Exhibit 10.14
Execution Copy
STOCK PURCHASE AND SUBSCRIPTION AGREEMENT
BY AND AMONG
MEDIAPLEX, INC.
AND
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
AND
MEGABOX CINEPLEX, INC.
JULY 25, 2002
STOCK PURCHASE AND SUBSCRIPTION AGREEMENT
THIS STOCK PURCHASE AND SUBSCRIPTION AGREEMENT ("AGREEMENT") is made this 25th
day of July, 2002 by and among MEDIAPLEX, INC., a corporation established under
the laws of Korea and having its offices at 0X, Xxxxxxxxx X/X, 00-0
Xxxxxxx-xxxx, Xxxxxxx-xx, Xxxxx, Xxxxxxxx of Korea (hereinafter "SELLER"), Loews
Cineplex Entertainment Corporation, a corporation established under the laws of
the State of Delaware, United States of America, and having its offices at 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, X.X.X. (hereinafter "BUYER") and Megabox
Cineplex, Inc., a corporation established under the laws of Korea and having its
offices at 0X, Xxxxxxxxx X/X, 00-0 Xxxxxxx-xxxx, Xxxxxxx-xx, Xxxxx, Xxxxxxxx of
Korea (hereinafter the "COMPANY").
WITNESSETH:
WHEREAS, Seller, the Company and Loews Cineplex International Holdings, Inc.
("LCI") have entered into a Joint Venture Agreement dated May 9, 2000, as
amended by the First Amendment to Joint Venture Agreement dated August 8, 2000,
and the Supplemental Agreement and Second Amendment to Joint Venture Agreement
dated August 24, 2000 ("JOINT VENTURE AGREEMENT");
WHEREAS, concurrently with the execution of this Agreement, Seller, Buyer, the
Company and LCI have entered into an Amended and Restated Joint Venture
Agreement ("AMENDED AND RESTATED JOINT VENTURE AGREEMENT");
WHEREAS, as of the date hereof, Seller owns three million six hundred
seventy-nine thousand eight hundred and forty (3,679,840) shares of the
Company's common stock, representing seventy-five and four tenths percent
(75.4%) of all of the issued and outstanding capital stock of the Company, and
Buyer owns one million two hundred thousand (1,200,000) shares of the Company's
common stock, representing twenty-four and six tenths percent (24.6%) of all of
the issued and outstanding capital stock of the Company;
WHEREAS, pursuant to Paragraph (o) of Article 4 of the Supplemental Agreement
and Second Amendment to Joint Venture Agreement dated August 24, 2000, LCI has
the right to purchase the Mediaplex Shares (as defined in Section 1.1.1) from
Seller and to subscribe to the New Shares (as defined in Section 1.1.2);
WHEREAS, the Company is the holder of the Bank Debt (as defined in Section
4.1.5), a portion of which Buyer and Seller have determined it is in the best
interest of the Company to retire;
WHEREAS, Seller wishes to purchase from the Company and the Company wishes to
sell to Seller the Jeewoo Contributions (as defined in Section 5.2.3); and
WHEREAS, (i) Buyer wishes to purchase from Seller and Seller wishes to sell to
Buyer the Mediaplex Shares, (ii) Buyer wishes to subscribe to and Seller and the
Company wishes to issue to Buyer the New Shares and (iii) Seller wishes to
purchase from the Company and Buyer and the Company desire that the Company sell
to Seller the Jeewoo Contributions, all upon and subject to the terms,
covenants, agreements and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual and independent
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
TERMS OF PURCHASE
1.1. Purchase and Sale; Subscription. Subject to the terms and conditions
hereof:
1.1.1. Buyer shall purchase from Seller, and Seller shall sell to
Buyer, all right, title and interest in and to one million
fifteen thousand five hundred and eighteen (1,015,518) shares
of the Company's common stock (the "MEDIAPLEX SHARES"); and
1.1.2. Buyer shall subscribe for, and the Company shall issue to
Buyer, four hundred forty-eight thousand eight hundred and
four (448,804) new shares of the Company's common stock (the
"NEW SHARES").
1.2. Purchase and Subscription Consideration.
1.2.1. Subject to the terms and conditions hereof and in
consideration of the sale and transfer to Buyer by Seller of
all of the Mediaplex Shares, Buyer shall pay to Seller at
Closing (as defined in Section 2.1 below) a total purchase
consideration of seventeen billion one hundred fifty-seven
million eight hundred thousand Korean Won (KW17,157,800,000)
(the "PURCHASE CONSIDERATION").
1.2.2. Subject to the terms and conditions hereof and in
consideration of the issuance and transfer to Buyer by the
Company of all of the New Shares, Buyer shall pay to the
Company at Closing a total subscription consideration of seven
billion five hundred eighty-two million nine hundred
ninety-two thousand three hundred and eighty-four Korean Won
(KW7,582,992,384) (the "SUBSCRIPTION CONSIDERATION").
ARTICLE II
CLOSING
2.1. Closing Date. The closing for the sale and purchase of the Mediaplex
Shares and the subscription of the New Shares ("CLOSING") shall take
place on July 31, 2002 or such
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other date as the parties shall mutually agree in writing ("CLOSING
DATE"). The Closing shall take place at the offices of the Company or
such other place as the parties shall mutually agree in writing.
2.2. Buyer's Closing Actions. On the Closing Date:
2.2.1. Buyer shall deliver to Seller and the Company:
2.2.1.1. A certificate in form reasonably acceptable to Seller
and the Company stating that the conditions specified
in Sections 3.2 and 3.3 of this Agreement have been
satisfied; and
2.2.1.2. A copy of the resolutions of the Board of Directors
of Buyer (i) approving the purchase of the Mediaplex
Shares from Seller and the subscription of the New
Shares on the terms hereof and (ii) approving the
execution, delivery and performance of this Agreement
and the Amended and Restated Joint Venture Agreement.
2.2.2. Buyer shall pay to Seller the Purchase Consideration by wire
transfer of immediately available funds to an account
previously designated in writing by Seller at least five
Business Days (defined as the days on which banks are open for
business in Korea) prior to the Closing Date.
2.2.3. Buyer shall pay to the Company the Subscription Consideration
by wire transfer of immediately available funds to the
Company's subscription account previously designated in
writing by the Company at least five Business Days prior to
the Closing Date.
2.3. Seller's Closing Actions. On the Closing Date:
2.3.1. Seller shall deliver to Buyer:
2.3.1.1. A certificate in form reasonably acceptable to Buyer
stating that the conditions specified in Section 3.1
of this Agreement have been satisfied; and
2.3.1.2. A copy of the resolutions of the Board of Directors
of Seller (i) approving the sale of the Mediaplex
Shares to Buyer on the terms hereof and (ii)
approving the execution, delivery and performance of
this Agreement and the Amended and Restated Joint
Venture Agreement.
2.3.2. Seller shall deliver to Buyer the original share certificates
representing the Mediaplex Shares together with executed
copies of any and all certificates or other documents
reasonably required by Buyer's counsel to consummate the
transfer of ownership of the Mediaplex Shares from Seller to
Buyer.
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2.4. Company's Closing Actions. On the Closing Date:
2.4.1. The Company shall deliver to Buyer:
2.4.1.1. True, correct and complete copies of the Company's
balance sheet and income statement at and for the
fiscal year ended December 31, 2001, audited in
accordance with Korean GAAP and the Company's
unaudited balance sheet and income statement for the
first quarter of 2002, prepared in accordance with
Korean GAAP ("FINANCIAL STATEMENTS");
2.4.1.2. A certificate in form reasonably acceptable to Buyer
stating that the conditions specified in Section 3.1
of this Agreement have been satisfied; and
2.4.1.3. A copy of the resolutions of the Board of Directors
of the Company (i) approving the issuance of the New
Shares to Buyer on the terms hereof and (ii)
approving the execution, delivery and performance of
this Agreement and the Amended and Restated Joint
Venture Agreement.
2.5. Interim Agreements. Subject to Article III of the Amended and Restated
Joint Venture Agreement, upon Closing, the Supplemental Agreement and
Second Amendment to Joint Venture Agreement dated August 24, 2000 shall
become null and void, and any and all rights and obligations of the
parties thereunder shall also become null and void.
ARTICLE III
CONDITIONS PRECEDENT TO CLOSING
3.1. Conditions Precedent to Buyer's Obligations. The obligations of Buyer
hereunder to purchase the Mediaplex Shares and to subscribe to the New
Shares are subject to the satisfaction of each of the following
conditions at or prior to Closing, unless waived by Buyer in writing:
3.1.1. All of the representations and warranties of Seller contained
in this Agreement shall be true and correct at and as of the
Closing Date.
3.1.2. Seller and the Company shall have performed and complied in
all respects with the conditions required by this Agreement to
be performed or complied with prior to or at Closing.
3.1.3. From the date hereof to the Closing Date, the Company shall
not have suffered any material adverse change with respect to
its properties and assets, business operation or financial
condition.
3.2. Condition Precedent to Seller's Obligations. The obligations of Seller
hereunder to sell the Mediaplex Shares to Buyer are subject to the
satisfaction of each of the following
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conditions at or prior to Closing, unless waived by Seller in writing:
3.2.1. All of the representations and warranties of Buyer contained
in this Agreement shall be true and correct at and as of the
Closing Date.
3.2.2. Buyer shall have performed and complied in all respects with
the conditions required by this Agreement to be performed or
complied with prior to or at Closing.
3.3. Condition Precedent to the Company's Obligations. The obligations of
the Company hereunder to issue the New Shares to Buyer are subject to
the satisfaction of each of the following conditions at or prior to
Closing, unless waived by the Company in writing:
3.2.1. All of the representations and warranties of Buyer contained
in this Agreement shall be true and correct at and as of the
Closing Date.
3.2.2. Buyer shall have performed and complied in all respects with
the conditions required by this Agreement to be performed or
complied with prior to or at Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of Seller. Seller hereby represents and
warrants to Buyer as follows:
4.1.1. Seller and the Company are both corporations duly organized
and validly existing under the laws of the Republic of Korea.
4.1.2. Seller has full legal right, power and authority to execute
and deliver this Agreement and to duly perform and observe the
terms and conditions hereof.
4.1.3. Seller is the sole owner of the Mediaplex Shares, free and
clear of any and all pledges, security interests, liens and
encumbrances of any nature whatsoever.
4.1.4. The Financial Statements present fairly in all material
respects the financial condition of the Company at the
respective dates indicated and its results of operations for
the periods then ended, all in accordance with Korean GAAP.
4.1.5. The Company has no liabilities of a nature required to be
disclosed in the Financial Statements in accordance with
Korean GAAP as historically applied by the Company other than
liabilities (i) reflected or reserved for on the Financial
Statements, (ii) disclosed on Schedule 4.1.5.(a) hereto or
(iii) incurred in the ordinary course of business since the
date of the balance sheet included in the most recent
Financial Statement. In addition, the Company has no
non-current
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liabilities other than the bank debt, the major terms of which
are set forth in Schedule 4.1.5.(b) hereto (the "BANK DEBT").
4.1.6. Except as set forth on Schedule 4.1.6., the Company has: (i)
timely filed all tax returns pursuant to applicable legal
requirements; (ii) paid or made proper provision for payment
of all material taxes due and payable by it; and (iii)
withheld or collected all material taxes required by
applicable legal requirements and paid such taxes to the
proper governmental body. In addition, except as set forth on
Schedule 4.1.6., no tax deficiency has been proposed or
asserted against the Company as a result of any examination by
any governmental body that has not been paid or finally
settled and no such audit or examination is pending or, to
Seller's knowledge, proposed.
4.1.7. Schedule 4.1.7. lists the name, job title, hire date and
current compensation of each member of the Company's senior
management (any employee above the level of theater manager).
Except as set forth on Schedule 4.1.7., the Company is not a
party to any written or oral contract with any of the
Company's current or former senior management with respect to
length, duration, or termination of employment, salaries,
bonuses, percentage compensation, deferred compensation,
health insurance or any other form of remuneration.
4.1.8. Schedule 4.1.8. describes all of the Company's Material
Contracts (as defined below) entered into between the Company
and third parties since November 2000. Each Material Contract
is in full force and effect and is valid and enforceable in
accordance with its terms, unless otherwise noted in Schedule
4.1.8. Neither the Company nor to Seller's knowledge the other
parties to the Material Contracts are in material default
under the terms of the applicable Material Contract. To
Seller's knowledge, no party to any Material Contract intends
to terminate such Material Contract or modify its business
relationship with the Company in a manner that is materially
adverse to the Company. For purposes of this Agreement, the
term "MATERIAL CONTRACT" shall mean any contract to which the
Company is a party or by which it is bound that involves
performance of services or delivery of goods or materials by
or to the Company of an amount in excess of one hundred
thousand United States dollars (US$100,000) other than
contracts with film companies regarding film distribution or
film rent payments; provided, however, a contract regarding
film distribution or film rental payment shall be deemed to be
a "MATERIAL CONTRACT" for purposes of this Section 4.1.8 if
Seller or any affiliate of Seller is a party to such contract.
4.1.9. Schedule 4.1.9. describes all real property owned or leased by
the Company. The Company has good and valid title to, or if
applicable, a valid leasehold interest in the real property
listed on Schedule 4.1.9., free and clear of any and all
encumbrances. Each lease listed on Schedule 4.1.9. is in full
force and effect and neither the Company nor to Seller's
knowledge any other party to the lease is in material default
under the terms of the lease.
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4.1.10. All of the Company's insurance policies are in full force and
effect, all premiums with respect thereto covering all periods
up to and including the date as of which this representation
is being made have been paid and no notice of cancellation or
termination had been received by the Company with respect to
any such policy. Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby will result in a breach of any such
policies.
4.1.11. The execution and delivery of this Agreement will not result
in the breach or violation of Seller's articles of
incorporation or a breach or violation of any of the terms or
conditions of, or constitute a default under, or violate, or
result in a change in the rights or duties of any party to or
under any contract or agreement to which Seller is subject,
and such execution and delivery have been duly authorized by
all required corporate action.
4.1.12. There are no judgments, decrees or orders against Seller or
the Company, and to the best of Seller's knowledge, no
litigation is pending or threatened against Seller or the
Company that seeks to prohibit Seller or the Company from
consummating the transactions contemplated hereby.
4.1.13. All the Shares are, or will be by the date immediately
following the Closing, validly issued and outstanding and
fully paid. Seller is the record and sole beneficial owner of
the Mediaplex Shares and, at Closing, shall deliver the
Mediaplex Shares free and clear of any liens, claims, pledges,
charges, security interests or other encumbrances (other than
any of the foregoing arising as a matter of law, which, to the
best of Seller's knowledge, there are none). Other than as
provided in this Agreement, there are no agreements on the
part of Seller for the purchase, sale or other disposition of
any of the Mediaplex Shares or any interest therein, and, upon
the transfer of the Mediaplex Shares to Buyer in accordance
with this Agreement, good and marketable title in and to the
Mediaplex Shares will have been transferred and sold to Buyer,
free and clear of all liens, charges, security interests and
encumbrances of any nature whatsoever.
4.1.14. This Agreement constitutes the legal, valid and binding
obligation of Seller and the Company, enforceable in
accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, conservatorship,
receivership, liquidation, reorganization, moratorium or
similar laws or equitable principles affecting the enforcement
of creditors' rights generally.
4.1.15. Except as set forth in Schedule 4.1.15., there are no other
parties from whom consent is required in order to consummate
the transactions contemplated hereby.
4.1.16. The Company is not the subject of any bankruptcy, liquidation,
dissolution or other comparable proceeding and no trustee,
receiver or liquidator has been appointed for the Company (and
no proceeding for same is pending).
4.1.17. Neither Seller nor anyone acting on Seller's behalf has
incurred any liability or
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obligation to pay fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this
Agreement.
4.1.18. To Seller's knowledge, the Company is not infringing upon the
intellectual property of any third party and no third party is
infringing upon the intellectual property of the Company.
4.1.19. All receivables of the Company (including accounts receivable,
notes receivable and other debts owing to or accruing to the
Company and the full benefit of all security for such
accounts, notes or debts), as reflected in the Financial
Statements and which have arisen thereafter, have arisen only
from bona fide transactions in the ordinary course of business
and are collectible in the ordinary course of business as of
the date hereof. The values at which receivables are carried
reflects the accounts receivable valuation policy of the
Company which is consistent with its past practice and in
accordance with Korean GAAP applied on a consistent basis.
4.1.20. Except as set forth on Schedule 4.1.20., since January 1, 2002
(i) no event has occurred that would reasonably be expected to
have a material adverse effect and (ii) the Company has not
made or agreed to make any increase in compensation payable to
any member of the Company's senior management except in the
ordinary course of business consistent with past practice.
4.1.21. The Company is complying, and during all applicable times has
complied in all material respects, with all legal requirements
applicable to it and to the conduct of its business.
4.1.22. Except as disclosed on Schedule 4.1.22. hereto, there are no
outstanding notes payable to or accounts receivable from, or
advances, directly or indirectly, by the Company to, and the
Company is not, directly or indirectly, otherwise a creditor
of, or party to any contract with, Seller or any affiliate of
Seller.
4.1.23. Except as set forth on Schedule 4.1.23. hereto, the Company
has good and marketable to, or a valid license or leasehold
interest in, the assets used by the Company, except for assets
disposed of prior to Closing in the ordinary course of
business. Immediately after Closing, the Company will have
good and marketable title to, or a valid license or leasehold
interest in, all assets used by the Company.
4.1.24. No representation or warranty made by Seller in this
Agreement, in the Schedules or in the certificate to be
provided pursuant to Section 2.3.1.1 contains or will contain
any untrue statement of material fact or omits to state any
material fact necessary to make the statements contained
therein, in light of circumstances under which they were made,
not misleading.
4.2. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller and the Company as follows:
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4.2.1. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, United
States of America.
4.2.2. Buyer has full legal right, power and authority to execute and
deliver this Agreement and to duly perform and observe the
terms and conditions hereof.
4.2.3. The execution and delivery of this Agreement will not result
in the breach or violation of Buyer's foundation documents or
a breach or violation of any of the terms or conditions of, or
constitute a default under, or violate, or result in a change
in the rights or duties of any party to or under any contract
or agreement to which such party is subject, and such
execution and delivery have been duly authorized by all
required corporate action.
4.2.4. There are no judgments, decrees or orders against Buyer, and
to the best of Buyer's knowledge, no litigation is pending or
threatened against Buyer that seeks to prohibit Buyer from
consummating the transactions contemplated hereby.
4.2.5. This Agreement constitutes the legal, valid and binding
obligations of Buyer, enforceable in accordance with its
terms.
4.2.6. Except as set forth in Schedule 4.2.6., there are no other
parties from whom consent is required in order to consummate
the transactions contemplated hereby.
4.2.7. Buyer is not the subject of any bankruptcy, liquidation,
dissolution or other comparable proceeding that affects
Buyer's ability to execute, deliver and perform this
Agreement, and no trustee, receiver or liquidator has been
appointed for Buyer (and no proceeding for same is pending).
4.2.8. No representation or warranty made by Buyer in this Agreement,
in the Schedules or in the certificate to be provided pursuant
to Section 2.2.1.1 contains or will contain any untrue
statement of material fact or omits to state any material fact
necessary to make the statements contained therein, in light
of circumstances under which they were made, not misleading.
ARTICLE V
COVENANTS
5.1. Pre-closing Covenants. From the date of this Agreement to Closing:
5.1.1. Seller will use its reasonable efforts to cause the Company to
conduct its operations only in the ordinary course of business
and, without limiting the generality of the foregoing, Seller
will not, without the prior written consent of Buyer, enter
into on behalf of the Company any Material Contract.
5.1.2. Seller will use its reasonable efforts to preserve intact the
present business
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organization and personnel of the Company, to preserve
relationships with customers, suppliers and others having
business dealings with the Company.
5.1.3. Seller will cause the Company to refrain from increasing or
agreeing to increase any compensation payable to any member of
the Company's senior management (above theater manager level)
except in the ordinary course of business of the Company.
5.1.4. Neither Buyer, Seller nor the Company will take any action
intended to interfere with or prevent the timely consummation
of the transactions contemplated by this Agreement.
5.1.5. If, to the knowledge of any party hereto, an event occurs or
fails to occur that has or is reasonably likely to have a
material adverse effect on the completeness or accuracy of the
representations and warranties of such party set forth in
Article IV hereof, such party will promptly notify the other
parties to that effect.
5.2. Post-closing Covenants.
5.2.1. No later than seven (7) Business Days from the Closing Date,
Buyer and Seller shall cause the Company to apply the sum of
four billion two hundred ninety-three million Korean Won
(KW4,293,000,000) ("COMPANY BANK DEBT RETIREMENT PROCEEDS")
from the Subscription Consideration to retire a portion of the
Bank Debt identified on Schedule 4.1.5.(b) hereto.
5.2.2. The Subscription Consideration less the Company Debt
Retirement Proceeds (three billion two hundred eighty-nine
million nine hundred ninety-two thousand three hundred and
eighty four Korean Won (KW3,289,992,384)) will remain in the
Company as additional operating capital for such purposes as
the Company's shareholders may determine from time to time in
accordance with the terms of the Amended and Restated Joint
Venture Agreement.
5.2.3. No later than ten (10) Business Days from the Closing Date,
Seller shall purchase from the Company 260 units of
contribution in the Jeewoo-Mega Film Venture Fund ("JEEWOO
CONTRIBUTIONS") in the face amount of two point six billion
Korean Won (KW2,600,000,000) for a total purchase
consideration of two billion seven hundred eight million nine
hundred eighty thousand and three hundred Korean Won
(KW2,708,980,300), which shall be paid by wire transfer of
immediately available funds to an account previously
designated in writing by the Company. Any and all taxes and
associated costs and expenses (including legal fees and
expenses) associated with the transfer and registration of the
Jeewoo Contributions shall be for Seller's sole account; and
Seller shall indemnify and hold harmless Purchaser and Company
from all such taxes, costs and expenses incurred or paid by
them or their affiliates.
5.3. Registration of Issuance of New Shares. On the Business Day immediately
following the
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Closing Date, the Company shall register the issuance of the New Shares
in the company registry of the Company and deliver the original share
certificates representing the New Shares to Buyer.
5.4. Governmental Approvals. Each party to this Agreement will use its
reasonable efforts to obtain all consents, approvals and authorizations
of third parties, and to do all other things, including fulfilling the
conditions required to be fulfilled by that party, that are necessary
to bring about the timely consummation of the transactions contemplated
by this Agreement.
5.5. Further Assurances. After the Closing Date, each party to this
Agreement will take any additional actions, including executing and
delivering additional documents that the other parties may reasonably
request for the purpose of carrying out the intent of this Agreement.
ARTICLE VI
INDEMNIFICATION
6.1. Losses. For purposes of this Agreement, the terms "Loss" or "Losses"
shall mean each and all of the following items to the extent actually
incurred: claims, losses, liabilities, damages, judgments, awards,
costs and expenses (including, without limitation, reasonable fees and
disbursements of counsel). Losses shall exclude all consequential
damages.
6.2. Indemnification by Seller. Seller shall indemnify and hold harmless
Buyer and its respective affiliates from and against any and all Losses
based upon, arising out of, or resulting from, any of the following:
6.2.1. any breach by Seller of any of the representations or
warranties made by Seller in this Agreement; and
6.2.3. any failure by Seller to perform any of its covenants or
agreements contained in this Agreement.
Notwithstanding anything to the contrary contained herein, Seller (i)
shall not be obligated to pay any amount for indemnification under this
Section 6.2 until the aggregate amount of indemnification required to
be made under this Section 6.2 exceeds US$50,000 (the "BASKET AMOUNT"),
whereupon Seller shall be obligated to pay all amounts for such
indemnification in excess of the Basket Amount; and (ii) shall not be
obligated to make any payments for indemnification under this Section
6.2 which exceed the sum of all payments to be made by Buyer hereunder
and Buyer's total prior investment in the Company.
6.3. Indemnification by Buyer. Buyer shall indemnify and hold harmless
Seller, the Company and their respective affiliates from and against
any and all Losses based upon or resulting
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from any of the following:
6.3.1. any breach by Buyer of any of the representations or
warranties made by Buyer in this Agreement; and
6.3.2. any failure by Buyer to perform any of its covenants or
agreements contained in this Agreement.
Notwithstanding anything to the contrary contained herein, Buyer (i)
shall not be obligated to pay any amount for indemnification under this
Section 6.3 until the aggregate amount of indemnification required to
be made under this Section 6.3 exceeds the Basket Amount, whereupon
Buyer shall be obligated to pay all amounts for such indemnification in
excess of the Basket Amount; and (ii) shall not be obligated to make
any payments for indemnification under this Section 6.3 which exceed
the sum of all payments to be made by Buyer hereunder and Buyer's total
prior investment in the Company.
6.4. Indemnification by the Company.
6.4.1. Buyer and Seller shall cause the Company to indemnify and hold
harmless Buyer and Seller and each director, each affiliate of
Buyer and Seller, each of the foregoing's respective
directors, officers, employees and agents and each of the
heirs, executors, successors and assigns of any of the
foregoing, from and against any and all Losses based upon or
resulting from, (i) any liability of the Company or (ii) any
act or omission performed or omitted to be performed by such
person in its or his capacity as a shareholder, director or an
affiliate of a shareholder or as a director, officer,
employee, agent, successor or assign of such shareholder,
director or affiliate) except for acts or omissions
constituting gross negligence, bad faith, fraud or willful
misconduct, or breach of this Agreement, provided that no
person shall have any obligation or liability under this
Section 6.4 with respect to any Losses for which such person
is indemnified or is entitled to indemnification hereunder.
6.4.2. Except as expressly provided in this Section 6.4, neither
Buyer nor Seller will have any obligation or liability to the
other arising out of or relating to any liability of the
Company.
6.5. Claims. When a party seeking indemnification under Section 6.2, 6.3 or
6.4.1 ("INDEMNIFIED PARTY") receives notice of any claims made by third
parties ("THIRD PARTY CLAIMS") or has any other claim for
indemnification other than a Third Party Claim, which is to be the
basis for a claim for indemnification hereunder, the Indemnified Party
shall give prompt written notice thereof to the other party or parties
("INDEMNIFYING PARTY") reasonably indicating (to the extent known) the
nature of such claims and the basis thereof; provided, however, that
failure of the Indemnified Party to give the Indemnifying Party prompt
notice as provided herein shall not relieve the Indemnifying Party of
any of its obligations hereunder unless and only to the extent that the
Indemnifying Party shall have been materially prejudiced thereby. The
Indemnified
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Party shall have the right to either (i) assume the defense of any
Third Party Claim at its own cost or (ii) request that the Indemnifying
Party assume the defense of such Third Party Claim. No compromise or
settlement in respect of any Third Party Claims may be effected by the
Indemnifying Party without the Indemnified Party's prior written
consent (which consent shall not be unreasonably withheld or delayed).
Regardless of whether the Indemnified Party assumes the defense of a
Third Party Claim or requests the Indemnifying Party to assume such
defense, the Indemnifying Party shall pay all costs and expenses
thereof, including without limitation fees and expenses of legal
counsel.
6.6. Contribution. Except as otherwise provided hereunder, in the event that
Buyer or Seller shall pay in good faith or become obligated to pay any
proper obligation of the Company, such party shall be entitled to
contribution from the other party to this Agreement to the extent
necessary so that, after giving effect to such contribution, neither
Buyer nor Seller shall bear any more than that part of such obligation
which corresponds to its total share subscription capital contributions
at the time of the occurrence, circumstances, events or conditions
giving rise to such obligation.
ARTICLE VII
TERMINATION
7.1. Termination. At any time on or prior to the Closing, any party hereto
may immediately terminate this Agreement by giving written notice to
the other parties, if:
7.1.1. the Closing has not occurred on or prior to July 31, 2002, or
it becomes evident that any of the conditions precedent to the
closing obligations of any party, as set forth in Article II
and Article III hereof, will not be able to be satisfied on or
prior to the Closing Date; provided, however, that failure to
close or the non-satisfaction of such conditions precedent
shall not be attributable to the party seeking to terminate
this Agreement;
7.1.2. without prejudice to Article VI, the other party has committed
a material breach of any representation or warranty,
agreement, covenant, or other term of this Agreement, and
fails to cure such breach within ten (10) Business Days of the
receipt of written notice from the non-breaching party
requesting cure of the breach;
7.1.3. the other party, its creditor or any third party files for
bankruptcy, composition, corporate reorganization or other
similar proceedings of the other party, or the other party has
become insolvent and is unable to pay any debts as they become
due or has explicitly or implicitly suspended payment of any
debts as they become due.
7.2. Effect of Termination. In the event of termination of this Agreement
under Section 7.1 hereof, this Agreement shall forthwith become null
and void, except for Articles VI, VII and VIII; provided, however, the
termination of this Agreement shall not relieve any party
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of any liability for breach of this Agreement prior to such
termination.
7.3. Survival of Representation and Warranties. Notwithstanding anything
contained in this Agreement to the contrary, all representations and
warranties made by Seller and Buyer under this Agreement in connection
with the transactions contemplated herein shall survive Closing for a
period of eighteen months and shall survive any investigation made at
any time with respect thereto.
ARTICLE VIII
MISCELLANEOUS
8.1. No Waiver of Rights. No failure or delay on the part of any party in
the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, and no single or partial exercise of any such
power, right or privilege shall preclude other or further exercise
thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement are cumulative with, and not
exclusive of, any rights or remedies otherwise available. No waiver
shall be binding unless in writing and signed by the party to be
charged or a qualified officer thereof.
8.2. Publicity. No party to this Agreement will issue any press release or
otherwise make any public statements or announcements concerning this
Agreement or the transactions contemplated by this Agreement without
the prior written consent of the other parties.
8.3. Confidentiality.
8.3.1. Each party shall use information provided by the other
party(ies) or obtained in the course of the transactions as
contemplated hereunder to fully and diligently carry out the
obligations under this Agreement or as required by law, but
not for any other purpose.
8.3.2. Each party agrees to maintain the confidentiality of all
information and data relating to the other party(ies)'s
business received from the other party(ies) including without
limitation economical, financial and/or technical information,
disclosed, directly or indirectly, or disclosed by visual
inspection, and shall not disclose such information and data
to a third party without the prior written consent of the
other party(ies), provided, however, that the preceding
obligation shall not apply to information which (i) was in the
public domain at the time of disclosure; (ii) enters the
public domain after the time of disclosure, without the
receiving party's fault; (iii) is required to be disclosed by
law or order of the court, in which case, the receiving party
shall notify the other party(ies) of such statutory
requirement or court order prior to the disclosure; or (iv)
has been acquired from third parties which had not previously
acquired it, directly or indirectly, from the disclosing
party(ies).
8.3.3. Each party shall procure that its employees, servants and
agents are bound by the
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confidentiality obligations on terms set out above.
8.4. Notice. All notices hereunder shall be in writing and shall be either
personally delivered, transmitted by telecopier, or transmitted by
internationally recognized courier service to the parties listed below
at their respective addresses. Except as otherwise specified herein,
all notices and other communications shall be deemed to have been duly
given on (a) the date of delivery, in the case of notice by personal
delivery, (b) the date of electronically confirmed transmission, in the
case of notice by telecopier, and (c) three (3) days after dispatch, in
the case of delivery by an internationally recognized courier service.
For purposes hereof, the addresses of the parties (until notice of a
change thereof is given as provided in this Section 8.4.), shall be as
follows:
If to Seller:
MEDIAPLEX, INC.
7F, Cinehouse B/D
00-0 Xxxxxxx-xxxx
Xxxxxxx-xx
Xxxxx, Xxxxxxxx of Korea
Attention: Woo Xxxx Xxx
Telephone: 00-0-0000-0000
Facsimile: 00-0-0000-0000
If to Buyer:
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. XxXxxxx, Xx.
General Counsel
Telephone: 0-000-000-0000
Facsimile: 0-000-000-0000
with a copy to: the same address
Xxxx X. Xxxxxx
Senior Vice President and Chief Financial Officer
Telephone: 0-000-000-0000
Facsimile: 0-000-000-0000
With a copy to: the same address
Xxxxxx Xxxx
President and CEO
Telephone: 0-000-000-0000
Facsimile: 0-000-000-0000
15
With a copy to:
DW Partners
KMD Xxxx. 0xx Xxxxx
000-00, Xxxxxx-xxxx
Xxxxxxx-xx
Xxxxx, 000-000, Xxxxxxxx of Korea
Attention: Xxxxxxxxx Xxxx
Facsimile: 822-512-6060
If to the Company:
MEGABOX CINEPLEX, INC.
0X, Xxxxxxxxx X/X
00-0 Xxxxxxx-xxxx
Xxxxxxx-xx
Xxxxx, Xxxxxxxx of Korea
Attention: Representative Director
Telephone: 00-0-0000-0000
Facsimile: 00-0-0000-0000
8.5. Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed by and construed in accordance with
the laws of the Republic of Korea, without regard to conflicts of laws
principles.
8.6. Jurisdiction. The Seoul District Court shall have jurisdiction over any
disputes or litigation that may arise out of or in relation to this
Agreement.
8.7. Counterpart Originals. This Agreement may be executed simultaneously in
any number of counterparts each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.
8.8. Assignment; Successors. This Agreement shall inure to the benefit of
and be binding upon the heirs, successors and assigns of all parties
and may not be assigned to a third party without prior written consent
of the other parties.
8.9. Entire Agreement; Modifications; Severability. This Agreement
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior agreements,
representations and understandings, written or oral, of the parties.
This Agreement may not be modified or amended except by a writing
signed by each of the parties hereto (and by a qualified officer if
such party is a legal entity). The invalidity, illegality or
unenforceability for any reason of any one or more provisions of this
Agreement shall not affect the validity, legality or enforceability of
the remainder of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers on the date first above written.
MEDIAPLEX, INC.
By: /s/ Xxx, Xxxx Kon
---------------------------------------
Name: Xxx, Xxxx Kon
Title: President
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
By: /s/ Xxxx X. XxXxxxx, Xx.
---------------------------------------
Name: Xxxx X. XxXxxxx, Xx.
Title: Senior Vice President
and General Counsel
MEGABOX CINEPLEX, INC.
By: /s/ Xxx, Xxxx Kon
---------------------------------------
Name: Xxx, Xxxx Kon
Title: President
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