[DC Cinema Centers Letterhead]
Exhibit 2.5
[DC Cinema Centers Letterhead]
As of March 31, 2012
Cinema Supply, Inc. d/b/a Cinema Centers
502 S. Market Street
Millersburg, Pennsylvania 17061
Re: Second Amendment to Asset Purchase Agreement (“Second Amendment”)
Ladies and Gentleman:
Reference is made to that certain Asset Purchase Agreement, dated as of May 3, 2011, by and among Cinema Supply, Inc., a Pennsylvania corporation, doing business as Cinema Centers (“Seller”), Marvin Troutman, Doris Troutman, DC Cinema Centers, LLC, a Delaware limited liability company (“Buyer”), McNees Wallace & Nurick LLC, as Escrow Agent, and solely with respect to Sections 2.b(a), 2.8, 2.9 and 2.10 thereof, Gina DiSanto, Trudy Withers and Van Troutman, as amended by that certain Amendment to Asset Purchase Agreement, dated as of June 30, 2011 (as amended, the “Agreement”). All capitalized terms used herein and not otherwise defined have the same meanings specified in the Agreement.
The undersigned parties to the Agreement hereby agree to further amend the Agreement in the following respects:
1.
Buyer Parent shall be made a party to the Agreement solely with respect to all sections referenced in this Second Amendment or necessary to enforce the obligations of Buyer Parent set forth in this Second Amendment, including, without limitation, the following Sections:
Section 2.6
Section 2.7
Section 2.8
Article III
Section 4.6
Article VI
Article VII
Article VIII
2.
The last two sentences of Section 2.2 are deleted, and accordingly, Seller shall have no responsibility to reimburse Buyer for any Pre-sold Tickets sold by Seller in the ordinary course of business prior to the Closing Date, whether or not they are used on or after the Closing Date.
3.
Section 2.6(a) of the Agreement is deleted in its entirety and the following is inserted in lieu thereof:
“(a)
The aggregate purchase price for all of the Purchased Assets shall consist of: (i) Eleven Million Dollars in cash ($11,000,000.00) (the “Cash Consideration”); (ii) a promissory note, in the form annexed hereto as Exhibit A, issued to and in favor of Seller by
Digital Cinema Destinations Corp. (“Buyer Parent”) and Buyer, jointly and severally, in the principal amount of One Million Dollars ($1,000,000.00)(the “Purchase Price Promissory Note ”); and (iii) 335,000 shares of Class A common stock, par value $0.01, of Buyer Parent (the “Share Consideration” and together with the Cash Consideration and the Purchase Price Promissory Note, the “Purchase Price”); provided that the Purchase Price shall be increased by such amount of Petty Cash and value of the inventory (as calculated pursuant to Section 2.2 above) as is on hand at each of the Cinemas at the close of business on the last business day prior to the Closing Date.
The Purchase Price shall be allocated as follows: $1.00 for the Bloomsburg Lease Agreement and $2,640,000.00 for the remaining assets related to the Bloomsburg Cinema; $1.00 for the Camp Hill Lease Agreement and $2,979,995.00 for the remaining assets related to the Camp Hill Cinema; $1.00 for the Reading Lease Agreement and $2,400,000.00 for the remaining assets related to the Reading Cinema; $1.00 for the Selinsgrove Lease Agreement and $2,880,000.00 for the remaining assets related to the Selinsgrove Cinema; $1.00 for the Williamsport Cinema and $1,600,000.00 for the remaining assets related to the Williamsport Cinema; and Five Hundred Thousand Dollars ($500,000.00) each to be paid to Gina DiSanto, Trudy Withers and Van Troutman as consideration for entering into the Non-Competition Agreements; and any increase in the Purchase Price for Petty Cash and value of the inventory shall be paid to Seller.”
4.
