Party has any claim
of any nature, including any inchoate claim, against any of the Purchased Assets
or the Business. Except as expressly provided herein or in any Other Agreement
or as otherwise may be mutually agreed after Closing, (i) no Related Party will
at any time after Closing for any reason, directly or indirectly, be or become
entitled to receive any payment or transfer of money or other property of any
kind from Purchasers, and (ii) Purchasers will not at any time after Closing for
any reason, directly or indirectly, be or become subject to any obligation to
any Related Party; provided, however, that nothing in this Section 3.15 shall
prohibit any post-closing transactions between Related Parties that do not
affect the Purchasers, the Purchased Assets or the Business.
3.16. Labor Relations. The relations of each Seller with its employees
are good. No employee of any Seller is represented by any union or other labor
organization other than IATSE LOCAL #642, IATSE LOCAL #645, and IATSE LOCAL #
362. True and correct copies of the Union Agreements are attached as Schedule
3.16. No representation election, arbitration proceeding, grievance, labor
strike, dispute, slowdown, stoppage or other labor trouble is pending or, to the
knowledge of any Seller, threatened against, involving, affecting or potentially
affecting any Seller. No complaint against any Seller is pending or, to the
knowledge of Seller, threatened before the National Labor Relations Board, the
Equal Employment Opportunity Commission or any similar state or local agency, by
or on behalf of any employee of any Seller. No Seller has any Liability for any
occupational disease of any of its employees, former employees or others.
3.17. Insurance. The Purchasers have been provided a copy of each
insurance policy as to which any Seller is the owner, insured or beneficiary,
whether on an
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"occurrence" or a "claims made" basis, together with a summary of such policies
and copies of certificates of insurance executed by each insurer or its
authorized agent evidencing such insurance.
3.18. Intellectual Property Rights. Schedule 3.18 contains a complete
list and description of all of the trademark and service xxxx rights,
applications and registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications, letters patent,
patent applications and licenses of any of the foregoing owned or used by any
Seller in or applicable to the Business. Each Seller has the entire right, title
and interest in and to, or has the exclusive perpetual royalty-free right to
use, the intellectual property rights disclosed on Schedule 3.18 and all other
processes, know-how, show-how, formulae, trade secrets, inventions, discoveries,
improvements, blueprints, specifications, drawings, designs, and other
proprietary rights necessary or applicable to or advisable for use in the
Business ("Intellectual Property"), free and clear of all Encumbrances. Schedule
3.18 separately discloses all Intellectual Property under license. The
Intellectual Property is valid and not the subject of any interference,
opposition, reexamination or cancellation. To the knowledge of any Seller, no
Person is infringing upon nor has any Person misappropriated any Intellectual
Property. No Seller is infringing upon the intellectual property rights of any
other Person.
3.19. Employee Benefits.
(a) Benefit Plans; Seller Plans. Schedule 3.19 discloses all written and
unwritten "employee benefit plans" within the meaning of Section 3(3) of ERISA,
and any other written and unwritten profit sharing, pension, savings, deferred
compensation, fringe benefit, insurance, medical, medical reimbursement, life,
disability, accident, post-retirement health or welfare benefit, stock option,
stock purchase, sick pay, vacation, employment, severance, termination or other
plan, agreement, contract, policy, trust fund or arrangement (each, a "Benefit
Plan"), whether or not funded and whether or not terminated, (i) maintained or
sponsored by any Seller, or (ii) with respect to which any Seller has or may
have Liability or is obligated to contribute, or (iii) that otherwise covers any
of the current or former employees of any Seller or their beneficiaries, or (iv)
as to which any such current or former employees or their beneficiaries
participated or were entitled to participate or accrue or have accrued any
rights thereunder (each, a "Seller Plan").
(b) Seller Group Matters; Funding. No Seller nor any corporation that
may be aggregated with any Seller under Sections 414(b), (c), (m) or (o) of the
Code (the "Seller Group") has any obligation to contribute to or any Liability
under or with respect to any Benefit Plan of the type described in Sections 4063
and 4064 of ERISA or Section 413(c) of the Code. No Seller has any Liability,
and after the Closing, no Purchaser will have any Liability, with respect to any
Benefit Plan of any other member of the Seller Group, whether as a result of
delinquent contributions, distress terminations, fraudulent transfers, failure
to pay premiums to the PBGC, withdrawal Liability or otherwise. No accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code) exists nor has
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any funding waiver from the IRS been received or requested with respect to any
Seller Plan or any Benefit Plan of any member of the Seller Group, and no excise
or other Tax is due or owing because of any failure to comply with the minimum
funding standards of the Code or ERISA with respect to any of such plans.
(c) Compliance. Each Seller Plan and all related trusts, insurance
contracts and funds have been created, maintained, funded and administered in
all respects in compliance with all applicable Laws and in compliance with the
plan document, trust agreement, insurance policy or other writing creating the
same or applicable thereto. No Seller Plan is or is proposed to be under audit
or investigation, and no completed audit of any Seller Plan has resulted in the
imposition of any Tax, fine or penalty.
