Exhibit 4.20
Mafco Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
January 16, 2004
Panavision Inc.
c/o Xxxxx X. Xxxxxxx
Chief Financial Officer
0000 Xx Xxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Gentlemen:
Mafco Holdings Inc., a Delaware corporation ("Mafco"), MacAndrews &
Forbes Holdings Inc., a Delaware corporation ("Holdings") and a wholly owned
subsidiary of Mafco, PX Holding Corporation, a Delaware corporation ("PX
Holding" and, together with Mafco and Holdings, the "Mafco Entities") and a
wholly owned subsidiary of Holdings, and Panavision Inc., a Delaware corporation
("Panavision"), hereby agree that (i) Panavision will issue to PX Holding, and
PX Holding will acquire, 215,274 shares of Series D Cumulative Pay-In-Kind
Preferred Stock, par value $.01 per share, of Panavision (the "Series D
Preferred Stock"), in exchange for (a) 159,644 shares of Series C Cumulative
Pay-In-Kind Preferred Stock, par value $.01 per share, of Panavision (the
"Series C Preferred Stock"), on which there is approximately $13,231,082.18 of
accrued and unpaid dividends, (b) $23,000,000 in cash (the "Cash
Consideration"), (c) the retirement of all amounts due and owing by, and release
of all liabilities of, Panavision to Holdings (such amount, as of the date
hereof, being $10,180,930.07 (which amount includes principal and accrued and
unpaid interest)) under, and the termination of, the Amended and Restated Line
of Credit Agreement, dated as of August 13, 2003, between Holdings and
Panavision, (d) 33.3 shares of common stock, no par value (the "PANY Shares"),
of PANY Rental Inc., a New York corporation ("PANY Rental"), having a fair
market value of $700,000, (e) the retirement of all amounts due and owing by,
and release of all liabilities of, PANY Rental to PX Holding (such amount, as of
the date hereof, being $713,692.87 (which amount includes principal and accrued
and unpaid interest)) under, and the termination of, the promissory note
originally in the principal amount of $900,000 and currently in the principal
amount of $630,779.80, dated as of May 31, 1994 (the "PANY Note"), issued by
PANY Rental to Silo Capital Corp. and subsequently acquired by PX Holding, on
which there is approximately $82,913.07 of accrued and unpaid interest, and (f)
the retirement of all amounts due and owing by, and release of all liabilities
of, Panavision to Mafco (such amount, as of the date hereof, being $7,804,479.02
(which amount includes principal and
accrued and unpaid interest)) under, and the termination of, the promissory note
in the principal amount of $6,700,000, dated as of July 1, 2002 (the "Las Palmas
Note" and, together with the PANY Note, the "Notes"), issued by Panavision to M
& F Worldwide Corp. and subsequently acquired by Mafco, on which there is
approximately $1,104,479.02 of accrued and unpaid interest, and (ii) Panavision
will issue to PX Holding, and PX Holding will acquire, 1,381,690 shares of
Series E Non-Cumulative Perpetual Participating Preferred Stock, par value $.01
per share (the "Series E Preferred Stock" and, together with the "Series D
Preferred Stock," the "New Preferred Shares"), of Panavision, in exchange for
1,381,690 shares of Series A Non-Cumulative Perpetual Participating Preferred
Stock, par value $.01 per share (the "Series A Preferred Stock" and, together
with the Series C Preferred Stock and the PANY Shares, the "Consideration
Shares"), of Panavision.
The Series D Preferred Stock will have the powers, preferences and
rights set forth in the Certificate of Designations, Powers, Preferences and
Rights (the "Series D Certificate of Designations") attached hereto as Exhibit A
and the Series E Preferred Stock will have the powers, preferences and rights
set forth in the Certificate of Designations, Powers, Preferences and Rights
(the "Series E Certificate of Designations") attached hereto as Exhibit B. The
New Preferred Shares shall be Registrable Securities for the purposes of the
Registration Rights Agreement, dated as of December 3, 2002, between Panavision
and PX Holding.
The parties hereto agree that the transactions contemplated by this
letter agreement (this "Letter Agreement") are conditioned upon the closing of
the transactions contemplated by the Purchase Agreement, dated as of January 16,
2004, by and among Panavision, the guarantors named therein, Canyon Capital
Advisors LLC and the other purchasers named therein.
In connection with the transactions contemplated by this Letter
Agreement (this "Letter Agreement"), the Mafco Entities represent and warrant
that:
1. Each of the Mafco Entities 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 the Mafco Entities 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 any of the Mafco Entities, 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
any of the Mafco Entities is a party or by which any of the Mafco
Entities or any of its property is bound or to which it is subject;
3. Each of the Mafco Entities 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 each of the Mafco Entities of this Letter
Agreement has been duly authorized;
4. This Letter Agreement has been duly and validly executed and delivered
by each of the Mafco Entities and constitutes the legal, valid and
binding obligation of each of the Mafco Entities, enforceable against
each of the Mafco Entities 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 Consideration Shares will effectively vest in
Panavision good, valid and marketable title to the Consideration
Shares, free and clear of all Encumbrances whatsoever, except for
restrictions on transfer imposed by the Securities Act of 1933, as
amended (the "Securities Act"), or state securities laws. As used in
this Letter Agreement, the term "Encumbrances" means 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 (including, but
not limited to the issuance and sale of the New Preferred Shares) 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;
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 New Preferred Shares being issued pursuant to this Letter
Agreement have been duly authorized by all necessary corporate action
on the part of Panavision, and the New Preferred Shares being issued
pursuant to this Letter Agreement will be validly issued, fully paid
and nonassessable, will have the powers, preferences and rights set
forth in the Series D Certificate of Designations and the Series E
Certificate of Designations, as applicable, will be free and clear of
all Encumbrances whatsoever, except for restrictions on transfer
imposed by the Securities Act or state securities laws, and the
issuance of such shares is not subject to preemptive or subscription
rights of any stockholder of Panavision.
Upon (i) the delivery of the Consideration Shares and the Cash
Consideration and (ii) the retirement of all amounts due and owing by, and
release of all liabilities of, Panavision under, and the termination of, the (a)
Credit Agreement and (b) each of the Notes, in exchange for the New Preferred
Shares, each of the Mafco Entities and Panavision shall execute and deliver a
cross receipt in the form attached hereto as Exhibit C.
If you are in agreement with the foregoing, please so indicate by
signing the enclosed duplicate copy of this Letter Agreement.
MAFCO HOLDINGS INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President & General
Counsel
MACANDREWS & FORBES
HOLDINGS INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President & General
Counsel
PX HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President & Chief
Financial Officer
ACCEPTED AND AGREED TO:
PANAVISION INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President &
Chief Financial Officer
EXHIBIT A
See Exhibit
EXHIBIT B
(Attached hereto)
EXHIBIT C
CROSS RECEIPT
Reference is made to that certain Letter Agreement (the "Letter
Agreement"), dated as of January 16, 2004, between Mafco Holdings Inc., a
Delaware corporation ("Mafco"), MacAndrews & Forbes Holdings Inc., a Delaware
corporation ("Holdings") and a wholly owned subsidiary of Mafco, PX Holding
Corporation, a Delaware corporation ("PX Holding" and, together with Mafco and
Holdings, the "Mafco Entities") and a wholly owned subsidiary of Holdings, and
Panavision Inc., a Delaware corporation ("Panavision").
Panavision hereby acknowledges (i) delivery of (a) 159,644 shares of Series
C Cumulative Pay-In-Kind Preferred Stock, par value $.01 per share, of
Panavision, on which there is approximately $13,231,082.18 of accrued and unpaid
dividends, (b) 1,381,690 shares of Series A Non-Cumulative Perpetual
Participating Preferred Stock, par value $.01 per share, of Panavision, (c)
$23,000,000 in cash, (d) 33.3 shares of common stock, no par value, of PANY
Rental Inc., a New York corporation ("PANY Rental"), having a fair market value
of $700,000, (ii) the retirement of all amounts due and owing by, and release of
all liabilities of, Panavision under, and the termination of, (a) the Amended
and Restated Line of Credit Agreement, dated as of August 13, 2003, between
Holdings and Panavision and (b) the promissory note in the principal amount of
$6,700,000, dated as of July 1, 2002, issued by Panavision to M & F Worldwide
Corp. and subsequently acquired by Mafco, on which there is approximately
$1,104,479.02 of accrued and unpaid interest, and (iii) the retirement of all
amounts due and owing by, and release of all liabilities of, PANY Rental under,
and the termination of, the promissory note originally in the principal amount
of $900,000 and currently in the principal amount of $630,779.80, dated as of
May 31, 1994, issued by PANY Rental to Silo Capital Corp. and subsequently
acquired by PX Holding, on which there is approximately $82,913.07 of accrued
and unpaid interest.
PANAVISION INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President & General
Counsel
The Mafco Entities hereby acknowledge delivery of (i) 215,274 shares of
Series D Cumulative Pay-In-Kind Preferred Stock, par value $.01 per share, of
Panavision, and (ii) 1,381,690 shares of Series E Non-Cumulative Perpetual
Participating Preferred Stock, par value $.01 per share, of Panavision, in
satisfaction of Panavision's obligations under the Letter Agreement.
MAFCO HOLDINGS INC.
By:
-----------------------
Name:
Title:
MACANDREWS & FORBES
HOLDINGS INC.
By:
-----------------------
Name:
Title:
PX HOLDING CORPORATION
By:
-----------------------
Name:
Title:
