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Asset Put & Reg. Rights Agreement Dated Oct. 15, 1996

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EXHIBIT 10.52
-------------


ASSET PUT AND
REGISTRATION RIGHTS AGREEMENT


This Asset Put and Registration Rights Agreement (this "Agreement") is
--------- entered into as of this 15th day of October, 1996 by and among Reading Entertainment, Inc., a Delaware corporation ("Reading Entertainment"), Citadel
--------------------- Holding Corporation, a Delaware corporation ("Citadel"), and Citadel Acquisition
------- Corp., Inc., a Delaware corporation ("CAC"), with reference to the following:
---


A. The parties to this Agreement are also parties to an Exchange Agreement dated as of August --, 1996 (the "Exchange Agreement") pursuant to which CAC is
------------------ purchasing 70,000 shares (the "Preferred Shares") of Reading Entertainment's
---------------- Series A Voting Cumulative Convertible Preferred Stock, stated value $100 per share (the "Series A Preferred Stock"), for an aggregate cash purchase price of
------------------------ $7,000,000.


B. As conditions to CAC's purchase of the Preferred Shares, Reading Entertainment has agreed that (i) Citadel shall have an option to exchange all or substantially all of its assets (other than Excluded Assets as defined below) for shares (the "Exchange Shares") of Reading Entertainment's Common Stock,
--------------- $0.001 par value (the "Common Stock"), and (ii) Reading Entertainment will under
------------ certain circumstances register under the Securities Act of 1933, as amended (the "Act"), the Exchange Shares and any shares of Common Stock, received upon --- conversion of the Preferred Shares (the "Conversion Shares"), all in accordance
----------------- with and subject to the terms of this Agreement.


NOW, THEREFORE, in consideration of the foregoing and the agreements set forth herein, the parties hereto agree as follows:


ARTICLE ONE


ASSET PUT
1.1 Asset Put.
---------
(a) Commencing on the date hereof, Citadel shall have the right, by giving written notice to Reading Entertainment prior to 11:59 p.m. on the thirtieth (30th) day following the date on which Reading Entertainment files its Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (the "Exchange Notice"), to exchange (the "Asset Put") all or substantially all of --------------- its assets (other than the Excluded Assets as defined below), together with any debt encumbering or related to such assets, including without limitation, mortgages and leases (collectively, the "Citadel Assets"), for such number of
-------------- shares of Common Stock as are determined with reference to the Citadel Asset Valuation and the Common Stock Value, as described below. The term "Excluded
-------- Assets" shall mean (i) all Preferred Shares and Conversion Shares (or all shares - ------ of capital stock of CAC, if the sole assets of CAC are Excluded Assets), (ii) such cash and/or marketable securities as a special committee comprised of the independent directors of the Board of Directors of Citadel may reasonably determine are necessary in order to maintain an appropriate level of liquidity for Citadel and its subsidiaries, (iii) any assets that, in the reasonable opinion of the Board of Directors of Reading Entertainment, are subject to liabilities (including, without limitation, contingent or environmental liabilities) reasonably likely to be in excess of the fair market value of such assets, (iv) After Acquired Assets (as defined below) to the extent the After Acquired Assets Value (as defined in Section 1.2) exceeds $5,000,000 and (v) assets to the extent the Citadel Asset Valuation (as defined in Section 1.2) exceeds $30,000,000. "After Acquired Assets" shall mean any assets other than
--------------------- cash and assets owned by Citadel or its subsidiaries on the date hereof and cash proceeds of the sale thereof. If any assets are excluded by reason of clause (iv) or (v), Reading Entertainment shall determine


in good faith which assets shall be Excluded Assets on such basis. Subject to Section 1.1(e), the Asset Put shall be consummated (the "Closing") on the tenth business day following the Determination Date (as defined below), or such later date as the parties may agree, at the executive offices of Citadel at 10:00 a.m. local time (the "Closing Date"). At the Closing, Citadel shall deliver such
------------ stock powers, assignments, bills of sale, deeds, consents, cash by wire transfer and other instruments of transfer and conveyance as shall be necessary, within the reasonable requirements of Reading Entertainment, to transfer the Citadel Assets to Reading Entertainment and, subject to Section 1.1(c), Reading Entertainment shall deliver to Citadel the Exchange Shares, together with such assumption agreements, acknowledgments and other documents as shall be necessary, within the reasonable requirements of Citadel, to transfer and assign the Citadel Assets to Reading Entertainment and for Reading Entertainment to assume any and all debt encumbering the Citadel Assets.


(b) Subject to Sections 1.1(c) and 1.3, the aggregate number of Exchange Shares to be delivered to Citadel at the Closing shall be determined by dividing the Citadel Asset Valuation by the Common Stock Value, rounded to the nearest whole number of shares.


(c) In the event the issuance to Citadel, upon Citadel's exercise of the Asset Put, of the number of shares of Common Stock determined pursuant to Section 1.1(b) would result in an "owner shift" (as defined in Section 382 of the Internal Revenue Code, as amended (the "Code")) of Reading Entertainment
---- which, when added to all other "owner shifts" that have occurred during the "testing period," would result in aggregate "owner shifts" that count against the 50 percentage point limit (under Section 382(g) of the Code) in excess of 45 percentage points (the "Owner Shift Threshold"), Reading Entertainment shall
--------------------- issue to Citadel the maximum number of shares of Common Stock which would not result in the crossing of such Owner Shift Threshold. Reading Entertainment may elect not to issue the shares of Common Stock (the "Excess Shares") which would
------------- exceed the number of shares determined by the preceding sentence. In such case, Reading Entertainment shall either: (i) issue to Citadel debt securities (the
"Debt Securities") in an aggregate principal amount equal to the number of --------------- Excess Shares multiplied by the average of the closing sales prices of Common Stock on the Nasdaq National Market (or, if that shall not be the principal market on which the Common Stock shall be trading or quoted, then on such principal market)(the "Closing Price") for the thirty (30) consecutive trading
------------- days in which trading of the Common Stock occurs immediately preceding the Closing Date (the "Excess Share Value") or (ii) pay to Citadel cash, in
------------------ immediately available funds, in an amount equal to the Excess Shares Value (the "Cash Portion"). The economic terms of the Debt Securities, if any, shall be determined by an investment banking firm which shall be independent of Citadel and Reading (the "Independent Investment Banker"), and which shall be chosen by
----------------------------- Reading Entertainment, subject to Citadel's consent (not to be unreasonably withheld). All fees and expenses of, and any other charges incurred by the Independent Investment Banker shall be borne by Reading Entertainment. The form and terms of the Debt Securities shall be as otherwise agreed by Reading Entertainment and Citadel in good faith.


(d) As promptly as practicable after receipt of the Exchange Notice, Reading Entertainment shall notify Citadel whether Reading Entertainment anticipates issuing to Citadel any Debt Securities and, if so, the aggregate principal amount of Debt Securities Reading Entertainment estimates it will issue (provided, that an inaccuracy in such estimate shall not limit Reading Entertainment's right to issue the full amount of Debt Securities permitted to be issued pursuant to Section 1.1(c)). If, within ninety (90) days from the date of such notice, Citadel notifies Reading Entertainment of Citadel's bona fide intention to sell all, but not less than all, the Debt Securities, if requested by Citadel in such notice, Reading Entertainment shall take all reasonable actions to assist Citadel in the sale of all or any portion of the Debt Securities to a third party or parties and shall, upon consummation of such sale: (i) reimburse Citadel for all out-of-pocket expenses incurred by Citadel in connection with the issuance of the Debt Securities and the negotiation and consummation of such sale, including, without limitation, reasonable fees and expenses of legal counsel, accountants, financial advisors, brokers and investment bankers and


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(ii) pay to Citadel in cash by wire transfer in immediately available funds, the amount by which the net proceeds received by Citadel (without duplication of amounts reimbursed under clause (i) above) from the sale of the Debt Securities is less than the Excess Shares Value.


(e) In the event Citadel's legal counsel advises Citadel that the exercise of the Asset Put and consummation of the transactions contemplated thereby will require the approval of Citadel's stockholders:


(i) Within thirty (30) calendar days of the date of the Exchange
Notice, Citadel shall prepare and file with the Securities and Exchange
Commission (the "SEC") a proxy statement and related proxy material meeting
---
the requirements of Regulation 14A of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to be mailed to stockholders in connection
------------
with a meeting of the Citadel stockholders (the "Proxy Statement") or as
---------------
soon as practicable thereafter, and use its commercially reasonable efforts
to clear such materials with the SEC and mail such materials to the Citadel
stockholders within sixty (60) calendar days of originally filing such
materials with the SEC, or as soon as practicable thereafter. In such event,
Citadel covenants that the Proxy Statement at the time of mailing to the
Citadel stockholders and at the time of the meeting of stockholders held to
approve the consummation of the Asset Put (the "Meeting") will not contain
-------
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading (other than
statements or omissions therein supplied by Reading Entertainment in writing
for use therein) and the Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act.


(ii) Reading Entertainment shall furnish in writing for inclusion in
the Proxy Statement such information as may be reasonably necessary to
comply with the provisions of the Exchange Act and the rules and regulations
thereunder and shall have been requested in writing by Citadel.


(iii) As an additional condition to Citadel's obligation to
consummate the Asset Put, Citadel may elect to receive at Citadel's expense,
on or prior to the mailing date of the Proxy Statement, an opinion,
reasonably satisfactory to Citadel, from a financial advisor selected by
Citadel that the consummation of the Asset Put is fair from a financial
point of view to Citadel and such opinion shall not have been withdrawn or
modified in a manner which is not reasonably satisfactory to Citadel.


(iv) Reading Entertainment and Craig Corporation, a Delaware
corporation ("Craig"), agree that any Citadel voting securities which it, or
-----
any of their respective subsidiaries or affiliates, may hold on the record
date of any such meeting will be voted to approve the exercise and Closing
of the Asset Put.


(v) The Closing shall take place on or before the fifth business day
next following the Meeting. If, at any time prior to the Closing Date, it
shall be necessary to amend or supplement the Proxy Statement to correct any
statement or omission with respect to Citadel, CAC or Reading Entertainment
in order to comply with any applicable legal requirements, the appropriate
party shall supply in writing the necessary information to Citadel and
Citadel shall amend or supplement the Proxy Statement to the extent
necessary to comply with applicable legal requirements.


(f) The risk of loss or damage by fire or other casualty or cause to the Citadel Assets until the Closing shall be upon Citadel. In the event of loss or damage to a material amount of any


3


Citadel Assets following Citadel's delivery of the Exchange Notice and prior to the Closing, Citadel shall promptly notify Reading Entertainment in writing of such event describing with such particularity as is possible the extent of such loss or damage and the extent to which such loss or damage may be covered by any insurance policy of Citadel. Within ten (10) days after receipt of written notice from Citadel of such loss or damage, Reading Entertainment shall, at its option, either (i) have Citadel assign to Reading Entertainment at the Closing all insurance proceeds to which Citadel would be entitled as a result of such loss or damage or (ii) exclude such assets from the Citadel Assets; provided that Reading Entertainment shall have no right to exclude such assets under this Section 1.1(f) if Citadel promptly repairs the damaged asset substantially to its previous condition. If any assets are substituted or excluded pursuant to this Section 1.1(f), the Citadel Asset Valuation shall be adjusted accordingly.


1.2 Citadel Asset Valuation.
-----------------------


(a) (i) The Exchange Notice shall set forth the name and address
of a qualified Member of Appraisal Institute ("MAI") real estate appraiser
to appraise the value of real estate assets which are part of the Citadel
Assets (the "Real Estate Assets") and a qualified appraiser to appraise the
------------------
value of the non-real estate assets, if any, which are part of the Citadel
Assets (the "Non-Real Estate Assets"), each appraiser chosen by Citadel
----------------------
(the "Citadel Appraisers") (such aggregate value being referred to as the
------------------
"Citadel Asset Valuation"). Within fifteen (15) business days of the date
-----------------------
of the Exchange Notice, Reading Entertainment shall give Citadel notice of
the names and addresses of a qualified MAI real estate appraiser to
appraise the value of the Real Estate Assets and a qualified appraiser to
appraise the value of the Non-Real Estate Assets, each chosen by Reading
Entertainment (the "Reading Entertainment Appraisers"). Each of the Citadel
--------------------------------
Appraisers and Reading Entertainment Appraisers (collectively, the
"Appraisers") shall value the Citadel Assets to be appraised by them as of
----------
the date the last of the Appraisers is retained (the "Valuation Date"). The
--------------
Appraisers shall be requested to separately appraise any After Acquired
Assets. The Appraisers, in appraising any Citadel Assets, shall take into
account any liabilities (including, without limitation, contingent or
environmental liabilities) relating to or encumbering such Citadel Assets
and the "value" thereof shall be determined net of any such liabilities
which will encumber the Citadel Assets following the Closing. Any mortgage
debt relating to any asset shall be deemed to be a liability equal to its
outstanding principal amount as of the Valuation Date, which amount shall
be deducted (without duplication) from the value otherwise attributable to
such asset, unless such debt is repaid by Citadel at or prior to the
Closing.


(ii) Within thirty (30) days of the date of the Exchange Notice,
Citadel and Reading Entertainment shall cause the Citadel and the Reading
Entertainment Appraisers, respectively, to deliver to both Reading
Entertainment and Citadel their respective appraisal reports setting forth
the value of the Citadel Assets appraised by them. Thereafter, Reading
Entertainment and Citadel agree to use their best efforts to agree on the
Citadel Asset Valuation and the value of the After Acquired Assets (such
value of the After Acquired Assets being the "After Acquired Asset
Valuation;" the excess of the Citadel Asset Valuation over the After
-----
Acquired Asset Valuation is hereinafter referred to as the "Existing Asset
------------------------ --------------
Valuation"). If an agreement on both valuations can be reached within five
---------
(5) business days of the latest to be delivered of the Appraisers' reports,
those valuations shall be the Citadel Asset Valuation and After Acquired
Asset Valuation. If no agreement on either or both such matters can be
reached within such five (5) business day period, the parties shall select
and jointly engage, a third set of appraisers (the "Third Appraisers") who
----------------
shall be directed, as promptly as practicable, to value the Citadel Assets
as of the Valuation Date and shall affirm the valuation of either the
Reading Entertainment Appraisers or the Citadel Appraisers. Such
determination by the Third Appraisers shall be binding upon Citadel and
Reading Entertainment and the valuations affirmed by the Third Appraisers
shall be the Citadel Asset Valuation and After Acquired Asset Valuation.
The date when the Citadel Asset


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Valuation and After Acquired Asset Valuation are determined as provided
above shall be the "Determination Date."
------------------


(iii) If required by either Citadel or Reading Entertainment, the
parties shall request the Appraisers to update their procedures, as set
forth above, to a date not later than forty-five (45) days prior to the
anticipated Closing Date, which date shall thereupon become the Valuation
Date. Upon delivery of such reports, Citadel and Reading Entertainment
shall, to the extent necessary as a result of any difference in such
reports from the original reports of the Appraisers, repeat the procedures
set forth in Section 1.2(a)(ii), and the dates and valuations, determined
by such repeated procedures, shall be substituted for the dates and
valuations as originally determined.


(iv) With respect to the liabilities encumbering or relating to the
Citadel Assets which require the consent of the other party for the
assignment of such liabilities to Reading Entertainment, at or prior to the
Closing, Citadel and Reading Entertainment shall cooperate with each other
to obtain any such consent. In the event any such consent cannot be
obtained, Reading Entertainment shall, at its own expense, refinance any or
all of such debt to permit the transfer of such assets to Reading
Entertainment.


(v) Citadel shall be entitled to all income earned or accrued and
shall be responsible for all liabilities and obligations incurred or
payable in connection with the Citadel Assets through the close of business
on the Closing Date and Reading Entertainment shall be entitled to all
income earned or accrued and shall be responsible for all assumed
liabilities incurred or payable in connection with the Citadel Assets after
the close of business on the Closing Date. At the Closing, all assumed
liabilities, accrued but unpaid expenses (including accrued interest) and
prepaid expenses relating to the Citadel Assets shall be apportioned
between Reading Entertainment and Citadel in accordance with generally
accepted accounting principles ("GAAP") as of the close of business on the
----
Closing Date and the Citadel Asset Valuation shall be adjusted accordingly.
The Citadel Asset Valuation shall also be adjusted for changes in the
principal amount of any indebtedness to be assumed by Reading Entertainment
between the Valuation Date and the Closing Date; provided however, that in
the event Reading Entertainment refinances any such debt at the Closing,
the Citadel Asset Valuation shall be determined immediately prior to the
repayment or refinance of such debt. At or prior to the Closing, the
parties will prepare a preliminary closing statement which shall set forth
the final Citadel Asset Valuation and specify on a preliminary basis all
adjustments to the Citadel Asset Valuation between the Valuation Date and
the Closing Date. Promptly following the Closing, the parties will finalize
such closing statement, making such adjustments as may be appropriate.


(b) If the parties are unable to agree upon the Third Appraisers within the time periods set forth above, either Reading Entertainment or Citadel, by giving seven (7) days written notice to the other, may apply to the American Arbitration Association for the purpose of selecting the Third Appraisers and the parties agree that the decision of the American Arbitration Association selecting the Third Appraisers shall be final and binding.


(c) Citadel and Reading Entertainment shall each be responsible for the fees and expenses of its own Appraisers. The fees and expenses of the Third Appraisers, if required, shall be paid by the party whose valuation is rejected and not affirmed by the Third Appraisers.


(d) The Citadel Assets shall be valued at their fair market value as the assets are then constituted, assuming a willi
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