Exhibit 2.01
AGREEMENT OF PURCHASE AND SALE
between
UNITED ARTISTS THEATRE CIRCUIT, INC.
UNITED ARTISTS PROPERTIES I CORP.
MAMARONECK PLAYHOUSE HOLDING CORP.
("Seller")
and
CCC BRONXVILLE CINEMA CORP.
CCC MAMARONECK CINEMA CORP.
CCC WAYNE CINEMA CORP.
CCC CINEMA 304 CORP.
CCC LARCHMONT CINEMA CORP.
CCC BC REALTY CORP.
("Purchaser")
and
CLEARVIEW CINEMA GROUP, INC.
("Clearview")
JULY 21, 1997
TABLE OF CONTENTS
Page
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1. DEFINITIONS.................................................................1
A. Acceptance Date..........................................................1
B. Benefit Plan.............................................................1
C. Closing..................................................................2
D. Closing Date.............................................................2
E. Consents.................................................................2
F. Contract Rights..........................................................2
G. Earnest Money Deposit....................................................2
H. Encumbrances.............................................................2
I. Fee Theatres.............................................................2
J. Improvements.............................................................2
K. Inspection Period........................................................3
L. Leasehold Theatre........................................................3
M. Lease....................................................................3
N. Liabilities..............................................................3
O. Names....................................................................3
P. Permitted Exceptions.....................................................3
Q. Personal Property........................................................3
R. Purchased Assets.........................................................3
S. Purchase Price...........................................................3
T. Real Property............................................................3
U. Security Deposits........................................................3
V. Sublease Theatre.........................................................3
W. Theatres.................................................................4
2. AGREEMENT...................................................................4
3. PROPERTY TO BE SOLD.........................................................4
A. Real Property............................................................4
B. Improvements.............................................................4
C. Leasehold Theatre........................................................4
D. Sublease Theatre.........................................................4
E. Personal Property........................................................4
F. Contract Rights..........................................................5
G. Names....................................................................5
4. EARNEST MONEY DEPOSIT.......................................................5
5. LIABILITIES NOT ASSUMED.....................................................5
6. PURCHASE PRICE..............................................................6
A. Purchase Price...........................................................6
B. Payment of Purchase Price................................................7
7. SELLER'S WARRANTIES AND REPRESENTATIONS.....................................7
A. Title....................................................................7
B. Taxes....................................................................7
C. Rent Roll................................................................7
D. Organization.............................................................7
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E. Authorization; Enforceability............................................8
F. No Violation of Laws or Agreements; Consents.............................9
G. Contract Rights; Security Deposits.......................................8
H. Cash Flow Statements.....................................................8
I. Equipment; No Changes....................................................8
J. No Pending Litigation or Proceeding......................................9
K. Benefit Matters; Miscellaneous...........................................9
8. PURCHASER'S REPRESENTATIONS AND WARRANTIES AND ACKNOWLEDGMENT...............9
A. Joint and Several........................................................9
B. Authority................................................................9
C. Acknowledgment..........................................................10
D. Organization and Standing of the Purchaser and Clearview................10
E. Space Leases............................................................11
9. PURCHASER'S INSPECTION OF THE PURCHASED ASSETS.............................11
A. Delivery of Documents...................................................11
B. Purchaser's Access to the Assets........................................11
10. TERMINATION BY PURCHASER..................................................12
11. SELLER'S OBLIGATIONS PRIOR TO CLOSING.....................................12
A. Ordinary Course; Compliance.............................................12
B. Prohibited Transactions.................................................13
C. Lien Releases...........................................................13
12. FULFILLMENT OF AGREEMENTS.................................................13
13. EMPLOYMENT................................................................13
14. TRANSITIONAL MATTERS......................................................13
15. BOOKS AND RECORDS.........................................................14
16. EVIDENCE OF TITLE.........................................................14
A. Condition of Title......................................................14
B. Defects of Title........................................................14
C. Permitted Exceptions....................................................15
D. Change in Title.........................................................15
17. CONDITIONS PRECEDENT TO CLOSING...........................................15
A. Seller's Conditions.....................................................16
B. Purchaser's Conditions..................................................17
18. CLOSING...................................................................17
A. Date, Time, and Place...................................................17
B. Conveyances and Other Actions...........................................18
C. Apportionments..........................................................19
D. Closing Costs...........................................................20
E. Real Estate Transfer Tax................................................20
F. Possession..............................................................20
G. Allocation of Consideration.............................................20
19. PURCHASER'S CLOSING OBLIGATIONS...........................................20
A..........................................................................20
B..........................................................................20
C..........................................................................21
D..........................................................................21
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E..........................................................................21
20. RISK OF LOSS..............................................................21
21. CONDEMNATION..............................................................21
22. BROKERAGE.................................................................21
23. FAILURE TO CLOSE..........................................................21
A. Purchaser's Default.....................................................22
B. Seller's Default........................................................22
C. Attorneys' Fees.........................................................22
24. SURVIVAL OF REPRESENTATIONS AND WARRANTIES................................22
A. Indemnification by Seller...............................................22
B. Indemnification by Purchaser and Clearview..............................22
25. BULK SALES LAW............................................................23
26. FILM BOOKING..............................................................23
27. MISCELLANEOUS.............................................................23
A. Notices.................................................................24
B. Parties in Interest.....................................................24
C. Entire Agreement........................................................24
D. Counterparts............................................................24
E. Time....................................................................25
F. Section and Other Headings..............................................25
G. Governing Law...........................................................25
H. Assignment of Agreement.................................................25
I. Recording...............................................................25
J. Binding Effect..........................................................25
K. Gender..................................................................25
L. No Joint Venture, Partnership, Agency, Etc..............................25
M. No Third Party Beneficiaries............................................25
N. No Waiver...............................................................26
O. Confidentiality.........................................................26
P. Non-Foreign Status Certification........................................26
Q. Antitrust Matters.......................................................26
R. Severability............................................................26
EXHIBIT A - LEGAL DESCRIPTIONS OF FEE THEATRES............................A-1
EXHIBIT B - LIST OF LEASEHOLD THEATRES AND SUBLEASE THEATRE...............B-1
EXHIBIT C - LIST OF PERSONAL PROPERTY AND ASSETS EXCLUDED FROM SALE.......C-1
EXHIBIT D - ENT ROLL AND SECURITY DEPOSITS................................D-1
EXHIBIT E - LIST OF CONTRACTS.............................................E-1
EXHIBIT F - EXCEPTIONS TO TITLE...........................................F-1
EXHIBIT G- LITIGATION MATTERS.............................................G-1
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THIS AGREEMENT OF PURCHASE AND SALE (the "Agreement") is dated as
of the 21st day of July, 1997, by and among UNITED ARTISTS THEATRE CIRCUIT,
INC., a Maryland corporation, UNITED ARTISTS PROPERTIES I CORP., a Colorado
corporation, and MAMARONECK PLAYHOUSE HOLDING CORPORATION, a New York
corporation (collectively or individually as the case may be, the "Seller"), at
the address of 9110 E. Nichols Avenue, Suite 200, Englewood, Colorado 80112, and
CCC Bronxville Cinema Corp., a Delaware corporation ("CCC Bronxville"), CCC
Mamaroneck Cinema Corp., a Delaware corporation ("CCC Mamaroneck"), CCC Wayne
Cinema Corp., a Delaware corporation ("CCC Wayne"), CCC BC Realty Corp, a
Delaware corporation ("CCC Realty"), CCC Cinema 304 Corp., a Delaware
corporation ("CCC Cinema 304") and CCC Larchmont Cinema Corp., a Delaware
corporation ("CCC Larchmont"), all of the above collectively referred to herein
as "Purchaser," each of the parties named as Purchaser being a wholly owned
subsidiary of Clearview Cinema Group, Inc. ("Clearview").
RECITALS
Seller owns three parcels of real property together with the
improvements located thereon and certain personal property used in the operation
of or in connection with three motion picture theatres located in the State of
New York, as described in Exhibit A attached hereto, which property Seller
desires to sell to Purchaser. Seller is also the owner of a leasehold interest
and personal property in two motion picture theatres, one located in the State
of New Jersey, and the other in New York, listed on Exhibit B attached hereto,
which Seller desires to assign and sublease, respectively, to Purchaser.
Purchaser and Seller desire to enter into this Agreement pursuant to which the
foregoing transactions will be consummated.
AGREEMENTS
In consideration of the purchase price, the promises and
covenants contained herein, the parties agree as follows:
1. DEFINITIONS. In addition to terms defined elsewhere in this
Agreement, the following capitalized terms have the meanings set forth below:
A. Acceptance Date. "Acceptance Date" means the date upon
which this Agreement is signed by both Seller and Purchaser.
B. Benefit Plan "Benefit Plan" means any written and
unwritten "employee benefit plans" within the meaning of Section 3(3) of ERISA,
and any other written and unwritten profit sharing, pension, savings, deferred
compensation, fringe benefit, insurance, medical, medical reimbursement, life,
disability, accident, post-retirement health or welfare
benefit, stock option, stock purchase, sick pay, vacation, employment,
severance, termination or other plan, agreement, contract, policy, trust fund or
arrangement, whether or not funded and whether or not terminated, for current or
former employees of the Theatres (i) maintained or sponsored by Seller or an
affiliate of Seller, (ii) with respect to which Seller has or may have Liability
or is obligated to contribute, (iii) that otherwise covers any of the current or
former beneficiaries of Seller employees, or (iv) as to which any such
beneficiaries of Theatre employees participated or were entitled to participate
or accrue or have accrued any rights thereunder.
