Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
MARQUEE HOLDINGS INC.,
MARQUEE INC.
and
AMC ENTERTAINMENT INC.
DATED AS OF JULY 22, 2004
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TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER
Section 1.1 The Merger..........................................................................2
Section 1.2 Closing.............................................................................2
Section 1.3 Effect of the Merger................................................................2
Section 1.4 Certificate of Incorporation and Bylaws of Surviving Corporation....................3
Section 1.5 Directors and Officers of the Surviving Corporation.................................3
ARTICLE II CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities............................................................3
Section 2.2 Exchange of Certificates; Payment of Merger Consideration...........................4
Section 2.3 Stock Transfer Books................................................................6
Section 2.4 Dissenting Shares...................................................................6
Section 2.5 Company Stock Options, Equity Awards and Deferred Cash Awards.......................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Corporate Existence and Power.......................................................7
Section 3.2 Capitalization......................................................................8
Section 3.3 Corporate Authorization............................................................10
Section 3.4 No Conflict; Required Filings and Consents.........................................11
Section 3.5 SEC Filings........................................................................12
Section 3.6 Permits; Compliance With Law.......................................................12
Section 3.7 Financial Statements...............................................................13
Section 3.8 Absence of Certain Changes.........................................................13
Section 3.9 No Undisclosed Liabilities.........................................................13
Section 3.10 Litigation.........................................................................14
Section 3.11 Taxes..............................................................................14
Section 3.12 Contracts and Commitments..........................................................15
Section 3.13 Employee Benefit Plans.............................................................15
Section 3.14 Labor and Employment Matters.......................................................17
Section 3.15 Real Property; Leases..............................................................18
Section 3.16 Environmental Matters..............................................................20
Section 3.17 Insurance..........................................................................21
Section 3.18 Affiliate Transactions.............................................................21
Section 3.19 Intellectual Property..............................................................21
Section 3.20 Title to Assets....................................................................22
Section 3.21 Brokers............................................................................22
Section 3.22 Opinion of Financial Advisor.......................................................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 4.1 Corporate Existence and Power......................................................23
Section 4.2 Corporate Authorization............................................................23
Section 4.3 No Conflict; Required Filings and Consents.........................................24
Section 4.4 Prior Activities...................................................................24
Section 4.5 Financing..........................................................................24
ARTICLE V COVENANTS
Section 5.1 Conduct of Business by the Company Pending the Closing.............................25
Section 5.2 Tax Covenant.......................................................................28
ARTICLE VI ADDITIONAL AGREEMENTS
Section 6.1 Proxy Statement....................................................................29
Section 6.2 Company Stockholders' Meeting......................................................30
Section 6.3 Access to Information; Confidentiality.............................................30
Section 6.4 No Solicitation by the Company.....................................................31
Section 6.5 Appropriate Action; Consents; Filings..............................................33
Section 6.6 Public Announcements...............................................................34
Section 6.7 Financing..........................................................................34
Section 6.8 [INTENTIONALLY OMITTED]............................................................35
Section 6.9 Employee Matters...................................................................35
Section 6.10 Directors' and Officers' Indemnification and Insurance.............................36
Section 6.11 Certain Notices....................................................................38
Section 6.12 Solvency Matters...................................................................38
Section 6.13 Post-Closing Change of Control Offer...............................................39
Section 6.14 Enforcement of Voting Agreements...................................................39
ARTICLE VII CLOSING CONDITIONS
Section 7.1 Conditions to Obligations of Each Party under this Agreement.......................39
Section 7.2 Additional Conditions to Obligations of Parent and Merger Sub......................40
Section 7.3 Additional Conditions to Obligations of the Company................................41
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination........................................................................42
Section 8.2 Effect of Termination..............................................................43
Section 8.3 Amendment..........................................................................44
Section 8.4 Waiver.............................................................................45
Section 8.5 Fees and Expenses..................................................................45
ARTICLE IX GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties.....................................46
Section 9.2 Notices............................................................................46
Section 9.3 Certain Definitions................................................................47
Section 9.4 Headings...........................................................................54
Section 9.5 Severability.......................................................................54
Section 9.6 Entire Agreement...................................................................54
Section 9.7 Assignment.........................................................................54
Section 9.8 Parties in Interest................................................................54
Section 9.9 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury....................55
Section 9.10 Specific Performance...............................................................56
Section 9.11 Counterparts.......................................................................56
Exhibits
Apollo Consent Exhibit A
Trust Voting Agreement Exhibit B
Certificate of Incorporation of Merger Sub Exhibit C
Index of Defined Terms
2004 Balance Sheet.............................22
Acquisition Proposal...........................47
Affected Employee..............................35
Affiliate......................................47
Agreement.......................................1
Alternative Financing..........................34
Apollo Consent..................................1
Apollo Investment Agreement....................48
Apollo Investors...............................48
Apollo Standstill Agreement....................48
beneficial ownership...........................48
Business Day...................................48
CERCLA.........................................20
Certificate.....................................5
Certificate of Merger...........................2
Change of Control Distribution..................9
Closing.........................................2
Closing Date....................................2
Code............................................6
Commitment Letters.............................25
Common Stock Consideration......................3
Company.........................................1
Company 10-K....................................8
Company Alternative Transaction................48
Company Bylaws..................................8
Company Capital Stock..........................48
Company Certificate of Incorporation............8
Company Common Stock............................3
Company Convertible Security....................9
Company Deferred Cash Award....................48
Company Deferred Stock Unit....................48
Company Disclosure Letter......................49
Company Employee Plans.........................49
Company ERISA Affiliate........................49
Company Financial Statements...................13
Company Independent Committee...................1
Company Insiders...............................49
Company Leased Real Properties.................18
Company Material Contract......................15
Company Owned Intellectual Property............21
Company Owned Real Properties..................18
Company Permits................................12
Company Preferred Stock.........................8
Company Preferred Stock Certificate of
Designations .................................49
Company Real Properties........................18
Company Recommendation.........................32
Company Restricted Stock Award.................49
Company SEC Documents..........................12
Company Stock Option...........................49
Company Stock Option Plans.....................49
Company Stockholder Approval...................10
Company Stockholders' Meeting..................30
Company Subsequent Determination...............32
Company Subsidiaries............................8
Company Voting Debt.............................9
Confidentiality Agreement......................31
Contract.......................................49
control........................................49
Copyrights.....................................51
Debt Commitment Letter.........................25
Debt Financing.................................25
DGCL............................................1
Dissenting Stockholder..........................7
Effective Time..................................2
Environmental Claim............................50
Environmental Laws.............................50
Environmental Permits..........................50
Equity Commitment Letter.......................24
ERISA..........................................50
Escrow Breakage Expenses.......................50
Exchange Act...................................50
Exchange Agent..................................4
Exchange Fund...................................4
Expense Coverage Fee...........................43
Expenses.......................................50
Financing......................................25
GAAP...........................................50
Governmental Entity............................11
group..........................................50
Hazardous Materials............................51
HSR Act........................................51
Improvements...................................20
Indemnifiable Claim............................37
Indemnified Parties............................36
Intellectual Property..........................51
IRS............................................51
Knowledge......................................51
Law............................................51
Leases.........................................18
Lenders........................................25
License Agreements.............................51
Lien...........................................51
Losses.........................................37
Material Adverse Effect........................51
Merger..........................................1
Merger Consideration............................4
Merger Sub......................................1
Notice of Superior Proposal....................32
Outside Date...................................42
Parent..........................................1
Parent Subscription Agreement...................1
Patents........................................51
PBGC...........................................52
Permitted Encumbrances.........................52
Person.........................................52
Preferred Stock Consideration...................4
Proxy Statement................................29
Release........................................52
Representatives................................30
Required Cash Amount...........................25
Schedule 13E-3.................................29
SEC............................................52
Securities Act.................................52
Significant Subsidiary.........................52
Significant Theatre Properties.................52
Software.......................................51
Solvency Opinion...............................39
Solvent........................................52
Space Leases...................................19
Space Tenant...................................19
Subsidiaries...................................53
Subsidiary.....................................53
Superior Proposal..............................53
Surviving Corporation...........................2
Tax Return.....................................53
Taxes..........................................53
Third Party....................................54
Trademarks.....................................51
Treasury Regulations...........................54
Trust..........................................54
Trust Voting Agreement..........................2
WARN Act.......................................54
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 22, 2004
(this "Agreement"), by and among Marquee Holdings Inc., a Delaware corporation
("Parent"), Marquee Inc., a Delaware corporation and a direct wholly-owned
subsidiary of Parent ("Merger Sub"), and AMC Entertainment Inc., a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of
this Agreement and in accordance with the General Corporation Law of the State
of Delaware (the "DGCL"), Parent, Merger Sub and the Company will enter into a
business combination transaction pursuant to which Merger Sub will merge with
and into the Company (the "Merger");
WHEREAS, a committee of the Board of Directors of the
Company consisting solely of independent directors (the "Company Independent
Committee") has determined that the Merger is advisable to, and in the best
interests of, the holders of Company Common Stock (as defined herein), has
recommended the Merger to the Board of Directors of the Company and has
resolved to recommend that the holders of Company Common Stock vote for the
adoption of this Agreement;
WHEREAS, the respective Boards of Directors of the Company
(taking into account the recommendation of the Company Independent Committee)
and Merger Sub have each determined that the Merger is advisable to, and in
the best interests of, their respective stockholders, have approved this
Agreement and the transactions contemplated hereby (including the Merger) and
have resolved to recommend that their respective stockholders vote for the
adoption of this Agreement;
WHEREAS, Parent, concurrently with the execution of this
Agreement, is approving and adopting this Agreement as the sole stockholder of
Merger Sub;
WHEREAS, as a condition to and as an inducement to each of
Parent's and Merger Sub's willingness to enter into this Agreement, the Apollo
Investors (as defined herein) are concurrently with the execution and delivery
of this Agreement, entering into a voting and consent agreement, in the form
attached hereto as Exhibit A (the "Apollo Consent"), pursuant to which, among
other things, the Apollo Investors are consenting to and agreeing, subject to
the terms and conditions thereof, to vote in favor of certain of the
transactions contemplated herein, including the Merger;
WHEREAS, concurrently with the execution and delivery of
this Agreement and as a condition to the willingness of Parent and Merger Sub
to enter into this Agreement, Parent, certain Affiliates of Parent and the
Apollo Investors are entering into an Subscription Agreement (the "Parent
Subscription Agreement"), pursuant to which such entities will make equity
contributions to Parent;
WHEREAS, as a condition to and as an inducement to each of
Parent's and Merger Sub's willingness to enter into this Agreement, the Trust
(as defined herein) is, concurrently with the execution and delivery of this
Agreement, entering into a voting agreement, in the form attached hereto as
Exhibit B (the "Trust Voting Agreement"), pursuant to which, among other
things, the Trust is agreeing, subject to the terms and conditions thereof, to
vote in favor of the Merger; and
WHEREAS, concurrently with the execution and delivery of
this Agreement, each of ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has agreed to affirm
his existing employment agreement with the Company and to waive, subject to
the terms and conditions contained therein, certain provisions thereof with
respect to, and subject to and effective upon, the consummation of the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions set forth in this Agreement, and in
accordance with the DGCL, at the Effective Time, Merger Sub shall be merged
with and into the Company. As a result of the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
Section 1.2 Closing. The closing of the Merger (the
"Closing") shall take place on the third Business Day after the satisfaction
or waiver (subject to applicable Law) of the conditions (excluding conditions
that, by their nature, cannot be satisfied until the Closing) set forth in
Article VII, unless this Agreement has been theretofore terminated pursuant to
its terms or unless another time or date is agreed to in writing by the
parties hereto; provided that in no event shall the Closing occur before
October 1, 2004 (the actual date of the Closing being referred to herein as
the "Closing Date"). The Closing shall be held at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless another place
is agreed to in writing by the parties hereto. On the Closing Date, the
parties hereto shall cause the Merger to be consummated by filing a
certificate of merger relating to the Merger (the "Certificate of Merger")
with the Secretary of State of the State of Delaware, in such form as required
by, and executed in accordance with the relevant provisions of, the DGCL (the
date and time of such filing, or if another date and time is specified in such
filing, such specified date and time, being the "Effective Time").
Section 1.3 Effect of the Merger. The Merger will have the
effects provided in the applicable provisions of the DGCL. Without limiting
the generality of the foregoing, at the Effective Time, except as otherwise
provided herein, all the property, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
Section 1.4 Certificate of Incorporation and Bylaws of
Surviving Corporation.
(a) Certificate of Incorporation. At the Effective Time, the
certificate of incorporation of the Surviving Corporation shall be amended and
restated in its entirety to read as the certificate of incorporation attached
hereto as Exhibit C, until thereafter changed or amended as provided therein
or by applicable Law, except that Article I thereof shall be amended to read
as follows: "The name of the Corporation is AMC Entertainment Inc."
(b) Bylaws. At the Effective Time, Parent shall take all
actions necessary such that the bylaws of Merger Sub shall become the bylaws
of the Surviving Corporation, until thereafter changed or amended as provided
therein or by applicable Law.
Section 1.5 Directors and Officers of the Surviving
Corporation. At the Effective Time, Parent shall take all actions necessary
such that the directors of Merger Sub immediately prior to the Effective Time
shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the certificate of incorporation and bylaws of the
Surviving Corporation. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation,
each to hold office in accordance with the certificate of incorporation and
bylaws of the Surviving Corporation.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Merger Sub, the
Company or the holders of any of the following securities:
(a) Conversion Generally. Each share of common stock, par
value $0.66 2/3 per share, of the Company (the "Company Common Stock") and
each share of Company Class B Stock, par value $0.66 2/3 per share, in each
case issued and outstanding immediately prior to the Effective Time, shall be
converted into the right to receive an amount in cash equal to $19.50 (the
"Common Stock Consideration"). Each share of Company Preferred Stock (as
defined in Section 3.2) issued and outstanding immediately prior to the
Effective Time not owned of record by Parent or Merger Sub shall be converted
into the right to receive an amount in cash equal to $2,727.27 (the "Preferred
Stock Consideration"). The consideration described in this section and payable
with respect to a particular share of Company Capital Stock is referred to
herein as the "Merger Consideration." Except as provided in this Section 2.1,
at the Effective Time, by virtue of the Merger, all shares of Company Capital
Stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each certificate previously representing
any such shares shall thereafter represent the right to receive the Merger
Consideration payable in respect of such shares of Company Capital Stock.
(b) Cancellation of Company Treasury Shares. Each share of
Company Capital Stock, if any, held by the Company as treasury stock or held
by any Subsidiary of the Company immediately prior to the Effective Time shall
not be affected by the Merger and shall remain outstanding as capital stock of
the Surviving Corporation except that the number of such shares shall be
adjusted in the Merger to maintain relative ownership percentages.
(c) Cancellation of Shares Owned by Parent or Merger Sub.
Each share of Company Capital Stock, if any, held by Parent or Merger Sub
immediately prior to the Effective Time shall be canceled, and no payment
shall be made with respect thereto.
(d) Capital Stock of Merger Sub. Each share of common stock
of Merger Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and be exchanged for one newly and validly issued,
fully paid and nonassessable share of common stock of the Surviving
Corporation.
(e) Change in Shares. If, between the date of this Agreement
and the Effective Time, the outstanding shares of Company Capital Stock shall
have been changed into, or exchanged for, a different number of shares or a
different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the Merger Consideration shall be correspondingly adjusted to provide the
holders of Company Capital Stock the same economic effect as contemplated by
this Agreement prior to such event. For avoidance of doubt, the conversion of
Company Preferred Stock into Company Common Stock pursuant to the Company
Preferred Stock Certificate of Designations shall not give rise to any
adjustment to the Merger Consideration pursuant to this Section 2.1(e).
Section 2.2 .Exchange of Certificates; Payment of Merger
Consideration.
(a) Exchange Agent. Prior to the Effective Time, Parent
shall deposit, or shall cause to be deposited, with a bank or trust company
designated by Parent that is reasonably acceptable to the Company (the
"Exchange Agent"), for the benefit of the holders of shares of Company Capital
Stock for exchange in accordance with this Article II through the Exchange
Agent, cash sufficient to make the cash payments payable pursuant to this
Article II (the "Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, deliver the cash to be paid pursuant to Section
2.1(a) out of the Exchange Fund. Except as contemplated by Section 2.2(d)
hereof, the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, Parent shall cause the Exchange Agent to mail to
each person who was, at the Effective Time, a holder of record of shares of
Company Capital Stock entitled to receive the Merger Consideration pursuant to
Section 2.1(a): (i) a letter of transmittal (which shall be in customary form
and shall specify that delivery shall be effected, and risk of loss and title
to the certificates that formerly evidenced the shares of Company Capital
Stock (each a "Certificate") shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates pursuant to such letter of transmittal.
