Handy Bits To Know19 Oct 2021 20:57
From the Arrangement Agreement. Needed to have ticked every one of the covenant boxes to seal the deal.
Conditions precedent and applicable covenants
Section 6.1 Mutual Conditions Precedent
The Parties are not required to complete the Arrangement unless EACH of the following conditions is satisfied, which conditions may only be waived, in whole or in part, by the mutual consent of the Purchaser and the Parent, on the one hand, and the Company on the other, provided that, with respect to the condition set out in Section 6.1(5), the Purchaser may, without the consent of the Company, waive the requirement to receive a No Action Letter as set out in paragraph (ii)(b) of the definition of “Competition Act Approval” in Section 1.1
(iii) as required by Law, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the Ordinary Course and in accordance with Laws, and the Company shall, in good faith, use commercially reasonable efforts to maintain and preserve its and its Subsidiaries’ business organization, assets, properties, employees, goodwill and business relationships with customers, suppliers, partners and other Persons with which the Company or any of its Subsidiaries has material business relations.
(Think, KPMG evidence of $200.6M outside the ordinary course, 156 days deferred payment terms imposed on many without any engagement, whilst repaying the bank $17M. All done without consent)
(x) amend or modify in any material respect or terminate or waive any material right under any Significant Contract or enter into any contract or agreement that would be a Significant Contract if in effect on the date hereof, excluding the expiry of any Significant Contract in accordance with its terms, without any action taken by the Company or any of its Subsidiaries;
(y) amend or modify in any material adverse respect or terminate or waive any material right under any Lease or amend or modify any Lease in any adverse manner that would not reasonably be expected to be considered Ordinary Course, excluding the expiry of any Lease in accordance with its terms, without any action taken by the Company or any of its Subsidiaries;
(z) enter into any new Construction Contract relating to new construction projects which have not been commenced on the date of this Agreement in relation to either new builds or renovations at existing facilities that involve 50% or or more of the square footage of such existing facilities;
(Think, the Queensway deal and new theatre to be built at Colossus when threatened with CCAA and given a deadline. Deal done by Cineplex for $25M received from RioCan, with $21M then paid back to RioCan for rents owing. Never apprised CINE or sought consent)
Probably a couple of the main reasons why people are now sitting static and waiting for the outcome.
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