Exhibit 10.15
Execution Counterpart
AMENDED AND RESTATED
REIMBURSEMENT AND SECURITY AGREEMENT
Between
HARCOURT GENERAL, INC.
and
GC COMPANIES, INC.
Dated as of January 26, 1999
TABLE OF CONTENTS
Page
1. Background; Amendment and Restatement; Definitions . . . . . 1
1.1. Background. . . . . . . . . . . . . . . . . . . . . . 1
1.2. Amendment and Restatement . . . . . . . . . . . . . . 1
1.3. Definitions; Certain Rules of Construction. . . . . . 1
2. Payment Provisions . . . . . . . . . . . . . . . . . . . . .21
2.1. Reimbursement and Indemnification . . . . . . . . . .21
2.2. Guarantor's Fee . . . . . . . . . . . . . . . . . . .21
2.3. Interest on Overdue Payments. . . . . . . . . . . . .21
3. General Covenants. . . . . . . . . . . . . . . . . . . . . .21
3.1. Financial Statements and Reports. . . . . . . . . . .21
3.1.1. Annual Reports . . . . . . . . . . . . . . . .21
3.1.2. Quarterly Reports. . . . . . . . . . . . . . .22
3.1.3. Public Reports . . . . . . . . . . . . . . . .23
3.1.4. Notice of Litigation; Notice of Defaults . . .23
3.1.5. Management Letters . . . . . . . . . . . . . .23
3.1.6. South American Financing Documents . . . . . .23
3.1.7. Other Information. . . . . . . . . . . . . . .24
3.2. Liens . . . . . . . . . . . . . . . . . . . . . . . .24
3.3. Distributions . . . . . . . . . . . . . . . . . . . .26
3.4. Merger, Consolidation and Dispositions of Assets. . .27
3.5. Issuance of Stock by Theatre Subsidiaries; Subsidiary
Distributions. . . . . . . . . . . . . . . . . . . . . . . . . .30
3.5.1. Issuance of Stock by Theatre Subsidiaries. . .30
3.5.2. No Restrictions on Subsidiary Distributions. .30
3.6. Guaranteed Leases and Transferred Leases. . . . . . .30
3.6.1. No Transfer. . . . . . . . . . . . . . . . . .30
3.6.2. Amendments, Renewals, Extensions, etc. . . . .30
3.7. Conduct of Theatre Business . . . . . . . . . . . . .31
3.7.1. Theatre Subsidiaries . . . . . . . . . . . . .31
3.7.2. Theatre Business . . . . . . . . . . . . . . .31
3.8. No Extension of Credit Agreement. . . . . . . . . . .31
4. First Tier Covenants . . . . . . . . . . . . . . . . . . . .31
4.1. Consolidated Net Worth. . . . . . . . . . . . . . . .31
4.2. Consolidated Adjusted Cash Flow to Consolidated Fixed
Charges. . . . . . . . . . . . . . . . . . . . . . . .31
4.3. Consolidated Adjusted EBITDA to Consolidated Interest
Charges. . . . . . . . . . . . . . . . . . . . . . . .31
4.4. Consolidated Total Adjusted Debt to Consolidated Adjusted
EBITDA . . . . . . . . . . . . . . . . . . . . . . . .32
4.5. Core Theatre Adjusted EBITDA to Core Theatre Fixed Charges32
4.6. Problem Theatre Adjusted EBITDA.. . . . . . . . . . .32
4.7. South American Adjusted EBITDA. . . . . . . . . . . .32
4.8. Investments and Acquisitions. . . . . . . . . . . . .32
4.9. Capital Expenditures. . . . . . . . . . . . . . . . .33
5. Second Tier Covenants. . . . . . . . . . . . . . . . . . . .33
5.1. Investments and Acquisitions. . . . . . . . . . . . .33
5.2. Financing Debt. . . . . . . . . . . . . . . . . . . .34
5.3. Distributions . . . . . . . . . . . . . . . . . . . .34
5.4. Capital Expenditures. . . . . . . . . . . . . . . . .35
5.5. Payment of Theatre Obligations. . . . . . . . . . . .36
6. Representations and Warranties . . . . . . . . . . . . . . .36
6.1. Organization and Business . . . . . . . . . . . . . .36
6.1.1. The Company. . . . . . . . . . . . . . . . . .36
6.1.2. Subsidiaries . . . . . . . . . . . . . . . . .36
6.1.3. Qualification. . . . . . . . . . . . . . . . .36
6.2. Authorization and Enforceability. . . . . . . . . . .36
6.3. No Legal Obstacle to Agreements . . . . . . . . . . .37
6.4. Delivery of Collateral. . . . . . . . . . . . . . . .37
7. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . .37
7.1. Events of Default . . . . . . . . . . . . . . . . . .37
7.1.1. Payment. . . . . . . . . . . . . . . . . . . .37
7.1.2. Specified Covenants. . . . . . . . . . . . . .38
7.1.3. Other Covenants. . . . . . . . . . . . . . . .38
7.1.4. Representations and Warranties . . . . . . . .38
7.1.5. Cross-Defaults, etc. . . . . . . . . . . . . .38
7.1.6. Ownership; Liquidation; etc. . . . . . . . . .38
7.1.7. Enforceability, etc. . . . . . . . . . . . . .39
7.2. Certain Payments Upon an Event of Default . . . . . .40
7.3. Enforcement of Payment; Collateral; Setoff. . . . . .40
7.4. Specific Performance; Exercise of Rights. . . . . . .40
7.5. Cumulative Remedies . . . . . . . . . . . . . . . . .40
7.6. Annulment of Defaults . . . . . . . . . . . . . . . .40
7.7. Waivers . . . . . . . . . . . . . . . . . . . . . . .41
7.8. Obligations Absolute. . . . . . . . . . . . . . . . .41
8. Security . . . . . . . . . . . . . . . . . . . . . . . . . .41
8.1. Collateral. . . . . . . . . . . . . . . . . . . . . .41
8.1.1. Pledged Stock. . . . . . . . . . . . . . . . .41
8.1.2. Pledged Rights . . . . . . . . . . . . . . . .42
8.1.3. Proceeds and Products. . . . . . . . . . . . .42
8.2. Representations, Warranties and Covenants with Respect to
the Collateral . . . . . . . . . . . . . . . . . . . .42
8.2.1. Pledged Stock. . . . . . . . . . . . . . . . .42
8.2.2. No Liens or Restrictions on Transfer or Change of
Control. . . . . . . . . . . . . . . . . . . . .42
8.2.3. Perfection of the Collateral . . . . . . . . .42
8.3. Administration of Collateral. . . . . . . . . . . . .43
8.3.1. Distributions on Pledged Securities. . . . . .43
8.3.2. Voting of Pledged Securities . . . . . . . . .43
8.4. Right to Realize upon Collateral. . . . . . . . . . .43
8.4.1. General Authority. . . . . . . . . . . . . . .43
8.4.2. Marshaling, etc. . . . . . . . . . . . . . . .44
8.4.3. Sales of Collateral. . . . . . . . . . . . . .45
8.4.4. Sale Without Registration. . . . . . . . . . .45
8.4.5. Application of Proceeds. . . . . . . . . . . .46
8.5. Custody of Collateral . . . . . . . . . . . . . . . .46
9. Expenses; Indemnity. . . . . . . . . . . . . . . . . . . . .47
9.1. Expenses. . . . . . . . . . . . . . . . . . . . . . .47
9.2. General Indemnity . . . . . . . . . . . . . . . . . .47
10. Successors and Assigns. . . . . . . . . . . . . . . . . . .47
11. Confidentiality . . . . . . . . . . . . . . . . . . . . . .47
12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . .48
13. Course of Dealing; Amendments and Waivers . . . . . . . . .48
14. Termination and Defeasance. . . . . . . . . . . . . . . . .49
15. General . . . . . . . . . . . . . . . . . . . . . . . . . .49
AMENDED AND RESTATED
REIMBURSEMENT AND SECURITY AGREEMENT
This Amended and Restated Reimbursement and Security Agreement,
dated as of January 26, 1999, is between Harcourt General, Inc., a
Delaware corporation ("Harcourt"), and GC Companies, Inc., a Delaware
corporation (the "Company"). The parties agree as follows:
1. Background; Amendment and Restatement; Definitions.
1.1. Background. Prior to December 14, 1993, the Company was a
Wholly-Owned Subsidiary (as defined below) of Harcourt. On
December 14, 1993, pursuant to a transaction approved by the Board of
Directors of Harcourt, (a) Harcourt transferred its theatre business
to the Company, (b) Harcourt distributed all of the shares of capital
stock of the Company to the stockholders of Harcourt and (c) the
Company became a publicly-owned corporation (collectively, the
"Spinoff"). Notwithstanding the Spinoff, Harcourt (i) has secondary
liability with respect to certain theatre leases assigned by Harcourt
to the Company and, in turn, assigned by the Company to certain
Subsidiaries (as defined below) of the Company and (ii) has
guaranteed the obligations of certain Subsidiaries of the Company
under certain theatre leases to which such Subsidiaries are parties.
Hence, in connection with the Spinoff, the parties entered into a
Reimbursement and Security Agreement dated as of December 14, 1993
(the "Prior Agreement") pursuant to which, among other things, the
Company (A) agreed to reimburse and indemnify Harcourt for all
amounts paid by Harcourt in respect of any such secondary liability
on, or guarantee of, any such theatre lease and (B) pledged to
Harcourt all of the capital stock of the Theatre Subsidiaries (as
defined below) to secure the payment and performance of the Company's
obligations under the Prior Agreement. The Company recently has
adopted a new business plan and, in order to implement such new
business plan, has requested that Harcourt amend certain provisions
of the Prior Agreement.
1.2. Amendment and Restatement. Effective as of the date hereof,
this Agreement amends and restates in its entirety the Prior
Agreement.
1.3. Definitions; Certain Rules of Construction. Certain
capitalized terms are used in this Agreement with the specific
meanings defined below in this Section 1. Except as otherwise
explicitly specified to the contrary or unless the context clearly
requires otherwise, (a) the capitalized word "Section" refers to
sections of this Agreement, (b) the capitalized word "Exhibit" refers
to exhibits to this Agreement, (c) references to a particular Section
include all subsections thereof, (d) the word "including" shall be
construed as "including without limitation", (e) accounting terms not
otherwise defined herein have the meaning provided under GAAP, (f)
terms defined in the UCC and not otherwise defined herein have the
meaning provided under the UCC, (g) references to a particular
statute or regulation include all rules and regulations thereunder
and any successor statute, regulation or rules, in each case as from
time to time in effect, and (h) references to a particular Person
include such Person's successors and assigns to the extent not
prohibited by this Agreement.
1.3.1. "Administrative Agent" means the administrative agent
under the Credit Agreement.
1.3.2. "Affiliate" means, with respect to the Company (or
any other specified Person), any other Person directly or
indirectly controlling, controlled by or under direct or indirect
common control with the Company (or such specified Person);
provided, however, that the Company and its Subsidiaries, on the
one hand, and Harcourt and its Subsidiaries, on the other hand,
shall not be deemed Affiliates of each other for purposes of this
Agreement.
1.3.3. "Argentina Credit Facility" means the Guaranteed
Secured Credit Agreement dated as of December 18, 1998 among the
Argentina Subsidiary, the lenders from time to time party thereto
and BankBoston, N.A., Nassau Branch, as agent.
1.3.4. "Argentina Subsidiary" means each of General Cinema
de Argentina S.A. and Hoyts Cinema de Argentina S.A.
1.3.5. "Asset-Specific EBITDA" means, with respect to any
sale of assets or Equity Interests by the Company or any of its
Theatre Subsidiaries, the lesser of (a) the amount of Consolidated
Adjusted EBITDA during the four fiscal quarters of the Company
most recently ended prior to the date of such sale that is
attributable to such assets or Equity Interests and (b) $1.
1.3.6. "B Theatres" means the theatres listed on Exhibit
1.3A.
1.3.7. "Bankruptcy Code" means Title 11 of the United States
Code.
1.3.8. "Bankruptcy Default" means an Event of Default
referred to in Section 7.1.8.
1.3.9. "Brazil Credit Facility" means a credit facility
among the Brazil Subsidiary and its senior lenders that contains
terms which are not significantly less favorable to the Company,
the Brazil Subsidiary and the other Subsidiaries of the Company
than the terms contained in the Argentina Credit Facility.
1.3.10. "Brazil Subsidiary" means General Cinema do Brasil
Empreendimentos Ltda.
1.3.11. "Capital Expenditures" means, for any period,
amounts added or required to be added to the property, plant and
equipment or other fixed assets account on the Consolidated
balance sheet of the Company (or other specified Person) and its
Subsidiaries (or other group of specified Persons), prepared in
accordance with GAAP.
1.3.12. "Capitalized Lease" means any lease which is
required to be capitalized on the balance sheet of the lessee in
accordance with GAAP, including Statement Nos. 13 and 98 of the
Financial Accounting Standards Board.
1.3.13. "Capitalized Lease Obligations" means the amount of
the liability reflecting the aggregate discounted amount of future
payments under all Capitalized Leases calculated in accordance
with GAAP, including Statement Nos. 13 and 98 of the Financial
Accounting Standards Board.
1.3.14. "Cash Equivalents" means:
(a) negotiable certificates of deposit, time deposits
(including sweep accounts), demand deposits and bankers'
acceptances issued by any United States financial institution
having capital and surplus and undivided profits aggregating at
least $100,000,000 and rated both Prime-1 by ▇▇▇▇▇'▇ and A-1 by
S&P;
(b) short-term corporate obligations rated both Prime-1 by
▇▇▇▇▇'▇ and A-1 by S&P;
(c) any direct obligation of the United States of America or
any agency or instrumentality thereof, or of any state or
municipality thereof, (i) which has a remaining maturity at the
time of purchase of not more than one year or (ii) which is
subject to a repurchase agreement with any financial institution
referred to in clause (a) above, exercisable within one year from
the time of purchase and (iii) which, in the case of obligations
of any state or municipality, is rated Aa or better by ▇▇▇▇▇'▇ or
AA or better by S&P;
(d) any mutual fund or other pooled investment vehicle rated
Aa or better by ▇▇▇▇▇'▇ or AA or better by S&P which invests
principally in obligations described above; and
(e) any repurchase agreement with any financial institution
described in clause (a) above with respect to any obligations
described in clause (c) above.
1.3.15. "Chile Credit Facility" means a credit facility
among the Chile Subsidiary and its senior lenders that contains
terms which are not significantly less favorable to the Company,
the Chile Subsidiary and the other Subsidiaries of the Company
than the terms contained in the Argentina Credit Facility.
1.3.16. "Chile Subsidiary" means Hoyts Cinema de Chile S.A.
1.3.17. "Cinema Ventures" means Cinema Ventures, LLC, a
Delaware limited liability company.
1.3.18. "Collateral" means all assets now or from time to
time hereafter subjected to a security interest, mortgage or
charge (or intended or required so to be subjected pursuant to
this Agreement) to secure the payment or performance of any of the
Obligations, including the assets described in Sections 8.1.1
through 8.1.3.
1.3.19. "Company" is defined in the preamble hereto.
1.3.20. "Computation Covenant" means each of Sections 3.2.10
through 3.2.15, 3.3.2, 3.4.5, 3.4.13, 4.1 through 4.7, 4.8.4,
4.8.5, 4.9 and, if applicable, Sections 5.1.6, 5.2.2, 5.2.4 and
5.4.
1.3.21. "Consolidated" and "Consolidating", when used with
reference to any term, mean that term as applied to the accounts
of the Company (or other specified Person) and all of its
Subsidiaries (or other specified group of Persons), or such of its
Subsidiaries as may be specified, consolidated (or combined) or
consolidating (or combining), as the case may be, in accordance
with GAAP and with appropriate deductions for minority interests
in Subsidiaries.
1.3.22. "Consolidated Adjusted Cash Flow" means, for any
period, the sum of (a) Consolidated Adjusted EBITDA for such
period plus (b) the aggregate amount of all rental expense for
real property operating leases of the Company and its Majority-
Owned Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with GAAP.
1.3.23. "Consolidated Adjusted EBITDA" means, for any
period, the total of:
(a) Consolidated Net Income for such period; plus
(b) without duplication and only to the extent reflected as
a charge in the statement of Consolidated Net Income for such
period, the sum of:
(i) Consolidated Interest Charges, taxes, depreciation
and amortization expenses of the Company and its Majority-
Owned Subsidiaries for such period; plus
(ii) expenses or losses from any Permitted Non-Theatre
Investments; plus
(iii) any extraordinary, unusual or non-recurring
expenses or losses for such period; plus
(iv) all general and administrative expenses of GCCI
and its Majority-Owned Subsidiaries for such period;
provided, however, that if the general and administrative
expenses of GCCI and its Majority-Owned Subsidiaries for such
period exceed $4,250,000, then only $4,250,000 of such
expenses shall be added to Consolidated Net Income for such
period pursuant to this clause (iv); minus
(c) without duplication and only to the extent reflected as
an addition (or, as the case may be, reduction) in the statement
of Consolidated Net Income for such period, the sum of:
(i) any income or gains from any Permitted Non-Theatre
Investments; plus
(ii) any extraordinary, unusual or non-recurring income
or gains; plus
(iii) the part of Consolidated Net Income for such
period that is attributable to the Consolidated net income
(or loss) of all Foreign Subsidiaries of the Company for such
period;
all as determined on a Consolidated basis in accordance with GAAP.
1.3.24. "Consolidated Excess Cash Flow" means, for any
period, the total of:
(a) Consolidated Adjusted EBITDA for such period; plus
(b) the net cash proceeds paid to or for the account of the
Company during such period in respect of the issuance of
additional Equity Interests of the Company; minus
(c) Consolidated Interest Charges for such period; minus
(d) Capital Expenditures of the Company and its Majority-
Owned Subsidiaries for such period; minus
(e) all regularly scheduled payments of principal of
Consolidated Total Financing Debt (other than Foreign Non-Recourse
Debt) payable during such period; minus
(f) Distributions made by the Company during such period;
minus
(g) cash taxes paid by the Company and its Majority-Owned
Subsidiaries during such period;
all as determined on a Consolidated basis in accordance with GAAP.
1.3.25. "Consolidated Excess Theatre Cash Flow" means, for
any period, the total of:
(a) Consolidated Excess Cash Flow for such period; minus
(b) without duplication and only to the extent reflected as
an addition to Consolidated Excess Cash Flow for such period, any
income or gains from any Permitted Non-Theatre Investments for
such period; plus
(c) without duplication and only to the extent reflected as
a charge to Consolidated Excess Cash Flow during such period, any
expenses or losses from any Permitted Non-Theatre Investments for
such period.
1.3.26. "Consolidated Fixed Charges" means, for any period,
the sum of:
(a) all regularly scheduled payments of principal of
Consolidated Total Financing Debt (other than Foreign Non-Recourse
Debt) payable during such period; plus
(b) Consolidated Interest Charges for such period; plus
(c) the aggregate amount of all rental expense for real
property operating leases of the Company and its Majority-Owned
Subsidiaries for such period;
all as determined on a Consolidated basis in accordance with GAAP.
1.3.27. "Consolidated Interest Charges" means, for any
period, the total of (a) the aggregate amount of interest,
including interest expense under Capitalized Leases, paid or
accrued by the Company or any of its Majority-Owned Subsidiaries
during such period, minus (b) the aggregate amount of interest,
including interest expense under Capitalized Leases, paid or
accrued by any of the Majority-Owned Subsidiaries of the Company
which are Foreign Subsidiaries during such period on or in respect
of any Foreign Non-Recourse Debt, all as determined on a
Consolidated basis in accordance with GAAP.
1.3.28. "Consolidated Net Income" means, for any period, the
Consolidated net income (or loss) of the Company and its Majority-
Owned Subsidiaries for such period, determined in accordance with
GAAP on a Consolidated basis.
1.3.29. "Consolidated Net Investment Cash Flow" means, for
any period, the total of:
(a) Net Cash Proceeds received by the Company or any of its
Majority-Owned Subsidiaries during such period from the sale or
other transfer of any Permitted Non-Theatre Investments; plus
(b) without duplication, all cash income and other cash
gains, including cash interest, cash dividends and other cash
Distributions, received by the Company or any of its Majority-
Owned Subsidiaries from Permitted Non-Theatre Investments during
such period; minus
(c) all cash expenses and cash losses incurred or sustained
by the Company or any of its Majority-Owned Subsidiaries from
Permitted Non-Theatre Investments during such period; plus
(d) without duplication, non-cash losses realized by the
Company or any of its Majority-Owned Subsidiaries during such
period from Permitted Non-Theatre Investments to the extent of any
write-downs or write-offs of any thereof taken by the Company or
any of its Majority-Owned Subsidiaries in such period;
all as determined on a Consolidated basis in accordance with GAAP.
1.3.30. "Consolidated Net Worth" means, at any date,
stockholders' equity of the Company and its Majority-Owned
Subsidiaries, determined on a Consolidated basis in accordance
with GAAP; provided, however, that for purposes of determining the
Consolidated Net Worth, the amount thereof shall be adjusted so as
to eliminate the effect of any unrealized gains or any unrealized
losses in the total market value as at such date of the
Investments of the Company and its Majority-Owned Subsidiaries in
the Equity Interests of each of Global Telesystems Group, Inc. and
GrandVision relative to the total market value of such Investments
as reflected on the audited Consolidated balance sheet of the
Company and its Subsidiaries as at October 31, 1998.
1.3.31. "Consolidated Total Adjusted Debt" means, at any
date, the total of (a) Consolidated Total Financing Debt as at
such date, minus (b) to the extent included in Consolidated Total
Financing Debt as at such date, the Foreign Non-Recourse Debt of
the Foreign Subsidiaries of the Company as at such date, minus (c)
the aggregate of the Eligible Securities Values of all Eligible
Securities as at such date.
1.3.32. "Consolidated Total Financing Debt" means, at any
date, the Financing Debt of the Company and its Majority-Owned
Subsidiaries outstanding on and as of such date, determined on a
Consolidated basis.
1.3.33. "Core Theatre" means, at any date, each theatre
which (a) is owned or operated by the Company or any of its
Subsidiaries and (b) is located in the Northeast or Midwest
regions of the United States, including the theatres listed on
Exhibit 1.3B.
1.3.34. "Core Theatre Adjusted EBITDA" means, at any date,
the total of:
(a) Consolidated net income of the Core Theatres for such
period; plus
(b) without duplication and only to the extent reflected as
a charge in the statement of Consolidated net income of the Core
Theatres for such period, the sum of:
(i) the aggregate amount of interest, including
interest expense under Capitalized Leases, paid or accrued by
the Core Theatres during such period; plus
(ii) income taxes, depreciation and amortization
expenses of the Core Theatres for such period; plus
(iii) non-operating expenses of the Core Theatres for
such period; plus
(iv) lease expenses of the Core Theatres for such
period; minus
(c) without duplication and only to the extent reflected as
an addition (or, as the case may be, reduction) in the statement
of Consolidated net income of the Core Theatres for such period,
all non-operating income of the Core Theatres for such period;
all as determined on a Consolidated basis in accordance with GAAP.
1.3.35. "Core Theatre Fixed Charges" means, for any period,
the sum of:
(a) all regularly scheduled payments of principal of
Financing Debt of the Core Theatres payable during such period;
plus
(b) the aggregate amount of interest, including interest
expense under Capitalized Leases, paid or accrued by the Core
Theatres during such period; plus
(c) lease expenses of the Core Theatres for such period;
all as determined on a Consolidated basis in accordance with GAAP.
1.3.36. "Credit Agreement" means the Revolving Credit
Agreement dated as of January 26, 1999 among the Company, the
lenders from time to time party thereto, BancBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Inc., as syndication agent and arranger, The Bank of
Nova Scotia, as documentation agent, and BankBoston, N.A., as
administrative agent.
1.3.37. "Cumulative Excess Theatre Cash Flow" means, on any
date, the aggregate of the Consolidated Excess Theatre Cash Flows
for all fiscal years of the Company ending on or after October 31,
1998 but prior to such date; provided, however, that Consolidated
Excess Theatre Cash Flow for any such particular fiscal year of
the Company shall not, for purposes of this definition, be added
to and included in Cumulative Excess Theatre Cash Flow until the
later of (a) the first business day after delivery to Harcourt of
the financial statements required to be delivered by the Company
to Harcourt pursuant to Section 3.1.1 or (b) if any First Tier
Default or Default shall exist when such financial statements are
delivered to Harcourt, the first business day thereafter on which
no First Tier Default or Default shall exist.
1.3.38. "Cumulative Net Investment Cash Flow" means, on any
date, the aggregate of the Consolidated Net Investment Cash Flows
for all fiscal quarters of the Company ending on or after October
31, 1998 but prior to such date; provided, however, that
Consolidated Net Investment Cash Flow for any such particular
fiscal quarter of the Company shall not, for purposes of this
definition, be added to and included in Cumulative Net Investment
Cash Flow until the later of (a) the first business day after
delivery to Harcourt of the financial statements required to be
delivered by the Company to Harcourt pursuant to Section 3.1.2 or
(b) if any First Tier Default or Default shall exist when such
financial statements are delivered to Harcourt, the first business
day thereafter on which no First Tier Default or Default shall
exist.
1.3.39. "Default" means any Event of Default and any event
or condition which with the passage of time or giving of notice,
or both, would become an Event of Default.
1.3.40. "Distribution" means, with respect to the Company
(or other specified Person):
(a) the declaration or payment of any dividend or
distribution on or in respect of any shares of any class of
capital stock of or other equity interest in the Company (or such
specified Person);
(b) the purchase, redemption or other retirement of any
shares of any class of capital stock of or other equity interest
in the Company (or such specified Person) or of options, warrants
or other rights for the purchase of such shares, directly,
indirectly through a Subsidiary or otherwise;
(c) any other distribution on or in respect of any shares of
any class of capital stock of or equity or other beneficial
interest in the Company (or such specified Person);
(d) any prepayment, purchase, redemption or defeasance of
any Subordinated Indebtedness of the Company (or such specified
Person); and
(e) any payment, loan or advance by the Company (or such
specified Person) to, or any other Investment by the Company (or
such specified Person) in, any beneficial owner of 5% or more of
any class of capital stock of or other equity interest in the
Company (or such specified Person) or any Affiliate of such
beneficial owner;
provided, however, that the term "Distribution" shall not include
(i) dividends payable in common stock of or other equity interests
in the Company (or such specified Person) or (ii) payments in the
ordinary course of business in respect of (A) reasonable
compensation paid to employees, officers and directors, (B)
advances and reimbursements to employees for travel expenses,
drawing accounts, relocation costs and similar expenditures, (C)
rent paid to, or accounts payable for services rendered or goods
sold by, non-Affiliates that own capital stock of or other equity
interests in the Company (or such specified Person) or
(D) intercompany accounts payable and real property leases to
non-Affiliates that own capital stock of or other equity interests
in the Company (or such specified Person).
1.3.41. "Eligible Securities" means, with respect to any
particular marketable Securities of any particular issuer:
(a) at any date prior to the date on which the Credit
Agreement terminates, marketable Securities of such issuer that
(i) are owned by the Company or by any of its Majority-Owned
Subsidiaries as at such date free and clear of all Liens and (ii)
are determined by the Administrative Agent in its sole and
complete discretion to be "Eligible Securities" as at such date
for the purposes of this Agreement, each such determination by the
Administrative Agent to be in each case final and binding on the
Company for all purposes of this Agreement; and
(b) at any date on or after the date on which the Credit
Agreement terminates, marketable Securities of such issuer that
(i) are owned by the Company or by any of its Majority-Owned
Subsidiaries as at such date free and clear of all Liens and (ii)
are determined by Harcourt in its sole and complete discretion to
be "Eligible Securities" as at such date for the purposes of this
Agreement, each such determination by Harcourt to be in each case
final and binding on the Company for all purposes of this
Agreement.
1.3.42. "Eligible Securities Value" means, with respect to
any particular Eligible Securities of any particular issuer:
(a) at any date prior to the date on which the Credit
Agreement terminates, the product of (i) the Fair Market Value of
such Eligible Securities as at such date, as such Fair Market
Value shall be determined by mutual agreement of the Company and
the Administrative Agent, multiplied by (ii) the percentage used
or to be used by the Administrative Agent in calculating the
Eligible Securities Value of such Eligible Securities as at such
date, which percentage (A) shall be no greater than 50% and
(B) shall be determined by the Administrative Agent in its sole
and complete discretion, each such determination by the
Administrative Agent to be in each case final and binding on the
Company for all purposes of this Agreement; provided, however,
that the percentage which shall be so used by the Administrative
Agent for the marketable Securities of each of Global Telesystems
Group, Inc. and GrandVision shall, as determined by the
Administrative Agent on or as of the date hereof, be and remain
50%; and
(b) at any date on or after the date on which the Credit
Agreement terminates, the product of (i) the Fair Market Value of
such Eligible Securities as at such date, as such Fair Market
Value shall be determined by mutual agreement of the Company and
Harcourt, multiplied by (ii) the percentage used or to be used by
Harcourt in calculating the Eligible Securities Value of such
Eligible Securities as at such date, which percentage (A) shall be
no greater than 50% and (B) shall be determined by Harcourt in its
sole and complete discretion, each such determination by Harcourt
to be in each case final and binding on the Company for all
purposes of this Agreement; provided, however, that the percentage
which shall be so used by Harcourt for the marketable Securities
of each of Global Telesystems Group, Inc. and GrandVision shall,
as determined by Harcourt on or as of the date hereof, be and
remain 50%.
1.3.43. "Equity Interests" means: (a) in the case of any
corporation, any corporate capital stock of any class or series;
(b) in the case of any association or business entity, any shares,
interests, participations, rights or other equivalents (howsoever
designated) of corporate capital stock; (c) in the case of any
partnership or limited liability company, partnership or
membership interests (whether general or limited); and (d) any
warrants, options or other rights to purchase or otherwise acquire
any capital stock, shares or interests of the kind described in
clause (a), (b) or (c) above.
1.3.44. "Event of Default" is defined in Section 7.1.
1.3.45. "Exchange Act" means the federal Securities Exchange
Act of 1934.
1.3.46. "Fair Market Value" means, with respect to any
Securities or other property, the price which could be negotiated
in an arm's-length, free-market transaction between a willing
seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
1.3.47. "Fee Percentage" means:
(a) on any date prior to the Reset Date:
(i) if the Lease Exposure on such date is greater than
$400,000,000, 0.0625%;
(ii) if the Lease Exposure on such date is less than or
equal to $400,000,000 but greater than $350,000,000, 0.045%;
(iii) if the Lease Exposure on such date is less than
or equal to $350,000,000 but greater than $250,000,000,
0.030%; and
(iv) if the Lease Exposure on such date is less than or
equal to $250,000,000, 0.015%; and
(b) on the Reset Date and any date thereafter, 0.015%.
1.3.48. "First Tier Default" means any failure by the
Company to perform or observe any of the provisions of Section 4.
1.3.49. "Financing Debt" means each of the items described
in clauses (a) through (g) of the definition of the term
"Indebtedness" and, without duplication, any guarantees of such
items.
1.3.50. "Foreign Non-Recourse Debt" means, with respect to
any Foreign Subsidiary of the Company at any time, all or any
portion of the Financing Debt of such Foreign Subsidiary at such
time:
(a) as to which neither the Company nor any of its
Subsidiaries (other than Foreign Subsidiaries) (i) provides any
credit support of any kind (including any undertaking, agreement
or instrument that would constitute a guarantee), (ii) is directly
or indirectly obligated or liable (as a guarantor under a
guarantee or otherwise) or (iii) constitutes the lender or obligor
thereof;
(b) with respect to which neither the Company nor any of its
Subsidiaries (other than Foreign Subsidiaries) has granted any
Liens to secure the payment or performance of all or any part
thereof; and
(c) no default with respect to which (including any rights
that the holders thereof may have to take any Enforcement Action
(as defined in the Intercreditor Agreement) against any Foreign
Subsidiary) would permit (upon notice or lapse of time or both)
any holder of any Financing Debt (other than Financing Debt under
the Credit Agreement) of the Company or of any of its Subsidiaries
to declare a default on such other Financing Debt or cause the
payment thereof to be accelerated or payable prior to its stated
maturity.
1.3.51. "Foreign Subsidiary" means each Subsidiary that is
organized under the laws of, and conducting its business primarily
in, a jurisdiction outside of the United States of America and
that is not domesticated or dually incorporated under the laws of
the United States of America or any state thereof.
1.3.52. "GAAP" means generally accepted accounting
principles as from time to time in effect, including the
statements and interpretations of the United States Financial
Accounting Standards Board, applied on a consistent basis (except
for changes concurred with by the independent public accountants
of the Company) with the most recent audited consolidated
financial statements of the Company and its Majority-Owned
Subsidiaries delivered to Harcourt pursuant to Section 3.1.1;
provided, however, that if any party notifies the other party that
such party wishes to determine compliance with any covenant
contained in Section 3.3.2, 3.4.13, 4.1 through 4.7, 4.8.4, 4.9 or
5.4 to eliminate or otherwise modify the effect of any change in
generally accepted accounting principles after October 31, 1998,
then until the earlier of (a) the date on which such notice is
withdrawn and (b) the date on which such covenant is amended in a
manner mutually satisfactory to Harcourt and the Company, for
purposes of determining compliance with such covenant and the
related definitions, "GAAP" means generally accepted accounting
principles as in effect immediately prior to the effectiveness of
such change.
1.3.53. "GCCI" means GCC Investments, Inc., a Delaware
corporation and Wholly-Owned Subsidiary of the Company.
1.3.54. "Guaranteed Lease" means each lease of real
property, as from time to time in effect, which Harcourt has
guaranteed pursuant to a Guarantee.
1.3.55. "Guarantees" means the respective guarantees
provided by Harcourt to lessors of real property leased by
Subsidiaries of the Company, as from time to time in effect.
1.3.56. "Harcourt" is defined in the preamble hereto.
1.3.57. "HGC South America" means Hoyts General Cinema South
America, Inc., a Cayman Islands corporation.
1.3.58. "Indebtedness" means all obligations, contingent or
otherwise, which in accordance with GAAP are required to be
classified upon the balance sheet of the Company (or other
specified Person) as liabilities, but in any event including
(without duplication):
(a) borrowed money;
(b) Indebtedness evidenced by notes, debentures or similar
instruments;
(c) Capitalized Lease Obligations;
(d) the deferred purchase price of assets, services or
Securities, including related noncompetition, consulting and stock
repurchase obligations (other than normal trade accounts payable
in the ordinary course of business);
(e) mandatory redemption or dividend rights on capital stock
(or other equity);
(f) reimbursement obligations, whether contingent or
matured, with respect to letters of credit, bankers' acceptances,
surety bonds, other financial guarantees and Interest Rate
Protection Agreements (without duplication of other Indebtedness
supported or guaranteed thereby);
(g) unfunded pension liabilities;
(h) obligations that are immediately and directly due and
payable out of the proceeds of or production from property;
(i) liabilities secured by any Lien existing on property
owned or acquired by the Company (or such specified Person),
whether or not the liability secured thereby shall have been
assumed; and
(j) all guarantees and endorsements in respect of
Indebtedness of others.
1.3.59. "Indemnified Party" is defined in Section 9.2.
1.3.60. "Intercreditor Agreement" means the Intercreditor
Agreement dated as of January 26, 1999, as amended and in effect
from time to time, among BankBoston, N.A., as administrative agent
for itself and the other lenders under the Credit Agreement,
Harcourt and the Company.
1.3.61. "Interest Rate Protection Agreement" means any
interest rate swap, interest rate cap, interest rate hedge or
other contractual arrangement that converts variable interest
rates into fixed interest rates, fixed interest rates into
variable interest rates or other similar arrangements.
1.3.62. "Investment" means, with respect to the Company (or
other specified Person):
(a) any share of capital stock, partnership or other equity
interest, evidence of Indebtedness or other security issued by any
other Person;
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person;
(c) any guarantee of the Indebtedness of any other Person;
(d) any acquisition of all or any part of the business of
any other Person or the assets comprising such business or part
thereof;
(e) any commitment or option to make any Investment if the
consideration for such commitment or option exceeds $1,000; and
(f) any other similar investment.
The investments described in the foregoing clauses
(a) through (f) shall be included in the term "Investment" whether
they are made or acquired by purchase, exchange, issuance of stock
or other Securities, merger, reorganization or any other method;
provided, however, that the term "Investment" shall not include
(i) current trade and customer accounts receivable for property
leased, goods furnished or services rendered in the ordinary
course of business and payable in accordance with customary trade
terms, (ii) deposits, advances and prepayments to suppliers for
property leased, goods furnished and services rendered in the
ordinary course of business, (iii) advances to employees for
travel expenses, drawing accounts, relocation costs and similar
expenditures, (iv) stock or other Securities acquired in
connection with the satisfaction or enforcement of Indebtedness or
claims due to the Company (or such specified Person) or as
security for any such Indebtedness or claim or (v) demand deposits
in banks or similar financial institutions.
1.3.63. "Lease Exposure" means, at any time, the sum of (a)
all present and future rental payments and other amounts
guaranteed by Harcourt under the Guarantees plus (b) all present
and future rental payments and other amounts owing under the
Transferred Leases.
1.3.64. "Lien" means, with respect to the Company (or any
other specified Person):
(a) any lien, encumbrance, mortgage, pledge, charge or
security interest of any kind upon any property or assets of the
Company (or such specified Person), whether now owned or hereafter
acquired, or upon the income or profits therefrom;
(b) any arrangement or agreement which prohibits the Company
(or such specified Person) from creating encumbrances, mortgages,
pledges, liens, charges or security interests;
(c) the acquisition of, or the agreement to acquire, any
property or asset upon conditional sale or subject to any other
title retention agreement, device or arrangement (including a
Capitalized Lease);
(d) the sale, assignment, pledge or transfer for security of
any accounts, general intangibles or chattel paper of the Company
(or such specified Person), with or without recourse;
(e) the transfer of any tangible property or assets for the
purpose of subjecting such items to the payment of Indebtedness in
priority to payment of the general creditors of the Company (or
such specified Person); and
(f) the existence for a period of more than 90 consecutive
days of any Indebtedness against the Company (or such specified
Person) which if unpaid would by law or upon a Bankruptcy Default
be given any priority over general creditors.
1.3.65. "Majority-Owned Subsidiary" means any Subsidiary of
which a majority of the outstanding capital stock (or other shares
of beneficial interest) entitled to vote generally (other than
directors' qualifying shares and, in the case of Foreign
Subsidiaries, nominal shares required by applicable law to be held
by foreign nationals) is owned by the Company (or other specified
Person) directly or indirectly through one or more Majority-Owned
Subsidiaries; provided, however, that except (a) for purposes of
Sections 3.1.1 and 3.1.2 and (b) as and to the extent otherwise
required by GAAP, none of (i) Cinema Ventures and its Subsidiaries
and (ii) Sundance and its Subsidiaries shall constitute a
Majority-Owned Subsidiary of the Company or any of its
Subsidiaries.
1.3.66. "Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc.
1.3.67. "Net Cash Proceeds" means, with respect to any sale
or transfer of any Investment or other property by any Person, the
cash portion of the Net Proceeds from such sale or transfer,
including all such cash paid from time to time under any
instruments evidencing or securing any obligations to pay all or
any part of the purchase price or other consideration payable in
connection with such sale or transfer.
1.3.68. "Net Proceeds" means, with respect to any sale or
transfer of any Investment or other property by any Person, all
cash and other property (including instruments evidencing or
securing indebtedness and Equity Interests or other Securities)
payable to or receivable by such Person from such sale or
transfer, net of (a) all income, sales, use, transfer or other
taxes (state, federal or local) solely attributable to such sale
or transfer and reasonably estimated to be payable in cash by such
Person for the taxable year in which such sale or transfer
occurred, (b) all sales or other similar commissions and fees,
costs and other expenses incurred in connection with such sale or
transfer and (c) appropriate amounts to be provided by such Person
as a reserve, in accordance with GAAP, against any liabilities
associated with such Investment or property and retained by such
Person after such sale or transfer, or against any indemnification
obligations associated with the sale or transfer of such
Investment or other property.
1.3.69. "Non-Theatre Subsidiary" means each Subsidiary of
the Company that is not a Theatre Subsidiary.
1.3.70. "Obligations" means all present and future
liabilities, obligations and Indebtedness of the Company owing to
Harcourt under or in connection with this Agreement, including
interest and fees under Section 2, reimbursement, indemnification
and guarantee obligations under Section 2, payment obligations
under Sections 7.2 and 9 and other charges, indemnities and
expenses from time to time owing hereunder (all whether accruing
before or after a Bankruptcy Default and regardless of whether
allowed as a claim in bankruptcy or similar proceedings).
1.3.71. "Payment Default" means any failure by the Company
to perform or observe any of the provisions of Section 2 or 7.2.
1.3.72. "Permitted Non-Theatre Investments" means each of
(a) Investments made by the Company in GCCI or any of the
Majority-Owned Subsidiaries of GCCI and (b) Investments made by
GCCI or any of its Majority-Owned Subsidiaries in any other
Person.
1.3.73. "Person" means any present or future natural person
or any corporation, association, partnership, joint venture,
limited liability, joint stock or other company, business trust,
trust, organization, business or government or any governmental
agency or political subdivision thereof.
1.3.74. "Pledged Rights" is defined in Section 8.1.2.
1.3.75. "Pledged Securities" means, collectively, the
Pledged Stock and the Pledged Rights.
1.3.76. "Pledged Stock" is defined in Section 8.1.1.
1.3.77. "Pledged Theatre Subsidiary" means each present or
future Theatre Subsidiary; provided, however, that none of (a) the
Foreign Subsidiaries of HGC South America, (b) Cinema Ventures and
its Subsidiaries and (c) Sundance and its Subsidiaries shall
constitute a Pledged Theatre Subsidiary.
1.3.78. "Present Value Lease Exposure" means, at any time,
the sum of the then present values of (a) all present and future
rental payments and other amounts guaranteed by Harcourt under the
Guarantees plus (b) all present and future rental payments and
other amounts owing under the Transferred Leases, calculated by
discounting each such rental payment and each such other amount
from its payment date to the date of calculation of such present
value at a per annum interest rate equal to the sum of (i) the
then prevailing rate of interest on debt Securities customarily
issued by the Treasury of the United States having a 10-year
maturity date plus (ii) 0.75%.
1.3.79. "Prior Agreement" is defined in Section 1.1.
1.3.80. "Problem Theatres" means the theatres listed on
Exhibit 1.3C.
1.3.81. "PPI" means the Producer Price Index for Finished
Goods published by the Bureau of Labor Statistics (1982 = 100).
1.3.82. "Reset Date" means the date on which:
(a) no First Tier Default or Default exists;
(b) Consolidated Adjusted Cash Flow during the period of
four consecutive fiscal quarters of the Company most recently
ended equals or exceeds 130% of Consolidated Fixed Charges during
such period of four consecutive fiscal quarters; and
(c) Consolidated Adjusted EBITDA during the period of four
consecutive fiscal quarters of the Company most recently ended
equals or exceeds 350% of Consolidated Interest Charges during
such period of four consecutive fiscal quarters.
1.3.83. "S&P" means Standard & Poor's, a division of The
McGraw Hill Companies, Inc.
1.3.84. "Securities" means any Equity Interests, bonds,
debentures, notes or other evidences of indebtedness for borrowed
money, whether secured or unsecured, and whether convertible,
subordinated or otherwise, or, in general, any instruments
commonly known as "securities".
1.3.85. "Securities Act" means the federal Securities Act of
1933.
1.3.86. "▇▇▇▇▇ Family Group" means the group of Persons
originally party to the ▇▇▇▇▇-▇▇▇▇▇/Marks Stockholders Agreement
dated as of December 15, 1993 (whether or not such agreement is
terminated) and the progeny of each such Person.
1.3.87. "South American Adjusted EBITDA" means, for any
period, the total of:
(a) Consolidated net income of the South American
Subsidiaries for such period; plus
(b) without duplication and only to the extent reflected as
a charge in the statement of Consolidated net income of the South
American Subsidiaries for such period, the sum of:
(i) the aggregate amount of interest, including
interest expense under Capitalized Leases, paid or accrued by
the South American Subsidiaries during such period; plus
(ii) taxes, depreciation and amortization expenses of
the South American Subsidiaries for such period; plus
(iii) any extraordinary, unusual or non-recurring
expenses or losses for such period; minus
(c) without duplication and only to the extent reflected as
an addition (or, as the case may be, reduction) in the statement
of Consolidated net income of the South American Subsidiaries for
such period, any extraordinary, unusual or non-recurring income or
gains for such period;
all as determined on a Consolidated basis in accordance with GAAP.
1.3.88. "South American Subsidiaries" means each of HGC
South America, the Argentina Subsidiary, the Brazil Subsidiary,
the Chile Subsidiary, the Uruguay Subsidiary and the other
Subsidiaries of HGC South America which are Foreign Subsidiaries
and Theatre Subsidiaries.
1.3.89. "Spinoff" is defined in Section 1.1.
1.3.90. "Subordinated Indebtedness" means Indebtedness of
the Company (or other specified Person) which by its terms or any
agreement is subordinated to the prior payment of any Financing
Debt of the Company (or such specified Person).
1.3.91. "Subsidiary" means any Person of which the Company
(or other specified Person) shall at the time, directly or
indirectly through one or more of its Subsidiaries, (a) own at
least 50% of the outstanding capital stock (or other shares of
beneficial interest) entitled to vote generally, (b) hold at least
50% of the partnership, joint venture or similar interests or
(c) be a general partner or joint venturer.
1.3.92. "Sundance" means Sundance Cinema Circuit, LLC, a
Delaware limited liability company.
1.3.93. "Theatre Subsidiary" means each present and future
Subsidiary of the Company that is engaged in whole or in part in
the business of (a) motion picture exhibition or (b) managing the
motion picture exhibition or concession business of any other
Person.
1.3.94. "Transferred Lease" means each theatre lease
transferred by Harcourt to the Company and, in turn, by the
Company to a Subsidiary of the Company in connection with the
Spinoff, as from time to time in effect.
1.3.95. "UCC" means the Uniform Commercial Code as in effect
in Massachusetts; provided, however, that with respect to the
perfection of Harcourt's Lien on the Collateral and the effect of
perfection or nonperfection thereof, the term "UCC" means the
Uniform Commercial Code as in effect in any jurisdiction the laws
of which are made applicable by Section 9-103 of the Uniform
Commercial Code as in effect in Massachusetts.
1.3.96. "Uruguay Credit Facility" means a credit facility
among the Uruguay Subsidiary and its senior lenders that contains
terms which are not significantly less favorable to the Company,
the Uruguay Subsidiary and the other Subsidiaries of the Company
than the terms contained in the Argentina Credit Facility.
1.3.97. "Uruguay Subsidiary" means Telnir S.A.
1.3.98. "Wholly-Owned Subsidiary" means any Subsidiary of
which all of the outstanding capital stock (or other shares of
beneficial interest) entitled to vote generally (other than
directors' qualifying shares and, in the case of Foreign
Subsidiaries, nominal shares required by applicable law to be held
by foreign nationals) is owned by the Company (or other specified
Person) directly or indirectly through one or more Wholly-Owned
Subsidiaries.
2. Payment Provisions.
2.1. Reimbursement and Indemnification. The Company hereby
unconditionally and irrevocably agrees (a) to pay Harcourt,
immediately upon written notice by Harcourt, any and all amounts paid
by Harcourt pursuant to, or in respect of, any Guarantee or
Transferred Lease and (b) to indemnify, defend and hold harmless
Harcourt and its Affiliates and their respective directors, officers,
employees and agents from and against any and all claims, losses,
liabilities, damages, cost and expenses (including reasonable
attorneys' fees and expenses) arising from or in connection with any
Guarantee or Transferred Lease.
2.2. Guarantor's Fee. Commencing on February 1, 1999, the
Company will pay to Harcourt a quarterly guarantor's fee, payable in
advance on the first business day of each February, May, August and
November in an amount equal to the product of (a) the Fee Percentage
multiplied by (b) the Present Value Lease Exposure as of such day.
2.3. Interest on Overdue Payments. The Company will, on demand,
pay to Harcourt interest on any overdue payment required to be made
under this Agreement at a per annum rate equal to the sum of (a) 2%
plus (b) the rate of interest from time to time announced by
BankBoston, N.A. as its "base rate".
3. General Covenants. The Company covenants that it will, and it
will cause its Subsidiaries to, comply with the following provisions:
3.1. Financial Statements and Reports.
3.1.1. Annual Reports. The Company will furnish to Harcourt
as soon as available, and in any event within 110 days after the
end of each fiscal year of the Company, the Consolidated balance
sheet of the Company and its Majority-Owned Subsidiaries as at the
end of such fiscal year and the Consolidated statements of income,
of changes in shareholders' equity and of cash flows of the
Company and its Majority-Owned Subsidiaries for such fiscal year
and the last fiscal quarter of such fiscal year (all in reasonable
detail), all accompanied by:
(a) reports of Deloitte & Touche (or, if they cease to be
auditors of the Company and its Majority-Owned Subsidiaries, other
independent certified public accountants of recognized national
standing), containing no material qualification, to the effect
that they have audited the foregoing Consolidated financial
statements (other than the financial statements for the last
quarter of such fiscal year) in accordance with generally accepted
auditing standards and that such audited Consolidated financial
statements present fairly, in all material respects, the financial
position of the Company and its Majority-Owned Subsidiaries
covered thereby at the date thereof and the results of their
operations for the period covered thereby in conformity with GAAP;
(b) the statement of such accountants that they have caused
this Agreement to be reviewed and that in the course of their
audit of the Company and its Majority-Owned Subsidiaries no facts
have come to their attention that cause them to believe that any
First Tier Default or Default exists or, if such is not the case,
specifying such First Tier Default or Default and the nature
thereof; provided, however, that this statement is furnished by
such accountants with the understanding that the examination of
such accountants cannot be relied upon to give such accountants
knowledge of any such First Tier Default or Default except as it
relates to accounting or auditing matters within the scope of
their audit;
(c) a certificate of the Company signed by the chief
financial officer or treasurer of the Company to the effect that
such officer has caused this Agreement to be reviewed and has no
knowledge of any First Tier Default or Default, or if such officer
has such knowledge, specifying such First Tier Default or Default
and the nature thereof and what action the Company has taken, is
taking or proposes to take with respect thereto;
(d) computations by the Company demonstrating, as of the end
of such fiscal year and the last fiscal quarter of such fiscal
year, compliance with the Computation Covenants; and
(e) in reasonable detail, management's discussion and
analysis of (i) the results of operations and the financial
condition of the Company and its Subsidiaries as at the end of and
for each of (A) such fiscal year and (B) the last fiscal quarter
of such fiscal year and (ii) the progress of the Company in
implementing its new business plan as presented by the Company to
the Special Committee of the Board of Directors of Harcourt on
November 15, 1998.
3.1.2. Quarterly Reports. The Company will furnish to
Harcourt as soon as available and, in any event within 55 days
after the end of each of the first three fiscal quarters of each
fiscal year of the Company, the internally prepared Consolidated
balance sheet of the Company and its Majority-Owned Subsidiaries
as of the end of such fiscal quarter and the Consolidated
statements of income, of changes in shareholders' equity and of
cash flows of the Company and its Majority-Owned Subsidiaries for
such month and for the portion of the fiscal year then ended (all
in reasonable detail), all accompanied by:
(a) a certificate of the Company signed by the chief
financial officer or treasurer of the Company to the effect that
such financial statements have been prepared in accordance with
GAAP and present fairly, in all material respects, the financial
position of the Company and its Majority-Owned Subsidiaries
covered thereby at the dates thereof and the results of their
operations for the periods covered thereby, subject only to normal
year-end audit adjustments and the addition of footnotes;
(b) a certificate of the Company signed by the chief
financial officer or treasurer of the Company to the effect that
such officer has caused this Agreement to be reviewed and has no
knowledge of any First Tier Default or Default, or if such officer
has such knowledge, specifying such First Tier Default or Default
and the nature thereof and what action the Company has taken, is
taking or proposes to take with respect thereto;
(c) computations by the Company demonstrating, as of the end
of such fiscal quarter, compliance with the Computation Covenants;
and
(d) in reasonable detail, management's discussion and
analysis of (i) the results of operations and the financial
condition of the Company and its Subsidiaries as at the end of and
for such fiscal quarter and (ii) the progress of the Company in
implementing its new business plan as presented by the Company to
the Special Committee of the Board of Directors of Harcourt on
November 15, 1998.
3.1.3. Public Reports. The Company will promptly furnish to
Harcourt such registration statements, proxy statements and
reports, including Forms 10-K, 10-Q and 8-K, as may be filed by
the Company with the Securities and Exchange Commission.
3.1.4. Notice of Litigation; Notice of Defaults. The
Company will promptly furnish to Harcourt notice of (i) any notice
or other communication from any lessor that the Company or any
Theatre Subsidiary is in default under any Guaranteed Lease or any
Transferred Lease; (ii) any litigation or administrative or
arbitration proceeding commenced, or to the knowledge of the
Company, threatened, relating to any Guaranteed Lease or any
Transferred Lease; and (iii) any other litigation or
administrative or arbitration proceeding commenced, or to the
knowledge of the Company, threatened, against or relating to the
Company or any of its Subsidiaries if the damages claimed in such
proceeding are $5,000,000 or more or if such proceeding may result
in a material adverse change in the business or assets or in the
condition, financial or otherwise, of the Company and its
Subsidiaries on a Consolidated basis or of the Company on an
individual basis. Promptly upon acquiring knowledge thereof, the
Company will notify Harcourt of the existence of any First Tier
Default or Default, specifying the nature thereof and what action
the Company or any Subsidiary has taken, is taking or proposes to
take with respect thereto.
3.1.5. Management Letters. The Company will promptly
furnish to Harcourt any management letters furnished to the
Company or any of its Subsidiaries by the Company's auditors.
3.1.6. South American Financing Documents. The Company will
promptly furnish to Harcourt any agreement relating to any
Financing Debt of any South American Subsidiary and all financial
statements and financial compliance certificates required to be
delivered from time to time by the Company or any South American
Subsidiary to any lender under such agreement.
3.1.7. Other Information. From time to time upon request of
any authorized officer of Harcourt, each of the Company and its
Subsidiaries will furnish to Harcourt such other information
regarding the business, assets, financial condition, income or
prospects of the Company and its Subsidiaries as such officer may
reasonably request. Harcourt's authorized officers and
representatives shall have the right during normal business hours
upon reasonable notice and at reasonable intervals to examine the
books and records of the Company and its Subsidiaries, to make
copies, notes and abstracts therefrom and to make an independent
examination of such books and records for the purpose of verifying
the accuracy of the reports delivered by the Company and its
Subsidiaries pursuant to this Section 3.1 and ascertaining
compliance with or obtaining enforcement of this Agreement.
3.2. Liens. Neither the Company nor any of its Subsidiaries
shall create, incur or enter into, or suffer to be created or
incurred or to exist, any Lien (including any arrangement or
agreement which prohibits it from creating any Lien), except the
following:
3.2.1. Liens on the Collateral that secure the Obligations
for the benefit of Harcourt.
3.2.2. Liens to secure taxes and assessments and other
governmental charges if (a) the validity or amount of such tax,
assessment or other governmental charge is being contested in good
faith by the Company or any of its Subsidiaries by appropriate
proceedings and (b) the Company or such Subsidiary, in accordance
with GAAP, has set aside on its books adequate reserves with
respect thereto; provided, however, that each of the Company and
its Subsidiaries will pay or bond, or cause to be paid or bonded,
all such taxes, assessments or other governmental charges
immediately upon the commencement of proceedings to foreclose any
Lien which may have attached as security therefor (except to the
extent such proceedings have been dismissed or stayed).
3.2.3. Deposits or pledges made (a) in connection with, or
to secure payment of, workers' compensation, unemployment
insurance, old age pensions or other social security, (b) in
connection with casualty insurance, (c) to secure the performance
of bids, tenders, contracts (other than contracts relating to
Financing Debt) or leases, (d) to secure statutory obligations or
surety or appeal bonds or (e) to secure indemnity, performance or
other similar bonds in the ordinary course of business.
3.2.4. Liens in respect of judgments or awards (a) which
have been in force for less than the applicable appeal period or
(b) in respect of which the Company or any of its Subsidiaries
shall at the time in good faith be prosecuting an appeal or
proceeding for review and, in the case of each of clauses (a) and
(b), the Company or such Subsidiary shall have taken appropriate
reserves therefor in accordance with GAAP and execution of such
judgment or award shall not be levied.
3.2.5. Liens of carriers, warehousemen, mechanics and
similar Liens, which in each case (a) are being contested in good
faith by the Company or any Subsidiary in appropriate proceedings
(so long as the Company or such Subsidiary shall, in accordance
with GAAP, have set aside on its books adequate reserves with
respect thereto) and (b) do not materially detract from the value
of any asset or other property material to the operations or
business of the Company or any of its Subsidiaries or impair the
use thereof in the business of the Company or any of its
Subsidiaries.
3.2.6. Encumbrances in the nature of (a) zoning
restrictions, (b) easements, (c) restrictions of record on the use
of real property, (d) landlords' and lessors' Liens on rented
premises and (e) restrictions on transfers or assignment of
leases, which in each case do not materially detract from the
value of any asset or other property material to the operations or
business of the Company or any of its Subsidiaries or impair the
use thereof in the business of the Company or any of its
Subsidiaries.
3.2.7. Restrictions under federal and state securities laws
on the transfer of Securities.
3.2.8. Liens constituting (a) purchase money security
interests existing or created on the date on which such property
is acquired, and (b) the renewal, extension or refunding of any
security interest referred to in the foregoing clause (a) in an
amount not to exceed the amount thereof remaining unpaid
immediately prior to such renewal, extension or refunding;
provided, however, that each such security interest shall attach
solely to the particular item of property so acquired, and the
principal amount of Indebtedness (including Indebtedness in
respect of Capitalized Lease Obligations) secured thereby shall
not exceed the cost (including all such Indebtedness secured
thereby, whether or not assumed) of such item of property.
3.2.9. Liens consisting of covenants contained in agreements
relating to senior Financing Debt of the Company prohibiting the
Company and its Subsidiaries from creating encumbrances,
mortgages, liens, charges or security interests on their assets
(other than Liens on the Collateral which secure the Obligations
for the benefit of Harcourt).
3.2.10. Liens on the capital stock of the
Argentina Subsidiary granted to BankBoston, N.A., Nassau Branch,
as agent under the Argentina Credit Facility, to secure up to
$75,000,000 of obligations of the Argentina Subsidiary under the
Argentina Credit Facility.
3.2.11. Liens on the capital stock of the Brazil Subsidiary
granted to the senior lenders of the Brazil Subsidiary to secure
up to $17,250,000 in obligations of the Brazil Subsidiary under
the Brazil Credit Facility.
3.2.12. Liens on the capital stock of the Chile Subsidiary
granted to the senior lenders of the Chile Subsidiary to secure up
to $15,000,000 in obligations of the Chile Subsidiary under the
Chile Credit Facility.
3.2.13. Liens on the capital stock of the Uruguay Subsidiary
granted to the senior lenders of the Uruguay Subsidiary to secure
up to $5,000,000 in obligations of the Uruguay Subsidiary under
the Uruguay Credit Facility.
3.2.14. If any South American Subsidiaries combine their
respective credit facilities into a joint senior credit facility,
Liens on the capital stock of such combining South American
Subsidiaries granted to their senior lenders to secure their
obligations under such joint senior credit facility; provided,
however, that the aggregate amount of obligations of such South
American Subsidiaries secured pursuant to Sections 3.2.10 through
3.2.13 and this Section 3.2.14 shall not exceed the aggregate
amount of obligations of such South American Subsidiaries
permitted to be secured pursuant to Sections 3.2.10 through
3.2.13.
3.2.15. Liens granted by the Theatre Subsidiaries on theatre
assets acquired after the date hereof and located in the United
States to secure the financing used to acquire such theatre
assets; provided, however, that (a) each such Lien shall attach
solely to the particular item of property so acquired, (b) the
principal amount of such financing secured thereby shall not
exceed the cost (including all such financing secured thereby,
whether or not assumed) of such item of property and (c) the
aggregate amount of financing secured by all such Liens shall not
exceed $10,000,000.
3.2.16. Liens on the capital stock and assets of each of
Cinema Ventures, Sundance and their respective Subsidiaries.
3.3. Distributions. Neither the Company nor any of its
Subsidiaries shall make any Distribution, except the following:
3.3.1. Any Subsidiary of the Company may make Distributions
to its equityholders which (a) are in proportion to the respective
Equity Interests of such Subsidiary owned by such equityholders or
(b) are disproportionately favorable to the Company or any of its
other Subsidiaries based on the respective Equity Interests owned
by the equityholders of such Subsidiary.
3.3.2. At any time after the delivery by the Company to
Harcourt of the financial statements required to be delivered
pursuant to Section 3.1.1 for the fiscal year of the Company
ending on October 31, 1999, so long as immediately before and
after giving effect thereto no First Tier Default or Default
exists, the Company may make Distributions to its stockholders;
provided, however, that the aggregate amount of all such
Distributions shall not exceed the total of (a) 50% of Cumulative
Excess Theatre Cash Flow minus (b) to the extent included in
clause (a) above, gains from the sale of assets of the Theatre
Subsidiaries.
3.4. Merger, Consolidation and Dispositions of Assets. Neither
the Company nor any of the Theatre Subsidiaries shall (a) become a
party to any merger or consolidation or shall sell, lease, sell and
leaseback, sublease or otherwise dispose of any of its assets, or (b)
contract, or make other arrangements, with any Person (other than a
Theatre Subsidiary) to manage the theatre business of, or provide
concession services to, any Theatre Subsidiary, except the following:
3.4.1. Any Theatre Subsidiary may sell or otherwise dispose
of (a) inventory in the ordinary course of business, (b) tangible
assets to be replaced in the ordinary course of business by other
tangible assets of equal or greater value and (c) tangible assets
that are no longer used or useful in the business of the Company
or such Theatre Subsidiary.
3.4.2. Any Theatre Subsidiary may merge or liquidate into
any other Theatre Subsidiary so long as after giving effect
thereto the surviving company is a directly owned Wholly-Owned
Subsidiary of the Company.
3.4.3. The Company may sell or otherwise dispose of
Investments other than Investments in Theatre Subsidiaries which
are not South American Subsidiaries.
3.4.4. The Theatre Subsidiaries may sell the assets of the
Theatre Subsidiaries listed on Exhibit 3.4.4.
3.4.5. The Company and the Theatre Subsidiaries may transfer
the assets or Equity Interests of any Problem Theatre so long as
(a) such transfer effects a release of Harcourt from all
obligations under each Guaranteed Lease and Transferred Lease
relating to such assets or Equity Interests or (b) such assets or
Equity Interests are transferred to a transferee having a
Consolidated net worth of at least $10,000,000 and the aggregate
amount of buyout payments made by the Company and its Subsidiaries
to such transferee in connection with such transfer does not
exceed the product of (i) four multiplied by (ii) the negative
cash flow generated by the assets of such Problem Theatre during
the period of four consecutive fiscal quarters of the Company most
recently ended; provided, however, that the aggregate amount of
all buyout payments made by the Company and its Subsidiaries in
connection with transfers of assets and Equity Interests pursuant
to this clause (b) shall not exceed $15,000,000.
3.4.6. The Company and the Theatre Subsidiaries may sell the
assets or Equity Interests of any B Theatre so long as (a) such
sale effects a release of Harcourt from all obligations under each
Guaranteed Lease and Transferred Lease relating to such assets or
Equity Interests or (b) such assets are sold to a buyer having a
Consolidated net worth of at least $10,000,000 and the cash
consideration received by the Company and its Subsidiaries in
connection with such sale equals or exceeds the product of
(i) four multiplied by (ii) the cash flow generated by the assets
of such B Theatre during the period of four consecutive fiscal
quarters of the Company most recently ended.
3.4.7. The Company and the Theatre Subsidiaries may transfer
the assets or Equity Interests of any Problem Theatre or B Theatre
to any transferee having a Consolidated net worth of at least
$10,000,000 in exchange for theatre assets of such transferee
having substantially the same cash flow during the period of four
consecutive fiscal quarters of the Company most recently ended as
the assets of such Problem Theatre or B Theatre.
3.4.8. Any South American Subsidiary may merge or liquidate
into any other South American Subsidiary.
3.4.9. Any South American Subsidiary may merge into any
Person (other than any other Theatre Subsidiary which is not a
Foreign Subsidiary) so long as contemporaneously with such merger
(a) an amount of Financing Debt (other than Foreign Non-Recourse
Debt) of such South American Subsidiary equal to the lesser of
(i) the Net Cash Proceeds received by such South American
Subsidiary in connection with such merger and (ii) the Financing
Debt (other than Foreign Non-Recourse Debt) of such South American
Subsidiary, is indefeasibly discharged in full and (b) guarantees
by the Company and any of its Subsidiaries of an amount of
Indebtedness (including Financing Debt) of such South American
Subsidiary equal to the lesser (i) the Net Cash Proceeds received
by such South American Subsidiary in connection with such merger
and (ii) the Financing Debt (other than Foreign Non-Recourse Debt)
of such South American Subsidiary, are irrevocably terminated;
provided, however, that if such South American Subsidiary and any
other South American Subsidiary are co-obligors with respect to
any Financing Debt (other than Foreign Non-Recourse Debt), then
for purposes of determining the amount of such Financing Debt
(A) which is required to be indefeasibly discharged in full
pursuant to clause (a) above and (B) in respect of which all
guarantees are required to be irrevocably terminated pursuant to
clause (B) above, each co-obligor shall be deemed to be the sole
obligor in respect of its equitable proportion of such Financing
Debt, which apportionment shall be based on the relative portions
of South American Adjusted EBITDA during the period of four
consecutive fiscal quarters of the Company most recently ended
that are attributable to such co-obligors.
3.4.10. Any South American Subsidiary may sell all or any
portion of its assets or all or any portion of its Equity
Interests in any other Person, in each case so long as
contemporaneously with such sale (a) an amount of Financing Debt
(other than Foreign Non-Recourse Debt) of such South American
Subsidiary equal to the lesser of (i) the Net Cash Proceeds
received by such South American Subsidiary in connection with such
sale and (ii) the Financing Debt (other than Foreign Non-Recourse
Debt) of such South American Subsidiary, is indefeasibly
discharged in full and (b) guarantees by the Company and any of
its Subsidiaries of an amount of Indebtedness (including Financing
Debt) of such South American Subsidiary equal to the lesser of (i)
the Net Cash Proceeds received by such South American Subsidiary
in connection with such sale and (ii) the Financing Debt (other
than Foreign Non-Recourse Debt) of such South American Subsidiary,
are irrevocably terminated; provided, however, that if such South
American Subsidiary and any other South American Subsidiary are
co-obligors with respect to any Financing Debt (other than Foreign
Non-Recourse Debt), then for purposes of determining the amount of
such Financing Debt (A) which is required to be indefeasibly
discharged in full pursuant to clause (a) above and (B) in respect
of which guarantees are required to be irrevocably terminated
pursuant to clause (b) above, each co-obligor shall be deemed to
be the sole obligor in respect of its equitable proportion of such
Financing Debt, which apportionment shall be based on the relative
portions of South American Adjusted EBITDA during the period of
four consecutive fiscal quarters of the Company most recently
ended that are attributable to such co-obligors.
3.4.11. Each of Cinema Ventures, Sundance and their
respective Subsidiaries may merge or be liquidated into any other
Person.
3.4.12. Each of Cinema Ventures, Sundance and their
respective Subsidiaries may sell all or any portion of its assets
or all or any portion of its Equity Interests in any other Person.
3.4.13. In addition to the foregoing, (a) the Company may
sell any (but not substantially all) of its assets or all of its
Equity Interests in any Theatre Subsidiary and (b) any Theatre
Subsidiary (other than any South American Subsidiary) may sell all
or any of its assets, in each case so long as:
(i) either (A) such sale effects a release of Harcourt
from all obligations under each Guaranteed Lease and
Transferred Lease relating to such assets or Equity Interests
or (B) such assets or Equity Interests are transferred to a
transferee having a Consolidated net worth of at least
$10,000,000;
(ii) the consideration received by the Company or such
Theatre Subsidiary in exchange for such assets or Equity
Interests equals or exceeds the Fair Market Value of such
assets or Equity Interests;
(iii) immediately before and after giving effect to
such sale, no First Tier Default or Default exists; and
(iv) immediately before and after giving effect to any
such sale, the aggregate amount of Asset-Specific EBITDA
attributable to all of the assets and Equity Interests sold
pursuant to this Section 3.4.13 shall not exceed 10% of
Consolidated Adjusted EBITDA of the Company and its Majority-
Owned Subsidiaries for the period of four consecutive fiscal
quarters of the Company most recently ended for which
financial statements have been delivered by the Company to
Harcourt pursuant to Section 3.1.1 or 3.1.2.
3.5. Issuance of Stock by Theatre Subsidiaries; Subsidiary
Distributions.
3.5.1. Issuance of Stock by Theatre Subsidiaries. No
present Majority-Owned Subsidiary of the Company which is a
Theatre Subsidiary shall issue or sell any shares of its capital
stock or other evidence of beneficial ownership to any Person
other than (a) to the Company or any of its Wholly-Owned
Subsidiaries which is a Theatre Subsidiary and (b) as required by
applicable law or licensing authorities.
3.5.2. No Restrictions on Subsidiary Distributions. Except
for this Agreement and agreements relating to Financing Debt of
the Company, the South American Subsidiaries, Cinema Ventures,
Sundance and the respective Subsidiaries of Cinema Venture and
Sundance, neither the Company nor any of its Subsidiaries shall
enter into or be bound by any agreement (including covenants
requiring the maintenance of specified amounts of net worth or
working capital) restricting the right of any such Subsidiary to
make Distributions or extensions of credit to the Company
(directly or indirectly through another Subsidiary of the
Company).
3.6. Guaranteed Leases and Transferred Leases.
3.6.1. No Transfer. No Theatre Subsidiary shall transfer,
assign or sublease any Guaranteed Lease or any Transferred Lease
to any other Person (other than another Theatre Subsidiary)
without the prior written consent of Harcourt; provided, however,
that the Theatre Subsidiaries may transfer and assign any
Guaranteed Lease or Transferred Lease in connection with any sale
of assets or Equity Interests permitted under Section 3.4.4,
3.4.5, 3.4.6 or 3.4.7 or 3.4.13.
3.6.2. Amendments, Renewals, Extensions, etc. No Theatre
Subsidiary shall (a) amend, modify or terminate any Guaranteed
Lease or Transferred Lease if, as a result of such amendment,
modification or termination, Harcourt's liability with respect to
such Guaranteed Lease or Transferred Lease shall be increased or
the time period for which Harcourt has any liability for such
Guaranteed Lease or Transferred Lease shall be extended or
(b) renew or extend the term of any Guaranteed Lease or
Transferred Lease unless Harcourt shall not be liable for any
Theatre Subsidiary's obligations with respect to such renewed or
extended term.
3.7. Conduct of Theatre Business.
3.7.1. Theatre Subsidiaries. The Theatre Subsidiaries will
engage only in the business of owning and operating theatres for
motion picture exhibition and other activities incidental thereto;
provided, however, that Cinema Ventures may also engage in the
business of owning and operating full-service restaurants in its
theatres.
3.7.2. Theatre Business. The Company's motion picture
exhibition business in the United States and activities incidental
thereto will be conducted only by the Theatre Subsidiaries. The
Company shall own and hold all interests in (a) the Theatre
Subsidiaries which are not Foreign Subsidiaries directly or
indirectly through General Cinema Theatres, Inc. and (b) the
Theatre Subsidiaries which are Foreign Subsidiaries directly or
indirectly through General Cinema International, Inc.; provided,
however, that each of Knights Holding Corp., Knights Realty Corp.
and Knights Theatre Corp. may be owned indirectly by the Company
so long as it is inactive and does not engage in any operations or
activities or own any material assets.
3.8. No Extension of Credit Agreement. Prior to the date on
which the Intercreditor Agreement terminates, without the prior
written consent of Harcourt, the Company shall not (a) extend the
maturity date of any Financing Debt under the Credit Agreement or any
other Loan Document (as defined in the Credit Agreement) beyond
January 26, 2002 or (b) extend the term of the commitment of any
lender under the Credit Agreement or any other Loan Document (as
defined in the Credit Agreement) to make extensions of credit to the
Company or any of its Subsidiaries beyond January 26, 2002.
4. First Tier Covenants. The Company covenants that, at any time
when Consolidated Net Worth is less than the then Present Value Lease
Exposure, it will comply with the following provisions:
4.1. Consolidated Net Worth. Consolidated Net Worth shall at all
times equal or exceed the sum of (a) $135,000,000 plus (b) 50% of
Consolidated Net Income (if positive) for each fiscal year of the
Company ending on or after October 31, 1998.
4.2. Consolidated Adjusted Cash Flow to Consolidated Fixed
Charges. On the last day of each fiscal quarter of the Company,
Consolidated Adjusted Cash Flow during the period of four consecutive
fiscal quarters then ended shall equal or exceed 100% of Consolidated
Fixed Charges during such period of four consecutive fiscal quarters.
4.3. Consolidated Adjusted EBITDA to Consolidated Interest
Charges. On the last day of each fiscal quarter of the Company,
Consolidated Adjusted EBITDA during the period of four consecutive
fiscal quarters then ended shall equal or exceed 230% of Consolidated
Interest Charges during such period of four consecutive fiscal
quarters.
4.4. Consolidated Total Adjusted Debt to Consolidated Adjusted
EBITDA. On the last day of each fiscal quarter of the Company,
Consolidated Total Adjusted Debt shall not exceed 420% of
Consolidated Adjusted EBITDA during the period of four consecutive
fiscal quarters then ended.
4.5. Core Theatre Adjusted EBITDA to Core Theatre Fixed Charges.
On the last day of each fiscal quarter of the Company, Core Theatre
Adjusted EBITDA during the period of four consecutive fiscal quarters
then ended shall equal or exceed 105% of Core Theatre Fixed Charges
during such period of four consecutive fiscal quarters.
4.6. Problem Theatre Adjusted EBITDA. The portion of
Consolidated Adjusted EBITDA that is attributable to the Problem
Theatres owned by the Company or any of its Subsidiaries on October
31, 2000 shall not be less than negative $10,000,000 for the fiscal
year of the Company ending on October 31, 2000.
4.7. South American Adjusted EBITDA. On each of October 31, 1999
and October 31, 2000, South American Adjusted EBITDA during the
period of four consecutive fiscal quarters then ended shall equal or
exceed $1.
4.8. Investments and Acquisitions. On or prior to the Reset
Date, neither the Company nor any of its Subsidiaries shall have
outstanding, acquire, hold or commit itself to acquire any Investment
(including any Investment consisting of the acquisition of any
business), except the following:
4.8.1. Investments of the Company and its Subsidiaries
outstanding immediately prior to the date hereof; provided,
however, that unless permitted pursuant to Section 4.8.4, neither
the Company nor any of its Subsidiaries shall exercise any option
to make an Investment held by it prior to the date hereof.
4.8.2. Investments of the Company and its Subsidiaries in
the Theatre Subsidiaries (other than Cinema Ventures, Sundance and
their respective Subsidiaries).
4.8.3. Investments of the Company and its Subsidiaries in
Cash Equivalents.
4.8.4. Permitted Non-Theatre Investments of the Company,
GCCI and the Subsidiaries of GCCI; provided, however, that no such
Permitted Non-Theatre Investment shall be acquired if immediately
before or after giving effect to such Permitted Non-Theatre
Investment any First Tier Default or Default shall exist; and
provided, further, that the aggregate amount of all such Permitted
Non-Theatre Investments shall not exceed the total of (a)
$125,000,000 minus (b) the aggregate amount of Permitted Non-
Theatre Investments outstanding immediately prior to the date
hereof, including the Permitted Non-Theatre Investments listed on
Exhibit 4.8.4, plus (c) 50% of Cumulative Excess Theatre Cash Flow
plus (d) Cumulative Net Investment Cash Flow.
4.8.5. Investments of the Company and its Majority-Owned
Subsidiaries in Cinema Ventures, Sundance or any of their
respective Subsidiaries; provided, however, that no such
Investment shall be acquired if immediately before or after giving
effect to such Investment any First Tier Default or Default shall
exist; and provided, further, that the aggregate amount of all
such Investments after the date hereof shall not exceed
$25,000,000.
4.9. Capital Expenditures. On or prior to the Reset Date,
neither the Company nor any of its Majority-Owned Subsidiaries shall
make any Capital Expenditures, except for Capital Expenditures in an
aggregate amount not to exceed the lesser of (a) the aggregate amount
of Capital Expenditures which the Company and its Majority-Owned
Subsidiaries are permitted to make under the Credit Agreement, as
amended and in effect from time to time, and (b) the sum of (i) the
aggregate amount of Capital Expenditures which the Company and its
Majority-Owned Subsidiaries are permitted to make under the Credit
Agreement as in effect on the date hereof, plus (ii) $10,000,000.
5. Second Tier Covenants. The Company covenants that it will, and
it will cause its Subsidiaries to, comply with the provisions of this
Section 5 during the period from the date on which any First Tier
Default occurs to the date on which the Company is in compliance with
each of the provisions of Section 4 as are then applicable.
5.1. Investments and Acquisitions. Neither the Company nor any
of its Subsidiaries shall have outstanding, acquire, hold or commit
itself to acquire any Investment (including any Investment consisting
of the acquisition of any business), except the following:
5.1.1. Investments of the Company and its Subsidiaries
outstanding immediately prior to the date of such First Tier
Default; provided, however, that unless permitted pursuant to
Section 5.1.6, neither the Company nor any of its Subsidiaries
shall exercise any option to make an Investment held by it prior
to the date of such First Tier Default.
5.1.2. Cash equity investments of the Company in, and loans
from the Company to, Theatre Subsidiaries; provided, however, that
the proceeds of such Investments and loans shall be applied by the
Theatre Subsidiaries solely as provided in Section 5.5.
5.1.3. Loans from Non-Theatre Subsidiaries to the Company
and the Theatre Subsidiaries; provided, however, that (a) in the
case of loans to the Company, (i) such loans shall be subordinated
on terms satisfactory to Harcourt to the prior payment of the
Obligations and (ii) the proceeds of such loans shall be used
solely to pay the Obligations or to make Investments in Theatre
Subsidiaries permitted by Section 5.1.2 and (b) in the case of
loans to the Theatre Subsidiaries, the proceeds of such loans
shall be applied by the Theatre Subsidiaries solely as provided in
Section 5.5.
5.1.4. Loans from Theatre Subsidiaries to other Theatre
Subsidiaries; provided, however, that the proceeds of such loans
shall be applied by the Theatre Subsidiaries solely as provided in
Section 5.5.
5.1.5. Investments of the Company and its Subsidiaries in
Cash Equivalents.
5.1.6. Follow-on equity Investments of the Company and the
Non-Theatre Subsidiaries which maintain the proportionate equity
interest of the Company or any Non-Theatre Subsidiary in Persons
that are not Wholly-Owned Subsidiaries in which the Company or
such Non-Theatre Subsidiary held an equity Investment immediately
prior to the date of such First Tier Default; provided, however,
that the aggregate amount of all such follow-on Investments made
during each period when the provisions of Section 5 apply shall
not exceed $10,000,000.
5.2. Financing Debt. Neither the Company nor any of its
Subsidiaries shall create, incur, assume or otherwise become or
remain liable with respect to any Financing Debt, except the
following:
5.2.1. Financing Debt outstanding immediately prior to such
First Tier Default.
5.2.2. Financing Debt of the Company incurred under the
Credit Agreement after such First Tier Default; provided, however,
that the aggregate amount of Financing Debt incurred pursuant to
this Section 5.2.2 shall not exceed $5,000,000.
5.2.3. Financing Debt consisting of inter-company loans and
advances among the Company and its Subsidiaries which are not
prohibited by Section 5.1.
5.2.4. Additional Financing Debt of the Company consisting
of Indebtedness for borrowed money, the proceeds of which are used
to finance Investments permitted by Section 5.1.6; provided,
however, that the aggregate amount of Financing Debt outstanding
pursuant to this Section 5.2.4 shall not at any one time exceed
$10,000,000.
5.3. Distributions. Neither the Company nor any of its
Subsidiaries shall make any Distribution, except the following:
5.3.1. Distributions by Non-Theatre Subsidiaries to the
Company or any Wholly-Owned Subsidiary of the Company.
5.3.2. Distributions in cash by any Theatre Subsidiary to
its equityholders which (a) are in proportion to the respective
Equity Interests of such Subsidiary owned by such equityholders or
(b) are disproportionately favorable to the Company or any of its
other Subsidiaries based on the respective Equity Interests owned
by the equityholders of such Subsidiary; provided, however, that
the Company shall use the proceeds of all such Distributions
received by the Company to make: (i) payments of principal of and
interest on Financing Debt owing to the lenders under the Credit
Agreement; (ii) regularly scheduled payments of principal of and
interest on Financing Debt owing to non-Affiliates and permitted
under Section 5.2.1 as required by the terms of such Financing
Debt as in effect immediately prior to the date of such First Tier
Default; (iii) regularly scheduled payments of principal of and
interest on Financing Debt permitted under Section 5.2.4;
(iv) payments of general and administrative expenses, taxes,
assessments and other expenses (other than principal of and
interest on Financing Debt) incurred in the ordinary course of
business consistent with past practice; or (v) payments to
Harcourt pursuant to Sections 2, 7.2 or 9.
5.4. Capital Expenditures. Neither the Company nor any of its
Subsidiaries shall make any Capital Expenditures, except (a) Capital
Expenditures necessary to (i) maintain facilities operated by the
Company and its Subsidiaries immediately prior to the date of such
First Tier Default or (ii) equip new theatres under commitments made
by Theatre Subsidiaries prior to the date of such First Tier Default
with customary theatre equipment and facilities and (b) Capital
Expenditures made for purposes of remaining competitive with other
theatre operators; provided, however, that the aggregate amount of
such Capital Expenditures made by the Company and its Subsidiaries at
any time that the provisions of this Section 5 apply shall not exceed
the amount equal to the product of (A) $5,000,000 multiplied by (B)
the sum of (1) one plus (2) the percentage increase (expressed as a
decimal) in the PPI during the period from December 31, 1993 to the
month immediately preceding the date of such First Tier Default; and
provided, further, that in the event that the provisions of this
Section 5 apply during two or more nonconsecutive periods during any
12-month period, the aggregate amount of such Capital Expenditures
made during such 12-month period shall not exceed the product of
(x) $5,000,000 multiplied by (y) the sum of (1) one plus (2) the
percentage increase in the PPI during the period from December 31,
1993 to the month immediately preceding the commencement of such 12-
month period. For purposes of this Section 5.4, Capital Expenditures
to increase the number of auditoriums in a facility or otherwise
expand such facility or to improve the quality of seats, carpeting,
refreshment stands or other amenities within a facility may only be
made for purposes of remaining competitive with other theatre
operators and shall not be considered Capital Expenditures made
solely to maintain facilities pursuant to clause (a)(1) above.
5.5. Payment of Theatre Obligations. The Theatre Subsidiaries
shall use cash generated from operations, cash reserves, proceeds of
borrowings and other funds of the Theatre Subsidiaries only to pay
obligations of the Theatre Subsidiaries under leases of real
property, (b) to make Distributions permitted under Section 5.3.2,
(c) to make Capital Expenditures permitted under Section 5.4, (d) to
make Investments permitted under Section 5.1.4 and (e) to pay
accounts payable, taxes, assessments and other expenses of the
Theatre Subsidiaries incurred in the ordinary course of business.
6. Representations and Warranties. In order to induce Harcourt to
enter into this Agreement, the Company represents and warrants as
follows:
6.1. Organization and Business.
6.1.1. The Company. The Company is a duly organized and
validly existing corporation, in good standing under the laws of
Delaware, with all power and authority, corporate or otherwise,
necessary to (a) enter into and perform this Agreement, (b) grant
the security interests in the Collateral to secure the Obligations
and (c) own its properties and carry on the business now conducted
or proposed to be conducted by it.
6.1.2. Subsidiaries. Each Subsidiary of the Company is duly
organized, validly existing and in good standing under the laws of
the jurisdiction in which it is organized, with all power and
authority, corporate or otherwise, necessary to own its properties
and carry on the business now conducted or proposed to be
conducted by it. Exhibit 6.1.2A lists each Theatre Subsidiary as
of the date hereof. Exhibit 6.1.2B lists each Pledged Theatre
Subsidiary as of the date hereof.
6.1.3. Qualification. Each of the Company and its
Subsidiaries is duly and legally qualified to do business as a
foreign corporation or other entity and is in good standing in
each state or jurisdiction in which such qualification is required
and is duly authorized, qualified and licensed under all laws,
regulations, ordinances or orders of public authorities, or
otherwise, to carry on its business in the places and in the
manner in which it is conducted, except for failures to be so
qualified, authorized or licensed which would not in the aggregate
have, or create a material risk of having, any material adverse
effect on the Company and its Subsidiaries taken as a whole.
6.2. Authorization and Enforceability. The Company has taken all
corporate action required to execute, deliver and perform this
Agreement. No consent of stockholders of the Company is necessary in
order to authorize the execution, delivery or performance of this
Agreement. This Agreement constitutes the legal, valid and binding
obligation of the Company and is enforceable against the Company in
accordance with its terms.
6.3. No Legal Obstacle to Agreements. Neither the execution and
delivery of this Agreement, nor the securing of the Obligations with
the Collateral, nor the consummation of any transaction referred to
in or contemplated by this Agreement, nor the fulfillment of the
terms hereof or of any other agreement or instrument contemplated by
this Agreement, has constituted or resulted in or will constitute or
result in:
(a) any breach or termination of the provisions of any
agreement, instrument, deed or lease to which the Company or any
of its Subsidiaries is a party or by which it is bound, or of the
charter or by-laws of the Company or any of its Subsidiaries;
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to the Company
or any of its Subsidiaries;
(c) the creation under any agreement, instrument, deed or
lease of any Lien (other than Liens on the Collateral which secure
the Obligations) upon any of the assets of the Company or any of
its Subsidiaries; or
(d) any redemption, retirement or other repurchase
obligation of the Company or any of its Subsidiaries under any
charter, by-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any
other Person is required to be obtained or made by the Company in
connection with the execution, delivery and performance of this
Agreement, the transactions contemplated hereby or the securing of
the Obligations with the Collateral (other than filings necessary to
perfect Harcourt's security interest in the Collateral).
6.4. Delivery of Collateral. The Company has delivered to
Harcourt in pledge as part of the Collateral certificates
representing all the Equity Interests owned by the Company in the
Pledged Theatre Subsidiaries listed on Exhibit 6.1.2B, accompanied by
stock transfer powers therefor executed by the Company.
7. Defaults.
7.1. Events of Default. The following events are referred to as
"Events of Default":
7.1.1. Payment. The Company shall fail to make any payment
in respect of amounts required under Section 2 as the same shall
become due.
7.1.2. Specified Covenants. The Company or any of its
Subsidiaries shall fail to perform or observe any of the
provisions of Sections 3.2 through 3.7 or, if applicable, Section
5.
7.1.3. Other Covenants. The Company or any of its
Subsidiaries shall fail to perform or observe any other covenant,
agreement or provision to be performed or observed by it under
this Agreement (other than Section 4), and such failure shall not
be rectified or cured to the written satisfaction of Harcourt
within 30 days after the earlier of (a) notice thereof by Harcourt
to the Company or (b) the date on which the Company shall have
actual knowledge thereof.
7.1.4. Representations and Warranties. Any representation
or warranty of or with respect to the Company or any of its
Subsidiaries made to Harcourt in, pursuant to or in connection
with this Agreement shall be materially false on the date as of
which it was made.
7.1.5. Cross-Defaults, etc. The Company or any of its
Subsidiaries shall fail to make any payment when due (after giving
effect to any applicable grace periods) in respect of any
Financing Debt outstanding in an aggregate amount of principal and
accrued interest exceeding $1,000,000;
(a) the Company or any of its Subsidiaries shall fail to
perform or observe the terms of any agreement relating to such
Financing Debt, and such failure shall continue, without having
been duly cured, waived or consented to, beyond the period of
grace, if any, specified in such agreement, and such failure shall
permit the acceleration of such Financing Debt;
(b) all or any part of such Financing Debt of the Company or
any of its Subsidiaries shall be accelerated or become due or
payable prior to its stated maturity (except with respect to
voluntary prepayments thereof) for any reason whatsoever;
(c) any Lien on any property of the Company or any of its
Subsidiaries securing any such Financing Debt shall be enforced by
foreclosure or similar action; or
(d) any holder of any such Financing Debt shall exercise any
right of rescission with respect to the issuance thereof.
7.1.6. Ownership; Liquidation; etc. Except as permitted by
Section 3.4:
(a) the Company shall cease to own directly all the capital
stock of the Theatre Subsidiaries that were Wholly-Owned
Subsidiaries as of the date of the Spinoff;
(b) any Person (other than a member of the ▇▇▇▇▇ Family
Group), together with "affiliates" and "associates" of such Person
within the meaning of Rule 12b-2 of the Exchange Act, shall become
the beneficial owner within the meaning of Rule 13d-3 of the
Exchange Act of more voting stock or total equity capital of the
Company than that beneficially owned by the ▇▇▇▇▇ Family Group and
such Person, together with such "affiliates" and "associates", is
also the beneficial owner within the meaning of Rule 13d-3 of the
Exchange Act of at least 15% of either the voting stock or total
equity capital of the Company; or
(c) the Company or any Theatre Subsidiary shall initiate any
action to dissolve, liquidate or otherwise terminate its
existence.
7.1.7. Enforceability, etc. This Agreement shall cease for
any reason (other than the scheduled termination thereof in
accordance with its terms) to be in full force and effect; or any
party hereto shall so assert in a judicial or similar proceeding;
or the security interests created by this Agreement shall cease to
be enforceable and of the same effect and priority purported to be
created hereby.
7.1.8. The Company or any of its Subsidiaries shall:
(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or
other governing body, the commencement of such a voluntary case;
(b) have filed against it a petition commencing an
involuntary case under the Bankruptcy Code which shall not have
been dismissed within 30 days after the date on which said
petition is filed, or file an answer or other pleading within said
30-day period admitting or failing to deny the material
allegations of such a petition or seeking, consenting to or
acquiescing in the relief therein provided;
(c) have entered against it an order for relief in any
involuntary case commenced under the Bankruptcy Code;
(d) seek relief as a debtor under any applicable law, other
than the Bankruptcy Code, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to or acquiesce
in such relief;
(e) have entered against it an order by a court of
competent jurisdiction (i) finding it to be bankrupt or insolvent,
(ii) ordering or approving its liquidation, reorganization or any
modification or alteration of the rights of its creditors or
(iii) assuming custody of, or appointing a receiver or other
custodian for, all or a substantial portion of its property; or
(f) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian
for, all or a substantial portion of its property.
7.2. Certain Payments Upon an Event of Default. If one or more
Events of Default shall occur and be continuing, then Harcourt may by
notice in writing to the Company require the Company immediately to
deposit with Harcourt in cash an amount equal to the then Present
Value Lease Exposure (which cash shall be held by Harcourt and
applied to the payment of the Company's Obligations under Section 2)
and thereupon such amount shall become immediately due and payable
without presentation, protest or further demand or notice of any
kind, all of which are hereby expressly waived; provided, however,
that if a Bankruptcy Default shall have occurred, such amount shall
automatically become immediately due and payable.
7.3. Enforcement of Payment; Collateral; Setoff. If any one or
more Payment Defaults shall occur, Harcourt (a) may proceed to
enforce payment of the Obligations in such manner as it may elect and
to realize upon any and all rights in the Collateral and (b) may
offset and apply toward the payment of the Obligations (and/or toward
the curing of any Event of Default) any Indebtedness from Harcourt to
the Company or any of its Subsidiaries, regardless of the adequacy of
any security for the Obligations. Harcourt shall have no duty to
determine the adequacy of any such security in connection with any
such offset.
7.4. Specific Performance; Exercise of Rights. If any one or
more Events of Default has occurred and is continuing or if one or
more Payment Defaults shall occur, Harcourt may proceed to protect
and enforce its rights by suit in equity, action at law and/or other
appropriate proceeding, either for specific performance of any
covenant or condition contained in this Agreement or in any
instrument or assignment delivered pursuant to this Agreement, or in
aid of the exercise of any power granted in this Agreement or any
such instrument or assignment.
7.5. Cumulative Remedies. To the extent not prohibited by
applicable law which cannot be waived, all of the Harcourt's rights
hereunder and under, or with respect to, each Guarantee and
Transferred Lease shall be cumulative.
7.6. Annulment of Defaults. A First Tier Default or a Payment
Default shall be deemed not to have occurred or to exist for any
purpose hereunder, and an Event of Default shall be deemed not to
have occurred and be continuing for any purpose hereunder, in each
case if Harcourt shall have waived it in writing, stated in writing
that it has been cured to Harcourt's reasonable satisfaction or
entered into an amendment to this Agreement which by its express
terms cures such First Tier Default or such Event of Default. No
such action by Harcourt shall extend to or affect any subsequent
First Tier Default or Event of Default or impair any rights of
Harcourt upon the occurrence thereof.
7.7. Waivers. To the extent that such waiver is not prohibited
by the provisions of applicable law that cannot be waived, the
Company waives:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions of
this Agreement), protests, notices of protest and notices of
dishonor;
(b) any requirement of diligence or promptness on the part
of Harcourt in the enforcement of its rights under this Agreement;
(c) any and all notices of every kind and description which
may be required to be given by any statute or rule of law; and
(d) any defense (other than indefeasible payment in full)
which it now or hereafter may have with respect to its liability
under this Agreement or with respect to the Obligations.
7.8. Obligations Absolute. The obligations of the Company under
Sections 2.1, 2.2, 7.2 and 9 are absolute and unconditional and,
without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(a) the invalidity, unenforceability or irrecoverability of
any obligations under any Guarantee, any Guaranteed Lease or any
Transferred Lease;
(b) any change in the terms of, any amendment to or any
waiver, consent or modification of, any Guarantee, any Guaranteed
Lease or Transferred Lease; or
(c) any other circumstance which might constitute a defense
available to, or a discharge of, Harcourt or the Company (other
than, in the case of the Company, indefeasible payment in full).
8. Security.
8.1. Collateral. As security for the payment and performance of
the Obligations, the Company hereby mortgages, pledges and
collaterally grants and assigns to Harcourt, and hereby creates a
security interest in favor of Harcourt in, all of the Company's
right, title and interest in and to (but none of its obligations or
liabilities with respect to) the items and types of present and
future property described in Sections 8.1.1 through 8.1.3, whether
now owned or hereafter acquired, all of which shall be included in
the term "Collateral":
8.1.1. Pledged Stock. All Equity Interests in any Pledged
Theatre Subsidiary. All such Equity Interests are collectively
referred to as the "Pledged Stock".
8.1.2. Pledged Rights. All rights to receive profits or
surplus of, or other Distributions (including income, return of
capital and liquidating distributions) from, any Pledged Theatre
Subsidiary that is a partnership, joint venture or limited
liability company, including any distributions by any such Person
to partners, joint venturers or members. All such rights are
collectively referred to as the "Pledged Rights".
8.1.3. Proceeds and Products. All proceeds, including
insurance proceeds, and products of the items of Collateral
described or referred to in Sections 8.1.1 and 8.1.2 and, to the
extent not included in the foregoing, all Distributions with
respect to the Pledged Securities.
8.2. Representations, Warranties and Covenants with Respect to
the Collateral. The Company hereby represents, warrants and
covenants that:
8.2.1. Pledged Stock. All shares of capital stock, limited
partnership interests, membership interests and similar Securities
included in the Pledged Stock are and shall be at all times duly
authorized, validly issued, fully paid and (in the case of capital
stock and limited partnership interests) nonassessable. The
Company will deliver to Harcourt certificates representing the
Pledged Stock, registered, if Harcourt so requests, in the name of
Harcourt or its nominee, as pledgee, or accompanied by a stock
transfer power executed in blank and, if Harcourt so requests,
with the signature guaranteed, all in form and manner reasonably
satisfactory to Harcourt. Pledged Stock that is not evidenced by
a certificate will be registered in the name of Harcourt or its
nominee, as pledgee, on the issuer's records, all in form and
substance reasonably satisfactory to Harcourt. Upon the
occurrence of a Default, Harcourt may transfer into its name or
the name of its nominee, as pledgee, any Pledged Securities.
8.2.2. No Liens or Restrictions on Transfer or Change of
Control. All Collateral shall be free and clear of any Liens and
restrictions on the transfer thereof, except for Liens permitted
by Section 3.2. None of the Pledged Stock is subject to any
options to purchase or similar rights of any Person. Except with
the written consent of Harcourt, neither the Company nor any
Pledged Theatre Subsidiary is, and neither Harcourt nor any
Pledged Theatre Subsidiary will be, party to or bound by any
agreement, license or franchise which restricts the change of
control or ownership of any Pledged Theatre Subsidiary.
8.2.3. Perfection of the Collateral. Upon Harcourt's
request from time to time, the Company will make, execute,
acknowledge and deliver, and file and record in the proper filing
and recording places, all such instruments, and will take all such
other action, as Harcourt deems advisable for confirming to it the
Collateral or to carry out any other purpose of this Agreement.
8.3. Administration of Collateral. The Collateral shall be
administered as follows, and if a Payment Default shall have
occurred, Section 8.4 shall also apply.
8.3.1. Distributions on Pledged Securities.
(a) Until an Event of Default shall occur and be continuing,
the Company shall be entitled, to the extent permitted by this
Agreement, to receive all Distributions on or with respect to the
Pledged Securities (other than Distributions constituting
additional Pledged Securities). All Distributions constituting
additional Pledged Securities will be retained by Harcourt (or if
received by the Company shall be held by the Company in trust and
shall be immediately delivered by the Company to Harcourt in the
original form received, endorsed in blank) and held by Harcourt as
part of the Collateral.
(b) If an Event of Default shall have occurred and be
continuing, all Distributions on or with respect to the Pledged
Securities shall be retained by Harcourt (or if received by the
Company shall be held by the Company in trust and shall be
immediately delivered by it to Harcourt in the original form
received, endorsed in blank) and held by Harcourt as part of the
Collateral or applied by Harcourt in accordance with Section
8.4.5.
8.3.2. Voting of Pledged Securities.
(a) Until an Event of Default shall occur and be continuing,
the Company shall be entitled to vote or consent with respect to
the Pledged Securities in any manner not inconsistent with the
terms of this Agreement, and Harcourt will, if so requested,
execute appropriate revocable proxies therefor.
(b) If an Event of Default shall have occurred and be
continuing, if and to the extent that Harcourt shall so notify the
Company in writing, only Harcourt shall be entitled to vote or
consent or take any other action with respect to the Pledged
Securities and the Company will, if so requested, execute or cause
to be executed appropriate proxies therefor.
8.4. Right to Realize upon Collateral. Except to the extent
prohibited by applicable law that cannot be waived, this Section 8.4
shall govern Harcourt's right to realize upon the Collateral if any
Payment Default shall have occurred. The provisions of this
Section 8.4 are in addition to any rights and remedies available at
law or in equity.
8.4.1. General Authority. To the extent specified in
written notice from Harcourt to the Company, the Company grants
Harcourt full and exclusive power and authority, subject to the
other terms hereof and applicable law, to take any or all of the
following actions (for the sole benefit of Harcourt but at the
Company's expense):
(a) to ask for, demand, take, collect, ▇▇▇ for and receive
all payments in respect of any Pledged Securities which the
Company could otherwise ask for, demand, take, collect, ▇▇▇ for
and receive for its own use.
(b) to extend the time of payment of Pledged Securities and
to make any allowance or other adjustment with respect thereto;
(c) to settle, compromise, prosecute or defend any action or
proceeding with respect to Pledged Securities and to enforce all
rights and remedies thereunder which the Company could otherwise
enforce.;
(d) to enforce the payment of any Pledged Securities, either
in the name of the Company or in its own name, and to endorse the
name of the Company on all checks, drafts, money orders and other
instruments tendered to or received in payment of any Collateral;
(e) to notify the third party payor with respect to any
Pledged Securities of the existence of the security interest
created hereby and to cause all payments in respect thereof
thereafter to be made directly to Harcourt; provided, however,
that whether or not Harcourt shall have so notified such payor,
the Company will at its expense render all reasonable assistance
to Harcourt in collecting such items and in enforcing claims
thereon; and
(f) to sell, transfer, assign or otherwise deal in or with
any Collateral or the proceeds thereof, as fully as the Company
otherwise could do.
8.4.2. Marshaling, etc. Harcourt shall not be required to
make any demand upon, or pursue or exhaust any of its rights or
remedies against, the Company or any guarantor, pledgor or any
other Person with respect to the payment of the Obligations or to
pursue or exhaust any of its rights or remedies with respect to
any collateral therefor or any direct or indirect guarantee
thereof. Harcourt shall not be required to marshal the Collateral
or any guarantee of the Obligations or to resort to the Collateral
or any such guarantee in any particular order, and all of its
rights hereunder or otherwise shall be cumulative. To the extent
it may lawfully do so, the Company hereby absolutely and
irrevocably waives and relinquishes the benefit and advantage of,
and covenants not to assert against Harcourt, any valuation, stay,
appraisement, extension, redemption or similar laws now or
hereafter existing which, but for this provision, might be
applicable to the sale of any Collateral made under the judgment,
order or decree of any court, or privately under the power of sale
conferred by this Agreement, or otherwise. Without limiting the
generality of the foregoing, the Company (a) agrees that it will
not invoke or utilize any law which might prevent, cause delay in
or otherwise impede the enforcement of the rights of Harcourt in
the Collateral, (b) waives all such laws and (c) agrees that it
will not invoke or raise as a defense to any enforcement by
Harcourt of its rights and remedies relating to the Collateral or
the Obligations any legal or contractual requirement with which
Harcourt may have in good faith failed to comply. In addition,
the Company hereby waives any right to prior notice (except to the
extent expressly required by this Agreement) or judicial hearing
in connection with foreclosure on or disposition of any
Collateral, including any such right which the Company would
otherwise have under the Constitution of the United States of
America or of any state or territory thereof or any other
jurisdiction.
8.4.3. Sales of Collateral. All or any part of the
Collateral may be sold for cash or other value in any number of
lots at public or private sale, without demand, advertisement or
notice; provided, however, that Harcourt shall give the Company 10
days' prior written notice of the time and place of any public
sale, or the time after which a private sale may be made, which
notice each of the Company and Harcourt hereby agrees to be
reasonable. At any sale or sales of Collateral, Harcourt or any
of its officers acting on its behalf, or Harcourt's assigns, may
bid for and purchase all or any part of the property and rights so
sold, may use all or any portion of the Obligations owed to
Harcourt as payment for the property or rights so purchased, and
upon compliance with the terms of such sale may hold and dispose
of such property and rights without further accountability to the
Company, except for the proceeds of such sale or sales pursuant to
Section 8.4.5. The Company acknowledges that any such sale will
be made by Harcourt on an "as is" basis with disclaimers of all
warranties, whether express or implied, to the extent permitted by
applicable law. The Company agrees that (a) Harcourt may, in its
sole discretion, restrict any such sale to one or more purchasers
who will agree to guarantee the payment and performance of the
Guaranteed Leases and Transferred Leases of Pledged Theatre
Subsidiaries, the Pledged Securities of which are included in such
sale and who, in the reasonable judgment of Harcourt, are
financially capable of performing such guarantee and (b) such
manner of disposition is commercially reasonable notwithstanding
the possibility that a substantially higher price might be
realized if such sale were not so restricted. The Company will
execute and deliver or cause to be executed and delivered such
instruments, documents, assignments, waivers, certificates and
affidavits, will supply or cause to be supplied such further
information and will take such further action as Harcourt shall
require in connection with any such sale.
8.4.4. Sale Without Registration. The Company agrees that
if, at any time when Harcourt shall determine to exercise its
rights hereunder to sell all or part of the Securities included in
the Collateral, the Securities in question shall not be
effectively registered under the Securities Act (or other
applicable law), Harcourt may, in its sole discretion, sell such
Securities by private or other sale not requiring such
registration in such manner and in such circumstances as Harcourt
may deem necessary or advisable in order that such sale may be
effected in a commercially reasonable manner in accordance with
applicable law without such registration and the related delays,
uncertainty and expense. Without limiting the generality of the
foregoing, in any event Harcourt may, in its sole discretion, (a)
approach and negotiate with a single purchaser or one or more
possible purchasers to effect such sale, (b) restrict such sale to
one or more purchasers each of whom will represent and agree that
such purchaser is purchasing for its own account, for investment
and not with a view to the distribution or sale of such Securities
and (c) cause to be placed on certificates representing the
Securities in question a legend to the effect that such Securities
have not been registered under the Securities Act (or other
applicable law) and may not be disposed of in violation of the
provisions thereof. The Company hereby agrees that such manner of
disposition is commercially reasonable, that it will upon
Harcourt's request give any such purchaser access to such
information regarding the issuer of the Securities in question as
Harcourt may reasonably request and that Harcourt shall not incur
any responsibility for selling all or part of the Securities
included in the Collateral at any private or other sale not
requiring such registration, notwithstanding the possibility that
a substantially higher price might be realized if the sale were
deferred until after registration under the Securities Act (or
other applicable law) or until made in compliance with certain
other rules or exemptions from the registration provisions under
the Securities Act (or other applicable law). The Company
acknowledges that there is no adequate remedy at law for breach by
it of this Section 8.4.4 and that such breach would not be
adequately compensable in damages and therefore agrees that this
Section 8.4.4 may be specifically enforced.
8.4.5. Application of Proceeds. The proceeds of all sales
and collections in respect of any Collateral or other assets of
the Company, all funds collected from the Company and any cash
contained in the Collateral, the application of which is not
otherwise specifically provided for herein, shall be applied as
follows:
(a) first, to the payment of the costs and expenses of such
sales and collections, the reasonable expenses of Harcourt and the
reasonable fees and expenses of its special counsel;
(b) second, any surplus then remaining to the payment of the
Obligations in such order and manner as Harcourt may in its sole
discretion determine; and
(c) third, any surplus then remaining shall be paid to the
Company, subject, however, to the rights of the holder of any then
existing Lien of which Harcourt has actual notice.
8.5. Custody of Collateral. Except as provided by applicable law
that cannot be waived, Harcourt will have no duty as to the custody
and protection of the Collateral, the collection of any part thereof
or of any income thereon or the preservation or exercise of any
rights pertaining thereto, including rights against prior parties,
except for the use of reasonable care in the custody and physical
preservation of any Collateral in its possession. Harcourt will not
be liable or responsible for any loss or damage to any Collateral, or
for any diminution in the value thereof, by reason of the act or
omission of any agent selected by Harcourt acting in good faith.
9. Expenses; Indemnity.
9.1. Expenses. The Company will pay:
(a) all recording and filing fees and transfer and
documentary stamp and similar taxes at any time payable in respect
of this Agreement or any Collateral; and
(b) all other reasonable expenses incurred by Harcourt in
connection with the enforcement of any rights hereunder, including
costs of collection and reasonable attorneys' fees and expenses.
9.2. General Indemnity. The Company hereby agrees to indemnify
Harcourt, each of the directors, officers, employees and agents of
Harcourt, and each Person, if any, who controls Harcourt (Harcourt
and each of such directors, officers, employees, agents and control
Persons is referred to as an "Indemnified Party"), and hold each of
them harmless from and against any and all claims, damages,
liabilities and reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnified Party may consult
in connection therewith and all reasonable expenses of litigation or
preparation therefor) which any Indemnified Party may incur or which
may be asserted against any Indemnified Party in connection with (a)
the existence or exercise of any security rights with respect to the
Collateral in accordance with this Agreement or (b) this Agreement or
any transaction contemplated hereby, except for (i) litigation
commenced by the Company against Harcourt which seeks enforcement of
any of the rights of the Company hereunder and is determined
adversely to Harcourt in a final nonappealable judgment and (ii) the
extent such claims, damages, liabilities and expenses result from the
gross negligence or willful misconduct of Harcourt.
10. Successors and Assigns. Any reference in this Agreement to any
party hereto shall be deemed to include the successors and assigns of
such party, and all covenants and agreements by or on behalf of the
Company or Harcourt that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns;
provided, however, that the Company may not assign its rights or
obligations under this Agreement.
11. Confidentiality. Harcourt agrees that it will make no
disclosure of confidential information furnished to it by the Company
or any of its Subsidiaries unless such information shall have become
public, except:
(a) in connection with operations under or the enforcement
of this Agreement;
(b) pursuant to any statutory or regulatory requirement or
any mandatory court order, subpoena or other legal process;
(c) to its counsel, auditors and other professional advisors
with an instruction to such Person to keep such information
confidential; and
(d) with the prior written consent of the Company, to any
other Person.
12. Notices. Except as otherwise specified in this Agreement, any
notice required to be given pursuant to this Agreement shall be given
in writing. Any notice, demand or other communication in connection
with this Agreement shall be deemed to be given if given in writing
(including telex, telecopy or similar teletransmission) addressed as
provided below (or to the addressee at such other address as the
addressee shall have specified by notice actually received by the
addressor), and if actually delivered in fully legible form to such
address (evidenced in the case of a telex by receipt of the correct
answerback).
If to Harcourt, to it at:
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to the Company, to it at:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
13. Course of Dealing; Amendments and Waivers. No course of dealing
between Harcourt, on one hand, and the Company, any of its
Subsidiaries or any of their respective Affiliates, on the other
hand, shall operate as a waiver of any of the rights of Harcourt
under this Agreement or with respect to the Obligations. The Company
acknowledges that if Harcourt, without being required to do so by
this Agreement, gives any notice or information to the Company, any
of its Subsidiaries or any of their respective Affiliates, Harcourt
shall not by implication have amended, waived or modified any
provision of this Agreement, or created any duty to give any such
notice or information or to obtain any such consent on any future
occasion. No delay or omission on the part of Harcourt in exercising
any right under this Agreement or with respect to the Obligations
shall operate as a waiver of such right or any other right hereunder
or thereunder. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future occasion.
No waiver, consent or amendment with respect to this Agreement shall
be binding unless it is in writing and signed by Harcourt and, in the
case of an amendment, signed by the Company. Although Harcourt shall
have no duty to agree to any waiver, consent or amendment with
respect to this Agreement, Harcourt shall give due consideration in
accordance with its business judgment to each request made by the
Company for any such waiver, consent or amendment.
Any waiver, consent, amendment or notice of termination entered
into by any party for any of the following purposes need not be
specifically authorized or approved by the Board of Directors of such
party (or any duly appointed committee of the Board of Directors of
such party with authority to act for such purposes) if such waiver,
consent, amendment or notice of termination is approved by an officer
of such party who is authorized to approve such type of waiver,
consent, amendment or notice of termination: (a) to cure any
ambiguity herein; (b) to cure, correct or supplement any defect or
inconsistent provision contained herein; or (c) to make any provision
in regard to matters or questions arising hereunder which is not
inconsistent with the provisions of this Agreement and which does not
adversely affect the interests of such party.
14. Termination and Defeasance. This Agreement may be terminated at
any time by Harcourt in its sole discretion by providing written
notice to the Company. This Agreement shall terminate at such time
as the Present Value Lease Exposure is less than $50,000,000 if at
such time no First Tier Default, Payment Default or Event of Default
has occurred and is continuing; provided, however, that Sections 2,
3.1, 3.6, 9, 10, 11 and 12 and Sections 7.3 through 7.8 (insofar as
they relate to Sections 2, 3.1 and 3.6) shall survive the termination
of this Agreement. Upon any such termination, the Collateral shall
revert to the Company and the right, title and interest of Harcourt
therein shall terminate. Thereupon, on the Company's demand and at
its cost and expense, Harcourt shall execute proper instruments,
acknowledging satisfaction of and discharging this Agreement, and
shall redeliver to the Company any Collateral then in its possession.
15. General. The invalidity or unenforceability of any provision
hereof shall not affect the validity or enforceability of any other
provision hereof. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and thereof and
supersedes all prior and current understandings and agreements,
whether written or oral, with respect to such subject matter. This
Agreement may be executed in any number of counterparts which
together shall constitute one instrument. This Agreement shall be
governed by and construed in accordance with the laws (other than the
conflict of laws rules) of The Commonwealth of Massachusetts, except
as may be required by the UCC with respect to matters involving the
perfection of Harcourt's Lien on the Collateral and the enforcement
of such Lien.
Each of the undersigned has caused this Agreement to be executed
and delivered by its duly authorized officer as an agreement under
seal as of the date first above written.
HARCOURT GENERAL, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President,
General Counsel and Secretary
GC COMPANIES, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President and General Counsel
Exhibit 1.3A
B MARKET THEATRES
Unit # Name Market
410 Pga West Palm
448 County Seat ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
488 University Park S. Bend
491 Kitsap Mall Seattle
507 Janaf Norfolk
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ No. Calif
544 The Galleria Ft. Lauderdale
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
720 Avco Los Angeles
761 Riviera Cinema Miami
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
875 Southlake ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
887 Colonial Orlando
893 Cielo Vista El Paso
894 Mall of Memphis Memphis
918 Gateway Center Seattle
925 Fountains 8 Ft. Lauderdale
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
939 Altamonte 8 Orlando
943 Hollywood Los Angeles
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Exhibit 1.3B
General Cinema Theatres
Threatre Listing
CORE THEATRES
Unit # Name Market
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
445 University Buffalo
453 Har Mar Minneapolis
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
472 Canton Cinema Detroit
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
496 Plaza At Chapel Akron
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ Indianapolis
▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ Wyoming Valley Scranton
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
700 Viewmont Scranton
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ - Premium Wauwatoosa
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇
841 Wyoming Valley Scranton
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. Indianapolis
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. Indianapolis
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
895 Woodgrove Fstvl Chicago
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
905 Bridgewater No. New Jersey
909 Novi Town Ctr Detroit
Exhibit 1.3B
General Cinema Theatres
Threatre Listing
CORE THEATRES (Continued)
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
924 Westgate, 6 Cleveland
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
942 Centennial Minneapolis
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇
952 Canton Cinema Canton
955 Pittsford Rochester
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
967 Mall of America Minneapolis
968 Clearwater Indianpolis
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
974 Yorktown Premium Chicago
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
981 Plymouth Meeting Philadelphia
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Exhibit 1.3C
PROBLEM THEATRES
Unit Name Market
412 Four Season Greensboro
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
431 Town East Dallas
435 Cinema V Ft. Worth
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
449 Galleria Dallas
457 Furneaux Creek Dallas
458 Raleigh Cinema Memphis
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Ft. Lauderdale
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ Columbus
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
493 Regency Augusta
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ Waukegan
713 Rutgers No. New Jersey
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
744 Galleria Cinema Los Angeles
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
860 Fremont Hub No. Calif
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 8 Atlanta
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PROBLEM THEATRES - (Continued)
Unit Name Market
879 Intracoastal Miami
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Sq. Ft. Worth
906 Cinema 10 Miami
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ 8 Seattle
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
912 Highland 10 Austin
913 Fallbrook 10 Los Angeles
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇. Lauderdale
922 Deerfield 8 Ft. Lauderdale
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928 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
947 Lake ▇▇▇▇ ▇▇▇▇▇▇▇
954 Market 7 Rochester
Exhibit 3.4.4
PERMITTED SALES OF THEATRE ASSETS
1. Novi Town Center
2. Lansing Mall West
3. Canton
4. Central Park Plaza
Exhibit 4.8.4
GC Companies, Inc.
Existing Permitted Non-theatre Investments
(In Thousands)
Global TeleSystems $ 25,000
GrandVision 8,179
American Capital Access 30,000
Kabelmedia 13,369
Fuelman 11,042
Teletrac 8,273
__________
$ 95,863
__________
Exhibit 6.1.2A
GC COMPANIES, INC.
THEATRE SUBSIDIARIES
General Cinema Theatres, Inc.
--------------------------------------
G.C. Theatre Corp. of California
GC Grill Holdings, Inc.
General Cinema Corp. of Georgia
General Cinema Corp. of Indiana
General Cinema Corp. of Louisiana
General Cinema Corp. of Maryland, Inc.
General Cinema Corp. of Massachusetts
General Cinema Corp. of Michigan
General Cinema Corp. of Minnesota, Inc.
General Cinema Corp. of New York, Inc.
General Cinema Corp. of North Carolina
General Cinema Corp. of ▇▇▇▇▇▇ ▇▇▇▇▇
General Cinema Corp. Parkway Pointe
General Cinema Corp. of Pennsylvania
General Cinema Corp. of Plymouth Meeting
General Cinema Corp. of Rhode Island
General Cinema Corp. of South Carolina
General Cinema Corp. of Tennessee
General Cinema Corp. of Texas
General Cinema Corp. of Virginia
General Cinema Corp. of Washington
General Cinema of Arizona, Inc.
General Cinema of New Mexico, Inc.
General Cinema Theatre of Columbia, Inc.
General Cinema Theatre of Yorktown, Inc.
General Cinema Theatres of Delaware, Inc.
General Cinema Theatres of Florida, Inc.
General Cinema Theatres of Illinois, Inc.
General Cinema Theatres of New Jersey, Inc.
General Cinema Theatres of Ohio, Inc.
General Cinema Specialty Film, Inc.
Joliet Cinema, Inc.
Louis Joliet Cinema, Inc.
General Cinema International, Inc.
------------------------------------
Arrendadora Inmobiliaria Cinematografica
S.A. de C.V. (Formerly
Cinemas United Artists,
S.A. de C.V.)
Operadora de Cinemas, S.A. de C.V.
Servicios Especializados Cinematograficos,
S.A. de C.V.
Hoyts General Cinema South America, Inc.
----------------------------------------
GCC/Hoyts Brazil, Inc.
General Cinema do Brasil Empreendimentos, Ltda.
Boca Holdings, Inc.
General Cinema de Argentina, S.A.
Hoyts Cinema de Argentina, S.A.
Exhibit 6.1.2B
GC COMPANIES, INC.
PLEDGED THEATRE SUBSIDIARIES
General Cinema Theatres, Inc.
--------------------------------
G.C. Theatre Corp. of California
GC Grill Holdings, Inc.
General Cinema Corp. of Georgia
General Cinema Corp. of Indiana
General Cinema Corp. of Louisiana
General Cinema Corp. of Maryland, Inc.
General Cinema Corp. of Massachusetts
General Cinema Corp. of Michigan
General Cinema Corp. of Minnesota, Inc.
General Cinema Corp. of New York, Inc.
General Cinema Corp. of North Carolina
General Cinema Corp. of ▇▇▇▇▇▇ ▇▇▇▇▇
General Cinema Corp. Parkway Pointe
General Cinema Corp. of Pennsylvania
General Cinema Corp. of Plymouth Meeting
General Cinema Corp. of Rhode Island
General Cinema Corp. of South Carolina
General Cinema Corp. of Tennessee
General Cinema Corp. of Texas
General Cinema Corp. of Virginia
General Cinema Corp. of Washington
General Cinema of Arizona, Inc.
General Cinema of New Mexico, Inc.
General Cinema Theatre of Columbia, Inc.
General Cinema Theatre of Yorktown, Inc.
General Cinema Theatres of Delaware, Inc.
General Cinema Theatres of Florida, Inc.
General Cinema Theatres of Illinois, Inc.
General Cinema Theatres of New Jersey, Inc.
General Cinema Theatres of Ohio, Inc.
General Cinema Specialty Film, Inc.
Joliet Cinema, Inc.
Louis Joliet Cinema, Inc.
General Cinema International, Inc.
----------------------------------
Arrendadora Inmobiliaria Cinematografica
S.A. de C.V. (Formerly Cinemas United Artists,
S.A. de C.V.)
Operadora de Cinemas, S.A. de C.V.
Servicios Especializados Cinematograficos,
S.A. de C.V.
Hoyts General Cinema South America, Inc.
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