Subject to the following sentence, upon surrender to the Exchange Agent of a
Certificate for cancellation, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto,
and such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor a
check for the cash which such holder has the right to receive in respect of
such shares of Company Capital Stock formerly represented by such Certificate,
and the Certificate so surrendered shall forthwith be cancelled. Parent's
agreement with the Exchange Agent shall provide that, upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Parent, the Apollo Investors and the Trust shall
be entitled to receive payment of the cash portion of the Merger Consideration
in respect of the shares of Company Capital Stock held by them by wire
transfer of immediately available funds as promptly as practicable after the
Effective Time on the Closing Date, to the account(s) designated by such
stockholder. No interest will be paid or will accrue on any cash payable
pursuant to Section 2.1(a). In the event of a transfer of ownership of shares
of Company Capital Stock that is not registered in the transfer records of the
Company, a check for the cash which such holder has the right to receive in
respect of such holder's shares of Company Capital Stock formerly represented
by such Certificate may be issued to a transferee if the Certificate
representing such shares of Company Capital Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid. Until surrendered as contemplated by this Section 2.2, each Certificate
shall be deemed at all times after the Effective Time to represent only the
right to receive upon such surrender the applicable Merger Consideration.
(c) No Further Rights in Company Capital Stock. All cash
paid and Shares issued upon conversion of shares of Company Capital Stock in
accordance with the terms of this Article II shall be deemed to have been paid
and issued in full satisfaction of all rights pertaining to such shares of
Company Capital Stock.
(d) Termination of Exchange Fund. Any portion of the
Exchange Fund (including any interest received with respect thereto) that
remains undistributed to the holders of Company Capital Stock nine (9) months
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Company Capital Stock who have not theretofore complied with this
Article II shall thereafter look solely to Parent with respect to the Merger
Consideration payable or issuable upon due surrender of their Certificates,
without any interest thereon. Any portion of the Exchange Fund remaining
unclaimed by holders of shares of Company Capital Stock as of a date which is
immediately prior to such times as such amounts would otherwise escheat to or
become property of any government entity shall, to the extent permitted by
applicable Law, become the property of Parent free and clear of any claims or
interest of any person previously entitled thereto.
(e) No Liability. Neither the Exchange Agent nor any party
hereto shall be liable to any holder of Certificates for any Shares or cash
delivered to a public official pursuant to any abandoned property, escheat or
similar Law.
(f) Withholding Rights. Each of the Surviving Corporation,
Parent and the Exchange Agent shall be entitled to deduct and withhold from
the Merger Consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Capital Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign Tax Law. To the extent that amounts are so withheld by
the Surviving Corporation, Parent or the Exchange Agent, as the case may be,
and duly paid over to the appropriate Governmental Entity, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of Company Capital Stock in respect to which
such deduction and withholding was made by the Surviving Corporation, Parent
or the Exchange Agent, as the case may be.
(g) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond,
in such reasonable amount as the Surviving Corporation may direct, as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen
or destroyed Certificate, the Merger Consideration, without any interest
thereon.
Section 2.3 Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and thereafter, there
shall be no further registration of transfers of shares of Company Capital
Stock theretofore outstanding on the records of the Company. From and after
the Effective Time, the holders of certificates representing shares of Company
Capital Stock outstanding immediately prior to the Effective Time shall cease
to have any rights with respect to such shares of Company Capital Stock except
the right to receive the Merger Consideration.
Section 2.4 Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, shares of Company Capital Stock that are
issued and outstanding immediately prior to the Effective Time and that are
held by stockholders of the Company who have demanded and perfected their
demands for appraisal of such shares in the time and manner provided in
Section 262 of the DGCL and, as of the Effective Time, have neither
effectively withdrawn nor lost their rights to such appraisal and payment
under the DGCL (each such stockholder, a "Dissenting Stockholder") shall not
be converted into or represent the right to receive the Merger Consideration
as described in Section 2.1(a), but shall, by virtue of the Merger, be
entitled to only such rights as are granted by Section 262 of the DGCL;
provided, however, that if any such stockholder shall have failed to perfect
or shall have effectively withdrawn or lost such stockholder's right to
appraisal and payment under the DGCL, such stockholder's shares of Company
Capital Stock shall be deemed to have been converted at the Effective Time
into the right to receive the Merger Consideration as described in Section
2.1(a), without any interest thereon. The Company shall give Parent notice of
all demands for appraisal and Parent shall have the right to participate in
all negotiations and proceedings with respect to all Dissenting Stockholders.
Neither the Company nor the Surviving Corporation shall, except with the prior
written consent of Parent, which consent shall not be unreasonably withheld or
delayed, voluntarily make any payment with respect to, or settle or offer to
settle, any demand for payment from any Dissenting Stockholder.
Section 2.5 Company Stock Options, Equity Awards and
Deferred Cash Awards.
(a) Each Company Stock Option which is outstanding
immediately prior to the Effective Time, whether or not then exercisable,
shall be canceled as of the Effective Time and the holder thereof shall be
entitled to receive an amount in cash in lieu of such cancelled Company Stock
Option equal to the excess of (i) the product of (A) the excess, if any, of
(x) the Common Stock Consideration over (y) the per share exercise price of
such Company Stock Option multiplied by (B) the number of shares of Company
Common Stock subject to such Company Stock Option over (ii) any income tax or
employment tax withholding required under Code with respect to the amounts
referred to in clause (i). Parent shall cause the Surviving Corporation to
make such payments as soon as practicable following the Effective Time.
(b) Each Company Deferred Stock Unit which is outstanding
immediately prior to the Effective Time, whether or not then vested, shall be
canceled as of the Effective Time and the holder thereof shall be entitled to
receive an amount in cash in lieu of such cancelled Company Deferred Stock
Unit equal to the excess of (i) Common Stock Consideration over (ii) any
income tax or employment tax withholding required under the Code with respect
to the amounts referred to in clause (i).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Merger Sub that except as set forth in the Company Disclosure Letter delivered
to Parent and Merger Sub concurrently with the execution of this Agreement:
Section 3.1 Corporate Existence and Power.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. Each
Subsidiary of the Company (collectively, the "Company Subsidiaries") is duly
organized, validly existing and in good standing (with respect to
jurisdictions that recognize such concept) under the Laws of the jurisdiction
in which it is organized, except where the failure to be so organized,
existing or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (as defined below) on
the Company. Each of the Company and the Company Subsidiaries has the
requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to have such
power and authority would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. Each of the Company
and the Company Subsidiaries is duly qualified or licensed to do business, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed
that would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. The Company has heretofore made
available to Parent true, correct and complete copies of the Company's
Restated and Amended Certificate of Incorporation (the "Company Certificate of
Incorporation"), Bylaws (the "Company Bylaws") and minute books and the
certificates of incorporation, bylaws and minute books of each of the Company
Subsidiaries, all as currently in effect.
(b) Exhibit 21 to the Company's annual report on Form 10-K
for the fiscal year ended April 1, 2004 filed on June 23, 2004 (the "Company
10-K") sets forth a true, correct and complete list of all Company
Subsidiaries and their respective jurisdictions of incorporation. All of the
issued and outstanding shares of capital stock of each of the Company
Subsidiaries are owned by the Company or by a Company Subsidiary free and
clear of all Liens and are validly issued, fully paid and nonassessable, and
there are no outstanding subscriptions, options, calls, contracts, voting
trusts, proxies or other commitments, understandings, restrictions,
arrangements, rights or warrants with respect to any such Subsidiary's capital
stock, including any right obligating any such Subsidiary to issue, deliver or
sell additional shares of its capital stock.
(c) The corporate records and minute books of the Company
and each of the Company Subsidiaries reflect all material actions taken and
authorizations made at meetings of such companies' boards of directors or any
committees thereof and at any stockholders' meetings thereof, in each case
since January 1, 1999.
Section 3.2 Capitalization.
The authorized capital stock of the Company consists of (i)
200,000,000 shares of Company Common Stock, (ii) 30,000,000 shares of Company
Class B Stock, and (iii) 10,000,000 shares of Preferred Stock, par value $0.66
2/3 per share (the "Company Preferred Stock") of which shares of Company
Preferred Stock 2,000,000 shares have been designated Series A Convertible
Preferred Stock and 2,000,000 shares have been designated Series B
Exchangeable Preferred Stock. As of the close of business on July 1, 2004,
there were outstanding (i) 34,017,161 shares of Company Common Stock, (ii)
3,051,597 shares of Company Class B Stock, (iii) 305,548 shares of Company
Series A Convertible Preferred Stock, (iv) no shares of series B Convertible
Preferred Stock and no other shares of capital stock of Company were then
outstanding. All shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable and were
not issued in violation of any preemptive rights. No bonds, debentures, notes
or other indebtedness of the Company having the right to vote on any matters
on which the holders of capital stock of the Company may vote ("Company Voting
Debt") are issued or outstanding. Except for Company Stock Options, Company
Restricted Stock Awards and Company Deferred Stock Units to acquire no more
than 2,009,308 shares of Company Common Stock issued pursuant to Company Stock
Option Plans, and except as provided by the Certificate of Designations for
the Company Preferred Stock, as of the close of business on July 1, 2004,
there were no outstanding options, warrants or other rights to acquire capital
stock from the Company, and no preemptive or similar rights, calls,
agreements, commitments, arrangements, subscriptions or other rights,
convertible or exchangeable securities, agreements, arrangements or
commitments of any character, relating to the capital stock of the Company,
obligating the Company to issue, deliver, transfer or sell, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company or obligating the Company to grant,
extend or enter into any such option, warrant, subscription or other right,
convertible or exchangeable security, agreement, arrangement or commitment
(each of the foregoing, a "Company Convertible Security"). Section 3.2 of the
Company Disclosure Letter sets forth a true, correct and complete list of all
outstanding options to purchase shares of Company Capital Stock, Company
Restricted Stock Awards and Company Deferred Stock Units, granted pursuant to
any Company Stock Option Plan or otherwise as of the date hereof, which list
sets forth the name of the holders thereof and, to the extent applicable, the
exercise price or purchase price thereof, the number of shares of Company
Capital Stock subject thereto, the governing Company Stock Option Plan or
other arrangement with respect thereto and the expiration date thereof. Since
the close of business on July 1, 2004 the Company has not issued any shares of
capital stock or any Company Convertible Securities other than the issuance of
Company Common Stock in connection with the exercise of Company Stock Options,
Company Restricted Stock Awards or Company Deferred Stock Units described
above. Except as required by the terms of any Company Stock Options, there are
no (i) outstanding agreements or other obligations of the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire (or cause to be
repurchased, redeemed or otherwise acquired) any shares of Company Capital
Stock or (ii) voting trusts or other agreements or understandings to which the
Company or any Company Subsidiary or, to the Knowledge of the Company, any of
the Company's directors or executive officers is a party with respect to the
voting of capital stock of the Company or any Company Subsidiary. Holders of
the Company Preferred Stock shall be entitled to receive a one-time
distribution of shares of Company Preferred Stock pursuant to Section 2(a)(5)
of the Company Preferred Stock Certificate of Designations in connection with
the consummation of the Merger (such distribution, the "Change of Control
Distribution"); assuming the "Change of Control" (as defined in the Company
Preferred Stock Certificate of Designations) resulting from the Merger occurs
(x) on or after October 1, 2004 and on or before December 31, 2004, the
aggregate number of shares of Company Preferred Stock issuable as a result of
the Change of Control Distribution will be 33,411.757 shares; and (y) on or
after January 1, 2005 and on or before the Outside Date, the aggregate number
of shares of Company Preferred Stock issuable as a result of the Change of
Control Distribution will be 27,786.736 shares. From and after the payment of
the Change of Control Distribution and until the Effective Time, each share of
Company Preferred Stock (including the shares of Company Preferred Stock
issued pursuant to the Change of Control Distribution) shall be convertible
into the right to receive 139.860 shares of Company Common Stock in accordance
with the terms of the Company Preferred Stock Certificate of Designations
(subject, in the case of shares of Company Preferred Stock held by the Apollo
Investors, to the restrictions on conversion contained in the Apollo
Standstill Agreement). The "Conversion Price" as defined in the Company
Preferred Stock Certificate of Designations is $7.15.
Section 3.3 Corporate Authorization.
(a) The execution, delivery and performance by the Company
of this Agreement and the consummation by the Company of the transactions
contemplated hereby are within the corporate powers of the Company, and,
except for the Company Stockholder Approval, have been duly authorized by all
necessary corporate action. The affirmative vote of a majority of the votes
represented by the outstanding shares of Company Common Stock, Company Class B
Stock and the outstanding shares of Company Preferred Stock not held by the
Apollo Investors, voting together as a single class (the "Company Stockholder
Approval"), is the only vote required to adopt this Agreement and the Merger.
This Agreement constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights, and to general equitable
principles.
(b) The Company Independent Committee at a meeting duly
called and held, and (subject to Section 6.4) not subsequently rescinded or
modified in any way, has duly (i) determined that this Agreement and the
transactions contemplated hereby (including the Merger) are advisable, fair to
and in the best interests of the holders of Company Common Stock (other than
Parent, Merger Sub, the Apollo Investors, the holders of Company Class B Stock
and their respective Affiliates), (ii) recommended this Agreement to the Board
of Directors of the Company and (iii) resolved (subject to Section 6.4) to
recommend that the holders of Company Common Stock (other than Parent, Merger
Sub, the Apollo Investors, the holders of Company Class B Stock and their
respective Affiliates) vote for adoption of this Agreement. The Board of
Directors of the Company (after taking into account the recommendation of the
Company Independent Committee), at a meeting duly called and held, and
(subject to Section 6.4) not subsequently rescinded or modified in any way,
has duly (i) determined that this Agreement and the transactions contemplated
hereby (including the Merger) are advisable, fair to and in the best interests
of the stockholders of the Company, (ii) approved and adopted this Agreement
and (iii) resolved (subject to Section 6.4) to recommend that the Company
stockholders vote for the adoption of this Agreement.
(c) The Company has taken all appropriate actions so that
the restrictions on business combinations contained in Section 203 of the DGCL
will not apply with respect to or as a result of this Agreement, the Parent
Subscription Agreement, the Apollo Consent, the Trust Voting Agreement and the
transactions contemplated hereby and thereby, including the Merger, without
any further action on the part of the stockholders or the Board of Directors
of the Company. True, correct and complete copies of all resolutions of the
Board of Directors of the Company reflecting such actions have been previously
provided to Parent. No other state takeover statute or similar statute or
regulation is applicable to or purports to be applicable to the Merger or any
other transaction contemplated by this Agreement.
Section 3.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Company do not, and the performance by the Company of its obligations
hereunder will not, (i) conflict with or violate any provision of the Company
Certificate of Incorporation or Company Bylaws or any equivalent
organizational documents of any Company Subsidiary (assuming the Company
Stockholder Approval is obtained), (ii) assuming that all consents, approvals,
authorizations and permits described in Section 3.4(b) have been obtained and
all filings and notifications described in Section 3.4(b) have been made and
any waiting periods thereunder have terminated or expired, conflict with or
violate any Law applicable to the Company or any Company Subsidiary or by
which any property or asset of the Company or any Company Subsidiary is bound
or affected or (iii) except for the Apollo Consent, require any consent or
approval under, result in any breach of or any loss of any benefit under, or
constitute a change of control or default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
right of termination, vesting, amendment, acceleration or cancellation of, or
result in the creation of a Lien or other encumbrance on any property or asset
of the Company or any Company Subsidiary pursuant to, any Contract, Company
Permit or other instrument or obligation, except, with respect to clauses (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, reasonably be
expected to (x) have a Material Adverse Effect on the Company or (y) prevent
or materially delay the performance of this Agreement by the Company or the
ability of the Company to take any action necessary to consummate the Merger.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with, or
notification to, any domestic or foreign governmental, administrative,
juridicial or regulatory authority (a "Governmental Entity") or any other
Person (assuming the Company Stockholder Approval is obtained), except (i)
under the Exchange Act, the Securities Act, any applicable Blue Sky Law, the
rules and regulations of the American Stock Exchange, (ii) under the HSR Act
and, if and to the extent necessary, foreign or supranational antitrust and
competition Laws, (iii) the filing and recordation of the Certificate of
Merger as required by the DGCL and (iv) for such other consents, approvals,
authorizations, permits, filings or notifications, the failure of which to
make or obtain, would not, individually or in the aggregate, reasonably be
expected to (x) have a Material Adverse Effect on the Company or (y) prevent
or materially delay the performance of this Agreement by the Company or the
ability of the Company to take any action necessary to consummate the Merger.
Section 3.5 SEC Filings.
(a) The Company has timely filed all forms, reports and
documents (including all Exhibits, Schedules and Annexes thereto) required to
be filed by it under the Securities Act or the Exchange Act, as the case may
be, with the SEC since January 1, 1999, including any amendments or
supplements thereto (collectively, the "Company SEC Documents"). The Company
SEC Documents, as of their respective filing dates, (i) did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
(ii) complied in all material respects with the Securities Act or the Exchange
Act, each as in effect on the date so filed. No Company Subsidiary is subject
to the periodic reporting requirements of the Exchange Act. The Company has
previously provided to Parent a true, correct and complete copy of any
amendment or modification which has not yet been filed with the SEC to any
agreement, document or other instrument which previously had been filed by the
Company with the SEC pursuant to the Securities Act or the Exchange Act, to
the extent such amendment or modification is required to be filed thereunder.
(b) The management of the Company has (i) implemented
disclosure controls and procedures (as defined in Rule 13a-15(e) of the
Exchange Act) to ensure that material information relating to the Company,
including the Company Subsidiaries, is made known to the management of the
Company by others within those entities, and (ii) disclosed, based on its most
recent evaluation, to the Company's outside auditors and the audit committee
of the Board of Directors of the Company (A) all significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that,
in its good faith judgment, are reasonably likely to materially affect the
Company's ability to record, process, summarize and report financial data and
(B) any fraud, whether or not material, known to management that involves
management or other employees who, in each case, have a significant role in
the Company's internal control over financial reporting.
Section 3.6 Permits; Compliance With Law. Each of the
Company and the Company Subsidiaries is in possession of all authorizations,
licenses, permits (including Environmental Permits), certificates, approvals
and clearances, and has submitted notices to, all Governmental Entities
necessary for the Company or any Company Subsidiary to develop, construct,
own, lease and operate its properties or other assets and to carry on their
respective businesses in the manner described in the Company SEC Documents
filed prior to the date hereof and as it is being conducted as of the date
hereof (the "Company Permits"), and all such Company Permits are valid, and in
full force and effect, except where the failure to have, or the suspension or
cancellation of, or failure to be valid or in full force and effect of, any of
the Company Permits would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. Neither the Company
nor any Company Subsidiary is in conflict with, or in default or violation of,
(i) any Law applicable to the Company or any Company Subsidiary or by which
any property or asset of the Company or any Company Subsidiary is bound or
affected or (ii) any Company Permits, except, with respect to clauses (i) and
(ii), for any such conflicts, defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
Section 3.7 Financial Statements. The audited and unaudited
financial statements, including all related notes and schedules, contained in
the Company SEC Documents (or incorporated therein by reference)
(collectively, the "Company Financial Statements") (i) when filed, complied in
all material respects with all applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto; (ii) present
fairly in all material respects the consolidated financial position of the
Company and the consolidated Company Subsidiaries as of their respective dates
and the consolidated results of operations, retained earnings and cash flows
of the Company and the consolidated Company Subsidiaries for the respective
periods indicated; and (iii) were prepared in accordance with GAAP applied on
a consistent basis throughout the periods involved (except for changes in
accounting principles disclosed in the notes thereto and subject, in the case
of unaudited statements, to normal year end adjustments which were not and are
not expected to be material in amount and the absence of related notes).
Section 3.8 Absence of Certain Changes.
(a) Since April 1, 2004, except as specifically contemplated
by, or as disclosed in, this Agreement, the Company and the Company
Subsidiaries have conducted their respective businesses in all material
respects in the ordinary course consistent with past practice, and there has
not been any event, occurrence or development which, (i) individually or in
the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on the Company, or (ii) would, individually or in the
aggregate, reasonably be expected to prevent or materially delay the
performance of this Agreement by the Company or the ability of the Company to
take any action necessary to consummate the Merger.
(b) Since April 1, 2004, except as specifically contemplated
by, or as disclosed in, this Agreement, neither the Company nor any Company
Subsidiary has taken any action that, if taken during the period of this
Agreement through the Effective Time, would require the consent of Parent
under Section 5.1.
Section 3.9 No Undisclosed Liabilities. There are no
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) of the Company or any Company Subsidiary of the kind
required to be reflected in the Company Financial Statements in accordance
with GAAP, other than (i) liabilities disclosed or provided for in the Company
Financial Statements, (ii) liabilities incurred since April 1, 2004, in the
ordinary course of business, and (iii) liabilities which would not,
individually or in the aggregate, reasonably be expected to be material to the
Company.
Section 3.10 Litigation. There is no action, suit,
investigation or proceeding pending against, or to the Knowledge of the
Company threatened against or affecting, the Company or any Company
Subsidiaries or any of their respective properties or any of their respective
officers or directors, or for which the Company or any Company Subsidiary is
obligated to indemnify a Third Party, before any court or arbitrator or any
governmental body, agency or official except as would not, individually or in
the aggregate, reasonably be expected to (x) have a Material Adverse Effect on
the Company or (y) prevent or materially delay the performance of this
Agreement by the Company. There is no judgment, decree, injunction, rule, writ
or order of any governmental entity or arbitrator outstanding against the
Company or any Company Subsidiary which would, individually or in the
aggregate, reasonably be expected to (x) have a Material Adverse Effect on the
Company or (y) prevent or materially delay the performance of this Agreement
by the Company.
Section 3.11 Taxes.
(a) Each of the Company and each Company Subsidiary has
timely filed or caused to be timely filed with the appropriate Tax authorities
all material Tax Returns that are required to be filed by, or with respect to,
the Company and the Company Subsidiaries on or prior to the Closing Date. All
such Tax Returns are true, correct and complete in all material respects.
There are no material Liens for Taxes upon the assets of the Company or any
Company Subsidiary, except Liens for Taxes not yet due.
(b) All material Taxes and Tax liabilities of the Company
and the Company Subsidiaries have been timely paid or fully provided for as a
liability on the financial statements of the Company and the Company
Subsidiaries in compliance with GAAP.
(c) Neither the Company nor any of the Company Subsidiaries
has been a party to any distribution occurring during the two years preceding
the date of this Agreement in which the parties to such distribution treated
the distribution as subject to Section 355 of the Code.
(d) No deficiencies for material Taxes have been claimed, proposed or assessed
in writing against the Company or any of the Company Subsidiaries by any Tax
authority that have not been finally resolved, and neither the Company nor any
Company Subsidiary has Knowledge of any pending or threatened claim, proposal
or assessment against the Company or any Company Subsidiary for any such
deficiency for material Taxes. There are no pending audits, investigations or
other proceedings relating to any liability of the Company or any Company
Subsidiary in respect of any material Taxes.
Section 3.12 Contracts and Commitments.
(a) Except as filed as exhibits to the Company SEC Documents
filed prior to the date of this Agreement, or as disclosed in Section 3.12 of
the Company Disclosure Letter, none of the Company or any Company Subsidiary
is a party to or bound by any Contract which (i) as of the date hereof, is a
"material contract" (as such term is defined in Item 601(b)(10) of Regulation
S-K promulgated by the SEC) or (ii) except for Leases for Company Leased Real
Properties, (A) involves aggregate expenditures in excess of $5 million, (B)
involves annual expenditures in excess of $5 million and is not cancelable
within one year, (C) which would prohibit or materially delay the consummation
of the Merger or (D) contains any non-compete or exclusivity provisions with
respect to any line of business or geographic area with respect to the
Company, any Company Subsidiary or any of the Company's current or future
Affiliates, or which restricts the conduct of any line of business by the
Company, any Company Subsidiary or any of the Company's current or future
Affiliates or any geographic area in which the Company, any Company Subsidiary
or any of the Company's current or future Affiliates may conduct business, in
each case in any material respect. Each Contract of the type described in
Section 3.12, whether or not set forth in Section 3.12 of the Company
Disclosure Letter, is referred to herein as a "Company Material Contract").
(b) Each Company Material Contract is valid and binding on
the Company or a Company Subsidiary party thereto and, to the Company's
Knowledge, each other party thereto, and is in full force and effect, and the
Company and each of the Company Subsidiaries have performed in all respects
all obligations required to be performed by them to the date hereof under each
Company Material Contract and, to the Company' Knowledge, each other party to
each Company Material Contract has performed in all respects all obligations
required to be performed by it under such Company Material Contract, except,
in each case, as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
Section 3.13 Employee Benefit Plans.
(a) Section 3.13(a) of the Company Disclosure Letter
contains a true, correct and complete list of each Company Employee Plan. With
respect to each Company Employee Plan, the Company has made available to
Parent true, correct and complete copies of the Company Employee Plan and any
amendments thereto (or if the Company Employee Plan is not a written plan, a
written description thereof). Each Company Employee Plan has been established
and maintained in material compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations (including
but not limited to ERISA, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, and the
Code) which are applicable to such Company Employee Plan, except for such
exceptions that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
(b) Neither the Company nor any Company Affiliate has
incurred any liability under Title IV of ERISA that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any Company Affiliate of incurring any such liability other than liability for
premiums due the PBGC (which premiums have been paid when due).
(c) Each Company Employee Plan (which is not a multiemployer
pension plan) which is intended to be qualified under Section 401(a) of the
Code is so qualified, each trust forming a part thereof is exempt from federal
income tax pursuant to Section 501(a) of the Code and, to the Knowledge of the
Company, no circumstances exist which will adversely affect such qualification
or exemption.
(d) The consummation of the transactions contemplated by
this Agreement will not, either alone or in combination with any other event,
(i) entitle any current or former employee, officer, director or consultant of
the Company, any Company Subsidiary or any Company ERISA Affiliate to
severance pay, unemployment compensation or any other similar termination
payment, or (ii) accelerate the time of payment or vesting, or increase the
amount of, or otherwise enhance, any benefit due to any such employee,
officer, director or consultant. No amounts payable under Company Employee
Plans will fail to be deductible for federal income tax purposes by virtue of
Section 280G of the Code.
(e) No Company Employee Plan is a "multiemployer pension
plan," as defined in Section 3(37) of ERISA, nor is any Company Employee Plan
a plan described in Section 4063(a) of ERISA. As of the date of this
Agreement, the Company has no unpaid withdrawal liability with respect to any
"multiemployer pension plan" to which the Company or any Company Affiliate has
contributed or been obligated to contribute. In the event the Company or any
Company Affiliate withdrew in a "complete withdrawal" from all "multiemployer
pension plans" to which the Company or any Company Affiliate has contributed,
or been obligated to contribute, as of the Effective Time, the aggregate
withdrawal liability incurred by the Company or such Company Affiliate would
not have a Material Adverse Effect on the Company.
(f) No Company Employee Plan provides benefits, including,
without limitation, death or medical benefits (whether or not insured), with
respect to any current or former employees of the Company or any Company
Subsidiary for periods extending beyond their retirement or other termination
of service (other than (i) coverage mandated by applicable law, (ii) death
benefits or retirement benefits under any "employee pension plan," as that
term is defined in Section 3(2) of ERISA, or (iii) benefits the full cost of
which is borne by the current or former employee (or his or her beneficiary)).
There are no pending, or, to the Knowledge of the Company, threatened or
anticipated claims by or on behalf of any Company Employee Plan, by any
employee or beneficiary covered under any such Company Employee Plan, or
otherwise involving any such Company Employee Plan (other than routine claims
for benefits or claims that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company).
(g) There are no pending or, to the Knowledge of the
Company, threatened or anticipated claims by or on behalf of any Company
Employee Plan (which is not a multiemployer pension plan), by any employee or
beneficiary under any such plan or otherwise involving any such plan (other
than routine claims for benefits or claims that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company). No Company Employee Plan is under audit or investigation by, nor has
the Company been contacted with respect to any Company Employee Plan by, the
IRS, the PBGC or the Department of Labor. No such audit, investigation or
contact is pending or, to the Knowledge of the Company, threatened as of the
date of this Agreement.
(h) As of April 1, 2004, with respect to each Company
Employee Plan (which is not a multiemployer pension plan) that is a defined
benefit plan, the projected benefit obligations under all such plans, whether
or not qualified, including, but not limited to, the Defined Benefit
Retirement Income Plan for Certain Employees of American Multi-Cinema, Inc.,
the AMC Supplemental Executive Retirement Plan and the American Multi-Cinema,
Inc. Retirement Enhancement Plan, utilizing actuarial methods and assumptions
set forth in the Company 10-K, did not exceed the fair market value of the
assets of such plans as of such date by more than $30 million. As of the date
hereof and as of the Effective Time, the aggregate increase in any such
underfunding since April 1, 2004 (taking into account only such plans for
which there is any increase) would not, if all such plans were then
terminated, have a Material Adverse Effect on the Company.
(i) There is no Contract, plan or arrangement with any
current or former employee, officer or director of the Company to which the
Company or any Company Subsidiary is a party as of the date of this Agreement
that, individually or in the aggregate and as a result of the Merger (whether
alone or upon the occurrence of additional or subsequent events) or otherwise,
is reasonably likely to give rise to the payment of any amount that would not
be deductible pursuant to Section 162(m) of the Code or any corresponding or
similar provision of state, local or foreign income Tax law.
Section 3.14 Labor and Employment Matters.
(a) Except as set forth in Section 3.14 of the Company
Disclosure Letter, there are no collective bargaining agreements with any
union covering employees of the Company or any of the Company Subsidiaries. As
of the date of this Agreement, (i) there is no labor strike, dispute,
slowdown, stoppage or lockout actually pending or, to the Knowledge of the
Company or any of the Company Subsidiaries, threatened against the Company or
any of the Company Subsidiaries; (ii) to the Knowledge of the Company or any
of the Company Subsidiaries, no union organizing campaign with respect to the
employees of the Company or any of the Company Subsidiaries is threatened or
underway; (iii) there is no unfair labor practice charge or complaint against
the Company or any of the Company Subsidiaries pending or, to the Knowledge of
the Company or any of the Company Subsidiaries, threatened before the National
Labor Relations Board or any similar state or foreign agency; (iv) there is no
written grievance pending relating to any collective bargaining agreement or
other grievance procedure; and (v) to the Knowledge of the Company or any of
the Company Subsidiaries, no charges with respect to or relating to the
Company or any of the Company Subsidiaries are pending before the Equal
Employment Opportunity Commission or any other agency responsible for the
prevention of unlawful employment practices, except for such exceptions to the
foregoing clauses (iii), (iv) and (v) which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
(b) The Company has made available to Parent true, correct
and complete copies of each of the Company's material written personnel
policies or rules applicable to employees of the Company or of the Company
Subsidiaries in effect as of the date hereof. The Company and the Company
Subsidiaries are, and have at all times been, in compliance with all
applicable Laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of work and occupational safety and
health, except for such failures to be in compliance as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(c) As of the date hereof, within the last three years, the
Company and the Company Subsidiaries have not effectuated (i) a "plant
closing" (as defined in the WARN Act) affecting any site of employment or one
or more facilities or operating units within any site of employment or
facility of the Company or any of the Company Subsidiaries, or (ii) a "mass
layoff" (as defined in the WARN Act) affecting any site of employment or
facility of the Company or any of the Company Subsidiaries; nor has the
Company or any of the Company Subsidiaries been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local Law.
Section 3.15 Real Property; Leases.
(a) Section 3.15(a) of the Company Disclosure Letter
contains a true, correct and complete list, by location, of all real property
owned by the Company and the Company Subsidiaries (the "Company Owned Real
Properties"). Except for (x) such exceptions which would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company, (y) any matters of public record affecting the use of such
properties and disclosed in writing in title insurance policies with respect
to the Company Owned Real Properties made available to Parent prior to the
date hereof and (z) Permitted Encumbrances, (i) the Company and the Company
Subsidiaries have good and marketable title to the Company Owned Real
Properties and (ii) the Company Owned Real Properties are free and clear of
all mortgages, Liens, leases, tenancies, security interests, options to
purchase or lease or rights of first refusal. Section 3.15(a) of the Company
Disclosure Letter contains a true, correct and complete list of all title
insurance policies relating to the Company Owned Real Properties.
(b) Section 3.15(b) of the Company Disclosure Letter
contains a true, correct and complete list, by address, of all material real
property leased by the Company and the Company Subsidiaries (the "Company
Leased Real Properties", and, together with the Company Owned Real Properties,
the "Company Real Properties"). The Company has made available to Parent true,
correct and complete copies of all lease agreements (the "Leases") with
respect to the Company Leased Real Properties. With respect to (A) the Company
Leased Real Properties other than Significant Theatre Properties, except for
such exceptions which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company and (B) the
Significant Theatre Properties:
(i) each Lease is valid and binding upon the Company or
a Company Subsidiary and upon the landlord thereunder and in full force
and effect and grants the lessee under the Lease the exclusive right to
use and occupy the premises, and the Company or Company Subsidiary enjoys
peaceful and undisturbed possession of the premises;
(ii) the Company or a Company Subsidiary has good,
valid and marketable title to the leasehold estate or other interest
created under its respective Leases;
(iii) there is no, nor has the Company or any Company
Subsidiary received notice of any, default (or condition or event which,
after notice or lapse of time or both, would constitute a default)
thereunder by the lessee or (to the Knowledge of the Company) by the
landlord thereunder;
(iv) with respect to any Leases that were assigned to
the Company or any Company Subsidiary by a Third Party, to the Knowledge
of the Company, all consents to such assignments or sublease have been
obtained which may have been required with respect to such assignments or
sublease; and
(v) none of the rights of the Company or any Company
Subsidiary under any of the Leases will be subject to termination or
modification as the result of the consummation of the transactions
contemplated by this Agreement, and upon the consummation of the Merger,
Parent will have succeeded to all of the rights, title and interest of
the Company or Company Subsidiary under each of such Leases.
(c) Except as would not reasonably be expected to have a
material adverse impact on the financial condition of the Company, (i) each
lease, sublease, license or other agreement granting to any Third Party any
right to the use, occupancy or enjoyment of any Company Real Properties or any
portion thereof that has an annual base rent equal to or greater than $100,000
(collectively, the "Space Leases") is valid, binding and in full force and
effect, (ii) all rent and other sums and charges payable by the tenant or
occupant thereunder (the "Space Tenant") are current, (iii) no termination
event or condition or uncured default on the part of the Company, or to the
Knowledge of the Company, the Space Tenant, exists under any Space Lease and
(iv) no event or condition has occurred or exists that, with or without notice
or lapse of time or both, would constitute such a default or termination event
or condition.
(d) The Company is not obligated under, or a party to, (i)
any agreement or other contractual obligation to purchase any Company Leased
Real Property for a purchase price in excess of $4 million or (ii) any option,
right of first refusal or other contractual right to sell, assign or dispose
of any Company Owned Real Property.
(e) All components of all improvements (other than those
which a Third Party is contractually obligated to maintain) included within
the Company Real Properties (collectively, the "Improvements"), including,
without limitation, the roofs and structural elements thereof and the heating,
ventilation, air conditioning, plumbing, electrical, mechanical, sewer, waste
water, storm water, paving and parking equipment, systems and facilities
included therein, are in good working order and repair, except for such
failures to be in good working order or repair that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
(f) The Company has not received any notice, nor has any
Knowledge, of any pending, threatened or contemplated condemnation proceeding
affecting any Significant Theatre Property or any part thereof, or any sale or
other disposition of any Significant Theatre Property or any part thereof in
lieu of condemnation, except in each case for those which would not materially
interfere with the operations of the relevant Significant Theatre Property.
Except as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Company, the Company has not received
any notice, nor has any Knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Company Real Properties (other than the
Significant Theatre Properties) or any part thereof, or of any sale or other
disposition of any Company Real Properties (other than the Significant Theatre
Properties) or any part thereof in lieu of condemnation.
Section 3.16 Environmental Matters. Except as disclosed in
Section 3.16 of the Company Disclosure Letter or as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company:
(a) No Hazardous Material has been Released upon any Company
Real Property or any other real property (whether or not owned, leased or
otherwise used or occupied by the Company or its Subsidiaries) as a result of
which the Company or its Subsidiaries has or may become liable to any Person
pursuant to Environmental Law.
(b) There are no writs, injunctions, decrees, orders or
judgments outstanding, or Environmental Claims pending or, to the Knowledge of
the Company, threatened, relating to the Company's compliance with or
liability under any Environmental Law.
(c) Neither the Company nor any of its Subsidiaries has
received any request for information, or been notified that it is a
potentially responsible party, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or any similar
Environmental Law.
(d) Company has provided Parent with access to true, correct
and complete copies of all environmental studies, tests, reports, analyses,
audits and assessments in the possession of Company relating to any Company
Real Property.
Section 3.17 Insurance. The Company maintains insurance
coverage with reputable insurers, or maintains self-insurance practices, in
such amounts and covering such risks as are in accordance with normal industry
practice for companies engaged in businesses similar to that of the Company
(taking into account the cost and availability of such insurance).
Section 3.18 Affiliate Transactions. Except (i) as set forth
in Section 3.18 of the Company Disclosure Letter, (ii) as set forth in the
Company SEC Documents filed before the date of this Agreement or (iii)
pursuant to any employment agreement with any officer of the Company, there
are no Contracts relating to any transactions of the type that would be
required to be disclosed under Item 404 of Regulation S-K promulgated by the
SEC between the Company and any (a) present or former officer or director of
the Company or any Company Subsidiary or any of their immediate family members
(including their spouses), (b) record or beneficial owner of more than 5% of
any class of Company Capital Stock, or (c) Person known by the Company's
executive officers to be an Affiliate of any such officer, director or
beneficial owner.
Section 3.19 Intellectual Property.
(a) Section 3.19(a) of the Company Disclosure Letter
contains a true, correct and complete list of all (i) issued Patents and
pending applications therefor, (ii) Trademarks, (iii) registrations for
Copyrights and applications therefor and (iv) Internet domain name
registrations and applications therefor, in each case that are owned by the
Company or any of the Company Subsidiaries (the "Company Owned Intellectual
Property").
(b) Except as set forth in Section 3.19(b) of the Company
Disclosure Letter, with respect to each item of Company Owned Intellectual
Property (i) the Company or a Company Subsidiary is the exclusive owner of all
right, title and interest in and to such Company Owned Intellectual Property,
free and clear of any Liens (other than Permitted Encumbrances) or claims of
others and (ii) the Company has taken all necessary actions, including the
making of all requisite filings, renewals and payments, to maintain and
protect such Company Owned Intellectual Property Rights, except, with respect
to clauses (i) and (ii), for such failures to so own or to take such actions
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company.
(c) The Company and each of the Company Subsidiaries own, or
have the right, free and clear of all Liens (other than Permitted
Encumbrances), to use pursuant to a valid License Agreement, all Intellectual
Property necessary for, or used by the Company and the Company Subsidiaries
in, the operation of the business in all material respects as it is presently
conducted and presently proposed to be conducted.
(d) Except as set forth in Section 3.19(d) of the Company
Disclosure Letter, there are no claims or suits pending or, to the Knowledge
of the Company, threatened, and the Company has not received any notice,
claim, charge, complaint or demand alleging that the conduct of the Company or
any of the Company Subsidiaries infringes, misappropriates or otherwise
violates any Intellectual Property of any Third Party or challenging the
ownership, use, registration, validity or enforceability of the Intellectual
Property owned by or licensed to the Company. To the Knowledge of the Company,
the conduct of the Company's and the Company Subsidiaries' business has not
and does not infringe, misappropriate or otherwise violate any Intellectual
Property of any Third Party. To the Knowledge of the Company, the Intellectual
Property owned by or licensed to Company or any of the Company Subsidiaries
has not been infringed, misappropriated or otherwise violated by any Third
Party.
(e) Except as set forth in Section 3.19(e) of the Company
Disclosure Letter or as would not reasonably be expected to have a Material
Adverse Effect on the Company, (i) the collection, use, maintenance and
disclosure of information and data relating to users of any web sites owned or
operated by or on behalf of the Company or any of the Company Subsidiaries is
in compliance with all applicable privacy policies, terms of use, laws and
regulations, and (ii) the consummation of the transactions contemplated by
this Agreement will not result in a violation of any such privacy policies,
terms of use, laws or regulations relating to any such web sites.
Section 3.20 Title to Assets. The Company and each Company
Subsidiary have good and valid title to all of their personal properties and
assets reflected on the Company's audited balance sheet (including in any
related notes thereto) as of April 1, 2004 included in the Company 10-K (the
"2004 Balance Sheet") or acquired after April 1, 2004 (other than assets
disposed of since April 1, 2004 in the ordinary course of business consistent
with past practice), in each case free and clear of all title defects and
encumbrances, except for (a) Liens that secure indebtedness that is properly
reflected in the 2004 Balance Sheet; (b) Liens for Taxes not yet due or being
contested in good faith (provided adequate reserves (in the good faith
judgment of management) have been set aside for payment thereof); (c) Liens
arising in the ordinary course of business and securing obligations not yet
due and payable; and (d) such title defects or encumbrances, if any, as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company and each Company Subsidiary either owns,
or has valid leasehold interest in, all material assets and properties
necessary for the operation of its business as presently conducted.
Section 3.21 Brokers. Except for ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and
Lazard Freres & Co. LLC, copies of whose engagement agreements have been
provided to Parent, there is no investment banker, broker, finder, financial
advisor or other intermediary which has been retained by or is authorized to
act on behalf of the Company or any of the Company Subsidiaries who might be
entitled to any fee in connection with the transactions contemplated by this
Agreement.
Section 3.22 Opinion of Financial Advisor. The Board of
Directors of the Company and the Company Independent Committee have received
the opinions of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and Lazard Freres & Co. LLC,
respectively, to the effect that, as of the date hereof, the Common Stock
Consideration is fair from a financial point of view to the holders (other
than Parent, the Apollo Investors, the holders of Company Class B Stock and
their respective Affiliates) of shares of Company Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent
and warrant to the Company:
Section 4.1 Corporate Existence and Power. Parent is a
corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware. Merger Sub is duly organized, validly existing
and in good standing under the Laws of the State of Delaware. Each of Parent
and Merger Sub has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry
on its business as it is now being conducted, except where the failure to have
such power, authority and governmental approvals would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Parent. Parent has heretofore made available to the Company true, correct and
complete copies of the certificates of incorporation and bylaws of each of
Parent and Merger Sub as currently in effect. Neither Parent nor Merger Sub is
in violation of any of the terms or provisions of its certificate of
incorporation or bylaws, all as currently in effect.
Section 4.2 Corporate Authorization.
(a) The execution, delivery and performance by each of
Parent and Merger Sub of this Agreement and the consummation by each of Parent
and Merger Sub of the transactions contemplated hereby are within the
corporate powers of Parent and Merger Sub, respectively, and no other
proceedings on the part of Parent or Merger Sub are necessary to authorize the
execution, delivery and performance of this Agreement. This Agreement
constitutes a valid and binding agreement of each of Parent and Merger Sub,
enforceable against each of them in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights, and to general equitable
principles.
(b) The Board of Directors of Merger Sub has (i) determined
that this Agreement and the transactions contemplated hereby (including the
Merger) are fair to, and in the best interests of, Parent, as the sole
stockholder of Merger Sub, (ii) approved and adopted this Agreement and (iii)
recommended to Parent, as the sole stockholder of Merger Sub, that it vote for
the adoption of this Agreement. Concurrently with the execution of this
Agreement, Parent, as the sole stockholder of Merger Sub, is adopting this
Agreement.
Section 4.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent
and Merger Sub do not, and the performance by Parent of its obligations
hereunder will not, (i) conflict with or violate any provision of the
certificate of incorporation or bylaws of Parent or Merger Sub, (ii) assuming
that all consents, approvals, authorizations and permits described in Section
4.3(b) have been obtained and all filings and notifications described in
Section 4.3(b) have been made and any waiting periods thereunder have
terminated or expired, conflict with or violate any Law applicable to Parent
or any Parent Subsidiary or by which any property or asset of Parent or any
Parent Subsidiary is bound or affected or (iii) require any consent or
approval under, result in any breach of or any loss of any benefit under, or
constitute a change of control or default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
right of termination, vesting, amendment, acceleration or cancellation of, or
result in the creation of a Lien or other encumbrance on any property or asset
of Parent or any Parent Subsidiary pursuant to, any Contract, Parent Permit or
other instrument or obligation, except, with respect to clauses (ii) and
(iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, reasonably be
expected to (x) have a Material Adverse Effect on Parent or (y) prevent or
materially delay the performance of this Agreement by Parent or Merger Sub or
the ability of Parent or Merger Sub to take any action necessary to consummate
the Merger.
(b) The execution and delivery of this Agreement by Parent
and Merger Sub do not, and the performance of this Agreement by Parent will
not, require any consent, approval, authorization or permit of, or filing
with, or notification to, any domestic or foreign Governmental Entity or any
other Person, except (i) under the Exchange Act, the Securities Act, any
applicable Blue Sky Law, the rules and regulations of the American Stock
Exchange, (ii) under the HSR Act and, if and to the extent necessary, foreign
or supranational antitrust and competition Laws, (iii) the filing and
recordation of the Certificate of Merger as required by the DGCL and (iv) for
such other consents, approvals, authorizations, permits, filings or
notifications, the failure of which to make or obtain, would not, individually
or in the aggregate, reasonably be expected to (x) have a Material Adverse
Effect on Parent or (y) prevent or materially delay the performance of this
Agreement by Parent or Merger Sub or the ability of Parent or Merger Sub to
take any action necessary to consummate the Merger.
Section 4.4 Prior Activities. Each of Parent and Merger Sub
was formed solely for the purpose of engaging in the transactions contemplated
by this Agreement and has not, other than in connection with the transactions
contemplated hereby (including the Financing), (i) engaged in any business
activities, (ii) conducted any operations, (iii) incurred any liabilities or
(iv) owned any assets or property.
Section 4.5 Financing.
(a) Parent has delivered to the Company true, correct and
complete copies of (i) an executed commitment letter (the "Equity Commitment
Letter") pursuant to which ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P. and Apollo
Investment Fund V, L.P. have committed to provide equity financing to Parent
and Merger Sub in an aggregate amount of $785.4 million, (ii) an executed
commitment letter (the "Debt Commitment Letter," and together with the Equity
Commitment Letter, the "Commitment Letters") from JPMorgan Securities Inc.,
JPMorgan Chase Bank, Citigroup Global Markets Inc. and Citicorp North America,
Inc. (collectively, the "Lenders") pursuant to which, and subject to the terms
and conditions thereof, the Lenders have committed to provide Parent and
Merger Sub with financing in an aggregate amount of $1,020.0 million (the
"Debt Financing," and together with the equity financing referred to in clause
(a), the "Financing") and (iii) the Parent Subscription Agreement. The
aggregate proceeds of the Financings will be sufficient to pay the full amount
of the Merger Consideration, to make other necessary payments by it in
connection with the transactions contemplated hereby and to pay all related
fees and expenses (the "Required Cash Amount").