C. Closing. "Closing" means the consummation of the
transactions contemplated by Section 18 of this Agreement.
D. Closing Date. "Closing Date" has the meaning given
such term in Section 18A below.
E. Consents. "Consents" has the meaning given such term
in Section 17A below.
F. Contract Rights. "Contract Rights" has the meaning
given such term in Section 3F below.
G. Earnest Money Deposit. "Earnest Money Deposit" means
the amount to be paid by Purchaser pursuant to Section 4 below, which amount is
to be held by Rosen, Einbinder & Dunn, P.C., 641 Lexington Avenue, New York, New
York 10022 (the "Escrow Agent") in an interest-bearing account, pursuant to an
escrow agreement among Seller, the Purchaser and the Escrow Agent, executed
simultaneously herewith (the "Escrow Agreement").
H. Encumbrances. "Encumbrance" means any liability, debt,
mortgage, deed of trust, pledge, security interest, encumbrance, option, right
of first refusal, agreement of sale, adverse claim, easement, lien, assessment,
restrictive covenant, encroachment, burden or charge of any kind or nature
whatsoever.
I. Fee Theatres. "Fee Theatres" means the Real Property
and the Improvements.
J. Improvements. "Improvements" has the meaning given
such term in Section 3B below.
K. Inspection Period. "Inspection Period" means the
period ending at 5:00 p.m. Denver, Colorado time, 90 days after the date of
execution of this Agreement by Seller and Purchaser.
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L. Leasehold Theatre. "Leasehold Theatre" means those
certain leasehold rights under the Lease for the Wayne Theatre in Wayne, New
Jersey, as more particularly described in Section 3C below.
M. Lease. "Lease" means that certain written lease,
together with all amendments and modifications thereto, relating to the
Leasehold Theatre, described in Section 3C below.
N. Liabilities. "Liabilities" with respect to any person,
means all debts, liabilities and obligations of such person of any nature or
kind whatsoever, whether or not due or to become due, accrued, fixed, absolute,
matured, determined, determinable or contingent and whether or not incurred
directly by such person or by any predecessor of such person, and whether or not
arising out of any act, omission, transaction, circumstance, sale of goods or
service or otherwise.
O. Names. "Names" has the meaning given such term in
Section 3G below.
P. Permitted Exceptions. "Permitted Exceptions" means the
exceptions relating to Encumbrances, as more particularly described in Section
16C below.
Q. Personal Property. "Personal Property" has the meaning
given such term in Section 3E below.
R. Purchased Assets. "Purchased Assets" means the Fee
Theatres, Leasehold Theatre, Sublease Theatre, Personal Property, Contract
Rights and Names as more particularly described in Section 3 below.
S. Purchase Price. "Purchase Price" means the price
payable for the purchase of the Purchased Assets as more particularly described
in Section 6 below.
T. Real Property. "Real Property" has the meaning given
such term in Section 3A below.
U. Security Deposits. "Security Deposits" mean the
security deposits for each of the Space Leases and the security deposit for the
Lease, all of which amounts are identified on Exhibit D hereto.
V. Sublease Theatre. "Sublease Theatre" means the
leasehold rights related to the Larchmont Theatre, Larchmont, New York, to be
given to Purchaser via a sublease in the form annexed (the "Sublease").
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W. Theatres. "Theatres" means the Fee Theatres, the
Leasehold Theatre and the Sublease Theatre.
2. AGREEMENT. Subject to the terms and conditions set forth in
this Agreement, Seller will sell, assign and convey to Purchaser and Purchaser
will purchase from Seller the Purchased Assets at the Closing, free and clear of
all encumbrances, other than the Permitted Exceptions, as more particularly
described in Section 3 below. The Purchased Assets shall be allocated among the
Purchasers as follows: (i) CCC Bronxville shall purchase the Personal Property,
Contract Rights and names related to the Bronxville Theatre, (ii) CCC Mamaroneck
shall purchase the Personal Property, Contract Rights and names related to the
Mamaroneck Playhouse, (iii) CCC Larchmont shall purchase the Sublease, the
Personal Property, Contract Rights and names related to the Sublease Theatre,
(iv) CCC Cinema 304 shall purchase the Personal Property, Contract Rights and
names related to the New City Cinema 304, (v) CCC Wayne shall purchase the
Lease, Personal Property, Contract Rights and names related to the Leasehold
Theatre, and (vi) CCC Realty shall purchase the Real Property and the
Improvements.
3. PROPERTY TO BE SOLD. The Purchased Assets to be purchased and
sold are as follows:
A. Real Property. Fee simple title to those parcels known
as (i) the Bronxville Theatre located in the Village of Bronxville, Town of
Eastchester, County of Westchester, State of New York, (ii) Cinema 304, located
in New City, New York, and (iii) the Mamaroneck Playhouse located in the Town
and Village of Mamaroneck, County of Westchester, State of New York, as more
particularly described on Exhibit A attached hereto and by this reference
incorporated herein (collectively, the "Real Property"), together with all
easements, rights-of-way, privileges and appurtenances thereto.
B. Improvements. All improvements in, upon, and under the
Real Property, including, without limitation, all buildings, fixtures, utility
buildings, and covered and uncovered parking facilities (the "Improvements").
C. Leasehold Theatre. All of Seller's right, title and
interest as tenant in and under the Lease of the Leasehold Theatre which are
described on Exhibit B attached hereto and incorporated herein.
D. Sublease Theatre. All of Seller's right title and
interest as Tenant under a lease of the Sublease Theatre identified on Exhibit B
attached hereto.
E. Personal Property. All personal property and equipment
owned by Seller and located on or customarily used in connection with the
operation of the Theatres, including but not limited to seats, cleaning
equipment, concessions equipment, projection and sound equipment, screens,
carpets and draperies, soundfold, wall coverings, cash registers, signage
(including marquees), cleaning supplies, projection supplies and concession
supplies not
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held for sale to the public, Seller's rights to the telephone numbers for each
Theatre, projectors, projector bulbs, ticketing machines, books and records;
provided, however, that the items described on Exhibit C attached hereto and by
this reference incorporated herein shall be excluded from the definition of
Personal Property and the sale to Purchaser under this Agreement (the "Personal
Property").
F. Contract Rights. Any and all rights and obligations of
Seller under the contracts and commitments listed on Exhibit E, attached hereto
and made a part hereof, (the "Contract Rights"). Purchaser shall at Closing
assume and perform in full any and all Contract Rights, other than for breach or
nonfulfillment thereof by Seller prior to Closing, for film rentals prior to
Closing and for monies due and owing prior to Closing.
G. Names. All of Seller's right, title and interest, if
any, in and to the names of the Theatres and any symbol or logo related solely
to such names, but not including the name "United Artists" (the "Names").
Purchaser acknowledges that it shall have no rights to use of the name "United
Artists" nor any logo, trademark, starburst or similar mark for such name.
Purchaser agrees that it shall be responsible, at its cost, for the removal of
any signage on, outside or within the Theatres with the name "United Artists" on
them as soon as reasonably practicable after Closing, not to exceed 90 days
after the Closing Date.
4. EARNEST MONEY DEPOSIT. The Earnest Money Deposit under this
Agreement shall be as follows: on the Acceptance Date of this Agreement,
Purchaser shall deliver to Rosen, Einbinder & Dunn, P.C. (the "Escrow Agent")
Seventy-Five Thousand and no/100 ($75,000) Dollars in the form of cash, or other
immediately available funds, which is to be held by the Escrow Agent in
accordance with the terms and conditions of the Escrow Agreement (together with
any interest earned thereon, the "Initial Earnest Money Deposit"). The Initial
Earnest Money Deposit shall be nonrefundable except (i) in the event of Seller's
default as provided for in Section 23B; or (ii) in the event of the termination
of this Agreement as provided for in Sections 7E, 16B or 16D; (iii) or if the
conditions described in Section 11C have not been fulfilled, and Purchaser and
Seller shall proceed to Closing on the 120th day after the Acceptance Date. The
Initial Earnest Money Deposit and the Additional Earnest Money Deposit defined
in Section 18A below, if any, are collectively referred to herein as the
"Earnest Money Deposit." The Escrow Agent shall hold the Earnest Money Deposit
in an interest-bearing account bearing passbook savings interest, and all
accrued interest shall be delivered to the party entitled to the Earnest Money
Deposit under the Escrow Agreement. If there is a Closing hereunder, the Earnest
Money Deposit shall be credited against the Purchase Price at Closing.
5. LIABILITIES NOT ASSUMED. Notwithstanding anything to the
contrary contained in this Agreement, it is expressly agreed that Purchasers
will not be required to assume, and shall not assume, at the Closing, and the
Seller shall be solely responsible for and shall pay, perform and discharge or
shall cause to be paid, performed and discharged, promptly when due, any
obligations or liabilities of Seller not specifically set forth in this
Agreement, including, without limitation, the following;
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(i) any and all liabilities, obligations, costs and
expenses arising out of or incurred in connection with
any transaction, event, act or omission occurring prior
to the Closing Date, and any claims, suits or
proceedings, and any judgments or settlements arising
from any such claims, suits or proceedings, with respect
thereto, except as may be related to the repair,
maintenance or condition of the Purchased Assets or
otherwise under Paragraph 8C;
(ii) Seller's accounts payable;
(iii) Seller's indebtedness for borrowed money;
(iv) federal, state or local taxes relating to the
Seller's business or property or payable by Seller for
periods ending on or prior to the Closing Date;
(v) liabilities relating to any Benefit Plan, including,
without limitation, withdrawal liability or contributions
with respect to any multi-employer plan; liability due to
the Pension Benefit Guaranty Corporation, or any
beneficiary on account of the termination of any pension
plan; severance benefits arising out of the transactions
provided for in this Agreement; and liabilities accrued
to the Closing Date under any pension plan;
(vi) obligations of the Seller to holders of season or
trip passes, if any, issued by the Seller, for use at
Seller's premises, except as specified on Exhibit E
attached hereto;
(vii) all legal, accounting and other expenses
(including, without limitation, taxes of every kind,
nature and description) incurred in connection with the
negotiation, approval and performance of this Agreement
and the transactions contemplated hereby; and
(viii) the litigation matters identified on Exhibit G
attached hereto.
6. PURCHASE PRICE.
A. Purchase Price. The total Purchase Price for the
Purchased Assets shall be eight million, six hundred and fifty thousand
($8,650,000) dollars.
The Purchase Price shall be allocated among the
Purchasers during the Inspection Period by the mutual agreement of Seller and
Purchaser
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B. Payment of Purchase Price. The Purchase Price, which
amount shall be adjusted for apportionments as provided in Section 18C below,
and for closing costs as provided in Section 18D below, and the balance
remaining after applying the Earnest Money Deposit, shall be payable by
Purchaser to Seller at Closing in cash or by cashier's check, certified funds or
via federal wire transfer. Clearview shall be jointly and severally liable with
Purchaser for this obligation.
7. SELLER'S WARRANTIES AND REPRESENTATIONS. Seller represents
and warrants to Purchasers as follows:
A. Title. Seller is and will be at Closing the sole owner
of all the Purchased Assets and the Purchased Assets will be at Closing free and
clear of any and Encumbrances arising by, through or under Seller, other than
the Permitted Exceptions. Seller shall transfer to Purchaser at Closing good,
marketable and insurable title to the Fee Theatres, subject to the liens for
unpaid, but not yet due real estate taxes and assessments, free and clear of any
and all Encumbrances arising by, through or under Seller, other than the
Permitted Exceptions. In addition, subject to obtaining the Consents defined
herein, Seller shall assign to Purchaser at Closing good, marketable and
insurable title to the Leasehold under the Lease, subject to the Permitted
Exceptions, and shall, subject to obtaining the Approval defined herein,
sublease to Purchaser the leasehold interest in the Sublease Theatre, free and
clear of all Encumbrances arising by, through or under Seller, and will transfer
title to the Personal Property free and clear of any and all Encumbrances
arising by, through or under Seller except for any landlord's lien imposed by
the landlords under the Leases, if any, and the lien for unpaid but not yet due
personal property taxes. Fee title to the Leasehold Theatres may be subject to
the liens for unpaid real estate taxes and assessments, and all exceptions,
encumbrances, easements, reservations, rights-of-way, covenants and conditions
of record as of the Acceptance Date and the Closing Date, and that Seller shall
have no obligation to remove, cure or insure over any exceptions to title to the
Leasehold Theatres. All rental obligations under the Lease incurred through the
Closing Date shall have been paid by Seller as of the Closing, or shall be
prorated at Closing as provided in Section 18C below.
B. Taxes. Seller has paid, or will pay by credit to
Purchaser at Closing, in full all taxes and special assessments on the Fee
Theatres that have or will become due and payable through the date of the
Closing, and the Purchased Assets will not be subject to any lien for payment of
taxes, other than general property taxes and assessments and personal property
taxes constituting a lien for taxes not yet payable.
C. Rent Roll. Annexed hereto as Exhibit D (the "Rent
Roll") is a true and complete listing of all existing leases for space in the
Fee Theatres (the "Space Leases") which sets forth (i) the name of each tenant;
(ii) the rent amount being collected; and (iii) the expiration date of each
lease.
D. Organization. Each of the entities comprising the
Seller is a corporation, duly incorporated, validly existing and in good
standing under the laws of the State
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of its organization, as recited on page one hereof, and has the power and
authority to own or lease the Purchased Assets and enter into this Agreement
and perform its obligations hereunder.
E. Authorization; Enforceability. This Agreement has been
duly executed and delivered by and constitutes the legal, valid and binding
obligations of each Seller, enforceable against it in accordance with its
respective terms. All actions contemplated by this Section have been duly and
validly authorized by all necessary proceedings by Seller, including, without
limitation, approval by its board of directors, except that the sale of the
Larchmont Theatre and Cinema 304 have not yet been approved by the board of
directors, which approval Seller will undertake to obtain within 30 days of the
Acceptance Date. If that approval is not provided within 30 days of the
Acceptance Date, this Agreement shall be terminated and Purchaser's Earnest
Money Deposit shall be immediately refunded.
F. No Violation of Laws or Agreements; Consents. To the
best of Seller's knowledge, neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby nor the
compliance with or fulfillment of the terms, conditions or provisions hereof by
Seller will (i) contravene any provision of any organic document of Seller; (ii)
at Closing, conflict with, result in a breach of, constitute a default or an
event of default under any of the terms of, result in the termination of result
in the loss of any right under, or give to any other Person the right to cause
such a termination of or loss under, any Purchased Asset; (iii) violate any law
or violate any judgment or order of any governmental body by which any of the
Purchased Assets or any of its other assets may be bound or affected; or (iv)
result in the creation or imposition of any Encumbrance upon any of the
Purchased Assets or give to any other Person any interest or right therein.
Except for the Consent and Approval defined herein and the Lien Release, no
consent, approval or authorization of, or registration or filing with, any
Person is required in connection with the execution and delivery by Seller of
this Agreement or the consummation by Seller of the transactions contemplated
hereby.
G. Contract Rights; Security Deposits. To the best of
Seller's knowledge, each Contract Right is a legal, valid and binding obligation
of Seller and is in full force and effect. Seller holds no other Contract Rights
related to the Theatres that will be binding upon Purchaser subsequent to
Closing. All security deposits or like items with respect to the Space Leases
are identified on Exhibit D; all such amounts with respect to the Space Leases
are held by Seller and conform to the terms of the Space Leases.
H. Cash Flow Statements. Seller has made available to
Purchasers for their inspection statements of cash flows for the years 1994,
1995 and 1996 and for the Theatres (the "Cash Flow Statements"), which fairly
present the cash flows for the Theatres for those periods in accordance with
generally accepted accounting principles.
I. Equipment; No Changes. The Theatres are now being
operated by Seller as United Artists Theatres in the ordinary course of its
business considering the age of the theatres and shall be so operated until the
Closing. Seller shall use commercially reasonable efforts to maintain those
operations until Closing. Prior to Closing Seller shall notify Purchasers
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of (i) material adverse change in the Purchased Assets or Real Property; (ii)
damage or destruction to any Purchased Asset or Real Property, whether or not
covered by insurance; (iii) removal, changes, substitutions or replacements to
the Personal Property; or (iv) agreement or commitment to do any of the
foregoing. Between the Acceptance Date and Closing, Seller shall not commit
waste or damage the Purchased Assets.
J. No Pending Litigation or Proceeding. Except for
Exhibit G attached hereto, to Seller's knowledge, no action, suit,
investigation, claim or proceeding of any nature or kind whatsoever, whether
civil, criminal or administrative, by or before any governmental body or
arbitrator is pending against or affecting any of the Purchased Assets or any of
the transactions contemplated by this agreement. To Seller's knowledge, there is
presently no outstanding judgment, decree or order of any governmental body
against or affecting any of the Purchased Assets or any of the transactions
contemplated by this Agreement. Seller does not have pending any Litigation
against any third party related to the Purchased Assets. To Seller's knowledge,
Seller has received no notice of any violation of law which has not been
remedied or rectified nor does Seller have any actual knowledge of any
environmental condition related to the Purchased Assets that requires
remediation mandated by any governmental entity, other than as shall be
indicated on a schedule to be provided by Seller within 14 days of the
Acceptance Date, which schedule shall be incorporated into this Agreement and
made a part hereof. Seller's knowledge is limited to what it has been able to
ascertain from a review of the files and records maintained by its legal
department and its risk management department.
K. Benefit Matters; Miscellaneous. Seller does not
maintain any Benefit Plan for any employees employed at the Theatres that would
cause Purchasers to be liable thereunder or liable to any employees covered
thereby after Closing. No employee of Seller at the Theatres is represented by
any union or other labor organization except as shall be indicated on a schedule
to be delivered to Purchaser within 14 days of the Acceptance Date. No complaint
against Seller, the responsibility for which will be assumed by Purchaser, to
the knowledge of Seller is pending before the National Labor Relations Board,
the Equal Employment Opportunity Commission or any similar state or local
agency, by or on behalf of any employee of Seller. Except as provided in Section
16, neither Seller nor any of its officers, managers or employees has employed
any broker or finder or incurred any liability for any brokerage fee, commission
or finders' fee in connection with any of the transactions contemplated hereby.
8. PURCHASER'S REPRESENTATIONS AND WARRANTIES AND ACKNOWLEDGMENT.
A. Joint and Several. Each of the representations and
warranties made hereunder are made jointly and severally by Clearview, as well
as the Purchaser.
B. Authority. Purchaser represents, warrants, and agrees
that on and as of the Acceptance Date and on and as of Closing, Purchaser will
possess all right, authority and power to execute and perform under this
Agreement, and that this Agreement has been duly executed by Purchaser and is
enforceable against Purchaser in accordance with its terms.
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C. Acknowledgment. Purchaser acknowledges that Purchaser
is purchasing the Purchased Assets solely in reliance on Purchaser's own
investigation, and that no representations or warranties of any kind, either
express or implied have been made by Seller or Seller's agents, other than any
expressly contained in writing herein. Purchaser acknowledges that, subject to
Seller's representations and warranties herein, the Purchased Assets are being
sold "AS IS, WHERE IS, without any warranty of quality, condition or usefulness,
including, without limitation, any WARRANTY OF MERCHANTABILITY or any WARRANTY
OF FITNESS FOR THE PARTICULAR PURPOSE OF PURCHASER." In addition, Purchaser
acknowledges that as of the Closing, Purchaser will be aware of all zoning
regulations, other governmental requirements, site and physical conditions which
may affect the use and condition of the Purchased Assets, and, subject to the
conditions to Purchasers' obligations to close under 17B, agrees to purchase the
Purchased Assets in the condition that it is in at Closing, and, subject to
Seller's representations and warranties herein, Purchaser agrees to assume the
risks and liabilities pertaining to the ownership, use and operation of the
Purchased Assets, including, without limitation, any and all risks and
liabilities associated with or arising under federal, state or local laws
pertaining to the protection of health, welfare or the environment, and
including, without limitation, the Americans With Disabilities Act of 1990 (the
"ADA") and similar local, federal and state laws. Seller makes no representation
or warranty concerning the compliance or noncompliance of the Purchased Assets
under the ADA and similar local, federal and state laws. Purchaser further
acknowledges that, except for 7J, Seller has made no investigation and offers no
representation nor warranty as to whether the Purchased Assets contain hazardous
materials and substances, and that Purchaser will be responsible for its own
environmental investigation of the Purchased Assets and will, subject to
Seller's representations and warranties herein, rely solely on such
investigation. Purchaser agrees not to bring an action against Seller for and
agrees to release and waive any claim or cause of action of any nature
whatsoever which it may now have or have in the future against Seller resulting
from hazardous materials or substances (as those terms may be defined by
applicable local, state and federal law) located on, at or under the Purchased
Assets, other than for any claim or cause of action based upon fraud or
intentional misrepresentation of Seller. Purchaser shall fully release Seller
from any such claim, cause of action or liability resulting from any hazardous
or toxic materials or substances on, at or under the Purchased Assets, other
than for any deliberate act, fraud or gross negligence by Seller or its agents.
The provisions of this paragraph shall survive Closing and delivery of the deeds
and other conveyance documents.
D. Organization and Standing of the Purchaser and
Clearview. Purchaser and Clearview are corporations, duly organized, validly
existing and in good standing under the laws of the State of Delaware and each
have the authority to own, lease and operate its respective properties and to
carry on its business as now conducted, to enter into and perform this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. All resolutions and other proceedings required
to be taken by or on behalf of Purchaser and Clearview have been taken to
authorize each of Purchaser and Clearview to enter into this Agreement and to
perform its obligations hereunder, including without limitation, the execution
and delivery of the Assignment and Guaranty defined below.
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E. Space Leases. Purchaser shall acquire title to the
Purchased Assets subject to the Space Leases. Purchaser shall assume all
obligations and benefits of the Landlord under the Space Leases, arising from
and after the Closing, and the parties shall execute at Closing an assignment
and assumption of such Space Leases in form reasonably satisfactory to Purchaser
and Seller. Seller shall remain responsible and liable only for obligations
arising or having accrued under the Space Leases prior to the date of Closing,
except for those related to compliance with laws and repair or maintenance of
the property subject to the Space Leases.
9. PURCHASER'S INSPECTION OF THE PURCHASED ASSETS.
A. Delivery of Documents. Seller shall provide copies of
the following documents, if any, in Seller's possession relating to the
Purchased Assets, for Purchaser's review on or before the dates specified below:
(1) Within 10 days after the Acceptance Date, a
copy of the Lease, the Space Leases and any and all amendments thereto or
notices thereunder and all prior title work, surveys and deeds obtained by
Seller related to the Theatres.
(2) Within 10 days after the Acceptance Date, the
Contract Rights..
(3) Within 10 days after the Acceptance Date, all
warranties, service, maintenance and management contracts not terminable on 30
days notice.
(4) Within 10 days after the Acceptance Date, a
schedule of all prepaid rents or deposits of any kind, together with all rental
and concession agreements.
(5) Within 30 days after the Acceptance Date,
Seller shall make reasonable efforts to obtain the Approval of the Sublease and
the Consents to the assignment to Purchaser and the Release of Seller under the
Lease from the landlord of the Leasehold Theatre; provided, however, that it
shall not be an event of default by Seller or Purchaser if such Consent and
Release cannot be obtained. Purchaser agrees to fully cooperate with Seller's
efforts to obtain the Consent and Release of Seller under the Lease, which
cooperation may include, without limitation, providing Purchaser's financial and
theatre operation history information to the landlords of the Leasehold Theatre
and the Sublease Theatre.
(6) Within 10 days of the Acceptance Date, Seller
shall deliver those health department certificates and certificates of occupancy
in its possession in connection with the operation, use and occupancy of the
Purchased Assets.
B. Purchaser's Access to the Assets. Seller covenants and
agrees that from and after the Acceptance Date until Closing or earlier
termination of this Agreement, Purchaser and its contractors, agents and/or
representatives, at the sole expense of Purchaser, may enter upon any portion of
the Theatres (Purchaser acknowledges that its access to the
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Leasehold Theatre may be subject to consent of the landlord under the Lease)
from time to time during reasonable business hours, without any disruption of
the normal conduct of Seller's business in the Theatres, and with two business
days' prior written notice to Seller for the purposes of inspections, making
surveys and tests, staking and obtaining topographical information, including
environmental testing and examination of title and operating condition of the
Purchased Assets. All such inspections and tests shall be at Purchaser's sole
cost and expense, which shall not include any overhead, wages or other costs
incurred by Seller. Purchaser will, in the event that this Agreement does not
close, restore the Purchased Assets to substantially the same condition as
existed prior to such activities on the Purchased Assets with respect to any
change to such premises made by Purchasers or Purchasers' agents. Purchaser and
Clearview hereby agree to indemnify Seller and hold Seller harmless from any and
all losses, liabilities, claims, expenses, costs, damages and mechanics' liens
which may be brought or which may be filed against the Purchased Assets or any
portion thereof by reason of the performance of any of the acts of Purchasers or
their agents herein mentioned, and upon Seller's election to defend any action
brought by reason of any of the acts herein mentioned with counsel reasonably
satisfactory to Seller and reimburse Seller for reasonable attorneys' fees and
costs incurred by Seller by reason of any such action. This paragraph shall
survive Closing.
10. TERMINATION BY PURCHASER. The Purchaser may, in its sole
discretion, terminate this Agreement prior to the expiration of the Inspection
Period, by written notice to Seller, for any reason whatsoever or for no reason.
If Purchaser so terminates this Agreement within such time period, then the
Initial Earnest Money Deposit shall be paid to Seller and both parties shall
thereafter be released from all further obligations under this Agreement except
for 9B. Any failure by Purchaser to deliver its written notice of termination to
Seller within the time period specified above shall be deemed to be acceptance
by Purchaser of all such matters and its desire to proceed to Closing. It is
additionally provided that Purchaser may, upon its written election made prior
to the expiration of the Inspection Period, terminate this Agreement as to the
Bronxville Theatre, the Mamaroneck Playhouse, the Wayne Theatre and the
Larchmont Theatre, but proceed to Closing as to the acquisition of Cinema 304 in
New City, in which event the Purchase Price shall be amended to be one million
four hundred thousand ($1,400,000.00) dollars and the parties shall thereafter
proceed to Closing pursuant to all of the terms and conditions of this Agreement
as they relate to Cinema 304.
11. SELLER'S OBLIGATIONS PRIOR TO CLOSING. From and after the
date hereof and until the Closing Date, unless Purchaser shall otherwise consent
in writing, Seller shall conduct the affairs of the Theatres as follows:
A. Ordinary Course; Compliance. The Theatres shall be
conducted only in the ordinary course and consistent with past practice. Seller
shall maintain the Purchased Assets consistent with past practice and shall
comply in a timely fashion with all material provisions of all Contract Rights.
Seller shall use commercially reasonable efforts to keep the Theatre
organization intact and keep available the services of its present employees and
preserve the good will of its patrons and others having business relations with
it. Seller shall maintain in full force and effect its policies of insurance,
subject only to variations required by the ordinary
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operations of the Theatres, or else shall obtain, prior to the lapse of any
policy, substantially similar coverage with insurers of recognized standing.
B. Prohibited Transactions. Except in the ordinary course
of its business, Seller shall not, with respect to the Theatres; (i) amend or
terminate any Contract Right or enter into additional Contract Rights that are
not terminable on reasonably short notice; (ii) make any changes, substitutions
or replacements to the Personal Property or any other material change to the
Theatres to the extent any of the above causes a material diminishment in the
value of the Purchased Assets; or (iii) take any action or omit to take any
action that will cause a breach or termination of any Contract Rights, other
than termination by fulfillment of the terms thereunder.
C. Lien Releases. Seller shall have obtained, by Closing,
at its sole cost and expense, a full release of the Purchased Assets on terms
acceptable to Seller in its sole discretion, related to the theatre at
Bronxville, New York from the lien of that certain Mortgage, dated as of October
1, 1988 (the "Mortgage"), made by Seller for the benefit of Connecticut Bank and
Trust Company, National Association and Lese Amato as Trustees, as spread by a
Spreader and Release Agreement dated May 1, 1990 between those parties, together
with the termination of UCC-1 Financing Statements filed simultaneously
therewith. Seller's failure to obtain the release of Mortgage shall not be a
default under this Agreement but shall entitle Purchaser to a refund of its
Earnest Money Deposit, unless Purchaser proceeds to closing on Cinema 304.
12. FULFILLMENT OF AGREEMENTS. Except as otherwise provided in
this Agreement, each party hereto shall use commercially reasonably efforts to
cause all of those conditions to the obligations of the other that are not
beyond its reasonable control to be satisfied on or prior to the Closing and
shall use commercially reasonable efforts to take, or to cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement.
13. EMPLOYMENT. Seller agrees to pay, perform and discharge any
and all severance payments, payroll and employment related Liabilities with
respect to employees of Seller at the Theatres accruing up to the close of
business on the date immediately preceding the Closing Date except that
Purchaser agrees that Seller intends to give its employees at least two weeks'
notice prior to the Closing Date and Purchaser acknowledges that with respect to
any employees of Seller that it hires and employs after the Closing Date,
Purchaser will honor and pay all sick time and vacation, as well as honor the
seniority status of such employees. Purchasers shall have the right, but not the
obligation, to offer employment (under such terms as Purchasers deem appropriate
in their sole discretion) to any of the employees of Seller who are employed at
the Theatres. Seller shall remain liable for all Liability for all workers'
compensation and disability of or with respect to all of Seller's employees
attributable to injuries, claims, conditions, events and occurrences occurring
prior to the Closing Date.
14. TRANSITIONAL MATTERS. Seller shall reasonably cooperate with
and assist Purchasers and its authorized representatives in order to provide, to
the extent reasonably
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agreeable to Seller, an efficient transfer of control of the Purchased Assets
and the Real Property and to avoid any undue interruption in the activities and
operations of the Theatres and the Real Property following the Closing Date
provided that Seller is reimbursed for its costs incurred post-closing,
including wages and overhead. Seller shall not cause any utilities to be
disconnected until the Purchasers shall have established an account for such
utility in Purchasers' own name unless same has not occurred by Closing. Seller
shall assist in transferring to each Purchaser the telephone numbers for each
Theatre location.
15. BOOKS AND RECORDS. Seller shall not destroy or dispose of any
books, records or files relating to the Theatres to the extent that such
information is reasonably necessary for Purchasers' audit of Seller's financial
statements for the Theaters for 1994, 1995 and 1996 until Purchasers have
completed such audit and for the period of time thereafter that Seller would
ordinarily maintain those records but no longer than two years. Seller shall
permit and cooperate and assist Purchasers, at Purchaser's expense and at no
cost to Seller, in the preparation of an audit of the financial statements for
the Theaters for calendar years 1994, 1995 and 1996. Seller shall have no
liability or responsibility for such audit.
16. EVIDENCE OF TITLE.
A. Condition of Title. Seller shall deliver to
Purchasers, in the manner allocated in Paragraph 2, a limited warranty bill of
sale for all of the Personal Property in form and substance satisfactory to
Purchasers and Seller, free and clear of all Encumbrances arising by, through or
under Seller, other than Permitted Exceptions. Purchasers may obtain, at their
expense, such title insurance and surveys as Purchasers deem appropriate. Seller
shall deliver to CCC Realty Bargain and Sale deeds with covenants against
grantor's acts to the Real Property, free and clear of all Encumbrances arising
by, through or under Seller, other than Permitted Exceptions.
B. Defects of Title. If prior to the last day of the
Inspection Period, Purchaser asserts the existence of any encumbrance,
encroachment on or defect in or objection to title to any portion of the Fee
Theatres based on Purchaser's examination of the Title Commitment and the Title
Documents, or any other information received by Purchaser (other than a title
exception described on Exhibit F, in which case notice of a title defect must be
given by Purchaser to Seller within 10 days after the Acceptance Date) (any of
which is called a "Defect in Title"), Purchaser shall give Seller written notice
of such Defect in Title and Seller shall have 30 days after receipt of such
notice to elect to either (i) terminate this Agreement by written notice to
Purchaser, or (ii) remove, or otherwise cure to Purchaser's satisfaction, the
Defect in Title, and if necessary the date of Closing shall be extended for such
30-day period to allow Seller to so remove or cure the Defect in Title. In the
event Seller fails, refuses or is unable to remove or cure the Defect in Title,
then Purchaser shall have the right to either: (i) waive such Defect in Title,
override Seller's election to terminate and proceed to Closing or (ii) terminate
this Agreement on or before the date of Closing, by delivering written notice of
such to Seller as provided in Section 9 above. In the event Purchaser so
terminates this Agreement, Purchaser shall receive a refund of any refundable
portion of its Earnest Money Deposit, only if the Defect in Title is a material
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defect in title that prevents the use of the Fee Theatres for its intended
purpose, and both parties shall be released from all further obligations under
this Agreement.
C. Permitted Exceptions. "Permitted Exceptions" shall
mean, with respect to the Fee Theatres, the liens for unpaid, but not yet due
real estate taxes and assessments, the exceptions to title described on the
attached Exhibit F, which will be supplemented during the Inspection Period, and
all exceptions, encumbrances, easements, reservations, rights-of-way, covenants
and conditions of record as of the Acceptance Date and continuing as of the
Closing Date except those liens, claims, pledges, mortgages and other monetary
encumbrances arising by, through or under Seller. "Permitted Exceptions" shall
mean, with respect to the Leasehold Theatres, the liens for unpaid, but not yet
due real estate taxes and assessments, and all exceptions, encumbrances,
easements, reservations, rights-of-way, covenants and conditions of record as of
the Acceptance Date and the Closing Date. "Permitted Exceptions" shall mean,
with respect to the Personal Property, the Encumbrances of record, as of the
Acceptance Date, which continue on the Closing Date, except those Encumbrances
arising by, through or under Seller, but including any landlord's lien imposed
by the landlord under the Lease, if any, and including the lien for unpaid but
not yet due personal property taxes.
D. Change in Title. In the event any supplement to a
title commitment obtained by Purchasers discloses any material change to the
Permitted Exceptions or Purchaser otherwise obtains notice of any change or
addition to the Permitted Exceptions on or before the date of Closing, other
than changes caused by Purchaser (the "Additional Exception"), then Seller may,
at Seller's sole election either: (i) terminate this Agreement by written notice
to Purchaser, or (ii) reduce the Purchase Price for the Purchased Assets by an
amount mutually agreed to by the parties that would be necessary to satisfy the
Additional Exception (provided that Purchaser is willing to close subject to
such Additional Exception with such reduction in price), or (iii) remove the
Additional Exception. In the event the Additional Exception cannot be corrected
or cured on or before the Closing, Seller may extend the date of Closing for a
time period not to exceed 60 days in order to correct or cure such matter. If
Seller does not elect to correct or cure the Additional Exception or if such
Additional Exception cannot be corrected or cured within the 60-day extension of
the Closing Date, then Purchaser shall have the right to either: (i) waive any
such Additional Exception and elect to close under this Agreement with a
diminution in the Purchase Price equal to the amount the parties mutually agree
would be required to satisfy any lien or encumbrance or to correct or cure such
Additional Exception, or (ii) terminate this Agreement by delivering written
notice to Seller on or before the date of Closing (or as extended). In the event
Purchaser so terminates this Agreement, Purchaser shall receive a prompt refund
of its Earnest Money Deposit, only if the Additional Exception is a material
defect in title that prevents the use of the property for its intended purpose,
and the parties shall be relieved of all further obligations under this
Agreement. Notwithstanding the foregoing, Seller shall be obligated to cure or
remove any Additional Exception intentionally created by Seller.
17. CONDITIONS PRECEDENT TO CLOSING. The obligations of the
respective parties to close the purchase of the Purchased Assets will be subject
to the following conditions:
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A. Seller's Conditions. Seller will not be obligated to
close the purchase of the Purchased Assets unless (i) Purchaser has complied
with all of the terms and conditions of this Agreement to be met prior to
Closing, has delivered to Seller all funds, instruments, and documents required
to be deposited by Purchaser in connection with the Closing pursuant to the
terms of this Agreement, and all of the representations and warranties of
Purchaser and Clearview contained in this Agreement remain true and correct in
all material respects on and as of the Closing Date; (ii) Seller has received,
prior to the expiration of the Inspection Period, any required consents by the
landlord or other third parties to the assignment of the Lease and other
material agreements relating to the operation of the Theatres (the "Consents")
and has received executed release of Seller's obligations under the Lease by the
landlord of the Leasehold Theatre (the "Release"), which Release shall be in a
form satisfactory to Seller; subject, however, to the following paragraph; (iii)
Seller has obtained, prior to the expiration of the Inspection Period,
landlord's approval of the Sublease ("Approval"); (iv) Seller has obtained at
Closing the Lien Release of the Bronxville Theatre under the Indenture of
Mortgage, on terms and conditions satisfactory to Seller; and (v) Purchaser
proceeds to Closing on all five Theatres or just Cinema 304, as provided for in
Paragraph 10. Prior to the expiration of the Inspection Period, Seller shall
undertake to provide to Purchaser a letter from the mortgagee indicating that it
will release the Bronxville Theatre from the Indenture of Mortgage and under
what conditions that release will be given. Seller may at any time at or prior
to Closing waive any one or more of the preceding requirements by written notice
to Purchaser.
If the Consents to assignment of the Lease have been
obtained from the landlord of the Leasehold Theatre, but the Release of Seller
has not been obtained at the time of Closing as provided in clause (ii) above,
then such Release requirement shall be deemed waived by Seller, and the parties
shall proceed to Closing; provided, however, that the conditions set forth below
in this paragraph are satisfied. In the event a Release of Seller's obligations
under the Lease cannot be obtained from the landlord of the Leasehold Theatre
prior to Closing, then Purchaser agrees to (a) not assign or sublet such Lease
without the prior written consent of Seller in its sole discretion, (b) not
exercise any option to extend the term of the Lease without Seller's reasonable
prior written consent (and further provided that, in that event, Purchaser shall
make further efforts, in a commercially reasonable manner, to obtain the
Release), (c) operate the Leasehold Theatre in a manner consistent with the
Lease, (d) observe all of the covenants under the Lease and perform all of the
tenant's obligations thereunder in accordance with the terms of the Lease, (e)
indemnify and hold Seller harmless from and against any and all claims, losses,
damages, costs and expenses (including, but not limited to, attorneys' and legal
assistants' fees and expenses) arising out of the Lease for the Leasehold
Theatre after the date of Closing; and (f) not commit any act that would
jeopardize Seller's security interest. In the event that Purchaser fails to
observe any of the covenants contained in this paragraph or is in default (after
all applicable cure periods have expired under the Lease) under the terms of the
Lease of the Leasehold Theatre (the "Defaulted Theatre"), or under the
Assignment, Consent and Estoppel Agreement for the Defaulted Theatre in a form
to be agreed upon by the parties and executed at the Closing (the "Assignment,"
which shall include a collateral assignment, security agreement and UCC-1
Financing Statement), then Seller may pursue its remedies against Clearview
pursuant to the Guaranty of the Lease given under 24B hereof and may, without
any obligation, perform Purchasers' obligations and covenants under the Lease of
such Defaulted Theatre, and Seller shall
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be able to repossess the Defaulted Theatre and dispossess Purchaser and any
other permitted assignees, subtenants, licensees or parties in possession, and
Purchaser will be liable for any damages, costs and expenses, suffered by Seller
as to such Defaulted Theatre (including, but not limited to, attorneys' and
legal assistants' fees and expenses but excluding consequential damages) and the
cost of any premium for any bond required in connection with an injunction
brought to enforce Seller's remedies under this paragraph. The Assignment shall
provide that Seller shall not exercise its rights to repossess the Defaulted
Theatre unless Clearview has defaulted for the payment of money under its
Guaranty hereunder or if Purchaser defaults under the Lease by failing to
operate the Defaulted Theatre as a theatre on a continuous basis. In the event
the Release is obtained subsequent to Closing, the Assignment and UCC-1 will be
terminated, and the Guaranty shall be released as to the Wayne Theatre.
B. Purchaser's Conditions. Purchaser will not be
obligated to close the purchase of the Purchased Assets unless (i) Seller has
complied with all of the terms and conditions of this Agreement to be met prior
to and at the Closing, and has delivered to Purchaser all instruments and
documents required to be delivered by Seller in connection with the Closing
pursuant to the terms of this Agreement; (ii) Seller has obtained a release of
the Bronxville Theatre under the Indenture of Mortgage and the Purchased Assets
will be free of all other Encumbrances other than the Permitted Exceptions on
terms and conditions satisfactory to Seller prior to Closing; (iii) Seller has
obtained the consent of the landlord to the assignment of the Lease; (iv) Seller
has obtained the consent of the landlord to the Sublease; (v) Seller shall have
obtained prior to Closing a letter of Non-Applicability with respect to the
Leasehold Theatre subject to the Lease under the New Jersey Site Recovery Act
(PL 1993, ch. 39); (vi) each of the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on, as of and with reference to the
Closing Date; and (vii) no statute, regulation or order of any governmental body
shall be in effect from and after the Inspection Period that restrains or
prohibits the transactions contemplated hereby or that would, after Closing,
limit or adversely affect Purchasers' ownership of the Purchased Assets in a
manner different from Seller's ownership thereof, and there shall not have been
any threatened, nor shall there be pending, any action or proceeding by or
before any governmental body challenging the lawfulness of or seeking to prevent
or delay any of the transactions contemplated by this Agreement or seeking
monetary or other relief by reason of the consummation of any such transactions.
Purchaser may at any time at or prior to Closing waive any of the preceding
requirements by written notice to Purchaser.
18. CLOSING.
A. Date, Time, and Place. Closing will take place by mail
or at such location as agreed to by the parties, after all conditions precedent,
as set forth in Section 17 have been fully satisfied or waived by such party,
provided that the parties shall use all reasonable efforts to close by the date
that is 120 days from the Acceptance Date (the "Closing Date"). In the event
Purchaser desires to extend the Closing Date, not to exceed an additional 90
days, then Purchaser shall on or before the initial Closing Date, deposit with
Seller an additional deposit of
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$75,000 (the "Additional Earnest Money Deposit"), which shall be non-refundable
in all events except (i) in the event of a Seller's default as provided for in
Section 23B or (ii) in the event of the termination of this Agreement pursuant
to Sections 16B or 16D, or (iii) the failure to occur of the conditions set
forth in Section 11C in which event or events, the Earnest Money Deposit shall
be promptly refunded to Purchasers, without set-off of any kind. Purchaser
acknowledges and agrees that the Additional Earnest Money Deposit shall, if this
transaction is consummated, be applied toward the Purchase Price at Closing.
The transactions consummated at Closing, when effected,
will be deemed to be effective as of the close of business on the date of
Closing except as otherwise specifically provided in this Agreement. All action
to be taken at Closing will be considered as taken simultaneously and no paper,
document, or instrument will be considered to be delivered until all items to be
delivered have been delivered. At Closing, the net proceeds due and all Closing
documents contemplated herein required for Closing will be delivered to
Purchaser and Seller.
B. Conveyances and Other Actions.
(1) At Closing, Seller will deliver to Purchaser
the following:
(i) Duly executed and acknowledged Bargain
and Sale deeds with covenants against grantor's acts conveying the Fee Theatres
to Purchaser.
(ii) A duly executed Assignment together
with the Consent.
(iii) A duly executed limited warranty
bill of sale conveying the other Personal Property.
(iv) A Form TP-584 with the amount of the
New York State Real Estate Transfer Tax due in connection with this transaction
deducted from Closing proceeds.
(v) An assignment, duly executed and
acknowledged by Seller, of the Space Leases.
(vi) A duly executed and acknowledged
Sublease with the Approval.
(vii) Assignments of all transferable or
assignable licenses, permits and warranties relating to the Purchased Assets and
of any intellectual property included in the Purchased Assets, duly executed and
in forms reasonably acceptable to Purchasers and Seller.
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(viii) Keys for each Theatre location.
(ix) All assignable vendor warranties
(including those for the roofs on each Theatre) respecting the Purchased Assets
which are in Seller's possession.
(x) Notices to all tenants under the Space
Leases.
(xi) The Security Deposits under the
Tenant Leases (as a credit against the Purchase Price).
(xii) Any other documents contemplated to
be delivered by the terms of this Agreement or reasonably requested by the
Purchasers.
C. Apportionments. The following items will be prorated
to the Closing Date:
(1) General real estate, special assessments, and
personal property taxes applicable to the Purchased Assets for the year of the
Closing, based upon the then latest available levy and assessment.
(2) Any other governmental or special district
fees and assessments as are customarily adjusted in similar real estate
transactions.
(3) Such other items as are customarily adjusted
in similar real estate transactions, including without limitation, rent and
other charges under the Space Leases, rents and additional rents, utilities,
payments under the Lease for taxes and operating expenses, expenses pertaining
to the Purchased Assets and other items customarily prorated, including without
limitation monthly minimum rent, monthly CAM charges, monthly electrical charges
for Seller's pylon sign at or about the Theatres, monthly real estate tax
contributions and percentage rents, shall be apportioned between Purchaser and
Seller as of the close of business on the Closing Date. All prorations shall
constitute a final settlement between the parties, and no further adjustment
between Purchaser and Seller shall be made. All prorations regarding taxes and
assessments shall be based upon the most recently available tax bill presented
to Seller. Prorations for expenses under the Lease shall be based upon the most
recent billing therefor by the landlord under the Lease. Prorations for
percentage rent shall be as provided in Subsection (4) below. All prepaid and
unearned film rental expenses of Seller, if any, pertaining to the Theatres will
be credited to Seller at Closing, including reimbursement at Closing for any
advances and guaranties unearned. All unpaid film rental expenses of Seller
arising prior to Closing, if any, pertaining to the Theatres will remain
Seller's obligation.
(4) Any percentage rentals under the Lease shall
be prorated to the Closing Date by calculating an annualized sales amount for
the Leasehold Theatre based on
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actual sales information for the twelve months preceding Closing, minus the
breakpoint specified in the Lease.
D. Closing Costs. All documentary, transfer, use and
sales taxes arising out of the sale and assignment of the Purchased Assets to
Purchaser shall be divided and paid in equal shares by Purchaser and Seller.
Title insurance premiums for any owner's title insurance policies purchased by
Purchasers shall be paid by Purchaser. Any endorsements thereon, together with
any other costs incurred in connection with the title insurance policies,
including but not limited to survey costs for surveys purchased by Purchaser,
shall be paid by Purchaser. Deed taxes, recording costs, documentary, transfer,
sales, use and any other taxes arising from the sale and assignment of the
Purchased Assets shall be paid in equal shares by Purchaser and Seller. Seller
shall pay recording charges for the satisfaction or release of any mortgage and
financing statements encumbering the Real Property. Any other closing costs
shall be shared equally by Purchaser and Seller. Each party will pay the fees
and expenses incurred by its respective legal counsel in connection with the
transaction contemplated under this Agreement, except as provided in Section 23C
below.
E. Real Estate Transfer Tax. Seller and Purchaser agree
to comply in a timely manner with the requirements of Article 31 of the Tax Law
of the State of New York and the regulations applicable thereto, as the same
from time to time may be amended.
F. Possession. Possession of the Purchased Assets shall
be delivered to Purchaser at the Closing, subject to the occupancy rights of
tenants under the Space Leases.
G. Allocation of Consideration. The Purchase Price shall
be allocated among the Purchased Assets during the Inspection Period, which
allocation shall be mutually agreeable to Purchaser and Seller. Purchaser and
Seller hereby agree that neither party will take a position on any income tax
return or before any governmental agency charged with the collection of any
income tax or in any judicial proceeding that is in any way inconsistent with
the allocation agreed upon pursuant to this Section 18G, and that it will
prepare and file, promptly as and when due, all forms of returns required to be
filed by the Internal Revenue Service and any other governmental authority. The
provisions of this Section 18G shall survive Closing.
19. PURCHASER'S CLOSING OBLIGATIONS. At Closing, Purchaser will
deliver to Seller the following:
A. The amount of the Purchase Price payable at Closing as
provided in Section 6 above (as adjusted for apportionments under Section 17C
above) after credit for the Earnest Money Deposit.
B. The duly executed, and where appropriate acknowledged,
Assignment, Guaranty, UCC-1 and any other documents contemplated under Section
17A above.
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C. An assumption agreement of all obligations of Seller
under the Space Leases, the Lease and all outstanding Contracts and an executed
Sublease.
D. The closing costs and recording fees payable by
Purchaser as set forth in Section 18 above.
E. Any other documents required by this Agreement to be
delivered by Purchaser at Closing.
20. RISK OF LOSS. If, prior to Closing, a material portion of the
Purchased Assets are damaged by fire, vandalism, acts of God or other casualty
or cause, so that the use for which Purchaser intends the Purchased Assets is
materially and adversely impaired, Seller shall, prior to Closing, give
Purchaser notice of any such damage. In any such event, Purchaser shall have the
option of (a) taking the Purchased Assets as it is without any reduction to the
Purchase Price, but with the insurance proceeds applicable to the Purchased
Assets, if any, or the right to receive the same, subject to the terms of the
Lease, if applicable, or (b) terminating this Agreement and both parties shall
be released from all further obligations under this Agreement. If Purchaser
elects to proceed to Closing, Seller agrees to assign to Purchaser at the
Closing, Seller's rights to such insurance proceeds applicable to the Purchased
Assets. Seller shall be entitled to retain any business interruption insurance
proceeds and any insurance applicable to Seller's assets excluded from the
"Purchased Assets."
21. CONDEMNATION. If prior to Closing any governmental or other
entity having condemnation authority institutes an eminent domain proceeding or
takes any steps preliminary thereto to condemn any material portion of the
Purchased Assets such that the operation of any of the Purchased Assets will be
materially, adversely affected, Purchaser will have the right to terminate this
Agreement upon notice to Seller, and both parties shall be released from all
further obligations under this Agreement. If Purchaser does not so terminate
this Agreement, Purchaser shall proceed to Closing, without any reduction to the
Purchase Price, and Seller agrees to assign to Purchaser at the Closing,
Seller's rights to any compensation or damages relating to such taking,
excluding any amounts applicable to Seller's trade fixtures, equipment and
personal property.
22. BROKERAGE. The parties acknowledge that no real estate or
other broker is entitled to any commission as a result of the transactions
contemplated in this Agreement, other than Brett E. Marks of First New York
Realty Co., Inc., who shall be entitled to a commission paid by Seller and equal
to 3% of the Purchase Price under the terms of a separate agreement. In the
event that any other claim for a broker's fee or real estate commission is
asserted, the party against whom the claim is asserted shall indemnify and hold
harmless the other party from any and all claims, losses, damages, or expenses
of any nature whatsoever arising out of said claim, including, but not limited
to, reasonable attorneys' fees and costs.
23. FAILURE TO CLOSE.
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A. Purchaser's Default. If Purchaser, in default of its
obligations under this Agreement, fails to perform any of its material
obligations contemplated by this Agreement, Seller's exclusive remedy will be to
terminate this Agreement, and retain the Earnest Money Deposit received by
Seller up to that point as liquidated damages.
B. Seller's Default. If Seller, in default of its
obligations hereunder, fails to perform any of the material obligations
contemplated by this Agreement, Purchaser's exclusive remedies will be, in the
alternative, to either (i) terminate this Agreement, receive a refund of the
Earnest Money Deposit and recover from Seller its actual out-of-pocket costs
associated with this Agreement, for reimbursement of actual out of pocket costs,
limited to environmental review, survey, title work and the costs of any
applications or fees to governmental authorities, not to exceed $50,000, and
both parties shall be released from all further obligations under this
Agreement; or (ii) to seek specific performance. Purchaser shall have no other
remedies at law or in equity.
C. Attorneys' Fees. In the event of litigation arising
out of any alleged default or breach of this Agreement, the prevailing party
shall be entitled to recover all reasonable costs and expenses incurred in the
prosecution or defense of such litigation (including, without limitation,
reasonable attorneys' and legal assistants' fees and costs). For purposes of
this Section, "prevailing party" shall include a party who withdraws or moves to
dismiss a claim in consideration for payment received, performance owed, or
other consideration in substantial satisfaction of the claim withdrawn or
dismissed.
24. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by any party in this Agreement or pursuant
hereto shall survive the Closing for a period of one year, except for Paragraphs
7A (which shall be merged into the Deeds) and 7B, concerning which Purchaser may
elect to obtain title insurance.
A. Indemnification by Seller. Subsequent to the Closing
hereunder, Seller shall indemnify, defend, save and hold Purchasers and their
officers, directors, employees, agents and affiliates (collectively, "Purchasers
Indemnitees") harmless from and against all demands, claims, actions or causes
of action, assessments, losses, damages, deficiencies, Liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing but excluding any Liability for lost profits or consequential damages
(collectively, "Purchasers Damages") asserted against, imposed upon, resulting
to, required to be paid by, or incurred by any Purchasers Indemnitees, directly
or indirectly, in connection with, arising out of, resulting from, or which
would not have occurred but for, (i) an intentional misrepresentation of any
representation or warranty made by Seller in this Agreement (for the period of
survival described above), and (ii) any Liabilities Not Assumed.
B. Indemnification by Purchaser and Clearview. Subsequent
to the Closing hereunder, Purchasers and Clearview shall indemnify, defend, save
and hold Seller and its officers, directors, employees, agents and affiliates
(collectively, "Seller Indemnitees") harmless
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from and against all demands, claims, actions or causes of action, assessments,
losses, damages, deficiencies, Liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing but excluding any
Liability for lost profits (collectively, "Seller Damages") asserted against,
imposed upon, resulting to, required to be paid by, or incurred by any Seller
Indemnitees, directly or indirectly, in connection with, arising out of,
resulting from, or which would not have occurred but for, (i) an intentional
misrepresentation of any representation or warranty made by Purchasers in this
Agreement (for the period of survival described above) or in any certificate or
document furnished pursuant hereto by Purchasers, (ii) any Contract Rights
(other than in respect of any breach or noncompliance therewith prior to the
Closing); (iii) a breach by CCC Larchmont under the Sublease; and (iv) in the
event that the Release of Seller described in Section 17 above is not obtained,
a breach by CCC Wayne of any of the payment and performance obligations imposed
by the Lease; the obligations of CCC Wayne and CCC Larchmont under the Lease and
Sublease, respectively, being specifically and unconditionally guaranteed by
Clearview hereunder, said guaranty being absolute, present and continuing and in
no way contingent upon any attempt to collect from or enforce any obligations
first from CCC Wayne or CCC Larchmont or any other condition of contingency.
Said guaranty shall be effectuated by a separate guaranty to be executed by
Clearview at Closing, in a form to be mutually agreed upon by the parties prior
to Closing (the "Guaranty"). Nothing shall discharge this guaranty liability
until all obligations of CCC Wayne as assignee under the Lease and CCC Larchmont
under the Sublease have been performed in full and all sums due thereunder paid
in full, or until the Release is obtained.
25. BULK SALES LAW. Purchaser and Seller hereby waive compliance
with the provisions of any bulk sales law which may apply to the sale of the
Purchased Assets under this Agreement; provided, however, that Seller shall pay
and discharge when due or contest or litigate all claims of creditors which may
be asserted against Purchaser or the Purchased Assets by reason of such
non-compliance and to indemnify and hold Purchaser harmless from and against any
and all such claims from obligations arising prior to the Closing Date; and
further, Seller shall promptly take all necessary action to remove any liens or
encumbrance which are placed on the Purchased Assets as a result of such
non-compliance with applicable bulk sales laws.
26. FILM BOOKING. Purchaser acknowledges that Seller may own or
operate other theatres in competition with the Theatres, and Purchaser shall
have no claim, and agrees to waive and release Seller from and against any and
all claims with respect to the operation of such other theatres, including any
claim that the selection of motion pictures or other attractions for such other
theatres are being booked in a manner as to give preference or advantage to such
other theatres operated by Seller.
27. MISCELLANEOUS.
A. Notices. All notices hereunder to the respective
parties will be in writing and will be served by personal delivery or by
prepaid, express mail via a reputable courier service, or by prepaid, registered
or certified mail, addressed to the respective parties at their addresses set
forth below. Any such notice to Seller or Purchaser will be deemed to be given
and effective: (i) if personally delivered, then on the date of such delivery,
(ii) if sent via express mail,
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then twenty-four (24) hours after the date such notice is sent, or (iii) if sent
by registered or certified mail, then three (3) days following the date on which
such notice is deposited in the United States mail addressed as aforesaid.
Copies of all notices will be sent to the following:
If to Purchaser: Clearview Cinema Group, Inc.
7 Waverly Place
Madison, NJ 07940
Attn: A. Dale Mayo
President and CEO
with a copy to: Kirkpatrick & Lockhart, L.L.P.
Pittsburgh, PA 15222-2312
Attn: David L. Forney, Esq.
If to Seller: United Artists Theatre Circuit, Inc.
9110 E. Nichols Avenue, Suite 200
Englewood, CO 80112
Attn: Mr. Hal Cleveland and
Rebecca Wilcox Dow, Esq.
with a copy to: Rosen, Einbinder & Dunn, P.C.
641 Lexington Avenue
New York, NY 10022
Attn: Terrence M. Dunn, Esq.
All such addresses may be changed by notice given in accordance with this
Section 21A.
B. Parties in Interest. All of the terms and provisions
of this Agreement will be binding upon and inure to the benefit of and be
enforceable by the successors and permitted assigns of Seller and Purchaser.
C. Entire Agreement. There are and were no verbal or
written representations, warranties, understandings, stipulations, agreements,
or promises pertaining to the subject matter of this Agreement made by either
party or any agent, employee, or other representative of either party or by any
broker or any other person representing or purporting to represent either party,
not incorporated in writing in this Agreement. Neither this Agreement nor any of
the terms, provisions, conditions, representations, or covenants contained in
this Agreement can be modified, changed, terminated, amended, superseded,
waived, or extended except by an appropriate written instrument duly executed by
the parties.
D. Counterparts. This Agreement may be executed in two or
more counterparts, each of which, taken together, shall constitute one original.
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E. Time. Time is of the essence under this Agreement. In
the event the last day permitted for the performance of any act required or
permitted under this Agreement falls on a Saturday, Sunday, or holiday, the time
for such performance will be extended to the next succeeding business day. Time
periods under this Agreement will exclude the first day and include the last day
of such time period.
F. Section and Other Headings. The section and other
headings contained in this Agreement are for reference purposes only and will
not in any way affect the meaning or interpretation of the text of this
Agreement.
G. Governing Law. This Agreement will be construed and
enforced in accordance with the laws of the state in which the relevant Real
Property or Purchased Asset is located.
H. Assignment of Agreement. The Purchaser may not assign
all or any interest in this Agreement, nor any of the benefits or obligations of
this Agreement, without the prior written consent of Seller; provided, however,
that Purchasers may collaterally assign this Agreement without the consent of
Seller to any secured commercial lender of Purchasers or affiliate of Purchasers
and Purchasers may assign their rights hereunder to another investor, provided
Clearview is not released and remains liable under the terms of this Agreement.
Seller shall not be entitled to assign all or any interest in this Agreement
without the prior written consent of Purchaser except in the event of the
assignment or sale of all of its theatre assets. Any assignment in violation
hereof will be void.
I. Recording. This Agreement may not be recorded in whole
or in part, and any recordation in violation hereof shall be deemed to be a
default under this Agreement by the recording party.
J. Binding Effect. This Agreement will not be binding or
effective until properly executed and delivered by Seller and Purchaser.
K. Gender. As used in this Agreement, the masculine will
include the feminine and neuter, the singular will include the plural, and the
plural will include the singular, as the context may require.
L. No Joint Venture, Partnership, Agency, Etc. This
Agreement shall not be construed as in any way establishing a partnership, joint
venture, express or implied agency, or employer-employee relationship between
Purchaser and Seller.
M. No Third Party Beneficiaries. This Agreement is for
the sole benefit of Purchaser and Seller and their respective successors and
permitted assigns, and no other person or entity shall be entitled to rely upon
or receive any benefit from this Agreement.
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N. No Waiver. No consent or waiver, express or implied,
by Purchaser to or of any breach of any representation, covenant or warranty of
Seller shall be construed as a consent or waiver to or of any other breach of
the same or any other representation, covenant or warranty.
O. Confidentiality. Seller and Purchaser agree that prior
to Closing under this Agreement, except as otherwise provided by law, neither
party, without the written consent of the other, will issue or authorize the
issuance of any press release, publicity, or information concerning the
transaction contemplated by this Agreement, and any information obtained by
either party as a result of this Agreement or investigations of the Purchased
Assets, shall be treated as strictly confidential, except for any such
communications that may be required by applicable laws.
P. Non-Foreign Status Certification. At Closing, Seller
shall provide Purchaser with a fully executed certification of non-foreign
status in a form which satisfies Section 1445 of the Internal Revenue Code.
Q. Antitrust Matters. To the extent permitted by
applicable laws, Purchaser shall indemnify and hold Seller harmless from and
against any and all claims, losses, damages, costs and expenses, including
reasonable attorneys' fees, arising out of any claim that this Agreement, or the
transactions contemplated herein, violate state or federal antitrust laws, rules
or regulations to the extent such claim is based upon the relative competitive
position of Purchaser from and after consummation of the transactions
contemplated hereunder.
R. Severability. If any term or other provision of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced under any rule of law in any particular respect or
under any particular circumstances, such term or provision shall nevertheless
remain in full force and effect in all other respects and under all other
circumstances, and all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect as long as the economic or
legal substance of the transaction contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
fullest extent possible.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date specified below.
SELLER:
UNITED ARTISTS THEATRE CIRCUIT,
INC., a Maryland corporation
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By: /s/ Hal Cleveland
-------------------------------
Its: Executive Vice President
Date: July 18, 1997
UNITED ARTISTS PROPERTIES I CORP.,
a Colorado corporation
By: /s/ Hal Cleveland
-------------------------------
Its: Executive Vice President
Date: July 18, 1997
MAMARONECK PLAYHOUSE HOLDING
CORP., a New York corporation
By: /s/ Hal Cleveland
-------------------------------
Its: Executive Vice President
Date: July 18, 1997
PURCHASER:
CCC BRONXVILLE CINEMA CORP.,
a Delaware corporation
By: /s/ A. Dale Mayo
-------------------------------
Its: President
Date: July 21, 1997
CCC MAMARONECK CINEMA CORP.,
a Delaware corporation
By: /s/ A. Dale Mayo
-------------------------------
Its: President
Date: July 21, 1997
a Delaware corporation
CC WAYNE CINEMA CORP.,
a Delaware corporation
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By: /s/ A. Dale Mayo
-------------------------------
Its: President
Date: July 21, 1997
CCC B.C. REALTY CORP, a Delaware
corporation
By: /s/ A. Dale Mayo
-------------------------------
Its: President
Date: July 21, 1997
CCC CINEMA 304 CORP.,
a Delaware corporation
By: /s/ A. Dale Mayo
-------------------------------
Its: President
Date: July 21, 1997
CCC LARCHMONT CINEMA CORP.
a Delaware corporation
By: /s/ A. Dale Mayo
-------------------------------
Its: President
Date: July 21, 1997
CLEARVIEW CINEMA GROUP, INC. a
Delaware corporation
By: /s/ A. Dale Mayo
-------------------------------
Its: President and Chief Executive
Officer
Date: July 21, 1997
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