(d) Qualified Plans. Schedule 3.19 discloses each Seller Plan that
purports to be a qualified plan under Section 401(a) of the Code and exempt from
United States federal income tax under Section 501(a) of the Code (a "Qualified
Plan"). With respect to each Qualified Plan, a determination letter (or opinion
or notification letter, if applicable) has been received from the IRS that such
plan is qualified under Section 401(a) of the Code and exempt from federal
income tax under Section 501(a) of the Code. No Qualified Plan has been amended
since the date of the most recent such letter. No member of the Seller Group,
nor any fiduciary of any Qualified Plan, nor any agent of any of the foregoing,
has done anything that would adversely affect the qualified status of a
Qualified Plan or the qualified status of any related trust.
(e) No Defined Benefit Plans. No Seller Plan is a defined benefit plan
within the meaning of Section 3(35) of ERISA (a "Defined Benefit Plan"). No
Defined Benefit Plan sponsored or maintained by any member of the Seller Group
has been terminated or partially terminated after September 1, 1974, except as
set forth on Schedule 3.19. Each Defined Benefit Plan listed as terminated on
Schedule 3.19 has met the requirement for standard termination of
single-employer plans contained in Section 4041(b) of ERISA. During the
five-year period ending on the Closing Date, no member of the Seller Group has
transferred a Defined Benefit Plan to a corporation that was not, at the time of
transfer, related to the transferor in any manner described in Sections 414(b),
(c), (m) or (o) of the Code.
(f) Multiemployer Plans. Except as set forth on Schedule 3.19 hereto, no
Seller Plan is a multiemployer plan within the meaning of Section 3(37) or
Section 4001(a)(3) of ERISA (a "Multiemployer Plan"). No member of the Seller
Group has withdrawn from any Multiemployer Plan or incurred any withdrawal
Liability to or under any Multiemployer Plan. No Seller Plan covers any
employees of any member of the Seller Group in any foreign country or territory.
(g) Prohibited Transactions; Fiduciary Duties; Post-Retirement Benefits.
No prohibited transaction (within the meaning of Section 406 of ERISA and
Section 4975 of the Code) with respect to any Seller Plan exists or has occurred
that could subject any Seller to any Liability or Tax under Part 5 of Title I of
ERISA or Section 4975 of the Code. No
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member of the Seller Group, nor any administrator or fiduciary of any Seller
Plan, nor any agent of any of the foregoing, has engaged in any transaction or
acted or failed to act in a manner that will subject any Seller to any Liability
for a breach of fiduciary or other duty under ERISA or any other applicable Law.
With the exception of the requirements of Section 4980B of the Code, no
post-retirement benefits are provided under any Seller Plan that is a welfare
benefit plan as described in ERISA Section 3(1).
3.20. Subsidiaries and Investments. The Purchased Assets do not contain
any shares of capital stock of or other equity interest in any corporation,
partnership, joint venture or other entity.
3.21. Finders' Fees. No Seller nor any of its officers, directors or
employees has employed any broker or finder or incurred any Liability for any
brokerage fee, commission or finders' fee in connection with any of the
transactions contemplated hereby or by any Other Agreement.
3.22. Payments to Xxxxx Xxxxxxx. The rate of compensation to be paid to
Xx. Xxxxxxx doing business as Cinema Services pursuant to Section 5.06 is no
greater than the lowest rate of compensation that the Sellers paid to Xx.
Xxxxxxx during the twelve-month period ending on the Closing Date.
3.23. Disclosure. None of the representations or warranties of Sellers
contained herein and none of the information contained in the Schedules referred
to herein or the other information or documents furnished or to be furnished to
CCG or any of its representatives by any Seller expressly pursuant to the terms
of this Agreement is false or misleading in any material respect or omits to
state a fact herein or therein necessary to make the statements herein or
therein not misleading in any material respect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
As an inducement to Sellers to enter into this Agreement and consummate
the transactions contemplated hereby, the Purchasers, jointly and severally,
represent and warrant to Sellers as follows:
4.01. Organization. Each Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and has the corporate power and authority to own or lease its
properties, carry on its business, enter into this Agreement and the Other
Agreements to which it is or is to become a party and perform its obligations
hereunder and thereunder.
4.02. Authorization; Enforceability. This Agreement and each Other
Agreement to which each Purchaser is a party have been duly executed and
delivered by and constitute the legal, valid and binding obligations of such
Purchaser, enforceable against it in accordance
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with their respective terms and each Other Agreement to which such Purchaser is
to become a party pursuant to the provisions hereof, when executed and delivered
by such Purchaser, will constitute the legal, valid and binding obligation of
such Purchaser, enforceable against such Purchaser in accordance with the terms
of such Other Agreement except as may be limited by applicable bankruptcy,
insolvency, moratorium, fraudulent transfer, preference and other laws and
equitable principles affecting the scope and enforcement to creditors' rights
generally, and are also limited by Sellers' implied covenants of good faith,
fair dealing and commercially reasonable conduct, and by the effects of judicial
discretion on the availability of remedies and realization of benefits under and
enforceability of this Agreement and the Other Agreements in all respects as
written. All actions contemplated by this Agreement have been duly and validly
authorized by all necessary proceedings by such Purchaser.