(b) Each of the Commitment Letters, in the form so
delivered, is valid and in full force and effect as of the date of this
Agreement. No event has occurred which, with or without notice, lapse of time
or both, would constitute a default on the part of Parent or Merger Sub under
either the Equity Commitment Letter or the Debt Commitment Letter.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business by the Company Pending the
Closing. The Company agrees that, between the date of this Agreement and the
Effective Time, except as set forth in Section 5.1 of the Company Disclosure
Letter or as specifically permitted by any other provision of this Agreement,
or unless Parent shall otherwise agree in writing, which agreement shall not
be unreasonably withheld or delayed, the Company shall, and shall cause each
Company Subsidiary to, (x) maintain its existence in good standing under
applicable Law, (y) subject to the restrictions set forth in this Section 5.1,
conduct its operations only in the ordinary and usual course of business
consistent with past practice and (z) use its reasonable best efforts to keep
available the services of the current officers, key employees, and consultants
of the Company and each Company Subsidiary and to preserve the current
relationships of the Company and each Company Subsidiary with such of the
customers, suppliers and other persons with which the Company or any Company
Subsidiary has significant business relations as is reasonably necessary to
preserve substantially intact its business organization. In addition, without
limiting the foregoing, except as set forth in Section 5.1 of the Company
Disclosure Letter or as contemplated by this Agreement, Company shall not and
shall not permit any of the Company Subsidiaries to, between the date of this
Agreement and the Effective Time, directly or indirectly, do, or agree to do,
any of the following without the prior written consent of Parent:
(a) amend or propose to amend or otherwise change its
certificate of incorporation or bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer,
encumber, or authorize the issuance, sale, pledge, disposition, grant,
transfer or encumbrance of any shares of capital stock of, the Company or any
Company Subsidiary, or securities convertible or exchangeable or exercisable
for any shares of such capital stock, or any options, warrants or other rights
of any kind to acquire any shares of such capital stock or such convertible or
exchangeable securities, or any other ownership interest, of the Company or
any Company Subsidiary, except that (i) the Company may issue shares of
Company Common Stock upon exercise of Company Stock Options outstanding as of
the date hereof in accordance with their terms or the vesting of Company
Restricted Stock Awards or Company Deferred Stock Units outstanding as of the
date hereof in accordance with their terms, (ii) the Company Subsidiaries may
issue shares of capital stock to the Company or any wholly owned Company
Subsidiary, and (iii) the Company may issue shares of Company Preferred Stock
as payment of the Change of Control Distribution in accordance with the terms
of the Company Preferred Stock Certificate of Designations;
(c) (i) reclassify, combine, split, subdivide or amend the
terms of any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of, or in substitution for, shares of
its capital stock, or (ii) redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock, or other securities;
(d) declare, set aside, make or pay any dividend or other
distribution (whether payable in cash, stock, property or a combination
thereof) with respect to any of its capital stock (other (i) than dividends or
distributions paid by wholly-owned Company Subsidiaries to the Company or to
other wholly-owned Company Subsidiaries, (ii) cash dividends paid pursuant to
Section 2(a)(3) of the Company Preferred Stock Certificate of Designations or
(iii) the Change of Control Distribution);
(e) sell, pledge, dispose of (including a disposition on
account of Lease termination), transfer, lease, license, abandon, fail to
maintain or encumber, or authorize the sale, pledge, disposition, transfer,
lease, license, abandonment, failure to maintain or encumbrance of, any
material property, rights or assets of the Company or any Company Subsidiary,
except (A) sales, pledges, dispositions, transfers, leases, licenses or
encumbrances pursuant to existing Contracts disclosed in the Company
Disclosure Letter, (B) sales, pledges, dispositions, transfers, leases,
licenses or encumbrances of property or assets by the Company or a Company
Subsidiary in the ordinary course of business consistent with past practice,
or (C) sales or dispositions of inventory and other tangible current assets in
the ordinary course of business consistent with past practice;
(f) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any Person (other
than a wholly-owned Company Subsidiary) for borrowed money, except for
indebtedness (i) incurred under the Company's existing credit facilities or
renewals or refinancings thereof or (ii) in an aggregate principal amount not
to exceed $5 million at any time outstanding;
(g) engage in any transaction with, or enter into, amend or
terminate (except pursuant to its terms) any agreement, arrangement, or
understanding with, directly or indirectly, any of the Company's Affiliates,
including, without limitation, any transactions, agreements, arrangements or
understandings with any Affiliate or other Person covered under Item 404 of
Regulation S-K promulgated by the SEC that would be required to be disclosed
under such Item 404 other than such transactions as are disclosed in the
Company Disclosure Letter;
(h) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a dissolution,
consolidation, recapitalization or bankruptcy reorganization;
(i) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any person
or any division thereof or any assets, other than acquisitions of assets in
the ordinary course of business consistent with past practice for
consideration that is individually not in excess of $10 million, or in the
aggregate, not in excess of $15 million, (ii) terminate, cancel or request any
material change in, or agree to any material change in, any Company Material
Contract other than in the ordinary course of business consistent with past
practice, (iii) make or authorize any capital expenditure in excess of the
amounts set forth in the Company's budget and financial plan provided to
Parent prior to the date hereof, other than capital expenditures that are not,
in the aggregate, in excess of $10 million or (iv) enter into or amend any
contract, agreement, commitment or arrangement that, if fully performed, would
not be permitted under this Section 5.1(i);
(j) except as may be required by contractual commitments
with respect to severance or termination pay in existence on the date of this
Agreement as disclosed in Section 3.13 of the Company Disclosure Schedule: (i)
increase the compensation or benefits payable or to become payable to its
directors, officers or employees (except for customary increases in accordance
with past practices in salaries or wages of employees of the Company or any
Company Subsidiary which are not across-the-board increases); (ii) grant any
rights to severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the
Company or any Company Subsidiary, or establish, adopt, enter into or amend
any collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee,
except to the extent required by applicable Law or the terms of a collective
bargaining agreement in existence on the date of this Agreement; or (iii)
except as contemplated by Section 2.5, take any affirmative action to amend or
waive any performance or vesting criteria or accelerate vesting,
exercisability or funding under any Company Employee Plan;
(k) except for payments made in connection with the
extinguishment of Leases in connection with theatre closures in an aggregate
amount not to exceed $10 million, (i) pre-pay any long-term debt, except in
the ordinary course of business in an amount not to exceed $5 million in the
aggregate for the Company and the Company Subsidiaries taken as a whole, or
(ii) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, contingent or otherwise), except in the ordinary course of
business consistent with past practice and in accordance with their terms;
(l) make any change in accounting policies or procedures,
other than in the ordinary course of business consistent with past practice or
except as required by GAAP or by a Governmental Entity;
(m) waive, release, assign, settle or compromise any
material claims, or any material litigation or arbitration, except where the
amount of any claim waived, released, assigned, settled or compromised, or the
amount paid in any settlement or compromise, does not exceed $2.5 million;
(n) write up, write down or write off the book value of any
assets, except for depreciation, amortization and impairment charges recorded
in accordance with GAAP consistently applied;
(o) permit any material insurance policy naming the Company
or any Company Subsidiary as a beneficiary or a loss payee to be canceled or
terminated other than in the ordinary course of business;
(p) modify, amend or waive any provision of the Apollo
Investment Agreement or the Apollo Standstill Agreement; or
(q) take any action that is intended or would reasonably be
expected to result in any of the conditions to the Merger set forth in Article
VII not being satisfied;
(r) (i) amend any material Tax Returns (unless required by
Law); (ii) make or change any material elections relating to Taxes other than
elections made or changed in the ordinary course of business or as required by
Law; (iii) change any material accounting method relating to Taxes (unless
required by GAAP or a change in Law); (iv) enter into any closing agreement
relating to Taxes, settle any claim or assessment relating to Taxes or consent
to any claim or audit relating to Taxes, in each individual case, involving an
amount in controversy greater than $5 million;
(s) permit to lapse any registrations or applications for
material Intellectual Property owned, licensed, or used by the Company or any
Company Subsidiary; or
(t) authorize or enter into any agreement or otherwise make
any commitment to do any of the foregoing.
Section 5.2 Tax Covenant. Immediately prior to the Closing,
the Company shall furnish to Parent and Merger Sub a certification in
accordance with Treasury Regulation Section 1.1445-2(c), and otherwise in form
and substance reasonably satisfactory to Parent and Merger Sub, certifying
that an interest in the Company is not a United States real property interest
because the Company is not and has not been a United States real property
holding corporation (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Proxy Statement.
(a) As promptly as practicable after the execution of this
Agreement, the Company shall prepare and file with the SEC a proxy statement
(together with any amendments thereof or supplements thereto and any other
required proxy materials, the "Proxy Statement") relating to the Company
Stockholders' Meeting (as defined below) and a Rule 13e-3 Transaction
Statement on Schedule 13E-3 (together with any amendments thereof or
supplements thereto, the "Schedule 13E-3"); provided, however, that prior to
filing the Proxy Statement and the Schedule 13E-3, the Company shall consult
with Parent and Merger Sub with respect to such filings and shall afford
Parent and Merger Sub reasonable opportunity to comment thereon. Parent shall
furnish all information concerning it and Merger Sub and the holders of its
capital stock as the Company may reasonably request in connection with the
preparation of the Proxy Statement and the Schedule 13E-3. The Company shall
promptly notify Parent and Merger Sub of the receipt of comments of the SEC
and of any request from the SEC for amendments of, or supplements to, the
Proxy Statement or the Schedule 13E-3 or for additional information. The
Company (in consultation with Parent and Merger Sub) shall use its reasonable
best efforts to respond to the comments of the SEC with respect to the Proxy
Statement and the Schedule 13E-3 and to cause the Proxy Statement to be mailed
to its stockholders as promptly as practicable after the Proxy Statement shall
have been cleared by the SEC. The Company will promptly supply Parent and
Merger Sub with copies of all correspondence between the Company or any of its
Representatives, on the one hand, and the SEC or members of its staff, on the
other hand, with respect to the Proxy Statement, the Schedule 13E-3 or the
Merger. If at any time prior to the Company Stockholders' Meeting any event
should occur which is required by applicable Law to be set forth in an
amendment of, or a supplement to, the Proxy Statement or Schedule 13E-3, the
Company will prepare and mail such amendment or supplement; provided further
that prior to such mailing, the Company shall consult with Parent and Merger
Sub with respect to such amendment or supplement and shall afford Parent and
Merger Sub reasonable opportunity to comment thereon. Subject to the
provisions of Section 6.4, the Company Recommendation, together with a copy of
the opinions referred to in Section 3.22, shall be included in the Proxy
Statement.
(b) The Company represents and warrants that the Proxy
Statement and Schedule 13E-3 will, in the case of the Schedule 13E-3, as of
the date thereof, the date of any amendment thereto, and as of the time of the
Company Stockholders' Meeting, and, in the case of the Proxy Statement, as of
the time the Proxy Statement (or any amendment thereof or supplement thereto)
is first mailed to the Company's stockholders and as of the time of the
Company Stockholders' Meeting, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Proxy Statement
and the Schedule 13E-3 will comply as to form in all material respects with
the provisions of the Exchange Act. Notwithstanding the foregoing, the Company
makes no representation or warranty with respect to any statements made or
incorporated by reference in the Proxy Statement or Schedule 13E-3 based on
information supplied by Parent or Merger Sub for inclusion or incorporation by
reference therein.
(c) Parent and Merger Sub represent and warrant that the
information supplied or to be supplied by Parent and Merger Sub in writing for
inclusion or incorporation by reference in the Proxy Statement or the Schedule
13E-3 will, in the case of the Schedule 13E-3, as of the date thereof, the
date of any amendment thereto, and as of the time of the Company Stockholders'
Meeting, and, in the case of the Proxy Statement, as of the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the Company's stockholders, and as of the time of the Company Stockholders'
Meeting, not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading. Notwithstanding the foregoing, Parent and Merger Sub
make no representation or warranty with respect to any statements made or
incorporated by reference in the Proxy Statement or Schedule 13E-3 based on
information supplied by the Company for inclusion or incorporation by
reference therein.
Section 6.2 Company Stockholders' Meeting. The Company shall
duly call and hold a meeting of its stockholders (the "Company Stockholders'
Meeting") as promptly as reasonably practicable, in compliance with applicable
Law, following the mailing of the Proxy Statement, for the purpose of voting
upon the adoption of this Agreement and the Merger and any other matters the
Company reasonably determines to be necessary or appropriate. In connection
with the Company Stockholders' Meeting and the transactions contemplated
hereby, the Company will (i) subject to Section 6.4, use its reasonable best
efforts to obtain the Company Stockholder Approval, and (ii) otherwise comply
with all legal requirements applicable to the Company Stockholders' Meeting.
Section 6.3 Access to Information; Confidentiality.
(a) From the date of this Agreement to the Effective Time,
the Company shall, and shall cause each of the Company Subsidiaries and each
of their respective officers, directors, employees, attorneys, accountants,
advisors, representatives and agents (collectively, "Representatives") to, (i)
provide to Parent and Merger Sub and their respective Representatives access
at reasonable times upon prior notice to the officers, employees, agents,
properties, offices and other facilities (including each theatre premises) of
the Company and the Company Subsidiaries and to the books and records thereof,
and (ii) subject to applicable Laws relating to the exchange of information,
furnish promptly such information concerning the business, properties,
Contracts, assets, liabilities, personnel and other aspects of itself and its
Subsidiaries as the other party and its Representatives may reasonably
request. No investigation conducted pursuant to this Section 6.3(a) shall
affect or be deemed to modify or limit any representation or warranty made in
this Agreement. Such access shall afford Parent the opportunity, outside of
the Company's normal hours of operation, to conduct visual inspections, take
measurements, make surveys and perform any standard "phase I" environmental
inspections deemed desirable by Parent.
(b) With respect to the data and information disclosed
pursuant to this Section 6.3, the parties shall comply with, and shall cause
their respective Representatives to comply with, their obligations under the
confidentiality agreement, dated May 28, 2004, previously executed by ▇.▇.
▇▇▇▇▇▇ Partners, LLC and the Company (the "Confidentiality Agreement").
Section 6.4 No Solicitation by the Company.
(a) From the date of this Agreement until the Effective
Time, the Company shall not, and shall cause its Subsidiaries and its and
their respective Representatives not to, and shall use its reasonable best
efforts to ensure that their respective Affiliates and Representatives thereof
do not, directly or indirectly through another Person, (i) solicit, initiate
or knowingly encourage (including by way of furnishing information), or take
any other action designed to facilitate, any inquiries or the making of any
proposal that constitutes, or could reasonably be expected to lead to, an
Acquisition Proposal, (ii) enter into, continue or otherwise participate in
any discussions or negotiations with, or disclose or provide any non-public
information or data relating to the Company or the Company Subsidiaries to, or
otherwise afford access to the properties, books or records of the Company or
the Company Subsidiaries to, any Third Party or any Representatives thereof
with respect to any Acquisition Proposal or (iii) enter into any agreement or
agreement in principle with any Third Party with respect to an Acquisition
Proposal or Company Alternative Transaction; provided, however, that, at any
time prior to obtaining the Company Stockholder Approval, the Company and its
Representatives may take any action described in clause (ii) of this
subsection (a) in response to any Person that has made a bona fide unsolicited
written Acquisition Proposal after the date hereof if, but only if, (A) such
written Acquisition Proposal did not result from a breach of this Section 6.4
and the Company has fully complied with its obligations under this Section
6.4, (B) such Third Party has entered into a confidentiality agreement with
the Company on terms that are no less favorable to the Company than the
Confidentiality Agreement, (C) the Company Independent Committee or the Board
of Directors of the Company (as applicable) has reasonably determined in good
faith, after consultation with outside legal counsel, that the failure to take
any such action would be inconsistent with its fiduciary duties to the
Company's stockholders under applicable Law and (D) prior to, or substantially
concurrent with, disclosing or providing any such non-public information, the
Company shall (to the extent it has not already done so) disclose or provide
all such information to Parent. Upon execution of this Agreement, the Company
shall, and shall cause its Representatives, and shall use its reasonable best
efforts to cause its and their Affiliates and their respective
Representatives, to, cease immediately and cause to be terminated any and all
existing discussions, conversations, negotiations and other communications
with any Persons conducted heretofore with respect to, or that could
reasonably be expected to lead to, an Acquisition Proposal.
(b) The Company shall promptly (and in no event later than
24 hours after receipt thereof) advise Parent, telephonically and in writing,
of the Company's receipt of any Acquisition Proposal or any proposal, inquiry
or request related to, or that could reasonably be expected to lead to, or
that contemplates the possibility of, any Acquisition Proposal. The Company
shall promptly (and in no event later than 24 hours after receipt thereof)
provide Parent, in writing, with the terms and conditions of any such
Acquisition Proposal, or such proposal, inquiry or request and the identity of
the Person making the same. Immediately upon determination by the Company
Independent Committee or the Board of Directors of the Company (as applicable)
that an Acquisition Proposal constitutes a Superior Proposal, the Company
shall deliver to Parent a written notice ("Notice of Superior Proposal")
advising Parent that the Company Independent Committee or the Board of
Directors of the Company (as applicable) has so determined, specifying the
terms and conditions of such Superior Proposal and the identity of the Person
making such Superior Proposal and providing Parent with a copy of the Superior
Proposal.
