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Exhibit 2.1
ASSET PURCHASE AGREEMENT
between
UNITEL VIDEO, INC.
UNITEL 57 LLC
and
UNITEL 53 LLC
(as Seller)
and
ALL MOBILE VIDEO INC.
(as Buyer)
Dated as of
January 5, 2001
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS...................................................................................2
ARTICLE II
TRANSFER OF ASSETS...........................................................................10
2.1 (a) Purchase and Sale of Purchased Assets................................10
(b) Excluded Assets......................................................11
(c) Assumed Future Obligations...........................................11
2.2 Purchase Price; Escrow Account.............................................11
2.3 Instruments of Transfer....................................................11
2.4 Allocation of Purchase Price...............................................11
ARTICLE III
CLOSING TRANSACTIONS.........................................................................12
3.1 Closing....................................................................12
3.2 Closing Date...............................................................12
3.3 Seller's Deliveries to Buyer at or before Closing..........................13
3.4 Buyer's Deliveries to Seller at Closing....................................15
3.5 Cure Obligations...........................................................15
3.6 Closing Date Prorations....................................................16
3.6.1 Income and Expenses...............................................16
3.6.2 Assessments.......................................................17
3.6.3 Real Property Tax Adjustment......................................18
3.6.4 Survival..........................................................19
3.7 Possession.................................................................19
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING..............................................................19
4.1 Conditions to Seller's Obligations.........................................19
4.2 Conditions to Buyer's Obligations..........................................20
ARTICLE V
REPRESENTATIONS AND WARRANTIES...............................................................21
5.1 Seller's Representations and Warranties....................................21
5.1.1 Validity of Agreement.............................................21
5.1.2 Organization, Standing and Power..................................21
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5.1.3 No Conflicts or Violations........................................21
5.1.4 Title to Purchased Assets.........................................22
5.1.5 Security Deposits.................................................22
5.1.6 Sublease Income...................................................22
5.1.7 Advance Payments..................................................22
5.1.8 Litigation........................................................22
5.1.9 Real Property.....................................................22
5.1.10 Contracts.........................................................23
5.1.11 Brokers...........................................................23
5.1.12 Equipment and Machinery...........................................23
5.1.13 Financing.........................................................24
5.2 Buyer's Representations and Warranties.....................................24
5.2.1 Validity of Agreement.............................................24
5.2.2 Organization, Standing and Power..................................24
5.2.3 No Conflict or Violations.........................................24
5.2.4 Financing.........................................................24
5.2.5 Brokers...........................................................24
5.2.6 HSR Act...........................................................25
ARTICLE VI
COVENANTS....................................................................................25
6.1 Business Activities; Preservation of Business; Cooperation.................25
6.2 Access to Books and Records and Premises...................................25
6.3 Post-Execution Contracts...................................................25
6.4 Further Assurances.........................................................26
6.5 Notice of Transaction......................................................26
6.6 Estoppel Certificates......................................................26
6.7 Landlord's Consents........................................................26
6.8 Security Deposits..........................................................27
6.9 Intentionally Deleted......................................................27
6.10 Breach of Representations, Warranties, and Covenants.......................27
6.11 Operations Prior to Closing................................................27
6.12 Security Guard.............................................................27
ARTICLE VII
OTHER AGREEMENTS AND CONDITION...............................................................27
ARTICLE VIII
COURT APPROVALS..............................................................................28
8.1 Intentionally Deleted......................................................28
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8.2 Sale Order.................................................................28
ARTICLE IX
REAL PROPERTY MATTERS........................................................................29
9.1 Title Exceptions...........................................................29
9.2 Violations.................................................................30
9.3 Casualty and Condemnation..................................................30
ARTICLE X
TERMINATION..................................................................................31
10.1 Conditions of Termination..................................................31
10.2 Effect of Termination; Remedies............................................32
ARTICLE XI
MISCELLANEOUS................................................................................33
11.1 Attorneys' Fees............................................................33
11.2 Non-Survival of Representations and Warranties.............................33
11.3 Cooperation on Tax Matters.................................................33
11.4 Notices....................................................................34
11.5 Entire Agreement...........................................................35
11.6 Modification...............................................................35
11.7 Closing Date...............................................................35
11.8 Severability...............................................................35
11.9 Captions...................................................................35
11.10 Waiver.....................................................................35
11.11 Assignments................................................................36
11.12 Binding Effect.............................................................36
11.13 Applicable Law.............................................................36
11.14 Construction...............................................................36
11.15 Counterparts...............................................................36
11.16 Bankruptcy Court Jurisdiction..............................................36
11.17 Transfer Taxes.............................................................36
11.18 Public Announcements.......................................................36
11.19 Good Faith.................................................................37
11.20 Use of Unitel Name.........................................................37
SCHEDULES
Schedule 1.1 - Form of Assignment and Assumption Agreement
Schedule 1.2 - List of Contracts
Schedule 1.3 - Legal Description of Land
Schedule 1.4 - List of Additional Excluded Assets
Schedule 2.1 - Scheduled Permitted Encumbrances
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Schedule 2.2(b).1 - Escrow Account Wire Information
Schedule 2.2(b).2 - Escrow Provisions
Schedule 2.4 - Purchase Price Allocation
Schedule 3.3.13 - Schedule of Security Deposits
Schedule 3.3.14 - List of Sublease Receivables
Schedule 3.3.17 - List of Advance Payments
Schedule 5.1.3 - Form of Sale Order
Schedule 5.1.8 - List of Scheduled Pending Litigation
Schedule 5.1.9(a) - Status of Leases and Subleases
Schedule 5.1.12 - List of Equipment and Machinery
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is
made and entered into as of this 5th day of January, 2001 by and between ALL
MOBILE VIDEO INC., a New York corporation, or its designee (the "Buyer"), on the
one hand, and UNITEL VIDEO, INC., a Delaware corporation, and its subsidiaries
UNITEL 57 LLC, and UNITEL 53 LLC, each a Delaware limited liability company, and
each a Debtor in Possession (each a "Seller" and collectively, the "Seller"), on
the other hand, under Case Nos. 99-02979, 99-02981 and 99-02982 in the United
States Bankruptcy Court for the District of Delaware having jurisdiction over
the bankruptcy cases of the Seller and their affiliate (the "Bankruptcy Court").
RECITALS
A. Seller is engaged, among other things, in the business of
owning and operating recording and production studios and
providing equipment and skilled personnel for in-studio
recording and production of television programs and other
video tape communications (the "Studio Business"), and
formerly provided mobile production services, servicing
high-end entertainment events (the "Mobile Business").
B. Seller wishes to sell to Buyer and Buyer desires to purchase
from Seller the Purchased Assets (as hereinafter defined)
which are comprised of substantially all of the assets Seller
uses in connection with the Studio Business (other than the
Excluded Assets, as hereinafter defined) at the price and on
the terms and conditions specified in detail below, pursuant
to Sections 363 and 365 of the Bankruptcy Code, and free and
clear of all Liens (as hereinafter defined), claims and
encumbrances, subject only to the Permitted Encumbrances (as
hereinafter defined) and the Assumed Future Obligations (as
hereinafter defined).
C. Buyer desires to take by assignment from Seller, and Seller
desires to assign to Buyer, the Assigned Contracts (as
hereinafter defined) pursuant to Section 365 of the Bankruptcy
Code and free and clear of all Liens, claims and encumbrances,
but subject to the Assumed Future Obligations (as hereinafter
defined).
D. The Sale Order (as hereinafter defined) shall be entered by
the Bankruptcy Court in the manner set forth in Article VIII
herein.
NOW THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. As used in this Agreement, the
following capitalized terms shall have the meanings set forth below. Certain
other capitalized terms used in this Agreement but not defined in this Article I
shall have the meanings ascribed to such terms elsewhere in this Agreement.
"Advance Payments" -- See Section 3.3.17.
"Affiliate" means, with respect to any Person, any
Person that directly or indirectly Controls, is Controlled by, or is under
Common Control with, such other Person; provided that the creditors of any
Seller shall not be considered the Affiliate of any Seller as a result of such
creditor relationship.
"Agreement" means this Asset Purchase Agreement,
including all schedules and exhibits hereto, as it may be amended from time to
time in accordance with its terms.
"Alternate Transaction" means (i) any agreement to
sell or transfer the Purchased Assets (or any substantial portion thereof) to a
third party other than the Buyer or its Affiliate, whether pursuant to an asset
purchase agreement, plan of reorganization or any other agreement pursuant to
which the Purchased Assets (or any substantial portion thereof) are sold or
transferred to such third party or otherwise ordered to remain in possession or
control of the Seller or their Affiliate or successor in interest.
"Assigned Contracts" means the Contracts, the
Post-Execution Contracts and the Selected Contracts.
"Assignment Agreements" means the assignment and
assumption agreements to be executed on the Closing Date by the parties hereto
in connection with the Assigned Contracts and in form and substance reasonably
acceptable to Buyer and Seller, substantially in the form of that which is set
forth in Schedule 1.1 attached hereto.
"Assumed Future Obligations" -- See Section 2.1(c).
"Auction" shall have the meaning set forth in the
Procedures Order.
"Bankruptcy Case" means Case Nos. 99-02979, 99-02981
and 99-02982 (PJW) in the United States Bankruptcy Court for the District of
Delaware and relating to the Seller, which cases are currently pending and being
jointly administered.
"Bankruptcy Code" means Chapter 11, Title 11 of the
United States Code, as amended, 11 U.S.C. 101 et seq.
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"Bankruptcy Court" -- See the Preamble hereto.
"Bargain and Sale Deeds" means the Bargain and Sale
Deeds without covenant to be executed at the Closing pursuant to which the
Seller shall transfer the fee simple to the Purchased Real Property to Buyer
subject to the Permitted Encumbrances.
"Bill of Sale" means the Bill of Sale to be executed
at the Closing pursuant to which the Seller shall transfer the Purchased Assets
(other than the Purchased Real Property, Assigned Contracts and Insurance
Claims) to Buyer.
"Business Day" means any day other than Saturday,
Sunday and any day which is a legal holiday or a day on which banking
institutions in New York are authorized by law or other governmental action to
close.
"Buyer" -- See the Preamble hereto.
"Closing" -- See Section 3.1.
"Closing Date" means the date on which the Closing
occurs.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Committed Capital" means the sum of (a) Liquid
Assets owned by the party (including Buyer) seeking to be Financially Qualified
and (b) amounts committed to such party for the acquisition of the Purchased
Assets (subject only to Bankruptcy Court approval) by a Qualified Financing
Source under a commitment letter to provide secured mortgage financing pursuant
to which the Seller is an intended third-party beneficiary.
"Consent" means any approval, authorization, waiver,
consent, order or notification by or on behalf of any Person that is not a party
to this Agreement, or any waiver of, or exemption or variance from any Law or
Order necessary to authorize, approve or permit the full and complete sale,
conveyance, assignment, lease or transfer of the Purchased Assets, to consummate
and make effective the transactions contemplated by this Agreement.
"Contracts" means, collectively, the Leases, the
Production Contracts, the Subleases and such other contracts with respect to the
Purchased Assets, all of which are specifically set forth on Schedule 1.2 hereto
and the rights, proceeds, deposits and products with respect to the foregoing.
"Control" (including the terms "Controlled by" and
"under Common Control with") means the direct or indirect possession of ordinary
voting power to elect a majority of the Board of Directors (or comparable body)
of a Person or to direct the management of such Person.
"Corporate Documentation" -- See definition of
Excluded Assets.
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"Deposit" -- See Section 2.2(b).
"Equipment and Machinery" means, to the extent used
in or related to the Studio Business, (i) all the equipment, machinery,
furniture, fixtures and improvements, tooling, spare parts and supplies owned by
the Seller with respect to the operation of the Studio Business on the Closing
Date, a true, complete and accurate list (except for inadvertent compilation
errors, if any, which would not, in the aggregate, affect the total value of the
Equipment and Machinery more than to a de minimis extent) of which is identified
on Schedule 5.1.12 hereto, and (ii) any rights of the Seller to the warranties
and licenses received from manufacturers, sellers and lessors of the aforesaid
items, to the extent transferable to Buyer; except, in each case, for those that
are Excluded Assets.
"Escrow Agent" means Kaye, Scholer, Fierman, Hays &
Handler, LLP.
"Escrow Provisions" means the provisions set forth on
Schedule 2.2(b).2.
"Estate Claims" -- See the definition of Excluded
Assets.
"Excluded Assets" means the following:
(a) except to the extent the following
relates to the Assigned Contracts,
any rights, claims (as defined in
section 101(5) of the Bankruptcy
Code), credits, allowances, rebates,
causes of action (including, but not
limited to, all causes of action
arising under Sections 510, 544
through 550, and 553 of the
Bankruptcy Code or under similar
state laws, including, but not
limited to, fraudulent conveyance
claims, and all other causes of
action of a trustee and
debtor-in-possession under the
Bankruptcy Code) or rights of
set-off (collectively, "Estate
Claims") of the Seller arising out
of or directly relating to the
Bankruptcy Case;
(b) corporate seals, minute books,
charter documents, corporate stock
record books, registers of other
securities, original tax and
financial records and such other
books and records as pertain to the
organization, existence, share
capitalization or debt financing of
the Seller or that do not relate
primarily to the Studio Business
(collectively, the "Corporate
Documentation");
(c) except to the extent the following
relates to the Assigned Contracts,
all claims or causes of action
(whether asserted or unasserted),
demands, judgments and pending
litigation as to which the Seller is
a claimant, plaintiff, defendant,
judgment creditor or beneficiary
arising prior to the Closing Date,
including, but not limited to, any
claims against any legal,
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accounting, underwriting, financial
advisory or other professional firm
retained by the Seller, any claims
relating to collective bargaining
agreements and other contracts or
agreements related to employees;
(d) all cash, cash equivalents,
certificates of deposit, notes,
drafts, checks and similar
instruments;
(e) capital stock of any subsidiary and
all other equity interests owned by
Seller;
(f) intercompany account balances owed
to Seller from any Affiliate of
Seller;
(g) all insurance policies of Seller and
all rights of Seller of every nature
and description under or arising out
of such insurance policies,
excluding the Insurance Claims and
Buyer's insurable interest granted
herein;
(h) all licenses, leases, and other
contracts not part of the
definitions of the Contracts or the
Post-Execution Contracts;
(i) intentionally omitted;
(j) any and all assets and rights of
Seller relating to the Mobile
Business;
(k) any and all assets and rights of
Seller relating to the former
businesses or divisions operated by
Seller, including, without
limitation, Editel and Post 38;
(l) claims of Seller for refunds of
pre-Closing Date Taxes (other than
claims for refunds of real property
Taxes) which taxes are subject to
apportionment under Section 3.6.3
hereof;
(m) accounts receivable related to the
Purchased Assets for money due or
services provided before the Closing
Date and accounts receivable
unrelated to the Purchased Assets;
(n) all bank accounts maintained by
Seller; and
(o) other assets, if any, listed on
Schedule 1.4 hereto but excluding
the Selected Contracts.
"Execution Date" means the date hereof.
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"Final Closing Date" -- See Section 10.1(b).
"Final Order" means with respect to an order
(including, but not limited to, the Sale Order) of the Bankruptcy Court, an
order which, unless waived by the Seller and the Buyer, has not been reversed,
stayed, modified or amended, and as to which the time to appeal has expired and
as to which no appeal which directly or indirectly challenges the (i) the
Bankruptcy Court's findings regarding the good faith of Buyer, (ii) the
Bankruptcy Court's findings under section 363(m) of the Bankruptcy Code, and/or
(iii) Seller's title in the Purchased Assets or Buyer's title in the Purchased
Assets, free and clear of Liens (subject to the Permitted Encumbrances and the
Assumed Future Obligations), has been timely filed, and, in the event that such
an appeal had been timely filed, which has not been resolved by the highest
court to which the order was appealed from.
"Final Sale Order" means the Sale Order which is a
Final Order.
"Financially Qualified" means, with respect to the
Buyer or a party submitting a bid for the Purchased Assets, an entity that
either (a) demonstrates that is has the necessary Committed Capital to pay the
full purchase price or (b) establishes its financial qualifications to the
satisfaction of HLHZ in HLHZ's sole reasonable discretion.
"Governmental Authority" means any agency, division,
subdivision, audit group, regulatory arm, instrumentality or procuring office of
the government of the United States, the states, counties, cities or other local
political subdivisions thereof, or any other foreign government, including but
not limited to, the employees or agents thereof.
"HLHZ" -- See Section 5.1.11.
"HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, 15 U.S.C. 7A, as amended.
"Improvements" means buildings, improvements and
fixtures (to the extent constituting real property under applicable law).
"Insurance Claims" means the claims of the Seller, if
any, pursuant to one of its insurance policies in effect prior to the Closing
Date and arising out of or related to damage, destruction or loss of any of the
Purchased Assets occurring on or subsequent to the Execution Date and prior to
the Closing Date, to the extent such damage, destruction or loss remains
unrepaired or unreplaced at the Closing Date.
"Knowledge of the Seller," "Knowledge," "known" to
the Seller, "Best Knowledge" of the Seller, matters of which the Seller is
"aware" and language of similar import mean all matters known by Ed Levine and
Getzler & Co. in each case without due diligence or inquiry.
"Land" means the parcels of land described on
Schedule 1.3, together with all of Seller's right, title and interest, if any,
in and to all rights of way, easements, reciprocal
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easement agreements, reservations, privileges and appurtenances, and other
rights and interests of the Seller appurtenant to such land, including, without
limitation, all right, title and interest of the Seller, if any, in and to (a)
the strips and gores, streets, highways, other public ways and alleys, opened or
proposed, abutting, in front of or adjoining or adjacent thereto (and all right,
title and interest, if any, of Seller in and to any unpaid award for any damage
to any of the such land or any improvements thereon by reason of change of grade
of any street or highway or other public way), (b) any water, oil, gas and
mineral rights owned by, or leased to, the Seller and relating to such land, (c)
all off-street parking rights and spaces relating to such land, (d) all
development rights and all air rights pertaining to such land, and (e) any
unpaid condemnation awards relating to such land.
"Law" means any applicable law, decree or regulation
of any governmental authority.
"Leased Real Property" means all land, Improvements
and other real property demised to Seller under the Leases.
"Leases" means each of (i) Agreement of Lease made as
of the 16th day of July, 1993 between Educational Broadcasting Corporation and
Unitel Video, Inc. relating to the land and entire building known as 841 Ninth
Avenue (the "Ninth Avenue Lease") and (ii) the Agreement of Lease made as of
November 1, 1998 between 423 West 55th Street, LLC and Unitel Video, Inc.
relating to the entire rentable area of the second and third floors of the
building known as 423 West 55th Street (the "55th Street Lease") (including in
each case all amendments, modifications, and extensions thereof, if any), as
more particularly described under the heading "Leases and Subleases" in Schedule
1.2 attached hereto; provided that "Leases" shall not include the Ninth Avenue
Lease in the event the Buyer elects in writing prior to the Closing not to
purchase the Ninth Avenue Lease.
"Liability" means any liability or obligation
(whether known or unknown, asserted or unasserted, fixed or contingent, accrued
or unaccrued, liquidated or unliquidated, secured or unsecured, and whether due
or to become due), including, but not limited to, any Lien or liability for
Taxes.
"Lien" means, as applicable, any claim, mortgage,
charge, pledge, security interest, option, easement, recorded or registered, as
applicable, covenant or restriction, right of way, judgement lien, tax lien,
mechanic's, materialman's, carrier's, worker's, repairer's, construction and
similar liens and statutory or other liens, offsets, rights of recoupment,
conditional sale agreement or other encumbrance on, in or against the Purchased
Assets.
"Liquid Assets" means cash and marketable securities.
"Mobile Business" -- See Recital "A".
"Order" means any order, writ, judgment, award,
injunction or decree of any court or other Governmental Authority of competent
jurisdiction, including any Order of the Bankruptcy Court obtained in relation
to the Bankruptcy Case, including the Procedures Order and the Sale Order.
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"Ordinary Course of Business" when used in this
Agreement with respect to the Seller, means in the ordinary course of the
Seller's business from and after the Petition Date.
"Outside Date" means the date that is sixty (60) days
after the Execution Date (or if such date is not a Business Day, the first
Business Day thereafter), unless extended in writing by the mutual agreement of
Seller and Buyer.
"Permitted Encumbrances" -- See Sections 2.1(a) and
9.1(b).
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company, estate, trust,
unincorporated organization, limited liability company or Governmental Authority
or any group of the foregoing acting in concert.
"Petition Date" means September 2, 1999, the date on
which Seller filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code.
"Post-Execution Contracts" means any contract
(including any per diem contracts) or sublease primarily relating to the Studio
Business which (i) is entered into from and after the Execution Date but prior
to the Closing Date; (ii) is entered into by Seller with the prior written
consent of Buyer which consent shall not be unreasonably withheld; and (iii)
will not expire by its terms prior to the Closing Date.
"Premises" means the Purchased Real Property and the
Leased Real Property.
"Procedures Order" means that certain Bankruptcy
Court Order, inter alia, (i) scheduling a hearing to approve Asset Purchase
Agreement with MTI/The Image Group, Inc. for the sale of substantially all of
the Debtors' Studio Business assets, free and clear of all liens, claims,
interests, charges and encumbrances, subject to higher or better offers; (ii)
approving the form and manner of notice in connection therewith; and (iii)
approving bidding procedures for the submission of any competing bids, dated
December 8, 2000.
"Proceedings" -- See Section 5.1.8.
"Production Contracts" means each of (i) the
Production Services Agreement, dated as of March 1, 1998 between Unitel Video,
Inc. and King World Productions, Inc. and the Renewed Production Agreement dated
as of April 10, 2000 between Unitel Video, Inc. and King World Productions,
Inc., together with Letter dated March 31, 2000 regarding costs for addition of
Curtis Court show for Studio A (the "KW Contract"); and (ii) the Production
Facilities Agreement, made as of July 3, 1996 by and between Unitel-New York, a
division of Unitel Video, Inc. and Paramount Pictures Corporation, a wholly
owned subsidiary of Viacom Inc., the extension thereto dated as of November 2,
1998 and the extension thereto dated as of March 1, 2000 (the "MW Contract").
"Purchase Price" -- See Section 2.2(a).
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"Purchase Price Allocation" -- See Section 2.4.
"Purchased Assets" means the Purchased Real Property,
the Assigned Contracts, the Equipment and Machinery, the Unitel domain name and
Tradename (including Unitel 57, Unitel 53 and Unitel Video), and any marks,
derivations or copyrights relating thereto and the Insurance Claims, which
compose substantially all of the Seller's assets relating exclusively to the
Studio Business (other than the Excluded Assets), and all of the rights of
Seller under the Assigned Contracts, including (a) the right to receive payment
for the products sold or services rendered and (b) the right to assert claims
and take other rightful actions in respect of breaches, defaults and other
violations of such Assigned Contracts.
