EXHIBIT 10.2
LTM Holdings, Inc.
000 Xxxxx Xxxxxx. 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
September 30, 1997
Xxxxxxx Xxxxxx Xxxxxxxx Family Trust
c/o Claridge Inc.
0000 Xxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxxxxxxx
Dear Xx. Xxxxxxxxxxx:
Reference is made hereby to that certain Master Agreement dated as the
date hereof (the "Master Agreement") by and among LTM Holdings, Inc. ("LTM"),
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Cineplex Odeon Corporation ("Cineplex Odeon") and Sony Pictures Entertainment
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Inc. ("SPE") pursuant to which LTM and Cineplex Odeon have agreed to engage in a
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business combination (the "Transactions"). You (the "Trust") are a major
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shareholder of Cineplex Odeon, holding beneficially 35,918,429 Cineplex Odeon
Common Shares, with sole power to direct the voting and disposition thereof.
You understand and agree that your agreements in this letter (the "Letter
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Agreement") are additional inducements to SPE's and LTM's agreements to
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consummate the Transactions and to enter into the related governance provisions
for the combined enterprise. (Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to them in the Master Agreement.)
1. The Trust shall vote all of its Cineplex Odeon capital stock and
shall take all other necessary or desirable actions within its control
(including, without limitation, attending all meetings in person or by proxy for
purposes of obtaining a quorum, executing all written consents in lieu of
meetings and voting to remove members of the Cineplex Odeon Board of Directors,
as applicable) to approve the Documents and the Transactions and shall vote
against any transaction that could reasonably be expected to interfere with or
adversely affect the Transactions. The Trust hereby irrevocably appoints LTM,
its officers, agents and nominees, with full power of substitution, as proxy for
the Trust to act and vote the Trust's shares of Cineplex Odeon capital stock for
and in the name, place and
stead of the Trust at any annual, special or other meeting of the shareholders
of Cineplex Odeon and at any adjournment thereof or pursuant to any consent in
lieu of a meeting, or otherwise, (i) in favor of the Transactions and any
transactions appropriate to implement the Transactions, (ii) against (A) any
action or agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other obligation of Cineplex Odeon
under the Master Agreement and (B) any action or agreement that would impede,
interfere with or attempt to discourage the Transactions, including, but not
limited to, any extraordinary corporate transaction (other than the
Transactions) that would conflict with or result in a breach of any of the
representations and warranties or covenants of Cineplex Odeon under the
Documents to which it is a party, such as:
(1) a merger, consolidation, business combination,
reorganization, recapitalization or liquidation
involving Cineplex Odeon or any of its Significant
Subsidiaries,
(2) a sale or transfer of a material amount of assets of
Cineplex Odeon or any of its Significant Subsidiaries,
(3) any material change in the present capitalization or
dividend policy of Cineplex Odeon, or
(4) any other material change in Cineplex Odeon's corporate
structure or business;
unless in any such case such transaction is permitted by Article V of the Master
Agreement. LTM may exercise the irrevocable proxy granted to it hereunder at any
time the Trust fails to comply with any provision of this paragraph. The proxies
and powers granted by the Trust pursuant to this paragraph are coupled with an
interest and are given to secure its performance under the Documents. Such
proxies and powers, to the extent permitted by law, shall survive any of the
bankruptcy, insolvency, dissolution or liquidation of the Trust and will be
effective until this Letter Agreement is terminated in accordance with its
terms.
2. The Trust agrees that, during the term of this Letter Agreement,
it shall not, except pursuant to the Plan of Arrangement, sell, offer to sell,
solicit an offer to buy, contract to sell, grant an option to purchase or
otherwise transfer or dispose of any shares of Cineplex Odeon capital stock held
beneficially by it, other than to Permitted Transferees (as such term if defined
in the Stockholders Agreement) of the Claridge Group.
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3. The Trust shall use its best efforts to file as soon as
practicable any required notifications under the HSR Act in connection with the
Transactions, and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission, the Antitrust Division of the
Department of Justice and/or the DIR for additional information or
documentation and to respond as promptly as practicable to all inquiries and
request received from any state Attorney General or other governmental authority
in connection with antitrust or competition matters.
4. The Trust shall use its reasonable best efforts, prior to the
effective date of the Form S-4 and mailing of the Proxy Statement, to identify
in writing to LTM, SPE, Universal and Cineplex Odeon the person who will serve
as the Claridge Director (as defined in the Stockholders Agreement) upon
election thereof effective as of the Closing pursuant to the Stockholders
Agreement and in cooperation with Universal and SPE designate persons to serve
as Independent Directors (as defined in the Stockholders Agreement) effective as
of the Closing as provided in the Stockholders Agreement.