(c) Each of the Company Independent Committee and the Board
of Directors of the Company (as applicable) has adopted a resolution declaring
advisable and recommending adoption of this Agreement by the Company's
stockholders (the "Company Recommendation"). Neither the Company Independent
Committee nor the Board of Directors of the Company (as applicable) shall (i)
withdraw, qualify or modify, or propose publicly to withdraw, qualify or
modify, in a manner adverse to Parent, the Company Recommendation, (ii)
approve or recommend, or propose publicly to approve or recommend, any Company
Alternative Transaction or (iii) enter into (or cause the Company or any
Company Subsidiary to enter into) any letter of intent, agreement in
principle, acquisition agreement or other agreement (A) related to any Company
Alternative Transaction (other than a customary confidentiality agreement
entered into in accordance with the provisions of Section 6.4(a)) or (B)
requiring the Company to abandon, terminate or fail to consummate the Merger
or any other transaction contemplated by this Agreement. Notwithstanding the
foregoing, in the event that prior to obtaining the Company Stockholder
Approval, the Company Independent Committee or the Board of Directors of the
Company (as applicable) determines in good faith, after consultation with
outside counsel, that the failure to do so would be inconsistent with its
fiduciary duties to the Company's stockholders under applicable Law, (i) the
Company Independent Committee or the Board of Directors of Company (as
applicable) may withdraw, qualify or modify in a manner adverse to Parent the
Company Recommendation or approve or recommend to the stockholders of the
Company a Superior Proposal (a "Company Subsequent Determination"), (ii) the
Company may terminate this Agreement pursuant to Section 8.1(e) and/or (iii)
the Board of Directors of the Company may enter into (or cause the Company or
any Company Subsidiary to enter into) any letter of intent, agreement in
principle, acquisition agreement or other agreement related to a Superior
Proposal; provided that concurrently with entering into any such letter of
intent, agreement in principle, acquisition agreement or other agreement
(other than a customary confidentiality agreement) related to a Superior
Proposal the Company shall terminate this Agreement pursuant to Section 8.1(e)
and pay the Expense Coverage Fee in accordance with Section 8.2(b).
(d) Nothing contained in this Section 6.4 shall prohibit the
Company (i) from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange
Act; provided that disclosures under this sentence shall not be a basis, in
themselves, for Parent or the Company to terminate this Agreement pursuant to
Section 8.1(d) or (e) or (ii) from making any disclosure to its stockholders
if the Company Independent Committee or the Board of Directors of the Company
(as applicable) has reasonably determined in good faith, after consultation
with outside legal counsel, that the failure to do so would be inconsistent
with applicable Law.
Section 6.5 Appropriate Action; Consents; Filings.
(a) Parent and the Company shall each use their reasonable
best efforts to (i) take, or cause to be taken, all appropriate action, and
do, or cause to be done, all things necessary, proper or advisable under
applicable Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable, (ii) obtain any
third party consents necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, (iii) obtain from
any Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required (A) to be obtained or made by Parent, the
Company or any of their respective Subsidiaries, and (B) to avoid any action
or proceeding by any Governmental Entity (including, without limitation, those
in connection with the HSR Act and antitrust and competition Laws of any other
applicable jurisdiction), in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, and (iv) make all necessary
filings, and thereafter make any other required submissions, with respect to
this Agreement and the Merger required under (A) the Securities Act and the
Exchange Act, and any other applicable federal or state securities Laws, (B)
the HSR Act and antitrust and competition Laws of any other applicable
jurisdiction and (C) any other applicable Law. Parent and the Company shall
cooperate with each other in connection with the making of all filings or
submissions referenced in the preceding sentence (including providing copies
of all such documents to the non-filing party and its advisors prior to filing
and, if requested, to accept all reasonable additions, deletions or changes
suggested in connection therewith) and in connection with resolving any
investigation or other inquiry of any Governmental Entity with respect to any
such filing or submission. Parent and the Company shall have the right to
review in advance, and each shall consult the other on, all the information
relating to Parent and its Subsidiaries, or the Company and its Subsidiaries,
as the case may be, that appears in any filing made with, or written materials
submitted to, any Third Party and/or any Governmental Entity in connection
with the Merger and the other transactions contemplated by this Agreement.
Each of Parent and the Company shall promptly notify and provide a copy to the
other party of any written communication received from any Governmental Entity
with respect to any filing or submission or with respect to the Merger and the
other transactions contemplated by this Agreement. Each of Parent and the
Company shall give the other reasonable prior notice of any communication
with, and any proposed understanding, undertaking or agreement with, any
Governmental Entity regarding any such filing or any such transaction. In the
event that either party shall fail to obtain any non-governmental Third Party
consent described in clause (ii) of this Section 6.5(a), such party shall use
all reasonable efforts, and shall take any such actions reasonably requested
by the other party hereto, to minimize any adverse effect upon the Company and
Parent, their respective Subsidiaries, and their respective businesses
resulting, or which could reasonably be expected to result after the Effective
Time, from the failure to obtain such consent; provided, however, that nothing
in this Section 6.5(a) shall require the expenditure of money by Parent,
Merger Sub or the Company in exchange for any such non-governmental Third
Party consent.
(b) From the date of this Agreement until the Effective
Time, each party shall promptly notify the other party in writing of any
pending or, to the Knowledge of Parent or the Company, as appropriate,
threatened action, suit, arbitration or other proceeding or investigation by
any Governmental Entity or any other Person (i) challenging or seeking damages
in connection with the Merger or (ii) seeking to restrain or prohibit the
consummation of the Merger or otherwise limit the right of Parent or its
Subsidiaries to own or operate all or any portion of the businesses or assets
of the Company or its Subsidiaries.
Section 6.6 Public Announcements. Parent and the Company
will consult with each other before issuing, and provide each other the
opportunity to review and make reasonable comment upon, any press release or
making any public statement with respect to this Agreement and the
transactions contemplated hereby and, except as may be required by applicable
Law or any listing agreement with the American Stock Exchange, will not issue
any such press release or make any such public statement prior to such
consultation; provided, however, that Parent or the Company may make any
public statement in response to specific questions by the press, analysts,
investors or those attending industry conferences or financial analyst
conference calls, so long as any such statements are not inconsistent with
previous press releases, public disclosures or public statements made jointly
by Parent and the Company and do not reveal non public information regarding
the other parties.
Section 6.7 Financing.
(a) Commercially Reasonable Efforts. Each of Parent and
Merger Sub shall use its commercially reasonable efforts to complete the
transactions contemplated by the Commitment Letters in accordance with the
Commitment Letters. Without limiting the generality of the foregoing, in the
event that Parent has been notified by the Lenders in writing that funds will
not be available pursuant to the Debt Commitment Letter so as to enable Parent
and Merger Sub to proceed with the Closing in a timely manner, each of Parent
and Merger Sub shall use its commercially reasonable efforts to obtain
alternative financing ("Alternative Financing") in an amount at least equal to
the Required Cash Amount (it being understood that such commercially
reasonable efforts would not require Parent to obtain financing that is (i)
with respect to the economic terms thereof, on terms less favorable to Parent
thereunder than those set forth in the Commitment Letters or the financing
arrangements relating thereto, as the case may be or (ii) with respect to the
non-economic terms thereof, on terms that are not substantially similar to
those set forth in the Commitment Letters or the financing arrangements
relating thereto, as the case may be) or on terms to which the Company has
granted its prior written consent.
(b) Amendments. Parent shall keep the Company informed on a
reasonably current basis in reasonable detail of the status of its efforts to
arrange the Financing or any Alternative Financing in accordance with Section
6.7(a) and shall not permit any amendment or modification to be made to, or
any waiver of any provision or remedy under, the Commitment Letters or the
Parent Subscription Agreement without obtaining the prior written consent of
the Company.
(c) Cooperation. From the date of this Agreement until the
Effective Time, the Company shall, and shall cause the Company Subsidiaries
to, and shall use commercially reasonable efforts to cause their respective
Representatives to, provide all cooperation reasonably requested by Parent
(provided that such requested cooperation does not unreasonably interfere with
the ongoing operations of the Company and the Company Subsidiaries) in
connection with the arrangement of the Debt Financing, including using
commercially reasonable efforts to (i) cause appropriate officers and
employees to be available, on a customary basis and upon reasonable notice, to
meet with prospective lenders and investors in presentations, meetings, road
shows and due diligence sessions, (ii) assist with the preparation of
disclosure documents in connection therewith and (iii) use commercially
reasonable efforts to cause its independent accountants to provide assistance
to Parent, including providing consent to Parent to prepare and use their
audit reports and SAS 100 reviews relating to the Company and the Company
Subsidiaries and, at the cost of Parent, to provide any necessary "comfort
letters" in connection with the Financing; provided that, notwithstanding the
foregoing, no officer or director of the Company shall be required to execute
any documents, including without limitation any registration statement to be
filed with the SEC, any pledge and security documents or other definitive
financing documents. In connection with the Escrow Funding (as such term is
defined in the Debt Commitment Letter), the Company shall, at the direction of
Parent, provide a letter of credit in an amount sufficient to pay all interest
on the escrowed amounts accruing following the Escrow Funding Date in
accordance with the Debt Commitment Letter (it being understood that any
interest earned on such escrowed amounts during the escrow period shall be
remitted to the Company following release of the escrowed amounts).
Section 6.8 [INTENTIONALLY OMITTED].
Section 6.9 Employee Matters.
(a) Those individuals who are employed by the Company
immediately prior to the Effective Time shall, by operation of Law, become
employees of the Surviving Corporation as of the Effective Time (each such
employee, "Affected Employee"); provided, however that this Section 6.9(a)
shall not be construed to limit the ability of the Surviving Corporation to
terminate the employment of any Affected Employee at any time.
(b) Until April 1, 2005, the coverage and benefits provided
to Affected Employees pursuant to employee benefit plans or arrangements
maintained by Parent, the Surviving Corporation, or any Parent Subsidiary
(other than equity or equity-based compensation plans) shall be, in the
aggregate, not less favorable than those provided to such employees
immediately prior to the Closing Date.
(c) The Surviving Corporation shall, and Parent shall cause
the Surviving Corporation to, honor all Company Employee Plans in accordance
with the terms thereof. Parent and the Company acknowledge and agree that the
consummation of the Merger shall be a "change in control" (or "change of
control," where applicable) for purposes of the Company Employee Plans listed
on Section 6.9(c) of the Company Disclosure Letter.
(d) In order to compensate and retain Company Insiders in
connection with the Merger, both prior to and after the Effective Time, it is
desirable that Company Insiders not be subject to a risk of liability under
Section 16(b) of the Exchange Act, to the fullest extent permitted by
applicable Law in connection with the disposition of shares of Company Common
Stock and Company Stock Options in the Merger, and for that compensatory and
retentive purpose, the Board of Directors of the Company, or a committee of
Non-Employee Directors (as such term is defined for purposes of Rule 16b-3(d)
under the Exchange Act) thereof, shall adopt a resolution providing that the
disposition by Company Insiders of Company Common Stock and Company Stock
Options, in each case pursuant to the transactions contemplated by this
Agreement, are intended to be exempt from liability pursuant to Section 16(b)
under the Exchange Act. Actions described in this Section 6.9(d) shall be
taken in accordance with the interpretative letter, dated January 12, 1999,
issued by the SEC to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
Section 6.10 Directors' and Officers' Indemnification and
Insurance.
(a) The Certificate of Incorporation of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification and advancement of expenses for matters occurring prior to the
Effective Time than are set forth in the Restated and Amended Certificate of
Incorporation of the Company as in effect on the date hereof, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
from the Effective Time in any manner that would affect adversely the rights
thereunder of individuals who, at or prior to the Effective Time, were
directors or officers of the Company or any of its Subsidiaries and each
person who serves or served as a director, officer, member, trustee or
fiduciary of any trust, pension or other employee benefit plan or enterprise
or partnership or joint venture of the Company or any of its Subsidiaries
(each, together with such Person's heirs, executives, administrators and
Representatives, the "Indemnified Parties"), unless such modification shall be
required by Law.
(b) Parent and the Surviving Corporation shall maintain or
cause to be maintained in effect for six years from the Effective Time
directors' and officers' liability insurance with respect to acts or omissions
occurring prior to the Effective Time covering each of the Indemnified
Parties, on terms with respect to coverage, amount and advancement of expenses
no less favorable than the directors' and officers' liability insurance
policies maintained by the Company in effect as of the date hereof; provided,
however, that in no event shall the Surviving Corporation or Parent be
required to expend pursuant to this Section 6.10(b) for any annual premium
more than 250% of the current annual premium paid by the Company for its
directors' and officers' liability insurance policies in effect as of the date
hereof (which such current annual premium is set forth in Section 6.10(b) of
the Company Disclosure Letter); provided further, however, that, if the amount
of the annual premium necessary to maintain or procure such insurance coverage
exceeds such maximum amount, the Surviving Corporation shall maintain or
procure, for such six-year period, directors' and officers' insurance
providing (to the Knowledge of the Surviving Corporation at the time such
insurance is procured, and after inquiry of its insurance broker) the greatest
coverage then available for an annual premium equal to that maximum amount.
The provisions of the immediately preceding sentence shall be deemed to have
been satisfied if prepaid policies have been obtained prior to the Effective
Time from an insurer or insurers which have an insurer financial strength
rating by A.M. Best Co. of at least "A", which policies provide the
Indemnified Parties with coverage, from the Effective Time to the sixth
anniversary of the Effective Time, with respect to claims arising from facts
or events that occurred on or before the Effective Time, including, without
limitation, in respect of the transactions contemplated by this Agreement, on
terms with respect to coverage, amount and advancement of expenses no less
favorable than the directors' and officers' liability insurance policies
maintained by the Company in effect as of the date hereof. If such prepaid
policies have been obtained prior to the Effective Time, Parent shall, and
shall cause the Surviving Corporation to, maintain such policies in full force
and effect, and continue to honor the obligations thereunder.
(c) In addition to the other rights provided for in this
Section 6.10 and not in limitation thereof (but without in any way limiting or
modifying the obligations of any insurance carrier contemplated by Section
6.10(b)), for six years from and after the Effective Time, Parent and the
Surviving Corporation each shall jointly and severally and to the fullest
extent permitted by applicable Law indemnify and hold harmless (and release
from any liability to the Surviving Corporation or any of their respective
Subsidiaries), the Indemnified Parties against all reasonable expenses
(including reasonable fees and expenses of counsel), and all losses, claims,
damages, judgments or amounts paid in settlement (collectively, "Losses") in
respect of any threatened, pending or completed claim, action suit or
proceeding, whether criminal, civil, administrative or investigative, based
on, or arising out of or relating to the fact that such Person is or was a
director, officer, member, trustee or fiduciary of the Company or of any of
its current or former Subsidiaries or any trust, pension or other employee
benefit plan or enterprise or partnership or joint venture of the Company or
any of its current or former Subsidiaries or arising out of acts or omissions
occurring on or prior to the Effective Time (including, without limitation, in
respect of acts or omissions in connection with this Agreement and the
transactions contemplated hereby) (collectively, an "Indemnifiable Claim");
provided, that the Surviving Corporation shall not be responsible for any
amounts paid in settlement of any Indemnifiable Claim without the consent of
Parent and the Surviving Corporation, which consent shall not be unreasonably
withheld. The Surviving Corporation shall advance all reasonable expenses
(including reasonable fees and expenses of counsel) incurred by or on behalf
of an Indemnified Party in connection with an Indemnifiable Claim within 10
days after receipt by it of a statement or statements from such Indemnified
Party requesting such advance or advances from time to time, provided that
prior thereto the Indemnified Party provides to the Surviving Corporation an
undertaking to repay such advances if it is ultimately determined that such
person is not entitled to indemnification from the Surviving Corporation. In
the event any Indemnifiable Claim is asserted or made within such six-year
period, all rights to indemnification shall continue until such claim is
finally disposed of or all judgments, orders, decrees or other rulings in
connection with such claim are fully satisfied. Parent and the Surviving
Corporation shall reasonably cooperate with the Indemnified Party in the
defense of any action which is, or may result in, an Indemnifiable Claim.
(d) Parent and the Surviving Corporation shall be jointly
and severally liable to pay all reasonable expenses, including reasonable
attorney's fees, that may be incurred by any Indemnified Party in enforcing
the indemnity and other obligations provided for in this Section 6.10. The
obligations of Parent and the Surviving Corporation under this Section 6.10
shall not be terminated or modified in such a manner as to adversely affect
any Indemnified Party without the consent of such Indemnified Party and shall
survive the consummation of the Merger, it being expressly agreed that the
Indemnified Parties to whom this Section 6.10 applies shall be third party
beneficiaries of this Section 6.10.
(e) In the event that Parent, the Surviving Corporation or
any of their respective successors or assigns (i) consolidates with or merges
into any other Person and shall not be the continuing or surviving corporation
or entity in such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then and in
either such case, proper provision shall be made so that the successors and
assigns of Parent, the Surviving Corporation or any of their respective
successors or assigns, as the case may be, shall assume the obligations set
forth in this Section 6.10.