4.03. No Violation of Laws; Consents. Neither the execution and delivery
of this Agreement or any Other Agreement to which any Purchaser is or is to
become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by such Purchaser will: i) contravene any provision
of any Governing Document of such Purchaser, or ii) violate any Law or any
judgment or order of any Governmental Body to which such Purchaser is subject or
by which any of its assets may be bound or affected. Except as set forth on
Schedule 4.03 no consent, approval or authorization of, or registration or
filing with, any Person is required in connection with the execution and
delivery by such Purchaser of this Agreement or any of the Other Agreements to
which such Purchaser is or is to become a party pursuant to the provisions
hereof or the consummation by such Purchaser of the transactions contemplated
hereby or thereby.
4.04. No Pending Litigation or Proceedings. No Litigation is pending or,
to the knowledge of any Purchaser, threatened against or affecting any Purchaser
in connection with any of the transactions contemplated by this Agreement or any
Other Agreement to which any Purchaser is or is to become a party.
4.05. Finders' Fees. No Purchaser nor any of its officers, directors or
employees has employed any broker or finder or incurred any Liability for any
brokerage fee, commission or finders' fee in connection with any of the
transactions contemplated hereby.
ARTICLE V
CERTAIN COVENANTS
5.01. Conduct of Business Pending Closing. From and after the date
hereof and until the Closing Date or earlier termination hereof, unless the
Purchasers shall otherwise consent in writing, Sellers shall conduct their
affairs as follows:
(a) Ordinary Course; Compliance. The Business shall be conducted
only in the ordinary course and consistent with past practice. Sellers shall
professionally maintain
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the Purchased Assets and Assumed Liabilities in good condition and shall comply
in a timely fashion with the provisions of all Contracts and Permits and its
other agreements and commitments. Sellers shall preserve its Business
organization intact, keep available the services of its present employees and
preserve the goodwill of its suppliers, customers and others having business
relations with it. Sellers shall maintain in full force and effect their
policies of insurance, subject only to variations required by the ordinary
operations of the Business, or else shall obtain, prior to the lapse of any such
policy, substantially similar coverage with insurers of recognized standing.
(b) Transactions. No Seller shall: (i) transfer or dispose of any
asset except in the ordinary course of business; (ii) enter into any contract or
commitment the performance of which may extend beyond the Closing, except those
made in the ordinary course of business, the terms of which are consistent with
past practice; (iii) enter into any employment or consulting contract or
arrangement that is not terminable at will and without penalty or continuing
obligation; (iv) fail to pay any Liability or charge when due, other than
Liabilities contested in good faith by appropriate proceedings; or (v) take any
action or omit to take any action that will cause a breach or termination of any
Permit or Contract, other than termination by fulfillment of the terms
thereunder; or take any other actions that would cause the representations and
warranties in this Agreement not to be true in any material respect on the
Closing Date.
(c) Access, Information and Documents. Sellers shall give to
Purchasers and to Purchasers' employees and representatives (including
accountants, actuaries, attorneys, environmental consultants and engineers)
access during normal business hours to all of the properties, books, Tax
Returns, contracts, commitments, records, officers, personnel and accountants
(including independent public accountants and their workpapers concerning
Sellers) of Sellers and shall furnish to Purchasers all such documents and
copies of documents and all information with respect to the properties,
Liabilities and affairs of Sellers as Purchasers may reasonably request,
including but not limited to weekly reports of gross box office and concession
receipts, at the same time such reports are available to Sellers' management.
5.02. Publicity. Sellers and Purchasers shall not issue any press
release or otherwise make any announcements to the public or the employees of
Sellers with respect to this Agreement prior to the Closing Date without the
prior written consent of the other, except as required by Law.
5.03. Acquisition Proposals. No Seller shall (nor shall they permit any
of their affiliates to) directly or indirectly, solicit, initiate or encourage
any inquiries or the making of any proposals from, engage or participate in any
negotiations or discussions with, provide any confidential information or data
to, or enter into (or authorize) any agreement or agreement in principle with
any person or announce any intention to do any of the foregoing, with respect to
any offer or proposal to acquire all or any part of any Seller's assets,
properties, or Business whether by merger, purchase of capital stock or assets
or otherwise.
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5.04. Fulfillment of Agreements. Each party hereto shall use its best
efforts to cause all of those conditions to the obligations of the other under
Article VI that are not beyond its reasonable control to be satisfied on or
prior to the Closing and shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement. Without limiting the foregoing, Sellers shall, prior to Closing,
obtain the Consents identified in Schedule 3.03.
