EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
This Agreement and Plan of Merger and Reorganization (the "AGREEMENT")
is made as of March 31, 1997 by AMC Entertainment Inc., a Delaware corporation
("AMCE"), and ▇▇▇▇▇▇▇, Inc., a Missouri corporation ("DI"). This Agreement
constitutes a binding contract between AMCE and DI in accordance with the terms
hereof and the applicable provisions of both the Delaware General Corporation
Law and The General and Business Corporation Law of Missouri. The Agreement is
entered into for substantial business reasons which are more fully described in
the statements of actions taken by the respective Boards of Directors of the
parties whereby the Agreement was authorized, and the parties intend that the
merger contemplated by the Agreement shall constitute a reorganization in which
no taxable income, gain or loss is recognized pursuant to Section 368(a)(1)(A)
and related sections of the Internal Revenue Code of 1986, as amended (the "TAX
CODE"). The terms and conditions of the Agreement are as follows:
WITNESSETH:
WHEREAS, AMCE is a corporation duly organized and validly existing
under the laws of the State of Delaware, with authorized capital stock
consisting of (i) 45,000,000 shares of Common Stock, par value 66 2/3CENTS per
share ("AMCE COMMON STOCK"), 6,549,489 shares of which are issued and
outstanding, (ii) 30,000,000 shares of Class B Stock, par value 66 2/3CENTS
per share ("AMCE CLASS B STOCK"), 11,157,000 shares of which are issued and
outstanding, and (iii) 10,000,000 shares of Preferred Stock, par value 66
2/3CENTS per share ("AMCE PREFERRED STOCK"), of which 3,323,600 shares of $1.75
Cumulative Convertible Preferred Stock ("AMCE CONVERTIBLE PREFERRED STOCK") are
issued and outstanding; and
WHEREAS, DI is a corporation duly organized and validly existing under
the laws of the State of Missouri, with authorized capital stock consisting of
(i) 150,000 shares of Class A Stock, par value $100 per share ("DI CLASS A
STOCK"), 120,000 shares of which are issued and outstanding, and (ii) 50,000
shares of Class B Stock, par value $100 per share ("DI CLASS B STOCK"), 40,784
shares of which are issued and outstanding; and
WHEREAS, prior to the Merger (as defined herein) becoming effective,
DI has advised AMCE that DI intends to convert 6,141,343 shares of AMCE Class B
Stock into a like number of shares of AMCE Common Stock pursuant to the terms of
the AMCE Class B Stock; and
WHEREAS, the Special Committee of the Board of Directors of AMCE
composed of directors who are not officers or employees of AMCE formed for the
purpose of evaluating and negotiating the terms of the Merger (the "SPECIAL
COMMITTEE") has recommended that the full Board of Directors of AMCE approve and
adopt the Agreement and such Board has reviewed, approved and adopted this
Agreement and deemed it advisable and in the best interests of AMCE that DI be
merged into and with AMCE pursuant to the terms and conditions set forth herein;
and
2
WHEREAS, the Board of Directors of DI has reviewed and approved this
Agreement and deems it advisable and in the best interests of DI that DI be
merged into and with AMCE pursuant to the terms and conditions set forth herein;
and
WHEREAS, the Boards of Directors of AMCE and DI have directed that
this Agreement be submitted to the stockholders of AMCE and DI, respectively,
for their approval;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and covenants set forth herein, the parties hereto do hereby agree
and covenant as follows:
I. THE MERGER
1.1. NAMES OF CORPORATIONS. The names of the corporations proposing
to merge are:
AMC Entertainment Inc.
and
▇▇▇▇▇▇▇, Inc.
1.2. MERGER. At the Effective Time (as defined below), subject to
the terms and conditions of this Agreement and in accordance with applicable
law, AMCE and DI shall merge into a single corporation by DI merging with and
into AMCE (the "MERGER").
1.3. NAME OF SURVIVING CORPORATION. The name of AMCE, which is to be
the surviving corporation, shall not be changed as a result of the Merger.
1.4. CLOSING; EFFECTIVE TIME. Unless this Agreement has been
terminated under Section 6.4, a closing (the "CLOSING") shall take place as
promptly as practicable following satisfaction or waiver of the last of the
conditions set forth in Articles IV and V. The Merger shall become effective
immediately upon the filing of this Agreement, or a certificate of merger in
lieu thereof, with the Secretary of State of Delaware in accordance with
applicable law. The time of such effectiveness is referred to herein as the
"EFFECTIVE TIME". At the Closing, or as soon thereafter as practicable, the
parties shall cause the Merger to be consummated as provided in this
Section 1.4.
l.5. EFFECT OF MERGER. (a) At the Effective Time, the separate
existence of DI shall cease. The existence of AMCE shall continue unaffected
and unimpaired by the Merger, and AMCE shall after the Effective Time have all
of the rights, privileges, immunities and powers and shall be subject to all of
the duties and liabilities of a corporation organized under the Delaware General
Corporation Law.
(b) At the Effective Time, AMCE shall have and thereafter possess all
of the rights, privileges, immunities, powers and franchises, of a public as
well as of a private nature, of each of the merging corporations, and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares, and all other choses in action, and every
3
other interest of or belonging to or due to either of the merging corporations
shall be taken and deemed to be transferred to and vested or remain in AMCE
without further act or deed (and the title to any real estate, or any interest
therein, vested in either of the merging corporations shall not revert or be in
any way impaired by reason of the Merger).
(c) AMCE shall, upon the Effective Time and thereafter, be
responsible and liable for all the liabilities and obligations of each of the
merging corporations, and any claim existing or action or proceeding pending by
or against either of such corporations may be prosecuted to judgment as if the
Merger had not taken place or, in the case of DI, AMCE may be substituted in
place of DI. Neither the rights of creditors nor any liens upon the property of
either of the merging corporations shall be impaired by the Merger.
1.6. CONVERSION OF SHARES. (a) Prior to the Effective Time, DI shall
convert 6,141,343 shares of AMCE Class B Stock into a like number of shares of
AMCE Common Stock.
(b) At the Effective Time, by virtue of the Merger and without any
action on the part of AMCE, DI or the holder of any of the following securities:
(i) Each share of AMCE Common Stock issued and outstanding
immediately prior to the Effective Time, other than those shares owned
by DI, and each share of AMCE Common Stock held in the treasury of
AMCE immediately prior to the Effective Time, shall continue to be one
share of AMCE Common Stock.
(ii) Each share of AMCE Class B Stock issued and outstanding
immediately prior to the Effective Time, other than those shares owned
by DI, and each share of AMCE Class B Stock held in the treasury of
AMCE immediately prior to the Effective Time, shall continue to be one
share of AMCE Class B Stock.
(iii) Each share of AMCE Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time shall continue to
be one share of AMCE Convertible Preferred Stock.
(iv) Each other share of AMCE Preferred Stock, if any, issued
and outstanding immediately prior to the Effective Time shall continue
to be one share of AMCE Preferred Stock.
(v) Each share of AMCE Common Stock and AMCE Class B Stock
which immediately prior to the Effective Time is owned of record by DI
shall continue to be one share of AMCE Common Stock and AMCE Class B
Stock, respectively, and shall be held in the treasury of AMCE until
the Board of Directors of AMCE determines otherwise.
4
(vi) Each share of DI Class A Stock which immediately prior to
the Effective Time is owned of record by Harvard College ("HARVARD")
shall be converted into and become 32.142857 shares of AMCE Common
Stock.
(vii) Each share of DI Class A Stock issued and outstanding
immediately prior to the Effective Time, other than those shares owned
of record by Harvard, shall be converted into and become 32.142857
shares of AMCE Class B Stock.
(viii) Each share of DI Class B Stock which immediately prior to
the Effective Time is owned of record by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
individually, as Trustee of the 1992 ▇▇▇▇▇▇▇, Inc. Voting Trust dated
December 12, 1992 (the "1992 TRUST") and as Trustee under the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust Agreement dated August 14, 1989 (the "1989
TRUST"), shall be converted into and become 243.767528 shares of AMCE
Class B Stock.
(ix) Each share of DI Class B Stock which immediately prior to
the Effective Time is owned of record by any person other than
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the 1992 Trust or the 1989 Trust shall be
converted into and become 243.767341 shares of AMCE Common Stock.
(x) Each share of DI Class A Stock and DI Class B Stock held
in the treasury of DI shall be canceled and retired and no payment
shall be made with respect thereto.
(c) At the Effective Time, the holders of certificates representing
shares of DI Class A Stock and DI Class B Stock outstanding at such time shall
cease to have any rights with respect to such Stock and such holders' sole
rights shall be to receive the number of shares of AMCE Common Stock or AMCE
Class B Stock into which their shares of DI Class A Stock or DI Class B Stock
shall have been converted by the Merger as provided herein.
(d) No fraction of a share of AMCE Common Stock and AMCE Class B
Stock shall be issued in connection with the Merger but in lieu thereof each
holder of shares of DI Class A Stock and DI Class B Stock otherwise entitled to
a fraction of a share of AMCE Common Stock or AMCE Class B Stock shall be paid
by AMCE, as a convenience and not as a separately bargained for consideration,
an amount of cash equal to such fraction multiplied by the average of the high
and low reported prices of one share of AMCE Common Stock on the AMEX (as
defined in Section 2.1(n)) on the trading day immediately preceding the
Effective Time. No such holder shall be entitled to dividends or other rights
in respect of any fractional share.
1.7. EXCHANGE OF CERTIFICATES. After the Effective Time, each holder
of a certificate theretofore representing outstanding shares of DI Class A Stock
or DI Class B Stock, upon surrender of the same to AMCE's transfer agent (the
"TRANSFER AGENT"), shall be entitled to receive in exchange therefor
certificates representing the number of full shares of AMCE Common Stock or AMCE
Class B Stock into which the shares of DI Class A Stock or DI Class B Stock have
been converted pursuant to the provisions of Section 1.6 of this Agreement.
5
As soon as practicable after the Effective Time, the Transfer Agent shall send a
notice and transmittal form to each record holder of an outstanding certificate
which prior to the Effective Time evidenced shares of DI Class A Stock or DI
Class B Stock which shall have been converted into AMCE Common Stock or AMCE
Class B Stock pursuant to the provisions of Section 1.6 of this Agreement,
advising such stockholder of the terms of such conversion and the procedure for
surrendering to the Transfer Agent such certificate in exchange for certificates
evidencing AMCE Common Stock or AMCE Class B Stock. Until so surrendered, each
outstanding certificate which, prior to the Effective Time, represented DI
Class A Stock or DI Class B Stock (other than shares held in the treasury of DI)
will be deemed for all corporate purposes of AMCE to evidence ownership of the
number of full shares of AMCE Common Stock or AMCE Class B Stock into which the
shares of DI Class A Stock or DI Class B Stock represented thereby were
converted; provided, however, that, until outstanding certificates formerly
representing DI Class A Stock or DI Class B Stock are so surrendered, no
dividend or other distribution payable to holders of record of AMCE Common Stock
or AMCE Class B Stock as of any date subsequent to the Effective Time shall be
paid to the holders of such outstanding certificates in respect thereof. Upon
surrender of certificates of DI Class A Stock or DI Class B Stock, there shall
be paid to the record holder of the certificates of AMCE Common Stock or AMCE
Class B Stock, respectively, issued in exchange therefor (i) at the time of such
surrender, the amount of dividends theretofore payable with respect to such full
shares of AMCE Common Stock or AMCE Class B Stock as of any date subsequent to
the Effective Time which have not yet been paid to a public official pursuant to
abandoned property, escheat or similar laws and (ii) at the appropriate payment
date, the amount of dividends with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such shares of AMCE Common Stock or AMCE Class B Stock. No interest
shall be payable with respect to the payment of such dividends on surrender of
outstanding certificates. If any certificate evidencing shares of AMCE Common
Stock or AMCE Class B Stock is to be issued in a name other than that in which
the certificate surrendered in exchange therefor is registered, it shall be a
condition of the issuance thereof that the certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange pay to the Transfer Agent any transfer or other taxes
required by reason of the issuance of a Certificate for shares of AMCE Common
Stock or AMCE Class B Stock in any name other than that of the registered holder
of the certificate surrendered or establish to the satisfaction of the Transfer
Agent that such tax has been paid or is not payable.
1.8. CHANGES IN CAPITALIZATION. If, between the date of this
Agreement and the Effective Time, the outstanding shares of AMCE Common Stock or
AMCE Class B Stock shall be changed into a different number of shares or a
different class by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment, or a stock dividend thereon
shall be declared with a record date within such period, the number of shares of
AMCE Common Stock or AMCE Class B Stock into which the shares of DI Class A
Stock or DI Class B Stock will be converted shall be appropriately adjusted.
1.9. CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS, OFFICERS. The
Certificate of Incorporation and By-laws of AMCE shall not be changed by or as a
result of the Merger. The directors and officers of AMCE prior to the Merger
shall continue in such offices after the Merger.
6
1.10. FURTHER ACTION. Each of the merging corporations shall take
all actions and do all things necessary, proper, or advisable under the laws of
the States of Delaware and Missouri to consummate and make effective the Merger
contemplated herein; provided, the binding effect of this Agreement shall be
subject to its approval by the requisite vote of the stockholders of each of the
merging corporations, or to its approval by the written consent of the
stockholders of each of the merging corporations in lieu of a vote, and to the
approval by the holders of a majority of the outstanding shares of AMCE Common
Stock (other than DI, the 1992 Trust, the 1989 Trust, members of the ▇▇▇▇▇▇▇
Family (as defined below), spouses of the members of the ▇▇▇▇▇▇▇ Family,
children of members of the ▇▇▇▇▇▇▇ Family sharing the same household, and
directors and officers of AMCE (the "▇▇▇▇▇▇▇ STOCKHOLDERS")) present and voting
at the AMCE Stockholder Meeting (as hereinafter defined), in each case, in
accordance with the requirements of the laws of the States of Delaware and
Missouri, respectively. As used herein, the "▇▇▇▇▇▇▇ FAMILY" shall mean ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
II. REPRESENTATIONS AND WARRANTIES
2.1. REPRESENTATIONS AND WARRANTIES OF DI. DI represents and warrants
to AMCE as follows:
(a) ORGANIZATION AND QUALIFICATION. DI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Missouri, has all necessary power and authority to own its properties and to
carry on its business as now owned and operated by it, and is duly qualified to
do business and is in good standing as a foreign corporation in each state where
the nature of its business or of its properties makes such qualification
necessary.
(b) CAPITAL STOCK. The authorized capital stock of DI consists of
150,000 shares of DI Class A Stock, of which 120,000 shares are issued and
outstanding, and 50,000 shares of DI Class B Stock, of which 40,784 shares are
issued and outstanding. All outstanding shares of DI Class A Stock and DI Class
B Stock have been duly authorized, validly issued, fully paid and nonassessable
and have not been issued in violation of any preemptive rights or of any federal
or state securities law. Immediately prior to the Effective Time, there will be
no more than 120,000 shares of DI Class A Stock and 40,784 shares of DI Class B
Stock issued and outstanding. There are no outstanding subscriptions, options,
rights, warrants, convertible securities or other agreements or commitments
obligating DI to issue, pledge or to transfer from treasury any additional
shares of its capital stock of any class. Neither DI nor any Subsidiary has
agreed to register the sale of any securities under the Securities Act (as
hereinafter defined).
(c) SUBSIDIARIES. Schedule 2.1(c) contains a true and complete list
of all DI's subsidiaries (other than AMCE and its subsidiaries) (each such
subsidiary of DI shall hereinafter separately be called a "SUBSIDIARY" and
collectively called the "SUBSIDIARIES") as of the date hereof. As of the date
hereof, except as set forth on Schedule 2.1(c), DI does not own directly or
indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, business, trust or other entity, except the
Subsidiaries. Prior to the Effective Time, DI's entire interest in all of the
Subsidiaries shall be distributed to DI's stockholders in accordance with the DI
Pre-Merger Action Plan attached hereto as Exhibit A (the "PRE-MERGER ACTION
PLAN"). At the Effective Time, DI will not own, directly or indirectly, any
interest or investment (whether equity
7
or debt) in any corporation, partnership, business, trust or other entity other
than AMCE Common Stock and AMCE Class B Stock.
(d) FINANCIAL STATEMENTS. DI has previously furnished to AMCE the
consolidated balance sheet of DI and its Subsidiaries as of March 28, 1996,
together with the related statements of income, stockholders equity and cash
flow, for the fiscal year ending on such date, certified by Coopers & ▇▇▇▇▇▇▇
L.L.P., independent certified public accountants, whose opinions with respect to
such consolidated financial statements are included therewith. DI has also
previously furnished to AMCE the unaudited consolidated balance sheet of DI and
its Subsidiaries as of December 26, 1996, together with the related unaudited
statement of income for the 39-week period ending on such date, certified by the
President of DI. The foregoing financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
(except as may be indicated therein or on the notes thereto and except that the
unaudited interim financial statements do not include footnote disclosures) and
fairly present the consolidated financial position and consolidated results of
the operations of DI and its Subsidiaries as at and for the dates and periods
shown thereon, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments.
(e) NO MATERIAL CHANGE. Except as set forth on Schedule 2.1(e) and
in the Pre-Merger Action Plan, since December 26, 1996, there has not been any:
(i) Material transaction by DI or any of its Subsidiaries;
(ii) Capital expenditures by DI or any of its Subsidiaries;
(iii) Material adverse change in the financial condition,
liabilities, assets, business or prospects of DI or of DI and its
Subsidiaries taken as a whole;
(iv) Any unfair or unlawful employment or labor practice, claim
or charge, organizing effort, or conduct which might materially
interfere with or disrupt operations of DI or of DI and its
Subsidiaries taken as a whole;
(v) Declaration, setting aside or payment of a dividend or
other distribution in respect of the capital stock of DI or any of its
Subsidiaries;
(vi) Direct or indirect redemption, purchase or other
acquisition by DI or any of its Subsidiaries of any shares of such
capital stock;
(vii) Increase in the salary or other compensation payable or
to become payable by DI or any of its Subsidiaries to any of such
corporation's officers or directors, or the declaration, payment, or
commitment or obligation of any kind for the payment by DI or any of
its Subsidiaries of a bonus or other additional salary or compensation
to any such person;
(viii) Sale or transfer of any asset of DI or any of its
Subsidiaries;
(ix) Loan by DI or any of its Subsidiaries to any person or
entity or guaranty by DI or any of its Subsidiaries of any loan;
8
(x) Mortgage, pledge or other encumbrance of any asset of DI or
any of its Subsidiaries;
(xi) Waiver or release of any right or claim of DI or any of its
Subsidiaries;
(xii) Any change in any accounting principle or election used for
financial reporting or tax purposes by DI or any Subsidiary; or
(xiii) Agreement by DI or any of its Subsidiaries to do any of the
things described in the foregoing clauses.
(f) LIABILITIES. At the Effective Time DI will not have any material
debt, liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due.
(g) TAXES. Each of DI and its Subsidiaries has (i) filed all returns,
declarations, reports, information returns and statements of whatsoever kind
("TAX RETURNS") in respect of all federal, state, local, foreign and other
taxes, including interest, penalties and additions to tax with respect thereto
("TAXES"), that they are required to file through the date hereof and shall
prepare and file all such Tax Returns required to be filed after the date hereof
and on or before the Effective Time and (ii) paid or provided for the payment of
all Taxes due and owing for the periods covered by such Tax Returns and all
Taxes, if any, required to be paid for which no return is required. True copies
of all federal, state, local and foreign Tax Returns relating to DI's last three
taxable years ended March 28, 1996 have been delivered to AMCE. Neither DI nor
any Subsidiary has been audited by the Internal Revenue Service or any state,
local or foreign taxing jurisdiction since the year ended April 1, 1993, and no
agreements or consents extending the period during which any Taxes may be
assessed or collected are now in force. As of the date hereof, no material
adjustments have been proposed by the Internal Revenue Service or by any other
taxing authority with respect to any open tax years or tax returns.
(h) PROPERTIES AND ASSETS. DI and its Subsidiaries do not own or
hold any interest in any real property or tangible assets. At the Effective
Time, DI will have no right, title or interest in any property or assets (other
than AMCE Common Stock and AMCE Class B Stock).
(i) LEASES. Except as set forth on Schedule 2.2(i), DI and its
Subsidiaries are not parties to or bound by (whether as lessor, lessee or
guarantor) any lease of real property or personalty.
(j) ACCURATE BOOKS AND RECORDS. The books and records of DI and its
Subsidiaries contain a complete and accurate description of all transactions of
DI and the Subsidiaries.
(k) INSURANCE. All premiums due and payable prior to the date hereof
on the life insurance policies reflected in Schedule 2.1(k) ("LIFE INSURANCE
POLICIES") have been paid and
9
AMCE will have no liability for premiums on such Life Insurance Policies. All
outstanding loans made under the Life Insurance Policies and the net cash
surrender value thereof, net of policy loans, as of December 31, 1996 are set
forth on Schedule 2.1(k).
(l) COMPLIANCE WITH LAW. DI and its Subsidiaries have substantially
complied with, and are not in violation of, any applicable federal, state or
local statutes, laws or regulations (including, without limitation, any
applicable building, zoning or other law, ordinance or regulation).
(m) LITIGATION. (i) There is no suit, action, arbitration, or legal,
administrative or other proceeding or governmental investigation pending, or to
the best knowledge of DI and its Subsidiaries, threatened against DI or any of
its Subsidiaries, (ii) neither DI nor any of its Subsidiaries is in default with
respect to any order, writ, court, department, agency or instrumentality
applicable to it, and (iii) neither DI nor any of its Subsidiaries is presently
engaged in any legal action to recover monies due or damages sustained by it.
(n) NO CONSENTS; NO DEFAULT. Except as may be required by the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "EXCHANGE ACT"), the Securities Act of 1933, as amended, and the
rules and regulations thereunder (the "SECURITIES ACT"), state securities laws,
The General and Business Corporation Law of Missouri, the Delaware General
Corporation Law and the rules and regulations of the American Stock Exchange ,
Inc. (the "AMEX") and the Pacific Stock Exchange, respectively, there is no
requirement applicable to DI or any of the Subsidiaries to make any filing with,
or to obtain any permit, authorization, consent or approval of, any governmental
or regulatory authority as a condition to the lawful consummation by DI of the
transactions contemplated by this Agreement and the Pre-Merger Action Plan.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated in this Agreement and the Pre-Merger Action Plan will
result in or constitute any of the following:
(i) A conflict or breach of any provisions of the Articles of
Incorporation or By-laws (or other similar governing instruments) of
DI or any of the Subsidiaries;
(ii) A default or an event that, with notice or lapse of time
or both, would be a default, under any license, lease, franchise,
promissory note, conditional sales contract, commitment, indenture,
mortgage, deed of trust or other agreement, instrument or arrangement
to which DI or any of its Subsidiaries is a party or by which DI, its
Subsidiaries or any of their respective properties may be bound, or a
violation of any applicable law or governmental regulation;
(iii) An event that would permit any party to terminate any
agreement or to accelerate the maturity of any indebtedness or other
obligation of DI or any of its Subsidiaries; or
(iv) The creation or imposition of any lien, charge or
encumbrance on any of the properties of DI or any of its Subsidiaries.
10
(o) AUTHORIZATION; VALID AGREEMENT. DI has the corporate power and
authority to execute and deliver this Agreement and, subject to receiving the
requisite stockholder approval, to perform its obligations hereunder. The
execution and delivery of this Agreement by DI has been duly authorized by its
Board of Directors and no further corporate authorization is required for the
consummation of the transactions contemplated hereby or by the Pre-Merger Action
Plan, except for the approval of the stockholders of DI as required under The
General and Business Corporation Law of Missouri. This Agreement has been duly
and validly executed and delivered by DI and constitutes a valid and binding
agreement of DI, enforceable against DI in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally and equitable
principles.
(p) NO MATERIAL MISSTATEMENTS OR OMISSIONS. None of the
representations or warranties made by DI in this Agreement and no statement by
DI or, to the best knowledge of DI, any other person, contained in any document,
certificate or other writing furnished by DI to AMCE contains any untrue
statement of a material fact or omits any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading.
(q) FINDERS AND INVESTMENT BANKERS. None of DI, any of its
Subsidiaries or any of such corporations' respective officers or directors has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
(r) EMPLOYEE BENEFITS.
(i) There are no Company Benefit Plans (as defined below).
Neither DI nor any of its Subsidiaries nor any ERISA Affiliate (as
defined below) of either DI or any of its Subsidiaries maintains,
sponsors, contributes to or is required to contribute to an Employee
Benefit Plan (as defined below) or a fringe benefit plan subject to
Section 6039D of the Tax Code, and neither DI nor any of its
Subsidiaries nor any ERISA Affiliate of either DI or any of its
Subsidiaries has any liability (contingent or otherwise) arising under
or with respect to any such plan.
(ii) (A) None of the employees of DI or any Subsidiary is
represented in his or her capacity as an employee of such company by
any labor organization; (B) neither DI or any Subsidiary has
recognized any labor organization nor has any labor organization been
elected as the collective bargaining agent of any of their employees,
nor has DI or any Subsidiary signed any collective bargaining
agreement or union contract recognizing any labor organization as the
bargaining agent of any of their employees; and (C) as of the date
hereof, there is no active or current union organization activity
involving the employees of DI or any Subsidiary.
(iii) For the purposes of this Agreement: (A) the term "Company
Benefit Plan" shall include all employee benefit arrangements or
payroll practices,
11
including without limitation, severance pay, sick leave, vacation pay,
salary continuation for disability, scholarship programs, stock option
or restricted stock plans maintained by DI or any Subsidiary (whether
formal or informal, whether for the benefit of a single individual or
for more than one individual and whether for the benefit of current or
former employees or their beneficiaries) on behalf of DI (or any
Subsidiary) or any of the employees of DI (or any Subsidiary) or to
which or under which or pursuant to which DI (or any Subsidiary) has
contributed or is obligated to make contributions on behalf of DI (or
any Subsidiary) or any employees of DI (or any Subsidiary); (B) the
term "Employee Benefit Plan" shall have the meaning ascribed to such
term by section 3(3) of ERISA; (C) the term "ERISA" shall refer to the
Employee Retirement Income Security Act of 1974, as amended; and
(D) the term "ERISA AFFILIATE" shall refer to any trade or business
(whether or not incorporated) under common control with any person
within the meaning of Section 414 (b), (c), (m) or (o) of the Tax Code
) (provided that AMCE and its subsidiaries shall not be deemed to be
ERISA Affiliates of DI).
(iv) Schedule 2.1(r) sets forth a true and complete list of all
employees of DI and its Subsidiaries and their current rates of
compensation.
(s) CONTRACTS AND AGREEMENTS. Schedule 2.1(s) identifies each
contract, lease, guarantee or other agreement (a "CONTRACT") in effect on the
date of this Agreement to which DI or any of its Subsidiaries is a party or by
which any of their assets or properties are bound. None of DI or the
Subsidiaries are in default under any of such contracts, agreements,
understandings or leases and each is enforceable against the other party thereto
in accordance with its terms. There have been delivered or made available to
AMCE true and complete copies of all of the Contracts. At the Effective Time,
the only Contract binding upon DI will be this Agreement.
(t) ADEQUACY OF RESERVES. Any reserves set forth on the consolidated
financial statements of DI for the 39-week period ended December 26, 1996, are
adequate and sufficient to cover all liabilities with respect to which such
reserves were established.
(u) AGREEMENTS WITH INSIDERS. Set forth in Schedule 2.1(u) is a true
and complete list of every Contract to which DI or any Subsidiary is a party or
bound or by which any of the assets or properties of DI or any Subsidiary is
bound and (i) to which any Insider (as defined below) or Affiliate (as defined
below) of DI is a party or (ii) which benefits any Insider or Affiliate of DI.
For purposes of this Agreement:
(A) "INSIDER" shall mean each ▇▇▇▇▇▇▇ Stockholder or any
Associate or Relative of a ▇▇▇▇▇▇▇ Stockholder;
(B) an "AFFILIATE" of a specified person is a person that
directly or indirectly, though one or more intermediaries, controls,
or is controlled by, or is under common control with, the person
specified (other than AMCE and its majority-owned subsidiaries);
12
(C) the term "ASSOCIATE" used to indicate a relationship with
any person means (I) any corporation, partnership, joint venture or
other entity of which such person is an officer or partner or is
directly or indirectly, through one or more intermediaries, the
beneficial owner of 10% or more of (1) any class or type of equity
securities or other profits interest or (2) the combined voting power
of interests ordinarily entitled to vote for management or otherwise
(other than AMCE and its majority-owned subsidiaries), and (II) any
trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in
a similar fiduciary capacity; and
(D) a "RELATIVE" of a person shall mean such person's spouse,
such person's parents, sisters, brothers, children and the spouses of
the foregoing, and any member of the immediate household of the
foregoing.
2.2. REPRESENTATIONS AND WARRANTIES OF AMCE. AMCE represents and
warrants to DI as follows:
(a) ORGANIZATION AND QUALIFICATION. AMCE is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) CAPITAL STOCK. On the date hereof the authorized capital stock
of AMCE consists of (i) 45,000,000 shares of AMCE Common Stock, of which
6,549,489 shares are issued and outstanding, (ii) 30,000,000 shares of AMCE
Class B Stock, of which 11,157,000 shares are issued and outstanding and
(iii) 10,000,000 shares of AMCE Preferred Stock, of which 3,323,600 shares of
AMCE Convertible Preferred Stock are issued and outstanding. At the Effective
Time all of the shares of AMCE Common Stock and AMCE Class B Stock issued in the
Merger pursuant to Section 1.6(b) hereof will be duly authorized, validly
issued, fully paid and nonassessable and not issued in violation of any
preemptive rights of AMCE's stockholders.
(c) ENFORCEABILITY OF AGREEMENT. AMCE has the corporate power and
authority to execute and deliver this Agreement and, subject to receiving the
requisite approval of AMCE's stockholders, to perform its obligations hereunder.
This Agreement has been duly and validly executed and delivered by AMCE and
constitutes the valid and binding obligations of AMCE, enforceable against it in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws effecting
creditors' rights generally and equitable principles. The execution, delivery
and performance of this Agreement and the transactions contemplated by this
Agreement have been duly authorized by the Board of Directors of AMCE.
(d) NO VIOLATION. Assuming compliance with the requirements of the
Exchange Act, the Securities Act, state securities laws, The General and
Business Corporation Law of Missouri and the Delaware General Corporation Law
and the rules and regulations of the AMEX and the Pacific Stock Exchange,
respectively, none of the execution or delivery of this Agreement by AMCE, the
consummation by AMCE of the transactions contemplated hereby or the fulfillment
of the terms hereof will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under the organizational
documents of AMCE or under
13
any material agreement or instrument under which AMCE is obligated, or violate
any law to which AMCE is subject.
2.3. REPRESENTATIONS AND WARRANTIES. All representations, warranties
and covenants made by DI contained in this Agreement and the schedules hereto
and any certificate, instrument or document delivered pursuant to this Agreement
or in connection with the transactions contemplated hereby shall be deemed
material and to have been relied upon by the parties, notwithstanding any
investigation made by AMCE.
III. COVENANTS AND AGREEMENTS
3.1. AFFIRMATIVE COVENANTS. Between the date hereof and the Effective
Time, except as otherwise contemplated by the Pre-Merger Action Plan, DI shall
conduct its business in the ordinary course as heretofore conducted. DI shall,
and shall cause any Subsidiary to, afford to officers, employees, counsel,
accountants and other authorized representatives of AMCE ("REPRESENTATIVES"), in
order to evaluate the transactions contemplated by this Agreement, reasonable
access, during normal business hours throughout the period prior to the
Effective Time to its properties, books and records (including, without
limitation, the work papers of independent accountants) and, during such period,
shall, and shall cause any Subsidiary to, furnish promptly to such
Representatives all information concerning its business, properties and
personnel as may reasonably be requested, provided that no investigation
pursuant to this Section 3.1 shall affect or be deemed to modify any of the
respective representations or warranties made by DI.
3.2. NEGATIVE COVENANTS. Between the date hereof and the Effective
Time, except as contemplated by the Pre-Merger Action Plan, DI shall not:
(a) Amend its certificate of incorporation, articles of
incorporation, by-laws, or other charter documents; make any change in its
authorized, issued or outstanding capital stock; issue any shares of capital
stock; grant any stock options or right to acquire shares of any class of its
capital stock or any security convertible into any class of capital stock;
purchase, redeem, retire or otherwise acquire any shares of any class of its
capital stock or any security convertible into any class of its capital stock;
or agree to do any of the foregoing;
(b) Declare, set aside or pay any dividend or other distribution in
respect of any class of its capital stock;
(c) Adopt, enter into, or amend any employment contract or any bonus,
stock option, profit sharing, pension, retirement, incentive, or similar
employee benefit program or arrangement or grant any salary or wage increase;
(d) Incur or guarantee any indebtedness for borrowed money or
guarantee any other obligation of any other person;
(e) Pay or incur any obligation or liability, absolute or contingent,
other than liabilities incurred in the ordinary and usual course of business;
14
(f) Mortgage, pledge or subject to lien or other encumbrance any of
its properties or assets;
(g) Sell or transfer any of its properties or assets or cancel,
release or assign any indebtedness owed to it or any claims held by it;
(h) Make any investments of a capital nature either by property
transfers, or otherwise, or purchase any property or assets;
(i) Enter into or amend any material agreement;
(j) Merge or consolidate with any other corporation, acquire any
stock or acquire any assets of any other person, corporation or other business
organization, or enter into any discussions with any person concerning, or agree
to do, any of the foregoing; or
(k) Reorganize, restructure, recapitalize, liquidate or file a
voluntary petition in bankruptcy or enter into any composition with its
creditors or file a voluntary winding up petition.
3.3. REASONABLE EFFORTS. DI and AMCE shall: (i) promptly make their
respective filings and thereafter make any other submissions required under all
applicable laws with respect to the Merger and the other transactions
contemplated hereby and (ii) use their respective reasonable efforts to promptly
take, or cause to be taken, all other actions and do, or cause to be done, all
other things necessary, proper or appropriate to consummate and make effective
the transactions contemplated by this Agreement.
3.4. PUBLICITY. Except as may be required by applicable law or any
listing agreement with a national securities exchange (or similar agreement), DI
and AMCE agree that they will consult with each other concerning any proposed
press release or public announcement pertaining to the Merger.
3.5. REPRESENTATIONS AND WARRANTIES. Neither DI nor AMCE will, or
will allow any of their respective subsidiaries (other than, in the case of DI,
AMCE) to, take any action that would cause any of the representations and
warranties set forth herein not to be true and correct in all material respects
at and as of the Effective Time.
3.6. FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of AMCE will be authorized to execute and deliver, in the
name and on behalf of DI, any deeds, bills of sale, assignments or assurances
and to take and do, in the name and on behalf of DI, any other actions and
things to vest, perfect or confirm of record or otherwise in AMCE any and all
right, title and interest in, to and under any of the rights, properties or
assets of DI acquired or to be acquired by AMCE as a result of, or in connection
with, the Merger.
3.7 NOTIFICATION OF CERTAIN MATTERS. Between the date hereof and the
Effective Time, each of AMCE and DI will give prompt notice in writing to the
other of: (i) any information that indicates that any representation and
warranty contained herein was not true and correct as of the date hereof or will
not be true and correct as of the Effective Time, (ii) the
15
occurrence, or failure to occur, of any event which occurrence or failure to
occur will result, or has a reasonable prospect of resulting, in the failure
to satisfy a condition specified in Articles IV or V hereof, (iii) any notice
or other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement, (iv) any notice or other communication from
any governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement, or (v) any actions, suits,
claims, investigations or proceedings commenced or, to its knowledge,
threatened against AMCE or DI or any Subsidiaries or which relate to the
Merger or the consummation of the transactions contemplated by this Agreement
or the Pre-Merger Action Plan.
3.8 FILING. DI and AMCE agree that:
(i) AMCE shall prepare and file with the Securities and
Exchange Commission (the "SEC") as soon as is reasonably practicable a
registration statement on form S-4 (or another appropriate form) (the
"REGISTRATION STATEMENT") and preliminary proxy materials with respect
to the Merger, and use all reasonable efforts to have the Registration
Statement declared effective by the SEC under the Securities Act and
the preliminary proxy materials cleared by the SEC under the Exchange
Act;
(ii) AMCE and DI shall take all such action as may be required
under state blue-sky or securities laws in connection with the
transactions contemplated by this Agreement;
(iii) AMCE and DI shall cooperate with one another in determining
whether any filings are required to be made or consents required to be
obtained in any foreign jurisdiction or under the regulatory laws of
any state prior to the Effective Time in connection with the
consummation of the transactions contemplated by this Agreement, and
in making any such filings promptly and in seeking to obtain timely any
such consents; and
(iv) AMCE shall use its reasonable efforts to have listed for
trading on the AMEX and, if AMCE Common Stock is still listed on the
Pacific Stock Exchange, on the Pacific Stock Exchange, the AMCE Common
Stock to be issued pursuant to the Merger.
3.9 PROXY STATEMENT. DI covenants and agrees with AMCE that at the
time the Registration Statement (including the definitive proxy materials
contained therein (the "PROXY STATEMENT") and all other related proxy soliciting
material filed with the SEC) or any post-effective amendment thereto becomes
effective, and at all times subsequent to such effectiveness up to and including
the Effective Time, any information regarding DI, any Insider or any Affiliate
of DI set forth in the Registration Statement, any amendments or supplements
thereto, the Proxy Statement and in any other proxy soliciting material to be
used by AMCE and DI in connection with the transactions contemplated hereby,
16
(i) will comply as to form in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules
and regulations of the SEC thereunder; and
(ii) will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements made therein not misleading.
3.10 PRE-MERGER ACTION PLAN. DI shall cause all actions contemplated
by the Pre-Merger Action Plan to occur at the times contemplated by the
Pre-Merger Action Plan.
IV. AMCE CONDITIONS OF MERGER
The obligations of AMCE to consummate the Merger are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions,
each of which may be waived by AMCE as provided herein except as otherwise
required by applicable law:
4.1. STOCKHOLDER APPROVAL. The Merger shall have been approved by the
affirmative vote of the holders of the requisite number of the outstanding
shares of AMCE Common Stock, AMCE Class B Stock, DI Class A Stock and DI Class B
Stock, and, in addition, shall have been approved by the holders of a majority
of the outstanding shares of AMCE Common Stock (excluding the ▇▇▇▇▇▇▇
Stockholders) present and voting at the meeting of stockholders called to
consider the Merger (the "AMCE STOCKHOLDER MEETING").
4.2. DI CORPORATE ACTION. All corporate action necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the Merger and the transactions contemplated hereby and by the Pre-Merger
Action Plan shall have been duly and validly taken by DI.
4.3. REGISTRATION OF AMCE COMMON STOCK AND AMCE CLASS B STOCK. Prior
to the first date on which the Proxy Statement is mailed to AMCE stockholders,
the SEC shall have declared the Registration Statement effective and, at or
prior to the time required, any required approvals of state securities
administrators shall have been obtained. At the Effective Time, no stop order
or similar restraining order shall have been threatened or entered by the SEC or
any state securities administrator.
4.4. AMEX LISTING. The shares of AMCE Common Stock to be issued
pursuant to the Merger shall have been approved for listing by the AMEX for
trading on the AMEX and, if AMCE Common Stock is still listed on the Pacific
Stock Exchange, such shares shall have been approved for listing for trading on
such exchange.
4.5. GOVERNMENTAL FILINGS AND CONSENTS. All governmental filings
required to be made prior to the Effective Time with, and all governmental
consents required to be obtained prior to the Effective Time from, governmental
and regulatory authorities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and by
the Pre-Merger Action Plan shall have been made or obtained.
17
4.6. CONSENTS OF THIRD PARTIES. DI and AMCE shall have received all
requisite consents, approvals and agreements of third parties necessary to
ensure that neither the Merger nor any transactions contemplated herein or by
the Pre-Merger Action Plan shall violate any provision of any material
agreement, instrument, order, judgment or decree to which DI or any of its
Subsidiaries or AMCE is a party or by which any of them or their property may be
bound, or shall give rise to any right to accelerate any material indebtedness
of DI or any of its Subsidiaries or AMCE.
4.7. LITIGATION. There shall be no litigation, proceedings or actions
pending or threatened concerning the Merger that in the judgment of the Board of
Directors of AMCE acting with the recommendation of the Special Committee
renders consummation of the Merger inadvisable.
4.8. DISSENTING STOCK. No dissenters' rights shall have been
exercised by the holders of any shares of DI Class A Stock or DI Class B Stock.
4.9. STOCK AGREEMENT. The ▇▇▇▇▇▇▇ Family, the 1992 Trust, the 1989
Trust and Delta Properties, Inc. shall have entered into a Stock Agreement with
AMCE in form and substance identical to EXHIBIT B attached hereto (the "STOCK
AGREEMENT"), and such agreement shall remain in full force and effect at the
Effective Time.
4.10. REGISTRATION AGREEMENT. The ▇▇▇▇▇▇▇ Family, the 1992 Trust,
the 1989 Trust and Delta Properties, Inc. shall have entered into a Registration
Agreement (the "REGISTRATION AGREEMENT") with AMCE in form and substance
identical to EXHIBIT C attached hereto and such agreement shall remain in full
force and effect at the Effective Time.
4.11. INDEMNIFICATION AGREEMENT. The ▇▇▇▇▇▇▇ Family, the 1992 Trust,
the 1992 Trust and Delta Properties, Inc. shall at the time and on the date
this Agreement is executed and delivered have executed and delivered to AMCE
an Indemnification Agreement (the "INDEMNIFICATION AGREEMENT") in form and
substance identical to EXHIBIT D attached hereto and such agreement shall remain
in full force and effect at the Effective Time.
4.12 HARVARD CONSENT. Harvard shall have executed and delivered to
AMCE an instrument in form and substance identical to EXHIBIT E, and such
instrument shall remain in full force and effect at the Effective Time.
4.13. FAIRNESS OPINION. AMCE shall have received from ▇▇▇▇▇▇ ▇▇▇▇
Incorporated an opinion in form and substance satisfactory to AMCE confirming
the fairness of the Merger consideration to AMCE from a financial point of view.
4.14. AUDITORS' LETTER. AMCE shall have received from Coopers &
▇▇▇▇▇▇▇ L.L.P., certified public accountants, "comfort letters" dated the date
of mailing of the Proxy Statement and the date on which the Effective Time
occurs covering matters customary to transactions similar to the Merger in form
and substance satisfactory to AMCE.
4.15. REPRESENTATION AND WARRANTIES. The representations and
warranties of DI set forth in Article II hereof shall be true and correct in all
material respects as of the date of
18
this Agreement and (having been deemed to be made again at and as of the
Effective Time) as of the Effective Time as though made as of the Effective
Time, except for those made as of a specified date, which shall remain true and
correct as of such date, and except as otherwise contemplated by this Agreement,
and the President of DI shall certify to that effect to AMCE.
4.16. PERFORMANCE OF OBLIGATIONS. DI shall have performed in all
material respects all obligations required to be performed by it under this
Agreement prior to the Effective Time, and AMCE shall have received a
certificate signed by the Chief Executive Officer, the President or a Vice
President of DI to that effect.
4.17. TAX OPINION. AMCE shall have received the opinions of ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, LLP in form satisfactory to AMCE to the effect that, for federal income
tax purposes, assuming consummation of the Merger in accordance with this
Agreement, the Merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Tax Code and no income, gain or loss will be
recognized by AMCE or DI as a result of the Merger, which opinions shall be
dated within two days of the date of the Proxy Statement and the date of the
Merger.
4.18. OPINION OF COUNSEL. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Weary & ▇▇▇▇▇▇▇▇
▇.▇. shall have furnished to AMCE and the Special Committee its opinion as at
the date of the Closing in form and substance and as to such matters as are
reasonably satisfactory to AMCE.
4.19. CONVERSION OF SHARES BY DI. DI shall have converted 6,141,343
shares of AMCE Class B Stock into a like number of shares of AMCE Common Stock.
V. DI CONDITIONS OF MERGER
The obligations of DI to consummate the Merger are subject to the
satisfaction at or prior to the Closing, of each of the following conditions,
each of which may be waived by DI as provided herein except as otherwise
required by applicable law.
5.1. STOCKHOLDER APPROVAL. The Merger shall have been approved by the
affirmative vote of the holders of the requisite number of the outstanding
shares of AMCE Common Stock, AMCE Class B Stock, DI Class A Stock and DI Class B
Stock and, in addition, shall have been approved by the holders of a majority of
the outstanding shares of AMCE Common Stock (excluding the ▇▇▇▇▇▇▇ Stockholders)
present and voting at the AMCE Stockholders Meeting.
5.2 AMCE CORPORATE ACTION. All corporate action necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the Merger and the transactions contemplated hereby shall have
been duly and validly taken by AMCE.
5.3. REGISTRATION OF AMCE COMMON STOCK AND AMCE CLASS B STOCK. Prior
to the first date on which the Proxy Statement is mailed to AMCE stockholders,
the SEC shall have declared the Registration Statement effective and, at or
prior to the time required, any required approvals of state securities
administrators shall have been obtained. At the Effective
19
Time, no stop order or similar restraining order shall have been threatened or
entered by the SEC or any state securities administrator.
5.4. AMEX LISTING. The AMCE Common Stock to be issued pursuant to the
Merger shall have been approved for listing by the AMEX for trading on the AMEX
and, if AMCE Common Stock is still listed on the Pacific Stock Exchange, such
shares shall have been approved for listing for trading on such Exchange.
5.5. GOVERNMENTAL FILINGS AND CONSENTS. All governmental filings
required to be made prior to the Effective Time with, and all governmental
consents required to be obtained prior to the Effective Time from, governmental
and regulatory authorities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and by
the Pre-Merger Action Plan shall have been made or obtained.
5.6. CONSENTS OF THIRD PARTIES. AMCE shall have received all
requisite consents, approvals and agreements of third parties necessary to
ensure that neither the Merger nor any transactions contemplated herein or by
the transactions contemplated by the Pre-Merger Action Plan shall violate any
provision of any material agreement, instrument, order, judgment or decree to
which AMCE or any of its subsidiaries is a party or by which any of them, or
their property, may be bound, or shall give rise to any right to accelerate any
material indebtedness of AMCE or any of its subsidiaries.
5.7. LITIGATION. There shall be no litigation, proceedings or actions
pending or threatened concerning the Merger that in the judgment of the Board of
Directors of DI renders consummation of the Merger inadvisable.
5.8. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of AMCE set forth in Article II hereof shall be true and correct in
all material respects as of the date of this Agreement and as of the Effective
Time as though made on and (having been deemed to be made again at and as of the
Effective Time) as of the Effective Time, except for those made as of a
specified date, which shall remain true and correct of such date, and, except as
otherwise contemplated by this Agreement, and the President, Chief Executive
Officer or a Vice President of AMCE shall certify to that effect to the other
party.
5.9. PERFORMANCE OF OBLIGATIONS. AMCE shall have performed in all
material respects all obligations required to be performed by it under this
Agreement prior to the Effective Time, and DI shall have received a certificate
signed by the Chief Executive Officer, the President or a Vice President of AMCE
to that effect.
5.10. TAX OPINION. DI and its shareholders shall have received the
opinions of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP in form reasonably satisfactory to DI to
the effect that, for federal income tax purposes, assuming consummation of the
Merger in accordance with this Agreement, (i) the Merger will constitute a
reorganization within the meaning of Section 368(a)(1)(A) of the Tax Code and
(ii) except for cash received in lieu of fractional shares or in payment of
Credit Amounts (as defined in the Indemnification Agreement), no income, gain or
loss will be recognized by DI or its shareholders as a result of the Merger,
which opinions shall be dated within two days of the date of the Proxy Statement
and the date of the Merger.
20
5.11 REGISTRATION AGREEMENT. AMCE shall have entered into the
Registration Agreement, and the Registration Agreement shall remain in full
force and effect at the Effective Time.
5.12. STOCK AGREEMENT. AMCE shall have entered into the Stock
Agreement and such agreement shall remain in full force and effect at the
Effective Time.
5.13. INDEMNIFICATION AGREEMENT. AMCE shall have entered into the
Indemnification Agreement and such agreement shall remain in full force and
effect at the Effective Time.
5.14 HARVARD CONSENT. Harvard shall have executed and delivered to
AMCE an instrument in form and substance identical to EXHIBIT E, and such
instrument shall remain in full force and effect at the Effective Time.
VI. AMENDMENT, DEFERRAL, TERMINATION AND SURVIVAL
6.1. AMENDMENT. The parties to this Agreement, by mutual consent of
the Board of Directors of DI and Board of Directors of AMCE acting with the
recommendation of the Special Committee, may amend, modify or supplement this
Agreement in such manner as may be agreed upon by them in writing, at any time
before or after approval by the stockholders of each of AMCE and DI; PROVIDED,
HOWEVER, that no such amendment, modification or supplement shall, (i) if agreed
to after approval by the stockholders of AMCE, change the amount or nature of
the consideration to be received by stockholders of DI, or in the judgment of
the Board of Directors of AMCE acting with the recommendation of the Special
Committee otherwise have a material adverse effect on the rights of AMCE
stockholders or (ii) be effective unless approved by a majority of the members
of the ▇▇▇▇▇▇▇ Family (for which purpose each member shall have one vote).
6.2. WAIVER OF CONDITIONS; FAILURE OF CONDITIONS. The conditions to
each of the party's obligation to consummate the Merger are for the sole benefit
of such party and may be waived by such party in whole or in part to the extent
permitted by applicable law. In the event of a failure of the conditions set
forth in Sections 4.3 and 5.3, the parties will in good faith endeavor to
negotiate amendments to this Agreement that enable the parties to achieve the
objectives of the transactions contemplated hereby notwithstanding the failures
of such conditions.
6.3. DEFERRAL. Notwithstanding adoption and approval of this
Agreement by the stockholders of each of AMCE and DI, consummation of the
transactions provided for herein may be deferred by the Board of Directors of DI
or the Board of Directors of AMCE acting with the recommendation of the Special
Committee at any time prior to the Effective Time, if either such Board of
Directors determines that such deferral would be in the best interests of DI or
AMCE, respectively, or their stockholders.
6.4. TERMINATION. This Agreement may be terminated and the Merger and
other transactions provided for by the Agreement may be abandoned at any time
prior to the Effective Time, whether before or after approval by the
stockholders of each of DI and AMCE,
21
by action of the Board of Directors of DI or the Board of Directors of AMCE
acting with the recommendation of the Special Committee, if either such Board of
Directors determines that the completion of the transactions provided for herein
would for any reason be inadvisable or not in the best interests of DI or AMCE,
respectively, or their stockholders.
6.5 SURVIVAL. The agreement of the parties contained in Sections
1.6, 1.7 and 7.1 hereof shall survive the consummation of the Merger and the
agreements of the parties contained in Section 7.1 hereof shall survive
termination of this Agreement.
VII. MISCELLANEOUS
7.1. EXPENSES. As used herein, "EXPENSES" shall mean, with respect to
a party, all expenses of such party incident to preparing, entering into and
carrying out this Agreement, the agreements referred to in Sections 4.9, 4.10
and 4.11 hereof and all other agreements, documents, instruments or certificates
contemplated hereby, or thereby, and the consummation of the Merger. If the
Merger is not consummated for any reason (other than as a result of the Board of
Directors of AMCE terminating this Agreement pursuant to Section 6.4 for a
Specified Reason (as defined below) or Without Cause (as defined below)), DI
shall pay and be responsible for all of its Expenses and all of AMCE's Expenses.
If this Agreement is terminated by the Board of Directors of AMCE pursuant to
Section 6.4 for a Specified Reason or Without Cause, DI shall pay and be
responsible for all of its Expenses and 50% of AMCE's Expenses. As used herein,
(x) a "SPECIFIED REASON" shall mean any of the following bases for a
determination by the Board of Directors of AMCE to terminate this Agreement
pursuant to Section 6.4: (i) that it is in the best interests of AMCE to pursue
an unrelated transaction and the transactions contemplated by this Agreement
would adversely impact such unrelated transaction, (ii) that a condition set
forth in Sections 4.5 or 4.6 hereof has failed due to facts or circumstances
unknown on the date of this Agreement to, and beyond the control of, AMCE, DI or
any member of the ▇▇▇▇▇▇▇ Family, (iii) that a condition set forth in Section
4.7 has failed (unless DI or any member of the ▇▇▇▇▇▇▇ Family is a plaintiff (or
is otherwise involved in a role adverse to AMCE, the Board of Directors of AMCE
or the Special Committee) in any litigation, action or proceeding described
therein), or (iv) that a condition set forth in Section 4.15 has failed as a
result of facts or circumstances unknown on the date of this Agreement to, and
beyond the control of, AMCE, DI or any member of the ▇▇▇▇▇▇▇ Family and (y)
"WITHOUT CAUSE" shall mean a determination of the Board of Directors of AMCE to
terminate this Agreement pursuant to Section 6.4 without having a reasonable
basis for such action.
7.2. NOTICES. Any notice, request, consent, waiver or other
communication required or permitted hereunder shall be effective only if it is
in writing and personally delivered or sent by certified or registered mail,
postage prepaid, addressed as follows:
To: AMC Entertainment Inc. Suite 1700 Power & Light ▇▇▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Post Office Box 419615
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
22
With information copies to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., Esq.
Hallmark Cards, Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Polsinelli, White, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
To: ▇▇▇▇▇▇▇, Inc. Suite 1700 Power & Light ▇▇▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Post Office Box 419615
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
With information copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Kopple & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇ ▇.▇.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or such other person or address as the addressee may have specified in a notice
duly given to the sender as provided herein. Such notice or communication shall
be deemed to have been given upon receipt thereof.
7.3. WAIVER. No delay or failure on the part of any party in
exercising any rights hereunder, and no partial or single exercise thereof, will
constitute a waiver of such rights or of any other rights hereunder.
7.4. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.
7.5. ENTIRE AGREEMENT. This Agreement and the Exhibits hereto
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersede
23
all prior or contemporaneous, written or verbal agreements, understandings and
negotiations in connection herewith.
7.6. AMENDMENTS. This Agreement cannot be modified, amended or
terminated, except as provided in Article VI by an instrument in writing signed
by all the parties hereto; provided, however, that any provision of this
Agreement may be waived only in writing by the party to be charged with the
waiver.
7.7. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable by any court of final jurisdiction, it is the intent of
the parties that all other provisions of this Agreement be construed to remain
fully valid, enforceable and binding on the parties.
7.8. GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed by, the laws of the State of Missouri as applied to contracts
that are executed and performed entirely in such State, except to the extent
that the laws of the State of Delaware relate to the Merger.
7.9. HEADINGS. The headings to the paragraphs to this Agreement are
for convenience only and in no way define, limit or describe the scope or intent
of this Agreement or any party hereto nor in any other way affect this Agreement
or any part hereof.
7.10. EXHIBITS. All exhibits and schedules attached to this Agreement
are incorporated herein by this reference.
7.11. MISCELLANEOUS. Whenever the context of this Agreement shall
require, the use of any gender shall include all genders, and the use of any
singular shall include the plural, and vice versa.
7.12. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same agreement.
7.13. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests, or obligations hereunder may be assigned by any party hereto without
the prior written consent of the other party.
7.14. ACCOUNTING TERMS. All accounting terms used herein that are not
expressly defined in this Agreement shall have the respective meanings given to
them in accordance with United States generally accepted accounting principles
on the date hereof.
24
IN WITNESS WHEREOF, this Agreement and Plan of Merger has been signed
on behalf of AMC Entertainment Inc. by ▇▇▇▇▇ ▇. ▇▇▇▇▇, its President, and on
behalf of ▇▇▇▇▇▇▇, Inc. by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, its President, and the corporate
seal of each corporation has been affixed hereto and attested to by the
Secretary of each corporation, respectively, on the date first above written.
AMC ENTERTAINMENT INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
(SEAL)
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Secretary
▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
(SEAL)
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Secretary
EXHIBIT A TO MERGER AGREEMENT
DI PRE-MERGER ACTION PLAN
It is anticipated that ▇▇▇▇▇▇▇, Inc. ("DI") will undertake certain actions
before the merger with AMC Entertainment Inc. ("AMCE"), as described below.
Several of these pre-merger transactions involve the four DI subsidiaries other
than AMCE: Delta Properties, Inc. ("DPI"), Crosstown Development, Inc., Kansas
City Downtown Redevelopment Corporation and Entertainment Group, Inc.
(collectively, the "non-AMCE subsidiaries").
1. All non-AMCE subsidiaries of DI will be merged into DPI before the end of
the current fiscal year
2. DPI and DI will eliminate all intercompany debt before the end of the
current fiscal year.
3. All assets (other than shares of AMCE capital stock) and all liabilities
of DI will be transferred from DI to DPI before the end of the current
fiscal year. The DI shareholders shall negotiate the allocation of the
relative benefits and burdens of such assets and liabilities among the DI
shareholders (who ultimately will be the shareholders of ▇▇▇--▇▇▇ ▇, ▇▇▇▇▇)
in a manner consistent with the ▇▇▇▇▇▇▇ Family Settlement Agreement.
4. AAE will be liquidated and its assets distributed in the manner set forth
in the ▇▇▇▇▇▇▇ Family Settlement Agreement.
5. DI will pay as a dividend or otherwise distribute all shares of stock of
DPI to the DI shareholders in the same ratio as the AMCE capital stock to
be received in the merger.