MIDWAY HOME ENTERTAINMENT
INC.,
MIDWAY STUDIOS-LOS ANGELES INC.
and
MIDWAY GAMES INC.
Dated as of August 3,
2009
THIS ASSET
PURCHASE AGREEMENT (this “ Agreement ”),
dated as of this 3 rd day of August 2009, by and among THQ INC.,
a Delaware corporation (“ Purchaser ” )
, MIDWAY HOME ENTERTAINMENT INC., a Delaware corporation
(the “ Studio ” ) , MIDWAY
STUDIOS-LOS ANGELES INC., a California corporation (“Midway
L.A.”), and MIDWAY GAMES INC., a Delaware corporation (
“ Parent, ” and together with the Studio
and Midway L.A., each a “ Seller ” and
together “ Sellers ” )
.
WHEREAS, the
Studio is a wholly owned subsidiary of Parent that was engaged in
the business of designing and developing the TNA iMPACT!
wrestling video games at a studio located at 10636 Scripps Summit
Court, San Diego, California, USA 92131 (such design and
development business conducted by the Studio at such San Diego
studio the “ Business ” )
;
WHEREAS, on
February 11, 2009, Parent and its U.S. subsidiaries, including
the Studio, filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (as hereinafter defined)
with the United States Bankruptcy Court for the District of
Delaware (the “ Bankruptcy Court ” )
, and such Chapter 11 cases (the “
Bankruptcy Proceedings ” ) are being jointly
administered for procedural purposes under Case
No. 09-10465-KG;
WHEREAS, Purchaser
desires to purchase from Sellers, and Sellers desire to sell to
Purchaser, substantially all of the assets (but excluding the
Excluded Assets (as defined below)) used in connection with and
arising out of the operation of the Business, at the price and on
and subject to the other terms and conditions specified in this
Agreement and pursuant to Sections 363 and 365 of the
Bankruptcy Code, and free and clear of all Encumbrances in
accordance with the Sale Order; and
WHEREAS, the
parties hereto intend this Agreement to set forth the terms and
conditions governing the sale, purchase, assignment and assumption
of the Purchased Assets by Sellers to Purchaser;
NOW, THEREFORE, in
consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements herein
contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and
intending to be bound legally, the parties hereto agree as
follows:
ARTICLE 1.
DEFINITIONS; INTERPRETATION AND RULES OF
CONSTRUCTION
1.1
Definitions . The following terms shall have the meaning
specified below.
(a)
“ Adverse Claim ” shall have the meaning
ascribed in Section 7.6.
(b)
“ Agreement ” shall have the meaning
ascribed in the Preamble.
(c)
“ Allocation Schedule ” shall have the
meaning ascribed in Section 5.2.
(d)
“ Ancillary Agreements ” means each other
agreement, document or instrument contemplated hereby, including
but not limited to the Bill of Sale.
(e)
“ Assignment and Assumption Agreement ”
shall have the meaning ascribed in Section 6.2(c).
(f)
“ Assumed Contracts ” shall have the
meaning ascribed in Section 2.1(e).
(g)
“ Assumed Liabilities ” shall have the
meaning ascribed to it in Article 3.
(h)
“ Bankruptcy Code ” means title 11 of the
United States Code, 11 U.S.C. § 101 et seq., as may be amended
from time to time.
(i)
“ Bankruptcy Court ” shall have the
meaning ascribed in the Recitals.
(j)
“ Bankruptcy Proceedings ” shall have the
meaning ascribed in the Recitals.
(k)
“ Bill of Sale ” shall have the meaning
ascribed in Section 6.2(b).
(1)
“ Business ” shall have the meaning
ascribed in the Recitals.
(m)
“ Business Day ” means a day other than a
Saturday, Sunday or other day on which commercial banking
institutions in Los Angeles, California are authorized or required
by applicable Law to close.
(n)
“ Closing ” shall have the meaning
ascribed in Section 6.1.
(o)
“ Closing Date ” shall have the meaning
ascribed in Section 6.1.
(p)
“ Committee ” means the Official
Committee of Unsecured Creditors duly appointed in the Bankruptcy
Proceedings and such committee’s advisors.
(q)
“ Confidential Information ” shall have
the meaning ascribed in Section 9.1 (b).
(r)
“ Consent ” means any consent, approval,
authorization, waiver or notification of, by or to the Bankruptcy
Court, a Governmental Authority or any other Person.
(s)
“ Contracts ” means contracts, licenses,
agreements, commitments, promises, orders and other obligations and
understandings, oral and written, express and implied, to which any
Seller is a party.
(t)
“ Cure Amounts ” means any and all fees,
costs, charges, amounts and other obligations (including, without
limitation, advances, initial fees, up-front fees, or similar and
additional fees) required to be paid or otherwise performed under
any Assumed Contract in order to cure in full any and all breaches
and defaults thereunder by any Seller existing immediately prior to
the Closing, all as determined by the Bankruptcy Court.
(u)
“ Encumbrances ” means any liens, claims,
interests, and other encumbrances within the meaning of section
363(f) of the Bankruptcy Code.
(v) “
Excluded Assets ” shall have the meaning
ascribed in Section 2.2.
(w)
“ Governmental Authority ” means any
government or political subdivision or regulatory authority,
whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision or
regulatory authority, or any federal state, local or foreign court
or arbitrator, including, without limitation, the Bankruptcy
Court.
(x)
“ Hired Employees ” shall have the
meaning ascribed in Section 10.1.
(y)
“ Infringement Claims ” shall have the
meaning ascribed in Section 2.1(h).
(z)
“ Intellectual Property ” means any and
all intellectual property and industrial property (throughout the
universe, in all media, now existing or created in the future, and
for the entire duration of
2
such) arising
under statutory or common law, contract, or otherwise, and whether
or not perfected, including, without limitation, all:
(a) inventions, discoveries, designs, processes, methods,
developments, and Software; (b) patents, reissues and
reexamined patents, and patent applications, whenever filed and
wherever issued; (c) works of authorship, Web sites,
copyrights, copyright registrations, and copyright applications;
(d) trade secrets and confidential information; (e) Internet
domain names, trademarks, service marks, trade dress, trade names,
slogans, logos, symbols, trademark registrations, and trademark
applications; (f) any and all other intangible property;
(g) divisions, continuations, continuations-in-part,
substitutes, renewals, reissues and extensions of the foregoing (as
and to the extent applicable) now existing, hereafter filed,
issued, or acquired; and (h) goodwill associated with or
symbolized by any of the foregoing.
(aa)
“ Intellectual Property Rights ” means
any and all rights in, to, and under Intellectual Property,
including, without limitation, any and all rights (throughout the
universe, in all media, now existing or created in the future, and
for the entire duration of such rights) arising under statutory or
common law, contract, or otherwise, and whether or not perfected,
including, without limitation, all: (a) rights to use, have
used, make, manufacture, sell, offer to sell, import, export, and
have such done inventions, discoveries, designs, processes,
methods, developments; (b) rights associated with patents, reissues
and reexamined patents, and patent applications, whenever filed and
wherever issued, and all priority rights resulting from such
applications; (c) rights associated with works of authorship,
including, but not limited to, rights in copyrights, moral rights,
and rights to reproduce, distribute, perform, display, and prepare
derivative works; (d) rights relating to the protection of trade
secrets and confidential information; (e) rights in trademark
applications and registrations, trademarks, service marks, trade
names, Internet domain names, logos, symbols, and the like;
(f) rights analogous to those set forth in this definition and
any and all other proprietary rights relating to intangible
property; (g) rights in divisions, continuations,
continuations-in-part, substitutes, renewals, reissues and
extensions of the foregoing (as and to the extent applicable) now
existing, hereafter filed, issued, or acquired; and (h) rights
to sue for past, present, and future infringement of any and all
such intellectual property rights and industrial property
rights.
(bb)
“ Knowledge of Sellers ” means the
actual, current knowledge of Matthew Booty, Miguel Iribarren, Ryan
O’Desky, Deborah Fulton, Steve Marrin and Scot
Lane.
(cc)
“ Law ” means any law, statute, code,
ordinance, rule regulation, ruling, interpretation or other
requirement of any Governmental Authority.
(dd)
“ Midway L.A. ” shall have the meaning
ascribed in the Preamble
(ee)
“ Order ” means any order, judgment,
injunction, award, decree, ruling, charge or writ of any
Governmental Authority, including, without limitation, the
Bankruptcy Court.
(ff)
“ Parent ” shall have the meaning
ascribed in the Preamble.
(gg)
“ Person ” means an individual, sole
proprietorship, partnership, corporation, limited liability
company, association, trust, unincorporated organization, joint
venture, Governmental Authority or other legal entity.
(hh)
“ Purchase Price ” shall have the meaning
ascribed in Section 5.1.
(ii)
“ Purchased Assets ” shall have the
meaning ascribed in Section 2.1.
(jj)
“ Purchaser ” shall have the meaning
ascribed in the Preamble.
(kk)
“ Sale Motion ” shall have the meaning
ascribed in Section 9.5.
3
(ll)
“Sale Order” means an Order entered by
the Bankruptcy Court authorizing and approving the transactions
contemplated by this Agreement in form and substance reasonably
satisfactory to Purchaser, and substantially in the form of
Exhibit 1.1(II) attached hereto.
(mm)
“Seller” shall have the meaning ascribed
in the Preamble and shall, include Parent, the Studio or Midway
L.A., as applicable, as debtor and debtor-in-possession, so as to
provide to Purchaser the fullest protection under this Agreement
and the transactions contemplated hereby as the Law
allows.
(nn)
“Sensitive Information” shall have the
meaning ascribed in Section 9.1 (a).
(oo)
“Studio” shall have the meaning ascribed
in the Preamble.
(pp)
“Tangible Property” shall have the
meaning ascribed in Section 2.1 (a).
(qq)
“Tax Returns” means, collectively, all
returns, reports and similar statements (including elections,
declarations, disclosures, schedules, estimates and information
returns) required to be supplied to any Governmental Authority
relating to Taxes.
