Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Registration of Securities Issued in a 169 828K
Business-Combination Transaction
2: EX-1.1 Purchase Agreement 39 129K
3: EX-2.1 Asset Purchase Agreement 28 115K
4: EX-2.2 Asset Purchase Agreement 65 262K
5: EX-2.3 Property Purchase Agreement 57 226K
6: EX-3.1 Certificate of Incorporation 11 37K
7: EX-3.2 By-Laws of Silver Cinemas International, Inc. 41 86K
8: EX-3.3 Certificate of Incorporation 2 12K
9: EX-3.4 By-Laws of Silver Cinemas, Inc. 40 87K
10: EX-3.5 Certificate of Incorporation 3 17K
11: EX-3.6 By-Laws of Sci Acquisition Corp. 40 85K
12: EX-3.7 Certificate of Incorporation 2 12K
13: EX-3.8 By-Laws of Landmark Theatre Corp. 39 86K
14: EX-4.1 Indenture 151 489K
15: EX-4.2 A/B Exchange Registration Rights Agreement 22 95K
16: EX-5.1 Opinion of Latham & Watkins 3 17K
17: EX-10.1 Stockholders' Agreement 21 69K
18: EX-10.2 Employment Agreement - Bert Manzari 20 75K
19: EX-10.3 Employment Agreement - Paul Richardson 18 66K
20: EX-12.1 Computation of Ratio of Earnings 3 20K
21: EX-21.1 Subsidiaries of Silver Cinemas Int'L, Inc. 1 9K
22: EX-23.2 Consent of Deloitte & Touche LLP 1 11K
23: EX-23.3 Consent of Kpmg Peat Marwick LLP 1 10K
24: EX-23.4 Consent of Coopers & Lybrand LLP 1 11K
25: EX-25.1 Form T-1 5 22K
28: EX-27.1 ƒ Financial Data Schedule 2± 14K
26: EX-99.1 Form of Letter of Transmittal 17 74K
27: EX-99.2 Forms of Notices of Guaranteed Delivery 4 21K
EXHIBIT 1.1
SILVER CINEMAS INTERNATIONAL, INC.
SILVER CINEMAS, INC.
SCI ACQUISITION CORP.
LANDMARK THEATRE CORP.
$100,000,000
10 1/2% Series A Senior Subordinated Notes due 2005
Purchase Agreement
April 9, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN INCORPORATED
BEAR, STEARNS & CO. INC.
SILVER CINEMAS INTERNATIONAL, INC.
$100,000,000
10 1/2% Senior Subordinated Notes due 2005, Series A
PURCHASE AGREEMENT
April 9, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT Alex. Brown Incorporated
Bear, Stearns & Co. Inc.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
SILVER CINEMAS INTERNATIONAL, INC., a Delaware corporation (the
"Company"), proposes to issue and sell to Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), BT Alex. Brown Incorporated and Bear, Stearns &
Co. Inc. (each an "Initial Purchaser" and, collectively, the "Initial
Purchasers") an aggregate of $100,000,000 in principal amount of its 10 1/2%
Senior Subordinated Notes due 2005, Series A (the "Series A Notes"), subject to
the terms and conditions set forth herein. The Series A Notes are to be issued
pursuant to the provisions of an indenture (the "Indenture"), to be dated as of
the Closing Date (as defined below), among the Company, the Guarantors (as
defined below) and Norwest Bank, Minnesota, N.A., as trustee (the "Trustee").
The Series A Notes and the Series B Notes (as defined below) issuable in
exchange therefor are collectively referred to herein as the "Notes." The Notes
will be guaranteed (the "Subsidiary Guarantees") by each of the entities listed
on Schedule A, hereto (each, a "Guarantor" and collectively the "Guarantors").
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.
On December 17, 1997, Silver Cinemas, Inc., a Delaware
corporation and a subsidiary of the Company ("Silver"), Landmark Theatre
Corporation, a California corporation ("Landmark"), Seven Gables Corporation, a
California corporation ("Gables"), Parallax Theatre Systems, Inc., a California
corporation ("Parallax"), San Francisco Landmark Theatre Corporation, a
California corporation ("SFLTC"), and Wisconsin Repertory Cinemas, Inc., a
California corporation ("Wisconsin"), The Landmark Theatre Group, a California
corporation ("Group"), (Landmark, Group, Gables, Parallax, SFLTC and Wisconsin
are collectively and
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individually called "Landmark Seller") and Metromedia International Group, Inc.,
a Delaware corporation ("Metromedia"), entered into an Agreement for the
Purchase and Sale of Assets and a Letter Agreement relating to "Critical
Theaters and Employment Indemnifications" (together, and including all related
documents and schedules, the "Landmark Asset Purchase Agreement"). The Landmark
Asset Purchase Agreement provides, among other things, for the purchase by
Silver of certain of the assets of the Landmark Seller listed in the Asset
Purchase Agreement (the "Landmark Acquisition").
On January 22, 1998, Silver, StarTime Cinema, Inc. a Nevada
corporation ("StarTime"), F.S.A. Super Saver Cinemas No. 1, Ltd., a Texas
limited partnership ("Super Saver"), StarTime Properties, Inc., a Nevada
corporation ("SPI" and, together with StarTime and Super Saver, the "StarTime
Seller"), the other persons party thereto, and SCI Acquisition Corp., a Delaware
corporation and a subsidiary of the Company ("SCI") entered into an Asset
Purchase Agreement (together with all related documents and schedules, including
the assignment of SCI's rights and obligations to Silver, the "StarTime Asset
Purchase Agreement"). The StarTime Asset Purchase Agreement provides, among
other things, for the purchase by SCI of certain of the assets of the StarTime
Seller listed in the Asset Purchase Agreement (the "StarTime Acquisition" and,
together with the Landmark Acquisition, the "Acquisitions"). The Company will
use the net proceeds from the issuance and sale of the Series A Notes to finance
the purchase price for the Acquisitions, to repay certain indebtedness, finance
theater construction and general corporate purposes.
1. OFFERING MEMORANDUM. The Series A Notes will be offered and
sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"Securities Act" or the "Act"). The Company and the Guarantors have prepared a
preliminary offering memorandum, dated March 27, 1998 (the "Preliminary Offering
Memorandum") and a final offering memorandum, dated April 9, 1998 (the "Offering
Memorandum"), relating to the Series A Notes and the Subsidiary Guarantees.
Upon original issuance thereof, and until such time as the same
is no longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (the "ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS,
EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
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BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (i) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(as defined in Rule 144A under the Act)(a "QIB"), (ii) IT HAS
ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE ACT OR (iii) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (as defined in Rule 501(A)(1), (2), (3) OR
(7) of Regulation D under the Act (an "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (i) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (ii)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (iii) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904
OF THE ACT, (iv) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE ACT, (v) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER
OF THIS NOTE (the form of which can be obtained from the Trustee)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE ACT, (vi) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (vii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION
S UNDER THE ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE
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TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the principal amounts
of Series A Notes set forth opposite the name of such Initial Purchaser on
Schedule B hereto at a purchase price equal to 97.0% of the principal amount
thereof (the "Purchase Price").
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers (the "Exempt Resales") of
the Series A Notes purchased hereunder on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs") and (ii) persons permitted to purchase the
Series A Notes in offshore transactions in reliance upon Regulation S under the
Act (each, a "Regulation S Purchaser") (such persons specified in clauses (i)
and (ii) being referred to herein as the "Eligible Purchasers"). The Initial
Purchasers will offer the Series A Notes to Eligible Purchasers initially at a
price equal to 100% of the principal amount thereof. Such price may be changed
at any time without notice.
Holders (including subsequent transferees) of the Series A Notes
will have the registration rights set forth in the registration rights agreement
(the "Registration Rights Agreement"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Series A Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "Commission") under the circumstances set forth therein, (i) a
registration statement under the Act (the "Exchange Offer Registration
Statement") relating to the Company's 10 1/2% Senior Subordinated Notes due
2005, Series B (the "Series B Notes" and, together with the Series A Notes, the
"Notes"), to be offered in exchange for the Series A Notes (such offer to
exchange being referred to as the "Exchange Offer") and the Subsidiary
Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415
under the Act (the "Shelf Registration Statement" and, together with the
Exchange Offer Registration Statement, the "Registration Statements") relating
to the resale by certain holders of the Series A Notes and to use its best
efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes, the Subsidiary Guarantees and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "Operative Documents."
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4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the
Series A Notes shall be made at the offices of Cahill Gordon & Reindel or such
other location as may be mutually acceptable. Such delivery and payment shall be
made at 9:00 a.m. New York City time, on April 16, 1998 or at such other time on
the same date or such other date as shall be agreed upon by the Initial
Purchasers and the Company in writing. The time and date of such delivery and
the payment for the Series A Notes are herein called the "Closing Date."
(b) One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
principal amount of the Series A Notes (collectively, the "Global Note"), shall
be delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct) in each case with any transfer taxes thereon duly paid by the
Company against payment by the Initial Purchasers of the Purchase Price thereof
by wire transfer in same day funds to the order of the Company. The Global Note
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. Each of the
Company and the Guarantors hereby agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such advice in writing, (i) of the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Series A Notes for offering
or sale in any jurisdiction designated by the Initial Purchasers pursuant to
Section 5(e) hereof, or the initiation of any proceeding by any state securities
commission or any other federal or state regulatory authority for such purpose
and (ii) of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires any
additions to or changes in the Preliminary Offering Memorandum or the Offering
Memorandum in order to make the statements therein not misleading. The Company
and the Guarantors shall use their best efforts to prevent the issuance of any
stop order or order suspending the qualification or exemption of any Series A
Notes under any state securities or Blue Sky laws and, if at any time any state
securities commission or other federal or state regulatory authority shall issue
an order suspending the qualification or exemption of any Series A Notes under
any state securities or Blue Sky laws, the Company and the Guarantors shall use
their best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Preliminary Offering Memorandum and the Of-
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fering Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request for the time period specified in Section 5(c).
Subject to the Initial Purchasers' compliance with its representations and
warranties and agreements set forth in Section 7 hereof, the Company and the
Guarantors consent to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchasers in connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchasers for so long as any Series A
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which the Initial Purchasers shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales or such
market-making activities.
(d) If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchasers
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither the Company nor any Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to mat-
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ters and transactions relating to the Preliminary Offering Memorandum, the
Offering Memorandum or Exempt Resales, in any jurisdiction in which it is not
now so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(g) So long as the Notes are outstanding, to furnish to the
Initial Purchasers as soon as available copies of all reports or other
communications furnished by the Company or any of the Guarantors to its security
holders or furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company or any of the
Guarantors is listed and such other publicly available information concerning
the Company and/or its subsidiaries as the Initial Purchasers may reasonably
request.
(h) So long as any of the Series A Notes remain outstanding and
during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder of Series A Notes in connection
with any sale thereof and any prospective purchaser of such Series A Notes from
such holder, the information ("Rule 144A Information") required by Rule
144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of the Company
and the Guarantors under this Agreement, including: (i) the fees, disbursements
and expenses of counsel to the Company and the Guarantors and accountants of the
Company and the Guarantors in connection with the sale and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales, and all
other fees and expenses in connection with the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum, the Offering Memorandum and
all amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to
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the Initial Purchasers and persons designated by it in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Series A Notes, (iv) all expenses in connection with the
registration or qualification of the Series A Notes and the Subsidiary
Guarantees for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Initial Purchasers in
connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates representing the Series A Notes
and the Subsidiary Guarantees, (vi) all expenses and listing fees in connection
with the application for quotation of the Series A Notes in the National
Association of Securities Dealers, Inc. ("NASD") Automated Quotation System -
PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture, the Notes and the Subsidiary
Guarantees, (viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies for the
rating of the Notes, (x) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration Rights Agreement, (xi)
fifty percent of the air travel expenses related the roadshow presentations and
marketing efforts, and (xii) and all other costs and expenses incident to the
performance of the obligations of the Company and the Guarantors hereunder for
which provision is not otherwise made in this Section.
(j) To use its best efforts to effect the inclusion of the Series
A Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL
for so long as the Series A Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and continuing
to and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
Guarantor or any warrants, rights or options to purchase or otherwise acquire
debt securities of the Company or any Guarantor substantially similar to the
Notes and the Subsidiary Guarantees (other than (i) the Notes and the Subsidiary
Guarantees and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of DLJ.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series A
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Notes to the Initial Purchasers or pursuant to Exempt Resales in a manner that
would require the registration of any such sale of the Series A Notes under the
Act.
(n) Not to voluntarily claim, and to actively resist any attempts
to claim, the benefit of any usury laws against the holders of any Notes and the
related Subsidiary Guarantees.
(o) To cause the Exchange Offer to be made in the appropriate
form to permit Series B Notes and guarantees thereof by the Guarantors
registered pursuant to the Act to be offered in exchange for the Series A Notes
and the Subsidiary Guarantees and to comply with all applicable federal and
state securities laws in connection with the Exchange Offer.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its best efforts to do and perform all things required
or necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes and the Subsidiary Guarantees.
(r) To use its best efforts and to take all actions reasonably
required to consummate the Acquisitions on or prior to the Closing Date.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
THE GUARANTORS. As of the date hereof, each of the Company and each of the
Guarantors represents and warrants to, and agrees with, the Initial Purchasers
that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to own, lease and operate its
properties,
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and each is, and after the consummation of the Acquisitions will be, duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not, either before or after the consummation of
the Acquisitions, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect").
(c) All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable.
(d) The entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding shares
of capital stock of each of the Company's subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through one or more subsidiaries, free and clear
of any security interest, claim, lien, encumbrance or adverse interest of any
nature (each, a "Lien") except for Liens pursuant to the Existing Credit
Facility (as defined in the Offering Memorandum) as described in the Offering
Memorandum.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and
each of the Guarantors and, on the Closing Date, will have been validly executed
and delivered by the Company and each of the Guarantors. When the Indenture has
been duly executed and delivered by the Company and each of the Guarantors, the
Indenture will be a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in accordance with
its terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Indenture will conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA" or "Trust Indenture Act"), and the
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder.
(g) The Series A Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Series A Notes have been issued, executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, the Series A
Notes will be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles
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of general applicability. On the Closing Date, the Series A Notes will conform
as to legal matters to the description thereof contained in the Offering
Memorandum.
(h) On the Closing Date, the Series B Notes will have been duly
authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Subsidiary Guarantee to be endorsed on the Series A Notes
by each Guarantor has been duly authorized by such Guarantor and, on the Closing
Date, will have been duly executed and delivered by each such Guarantor. When
the Series A Notes have been issued, executed and authenticated in accordance
with the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Subsidiary Guarantee of each
Guarantor endorsed thereon will be entitled to the benefits of the Indenture and
will be the valid and binding obligation of such Guarantor, enforceable against
such Guarantor in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Subsidiary Guarantees to be endorsed on
the Series A Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum.
(j) The Subsidiary Guarantee to be endorsed on the Series B Notes
by each Guarantor has been duly authorized by such Guarantor and, when issued,
will have been duly executed and delivered by each such Guarantor. When the
Series B Notes have been issued, executed and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, the Subsidiary Guarantee of
each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability. When the Series B Notes are issued, authenticated and
delivered, the Subsidiary Guarantees to be endorsed on the Series B Notes will
conform as to legal matters to the description thereof in the Offering
Memorandum.
(k) The Registration Rights Agreement has been duly authorized by
the Company and each of the Guarantors and, on the Closing Date, will have been
duly executed and delivered by the Company and each of the Guarantors. When the
Registration Rights Agreement has
-13-
been duly executed and delivered, the Registration Rights Agreement will be a
valid and binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each Guarantor in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(l) The Landmark Asset Purchase Agreement has been duly
authorized, executed and delivered by Silver, and is a valid and binding
agreement of Silver, enforceable against Silver in accordance with its terms
except as (i) the enforceability thereof may be limited by the effect of
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (ii) rights of acceleration, if applicable, and the availability of
equitable or other remedies may be limited by equitable principles of general
applicability and (iii) the effect of general principles of equity, whether
enforcement is considered in equity or at law, and the discretion of the court
before which any proceeding therefor is brought.
(m) The StarTime Asset Purchase Agreement has been duly
authorized, executed and delivered by each of Silver and SCI, and is a valid and
binding agreement of each of Silver and SCI, enforceable against each of Silver
and SCI in accordance with its terms except as (i) the enforceability thereof
may be limited by the effect of applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally, (ii) rights of acceleration, if
applicable, and the availability of equitable or other remedies may be limited
by equitable principles of general applicability and (iii) the effect of general
principles of equity, whether enforcement is considered in equity or at law, and
the discretion of the court before which any proceeding therefor is brought.
(n) Neither the Company nor any of its subsidiaries is, and
immediately after the Acquisitions will not be, in violation of its respective
charter or by-laws or in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to the Company
and its subsidiaries, taken as a whole, (i) to which the Company or any of its
subsidiaries is a party or (ii) by which the Company or any of its subsidiaries
or their respective property is bound.
(o) Except as otherwise disclosed in the Offering Memorandum, the
execution, delivery and performance of this Agreement, the Landmark Asset
Purchase Agreement, the StarTime Asset Purchase Agreement and the other
Operative Documents by the Company and each of the Guarantors, compliance by the
Company and each of the Guarantors with all provisions hereof and thereof and
the consummation of the transactions contemplated hereby and thereby will not
(i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as may
be required under the securities or Blue Sky laws
-14-
of the various states), (ii) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, (x) to which the Company or any of its
subsidiaries is a party or (y) by which the Company or any of its subsidiaries
or their respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over the Company, any of
its subsidiaries or their respective property, (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien under, any 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 or their respective property is
bound, or (v) result in the termination, suspension or revocation of any
Authorization (as defined below) of the Company or any of its subsidiaries or
result in any other impairment of the rights of the holder of any such
Authorization.
(p) The Company and its subsidiaries have, and immediately after
the consummation of the Acquisitions will have, good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
subsidiaries, in each case free and clear of all Liens and defects, except such
as are described in the Offering Memorandum 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,
and immediately after the consummation of the Acquisitions will be, 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, in each case except
as described in the Offering Memorandum.
(q) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is, and immediately
after the consummation of the Acquisitions will be, or could be a party or to
which any of their respective property is or could be subject, which might
result, singly or in the aggregate, in a Material Adverse Effect.
(r) All material tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(s) All indebtedness of the Company and the Guarantors that will
be repaid with the proceeds of the issuance and sale of the Series A Notes was
incurred, and the indebtedness represented by the Series A Notes is being
incurred, for proper purposes and in good
-15-
faith and each of the Company and the Guarantors was, at the time of the
incurrence of such indebtedness that will be repaid with the proceeds of the
issuance and sale of the Series A Notes, and will be on the Closing Date (after
giving effect to the application of the proceeds from the issuance of the Series
A Notes) solvent, and had at the time of the incurrence of such indebtedness
that will be repaid with the proceeds of the issuance and sale of the Series A
Notes and will have on the Closing Date (after giving effect to the application
of the proceeds from the issuance of the Series A Notes) sufficient capital for
carrying on their respective business and were, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance and sale
of the Series A Notes, and will be on the Closing Date (after giving effect to
the application of the proceeds from the issuance of the Series A Notes) able to
pay their respective debts as they mature.
(t) Neither the Company nor any of its subsidiaries has, and
immediately after the consummation of the Acquisitions will have, violated any
foreign, federal, state or local law or regulation relating to the protection of
human health, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any
provisions of the Foreign Corrupt Practices Act or the rules and regulations
promulgated thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect.
(u) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(v) Each of the Company and its subsidiaries has, and immediately
after the consummation of the Acquisitions will have, such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is, and immediately after the consummation of the Acquisitions
will be, valid and in full force and effect and each of the Company and its
subsidiaries is, and immediately after the consummation of the Acquisitions will
be, in compliance with all the terms and conditions thereof and with the rules
and regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both,
-16-
would result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries; except where such failure
to be valid and in full force and effect or to be in compliance, the occurrence
of any such event or the presence of any such restriction would not, singly or
in the aggregate, have a Material Adverse Effect.
(w) The accountants, Deloitte & Touche LLP, Coopers & Lybrand
L.L.P. and KPMG Peat Marwick LLP, that have certified the financial statements
and supporting schedules included in the Preliminary Offering Memorandum and the
Offering Memorandum are independent public accountants with respect to the
Company and the Guarantors, as required by the Act and the Exchange Act. The
historical financial statements, together with related schedules and notes, set
forth in the Preliminary Offering Memorandum and the Offering Memorandum comply
as to form in all material respects with the requirements applicable to
registration statements on Form S-1 under the Act.
(x) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the (i) Company and
its subsidiaries, (ii) the Landmark Theatre Group and (iii) StarTime Cinema,
Inc. and subsidiaries, as the case may be, on the basis stated in the Offering
Memorandum at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the Offering
Memorandum (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of (i) the Company, (ii) the
Landmark Theatre Group and (iii) StarTime Cinema, Inc. and subsidiaries, as the
case may be.
(y) The pro forma financial statements (including the notes
thereto) (which shall exclude the adjusted pro forma financial information
discussed below) included in the Preliminary Offering Memorandum and the
Offering Memorandum have been prepared on a basis consistent with the historical
financial statements of the Company and its subsidiaries and give effect to
assumptions used in the preparation thereof on a reasonable basis and in good
faith and present fairly the historical and proposed transactions contemplated
by the Preliminary Offering Memorandum and the Offering Memorandum; and such pro
forma financial statements (i) comply as to form in all material respects with
the applicable requirements of Regulation S-X promulgated under the Exchange
Act, (ii) have been prepared in all material respects in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
included in registration statements on Form S-1 under the Act, and (iii) have
been properly computed on the bases described therein. The other pro forma
financial and statistical information and data included in the
-17-
Offering Memorandum, including, without limitation, the adjusted pro forma
financial information (including the notes thereto), are, in all material
respects, accurately presented and prepared on a basis consistent with the pro
forma financial statements. The pro forma financial statements and other pro
forma financial information, including without limitation the adjusted pro forma
financial information (including the notes thereto), included in the Preliminary
Offering Memorandum and the Offering Memorandum give effect to assumptions used
in the preparation thereof on a reasonable basis and in good faith and are
appropriate to give effect to the transactions or circumstances referred to
therein.
(z) The Company is not and, after giving effect to the offering
and sale of the Series A Notes and the application of the net proceeds thereof
as described in the Offering Memorandum, will not be, an "investment company,"
as such term is defined in the Investment Company Act of 1940, as amended.
(aa) Except as described in the Offering Memorandum, there are no
contracts, agreements or understandings between the Company or any Guarantor and
any person granting such person the right to require the Company or such
Guarantor to file a registration statement under the Act with respect to any
securities of the Company or such Guarantor or to require the Company or such
Guarantor to include such securities with the Notes and Subsidiary Guarantees
registered pursuant to any Registration Statement.
(bb) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Series A Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R.
Part 224) of the Board of Governors of the Federal Reserve System.
(cc) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company or any Guarantor that it is considering
imposing) any condition (financial or otherwise) on the Company's or any
Guarantor's retaining any rating assigned to the Company or any Guarantor, any
securities of the Company or any Guarantor or (ii) has indicated to the Company
or any Guarantor that it is considering (a) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company, any Guarantor or any securities of
the Company or any Guarantor.
(dd) Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
and both before and after giving effect to the Acquisitions (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the
-18-
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(ee) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.
(ff) When the Series A Notes and the Subsidiary Guarantees are
issued and delivered pursuant to this Agreement, neither the Series A Notes nor
the Subsidiary Guarantees will be of the same class (within the meaning of Rule
144A under the Act) as any security of the Company or the Guarantors that is
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated inter-dealer
quotation system.
(gg) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company, the Guarantors
or any of their respective representatives (other than the Initial Purchasers,
as to whom the Company and the Guarantors make no representation) in connection
with the offer and sale of the Series A Notes contemplated hereby, including,
but not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the
Series A Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(hh) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(ii) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf (other than
the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("Regulation S") with respect
to the Series A Notes or the Subsidiary Guarantees.
(jj) The Series A Notes offered and sold in reliance on
Regulation S have been and will be offered and sold only in offshore
transactions.
(kk) The sale of the Series A Notes pursuant to Regulation S is
not part of a plan or scheme to evade the registration provisions of the Act.
-19-
(ll) The Company, its affiliates and all persons acting on its
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the
Series A Notes outside the United States and, in connection therewith, the
Offering Memorandum will contain the disclosure required by Rule 902(h).
(mm) The Series A Notes sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903(c)(3) of the Act and only upon
certification of beneficial ownership of such Series A Notes by non-U.S. persons
or U.S. persons who purchased such Series A Notes in transactions that were
exempt from the registration requirements of the Act.
(nn) No registration under the Act of the Series A Notes or the
Subsidiary Guarantees is required for the sale of the Series A Notes and the
Subsidiary Guarantees to the Initial Purchasers as contemplated hereby or for
the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof.
(oo) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among the Company or any of
its subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its subsidiaries on the other
hand, which would be required by Item 404 of Regulation S-K under the Act to be
described in the Offering Memorandum if the Offering Memorandum were a
prospectus included in a registration statement filed by the Company on Form S-1
filed with the Commission.
(pp) To the knowledge of the Company, no action has been taken
and no law, statute, rule or regulation or order has been enacted, adopted or
issued by any governmental agency or body which prevents the execution, delivery
and performance of any of the Operative Documents or the issuance of the Series
A Notes or suspends the sale of the Series A Notes in any jurisdiction referred
to in Section 5(e); and no injunction, restraining order or other order or
relief of any nature by a federal or state court or other tribunal of competent
jurisdiction has been issued with respect to the Company or any of its
subsidiaries which would prevent or suspend the issuance or sale of the Series A
Notes in any jurisdiction referred to in Section 5(e).
(qq) Each certificate signed by any officer of the Company or any
Guarantor and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
-20-
(rr) The Company has delivered to the Initial Purchasers true and
complete copies of the Landmark Asset Purchase Agreement and the StarTime Asset
Purchase Agreement, including all schedules and exhibits thereto, and there have
been no amendments, supplements, alterations, modifications or waivers thereto
or in the exhibits or schedules thereto, except as have been delivered to the
Initial Purchasers and as are reasonably acceptable to the Initial Purchasers.
The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 9 hereof, counsel to the Company and the Guarantors and counsel to the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of
the Initial Purchasers, severally and not jointly, represents and warrants to
the Company and the Guarantors, and agrees that:
(a) Such Initial Purchaser is a QIB with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (i) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (ii) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A, and (y) in offshore
transactions in reliance upon Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell the
Series A Notes only to, and will solicit offers to buy the Series A Notes only
from (i) Eligible Purchasers that the Initial Purchaser reasonably believes are
QIBs, and (ii) Regulation S Purchasers, in each case, that agree that (x) the
Series A Notes purchased by them may be resold,
-21-
pledged or otherwise transferred within the time period referred to under Rule
144(k) (taking into account the provisions of Rule 144(d) under the Act, if
applicable) under the Act, as in effect on the date of the transfer of such
Series A Notes, only (A) to the Company or any of its subsidiaries, (B) to a
person whom the seller reasonably believes is a QIB purchasing for its own
account or for the account of a QIB in a transaction meeting the requirements of
Rule 144A under the Act, (C) in an offshore transaction (as defined in Rule 902
under the Act) meeting the requirements of Rule 904 of the Act, (D) in a
transaction meeting the requirements of Rule 144 under the Act, (E) in
accordance with another exemption from the registration requirements of the Act
(and based upon an opinion of counsel acceptable to the Company) or (F) pursuant
to an effective registration statement and, in each case, in accordance with the
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (y) they will deliver to each person to whom such
Series A Notes or an interest therein is transferred a notice substantially to
the effect of the foregoing.
(e) None of such Initial Purchaser or any of its affiliates or
any person acting on its or their behalf has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Series A Notes or the Subsidiary Guarantees.
(f) The Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be offered and
sold only in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has not offered or sold
and will not offer or sell the Series A Notes in the United States or to, or for
the benefit or account of, a U.S. Person (other than a distributor), in each
case, as defined in Rule 902 under the Act (i) as part of its distribution at
any time and (ii) otherwise until 40 days after the later of the commencement of
the offering of the Series A Notes pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees that, during
such 40-day restricted period, it will not cause any advertisement with respect
to the Series A Notes (including any "tombstone" advertisement) to be published
in any newspaper or periodical or posted in any public place and will not issue
any circular relating to the Series A Notes, except such advertisements as
permitted by and include the statements required by Regulation S.
(i) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor, dealer or
person receiving a selling concession, fee or other remuneration during the
40-day restricted period referred to in Rule 903(c)(3) under the Act, it will
send to such distributor, dealer or person receiving a selling concession, fee
or other remuneration a confirmation or notice to substantially the following
effect:
-22-
"The Series A Notes covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (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 your 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 under the Securities Act (or Rule 144A), and in connection with
any subsequent sale by you of the Series A Notes covered hereby
in reliance on Regulation S during the period referred to above
to any distributor, dealer or person receiving a selling
concession, fee or other remuneration, you must deliver a notice
to substantially the foregoing effect. Terms used above have the
meanings assigned to them in Regulation S."
(j) Such Initial Purchaser agrees that the Series A Notes offered
and sold in reliance on Regulation S will be represented upon issuance by a
global security that may not be exchanged for definitive securities until the
expiration of the 40-day restricted period referred to in Rule 903(c)(3) of the
Act and only upon certification of beneficial ownership of such Series A Notes
by non-U.S. persons or U.S. persons who purchased such Series A Notes in
transactions that were exempt from the registration requirements of the Act.
(k) Such Initial Purchaser further represents and agrees that (i)
it has not offered or sold and will not offer or sell any Series A Notes to
persons in the United Kingdom prior to the expiration of the period of six
months from the issue date of the Series A Notes, 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 business 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, (ii) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Series A Notes in, from or otherwise
involving the United Kingdom and (iii) 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 Series A Notes to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
(l) Such Initial Purchaser agrees that it will not offer, sell or
deliver any of the Series A Notes 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 Series A Notes in such
jurisdictions. Such Initial Purchaser understands that no action has been taken
to permit a
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public offering in any jurisdiction outside the United States where action would
be required for such purpose.
Each Initial Purchaser acknowledges that the Company and the
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchaser pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and such Initial Purchaser hereby
consents to such reliance.
8. INDEMNIFICATION.
(a) The Company and each Guarantor agree, jointly and severally,
to indemnify and hold harmless the Initial Purchasers, its directors, its
officers and each person, if any, who controls such Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Company or any Guarantor to any holder or
prospective purchaser of Series A Notes pursuant to Section 5(h) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchasers furnished in
writing to the Company by such Initial Purchaser; provided, however, that the
foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser who failed to
deliver a Final Offering Memorandum (as then amended or supplemented, provided
by the Company to the several Initial Purchasers in the requisite quantity and
on a timely basis to permit proper delivery on or prior to the Closing Date) to
the person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Final Offering Memorandum.
(b) Each of the Initial Purchasers, severally and not jointly,
agrees to indemnify and hold harmless the Company and the Guarantors, and their
respective directors and officers and each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the
-24-
Exchange Act) the Company or the Guarantors, to the same extent as the foregoing
indemnity from the Company and the Guarantors to the Initial Purchasers but only
with reference to information relating to the Initial Purchasers furnished in
writing to the Company by the Initial Purchasers expressly for use in the
Preliminary Offering Memorandum or the Offering Memorandum.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Initial Purchasers shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Initial Purchasers). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case
of the parties indemnified pursuant to Section 8(a), and by the Company, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which
-25-
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action 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 the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Initial Purchasers on the
other hand from the offering of the Series A Notes or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand and the Initial Purchasers, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Series A Notes (after underwriting discounts and commissions,
but before deducting expenses) received by the Company, and the total discounts
and commissions received by the Initial Purchasers bear to the total price to
investors of the Series A Notes, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
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 or the
Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Guarantors, and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
8(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 in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Sec-
-26-
tion 8, the Initial Purchasers shall not be required to contribute any amount in
excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Series A Notes purchased by each of the Initial Purchasers
hereunder and not joint.
(e) The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
of the Initial Purchasers to purchase the Series A Notes under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any Guarantor or any securities of the Company or any
Guarantor (including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act, (ii) there shall not have occurred any change, nor shall any notice have
been given of any potential or intended change, in the outlook for any rating of
the Company or any Guarantor or any securities of the Company or any Guarantor
by any such rating organization and (iii) no such rating organization shall have
given notice that it has assigned (or is considering assigning) a lower rating
to the Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change or any
development involving a prospec-
-27-
tive change in the capital stock or in the long-term debt of the Company or any
of its subsidiaries and (iii) neither the Company nor any of its subsidiaries
shall have incurred any liability or obligation, direct or contingent, the
effect of which, in any such case described in clause 9(c)(i), 9(c)(ii) or
9(c)(iii), in your judgment, is material and adverse and, in your judgment,
makes it impracticable to market the Series A Notes on the terms and in the
manner contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by the President and the Chief Financial Officer
(or if there is no Chief Financial Officer, the Treasurer) of the Company and
each of the Guarantors, confirming the matters set forth in Sections 6(dd), 9(a)
and 9(b) and stating that each of the Company and the Guarantors has complied
with all the agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Latham & Watkins, counsel for the Company and the Guarantors, to the
effect that:
(i) each of the Company and each Guarantor has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority to carry on its business
as described in the Offering Memorandum and to own, lease and
operate its properties;
(ii) except as described in the Offering Memorandum, and
except for the security interests granted pursuant to the
Existing Credit Facility, all of the outstanding shares of
capital stock of each of the Company's subsidiaries are owned
directly or indirectly by the Company, free and clear of all
perfected first priority security interests and, to the best of
such counsel's knowledge, free and clear of all other liens,
encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Securities Act
and the securities or "Blue Sky" laws of certain jurisdictions)
or voting;
(iii) the Series A Notes have been duly authorized and,
when executed and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will
be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in
accordance with their terms except as the enforceability thereof
may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar
laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors, including without limitation
the effect on the Subsidiary Guarantees of Section 548 of the
Federal
-28-
Bankruptcy Code and comparable provisions of state law; (ii) the
effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or law, and the discretion
of the court before which any proceeding therefor may be
brought, (iii) the unenforceability under certain circumstances
under law or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary
to public policy ((i), (ii), and (iii) are collectively referred
to as the "Enforceability Limitations");
(iv) the Subsidiary Guarantees have been duly authorized
and, when the Series A Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered to
and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, the Subsidiary Guarantees endorsed
thereon will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Guarantors,
enforceable in accordance with their terms except as the
enforceability thereof may be limited by the Enforceability
Limitations;
(v) the Indenture has been duly authorized, executed and
delivered by the Company and each Guarantor and is a valid and
binding agreement of the Company and each Guarantor, enforceable
against the Company and each Guarantor in accordance with its
terms except as the enforceability thereof may be limited by the
Enforceability Limitations;
(vi) this Agreement has been duly authorized, executed
and delivered by the Company and the Guarantors;
(vii) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the
Guarantors and is a valid and binding agreement of the Company
and each Guarantor, enforceable against the Company and each
Guarantor in accordance with its terms, except as the
enforceability thereof may be limited by the Enforceability
Limitations;
(viii) the Series B Senior Subordinated Notes have been
duly authorized;
(ix) the statements under the captions "Risk Factors -
Restrictive Covenants of Revolving Credit Facility; Inability to
Borrow," "Description of Revolving Credit Facility,"
"Description of Notes," and "Exchange Offer; Registration
Rights" in the Offering Memorandum, insofar as such statements
constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present in all material
respects such legal matters, documents and proceedings;
-29-
(x) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Company and
each of the Guarantors, the compliance by the Company and each
of the Guarantors with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby
will not (i) to the knowledge of such counsel, require any
consent, approval, authorization or order of, or filing with,
any federal or New York court or governmental agency or body
(except such as may be required under the securities or Blue Sky
laws of the various states in connection with the purchase and
distribution of the Series A Notes by the Initial Purchases (as
to which such counsel need express no opinion), as may be
required in connection with the performance of the Registration
Rights Agreement and except as have previously been obtained),
(ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or
their respective property is bound, (iii) violate or conflict
with or any federal or New York statute, judgment, decree,
order, rule or regulation known to such counsel to be applicable
to such entity or any of its respective properties or assets
except for such violations or conflicts which could not
reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect, (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien
under, any 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 or their respective property is bound, or (v)
result in the termination, suspension or revocation of any
Authorization (as defined above) of the Company or any of its
subsidiaries or result in any other impairment of the rights of
the holder of any such Authorization;
(xi) to the best of such counsel's knowledge, such
counsel does not know of any legal or governmental proceedings
pending or threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their
respective property is or could be subject, which might result,
singly or in the aggregate, in a Material Adverse Effect;
(xii) none of the Company or the Guarantors is, or
immediately after the sale of the Series A Notes to be sold
hereunder and the application of the proceeds from such sale (as
described in the Offering Memorandum under the caption "Use of
Proceeds") will be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
-30-
(xiii) except as set forth in the Offering Memorandum,
to the best of such counsel's knowledge, no holder of securities
(other than Notes) of the Company or any Guarantor is entitled
to have such securities registered under a registration
statement filed by the Company and the Guarantors pursuant to
the Registration Rights Agreement;
(xiv) the Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which
is qualified thereunder. It is not necessary in connection with
the offer, sale and delivery of the Series A Notes to the
Initial Purchaser in the manner contemplated by this Agreement
or in connection with the Exempt Resales to qualify the
Indenture under the TIA;
(xv) no registration under the Act of the Series A Notes
is required for the sale of the Series A Notes to the Initial
Purchasers as contemplated by this Agreement or for the Exempt
Resales assuming that (i) each Initial Purchaser is a QIB, or a
Regulation S Purchaser, (ii) the accuracy of, and compliance
with, the Initial Purchasers' representations and agreements
contained in Section 7 of this Agreement, (iii) the accuracy of
the representations of the Company and the Guarantors set forth
in Sections 5(h) and 6(gg), (ii), (jj), (kk) and (ll) of this
Agreement; and
(xvi) no facts have come to such counsel's attention
that caused such counsel to believe that the Offering
Memorandum, as of the date of the Offering Memorandum and as of
the Closing Date, contained an untrue statement of material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; it
being understood that such counsel need express no belief with
respect to the financial statements, schedules or other
financial or statistical data included in the Offering
Memorandum.
The opinion of Latham & Watkins described in Section 9(e) above
shall be rendered to you at the request of the Company and the Guarantors and
shall so state therein. In giving such opinion with respect to the matters
covered by Section 9(e)(xvi),Latham & Watkins may state that their opinion and
belief are based upon their participation in the preparation of the Offering
Memorandum and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or verification
except as specified.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of Cahill Gordon & Reindel, counsel for
the Initial Purchasers, in form and substance reasonably satisfactory to the
Initial Purchasers.
-31-
(g) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof or
the Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers from Deloitte & Touche LLP, Coopers & Lybrand L.L.P. and KPMG
Peat Marwick, LLP, independent public accountants, containing the information
and statements of the type ordinarily included in accountants' "comfort letters"
to the Initial Purchasers with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(h) The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
(i) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(j) The Company and the Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.
(k) Neither the Company nor the Guarantors shall have failed at
or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company or
the Guarantors, as the case may be, at or prior to the Closing Date.
(l) Each condition to the closing of the Acquisitions
contemplated by the Landmark Asset Purchase Agreement and the StarTime Asset
Purchase Agreement shall have been satisfied or waived. There shall exist at and
as of the Closing Date no conditions that would constitute a default (or an
event that with notice or the lapse of time, or both, would constitute a
default) under either the Landmark Asset Purchase Agreement or the StarTime
Asset Purchase Agreement. On the Closing Date, the Acquisitions shall have been
consummated on terms that conform in all material respects to the description
thereof in the Offering Memorandum and the Initial Purchasers shall have
received evidence satisfactory to the Initial Purchasers of the consummation
thereof other than the payment for the assets with the net proceeds from the
issuance and sale of the Series A Notes.
(m) The net proceeds from the issuance and sale of the Series A
Notes shall have been applied as set forth under the caption "Use of Proceeds"
in the Offering Memorandum.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
-32-
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company or any Guarantor on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Series A Notes which it or they have agreed
to purchase hereunder on such date and the aggregate principal amount of the
Series A Notes which such defaulting Initial Purchaser or Initial Purchasers, as
the case may be, agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of the Series A Notes to be
purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the principal
amount of the Series A Notes set forth opposite its name in Schedule B bears to
the aggregate principal amount of the Series A Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the Series A Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of the Series A Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of the Series A Notes without the written consent of such
Initial Purchaser. If on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase the Series A Notes and the aggregate
principal amount of the Series A Notes with respect to which such default occurs
is more than one-tenth of the aggregate principal amount of the Series A Notes
to be purchased by all Initial Purchasers and arrangements satisfactory to the
Initial Purchasers and the Company for purchase of such the Series A Notes are
not made within
-33-
48 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Initial Purchaser and the Company. In any such
case which does not result in termination of this Agreement, either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Offering Memorandum or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of any such Initial Purchaser
under this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or any
Guarantor, to 4004 Beltline Road, Suite 205, Lockbox 18, Dallas, Texas 75244,
Attention: Steve Holmes and (ii) if to the Initial Purchasers, c/o Donaldson,
Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York
10172, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Guarantors
and the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Series A Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Company, any Guarantor, the officers or
directors of the Company or any Guarantor, or any person controlling the Company
or any Guarantor, (ii) acceptance of the Series A Notes and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Series A Notes are not delivered by or on
behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Company and each
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the Company
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Company and each Guarantor also agree, jointly and severally,
to reimburse the Initial Purchasers and its officers, directors and each person,
if any, who controls such Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act for any and all fees and expenses
(including without limitation the fees and expenses of counsel) incurred by them
in connection with enforcing their rights under this Agreement (including
without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, the di-
-34-
rectors of the Company and the Guarantors and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include a purchaser of any of the Series
A Notes from the Initial Purchaser merely because of such purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
-35-
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
SILVER CINEMAS INTERNATIONAL, INC.
By:_____________________________
Name: Steven Holmes
Title: Chief Executive Officer
SILVER CINEMAS, INC.
By:_____________________________
Name: Steven Holmes
Title: Chief Executive Officer
SCI ACQUISITION CORP.
By:_____________________________
Name: Steven Holmes
Title: Chief Executive Officer
LANDMARK THEATRE CORP.
By:_____________________________
Name: Steven Holmes
Title: Chief Executive Officer
-36-
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:_____________________________
Name:
Title:
BT ALEX. BROWN INCORPORATED
By:_____________________________
Name:
Title:
BEAR, STEARNS & CO. INC.
By:_____________________________
Name:
Title:
SCHEDULE A
GUARANTORS
Silver Cinemas, Inc. (Delaware)
SCI Acquisition Corp. (Delaware)
Landmark Theatre Corp. (Delaware)
SCHEDULE B
[Download Table]
Initial Purchaser
----------------- Principal Amount
of Notes
---------------
Donaldson, Lufkin & Jenrette
Securities Corporation..................................... $ 50,000,000
BT Alex. Brown Incorporated.................................. $ 40,000,000
Bear Stearns & Co. Inc....................................... $ 10,000,000
Total........................................................ $100,000,000
============
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
Dates Referenced Herein
| Referenced-On Page |
---|
This ‘S-4’ Filing | | Date | | First | | Last | | | Other Filings |
---|
| | |
| | 6/16/98 | | | | | | | None on these Dates |
Filed on: | | 6/15/98 |
| | 4/16/98 | | 6 |
| | 4/9/98 | | 1 | | 3 |
| | 3/27/98 | | 3 |
| | 1/22/98 | | 3 |
| | 12/17/97 | | 2 |
| List all Filings |
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