Section 2.6(b) of the Agreement is deleted in its entirety and the following is inserted in lieu thereof:
“(b)
Because the transactions contemplated herein (the “Transactions”) will not closed by March 31, 2012 (the “Outside Date”), Buyer Parent shall deliver to Seller, simultaneously with this Second Amendment, a signed promissory note and related disclosure, in the form annexed hereto as Exhibit B, in the principal amount of One Hundred Thousand Dollars ($100,000.00) (the “Extended Closing Period Promissory Note”). Upon delivery of the Extended Closing Period Promissory Note to Seller, the Outside Date shall automatically be extended to April 30, 2012 (such period between the Outside Date and April 30, 2012, the “Extended Closing Period”). During the Extended Closing Period, Buyer and Seller shall continue to use commercially reasonable efforts to consummate the Transactions. If Closing does not occur on or prior to the Outside Date and the Agreement is terminated by either Buyer or Seller, the Extended Closing Period Promissory Note shall be treated as follows or as set forth in Section 2.7 below (as applicable):
(i)
If this Agreement is terminated as a sole result of a breach by Seller, Buyer shall notify Seller of such breach by Seller and, provided Seller does not object to the claim of a breach within two (2) business days after receiving such notice, the Extended Closing Period Promissory Note shall automatically be canceled and voided, and Seller shall return the Extended Closing Period Promissory Note to Buyer Parent within five (5) business days of receipt of such notification; or
(ii)
If this Agreement is terminated for any reason other than as the sole result of a breach by Seller, including without limitation Buyer's failure to proceed to Closing by the Extended Closing Period, the entire unpaid principal amount under the Extended
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Closing Period Promissory Note shall immediately become due and payable by Buyer Parent, and Buyer Parent shall deliver such principal amount due and owing under the Extended Closing Period Promissory Note, together with all interest earned thereon, to Seller within five (5) business days of receipt of such notification.
This provision shall survive the expiration or termination of this Agreement.”
5.
Section 2.7 of the Agreement is amended by deleting the third sentence in its entirety and inserting the following in lieu thereof:
“Notwithstanding anything herein to the contrary, in the event the Closing does not occur by the Outside Date, Buyer and Seller shall each have the right, in each party’s sole discretion, to terminate this Agreement by providing five (5) business days advance written notice thereof to the other party, and provided the other party does not proceed to Closing within said five (5) business day period, this Agreement shall terminate, the entire unpaid principal amount under the Extended Closing Period Promissory Note shall immediately become due and payable by Buyer Parent, and Buyer Parent shall deliver such principal amount due and owing under the Extended Closing Period Promissory Note, together with all interest earned thereon, to Seller within five (5) business days of receipt of such notification. After such termination, neither party shall have any further liability to the others, except for those obligations that shall expressly survive termination of this Agreement.”
6.
Section 2.8 of the Agreement is deleted in its entirety and the following is inserted in lieu thereof:
“2.8
Payment of Purchase Price. At Closing, the Cash Consideration shall be paid by Buyer in immediately available funds, and Buyer Parent and Buyer shall deliver to Seller the Purchase Price Promissory Note and the Stock Evidence (as defined below), in accordance with Section 2.6(a).”
7.
A new Section 3.23 has been added to the Agreement as follows:
“3.23
Investment. Seller is acquiring the shares of Class A common stock being issued to Seller as the Share Consideration (the “Shares”) for its own account for investment purposes and not with a view toward any resale or distribution thereof. Seller acknowledges that the Shares have not been registered under the Securities Act of 1933 (the “Securities Act”), as amended and that it may not sell the Shares except in accordance with the Securities Act, or applicable exemptions therefrom.”
8.
A new Section 3.24 has been added to the Agreement as follows:
“3.24
Investor Status. At the time Seller was offered the Shares, it was, and at the Closing Date it is an “accredited investor” as defined in Rule 501(a) under the Securities Act of 1933.”
9.
A new Section 3.25 has been added to the Agreement as follows:
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“3.25
Experience of Seller. Seller, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Seller has had an opportunity to ask questions of and receive answers from representatives of Buyer Parent concerning the financial condition and prospects of Buyer Parent, and to obtain any additional information necessary to verify the accuracy of the information herein. No other person has a direct or indirect beneficial interest in the Shares. Seller is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.”
10.
A new Section 3.26 has been added to the Agreement as follows:
“3.26
Restricted Shares. Seller agrees to the imprinting of the following legend, or a substantially similar legend, to the certificate(s) evidencing the Shares:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
11.
The heading of Article IV is deleted in its entirety and the following is inserted in lieu thereof:
“ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER PARENT”
12.
A new Section 4.6 shall be added to the Agreement as follows:
“4.6
Buyer Parent Representations and Warranties. As an inducement to Seller to enter into this Agreement and consummate the transactions contemplated hereby, Buyer Parent represents and warrants to Seller as follows:
(a)
Organization. Buyer Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to own or lease its properties, carry on its business, enter into this Agreement and the Other Agreements to which it is or is to become a party and perform its obligations hereunder and thereunder.
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(b)
Authorization and Enforceability. This Agreement and each Other Agreement to which Buyer Parent is a party have been duly executed and delivered by, and constitute the legal, valid and binding obligations of Buyer Parent, enforceable against it in accordance with their respective terms. Each Other Agreement to which Buyer Parent is to become a party pursuant to the provisions hereof, when executed and delivered by Buyer Parent, will constitute the legal, valid and binding obligation of Buyer Parent, enforceable against Buyer Parent in accordance with the terms of such Other Agreement. All actions contemplated by this Section 4.6(b) have been duly and validly authorized by all necessary proceedings by Buyer Parent.
(c)
No Violation of Laws; Consents. Neither the execution and delivery of this Agreement or any Other Agreement to which Buyer Parent is or is to become a party, the consummation of the transactions contemplated hereby or thereby nor the compliance with or fulfillment of the terms, conditions or provisions hereof or thereof by Buyer Parent will: (i) contravene any provision of the Governing Documents of Buyer Parent, (ii) conflict with, result in a breach of, constitute a default or an event of default (or an event that might, with the passage of time or the giving of notice or both, constitute a default or event of default) under any of the terms of, result in the termination of, result in the loss of any right under, or give to any other Person the right to cause such a termination of or loss under, any contract, agreement or instrument to which either Buyer Parent is a party or by which any of its assets may be bound or affected, (iii) result in the creation, maturation or acceleration of any Liability of Buyer Parent (or give to any other Person the right to cause such a creation, maturation or acceleration), or (iv) violate any Law or any judgment or order of any Governmental Body to which Buyer Parent is subject or by which any of its assets may be bound or affected. No consent, approval or authorization of, or registration or filing with, any Person is required in connection with the execution or delivery by Buyer Parent of this Agreement or any of the Other Agreements to which Buyer Parent is or is to become a party pursuant to the provisions hereof or the consummation by Buyer Parent of the transactions contemplated hereby or thereby.
(d)
No Pending Litigation or Proceedings. No Litigation is pending or, to the knowledge of Buyer Parent, threatened against or affecting Buyer Parent or any Affiliate of Buyer Parent in connection with any of the transactions contemplated by this Agreement or any Other Agreement to which Buyer Parent is or is to become a party or that would, to Buyer Parent’s knowledge, have a material adverse effect on Buyer Parent’s business considered as a whole.
(e)
Finders’ Fees. Neither Buyer Parent nor any of its officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fee, commission or finders’ fee in connection with any of the transactions contemplated hereby.
(f)
Share Consideration. As of issuance, which will occur on the Closing Date, Seller will be the sole record and beneficial owner of the Shares, and all the Shares will be duly authorized, validly issued, fully paid and non-assessable. The Shares will be free and clear of all restrictions on transfer (other than restrictions of general applicability under the Securities Act and state securities laws, and the restrictions set forth in this Second Amendment, including the Lock-Up Agreement), liens and taxes. Buyer Parent is not a party to any option, warrant, right, agreement or commitment providing for the disposition or acquisition of any of the Shares
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(other than this Agreement). Buyer Parent is not a party to (or has irrevocably terminated) any voting trust, proxy or other agreement or understanding with respect to the transfer or voting of any of the Shares.
(g)
Form S-1. The Registration Statement on Form S-1 filed with the United States Securities and Exchange Commission by Buyer Parent on December 20, 2011, as amended, including but not limited to those certain amendments filed on January 23, 2012, February 15, 2012, March 7, 2012, March 15, 2012, March 30, 2012 and any further amendments thereto, including in any prospectus or prospectus supplement (the “Registration Statement”), does not contain any untrue statement or omit to state a material fact necessary to make any of the statements contained therein, in light of the circumstances in which it was made, not misleading.”
13.
Section 6.1(m) of the Agreement is amended as follows:
“(m)
Financing. Buyer shall have received adequate and satisfactory financing prior to the Outside Date.”
14.
A new Section 6.1(n) shall be added as follows:
“(n)
Seller shall have entered into a Lock-Up Agreement with respect to the Shares, a form of which is annexed hereto as Exhibit C (as modified to account for the fact that Seller has agreed that, following the lock-up period, Seller shall not sell more than 10% of the Shares, or 33,500 shares, during any one 30-day period). Notwithstanding anything to the contrary contained herein, after the Closing Date, Seller may transfer some or all of the Shares to an affiliate, stockholder or director of Seller or any family member thereof, provided such transferee signs a Lock-Up Agreement in substantially the same form as Exhibit C, and provided further that such transfer complies with Section 4(2) of the Securities Act or the regulations promulgated thereunder.”
15.
New Sections 6.2(g) and 6.2(h) shall be added as follows:
“(g)
Buyer Parent shall have delivered evidence reasonably satisfactory to Seller of the issuance of the Shares comprising the Share Consideration in favor of Seller in accordance with the terms of this Second Amendment (the “Stock Evidence”).
(h)
Buyer Parent shall have sold Common Stock pursuant to the Registration Statement for a price of at least $6.00 per share.”
16.
Buyer acknowledges and agrees that Lessor's Consent and estoppel certificates delivered to Buyer and Seller by the Landlords for the Bloomsburg Cinema, Camp Hill Cinema, Selinsgrove Cinema, and the Williamsport Cinema, copies of which are attached hereto as Exhibit D, are satisfactory to Buyer and satisfy the obligations of Seller in Section 6.2(f). Further, Buyer agrees to enter into effective at Closing, or to permit Seller to enter into prior to Closing, the Subordination, Non-disturbance and Attornment Agreement attached herein for the Reading Theater, a copy of which is attached hereto as Exhibit E.
17.
A new Section 6.3(a)(xv) shall be added as follows:
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“(xv)
An executed Lock-Up Agreement, substantially in the form attached hereto as Exhibit C (as modified to account for the fact that Seller has agreed that, following the lock-up period, Seller shall not sell more than 10% of the Shares, or 33,500 shares, during any one 30-day period).”
18.
Sections 6.3(b)(viii) and (ix) are added as follows:
“(viii) the Stock Evidence.
(ix) an original signed Purchase Price Promissory Note and related disclosure signed by Buyer Parent and Buyer.”
19.
Section 6.4(a) of the Agreement is amended by deleting all references to “December 31, 2011” and inserting in lieu thereof, in each instance, “the Outside Date.”
20.
The following sentence is added to Section 7.1:
“The representations and warranties of Buyer Parent set forth herein shall survive for the applicable statute of limitations plus ninety (90) days.”
21.
Further and notwithstanding anything herein to the contrary, Section 7.3 of the Agreement is amended by adding the following sentence:
“Buyer Parent and Buyer shall jointly and severally indemnify, defend, save and hold the Seller Indemnitees harmless from and against any and all demands, claims, actions or causes of action, assessments, losses, damages, deficiencies, Liabilities, costs and expenses (including, without limitation the Seller Damages) asserted against, imposed upon, resulting to, required to be paid by, or incurred by any Seller Indemnitees, directly or indirectly, in connection with, arising out of, resulting from, or which would not have occurred but for (a) a material breach of any representation or warranty made by Buyer Parent in this Agreement or in any certificate or document furnished pursuant hereto by Buyer Parent or any Other Agreement to which either Buyer Parent is or is to become a party, and (b) a breach or nonfulfillment of any covenant or agreement made by any Buyer Parent in or pursuant to this Agreement and in any Other Agreement to which either Buyer Parent is or is to become a party.”
22.
All provisions in this Second Amendment related to the Shares and the Purchase Price Promissory Note shall survive Closing.
Except as expressly amended herein, the Agreement remains unchanged in all respects and in full force and effect in accordance with its terms.
[Signature Page Follows]
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Very truly yours,
DC CINEMA CENTERS, LLC
By:
________________________
A. Dale Mayo, Manager
ACKNOWLEDGED AND AGREED
IN EACH AND EVERY RESPECT:
DIGITAL CINEMA DESTINATIONS CORP.
By: _______________________
Name: A. Dale Mayo
Title: President
CINEMA SUPPLY, INC.
d/b/a CINEMA CENTERS
By: _______________________
Name:
Title:
MARVIN TROUTMAN
___________________________
DORIS TROUTMAN
___________________________
Second Amendment to APA
MCNEES WALLACE & NURICK LLC, as
Escrow Agent
By: _________________________
Name:
Title:
And solely with respect to Sections 2.6(a),
2.8, 2.9 and 2.10
GINA DISANTO
__________________________
TRUDY WITHERS
___________________________
VAN TROUTMAN
___________________________
Second Amendment to APA
Exhibit A
Form of Purchase Price Promissory Note
PROMISSORY NOTE
U.S. $1,000,000.00
April ______, 2012
Westfield, New Jersey
FOR VALUE RECEIVED, Digital Cinema Destinations Corp. and DC Cinema Centers, LLC, a Delaware limited liability company (jointly and severally, the “Maker”), hereby promises to pay to the order of Cinema Supply, Inc., a Pennsylvania corporation (“Cinema”), the principal amount of ONE MILLION ($1,000,000.00) Dollars, together with interest on the unpaid principal balance until fully paid as hereinafter described, which principal and accrued interest shall be payable on or before one hundred fifty (150) days after the Closing Date, as defined in the Agreement (as defined below) (the “Maturity Date”). From the date hereof until the earlier of (i) the date on which all amounts due hereunder have been paid in full, or (ii) the Maturity Date, this Note shall bear interest at the fixed rate of six (6%) percent. If all such amounts due hereunder have not been timely paid by the Maturity Date as required hereunder, then on the day after the Maturity Date and continuing until the date on which all amounts due hereunder have been paid in full, the interest rate under this Note shall be increased to ten (10%) percent.
The payments due under this Note (the “Note”) shall be paid in lawful money of the United States of America to Cinema in immediately available funds at such address as it may designate by notice in writing to the Maker.
1.
Prepayment. The Maker may prepay this Note in whole or in part without penalty at any time.
2.
Event of Default. The entire unpaid principal amount under this Note due thereon, together with all interest due thereon, shall forthwith become and be due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, if the Maker fails to pay the obligation evidenced hereby on or before the Maturity Date (herein called “Event of Default”).
3.
Acknowledgement. The Maker and Cinema acknowledge that this Note is being executed and delivered by the Maker in substitution for paying to Cinema $1,000,000.00 of the Purchase Price required to be paid to Cinema pursuant to that certain Asset Purchase Agreement, dated as of May 3, 2011, as amended by that certain Amendment to Asset Purchase Agreement, dated June 30, 2011, and as further amended by that certain Second Amendment to Asset Purchase Agreement, dated March 31, 2012 (as amended, the “Agreement”), by and among Cinema Supply, Inc., d/b/a Cinema Centers, Marvin Troutman, Doris Troutman, DC Cinema Centers, LLC, McNees Wallace & Nurick LLC, as Escrow Agent, and, solely with respect to Sections of the Agreement 2.6(a), 2.8, 2.9 and 2.10, Gina DiSanto, Trudy Withers, and Van Troutman.
Promissory Note
4.
Remedies. If an Event of Default specified in Section 2 hereof shall have occurred and be continuing, the holder may proceed to enforce the payment of all sums due upon this Note or to enforce all other legal or equitable rights of the holder and remedies it may have at law or in equity.
5.
Joint and Several Obligations and Liabilities. If Maker consists of more than one (1) person, corporation or other entity, the obligations and liabilities of such persons, corporations or other entities under this Note shall be joint and several, and the word "Maker" shall mean all or some or any of them.
6.
Amendments and Waivers. Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Maker and Cinema.
7.
Notices. All notices, requests, consents, and other communications with respect to this Note shall be in writing and shall be deemed delivered (i) three (3) business days after being sent by registered or certified mail, return receipt requested, postage prepaid or (ii) one (1) business day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, in each case to the intended recipient as set forth below:
If to the Maker:
Digital Cinema Destinations Corp
250 East Broad Street
Westfield, New Jersey 07090
Attention: A. Dale Mayo, Manager
Telephone: (908) 396-1362
Facsimile: ###-###-####
And
DC Cinema Centers, LLC
250 East Broad Street
Westfield, New Jersey 07090
Attention: A. Dale Mayo, Manager
Telephone: (908) 396 1362
Facsimile: (908) 396-1363
2
If to Cinema:
Cinema Supply, Inc.
502 South Market Street
Millersburg, PA 17061-0146
Attn: Gina T. DiSanto, CEO
Telephone: ###-###-####
Facsimile: (717) 692-3073
With a copy to:
McNees Wallace & Nurick LLC
100 Pine Street
P.O. Box 1166
Harrisburg, Pennsylvania
Attention: Rhonda M. Weaver, Esq.
Telephone: (717) 237-5434
Facsimile: ###-###-####
(ii)
Any party may give any notice, request, consent or other communication with respect to this Note using any other means (including, without limitation, personal delivery, messenger service, telecopy, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party for whom it is intended. Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section.
8.
Conflicting Agreements. In the event of any inconsistencies between the terms of this Note and the terms of any other document related to this Note, the terms of this Note shall prevail.
9.
Governing Law. This Note shall be governed by and construed under the laws of the Commonwealth of Pennsylvania (the “Commonwealth”) as applied to agreements among residents of the Commonwealth entered into and to be performed entirely therein. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
10.
Waivers. The nonexercise by either party of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
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THE MAKER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, AFTER AN EVENT OF DEFAULT TO APPEAR AT ANY TIME FOR CINEMA IN ANY ACTION BROUGHT AGAINST THE MAKER ON THIS NOTE AT THE SUIT OF CINEMA, WITH OR WITHOUT DECLARATION FILED, AS OF ANY TERM, AND THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST THE MAKER FOR THE ENTIRE UNPAID PRINCIPAL OF THIS NOTE AND ALL OTHER SUMS PAID BY CINEMA TO OR ON BEHALF OF THE MAKER PURSUANT TO THE TERMS OF THIS NOTE, AND ALL ARREARAGES OF INTEREST THEREON, TOGETHER WITH COSTS OF SUIT, AND ANY OTHER SUMS SECURED BY THIS NOTE, ATTORNEY'S COMMISSION OF TEN PERCENT (10%) FOR COLLECTION; AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE MAKER HEREBY VOLUNTARILY, KNOWINGLY AND UNDERSTANDABLY WAIVES ANY RIGHT TO PRIOR NOTICE OR TO A HEARING IN CONNECTION WITH THE ENTRY OF ANY SUCH CONFESSED JUDGMENT OR THE COLLECTION OF SUCH JUDGMENT BY ATTACHMENT, LEVY OR SALE OF OR AGAINST THE MAKER'S REAL OR PERSONAL PROPERTY.
THE MAKER STATES THAT IT HAS BEEN REPRESENTED BY COUNSEL DURING THE NEGOTIATION, PREPARATION, EXECUTION AND DELIVERY OF THIS NOTE.
THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL THE AMOUNTS DUE HEREUNDER.
The remedies of Cinema shall be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of Cinema, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.
4
IN WITNESS WHEREOF, the Maker has caused its duly authorized officer to execute this Note as of the date first written above.
Digital Cinema Destinations Corp. By: __________________________ Name: A. Dale Mayo Title: President | DC Cinema Centers, LLC By: __________________________ Name: A. Dale Mayo Title: Manager |
5
DISCLOSURE FOR CONFESSION OF JUDGMENT
THE UNDERSIGNED HAVE EXECUTED, AS OF THE ______ DAY OF APRIL, 2012, A PROMISSORY NOTE UNDER WHICH THE UNDERSIGNED ARE OBLIGATED, JOINTLY AND SEVERALLY, TO REPAY ONE MILLION DOLLARS AND NO CENTS ($1,000,000.00), TO THE PAYEE, CINEMA SUPPLY, INC. ("PAYEE").
INITIALS: _________
INITIALS: _________
A REPRESENTATIVE OF PAYEE HAS EXPLAINED TO THE UNDERSIGNED THAT THE NOTE CONTAINS WORDING THAT WOULD PERMIT PAYEE TO ENTER JUDGMENT AGAINST THE UNDERSIGNED AT THE COURTHOUSE, WITHOUT NOTICE TO THE UNDERSIGNED AND WITHOUT OFFERING THE UNDERSIGNED AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT, AND THAT THE JUDGMENT MAY BE COLLECTED BY ANY LEGAL MEANS.
INITIALS: ____________
INITIALS: ____________
IN EXECUTING THE NOTE, THE UNDERSIGNED IS KNOWINGLY, UNDERSTANDINGLY, AND VOLUNTARILY WAIVING ITS RIGHTS TO RESIST THE ENTRY OF JUDGMENT AGAINST THE UNDERSIGNED AT THE COURTHOUSE, AND THE UNDERSIGNED IS CONSENTING TO THE CONFESSION OF JUDGMENT.
INITIALS: ____________
INITIALS: ____________
EACH UNDERSIGNED HEREBY CERTIFIES, FOR ITSELF ONLY, THAT ITS RESPECTIVE ANNUAL INCOME EXCEEDS TEN THOUSAND DOLLARS ($10,000.00), THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN THE UNDERSIGNED INITIALED AND SIGNED IT, AND THAT IT RECEIVED A COPY AT THE TIME OF SIGNING.
DIGITAL CINEMA DESTINATIONS CORP. By: __________________________ Name: A. Dale Mayo Title: President | DC CINEMA CENTERS, LLC By: __________________________ Name: A. Dale Mayo Title: Manager |
Dated as of ________________, 2012
For Promissory Note
Exhibit B
Form of Extended Closing Period Promissory Note
Exhibit C Form of Lock-Up Agreement Digital Cinema Destination Corp. Public Offering of Class A Common Stock , 2012 Dominick & Dominick LLC Maxim Group LLC As Representatives of the several Underwriters, c/o Dominick & Dominic LLC 150 East 52nd Street New York, N.Y. 10022 Ladies and Gentlemen: This letter (referred to herein as this “Lock-Up Agreement”) is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”), between Digital Cinema Destinations Corp., a Delaware corporation (the “Company”), and you as representatives of the Underwriters of an underwritten public offering of Class A common stock, $0.01 par value, of the Company. The shares of Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter collectively referred to as the “Common Stock.” The undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the Company by, among other things, raising additional capital for its operations. The undersigned acknowledges that you are relying on the representations and agreements of the undersigned contained in this letter in carrying out the Offering and in entering into the Underwriting Agreement with the Company with respect to the Offering. In order to induce you to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of Dominick & Dominick LLC, offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition, effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned) file, directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any shares of Common Stock of the Company (including, without limitation, any Directed Shares that the undersigned may purchase) or any securities convertible into or exercisable or exchangeable for such Common Stock, or publicly announce an intention to effect any such transaction, for a period of 180 days after the date of the Underwriting Agreement (the “Lock-Up Period”), other than shares of Common Stock disposed (i) of as bona fide gifts approved by Dominick & Dominick LLC and the recipient thereof agrees in writing with Dominick & Dominick LLC to be bound by the terms of this Lock-Up Agreement and confirms that he, she or it has been in compliance with the terms of this Lock-Up Agreement since the date hereof or (ii) by will in intestacy. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of shares of Common Stock or securities convertible into or exchangeable or exercisable for Common Stock held by the undersigned except in compliance with the foregoing restrictions. Notwithstanding the foregoing, if (1) during the last 17 days of the initial Lock-Up Period, the Company releases earnings results or material news or a material event relating to the Company occurs or (2) prior to the expiration of the initial Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be extended until the expiration of the 18-day period beginning on the date of release of the earnings results or material news, as applicable, unless Dominick & Dominick LLC waives, in writing, such extension. The undersigned hereby acknowledges and agrees that written notice of any waiver of the extension of the Lock-Up Period, if any, pursuant to the previous paragraph will be delivered by Dominick & Dominick LLC to the Company and that any such notice properly delivered will be deemed to have been given to, and received by, the undersigned. With respect to the Offering only, the undersigned waives any registration rights relating to registration under the Securities Act of 1933, as amended, of any Common Stock owned either of record or beneficially by the undersigned, including any rights to receive notice of the Offering. In addition, the undersigned agrees that it will not, without the prior written consent of Dominick & Dominick LLC, during the Lock-Up Period, as may be extended pursuant to the terms of this Lock-Up Agreement, make any demand for, or exercise any right with respect to, the registration of any shares of Common Stock or any securities convertible into or exchangeable or exercisable for shares of Common Stock. Notwithstanding anything to the contrary contained herein, the Seller may transfer Shares to an affiliate, stockholder or director of the Seller or any family member thereof, provided such transfer complies with Section 4(2) of the Securities Act of 1933 or the regulations promulgated thereunder. If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated. Yours very truly, [Signature of officer, director or major shareholder] [Name and address of officer, director or major shareholder] 
