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EXHIBIT 4
A G R E E M E N T
AGREEMENT, dated as of the 8th day of September, 1995, between
MIDCONTINENT THEATRE CO., MIDCONTINENT THEATRE CO. OF MINNESOTA, MIDCONTINENT
THEATRE CO. OF SOUTH DAKOTA AND MIDCONTINENT THEATRE CO. OF NORTH DAKOTA, each
a Minnesota corporation (collectively hereinafter "Seller"),and CARMIKE
CINEMAS, INC., a Delaware corporation, ("Buyer").
W I T N E S S E T H :
WHEREAS, Seller operates certain theatres for the exhibition of motion
pictures; and
WHEREAS, the Boards of Directors of Seller and the Board of Directors
of Buyer deem it appropriate to effect the sale and transfer of certain of
Seller's assets and liabilities pursuant to the agreement set forth
hereinafter.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained, and for other consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties hereto
have agreed, and do hereby agree, as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement shall have the meanings
set forth below:
1.01. "AFFILIATE" - Any person, firm, corporation, partnership or
association controlling, controlled by, or under common control with another
person, firm, corporation, partnership or association.
1.02. "AGREEMENT" - This Agreement, including the Exhibits attached
hereto, and the Schedules delivered pursuant hereto.
1.03. "CLOSING" - The Closing referred to in Section 2.05 hereof.
1.04. "CLOSING DATE" - The date referred to in Section 2.05 hereof.
1.05. "CONTINUING CONTRACTS" - The agreements relating to the
operation and maintenance of the Property (excluding film exhibition
agreements), which are described on Exhibit "A" attached hereto, together with
any contracts in the nature thereof executed by Seller after the date hereof,
as herein permitted and approved in writing by Buyer, except any contract which
is terminable with thirty (30) days notice without penalty.
1.06. "ERISA" - The Employee Retirement Income Security Act of 1974,
as amended.
1.07. "EXCLUDED PROPERTY" - That Property set forth on Schedule 1.07.
1.08. "EXHIBITS" - Those Exhibits referenced in this Agreement and
incorporated herein by such reference.
1.09. "GUARANTEED FILM CONTRACTS" - Those film contracts which
require Seller to pay a guaranteed minimum film rental amount, notwithstanding
that the film may not have earned same.
1.10. "IMPOSITIONS" - All real estate taxes, special and benefit
assessments, sewer rents, water rates, personal property taxes, and all other
taxes, assessments and charges of every kind, which may affect the Property or
any part thereof by virtue of any present or future law of any governmental
authority.
1.11. "INTANGIBLE PROPERTY" - All intangible property now or on the
Closing Date owned by Seller pertaining solely to the Property, including all
assignable business licenses, warranties, the Continuing Contracts (to the
extent assignable), trademarks, trade names, telephone exchange numbers to the
extent assignable,
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plans and specifications, blueprints, engineering information and reports, and
governmental approvals.
1.12. "LANDLORD'S CONSENT" - Consent of the Landlords referred to in
Section 2.07 (d) to the transfer and assignment of the leases described in
Schedule 3.09 (b).
1.13. "LEASEHOLD IMPROVEMENTS" - All right, title and interest of
Seller in the Leasehold Improvements of any kind and description now, or on the
Closing Date, located on or which are a part of the Leased Premises.
1.14. "LEASEHOLD INTERESTS" - All and singular the interests,
estates, rights, privileges, titles, easements, options and appurtenances
belonging or in any way appertaining to the Seller as tenant under the Leases.
1.15. "LEASES" - The leases for the Theatres and all amendments and
modifications thereof, all of which are described on Exhibit "C" attached
hereto.
1.16. "LEASED PREMISES" - The premises demised by the Leases.
1.17. "PERMITTED LIENS" - (i) Liens and taxes due and payable and
which are prorated pursuant to Section 2.04 hereof; (ii) liens that shall be
discharged prior to or at Closing; and (iii) Permitted Title Exceptions.
1.18. "PERMITTED TITLE EXCEPTIONS" - With respect to the real
property those preprinted exceptions in a standard form ALTA extended coverage
policy of title insurance and those encumbrances set forth on Schedule 1.18.
1.19. "PERSONAL PROPERTY" - All tangible personal property now or on
the Closing Date owned by Seller or any of Seller's affiliates and used in the
operation of the Leased Premises, including all supplies, service and
concession equipment, heating, ventilating and cooling equipment, fixtures,
inventory, cleaning equipment and supplies, alarm systems, screens, projection
equipment, theatre seats, cash registers, display cases, acoustical wall
panels, sound systems, speakers, computers, office equipment
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and desks, popcorn poppers and storage bins, linoleum, carpets, drapes, laundry
tubs and trays, washers, dryers, ice boxes, refrigerators, heating units,
stoves, ovens, water heaters, incinerators, furniture and furnishings, and
communication systems, now or on the Closing Date affixed or attached to or
placed upon and used in connection with the operation of the Theatres or any of
them (without limiting the generality of the foregoing, the personal property
listed on Exhibit "B" attached hereto shall be included in Personal Property);
provided, however, Personal Property shall not include (a) accounts receivable
as of the Closing Date, and (b) cash and cash equivalents (including
certificates of deposit, commercial paper, and investments in securities on
hand or in banks as of the Closing Date, (c) proprietary items including, but
not limited to, uniforms, and film transfer stock, (d) the Excluded Property.
1.20. "PROPERTY" - The Leasehold Interests, Leasehold Improvements,
Personal Property and Intangible Property.
1.21. "PURCHASE PRICE" - The Purchase Price for the Property is
SIXTEEN MILLION TWO HUNDRED SEVENTY-FIVE THOUSAND AND 00/100 DOLLARS
($16,275,000.00) payable as set forth in paragraph 2.02 hereof.
1.22. "SCHEDULES" - Those Schedules referred to in this Agreement,
and incorporated herein by reference.
1.23. "SELLER" - Seller is made up of MIDCONTINENT THEATRE CO.,
MIDCONTINENT THEATRE CO. OF MINNESOTA, MIDCONTINENT THEATRE CO. OF SOUTH DAKOTA
and MIDCONTINENT THEATRE CO. OF NORTH DAKOTA.
1.24. "THEATRES" - The twelve (12) locations consisting of fifty-six
(56) screens for the exhibition of motion pictures as specifically set forth on
Exhibit "D".
1.25. "THEATRE LEVEL EMPLOYEE" - Any employee who actually works at a
Theatre location.
The definitions of this section shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The term "person" includes individuals, partnerships,
corporations, trusts and other
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associations. The words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation". The words "herein",
"hereof", "hereunder" and similar terms shall refer to this contract, unless
the context otherwise requires.
Attached to this contract and incorporated herein by reference are the
following:
EXHIBIT A - CONTINUING CONTRACTS
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - LEASES
EXHIBIT D - THEATRES
EXHIBIT E - XXXX OF SALE
EXHIBIT F - COVENANT NOT TO COMPETE AGREEMENT
EXHIBIT G - FORM OF LANDLORD'S CONSENT
AND ESTOPPEL
EXHIBIT H - SELLER'S REQUIRED INSURANCE
EXHIBIT I - AUTHORIZATION AND RELEASE NOTICE
RE TELEPHONE NUMBERS
SCHEDULE 1.07 - EXCLUDED PROPERTY
SCHEDULE 1.18 - PERMITTED TITLE EXCEPTIONS
SCHEDULE 2.02(a) - WIRING INSTRUCTIONS
SCHEDULE 2.03 - PURCHASE PRICE ALLOCATION
SCHEDULE 2.06(a) - CLOSING STATEMENT
SCHEDULE 2.07(c) - CONSENT OF OTHERS
SCHEDULE 3.02(a) - CASH FLOW INFORMATION
SCHEDULE 3.02(c) - 90/10 AMOUNTS
SCHEDULE 3.02(d) - SEATS BY AUDITORIUM
SCHEDULE 3.04 - TAX RETURNS
SCHEDULE 3.06 - GOVERNMENTAL NOTIFICATIONS
AND CONSENTS
SCHEDULE 3.07 - COMPLIANCE WITH OTHER INSTRUMENTS
SCHEDULE 3.09(a) - DESCRIPTION OF REAL PROPERTY OWNED
BY SELLER
SCHEDULE 3.09(b) - DESCRIPTION OF REAL PROPERTY LEASED
TO SELLER
SCHEDULE 3.10 - LICENSES, PERMITS AND TRADEMARKS
SCHEDULE 3.11 - INSURANCE
SCHEDULE 3.12 - DEFAULTS
SCHEDULE 3.13 - LITIGATION
SCHEDULE 3.14 - COMPLIANCE WITH LAWS
SCHEDULE 3.16(a) - LABOR MATTERS
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SCHEDULE 3.16(c) - PAYMENT OF SOCIAL SECURITY TAXES
SCHEDULE 3.17(a) - CONTRACTS AND COMMITMENTS
SCHEDULE 3.19(a) - EMPLOYEE BENEFIT PLANS
SCHEDULE 3.19(b) - WELFARE PLANS
SCHEDULE 3.23 - ENVIRONMENTAL MATTERS
SCHEDULE 3.24 - DISCOUNTS AND GIFT CERTIFICATES
SCHEDULE 7.04 - GOVERNMENTAL NOTIFICATIONS
AND CONSENTS REQUIRED BY BUYER
ARTICLE II
PURCHASE AND SALE OF PROPERTY
2.01. Agreement to Sell. Pursuant to the terms and conditions of
this Agreement, at Closing Seller agrees to sell, convey, transfer, assign and
deliver to Buyer, and Buyer agrees to purchase from Seller all of the Property
owned and used by Seller in the operation of its motion picture exhibition
business in the Theatres.
2.02. (a) Xxxxxxx Money. Simultaneously with the execution of this
Agreement, Purchaser shall pay to Seller the sum of ONE HUNDRED THOUSAND AND
00/100 DOLLARS ($100,000.00), which shall be held by Seller as an xxxxxxx money
deposit (hereinafter referred to as the "Xxxxxxx Money"). The Xxxxxxx Money
tendered pursuant to this Agreement shall be deposited in an interest bearing
account and held and applied in accordance with the terms of this Agreement.
All interest accruing on the Xxxxxxx Money shall be paid to Buyer.
(b) Purchase Price. At Closing, Buyer shall pay and deliver
by wire transfer to Seller, pursuant to wiring instructions set forth on
Schedule 2.02 (b), the Purchase Price, less the Xxxxxxx Money.
(c) Refund of Xxxxxxx Money. In the event this Agreement is
terminated for any reason other than a breach by the Buyer, then all Xxxxxxx
Money and interest earned thereon shall be refunded to Buyer.
2.03. Purchase Price Allocation. The Purchase Price will be
allocated to the Property as shown on Schedule 2.03, and each of
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the parties agree to report this transaction for Federal income tax purposes in
accordance with the allocation shown on said schedule.
2.04. Closing Adjustments.
(a) The following items affecting the Property shall be
apportioned, adjusted or otherwise accounted for between Seller and Buyer as of
the Closing Date:
(i) Subject to paragraph (d) of this Section, rent,
additional rent, common area maintenance and all other charges payable by
Seller as tenant under the Leases as follows: (1) any charge payable on a
monthly basis which is subject to year end adjustment shall be prorated for the
month in which the Closing Date shall occur and any year end adjustment thereof
shall be paid by, or the refund from the lessor paid to, Seller and Buyer in
proportion to their respective payments thereof (i.e., Seller to make all such
payments prior to the Closing Date and Buyer to make all such payments after
the Closing Date), and (2) Impositions under the Leases not payable monthly but
payable in full after the Closing at the end of a lease year or tax fiscal
year, as provided in the respective Leases, shall be prorated as of the Closing
Date but Seller will pay Buyer its share thereof within 15 days after Buyer
furnishes Seller the billing and substantiation thereof received from each
respective lessor;
(ii) Payments owing by Seller under the Leases to
merchants' associations or similar business promotion organizations;
(iii) Buyer shall pay Seller on the Closing Date for any
security deposits (and any interest prescribed by statute) held by lessors
under the Leases, and the Seller's xxxxx cash at each theatre;
(iv) Reduced admission tickets, group tickets or so-called
other "discount tickets" (collectively "Discount Tickets") issued by Seller
prior to the Closing Date and presented by customers for admission to the
Theatres on or after the Closing Date shall be honored by Buyer but may be
redeemed by Buyer from Seller for the amount shown on the Discount Ticket as
the cost paid to Seller for such Ticket. Seller shall also reimburse Buyer in
the amount of any gift certificates issued by Seller prior to the
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Closing Date and used at the Theatres subsequent to the Closing Date, when, as
and in the amount said gift certificates are redeemed, provided, however, Buyer
shall not be obligated to honor any such gift certificate or discount ticket
after two (2) years immediately following the Closing Date. Buyer shall (and
hereby covenants and agrees to) be bound by all free admission passes
distributed prior to the Closing Date by Seller or Seller's authorized agents
to third parties. Any monies which Seller shall owe Buyer for reimbursement
for Discount Tickets that are presented for payment to Seller within a calendar
month in the manner required herein shall be paid to Buyer by the 15th day of
the next following calendar month.
(b) General real property taxes and other Impositions imposed
upon or assessed against the Property (and not otherwise payable by Seller as
tenant under the Leases directly to the lessors thereunder or payable by such
lessors without any obligation of payment on the part of Seller) shall be
remitted to the collecting authorities by Seller if the same are due and
payable on or before the Closing Date, and by Buyer if due and payable
thereafter; provided, however, that (i) with respect to the properties owned by
Seller, such real property taxes and other Impositions which are due and
payable in the calendar year in which the Closing Date occurs shall be
apportioned and prorated between Seller and Buyer on and as of the Closing Date
with Buyer bearing only that proportion of such real property taxes and other
Impositions which bears the same ratio to the entire amount of such real
property taxes and other Imprositions as the number of days in the calendar
year following and including the Closing Date bears to 365, and (ii) with
respect to the Theatres leased by Seller, payments which are required to be
made for real property taxes and other Impositions under the various leases of
the Theatres for the lease year in which the Closing Date occurs shall be
apportioned and prorated between Seller and Buyer on and as of the Closing
Date, with Buyer bearing only that portion of such payments which bears the
same ratio to the entire amount of such payment as the number of days in the
lease year following and including the Closing Date bears to 365. If the
amount of any such taxes, assessments and other Impositions to be borne by the
parties hereto, as above provided, is not ascertainable on the Closing Date,
Seller shall pay to Buyer its share of the amount of such taxes, assessments or
other Impositions within 15 days after receipt by Seller of the appropriate
tax xxxx(s) evidencing the amount thereof.
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(c) Seller shall pay all utility costs in respect of the Leased
Premises (except to the extent the lessors are liable therefor under the Leases
or such costs are a part of a lease charge to be prorated pursuant to clause
(i) of paragraph (a) of this Section) incurred prior to the Closing Date, and
those incurred thereafter shall be paid by Buyer. If the utility charges for
the last utility period cannot be ascertained on the Closing Date, then at such
subsequent date as all utility bills for such utility period have been
obtained, the parties shall promptly pay their respective prorated amounts. Any
deposits of Seller held by utility companies shall be returned to Seller, and
Buyer shall be responsible for making its own deposits with the utility
companies.
(d) With respect to any percentage rent (as defined in the
respective leases) payable under the Leases for the applicable lease years
thereunder during which the lease assignments occur, the percentage rent
(taking into account any applicable credits or adjustments) shall be prorated
between the Buyer and Seller such that each party shall pay when due that
percent of the total percentage rent payable which equals such party's
respective gross receipts (as defined in the respective leases) divided by the
total gross receipts for such lease year.
(e) Seller and Buyer shall also make such other adjustments or
apportionments with respect to the Property as may be necessary to carry out
the intention of the parties hereto so that Buyer shall not be liable for
matters accruing or occurring prior to the Closing Date and that Seller shall
not be liable for matters accruing or occurring from and after the Closing Date
and that Seller shall bear all of the expenses and burdens, and shall be
entitled to all of the benefits and income, of and from ownership of the
Property prior to the Closing Date and Buyer shall bear all such expenses and
burdens and shall be entitled to all such benefits and income from and after
the Closing Date.
(f) The foregoing adjustments shall be determined and payment
made from one party to the other (as the case may be) on the Closing Date to
the extent they are known and agreed to by both parties; otherwise, such
adjustments shall be determined as soon as possible after the Closing Date and
the adjustments, if any, shall be determined and payment made by the party
owing the adjustment to the other within 30 days after the adjustment is
determined.
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2.05. Closing Date and Place. The Closing of the transactions
contemplated by this Agreement shall take place at the offices of Xxxxxxx,
Street and Deinard, Suite 2300, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000,
on October 6, 1995, or on such other date as may be agreed by the parties
hereto (the Closing Date). The Closing shall be effective, and all revenues,
expenses, and prorations shall be accounted for as of 12:01 p.m. on the Closing
Date.
2.06. Buyer's Performance at Closing. At Closing, Buyer shall:
(a) Pay and deliver by wire transfer the Purchase Price as shown
on the Closing Statement attached hereto as Schedule 2.06 (a).
(b) Deliver to Seller a Certificate of the Secretary of Buyer
stating that this Agreement and other instruments and documents executed in
connection herewith have been duly authorized by the Board of Directors of
Buyer and setting forth the names, titles, signatures and attesting to the
incumbency of those persons authorized to execute this Agreement and the
instruments and documents executed in connection herewith. Copies of all
resolutions pertaining to such authorization shall be attached to the
certificate.
2.07. Seller's Performance at Closing. At Closing, Seller will
deliver to Buyer:
(a) All deeds, bills of sale, substantially in form attached
hereto as Exhibit "E", assignments of licenses and permits (to the extent
assignable), executory contracts, leases, easements and rights of way
accompanied by certain covenants and endorsements as are necessary in order to
effectively vest in Buyer good, indefeasible and marketable title to the
Property free and clear of all encroachments, leases, tenancies, liens,
encumbrances, mortgages, conditional sales and other title retention
agreements, pledges, covenants, restrictions, reservations, easements and
options except for the Permitted Liens;
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(b) Actual possession and operating control of the Property;
(c) A certificate of each entity constituting the Seller,
executed by an officer, certifying that the persons executing this Agreement
and other documents consummating transactions contemplated by this Agreement
have been duly and validly authorized by its Board of Directors so to do, and
that except as set forth on Schedule 2.07 (c), no consent or approval of any
other person is necessary. Such certificate shall set forth the names, titles,
and signatures and attest to the incumbency of those persons authorized to
execute this Agreement and all Agreements, instruments and documents in
connection herewith. Copies of all resolutions pertaining to such
authorization shall be attached to the certificate;
(d) Any and all consents of third parties necessary for the
transfer and assignment of the Property, including, but not limited to, any
required Landlords' Consents to the assignment of all Leases for the Theatres
with no changes in the terms and conditions thereof.
(e) The Authorization and Release Notice in form attached hereto
as Exhibit I transferring all of Seller's right, title and interest in and to
the telephone numbers shown thereon.
(f) Executed Covenant Not to Compete Agreements with X. X.
Xxxxxxx and Xxx X. Xxxxx, in substantially the form attached as Exhihit "F"
hereto. As consideration for said Covenant Not to Compete, Buyer shall pay the
sum of $187,500.00 to said X. X. Xxxxxxx and $187,500.00 to said Xxx X. Xxxxx
at Closing.
2.08. Seller's Performance At and After Closing. Seller hereby
covenants and agrees that at or after the Closing, as required, Seller shall:
(a) At the request of Buyer, take all action reasonably
necessary to put Buyer in actual possession of the Property, and execute and
deliver such further instruments of conveyance, sale, transfer and assignment,
and take such other action as may be reasonably necessary to transfer to Buyer
any of the Property and confirm the title of Buyer to the Property.
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Further, after Closing, should Seller be a necessary party in order for Buyer
to exercise its rights with respect to the Property, Seller will take
reasonable efforts, at Buyer's expense, to assist Buyer therein;
(b) Pay any governmental taxes or other governmental charges
which may arise out of the transfer of the Property, including without
limitation any transfer, documentary stamp tax, surtax, gross receipts, excise
and title tax. Buyer shall be responsible for any sales and use tax imposed on
the transfer of the Property, or on this transaction. The parties agree to
cooperate in taking such steps as may be necessary or appropriate in order to
take advantage of any exemptions from any such governmental taxes, or other
charges which may be available with respect to the transfer of the Property;
(c) For a period of two (2) years following the Closing Date,
provide Buyer access to any operating records, accounting records,
correspondence, memoranda, and other records and data relating to the ownership
or operation of the Property, which are in Seller's possession, and cooperate
with Buyer in the preparation, at Buyer's expense, of any financial statements
and/or completion of any audit of financial statements that may be required to
meet SEC Regulations;
(d) At the request of Buyer, prosecute or otherwise enforce in
Seller's name for the benefit of Buyer, any claims, rights or benefits that are
being transferred to Buyer under this Agreement, and that require prosecution
or enforcement in Seller's name. Any such prosecution or enforcement shall be
at Buyer's expense, unless such prosecution or enforcement is made necessary by
a material breach of this Agreement by the Seller, in which case such
prosecution or enforcement shall be at Seller's expense;
(e) Subject to the limitations set forth in Article X hereof,
hold Buyer harmless from all charges or liabilities incurred by the Seller
prior to the Closing Date relating to the Property; and
(f) Transfer or deliver to Buyer any and all cash remittances
or property Seller may receive in respect of the Property relating to the
periods after the Closing Date.
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2.09. Buyer Does Not Assume Any of Seller's Liabilities or
Obligations. Seller, at Closing, will transfer all of the Property to Buyer
free and clear of any and all encroachments, leases, tenancies, liens,
encumbrances, mortgages, conditional sales and other title retention
agreements, pledges, covenants, restrictions, reservations, easements, options,
charges, security interests, assignments, actions or demands or encumbrances
whatsoever, except for:
(a) Obligations arising after the Closing Date with respect to
Continuing Contracts and Leases included in the Property as described on
Schedule 3.09 (a),
(b) Permitted Liens, and
(c) The post-closing prorated items included in Section 2.04.
Except as expressly set forth herein, or in any law applicable
hereto, Buyer is not assuming any obligations or liabilities of Seller or of
Seller's business or any liabilities attendant to any of the Property, whether
known or unknown, liquidated or contingent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement for Buyer's performance hereunder, Seller
hereby makes the following representations and warranties, each of which (as
qualified by all Exhibits and Schedules to this Agreement) is true and correct
on the date of this Agreement, shall be true and correct on the Closing Date,
except as otherwise disclosed by Seller to Buyer in a Schedule or Exhibit
attached hereto, and shall survive the Closing and the transactions,
contemplated by this Agreement for a period of twelve (12) months from the
Closing Date, and shall be deemed to be independently relied upon by Buyer.
3.01. Legal Status. Each entity constituting Seller is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Minnesota, with all requisite
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corporate power and authority to own its properties, to carry on its business,
as now being owned and operated by it, to enter into this Agreement, and to
perform its obligations hereunder.
3.02. Cash Flow Data.
(a) Schedule 3.02 (a) contains certain financial information of
the Theatres for fiscal years ended August 31, 1994 and August 31, 1993, and
the nine-month periods ended May 31, 1995, and May 31, 1994, and the ten-month
periods ended June 30, 1995 and June 30, 1994.
(b) The financial information is in accordance, in all material
respects, with the books and records of the Seller, and except as stated
therein presents fairly the results of operations of the Theatres for the
respective periods indicated.
(c) Schedule 3.02 (c) contains the 90/10 amounts for each
screen included in the Theatres.
(d) Schedule 3.02 (d) lists by auditorium for each of the
Theatres the number of seats in each auditorium.
3.03. Absence of Specified Changes. Except as otherwise provided
below, since June 30, 1995, there has not been any:
(a) Transaction by Seller with respect to the Property except in
the ordinary course of business as conducted on that date, except as set forth
on Schedule 3.03 (a).
(b) Debt, obligation or liability (whether absolute or
contingent) incurred by Seller which will not be discharged at or before
Closing (whether or not presently outstanding), which creates a lien upon or
otherwise encumbers the Property;
(c) Mortgage, pledge or other encumbrance of any of the
Property, except for Permitted Liens;
(d) Sale, lease, abandonment or other disposition of any of the
Property, excluding inventory, by Seller since the date of the jointly prepared
inventory;
(e) Labor dispute, strike, work stoppage, or any other
occurrence, event or condition of a similar nature which impacts the Property
which materially impacts Buyer's ability to operate the Property;
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(f) Amendment or termination of any contract, Lease, agreement
or license included in the Property to be assigned to Buyer in which Seller is
a party;
(g) Agreement, other than this Agreement, by Seller to do any of
the acts described in this Section 3.03;
(h) Except as set forth on Schedule 3.24, arrangement for
discount, promotional or prepaid tickets, or admission passes or other similar
arrangement not in the ordinary course of business of Seller, or for which
Seller shall reimburse Buyer.
3.04. Tax Returns. Except with respect to real and personal property
taxes payable after the date hereof, and except as set out on Schedule 3.04,
all material known taxes, including without limitation, income, property, ad
valorem, sales, use, franchise, gross receipts, added value, employees income
withholding and social security taxes imposed by the United States, by any
state, municipality, other local government or other subdivision or
instrumentality of the United States, or by any other taxing authority, that
are due or payable by the Seller prior to the Closing, and all interest and
penalties thereon, which would result in the imposition of a lien, claim or
encumbrance on the Property or against the Buyer have been paid in full, except
for such taxes as are being contested in good faith; all tax returns required
to be filed in connection therewith have been accurately prepared and duly and
timely filed, and all deposits required by law to be made by Seller with
respect to employees withholding taxes have been duly made. Seller is not
delinquent in the payment of any tax, assessment, or governmental charge or
deposits which would result in the imposition of a lien, claim or encumbrance
on the Property or against the Buyer, and has no tax, deficiency or claim
outstanding, proposed or assessed against it, and there is no basis for any
such deficiency or claim, which would result in the imposition or any lien,
claim or encumbrance on the Property or against the Buyer.
3.05. Authorization. The execution and delivery of this Agreement by
each entity constituting Seller, and the consummation by each such entity of
the transactions contemplated by this Agreement have been or will be duly and
validly authorized, and no further corporate authorization is necessary on the
part of such entity.
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3.06. Governmental Notifications and Consents. Other than the
waiting period applicable to the transaction contemplated hereby under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, and except as set forth
on Schedule 3.06, no material notification, consent, authorization, order of
approval of, or filing or registration with any governmental commission, board
or other regulatory body, is required for or in connection with the execution
and delivery of this Agreement by each entity constituting Seller, and the
consummation by Seller of the transactions contemplated hereby.
3.07. Compliance with Other Instruments. Except as specifically
disclosed in Schedule 3.07 to this Agreement, and except such instruments as
will be discharged or in respect of which consents or waivers will be obtained
at or before Closing, the execution and delivery of this Agreement, and the
consummation of the transactions by the Seller contemplated by this Agreement
will not result in or constitute any of the following: (i) an event that would
permit any party to terminate any agreement, or to accelerate the maturity of
any indebtedness, or other obligation by which any of the Property may be bound
or affected, or (ii) a breach, violation, or default, or an event that with
notice or lapse of time, or both, would constitute a breach, violation or
default under the Articles of Incorporation or By-Laws of Seller, or any lease,
assignable license, continuing contract, or (iii) a violation of any order,
writ, injunction or decree of any court, administrative agency or governmental
body, or (iv) an event which would result in the creation or imposition of any
lien, charge or encumbrance on any of the Property.
3.08. Personal Property.
The Seller has good and marketable title to all Personal
Property included in the Property, free and clear of all liens, claims,
charges, security interests, and other encumbrances of any kind or nature,
except for the Permitted Liens. All of the Seller's machinery, furniture and
equipment included in the Property is located on the premises of the Theatres,
and is set forth on Exhibit "B".
3.09. Real Property.
(a) Schedule 3.09 (a) contains a true and correct description
of all real property owned by Seller, included in the Property. Seller has
good, indefeasible and marketable title to
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said real property, free and clear of all mortgages, liens, charges and
encumbrances, except for the Permitted Title Exceptions and Permitted Liens.
(b) The documents described in Schedule 3.09 (b) contain a
true and correct description of all real property leased to the Seller included
in the Property, including, to best of Seller's knowledge, the correct name,
street address and telephone number of the Landlord. Each of the leases
included in the Property disclosed in said Schedule is in full force and
effect, and, except as set forth on said Schedule, Seller has received no
written notice of any existing defaults or events of default, real or claimed,
or events which with notice or lapse of time, or both, would constitute
defaults, the consequences of which, severally or in the aggregate, would have
a material adverse affect on the business or operations of the Seller relating
to or being carried on at the real property in question. Except for the
requirement that the Seller obtain those valid and binding consents pursuant
to Sections 2.07 (d) and 4.09, the continuation, validity and effectiveness
of those leases will in no way be affected by the transactions contemplated by
this Agreement.
(c) Seller has received no written notice that the
improvements on the real estate, leased to or used by the Seller do not conform
in all material respects to all applicable federal, state and local laws,
zoning and building ordinances, and health and safety ordinances, and the use
of the property for the various purposes for which the real estate and
improvements thereon are presently being used is permitted under the existing
zoning laws
3.10. Licenses, Permits and Trademarks. Schedule 3.10 lists all
trade names used by the Seller exclusively in the operation of the Property.
The Seller has all governmental permits, licenses, and similar authorities
presently issued or granted to or used by the Seller and which are material to
the conduct of its business in the Theatres. The Seller has not received
written notice that its use of any such trade names violates or infringes upon
any rights claimed therein by third parties.
3.11. Insurance. Schedule 3.11 contains a list and brief description
of the policies of fire, liability, and other forms of insurance (except title
insurance) owned or held by the Seller, regarding the Property. The properties
and business of the Seller, consisting of the Theatres, of an insurable nature
are insured to
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the extent and against such risks consistent with Seller's risk management
program, and as required by the terms of the Leases of the Theatres to which
the Seller is a party. All policies listed on Schedule 3.11 will be
outstanding and duly in force on the Closing Date. The Seller is not now, and
on the Closing Date will not be in default regarding the provisions of any such
policies, and has not and shall not have failed to give any notice or present
any claim thereunder in due and timely fashion.
3.12. Defaults. Except as set forth on Schedule 3.12, there is no
default or claim or purported or alleged default, or state of facts (including
any facts which will exist as a result of the consummation of and performance
under this Agreement), which, with notice or lapse of time, or both, would
constitute a default in any obligation on the part of the Seller to be
performed under any Continuing Contract or agreement which affects the
operation of the Property, and those contracts or agreements set out on
Schedule 3.17. The Seller has in all respects performed, and on the Closing
Date shall have performed, all obligations required to be performed by it under
any such material contract or agreement, and Seller has not waived any right
under any such material contract or agreement.
3.13. Litigation. Except as set forth on Schedule 3.13, Seller has
received no written notice of any actions, suits, investigations or proceedings
(whether or not purportedly on behalf of the Seller) to which the Seller is a
party, and to which any of the Property is or may be subject, pending or to the
best of Seller's knowledge threatened against or affecting the Seller, or any
of the Property, at law, in equity or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign.
3.14. Compliance with Laws. Except to the extent disclosed in
Schedule 3.14, (i) the Seller has not been notified in writing that it has
failed to comply in any respect with, or is in default in any respect under any
laws, ordinances, requirements, regulations or orders applicable to its
operation of the Theatres; (ii) the Seller is not subject to any judgment,
order, writ, injunction or decree that adversely affects, or might in the
future reasonably be expected to adversely affect its operation of the
Theatres; (iii) the Seller is not now, and on the Closing Date will not be in
default concerning any order, writ, injunction or decree of any federal, state,
municipal court or any other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign with respect to the
Theatres, and there is no
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investigation pending or, to the best of Seller's knowledge, threatened against
or affecting the Seller by any state or federal governmental agency, and Seller
has not received written notice of any investigation pending or threatened
against or affecting the Seller by any state or federal governmental agency,
department or instrumentality that would adversely affect Buyer's operation of
the Theatres after the Closing Date.
3.15. Brokers and Finders. Neither Seller nor any of its officers,
directors or employees have employed any broker, agent or finder, or incurred
any liability for any brokerage fees, agent's commissions or finder's fees
concerning the transactions contemplated hereby.
3.16. Labor Matters.
(a) The Seller is not a party to and has no obligations under
any agreement, collective bargaining or otherwise, with any party regarding the
rates of pay or working conditions of any of the Theatre Level Employees of the
Seller, nor is obligated under any agreement to recognize or bargain with any
labor organization or union on behalf of any of said employees regarding the
operation of the Theatres, other than as shown on Schedule 3.16 (a);
(b) Regarding Seller's operation of the Theatres, to the best of
Seller's knowledge, there is no organization activity among any of the Seller's
employees, and neither the Seller nor any of its officers, directors, employees
or agents has currently been charged or notified of or to the best of Seller's
knowledge threatened with the charge of any unfair labor practice;
(c) Regarding the Seller's operation of the Theatres, the Seller
has not been notified that it has failed to comply with any applicable federal
and state laws and regulations concerning the employer/employee relationship,
and with any of its agreements relating to the employment of its Theatre Level
Employees including, without limitation, regulations or agreement provisions
relating to wages, bonuses, employment practices, hours of work, and the
payment of Social Security taxes, other than as shown on Schedule 3.16 (c).
Regarding the Seller's operation of the Theatres, to the best of Seller's
knowledge, the Seller is not liable, except in the ordinary course of business,
for any unpaid wages, bonuses or commissions or any tax, penalty, assessment or
forfeiture for failure to comply with any of the foregoing; and
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(d) The Buyer shall not be liable to Seller or Seller's
employees for any contractually or legally required severance payments or
accrued and unpaid employee benefits, to which Seller's employees are entitled
based on services rendered to Seller prior to the Closing, including, but not
limited to, pension and profit sharing plans, vacation pay, sick pay, longevity
bonuses, commissions or merit bonuses, and Seller shall indemnify and hold
Buyer harmless from any and all damages, costs and expenses (including
attorneys fees) associated with such payments or benefits which accrue prior to
Closing.
3.17. Contracts and Commitments.
(a) Schedule 3.17 (a) contains a list of any of the following
contracts or commitments regarding the Seller's operation of the Theatres to
which the Seller is a party or by which the Seller benefits, which are not
terminable by the Seller at will, without penalty, and which are not listed or
described in any other Schedule, and for which Buyer will have any liability
whatsoever: (i) Oral or written contracts or commitments for the employment of
any Theatre Level Employee, including any severance or other termination
provisions with respect to such employment; (ii) oral or written contracts with
or commitments to any labor union or any other agreements, amendments,
supplements, letters or memoranda of understanding with any labor union or
other representative of Theatre Level Employees; (iii) oral or written
contracts for the purchase, sale, production or supply, whether on a continuing
basis or otherwise, of goods or services of any type; (iv) oral or written
distributor, sales agency or vendor contracts or subcontracts or any franchise
or license agreement; (v) oral or written advertising contracts or
commitments; (vi) employee benefit plans, and to the extent not included, any
other bonus, vacation, pension, profit sharing, retirement, disability, stock
purchase, stock option, health, hospitalization, insurance or similar plan or
practice, formal or informal, in effect concerning Theatre Level Employees, for
which Buyer will have any liability whatsoever; (vii) any continuing contract
or commitment for the purchase, use, or leasing of materials, supplies,
inventory, motion pictures, equipment or services not terminable without
penalty on less than thirty (30) days notice by the Seller; (viii) any
contracts, leases, agreements, commitments, quotas, restrictions or trade
conditions upon which the Property depend or are materially affected; (ix) oral
or written agreements for the employment of any
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agents, finders, brokers, booking agents, advertising agents or independent
contractors involving payment by the Seller of salary, commissions or other
amounts under or in respect of such agreement; (x) oral or written contracts or
commitments for the acquisition (by lease, purchase or otherwise) of theatres,
theatre sites, or other interest in real estate, construction of any buildings
or fixtures, the expansion or remodeling of any of the Seller's existing
theatres, and the operation and management of theatres for, on behalf of, or in
partnership with other persons or entities; and (xi) any other material
contracts or commitments not otherwise specified above.
(b) Each of the contracts listed in Schedule 3.17 or described
in this Section, but which is included in any other Schedule, is in full force
and effect, and there are no existing defaults or events of default, real or
claimed, or events which with notice or lapse of time, or both, would
constitute defaults, the consequences of which, severally or in the aggregate,
would have a material adverse effect on the Seller's operation of the Theatres.
Except as reflected in such Schedules, the continuation, validity and
effectiveness of such contracts, and all other material terms thereof, will in
no way be affected by the transactions contemplated by this Agreement.
(c) Except as set forth on Schedule 3.17(c), the Theatres are
not subject to any screen advertising or credit card acceptance agreements.
(d) Seller has no Guaranteed Film Contracts with respect to the
Theatres.
3.18. Condition of Property. All items of inventory, machinery and
equipment, furniture and fixtures, and leasehold improvements owned by Seller
and included in the Property are in good operating condition, and in a state of
good maintenance and repair, and all such inventory, machinery and equipment,
furniture and fixtures, and leasehold improvements are adequate and usable for
the operation of the Theatres.
3.19. Employee Benefit Plans.
(a) Except as set forth on Schedule 3.19 (a), there are no
Theatre Level Employee benefit plans, (as defined in Section 3 (3) of ERISA,
including employee pension benefit plans, as defined in Section 3 (2) of ERISA,
maintained by the Seller, or
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under which the Seller has any present or future obligation or liability, or
under which any employee of the Seller has any present or future rights to
benefits) for which Buyer will have any liability whatsoever.
(b) There are no welfare plans, other than as set forth on
Schedule 3.19 (b), as defined in Section 3 (1) of ERISA covering Theatre Level
Employees of the Seller for which Buyer will have any liability whatsoever.
3.20. Authority. This Agreement constitutes the valid and binding
obligation of the Seller, enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, or other laws affecting creditor
rights generally, or as may be modified by a court of equity, in an action for
specific performance. Neither the execution and delivery of this Agreement by
the Seller, nor the consummation of the transactions contemplated hereby will
violate any provisions of the Articles of Incorporation or Bylaws of Seller, or
any law or any order of any court, or any governmental unit to which Seller is
subject, nor will such execution, delivery or consummation conflict with, or
result in a breach of, or constitute a default under any indenture, mortgage,
lease, agreement or other instrument to which Seller is a party, or by which
any of them is bound, or result in the creation of any lien, charge or
encumbrance upon Seller's assets or properties, or result in acceleration of
the maturity of any payment date of any of Seller's obligations, or increase or
materially and adversely affect the obligations of Seller thereunder to which
the Property is subject.
3.21. Accuracy of Information. No representation or warranty of, or
any information provided to Buyer by Seller in this Agreement, or in any
statement, certificate or schedule furnished by the Seller pursuant hereto, or
in connection with the transactions contemplated hereby, contains, or on the
Closing Date will contain, any untrue statement of a material fact, and all
such statements, information, representations, warranties, certificates and
schedules shall be true and complete on and as of the Closing Date as though
made on that date, except to the extent otherwise disclosed by Seller to Buyer
on a Schedule or Exhibit attached hereto. To the extent same are in Seller's
possession, true copies of all Leases, Continuing Contracts, labor agreements,
and other instruments (necessary to the Buyer in operation of the Property)
listed on or referred to, or otherwise related to any item referred to in the
Schedules, delivered or furnished to the Buyer pursuant
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to this Agreement have been delivered or have been made available, or will
upon request be made available for inspection by the Buyer. Buyer shall be
entitled to rely upon the accuracy of all such written information in the
preparation of its filings with the Securities and Exchange Commission. The
Seller shall immediately notify Buyer of any inaccuracies or omissions in any
of such information previously supplied to Buyer.
3.22. Claims. Except for claims arising under or in connection with
this Agreement, Seller does not nor on the Closing Date will have, any claims
of any nature, whether asserted or unasserted, against Buyer.
3.23. Environmental Matters. To the best of the actual knowledge of
Seller's Executive Vice President, except items normally found in motion
picture theatres generally, such as cleaning supplies, no Hazardous Waste,
Hazardous Substances and Hazardous Materials, as said terms are described under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA") (hereinafter "Waste Material"), and all other applicable
environmental laws, exist, were stored or disposed of on the Property to be
conveyed or assigned hereunder during the period Seller was in possession of
said Property to be conveyed or assigned hereunder, other than material which
may have been temporarily stored thereon and removed prior to Closing, except
as specifically disclosed in Schedule 3.23 to this Agreement. To the best of
the actual knowledge of Seller's Executive Vice President, Seller has no
knowledge or reason to believe that Waste Material from any source was stored
or disposed of on the Property to be conveyed or assigned at any time other
than material which may have been temporarily stored thereon and removed prior
to Closing. To the best of the actual knowledge of Seller's Senior Vice
President-Development, Seller has at no time generated, stored or disposed of
Waste Material, including, but not limited to, asbestos, PCBs, and urea
formaldehyde foam insulation, as defined in CERCLA, the Hazardous Material
Transportation Act, 49 USC 1801, et. seq., as amended; the Clean Air Act, 42
USC 7401, et. seq., as amended; the Clean Water Act, 33 USC 1251, et. seq., as
amended; the Toxic Substances Control Act, 15 USC 2601, et. seq., as amended;
the Resource, Conservation and Recovery Act, 42 USC 6901, et. seq., as
amended; and the Rivers and Harbor Act, 33 USC 401, et. seq., as amended; or
any other federal and/or state environmental statute, except to the extent such
Waste Material, and their place of generation, interim or final storage, and
site of disposal are identified on Schedule 3.23 to this Agreement. To the
best of the
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actual knowledge of Seller's Senior Vice President-Development, no aboveground
or underground storage tanks are located on any of the Property to be conveyed
or assigned hereunder, except as set forth on Schedule 3.23 to this Agreement.
3.24. Discounts and Gift Certificates. Except as set forth on
Schedule 3.24, there are not outstanding any discount or promotional tickets,
gift certificates, prepaid tickets or admission passes or any other
arrangements allowing the holder thereof to reduced or free admission to any
of the Theatres.
ARTICLE IV
OBLIGATIONS AND COVENANTS OF SELLER
The Seller covenants and agrees with the Buyer that the fulfillment of
each of the following covenants and agreements constitutes a condition
precedent to the obligations of the Buyer to close hereunder:
4.01. Conduct of the Operation of the Theatres Prior to the Closing
Date. Except to the extent that the Buyer shall otherwise consent in writing,
from the date hereof to the Closing Date, the Seller shall:
(a) Operate the Theatres in the ordinary course, and diligently
endeavor to preserve intact its good will and reputation as regards the
Theatres, and to preserve its relationships with persons having business
dealings with it, with respect to the Theatres, consistent with normal business
practices;
(b) Maintain all of the Theatres in normal operating order and
condition, reasonable wear and use excepted;
(c) Comply with all laws materially applicable to the operation
of the Theatres, the failure to comply with which will result in a material
injury to said operation.
4.02. Access and Information. From the date hereof to the Closing
Date, and for two (2) years thereafter, Seller, at Buyer's expense, shall
afford to the Buyer, its counsel, accountants and other representatives, upon
reasonable notice, free and full access to all the offices, properties, books,
contracts, commitments and
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records of the Seller, as pertains to the Theatres, and furnish such persons
with all information, (including financial and operating data) concerning the
affairs as they reasonably may request, including copies and extracts of
pertinent records, documents and contracts, as pertains to the Theatres. The
Seller shall cooperate with the Buyer, its counsel, accountants and
representatives in their examination of such Seller's books and records.
4.03. Notification of Changes. Between the date hereof and the
Closing Date, Seller shall promptly notify Buyer in writing of any adverse
change in the method of conducting the Seller's operations, any material damage
to or loss of any property, or amount of property used in the operation of the
Theatres, or the institution of, or the threat of institution of legal
proceedings against the Seller regarding of affecting the operation of the
Theatres, or the status or conduct of legal proceedings, including
investigations by any governmental agency against the Seller which may affect
the operation of the Theatres.
4.04. Certain Acts Prohibited. Between the date hereof and the
Closing Date, Seller, without the prior written consent of Buyer, shall not:
(a) Encumber or permit the encumbrance of the Property,
except for Permitted Liens;
(b) Dispose of or contract to dispose of any of the Property;
except for replacements or substitutes in the ordinary course of business (but
will not sell any of the Theatres).
(c) Enter into any agreement regarding the Theatres that is
not cancelable by the Seller without penalty upon notice of thirty (30) days or
less;
(d) Regarding the Theatres, enter into any lease or contract
for the purchase, lease or acquisition of real estate, or any lease or except
in the ordinary course of business contract for the purchase, lease or
acquisition of personal property.
4.05. Insurance. From and after the date hereof and through the
Closing Date, the Seller will maintain all of its insurance policies regarding
the Property in effect as of the date
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hereof; and all property shall be used, operated, maintained and repaired in a
normal business manner, and in accordance with provisions of such insurance
policies relating thereto.
4.06. No Default. The Seller will not at any time after the date
hereof and through the Closing Date do any act or omit to do any act, or
knowingly permit any act or omission to act, that would cause a breach of any
Continuing Contract, lease, employment contract or collective bargaining
agreement regarding the Theatres.
4.07. Compliance with Laws. At all times after the date hereof and
through the Closing Date, the Seller will comply with all applicable laws,
which may be required for the consummation of the transactions contemplated
hereby.
4.08. Consent of Others. To the extent that the consummation of the
transactions provided for herein requires the consent of a third party, whether
to avoid the occurrence of an event of default under any contract, license,
lease or agreement by which the Property are bound or otherwise, the Seller
shall use reasonable efforts to obtain any such consent prior to the Closing
Date. Specifically, Seller shall use reasonable efforts to obtain any and all
consents required and necessary in order to validly and effectually transfer
and assign each of the leases of real property set forth on Schedule 3.09,
without change in the terms and conditions thereof, on which the Theatres are
operated by Seller, and are to be transferred to Buyer.
4.09. No Shopping. From and after the date hereof and until the
Closing, the Seller will not, directly or indirectly, through any officer,
director, agent, broker or otherwise (i) solicit, initiate or encourage
submission of proposals or offers from any third party relating to any
acquisition or purchase of the Property, or (ii) participate in any discussions
or negotiations regarding, or furnish to any person any information with
respect to any of the foregoing, or (iii) otherwise cooperate in any way with,
or assist, or participate in, facilitate or encourage, any effort or attempt by
any other person to do or seek any of the foregoing. The Seller acknowledges
that Buyer is relying on this covenant as a basis for incurring expenses and
executive time and effort in proceeding in good faith towards the consummation
of the purchase hereunder; accordingly, Buyer shall be entitled, in addition to
such legal relief as it may have available to it, to equitable relief
(including without limitation injunctive and specific performance relief) in
the event of a violation of this covenant,
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it being acknowledged that the Property represents a unique investment
opportunity.
4.10. Covenants Not to Compete. Seller, X. X. Xxxxxxx and Xxx X.
Xxxxx shall enter into agreements with Buyer to be in substantially the form
attached as Exhibit "F" hereto.
4.11. Termination of Employees. Except for Seller's obligations
under the contract between Midcontinent Theatre Company of Minnesota and Moving
Picture Machine Operators Local No. 219 of the International Alliance of
Theatrical Stage Employees and Moving Picture Machine Operators of the United
States and Canada, AFLCIO (the "Union Contract"), which are to be assigned by
Buyer, on or before the Closing Date, Seller shall terminate or reassign all of
its Theatre Level Employees. Immediately upon execution of this Agreement,
Buyer and Seller shall jointly execute a notice in accordance with the terms of
Section 8 of the Union Contract, pursuant to which Seller and Buyer provide
notice to the Union that the contract is terminated effective as of January 5,
1996.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of the Buyer to consummate the transactions provided
for herein are, at the option of the Buyer, subject to the satisfaction in all
material respects of the following conditions precedent on or prior to the
Closing Date.
5.01. Compliance by Seller. All the terms, covenants and conditions
of this Agreement to be complied with and performed by the Seller on or before
the Closing Date shall have been fully complied with and performed.
5.02. Representations and Warranties of Seller. The representations
and warranties of Seller contained herein and in the Schedules, Exhibits and
certificates delivered pursuant hereto, or in connection with the transactions
as contemplated hereby shall be true and correct on and as of the Closing Date
with the same effect as though all such representations and warranties had been
made on and as of that date, and Buyer shall have received a certificate dated
the Closing Date signed by the Seller stating that all such representations
and warranties are true and correct. On the Closing Date such representations
and warranties will not contain, any untrue statement of a material fact, and
all statements, information, representations and warranties of Seller
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to Buyer contained herein and in the Schedules, Exhibits and certificates
delivered pursuant thereto shall be true and complete on and as of the Closing
Date as though made on that date. True copies of all available leases,
agreements, plans, Continuing Contracts and other instruments listed on or
referred to, or otherwise related to any item referred to in the Schedules and
Exhibits, delivered or furnished to the Buyer pursuant to this agreement have
been delivered or have been made available, or will upon request be made
available for inspection by the Buyer. Buyer shall be entitled to rely upon
the accuracy of all such information, whether provided orally or in writing,
in the preparation of its filings with the Securities and Exchange Commission.
5.03. No Adverse Change. Except as otherwise fully and adequately
disclosed in this Agreement and except for changes in the areas in which the
Theatres are located affecting the motion picture exhibition business
generally, there shall not have been any material adverse change in the
operation of the Theatres comprising the Property between execution hereof and
the Closing Date, and the Seller shall have delivered to Buyer a certificate
signed by the Seller dated the Closing Date, to such effect.
5.04. Approval of Legal Matters. All actions, proceedings,
instruments and documents reasonably necessary or reasonably appropriate to
Buyer, or its counsel, to effectuate this Agreement and the consummation of the
transactions contemplated hereby, or incidental thereto shall have been
approved by such counsel.
5.05. Litigation. No suit shall, at the Closing Date, be pending or
threatened before any court, governmental agent, bureau, board or other
authority in which the transactions contemplated by this Agreement are sought
to be restrained.
5.06. Condition of Property and Risk of Loss. On the Closing Date,
all of the Property including equipment, furniture and fixtures located in the
Theatres shall be substantially in the same condition as at the close of
business on the date hereof except for:
(a) Ordinary use and wear thereof;
(b) Changes occurring in the ordinary course of business
between the date hereof and the Closing Date.
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5.07. Uniform Commercial Code Searches; Title Insurance. The Buyer
shall have received Uniform Commercial Code Searches (conducted by Buyer at
Buyer's expense through a date reasonably proximate in time to the Closing
Date) of filings made pursuant to Article 9 thereof in all jurisdictions where
the Theatres are located, which searches shall be in form, scope and substance
reasonably satisfactory to Buyer and its counsel, and which shall not disclose
any liens, security interests or encumbrances not disclosed in a Schedule.
Buyer shall, at Buyer's expense, cause an examination to be made of the
Seller's title to the leased premises upon which the Theatres are located and
such title examination shall only disclose the Permitted Title Exceptions.
Further, Buyer shall have received irrevocable commitments from Mid-South
Title/Lawyers Title, Chicago Title Insurance Company, Commonwealth Land Title
Insurance Company, Lawyers Title of North Carolina or Lawyers Title Insurance
Corporation to issue their standard form ALTA extended coverage policy of title
insurance, dated as of the Closing Date.
5.08. Consents. Seller shall have delivered to Buyer the written
consent of third parties referred to in Section 2.07 (d), which consent shall
be in substantially the form, scope and substance of the Landlord's estoppels
attached hereto as Exhibit "G".
5.09. Governmental Approvals. The waiting period applicable to the
transaction contemplated hereby under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements of 1976 shall have expired or been terminated, and no governmental
entity shall have expressed the intention to file an action to restrain, modify
or prohibit the transaction contemplated by this Agreement or any part thereof.
ARTICLE VI
FIRE, CONDEMNATION AND INSURANCE
6.01. Fire, Condemnation and Insurance.
(a) If, prior to the Closing Date, all or a part or any of
the Midco 5, Aberdeen, SD, Empire 6, Sioux Falls, SD, West Mall, Sioux Falls,
SD, Midco 10, Grand Forks, ND or the Kandi, Wilmar, MN shall be destroyed or
damaged by fire or any other casualty, or if all or a part of any of said
Theatres shall be condemned, in whole or in part, by governmental or other
lawful authority, neither Seller nor Buyer shall have any liability for any
such destruction, damage or condemnation and Buyer shall have
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the option of (i) completing the purchase without adjustment in the Purchase
Price, in which event Seller shall comply with its obligations set forth in
paragraph (c) of this Section, or (ii) canceling this Contract and all
obligations of Seller and Buyer hereunder; provided, however, Buyer may not
elect to exercise the option set forth in clause (ii) if the Property shall be
damaged or destroyed by fire or other casualty covered by Seller's Required
Insurance, (as defined in paragraph (d) of this Section) and the cost to repair
or replace such damaged or destroyed Property shall not exceed $250,000 in the
aggregate provided Seller complies with its obligations under paragraphs (c)
and (d) of this Section. Buyer shall exercise one of the aforesaid two options
by giving notice to Seller within 10 days after the giving of notice by Seller
to Buyer of the occurrence of the damage or destruction or condemnation, and
the failure of Buyer to give any notice within said 10 day period shall
constitute an election by Buyer not to cancel this Contract.
(b) If, prior to the Closing Date, all or a part of the
Columbia, Grand Forks, ND, Lake 3, Devils Lake, ND, Plaza Twin, Grand Forks,
ND, Cinema 3, New Ulm, MN, Springbrook, Coon Rapids, MN, State, Hutchinson, MN
or Terrace, Robbinsville, MN shall be destroyed or damaged by fire or any other
casualty, or if all or a part of any of said Theatres shall be condemned, in
whole or in part, by governmental or other lawful authority, neither Seller nor
Buyer shall have any liability for any such destruction, damage or condemnation
and Buyer shall complete the purchase without adjustment in the Purchase Price,
in which event Seller shall comply with its obligations set forth in paragraph
(c) of this Section.
(c) In the event of damage to or destruction or condemnation
of any of the Theatres set forth in paragraph (a) hereof, and this Contract is
not terminated as provided therein, or in the event of damage to or destruction
or condemnation of any of the Theatres set forth in paragraph (b) of this
Section, Seller shall have no obligation to restore or repair the same and
Buyer shall accept the same in its then condition at Closing, but Seller shall
pay to Buyer, at Closing, all insurance or condemnation proceeds received by
Seller with respect to such loss or taking, plus the amount of any deductible
under any Required Insurance.
(d) Prior to the Closing Date, Seller shall maintain in full
force and effect on the Property damage insurance coverage ("Required
Insurance"), as presently in effect, a description of which is set forth on
Exhibit "H" hereto.
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ARTICLE VII
REPRESENTATIONS, WARRANTIES AND
OBLIGATIONS OF BUYER
The Buyer represents and warrants to the Seller as follows:
7.01. Organization in Good Standing. The Buyer is a corporation duly
organized and existing, and in good standing under the laws of the State of
Delaware, and has full corporate power to carry on its businesses, to own and
operate its properties and assets, and to consummate the transactions
contemplated by this Agreement.
7.02. Authority. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Buyer; no further corporate action of any nature is
required pursuant to the Articles of Incorporation and By-Laws of the Buyer;
and this Agreement constitutes the valid and binding obligation of the Buyer,
except as may be limited by bankruptcy, insolvency, or other laws affecting
creditors rights generally, or as may be modified by a court of equity in an
action for specific performance. The execution, delivery and performance of
this Agreement will not violate or result in default under any provision of the
Articles of Incorporation or By-Laws of the Buyer, or any material commitment,
indenture, license or other obligation to which the Buyer is a party, and will
not, to the best knowledge of the Buyer, contravene any law, rule or regulation
of any administrative agency or governmental body or any other order, writ,
injunction or decree of any court, administrative agency or governmental
agency applicable to the Buyer.
7.03. Claims. Except for claims arising under or in connection with
this Agreement, Buyer neither has nor on the Closing Date will have any claims
of any nature, whether asserted or unasserted, against Seller.
7.04. Governmental Notifications and Consents. Other than the filing
applicable to the transaction contemplated hereby under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, and except as set forth on Schedule 7.04,
no material notification, consent, authorization, order of approval of, or
filing or registration with any governmental commission, board or other
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regulatory body, or any other party, is required for or in connection with the
execution and delivery of this Agreement by Buyer, and the consummation by
Buyer of the transactions contemplated hereby.
7.05. Buyer's Indemnity for Seller's Continuing Liability under
Leases. Buyer hereby covenants and agrees that it shall indemnify and hold
harmless Seller from any and all claims, actions, damages and other liabilities
to any person arising out of Buyer's occupancy or operation of the premises
demised by the Leases or Buyer's failure to comply, from and after the Closing
Date, with the terms and conditions of the Leases to be assigned to Buyer at
Closing upon which Seller is not released by the applicable Landlord.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of the Seller to consummate the transactions provided
for herein are subject to the satisfaction, in all material respects, of the
following conditions on or prior to the Closing Date:
8.01. Compliance by the Buyer. All the terms, covenants and
conditions of this Agreement to be complied with and performed by the Buyer on
or before the Closing Date shall have been fully complied with and performed in
all material respects.
8.02. Representations and Warranties of the Buyer. The
representations and warranties of the Buyer contained herein shall be true and
correct, on and as of the Closing Date, with the same force and effect as
though such representations and warranties had been made on and as of the
Closing Date, and the Buyer shall have furnished to the Seller a certificate
dated the Closing Date and signed by the President or Vice President and
Secretary of the Buyer to such effect.
8.03. Litigation. No suit shall, at the Closing Date, be pending or
threatened before any court, governmental agent, bureau, board or other
authority in which the transactions contemplated by this Agreement are sought
to be restrained, or in connection with which damages or other relief is
sought, or in which any material claim shall be asserted against the Buyer
regarding the Theatres not disclosed herein, or in the Schedules or Exhibits
delivered hereto.
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8.04. Approval of Legal Matters. All actions, proceedings,
instruments and documents reasonably necessary or reasonably appropriate to
Seller, or its counsel, to effectuate this Agreement and the consummation of
the transactions contemplated hereby, or incidental thereto shall have been
approved by such counsel.
8.05. Landlord Consents. All Landlord consents required hereunder or
under the Leases have been obtained.
8.06. Governmental Approvals. The waiting period applicable to the
transaction contemplated hereby under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements of 1976 shall have expired or been terminated, and no governmental
entity shall have expressed the intention to file an action to restrain, modify
or prohibit the transaction contemplated by this Agreement or any part thereof.
ARTICLE IX
TERMINATION
9.01. Right of Termination. This Agreement and the transactions
contemplated by this Agreement may be terminated at any time prior to the
Closing Date:
(a) By the mutual consent of the Board of Directors of Buyer
and the Board of Directors of Seller;
(b) By the Board of Directors of Buyer in the event the
conditions set forth in Articles IV and V of this Agreement shall not have been
satisfied or waived by the Closing Date.
(c) By the Board of Directors of Seller in the event that the
conditions set forth in Articles VII and VIII of this Agreement shall not have
been satisfied or waived by the Closing Date.
(d) By either the Boards of Directors of Buyer or the Seller
if any action or proceeding before any court or other governmental body or
agency shall have been instituted in good faith by an unrelated third party (i)
to restrain, modify or prohibit the transaction contemplated by this Agreement,
(ii) to recover damages from Buyer or Seller if such action or proceeding,
directly related to this Agreement, could result in the imposition
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of a material liability against or affecting the business or properties of the
Buyer or the Seller in the opinion of the party seeking to terminate this
agreement, or (iii) to force Buyer or the Seller to take any action that would
have a material and adverse effect on the business or properties of Buyer or
Seller, directly related to this Agreement, in the opinion of the party seeking
to terminate this Agreement unless either the Buyer or the Seller causes such
action or proceeding to be dismissed on or prior to the Closing Date.
(e) By either the Boards of Directors of Buyer or Seller in
the event the Agreement between Buyer and Bismarck Theatres, Inc. does not
close on the Closing Date.
9.02. Notice of Termination. Notice of termination of this
Agreement, as provided for in this Article, shall be given by the parties so
terminating to the other parties hereto, in accordance with the provisions of
Section 11.08 of this Agreement.
ARTICLE X
PARTIES' AGREEMENT TO CROSS-INDEMNIFY
10.01. Agreement to Indemnify. Subject to the terms and conditions
of this Article X, each party (the "Indemnifying Party") agrees to indemnify,
defend and hold the other party (the "Indemnified Party") harmless from and
against all claims asserted against, imposed upon or incurred by the other
party by reason of, or resulting from:
(a) A breach or non-fulfillment of any warranty, or any
inaccuracy of any representation contained in, or made pursuant to this
Agreement, or
(b) A breach or non-fulfillment of any covenant or agreement,
other than a representation or warranty, contained in or made pursuant to this
Agreement; or
(c) Any undisclosed liability.
10.02. Conditions of Indemnification. Obligations and liabilities of
the Indemnifying Party hereunder with respect to claims shall be subject to the
following terms and conditions:
(a) The Indemnified Party shall give the Indemnifying Party
notice of any claim promptly after the
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Indemnified Party receives notice thereof, and to the best of Indemnified
Party's knowledge advise Indemnifying Party which representation and warranty,
covenant or agreement set forth herein said claim violates (in no event more
than thirty (30) days after Indemnified Party receives such notice), and the
Indemnifying Party will undertake the defense thereof by representatives of
their own choosing satisfactory to Indemnified Party. All costs and expenses
of such defense (including fees of counsel), and any settlement or compromise
resulting from the defense of any claim will be paid by the Indemnifying Party.
(b) In the event that the Indemnifying Party, within a
reasonable time after receipt of notice of any such claim, but in no event more
than thirty (30) days after receipt of such notice, fails to defend, the
Indemnified Party will (upon further notice to the Indemnifying Party) have the
right to undertake the defense, compromise or settlement of such claim on
behalf, for the account and risk of the Indemnifying Party, and at Indemnifying
Party's expense, subject to the right of the Indemnifying Party to assume the
defense of such claim at any time prior to settlement, compromise or final
determination thereof.
10.03. Assistance. In the event so requested by the Indemnifying
Party, the Indemnified Party shall use its best efforts to make available all
information and assistance reasonably required in the defense by the
Indemnifying Party of a claim.
10.04. Limitations. The Indemnifying Party's obligation to indemnify
the Indemnified Party as provided in Section 10.01 above is subject to the
condition that the Indemnifying Party shall have been given notice by
Indemnified Party of the claim for which indemnity is sought within twelve (12)
months after the Closing Date.
10.05. Monetary Limitation. In no event shall the liability of an
Indemnifying Party exceed the aggregate sum of EIGHT MILLION THREE HUNDRED
TWENTY-FIVE THOUSAND DOLLARS ($8,325,000.00) for all claims.
10.06. Seller's Indemnification Regarding Underground Storage Tank
Located at Terrace Theatre, Robbinsdale, MN. Subject to the terms and
conditions hereinabove set forth in this Article X, Seller hereby agrees to
indemnify and hold Buyer harmless from any and all costs, damages and expenses
whatsoever, including reasonable attorneys fees arising out of or related to
the
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underground storage tank located on the premises of the Terrace Theatre,
Robbinsdale, MN.
ARTICLE XI
MISCELLANEOUS
11.01. Survival of Representations.
(a) All statements contained in any Schedule, Exhibit,
document, certificate or other instrument delivered by or on behalf of the
Buyer or the Seller pursuant hereto, or in connection with the transactions
contemplated hereby, shall be deemed representations and warranties hereunder
by the Buyer or the Seller as the case may be. The representations, warranties
and agreements made by the Buyer and the Seller herein shall survive
consummation of the transactions contemplated hereby for twelve (12) months
after Closing Date, and no audit of the inventories, properties, financial
condition, records or other matters relating to the Seller shall limit, affect
or impair the ability of the Buyer to rely upon the representations, warranties
and agreements of the Seller set forth herein. Provided, however, any
representation or warranty which Buyer knows to be untrue or incorrect and not
objected to at Closing shall be waived.
(b) Except for the limitations set forth in Sections 10.04 and
10.05 hereof, nothing contained in this agreement shall relieve Seller, or any
officer or director thereof of any liability or limit any liability that he or
she may have on account of common law fraud, or purposeful misrepresentation
in connection with the transactions contemplated by this Agreement, or in
respect of Seller only, in connection with the delivery of any certificate
required to be delivered under the terms hereof, which certificate is untrue in
any material respect.
11.02. Assignment. This Agreement shall not be assignable by either
party hereto without the written consent of the other, and shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors, assignees and legal representatives.
11.03. Public Announcements. Except as required by law, neither
party shall make any public announcement concerning this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party, such consent not to be unreasonably withheld.
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11.04. Construction. This Agreement shall be construed and enforced
in accordance with the laws of the State of Minnesota, USA.
11.05. Amendment. This Agreement may be amended, supplemented or
interpreted at any time by written instrument executed by the parties hereto.
11.06. Expenses; Brokers and Finders Fees. Seller and Buyer agree
that there are no brokers or finders fees or commissions payable to any person
employed by Seller or Buyer in connection with the transactions contemplated by
this Agreement, and Seller and Buyer will indemnify each other with respect
thereto, and hold each other harmless therefrom. Each party hereto shall pay
its or his or her own expenses incident to this Agreement and the transactions
contemplated hereby, including all fees and expenses of their counsel, whether
or not such transaction shall be consummated.
11.07. Further Assurances. The parties hereto agree and acknowledge
that certain computations, exchange and notification of information and other
actions may be required from time to time after the date hereof through and
after the Closing Date with respect to this Agreement. The parties hereto, and
their respective representatives, shall use their best efforts to cooperate
with one another in the expeditious completion of all such computations,
notifications and actions required. Without limiting the generality of the
foregoing, Seller agrees to use its best efforts to assist Buyer with respect
to the resolution of any matters arising in connection with or affecting the
title of the Seller to any of the Property. Seller shall execute and deliver
any and all documents, and will cause any and all other action to be taken,
either before or after the Closing which may be necessary or proper to effect
or evidence the provisions of this Agreement, and the transactions
contemplated hereby.
11.08. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have duly
been given if delivered, or if mailed by United States or Canadian Registered
Mail, prepaid, to the parties or their assignees, at the following addresses
(or such other addresses as shall be given in writing by the parties to one
another), or sent via telecopier to the parties at the telecopier number set
forth below:
BUYER:
Xxxx X. Xxxxxxx, III
Carmike Cinemas, Inc.
0000 - 0xx Xxxxxx
Xxxxxxxx, XX 00000
TELEPHONE : 706/000-0000
FAX : 706/000-0000
With a copy to:
X. Xxx Champion, III
Champion & Champion
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
TELEPHONE : 706/000-0000
FAX : 706/000-0000
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SELLER:
Xxxx X. Xxxxxxx
Executive Vice President
and General Counsel
Midcontinent Media, Inc.
0000 Xxxxxx Xxxxxx, Xx.
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
TELEPHONE : 612/000-0000
FAX : 612/000-0000
With a copy to: Xxxxxx Xxxxxx
Xxxxxxx, Street and Deinard
Suite 2300
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
TELEPHONE : 612/000-0000
FAX : 612/000-0000
11.09. Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy. The election of any one remedy by a party hereto shall not constitute
a waiver of the right to pursue other available remedies.
11.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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11.11. Entire Agreement. This Agreement, the Exhibits hereto, and
the certificates, Schedules and other documents delivered pursuant hereto are
incorporated by reference herein, contain the entire agreement between the
parties concerning the transaction contemplated herein, and supersede all prior
agreements or understandings between the parties hereto relating to the subject
matter hereof. No oral representation, agreement or understanding made by any
party hereto shall be valid or binding upon such party or any other party
hereto.
11.12. Additional Documents. The parties hereto will at any time
after the date hereof sign, execute and deliver, or cause others so to do, all
such powers of attorneys, deeds, assignments, documents and instruments, and do
or cause to be done all such other acts and things as may be necessary or
proper to carry out the transactions contemplated by this Agreement.
11.13. Captions and Section Headings. The captions and section
headings used herein are for convenience only, and are not a part of this
Agreement, and shall not be used in construing it.
11.14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the arbitration rules of the American
Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
11.15. Schedules. To the extent that identical information may be
required by two or more Schedules hereto, such information need be supplied on
only one Schedule if appropriate cross-references are made on such other
Schedules, or if the information is readily available on another Schedule, or
in the Agreement.
11.16. Bulk Transfer. The parties hereby waive the applicable
provisions of the Uniform Commercial Code relating to Bulk Transfers in the
states in which the Property is located, and Seller hereby indemnifies Buyer
from Seller's failure to comply with such provisions.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, on the day and year first above written.
SELLER:
Signed, sealed and delivered MIDCONTINENT THEATRE CO.
in the presence of
BY:_______________________________
____________________________ Title:_____________________
Witness
ATTEST:___________________________
____________________________ Title:_____________________
Notary Public
(Corporate Seal)
Signed, sealed and delivered MIDCONTINENT THEATRE CO.
in the presence of OF MINNESOTA
BY:_______________________________
____________________________ Title:_____________________
Witness
ATTEST:___________________________
____________________________ Title:_____________________
Notary Public
(Corporate Seal)
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Signed, sealed and delivered MIDCONTINENT THEATRE CO.
in the presence of OF SOUTH DAKOTA
BY:_______________________________
____________________________ Title:_____________________
Witness
ATTEST:___________________________
____________________________ Title:_____________________
Notary Public
(Corporate Seal)
Signed, sealed and delivered MIDCONTINENT THEATRE CO.
in the presence of OF NORTH DAKOTA
BY:_______________________________
____________________________ Title:_____________________
Witness
ATTEST:___________________________
____________________________ Title:_____________________
Notary Public
(Corporate Seal)
BUYER:
Signed, sealed and delivered CARMIKE CINEMAS, INC.
in the presence of:
____________________________ BY:___________________________
Witness President
____________________________
Notary Public ATTEST:_______________________
Secretary
(Corporate Seal)
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