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EXHIBIT 2(l)
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of the ____ day of __________, 1996, by
and between FOX THEATRES CORPORATION, a Pennsylvania corporation (hereinafter
"Seller"), and CARMIKE CINEMAS, INC., a Delaware corporation, and EASTWYNN
THEATRES, INC., an Alabama Corporation (hereinafter collectively "Buyer").
W I T N E S S E T H :
WHEREAS, Seller operates certain theatres for the exhibition of motion
pictures; and
WHEREAS, the Boards of Directors of Seller and the Board of Directors of
Buyer deem it appropriate to effect the sale and transfer of certain of
Seller's assets and liabilities pursuant to the agreement set forth
hereinafter.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, and for other consideration, the receipt, adequacy and
sufficiency of which is hereby acknowledged, the parties hereto have agreed,
and do hereby agree, as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement shall have the meanings set
forth below:
1.01. "AFFILIATE" - Any person, firm, corporation, partnership or
association controlling, controlled by, or under common control with another
person, firm, corporation, partnership or association.
1.02. "AGREEMENT" - This Agreement, including the Exhibits attached
hereto, and the Schedules delivered pursuant hereto.
1.03. "CLOSING" - The Closing referred to in Section 2.05 hereof.
1.04. "CLOSING DATE" - The date referred to in Section 2.05 hereof.
1.05. "CONTINUING CONTRACTS" - The agreements relating to the operation
and maintenance of the Property (excluding film exhibition agreements), which
are described on Exhibit "A" attached hereto, together with any contracts in
the nature thereof executed
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by Seller after the date hereof, as herein permitted and approved in writing by
Buyer, except any contract which is terminable with thirty (30) days notice
without penalty.
1.06. "ERISA" - The Employee Retirement Income Security Act of 1974, as
amended.
1.07. "EXCLUDED PROPERTY" - That Property set forth on Schedule 1.07.
1.08. "EXHIBITS" - Those Exhibits referenced in this Agreement and
incorporated herein by such reference.
1.09. "GUARANTEED FILM CONTRACTS" - Those film contracts which require
Seller to pay a guaranteed minimum film rental amount, notwithstanding that the
film may not have earned same.
1.10. "IMPOSITIONS" - All real estate taxes, special and benefit
assessments, sewer rents, water rates, personal property taxes, and all other
taxes, assessments and charges of every kind, which may affect the Property or
any part thereof by virtue of any present or future law of any governmental
authority.
1.11. "INTANGIBLE PROPERTY" - All intangible property now or on the
Closing Date owned by Seller pertaining solely to the Property, including all
assignable business licenses, warranties, the Continuing Contracts (to the
extent assignable), trademarks, trade names, telephone exchange numbers to the
extent assignable, plans and specifications, blueprints, engineering
information and reports, and governmental approvals.
1.12. "LANDLORD'S CONSENT" - Consent of the Landlords referred to in
Section 2.07 (e) to the transfer and assignment of the leases described in
Schedule 3.09 (a).
1.13. "LEASEHOLD IMPROVEMENTS" - All right, title and interest of Seller
in leasehold improvements of any kind and description now, or on the Closing
Date, located on or which are a part of the Leased Premises.
1.14. "LEASEHOLD INTERESTS" - All and singular the interests, estates,
rights, privileges, titles, easements, options and appurtenances belonging or
in any way appurtaining to the Seller as tenant under the Leases.
1.15. "LEASES" - The leases for the Theatres and all amendments and
modifications thereof, all of which are described on Exhibit "C" attached
hereto.
1.16. "LEASED PREMISES" - The premises demised by the Leases.
1.17. "LICENSE" - Rights to use certain trade names, trademarks and logos
pursuant to the terms and conditions set forth on Schedule 1.17 attached
hereto.
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1.18. "PERMITTED LIENS" - (i) Liens and taxes due and payable and which
are prorated pursuant to Section 2.04 hereof; (ii) liens that shall be
discharged prior to or at Closing; and (iii) Permitted Title Exceptions.
1.19. "PERMITTED TITLE EXCEPTIONS" - With respect to the Leased Premises
those preprinted exceptions in a standard form ALTA extended coverage policy of
title insurance and those encumbrances set forth on Schedule 1.19, and in any
event, zoning restrictions, easements, licenses or other restrictions on the
use of the Leased Premises so long as same do not impair the use, value or
marketability of such Leased Premises in any material respect.
1.20. "PERSONAL PROPERTY" - All tangible personal property now or on the
Closing Date owned by Seller and used in the operation of the Leased Premises,
including, but not limited to, all supplies, service and concession equipment,
heating, ventilating and cooling equipment, fixtures, inventory, cleaning
equipment and supplies, alarm systems, screens, projection equipment, theatre
seats, cash registers, display cases, acoustical wall panels, sound systems,
speakers, computers, office equipment and desks, popcorn poppers and storage
bins, linoleum, carpets, drapes, laundry tubs and trays, washers, dryers, ice
boxes, refrigerators, heating units, stoves, ovens, water heaters,
incinerators, furniture and furnishings, and communication systems, now or on
the Closing Date affixed or attached to or placed upon and used in connection
with the operation of the Theatres or any of them (without limiting the
generality of the foregoing, the personal property listed on Exhibit "B"
attached hereto shall be included in Personal Property); provided, however,
Personal Property shall not include (a) accounts receivable as of the Closing
Date, and (b) cash and cash equivalents (including certificates of deposit,
commercial paper, and investments in securities on hand or in banks as of the
Closing Date, (c) proprietary items including, but not limited to, uniforms,
and film transfer stock, (d) the Excluded Property.
1.21. "XXXXX CASH" - Sums of cash left in the Theatres by Seller on the
Closing Date and reimbursed to Seller by Buyer at Closing.
1.22. "PROPERTY" - The Leasehold Interests, Leasehold Improvements,
Personal Property and Intangible Property, less and excepting the Excluded
Property.
1.23. "PURCHASE PRICE" - The Purchase Price for the Property is NINETEEN
MILLION ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($19,100,000.00), payable as
set forth in paragraph 2.02 hereof.
1.24. "SCHEDULES" - Those Schedules referred to in this Agreement, and
incorporated herein by reference.
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1.25. "THEATRES" - The twelve (12) locations consisting of sixty-one (61)
screens for the exhibition of motion pictures as specifically set forth on
Exhibit "D".
1.26. "THEATRE LEVEL EMPLOYEE" - Any employee who actually works at a
Theatre location.
The definitions of this section shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The term "person" includes individuals, partnerships, corporations, trusts and
other associations. The words "include", "includes" and "including" shall be
deemed to be followed the phrase "without limitation". The words "herein",
"hereof", "hereunder" and similar terms shall refer to this contract, unless
the context otherwise requires.
Attached to this contract and incorporated herein by reference are the
following:
EXHIBIT A - CONTINUING CONTRACTS
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - LEASES
EXHIBIT D - THEATRES
EXHIBIT E - FORM OF XXXX OF SALE
EXHIBIT F - FORM OF COVENANT NOT TO COMPETE
AGREEMENT
EXHIBIT G - FORM OF LANDLORD'S CONSENT
AND ESTOPPEL
EXHIBIT H - SELLER'S REQUIRED INSURANCE
EXHIBIT I - FORM OF ASSIGNMENT
EXHIBIT J - AUTHORIZATION AND RELEASE NOTICE
EXHIBIT K - MANAGEMENT AGREEMENT
EXHIBIT L - LEASE AND CONTINUING CONTRACTS
ACCEPTANCE AND ASSUMPTION AGREEMENT
EXHIBIT M - UNCONDITIONAL GUARANTY AND
REIMBURSEMENT AGREEMENT
SCHEDULE 1.07 - EXCLUDED PROPERTY
SCHEDULE 1.17 - LICENSE
SCHEDULE 1.19 - PERMITTED TITLE EXCEPTIONS
SCHEDULE 2.02(a) - WIRING INSTRUCTIONS
SCHEDULE 2.03 - PURCHASE PRICE ALLOCATION
SCHEDULE 2.06(a) - CLOSING STATEMENT
SCHEDULE 3.02(a) - CASH FLOW INFORMATION
SCHEDULE 3.02(c) - 90/10 AMOUNTS
SCHEDULE 3.02(d) - SEATS BY AUDITORIUM
SCHEDULE 3.03(a) - TRANSACTIONS NOT IN ORDINARY COURSE
SCHEDULE 3.03(f) - AMENDMENTS OR TERMINATIONS
SCHEDULE 3.04 - TAX RETURNS
SCHEDULE 3.06 - GOVERNMENTAL NOTIFICATIONS
AND CONSENTS
SCHEDULE 3.07 - COMPLIANCE WITH OTHER INSTRUMENTS
SCHEDULE 3.09(a) - DESCRIPTION OF REAL PROPERTY LEASED
TO SELLER
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SCHEDULE 3.10 - LICENSES, PERMITS AND TRADEMARKS
SCHEDULE 3.11 - INSURANCE
SCHEDULE 3.12 - DEFAULTS
SCHEDULE 3.13 - LITIGATION
SCHEDULE 3.14 - COMPLIANCE WITH LAWS
SCHEDULE 3.16(a) - LABOR MATTERS
SCHEDULE 3.16(c) - FAILURE TO COMPLY WITH LAWS
REGARDING
EMPLOYMENT OF THEATRE
LEVEL EMPLOYEES
SCHEDULE 3.17 - CONTRACTS AND COMMITMENTS
SCHEDULE 3.19(a) - EMPLOYEE BENEFIT PLANS
SCHEDULE 3.19(b) - WELFARE PLANS
SCHEDULE 3.23 - ENVIRONMENTAL MATTERS
SCHEDULE 3.24 - DISCOUNTS AND GIFT CERTIFICATES
SCHEDULE 3.25 - ROOF WARRANTIES
SCHEDULE 7.03 - GOVERNMENTAL NOTIFICATIONS
AND CONSENTS REQUIRED BY BUYER
ARTICLE II
PURCHASE AND SALE OF PROPERTY
2.01. Agreement to Sell. Pursuant to the terms and conditions of this
Agreement, at Closing Seller agrees to sell, convey, transfer, assign and
deliver to Buyer, and Buyer agrees to purchase from Seller all of the Property
owned and used by Seller in the operation of its motion picture exhibition
business in the Theatres.
