SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 12, 1999
(September 30, 1999)
Rare Medium Group, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-13865 23-2368845
(State or Other (Commission File No.) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
565 Fifth Avenue, 29th Floor, New York, New York 10017
(Address of Principal Executive Offices, including Zip Code)
(212) 883-6940
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
On September 30, 1999 (the "Closing Date"), pursuant to the terms
of that certain Unit Purchase Agreement dated as of the 27th day of
September, 1999, by and among Rare Atomic Pop, LLC, a Delaware limited
liability company ("Rare Atomic"), New Valley Corporation, a Delaware
corporation ("New Valley"), and Ant 21 LLC, a Delaware limited liability
company ("Ant 21"), Rare Medium Group, Inc., a Delaware corporation (the
"Company"), through its wholly-owned subsidiary Rare Atomic, acquired from
Ant 21 1,313,112.27 newly-issued units of membership interest in Ant 21
(the "Units") and an option, exercisable within 120 days from September 27,
1999, to acquire from Ant 21 an additional 656,556.13 units of membership
interest in Ant 21 (the "Option").
Immediately following the Closing Date, the Units represent
33.33% of the total issued and outstanding units of membership interest in
Ant 21. Pursuant to the terms of Ant 21's limited liability company
operating agreement (the "Operating Agreement"), Ant 21 is managed by a
board of directors composed of seven members. As part of the acquisition
of the Units, Rare Atomic has the right to elect three directors for so
long as its ownership percentage is five percent or greater. Additionally,
the provisions of the Operating Agreement give each director elected by
Rare Atomic a veto right on all matters submitted to the board.
Ant 21 is an online record label and digital music destination
with principal offices in Santa Monica, California. The Company intends to
acquire rights to music by licensing catalog from other labels and by
signing bands directly.
In consideration for the Units, Rare Atomic paid $5,000,000 in
cash. In the event Rare Atomic elects to exercise the Option (which may be
exercised in whole but not in part, and only in conjunction with a similar
option held by New Valley), the exercise price is $2,500,000 in cash. The
consideration for the Units and the Option was arrived at through arms-
length negotiation. The source of funds for Rare Atomic's purchase price
for the Units was a capital contribution from the Company from funds on
hand.
In connection with the acquisition of the Units by Rare Atomic,
the Company and Ant 21 agreed to negotiate in good faith towards entering
into a commercially reasonable and customary agreement for the Company to
provide certain technical and consulting services to the Seller.
The foregoing description of the Unit Purchase Agreement
contained in this Form 8-K is a brief summary of the provisions thereof but
does not purport to be complete. This summary is qualified in its entirety
by reference to the Unit Purchase Agreement, a copy of which is attached
hereto as an exhibit and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial statements specified in Item 7(a) of Form 8-K
are not required.
(b) Pro Forma Financial Information.
The pro forma financial information specified in Item 7(b)
of Form 8-K is not required.
(c) Exhibits.
Exhibit No. Description
10. Unit Purchase Agreement dated as of the 27th
day of September, 1999, by and among Rare
Atomic Pop, LLC, a Delaware limited liability
company, New Valley Corporation, a Delaware
corporation, and Ant 21 LLC, a Delaware
limited liability company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereto duly authorized.
RARE MEDIUM GROUP, INC.
(Registrant)
DATE: October 12, 1999 By: /s/ Jeffrey J. Kaplan
Name: Jeffrey J. Kaplan
Title: Executive Vice President and
Chief Financial Officer
UNIT PURCHASE AGREEMENT
by and among
RARE ATOMIC POP, LLC,
NEW VALLEY CORPORATION
and
ANT 21 LLC
September 27, 1999
TABLE OF CONTENTS
Page
ARTICLE 1
SALE OF UNITS . . . . . . . . . . . . . . 1
Section 1.1 Purchase and Sale. . . . . . . . . . . . . . . . . . 1
Section 1.2 Purchase Price. . . . . . . . . . . . . . . . . . . . 1
Section 1.3 Option to Acquire Additional Units of the Company. . 1
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . 2
Section 2.1 Corporate Organization: Requisite Authority to Conduct
Business. . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2 Capitalization and Holdings: Operating Agreement. . . 2
Section 2.3 Authority Relative to and Validity of Agreements. . . 3
Section 2.4 Required Filings and Consents: No Conflict. . . . . . 3
Section 2.5 Financial Statements. . . . . . . . . . . . . . . . . 4
Section 2.6 Absence of Liabilities. . . . . . . . . . . . . . . . 4
Section 2.7 Properties. . . . . . . . . . . . . . . . . . . . . . 4
Section 2.8 Trademarks, Patents and Copyrights. . . . . . . . . . 4
Section 2.9 Legal Proceedings, Claims, Investigations, Etc. . . . 5
Section 2.10 Governmental Licenses, Permits, Etc. . . . . . . . . 5
Section 2.11 Insurance. . . . . . . . . . . . . . . . . . . . . . 5
Section 2.12 Material Contracts. . . . . . . . . . . . . . . . . . 6
Section 2.13 Finders' Fees. . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYERS . . . . . . 6
Section 3.1 Corporate Organization. . . . . . . . . . . . . . . . 6
Section 3.2 Authority Relative to and Validity of Agreements. . . 6
Section 3.3 Investment. . . . . . . . . . . . . . . . . . . . . . 7
Section 3.4 Business Activities. . . . . . . . . . . . . . . . . 7
ARTICLE 4
CLOSINGS . . . . . . . . . . . . . . . 7
Section 4.1 Closings. . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 5
COVENANTS . . . . . . . . . . . . . . . 8
Section 5.1 Public Announcements. . . . . . . . . . . . . . . . . 8
Section 5.2 Professional Services Agreement. . . . . . . . . . . 8
ARTICLE 6
DELIVERIES AT CLOSINGS . . . . . . . . . . . . 8
Section 6.1 Closing Certificates. . . . . . . . . . . . . . . . . 8
ARTICLE 7
MISCELLANEOUS . . . . . . . . . . . . . . 8
Section 7.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.2 Notices. . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.3 Entire Agreement. . . . . . . . . . . . . . . . . . 10
Section 7.4 Binding Effect, Benefits, Assignments. . . . . . . 10
Section 7.5 Applicable Law. . . . . . . . . . . . . . . . . . . 10
Section 7.6 Headings. . . . . . . . . . . . . . . . . . . . . . 10
Section 7.7 Counterparts. . . . . . . . . . . . . . . . . . . . 10
Section 7.8 Waiver: Consent. . . . . . . . . . . . . . . . . . 11
Section 7.9 No Third Party Beneficiaries. . . . . . . . . . . . 11
Section 7.10 Severability. . . . . . . . . . . . . . . . . . . . 11
UNIT PURCHASE AGREEMENT
UNIT PURCHASE AGREEMENT (the "Agreement"), dated this 27th day of
September, 1999, by and among Rare Atomic Pop, LLC, a Delaware limited
liability company ("Rare"), New Valley Corporation, a Delaware corporation
("New Valley") (Rare and New Valley collectively, the "Buyers") and Ant 21
LLC, a Delaware Limited Liability Company ("Seller" or the "Company").
ARTICLE 1
SALE OF UNITS
Section 1.1 Purchase and Sale. On the terms and subject to the
conditions of this Agreement and the Operating Agreement (as defined
below), Rare hereby agrees to purchase 1,313,112.27 units and New Valley
hereby agrees to purchase 413,112.27 units (collectively, the "Buyer
Units") of membership interests in the Seller (the "Units"), and the Seller
hereby agrees to sell the Buyer Units to the Buyers (the "Transactions"),
at the Rare Closing and the New Valley Closing, respectively, for the Rare
Purchase Price and the New Valley Purchase Price, respectively (as each are
defined below).
Section 1.2 Purchase Price. The aggregate purchase price for
those Buyer Units to be purchased by Rare shall consist of five million
dollars ($5,000,000) (the "Rare Purchase Price"). The aggregate purchase
price for those Buyer Units to be purchased by New Valley shall consist of
two million five hundred thousand dollars ($2,500,000) (the "New Valley
Purchase Price,") for an aggregate amount paid by Rare and New Valley of
seven million five hundred thousand dollars ($7,500,000) (the "Purchase
Price"); provided that, in the case of New Valley, seven hundred sixty-one
thousand and ninety-five dollars and eighty-nine cents ($761,095.89) in
principal and accrued interest under that certain note, dated August 4,
1999, by Seller to the order of New Valley, shall be paid in partial
consideration of the New Valley Purchase Price by the cancellation of such
note. Payment is otherwise payable by each of Rare and New Valley by wire
transfer of immediately available funds. Each of Rare and New Valley are
individually responsible for the payment of their amount of the Purchase
Price.
Section 1.3 Option to Acquire Additional Units of the Company.
(a) Grant. On the terms and subject to the conditions of this
Agreement and the Operating Agreement, Seller hereby grants to each of the
Buyers an option (collectively, the "Option"), exercisable in whole but not
in part, to purchase six hundred and fifty six thousand five hundred and
fifty-six and thirteen hundredths (656,556.13) Units for a purchase price
of two million five hundred thousand dollars each ($2,500,000) (the "Buyer
Option Price") (for an aggregate purchase price of five million dollars
($5,000,000)). The Option must be exercised by Rare and New Valley jointly
and may not be exercised by either Rare or New Valley alone. On the Option
Closing Date (as defined below) payment shall be payable by each of Rare
and New Valley by wire transfer of immediately available funds. Each of
Rare and New Valley shall be individually responsible for the payment of
their Buyer Option Price.
(b) Exercise Period. The Option shall be exercisable at any time
from the date hereof through one hundred and twenty (120) calendar days
from the date hereof.
(c) Exercise Notice. To exercise the Option, Rare and New Valley
shall jointly deliver a notice (the "Option Exercise Notice") to the
Company specifying a date, no more than ten (10) days from the date of the
Option Exercise Notice, on which the closing of the Option transaction will
occur (such date, the "Option Closing Date"). Such closing shall be held at
such time and place on the Option Closing Date as the parties may agree.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Buyers as set
forth below.
Section 2.1 Corporate Organization: Requisite Authority to Conduct
Business. Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
amended and restated operating agreement, as amended in the form set forth
as Exhibit A hereto (the "Operating Agreement") shall be in effect on the
Closing date after giving effect to the Transactions. Seller has all
requisite power and authority to own, operate and lease its properties and
to carry on its business as the same is now being conducted. Seller is duly
qualified or licensed to do business and is in good standing in all of the
jurisdictions in which the conduct of its business or the ownership or
leasing of its properties requires it to be so qualified or licensed, other
than such jurisdictions in which the failure to be so qualified or licensed
would not have a material adverse effect upon the business, operations (as
now conducted or as presently proposed to be conducted), assets,
properties, rights or condition (financial or otherwise), of Seller (a
"Material Adverse Effect").
Section 2.2 Capitalization and Holdings: Operating Agreement.
(a) The outstanding membership interests of the Seller will
consist, as of the Closing and after giving effect to the Transactions, of
three million nine hundred thirty nine thousand three hundred and thirty
six and eighty hundredths (3,939,336.80) units, each of which is entitled
to such allocable share of the profits, losses and distributions of the
Seller as further described in the Operating Agreement. Upon issuance to
the Buyers, the Buyer Units will consist of valid, beneficial limited
liability company interests in accordance with the terms of, and will be
entitled to the rights provided in, the Operating Agreement. Such Buyer
Units will, when issued, be duly issued, fully paid and non-assessable
securities of the Seller. There are no outstanding obligations of the
Seller to repurchase, redeem or otherwise acquire any Units, except as may
be contemplated by the Transactions or as required by the agreements
referred to in the Operating Agreement. Except as set forth in the
Operating Agreement or herein, the Seller is not bound by, or subject to,
any subscription, option, warrant, call, right, contract, commitment,
agreement, understanding or arrangement with respect to the Units.
(b) To the knowledge of Seller, as of the Closing and after giving
effect to the Transactions, the Operating Agreement shall be duly and
validly executed and delivered by or on behalf of the members of the Seller
and constitute a valid and binding agreement enforceable in accordance with
its terms, except (i) as such enforceability may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, (ii) as such obligations are
subject to general principles of equity and (iii) as rights to indemnity
may be limited by Federal, state or local securities laws or by public
policy.
