EXHIBIT 10.1
June 23, 2004
Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Carmike Cinemas, Inc., a Delaware corporation (the "Company") has
previously issued $150 million 7.500% Senior Subordinated Notes due 2014, which
were not registered under the Securities Act of 1933 (the "Securities"), which
are unconditionally guaranteed by Eastwynn Theatres, Inc., an Alabama
corporation, Wooden Nickel Pub, Inc., a Delaware corporation and Military
Services, Inc., a Delaware corporation (the "Guarantors"). As an inducement to
the Purchasers including Xxxxxxx Xxxxx & Co. ("Xxxxxxx Xxxxx") to enter into
that certain Purchase Agreement, dated as of January 29, 2004 (the "Purchase
Agreement"), the Company and the Guarantors entered into that certain Exchange
and Registration Rights Agreement, dated January 29, 2004 (the "Registration
Rights Agreement").
Xxxxxxx Xxxxx, an affiliate of the Company as defined in relevant
provisions of the Securities Act of 1933 (the "Act"), has notified the Company
that it desires to make a market in the Exchange Securities (as defined below).
Due to its affiliate status, Xxxxxxx Xxxxx may be required to deliver a
separate prospectus to investors in the Exchange Securities (the "Market-Making
Prospectus") during the Market-Making Period (as defined in Section 8 of this
letter agreement).
On May 5, 2004, the Company and the Guarantors filed pursuant to
Section 2(a) of the Registration Rights Agreement a Registration Statement on
Form S-4 (Registration No. 333-115134) the "Market Making Registration
Statement" relating to an offer to exchange any and all outstanding Securities
for $150 million 7.500% Senior Subordinated Notes due 2014, which were are
registered under the Securities Act of 1933 (the "Exchange Securities"). As a
courtesy to Xxxxxxx Xxxxx, the Company and the Guarantors have included in the
Market Making Registration Statement an alternative Market-Making Prospectus
relating to the Exchange Securities.
This letter agreement between the Company and Xxxxxxx Xxxxx defines
the rights and obligations of the parties relating to the Market-Making
Prospectus and the Market-Making Period. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Registration Rights Agreement.
1. Registration Under the Securities Act.
In consideration of Xxxxxxx Xxxxx making a market in the Company's
Exchange Securities, and subject to Section 8, during the Market-Making Period,
if, in the reasonable judgment of Xxxxxxx Xxxxx, it or any of its affiliates
(as defined in the rules and regulations under the Securities Act) are required
to deliver, a Market-Making Prospectus in connection with sales of the Exchange
Securities, the Company will (i) provide Xxxxxxx Xxxxx and its affiliates,
without charge, as many copies of the Market-Making Prospectus and any
amendments or supplements thereto as they may reasonably request, (ii)
periodically amend the Market-Making
Prospectus and the Market Making Registration Statement so that the information
contained therein complies with the requirements of section 10(a) of the
Securities Act and (iii) amend the Market Making Registration Statement or the
Market-Making Prospectus as and when required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Market Making Registration Statement or by the Act or the rule and regulations
applicable thereunder, and when necessary to reflect any material changes in
the information provided therein in order that the Market Making Registration
Statement or the Market-Making Prospectus does not contain an untrue statement
of material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, and promptly file such amendment or
supplement with the Commission, provided the Company agrees to furnish to
Xxxxxxx Xxxxx copies of any such amendment or supplement prior to its being
used or promptly following its filing with the Commission. The Company and the
Guarantors on the one hand, and Xxxxxxx Xxxxx, on the other hand, hereby agree
to indemnify each other, and, if applicable, contribute to the other, in
accordance with Section 3 of this letter agreement. The Company and each of the
Guarantors consent to the use by Xxxxxxx Xxxxx and its affiliates, subject to
the provisions of this Agreement, the Registration Rights Agreement and
applicable provisions of the Securities Act and state securities or Blue Sky
laws of the jurisdictions in which the Exchange Securities are offered by
Xxxxxxx Xxxxx, of each Market-Making Prospectus.
2. Notwithstanding the foregoing, the Company may suspend the offering and
sale under the Market Making Registration Statement for a period or periods the
Board of Directors of the Company reasonably determines to be necessary, but in
any event not to exceed 120 days in each year during which the Market Making
Registration Statement is required to be effective and usable hereunder
(measured from the Effective Time of the Market Making Shelf Registration
Statement to successive anniversaries thereof) if (A)(i) the Board of Directors
of the company determines in good faith that such action is in the best
interests of the Company or (ii) the Market Making Shelf Registration
Statement, prospectus or amendment or supplement thereto contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (B) the Company notifies Xxxxxxx Xxxxx
within five days after such Board of Directors makes the relevant determination
set forth in clause (A).
