Exhibit 1-1
March 27, 2003
Panavision Inc.
c/o Xxxxx Xxxxxxx
Chief Financial Officer
0000 Xx Xxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx
Gentlemen:
Mafco Holdings Inc., a Delaware corporation ("Mafco"), PX
Holding Corporation, a Delaware corporation ("PX Holding") and a wholly owned
subsidiary of Mafco, and Panavision Inc., a Delaware corporation
("Panavision"), hereby agree that (i) Panavision will issue to Mafco, or a
wholly owned subsidiary of Mafco, and Mafco, or a wholly owned subsidiary of
Mafco, will acquire, 102,220 shares of Series C Cumulative Pay-In-Kind
Preferred Stock, par value $.01 per share, of Panavision (the "Series C
Preferred Stock"), in exchange for (x) $90,860,000 principal amount of 9 5/8%
Senior Subordinated Discount Notes Due 2006 of Panavision (the "Notes"), on
which there is approximately $1,360,376 of accrued and unpaid interest, and (y)
$10,000,000 in cash (the "Cash Consideration"), and (ii) Panavision will issue
to PX Holding, and PX Holding will acquire, 57,424 shares of Series C Preferred
Stock in exchange for 53,571 shares of Series B Cumulative Pay-In-Kind
Preferred Stock, par value $.01 per share, of Panavision (the "Series B
Preferred Stock"), on which there is approximately $3,853,206 of accrued and
unpaid dividends. The Series C Preferred Stock will have the powers,
preferences and rights set forth in the Certificate of Designations, Powers,
Preferences and Rights (the "Certificate of Designations") attached hereto as
Exhibit A, and as described in the Term Sheet attached hereto as Exhibit B, and
shall be Registrable Securities for the purposes of the Registration Rights
Agreement, dated as of December 3, 2002, between Panavision and PX Holding.
In connection with the transactions contemplated by this letter
agreement (this "Letter Agreement"), Mafco and PX Holding (together, the
"Companies") represent and warrant that:
1. Each of the Companies 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 Companies 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 each of the
Companies, 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 either of the Companies is a party or by which
either of the Companies or any of their property is bound or to
which it is subject;
3. Each of the Companies 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 the Companies of this Letter Agreement has been duly
authorized;
4. This Letter Agreement has been duly and validly executed and
delivered by each of the Companies and constitutes the legal, valid
and binding obligation of the Companies, enforceable against each
of the Companies 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 and the Series B Preferred Stock will
effectively vest in Panavision good, valid and marketable title to
each of the Notes and the Series B Preferred Stock, 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" 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 (including,
but not limited to the issuance and sale of the Series C Preferred
Stock) 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 shares of Series C 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 C Preferred Stock 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
Certificate of Designations, 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 delivery of the Notes, the Cash Consideration and the Series B
Preferred Stock, in exchange for 159,644 shares of Series C Preferred Stock,
Mafco, PX Holding 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.
Very truly yours,
MAFCO HOLDINGS INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
PX HOLDING CORPORATION
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/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT A
(See Exhibit 1-2)
EXHIBIT B
Series C Cumulative Pay-In-Kind Preferred Stock
Issuer.................................. Panavision Inc. (the "Company").
Security................................ Shares of newly-issued Series C
Cumulative Pay-In-Kind Preferred
Stock (the "Preferred Stock").
Liquidation Preference.................. Per share liquidation preference of $1,000 plus
declared and unpaid dividends.
Mandatory Redemption.................... None.
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, Series A
Preferred Stock and Series B Preferred Stock of the
Company.
Voting Rights........................... Non-voting.
Merger, 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 (i) first
complied with Section 4.08 of the Panavision Indenture,
including the purchase of any Panavision Notes tendered
pursuant thereto and (ii) any applicable provisions of
the Credit Agreement among the Company, XX Xxxxxx Xxxxx
Bank as Administrative Agent, and the lenders party
thereto, dated as of May 28, 1998.
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 C
CROSS RECEIPT
Panavision hereby acknowledges delivery of (i) $90,860,000 principal
amount of 9 5/8% Senior Subordinated Discount Notes Due 2006 of Panavision, on
which there is approximately $1,360,376 of accrued and unpaid interest, (ii)
$10,000,000 in cash and (iii) 53,571 shares of Series B Cumulative Pay-In-Kind
Preferred Stock, par value $.01 per share, of Panavision, on which there is
approximately $3,853,206 of accrued and unpaid dividends, in satisfaction of
Mafco's and PX Holdings' obligations under this Letter Agreement.
PANAVISION INC.
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Mafco and PX Holding hereby acknowledge delivery of 102,220 and 57,424
shares, respectively, of Series C Cumulative Pay-In-Kind Preferred Stock, par
value $.01 per share, of Panavision, in satisfaction of Panavision's
obligations under this Letter Agreement.
MAFCO HOLDINGS INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
PX HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