(c) Schedule 2.2 hereto sets forth the ownership interests of all
of the Units of the Seller as of the Closing.
Section 2.3 Authority Relative to and Validity of Agreements.
Seller has full power and authority, corporate and otherwise, to execute
and deliver this Agreement, to consummate the Transactions and to assume
and perform all of its obligations hereunder. There are no corporate,
contractual, statutory or other restrictions of any kind upon the power and
authority of the Seller to execute and deliver this Agreement and to
consummate the transactions contemplated hereunder and no action, waiver or
consent by any foreign, federal, state, municipal or other governmental
department, commission or agency (a "Governmental Authority") is necessary
to make this Agreement valid and binding upon the Seller in accordance with
its terms. Seller will pay any Delaware or federal stock transfer or other
similar taxes or duties in connection with the sale and purchase of the
Buyer Units and the consummation of the transactions contemplated by this
Agreement. This Agreement has been duly executed and delivered by the
Seller and constitutes the legal, valid and binding obligations of the
Seller, enforceable against the Seller in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws of general application affecting the enforcement of
creditors' rights generally, and the fact that equitable remedies or relief
(including, but not limited to, the remedy of specific performance) are
subject to the discretion of the court from which such relief may be
sought.
Section 2.4 Required Filings and Consents: No Conflict. The Seller
is not required to submit any notice, report or other filing to or with any
Governmental Authority in connection with the execution, delivery or
performance of this Agreement. The execution, delivery and performance of
this Agreement by the Seller and the consummation of the Transactions do
not and will not (a) conflict with or violate any law, regulation,
judgment, order or decree binding upon the Seller, (b) conflict with or
violate any provision of the certificate of formation or Operating
Agreement of Seller, or, with respect to this Agreement and the Operating
Agreement, (c) conflict with or result in a breach of any condition or
provision of, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
properties or assets of Seller, pursuant to, or cause or permit the
acceleration prior to maturity of any amounts owing under, any indenture,
loan agreement, mortgage, deed of trust, lease, contract, license,
franchise or other agreement or instrument to which the Seller is a party
or which is or purports to be binding upon the Seller or by which any of
their respective properties are bound, which in any such event under this
Section 2.4(b) would cause a Material Adverse Effect. The execution,
delivery and performance of this Agreement by the Seller and the
consummation of the transactions contemplated hereby and thereby will not
result in the loss of any license, franchise, legal privilege or permit
possessed by Seller or give a right of termination to any party to any
agreement or other instrument to which Seller is a party or by which any of
its properties are bound.
Section 2.5 Financial Statements. Attached hereto as Schedule 2.5
are balance sheets of Seller at June 30, 1999 and related statements of
income and changes in cash flows for the period then ended (collectively
the "Financial Statements"), all of which have been prepared in accordance
with generally accepted accounting policies, other than with respect to
depreciation, and on an annual basis are substantially in accordance with
generally accepted accounting policies consistently applied throughout the
period indicated. The Financial Statements (i) present fairly the financial
condition and results of operations of Seller as of the date and for the
period indicated and (ii) are in accordance with the books and records of
Seller.
Section 2.6 Absence of Liabilities. To the actual knowledge of
Seller, there are no material liabilities of the Seller of any kind
whatsoever including federal tax liabilities, whether accrued, contingent,
absolute, determined, determinable or otherwise and there is no existing
condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than (i) liabilities
disclosed in the Financial Statements and (ii) liabilities disclosed on
Schedule 2.6 hereof. Other than as set forth on Schedule 2.6 hereof, there
are no material liabilities of the Seller of any kind owed to New Valley.
Section 2.7 Properties. Seller has legal and valid occupancy
permits and other required licenses or government approvals for each of the
properties and premises owned, leased, used or occupied by Seller (copies
of which have been heretofore delivered to the Buyers). Each lease of
Seller for real property is legal, valid and binding as to Seller and, to
the actual knowledge of Seller, the other party or parties thereto, and
Seller is a tenant or possessor in good standing thereunder, free of any
default or breach whatsoever, subject to any applicable requirements of
notice and grace periods, and quietly enjoys the premises provided for
therein.
Section 2.8 Trademarks, Patents and Copyrights.
(a) Seller owns, possesses or licenses all worldwide industrial
and intellectual property rights, including, without limitation, each
patent, patent right, license, patent application, trade name, trademark,
trade name and trademark registration, copyright, copyright registration,
copyright application, service mark, brand mark and brand name, trade
secrets relating to or arising from any proprietary process, formula,
source or object code, necessary to operate its business (collectively, the
"Seller Rights") as conducted on the date hereof.
(b) The execution, delivery and performance of this Agreement and
the consummation of the Transactions will not constitute a breach of any
instrument or agreement governing any Seller Rights, will not cause the
forfeiture or termination or give rise to a right of forfeiture or
termination of any Seller Rights and will not impair the right of Seller to
use, sell or license any Seller Rights or any portion thereof.
(c) No current or prior officers, employees or consultants of
Seller have made a claim upon Seller with respect to an ownership interest
in any Seller Rights as a result of having been involved in the development
of such property while employed by or consulting to Seller or otherwise,
nor, in the actual knowledge of Seller, is any such claim contemplated.
(d) To the knowledge of Seller, all trademark applications applied
for by Seller are pending and Seller has not received any final refusal to
register any such trademarks.
Section 2.9 Legal Proceedings, Claims, Investigations, Etc. There
is no legal, administrative, arbitration or other action or proceeding
pending, or to the actual knowledge of Seller, threatened, nor, to the
actual knowledge of Seller, is there any governmental investigation pending
or threatened, against (i) Seller or (ii) any director, officer or employee
thereof relating to the business of Seller, or (iii) the Seller Rights.
Seller has not been informed of any violation of or default under, any
laws, ordinances, regulations, judgments, injunctions, orders or decrees
(including without limitation, any immigration laws or regulations) of any
court, governmental department, commission, agency, instrumentality or
arbitrator applicable to the Seller. Seller is not currently subject to any
judgment, ordinance, injunction or decree of any court, arbitral authority,
administrative agency or other Governmental Authority.
Section 2.10 Governmental Licenses, Permits, Etc. Each of the
franchises, licenses, permits, consents, authorizations, approvals and
certificates of any Governmental Authority used in conducting the business
of Seller (collectively, the "Permits") is currently valid and in full
force and effect and the Permits constitute all material franchises,
licenses, permits, consents, authorizations, approvals and certificates of
any Governmental Authority necessary to the conduct of the business of
Seller, except where the failure to have obtained such Permit would not
have a Material Adverse Effect. Seller is not in violation of any of the
Permits and there is no pending nor, to the actual knowledge of Seller,
threatened proceeding that could reasonably be expected to result in the
revocation or cancellation of, or inability of Seller to renew, any Permit.
Section 2.11 Insurance. Seller is not in default with respect to
any provision contained in any existing insurance policy maintained by
Seller pertaining to its business properties, personnel or assets and has
not failed to give any notice or present any claim under any insurance
policy in due and timely fashion. Each such policy is in full force and
effect. All payments with respect to such policies are current and Seller
has not received any notice threatening a suspension, revocation,
modification or cancellation of any such policy.
Section 2.12 Material Contracts. Seller is not a party to and is
not bound by any contract nor has any commitment, whether written or oral,
except (i) as set forth on Schedule 2.12 hereto or (ii) requiring the
payment by the Company of less than $100,000. Each of the written contracts
and written commitments set forth on Schedule 2.12 hereto is valid and
existing, in full force and effect and enforceable against Seller and, to
the actual knowledge of the Company, the other party thereto, in accordance
with its terms (subject to equitable principles, bankruptcy,
reorganization, insolvency and moratorium laws and limitations on
creditors' rights generally) and there is no material default by Seller or
claim of default against Seller or any notice of termination with respect
thereto. Seller has complied in all material respects with all requirements
of, and performed in all material respects all of its obligations under,
such contracts and commitments. To the actual knowledge of Seller, there
does not exist as of the date hereof any defaults in or breaches of
representations and warranties under the Operating Agreement.
