Exhibit 10.3
Mafco Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
June 27, 2002
M & F Worldwide Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Pursuant to a letter agreement dated June 27, 2002 between
Mafco Holdings Inc., a Delaware corporation ("Mafco") and Panavision Inc., a
Delaware corporation ("Panavision"), Mafco or a wholly-owned subsidiary is
acquiring 39,199 shares of Series B Cumulative Pay-In-Kind Preferred Stock, par
value $.01 per share, of Panavision (the "Preferred Stock") in exchange for
$37,726,000 principal amount of 9 5/8% Senior Subordinated Discount Notes Due
2006 of the Corporation (the "Notes"), on which there is approximately $1.8
million of accrued and unpaid interest, and 10,000 shares of Preferred Stock in
exchange for $10,000,000 in cash. The Preferred Stock being acquired in exchange
for the Notes, and any additional Preferred Stock issued as dividends thereon,
is referred to herein as the "Note Contribution Shares." The Preferred Stock
being acquired in exchange for $10,000,000 in cash, and any additional Preferred
Stock issued as dividends thereon, is referred to herein as the "Cash
Contribution Shares."
Pursuant to an Instrument of Assignment and Assumption, dated
June 28, 2002, Mafco will assume all of the obligations of Panavision under the
Option Agreement, dated as of April 1, 2002 (the "Option Agreement"), among
Panavision and certain holders of the notes (the "Noteholders"), including
Panavision's obligation to pay the $5.5 million fee (the "Option Fee") due under
the Option Agreement. In connection therewith, on June 28, 2002, Mafco will
exercise the option to purchase, and the Noteholders will sell, $78,355,000
principal amount of the Notes for $50,930,750 plus accrued interest through the
date of such purchase of such Notes.
M & F Worldwide Corp., a Delaware corporation ("M & F
Worldwide") and the beneficial owner of 83.5% of the outstanding Panavision
common stock, has advised Mafco that it has determined not to pursue directly
with Panavision the transactions referred to above.
Mafco and M & F Worldwide hereby agree that M & F Worldwide
shall have an option, exercisable in whole but not in part to purchase the Note
Contribution Shares and the Cash Contribution Shares (the "Equity Option"), at a
price equal to (i) in respect of the Note Contribution Shares, Mafco's cost in
acquiring $37,726,000 principal
amount of the Notes plus a 10% cost of carry to the date of purchase of the Note
Contribution Shares by M & F Worldwide; and (ii) in respect of the Cash
Contribution Shares, at the then liquidation preference of the Cash Contribution
Shares. The Equity Option is expressly subject to the terms of the Certificate
of Designations for the Preferred Stock, including Panavision's right of
optional redemption thereunder.
Mafco and M & F Worldwide further agree that M & F Worldwide
shall have the right to purchase the $78,355,000 principal amount of the Notes
acquired by Mafco pursuant to the Option Agreement at Mafco's cost (which shall
include the Option Fee) plus a 10% cost of carry to the date of purchase of such
Notes (the "Notes Option", and together with the Equity Option, the "M & F
Worldwide Call Rights").
M & F Worldwide shall have the right to exercise the M & F
Worldwide Call Rights during the period commencing upon final adjudication of
the M & F Worldwide consolidated shareholder litigation and ending on the date
that is twelve months after such final adjudication, provided that M & F
Worldwide beneficially owns a 66 2/3% of the voting securities of Panavision
currently owned by it.
In connection with the transactions contemplated by this
letter agreement (the "Letter Agreement"), Mafco represents and warrants that:
1. Mafco is a corporation duly organized, validly existing and in good
standing under the laws of Delaware;
2. None of the execution and delivery of this Letter Agreement, the
consummation of the transactions herein contemplated or compliance
with the terms and conditions hereof by Mafco will conflict with or
result in a breach of, or require any authorization, approval or
consent which has not been obtained under, or constitute a default
under, the charter or by-laws of Mafco, or any applicable provision or
term of any law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
material agreement or instrument to which Mafco is a party or by which
Mafco or any of its property is bound or to which it is subject;
3. Mafco has all necessary corporate power, authority and legal right to
execute, deliver and perform its obligations as described in this
Letter Agreement and the execution, delivery and performance by Mafco
of this Letter Agreement has been duly authorized;
4. This Letter Agreement has been duly and validly executed and delivered
by Mafco and constitutes the legal, valid and binding obligation of
Mafco, enforceable against Mafco in accordance with its terms, except
as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer
or similar laws of general applicability affecting the enforcement of
creditors' rights and (ii) the application of general principles of
equity
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(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and
In connection with the transactions contemplated by this
Letter Agreement, M & F Worldwide represents and warrants that:
1. M & F Worldwide is a corporation duly organized, validly existing and
in good standing under the laws of Delaware;
2. None of the execution and delivery of this Letter Agreement, the
consummation of the transactions herein contemplated or compliance
with the terms and conditions hereof by M & F Worldwide will conflict
with or result in a breach of, or require any authorization, approval
or consent which has not been obtained under, or constitute a default
under, the charter or by-laws of M & F Worldwide, or any applicable
provision or term of any law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or agency,
or any material agreement or instrument to which M & F Worldwide is a
party or by which M & F Worldwide or any of its property is bound or
to which it is subject;
3. M & F Worldwide has all necessary corporate power, authority and legal
right to execute, deliver and perform its obligations as described in
this Letter Agreement and the execution, delivery and performance by M
& F Worldwide of this Letter Agreement has been duly authorized; and
4. This Letter Agreement has been duly and validly executed and delivered
by M & F Worldwide and constitutes the legal, valid and binding
obligation of M & F Worldwide, enforceable against M & F Worldwide in
accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or similar laws of general
applicability affecting the enforcement of creditors' rights and (ii)
the application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
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If you are in agreement with the foregoing, please so
indicate by signing the enclosed duplicate copy of this Letter Agreement.
Very truly yours,
MAFCO HOLDINGS INC.
By: _________________________________
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
ACCEPTED AND AGREED TO:
M & F WORLDWIDE CORP.
By: ___________________________
Name: Xxxxxx Xxxxxx
Title: Chairman of the Board of
Directors, President and Chief
Executive Officer
