Exhibit 10.21
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
8 7/8% SENIOR SUBORDINATED
NOTES DUE 2008
----------------
PURCHASE AGREEMENT
July 31, 1998
Xxxxxxx, Xxxxx & Co.,
BT Alex. Xxxxx Incorporated,
Credit Suisse First Boston Corporation,
Salomon Brothers Inc,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Loews Cineplex Entertainment Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Initial Purchasers named in Schedule I hereto (the
"Initial Purchasers") an aggregate of $300,000,000 principal amount of the
Senior Subordinated Notes of the Company specified above (the
"Securities").
1. The Company represents and warrants to, and agrees with, each of
the Initial Purchasers that:
(a) A preliminary offering circular, dated June 17, 1998 (the
"Preliminary Offering Circular") and an offering circular, dated July
31, 1998 (the "Offering Circular"), in each case including the
international supplement thereto, have been prepared in connection
with the offering of the Securities. Any reference to the Preliminary
Offering Circular or the Offering Circular, as the case may be, as
amended or supplemented, as of any specified date shall be deemed to
include any Additional Issuer Information (as defined in Section 5(f))
furnished by the Company prior to the completion of the distribution
of the Securities. The Company's most recent Annual Report on Form
10-K and all subsequent documents filed with the United States
Securities and Exchange Commission (the "Commission") pursuant to
Section 13(a), 13(c) or 15(d) of the United States Securities Exchange
Act of 1934, as amended (the "Exchange Act") on or prior to the date
of the Preliminary Offering Circular or the Offering Circular, as the
case may be; any documents filed with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of
the Preliminary Offering Circular or the Offering Circular, as the
case may be, as amended or supplemented, as of any specified date, and
prior to such specified date; and any Additional Issuer Information
(as defined in Section 5(f)) furnished by the Company prior to the
completion of the distribution of the Securities, are hereinafter
called the "Exchange Act Reports". The Exchange Act Reports, when they
were or are filed with the Commission, conformed or will conform in
all material respects to the applicable requirements of the Exchange
Act and the applicable rules and regulations of the Commission
thereunder. The Preliminary Offering Circular or the Offering Circular
and any amendments or supplements thereto did not and will not, as of
their respective dates, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Initial Purchaser through Xxxxxxx, Sachs & Co.
expressly for use therein;
(b) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in
the Offering Circular any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular; and, since the respective dates
as of which information is given in the Offering Circular, there has
not been any change in the capital stock, stockholders' equity, total
assets or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in
the Offering Circular or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries; and any
real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering
Circular, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(e) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and except as otherwise set
forth in the Offering Circular) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the indenture to be dated as of August 5, 1998 (the
"Indenture") between the Company and Bankers Trust Company, as Trustee
(the "Trustee"), under which they are to be issued, which will be
substantially in the form previously delivered to you; the Indenture
has been duly authorized and, when executed and delivered by the
Company and the Trustee, the Indenture will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Securities
and the Indenture will conform to the descriptions thereof in the
Offering Circular and will be in substantially the form previously
delivered to you;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System;
(h) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities;
(i) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Indenture, and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or, the Indenture, except for the
filing of a registration statement by the Company with the Commission
pursuant to the United States Securities Act of 1933, as amended (the
"Act") pursuant to Section 5(k) hereof, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(j) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(k) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute
a summary of the terms of the Securities, under the caption "Certain
United States Federal Tax Consequences to Non-United States Holders",
and under the caption "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair;
(l) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which are reasonably
likely individually or in the aggregate to have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries (a "Material Adverse
Effect"); and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Act) as securities which are listed on
a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation
system;
(n) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(o) The Company is not, and after giving effect to the offering
and sale of the Securities, will not be an "investment company", as
such term is defined in the United States Investment Company Act of
1940, as amended (the "Investment Company Act");
(p) Neither the Company, nor any person acting on its or their
behalf has offered or sold the Securities by means of any general
solicitation or general advertising within the meaning of Rule 502(c)
under the Act or, with respect to Securities sold outside the United
States to non-U.S. persons (as defined in Rule 902 under the Act), by
means of any directed selling efforts within the meaning of Rule 902
under the Securities Act and the Company, any affiliate of the Company
and any person acting on its or their behalf has complied with and
will implement the "offering restriction" within the meaning of such
Rule 902;
(q) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company has offered or sold to
any person any Securities, or any securities of the same or a similar
class as the Securities, other than Securities offered or sold to the
Initial Purchasers hereunder. The Company will take reasonable
precautions designed to insure that any offer or sale, direct or
indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Act) of any Securities or any substantially similar
security issued by the Company, within six months subsequent to the
date on which the distribution of the Securities has been completed
(as notified to the Company by Xxxxxxx, Xxxxx & Co.), is made under
restrictions and other circumstances reasonably designed not to affect
the status of the offer and sale of the Securities in the United
States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Securities
Act;
(r) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes; and
(s) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, and KPMG,
who have certified certain financial statements of Cineplex Odeon
Corporation, are each independent public accountants with respect to
the Company and Cineplex Odeon Corporation ("Cineplex Odeon"),
respectively, as required by the Act and the rules and regulations of
the Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Initial Purchasers, and each of the
Initial Purchasers agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 96.685% of the principal amount thereof,
plus accrued interest, if any, from July 31, 1998 to the Time of Delivery
hereunder, the principal amount of Securities set forth opposite the name
of such Initial Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Initial Purchasers propose to offer the Securities for sale upon
the terms and conditions set forth in this Agreement and the Offering
Circular and each Initial Purchaser hereby represents and warrants to, and
agrees with the Company that:
(a) It will offer and sell the Securities only to (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within
the meaning of Rule 144A under the Act in transactions meeting the
requirements of Rule 144A or (ii) upon the terms and conditions set forth
in Annex I to this Agreement;
(b) It is an "accredited investor" within the meaning of Rule 501
under the Act; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.
4. (a) The Securities to be purchased by each Initial Purchaser
hereunder will be represented by one or more definitive global Securities
in book-entry form which will be deposited by or on behalf of the Company
with The Depository Trust Company ("DTC") or its designated custodian. The
Company will deliver the Securities to Xxxxxxx, Sachs & Co., for the
account of each Initial Purchaser, against payment by or on behalf of such
Initial Purchaser of the purchase price therefor by certified or official
bank check or checks, payable to the order of the Company in Federal (same
DAY) funds, by causing DTC to credit the Securities to the account of
Xxxxxxx, Xxxxx & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Sachs & Co.
for checking at least twenty-four hours prior to the Time of Delivery (as
defined below) at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on August 5, 1998 or such other time and
date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing.
Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by
the Initial Purchasers pursuant to Section 7(k) hereof, will be delivered
at such time and date at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000 (the "Closing Location"), and the Securities
will be delivered at the Designated Office, all at the Time of Delivery. A
meeting will be held at the Closing Location at 2:00 p.m., New York City
time, on the New York Business Day next preceding the Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to
the preceding sentence will be available for review by the parties hereto.
For the purposes of this Section 4, "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by
law or executive order to close.
5. The Company agrees with each of the Initial Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to
make no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish
you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Initial Purchasers with two (2) copies of the
Offering Circular and each amendment or supplement thereto signed by an
authorized officer of the Company, with the independent accountants'
report(s) in the Offering Circular, and any amendment or supplement
containing amendments to the financial statements covered by such
report(s), signed by the accountants, and additional copies thereof in such
quantities as you may from time to time reasonably request, and if, at any
time prior to the expiration of nine months after the date of the Offering
Circular, any event shall have occurred as a result of which the Offering
Circular as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such
same period to amend or supplement the Offering Circular, to notify you and
upon your request to prepare and furnish without charge to each Initial
Purchaser and to any dealer in securities as many copies as you may from
time to time reasonably request of an amended Offering Circular or a
supplement to the Offering Circular which will correct such statement or
omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Securities
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face- amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of
Securities and prospective Initial Purchasers of securities information
(the "Additional Issuer Information") satisfying the requirements of
subsection (d)(4)(i) of Rule 144A under the Act;
(g) If requested by you, to use its best efforts to cause the
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
securities exchange on which the Securities, or any class of securities of
the Company is listed; and (ii) such additional publicly available
information concerning the business and financial condition of the Company
as you may from time to time reasonably request (such financial statements
to be on a consolidated basis to the extent the accounts of the Company and
its subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(i) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined
in Rule 144 under the Securities Act) to, resell any of the Securities
which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them;
(j) The Company shall file and use its best efforts to cause to be
declared or become effective under the Securities Act, on or prior to 90
days after the Time of Delivery, a registration statement on Form S-4
providing for (i) the registration of another series of debt securities of
the Company, with terms identical to the Securities (the "Exchange
Securities"), and (ii) the exchange of the Securities for the Exchange
Securities, all in a manner which will permit persons who acquire the
Exchange Securities and who are not affiliates of the Company to resell the
Exchange Securities pursuant to Section 4(1) of the Securities Act; and
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Initial
Purchasers that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the issue of the Securities and all other
expenses in connection with the preparation, printing and filing of the
Preliminary Offering Circular and the Offering Circular and any amendments
and supplements thereto and the mailing and delivering of copies thereof to
the Initial Purchasers and dealers; (ii) the cost of printing or producing
any Agreement among Initial Purchasers, this Agreement, the Indenture, the
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities, for offering and
sale under state securities laws as provided in Section 5(b) hereof,
including the reasonable fees and disbursements of counsel for the Initial
Purchasers in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the cost of preparing the
Securities; (vi) the fees and expenses of the Trustee and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities; (vii) any cost incurred
in connection with the designation of the Securities for trading in PORTAL
and (viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Initial Purchasers will pay all
of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Initial Purchasers hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of the
Time of Delivery, true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Initial Purchasers, shall
have furnished to you such opinion or opinions, dated the Time of Delivery,
in form and substance satisfactory to you, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon the matters covered therein;
(b) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in the form attached as Annex II hereto;
(c) Xxxx X. XxXxxxx, Xx., General Counsel of the Company, shall have
furnished to you his written opinion, dated the Time of Delivery, in the
form attached as Annex III hereto;
(d) Xxxxxx, Xxxx & Xxxx, Canadian counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in the
form attached as Annex IV hereto;
(e) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, PricewaterhouseCoopers LLP
shall have furnished to you a letter or letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex V hereto;
(f) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, KPMG shall have furnished
to you a letter or letters, dated the respective dates of delivery thereof,
in form and substance satisfactory to you, to the effect set forth in Annex
VI hereto;
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Circular, and (ii) since the respective dates as of which
information is given in the Offering Circular there shall not have been any
change in the capital stock, stockholders' equity, total assets or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Offering Circular, the effect of which, in any such
case described in Clause (i) or (ii), is in the judgment of the Initial
Purchasers so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the Toronto Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange or the Toronto Stock
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; (iv) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any
such event specified in this Clause (iv) in the judgment of the Initial
Purchasers makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Offering Circular; or (v) the occurrence of any
material adverse change in the existing financial, political or economic
conditions in the United States or elsewhere which, in the judgment of the
Initial Purchasers, would materially and adversely affect the financial
markets or the markets for the Securities and other debt securities;
(j) The Securities have been designated for trading on PORTAL;
(k) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsection (g) of this Section and as to such other matters as you may
reasonably request; and
(l) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery a Certificate of its Senior Vice President -
Finance in form and substance satisfactory to you certifying that the
issuance of the Securities by the Company will not cause the Company to be
in breach of or default under any financial covenant contained in (i) any
of those agreements filed as exhibits to the Company's registration
statement on Form S-1 in respect of the concurrent equity offering (the
"S-1 Agreements"), or (ii) any other agreement to which the Company is a
party, except, in the case of this clause (ii) only, where such breach or
default could not reasonably be expected to have a Material Adverse Effect.
8. (a) The Company will indemnify and hold harmless each Initial
Purchaser against any losses, claims, damages or liabilities, joint or
several, to which such Initial Purchaser may become subject, under the 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
Preliminary Offering Circular or the Offering Circular, 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 necessary to make the
statements therein not misleading, and will reimburse each Initial
Purchaser for any legal or other expenses reasonably incurred by such
Initial Purchaser in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Initial Purchaser through
Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Initial Purchaser will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the
Company may become subject, under the 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 Preliminary Offering Circular
or the Offering Circular, 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 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 any Preliminary Offering Circular or the Offering Circular or any
such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Initial Purchaser
through Xxxxxxx, Sachs & Co. expressly for use therein; and will reimburse
the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; 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 such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the 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 satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party (which consent shall not be
unreasonably withheld), 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, the indemnifying party shall not
be liable to such indemnified party under such subsection 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.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above 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 benefits received by the Company on the
one hand and the Initial Purchasers on the other from the offering of the
Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on
the one hand and the Initial Purchasers on the other 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 benefits received by the Company on
the one hand and the Initial Purchasers on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Initial Purchasers, in each case
as set forth in the Offering Circular. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Initial Purchasers on the other and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subsection (d). 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 in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), no Initial
Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to investors were offered to investors exceeds the amount
of any damages which such Initial Purchaser has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. The Initial Purchasers' obligations in this subsection
(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Initial Purchaser within the meaning of the Act; and the
obligations of the Initial Purchasers under this Section 8 shall be in
addition to any liability which the respective Initial Purchasers may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Initial Purchaser shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may
in your discretion arrange for you or another party or other parties to
purchase such Securities on the terms contained herein. If within
thirty-six hours after such default by any Initial Purchaser you do not
arrange for the purchase of such Securities, then the Company shall be
entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for
the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have
the right to postpone the Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made
necessary in the Offering Circular, or in any other documents or
arrangements, and the Company agrees to prepare promptly any amendments to
the Offering Circular which in your opinion may thereby be made necessary.
The term "Initial Purchaser" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by
you and the Company as provided in subsection (a) above, the aggregate
principal amount of such Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of all the
Securities, then the Company shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of
Securities which such Initial Purchaser agreed to purchase hereunder and,
in addition, to require each non-defaulting Initial Purchaser to purchase
its pro rata share (based on the principal amount of Securities which such
Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Initial Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by
you and the Company as provided in subsection (a) above, the aggregate
principal amount of Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities, or if
the Company shall not exercise the right described in subsection (b) above
to require non-defaulting Initial Purchasers to purchase Securities of a
defaulting Initial Purchaser or Initial Purchasers, then this Agreement
shall thereupon terminate, without liability on the part of any
non-defaulting Initial Purchaser or the Company, except for the expenses to
be borne by the Company and the Initial Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof;
but nothing herein shall relieve a defaulting Initial Purchaser from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Initial
Purchasers, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Initial Purchaser or any controlling
person of any Initial Purchaser, or the Company, or any officer or director
or controlling person of the Company, and shall survive delivery of and
payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Initial
Purchaser except as provided in Sections 6 and 8 hereof; but, if for any
other reason, the Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Initial
Purchasers through you for all out-of-pocket expenses approved in writing
by you, including fees and disbursements of counsel, reasonably incurred by
the Initial Purchasers in making preparations for the purchase, sale and
delivery of the Securities, but the Company shall then be under no further
liability to any Initial Purchaser except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Initial Purchasers, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Initial Purchaser made or given by you jointly or by Xxxxxxx, Xxxxx & Co.
on behalf of you as the Initial Purchasers(1).