5. The Trust hereby acknowledges that the provisions of Letter
Agreement are an integral part of the Transactions and that without them, LTM
and SPE would not enter into the Master Agreement or any of the other Documents.
6. The Trust represents and warrants to LTM and SPE as of the date
hereof and as of the Closing Date as follows:
(a) (i) the Trust is a trust duly created, validly existing and in
good standing, under the laws of the province of Quebec, (ii) the Trust has all
requisite power and authority to own, operate and lease its properties and carry
on its business as now conducted, and (iii) the Trust is not, nor are any of its
Subsidiaries, in violation of any order of any court, governmental authority or
arbitration board or tribunal, or any law, ordinance, governmental rule or
regulation to which any of them, or any of their respective properties or
assets, are subject that would prevent the Trust from performing its
obligations under the Documents to which it is a party;
(b) (i) the Trust has the requisite power and authority to execute
and deliver the Documents to which it is a party and all agreements and
documents contemplated thereby, and the consummation by it of the transactions
contemplated thereby has been duly authorized by the trustees of the Trust, and
(ii) the Documents to which the Trust is a party constitute, and all agreements
and documents contemplated thereby to which the Trust is a party (when executed
and
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delivered for value received) will constitute, the valid and legally binding
obligations of the Trust, enforceable against the Trust in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity;
(c) neither the execution and delivery by the Trust of the Documents
to which it is a party nor the consummation by it of the transactions
contemplated thereby in accordance with the terms hereof, will; (i) conflict
with or result in a breach of any provisions of the Trust's deed of donation;
(ii) violate or conflict with any agreement to which the Trust is a party or by
which it is bound, except to the extent any of the effects described in this
clause (ii) would not (x) impair the ability of the Trust to perform its
obligations under this Agreement in any material respect or (y) delay in any
material respect or prevent the consummation of the Transactions; or (iii)
other than the Regulatory Filings required of the Trust, require any material
consent, approval or authorization of, or declaration, filing or registration
with, any Canadian governmental or regulatory authority, the failure to obtain
or make that would have a Material Adverse Effect on the Trust;
(d) (i) the Trust has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of LTM
or Cineplex Odeon to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, and (ii)
the Trust is not aware of any claim against Cineplex Odeon for payment of any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to the Master Agreement or any other
Document or the consummation of the Transactions except that the Special
Committee has retained Xxxxxx Xxxxxxx as its financial advisor; and
(e) the Trust holds beneficially 35,918,429 Cineplex Odeon Common
Shares, with sole power to direct the voting and disposition thereof, free and
clear of any Encumbrances or other restrictions on transfer except those
imposed under securities laws of general application.
7. (a) This Letter Agreement may be terminated at any time before
the Closing Date:
(i) by mutual written consent of the Trust and LTM; or
(ii) by either the Trust or LTM if the Closing shall not have occurred
on or before June 30, 1998 (the "Termination Date"); provided, however,
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SCHEDULE A
1. Indemnification agreements to be entered into between Cineplex Odeon and
its current directors;
2. Series of agreements between Cineplex Odeon and the CRB Foundation relating
to the screening of the heritage Minutes including, without limitation, the
agreements dated May 14, 1992, December 23, 1994, July 18, 1997, August 14,
1997 and September 25, 1997.
3. The Yonge-Eglinton Cinema limited partnership agreement dated July 31, 1985
and all amendments and ancillary agreements thereto (the "Limited
Partnership Agreement"). For greater certainty, the release set forth in
the Letter Agreement does not include any year end adjustments relating to
the level of Annual Gross Box Office Receipts (as such term is defined in
the Limited Partnership Agreement), attributable in part to the period
prior to the Closing Date; and
4. The Sublease Agreement dated June 1985 between Cineplex Odeon, as
Sublessor, and the Yonge-Eglinton limited partnership, as Sublessee, as
amended through the date hereof, together with year end adjustments.
5. Limited Partnership Agreement made as of July 31, 1985 between 619918
Ontario Inc. and 000000 Xxxxxx Inc. (the "Partnership").
6. Lease made as of June 1, 1985 between Cineplex Odeon Corporation and the
Yonge-Eglinton Cinema Partnership.
7. Guarantee of Cineplex Odeon Corporation dated December 11, 1985 (with
respect to the obligations of the general partner of the Partnership and
the Partnership).
8. Agency Agreement made as of July 31, 1985 between the Yonge-Eglinton Cinema
Partnership and Cineplex Odeon Corporation.
9. Net Lease made as of June 1, 1985 between Yonge-Eglinton Building Limited,
Transtortium Realty Limited and Transplex Building Corporation Limited, and
Cineplex Odeon Corporation.
