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EXHIBIT 10.18
EXECUTION COPY
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PLACEMENT AGREEMENT
$200,000,000
REGAL CINEMAS, INC.
8 7/8% SENIOR SUBORDINATED DEBENTURES DUE 2010
December 9, 1998
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December 9, 1998
Morgan Stanley & Co. Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Ladies and Gentlemen:
Regal Cinemas, Inc., a Tennessee corporation (the "COMPANY"),
proposes to issue and sell to Morgan Stanley & Co. Incorporated and Donaldson,
Lufkin & Jenrette Securities Corporation (the "PLACEMENT AGENTS") $200,000,000
million principal amount of its 8 7/8% Senior Subordinated Debentures due 2010
(the "SECURITIES") to be issued pursuant to the provisions of an Indenture dated
as of December 16, 1998 (the "INDENTURE") between the Company and IBJ Schroder
Bank & Trust Company, as Trustee (the "TRUSTEE"). Capitalized terms used herein
not otherwise defined herein shall have the meanings given such terms in the
Final Memorandum (as defined below).
The Securities will be offered without being registered under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), to "qualified
institutional buyers" in compliance with the exemption from registration
provided by Rule 144A under the Securities Act ("QIBS"), in offshore
transactions in reliance on Regulation S under the Securities Act ("REGULATION
S") and to institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) ("INSTITUTIONAL ACCREDITED INVESTORS")
that deliver a letter in the form of Annex A to the Final Memorandum.
The Placement Agents and their direct and indirect transferees
will be entitled to the benefits of a Registration Rights Agreement dated the
Closing Date between the Company and the Placement Agents (the "REGISTRATION
RIGHTS AGREEMENT").
In connection with the sale of the Securities, the Company has
prepared an offering memorandum (the "FINAL MEMORANDUM") including a description
of the terms of the Securities, the terms of the Offering and a description of
the Company.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you that:
(a) The Final Memorandum in the form provided by the Company
to the Placement Agents to confirm sales and on the Closing Date (as
defined in Section 4), will not contain any untrue statement of a
material fact or omit to state a material fact
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necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph do not
apply to statements or omissions in such Final Memorandum based upon
information relating to any Placement Agent furnished to the Company in
writing by such Placement Agent through you expressly for use therein.
(b) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Final Memorandum and is duly qualified to transact business and
is in good standing as a foreign corporation in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(c) Each Restricted Subsidiary of the Company, including,
without limitation, Act III Cinemas, Inc., a Delaware corporation ("Act
III"), has been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Final
Memorandum and is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole; all of the
issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims other than those described
in the Final Memorandum.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Placement Agents in
accordance with the terms of this Agreement, will be valid and binding
obligations of the Company, enforceable in accordance with their terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity and
insofar as the same contains any waiver of usury laws as to
enforceability, and will be entitled to the benefits of the Indenture
and the Registration Rights Agreement.
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(f) The Indenture has been duly authorized by the Company, and
when executed and delivered by the Company will be a valid and binding
agreement of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity and
insofar as the same contains any waiver of usury laws as to
enforceability.
(g) The Registration Rights Agreement has been duly authorized
by the Company, and when executed and delivered by the Company will be
a valid and binding agreement of the Company, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and general principles of
equity and except as rights to indemnification and contribution under
the Registration Rights Agreement may be limited under applicable law.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Registration Rights Agreement and the Securities
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Indenture, the
Registration Rights Agreement or the Securities, except those already
obtained and such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the
Securities and by federal and state securities laws with respect to the
Company's obligations under the Registration Rights Agreement.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Final Memorandum.
(j) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its subsidiaries, taken as a whole, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Final Memorandum or such as do not materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries which are material to the business
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of the Company and its subsidiaries, taken as a whole, are held by them
under valid and subsisting leases with such exceptions as are not
material to the business of the Company and its subsidiaries, taken as
a whole, and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries, in
each case except as described in the Final Memorandum.
(k) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject other than proceedings
accurately described in all material respects in the Final Memorandum
and proceedings that would not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, or on the power or ability of the Company to perform its
obligations under this Agreement, the Indenture, the Registration
Rights Agreement or the Securities.
(l) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not reasonably be expected, singly or in
the aggregate, to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would reasonably be expected,
singly or in the aggregate, to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(o) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Memorandum, will not be an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
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(p) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "AFFILIATE") of the
Company has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be
integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(ii) engaged in any form of general solicitation or general advertising
in connection with the offering of the Securities (as those terms are
used in Regulation D under the Securities Act), or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(q) None of the Company, its Affiliates or any person acting
on its or their behalf has engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to
the Securities and the Company and its Affiliates and any person acting
on its or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S, except no representation,
warranty or agreement is made by the Company in this paragraph with
respect to the Placement Agents.
(r) Assuming the truth of representations and warranties of
the Placement Agents in this Agreement, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Placement Agents in the manner contemplated by this Agreement to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended.
(s) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(t) The Securities conform in all material respects to the
description thereof contained in the Final Memorandum under the heading
"Description of the Debentures."
(u) (i) The merger of an affiliate of Kohlberg Kravis Roberts
& Co. L.P. and an affiliate of Hicks, Muse, Tate & Furst Incorporated
with and into the Company, with the Company continuing as the surviving
corporation, was consummated pursuant to an Agreement and Plan of
Merger dated May 27, 1998, as amended (the "Regal Merger"), (ii) the
merger of a wholly owned subsidiary of the Company with and into Act
III, with Act III surviving as a wholly owned subsidiary of the
Company, was consummated pursuant to an Agreement and Plan of Merger
dated August 26, 1998 (the "Act III Merger", and together with the
Regal Merger, the "Transactions") and (iii) all required consents,
waivers and agreements in connection with the Transactions,
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including any such consents, waivers and agreements from suppliers and
lessors of Act III, have been obtained, except where the failure to
obtain such consents, waivers or agreements would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(v) The statements in the Final Memorandum will not differ in
any material respect from the statements contained in the Offering
Memorandum dated November 4, 1998 for the 9 1/2% Senior Subordinated
Notes due 2008, except for financial statements for the quarter ended
October 1, 1998 included in the Company's quarterly report on Form 10-Q
filed November 16, 1998 and matters described by the Company to the
Placement Agents prior to the date hereof.
2. Agreements to Sell and Purchase. The Company hereby agrees
to sell to the several Placement Agents, and each Placement Agent, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of Securities set forth in
Schedule I hereto opposite its name at a purchase price of 97.625% of the
principal amount thereof (the "PURCHASE PRICE") plus accrued interest, if any,
to the Closing Date.
The Company hereby agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Placement Agents,
it will not, during the period beginning on the date hereof and continuing to
and including the Closing Date, offer, sell, contract to sell or otherwise
dispose of any debt of the Company or warrants to purchase debt of the Company
substantially similar to the Securities (other than the sale of the Securities
under this Agreement).
3. Terms of Offering. You have advised the Company that the
Placement Agents will make an offering of the Securities purchased by the
Placement Agents hereunder on the terms to be set forth in the Final Memorandum,
as soon as practicable after this Agreement is entered into as in your judgment
is advisable.
4. Payment and Delivery. Payment for the Securities shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Securities for the respective accounts of the
several Placement Agents at 10:00 a.m., New York City time, on December 16,
1998, or at such other time on the same or such other date, not later than
December 23, 1998, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "CLOSING DATE."
Certificates for the Securities shall be in definitive form or
global form, as specified by you, and registered in such names and in such
denominations as you shall request
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in writing not later than one full business day prior to the Closing Date. The
certificates evidencing the Securities shall be delivered to you on the Closing
Date for the respective accounts of the several Placement Agents, with any
transfer taxes payable in connection with the transfer of the Securities to the
Placement Agents duly paid, against payment of the Purchase Price therefor plus
accrued interest, if any, to the Closing Date.
5. Conditions to the Placement Agents' Obligations. The
several obligations of the Placement Agents to purchase and pay for the
Securities on the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded for the Company's 9 1/2% Senior
Subordinated Notes due 2008 issued on May 27, 1998, the
Company's 9 1/2% Senior Subordinated Notes due 2008 issued on
November 10, 1998 or any of the Company's other securities by
any "nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Final Memorandum (exclusive
of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your judgment, is material
and adverse and that makes it, in your judgment, impracticable
to market the Securities on the terms and in the manner
contemplated in the Final Memorandum.
(b) The Placement Agents shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 5(a)(i) and
to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and the Company has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
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The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Placement Agents shall have received on the Closing
Date an opinion of Bass Berry & Sims PLC, local counsel for the
Company, dated the Closing Date, to the effect set forth in Exhibit A.
Such opinion shall be rendered to the Placement Agents at the request
of the Company and shall so state therein.
(d) The Placement Agents shall have received on the Closing
Date an opinion of Weil, Gotshal & Manges LLP, outside counsel for the
Company, dated the Closing Date, to the effect set forth in Exhibit B.
Such opinion shall be rendered to the Placement Agents at the request
of the Company and shall so state therein.
(e) The Placement Agents shall have received on the Closing
Date an opinion of Shearman & Sterling, counsel for the Placement
Agents, dated the Closing Date, in form and substance satisfactory to
you.
(f) The Placement Agents shall have received on the Closing
Date a letter, dated the Closing Date, in form and substance
satisfactory to the Placement Agents, from PricewaterhouseCoopers LLP,
independent public accountants for the Company, containing statements
and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Final
Memorandum for each of the three years in the period ended January 1,
1998 and the six month period ended July 2, 1998; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(g) The Placement Agents shall have received on the Closing
Date a letter, dated the Closing Date, in form and substance
satisfactory to the Placement Agents, from Deloitte & Touche LLP,
independent public accountants for the Company, containing statements
and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Final
Memorandum for the three month period ended October 1, 1998; provided
that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(h) The Placement Agents shall have received on the Closing
Date a letter, dated the Closing Date, in form and substance
satisfactory to the Placement Agents, from PricewaterhouseCoopers LLP,
independent public accountants for Act III, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain
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financial information contained in the Final Memorandum for the year
ended December 31, 1996; provided that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date
hereof.
(i) The Placement Agents shall have received on the Closing
Date a letter, dated the Closing Date, in form and substance
satisfactory to the Placement Agents, from Deloitte & Touche LLP,
independent public accountants for Act III, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Final Memorandum for
each of the years in the two year period ended December 31, 1998, for
the six month period ended June 30, 1998, and for the period from July
1, 1998 through August 26, 1998; provided that the letter delivered on
the Closing Date shall use a "cut-off date" not earlier than the date
hereof.
(j) The Indenture and the Registration Rights Agreement shall
have been executed by the parties thereto and shall be in full force
and effect on the Closing Date.
(k) The Placement Agents shall have received such other
documents and certificates as are reasonably requested by you or your
counsel.
6. Covenants of the Company. In further consideration of the
agreements of the Placement Agents contained in this Agreement, the Company
covenants with each Placement Agent as follows:
(a) To furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding
the date of this Agreement and during the period mentioned in Section
6(c), as many copies of the Final Memorandum and any supplements and
amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Final Memorandum, to
furnish to you a copy of each such proposed amendment or supplement and
not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior to
the date on which all of the Securities shall have been sold by the
Placement Agents, any event shall occur or condition shall exist as a
result of which it is necessary to amend or supplement the Final
Memorandum in order to make the statements therein, in the light of the
circumstances when the Final Memorandum is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Placement
Agents, it is necessary to amend or supplement the Final Memorandum to
comply with applicable law, forthwith
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to prepare and furnish, at the Company's own expense, to the Placement
Agents, either amendments or supplements to the Final Memorandum so
that the statements in the Final Memorandum as so amended or
supplemented will not, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, be misleading or so that the
Final Memorandum, as amended or supplemented, will comply with
applicable law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) Whether or not any sale of the Securities is consummated
or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
issuance and sale of the Securities and all other fees or expenses in
connection with the preparation of the Final Memorandum and all
amendments and supplements thereto, including all printing costs
associated therewith, and the delivering of copies thereof to the
Placement Agents, in the quantities herein above specified, (ii) all
costs and expenses related to the transfer and delivery of the
Securities to the Placement Agents, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or legal investment memorandum in connection with the offer and
sale of the Securities under state securities laws and all expenses in
connection with the qualification of the Securities for offer and sale
under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Placement Agents in connection with such qualification
and in connection with the Blue Sky or legal investment memorandum,
(iv) any fees charged by rating agencies for the rating of the
Securities, (v) all document production charges and expenses of counsel
for the Placement Agents (but not including their fees for professional
services) in connection with the preparation of this Agreement, (vi)
the fees and expenses, if any, incurred in connection with the
admission of the Securities for trading in PORTAL or any appropriate
market system, (vii) the costs and charges of the Trustee and any
transfer agent, registrar or depositary, (viii) the cost of the
preparation, issuance and delivery of the Securities, and (ix) all
other costs and expenses incident to the performance of the obligations
of the Company hereunder for which provision is not otherwise made in
this Section. It is understood, however, that except as provided in
this Section, Section 8, and the last paragraph of Section 10, the
Placement Agents will pay all of their costs and expenses, including
fees and disbursements of their counsel, transfer taxes payable on
resale of any of the Securities by them and any advertising expenses
connected with any offers they may make.
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(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require the
registration under the Securities Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell the
Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(h) While any of the Securities remain "restricted securities"
within the meaning of the Securities Act, to make available, upon
request, to any seller of the Securities the information specified in
Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT").
(i) If requested by you, to use its best efforts to permit the
Securities to be designated PORTAL securities in accordance with the
rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL Market.
(j) To refrain from, and to cause its Affiliates or any person
acting on its or their behalf (other than the Placement Agents) to
refrain from, engaging in any directed selling efforts (as that term is
defined in Regulation S) with respect to the Securities, and to comply,
and to cause its Affiliates and each person acting on its or their
behalf (other than the Placement Agents) to comply, with the offering
restrictions requirement of Regulation S.
(k) During the period of two years after the Closing Date, not
to resell, and to cause its Affiliates (as defined in Rule 144 under
the Securities Act) not to resell, any of the Securities which
constitute "restricted securities" under Rule 144 that have been
reacquired by any of them.
7. Offering of Securities; Restrictions on Transfer. (a) Each
Placement Agent, severally and not jointly, represents and warrants that such
Placement Agent is a QIB. Each Placement Agent, severally and not jointly,
represents and warrants to the Company that (i) it has not solicited and will
not solicit offers for, and has not offered or sold and will not offer or sell,
such Securities by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it has solicited and will solicit offers for such Securities only
from, and has offered and will offer such Securities
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only to, persons that it reasonably believes to be (A) in the case of offers
inside the United States, (1) QIBs or (2) other institutional accredited
investors that, prior to their purchase of the Securities, deliver to such
Placement Agent a letter containing the representations and agreements set forth
in Appendix A to the Final Memorandum and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("FOREIGN PURCHASERS," which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)) in reliance upon Regulation S under the Securities Act
that, in each case, in purchasing such Securities are deemed to have represented
and agreed as provided in the Final Memorandum under the caption "Transfer
Restrictions."
(b) Each Placement Agent, severally and not jointly,
represents, warrants, and agrees with respect to offers and sales outside the
United States that:
(i) such Placement Agent understands that no action has been
or will be taken in any jurisdiction by the Company that would permit a
public offering of the Securities, or possession or distribution of the
Final Memorandum or any other offering or publicity material relating
to the Securities, in any country or jurisdiction where action for that
purpose is required;
(ii) such Placement Agent will comply with all applicable laws
and regulations in each jurisdiction in which it acquires, offers,
sells or delivers Securities or has in its possession or distributes
the Final Memorandum or any such other material, in all cases at its
own expense;
(iii) the Securities have not been registered under the
Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except in
accordance with Rule 144A or Regulation S under the Securities Act or
pursuant to another exemption from the registration requirements of the
Securities Act;
(iv) such Placement Agent has offered the Securities and will
offer and sell the Securities (A) as part of their distribution at any
time and (B) otherwise until 40 days after the later of the
commencement of the Offering and the Closing Date, only in accordance
with Rule 903 of Regulation S or as otherwise permitted in Section
7(a); accordingly, neither such Placement Agent, its Affiliates nor any
persons acting on its or their behalf have engaged or will engage in
any directed selling efforts (within the meaning of Regulation S) with
respect to the Securities, and any such Placement Agent, its Affiliates
and any such persons have complied and will comply with the offering
restrictions requirement of Regulation S;
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(v) such Placement Agent has (A) not offered or sold and,
prior to the date six months after the Closing Date, will not offer or
sell any Securities to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995;
(B) complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United
Kingdom; and (C) only issued or passed on and will only issue or pass
on in the United Kingdom any document received by it in connection with
the issue of the Securities to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on;
(vi) such Placement Agent understands that the Securities have
not been and will not be registered under the Securities and Exchange
Law of Japan, and represents that it has not offered or sold, and
agrees not to offer or sell, directly or indirectly, any Securities in
Japan or for the account of any resident thereof except pursuant to any
exemption from the registration requirements of the Securities and
Exchange Law of Japan and otherwise in compliance with applicable
provisions of Japanese law; and
(vii) such Placement Agent agrees that, at or prior to
confirmation of sales of the Securities, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Securities Act.
Terms used above have the meaning given to them by Regulation S."
Terms used in this Section 7(b) have the meanings given to
them by Regulation S.
8. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Placement Agent and each person, if any, who
controls any Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the
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Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Final Memorandum (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in the light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Placement Agent furnished to the Company in writing by such Placement Agent
through you expressly for use therein.
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Placement Agent, but only with
reference to information relating to such Placement Agent furnished to the
Company in writing by such Placement Agent through you expressly for use in the
Final Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for
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any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section
8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Placement Agents on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company on the one
hand and of the Placement Agents on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Placement
Agents on the other hand in connection with the offering of the Securities shall
be deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total discounts and commissions received by the Placement Agents in
respect thereof, bear to the aggregate offering price of the Securities. The
relative fault of the Company on the one hand and of the Placement Agents on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Placement Agents and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Placement Agents' respective obligations to contribute pursuant to
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this Section 8 are several in proportion to the respective principal amount of
Securities they have purchased hereunder, and not joint.
(e) The Company and the Placement Agents agree that it would
not be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Placement Agents were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in Section 8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Placement Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities resold by
it in the initial placement of such Securities were offered to investors exceeds
the amount of any damages that such Placement Agent has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Placement Agent or any person
controlling any Placement Agent or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
9. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of
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any of the events specified in clauses 9(a)(i) through 9(a)(iv), such event,
singly or together with any other such event, makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum.
10. Effectiveness; Defaulting Placement Agents. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date, any one or more of the Placement
Agents shall fail or refuse to purchase Securities that it or they have agreed
to purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Placement Agent or Placement Agents agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, the other Placement
Agents shall be obligated severally in the proportions that the principal amount
of Securities set forth opposite their respective names in Schedule I bears to
the aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Placement Agents, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amounts of Securities that any Placement
Agent has agreed to purchase pursuant to this Agreement be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Placement Agent. If, on the
Closing Date any Placement Agent or Placement Agents shall fail or refuse to
purchase Securities which it or they have agreed to purchase hereunder on such
date and the aggregate principal amount of Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, and arrangements satisfactory to you
and the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Placement Agent or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Final Memorandum or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting Placement
Agent from liability in respect of any default of such Placement Agent under
this Agreement.
If this Agreement shall be terminated by the Placement Agents,
or any one of them, because of any failure or refusal on the part of the Company
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Placement Agents or such
Placement Agents as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by the Placement Agents in
connection with this Agreement or the offering contemplated hereunder.
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11. Notices. All notices and other communications under this
Agreement shall be in writing and mailed, delivered or sent by facsimile
transmission to: if sent to the Placement Agents, Morgan Stanley & Co.
Incorporated, 1585 Broadway, New York, New York 10036, attention: High Yield New
Issues Group, facsimile number (212) 761-0587, and if sent to the Company, Regal
Cinemas, Inc., attention: Chief Financial Officer, facsimile number (423)
922-6085.
12. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
14. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
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Very truly yours,
REGAL CINEMAS, INC.
By: /s/ D. MARK MONROE
----------------------------------
Name: D. Mark Monroe
Title: Vice President
Accepted as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
Acting on behalf of themselves and
the several Placement Agents named in Schedule I hereto.
By: Morgan Stanley & Co. Incorporated
By: /s/ CLIFTON E. STRAIN
--------------------------------------
Name: Clifton E. Strain
Title: Principal
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SCHEDULE I
PRINCIPAL AMOUNT OF
PLACEMENT AGENT SECURITIES TO BE PURCHASED
--------------- --------------------------
Morgan Stanley & Co. Incorporated..................................... $140,000,000
Donaldson, Lufkin & Jenrette Securities Corporation................... 60,000,000
-------------
Total................................................................. $200,000,000
============
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EXHIBIT A
OPINION OF LOCAL COUNSEL
FOR THE COMPANY
Attach draft opinion of the counsel for the Company to be
delivered pursuant to Section 5(c) of the Placement Agreement to the effect
that:
A. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Final Memorandum and is duly qualified
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
B. Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Final Memorandum
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or in good standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole; all of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable, and are owned directly
by the Company, free and clear of all liens, encumbrances, equities or claims.
C. The Placement Agreement has been duly authorized, executed and
delivered by the Company.
D. The Securities have been duly authorized by the Company.
E. Each of the Indenture and Registration Rights Agreement has been
duly authorized, executed and delivered by the Company.
F. After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject other than proceedings fairly summarized in
all material respects in the Final Memorandum and proceedings which such counsel
believes are not likely to have a material adverse effect on the
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Company and its subsidiaries, taken as a whole, or on the power or ability of
the Company to perform its obligations under the Placement Agreement, the
Indenture, the Registration Rights Agreement or the Securities or to consummate
the transactions contemplated by the Final Memorandum.