3. Indemnification.
(a) Indemnification by the Company and the Guarantors. The Company and the
Guarantors, jointly and severally, will indemnify and hold harmless Xxxxxxx
Xxxxx and its affiliates against any losses, claims, damages or liabilities,
joint or several, to which Xxxxxxx Xxxxx or its affiliates may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
any Market-Making Registration Statement, as the case may be, under which such
Exchange Securities were registered under the Securities Act, or any
preliminary, final or summary Market-Making Prospectus contained therein or
furnished by the Company to Xxxxxxx Xxxxx or its affiliates, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
Xxxxxxx Xxxxx or its affiliates for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that neither the
Company nor any of the Guarantors shall be liable to any such person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is
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based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Market-Making Registration Statement, or
preliminary, final or summary Market-Making Prospectus, or amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by such person expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters. Xxxxxxx
Xxxxx and its affiliates shall (i) indemnify and hold harmless the Company, the
Guarantors, and all other holders of Exchange Securities, against any losses,
claims, damages or liabilities to which the Company, the Guarantors or such
other holders of Exchange Securities may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such Market-Making
Registration Statement, or any preliminary, final or summary Market-Making
Prospectus contained therein or furnished by the Company to Xxxxxxx Xxxxx or
its affiliates, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by Xxxxxxx Xxxxx or its affiliates expressly for use therein,
and (ii) reimburse the Company and the Guarantors for any legal or other
expenses reasonably incurred by the Company and the Guarantors in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that Xxxxxxx Xxxxx shall not be required to
undertake liability to any person under this Section 3(b) for any amounts in
excess of the dollar amount of the proceeds to be received by Xxxxxxx Xxxxx
from the sale of Xxxxxxx Xxxxx' Exchange Securities pursuant to such
registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions
of or contemplated by this Section 3, notify such indemnifying party in writing
of the commencement of such action; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under the indemnification provisions of or
contemplated by Section 3(a) or 3(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
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(d) Contribution. If for any reason the indemnification provisions
contemplated by Section 3(a) or Section 3(b) are unavailable to or insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and the indemnified party in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
or liabilities (or actions in respect thereof) referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 3(d), Xxxxxxx
Xxxxx shall not be required to contribute any amount in excess of the amount by
which the dollar amount of the proceeds received by Xxxxxxx Xxxxx from the sale
of any Exchange Securities (after deducting any fees, discounts and commissions
applicable thereto) exceeds the amount of any damages which Xxxxxxx Xxxxx has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company and the Guarantors under this Section 3
shall be in addition to any liability which the Company or the Guarantors may
otherwise have and shall extend, upon the same terms and conditions, to Xxxxxxx
Xxxxx and its affiliates and each person, if any, who controls Xxxxxxx Xxxxx
and its affiliates within the meaning of the Securities Act; and the
obligations of Xxxxxxx Xxxxx or its affiliates contemplated by this Section 3
shall be in addition to any liability which Xxxxxxx Xxxxx may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company or any of the Guarantors (including any person who,
with his or her consent, is named in any registration statement as about to
become a director of the Company or any of the Guarantors) and to each person,
if any, who controls the Company within the meaning of the Securities Act.
4. Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
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5. Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to it
at 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx, 00000, Attention: Chief Financial
Officer, facsimile number: (000) 000-0000 (with a copy to: King & Spalding LLP,
000 Xxxxxxxxx Xx., Xxxxxxx, Xxxxxxx 00000, Attention: Xxxx X. Xxxxxx, Esq.,
facsimile number: (000) 000-0000), and if to a Xxxxxxx Xxxxx, to it at 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department (with a
copy to Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, facsimile number (000) 000-0000, attention: Xxxx X. Xxxxx, Esq.), except
that notices of change of address shall be effective only upon receipt.
6. Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this letter agreement or made
pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
Xxxxxxx Xxxxx, any director, officer or partner of Xxxxxxx Xxxxx, any agent or
underwriter or any director, officer or partner thereof, or any controlling
person of any of the foregoing, and shall survive the transfer and registration
of Registrable Securities (as defined in the Registration Rights Agreement) by
Xxxxxxx Xxxxx and the consummation of an Exchange Offer (as defined in the
Registration Rights Agreement).
7. Interpretation/Entire Agreement. Nothing in this letter agreement shall
be construed to obligate the Company to file a Shelf Registration Statement as
defined in Section 2(b) of the Registration Rights Agreement. Xxxxxxx Xxxxx
acknowledges that the Market-Making Registration Statement is not a Shelf
Registration Statement as so defined. This letter agreement and the other
writings referred to herein (including the Registration Rights Agreement) or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This letter
agreement supersedes all prior agreements and understandings between the
parties with respect to its subject matter.
8. Termination. Xxxxxxx Xxxxx agrees that the Company's obligations under
this letter agreement shall cease at the earlier of such time when Xxxxxxx
Xxxxx' status as an affiliate of the Company ceases or at the end of the
Market-Making Period.
"Market-Making Period" shall mean the period during which any of the
Securities or Exchange Securities are outstanding and for so long as Xxxxxxx
Xxxxx may be required to deliver a prospectus in connection with transactions
in the Securities or the Exchange Securities, as the case may be.
9. Governing Law. This letter agreement shall be governed by and construed
in accordance with the laws of the State of New York.
10. Headings. The descriptive headings of the several Sections and
paragraphs of this letter agreement are inserted for convenience only, do not
constitute a part of this letter agreement and shall not affect in any way the
meaning or interpretation of this letter agreement.
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If the foregoing is in accordance with your understanding,
please sign and return to us nine (9) counterparts hereof, and upon the
acceptance hereof by you, this letter agreement and such acceptance hereof
shall constitute a binding agreement among each of Xxxxxxx Xxxxx, the
Guarantors and the Company.
Very truly yours,
Carmike Cinemas, Inc.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President - Finance,
Treasurer and Chief Financial Officer
Eastwynn Theatres, Inc.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President - Finance,
Treasurer and Chief Financial
Officer
Wooden Nickel Pub, Inc.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President - Finance,
Treasurer and Chief Financial
Officer
Military Services, Inc.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President - Finance,
Treasurer and Chief Financial
Officer
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
By: /s/ Xxxxxxx, Xxxxx & Co.
------------------------
(Xxxxxxx, Xxxxx & Co.)
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