(rr)
“Taxes” means any taxes, charges, fees or
other assessments imposed by any Governmental Authority, including
all Federal, state, local, foreign and other income, gross
receipts, franchise, capital stock, withholding, payroll, social
security, unemployment, disability, real property, personal
property, sales, use, ad valorem, excise, transfer, profits,
license, customs, estimated, severance, stamp, occupation, value
added and corporation and any other taxes, including any interest,
penalties or additions on or to the foregoing.
(ss)
“Warner Bros.” shall have the meaning
ascribed in Section 12.2.
(tt)
“ Warner Bros. APA” means the Asset
Purchase Agreement dated as of May 20, 2009, between Warner
Bros. and, inter alia, Parent.
1.2
Interpretation and Rules of Construction . In this
Agreement, except to the extent that the context otherwise
requires:
(a) References
to an “Article,” “Section,”
“Exhibit” or “Schedule” in this Agreement
refer to an Article or Section of, or an Exhibit or Schedule to,
this Agreement unless otherwise stated. The Exhibits and Schedules
attached hereto or referred to herein are incorporated herein and
made a part hereof for all purposes. As used herein, the term
“this Agreement” includes such Exhibits and
Schedules;
(b) The
captions, headings and arrangements used in this Agreement are for
convenience only and do not in any way affect, limit or amplify the
provisions hereof;
(c) Whenever
the words “include,” “includes” or
“including” are used in this Agreement, they are deemed
to be followed, whether or not expressly so stated, by the words
“without limitation”;
(d) As used
in this Agreement, the words “herein,”
“hereby,” “hereof,” and
“hereunder’’ and other words of similar import
refer to this Agreement as a whole and not to any particular
Article, Section or other portion of this Agreement;
(e) All terms
defined in this Agreement have the defined meanings when used in
any certificate or other document made or delivered pursuant
hereto, unless otherwise defined in such certificate or other
document;
(f) Whenever
the singular number is used in this Agreement, the same will
include the plural where appropriate, and vice versa;
4
(g) Any Law
defined or referred to herein or in any agreement, instrument or
other document that is referred to herein means such Law as from
time to time amended, otherwise modified or supplemented, including
by succession of comparable successor laws, statutes, rules or
regulations;
(h) References
to a Person are also to such Person’s permitted successors
and assigns; and
(i) The use
of “or” is not intended to be exclusive unless
expressly indicated otherwise.
ARTICLE 2.
PURCHASE AND SALE OF ASSETS
2.1
Assets to be Purchased . On and subject to all the terms and
conditions of this Agreement (including, without limitation,
Section 2.2) and the Sale Order and in reliance upon the
representations and warranties of the parties herein set forth, at
the Closing and effective as of the Closing Date, each Seller
shall, subject to the Sale Order, sell, assign, transfer, convey
and deliver to Purchaser, and Purchaser shall purchase and acquire
from each Seller, pursuant to Sections 363 and 365 of the
Bankruptcy Code, all of such Seller’s right, title and
interest in, to, and under the Purchased Assets, free and clear of
any and all Encumbrances.
For purposes of
this Agreement, the term “Purchased
Assets” shall mean all properties, contracts, rights
and other assets, of every kind and description, of Sellers that
are related to, used in or intended for use in connection with the
Business (other than the Excluded Assets), whether tangible,
intangible, personal or mixed and wherever located, whether carried
on the books of a Seller or not carried on the books of any Seller
due to expense, full depreciation or otherwise, including without
limitation the following assets in each case to the extent now
owned or controlled by any Seller and used or intended for use in
connection with the Business:
(a) All fixed
assets and other tangible personal property and assets (including
without limitation all fixtures, furniture, furnishings, machinery,
equipment, tools, parts, engineering equipment, communications
equipment, accessories, computers and peripheral devices,
motion-capture tools and equipment, office and other equipment and
appliances and any replacement and spare parts for any such assets,
including without limitation those items listed on
Schedule 2.1 (a) (collectively, the
“Tangible Property” );
(b) Any and
all pre-existing tools, software, artwork, music, animation assets,
technology, source code, object code and/or generic
code;
(c) Any and
all digital assets pertaining to game development including all
artwork, animation sets, motion capture data, music, game concepts,
designs and storylines;
(d) All other
Intellectual Property and Intellectual Property Rights;
(e) Except as
otherwise provided below, and subject to the last paragraph of this
Section 2.1, those Contracts described on
Schedule 2.1(e) or otherwise included in the Purchased
Assets pursuant to any other subsection of this Section 2.1
(collectively, the “Assumed Contracts”
);
(f) Any and
all rights to the license granted to Sellers in respect of the
Business pursuant to Section 8.18 of the Warner Bros. APA as
set forth in Section 9.7 hereof;
(g) Those
other assets listed on Schedule 2.1(g) , if any;
and
(h) Any and
all claims against third parties in the nature of infringement
related to the other Purchased Assets (the
“Infringement Claims” ).
5
Notwithstanding
the preceding provisions of this Section 2.1, the
“Purchased Assets” shall not include any software or
other item of intangible property held by any Seller pursuant to a
license or other Contract that does not constitute an Assumed
Contract.
Purchaser shall
have the right, in Purchaser’s sole and absolute discretion
and exercisable at any time prior to the Closing by giving written
notice to Parent and the Committee, to exclude from the Purchased
Assets any one or more properties, contracts, including without
limitation any Contract that would otherwise be an Assumed
Contract, rights or other assets that would otherwise constitute
Purchased Assets, and all of such properties, contracts, rights or
other assets, if any, shall, immediately upon such exclusion by
Purchaser, constitute Excluded Assets.
2.2
Excluded Assets . Notwithstanding anything to the contrary
in this Agreement, the Purchased Assets shall be limited to the
assets identified or described in Section 2.1 and shall in any
event exclude all of the following (collectively, the
“Excluded Assets” ):
(a) All cash,
cash equivalents, bank deposits or similar cash items of any Seller
and all marketable securities and other investments or any
Seller;
(b) Sellers’
rights under this Agreement or, except with respect to any
Purchased Assets, any other agreement, document or instrument
contemplated by this Agreement and all cash and non-cash
consideration payable or deliverable to any Seller by Purchaser
pursuant to the provisions hereof;
(c) Any and
all real property leases;
(d) Any and
all personal property leases, licenses and other Contracts that are
not Assumed Contracts;
(e) All
securities, whether capital stock or debt, of the Studio or any
other entity;
(f) All
rights and claims in or to any refunds, credits, rebates, abatement
or other recovery of or with respect to any Taxes, assessments or
similar charges paid by or on behalf of any Seller, together with
any interest due thereon or penalty rebate arising therefrom, in
each case to the extent applicable to any period prior to the
Closing;
(g) Tax
records, minute books, stock transfer books and corporate seals of
any Seller that any Seller is required by Law to retain;
provided, however, that Sellers shall provide Purchaser with
reasonable access to, and, at Purchaser’s sole cost and
expense, copies of, any Excluded Asset described in this paragraph
(g) which relate to the Purchased Assets;
(h) Subject
to applicable Law, all preference or avoidance claims and actions
of any Seller under Chapter 5 of the Bankruptcy Code, and all
other rights, claims or causes of action of Sellers against third
parties, other than Purchaser, relating to the assets, properties,
business or operations of Sellers arising out of events occurring
on or prior to the Closing Date, other than Infringement
Claims;
(i) All
instruments, accounts receivable and other receivables (including
any unpaid interest accrued on such receivable) and unbilled costs
and fees outstanding or owing between the Sellers and/or their
affiliates, and all claims and causes of action relating or
pertaining to the foregoing;
(j) All
properties, Contracts, rights or other assets expressly excluded
from the Purchased Assets pursuant to the Sale Order, if
any;
(k) Any
insurance policy of any Seller, including any refund or recovery
thereunder;
(l) The
assets of any foreign subsidiary;
6
(m) All of
Sellers’ deposits or prepaid charges and expenses not
specifically included in or arising in connection with the
Purchased Assets;
(n) All
insurance proceeds, and claims and causes of action relating
thereto, of any Seller arising prior to or after the Closing Date
with respect to, or arising in connection with, any Excluded Asset,
or any liability or obligation of Sellers not included in the
Assumed Liabilities, and for the avoidance of doubt, all insured or
insurable claims and causes of action against Sellers (or any of
them) in the nature of commercial tort, breach of fiduciary duty,
fraud, fraudulent conveyance, or breach of loyalty arising prior to
and after the Closing Date shall be Excluded Assets;
(o) All
personnel records and other records that any Seller is required by
Law to retain in its possession;
(p) All
software used for employee, accounting or legal functions and
software related to the Sellers’ publishing business,
including the software that interfaces with customers and
warehouses;
(q) Any
accounts receivable and inventory owned by Sellers and their
affiliates;
(r) The
License Agreement effective as of September 16, 2005 between
TNA Entertainment, LLC and the Studio and property licensed by TNA
in accordance therewith;
(s) All
tangible personal property owned by the Sellers not used or
intended for use in connection with the Business;
(t) All
NBA/NHL/MLB video games, Lord of the Rings video
games, Mechanic Master video games, and with respect to, and
to the extent related to, such video games, all (i) titles,
characters, names and trademarks; (ii) storylines, back
stories, text, dialog, rules, guides, game-specific user
documentation, puzzles and other similar materials;
(iii) concepts, game play, structure, look and feel, art,
settings, locations, environments, vehicles, weapons, gadgets and
other similar elements; (iv) music and sound;
(v) technology, codes (source, object, byte), engines, files
(source, data, log, executable), databases, and other similar
items; (vi) domain names, web site assets, user-generated
content and end-user lists; (vii) development materials;
(viii) development and test kits, development tools or the
like; (ix) marketing materials; (x) Contracts relating to
any such video games; and (xi) any and all intellectual
property rights in and to the foregoing, including all publishing
rights thereof and inventory relating thereto and any rights of any
Sellers under any Excluded Contracts relating to any such video
games;
(u) Any and
all properties, Contracts, rights and other assets designated by
Purchaser as Excluded Assets pursuant to the last sentence of
Section 2.1; and
(v) Those
assets listed on Schedule 2.2(v) .
ARTICLE 3.
ASSUMED LIABILITIES
On the terms and
subject to the conditions set forth in this Agreement and the Sale
Order, at the Closing, Purchaser shall assume, effective as of the
Closing, and shall timely perform and discharge in accordance with
their respective terms, (i) all of Sellers’ liabilities
and obligations arising from and after the Closing Date under the
Assumed Contracts, (ii) the Cure Amounts, if any, and
(iii) the Sellers’ responsibility for paid time off for
the Hired Employees that has accrued as of August 4, 2009,
subject to the usual terms and conditions applicable to paid time
off for employees of Purchaser, as set forth on a schedule being
provided to Purchaser by Sellers concurrently herewith
(collectively, the “ Assumed Liabilities
”) .
7
ARTICLE 4.
EXCLUDED LIABILITIES
Except for the
Assumed Liabilities, Purchaser is not assuming and shall not
assume, and Purchaser shall not in any way be responsible for, any
liabilities or obligations of any Seller or any other liabilities
or obligations whatsoever (whether known or unknown to any Seller)
associated with the Purchased Assets or with any other properties,
rights, contracts or other assets, without limitation, (i) any
and all other liabilities or obligations of any Seller to any Hired
Employee arising as a result of any fact, circumstance or event
occurring prior to August 4, 2009 (including but not limited
to unpaid salary or wages, unpaid expense reimbursement, or for
workers compensation or medical benefits), and (ii) any and
all other liabilities or obligations, whether presently in
existence or arising hereafter, known or unknown, disputed or
undisputed, contingent or non-contingent, liquidated or
unliquidated or otherwise.
ARTICLE 5.
PURCHASE PRICE
5.1
Purchase Price . The aggregate consideration due from
Purchaser hereunder (the “ Purchase Price
”) shall consist of (a) cash in an amount equal to Two
Hundred Thousand Dollars ($200,000), which shall be paid by
Purchaser to the Studio at the Closing on and subject to the terms
and conditions hereinafter set forth, and (b) the aggregate of
the Cure Amounts and the other Assumed Liabilities, if any, which
shall be paid by Purchaser to those parties to the Assumed
Contracts to whom such Assumed Liabilities are owed (i) in the
case of the Cure Amounts, within three (3) days following
Closing or as otherwise provided in the Sale Order, and
(ii) in the case of other Assumed Liabilities as and when such
amounts are due and subject to the terms and conditions set forth
in the Assumed Contracts. As additional consideration, Purchaser
shall make offers of employment to not less than 40 employees of
the Studio as and to the extent provided in Article 10, such
employment to commence as of August 4, 2009, which offers are
intended and anticipated to result in significant cost savings to
the Sellers.
5.2
Purchase Price Allocation . Within a reasonable period of
time after the Closing, Purchaser shall prepare and deliver to
Sellers a schedule (the “ Allocation Schedule
”) allocating the Purchase Price among the various assets
comprising the Purchased Assets in accordance with Treasury
Regulation 1.1060-1 (or any comparable provisions of state or
local Tax Law) or any successor provision, which shall be
reasonably acceptable to the Committee. Purchaser and Sellers shall
report and file al! Tax Returns (including any amended Tax Returns
and claims for refund) consistent with the Allocation Schedule, and
shall take no position contrary thereto or inconsistent therewith
for Tax purposes (including in any audits or examinations by any
taxing authority or any other proceedings) unless required by
judicial determination. The parties agree that the Allocation
Schedule shall not be binding for any purpose other than for Tax
purposes. Notwithstanding any other provisions of this Agreement,
the provisions of this Section 5.2 shall survive the
Closing.
ARTICLE 6.
CLOSING AND DELIVERIES
6.1
Closing . Subject to the satisfaction or waiver (subject to
applicable Law) of the conditions set forth in Article 12, the
closing of the transactions contemplated hereby (the “
Closing ”) shall take place on the third
Business Day after the entry of the Sale Order or on such other
date as may be mutually agreed upon by the parties, but in no event
later than September 4, 2009 (or such later date as is agreed
upon in writing by Purchaser, Sellers and the Committee). The
Closing shall be held at the offices of Sidley Austin LLP, 555 West
Fifth Street, Suite 4000, Los Angeles, California 90013 or at
such other location or in such other manner, including closing by
facsimile or email with originals to follow, as agreed to by the
parties hereto. The date on which the Closing occurs is herein
referred to as the “ Closing
Date.”
6.2
Deliveries by Seller . At the Closing, Sellers shall deliver
to Purchaser the following items:
8
(a) Access to
the Purchased Assets as contemplated by
Section 9.6;
(b) A bill of
sale substantially in the form attached hereto as
Exhibit 6.2(b) (the “ Bill of Sale
”), duly executed by each Seller;
(c) An
assignment and assumption agreement substantially in the form
attached hereto as Exhibit 6.2(c) (the “
Assignment and Assumption Agreement ”), duly
executed by each Seller;
(d) All such
other agreements, instruments and documents in recordable form,
duly executed by Sellers, as are deemed by Purchaser to be
necessary or appropriate to effect the transfer to Purchaser of the
Purchased Assets hereunder, each in form and substance reasonably
satisfactory to Purchaser’s and Sellers’
counsel;
(e) The
compliance certificate described in Section 12.2, duly
executed by authorized representatives of Sellers; and
(f) Any and
all such other agreements, instruments and documents as Purchaser
shall reasonably request to consummate the transactions
contemplated hereby.
6.3
Deliveries by Purchaser . At the Closing, Purchaser shall
deliver to the Sellers (or such other Person as is designated by
Parent or designated below) the following items:
(a) The
Purchase Price, by wire transfer of immediately available funds to
the bank account designated by Parent not less than two Business
Days prior to the Closing;
(b) The Bill
of Sale, duly executed by Purchaser;
(c) The
Assignment and Assumption Agreement, duly executed by
Purchaser;
(d) As
promptly as is reasonably practicable and otherwise in accordance
with the Bankruptcy Court orders, the Cure Amounts to the
counterparties of the Assumed Contracts pursuant to this Agreement
and Section 365 of the Bankruptcy Code;
(e) The
compliance certificate described in Section 12.3, duly
executed by an officer of Purchaser; and
(f) Any and
all such other agreements, instruments and documents as Sellers
shall reasonably request to consummate the transactions
contemplated hereby.
6.4
Sales, Use and Other Taxes . Any sales, purchase, transfer,
stamp, documentary stamp, use, excise, value added, personal
property, export, import, stamp, and withholding or similar Taxes
under the laws of the states in which any portion of the Purchased
Assets are located, any subdivision of any such state or any other
jurisdiction, that may be payable by reason of the sale of the
Purchased Assets under this Agreement or otherwise assessed or
imposed in connection with the transactions contemplated hereby
shall be borne and timely paid by Purchaser.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby
jointly and severally represent and warrant to Purchaser as
follows:
7.1
Organization and Good Standing . Each Seller is an entity
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization.
9
7.2
Authorization of Agreement . Subject to the applicable
provisions of the Bankruptcy Code, the entry of the Sale Order, and
the approval of this Agreement by the Bankruptcy Court:
(a) Each
Seller has the requisite corporate power and authority to execute
and deliver this Agreement and the Ancillary Agreements to which
such Seller is a party and to consummate the transactions
contemplated hereby and thereby; and
(b) This
Agreement has been, and each Ancillary Agreement to which any
Seller is a party as of the Closing will have been, duly and
validly executed and delivered by each Seller and (assuming the due
authorization, execution and delivery by the other parties hereto)
upon entry of the Sale Order this Agreement constitutes and each
Ancillary Agreement to which Sellers are a party will constitute
legal, valid and binding obligations of each Seller enforceable
against such Seller in accordance with such agreement’s
respective terms, subject to general principles of equity,
including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
7.3
Conflicts . To the Knowledge of Sellers, the execution and
delivery by each Seller of this Agreement and the Ancillary
Agreements to which Sellers are a party, and compliance by Sellers
with the provisions hereof and thereof, do not and will not
conflict with, or result in any violation of or default or breach
(with or without notice or lapse of time, or both) under, or give
rise to a right of termination or cancellation under any provision
of (i) the certificate of incorporation and by-laws of any
Seller; or (ii) subject to entry of the Sale Order, any
applicable Order or Law of any Governmental Authority applicable to
such Seller or by which any Seller or any of the Purchased Assets
is subject or bound, other than, in the case of clause (ii), such
conflicts, violations, defaults, breaches, terminations or
cancellations that would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the
Purchased Assets, or on any Seller’s ability to perform its
obligations under this Agreement and the Ancillary Agreements or to
consummate the transactions contemplated hereby or
thereby.
7.4
Consents . To the Knowledge of Sellers, other than entry of
the Sale Order by the Bankruptcy Court, no Consent of any
Governmental Authority is required in connection with the execution
and delivery by Sellers of this Agreement and the Ancillary
Agreements to which Sellers are a party, the performance of
Sellers’ obligations hereunder and thereunder, or the
consummation of the transactions contemplated hereby or thereby by
Sellers.
7.5
Title to Purchased Assets . Sellers own or have a valid and
enforceable leasehold interest or license in or other valid right
to use, the Purchased Assets. Schedule 7.5 identifies
each tangible Purchased Asset listed on Schedule 2.1 (a)
(i) as to which Sellers have a leasehold interest or other
valid right to use, but not ownership, or (ii) as to which any
Seller has, in whole or in part, granted any license or sublicense
of or other right to use, or otherwise granted to any Person any
right, title, or interest in, to, or under such Purchased Asset.
The Purchased Assets include all of the properties, contracts,
rights and other assets owned by the Sellers with respect to the
Business immediately after the “Closing” under the
Warner Bros. APA.
7.6
Adverse Claims . Except as set forth on
Schedule 7.6 , to the Knowledge of Sellers, as of the
date of this Agreement:
(a) There is
no demand, claim, charge, complaint, action, suit, proceeding,
hearing, inquiry or investigation (an “Adverse
Claim” ) by any Person or Governmental Authority
currently pending or overtly threatened against any Seller which
Adverse Claim (i) questions the validity of this Agreement,
the Ancillary Agreements or any of the transactions contemplated
hereby or thereby, (ii) challenges the legality, validity,
enforceability, ownership or performance of any Assumed Contract or
other Purchased Asset, or (iii) alleges that any of the
Intellectual Property included in the Purchased Assets or its
respective past or current uses, has violated, interfered with,
misappropriated, or infringed upon, or is
10
violating,
interfering with, misappropriating or infringing upon, any
Intellectual Property Right or other proprietary right of any
Person; and
(b) No Seller
has made or initiated any Adverse Claim alleging (or is otherwise
aware) that any Person is violating, interfering with,
misappropriating or infringing upon, or has violated or infringed
upon at any time, any Intellectual Property or Intellectual
Property Rights included in the Purchased Assets.
7.7
Assumed Contracts . Sellers have made available to Purchaser
true, correct and complete copies of each material written Assumed
Contract, as amended to date, other than shrink-wrap licenses and
other standard form Contracts which are common in the industry. To
the Knowledge of Sellers, except for the proofs of claim filed in
the Bankruptcy Proceedings, since August 1, 2008, no Seller
has sent or received any notice of default or termination under any
of the Assumed Contracts.
7.8 No
Other Agreements re Disposition . No Seller is a party to, and
no Seller nor any of the Purchased Assets is bound by, any Contract
other than this Agreement with respect to a possible merger, sale,
restructuring, refinancing or other disposition of all or any part
of the Purchased Assets,
7.9 No
Other Representations or Warranties . Except for the
representations and warranties contained in this Agreement, no
Seller nor any other Person makes any other express or implied
representation or warranty (including any implied or expressed
warranty of merchantability or fitness for a particular purpose, or
non-infringement) with respect to Sellers, the Purchased Assets,
the Assumed Liabilities or the transactions contemplated by this
Agreement, and each Seller disclaims any other representations or
warranties, whether made by any Seller, any affiliate of any Seller
or any of their respective officers, directors, employees, agents
or representatives. Except for the representations and warranties
contained herein, each Seller (i) expressly disclaims and
negates any representation or warranty, expressed or implied, at
common law, by statute, or otherwise, relating to the condition of
the Purchased Assets (including any implied or expressed warranty
of merchantability or fitness for a particular purpose, or
non-infringement) and (ii) disclaims all liability and
responsibility for any representation, warranty, projection,
forecast, statement, or information made, communicated, or
furnished (orally or in writing) to Purchaser or its affiliates or
representatives (including any opinion, information, projection, or
advice that may have been or may be provided to Purchaser by any
director, officer, employee, agent, consultant, or representative
of any Seller or any of its affiliates). Sellers make no
representations or warranties to Purchaser regarding the probable
success or profitability of the business or assets being acquired
by Purchaser. The disclosure of any matter or item in any schedule
hereto shall not be deemed to constitute an acknowledgment that any
such matter is required to be disclosed or is material. The
Purchased Assets are being transferred to Purchaser on a
‘“where is” and, as to condition, “ as
is” basis, except as otherwise expressly set forth
herein.
ARTICLE 8.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby
represents and warrants to Sellers as follows:
8.1
Organization and Good Standing . Purchaser is an entity duly
formed, validly existing and in good standing under the laws of
Delaware.
8.2
Authorization of Agreement . Purchaser has the requisite
power and authority to execute and deliver this Agreement and each
Ancillary Agreement to which Purchaser is a party and to perform
Purchaser’s obligations hereunder and thereunder. The
execution and delivery of this Agreement and each other Ancillary
Agreement to which Purchaser is a party and the consummation of the
transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action on the part of
Purchaser. This Agreement and each Ancillary Agreement to which
Purchaser is a party has been duly and validly executed and
delivered by Purchaser and (assuming the due authorization,
execution and
11
delivery by the
other parties hereto, the entry of the Sale Order and receipt of
such other authorization as is required by the Bankruptcy Court)
this Agreement and each other Ancillary Agreement to which
Purchaser is a party constitutes legal, valid and binding
obligations of Purchaser enforceable against Purchaser in
accordance with such agreements’ respective terms, subject to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in
equity).
8.3
Conflicts . To the knowledge of Purchaser, the execution and
delivery by Purchaser of this Agreement and the Ancillary
Agreements to which Purchaser is a party, and compliance by
Purchaser with the provisions hereof and thereof, do not and will
not conflict with, or result in any violation of or default or
breach (with or without notice or lapse of time, or both) under, or
give rise to a right of termination or cancellation under any
provision of (i) the certificate of incorporation and by-laws
of any Seller; (ii) subject to entry of the Sale Order, any
applicable Order or Law of any Governmental Authority applicable to
Purchaser or by which Purchaser or any of its properties or assets
are subject or bound, other than, in the case of clause (ii), such
conflicts, violations, defaults, breaches, terminations or
cancellations that would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the
Purchased Assets or on any Seller’s ability to perform its
obligations under this Agreement and the Ancillary Agreements or to
consummate the transactions contemplated hereby or
thereby.
8.4
Consents . To the knowledge of Purchaser, other than entry
of the Sale Order by the Bankruptcy Court, no Consent of any
Governmental Authority is required in connection with the execution
and delivery by Purchaser of this Agreement and the Ancillary
Agreements to which Purchaser is a party, the performance of
Purchaser’s obligations hereunder and thereunder, or the
consummation of the transactions contemplated hereby or thereby by
Purchaser.
8.5
Sufficient Funds . Purchaser has sufficient funds available
to consummate this transaction.
8.6
Purchaser’s Inspection . Purchaser has inspected the
Purchased Assets, acknowledges the quantity and condition of the
Purchased Assets, and acknowledges that no further inspection or
due diligence is a condition to complete the transactions
contemplated hereby. Purchaser acknowledges that it is purchasing
the Assets on an “as is, where is” basis, with no
representations or warranties of any kind except as specifically
set forth in Article 7. Any claims Purchaser may have for
breach of representation or warranty shall be based solely on the
representations and warranties of Sellers set forth in
Article 7 hereof. Purchaser further represents that neither
Sellers nor any of their affiliates nor any other Person has made
any representation or warranty, express or implied, as to the
accuracy or completeness of any information regarding Sellers, the
Sellers’ Business, the Purchased Assets or the transactions
contemplated by this Agreement not expressly set forth in this
Agreement, and none of the Sellers, any of their affiliates or any
other Person will have or be subject to any liability to Purchaser
or any other Person resulting from the distribution to Purchaser or
its representatives or Purchaser’s use of, any such
information, including any confidential memoranda distributed on
behalf of Sellers relating to the Purchased Assets or other
publications or data room information provided to Purchaser or its
representatives, or any other document or information in any form
provided to Purchaser or its representatives in connection with the
sale of the Purchased Assets and the transactions contemplated
hereby. Purchaser acknowledges that it has conducted to its
satisfaction, its own independent investigation of the Purchased
Assets and, in making the determination to proceed with the
transactions contemplated by this Agreement, Purchaser has relied
on the results of its own independent investigation.
9.1
Access and Information .
12
(a) From and
after the date of this Agreement until the Closing Date, Sellers
shall afford to Purchaser and Purchaser’s accountants,
counsel and other representatives reasonable access, from time to
time during normal business hours and with prior notice throughout
the period from the date hereof until the Closing Date at
Purchaser’s sole expense, to the properties, books,
accounting records and related work papers, contracts, and
commitments, and, to the extent available and permitted by the
Bankruptcy Court upon the request of Parent, personnel and
independent accountants and records, of Sellers to the extent the
same relate to the Purchased Assets and the Business. During such
period, Sellers shall furnish to Purchaser and to Purchaser’s
accountants, counsel and other representatives copies of such
documents and all such other information concerning Sellers as
Purchaser may reasonably request at Purchaser’s sole expense
(such documents and information, together with the properties,
books, accounting records and related work papers, contracts,
commitments, and records of Sellers referenced in the first
sentence of this Section 9.1(a), the “ Sensitive
Information ” ) . Any fees and expenses of
Sellers’ accountants or counsel incurred and any request to
the Bankruptcy Court made pursuant to this Section 9.1
(a) shall be at the sole cost and expense of Purchaser.
Purchaser and its representatives shall cooperate with Sellers and
their representatives and shall use their reasonable efforts to
minimize any disruption to Sellers’ business. Notwithstanding
anything herein to the contrary, no such investigation or
examination shall be permitted to the extent that it would require
Sellers to disclose information subject to attorney- client
privilege or conflict with any confidentiality obligations to which
Sellers are bound. No investigation or inspection pursuant to this
Section 9.1 (a) shall in any way affect or diminish the
respective conditions and obligations of the parties to this
Agreement to consummate the transactions contemplated by this
Agreement.
(b) Except
for the purposes of reviewing, investigating, and considering the
transactions contemplated by this Agreement and the Ancillary
Agreements, as necessary or appropriate to exercise
Purchaser’s rights or perform Purchaser’s obligations
under this Agreement or the Ancillary Agreements, in respect of the
Purchased Assets, or as required by any Order, Law or other legal
requirement, Purchaser shall not use the Confidential Information.
For the purposes hereof, “ Confidential Information
” means Sensitive Information provided by Sellers to
Purchaser in connection with the consideration by Sellers and
Purchaser of the transactions contemplated hereby, but does not
include any data, information or material that (i) was or is
possessed or known by Purchaser prior to receipt or availability
from Sellers in connection herewith, (ii) was or is
independently developed by Purchaser without the benefit of
disclosure or availability of such data, information, or material
by Seller in connection herewith, (iii) was or is published or
available to the general public other than through a breach of this
Agreement by Purchaser, or (iv) was or is obtained by Purchaser
from a third party with, to Purchaser’s knowledge, a valid
right to disclose or make available such data, information or
material.
9.2
Preservation of Assets . Ex
|
