SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 3)
Under the Securities Exchange Act of 1934
Toy Biz, Inc.
(Name of Issuer)
Class A Common Stock, par value $.01 per share
(Title of Class and Securities)
892261108
(CUSIP Number of Class of Securities)
Barry F. Schwartz
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, NY 10021
Telephone: (212) 572-8600
_____________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Alan C. Myers
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
December 27, 1996
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the
subject of this Statement because of Rule 13d-1(b)(3) or
(4), check the following: ( )
Check the following box if a fee is being paid with this
Statement: ( )
SCHEDULE 13D
CUSIP No. 892261108
_________________________________________________________________
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Andrews Group Incorporated
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) (x)
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
OO
_________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
__________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_________________________________________________________________
(7) SOLE VOTING POWER
NUMBER OF 13,656,000
SHARES ___________________________________
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 7,394,000
EACH ___________________________________
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 13,656,000
WITH ___________________________________
(10) SHARED DISPOSITIVE POWER
7,394,000
_________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,050,000
_________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
75.9%
_________________________________________________________________
(14) TYPE OF REPORTING PERSON
CO
_________________________________________________________________
SCHEDULE 13D
CUSIP No. 892261108
_________________________________________________________________
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Mafco Holdings Inc.
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) (x)
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
OO
_________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
__________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_________________________________________________________________
(7) SOLE VOTING POWER
NUMBER OF 13,656,000
SHARES ___________________________________
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 7,394,000
EACH ___________________________________
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 13,656,000
WITH ___________________________________
(10) SHARED DISPOSITIVE POWER
7,394,000
_________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,050,000
_________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES
( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
75.9%
_________________________________________________________________
(14) TYPE OF REPORTING PERSON
CO
_________________________________________________________________
This statement amends and supplements the Schedule 13D dated
October 25, 1996, relating to the Class A common stock, par value $.01 per
share (the "Class A Common Stock"), of Toy Biz, Inc. ("Toy Biz"), as
originally filed with the Securities and Exchange Commission by Andrews
Group Incorporated ("Andrews Group") and Mafco Holdings Inc. ("Mafco" and
together with Andrews Group, the "Reporting Persons"), as amended by
Amendment No. 1, dated November 22, 1996, filed with the Securities and
Exchange Commission by Andrews Group and Mafco, and as amended by Amendment
No. 2, dated December 17, 1996, filed with the Securities and Exchange
Commission by Andrews Group and Mafco. Except as reported herein, there
has been no change in the information previously reported in this Schedule
13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Andrews Group has entered into an agreement (the "Merger
Agreement") with Toy Biz, dated as of December 27, 1996, under which a
subsidiary of Andrews Group (the "Purchaser") will acquire all shares of
Class A Common Stock held by the Toy Biz public stockholders at a price of
$22.50 per share. The purchase price for the shares of Class A Common Stock
will be paid from cash available at the time of the closing, and if and to
the extent necessary, from borrowings.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a-b) Pursuant to the Merger Agreement, the Purchaser will
acquire all shares of Class A Common Stock held by the Toy Biz public
stockholders at a price of $22.50 per share. Andrews Group's obligation to
consummate the Merger is subject to a number of significant conditions,
principally that the plan of reorganization (the "Plan") of Marvel
Entertainment Group, Inc. ("Marvel") filed on December 27, 1996 with the
United States Bankruptcy Court for the District of Delaware, with such
changes as Andrews Group shall approve, is confirmed. As part of the Plan,
Andrews Group would acquire from Marvel for $365 million in cash or Class A
Common Stock, or a combination thereof, newly issued shares of common
stock, par value $.01 per share, of Marvel (the "Marvel Common Stock") (or
its equivalent), representing 80.8% of the outstanding shares of Marvel
Common Stock (or its equivalent) after giving effect to the acquisition.
If the Plan is confirmed, it is contemplated that Andrews Group would
assign its rights and obligations under the Merger Agreement to Marvel and
that Toy Biz would become a wholly owned subsidiary of Marvel.
(c) Not applicable.
(d) The Merger Agreement provides that the Board of Directors of
the surviving corporation will be the Board of Directors of the Purchaser.
(e) Not applicable.
(f) Not applicable.
(g) The Merger Agreement provides that the Certificate of
Incorporation and By-Laws of Toy Biz will be amended and restated following
the Merger.
(h) The Class A Common Stock is expected to be delisted from The
New York Stock Exchange upon the acquisition of Class A Common Stock
pursuant to the Merger Agreement.
(i) The Class A Common Stock will be eligible for termination of
registration pursuant to Rule 12(g)(4) of the Securities Exchange Act of
1934, as amended, upon the acquisition of Class A common Stock pursuant to
the Merger Agreement.
(j) Not applicable.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) As of December 27, 1996, Toy Biz had 20,348,794
outstanding shares of Class A Common Stock and 7,394,000 outstanding shares
of Class B common stock, par value $.01 per share, (the "Class B Common
Stock") of Toy Biz. The shares of Class B Common Stock are convertible at
the option of their holder, Marvel, into an equal number of shares of Class
A Common Stock. Andrews Group has entered into an agreement, dated as of
November 20, 1996, with each of Isaac Perlmutter and Avi Arad pursuant to
which Andrews Group will acquire 13,656,000 shares of Class A Common Stock.
As a result of the Merger Agreement described in Item 4, following the
Merger the Reporting Persons will beneficially own 100.00% of the Class A
Common Stock which would be outstanding upon the conversion of the Class B
Common Stock.
Except as set forth above, the Reporting Persons do not
beneficially own any Class A Common Stock.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
Exhibit A Press release by Andrews Group Incorporated and Toy Biz Toy Biz,
Inc., dated December 27, 1996.
Exhibit B Agreement and Plan of Merger, dated as of December 27, 1996, by
and among Andrews Group Incorporated, Andrews Acquisition Corp.,
and Toy Biz, Inc.,
Exhibit C Stock Purchase Agreement, dated as of December 27, 1996, by and
between Andrews Group Incorporated and Marvel Entertainment
Group, Inc.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: December 30, 1996
ANDREWS GROUP INCORPORATED
MAFCO HOLDINGS INC.
By: /s/ Barry F. Schwartz
Name: Barry F. Schwartz
Title: Executive Vice President and
General Counsel
Exhibit Index
Exhibit A Press release by Andrews Group Incorporated and Toy Biz, Inc.,
dated December 27, 1996
Exhibit B Agreement and Plan of Merger, dated as of December 27, 1996, by
and among Andrews Group Incorporated, Andrews Acquisition Corp.
and Toy Biz, Inc.
Exhibit C Stock Purchase Agreement, dated as of December 27, 1996, by and
between Andrews Group Incorporated and Marvel Entertainment
Group, Inc.
Andrews Group in Definitive Agreement to Acquire Toy Biz
at $22.50 Per Share
New York, New York December 27, 1996 -- Andrews Group
Incorporated and Toy Biz, Inc. (NYSE:TBZ) announced today
that they have entered into a definitive merger agreement
under which Andrews Group will acquire all shares of
Class A common stock held by the Toy Biz public stock-
holders at a price of $22.50 per share. The transaction
has been unanimously approved by the boards of directors
of both companies. The Toy Biz board of directors, upon
the recommendation of a special committee of directors
not affiliated with Andrews Group, has determined that
the merger is fair and in the best interests of the
public holders of the Class A common stock.
As previously announced, on November 20, 1996 Andrews
Group entered into stock purchase agreements with Isaac
Perlmutter and Avi Arad, the holders of approximately 67%
of the Toy Biz Class A common stock, to acquire their
shares for a combination of cash and Andrews Group debt
valued at about $17 per share.
Andrews Group's obligation to consummate the merger is
subject to a number of significant conditions, principal-
ly that the Plan of Reorganization filed today by Marvel
Entertainment Group, Inc. (NYSE:MRV) with the United
States Bankruptcy Court for the District of Delaware,
with such changes as Andrews Group shall approve, being
confirmed. As part of Marvel's Plan of Reorganization,
Andrews Group would acquire from Marvel for $365 million
in cash or Toy Biz Class A common stock, or a combination
of the foregoing, newly issued shares of Marvel common
stock representing 80.8% of the outstanding shares of
Marvel common stock after giving effect to the acquisi-
tion. If the Plan of Reorganization is confirmed, it is
contemplated that Andrews Group would assign its rights
and obligations under the Toy Biz merger agreement to
Marvel and that Toy Biz would become a wholly owned
subsidiary of Marvel.
Toy Biz, Inc. designs, markets and distributes toys in
the boys, girls, preschool, activity and electronic toy
categories featuring major entertainment and consumer
brand name properties.
Andrews Group Incorporated is a subsidiary of MacAndrews
& Forbes Holdings Inc., a diversified holding company
with interests in consumer products, entertainment,
publishing and financial services.
__________________________________________________
AGREEMENT AND PLAN OF MERGER
by and among
ANDREWS GROUP INCORPORATED,
ANDREWS ACQUISITION CORP.
and
TOY BIZ, INC.
dated as of
December 27, 1996
__________________________________________________
Index of Defined Terms
Defined Term Section No.
Acquisition Proposal . . . . . . . . . . . 5.3
affiliate . . . . . . . . . . . . . . . . . 8.5
Agreement . . . . . . . . . . . . . . . . . Recitals
Arad . . . . . . . . . . . . . . . . . . . 1.6
Certificates . . . . . . . . . . . . . . . 2.2(b)
Class A Shares . . . . . . . . . . . . . . 2.1
Class B Shares . . . . . . . . . . . . . . 2.1
Closing . . . . . . . . . . . . . . . . . . 1.2
Closing Date . . . . . . . . . . . . . . . 1.2
Common Certificates . . . . . . . . . . . . 2.2(b)
Company . . . . . . . . . . . . . . . . . . Recitals
Company SEC Documents . . . . . . . . . . . 3.5
DGCL . . . . . . . . . . . . . . . . . . . 1.1
Dissenting Stockholders . . . . . . . . . . 2.1(c)
D&O Insurance . . . . . . . . . . . . . . . 5.8(b)
Effective Time . . . . . . . . . . . . . . 1.3
Employee Option . . . . . . . . . . . . . . 2.4(a)
Exchange Act . . . . . . . . . . . . . . . 1.7(a)
Governmental Entity . . . . . . . . . . . . 3.4
Indemnified Party . . . . . . . . . . . . . 5.8(a)
Marvel . . . . . . . . . . . . . . . . . . 3.2(c)
Merger . . . . . . . . . . . . . . . . . . 1.1
Merger Consideration . . . . . . . . . . . 2.1(c)
Parent . . . . . . . . . . . . . . . . . . Recitals
Paying Agent . . . . . . . . . . . . . . . 2.2(a)
Perlmutter Group . . . . . . . . . . . . . 1.6
Preferred Certificates . . . . . . . . . . 2.2(b)
Preferred Merger Consideration . . . . . . 2.1(d)
Preferred Shares . . . . . . . . . . . . . 2.1
Preferred Stock . . . . . . . . . . . . . . 3.2(a)
Proxy Statement . . . . . . . . . . . . . . 1.7(a)
Purchaser . . . . . . . . . . . . . . . . . Recitals
Purchaser Common Stock . . . . . . . . . . 2.1
Qualifying Offer . . . . . . . . . . . . . 5.9(b)
SEC . . . . . . . . . . . . . . . . . . . . 1.7(a)
Secretary of State . . . . . . . . . . . . 1.3
Securities Act . . . . . . . . . . . . . . 3.5
Shares . . . . . . . . . . . . . . . . . . 2.1
Special Committee . . . . . . . . . . . . . 1.6
Special Meeting . . . . . . . . . . . . . . 1.7(a)
Stock Option Plan . . . . . . . . . . . . . 2.4(a)
Stock Purchase Agreements . . . . . . . . . 1.6
Subsidiary . . . . . . . . . . . . . . . . 3.1
Surviving Corporation . . . . . . . . . . . 1.1
Voting Debt . . . . . . . . . . . . . . . . 3.2(a)
TABLE OF CONTENTS
ARTICLE I THE MERGER . . . . . . . . . . . . . . . 1
Section 1.1 The Merger . . . . . . . . . . . . . 1
Section 1.2 Closing . . . . . . . . . . . . . . . 2
Section 1.3 Effective Time . . . . . . . . . . . 2
Section 1.4 Certificate of Incorporation and By-
Laws . . . . . . . . . . . . . . . 2
Section 1.5 Directors and Officers of the Surviv
ing Corporation . . . . . . . . . . . . 2
Section 1.6 Company Actions . . . . . . . . . . . 3
Section 1.7 Stockholders' Meeting and Proxy
Statement . . . . . . . . . . . . . 3
ARTICLE II CONVERSION OF SECURITIES . . . . . . . . 5
Section 2.1 Conversion of Capital Stock . . . . . 5
Section 2.2 Exchange of Certificates . . . . . . 6
Section 2.3 Dissenters' Rights . . . . . . . . . 8
Section 2.4 Company Plans . . . . . . . . . . . . 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
COMPANY . . . . . . . . . . . . . . . . 9
Section 3.1 Organization . . . . . . . . . . . . 9
Section 3.2 Capitalization . . . . . . . . . . . 10
Section 3.3 Authorization; Validity of Agreement;
Company Action . . . . . . . . . . 12
Section 3.4 Consents and Approvals; No
Violations . . . . . . . . . . . . 12
Section 3.5 SEC Reports and Financial Statements 13
Section 3.6 Information in Proxy Statement . . . 13
Section 3.7 Vote Required . . . . . . . . . . . . 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
AND THE PURCHASER . . . . . . . . . . . 14
Section 4.1 Organization . . . . . . . . . . . . 14
Section 4.2 Authorization; Validity of Agreement;
Necessary Action . . . . . . . . . 14
Section 4.3 Consents and Approvals; No Viola
tions . . . . . . . . . . . . . . . . . 15
Section 4.4 Information in Proxy Statement . . . 16
ARTICLE V COVENANTS . . . . . . . . . . . . . . . 16
Section 5.1 Interim Operations of the Company . . 16
Section 5.2 Consents and Approvals . . . . . . . 16
Section 5.3 No Solicitation . . . . . . . . . . . 17
Section 5.4 Brokers or Finders . . . . . . . . . 18
Section 5.5 Additional Agreements . . . . . . . . 19
Section 5.6 Publicity . . . . . . . . . . . . . . 19
Section 5.7 Notification of Certain Matters . . . 19
Section 5.8 Directors' and Officers' Insurance
and Indemnification . . . . . . . . 19
Section 5.9 Assignment; Purchase of Shares. . . . 20
Section 5.10 Stock Purchase Agreements . . . . . . 21
ARTICLE VI CONDITIONS . . . . . . . . . . . . . . . 22
Section 6.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . 22
Section 6.2 Conditions to Parent's and the
Purchaser's Obligations to Effect the
Merger . . . . . . . . . . . . . . 22
Section 6.3 Conditions to Company's Obligations
to Effect the Merger . . . . . . . 23
ARTICLE VII TERMINATION . . . . . . . . . . . . . . 23
Section 7.1 Termination . . . . . . . . . . . . . 23
Section 7.2 Effect of Termination . . . . . . . . 25
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . 25
Section 8.1 Fees and Expenses . . . . . . . . . . 25
Section 8.2 Amendment, Modification and Other
Action. . . . . . . . . . . . . . . 25
Section 8.3 Nonsurvival of Representations and
Warranties . . . . . . . . . . . . 25
Section 8.4 Notices . . . . . . . . . . . . . . . 26
Section 8.5 Interpretation . . . . . . . . . . . 27
Section 8.6 Counterparts . . . . . . . . . . . . 27
Section 8.7 Entire Agreement; No Third Party
Beneficiaries; Rights of Ownership 27
Section 8.8 Severability . . . . . . . . . . . . 28
Section 8.9 Governing Law . . . . . . . . . . . . 28
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agree-
ment"), dated as of December 27, 1996, by and among
Andrews Group Incorporated, a Delaware corporation ("Par-
ent"), Andrews Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Parent (the "Purchas-
er"), and Toy Biz, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Board of Directors of the Company
and the Board of Directors of each of Parent and Purchas-
er have approved, and deem it advisable and in the best
interests of their respective stockholders to consummate,
the acquisition of the Company by Parent and the merger
of Purchaser with and into the Company upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the forego-
ing and the respective representations, warranties,
covenants and agreements set forth herein, the parties
hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and
subject to the conditions of this Agreement and in accor-
dance with the General Corporation Law of the State of
Delaware (the "DGCL"), at the Effective Time (as defined
in Section 1.3), the Company and the Purchaser shall
consummate a merger (the "Merger") pursuant to which (a)
the Purchaser shall be merged with and into the Company
and the separate corporate existence of the Purchaser
shall thereupon cease, (b) the Company shall be the
successor or surviving corporation in the Merger (some-
times hereinafter referred to as the "Surviving Corpora-
tion") and shall continue to be governed by the laws of
the State of Delaware, and (c) all of the rights, privi-
leges, immunities, powers and franchises of the Company
and the Purchaser shall vest in the Surviving Corporation
and all obligations, duties, debts and liabilities of the
Company and the Purchaser shall become the obligations,
duties, debts and liabilities of the Surviving Corpora-
tion.
Section 1.2 Closing. The closing of the
Merger (the "Closing") shall take place at 10:00 a.m. on
a date to be specified by the parties, which shall be no
later than the second business day after satisfaction or
waiver of all of the conditions set forth in Article VI
hereof (the "Closing Date"), at the offices of Skadden,
Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New
York, New York 10022, unless another date or place is
agreed to in writing by the parties hereto.
Section 1.3 Effective Time. As soon as prac-
ticable following the satisfaction or waiver of the
conditions set forth in Article VI hereof, Parent, the
Purchaser and the Company will cause a Certificate of
Merger to be executed and filed on the date of the Clos-
ing (or on such other date as Parent and the Company may
agree) with the Secretary of State of Delaware (the
"Secretary of State") as provided in the DGCL. The
Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Secre-
tary of State or such time as is agreed upon by the
parties and specified in the Certificate of Merger, and
such time is hereinafter referred to as the "Effective
Time."
Section 1.4 Certificate of Incorporation and
By-Laws. At the Effective Time, the Amended and Restat-
ed Certificate of Incorporation of the Company, as amend-
ed, as in effect immediately prior to the Effective Time,
shall be amended as set forth in Exhibit A hereto. The
Amended and Restated Certificate of Incorporation, as so
amended at the Effective Time, shall be the certificate
of incorporation of the Surviving Corporation until
thereafter amended in accordance with applicable law.
The By-Laws of the Company, as in effect immediately
prior to the Effective Time, shall be amended as set
forth in Exhibit B hereto. The by-laws of the Company,
as so amended at the Effective Time, shall be the by-laws
of the Surviving Corporation until thereafter amended in
accordance with applicable law. The Merger shall have
the effects specified in the DGCL.
Section 1.5 Directors and Officers of the
Surviving Corporation. The directors of the Purchaser
and the officers of the Company at the Effective Time
shall, from and after the Effective Time, be the direc-
tors and officers, respectively, of the Surviving Corpo-
ration until their successors shall have been duly elect-
ed or appointed or qualified or until their earlier
death, resignation or removal in accordance with the
Surviving Corporation's certificate of incorporation and
by-laws.
Section 1.6 Company Actions. The Company
hereby approves of and consents to the Merger and repre-
sents that its Board of Directors, at a meeting duly
called and held, has (i) upon the recommendation of its
Special Committee (the "Special Committee"), unanimously
determined that each of the Agreement and the Merger are
fair and in the best interests of the holders of the
Class A Shares (as defined in Section 2.1), other than
Avi Arad ("Arad"), Isaac Perlmutter, Isaac Perlmutter
T.A., a Florida trust, and ZIB Inc., a Delaware corpora-
tion (collectively, the "Perlmutter Group"), whose shares
are to be purchased pursuant to the Stock Purchase Agree-
ment, dated as of November 20, 1996, between Parent and
Arad and the Stock Purchase Agreement, dated as of Novem-
ber 20, 1996, between Parent and the Perlmutter Group
(together, the "Stock Purchase Agreements"), (ii) ap-
proved this Agreement and the transactions contemplated
hereby, including the Merger, and such approval consti-
tutes approval of this Agreement and the transactions
contemplated hereby, including the Merger, and (iii)
resolved to recommend that the stockholders of the Compa-
ny approve and adopt this Agreement and the Merger.
Section 1.7 Stockholders' Meeting and Proxy
Statement.
(a) If required by applicable law in order to
consummate the Merger, the Company shall, in accordance
with applicable law:
(i) duly call, give notice of, convene
and hold a special meeting of its stockholders (the
"Special Meeting") and submit this Agreement and the
Merger to a vote of the Company's stockholders for
their adoption and approval as promptly as possible
following the execution and delivery of this Agree-
ment;
(ii) prepare and file with the Securities
and Exchange Commission (the "SEC"), in accordance
with Regulation 14A and Rule 13e-3 under the Securi-
ties Exchange Act of 1934 (the "Exchange Act"), a
preliminary Proxy Statement (as hereinafter defined)
relating to the Merger and this Agreement and use
its best efforts (x) to obtain and furnish the
information required to be included by the SEC in
the Proxy Statement and, after consultation with
Parent, to respond promptly to any comments made by
the SEC with respect to the preliminary Proxy State-
ment, provided that no amendment or supplement
thereto will be made by the Company without consul-
tation with Parent and its counsel, (y) cause a
letter to stockholders, notice of meeting, defini-
tive Proxy Statement, including any amendment or
supplement thereto, and form of proxy (collectively,
the "Proxy Statement") to be mailed to its stock-
holders in connection with the Merger and (z) to
obtain the necessary approvals of the Merger and
this Agreement by its stockholders;
(iii) subject to the fiduciary obliga-
tions of the Board of Directors under applicable law
as advised by independent counsel, include in the
Proxy Statement its recommendation that the stock-
holders of the Company vote in favor of the approval
of the Merger and the adoption of this Agreement;
and
(iv) include in the Proxy Statement the
written opinion of Wasserstein Perella & Co. that
the Merger Consideration (as defined in Section
2.1(c)) is fair to the holders of the Class A Shares
(other than Arad and the Perlmutter Group) from a
financial point of view.
(b) Parent shall furnish to the Company written
information concerning itself and Purchaser expressly for
inclusion in the Proxy Statement.
(c) Parent shall vote, or cause to be voted,
all of the capital stock of the Company then owned by it,
the Purchaser or any of its other affiliates in favor of
the approval of the Merger and the adoption of this
Agreement.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As
of the Effective Time, by virtue of the Merger and with-
out any action on the part of Parent, Purchaser, the
Company or the holders of any shares of Class A common
stock, par value $.01 per share (the "Class A Shares"),
or Class B common stock, par value $.01 per share, of the
Company (the "Class B Shares" and, collectively with the
Class A Shares, the "Shares"), or the holders of any
shares of Series A Preferred Stock (the "Preferred
Shares") of the Company, or holders of common stock, par
value $1.00 per share, of the Purchaser (the "Purchaser
Common Stock")
(a) Purchaser Common Stock. Each issued and
outstanding share of the Purchaser Common Stock shall be
converted into and become one fully paid and nonassess-
able share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and
Parent-Owned Stock. All Shares that are owned by the
Company as treasury stock and any Shares or other capital
stock owned by Parent, the Purchaser or any other wholly
owned Subsidiary (as defined in Section 3.1) of Parent
shall be cancelled and retired and shall cease to exist
and no consideration shall be delivered in exchange
therefor.
(c) Exchange of Shares. Each issued and
outstanding Share (other than Shares to be cancelled in
accordance with Section 2.1(b) and any Shares which are
held by stockholders ("Dissenting Stockholders") exercis-
ing appraisal rights pursuant to Section 262 of the DGCL,
which Shares shall be converted into the right, if any,
to receive payment from the Surviving Corporation of the
"fair value" of such Shares as determined in accordance
with Section 262 of the DGCL) shall be converted into the
right to receive $22.50 per Share in cash, payable to the
holder thereof, without interest (the "Merger Consider-
ation"), upon surrender of the certificate formerly
representing such Share in the manner provided in Section
2.2. All such Shares, when so converted, shall no longer
be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a
certificate representing any such Shares shall cease to
have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the sur-
render of such certificate in accordance with Section
2.2.
(d) Exchange of Preferred Shares. Each issued
and outstanding Preferred Share (other than any Preferred
Shares which are held by stockholders who are Dissenting
Stockholders, which Shares shall be converted into the
right, if any, to receive payment from the Surviving
Corporation of the "fair value" of such Preferred Shares
as determined in accordance with Section 262 of the DGCL)
shall be converted into the right to receive an amount
per Preferred Share equal to the then applicable Redemp-
tion Price (as defined and as set forth in the Certifi-
cate of Designation for the Preferred Shares), payable to
the holder thereof, without interest (the "Preferred
Merger Consideration"), upon surrender of the certificate
formerly representing such Preferred Share in the manner
provided in Section 2.2. All such Preferred Shares, when
so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any
such Preferred Shares shall cease to have any rights with
respect thereto, except the right to receive the Pre-
ferred Merger Consideration therefor upon the surrender
of such certificate in accordance with Section 2.2.
Section 2.2 Exchange of Certificates. (a)
Paying Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company to act as agent for the
holders of the Shares and the Preferred Shares in connec-
tion with the Merger (the "Paying Agent") to receive the
funds, as needed, to which holders of the Shares and the
Preferred Shares shall become entitled pursuant to Sec-
tion 2.1(c) and 2.1(d). Such funds shall be invested by
the Paying Agent as directed by Parent or the Surviving
Corporation. All interest earned on such funds shall be
paid to Parent.
(b) Exchange Procedures. As soon as reason-
ably practicable after the Effective Time, the Paying
Agent shall mail to each holder of record of a certifi-
cate or certificates, which immediately prior to the
Effective Time represented outstanding Shares (the "Com-
mon Certificates") or Preferred Shares (the "Preferred
Certificates," and together with the Common Certificates,
the "Certificates"), whose Shares or Preferred Shares
were converted pursuant to Section 2.1 into the right to
receive the Merger Consideration and the Preferred Merger
Consideration, respectively, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying
Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably
specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for payment of
the Merger Consideration or the Preferred Merger Consid-
eration, as the case may be. Upon surrender of a Certif-
icate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to
receive in exchange therefor the Merger Consideration or
the Preferred Merger Consideration for each Share or
Preferred Share formerly represented by such Certificate
and the Certificate so surrendered shall forthwith be
cancelled. If payment of the Merger Consideration or
Preferred Merger Consideration is to be made to a person
other than the person in whose name the surrendered
Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form
for transfer and that the person requesting such payment
shall have paid any transfer and other non-income taxes
required by reason of the payment of the Merger Consider-
ation or Preferred Merger Consideration to a person other
than the registered holder of the Certificate surrendered
or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid
or is not applicable. Until surrendered as contemplated
by this Section 2.2, each Certificate shall be deemed at
any time after the Effective Time to represent only the
right to receive the Merger Consideration or Preferred
Merger Consideration in cash as contemplated by this
Section 2.2.
(c) Transfer Books; No Further Ownership
Rights in the Shares. At the Effective Time, the stock
transfer books of the Company shall be closed and there-
after there shall be no further registration of transfers
of the Shares or the Preferred Shares on the records of
the Company. From and after the Effective Time, the
holders of Certificates evidencing ownership of the
Shares or the Preferred Shares outstanding immediately
prior to the Effective Time shall cease to have any
rights with respect to such Shares or Preferred Shares,
except as otherwise provided for herein or by applicable
law. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this
Article II.
(d) Termination of Fund; No Liability. At any
time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds (including any
interest received with respect thereto) which had been
made available to the Paying Agent and which have not
been disbursed to holders of Certificates, and thereafter
such holders shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat or
other similar laws) only as general creditors thereof
with respect to the Merger Consideration or Preferred
Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwith-
standing the foregoing, neither the Surviving Corporation
nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration or Preferred Merger
Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or similar
law.
Section 2.3 Dissenters' Rights. If any Dis-
senting Stockholder shall be entitled to be paid the
"fair value" of such holder's Shares or Preferred Shares,
as provided in Section 262 of the DGCL, the Company shall
give the Parent notice thereof and the Parent shall have
the right to participate in all negotiations and proceed-
ings with respect to any such demands. Neither the
Company nor the Surviving Corporation shall, except with
the prior written consent of the Parent, voluntarily make
any payment with respect to, or settle or offer to set-
tle, any such demand for payment. If any Dissenting
Stockholder shall fail to perfect or shall have effec-
tively withdrawn or lost the right to dissent, the Shares
held by such Dissenting Stockholder shall thereupon be
treated as though such Shares or Preferred Shares had
been converted into the Merger Consideration or Preferred
Merger Consideration pursuant to Section 2.1.
Section 2.4 Company Plans. (a) With respect to
each outstanding employee stock option to purchase Shares
(an "Employee Option") granted under the Company's 1995
Stock Option Plan (the "Stock Option Plan"), the Company
shall, effective as of immediately prior to the Effective
Time, and subject to the consent, if required, of the
holder of such Employee Option, (i) cause each Employee
Option, whether or not then exercisable or vested, to
become fully exercisable and vested, (ii) cause each
Employee Option that is then outstanding to be cancelled
and (iii) in consideration of such cancellation, pay to
such holder of an Employee Option an amount in respect
thereof equal to the product of (A) the excess, if any,
of the Merger Consideration over the exercise price of
each such Employee Option and (B) the number of Shares
previously subject to the Employee Option immediately
prior to its cancellation (such payment to be net of
withholding taxes).
(b) Except as may be otherwise agreed to by
the Parent or the Purchaser and the Company, the Stock
Option Plan shall terminate as of the Effective Time and
the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest
in respect of the capital stock of the Company or any of
its subsidiaries shall be deleted as of the Effective
Time and no holder of Employee Options or any participant
in the Stock Option Plan or any other plans, programs or
arrangements shall have any right thereunder to acquire
any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent
and the Purchaser as follows:
Section 3.1 Organization. Each of the Company
and its Subsidiary (as defined below) is a corporation
duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation
and has all requisite corporate power and authority and
all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as
now being conducted, except where the failure to be so
organized, existing and in good standing or to have such
power, authority and governmental approvals would not,
individually or in the aggregate, have a material adverse
effect on the Company and its Subsidiary, taken as a
whole. As used in this Agreement, the term "Subsidiary"
shall mean all corporations or other entities in which
the Company or the Parent, as the case may be, owns a
majority of the issued and outstanding capital stock or
similar interests. As used in this Agreement, any refer-
ence to any state of facts, event or effect being materi-
al or having a material adverse effect on or with respect
to any entity (or group of entities taken as a whole)
means such state of facts, event or effect is materially
adverse to the consolidated financial condition, busi-
nesses or results of operations of such entity (or, if
used with respect thereto, of such group of entities
taken as a whole). Each of the Company and its Subsid-
iary is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or
licensing necessary, except where the failure to be so
duly qualified or licensed and in good standing would
not, individually or in the aggregate, have a material
adverse effect on the Company and its Subsidiary, taken
as a whole.
Section 3.2 Capitalization. (a) The autho-
rized capital stock of the Company consists of
100,000,000 Class A Shares, 20,000,000 Class B Shares and
25,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"). As of the date hereof,
(i) 20,348,794 Class A Shares are issued and outstanding
and no Class A Shares are held in the treasury of the
Company, (ii) 7,394,000 Class B Shares are issued and
outstanding and no Class B Shares are held in the trea-
sury of the Company, (iii) 59,091 Preferred Shares are
issued and outstanding, and (iv) 1,321,471 Class A Shares
are reserved for issuance upon exercise of then outstand-
ing Employee Options granted under the Stock Option Plan.
All the outstanding shares of the Company's capital stock
are, and all Class A Shares which may be issued pursuant
to the exercise of outstanding Employee Options will be,
when issued in accordance with the respective terms
thereof, duly authorized, validly issued, fully paid and
non-assessable. There are no bonds, debentures, notes or
other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting
Debt") of the Company or its Subsidiary issued and out-
standing. Except as set forth above, as of the date
hereof, (i) there are no shares of capital stock of the
Company authorized, issued or outstanding and (ii) there
are no existing options, warrants, calls, pre-emptive
rights, subscriptions or other rights, agreements, ar-
rangements or commitments of any character, relating to
the issued or unissued capital stock of the Company or
its Subsidiary, obligating the Company or its Subsidiary
to issue, transfer or sell or cause to be issued, trans-
ferred or sold any shares of capital stock or Voting Debt
of the Company or its Subsidiary or securities convert-
ible into or exchangeable for such shares or equity
interests, or obligating the Company or its Subsidiary to
grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement
or commitment.
(b) All of the outstanding shares of capital
stock of its Subsidiary are beneficially owned by the
Company, directly or indirectly, and all such shares have
been validly issued and are fully paid and nonassessable
and are owned by either the Company free and clear of all
liens, charges, claims or encumbrances.
(c) Except for the Stockholders Agreement,
dated as of March 2, 1995, by and among Arad, the
Perlmutter Group, Marvel Entertainment Group, Inc. ("Mar-
vel") and the Company, the Voting Trust Agreement, dated
as of March 2, 1995, among Marvel, Isaac Perlmutter and
the Company and the Voting Trust Agreement, dated as of
March 2, 1995, among Marvel, Arad and the Company, there
are no voting trusts or other agreements or understand-
ings to which the Company or its Subsidiary is a party
with respect to the voting of the capital stock of the
Company or its Subsidiary.
(d) Neither the Company nor its Subsidiary is
required to redeem, repurchase or otherwise acquire
shares of capital stock of the Company, or its Subsid-
iary, respectively, as a result of the transactions
contemplated by this Agreement.
Section 3.3 Authorization; Validity of
Agreement; Company Action. The Company has full corpo-
rate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by the
Company of this Agreement, and the consummation by it of
the transactions contemplated hereby, have been duly
authorized by the Board of Directors of the Company and,
except for obtaining the approval of its stockholders as
contemplated by Section 3.7 or as otherwise required by
Delaware law, no other corporate action on the part of
the Company is necessary to authorize the execution and
delivery by the Company of this Agreement and the consum-
mation by it of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by
the Company and, assuming due and valid authorization,
execution and delivery hereof by Parent and the Purchas-
er, is a valid and binding obligation of the Company
enforceable against the Company in accordance with its
terms.
Section 3.4 Consents and Approvals; No
Violations. Except for the filings, permits, authoriza-
tions, consents and approvals as may be required under,
and other applicable requirements of, the Exchange Act
and the DGCL, neither the execution, delivery or perfor-
mance of this Agreement by the Company nor the consumma-
tion by the Company of the transactions contemplated
hereby nor compliance by the Company with any of the
provisions hereof will (i) conflict with or result in any
breach of any provision of the certificate of incorpora-
tion or the by-laws of the Company or of its Subsidiary,
(ii) require any filing with, or permit, authorization,
consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental
or regulatory authority or agency (a "Governmental Enti-
ty"), (iii) except as set forth in Section 3.4 of the
Company Disclosure Schedule, result in a violation or
breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceler-
ation) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to
which the Company or its Subsidiary is a party or by
which either of them or any of their properties or assets
may be bound or (iv) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the
Company, its Subsidiary or any of their properties or
assets, excluding from the foregoing clauses (ii), (iii)
and (iv) such violations, breaches or defaults which
would not, individually or in the aggregate, have a
material adverse effect on the Company and its Subsid-
iary, taken as a whole, and which will not materially
impair the ability of the Company to consummate the
transactions contemplated hereby.
Section 3.5 SEC Reports and Financial
Statements. The Company has filed with the SEC, and has
heretofore delivered to Parent, true and complete copies
of, all forms, reports, schedules, statements and other
documents required to be filed by it under the Exchange
Act or the Securities Act of 1933, as amended (the "Secu-
rities Act") (as such documents have been amended since
the time of their filing, collectively, the "Company SEC
Documents"). As of their respective dates or, if amend-
ed, as of the date of the last such amendment, the SEC
Documents (a) did not contain any untrue statement of a
material fact or omit to state a material fact required
to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading and (b) complied in
all material respects with the applicable requirements of
the Exchange Act and the Securities Act, as the case may
be, and the applicable rules and regulations of the SEC
thereunder.
Section 3.6 Information in Proxy Statement.
The Proxy Statement (or any amendment thereof or supple-
ment thereto) will, at the date mailed to Company stock-
holders and at the time of the Special Meeting, not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading, except that no representation is made by the
Company with respect to statements made therein based on
information supplied by Parent or the Purchaser for
inclusion in the Proxy Statement. The Proxy Statement
will comply in all material respects with the provisions
of the Exchange Act and the rules and regulations there-
under, including, without limitation, Regulation 14A and
Rule 13e-3.
Section 3.7 Vote Required. The affirmative
vote of the holders of a majority of the votes represent-
ed by the outstanding Class A Shares and Class B Shares,
voting together as one class, and the affirmative unani-
mous vote of the holders of the outstanding Class B
Shares are the only votes of the holders of any class or
series of the Company's capital stock necessary to ap-
prove this Agreement and the transactions contemplated
hereby, subject to any other vote which may be required
by Delaware law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant
to the Company as follows:
Section 4.1 Organization. Each of Parent and
the Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Delaware
and has all requisite corporate power and authority and
all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as
now being conducted, except where the failure to be so
organized, existing and in good standing or to have such
power, authority and governmental approvals would not,
individually or in the aggregate, have a material adverse
effect on Parent and the Purchaser, taken as a whole.
Each of Parent and the Purchaser is duly qualified or
licensed to do business and in good standing in each
jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by
it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or
licensed and in good standing would not, individually or
in the aggregate, have a material adverse effect on
Parent and its Subsidiaries, taken as a whole.
Section 4.2 Authorization; Validity of
Agreement; Necessary Action. Each of Parent and the
Purchaser has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, deliv-
ery and performance by Parent and the Purchaser of this
Agreement, and the consummation by them of the transac-
tions contemplated hereby, have been duly authorized by
the Boards of Directors of Parent and the Purchaser and
by Parent as the sole stockholder of the Purchaser and no
other corporate action on the part of Parent and the
Purchaser is necessary to authorize the execution and
delivery by Parent and the Purchaser of this Agreement
and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and deliv-
ered by Parent and the Purchaser, and, assuming due and
valid authorization, execution and delivery hereof by the
Company, is a valid and binding obligation of Parent and
the Purchaser, enforceable against them in accordance
with its terms.
Section 4.3 Consents and Approvals; No
Violations. Except for the filings, permits, authoriza-
tions, consents and approvals as may be required under,
and other applicable requirements of, the Exchange Act
and the DGCL, neither the execution, delivery or perfor-
mance of this Agreement by Parent or the Purchaser nor
the consummation by Parent or the Purchaser of the trans-
actions contemplated hereby nor compliance by Parent or
the Purchaser with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of
the respective certificate of incorporation or by-laws of
Parent or the Purchaser, (ii) require any filing with, or
permit, authorization, consent or approval of, any Gov-
ernmental Entity, (iii) result in a violation or breach
of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, license, contract, agreement
or other instrument or obligation to which Parent or the
Purchaser is a party or by which any of them or any of
their respective properties or assets may be bound or
(iv) violate any order, writ, injunction, decree, stat-
ute, rule or regulation applicable to Parent, any of its
Subsidiaries or any of their properties or assets, ex-
cluding from the foregoing clauses (ii), (iii) and (iv)
such violations, breaches or defaults which would not,
individually or in the aggregate, have a material adverse
effect on Parent and its Subsidiaries, taken as a whole
and which will not materially impair the ability of
Parent or the Purchaser to consummate the transactions
contemplated hereby.
Section 4.4 Information in Proxy Statement.
The information supplied by Parent or the Purchaser
specifically for inclusion or incorporation by reference
in the Proxy Statement will, at the date mailed to stock-
holders and at the time of the Special Meeting, not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading. All information supplied by Parent or the
Purchaser specifically for inclusion or incorporation by
reference in the Proxy Statement will comply in all
material respects with the provisions of the Exchange Act
and the rules and regulations thereunder, including,
without limitation, Regulation 14A and Rule 13e-3.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company.
The Company covenants and agrees that, except (i) as
expressly contemplated by this Agreement or (ii) as
agreed in writing by Parent, after the date hereof and
prior to the Effective Time, the business of the Company
and its Subsidiary shall be conducted only in the ordi-
nary and usual course, and, in particular: the Company
will not, directly or indirectly, (i) sell, transfer or
pledge or agree to sell, transfer or pledge any of the
Shares (other than Class A Shares reserved for issuance
on the date hereof pursuant to the exercise of Options
outstanding on the date hereof) Preferred Stock or capi-
tal stock of its Subsidiary beneficially owned by it;
(ii) amend its certificate of incorporation or by-laws;
(iii) split, combine or reclassify the outstanding Shares
or Preferred Shares; (iv) declare, set aside or pay any
dividend or other distribution payable in cash, stock or
property with respect to its capital stock; or (v) redeem
(except pursuant to the Certificate of Designation relat-
ing to the Preferred Shares), purchase or otherwise
acquire directly or indirectly any of its capital stock.
Section 5.2 Consents and Approvals. (a) Upon
the terms and subject to the conditions of this Agree-
ment, each of the parties hereto agrees to use all rea-
sonable efforts to take, or cause to be taken, all ac-
tions, and to do, or cause to be done, all things neces-
sary, proper or advisable under applicable laws and
regulations to consummate and make effective the transac-
tions contemplated by this Agreement as promptly as
practicable including, but not limited to, (i) the prepa-
ration and filing of all forms, registrations and notices
required to be filed to consummate the transactions
contemplated by this Agreement and the taking of such
actions as are necessary to obtain any requisite approv-
als, consents, order, exemptions or waivers by any third
party or Governmental Entity, and (ii) causing the satis-
faction of all conditions to the Closing.
(b) Each of Parent and the Company shall
promptly consult with the other with respect to, provide
any necessary information that is not subject to legal
privilege with respect to, and provide the other (or its
counsel) copies of, all filings made by such party with
any Governmental Entity or any other information supplied
by such party to a Governmental Entity in connection with
this Agreement and the transactions contemplated by this
Agreement. Each of Parent and the Company shall promptly
inform the other of any communication from any Governmen-
tal Entity regarding any of the transactions contemplated
by this Agreement. If such party receives a request from
any such Governmental Entity with respect to the transac-
tions contemplated by this Agreement, then such party
will endeavor in good faith to make, or cause to be made,
as soon as reasonably practicable and after consultation
with the other party, an appropriate response in compli-
ance with such request.
Section 5.3 No Solicitation. Neither the
Company nor its Subsidiary or affiliates shall (and the
Company shall use its best efforts to cause its officers,
directors, employees, representatives and agents, includ-
ing, but not limited to, investment bankers, attorneys
and accountants, not to), directly or indirectly, encour-
age, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group
(other than Parent, any of its affiliates or representa-
tives) concerning any merger, tender offer, exchange
offer, sale of assets, sale of shares of capital stock or
debt securities or similar transactions involving the
Company, its Subsidiary or any division or operating or
principal business unit of the Company (an "Acquisition
Proposal"). Notwithstanding the foregoing, the Company
may furnish information concerning its business, proper-
ties or assets to any corporation, partnership, person or
other entity or group pursuant to appropriate confidenti-
ality agreements, and may negotiate and participate in
discussions and negotiations with such entity or group
concerning an Acquisition Proposal, if the Board of
Directors of the Company concludes in good faith after
consultation with independent legal counsel that the
failure to take such action would present a reasonable
possibility of violating the fiduciary obligations of
such Board under applicable law. Nothing shall prohibit
the Company from taking and disclosing a position with
respect to a tender offer pursuant to Rules 14d-9 and
14e-2 under the Exchange Act or, with respect to any
Acquisition Proposal, from making any other disclosure
required by applicable law. The Company will immediately
communicate to Parent the terms of any Acquisition Pro-
posal or request for information or to negotiate (and
will disclose any written materials received by the
Company in connection therewith) and the identity of the
party making such Acquisition Proposal or request which
it may receive in respect of any such transaction.
Section 5.4 Brokers or Finders. Each of
Parent and the Company represents, as to itself, its
Subsidiaries and its affiliates (other, than in the case
of Parent, the Company, and in the case of the Company,
Parent or any of its affiliates, other than the Company
and its Subsidiary), that no agent, broker, investment
banker, financial advisor or other firm or person is or
will be entitled to any brokers' or finders' fee or any
other commission or similar fee in connection with any of
the transactions contemplated by this Agreement (other
than, in the case of the Company, Wasserstein Perella &
Co., and in the case of the Parent and its affiliates
other than the Company and its Subsidiary, Donaldson,
Lufkin & Jenrette, Bear Stearns & Co. Inc., and CS First
Boston Corporation) and each of Parent and the Company
agrees to indemnify and hold the other harmless from and
against any and all claims, liabilities or obligations
with respect to any other fees, commissions or expenses
asserted by any person on the basis of any act or state-
ment alleged to have been made by such party or its
affiliates.
Section 5.5 Additional Agreements. Subject to
the terms and conditions herein provided, each of the
parties hereto shall use all reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under
applicable laws and regulations, or to remove any injunc-
tions or other impediments or delays, legal or otherwise,
to consummate and make effective the Merger and the other
transactions contemplated by this Agreement. In case at
any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the
Company and Parent shall use all reasonable efforts to
take, or cause to be taken, all such necessary actions.
Section 5.6 Publicity. The initial press
release with respect to the execution of this Agreement
shall be a joint press release acceptable to Parent and
the Company. Thereafter, so long as this Agreement is in
effect, neither the Company, Parent nor any of their
respective affiliates shall issue or cause the publica-
tion of any press release or other announcement with
respect to the Merger, this Agreement or the other trans-
actions contemplated hereby without the prior consulta-
tion of the other party, except as may be required by law
or by any listing agreement with a national securities
exchange or trading market.
Section 5.7 Notification of Certain Matters.
The Company shall give prompt notice to Parent and Parent
shall give prompt notice to the Company, of (i) the
occurrence or non-occurrence of any event the occurrence
or non-occurrence of which would cause any representation
or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the
Effective Time and (ii) any material failure of the
Company or Parent, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be com-
plied with or satisfied by it hereunder; provided, howev-
er, that the delivery of any notice pursuant to this
Section 5.7 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such
notice.
Section 5.8 Directors' and Officers' Insurance
and Indemnification. (a) Parent shall cause the Surviv-
ing Corporation (or any successor to the Surviving Corpo-
ration) to indemnify, defend and hold harmless the pres-
ent and former officers, directors, employees and agents
of the Company and its Subsidiary (each an "Indemnified
Party") against all losses, claims, damages, liabilities,
fees and expenses arising out of actions or omissions
occurring at or prior to the Effective Time to the full
extent permitted under Delaware law, subject to the terms
of the Company's certificate of incorporation and by-
laws, all as in effect at the date hereof.
(b) Parent or the Surviving Corporation shall
maintain the Company's existing officers' and directors'
liability insurance ("D&O Insurance") for a period of not
less than five years after the Effective Time; provided,
that the Parent may substitute therefor policies of
substantially similar coverage and amounts containing
terms no less favorable to such former directors or
officers; provided, further, that in no event shall the
Parent or the Surviving Corporation be required to pay
annual premiums for insurance under this Section in
excess of 150% of the premiums paid by the Company in
1996; and provided further, however, that if the annual
premiums for such insurance coverage exceed such amount
Parent or the Surviving Corporation shall be obligated to
obtain a policy with the greatest coverage available for
a cost not exceeding such amount.
Section 5.9 Assignment; Purchase of Shares.
(a) In the event that the condition set forth
in Section 6.2(c) is satisfied, Parent shall (i) transfer
all the outstanding shares of capital stock of the Pur-
chaser to Marvel and, if necessary, cause Marvel to
authorize the consummation of the transactions contem-
plated hereby as the then sole stockholder of the Pur-
chaser, and (ii) assign its rights, interests and obliga-
tions hereunder to Marvel (it being understood that
Marvel is not an "interested stockholder" for purposes of
Section 203 of the DGCL).
(b) In the event that the condition set forth
in Section 6.2(c) is not satisfied but is waived, Parent,
Purchaser or any of their affiliates (other than Marvel)
shall have the right to offer to purchase all of the
Class A Shares directly from the stockholders of the
Company, provided that (i) such offer shall be for any
and all outstanding Class A Shares, (ii) such offer shall
be for cash in an amount per share not less than the
Merger Consideration, and (iii) such offer shall not
contain any conditions not customary for an offer of this
type (a "Qualifying Offer").
(c) Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by opera-
tion of law or otherwise) without the prior written
consent of the other parties, except (i) as provided in
Section 5.9(a)(ii) or (ii) that Parent may assign, in its
sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect Subsid-
iary of Parent. Upon any such assignment (whether pursu-
ant to Section 5.9(a)(ii) or otherwise), Parent's assign-
ee shall deliver to the Company a writing evidencing its
agreement to perform Parent's covenants hereunder and in
which it makes representations to the Company substan-
tially in the form made by Parent in Article IV. No such
assignment (whether pursuant to Section 5.9(a)(ii) or
otherwise), however, shall relieve Parent of its obliga-
tions under this Agreement.
(d) The parties hereto shall take all reason-
able actions as are necessary, proper or advisable to
give effect to the provisions of this Section 5.9, in-
cluding, without limitation, the execution of an amend-
ment to this Agreement.
Section 5.10 Stock Purchase Agreements. Parent
shall not alter or amend (i) the Stock Purchase Agree-
ments or (ii) the Performance Bonus Agreement between the
Company and Arad, the Performance Bonus Agreement be-
tween the Company and Isaac Perlmutter, the Amended and
Restated Consulting Agreement between the Company and
Arad or the Consulting Agreement between the Company and
Isaac Perlmutter (in the case of the documents referred
to in this clause (ii), in the form previously provided
to the Company) so as to make such arrangements economi-
cally more favorable to Arad or Isaac Perlmutter, or
enter into any similar agreements, without the consent of
the Company, which consent shall not unreasonably be
withheld.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's
Obligation to Effect the Merger. The respective obliga-
tion of each party to effect the Merger shall be subject
to the satisfaction on or prior to the Closing Date of
each of the following conditions, any and all of which
may be waived in whole or in part by the Company, Parent
or the Purchaser, as the case may be, to the extent
permitted by applicable law:
(a) Stockholder Approval. This Agreement
shall have been approved and adopted by the requisite
vote of the holders of the Shares, if required by appli-
cable law or the Company's certificate of incorporation,
in order to consummate the Merger;
(b) Statutes; Consents. No statute, rule,
order, decree or regulation shall have been enacted or
promulgated by any Governmental Entity which prohibits
the consummation of the Merger and all governmental
consents, orders and approvals required for the consumma-
tion of the Merger and the transactions contemplated
hereby shall have been obtained and shall be in effect at
the Effective Time; and
(c) Injunctions. There shall be no order or
injunction of a Governmental Entity of competent juris-
diction in effect precluding, restraining, enjoining or
prohibiting consummation of the Merger.
Section 6.2 Conditions to Parent's and the
Purchaser's Obligations to Effect the Merger. The obli-
gations of Parent and the Purchaser to consummate the
Merger are further subject to the fulfillment of the
following conditions, which may be waived in whole or in
part by Parent and the Purchaser:
(a) The representations and warranties of the
Company contained in this Agreement shall be true and
correct in all material respects both when made and
(except for those representations and warranties that
address matters only as of a particular date which need
only be true and correct in all material respects as of
such date) as of the Effective Time after giving effect
to the Merger as if made at and as of such time;
(b) The Company shall have performed in all
material respects each of its obligations under this
Agreement required to be performed by it at or prior to
the Effective Time;
(c) The Plan of Reorganization (with such
changes as Parent shall approve) attached as Exhibit A to
the Stock Purchase Agreement dated December 27, 1996
between Parent and Marvel shall have been confirmed and
all conditions to closing under such agreement (excluding
the condition that all conditions to the closing of this
Agreement be satisfied) shall have been satisfied or
waived.
Section 6.3 Conditions to Company's Obliga-
tions to Effect the Merger. The obligations of the
Company to consummate the Merger are further subject to
the fulfillment of the following conditions, which may be
waived in whole or in part by the Company:
(a) The representations and warranties of the
Parent and Purchaser contained in this Agreement shall be
true and correct in all material respects both when made
and (except for those representations and warranties that
address matters only as of a particular date which need
only be true and correct in all material respects as of
such date) as of the Effective Time after giving effect
to the Merger as if made at and as of such time;
(b) Each of the Parent and Purchaser shall
have performed in all material respects each of its
obligations under this Agreement required to be performed
by it at or prior to the Effective Time.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may
be terminated and the Merger contemplated herein may be
abandoned at any time prior to the Effective Time, wheth-
er before or after stockholder approval thereof:
(a) By mutual agreement of Parent, Purchaser
and the Company.
(b) By Parent or the Company:
(i) if the Merger shall not have been
consummated by June 30, 1997; provided, however,
that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to any
party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted
in, the failure of the Merger to occur on or prior
to such date;
(ii) if the stockholders of the Company
fail to approve and adopt this Agreement at the
Special Meeting; provided, however, that the right
to terminate this Agreement under this Section
7.1(b)(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agree-
ment has been the cause of, or resulted in, the
failure of the stockholders of the Company to ap-
prove and adopt this Agreement at the Special Meet-
ing;
(iii) if any Governmental Entity shall
have issued an order, decree or ruling or taken any
other action (which order, decree, ruling or other
action the parties hereto shall use their reasonable
efforts to lift), in each case permanently restrain-
ing, enjoining or otherwise prohibiting the transac-
tions contemplated by this Agreement and such order,
decree, ruling or other action shall have become
final and non-appealable; or
(iv) if, prior to the consummation of the
Merger, (x) the Board of Directors of the Company
shall (A) have withdrawn, or modified or changed in
a manner adverse to Parent or the Purchaser its
approval of this Agreement or the Merger in order to
execute a definitive agreement relating to an Acqui-
sition Proposal which is a superior proposal to the
Merger, reasonably capable of being consummated, and
(B) have concluded in good faith after consultation
with independent legal counsel that the failure to
take such action as set forth in the preceding
clause (A) would result in the Board of Directors
violating its fiduciary obligations under applicable
law.
(c) By Parent, if it shall have purchased
Shares pursuant to a Qualifying Offer.
Section 7.2 Effect of Termination. In the
event of the termination of this Agreement as provided in
Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provi-
sion hereof pursuant to which such termination is made,
and this Agreement shall forthwith become null and void,
and there shall be no liability on the part of any party
hereto except (A) for fraud or for material breach of
this Agreement and (B) as set forth in this Section 7.2
and Section 8.1.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. Except as
contemplated by this Agreement, all costs and expenses
incurred in connection with this Agreement and the con-
summation of the transactions contemplated hereby shall
be paid by the party incurring such expenses.
Section 8.2 Amendment, Modification and Other
Action. Subject to applicable law, this Agreement may be
amended, modified and supplemented in any and all re-
spects, whether before or after any vote of the stock-
holders of the Company contemplated hereby, by written
agreement of the parties hereto, at any time prior to the
Closing Date with respect to any of the terms contained
herein; provided, however, that after the approval of
this Agreement by the stockholders of the Company, no
such amendment, modification or supplement shall reduce
the amount or change the form of the Merger Consider-
ation. Notwithstanding any provision of this Agreement
to the contrary, no action by the Company referred to in
Sections 1.2 or 1.3, Article VI or VII or this Article
VIII, and no consent under the first sentence of Section
5.9(c), shall be effective without the approval of the
Special Committee.
Section 8.3 Nonsurvival of Representations and
Warranties. None of the representations and warranties
in this Agreement or in any schedule, instrument or other
document delivered pursuant to this Agreement shall
survive the Effective Time.
Section 8.4 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service,
such as Federal Express, to the parties at the following
addresses (or at such other address for a party as shall
be specified by like notice):
if to Parent or the Purchaser, to:
Andrews Group Incorporated
3200 Windy Hill Road
Atlanta, Georgia 30339
Attention: General Counsel
Telephone No.: (212) 572-8600
Telecopy No.: (770) 563-9610
with a copy to:
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Attention: Barry F. Schwartz, Esq.
Telephone No.: 212-572-5170
Telecopy: 212-572-5056
with an additional copy to:
Alan C. Myers, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telephone No.: (212) 735-3000
Telecopy No.: (212) 735-2001
and
if to the Company, to:
Toy Biz, Inc.
333 East 38th Street
New York, New York 10016
Attention: General Counsel
Telephone No.: (212) 682-4700
Telecopy No.: (212) 682-3516
with a copy to:
Allen Finkelson, Esq.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Telephone No.: (212) 474-1000
Telecopy No.: (212) 474-3700
Section 8.5 Interpretation. When a reference
is made in this Agreement to Sections, such reference
shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation".
As used in this Agreement, the term "affiliate(s)" shall
have the meaning set forth in Rule l2b-2 of the Exchange
Act.
Section 8.6 Counterparts. This Agreement may
be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall
become effective when two or more counterparts have been
signed by each of the parties and delivered to the other
parties.
Section 8.7 Entire Agreement; No Third Party
Beneficiaries; Rights of Ownership. This Agreement
(including the documents and the instruments referred to
herein): (a) constitute the entire agreement and super-
sedes all prior agreements and understandings, both
written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in
Section 5.8 is not intended to confer upon any person
other than the parties hereto any rights or remedies
hereunder.
Section 8.8 Severability. If any term, provi-
sion, covenant or restriction of this Agreement is held
by a Governmental Entity of competent jurisdiction to be
invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, im-
paired or invalidated.
Section 8.9 Governing Law. This Agreement
shall be governed by and construed in accordance with the
laws of the State of Delaware without giving effect to
the principles of conflicts of law thereof.
IN WITNESS WHEREOF, Parent, the Purchaser and
the Company have caused this Agreement to be signed by
their respective officers thereunto duly authorized as of
the date first written above.
ANDREWS GROUP INCORPORATED
By:
Name:
Title:
ANDREWS ACQUISITION CORP.
By:
Name:
Title:
TOY BIZ, INC.
By:
Name:
Title:
STOCK PURCHASE AGREEMENT
dated as of December 27, 1996
by and between
ANDREWS GROUP INCORPORATED
and
MARVEL ENTERTAINMENT GROUP, INC
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1 Defined Terms . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . 3
ARTICLE II
SALE AND PURCHASE OF THE SHARES
2.1 Purchase and Sale of the Shares . . . . . . . . 3
2.2 Consideration . . . . . . . . . . . . . . . . . 3
2.3 Closing . . . . . . . . . . . . . . . . . . . . 4
2.4 Deliveries by Reorganized Seller . . . . . . . 4
2.5 Deliveries by Purchaser . . . . . . . . . . . . 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization . . . . . . . . . . . . . . . . . 5
3.2 Authority . . . . . . . . . . . . . . . . . . . 5
3.3 Capitalization . . . . . . . . . . . . . . . . 5
3.4 Acceptance of the Plan . . . . . . . . . . . . 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
4.1 Organization . . . . . . . . . . . . . . . . . 6
4.2 Authority; Enforceability . . . . . . . . . . . 6
4.3 Funds . . . . . . . . . . . . . . . . . . . . . 6
4.4 Status and Investment Intent . . . . . . . . . 6
ARTICLE V
COVENANTS
5.1 Reasonable Best Efforts . . . . . . . . . . . . 7
5.2 Capitalization . . . . . . . . . . . . . . . . 8
5.3 No Changes To Plan . . . . . . . . . . . . . . 8
5.4 Expenses . . . . . . . . . . . . . . . . . . . 8
5.5 Further Assurances . . . . . . . . . . . . . . 8
ARTICLE VI
CONDITIONS TO THE CLOSING
6.1 Conditions to the Obligations of Each Party . . 9
6.2 Additional Conditions to the Obligations of
Purchaser . . . . . . . . . . . . . . . . . . . 9
6.3 Additional Conditions to the Obligations of
Seller . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII
TERMINATION
7.1 Termination . . . . . . . . . . . . . . . . . . 11
7.2 Effect of Termination . . . . . . . . . . . . . 12
ARTICLE VIII
MISCELLANEOUS
8.1 Survival of Representations and Warranties;
Indemnification . . . . . . . . . . . . . . . . 13
8.2 Notices . . . . . . . . . . . . . . . . . . . . 13
8.3 Interpretation . . . . . . . . . . . . . . . . 14
8.4 No Third Party Beneficiaries . . . . . . . . . 15
8.5 Amendment . . . . . . . . . . . . . . . . . . . 15
8.6 Extension; Waiver . . . . . . . . . . . . . . . 15
8.7 Entire Agreement . . . . . . . . . . . . . . . 15
8.8 Successors and Assigns . . . . . . . . . . . . 15
8.9 Governing Law . . . . . . . . . . . . . . . . . 15
8.10 Counterparts . . . . . . . . . . . . . . . . . 15
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 27,
1996, by and between ANDREWS GROUP INCORPORATED, a Delaware
corporation ("Purchaser"), and MARVEL ENTERTAINMENT GROUP, INC.,
a Delaware corporation ("Seller").
WHEREAS, the Board of Directors of Seller (the "Board
of Directors") has considered various strategic transaction
alternatives involving Seller and has determined that a
restructuring transaction pursuant to a plan of reorganization
(the "Plan") under Chapter 11 of the United States Bankruptcy
Code ("Chapter 11") will maximize the value of Seller as a whole;
WHEREAS, Purchaser desires to make an investment in
conjunction with the Plan and in exchange for an equity interest
in Seller following its reorganization pursuant to the Plan (the
"Reorganized Seller");
WHEREAS, Seller and Purchaser desire to cooperate in
the formulation of the Plan substantially in the form annexed
hereto as Exhibit A, with such changes as may be acceptable to
Purchaser, a disclosure statement pertaining to the Plan (the
"Disclosure Statement"), and the confirmation and consummation of
the Plan; and
WHEREAS, as a part of the Plan, Seller desires to sell
to Purchaser, and Purchaser desires to purchase from Reorganized
Seller, that number of newly issued shares (the "Shares") of
common stock, par value $.01 per share (the "Common Stock"), of
Reorganized Seller, on the terms and subject to the conditions
set forth in this Agreement, such that upon issuance and after
giving effect to the terms of the Plan and all distributions
thereunder, the Shares shall constitute 80.8% of the outstanding
Common Stock of Reorganized Seller.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, intending
to be legally bound thereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement
(including the schedules and exhibits hereto), the terms defined
in this Agreement shall have the respective meanings specified in
the Preamble hereof; in addition, the following terms shall have
the following meanings:
"Agreement": this Stock Purchase Agreement, as
amended, modified or supplemented from time to time.
"Bankruptcy Court": the United States Bankruptcy Court
for the District of Delaware.
"business day": any day, other than a Saturday or
Sunday, on which banks in New York are required to be open
for the conduct of business.
"Cash Component": that portion, if any, of the
Purchase Price that Purchaser elects to pay in cash pursuant
to Section 2.2.
"Closing": the Closing of the sale of the Shares, as
set forth in Section 2.3.
"Closing Date": the date of the Closing, as set forth
in Section 2.3.
"Damages": any and all losses, liabilities, damages,
costs and expenses.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof and any
entity (including, without limitation, a court) exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Lien": any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or
any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
and any restriction on the Shares pursuant to a voting,
stockholders or similar agreement or any other restriction
on the Shares of any kind, other than those imposed by
applicable securities laws.
"New Bank Credit Agreements": collectively the credit
facilities provided by The Chase Manhattan Bank, as
administrative agent for a syndicate of banks, (A) in the
aggregate amount of $160 million for Toy Biz and (B) for
Reorganized Seller in amounts and subject to the terms and
conditions described in the Disclosure Statement and Plan.
"person": an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Purchase Price": the $365,000,000 payable for the
Shares, as set forth in Section 2.2.
"Special Committee": the Special Committee of the
Board of Directors of Seller.
"Stock Component": that portion, if any, of the
Purchase Price that Purchaser elects to pay in Toy Biz
Common Stock pursuant to Section 2.2.
"Toy Biz Common Stock": the Class A common stock, par
value $.01 per share, of Toy Biz.
"Toy Biz": Toy Biz, Inc., a Delaware corporation.
1.2 Other Definitional Provisions. (a) The words
"hereof," "herein" and "hereunder" and other words of similar
import when used in this Agreement shall refer to this Agreement
and the schedules and exhibits hereto as a whole and not to any
particular part or subdivision thereof, and Section references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms, and the words of either gender shall include the
other gender where appropriate.
ARTICLE II
SALE AND PURCHASE OF THE SHARES
2.1 Purchase and Sale of the Shares. Upon the terms
and subject to the conditions of this Agreement, at the Closing
(as defined in Section 2.3 hereof), Reorganized Seller shall
issue to Purchaser, and Purchaser shall purchase, acquire and
accept from Reorganized Seller, all of the Shares.
2.2 Consideration. (a) Upon the terms and subject to
the conditions of this Agreement, in consideration of the
aforesaid issuance of the Shares, Purchaser shall pay to
Reorganized Seller the Purchase Price. The Purchase Price shall
be payable, at the option of Purchaser, in (i) cash, (ii) shares
of Toy Biz Common Stock, or (iii) subject to the last sentence of
Section 2.2(b), any combination of (i) and (ii).
(b) For purposes of this Agreement, each share of Toy
Biz Common Stock, if any, paid by Purchaser as part or all of the
Purchase Price shall be valued at the price actually paid by
Purchaser to acquire such Toy Biz Common Stock. With respect to
shares of Toy Biz Common Stock acquired pursuant to the
Arad/Perlmutter Agreements (as hereinafter defined), such shares
shall be valued at the cash price paid therefor and Reorganized
Seller shall issue to Purchaser, in addition to the Shares, a
note in the aggregate principal amount equal to, and in all other
respects identical to, any notes issued by Purchaser pursuant to
the Arad/Perlmutter Agreements, except that such note shall be
subordinated to all obligations under the New Bank Credit
Agreements. If Purchaser pays any portion of the Purchase Price
in Toy Biz Common Stock, Purchaser must deliver to Reorganized
Seller all of the shares of Toy Biz Common Stock beneficially
owned by it.
2.3 Closing. The transactions contemplated herein
shall be consummated at the Closing. The Closing will take place
at such time and date specified by the parties hereto (the
"Closing Date"), subject to the satisfaction or waiver of the
conditions set forth in Article VI hereof, at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New
York, New York 10022. The Closing shall constitute an integral
and nonseverable part of consummation of the Plan.
2.4 Deliveries by Reorganized Seller. At the Closing,
Reorganized Seller will deliver or cause to be delivered (unless
previously delivered) to Purchaser, the following:
(a) A stock certificate or stock certificates
representing the Shares duly registered in the name of
Purchaser on the books of Seller, and any other documents
that are necessary to issue to Purchaser good and valid
title to the Shares.
(b) All other documents, instruments and writings
required to be delivered by Seller or Reorganized Seller at
the Closing, including, if applicable, the note contemplated
by Section 2.2(b) hereof.
2.5 Deliveries by Purchaser. At the Closing,
Purchaser will deliver or cause to be delivered (unless
previously delivered) to Reorganized Seller, the following:
(a) the Purchase Price, payable (i) with respect
to the Cash Component, if any, in immediately available
funds by wire transfer to an account designated by
Reorganized Seller or Seller to Purchaser at least two
business days prior to the Closing and (ii) with respect to
the Stock Component, if any, a stock certificate or stock
certificates representing the number of shares of Toy Biz
Common Stock Shares payable as the Stock Component,
accompanied by stock powers duly endorsed in blank or
accompanied by duly executed instruments of transfer, and
any other documents that are necessary to transfer to
Reorganized Seller good and valid title to such shares of
Toy Biz Common Stock free and clear of all Liens, with all
necessary transfer tax stamps affixed or accompanied by
evidence that all stock transfer taxes have been paid.
(b) All other documents, instruments and writings
required to be delivered by Purchaser at the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
3.1 Organization. Seller is, and Reorganized Seller
will be, a corporation duly organized and validly existing under
the laws of the State of Delaware and has and will continue to
have all requisite corporate power and corporate authority to
own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to have
such power or authority would not have a material adverse effect
on the business, operations or financial condition of Seller or
Reorganized Seller.
3.2 Authority. Seller has, and Reorganized Seller
will have, full corporate power and corporate authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Seller, on the
recommendation of the Special Committee, and no other corporate
proceedings on the part of Seller or Reorganized Seller are
necessary to authorize the execution and delivery of this
Agreement or, following confirmation of the Plan by the
Bankruptcy Court, to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and
delivered by Seller and, subject to Bankruptcy Court approval,
constitutes a valid and binding agreement of Seller and
Reorganized Seller, enforceable against Seller and Reorganized
Seller in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency
or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedies of specific
performance and injunctive relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
3.3 Capitalization. The authorized capital stock of
Seller consists of 250,000,000 shares of Common Stock and
50,000,000 shares of preferred stock, par value $.01 per share,
and the outstanding capital stock consists of 101,809,657 shares
of Common Stock. The Shares, when issued, will constitute 80.8%
of the issued and outstanding capital stock of Reorganized
Seller, both at the time of their issuance and after giving
effect to all the terms of the Plan and all distributions
thereunder. The Shares will be on the Closing Date duly
authorized, validly issued, fully paid and nonassessable, free of
preemptive rights and will remain so after giving effect to all
the terms of the Plan and all distributions thereunder.
3.4 Acceptance of the Plan. The Plan in the form
annexed hereto as Exhibit A has been accepted by holders of
claims in Class 2 (as defined in the Plan) in accordance with the
requirements of the United States Bankruptcy Code and Bankruptcy
Rules, and the solicitation of the holders of such claims was
conducted in accordance with Section 1126(b)(ii) of the
Bankruptcy Code and Bankruptcy Rules.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as
follows:
4.1 Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power
and authority to own all of its properties and assets and to
carry on its business as it is now being conducted, except where
the failure to have such power or authority would not have a
material adverse effect on the ability of Purchaser to consummate
the transactions contemplated hereby.
4.2 Authority; Enforceability. Purchaser has the
corporate power and corporate authority to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by
Purchaser and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by the Board of
Directors of Purchaser and, no other proceedings on the part of
Purchaser are necessary following confirmation of the Plan by the
Bankruptcy Court to authorize the execution and delivery of this
Agreement or to consummate the transactions contemplated hereby.
This Agreement and the Arad/Perlmutter Agreements have been duly
executed and delivered by Purchaser and constitute the legal,
valid and binding agreements of Purchaser, enforceable against it
in accordance with their respective terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency,
and other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedies of specific
performance and injunctive relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4.3 Funds. Purchaser has access to, and immediately
prior to the Closing will have, the funds necessary to consummate
the purchase of the Shares to be purchased by it hereunder.
4.4 Status and Investment Intent. (a) Purchaser is an
"accredited investor" as defined in Rule 501(a) under the
Securities Act, and it is acquiring the Shares hereunder for its
own account for investment purposes only and (subject to its
property being at all times within its control) not with a view
to, or with any present intention of, resale, distribution or
other disposition thereof.
(b) Purchaser has sufficient knowledge and
experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment in the
Shares and Purchaser is capable of bearing the economic risks of
such investment, including a complete loss of its investment.
(c) Purchaser has had the opportunity to ask
questions of, and receive answers from, Seller concerning the
terms of the Shares and other related matters. Purchaser further
acknowledges that Seller made available to Purchaser or its
agents all documents and information relating to an investment in
the Shares reasonably requested by or on behalf of Purchaser.
(d) Except as specifically set forth herein
Seller has not made any representations or warranties to
Purchaser and except for information provided by Seller in
writing, Purchaser has not relied on any statements made or other
information received from any person with respect to the purchase
of the Shares hereunder.
ARTICLE V
COVENANTS
5.1 Reasonable Efforts. (a) Upon the terms and
subject to the conditions of this Agreement, each of the parties
hereto agrees to use its commercially reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as promptly as
practicable including, but not limited to: (i) the preparation
and filing of all forms, registrations and notices required to be
filed to consummate the transactions contemplated by this
Agreement and the taking of such actions as are necessary to
obtain any requisite approvals, consents, orders, exemptions or
waivers by any third party or Governmental Authority; (ii) the
filing of (A) the Plan and Disclosure Statement no later than
December 31, 1996, and (B) appropriate pleadings to obtain
hearing dates for the approval of the Disclosure Statement and
confirmation of the Plan, in each case as promptly as possible;
(iii) requesting the earliest practicable date for consideration
and approval of the Disclosure Statement, the time for acceptance
or rejection of the Plan by impaired classes of claims and
interests that have not previously accepted the Plan,
confirmation of the Plan, and using its best efforts to obtain
confirmation of the Plan as promptly as possible after Seller
files its Chapter 11 petition; (iv) using its reasonable efforts
to promptly obtain the dismissal of all appeals and applications
and motions for reconsideration or rehearing with respect to the
Disclosure Statement, the Plan, or the order confirming the Plan;
and (v) causing the satisfaction of all conditions to the Closing
and the Plan.
(b) Each party shall promptly consult with the other
with respect to, provide any necessary information that is not
subject to legal privilege with respect to, and provide the other
(or its counsel) copies of, all filings made by such party with
any Governmental Authority or any other information supplied by
such party to a Governmental Authority in connection with this
Agreement and the transactions contemplated by this Agreement.
Each party hereto shall promptly inform the other of any
communication from any Governmental Authority regarding any of
the transactions contemplated by this Agreement. If either party
receives a request for additional information or documentary
material from any such Governmental Authority with respect to the
transactions contemplated by this Agreement, then such party will
endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other
party, an appropriate response in compliance with such request.
5.2 Capitalization. Except for those actions
contemplated hereby, Seller and Reorganized Seller shall not: (i)
declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to its capital
stock or (ii) issue, sell, pledge, dispose of or encumber any
additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of capital stock of any
class of Seller or Reorganized Seller. The authorized, issued
and outstanding capital stock of Reorganized Seller shall consist
of such number of shares of Common Stock as the parties hereto
may agree, provided that the Shares, after giving effect to this
Agreement and the distributions provided for in the Plan, shall
constitute 80.8% of the outstanding Common Stock of Reorganized
Seller.
5.3 No Changes To Plan. Notwithstanding any provision
of applicable law or the Plan that purports to grant to Seller or
Reorganized Seller the right or ability to modify the Plan
attached hereto as Exhibit A, or to consent to the alteration or
severance of Plan provisions under Section 15.5 of the Plan,
Seller and Reorganized Seller will not modify the Plan (attached
hereto as Exhibit A) without Purchaser's consent.
5.4 Expenses. Whether or not the transactions
contemplated hereby are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
expenses, except as otherwise provided herein.
5.5 Further Assurances. From time to time after the
Closing, without additional consideration, each party shall
execute and deliver such further instruments and take such other
action as may be reasonably necessary to make effective the
transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS TO THE CLOSING
6.1 Conditions to the Obligations of Each Party. The
respective obligations of each party to effect the Closing are
subject to the fulfillment at or prior to the Closing Date of
each of the following conditions precedent:
(a) No Injunction or Restraints; Illegality. No
temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated
hereby shall be in effect, nor shall any proceeding by any
Governmental Authority seeking any of the foregoing be
pending. There shall not be in effect any statute, rule,
regulation or order of any court, or governmental or
regulatory body which prohibits or makes illegal the
transactions contemplated by this Agreement.
(b) Confirmation of Plan. The Plan shall have been
confirmed by the Bankruptcy Court, and the confirmation
order relating to the Plan (the "Confirmation Order") shall
have been entered.
6.2 Additional Conditions to the Obligations of
Purchaser. The obligations of Purchaser are also subject to
fulfillment (or waiver by Purchaser in its sole and absolute
discretion, without further notice to or approval by the
Bankruptcy Court or parties in interest in Seller's Chapter 11
case) at or prior to the Closing Date of each of the following
conditions precedent:
(a) Representations and Warranties. The
representations and warranties of Seller contained in
Article III of this Agreement shall be true and correct in
all material respects as of the Closing Date as though made
at and as of the Closing Date by both Seller and Reorganized
Seller, except to the extent that they expressly refer to an
earlier time, in which case they shall be true and correct
as of such time.
(b) Performance of Covenants. Seller and Reorganized
Seller shall have duly performed and complied in all
material respects with each covenant, agreement and
condition required by this Agreement to be performed or
complied with by Seller or Reorganized Seller prior to or on
the Closing Date.
(c) Toy Biz Acquisition. Seller, an affiliate
thereof, or an affiliate of Purchaser shall have entered
into an agreement with Toy Biz pursuant to which it would
acquire all outstanding shares of Toy Biz Common Stock and
all conditions to closing thereunder (excluding the
condition that all conditions to the closing of this
Agreement be satisfied) shall have been satisfied.
(d) Arad/Perlmutter Agreements. All conditions to
closing under the stock purchase agreements, dated as of
November 20, 1996, between Purchaser and each of Isaac
Perlmutter and Avi Arad (the "Arad/Perlmutter Agreements"),
for the purchase of an aggregate of 13,656,000 shares of Toy
Biz Common Stock, shall have been satisfied or waived and
Purchaser either (i) shall have acquired shares of Toy Biz
Common Stock pursuant to the Arad/Perlmutter Agreements
(which shares may be used in the Stock Component) or (ii)
shall have assigned to Seller or Reorganized Seller, and
Seller or Reorganized Seller shall have assumed, Purchaser's
rights and obligations under the Arad/Perlmutter Agreements,
it being contemplated that, if notwithstanding such
assumption Purchaser shall be required to issue and leave
outstanding $40 million of its notes to Messrs. Perlmutter
and Arad, and that accordingly, Reorganized Seller shall
issue to Purchaser Reorganized Sellers' $40 million note,
which note shall be subordinated to all obligations under
the New Bank Credit Agreements and otherwise have terms
identical to the notes issuable by Purchaser under the
Arad/Perlmutter Agreements.
(e) Motions. Any motion for reconsideration or
rehearing of the Confirmation Order shall have been denied
or withdrawn.
(f) Appeals. The time allowed to appeal or petition
for certiorari with respect to the Confirmation Order shall
have expired without any appeal having been taken or writ of
certiorari having been filed.
(g) Plan and Confirmation Order. The Plan and the
Confirmation Order shall be acceptable to Purchaser in all
respects.
(h) Litigation. There shall not be pending or
threatened against Purchaser, Seller, Reorganized Seller or
any affiliate of any of them any litigation arising out of
or relating to the Plan or any of the transactions
contemplated by this Agreement.
(i) Material Adverse Change. There shall have been no
material adverse change in Seller's financial condition,
business, operations or prospects taken as a whole from the
date hereof.
(j) Financing of Reorganized Seller and Toy Biz, Inc..
Upon consummation of the Plan, the credit facilities under
the New Bank Credit Agreements shall be available to
Reorganized Seller and Toy Biz in the aggregate amounts and
subject to the terms and conditions described in the
Disclosure Statement and Plan on the date hereof.
(k) Registration Rights Agreement. The Seller shall
have executed a registration rights agreement between
Purchaser and Seller substantially in the form of Exhibit B
attached hereto.
6.3 Additional Conditions to the Obligations of
Seller. The obligations of Seller are also subject to
fulfillment (or waiver by Seller in its sole and absolute
discretion, without further notice to or approval by the
Bankruptcy Court or parties in interest in Seller's Chapter 11
Case) at or prior to the Closing Date of each of the following
conditions precedent:
(a) Representations and Warranties. The
representations and warranties of Purchaser contained in
Article IV of this Agreement shall be true and correct in
all material respects as of the Closing Date as though made
at and as of the Closing Date, except to the extent they
expressly refer to an earlier time, in which case they shall
be true and correct as of such time.
(b) Performance of Covenants. Purchaser shall have
duly performed and complied in all material respects with
each covenant, agreement and condition required by this
Agreement to be performed or complied with by it prior to or
on the Closing Date.
(c) Toy Biz Acquisition. Either Purchaser shall have
assigned its rights to Seller or Reorganized Seller under
the Arad/Perlmutter Agreements and the agreement to acquire
shares of Toy Biz Common Stock, or Purchaser shall have
delivered shares of Toy Biz Common Stock in the manner
required by this Agreement.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual agreement of Seller and Purchaser;
(b) by Purchaser, if (i) the Disclosure Statement
has not been approved by January 31, 1997, or (ii) the Plan
has not been confirmed by the Bankruptcy Court by April 18,
1997;
(c) by Purchaser, if the Closing shall not have
taken place on or before April 30, 1997; provided that the
failure of the Closing to occur on or before such date is
not the result of the breach of the covenants, agreements,
representations or warranties hereunder of Purchaser;
(d) by Purchaser or Seller, upon notice given to
the other if any Governmental Authority of competent
jurisdiction shall have issued a final permanent order
enjoining or otherwise prohibiting the transactions
contemplated by this Agreement;
(e) (i) by Purchaser or Seller, if prior to the
purchase of the Shares, the Board of Directors of Seller, on
the recommendation of the Special Committee, shall have (A)
withdrawn, or modified or changed in a manner adverse to
Purchaser its approval of the purchase of the Shares or this
Agreement in order to permit Seller to execute a definitive
agreement relating to an Acquisition Proposal which is a
superior proposal to the transactions contemplated hereby,
reasonably capable of being consummated, and (B) determined,
only after receipt of oral or written advice from
independent legal counsel to Seller, that the failure to
take such action as set forth in the preceding clause (A)
could reasonably be expected to cause the Board of Directors
to violate its fiduciary duties to Seller's stockholders or
creditors under applicable law; for purposes of this
section, "Acquisition Proposal" means any merger, tender
offer, exchange offer, sale of material assets, business
combination, sale of shares of capital stock or debt
securities or similar transactions involving Seller, its
subsidiaries, or any division or operating or principal
business unit of Seller; or
(ii) by Purchaser or Seller, if the other party
breaches or fails in any material respect to perform or
comply with any of its covenants and agreements contained
herein or breaches its representations and warranties in any
material respect; provided, however, that if any such breach
is curable by the breaching party through the exercise of
the breaching party's reasonable best efforts and for so
long as such breaching party shall be so attempting to cure
such breach for a period not to exceed 20 days, except as
provided in subparagraph (f) below, the non-breaching party
may not terminate this Agreement pursuant to this Section.
(f) by Purchaser, if Seller shall have failed to
comply with or meet the deadlines set forth in Sections
5.1(a) above.
7.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 7.1 hereof,
the obligations of the parties hereto shall terminate, except
that the provisions of Sections 5.4 and 7.2 hereof shall survive
and neither party shall be relieved of any liability for any
breach of any provision contained in this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Survival of Representations and Warranties;
Indemnification.
(a) The representations and warranties made by the
parties in this Agreement shall survive the Closing,
and the covenants shall survive the Closing to the
extent that by their terms they are to be performed
thereafter.
(b) In connection with any assignment of the
Arad/Perlmutter Agreements or the agreement to acquire
shares of Toy Biz, Purchaser shall indemnify Seller
against any claim by or liability to the other party or
parties to such assigned agreement (including
reasonable expenses) arising out of any breach, act or
omission by Purchaser.
8.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally or transmitted by facsimile or mailed by
registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
if to Purchaser, to:
Andrews Group Incorporated
3200 Windy Hill Road
Atlanta, Georgia 30339
Attention: General Counsel
Telecopy: 770-563-9610
with a copy to:
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Attention: Barry F. Schwartz, Esq.
Telecopy: 212-572-5056
with an additional copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Alan C. Myers, Esq.
Telecopy: 212-735-2000
if to Seller, to:
Marvel Entertainment Group, Inc.
387 Park Avenue South
New York, New York, 10016
Attention: General Counsel
Telecopy: 212-576-9346
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Simeon Gold, Esq.
Telecopy: 212-310-8007
8.3 Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
8.4 No Third Party Beneficiaries. Nothing herein
express or implied shall confer upon any person other than the
parties hereto any rights, benefits or remedies of any nature or
kind under or by reason of this Agreement.
8.5 Amendment. This Agreement may be amended by the
parties hereto, but may not be amended except by an instrument or
instruments in writing signed and delivered on behalf of each of
the parties hereto.
8.6 Extension; Waiver. At any time prior to the
Closing Date or the termination of this Agreement pursuant to
Section 7.1, any party hereto which is entitled to the benefits
hereof may (a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) waive any
inaccuracy in the representations and warranties of the other
party contained herein or in any schedule hereto or in any
document delivered pursuant hereto, or (c) waive compliance with
any of the agreements of the other party hereto or conditions
contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid if set forth in an
instrument in writing signed and delivered on behalf of such
party.
8.7 Entire Agreement. This Agreement, including the
schedules, exhibits, documents and instruments referred to
herein, constitutes the entire agreement and supersedes all other
prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
8.8 Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
Notwithstanding the foregoing, this Agreement shall not be
assignable by either party hereto (other than by operation of
law) without the prior written consent of the other party hereto;
provided, that Purchaser may assign its rights and obligations
hereunder to any of its affiliates.
8.9 Governing Law. This Agreement shall be governed
in all respects, including validity, interpretation and effect,
by the laws of the State of Delaware.
8.10 Counterparts. This Agreement may be executed by
facsimile and in counterparts, all of which for all purposes
shall be deemed to be an original and all of which shall, taken
together, constitute the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or
have caused this Agreement to be executed by their duly
authorized officers or representatives, all as of the date first
written above.
ANDREWS GROUP INCORPORATED
By:
Name:
Title:
MARVEL ENTERTAINMENT GROUP, INC.
By:
Name:
Title:
- ------------------
EXHIBIT A
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
-----------------------------------x
:
In re :
: Chapter 11 Case Nos.
Marvel Entertainment Group, Inc. : 96-[]( ) through 96-[]( )
et al., :
: (Jointly Administered)
Debtors. :
:
-----------------------------------x
JOINT PLAN OF REORGANIZATION
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtors
and Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
-and-
YOUNG, CONAWAY, STARGATT & TAYLOR
Attorneys for the Debtors
and Debtors in Possession
Rodney Square North
Wilmington, Delaware 19899
(302) 571-6600
Dated: Wilmington, Delaware
December 27, 1996
JOINT PLAN OF REORGANIZATION
Marvel Entertainment Group, Inc., The Asher Candy
Company, Fleer Corp., Frank H. Fleer Corp., Heroes World
Distribution, Inc., Malibu Comics Entertainment, Inc.,
Marvel Characters, Inc., Marvel Direct Marketing, Inc. and
SkyBox International Inc. jointly and severally propose the
following Joint Plan of Reorganization:
SECTION 1. DEFINITIONS AND INTERPRETATION
A. Definitions.
The following terms used herein shall have the
respective meanings defined below:
1.1. Acquisition Agreement means that certain
Stock Purchase Agreement dated as of December 27, 1996
between Andrews Group Incorporated and Marvel Entertainment
Group, Inc. annexed as Exhibit A hereto.
1.2. Administration Expense Claim means any right
to payment constituting a cost or expense of administration
of any of the Reorganization Cases allowed under sections
503(b) and 507(a)(1) of the Bankruptcy Code, including,
without limitation, any actual and necessary costs and
expenses of preserving the estates of the Debtors, any
actual and necessary costs and expenses of operating the
business of the Debtors, any indebtedness or obligations
incurred or assumed by the Debtors in Possession in
connection with the conduct of their business, including,
without limitation, for the acquisition or lease of property
or an interest in property or the rendition of services, any
allowances of compensation and reimbursement of expenses to
the extent allowed by Final Order under section 330 or 503
of the Bankruptcy Code, and any fees or charges assessed
against the estates of the Debtors under section 1930,
chapter 123, title 28, United States Code.
1.3. Affiliate means, with reference to any
entity, any other entity that, within the meaning of Rule
12b-2 promulgated under the Securities Exchange Act of 1934,
as amended, "controls," is "controlled by" or is under
"common control with" such entity.
1.4. Affiliate Unsecured Claim means any
Unsecured Claim held by any Debtor against any other Debtor
or any Unsecured Claim held by any Affiliate of a Debtor
against such Debtor.
1.5. Allowed means, with reference to any Claim
or Equity Interest, (a) any Claim or Equity Interest against
any Debtor which has been listed by such Debtor in its
Schedules, as such Schedules may be amended by the Debtors
from time to time in accordance with Bankruptcy Rule 1009,
as liquidated in amount and not disputed or contingent and
for which no contrary proof of claim has been filed, (b) any
Claim or Equity Interest allowed by Final Order, (c) any
Claim or Equity Interest as to which the liability of the
Debtors and the amount thereof are determined by final order
of a court of competent jurisdiction other than the
Bankruptcy Court or (d) any Claim allowed hereunder.
1.6. Ballot means the form or forms distributed
to each holder of an impaired Claim or Equity Interest on
which is to be indicated acceptance or rejection of this
Plan of Reorganization.
1.7. Ballot Date means the date fixed by the
Bankruptcy Court as the date by which all Ballots for
acceptance or rejection of this Plan of Reorganization must
be received by the Balloting Agent (as such term is defined
in the Disclosure Statement) from holders of impaired Claims
and Equity Interests other than holders of claims in Class 2
(Senior Secured Claims) to be counted as acceptances or
rejections of this Plan of Reorganization.
1.8. Bankruptcy Code means title 11, United
States Code, as applicable to the Reorganization Cases.
1.9. Bankruptcy Court means the United States
District Court for the District of Delaware having
jurisdiction over the Reorganization Cases and, to the
extent of any reference under section 157, title 28, United
States Code, the unit of such District Court under section
151, title 28, United States Code.
1.10. Bankruptcy Rules means the Federal Rules of
Bankruptcy Procedure as promulgated by the United States
Supreme Court under section 2075, title 28, United States
Code, and any Local Rules of the Bankruptcy Court.
1.11. Business Day means any day other than a
Saturday, a Sunday or any other day on which banking
institutions in New York, New York are required or
authorized to close by law or executive order.
1.12. Cash means legal tender of the United
States of America.
1.13. Causes of Action means, without limitation,
any and all actions, causes of action, liabilities,
obligations, rights, suits, debts, sums of money, damages,
judgments, claims and demands whatsoever, whether known or
unknown, in law, equity or otherwise.
1.14. Claim means (a) any right to payment from
any of the Debtors, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (b) any right to an equitable
remedy for breach of performance if such breach gives rise
to a right of payment from any of the Debtors, whether or
not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured.
1.15. Class Securities Litigation Claims means
any Claim whether or not the subject of an existing lawsuit
(other than a Derivative Securities Litigation Claim)
arising from rescission of a purchase or sale of shares of
common stock of Marvel Entertainment Group, Inc., for
damages arising from the purchase or sale of any such
security, or for reimbursement or contribution allowed under
section 502 of the Bankruptcy Code on account of any such
Claim including but not limited to any such Claims
identified on Schedule 1.15 hereto, which Claims shall be
subordinated in accordance with section 510(b) of the
Bankruptcy Code.
1.16. Collateral means any property or interest
in property of the estate of any Debtor subject to a Lien to
secure the payment or performance of a Claim, which Lien is
not subject to avoidance under the Bankruptcy Code.
1.17. Confirmation Date means the date on which
the Clerk of the Bankruptcy Court enters the Confirmation
Order on its docket.
1.18. Confirmation Hearing means the hearing held
by the Bankruptcy Court on confirmation of this Plan of
Reorganization, as such hearing may be adjourned or
continued from time to time.
1.19. Confirmation Order means the order of the
Bankruptcy Court confirming this Plan of Reorganization.
1.20. Consummation Date means the later to occur
of (a) the eleventh day (calculated under Bankruptcy Rule
9006) after the Confirmation Date if no stay of the
Confirmation Order is then in effect or (b) such other date
as is fixed from time to time after the Confirmation Date by
the Debtors by filing a notice thereof with the Bankruptcy
Court, but in no event shall the Consummation Date occur
earlier than the date of the satisfaction of each of the
conditions precedent to the occurrence of the Consummation
Date of this Plan of Reorganization in section 10.2 hereof
unless waived as provided in section 10.3 hereof.
1.21. Creditors' Committee means, on and after
the date of its organization by the U.S. Trustee, the
statutory unsecured creditors' committee appointed in the
Reorganization Cases under section 1102 of the Bankruptcy
Code.
1.22. Debtor means each of Marvel Entertainment
Group, Inc., The Asher Candy Company, Fleer Corp., Frank H.
Fleer Corp., Heroes World Distribution, Inc., Malibu Comics
Entertainment, Inc., Marvel Characters, Inc., Marvel Direct
Marketing Inc., and Skybox International Inc., each other
than Malibu Comics Entertainment, Inc. being a Delaware
corporation and Malibu Comics Entertainment, Inc. being a
California corporation, the debtors in Chapter 11 Case Nos.
96-[ ] ([ ]) through 96-[ ] ([ ]), respectively.
1.23. Debtor in Possession means each Debtor in
its capacity as a debtor in possession under sections
1107(a) and 1108 of the Bankruptcy Code.
1.24. Derivative Securities Litigation Claims
means any Claim being or admitting of being prosecuted
derivatively, including, without limitation, those
identified on Schedule 1.24.
1.25. Disbursing Agent means any entity in its
capacity as a disbursing agent under section 7.2 hereof.
1.26. Disclosure Statement means the Disclosure
Statement, including, without limitation, all exhibits and
schedules thereto, in the form approved by the Bankruptcy
Court relating to this Plan of Reorganization.
1.27. Disputed Claim means a Claim against a
Debtor to the extent that such Claim is not an Allowed
Claim.
1.28. Equity Interest means any share of common
stock or other instrument evidencing a present ownership
interest in any of the Debtors, whether or not transferable,
or any option, warrant or right, contractual or otherwise,
to acquire any such interest.
1.29. Existing Credit Agreements means,
collectively, (a) that certain Amended and Restated Credit
and Guarantee Agreement dated as of August 30, 1994, as
amended, among Marvel Entertainment Group, Inc., Fleer
Corp., the financial institutions parties thereto, the co-
agents named therein and The Chase Manhattan Bank (formerly
named Chemical Bank) as administrative agent, (b) that
certain Credit and Guarantee Agreement dated as of April 24,
1995, as amended, by and among Marvel Entertainment Group,
Inc., Fleer Corp., the financial institutions party thereto,
the co-agents named therein and The Chase Manhattan Bank
(formerly named Chemical Bank) as administrative agent, (c)
that certain Term Loan and Guarantee Agreement dated as of
August 30, 1994, as amended, among Marvel Entertainment
Group, Inc., Panini, S.p.A. (formerly named Marvel Comics
Italia S.r.l.), and Instituto Bancario San Paolo Di Torino,
S.p.A. and the related Participation Agreement dated as of
August 30, 1994 among Instituto Bancario San Paolo Di
Torino, S.p.A., New York Limited Branch, as Italian Lender,
The Chase Manhattan Bank, as Administrative Agent, and the
financial institutions signatory thereto, as participants,
(d) that certain Line of Credit, dated as of March 27, 1996,
as amended, among Fleer Corp., the banks and other financial
institutions parties thereto and The Chase Manhattan Bank as
Administrative Agent, (e)(i)(A) any letter of credit issued
for the account of Marvel Entertainment Group, Inc. or any
of its subsidiaries by a bank or other financial institution
which is a party to any of the Existing Credit Agreements
referred to in clauses (a) or (b) of this section 1.29 and
(B) any related letter of credit applications and any
agreements governing or evidencing reimbursement obligations
relating to any letters of credit referred to in clause
(e)(i)A) of this section 1.29 or (ii) any interest rate
agreement between Marvel Entertainment Group, Inc. or any of
its subsidiaries and a bank or other financial institution
which is a party to any of the Existing Credit Agreements
referred to in clauses (a) through (d) inclusive, of this
section 1.29 and (f) any guarantees and security documents
executed and delivered in connection with any of the
foregoing agreements.
1.30. Existing Credit Agreements Amendments
means, collectively, (a) proposed Waiver Number 2 and Sixth
Amendment to Amended and Restated Credit and Guaranty
Agreement dated as of August 30, 1994, (b) proposed Consent
Number 5 and Third Amendment to Credit and Guarantee
Agreement dated as of April 24, 1995, (c) proposed Consent
Number 2 and First Amendment to Term Loan and Guarantee
Agreement dated as of August 30, 1994, as amended, among
Marvel Entertainment Group, Inc., Panini, S.p.A. (formerly
named Marvel Comics Italia, S.r.l) and Instituto Bancario
San Paolo Di Torino, S.p.A., New York Limited Branch and the
related Participation Agreement dated as of August 30, 1994
among Instituto Bancario San Paolo Di Torino, S.p.A., New
York Limited Branch, as Italian Lender, the Chase Manhattan
Bank, as Administrative Agent, and the financial
institutions signatory thereto, as participants, (d)
proposed Second Amendment to Line of Credit, dated as of
March 27, 1996 among Fleer Corp., the banks and other
financial institutions parties thereto and the Chase
Manhattan Bank, as Administrative Agent and (e) proposed
First Amendment to each of the Security Documents referred
to therein in substantially the forms of Exhibits B-1, B-2,
B-3, B-4 and B-5, respectively, hereto.
1.31. Final Order means an order or judgment of
the Bankruptcy Court entered by the Clerk of the Bankruptcy
Court on the docket in the Reorganization Cases, which has
not been reversed, vacated or stayed and as to which (a) the
time to appeal, petition for certiorari or move for a new
trial, reargument or rehearing has expired and as to which
no appeal, petition for certiorari or other proceedings for
a new trial, reargument or rehearing shall then be pending
or (b) if an appeal, writ of certiorari, new trial,
reargument or rehearing thereof has been sought, such order
or judgment of the Bankruptcy Court shall have been affirmed
by the highest court to which such order was appealed, or
certiorari shall have been denied or a new trial, reargument
or rehearing shall have been denied or resulted in no
modification of such order, and the time to take any further
appeal, petition for certiorari or move for a new trial,
reargument or rehearing shall have expired; provided, that
the possibility that a motion under Rule 60 of the Federal
Rules of Civil Procedure, or any analogous rule under the
Bankruptcy Rules, may be filed relating to such order shall
not cause such order not to be a Final Order.
1.32. General Unsecured Claim means any Unsecured
Claim other than an Affiliate Unsecured Claim.
1.33. Lien means any charge against or interest
in property or an interest in property to secure payment of
a debt or performance of an obligation.
1.34. Other Secured Claims means any Secured
Claim not constituting a Senior Secured Claim.
1.35. Petition Date means December 26, 1996, the
date on which each of the Debtors filed its voluntary
petition for relief under the Bankruptcy Code.
1.36. Plan of Reorganization means this Joint
Plan of Reorganization, including, without limitation, the
exhibits and schedules hereto, as the same may be amended or
modified from time to time in accordance with the terms
hereof.
1.37. Priority Non-Tax Claim means any Claim of a
kind specified in section 507(a)(2), (3), (4), (5), (6), (7)
or (9) of the Bankruptcy Code.
1.38. Priority Tax Claim means any Claim of a
governmental unit of the kind specified in section 507(a)(8)
of the Bankruptcy Code.
1.39. Ratable Proportion means, with reference to
any distribution on account of any Allowed Claim or Allowed
Equity Interest in any class or subclass, as applicable, a
distribution equal in amount to the ratio (expressed as a
percentage) that the amount of such Allowed Claim or Allowed
Equity Interest, as applicable, bears to the aggregate
amount of Allowed Claims or Allowed Equity Interests of the
same class or subclass.
1.40. Releasees means (a) (i) each of the Debtors
and (ii) their respective successors, predecessors,
assignors, assignees, parents and subsidiaries, (b) all
present and former officers, directors, trustees, partners,
employees, attorneys, accountants, financial advisors,
investment bankers, stockholders, affiliates, heirs,
receivers, conservators, beneficiaries, executors,
administrators, agents and advisors of or to any of the
entities identified in clause (a) above, and (c) any
Affiliate of any entity specified in clause (a) or (b)
above.
1.41. Rejection Claims means any Claim against
any of the Debtors arising from the rejection of any
executory contract or unexpired lease, including any Claim
of (i) a lessor for damages resulting from the rejection of
a lease of real property as any such Claim shall be
calculated in accordance with section 502(b)(6) of the
Bankruptcy Code or (ii) an employee for damages resulting
from the rejection of an employment agreement as any such
Claim shall be calculated in accordance with section
502(b)(7) of the Bankruptcy Code.
1.42. Reorganization Cases means the cases
commenced under chapter 11 of the Bankruptcy Code by the
Debtors on the Petition Date.
1.43. Reorganized means, with reference to any
Debtor, such Debtor (unless such Debtor is a Debtor for
which this Plan of Reorganization is not confirmed in
accordance with section 5.4 hereof) or any successor in
interest thereto from and after the Consummation Date.
1.44. Schedules means the schedules of assets and
liabilities and the statements of financial affairs filed by
the Debtors under section 521 of the Bankruptcy Code and the
Official Bankruptcy Forms of the Bankruptcy Rules as such
schedules and statements have been or may be supplemented or
amended.
1.45. Secured Claim means a Claim secured by a
Lien on Collateral to the extent of the value of such
Collateral, as determined in accordance with section 506(a)
of the Bankruptcy Code or, in the event that such Claim is
subject to setoff under section 553 of the Bankruptcy Code,
to the extent of such setoff.
1.46. Securities Act means the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder.
1.47. Senior Secured Claim means any Secured
Claim governed by any of the Existing Credit Agreements or
evidenced by any of the promissory notes issued thereunder
or any letter of credit issued by a bank or other financial
institution which is a party to any of the Existing Credit
Agreements for the account of Marvel Entertainment Group,
Inc. or any of its subsidiaries or any interest rate
agreement between Marvel Entertainment Group, Inc. or any of
its subsidiaries and a bank or other financial institution
which is a party to any of the Existing Credit Agreements.
1.48. Subsidiary Equity Interests means the
Equity Interests in any of the Debtors held by any of the
other Debtors.
1.49. Transaction means collectively (i) the
acquisition by Andrews Group Incorporated, a Delaware
corporation, or an affiliate thereof, from Reorganized
Marvel Entertainment Group, Inc. of a number of shares of
common stock, par value $.01 per share, of Reorganized
Marvel Entertainment Group, Inc. determined in accordance
with the Acquisition Agreement; and (ii) the acquisition by
Reorganized Marvel Entertainment Group, Inc. of all the
issued and outstanding shares of capital stock of Toy Biz,
Inc. not held by Marvel Entertainment Group, Inc. on the
Petition Date pursuant to the Acquisition Agreement or
pursuant to a merger agreement with Toy Biz, Inc.
1.50. Unsecured Claim means any Claim against a
Debtor that is not an Administration Expense Claim, a
Priority Non-Tax Claim, a Priority Tax Claim or a Secured
Claim.
1.51. U.S. Trustee means the United States
Trustee appointed under section 581, title 28, United States
Code to serve in the District of Delaware.
1.52. Warrants means, collectively, all incentive
stock options, non-qualified stock options and stock
appreciation rights granted under that certain Marvel
Entertainment Group, Inc. Amended and Restated Stock Option
Plan and any other options, warrants or rights, contractual
or otherwise, if any, to acquire an Equity Interest.
B. Interpretation; Application of
Definitions and Rules of Construction.
Unless otherwise specified, all section, schedule
or exhibit references in this Plan of Reorganization are to
the respective section in, article of, or schedule or
exhibit to, this Plan of Reorganization, as the same may be
amended, waived, or modified from time to time. The words
"herein," "hereof," "hereto," "hereunder," and other words
of similar import refer to this Plan of Reorganization as a
whole and not to any particular section, subsection or
clause contained in this Plan of Reorganization. A term
used herein that is not defined herein shall have the
meaning assigned to that term in the Bankruptcy Code. The
rules of construction contained in section 102 of the
Bankruptcy Code shall apply to the construction of this Plan
of Reorganization. The headings in this Plan of
Reorganization are for convenience of reference only and
shall not limit or otherwise affect the provisions hereof.
SECTION 2. PROVISIONS FOR PAYMENT OF
ADMINISTRATION EXPENSE CLAIMS
AND PRIORITY TAX CLAIMS
2.1. Administration Expense Claims.
On the Consummation Date, each holder of an
Allowed Administration Expense Claim shall be distributed on
account of such Allowed Administration Expense Claim an
amount in Cash equal to the amount of such Allowed
Administration Expense Claim, except to the extent that any
entity entitled to payment of any Allowed Administration
Expense Claim agrees to a different treatment of such
Administration Expense Claim; provided, that Allowed
Administration Expense Claims representing liabilities
incurred in the ordinary course of business by the Debtors
in Possession or liabilities arising under loans or advances
to or other obligations incurred by the Debtors in
Possession, whether or not incurred in the ordinary course
of business, shall be assumed and paid by the Reorganized
Debtors in accordance with the terms and subject to the
conditions of any agreements governing, instruments
evidencing or other documents relating to such transactions.
2.2. Compensation and Reimbursement Claims.
All entities seeking an award by the Bankruptcy
Court of compensation for services rendered or reimbursement
of expenses incurred through and including the Consummation
Date under sections 503(b)(2), 503(b)(3), 503(b)(4) or
503(b)(5) of the Bankruptcy Code (a) shall file their
respective final applications for allowances of compensation
for services rendered and reimbursement of expenses incurred
by the date that is 45 days after the Consummation Date and,
if granted such an award by the Bankruptcy Court, (b) shall
be paid in full in such amounts as are allowed by the
Bankruptcy Court (i) upon the later of (A) the Consummation
Date and (B) the date upon which the order relating to any
such Administration Expense Claim becomes a Final Order or
(ii) upon such other terms as may be mutually agreed upon
between such holder of an Administration Expense Claim and
the Debtors or, on and after the Consummation Date, the
Reorganized Debtors.
2.3. Priority Tax Claims.
On the Consummation Date, each holder of an
Allowed Priority Tax Claim shall be distributed on account
of such Allowed Priority Tax Claim a payment in Cash equal
to the amount of such Allowed Priority Tax Claim.
SECTION 3. CLASSIFICATION OF CLAIMS
AND EQUITY INTERESTS
Claims against and Equity Interests in the Debtors
are divided into the following classes:
Class 1 - Priority Non-Tax Claims
Class 2 - Senior Secured Claims
Class 3 - Other Secured Claims
Subclass 3A - Marvel Entertainment Group, Inc.
Subclass 3B - The Asher Candy Company
Subclass 3C - Fleer Corp.
Subclass 3D - Frank H. Fleer Corp.
Subclass 3E - Heroes World Distribution, Inc.
SubClass 3F Malibu Comics Entertainment, Inc.
Subclass 3G - Marvel Characters, Inc.
SubClass 3H Marvel Direct Marketing Inc.
Subclass 3I - SkyBox International Inc.
Class 4 - General Unsecured Claims
Subclass 4A - Marvel Entertainment Group, Inc.
Subclass 4B - The Asher Candy Company
Subclass 4C - Fleer Corp.
Subclass 4D - Frank H. Fleer Corp.
Subclass 4E - Heroes World Distribution, Inc.
SubClass 4F Malibu Comics Entertainment, Inc.
Subclass 4G - Marvel Characters, Inc.
SubClass 4H Marvel Direct Marketing Inc.
Subclass 4I - SkyBox International Inc.
Class 5 - Rejection Claims
Class 6 - Affiliate Unsecured Claims
Subclass 6A - Marvel Entertainment Group, Inc.
Subclass 6B - The Asher Candy Company
Subclass 6C - Fleer Corp.
Subclass 6D - Frank H. Fleer Corp.
Subclass 6E - Heroes World Distribution, Inc.
SubClass 6F Malibu Comics Entertainment, Inc.
Subclass 6G - Marvel Characters, Inc.
SubClass 6H Marvel Direct Marketing Inc.
Subclass 6I - SkyBox International Inc.
Class 7 - Class Securities Litigation Claims
Class 8 - Equity Interests
Subclass 8A - Marvel Entertainment Group, Inc.
Subclass 8B - Subsidiary Equity Interests
Class 9 - Warrants
SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS
AND EQUITY INTERESTS UNDER THE PLAN
4.1. Priority Non-Tax Claims (Class 1).
On the Consummation Date, each holder of an
Allowed Priority Non-Tax Claim shall be distributed on
account of such Allowed Priority Claim a payment in Cash
equal to the amount of its Allowed Priority Non-Tax Claim.
4.2. Senior Secured Claims (Class 2).
(a) Allowance of Senior Secured Claims. On the
Consummation Date, the Claims of each holder of a
Senior Secured Claim under each of the Existing Credit
Agreements shall be allowed in the amounts owing to
such holder under the applicable Existing Credit
Agreement.
(b) Treatment of Allowed Senior Secured Claims.
On the Consummation Date, each holder of an Allowed
Senior Secured Claim shall be treated on account of
such Allowed Senior Secured Claim in accordance with
the applicable Existing Credit Agreements as amended by
the applicable Existing Credit Agreements Amendments.
4.3. Other Secured Claims (Class 3).
On the Consummation Date, each Allowed Other
Secured Claim in each subclass of Class 3 shall be
reinstated as against the applicable Reorganized Debtor and
made unimpaired in accordance with section 1124(2) of the
Bankruptcy Code, notwithstanding any contractual provision
or applicable nonbankruptcy law that entitles the holder of
an Allowed Other Secured Claim to demand and receive payment
of such Claim prior to the stated maturity of such Claim
from and after the occurrence of a default.
4.4. General Unsecured Claims (Class 4).
(a) Marvel Entertainment Group, Inc., The Asher
Candy Company, Fleer Corp., Frank H. Fleer Corp.,
Malibu Comics Entertainment, Inc., Marvel Characters,
Inc., Marvel Direct Marketing, Inc. and Skybox
International Inc. (Subclasses 4A, 4B, 4C, 4D, 4F, 4G,
4H and 4I). On the Consummation Date, each holder of
an Allowed General Unsecured Claim in each of Subclass
4A (Marvel Entertainment Group, Inc.), Subclass 4B (The
Asher Candy Company), Subclass 4C (Fleer Corp.),
Subclass 4D (Frank H. Fleer Corp.), Subclass 4F (Malibu
Comics Entertainment, Inc.), Subclass 4G (Marvel
Characters, Inc.), Subclass 4H (Marvel Direct Marketing
Inc.) and Subclass 4I (Skybox International Inc.) of
Class 4 (General Unsecured Claims) shall, to the extent
not paid prior to the Consummation Date, be paid in
full by the applicable Reorganized Debtor in accordance
with the terms and subject to the conditions of any
agreement governing, instrument evidencing or other
document relating to such Claim.
(b) Heroes World Distribution, Inc. (Subclass
4E). On the Consummation Date, each holder of an
Allowed General Unsecured Claim in Subclass 4E (Heroes
World Distribution, Inc.) of Class 4 (General Unsecured
Claims) shall be paid on account of such Allowed
General Unsecured Claim a payment in cash equal to the
lesser of (i) its Allowed General Unsecured Claim and
(ii) in the event Marvel Entertainment Group, Inc.
elects to liquidate Heroes World Distribution, Inc.,
its Ratable Proportion of the net cash proceeds
realized from the liquidation of the properties and
interests in property of Heroes World Distribution,
Inc.
4.5. Rejection Claims (Class 5).
On the Consummation Date, each holder of an
Allowed Rejection Claim against the Debtors shall be paid on
account of such Allowed Rejection Claim a payment in cash
equal to such Allowed Rejection Claim; provided, however, in
the event that Allowed General Unsecured Claims against
Heroes World Distribution, Inc. are treated in accordance
with section 4.4(b)(ii) hereof, then the Allowed Rejection
Claims against Heroes World Distribution, Inc. shall be
treated in accordance with such section 4.4(b)(ii).
4.6. Affiliate Unsecured Claims (Class 6).
On the Consummation Date, each holder of an
Allowed Affiliate Unsecured Claim in each subclass of Class
6 (Affiliate Unsecured Claims) shall retain unaltered the
legal, equitable and contractual rights to which such
Allowed Claim entitles such holder and be made unimpaired in
accordance with section 1124(1) of the Bankruptcy Code.
4.7. Class Securities Litigation Claims (Class 7).
On the Consummation Date, each holder of any
Allowed Class Securities Litigation Claim Order shall be
distributed on account of such Allowed Class Securities
Litigation Claim a distribution in shares of common stock,
par value $.01 per share, of Marvel Entertainment Group,
Inc. valued at the per share price being paid for such
shares under the Acquisition Agreement equal to the amount
of such Allowed Class Securities Litigation Claim; provided,
that, taken together, the shares of common stock of
Reorganized Marvel Entertainment Group, Inc. issued or to be
issued to all holders of Claims and Equity Interests in
Class 7 (Class Securities Litigation Claims) and Subclass 8A
(Marvel Entertainment Group, Inc.) of Class 8 (Equity
Interests) shall not exceed 19.2% of the issued and
outstanding common stock of Reorganized Marvel Entertainment
Group, Inc.
4.8. Equity Interests (Class 8).
(a) Marvel Entertainment Group, Inc. (Subclass
8A). On the Consummation Date, each holder of an
Allowed Equity Interest in Marvel Entertainment Group,
Inc. shall retain unaltered the legal, equitable and
contractual rights to which such Allowed Equity
Interest entitles such holder, subject to the dilution
associated with the Transaction and section 4.7 above;
provided, that, taken together, the shares of common
stock of Reorganized Marvel Entertainment Group, Inc.
issued or to be issued to all holders of Claims and
Equity Interests in Class 7 (Class Securities
Litigation Claims) and Subclass 8A (Marvel
Entertainment Group, Inc.) of Class 8 (Equity Interest)
shall not exceed 19.2% of the issued and outstanding
common stock of Reorganized Marvel Entertainment Group,
Inc.
(b) Subsidiary Equity Interests (Subclass 8B).
On the Consummation Date, each holder of an Allowed
Subsidiary Interest shall retain unaltered the legal
equitable and contractual rights to which such Allowed
Subsidiary Equity Interest entitles such holder and be
made unimpaired in accordance with section 1124(1) of
the Bankruptcy Code.
4.9. Warrants (Class 9).
On the Consummation Date, the Warrants shall be
cancelled, and the holders of Warrants shall not be entitled
to, and shall not, receive or retain any property or
interest in property on account of such Class 9 Warrants.
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS
AND INTERESTS IMPAIRED AND NOT
IMPAIRED UNDER THE PLAN; ACCEPTANCE
OR REJECTION OF THE PLAN
5.1. Holders of Claims and Equity Interests Entitled to
Vote.
Each of Classes 2 (Senior Secured Claims),
Subclass 4E (Heroes World Distribution, Inc.) of Class 4
(General Unsecured Claims), Class 5 (Rejection Claims),
Class 7 (Securities Litigation Claims), Subclass 8A (Marvel
Entertainment Group) of Class 8 (Equity Interests) and Class
9 (Warrants) and, as applicable, each subclass thereof are
impaired hereunder, and the holders of Claims or Equity
Interests in each of Class 2 (Senior Secured Claims), Class
7 (Class Securities Litigation Claims) and Subclass 8A
(Marvel Entertainment Group) of Class 8 (Equity Interests)
and, as applicable, each subclass thereof are entitled to
vote separately on this Plan of Reorganization. Holders of
Equity Interests in Class 9 (Warrants) are not entitled to
vote on this Plan of Reorganization and are presumed to have
rejected it in accordance with section 1126(g) of the
Bankruptcy Code.
Each holder of an Allowed Claim or an Allowed
Equity Interest in an impaired class or subclass of Claims
against or Equity Interests in any Debtor other than holders
of Warrants in Class 9 (Warrants) shall be entitled to vote
separately to accept or reject this Plan of Reorganization
as provided in the order of the Bankruptcy Court fixing the
Ballot Date and otherwise approving or governing, as
applicable, the balloting procedures applicable to this Plan
of Reorganization, including, without limitation, the
solicitation of the votes to accept or reject this Plan of
Reorganization prior to the Petition Date from holders of
Allowed Claims in Class 2 (Senior Secured Claims). For
purposes of calculating the number of Allowed Claims held by
holders of Allowed Claims that have voted to accept or
reject this Plan of Reorganization under section 1126(c) of
the Bankruptcy Code, all Allowed Claims held by any entity
or any Affiliate thereof that acquired record ownership of
such Allowed Claims after the Petition Date shall be
aggregated and treated as one Allowed Claim.
Each of Classes 3 (Other Secured Claims), 4
(General Unsecured Claims) other than Subclass 4E (Heroes
World Distribution, Inc.) of Class 4 (General Unsecured
Claims), 5 (Rejection Claims), 6 (Affiliate Unsecured
Claims) and Subclass 8B (Subsidiary Equity Interests) of
Class 8 (Equity Interests) and, as applicable, each subclass
thereof are not impaired hereunder, and the holders of
Claims and Equity Interests in such classes and, as
applicable, each subclass thereof are conclusively presumed
under section 1126(f) of the Bankruptcy Code to have
accepted this Plan of Reorganization and are not entitled to
vote on this Plan of Reorganization.
5.2. Subtraction and Addition of Classes and Subclasses.
(a) Subtraction of Classes and Subclasses. Any
class or subclass of Claims that does not contain as an
element thereof an Allowed Claim or a Claim temporarily
allowed under Bankruptcy Rule 3018 as of the date of
the commencement of the Confirmation Hearing shall be
deemed subtracted from this Plan of Reorganization for
purposes of voting to accept or reject this Plan of
Reorganization and for purposes of determining
acceptance or rejection of this Plan of Reorganization
by such class or subclass under section 1129(a)(8) of
the Bankruptcy Code.
(b) Addition of Classes and Subclasses. In the
event that any subclass of Class 3 (Other Secured
Claims) would contain as elements thereof two or more
Secured Claims collateralized by different properties
or interests in property or collateralized by liens
against the same property or interest in property
having different priority, such Claims shall be divided
into separate subclasses of such subclass of Class 3
(Other Secured Claims).
5.3. Nonconsensual Confirmation.
If any impaired class of Claims or Equity
Interests entitled to vote shall not accept this Plan of
Reorganization by the requisite statutory majorities
provided in sections 1126(c) or 1126(d) of the Bankruptcy
Code, as applicable, the Debtors reserve the right, subject
to their obligations under the Acquisition Agreement, to
amend this Plan of Reorganization in accordance with section
14.2 hereof or undertake to have the Bankruptcy Court
confirm this Plan of Reorganization under section 1129(b) of
the Bankruptcy Code or both. The Debtors intend to seek
confirmation of this Plan of Reorganization under section
1129(b) of the Bankruptcy Code notwithstanding the deemed
rejection of this Plan of Reorganization by holders of
Equity Interests in Class 9 (Warrants).
5.4. Severability of Plan of Reorganization.
This Plan of Reorganization is, severally, a plan
of reorganization for each of the Debtors. In the event
that this Plan of Reorganization is not confirmed for all
Debtors, then this Plan of Reorganization may not be
confirmed for any Debtor; provided, that, notwithstanding
the foregoing, in the event that this Plan of Reorganization
is not confirmed for Heroes World Distribution, Inc., the
other Debtors may, subject to their obligations under the
Acquisition Agreement, waive this limitation and this Plan
of Reorganization may be confirmed for such other Debtors.
5.5. Revocation of Plan of Reorganization.
The Debtors reserve the right to revoke and
withdraw this Plan of Reorganization as to any or all
Debtors at any time prior to entry of the Confirmation
Order, subject to their obligations under the Acquisition
Agreement. In the event that this Plan of Reorganization is
so revoked or withdrawn as to any or all Debtors, then this
Plan of Reorganization shall be deemed null and void as it
relates to each such Debtor.
SECTION 6. MEANS OF IMPLEMENTATION
6.1. Closing of Transaction.
On the Consummation Date, the closing of the
Transaction shall occur in accordance with the Acquisition
Agreement and, if applicable, a merger agreement with Toy
Biz, Inc., and, on the terms and subject to the conditions
contained in such agreements, the Debtors shall receive the
consideration provided therein and shall make the
distributions provided hereunder.
6.2. Dismissal of Derivative Securities Litigation Claims.
The Derivative Securities Litigation Claims are
property of the estate of Marvel Entertainment Group, Inc.
under section 541 of the Bankruptcy Code. For good and
valuable consideration, including the benefits of this Plan
of Reorganization, and to facilitate expeditious and
effective reorganizations of the Debtors, on or after the
Consummation Date, all Derivative Securities Litigation
Claims shall be dismissed with prejudice and the Reorganized
Debtors shall be entitled to effect any actions may be
necessary or appropriate, and to execute, deliver and file
in all courts in which the Derivative Securities Litigation
Claims are pending, all documents and instruments,
including, without limitation, stipulations of dismissal of
the Derivative Securities Litigation Claims, to fully
implement and effect the dismissal of the Derivative
Securities Litigation Claims. The Confirmation Order shall
provide that all named plaintiffs in the action relating to
the Derivative Securities Litigation Claim and their
respective servants, agents, attorneys and representatives
shall, on and after the Confirmation Date, be permanently
enjoined, stayed and restrained from pursuing or prosecuting
any of the Derivative Securities Litigation Claims.
6.3. Board of Directors of the Reorganized Debtors.
The initial members of the Board of Directors of
the Reorganized Debtors are or shall be stated in the
Disclosure Statement under "GENERAL INFORMATION - Board of
Directors and Executive Officers of the Reorganized Debtors"
or an amendment or supplement to the Disclosure Statement or
such other filing as may be made with the Bankruptcy Court.
6.4. Officers of the Reorganized Debtors.
The initial officers of the Reorganized Debtors
are stated in the Disclosure Statement under "GENERAL
INFORMATION - Board of Directors and Executive Officers of
the Reorganized Debtors." The selection of officers of the
Reorganized Debtors after the Consummation Date shall be as
provided in the articles or certificates of incorporation
and bylaws.
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS
7.1. Date of Distributions.
Any distributions and deliveries to be made
hereunder shall be made on the Consummation Date or as soon
as practicable thereafter. In the event that any payment or
act under this Plan of Reorganization is required to be made
or performed on a date that is not a Business Day, then the
making of such payment or the performance of such act may be
completed on the next succeeding Business Day, but shall be
deemed to have been completed as of the required date.
7.2. Entities to Exercise Function of Disbursing Agent.
All distributions under this Plan of
Reorganization shall be made by the applicable Reorganized
Debtor as Disbursing Agent or such other entity designated
by the applicable Reorganized Debtor as a Disbursing Agent.
A Disbursing Agent shall not be required to give any bond or
surety or other security for the performance of its duties
unless otherwise ordered by the Bankruptcy Court; and, in
the event that a Disbursing Agent is so otherwise ordered,
all costs and expenses of procuring any such bond or surety
shall be borne by the applicable Reorganized Debtor.
7.3. Surrender and Cancellation of Instruments.
Each holder of a promissory note, Warrant or other
instrument evidencing a Claim (other than a holder of a
promissory note issued under any of the Existing Credit
Agreements) shall surrender such promissory note, Warrant or
instrument to the Disbursing Agent, and the Disbursing Agent
shall distribute or shall cause to be distributed to the
holder thereof the appropriate distribution (if any)
hereunder. No distribution hereunder shall be made to or on
behalf of any holder of such a Claim unless and until such
promissory note, Warrant or instrument is received or the
unavailability of such note, Warrant or instrument is
reasonably established to the satisfaction of the Disbursing
Agent. In accordance with section 1143 of the Bankruptcy
Code, any such holder of such a Claim that fails to
(a) surrender or cause to be surrendered such promissory
note, Warrant or instrument or to execute and deliver an
affidavit of loss and indemnity reasonably satisfactory to
the Disbursing Agent and (b) in the event that the
Disbursing Agent requests, furnish a bond in form and
substance (including, without limitation, amount) reasonably
satisfactory to the Disbursing Agent, within 5 years from
and after the Consummation Date shall be deemed to have
forfeited all rights, claims and interests and shall not
participate in any distribution hereunder.
7.4. Delivery of Distributions.
Subject to Bankruptcy Rule 9010, all distributions
to any holder of an Allowed Claim shall be made at the
address of such holder as scheduled on the Schedules filed
with the Bankruptcy Court unless the Debtors or Reorganized
Debtors, as applicable, have been notified in writing of a
change of address, including, without limitation, by the
filing of a proof of claim or interest by such holder that
relates an address for such holder different from the
address reflected on such Schedules for such holder. In the
event that any distribution to any holder is returned as
undeliverable, the Disbursing Agent shall use reasonable
efforts to determine the current address of such holder, but
no distribution to such holder shall be made unless and
until the Disbursing Agent has determined the then current
address of such holder, at which time such distribution
shall be made to such holder without interest; provided that
such distributions shall be deemed unclaimed property under
section 347(b) of the Bankruptcy Code at the expiration of
one year from the Consummation Date. After such date, all
unclaimed property or interest in property shall revert to
the applicable Reorganized Debtor, and the claim of any
other holder to such property or interest in property shall
be discharged and forever barred. The distributions to be
made on the Consummation Date to each holder of an Allowed
Senior Secured Claim shall be made to The Chase Manhattan
Bank, as agent under the Existing Credit Agreements, for
distribution to holders of Allowed Senior Secured Claims in
accordance with the provisions of the Existing Credit
Agreements as amended by the Existing Credit Agreements
Amendments.
7.5. Manner of Payment Under Plan of Reorganization.
At the option of the Reorganized Debtors, any Cash
payment to be made hereunder may be made by a check or wire
transfer or as otherwise required or provided in applicable
agreements.
7.6. Distributions After Consummation Date.
Distributions made after the Consummation Date to
holders of Claims that are not Allowed Claims as of the
Consummation Date but which later become Allowed Claims
shall be deemed to have been made on the Consummation Date.
7.7. Rights And Powers Of Disbursing Agent.
(a) Powers of the Disbursing Agent. The
Disbursing Agent shall be empowered to (a) effect all
actions and execute all agreements, instruments and
other documents necessary to implement this Plan of
Reorganization (b) make distributions contemplated
hereby, (c) liquidate property as required to make
distributions contemplated hereby, (d) comply herewith
and the obligations hereunder, (e) employ professionals
to represent it with respect to its responsibilities,
and (f) exercise such other powers as may be vested in
the Disbursing Agent by order of the Bankruptcy Court,
pursuant to this Plan of Reorganization, or as deemed
by the Disbursing Agent to be necessary and proper to
implement the provisions hereof.
(b) Expenses Incurred on or After the
Consummation Date. Except as otherwise ordered by the
Bankruptcy Court, the amount of any fees and expenses
incurred by the Disbursing Agent on or after the
Consummation Date (including, without limitation,
taxes) and any compensation and expense reimbursement
claims (including, without limitation, reasonable fees
and expenses of counsel) made by the Disbursing Agent,
shall be paid in Cash by the Reorganized Debtors.
(c) Exculpation. Each Disbursing Agent, from and
after the Consummation Date, is hereby exculpated by
all entities, including, without limitation, holders of
Claims and Equity Interests and other parties in
interest from any and all claims, causes of action and
other assertions of liability (including, without
limitation, breach of fiduciary duty) arising out of
the discharge by such Disbursing Agent of the powers
and duties conferred upon it hereby or any order of the
Bankruptcy Court entered pursuant to or in furtherance
hereof, or applicable law, except solely for actions or
omissions arising out of the gross negligence or
willful misconduct of such Disbursing Agent. No holder
of a Claim or an Equity Interest or other party in
interest shall have or pursue any claim or cause of
action against the Disbursing Agent for making payments
in accordance herewith or for implementing the terms
hereof.
SECTION 8. PROCEDURES FOR TREATING DISPUTED
CLAIMS UNDER THE PLAN OF REORGANIZATION
8.1. Objections to Claims.
The Reorganized Debtors shall be entitled to
object to Claims.
8.2. No Distributions Pending Allowance.
Notwithstanding any other provision hereof, if any
portion of a Claim is a Disputed Claim, no payment or
distribution provided hereunder shall be made on account of
the portion of such Claim that is a Disputed Claim unless
and until such Disputed Claim becomes an Allowed Claim but
the payment or distribution provided hereunder shall be made
on account of the portion of such Claim that is an Allowed
Claim.
8.3. Distributions After Allowance.
Payments and distributions to each holder of a
Disputed Claim or Equity Interest or any other Claim or
Equity Interest that is not an Allowed Claim or Equity
Interest, to the extent that such Claim or Equity Interest
ultimately becomes an Allowed Claim or Equity Interest,
shall be made in accordance with the provisions hereof
governing the class or subclass of Claims or Equity
Interests in which such Claim or Equity Interest is
classified. As soon as practicable after the date that the
order or judgment of the Bankruptcy Court allowing any
Disputed Claim or Equity Interest or any other Claim or
Equity Interest that is not an Allowed Claim or Equity
Interest becomes a Final Order, the Disbursing Agent shall
distribute to the holders of such Claim or Equity Interest
any payment or property that would have been distributed to
such holder if the Claim or Equity Interest had been allowed
on the Consummation Date, without any interest thereon.
SECTION 9. PROVISIONS GOVERNING EXECUTORY CONTRACTS
AND UNEXPIRED LEASES UNDER THE PLAN
9.1. General Treatment.
This Plan of Reorganization constitutes a motion
by the Debtors governed by this Plan of Reorganization to
assume, as of the Consummation Date, all executory contracts
and unexpired leases to which any of the Debtors are
parties, except for an executory contract or unexpired lease
that (a) has been assumed or rejected pursuant to Final
Order of the Bankruptcy Court, (b) is specifically rejected
on Schedule 9.1 hereto filed by the Debtors on or before the
commencement of the hearing on approval of the Disclosure
Statement or such later date as may be fixed by the
Bankruptcy Court, (c) is the subject of a separate motion
filed under section 365 of the Bankruptcy Code by the
Debtors prior to the filing of the schedule described in
section 9.1(b) hereof or (d) is otherwise assumed hereunder.
For purposes hereof, each executory contract and unexpired
lease listed on Schedule 9.1 hereto that relates to the use
of occupancy of real property shall include (a)
modifications, amendments, supplements, restatements, or
other agreements made directly or indirectly by any
agreement, instrument, or other document that in any manner
affects such executory contract or unexpired lease, without
regard to whether such agreement, instrument or other
document is listed on Schedule 9.1 hereto and (b) executory
contracts or unexpired leases appurtenant to the premises
listed on Schedule 9.1 hereto including all easements,
licenses, permits, rights, privileges, immunities, options,
rights of first refusal, powers, uses, usufructs, reciprocal
easement agreements, vault, tunnel or bridge agreements or
franchises, and any other interests in real estate or rights
in rem relating to such premises to the extent any of the
foregoing are executory contracts or unexpired leases,
unless any of the foregoing agreements are assumed.
9.2. Amendments to Schedule; Effect of Amendments.
The Debtors shall assume each of the executory
contracts and unexpired leases not listed on Schedule 9.1
hereto; provided, that the Debtors may at any time on or
before the first Business Day before the date of the
commencement of the Confirmation Hearing amend Schedule 9.1
hereto to delete or add any executory contract or unexpired
lease thereto, in which event such executory contract or
unexpired lease shall be deemed to be, respectively, assumed
and, if applicable, assigned as provided therein, or
rejected. The Debtors shall provide notice of any
amendments to Schedule 9.1 hereto to the parties to the
executory contracts or unexpired leases affected thereby.
The fact that any contract or lease is scheduled on Schedule
9.1 hereto shall not constitute or be construed to
constitute an admission by any Debtor that any Debtor has
any liability thereunder.
9.3. Effect of Rejection.
In no event shall the rejection of executory
contracts and unexpired leases rejected under sections 9.1
and 9.2 hereof have a Material Adverse Effect (as such term
is defined in each of the Existing Credit Agreements).
9.4. Bar to Rejection Damage Claims.
In the event that the rejection of an executory
contract or unexpired lease by any of the Debtors results in
damages to the other party or parties to such contract or
lease, a Claim for such damages, if not heretofore evidenced
by a filed proof of claim, shall be forever barred and shall
not be enforceable against the Debtors, or their respective
properties or interests in property as agents, successors,
or assigns, unless a proof of claim is filed with the
Bankruptcy Court and served upon counsel for the Debtors on
or before 30 days after the earlier to occur of (a) the
giving of notice to such party under section 9.1 or 9.2
hereof and (b) the entry of an order by the Bankruptcy Court
authorizing rejection of a particular executory contract or
lease.
SECTION 10. CONDITIONS PRECEDENT TO CONFIRMATION
DATE AND CONSUMMATION DATE
10.1. Conditions Precedent to Confirmation of Plan of
Reorganization.
The confirmation of this Plan of Reorganization is
subject to satisfaction of the following condition
precedent:
(a) Acquisition Agreement. The Acquisition
Agreement shall then be in full force and effect.
10.2. Conditions Precedent to Consummation Date of Plan
of Reorganization.
The occurrence of the Consummation Date of this
Plan of Reorganization is subject to satisfaction of the
following conditions precedent:
(a) Finality of the Confirmation Order. The
Clerk of the Bankruptcy Court shall have entered the
Confirmation Order, and the Confirmation Order shall
have become a Final Order;
(b) Acquisition Agreement. All conditions
precedent to the obligations of the Purchaser (as such
term is defined in the Acquisition Agreement) and the
Seller (as such term is defined in the Acquisition
Agreement) shall have been satisfied or waived in
accordance with the Acquisition Agreement;
(c) Acquisition of Toy Biz. Marvel Entertainment
Group, Inc. shall directly or indirectly have acquired
all of the issued and outstanding shares of capital
stock of Toy Biz, Inc. not held by Marvel Entertainment
Group, Inc. directly or indirectly on the Petition
Date; and
(d) Execution and Delivery of Documents. All
other actions and documents necessary to implement the
terms and provisions hereof shall have been effected
or executed and delivered.
10.3. Waiver of Conditions Precedent.
Each of the conditions precedent in sections 10.1
and 10.2 hereof may be waived, in whole or in part, by the
Debtors, subject to their obligations under the Acquisition
Agreement. Any such waiver of a condition precedent in
section 10.1 or 10.2 hereof may be effected at any time,
without notice, without leave or order of the Bankruptcy
Court and without any formal action other than proceeding to
consummate this Plan of Reorganization.
SECTION 11. EFFECT OF CONFIRMATION
11.1. General Authority.
Until the Consummation Date, the Bankruptcy Court
shall retain custody and jurisdiction of each of the
Debtors, its properties and interests in property and its
operations. On the Consummation Date, each of the Debtors,
its properties and interests in property and its operations
shall be released from the custody and jurisdiction of the
Bankruptcy Court, except as provided in section 15.1 hereof.
11.2. Discharge of Debtors.
Subject to section 11.5 hereof, the treatment of
all Claims against or Equity Interests in each of the
Debtors hereunder shall be in exchange for and in complete
satisfaction, discharge and release of all Claims against or
Equity Interests in such Debtor of any nature whatsoever,
known or unknown, including, without limitation, any
interest accrued or expenses incurred thereon from and after
the Petition Date, or against its estate or properties or
interests in property. Except as otherwise provided herein,
upon the Consummation Date, all Claims against and Equity
Interests in each of the Debtors will be satisfied,
discharged and released in full exchange for the
consideration provided hereunder. All entities shall be
precluded from asserting against any Debtor or Reorganized
Debtor or their respective properties or interests in
property, any other Claims based upon any act or omission,
transaction or other activity of any kind or nature that
occurred prior to the Consummation Date.
11.3. Injunction.
Except as otherwise expressly provided in the
Confirmation Order, all entities who have held, hold or may
hold Claims against or Equity Interests in any of the
Debtors are permanently enjoined, on and after the
Consummation Date from directly or derivatively (a)
commencing or continuing in any manner any action or other
proceeding of any kind relating to any such Claim or Equity
Interest against any such Debtor, (b) the enforcement,
attachment, collection or recovery by any manner or means of
any judgment, award, decree or order against any such Debtor
(c) creating, perfecting, or enforcing any encumbrance of
any kind against any such Debtor or against the property or
interests in property of any such Debtor on account of any
such Claim, and (d) asserting any right of setoff,
subrogation, or recoupment of any kind against any
obligation due any such Debtor or against the property or
interests in property of any such Debtor on account of any
such Claim. The benefits of such injunction shall extend
the Releasees and their respective properties and interests
in property. In connection therewith, such injunction shall
permanently enjoin and restrain all entities from effecting
any of the following actions (other than actions commenced
to enforce any right or obligation provided hereby):
commencement or continuation of any action or proceeding
against or affecting any Debtor or any property or interest
in property of such Debtor, and commencement or continuation
of any action or proceeding against or affecting any of the
Releasees or any property or interest in property of the
Releasees in connection herewith.
11.4. Term of Injunctions or Stays.
Unless otherwise provided, all injunctions or
stays provided for in the Reorganization Cases under
sections 105 or 362 of the Bankruptcy Code, or otherwise,
and in existence on the Confirmation Date, shall remain in
full force and effect until the Consummation Date.
11.5. Indemnification Obligations.
Notwithstanding any other provision hereof to the
contrary, the obligations of the Debtors to indemnify its
present and all former directors or officers that were
directors or officers, respectively, at any time preceding
the Petition Date against any obligations pursuant to
certificates or articles of incorporation, bylaws,
applicable state law or any of the foregoing shall survive
confirmation of this Plan of Reorganization, remain
unaffected thereby and not be discharged in accordance with
section 1141 of the Bankruptcy Code, irrespective of whether
indemnification is owed in connection with an event
occurring before, on or after the Petition Date.
SECTION 12. RELEASES AND WAIVER OF CLAIMS
12.1. General Release of Releasees.
Effective as of the Consummation Date, each of the
Debtors and Debtors in Possession releases the Releasees
from any and all costs, expenses, claims, causes of action
or liability whatsoever, known or unknown, liquidated or
unliquidated, matured or not matured, contingent or direct,
and whether arising at common law, in equity, or under any
statute which such Debtor has as of, or prior to, the
Consummation Date against the Releasees which in any way
relate to such Debtor or the applicable Reorganization Case.
12.2. Release from Claims and Liabilities.
(a) Except for those obligations arising
hereunder, effective as of the Consummation Date, each
of the Debtors hereby is released and discharged from
any and all claims and liabilities arising from or in
connection with, by reason of, or related in any way
to, such Debtor, the Senior Secured Claims, the
Existing Credit Agreement, any other Claim, the
Reorganization Case of such Debtor or this Plan of
Reorganization, and the Releasees hereby are released
and discharged from any and all claims or liabilities
arising from actions effected in their capacity as
present or, in the event applicable, former officers
and directors of any of the Debtors and their
Affiliates, and from any and all Causes of Action of
any entity, including, without limitation, each holder
of a Senior Secured Claim, or any other Claim and all
of the successors, predecessors, assignors, assignees,
parents, subsidiaries, present and former directors,
trustees, officers, employees, agents, attorneys,
advisors, accountants, financial advisors, investment
bankers, stockholders, partners, affiliates, heirs,
receivers, conservators, beneficiaries, executors and
administrators of or to the holders of Senior Secured
Claims or other Claims, arising from or in connection
with, by reason of, or related in any way to, such
Debtor, the Senior Secured Claims, the Existing Credit
Agreement, any other Claim, the Reorganization Case of
such Debtor or this Plan of Reorganization, including,
without limitation, in each case any claims arising
from,
(i) the ownership, management, and operation
of the Debtors by any Releasee;
(ii) the preparation by any Releasee of
financial statements in respect of any
or all of the Debtors;
(iii) the actions by the Releasees to
restructure the Existing Credit
Agreement, including, without
limitation, any actions in connection
with or related to the formulation,
negotiation, preparation, dissemination,
confirmation or consummation of this
Plan of Reorganization and any
agreement, instrument or other document
issued hereunder or related hereto.
(b) Effective as of the Consummation Date, the
Releasees are released and discharged from any and all
claims, obligations, rights, causes of action and
liabilities which any holder of a Claim against or
Equity Interest in any of the Debtors may be entitled
to assert, whether known or unknown, foreseen or
unforeseen, existing or hereafter arising, based in
whole or in part upon any act or omission or other
event occurring on or at any time prior to the
Consummation Date in any way relating to the Debtors,
the Reorganization Cases or this Plan of
Reorganization.
(c) Nothing contained herein shall affect any
rights of the Releasees to assert and prosecute (i) any
direct claim, counterclaim, cross-claim, separate
action, or similar claim against any entity which
maintains that it has a cause of action of the kind
described in this section 12.2 (other than a claim
described in clause (ii) immediately below) against a
Releasee that has not been discharged hereunder or (ii)
any claim for indemnification, contribution or
otherwise, however denominated, against any entity
relating to any cause of action against such Releasee
that has not been released and discharged hereunder.
(d) Each holder of a Claim, including, without
limitation, a Senior Secured Claim shall be deemed to
have agreed to the provision of this section 12.2, and
shall be bound thereby, by reason of, among other
things, its acceptance of this Plan of Reorganization
and its receipt of any distributions hereunder.
(e) Notwithstanding anything to the contrary
herein, the Reorganized Debtors and their respective
Affiliates shall not be released from any obligations
under the Existing Credit Agreements as amended by the
Existing Credit Agreements Amendments by operation of
this section 12.
12.3. Avoidance Actions.
Effective as of the Consummation Date, the Debtors
waive the right to prosecute and release any avoidance or
recovery actions under sections 545, 547, 548, 549, 550, 551
and 553 of the Bankruptcy Code, that belong to the Debtors
or Debtors in Possession, other than any such actions that
may be pending on such date. The Reorganized Debtors shall
retain and may prosecute any such actions that may be
pending on such date.
SECTION 13. CREDITORS' COMMITTEE
13.1. Dissolution of Creditors' Committee.
The Creditors' Committee shall be dissolved on the
Consummation Date.
13.2. Exculpation.
Each member of the Creditors' Committee and each
of their respective advisors and attorneys, effective as of
the Consummation Date, is hereby exculpated by all entities,
including, without limitation, holders of Claims against and
Equity Interests in any of the Debtors and other parties in
interest, from any and all Claims, Causes of Action and
other assertions of liability (including, without
limitation, breach of fiduciary duty), whether known or
unknown, foreseen or unforeseen, existing or arising
hereafter, arising out of or related to the Debtors, the
Reorganization Cases or the exercise by such entities of
their functions as members of or advisors to or attorneys
for any such committee or otherwise under applicable law,
including, without limitation, in connection with or related
to the formulation, negotiation, preparation, dissemination,
confirmation and consummation of this Plan of Reorganization
and any agreement, instrument or other document issued
hereunder or related hereto.
SECTION 14. RETENTION OF JURISDICTION
14.1. Retention of Jurisdiction.
The Bankruptcy Court may retain jurisdiction of
and, if the Bankruptcy Court exercises its retained
jurisdiction, shall have exclusive jurisdiction of all
matters arising out of, and related to, the Reorganization
Cases and this Plan of Reorganization pursuant to, and for
the purposes of, sections 105(a) and 1142 of the Bankruptcy
Code and for, among other things, the following purposes:
(a) To hear and determine pending applications
for the assumption or rejection of executory contracts
or unexpired leases, if any are pending, and the
allowance of Claims resulting therefrom;
(b) To determine any and all adversary
proceedings, applications and contested matters;
(c) To ensure that distributions to holders of
Allowed Claims and Allowed Equity Interests are
accomplished as provided herein;
(d) To hear and determine any timely objections
to Administration Expense Claims or to proofs of claim
and equity interests filed, both before and after the
Confirmation Date, including, without limitation, any
objections to the classification of any Claim or Equity
Interest, and to allow or disallow any Disputed Claim
or Equity Interest, in whole or in part;
(e) To enter and implement such orders as may be
appropriate in the event the Confirmation Order is for
any reason stayed, revoked, modified, or vacated;
(f) To issue such orders in aide of execution of
this Plan of Reorganization, to the extent authorized
by section 1142 of the Bankruptcy Code;
(g) To consider any amendments to or
modifications of this Plan of Reorganization, to cure
any defect or omission, or reconcile any inconsistency
in any order of the Bankruptcy Court, including,
without limitation, the Confirmation Order;
(h) To hear and determine all applications for
awards of compensation for services rendered and
reimbursement of expenses incurred prior to the
Consummation Date;
(i) To hear and determine disputes arising in
connection with the interpretation, implementation, or
enforcement of this Plan of Reorganization;
(j) To hear and determine matters concerning
state, local and federal taxes in accordance with
sections 346, 505, and 1146 of the Bankruptcy Code;
(k) To hear any other matter not inconsistent
with the Bankruptcy Code;
(l) To hear and determine all disputes involving
the existence, scope and nature of the discharges
granted under section 11.2 hereof, the injunction
issued under section 11.3 hereof and the releases
granted under section 12 hereof;
(m) To issue injunctions and effect any other
actions that may be necessary or desirable to restrain
interference by any entity with the consummation or
implementation of this Plan of Reorganization; and
(n) To enter a final decree closing the
Reorganization Cases.
14.2. Amendment of Plan of Reorganization.
Subject to the Acquisition Agreement, amendments
of this Plan of Reorganization may be proposed in writing by
the Debtors at any time before confirmation, provided that
this Plan of Reorganization, as amended, satisfies the
conditions of sections 1122 and 1123 of the Bankruptcy Code,
and the Debtors shall have complied with section 1125 of the
Bankruptcy Code. Subject to the Acquisition Agreement, this
Plan of Reorganization may be amended at any time after
confirmation and before substantial consummation, provided
that this Plan of Reorganization, as amended, satisfies the
requirements of sections 1122 and 1123 of the Bankruptcy
Code and the Bankruptcy Court, after notice and a hearing,
confirms this Plan of Reorganization as amended under
section 1129 of the Bankruptcy Code and the circumstances
warrant such amendments. A holder of a Claim or Equity
Interest that has accepted this Plan of Reorganization shall
be deemed to have accepted this Plan of Reorganization as
amended if the proposed amendment does not materially and
adversely change the treatment of the Claim or Equity
Interest of such holder.
SECTION 15. MISCELLANEOUS PROVISIONS
15.1. Payment of Statutory Fees.
All fees payable under section 1930, chapter 123,
title 28, United States Code, as determined by the
Bankruptcy Court at the Confirmation Hearing, shall be paid
on the Consummation Date. Any such fees accrued after the
Consummation Date will constitute an Allowed Administration
Expense Claim and be treated in accordance with section 2.1
hereof.
15.2. Retiree Benefits.
On and after the Consummation Date, pursuant to
section 1129(a)(13) of the Bankruptcy Code, the Reorganized
Debtors shall, subject to the provisions of section 9.4
hereof, continue to pay all retiree benefits (within the
meaning of section 1114 of the Bankruptcy Code), at the
level established in accordance with subsection (e)(1)(B) or
(g) of section 1114 of the Bankruptcy Code, at any time
prior to the Confirmation Date, for the duration of the
period each Debtor has obligated itself to provide such
benefits.
15.3. Compliance with Tax Requirements.
Withholding. In connection with the consummation
of this Plan of Reorganization, the Debtors and shall comply
with all withholding and reporting requirements imposed by
any taxing authority, and all distributions hereunder shall
be subject to such withholding and reporting requirements.
15.4. Recognition of Guarantee Rights.
The classification of and manner of satisfying all
Claims hereunder take into account (a) the existence of
guarantees by certain Debtors of obligations of other
Debtors and (b) the fact that the Debtors may be joint
obligors with each other or other entities with respect to
an obligation. All Claims against the Debtors based upon
any such guarantees or joint obligations shall be discharged
in the manner provided in this Plan of Reorganization;
provided, that no creditor shall be entitled to receive more
than a single satisfaction of its Allowed Claims.
15.5. Severability of Plan Provisions.
In the event that, prior to the Confirmation Date,
any term or provision of this Plan of Reorganization is held
by the Bankruptcy Court to be invalid, void or
unenforceable, the Bankruptcy Court shall, with the consent
of the Debtors, have the power to alter and interpret such
term or provision to make it valid or enforceable to the
maximum extent practicable, consistent with the original
purpose of the term or provision held to be invalid, void or
unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any
such holding, alteration or interpretation, the remainder of
the terms and provisions hereof shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated by such holding, alteration or interpretation.
The Confirmation Order shall constitute a judicial
determination and shall provide that each term and provision
hereof, as it may have been altered or interpreted in
accordance with the foregoing, is valid and enforceable
pursuant to its terms.
15.6. Governing Law.
Except to the extent that the Bankruptcy Code or
other federal law is applicable, or to the extent an Exhibit
hereto provides otherwise, the rights, duties and
obligations arising under this Plan of Reorganization shall
be governed by, and construed and enforced in accordance
with, the laws of the State of New York.
15.7. Notices.
All notices, requests, and demands to or upon the
Debtors to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or
made when actually delivered or, in the case of notice by
facsimile transmission, when received and telephonically
confirmed, addressed as follows:
If to the Debtors:
MARVEL ENTERTAINMENT GROUP, INC.
387 Park Avenue South
12th Floor
New York, New York 10016
Attn: Steven R. Isko, Esq.
Telephone: (212) 696-0808
Telecopier: (212) 576-9349
-and-
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Attn: Harvey R. Miller, Esq.
Marcia L. Goldstein, Esq.
Edward A.C. Sutherland, Esq.
Telephone: (212) 310-8000
Telecopier: (212) 310-8007
-and-
YOUNG, CONAWAY, STARGATT & TAYLOR
Rodney Square North
Wilmington, Delaware 19899
Attn: James L. Patton, Jr., Esq.
Telephone: (302) 571-6600
Telecopier: (302) 571-1253
If to the holders of Senior Secured Claims:
SIMPSON THACHER & BARTLETT
425 Lexington Avenue
New York, New York 10017
Attn: Mark J. Thompson, Esq.
Telephone: (212) 455-2000
Telecopier: (212) 455-2502
Dated: Wilmington, Delaware
December 27, 1996
Respectfully submitted,
MARVEL ENTERTAINMENT GROUP, INC.
THE ASHER CANDY COMPANY
FLEER CORP.
FRANK H. FLEER CORP.
HEROES WORLD DISTRIBUTIONS, INC.
MALIBU COMICS ENTERTAINMENT, INC.
MARVEL CHARACTERS, INC.
MARVEL DIRECT MARKETING, INC.
SKYBOX INTERNATIONAL INC.
By:
Name: Steven R. Isko, Esq.
Title: Vice President Legal
Affairs
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtors
and Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
-and-
YOUNG, CONAWAY, STARGATT & TAYLOR
Attorneys for the Debtors
and Debtors in Possession
Rodney Square North
Wilmington, Delaware 19899
(302) 571-6600
By:
James L. Patton, Jr.
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND INTERPRETATION . . . . . . 1
A. Definitions . . . . . . . . . . . . . . . . 1
B. Interpretation; Application of
Definitions and Rules of Construction . . . 9
SECTION 2. PROVISIONS FOR PAYMENT OF ADMINISTRATION
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS . . 10
2.1. Administration Expense Claims . . . . . . . 10
2.2. Compensation and Reimbursement Claims . . . 10
2.3. Priority Tax Claims . . . . . . . . . . . . 10
SECTION 3. CLASSIFICATION OF CLAIMS AND EQUITY
INTERESTS . . . . . . . . . . . . . . . . . 11
SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS
AND EQUITY INTERESTS UNDER THE PLAN . . . . 12
4.1. Priority Non-Tax Claims (Class 1) . . . . . 12
4.2. Senior Secured Claims (Class 2) . . . . . . 12
(a) Allowance of Senior Secured Claims . . 12
(b) Treatment of Allowed Senior Secured
Claims . . . . . . . . . . . . . . . . 12
4.3. Other Secured Claims (Class 3) . . . . . . 12
4.4. General Unsecured Claims (Class 4) . . . . 12
(a) Marvel Entertainment Group, Inc., The
Asher Candy Company, Fleer Corp., Frank
H. Fleer Corp., Malibu Comics
Entertainment, Inc., Marvel Characters,
Inc., Marvel Direct Marketing, Inc. and
Skybox International Inc. (Subclasses
4A, 4B, 4C, 4D, 4F, 4G, 4H and 4I) . . 13
4.5. Rejection Claims (Class 5). . . . . . . . . 13
4.6. Affiliate Unsecured Claims (Class 6) . . . 14
4.7. Class Securities Litigation Claims (Class 7). 14
4.8. Equity Interests (Class 8) . . . . . . . . 14
4.9. Warrants (Class 9) . . . . . . . . . . . . 15
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS AND
INTERESTS IMPAIRED AND NOT IMPAIRED UNDER
THE PLAN; ACCEPTANCE OR REJECTION OF THE
PLAN . . . . . . . . . . . . . . . . . . . 15
5.1. Holders of Claims and Equity Interests
Entitled to Vote . . . . . . . . . . . . . 15
5.2. Subtraction and Addition of Classes and
Subclasses . . . . . . . . . . . . . . . . 16
(a) Subtraction of Classes and
Subclasses . . . . . . . . . . . . . . 16
(b) Addition of Classes and Subclasses . . 16
5.3. Nonconsensual Confirmation. . . . . . . . . 16
5.4. Severability of Plan of Reorganization . . 17
5.5. Revocation of Plan of Reorganization . . . 17
SECTION 6. MEANS OF IMPLEMENTATION . . . . . . . . . . 17
6.1. Closing of Transaction . . . . . . . . . . 17
6.2. Dismissal of Derivative Securities
Litigation Claims. . . . . . . . . . . . . 18
6.3. Board of Directors . . . . . . . . . . . . 18
6.4. Officers of the Reorganized Debtors . . . . 18
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS . . . . 19
7.1. Date of Distributions . . . . . . . . . . . 19
7.2. Entities to Exercise Function of Disbursing
Agent . . . . . . . . . . . . . . . . . . . 19
7.3. Surrender and Cancellation of Instruments . 19
7.4. Delivery of Distributions . . . . . . . . . 20
7.5. Manner of Payment Under Plan of
Reorganization . . . . . . . . . . . . . . 20
7.6. Distributions After Consummation Date . . . 20
7.7. Rights And Powers Of Disbursing Agent . . . 20
(a) Powers of the Disbursing Agent. . . . 20
(b) Expenses Incurred on or After the
Consummation Date. . . . . . . . . . . 20
(c) Exculpation. . . . . . . . . . . . . . 21
SECTION 8. PROCEDURES FOR TREATING DISPUTED CLAIMS UNDER
THE PLAN OF REORGANIZATION . . . . . . . . 21
8.1. Objections to Claims . . . . . . . . . . . 21
8.2. No Distributions Pending Allowance . . . . 21
8.3. Distributions After Allowance . . . . . . . 22
SECTION 9. PROVISIONS GOVERNING EXECUTORY CONTRACTS
AND UNEXPIRED LEASES UNDER THE PLAN . . . . 22
9.1. General Treatment . . . . . . . . . . . . . 22
9.2. Amendments to Schedule;
Effect of Amendments . . . . . . . . . . . 23
9.3. Effect of Rejection . . . . . . . . . . . . 23
9.4. Bar to Rejection Damage . . . . . . . . . . 23
SECTION 10. CONDITIONS PRECEDENT TO CONFIRMATION
DATE AND CONSUMMATION DATE . . . . . . . . 24
10.1. Conditions Precedent to Confirmation of
Plan of Reorganization . . . . . . . . . . 24
10.2. Conditions Precedent to Consummation
Date of Plan of Reorganization . . . . . . 24
10.3. Waiver of Conditions Precedent . . . . . . 25
SECTION 11. EFFECT OF CONFIRMATION . . . . . . . . . . 25
11.1. General Authority . . . . . . . . . . . . . 25
11.2. Discharge of Debtors . . . . . . . . . . . 25
11.3. Injunction . . . . . . . . . . . . . . . . 26
11.4. Term of Injunctions or Stays . . . . . . . 26
11.5. Indemnification Obligations . . . . . . . . 26
SECTION 12. RELEASES AND WAIVER OF CLAIMS . . . . . . . 27
12.1. General Release of Releasees . . . . . . . 27
12.2. Release from Claims and Liabilities . . . . 27
12.3. Avoidance Actions. . . . . . . . . . . . . 29
SECTION 13. CREDITORS' COMMITTEE . . . . . . . . . . . 29
13.1. Dissolution of Creditors' Committee . . . . 29
13.2. Exculpation . . . . . . . . . . . . . . . . 29
SECTION 14. RETENTION OF JURISDICTION . . . . . . . . . 30
14.1. Retention of Jurisdiction . . . . . . . . . 30
14.2. Amendment of Plan of Reorganization . . . . 31
SECTION 15. MISCELLANEOUS PROVISIONS . . . . . . . . . 32
15.1. Payment of Statutory Fees . . . . . . . . . 32
15.2. Retiree Benefits . . . . . . . . . . . . . 32
15.3. Compliance with Tax Requirements . . . . . 32
15.4. Recognition of Guarantee Rights . . . . . . 32
15.5. Severability of Plan Provisions . . . . . . 33
15.6. Governing Law . . . . . . . . . . . . . . . 33
15.7. Notices . . . . . . . . . . . . . . . . . . 33
LIST OF EXHIBITS AND SCHEDULES
Exhibit A - Acquisition Agreement
Exhibits B-1-B-5 - Term Sheets Relating to Existing
Credit Agreements Amendments
Schedule 1.15 - Class Securities Litigation Claims
Schedule 1.24 - Derivative Securities Litigation
Claims
Schedule 9.1 - Certain Executory Contracts and
Unexpired Leases
SCHEDULE 1.15
CLASS SECURITIES LITIGATION CLAIMS
SCHEDULE 1.24
DERIVATIVE SECURITIES LITIGATION CLAIMS
SCHEDULE 9.1
SCHEDULE OF EXECUTORY CONTRACTS
(To be Supplied)
EXHIBIT A
ACQUISITION AGREEMENT
EXHIBIT B
TERM SHEETS RELATING TO
EXISTING CREDIT AGREEMENT AMENDMENTS
- ----------------------
EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of
December [ ], 1996, between Andrews Group Incorporated
("Andrews") and Marvel Entertainment Group, Inc. (the
"Company").
WHEREAS, the Company has executed on December [
], 1996 a Stock Purchase Agreement by and between Andrews
and the Company (the" Stock Purchase Agreement"), as part
of the Company's Plan of Reorganization;
WHEREAS, the Stock Purchase Agreement
contemplates that the Company will sell and Andrews will
purchase that number of newly issued shares (the
"Shares") of Common Stock of the Company, on the terms
and subject to the conditions set forth in the Stock
Purchase Agreement such that upon issuance and after
giving effect to the terms of the Company's Plan of
Reorganization and all distributions thereunder, the
Shares constitute 80.8% of the outstanding Common Stock
of the Company.
WHEREAS, in order to induce Andrews to
consummate into the Stock Purchase Agreement, the Company
has agreed to provide registration rights with respect to
the Shares.
WHEREAS, the Board of Directors of the Company
has authorized the officers of the Company to execute and
deliver this Agreement in the name and on behalf of the
Company;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the parties to
this Agreement hereby agree as follows:
1. Definitions. As used in this Agreement,
the following terms shall have the following meanings:
"Holder" means Andrews and any other person
that owns Registrable Securities, including their
respective successors and assigns who acquire Registrable
Securities, directly or indirectly, from Andrews or such
other person. For purposes of this Agreement, the
Company may deem and treat the registered holder of a
Registrable Security as the Holder and absolute owner
thereof, and the Company shall not be affected by any
notice to the contrary.
"Plan of Reorganization" means the Company's
plan of reorganization pursuant to Chapter 11 of the
United States Bankruptcy Code.
"Registrable Securities" means (a) the Common
Stock owned by Andrews upon consummation of the Stock
Purchase Agreement, (b) any Common Stock acquired by
Andrews in the open market at a time when Andrews is
deemed to be an Affiliate (as such term is defined under
Rule 144 under the Securities Act) of the Company so long
as (i) such Common Stock has not been transferred by
Andrews to a person that is not a Permitted Transferee
(as such term is defined in the Certificate of
Incorporation of the Company) and (ii) Andrews or such
Permitted Transferee continues to be deemed an Affiliate
of the Company, and (c) any securities issued or issuable
in respect of the Common Stock referred to in clauses (a)
and (b) above, by way of stock dividend or stock split or
in connection with a combination of shares,
recapitalization, reclassification, merger or
consolidation, and any other securities issued pursuant
to any other pro rata distribution with respect to such
Common Stock. For purposes of this Agreement, a
Registrable Security ceases to be a Registrable Security
when (x) it has been effectively registered under the
Securities Act and sold or distributed to the public in
accordance with an effective registration statement
covering it (and has not been reacquired in the manner
described in clause (b) above), or (y) it is sold or
distributed to the public pursuant to Rule 144 (or any
successor or similar provision) under the Securities Act.
"SEC" means the Securities and Exchange
Commission.
"Securities Act" means the Securities Act of
1933, as amended from time to time.
2. Demand Registration. (a) Subject to
Section 5 hereof, if at any time any Holder shall request
the Company in writing to register under the Securities
Act all or a part of the Registrable Securities held by
such Holder (a "Demand Registration"), the Company shall
use all reasonable efforts to cause to be filed and
declared effective as soon as reasonably practicable a
registration statement, on such appropriate form as the
Company in its discretion shall determine, providing for
the sale of all such Registrable Securities by such
Holder. The Company agrees to use its best efforts to
keep any such registration statement continuously
effective and usable for resale of Registrable Securities
for so long as the Holder whose Registrable Securities
are included therein shall request. The Company shall be
obligated to file registration statements pursuant to
this Section 2(a) until all Registrable Securities have
ceased to be Registrable Securities. Each registration
statement filed pursuant to this Section 2(a) is
hereinafter referred to as a "Demand Registration
Statement."
(b) The Company agrees (i) not to effect any
public or private sale, distribution or purchase of any
of its securities which are the same as or similar to the
Registrable Securities, including a sale pursuant to
Regulation D under the Securities Act, during the 15-day
period prior to, and during the 45-day period beginning
on, the closing date of each underwritten offering under
any Demand Registration Statement, and (ii) to use
reasonable best efforts to cause each holder of its
securities purchased from the Company, at any time on or
after the date of this Agreement (other than in a
registered public offering) to agree not to effect any
public sale or distribution of any such securities during
such period, including a sale pursuant to Rule 144 under
the Securities Act.
(c) The Company may postpone for a reasonable
period of time, not to exceed 30 days, the filing or the
effectiveness of any Demand Registration Statement if the
Board of Directors of the Company in good faith
determines that (A) such registration might have a
material adverse effect on any plan or proposal by the
Company with respect to any financing, acquisition,
recapitalization, reorganization or other material
transaction, or (B) the Company is in possession of
material non-public information that, if publicly
disclosed, could result in a material disruption of a
major corporate development or transaction then pending
or in progress or in other material adverse consequences
to the Company.
(d) If at any time any Holder of Registrable
Securities to be covered by a Demand Registration
Statement desires to sell Registrable Securities in an
underwritten offering, such Holder shall have the right
to select any nationally recognized investment banking
firm(s) to administer the offering, subject to the
approval of the Company, which approval shall not be
unreasonably withheld, and the Company shall enter into
underwriting agreements with the underwriter(s) of such
offering, which agreements shall contain such
representations and warranties by the Company, and such
other terms, conditions and indemnities as are at the
time customarily contained in underwriting agreements for
similar offerings.
3. Incidental Registration. Subject to
Section 5 hereof and the other terms and conditions set
forth in this Section 3, if the Company proposes at any
time to register any shares of Common Stock (the
"Initially Proposed Shares") under the Securities Act for
sale, whether or not for its own account, pursuant to an
underwritten offering, the Company will promptly give
written notice to the Holders of its intention to effect
such registration (such notice to specify, among other
things, the proposed offering price, the kind and number
of securities proposed to be registered and the
distribution arrangements, including identification of
the underwriter(s)), and the Holders shall be entitled to
include in such registration statements, as a part of
such underwritten offering, such number of shares (the
"Holder Shares") to be sold for the account of the
Holders (on the same terms and conditions as the
Initially Proposed Shares) as shall be specified in a
request in writing delivered to the Company within 15
days after the date upon which the Company gave the
aforementioned notice.
The Company's obligations to include Holder
Shares in a registration statement pursuant to this
Section 3 is subject to each of the following
limitations, conditions and qualifications:
(i) If, at any time after giving written
notice of its intention to effect a registration of
any of its shares of Common Stock and prior to the
effective date of any registration statement filed
in connection with such registration, the Company
shall determine for any reason not to register all
of such shares, the Company may, at its election,
give written notice of such determination to the
Holders and thereupon it shall be relieved of its
obligation to use any efforts to register any Holder
Shares in connection with such aborted registration.
(ii) If, in the opinion of the managing
underwriter(s) of such offering, the distribution of
all or a specified portion of the Holder Shares
would materially interfere with the registration and
sale, in accordance with the intended method
thereof, of the Initially Proposed Shares, then the
number of Holder Shares to be included in such
registration statement shall be reduced to such
number, if any, that, in the opinion of such
managing underwriter(s), can be included without
such interference. If, as a result of the cutback
provisions of the preceding sentence, the Holders
are not entitled to include all of the Holder Shares
in such registration, such Holders may elect to
withdraw their request to include Holder Shares in
such registration (a "Withdrawal Election").
If the Company shall so request in writing,
each Holder agrees not to effect any public or private
sale or distribution of any Registrable Securities (other
than the Holder Shares) during the 15-day period prior to
and during the 45-day period beginning on, the closing
date of any underwritten public offering of shares of
Common Stock made for the Company's own account.
4. Registration Procedures. (a) Whenever the
Company is required to use all reasonable efforts to
effect the registration of any Registrable Securities
under the Securities Act pursuant to the terms and
conditions of Section 2(a) or 3 (such Registrable
Securities being hereinafter referred to as "Subject
Shares"), the Company will use all reasonable efforts to
effect the registration and sale of the Subject Shares in
accordance with the intended method of disposition
thereof. Without limiting the generality of the
foregoing, the Company will as soon as practicable:
(i) prepare and file with the Securities
and Exchange Commission (the "SEC") a registration
statement with respect to the Subject Shares in form
and substance satisfactory to the Holders of the
Subject Shares, and use all reasonable efforts to
cause such registration statement to become
effective as soon as possible;
(ii) prepare and file with the SEC such
amendments and supplements to such registration
statement and the prospectus used in connection
therewith as may be necessary to keep such
registration statement effective for the applicable
period and to comply with the provisions of the
Securities Act with respect to the disposition of
all Subject Shares and other securities covered by
such registration statement;
(iii) furnish the Holders covered by such
registration statement, without charge, such number
of conformed copies of such registration statement
and of each such amendment and supplement thereto
(in each case including all exhibits), such number
of copies of the prospectus included in such
registration statement (including each preliminary
prospectus), such documents incorporated by
reference in such registration statement or
prospectus, and such other documents, as such
Holders may reasonably request;
(iv) use all reasonable efforts to
register or qualify the Subject Shares covered by
such registration statement under the securities or
blue sky laws of such jurisdictions as the managing
underwriter(s) shall reasonably recommend, and do
any and all other acts and things which may be
reasonably necessary or advisable to enable the
Holders to consummate the disposition in such
jurisdictions of the Subject Shares covered by such
registration statement, except that the Company
shall not for any such purpose be required to (A)
qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so
qualified, (B) subject itself to taxation in any
jurisdiction wherein it is not so subject, or (C)
consent to general service of process in any such
jurisdiction or otherwise take any action that would
subject it to the general jurisdiction of the courts
of any jurisdiction in which it is not so subject;
(v) otherwise use its best efforts to
comply with all applicable rules and regulations of
the SEC;
(vi) furnish, at the Company's expense,
unlegended certificates representing ownership of
the securities being sold in such denominations as
shall be requested and instruct the transfer agent
to release any stop transfer orders with respect to
the Subject Shares being sold;
(vii) notify each Holder at any time when
a prospectus relating to the Subject Shares is
required to be delivered under the Securities Act of
the happening of any event as a result of which the
prospectus included in such Registration Statement
contains any untrue statement of a material fact or
omits to state a material fact necessary to make the
statements therein (in the case of the prospectus or
any preliminary prospectus, in light of the
circumstances under which they were made) not
misleading, and the Company will, as promptly as
practicable thereafter, prepare and file with the
SEC and furnish a supplement or amendment to such
prospectus so that, as thereafter delivered to the
purchasers of Subject Shares such prospectus will
not contain any untrue statement of a material fact
or omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading;
(viii) enter into customary agreements
(including an underwriting agreement in customary
form in the case of an underwritten offering) and
make such representations and warranties to the
sellers and underwriter(s) as in form and substance
and scope are customarily made by issuers to
underwriters in underwritten offerings and take such
other actions as the Holders or the managing
underwriter(s) or agent, if any, reasonably require
in order to expedite or facilitate the disposition
of such Subject Shares;
(ix) make available for inspection by the
Holders, any underwriter or agent participating in
any disposition pursuant to such Registration
Statement, and any attorney, accountant or other
similar professional advisor retained by any such
holders or underwriter (collectively the
"Inspectors"), all pertinent financial and other
records, pertinent corporate documents and
properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to
enable them to exercise their due diligence
responsibility, and cause the Company's officers,
directors and employees to supply all information
reasonably requested by any such Inspector in
connection with such Registration Statement. The
Holders agree that Records and other information
which the Company determines, in good faith, to be
confidential and of which determination the
Inspectors are so notified shall not be disclosed by
the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a
misstatement or omission in the Registration
Statement, (ii) the release of such Records is
ordered pursuant to a subpoena, court order or
regulatory or agency request or (iii) the
information in such Records has been generally
disseminated to the public. Each Holder agrees that
it will, upon learning that disclosure of such
Record is sought in a court of competent
jurisdiction or by a governmental agency, give
notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action
to prevent disclosure of the Records deemed
confidential;
(x) obtain for delivery to the Company,
the underwriter(s) or their agent, with copies to
the Holders, a "cold comfort" letter from the
Company's independent public accountants in
customary form and covering such matters of the type
customarily covered by "cold comfort" letters as the
Holders or the managing underwriter(s) reasonably
request;
(xi) obtain for delivery to the Holders
and the underwriter(s) or their agent an opinion or
opinions from counsel for the Company in customary
form and reasonably satisfactory to the Holder,
underwriters or agents and their counsel;
(xii) make available to its security
holders earnings statements, which need not be
audited, satisfying the provisions of Section ll(a)
of the Securities Act no later than 90 days after
the end of the 12-month period beginning with the
first month of the Company's first quarter
commencing after the effective date of the
Registration Statement, which earnings statements
shall cover said 12-month period;
(xiii) make every reasonable effort to
prevent the issuance of any stop order suspending
the effectiveness of the registration statement or
of any order preventing or suspending the
effectiveness of such registration statement at the
earliest possible moment;
(xiv) cause the Subject Shares to be
registered with or approved by such other
governmental agencies or authorities within the
United States as may be necessary to enable the
sellers thereof or the underwriters(s), if any, to
consummate the disposition of such Subject Shares;
(xv) cooperate with the Holders and the
managing underwriter(s), if any, or any other
interested party (including any interested
broker-dealer) in making any filings or submission
required to be made, and the furnishing of all
appropriate information in connection therewith,
with the National Association of Securities Dealers,
Inc. ("NASD");
(xvi) cause its subsidiaries to take
action necessary to effect the registration of the
Subject Shares contemplated hereby, including filing
any required financial information;
(xvii) effect the listing of the Subject
Shares on the New York Stock Exchange or such other
national securities exchange or over-the-counter
market on which shares of the Common Stock shall
then be listed; and
(xviii) take all other steps necessary to
effect the registration of the Subject Shares
contemplated hereby.
(b) The Holders shall provide (in writing and
signed by the Holders and stated to be specifically for
use in the related registration statement, preliminary
prospectus, prospectus or other document incident
thereto) all such information and materials and take all
such action as may be required in order to permit the
Company to comply with all applicable requirements of the
SEC and any applicable state securities laws and to
obtain any desired acceleration of the effective date of
any registration statement prepared and filed by the
Company pursuant to this Agreement.
(c) The Holders shall, if requested by the
Company or the managing underwriter(s) in connection with
any proposed registration and distribution pursuant to
this Agreement, (i) agree to sell the Subject Shares on
the basis provided in any underwriting arrangements
entered into in connection therewith and (ii) complete
and execute all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents
customary in similar offerings.
(d) Upon receipt of any notice from the
Company that the Company has become aware that the
prospectus (including any preliminary prospectus)
included in any registration statement filed pursuant to
Section 2(a) or 3, as then in effect, contains any untrue
statement of a material fact or omits to state any
material fact required to be stated therein or necessary
to make the statements therein not misleading, the
Holders shall forthwith discontinue disposition of
Subject Shares pursuant to the registration statement
covering the same until the Holders' receipt of copies of
a supplemented or amended prospectus and, if so directed
by the Company, deliver to the Company (at the Company's
expense) all copies other than permanent file copies then
in the Holder's possession, of the prospectus covering
the Subject Shares that was in effect prior to such
amendment or supplement.
(e) The Holders shall pay all out-of-pocket
expenses incurred in connection with any Demand
Registration Statements filed pursuant to Section 2(a) of
this Agreement, including, without limitation, all SEC
and blue sky registration and filing fees (including NASD
fees), printing expenses, transfer agents and registrars'
fees, underwriting discounts, commissions and expenses
attributable to securities sold for the account of the
Holders pursuant to such registration statement, fees and
disbursements of the Company's counsel and accountants
and fees and disbursements of experts used by the Company
in connection with such registration statement. The
Company shall pay any such out-of-pocket expenses
incurred in connection with any registration statement
filed pursuant to Section 3 of this Agreement, except
that the Holders shall pay all underwriting discounts,
commissions and expenses attributable to the Subject
Shares sold pursuant to any such registration statement.
(f) In connection with any sale of Subject
Shares that are registered pursuant to this Agreement,
the Company and the Holders shall enter into an agreement
providing for indemnification of the Holders by the
Company, and indemnification of the Company by the
Holders, on terms customary for such agreements at that
time (it being understood that any disputes arising as to
what is customary shall be resolved by counsel to the
underwriter(s)).
5. Notices. Any notice or other communication
required or permitted to be given hereunder shall be in
writing and shall be effective (a) upon hand delivery or
delivery by telex (with correct answerback received),
telecopy or facsimile at the address or number designated
below (if delivered on a business day during normal
business hours where such notice is to be received), or
the first business day following such delivery (if
delivered other than on a business day during normal
business hours where such notice is to be received) or
(b) on the third business day following the date of
mailing by express courier service, fully prepaid,
addressed to such address, or upon actual service, fully
prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:
If to the Company, to:
Marvel Entertainment Group, Inc.
387 Park Avenue South
New York, New York 10016
Attention: General Counsel
Telecopy: (212) 576-9346
If to Andrews, to:
Andrews Group Incorporated
3200 Windy Hill Road
Atlanta, Georgia 30339
Attention: General Counsel
Telecopy: 770-563-9610
With a copy to:
MacAndrews & Forbes Holdings Inc.
35 East 63rd Street
New York, New York 10021
Attention: Barry F. Schwartz
Telecopy: (212) 572-5056
If to any other Holder,
to such name at such address as such Holder
shall have indicated in a written notice
delivered to the other parties to this
Agreement.
Any party hereto may from time to time change its address
for notices under this Section 5 by giving at least 10
days' notice of such changes to the other parties hereto.
6. Waivers. No waiver by any party of any
default with respect to any provision, condition or
requirement hereof shall be deemed to be a continuing
waiver in the future thereof or a waiver of any other
provision, condition or requirement hereof; nor shall any
delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such
right accruing to it thereafter.
7. Headings. The headings herein are for
convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
8. Successors and Assigns; Amendments. This
Agreement shall be binding upon and inure to the benefit
of the parties and their successors and assigns,
including without limitation and without the need for an
express assignment each subsequent Holder of any
Registrable Securities. Except as provided in this
Section 8, neither the Company nor any Holder shall
assign this Agreement or any rights hereunder without the
prior written consent of the other parties hereto. The
assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party
hereunder. This Agreement may not be amended except by a
written instrument executed by the parties hereto.
9. No Third Party Beneficiaries. This
Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
10. Governing Law. This Agreement shall be
governed by and construed and enforced in accordance with
the internal laws of the State of Delaware without regard
to the principles of conflicts of laws.
11. Entire Agreement. This Agreement contains
the entire agreement of the parties hereto in respect of
the subject matter hereof and supersedes all prior
agreements and understandings between the parties with
respect to the subject matter hereof.
12. Execution. This Agreement may be executed
in two or more counterparts, all of which shall be
considered one and the same agreement and shall become
effective when counterparts have been signed by each
party and delivered to the other party, it being
understood that both parties need not sign the same
counterpart.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed by their
respective authorized officers as of the date hereof.
MARVEL ENTERTAINMENT GROUP, INC.
By:
Name:
Title:
ANDREWS GROUP INCORPORATED
By:
Name:
Title:
