Exhibit 2.5(e)
STOCK PURCHASE AGREEMENT
DATED AS OF JANUARY 15, 2002
BY AND AMONG
GC COMPANIES, INC.
(THE "SELLER")
--------------------------------------------------------------------------------
AND
AMC ENTERTAINMENT INC.
AMERICAN MULTI-CINEMA, INC.
AND
CENTERTAINMENT DEVELOPMENT, INC.
(COLLECTIVELY, THE "PURCHASERS")
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of January 15, 2002, is
entered into by and among GC COMPANIES, INC., a Delaware corporation ("GCX" or
"SELLER"), and AMC ENTERTAINMENT INC., a Delaware corporation ("AMCE"), AMERICAN
MULTI-CINEMA, INC., a Missouri corporation ("AMC"), and CENTERTAINMENT
DEVELOPMENT, INC., a Delaware corporation ("CDI"), (AMCE, AMC and CDI being
hereinafter referred to collectively as the "PURCHASERS" and individually from
time to time as a "PURCHASER").
RECITALS
WHEREAS, GCX and certain of its subsidiaries (collectively, the
"DEBTORS") are the debtors and debtors-in-possession in chapter 11 proceedings
pending in the United States Bankruptcy Court for the District of Delaware (the
"BANKRUPTCY COURT") as case numbers 00-3897 through 00-3927 (as administratively
consolidated, the "CHAPTER 11 CASES"); and
WHEREAS, GCX is a holding company engaged in three primary lines of
business (collectively, the "GC BUSINESS") through its Subsidiaries and
Affiliates: (i) a wholly-owned domestic movie theatre exhibition business (the
"DOMESTIC THEATRE BUSINESS") conducted through General Cinema Theatres, Inc.
("GCT") and its Subsidiaries, (ii) the 50% interest of General Cinema
International, Inc. ("GC INTERNATIONAL") in a South American movie theatre
exhibition business (the "SA THEATRE BUSINESS") owned by and conducted through
Hoyts General Cinema South America, Inc. ("HGCSA") and its Affiliates
(collectively, the "SA JOINT VENTURE"), and (iii) a private investment business
(the "INVESTMENT PORTFOLIO") conducted through GCC Investments, Inc. ("GCC
INVESTMENTS") and its Affiliates; and
WHEREAS, AMCE has entered into a letter of intent dated December 6,
2001 (as amended, the "LOI") with GCX whereby AMCE, through its designees, would
acquire the GC Business (the "TRANSACTION") through the acquisition of 100% of
the stock of reorganized GCX under a plan of reorganization for the Debtors in
the Chapter 11 Cases; and
WHEREAS, AMCE desires that AMC and CDI, each wholly owned subsidiaries
of AMCE, act as its designees pursuant to the LOI, and, accordingly, AMC will
acquire 100% of the newly issued common stock of GCX (the "NEW GCX COMMON
STOCK") and CDI will acquire 100% of the GC International stock (the "GC
INTERNATIONAL STOCK") and 100% of the of the GCC Investments stock (the "GCC
INVESTMENTS STOCK"), (the New GCX Shares, GC International Stock and the GCC
Investments Stock shall be collectively referred to as the "PURCHASED SHARES").
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. Unless the context otherwise requires, the terms defined
in this SECTION 1.01 shall have the meanings specified for all purposes of this
Agreement. Capitalized terms used and not defined in this Agreement have the
meaning ascribed thereto in the Plan.
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding, arbitration or
Governmental or Regulatory Authority investigation.
"AFFILIATE" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with that Person.
For the purposes of this definition, "control" (including with correlative
meanings, the terms "controlling", "controlled by", and "under common control
with") as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through ownership of voting securities or by contract
otherwise.
"AGREEMENT" means this Stock Purchase Agreement, the Exhibits and the Data
Room Index and the certificates delivered in connection herewith, as the same
may be amended from time to time in accordance with the terms hereof.
"AMC" has the meaning ascribed to it in the Preamble.
"AMCE" has the meaning ascribed to it in the Preamble.
"AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OR CHARTER" means, with
respect to each Reorganized Debtor, the amended and restated certificate or
articles of incorporation or charter (or document of similar effect with respect
to any Debtor that is not a corporation) for such Reorganized Debtor, which
shall be substantially in the forms of the example set forth in the Plan
Documentary Supplement.
"AMENDED AND RESTATED BYLAWS" means, with respect to each Reorganized
Debtor, the amended and restated bylaws for such Reorganized Debtor that is a
corporation, which
3
shall be substantially in the forms of the examples set forth in the Plan
Documentary Supplement.
"ASSETS AND PROPERTIES" of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including without limitation cash,
cash equivalents, Investment Assets, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and Intellectual Property.
"ASSOCIATE" means, with respect to any Person, any corporation or other
business organization of which such Person is an officer or partner or is the
beneficial owner, directly or indirectly, of 10% or more of any class of equity
securities or similar interests, any trust or estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a trustee
or in a similar capacity and any relative or spouse of such Person.
"AUDITED FINANCIAL STATEMENTS" has the meaning ascribed to it in SECTION
3.08.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended,
as set forth in Title 11 of the United States Code, 11 U.S.C. Sections 101
et seq., as applicable to the GC Chapter 11 Cases.
"BANKRUPTCY COURT" has the meaning ascribed to it in the Recitals.
"BUSINESS COMBINATION" means with respect to any Person any (a) merger,
consolidation or combination to which such Person is a party, (b) any sale,
dividend, split or other disposition of any capital stock or other equity
interests of such Person, (c) any tender offer (including without limitation a
self-tender), exchange offer, recapitalization, liquidation, dissolution or
similar transaction, (d) any sale, dividend or other disposition of all or a
material portion of the Assets and Properties of such Person or (e) the entering
into of any agreement or understanding, or the granting of any rights or
options, with respect to any of the foregoing.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a weekday
on which banks in the City of New York or the City of Boston are authorized to
be closed.
"CDI" has the meaning ascribed to it in the Preamble.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
4
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System list of sites maintained by the United States
Environmental Protection Agency under the provisions of CERCLA.
"CHAPTER 11 CASES" has the meaning ascribed to it in the Recitals.
"CLOSING" has the meaning ascribed to it in SECTION 2.03.
"COMMITTEE" means the Official Committee of Unsecured Creditors of the
Debtors appointed in the Chapter 11 Cases pursuant to Section 1102 of the
Bankruptcy Code.
"CONFIRMATION ORDER" means the order entered by the Bankruptcy Court
confirming the Reorganization Plan in accordance with the provisions of Chapter
11 of the Bankruptcy Code, which order must be in form and substance reasonably
satisfactory to AMCE and GCX and consistent with the Plan.
"CONTRACT" means any agreement, lease, license, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract, commitment or
understanding (whether written or oral).
"CONTRACT SCHEDULE" means "Schedule G - Executory Contracts and Unexpired
Leases" filed by the Debtors in the Chapter 11 Cases, as amended, a true and
correct of which has been provided by GCX to the Purchasers.
"DATA ROOM INDEX" means that certain index of the documents, information
and other materials related to the GC Business that has been provided by the
Seller to the Purchasers and annexed hereto as EXHIBIT A and the lease files for
the Real Property Leases listed on EXHIBIT C. All of the documents, agreements
and other materials listed on the Data Room Index shall be deemed furnished and
made available to the Purchasers for all purposes of this Agreement; PROVIDED,
that documents, information and other materials listed in the Data Room Index
shall not be deemed to include any documents, information or other materials
referenced within the content of any of such items (e.g., a reference to an
agreement in the corporate minute book of a GC Entity shall not be deemed to
constitute a disclosure with respect to such agreement, unless such agreement
was listed separately on the Data Room Index).
"DEBTOR(S)" means, individually or collectively, GCX, and each of its
subsidiaries that is a debtor and debtor-in-possession under Chapter 11 of the
Bankruptcy Code in the Chapter 11 Cases as set forth in footnote 1 of the Plan,
but does not include the GC Chapter 7 Debtors, the GC Non-Debtors or the SA
Joint Venture.
5
"DIP FACILITY" means that certain Debtor in Possession Agreement dated
October 11, 2000, by and between GCX, General Electric Capital Corporation,
Fleet National Bank, and the Bank of Nova Scotia, as amended.
"DOMESTIC THEATRE BUSINESS" has the meaning ascribed to it in the Recitals.
"EFFECTIVE DATE" has the meaning ascribed to it in SECTION 2.03.
"EMPLOYEES" has the meaning ascribed to it in SECTION 3.13.
"EMPLOYEE PLAN(S)" means all employee pension plans, any bonus, incentive
compensation, deferred compensation, profit sharing, pension, retirement,
savings, stock purchase, stock option, stock ownership, stock appreciation
rights, phantom stock, leave of absence, layoff, vacation, day or dependent
care, legal services, cafeteria, life, medical, dental, health, accident,
disability, workers compensation or other insurance, severance, separation or
other employee benefit plan, practice, policy, program or group or individual
arrangement of any kind providing money (other than as current salary or wages),
services, property or other benefits, written or oral, funded or unfunded, and
including all that have been frozen, and all trusts, escrow or similar
agreements related thereto which are maintained by any of the GC Entities or any
ERISA Affiliate with respect to any one or more of its present or former
employees, independent contractors, directors, officers or shareholders or with
respect to which any of the GC Entities or any ERISA Affiliate has made or may
be, now or in the future, required to make payments, transfer or contributions.
"ENVIRONMENTAL, HEALTH AND SAFETY REQUIREMENTS" shall mean all Laws
concerning public health and safety, worker health and safety, and pollution or
protection of the environment including without limitation all those relating to
the presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous materials,
substances or wastes, as such requirements are enacted and in effect on or prior
to the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any other Person that, together with GCX, GCC
Investments or GC International, would be treated as a single employer under
section 414 of the Code.
"FINAL ORDER" has the meaning ascribed to it in the Plan.
"FINANCIAL STATEMENTS" has the meaning ascribed to it in SECTION 3.08.
6
"GAAP" means United States generally accepted accounting principles, as in
effect as of the relevant date.
"GC BUSINESS" has the meaning ascribed to it in the Recitals.
"GC CHAPTER 7 DEBTORS" means General Cinema Theatres of Florida, Inc.,
General Cinema Corp. of Georgia, General Cinema Corp. of Louisiana, General
Cinema Corp. of Rhode Island, General Cinema Corp. of Tennessee and General
Cinema Corp. of West Palm Beach, which are excluded from the Transaction.
"GC ENTITIES" means (i) the Debtors, (ii) the GC Non-Debtors, and (iii) the
SA Joint Venture Entities.
"GC INTERNATIONAL" has the meaning ascribed to it in the Recitals.
"GC INTERNATIONAL STOCK" has the meaning ascribed to it in the Recitals.
"GC NON-DEBTORS" means the United States GCX Affiliates other than the
Debtors, to wit: (i) GC International, (ii) GC Security Corp., (iii) GCC
Investments, LLC and its Affiliates, (iii) the Premium - Liquor License Holders,
(iv) the Inactive Corporations, and (v) the Joint Venture Partners, each as
defined by and shown on the Organizational Chart.
"GCC INVESTMENTS" has the meaning ascribed to it in the Recitals.
"GCC INVESTMENTS STOCK" has the meaning ascribed to it in the Recitals.
"GCT" has the meaning ascribed to it in the Recitals.
"GCX" has the meaning ascribed to it in the Preamble.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
any federal, national, state, municipal, county, city or other political
subdivision with jurisdiction over any of the GC Entities or the GC Business.
"▇▇▇▇▇▇ DOCUMENTS" means that certain Lease and Security Agreement dated as
of October 28, 1999 by and between ▇▇▇▇▇▇ EMX, Inc. and GCX, as amended, and any
documents related thereto.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder.
7
"INDEBTEDNESS" of any Person means all obligations of such Person (a) for
borrowed money, (b) evidenced by notes, bonds, debentures or similar instruments
and (c) in the nature of guarantees of the obligations described in clauses (a)
and (b) above of any other Person.
"INTELLECTUAL PROPERTY" means all United States and foreign trademarks and
trademark rights, trade name rights, service marks and service ▇▇▇▇ rights,
service names and service name rights, copyrights and copyright rights, patents
and patent rights, business and product names, logos and slogans and computer
programs (including all source codes, object codes, firmware, development tools,
files, records and data) whether or not subject to statutory registration, and
all common law and world-wide rights to, pending United States and foreign
applications for and registrations of, patents (including all reissues,
divisions, renewals, extensions, provisionals, continuations and continuations
in part), trademarks, service marks and copyrights.
"INTELLECTUAL PROPERTY AGREEMENTS" has the meaning ascribed to it in
SECTION 3.17.
"INTERIM OPERATING AGREEMENT" means that certain Interim Operating
Agreement dated December 6, 2001 by and between GCX and AMCE, as such agreement
is amended from time to time or modified by the Bankruptcy Court with AMCE's
consent.
"INVESTMENT ASSETS" means all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into our exhangeable for other securities), interests in joint
ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by GCC
Investments and its Affiliates, as disclosed under Data Room Index Item X.
"INVESTMENT PORTFOLIO" has the meaning ascribed to it in the Recitals.
"KNOWLEDGE" as used in connection with GCX or the GC Entities means the
actual knowledge of the officers and directors of the GC Entities.
"LAST STATEMENT DATE" means July 31, 2001.
"LAW" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of any political instrumentality with
jurisdiction over any of the GC Entities or the GC Business.
"LIABILITY" means all indebtedness, obligations and other liabilities of a
Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due), including, without limitation, any fines, penalties,
judgments, awards, settlements respecting any judicial, administrative or
arbitration proceedings, damages, losses, claims or demands.
8
"LIEN" means any mortgage, pledge, assessment, security interest, lien,
levy, charge or other encumbrance of any kind.
"LOI" has the meaning ascribed to it in the Preamble.
"LOI ORDER" means an order of the Bankruptcy Court approving the LOI and
Interim Operating Agreement.
"MATERIAL ADVERSE EFFECT" means, with respect to the GC Business or the
Assets or Properties of the GC Business, any change in the condition (financial
or other), business, results of operations, prospects, assets, Liabilities or
operations of the GC Business and/or the Assets or Properties of the GC Business
taken as a whole that, individually or in the aggregate, has an adverse effect
of at least $1.5 million in EBITDA, or that substantially impairs the ability of
the Seller to consummate the Transaction, or any event or condition which would,
with the passage of time, constitute such a "Material Adverse Effect," except
for such changes that (i) are in the Ordinary Course of Business of the GC
Entities, (ii) are contemplated by the Plan, or (iii) occur as a result of the
September 11, 2001 terrorist attacks, general economic conditions in South
America or currency fluctuations with respect to South American countries.
"NEW GCX STOCK" has the meaning ascribed to it in the Recitals.
"ORDINARY COURSE OF BUSINESS" means a reasonable action taken by a Person
only if (taking into account the seasonality of the Person's business and, in
the case of GCX, the Chapter 11 Cases, (a) such action is consistent with the
past practices of such Person and is taken in the ordinary course of normal
day-to-day operations of such Person; and (b) such action is not required to be
authorized by the board of directors of such Person (or by any Person or group
of Persons exercising similar authority) and such Person is not otherwise
required to obtain the approval of AMCE or any other person as may be required
by the Interim Operating Agreement; except to the extent such action is provided
for or contemplated by the Plan, the LOI, the Interim Operating Agreement or
this Agreement.
"ORGANIZATIONAL CHART" means the organizational chart of GCX and its
Affiliates attached hereto as EXHIBIT B.
"ORGANIZATIONAL DOCUMENTS" means with respect to any entity: (a) the
articles or certificate of incorporation and the bylaws of a corporation; (b)
the partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate of
limited partnership of a limited partnership; (d) the certificate of formation
and limited liability company agreement of any limited liability company; (e)
any charter or similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and (f) any amendment to any
of the foregoing.
9
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (a) purchase or otherwise receive or be issued any shares of
capital stock or other equity interests of such Person or any security of any
kind convertible into, exchangeable or exercisable for any shares of capital
stock or other equity interests of such Person or (b) receive any benefits or
rights similar to any rights enjoyed by or accruing to the holder of shares of
capital stock or other equity interests of such Person, including without
limitation any rights to participate in the equity, income or election of
directors or officers of such Person.
"ORDER" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"PERMITTED LIENS" means (a) Liens for Taxes or governmental assessments,
charges or claims the payment of which is not yet due, or for Taxes the validity
of which are being contested in good faith by appropriate proceedings, (b)
statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other similar Persons imposed by applicable Law and incurred in
the Ordinary Course of Business; (c) Liens relating to deposits made in the
Ordinary Course of Business in connection with workers compensation,
unemployment insurance and other types of social security; (d) minor defects of
title, easements, rights-of-way, restrictions and other similar charges or
encumbrances not materially detracting from the value of the property or
interfering with the ordinary conduct of the GC Business; (e) Liens not created
by the GC Entities which affect the underlying fee interest of any leased Real
Property; (f) Liens related to the ▇▇▇▇▇▇ Documents; (g) Liens of the SA Lenders
against certain stock and property of GCC Hoyts Chile, Inc., Hoyts Cinemas Chile
SA, Boca Holdings, Inc. and Hoyts General Cinema de Argentina, S.A.; and (h) the
Lien of Bank of Nova Scotia against a $1.2 million certificate of deposit
securing that certain letter of credit issued by Bank of Nova Scotia in favor of
Fleet National Bank, which letter of credit secures one-half of the letter of
credit issued by Fleet National Bank or its Affiliates for the benefit of the
landlord of the SA Joint Venture's La Reina Alianza lease in Chile.
"PERSON" means any natural person, corporation, joint stock corporation,
general partnership, limited partnership, limited liability company or
partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"PLAN" means that certain Joint Plan of Reorganization of Debtors and
Official Committee of Unsecured Creditors for GC Companies, Inc. and its Jointly
Administered Subsidiaries filed with the Bankruptcy Court on December 21, 2001,
as the same may be amended with AMCE's consent.
"PLAN DOCUMENTARY SUPPLEMENT" means a supplement to the Plan, containing
the Plan Documents, to be filed with the Bankruptcy Court no later than ten (10)
Business Days
10
prior to the commencement of the Confirmation Hearing, as said supplement may be
amended from time to time at any time prior to the Effective Date.
"PLAN DOCUMENTS" has the meaning ascribed to it in the Plan.
"PROPONENTS" means those parties in interest proposing the Plan, i.e., the
Debtors and the Committee.
"PURCHASED SHARES" has the meaning ascribed to it in the Recitals.
"PURCHASERS" has the meaning ascribed to it in the Recitals.
"QUARTERLY STATEMENTS" has the meaning ascribed to it in SECTION 3.08.
"REAL PROPERTY" has the meaning ascribed to it in SECTION 3.14(a).
"REAL PROPERTY LEASES" has the meaning ascribed to it in SECTION 3.14(a).
"REIMBURSEMENT AGREEMENT" means that certain Amended and Restated
Reimbursement and Security Agreement dated January 26, 1999 between GCX and
Harcourt General, Inc.
"REORGANIZED DEBTORS" means, collectively, all of the Debtors or any
successors thereto by merger, consolidation, acquisition, or otherwise on and
after the Effective Date.
"REPRESENTATIVES" means Purchaser and its Affiliates and each of their
respective officers, employees, agents, counsel, accountants, financial
advisors, consultants and other representatives.
"SA JOINT VENTURE" has the meaning ascribed to it in the Recitals.
"SA JOINT VENTURE ENTITIES" means HGCSA and its Affiliates, as shown on the
Organizational Chart.
"SA LENDERS" has the meaning ascribed to it in the Plan.
"SA THEATRE BUSINESS" has the meaning ascribed to it in the Recitals.
"SELLER" has the meaning ascribed to it in Preamble.
"SUBSIDIARY" means, with respect to any Person, (a) any corporation as to
which more than 50% of the outstanding stock having ordinary voting rights or
power (and excluding stock having voting rights only upon the occurrence of a
contingency unless and
11
until such contingency occurs and such rights may be exercised) is owned or
controlled, directly or indirectly, by such Person and/or by one or more of such
Person's Subsidiaries, and (b) any partnership, joint venture or other similar
relationship between such Person (or any Subsidiary thereof) and any other
Person (whether pursuant to a written agreement or otherwise) if such Person has
a more than 50% equity interest therein.
"TAX" OR "TAXES" means any and all United States and foreign federal,
state, municipal or local net or gross income, gross receipts, net proceeds,
sales, use, AD VALOREM, value added, transfer, franchise, recapture,
withholding, payroll, employment, excise, premium, property, alternative or
add-on minimum, environmental or other taxes, assessments, duties, fees, levies
or other governmental charges of any nature whatsoever, but shall not include
any assessment or other charges of guaranty funds or similar organizations.
"TAX CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"TAX RETURN" means any returns, reports, statements (including any
estimated reports, returns or statements) and other similar filings required to
be filed for purposes of a particular Tax.
"THIRD PARTY CLAIM" has the meaning ascribed to it in SECTION 8.02.
"TRANSACTION" has the meaning ascribed to it in the Recitals.
1.02 INTERPRETATION. As used in this Agreement, the words "include" and
"including," are not words of limitation and should be read to also add "without
limitation." The word "or" is not exclusive and the words "herein", "hereof",
"hereby", "hereto" and "hereunder" refer to this Agreement as a whole. Any
reference to any applicable Law shall be deemed also to refer to all rules and
regulations promulgated thereunder unless the context otherwise requires.
Whenever required by the context, any gender shall include any other gender, the
singular shall include the plural and the plural shall include the singular.
Unless the context otherwise requires, references herein (a) to Articles,
Sections, Exhibits and Schedules mean the Articles and Sections of and the
Exhibits and Schedules attached to this Agreement and (b) to an agreement,
instrument or other document means such agreement, instrument or other document
as amended, supplemented and modified through the date hereof unless the context
otherwise requires and thereafter from time to time to the extent permitted by
this Agreement. The Schedules and Exhibits referred to herein shall be construed
with and as an integral part of this Agreement to the same extent as if they
were set forth verbatim herein. The Table of Contents and titles to Articles and
headings of Sections or Schedules are inserted for convenience of reference only
and shall not be deemed a part of or to affect the meaning or interpretation of
this Agreement.
12
1.03 ACCOUNTING RULES. Except as otherwise expressly provided, all
accounting terms used in this Agreement, whether or not defined in SECTION 1.01,
shall be construed in accordance with GAAP. If and so long as any Person has one
or more Subsidiaries, such accounting terms shall be determined on a
consolidated basis for the Person and each of its Subsidiaries, and the
financial statements and other financial information to be furnished by any
Person pursuant to this Agreement shall be consolidated and presented in
consolidating financial statements in accordance with GAAP.
ARTICLE II
SALE OF PURCHASED SHARES; CLOSING
2.01 PURCHASE AND SALE OF PURCHASED SHARES.
(a) GCX agrees to sell to AMC, and AMC agrees to purchase from GCX, the
New GCX Stock at the Closing on the terms and subject to the conditions set
forth in this Agreement.
(b) GCX agrees to sell to CDI, and CDI agrees purchase from GCX, the GC
International Stock at the Closing on the terms and subject to the conditions
set forth in this Agreement.
(c) GCX agrees to sell to CDI, and CDI agrees purchase from GCX, the GCC
Investments Stock at the Closing on the terms and subject to the conditions set
forth in this Agreement.
2.02 PURCHASE PURSUANT TO PLAN. The Purchased Shares are being sold
pursuant to and in consideration of the Plan and consideration provided for
therein, and no additional consideration shall be paid at Closing.
2.03 CLOSING. The Closing (the "CLOSING") of the purchase and sale of the
Purchased Shares shall occur at the offices of ▇▇▇▇▇▇▇ Procter LLP, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 A.M. local time, (a) on the first Business Day
following the date the Confirmation Order shall have become a Final Order or (b)
such other date as the Purchasers and the Seller shall mutually agree (the date
on which the Closing takes place being the "EFFECTIVE DATE"). At the Closing,
the Seller will sell and the Purchasers shall purchase the Purchased Shares,
free and clear of all Liens, and the Seller shall deliver to Purchasers a stock
certificate or certificates evidencing the Purchased Shares, duly endorsed to
the appropriate Purchaser with all required stock transfer tax stamps affixed or
provided for. At the Closing, there shall also be delivered by the Purchasers
and the Seller the certificates and other agreements, documents and instruments
to be delivered under Article V or as conditions to Closing under Article VI.
13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Each of the representations and warranties set forth in this Article III is
qualified by the agreements and other documents listed on the Data Room Index.
Furthermore, no agreement, document or Lien for which no GC Entity has any
obligations after the Effective Date as a result of its rejection or termination
pursuant to the Plan shall be deemed to breach any of such representations or
warranties, regardless of whether such agreement, document or Lien is listed on
the Data Room Index. Subject to the foregoing, the Seller hereby represents and
warrants to the Purchasers as follows:
3.01 ORGANIZATION AND QUALIFICATION. Each of the GC Entities is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has full entity power and authority to conduct
the GC Business conducted by it and to own, use and lease its Assets and
Properties. Each of the GC Entities is duly qualified or licensed to do business
and is in good standing in each jurisdiction where the nature of the GC Business
conducted by it or the Assets and Properties owned or leased by it makes such
qualification or license necessary, except where the failure to be qualified or
licensed (individually or in the aggregate) would not have a Material Adverse
Effect.
3.02 CAPITALIZATION.
(a) The authorized capital stock of the Reorganized Debtors, including
with respect to the New GCX Stock, will be set forth in the Amended and Restated
Certificate of Incorporation or Charter of such Reorganized Debtor as of the
Effective Date.
(b) The authorized capital stock of GC International consists of 3,000
shares of common stock, no par value per share, all of which shares are issued
and outstanding and are owned by GCX, free and clear of all Liens except for
Liens arising under the DIP Facility and the Reimbursement Agreement. There are
no outstanding Options with respect to GC International or agreements,
arrangements or understandings to issue Options with respect to the GC
International, and there are no preemptive rights or agreements, arrangements or
understandings to issue preemptive rights with respect to the issuance or sale
of GC International capital stock.
(c) The authorized capital stock of GCC Investments consists of 100 shares
of common stock, no par value per share, 10 of which shares are issued and
outstanding and are owned by GCX, free and clear of all Liens except for Liens
arising under the DIP Facility. There are no outstanding Options with respect to
GCC Investments or agreements, arrangements or understandings to issue Options
with respect to the GCC Investments, and
14
there are no preemptive rights or agreements, arrangements or understandings to
issue preemptive rights with respect to the issuance or sale of GCC Investments
capital stock.
(d) The authorized capital stock of each of the GC Non-Debtors (excluding
GC International) is set forth in the Organizational Documents included in the
Data Room Index, and such Organizational Documents have not been amended or
modified and remain in full force and effect. The issued and outstanding capital
stock of the GC Non-Debtors (excluding GC International) are owned as set forth
on the Organizational Chart, free and clear of all Liens except under the DIP
Facility and the Reimbursement Agreement. There are no outstanding Options with
respect to any capital stock of the GC Non-Debtors (excluding GC International)
or agreements, arrangements or understandings to issue Options with respect
thereto, and there are no preemptive rights or agreements, arrangements or
understandings to issue preemptive rights with respect to the issuance or sale
of the GC Non-Debtors' (excluding GC International) capital stock.
(e) The authorized capital stock of each of the SA Joint Venture Entities
is set forth in the Organizational Documents listed in the Data Room Index, and
such Organizational Documents have not been amended or modified and remain in
full force and effect. The issued and outstanding capital stock of the SA Joint
Venture Entities are owned as set forth on the Organizational Chart, free and
clear of all Liens except the Liens of the SA Lenders against certain stock of
GCC Hoyts Chile, Inc., Hoyts Cinemas Chile SA, Boca Holdings, Inc. and Hoyts
General Cinema de Argentina, S.A. Except as provided by Data Room Index, there
are no outstanding Options with respect to or agreements, arrangements or
understandings to issue Options with respect thereto, and there are no
preemptive rights or agreements, arrangements or understandings to issue
preemptive rights with respect to the issuance or sale of the SA Joint Venture
Entities' capital stock.
3.03 AUTHORIZATION AND ENFORCEABILITY. The Seller has the full corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transaction. The execution, delivery
and performance of this Agreement by the Seller and the consummation by the
Seller of the Transaction has been duly and validly approved by the Seller, and
no other corporate action on the part of any Seller is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the Transaction. This Agreement has been duly and validly executed and
delivered by each Seller and constitutes the legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to the enforcement of creditors' rights generally and by general principles of
equity.
3.04 CORPORATE STRUCTURE. Except as shown on the Organizational Chart, as
disclosed by Data Room Index and the Investment Assets, no GC Entity holds any
equity, partnership, limited liability company, joint venture or other interest
in any other Person. The
15
minute books and other similar records of the Seller and GC Entities as provided
pursuant to Data Room Index contain true and complete records, in all material
respects, of all actions taken at all meetings and by all written consents in
lieu of meetings of the stockholders or members (as the case may be), the board
of directors and any committee of the board of directors of each of the GC
Entities.
3.05 NO CONFLICTS. Subject to confirmation of the Plan by the Bankruptcy
Court, the execution and delivery by the Seller of this Agreement, the
performance by the Seller of its obligations under this Agreement, and the
consummation of the Transaction does not and will not, except in each case where
such conflict, breach or Lien creation individually or in the aggregate would
not be reasonably expected to have a Material Adverse Effect: (a) conflict with
or result in a violation or breach of any of the terms, conditions or provisions
of Organizational Documents of any GC Entity; (b) conflict with or result in a
violation or breach of any term or provision of any Law or Order applicable to
any GC Entity or any of GC Entities' Assets and Properties; (c) conflict with or
result in a violation or breach of, constitute (with or without notice or lapse
of time or both) a default under, require any GC Entity to obtain any consent,
approval or action of, make any filing with or give any notice to, any Person as
a result or under the terms of, or result in or give to any person any right of
termination, cancellation, acceleration or modification in or with respect to,
any material Contract or Permit to which any GC Entity is a party or by which
its respective Assets and Properties are bound (which for purposes hereof shall
exclude any executory contract or unexpired lease listed in the Contract
Schedule that is rejected pursuant to the Plan); or (d) result in the creation
or imposition of any Lien upon the Purchased Shares or any Lien upon the Assets
and Properties of any of the GC Entities.
3.06 GOVERNMENTAL APPROVALS AND FILINGS. Except for expiration or early
termination of the waiting period under the HSR Act, confirmation of the Plan by
the Bankruptcy Court and certain consent and approvals that may be needed to
transfer certain liquor licenses, no consent, approval or action of, filing with
or notice to, any Governmental or Regulatory Authority on the part of any GC
Entity is required in connection with the execution, delivery and performance of
this Agreement or the consummation of the Transaction.
3.07 SEC DOCUMENTS. Since October 31, 1997, GCX has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by GCX with the Securities and Exchange Commission ("SEC") pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") (all of the foregoing filed prior to the date hereof and after
October 31, 1997, and all exhibits included therein and the financial statements
and schedules thereto and documents incorporated by reference therein, the "SEC
DOCUMENTS"). As of their respective date or as heretofore amended, the SEC
Documents complied in all material respects with the reporting requirements of
the Exchange Act or with the requirements of the Securities Act of 1933 with
respect to documents filed thereunder.
16
3.08 FINANCIAL STATEMENTS. The Seller has furnished or made available to
the Purchasers true and complete copies of the following financial statements:
(a) the audited consolidated financial statements of GCX and its Subsidiaries
included in GCX's Annual Report on Form 10-K for the fiscal year ended October
31, 2000, with the report thereon of GCX's independent auditor (the "AUDITED
FINANCIAL STATEMENTS"); (b) the quarterly unaudited consolidated financial
statements of GCX and its Subsidiaries included in GCX's Quarterly Reports on
Form 10-Q for the fiscal quarters ended January 31, 2001, April 30, 2001 and
July 31, 2001 (the "QUARTERLY STATEMENTS"); and (c) unaudited theatre-by-theatre
profit and loss statements for the nine month period ended July 31, 2001
(collectively, the "DOMESTIC FINANCIAL STATEMENTS"). All of the Domestic
Financial Statements are true and correct in all material respects and were
prepared from the books of account or other financial records of the GC
Entities. The Audited Financial Statements and Quarterly Financial Statements
(i) have been prepared in accordance with GAAP and the published rules and
regulations of the SEC applicable thereto applied on a consistent basis, except
as may be indicated in the notes thereto and except, in the case of unaudited
Financial Statements, year-end adjustments and (ii) fairly present the
consolidated financial position of the GC Entities included in each such
Domestic Financial Statement.
The Seller has also furnished or made available to the Purchasers true and
complete copies of the following financial statements of the SA Joint Venture:
(a) the audited consolidated financial statements of the SA Joint Venture in
each country that it operates for the year ended December 31, 2000, with the
report thereon of the SA Joint Venture's independent auditor (the "SA AUDITED
FINANCIAL STATEMENTS"); and (b) the unaudited financial statements and
comparison to budget of the SA Joint Venture in each country for the year to
date ended September 30, 2001 (the "SA INTERIM FINANCIAL STATEMENTS")
(collectively, the "SA FINANCIAL STATEMENTS"). All of the SA Financial
Statements are true and correct in all material respects, were prepared from the
books of account or other financial records of the SA Joint Venture Entities and
fairly present the financial position of the SA Joint Venture Entities included
in each such SA Financial Statement. The SA Audited Financial Statements have
been prepared in accordance with generally accepted accounting principles of the
country to which such statements relate applied on a consistent basis, except as
may be indicated in the notes thereto.
3.09 ABSENCE OF CHANGES. Since the Last Statement Date, the GC Entities
have been operated in all material respects in the Ordinary Course of Business
and there has not been any change or any event or development which,
individually or together with other such events or development, has had a
Material Adverse Effect. In addition, without limiting the foregoing, except in
the Ordinary Course of Business or except as otherwise expressly contemplated by
this Agreement or the Interim Operating Agreement or otherwise disclosed in
writing to the Purchasers, there has not occurred since the Last Statement Date:
17
(a) any amendment or change to the Organizational Documents of the GC
Entities;
(b) any direct or indirect redemption, purchase or other acquisition by
any GC Entity of any equity securities of any other GC Entity;
(c) any authorization, issuance, sale or other dispositions by any GC
Entity of any shares of capital stock of any other GC Entity, or any Option
relating to such capital stock or any modification or amendment of any right of
any holder of any outstanding shares of capital stock of any GC Entity;
(d) except for GCX's Bankruptcy Court approved severance and retention or
incentive programs, (i) any increase in the salary or bonus of any director or
officer of the GC Entities, other than salary increases in the Ordinary Course
of Business, (ii) any payment of consideration of any nature whatsoever (other
than salary, bonus or dividend equivalent salary paid in the Ordinary Course of
Business) to any officer, director or stockholder of any of the GC Entities,
(iii) any grant of any severance, continuation or termination pay to any
director, officer, stockholder or employee of the GC Entities, or (iv) any
adoption, entering into, amendment, modification or termination (partial or
complete) of any Employee Plan or employment contract with respect to any
director, officer or stockholder of the GC Entities;
(e) except for under the DIP Facility, (i) any incurrence by any GC Entity
of any Indebtedness or (ii) any voluntary purchase, cancellation, prepayment or
complete or partial discharge in advance of a scheduled payment date with
respect to, or written waiver of any right of any GC Entity under, any
Indebtedness owing to any GC Entity;
(f) any physical damage, destruction or other casualty loss (whether or
not covered by insurance) affecting any of the GC Entities' Assets and
Properties in an aggregate amount exceeding $100,000;
(g) excluding with respect to the SA Joint Venture, any write-off or
write-down of or any determination to write off or write down any of the Assets
and Properties of the GC Entities in an aggregate amount exceeding $5,000,000;
(h) any purchase of any material Assets and Properties of any GC Entity or
any sale, license or other disposition of, or incurrence of a Lien (other than a
Permitted Lien) on, any material Assets and Properties of the GC Entities;
(i) except for the documents and agreements listed in the Data Room Index
and except pursuant to the Plan, any entering into any amendment, modification,
termination (partial or complete) or granting of a written waiver under (i) any
material Contract or (ii) any material Permit held by any of the GC Entities;
18
(j) any capital expenditures or commitments for additions to property,
plant or equipment of any of the GC Entities constituting capital assets in an
aggregate amount exceeding $25,000.
(k) any transaction by any of the GC Entities with any officer, director,
stockholder, Affiliate or Associate of any of the GC Entities other than (i) any
transaction that would not constitute a breach of subsection (d) or (e) above,
or (ii) pursuant to any Contract listed within the Data Room Index;
(l) the commencement of any Action or Proceedings against, or
investigation of, any of the GC Entities or their respective affairs (of which
any of the GC Entities has received written notice);
(m) written notice of any claim of ownership by a third party of any of
the GC Entities' Intellectual Property or written notice of infringement by any
of the Seller or GC Entities of any third party's Intellectual Property rights;
(n) any loan or advance by any of the GC Entities to any Person, except
for advances to employees for travel and business expenses;
(o) any material change in the accounting method or procedures of any of
the GC Entities, or
(p) any entering into of an agreement to do or engage in any of the
foregoing, including any Business Combination not otherwise restricted by the
foregoing paragraphs.
3.10 NO UNDISCLOSED LIABILITIES. Except as reflected or reserved against in
the Financial Statements or as disclosed in the Schedule of Assets and
Liabilities filed with respect to the Debtors in the Chapter 11 Cases or as
disclosed in the Data Room Index, there are no Liabilities of any of the GC
Entities or relating to or affecting any of their Assets and Properties required
to be reflected in Financial Statements in accordance with GAAP, other than
Liabilities incurred in the Ordinary Course of Business since the Last Statement
Date.
3.11 LEGAL PROCEEDINGS. Except as disclosed by Data Room Index: (a) there
are no Actions or Proceedings pending against any GC Entity or any of the
respective Assets and Properties; (b) there are no Orders outstanding against
any GC Entity; and (c) there have been no notices, complaints or other forms of
written inquiry received by any GC Entity from any Governmental or Regulatory
Authority charged with the regulation of any of the GC Entities' respective
operations and affairs, the adverse determination of which, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect.
3.12 COMPLIANCE WITH LAWS AND ORDERS. Except as disclosed under Data Room
Index, none of the GC Entities is in violation of or in default under any Law or
Order
19
applicable to such GC Entity or any of their respective Assets and Properties
that would reasonably be expected to have a Material Adverse Effect.
3.13 EMPLOYEE PLANS.
(a) Except as described in Section 5.05 hereof, set forth in Data
Room Index is a complete and correct list of all Employee Plans maintained or
contributed to by the GC Entities or any ERISA Affiliate or pursuant to which
the GC Entities or any ERISA Affiliate may have any Liability or covering
employees or former or retired employees of the GC Entities ("EMPLOYEES") with
respect to their employment with the GC Entities. Except as disclosed in Data
Room Index, each such Employee Plan is in writing and true and complete copies
of the following items relating to each Employee Plan, where applicable, have
heretofore been furnished or made available to Purchasers: (i) the Employee Plan
and any trust, custodial or other funding agreement, including all amendments
thereto: (ii) the three most recent actuarial reports and annual reports filed
with any relevant Governmental or Regulatory Authority for the three (3) most
recent plan years; (iii) the most recent summary plan description, summary of
material modifications to such summary plan descriptions and all material
Employee communications relating to such Employee Plans distributed within the
last 12 months; and (iv) the most recent custodian or trustee reports or other
financial statement for funded Employee Plans.
(b) No oral or written promise, commitment or representation has been made
by any GC Entity (i) to amend any of the Employee Plans or to provide increased
benefits thereunder to any of the GC Entities' present or former employees,
independent contractors, directors, officers or shareholders, except pursuant to
the requirements, if any, of the Employee Plans, any collective bargaining
agreements or as otherwise provided in this Agreement or the Plan, (ii) to
establish any new Employee Plan or (iii) to fund or continue any Employee Plan
beyond the Effective Date. To the Seller's Knowledge, each Employee Plan can be
terminated on or immediately after the Effective Date without making any
additional contribution to such Employee Plan other than normal contributions
with respect to the 2002 plan year prorated through the Effective Date.
(c) Each Employee Plan has been maintained, operated and administered in
compliance with its terms and all related documents or agreements and in
compliance with all applicable Laws, except where the failure to comply would
not have a Material Adverse Effect. Each Employee Plan that is an "employee
pension benefit plan" within the meaning of ERISA Section 3(2) is a qualified
plan under Tax Code Section 401, and nothing has occurred with respect to such
plan that would cause the loss of such qualification. Without limiting the
foregoing, the Seller has amended the GC Companies, Inc. Retirement Plan
(effective December 16, 1993) and the GC Companies, Inc. 401(k) Savings Plan
(Amended and Restated effective September 1, 1999) to comply with the statutory
changes applicable thereto known as "GUST" and shall has submitted the plans to
the IRS for favorable determination letters. Any non-compliance or failure
properly to administer a Plan or related
20
trust or fund has not exposed such Employee Plan or related trust or fund or any
GC Entity, nor would it be reasonably likely to result in any exposure of the
Purchasers or the GC Entities, to any Taxes, penalties or Liabilities to any
Person or expose the Employee Plan to disqualification of the trust or fund or
to loss of tax exempt status.
(d) There have been, as of the Effective Date, no prohibited transactions
as described in Tax Code Section 4975 or Title I, Part 4 of ERISA involving any
Employee Plan. The Seller is not aware of any facts or circumstances that could
give rise to any Tax imposed by Tax Code Section 4975 with respect to any
Employee Plan. There is no pending or, to the Knowledge of Seller, threatened
claim (other than claims for benefits in the ordinary course), assessment,
complaint, proceeding or investigation of any kind before any Governmental or
Regulatory Authority with respect to any Employee Plan.
(e) All insurance premiums required with respect to any Employee Plan up
to the Effective Date have been or shall be paid on or prior to the Effective
Date and, with respect to any such insurance policy, there shall be no Liability
of any of the GC Entities in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent Liability arising wholly or
partially out of events occurring prior to the Effective Date.
(f) All benefits, expenses and other amounts due and payable to or under
any Employee Plan on or prior to the Effective Date and all contributions
(including Employee contributions), transfers or payments required to be made to
any Employee Plan on or prior to the Effective Date, have been paid or shall be
paid prior to the Effective Date.
(g) No Employee Plan provides benefits, including without limitation death
or medical benefits, beyond termination of service or retirement other than (i)
coverage mandated by Law or (ii) as disclosed in Data Room Index.
(h) Except as disclosed in Data Room Index, no GC Entity maintains or
participates in, nor is obligated to contribute to, nor has ever maintained or
participated in, nor been obligated to contribute to, any "MULTIEMPLOYER PLAN"
within the meaning of Section 3(37) of ERISA or any "defined benefit pension
plan" within the meaning of ERISA Section 3(35).
(i) The Audited Domestic Financial Statements fully and accurately reflect
all unfunded Liability under, in connection with or relating to the Employee
Plans.
3.14 REAL PROPERTY.
(a) Data Room Index Item XI and the GC Companies list of active theatre
and office properties, dark leased properties and inactive owned properties
attached hereto as EXHIBIT C contains a true and correct list, as of the date of
this Agreement, of all real property owned, leased, subleased or otherwise
occupied by any the GC Entities (as lessor or lessee),
21
together with a brief description of the location thereof (the "REAL PROPERTY",
and the leases or subleases relating thereto, including any amendments and
renewal letters, are herein called the "REAL PROPERTY LEASES"). Each of the Real
Property Leases provided for review by the Purchasers' Representatives in the
Data Room was a correct and complete copy of such Real Property Lease, and none
of the Real Property Leases has been amended or modified except as set forth in
Data Room Index.
(b) Subject to the terms of the Real Property Leases, the GC Entities have
a valid and subsisting leasehold estate in and the right to quiet enjoyment of
each of the Real Properties leased by them for the full term of the lease
thereof. Subject to assumption pursuant to the Plan of each Real Property Lease
not previously assumed by a GC Entity, each Real Property Lease is in full force
and effect and is a legal, valid and binding agreement, of the GC Entity that is
a party thereto, and, assuming that it is a legal, valid and binding agreement
of the other party thereto, is enforceable in accordance with its terms against
the parties thereto except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to the enforcement of creditors' rights generally
and by general principles of equity. Except for the Chapter 11 Cases, there is
no material default by the GC Entities under any Real Property Lease or, to the
Knowledge of any of the GC Entities, any material default thereunder by the
other party thereto. None of the GC Entities owe brokerage, commissions or
finders fees with respect to any such Real Property Lease or leased Real
Property, except to the extent that the any of the GC Entities may renew the
term of any such Real Property Lease, in which case any such commissions and
fees would be in amounts that are reasonable and customary for premises similar
to those leased, given their intended use and terms. Since the Last Statement
Date, none of the GC Entities, has exercised any option or right to (i) cancel
or terminate any Real Property Lease, (ii) lease additional premises, (iii)
materially reduce or relocate the premises demised under any Real Property
Lease, (ii) lease additional premises, (iii) reduce or relocate the premises
demised under any Real Property Lease or (iv) purchase any real property, which
transaction is pending.
(c) None of the GC Entities has received notice of any pending zoning or
other land-use regulation Actions or Proceedings applicable to the Real Property
that would have a Material Adverse Effect.
3.15 TANGIBLE PERSONAL PROPERTY. The GC Entities are in possession of and
have good and marketable title to, or have valid leasehold interests in or valid
rights under contract to use, all material tangible personal property used in
the conduct of their respective businesses, including all tangible personal
property reflected on the Financial Statements for the period ended on the Last
Statement Date and tangible personal property acquired since that date, other
than property disposed of since such date in the Ordinary Course of Business.
All such tangible personal property is free and clear of all Liens, other than
Permitted Liens or as disclosed in Data Room Index.
22
3.16 INTELLECTUAL PROPERTY RIGHTS.
(a) Data Room Index is a GC Companies, Inc. Trademark Status Report and
lists all of the GC Entities United States or foreign registrations or
applications issued by, filed with or recorded by any Governmental or Regulatory
Authority as of the date listed on such report; all of such registrations and
applications are in full force and effect and all necessary registration,
maintenance and renewal fees in connection therewith have been paid and all
necessary documents and certificates in connection therewith have been filed
with the relevant patent, copyright, trademark or other authority in the United
States or foreign jurisdictions, as the case may be, for the purpose of
maintaining the registrations or applications for registration of such
Intellectual Property, except as otherwise disclosed in such report. All the
Intellectual Property owned by the GC Entities is free and clear of any and all
Liens, other than Permitted Liens or the lien imposed by any license or other
permission to use itself. None of the GC Entities has any Knowledge that such
Intellectual Property is being infringed by any other Person or that the GC
Entities are infringing any Intellectual Property of any other Person. As of the
date of this Agreement, no material claim is pending or, to the Knowledge of any
GC Entity, threatened to such effect or with respect to the ownership, validity,
license or use of, or any infringement resulting from, the GC Entities'
Intellectual Property.
(b) All material licenses, agreements and permissions pertaining to
Intellectual Property owned, licensed or otherwise used by the GC Entities (the
"INTELLECTUAL PROPERTY AGREEMENTS") are contained in the Data Room Index and
have been made available to the Purchasers' Representatives. The consummation of
the transactions contemplated by this Agreement will neither violate nor result
in the breach, modification, cancellation, termination or suspension of the
Intellectual Property Agreements and the GC Entities are in compliance with, and
have not breached any term of, the Intellectual Property Agreements and, to the
Knowledge of the Seller, all of the other parties to such Intellectual Property
Agreement are in compliance with, and have not breached, any of the terms
thereof. Each GC Entity owns all right, title and interest in and to, or has
rights sufficient to use, as currently used by such GC Entity, to all
Intellectual Property used the GC Entities.
3.17 CONTRACTS.
(a) The Data Room Index and the Contracts Schedule contains a correct and
complete list of each of the following Contracts or other arrangements (correct
and complete copies or, if not in writing, reasonably complete and accurate
written descriptions of which, together with all material amendments and
supplements thereto and all written waivers of any terms thereof were furnished
or made available to the Purchasers' Representatives in the Data Room or, with
respect to Contracts not listed in the Data Room Index, upon the Purchasers'
request), to which any GC Entity is a party or by which any of its Assets and
Properties is bound, including:
23
(i) (A) all Contracts providing for a commitment of employment or
consultation services for a special term that involve the payment or
potential payment pursuant to the terms of any GC Entity of more than
$100,000 and that are not cancelable without penalty within ninety (90)
days and (B) all Contracts involving an obligation of any GC Entities to
make material severance or other payments (with or without notice, passage
of time or both) to any Person in connection with, or as a consequence of,
the transactions contemplated hereby or to any employee, other than with
respect to salary payments in the Ordinary Course of Business;
(ii) all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of any Seller or GC Entity to
engage in any business activity or compete with any Person or prohibiting
or limiting the ability of any Person to compete with the Seller or GC
Entity.
(iii) all partnership, joint venture, shareholders' or other similar
Contracts with any Person;
(iv) all material Contracts with independent contractors, sales
agents, insurance agents, insurance brokers, and other types of insurance
producers and distributors;
(v) all material Contracts relating to any prospective Business
Combination;
(vi) all material Contracts between or among any GC Entity, on the one
hand, and any current or former officer, director, stockholder, Affiliate
or Associate of any Seller or GC Entity, or any Associate of any such
officer, director, stockholder or Affiliate on the other hand;
(vii) all collective bargaining Contracts;
(viii) all leases of material personal property;
(ix) any Contract or series of related Contracts that involves
receipts, expenditures, performance of services or delivery of goods or
material by the GC Entities of an amount or value in excess of $20,000,
except for film licensing contracts and orders for trade goods, services
and supplies in the Ordinary Course of Business;
(x) any fidelity or surety bond;
(xi) all Contracts that (A) limit or contain restrictions on the
ability of the GC Entities to declare or pay dividends on, to make any
other distribution in respect
24
of, or to issue or purchase, redeem or otherwise acquire, its capital
stock, to incur Indebtedness, to incur or suffer to exist any Lien, to
purchase or sell any Assets and Properties, to change the lines of business
in which it participates or engages or to engage in any Business
Combination, (B) require any GC Entity to maintain specified financial
ratios or levels of net worth or other indicia of financial condition or
(C) require any GC Entity to maintain insurance in certain amounts or with
certain coverages;
(xiii) all powers of attorney or comparable delegations of authority;
and
(xiv) all other Contracts or series of related Contracts that involve
the payment or potential payment pursuant to the terms of any such Contract
by the GC Entity of more than $50,000 for a term longer than six months
from the date of this Agreement and that are not cancelable without penalty
upon the GC Entity giving at least 30 days notice.
(b) Subject to the Chapter 11 Cases, each Contract required to be
disclosed in the Data Room Schedule pursuant to subsection (a) above is in full
force and effect and is a legal, valid and binding agreement of the GC Entities
party thereto, and, assuming that it is a legal, valid and binding agreement of
the other party thereto, is enforceable in accordance with its terms against the
parties thereto, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to the enforcement of creditors' rights generally
and by general principles of equity and except for such Contracts, the
non-enforceability of which would not reasonably be expected to have a Material
Adverse Effect. Subject to the Chapter 11 Cases, there is no default by the GC
Entity party thereto under any such Contract nor, to the Knowledge of the
Seller, any default thereunder by the other party thereto that would reasonably
be expected to have a Material Adverse Effect.
3.18 PERMITS AND LICENSES. The Data Room Index contains a true and complete
list of all material Permits issued to the GC Entities, as of the date of this
Agreement, setting forth the owner, the function and the expiration and renewal
date of each. Each such Permit is in full force and effect; and none of the GC
Entities is in default (or with the giving of notice or lapse of time or both,
would be in default) under any such Permit, except where such default would not
result in a Material Adverse Effect.
3.19 INSURANCE. The Data Room Index contains a correct and complete list of
all liability, property, workers' compensation, fidelity, directors' and
officers' liability, social, welfare pension and other insurance policies in
effect on the date of this Agreement that are issued to the GC Entities and that
insure the business, operations or employees of the GC Entities. The insurance
coverage provided by the policies issued to the GC Entities will not terminate
or lapse by reason of the Transaction. Each such policy is in full force and
effect, all premiums due thereunder have been paid when due and no GC Entity has
received any
25
notice of cancellation or termination in respect of any such policy or is in
default thereunder. To the Knowledge of the Seller, no insurer under any policy
referred to in this Section is denying liability with respect to a claim
thereunder or defending under a reservation of rights clause.
3.20 RELATED PARTY TRANSACTIONS. Except for intercompany payables, there is
no Indebtedness between any of the GC Entities on the one hand, and any officer,
director, stockholder (including any GC Entity), Affiliate or Associate of any
of the GC Entities, or any Associate of any such officer, director, stockholder
or Affiliate, on the other hand, (b) none of the GC Entities provides any
assets, services or facilities to any such officer, director, stockholder
(including any GC Entity) or any such Affiliate or Associate, (c) no officer,
director, stockholder (including any GC Entity) or any such Affiliate or
Associate has any interest, directly or indirectly, in any entity which
furnishes or sells any goods or services or provides any facilities to any
Affiliate, except that ownership of no more than 5% of the outstanding capital
stock of a publicly traded corporation shall not be deemed to be an interest for
the purposes of this SECTION 3.20.
3.21 EMPLOYEES; LABOR RELATIONS. Except as disclosed by the Data Room
Index, no unfair labor practice complaint or sex or age discrimination or
harassment claim is pending against the GC Entities before any Governmental or
Regulatory Authority. There has been no material work stoppage or strike by
employees of any of the GC Entities, and to the Seller' Knowledge, none have
been threatened.
3.22 ENVIRONMENTAL MATTERS. Except as disclosed under the Data Room Index:
(a) All of the Assets and Properties (including underlying groundwater)
owned or leased by the GC Entities have been, and continue to be, owned or
leased by the GC Entities in material compliance with all Environmental, Health
and Safety Requirements.
(b) There have been no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for information received
by any of the GC Entities with respect to any alleged violation
of any Environmental, Health and Safety Requirement that, singly
or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, or
(ii) complaints, notices or inquiries to any of the GC Entities
regarding potential liability under any Environmental, Health or
Safety Requirement that, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
26
(c) There have been no releases of hazardous materials at, on or under any
property now or previously owned or leased by any GC Entity that, singly or in
the aggregate, have or may be reasonably be expected to have a Material Adverse
Effect.
(d) No property now or previously owned or leased by any GC Entity is
listed or proposed for listing on the National Priorities List pursuant to
CERCLA or, to the Seller's Knowledge, on the CERCLIS or any similar federal or
state list of sites requiring investigation or clean-up under any Environmental,
Health or Safety Requirement.
(e) There are no underground storage tanks, active or abandoned, including
petroleum storage tanks, on or under any property now or previously owned or
leased by any GC Entity that, singly or in the aggregate, have or may be
reasonably be expected to have a Material Adverse Effect.
(f) None of the GC Entities has directly transported or directly arranged
for the transportation of any hazardous material to any location that is listed
or proposed for listing on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar federal or state list or that is the subject of
federal, state or local enforcement actions or other investigations, which may
lead to material claims against any GC Entity for any remedial work, damage to
natural resources or personal injury, including claims under CERCLA.
(g) There are no polychlorinated biphenyls or friable asbestos present at
any property now or previously owned or leased by any GC Entity that, singly or
in the aggregate, have or may be reasonably be expected to have a Material
Adverse Effect.
(h) No conditions exist at, on or under any property now or previously
owned or leased by any GC Entity that, with the passage of time, the giving of
notice or both, would give rise to liability under any Environmental, Health and
Safety Requirement that, singly or in the aggregate, have or may be reasonably
be expected to have a Material Adverse Effect.
3.23 OTHER NEGOTIATIONS; BROKERS. No agent, broker, finder, investment
banker, financial advisor or other similar third party will be entitled to any
fee, commission or other compensation from any GC Entity in connection with the
Transaction based upon arrangements made by or on behalf of the Seller.
3.24 BANK AND BROKERAGE ACCOUNTS. The Data Room Index sets forth: (a) a
true and complete list of the names and locations of all banks, trust companies,
securities brokers and other financial institutions at which the GC Entities
have an account or safe deposit box or maintains a banking, custodial or trading
relationship, and (b) a true and complete list and description of each such
account, box and relationship, indicating in each case the account number.
27
3.25 TAX With respect to each GC Entity, except as would not reasonably be
expected to have a Material Adverse Effect: (i) all Tax Returns required to be
filed on or before the Effective Date by it with respect to any Taxes have been
timely filed with the appropriate governmental agencies in all jurisdictions in
which such Tax Returns are required to be filed, and all such Tax Returns
correctly reflect, in all material respects its liability for Taxes for the
periods, properties, or events covered thereby; (ii) all Taxes payable with
respect to the Tax returns referred to in the preceding clause, all Taxes
accruable prior to the Effective Date, whether disputed or not, whether or not
shown on any Tax Return, and whether or not currently due or payable, will have
been paid in full prior to the Effective Date, or an adequate accrual will have
been made in accordance with GAAP; (iii) Seller have no Knowledge of any
unassessed Tax deficiencies or of any audits or investigations pending or
threatened against it with respect to any Taxes; (iv) there is in effect no
extension for the filing of any Tax Return and it has not extended or waived the
application of any statute of limitations of any jurisdiction regarding the
assessment or collection of any Tax; (v) no claim has ever been made by any Tax
authority in a jurisdiction in which it does not file Tax returns that it is or
may be subject to taxation by that jurisdiction; (vi) there are no Liens for
Taxes upon any of its assets except for Permitted Liens; and (vii) it has timely
made all deposits required by Law to be made with respect to employees
withholding and other payroll, employment, or other withholding Taxes, including
the portions of such Taxes imposed upon it.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each Purchaser hereby represents and warrants to each Seller as follows:
4.01 ORGANIZATION. Each of the Purchasers is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has full entity power and authority to conduct its business and to own, use
and lease its Assets and Properties.
4.02 AUTHORITY. Each of the Purchasers has the full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the Transaction. The execution, delivery and
performance of this Agreement by each Purchaser and the consummation by each
Purchaser of the Transaction has been duly and validly approved by the Board of
Directors of each Purchaser and by AMCE's preferred stockholder, and no other
corporate action on the part of any Purchaser is necessary to authorize the
execution, delivery and performance by any Purchaser of this Agreement and the
consummation by any Purchaser of the Transaction. This Agreement has been duly
and validly executed and delivered by each Purchaser and constitutes the legal,
valid and binding obligation of such Purchaser enforceable against such
Purchaser in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent
28
conveyance, reorganization, moratorium or other similar laws relating to the
enforcement of creditors' rights generally and by general principles of equity.
4.03 NO CONFLICTS. Subject to confirmation of the Plan by the Bankruptcy
Court, the execution and delivery by each Purchaser of this Agreement, the
performance by each Purchaser of its obligations under this Agreement, and the
consummation of the Transaction does not and will not, except in each case where
such conflict, breach or Lien creation individually or in the aggregate would
not be reasonably expected to have a Material Adverse Effect: (a) conflict with
or result in a violation or breach of any of the terms, conditions or provisions
of Organizational Documents of such Purchaser; (b) conflict with or result in a
violation or breach of any term or provision of any Law or Order applicable to
such Purchaser or any of its Assets and Properties; (c) conflict with or result
in a violation or breach of, constitute (with or without notice or lapse of time
or both) a default under, require such Purchaser to obtain any consent, approval
or action of, make any filing with or give any notice to, any Person as a result
or under the terms of, or result in or give to any person any right of
termination, cancellation, acceleration or modification in or with respect to,
any material Contract or Permit to which any such Purchaser is a party or by
which its respective Assets and Properties are bound; or (d) result in the
creation or imposition of any Lien upon any of the Assets and Properties of such
Purchaser.
4.04 LEGAL PROCEEDINGS. Except for the objection of Fleet National Bank,
N.A. and the Acting U.S. Trustee entered in the Chapter 11 Cases, there are no
Actions or Proceedings pending against such Purchaser or any of its Assets and
Properties which (a) could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting or make illegal the
consummation of any of the Transaction or (b) could reasonably be expected,
individually or in the aggregate with other such Actions or Proceedings, to have
a Material Adverse Effect on the ability of the Purchasers to consummate the
Transaction or to hinder or delay such consummation.
4.05 FINANCING. The Purchasers have sufficient cash or cash equivalents on
hand or available under its revolving credit facility to fund the cash
requirements of the Plan.
4.06 NEW AMCE STOCK. Upon issuance and delivery of the New AMCE Stock as
contemplated by the Plan, such New AMCE Stock will be duly authorized, validly
issued, fully paid and non-assessable, free of all preemptive or similar rights.
4.07 SEC DOCUMENTS. Since October 31, 1997, AMCE has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by AMCE with the SEC pursuant to the reporting requirements of the Exchange Act
(all of the foregoing filed prior to the date hereof and after October 31, 1997,
and all exhibits included therein and the financial statements and schedules
thereto and documents incorporated by reference therein, the "AMCE SEC
DOCUMENTS"). As of their respective date or as heretofore amended, the AMCE SEC
Documents complied in all material respects with the
29
reporting requirements of the Exchange Act or with the requirements of the
Securities Act of 1933 with respect to documents filed thereunder.
ARTICLE V
COVENANTS OF THE PARTIES
5.01 CONDUCT OF BUSINESS PRIOR TO THE CLOSING. From the date hereof until
Closing, the Seller covenants and agrees to conduct the GC Business in the
Ordinary Course of Business and in accordance with the Interim Operating
Agreement, except as may be otherwise expressly provided for by this Agreement
or the Plan or by the Bankruptcy Court.
5.02 LOI PROVISIONS. From the date hereof until the Closing, the binding
provisions of the LOI in Section 3 (except for Section 3(c))thereof shall remain
in full force and effect.
5.03 NOTICE OF CERTAIN MATTERS. Each of the Seller and Purchasers covenant
and agree to give prompt notice in writing to the other. (a) if it becomes
actually aware that any representation or warranty of it contained herein was
not true and correct in any material respect as of the date hereof or will not
be true and correct in any material respect as of the Effective Date, (b) if it
becomes actually aware of the occurrence of any event which will result in the
failure to satisfy a condition specified in Article VI hereof, and (c) of any
written notice or other communication in writing from any third party alleging
that the consent of such third party is or may be required in connection with
the Transaction. The party giving such notice will use all reasonable efforts,
and shall be entitled to use, any and all efforts, to cure any such inaccuracy
or failure or to obtain such consent prior to the Closing.
5.04 FURTHER ACTION. Prior to the Closing, each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably required or advisable to carry out the provisions
hereof and give effect to the Transaction.
5.05 SEVERANCE. Subject to Closing, the Reorganized Debtors will provide
severance benefits in accordance with GCX's existing severance policy to GCX
Home Office, National Office and VIP Ticket Office employees if (i) their
employment is terminated on the Effective Date, (ii) their employment is
terminated at a date beyond the Effective Date specified by the Reorganized
Debtors (in which case they must work the specified time period after the
Effective Date to be eligible for severance) or (iii) they are offered a
continuing position at their current compensation level, no later than June 30,
2002, but the position offered is not located in Boston and they choose within
two weeks after such offer not to accept the offer of employment. The provisions
of this Section shall supercede and replace that certain letter agreement
regarding severance dated December 6, 2001 between AMCE and GCX. In addition,
the provisions of AMCE's letter dated December 19,
30
2001 (a copy of which is attached hereto as EXHIBIT D) delivered pursuant to
Interim Operating Agreement Section 2(r) shall be unaffected.
ARTICLE VI
CONDITIONS TO CLOSING
6.01 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment and satisfaction of each of the following conditions prior to
the Effective Date, excluding only such conditions as may be waived by Seller:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. (i) The representations and
warranties of Purchasers contained in this Agreement shall be true and correct
in all material respects as of the Closing with the same force and effect as if
made as of the Closing (other than such representations and warranties which
address matters only as of a particular date, which shall be true and correct in
all material respects as of such date), except for breaches that individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect, (ii) all of the covenants contained in this Agreement to be complied
with by Purchasers on or before the Closing shall have been complied with before
the Closing, except for breaches that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect, and (iii) Seller shall
have received a certificate of the Purchasers to such effect signed by a duly
authorized officer thereof.
(b) LEGAL ACTION OR PROCEEDING. There shall be no Action or Proceeding
pending or threatened seeking to enjoin, restrain, prohibit or make illegal or
impose any materially adverse conditions in connection with, the consummation of
the Transaction.
(c) CONFIRMATION ORDER. The Plan shall have been confirmed by the
Bankruptcy Court and the Confirmation Order shall have become a Final Order.
(d) GOVERNMENTAL FILINGS AND CONSENTS. All governmental orders, approvals
and consents to the transactions contemplated by this Agreement relating to the
Transaction shall have been obtained and be in effect on the Closing Date,
except to the extent that the failure to obtain any such consent would not be
considered material by a reasonable seller or have the effect of making the
Transactions contemplated by this Agreement illegal or otherwise prohibit
consummation of such Transactions. Any applicable waiting periods (including any
extensions thereof) under the HSR Act relating to the Transaction contemplated
hereby shall have expired or otherwise been terminated.
(e) ADDITIONAL DOCUMENTATION. Each of the following documents must have
been delivered to Seller by the Purchasers:
31
(i) a certificate of each Purchaser's Secretary or an Assistant
Secretary certifying the resolutions of the Purchaser's Board of Directors
approving the Transaction and the names and signatures of its officers
authorized to sign this Agreement and any other document required to be
delivered hereunder;
(ii) a certificate certifying the accuracy of the Purchasers'
representations and warranties as described in Section 6.01(a) of this
Agreement; and
(iii) such other documents as Seller may reasonably request for the
purpose of (A) evidencing the accuracy of any Purchasers' representations
and warranties, (B) evidencing the performance by either Purchaser of, or
the compliance by either Purchaser with, any covenant or obligation
required to be performed or complied with by such Purchaser, (C) evidencing
the satisfaction of any condition referred to in this Section 6.01, or (D)
otherwise facilitating the consummation or performance of the Transaction.
6.02 CONDITIONS TO OBLIGATIONS OF PURCHASERS. The obligations of the
Purchasers to consummate the Transaction shall be subject to the fulfillment and
satisfaction of each of the following conditions prior to the Effective Date,
excluding only such conditions as may be waived by the Purchasers.
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. (i) The representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects as of the Closing with the same force and effect as if
made as of the Closing (other than such representations and warranties which
address matters only as of a particular date, which shall be true and correct in
all material respects as of such date), except for breaches that individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect (ii) all of the covenants contained in Article 5 of this Agreement to be
complied with by Seller on or before the Closing shall have been complied with
before the Closing, except for breaches that individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect, and (iii)
Purchasers shall have received a certificate of Seller to such effect signed by
Seller and a duly authorized officer thereof.
(b) LEGAL ACTION OR PROCEEDING. There shall be no Action or Proceeding
pending or threatened seeking to enjoin, restrain, prohibit or make illegal or
impose any materially adverse conditions in connection with, the consummation of
the Transaction, or shall otherwise have a Material Adverse Effect.
(c) CONFIRMATION ORDER. The Plan shall have been confirmed by the
Bankruptcy Court and the Confirmation Order shall have become a Final Order.
(d) GOVERNMENTAL FILINGS AND CONSENTS. All governmental orders, approvals
and consents to the transactions contemplated by this Agreement relating to the
Transaction
32
shall have been obtained and be in effect on the Closing Date, except to the
extent that the failure to obtain any such consent would not be considered
material by a reasonable seller or have the effect of making the Transactions
contemplated by this Agreement illegal or otherwise prohibit consummation of
such Transactions. Any applicable waiting periods (including any extensions
thereof) under the HSR Act relating to the Transaction contemplated hereby shall
have expired or otherwise been terminated.
(e) ADDITIONAL DOCUMENTATION. Each of the following documents must have
been delivered to Purchasers:
(i) a certified copy of the Amended and Restated Certificate of
Incorporation of GCX as filed with the Delaware Secretary of State;
(ii) a certificate of the Seller's Secretary or an Assistant Secretary
certifying the resolutions of the Seller's Board of Directors approving the
Transaction and names and signatures of its officers authorized to sign
this Agreement and any other document required to be delivered hereunder;
(iii) a certificate certifying the accuracy of the Seller's
representations and warranties as described in Section 6.02(a) of this
Agreement;
(iv) stock certificates evidencing the Purchased Shares, duly endorsed
to the appropriate Purchaser with all required stock transfer tax stamps
affixed or provided for in order to transfer such Purchased Shares to
Purchasers pursuant to this Agreement;
(v) certified copies of the Confirmation Order and the docket in the
Chapter 11 Cases demonstrating that the Confirmation Order has become a
Final Order of the Bankruptcy Court; and
(vi) such other documents as Purchasers may reasonably request for the
purpose of (A) evidencing the accuracy of the Seller's representations and
warranties, (B) evidencing the performance by the Seller of, or the
compliance by the Seller with, any covenant or obligation required to be
performed or complied with by the Seller, (C) evidencing the satisfaction
of any condition referred to in this Section 6.02, or (D) otherwise
facilitating the consummation or performance of the Transaction.
(f) BANKRUPTCY ASSUMPTION; REJECTION. Each material executory contract and
unexpired lease (which includes all theatre leases) of any Debtor not previously
assumed, rejected or deemed to have been rejected shall have been assumed,
rejected or assumed and assigned to a GCX or AMCE Subsidiary designated by AMCE,
as determined by AMCE in its sole discretion, except (i) as otherwise provided
in the Plan or (ii) if the counterparty to
33
such a contract or lease objects to any such assignment and the Bankruptcy Court
does not approve such assignment. Each such executory contract and unexpired
lease shall have been assumed, rejected or assumed and assigned, as the case may
be, as designated by AMCE, by a Final Order satisfactory to AMCE, which may be
the Confirmation Order.
(g) LEASE AMENDMENTS. Each of the lease amendments referenced in the table
below shall have become effective:
----------------------------------------------------------------------------------------------------
PROPERTY STATUS OF AMENDMENT
----------------------------------------------------------------------------------------------------
Irving Mall, Irving, Texas (Unit Fully executed, but not effective until Tenant assumes
984) the Lease; but if the Lease is not assumed on or
before December 31, 2001, the Amendment is null and
void.
----------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Creek, Austin, Texas Fully executed, but not effective until Tenant
(Unit 982) assumes the Lease; but if the Lease is not assumed on
or before December 31, 2001, the Amendment is null and
void.
----------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Philadelphia, Amendment is fully executed but not effective
Pennsylvania (Unit 965) until Tenant assumes Lease in bankruptcy.
----------------------------------------------------------------------------------------------------
ARTICLE VII
TERMINATION
7.01 GROUNDS FOR TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual agreement of AMCE and GCX;
(b) by AMCE, if the Seller materially breaches this Agreement, including
(i) if the representations and warranties of the Seller are materially
incorrect; (ii) a breach by the Seller of any of its covenants contained in this
Agreement, except for breaches that individually or in the aggregate would not
be reasonably expected to have a Material Adverse Effect; and (iii) if any of
the conditions in Section 6.02 has not been satisfied as of the Effective Date
and AMCE has not waived such condition on or before the Effective Date, and the
Seller fails to cure such, and any one, of the breaches outlined above within
thirty (30) days after AMCE gives GCX written notice of such breach;
(c) by AMCE, if the Seller breaches the LOI, the Interim Operating
Agreement, the Plan or Bankruptcy Court order executed and or entered, as
applicable, in connection with the Transaction, except for breaches that
individually or in the aggregate would not be reasonably expected to have a
Material Adverse Effect, and Seller fails to cure such, and any one, of the
breaches outlined above within thirty (30) days after AMCE gives GCX written
notice of such breach;
34
(d) by GCX, if any of the Purchasers materially breaches this Agreement,
including (i) if the representations and warranties of the Purchasers are
materially incorrect; (ii) a breach by any of the Purchasers of any of its
covenants contained in this Agreement, except for breaches that individually or
in the aggregate would not be reasonably expected to have a Material Adverse
Effect; and (iii) if any of the conditions in Section 6.01 has not been
satisfied as of the Effective Date and GCX has not waived such condition on or
before the Effective Date, and Purchasers fail to cure such, and any one, of the
breaches outlined above within thirty (30) days after GCX gives AMCE written
notice of such breach;
(e) by GCX if any of the Purchasers materially breaches the LOI, the
Interim Operating Agreement, the Plan, or any Bankruptcy Court order executed
and or entered, as applicable, in connection with the Transaction, except for
breaches that individually or in the aggregate would not be reasonably expected
to have a Material Adverse Effect, and Purchasers fail to cure such, and any
one, of the breaches outlined above within thirty (30) days after GCX gives AMCE
written notice of such breach;
(f) by either party upon termination of the LOI or the Interim Operating
Agreement.
7.02 REMEDIES.
(a) EFFECT OF TERMINATION. If this Agreement is terminated as permitted by
SECTION 7.01, such termination shall be without liability of any party to any
other party to this Agreement except as provided within Section 3(f)(ii) of the
LOI.
(b) SPECIFIC PERFORMANCE. The parties hereto recognize that any breach of
the terms of this Agreement may give rise to irreparable harm for which money
damages would not be an adequate remedy, and accordingly agree, that, in
addition to other remedies, the non-breaching party will be entitled to enforce
the terms of this Agreement by a decree of specific performance without the
necessity of proving the inadequacy of a remedy of money damages and without the
posting of any bond or other security.
ARTICLE VIII
MISCELLANEOUS
8.01 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made herein or in any certificate, instrument or document delivered
pursuant hereto shall expire with and not survive beyond the Closing and
thereafter no party hereto or any shareholder, director, officer, employee or
Affiliate of such party shall be under any liability whatsoever (whether under
this Agreement or otherwise) with respect to any representations or warranties.
35
8.02 NOTICES. All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission or mailed by
prepaid first class certified mail, return receipt requested, or delivered by a
recognized overnight courier service prepaid, to the parties at the following
addresses or facsimile numbers:
(a) If to Purchasers, to:
AMC Entertainment Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which will not itself constitute notice):
▇▇▇▇▇▇▇ & ▇▇▇▇ ▇.▇.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Seller, to:
GC Companies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: G. ▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which will not itself constitute notice):
▇▇▇▇▇▇▇ Procter LLP
Exchange Place
Boston, Massachusetts 01209
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (b) if delivered by facsimile transmission to the facsimile number as
provided for in this Section, be deemed given upon receipt, (c) if delivered by
mail in the manner described above to (i) an address in
36
the United States as provided in this Section, be deemed given on the earlier of
the third Business Day following mailing or upon receipt or (ii) an address
outside of the United States as provided in this Section, be deemed given on the
earlier of the tenth Business Day following mailing or upon receipt and (d) if
delivered by overnight courier to the address as provided for in this Section,
be deemed given on the earlier of the first Business Day following the date sent
by such overnight courier or upon receipt (in each case regardless of whether
such notice request or other communication is received by any other Person to
whom a copy of such notice is to be delivered pursuant to this Section). A party
from time to time may change its address, facsimile number or other information
for the purpose of notices to that party by giving notice specifying such change
to the other party hereto.
8.03 ENTIRE AGREEMENT. Except for the LOI and the Interim Operating
Agreement and except as provided in Article V above or in Section 8.05 below,
this Agreement supersedes all prior discussions and agreements between the
parties with respect to the subject matter hereof and thereof and contain the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof.
8.04 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party will pay its own costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
8.05 CONFIDENTIALITY. The Purchasers agree that, except as provided in the
LOI or this Agreement, that certain letter agreement respecting confidentiality
and nondisclosure dated June 29, 2001 between GCX and AMCE shall remain in
effect. The provisions of this Section shall survive the termination of this
Agreement, but such letter agreement shall terminate and be merged into the
Closing.
8.06 AMENDMENT AND WAIVER. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by each of the parties, or in the case of a waiver, by
the party against whom the waiver is to be effective, subject in each case to
approval of the Bankruptcy Court where required. No failure or delay by any
party in exercising any right, power or privilege under this Agreement will
operate as a waiver of such right, power privilege nor will any single or
partial exercise of such right, power or privilege preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege.
8.07 NO THIRD PARTY BENEFICIARY. The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective
successors or permitted assigns. It is not the intention of the parties to
confer third-party beneficiary rights, and this Agreement does not confer any
such rights upon any other Person.
8.08 NO ASSIGNMENT BINDING EFFECT. Neither this Agreement nor any rights,
interest, or obligation hereunder may be assigned (by operation of law or
otherwise) by any
37
Seller without the prior written consent of AMC, and any attempt to do so will
be void; PROVIDED, HOWEVER, that Purchaser may assign all of its rights and
obligations under this Agreement to a wholly-owned subsidiary to Purchaser
without obtaining the consent of Seller as long as such assignment does not
relieve Purchaser of its obligations under this Agreement and is evidenced by a
written assignment agreement in which the assignee expressly assumes such rights
and obligations. Subject to the preceding sentence, this Agreement is binding
upon, inures to the benefit of and is enforceable by the parties hereto and
their respective heirs, executors, personal representatives, successors and
assigns.
8.09 SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance here from and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
8.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of
New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of
New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of
New York.
8.11 CONSTRUCTION. The parties hereto agree that this Agreement is the
product of negotiation between parties and individuals, all of whom were
represented by counsel, and each of whom had an opportunity to participate in
and did participate in the drafting of each provision hereof. Accordingly,
ambiguities in this Agreement, if any, shall not be construed strictly or in
favor of or against any party hereto but rather shall be given a fair and
reasonable construction.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which will be deemed an original, but all of which together
will constitute one and the same instrument.
*** SIGNATURE PAGE FOLLOWS ***
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"SELLER"
GC COMPANIES, INC.
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
G. ▇▇▇▇ ▇▇▇▇▇▇▇, President and
Chief Operating Officer
"PURCHASERS"
AMC ENTERTAINMENT INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and Chief
Financial Officer
AMERICAN MULTI-CINEMA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and Chief
Financial Officer
CENTERTAINMENT
DEVELOPMENT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and Chief
Financial Officer