2.02. Purchase Price. The Purchase Price for the Property will be paid
to the Seller as follows:
(a) At Closing, Buyer shall pay and deliver by wire transfer to
Seller, pursuant to wiring instructions set forth on Schedule 2.02 (a), the
Purchase Price.
2.03. Purchase Price Allocation. The Purchase Price will be allocated to
the Property as shown on Schedule 2.03, and each of the parties agree to report
this transaction for Federal income tax purposes in accordance with the
allocation shown on said schedule.
2.04. Closing Adjustments.
(a) The following items affecting the Property shall be
apportioned, adjusted or otherwise accounted for between Seller and Buyer as of
the Closing Date:
(i) Subject to paragraph (d) of this Section, rent,
additional rent, common area maintenance, payments to merchants' associations
or similar business promotion organizations, and all other charges payable by
Seller as tenant under the Leases as follows: (1) any charge payable on a
monthly basis which is subject to year end adjustment shall be prorated for
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the month in which the Closing Date shall occur and any year end adjustment
thereof shall be paid by, or the refund from the lessor paid to, Seller and
Buyer in proportion to their respective payments thereof (i.e., Seller to make
all such payments prior to the Closing Date and Buyer to make all such payments
after the Closing Date), and (2) Impositions under the Leases not payable
monthly but payable in full after the Closing at the end of a lease year or
tax fiscal year, as provided in the respective Leases, shall be prorated as of
the Closing Date but Seller will pay Buyer its share thereof within 30 days
after Buyer furnishes Seller the billing and substantiation thereof received
from each respective lessor;
(ii) Buyer shall pay Seller on the Closing Date for any
security deposits held by lessors under the Leases, and the Seller's xxxxx cash
at each theatre;
(iii) Reduced admission tickets, group tickets or
so-called other "discount tickets" (collectively "Discount Tickets") issued by
Seller prior to the Closing Date and presented by customers for admission to
the Theatres on or after the Closing Date shall be honored by Buyer but may be
redeemed by Buyer from Seller for the amount shown on the Discount Ticket as
the cost paid to Seller for such Ticket. Seller shall also reimburse Buyer in
the amount of any gift certificates issued by Seller prior to the Closing Date
and used at the Theatres subsequent to the Closing Date, when, as and in the
amount said gift certificates are redeemed, provided, however, Buyer shall not
be obligated to honor any such gift certificate or Discount Ticket after one
(1) year immediately following the Closing Date. Buyer shall (and hereby
covenants and agrees to) be bound by all free admission passes distributed
prior to the Closing Date by Seller or Seller's authorized agents to third
parties. Any monies which Seller shall owe Buyer for reimbursement for
Discount Tickets that are presented for payment to Seller within a calendar
month in the manner required herein shall be paid to Buyer by the 30th day of
the next following calendar month.
(b) General real property taxes and other Impositions imposed upon
or assessed against the Property (and not otherwise payable by Seller as tenant
under the Leases directly to the lessors thereunder or payable by such lessors
without any obligation of payment on the part of Seller) shall be remitted to
the collecting authorities by Seller if the same are due and payable on or
before the Closing Date, and by Buyer if due and payable thereafter; provided,
however, such real property taxes and other Impositions imposed upon or
assessed against the Property for the current tax fiscal year in which the
Closing Date occurs ("Proration Period") shall be apportioned and prorated
between Seller and Buyer on and as of the Closing Date with Buyer bearing only
the expense of that proportion of such Impositions that the number of days in
the Proration Period following and including the Closing Date bears to 365. If
the amount of any such taxes, assessments and other Impositions to be borne by
the parties hereto, as above provided, is not ascertainable on the Closing
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Date, Seller shall pay to Buyer its share of the amount of such taxes,
assessments or other Impositions within 15 days after receipt by Seller of the
appropriate tax xxxx(s) evidencing the amount thereof.
(c) Seller shall pay all utility costs in respect of the Leased
Premises (except to the extent the lessors are liable therefor under the Leases
or such costs are a part of a lease charge to be prorated pursuant to clause
(i) of paragraph (a) of this Section) incurred prior to the Closing Date, and
those incurred thereafter shall be paid by Buyer. If the utility charges for
the last utility period cannot be ascertained on the Closing Date, then at such
subsequent date as all utility bills for such utility period have been
obtained, the parties shall promptly pay their respective prorated amounts. Any
deposits of Seller held by utility companies shall be returned to Seller, and
Buyer shall be responsible for making its own deposits with the utility
companies.
(d) With respect to any percentage rent (as defined in the
respective leases) payable under the Leases for the applicable lease years
thereunder during which the lease assignments occur, the percentage rent
(taking into account any applicable credits or adjustments) shall be prorated
between the Buyer and Seller such that each party shall pay when due that
percent of the total percentage rent payable which equals such party's
respective gross receipts (as defined in the respective leases) divided by the
total gross receipts for such lease year.
(e) Seller and Buyer shall also make such other adjustments or
apportionments with respect to the Property as may be necessary to carry out
the intention of the parties hereto so that Buyer shall not be liable for
matters accruing or occurring prior to the Closing Date and that Seller shall
not be liable for matters accruing or occurring from and after the Closing Date
and that Seller shall bear all of the expenses and burdens, and shall be
entitled to all of the benefits and income, of and from ownership of the
Property prior to the Closing Date and Buyer shall bear all such expenses and
burdens and shall be entitled to all such benefits and income from and after
the Closing Date.
(f) The foregoing adjustments shall be determined and payment made
from one party to the other (as the case may be) on the Closing Date to the
extent they are known and agreed to by both parties; otherwise, such
adjustments shall be determined as soon as possible after the Closing Date and
the adjustments, if any, shall be determined and payment made by the party
owing the adjustment to the other within 30 days after the adjustment is
determined.
2.05. Closing Date and Place. The Closing of the transactions
contemplated by this Agreement shall take place at the offices of Xxxxxx, Xxxx
& Xxxxxxx, Boston, MA, at 12:00 Noon on February 23, 1996, or on such other
date prior thereto as may be agreed by the parties hereto (the Closing Date).
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2.06. Buyer's Performance at Closing. At Closing, Buyer shall:
(a) Pay and deliver by wire transfer the Purchase Price as shown
on the Closing Statement to be attached hereto as Schedule 2.06 (a) at Closing.
(b) Deliver to Seller a Certificate of the Secretary of Buyer
stating that this Agreement and other instruments and documents executed in
connection herewith have been duly authorized by the Board of Directors of
Buyer and setting forth the names, titles, signatures and attesting to the
incumbency of those persons authorized to execute this Agreement and the
instruments and documents executed in connection herewith. Copies of all
resolutions pertaining to such authorization shall be attached to the
certificate.
(c) Pay and deliver by wire transfer the amount representing
Seller's cost for the concession inventory (if known) located in the Theatres,
the amount of security deposits and prepaid expenses (if known at Closing) for
which Buyer shall benefit after Closing, and the amount of Xxxxx Cash in the
Theatres. In the event Seller's cost for the concession inventory and the
amount of any prepaid expenses is not known at Closing, same shall be paid as
soon as determined.