Section 6.11 Certain Notices. From and after the date of
this Agreement until the Effective Time, each party hereto shall promptly
notify the other party hereto of (a) the occurrence, or non-occurrence, of any
event that would be likely to cause any condition to the obligations of any
party to effect the Merger and the other transactions contemplated by this
Agreement not to be satisfied or (b) the failure of the Company or Parent, as
the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it pursuant to this Agreement
which would reasonably be expected to result in any condition to the
obligations of any party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied; provided, however, that
the delivery of any notice pursuant to this Section 6.11 shall not cure any
breach of any representation or warranty requiring disclosure of such matter
prior to the date of this Agreement or otherwise limit or affect the remedies
available hereunder to the party receiving such notice.
Section 6.12 Solvency Matters. From the date of this
Agreement until the Effective Time, Parent and the Company shall cooperate and
each use their commercially reasonable efforts to obtain an opinion from an
independent expert of nationally recognized reputation, addressed to the
respective boards of directors of each of Parent and the Company and to the
Company Independent Committee, supporting the conclusion that, after giving
effect to all of the transactions contemplated by this Agreement, including
without limitation the Financings, any Alternative Financing and the payment
of the Required Cash Amount, each of Parent and the Surviving Corporation will
be Solvent (or the equivalent thereof, as determined in the reasonable
discretion of Parent and the Company)(such opinion, the "Solvency Opinion").
Without limiting the generality of the foregoing, each of Parent and the
Company shall use their respective commercially reasonable efforts to (i) make
available their respective officers, agents and other Representatives on a
customary basis and upon reasonable notice and (ii) provide or make available
such information concerning the business, properties, Contracts, assets and
liabilities of the Company as may reasonably be requested in connection with
delivering such Solvency Opinion.
Section 6.13 Post-Closing Change of Control Offer. As soon
as practicable following the Effective Time (but in any event within 30 days
thereof), Parent shall commence a Change of Control Offer (as defined in the
indenture relating to the Company's outstanding 9.5% Senior Subordinated Notes
due 2011) in order to comply with the Company's obligations with respect to
such notes as contained in such indenture, or shall take such other actions as
will satisfy in full the Company's obligations under such indenture with
respect thereto.
Section 6.14 Enforcement of Voting Agreements. The Company
hereby agrees that it shall enforce its rights under the Apollo Consent and
the Trust Voting Agreement, and shall not, without the prior written consent
of Parent, amend, modify or waive any of its rights or grant any consent
thereunder, or terminate or enter into any agreement with such other party
thereto which is inconsistent with the terms and subject matter of either such
agreement, in each case without the prior written consent of Parent. Without
limiting the foregoing, the Company shall, if directed by Parent following a
breach by any party to the Apollo Consent or the Trust Voting Agreement, use
its reasonable efforts to seek a judicial or governmental order requiring
specific performance by the breaching party. Expenses incurred by the Company
pursuant to the immediately preceding sentence (i) with respect to enforcement
of the Trust Voting Agreement, shall be borne by Parent and (ii) with respect
to enforcement of the Apollo Consent, shall be shared equally by Parent and
the Company. Company shall promptly provide Parent with a copy of any notice
delivered pursuant to Section 5.4 of the Trust Voting Agreement or Section 6.4
of the Apollo Consent Agreement.
ARTICLE VII
CLOSING CONDITIONS
Section 7.1 Conditions to Obligations of Each Party under
this Agreement. The respective obligations of each party to effect the Merger
and the other transactions contemplated herein shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived, in whole or in part, to the extent
permitted by applicable Law:
(a) Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(b) No Order. No Governmental Entity, nor any federal or
state court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree,
judgment or injunction or order (whether temporary, preliminary or permanent),
in any case which is in effect and which prevents or prohibits consummation of
the Merger.
(c) Regulatory Approvals. The applicable waiting periods,
together with any extensions thereof, under the HSR Act and the antitrust and
competition laws of the jurisdictions set forth in Section 7.1 of the Company
Disclosure Letter shall have expired or been terminated.
(d) Solvency Opinion. Each of Parent, the Company and the
Company Independent Committee shall have received the Solvency Opinion, as to
which they will each be addressees.
Section 7.2 Additional Conditions to Obligations of Parent
and Merger Sub. The obligations of Parent and Merger Sub to effect the Merger
and the other transactions contemplated herein are also subject to the
following conditions:
(a) Representations and Warranties. Except as set forth in
the following sentence, the representations and warranties of the Company
contained in this Agreement shall be true and correct (without giving effect
to any limitation as to "materiality" or "Material Adverse Effect" set forth
therein) at and as of the Effective Time as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as
of such earlier date), except where the failure of such representations and
warranties to be true and correct (without giving effect to any limitation as
to "materiality" or "Material Adverse Effect" set forth therein) would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The representations and warranties of the
Company contained in Section 3.1, Section 3.2, Section 3.3, Section 3.8(a) and
Section 3.21 shall be true and correct in all respects at and as of the
Effective Time as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date.
Parent shall have received a certificate signed by an executive officer of the
Company to the foregoing effect.
(b) Agreements and Covenants. The Company shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it on
or prior to the Effective Time. Parent shall have received a certificate
signed by an executive officer of the Company to the foregoing effect.
(c) Apollo Consent. The Apollo Consent shall be in full
force and effect.
(d) Financing. The Debt Financing shall have been obtained
by Parent and Merger Sub on the terms and conditions set forth in the
Commitment Letters, or alternative financing as provided in Section 6.7(a) of
this Agreement shall have been obtained by Parent and Merger Sub; provided
that this condition shall be deemed satisfied in the event that the Debt
Financing is not available because either of Parent or Merger Sub is in
material breach of Section 4.5 or 6.7 of this Agreement.
(e) Appraisal Rights. The aggregate number of shares of
Company Common Stock immediately prior to the Effective Time, the holders of
which have demanded and perfected their demands for appraisal of their shares
from the Company in accordance with the provisions of Section 262 of the DGCL,
shall not exceed 10% of the sum of (i) the total number of shares of Company
Common Stock outstanding as of the record date for the Company Stockholders'
Meeting plus (ii) the total number of shares of Company Common Stock issuable
upon conversion of the Company Preferred Stock outstanding as of the record
date for the Company Stockholders' Meeting plus (iii) the total number of
shares of Company Common Stock issuable upon conversion of the Company
Preferred Stock issuable as the Change of Control Distribution plus (iv) the
total number of shares of Class B Stock outstanding as of the record date for
the Company Stockholders' Meeting.
(f) FIRPTA. The Company shall have delivered to Parent and
Merger Sub the certificate referenced in Section 5.2.
Section 7.3 Additional Conditions to Obligations of the
Company. The obligation of the Company to effect the Merger and the other
transactions contemplated in this Agreement is also subject to the following
conditions:
(a) Representations and Warranties. Except as set forth in
the following sentence, the representations and warranties of Parent and
Merger Sub contained in this Agreement shall be true and correct (without
giving effect to any limitation as to "materiality" or "Material Adverse
Effect" set forth therein) at and as of the Effective Time as if made at and
as of such time (except to the extent expressly made as of an earlier date, in
which case as of such earlier date), except where the failure of such
representations and warranties to be true and correct (without giving effect
to any limitation as to "materiality" or "Material Adverse Effect" set forth
therein) would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Parent. The representations and
warranties of Parent and Merger Sub contained in Section 4.2 shall be true and
correct in all respects at and as of the Effective Time as if made at and as
of such time (except to the extent expressly made as of an earlier date, in
which case as of such earlier date). The Company shall have received a
certificate signed by an executive officer of Parent to the foregoing effect.
(b) Agreements and Covenants. Parent shall have performed or
complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it on or prior to the
Effective Time. The Company shall have received a certificate of an executive
officer of Parent to the foregoing effect.
(c) Apollo Consent. The Apollo Consent shall be in full
force and effect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, by action taken or authorized by the
Board of Directors of the terminating party or parties, and except as provided
below, whether before or after adoption of this Agreement and the Merger by
the stockholders of the Company:
(a) By mutual written consent of Parent and the Company,
which consent shall have been approved by action of their respective Boards of
Directors;
(b) By written notice of either Parent or the Company, if
the Merger shall not have been consummated prior to January 31, 2005 (the
"Outside Date"); provided, that the right to terminate this Agreement pursuant
to this Section 8.1(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement (including such party's
obligations under Section 6.5) has been the cause of, or resulted in, the
failure of the Merger to occur on or before such date;
(c) By written notice of either Parent or the Company, if
any Governmental Entity shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise prohibiting
the Merger, and such order, decree, ruling or other action shall have become
final and nonappealable (which order, decree, ruling or other action the
parties shall have used their reasonable best efforts to resist, resolve or
lift, as applicable, subject to Section 6.5);
(d) By written notice of Parent, if (i) the Company
Independent Committee or the Board of Directors of the Company (as applicable)
shall have made a Company Subsequent Determination or (ii) the Company shall
have provided written notice to Parent that the Company is concurrently
entering into a letter of intent, agreement in principle, acquisition
agreement or other agreement related to a Superior Proposal (other than a
customary confidentiality agreement);
(e) By written notice of the Company, if the Company
Independent Committee or the Board of Directors of the Company (as applicable)
shall have made a Company Subsequent Determination;
(f) By written notice of Parent, if there has been a breach
by the Company of any representation, warranty, covenant or agreement
contained in this Agreement which would result in a failure of a condition set
forth in Section 7.2(a) or 7.2(b) and either cannot be cured prior to the
Outside Date or is not cured within 15 days after Parent shall have given the
Company written notice stating Parent's intention to terminate this Agreement
pursuant to this Section 8.1(f) and the basis for such termination; provided,
at the time of the delivery of such notice, neither Parent nor Merger Sub
shall be in material breach of its obligations under this Agreement;
(g) By written notice of the Company, if there has been a
breach by Parent or Merger Sub of any representation, warranty, covenant or
agreement contained in this Agreement which would result in a failure of a
condition set forth in Section 7.3(a) or 7.3(b) and either cannot be cured
prior to the Outside Date or is not cured within 15 days after Company shall
have given Parent written notice stating the Company's intention to terminate
this Agreement pursuant to this Section 8.1(g) and the basis for such
termination; provided, at the time of the delivery of such notice, the Company
shall not be in material breach of its obligations under this Agreement; or
(h) By written notice of either Parent or the Company, if
the Company Stockholder Approval shall not have been obtained at the Company
Stockholders' Meeting duly convened therefor (or at any adjournment or
postponement thereof) at which a quorum is present and the votes to adopt this
Agreement and the Merger are taken.
Section 8.2 Effect of Termination.
(a) Limitation on Liability. In the event of termination of
this Agreement by either Parent or the Company as provided in Section 8.1,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of the Company, Merger Sub or Parent or their
respective Subsidiaries, officers or directors, except (i) with respect to
Sections 6.3(b), 6.6, 8.2, 8.5 and Article IX and (ii) with respect to any
liabilities or damages incurred or suffered by the Company as a result of the
breach by Parent or Merger Sub of any of its representations, warranties,
covenants or other agreements set forth in this Agreement.
(b) Expense Reimbursement. If this Agreement is terminated:
(i) by Parent or the Company pursuant to Section
8.1(a), 8.1(b), 8.1(c), 8.1(d), 8.1(e) or 8.1(f), then the Company shall
(1) pay to Parent a fee equal to $10 million, which shall be deemed to
compensate Parent for its Expenses (the "Expense Coverage Fee") and (2)
pay to the Lenders, at the direction of Parent, the Escrow Breakage
Expenses;
(ii) by Parent or the Company pursuant to Section
8.1(h) and, prior to the time of the Company Stockholders' Meeting, a
Company Alternative Transaction shall have been consummated, then the
Company shall (1) pay to Parent the Expense Coverage Fee and (2) pay to
the Lenders, at the direction of Parent, the Escrow Breakage Expenses;
and
(iii) by Parent or the Company pursuant to Section
8.1(h) and (A) at any time after the date of this Agreement and before
such termination, an Acquisition Proposal shall have been publicly
announced or otherwise become publicly known and such Acquisition
Proposal shall not have been withdrawn prior to the event giving rise to
such right of termination under Section 8.1(h) and (B) within 9 months of
such termination, (x) the Company recommends or enters into a definitive
agreement with respect to a Company Alternative Transaction relating to
such Acquisition Proposal with the party (or an Affiliate of the party)
who made such Acquisition Proposal or (y) the Company consummates a
transaction that would constitute a Company Alternative Transaction
relating to such Acquisition Proposal with the party (or an Affiliate of
the party) who made such Acquisition Proposal, then the Company shall (1)
pay to Parent the Expense Coverage Fee and (2) pay to the Lenders, at the
direction of Parent, the Escrow Breakage Expenses.
(c) Payment of the Expense Coverage Fee pursuant to this
Section 8.2 shall be paid by wire transfer in immediately available funds to
an account designated by Parent no later than two (2) Business Days following
the event giving rise to payment of such Expense Coverage Fee; provided, in
the case of a termination pursuant to Section 8.1(e), the Expense Coverage Fee
shall be payable concurrently with such termination. All payments by the
Company of the Escrow Breakage Expenses pursuant to this Section 8.2 shall be
due and payable, with respect to the commitment fees, within two (2) business
days after the event giving rise to the payment of the Escrow Breakage
Expenses and, with respect to the reasonable out-of-pocket expenses of the
Lenders, within three (3) business days after submission to the Company of
detailed statements therefor. Any payment pursuant to this Section 8.2 shall
be the exclusive remedy of the party receiving such payment resulting from the
termination of this Agreement.
(d) All Payments. Parent and the Company acknowledge that
the agreements contained in this Section 8.2 and Section 8.5 are an integral
part of the transactions contemplated by this Agreement and that, without
these agreements, neither Parent nor the Company would enter into this
Agreement. Accordingly, if either party fails promptly to pay any amount due
pursuant to this Section 8.2 or Section 8.5 and, in order to obtain such
payment, Parent or the Company, as applicable, commences a suit which results
in a judgment against the other party for the amount set forth in this Section
8.2 or Section 8.5, such defaulting party shall pay to the prevailing party
its costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amount of the fee at
the prime rate of Citibank, N.A. in effect on the date such payment was
required to be made.
Section 8.3 Amendment.
(a) This Agreement may be amended by the parties hereto at
any time prior to the Effective Time by action taken by or on behalf of each
of the Board of Directors of Parent, the Company Independent Committee and a
majority of the directors of the Company who are not affiliated with the
Apollo Investors; provided, however, that, after approval of the Merger by the
stockholders of the Company, no amendment may be made without further
stockholder approval which, by Law or in accordance with the rules of the
American Stock Exchange, requires further approval by such stockholders. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
(b) The parties agree that until 10 business days prior to
the Company Stockholders' Meeting, the Apollo Investors may request that this
Agreement and the other documents delivered in connection herewith be amended,
and the parties hereto shall agree to such amendments, to provide for one or
more of the Apollo Investors to contribute all or a portion of the Company
Common Stock owned by such Apollo Investor immediately prior to the Merger to
Parent for equity securities of Parent in lieu of the conversion of such
Company Common Stock into cash upon consummation of the Merger (with each
share of such contributed Company Common Stock valued at the Common Stock
Consideration) if such amendments would not (x) result in a decrease in the
price per share to be received in the Merger by the holders of Company Capital
Stock (other than the Apollo Investors in respect of the contributed
securities), (y) result in an increase in the aggregate consideration to be
invested by ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P. in Parent pursuant to the Equity
Commitment Letter and the Parent Investment Agreement, or (z) impede or delay
the consummation of the Merger. Any such amendments shall provide that the
Company Common Stock held by Parent shall not be affected by the Merger and
shall remain outstanding as Common Stock of the Surviving Corporation except
as may be adjusted in the Merger to maintain relative ownership percentages.
Section 8.4 Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties of the other party
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance by the other party with any of the agreements or conditions
contained herein; provided, however, that after any approval of the
transactions contemplated by this Agreement by the stockholders of the
Company, there may not be, without further approval of such stockholders, any
extension or waiver of this Agreement or any portion thereof which, by Law or
in accordance with the rules of the American Stock Exchange, requires further
approval by such stockholders. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party or parties
to be bound thereby, but such extension or waiver or failure to insist on
strict compliance with an obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. Any waiver granted by the Company pursuant to this Section 8.4
will be given and effective only upon approval of the Company Independent
Committee and a majority of the directors of the Company who are not
affiliated with the Apollo Investors.
