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EXHIBIT 10(a)
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
AMONG
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.,
HOME HOLDING INC.,
HOME HOLDING II INC.
AND
THE SEAGRAM COMPANY LTD.
DATED AS OF APRIL 9, 1995
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TABLE OF CONTENTS
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SECTION PAGE
ARTICLE I
DEFINITIONS
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1.01. Certain Defined Terms........................................................................... 2
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale of the Subscription Shares.................................................... 10
2.02. Purchase and Sale of the Purchased Shares....................................................... 11
2.03. Closing......................................................................................... 11
2.04. Closing Deliveries by the Company............................................................... 11
2.05. Closing Deliveries by the Seller................................................................ 11
2.06. Closing Deliveries by the Purchaser............................................................. 12
2.07. Certificate of Incorporation and By-Laws........................................................ 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY,
THE SELLER AND THE PARENT
3.01. Organization, Authority and Qualification of the Parent......................................... 12
3.02. Organization, Authority and Qualification of the Seller......................................... 13
3.03. Organization, Authority and Qualification of the Company........................................ 14
3.04. Capital Stock of the Company; Ownership of the Shares........................................... 14
3.05. Subsidiaries; MECA.............................................................................. 15
3.06. No Conflict..................................................................................... 17
3.07. Governmental Consents and Approvals............................................................. 18
3.08. Financial Information........................................................................... 18
3.09. No Undisclosed Liabilities...................................................................... 18
3.10. Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions............... 19
3.11. Assets.......................................................................................... 21
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3.12. Full Disclosure................................................................................. 21
3.13. No Prior Business............................................................................... 21
3.14. Brokers......................................................................................... 21
3.15. Exceptions...................................................................................... 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.01. Organization and Authority of the Purchaser..................................................... 22
4.02. No Conflict..................................................................................... 23
4.03. Governmental Consents and Approvals............................................................. 23
4.04. Investment Purpose.............................................................................. 23
4.05. Litigation...................................................................................... 23
4.06. Financing....................................................................................... 23
4.07. Brokers......................................................................................... 24
ARTICLE V
ADDITIONAL AGREEMENTS
5.01. Conduct of Business Prior to the Closing........................................................ 24
5.02. Access to Information........................................................................... 25
5.03. Confidentiality................................................................................. 26
5.04. Regulatory and Other Authorizations; Notices and Consents....................................... 26
5.05. Notice of Developments.......................................................................... 27
5.06. Change of Name.................................................................................. 27
5.07. Non-Competition................................................................................. 27
5.08. Termination of Intercompany Agreements.......................................................... 28
5.09. Holding Preferred Stock......................................................................... 29
5.10. Dividend; Capital Contributions; Repayment of Indebtedness; Transfer of Funding................. 29
5.11. Purchases of Alcoholic Beverage Products........................................................ 30
5.12. Further Action.................................................................................. 30
ARTICLE VI
EMPLOYEE MATTERS
6.01. Retained Obligation of the Seller............................................................... 30
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ARTICLE VII
TAX MATTERS
[TO BE AGREED UPON BY STB & S&S TAX GROUPS]
ARTICLE VIII
CONDITIONS TO CLOSING
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8.01. Conditions to Obligations of the Parent, the Seller and the Company............................. 31
8.02. Conditions to Obligations of the Purchaser...................................................... 32
ARTICLE IX
INDEMNIFICATION
9.01. Survival of Representations and Warranties...................................................... 34
9.02. Indemnification by the Parent, the Seller and the Purchaser..................................... 35
9.03. Limits on Indemnification....................................................................... 37
9.04. Tax Matters..................................................................................... 37
9.05. Indemnification as Exclusive Remedy............................................................. 37
ARTICLE X
TERMINATION AND WAIVER
10.01. Termination.................................................................................... 37
10.02. Effect of Termination.......................................................................... 39
10.03. Waiver......................................................................................... 39
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ARTICLE XI
GENERAL PROVISIONS
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11.01. Expenses....................................................................................... 40
11.02. Notices........................................................................................ 40
11.03. Public Announcements........................................................................... 41
11.04. Headings...................................................................................... 42
11.05. Severability.................................................................................. 42
11.06. Entire Agreement............................................................................... 42
11.07. Assignment..................................................................................... 42
11.08. No Third Party Beneficiaries................................................................... 42
11.09. Amendment...................................................................................... 42
11.10. Governing Law................................................................................. 43
11.11. Counterparts................................................................................... 43
11.12. Specific Performance........................................................................... 43
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EXHIBITS
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1.01(a) FORM OF STOCKHOLDERS' AGREEMENT
1.01(b) FORM OF TAX ALLOCATION AGREEMENT
2.07(a) FORM OF RESTATED CERTIFICATE OF INCORPORATION OF
THE COMPANY
2.07(b) FORM OF AMENDED AND RESTATED BY-LAWS OF THE COMPANY
5.10(b)(i) FORM OF TERMINATION AGREEMENT
5.10(b)(ii) FORM OF INDEMNITY AGREEMENT
5.10(b)(iii) FORM OF SUPPORT AGREEMENT AMENDMENT
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT dated as of April 9,
1995 among MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., a corporation organized
under the laws of Japan (the "Parent"), HOME HOLDING INC., a Delaware
corporation and a wholly owned subsidiary of the Parent (the "Seller"), HOME
HOLDING II INC., a Delaware corporation and a wholly owned subsidiary of the
Seller (the "Company"), and THE SEAGRAM COMPANY LTD., a corporation organized
under the laws of Canada (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Parent directly or indirectly owns all the issued and
outstanding shares of common stock, par value $.01 per share, of the Seller;
WHEREAS, the Seller owns all the issued and outstanding shares (the
"Outstanding Shares") of common stock, par value $.01 per share (the "Common
Stock"), of the Company;
WHEREAS, the Company owns all the issued and outstanding shares of
common stock, par value $.01 per share, of Matsushita Holding Corp., a Delaware
corporation ("Holding");
WHEREAS, Holding owns all the issued and outstanding shares of common
stock, par value $.01 per share, of MEI Enterprises Corp., a Delaware
corporation ("Enterprises");
WHEREAS, Enterprises owns all the issued and outstanding shares of
common stock, par value $.01 per share, of MCA Inc., a Delaware corporation
("MCA");
WHEREAS, MCA owns all the issued and outstanding shares of common
stock, par value $10,000 per share, of MCA Funding Corp., a Delaware
corporation ("Funding");
WHEREAS, the Parent, the Seller, the Company and the Purchaser are
parties to a Stock Purchase Agreement dated as of April 9, 1995 (the "Original
Purchase Agreement") pursuant to which, upon the terms and subject to the
conditions set forth therein, (i) the Company has agreed to issue and sell to
the Purchaser, and the Purchaser has agreed to subscribe for and purchase from
the Company, 3,100 shares of the Common Stock (the "Subscription Shares"), and
(ii) the Seller has agreed to sell to the Purchaser, and the Purchaser has
agreed to purchase from the Seller, 2,604 shares of the Common Stock (the
"Purchased Shares" and, together with the Subscription Shares, the "Shares"),
which, together
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with the Subscription Shares, will constitute eighty percent of the shares of
Common Stock issued and outstanding immediately following the Closing; and
WHEREAS, the Parent, the Seller, the Company and the Purchaser wish to
amend and restate in its entirety the Original Purchase Agreement, in the
manner set forth herein, as of the date of the Original Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Additional Information" means information relating to the Business
provided to the Purchaser by or on behalf of the Parent after the date of this
Agreement which is not publicly available or otherwise reflected in any of the
information furnished to the Purchaser by or on behalf of the Parent on or
prior to the date of this Agreement, which (a) shall be deemed to exclude (i)
any information relating to any services to be rendered or products to be
produced by Messrs. Spielberg or Geffen and their respective affiliates to or
for MCA, (ii) any write-offs or potential write-offs associated with the film
"Waterworld" and (iii) any change in or effect on MCA arising after the date
hereof, and (b) shall be deemed to include changes from the Reference Financial
Statements reflected in the Audited Financial Statements.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"Agreement" or "this Agreement" means this Amended and Restated Stock
Purchase Agreement dated as of April 9, 1995 among the Parent, the Seller, the
Company and the Purchaser (including the Exhibits hereto) and all amendments
hereto made in accordance with the provisions of Section 11.09.
"Assets" means the properties, assets, contracts and agreements,
including, without limitation, the Intellectual Property, the Real Property and
the Tangible Personal
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Property, used or held for use in the conduct of the Business or otherwise
owned, leased or used by the Company or any Subsidiary.
"Audited Financial Statements" means the audited consolidated balance
sheet of MCA for the fiscal year ended as of December 31, 1994, and the related
audited consolidated statements of operations, shareholder's equity and cash
flows of MCA, together with all related notes and schedules thereto,
accompanied by the report thereon of the Seller's Accountants, to be delivered
by the Parent to the Purchaser after the date hereof.
"Business" means the entire business conducted by the Company and the
Subsidiaries prior to the date hereof.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in The City
of New York.
"Capital Contribution Agreement" means the Capital Contribution and
Loan Agreement dated as of November 26, 1990 among the Parent, Holding and Lew
R. Wasserman.
"Closing" has the meaning specified in Section 2.03.
"Closing Date" has the meaning specified in Section 2.03.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Common Stock" has the meaning specified in the recitals to this
Agreement.
"Company" has the meaning specified in the preamble to this Agreement.
"Company Bank Account" means a bank account of the Company in the
United States to be designated by the Parent in a written notice to the
Purchaser at least five Business Days before the Closing.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect
a majority of the board of directors or similar body governing the affairs of
such Person.
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"Employee" means any current or former employee of the Company or any
Subsidiary.
"Employment Agreement" means any employment, retention, severance,
change-in-control or similar-type agreement between the Seller, the Company or
any Subsidiary and any Employee.
"Encumbrance" means any security interest, pledge, mortgage, lien,
charge, adverse claim of ownership or use, or other encumbrance of any kind.
"Enterprises" has the meaning specified in the recitals to this
Agreement.
"Enterprises Excess Cash" means the amount that would be reflected on
the line item "Cash and cash equivalents" on a balance sheet of Enterprises as
of the Business Day immediately prior to the Closing Date prepared in
accordance with U.S. GAAP on a basis consistent with the past practices of
Enterprises.
"Enterprises Notes" has the meaning set forth in the Capital
Contribution Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Excess Cash" means the sum of the Holding Excess Cash and the
Enterprises Excess Cash.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Financial Statements" has the meaning specified in Section 3.08.
"Funding" has the meaning specified in the recitals to this Agreement.
"Governmental Authority" means any United States federal, state or
local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral
body.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"Holding" has the meaning specified in the recitals to this Agreement.
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"Holding Excess Cash" means the amount that would be reflected on the
line item "Cash and cash equivalents" on a balance sheet of Holding as of the
Business Day immediately prior to the Closing Date prepared in accordance with
U.S. GAAP on a basis consistent with the past practices of Holding (which shall
not include the Liquid Assets).
"Holding Preferred Stock" means the Preferred Stock, par value $.01
per share, of Holding.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means, with respect to any Person, (a) all indebtedness
of such Person, whether or not contingent, for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services, (c) all other indebtedness of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under leases that have been or should be, in accordance
with U.S. GAAP, recorded as capital leases, (f) all obligations, contingent or
otherwise, of such Person under acceptance, letter of credit or similar
facilities and (g) all Indebtedness of others referred to in clauses (a)
through (f) above guaranteed directly or indirectly in any manner by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"Indemnified Party" has the meaning specified in Section 9.02(c).
"Indemnifying Party" has the meaning specified in Section 9.02(c).
"Indemnity Agreement" means the Indemnity Agreement to be entered into
by MECA on the Closing Date pursuant to Section 5.10(b) substantially in the
form of Exhibit 5.10(b)(ii).
"Intellectual Property" means patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, copyrights, service marks,
trade secrets, applications for patents, trademarks and service marks, trade
secrets, know-how and other proprietary rights and information in and to which
the Company or any Subsidiary holds, or has a right to hold, right, title and
interest or which is licensed or sublicensed to the Company or any Subsidiary
from a third party.
"Interim Period" has the meaning specified in Section 7.01.
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"IRS" means the Internal Revenue Service of the United States.
"knowledge" or "best knowledge" of any Person means the actual
knowledge of such Person, which, with respect to the Parent and the Seller,
shall be deemed to exclude knowledge of any director, officer or employee of
MCA, Enterprises or Holding (unless such director, officer or employee is also
a director, officer or employee of the Parent).
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law.
"Leased Real Property" means the real property leased by the Company
or any Subsidiary, as tenant, together with, to the extent leased by the
Company or any Subsidiary, all buildings and other structures, facilities or
improvements currently located thereon, all fixtures, systems, equipment and
items of personal property of the Company or any Subsidiary attached or
appurtenant thereto, and all easements, licenses, rights and appurtenances
relating to the foregoing.
"Liabilities" means any and all Indebtedness and other liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured.
"Liquid Assets" has the meaning specified in the Amended and Restated
Certificate of Incorporation of Holding.
"Loss" has the meaning specified in Section 9.02(a).
"Material Adverse Effect" means any change in, or effect on, the
Company or any Subsidiary that, individually or in the aggregate: (a) is
materially adverse to the Business, Assets or Liabilities, prospects, results
of operations or financial condition of the Company and the Subsidiaries, taken
as a whole, or (b) is reasonably likely to materially adversely affect the
ability of the Purchaser, the Company and the Material Subsidiaries to operate
or conduct the Business in the manner in which it is currently operated or
conducted by the Parent, the Seller, the Company and the Subsidiaries.
"Material Subsidiary" means Holding, Enterprises, MCA, Funding and any
other Subsidiary (other than Subsidiaries that are less than 50% owned by the
Company) of the Company (directly or indirectly through one or more
intermediaries) within the meaning of Rule 1-02 of Regulation S-X under the
Exchange Act.
"Material Contracts" means contracts, agreements and arrangements
which are material to the Business.
"MCA" has the meaning specified in the recitals to this Agreement.
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"MCA Preferred Stock" means the Preferred Stock, par value $.01 per
share, of MCA.
"MECA" means Matsushita Electric Corporation of America, a Delaware
corporation and a wholly owned subsidiary of the Parent.
"MECA Support Agreement" means the Support Agreement to be entered
into by the Parent and MECA pursuant to Section 5.10(d) substantially in the
form of the Support Agreement dated as of February 27, 1991 between the Parent
and Funding.
"Original Purchase Agreement" has the meaning specified in the
recitals to this Agreement.
"Outstanding Shares" has the meaning specified in the recitals to this
Agreement.
"Owned Real Property" means the real property owned by the Company or
any Subsidiary or to which the Company or any Subsidiary has the right to hold
right, title and interest, together with all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all
fixtures, systems, equipment and items of personal property of the Company or
any Subsidiary attached or appurtenant thereto and all easements, licenses,
rights and appurtenances relating to the foregoing.
"Parent" has the meaning specified in the preamble to this Agreement.
"Permitted Encumbrances" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) liens for taxes, assessments and governmental charges or
levies not yet due and payable; (b) Encumbrances imposed by law; (c) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; and (d) minor survey
exceptions, reciprocal easement agreements and other customary encumbrances on
title to real property that (i) do not render title to the property encumbered
thereby unmarketable and (ii) do not, individually or in the aggregate,
materially adversely affect the value or use of such property for its current
and anticipated purposes.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization, joint venture, limited
liability company or other entity, as well as any syndicate or group that would
be deemed to be a person under Section 13(d)(3) of the Exchange Act.
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"Plan" means any employee benefit plan, as such term is defined in
Section 3(3) of ERISA, any stock bonus, stock option, stock purchase,
restricted stock, phantom stock or similar type plan, each bonus and incentive
plan, policy or arrangement, and each vacation, severance, deferred
compensation, fringe benefit, perquisite, or other employee benefit plan,
policy or arrangement, including, without limitation, any plan, policy or
arrangement that provides for payment of benefits following termination of
employment, which is sponsored, contributed to or maintained by the Seller, the
Company or any Subsidiary for any Employee.
"Pre-Reference Balance Sheet Period" has the meaning specified in
Section 7.01.
"Post-Reference Balance Sheet Period" has the meaning specified in
Section 7.01.
"Purchased Shares" has the meaning specified in the recitals to this
Agreement.
"Purchased Shares Purchase Price" has the meaning specified in Section
2.02(b).
"Purchase Price" means the sum of the Subscription Shares Purchase
Price and the Purchased Shares Purchase Price.
"Purchaser" has the meaning specified in the preamble to this
Agreement.
"Real Property" means the Leased Real Property and the Owned Real
Property.
"Reference Balance Sheet" means the draft audited consolidated balance
sheet (including the related notes and schedules thereto) of MCA, dated as of
December 31, 1994, a copy of which has heretofore been delivered by the Parent
to the Purchaser.
"Reference Balance Sheet Date" means December 31, 1994.
"Reference Financial Statements" has the meaning specified in Section
3.08.
"Regulations" means the Treasury Regulations (including Temporary
Regulations) promulgated by the United States Department of Treasury with
respect to the Code or other federal Tax statutes.
"Restricted Period" has the meaning specified in Section 5.07.
"Returns" has the meaning specified in Section 7.02(a).
"Seller" has the meaning specified in the preamble to this Agreement.
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"Seller Bank Account" means a bank account of the Seller in the United
States to be designated by the Parent in a written notice to the Purchaser at
least five Business Days before the Closing.
"Seller's Accountants" means KPMG Peat Marwick LLP, independent
accountants of the Parent.
"Shares" has the meaning specified in the recitals to this Agreement.
"Short-Term Investments" means the short-term investments in U.S.
government securities and commercial paper that are held by certain
Subsidiaries, as reported by MCA in its reports of short-term investments and
borrowings.
"Stockholders' Agreement" means the Stockholders' Agreement to be
entered into by the Company, the Seller and the Purchaser on the Closing Date
in the form of Exhibit 1.01(a).
"Subscription Shares" has the meaning specified in the recitals to
this Agreement.
"Subscription Shares Purchase Price" has the meaning specified in
Section 2.01(b).
"Subsidiaries" means any and all corporations, partnerships, joint
ventures, associations, limited liability companies and other entities
controlled by the Company directly or indirectly through one or more
intermediaries.
"Support Agreement Amendment" means Amendment No. 1 to Support
Agreement to be entered into by the Parent and Funding on the Closing Date
pursuant to Section 5.10(b) substantially in the form of Exhibit 5.10(b)(iii).
"Tangible Personal Property" means machinery, equipment, tools,
supplies, furniture, fixtures, personalty, vehicles, rolling stock and other
tangible personal property used in the Business or owned or leased by the
Company or any Subsidiary.
"Tax" or "Taxes" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net
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worth; taxes or other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value added, or gains taxes; license, registration and
documentation fees; and customs duties, tariffs, and similar charges.
"Tax Allocation Agreement" means the Tax Allocation Agreement to be
entered into by the Purchaser or its assignee, the Company and the other
parties specified therein on the Closing Date in the form of Exhibit 1.01(b).
"Tax Reserve" has the meaning specified in Section 7.01.
"Termination Agreement" means the Termination Agreement to be entered
into by MCA and Funding on the Closing Date pursuant to Section 5.10(b) in the
form of Exhibit 5.10(b)(i).
"Third Party Claims" has the meaning specified in Section 9.02(c).
"Transaction Agreements" means this Agreement, the Stockholders'
Agreement, the Tax Allocation Agreement, the Termination Agreement, the
Indemnity Agreement, the Support Agreement Amendment, the MECA Support
Agreement and all other contracts and agreements entered into hereunder or in
connection herewith.
"U.S. GAAP" means United States generally accepted accounting
principles and practices as in effect from time to time and applied
consistently throughout the periods involved.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Subscription Shares. (a) Upon
the terms and subject to the conditions of this Agreement, at the Closing, the
Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
from the Company, the Subscription Shares.
(b) The aggregate purchase price for the Subscription Shares
shall be $3.1 billion (the "Subscription Shares Purchase Price").
SECTION 2.02. Purchase and Sale of the Purchased Shares. (a) Upon the
terms and subject to the conditions of this Agreement, at the Closing, the
Seller shall sell to the Purchaser, and the Purchaser shall purchase from the
Seller, the Purchased Shares.
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(b) The aggregate purchase price for the Purchased Shares shall
be $2.604 billion (the "Purchased Shares Purchase Price").
SECTION 2.03. Closing. Upon the terms and subject to the conditions of
this Agreement, the sale and purchase of the Shares contemplated by this
Agreement shall take place at a closing (the "Closing") to be held at the
offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York at
10:00 a.m. New York time on the fifth Business Day following the satisfaction
or waiver of all conditions to the obligations of the parties set forth in
Article VIII, or at such other place or at such other time or on such other
date as the Parent and the Purchaser may mutually agree upon in writing (the
day on which the Closing takes place being the "Closing Date").
SECTION 2.04. Closing Deliveries by the Company. At the Closing, the
Company shall deliver or cause to be delivered to the Purchaser:
(a) stock certificates evidencing the Subscription Shares duly
registered in the name of the Purchaser or its designee;
(b) counterparts of each of the Transaction Agreements executed
on behalf of the Parent, the Seller, the Company, MECA, MCA and Funding,
as the case may be;
(c) a receipt for the Subscription Shares Purchase Price; and
(d) the opinions, certificates and other documents required to be
delivered pursuant to Section 8.02.
SECTION 2.05. Closing Deliveries by the Seller. At the Closing, the
Seller shall deliver or cause to be delivered to the Purchaser:
(a) stock certificates evidencing the Purchased Shares duly
endorsed in blank, or accompanied by stock powers duly executed in blank,
in form satisfactory to the Purchaser and with all required stock transfer
tax stamps affixed;
(b) counterparts of each of the Transaction Agreements executed
on behalf of the Parent, the Seller, the Company, MECA, MCA and Funding,
as the case may be;
(c) a receipt for the Purchased Shares Purchase Price; and
(d) the opinions, certificates and other documents required to be
delivered pursuant to Section 8.02.
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SECTION 2.06. Closing Deliveries by the Purchaser. At the Closing,
the Purchaser shall deliver to the Company and the Seller:
(a) the Subscription Shares Purchase Price by wire transfer in
immediately available funds to the Company Bank Account;
(b) the Purchased Shares Purchase Price by wire transfer in
immediately available funds to the Seller Bank Account;
(c) an executed counterpart of each of the Transaction Agreements
to which the Purchaser is a party; and
(d) the opinions, certificates and other documents required to be
delivered pursuant to Section 8.01.
SECTION 2.07. Certificate of Incorporation and By-Laws . Immediately
prior to the Closing, the Company shall, and the Parent and the Seller shall
cause the Company to, (i) amend and restate its certificate of incorporation
and by-laws to read as Exhibits 2.07(a) and 2.07(b), respectively, (ii)
reclassify each share of Common Stock (including, without limitation, the
Outstanding Shares and the Subscription Shares) as shares of Class A Common
Stock of the Company and (iii) declare and give effect to a 39.3 for-one stock
dividend whereby a dividend of 39.3 shares of Class A Common Stock shall be
paid for each share of Class A Common Stock outstanding immediately prior to
the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY,
THE SELLER AND THE PARENT
As an inducement to the Purchaser to enter into this Agreement, the
Company, the Seller and the Parent, jointly and severally, hereby represent and
warrant to the Purchaser as follows:
SECTION 3.01. Organization, Authority and Qualification of the Parent.
The Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of Japan and has all necessary corporate power and
authority to enter into this Agreement and the other Transaction Agreements to
which it is a party, to carry out its obligations hereunder and
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thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by the Parent of this Agreement and the other
Transaction Agreements to which it is a party, the performance by the Parent of
its obligations hereunder and thereunder and the consummation by the Parent of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of the Parent. This Agreement has
been, and upon their execution the other Transaction Agreements to which the
Parent is a party shall have been, duly executed and delivered by the Parent,
and (assuming due authorization, execution and delivery by the Purchaser) this
Agreement constitutes, and upon their execution each of the other Transaction
Agreements to which the Parent is a party will constitute, a legal, valid and
binding obligation of the Parent enforceable against the Parent in accordance
with its terms, except in each case as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally, by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing.
SECTION 3.02. Organization, Authority and Qualification of the Seller.
The Seller is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all necessary
corporate power and authority to enter into this Agreement and the other
Transaction Agreements to which it is a party, to carry out its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The Seller is duly licensed or qualified to do business and is in
good standing in each jurisdiction in which the properties owned or leased by
it or the operation of its business makes such licensing or qualification
necessary, except to the extent that the failure to be so licensed or qualified
would not (i) materially and adversely affect the ability of the Seller to
carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement and the other Transaction Agreements to which
it is a party or (ii) materially and adversely affect the ability of the
Company and the Subsidiaries to conduct their business. The execution and
delivery by the Seller of this Agreement and the other Transaction Agreements
to which it is a party, the performance by the Seller of its obligations
hereunder and thereunder and the consummation by the Seller of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of the Seller. This Agreement has been, and upon
their execution the other Transaction Agreements to which the Seller is a party
shall have been, duly executed and delivered by the Seller, and (assuming due
authorization, execution and delivery by the Purchaser) this Agreement
constitutes, and upon their execution each of the other Transaction Agreements
to which the Seller is a party will constitute, a legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance with its
terms, except in each case as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally, by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing.
SECTION 3.03. Organization, Authority and Qualification of the
Company. The Company is a corporation duly incorporated, validly existing and
in good standing under
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the laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement and the other Transaction Agreements to
which it is a party, to carry out its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The Company is,
or by the Closing will be, duly licensed or qualified to do business and is, or
by the Closing will be, in good standing in each jurisdiction in which the
properties owned or leased by it or the operation of its business makes such
licensing or qualification necessary, except to the extent that the failure to
be so licensed or qualified would not (i) materially adversely affect the
ability of the Company to carry out its obligations under, and to consummate
the transactions contemplated by, this Agreement and the other Transaction
Agreements to which it is a party, (ii) materially adversely affect the ability
of the Company and the Subsidiaries to conduct the Business or (iii) have a
Material Adverse Effect. The execution and delivery by the Company of this
Agreement and the other Transaction Agreements to which it is a party, the
performance by the Company of its obligations hereunder and thereunder and the
consummation by the Company of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate action on the part of the
Company. This Agreement has been, and upon their execution the other
Transaction Agreements to which the Company is a party shall have been, duly
executed and delivered by the Company, and (assuming due authorization,
execution and delivery by the Purchaser) this Agreement constitutes, and upon
their execution each of the other Transaction Agreements to which the Company
is a party will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except in
each case as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally, by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
or by an implied covenant of good faith and fair dealing. Copies of the
Certificate of Incorporation and By-laws of the Company, each as in effect on
the date hereof, have been delivered by the Parent to the Purchaser.
SECTION 3.04. Capital Stock of the Company; Ownership of the Shares.
The authorized capital stock of the Company consists of 100 shares of Common
Stock. As of the date hereof, 100 shares of Common Stock are issued and
outstanding, all of which are validly issued, fully paid and nonassessable.
None of the Outstanding Shares was issued in violation of any preemptive
rights. Except as contemplated by this Agreement, there are no options,
warrants, convertible securities or other rights or agreements to which the
Parent, the Seller or the Company is bound relating to the capital stock of the
Company or obligating the Parent, the Seller or the Company to issue or sell
any shares of capital stock of, or any other equity interest in, the Company.
There are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of Common Stock or to provide funds to,
or make any investment (in the form of a loan, capital contribution or
otherwise) in, any other Person. The Outstanding Shares constitute all the
issued and outstanding capital stock of the Company. The Outstanding Shares are
owned of record and beneficially solely by the Seller free and clear of all
adverse claims. Upon consummation of the transactions contemplated by
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this Agreement and registration of the Purchased Shares in the name of the
Purchaser in the stock records of the Company, the Purchaser, assuming it shall
have purchased the Purchased Shares for value in good faith and without notice
of any adverse claim, will own eighty percent of the issued and outstanding
capital stock of the Company free and clear of all adverse claims. Upon
issuance of and payment for the Subscription Shares in accordance with this
Agreement, the Subscription Shares will be validly issued, fully paid and
nonassessable and free of preemptive rights. Except for the Stockholders'
Agreement, there are no voting trusts, stockholder agreements, proxies or other
similar agreements or understandings in effect with respect to the voting or
transfer of any of the Outstanding Shares.
SECTION 3.05. Subsidiaries; MECA. (a) Each Material Subsidiary that is
a corporation: (i) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, (ii) has all
necessary corporate power and authority to own, operate or lease the properties
and assets now owned, operated or leased by such Subsidiary and to carry on its
business as it has been and is currently conducted by such Subsidiary and (iii)
is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary, except to the
extent that the failure to be so licensed or qualified would not have a
Material Adverse Effect. Each Material Subsidiary that is not a corporation:
(i) is duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, (ii) has all necessary power and authority to
own, operate or lease the properties and assets now owned, operated or leased
by such Subsidiary and to carry on its business as it has been and is currently
conducted by such Subsidiary and (iii) is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business makes such licensing or
qualification necessary, except to the extent that the failure to be so
licensed or qualified would not have a Material Adverse Effect.
(b) To the knowledge of the Parent, all the outstanding shares of
capital stock of each Material Subsidiary that is a corporation which are owned
directly or indirectly by the Company are validly issued, fully paid,
nonassessable and, except with respect to wholly owned Subsidiaries, free of
preemptive rights and are owned by the Company, whether directly or indirectly,
free and clear of all Encumbrances.
(c) To the knowledge of the Parent, there are no options,
warrants, convertible securities or other rights or agreements relating to the
capital stock of any Material Subsidiary or obligating the Parent, the Seller,
the Company or any Subsidiary to issue or sell any shares of capital stock of,
or any other interest in, any Material Subsidiary.
(d) To the knowledge of the Parent, copies of the charter and
by-laws (or similar organizational documents), in each case as in effect on the
date hereof, of each Material
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Subsidiary have been, or by the Closing Date shall have been, delivered by the
Parent to the Purchaser.
(e) To the knowledge of the Parent, except as disclosed to the
Purchaser in writing prior to the date hereof, there are no voting trusts,
stockholder agreements, proxies or other agreements or understandings in effect
with respect to the voting or transfer of any shares of capital stock of or any
other interests in any Material Subsidiary.
(f) Each of MCA and Funding has all necessary corporate power and
authority to enter into each of the Transaction Agreements to which it is a
party, to carry out its obligations thereunder and to consummate the
transactions contemplated thereby. Each of MCA and Funding is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the operation of its business makes
such licensing or qualification necessary, except to the extent that the
failure to be so licensed or qualified would not adversely affect in any
material respect the ability of MCA or Funding, as the case may be, to carry
out its obligations under, and to consummate the transactions contemplated by,
the Transaction Agreements to which it is a party. The execution and delivery
by each of MCA and Funding of the Transaction Agreements to which it is a
party, the performance by MCA and Funding of their respective obligations
thereunder and the consummation by MCA and Funding of the transactions
contemplated thereby have been, or by the Closing will be, duly authorized by
all requisite corporate action on the part of MCA and Funding. Upon their
execution each of the Transaction Agreements to which MCA is a party shall have
been duly executed and delivered by MCA, and will constitute a legal, valid and
binding obligation of MCA enforceable against MCA in accordance with its terms,
and upon their execution each of the Transaction Agreements to which Funding is
a party shall have been duly executed and delivered by Funding, and will
constitute a legal, valid and binding obligation of Funding enforceable against
Funding in accordance with its terms, in each case, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally, by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(g) MECA is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all necessary
corporate power and authority to enter into the Transaction Agreements to which
it is a party, to carry out its obligations thereunder and to consummate the
transactions contemplated thereby. MECA is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business makes such licensing or
qualification necessary, except to the extent that the failure to be so
licensed or qualified would not adversely affect in any material respect the
ability of MECA to carry out its obligations under, and to consummate the
transactions contemplated by, the Transaction Agreements to which it is a
party. The execution and delivery by MECA of the Transaction Agreements to
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which it is a party, the performance by MECA of its obligations thereunder and
the consummation by MECA of the transactions contemplated thereby have been, or
by the Closing will be, duly authorized by all requisite corporate action on
the part of MECA. Upon their execution each of the Transaction Agreements to
which MECA is a party shall have been duly executed and delivered by MECA, and
will constitute a legal, valid and binding obligation of MECA enforceable
against MECA in accordance with its terms, except in each case as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally, by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
SECTION 3.06. No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 3.07 have been obtained,
the execution, delivery and performance of the Transaction Agreements by the
Parent, the Seller, MECA, the Company, MCA and Funding do not and will not (a)
violate, conflict with or result in the breach of any provision of the charter
or by-laws (or similar organizational documents) of the Parent, the Seller,
MECA, the Company or, to the knowledge of the Parent, any Material Subsidiary,
(b) conflict with or violate any Law or Governmental Order applicable to the
Parent, the Seller, MECA, the Company or, to the knowledge of the Parent, any
Subsidiary, or any of their respective assets, properties or businesses,
including, without limitation, the Business, except for such conflicts or
violations as would not reasonably be expected to have a Material Adverse
Effect or materially adversely affect the ability of the Parent, the Seller,
MECA, the Company, MCA and Funding to consummate the transactions contemplated
by the Transaction Agreements, or (c) to the knowledge of the Parent, except as
disclosed to the Purchaser in writing prior to the date hereof, conflict with,
result in any breach of, constitute a default (or event which with the giving
of notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any Encumbrance on any of the Shares or on any of the assets or
properties of the Parent, the Seller, MECA, the Company or any Subsidiary
pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or arrangement to
which the Parent, the Seller, MECA, the Company or any Subsidiary is a party or
by which any of the Shares or any of such assets or properties is bound or
affected, except for such conflicts or violations as would not reasonably be
expected to have a Material Adverse Effect or materially adversely affect the
ability of the Parent, the Seller, MECA, the Company, MCA and Funding to
consummate the transactions contemplated by the Transaction Agreements.
SECTION 3.07. Governmental Consents and Approvals. The execution,
delivery and performance of the Transaction Agreements by the Parent, the
Seller, MECA, the Company, MCA and Funding do not and will not require any
consent, approval, authorization or other order of, action by, filing with or
notification to any Governmental Authority, except
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(a) the notification requirements of the HSR Act, (b) the Investment Canada Act
of 1985, (c) the Competition Act (Canada), (d) to the extent applicable,
Council Regulation No. 4064/89 of the European Community and (e) such filings
with the Japanese Ministry of Finance and the Japanese Fair Trade Commission as
may be required by applicable law.
SECTION 3.08. Financial Information. The Parent has delivered to the
Purchaser copies of the following (collectively, the "Financial Statements"):
(i) the audited consolidated balance sheet of MCA for each of the fiscal years
ended as of December 31, 1993 and December 31, 1992, and the related audited
consolidated statements of operations, shareholder's equity and cash flows of
MCA, together with all related notes and schedules thereto, accompanied by the
reports thereon of the Seller's Accountants, and (ii) the draft audited
consolidated balance sheet of MCA for the fiscal year ended as of December 31,
1994, and the related draft audited consolidated statements of operations,
shareholder's equity and cash flows of MCA, together with all related notes and
schedules thereto (the "Reference Financial Statements"). The Financial
Statements (including, without limitation, the Reference Balance Sheet) (i)
present fairly the consolidated financial condition and results of operations
of the Subsidiaries as of the dates thereof or for the periods covered thereby,
(ii) have been prepared in accordance with U.S. GAAP applied on a basis
consistent with the past practices of MCA and (iii) include all adjustments
(consisting only of normal recurring accruals) that are necessary for a fair
presentation of the consolidated financial condition of the Subsidiaries and
the results of the operations of the Subsidiaries as of the dates thereof or
for the periods covered thereby.
SECTION 3.09. No Undisclosed Liabilities. To the knowledge of the
Parent, except as do not and would not have a Material Adverse Effect, there
are no Liabilities of any Subsidiary, other than Liabilities (i) reflected or
reserved against on the Reference Balance Sheet, (ii) disclosed to the
Purchaser in writing prior to the date hereof, (iii) incurred since the date of
this Agreement in the ordinary course of the Business, consistent with the past
practice, of the Subsidiaries or (iv) which would not be required to be
presented in financial statements (or in the footnotes or schedules thereto)
prepared in accordance with U.S. GAAP. There are no Liabilities of the
Company.
SECTION 3.10. Conduct in the Ordinary Course; Absence of Certain
Changes, Events and Conditions. (a) To the knowledge of the Parent, since the
Reference Balance Sheet Date, except as disclosed to the Purchaser in writing
prior to the date hereof and except for transactions contemplated by this
Agreement, the Business has been conducted in the ordinary course and
consistent with past practice. As amplification and not limitation of the
foregoing, to the knowledge of the Parent, except as disclosed to the Purchaser
in writing prior to the date hereof and except for transactions contemplated by
this Agreement and except as would not have a Material Adverse Effect, since
the Reference Balance Sheet Date, neither the Company nor any Subsidiary has,
and prior to the Closing, neither the Company nor any Subsidiary shall have:
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(i) other than in the ordinary course of business consistent with
past practice, permitted or allowed any of the Assets or properties
(whether tangible or intangible) of the Company or any Subsidiary to be
subjected to any Encumbrance, other than Permitted Encumbrances and
Encumbrances that will be released at or prior to the Closing;
(ii) except in the ordinary course of business consistent with
past practice, discharged or otherwise obtained the release of any
Encumbrance or paid or otherwise discharged any Liability, other than
current liabilities reflected on the Reference Balance Sheet and current
liabilities incurred in the ordinary course of business consistent with
past practice since the Reference Balance Sheet Date;
(iii) made any loan to any Person;
(iv) redeemed any of the capital stock or declared, made or paid
any dividends or distributions (whether in cash, securities or other
property) to the holders of capital stock of the Company or any Subsidiary
or otherwise, other than (A) dividends, distributions and redemptions
declared, made or paid by any Subsidiary solely to the Company or another
Subsidiary (except for dividends declared, made or paid by Enterprises and
Holding) and (B) regular quarterly dividends declared or paid in respect
of the Holding Preferred Stock and the MCA Preferred Stock;
(v) merged with, entered into a consolidation with or acquired or
disposed of an interest of 5% or more in any Person or acquired all or
substantially all of the assets of any Person, or otherwise acquired or
disposed of any material properties or Assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible
assets), other than in the ordinary course of business consistent with
past practice and other than the acquisition by the Company of the common
stock of Holding;
(vi) made any capital expenditure or any commitment for any
capital expenditure materially inconsistent with the 1995 Business Plan of
MCA;
(vii) issued or sold any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same, of,
or any other equity interest in, the Company or any Material Subsidiary,
other than the issuance of the Outstanding Shares by the Company to the
Seller and the issuance of debt instruments by Funding in the ordinary
course of business consistent with past practice;
(viii) entered into any agreement, arrangement or transaction with
any of its directors, officers, employees or shareholders (or with any
relative, beneficiary, spouse or Affiliate of such Person);
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(ix) (A) except in the ordinary course of business consistent with
past practice, granted any general increase, or announced any general
increase, in the wages, salaries, compensation, bonuses, incentives,
pension or other benefits payable by the Company or any Subsidiary to any
of its employees or (B) established or increased or promised to increase
any benefits under any Employment Agreement or any Plan, in either case
except as required by applicable Law or the terms of any Employment
Agreement or any collective bargaining agreement;
(x) written down or written up (or failed to write down or write
up in accordance with U.S. GAAP consistent with past practice) the value
of any receivables or revalued any Assets of the Company or any Subsidiary
other than (A) with respect to the film "Waterworld" or (B) in the
ordinary course of business consistent with past practice and in
accordance with U.S. GAAP;
(xi) amended, terminated, cancelled or compromised any material
claims of the Company or any Subsidiary or waived any other rights of
substantial value to the Company or any Subsidiary;
(xii) made any change in any method of accounting or accounting
practice or policy used by the Company or any Subsidiary, other than such
changes required by U.S. GAAP;
(xiii) except in the ordinary course of business consistent with
past practice, amended, modified or consented to the termination of any
Material Contract or the Company's or any Subsidiary's rights thereunder;
(xiv) amended or restated the Certificate of Incorporation or the
By-laws (or other organizational documents) of the Company or any
Subsidiary without the prior written consent of the Purchaser (which shall
not be unreasonably withheld);
(xv) suffered any Material Adverse Effect, other than as a result
of general economic conditions or conditions generally affecting companies
engaged in businesses such as the Business; or
(xvi) agreed, whether in writing or otherwise, to take any of the
actions specified in this Section 3.10(a), except as expressly
contemplated by this Agreement.
(b) To the knowledge of the Parent, since the date of the
acquisition of MCA by the Parent, none of the Material Subsidiaries has merged
with, entered into a consolidation with or disposed of an interest of 5% or
more in any Person, or disposed of any material properties or Assets, real,
personal or mixed (including, without limitation, leasehold interests
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and intangible assets), other than in the ordinary course of business
consistent with past practice.
SECTION 3.11. Assets. (a) The Assets constitute substantially all
the assets and properties necessary for the conduct of the Business.
(b) To the Parent's knowledge, the Short-Term Investments of the
Company and the Subsidiaries are held for cash management and tax planning
purposes at MCA and its subsidiaries, are consistent in all material respects
with the description of such Short-Term Investments given by the Parent and its
representatives to the Purchaser prior to the date hereof, and are not
otherwise necessary for the conduct of the Business. To the extent that the
foregoing representation and warranty is untrue in any material respect
(without regard to the Parent's knowledge) the parties shall in good faith
negotiate an appropriate reduction in the Purchase Price.
SECTION 3.12. Full Disclosure. The Parent is not aware of any facts
pertaining to the Company, any Subsidiary or the Business which could
reasonably be expected to have a Material Adverse Effect and which have not
been disclosed in this Agreement or the Financial Statements or otherwise
disclosed to the Purchaser by the Parent in writing.
SECTION 3.13. No Prior Business. Neither the Seller nor the Company
has conducted any business other than in preparation for the transactions
contemplated by this Agreement.
SECTION 3.14. Brokers. Except for Goldman, Sachs & Co., Allen &
Company Incorporated and Creative Artists Agency Inc., no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Parent, the Seller or the
Company. The Parent is solely responsible for the fees and expenses of
Goldman, Sachs & Co., Allen & Company Incorporated and Creative Artists Agency
Inc.
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SECTION 3.15. Exceptions. Notwithstanding anything to the contrary
contained in this Article III, each of the representations and warranties set
forth in Sections 3.01 through 3.06 is subject to the terms and conditions,
agreements and arrangements of the Capital Contribution Agreement, the Holding
Preferred Stock, the MCA Preferred Stock, the amended and restated certificate
of incorporation and by-laws of each of Holding and Enterprises and the
Enterprises Notes, copies of which have heretofore been furnished by the Parent
to the Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Parent, the Seller and the Company to enter
into this Agreement, the Purchaser hereby represents and warrants to the
Parent, the Seller and the Company as follows:
SECTION 4.01. Organization and Authority of the Purchaser. The
Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of Canada and has all necessary corporate power and
authority to enter into this Agreement and the other Transaction Agreements to
which it is a party, to carry out its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery by the Purchaser of this Agreement and the other Transaction
Agreements to which it is a party, the performance by the Purchaser of its
obligations hereunder and thereunder and the consummation by the Purchaser of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of the Purchaser. This Agreement has
been, and upon their execution the other Transaction Agreements to which the
Purchaser is a party shall have been, duly executed and delivered by the
Purchaser, and (assuming due authorization, execution and delivery by the
Parent, the Seller, MECA, the Company, MCA and Funding, as the case may be)
this Agreement constitutes, and upon their execution each of the other
Transaction Agreements to which the Purchaser is a party will constitute, a
legal, valid and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms, except in each case as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally, by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
SECTION 4.02. No Conflict. Assuming that all filings, notifications,
consents, approvals, authorizations and other actions referred to in Section
4.03 have been made or obtained, except as may result from any facts or
circumstances relating solely to the Parent, the Seller or the Company, the
execution, delivery and performance by the Purchaser
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of the Transaction Agreements to which it is a party do not and will not (a)
violate, conflict with or result in the breach of any provision of the Articles
of Incorporation or General By-laws of the Purchaser, (b) conflict with or
violate any Law or Governmental Order applicable to the Purchaser or (c)
conflict with, or result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result
in the creation of any Encumbrance on any of the assets or properties of the
Purchaser pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument or
arrangement to which the Purchaser is a party or by which any of such assets or
properties are bound or affected, which in any case would have a material
adverse effect on the ability of the Purchaser to consummate any of the
transactions contemplated by the Transaction Agreements.
SECTION 4.03. Governmental Consents and Approvals. The execution,
delivery and performance by the Purchaser of the Transaction Agreements to
which it is a party do not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification to any
Governmental Authority, except (a) the notification requirements of the HSR
Act, (b) the Investment Canada Act of 1985, (c) the Competition Act (Canada)
and (d) to the extent applicable, Council Regulation No. 4064/89 of the
European Community.
SECTION 4.04. Investment Purpose. The Purchaser is acquiring the
Shares solely for the purpose of investment and not with a view to, or for
offer or sale in connection with, any distribution thereof. The Purchaser
acknowledges and understands that the Shares may not be sold except in
compliance with the registration requirements of the Securities Act of 1933, as
amended, unless an exemption therefrom is available.
SECTION 4.05. Litigation. No Action is pending or, to the knowledge of
the Purchaser, threatened, which seeks to delay or prevent the consummation of,
or which would be reasonably likely to materially adversely affect the
Purchaser's ability to consummate, the transactions contemplated by this
Agreement.
SECTION 4.06. Financing. The Purchaser has or has available to it
sufficient funds to purchase the Shares in accordance with the terms of this
Agreement and to pay all related fees and expenses.
SECTION 4.07. Brokers. Except for CS First Boston Corporation and
Lazard Freres & Co., no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Purchaser. The Purchaser shall be
<PAGE> 29
24
solely responsible for payment of the fees and expenses of CS First Boston
Corporation and Lazard Freres & Co.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing . (a) The
Parent, the Seller and the Company covenant and agree that, except as disclosed
to the Purchaser in writing prior to the date hereof, between the date hereof
and the time of the Closing, neither the Company nor any Material Subsidiary
shall, in any material respect, conduct its business other than in the ordinary
course and consistent with the Company's and such Material Subsidiary's prior
practice. Without limiting the generality of the foregoing, except as disclosed
to the Purchaser in writing prior to the date hereof and except as contemplated
by this Agreement, the Parent and the Seller shall cause the Company and each
Subsidiary to, and the Company shall and shall cause each Subsidiary to, (i)
use all commercially reasonable efforts to (A) preserve substantially intact
their business organizations and the business organization of the Business and
(B) keep available to the Purchaser the services of the employees of the
Company and each Subsidiary; and (ii) not knowingly engage in any practice,
take any action, fail to take any action or enter into any transaction which
would cause any representation or warranty of the Parent, the Seller or the
Company to be untrue in any material respect or result in a breach in any
material respect of any covenant made by the Parent, the Seller or the Company
in this Agreement.
(b) Except as disclosed to the Purchaser in writing prior to the
date hereof, the Parent, the Seller and the Company covenant and agree that,
prior to the Closing, without the prior written consent of the Purchaser,
neither the Company nor any Subsidiary will do any of the things enumerated in
the second sentence of Section 3.10(a) (including, without limitation, clauses
(i) through (xvi) thereof).
(c) For purposes of this Agreement, the term "commercially
reasonable efforts" shall not be deemed to require any Person to give any
guarantee or other consideration of any nature in connection with obtaining any
consent, waiver or estoppel certificate, or to consent to any change in the
terms of any material agreement or arrangement.
SECTION 5.02. Access to Information. (a) From the date hereof until
the Closing, the Parent and the Seller shall cause the Company and the
Subsidiaries and each of the Company's and the Subsidiaries' officers,
directors, employees, agents, representatives, accountants and counsel to, and
the Company shall cause the Subsidiaries and each of such Persons to: (i)
afford the officers, employees and authorized agents, accountants, counsel and
representatives of the Purchaser reasonable access to the offices, properties,
plants, other
<PAGE> 30
25
facilities, books and records of the Company and each Subsidiary and to those
officers, directors, employees, agents, accountants and counsel of the Company
and of each Subsidiary who have any knowledge relating to the Company, any
Subsidiary or the Business and (ii) furnish to the officers, employees and
authorized agents, accountants, counsel and representatives of the Purchaser
such additional financial and operating data and other information regarding
the assets, properties and goodwill of the Company, the Subsidiaries and the
Business (or legible copies thereof) as the Purchaser may from time to time
reasonably request. All information obtained by the Purchaser and its officers,
employees and authorized agents, accountants, counsel and representatives
pursuant to this Section 5.02 shall be kept confidential in accordance with the
confidentiality agreement, dated February 2, 1995, between the Parent and the
Purchaser.
(b) In order to facilitate the resolution of any claims made by
or against or incurred by the Parent or the Seller prior to the Closing, for a
period of seven years after the Closing, the Company shall, and the Purchaser
shall cause the Company to (i) retain the books and records of the Company and
the Subsidiaries relating to periods prior to the Closing in a manner
reasonably consistent with the prior practice of the Company and the
Subsidiaries and (ii) upon reasonable notice, afford the officers, employees
and authorized agents and representatives of the Parent and the Seller
reasonable access (including the right to make, at the Parent's expense,
photocopies), during normal business hours, to such books and records; provided
that the Parent shall reimburse the Purchaser promptly upon demand for all
out-of-pocket expenses incurred by the Purchaser in connection therewith.
(c) In order to facilitate the resolution of any claims made by
or against or incurred by the Purchaser, the Company or any Subsidiary after
the Closing or for any other reasonable purpose, for a period of seven years
following the Closing, the Parent and the Seller shall (i) retain the books and
records of the Parent and the Seller which relate to the Company and the
Subsidiaries and their operations for periods prior to the Closing and which
shall not otherwise have been delivered to the Purchaser, the Company or any
Subsidiary and (ii) upon reasonable notice, afford the officers, employees and
authorized agents and representatives of the Purchaser, the Company or any
Subsidiary reasonable access (including the right to make photocopies, at the
expense of the Purchaser, the Company or such Subsidiary), during normal
business hours, to such books and records; provided that the Purchaser, the
Company or such Subsidiary shall reimburse the Parent and the Seller promptly
upon demand for all out-of-pocket expenses incurred by the Parent and the
Seller in connection therewith.
SECTION 5.03. Confidentiality. The Parent and the Seller agree to, and
shall cause their respective agents, representatives, Affiliates, employees,
officers and directors to: (i) treat and hold as confidential (and not disclose
or provide access to any Person to) all information relating to product
development, pricing and marketing plans, policies and strategies, details of
consultant contracts, operations methods, product development
<PAGE> 31
26
techniques, business acquisition plans, new personnel acquisition plans and all
other confidential information with respect to the Business, the Company and
each Subsidiary, (ii) in the event that the Parent, the Seller or any such
agent, representative, Affiliate, employee, officer or director becomes legally
compelled to disclose any such information, provide the Purchaser with prompt
written notice of such requirement so that the Purchaser, the Company or any
Subsidiary may seek a protective order or other remedy or waive compliance with
this Section 5.03, and (iii) in the event that such protective order or other
remedy is not obtained, or the Purchaser waives compliance with this Section
5.03, furnish only that portion of such confidential information which is
legally required to be provided (the provision of which shall impose no
liability on the Parent and the Seller) and exercise its best efforts to obtain
assurances that confidential treatment will be accorded such information;
provided, however, that this sentence shall not apply to any information that
(i) is generally available to the public other than as a result of a disclosure
by the Parent or the Seller, (ii) is available to the Parent and the Seller on
a non-confidential basis from a source other than the Company or the
Subsidiaries, provided that the source was and is not bound by a
confidentiality agreement, known to the Parent or the Seller, with the Company
or any of the Subsidiaries, (iii) is within the Parent's and the Seller's
possession prior to its being furnished to the Parent or the Seller by or on
behalf of the Company or its Subsidiaries, provided that the source was and is
not bound by a confidentiality agreement, known to the Parent or the Seller,
with the Company or any of the Subsidiaries. The Parent and the Seller agree
and acknowledge that remedies at law for any breach of their obligations under
this Section 5.03 are inadequate and that in addition thereto the Purchaser
shall be entitled to seek equitable relief, including injunction and specific
performance, in the event of any such breach.
SECTION 5.04. Regulatory and Other Authorizations; Notices and
Consents. (a) Each of the parties hereto shall use all reasonable efforts to
obtain (or cause the Subsidiaries to obtain) all authorizations, consents,
orders and approvals of all Governmental Authorities and officials that may be
or become necessary for its execution and delivery of, and the performance of
its obligations pursuant to, the Transaction Agreements and will cooperate
fully with the other parties hereto in promptly seeking to obtain all such
authorizations, consents, orders and approvals. Each party hereto agrees to
make an appropriate filing, if necessary, pursuant to the HSR Act with respect
to the transactions contemplated by this Agreement as soon as practicable after
the date hereof and to supply as promptly as practicable to the appropriate
Governmental Authorities any additional information and documentary material
that may be requested pursuant to the HSR Act. Each party hereto agrees to use
its best efforts to contest any Action seeking to restrain, enjoin or alter the
transactions contemplated by this Agreement and to avoid the imposition of such
restraint, injunction or alteration, and if any such Governmental Order has
been granted, to use its best efforts to have such Governmental Order vacated
or lifted.
(b) The Parent shall or shall cause the Company and the
Subsidiaries to give promptly such notices to third parties and use all
commercially reasonable efforts to obtain
<PAGE> 32
27
such third party consents as are necessary or desirable in connection with the
transactions contemplated by this Agreement.
(c) The Purchaser shall cooperate and use all commercially
reasonable efforts to assist the Parent in giving such notices and obtaining
such consents.
(d) The parties hereto agree that, in the event any consent,
approval or authorization necessary or desirable to preserve for the Business,
the Company or any Subsidiary any right or benefit under any lease, license,
contract, commitment or other agreement or arrangement to which the Parent, the
Seller, the Company or any Subsidiary is a party is not obtained prior to the
Closing, the Parent and the Seller will, subsequent to the Closing, cooperate
with the Purchaser and the Company in attempting to obtain such consent,
approval or authorization as promptly thereafter as practicable. If such
consent, approval or authorization cannot be obtained, the Parent and the
Seller shall use their best efforts to provide the Company or such Subsidiary,
as the case may be, with the rights and benefits of the affected lease,
license, contract, commitment or other agreement or arrangement for the term of
such lease, license, contract or other agreement or arrangement, and, if the
Parent and the Seller provide such rights and benefits, the Company or such
Subsidiary, as the case may be, shall assume the obligations and burdens
thereunder.
SECTION 5.05. Notice of Developments. Prior to the Closing, the Parent
shall, promptly after obtaining knowledge of the occurrence (or non-occurrence)
of any event, circumstance or fact arising subsequent to the date of this
Agreement which could reasonably be expected to result in a breach of any
representation or warranty or covenant of the Parent, the Seller or the Company
in this Agreement or which could reasonably be expected to have a Material
Adverse Effect, give notice thereof to the Purchaser and shall use all
reasonable efforts to prevent or to remedy promptly such breach or satisfy such
conditions; provided, however, that the delivery of, or failure to deliver, any
notice pursuant to this Section 5.05 shall not limit or otherwise affect the
remedies available hereunder.
SECTION 5.06. Change of Name. Immediately after the Closing, the
Purchaser and the Seller shall cause Holding and Enterprises to change their
corporate names to "MCA Holding II Corp." and "MCA Holding III Corp.",
respectively.
SECTION 5.07. Non-Competition. (a) For a period of three years after
the Closing (the "Restricted Period"), neither the Parent nor the Seller shall,
without the consent of the Purchaser (which shall not be unreasonably withheld)
engage (other than to an extent incidental to the core business of the Parent),
directly or indirectly, in any business anywhere in the world that competes in
any material respect with the Business or, without the prior written consent of
the Purchaser (which shall not be unreasonably withheld), directly or
indirectly, own an interest in, manage, operate, join, control or participate
in as a partner, co-venturer or stockholder, any Person that competes in any
material respect (other than to an
<PAGE> 33
28
extent incidental to the core business of the Parent) with the Business;
provided, however, that, for the purposes of this Section 5.07, ownership of
securities having no more than five percent of the outstanding voting power of
any competitor which are listed on any national securities exchange or traded
actively in the national over-the-counter market shall not be deemed to be in
violation of this Section 5.07.
(b) The Restricted Period shall be extended by the length of any
period during which the Parent or the Seller is in breach of the terms of this
Section 5.07.
(c) The Parent and the Seller acknowledge that the covenants of
the Parent and the Seller set forth in this Section 5.07 are an essential
element of this Agreement and that, but for the agreement of the Parent and the
Seller to comply with these covenants, the Purchaser would not have entered
into this Agreement. The Parent and the Seller acknowledge that this Section
5.07 constitutes an independent covenant and shall not be affected by
performance or nonperformance of any other provision of this Agreement by the
Purchaser. The Parent and the Seller have independently consulted with their
counsel and after such consultation agree that the covenants set forth in this
Section 5.07 are reasonable and proper.
SECTION 5.08. Termination of Intercompany Agreements. Except to the
extent requested by the Parent or as otherwise agreed by the parties hereto and
except for (a) the Transaction Agreements, (b) the Support Agreement between
the Parent and Funding (and the related agreements) and the Enterprises Notes,
(c) agreements principally relating to the provision of technology to the
Company or any Subsidiary and (d) agreements principally relating to the use of
Intellectual Property by the Parent and its Affiliates in Japan, the Parent and
the Purchaser covenant and agree, promptly after the Closing, (i) to cause all
agreements between or among the Parent, the Seller or any of their respective
Affiliates (other than the Company and its Subsidiaries), on the one hand, and
the Company or any Subsidiary, on the other hand, to be terminated with no
further obligations or Liabilities on the part of the Company and the
Subsidiaries, and (ii) to execute and deliver to the Company, for the benefit
of the Company and each Subsidiary, a general release and discharge, in form
and substance satisfactory to the Purchaser, releasing and discharging the
Company and each Subsidiary from any and all obligations to indemnify the
Parent or the Seller or otherwise hold it harmless pursuant to any agreement or
other arrangement entered into prior to the Closing; provided, however, that if
in the Purchaser's good faith judgment any such agreements of the type
described above do not contain commercially reasonable, arms'-length terms, the
parties hereto agree to renegotiate the terms of such agreements in good faith
to include commercially reasonable arms'-length terms.
SECTION 5.09. Holding Preferred Stock. The parties will negotiate in
good faith the amount to be refunded to the Seller promptly following the
redemption of the Holding Preferred Stock and the extent to which the Seller,
from time to time, shall be obligated following the Closing, to reimburse
Holding, on an after-tax basis applying the Company's
<PAGE> 34
29
marginal tax rate, in connection with the quarterly dividends paid on the
Holding Preferred Stock.
SECTION 5.10. Dividend; Capital Contributions; Repayment of
Indebtedness; Transfer of Funding. (a) Prior to the Closing, the Company shall
declare a dividend of the Excess Cash available on the Business Day immediately
prior to the Closing, payable and to be paid to holders of record of Common
Stock on the Business Day immediately prior to the Closing.
(b) Prior to the Closing: (i) MCA and Funding shall enter into
the Termination Agreement, pursuant to which MCA and Funding shall terminate
the Support Agreement dated as of February 27, 1991 between MCA and Funding;
(ii) MECA shall enter into the Indemnity Agreement, pursuant to which MECA
shall indemnify and hold harmless the Purchaser and certain other Persons from
and against certain obligations specified therein; and(iii) the Parent and
Funding shall enter into the Support Agreement Amendment, pursuant to which the
Support Agreement dated as of February 27, 1991 between the Parent and Funding
shall be amended.
(c) Immediately following the issuance and sale of the Shares at
the Closing, unless otherwise agreed by the parties hereto, the Purchaser shall
cause the following actions to occur seriatim: (i) the Company shall contribute
$3.1 billion to the capital of Holding; (ii) Holding shall contribute $3.1
billion to the capital of Enterprises; (iii) Enterprises shall contribute $3.1
billion to the capital of MCA; (iv) MCA shall pay an amount equal to the
intercompany Indebtedness owing from MCA to Funding in satisfaction of such
Indebtedness (which amount shall be confirmed and, to the extent necessary,
adjusted, as soon as practicable following the Closing), whereupon the note
evidencing such intercompany Indebtedness shall be cancelled and extinguished;
and (v) MCA shall sell to MECA, and MECA shall purchase from MCA, all of the
issued and outstanding shares of capital stock of Funding, in consideration of
the sum of $1.00.
(d) The Parent shall cause Funding to delivery to the Purchaser,
on the first Business Day following December 31, 2995, a certificate, signed by
the chief financial or accounting officer of Funding, setting forth the
aggregate amount of Indebtedness of Funding as at December 31, 1995. If the
aggregate amount of Indebtedness of Funding as at December 31, 1995 exceeds $50
million, then the Parent and MECA shall enter into the MECA Support Agreement,
pursuant to which the Parent shall agree to support the obligations of MECA
under the Indemnity Agreement (which MECA Support Agreement shall provide that
it may not be amended without the written consent of the Purchaser.
SECTION 5.11. Purchases of Alcoholic Beverage Products . (a) From the
date hereof and until the Closing, the Parent, the Seller and the Company shall
use their reasonable efforts to cause (i) the percentage of the Purchaser's
alcoholic beverage products
<PAGE> 35
30
purchased by the Company and the Subsidiaries relative to all alcoholic
beverage products purchased by the Company and the Subsidiaries not to exceed
the average of such percentage during the six-month period prior to the date
hereof and (ii) the Company and the Subsidiaries to choose the alcoholic
beverage products they purchase based on their independent discretion.
(b) In the event of a termination of this Agreement pursuant to
Section 10.01, the Parent, the Seller and the Company shall use their
reasonable efforts to cause (i) the percentage of the Purchaser's alcoholic
beverage products purchased by the Company and the Subsidiaries relative to all
alcoholic beverage products purchased by the Company and the Subsidiaries
during the six-month period after the date of termination not to exceed the
average of such percentage during the six-month period prior to the date hereof
and (ii) the Company and the Subsidiaries to choose the alcoholic beverage
products they purchase based on their independent discretion.
SECTION 5.12. Further Action. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or advisable under applicable
Law, and execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and consummate and make
effective the transactions contemplated by this Agreement.
ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01. Retained Obligation of the Seller. The Seller shall, and
the Parent shall cause the Seller to, pay or reimburse the Purchaser, the
Company and the Subsidiaries, and indemnify and hold each of the Purchaser, the
Company and the Subsidiaries harmless, for 37.5 percent of each Covered
Severance Payment (as defined below) incurred by the Purchaser, the Company or
any Subsidiary. The Purchaser shall provide written notice to the Seller of
each Covered Severance Payment as soon as practicable, setting forth in
reasonable detail the payment date, amount paid or to be paid and the basis for
such payment. Within 10 Business Days after the Seller receives such written
notice, the Seller shall pay 37.5 percent of such Covered Severance Payment by
wire transfer in immediately available funds to the bank account designated by
the Purchaser in such notice. A "Covered Severance Payment" means any severance
or termination payment (including, without limitation, any tax or excise tax
gross-up amount) payable to an executive Employee solely as a result of the
transactions contemplated hereby (including as a result of an Employee's
resignation as a result thereof) but excluding any such payments payable
pursuant to any agreement provided by the Parent to the Purchaser prior to the
date hereof. In no event shall a Covered Severance Payment include any amounts
which become payable to an Employee as a consequence of any action or failure
to act by the Purchaser, the Company or any Subsidiaries after the Closing Date
which is the basis for any such Employee's right to receive payments.
<PAGE> 36
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ARTICLE VII
TAX MATTERS
[TO BE AGREED UPON BY STB & S&S TAX GROUPS]
ARTICLE VIII
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of the Parent, the Seller and
the Company. The obligations of the Parent, the Seller and the Company to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Purchaser contained in this Agreement
shall have been true and correct when made and shall be true and correct in all
material respects as of the Closing Date, with the same force and effect as if
made as of the Closing Date, other than such representations and warranties as
are made as of another date, which shall be true and correct as of such date,
the covenants and agreements contained in this Agreement to be complied with by
the Purchaser at or before the Closing shall have been complied with in all
material respects, and the Parent shall have received a certificate from the
Purchaser to such effect signed by a duly authorized officer thereof;
(b) HSR Act. Any waiting period (and any extension thereof) under
the HSR Act applicable to the purchase of the Shares contemplated hereby shall
have expired or shall have been terminated, and the consummation of the
transactions contemplated hereby shall be permitted under the Competition Act
(Canada) and Council Regulation No. 4064/89 of the European Community;
(c) No Proceeding or Litigation. No Action shall have been
commenced by any Governmental Authority against any party hereto, seeking to
restrain or materially and adversely alter the transactions contemplated by
this Agreement which, in the reasonable, good faith determination of the
Parent, is likely to render it impossible or unlawful to consummate such
transactions; provided, however, that the provisions of this Section 8.01(c)
shall not apply if the Parent, the Seller or the Company has directly or
indirectly solicited or encouraged any such Action;
<PAGE> 37
32
(d) No Order. There shall not be in effect any Law or
Governmental Order directing that the transactions contemplated by this
Agreement not be consummated or which has the effect of rendering it unlawful
to consummate such transactions; provided that the Parent, the Seller and the
Company shall have used all reasonable efforts to have any such Governmental
Order vacated or lifted; and
(e) Other Documents. The Parent shall have received, in form and
substance reasonably satisfactory to the Parent, all such other certificates,
instruments and other documents as it may reasonably request in connection with
the transactions contemplated by this Agreement.
SECTION 8.02. Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment, at or prior to the Closing,
of each of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Parent, the Seller and the Company
contained in this Agreement shall have been true and correct when made and
shall be true and correct in all material respects as of the Closing Date, with
the same force and effect as if made as of the Closing Date, other than such
representations and warranties as are made as of another date, which shall be
true and correct as of such date, the covenants and agreements contained in
this Agreement to be complied with by the Parent, the Seller and the Company at
or before the Closing shall have been complied with in all material respects,
and the Purchaser shall have received a certificate of each of the Parent, the
Seller and the Company to such effect signed by a duly authorized officer
thereof;
(b) HSR Act. Any waiting period (and any extension thereof) under
the HSR Act applicable to the purchase of the Shares contemplated hereby shall
have expired or shall have been terminated, and the consummation of the
transactions contemplated hereby shall be permitted under the Competition Act
(Canada) and Council Regulation No. 4064/89 of the European Community;
(c) No Proceeding or Litigation. No Action shall have been
commenced by any Governmental Authority against any party hereto, seeking to
restrain or materially and adversely alter the transactions contemplated by
this Agreement which, in the reasonable, good faith determination of the
Purchaser, is likely to render it impossible or unlawful to consummate such
transactions or which is reasonably likely to have a Material Adverse Effect;
provided, however, that the provisions of this Section 8.02(c) shall not apply
if the Purchaser has solicited or encouraged any such Action;
(d) No Order. There shall not be in effect any Law or
Governmental Order directing that the transactions contemplated by this
Agreement not be consummated or which
<PAGE> 38
33
has the effect of rendering it unlawful to consummate such transactions;
provided that the Purchaser shall have used all reasonable efforts to have any
such Governmental Order vacated or lifted;
(e) Legal Opinion. The Purchaser shall have received from Simpson
Thacher & Bartlett, special counsel to the Parent, a legal opinion, addressed
to the Purchaser and dated the Closing Date, as to the enforceability of the
Indemnity Agreement and the MECA Support Agreement, in form and substance
reasonably satisfactory to the Purchaser;
(f) Consents and Approvals. The Purchaser, the Parent, the Seller
and the Company shall have received all authorizations, consents, orders and
approvals of all Governmental Authorities and officials which are required for
the consummation of the transactions contemplated by this Agreement;
(g) Organizational Documents. The Purchaser shall have received a
copy of (i) the Certificates of Incorporation, as amended (or similar
organizational documents), of the Company and of each Material Subsidiary,
certified by the secretary of state of the jurisdiction in which each such
entity is incorporated or organized, as of a date not earlier than five
Business Days prior to the Closing Date and accompanied by a certificate of the
Secretary or Assistant Secretary of each such entity, dated as of the Closing
Date, stating that no amendments have been made to such Certificate of
Incorporation (or similar organizational documents) since such date, and (ii)
the By-laws (or similar organizational documents) of the Company and of each
Material Subsidiary, certified by the Secretary or Assistant Secretary of each
such entity;
(h) Certificate of Non-Foreign Status. In the event the Seller is
not incorporated under the laws of the United States or any state or political
subdivision thereof on the Closing Date, the Purchaser shall have received a
certificate from the Seller (which complies with Section 1445 of the Code) of
non-foreign status executed in accordance with the provisions of the Foreign
Investment in Real Property Tax Act;
(i) Good Standing. The Purchaser shall have received good
standing certificates for the Company and for each Material Subsidiary from the
secretary of state of the jurisdiction in which each such entity is
incorporated or organized, in each case dated as of a date not earlier than
five Business Days prior to the Closing Date and accompanied by bring-down
telegrams or similar certifications dated the Closing Date;
(j) Release of Indemnity Obligations. The Purchaser shall have
received the general release and discharge from the Parent and the Seller
referred to in Section 5.08 in form and substance satisfactory to the
Purchaser;
(k) Transaction Agreements. The Purchaser shall have received
fully executed copies of the MECA Support Agreement, the Indemnity Agreement,
the MECA
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34
Assumption Agreement and the Support Agreement Amendment, each of which shall
be in full force and effect;
(l) Other Documents. The Purchaser shall have received, in form
and substance reasonably satisfactory to the Purchaser, all such other
certificates, instruments and other documents as it may reasonably request in
connection with the transactions contemplated by this Agreement; and
(m) Due Diligence. The procedures described in paragraphs (1)
through (4) of Section 10.01 shall not be pending.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement shall survive the
Closing for eighteen months after the Closing Date; provided, however, that the
representations and warranties contained in Section 3.04 shall survive
indefinitely. Neither the period of survival nor the liability of the Parent or
the Seller with respect to the Parent's, the Seller's and the Company's
representations and warranties shall be reduced by any investigation made at
any time by or on behalf of the Purchaser, and neither the period of survival
nor the liability of the Purchaser with respect to the Purchaser's
representations and warranties shall be reduced by any investigation made at
any time by or on behalf of the Parent, the Seller or the Company. If written
notice of a claim has been given in accordance with Section 9.02(c) prior to
the expiration of the applicable representations and warranties, then the
relevant representations and warranties shall survive as to such claim, until
such claim has been finally resolved.
SECTION 9.02. Indemnification by the Parent, the Seller and the
Purchaser. (a) The Purchaser and its Affiliates, officers, directors,
employees, agents, successors and assigns shall be indemnified and held
harmless by the Parent and the Seller for any and all Liabilities, losses,
damages, claims, costs and expenses, interest, awards, judgments and penalties
(including, without limitation, attorneys' and reasonable consultants' fees and
expenses) actually suffered or incurred by them (including, without limitation,
any Action brought or otherwise initiated by any of them) (hereinafter a
"Loss"), arising out of or resulting from:
(i) the breach of any representation or warranty made by the
Parent, the Seller or the Company in this Agreement; or
(ii) the breach of any covenant or agreement by the Parent, the
Seller or the Company contained in this Agreement.
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35
To the extent that the Parent's and the Seller's undertakings set forth in this
Section 9.02(a) may be unenforceable, the Parent and the Seller shall
contribute the maximum amount that it is permitted to contribute under
applicable law to the payment and satisfaction of all Losses incurred by the
parties entitled to indemnification hereunder.
(b) The Parent, the Seller and their respective Affiliates,
officers, directors, employees, agents, successors and assigns shall be
indemnified and held harmless by the Purchaser for any and all Losses arising
out of or resulting from:
(i) the breach of any representation or warranty made by the
Purchaser in this Agreement; or
(ii) the breach of any covenant or agreement by the Purchaser
contained in this Agreement.
To the extent that the Purchaser's undertakings set forth in this Section
9.02(b) may be unenforceable, the Purchaser shall contribute the maximum amount
that it is permitted to contribute under applicable law to the payment and
satisfaction of all Losses incurred by the parties entitled to indemnification
hereunder.
(c) Any party seeking indemnification under this Article IX (an
"Indemnified Party") shall give each party from whom indemnification is being
sought (each, an "Indemnifying Party") notice of any matter which such
Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement, within 60 days of such determination,
stating the amount of the Loss, if known, and method of computation thereof,
and containing a reference to the provisions of this Agreement in respect of
which such right of indemnification is claimed or arises. The obligations and
Liabilities of an Indemnifying Party under this Article IX with respect to
Losses arising from claims of any third party which are subject to the
indemnification provided for in this Article IX ("Third Party Claims") shall be
governed by and contingent upon the following additional terms and conditions:
if an Indemnified Party shall receive notice of any Third Party Claim, the
Indemnified Party shall give the Indemnifying Party notice of such Third Party
Claim within 30 days of the receipt by the Indemnified Party of such notice;
provided, however, that the failure to provide such notice shall not release
the Indemnifying Party from any of its obligations under this Article IX except
to the extent the Indemnifying Party is materially prejudiced by such failure.
If the Indemnifying Party acknowledges in writing its obligation to indemnify
the Indemnified Party hereunder against any Losses that may result from such
Third Party Claim, then the Indemnifying Party shall be entitled to assume and
control the defense of such Third Party Claim at its expense and through
counsel of its choice if it gives notice of its intention to do so to the
Indemnified Party within ten Business Days of the receipt of such notice from
the Indemnified Party; provided, however, that if there exists or is reasonably
<PAGE> 41
36
likely to exist a conflict of interest that would make it inappropriate in the
judgment of the Indemnified Party for the same counsel to represent both the
Indemnified Party and the Indemnifying Party, then the Indemnified Party shall
be entitled to retain its own counsel, in each jurisdiction for which the
Indemnified Party determines counsel is required, at the expense of the
Indemnifying Party. In the event the Indemnifying Party exercises the right to
undertake any such defense against any such Third Party Claim as provided
above, the Indemnified Party shall cooperate with the Indemnifying Party in
such defense and make available to the Indemnifying Party, at the Indemnifying
Party's expense, all witnesses, pertinent records, materials and information in
the Indemnified Party's possession or under the Indemnified Party's control
relating thereto as is reasonably required by the Indemnifying Party.
Similarly, in the event the Indemnified Party is, directly or indirectly,
conducting the defense against any such Third Party Claim, the Indemnifying
Party shall cooperate with the Indemnified Party in such defense and make
available to the Indemnified Party, at the Indemnifying Party's expense, all
such witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as is
reasonably required by the Indemnified Party. The Indemnifying Party shall not,
without the written consent of the Indemnified Party, (i) settle or compromise
any Third Party Claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the delivery by the claimant or
plaintiff to the Indemnified Party of a written release from all liability in
respect of such Third Party Claim or (ii) settle or compromise any Third Party
Claim in any manner that may adversely affect the Indemnified Party other than
as a result of money damages or other money payments (so long as the
Indemnifying Party has acknowledged in writing its obligation to indemnify).
Similarly, no Third Party Claim which is being defended in good faith by the
Indemnifying Party in accordance with the terms of this Agreement shall be
settled by the Indemnified Party without the written consent of the
Indemnifying Party.
SECTION 9.03. Limits on Indemnification. (a) No amount shall be
payable by any Indemnifying Party pursuant to Section 9.02(a) unless the
aggregate amount of Loss indemnifiable under Section 9.02(a) exceeds one
percent of the Purchase Price. No amount shall be payable by any Indemnifying
Party pursuant to Section 9.02(b) unless the aggregate amount of Loss
indemnifiable under Section 9.02(b) exceeds one percent of the Purchase Price.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the maximum amount of indemnifiable Losses which may be recovered
from the Parent and the Seller, on the one hand, or the Purchaser, on the other
hand, arising out of or resulting from the causes enumerated in Section 9.02
shall be an amount equal to the Purchase Price.
SECTION 9.04. Tax Matters. Anything in this Article IX to the contrary
notwithstanding, the rights and obligations of the parties with respect to
indemnification for any and all Tax matters shall be governed by Article VII.
<PAGE> 42
37
SECTION 9.05. Indemnification as Exclusive Remedy. The indemnification
provided in this Article IX, subject to the limitations set forth herein, shall
be the exclusive post-Closing remedy available to the Purchaser for any breach
of any representation or warranty by the Parent or the Seller contained in
Article III. Specific performance and injunctive relief, but not recision
(other than with respect to the representations and warranties set forth in
Section 3.04, for which recision shall be available), shall be available with
respect to breaches of other covenants or agreements by the Parent or the
Seller contained in this Agreement.
ARTICLE X
TERMINATION AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the Purchaser if, between the date hereof and the time
scheduled for the Closing: (i) any material representation or warranty of the
Parent, the Seller or the Company contained in this Agreement shall not have
been true and correct when made or shall have become untrue, or the Parent, the
Seller or the Company shall not have complied with any material covenant or
agreement to be complied with by it and contained in this Agreement, in any
case such that the conditions set forth in Article VIII would be incapable of
being satisfied by July 31, 1995, or (ii) the Parent, the Seller, the Company
or any Subsidiary makes a general assignment for the benefit of creditors, or
any proceeding shall be instituted by or against the Parent, the Seller, the
Company or any Subsidiary seeking to adjudicate any of them a bankrupt or
insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any Law
relating to bankruptcy, insolvency or reorganization; or
(b) by the Parent if any material representation or warranty of
the Purchaser contained in this Agreement shall not have been true or correct
when made or shall have become untrue, or the Purchaser shall not have complied
with any material covenant or agreement to be complied with by it and contained
in this Agreement, in any case such that the conditions set forth in Article
VIII would be incapable of being satisfied by July 31, 1995; or
(c) by either the Parent or the Purchaser if the Closing shall
not have occurred by July 31, 1995; provided, however, that the right to
terminate this Agreement under this Section 10.01(c) shall not be available to
any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Closing
to occur on or prior to such date; or
<PAGE> 43
38
(d) by either the Purchaser or the Parent in the event that any
Governmental Authority shall have issued a final, non-appealable order, decree
or ruling or taken any other final, non-appealable action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or
(e) by the mutual written consent of the Parent and the
Purchaser.
This Agreement may also be terminated by the Purchaser subject to and
in accordance with the following procedures:
(1) On or prior to the twenty-eighth day following the execution
of this Agreement, the Purchaser may deliver to the Parent a written notice to
terminate this Agreement (the "Termination Notice") if the Purchaser's
financial advisor, CS First Boston Corporation ("CSFB"), has advised the
Purchaser that, based solely upon CSFB's analysis (the "CSFB Analysis") of the
total mix of Additional Information regarding MCA, the Company and the
Subsidiaries, after having reviewed its analysis and evaluation with the
Parent's financial advisors, Allen & Company Incorporated ("Allen") and
Goldman, Sachs & Co. ("Goldman"), CSFB is of the good faith judgment (the "CSFB
Judgment") that the net adverse effect on the value of MCA arising from the
Additional Information, after giving effect to any increases in value that are
attributable to positive aspects of the Additional Information, exceeds $400
million. The Termination Notice shall be accompanied by a copy of the CSFB
Analysis and a copy of the presentation of CSFB to the Board of Directors of
the Purchaser on April 6, 1995. The Purchaser shall use its reasonable efforts
to complete the foregoing procedure within twenty-one days following the
execution of this Agreement.
(2) Within five days after receipt of the Termination Notice, if
any, the Parent may deliver to the Purchaser a written notice (the "Review
Notice") that, based on the good faith judgment of both of Allen and Goldman,
the Parent disagrees with the CSFB Judgment. If the Parent does not deliver a
Review Notice within five days after receipt of the Termination Notice, this
Agreement shall terminate upon the expiration of such five-day period. If the
Parent delivers the Review Notice within such five-day period, the Parent and
the Purchaser shall mutually select an investment banking firm of recognized
international standing to act as arbitrator (such firm, the "Independent
Banker"), and shall provide to the Independent Banker all information which the
Independent Banker may reasonably request and which is available to the Parent
and the Purchaser. The Independent Banker shall, within ten Business Days
thereof, advise the Parent and the Purchaser whether the Independent Banker
agrees with the CSFB Judgment. In expressing such judgment, the Independent
Banker shall not consider any differences in the Business resulting from public
dissemination of the Termination Notice or changes, whether actual or
prospective, in general conditions applicable to the industry in which the
Business is involved or general economic conditions. If the Independent Banker
agrees that the net adverse effect on the value of the Business arising from
<PAGE> 44
39
the Additional Information, after giving effect to any increases in value that
are attributable to positive aspects of the Additional Information, exceeds
$400 million, this Agreement shall terminate upon the rendering of such advice.
If the Independent Banker does not agree that the net adverse effect on the
value of the Business arising from the Additional Information, after giving
effect to any increases in value that are attributable to positive aspects of
the Additional Information, exceeds $400 million, this Agreement shall not
terminate and shall remain in full force and effect.
(3) The fees and expenses of the Independent Banker shall be
borne one-half by the Purchaser and one-half by the Parent.
(4) In acting under this Agreement, the Independent Banker shall
be entitled to the privileges and immunities of arbitrators.
SECTION 10.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of either party hereto
except (a) as set forth in Sections 5.03 and 11.01 and (b) that nothing herein
shall relieve either party from liability for any willful breach of this
Agreement.
SECTION 10.03. Waiver. Any party to this Agreement may (a) extend the
time for the performance of any of the obligations or other acts of any other
party, (b) waive any inaccuracies in the representations and warranties of
another party contained herein or in any document delivered by another party
pursuant hereto or (c) waive compliance with any of the agreements or
conditions of another party contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the
party to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights hereunder shall
not constitute a waiver of any of such rights.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with the Transaction Agreements and the transactions contemplated
thereby shall be paid by the party incurring such costs and expenses, whether
or not the Closing shall have occurred.
<PAGE> 45
40
SECTION 11.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 11.02):
(a) if to the Parent, the Seller or the Company:
Matsushita Electric Industrial Co., Ltd.
1006, Kadoma
Osaka, 571, Japan
Telecopy: 011-81-6-906-1523
Attention: Mr. Minoru Washio
Director
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017 U.S.A.
Telecopy: (212) 455-2502
Attention: John G. Finley, Esq.
(b) if to the Purchaser:
The Seagram Company Ltd.
1430 Peel Street
Montreal, Quebec
H3A 1S9 Canada
Telecopy: (514) 987-5232
Attention: Vice President, Legal and Environmental Affairs
with copies to:
Joseph E. Seagram & Sons, Inc.
375 Park Avenue
New York, New York 10152 U.S.A.
Telecopy: (212) 572-1398
Attention: Vice President - Legal Affairs, General Counsel
and
<PAGE> 46
41
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022 U.S.A.
Telecopy: (212) 848-7179
Attention: Peter D. Lyons, Esq.
SECTION 11.03. Public Announcements. No party to this Agreement shall
make, or cause to be made, any press release or public announcement in respect
of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
parties, and the parties shall cooperate as to the timing and contents of any
such press release or public announcement; provided, however, that a party may,
without the prior consent of the other parties, make such press release or
public announcement as may be required by law or any listing agreement with a
securities exchange if it has used all reasonable efforts to consult with the
other parties and to obtain such parties' consent but has been unable to do so
in a timely manner.
SECTION 11.04. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
SECTION 11.06. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties hereto with respect to the subject matter hereof.
SECTION 11.07. Assignment. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of the Parent
and the
<PAGE> 47
42
Purchaser (which consent may be granted or withheld in the sole discretion of
the Parent or the Purchaser); provided, however, that the Purchaser may assign
this Agreement to an Affiliate of the Purchaser without the consent of the
Parent, but no such assignment shall relieve the Purchaser of its obligations
hereunder if such assignee does not perform such obligations.
SECTION 11.08. No Third Party Beneficiaries. Except for the provisions
of Article IX relating to Indemnified Parties, this Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 11.09. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
parties hereto or (b) by a waiver in accordance with Section 10.03.
SECTION 11.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, applicable to
contracts executed in and to be performed entirely within that state. All
actions and proceedings arising out of or relating to this Agreement or any
other Transaction Agreement shall be heard and determined in any New York state
or federal court sitting in the City of New York, and the parties hereto hereby
irrevocably submit to the exclusive jurisdiction of such courts in any such
action or proceeding and irrevocably waive the defense of an inconvenient forum
to the maintenance of any such action or proceeding. The Parent hereby
irrevocably appoints CT Corporation System (the "Parent Process Agent"), with
an office on the date hereof at 1633 Broadway, New York, New York 10019, United
States, as its agent to receive on behalf of the Parent and its property
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding. Such service may be made by mailing
or delivering a copy of such process to the Parent in care of the Parent
Process Agent at the Parent Process Agent's above address, and the Parent
hereby irrevocably authorizes and directs the Parent Process Agent to accept
such service on behalf of the Parent. The Purchaser hereby irrevocably appoints
Joseph E. Seagram & Sons, Inc. (the "Purchaser Process Agent"), with an office
on the date hereof at 375 Park Avenue, New York, New York 10152, United States,
Attention: Vice President - Legal Affairs, General Counsel, as its agent to
receive on behalf of the Purchaser and its property service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding. Such service may be made by mailing or delivering a copy
of such process to the Purchaser in care of the Purchaser Process Agent at the
Purchaser Process Agent's above address, and the Purchaser hereby irrevocably
authorizes and directs the Purchaser Process Agent to accept such service on
behalf of the Purchaser. As an alternative method of service, each party hereto
also irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to such party at
its address specified in Section 11.02. The parties hereto agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced
<PAGE> 48
43
in other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Section 11.10 shall affect the right of any party
hereto to serve legal process in any other manner permitted by law. The
consents to jurisdiction set forth in this Section 11.10 shall not constitute
general consents to service of process in the State of New York and shall have
no effect for any purpose except as provided in this Section 11.10 and shall
not be deemed to confer rights on any person other than the parties hereto.
SECTION 11.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 11.12. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
<PAGE> 49
44
IN WITNESS WHEREOF, the Parent, the Seller, the Company and the
Purchaser have caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly authorized.
MATSUSHITA ELECTRIC
By:
----------------------
Name:
Title:
HOME HOLDING INC.
By:
----------------------
Name:
Title:
HOME HOLDING II INC.
By:
----------------------
Name:
Title:
THE SEAGRAM COMPANY LTD.
By:
----------------------
Name:
Title:
<PAGE> 50
EXHIBIT 1.01(b)
FORM OF TAX ALLOCATION AGREEMENT
TAX ALLOCATION AGREEMENT (this "Agreement") dated as of
__________ ___, 1995 among Matsushita Electric Industrial Co., Ltd., a
corporation organized under the laws of Japan ("Matsushita"), The Seagram
Company Ltd., a corporation organized under the laws of Canada ("Seagram"), J.E.
Seagram Corp., a Delaware corporation and an indirect wholly owned subsidiary of
Seagram ("Parent"), and Home Holding II Inc., a Delaware corporation (the
"Company", as the context requires, or "Subgroup Parent", as the context
requires). As used in this Agreement, the terms "Subsidiary", "Subsidiaries" and
"Subgroup Member" shall have the meanings assigned to them in paragraph 2.
W I T N E S S E T H :
WHEREAS, Matsushita, Home Holding Inc. (the "Seller"), the
Company and Seagram have entered into an Amended and Restated Stock Purchase
Agreement, dated as of April 9, 1995 (the "Stock Purchase Agreement");
WHEREAS, Seagram has assigned its rights under the Stock
Purchase Agreement to Seagram Developments, Inc., a wholly owned subsidiary of
Parent ("Seagram Developments");
WHEREAS, Matsushita, the Seller, the Company, Matsushita
Holding Corp., Seagram and Seagram Developments have entered into the
Reimbursement Agreement dated as of __________ __, 1995 (the "Reimbursement
Agreement") and agreed that the Company shall refund certain investments to the
Seller following redemption of the Holding Preferred Stock (as defined in the
Stock Purchase Agreement) and that the Seller shall reimburse Subgroup Members
(as defined below) and the Seagram Group (as defined in the Reimbursement
Agreement) for certain dividend payments required to be made by the Company and
taxes imposed on certain investment income recognized by the Subgroup Members
and the Seagram Group;
WHEREAS, Parent is the common parent of an affiliated group,
within the meaning of Section 1504 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Treasury Regulations (including Temporary
Regulations) promulgated by the United States Department of Treasury with
respect to the Code (the "Regulations"), that includes Seagram Developments, the
Company and the Subsidiaries (as defined below);
WHEREAS, Parent and the Company desire to establish a method
for allocating the consolidated U.S. federal income tax liability of such
affiliated group (the "U.S. Group") among the members of the U.S. Group and for
reimbursing Parent for the payment of such liability; and
WHEREAS, Parent and the Company desire to establish a method
for allocating the consolidated, combined, unitary or similar group income tax
liability of such group under state, local or foreign laws among the members of
the group and for reimbursing Parent or any subsidiary thereof for the payment
of such liability;
1
<PAGE> 51
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements and covenants contained in this Agreement, the Stock Purchase
Agreement and the Reimbursement Agreement, the parties hereto hereby agree as
follows:
1. The Consolidated Federal Income Tax Return. Each Subgroup Member agrees
to be included in, and Parent agrees to file, a consolidated U.S.
federal income tax return for each taxable year (each, an "Applicable
Period") in which Parent and each Subgroup Member are eligible to file
consolidated returns as an affiliated group of corporations, as such
term is defined in Section 1504 of the Code.
2. Subgroup Parent, Subgroup, Subsidiary and Subgroup Member. For purposes
of making the computations described herein, Subgroup Parent and all
lower-tier entities (with respect to Subgroup Parent) in which Subgroup
Parent has direct or indirect ownership (each, a "Subsidiary") shall be
treated as an affiliated group of corporations ("Subgroup"), the common
parent of which is Subgroup Parent; provided, however, that Subgroup
shall only include any Subsidiary to the extent that such Subsidiary
meets the test of affiliation under Section 1504 of the Code as it
would apply to such Subgroup. Subgroup Parent and each Subsidiary which
is a member of the Subgroup are sometimes referred to herein
individually as a "Subgroup Member".
3. Computation by Parent; Separate Return Principles. For each Applicable
Period, Parent shall compute an estimated and an actual U.S. federal
income tax liability for Subgroup. For purposes of computing Subgroup's
estimated and actual U.S. federal income tax liabilities, Subgroup
shall be treated as a separate affiliated group of which the Company is
the common parent.
4. Liability of Subgroup to Parent.
(a) Estimated Liability. If Parent's good faith calculation under
paragraph 3 with respect to Subgroup results in an estimated
U.S. federal income tax liability for Subgroup for any
Applicable Period, then, in that event, Subgroup Parent shall
pay such estimated income tax liability to Parent in such
amounts and at such times as Subgroup Parent would have been
required to pay the Internal Revenue Service if Subgroup were
a separate affiliated group of corporations making separate
estimated consolidated payments of U.S. federal income tax and
filing a separate consolidated U.S. federal income tax return.
(b) Actual Liability.
(i) After the end of each Applicable Period, Parent shall
compute Subgroup's actual U.S. federal income tax
liability pursuant to paragraph 3.
(ii) If it is finally determined that Subgroup's actual
U.S. federal income tax liability for any Applicable
Period exceeds the amount of Subgroup Parent's
estimated U.S. federal income tax payments to Parent
for such Applicable Period, then, in that event,
Subgroup Parent shall pay to Parent the excess of its
actual U.S. federal income tax liability over its
estimated
2
<PAGE> 52
U.S. federal income tax payments for such Applicable
Period. However, if Subgroup Parent's estimated U.S.
federal income tax payments to Parent for the
Applicable Period exceed Subgroup's finally
determined actual U.S. federal income tax liability,
the excess shall be refunded to Subgroup Parent or
applied against Subgroup's U.S. federal income tax
liability for the following Applicable Period (and
taken into consideration in calculating Subgroup's
estimated U.S. federal income tax liability for such
following Applicable Period), at the option of
Subgroup Parent.
(iii) If Parent's calculation with respect to Subgroup's
actual U.S. federal income tax liability results in a
net operating loss ("Subgroup NOL") for the
Applicable Period that Parent elects to carry back
under the principles of paragraph 3 and Sections 172
and 1502 of the Code and the Regulations thereunder
to a prior taxable period or periods of Subgroup with
respect to which Subgroup Parent previously made
payments to Parent pursuant to subparagraph (a) or
(b)(ii) of this paragraph, then, in that event,
Parent shall pay Subgroup Parent an amount equal to
the tax refund to which Subgroup Parent would have
been entitled (but not in excess of the aggregate
amounts previously paid to Parent under subparagraph
(a) as adjusted by subparagraph (b)(ii) of this
paragraph with respect to the three preceding taxable
years, reduced by the aggregate refunds paid to
Subgroup Parent under this subparagraph (b)(iii) with
respect to such years) under the separate
consolidated return principles of paragraph 3.
(iv) If Parent's calculation with respect to Subgroup
results in a Subgroup NOL for any Applicable Period
that cannot be carried back under the principles of
paragraph 3 and Sections 172 and 1502 of the Code and
the Regulations thereunder to a prior taxable period
or periods of Subgroup with respect to which Subgroup
Parent previously made payments to Parent pursuant to
subparagraph (a) or (b)(ii) of this paragraph, then,
in that event, such Subgroup NOL shall be a Subgroup
NOL carryover to be used by Parent in computing
Subgroup's U.S. federal income tax liability pursuant
to paragraph 3 for future Applicable Periods, under
the law applicable to net operating loss carryovers
in general, as such law applies to the relevant
Applicable Period.
(v) Any adjustment other than a Subgroup NOL carryback
described in subparagraph (iii) or a net capital loss
or credit carryback or carryover described in
subparagraph (vii) of this paragraph, for whatever
reason (including, without limitation, audits or
amended returns), to any item affecting a calculation
of U.S. federal income tax liabilities under
paragraph 3 and subparagraph (b) of this paragraph
shall be given effect by Parent in redetermining the
amount payable by or due to Subgroup Parent pursuant
to this Agreement as if such adjustment were part of
the original determination hereunder, including any
interest and penalties that would be due to or from
the Internal Revenue Service, under the separate
3
<PAGE> 53
consolidated return principles of paragraph 3 as a
result of such adjustment.
(vi) Any payments required to be made by Subgroup Parent
under subparagraphs 4(b)(ii) and (iii) shall be made
promptly (not later than five (5) days) after the
date that Parent would be required to make payments
of the U.S. Group's consolidated U.S. federal income
tax liability for the Applicable Period, whether or
not such liability exists for the Applicable Period.
Any payments required to be made under subparagraph
4(b)(v) shall be made promptly (not later than seven
(7) days) after a "determination" (as defined in
Section 1313(a) of the Code) of any adjustment is
made and to which subparagraph 4(b)(v) relates.
(vii) Principles similar to those of subparagraphs (iii)
and (iv) of this paragraph shall apply in the case of
any net capital loss, credit carrybacks or carryovers
or similar tax benefits of Subgroup (which will be
calculated under the separate consolidated return
principles of paragraph 3).
5. Allocation of Subgroup Liability among Members of Subgroup.
(a) Each Subgroup Member shall pay an amount to Subgroup Parent
equal to such Subgroup Member's estimated and actual U.S.
federal income tax liability including, for purposes of this
paragraph 5, any U.S. federal income tax liability resulting
from any income, including, but not limited to, Investment
Income (as defined in the Reimbursement Agreement), calculated
on a stand-alone basis as if such Subgroup Member filed a
separate U.S. federal income tax return and was not a member
of a consolidated group (as defined under Section 1504 of the
Code). In calculating each Subgroup Member's actual and
estimated stand-alone U.S. federal income tax liability,
principles similar to those of paragraph 4 of this Agreement
shall apply.
(b) Any payments required to be made under this paragraph 5 shall
be made promptly (not later than seven (7) days) before the
date Subgroup Parent is required to pay Parent pursuant to
subparagraph 4(b)(vi) of this Agreement whether or not such
liability exists for the Applicable Period.
6. Elections. All elections relating to the filing of a consolidated U.S.
federal income tax return which are required or are available (as well
as elections applicable to the computation of Subgroup's estimated and
actual liabilities under paragraph 3 and each Subgroup Member's
standalone estimated and actual liabilities under paragraph 5) shall be
made by Parent. Each Subsidiary shall execute such consents and other
documents as are necessary in connection therewith.
In making elections applicable to the computation of Subgroup's
estimated and actual liabilities under paragraph 3 and each Subgroup
Member's standalone estimated and actual liabilities under paragraph 5,
solely for purposes of this Agreement, Parent shall make such elections
in a reasonable manner so as to minimize the tax liability of the
4
<PAGE> 54
Subgroup, provided, however, that any such election shall be made in a
manner that is consistent with the elections made and positions taken
in computing the U.S. Group's actual U.S. federal income tax
liabilities for its consolidated U.S. federal income tax returns.
7. Liability for Taxes; Refunds.
(a) Parent, as the common parent and agent of the U.S. Group,
shall be responsible for, and shall pay, any consolidated U.S.
federal income tax liability of the U.S. Group, and shall have
the sole right to any refunds from the Internal Revenue
Service.
(b) Notwithstanding any other provision of this Agreement, each
Subsidiary shall be jointly and severally liable to Parent for
Subgroup Parent's obligations under this Agreement, and all
members of the U.S. Group which are not members of Subgroup
shall be jointly and severally liable to Subgroup Parent for
Parent's obligations under this Agreement.
(c) Except to the extent Subgroup Parent or a Subsidiary is
required to make any payment under this Agreement, Parent and
each member of the U.S. Group, other than Subgroup Parent or
any Subgroup Member, shall be jointly responsible for, and
indemnify, each Subgroup Member and shall jointly and
severally hold such Subgroup Member harmless against all U.S.
federal income tax liabilities relating to the taxable years
of such Subgroup Member during which such Subgroup Member is
or was a member of the U.S. Group.
8. Reliance on Income Projections. For purposes of making the estimated
U.S. federal income tax liability computations required by this
Agreement, Parent and Subgroup Parent may rely on the same income and
loss projections they generally use in their overall tax planning.
9. Effective Term of this Agreement. For purposes of the application of
this Agreement to the U.S. Group's U.S. federal income tax liability
and except as otherwise provided in paragraph 13, this Agreement shall
be effective for the date commencing with each Subgroup Member's
joining the U.S. Group in 1995, and with respect to each Subgroup
Member joining the U.S. Group thereafter, on the date such Subgroup
Member meets the test of affiliation under Section 1504 of the Code,
and shall remain in effect with respect to each such Subgroup Member
until the date on which (i) such Subgroup Member ceases to be a member
of the U.S. Group under the Code or other applicable U.S. federal
income tax law, (ii) the U.S. Group no longer remains in existence
within the meaning of Treasury Regulation Section 1.1502-75(a), or
(iii) the U.S. Group is no longer eligible to file, or is no longer
eligible to join in the filing of, a consolidated return for U.S.
federal income tax purposes. After such date, (i) Parent and such
Subgroup Member, respectively, shall remain fully responsible for any
payments either was required to make under this Agreement in respect of
all computations regarding Applicable Periods during which such
Subgroup Member was a member of the U.S. Group, and (ii) all other
obligations of
5
<PAGE> 55
such Subgroup Member and Parent under this Agreement shall terminate
unless otherwise agreed.
10. Foreign, State and Local Income Tax Returns. Principles similar to the
principles set forth in the foregoing paragraphs, to the extent
appropriate, shall apply for purposes of allocating any state, local or
foreign combined, unitary tax or similar tax liabilities.
11. Definitions. For purposes of this Agreement the term "tax" or "taxes"
shall have the same meaning as "Taxes" in the Stock Purchase Agreement.
12. Purpose and Effect. This Agreement is entered into by the parties
solely in recognition of the mutual benefits and, to the extent
appropriate, the detriments resulting from filing U.S. federal (or
foreign, state or other local) consolidated, combined, unitary or
similar tax returns. The respective amounts of tax liability allocated
to Seagram, the Company or their respective subsidiaries for purposes
of computing such entities' earnings and profits for U.S. federal (or
foreign, state or other local) income tax purposes may differ from
those determined in accordance with this Agreement. Furthermore, any
amount treated for U.S. federal (or foreign, state or other local)
income tax purposes, on account of such a difference, as a contribution
to capital or a distribution with respect to stock, or a combination
thereof, as the case may be, shall be treated as a contribution to
capital, a distribution with respect to stock, or a combination
thereof, for U.S. federal income tax purposes or to the extent required
by laws of foreign, state or other local jurisdictions.
13. Amendments. No modification, extension, renewal, rescission,
termination or waiver of any of the provisions contained in this
Agreement, or any future representation, promise or condition in
connection with the subject matter hereof, shall be binding upon the
parties hereto, unless made in writing and signed on its behalf by one
of its officers.
14. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns; provided, however, that subparagraphs 4(iii), (iv) and (vii)
of this Agreement shall terminate in the event the Seller transfers, or
is caused to transfer, its ownership interest in the Company to an
entity which is not a direct or indirect wholly-owned subsidiary of
Matsushita.
6
<PAGE> 56
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.
By:
--------------
THE SEAGRAM COMPANY LTD.
By:
---
J.E. SEAGRAM CORP.
By:
---
HOME HOLDING II INC.
By:
---
THE SEAGRAM COMPANY LTD., on behalf of
members which are not Subgroup Members
By:
---
HOME HOLDING II INC., on behalf of
Subgroup Members
By:
-------------------------------------
7
<PAGE> 57
EXHIBIT 2.07(a)
FORM OF RESTATED
CERTIFICATE OF INCORPORATION
OF
MCA HOLDING I CORP.
ARTICLE I
NAME
The name of the corporation is MCA Holding I Corp. (the "Corporation")
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The address of the registered office of the Corporation in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.
ARTICLE III
CORPORATE PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "General Corporation Law".
<PAGE> 58
2
ARTICLE IV
CAPITAL STOCK
(1) The total number of shares of capital stock which the
Corporation shall have the authority to issue is 110,000, consisting of:
(a) 10,000 shares of Class A Common Stock, par value $.01 per
share (the "Class B Common Stock") (the Class A Common Stock and the
Class B Common Stock, collectively, the "Common Stock").
(b) 10,000 shares of Class B Common Stock, par value $.01 per
share (the "Class B Common Stock") (the Class A Common Stock and the
Class B Common Stock, collectively, the "Common Stock").
(2) The following is a statement of the powers, privileges, rights,
qualifications, limitations and restrictions with respect to the Common Stock.
Except as otherwise provided in this Article IV or as otherwise required by
applicable law, all shares of Common Stock shall be identical in all respects
and shall entitle the holders thereof to the same rights and privileges, and
shall subject them to the same qualification, limitations and restrictions.
(a) Except as otherwise provided in this Article IV or as
otherwise required by applicable law, all holders of Common Stock shall
vote as a single class on all matters to be voted on by the stockholders
of the Corporation, holders of Class A Common Stock shall be entitled to
ten votes per share on all matters to be voted on by the stockholders of
the Corporation and holders of Class B Common Stock shall be entitled to
one vote per share on all matters to be voted on by the stockholders of
the Corporation.
(b) As and when dividends are declared or paid on any Class of
Common Stock, whether in cash, property or securities of the
Corporation, the holders of Class A Common Stock and the holders of
Class B Common Stock shall be entitled to participate in such dividends
ratably on a per share basis.
(c) The holders of Class A and Class B Common Stock shall be
entitled to participate ratably on a per share basis in all
distributions to the holders of Common Stock in any liquidation,
dissolution or winding up of the Corporation.
(d) If the Corporation in any manner subdivides or combines
the outstanding shares of one Class of Common Stock, the outstanding
shares of the other Class of Common Stock shall be proportionately
subdivided or combined in a similar manner.
(e) No amendment or waiver of any provision of this Article
IV shall be effective without the prior approval of the holders of a
majority of the then outstanding shares of Class B Common Stock voting
as a separate class.
<PAGE> 59
3
ARTICLE V
DIRECTORS
(1) Elections of directors of the Corporation need not be by written
ballot, except and to the extent provided in the By-Laws of the Corporation.
(2) To the fullest extent permitted by the General Corporation Law
as it now exists and as it may hereafter be amended, no director of the
Corporation shall be personally liable the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
(1) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's fee),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him n connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in, or no opposed to, the
best interests of the Corporation, and , with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person seeking indemnification did not act
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(2) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expense (including
attorney's fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the Corporation unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite
<PAGE> 60
4
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnify for such expenses
which the Court of Chancery or such other court shall deem proper.
(3) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits of otherwise in defense of any
action, suit or proceeding referred to in Sections (1) and (2) of this Article
VI, or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
(4) Any indemnification under Section (1) and (2) of this Article VI
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in such in such Section (1) and (2).
Such determination shall be made (a) by the Board of Directors of the
Corporation by a majority vote of the directors who were not parties to such
action, suit or proceeding even though less than a quorum, or (b) if there are
not such directors, or if such directors so direct, by independent legal counsel
in a written opinion, or (c) by the stockholders.
(5) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of any
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation authorized in this Article VI. Such expenses (including
attorneys' fees) incurred by other employed and agents may be so paid upon such
terms and conditions, if any, as the Board of Directors of the Corporation deems
appropriate.
(6) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other sections of this Article VI shall not be deemed
exclusive or any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any law, by-law, agreement, vote
of stockholders or disinterest directors or otherwise, both as to action in an
official capacity and as to action in an official capacity and as to action in
another capacity while holding such office.
(7) The Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of Section 145 of the General Corporation
Law.
(8) For purposes of this Article VI, references to "the Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers,
<PAGE> 61
5
employees or agents so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Article VI with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence has
continued.
(9) For purposes of this Article VI, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any exercise taxes assessed on a person with respect to an employed
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves service by, such director,
officer, employee or agent with respect to any employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith an in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article VI.
(10) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VI shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ARTICLE VII
BY-LAWS
The directors of the Corporation shall have the power to adopt,
amend or repeal by-laws.
ARTICLE VIII
REORGANIZATION
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for this Corporation under creditors or class of
creditors, and /or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value
<PAGE> 62
6
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made be binding on all creditors or class of creditors, and/or on all
the stockholders or class of stockholders, of this Corporation as the case may
be, and also on this Corporation.
ARTICLE IX
AMENDMENT
The Corporation reserves the right to amend, alter, change or repeal
any provision of the Certificate of incorporation, in the manner now or
hereafter prescribed by law, and all rights conferred on stockholders in this
Certificate of incorporation are subject to this reservation.
<PAGE> 63
7
IN WITNESS WHEREOF, Home Holding II Inc. has caused this certificate
to be signed by ______________, its ____________, and attest by _______________,
its ____________, this ____ day of ________, 1995.
HOME HOLDING II INC.
By:
--------------------------------------
Name:
Title:
ATTEST
-------------------------------
Name:
Title:
<PAGE> 64
EXHIBIT 2.07(b)
FORM OF AMENDED AND RESTATED BY-LAWS
OF
MATSUSHITA HOLDING CORP.
ARTICLE I
OFFICES
SECTION 1.01. Registered Office. The registered office of Matsushita
Holding Corp. (the "Corporation") in the State of Delaware shall be at the
principal office of The Corporation Trust Company in the City of Wilmington,
County of New Castle, and the registered agent in charge thereof shall be The
Corporation Trust Company.
SECTION 1.02. Other Offices. The Corporation may also have an office or
offices at any other place or places within or without the State of Delaware as
the Board of Directors of the Corporation (the "Board") may from time to time
determine or the business of the Corporation may from time to time require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. Annual Meetings. The annual meeting of stockholders of the
Corporation for the election of directors of the Corporation ("Directors"), and
for the transaction of such other business as may properly come before such
meeting, shall be held at such place, date and time as shall be fixed by the
Board and designated in the notice or waiver of notice of such annual meeting;
provided, however, that no annual meeting of stockholders need be held if all
actions, including the election of Directors, required by the General
Corporation Law of the State of Delaware (the "General Corporation Law") to be
taken at such annual meeting are taken by written consent in lieu of meeting
pursuant to Section 2.09 hereof.
SECTION 2.02. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called by the Board or the Chairman of the Board, the
President or the Secretary of the Corporation or by the recordholders of shares
of common stock of the Corporation issued and outstanding ("Shares")
constituting a majority of the Total Voting Power (as defined below) and
entitled to vote thereat, to be held at such place, date and time as shall be
designated in the notice or waiver of notice thereof.
<PAGE> 65
2
For purposes of these By-laws, "Total Voting Power" means the total
number of votes entitled to be cast by the holders of all the issued and
outstanding Shares.
SECTION 2.03. Notice of Meetings. (a) Except as otherwise provided by
law, written notice of each annual or special meeting of stockholders stating
the place, date and time of such meeting and, in the case of a special meeting,
the purpose or purposes for which such meeting is to be held, shall be given
personally or by first-class mail (airmail in the case of international
communications) to each recordholder of Shares (a "Stockholder") entitled to
vote thereat, not less than 10 nor more than 60 days before the date of such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the United States mail, postage prepaid, directed to the Stockholder at such
Stockholder's address as it appears on the records of the Corporation. If, prior
to the time of mailing, the Secretary of the Corporation (the "Secretary") shall
have received from any Stockholder a written request that notices intended for
such Stockholder are to be mailed to some address other than the address that
appears on the records of the Corporation, notices intended for such Stockholder
shall be mailed to the address designated in such request.
(b) Notice of a special meeting of Stockholders may be given by the
person or persons calling the meeting, or, upon the written request of such
person or persons, such notice shall be given by the Secretary on behalf of such
person or persons. If the person or persons calling a special meeting of
Stockholders give notice thereof, such person or persons shall deliver a copy of
such notice to the Secretary. Each request to the Secretary for the giving of
notice of a special meeting of Stockholders shall state the purpose or purposes
of such meeting.
SECTION 2.04. Waiver of Notice. Notice of any annual or special meeting
of Stockholders need not be given to any Stockholder who files a written waiver
of notice with the Secretary, signed by the person entitled to notice, whether
before or after such meeting. Neither the business to be transacted at, nor the
purpose of, any meeting of Stockholders need be specified in any written waiver
of notice thereof. Attendance of a Stockholder at a meeting, in person or by
proxy, shall constitute a waiver of notice of such meeting, except when such
Stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the grounds that
the notice of such meeting was inadequate or improperly given.
SECTION 2.05. Adjournments. Whenever a meeting of Stockholders, annual or
special, is adjourned to another date, time or place, notice need not be given
of the adjourned meeting if the date, time and place thereof are announced at
the meeting at which the adjournment is taken. If the adjournment is for more
than 30 days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
Stockholder entitled to vote thereat. At the adjourned meeting, any business may
be transacted which might have been transacted at the original meeting.
<PAGE> 66
3
SECTION 2.06. Quorum. Except as otherwise provided by law or the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation"), the recordholders of Shares constituting a majority of the
Total Voting Power entitled to vote thereat, present in person or by proxy,
shall constitute a quorum for the transaction of business at all meetings of
Stockholders, whether annual or special. If, however, such quorum shall not be
present in person or by proxy at any meeting of Stockholders, the Stockholders
entitled to vote thereat may adjourn the meeting from time to time in accordance
with Section 2.05 hereof until a quorum shall be present in person or by proxy.
SECTION 2.07. Voting. Each holder of Series A Common Stock shall be
entitled to ten votes for each Share held of record by such Stockholder. Each
holder of Series B Common Stock shall be entitled to one vote for each Share
held of record by such Stockholder. Except as otherwise provided by law or the
Certificate of Incorporation, when a quorum is present at any meeting of
Stockholders, the vote of the recordholders of a majority of the Voting Power
constituting such quorum shall decide any question brought before such meeting.
SECTION 2.08. Proxies. Each Stockholder entitled to vote at a meeting of
Stockholders or to express, in writing, consent to or dissent from any action of
Stockholders without a meeting may authorize another person or persons to act
for such Stockholder by proxy. Such proxy shall be filed with the Secretary
before such meeting of Stockholders or such action of Stockholders without a
meeting, at such time as the Board may require. No proxy shall be voted or acted
upon more than three years from its date, unless the proxy provides for a longer
period.
SECTION 2.09. Stockholders' Consent in Lieu of Meeting. Any action
required by the General Corporation Law to be taken at any annual or special
meeting of Stockholders, and any action which may be taken at any annual or
special meeting of Stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the recordholders of Shares having not less than the
minimum number of votes necessary to authorize or take such action at a meeting
at which the recordholders of all Shares entitled to vote thereon were present
and voted.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. General Powers. The business and affairs of the Corporation
shall be managed by the Board, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law, the
Certificate of Incorporation or these By-laws directed or required to be
exercised or done by Stockholders.
<PAGE> 67
4
SECTION 3.02. Number and Term of Office. The number of Directors shall be
such number as shall be fixed from time to time by the Board, but in no event
less than five. Directors need not be Stockholders. Directors shall be elected
at the annual meeting of Stockholders or, if, in accordance with Section 2.01
hereof, no such annual meeting is held, by written consent in lieu of meeting
pursuant to Section 2.09 hereof, and each Director shall hold office until his
successor is elected and qualified, or until his earlier death or resignation or
removal in the manner hereinafter provided.
SECTION 3.03. Resignation. Any Director may resign at any time by giving
written notice to the Board, the Chairman of the Board of the Corporation (the
"Chairman") or the Secretary. Such resignation shall take effect at the time
specified in such notice or, if the time be not specified, upon receipt thereof
by the Board, the Chairman or the Secretary, as the case may be. Unless
otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective.
SECTION 3.04. Removal. Any or all of the Directors may be removed, with
or without cause, at any time by vote of the recordholders of Shares
constituting a majority of the Total Voting Power then entitled to vote at an
election of Directors, or by written consent of the recordholders of Shares
pursuant to Section 2.09 hereof.
SECTION 3.05. Vacancies. Vacancies occurring on the Board as a result of
the removal of Directors without cause may be filled only by vote of the
recordholders of Shares constituting a majority of the Total Voting Power then
entitled to vote at an election of Directors, or by written consent of such
recordholders pursuant to Section 2.09 hereof. Vacancies occurring on the Board
for any other reason, including, without limitation, vacancies occurring as a
result of the creation of new directorships that increase the number of
Directors, may be filled by such vote or written consent or by vote of the Board
or by written consent of the Directors pursuant to Section 3.08 hereof. If the
number of Directors then in office is less than a quorum, such other vacancies
may be filled by vote of a majority of the Directors then in office or by
written consent of all such Directors pursuant to Section 3.08 hereof. Unless
earlier removed pursuant to Section 3.04 hereof, each Director chosen in
accordance with this Section 3.05 shall hold office until the next annual
election of Directors by the Stockholders and until his successor shall be
elected and qualified.
SECTION 3.06. Meetings. (a) Annual Meetings. As soon as practicable after
each annual election of Directors by the Stockholders, the Board shall meet for
the purpose of organization and the transaction of other business, unless it
shall have transacted all such business by written consent pursuant to Section
3.08 hereof.
(b) Other Meetings. Other meetings of the Board shall be held at such
times as the Chairman, the President of the Corporation (the "President"), the
Secretary or a majority of the Board shall from time to time determine.
(c) Notice of Meetings. The Secretary shall give written notice to
each
<PAGE> 68
5
Director of each meeting of the Board, which notice shall state the place, date,
time and purpose of such meeting. Notice of each such meeting shall be given to
each Director, if by mail, addressed to him at his residence or usual place of
business, at least two days before the day on which such meeting is to be held,
or shall be sent to him at such place by telecopy, telegraph, cable, or other
form of recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held. A written
waiver of notice, signed by the Director entitled to notice, whether before or
after the time of the meeting referred to in such waiver, shall be deemed
equivalent to notice. Neither the business to be transacted at, nor the purpose
of any meeting of the Board need be specified in any written waiver of notice
thereof. Attendance of a Director at a meeting of the Board shall constitute a
waiver of notice of such meeting, except as provided by law.
(d) Place of Meetings. The Board may hold its meetings at such
0place or places within or without the State of Delaware as the Board or the
Chairman may from time to time determine, or as shall be designated in the
respective notices or waivers of notice of such meetings.
(e) Quorum and Manner of Acting. A majority of the total
number of Directors then in office (but in no event less than two if the total
number of directorships, including vacancies, is greater than one and in no
event a number less than one-third of the total number of directorships,
including vacancies) shall be present in person at any meeting of the Board in
order to constitute a quorum for the transaction of business at such meeting,
and the vote of a majority of the total number of Directors then in office shall
be necessary for the passage of any resolution or act of the Board, except as
otherwise expressly required by law, the Certificate of Incorporation or these
By-laws. In the absence of a quorum for any such meeting, a majority of the
Directors present thereat may adjourn such meeting from time to time until a
quorum shall be present.
(f) Organization. At each meeting of the Board, one of the following
shall act as chairman of the meeting and preside, in the following order of
precedence:
(i) the Chairman;
(ii) the President;
(iii) any Director chosen by a majority of the Directors present.
The Secretary or, in the case of his absence, any person (who shall be an
Assistant Secretary, if an Assistant Secretary is present) whom the chairman of
the meeting shall appoint shall act as secretary of such meeting and keep the
minutes thereof.
SECTION 3.07. Committees of the Board. The Board may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more Directors. The Board may designate one or
more Directors as
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alternate members of any committee, who may replace any absent or disqualified
member at any meeting of such committee. In the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another Director to act at the meeting in the place of any
such absent or disqualified member. Any committee of the Board, to the extent
provided in the resolution of the Board designating such committee, shall have
and may exercise all the powers and authority of the Board in the management of
the business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; provided, however,
that no such committee shall have such power or authority in reference to
amending the Certificate of Incorporation (except that such a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board as provided in Section 151(a)
of the General Corporation Law, fix the designations and any of the preferences
or rights of such shares relating to dividends, redemption, dissolution, any
distribution of assets of the Corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes of stock of
the Corporation or fix the number of shares of any series of stock or authorize
the increase or decrease of the shares of any series), adopting an agreement of
merger or consolidation under Section 251 or 252 of the General Corporation Law,
recommending to the Stockholders the sale, lease or exchange of all or
substantially all the Corporation's property and assets, recommending to the
Stockholders a dissolution of the Corporation or the revocation of a
dissolution, or amending these By-laws; provided further, however, that, unless
expressly so provided in the resolution of the Board designating such committee,
no such committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock, or to adopt a certificate of ownership and
merger pursuant to Section 253 of the General Corporation Law. Each committee of
the Board shall keep regular minutes of its proceedings and report the same to
the Board when so requested by the Board.
SECTION 3.08. Directors' Consent in Lieu of Meeting. Any action required
or permitted to be taken at any meeting of the Board or of any committee thereof
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by all
the members of the Board or such committee and such consent is filed with the
minutes of the proceedings of the Board or such committee.
SECTION 3.09. Action by Means of Telephone or Similar Communications
Equipment. Any one or more members of the Board, or of any committee thereof,
may participate in a meeting of the Board or such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by such means shall constitute presence in person at such meeting.
SECTION 3.10. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board may determine the compensation of
Directors. In addition, as determined by the Board, Directors may be reimbursed
by the Corporation for their expenses, if any, in the performance of their
duties as Directors. No such compensation or
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reimbursement shall preclude any Director from serving the Corporation in any
other capacity and receiving compensation therefor.
ARTICLE IV
OFFICERS
SECTION 4.01. Officers. The officers of the Corporation shall be the
Chairman, the President, the Secretary and a Treasurer and may include one or
more Vice Presidents and one or more Assistant Secretaries and one or more
Assistant Treasurers. Any two or more offices may be held by the same person.
SECTION 4.02. Authority and Duties. All officers shall have such
authority and perform such duties in the management of the Corporation as may be
provided in these By-laws or, to the extent not so provided, by resolution of
the Board.
SECTION 4.03. Term of Office, Resignation and Removal. (a) Each officer
shall be appointed by the Board and shall hold office for such term as may be
determined by the Board. Each officer shall hold office until his successor has
been appointed and qualified or his earlier death or resignation or removal in
the manner hereinafter provided. The Board may require any officer to give
security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written notice to the
Board, the Chairman, the President or the Secretary. Such resignation shall take
effect at the time specified in such notice or, if the time be not specified,
upon receipt thereof by the Board, the Chairman, the President or the Secretary,
as the case may be. Unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective.
(c) All officers and agents appointed by the Board shall be subject to
removal, with or without cause, at any time by the Board or by the action of the
recordholders of a majority of the Shares entitled to vote thereon.
SECTION 4.04. Vacancies. Any vacancy occurring in any office of the
Corporation, for any reason, shall be filled by action of the Board. Unless
earlier removed pursuant to Section 4.03 hereof, any officer appointed by the
Board to fill any such vacancy shall serve only until such time as the unexpired
term of his predecessor expires unless reappointed by the Board.
SECTION 4.05. The Chairman. The Chairman shall have the power to call
special meetings of Stockholders, to call special meetings of the Board and, if
present, to preside at all meetings of Stockholders and all meetings of the
Board. The Chairman shall perform all duties incident to the office of Chairman
of the Board and all such other duties as may from time to time be assigned to
him by the Board or these By-laws.
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SECTION 4.06. The President. The President shall be the chief executive
officer of the Corporation and shall have general and active management and
control of the business and affairs of the Corporation, subject to the control
of the Board, and shall see that all orders and resolutions of the Board are
carried into effect. The President shall perform all duties incident to the
office of President and all such other duties as may from time to time be
assigned to him by the Board or these By-laws.
SECTION 4.07. Vice Presidents. Vice Presidents, if any, in order of their
seniority or in any other order determined by the Board, shall generally assist
the President and perform such other duties as the Board or the President shall
prescribe, and in the absence or disability of the President, shall perform the
duties and exercise the powers of the President.
SECTION 4.08. The Secretary. The Secretary shall, to the extent
practicable, attend all meetings of the Board and all meetings of Stockholders
and shall record all votes and the minutes of all proceedings in a book to be
kept for that purpose, and shall perform the same duties for any committee of
the Board when so requested by such committee. He shall give or cause to be
given notice of all meetings of Stockholders and of the Board, shall perform
such other duties as may be prescribed by the Board, the Chairman or the
President and shall act under the supervision of the Chairman. He shall keep in
safe custody the seal of the Corporation and affix the same to any instrument
that requires that the seal be affixed to it and which shall have been duly
authorized for signature in the name of the Corporation and, when so affixed,
the seal shall be attested by his signature or by the signature of the Treasurer
of the Corporation (the "Treasurer") or an Assistant Secretary or Assistant
Treasurer of the Corporation. He shall keep in safe custody the certificate
books and stockholder records and such other books and records of the
Corporation as the Board, the Chairman or the President may direct and shall
perform all other duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Board, the Chairman or
the President.
SECTION 4.09. Assistant Secretaries. Assistant Secretaries of the
Corporation ("Assistant Secretaries"), if any, in order of their seniority or in
any other order determined by the Board, shall generally assist the Secretary
and perform such other duties as the Board or the Secretary shall prescribe,
and, in the absence or disability of the Secretary, shall perform the duties and
exercise the powers of the Secretary.
SECTION 4.10. The Treasurer. The Treasurer shall have the care and
custody of all the funds of the Corporation and shall deposit such funds in such
banks or other depositories as the Board, or any officer or officers, or any
officer and agent jointly, duly authorized by the Board, shall, from time to
time, direct or approve. He shall disburse the funds of the Corporation under
the direction of the Board and the President. He shall keep a full and accurate
account of all moneys received and paid on account of the Corporation and shall
render a statement of his accounts whenever the Board, the Chairman or the
President shall so request. He shall perform all other necessary actions and
duties in connection with the
<PAGE> 72
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administration of the financial affairs of the Corporation and shall generally
perform all the duties usually appertaining to the office of treasurer of a
corporation. When required by the Board, he shall give bonds for the faithful
discharge of his duties in such sums and with such sureties as the Board shall
approve.
SECTION 4.11. Assistant Treasurers. Assistant Treasurers of the
Corporation ("Assistant Treasurers"), if any, in order of their seniority or in
any other order determined by the Board, shall generally assist the Treasurer
and perform such other duties as the Board or the Treasurer shall prescribe,
and, in the absence or disability of the Treasurer, shall perform the duties and
exercise the powers of the Treasurer.
ARTICLE V
CHECKS, DRAFTS, NOTES, AND PROXIES
SECTION 5.01. Checks, Drafts and Notes. All checks, drafts and other
orders for the payment of money, notes and other evidences of indebtedness
issued in the name of the Corporation shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as shall be
determined, from time to time, by resolution of the Board.
SECTION 5.02. Execution of Proxies. The Chairman or the President, or, in
the absence or disability of both of them, any Vice President, may authorize,
from time to time, the execution and issuance of proxies to vote shares of stock
or other securities of other corporations held of record by the Corporation and
the execution of consents to action taken or to be taken by any such
corporation. All such proxies and consents, unless otherwise authorized by the
Board, shall be signed in the name of the Corporation by the Chairman, the
President or any Vice President.
ARTICLE VI
SHARES AND TRANSFERS OF SHARES
SECTION 6.01. Certificates Evidencing Shares. Shares shall be evidenced
by certificates in such form or forms as shall be approved by the Board.
Certificates shall be issued in consecutive order and shall be numbered in the
order of their issue, and shall be signed by the Chairman, the President or any
Vice President and by the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer. If such a certificate is manually signed by one such
officer, any other signature on the certificate may be a facsimile. In the event
any such officer who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to hold such office or to be employed by
the Corporation before such certificate is issued, such certificate may be
issued by the Corporation with the same effect as if such officer had held such
office on the date of issue.
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SECTION 6.02. Stock Ledger. A stock ledger in one or more counterparts
shall be kept by the Secretary, in which shall be recorded the name and address
of each person, firm or corporation owning the Shares evidenced by each
certificate evidencing Shares issued by the Corporation, the number of Shares
evidenced by each such certificate, the date of issuance thereof and, in the
case of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name Shares stand on the stock ledger of
the Corporation shall be deemed the owner and recordholder thereof for all
purposes.
SECTION 6.03. Transfers of Shares. Registration of transfers of Shares
shall be made only in the stock ledger of the Corporation upon request of the
registered holder of such shares, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary, and upon the
surrender of the certificate or certificates evidencing such Shares properly
endorsed or accompanied by a stock power duly executed, together with such proof
of the authenticity of signatures as the Corporation may reasonably require.
SECTION 6.04. Addresses of Stockholders. Each Stockholder shall designate
to the Secretary an address at which notices of meetings and all other corporate
notices may be served or mailed to such Stockholder, and, if any Stockholder
shall fail to so designate such an address, corporate notices may be served upon
such Stockholder by mail directed to the mailing address, if any, as the same
appears in the stock ledger of the Corporation or at the last known mailing
address of such Stockholder.
SECTION 6.05. Lost, Destroyed and Mutilated Certificates. Each
recordholder of Shares shall promptly notify the Corporation of any loss,
destruction or mutilation of any certificate or certificates evidencing any
Share or Shares of which he is the recordholder. The Board may, in its
discretion, cause the Corporation to issue a new certificate in place of any
certificate theretofore issued by it and alleged to have been mutilated, lost,
stolen or destroyed, upon the surrender of the mutilated certificate or, in the
case of loss, theft or destruction of the certificate, upon satisfactory proof
of such loss, theft or destruction, and the Board may, in its discretion,
require the recordholder of the Shares evidenced by the lost, stolen or
destroyed certificate or his legal representative to give the Corporation a bond
sufficient to indemnify the Corporation against any claim made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
SECTION 6.06. Regulations. The Board may make such other rules and
regulations as it may deem expedient, not inconsistent with these By-laws,
concerning the issue, transfer and registration of certificates evidencing
Shares.
SECTION 6.07. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the Stockholders entitled to notice of
or to vote at any meeting of Stockholders or any adjournment thereof, or to
express consent to, or to dissent from, corporate action in writing without a
meeting, or entitled to receive payment of any
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dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board may fix, in advance, a
record date, which shall not be more than 60 nor less than 10 days before the
date of such meeting, nor more than 60 days prior to any other such action. A
determination of the Stockholders entitled to notice of or to vote at a meeting
of Stockholders shall apply to any adjournment of such meeting; provided,
however, that the Board may fix a new record date for the adjourned meeting.
ARTICLE VII
SEAL
SECTION 7.01. Seal. The Board may approve and adopt a corporate seal,
which shall be in the form of a circle and shall bear the full name of the
Corporation, the year of its incorporation and the words "Corporate Seal
Delaware".
ARTICLE VIII
FISCAL YEAR
SECTION 8.01. Fiscal Year. The fiscal year of the Corporation shall end
on the thirty-first day of December of each year unless changed by resolution of
the Board.
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ARTICLE IX
INDEMNIFICATION AND INSURANCE
SECTION 9.01. Indemnification. (a) The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 9.01(a) and (b) of these
By-laws, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
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(d) Any indemnification under Section 9.01(a) and (b) of these By-laws
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 9.01(a) and (b) of these
By-laws. Such determination shall be made (i) by a majority vote of the
directors who were not parties to such action, suit or proceeding, even though
less than a quorum, or (ii) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (iii) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation pursuant to this Article IX. Such expenses (including attorneys'
fees) incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, other Sections of this Article IX shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any law, by-law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office.
(g) For purposes of this Article IX, references to "the Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article IX with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(h) For purposes of this Article IX, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves service by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of
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the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Article IX.
(i) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article IX shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 9.02. Insurance for Indemnification. The Corporation may purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of Section
145 of the General Corporation Law.
ARTICLE X
AMENDMENTS
SECTION 10.01. Amendments. Any By-law (including these By-laws) may be
adopted, amended or repealed by the vote of the recordholders of Shares
constituting a majority of the Total Voting Power then entitled to vote at an
election of Directors or by written consent of Stockholders pursuant to Section
2.09 hereof, or by vote of the Board or by a written consent of Directors
pursuant to Section 3.08 hereof.
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EXHIBIT 5.10(b)(i)
FORM OF TERMINATION AGREEMENT
TERMINATION AGREEMENT, dated as of ____ __, 1995 (this "Agreement"),
between MCA INC., a Delaware corporation ("MCA"), and MCA FUNDING CORP., a
Delaware corporation ("Funding").
W I T N E S S E T H
WHEREAS, Matsushita Electrical Industrial Co., Ltd., Home Holding Inc.,
now known as MEI Holding Inc., Home Holding II Inc., now known as MCA Holding I
Corp. (the "Company"), and The Seagram Company Ltd. ("Seagram") have entered
into an Amended and Restated Stock Purchase Agreement, dated as of April 9, 1995
(the "Purchase Agreement"), pursuant to which Seagram Developments, Inc., as
assignee of Seagram, will acquire eighty percent of the common stock, par value
$0.01 per share, of the Company;
WHEREAS, it is contemplated under Section 5.10(c) of the Purchase
Agreement that (i) the Support Agreement dated February 27, 1991 (the "Support
Agreement") between MCA and Funding shall be terminated as of the date hereof
and (ii) the Demand Credit Agreement dated as of February 5, 1994 (the "Credit
Agreement") between MCA and Funding shall be terminated as of the date hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto hereby agree as follows:
1. Termination of Support Agreement. MCA and Funding hereby
terminate, without any cost or expense on the part of either party thereto, the
Support Agreement.
2. Termination of the Credit Agreement. MCA and Funding hereby
terminate, without any cost or expense on the part of either party thereto, the
Credit Agreement, subject to the payment in full by MCA of all amounts due to
Funding thereunder.
3. Release. Funding hereby releases MCA from any and all obligations
and liabilities under the Support Agreement and, subject to the payment in full
by MCA of all amounts due to Funding under the Credit Agreement, the Credit
Agreement.
4. Further Action. MCA and Funding each agree to execute and deliver
such documents and other papers and to take such further actions as may be
reasonably necessary or advisable to carry out and give effect to the provisions
of this Agreement.
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5. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
executed and to be performed entirely within that state.
6. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
MCA INC.
By
--------------------------
Name:
Title:
MCA FUNDING CORP.
By
--------------------------
Name:
Title:
<PAGE> 80
EXHIBIT 5.10(b)(ii)
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT dated as of June 5, 1995 made between MATSUSHITA
ELECTRIC CORPORATION OF AMERICA, a Delaware corporation (the "Indemnitor"), and
THE SEAGRAM COMPANY LTD., a corporation organized under the laws of Canada
("Seagram").
W I T N E S S E T H :
WHEREAS, pursuant to the Amended and Restated Stock Purchase Agreement
(the "Stock Purchase Agreement") dated as of April 9, 1995 among Matsushita
Electric Industrial Co., Ltd. (the "Parent"), Home Holding Inc., now known as
MEI Holding Inc., Home Holding II Inc., now known as MCA Holding I Corp. (the
"Company"), and Seagram, Seagram or its assignee will acquire eighty percent of
the common stock of the Company and as set forth therein the Indemnitor shall
acquire 100% of the issued and outstanding shares of common stock, par value
$10,000 per share (the "Shares"), of MCA Funding Corp., a Delaware corporation
("Funding"); capitalized terms used herein and not otherwise defined are used
herein as defined in the Stock Purchase Agreement;
WHEREAS, pursuant to the Termination Agreement dated as of the date
hereof between MCA INC. ("MCA") and Funding (the "Termination Agreement"), MCA
and Funding have terminated the Support Agreement dated as of February 27, 1991
between MCA and Funding (the "Support Agreement");
WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Stock Purchase Agreement that the Indemnitor shall have
entered into this Indemnity Agreement; and
WHEREAS, the Indemnitor will derive substantial direct and indirect
benefits from the transactions contemplated by the Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the premises, the Indemnitor hereby
agrees as follows:
1. Indemnity. The Indemnitor agrees to indemnify and hold harmless
Seagram and each of its Affiliates (including, without limitation, MCA) and each
of their respective officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all liabilities, losses,
damages, claims, costs and expenses, interest, awards, judgments and penalties
(including, without limitation, attorneys' and reasonable consultants' fees and
expenses) actually suffered or incurred by any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Support Agreement, (ii)
the termination of the Support Agreement pursuant to the Termination Agreement,
(iii) the Support Agreement dated as of February 27, 1991 between the Parent and
Funding, as amended, or (iv) any of the transactions contemplated thereby or the
Approved Debt (as defined in the Support Agreement), in each case whether or not
such
1
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investigation, litigation or proceeding is brought by the Indemnitor or any of
its Affiliates or their directors, shareholders or creditors or an Indemnified
Party or any Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereby and thereby are consummated ("Losses"). To
the extent that the Indemnitor's undertakings set forth in this paragraph 1 may
be unenforceable, the Indemnitor shall contribute the maximum amount that it is
permitted to contribute under applicable law to the payment and satisfaction of
all Losses incurred by the Indemnified Parties.
2. Payments. (a) The Indemnitor shall make any payment required to be
made pursuant to paragraph 1 hereof to any Indemnified Party promptly (but in no
event later than the fifth business day) following demand (subject, however, to
the provisions of subparagraph (b) below), irrespective of any right of
counterclaim or set-off, in U.S. dollars in same day funds, to an account
specified in writing by such Indemnified Party.
(b) Any Indemnified Party seeking indemnification under this Indemnity
Agreement shall give notice of any matter which such Indemnified Party has
determined has given or could give rise to a right of indemnification under this
Indemnity Agreement, within 60 days of such determination, stating the amount of
the Loss, if known, and method of computation thereof. The obligations and
Liabilities of the Indemnitor under this Indemnity Agreement with respect to
Losses arising from claims of any which are subject to the
indemnification provided for in this Indemnity Agreement ("Third Party Claim")
shall be governed by and contingent upon the following additional terms and
conditions: if an Indemnified Party shall receive notice of any Third Party
Claim, the Indemnified Party shall give the Indemnitor notice of such Third
Party Claim within 30 days of the receipt by the Indemnified Party of such
notice; provided, however, that the failure to provide such notice shall not
release the Indemnitor from any of its obligations under this Indemnity
Agreement except to the extent the Indemnitor is materially prejudiced by such
failure and shall not relieve the Indemnitor from any other obligation or
Liability that it may have to any Indemnified Party otherwise than under this
Indemnity Agreement. If the Indemnitor acknowledges in writing its obligation to
indemnify the Indemnified Party hereunder against any Losses that may result
from such Third Party Claim, then the Indemnitor shall be entitled to assume and
control the defense of such Third Party Claim at its expense and through counsel
of its choice if it gives notice of its intention to do so to the Indemnified
Party within ten Business Days of the receipt of such notice from the
Indemnified Party; provided, however, that if there exists or is reasonably
likely to exist a conflict of interest that would make it inappropriate in the
judgment of the Indemnified Party for the same counsel to represent both the
Indemnified Party and the Indemnitor, then the Indemnified Party shall be
entitled to retain its own counsel, in each jurisdiction for which the
Indemnified Party determines counsel is required, at the expense of the
Indemnitor. In the event the Indemnitor exercises the right to undertake any
such defense against any such Third Party Claim as provided above, the
Indemnified Party shall cooperate with the Indemnitor in such defense and make
available to the Indemnitor, at the Indemnitor's expense, all witnesses,
pertinent records, materials and information in the Indemnified Party's
possession or under the Indemnified Party's control relating thereto as is
reasonably requested by the Indemnitor. Similarly, in the event the Indemnified
Party is, directly or indirectly, conducting the defense against any such Third
Party Claim, the Indemnitor shall cooperate with the Indemnified Party in such
defense and make available to the Indemnified Party, at the Indemnitor's
expense, all such witnesses, records, materials and information in the
Indemnitor's possession or under the Indemnitor's control
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relating thereto as is reasonably required by the Indemnified Party. The
Indemnifying Party shall not, without the written consent of the Indemnified
Party, (i) settle or compromise any Third Party Claim or consent to the entry of
any judgment which does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to the Indemnified Party of a written
release from all liability in respect of such Third Party Claim or (ii) settle
or compromise any Third Party Claim in any manner that may adversely affect the
Indemnified Party other than as a result of money damages or other money
payments (so long as the Indemnifying Party has acknowledged in writing its
obligation to indemnify). Similarly, no Third Party Claim which is being
defended in good faith by the Indemnitor in accordance with the terms of this
Indemnity Agreement shall be settled by the Indemnified Party without the
written consent of the Indemnitor.
3. Amendments, Etc. No amendment or waiver of any provision of this
Indemnity Agreement and no consent to any departure by the Indemnitor or any
Indemnified Party therefrom shall in any event be effective unless the same
shall be in writing and signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
4. Binding Effect; No Third Party Beneficiaries. This Indemnity Agreement
shall be binding upon the parties hereto and their respective successors and
assigns; provided that the Indemnitor shall have no right to assign any rights,
obligations or liabilities hereunder without the express written consent of
Seagram. This Indemnity Agreement is for the sole benefit of Seagram and the
other Indemnified Parties and the Indemnitor and their respective successors and
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Indemnity Agreement.
5. No Waiver; Remedies. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
6. Notices, Etc. All notices, requests, claims, demands and other
communications provided for hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by telecopy or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Paragraph 6):
(a) if to the Indemnitor:
Matsushita Electric Corporation of America
One Panasonic Way
Secaucus, New Jersey 07094
Telecopy: (201) 348-7619
Attention: Robert S. Marin, Esq.
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Vice President and General Counsel
with a copy to :
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Telecopy: (212) 455-2502
Attention: John G. Finley, Esq.
(b) if to Seagram or to any other Indemnified Party:
The Seagram Company Limited
1430 Peel Street
Montreal, Quebec H3A 159
Canada
Telecopy: (514) 987-5232
Attention: Vice President, Legal and Environmental Affairs
with copies to:
Joseph E. Seagram & Sons, Inc.
375 Park Avenue
New York, New York 10152
Telecopy: (212) 572-1398
Attention: Vice President - Legal Affairs, General Counsel
and
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telecopy: (212) 848-7179
Attention: Peter D. Lyons, Esq.
7. Governing Law. This Indemnity Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, applicable to
contracts executed in and to be performed entirely within that State.
8. Jurisdiction. All actions and proceedings arising out of or relating
to this Indemnity Agreement shall be heard and determined in any New York state
or federal court sitting in the City of New York, each party hereto hereby
irrevocably submits to the exclusive jurisdiction of such courts in any such
action or proceeding and irrevocably waive the defense of an inconvenient forum
to the maintenance of any such action or proceeding. The consent to jurisdiction
set forth in this Paragraph 8 shall not constitute a general consent to service
of process in the State of New York and shall have no effect for any purpose
except as provided in this Paragraph 8 and shall not be deemed to confer rights
on any person other than the parties hereto and the Indemnified Parties.
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9. Survival. This Indemnity Agreement shall survive until six months
after the payment in full of the Approved Debt; provided, however, that if
written notice of a claim has been given prior to such time, then this Indemnity
Agreement shall survive as to such claim until such claim has been finally
resolved.
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IN WITNESS WHEREOF, the parties hereto have caused this Indemnity
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
MATSUSHITA ELECTRIC CORPORATION OF AMERICA
By:
Name:
Title:
THE SEAGRAM COMPANY LTD.
By:
-----------------
Name:
Title
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EXHIBIT 5.10(b)(iii)
AMENDED AND RESTATED SUPPORT AGREEMENT
AMENDED AND RESTATED SUPPORT AGREEMENT dated as of February 27, 1991, by
and between MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., a Japanese corporation
("MEI"), and MCA FUNDING CORP., a Delaware corporation ("MFC"), as amended and
restated as of June __, 1995 (this "Agreement").
WITNESSETH:
WHEREAS, MEI owns all of the issued and outstanding common stock of
Matsushita Electric Corporation of America, a Delaware corporation ("MECA");
WHEREAS, in accordance with Section 5.10 of the Stock Purchase Agreement,
dated as of April 9, 1995, among MEI, Home Holding I Inc., now known as MEI
Holding Inc., Home Holding II Inc., now known as MCA Holding I Corp. and The
Seagram Company Ltd. (the "Stock Purchase Agreement"), MECA will purchase all of
the oustanding shares of common stock par value $10,000 per share, of MFC;
WHEREAS, as of the date hereof, MFC has incurred approximately $3.1
billion of indebtedness for borrowed money under its commercial paper and
medium-term note programs ("Debt");
WHEREAS, MEI desires to continue to provide assurance with respect to the
stock ownership and financial condition of MFC to the holders from time to time
of such of MFC's Debt which has been specifically approved in kind and amount by
MEI in writing to be subject to this Agreement ("Approved Debt");
NOW, THEREFORE, in consideration of the mutual premises herein contained,
the parties hereto agree as follows:
1. Stock Ownership of MECA.
At all time that the Approved Debt is outstanding, MEI shall own and hold
directly or indirectly through one or more wholly-owned subsidiaries, the entire
legal title to and beneficial interest in all the outstanding shares of stock of
MFC hvaing the right to vote for the electino of members of the Board of
Directors of MFC, and shall not pledge directly or indirectly or in any way
encumber or otherwise dispose of any such shares of stock of MFC or permit any
other subsidiary to do so.
2. Maintenance of Tangible Net Worth.
At all times that the Approved Debt is outstanding, MEI agrees that it
(i) shall cause MFC to have a consolidated net worth (as determined in
accordance with United Statess generally accepted accounting principles) of at
least $1 and (ii) shall cause MFC to have
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sufficient liquidity to ensure timely payment by MFC of any Debt in accordance
with its terms, or, if necessary, shall make available to or arrange for MFC to
have sufficient funds to enable MFC to pay any amounts payable in respect of
such Debt as and when due.
3. Waiver
MEI hereby waives any failure or delay on the part of MFC in asserting or
enforcing any of its rights or in making any claims or demands hereunder.
4.
2