"Purchased Real Property" means the Land, together
with the Improvements thereon.
"Qualified Financing Source" means (a) any financial
institution carrying an investment grade rating (or better) from Moody's,
Standard and Poor's or Fitch and having a minimum of $5 billion in assets, (b)
any entity with an unaudited book value of equity exceeding $100 million, or (c)
any solvent entity with unrestricted Liquid Assets in excess of $35 million.
"Sale Order" -- See Section 8.2.
"Security Deposit" means any amount other than rent
payments, whether as security deposit, advance or otherwise received or
deposited by the Seller in respect of any Lease or Sublease, a true, complete
and correct list of which is set forth on Schedule 3.3.13 attached hereto.
"Selected Contracts" means those contracts and
leases, if any, set forth on Schedule 1.4 which Buyer elects in writing prior to
the Closing to acquire.
"Seller" -- See the Preamble hereto.
"Seller Transaction Documents" means this Agreement,
the Exhibits and Schedules hereto, the Assignment Agreements, the Bargain and
Sale Deeds, the Bill of Sale, and all other agreements, certificates or
documents executed by the Seller in connection with the sale of the Purchased
Assets and the consummation of the transactions contemplated herein.
"Studio Business" -- See Recital "A".
"Sublease Income" -- See Section 3.6.1(a)(ii).
"Sublease Receivables" -- See Section 3.6.1(b).
"Subleases" means each of (i) Sublease, dated as of
1st day of December, 1998, and Sublease, dated as of 31st day of March, 2000,
between Unitel Video, Inc. and Paramount Pictures Corporation both relating to
the entire 2nd floor of 423 West 55th Street (the "Paramount Sublease") and
related to the MW Contract; and (ii) Sublease, dated as of November 1, 1998
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between Unitel Video, Inc. and Video Tape Distributors, Inc. relating to a
portion of the third floor of 423 West 55th Street (the "Video Tape Sublease").
"Tax Year" -- See Section 3.6.3.
"Taxes" means for all purposes of this Agreement all
taxes, charges, fees, levies, deficiencies and/or other assessments, however
denominated, (including, but not limited to, any interest, penalties, or
additions to taxes that may become payable in respect thereof), imposed by any
Governmental Authority, which taxes shall include all income taxes, payroll and
employee withholding taxes, unemployment insurance, employer health taxes,
social security, provincial and federal governmental pension plan taxes and
payments, sales and use taxes, goods and services taxes, excise taxes, franchise
taxes, vault taxes, if any, water and sewer taxes, water meter charges or any
other property related taxes, business corporation taxes, capital gains taxes,
gross receipts taxes, mortgage taxes, occupancy taxes, real and personal
property taxes and assessments, stamp taxes, transfer taxes, workmen's
compensation taxes and other obligations of the same or a similar nature,
whether arising before, on or after the Closing Date; and "Tax" shall mean any
one of them.
"Title Company" means Chicago Title Insurance
Company.
"Title Defects" means any mortgage, deed of trust,
mechanic's, materialman's, carrier's, worker's, repairer's, construction and
similar lien, statutory and other lien, pledge, security interest, lease,
judgment, charge, option, conditional sale agreement, right of first refusal,
easement, restrictive covenant, right of way, encroachment, encumbrance or
materially adverse survey defect or any other instrument materially adversely
affecting the use, ownership, development, operation or disposition of any
Purchased Assets.
"Transaction Documents" means, collectively, the
Seller Transaction Documents, the documents delivered by the Buyer hereunder,
and any other documents delivered in connection herewith, in all cases in form
and substance reasonably satisfactory to the Buyer and the Seller.
"Transfer Taxes" -- See Section 11.17.
"Unitel Tradename" means the Unitel tradename and any
derivations thereof owned by the Seller.
ARTICLE II
TRANSFER OF ASSETS
Section 2.01. (i) Purchase and Sale of Purchased
Assets. On the Closing Date, in consideration of the respective covenants,
representations and obligations of Buyer and Seller hereunder, and subject to
the terms and conditions hereinafter set forth, Seller shall sell, assign,
transfer, convey and deliver to Buyer or its designees, and Buyer shall purchase
from Seller, all of Seller's right, title and interest as of the Closing Date in
and to the Purchased Assets, free and
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clear of all Liens other than (i) in the case of the Premises, those Liens set
forth on Schedule 2.1 hereto and those Liens deemed to be Permitted Encumbrances
pursuant to Section 9.1(b) (collectively, the "Permitted Encumbrances"), and
(ii) in the case of the Assigned Contracts, the Assumed Future Obligations.
(ii) Excluded Assets. Seller and Buyer agree
that Buyer is purchasing only the Purchased Assets. Accordingly, at the Closing,
Seller shall retain all of its right, title and interest in and to, and there
shall be excluded from the sale to Buyer hereunder, the Excluded Assets. Prior
to Closing, Buyer may elect not to purchase the Ninth Avenue Lease, and, in such
event, the Ninth Avenue Lease shall not constitute a Purchased Asset but shall
constitute an Excluded Asset.
(iii) Assumed Future Obligations. Subject to
the terms and conditions set forth herein, Buyer agrees that, at the time of the
Closing, Buyer shall assume and thereafter pay, perform or discharge, as the
case may be, only those respective obligations and liabilities arising out of or
in connection with Purchased Assets, and arising or accruing from and after the
Closing Date (collectively, the "Assumed Future Obligations").
Section 2.02. Purchase Price; Escrow Account.
(i) Subject to the terms and conditions
herein and in consideration of the aforesaid sale, conveyance, transfer,
assignment and delivery of the Purchased Assets to Buyer, the Buyer agrees to
pay to the Seller on the Closing Date, the total amount of $23,000,000 (the
"Purchase Price") as set forth in Section 2.2(b) below.
(ii) The Purchase Price shall be paid as
follows (i) $500,000 has been paid as a deposit (the "Deposit") by wire transfer
of immediately available funds in the manner and to the account specified on
Schedule 2.2(b).1 attached hereto, which Deposit shall be held, invested and
disbursed by Escrow Agent in accordance with the Escrow Provisions set forth on
Schedule 2.2(b).2 attached hereto and (ii) the balance of the Purchase Price,
plus the amount of the Security Deposits assigned to Buyer in accordance with
Section 3.3.13(i), plus or minus the net proration as provided in Section 3.6,
shall be paid by wire transfer of such amount in immediately available funds on
the Closing Date to an account specified by Seller.
Section 2.03. Instruments of Transfer. The sale,
assignment, transfer, conveyance and delivery of the Purchased Assets to Buyer
provided for herein shall be made by the Transaction Documents and such other
instruments of assignment, transfer and conveyance as may be specifically set
forth herein or reasonably requested by Seller or Buyer to better clarify the
intent of the transactions contemplated hereby.
Section 2.04. Allocation of Purchase Price. The
Purchase Price shall be allocated in accordance with Section 1060 of the Code
and in accordance with the allocation set forth in Schedule 2.4 (the "Purchase
Price Allocation"). In addition, each Seller and Buyer shall timely file any
information that may be required to be filed pursuant to Treasury Regulations
promulgated under Section 1060(b) of the Code. Neither Seller nor Buyer shall
file any tax return,
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schedule, worksheet or other document or otherwise take any position with
respect to the allocation of Purchase Price for the purposes of any Taxes which
position is inconsistent with the Purchase Price Allocation unless otherwise
required by applicable law, regulation, or judicial determination.
Notwithstanding anything to the contrary herein, the Purchase Price Allocation
by Seller and Buyer shall not (i) be binding in (a) the Bankruptcy Case, on
Seller's creditors and other parties in interest therein, and (b) the chapter 11
case of R Squared, Inc. ("R Squared") on R Squared's creditors and other parties
in interest therein or (ii) have precedential value with respect to any
allocations of value contained in a plan of reorganization or liquidation
involving Seller or R Squared.
ARTICLE III
CLOSING TRANSACTIONS
Section 3.01. Closing. Unless this Agreement is
previously terminated, as provided herein, the Closing of the transactions
provided for herein (the "Closing") shall take place at the offices of Kaye,
Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New York
10022.
Section 3.02. Closing Date.
(i) The Closing shall take place at 10:00
a.m. on the date that is the second (2nd) Business Day after the date on which
the Final Sale Order becomes Final; provided that so long as the Sale Order has
been issued and entered by the Bankruptcy Court and has not been reversed or
stayed, at Buyer's election, the Closing may occur on a date prior to the date
that is the second (2nd) Business Day after the date on which the Final Sale
Order becomes Final; provided, further, that in no event, unless Buyer so
elects, the Closing shall not take place on a date that is earlier than the
fifty-third (53rd) day after the date on which the Procedures Order is signed by
the Bankruptcy Court.
(ii) Notwithstanding anything to the
contrary contained in this Agreement other than Section 10.1(b) hereof, Seller
shall be entitled to reasonable adjournments of the Closing, not to exceed sixty
(60) days in the aggregate, for the purpose of eliminating any objections to
title, but nothing herein contained shall require Seller to bring any action or
proceeding, or incur any expense in order to render the title to be in
accordance with this Agreement except that Seller shall be obligated to cure,
remove, provide for the satisfaction of, or provide for the Title Company's
insurance over any new Title Defect, which is not a Permitted Encumbrance
(except for matters described by item 1 of Schedule 2.1 hereof) which first
arises after the July 12, 2000 effective date of the certificates of title nos.
3100-00668 [Ninth Avenue] 3100-00669 [57th Street] and 3100-00670 [53rd Street]
issued by the Title Company. Seller may elect, in its sole discretion, whether
its compliance with the exception to the preceding sentence is by way of curing,
removing, providing for the satisfaction of or providing for the Title Company's
insurance over the title defect, lien or encumbrance in question.
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Section 3.03. Seller's Deliveries to Buyer at or
before Closing. Seller shall, on or prior to the Closing Date, make or cause to
be made the following deliveries to Buyer, each of which shall be in form and
substance satisfactory to the Buyer:
(a) Originals, if in Seller's possession, of all
Assigned Contracts and certified copies of those Assigned Contracts for which
the original is not in Seller's possession.
(b) Duly executed and acknowledged Bargain and Sale
Deeds conveying the fee simple to the Purchased Real Property, in statutory
form, containing the covenant required by Section 13 of the Lien Law, subject
only to the Permitted Encumbrances.
(c) The duly executed Assignment Agreements.
(d) The duly executed Bill(s) of Sale.
(e) Seller Closing Certificates as required under
Section 4.2.1 hereof.
(f) Transfer tax forms which have been duly completed
and executed by the Seller and Buyer to the extent applicable.
(g) A certified copy of the Procedures Order and the
Final Sale Order of the Bankruptcy Court.
(h) To the extent in Seller's possession, plans and
specifications, if any, relating to the Premises.
(i) Keys to the Premises, all lock, safe and fire
alarm combinations, if any, as are in Seller's possession, and all security
codes and telephone codes, if any, with respect to the Premises.
(j) The authorization documentation required under
Section 4.2.4.
(k) FIRPTA certificate.
(l) Non-Multiple Dwelling Affidavit.
(m) Schedule 3.3.13, updated as necessary and
certified by Seller to be true, correct and complete as of the Closing Date,
reflecting Security Deposits, together with (i) in the case of Security Deposits
under Leases, a calculation of all interest accrued thereon, including any
amounts which pursuant to applicable law may be retained by the landlord
thereunder, and an assignment to Buyer of all rights of Seller therein, and (ii)
in the case of Security Deposits under Subleases, a certified check, or wire
transfer of immediately available funds, in an amount equal to the aggregate of
the Security Deposits together with all interest due thereon. The Purchase Price
shall be adjusted to reimburse Seller for the full amount of all Security
Deposits deposited by Seller under the Leases including any interest thereon to
which Seller is entitled.
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(n) Schedule 3.3.14, updated as necessary and
certified by Seller to be true, correct and complete as of the Closing Date,
reflecting Sublease Receivables, the period(s) to which each amount owing
relates and the nature of each such amount.
(o) Such estoppel certificates as have been obtained
by Seller, if any, pursuant to Section 6.6(a) hereof, or which are required to
be provided by Seller under Section 6.6(b) hereof.
(p) Such landlord's consents as have been obtained by
Seller, if any, pursuant to Section 6.7 hereof.
(q) Schedule 3.3.17, updated as necessary and
certified by Seller to be true, complete and correct as of the Closing Date,
reflecting a schedule of prepayments applicable to the period subsequent to the
Closing Date and which Seller has received before the Closing Date pursuant to
any of the Production Contracts and Subleases or paid before the Closing Date
pursuant to any of the Leases (collectively, the "Advance Payments"). All such
Advance Payments, if any, shall be adjusted pursuant to Section 3.6 hereof.
(r) Notice to the subtenants under the Subleases and
to the landlords under the Leases advising them of the sale of the leasehold or
building, as applicable, the transfer to Buyer of all deposits thereunder
(subject to the terms hereof), and such other matters as are required by
applicable laws or pursuant to the terms of the Leases or Subleases, as
applicable, or which either party may reasonably request.
(s) Such licenses and permits, if any, in the
possession of Seller, together with such leasing, rental and property files and
records and certificates of occupancy in connection with the continued
operation, leasing and maintenance of the Purchased Assets.
(t) Reasonably satisfactory evidence that the Leases
between (i) Unitel Video, Inc. and Unitel 53 LLC, and (ii) Unitel Video, Inc.
and Unitel 57 LLC have been terminated (by agreement, rejection under the
Bankruptcy Code or otherwise) and are no longer in effect.
(u) Such other deliveries as Seller shall be required
to make on the Closing Date pursuant to Section 4.2 herein or any other
provision of this Agreement or any Seller Transaction Document.
(v) Any other documents reasonably necessary for the
consummation of the transactions contemplated by this Agreement.
(w) Vacant possession of the Purchased Real Property,
Leased Real Property and the premises relating to the Ninth Avenue Lease, free
of tenancies and rights of occupants, only subject to rights of occupants or
other parties pursuant to the Assigned Contracts.
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Section 3.04. Buyer's Deliveries to Seller at Closing. Buyer
shall, on or prior to the Closing Date, make or cause to be made the following
payments and deliveries to Seller, each of which shall be in form and substance
acceptable to the Seller:
(a) The balance of the Purchase Price pursuant to Section
2.2(b)(ii).
(b) The duly executed Assignment Agreements.
(c) Transfer tax forms which have been duly completed and
executed by the Seller and Buyer to the extent applicable.
(d) Such other payments and deliveries as Buyer shall be
required to make on or before the Closing Date pursuant to Section 4.1 herein or
any other provision of this Agreement or any other Transaction Document.
(e) Any other documents reasonably necessary for the
consummation of the transactions contemplated by this Agreement.
Section 3.05. Cure Obligations. Prior to or in connection with
the Closing, Seller shall cure, or provide adequate assurance that all monetary
and non-monetary pre-Closing Date defaults (including, without limitation, those
listed on Schedule 5.1.9(a) under the Assigned Contracts (other than the Ninth
Avenue Lease and the Selected Contracts) have been cured or will be cured from,
or otherwise attach to, the proceeds of the sale contemplated by this Agreement
so that the Buyer shall have no obligations under the Assigned Contracts (other
than the Ninth Avenue Lease and the Selected Contracts) arising or accruing
prior to the Closing Date. Unless the Buyer elects not to purchase the Ninth
Avenue Lease, prior to or in connection with the Closing, Buyer shall cure or
provide adequate assurance that all monetary and non-monetary pre-Closing Date
defaults under the Ninth Avenue Lease have been cured or will be cured. Buyer
shall cure or provide adequate assurance that all monetary and non-monetary
pre-Closing Date defaults under the Selected Contracts have been cured or will
be cured. Buyer shall be vested with standing in the Bankruptcy Court, or any
other court of competent jurisdiction, to contest the cure amount, if any, due
on the Ninth Avenue Lease to the property owner. Notwithstanding any other
provision of this Agreement to the contrary, approval of the sale to Buyer shall
not be deemed to fix the cure amount due, if any, on the Ninth Avenue Lease.
Buyer shall have thirty (30) days from the Closing Date to file a motion in the
Bankruptcy Court to fix or contest the cure amount, if any, due on the Ninth
Avenue Lease.
Section 3.06. Closing Date Prorations.
(a) Income and Expenses.
(i) The following items shall be adjusted and
prorated at Closing as of 11:59 P.M. on the day preceding the Closing Date, and
the net amount thereof shall be added to (if such net amount is in Seller's
favor) or deducted from (if such net amount is in Buyer's favor) the payment
required pursuant to subparagraph 2.2(b)(ii):
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(a) pre-paid rent and other sums and charges
payable under Leases;
(b) any pre-paid rental and other income on
Production Contracts and Subleases
(collectively, "Sublease Income"); and
(c) real estate taxes, water (based on Official
Department of Environmental Protection water
meter readings obtained (to the extent
possible with reasonable efforts by Seller)
within thirty (30) days before the Closing)
and sewer rents and charges, vault taxes,
utility fees and charges, and all other
fees, taxes and charges relating to or
payable in connection with the use,
occupancy, maintenance, ownership and
operation of the Purchased Assets as
applicable.
(ii) Rent and other income on Production Contracts
and Subleases payable to Seller but not yet collected (collectively, "Sublease
Receivables") shall be adjusted and prorated on an if, as and when collected
basis. At the Closing, Seller shall deliver Schedule 3.3.14. Subject to the
provisions of subparagraph 3.6.1(c), any amount collected by Buyer or Seller
from any subtenant under a Sublease or vendee under a Production Contract shall
be applied (i) first in payment of Sublease Receivables, as set forth in
Schedule 3.3.14, for the month in which the Closing Date occurs, (ii) second, in
payment of Sublease Receivables, as set forth in Schedule 3.3.14, for the month
which precedes the month in which the Closing occurs, (iii) third, in payment of
Sublease Receivables for periods after the month in which the Closing Date
occurs through the month in which such rents are collected, and (iv) fourth, in
payment of Sublease Receivables, as set forth in Schedule 3.3.14, for all
periods prior to Closing. Each such amount, less any costs of collection
(including reasonable counsel fees) reasonably allocable thereto, shall be
adjusted and prorated as provided above, and the party who receives such amount
shall promptly pay over to the other party the portion thereof to which it is so
entitled. As to all delinquencies in Sublease Receivables set forth on Schedule
3.3.14, Buyer's sole obligation shall be to bill the delinquent tenants or
vendees on a monthly basis for a period of six (6) consecutive months following
the Closing Date. Thereafter, the Seller shall have the right to sue such
tenants or vendees to collect such delinquencies, but the Seller shall not be
entitled to evict (by summary proceedings or otherwise) any such tenants or
terminate the applicable Production Contract with such vendees.
(iii) With respect to any Sublease that provides for
so-called "escalation rent" based upon increases in real estate taxes or
operating expenses or labor costs or cost of living or porter's wages or
otherwise (collectively, "Overage Rent"), if the Closing shall occur prior to
the time when such Overage Rent is payable, then such Overage Rent for the
applicable accounting period in which the Closing occurs shall be apportioned
subsequent to the Closing promptly after the collection thereof. Buyer agrees
that it will pay over to the Seller the proportion of such Overage Rent that the
portion of such accounting period prior to the Closing Date bears to the entire
such accounting period, less a like portion of any costs and expenses (including
reasonable counsel fees) incurred by Buyer in the collection of such Overage
Rent, if and when the tenant
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paying the same has made all payments of rent (including Overage Rent) then due
to Buyer pursuant to the terms of such tenant's Sublease. As to the Overage Rent
in respect of an accounting period that shall have expired prior to the Closing
but which shall become payable after the Closing, Buyer agrees that it will pay
the entire amount over to Seller upon receipt thereof, less the costs and
expenses (including reasonable counsel fees) incurred by Buyer in the collection
of such Overage Rent, if and when the subtenant paying the same has made all
payments of rents (including Overage Rent) then due to Buyer pursuant to the
terms of such subtenant's Sublease. Buyer agrees that it shall promptly render
bills for and shall exercise reasonable efforts in the collection of Overage
Rent and shall, upon receipt thereof, promptly pay to the Seller the amount to
which the Seller is entitled as above provided; provided, however, that Buyer
shall not be required to commence any action, suit or proceeding in order to
collect any such Overage Rent. If prior to the Closing, the Seller shall collect
any sums on account of Overage Rent for a year or other period, or any portion
of such year or other period, beginning prior but ending subsequent to the
Closing, such sum shall be apportioned at the Closing as of the day preceding
the Closing Date. To the extent that any portion of the Overage Rent is required
to be paid monthly by subtenants on account of estimated amounts for the current
period, and at the end of each calendar year (or, if applicable, at the end of
the lease year), such estimated amounts are to be recalculated based upon the
actual expenses and other relevant factors for that calendar (or Sublease) year,
with the appropriate adjustments being made with such subtenants, then such
portion of the Overage Rent shall be prorated between the Seller and Buyer at
the Closing based on the estimated payments received to the Closing Date for the
calendar or lease year in which the Closing occurs. At the time(s) of final
calculation and collection from (or refund to) subtenants of the amounts in
reconciliation of actual Overage Rent for a period for which estimated amounts
have been prorated, there shall be a reproration between the Seller and Buyer,
with the net credit resulting from such reproration being payable to the
appropriate party (i.e., to the Seller if the recalculated amounts exceed the
estimated amounts and to Buyer if the recalculated amounts are less than the
estimated amounts).
(b) Assessments. If at Closing the Purchased Real Property or
any part thereof is affected by any real property assessments that are or may
become payable in installments, then Seller shall be liable for those
installments that become due and payable on or prior to the Closing Date, and
Buyer will assume liability for payment of all installments that are due and
payable after the Closing Date. Seller shall deliver to Buyer a copy of any
written notice of assessment from any governmental taxing authority reasonably
promptly after Seller's receipt thereof.
(c) Real Property Tax Adjustment.
(i) If the Closing occurs after a tax rate for the
then current real property tax fiscal year (the "Tax Year") is fixed, then the
apportionment of such Taxes and assessments will be based on the tax rate in
effect as of the day immediately prior to the date of the Closing. If the
Closing occurs before a tax rate for the then current Tax Year is fixed, then
apportionment of such Taxes shall be based upon the tax rate for the next
preceding year applied to the latest assessed valuation. To the extent the
actual real property Taxes and assessments for the then current Tax Year differ
from the amount apportioned at Closing, the parties shall make all necessary
adjustments by appropriate payments between themselves following Closing. In any
case,
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Seller will have no obligation to make any adjustment or apportionment or
otherwise compensate Buyer due to any increase in real property Taxes resulting
from a change in the tax rate or assessment effective on or after the date of
the Closing by reason of the conveyance of the Property or change of ownership.
(ii) Buyer or Seller shall not be required to
commence any administrative or judicial proceeding for the refunds of any Tax
Year prior to Closing. Buyer shall be entitled to the benefits of any refunds
for any Tax Years that end prior to Closing whether or not such refund is
obtained as a result of a proceeding commenced or continued by Buyer; provided,
however, that Seller shall be entitled to one-half (1/2) of the benefits of any
refunds of amounts actually paid by Seller for any Tax Years that end prior to
Closing (net of any pro rata costs incurred by Buyer in connection with such
proceeding commenced or continued by Buyer), whether or not such refund is
obtained as a result of a proceeding commenced or continued by Buyer.
(iii) Any refund of real property Taxes and
associated expenses relating to the Tax Year during which Closing occurs shall
be apportioned between Buyer and Seller based upon the date of Closing. Seller
represents to Buyer that, as of the date hereof, Seller has not filed any
proceeding to secure a real property Tax refund for the tax fiscal year of July
1, 1999 to June 30, 2000. Seller shall not be required to commence or continue
any such administrative or judicial proceeding, however, if Seller commences any
such proceeding, Seller shall control such proceeding; provided, however, Seller
shall not settle any such proceeding seeking a refund of real property Taxes
relating to the Tax Year during which Closing occurs without the consent of
Buyer, which consent shall not be unreasonably withheld, conditioned or delayed.
(iv) Seller represents to Buyer that, as of the date
hereof, Seller has not filed any proceeding to secure a real property Tax refund
for the tax fiscal year of July 1, 2000 to June 30, 2001. Seller shall not be
obligated to commence or continue any such proceeding. In the event Seller
commences any such proceeding prior to Closing, Buyer may, at its option, elect
to continue such proceeding; provided, however, Buyer shall not settle or
discontinue any such proceeding without the written consent of Seller, not to be
unreasonably withheld, conditioned or delayed.
(d) Survival. The provisions of this Section 3.6 shall survive
Closing. Except as otherwise provided herein, adjustments shall be made in
accordance with the customs in respect to title closings recommended by the Real
Estate Board of New York, Inc.
Section 3.07. Possession. On the Closing Date, Seller shall
deliver to Buyer possession (subject only to occupancy rights, if any, created
by the Leases, Production Contracts and the Subleases) of the Purchased Real
Property and the Leased Real Property.
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ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.01. Conditions to Seller's Obligations. Seller's
obligations to make the deliveries required of Seller on the Closing Date shall
be subject to the satisfaction (or waiver by Seller) of each of the following
conditions and consummation of the transactions contemplated hereby on or before
the Closing Date.
(a) All of the representations and warranties of Buyer
contained herein shall be true and correct as of the date of this Agreement and
shall continue to be true and correct on the Closing Date in all material
respects and Buyer shall have delivered to Seller a certificate, dated the
Closing Date, to such effect.
(b) All of the covenants and obligations to be performed by
Buyer at or prior to the Closing Date shall have been performed in all material
respects.
(c) Buyer shall have executed and delivered to Seller the
Transaction Documents required to be executed by the Buyer and each other
document as set forth in Section 3.4 herein.
(d) Without limiting the provisions of Section 4.1.2, Buyer
shall have paid to Seller the balance of the Purchase Price as provided in
Section 2.2(b)(ii).
(e) Buyer shall have delivered to Seller appropriate evidence
of all necessary corporate action by Buyer in connection with the transactions
contemplated hereby, including, without limitation, (i) certified copies of
resolutions duly adopted by Buyer's directors approving the transactions
contemplated by this Agreement and authorizing the execution, delivery, and
performance by Buyer of this Agreement and the other Transaction Documents to be
executed by Buyer pursuant hereto; and (ii) a certificate as to the incumbency
of officers of Buyer executing this Agreement and any instrument or other
document delivered in connection with the transactions contemplated by this
Agreement.
(f) No action, suit or other proceedings shall be pending
before any court, tribunal or Governmental Authority seeking or threatening to
restrain or prohibit the consummation of the transactions contemplated by this
Agreement, or seeking to obtain substantial damages against Buyer or the
Purchased Assets in respect thereof, or involving a claim that consummation
thereof would result in the violation of any law, decree or regulation of any
Governmental Authority having appropriate jurisdiction.
(g) The Bankruptcy Court shall have entered the Procedures
Order and the Sale Order in accordance with Section 8.2 below and all conditions
contemplated by such Orders to consummation of the transactions contemplated
hereby shall have been satisfied.
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Section 4.02. Conditions to Buyer's Obligations. Buyer's
obligations to make the deliveries required of Buyer on the Closing Date shall
be subject to the satisfaction (or waiver by Buyer) of each of the following
conditions and the consummation of the transactions contemplated hereby on or
before the Closing Date:
(a) All representations and warranties of Seller contained
herein shall be true and correct as of the date of this Agreement and shall
continue to be true and correct on the Closing Date in all material respects and
Seller shall have delivered to Buyer a certificate, dated the Closing Date, to
such effect.
(b) All of the covenants and obligations to be performed by
Seller at or prior to the Closing shall have been performed in all material
respects.
(c) Seller shall have executed and delivered to Buyer the
Seller Transaction Documents and each other document set forth in Section 3.3
herein.
(d) Seller shall have delivered to Buyer appropriate evidence
of all necessary corporate action by Seller in connection with the transactions
contemplated hereby, including, without limitation: (i) certified copies of
resolutions duly adopted by Seller's directors or members approving the
transactions contemplated by this Agreement and authorizing the execution,
delivery, and performance by Seller of this Agreement; and (ii) a certificate as
to the incumbency of officers of Seller executing this Agreement and any
instrument or other document delivered in connection with the transactions
contemplated by this Agreement.
(e) No action, suit or other proceedings shall be pending
before any court, tribunal or Governmental Authority seeking or threatening to
restrain or prohibit the consummation of the transactions contemplated by this
Agreement, or seeking to obtain substantial damages in respect thereof, or
involving a claim that consummation thereof would result in the violation of any
Law of any Governmental Authority having appropriate jurisdiction.
(f) The Bankruptcy Court shall have entered the Procedures
Order and the Sale Order in accordance with Section 8.2 below and all conditions
contemplated by such Orders to consummation of the transactions contemplated
hereby shall have been satisfied.
(g) Seller shall have delivered all of the Purchased Assets
(subject to the Permitted Encumbrances) to the Buyer.
(h) Seller shall have cured or escrowed, or made provision for
the availability of, all funds needed to cure all defaults, Liens and
Liabilities with respect to the Purchased Assets, except those defaults, Liens
and Liabilities related to the Ninth Avenue Lease and the Selected Contracts.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Seller's Representations and Warranties. Seller
hereby makes the following representations and warranties to Buyer:
(a) Validity of Agreement. Subject only to the entry of the
Sale Order, all action on the part of the Seller necessary for the
authorization, execution, delivery and performance by Seller of this Agreement
and the other Transaction Documents to which Seller is a party, including, but
not limited to, the Seller's obligations hereunder and thereunder, has been duly
taken. Subject only to entry of the Sale Order, and upon the assumption that
this Agreement and the other Transaction Documents to which Seller is a party
when executed and delivered by Seller shall constitute a legal, valid and
binding obligation of Buyer, this Agreement and the other Transaction Documents
to which Seller is a party constitute the valid and binding obligation of Seller
enforceable in accordance with their respective terms.
(b) Organization, Standing and Power. Unitel Video, Inc. is a
corporation, and Unitel 57 LLC and Unitel 53 LLC are limited liability
companies, each of which are duly organized, validly existing and in good
standing under the laws of the State of Delaware. Subject only to the approval
of the Bankruptcy Court, Seller has all requisite corporate or limited liability
company, as applicable, power and authority to own, lease and operate it
properties, to carry on its business as now being conducted and, subject only to
entry of the Sale Order, to execute, deliver and perform this Agreement and the
other Seller Transaction Documents related hereto.
(c) No Conflicts or Violations. Upon obtaining entry of the
Sale Order in substantially the form set forth on Schedule 5.1.3 hereof, the
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated, and the performance of, fulfillment of and compliance with
the terms and conditions hereof by Seller do not and will not: (i) conflict with
or result in a breach of the certificate of incorporation, the by-laws or
operating agreement of Seller; (ii) violate in any material respect any material
statute, law, rule or regulation, or any order, writ, injunction or decree of
any court or governmental authority; or (iii) violate or conflict with or
constitute a default under any agreement, instrument or writing of any nature to
which Seller is a party and which is material to Seller or by which Seller or
its assets or properties may be bound which is material to Seller.
(d) Title to Purchased Assets. Seller owns or as of the
Closing Date will own all Equipment and Machinery and has or, as of the Closing
Date will have, the right to transfer the Purchased Assets, free and clear of
all Liens (other than the Permitted Encumbrances and Assumed Future
Obligations).
(e) Security Deposits. Seller has delivered Schedule 3.3.13 to
the Buyer, together with a certified check or wire transfer in the amount (if
any) due to Buyer (unless the sum is deducted from the Purchase Price).
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(f) Sublease Income. Seller has delivered Schedule 3.3.14 to
the Buyer, together with a certified check in the amount (if any) due to Buyer
(unless the sum is deducted from the Purchase Price).
(g) Advance Payments. Seller has delivered Schedule 3.3.17 to
the Buyer, together with a certified check in the amount (if any) due to Buyer
(unless the sum is deducted from the Purchase Price).
(h) Litigation. Except as set forth in Schedule 5.1.8 and in
connection with the Bankruptcy Case, to the Knowledge of Seller, there are no
material actions, lawsuits, arbitrations, mediations, suits, administrative or
other proceedings (collectively, "Proceedings") pending or, to the Knowledge of
Seller, threatened in writing, against Seller or, to Seller's Knowledge,
affecting the Purchased Assets.
(i) Real Property.
(i) Set forth under the heading "Leases and
Subleases" in Schedule 1.2 is a true, correct and complete list of all the
Leases and Subleases. The Seller has delivered to the Buyer true, complete and
correct copies of all Leases and Subleases including all amendments,
modifications, extensions and renewals thereof. To the Seller's Knowledge, each
Lease and Sublease is in full force and effect and, except as set forth in
Schedule 5.1.9(a), all rent and other sums and charges payable by the Seller
under the Leases or the subtenants under the Subleases are current, and no
written notice of default or termination under any Lease or Sublease has been
issued or received that is outstanding. Except to the extent set forth under the
heading "Leases and Subleases" in Schedule 1.2, none of the Leases or Subleases
have been amended, modified or extended as of the date hereof.
(ii) To the Seller's Knowledge, the Seller has not
transferred any air rights, light rights, or development rights applicable or
appurtenant to the Premises and no signing rights have been granted to any
person (other than pursuant to that certain License Agreement made by New York
City Industrial Development Agency and Unitel Video, Inc. and International
Flavors and Fragrances, Inc. dated as of May 2, 1994).
(iii) Intentionally deleted.
(iv) In the last twelve months, (i) the Seller has
not received written notice from any insurance company or Board of Fire
Underwriters (or organization exercising functions similar thereto) requiring
the performance of any work or alteration to any of the Premises and (ii) the
Seller has not received written notice from any insurance company of any
termination of casualty insurance coverage with respect to the Premises.
(v) Except as set forth in the materials obtained or
prepared by the Chicago Title Insurance Company and delivered to Buyer, the
Seller has not received written notice (including, without limitation, from any
governmental regulatory authority with authority over the Premises) that any
work is required to be done upon or in connection with the Premises, where such
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work remains outstanding and, if unaddressed, would have a material adverse
effect on the use of the Premises as currently owned and operated.
(vi) Except as set forth in Schedule 5.1.9(a),
neither Seller nor any other party to the Leases or Subleases has terminated or
repudiated in writing any term of the respective Lease or Sublease.
(j) Contracts. The Contracts listed in Schedule 1.2, together
with the agreements and contracts set forth on Schedule 1.4 the unsigned
production agreement (the "Sixth Avenue Production Agreement"), the sublease
(the "Sixth Avenue Sublease") between the Debtors and Sixth Avenue Productions
respectively relating to the Ninth Avenue Lease and the 55th Street Lease, and
the Ninth Avenue Lease (if Buyer elects not to acquire such Lease), represent
all contracts relating primarily to the Studio Business and the Purchased Assets
to which the Seller is a party. The Seller has delivered to the Buyer originals
or true, complete and accurate certified copies or duplicate originals of all
Contracts listed on Schedule 1.2, including all amendments and/or modifications
thereto. Subject to the entry of the Sale Order, each Contract listed on
Schedule 1.2 is binding and in full force and effect as against each party
thereto, and shall be in full force and effect as against each party thereto
after the assignment thereof to the Buyer.
(k) Brokers. Houlihan, Lokey, Howard & Zukin Capital ("HLHZ")
is Seller's exclusive investment banker and broker with respect to the Purchased
Assets. Except for HLHZ, no broker, finder or investment banker is, or will be,
entitled to any brokerage, finder's or other fees or commissions from Seller in
connection with the transactions contemplated by this Agreement. Seller is
responsible for the fees and expenses of HLHZ (as set forth in Seller's
agreement with HLHZ). Seller will indemnify Buyer from any claim by any person
that such person is entitled to a broker's or finder's fee in connection with
this transaction based on communications with Seller.
(l) Equipment and Machinery. Schedule 5.1.12, as updated from
time to time, is a true and complete list of the Equipment and Machinery as of
the Closing.
(m) Financing. All financial information (including
information relating to Seller's and Buyer's obligations under the HSR Act)
delivered by Seller to Buyer pursuant to the terms hereof is true, complete and
correct.
Section 5.02. Buyer's Representations and Warranties. Buyer
hereby makes the following representations and warranties to Seller:
(a) Validity of Agreement. All action on the part of Buyer
necessary for the authorization, execution, delivery and performance by Buyer of
this Agreement and the other Transaction Documents to which Buyer is a party,
including, but not limited to, the performance of Buyer's obligations hereunder
and thereunder, has been duly taken. Subject only to entry of the Sale Order,
and upon the assumption that this Agreement and the other Transaction Documents
to which Buyer is a party constitutes legal, valid and binding obligations of
Seller, this Agreement and the other Transaction Documents to which Buyer is a
party, when executed and delivered by Buyer, shall
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constitute the valid and binding obligations of Buyer enforceable in accordance
with their respective terms.
(b) Organization, Standing and Power. Buyer is a corporation
duly formed, organized, validly existing and in good standing under the laws of
the State of New York. Buyer has all requisite corporate power and authority to
own, lease and operate its properties, to carry on its business as now being
conducted and to execute, deliver and perform this Agreement, the other
Transaction Documents to which it is a party and all writings and documents
relating hereto and thereto.
(c) No Conflict or Violations. The execution and delivery of
this Agreement and the other Transaction Documents to which Buyer is a party,
the consummation of the transactions herein and therein contemplated, and the
performance of, fulfillment of and compliance with the terms and conditions
hereof and thereof by Buyer do not and will not: (i) conflict with or result in
a breach of the articles of incorporation or by-laws of Buyer; (ii) violate any
Law; or (iii) violate or conflict with or constitute a default under any
agreement, instrument or writing of any nature to which Buyer is a party or by
which Buyer or its assets or properties may be bound.
(d) Financing. Buyer will have at the Closing Date sufficient
funds available to pay the Purchase Price. Buyer has demonstrated that it is
Financially Qualified. Buyer is able to provide adequate assurance of future
performance under the Assigned Contracts. All financial information (including
information relating to Seller's and Buyer's obligations under the HSR Act)
delivered by Buyer to Seller pursuant to the terms hereof is materially true,
complete and correct.
(e) Brokers. Except for HLHZ, no broker, finder or investment
banker is, or will be, entitled to any brokerage, finder's or other fees or
commissions from Seller in connection with the transactions contemplated by this
Agreement. Buyer will indemnify Seller from any claim by any person (other than
HLHZ) that such person is entitled to a broker's or finder's fee in connection
with this transaction based on communications with Buyer.
(f) HSR Act. Neither Seller, nor Buyer, nor Buyer's "ultimate
parent" entity (even when combined with an entity that is 'controlled by' Buyer
or Buyer's 'ultimate parent' entity) has either "annual net sales" or "total
assets" equal to or greater than $100 million, as those terms are defined in 16
C.F.R. Section 108.11 and used in Section 7A(a)(2) of the Clayton Act, 15 U.S.C.
Section 18A and/or 16 C.F.R. Section 801.1(a) and (b).
ARTICLE VI
COVENANTS
Section 6.01. Business Activities; Preservation of Business;
Cooperation. During the period from the date hereof to the Closing Date, Seller
will use commercially reasonable efforts to do the following in substantially
the same manner as Seller has
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been doing between the Petition Date and the date hereof: (i) maintain and
preserve the Purchased Assets and business relationships of Seller to the Studio
Business; and (ii) preserve for the benefit of Buyer the goodwill of suppliers,
customers, landlords and others having business relations with Seller. Seller
shall not modify, alter, sell, transfer, surrender or terminate any of Seller's
rights with respect to the Purchased Assets out of the Ordinary Course of
Business without the prior written consent of the Buyer, which consent shall not
be unreasonably withheld. Without limitation of the foregoing, Buyer
acknowledges that it has had the opportunity to review uncertified copies of all
Contracts and, in the event any Production Agreement, Lease or Sublease expires,
there shall be no reduction in the Purchase Price as a result thereof.
Commercially reasonable efforts under this Section 6.1 shall not require any
Seller to expend funds, commence litigation or incur any obligation, except as
Seller may be required under the Contracts.
Section 6.02. Access to Books and Records and Premises. Until
the Closing Date, the Seller shall afford to Buyer, and to the accountants,
counsel, agents and representatives of the Buyer, reasonable access during
normal business hours to all books and records of the Seller relating to the
Studio Business and the Purchased Assets. Upon reasonable notice to Seller (but
not less than 48 hours), and with Seller's consent which shall not be
unreasonably withheld, conditioned or delayed, the Seller shall afford to Buyer,
and to the accountants, counsel, agents and representatives of the Buyer,
reasonable access during normal business hours to the Premises, which access
shall in no event interfere with the Seller's Studio Business operations.
Section 6.03. Post-Execution Contracts. From the Execution
Date until the earlier of (i) the Closing Date and (ii) the date upon which a
third party submits a qualified Overbid (as defined below) in accordance with
the Procedures Order (as defined below), Seller shall not enter into any
contract (including any per diem contracts) primarily relating to the Studio
Business which contemplates services on or after the Closing Date (as reasonably
determined by Buyer and Seller) without the prior written consent of Buyer which
consent shall not be unreasonably withheld. Buyer shall be deemed to be acting
reasonably if in its reasonable opinion the proposed contract has a material
adverse effect on the market value of the Purchased Assets.
Section 6.04. Further Assurances.
(i) Upon the reasonable request of either party at
any time after the Closing Date, the other party shall do, execute, acknowledge
and deliver, or cause to be done, executed, acknowledged and delivered, all such
further documents as may be reasonably necessary to confer the benefits
expressly intended by this Agreement; provided, however, that no party hereto
shall be obligated to incur any out-of-pocket expense or other liability or
obligation not expressly contemplated by the other provisions of this Agreement.
(ii) The provisions of this Section 6.4 shall survive
the Closing.
Section 6.05. Notice of Transaction. Seller shall provide
notice of the transactions contemplated by this Agreement as required by the
Bankruptcy Code and applicable rules.
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Section 6.06. Estoppel Certificates.
(i) Seller may obtain estoppel certificates from the
respective subtenants under the Subleases and from the respective landlords
under the Leases. The respective estoppel certificates from the respective
Subtenants shall state that: (i) the Sublease has not been modified and is in
full force and effect or, if there has been a modification, that the Sublease is
in full force and effect as modified, and identify the modifications; (ii) the
dates to which the Fixed Rent and Additional Rent (as defined in the respective
Subleases), and other charges under the Sublease were paid; (iii) that, to
subtenant's knowledge, no defaults exist under the Sublease or, if any defaults
do exist, specifying the nature of each such default; and (iv) that, to
subtenant's knowledge, no rents have been paid in advance to Seller by such
subtenant. The respective estoppel certificates from the landlords shall state
that: (i) the Lease has not been modified or, if modified, that the Lease is in
full force and effect as modified, and identify the modifications; (ii) the
dates to which the Fixed Rent and Additional Rent (as defined in the respective
Leases), and other charges under the Lease were paid, or if not due and paid,
set forth the particular payments due but not made; and (iii) to landlord's
knowledge, no defaults exist under the Lease or, if any defaults do exist,
specify the nature of each such default. Nothing in this Section 6.6 shall
require Seller to expend funds, commence litigation or incur any obligation to
obtain these estoppel certificates.
(ii) If, despite Seller's efforts, if any, Seller
cannot obtain an estoppel certificate from any landlord or subtenant as provided
in subsection 6.6(a) above, the Sale Order shall set forth findings with respect
to the Leases and Subleases substantially consistent with those set forth in
Section 6.6(a).
Section 6.07. Landlord's Consents. Seller shall request that
the respective landlords under the 55th Street Lease and the Ninth Avenue Lease
consent (unless Buyer elects not to acquire such lease) to the transfer to Buyer
of the Seller's interest thereunder. Nothing in this Section 6.7 shall (i)
require Seller to expend funds, commence litigation or incur any obligation to
obtain such consents or (ii) require Seller to obtain the consent of the
respective landlords under the 55th Street Lease and the Ninth Avenue Lease to
the transfer to Buyer of Seller's interest thereunder.
Section 6.08. Security Deposits. From the Execution Date until
the Closing Date, without Buyer's prior consent which shall not be unreasonably
withheld, delayed or conditioned, Seller shall not apply pursuant to a default
under any Sublease in excess of 10% of any Security Deposit in Seller's
possession on the Execution Date.
Section 6.09. Intentionally Deleted.
Section 6.10. Breach of Representations, Warranties, and
Covenants. If at any time prior to Closing either Seller or Buyer has knowledge
of a breach of one of its respective representations, warranties or covenants
under this Agreement or that it will be unable to satisfy the conditions set
forth in Section 4.1 or 4.2, respectively, of this Agreement, then such party
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shall notify the other party of such facts and information promptly after
obtaining such facts and information, but not later than one (1) day prior to
the Closing Date.
Section 6.11. Operations Prior to Closing. To the extent
commercially reasonable, the Seller shall maintain the Premises in its present
condition prior to the Closing Date, ordinary wear and tear and casualty
excepted, and shall perform normal maintenance of all Equipment and Machinery
but shall have no obligation to make any repairs or replacements beyond routine
maintenance.
Section 6.12. Security Guard. From the Execution Date until
the earlier of (a) in the event that the Buyer is not the high bidder at the
Auction, the date of the Auction, and (b) the Closing Date, the Buyer shall be
permitted to maintain one (1) security guard at each of the four (4) Premises
provided that (a) such guards must be associated with a licensed security firm
unaffiliated with the Buyer; (b) the Seller must approve in advance the use of
any such security firm, which approval shall not be unreasonable withheld,
conditioned or delayed; and (c) such guards shall not interfere with the
Seller's business operations.
ARTICLE VII
OTHER AGREEMENTS AND CONDITION
Except as expressly otherwise set forth in this Agreement,
Buyer has not been induced by and has not relied on any (a) written or oral
representations, warranties, statements or undertakings, whether express or
implied; or (b) any writing or drawing furnished or made available by Seller or
any agent, member, employee, attorney or other representative of Seller or by
any broker or any other person representing or purporting to represent Seller.
Subject to the representations and warranties expressly set forth in this
Agreement, the Purchased Assets are to be sold and conveyed in their present
condition, AS IS, WHERE IS WITH ALL FAULTS as of the Execution Date, subject to
reasonable use, wear, tear, natural deterioration and casualty between the
Execution Date and Closing. Buyer assumes the responsibility and risks of all
defects and conditions relating to the Purchased Assets, including such
conditions that are disclosed in this Agreement, and including defects and
conditions that cannot be observed by casual inspection, and including
violations of law. Buyer acknowledges that Buyer has had opportunities to
inspect the Purchased Assets (including, but not limited to, the environmental,
structural and physical condition thereof) and relies entirely on Buyer's own
inspections and investigations concerning the Purchased Assets, including the
reports of consultants retained by Buyer. Without limitation of any of the other
terms contained in this Article VII, Buyer expressly acknowledges that Buyer's
entering into this Agreement shall be a conclusive and irrefutable presumption
that Buyer has not relied upon any representations, warranties, statements or
undertakings whatsoever except as are expressly set forth in this Agreement.
Buyer expressly waives, releases and agrees not to make any claim against Seller
or any of their Affiliates, for any cost recovery, whether directly or by way of
contribution, or for any other relief whatsoever, under the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, or any federal, state or local statute or
regulation, or any federal or state common law whether now existing or
applicable or hereinafter
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enacted or applicable, providing for any right of recovery for any environmental
matter relating to or arising out of the Premises.
ARTICLE VIII
COURT APPROVALS
Section 8.01. Intentionally Deleted.
Section 8.02. Sale Order.
(i) Seller shall support and use its commercially
reasonable efforts to effectuate the entry of one or more Final Orders, in
substantially the form annexed hereto as Schedule 5.1.3 and to the extent
permitted by law, approving the transactions contemplated by this Agreement
pursuant to Sections 363, 365 and 105 of the Bankruptcy Code (the "Sale Order"),
which Final Order(s) shall be in form and substance reasonably satisfactory to
Buyer, and shall provide, without limitation, that:
as of the Closing Date, the transactions contemplated
by this Agreement will effect a legal, valid,
enforceable and effective sale and transfer of the
Purchased Assets to Buyer and shall vest Buyer with
title to the Purchased Assets free and clear of all
Liens other than the Permitted Encumbrances and the
Assumed Future Obligations;
the transactions contemplated by this Agreement
constitute reasonably equivalent value and fair
consideration for the Purchased Assets being
purchased;
Buyer shall have no liability in respect of any Lien,
against or liability or obligation of Seller other
than as expressly set forth in this Agreement or the
other Transaction Documents (which, prior to Closing,
Seller will have previously received and approved);
consistent with Seller's rights under the Leases
and/or Subleases (notwithstanding any default by
Seller thereunder), Buyer shall have free and
unfettered access to the Premises (subject to the
occupancy rights created under the Production
Contracts and Subleases and any other Permitted
Encumbrances);
Buyer is a good faith purchaser of the Purchased
Assets, as that term is used in Section 363(m) of the
Bankruptcy Code, and is entitled to the protections
provided by such section; and
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as of the Closing Date, the Assigned Contracts will
have been assigned to the Buyer in accordance with
Sections 365 and 105 of the Bankruptcy Code and the
terms and conditions of this Agreement, and all
monetary and non-monetary cure obligations, if any,
required to be paid or made in connection with such
assignments shall be satisfied by Seller;
(ii) Seller shall take such steps necessary to
schedule a hearing to approve the Sale Order on reasonable notice sufficient to
satisfy the conditions set forth herein and the requirements of the Bankruptcy
Code and related Rules.
ARTICLE IX
REAL PROPERTY MATTERS
Section 9.01. Title Exceptions.
(i) Reference is made to the certificates of title
(collectively, the Title Reports") nos. 3100-00248 [9th Avenue], 3100-00249
[57th Street] and 3100-00250 [53rd Street], issued by the Title Company with
respect to the Purchased Real Property and the Leased Real Property located at
841 Ninth Avenue (such properties, collectively, the "Studio Properties").
(ii) In the event that at any time prior to the
Closing Date, the Buyer becomes aware of any Title Defects, other than those
listed on the Title Reports, as a result of any updates thereof, the Buyer shall
have fifteen (15) Business Days from the date it first became aware of such
Title Defect to notify the Seller of the same (together with any documentation
or other materials or information with respect thereto received by the Buyer).
If the Buyer does not give notice to the Seller within such time period then the
Buyer shall be deemed to have waived such additional Title Defects (which shall
then be deemed to be Permitted Encumbrances) and shall accept title subject
thereto.
(iii) If, as of the Closing Date, the Title Company
shall not be willing to insure title to the Purchased Real Property and the
Ninth Avenue Lease (unless Buyer elects prior to Closing not to acquire such
lease) free and clear of recorded Title Defects other than the Permitted
Encumbrances, Buyer shall have as its sole and exclusive remedy the option of
either (a) terminating this Agreement (in which event Escrow Agent shall pay (i)
the Deposit with accrued interest, if any, to Buyer (ii) the fee for the title
examination in connection with the Title Report, to the Title Company, and (iii)
the reasonable cost of any survey obtained, to the surveyor), whereupon neither
party shall have any further rights or obligations hereunder except those
expressly stated to survive a termination of this Agreement, or (b) accepting
such title as Seller shall be able to convey, without any reduction of the
Purchase Price or any credit or allowance against the same.
(iv) If the Seller requests, the Buyer shall on the
Closing Date make separate wire transfers of funds (or shall cause the Title
Company to make such transfers), aggregating not more than the portion of the
Purchase Price payable under Section 2.2(b)(ii), to
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facilitate the satisfaction by Seller of any Title Defects. The existence of any
such Title Defects shall not be deemed "Title Defects" if paid from the Purchase
Price.
Section 9.02. Violations. Seller shall have no obligation to
remove or cure any notes or notices of violation of law or municipal ordinances,
orders or requirements noted in or issued by any federal, state or municipal
department having jurisdiction against or affecting the Premises; provided that
if Seller receives any such notes or notices of violation either before or after
the Closing Date, Seller shall promptly provide Buyer with the copies received
by Seller.
Section 9.03. Casualty and Condemnation.
(i) In the event of any damage or destruction by
reason of any casualty to the Improvements constituting the whole or part of any
Premises, or if there shall be any takings by condemnation, eminent domain or
expropriation of all or any portion of the Premises prior to the Closing Date,
this Agreement shall remain in full force and effect, and the Seller shall (i)
in the case of damage or destruction at Buyer's election, either (a) pay over to
the Buyer at Closing all insurance proceeds received by the Seller prior to the
Closing Date in respect of such casualty (and pay or credit Buyer the amount of
any such deductible) and assign to the Buyer all of the Seller's right, title
and interest in and to the remainder of such proceeds not received by the Seller
as of the Closing Date, and Seller will, at Buyer's cost and expense, reasonably
cooperate with Buyer in Buyer's efforts to attempt to collect such insurance
proceeds from the applicable insurance carrier, or (b) receive an abatement to
the Purchase Price equal to the cost of repair and/or restoration, and (ii) in
the case of condemnation, eminent domain or expropriation, pay over to the Buyer
all awards received by the Seller on account of such condemnation, eminent
domain or expropriation prior to the Closing Date or assign to the Buyer the
Seller's right to receive the same; in either case net of the amounts reasonably
expended or incurred by the Seller in repairing or restoring the Premises.
Notwithstanding the foregoing to the contrary, if the amount of damage or
destruction to the Premises exceeds $250,000, Buyer may elect to terminate this
Agreement and receive back the Deposit (and interest accrued thereon). Buyer
acknowledges that Buyer's right to any condemnation award with respect to any
Leased Real Property is subject to the terms of the applicable lease and in no
event shall Buyer be entitled to more than the amount the tenant under the
applicable Lease is entitled to receive. In addition, Buyer acknowledges that
the applicable landlord may have the right to terminate the Lease for a Leased
Real Property in the event of a casualty or condemnation and that any such
termination shall not affect the obligations of Buyer hereunder and Buyer shall
not be entitled to any reduction of or credit against the Purchase Price by
reason of any such termination. The provisions of this Section 9.3 are intended
to, and shall, supersede any contrary provision of law, including but not
limited to, New York General Obligation Law Section 5-1311, and the parties
hereby waive any contrary provision of law, including but not limited to, New
York General Obligation Law Section 5-1311. The Seller shall have the right to
adjourn the Closing for such period, not to exceed twenty (20) Business Days and
subject to 10.1(b), as the Seller reasonably deems necessary to allow the Seller
to settle any insurance claims or legal actions; provided that Seller shall not
enter into any such settlement without the permission of the Buyer, which
consent shall not be unreasonably withheld or delayed.
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(ii) From and after the date hereof until the Closing
Date, the Seller shall keep in full force and effect the property insurance
policies they currently maintain with respect to the Premises (or insurance
policies that are, in all material respects comparable to the property policies
that the Seller currently maintains with respect to the Premises). Seller shall
deliver to Buyer certificates of insurance naming Buyer as an "additional
insured, as its interest may appear." Buyer acknowledges that Seller does not
maintain property insurance policies on the building at 423 West 55th Street.
ARTICLE X
TERMINATION
Section 10.01. Conditions of Termination. Notwithstanding
anything to the contrary contained herein, this Agreement may be terminated upon
written notice or agreement prior to Closing:
(i) By mutual written consent of both the Seller and
the Buyer;
(ii) By the Buyer, if any condition contained in
Section 4.2 has not been satisfied or waived by the date (the "Final Closing
Date") which is the latest of (1) April 30, 2001 and (2) in the event that the
Sale Order is subject to appeal, one hundred twenty (120) days after the
Execution Date and (3) the date which is mutually and reasonably agreed upon by
the parties hereto, provided, however, that the right to terminate this
Agreement under this Section 10.1(b) shall not be available to the Buyer if its
failure to fulfill or comply with any of its obligations under this Agreement
shall have been the reason that the condition to Closing shall not have been
satisfied on or prior to the Closing Date.
(iii) By the Seller, if any condition contained in
Section 4.1 has not been satisfied or waived by the Final Closing Date;
provided, however, that the right to terminate this Agreement under this Section
10.1(c) shall not be available to the Seller if its failure to fulfill or comply
with any of its obligations under this Agreement shall have been the reason that
the condition to Closing shall not have been satisfied on or prior to the
Closing Date;
(iv) By the Buyer or the Seller, if the Bankruptcy
Court or other Governmental Authority has issued an Order or taken any other
action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such Order, or other action has become final
and non-appealable;
(v) By the Buyer, upon Seller entering into any
contract with respect to an Alternate Transaction;
(vi) By the Seller, if the Buyer defaults in any
material respect in the performance of its obligations under this Agreement and
does not cure such default within five (5) Business Days after written notice of
such default is given by the Seller;
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(vii) By the Buyer, if the Seller defaults in any
material respect in the performance of its obligations under this Agreement and
does not cure such default within five (5) Business Days after written notice of
such default is given by the Buyer;
(viii) By the Buyer or the Seller, if the Sale Order
shall not have been entered by the Bankruptcy Court on or before the Outside
Date, provided written notice of such termination is given prior to the entry of
such orders;
(ix) By the Buyer, as provided in Section 9.1(c);
(x) By the Buyer, as provided in Section 9.3(a); or
(xi) By the Buyer, if Buyer's failure to satisfy, or
obtain a waiver of, a condition contained in Section 4.1 by the Final Closing
Date was caused by Seller's failure to fulfill or comply with any of Seller's
obligations under this Agreement.
Section 10.02. Effect of Termination; Remedies. In the event
of termination pursuant to Section 10.1:
(i) if such termination is under clause (a), (b),
(d), (e), (g), (h), (i), (j) or (k) thereof, the Deposit with accrued interest,
if any, shall be returned to the Buyer as Buyer's sole and exclusive remedy
under this Agreement;
(ii) if such termination is under clause (c) or (f),
the Deposit with accrued interest, if any, shall become non-refundable to Buyer
and shall be paid to Seller as Seller's sole and exclusive remedy under this
Agreement; provided that if such termination is under clause (c) thereof because
condition 4.1.6 or 4.1.7 of this Agreement has not been satisfied or waived by
Seller, the Deposit with accrued interest, if any, shall be returned to Buyer,
as Buyer's sole and exclusive remedy; and
(iii) except as otherwise expressly provided in this
Section 10.2 and except for any obligation or liability hereunder and expressly
stated in this Agreement as surviving the termination hereof (including, without
limitation, the provisions relating to the treatment of the Deposit), this
Agreement shall become void and of no further force and effect.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Attorneys' Fees. Each of the parties hereto
shall pay the fees and expenses of its own respective counsel, accountants and
other experts and shall pay all of its own other expenses in connection with the
negotiation, preparation and execution of this Agreement and the consummation of
the transactions contemplated hereby.
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Section 11.02. Non-Survival of Representations and Warranties.
The respective representations and warranties of Seller and Buyer, whether set
forth in this Agreement or in any other Transaction Document, shall not survive
the Closing; except that the representations and indemnifications set forth in
Section 5.1.9 (only for a period of 60 days after the Closing Date), 5.1.11 and
5.2.5) shall survive the Closing. The delivery of the Bargain and Sale Deeds and
the other instruments of conveyance specifically provided for in this Agreement
shall be deemed an acknowledgment, for all purposes, of the full performance and
discharge of every representation, warranty, covenant and agreement on the part
of the Seller under the Seller Transaction Documents, except those which are
specifically stated to survive the Closing.
Section 11.03. Cooperation on Tax Matters.
(i) The Buyer and the Seller agree to furnish or
cause to be furnished to each other, as promptly as practicable upon reasonable
notice and request and at the sole cost and expense of the party so requiring,
such information and assistance relating to the Studio Business as is reasonably
necessary (i) for the preparation and filing of any return, claim for refund or
other required or optional filings relating to Taxes; (ii) for the preparation
for, and proof of facts during any audit, examination or other administrative
review or proceeding relating to Taxes; (iii) for the preparation for any Tax
protest; (iv) for the prosecution or defense of any suit or other proceeding
relating to Tax matters; and (v) to respond to any request for information by
Governmental Authority relating to Taxes.
(ii) The Buyer agrees to retain possession of in hard
copy or on read-only CD-ROM (and to make available after the Closing Date for
inspection and copying by Seller during the normal business hours of Buyer upon
reasonably request and upon reasonable notice) all accounting, business,
financial and other records and information (i) in existence on the Closing Date
and transferred to the Buyer hereunder that relate to Taxes and (ii) coming into
existence after the Closing Date which relate to Taxes that were due or payable
or imposed with respect to periods ending on or before the Closing Date, for a
period of at least seven (7) years from the Closing Date. Prior to disposing of
the materials described in the preceding sentence, Buyer shall give Seller
reasonable notice, in accordance with Section 11.4 hereof, of Buyer's intention
to dispose of such materials, and will give Seller reasonable opportunity to
take possession of such material at Seller's sole expense.
Section 11.04. Notices. Any notice, request, tender or other
communication required or permitted under this Agreement must be in writing and
shall be deemed to have been duly given and received (i) when received if
personally given; (ii) 5 calendar days after being sent by registered or
certified mail, postage prepaid, return receipt requested; (iii) after being
sent by fax, upon receipt of confirmation answerback; and (iv) one business day
after being sent by Federal Express (within the United States) or other
established overnight delivery courier, to the parties at their respective
addresses or fax numbers below.
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To Seller: Unitel Video, Inc.
555 West 57th Street
Suite 1240
New York, New York 10019
Attn.: President
Facsimile: (212) 581-7748
With a copy to: Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attn.: Mitchel Perkiel, Esq. and Benjamin
Mintz, Esq.
Facsimile: (212) 836-7149
With a copy to: Getzler & Co., Inc.
295 Madison Avenue
New York, New York 10017
Attn.: Abraham E. Getzler
Facsimile: (212) 697-4812
To Buyer: All Mobile Video Inc.
221 West 26th Street
New York, New York 10001
Attn.: Mr. Anton Duke, Chief Executive
Officer
Facsimile: (212) 255-6644
With a copy to: Rosen & Tetelman LLP
501 Fifth Avenue, Suite 1404
New York, New York 10017
Attn.: Ted D. Rosen, Esq.
Facsimile: (212) 972-3555
Either party may change the address, fax number, or persons to
whom notices or copies thereof are to be given, by written notice to the other
given in accordance with this paragraph.
Section 11.05. Entire Agreement. This Agreement, the attached
Schedules and Exhibits hereto, the other Transaction Documents and any other
documents to be executed pursuant hereto contain the entire agreement between
the parties relating to the sale and purchase of the Purchased Assets. Any oral
representations or modifications concerning this Agreement or any such other
document shall be of no force and effect excepting a subsequent modification in
writing, signed by the party to be charged.
Section 11.06. Modification. This Agreement may be modified,
amended or supplemented only by a written instrument duly executed by all the
parties hereto.
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Section 11.07. Closing Date. All actions to be taken on the
Closing Date pursuant to this Agreement shall be deemed to have occurred
simultaneously, and no act, document or transaction shall be deemed to have been
taken, delivered or effected until all such actions, documents and transactions
have been taken, delivered or effected.
Section 11.08. Severability. Should any term, provision or
paragraph of this Agreement be determined to be illegal or void or of no force
and effect, the balance of the Agreement shall survive.
Section 11.09. Captions. All captions and headings contained
in this Agreement are for convenience of reference only and shall not be
construed to limit or extend the terms or conditions of this Agreement.
Section 11.10. Waiver. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
Section 11.11. Assignments. This Agreement shall not be
assigned by any party hereto without the prior written consent of the other
parties hereto; provided that Buyer may assign this Agreement to a newly formed
entity that is controlled by or under common control with Buyer so long as such
entity is itself Financially Qualified.
Section 11.12. Binding Effect. This Agreement shall bind and
inure to the benefit of the respective heirs, personal representatives,
successors, and assigns of the parties hereto.
Section 11.13. Applicable Law. This Agreement shall be
governed by and construed in accordance with the substantive laws of the State
of New York without regard to principles of conflicts of law.
Section 11.14. Construction. In the interpretation and
construction of this Agreement, the parties acknowledge that the terms hereof
reflect extensive negotiations between the parties and that this Agreement shall
not be deemed, for the purpose of construction and interpretation, drafted by
either party hereto.
Section 11.15. Counterparts. This Agreement may be signed in
counterparts. The parties further agree that this Agreement may be executed by
the exchange of facsimile signature pages.
Section 11.16. Bankruptcy Court Jurisdiction. BUYER AND SELLER
AGREE THAT THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL
DISPUTES AND OTHER MATTERS RELATING TO (i) THE INTERPRETATION AND ENFORCEMENT OF
THIS AGREEMENT, THE TRANSACTION DOCUMENTS AND ANY ANCILLARY DOCUMENTS EXECUTED
PURSUANT HERETO; AND/OR (ii) THE
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PURCHASED ASSETS AND BUYER EXPRESSLY CONSENTS TO AND AGREES NOT TO CONTEST SUCH
EXCLUSIVE JURISDICTION.
Section 11.17. Transfer Taxes. All transfer, sales and use,
registration, documentary, stamp and other such Taxes incurred in connection
with this Agreement and the transactions contemplated hereby (collectively
"Transfer Taxes") shall, unless the Sale Order provides that the Transfer Taxes
are inapplicable to the sale transaction contemplated hereby by reason of the
application of Section 1146(c) of the Bankruptcy Code, be paid or escrowed by
Seller on the Closing Date. Buyer shall properly file, with the cooperation of
Seller, on a timely basis all necessary tax returns, reports, forms, and other
documentation with respect to any Transfer Taxes.
Section 11.18. Public Announcements. The parties agree that,
after the signing of this Agreement, neither party shall make any press release
or public announcement concerning this transaction without the prior written
approval of the other party unless a press release or public announcement is
required by Law or order of the Bankruptcy Court or otherwise in connection with
the administration of the Bankruptcy Case. If any such announcement or other
disclosure is required by law or order of the Bankruptcy Court or otherwise in
connection with the Bankruptcy Case, the disclosing party agrees to give the
nondisclosing party prior notice of, and an opportunity to comment on, the
proposed disclosure. The parties acknowledge that the Seller shall file this
Agreement with the Bankruptcy Court.
Section 11.19. Good Faith. All parties hereto agree to use
reasonable efforts to do all acts and execute all documents required to carry
out the terms of, and transactions contemplated by, this Agreement and to act in
good faith with respect to the terms and conditions contained herein.
Section 11.20. Use of Unitel Name. The Buyer agrees that, for
one hundred eighty (180) days after the Closing Date, the Seller shall be
permitted to continue to use the name "Unitel," "Unitel 53," "Unitel 57," any
derivations of any of the foregoing, and any domain names, solely in connection
with the administration and processing of the Bankruptcy Case, Seller's status
as a public company and its obligations in connection therewith, and the
wind-down of the Seller's estate.
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IN WITNESS WHEREOF, the parties hereto have executed this
Asset Purchase Agreement as of the day and year first above written.
ALL MOBILE VIDEO INC.
By: /s/ Anton Duke
---------------------------------------
Name: Anton Duke
Its: Chief Executive Officer
UNITEL VIDEO, INC.
Debtor and Debtor-in-Possession
By: /s/ Joel Getzler
---------------------------------------
Name: Joel Getzler, Getzler & Co., Inc.
Its: Management Consultant
UNITEL 57 LLC
Debtor and Debtor-in-Possession
By: /s/ Joel Getzler
---------------------------------------
Name: Joel Getzler, Getzler & Co., Inc.
Its: Management Consultant
UNITEL 53 LLC
Debtor and Debtor-in-Possession
By: /s/ Joel Getzler
---------------------------------------
Name: Joel Getzler, Getzler & Co., Inc.
Its: Management Consultant
Escrow Agent agrees to hold, deliver
and disburse the Deposit in accordance with
the provisions of Schedule 2.2(b).2 hereto:
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP
By: /s/ Kaye, Scholer, Fierman, Hays & Handler, LLP
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