(d) Deliver to Seller the Lease and Continuing Contracts
Acceptance and Assumption Agreement whereby Buyer assumes Seller's obligations
under the Leases and Continuing Contracts, in form and substance substantially
as set forth on Exhibit L attached hereto.
2.07. Seller's Performance at Closing. At Closing, Seller will deliver
to Buyer:
(a) All bills of sale for the Personal Property, substantially in
form attached hereto as Exhibit "E";
(b) Assignments (to the extent assignable), substantially in form
attached hereto as Exhibit "I", of licenses and permits, executory contracts,
leases, easements and rights of way accompanied by certain covenants and
endorsements as are necessary in order to effectively vest in Buyer good,
indefeasible and marketable title to the Property free and clear of all
encroachments, leases, tenancies, liens, encumbrances, mortgages, conditional
sales and other title retention agreements, pledges, covenants, restrictions,
reservations, easements and options except for the Permitted Liens;
(c) Actual possession and operating control of the Property;
(d) A certificate of Seller, executed by an officer, certifying
that the persons executing this Agreement and
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other documents consummating transactions contemplated by this Agreement have
been duly and validly authorized by its Board of Directors so to do, and that
except as set forth on Schedule 2.07(d), no consent or approval of any other
person is necessary. Such certificate shall set forth the names, titles, and
signatures and attest to the incumbency of those persons authorized to execute
this Agreement and all Agreements, instruments and documents in connection
herewith. Copies of all resolutions pertaining to such authorization shall be
attached to the certificate;
(e) Any and all consents of third parties necessary for the
transfer and assignment of the Property, including, but not limited to, any
required Landlords' Consents to the assignment of all Leases for the Theatres
with no changes in the terms and conditions thereof.
(f) The Authorization and Release Notice in form attached hereto as
Exhibit "J" transferring all of Seller's right, title and interest in and to
the telephone numbers shown thereon.
(g) The License.
(h) The Unconditional Guaranty and Reimbursement Agreement
regarding Asset Purchase Agreement of Xxxxxx X. Xxx in form and substance
substantially attached hereto as Exhibit "M".
2.08. Seller's Performance At and After Closing. Seller hereby covenants
and agrees that at or after the Closing, as required, Seller shall:
(a) At the request of Buyer, take all action reasonably necessary
to put Buyer in actual possession of the Property, and execute and deliver such
further instruments of conveyance, sale, transfer and assignment, and take such
other action as may be reasonably necessary to transfer to Buyer any of the
Property and confirm the title of Buyer to the Property. Further, after
Closing, should Seller be a necessary party in order for Buyer to exercise its
rights with respect to the Property, Seller will take reasonable efforts, at
Buyer's expense, to assist Buyer therein;
(b) Pay any governmental taxes or other governmental charges which
may arise out of the transfer of the Property, including without limitation any
transfer, documentary stamp tax, surtax, gross receipts, excise, title, and
sales and use tax. The parties agree to cooperate in taking such steps as may
be necessary or appropriate in order to take advantage of any exemptions from
any such governmental taxes, or other charges which may be available with
respect to the transfer of the Property;
(c) For a period of two (2) years following the Closing Date,
provide Buyer access to any operating records, accounting records,
correspondence, memoranda, and other records and data relating to the ownership
or operation of the Property, which are in Seller's possession, and assist
Buyer in the
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preparation of any financial statements and/or completion of any
audit of financial statements that may be required to meet SEC Regulations;
(d) At the request of Buyer, prosecute or otherwise enforce in
Seller's name for the benefit of Buyer, any claims, rights or benefits that are
being transferred to Buyer under this Agreement, and that require prosecution or
enforcement in Seller's name. Any such prosecution or enforcement shall be at
Buyer's expense, unless such prosecution or enforcement is made necessary by a
material breach of this Agreement by the Seller, in which case such prosecution
or enforcement shall be at Seller's sole expense;
(e) Hold Buyer harmless from all charges or liabilities incurred
by the Seller prior to the Closing Date relating to the Property; and
(f) Transfer or deliver to Buyer any and all cash remittances or
property Seller may receive in respect of the Property relating to the periods
after the Closing Date.
2.09. Buyer's Assumption of Certain of Seller's Liabilities and
Obligations. Seller, at Closing, will transfer all of the Property to Buyer
free and clear of any and all claims, liens, mortgages, options, charges,
security interests, assignments, restrictions, easements, actions or demands or
encumbrances whatsoever, except for:
(a) Obligations arising after the Closing Date with respect to
Continuing Contracts and Leases included in the Property as described on
Schedule 3.09 (a),
(b) Permitted Liens, and
(c) The post-closing prorated items included in Section 2.04.
Except as expressly set forth herein, or in any law applicable
hereto, Buyer is not assuming any obligations or liabilities of Seller or of
Seller's business or any liabilities attendant to any of the Property, whether
known or unknown, liquidated or contingent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement for Buyer's performance hereunder, Seller hereby
makes the following representations and warranties, each of which (as qualified
by all Exhibits and Schedules to this Agreement) is true and correct on the
date of this Agreement, shall be true and correct on the Closing Date, except
as otherwise disclosed by Seller to Buyer in a Schedule or Exhibit attached
hereto, and shall survive the Closing and the transactions,
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contemplated by this Agreement for a period of eighteen (18) months from the
Closing Date, and shall be deemed to be independently relied upon by Buyer.
3.01. Legal Status. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the Commonwealth of
Pennsylvania. Seller has all requisite corporate power and authority to own
its properties, to carry on its business, as now being owned and operated by
it, to enter into this Agreement, and to perform its obligations hereunder.
3.02. Financial Data.
(a) Schedule 3.02 (a) contains (i) the Theatre Operating Cash Flow
Statement for twelve (12) months ended 7/27/95, (ii) the four (4) quarters
ended 12/29/94; and (iii) statements dated October 26, 1995 and 1994 for the
ten (10) months then ended.
(b) The financial information is prepared from and in accordance
with the books and records of Seller, in accordance with generally accepted
accounting principles consistently applied, and except as stated therein
present fairly the results of operations of the Theatres for the respective
periods indicated.
(c) Schedule 3.02 (c) contains the 90/10 amounts for each screen
included in the Theatres.
(d) Schedule 3.02 (d) lists by auditorium for each of the Theatres
the number of seats in each auditorium.
3.03. Absence of Specified Changes. Since 10/26/95, there has not been
any, except as otherwise provided below:
(a) Transaction by Seller with respect to the Property except in
the ordinary course of business as conducted on that date, except as set forth
on Schedule 3.03 (a).
(b) Debt, obligation or liability (whether absolute or contingent)
incurred by Seller which will not be discharged at or before Closing (whether
or not presently outstanding), which creates a lien upon or otherwise encumbers
the Property;
(c) Mortgage, pledge or other encumbrance of any of the Property,
except for Permitted Liens;
(d) Sale, lease, abandonment or other disposition of any of the
Property, excluding concession inventory;
(e) Labor dispute, strike, work stoppage, or any other occurrence,
event or condition of a similar nature which impacts the Property which
materially impacts Buyer's ability to operate the Property;
(f) Except as set forth on Schedule 3.03 (f), amendment or
termination of any contract, Lease, agreement or
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license included in the Property to be assigned to Buyer in which
Seller is a party;
(g) Agreement, other than this Agreement, by Seller to do any of
the acts described in this Section 3.03; or
(h) Except as set forth on Schedule 3.24, arrangement for discount,
promotional or prepaid tickets, admission passes, gift certificates or other
similar arrangement not in the ordinary course of business of Seller, or for
which Seller shall reimburse Buyer.
3.04. Tax Returns. Except with respect to real and personal property
taxes payable after the date hereof, and except as set out on Schedule 3.04,
all known taxes, including without limitation, income, property, ad valorem,
sales, use, franchise, gross receipts, added value, employees income
withholding and social security taxes imposed by the United States, by any
state, municipality, other local government or other subdivision or
instrumentality of the United States, or by any other taxing authority, that
are due or payable by the Seller prior to the Closing, and all interest and
penalties thereon, whether disputed or not, which would result in the
imposition of a lien, claim or encumbrance on the Property or against the Buyer
have been paid in full, all tax returns required to be filed in connection
therewith have been accurately prepared and duly and timely filed, and all
deposits required by law to be made by Seller with respect to employees
withholding taxes have been duly made. Seller is not delinquent in the payment
of any tax, assessment, or governmental charge or deposits which would result
in the imposition of a lien, claim or encumbrance on the Property or against
the Buyer, and has no tax, deficiency or claim outstanding, proposed or
assessed against it, and there is no basis for any such deficiency or claim,
which would result in the imposition or any lien, claim or encumbrance on the
Property or against the Buyer.
3.05. Authorization. The execution and delivery of this Agreement by
Seller, and the consummation by Seller of the transactions contemplated by this
Agreement have been or will be duly and validly authorized, and no further
corporate authorization is necessary on the part of Seller.
3.06. Governmental Notifications and Consents. Except as set forth on
Schedule 3.06, no material notification, consent, authorization, order of
approval of, or filing or registration with any governmental commission, board
or other regulatory body, is required for or in connection with the execution
and delivery of this Agreement by Seller, and the consummation by Seller of the
transactions contemplated hereby.
3.07. Compliance with Other Instruments. Except as specifically
disclosed in Schedule 3.07 to this Agreement, and except such instruments as
will be discharged or in respect of which consents or waivers will be obtained
at or before Closing, the execution and delivery of this Agreement, and the
consummation
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of the transactions of the Seller contemplated by this Agreement will not
result in or constitute any of the following: (i) an event that would
permit any party to terminate any agreement, or to accelerate the maturity of
any indebtedness, or other obligation by which any of the Property may be bound
or affected, or (ii) a breach, violation, or default, or an event that with
notice or lapse of time, or both, would constitute a breach, violation or
default under the Articles of Incorporation or By-Laws of Seller, or any Lease,
assignable license, Continuing Contract, or (iii) a violation of any order,
writ, injunction or decree of any court, administrative agency or governmental
body, or (iv) an event which would result in the creation or imposition of any
lien, charge or encumbrance on any of the Property.
3.08. Personal Property. The Seller has good and marketable title to all
Personal Property included in the Property, free and clear of all liens,
claims, charges, security interests, and other encumbrances of any kind or
nature, except for the Permitted Liens. All of the Seller's machinery,
furniture and equipment included in the Property is located on the premises of
the Theatres, and is set forth on Exhibit "B".
3.09. Real Property.
(a) The documents described in Schedule 3.09 (a) contain a true and
correct description of all real property leased to the Seller included in the
Property, including, to best of Seller's knowledge, the correct name, street
address and telephone number of the Landlord, and the Theatres. Each of the
leases included in the Property disclosed in said Schedule is in full force and
effect, and, except as set forth on said Schedule, Seller has received no
written notice of any existing defaults or events of default, real or claimed,
or events which with notice or lapse of time, or both, would constitute
defaults, the consequences of which, severally or in the aggregate, would have
a material adverse affect on the business or operations of the Seller relating
to or being carried on at the real property in question. Except for the
requirement that the Seller obtain those valid and binding consents pursuant to
Sections 2.07 (e) and 4.08, the continuation, validity and effectiveness of
those leases will in no way be affected by the transactions contemplated by
this Agreement. Seller shall retain its option and any other right to acquire
the Demised Premises referred to as "The Theatre Complex" under The Theatre
Complex Lease, dated May 6, 1993, between J. P. Development Company and Seller.
(b) To the best of Seller's knowledge, the improvements on the real
estate, leased to or used by the Seller conform in all material respects to all
applicable federal, state and local laws, zoning and building ordinances, and
health and safety ordinances, and the property is zoned for the various
purposes for which the real estate and improvements thereon are presently being
used.
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3.10. Licenses, Permits and Trademarks. Schedule 3.10 lists all trade
names used by the Seller exclusively in the operation of the Property. The
Seller has all governmental permits, licenses, and similar authorities
presently issued or granted to or used by the Seller and which are material to
the conduct of its business in the Theatres. The Seller has not received
written notice that its use of any such trade names violates or infringes upon
any rights claimed therein by third parties.
3.11. Insurance. Schedule 3.11 contains a list and brief description of
the policies of fire, liability, and other forms of insurance (except title
insurance) owned or held by the Seller, regarding the Property. The properties
and business of the Seller, consisting of the Theatres, of an insurable nature
are insured to the extent and against such risks customarily insured against
by corporations of similar size and in similar businesses, as required by the
terms of the Leases of the Theatres to which the Seller is a party. All
policies listed on Schedule 3.11 will be outstanding and duly in force on the
Closing Date. The Seller is not now, and on the Closing Date will not be in
default regarding the provisions of any such policies, and has not and shall
not have failed to give any notice or present any claim thereunder in due and
timely fashion.
3.12. Defaults. Except as set forth on Schedule 3.12, there is no
default or claim of purported or alleged default, or state of facts (including
any facts which will exist as a result of the consummation of and performance
under this Agreement), which, with notice or lapse of time, or both, would
constitute a default in any obligation on the part of the Seller to be
performed under any Continuing Contract or agreement which materially affects
the operation of the Property, and those contracts or agreements set out on
Schedule 3.17. The Seller has in all material respects performed, and on the
Closing Date shall have performed, all obligations required to be performed by
it under any such material contract or agreement, and Seller has not waived any
right under any such material contract or agreement.
3.13. Litigation. Except as set forth on Schedule 3.13, Seller has
received no written notice of any actions, suits, investigations or proceedings
(whether or not purportedly on behalf of the Seller) to which the Seller is a
party, and which any of the Property is or may be subject, or which are
pending, or to the best of Seller's knowledge threatened against or affecting
the Seller, or any of the Property, at law, in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign.
3.14. Compliance with Laws. Except to the extent disclosed in Schedule
3.14, (i) the Seller has not been notified that it has failed to comply in any
respect with, or is in default in any respect under any laws, ordinances,
requirements, regulations or orders applicable to its operation of the
Theatres;
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(ii) the Seller is not subject to any judgment, order, writ,injunction or
decree that adversely affects, or might in the future reasonably be expected to
adversely affect its operation of the Theatres; (iii) the Seller is not now,
and on the Closing Date will not be in default concerning any order, writ,
injunction or decree of any federal, state, municipal court or any other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign with respect to the Theatres, and there is no investigation
pending or, to the best of Seller's knowledge, threatened against or affecting
the Seller by any state or federal governmental agency, and Seller has not
received written notice of any investigation pending or threatened against or
affecting the Seller by any state or federal governmental agency, department
or instrumentality that would adversely affect Buyer's operation of the
Theatres after the Closing Date.
3.15. Brokers and Finders. Except for Seller's engagement of Xxxxxx
Capital Corporation which shall be paid by Seller, neither Seller nor any of
its officers, directors or employees have employed any broker, agent or finder,
or incurred any liability for any brokerage fees, agent's commissions or
finder's fees concerning the transactions contemplated hereby.
3.16. Labor Matters.
(a) The Seller is not a party to and has no obligations under any
agreement, collective bargaining or otherwise, with any party regarding the
rates of pay or working conditions of any of the Theatre Level Employees of the
Seller, nor is obligated under any agreement to recognize or bargain with any
labor organization or union on behalf of any of said employees regarding the
operation of the Theatres, other than as shown on Schedule 3.16 (a);
(b) Regarding Seller's operation of the Theatres, to the best of
Seller's knowledge, there is no organization activity among any of the Seller's
employees, and neither the Seller nor any of its officers, directors, employees
or agents has currently been charged or notified of or to the best of Seller's
knowledge threatened with the charge of any unfair labor practice;
(c) Regarding the Seller's operation of the Theatres, the Seller
has not been notified that it has failed to comply with any applicable federal
and state laws and regulations concerning the employer/employee relationship,
and with any of its agreements relating to the employment of its Theatre Level
Employees including, without limitation, regulations or agreement provisions
relating to wages, bonuses, employment practices, hours of work, and the
payment of Social Security taxes, other than as shown on Schedule 3.16 (c).
Regarding the Seller's operation of the Theatres, to the best of Seller's
knowledge, the Seller is not liable, except in the ordinary course of business,
for any unpaid wages, bonuses or commissions or any tax, penalty, assessment or
forfeiture for failure to comply with any of the foregoing; and
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(d) The Buyer shall not be liable to Seller or Seller's employees
for any contractually or legally required severance payments or accrued and
unpaid employee benefits, to which Seller's employees are entitled based on
services rendered to Seller prior to the Closing, including, but not limited
to, pension and profit sharing plans, vacation pay, sick pay, longevity
bonuses, commissions or merit bonuses, and Seller shall indemnify and hold
Buyer harmless from any and all damages, costs and expenses (including
attorneys fees) associated with such payments or benefits which accrue prior to
Closing.
3.17. Contracts and Commitments. Schedule 3.17 contains a list of any
contracts or commitments regarding the Seller's operation of the Theatres to
which the Seller is a party, or by which the Seller benefits, which are not
terminable by the Seller at will, without penalty, and which are not listed or
described on Exhibit "A". Buyer will not have any liability whatsoever for the
contracts and commitments shown on said Schedule 3.17 (a) after Closing.
3.18. Condition of Property. With the exception of the canopy on the
Gold Coast Mall Theatre, Ocean City, MD, and the exterior paint on the Xxxxxx
Theatre, Lebanon, PA, both of which shall be repaired or replaced prior to
Closing by Seller, all items of inventory, machinery and equipment, furniture
and fixtures, and Leasehold Improvements included in the Property are
transferred and sold to Buyer in "AS IS - WHERE IS" condition, with no
warranty, either express or implied, as to condition or fitness for a
particular purpose.
3.19. Employee Benefit Plans.
(a) Except as set forth on Schedule 3.19 (a), there are no Theatre Level
Employee benefit plans, (as defined in Section 3 (3) of ERISA, including
employee pension benefit plans, as defined in Section 3 (2) of ERISA,
maintained by the Seller, or under which the Seller has any present or future
obligation or liability, or under which any employee of the Seller has any
present or future rights to benefits) for which Buyer will have any liability
whatsoever.
(b) There are no welfare plans, other than as set forth on Schedule 3.19
(b), as defined in Section 3 (1) of ERISA covering Theatre Level Employees of
the Seller for which Buyer will have any liability whatsoever.
3.20. Authority. This Agreement constitutes the valid and binding
obligation of the Seller, enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, or other laws affecting creditor
rights generally, or as may be modified by a court of equity, in an action for
specific performance. Except as disclosed on Schedule 3.07, neither the
execution and delivery of this Agreement by the Seller, nor the consummation of
the transactions contemplated hereby will violate any provisions of the
Articles of Incorporation or Bylaws of
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Seller, or any law or any order of any court, or any governmental unit to which
Seller is subject, nor will such execution, delivery or consummation conflict
with, or result in a breach of, or constitute a default under any indenture,
mortgage, lease, agreement or other instrument to which Seller is a party, or
by which any of them is bound, or result in the creation of any lien, charge or
encumbrance upon Seller's assets or properties, or result in acceleration of
the maturity of any payment date of any of Seller's obligations, or increase or
materially and adversely affect the obligations of Seller thereunder to which
the Property is subject.
3.21. Accuracy of Information. No representation or warranty of, or any
information provided to Buyer by Seller in this Agreement, or in any statement,
certificate or schedule furnished by the Seller pursuant hereto, or in
connection with the transactions contemplated hereby, contains, or on the
Closing Date will contain, any untrue statement of a material fact, or omits,
or on the Closing Date will omit, to state any material fact necessary in order
to make the statements contained therein not misleading, and all such
statements, information, representations, warranties, certificates and
schedules shall be true and complete on and as of the Closing Date as though
made on that date, except to the extent otherwise disclosed by Seller to Buyer
on a Schedule or Exhibit attached hereto. To the extent same are in Seller's
possession, true copies of all Leases, Continuing Contracts, labor agreements,
and other instruments (necessary to the Buyer in operation of the Property)
listed on or referred to, or otherwise related to any item referred to in the
Schedules, delivered or furnished to the Buyer pursuant to this Agreement have
been delivered or have been made available, or will upon request be made
available for inspection by the Buyer. Buyer shall be entitled to rely upon
the accuracy of all such written information in the preparation of its filings
with the Securities and Exchange Commission. The Seller shall immediately
notify Buyer of any inaccuracies or omissions in any of such information
previously supplied to Buyer.
3.22. Claims. Except for claims arising under or in connection with
this Agreement, Seller does not nor on the Closing Date will have, any claims
of any nature, whether asserted or unasserted, against Buyer.
3.23. Environmental Matters. To the best of Seller's knowledge, except
items such as cleaning supplies normally found in motion picture theatres
generally, no Hazardous Waste, Hazardous Substances and Hazardous Materials, as
said terms are described under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA") (hereinafter "Waste
Material"), and all other applicable environmental laws, exist, were stored or
disposed of on the Property to be conveyed or assigned hereunder during the
period Seller was in possession of said Property to be conveyed or assigned
hereunder, other than material which may have been temporarily stored thereon
and removed prior to Closing, except as specifically disclosed in Schedule 3.23
to this Agreement. To the best of Seller's knowledge, Seller has no
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knowledge or reason to believe that Waste Material from any source was stored
or disposed of on the Property to be conveyed or assigned at any time other
than material which may have been temporarily stored thereon and removed prior
to Closing. To the best of Seller's knowledge, Seller has at no time
generated, stored or disposed of Waste Material, including, but not limited to,
asbestos, PCBs, and urea formaldehyde foam insulation, as defined in CERCLA,
the Hazardous Material Transportation Act, 49 USC 1801, et. seq., as amended;
the Clean Air Act, 42 USC 7401, et. seq., as amended; the Clean Water Act, 33
USC 1251, et. seq., as amended; the Toxic Substances Control Act, 15 USC 2601,
et. seq., as amended; the Resource, Conservation and Recovery Act, 42 USC 6901,
et. seq., as amended; and the Rivers and Harbor Act, 33 USC 401, et. seq., as
amended; or any other federal and/or state environmental statute, except to the
extent such Waste Material, and their place of generation, interim or final
storage, and site of disposal are identified on Schedule 3.23 to this
Agreement. To the best of Seller's knowledge, no aboveground or underground
storage tanks are located on any of the Property to be conveyed or assigned
hereunder.
3.24. Discounts and Gift Certificates. Except as set forth on Schedule
3.24, there are not outstanding any discount or promotional tickets, gift
certificates, prepaid tickets or admission passes or any other arrangements
allowing the holder thereof to reduced or free admission to any of the
Theatres.
3.25. Roof Warranties. Seller has the roof warranties set forth on
Schedule 3.25, and said roof warranties are in full force and effect.
ARTICLE IV
OBLIGATIONS AND COVENANTS OF SELLER
The Seller covenants and agrees with the Buyer that the fulfillment of
each of the following covenants and agreements constitutes a condition
precedent to the obligations of the Buyer to close hereunder:
4.01. Conduct of the Operation of the Theatres Prior to the Closing Date.
Except to the extent that the Buyer shall otherwise consent in writing from the
date hereof to the Closing Date, the Seller shall:
(a) Operate the Theatres substantially as presently operated, and
only in the ordinary course, and use its best efforts to preserve intact its
good will and reputation, as regards the Theatres, and to preserve its
relationships with persons having business dealings with it, with respect to
the Theatres, consistent with prudent business practices;
(b) Maintain all of the Theatres in normal operating order and
condition, reasonable wear and use excepted; and
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(c) Comply with all laws materially applicable to the operation of
the Theatres, the failure of which will result in a material injury to the
said operation.
4.02. Access and Information. From the date hereof to the Closing Date,
and for two (2) years thereafter, Seller, at Buyer's expense, shall afford to
the Buyer, its counsel, accountants and other representatives, upon reasonable
notice, free and full access to all the offices, properties, books, contracts,
commitments and records of the Seller, as pertains to the Theatres, and furnish
such persons with all information, (including financial and operating data)
concerning the affairs as they reasonably may request, including copies and
extracts of pertinent records, documents and contracts, as pertains to the
Theatres. The Seller shall assist the Buyer, its counsel, accountants and
representatives in their examination of such Seller's books and records.
4.03. Notification of Changes. Between the date hereof and the Closing
Date, Seller shall promptly notify Buyer in writing of any adverse change in
the method of conducting the Seller's operations, any damage to or loss of any
property, or amount of property used in the operation of the Theatres, or the
institution of, or the threat of institution of legal proceedings against the
Seller regarding or affecting the operation of the Theatres, or the status or
conduct of legal proceedings, including investigations by any governmental
agency against the Seller which may affect the operation of the Theatres.
4.04. Certain Acts Prohibited. Between the date hereof and the Closing
Date, Seller, without the prior written consent of Buyer, shall not:
(a) Encumber or permit the encumbrance of the Property, except for
Permitted Liens;
(b) Dispose of or contract to dispose of any of the Property;
except for replacements or substitutes in the ordinary course of business (but
will not sell any of the Theatres).
(c) Enter into any agreement regarding the Theatres that is not
cancelable by the Seller without penalty upon notice of thirty (30) days or
less;
(d) Regarding the Theatres, enter into any lease or contract for
the purchase, lease or acquisition of real estate, or except in the ordinary
course of business contract for the purchase, lease or acquisition of personal
property.
(e) Grant any increase in rates of pay for Theatre Level Employees.
4.05. Insurance. From and after the date hereof and through the Closing
Date, the Seller will maintain all of its insurance policies regarding the
Property in effect as of the date
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hereof; and all property shall be used, operated, maintained and repaired in a
normal business manner, and in accordance with provisions of such insurance
policies relating thereto.
4.06. No Default. The Seller will not at any time after the date
hereof and through the Closing Date do any act or omit to do any act, or
knowingly permit any act or omission to act, that would cause a breach of any
Continuing Contract, lease, employment contract or collective bargaining
agreement regarding the Theatres.
4.07. Compliance with Laws. At all times after the date hereof and
through the Closing Date, the Seller will comply with all applicable laws,
which may be required for the consummation of the transactions contemplated
hereby.
4.08. Consent of Others. To the extent that the consummation of the
transactions provided for herein requires the consent of a third party, whether
to avoid the occurrence of an event of default under any contract, license,
lease or agreement by which the Property are bound or otherwise, the Seller
shall use reasonable efforts to obtain any such consent prior to the Closing
Date. Specifically, Seller shall use reasonable efforts to obtain any and all
consents required and necessary in order to validly and effectually transfer
and assign each of the leases of real property set forth on Schedule 3.09,
without change in the terms and conditions thereof, except as otherwise
provided herein, on which the Theatres are operated by Seller, and are to be
transferred to Buyer.
4.09. No Shopping. From and after the date hereof and until the Closing,
the Seller will not, directly or indirectly, through any officer, director,
agent, broker or otherwise (i) solicit, initiate or encourage submission of
proposals or offers from any third party relating to any acquisition or
purchase of the Property, or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to any of the foregoing, or (iii) otherwise cooperate in any way with, or
assist, or participate in, facilitate or encourage, any effort or attempt by
any other person to do or seek any of the foregoing. The Seller acknowledges
that Buyer is relying on this covenant as a basis for incurring expenses and
executive time and effort in proceeding in good faith towards the consummation
of the purchase hereunder; accordingly, Buyer shall be entitled, in addition to
such legal relief as it may have available to it, to equitable relief
(including without limitation injunctive and specific performance relief) in
the event of a violation of this covenant, it being acknowledged that the
Property represents a unique investment opportunity.
4.10. Covenants Not to Compete. Seller shall enter into an agreement
with Buyer to be in substantially the form attached as Exhibit "F" hereto.
4.11. Termination of Employees. On or before the Closing Date, Seller
shall terminate all of its Theatre Level Employees.
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ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of the Buyer to consummate the transactions provided for
herein are, at the option of the Buyer, subject to the satisfaction in all
material respects of the following conditions precedent on or prior to the
Closing Date.
5.01. Compliance by Seller. All the terms, covenants and conditions of
this Agreement to be complied with and performed by the Seller on or before the
Closing Date shall have been fully complied with and performed.
5.02. Representations and Warranties of Seller. The representations and
warranties of Seller contained herein and in the Schedules, Exhibits and
certificates delivered pursuant hereto, or in connection with the transactions
as contemplated hereby shall be true and correct on and as of the Closing Date
with the same effect as though all such representations and warranties had been
made on and as of that date, and Buyer shall have received a certificate dated
the Closing Date signed by the Seller stating that all such representations
and warranties are true and correct. On the Closing Date such representations
and warranties will not contain, any untrue statement of a material fact, or
omit to state any material fact necessary in order to make the statements
contained therein not misleading, and all statements, information,
representations and warranties of Seller to Buyer contained herein and in the
Schedules, Exhibits and certificates delivered pursuant thereto shall be true
and complete on and as of the Closing Date as though made on that date. True
copies of all available leases, agreements, plans, Continuing Contracts and
other instruments listed on or referred to, or otherwise related to any item
referred to in the Schedules and Exhibits, delivered or furnished to the Buyer
pursuant to this agreement have been delivered or have been made available, or
will upon request be made available for inspection by the Buyer. Buyer shall
be entitled to rely upon the accuracy of all such information, whether provided
orally or in writing, in the preparation of its filings with the Securities
and Exchange Commission.
5.03. No Adverse Change. Except for changes affecting the motion picture
exhibition business generally, there shall not have been any material adverse
change in the operation of the Theatres comprising the Property between
execution hereof and the Closing Date, and the Seller shall have delivered to
Buyer a certificate signed by the Seller dated the Closing Date, to such effect.
5.04. Approval of Legal Matters. All actions, proceedings, instruments
and documents reasonably necessary or reasonably appropriate to Buyer, or its
counsel, to effectuate this Agreement and the consummation of the transactions
contemplated hereby, or incidental thereto shall have been approved by such
counsel.
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5.05. Litigation. No suit shall, at the Closing Date, be pending or
threatened before any court, governmental agency, bureau, board or other
authority in which the transactions contemplated by this Agreement are sought
to be restrained.
5.06. Condition of Property and Risk of Loss. On the Closing Date, all
of the Property including equipment, furniture and fixtures located in the
Theatres shall be substantially in the same condition as at the close of
business on the date hereof except for:
(a) Ordinary use and wear thereof;
(b) Changes occurring in the ordinary course of business between
the date hereof and the Closing Date.
5.07. Uniform Commercial Code Searches; Title Insurance. The Buyer shall
have received Uniform Commercial Code Searches (conducted by Buyer at Buyer's
expense through a date reasonably proximate in time to the Closing Date) of
filings made pursuant to Article 9 thereof in all jurisdictions where the
Theatres are located, which searches shall be in form, scope and substance
reasonably satisfactory to Buyer and its counsel, and which shall not disclose
any liens, security interests or encumbrances not disclosed in a Schedule.
Buyer shall, at Buyer's expense, cause an examination to be made of the
Seller's title to the leased premises upon which the Theatres are located and
such title examination shall only disclose the Permitted Title Exceptions.
Further, Buyer shall have received irrevocable commitments from Mid-South
Title/Lawyers Title, Chicago Title Insurance Company, Commonwealth Land Title
Insurance Company, Lawyers Title of North Carolina or Lawyers Title Insurance
Corporation to issue their standard form ALTA extended coverage policy of title
insurance on the Leasehold Interests, dated as of the Closing Date. If and to
the extent that lien searches or title searches undertaken by Buyer indicate
that any of Seller's representations or warranties made in this Agreement,
including, without limitation, Section 3.08 or 3.09, are not accurate, Buyer
shall notify Seller of any such inaccuracy not less than ten (10) business days
prior to Closing, and Seller shall cure such inaccuracy by taking steps at
Seller's own expense to remove the disclosed lien or defect in title prior to
Closing. If Seller has diligently commenced steps to remove the disclosed lien
or defect in title reflected in such inaccuracy, but has not completed its
steps by the Closing Date, Seller shall be entitled to a reasonable extension
of the Closing for the purpose of completing such cure. If Seller is unable to
correct or cure the lien reflected in such inaccuracy, and Buyer elects to
proceed to close hereunder, or if Buyer does not so disclose such liens or
defects in title to Seller so that Seller may remove or cure the same, Buyer
shall have waived its rights to indemnification under this Agreement arising
out of such liens or defects in title.
5.08. Consents. Seller shall have delivered to Buyer the written consent
of third parties referred to in Section 2.07 (e),
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which consent shall be in substantially the form, scope and substance attached
hereto as Exhibit "G".
5.09. Extension of Leases. Seller shall have delivered to Buyer,
amendment to the Leases of the Wyomissing Theatre, Reading, PA and Sun and Surf
Theatre, Ocean City, MD, whereby the Leases for said Theatres are extended to
terminate no earlier than 12/31/2007, with no other changes in the terms and
conditions of said Leases.
ARTICLE VI
FIRE, CONDEMNATION AND INSURANCE
6.01. Fire, Condemnation and Insurance.
(a) If, prior to the Closing Date, all or a part of the Property
shall be destroyed or damaged by fire or any other casualty, or if all or a
part thereof shall be condemned, in whole or in part, by governmental or other
lawful authority, neither Seller nor Buyer shall have any liability for any such
destruction, damage or condemnation and Buyer shall have the option of (i)
completing the purchase without adjustment in the Purchase Price, in which
event Seller shall comply with its obligations set forth in paragraph (b) of
this Section, or (ii) canceling this Contract and all obligations of Seller and
Buyer hereunder; provided, however, Buyer may not elect to exercise the option
set forth in clause (ii) if the Property shall be damaged or destroyed by fire
or other casualty covered by Seller's Required Insurance, (as defined in
paragraph (c) of this Section) and the cost to repair or replace such damaged
or destroyed Property shall not exceed $250,000 in the aggregate provided
Seller complies with its obligations under paragraphs (b) and (c) of this
Section. Buyer shall exercise one of the aforesaid two options by giving notice
to Seller within 10 days after the giving of notice by Seller to Buyer of the
occurrence of the damage or destruction or condemnation, and the failure of
Buyer to give any notice within said 10 day period shall constitute an election
by Buyer not to cancel this Contract.
(b) In the event of damage to or destruction of the Property or a
condemnation thereof and this Contract is not terminated as provided in
paragraph (a) of this Section, Seller shall have no obligation to restore or
repair the same and Buyer shall accept the same in its then condition at
Closing, but Seller shall pay to Buyer, at Closing, all insurance
or condemnation proceeds received by Seller with respect to such loss or
taking, plus the amount of any deductible under any Required Insurance.
(c) Prior to the Closing Date, Seller shall maintain in full force
and effect on the Property damage insurance coverage ("Required Insurance"), as
presently in effect, a description of which is set forth on Exhibit "H" hereto.
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ARTICLE VII
REPRESENTATIONS, WARRANTIES AND
OBLIGATIONS OF BUYER
The Buyer represents and warrants to the Seller as follows:
7.01. Organization in Good Standing. The Buyer consists of Carmike
Cinemas, Inc. a corporation duly organized and existing, and in good standing
under the laws of the State of Delaware, and Eastwynn Theatres, Inc., a
corporation duly organized and existing, and in good standing under the laws
of the State of Alabama. Each member of Buyer has full corporate power to
carry on its businesses, to own and operate its properties and assets, and to
consummate the transactions contemplated by this Agreement.
7.02. Authority. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Buyer; no further corporate action of any nature is required
pursuant to the Articles of Incorporation and By-Laws of the Buyer; and this
Agreement constitutes the valid and binding obligations of the Buyer, except as
may be limited by bankruptcy, insolvency, or other laws affecting creditors
rights generally, or as may be modified by a court of equity in an action for
specific performance. The execution, delivery and performance of this
Agreement will not violate or result in default under any provision of the
Articles of Incorporation or By-Laws of the Buyer, or any material commitment,
indenture, license or other obligation to which the Buyer is a party, and will
not, to the best knowledge of the Buyer, contravene any law, rule or regulation
of any administrative agency or governmental body or any other order, writ,
injunction or decree of any court, administrative agency or governmental
agency applicable to the Buyer.
7.03. Governmental Notifications and Consents. Except as set forth on
Schedule 7.03, no material notification, consent, authorization, order of
approval of, or filing or registration with any governmental commission, board
or other regulatory body, or any other party, is required for or in connection
with the execution and delivery of this Agreement by Buyer, and the
consummation by Buyer of the transactions contemplated hereby.
7.04. Buyer's Indemnity for Seller's Continuing Liability under Leases.
Buyer hereby covenants and agrees that it shall indemnify and hold harmless
Seller, and Xxxxxx X. Xxx, Xxxxxxx X. Xxx and Xxxxx Xxx, to the extent said
individuals are guarantors under the Leases, from any and all claims, actions,
damages and other liabilities to any person arising out of Buyer's occupancy or
operation of the Theatres on the Premises demised by the Leases or Buyer's
failure to comply, from and after the Closing Date, with the terms and
conditions of the Leases and Continuing Contracts to be assigned to Buyer at
Closing upon which Seller is not released by the applicable Landlord.
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7.05. Carmike Guaranty of Eastwynn's Obligations Under Leases and
Continuing Contracts. Carmike hereby covenants and agrees that it shall
provide financial information and guarantee the performance of any of the
Leases as requested by Landlords therefor.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of the Seller to consummate the transactions provided for
herein are subject to the satisfaction, in all material respects, of the
following conditions on or prior to the Closing Date:
8.01. Compliance by the Buyer. All the terms, covenants and conditions
of this Agreement to be complied with and performed by the Buyer on or before
the Closing Date shall have been fully complied with and performed in all
material respects.
8.02. Representations and Warranties of the Buyer. The representations
and warranties of the Buyer contained herein shall be true and correct, on and
as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date, and
the Buyer shall have furnished to the Seller a certificate dated the Closing
Date and signed by the President or Vice President and Secretary of the Buyer
to such effect.
8.03. Litigation. No suit shall, at the Closing Date, be pending or
threatened before any court, governmental agent, bureau, board or other
authority in which the transactions contemplated by this Agreement are sought
to be restrained, or in connection with which damages or other relief is
sought, or in which any material claim shall be asserted against the Buyer
regarding the Theatres not disclosed herein, or in the Schedules or Exhibits
delivered hereto.
8.04. Approval of Legal Matters. All actions, proceedings, instruments
and documents reasonably necessary or reasonably appropriate to Seller, or its
counsel, to effectuate this Agreement and the consummation of the transactions
contemplated hereby, or incidental thereto shall have been approved by such
counsel.
8.05. Landlord Consents. All Landlord consents required hereunder or
under the Leases have been obtained.
ARTICLE IX
TERMINATION
9.01. Right of Termination. This Agreement and the transactions
contemplated by this Agreement may be terminated at any time prior to the
Closing Date:
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(a) By the mutual consent of the Board of Directors of Buyer and
the Board of Directors of Seller;
(b) By the Board of Directors of Buyer in the event the conditions
set forth in Articles IV and V of this Agreement shall not have been satisfied
or waived by March 31, 1996.
(c) By the Board of Directors of Seller in the event that the
conditions set forth in Articles VII and VIII of this Agreement shall not have
been satisfied or waived by March 31, 1996.
(d) By either the Boards of Directors of Buyer or the Seller if any
action or proceeding before any court or other governmental body or agency
shall have been instituted in good faith by an unrelated third party (i) to
restrain, modify or prohibit the transaction contemplated by this Agreement,
(ii) to recover damages from Buyer or Seller if such action or proceeding,
directly related to this Agreement, could result in the imposition of a
material liability against or affecting the business or properties of the
Buyer or the Seller in the opinion of the party seeking to terminate this
agreement, or (iii) to force Buyer or the Seller to take any action that would
have a material and adverse effect on the business or properties of Buyer or
Seller, directly related to this Agreement, in the opinion of the party seeking
to terminate this Agreement unless either the Buyer or the Seller causes such
action or proceeding to be dismissed on or prior to the Closing Date.
9.02. Notice of Termination. Notice of termination of this Agreement, as
provided for in this Article, shall be given by the parties so terminating to
the other parties hereto, in accordance with the provisions of Section 11.08 of
this Agreement.
9.03. Effect of Termination. In the event that this Agreement is
terminated, this Agreement shall become void, and of no further force and
effect, without liability of any party to any other party.
ARTICLE X
PARTIES' AGREEMENT TO CROSS-INDEMNIFY
10.01. Agreement to Indemnify. Subject to the terms and conditions of
this Article X, each party (the "Indemnifying Party") agrees to indemnify,
defend and hold the other party (the "Indemnified Party) harmless from and
against all claims asserted against, imposed upon or incurred by the other
party by reason of, or resulting from:
(a) A breach or non-fulfillment of any warranty, or any
inaccuracy of any representation contained in, or made pursuant to this
Agreement, or
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(b) A breach or non-fulfillment of any covenant or agreement,
other than a representation or warranty, contained in or made pursuant to this
Agreement; or
(c) Any undisclosed liability, provided that nothing herein shall
require Seller to indemnify Buyer with respect to any liability created by
Buyer on and after the Closing Date.
10.02. Conditions of Indemnification. Obligations and liabilities of the
Indemnifying Party hereunder with respect to claims shall be subject to the
following terms and conditions:
(a) The Indemnified Party shall give the Indemnifying Party notice
of any claim promptly after the Indemnified Party receives notice thereof, and
to the best of Indemnified Party's knowledge advise Indemnifying Party which
representation and warranty, covenant or agreement set forth herein said claim
violates (in no event more than thirty (30) days after Indemnified Party
receives such notice), and the Indemnifying Party will undertake the defense
thereof by representatives of its own choosing reasonably satisfactory to
Indemnified Party. All costs and expenses of such defense (including fees of
counsel), and any settlement or compromise resulting from the defense of any
claim will be paid by the Indemnifying Party.
(b) In the event that the Indemnifying Party, within a reasonable
time after receipt of notice of any such claim, but in no event more than thirty
(30) days after receipt of such notice, fails to defend, the Indemnified Party
will (upon further notice to the Indemnifying Party) have the right to
undertake the defense, compromise or settlement of such claim on behalf, for
the account and risk of the Indemnifying Party, and at Indemnifying Party's
expense, subject to the right of the Indemnifying Party to assume the defense
of such claim at any time prior to settlement, compromise or final
determination thereof.
10.03. Assistance. In the event so requested by the Indemnifying Party,
the Indemnified Party shall use its best efforts to make available all
information and assistance reasonably required in the defense by the
Indemnifying Party of a claim.
10.04. Limitations. The Indemnifying Party's obligation to indemnify the
Indemnified Party as provided in Section 10.01 above is subject to the
condition that the Indemnifying Party shall have been given notice by
Indemnified Party of the claim for which indemnity is sought within eighteen
(18) months after the Closing Date. Except as to claims not seeking payment of
money, Seller shall not be obligated to so save, defend, indemnify and hold the
Buyer harmless from and against, and shall not be obligated to pay or reimburse
Buyer for any claims, demands, causes of action, liabilities or expenses
arising out of or relating in any way to the ownership or use of the Property
(collectively the "Claims") as herein set forth, unless and to the extent that
the aggregate claims of the Buyer for such indemnification exceed the amount of
$15,000.00. For example, in the event Buyer's aggregate Claims
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reach $16,000.00, Seller will be obligated to pay or reimburse Buyer the entire
$16,000.00. In the event Buyer's aggregate Claims are less than $15,000.00,
Seller will not be obligated to pay or reimburse Buyer anything. Further,
Seller's liability hereunder shall not exceed $3,000,000.00 in any event.
ARTICLE XI
MISCELLANEOUS
11.01. Survival of Representations. All statements contained in any
Schedule, Exhibit, document, certificate or other instrument delivered by or on
behalf of the Buyer or the Seller pursuant hereto, or in connection with the
transactions contemplated hereby, shall be deemed representations and
warranties hereunder by the Buyer or the Seller as the case may be. The
representations, warranties and agreements made by the Buyer and the Seller
herein shall survive consummation of the transactions contemplated hereby for
eighteen (18) months after Closing Date, and no audit of the inventories,
properties, financial condition, records or other matters relating to the
Seller shall limit, affect or impair the ability of the Buyer to rely upon the
representations, warranties and agreements of the Seller set forth herein.
11.02. Assignment. This Agreement shall not be assignable by either
party hereto without the written consent of the other, and shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors, assignees and legal representatives.
11.03. Public Announcements. Except as required by law, neither party
shall make any public announcement concerning this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party, such consent not to be unreasonably withheld.
11.04. Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia, USA.
11.05. Amendment. This Agreement may be amended, supplemented or
interpreted at any time by written instrument executed by the parties hereto.
11.06. Expenses; Brokers and Finders Fees. Except for Seller's
engagement of Xxxxxx Capital Corporation, whose fees shall be paid by Seller,
Seller and Buyer agree that there are no brokers or finders fees or commissions
payable to any person employed by Seller or Buyer in connection with the
transactions contemplated by this Agreement, and Seller and Buyer will
indemnify each other with respect thereto, and hold each other harmless
therefrom. Each party hereto shall pay its or his or her own expenses incident
to this Agreement and the transactions contemplated hereby, including all
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fees and expenses of their counsel, whether or not such transaction shall be
consummated.
11.07. Further Assurances. The parties hereto agree and acknowledge that
certain computations, exchange and notification of information and other
actions may be required from time to time, and after the date hereof through
and after the Closing Date with respect to this Agreement. The parties hereto,
and their respective representatives, shall use their best efforts to cooperate
with one another in the expeditious completion of all such computations,
notifications and actions required. Without limiting the generality of the
foregoing, Seller agrees to use its best efforts to assist Buyer with respect
to the resolution of any matters arising in connection with or affecting the
title of the Seller to any of the Property. Seller shall execute and deliver
any and all documents, and will cause any and all other action to be taken,
either before or after the Closing which may be necessary or proper to effect
or evidence the provisions of this Agreement, and the transactions
contemplated hereby.
11.08. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have duly been given if
delivered, or if mailed by United States or Canadian Registered Mail, prepaid,
to the parties or their assignees, at the following addresses (or such other
addresses as shall be given in writing by the parties to one another), or sent
via telecopier to the parties at the telecopier number set forth below:
BUYER:
Xxxx X. Xxxxxxx, III
Carmike Cinemas, Inc.
0000 - 0xx Xxxxxx
Xxxxxxxx, XX 00000
TELEPHONE : 706/000-0000
FAX : 706/000-0000
With a copy to:
X. Xxx Champion, III
Champion & Champion
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
TELEPHONE : 706/000-0000
FAX : 706/000-0000
SELLER:
Fox Theatres Corporation
ATTN: Xxxxxx X. Xxx
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
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With a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
TELEPHONE : 212/000-0000
FAX : 212/000-0000
11.09. Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy. The election of any one remedy by a party hereto shall not constitute
a waiver of the right to pursue other available remedies.
11.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the
same instrument.
11.11. Entire Agreement. This Agreement, the Exhibits hereto, and the
certificates, Schedules and other documents delivered pursuant hereto are
incorporated by reference herein, contain the entire agreement between the
parties concerning the transaction contemplated herein, and supersede all prior
agreements or understandings between the parties hereto relating to the subject
matter hereof. No oral representation, agreement or understanding made by any
party hereto shall be valid or binding upon such party or any other party
hereto. The parties hereto agree that the Letter of Intent dated January 4,
1996 between the parties is superseded hereby.
11.12. Additional Documents. The parties hereto will at any time after
the date hereof sign, execute and deliver, or cause others so to do, all such
powers of attorneys, deeds, assignments, documents and instruments, and do or
cause to be done all such other acts and things as may be necessary or proper
to carry out the transactions contemplated by this Agreement.
11.13. Captions and Section Headings. The captions and section headings
used herein are for convenience only, and are not a part of this Agreement, and
shall not be used in construing it.
11.14. Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the arbitration rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.
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11.15. Schedules. To the extent that identical information may be
required by two or more Schedules hereto, such information need be supplied on
only one Schedule if appropriate cross-references are made on such other
Schedules, or if the information is readily available on another Schedule, or
in the Agreement.
11.16. Bulk Transfer. The parties hereby waive the applicable provisions
of the Uniform Commercial Code relating to Bulk Transfers in the states in
which the Property is located, and Seller hereby indemnifies Buyer from
Seller's failure to comply with such provisions.
ARTICLE XII
BUYER'S MANAGEMENT OF CERTAIN
OF SELLER'S THEATRES
At Seller's option, Buyer and Seller will enter into a Management
Agreement in form substantially as set forth on Exhibit "K" attached hereto
whereby Buyer will manage the Festival 8 Theatre, Pompano Beach, FL, the
Sunrise 8 Theatre, Sunrise, FL, the Fox Xxxxx Xxxxxx Theatre, Ocean City, MD
and the Fox East Theatre, Xxxxxxx, PA. Seller will hold Buyer harmless for any
of Buyer's actions in operating said theatres, other than gross negligence, and
Seller agrees to pay and be wholly responsible for payments of rent and other
lease related costs to Landlords, and generation of reports to said Landlords.
ARTICLE XIII
AGREEMENT REGARDING FOX XXXXX XXXXXX
THEATRE, OCEAN CITY, MD, AND FOX EAST
THEATRE, XXXXXXX, PA
Seller covenants and agrees that from and after the Closing, and through
the expiration of the Leases and any extensions thereof, neither the Fox Xxxxx
Xxxxxx Theatre, Ocean City, MD, nor the Fox East Theatre, Xxxxxxx, PA will be
operated as "First Run", nor shall said Theatres be expanded or additional
screens added thereto. Seller will deliver to Buyer at Closing an agreement
in recordable form evidencing the foregoing prohibition, which shall be
recorded to provide notice thereof to any subsequent purchasers of Seller's
leasehold interest in said Theatres.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
on the day and year first above written.
SELLER:
Signed, sealed and delivered FOX THEATRES CORPORATION
by SELLER in the presence of
BY: /s/
/s/ Xxxx X. Xxxxxxx -----------------------------
---------------------------- Title: President
Witness ---------------------
/s/ Xxxxxxx X. Xxxxxx ATTEST: /s/ Xxxxx Breneaser
---------------------------- --------------------------
Notary Public Title: Assistant Secretary
---------------------
[Notary Seal]
(Corporate Seal)
BUYER:
Signed, sealed and delivered CARMIKE CINEMAS, INC.
in the presence of:
BY:
---------------------------- ---------------------------
Witness President
---------------------------- ATTEST:
Notary Public -----------------------
Secretary
(Corporate Seal)
Signed, sealed and delivered EASTWYNN THEATRES, INC.
in the presence of:
---------------------------- BY:
Witness ---------------------------
President
---------------------------- ATTEST:
Notary Public -----------------------
Secretary
(Corporate Seal)
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