Section 8.5 Fees and Expenses. All Expenses incurred by the
parties hereto shall be borne solely by the party which has incurred the same;
provided, however, that (i) all filing fees required in connection with the
filing of Premerger Notifications under the HSR Act and any filings under
antitrust and competition Laws of any other applicable jurisdiction shall be
borne solely by the Company and (ii) all expenses incurred pursuant to Section
6.14 shall be borne by the parties as set forth therein, in each case whether
or not the Merger is consummated.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 9.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time.
Section 9.2 Notices. Any notices or other communications
required or permitted under, or otherwise in connection with this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in Person or upon confirmation of receipt when transmitted by facsimile
transmission (but only if followed by transmittal by national overnight
courier or hand delivery on the next Business Day) or on receipt after
dispatch by registered or certified mail, postage prepaid, addressed, or on
the next Business Day if transmitted by national overnight courier, in each
case as follows:
(a) If to the Company, addressed to it at:
AMC Entertainment Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Parent or Merger Sub, addressed to it at:
Marquee Holdings Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Partners (BHCA), L.P.
1221 Avenue of the Americas
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
and
Apollo Management, L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
With a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
Section 9.3 Certain Definitions. For purposes of this
Agreement, the term:
"Acquisition Proposal" means any inquiry, offer or proposal
from any Third Party (whether or not in writing) relating to, or that could
reasonably be expected to lead to, a Company Alternative Transaction.
"Affiliate" of a specified person means a Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the Person specified (it being
understood that the Trust, the Apollo Investors and their respective
Affiliates shall not be deemed to be Affiliates of the Company for purposes of
this definition).
"Apollo Investment Agreement" means that certain Investment
Agreement, dated April 19, 2001, by and among certain Apollo Investors named
therein and the Company.
"Apollo Investors" means Apollo Investment Fund IV, L.P.,
Apollo Overseas Partners IV, L.P., Apollo Investment Fund V, L.P., Apollo
Overseas Partners V, L.P., AP Entertainment LLC, Apollo Netherlands Partners V
(A), L.P., Apollo Netherlands Partners V (B), L.P., Apollo German Partners V
GmbH & Co. KG, Apollo Management IV, L.P. and Apollo Management V, L.P.
"Apollo Standstill Agreement" means that certain Standstill
Agreement, dated April 19, 2001, by and among certain Apollo Investors named
therein and the Company.
"beneficial ownership" (and related terms such as
"beneficially owned" or "beneficial owner") has the meaning set forth in Rule
13d-3 under the Exchange Act.
"Business Day" means any day on which banks are not required
or authorized to close in the City of New York.
"Company Alternative Transaction" means any (i) transaction
or series of transactions pursuant to which any Third Party acquires or would
acquire, directly or indirectly, beneficial ownership of either (x) more than
50% of the outstanding shares of any class of the Company or (y) more than 20%
of the aggregate outstanding voting power of the Company, whether from the
Company or its stockholders pursuant to a tender offer, exchange offer or
otherwise, (ii) any acquisition or proposed acquisition of the Company or any
of its Significant Subsidiaries by a stock purchase, merger, consolidation,
recapitalization, business combination, share exchange, liquidation,
dissolution or similar transaction (including any so-called "merger of equals"
and whether or not Company or any of its Significant Subsidiaries is the
entity surviving any such merger or business combination), (iii) any other
transaction pursuant to which any Third Party acquires or would acquire,
directly or indirectly, assets or control of assets (including for this
purpose the outstanding equity securities of the Company Subsidiaries and any
entity surviving any merger or business combination involving any of them) of
the Company or any of the Company Subsidiaries, as appropriate, for
consideration with a fair market value equal to 20% or more of the aggregate
market value of all of the outstanding shares of Company Capital Stock on the
date prior to the date hereof or (iv) any combination of the foregoing.
"Company Capital Stock" means the Company Common Stock, the
Company Class B Stock and the Company Preferred Stock.
"Company Deferred Cash Award" means any Company deferred
cash award granted pursuant to the Company Stock Option Plans.
"Company Deferred Stock Unit" means any deferred stock unit
granted pursuant to the Company Stock Option Plans.
"Company Disclosure Letter" means the disclosure letter
delivered by the Company to Parent and Merger Sub concurrently with the
execution of this Agreement.
"Company Employee Plans" means and includes: each material
employment, bonus, deferred compensation, incentive compensation, stock
purchase, stock option, stock appreciation right or other stock-based
incentive, severance, change-in-control, or termination pay, hospitalization
or other medical, disability, life or other insurance, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement and each other material employee benefit plan,
program, agreement or arrangement, sponsored, maintained or contributed to or
required to be contributed to by Company or any of its Subsidiaries, or by any
trade or business, whether or not incorporated (a "Company ERISA Affiliate"),
that together with Company or any of its Subsidiaries would be deemed a
"single employer" within the meaning of Section 4001(b)(1) of ERISA, for the
benefit of any current or former employee or director of Company, or any of
its Subsidiaries or any Company ERISA Affiliate, whether formal or informal
and whether legally binding or not.
"Company Insiders" means those officers and directors of
Company who are subject to the reporting requirements of Section 16(a) of the
Exchange Act.
"Company Preferred Stock Certificate of Designations" means
that certain Certificate of Designations of Series A Convertible Preferred
Stock and Series B Exchangeable Preferred Stock of AMC Entertainment Inc.,
dated as of April 19, 2001.
"Company Restricted Stock Award" means each restricted share
of Company Common Stock granted pursuant to a Company Stock Option Plan.
"Company Stock Option" means any option to purchase Company
Common Stock.
"Company Stock Option Plans" means the 1994 Stock Option and
Incentive Plan, the 1999 Stock Option and Incentive Plan, the 1999 Stock
Option Plan for Outside Directors, the 2003 Long-Term Incentive Plan and any
other plan, agreement or arrangement pursuant to which Company Stock Options
or other equity-based awards have been issued as of the Effective Time.
"Contract" means any agreement, contract, lease (including
each Lease and each Space Lease), power of attorney, note, loan, evidence of
indebtedness, purchase order, letter of credit, settlement agreement,
franchise agreement, undertaking, covenant not to compete, employment
agreement, license, instrument, obligation, commitment, understanding, policy,
purchase and sales order, quotation and other executory commitment, whether
oral or written, express or implied.
"control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of
securities or as trustee or executor, by Contract or credit arrangement or
otherwise.
"Environmental Claim" means any claim, action, cause of
action, investigation or notice (written or oral) by any Person or entity
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (x) the presence, or release into
the environment, of any Hazardous Material at any location, whether or not
owned or operated by such Person or any of its Subsidiaries or (y)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all federal, interstate, state,
local and foreign laws and regulations relating to pollution or protection of
the environment, including, without limitation, laws relating to Releases or
threatened Releases of Hazardous Materials or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, transport or
handling of Hazardous Materials.
"Environmental Permits" means any permit, approval,
identification number, license and other authorization required under any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Breakage Expenses" means (i) commitment fees payable
to the Lenders, up to a maximum of $6.25 million (which is the commitment fee
in respect of the "Backstop Notes," as such term is defined in the Debt
Commitment Letter) and (ii) all reasonable documented out-of-pocket expenses
of the Lenders and their Affiliates, including all reasonable due diligence
expenses, syndicating expenses, fees and expenses of consultants, travel
expenses and reasonable fees, charges and disbursements of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
LLP and necessary local counsel, incurred in connection with the Debt
Commitment Letter and the financing documents contemplated thereby, up to an
aggregate of $5 million.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Expenses" includes all reasonable and documented
out-of-pocket expenses (including, without limitation, all reasonable fees and
expenses of counsel, accountants, investment bankers, experts and consultants
to a party hereto) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby, other
than Escrow Breakage Expenses.
"GAAP" means generally accepted accounting principles as
applied in the United States.
"group" is defined as in the Exchange Act, except where the
context otherwise requires.
"Hazardous Materials" means (A) any petroleum, petroleum
products, byproducts or breakdown products, radioactive materials, asbestos,
asbestos-containing materials, mold, or polychlorinated biphenyls or (B) any
chemical, material, waste, or other substance defined, listed or regulated as
toxic or hazardous or as a pollutant or contaminant or waste under any
applicable Environmental Law.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
"Intellectual Property" means all inventions and designs
(whether patentable or unpatentable and whether or not reduced to practice),
and all United States and foreign patents, patent applications and invention
disclosures ("Patents"); all trademarks, service marks, brand names, trade
names, Internet domain names, logos and corporate names, together with all
goodwill related to the foregoing, and all applications, registrations and
renewals in connection with the foregoing ("Trademarks"); all copyrights
(registered and unregistered), works of authorship of any type, and all
registrations, renewals and applications for copyright ("Copyrights"); all
rights of publicity, technology, trade secrets, know-how and other
confidential information; all computer programs, including source code and
object code, databases and compilations, technology supporting and content
contained on any owned or operated Internet or intranet site, and all
documentation relating to any of the foregoing ("Software"); and any license
or other right granted to or by a Third Party relating to any of the foregoing
("License Agreements").
"IRS" means the Internal Revenue Service.
"Knowledge" of any Person which is not an individual means,
with respect to any specific matter, the actual knowledge of such Person's
executive officers and any other officer having primary responsibility for
such matter.
"Law" means foreign or domestic law (including common law),
statute, code, ordinance, rule, regulation, order, judgment, writ,
stipulation, award, injunction, decree or arbitration award or finding.
"Lien" means any pledge, claim, lien, charge, easement,
servitude, restrictive covenant, option, right of first refusal, transfer
restriction, security interest, mortgage or encumbrance of any kind.
"Material Adverse Effect" means, with respect to any Person,
any change, event, fact, development, effect, condition or occurrence that,
has been or would reasonably be expected to be materially adverse to the
condition (financial or otherwise), assets, liabilities, properties, business
or results of operations of such Person and its Subsidiaries, taken as a
whole, other than any change, event, fact, development, effect, condition or
occurrence resulting from, or relating to (i) the U.S. economy or financial
markets in general, (ii) the theatrical exhibition industry in general and not
specifically relating to (or having a materially disproportionate effect
(relative to the effect on other Persons operating in such industry) on) such
Person and its Subsidiaries, taken as a whole (excluding for purposes of this
clause (ii) any change, event, fact, development, effect, condition or
occurrence resulting from or relating to a worsening of current conditions due
to an act of terrorism in a theatre in North America or in any theatre owned
or operated by the Company) or (iii) the execution of this Agreement, the
public announcement thereof or any transaction contemplated hereby.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" means (a) zoning and planning
restrictions, easements, permits and other restrictions or limitations of
public record affecting the use of such properties; provided, that
individually and in the aggregate, such restrictions, easements and permits
are not violated by the as-built Improvements, occupancy and use of the
relevant Company Real Property on the date hereof and do not materially impair
the use of such properties as motion picture theatres or for such other
purposes as such properties are currently being used; (b) Liens arising in the
ordinary course of business and securing obligations not yet due and payable;
(c) Liens for Taxes not yet due or being contested in good faith, provided
adequate reserves (based on good faith estimates of management) have been set
aside for the payment thereof; and (d) other encumbrances that individually
and in the aggregate neither detract materially from the value of the affected
Company Real Property nor materially impair the ability of the owner to obtain
financing by using such assets as collateral.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group.
"Release" means and includes any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
migrating, dumping or disposing into the environment or the workplace of any
Hazardous Substance, and otherwise as defined in any Environment Law.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Significant Subsidiary" has the meaning set forth in Rule
1-02 of Regulation S-X.
"Significant Theatre Properties" means the top 70 theatre
properties of the Company ranked in terms of gross revenues (calculated in
accordance with GAAP consistently applied) for the twelve months ended July 1,
2004.
"Solvent" when used with respect to any Person means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount
of all "liabilities of such Person, contingent or otherwise", as of such date,
as such quoted terms are generally determined in accordance with applicable
federal laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"Subsidiary" or "Subsidiaries" of any Person or any other
Person means any corporation, partnership, joint venture or other legal entity
of which such Person, as the case may be (either alone or through or together
with any other subsidiary), owns, directly or indirectly, 50% or more of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the Board of Directors or other governing body of
such corporation or other legal entity.
"Superior Proposal" means any proposal (on its most recently
amended or modified terms, if amended or modified) made by a Third Party to
enter into a Company Alternative Transaction on terms that the Company
Independent Committee or the Board of Directors of the Company (as applicable)
determines in its good faith judgment, after consultation with outside legal
counsel and a financial advisor of nationally recognized reputation, would
result in a transaction, if consummated, more favorable to the Company's
stockholders, from a financial point of view, than the Merger and the
transactions contemplated by this Agreement, taking into account all relevant
factors, including, in the good faith judgment of the Company Independent
Committee or the Board of Directors of the Company (as applicable), the
likelihood that such transaction will be consummated (taking into account,
among other things it deems appropriate, the Third Party's ability to finance
the transaction and any antitrust risk associated with the transaction).
"Taxes" means all taxes, levies or other like assessments,
charges or fees (including estimated taxes, charges and fees), including,
without limitation, income, corporation, advance corporation, gross receipts,
transfer, excise, property, sales, use, value-added, license, payroll,
withholding, social security and franchise or other governmental taxes or
charges, imposed by the United States or any state, county, local or foreign
government or subdivision or agency thereof, and including any liability for
any of the foregoing items of another Person pursuant to Treasury Regulation
Section 1.1502-6 or any similar or analogous provision of applicable law or
otherwise (as transferor or successor, by contract or otherwise) and such term
shall include any interest, penalties or additions to tax attributable to such
taxes.
"Tax Return" means any report, return, statement,
declaration or other written information required to be supplied to a taxing
or other governmental authority in connection with Taxes.
"Third Party" means any Person or group of Persons (other
than Parent and its Affiliates, it being understood that the Apollo Investors
and the Trust and their respective Affiliates are and shall be deemed a Third
Party within the meaning of this definition).
"Treasury Regulations" means the United States Treasury
regulations promulgated under the Code.
"Trust" means the ▇▇▇▇▇▇▇ Voting Trust established pursuant
to the 1992 ▇▇▇▇▇▇▇, Inc. Voting Trust Agreement dated December 12, 1992, as
amended and restated as of August 12, 1997.
"WARN Act" means the Worker Adjustment and Retraining
Notification Act of 1988, as amended.
Section 9.4 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 9.5 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of Law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
Section 9.6 Entire Agreement. This Agreement (together with
the Exhibits, Company and Parent Disclosure Letters) constitute the entire
agreement of the parties and supersede all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to
the subject matter hereof.
Section 9.7 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of Law or
otherwise), without the prior written consent of the other parties, and any
attempt to make any such assignment without such consent shall be null and
void, except that Merger Sub may assign, in its sole discretion, any or all of
its rights, interests and obligations under this Agreement to any wholly-owned
Subsidiary of Parent without the consent of the Company.
Section 9.8 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and their
respective successors and assigns, and, except for the provisions of Section
6.10 and 8.3(b), nothing in this Agreement, express or implied, is intended to
or shall confer upon any other Person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
Section 9.9 Governing Law; Consent to Jurisdiction; Waiver
of Trial by Jury.
(a) This Agreement and the transactions contemplated hereby,
and all disputes between the parties under or related to the Agreement or the
facts and circumstances leading to its execution, whether in Contract, tort or
otherwise, shall be governed by and construed in accordance with the Laws of
the State of Delaware, applicable to contracts executed in and to be performed
entirely within the State.
(b) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Court of Chancery of the State of Delaware in any action
or proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto,
and each of the parties hereby irrevocably and unconditionally (a) agrees not
to commence any such action or proceeding except in such court, (b) agrees
that any claim in respect of any such action or proceeding may be heard and
determined in such court, (c) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in such court, and (d)
waives, to the fullest extent permitted by Law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in such court. Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law. Each party to
this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.2. Nothing in this Agreement shall affect
the right of any party to this Agreement to serve process in any other manner
permitted by Law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF
THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
9.9(c).
Section 9.10 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance of the terms hereof
in addition to any other remedies at Law or in equity.
Section 9.11 Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company, Parent and Merger Sub have
caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
AMC ENTERTAINMENT INC., MARQUEE HOLDINGS INC.,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇
------------------------ -------------------------
Name: Name:
Title: Title:
MARQUEE INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇
------------------------
Name:
Title:
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER