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ASSET PURCHASE AGREEMENT
by and among
LIVENT INC.,
LIVENT (U.S.) INC.,
LIVENT REALTY (NEW YORK) INC.,
LIVENT REALTY (CHICAGO) INC.,
LIVENT INTERNATIONAL INC.
and
SFX ENTERTAINMENT, INC.
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Dated as of May 28, 1999
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS...................................................... 2
Section 1.1. Definitions........................................ 2
ARTICLE II. PURCHASE AND SALE............................................... 21
Section 2.1. Purchase and Sale of Purchased Assets.............. 21
Section 2.2. Purchase Price..................................... 22
Section 2.3. Closing Purchase Price Adjustments................. 23
Section 2.4. Post-Closing Purchase Price Adjustments............ 24
Section 2.5. Assumption of Liabilities.......................... 26
Section 2.6. Deposit............................................ 27
Section 2.7. Payment of Purchase Price.......................... 27
Section 2.8. Allocation of Purchase Price....................... 29
Section 2.9. Warrants........................................... 29
ARTICLE III. CLOSING ....................................................... 30
Section 3.1. Closing............................................ 30
Section 3.2. Closing Deliveries of the Sellers.................. 30
Section 3.3. Closing Deliveries of the Buyer.................... 31
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLERS................... 32
Section 4.1. Corporate Organization............................. 32
Section 4.2. Qualification to Do Business....................... 32
Section 4.3. Authorization and Validity of Agreement............ 32
Section 4.4. No Conflict or Violation........................... 32
Section 4.5. Consents........................................... 33
Section 4.6. Compliance with Law................................ 33
Section 4.7. Financial Statements............................... 33
Section 4.8. Litigation......................................... 34
Section 4.9. Labor Relations.................................... 34
Section 4.10. Employee Benefits.................................. 34
Section 4.11. Purchased Real Property............................ 34
Section 4.12. Title, Ownership and Related Matters............... 37
Section 4.13. Intellectual Property.............................. 37
Section 4.14. Contracts.......................................... 37
Section 4.15. Tax Matters........................................ 38
Section 4.16. Environmental Matters.............................. 38
Section 4.17. No Material Adverse Effect; Conduct of Business ... 40
Section 4.18. Investment Undertaking............................. 41
Section 4.19. Excise Tax Act Registration........................ 41
Section 4.20. Brokers............................................ 41
Section 4.21. Quebec Sales Tax................................... 42
Section 4.22. Not a Non-Resident................................. 42
(i)
Section 4.23. Competition Act.................................... 42
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE BUYER...................... 42
Section 5.1. Corporate Organization............................. 42
Section 5.2. Qualification to Do Business....................... 42
Section 5.3. Authorization and Validity of Agreement............ 42
Section 5.4. No Conflict or Violation........................... 42
Section 5.5. Consents and Approvals............................. 43
Section 5.6. Authorization and Validity of Warrants
and Common Stock ................................ 43
Section 5.7. Buyer SEC Documents and Financial Statements ...... 43
Section 5.8. No Material Adverse Effect; Conduct of Business ... 44
Section 5.9. Availability of Funds.............................. 44
Section 5.10. Adequate Assurances Regarding Executory Contracts . 44
Section 5.11. Brokers............................................ 44
Section 5.12. Excise Tax Act Registration........................ 44
Section 5.13. Investigation by Buyer............................. 44
ARTICLE VI. FURTHER AGREEMENTS BETWEEN THE PARTIES.......................... 45
Section 6.1. Conduct of Business Before the Closing Date ....... 45
Section 6.2. Consents; HSR Act.................................. 47
Section 6.3. Access to Properties and Records; Confidentiality . 48
Section 6.4. Further Assurances................................. 48
Section 6.5. Reasonable Efforts................................. 48
Section 6.6. Alternative Transaction............................ 49
Section 6.7. Livent Headquarters License Agreement.............. 49
Section 6.8. Procurement of Orders; Adequate Assurances
Regarding Assumed Contracts ..................... 50
Section 6.9. Pantages Naming Agreement.......................... 51
Section 6.10. Application for "No Action" Letter................. 51
ARTICLE VII. EMPLOYEES AND EMPLOYEE PLANS................................... 51
Section 7.1. Offer of Employment................................ 51
Section 7.2. Liabilities........................................ 52
Section 7.3. Employee Health and Welfare........................ 53
ARTICLE VIII. TAXES ....................................................... 54
Section 8.1. Taxes Related to Purchase of Assets................ 54
Section 8.2. Cooperation on Tax Matters......................... 54
Section 8.3. Election Re: Accounts Receivable................... 55
Section 8.4. Subsection 20(24) Election......................... 55
ARTICLE IX. REAL PROPERTY MATTERS........................................... 55
Section 9.1. Title Exceptions................................... 55
Section 9.2. Violations......................................... 57
Section 9.3. Casualty and Condemnation.......................... 58
Section 9.4. Condition of the Properties........................ 59
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Section 9.5. Satisfaction and Discharge; Survival............... 59
Section 9.6. Permanent Certificate of Occupancy for New
York Theater and Certificate of Completion
for Chicago Theater ............................. 59
Section 9.7. Arbitration........................................ 60
Section 9.8. Structural Support for Pantages Theater............ 61
ARTICLE X. SURVIVAL OF REPRESENTATIONS AND WARRANTIES....................... 62
Section 10.1. Survival of Representations and Warranties ........ 62
ARTICLE XI. INDEMNIFICATION................................................. 62
Section 11.1. Escrow A Fund and the Put Obligation............... 62
Section 11.2. Indemnification by the Sellers..................... 62
Section 11.3. Indemnification by the Buyer....................... 63
Section 11.4. Indemnification Procedures - Third-Party Claims ... 64
Section 11.5. Indemnification Procedures -- Other Claims ........ 66
Section 11.6. Right to Indemnification Not Affected by
Knowledge or Waivers ............................ 66
ARTICLE XII. CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLERS ............ 66
Section 12.1. Representations and Warranties of the Buyer ....... 66
Section 12.2. Performance of the Obligations of the Buyer ....... 66
Section 12.3. Consents; HSR Act.................................. 67
Section 12.4. Litigation......................................... 67
Section 12.5. No Violation of Orders............................. 67
Section 12.6. Entry of the Orders................................ 67
Section 12.7. Assignment of Bankruptcy Claim..................... 67
Section 12.8. Dundee Agreement................................... 67
Section 12.9. Delivery of the Buyer's Closing Documents.......... 68
ARTICLE XIII. CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE BUYER ........ 68
Section 13.1. Representations and Warranties of the Sellers ..... 68
Section 13.2. Performance of the Obligations of the Sellers ..... 68
Section 13.3. Consents; HSR Act.................................. 68
Section 13.4. Litigation......................................... 69
Section 13.5. Cure of Defaults................................... 69
Section 13.6. No Violation of Orders............................. 69
Section 13.7. Entry of the Orders................................ 69
Section 13.8. Buyer's Title Company.............................. 69
Section 13.9. Planning Act....................................... 69
Section 13.10. Dundee Agreement................................... 69
Section 13.11. Operating Condition................................ 70
Section 13.12. Delivery of the Sellers' Closing Documents ........ 70
ARTICLE XIV. TERMINATION.................................................... 70
Section 14.1. Conditions of Termination.......................... 70
Section 14.2. Effect of Termination; Remedies.................... 71
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ARTICLE XV. MISCELLANEOUS................................................... 72
Section 15.1. Disclaimer of Additional Representations
and Warranties; Schedules ....................... 72
Section 15.2. Successors and Assigns............................. 72
Section 15.3. Governing Law; Jurisdiction........................ 72
Section 15.4. Expenses........................................... 73
Section 15.5. Currency Exchange.................................. 73
Section 15.6. Severability....................................... 73
Section 15.7. Notices............................................ 73
Section 15.8. Amendments; Waivers................................ 75
Section 15.9. Public Announcements............................... 75
Section 15.10. Entire Agreement................................... 75
Section 15.11. Parties in Interest................................ 75
Section 15.12. Construction....................................... 75
Section 15.13. Descriptive Headings............................... 76
Section 15.14. Recordation........................................ 76
Section 15.15. Counterparts; Facsimile Signatures................. 76
Section 15.16. Bankruptcy Orders.................................. 76
Section 15.17. Certain Deliveries By Livent....................... 76
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INDEX TO SCHEDULES
1.1 Prepaid Purchased Assets
1.2 Excluded Assets
1.3A Excluded Land (Vancouver Ford Centre Theater)
1.3B Excluded Land (North York Ford Centre Theater)
1.3C Excluded Land (Livent Headquarters)
1.3D Excluded Land (Toronto, Ontario)
1.4 Excluded Contracts
1.5 Licenses and Permits
1.7 Surveys
1.8(a) Certain Permitted Liens
1.8(b) Certain Permitted Closing Liens
2.3(a) Form of Estimated Closing Date Balance Sheet
2.3(e) Pre-Production Expenditures
4.2 Foreign Qualification
4.5 Consents and Approvals
4.6 Compliance with Law
4.7 Unaudited Financial Statements
4.8 Litigation
4.10 Employee Benefit Plans
4.11(a) Purchased Real Property
4.11(a)(i) Chicago Theater Land
4.11(a)(ii) Pantages Theater Land
4.11(b) Notices of Default or Breach
4.11(c) Leases
4.11(d) Space Leases
4.11(e) Purchase Options, Rights of First Refusal and Rights of Reverter
4.11(f) Property Permits
4.11(i) Improvements
4.11(j) Violations
4.11(k) Tax Proceedings
4.11(l) Transfer of Air Rights or Development Rights
4.11(m) Security Deposits under Space Leases
4.11(o) Casualty Insurance
4.13 Intellectual Property
4.14(a)(i) Assumed Executory Contracts
4.14(a)(ii) Other Assumed Contracts
4.15 Tax Matters
4.16 Environmental Matters
4.17 Seller Material Adverse Changes and Conduct of Business
6.1 Conduct of Business
7.1(a) Assumed Collective Bargaining Agreements
9.1(a) Title Commitments
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EXHIBITS
Exhibit A -- Form of Order of the Canadian Bankruptcy Court
Exhibit B -- Dundee Term Sheet
Exhibit C -- Form of Put Obligation
Exhibit D -- Form of Order of the U.S. Bankruptcy Court
Exhibit E -- Form of Warrant
Exhibit F -- Form of Chicago Theater Deed
Exhibit G -- Form of Registration Rights Agreement
Exhibit H-1 -- Seller Certification of Livent N.Y.
Exhibit H-2 -- Seller Certification of Livent Chicago
Exhibit H-3 -- Seller Certification of Livent
Exhibit I -- Form of Release of Broker's Lien
Exhibit J -- Form of Break-Up Fee Order
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of May 28, 1999, is made and
entered into by and among Livent Inc., an Ontario corporation ("Livent"); Livent
International Inc., a Barbados corporation ("Livent International"); Livent
(U.S.) Inc., a Delaware corporation ("Livent U.S."); Livent Realty (New York)
Inc., a Delaware corporation ("Livent N.Y."); Livent Realty (Chicago) Inc., a
Delaware corporation ("Livent Chicago," and together with Livent, Livent
International, Livent U.S. and Livent N.Y., collectively, the "Sellers"); and
SFX Entertainment, Inc., a Delaware corporation (the "Buyer").
W I T N E S S E T H:
WHEREAS, on November 18, 1998, (the "Petition Date"), each of the
Sellers other than Livent International filed a voluntary petition for relief
under chapter 11, title 11 of the United States Code, 11 U.S.C. ss. ss. 101, et
seq. (the "U.S. Bankruptcy Code"), and on May 28, 1999 (the "International
Petition Date"), Livent International filed a voluntary petition for relief
under chapter 11 of the U.S. Bankruptcy Code, with each filing in the United
States District Court for the Southern District of New York (the "U.S.
Bankruptcy Court"), Case Nos. 98-B-48309 through 98-B-48312 AJG and 99-B-43450
AJG (the "U.S. Bankruptcy Cases"), which U.S. Bankruptcy Cases are currently
pending and are being jointly administered;
WHEREAS, on November 19, 1998, Livent filed an application for an order
under sections 4, 5, 6, 7, 11 and 18.6(2) of the Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-36, as amended (the "CCAA"), and under the
Business Corporations Act (Ontario), R.S.O. 1990, c. B-16 (the "OBCA") in the
Superior Court of Justice (Ontario) (the "Canadian Bankruptcy Court"), Court
File Number 98-CL-3162 (the "Canadian Bankruptcy Case," and collectively with
the U.S. Bankruptcy Cases, the " Bankruptcy Cases");
WHEREAS, the Buyer desires to purchase certain assets of the Sellers,
which assets comprise substantially all of the Sellers' assets, from the
Sellers, and the Sellers desire to sell such assets to the Buyer pursuant to
Section 363 of the U.S. Bankruptcy Code and pursuant to the CCAA;
WHEREAS, the Buyer wishes to assume from the Sellers, and the Sellers
wish to assign to the Buyer, certain executory contracts and unexpired leases
pursuant to Section 365 of the U.S. Bankruptcy Code and pursuant to the CCAA,
all of which were previously assumed, or shall be assumed, by the Sellers
pursuant to Section 365 of the U.S. Bankruptcy Code and pursuant to the CCAA;
and
WHEREAS, simultaneously with the execution of this Agreement, the Buyer
and the Sellers are entering into the Deposit Escrow Agreement, and the Buyer is
delivering the Deposit to the Deposit Escrow Agent;
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the meanings set forth below. Certain other
capitalized terms used in this Agreement but not defined in this Article I shall
have the meanings ascribed to such terms elsewhere in this Agreement.
"Access Agreement" shall mean that certain letter, dated May 14, 1999,
from the Buyer to the Sellers providing for, among other things, an indemnity
with respect to the Buyer's access to the Premises.
"Accounts Receivable" shall mean all amounts and notes receivable of
the Sellers relating to the Business and/or the Purchased Assets (other than
Ticketmaster Receivables), existing on the Closing Date, and the full benefit of
all security (if any) for such amounts.
"Adjusted Cash Purchase Price" -- See Section 2.2(a).
"Adjustment Date" shall mean 11:59 p.m. on the day preceding the
Closing Date.
"Advance Ticket Sales" shall mean ticket sales by the Sellers or
Sellers' Ticket Agents in respect of the Productions, the performance of which
is to occur on dates on or after the Closing Date.
"Affiliate" shall mean, with respect to any Person, any Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such other Person; provided, that, the creditors of any Seller
shall not be considered the Affiliate of any Seller as a result of such creditor
relationship.
"Agreement" shall mean this Asset Purchase Agreement, including all
schedules and exhibits hereto, as it may be amended from time to time in
accordance with its terms.
"Alternative Transaction" shall mean a transaction pursuant to a bona
fide proposal made by any Person or Persons (other than the Buyer and any
Affiliate of the Sellers) to acquire, directly or indirectly, all or
substantially all of the assets of the Business or more than 50% of the voting
power of the equity securities of Livent on terms which the Board of Directors
of Livent (or the restructuring committee thereof) or one or more members of
such restructuring committee duly authorized by such committee, after timely
notification to the creditors' committee and the Buyer, determines in its good
faith judgment to be higher or otherwise better to the Sellers in accordance
with the Break-Up Fee Order (including the bidding procedures authorized
thereby) than the transaction provided for in this Agreement (taking into
account all factors relating to such proposed transaction, including, but not
limited to, the consideration to be paid, the financing thereof, the proposed
timing thereof and all other conditions thereto).
"Assignment and Assumption Agreement" shall mean the assignment and
assumption agreement to be executed at the Closing by the Buyer and the Sellers
in form and substance reasonably satisfactory to the Sellers and the Buyer.
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"Assignment of Leases" -- See Section 3.2(g).
"Assumed Collective Bargaining Agreements" -- See Section 7.1(a).
"Assumed Contracts" shall mean (A) those Executory Contracts identified
in the Schedule of Assumed Executory Contracts, attached hereto as Schedule
4.14(a)(i) (other than the Assumed Collective Bargaining Agreements), which are
to be assumed by the Sellers and assigned by the Sellers to the Buyer pursuant
to this Agreement, (B) the other Contracts identified in the Schedule
4.14(a)(ii), which are to be assigned by the Sellers to the Buyer pursuant to
this Agreement, (C) any Contract specifically relating to the Business entered
into from and after the date hereof but prior to the Closing Date by any Seller
in accordance with Section 6.1(a), (f), (g), (h) or (i), and (D) any Contract
entered into in connection with Sections 9.6 or 9.8 which the Buyer approves
(which approval shall not be unreasonably withheld or delayed).
"Assumed Contract Deficiencies" -- See Section 6.8(b).
"Assumed Liabilities" -- See Section 2.5.
"Balance Sheet Date" -- See Section 4.7.
"Bankruptcy Cases" -- See the Recitals hereto.
"Break-Up Fee Order" -- See Section 6.6.
"Business" shall mean all the business activities and operations of the
Sellers, engaged in the ordinary course as of the date hereof, relating to the
development, production and presentation of live theatrical productions, and the
ownership and operation of theaters in the United States and Canada, except
those activities and operations specifically relating to the Excluded Assets.
"Business Day" shall mean any day other than Saturday, Sunday and any
day which is a legal holiday or a day on which banking institutions in New York
City or Toronto are authorized by law or other governmental action to close.
"Buyer" -- See the Preamble hereto.
"Buyer Material Adverse Effect" shall mean a material adverse effect on
the financial condition, operations or business of the Buyer taken as a whole or
on the ability of the parties hereto to consummate the transactions contemplated
by the Transaction Documents.
"Buyer SEC Documents" -- See Section 5.7.
"Buyer Transaction Documents" shall mean this Agreement, the Exhibits
and Schedules hereto and all other agreements, certificates or documents
delivered by the Buyer in connection with the consummation of the transactions
contemplated herein, including, without limitation, the Escrow Agreements, the
Put Obligation, the Registration Rights Agreement, the
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Assignment and Assumption Agreement, the Assignment of Leases, the Other Leases
Assignment and the Warrants.
"CA" shall mean the Competition Act (Canada), as amended.
"Canadian Bankruptcy Case" -- See the Recitals hereto.
"Canadian Bankruptcy Court" -- See the Recitals hereto.
"Canadian Leases" shall mean the Leases (other than the New York
Sublease) that are described on Schedule 4.11(c).
"Canadian Order" shall mean an order of the Canadian Bankruptcy Court,
in all material respects in the form attached hereto as Exhibit A, which form is
acceptable to Buyer and which, inter alia: (i) appoints Ernst & Young Inc. as
interim receiver (in such capacity, "EY"), pursuant to the Courts of Justice Act
(Ontario) and the CCAA, of such assets, properties and undertakings of Livent
situate in Canada which comprise the Purchased Assets under this Agreement and
directing EY to enter into this Agreement in respect of those assets, properties
and undertakings; (ii) provides that, upon closing of the transactions
contemplated by this Agreement, all right, title and interest in the assets,
properties and undertakings of Livent comprised in the Purchased Assets situated
in Canada sold pursuant hereto shall irrevocably vest in the Buyer, and its
successors and assigns, free and clear of all Liens, right, title or interest
therein, of any other Person, except to the extent of the Permitted Closing
Liens; and (iii) provides that the Bulk Sales Act (Ontario) does not apply to
the sale of the Purchased Assets pursuant to this Agreement.
"Canadian Pension/Benefit Plans" means all Canadian plans,
arrangements, agreements, programs, policies or practices, whether oral or
written, formal or informal, funded or unfunded, which any of the Sellers is a
party to or bound by or under which any of the Sellers has any liability or
contingent liability or which has any application to the employees or any former
employees of any of the Sellers, (a) relating to retirement savings or pensions,
including any defined benefit pension plan, defined contribution pension plan,
group registered retirement savings plan or supplemental pension or retirement
plan or (b) any bonus, profit sharing, deferred compensation, incentive
compensation, hospitalization, health, dental, disability or other benefit plan
with respect to any of their employees or former employees, individuals working
on contract with them or other individuals providing services to them of a kind
normally provided by employees.
"Cash" shall mean money, currency or a credit balance in a current
account or a deposit account at a financial institution.
"Cash Equivalents" shall mean (i) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (ii) marketable
direct obligations issued by any state of the United States of America or any
political subdivision thereof maturing within one year from the date of
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acquisition and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Corporation or Xxxxx'x Investors
Service, Inc.; (iii) commercial paper issued by any bank or any bank holding
company owning any bank maturing no more than one year from the date of its
creation and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc.;
and (iv) certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition issued by any bank or by any commercial bank
organized under the laws of the United States of America or any state thereof
having combined capital and surplus of not less than $250,000,000.
"CCAA" -- See the Recitals hereto.
"CERCLA" -- See the definition of Hazardous Materials.
"Chicago Certificate" -- See Section 9.6.
"Chicago Mortgage" shall mean that certain Mortgage, dated as of April
23, 1997, from Livent Chicago to the City of Chicago.
"Chicago Theater" shall mean the real property described in Schedule
4.11(a)(i) and the Improvements thereat, commonly known as the Ford Center for
the Performing Arts, located at 00 Xxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx.
"Chicago Theater Deed" -- See Section 3.2(e).
"Claims" -- See the definition of Excluded Assets.
"Closing" -- See Section 3.1.
"Closing Date" -- See Section 3.1.
"Closing Date Balance Sheet" -- See Section 2.4(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean shares of the Class A Common Stock, par value
$0.01 per share, of the Buyer.
"Confidentiality Agreement" -- See Section 6.3.
"Consent" shall mean any approval, authorization, waiver, consent,
order or notification by or on behalf of any Person that is not a party to this
Agreement, or any waiver of, or exemption or variance from any Law or Order.
"Construction Materials" shall mean all of the Sellers' right, title
and interest, if any, in and to any building materials, supplies, hardware, and
carpeting relating to the construction or improvement of the Material Real
Property (whether on site at the Material Real Property or on order as of the
Closing).
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"Contractor Estimate" -- See Section 9.3.
"Contracts" shall mean, collectively, the Leases, Space Leases,
Purchase Orders, Sales and Ticket Orders, Rights Agreements, the Equipment and
Machinery Leases, licenses to use any Intellectual Property, subscription lists,
and partnership or joint venture agreements, license agreements, service
contracts, individual employment, severance or bonus agreements covering any
employee of the Sellers, commission and consulting agreements, Assumed
Collective Bargaining Agreements, suretyship contracts, distribution agreements,
contracts or commitments limiting or restraining the Sellers with respect to the
Business from engaging or competing in any lines of business or with any Person,
documents granting a power of attorney with respect to the Purchased Assets,
agreements not made in the ordinary course of business, options to purchase any
assets or property rights of the Business, and all other agreements to which any
of the Sellers is a party that relate to the Purchased Assets, but excluding the
Excluded Contracts.
"Corporate Documentation" -- See definition of Excluded Assets.
"Credit Agreement" shall mean the Debtor-in-Possession Credit
Agreement, dated as of February 22, 1999, by and among Livent, Livent U.S.,
Livent N.Y., Livent Chicago, the lenders party thereto and Silver Oak Capital,
L.L.C., as agent, as it may be amended from time to time and any credit
agreement that refinances such Credit Agreement.
"Deposit" -- See Section 2.6.
"Deposit Escrow Agent" shall mean IBJ Whitehall Bank & Trust Company, a
New York banking corporation, as escrow agent under the Deposit Escrow
Agreement.
"Deposit Escrow Agreement" shall mean the Deposit Escrow Agreement,
dated as of the date hereof, among the Sellers, the Buyer and the Deposit Escrow
Agent.
"DRVS" shall mean Dundee Realty (Xxxxxxxx-Xxxxxx) Corporation, and its
successors and assigns.
"Dundee Agreement" shall have the meaning given to that term in the
Dundee Term Sheet.
"Dundee Term Sheet" shall mean the term sheet attached hereto as
Exhibit B.
"Employee Benefit Plan" shall mean an Employee Pension Benefit Plan or
an Employee Welfare Benefit Plan where no distinction is required by the context
in which the term is used.
"Employee Pension Benefit Plan" shall mean an "employee pension benefit
plan," as such term is defined in Section 3(2) of ERISA, which covers any
employee or former employee of the Sellers who performed services for the
Business, or any spouse or beneficiary of either.
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"Employee Welfare Benefit Plan" shall mean an "employee welfare benefit
plan," as such term is defined in Section 3(1) of ERISA, which covers any
employee or former employee of the Sellers who performed services for the
Business, or any spouse or beneficiary of either.
"Engineering Consultant" shall mean Terra Probe or such other
engineering consultant reasonably acceptable to the Sellers and the Buyer.
"Environmental Claim" -- See Section 4.16(j).
"Environmental Laws" shall mean all federal, state, provincial, local
and foreign laws, statutes, regulations, ordinances, rules, guidelines, orders,
regulations and other provisions having the force or effect of law, all judicial
and administrative orders and determinations, and all common law concerning
pollution or protection of the environment, including, but not limited to, all
those relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or cleanup of any
Hazardous Materials.
"Environmental Permits" shall mean permits, licenses, certificates,
registrations and approvals required by the Environmental Laws for the operation
of the Business, including, without limitation, the ownership and leasing, as
the case may be, and operation of the Purchased Real Property and the Leased
Real Property.
"Equipment and Machinery" shall mean, to the extent used in the
Business, (i) all the equipment, machinery, furniture, fixtures and
improvements, tooling, spare parts and supplies owned or leased by the Sellers
with respect to the operations of the Business on the Closing Date, except to
the extent the same are attached to real property and considered a portion
thereof under applicable law, and (ii) any rights of the Sellers to the
warranties (to the extent assignable) and licenses received from manufacturers,
sellers and lessors of the aforesaid items; except, in each case, for those that
are Excluded Assets.
"Equipment and Machinery Leases" shall mean the leases for Equipment
and Machinery.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Agent" shall mean IBJ Whitehall Bank & Trust Company, a New
York banking corporation, or such other Person reasonably acceptable to the
Buyer and the Sellers, as escrow agent under the Escrow A Agreement, the Escrow
B Agreement, the Escrow C Agreement and the Escrow D Agreement.
"Escrow A Agreement" shall mean the Escrow Agreement described in
Section 2.7(c) to be dated as of the Closing Date, by and among the Sellers, the
Buyer and the Escrow Agent, in form and substance reasonably satisfactory to the
Sellers and the Buyer.
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"Escrow Agreements" shall mean, collectively, the Deposit Escrow
Agreement, the Escrow A Agreement. the Escrow B Agreement, the Escrow C
Agreement and the Escrow D Agreement.
"Escrow B Agreement" shall mean the Escrow Agreement described in
Section 2.7(d) to be dated as of the Closing Date, by and among the Sellers, the
Buyer and the Escrow Agent, in form and substance reasonably satisfactory to the
Sellers and the Buyer.
"Escrow C Agreement" shall mean the Escrow Agreement described in
Section 2.7(e) to be dated as of the Closing Date, by and among the Sellers, the
Buyer and the Escrow Agent, in form and substance reasonably satisfactory to the
Sellers and the Buyer.
"Escrow D Agreement" shall mean the Escrow Agreement described in
Section 2.7(f) to be dated as of the Closing Date, by and among the Sellers, the
Buyer and the Escrow Agent, in form and substance reasonably satisfactory to the
Sellers and the Buyer.
"Estimated Closing Date Balance Sheet" -- See Section 2.3(a).
"Estimated Purchase Price" -- See Section 2.2(b).
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.
"Excluded Assets" shall mean the following:
(i) all of the Sellers' prepaid insurance premiums and deposits,
including, but not limited to, deposits of the Sellers held by utilities or
under Leases or Equipment and Machinery Leases, and rights to refunds or
adjustments in respect of the period prior to the Closing Date and all
rights to insurance proceeds or other insurance contract recoveries in
respect of liabilities retained by the Sellers pursuant to Article VII;
except to the extent set forth on Schedule 1.1, which lists certain prepaid
expenses that are not Excluded Assets;
(ii) the capital stock or equity interest held by any Seller of any
corporation or other entity, except for Sellers' limited partnership
interests in The Jekyll Company Limited Partnership and The Swan Lake
Company Limited Partnership, New York limited partnerships;
(iii) any asset of any Seller that would constitute a Purchased Asset
(if owned by such Seller on the Closing Date) that is conveyed or otherwise
disposed of during the period from the date hereof until the Closing Date
(y) in the ordinary course of business and not in violation of the terms of
this Agreement, or (z) as otherwise expressly permitted by the terms of this
Agreement;
(iv) all losses, loss-carry forwards and rights to receive refunds,
credits and loss-carry forwards with respect to any and all Taxes of any
Seller or Taxes of landlords payable by the Sellers pursuant to the Leases,
incurred or accrued on or prior to the Closing Date, including, but not
limited to, interest receivable with respect thereto;
-8-
(v) any rights, claims, credits, allowances, rebates, causes of action
(including, but not limited to, all causes of action arising under Sections
510, 544 through 550 and 553 of the U.S. Bankruptcy Code or under similar
state laws, including, but not limited to, fraudulent conveyance claims, and
all other causes of action of a trustee and debtor-in-possession under the
U.S. Bankruptcy Code) or rights of set-off (collectively, "Claims") of any
Seller or any Affiliate of any Seller arising out of or directly relating to
the Bankruptcy Cases, including, but not limited to, any claims (as defined
in Section 101(5) of the U.S. Bankruptcy Code) filed, scheduled or otherwise
arising in the Bankruptcy Cases, except for Claims arising after the
Petition Date (or, in the case of Livent International, after the
International Petition Date) in the ordinary course of business and relating
to any of the Purchased Assets or the Assumed Liabilities;
(vi) corporate seals, minute books, charter documents, corporate stock
record books, registers of other securities, original tax and financial
records and such other books and records as pertain to the organization,
existence, share capitalization or debt financing of the Sellers, and any
files, books and records relating to the Sellers' Affiliates (collectively,
the "Corporate Documentation");
(vii) all claims or causes of action (whether asserted or unasserted),
demands, judgments and pending litigation (other than the Claims) as to
which any Seller is a claimant, plaintiff, defendant, judgment creditor or
beneficiary arising prior to the Closing Date, including, but not limited
to, any claims against any legal, accounting, underwriting, financial
advisory or other professional firm retained by any Seller, any of Sellers'
lenders, Xxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxx and any derivative actions
(including, but not limited to, the proceeding pending in the Canadian
Bankruptcy Court between Livent and Xxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxx,
Xxxxxx Xxxxx and Xxxx Commodity Services Limited); other than those claims,
demands, causes of action, judgments and pending litigation arising after
the Petition Date (or, in the case of Livent International, after the
International Petition Date) in the ordinary course of business and relating
to any of the Purchased Assets or Assumed Liabilities;
(viii) any rights of the Sellers under this Agreement, the other
Transaction Documents or any other agreement between any Seller and the
Buyer arising out of the transactions contemplated hereby and thereby;
(ix) any property, casualty, workers' compensation or other insurance
policy or related insurance services contract relating to any Seller or any
of its Affiliates or any of such Seller's property and any rights
(including, but not limited to, prepaid premiums and deposits) of any Seller
or any of its Affiliates under such insurance policy or contract, other than
rights under such insurance policies or contracts with respect to any
Assumed Liability or any casualty affecting any of the Purchased Assets if
and to the extent purchased (other than prepaid premiums and deposits); and
any award in respect of condemnation, eminent domain or expropriation
(except to the extent assigned to the Buyer pursuant to Section 9.3 hereof);
(x) the assets listed on Schedule 1.2 and the Excluded Contracts;
-9-
(xi) all claims and other amounts due to the Sellers from any of their
Affiliates or any of Sellers' or their Affiliates' past or present
employees;
(xii) the Vancouver Ford Centre Theater, located in Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxx, the land upon which it is located (including the land
described on Schedule 1.3A hereto (but in no event shall such excluded land
include the Land)) and all agreements, contracts, instruments, rights,
interests, licenses and permits, equipment and other property specifically
related thereto (but other than the Assumed Contracts) and including any
related claims;
(xiii) any interest of any Seller in the North York Ford Centre
Theater, located in Xxxxxxx, Xxxxxxx, Xxxxxx, the land upon which it is
located (including the land described on Schedule 1.3B hereto (but in no
event shall such excluded land include the Land)) and all agreements,
contracts, instruments, rights, interests, licenses and permits, equipment
and other property specifically related thereto (but other than the Assumed
Contracts) and including any related claims;
(xiv) the Livent Headquarters, the land upon which it is located
(including the land described on Schedule 1.3C hereto (but in no event shall
such excluded land include the Land)) and all agreements, contracts,
instruments, rights, interests, licenses and permits, equipment and other
property specifically related thereto (including, without limitation, the
parking areas and/or facilities described on Schedule 1.3C hereto but other
than the Assumed Contracts) and including any related claims;
(xv) those certain parcels of real estate, located in Xxxxxxx, Xxxxxxx,
Xxxxxx, as more particularly described in Schedule 1.3D hereto (the "DRVS
Land") including, without limitation, all improvements, if any, thereon and
all agreements, contracts, instruments, rights, interests, licenses and
permits, equipment and other property specifically related thereto (but
other than the Assumed Contracts) and including any related claims and any
residual density rights in excess of the density existing on the Land on
which the Pantages Theater is located as of the date hereof;
(xvi) all Ticketmaster Receivables;
(xvii) all contracts, intellectual property and other rights,
agreements, relationships, branded inventory and merchandise, sets,
costumes, other physical production elements, receivables and other assets
relating to: Showboat (except such physical production elements contemplated
by any agreement with Network Presentation LLC for its non-equity tour of
Showboat and any related receivables), Barrymore, Parade, Kiss of the Spider
Woman, Xxxxxx and the Amazing Technicolor Dreamcoat, Sunset Boulevard, Music
of the Night, Candide and Aspects of Love; and
(xviii) all inventory and accounts receivable (except as relates to
Network Presentation LLC, as described in the preceding clause) related to
any of the foregoing Excluded Assets.
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"Excluded Contracts" shall mean those agreements, contracts,
instruments and rights of the Sellers (i) that specifically relate to any of the
Excluded Assets or (ii) are set forth on Schedule 1.4.
"Excluded Liabilities" -- See Section 2.5.
"Executory Contracts" shall mean all Contracts entered into by one or
more of the Sellers (other than Livent International) before the Petition Date
and, in the case of Livent International, before the International Petition
Date, and which, in each case, are executory or unexpired as of the Closing
Date.
"Files and Records" shall mean all files and records, whether in hard
copy, magnetic format or other retrievable or deliverable form, of the Sellers
specifically relating to the Purchased Assets or the Assumed Liabilities (but
only to the extent they are in the possession, or under the control, of the
Sellers), except for those that specifically relate to the Excluded Assets.
"FIRPTA Certificate" shall mean a certification, made under penalties
of perjury and in compliance with the treasury regulations under Section 1445 of
the Code, that such Person is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Code and the
treasury regulations promulgated thereunder).
"GAAP" shall mean Canadian generally accepted accounting principles, as
in effect from time to time.
"Governmental Authority" shall mean any agency, division, subdivision,
audit group, regulatory arm, instrumentality or procuring office of the
Government of the United States, the states, counties, cities or other local
political subdivisions thereof, Canada, the provinces thereof, municipal or
local government or any other foreign government, including but not limited to,
the employees or agents thereof.
"Hazardous Materials" shall mean and include any substance which is
deemed to be hazardous, toxic, hazardous waste, radioactive or a contaminant
under any Environmental Law including, but not limited to, "hazardous
substances" as defined by the Comprehensive Environmental Response Compensation
and Liability Act, as amended ("CERCLA"), a "hazardous waste" as defined by the
Resource Conservation and Recovery Act ("RCRA"), as amended, polychlorinated
byphenyls, petroleum products or byproducts, solvents, pesticides or asbestos.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"ICA" shall mean the Investment Canada Act, as amended.
"Improvements" shall mean the buildings, improvements, fixtures and
structures located on the Land and/or demised under the Leases.
"Information Package" -- See Section 4.7.
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"Initial Cash Amount" -- See Section 2.2(a).
"Intangible Assets" shall mean all intangible personal property rights
of the Sellers in connection with the Business and the Purchased Assets
(including, without limitation, air rights, development rights and entitlements
and other intangible property relating to the Purchased Real Property and the
Leased Real Property) and all goodwill of the Sellers relating to the Business,
except for those that are Excluded Assets, if any.
"Intellectual Property" shall mean all trademarks, service marks, trade
names, domain names, websites, brands, private labels, patents, copyrights,
know-how, trade dress, or trade secrets and licenses, promotional and
advertising materials, and the goodwill associated therewith, including, without
limitation, the Livent Trademarks, and all rights with respect to any of the
foregoing that any Seller owns or possesses relating to any of the Purchased
Assets or the operations of the Business, except for those that are Excluded
Assets, if any.
"International Petition Date" -- See the Recitals hereto.
"Inventory" means all inventory of the Sellers relating to the
Business, including, (i) all the finished goods, raw materials, work in progress
and inventoriable supplies owned by the Sellers on the Closing Date for use in
the operations of the Business and (ii) any and all rights of the Sellers to the
warranties received from their suppliers, manufacturers, distributors or other
vendors with respect to such inventory (to the extent assignable) and related
claims, credits, rights of recovery and set-off with respect thereto; except, in
each case, for those that are Excluded Assets, if any.
"Knowledge of the Sellers," "Sellers' Knowledge," "known" to the
Sellers, "best of knowledge" of the Sellers, matters of which the Sellers are
"aware" and language of similar import shall mean all matters known by Messrs.
Xxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx and Xxxx Xxxxxxxxx, in each
case after reasonable due diligence and inquiry of appropriate individuals
(including Xxxxxx Xxxxxxxxx, the managers of the theaters included in the
Purchased Assets and the managers of the Sellers responsible for managing each
of the Productions).
"Land" shall mean, except as provided in and solely in connection with
Section 4.16, the parcels of land described in Schedule 4.11(a) hereto and the
parcels of land demised under the Leases, in each case, together with all of the
Sellers' right, title and interest in and to all rights of way, easements,
reciprocal easement agreements, reservations, privileges and appurtenances, and
other rights and interests of the Sellers appurtenant to the Land, including,
without limitation, all right, title and interest of the Sellers, if any, in and
to (a) the strips and gores, streets, highways, other public ways and alleys,
opened or proposed, abutting, in front of or adjoining or adjacent thereto (and
all right, title and interest, if any, of Sellers in and to any unpaid award for
any damage to the Premises by reason of change of grade of any street or highway
or other public way), (b) any water, oil, gas and mineral rights owned by, or
leased to, the Sellers and relating to the Land and (c) all off-street parking
rights and spaces relating to the Land.
-12-
"Law" -- See Section 4.4.
"Leased Real Property" shall mean all of the Sellers' right, title and
interest, as tenant, under the Leases in and to the Land described thereunder
and the Improvements on such Land and/or demised under the Leases.
"Leases" shall mean those leases more particularly described in
Schedule 4.11(c) attached hereto.
"Liability" shall mean any liability or obligation (whether known or
unknown, asserted or unasserted, fixed or contingent, accrued or unaccrued,
liquidated or unliquidated, secured or unsecured, and whether due or to become
due), including, but not limited to, any liability for Taxes.
"Licenses and Permits" shall mean the government permits,
authorizations and licenses issued by any national, state, provincial, local or
other domestic or foreign governmental authority used in the Business, including
but not limited to, those listed on Schedule 1.5, except for those that are
Excluded Assets, if any, and except for liquor licenses.
"Lien" shall mean any mortgage, charge, pledge, security interest,
option, easement, recorded or registered, as applicable, covenant, condition or
restriction, right of way, judgment lien, tax lien, mechanic's, materialman's,
carrier's, worker's, repairer's, construction and similar lien and statutory or
other lien, conditional sale agreement, or other encumbrance or, other than in
the case of the Premises, interest of any nature whatsoever.
"Livent" -- See the Preamble hereto.
"Livent Chicago" -- See the Preamble hereto.
"Livent Headquarters" shall mean the office building of Livent located
at 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, Xxxxxx, which premises are used as its
corporate headquarters and house certain of the Sellers' managerial,
administrative and other employees.
"Livent International" -- See the Preamble hereto.
"Livent N.Y." -- See the Preamble hereto.
"Livent Trademarks" shall mean all of the Sellers' rights, title and
interests in all registered or unregistered trademarks, service marks, trade
names and domain names, together with the goodwill associated therewith, for the
name "Livent" or any variation or derivative thereof.
"Livent U.S." -- See the Preamble hereto.
"Losses" -- See Section 11.2.
-13-
"Mandatory Cure Items" shall mean each of the following Title Defects
(but only if such Title Defects are of record or on file, as applicable, in the
applicable recording or filing office, against the parcel of Material Real
Property in question or, in the case of Material Real Property located in
Canada, registered against Livent in the sheriff's office in the county or
district where the Material Real Property is located, whether described in a
Title Commitment, or first arising or first disclosed by the Title Company or
otherwise to the Sellers and the Buyer after the date of the Title Commitment
for the parcel of Material Real Property in question and prior to the Closing
Date: (a) any mortgage and assignment of leases and rents, and UCC-1 and
Personal Property Security Act ("PPSA") financing statements relating thereto
other than the Chicago Mortgage and any assignments of leases and UCC and PPSA
financing statements relating thereto; (b) any lien, encumbrance, covenant,
easement or restriction voluntarily created by the Sellers after the date of
this Agreement; (c) judgment liens against the Sellers, and tax liens and
brokers' liens; (d) any mechanics', materialmens', carriers', workers',
repairers', construction and similar liens; and (e) all other liens, judgments
and encumbrances that can be cured or removed by the payment of a liquidated sum
of money not to exceed $600,000 in the aggregate for all Material Real Property.
"Material Assumed Contracts" shall mean the following Assumed
Contracts: (i) all Rights Agreements with respect to Fosse, Phantom of the Opera
and Ragtime and all other Assumed Contracts that are necessary for the operation
of such Productions, (ii) all Rights Agreements with respect to Xxx Xxxx and
Seussical and (iii) all Assumed Contracts that affect the Premises, including
those running with the Land.
"Material Real Property" shall mean, collectively, the Pantages
Theater, the Chicago Theater and the New York Theater.
"New York Chattel Mortgage" shall mean that certain Master Lease of
Personal Property #3267, dated September 18, 1997, by and between, Charter
Financial, Inc. and Livent N.Y. and all ancillary documents and agreements
related thereto.
"New York Fixture Lien" shall mean the Lien, if any, arising under or
on account of the New York Chattel Mortgage.
"New York Master Lease" shall mean that certain Amended and Restated
Agreement of Master Lease, dated as of December 13, 1996, as amended by that
certain Letter Agreement, dated June 4, 1998, as further amended by that certain
Letter Agreement, dated June 16, 1998, as further amended by that certain
Amendment to Amended and Restated Agreement of Master Lease, dated as of June
30, 1998, as further amended by that certain Second Amendment to Amended and
Restated Agreement of Master Lease, dated as of November 5, 1998, by and between
42nd St. Development Project, Inc., as landlord, and The New 42nd Street, Inc.,
as tenant.
"New York Sublease" shall mean that certain Agreement of Sublease made
by and between The New 42nd Street, Inc., as landlord, and Livent N.Y., as
tenant, dated as of June 14, 1996, as amended by that certain Consent and
Depositary Agreement, dated as of February 22, 1999, made by 42nd St.
Development Project, Inc., The New 42nd Street, Inc. and Livent N.Y.,
-14-
and that certain Stipulation and Order Respecting Assumption and Assignment of
Ford Center Sublease by and among The New 42nd Street, Inc., Livent N.Y. and
Xxxxxx Xxxxxx & Co., L.P., for itself and certain funds under its management,
and entered by the U.S. Bankruptcy Court in Xxxx Xx. 00X 00000 (XXX), on
December 30, 1998, as modified by that certain Final Order Pursuant to
Bankruptcy Code Sections 105, 364 and 365 and Bankruptcy Rules 2002 and 4001,
entered by the U.S. Bankruptcy Court, in Xxxx Xx. 00X 00000 (XXX), on December
30, 1998.
"New York Theater" shall mean Livent N.Y.'s leasehold interest in the
real property and all Improvements thereon commonly known as the Ford Center for
the Performing Arts, located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX.
"No Action Letter" -- See Section 6.10.
"Non-Interference Agreement" shall mean that certain non-interference
agreement dated May 20, 1999 by and among Xxxxxx Xxxx, Livent and Livent (U.S.).
"NYPCO" -- See Section 9.6.
"OBCA" -- See the Recitals hereto.
"Order" shall mean any order, writ, judgment, award, injunction or
decree of any court or other Governmental Authority of competent jurisdiction.
"ordinary course of business" when used in this Agreement with respect
to any of the Sellers, shall mean in the ordinary course of such Seller's
business from and after the Petition Date.
"Pantages Development Site" shall mean the lands described as the Lot
on Plan attached to Site Specific Zoning Amendment By-law No. 670-91, as amended
by By-law 1997-0202.
"Pantages Naming Shortfall" shall mean the positive difference, if any,
between $600,000 and the amount of revenue recognized with respect to the 12
month period following the end of the quarter in which the Closing Date occurs
(the "Pantages Naming Period") by the Buyer in its financial statements in
accordance with U.S. GAAP with respect to the naming rights for the Pantages
Theater.
"Pantages Theater" shall mean that the real property described in
Schedule 4.11(a)(ii) and all Improvements thereon commonly known as the Pantages
Theater, located at 000 Xxxxx Xxxxxx and 232 and 000 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx, Xxxxxx.
"Pantages Ticket Surcharge" shall mean the obligation of Livent to
collect on behalf of The Corporation of the City of Toronto at the time of the
ticket sale and remit to The Corporation of the City of Toronto a ticket
surcharge of 60(cent)per ticket, plus Goods and Services Tax, in respect of
public performances at the Pantages Theater, all as is more particularly set
forth in Amendment No. 6 to the Master Agreement made as of January 1, 1997
between Livent and The Corporation of the City of Toronto.
-15-
"Permitted Closing Liens" shall mean (i) Liens for Taxes, assessments,
local improvement rates, utilities, vault and water and sewer charges or other
governmental or quasi-governmental charges, in each case that are not yet due
and payable, (ii) revocability or lack of right to maintain vaults, coal chutes,
excavations or sub-surface equipment beyond the line of any of the Premises,
(iii) the terms, provisions and conditions of the Leases, (iv) the state of
facts reflected on the surveys listed on Schedule 1.7 hereto and any additional
state of facts an accurate up-to-date survey and inspection would disclose to
the extent such additional state of facts does not render title unmarketable,
(v) the rights of tenants or licensees as tenants or licensees only under the
Space Leases, (vi) Liens and other matters set forth on Schedule 1.8(b) hereto,
(vii) the title, rights and interest of the lessor under the New York Sublease,
and the title, rights and interest of the lessor and of the lessee under the New
York Master Lease and (viii) the title, rights and interest of the lessor under
each Canadian Lease and any liens, encumbrances or other matters to which the
title or interest of such lessor may be subject.
"Permitted Liens" shall mean (i) Liens for Taxes, assessments, local
improvement rates, utilities, vault and water and sewer charges or other
governmental or quasi-governmental charges, in each case that are not yet due
and payable, (ii) Liens that are discharged at or prior to the Closing and any
other Lien which is removed from any of the Purchased Assets, pursuant to, or by
virtue of, the U.S. Order or the Canadian Order, (iii) revocability or lack of
right to maintain vaults, coal chutes, excavations or sub-surface equipment
beyond the line of any of the Premises, (iv) the terms, provisions and
conditions of the Leases, (v) the state of facts reflected on the surveys listed
on Schedule 1.7 hereto and any additional state of facts an accurate up-to-date
survey and inspection would disclose to the extent such additional state of
facts does not render title unmarketable, (vi) the rights of tenants or
licensees as tenants or licensees only under the Space Leases, (vii) Liens and
other matters set forth on Schedule 1.8(a) hereto, (viii) the title, rights and
interest of the lessor under the New York Sublease, and the title, rights and
interest of the lessor and of the lessee under the New York Master Lease and
(ix) the title, rights and interest of the lessor under each Canadian Lease and
any liens, encumbrances or other matters to which the title or interest of such
lessor may be subject.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, estate, trust, unincorporated
organization, limited liability company or Governmental Authority or any group
of the foregoing acting in concert.
"Petition Date" -- See the Recitals hereto.
"PPSA" -- See definition of Mandatory Cure Items.
"Premises" shall mean the Purchased Real Property and the Leased Real
Property.
"Pre-Production Expenditures" shall mean the aggregate expenditures to
develop the property rights (including payments to authors, composers and the
like), casting, rehearse, conduct readings and workshops, build the physical
production, advertise, market and promote the Productions and similar
pre-production expenditures, in each case prior to their first paid performance.
-16-
"Proceedings" -- See Section 4.8.
"Productions" shall mean the following live theatrical productions
produced, presented, licensed or under development by the Sellers that comprise
part of the Purchased Assets: "Fosse," "Xxx Xxxx," "Phantom of the Opera,"
"Playhouse Creatures," "Ragtime," "Xxxxx Xxxxxxxx," "Seussical" and "Sweet Smell
of Success."
"Property Permits" shall mean all variances, special use permits,
certificates of occupancy, permits, authorizations and licenses issued by, or
which are required to be issued by, any Governmental Authority in connection
with the Sellers' ownership or leasing, as the case may be, of the Premises,
operation of the Business at the Premises and/or the construction, use,
occupancy and maintenance of all or any portion of the Premises other than
Excluded Assets and liquor licenses.
"Purchase Orders" shall mean the Sellers' outstanding purchase orders,
contracts or other commitments to suppliers of goods and services for materials,
supplies, services or other items used in the Business.
"Purchase Price" -- See Section 2.2(a).
"Purchase Price Adjustment" -- See Section 2.4(d).
"Purchased Assets" shall mean all of the tangible and intangible assets
of the Sellers existing on the Closing Date that relate to the Business (which
assets comprise substantially all of the Sellers' assets), including, but not
limited to, the following: Cash and Cash Equivalents; the Accounts Receivable;
Construction Materials; the rights of the Sellers under the Assumed Contracts;
Equipment and Machinery; Files and Records; Intellectual Property; Intangible
Assets; all subscription lists (including the means to generate electronic
versions thereof, to the extent available), Inventory; Licenses and Permits (to
the extent transferable by the Sellers); Premises; Sellers' personal property
relating to the Business, the prepaid expenses set forth on Schedule 1.1; any
Claims arising after the Petition Date or the International Petition Date, as
applicable, in the ordinary course of business and relating to any of the
Purchased Assets or Assumed Liabilities; and any claims, demands, causes of
action, judgments and pending litigation (other than the Claims) as to which any
Seller is or could be a claimant, plaintiff, judgment creditor or beneficiary
arising after the Petition Date or the International Petition Date, as
applicable, in the ordinary course of business and relating to any of the
Purchased Assets or Assumed Liabilities; provided, however, that notwithstanding
the foregoing, the Purchased Assets shall not include any Excluded Assets.
"Purchased Real Property" shall mean all of the Sellers' right, title
and interest in and to the fee simple title to the Land described (including the
legal description) in Schedule 4.11(a) attached hereto and made a part hereof
and the Improvements thereon.
"Put Amount" shall mean the maximum amount that from time to time may
be put to the Buyer pursuant to the Put Obligation.
-17-
"Put Obligation" shall mean the non-interest bearing obligation of the
Buyer, in substantially the form attached to Exhibit C.
"RCRA" -- See the definition of Hazardous Materials.
"Reciprocal Agreement" shall have the meaning ascribed thereto in the
Dundee Term Sheet.
"Redevelopment Agreement" shall mean that certain Block 36, North Loop
Project Redevelopment Agreement Oriental Theater, dated as of April 29, 1996,
made by and between the City of Chicago and Livent Chicago.
"Required Consents" shall mean the Consents to the Material Assumed
Contracts, whether pursuant to the U.S. Order, the Canadian Order or the
consent, authorization or waiver of the other party to such Contract.
"Reorganization Plan" shall mean the Plan of Reorganization to be filed
by the Sellers under Chapter 11 of the U.S. Bankruptcy Code.
"Rights Agreements" shall mean all contracts, agreements and other
undertakings by or for the benefit for any Seller relating, directly or
indirectly, to the Productions, whether they be rights of production,
presentation, license, development, or other ancillary or subsidiary rights, and
all option agreements, rights agreements, license agreements, merchandising
agreements, development agreements, and agreements providing for ancillary,
subsidiary or other rights in respect of such properties, and the Sellers'
limited partnership interests in The Jekyll Company Limited Partnership and The
Swan Lake Company Limited Partnership, New York limited partnerships; provided,
that "Rights Agreements" shall not include any Excluded Assets. All Rights
Agreements shall be separately identified and set forth in Schedules 4.14(a)(i)
and 4.14(a)(ii) attached hereto.
"Royalty Payment Release" shall mean (i) an order of the U.S.
Bankruptcy Court providing that in the event that Xxxxxx Xxxx is granted,
pursuant to the terms of the Non-Interference Agreement, an allowed
administrative claim against Livent and Livent (U.S.) equal to $350,000 (less
any amounts paid to Xxxxxx Xxxx pursuant to the terms of the Non-Interference
Agreement), Xxxxxx Xxxx shall not have an enforceable claim for or entitlement
to Royalty Payments (as used in the Non-Interference Agreement); (ii) a written,
unconditional and irrevocable waiver of entitlement to Royalty Payments executed
by Xxxxxx Xxxx; or (iii) the failure of the U.S. Bankruptcy Court to approve the
Non-Interference Agreement.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act.
"Sales and Ticket Orders" shall mean all of the Sellers' sales orders,
contracts or other commitments to purchasers of goods and services, including,
but not limited to, all ticket sales of the Business.
"SEC" shall mean the U.S. Securities and Exchange Commission.
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"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller Balance Sheet" -- See Section 4.7.
"Seller Material Adverse Effect" shall mean a material adverse effect
on the physical or financial condition or operations of the Business or the
Purchased Assets, as the case may be, taken as a whole or on the ability of the
parties hereto to consummate the transactions contemplated by the Transaction
Documents.
"Sellers" -- See the Preamble hereto.
"Sellers' Accounts" -- See Section 2.7(a).
"Sellers' Ticket Agents" shall mean any agent or other Person acting
for or on behalf of the Sellers engaged in the activity of selling tickets or
procuring Sales and Ticket Orders, including, without limitation, Ticketmaster,
Inc.
"Sellers' Transaction Documents" shall mean this Agreement, the
Exhibits and Schedules thereto and all other agreements, certificates or
documents delivered by the Sellers in connection with the consummation of the
transactions contemplated herein, including, without limitation, the Assignment
and Assumption Agreement, the Assignment of Lease, the Bills of Sale, the
Chicago Theater Deed, the Escrow Agreements and the Registration Rights
Agreement.
"Seussical" shall mean the musical play written by Xxxx Xxxxxx and
Xxxxxxx Xxxxxxxx, based on the works of Xx. Xxxxx.
"Seussical Condition" shall be satisfied when the Sellers have obtained
and delivered to the Buyer (i) an agreement with the underlying rightsholder
(currently, the Seuss estate), on terms reasonably acceptable to the Buyer,
which approves the transfer of the underlying rights in and to Seussical to the
Buyer and extends the deadline to commence the production of Seussical no
earlier than December 1, 2000, (ii) agreements with Xxxx Xxxxxx and Xxxxxxx
Xxxxxxxx, who together comprise the bookwriters, composer and lyricist of
Seussical, on terms reasonably acceptable to the Buyer, approving the transfer
of their Seussical rights to the Buyer and (iii) a certification by an executive
officer of Livent that, to the Sellers' knowledge, there are no defaults or
adverse claims under such agreements.
"Seussical Payment" -- See Section 2.2(a).
"Soil Shifting" -- See Section 9.8(a).
"Space Leases" shall mean all leases, licenses and other occupancy
agreements for space at the Premises under which one of the Sellers is the
lessor, licensor or grantor, as more particularly described in Schedule 4.11(d)
attached hereto.
"Structural Support Escrow Amount" -- See Section 9.8(c).
"Structural Support Work" -- See Section 9.8(b).
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"Support Work Documents" -- See Section 9.8(b).
"Taxes" shall mean for all purposes of this Agreement all taxes,
charges, fees, levies, deficiencies and/or other assessments, however
denominated, including, but not limited to, any interest, penalties or additions
to tax that may become payable in respect thereof, imposed by any Governmental
Authority, which taxes shall include all income taxes, payroll and employee
withholding taxes, unemployment insurance, employer health taxes, social
security, provincial and federal governmental pension plan taxes and payments,
sales and use taxes, goods and services taxes, excise taxes, franchise taxes,
capital gains taxes, gross receipts taxes, mortgage taxes, occupation taxes,
real and personal property taxes and assessments, stamp taxes, transfer taxes,
workmen's compensation taxes and other obligations of the same or a similar
nature, whether arising before, on or after the Closing; and "Tax" shall mean
any one of them.
"Tax Return" shall mean any return, declaration, report, information
return, claim for refund or credit or statement, including, without limitation,
any consolidated, combined or unitary return or other document (including any
related or supporting information), filed or required to be filed with any
Governmental Authority in connection with the determination, assessment,
collection, payment or refund of Taxes or the administration of any Laws or
administrative requirements relating to Taxes.
"Ticketmaster Receivables" shall mean accounts receivable relating to
Advance Ticket Sales by, or ticket rebates from, Ticketmaster, Inc.
"Title Commitment" -- See Section 9.1(a).
"Title Company" shall mean Chicago Title Insurance Company or another
reputable title insurance company.
"Title Defects" shall mean any mortgage, deed of trust, mechanic's,
materialman's, carrier's, worker's, repairer's, construction and similar lien,
statutory and other lien, pledge, security interest, lease, judgment, charge,
option, conditional sale agreement, right of first refusal, easement,
restrictive covenant, right of way, encroachment, encumbrance or survey defect
or any other instrument affecting the use, ownership, development, operation or
disposition of any Material Real Property that is recorded in the appropriate
recorder's office or, in the case of Material Real Property located in Canada,
registered against Livent in the sheriff's office in the county or district
where the Material Real Property is located, as applicable, in each case other
than Permitted Closing Liens.
"Transaction Documents" shall mean, collectively, the Buyer Transaction
Documents and the Sellers' Transaction Documents.
"Transaction Taxes" -- See Section 8.1.
"Transferred Employees" -- See Section 7.1(a).
"Union Employees" -- See Section 7.1(a).
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"Union Employment Agreements" -- See Section 7.1(a).
"U.S. Bankruptcy Cases" -- See the Recitals hereto.
"U.S. Bankruptcy Code" -- See the Recitals hereto.
"U.S. Bankruptcy Court" -- See the Recitals hereto.
"U.S. GAAP" -- See Section 5.7.
"U.S. Order" shall mean an order of the U.S. Bankruptcy Court obtained
in all material respects in the form attached hereto as Exhibit D, which form is
acceptable to Buyer, which, inter alia: (i) approves this Agreement and all
material terms and conditions hereof; (ii) provides that the Purchased Assets
are sold free and clear of all Liens pursuant to Sections 363 (b) and (f) of the
U.S. Bankruptcy Code, except to the extent of any Permitted Closing Liens; (iii)
provides that the Buyer is entitled to all of the protections of Section 363(m)
of the U.S. Bankruptcy Code as a good faith purchaser; (iv) provides for the
assumption and assignment by the Sellers to the Buyer of the Assumed Contracts;
(v) provides that the sale is exempt from transfer taxes to the fullest
permitted extent pursuant to Section 1146(c) of the U.S. Bankruptcy Code; and
(vi) provides that the Buyer shall be liable from and after the Closing solely
for all Assumed Liabilities but that the Buyer shall not be liable for any other
liabilities of the Sellers, including, without limitation, the Excluded
Liabilities.
"Violation" shall mean a condition that constitutes a violation of any
Law or Order regulating the ownership or leasing, as applicable, reconstruction,
repair, maintenance, operation or use of any of the Premises.
"Violation Notification" shall mean any written notification of a
Violation issued by a Governmental Authority or a Title Commitment (or the
written results of a municipal search) delivered by the Title Company to the
Sellers that references a Violation that is of record or filed in the office of
the applicable municipal department with respect to the applicable Material Real
Property and is not a Permitted Closing Lien.
"Warrants" -- See Section 2.9.
"Welfare Type Plans" -- See Section 7.3.
ARTICLE II.
PURCHASE AND SALE
SECTION 2.1. PURCHASE AND SALE OF PURCHASED ASSETS. (a) Subject to the
terms and conditions herein set forth, the Sellers shall sell, convey, transfer,
assign and deliver to the Buyer, or its designeees, and the Buyer shall purchase
and accept from the Sellers, on the Closing Date, all right, title and interest
of the Sellers in and to the Purchased Assets free and clear of all Liens other
than Permitted Closing Liens, wherever located.
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The Buyer expressly agrees and understands that the Sellers shall not
sell, convey, transfer, assign or deliver to the Buyer, and the Buyer shall not
purchase, any of the Excluded Assets.
SECTION 2.2. PURCHASE PRICE.
(a) Subject to the terms and conditions of this Agreement, in
consideration of the aforesaid sale, conveyance, transfer, assignment and
delivery of the Purchased Assets, the Buyer agrees to assume the Assumed
Liabilities and to pay to Livent U.S., as agent for the Sellers, (i) the amount
of $77,800,000 in cash (the "Initial Cash Amount"), subject to preliminary
adjustment at the Closing as provided in Section 2.3(b) on the basis of the
Estimated Closing Date Balance Sheet, and, as set forth in Sections 2.3(c),
2.3(d), 2.3(e), 2.3(f), 9.1(c), 9.1(d), 9.2, 9.3 and 9.6, and subject to final
adjustment after the Closing as provided in Section 2.4 on the basis of the
Closing Date Balance Sheet (as so adjusted, the "Adjusted Cash Purchase Price");
(ii) if the Seussical Condition is satisfied on or prior to the Closing Date,
the amount of $5,000,000 in cash (including if such payment is made pursuant to
Section 2.2(d) below, the "Seussical Payment"); (iii) the Put Obligation and
(iv) the Warrants as more particularly set forth in Section 2.7 (the Adjusted
Cash Purchase Price, the Seussical Payment, the Put Obligation, the Warrants and
the Assumed Liabilities are sometimes collectively referred to herein as, the
"Purchase Price").
(b) On the Closing Date, the Buyer shall pay to Livent U.S., as agent
for the Sellers, an amount (the "Estimated Purchase Price") equal to the Initial
Cash Amount, as adjusted pursuant to Sections 2.3(c), 2.3(d), 2.3(e), 2.3(f),
9.1(c), 9.1(d), 9.2, 9.3 and 9.6, plus, if the Seussical Condition has been
satisfied on or prior to the Closing Date, the amount of $5,000,000 in cash;
plus (i) the Estimated Price Increase (as defined in Section 2.3(b)), if any,
or, alternatively, less (ii) the Estimated Price Decrease (as defined in Section
2.3(b)), if any.
(c) Upon the determination of the Adjusted Cash Purchase Price, as
finally determined in accordance with Section 2.4,
(A) either (i) the Buyer shall pay to the Sellers the amount of the
Final Purchase Price Increase (as defined in Section 2.4(a)) or,
alternatively, (ii) the Sellers shall pay to the Buyer the amount of the
Final Purchase Price Decrease (as defined in Section 2.4(a)) in accordance
with the terms of this Agreement; and
(B) either (i) the Buyer shall pay to the Sellers the amount of the
Final Advance Ticket Sales Decrease (as defined in Section 2.4(b)) or,
alternatively, (ii) the Sellers shall pay to the Buyer the amount of the
Final Advance Ticket Sales Increase (as defined in Section 2.4(b)) in
accordance with the terms of this Agreement.
(d) If the Seussical Condition has not been satisfied on or prior to
the Closing Date but has been satisfied on or prior to February 1, 2000, the
Buyer, within five Business Days after the Sellers have notified the Buyer in
writing that the Seussical Condition has been satisfied and the Sellers have
provided Buyer with evidence, to the Buyer's reasonable satisfaction, that
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such condition has been satisfied, shall pay to Livent U.S., as agent for the
Sellers, the amount of $5,000,000 in cash.
SECTION 2.3. CLOSING PURCHASE PRICE ADJUSTMENTS.
(a) On the day which is five (5) Business Days prior to the Closing
Date, the Sellers shall deliver to the Buyer (i) a special purpose balance sheet
listing certain line items in substantially the form attached hereto as Schedule
2.3(a) (the "Estimated Closing Date Balance Sheet") based upon the Sellers'
books and records and prepared in accordance with GAAP applied on a consistent
basis with prior periods as restated in a manner consistent with the Seller
Balance Sheet, and the amounts thereof, to be included on the Closing Date
Balance Sheet and (ii) a certificate of the Sellers, duly executed by the chief
financial officer of Livent, stating that the Estimated Closing Date Balance
Sheet has been prepared in good faith, has been prepared in accordance with GAAP
applied on a consistent basis with prior periods as restated in a manner
consistent with the Seller Balance Sheet, and reflects the Sellers' best
estimate of, and to the best knowledge of the Sellers, fairly presents each of
the items, and the amounts thereof, to be included on the Closing Date Balance
Sheet.
(b) If the amount (the "Net Amount") of the aggregate assets less the
aggregate liabilities listed under "Pro Forma Net Working Capital Adjustment"
shown on the Estimated Closing Date Balance Sheet, is greater than the Net
Amount with respect to the corresponding line items shown on the Seller Balance
Sheet, the payment of the Initial Cash Amount to the Sellers on the Closing Date
shall be increased, as a preliminary adjustment to the Initial Cash Amount, as
provided in Section 2.2(b), by the amount of such excess (the "Estimated Price
Increase"). If the Net Amount as shown on the Estimated Closing Date Balance
Sheet is less than the Net Amount with respect to the corresponding line items
shown on the Seller Balance Sheet, the payment of the Initial Cash Amount to the
Sellers on the Closing Date shall be decreased, as a preliminary adjustment to
the Initial Cash Amount, as provided in Section 2.2(b), by the amount of such
deficiency (the "Estimated Price Decrease").
(c) At the Closing, the Sellers shall deliver (i) a statement setting
forth, as of the date five (5) Business Days prior to the Closing Date (the
"Pre-Closing Date"), all Advance Ticket Sales, and an accounting of all ticket
liabilities and all proceeds received through said Pre-Closing Date by the
Sellers and Sellers' Ticket Agents (the "Pre-Closing Advance Ticket Sales
Statement") and (ii) a certificate of the Sellers, duly executed by the chief
financial officer of Livent, stating that the Pre-Closing Advance Ticket Sales
Statement has been prepared in good faith, and reflects the Sellers' best
estimate of the Advance Ticket Sales as of the Pre-Closing Date. The amount set
forth in the Pre-Closing Advance Ticket Sales Statement for ticket liabilities
in respect of Advance Ticket Sales shall be a deduction from the Initial Cash
Amount.
(d) If, at the Closing, the Pantages Theater shall be subject to or
otherwise affected by the Pantages Ticket Surcharge, $1.6 million shall be
deducted from the Initial Cash Amount. If, at the Closing, (i) the New York
Theater shall be subject to the New York Fixture Lien or (ii) the Sellers
otherwise assume and assign to the Buyer the New York Fixture Lien as a true
lease pursuant to Section 365 of the U.S. Bankruptcy Code, $3.1 million shall be
deducted
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from the Initial Cash Amount. If, at the Closing, Livent has not obtained the
Royalty Payment Release, $200,000 shall be deducted from the Initial Cash
Amount.
(e) Within five (5) days prior to the Closing, the Sellers shall
deliver to the Buyer a schedule ("Schedule of Capital and Pre-Production
Expenditures") which shall list the amounts the Sellers have spent since the
Balance Sheet Date (and estimated through the Closing Date) on capital
expenditures (up to a maximum amount of $250,000) and on Pre-Production
Expenditures made from and after May 23, 1999 (up to the maximum amount per show
listed on Schedule 2.3(e)). The aggregate of such amounts shall be an addition
to the Initial Cash Amount and shall constitute part of the Purchase Price. The
Schedule of Capital and Pre-Production Expenditures shall be delivered with a
certification, duly executed by a senior financial officer of Livent, which
certification shall constitute a representation and warranty under this
Agreement, that the information contained thereon reflects the Sellers' best
estimate of such capital and pre-production expenditures.
(f) The amount of Pre-Closing Losses (as defined below), if any, shall
be a deduction from the Initial Cash Amount. "Pre-Closing Losses" shall mean
Losses that, if identified after the Closing, would be indemnified by the
Sellers pursuant to Section 11.2 (but only (i) to the extent such Losses exceed,
in the aggregate, $250,000, as provided in Section 11.2 and (ii) up to a maximum
amount of $2,000,000), the amount of which Losses have been resolved in good
faith between the Buyer and the Sellers (or otherwise in accordance with the
terms of this Agreement) prior to the Closing.
SECTION 2.4. POST-CLOSING PURCHASE PRICE ADJUSTMENTS.
(a) Within twenty (20) days following the Closing Date, the Buyer shall
deliver to the Sellers a special purpose balance sheet with respect to those
lines items included on the Estimated Closing Date Balance Sheet as of the close
of business on the Adjustment Date prepared by the Buyer (the "Closing Date
Balance Sheet"). The Closing Date Balance Sheet shall be prepared in accordance
with GAAP, applied on a consistent basis with prior periods as restated in a
manner consistent with the Seller Balance Sheet, shall also include a separate
line item setting forth all ticket liabilities in respect of Advance Ticket
Sales and shall set forth the calculation of the Net Amount in a manner
consistent with the calculation thereof on the Seller Balance Sheet and the
Estimated Closing Date Balance Sheet as of the Closing Date. If the Net Amount,
as reflected in the Closing Date Balance Sheet, is greater than the Net Amount,
as reflected in the Estimated Closing Date Balance Sheet, the Estimated Purchase
Price shall be increased, by a final adjustment to the Estimated Purchase Price
as provided in Section 2.2(c), by the amount of such excess (the "Final Purchase
Price Increase"). If the Net Amount as reflected in the Closing Date Balance
Sheet is less than the Net Amount as reflected in the Estimated Closing Date
Balance Sheet, the Estimated Purchase Price shall be decreased, by a final
adjustment to the Estimated Purchase Price as provided in Section 2.2(c), by the
amount of such deficiency (the "Final Purchase Price Decrease").
(b) Within fifteen (15) days after the Closing, the Buyer shall prepare
and deliver to the Sellers a statement, duly executed by a senior financial
officer of the Buyer, setting forth, for the period after the Pre-Closing Date
and running through the close of business on the
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Adjustment Date, all Advance Ticket Sales, and an accounting of all ticket
liabilities and proceeds received in respect thereof by the Sellers and Sellers'
Ticket Agents (the "Post-Closing Advance Ticket Sales Statement"). If the ticket
liabilities for Advance Ticket Sales, as reflected in the Pre-Closing Date
Advance Ticket Statement, is greater than the ticket liabilities for Advance
Ticket Sales, as reflected in the Post-Closing Advance Ticket Sales Statement,
the Estimated Purchase Price shall be increased, by an adjustment to the
Estimated Purchase Price as provided in Section 2.2(c), by the amount of such
excess (the "Final Advance Ticket Sales Decrease"). If the ticket liabilities
for Advance Ticket Sales, as reflected in the Pre-Closing Advance Sales Ticket
Statement, is less than the ticket liabilities for Advance Ticket Sales, as
reflected in the Post-Closing Advance Ticket Sales Statement, the Estimated
Purchase Price shall be decreased, by an adjustment to the Estimated Purchase
Price as provided in Section 2.2(c), by the amount of such deficiency (the
"Final Advance Ticket Sales Increase").
(c) The Sellers shall have fifteen (15) days after receipt of the
Closing Date Balance Sheet and related supporting documentation (the "Dispute
Period") to dispute any item, calculation or amount, in the Closing Date Balance
Sheet (a "Dispute"). If the Sellers do not give written notice of a Dispute (a
"Dispute Notice") to the Buyer within the Dispute Period, the Closing Date
Balance Sheet shall be deemed to have been irrevocably accepted by the Sellers
in the form in which it was delivered by the Buyer and not subject to further
challenge. In the event that the Sellers do not agree with any item, calculation
or amount, reflected on the Closing Date Balance Sheet, the Sellers shall give
the Buyer a Dispute Notice within the Dispute Period, setting forth the basis of
any disagreement, and the Sellers and the Buyer shall, within ten (10) days
after receipt by the Buyer of such Dispute Notice, attempt to resolve such
Dispute and agree in writing upon the final Closing Date Balance Sheet. In the
event that the Sellers and the Buyer are unable to resolve any such Dispute
within the ten (10) day resolution period, then the certified public accounting
firm of Xxxxxx Xxxxxxxx LLP or such other national office of a certified public
accounting firm as may be mutually agreed upon by the Sellers and the Buyer (the
"Arbitrator") shall be employed as arbitrator hereunder to settle such Dispute
as soon as reasonably practicable. The parties agree that the Arbitrator shall
decide only the matters involved in the Dispute, and not any other matters. Any
arbitration pursuant to this Section 2.4(c) shall be conducted in New York, New
York in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then existing and the Arbitrator's determination with
respect to any Dispute shall be final and binding on all parties and not subject
to appeal or review (judicial or otherwise) on any ground, and judgment on the
arbitration award may be enforced in any court having jurisdiction over the
subject matter of the controversy. The Sellers and the Buyer shall each pay
one-half of the fees and expenses of the Arbitrator for the services of the
Arbitrator in the arbitration.
(d) In the event of a permitted purchase price adjustment pursuant to
this Section 2.4 (each, a "Purchase Price Adjustment"), an amount equal to the
Purchase Price Adjustment together with interest on such amount at a rate equal
to the "prime rate" of interest as published in the Wall Street Journal from
time to time, from the Closing Date to the payment date, shall be paid in
accordance with the provisions of this Agreement and the Escrow Agreements.
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SECTION 2.5. ASSUMPTION OF LIABILITIES. From and after the Closing, the
Buyer shall assume and the Buyer hereby agrees to pay, perform and discharge
when due, the following liabilities of the Sellers (the "Assumed Liabilities"):
(a) all Liabilities of any of the Sellers shown or reflected in the
Seller Balance Sheet which directly relate to the Purchased Assets and remain
unpaid at the time of Closing, other than Liabilities arising (i) prior to the
Petition Date or the International Petition Date, as applicable, or (ii) under
the Credit Agreement;
(b) all Liabilities of any of the Sellers directly relating to the
Business and arising in the ordinary course of business (i) on or after the
Balance Sheet Date until the date hereof or (ii) on or after the date hereof to
the extent permitted by Section 6.1;
(c) all Liabilities of any of the Sellers accruing or arising under any
of the Assumed Contracts from and after the Closing Date, except for Liabilities
of the Sellers with respect to Union Employees and Assumed Collective Bargaining
Agreements, which are provided for in Sections 2.5(d) and (e) below;
(d) all Liabilities of the Sellers with respect to Union Employees to
the extent expressly provided in Article VII;
(e) all Liabilities of the Sellers under the Assumed Collective
Bargaining Agreements to the extent expressly provided in Article VII;
(f) all Liabilities of any of the Sellers arising under the Permitted
Closing Liens;
(g) all Liabilities of the Sellers relating to Advance Ticket Sales to
the extent set forth on the Post-Closing Advance Ticket Sales Statement,
regardless of when such Liabilities arose; and
(h) all other Liabilities arising on or after the Closing Date with
respect to the operation of the Business from and after the Closing Date.
Notwithstanding the preceding clauses, Assumed Liabilities shall not include (i)
Taxes imposed on or based on income, revenue or gross receipts (including, but
not limited to, corporate franchise taxes based on income, revenues or gross
receipts), sales, use, value-added importations of property and services,
payroll and employee withholding for periods ending prior to the Closing Date
(other than charges based on ticket sales including, without limitation, Project
Support Payments (as defined in the New York Sublease) and amounts payable
pursuant to Section 7.2 of the Redevelopment Agreement, each, as adjusted
pursuant to the Closing Date Balance Sheet), (ii) all Liabilities with respect
to the Excluded Assets and (iii) all Liabilities under Environmental Laws and
Environmental Claims, and all such Liabilities shall constitute Excluded
Liabilities as defined below. All the Liabilities and obligations of the Sellers
of whatever kind or nature, known or unknown, fixed or contingent, accrued or
unaccrued, other than the Assumed Liabilities, are hereinafter referred to as
the "Excluded Liabilities." Without limiting the second preceding sentence, the
Buyer shall not assume or pay, perform, discharge or
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be responsible for any of the Excluded Liabilities. The provisions of this
Section 2.5 shall survive the Closing.
SECTION 2.6. DEPOSIT. On the date hereof, the Buyer has executed and
delivered to the Sellers the Deposit Escrow Agreement and deposited with the
Deposit Escrow Agent under that Agreement $2,250,000 in cash (the "Deposit").
The Deposit, together with any interest thereon, shall be held and disbursed
pursuant to the terms of the Deposit Escrow Agreement and this Agreement.
SECTION 2.7. PAYMENT OF PURCHASE PRICE. In payment for the Purchased
Assets, on the Closing Date:
(a) The Deposit Escrow Agent shall pay to Livent U.S., as agent for the
Sellers, in accordance with the terms of the Deposit Escrow Agreement, the
Deposit by wire transfer of immediately available funds to one or more bank
accounts designated by Livent U.S. in writing to the Buyer, which designation
shall be made not less than two Business Days before the Closing Date (the
"Sellers' Accounts");
(b) The Buyer shall pay to Livent U.S., as agent for the Sellers, the
Estimated Purchase Price less the amounts paid pursuant to clause (a) above and
less the amounts paid pursuant to clauses (c), (d), (e) and (f) below, by wire
transfer of immediately available funds to the Sellers' Accounts;
(c) At the Closing, the Buyer shall cause $2,000,000 out of the
Estimated Purchase Price to be paid to the Escrow Agent pursuant to the Escrow A
Agreement. Said funds, together with any interest thereon shall be referred to
as the "Escrow A Funds." Subject to Section 11.1, the Escrow A Funds shall be
available, for a period of sixty (60) days from the Closing Date, to satisfy:
(i) Indemnification Claims made by the Buyer pursuant to Section 11.2(a) hereof,
(ii) Purchase Price Adjustments pursuant to Section 2.4(a) hereof, and (iii)
such other claims that the Buyer may have hereunder. Upon the termination of the
Escrow A Agreement sixty (60) days after the Closing Date, all Escrow A Funds
which have not been paid to the Buyer and are not subject to a claim or demand
by the Buyer in accordance with this Agreement and the Escrow A Agreement shall
be paid by the Escrow Agent to the Sellers' Accounts, by wire transfer of
immediately available funds;
(d) At the Closing, the Buyer shall cause up to $2,000,000 (at its
option, by written notice to the Sellers' three Business Days prior to Closing,
based on its reasonable review of available documents related to the estimate of
the Advance Ticket Sales liability) out of the Estimated Purchase Price to be
paid to the Escrow Agent pursuant to the Escrow B Agreement. Said funds,
together with any interest thereon, shall be referred to as the "Escrow B
Funds." The Escrow B Funds shall be available, for a period of thirty (30) days
from the Closing Date, to satisfy claims made by the Buyer in respect of
adjustments respecting Advance Ticket Sales, as more particularly set forth in
Section 2.4(b) and in the Escrow B Agreement. The Buyer shall be entitled to
draw against the Escrow B Funds, pursuant to the Escrow B Agreement, an amount
equal to the Final Advance Ticket Sales Increase, if any. Upon termination of
the Escrow B Agreement thirty (30) days after the Closing Date, all Escrow B
Funds which have not been
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drawn or subject to a claim or demand by the Buyer shall be paid by the Escrow
Agent to Sellers' Accounts, by wire transfer in immediately available funds;
(e) At the Closing, the Buyer shall cause $300,000 out of the Estimated
Purchase Price to be paid to the Escrow Agent pursuant to the Escrow C
Agreement. Said funds, together with any interest thereon shall be referred to
as the "Escrow C Funds." The Escrow C Funds shall be available to satisfy the
Pantages Naming Shortfall until the end of the Pantages Naming Period. The
balance, if any, of the Pantages Naming Shortfall shall be satisfied after the
end of the Pantages Naming Period by offsetting the Pantages Naming Shortfall
against the Put Amount, with the amount of such Pantages Naming Shortfall
offsetting the Put Amount to be valued by increasing such Pantages Naming
Shortfall from the end of the Pantages Naming Period to the fifth anniversary of
the Closing Date using an annual rate of 15%. The Buyer shall notify the Sellers
as to any such offset against the Put Amount within ten (10) Business Days
following the end of the Pantages Naming Period. Such notification shall be
accompanied by a certification of a senior financial officer of the Buyer as to
the calculation of such offset, including related supporting detail. Upon the
termination of the Escrow C Agreement at the end of the Pantages Naming Period,
all Escrow C Funds which have not been paid to the Buyer and are not subject to
a claim or demand by the Buyer in accordance with this Agreement and the Escrow
C Agreement shall be paid by the Escrow Agent to the Sellers' Accounts, by wire
transfer of immediately available funds; and
(f) At the Closing, if the Structural Support Work is not completed
prior to the such time, the Buyer shall cause funds in the amount of the
Structural Support Escrow Amount as determined pursuant to Section 9.8 to be
paid out of the Estimated Purchase Price to the Escrow Agent pursuant to the
Escrow D Agreement. Said funds, together with any interest thereon, shall be
referred to as the "Escrow D Funds." The Escrow D Funds shall be available until
the completion of the Structural Support Work. The Buyer shall be entitled to
draw against the Escrow D Funds, pursuant to the Escrow D Agreement, to pay
amounts required to complete the Structural Support Work. The Buyer may offset
any additional amounts required to complete the Structural Support Work against
the Put Amount, with the amount of such additional amounts offsetting the Put
Amount to be valued by increasing such additional amounts from the date of their
incurrence to the fifth anniversary of the Closing Date using an annual rate of
15%. The Buyer shall notify the Sellers as to any such offset against the Put
Amount ten (10) Business Days prior to any such offset. Such notification shall
be accompanied by a certification of a senior financial officer of the Buyer as
to the calculation of such offset, including related supporting detail and
reasonable third party documentation evidencing the Buyer's incurrence of the
costs in question (or, in the case of the final offset, reasonable third party
documentation evidencing costs incurred or that will be incurred to complete the
Structural Support Work). No such offset shall be made after the last day of the
month in which the twelve (12) month anniversary of the Closing Date occurs.
Upon termination of the Escrow D Agreement, all Escrow D Funds which have not
been drawn or subject to a claim or demand by the Buyer in accordance with this
Agreement and the Escrow D Agreement shall be paid by the Escrow Agent to
Sellers' Accounts, by wire transfer in immediately available funds;
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(g) The Buyer shall deliver to the Sellers certificates representing
the aggregate amount of the Warrants, allocated among the Sellers pursuant to
written instructions provided to the Buyer not less than three (3) Business Days
before the Closing Date.
SECTION 2.8. ALLOCATION OF PURCHASE PRICE. The Purchase Price will be
allocated among the Purchased Assets and the Assumed Liabilities for tax
purposes only in accordance with an allocation schedule prepared by the Buyer no
later than 180 days after the Closing Date, which allocation shall be binding
for tax purposes on the Sellers. The allocation set forth on such allocation
schedule shall be reasonable and consistent with the requirements of applicable
Law. The Buyer and the Sellers will make any and all filings with any taxing
authorities consistent with such allocation. Such allocation of the Purchase
Price will not be binding in the Bankruptcy Cases upon the Sellers' creditors or
other parties in interest and will not have precedential value with respect to
any allocations of value contained in a plan or plans under chapter 11 of the
U.S. Bankruptcy Code or the CCAA involving the Sellers.
SECTION 2.9. WARRANTS.
(a) Subject to the terms and conditions of this Agreement, the Buyer
shall issue at the Closing to Livent U.S., as agent for the Sellers, warrants to
purchase the number of shares of Common Stock set forth below at the below
exercise price (collectively, the "Warrants"), in substantially the form
attached hereto as Exhibit E (with the modifications for the respective Series
indicated on such Exhibit):
Series Shares of Common Stock Exercise Price Per Share
------ ---------------------- ------------------------
A 50,000 $120
B 50,000 $140
C 100,000 $150
D 200,000 $160
E 200,000 $200
(b) The Sellers agree that any distribution of the Warrants will be
only to the creditors and equity security holders of the Sellers after
confirmation of, and as part of and in accordance with, the Reorganization Plan
for claims against, and interests in, the Sellers. If the No Action Letter is
not issued prior to the confirmation of the Reorganization Plan, the Warrants
will only be distributed pursuant to an effective and current Warrant
Distribution Registration Statement (as defined in the Registration Rights
Agreement to be entered into pursuant to Section 3.2) or upon receipt of an
opinion of counsel to the Sellers, reasonably acceptable to the Buyer, that an
exemption from the registration requirements of the Securities Act will be
available with respect to such distribution of the Warrants, the exercise of the
Warrants by transferees of the Warrants and any sale of Common Stock issued upon
exercise of the Warrants.
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ARTICLE III.
CLOSING
SECTION 3.1. CLOSING. The closing hereunder (the "Closing") shall take
place at the offices of Xxxxxxx Xxxx & Xxxxxxxxx at 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 10:00 a.m. on the third Business Day following the
satisfaction or waiver by the appropriate party of all the conditions contained
in Articles XII and XIII hereof, or on such other date and at such other place
and time as may be mutually agreed to by the parties hereto (the "Closing
Date").
SECTION 3.2. CLOSING DELIVERIES OF THE SELLERS. At the Closing and
subject to the terms and conditions contained herein, the Sellers shall deliver
or cause to be delivered to the Buyer the following:
(a) the Assignment and Assumption Agreement, duly executed by the
Sellers;
(b) each of the Escrow A Agreement, the Escrow B Agreement, the Escrow
C Agreement and the Escrow D Agreement, duly executed by the Sellers;
(c) FIRPTA Certificates, duly executed by each of Livent U.S., Livent
N.Y. and Livent Chicago;
(d) duly executed xxxx of sales, in form and substance reasonably
satisfactory to the Sellers and the Buyer;
(e) with respect to the Chicago Theater, a warranty deed without
covenant in recordable form, substantially the form attached hereto as Exhibit F
(the "Chicago Theater Deed"), duly executed by Livent Chicago;
(f) with respect to the Canadian Leases, an assignment of such leases
(the "Canadian Leases Assignment"), in form and substance reasonably
satisfactory to the Sellers and the Buyer, duly executed by Livent;
(g) with respect to the New York Sublease and all subordination,
nondisturbance and attornment agreements or recognition agreements with respect
thereto, an Assignment and Assumption of Leases in recordable form, in form and
substance reasonably satisfactory to the Sellers and the Buyer, (the "Assignment
of Leases"), duly executed by Livent N.Y.;
(h) such Seller closing certificates as required under Article XIII
hereof;
(i) the Registration Rights Agreement, substantially in the form of
Exhibit G attached hereto, duly executed by the Sellers;
(j) transfer tax forms which have been duly completed and executed by
the Sellers to the extent applicable;
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(k) Livent N.Y. shall deliver a seller certification substantially in
the form of Exhibit X-0, Xxxxxx Xxxxxxx shall deliver a seller certification
substantially in the form of Exhibit H-2 and Livent shall deliver a seller
certification substantially in the form of Exhibit H-3, in each case, with such
changes thereto, if any, as shall be necessary in order for the statements and
certifications contained therein to be true and correct as of the Closing
(without affecting the parties' respective rights and obligations under Section
9.1 hereof);
(l) to the extent in Sellers' possession, plans and specifications, if
any, relating to the Material Real Property;
(m) keys to the Premises;
(n) any further Sellers' deliveries as identified in Section 13.12
hereof;
(o) an incumbency certificate for each Seller;
(p) a release and satisfaction of broker's lien substantially in the
form of Exhibit I hereto, duly executed by XX Xxxxx Securities Corporation;
(q) the Dundee Agreement, duly executed by Livent;
(r) a release of the Reciprocal Agreement, in registrable form, duly
executed by Livent (the "Release of Reciprocal Agreement"); and
(s) such other deliveries Sellers shall be required to make on the
Closing Date pursuant to any other provisions of this Agreement.
SECTION 3.3. CLOSING DELIVERIES OF THE BUYER. At the Closing and
subject to the terms and conditions contained herein, the Buyer shall deliver or
cause to be delivered to the Sellers the following:
(a) the Assignment and Assumption Agreement, duly executed by the
Buyer,
(b) each of the Escrow A Agreement, the Escrow B Agreement, the Escrow
C Agreement and the Escrow D Agreement, duly executed by the Buyer;
(c) the Put Obligation, duly executed by the Buyer;
(d) the warrant agreements for the Warrants, substantially in the form
of Exhibit E attached hereto, duly executed by the Buyer;
(e) Canadian Leases Assignment, duly executed by the Buyer;
(f) such Buyer closing certificates as required under Article XII
hereof;
(g) the Registration Rights Agreement, substantially in the form of
Exhibit G attached hereto, duly executed by the Buyer;
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(h) transfer tax forms which have been duly completed and executed by
the Buyer to the extent applicable;
(i) the Dundee Agreement, duly executed by Buyer; and
(j) such other deliveries the Buyer shall be required to make on the
Closing Date pursuant to any other provisions of this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby represent and warrant to the Buyer as follows:
SECTION 4.1. CORPORATE ORGANIZATION. Each of the Sellers is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation, other than as may be affected by the
Bankruptcy Cases. Subject to any necessary authority from the U.S. Bankruptcy
Court or the Canadian Bankruptcy Court, each of the Sellers has all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its businesses as now conducted.
SECTION 4.2. QUALIFICATION TO DO BUSINESS. Schedule 4.2 sets forth each
jurisdiction in which each of the Sellers is qualified, licensed or registered
to carry on business.
SECTION 4.3. AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of the
Sellers has all requisite corporate power and authority to enter into the
Sellers' Transaction Documents and, subject to the U.S. Bankruptcy Court's entry
of the U.S. Order, and the Canadian Bankruptcy Court's entry of the Canadian
Order, to carry out its obligations thereunder and to consummate the
transactions contemplated thereby. The execution and delivery of the Sellers'
Transaction Documents, the performance of each Seller's obligations thereunder
and the consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action by the Board of Directors of such
Seller, and, subject to the U.S. Bankruptcy Court's entry of the U.S. Order, and
the Canadian Bankruptcy Court's entry of the Canadian Order, no other corporate
proceedings (including, without limitation, shareholder proceedings) on the part
of such Seller are necessary to authorize such execution, delivery and
performance and the consummation of the transactions contemplated thereby. This
Agreement and the Deposit Escrow Agreement have been duly executed by each of
the Sellers and, subject to the U.S. Bankruptcy Court's entry of the U.S. Order
and the Canadian Bankruptcy Court's entry of the Canadian Order, constitute such
Seller's valid and binding obligations, enforceable against such Seller in
accordance with their terms.
SECTION 4.4. NO CONFLICT OR VIOLATION. Subject to (i) the receipt of
all Consents set forth on Schedule 4.5, and (ii) the U.S. Bankruptcy Court's
entry of the U.S. Order and the Canadian Bankruptcy Court's entry of the
Canadian Order, the execution, delivery and performance by each of the Sellers
of the Sellers' Transaction Documents and the consummation of the transactions
contemplated thereby do not and will not: (A) violate or conflict with any
provision of the Certificate or Articles of Incorporation or By-laws (or
equivalent documents) of
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such Seller; (B) violate any provision of material law, statute, rule,
regulation or ordinance of any Governmental Authority (each, a "Law") or any
material Order applicable to such Seller or to any of the Purchased Assets; or
(C) violate, or result in a breach of any condition or provision of, or
constitute a default or event of default which, with or without due notice or
lapse of time or both would constitute a default) under or create or give rise
to any adverse right of termination or cancellation by, or excuse the
performance by a party under, in each case, in any material respect, any Assumed
Contract; or (D) result in the creation or imposition of any Liens on the
Purchased Assets other than Permitted Closing Liens.
SECTION 4.5. CONSENTS. Subject to the U.S. Bankruptcy Court's entry of
the U.S. Order and the Canadian Bankruptcy Court's entry of the Canadian Order,
Schedule 4.5 sets forth a true and complete list of each Consent of any
Governmental Authority, domestic or foreign, or of any other Person, including,
without limitation, all Consents in connection with the Assumed Contracts, and
each declaration to or filing or registration with any such Governmental
Authority that is required in connection with the execution and delivery of the
Sellers' Transaction Documents by the Sellers, the performance by the Sellers of
their respective obligations thereunder or the consummation of the transactions
contemplated thereby.
SECTION 4.6. COMPLIANCE WITH LAW. Except as set forth in Schedule 4.6
or in connection with the Bankruptcy Cases, the Sellers have not received
written notice of any violation of any Law, and, to the Knowledge of the
Sellers, have conducted the Business in compliance with all material Laws and
are not in default with respect to any Order of any national, state or local
court or Governmental Authority or arbitrator, domestic or foreign, applicable
to the Purchased Assets, the Business or the Assumed Liabilities.
SECTION 4.7. FINANCIAL STATEMENTS. The Sellers have delivered to the
Buyer the following financial statements and information: (i) the amended and
restated audited consolidated and consolidating balance sheets of Livent and its
subsidiaries as at December 31, 1997 and the related audited amended and
restated consolidated and consolidating statements of income, stockholders'
equity and cash flows of Livent and its subsidiaries for the fiscal year then
ended, together with all reconciliation statements prepared in connection
therewith, the notes thereto and the reports thereto of Deloitte & Touche, the
Sellers' independent certified public accountants, (ii) unaudited consolidated
and consolidating balance sheets of Livent and its subsidiaries for the fiscal
quarter ended September 30, 1998 and the related statements of income,
stockholders' equity and cash flows for such quarter and the nine months ended
September 30, 1998, and (iii) all historical consolidated and consolidating
financial statements heretofore delivered by the Sellers to XX Xxxxx Securities
Corporation, including, without limitation, all financial statements included in
the Confidential Information Package, dated January 1999 prepared by XX Xxxxx
Securities Corporation (the "Information Package"). All such consolidated
statements were prepared in conformity with GAAP and fairly present the
financial position (on a consolidated basis) of the entities described in such
financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal
year-end adjustments. The Sellers have also heretofore delivered to the Buyer
the special purpose consolidated balance sheet of Livent and its subsidiaries
(together with the schedules thereto, the
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"Seller Balance Sheet") as at February 28, 1999 (the "Balance Sheet Date"),
which is attached hereto as Schedule 4.7. The Seller Balance Sheet fairly
presents, in all material respects, the individual financial statement elements
relating to the Purchased Assets and the Assumed Liabilities as at the date
thereof in accordance with GAAP consistently applied and consistent with prior
periods as restated, subject to changes resulting from audit and normal year-end
adjustments.
SECTION 4.8. LITIGATION. Except as set forth in Schedule 4.8 or in
connection with the Bankruptcy Cases, there are no actions, lawsuits, claims,
complaints, charges, arbitrations, grievances, mediations, suits, administrative
or other proceedings, disputes or investigations (collectively, "Proceedings")
pending or, to the Knowledge of the Sellers, threatened, against or affecting
the Business or any of the Purchased Assets or Assumed Liabilities, whether
domestic or foreign. Except in connection with the Bankruptcy Cases, to the
Knowledge of the Sellers, neither the Business nor any of the Purchased Assets
is subject to any Order entered in any Proceeding. None of the items listed on
Schedule 4.8 would reasonably be expected to have individually or in the
aggregate, a Seller Material Adverse Effect.
SECTION 4.9. LABOR RELATIONS. Except as set forth on Schedule 4.9, none
of the Sellers is a party to any collective bargaining agreement, the Sellers
have not separately or collectively made any other commitments, assurances or
promises to any Union Employee or any labor organizations that would materially
affect the Buyer's rights, obligations or liabilities under any Assumed
Collective Bargaining Agreements, and each of the Sellers is in compliance with
all Laws affecting employment and employment practices, including, but not
limited to, statutory and common law obligations concerning terms and conditions
of employment, discrimination (including harassment or retaliation), hiring,
notice of plant closing and/or mass layoffs, terminations of employment and
labor relations, paid or unpaid leaves of absences, wages and hours. Except as
set forth on Schedule 4.8 or Schedule 4.9, there are no unfair labor practices
or other Proceedings pending or, to the Knowledge of the Sellers, threatened,
between any of the Sellers and any of their current or former employees or any
labor, organization, collective bargaining representative or other collective
bargaining unit representing any current or former employee of the Sellers.
SECTION 4.10. EMPLOYEE BENEFITS. Schedule 4.10 lists all Employee
Benefit Plans and all Canadian Pension/Benefit Plans, any executive compensation
arrangements, excess benefit plans or supplemental pension plans, change in
control agreements or severance plans or arrangements (other than multiemployer
pension or welfare benefit plans maintained or contributed to pursuant to
collective bargaining agreements), that any of the Sellers maintain, have
entered into, or to which any of the Sellers contribute for the benefit of any
Employee or to which any of the Sellers may have any Liabilities.
SECTION 4.11. PURCHASED REAL PROPERTY.
(a) The applicable Sellers have good and marketable title to their
respective Purchased Real Property, free and clear of all Liens other than
Permitted Liens. The applicable Sellers, as of the Closing Date, will have good
and marketable title to their respective Purchased Real Property, free and clear
of all Liens other than Permitted Closing Liens.
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(b) Except as set forth in Schedule 4.11(b), no Seller has received
written notice of any default or breach by it under any of the covenants,
conditions, restrictions, easements, rights-of-way or agreements set forth on
Schedule 1.8(b) hereto which remains uncured, and to the Knowledge of the
Sellers, except as set forth in Schedule 4.11(b), no such default or breach now
exists.
(c) Schedule 4.11(c) contains a true, correct and complete list of all
the leases or other occupancy agreements under which any of the Sellers uses or
occupies or has the right to use or occupy, any of the Leased Real Property. The
Sellers have heretofore delivered to the Buyer true, complete and correct copies
of all Leases including any amendments thereto. Except as set forth in Schedule
4.11(c) (and, in the case of the New York Theater, assuming the Master Lease is
in full force and effect (which Master Lease, to the Sellers' Knowledge, is in
full force and effect)), each Lease is in full force and effect, all rent and
other sums and charges payable by the Sellers thereunder are current, no written
notice of default or termination under any Lease is outstanding, no Proceeding
has been instituted by any lessor against a Seller under any Lease, and no
default or conditional limitation which has remained uncured beyond applicable
cure periods on the part of any of the Sellers exists under any Lease. No
Affiliate of any of the Sellers is the lessor under any Lease. Except to the
extent set forth in Schedule 4.11(c), none of the Leases have been amended,
modified or extended as of the date hereof.
(d) Schedule 4.11(d) contains a true, correct and complete list of all
Space Leases under which any tenant, subtenant or licensee has a right to occupy
or use any of the Premises. The Sellers have heretofore delivered to the Buyer a
true, complete and correct copy of all Space Leases. Each Space Lease is in full
force and effect and all rent and other charges payable to Seller thereunder are
current. Except as set forth on Schedule 4.11(d), there are (i) no leasing
commissions due or payable or which become payable under the terms of any Space
Lease, and (ii) no outstanding claims for tenant improvement work to be
performed or paid for in respect of any such Space Lease which remains uncured.
Except as set forth on Schedule 4.11(d), the Sellers are not in default of any
obligations under any Space Lease and, to the Sellers' Knowledge, no other party
is in default under any of the Space Leases. Except to the extent set forth in
Schedule 4.11(d), none of the Space Leases have been amended, modified or
extended as of the date hereof.
(e) Except as set forth on Schedule 4.11(e), to the Sellers' Knowledge
there are no outstanding purchase options, rights of first refusal or rights of
reverter relating to the Purchased Real Property or any interests therein.
Except to the extent relating to Permitted Liens of the type described in clause
(ii) of the definition thereof or as otherwise set forth on Schedule 4.11(e),
the Sellers owe no monies to any contractor, subcontractor or materialman for
labor or materials performed, rendered or supplied in connection with the
Premises for which such person could claim or has claimed a Lien against any of
the Premises.
(f) Except as set forth on Schedule 4.11(f), to the Sellers' Knowledge,
(i) Sellers have received all Property Permits which are necessary or
appropriate in connection with the Sellers' occupancy, ownership or leasing, as
the case may be, of the Premises, any construction or alterations being
performed by Sellers at the Premises, and Sellers' operation of the Business in
the Premises as it is currently conducted, (ii) all of such Property Permits
remain
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valid and in full force and effect, and (iii) the present use of the Premises
does not violate any such Property Permit. Except as set forth on Schedule
4.11(f), the Seller has not received written notice from any Governmental
Authority having jurisdiction over the Premises or from any applicable Board of
Fire Underwriters threatening a suspension, revocation, modification or
cancellation of any Property Permits.
(g) To the Sellers' Knowledge, the electricity service and all other
public or private utilities ("Utilities") serving the Premises are installed and
operating and are adequate for the conduct of the Business of the Sellers as
presently conducted.
(h) No Seller has received written notice or otherwise has Knowledge of
any pending or threatened (i) condemnation, eminent domain, expropriation or
similar proceeding affecting the Premises, (ii) proceeding to change the zoning
classification of any portion of the Premises or (iii) imposition of any special
assessments for public betterments affecting the Premises.
(i) To the Sellers' Knowledge, except as set forth on Schedule 4.11(i)
and as described in Section 9.8 hereof, the roofs and all structural elements of
all Improvements comprising a part of the Material Real Property, and the
heating, ventilation, air conditioning, plumbing, electrical, mechanical, sewer,
waste water, systems and facilities and other similar facilities, in each case,
if any, included therein are in, in all material respects, good working order
and repair.
(j) Except as described on Schedule 4.11(j), to the Sellers' Knowledge,
the Premises and the uses to which the Premises are presently put, are in
compliance with and not in default under or in violation of, any building,
zoning, land use, public health, public safety, sewage, water, sanitation or
other comparable Law, including without limitation, any designation or
restriction relating to historical site or landmark status, and no written
notice of any such default or violation has been received by any of the Sellers
which remains uncured. Except as set forth on Schedule 4.11(j) hereto, to the
Sellers' Knowledge, the Material Real Property and its continued use, occupancy
and operation as currently used, occupied and operated, and the right to repair
or rebuild any Improvements thereon in the event of a casualty, and does not
constitute a nonconforming use under any applicable Law and is not dependent on
any special permit, approval or variance (other than, in the case of any such
repair or rebuilding, those permits and approvals customarily required for
comparable work for comparable Improvements (e.g., building permits)).
(k) Copies of the applicable real estate tax bills for the Premises
most recently received by Sellers (as of the date hereof) have been delivered to
the Buyer by the Sellers. Except with respect to the New York Theater, said
bills cover the whole of the Premises and do not cover or apply to any other
property. Except as set forth on Schedule 4.11(k), the Sellers have not
initiated any currently pending application or proceeding with respect to a
reduction of the Taxes on the Premises.
(l) Except as set forth on Schedule 4.11(l), no Seller has transferred
any air rights or development rights applicable or appurtenant to the Premises,
nor, except as set forth on
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Schedule 4.11(l), have any signing rights been granted to any person other than
tenants under the Space Leases relating to their business conducted thereto.
(m) Except as noted on Schedule 4.11(m), there are no security deposits
under any of the Space Leases.
(n) In the last twelve (12) months, (i) no Seller has received written
notice from any insurance company or Board of Fire Underwriters (or organization
exercising functions similar thereto) requiring the performance of any work or
alteration of any of the Premises and (ii) no Seller has received written notice
from any insurance company of any termination of casualty insurance coverage
with respect to the Material Real Property.
(o) There is in full force and effect with respect to the Material Real
Property the casualty insurance described on Schedule 4.11(o).
Notwithstanding the foregoing, the representations and warranties set forth in
this Section 4.11 are not intended to, and do not, address matters relating to
Environmental Laws, Environmental Permits, Environmental Claims and the like (as
such matters are addressed by Section 4.16 hereof).
SECTION 4.12. TITLE, OWNERSHIP AND RELATED MATTERS. The Sellers have
good title to, or rights by license, lease or other agreement to use the Leased
Real Property (in the case of the N.Y. Sublease, assuming the Master Lease is in
full force and effect) and the other Purchased Assets free and clear of all
Liens other than Permitted Liens and, as of the Closing Date, subject to the
entry of the U.S. Order and the entry of the Canadian Order. The Sellers will,
at the Closing, have good title to, or rights by license, lease or other
agreement to use the Leased Real Property (in the case of the N.Y. Sublease,
assuming the Master Lease is in full force and effect) and the Personal Property
free and clear of all Liens other than Permitted Closing Liens.
SECTION 4.13. INTELLECTUAL PROPERTY. Schedule 4.13 sets forth a true
and complete list of all applications, patents and registrations for material
Intellectual Property that Sellers own or use in connection with the Business.
Except as set forth on Schedule 4.13, the Sellers either own or have the right
to use by license, sublicense, agreement or other permission all of the
Intellectual Property listed on Schedule 4.13. Except as set forth on Schedule
4.13, none of the Sellers has granted a license, or reached an understanding
with any third party, nor entered into a written agreement, relating in whole or
in part to any of the Intellectual Property of any Seller. Except as described
in Schedule 4.13 or as would not reasonably be expected to have a Seller
Material Adverse Effect, to the Knowledge of the Sellers, (i) the conduct of the
Business does not infringe upon any intellectual property right of any third
party, (ii) there are no pending or threatened proceedings or litigation or
other adverse claims by any Person against the use of any Intellectual Property
and (iii) there are no Persons engaged in conduct which infringes in any
material respect upon the Intellectual Property.
SECTION 4.14. CONTRACTS. The Assumed Contracts, together with the
Excluded Contracts, represent all material Contracts relating to the Business
and the Purchased Assets to which any of the Sellers is a party. The Sellers
have delivered or made available to the Buyer
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copies of all Assumed Contracts, which copies are true and complete in all
material respects. Except as set forth on Schedule 4.14, and subject to the
provisions of Section 13.5 hereof and subject to U.S. Bankruptcy Court or
Canadian Bankruptcy Court approval, as applicable, to assume the Assumed
Contracts, none of the Sellers will, on the Closing Date, be in default under
any Assumed Contract to which it is a party, except only for those defaults
which will be cured by the Sellers prior to the Closing in accordance with the
U.S. Order or Canadian Order, as applicable (or which need not be cured under
the U.S. Bankruptcy Code or the CCAA, as applicable, to permit the assumption
and assignment of Assumed Contracts) or for such defaults that would not
reasonably be expected to have a Seller Material Adverse Effect. To the
Knowledge of the Sellers, each of the Leases and other Assumed Contracts listed
on Schedule 4.14 is or will be at the Closing, binding and in full force and
effect as against each party (other than the Sellers) thereto. Schedule 4.14
sets forth the Sellers' reasonable good faith estimate of the amounts necessary,
as of the date hereof, to cure all defaults under the Assumed Contracts.
SECTION 4.15. TAX MATTERS. Except as set forth on Schedule 4.15, (i)
there are no Liens (other than Permitted Liens) affecting any of the Purchased
Assets that arose in connection with any failure or alleged failure to pay any
Tax which will attach to the Purchased Assets after the Closing, (ii) the Buyer
will not be liable for any material Taxes of any Seller relating to any period
prior to the Closing Date (a) under a Tax allocation, Tax indemnification or
other similar agreement of any Seller, or (b) based on the Buyer's status as a
transferee or successor to any Seller hereunder, (iii) none of the Purchased
Assets is "tax-exempt bond financed property" or "tax-exempt use property"
within the meaning of Section 168(g) or (h), respectively, of the Code, and (iv)
none of the Purchased Assets is required to be treated as being owned by any
other person pursuant to the "safe harbor" leasing provisions of Section
168(f)(8) of the Internal Revenue Code of 1954 as in effect prior to the repeal
of those "safe harbor" leasing provisions or any similar provisions of
applicable law. All taxes payable by the Sellers under the Retail Sales Tax Act
(Ontario) for the period commencing November 19, 1998 have been paid by them to
the applicable Governmental Authority.
SECTION 4.16. ENVIRONMENTAL MATTERS. To the Knowledge of the Sellers,
except as otherwise set forth on Schedule 4.16:
(a) The Sellers are in compliance with, and the Business has been
conducted in compliance with, all Environmental Laws and Environmental Permits,
and the Sellers have filed all reports required by any Governmental Authority to
be filed with respect to all Environmental Laws;
(b) No Land is a treatment, storage or disposal facility, as defined in
and regulated under the Resource Conservation and Recovery Act, 42 U.S.C ss.
6901 et seq., is on or ever was listed or is proposed for listing on the
National Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq., or on any similar
state list of sites requiring investigation or cleanup, and the Pantages Theater
has never been used as a landfill or waste disposal site;
(c) No Seller has received any notice (i) alleging, or giving notice
of, any liability or any potential liability under Environmental Law and (ii)
that remains pending or
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outstanding with respect to the Business or any Land from any Governmental
Authority or Person alleging that any Seller is not in compliance with any
Environmental Law;
(d) There has been no reportable Release (as defined below) at, from,
in, to, on or under any Land caused by the acts or omissions of any Seller, and
no Hazardous Materials are present in, on, about or migrating to or from any
Land that could give rise to an Environmental Claim (as defined below) against
any Seller;
(e) There are no pending or outstanding corrective actions requested,
required or being conducted by any Governmental Authority for the investigation,
remediation or cleanup of any Land or any parcel of the Premises;
(f) The Business has obtained and holds all necessary Environmental
Permits, and those Environmental Permits may be transferred to the Buyer after
the consummation of the transactions contemplated hereby;
(g) There are no past, pending or threatened Environmental Claims
against any Seller or the Business or the Purchased Assets, and no Seller is
aware of any facts or circumstances which would reasonably be expected to form
the basis for any Environmental Claim against any Seller, the Business or the
Purchased Assets;
(h) There are no (i) above-ground or underground storage tanks, active
or abandoned, (ii) polychlorinated biphenyl-containing equipment, (iii) friable
asbestos-containing material or (iv) "recognized environmental conditions" as
that term is used in ASTM E-1527-97 at any Land;
(i) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses (which have been reduced to writing) conducted
by, on behalf of, or that are in the possession of any Seller with respect to
any Land or any parcel of the Premises or any transportation, handling or
disposal of any Hazardous Materials that has not been delivered to the Buyer
prior to execution of this Agreement; and
(j) As used herein, (i) "Environment" means all air, surface water,
groundwater or land, including land surface or subsurface, including all fish,
wildlife, biota and all other natural resources; (ii) "Environmental Claim"
means any and all administrative or judicial actions, suits, orders, claims,
liens, notice, notices of violations, investigations, complaints, request for
information, proceedings or other communications (written or oral), whether
criminal or civil, pursuant to or relating to any applicable Environmental Law
by any person (including, but not limited to, any Governmental Authority, Person
and citizens' group) based upon, alleging, asserting, or claiming any actual or
potential (x) violation of or liability under any Environmental Law, (y)
violation of any Environmental Permit, or (z) liability for investigatory costs,
cleanup costs, removal costs, remedial costs, response costs, natural resource
damages, property damage, personal injury, fines, or penalties arising out of,
based on, resulting from, or related to the presence, Release, or threatened
Release into the Environment, of any Hazardous Materials at any location,
including, but not limited to, any off-Land location to which Hazardous
Materials or materials containing Hazardous Materials were sent for handling,
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storage, treatment or disposal; (iii) "Release" means any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing of Hazardous Materials into the Environment; and
(iv) for purposes of this Section 4.16, the term "Land" shall not include
Sellers' right, title and interest, if any, in and to the strips and gores,
streets, highways and alleys abutting or adjacent to the Purchased Real Property
and Leased Real Property.
SECTION 4.17. NO MATERIAL ADVERSE EFFECT; CONDUCT OF BUSINESS. Since
the Balance Sheet Date, except (i) in connection with the filing of the
Bankruptcy Cases, (ii) with respect to any matter for which there is a purchase
price adjustment pursuant to Section 2.3 or 2.4 and (iii) as set forth on
Schedule 4.17, there has been no event or occurrence which would reasonably be
likely to result in a Seller Material Adverse Effect. Except as set forth on
Schedule 4.17, since the Balance Sheet Date, the Business has been conducted in
the ordinary course of business. Except as set forth on Schedule 4.17, since the
Balance Sheet Date, the Sellers have not:
(a) created, incurred, assumed or granted, or permitted or allowed any
of the Purchased Assets to be subject to any Lien other than Permitted Liens or
other Liens that are no longer outstanding;
(b) amended, terminated, canceled, or compromised any claims of the
Sellers, canceled, forgave or discharged any debt owed to the Sellers, or waived
any other rights of value to the Sellers, except (i) in the ordinary course of
business consistent with past practice and (ii) claims which arose prior to the
Petition Date;
(c) sold, transferred, leased, subleased, licensed, assigned,
encumbered, pledged or otherwise disposed of any of the Purchased Assets whether
real, personal or mixed, other than in the ordinary course of business;
(d) incurred any material damage, destruction or similar loss, whether
or not covered by insurance, which materially and adversely affects the Business
or the Purchased Assets;
(e) suffered any material change in the Sellers' business policies or
practices, or any material change in the nature of the business relationships
with its customers, employees and suppliers or entered into any contract,
agreement or understanding with customers to provide services which is not
included as an Excluded or Assumed Contract, except in the ordinary course of
business consistent with past practice;
(f) other than with respect employees covered under Collective
Bargaining Agreements and employees with annual salary of less than $80,000,
increased the compensation payable or to become payable to any of its officers,
directors, employees or agents, or made any bonus payment to or similar
arrangement with any such Person, other than pursuant to existing plans,
arrangements or agreements;
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(g) failed to maintain its Premises and equipment on the Premises,
consistent with past practice; or
(h) entered into any agreement or understanding, written or otherwise,
to do any of the foregoing.
SECTION 4.18. INVESTMENT UNDERTAKING.
(a) Each Seller acknowledges that the Warrants to be issued, the Common
Stock underlying such Warrants and the Put Obligation (for purposes of this
Section 4.18, collectively, the "Securities") to each Seller pursuant to this
Agreement will be "restricted securities" within the meaning of Rule 144 (the
"Rule 144") promulgated under the General Rules and Regulations of the
Securities Act. Each Seller acknowledges that it is acquiring such Securities
for the Seller's own account and not with a view to their distribution within
the meaning of Section 2(11) of the Securities Act. Each Seller acknowledges
that the Seller understands that it must bear the economic risk of the
investment indefinitely because the Securities may not be sold, hypothecated or
otherwise disposed of unless subsequently registered under the Securities Act
and applicable state securities laws or an exemption from registration is
available.
(b) Each Seller is a sophisticated investor which either (i) has such
knowledge and experience in financial and business matters such that it is
capable of evaluating the merits and risks of its investment in the Securities
being acquired hereunder, or (ii) has obtained independent professional
financial advice sufficient to enable it to evaluate the merits and risks of its
investment in the Securities being acquired hereunder.
(c) The only Seller who will be issued Securities pursuant to a trade
(as such term is understood for the purposes of Canadian securities laws) in
Canada is Livent. Any Securities to be issued to Livent are to be issued
pursuant to the exemption set out in Section 72(1)(l) of the Securities Act
(Ontario) and Section 2.11 of Rule 45-501 of the Ontario Securities Commission.
Livent acknowledges that the assets being transferred to the Buyer in
consideration for such Securities have a fair value of not less than Canadian
$150,000. Livent further acknowledges that any Securities to be issued to it and
the Common Stock underlying any Warrants issued to Livent will be subject to
hold periods under Canadian securities laws.
SECTION 4.19. EXCISE TAX ACT REGISTRATION. Livent is duly registered
under subdivision d of Part IX of the Excise Tax Act (Canada), and its business
number is 893159061 RT.
SECTION 4.20. BROKERS. Except for XX Xxxxx Securities Corporation, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Sellers or dealt
with any other brokers or finders in connection with the transactions
contemplated hereby. The Sellers are solely responsible for the fees and
expenses of XX Xxxxx Securities Corporation.
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SECTION 4.21. QUEBEC SALES TAX.. Each Seller with assets or operations
in Quebec is duly registered under an Act respecting the Quebec sales tax
("QST"), and each such Seller's respective QST registration number is set forth
as follows: 1017342955.
SECTION 4.22. NOT A NON-RESIDENT. Livent is the only Seller with assets
used in connection with carrying on a business in Canada that are "taxable
Canadian property," as defined in the Income Tax Act (Canada), as amended (the
"ITA"). Livent is not a non-resident of Canada for the purposes of the ITA.
SECTION 4.23. COMPETITION ACT. The Sellers together with their
affiliates do not have assets in Canada that exceed Canadian $200 million in
aggregate value and did not have gross revenues from sales in, from or into
Canada that exceeds Canadian $200 million in aggregate value, determined for
purposes of and in the manner prescribed by the CA and the regulations
promulgated thereunder.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers as follows:
SECTION 5.1. CORPORATE ORGANIZATION. The Buyer and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, and has all requisite
corporate power and authority to own its properties and assets and to conduct
its businesses as now conducted.
SECTION 5.2. QUALIFICATION TO DO BUSINESS. The Buyer and each of its
subsidiaries is duly qualified, licensed or registered to carry on its business
and is in good standing in every jurisdiction in which the character of the
properties owned or leased by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so qualified
would not reasonably be expected to have a Buyer Material Adverse Effect.
SECTION 5.3. AUTHORIZATION AND VALIDITY OF AGREEMENT. The Buyer has all
requisite corporate power and authority to enter into the Buyer Transaction
Documents and to carry out its obligations thereunder and to consummate the
transactions contemplated thereby. The execution and delivery of the Buyer
Transaction Documents, the performance of the Buyer's obligations thereunder and
the consummation of the transaction contemplated thereby have been duly
authorized by all necessary corporate action by the Board of Directors of the
Buyer, and no other corporate proceedings (including, without limitation,
shareholder proceedings) on the part of the Buyer are necessary to authorize
such execution, delivery and performance of the Buyer Transaction Documents.
This Agreement and the Deposit Escrow Agreement have been duly executed by the
Buyer and constitute its valid and binding obligations, enforceable against it
in accordance with their terms.
SECTION 5.4. NO CONFLICT OR VIOLATION. The execution, delivery and
performance by the Buyer of the Buyer Transaction Documents and the consummation
of the transactions
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contemplated thereby do not and will not: (A) violate or conflict with any
provision of the Certificate of Incorporation or By-laws (or equivalent
documents) of the Buyer; (B) violate any provision of Law, or any Order
applicable to the Buyer, or (C) violate, result in a breach of, or constitute
(with due notice or lapse of time or both) a default, under any contract, lease,
loan agreement, mortgage, security agreement, trust indenture or other agreement
or instrument to which the Buyer or any of its subsidiaries is a party or by
which they are bound or to which any of their properties or assets is subject;
except, in the case of clauses (B) and (C), for any violation, breach or default
that would not reasonably be expected to have a Buyer Material Adverse Effect.
SECTION 5.5. CONSENTS AND APPROVALS. The execution, delivery and
performance of the Buyer Transaction Documents on behalf of the Buyer and the
consummation of the transactions contemplated thereunder do not require the
consent or approval of, or filing with, any Governmental Authority or other
Person except: (i) as may be required to transfer any Licenses and Permits; (ii)
as required pursuant to the HSR Act or the ICA; (iii) entry of the U.S. Order by
the U.S. Bankruptcy Court and the Canadian Order by the Canadian Bankruptcy
Court; or (iv) such consents, approvals and filings, of which the failure to
obtain or make would not, individually or in the aggregate, have a Buyer
Material Adverse Effect.
SECTION 5.6. AUTHORIZATION AND VALIDITY OF WARRANTS AND COMMON STOCK.
The shares of Common Stock to be issued pursuant to the Warrants, have been duly
authorized, and, when issued in accordance with the terms of the Warrants, will
be validly issued and fully paid and nonassessable. The Buyer has reserved the
number of shares of Common Stock to be issued pursuant to the Warrants.
SECTION 5.7. BUYER SEC DOCUMENTS AND FINANCIAL STATEMENTS. The Buyer
has filed all required documents with the SEC since its initial public offering
on August 27, 1998 (the "Buyer SEC Documents"). As of their respective dates,
the Buyer SEC Documents complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations promulgated thereunder applicable to such Buyer SEC Documents. At
the respective times they were filed, none of the Buyer SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
audited consolidated financial statements and unaudited interim financial
statements of the Buyer included in the Buyer SEC Documents complied as to form
in all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto as of their
respective dates of filing. The financial statements included in the Buyer SEC
Documents were prepared in accordance with U.S. generally applicable accounting
principles ("U.S. GAAP") applied on a consistent basis (except as may be
indicated therein or in the notes thereto) and fairly presented in all material
respects the consolidated financial position of the Buyer and its subsidiaries
as of the respective dates thereof and the consolidated results of operations
and cash flows for the periods then ended (subject, in the case of the unaudited
interim financial statements, to normal year-end audit adjustments and any other
adjustments described therein and the fact that certain information and notes
have been condensed or omitted in accordance with the Exchange Act and the rules
promulgated thereunder). Except as disclosed in the Buyer SEC Documents or as
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required by U.S. GAAP, the Buyer has not, since December 31, 1998, made any
change in the accounting practices or policies applied in the preparation of its
financial statements.
SECTION 5.8. NO MATERIAL ADVERSE EFFECT; CONDUCT OF BUSINESS. Since
December 31, 1998, there has been no event or occurrence which would reasonably
be likely to result in a Buyer Material Adverse Effect.
SECTION 5.9. AVAILABILITY OF FUNDS. Buyer has, and will have on the
Closing Date, the financial capability to pay the Estimated Purchase Price on
the Closing Date.
SECTION 5.10. ADEQUATE ASSURANCES REGARDING EXECUTORY CONTRACTS. The
Buyer is and will be capable of satisfying the conditions contained in Sections
365(b)(1)(C) and 365(f) of the U.S. Bankruptcy Code with respect to the
Executory Contracts.
SECTION 5.11. BROKERS. The Buyer has not agreed to pay any party a
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement and has not taken any action on
which a claim for any such payment could be based or dealt with any brokers or
finders in connection with the transactions contemplated hereby.
SECTION 5.12. EXCISE TAX ACT REGISTRATION. The Buyer is, or will be on
the Closing Date, registered under Subdivision d of Part IX of the Excise Tax
Act (Canada).
SECTION 5.13. INVESTIGATION BY BUYER. In entering into this Agreement,
the Buyer has relied solely upon its own investigation and analysis of the
Business, the Purchased Assets and the Assumed Liabilities, and the Buyer (a)
acknowledges that neither any of the Sellers nor any of their directors,
officers, employees, Affiliates, controlling persons, agents or representatives
makes or has made any representation or warranty, either express or implied, as
to the accuracy or completeness of any of the information provided or made
available to the Buyer or its directors, officers, employees, Affiliates,
controlling persons, agents or representatives, except as and only to the extent
expressly set forth herein and the other Sellers' Transaction Documents, and
subject to the limitations and restrictions, contained in this Agreement and the
other Sellers' Transaction Documents, and (b) agrees, to the fullest extent
permitted by law, that none of the Sellers' directors, officers, employees,
Affiliates (other than any Seller), controlling persons (other than any Seller),
agents or representatives shall have any liability or responsibility whatsoever
to the Buyer or its directors, officers, employees, Affiliates, controlling
persons, agents or representatives on any basis (including, but not limited to,
in contract or tort, under federal, state or foreign securities laws or
otherwise) based upon any information provided or made available, or statements
made, to the Buyer or its directors, officers, employees, Affiliates,
controlling persons, agents or representatives (or any omissions therefrom),
including, but not limited to, in respect of the specific representations and
warranties of the Sellers set forth in this Agreement.
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ARTICLE VI.
FURTHER AGREEMENTS BETWEEN THE PARTIES
SECTION 6.1. CONDUCT OF BUSINESS BEFORE THE CLOSING DATE. Without the
prior written consent of the Buyer (which consent shall not be unreasonably
withheld) or unless otherwise ordered by the U.S. Bankruptcy Court or Canadian
Bankruptcy Court sua sponte or on motion by a third party or as otherwise
required by Law (as advised by counsel), between the date hereof and the Closing
Date, the Sellers shall, except as required or expressly permitted pursuant to
the terms hereof or as expressly set forth on Schedule 6.1, conduct the Business
in the ordinary course, consistent with past practice, and in such a manner that
would not result in a Seller Material Adverse Effect. Notwithstanding the
foregoing, prior to the Closing Date, except as the Buyer may otherwise consent
to in writing (which consent shall not be unreasonably withheld), or unless
otherwise ordered by the U.S. Bankruptcy Court or Canadian Bankruptcy Court sua
sponte, the Sellers shall not take the following actions with respect to the
Business and Purchased Assets:
(a) acquire, sell, lease, transfer or dispose of any of the Purchased
Assets or enter into any commitment to do so, except with respect to Purchased
Assets that are obsolete and no longer used in connection with the Business, and
that the Sellers shall be free to engage in any transaction with respect to its
Cash, Cash Equivalents, Accounts Receivable, sundry assets and prepaid expenses,
Inventory, accounts payable and accrued royalties, accrued compensation and
deferred revenue in the ordinary course of business;
(b) other than in the ordinary course of business, modify any pricing
policy, practice or procedure or any volume requirement with respect to Purchase
Orders or incurring of accounts payable;
(c) other than in the ordinary course of business, modify any price
list, or any pricing policy, practice or procedure with respect to Sales and
Ticket Orders or Advance Ticket Sales;
(d) other than in the ordinary course of business, modify any policy,
practice or procedure with respect to the marketing, advertising or promotion of
any of the Productions;
(e) other than in the ordinary course of business, modify any policy,
practice or procedure with respect to the collection of accounts receivable or
the conduct of business with Sellers' Ticket Agents;
(f) take any action that would result in the creation, or consent to
the imposition, of any Lien on any of the Purchased Assets (other than Permitted
Closing Liens) to the extent created, or consented to in the ordinary course of
business, that remains outstanding as of the Closing Date;
(g) make any commitment for Improvements or other capital assets in
excess of an aggregate of $250,000 which is to be paid on or after the Closing
Date;
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(h) other than in the ordinary course of business, amend, waive,
surrender or terminate or agree to the amendment, waiver, surrender or
termination of any Assumed Contract or exercise any right under any Assumed
Contract; provided, that in the case of Assumed Contracts relating to the
Productions "Fosse," "Ragtime" and "Phantom of the Opera," the effect of any
such amendment, waiver, surrender, termination or exercise of any right does not
result in any increase in the post-Closing operating expenses for any such
Production in an amount in excess of 5% of the operating expense of such
Production as set forth in the Information Package or, when taken in the
aggregate result in any increase of the aggregate post-closing operation expense
for all three Productions, in an amount in excess of 5% of the aggregate
post-Closing operating expense for such Productions as set forth in the
Information Package; and provided, further, that the provisions of this
subsection (h) shall not apply to Assumed Collective Bargaining Agreements;
(i) enter into any Contract or commitment with respect to any
Pre-Production Expenditures that does not terminate on or prior to the Closing,
or that is not terminable at will and without penalty, by the Buyer;
(j) without the prior written consent of the Buyer, enter into any
verbal or written agreement with any labor organization which is a party to any
of the Assumed Collective Bargaining Agreements which in any way or manner
affects the Buyer's rights, obligations or liabilities on or after the Closing
Date under any of the Assumed Collective Bargaining Agreements or to employees
included in the bargaining units of any of the Assumed Collective Bargaining
Agreements, or settle any grievance, arbitration, or other dispute where it
would reasonably be expected to have a material impact on the Buyer's rights,
obligations or liabilities under the Assumed Collective Bargaining Agreements;
(k) amend, modify, terminate, extend, renew or cancel any of the Leases
or Space Leases nor enter into any such leases as lessor or lessee regarding the
Premises that would materially interfere with the use or benefits of the
Premises and in no event extend beyond September 30, 1999, or any other
property; or
(l) enter into any contract to do, or take, or agree in writing or
otherwise to take or consent to, any of the foregoing actions;
provided, however, that to the extent any such actions are permitted by clauses
(a) through (l), such actions, individually or in the aggregate, would not and
do not have a Seller Material Adverse Effect.
Notwithstanding any limitation set forth herein, the Sellers may (i)
take such actions, if any, with respect to any Purchased Assets, reasonably
necessary to comply with the terms of the Contracts or any insurance
requirements or to comply with laws, rules or regulations of any Governmental
Authority and (ii) take such actions with respect to any Purchased Assets
reasonably necessary to prevent loss of life, personal injury or property
damage.
If Buyer's consent is required under this Section 6.1, but Buyer does
not object in writing within five (5) Business Days after Buyer's receipt of
Sellers' written request for such
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consent, then Buyer will be deemed to have given such consent and will confirm
such consent in writing upon demand.
SECTION 6.2. CONSENTS; HSR ACT. (a) The parties hereto shall use their
commercially reasonable efforts to obtain all necessary Consents of Governmental
Authorities, and of all other Persons (as identified on Schedule 4.5) required
to be obtained by such party in connection with the execution, delivery and
performance by them of this Agreement and the other Transaction Documents. The
parties shall promptly file with the United States Federal Trade Commission and
the United States Department of Justice all notification and report forms
required to be filed by the parties, and shall file all supplemental information
which may be reasonably requested in connection therewith, pursuant to the HSR
Act, which notification and report form and supplemental information shall
comply in all material respects with the requirements of the HSR Act. The
parties shall request early termination of the waiting period under the HSR Act
for the sale of the Purchased Assets.
(b) The Buyer and, to the extent required by applicable Law, the
Sellers shall file on a confidential basis with respect to the purchase and sale
of the Purchased Assets, within 15 days of this date, an application for review
pursuant to and (subject to receipt of any requests for additional information)
in compliance with the ICA or, at the Buyer's option, the Buyer shall, within 15
days of this date, provide notice to Investment Canada in the form prescribed.
The Buyer shall also make such filings as are necessary under the ICA and, in
each case, shall promptly furnish any additional information requested of it
under such Act to the extent such information is in the Buyer's possession or
under its control or direction. The Buyer will agree to provide any undertakings
or abide by any conditions required by Industry Canada to obtain any ICA
approval, which are not materially adverse to the Buyer or the Buyer's intended
use of the Purchased Assets in the opinion of the Buyer acting reasonably. The
Buyer and the Sellers will use their commercially reasonable best efforts to
keep confidential all notices, applications, information and correspondence
contemplated by this Section 6.2 on the same basis as set forth in Section 6.3.
(c) With respect to an application for review pursuant to the ICA, the
Buyer shall promptly furnish any additional information requested of it under
such Act to the extent such information is in the Buyer's possession or under
its control or direction. The Sellers shall promptly provide the Buyer at its
request with all information that the Sellers have in their possession or under
their direction or control which, in the Buyer's opinion, is reasonably
necessary in connection with the application or the notifications. The Buyer
shall keep the Sellers reasonably informed as to the status of the proceedings
related to the above applications and notifications, but the Buyer shall be
under no obligation to deliver to the Sellers copies of any notices or
information supplied or filed by the Buyer under the ICA or any correspondence
with the officials under the ICA, or any information relating to the Buyer or
its activities or plans whether of a confidential nature or in the public
domain; provided, however, that the Buyer shall provide the Sellers with copies
of the applications and notifications or appropriate portions thereof, in draft
form and containing only information relating to the Sellers in order for the
Sellers to confirm that such information is consistent with information
previously given to the Buyer by the Sellers.
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(d) The parties shall be responsible for their own fees for such
filings in connection with complying with this Section 6.2.
SECTION 6.3. ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY. The
Sellers shall afford to the Buyer, and to the accountants, counsel, agents and
representatives of the Buyer, reasonable access during normal business hours
throughout the period ending on the later of (i) first anniversary of the
Closing Date and (ii) the consummation of a plan of reorganization or
liquidation of the Sellers, to the Corporate Documentation and all books and
records of the Sellers relating to the Business, the Purchased Assets and the
Assumed Liabilities. The rights of access contained in this Section 6.3 are
granted subject to, and on, the following terms and conditions: (i) any such
access will be conducted in such a manner as not to interfere unreasonably with
the operation of the business of the Sellers; (ii) during such period all
information provided to the Buyer or its representatives by or on behalf of the
Sellers or their representatives (whether pursuant to this Section 6.3 or
otherwise) will be governed and protected by the Confidentiality Agreement dated
March 1, 1999 between the Buyer and Livent (the "Confidentiality Agreement") and
(iii ) such rights of access shall be governed and protected by the provisions
of the Access Agreement. Before Buyer and/or its representatives enter onto the
Premises, Buyer shall furnish to Sellers evidence reasonably satisfactory to
Sellers of liability insurance in amount, form and substance, and issued by an
insurance company, reasonably satisfactory to Sellers and naming Sellers as
additional insureds. The provisions of the immediately preceding sentence shall
survive the Closing.
SECTION 6.4. FURTHER ASSURANCES. (a) Upon the request of the Buyer at
any time after the Closing Date, the Sellers shall do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, all such
further deeds, assignments, affidavits, transfers and conveyances as may be
required for the better assigning, transferring, granting, conveying and
confirming to the Buyer, or for aiding and assisting in collecting and reducing
to possession, any or all of the Purchased Assets.
(b) Upon the request of the Sellers at any time after the Closing Date,
the Buyer shall forthwith execute and deliver such documents as the Sellers or
their counsel may reasonably request to assume, pay, perform and discharge when
due all Assumed Liabilities.
(c) The Sellers shall promptly pay to the Buyer any and all cash from
the Accounts Receivable (other than Ticketmaster Receivables) that they may
receive from and after the Closing.
(d) The provisions of this Section 6.4 shall survive the Closing.
SECTION 6.5. REASONABLE EFFORTS. Upon the terms and subject to the
conditions of this Agreement, the Buyer and the Sellers will use their
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary or proper consistent with
applicable law to consummate and make effective in the most expeditious manner
practicable the transactions contemplated hereby.
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SECTION 6.6. ALTERNATIVE TRANSACTION. The Sellers shall, within five
(5) days from the execution of this Agreement, (i) file an application in the
U.S. Bankruptcy Court scheduling a hearing on expedited and shortened notice to
approve the break-up fee and expense reimbursement provisions set forth in
Sections 9.1(c), 9.1(d), 9.2 and 14.2(b) and the Alternative Transaction
provisions set forth in this Section 6.6 and the related expense reimbursement
provisions (the "Break-Up Fee Order "), a copy of which is attached hereto as
Exhibit J, and (ii) file an application in the Canadian Bankruptcy Court, unless
the Seller's Cross Border Insolvency Protocol (the "Protocol") has been approved
by both the U.S. Bankruptcy Court and the Canadian Court, in which case, the
Sellers shall need to file such application only with the U.S. Bankruptcy Court
and seek the consent of the monitor pursuant to the terms of the Protocol,
granting the relief set forth in the preceding sentence (the "Canadian
Approval"). If the Break-Up Fee Order is not entered and the Canadian Approval
is not obtained within ten (10) Business Days from the date of filing of the
application (or such longer period as the Buyer may agree in writing), the Buyer
may, at its discretion, on written notice to Sellers, terminate this Agreement
without any liability to the Sellers. Until the later to occur of the
procurement of the Break-Up Fee Order and the Canadian Approval, the Sellers
shall not, and shall not permit their Affiliates, or any of their respective
officers, directors, employees or professionals, including, but not limited to
those professionals retained under Section 327 of the U.S. Bankruptcy Code, to,
directly or indirectly, (i) initiate, solicit, encourage or otherwise facilitate
(including by way of furnishing information other than copies of applications to
obtain the Break-Up Fee Order and the exhibits thereto) any inquiries or the
making of any proposal or offer that constitutes, or may reasonably be expected
to lead to, an Alternative Transaction, (ii) otherwise, directly or indirectly,
provide information to, or participate in any discussions or negotiations with,
any Person which relates to, or could reasonably be expected to lead to, an
Alternative Transaction, or (iii) enter into, or agree to enter into, any
Alternative Transaction. In their application seeking approval of the Break-Up
Fee Order, the Sellers shall seek approval of bidding and notice procedures
reasonably acceptable to the Buyer which bidding and notice procedures shall set
forth the terms and conditions of an auction for an Alternative Transaction
which shall be subject to the Break-Up Fee Order. Subsequent to the entry of the
Break-Up Fee Order and the Canadian Approval, Sellers or their Affiliates, or
any of their respective officers, directors, employees or professionals shall
not initiate, solicit encourage or facilitate an Alternative Transaction,
provided that, if Sellers receive any inquiry, proposal, request for information
or offer in connection with a proposed Alternative Transaction, the Sellers may
provide information or participate in discussions necessary to fulfill their
fiduciary obligation (as advised by counsel) to maximize the value of their
estates; and provided, further, that filing and serving any application or other
pleading (including publication of notice) seeking to approve this Agreement and
the transactions contemplated hereby with the U.S. Bankruptcy Court or the
Canadian Bankruptcy Court shall not constitute the solicitation of an
Alternative Transaction. The Sellers agree to provide promptly to Buyer copies
of any written inquiries or written requests for information regarding an
Alternative Transaction (and any written response furnished by Livent in
response to any oral inquiry or request for information regarding an Alternative
Transaction) and any written bids or proposals for an Alternative Transaction.
SECTION 6.7. LIVENT HEADQUARTERS LICENSE AGREEMENT. At the Closing, the
Buyer and the Sellers agree to enter into a license agreement, in form and
substance reasonably
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satisfactory to the Sellers and the Buyer, with respect to the Buyer's use of a
portion of the Livent Headquarters for a period of three (3) months after the
Closing for no license fee; provided that the Buyer shall be responsible for its
pro rata share of customary operating expenses and real estate tax and
assessment "pass-throughs," as well as condominium common charges.
SECTION 6.8. PROCUREMENT OF ORDERS; ADEQUATE ASSURANCES REGARDING
ASSUMED CONTRACTS. (a) The Sellers agree that they shall promptly take all
reasonable actions as are necessary in obtaining (i) the U.S. Bankruptcy Court's
entry of the Break-Up Fee Order and the U.S. Order, (ii) the Canadian Approval
and (iii) the Canadian Bankruptcy Court's entry of the Canadian Order, and the
Buyer agrees that it shall promptly take all actions as are reasonably requested
by the Sellers to assist them in obtaining said bankruptcy court orders,
including, but not limited to, furnishing affidavits, financial information or
other documents or information for filing with the U.S. Bankruptcy Court or the
Canadian Bankruptcy Court or the monitor, as the case may be, and making the
Buyer's employees and representatives available to testify before the U.S.
Bankruptcy Court or the Canadian Bankruptcy Court. The Sellers agree to include
as recipients of all materials to be distributed in connection with the
application for the U.S. Order and the Canadian Order all Persons reasonably
requested by the Buyer (which shall include, without limitation, all secured
creditors of the Sellers and all Persons with proprietary claims and trust
claims against any Seller).
(b) Not less than fifteen (15) days prior to the Closing, the Sellers
shall deliver to the Buyer a schedule ("Schedule of Assumed Contract
Deficiencies") which shall list all Assumed Contracts, as set forth on the
Schedule of Assumed Contracts (Schedule 4.14(a) hereto) and shall indicate as to
each Assumed Contract any and all amounts necessary or required under Section
365(b) of the Bankruptcy Code to remedy and cure all monetary arrears,
deficiencies or other obligations under each of the Assumed Contracts ("Assumed
Contract Deficiencies") in order to fully effectuate the assumption and
assignment of such Assumed Contracts. The Buyer shall have the right to obtain
appropriate assurances and certifications from the Sellers or the U.S.
Bankruptcy Court that the Sellers have paid, or made arrangements reasonably
acceptable to the Buyer to satisfy, all such Assumed Contract Deficiencies. The
Schedule of Assumed Contract Deficiencies shall be delivered with a
certification, duly executed by a senior financial officer of Livent, which
certification shall constitute a representation and warranty under this
Agreement, that the information contained thereon reflects the Sellers' best
estimate of the Liabilities in respect of the Assumed Contracts.
(c) With respect to each Assumed Contract, the Buyer shall provide upon
request as may be reasonably required in the applicable proceeding in the U.S.
Bankruptcy Court and for the Canadian Bankruptcy Court, evidence of adequate
assurance of its future performance of such contract by the Buyer, including,
but not limited to, furnishing affidavits, financial information or other
documents or information for filing with the U.S. Bankruptcy Court or the
Canadian Bankruptcy Court and making the Buyer's employees and representatives
available to testify before the U.S. Bankruptcy Court or the Canadian Bankruptcy
Court, all of which demonstrate adequate assurance of future performance by the
Buyer or any of its designees under the Assumed Contracts.
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(d) The Sellers shall (i) use their commercially reasonable best
efforts to have the U.S. Bankruptcy Court find in the U.S. Order that the
transactions contemplated herein, while outside of the Reorganization Plan, were
made necessary by continuing losses and rapidly depleting assets of the Sellers;
(ii) cause notice of the transactions contemplated herein to be given to each
creditor and equity security holder of the Sellers, each of whom shall be given
the opportunity to object to the sale; and (iii) in connection with confirmation
of the Reorganization Plan, prepare and distribute to all creditors and equity
holders of the Company a disclosure statement approved by the U.S. Bankruptcy
Court which shall describe the Warrants and conform to Section 1125 of the U.S.
Bankruptcy Code and cause same to be sent to each creditor and equity security
holder of the Sellers.
SECTION 6.9. PANTAGES NAMING AGREEMENT. The Buyer shall use its
commercially reasonable best efforts consistent with its business practices to
enter into with a third party, as soon as practicable after the Closing Date, a
binding agreement with respect to the naming rights for the Pantages Theater,
pursuant to which the Buyer shall recognize revenue in its financial statements
accordance with U.S. GAAP.
SECTION 6.10. APPLICATION FOR "NO ACTION" LETTER. As soon as
practicable after the date hereof, the Buyer shall apply for a "no action"
letter from the Staff of the SEC (the "No Action Letter") seeking confirmation
that the Division of Corporation Finance of the SEC will not recommend
enforcement action to the SEC with respect to (i) the Buyer's issuance of the
Warrants prior to the confirmation of the Reorganization Plan without
registration under the Securities Act; (ii) provided the transferor is not an
"underwriter," as defined in Section 1145 (b)(1) of the U.S. Bankruptcy Code,
any recipient of the Warrants in such distribution may resell the Warrants
without registration under the Securities Act except that, if the transferor is
an affiliate (within the meaning of Rule 144) of the Buyer, such resale must be
in accordance with all of the provisions of Rule 144 other than the holding
period requirement of paragraph (d) of Rule 144; (iii) a Person, regardless of
whether the initial recipient of a Warrant or a direct or indirect purchaser or
transferee of a Warrant, may exercise the Warrant without registration under the
Securities Act; and (iv) provided the transferor is not an "underwriter," as
defined in Section 1145(b)(1) of the U.S. Bankruptcy Code, any recipient of
Common Stock acquired upon the exercise of Warrants may resell such stock
without registration under the Securities Act except that, if the transferor is
an affiliate (within the meaning of Rule 144) of the Buyer, such resale must be
in accordance with all of the provisions of Rule 144 other than the holding
period requirement of paragraph (d) of Rule 144.
ARTICLE VII.
EMPLOYEES AND EMPLOYEE PLANS
SECTION 7.1. OFFER OF EMPLOYMENT.
(a) Transferred Employees. Effective as of the Closing Date, (i) the
Buyer shall assume and be bound by the terms and provisions of the collective
bargaining agreements set forth on Schedule 7.1(a) (the "Assumed Collective
Bargaining Agreements") and the employment or other similar agreements or
arrangements (the "Union Employment Agreements") between any of the Sellers and
any employees employed by the Sellers who are members of any
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of the bargaining units covered by the Assumed Collective Bargaining Agreements
(other than employees who declined employment with the Buyer on the Closing
Date) (the "Union Employees"), including all severance obligations accrued as of
the Closing Date with respect to all Union Employees under such Assumed
Collective Bargaining Agreements and Union Employment Agreements, but
specifically excluding any "withdrawal liability" under Section 4201 of ERISA
which arises on or prior to the Closing Date, and (ii) the Sellers shall assign
to the Buyer those Assumed Collective Bargaining Agreements that cover the
Sellers' United States Union Employees. Effective as of the Closing Date, the
Buyer shall employ all Union Employees in accordance with the terms and
conditions of (i) the applicable Assumed Collective Bargaining Agreements and
(ii) the employment or other similar agreements or arrangements between any of
the Sellers and any Union Employment Agreements. All employees of the Sellers
who are employed by the Buyer as of the Closing Date shall be referred to herein
as "Transferred Employees."
(b) Non-Transferred Employees. Effective as of the Business Day
immediately preceding the Closing Date, the Sellers shall terminate the
employment of all of the Sellers' employees other than the Union Employees and
those employees of the Sellers who shall remain in the Sellers' employ after
such date.
(c) Accrued Vacation and Sick Days. The Buyer shall assume all
liabilities with respect to the vacation and sick days payments accrued as of
the Closing Date with respect to all Union Employees but only to the extent
accrued on the Closing Date Balance Sheet. The Buyer shall make payments to the
Union Employees with respect to such vacation and sick days obligations at such
times as such payments are required to be made under the applicable Assumed
Collective Bargaining Agreements and the Union Employment Agreements.
(d) Terms of Employment. Except as expressly provided in Sections
7.1(a) and (c) and Section 7.3, the Buyer shall not be obligated to (i) hire or
offer to hire, engage or offer to engage, any of the Sellers' other employees or
(ii) continue the employment of any Transferred Employee, or to provide any
other specific benefits for any period of time after the Closing Date. Upon
request of the Buyer, the Sellers shall provide the Buyer, on or promptly after
the date of this Agreement, reasonable access to, and shall provide copies of
data (including, but not limited to computer data) regarding the dates of hire,
compensation and job description of the Transferred Employees.
SECTION 7.2. LIABILITIES. Except as otherwise provided in Sections 2.5,
7.1 and 7.3, the Buyer shall not assume or be liable or responsible for any
employment-related Liability of, or with respect to, the Sellers arising (i)
prior to the Closing Date, or (ii) on the Closing Date as a result of the
transactions contemplated by this Agreement, including, without limitation, any
liability or obligation of the Sellers arising out of or relating to: (a) any
violation by the Sellers of United States, state, local, Canadian or provincial
employment or labor related statutes or common law or Canadian or provincial
human rights statute or common law, including, but not limited to, Title VII of
the Civil Rights Act, the Americans with Disabilities Act, the Equal Pay Act,
the Age Discrimination in Employment Act, the Fair Labor Standards Act, ERISA,
the National Labor Relations Act, the Worker Adjustment and Retraining
Notification Act, the Family and Medical Leave Act, state, local or provincial
fair employment practices acts, state,
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local or provincial wage, hour, breach of contract, or common or statutory law
relating to employment by the Sellers with respect to any of the Sellers'
employees; (b) any pending action, suit, investigation or proceeding at law, in
equity, in arbitration or by or before any authority or administrative agency
involving or affecting the Sellers, which concerns or relates to any of the
Sellers employees, independent contractors, consultants, or labor organizations;
(c) the employment by the Sellers of any employee or the retention by the
Sellers of any independent contractor; (d) salary, wages, commissions or
benefits, including pension benefits, under any Employee Benefit Plan or
Canadian Pension/Benefit Plan sponsored, or contributed to by the Sellers for
any and all of the Sellers' employees or (e) any of the Assumed Collective
Bargaining Agreements, including, but not limited to, withdrawal liability under
Section 4201 of ERISA. The Buyer shall provide prompt and full cooperation to
the Sellers, and to the counsel, agents and representatives of the Sellers, with
respect to access to any information, books, records or employees of the Buyers
in connection with any claim, demand, cause of action or proceeding assessed by
any party against the Sellers in connection with any Liability or obligation
retained by the Sellers pursuant to this Section 7.2.
SECTION 7.3. EMPLOYEE HEALTH AND WELFARE .
Except as provided in Sections 2.5 and 7.1, the Sellers shall retain
responsibility for and continue to pay all hospital, medical, life insurance,
disability and other Employee Welfare Benefit Plan and Canadian Pension/Benefit
Plan expenses and benefits, and for all United States and Canadian worker's
compensation, United States and Canadian unemployment compensation and other
United States and Canadian government mandated benefits (collectively referred
to herein as "Welfare Type Plans") for claims covered by such Welfare Type
Plans which are incurred by Transferred Employees and their dependents prior to
the Closing Date. The Buyer shall have responsibility for all Transferred
Employees (and their present or former dependents) with respect to claims
incurred on or after the Closing Date under all Welfare Type Plans or hospital,
medical, life insurance, disability and other welfare plans sponsored or funded
by the Buyer in Canada. For the purposes of this Section 7.3, claims shall be
deemed to have been incurred:
(i) with respect to all death or dismemberment claims, on the actual
date of death or dismemberment;
(ii) with respect to all disability or sickness claims, other than
short-term disability or salary continuance benefits, on the date the claimant
became disabled and was unable to perform his/her regular duties of employment
or to report for work;
(iii) with respect to short-term disability or salary continuance
claims, on each day for which income benefits are payable to the claimant;
(iv) with respect to all hospital, medical, drug or dental claims, on
the date the service or supply was purchased or received by the claimant; and
(v) with respect to United States and Canadian worker's compensation
claims, on the date the incident occurred.
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ARTICLE VIII.
TAXES
The parties hereto hereby covenant and agree as follows:
SECTION 8.1. TAXES RELATED TO PURCHASE OF ASSETS. (a) All state,
provincial and local sales, social services, transfer, goods and services,
transfer gains, excise, value-added or other similar Taxes, including, but not
limited to, all state, provincial and local Taxes in connection with the
transfer of the Purchased Assets and the assumption of the Assumed Liabilities,
and all recording and filing fees (collectively, "Transaction Taxes") that may
be imposed by reason of the sale, transfer, assignment and delivery of the
Purchased Assets (i) imposed by any Canadian Governmental Authority shall be
paid by the Buyer and (ii) imposed by any United States Governmental Authority
shall be paid by the Sellers. The Buyer and the Sellers agree to cooperate to
determine the amount of Transaction Taxes payable in connection with the
transactions contemplated by this Agreement. Transaction Taxes shall not include
any taxes for which the Sellers are responsible under Section 8.2. The Sellers
agree to assist the Buyer in the preparation and filing of, and, if necessary,
will execute, any and all required returns or elections (as expressly agreed
herein) for or with respect to such Transaction Taxes with any and all
appropriate taxing authorities.
(b) The Sellers shall provide to the Buyer such information as is
reasonably necessary to permit the Buyer to claim input tax credits, rebates and
refunds in respect of any such taxes paid by the Buyer. The Sellers who receive
this payment shall forthwith remit such amount as required by the Excise Tax Act
(Canada) (the "ETA") (and the equivalent in any Canadian province). The
provisions of this Section 8.1(b) shall survive the Closing.
SECTION 8.2. COOPERATION ON TAX MATTERS. The Buyer and the Sellers
agree to furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the Business as is
reasonably necessary for the preparation and filing of any return, claim for
refund or other required or optional filings relating to Tax matters, for the
preparation for and proof of facts during any Tax audit, for the preparation for
any Tax protest, for the prosecution or defense of any suit or other proceeding
relating to Tax matters and for the answer to any governmental or regulatory
inquiry relating to Tax matters.
The Buyer agrees to retain possession of all accounting, business,
financial and Tax records and information (i) relating to the Business in
existence on the Closing Date transferred to the Buyer hereunder and (ii) coming
into existence after the Closing Date which relate to the Business before the
Closing Date, for a period of at least six (6) years from the Closing Date or
for such longer period as may be required by applicable law. In addition, from
and after the Closing Date, the Buyer agrees that it will provide access to the
Sellers and their attorneys, accountants and other representatives (after
reasonable prior notice and during normal business hours and without charge), to
such personnel, books, records, documents and any or all other information
relating to the Business as the Sellers may reasonably deem necessary to
properly prepare for, file, prove, answer, prosecute and/or defend any such
return, filing, audit, protest, claim, suit, inquiry or other proceeding. Such
access shall include, without limitation,
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access to any computerized information retrieval systems relating to the
Business. The provisions of this Section 8.2 shall survive the Closing.
SECTION 8.3. ELECTION RE: ACCOUNTS RECEIVABLE. Livent and the Buyer
agree to make a joint election in the prescribed form under Section 22 of the
Income Tax Act (Canada) as to the sale of Accounts Receivable by Livent to the
Buyer hereunder and to designate in such an election an amount equal to the
portion of the Purchase Price allocated to such Accounts Receivable pursuant to
Section 2.8.
SECTION 8.4. SUBSECTION 20(24) ELECTION: If the Buyer so requests, the
Sellers and the Buyer shall execute a joint election under subsection 20(24) of
the Income Tax Act (Canada).
ARTICLE IX.
REAL PROPERTY MATTERS
SECTION 9.1. TITLE EXCEPTIONS.
(a) Reference is made to the title commitments with respect to the
Material Real Property attached hereto as Schedule 9.1(a) (the "Title
Commitments").
(b) In the event that at any time prior to Closing, the Buyer becomes
aware of any Title Defects, other than those listed on any Title Commitment, the
Buyer shall have five (5) Business Days from the date it first became aware of
such Title Defect to notify the Sellers of the same (together with any
documentation or other materials or information with respect thereto received by
the Buyer). If the Buyer does not give notice (together with the aforesaid
documentation, materials and information) to the Sellers within such time period
then the Buyer shall be deemed to have approved all such Title Defects (other
than Mandatory Cure Items) and shall accept title subject thereto (and all such
Title Defects (other than Mandatory Cure Items) shall be deemed to be Permitted
Closing Liens).
(c) In the event that, with respect to any parcel of Material Real
Property, there shall be any Title Defect that is a Mandatory Cure Item, then
the Sellers shall discharge from record such Title Defect (or cause Title
Company to omit such Title Defect from the applicable title commitment) at the
Sellers' sole cost and expense at or prior to Closing. If the Sellers fail to so
discharge from record (or cause the Title Company so to omit), at or prior to
Closing, all Mandatory Cure Items, then the Buyer, at its option, as its sole
and exclusive right and remedy, by written notice given to the Sellers within
three Business Days after the then scheduled Closing Date, shall elect to either
(i) take title to the Premises (including, without limitation, the Material Real
Property) subject to the Title Defects in question, in which case the Buyer
shall receive a credit against the Purchase Price in an amount equal to the
total amount necessary to discharge such Title Defect from record (or cause
Title Company to omit such Title Defect from the applicable title commitment),
and in such case this Agreement shall remain in full force and effect or (ii)
terminate this Agreement, in which case the Sellers shall direct the Deposit
Escrow Agent to refund the Deposit to the Buyer and the Sellers shall reimburse
the Buyer for the Buyer's reasonable, actual and documented out-of-pocket costs
and expenses incurred after
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February 1, 1999 in connection with this Agreement up to a maximum amount of
$500,000, and upon such refund this Agreement shall terminate and no party shall
have any further obligation hereunder except as may be explicitly specified
herein.
(d) In the event that, with respect to any parcel of Material Real
Property, there shall be any Title Defect that is not a Mandatory Cure Item,
then the Sellers shall have the following options: (i) to (x) remove or cure
same at the Sellers' sole cost and expense at or prior to the Closing or (y)
allow as a credit against the Purchase Price the lesser of (A) the diminution in
value of such parcel of Material Real Property resulting from such Title Defect
or (B) the agreed upon cost of curing such Title Defect, and, in such case this
Agreement shall remain in full force and effect, or (ii) notify the Buyer that
the Sellers do not elect any of the foregoing options, in which case the Buyer
shall have the right, exercisable by the giving of notice thereof by the Buyer
to the Sellers within three (3) days after the Sellers notify the Buyer that the
Sellers do not elect any of the foregoing options, to either (x) terminate this
Agreement in which case the Sellers shall direct the Deposit Escrow Agent to
refund the Deposit to the Buyer and Sellers shall reimburse the Buyer for the
Buyer's reasonable, actual and documented out-of-pocket costs and expenses
incurred after February 1, 1999 in connection with this Agreement up to a
maximum amount of $500,000 and upon such refund this Agreement shall terminate
and no party shall have any further obligation hereunder except as may be
explicitly specified herein or (y) take title to the Premises (including,
without limitation, the Material Real Property in question) subject to the Title
Defect(s) in question, in which case the Buyer shall not be entitled to any
credit against or reduction of the Purchase Price.
(e) If prior to Closing the Buyer and the Sellers shall have failed to
agree on the diminution in value attributable to a Title Defect or Violation or
the cost of curing a Title Defect or Violation, the same shall be finally
determined by arbitration in accordance with the provisions of Section 9.7
hereof.
(f) If, at the Closing, Title Defects exist which the Sellers are
required or elect to pay and/or discharge, the Sellers may use some or all of
the Purchase Price to satisfy the same, provided that the Sellers (a) shall
simultaneously deliver to the Buyer at the Closing instruments in recordable,
fileable or registrable, as applicable, form (or Order(s))sufficient to satisfy
and remove from record such Title Defects, together with the cost of recording
or filing said instruments or (b) except with respect to Mandatory Cure Items,
have made other arrangements with the Title Company to insure title to the
Material Real Property in question free of any such Title Defects (pursuant to
affirmative insurance reasonably satisfactory to the Buyer or otherwise). If the
Sellers request, the Buyer shall at the Closing make separate wire transfers of
funds (or shall cause the Title Company to make such transfers), aggregating not
more than the amount of the balance of the Purchase Price due at the Closing, to
facilitate the satisfaction of any such Title Defects. The existence of any such
Title Defects shall not be deemed "Title Defects" if the Sellers shall comply
with the foregoing requirements.
(g) The Sellers shall be entitled to reasonable adjournments of the
Closing, not to exceed sixty (60) days in the aggregate, to cure or cause the
removal of any Title Defects that it elects or is required to cure or remove.
Except as otherwise expressly set forth herein, the Sellers shall not under any
circumstance be required or obligated to cure or to cause the removal of any
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Title Defects or to expend or make any allowance of any moneys because of any
Title Defects, even though the Sellers may have attempted to cure the same or
may have obtained an extension or extensions of the date of Closing for such
purpose.
SECTION 9.2. VIOLATIONS.
In the event that there shall be any Violation that was recorded or
filed, as applicable, against any Material Real Property prior to the date
hereof with respect to which any Seller shall have received a Violation
Notification prior to the Closing and which is not a Permitted Closing Lien,
then Sellers shall have the following options: (i) to (x) discharge of record,
at or prior to the Closing, any such Violations at the Seller's sole cost and
expense, or (y) allow as a credit against the Purchase Price the agreed upon
cost of discharging such Violation of record (but without duplication of any
credit received by Buyer pursuant to Section 9.6 hereof), and in such case this
Agreement shall remain in full force and effect, or (ii) notify the Buyer that
the Sellers do not elect any of the foregoing options, in which case the Buyer
shall have the right, exercisable by the giving of notice thereof by the Buyer
to the Sellers within three (3) days after the Sellers notify the Buyer that the
Sellers do not elect any of the foregoing options, to either (x) terminate this
Agreement in which case the Sellers shall direct the Escrow Agent to refund the
Deposit to the Buyer and Sellers shall reimburse Buyer for Buyer's reasonable,
actual and documented out-of-pocket costs and expenses incurred after February
1, 1999 in connection with this Agreement up to a maximum amount of $500,000,
and upon such refund this Agreement shall terminate and no party shall have any
further obligation hereunder except as may be explicitly specified herein or (y)
take title to the Premises (including, without limitation, the Material Real
Property in question) subject to the Violations, in which case the Buyer shall
be entitled to a credit against the Purchase Price in an amount equal to
$100,000 minus the aggregate reasonable amount of funds spent, or expense
incurred, by Sellers in an effort to discharge Violations (but without
duplication of any credit received by Buyer pursuant to Section 9.6 hereof) from
and after the date of this Agreement. The foregoing notwithstanding, in the
event there are Violations affecting the Material Real Property with respect to
which Seller shall have received one or more Violation Notifications prior to
the Closing relating to one or more Violations that were recorded or filed, as
applicable, against the applicable parcel of Material Real Property prior to the
date hereof that may be discharged of record by the payment of monies of no more
than $100,000 in the aggregate, Seller at its option shall (x) discharge of
record all such Violations at or prior to Closing and/or (y) allow as a credit
against the Purchase Price the agreed upon cost of discharging such Violation of
record (but without duplication of any credit received by Buyer pursuant to
Section 9.6 hereof); provided that Seller shall be entitled to adjourn the
Closing Date for a period not to exceed sixty (60) days in the aggregate for the
purpose of attempting to cure any such Violations; provided further that Seller
shall in no event be required to discharge of record any Violations that are
caused by Buyer or Buyer's agents or employees. Except as otherwise expressly
provided in this Section 9.2, the Sellers shall not be required or obligated to
discharge of record any Violations or remove any notes or notices of Violations
and the Buyer shall be obligated to accept the Premises subject thereto (without
any credit against or a reduction in the Purchase Price).
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SECTION 9.3. CASUALTY AND CONDEMNATION.
(a) In the event of any damage or destruction by reason of any casualty
to the Improvements, or if there shall be any takings by condemnation, eminent
domain or expropriation of all or any portion of the Premises, this Agreement
shall remain in full force and effect, and the Sellers shall (i) in the case of
damage or destruction, at the Sellers' option, (x) repair or restore, at
Sellers' sole cost, the Premises so damaged or destroyed to substantially the
same condition existing prior to the damage or destruction or (y) pay over to
the Buyer at Closing any insurance proceeds (not including rent or business
interruption insurance with respect to the period prior to the Closing Date but
including rent or business interruption insurance proceeds, if any, with respect
to the period after the Closing Date) received by the Sellers prior to the
Closing Date in respect of such casualty and assign to the Buyer all of the
Sellers' right, title and interest in and to the remainder of such proceeds not
received by the Sellers as of the Closing Date, or (z) assign to the Buyer all
of the Sellers' right, title and interest in and to such proceeds with a
reduction in the Purchase Price equal to the amount of any applicable deductible
(and Seller will, at Buyer's cost and expense, reasonably cooperate with Buyer
in Buyer's efforts to attempt to collect such insurance proceeds from the
applicable insurance carrier), and (ii) in the case of condemnation, eminent
domain or expropriation, pay over to the Buyer all awards received by the
Sellers on account of such condemnation, eminent domain or expropriation prior
to the Closing Date or assign to the Buyer the Sellers' right to receive the
same, in either case net of the amounts reasonably expended or incurred by the
Sellers in repairing or restoring the Premises. Notwithstanding the foregoing,
if, after the date hereof but prior to the Closing, (x) one or more fire(s) or
other casualt(ies) occur which damages all or a part of the Improvements at the
Material Real Property and a third-party contractor selected by the Sellers and
reasonably acceptable to the Buyer estimates, in writing (a "Contractor
Estimate"), that the loss suffered with respect to such Improvements is equal to
or greater than (1) in the case of loss with respect to any Material Real
Property other than the Pantages Theater, $5,000,000 or (2) in the case of loss
with respect to the Pantages Theater, $2,000,000 or (y) one or more eminent
domain or expropriation proceedings with respect to any or all of the Material
Real Property are initiated and the value of the portion of the Material Real
Property taken equals or exceeds $5,000,000 as agreed upon by Sellers and Buyer
(or, in the absence of agreement, as determined by arbitration pursuant to
Section 9.7 hereof) then the Buyer may terminate this Agreement by giving
written notice thereof to the Sellers within ten (10) days after receiving such
Contractor Estimate or within ten (10) days after receiving written notice of
such taking, as the case may be, whereupon the Deposit shall be returned to the
Buyer and no party hereto shall have any further obligations hereunder other
than those that, pursuant to the express terms hereof, survive the termination
of this Agreement. If the Buyer fails to give such notice within such ten-day
period, then the parties hereto shall proceed to Closing and the provisions of
Section 9.3(a)(i)(y) or 9.3(a)(ii), as the case may be, shall be applicable. The
provisions of this Section 9.3 are intended to, and shall, supersede any
contrary provision of law, including but not limited to, New York General
Obligation Law Section 5-1311, and the parties hereby waive any contrary
provision of law, including but not limited to, New York General Obligation Law
Section 5-1311. The Sellers shall have the right to adjourn the Closing for such
period, not to exceed one hundred twenty (120) days, as the Sellers reasonably
deem necessary to allow the Sellers to settle any insurance claims or legal
actions; provided that Sellers shall not enter into any such
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settlement without the permission of the Buyer, which consent shall not be
unreasonably withheld or delayed.
(b) From and after the date hereof until the Closing Date, the Sellers
shall keep in full force and effect the casualty insurance policies they
currently maintain with respect to the Premises described on Schedule 4.11(o)
(or insurance policies that are, in all material respects comparable to the
casualty policies that the Sellers currently maintain with respect to the
Premises).
SECTION 9.4. CONDITION OF THE PROPERTIES. (a) The Buyer acknowledges
that it has examined each of the Premises and is familiar with the physical
condition thereof, and agrees to take them "as is" on the date hereof subject to
ordinary wear and tear and other changes thereto not prohibited by this
Agreement. Except as expressly set forth in this Agreement, the Buyer
acknowledges that the Sellers have not made and do not make any representation
as to the physical condition, layout, footage, rents, income, expenses,
operation or any other matter or thing affecting or relating to the Premises or
this Agreement, and that the Sellers' sole obligation hereunder with respect to
the Premises is to deliver the Premises on the date of Closing subject to the
Permitted Closing Liens.
(b) Except as expressly set forth in this Agreement, the schedules and
exhibits hereto, and the other Transaction Documents, and any certificate or
instrument delivered pursuant to the terms hereof or thereof, the Sellers make
no representations or warranties with respect to the Purchased Assets, the
Assumed Liabilities or conditions, including, with respect to the Purchased
Assets, any representation or warranty of merchantability, suitability or
fitness for a particular purpose, or quality as to the Purchased Assets, or any
part thereof, or as to the condition or workmanship thereof, or the absence of
any defects therein, whether latent or patent, including, but not limited to,
the physical nature, condition and state of repair of the Premises (including,
but not limited to, all matters relating to engineering, environmental and
asbestos concerns) and the state of title to any of the Purchased Assets. Except
as provided in this Agreement, the schedules and exhibits hereto, and the other
Transaction Documents, and any other certificate or instrument delivered
pursuant to the terms hereof or thereof, the Purchased Assets are to be conveyed
hereunder "AS IS" on the date hereof and in their present condition, subject to
(i) reasonable use, wear and tear between the date hereof and the Closing Date
(ii) changes to the Purchased Assets not prohibited under Article VI hereof, and
the Buyer shall rely upon its own examination thereof.
SECTION 9.5. SATISFACTION AND DISCHARGE; SURVIVAL. The acceptance by
the Buyer of the deeds and assignments referred to in Section 3.2 shall be
deemed to be an acknowledgment, for all purposes, of the full performance and
discharge of every representation, agreement and obligation on the part of the
Sellers to be performed by it pursuant to the provisions of this Agreement,
except for the provisions of this Agreement which are specifically stated to
survive the Closing.
SECTION 9.6. PERMANENT CERTIFICATE OF OCCUPANCY FOR NEW YORK THEATER
AND CERTIFICATE OF COMPLETION FOR CHICAGO THEATER. The Sellers shall use
commercially reasonable, diligent efforts to obtain, prior to Closing, a
permanent certificate of occupancy for
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the New York Theater (a "NYPCO") and a Certificate of Completion (as referenced
in Section 4.13 of the Redevelopment Agreement) for the Chicago Theater (the
"Chicago Certificate"); provided that in no event shall the Sellers be required
to (x) expend more than $400,000 in the aggregate in the exercise of such
efforts or (y) close either theater in connection with such efforts. If the
Sellers shall not obtain a NYPCO and the Chicago Certificate prior to Closing,
then the Buyer, as its sole remedy, shall receive a credit against the Initial
Cash Amount in the amount of $400,000 (less the aggregate amount reasonably
expended, or incurred, by the Sellers in the exercise of the efforts described
in the first sentence of this Section 9.6 (but without duplication of any credit
afforded the Sellers pursuant to Section 2.3 hereof in respect of such amount))
or such lesser amount as the Buyer, in good faith, shall determine the Buyer
will be required to expend in order to obtain a NYPCO and/or Chicago
Certificate, as applicable.
SECTION 9.7. ARBITRATION.
(a) With respect to any dispute, which under the express provisions of
this Article 9 provide for the dispute to be resolved pursuant to binding
arbitration, any party hereto may require that the dispute in question be
settled and finally determined by expedited arbitration. Any such arbitration
shall be held in New York County before a single arbitrator under the Expedited
Procedures provisions of the Commercial Arbitration Rules of the American
Arbitration Association ( AAA") (collectively, the "Arbitration Rules");
provided, however, that with respect to any such arbitration, the arbitrator
shall be a qualified, disinterested and impartial person who shall have had at
least five (5) years experience appropriate to the nature of the dispute being
arbitrated. The decision and award of the arbitrator shall be final and
conclusive on the parties and not subject to final judicial review.
(b) The arbitrator conducting any such arbitration shall be bound by
the provisions of this Agreement and shall not have the power to add to,
subtract from, or otherwise modify such provisions. The arbitrator shall
consider only the specific issues submitted for resolution. The parties to the
dispute in question agree to sign all documents and to do all other things
necessary to submit any such matter to arbitration and further agree to, and
hereby do, waive any and all rights they or either of them may at any time have
to revoke their agreement hereunder to submit to arbitration and to abide by the
decision rendered thereunder which shall be binding and conclusive on the
parties and shall constitute an "award" by the arbitrator within the meaning of
the AAA rules and applicable law. Judgment may be had on the decision and award
of the arbitrator so rendered in any court of competent jurisdiction. All
parties to such dispute shall have the right to appear and be represented by
legal counsel before the arbitrator and to submit such data and memoranda in
support of their respective positions in the matter in dispute as may be
reasonably necessary or appropriate in the circumstances. Each party shall pay
its own professional fees in connection with any arbitration. The costs of such
arbitration shall be split equally between the Sellers, on the one hand, and the
Buyer, on the other hand, unless the arbitrator determines otherwise.
(c) The following shall apply to the arbitration process discussed
above:
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(1) In rendering its decision, the arbitrator shall xxxx no power to
modify any of the provisions of, or enlarge or increase any of the monetary or
other obligations of any party under, this Agreement, and the jurisdiction of
the arbitrator is limited accordingly.
(2) The arbitrator shall give written notice to the parties stating its
determination, and shall furnish a signed copy of such determination to each
party.
SECTION 9.8. STRUCTURAL SUPPORT FOR PANTAGES THEATER.
(a) The parties hereto (i) acknowledge that the DRVS Land, which is
adjacent to the Land upon which the Pantages Theater is located, contains a
crater as a result of excavation with respect to the DRVS Land and (ii) have
been informed that (A) due to the fact that such crater has remained unfilled
for a period of time, there has been a shifting of soil between the crater and
the Pantages Theater ("Soil Shifting") and (B) if the crater were to remain
unfilled, and additional structural support were not provided to the Pantages
Theater, the structural integrity of the Pantages Theater might be at risk as a
result of continuing Soil Shifting.
(b) Promptly after the date hereof, the Engineering Consultant shall
ascertain the work that is necessary to provide structural support for the
Pantages Theater so that the structural integrity of the Pantages Theater will
not be adversely affected by future Soil Shifting (the "Structural Support
Work"). Subject to Section 9.8(c) below, Livent shall engage contractors
reasonably satisfactory to Livent and the Buyer (pursuant to documentation
reasonably acceptable to Livent and the Buyer (the "Support Work Documents")) to
cause the Structural Support Work to be performed, in accordance with applicable
law, at Livent's cost; provided that in no event shall Livent be required to
expend, or incur, more than $1,000,000 in the aggregate (the "Work Cap") in
order to fulfill its obligations under this subparagraph (b); provided further
that if the Structural Support Work will cost more than the Work Cap and Livent
does not elect to pay for such Structural Support Work, then Buyer shall be
entitled to terminate this Agreement by giving written notice thereof to Livent
within three business days after Livent notifies Buyer that Livent will not pay
such amounts.
(c) If the Structural Support Work is not completed prior to the
Closing, then (i) the Engineering Consultant shall estimate the cost of
completing the Structural Support Work (the "Structural Support Work Amount")
and funds in an amount equal to the lesser of (A) 1.5 multiplied by the
Structural Support Work Amount or (B) the excess of the Work Cap over the
aggregate amount expended or incurred by Livent in order to fulfill its
obligations under subparagraph (b) above (such lesser amount, the "Structural
Support Escrow Amount") shall be paid over to the Escrow Agent to be held
pursuant to the Escrow D Agreement, and shall be held and disbursed in
accordance with the provisions of Section 2.7(f) hereof and (ii) at the Closing,
Livent shall assign to Buyer the Support Work Documents and Buyer shall assume
Livent's obligations thereunder. If (x) the Structural Support Escrow Amount
shall be less than 1.5 multiplied by the Structural Support Work Amount and (y)
the amount that Livent shall actually pay over to the Escrow Agent pursuant to
the provisions of Section 2.7(f) hereof shall be less than 1.5 multiplied by the
Structural Support Work Amount, then Buyer shall be entitled to terminate this
Agreement by giving written thereof to Sellers on the Closing Date.
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(d) Livent shall grant to the Buyer all necessary temporary and
permanent easements of support and other easements as are necessary for the
Structural Support Work so that the structural integrity of the Pantages Theater
shall remain for its lifetime.
(e) The provisions of this Section 9.8 (together with the provisions of
Section 2.7(f) hereof) set forth Buyer's sole and exclusive rights and remedies
in respect of Soil Shifting.
ARTICLE X.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 10.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as
otherwise expressly provided in this Agreement, all representations, warranties,
covenants and agreements (other than the representations and warranties of the
Sellers set forth in Sections 4.11(a) and 4.12, which shall not survive the
Closing) of the parties contained in either the Buyer Transaction Documents or
the Sellers' Transaction Documents shall survive the Closing, notwithstanding
any examination or investigation made by or for any party. Any claim, pursuant
to Article XI hereof, made in connection with this Section 10.1, must be
asserted, in writing pursuant to Section 15.7 hereof, within sixty (60) days
following the Closing Date in order to qualify as a valid claim subject to
indemnification.
ARTICLE XI.
INDEMNIFICATION
SECTION 11.1. ESCROW A FUND AND THE PUT OBLIGATION. Except as provided
in Section 2.3(f) with respect to Pre-Closing Losses, and notwithstanding
anything to the contrary in this Agreement, indemnification claims by the Buyer
pursuant to Article XI hereof shall be satisfied solely, at Buyer's option, (i)
from the Escrow A Funds and (ii) by offsetting the Put Amount, as provided
below, in an amount up to $8,000,000 plus the amount of any Pre-Closing Losses
(up to a maximum of $2,000,000 in Pre-Closing Losses). For purposes of this
Article XI, the value of such indemnification claim of the Buyer, to the extent
used to offset the Put Amount, shall be increased from the Closing Date to the
fifth anniversary of the Closing Date using an annual rate of 15%.
SECTION 11.2. INDEMNIFICATION BY THE SELLERS. The Sellers shall
indemnify and hold harmless the Buyer and its Affiliates, and each of their
respective directors, officers, employees, agents, representatives, stockholders
and controlling parties and all of their successors and assigns (collectively
the "Buyer Indemnified Parties" and individually a "Buyer Indemnified Party")
from and defend each of them from and against and will pay each the Buyer
Indemnified Party for any and all demands, claims, actions, liabilities, losses,
damages (including, without limitation, special, consequential and punitive
damages), costs and expenses (including, without limitation, interest,
penalties, costs of investigations and defense and any reasonable fees and
expenses of attorneys and other professionals), whether or not involving a third
party claim and without regard to any potential insurance recovery (other than,
to the extent
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applicable, title insurance (with respect to which (x) Buyer shall be required
to promptly make and diligently complete a claim before seeking redress against
the Sellers hereunder (provided, that, while diligently pursuing such claim, the
Buyer may file a claim against the Sellers for purposes of Section 10.1) and (y)
any recovery shall be offset against Sellers' liability hereunder))
(collectively, "Losses") asserted against, imposed upon or incurred by any such
the Buyer Indemnified Party, directly or indirectly, resulting from or arising
out of or in connection with or attributable to:
(a) any inaccuracy or breach of any representation or warranty of the
Sellers contained in any of the Sellers' Transaction Documents;
(b) any breach of any covenant, agreement or obligation of the Sellers
contained in any of the Sellers' Transaction Documents;
(c) any Liability of the Sellers that is not an Assumed Liability or
any other Liability of the Sellers arising out of events occurring, conditions
existing, or activities of the Sellers, as the case may be, after the Closing;
(d) noncompliance by the Sellers with any Law which results in
transferee liability on the Buyer or any of its Affiliates or the creation or
imposition of any Lien that is not a Permitted Closing Lien on any of the
Purchased Assets by virtue of such non-compliance; and
(e) any Taxes and Liens relating to Taxes that are not Permitted
Closing Liens and that are imposed on or incurred with respect to the Purchased
Assets or the Business for any period prior to the Closing Date;
provided, however, that the Sellers shall have no obligation under this Section
11.2 (i) unless such Losses (including any Pre-Closing Losses) in the aggregate
exceed Two Hundred Fifty Thousand Dollars ($250,000) and then only to the extent
such Losses (including any Pre-Closing Losses) exceed $250,000 and (ii) with
respect to any matter for which there is a purchase price adjustment pursuant to
Section 2.3 or 2.4 (but only to the extent of such adjustment).
Notwithstanding the provisions of Section 10.1 hereof, the Buyer shall
have a valid claim, subject to indemnification, for any actual fraud committed
by the Sellers in connection with the transactions contemplated herein and
therein for as long as such claims are not barred by applicable statutes of
limitations.
SECTION 11.3. INDEMNIFICATION BY THE BUYER. The Buyer shall indemnify
and hold harmless the Sellers and their Affiliates, and each of their respective
directors, officers, employees, agents, representatives, stockholders and
controlling parties and all of their successors and assigns (collectively, the
"Seller Indemnified Parties" and individually a "Seller Indemnified Party"),
from and defend each of them from and against and will pay to a Seller
Indemnified Party for any and all Losses asserted against, imposed upon or
incurred by any such Seller Indemnified Party, directly or indirectly resulting
from or arising out of or in connection with or attributable to:
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(a) any inaccuracy or breach of any representation or warranty of the
Buyer contained in any of the Buyer Transaction Documents;
(b) any breach of any covenant, agreement or obligation of the Buyer
contained in any of the Buyer Transaction Documents;
(c) except as described in Sections 11.3(d) and 11.3(e) hereof, any act
or omission by the Buyer after the Closing Date with respect to the ownership of
the Purchased Assets or the operation of the Business from and after the Closing
Date;
(d) any Assumed Liability; and
(e) any and all actions, suits, claims or legal, administrative,
arbitration, governmental or other proceedings or investigations against any
Seller Indemnified Party which solely relate to acts, events and occurrences
regarding the operation of the Business or the Purchased Assets following the
Closing Date and do not, in any way, relate to or arise out of the operations of
the Business or the use of Purchased Assets prior to the Closing Date or any
acts, events or occurrences prior to the Closing Date;
provided, however, that the Buyer shall have no obligation under this Section
11.3 unless such Losses in the aggregate exceed Two Hundred Fifty Thousand
Dollars ($250,000) and then only to the extent such Losses exceed $250,000.
Notwithstanding the provisions of Section 10.1 hereof, the Sellers
shall have a valid claim, subject to indemnification, for any actual fraud
committed by the Buyer and in connection with the transactions contemplated
herein and therein for as long as such claims are not barred by applicable
statutes of limitations.
SECTION 11.4. INDEMNIFICATION PROCEDURES - THIRD-PARTY CLAIMS. The
rights and obligations of a party claiming a right to indemnification hereunder
(each an "Indemnitee") from another party hereto (each an "Indemnitor") in any
way relating to a third party shall be governed by the following rules:
(a) The Indemnitee shall give prompt written notice to the Indemnitor
of the commencement of any Proceeding, or any threat thereof, or any state of
facts which Indemnitee determines will give rise to a claim by the Indemnitee
against the Indemnitor based on the indemnity agreements contained herein,
stating the nature and basis of the claim and the amount thereof, to the extent
known (a "Notice of Claim"). No failure to give a Notice of Claim shall affect
the indemnification obligations of an Indemnitor hereunder, except to the extent
such failure materially prejudices such Indemnitor's ability successfully to
defend the matter giving rise to the indemnification claim.
(b) In the event that an Indemnitee furnishes an Indemnitor with a
Notice of Claim, then upon the written acknowledgment by the Indemnitor given to
the Indemnitee within thirty (30) days of receipt of the Notice of Claim, that
the Indemnitor is undertaking and will prosecute the defense of the claim under
such indemnity agreements and confirming that the
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claim is one with respect to which the Indemnitor is obligated to indemnify and
hold harmless the Indemnitee hereunder and that the Indemnitor will be able to
pay the full amount of potential liability in connection with any such claim
(including, without limitation, any action, suit or proceeding and all
proceedings on appeal or for review which counsel for the Indemnitee shall deem
appropriate) (an "Indemnification Acknowledgment"), then the claim may be
defended by the Indemnitor; provided, however, that the Indemnitee is authorized
to file any motion, answer or other pleading that may be reasonably necessary or
appropriate to protect its interests prior to the Indemnitee receiving such
Indemnification Acknowledgment; provided such material answer or other pleading
is not materially prejudicial to the Indemnitor. However, in the event the
Indemnitor does not furnish an Indemnification Acknowledgment to the Indemnitor
or does not offer reasonable assurances to the Indemnitee as to Indemnitee's
financial capacity to satisfy any final judgment or settlement, the Indemnitee
may assume the defense and dispose of the claim, at the sole cost and expense of
the Indemnitor, upon thirty (30) days' prior written notice to the Indemnitor.
Notwithstanding receipt of an Indemnification Acknowledgment, the Indemnitee
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the Indemnitee's own expense unless (A)
the employment of such counsel and the payment of such fees and expenses both
shall have been specifically authorized by the Indemnitor in connection with the
defense of such action, suit or proceeding or (B) the Indemnitee shall have
reasonably concluded, based upon the written advice of legal counsel, and
specifically notified the Indemnitor that there may be specific defenses
available to the Indemnitee which are different from or additional to those
available to the Indemnitor, in which case the costs and expenses incurred by
the Indemnitee shall be borne by the Indemnitor.
(c) The Indemnitee or the Indemnitor, as the case may be, who is
controlling the defense of the action, suit or proceeding, shall keep the other
fully informed of such claim, action, suit or proceeding at all stages thereof,
whether or not it is represented by counsel. The Indemnitor or the Indemnitee,
as the case may be, who is controlling the defense of the action, suit or
proceeding, shall, at it/his reasonable expense, make available to the other
party and the other party's attorneys and accountants all books and records of
the Indemnitor relating to such proceedings or litigation, and the parties
hereto agree to render to each other such assistance as they may reasonably
require of each other in order to ensure the proper and adequate defense of any
such action, suit or proceeding.
(d) The Indemnitor shall not settle any claim which Indemnitor has
undertaken to defend, without the Indemnitee's prior written consent (which
consent shall not be unreasonably withheld or delayed), unless the Indemnitor
fully indemnifies the Indemnitee for all Losses, the Indemnitee receives a
general and unconditional release with respect to such claims; there is no
finding or admission of violation of law by, or effect on any other claims that
may be made against the Indemnitee and the relief granted in connection
therewith requires no material action on the part of and has no material effect
on the Indemnitee or its business or reputation.
(e) Any claim made by the Buyer or the Sellers that may be made under
more than one subsection under Sections 11.2 or 11.3, respectively, may be made
under the subsection that the claiming party may elect in its sole discretion,
notwithstanding that such claim may be made under more than one subsection.
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SECTION 11.5. INDEMNIFICATION PROCEDURES -- OTHER CLAIMS. A claim for
indemnification for any matter not relating to a third-party claim may be
asserted by notice directly by the Indemnitee to the Indemnitor in accordance
with the provisions of Section 15.7 hereof.
SECTION 11.6. RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE OR
WAIVERS.
(a) The right to indemnification, payment of Losses or other remedy
based on any representation, warranty, covenant or obligation of a party
hereunder shall not be affected by any investigation conducted with respect to,
or any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation.
(b) The waiver of any condition to a party's obligation to consummate
the transactions contemplated hereunder, where such condition is based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Losses or other remedy based on such representation,
warranty, covenant or obligation.
ARTICLE XII.
CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLERS
The obligations of the Sellers to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date of the following conditions, any one or more of which may be waived
by the Sellers in their sole discretion:
SECTION 12.1. REPRESENTATIONS AND WARRANTIES OF THE BUYER. All
representations and warranties made by the Buyer in this Agreement shall be true
and correct as of the date of this Agreement and on and as of the Closing Date
as if again made by the Buyer on and as of such date (except as to any
representation or warranty which specifically relates to an earlier date),
except for failures to be true and correct that would not reasonably be expected
to have a Buyer Material Adverse Effect, and the Sellers shall have received a
certificate dated the Closing Date and signed by the President, any Executive
Vice President or the Chief Financial Officer of the Buyer to that effect.
SECTION 12.2. PERFORMANCE OF THE OBLIGATIONS OF THE BUYER. The Buyer
shall, in all material respects, have performed all of its obligations and
agreements and complied with all of the covenants contained in this Agreement
and the Deposit Escrow Agreement to be performed and complied with by it on or
before the Closing Date, and the Sellers shall have received a certificate dated
the Closing Date and signed by the President, any Executive Vice President or
the Chief Financial Officer of the Buyer to that effect.
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SECTION 12.3. CONSENTS; HSR ACT.
(a) Other than the U.S. Bankruptcy Court's entry of the U.S. Order and
the Canadian Bankruptcy Court's entry of the Canadian Order which are addressed
in Section 12.6, all Consents required in connection with the execution,
delivery and performance of this Agreement (including, but not limited to, those
required under the ICA) but other than liquor licenses, shall have been duly
obtained and shall be in full force and effect on the Closing Date; and
(b) The applicable waiting period under the HSR Act shall have expired
or been terminated.
SECTION 12.4. LITIGATION. No Proceeding by any Governmental Authority
or any other Person shall have been instituted or threatened which (i) could
reasonably be expected to result in a Buyer Material Adverse Effect or could
reasonably be expected to materially impair, hinder or adversely affect the
ability of the Buyer to consummate the transactions contemplated hereby; (ii)
arises out of or relates to the Buyer Transaction Documents or the transactions
contemplated therein or (iii) questions the validity of the Buyer Transaction
Documents or the transactions contemplated therein or seeks to obtain
substantial damages in respect thereof.
SECTION 12.5. NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other Order issued by any U.S. or Canadian court or other
governmental or regulatory authority, nor any U.S. or Canadian statute, rule,
regulation, decree or executive order promulgated or enacted by any U.S. or
Canadian governmental or regulatory authority that declares this Agreement
invalid or unenforceable in any respect or which prevents the consummation of
the transactions contemplated hereby shall be in effect.
SECTION 12.6. ENTRY OF THE ORDERS. (i) (A) The U.S. Bankruptcy Court
shall have entered the U.S. Order and the Canadian Bankruptcy Court shall have
entered the Canadian Order and (B) no order staying, reversing, or materially
modifying or amending the U.S. Order or the Canadian Order shall then be in
effect; and (ii) the U.S. Order, as entered by the U.S. Bankruptcy Court, and
the Canadian Order, as entered by the Canadian Bankruptcy Court, shall not
modify in any material respect the terms and conditions of this Agreement.
SECTION 12.7. ASSIGNMENT OF BANKRUPTCY CLAIM. Effective upon the
Closing under this Agreement, the Buyer hereby sells, assigns, transfers or
conveys to Livent, as agent for the Sellers, all rights, claim, demands,
credits, allowances and causes of action which the Buyer has against the Sellers
arising prior to the Petition Date. It is the intention of the parties that this
Section 12.7 be self-executing, however, the Buyer shall execute any additional
documentation reasonably requested by the Sellers to effectuate the provisions
of this Section 12.7.
SECTION 12.8. DUNDEE AGREEMENT. DRVS and Buyer shall have executed and
delivered the Dundee Agreement, and DRVS shall have executed and delivered the
Release of Reciprocal Agreement.
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SECTION 12.9. DELIVERY OF THE BUYER'S LEGAL OPINION AND OTHER CLOSING
DOCUMENTS. The Buyer shall deliver the opinion of Xxxxxx Xxxxxx Flattau &
Klimpl, LLP, special U.S. counsel to the Buyer, as to the matters in form and
substance reasonably satisfactory to the Sellers. The Buyer shall duly execute
and deliver to the Sellers each of the Buyer's closing documents.
ARTICLE XIII.
CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE BUYER
The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date of the following conditions, any one or more of which may be waived
by the Buyer in its sole discretion:
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. All
representations and warranties made by the Sellers in this Agreement shall be
true and correct as of the date of this Agreement and on and as of the Closing
Date as if again made by the Sellers on and as of such date (except as to any
representation or warranty which specifically relates to an earlier date),
except as may be affected by actions taken in compliance with Section 6.1 and
except for failures to be true and correct that would not reasonably be expected
to have a Seller Material Adverse Effect, and the Buyer shall have received a
certificate dated the Closing Date and signed by the President or a Vice
President of each of the Sellers to that effect.
SECTION 13.2. PERFORMANCE OF THE OBLIGATIONS OF THE SELLERS. The
Sellers shall, in all material respects, have performed all obligations and
agreements and complied with all of the covenants contained in this Agreement
and the Deposit Escrow Agreement to be performed and complied with by them on or
before the Closing Date, and the Buyer shall have received a certificate dated
the Closing Date and signed by the President or a Vice President of each of the
Sellers to that effect.
SECTION 13.3. CONSENTS; HSR ACT.
(a) Other than the U.S. Bankruptcy Court's entry of the U.S. Order and
the Canadian Bankruptcy Court's entry of the Canadian Order which are addressed
in Section 13.7, all Required Consents required in connection with the
execution, delivery and performance of this Agreement (including, but not
limited to, those required under the ICA), shall have been duly obtained and
shall be in full force and effect on the Closing Date.
(b) The applicable waiting period under the HSR Act shall have expired
or been terminated.
(c) The Canadian Minister of Industry shall have notified the Buyer
that he is satisfied or is deemed to be satisfied that the acquisition of the
Purchased Assets is or is likely to be of net benefit to Canada pursuant to the
provisions of the ICA or the Buyer shall have received evidence, satisfactory to
it, indicating that the acquisition of the Purchased Assets is not a reviewable
investment under the ICA and such receipt or other evidence shall be in full
force and effect at Closing.
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SECTION 13.4. LITIGATION. No Proceeding by any Governmental Authority
or any other Person shall have been instituted or threatened which (i) could
reasonably be expected to result in a Seller Material Adverse Effect or could
reasonably be expected to materially impair, hinder or adversely affect the
ability of the Buyer to consummate the transactions contemplated hereby; (ii)
arises out of or relates to the Buyer Transaction Documents or the transactions
contemplated therein or (iii) questions the validity of the Buyer Transaction
Documents or the transactions contemplated therein or seeks to obtain
substantial damages in respect thereof.
SECTION 13.5. CURE OF DEFAULTS. The Sellers shall, on or prior to the
Closing, have cured any and all defaults under the Assumed Contracts which are
required to be cured under the U.S. Bankruptcy Code, so that such contracts may
be assumed by the Sellers and assigned to the Buyer in accordance with the
provisions of Section 365 of the U.S. Bankruptcy Code.
SECTION 13.6. NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other order issued by any U.S. or Canadian court or other
Governmental Authority, nor any U.S. or Canadian statute, rule, regulation,
decree or executive order promulgated or enacted by any U.S. or Canadian
Governmental Authority that declares this Agreement invalid or unenforceable in
any respect or which prevents the consummation of the transactions contemplated
hereby shall be in effect.
SECTION 13.7. ENTRY OF THE ORDERS. (i) (A) The U.S. Bankruptcy Court
shall have entered the U.S. Order and the Canadian Bankruptcy Court shall have
entered the Canadian Order (which (i) shall include, with respect to the
Pantages Theater, a certified copy of an Order of the Canadian Bankruptcy Court
and a vesting order containing a registrable legal description and (ii) shall
provide for the assignment of the Material Assumed Contracts by the Sellers to
the Buyer) and (B) no order staying, reversing, or materially modifying or
amending the U.S. Order or the Canadian Order shall then be in effect; and (ii)
the U.S. Order, as entered by the U.S. Bankruptcy Court, and the Canadian Order,
as entered by the Canadian Bankruptcy Court, shall not modify the terms and
conditions of this Agreement or the transactions contemplated hereby in such a
manner as results in a material diminution in the benefits of this Agreement to
the Buyer.
SECTION 13.8. BUYER'S TITLE COMPANY. The Buyer's Title Company shall be
willing, subject to the payment of applicable premiums, to issue to Buyer, title
insurance policies with respect to the Material Real Property insuring title as
marketable subject to the Permitted Closing Liens.
SECTION 13.9. PLANNING ACT. The Sellers shall have at their own cost
and expense, complied with the Planning Act (Ontario) in connection with the
transfer to the Buyer of any Purchased Real Property located in Ontario.
SECTION 13.10. DUNDEE AGREEMENT. DRVS and Livent shall have executed
and delivered the Dundee Agreement, and DRVS and Livent shall have executed and
delivered the Release of Reciprocal Agreement.
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SECTION 13.11. OPERATING CONDITION. None of the Pantages Theater,
Chicago Theater or New York Theater shall have been closed to the general public
for a period of thirty (30) or more consecutive days immediately preceding the
Closing Date solely as a result of a casualty, condemnation or revocation of a
permit or license required to be maintained by any Seller.
SECTION 13.12. DELIVERY OF THE SELLERS' LEGAL OPINIONS AND OTHER
CLOSING DOCUMENTS. The Sellers shall deliver the opinion of Xxxxxxx Xxxx &
Xxxxxxxxx, special U.S. counsel to the Sellers, and of Stikeman, Elliott,
special Canadian counsel to the Sellers, as to the matters in form and substance
reasonably satisfactory to the Buyer. The Sellers shall duly execute and deliver
to the Buyer each of the Sellers' closing documents.
ARTICLE XIV.
TERMINATION
SECTION 14.1. CONDITIONS OF TERMINATION. Notwithstanding anything to
the contrary contained herein, this Agreement may be terminated at any time
before the Closing:
(a) By mutual consent of the Sellers and the Buyer;
(b) By the Buyer on or after September 30, 1999, if any condition
contained in Article XIII (other than Section 13.3(b)) has not been satisfied or
waived; provided, however, that the right to terminate this Agreement under this
Section 14.1(b) shall not be available to the Buyer if its failure to fulfill or
comply with any of its obligations under this Agreement shall have been the
reason that the Closing shall not have been consummated on or before said date;
(c) By the Sellers on or after September 30, 1999, if any condition
contained in Article XII (other than Sections 12.1, 12.2, 12.3(b) or 12.7) has
not been satisfied or waived; provided, however, that the right to terminate
this Agreement under this Section 14.1(c) shall not be available to the Sellers
if their failure to fulfill or comply with any of their obligations under this
Agreement shall have been the reason that the Closing shall not have been
consummated on or before said date;
(d) By the Buyer or the Sellers, if any U.S. or Canadian court or other
Governmental Authority has issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other action
has become final and non-appealable;
(e) By the Buyer or the Sellers, as applicable, on or after September
30, 1999, if the condition set forth in Section 13.3(b) and 12.3(b),
respectively, has not been satisfied or waived; provided, however, that the
right to terminate this Agreement under this Section 14.1(e) shall not be
available to the terminating party if its failure to fulfill or comply with any
of its obligations or conditions under this Agreement shall have been the reason
that the Closing shall not have been consummated on or before said date;
(f) By the Sellers, if the Buyer fails to fulfill any condition set
forth in Sections 12.1, 12.2 or 12.7, the Sellers provide the Buyer written
notice of such failure and the Buyer has
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failed within fifteen (15) days after such notice to have fulfilled such
condition or provide adequate assurance to the Sellers of the Buyer's ability to
fulfill such condition (provided, that the Sellers are not then in breach of the
terms of this Agreement);
(g) by either the Buyer or the Sellers, upon the Sellers entering into
any binding agreement with respect to an Alternative Transaction;
(h) by the Buyer pursuant to Section 6.6; or
(i) by the Buyer pursuant to Section 9.8(b) or (c).
If the Buyer or the Sellers terminate this Agreement pursuant to the
provisions hereof, such termination will be effected by written notice to the
other party specifying the provision hereof pursuant to which such termination
is made.
SECTION 14.2. EFFECT OF TERMINATION; REMEDIES.
(a) In the event of termination pursuant to Section 14.1, this
Agreement shall become null and void and have no effect (other than Articles XIV
and XV which shall survive termination), with no liability on the part of the
Sellers or the Buyer, or their respective directors, officers, employees, agents
or stockholders, with respect to this Agreement, except for (i) the liability of
a party for expenses pursuant to Section 15.4; and (ii) liability as provided
below in Section 14.2(b) and any other provision which, by its express terms,
survives the termination of this Agreement.
(b) If this Agreement is terminated:
(i) Pursuant to Sections 14.1(a), (d), (e) or (h), the Deposit,
together with the interest accrued thereon, shall be returned to the Buyer.
(ii) By the Buyer or the Sellers, as the case may be, pursuant to
Sections 14.1(b) or (c), the Buyer's sole and exclusive remedy shall be the
return of the Deposit to the Buyer, together with any interest accrued thereon
and the Sellers' reimbursement of the Buyer's reasonable and actual documented
out-of-pocket costs and expenses incurred after February 1, 1999 in connection
with this Agreement up to a maximum amount of $500,000.
(iii) By the Sellers pursuant to Section 14.1(f), the Sellers shall
have the right to the Deposit, together with any interest accrued thereon. Each
of the Sellers and the Buyer acknowledge that the damages that would arise from
the Buyer's failure to fulfill any condition set forth in Sections 12.1, 12.2 or
12.7 would be difficult or impossible to establish, and, accordingly, the
Sellers' rights and remedies shall be limited to the rights and remedies set
forth in the preceding sentence, which shall serve as liquidated damages.
(iv) By the Buyer or the Sellers, as the case may be, pursuant to
Section 14.1(g), the Buyer's sole and exclusive remedy shall be (a) the return
of the Deposit to the Buyer, together with any interest accrued thereon, (b) the
payment of a break-up fee of $2,250,000, which the Sellers shall cause the
Person(s) (other than the Sellers) to the Alternative Transaction to pay at
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the closing of such Alternative Transaction directly to the Buyer and (c) the
Sellers' reimbursement of the Buyer's reasonable and actual documented
out-of-pocket costs and expenses incurred after February 1, 1999 in connection
with this Agreement up to a maximum amount of $500,000.
(v) By the Buyer pursuant to Section 14.1(i), the Buyer's sole and
exclusive remedy shall be the return of the Deposit to the Buyer, together with
any interest accrued thereon and the Sellers' reimbursement of the Buyer's
reasonable and actual documented out-of-pocket costs and expenses incurred after
February 1, 1999 in connection with this Agreement up to a maximum amount of
$500,000.
ARTICLE XV.
MISCELLANEOUS
SECTION 15.1. DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND WARRANTIES;
SCHEDULES. Notwithstanding anything to the contrary contained in this Agreement,
the Sellers make no representation or warranty with respect to any matter
primarily relating to any of the Excluded Assets or Excluded Liabilities. In
addition, any item disclosed on any one schedule shall be deemed to be disclosed
on each schedule, where relevant. Disclosure of an item in any schedule shall
not be deemed to be an admission that such item is material.
SECTION 15.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided in
this Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other parties
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect. Notwithstanding the foregoing, the
Buyer shall have the right to assign its rights or obligations under this
Agreement or under any other Transaction Document, in whole or in part, to one
or more of its Affiliates or its and their successors in interest (including
designating one or more of its Affiliates as a transferee of all or any portion
of the Purchased Assets or Assumed Liabilities); provided that the Buyer shall
remain liable for its obligations under this Agreement and all other Transaction
Documents. This Agreement shall inure to the benefit of and shall be binding
upon the successors and permitted assigns of the parties hereto.
SECTION 15.3. GOVERNING LAW; JURISDICTION. This Agreement shall be
construed, performed and enforced in accordance with, and governed by, the laws
of the State of New York (without giving effect to the principles of conflicts
of laws thereof), except to the extent that the laws of such state are
superseded by the U.S. Bankruptcy Code. For so long as the Sellers are subject
to the jurisdiction of the U.S. Bankruptcy Court, the parties hereto irrevocably
elect as the sole judicial forum for the adjudication of any matters arising
under or in connection with the Agreement, and consent to the exclusive
jurisdiction of, the U.S. Bankruptcy Court. After the Sellers are no longer
subject to the jurisdiction of the U.S. Bankruptcy Court, the parties hereto
irrevocably elect as the sole judicial forum for the adjudication of any matters
arising under or in connection with this Agreement, and consent to the
jurisdiction of, the courts of the County of New York, State of New York or of
the United States of America for the Southern District of New York and
irrevocably waive any right to contest the jurisdiction of such
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Courts or to assert that venue in such Courts would constitute an inconvenient
forum. In connection with any action, suit or other proceeding arising out of or
relating to this Agreement or any of the transactions contemplated hereby, the
parties unconditionally and irrevocably waive any right to a jury trial.
SECTION 15.4. EXPENSES. Except as otherwise provided herein, each of
the parties hereto shall pay its own expenses in connection with this Agreement
and the transactions contemplated hereby, including, but not limited to, any
legal and accounting fees, whether or not the transactions contemplated hereby
are consummated. Without limiting the generality of the foregoing, the Buyer
shall pay all expenses of or related to the issuance of the Buyer's policies of
title insurance (including, but not limited to, commitment fees, insurance
premiums, endorsement charges, search charges and survey charges).
SECTION 15.5. CURRENCY EXCHANGE. All payments, adjustment, escrow
funds, satisfaction of indemnification obligations, disbursements or expenses
provided for in the Transaction Documents or resulting from the transaction
contemplated therein shall be made or settled in United States Dollars. To the
extent such amounts exist in Canadian Dollars, they shall be converted to United
States Dollars at the mid-range exchange rate between such currencies published
in The Wall Street Journal on the date of payment.
SECTION 15.6. SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect by a court of competent jurisdiction, then to the maximum extent
permitted by applicable law, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument. Furthermore, in lieu of any such invalid, illegal or unenforceable
term or provision, the parties hereto intend that there shall be added as a part
of this Agreement a provision as similar in terms and commercial effect to such
invalid, illegal or unenforceable provision as may be possible and be valid,
legal and enforceable. It is the intention to the parties that the terms and
provisions of this Agreement and any other Transaction Document shall be
enforced to the maximum extent permitted by applicable law.
SECTION 15.7. NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given: (i) on the date of service if served personally on the
party to whom notice is to be given; (ii) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, and written
confirmation of receipt is obtained promptly after completion of transmission;
(iii) on the day after delivery to Federal Express or similar overnight courier
or the Express Mail service maintained by the United States Postal Service; or
(iv) on the fifth day after mailing, if mailed to the party to whom notice is to
be given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:
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If to the Sellers:
Livent Inc.
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
Attn: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Copies to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Buyer:
SFX Entertainment, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxxx X. Xxxxx, Esq.
Executive Vice President and
General Counsel
Telecopy: (000) 000-0000
Copies to:
SFX Entertainment, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxxxx Xxxxx, Esq.
Senior Vice President and
Associate General Counsel
Telecopy: (000) 000-0000
Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxx Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
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Any party may change its address or facsimile for the purpose of
receiving notices, requests, demands and other communications pursuant to this
Section 15.7 by giving the other parties written notice of its new address or
facsimile number in the manner set forth in this Section 15.7.
SECTION 15.8. AMENDMENTS; WAIVERS. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by all of
the parties hereto, or in the case of a waiver, by the party waiving compliance.
Any waiver by any party of any condition, or of the breach of any provision,
term, covenant, representation or warranty contained in this Agreement, in any
one or more instances, shall not be deemed to be nor construed as furthering or
continuing waiver of any such condition, or of the breach of any other
provision, term, covenant, representation or warranty of this Agreement.
SECTION 15.9. PUBLIC ANNOUNCEMENTS. The parties agree that after the
signing of this Agreement, neither party shall make any press release or public
announcement concerning this transaction without the prior written approval of
the other party unless a press release or public announcement is required by Law
or order of the U.S. Bankruptcy Court or the Canadian Bankruptcy Court or
otherwise in connection with the administration of the Bankruptcy Cases. If any
such announcement or other disclosure is required by law or order of the U.S.
Bankruptcy Court or the Canadian Bankruptcy Court or otherwise in connection
with the administration of the Bankruptcy Cases, the disclosing party agrees to
give the nondisclosing party prior notice of, and an opportunity to comment on,
the proposed disclosure. The parties acknowledge that the Sellers shall file
this Agreement with the U.S. Bankruptcy Court and the Canadian Bankruptcy Court.
SECTION 15.10. ENTIRE AGREEMENT. The Access Agreement, Confidentiality
Agreement, this Agreement and the other Transaction Documents contain the entire
agreement and understanding between the parties hereto and thereto with respect
to the transactions contemplated hereby and thereby and supersede and replace
all prior and contemporaneous agreements and understandings, oral or written,
with regard to such transactions. All schedules and exhibits hereto and thereto
and any documents and instruments delivered pursuant to any provision hereto or
thereof are expressly made a part of this Agreement and the other Transaction
Documents as fully as though completely set forth herein or therein.
SECTION 15.11. PARTIES IN INTEREST. Nothing in this Agreement is
intended to confer any rights or remedies under or by reason of this Agreement
on any Persons other than the Sellers and the Buyer and their respective
successors and permitted assigns. Nothing in this Agreement is intended to
relieve or discharge the obligations or liability of any third persons to the
Sellers or the Buyer. No provision of this Agreement shall give any third
persons any right of subrogation or action over or against the Sellers or the
Buyer.
SECTION 15.12. CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
Any references to any federal, state, local or foreign statute or law will also
refer to all rules and regulations promulgated thereunder, unless
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the context requires otherwise. Unless the context otherwise requires: (a) a
term has the meaning assigned to it by this Agreement; (b) including means
"including but not limited to"; (c) "or" is disjunctive but not exclusive; (d)
words in the singular include the plural, and in the plural include the
singular; (e) provisions apply to successive events and transactions; and (f)
"dollars" or "$" means the currency of the United States of America.
SECTION 15.13. DESCRIPTIVE HEADINGS. The article, section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
SECTION 15.14. RECORDATION. Neither the Sellers nor the Buyer may
record this Agreement or any memorandum hereof. The Buyer hereby waives, to the
extent permitted by law, any right to file a lis pendens or other form of
attachment against any Premises in connection with this Agreement or the
transactions contemplated hereby. To the extent that any such filing is made in
violation of this Agreement, the Buyer shall indemnify the Sellers against any
damages incurred by the Sellers in connection therewith. The provisions of this
Section 15.14 shall survive the termination of this Agreement.
SECTION 15.15. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may
be executed in multiple counterparts and with facsimile signatures, each of
which shall be deemed an original, but all of which when taken together, shall
constitute the same instrument. A facsimile signature of this Agreement and any
other agreement, instrument or certificate delivered pursuant to, or in
connection with, this Agreement, shall be effective to bind the party so
executing this Agreement or such other agreement, instrument or certificate.
SECTION 15.16. BANKRUPTCY ORDERS. The reversal or modification on
appeal of either the U.S. Bankruptcy Order or the Canadian Bankruptcy Order
shall not affect the validity of or the authorization to consummate the
transactions provided for in this Agreement whether or not the Sellers and the
Buyer have knowledge of the appeal, unless the appellant has sought and obtained
a stay of the transaction either from the U.S. Bankruptcy Court or Canadian
Bankruptcy Court.
SECTION 15.17. CERTAIN DELIVERIES BY LIVENT. Certain deliveries to be
made by Livent under this Agreement and the other Transaction Documents will be
made by EY in its capacity as interim receiver for Livent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
LIVENT INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
LIVENT INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title:
LIVENT (U.S.) INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
LIVENT REALTY (NEW YORK) INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
LIVENT REALTY (CHICAGO) INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
SFX ENTERTAINMENT, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
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EXHIBIT C
PUT OBLIGATION AGREEMENT
PUT OBLIGATION AGREEMENT dated as of ___________, 1999 (this
"Agreement") by and between LIVENT (U.S.) INC. ("Livent"), a Delaware
corporation, as agent for the Sellers (as hereinafter defined), and SFX
ENTERTAINMENT, INC., a Delaware corporation ("SFX").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to that certain Asset Purchase
Agreement dated as of May ___, 1999 (the "Asset Purchase Agreement") among
Livent, Livent International Inc., Livent, Inc., Livent Realty (New York) Inc.
and Livent Realty (Chicago) Inc. (collectively, the "Sellers") and SFX; and
WHEREAS, it is contemplated by the Asset Purchase Agreement that the
parties execute and deliver this Agreement; and
WHEREAS, the rights of Livent under this Agreement to exercise the Put
Right (as hereinafter defined) may be conveyed to a trustee (the "Trustee") of a
liquidating or similar trust pursuant to a confirmed Plan of Reorganization of
Livent and affiliate debtors in bankruptcy and, accordingly, in the event of
such conveyance, all references in this Agreement to Livent shall, in lieu
thereof, be deemed references to the Trustee;
NOW, THEREFORE, in consideration of the above premises and the mutual
agreements and covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Put Right of Livent.
(a) (i) Subject to the terms and conditions of this Agreement,
Livent shall have the right (the "Put Right") to notify SFX in writing (each, an
"Exercise Notice"), from time to time until and including the last Exercise Date
(as hereinafter defined) or subsequent thereto pursuant to Section 1(a)(ii)
hereof in the case of any portion of the Put Right that then remains suspended,
that Livent desires to put to SFX all or a portion of an applicable Maximum
Unencumbered Amount or Suspension Amount with respect to any class of SFX Claim
(each as hereinafter defined) on an Exercise Date. Each Exercise Notice shall be
given in accordance with the terms of this Agreement not less than thirty (30)
days prior to the applicable Exercise Date, shall reasonably describe the
exercise (including the specific amount being exercised with respect to the
Maximum Unencumbered Amount and/or a class of the Suspension Amount) and shall
be irrevocable. Each exercise of a Put Right shall be in an amount not less than
Twenty-Five Thousand Dollars ($25,000) or an integral multiple thereof in excess
of Twenty-Five Thousand Dollars ($25,000), or, if less, the then entire
remaining amount of the Maximum Unencumbered Amount or particular class of
Suspension Amount. For purposes hereof, the term "Exercise Date" shall mean a
date which is the last day of the fifteenth full month following the date of
this Agreement and each of the next fifteen (15) three-month anniversaries of
the date thereof. Only one Exercise Notice may be given with respect to any
Exercise Date.
(ii) In the event all or any part of an SFX Claim shall not
have been resolved by the last Exercise Date then notwithstanding anything
herein to the contrary, Livent may exercise its Put Right under Section 1(c)
with respect to such SFX Claim on any three-month anniversary of the last
Exercise Date, until such SFX Claim is resolved.
(b) The amount for which Livent may exercise its Put Rights
pursuant to this Section 1(b) (the "Maximum Unencumbered Amount") on any
Exercise Date shall be the amount determined as follows:
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(i) subtract (A) the amount of claims asserted by SFX
(collectively, "SFX Claims") as of the initial Exercise Date, to the extent
resolved in favor of SFX or unresolved (but not for SFX Claims to the extent
resolved in favor of Livent) with respect to (x) Losses (as defined in the Asset
Purchase Agreement) for which the Buyer Indemnified Parties (as defined in the
Asset Purchase Agreement) in good faith believe they are entitled to be
indemnified pursuant to Article XI of the Asset Purchase Agreement, up to a
maximum amount of $8,000,000 (the "Indemnification Claims"), (y) to the extent
permitted by the Asset Purchase Agreement, the Pantages Naming Shortfall
(pursuant to, and as defined in, Section 2.7(e) of the Asset Purchase Agreement)
and (z) to the extent permitted by the Asset Purchase Agreement, the amount
necessary to complete the Structural Support Work (pursuant to, and as defined
in, Section 2.7(f) of the Asset Purchase Agreement) from (B) $17,401,186, and
add thereto interest at 15% per annum, compounded annually, from the date of
this Agreement to the payment date with respect to the Exercise Notice for which
this computation is being made;
(ii) subtract from the amount determined under clause (i),
with respect to each prior payment pursuant to the exercise of a Put Right under
this Section 1(b), an amount equal to the amount of such payment, plus interest
at 15% per annum, compounded annually, from the date of such payment to the
payment date with respect to the Exercise Notice for which this computation is
being made; and
(iii) add to the amount determined under clause (ii), with
respect to each SFX Claim, the amount of such claim resolved in favor of Livent
less any amount of such claim for which Livent shall have exercised its Put
Right under Section 1(c), plus interest on such difference at 15% per annum,
compounded annually, from the date of such resolution to the payment date with
respect to the Exercise Notice for which this computation is being made.
(c) (i) For purposes of this Agreement, the Suspension Amount with
respect to a class of SFX Claims on an Exercise Date is the amount of SFX Claims
which have not been resolved by the first Exercise Date with respect to such
class (but not more than $8,000,000 in the case of Indemnification Claims), plus
interest at 15% per annum, compounded
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annually, from the date of this Agreement to such Exercise Date, reduced as
provided below. The Suspension Amount with respect to a class shall be reduced
on each date of payment by the amount paid to an escrow agent as contemplated by
Section 1(c)(ii) in respect of an exercise by Livent of its Put Right under
Section 1(c). If an SFX Claim with respect to a class is resolved all or in part
in Livent's favor, the Suspension Amount with respect to such class shall be
reduced on the date of such resolution by the amount determined under Section
1(b)(iii) (without regard to Section 1(b)(i) or (ii)). If an SFX Claim with
respect to a class is resolved all or in part in SFX's favor, SFX shall be
entitled to receive an amount equal to the amount of such SFX Claim plus
interest from the date of this Agreement to the date of resolution of such SFX
Claim computed at a rate equal to the weighted average of the rate of return
earned on the escrowed amounts with respect to such class for the period such
amounts were held in escrow and 15% per annum, compounded annually, for the
period such amounts not held in escrow. Payment of any SFX Claim to the extent
resolved in favor of SFX shall be made first from the escrow account with
respect to the class of such SFX Claim and then by reducing the Suspension
Amount with respect to such class.
(ii) Livent shall be entitled to exercise a Put Right for an
amount up to the Suspension Amount with respect to a class prior to the time all
SFX Claims with respect to such class shall have been resolved among the parties
or through arbitration pursuant to the Asset Purchase Agreement. If the Put
Right is exercised as to a class of Suspension Amount, the amount of the Put
Right so exercised shall be paid to an escrow agent pending such resolution, and
any amounts so escrowed, together with any income thereon, shall be available to
pay SFX Claims of such class if and to the extent such claims are determined to
be valid. Once all SFX Claims of a particular class shall have been resolved and
any amounts payable to SFX in respect thereof shall have been paid, the
remainder of the escrow for such class of Suspension Amount shall be paid to
Livent.
(iii) The escrow agent shall be mutually acceptable to the
parties, and shall act pursuant to a mutually acceptable escrow agreement. The
escrowed funds shall be invested by the escrow agent in United States government
obligations of any agency of
-4-
the United States government whose obligations are guaranteed by the full faith
and credit of the United States having maturities of less than twelve months, as
chosen by Livent.
(d) Livent shall not exercise its right with respect to any class
of Suspension Amount until it has exercised its put with respect to the Maximum
Unencumbered Amount with respect to the Exercise Date.
(e) The closing of each exercise of the Put Right by Livent shall
take place at the principal office of SFX on a date specified by SFX in a notice
given to Livent, which closing date shall be as promptly as is practicable
following the applicable Exercise Date and in no event later than thirty (30)
days following such Exercise Date. Subject to the terms and conditions of this
Agreement, at such closing, SFX shall pay to Livent or the escrow agent, by wire
transfer of immediately available funds, the then unpaid amount as to which
Livent shall have exercised its Put Right.
(f) SFX shall maintain on its books and records a schedule of the
Maximum Unencumbered Amount and Suspension Amount by class thereof, each
decrease and each increase thereof, each exercise of the Put Right and each
other transaction contemplated by this Agreement. At the request of Livent, SFX
shall provide to Livent copies of such schedule. Such books and records shall be
conclusive and binding on Livent absent manifest error.
2. Miscellaneous.
(a) Governing Law and Severability. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
If any provision of this Agreement shall be declared invalid, unenforceable or
illegal by a court of competent jurisdiction, the remaining provisions hereof
shall not be affected thereby, shall remain valid, enforceable and legal and
shall continue in effect.
-5-
(b) Consent to Jurisdiction and Service of Process. Any legal
action, suit or proceeding with respect to this Agreement or any matters arising
out of or in connection with this Agreement or otherwise, and any action for
enforcement of any judgment in respect thereof, shall be brought exclusively in
the courts of the State of New York located in New York County, or of the United
States of America for the Southern District of New York, and, by execution and
delivery of this Agreement, each of the parties hereby accepts, generally and
unconditionally, and unconditionally and irrevocably consents to the exclusive
jurisdiction of the aforesaid courts and appellate courts thereof. Each of SFX
and Livent irrevocably consents to service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, or by recognized
overnight carrier or delivery service, to SFX or Livent at their respective
addresses referred to in Section 2(f) hereof. SFX and Livent each hereby
irrevocably waives any objection which it may now or hereafter have to the venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or otherwise brought in the courts referred to above and
hereby further irrevocably waives and agrees, to the extent permitted by
applicable law, not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of any party hereto to serve process in
any other manner permitted by law.
(c) No Waiver. Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(d) Entire Agreement; Amendments. This Agreement, the Asset
Purchase Agreement and other Buyer Transaction Documents and Seller Transaction
Documents (as such terms are defined in the Asset Purchase Agreement) contain
the entire understanding and agreement of the parties with respect to the
subject matter hereof and thereof and they supersede
-6-
all prior understandings and agreements (whether written or oral) with respect
to such subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings other than those
expressly set forth herein or therein. This Agreement may be amended only by a
written instrument duly executed by each of the parties hereto or their
respective successors or permitted assigns.
(e) Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning,
construction or interpretation of this Agreement.
(f) Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given: (i) on the date of service if served personally; (ii) on
the day of transmission if sent via facsimile transmission to the facsimile
number given below, and telephonic confirmation of receipt is obtained promptly
after completion of transmission; (iii) on the first business day after delivery
to Federal Express or similar overnight courier or the Express Mail service
maintained by the United States Postal Service, in each case for next business
day delivery; or (iv) on the fifth day after mailing, if mailed to the party to
whom notice is to be given, by first class mail, registered or certified,
postage prepaid and properly addressed, to the party as follows:
If to Livent:
Livent, Inc.
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
-7-
Copies to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
and
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to SFX:
SFX Entertainment, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Executive Vice President
and General Counsel
Telecopy: (000) 000-0000
and
Xxxxxxx X. Xxxxx, Esq.
Associate General Counsel
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
Any party may change its address for the purpose of this Section
by giving the other party written notice of its new address in the manner set
forth above.
-8-
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall be deemed one and the same Agreement.
(h) Binding Effect on Successor. This Agreement shall be binding
upon and inure to the benefit of SFX and its successors and assigns. Livent may
not assign or transfer any of its rights hereunder, except to the Trustee of a
Livent Bankruptcy Trust after giving notice thereof to SFX in accordance with
the provisions of paragraph 2(f) hereof.
(i) Capitalized Terms. Capitalized terms used in this
Agreement without definition shall have the same meanings herein as are ascribed
to such terms in the Asset Purchase Agreement.
(j) Inconsistent Provisions. To the extent any conflict or
inconsistency between any provision of this Agreement and any provision of the
Asset Purchase Agreement, the provisions of this Agreement shall control.
-9-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LIVENT (U.S.) INC.
By:
--------------------------------------
Name:
Title:
SFX ENTERTAINMENT, INC.
By:
--------------------------------------
Name:
Title:
-10-
PUT EXERCISE NOTICE
SFX Entertainment, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Executive Vice President
and General Counsel
Dear Sir:
The undersigned_______________, pursuant to the provisions of the Put Obligation
Agreement dated as of ____________, 1999 (the "Agreement"), by and between
Livent (U.S.) Inc., a Delaware corporation, and SFX Entertainment, Inc., a
Delaware corporation ("SFX"), hereby elects to put to SFX on ____________, being
an Exercise Date:
$_______ pursuant to Section 1(b) of the Agreement
$_______ pursuant to Section 1(c) of the Agreement with respect to
Indemnification Claims
$_______ pursuant to Section 1(c) of the Agreement with respect to Structural
Support Work Claims
Capitalized terms used herein without definition shall have the same meanings
herein as are ascribed to such terms in the Agreement.
Dated: By:
------------------------------- ------------------------------------
Name:
Title:
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
This Amendment No. 1 to Asset Purchase Agreement, dated as of June 14,
1999, is made and entered into by and among Livent Inc., an Ontario corporation
("Livent"); Livent International Inc., a Barbados corporation ("Livent
International"); Livent (U.S.) Inc., a Delaware corporation ("Livent U.S.");
Livent Realty (New York) Inc., a Delaware corporation ("Livent N.Y."); Livent
Realty (Chicago) Inc., a Delaware corporation ("Livent Chicago," and together
with Livent, Livent International, Livent U.S. and Livent N.Y., collectively,
the "Sellers"); and SFX Entertainment, Inc., a Delaware corporation (the
"Buyer"). Capitalized terms used but not otherwise defined herein shall have the
meaning accorded such terms in the Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Sellers and the Buyer are party to that certain Asset
Purchase Agreement, dated as of May 28, 1999 ("Purchase Agreement");
WHEREAS, in accordance with Section 6.6 of the Purchase Agreement, the
Sellers have taken certain actions in connection with (i) the approval of the
Break-Up Fee Order by the U.S. Bankruptcy Court, (ii) the approval of the
Protocol by the U.S. Bankruptcy Court and the Canadian Bankruptcy Court and
(iii) obtaining the Canadian Approval;
WHEREAS, (i) the U.S. Bankruptcy Court has approved the Break-Up Fee
Order but with certain changes thereto, as set forth in Exhibit A hereto (the
"Final Break-Up Fee Order"), (ii) the Protocol has been approved by the U.S.
Bankruptcy Court and the Canadian Bankruptcy Court and (iii) the Canadian
Approval has been obtained; and
WHEREAS, the parties hereto desire to enter into certain amendments to
the Purchase Agreement in connection with the approval of the Final Break-Up Fee
Order and the Protocol and the obtaining of the Canadian Approval, as set forth
herein;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the parties hereto hereby agree as follows:
1. The definition of "Break-Up Fee Order" is hereby amended and
restated to mean the Final Break-Up Fee Order, and Exhibit J, and all references
thereto, shall be deleted from the Purchase Agreement.
2. Section 6.6 of the Purchase Agreement is hereby amended and restated
in its entirety as follows:
SECTION 6.6 ALTERNATIVE TRANSACTION. The Sellers or their Affiliates,
or any of their respective officers, directors, employees or professionals
shall not initiate, solicit encourage or facilitate an Alternative
Transaction; provided that, if the Sellers receive any inquiry, proposal,
request for information or offer in connection with a proposed Alternative
Transaction, the Sellers may provide information or participate in
discussions necessary to fulfill their fiduciary obligation (as advised by
counsel) to maximize the value of their estates; and provided, further, that
filing and serving any application or other pleading (including publication
of notice) seeking to approve this Agreement and the transactions
contemplated hereby with the U.S. Bankruptcy Court or the Canadian
Bankruptcy Court shall not constitute the solicitation of an Alternative
Transaction. The Sellers agree to provide promptly to the Buyer copies of
any written inquiries or written requests for information regarding an
Alternative Transaction (and any written response furnished by any of the
Sellers in response to any oral inquiry or request for information regarding
an Alternative Transaction) and any written bids or proposals for an
Alternative Transaction.
3. Section 6.8(a) of the Purchase Agreement is hereby amended to delete
the reference to the Break-Up Fee Order in clause (i) and to delete clause (ii)
in its entirety.
4. Section 14.1(h) of the Purchase Agreement is hereby deleted in its
entirety. Section 14.2(b)(i) is hereby amended to delete the reference therein
to Section 14.1(h).
5. Section 14.2(b)(iv) of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
(iv) By the Buyer or the Sellers, as the case may be, pursuant to
Section 14.1(g), the Buyer's sole and exclusive remedy shall be (a) the
return of the Deposit to the Buyer, together with any interest accrued
thereon, (b) the payment of a break-up fee of $2,000,000, which the Sellers
shall cause the Person(s) (other than the Sellers) to the Alternative
Transaction to pay at the closing of such Alternative Transaction directly
to the Buyer and (c) the Sellers' reimbursement of the Buyer's reasonable
and actual documented out-of-pocket costs and expenses incurred after
February 1, 1999 in connection with this Agreement up to a maximum amount of
$500,000.
6. Except as expressly modified herein, all terms of the Purchase
Agreement shall remain in full force and effect.
-2-
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 to Asset Purchase Agreement as of the date first above written.
LIVENT INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
LIVENT INTERNATIONAL INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title:
LIVENT (U.S.) INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
LIVENT REALTY (NEW YORK) INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
LIVENT REALTY (CHICAGO) INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
SFX ENTERTAINMENT, INC.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
-3-
AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT
This Amendment No. 2 to Asset Purchase Agreement, dated as of August 9,
1999 (this "Amendment"), is made and entered into by and among Livent Inc., an
Ontario corporation ("Livent"); Livent International Inc., a Barbados
corporation ("Livent International"); Livent (U.S.) Inc., a Delaware corporation
("Livent U.S."); Livent Realty (New York) Inc., a Delaware corporation ("Livent
N.Y."); Livent Realty (Chicago) Inc., a Delaware corporation ("Livent Chicago,"
and together with Livent, Livent International, Livent U.S. and Livent N.Y.,
collectively, the "Sellers"); and SFX Entertainment, Inc., a Delaware
corporation (the "Buyer"). Capitalized terms used but not otherwise defined
herein shall have the meaning accorded such terms in the Purchase Agreement (as
defined below).
W I T N E S S E T H:
WHEREAS, the Sellers and the Buyer are parties to that certain Asset
Purchase Agreement, dated as of May 28, 1999, as amended as of June 14, 1999 (as
so amended, the "Purchase Agreement");
WHEREAS, in accordance with Section 6.8 of the Purchase Agreement, the
Sellers have taken certain actions in connection with (i) the U.S. Bankruptcy
Court's entry of the U.S. Order, and (ii) the Canadian Bankruptcy Court's entry
of the Canadian Order;
WHEREAS, (i) the U.S. Bankruptcy Court has approved the U.S. Order with
certain changes thereto, as set forth in Exhibit A attached hereto (the "Final
U.S. Order"), and (ii) the Canadian Bankruptcy Court has approved the Canadian
Order with certain changes thereto, as set forth in Exhibit B attached hereto
(the "Final Canadian Order"); and
WHEREAS, the parties hereto desire to enter into certain amendments to
the Purchase Agreement in connection with the approval of the Final U.S. Order
and the Final Canadian Order and certain other matters, as set forth herein;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the parties hereto hereby agree as follows:
1. The definition of "U.S. Order" is hereby amended and restated to
mean the Final U.S. Order, and Exhibit D, and all references thereto, are hereby
deleted from the Purchase Agreement.
2. The definition of "Canadian Order" is hereby amended and restated to
mean the Final Canadian Order, and Exhibit A, and all references thereto, are
hereby deleted from the Purchase Agreement.
3. The clause "the amount of $77,800,000 in cash (the "Initial Cash
Amount")," set forth in Section 2.2(a)(i) of the Purchase Agreement is hereby
amended and restated to state "the amount of $90,800,000 in cash (the "Initial
Cash Amount"),".
4. The definition of "Warrants", and all references thereto, are hereby
deleted from the Purchase Agreement.
5. Exhibit E and Sections 2.7(g), 2.9, 3.3(d), 5.6, 6.8(d)(iii) and
6.10 of the Purchase Agreement, and all references thereto, are hereby deleted
from the Purchase Agreement in their entirety.
6. Exhibit G and Sections 3.2(i) and 3.3(g) of the Purchase Agreement,
and all references thereto and to the "Registration Rights Agreement", are
hereby deleted from the Purchase Agreement in their entirety.
7. Section 4.18 of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
SECTION 4.18. INVESTMENT UNDERTAKING.
(a) Each Seller acknowledges that the Put Obligation will be a
"restricted security" within the meaning of Rule 144 promulgated under the
General Rules and Regulations of the Securities Act. Each Seller
acknowledges that it is acquiring the Put Obligation for the Seller's own
account and not with a view to its distribution within the meaning of
Section 2(11) of the Securities Act. Each Seller acknowledges that the
Seller understands that it must bear the economic risk of the investment
indefinitely because the Put Obligation may not be sold, hypothecated or
otherwise disposed of unless subsequently registered under the Securities
Act and applicable state securities laws or an exemption from registration
is available.
(b) Each Seller is a sophisticated investor which either (i) has such
knowledge and experience in financial and business matters such that it is
capable of evaluating the merits and risks of its investment in the Put
Obligation being acquired hereunder, or (ii) has obtained independent
professional financial advice sufficient to enable it to evaluate the merits
and risks of its investment in the Put Obligation being acquired hereunder.
(c) The only Seller who will be issued the Put Obligation pursuant to a
trade (as such term is understood for the purposes of Canadian securities
laws) in Canada is Livent. The Put Obligation to be issued to Livent is to
be issued pursuant to the exemption set out in Section 72(1)(l) of the
Securities Act (Ontario) and Section 2.11 of Rule 45-501 of the Ontario
Securities Commission. Livent acknowledges that the assets being transferred
to the Buyer in consideration for the Put Obligation have a fair value of
not less than Canadian $150,000. Livent further acknowledges that the Put
Obligation to be issued to it will be subject to hold periods under Canadian
securities laws.
8. The form of the Put Obligation (Exhibit C to the Purchase Agreement)
is hereby amended by deleting the reference to "$17,401,186" in Section
(1)(b)(i) of the Put Obligation and substituting "$18,395,539" therefor.
9. Item 1 on Schedule 2.3(e) is hereby deleted and the following
substituted therefor:
-2-
"1. Fosse/Chicago Tour $3,391,535".
10. This Amendment shall be construed, performed and enforced in
accordance with, and governed by, the laws of the State of New York (without
giving effect to the principles of conflicts of laws thereof), except to the
extent that the laws of such state are superseded by the U.S. Bankruptcy Code.
11. Except as expressly amended herein, all terms of the Purchase
Agreement shall remain in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
2 to Asset Purchase Agreement as of the date first above written.
LIVENT INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
LIVENT INTERNATIONAL INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Operating Officer
LIVENT (U.S.) INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
LIVENT REALTY (NEW YORK) INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
LIVENT REALTY (CHICAGO) INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
SFX ENTERTAINMENT, INC.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