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Initial Purchasers shall be delivered or sent by
mail, telex or facsimile transmission to you as the Initial Purchasers in
care of Xxxxxxx, Sachs & Co., 00 Xxx Xxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Registration Department; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Offering Circular, Attention: President,
Senior Vice President - Finance and General Counsel; provided, however,
that any notice to a Initial Purchaser pursuant to Section 8(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Initial Purchaser at its address set forth in its Initial Purchasers'
Questionnaire, or telex constituting such Questionnaire, which address will
be supplied to the Company by you upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Initial Purchasers, the Company and, to the extent provided
in Sections 8 and 10 hereof, the officers and directors of the Company and
each person who controls the Company or any Initial Purchaser, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No Initial Purchaser of any of the Securities from any Initial
Purchaser shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Initial Purchasers
plus one for each counsel counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Initial Purchasers, this letter and
such acceptance hereof shall constitute a binding agreement between each of
the Initial Purchasers and the Company. It is understood that your
acceptance of this letter on behalf of each of the Initial Purchasers is
pursuant to the authority set forth in a form of Agreement among Initial
Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
LOEWS CINEPLEX
ENTERTAINMENT CORPORATION
By: /s/ Xxxx X. XxXxxxx, Xx.
------------------------------
Name: Xxxx X. XxXxxxx, Xx.
Title: Senior Vice President
and General Counsel
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.,
BT Alex. Xxxxx Incorporated,
Credit Suisse First Boston Corporation,
Salomon Brothers Inc
By: /s/ Xxxxxxx, Xxxxx & Co.
-------------------------------
(Xxxxxxx, Sachs & Co.)
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
INITIAL PURCHASER PURCHASED
----------------- ---------
Xxxxxxx, Xxxxx & Co.................................. $175,000,000.00
BT Alex. Xxxxx Incorporated.......................... 41,667,000.00
Credit Suisse First Boston Corporation............... 41,667,000.00
Salomon Brothers Inc................................. 41,666,000.00
Total....................... $300,000,000.00
===============
ANNEX I
(1) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with
Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act. Each Initial Purchaser represents
that it has offered and sold the Securities, and will offer and sell the
Securities (i) as part of their distribution at any time and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Time of Delivery, only in accordance with Rule 903 of Regulation S, Rule
144A or pursuant to Paragraph 2 of this Annex I under the Act. Accordingly,
each Initial Purchaser agrees that neither it, its affiliates nor any
persons acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and it and they
have complied and will comply with the offering restrictions requirement of
Regulation S. Each Initial Purchaser agrees that, at or prior to
confirmation of sale of Securities (other than a sale pursuant to Rule
144A) or pursuant to Paragraph 2 of this Annex I, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the restricted period
a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation
S.
Each Initial Purchaser further agrees that it has not entered and will
not enter into any contractual arrangement with respect to the distribution
or delivery of the Securities, except with its affiliates or with the prior
written consent of the Company.
(2) Notwithstanding the foregoing, Securities in registered form may
be offered, sold and delivered by the Initial Purchasers in the United
States and to U.S. persons pursuant to Section 3(a)(i) of this Agreement
without delivery of the written statement required by paragraph (1) above.
(3) Each Initial Purchaser further represents and agrees that (i) it
has not offered or sold and prior to the date six months after the date of
issue of the Securities will not offer or sell any Securities to persons in
the United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (b) it has complied, and will comply, with all
applicable provisions of the Financial Services Act of 1986 of Great
Britain with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (c) it has only
issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issuance of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
1996 of Great Britain or is a person to whom the document may otherwise
lawfully be issued or passed on.
(4) Each Initial Purchaser agrees that it will not offer, sell or
deliver any of the Securities in any jurisdiction outside the United States
except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Securities in
such jurisdictions. Each Initial Purchaser understands that no action has
been taken to permit a public offering in any jurisdiction outside the
United States where action would be required for such purpose. Each Initial
Purchaser agrees not to cause any advertisement of the Securities to be
published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such
case with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at
its own risk and expense.
ANNEX II
Pursuant to Section 7(b) of the Purchase Agreement, Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx shall furnish to the Initial Purchasers their
written opinion in the following form:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock
of the Company have been duly authorized and validly issued and are
fully paid and non-assessable;
(iii) Except as set forth on a schedule to such opinion, each of
LTM New York, Inc., Loews Theatre Management Corp. and Xxxxx Theatres,
Inc. (each a "Material U.S. Subsidiary") is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided
by the Indenture; and the Securities and the Indenture conform in all
material respects to the descriptions thereof in the Offering
Circular; the Securities have been duly authorized by the Company; the
global Security has been duly executed, authenticated, issued and
delivered and constitutes a valid and legally binding obligation of
the Company entitled to the benefits provided by the Indenture; the
Securities in certificated form, when executed, authenticated issued
and delivered in exchange for the global Security in accordance with
the Indenture, shall have been duly executed, authenticated,, issued
and delivered and shall constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture;
the global Security and the Indenture conform, and the Certificated
Securities if and when issued in the form specified in the Indenture
will conform, to the descriptions thereof in the Offering Circular;
(vi) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms;
(vii) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Indenture and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject (this opinion being limited (x) to such counsel's review of
only the S- 1 Agreements and (y) in that such counsel need express no
opinion with respect to any such conflict, breach or violation not
readily ascertainable from the face of any such agreement, or arising
under or based upon any cross-default provision insofar as it relates
to a default under an agreement, not so filed or arising under or
based upon any covenant of a financial or numerical nature or
requiring computations), nor will such actions result in any violation
of the provisions of (i) the Certificate of Incorporation or By-laws
of the Company, (ii) any statute, rule or regulation of any
governmental agency or authority of the United States or of the State
of New York or under the Delaware General Corporation Law (the
"DGCL"), and (iii) any order of any court binding upon the Company or
any of its subsidiaries (the opinion in this clause (iii) being
limited to (x) such counsel's review of only those court orders that
are specifically identified in an officer's certificate of the Company
and (y) in that such counsel need express no opinion with respect to
any such violation not readily ascertainable from the face of any such
court order);
(viii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or
authority of the United States or of the State of New York or under
the DGCL is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement, except for (i) the obligation of the Company to use its
best efforts to cause to be declared or become effective under the
Securities Act, on or prior to 90 days after the Time of Delivery, a
registration statement on Form S-4 as set forth in section 5(j) of
this agreement, (ii) qualification of the Indenture in respect of the
Exchange Securities under the Trust Indenture Act of 1939 and (iii)
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Securities by the Initial Purchasers;
(ix) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute
a summary of the terms of the Securities, under the caption "Certain
United States Federal Tax Consequences to Non-United States Holders",
insofar as they purport to describe the provisions of the laws
referred to therein, and under the caption "Underwriting", insofar as
they purport to describe the provisions of the Purchase Agreement
referred to therein, fairly summarize in all material respects the
matters referred to therein;
(x) No registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust Indenture
Act of 1939 with respect thereto, is required for the offer, sale and
initial resale of the Securities by the Initial Purchasers in the
manner contemplated by this Agreement (excluding any exchange of the
Securities for Exchange Securities);
(xi) Such counsel shall state that in the course of the
preparation by the Company of the Offering Circular, such counsel
participated in conferences with certain of the officers and
representatives of, and the independent public accountants for, the
Company, at which the contents of the Offering Circular were
discussed. Such counsel shall further state that between the date of
the Offering Circular and the time of delivery of such opinion, such
counsel participated in additional conferences with certain of the
officers and representatives of, and independent public accountants
for the Company, at which the contents of the Offering Circular were
discussed to a limited extent. Such counsel may state that, given the
limitations inherent in the independent verification of factual
matters and the character of determinations involved in the process,
such counsel is not passing upon or assuming any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Offering Circular, except to the extent provided in paragraph (ix)
above. Subject to the foregoing and on the basis of the information
gained in the performance of the services referred to above, including
information obtained from officers and other representatives of, and
the independent public accountants for, the Company, such counsel
shall state that no facts have come to their attention that have
caused them to believe that the Offering Circular, as of its date,
contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Also, subject to the foregoing, such
counsel shall state that no facts have come to their attention in the
course of the proceedings described in the second sentence of this
paragraph that cause them to believe that the Offering Circular, as of
the date and time of delivery of this letter, contains an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Such counsel shall state that they express
no view or belief, however, with respect to financial statements, the
notes or schedules thereto or other financial information included in
or omitted from the Offering Circular; and
(xii) The Company is not, and after giving effect to the offering
and sale of the Securities, will not be an "investment company", as
such term is defined in the Investment Company Act.
ANNEX III
Pursuant to Section 7(c) of the Purchase Agreement, Xxxx X. XxXxxxx,
Xx. shall furnish to the Initial Purchasers his written opinion in the
following form:
(i) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except
where the failure to be so qualified in any such jurisdiction could
not reasonably be expected to have a Material Adverse Effect.
(ii) Except as disclosed in the Offering Circular, all of the
issued shares of capital stock of each Material U.S. Subsidiary have
been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares and
except as otherwise set forth in the Offering Circular) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except to the extent that such
liens, encumbrances, equities or claims could not reasonably be
expected to have a Material Adverse Effect;
(iii) To such counsel's knowledge and other than as set forth in
the Offering Circular, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would be reasonably likely to, individually or in the
aggregate, have a Material Adverse Effect; and, to such counsel's
knowledge, no such proceedings are threatened by governmental
authorities or others;
(iv) Neither the Company nor any of its subsidiaries is (i) in
violation of its Certificate of Incorporation or By-laws or (ii) in
default in the performance or observance of any material obligation,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound,
except, with respect to this subsection (ii), where such default could
not reasonably be expected to have a Material Adverse Effect; and
(v) Such counsel shall state that in the course of the
preparation by the Company of the Offering Circular, such counsel
participated in conferences with certain of the officers and
representatives of, and the independent public accountants for the
Company, at which the contents of the Offering Circular were
discussed. Such counsel shall further state that between the date of
the Offering Circular and the time of delivery of such opinion, such
counsel participated in additional conferences with certain of the
officers and representatives of, and independent public accountants
for the Company, at which the contents of the Offering Circular were
discussed to a limited extent. Such counsel may state that, given the
limitations inherent in the independent verification of factual
matters and the character of determinations involved in the process,
such counsel is not passing upon or assuming any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Offering Circular. Subject to the foregoing and on the basis of
the information gained in the performance of the services referred to
above, including information obtained from officers and other
representatives of, and the independent public accountants for the
Company, such counsel shall state that no facts have come to his
attention that have caused him to believe that the Offering Circular,
as of its date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Also,
subject to the foregoing, such counsel shall state that no facts have
come to his attention in the course of the proceedings described in
the second sentence of this paragraph that cause him to believe that
the Offering Circular, as of the date and time of delivery of this
letter, contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel
shall state that he expresses no view or belief, however, with respect
to financial statements, the notes or schedules thereto or other
financial information included in or omitted from the Offering
Circular.
ANNEX IV
Pursuant to Section 7(d) of the Purchase Agreement, Xxxxxx, Xxxx &
Xxxx shall furnish to the Initial Purchasers their written opinion in the
following manner:
(i) Cineplex Odeon is validly existing under the laws of the
Province of Ontario, Canada, with corporate power to own its
properties and conduct its business as described in the Offering
Circular; and
(ii) The authorized capital of Cineplex Odeon consists of an
unlimited number of Common Shares ("Common Shares") and an unlimited
number of First Preference Shares, issuable in series ("First
Preference Shares"), of which 95,415,303 Common Shares and no First
Preference Shares are issued and outstanding and are fully paid and
non-assessable.
(iii) The sole registered holder of the Common Shares is Loews
Cineplex Entertainment Corporation.
(iv) Cineplex Odeon has the right pursuant to the Order and
Section 185 of the OBCA, and upon offering to purchase the Common
Shares held by Dissenters and complying with the provisions of Section
185 of the OBCA to extinguish the rights of Dissenters to be paid the
fair value of their common shares acquired by the Company pursuant to
the Plan of Arrangement.
(v) Cineplex Odeon is qualified to carry on business as an
extraprovincial corporation in the Provinces of Xxx Xxxxxxxxx, Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxxx, Xxxxxxx and British Columbia. (1)
---------------------
1 Subject to receiving local agents' opinions confirming same.
ANNEX V
Pursuant to Section 7(e) of the Purchase Agreement,
PriceWaterhouseCoopers LLP shall furnish letters to the Initial Purchasers
to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the
applicable published rules and regulations thereunder;
(ii) The consolidated financial statements and financial
statement schedules audited by us and included in the Offering
Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included in the
Offering Circular agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated financial
statements for the most recent four fiscal years and in the accounting
records of the Company with respect to the fiscal year ended February
28, 1994;
(iv) On the basis of limited procedures not constituting an audit
in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Offering Circular are not in conformity
with generally accepted accounting principles applied on the
basis substantially consistent with the basis for the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Offering Circular;
(C) any unaudited income statement data and balance sheet
items included in the Offering Circular and referred to in Clause
(B) were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to
form in all material respects with the applicable accounting
requirements or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Initial Purchasers, or any increases in
any items specified by the Initial Purchasers, in each case as
compared with amounts shown in the latest balance sheet included
in the Offering Circular except in each case for changes,
increases or decreases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Initial Purchasers, or any increases in any items
specified by the Initial Purchasers, in each case as compared
with the comparable period of the preceding year and with any
other period of corresponding length specified by the Initial
Purchasers, except in each case for decreases or increases which
the Offering Circular discloses have occurred or may occur or
which are described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Initial Purchasers, which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the
Offering Circular, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
ANNEX VI
Pursuant to Section 7(f) of the Purchase Agreement, KPMG shall furnish
letters to the Initial Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to Cineplex Odeon and its subsidiaries within the meaning of
the Securities Exchange Act of 1934 (the "Exchange Act") and the
applicable published rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
Cineplex Odeon for the five most recent fiscal years included in the
Offering Circular agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated financial
statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting an audit
in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of Cineplex Odeon and its subsidiaries,
inspection of the minute books of Cineplex Odeon and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Circular, inquiries of officials of Cineplex Odeon and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Offering Circular are not in conformity
with generally accepted accounting principles applied on the
basis substantially consistent with the basis for the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were derived any
unaudited condensed financial statements referred to in Clause
(A) and any unaudited income statement data and balance sheet
items included in the Offering Circular and referred to in Clause
(B) were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to
form in all material respects with the applicable accounting
requirements or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular or any increase in the consolidated long-term
debt of Cineplex Odeon and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Initial Purchasers, or any increases in
any items specified by the Initial Purchasers, in each case as
compared with amounts shown in the latest balance sheet included
in the Offering Circular except in each case for changes,
increases or decreases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Initial Purchasers, or any increases in any items
specified by the Initial Purchasers, in each case as compared
with the comparable period of the preceding year and with any
other period of corresponding length specified by the Initial
Purchasers, except in each case for decreases or increases which
the Offering Circular discloses have occurred or may occur or
which are described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Initial Purchasers, which are derived from the general accounting
records of Cineplex Odeon and its subsidiaries, which appear in the
Offering Circular, and have compared certain of such amounts,
percentages and financial information with the accounting records of
Cineplex Odeon and its subsidiaries and have found them to be in
agreement.