5.05. Certain Transitional Matters. Sellers shall cooperate with and
assist Purchasers and their authorized representatives in order to provide, to
the extent reasonably requested by any Purchaser, an efficient transfer of
control of the Purchased Assets and to avoid any undue interruption in the
activities and operations of the Business following the Closing Date.
5.06. Sellers' Employees. Purchasers shall have the right, but not the
obligation on or after the Closing Date to employ any or all of the employees of
Sellers.
5.07. Xxxxx Xxxxxxx. Purchasers shall continue to use the services of
Xxxxx Xxxxxxx doing business as Cinema Services as film buyer and xxxxxx for a
period of one year, at the following rates: New City ($200.00 per week), Xxxxxxx
($250.00 per week), and Washington ($150.00 per week), with a aggregate year-
end bonus for all three theaters of $1,500; provided, however, that the
agreement set forth in this Section 5.07 shall be enforceable solely by the
Sellers and shall not constitute an employment agreement as to Xx. Xxxxxxx nor
xxxxx to Xx. Xxxxxxx any rights to enforce such provision or otherwise.
5.08. Covenant Against Competition and Disclosure. To accord to
Purchasers the full value of their purchase, no Seller shall, directly or
indirectly, (i) for a period of five years after the Closing Date, directly or
indirectly, engage or become interested in (as owner, stockholder, partner or
otherwise) the operation of any movie theater within a seven and one-half mile
radius of any Theater, or (ii) disclose to anyone, or use in competition with
any Purchaser, any information with respect to any confidential or secret aspect
of the operations of the Business. It is acknowledged that stockholders,
officers, and/or directors of the Sellers currently operate certain movie
theaters and nothing in subsection (ii) of the previous sentence shall prohibit
the Sellers from operating such theaters. Sellers acknowledge that the remedy at
law for breach of the provisions of this Section 5.08 will be inadequate and
that, in addition to any other remedy Purchasers may have, they will be entitled
to an injunction restraining any such breach or threatened breach, without any
bond or other security being required. If any court construes the covenant in
this Section 5.08 or any part thereof, to be unenforceable because of its
duration or the area covered thereby, the court shall have the power to reduce
the duration or area to the extent necessary so that such provision is
enforceable. Until the third anniversary of the Closing Date, Sellers shall not
directly or indirectly solicit or offer employment to any person who is then an
employee of any Purchaser or was an employee of any Purchaser at any time after
the Closing to engage
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in any business similar to or in competition with the business of any Seller as
it has been conducted prior to Closing.
5.09. Change in Name. As soon as shall be reasonably practicable
following the Closing Date, each Seller shall file with the appropriate
authorities such documents as may be required to (i) change such Seller's name
to another name bearing no similarity to such Seller's current name and (ii)
withdraw any other fictitious names used in the Business. It is acknowledged
that no trade names of the Sellers are currently registered.
5.10. Books and Records. Sellers shall not destroy or dispose of any
books, records, and files relating to the business, properties, assets or
operations of any Seller to the extent that they pertain to the operations of
any Seller prior to the Closing Date for a period of five years from the Closing
Date or for the applicable statute of limitations for any tax liability.
ARTICLE VI
CONDITIONS TO CLOSING; TERMINATION
6.01 Conditions Precedent to Obligation of Purchasers. The obligation of
Purchasers to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at Closing of the following conditions, any one or more
of which may be waived in whole or in part by Purchasers at Purchasers' sole
option:
(a) Bringdown of Representations and Warranties; Covenants. Each
of the representations and warranties of Sellers contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date.
Sellers shall have performed in all respects all of the covenants and complied
with all of the provisions required by this Agreement to be performed or
complied with by them at or before the Closing.
(b) Litigation. No statute, regulation or order of any
Governmental Body shall be in effect that restrains or prohibits the
transactions contemplated hereby or that would limit or adversely affect
Purchasers' ownership of the Purchased Assets or assumption of the Assumed
Liabilities, and there shall not have been threatened, nor shall there be
pending, any action or proceeding challenging the lawfulness of or seeking to
prevent or delay any of the transactions contemplated by this Agreement or any
of the Other Agreements or seeking monetary or other relief by reason of the
consummation of any of such transactions.
(c) No Material Adverse Change. Between the date hereof and the
Closing Date, there shall have been no material adverse change, regardless of
insurance coverage therefor, in the Business or any of the assets, results of
operations, Liabilities, prospects or condition, financial or otherwise, of any
Seller.
-20-
(d) Closing Certificate. Each Seller shall have delivered a
certificate, dated the Closing Date, in the form of Exhibit B hereto, certifying
to the fulfillment of the conditions set forth in subparagraphs (a), (b) and (c)
of this Section. Such certificate shall constitute a representation and warranty
of such Seller with regard to the matters therein for purposes of this
Agreement.
(e) Closing Documents. Purchasers shall have received the
documents referred to in Section 6.03(a). All agreements, certificates, opinions
and other documents delivered by Sellers to Purchasers hereunder shall be in
form and substance satisfactory to Purchasers.
(f) Documents Concerning Leasehold Interests. Purchasers shall
have received from each lessor of each leasehold estate included in the
Purchased Assets consents to assignment of leasehold interest, consents to
leasehold mortgage, and estoppel certificates, and from each existing mortgagee
with respect to Real Property all consents, nondisturbance agreements, and other
documents as shall be requested by Provident Bank with respect to Provident's
security interest in the leasehold mortgage, all in form and substance
satisfactory to Purchasers and Provident Bank.
(g) Consents. Sellers shall have received the consents, approvals
and actions of the Persons referred to in Schedule 3.03.
(h) Right of First Refusal. Each of Xxxx Xxxxxx, Xxxxxx Xxxxxx
and Xxxx Xxxxxx shall have entered into an agreement in the form attached as
Exhibit c hereto, with respect to the purchase of the Parsippany and Succasunna
Multiplex Theaters owned by Xxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxx Xxxxxx, granting
a right of first refusal in favor of CCG, assignable by CCG to any wholly-owned
subsidiary now existing or created in the future, for a period of three years
after the Closing Date.
(i) Non-Competition Agreement. Each of Xxxx Xxxxxx, Xxxxxx Xxxxxx
and Xxxx Xxxxxx shall have entered into a Non-Competition Agreement in the form
attached as Exhibit D.
(j) Concessionaire Agreements. Each Seller shall have terminated,
on or prior to the Closing Date, any and all concessionaire or other agreements
between such Seller and Theater Confections, Inc. ("TCI"), and shall have
delivered to Purchasers a release granted by TCI to each respective Seller from
any liability under such concessionaire or other agreements.
(k) Payment of Obligations. Each Seller shall have paid any and
all amounts owed by such Seller to the Estate of Xxxxx Xxxxxxx.
6.02. Conditions Precedent to Obligation of Sellers. The obligation of
Sellers to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at
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Closing of the following conditions, any one or more of which may be waived in
whole or in part by Sellers at Sellers' sole option:
(a) Bringdown of Representations and Warranties; Covenants. Each
of the representations and warranties of Purchasers contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date. Each
Purchaser shall have performed all of the covenants and complied in all respects
with all of the provisions required by this Agreement to be performed or
complied with by it at or before the Closing.
(b) Litigation. No statute, regulation or order of any
Governmental Body shall be in effect that restrains or prohibits the
transactions contemplated hereby, and there shall not have been threatened, nor
shall there be pending, any action or proceeding by or before any Governmental
Body challenging the lawfulness of or seeking to prevent or delay any of the
transactions contemplated by this Agreement or the Other Agreements or seeking
monetary or other relief by reason of the consummation of such transactions.
(c) Closing Certificate. Each Purchaser shall have delivered a
certificate, dated the Closing Date, in the form of Exhibit E, certifying to the
fulfillment of the conditions set forth in subparagraphs (a) and (b) of this
Section. Such certificate shall constitute a representation and warranty of such
Purchaser with regard to the matters therein for purposes of this Agreement.
(d) Closing Documents. Sellers shall have received the documents
referred to in Section 6.03(b). All agreements, certificates, opinions and other
documents delivered by Purchasers to Sellers hereunder shall be in form and
substance satisfactory to Sellers.
6.03. Deliveries and Proceedings at Closing.
(a) Deliveries by Sellers. Sellers shall deliver or cause to be
delivered to Purchasers at the Closing:
i) For each Seller, a general warranty xxxx of sale and
instrument of assignment to the Purchased Assets in a form acceptable to
Purchasers, duly executed by such Seller.
ii) Assignments of all transferable or assignable licenses,
Permits and warranties relating to the Purchased Assets and of any trademarks,
trade names, patents and other Intellectual Property, duly executed and in form
acceptable to Purchasers.
iii) Certificates of the appropriate public officials to the
effect that each Seller was a validly existing corporation in good standing in
its state of incorporation as of a date not more than 10 days prior to the
Closing Date.
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iv) Incumbency and specimen signature certificates dated the
Closing Date, signed by the officers of each Seller and certified by their
respective Secretaries.
v) True and correct copies of (A) the Governing Documents (other
than the bylaws) of each Seller as of a date not more than 10 days prior to the
Closing Date, certified by the Secretaries of State of their respective states
of incorporation and (B) the bylaws of each Seller as of the Closing Date,
certified by their respective Secretaries.
vi) Certificates of the respective Secretaries of Sellers (A)
setting forth resolutions of the Board of Directors of each Seller and, if
required by applicable law, the stockholders of each Seller authorizing the
execution and delivery of this Agreement and the performance by such Seller of
the transactions contemplated hereby, and (B) to the effect that the Governing
Documents of Seller delivered pursuant to Section 6.03(a)(v) were in effect at
the date of adoption of such resolutions, the date of execution of this
Agreement and the Closing Date.
vii) The opinion of Xxxx Xxxxxxxx, legal counsel to Seller, in
substantially the form of Exhibit F.
viii) For each Seller, a completed New Theater Transition Form,
in the form attached hereto as Exhibit G.
ix) Such other agreements and documents as Purchasers may
reasonably request.
(b) Deliveries by Purchasers. Purchasers shall deliver or cause
to be delivered to Sellers at the Closing:
i) Delivery by the Escrow Agent of the Escrowed Funds and a wire
transfer of federal funds in accordance with Section 2.05 pursuant to complete
wire transfer instructions delivered by Sellers to Purchasers in writing at
least five days prior to Closing.
ii) Certificates of the appropriate public official to the effect
that each Purchaser was a validly existing corporation in its state of
incorporation as of a date not more than 10 days prior to the Closing Date.
iii) Incumbency and specimen signature certificates dated the
Closing Date signed by the officers of each Purchaser and certified by their
respective Secretaries.
iv) True and correct copies of (A) the Governing Documents (other
than the bylaws) of each Purchaser as of a date not more than 10 days prior to
the Closing Date, certified by the Secretary of State of their respective states
of incorporation and (B) the bylaws of each Purchaser as of the Closing Date,
certified by their respective Secretaries.
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v) Certificate of the respective Secretaries of the Purchasers
(A) setting forth resolutions of the Board of Directors of each Purchaser
authorizing the execution and delivery of this Agreement and the performance by
such Purchaser of the transactions contemplated hereby, certified by the
Secretary of such Purchaser and (B) to the effect that the Governing Documents
of Purchasers delivered pursuant to Section 6.03(b)(v) were in effect at the
date of adoption of such resolutions, the date of execution of this Agreement
and the Closing Date.
vi) The opinion of Xxxxxxxxxxx & Xxxxxxxx LLP, Purchasers' legal
counsel, in substantially the form of Exhibit H.
vii) Such other agreements and documents as Seller may reasonably
request.
6.04. Termination.
(a) Mutual Consent; Failure of Conditions. Except as
provided in Section 6.04(b), this Agreement may be terminated at any time prior
to Closing by: (i) mutual consent of Purchasers and Sellers; (ii) Purchasers, if
any of the conditions specified in Section 6.01 hereof shall not have been
fulfilled by July 31, 1996 and shall not have been waived by Purchasers; or
(iii) Sellers, if any of the conditions specified in Section 6.02 hereof shall
not have been fulfilled by July 31, 1996 and shall not have been waived by
Sellers.
(b) Liquidated Damages. In the event of termination of
this Agreement by Sellers pursuant to clause (iii) of 6.04(a), Sellers shall
receive upon demand, as liquidated damages for and in full settlement of all
claims by Sellers and Seller Indemnitees against Purchasers in connection with
this Agreement, the Escrowed Funds, the nature of this transaction being such as
will not permit any exact determination of the damage that may be suffered by
Sellers under such circumstances. In the event of termination of this Agreement
by Purchasers pursuant to clause (ii) of 6.04(a), Purchasers shall receive upon
demand, as liquidated damages for and in full settlement of all claims of
Purchasers and Purchaser Indemnitees against Sellers in connection with this
Agreement, the amount of $50,000 in immediately available funds, the nature of
this transaction being such as will not permit any exact determination of the
damage that may be suffered by Purchasers under such circumstances.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.01. Survival of Representations. All representations, warranties and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing, but all claims for damages made by virtue of such representations,
warranties and agreements shall be made under, and subject to the limitations
set forth in, this Article VII.
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7.02. Indemnification by Sellers. Sellers, jointly and severally shall
indemnify, defend, save and hold Purchasers and their officers, directors,
employees, agents and Affiliates (collectively, "Purchaser Indemnitees")
harmless from and against all demands, claims, allegations, assertions, actions
or causes of action, assessments, losses, damages, deficiencies, Liabilities,
costs and expenses (including reasonable legal fees, interest, penalties, and
all reasonable amounts paid in investigation, defense or settlement of any of
the foregoing) and whether or not any such demands, claims, allegations, etc.,
of third parties are meritorious (collectively, "Purchaser Damages") asserted
against, imposed upon, resulting to, required to be paid by, or incurred by any
Purchaser Indemnitees, directly or indirectly, in connection with, arising out
of, that could result in, or which would not have occurred but for i) a breach
of any representation or warranty made by any Seller in this Agreement, in any
certificate or document furnished pursuant hereto by Sellers or any Other
Agreement to which any Seller is or is to become a party, ii) a breach or
nonfulfillment of any covenant or agreement made by any Seller in or pursuant to
this Agreement and in any Other Agreement to which any Seller is or is to become
a party, and any iii) Retained Liability.
7.03. Indemnification by Purchasers. Purchasers shall indemnify, defend,
save and hold Sellers and their officers, directors, employees, Affiliates and
agents (collectively, "Seller Indemnitees") harmless from and against any and
all demands, claims, actions or causes of action, assessments, losses, damages,
deficiencies, Liabilities, costs and expenses (including reasonable legal fees,
interest, penalties, and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing) and whether or not any such demands,
claims, allegations, etc., of third parties are meritorious (collectively,
"Seller Damages") asserted against, imposed upon, resulting to, required to be
paid by, or incurred by any Seller Indemnitees, directly or indirectly, in
connection with, arising out of, that could result in, or which would not have
occurred but for i) a breach of any representation or warranty made by any
Purchaser in this Agreement or in any certificate or document furnished pursuant
hereto by any Purchaser or any Other Agreement to which any Purchaser is a
party, ii) a breach or nonfulfillment of any covenant or agreement made by any
Purchaser in or pursuant to this Agreement and in any Other Agreement to which
any Purchaser is a party, and iii) any Assumed Liability.
7.04. Limitations.
(a) Time Period. Sellers shall be obligated to indemnify
Purchaser Indemnitees and Purchasers shall be obligated to indemnify Seller
Indemnitees only for those Purchaser Damages or Seller Damages (as the case may
be) as to which any Purchaser or Seller has given the other written notice
thereof within one year after the Closing Date.
(b) Cap. Notwithstanding anything else herein to the contrary,
Sellers' obligation to indemnify Purchaser Indemnitees for any Purchaser Damages
shall not exceed $100,000 in the aggregate.
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(c) Basket. Except with regard to any Purchaser Damages in
connection with, arising out of, that could result in, or which would not have
occurred but for a breach of the representations and warranties set forth in
Section 3.08 hereof which Purchaser Damages shall not be subject to the
limitation set forth in this Section 7.04(c), Sellers shall not be obligated to
indemnify any Purchaser Indemnitee against any Purchaser Damages until the
aggregate amount of the Purchaser Damages thereunder exceeds $12,500 and then
only to the extent of such excess.
(d) No Shareholder Liability. The shareholders, officers,
directors, and/or employees of any Seller hereunder shall be under no personal
liability with respect to any of the provisions or representations in this
Agreement and if any such officers, directors, and/or employees is in breach or
in default with respect to its obligations or otherwise under this Agreement,
Purchasers shall look solely to (i) assets of the Sellers which said
corporations own at the time said claim is made and (ii) the assets subject to
the Indemnification Escrow Agreement for the satisfaction of such Purchasers'
remedies, and no property or assets of such shareholders, officers, directors,
and/or employees shall be subject to levy, execution, or other enforcement
procedures for such satisfaction. Furthermore, no shareholder, office, director
or employee of any Seller shall have any liability for any breach, action, or
inaction or other misrepresentation of any Seller under this Agreement.
(d) Fraud. The limitations set forth in Section 7.03 shall not
apply to Seller Damages or Purchaser Damages arising out of fraud.
7.05. Notice of Claims. If any Purchaser Indemnitee or Seller Indemnitee
(an "Indemnified Party") believes that it has suffered or incurred or will
suffer or incur any Purchaser Damages or Seller Damages, as the case may be
("Damages") for which it is entitled to indemnification under this Article VII,
such Indemnified Party shall so notify the party or parties from whom
indemnification is being claimed (the "Indemnifying Party") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
Article VII or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
7.06. Third Party Claims. The Indemnified Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnified Party may compromise or settle
the same, provided that the Indemnified Party shall give the Indemnifying Party
advance notice of any proposed compromise or settlement. The Indemnified Party
shall permit the Indemnifying Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnifying Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnifying Party.
If the Indemnified Party permits the Indemnifying Party to
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undertake, conduct and control the conduct and settlement of such action or
suit, the Indemnifying Party shall not thereby permit to exist any Encumbrance
upon any asset of the Indemnified Party; the Indemnifying Party shall not
consent to any settlement that does not include as an unconditional term thereof
the giving of a complete release from liability with respect to such action or
suit to the Indemnified Party; the Indemnifying Party shall permit the
Indemnified Party to participate in such conduct or settlement through counsel
chosen by the Indemnified Party; and the Indemnifying Party shall agree promptly
to reimburse the Indemnified Party for the full amount of any Damages including
fees and expenses of counsel for the Indemnified Party incurred after giving the
foregoing notice to the Indemnifying Party and prior to the assumption of the
conduct and control of such action or suit by the Indemnifying Party.
ARTICLE VIII
MISCELLANEOUS
8.01. Costs and Expenses. Purchasers and Sellers shall each pay its
respective expenses, brokers' fees and commissions, and Sellers shall pay all of
the pre-Closing expenses of Sellers incurred in connection with this Agreement
and the transactions contemplated hereby, including all accounting, legal and
appraisal fees and settlement charges. All transfer taxes incurred as a result
of the transfer of the Purchased Assets shall be paid by Sellers.
8.02. Further Assurances. Sellers shall, at any time and from time to
time on and after the Closing Date, upon request by Purchasers and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Purchased Assets to Purchasers.
8.03. Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given or made i) the second business day after the date of mailing, if
delivered by registered or certified mail, postage prepaid, ii) upon delivery,
if sent by hand delivery, iii) upon delivery, if sent by prepaid courier, with a
record of receipt, or iv) the next day after the date of dispatch, if sent by
cable, telegram, facsimile or telecopy (with a copy simultaneously sent by
registered or certified mail, postage prepaid, return receipt requested), to the
parties at the following addresses:
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(a) if to Purchasers, to:
Clearview Cinema Group, Inc.
0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: A. Xxxx Xxxx, President
with a required copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx LLP
1251 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
(b) if to Seller, to:
Xxxx Xxxxxx
00 Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
with a required copy to:
Xxxx Xxxxxxxx, Esq.
000 Xxxxx 00
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telecopy: (000) 000-0000
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
8.04. Offset; Assignment; Governing Law. Purchasers shall be entitled to
offset or recoup from any amounts due to Sellers from Purchasers hereunder or
under any Other Agreement against any obligation of Sellers to Purchasers
hereunder or under any Other Agreement. This Agreement and all the rights and
powers granted hereby shall bind and inure to the benefit of the parties hereto
and their respective permitted successors and assigns. This Agreement and the
rights, interests and obligations hereunder may not be assigned by any party
hereto without the prior written consent of the other parties hereto, except
that Purchasers may make such assignments to any Affiliate of Purchasers
provided that Purchasers remains liable hereunder. This Agreement shall be
governed by and construed in accordance with the laws of the state of New Jersey
without regard to its conflict of law doctrines.
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8.05. Amendment and Waiver; Cumulative Effect. To be effective, any
amendment or waiver under this Agreement must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Agreement or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. Except as provided in
Section 6.04, the rights and remedies of the parties hereto are cumulative and
not exclusive of the rights and remedies that they otherwise might have now or
hereafter, at law, in equity, by statute or otherwise.
8.06. Entire Agreement; No Third Party Beneficiaries. Except as set
forth in this Section 8.06, this Agreement and the Schedules and Exhibits set
forth all of the promises, covenants, agreements, conditions and undertakings
between the parties hereto with respect to the subject matter hereof, and
supersede all prior or contemporaneous agreements and understandings,
negotiations, inducements or conditions, express or implied, oral or written,
including the Letter of Intent dated May 16, 1996. The Escrow Agreement dated
May 16, 1996 between CCG, the Sellers, the other parties thereto and Xxxx
Xxxxxxxx, Esquire as Escrow Agent shall remain in full force and effect and
shall not be superseded by this Agreement. This Agreement is not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder, except the provisions of Sections 7.02 and 7.03 relating to Purchaser
Indemnitees and Seller Indemnitees.
8.07. Severability. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
8.08. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CLEARVIEW CINEMA GROUP, INC.
By:______________________________
A. Xxxx Xxxx
Title: President
CCC WASHINGTON CINEMA CORP.
By:______________________________
A. Xxxx Xxxx
Title: President
CCC XXXXXXX CINEMA CORP.
By:______________________________
A. Xxxx Xxxx
Title: President
CCC NEW CITY CINEMA CORP.
By:______________________________
A. Xxxx Xxxx
Title: President
TOWNSHIP OF WASHINGTON THEATRE,
INC.
By:______________________________
Xxxx Xxxxxx
Title: President
XXXXXXX XXXXXXX CINEMA INC.
By:______________________________
Xxxx Xxxxxx
Title: President
NEW CITY CINEMA, INC.
By:______________________________
Xxxx Xxxxxx
Title: President
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SCHEDULES
Schedule 2.01(a) - Sales and Purchase of Assets
Schedule 2.04 - Allocation
Schedule 3.01 - Capitalization
Schedule 3.03 - Consents
Schedule 3.05 - Undisclosed Liabilities
Schedule 3.06 - No changes
Schedule 3.07 - Taxes
Schedule 3.10 - Description of Contracts
Schedule 3.11 - Permits
Schedule 3.12 - Description of Property
Schedule 3.13 - Environmental Matters
Schedule 3.16 - Union Agreement
Schedule 3.18 - Intellectual Property Rights
Schedule 3.19 - Benefit Plans; Seller Plans
Schedule 4.03 - Purchaser Consents
[Schedules are not included herewith, but will be provided
by the Company, upon request.]
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EXHIBITS
Exhibit A - Indemnification Escrow Agreement
Exhibit B - Seller Closing Certificate
Exhibit C - Right of First Refusal Agreement
Exhibit D - Non-Competition Agreement
Exhibit E - Purchaser Closing Certificate
Exhibit F - Opinion of Xxxx Xxxxxxxx
Exhibit G - Transition Form
Exhibit H - Opinion of Xxxxxxxxxxx & Xxxxxxxx
[Exhibits are not included herewith, but will be provided
by the Company, upon request.]
