EXHIBIT 10.29
Mafco Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
June 27, 2002
Panavision Inc.
0000 Xx Xxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx
Gentlemen:
Mafco Holdings, Inc., a Delaware corporation ("Mafco"), and
Panavision Inc., a Delaware corporation ("Panavision"), hereby agree that
Panavision will issue to Mafco, or a wholly owned subsidiary of Mafco, 49,199
shares of Series B Cumulative Pay-in-Kind Preferred Stock, par value $.01 per
share, of Panavision (the "Series B Preferred Stock"), in exchange for
$37,726,000 principal amount of 9 5/8% Senior Subordinated Discount Notes Due
2006 of Panavision (the "Notes"), on which there is approximately $1.8 million
of accrued and unpaid interest, and $10,000,000 in cash. The Series B Preferred
Stock will have the terms set forth in the term sheet attached hereto as
Exhibit A.
In addition, Xxxxx agrees to indemnify and hold harmless Panavision
from and against all losses or liabilities arising from the Instrument of
Assignment and Assumption, between Mafco and Panavision, to be executed on June
28, 2002, including with respect to the obligation to make the Option Payment
(as defined in such Instrument of Assignment and Assumption).
In connection with the transactions contemplated by this letter
agreement (the "Letter Agreement"), Xxxxx 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 (regardless of
whether such enforceability is considered in a proceeding in equity
or at law); and
5. The transfer of the Notes will effectively vest in Panavision good,
valid and marketable title to the Notes, free and clear of all
Encumbrances whatsoever, except for any Encumbrances arising under
the Securities Act of 1933 (the "Securities Act") or state
securities laws. As used in this Letter Agreement, the term
"Encumbrances" shall mean any and all liens, charges, security
interests, options, claims, mortgages, pledges, or agreements,
obligations, understandings or arrangements or other restrictions on
title or transfer of any nature whatsoever.
In connection with the transactions contemplated by this Letter
Agreement, Panavision represents and warrants that:
1. Panavision 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 Panavision 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 Panavision, 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 Panavision
is a party or by which Panavision or any of its property is bound or
to which it is subject;
3. Panavision 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 Panavision of this Letter Agreement has been duly authorized;
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4. This Letter Agreement has been duly and validly executed and
delivered by Panavision and constitutes the legal, valid and binding
obligation of Panavision, enforceable against Panavision 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); and
5. The shares of Series B Preferred Stock being issued pursuant to this
Letter Agreement have been duly authorized by all necessary
corporate action on the part of Panavision, and the shares of Series
B Preferred Stock being issued pursuant to this Letter Agreement
will be validly issued, fully paid and nonassessable, free and clear
of all Encumbrances, except restrictions on transfer imposed by the
Securities Act and state securities laws, and the issuance of such
shares is not subject to preemptive or subscription rights of any
stockholder of Panavision.
Upon delivery of the Notes and $10,000,000 in cash in exchange for
49,199 shares of Series B Preferred Stock, Panavision and Mafco shall execute
and deliver a cross receipt in the form attached hereto as Exhibit B.
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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: /S/ XXXX X. XXXXXXX
-----------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
ACCEPTED AND AGREED TO:
PANAVISION INC.
By: /S/ XXXX X. XXXXXXX
-------------------------
Name: Xxxx X. Xxxxxxx
Title: President and
Chief Executive Officer
EXHIBIT A
---------
SERIES B CUMULATIVE PAY-IN-KIND PREFERRED STOCK
-----------------------------------------------
Issuer....................... Panavision Inc. (the "Company").
Security..................... Shares of newly-issued Series B Cumulative
Pay-in-Kind Preferred Stock (the "Preferred
Stock").
Liquidation Preference....... Per share liquidation preference equal to $49.5
million divided by the number of shares of
Preferred Stock initially issued.
Mandatory Redemption......... None.
Optional Redemption.......... All or any portion of the outstanding Preferred
Stock may be redeemed by the Company at its
option at any time at a price per share equal to
the Liquidation Preference plus accrued and
unpaid dividends.
Dividends.................... Cumulative dividends at a rate of 10% per share
of Preferred Stock per annum (the "stated
dividend"), payable at the option of the Company
in cash, additional shares of Preferred Stock or
a combination thereof, quarterly on each
March 31, June 30, September 30 and December 31,
prior to the payment of any dividends in respect
of such quarter on junior securities.
Conversion Rights............ None.
Ranking...................... The Preferred Stock will rank, with respect to
dividend rights and rights upon liquidation,
winding up or dissolution, senior to the common
stock and Series A Preferred Stock of the
Company.
Voting Rights................ Non-voting.
Xxxxxx, Consolidation and
Sale of Assets............... The Company may not consolidate or merge with,
or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of
its assets (each such transaction is referred to
as a "Fundamental Transaction") to any person
unless (x) in the case of a consolidation or
merger, the Company is the surviving entity and
the Preferred Stock remains outstanding
following such transaction or (y) if the Company
is not the surviving entity, in the case of a
consolidation or merger, or is the transferor of
all or substantially all of its assets, the
transferee of assets or the surviving entity, as
the case may be, assumes the obligation to
exchange the Preferred Stock for securities of
such surviving entity or the Company, as the
case may be, having the same rights, powers and
preferences as the Preferred Stock had
immediately prior to such transaction; provided
that in the event of a Change of Control (as
defined in the Panavision Indenture), then the
holders of the Preferred Stock will receive an
amount in cash equal to the Liquidation
Preference of the Preferred Stock plus accrued
but unpaid dividends. The Company's obligation
to redeem the Preferred Stock pursuant to this
provision only becomes operative after the
Company has first complied with Section 4.08 of
the Panavision Indenture, including the purchase
of any Panavision Notes tendered pursuant
thereto.
Transfer Restrictions........ None.
Registration Rights.......... The holder of the Preferred Stock will have
unlimited demand and piggyback registration
rights with respect to the Preferred Stock, at
the Company's expense, in each case subject to
customary cutbacks and blackout periods.
EXHIBIT B
---------
CROSS RECEIPT
Panavision hereby acknowledges delivery of $37,726,000 principal amount
of 9 5/8% Senior Subordinated Discount Notes Due 2006 of Panavision and
$10,000,000 in cash in satisfaction of Mafco's obligations under the Letter
Agreement.
PANAVISION INC.
By: /S/ XXXX X. XXXXXXX
---------------------------
Name: Xxxx X. Xxxxxxx
Title: President and
Chief Executive Officer
Mafco hereby acknowledges delivery 49,199 shares of Series B Cumulative
Pay-in-Kind Participating Preferred Stock of Panavision in satisfaction of
Panavision's obligations under the Letter Agreement.
MAFCO HOLDINGS INC.
By: /S/ XXXX X. XXXXXXX
---------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