Section 2.13 Finders' Fees. There is no investment banker,
broker, finder or other intermediary which has been retained or is
authorized to act on behalf of the Seller who might be entitled to any fee
or commission from the Seller or any of its affiliates upon consummation of
the transactions contemplated by this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
Each Buyer, severally and not jointly, represents and warrants to
the Seller as at the date hereof as follows:
Section 3.1 Corporate Organization. The Buyer is a corporation
(in the case of New Valley) or limited liability company (in the case of
Rare) duly organized, validly existing and in good standing under the laws
of the State of Delaware.
Section 3.2 Authority Relative to and Validity of Agreements. The
Buyer has full power and authority, corporate and otherwise, to execute and
deliver this Agreement and to assume and perform all of its obligations
hereunder. The execution and delivery of this Agreement and the
performance by the Buyer of its obligations hereunder has been duly
authorized by all required corporate action and no other action or
authorization on the part of or with respect to Buyer is necessary to
authorize the execution and delivery by it of, and the performance of its
obligations under, this Agreement. There are no corporate, contractual,
statutory or other restrictions of any kind upon the power and authority of
Buyer to execute and deliver this Agreement, to consummate the Transactions
and to perform its obligations hereunder, and no action, waiver or consent
by any Governmental Authority is necessary to make this Agreement valid and
binding upon Buyer in accordance with its terms. This Agreement has been
duly executed and delivered by Buyer and constitutes its legal, valid and
binding obligations enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws of general application affecting the enforcement of
creditors' rights generally, and the fact that equitable remedies or relief
(including, but not limited to, the remedy of specific performance) are
subject to the discretion of the court from which such relief may be
sought.
Section 3.3 Investment. The Buyer is acquiring those Buyer Units
purchased by Buyer solely for its own account as an investment and not with
a view to, or for offer or resale in connection with, any distribution
thereof within the meaning of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations promulgated thereunder. Buyer is an
"accredited investor" as that term is defined in Rule 501 promulgated under
the Act. Buyer will not engage in any resale of the Buyer Units except in
accordance with applicable securities laws.
Section 3.4 Business Activities. Rare represents and warrants to
Seller as at the date hereof that Rare Atomic Pop, LLC has been formed
solely for the purpose of holding its membership interest in Ant 21 LLC and
will engage in no other activities while holding such membership interest.
ARTICLE 4
CLOSINGS
Section 4.1 Closings. The consummation of the purchase and sale
to New Valley of 413,112.27 Buyer Units contemplated hereby shall occur at
a "closing" to be held simultaneously with the execution of this Agreement
at such time and place as New Valley and the Seller may agree (such closing
referred to herein as the "New Valley Closing"). The consummation of the
purchase and sale to Rare of 1,313,112.27 Buyer Units contemplated hereby
shall be held at a "closing" to be held within seven (7) calendar days of
the signing of this Agreement in the offices of Rare in New York, New York,
or at such other place as Rare and the Seller may agree (such closing
referred to herein as the "Rare Closing." The Rare Closing and New Valley
Closing collectively, the "Closing").
ARTICLE 5
COVENANTS
Section 5.1 Public Announcements. Unless required by applicable
law, none of the parties hereto shall (i) disclose the Rare Purchase Price,
New Valley Purchase Price, Purchase Price or Buyer Option Price, or
specific terms of this Agreement, or (ii) issue any report, statement or
press release relating to this Agreement and the transactions contemplated
hereby, to the public, the trade or the press or any third party, except to
professional advisers, employees, or potential lenders or investors, or as
mutually agreed by the parties hereto. Copies of any such reports,
statements or press releases, including any announcements or disclosures
mandated by law or applicable accounting requirements shall be delivered to
each party hereto prior to their release. Nothing herein shall preclude
such disclosures to any lenders or certified public accountants of the
respective parties. Breach of this Section 5.1 may give rise to suit for
injunctive relief and for damages, but shall not be grounds for rescission.
Section 5.2 Professional Services Agreement. The Seller and Rare
Medium, Inc. agree to negotiate in good faith towards entering into a
commercially reasonable and customary agreement to provide certain
technical and consulting services to the Seller.
ARTICLE 6
DELIVERIES AT CLOSINGS
Section 6.1 Closing Certificates. (a) The Buyers shall have
received a certificate, signed by an officer of Seller, to the effect that
the representations and warranties of the Seller contained in this
Agreement and in any agreement, certificate or other writing delivered by
the Seller pursuant hereto are true at and as of the date of this
Agreement.
(b) Each of the Buyers and the Seller, shall receive a
certificate, signed by officers of each of the Buyers and the Seller,
respectively, to the effect that the representations and warranties of each
of the Buyers and the Seller, respectively, contained in this Agreement and
in any agreement, certificate or other writing delivered by the Buyers or
the Seller pursuant hereto, are true at and as of the Option Closing Date,
as if made at and as of such date (except to the extent expressly made as
of an earlier date, which shall remain true as of such earlier date).
ARTICLE 7
MISCELLANEOUS
Section 7.1 Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Company.
Section 7.2 Notices. All notices, requests, demands and other
communications that are required or may be given under this Agreement shall
be in writing and shall be deemed to have been duly given when delivered
personally (which personal delivery shall include delivery by responsible
overnight courier), or five days after being sent by registered or
certified mail, return receipt requested, postage prepaid:
(a) If to the Buyers to each of:
Rare Atomic Pop, LLC
Attention: Marc Rowan
with a copy to:
Akin Gump Strauss Hauer & Feld
590 Madison Avenue
New York, New York 10027
Attention: Jim Kaye
and
New Valley Corporation
Nations Bank Tower
100 S.E. 2nd Street
Miami, Florida 33131
Attention: Richard Lampen
with a copy to:
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
Attention: Nancy Lieberman
(b) If to the Seller, to each of:
Ant 21 LLC
1447 Cloverfield Blvd.
2nd Floor
Santa Monica, California 90404
Attention: Alvin N. Teller
With a copy to:
Allen D. Lenard, Esq.
Lenard & Gonzalez LLP
1900 Avenue of the Stars
25th Floor
Los Angeles, California 90067
or to such other address as any party shall have specified by notice in
writing to the other in compliance with this Section 7.2.
Section 7.3 Entire Agreement. This Agreement, together with the
Schedules and Exhibits hereto constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, representations and understandings among the parties
hereto.
Section 7.4 Binding Effect, Benefits, Assignments. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and
their respective successors and assigns nothing in this Agreement,
expressed or implied, is intended to confer on any other person, other than
the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
This Agreement may not be assigned without the prior written consent of the
other parties hereto.
Section 7.5 Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to that state's principles of conflicts of law.
Section 7.6 Headings. The headings and captions in this Agreement
are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
Section 7.7 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
Section 7.8 Waiver; Consent. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by each of
the parties hereto, and no waiver of any of the provisions or conditions of
this Agreement or any of the rights of a party hereto shall be effective or
binding unless such waiver shall be in writing and signed by the party
claimed to have given or consented thereto. Except to the extent that a
party hereto may have otherwise agreed to in writing, no waiver by that
party of any condition of this Agreement or breach by any other party of
any of its obligations, representations or warranties hereunder shall be
deemed to be a waiver of any other condition or subsequent or prior breach
of the same or any other obligation or representation or warranty by such
other party, nor shall any forbearance by the first party to seek a remedy
for any noncompliance or breach by such other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
Section 7.9 No Third Party Beneficiaries. Subject to Section 7.4
hereof, nothing herein, expressed or implied, is intended or shall be
construed to confer upon or give to any person, firm, corporation or legal
entity, other than the parties hereto, any rights, remedies or other
benefits under or by reason of this Agreement.
Section 7.10 Severability. If any provision of this Agreement or
the application thereof to any person or circumstances is held invalid or
unenforceable in any jurisdiction, the remainder hereof, and the
application of such provision to said person or circumstances in any other
jurisdiction, shall not be affected thereby, and to this end the provisions
of this Agreement shall be severable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year hereinabove first set forth.
RARE MEDIUM, INC., solely in regard to
its obligations under Section 5.2 hereof
By: /s/ Robert Lewis
Name: Robert Lewis
Title: Vice President and General Counsel
RARE ATOMIC POP, LLC
By: /s/ Mark Rowan
Name: Mark Rowan
Title: Manager
NEW VALLEY CORPORATION
By: /s/ Howard Lorber
Name: Howard Lorber
Title: President
ANT 21 LLC
By: /s/ Alvin N. Teller
Alvin N. Teller
Manager
