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Exhibit 10.30
Debtor-in-Possession Credit Agreement
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DEBTOR-IN-POSSESSION CREDIT AGREEMENT
among
GC COMPANIES, INC., and
certain of its Subsidiaries listed on the signature page below
as Debtors-in-Possession,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
as DIP Lenders,
General Electric Capital Corporation
as DIP Administrative Agent,
General Electric Capital Corporation
as DIP Collateral Agent
and
Fleet National Bank
as DIP Documentation Agent
--------------------------------
Dated as of October __, 2000
--------------------------------
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ................................................................. 1
1.01 Certain Defined Terms ....................................................... 1
1.02 Computation of Time Periods ................................................. 20
1.03 Accounting Terms ............................................................ 20
1.04 Other Terms ................................................................. 20
1.05 Knowledge ................................................................... 20
ARTICLE II AMOUNTS AND TERMS OF DIP LOANS ............................................. 21
2.01 DIP Loan Facility ........................................................... 21
2.02 Promise to Pay; Evidence of Debt ............................................ 22
2.03 Use of Proceeds of DIP Loans ................................................ 22
2.04 Authorized Officers. Employees and Agents ................................... 23
2.05 Borrower's Representatives .................................................. 23
ARTICLE III PAYMENTS AND REPAYMENTS ................................................... 24
3.01 Prepayments; Reductions in DIP Loan Commitments ............................. 24
3.02 Payments .................................................................... 25
3.03 Taxes ....................................................................... 27
3.04 Increased Capital ........................................................... 29
ARTICLE IV INTEREST AND FEES .......................................................... 30
4.01 Interest on the DIP Loans and other DIP Obligations ......................... 30
4.02 Fees ........................................................................ 31
ARTICLE V CONDITIONS TO LOANS ......................................................... 32
5.01 Conditions Precedent to the Effective Date .................................. 32
5.02 Conditions Precedent to All DIP Loans ....................................... 33
ARTICLE VI REPRESENTATIONS AND WARRANTIES ............................................. 35
6.01 Representations and Warranties of the Borrowers ............................. 35
ARTICLE VII REPORTING COVENANTS ....................................................... 42
7.01 Financial Statements ........................................................ 42
7.02 Management Reports .......................................................... 44
7.03 Other Financial Information ................................................. 44
7.04 Events of Default ........................................................... 45
7.05 Lawsuits .................................................................... 45
7.06 Insurance ................................................................... 46
7.07 ERISA Notices ............................................................... 46
7.08 Environmental Reports; Notices .............................................. 47
7.09 Labor Matters ............................................................... 48
7.10 Other Information ........................................................... 48
7.11 Chapter 11 Reporting ........................................................ 49
ARTICLE VIII AFFIRMATIVE COVENANTS .................................................... 49
8.01 Existence, etc .............................................................. 49
8.02 Powers; Conduct of Business ................................................. 49
8.03 Compliance with Laws, Contractual Obligations, etc .......................... 49
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8.04 Payment of Taxes and Claims ................................................. 49
8.05 Insurance ................................................................... 50
8.06 Inspection of Property; Books and Records; Discussions ...................... 51
8.07 Tax Identification Numbers .................................................. 51
8.08 ERISA Compliance ............................................................ 51
8.09 Maintenance of Property ..................................................... 51
8.10 Condemnation ................................................................ 52
8.11 Maintenance of Licenses, Permits, etc ....................................... 52
8.12 Retention of Restructuring Professionals .................................... 52
8.13 Bank Accounts ............................................................... 52
ARTICLE IX NEGATIVE COVENANTS ......................................................... 53
9.01 Indebtedness ................................................................ 53
9.02 Sales of Assets ............................................................. 53
9.03 Liens ....................................................................... 54
9.04 Investments ................................................................. 54
9.05 Accommodation Obligations ................................................... 54
9.06 Restricted Junior Payments .................................................. 54
9.07 Change in Nature of Business ................................................ 54
9.08 Transactions with Affiliates ................................................ 54
9.09 Restriction on Fundamental Changes .......................................... 55
9.10 Sales and Leasebacks ........................................................ 55
9.11 Margin Regulations .......................................................... 55
9.12 ERISA ....................................................................... 55
9.13 Amendment of Governing Documents ............................................ 56
9.14 Environmental Liabilities ................................................... 56
9.15 No Activities Leading to Forfeiture ......................................... 56
9.16 Management Fees and Consulting Fee .......................................... 56
9.17 Capital Expenditures ........................................................ 56
9.18 DIP Financing ............................................................... 57
9.19 Alteration of Rights of DIP Lenders ......................................... 57
9.20 Chapter 11 Claims ........................................................... 57
9.21 Critical Vendor Payments .................................................... 57
9.22 Reclamation Claims .......................................................... 57
9.23 Sale or Pledge of Investment Portfolio ...................................... 57
ARTICLE X EVENTS OF DEFAULT; RIGHTS AND REMEDIES ...................................... 58
10.01 Events of Default ........................................................... 58
10.02 Rights and Remedies ......................................................... 61
ARTICLE XI THE AGENTS ................................................................. 62
11.01 Appointment ................................................................. 62
11.02 Nature of Duties ............................................................ 63
11.03 Rights, Exculpation. etc .................................................... 64
11.04 Reliance .................................................................... 64
11.05 Indemnification ............................................................. 65
11.06 The DIP Agents Individually ................................................. 65
11.07 Successor DIP Agents ........................................................ 65
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11.08 Relations Among DIP Lenders ................................................. 66
11.09 Concerning the DIP Collateral and the DIP Loan Documents. (a) Authority ..... 66
11.10 DIP Documentation Agent ..................................................... 68
ARTICLE XII MISCELLANEOUS ............................................................. 68
12.01 Assignments and Participations .............................................. 68
12.02 Relations Among DIP Lenders ................................................. 71
12.03 Joint and Several Liability ................................................. 71
12.04 Expenses .................................................................... 72
12.05 Indemnity ................................................................... 73
12.06 Change in Accounting Principles ............................................. 74
12.07 Setoff ...................................................................... 74
12.08 Ratable Sharing ............................................................. 75
12.09 Amendments and Waivers ...................................................... 75
12.10 Notices ..................................................................... 76
12.11 Survival of Warranties and Agreements ....................................... 76
12.12 Failure or Indulgence Not Waiver: Remedies Cumulative ....................... 77
12.13 Marshalling: Payments Set Aside ............................................. 77
12.14 Independence of Covenants ................................................... 77
12.15 Severability ................................................................ 77
12.16 Headings .................................................................... 77
12.17 Governing Law ............................................................... 77
12.18 Limitation of Liability ..................................................... 78
12.19 Successors and Assigns ...................................................... 78
12.20 Certain Consents and Waivers ................................................ 78
12.21 Counterparts; Effectiveness; Inconsistencies ................................ 80
12.22 Entire Agreement ............................................................ 80
12.23 Confidentiality ............................................................. 80
12.24 Orders ...................................................................... 80
SCHEDULES
Schedule 1.01(A) - Permitted Existing Liens
Schedule 1.05 - List of Officers
Schedule 5.01(A) - Consents
Schedule 6.01(C) - Ownership
Schedule 6.01(D) - No Conflicts
Schedule 6.01(E) - Governmental Consents
Schedule 6.01(I) - Affiliate Transactions
Schedule 6.01 (J(i)) - Litigation, Adverse Effects
Schedule 6.01(J(ii)) - Material Loss Contingencies Not Reflected in Financial
Statements
Schedule 6.01(L) - Payment of Taxes
Schedule 6.01(P) - Environmental Matters
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Schedule 6.01(Q) - ERISA Matters
Schedule 6.01 (S) - Labor Matters
Schedule 6.01(U) - Patents and Trademarks
Schedule 6.01(V) - Insurance
Schedule 6.01(Y) - Bank Accounts
EXHIBITS
Exhibit A - Commitments
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Promissory Notes
Exhibit D - Reserved
Exhibit E - Security Agreement
Exhibit F - Pledge Agreement
Exhibit G - Collateral Assignment of Leases
Exhibit H - Cash Collateral Pledge Agreement
Exhibit I - Form of Notice of Borrowing
Exhibit J - Form of Budget Compliance Certificate
Exhibit K - Compliance Certificate
Exhibit L - List of Closing Documents
Exhibit M - Interim Order
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DEBTOR-IN-POSSESSION CREDIT AGREEMENT
This DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as of October 13, 2000 (as
amended, supplemented or modified from time to time, the "Agreement") is entered
into (a) among GC COMPANIES, INC., and certain of its Subsidiaries listed on the
signature page below, as debtors-in-possession in cases pending under Chapter 11
of the Bankruptcy Code (collectively the "Borrowers"), (b) the financial
institutions from time to time parties hereto, whether by execution of this
Agreement or an Assignment and Acceptance (the "DIP Lenders"), (c) General
Electric Capital Corporation, in its capacity as administrative agent for the
DIP Lenders (in such capacity, the "DIP Administrative Agent"), (d) General
Electric Capital Corporation, in its capacity as collateral agent for the DIP
Lenders (in such capacity, the "DIP Collateral Agent") and (e) Fleet National
Bank as documentation agent for the DIP Lenders (in such capacity, the "DIP
Documentation Agent").
WHEREAS, on October 11, 2000 (the "Filing Date"), the Borrowers filed,
with the United States Bankruptcy Court for the District of Delaware, voluntary
petitions for relief under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code);
WHEREAS, the Borrowers have requested that the DIP Lenders from time
to time after the Effective Date and prior to the Termination Date make DIP
Loans to the Borrowers; and
WHEREAS, the DIP Lenders are willing, on the terms and conditions
hereinafter set forth to make such DIP Loans;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings, applicable both to the singular and
the plural forms of the terms defined:
"Accommodation Obligation" means any Contractual Obligation,
contingent or otherwise, of any Person with respect to any Indebtedness,
obligation or liability of another, if the primary purpose or intent thereof by
the Person incurring the Accommodation Obligation is to provide assurance to the
obligee of such Indebtedness, obligation or liability of another Person that
such Indebtedness, obligation or liability will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders
thereof will be protected (in whole or in part) against loss in respect thereof
including, without limitation, direct and indirect guarantees, endorsements
(except for collection or deposit in the ordinary course of business), notes
co-made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase or repurchase such Indebtedness, obligation
or liability or any security therefor or to
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provide funds for the payment or discharge thereof, agreements to maintain
solvency, assets, level of income, or other financial condition, and agreements
to make payment other than for value received.
"Affiliate" means, as applied to any specified Person, any
other Person that directly or indirectly controls, is controlled by, or is under
common control with, such specified Person. For purposes of this definition.
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any specified
Person, means the possession, directly or indirectly, (i) of the power to vote
ten percent (10%) or more of the Securities (or partnership or equity interests)
having voting power for the election of directors, managers or general partners
of such specified Person or otherwise to direct or cause the direction of the
management and policies of such specified Person, whether through the ownership
of voting Securities (or partnership or equity interests) or by contract or
otherwise or (ii) of ownership of ten percent (10%) or more of Securities (or
partnership or equity interests) of any such Person; provided, however that for
the purpose of this Agreement, Harcourt General, Inc. shall not be considered an
Affiliate of the Borrowers so long as all dealings between the Borrowers and
Harcourt General, Inc. continue to be approved by an independent committee of
the Board of Directors of the Company.
"Agreement" has the meaning ascribed to such term in the
preamble hereto.
"Applicable Margin" means a rate equal to two percent (2.0%)
per annum.
"Approved Fund" has the meaning ascribed to such term in
Section 12.01(b).
"Asbestos Containing Material" means any material containing
more than one percent (1%) asbestos by weight.
"Asset Sale" means any sale, conveyance, transfer, lease,
sublease or other disposition of assets or property of any Borrower.
"Assignment and Acceptance" means an Assignment and
Acceptance substantially in the form of Exhibit B attached hereto and made a
part hereof (with blanks appropriately completed) delivered to the DIP
Administrative Agent in connection with an assignment of a DIP Lender's interest
under this Agreement in accordance with the provisions of Section 12.01.
"Availability" means, at any particular time, the amount by
which the Commitments at such time exceed the DIP Credit Obligations at such
time.
"Bankruptcy Code" has the meaning ascribed thereto in the
first recital.
"Bankruptcy Court" means the United States Bankruptcy Court
for the District of Delaware or such other court as shall have jurisdiction over
the Chapter 11 Cases.
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"Base Rate" means, on any date, a fluctuating interest rate
per annum (rounded upward, if necessary, to the next highest 1/16 of 1%) equal
to the higher of:
(a) the rate of interest then most recently established by
Fleet National Bank at its head office in Boston, Massachusetts as its base rate
for Dollars loaned in the United States, in effect on such date; and
(b) the Federal Funds Rate in effect on such date plus -1/2
of 1%.]
The Base Rate is not necessarily intended to be the lowest rate of interest
determined by Fleet National Bank in connection with extensions of credit.
"Benefit Plan" means a defined benefit plan as defined in
Section 3(5) of ERISA (other than a Multiemployer Plan) in respect of which any
GC Party or any ERISA Affiliate is, or within the immediately preceding six (6)
years was at the time it was an ERISA Affiliate, an "employer" as defined in
Section 3(5) of ERISA.
"Board of Directors" means the board of directors or
equivalent governing body of a Person (or the general partner of such Person, as
the case may be), or any committee thereof duly authorized to act on behalf of
such board of directors or equivalent governing body.
"Borrowers" has the meaning ascribed to such term in the
preamble hereto.
"Borrowing" means a borrowing of a DIP Loan hereunder.
"Budget" means the Closing Budget and each Weekly Budget.
"Budget Compliance Certificate" means a written certificate,
substantially in the form of Exhibit J attached hereto and made a part hereof,
which has been signed and delivered by the Chief Financial Officer to the DIP
Agents and each of the DIP Lenders stating that (a) the proceeds of the DIP
Loans during all prior Budget Periods were utilized in accordance with the
Closing Budget, the Orders and the terms of this Agreement, (b) the proceeds of
the DIP Loans to be expended during the upcoming Budget Period are for one of
the types of expenditures set forth in the Closing Budget and in compliance with
the maximum amounts permitted to be expended hereunder for the relevant Budget
Period, and (c) no Default or Event of Default has occurred, or, if a Default or
Event of Default has occurred, a description of such Default or Event of Default
along with details regarding the remedial actions being undertaken.
"Budget Period" has the meaning ascribed thereto in the
definition of "Closing Budget."
"Budget Term" means the period commencing on the Filing Date
and ending on the Maturity Date.
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"Business" means the businesses of the Borrowers and their
Subsidiaries on the date hereof and any business related, ancillary or
complementary thereto, or which is an extension thereof.
"Business Day" means a day, in the applicable local time,
which is not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other governmental action to close Norwalk,
Connecticut or Boston, Massachusetts.
"Capital Expenditures" means, for any period, the aggregate
of all expenditures (whether paid in cash or other assets or accrued as a
liability (but without duplication) during such period that, in conformity with
GAAP, are required to be included in or reflected by a GC Party's fixed asset
account as reflected in its balance sheets; provided, however, that Capital
Expenditures shall include, whether or not such a designation would be in
conformity with GAAP, (A) that portion of Capital Leases which is capitalized on
the balance sheet of such GC Party and (B) expenditures for Equipment which is
purchased simultaneously with the trade-in of existing Equipment owned by a GC
Party to the extent that the gross purchase price of the purchased Equipment
exceeds the book value of the Equipment being traded in at such time; provided
further, that Capital Expenditures shall exclude, whether or not such a
designation would be in conformity with GAAP, any expenditures made with the
proceeds, damages or awards under any policy of insurance with respect to any
casualty or other damage or defect or the proceeds of any taking by reason of
any public improvement or condemnation proceeding or transfer.
"Capital Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" means, with respect to any Person, any
capital stock of such Person, regardless of class or designation, and all
warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.
"Carve-Out" has the meaning ascribed thereto in the Interim
Order.
"Cash Collateral Pledge Agreement" means the Cash Collateral
Pledge and Assignment Agreement, substantially in the form of Exhibit H attached
hereto and made a part hereof, as such Cash Collateral Pledge and Assignment
Agreement may be amended, supplemented or otherwise modified from time to time.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one (1) year after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard &
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Poor's Corporation or ▇▇▇▇▇'▇ Investors Services, Inc. (or, if at any time
neither Standard & Poor's Corporation nor ▇▇▇▇▇'▇ Investors Services, Inc. shall
be rating such obligations, then from such other nationally recognized rating
services reasonably acceptable to the DIP Administrative Agent) and not listed
in Credit Watch published by Standard & Poor's Corporation; (iii) commercial
paper, other than commercial paper issued by any GC Party or any of their
Affiliates, maturing no more than ninety (90) days after the date of creation
thereof and, at the time of acquisition, having a rating of at least aaa from
either Standard & Poor's Corporation or P-1 from Moody's Investor's Service,
Inc. (or, if at any time neither Standard & Poor's Corporation nor ▇▇▇▇▇'▇
Investors Service, Inc. shall be rating such obligations, then the highest
rating from such other nationally recognized rating services reasonably
acceptable to the DIP Administrative Agent); (iv) domestic and Eurodollar
certificates of deposit or time deposits or bankers' acceptances maturing within
ninety (90) days after the date of acquisition thereof issued by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia or Canada having combined capital and
surplus of not less than $250,000,000; (v) repurchase obligations of the type
referred to in clauses (i) through (iv) above; and (vi) money market and mutual
funds substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (y) above and cash.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.Sections 9601 et seq. any
amendments thereto, any successor statutes, and any regulations promulgated
thereunder.
"Chapter 11 Cases" means the Chapter 11 Cases of the
Borrowers jointly administered under Case No. _______________ in the Bankruptcy
Court.
"Chief Financial Officer" means the chief financial officer
of the Company.
"Claim" means any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.
"Closing Budget" means a line item budget detailing
projected cash receipts and disbursements for the Borrowers for the Budget Term
and comprised of forecasts for the initial twelve weeks on a weekly basis and
for the following three months on a monthly basis (each such period, a "Budget
Period"), as modified in accordance with Section 7.01(f), and as may be adjusted
or modified from time to time in the DIP Agents' and Requisite DIP Lenders'
reasonable discretion.
"Closing Date" means October __, 2000.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute and any regulations or guidelines
promulgated thereunder.
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"Collateral Assignment of Leases" means the Collateral
Assignment of Leases of even date herewith in substantially the form of Exhibit
G attached hereto.
"Commission" means the Securities and Exchange Commission
and any Person succeeding to the functions thereof.
"Commitment" means, with respect to any DIP Lender, the
obligation of such DIP Lender to make DIP Loans pursuant to the terms of this
Agreement, and which shall not exceed the principal amount set forth opposite
such DIP Lender's name on Exhibit A attached hereto or the signature page of the
Assignment and Acceptance by which it became (or becomes) a DIP Lender, and
"Commitments" means the aggregate principal amount of the Commitments of all the
DIP Lenders, the maximum amount of which shall not exceed $45,000,000.
"Commitment Fee Rate" means a rate equal to one-half of one
percent (1/2 of 1%) per annum.
"Company" means GC Companies, Inc. a Delaware Corporation.
"Compliance Certificate" has the meaning ascribed to such
term in Section 7.0 1(d).
"Consummation Date" means, with respect to a Reorganization
Plan, the earlier of the date on which (i) the effective date of such
Reorganization Plan occurs or (ii) "substantial consummation" (as defined in
Section 1101(2) of the Bankruptcy Code) of such Reorganization Plan shall have
occurred.
"Contaminant" means any waste, pollutant, hazardous
substance, extremely hazardous substance, toxic substance, hazardous waste,
special waste, infectious, biohazardous or medical waste, petroleum or
petroleum-derived substance or waste, any radioactive material, including but
not limited to, any source, special nuclear or by-product material as defined at
42 U.S.C. Section 2011 et seq., as amended or hereafter amended, asbestos,
polychlorinated biphenyls ("PCBs"), or any constituent of any such substance or
waste, and includes but is not limited to these terms as defined in any
applicable Environmental, Health or Safety Requirement of Law.
"Contractual Obligation" means, as applied to any Person,
any provision of any Securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument to which that Person is a party
or by which it or any of its properties is bound, or to which it or any of its
properties is subject.
"Customary Permitted Liens" means (i) Liens (other than
Environmental Liens and Liens in favor of the PBGC) with respect to the payment
of taxes, assessments or governmental charges or claims, in all cases which are
not yet due or are being contested in good
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faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of
suppliers, mechanics, carriers, materialmen, warehousemen or workmen
and other Liens imposed by law created in the ordinary course of
business in all cases for amounts which are not yet due or are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(iii) Liens (other than Environmental Liens and
any Lien in favor of the PBGC) incurred or deposits made in the
ordinary course of business in connection with worker's compensation,
unemployment insurance or other types of social security benefits or
to secure the performance of bids, tenders, sales, leases, contracts
(other than for the repayment of money), surety, appeal and
performance bonds, in all cases for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP; and
(iv) zoning restrictions, easements, licenses,
reservations, covenants, rights-of-way, utility easements, building
restrictions and other similar charges or encumbrances on the use of
Real Property which do not materially interfere with the ordinary
conduct of the business of the Borrowers and which do not materially
adversely affect the value of the Real Property.
"Debt" means, as applied to any Person at any time and
without duplication, all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments (ii) in respect of obligations
to redeem, repurchase or exchange any Securities of such Person or to pay
dividends in respect of such Securities (other than (A) dividends declared or
paid in additional shares of such Securities, (B) dividends where the failure to
pay would not give the holder of such Securities a cause of action for the
payment of money or for money damages against any GC Party or the right to have
such Securities redeemed, repurchased or exchanged by any GC Party), (iii) with
respect to letters of credit issued for such Person's account (to the extent not
accounted for in clause (i) above), (iv) to pay the deferred purchase price of
property or services, except accounts payable and accrued expenses arising in
the ordinary course of business or (v) in respect of Capital Leases or synthetic
leases.
"Default" means an event which, with the giving of notice or
the lapse of time, or both, would constitute an Event of Default.
"Default Rate" has the meaning ascribed to such term in
Section 4.01(c).
"DIP Administrative Agent" has the meaning ascribed to such
term in the preamble hereto.
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"DIP Administrative Agent's Account" means an account
maintained at the office of Bankers Trust, ABA #▇▇▇▇▇▇▇▇▇, or such other account
as the DIP Administrative Agent may from time to time specify in writing to the
Borrowers and the DIP Lenders.
"DIP Agents" means, collectively, the DIP Administrative
Agent and, the DIP Collateral Agent.
"DIP Collateral" means all property and interests in
property now owned or hereafter acquired by any Borrower in or upon which a Lien
is granted under any of the DIP Loan Documents or the Orders.
"DIP Collateral Agent" has the meaning ascribed to such term
in the preamble hereto.
"DIP Collateral Documents" means, collectively, the Security
Agreement, the Pledge Agreement, the Cash Collateral Pledge Agreement, the
Collateral Assignment of Leases, and the Orders.
"DIP Credit Obligations" means, at any particular time, the
sum of (i) the outstanding principal amount of the DIP Loans at such time, plus
(ii) Letter of Credit Obligations outstanding at such time.
"DIP Lenders" has the meaning ascribed to such term in the
preamble hereto.
"DIP Loan Documents" means this Agreement, the Note, the DIP
Collateral Documents, the Budget and all other certificates, instruments,
agreements and written Contractual Obligations between any GC Party and any DIP
Agent, or any DIP Lender delivered to either such DIP Agent or such DIP Lender
pursuant to or in connection with the transactions contemplated hereby, as such
documents, instruments, agreements, or written Contractual Obligations may be
amended or modified from time to time.
"DIP Loans" has the meaning ascribed to such term in Section
2.01(a).
"DIP Obligations" means all DIP Loans, advances, debts,
liabilities, obligations, covenants and duties owing by any GC Party to any DIP
Agent, any DIP Lender, or any Person entitled to indemnification pursuant to
Section 12.05 of this Agreement, of any kind or nature, present or future,
whether or not evidenced by any note, guaranty or other instrument, whether or
not for the payment of money, whether arising by reason of an extension of
credit, which loans advances, debts, obligations, covenants and duties arise
under this Agreement, the Note or any other DIP Loan Document, whether or not
for the payment of money, whether arising by reason of an extension of credit,
loan, guaranty, indemnification, foreign exchange contract or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired. The term includes. without limitation, all interest,
charges, expenses, fees, attorneys' fees and
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disbursements and any other sum chargeable to any GC Party under this Agreement,
the Note or any other DIP Loan Document.
"DOL" means the United States Department of Labor and any
Person succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United
States.
"Effective Date" means the date on which all of the
conditions precedent in Sections 5.01 and 5.02 have been satisfied.
"Eligible Assignee" means (i) a DIP Lender, an Affiliate of
a DIP Lender or an Approved Fund of a DIP Lender, (ii) an Existing Lender or an
Existing Lessor, or (iii) a commercial bank, lending institution, finance
company, insurance company, fund, or other financial institution that is
purchasing a proportionate assignment of DIP Loans (and Commitments) and is
otherwise reasonably acceptable to the DIP Agents.
"Environmental, Health or Safety Requirement of Law" means
any federal, state or local law, ordinance, rule, regulation, Permit, license or
other binding determination of any Governmental Authority relating to, imposing
liability or standards concerning, or otherwise addressing the environment,
health and/or safety, including but not limited to the Clean Air Act, the Clean
Water Act, RCRA, CERCLA, any so-called "Superfund" or "Superlien" law, the Toxic
Substances Control Act and OSHA, each as from time to time hereafter in effect.
"Environmental Lien" means a Lien in favor of any
Governmental Authority for (i) any liability under any Environmental, Health or
Safety Requirements of Law, or (ii) damages arising from, or costs incurred by
such Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable
requirement of law that conditions, restricts, prohibits or requires any
environmental notification or environmental disclosure triggered by the closure
of any Property or the transfer, sale or lease of any Property or deed or title
for any Property, including, but not limited to, any so-called "Environmental
Cleanup Responsibility Act" or "Responsible Property Transfer Act."
"Equipment" means a Person's present and future owned (i)
equipment and fixtures, including, without limitation, machinery, manufacturing,
distribution, selling, computer system, data processing and office equipment,
assembly systems, tools, molds, dies, fixtures, appliances, furniture,
furnishings, vehicles, vessels, aircraft, aircraft engines, and trade fixtures,
(ii) other tangible personal property, and (iii) any and all accessions, parts
and appurtenances attached to any of the foregoing or used in connection
therewith, and any substitutions therefor and replacements, products and
proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
15
"ERISA Affiliate" means any (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any GC Party, (ii) partnership, trade or business
(whether or not incorporated) which is under common control (within the meaning
of Section 414(c) of the Code) with any GC Party, (iii) member of the same
affiliated service group (as defined in Section 4 14(m) to the Code) as any GC
Party, any corporation described in clause (i) above or any partnership or trade
or business described in clause (ii) above or (iv) other Person which is
required to be aggregated with any GC Party pursuant to regulations promulgated
under Section 414(o) of the Code.
"ERISA Termination Event" means (i) any Reportable Event
with respect to any Benefit Plan, (ii) the withdrawal of a GC Party or an ERISA
Affiliate from a Benefit Plan during a plan year in which such GC Party or such
ERISA Affiliate was a "substantial employer" as defined in Section 4001 (a)(2)
of ERISA, (iii) the imposition of an obligation on any GC Party or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA, (iv) the institution by the PBGC or any similar
foreign governmental authority of proceedings to terminate any Benefit Plan or
Foreign Pension Plan (v) any event or condition which could reasonably
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan, (vi) a foreign
governmental authority shall appoint or institute proceedings to appoint a
trustee to administer any Foreign Pension Plan, or (vii) the partial or complete
withdrawal of any GC Party or any ERISA Affiliate from a Multiemployer Plan or a
Foreign Pension Plan.
"Event of Default" means any of the occurrences set forth in
Section 10.01 after the expiration of any applicable grace period and the giving
of any applicable notice, in each case as expressly provided in Section 10.01.
"Excess Collection Amount" means, on the last Business Day
of each week, after accounting for reasonably anticipated receipts and
disbursements (including professional fees) permitted in accordance with the
Closing Budget by the Borrowers on such Business Day, an amount equal to all
cash or Cash Equivalents collected (or to be collected) by the Borrowers in
excess of $4,000,000.
"Excluded Asset Sales" shall mean (a) asset sales of assets
with a fair market value of less than $1,000,000 individually and $5,000,000 in
the aggregate, (b) inventory sales to theater customers in the ordinary course
of business, and (c) sales of assets or leases of theaters to be closed;
provided, that such theaters do not operate at the locations listed in Exhibit B
to the Collateral Assignment of Leases.
"Existing Agents" means the agents under the Existing Credit
Agreement or the Existing Lease.
"Existing Collateral" means the collateral for the Existing
Credit Agreement or the Existing Lease.
16
"Existing Credit Agreement" means that certain Revolving
Credit Agreement dated as of January 26, 1999 by and among GC Companies, Inc.,
as borrower, certain lenders from time to time parties thereto, as lenders,
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. as syndication agent and arranger, Scotia
Bank as documentation agent, and BancBoston, N.A. as administrative agent.
"Existing Lease" means that certain Amended and Restated
Master Lease Agreement dated as of June 23, 1997 entered into between General
Cinema Theatres, Inc. and General Electric Capital Corporation, for Itself and
as Agent for Certain Participants.
"Existing Lenders" means the Lenders under the Existing
Credit Agreement.
"Existing Lessors" means the Lessor and assignees of the
Lessor under the Existing Lease.
"Existing Letters of Credit" means the letters of credit
issued pursuant to the Existing Credit Agreement that are outstanding as of the
date that the Final Order is effective.
"Existing Loans" means advances made previously under the
Existing Credit Agreement.
"Existing Obligations" means all obligations under the
Existing Credit Agreement or the Existing Lease.
"Facility Fee" has the meaning ascribed thereto in Section
4.02(a).
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day in New York, New York, for the next
preceding Business Day) in New York, New York by the Federal Reserve Bank of New
York, or if such rate is not so published for any day which is a Business Day in
New York, New York, the average of the quotations for such day on such
transactions received by the DIP Administrative Agent from three federal funds
brokers of recognized standing selected by the DIP Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"Filing Date" has the meaning ascribed thereto in the first
recital.
"Final Order" means an order of the Bankruptcy Court
approving on a final basis the financing under the DIP Loan Documents in form
and substance acceptable to the DIP Agents.
17
"Fiscal Year" means the fiscal year of the Borrowers and
their Subsidiaries ending on October 31 of each calendar year.
"Foreign Employee Benefit Plan" means any employee benefit
plan as defined in Section 3(3) of ERISA which is maintained or contributed to
for the benefit of the employees of the Borrower, any of its Subsidiaries or any
of its ERISA Affiliates, but which is not covered by ERISA pursuant to Section
4(b)(4) of ERISA.
"Foreign Pension Plan" means any Foreign Employee Benefit
Plan which under applicable local law is required to be funded through a trust
or other funding vehicle.
"Forfeiture Proceeding" means any action, proceeding or
investigation affecting any of the GC Parties before any court, governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or the receipt of notice by any such party that any of them is a
subject of any governmental inquiry or investigation, which may result in an
indictment of any of them or the seizure or forfeiture of any of their property.
"Funding Date" means the date of the funding of a DIP Loan.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants Standards Board or in
such other statements by such other entity as may be in general use by
significant segments of the accounting profession as in effect on the Effective
Date.
"GC Parties" means the Borrowers and their Subsidiaries.
"General Intangibles" means each Borrower's present and
future chose in action, causes of action and all other intangible personal
property of every kind and nature (other than Receivables), including without
limitation general intangibles, contracts, corporate or other business records,
designs, patents, patent applications, trademarks, trademark applications,
service marks, service ▇▇▇▇ applications, trade names, trade styles, trade
secrets, operating certificates, operating certificate applications, goodwill,
registrations, copyrights, licenses, franchises, permits, operating authorities,
agent and owner/operator contracts, certificates of public convenience, refunds
or reversions from any employee benefit plan or pension plan, covenants not to
compete, blueprints and other drawings, customer lists, tax refunds, tax refund
claims, rights and claims against carriers and shippers, and rights to
indemnification.
"Governing Documents" means, with respect to any
corporation, (i) the articles/certificate of incorporation (or the equivalent
organizational documents) of such corporation, (ii) the by-laws (or the
equivalent governing documents) of the corporation and (iii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any class or series of such corporation's capital stock; and,
with respect to any general partnership, (i) the partnership agreement (or the
equivalent organizational documents) of such partnership and (ii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; and, with respect to any
limited partnership, (i) the partnership agreement (or the equivalent
organizational documents) of
18
such partnership, (ii) a certificate of limited partnership (or the equivalent
organizational documents) and (iii) any document setting forth the designation,
amount and/or relative rights, limitations and preferences of any of the
partnership interests.
"Government" means the United States government or any
department, instrumentality or agency thereof, or any state government or any
department, instrumentality or agency thereof.
"Governmental Authority" means any nation or government, any
federal, state, local, foreign or other political subdivision thereof and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Holder" means any Person entitled to enforce any of the DIP
Obligations, whether or not such Person holds any evidence of Indebtedness,
including, without limitation, each DIP Agent and each DIP Lender.
"Indebtedness" means (without duplication), as applied to
any Person at any time, (a) all indebtedness, obligations or other liabilities
of such Person (i) for borrowed money or evidenced by debt securities,
debentures, acceptances, notes or other similar instruments, and any accrued
interest, fees and charges relating thereto, (ii) in respect of obligations to
redeem, repurchase or exchange any Securities of such Person or to pay dividends
in respect of such Securities (other than (A) dividends declared or paid in
additional shares of such Securities and (B) dividends where the failure to pay
would not give the holder of such Securities a cause of action for money damages
against any GC Party or the right to have such Securities redeemed, repurchased
or exchanged by any GC Party), (iii) with respect to letters of credit issued
for such Person's account, (iv) to pay the deferred purchase price of property
or services, except accounts payable and accrued expenses arising in the
ordinary course of business, (v) in respect of Capital Leases or (vi) which are
Accommodation Obligations; (b) all indebtedness, obligations or other
liabilities of such Person or others secured by a Lien on any property of such
Person, whether or not such indebtedness, obligations or liabilities are assumed
by such Person, all as of such time; (c) all indebtedness, obligations or other
liabilities of such Person in respect of any interest rate exchange, swap,
collar, cap, hedging or similar agreements and foreign exchange contracts, net
of liabilities owed to such Person by the counterparties thereon; (d) all
preferred stock subject (upon the occurrence of any contingency or otherwise) to
mandatory redemption and (e) all contingent Contractual Obligations or
Accommodation Obligation with respect to any of the foregoing.
"Indemnified Matters" has the meaning ascribed to such term
in Section 12.05.
"Indemnitees" has the meaning ascribed to such term in
Section 12.05.
"Interim Order" means an order of the Bankruptcy Court
substantially in the form of Exhibit M attached hereto and made a part hereof.
"Inventory" means a Borrower's present and future (i)
inventory, (ii) goods, merchandise and other personal property furnished or to
be furnished under any contract of
19
service or intended for sale or lease, and all goods consigned by such Borrower
to another Person and all other items which have previously constituted
Equipment but are then currently being held for sale or lease in the ordinary
course of such Borrower's business, (iii) raw materials, work-in-process and
finished goods, (iv) materials and supplies of any kind, nature or description
used or consumed in such Borrower's business or in connection with the
manufacture, production, packing, shipping, advertising, finishing or sale of
any of the property described in clauses (i) through (iii) above, (v) goods in
which such Borrower has a joint or other interest or right of any kind
(including, without limitation, goods in which such Borrower has an interest or
right as consignee), and (vi) goods which are returned to or repossessed by such
Borrower; in each case whether in the possession of such Borrower, a bailee, a
consignee, or any other Person for sale, storage, transit, processing, use or
otherwise, and any and all documents for or relating to any of the foregoing.
"Investment" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, issued by any other Person, (ii) any purchase by that
Person of all or substantially all of the assets of a business conducted by
another Person, and (iii) any direct or indirect loan, advance (other than
prepaid expenses, accounts receivable, advances to employees and similar items
made or incurred in the ordinary course of business as presently conducted) or
capital contribution by that Person to any other Person, including all
Indebtedness to such Person arising from a sale of property by such Person other
than in the ordinary course of its business. The amount of any Investment shall
be the original cost of such Investment, plus the cost of all additions thereto
less the amount of any return of capital or principal to the extent such return
is in cash with respect to such Investment without any adjustments for increases
or decreases in value or write-ups, write-downs or write-offs with respect to
such Investment.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Issuance Date" has the meaning ascribed to such term in
Section 2.02(c).
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive damages,
economic damages, consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation, attorney,
expert, engineering and consulting fees and costs and any fees and cost
associated with any investigation, feasibility, or Remedial Action studies),
fines, penalties and monetary sanctions, interest, direct or indirect, known or
unknown, absolute or contingent, past, present or future (in each case net of
insurance proceeds and excluding amounts for which a Person is fully indemnified
or for which a reimbursement escrow has been established).
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement, deposit arrangement,
security interest, encumbrance, lien (statutory or other), preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever in respect of any property of a Person, whether granted voluntarily
or imposed by law, and includes the interest of a lessor under a Capital Lease
or under any financing
20
lease having substantially the same economic effect as any of the foregoing and
the filing of any financing statement or similar notice, naming the owner of
such property as debtor, under the Uniform Commercial Code or other comparable
law of any jurisdiction.
"Margin Stock" means "margin stock" as such term is defined
in Regulation U.
"Material Adverse Change" means a material adverse change in
the financial condition of the Borrowers that results in either (a) the
Borrowers' inability, as a whole, to fulfill their obligations set forth herein,
or (b) any substantial decline of the value of the Borrowers, taken as a whole.
"Maturity Date" means October __, 2001.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by either any GC Party or any ERISA Affiliate, at
the time it was an ERISA Affiliate.
"Net Cash Proceeds" means with respect to any Asset Sale
(other than an Excluded Asset Sale), an amount equal to the cash proceeds of
such Asset Sale, net of (i) accountants' fees, brokerage, consultant and other
customary fees, underwriting commissions and other reasonable fees and expenses
actually incurred in connection therewith (but excluding any fees payable to an
Affiliate of any GC Party other than employee retention payments approved by the
court), (ii) taxes paid or reasonably estimated to be payable as a result
thereof, (iii) the amount of Indebtedness secured by a Lien on the asset being
sold that has been repaid with the proceeds of such Asset Sale, (iv) necessary
costs to assume leases and contracts under Section 365 of the Bankruptcy Code
relating to such sold asset and (v) other appropriate amounts that must be set
aside as reserves in accordance with GAAP as approved by the DIP Agents.
"Non-Excluded Taxes" has the meaning ascribed to such term
in Section 3.03(a).
"Note" means the promissory note of the Borrowers issued
pursuant to Section 2.03.
"Notice of Borrowing" means a notice substantially in the
form of Exhibit I attached hereto and made a part hereof.
"Officer's Certificate" means, with respect to any Person, a
certificate executed on behalf of such Person by (i) the chairman or
vice-chairman of such Person's board of directors or (ii) such Person's
president, any of its vice-presidents, its chief financial officer, vice
president of finance or its treasurer.
"Orders" means the Interim Order and the Final Order, as
either of such orders may be amended or modified from time to time in accordance
with the terms of this Agreement.
21
"OSHA" means the Occupational Safety and Health Act, 29
U.S.C.Sections 651 et seq., any amendments thereto, any successor statutes,
and any regulations promulgated thereunder.
"Other Taxes" has the meaning ascribed to such term in
Section 3.03(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Permits" means any permit, approval, authorization,
license, variance, or permission required from a Governmental Authority under an
applicable Environmental, Health or Safety Requirement of Law.
"Permitted Disposition" means an Asset Sale where (i)
Bankruptcy Court approval has been obtained, (ii) the Requisite DIP Lenders have
given their prior written consent, (iii) the Net Cash Proceeds of such Asset
Sale are applied as agreed upon by the Requisite DIP Lenders, (iv) the
consideration thereof that is not in the form of cash is pledged to the DIP
Collateral Agent, on terms and conditions, and pursuant to documentation,
satisfactory to the DIP Agents, in a manner whereby the DIP Collateral Agent has
a valid, perfected first priority Lien therein.
"Permitted Existing Liens" means the Liens on assets of any
GC Party identified as such on Schedule 1.01(A).
"Person" means any natural person, corporation, limited
partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust,
limited liability company or other organization, whether or not a legal entity,
and any Governmental Authority.
"Plan" means an employee benefit plan defined in Section
3(3) of ERISA in respect of which any GC Party or any ERISA Affiliate is, or
within the immediately preceding six (6) years was at the time it was an ERISA
Affiliate, an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially
in the form of Exhibit F attached hereto and made a part hereof, as such Pledge
Agreement may be amended, supplemented or otherwise modified from time to time.
"Process Agent" has the meaning ascribed to such term in
Section 12.20(a).
"Property" means any real or personal property, plant,
building, facility, structure, underground storage tank, equipment or unit, or
other asset owned, leased or operated by any GC Party (including any surface
water thereon and soil or groundwater thereunder).
"Pro Rata Share" means, with respect to any DIP Lender, the
percentage obtained by dividing with respect to a DIP Lender, such DIP Lender's
Commitment (or, if after the
22
Termination Date, the outstanding balances of such DIP Lender's DIP Loans) by
the aggregate amount of all DIP Lenders' Commitments (or, if after the
Termination Date, the outstanding balances of all DIP Loans).
"RCRA" means the Resource Conservation and Recovery Act, 42
U.S.C.Sections 6901 et seq. any amendments thereto, any successor statutes,
and any regulations promulgated thereunder.
"Real Property" means all of each Borrower's present and
future right, title and interest (including, without limitation, any leasehold
estate) in (i) any plots, pieces or parcels of land, (ii) any improvements,
buildings, structures and fixtures now or hereafter located or erected thereon
or attached thereto of every nature whatsoever (the rights and interests
described in clauses (i) and (ii) above being the "Premises"), (iii) all
easements, rights of way, gores of land or any lands occupied by streets, ways,
alleys, passages, sewer rights, water courses, water rights and powers, and
public places adjoining such land, and any other interests in property
constituting appurtenances to the Premises, or which hereafter shall in any way
belong, relate or be appurtenant thereto, (iv) all hereditaments, gas, oil,
minerals (with the right to extract, sever and remove such gas, oil and
minerals, and easements, of every nature whatsoever, located in or on the
Premises and (v) all other rights and privileges thereunto belonging or
appertaining and all extensions, additions, improvements, betterments, renewals,
substitutions and replacements to or of any of the rights and interests
described in clauses (iii) and (iv) above.
"Receivables" means each Borrower's present and future (i)
accounts, (ii) contract rights, chattel paper, instruments, documents, deposit
accounts, and other rights to payment of any kind, whether or not arising out of
or in connection with the sale or lease of goods or the rendering of services,
and whether or not earned by performance, (iii) any of the foregoing which are
not evidenced by instruments or chattel paper, (iv) intercompany receivables,
and any security documents executed in connection therewith, (v) proceeds of any
letters of credit or insurance policies on which such Borrower is named as
beneficiary, (vi) claims against third parties for advances and other financial
accommodations and any other obligations whatsoever owing to such Borrower,
(vii) rights in and to all security agreements, leases, guarantees, instruments,
securities, documents of title and other contracts securing, evidencing,
supporting or otherwise relating to any of the foregoing, together with all
rights in any goods, merchandise or Inventory which any of the foregoing may
represent, and (viii) rights in returned and repossessed goods, merchandise and
Inventory which any of the same may represent, including, without limitation,
any right of stoppage in transit.
"Register" has the meaning ascribed to such term in Section
12.0 1(c).
"Regulation F' means Regulation T of the Federal Reserve
Board as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve
Board as in effect from time to time.
23
"Regulation X" means Regulation X of the Federal Reserve
Board as in effect from time to time.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration at or
into the indoor or outdoor environment or at or into or out of any real or
personal property (regardless of whether any GC Party owns, leases or operates
it), including the movement of Contaminants through or in the air, soil, surface
water, groundwater or any real or personal property (regardless of whether any
GC Party owns, leases or operates it).
"Remedial Action" means any action required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Reorganization Plan" means a plan of reorganization for the
Borrowers proposed pursuant to Section 1121 et seq. of the Bankruptcy Code.
"Reportable Event" means any of the events described in
Section 4043 of ERISA other than an event which is not subject to the thirty
(30) day notice requirement of such regulation.
"Requirements of Law" means, as to any Person, any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations U and X, ERISA, the Fair Labor Standards Act, Environmental, Health
or Safety Requirement of Law and any certificate of occupancy, zoning ordinance,
building or land use requirement or any permit, approval, authorization license,
variance, or permission required from a Governmental Authority or any labor,
employment, occupational safety or health law, rule or regulation.
"Requisite DIP Lenders" means, at any time, at least two DIP
Lenders whose aggregate ratable shares (stated as a percentage) of the aggregate
amount of the Commitments in effect at such time are equal to or greater than
66.66%; provided, however, that, in the event that the Commitments have been
terminated pursuant to the terms of this Agreement, "Requisite DIP Lenders"
means any DIP Lender or DIP Lenders whose aggregate ratable shares (stated as a
percentage) of the aggregate outstanding amount of the DIP Obligations are
greater than 66.66%; and provided, further, that so long as any Event of Default
is continuing, Lenders holding 50% or more may direct the Agents to exercise
remedies, including, without limitation, termination of the DIP Loan Facility.
24
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of, partnership interest of or other equity interest of, a GC
Party now or hereafter outstanding, except a dividend payable solely in shares
of that class of stock or in any junior class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of, partnership interest of or other equity interest
of, a GC Party now or hereafter outstanding, (iii) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to, any permitted
subordinated indebtedness and (iv) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of capital stock of,
partnership interest of or other equity interest of, a GC Party now or hereafter
outstanding.
"Restructuring Professionals" has the meaning ascribed
thereto in Section 8.13.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or any
certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the DIP Obligations.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time, and any successor statute.
"Security Agreement" means the Security Agreement,
substantially in the form of Exhibit E attached hereto and made a part hereof,
as such Security Agreement may be amended, supplemented or otherwise modified
from time to time.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned or controlled by such Person, one
or more of the other subsidiaries of such Person or any combination thereof.
"Superpriority Claims" means Indebtedness or other claims
arising out of credit obtained or debt incurred by one or more Borrowers having
priority in accordance with the provisions of Section 364(c)( 1) of the
Bankruptcy Code over any or all administrative expenses of the kind specified in
Section 503(b) or 507(b) of the Bankruptcy Code.
"Termination Date" means the date which is the earliest of
(A) the Maturity Date, (B) the occurrence of an Event of Default and (C) the
Consummation Date.
25
"Uniform Commercial Code" means the Uniform Commercial Code
as enacted in the State of New York, as it may be amended from time to time.
"Unused Commitment Fee" has the meaning ascribed to such
term in Section 4.02(b).
"Voting Securities" means with respect to any Person,
Securities with respect to any class or classes of capital stock of such Person
entitling the holders thereof ordinarily to vote in the election of the members
of the board of directors of such Person.
"Weekly Budget" means a line item budget detailing projected
cash receipts and disbursements for the Borrowers and their Subsidiaries for a
six-month period commencing on Monday of each week and comprised of forecasts
for the initial twelve weeks on a weekly basis and for the following three
months on a monthly basis and containing a statement of actual cash receipts and
disbursements for the prior Budget Periods, in form and substance acceptable to
the DIP Administrative Agent.
"Weekly Delivery Date" means the Wednesday of each week.
1.02 Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03 Accounting Terms. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.
1.04 Other Terms. Terms not otherwise defined herein which
are defined in, or used in, Article 9 of the Uniform Commercial Code shall have
the respective meanings assigned to such terms in Article 9 of the Uniform
Commercial Code.
1.05 Knowledge. As used in this Agreement the phrases "to
the knowledge of," "known by" or phrases of similar import, when applied to any
GC Party, shall mean that an individual holding any of the offices identified on
Schedule 1.05 attached hereto is actually aware of, or should be aware of in the
ordinary course of business, the fact or other matter.
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ARTICLE II
AMOUNTS AND TERMS OF DIP LOANS
2.01 DIP Loan Facility (a) Availability. Subject to the terms and
conditions set forth in this Agreement (including, without limitation, Section
2.04), each DIP Lender hereby severally agrees to make DIP Loans (each
individually, a "DIP Loan" and, collectively, the "DIP Loans") to the Borrowers
from time to time during the period from the Effective Date to the Business Day
immediately preceding the Termination Date, in an amount not to exceed such DIP
Lender's Pro Rata Share of the Availability at such time. Each DIP Loan shall be
for a minimum amount of One Million Dollars ($1,000,000) and in integral
multiples of Fifty Thousand Dollars ($50,000) in excess of that amount. All DIP
Loans under this Agreement shall be made by the DIP Lenders simultaneously and
proportionately to their then respective Pro Rata Shares, it being understood
that no DIP Lender shall be responsible for any failure by any other DIP Lender
to perform its obligation to make a DIP Loan hereunder nor shall the Commitment
of any DIP Lender be increased or decreased as a result of any such failure.
Subject to the terms and provisions of this Agreement, the Borrowers may repay
any outstanding DIP Loan made to it on any day which is a Business Day and any
amounts so repaid may be reborrowed in accordance with the provisions of this
Section 2.0 1(a). Aggregate DIP Loans at any one time outstanding shall not
exceed the lesser of (a) $45,000,000 or (b) the amount projected to be
outstanding under the Closing Budget, subject to the permitted variances
pursuant to Section 3.01(b)(i).
(b) Notice of Borrowing. When the Borrowers desire to borrow
under this Section 2.01, the Borrowers shall deliver to the DIP Administrative
Agent a Notice of Borrowing, signed by each, no later than 2:00 p.m. (New York
time) on the second Business Day immediately prior to proposed Funding Date.
Such Notice of Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day) and (ii) the amount of the proposed Borrowing;
provided, however, that the Borrowers shall not be required to provide two (2)
days' advance written notice with respect to the initial advance in the
principal amount of $22,000,000 to be made on the date hereof. In lieu of
delivering such a Notice of Borrowing, the Borrowers may give the DIP
Administrative Agent telephonic notice of any proposed Borrowing by the time
required under this Section 2.01(b) if it confirms such notice by delivery of
the Notice of Borrowing to the DIP Administrative Agent promptly, but in no
event later than 5:00 p.m. (New York time) on the same day. Any Notice of
Borrowing (or telephonic notice in lieu thereof) given pursuant to this Section
2.01(b) shall be irrevocable.
(c) Making of DIP Loans. (i) Each DIP Lender shall deposit an
amount equal to its Pro Rata Share of the amount requested by the Borrowers to
be made as DIP Loans in the DIP Administrative Agent's Account at its office in
Norwalk, Connecticut in immediately available funds, not later than 2:00 p.m.
(eastern standard time) on any Funding Date applicable thereto. The DIP
Administrative Agent shall make the proceeds of such amounts received by it
available to the Borrowers on such Funding Date (or on the date received by the
Administrative Agent if later than such Funding Date). The failure of any DIP
Lender to deposit the amount described above with the DIP Administrative Agent
on the applicable Funding Date shall not relieve any other DIP Lender of its
obligations hereunder to make its DIP Loan on such Funding Date.
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(ii) Unless the DIP Administrative Agent shall have been
notified by any DIP Lender no later than 1:00 p.m. (New York time) on the
applicable Funding Date in respect of any Borrowing of DIP Loans that such DIP
Lender does not intend to fund its DIP Loan requested to be made on such Funding
Date, the DIP Administrative Agent may assume that such DIP Lender has funded
its DIP Loan and is depositing the proceeds thereof with the DIP Administrative
Agent on the Funding Date, and the DIP Administrative Agent in its sole
discretion may, but shall not be obligated to, disburse a corresponding amount
to the Borrowers on the Funding Date. If the DIP Loan proceeds corresponding to
that amount are advanced to the Borrowers by the DIP Administrative Agent but
are not in fact deposited with the DIP Administrative Agent by such DIP Lender
on or prior to the applicable Funding Date, such DIP Lender agrees to pay, and
in addition the Borrowers agree to repay, to the DIP Administrative Agent
forthwith on demand such corresponding amount, together with interest thereon,
for each day from the date such amount is disbursed to or for the benefit of the
Borrowers until the date such amount is paid or repaid to the DIP Administrative
Agent, (A) in the case of the Borrowers, at the interest rate applicable to such
Borrowing and (B) in the case of such DIP Lender, at the Federal Funds Rate for
the first Business Day, and thereafter at the interest rate applicable to such
Borrowing. If such DIP Lender shall pay to the DIP Administrative Agent the
corresponding amount, the amount so paid shall constitute such DIP Lender's DIP
Loan, and if both such DIP Lender and the Borrowers shall pay and repay such
corresponding amount, the DIP Administrative Agent shall promptly pay to the
Borrowers such corresponding amount. This Section 2.01 (c)(ii) does not relieve
any DIP Lender of its obligation to make its DIP Loan on any Funding Date; nor
does this Section 2.01(c)(ii) relieve the Borrowers of their obligation to pay
or repay any DIP Lender funding its DIP Loan pursuant to this Section
2.0l(c)(ii) interest on such DIP Loan from such Funding Date until the date on
which such DIP Loan is repaid in full.
(d) Repayment of DIP Loans. The Commitments shall terminate, and
all outstanding DIP Loans shall be paid in full, on the Termination Date.
2.02 Promise to Pay; Evidence of Debt. The Borrowers agree to pay
when due the principal amount of each DIP Loan which is made to the Borrowers,
and further agree to pay all unpaid interest accrued thereon, in accordance with
the terms of this Agreement and the promissory note evidencing the DIP Loans
owing to the DIP Lenders.
2.03 Use of Proceeds of DIP Loans. (a) Budget. From and after the
Effective Date, the proceeds of the DIP Loans shall be used by the Borrowers
solely at the times, and expressly subject to the amounts, set forth in the
Closing Budget, provided that (a) until entry of the Final Order, the Borrowers
may borrow up to $25,000,000 at any time without limitation with respect to
Closing Budget line items (except that in no event may the Borrowers use more
than $1,000,000 for pre-petition rent due landlords and no more than $7,000,000
for pre-petition amounts due film suppliers for payment of pre-petition debts);
(b) from the Friday of the first full week following the entry of the Final
Order through the week ending December 29, 2000, the Borrowers may, during any
Budget Period, exceed any expense line item in the Closing Budget on a
cumulative basis by no more than 15%, and (c) for the week ending Friday,
January 5, 2001 and thereafter, the Borrowers may, during any Budget Period,
exceed any expense line item in the Closing Budget on a cumulative basis by no
more than 10%. Accordingly, any budgeted amounts for an expense line item not
expended during any Budget Period may be carried over
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and expended in a subsequent Budget Period, subject to permitted variance.
Notwithstanding the foregoing, in any Budget Period the amount expended for film
rent may be greater than the Closing Budget line limit by an amount equal to 70%
of the difference between (i) the actual box office receipts for such Budget
Period over (ii) the budgeted box office receipts in the Closing Budget for such
Budget Period. The GC Parties agree not to directly or indirectly utilize any
portion of the DIP Loans the DIP Collateral or the Carve-Out to commence or
prosecute any action or objection with respect to the DIP Lenders, the DIP
Agents, the Existing Lenders, the Existing Lessors, the Existing Agents, the
Existing Obligations, the Existing Credit Agreement, the Existing Lease, or the
Existing Collateral.
(b) Initial Borrowing. The initial Borrowing shall include a
disbursement to fully pay the DIP Agents' and DIP Lenders' closing and
arrangement related costs, fees and expenses (including, without limitation, the
Facility Fee and reasonable legal and professional expenses). All such costs,
fees and expenses shall be paid on the Closing Date.
2.04 Authorized Officers. Employees and Agents. On the Effective
Date and from time to time thereafter as requested by the DIP Administrative
Agent, the Company shall deliver to the DIP Administrative Agent an Officer's
Certificate setting forth the names of the officers of the Company, employees
and agents of the Company authorized to request DIP Loans on behalf of the
Borrowers and containing a specimen signature of each such officer, employee or
agent. The officers, employees and agents so authorized shall also be authorized
to act for the Borrowers in respect of all other matters relating to the DIP
Loan Documents. The DIP Agents shall be entitled to rely conclusively on such
officer's, employee's or agent's authority to request such DIP Loan until the
DIP Agents receive written notice to the contrary. In addition, the DIP Agents
shall be entitled to rely conclusively on any written notice sent to it by
telecopy. The DIP Agents shall have no duty to verify the authenticity of the
signature appearing on, or any telecopy or facsimile of, any written Notice of
Borrowing or any other document, and, with respect to an oral request for such a
DIP Loan or Letter of Credit, the DIP Agents shall have no duty to verify the
identity of any person representing himself or herself as one of the officers,
employees or agents authorized to make such request or otherwise to act on
behalf of the Borrowers. None of the DIP Agents, the DIP Lenders shall incur any
liability to the Borrowers or any other Person in acting upon any telecopy or
facsimile or telephonic notice referred to above which any DIP Agent or any DIP
Lender believes to have been given by a duly authorized officer or other person
authorized to borrow on behalf of the Borrowers.
2.05 Borrower's Representatives. The DIP Lenders are hereby
irrevocably authorized by each of the Borrowers to make DIP Loans to the
Borrowers pursuant to the provisions of this Agreement upon the written, oral or
telephone request of any one of the Persons who are authorized to do so under
the provisions of the most recent "Certificate" of corporate resolutions of GC
Company, Inc. on file with the DIP Administrative Agent. The proceeds of each
DIP Loan advanced by the DIP Lenders from time to time pursuant to the
provisions of this Agreement are for the use and benefit of all of the
Borrowers. The Borrowers in the discretion of their respective managements are
to agree among themselves as to the allocation of the benefits of the proceeds
of the DIP Loans and the purposes for which such benefits and proceeds will be
used so long as any such allocation or purpose does not violate the provisions
of this Agreement. The Borrowers hereby represent and warrant to the DIP Lenders
29
that each of them will derive benefits, directly and indirectly, from the
proceeds of each DIP Loan, both in its separate capacity and as a member of the
integrated group to which each of the Borrowers belong, since the successful
operation of the integrated group is dependent upon the continued successful
performance of the functions of the integrated group as a whole. For
administrative convenience, GC Companies, Inc. is hereby irrevocably appointed
by each of the Borrowers as agent for each of the Borrowers for the purpose of
requesting DIP Loans hereunder from the DIP Lenders, receiving the benefits of
the proceeds of such Loans and disbursing the proceeds of such Loans among the
Borrowers. By reason thereof, GC Companies, Inc. is hereby irrevocably appointed
by each of the Borrowers as the attorney-in-fact of each of the Borrowers with
power and authority through its duly authorized officer or officers to (a)
endorse any check (if any) for the proceeds of any DIP Loan for and on behalf of
each of the Borrowers and in the name of each of the Borrowers, and (b) instruct
the DIP Lenders to credit the proceeds of any Loan directly to a banking account
of any of the Borrowers which shall evidence the making of such DIP Loan and
shall constitute the acknowledgment by each of the Borrowers of the receipt of
the proceeds of such Loan. The DIP Lenders assume no responsibility or liability
for any errors, mistakes, and/or discrepancies in the oral, telephonic, written
or other transmissions of any instructions, orders, requests and confirmations
between the DIP Lenders and the Borrowers in connection with the DIP Loans or
any other transaction in connection with the provisions of this Agreement.
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01 Prepayments; Reductions in DIP Loan Commitments.
(a) Voluntary Prepayments/Reductions.
(i) The Borrowers may prepay the DIP Loans in whole or in part
at any time or from time to time.
(ii) The Borrowers, upon at least three (3) Business Days'
prior notice to the DIP Administrative Agent (which the DIP Administrative Agent
shall promptly transmit to each DIP Lender), shall have the right, at any time
and from time to time, to terminate in whole or permanently reduce ratably in
part the unused portions of the Commitments. Any partial reduction of the
Commitments shall be in an aggregate minimum amount of One Million Dollars
($1,000,000) and integral multiples of Fifty Thousand Dollars ($50,000) in
excess of that amount, and shall reduce the Commitment of each DIP Lender
proportionately in accordance with such DIP Lender's Pro Rata Share. Any notice
of termination or reduction given to the DIP Administrative Agent under this
Section 3.01 (a)(ii) shall be irrevocable and shall specify the date (which
shall be a Business Day) of such termination or reduction and, with respect to a
partial reduction, the aggregate principal amount thereof.
(iii) The prepayments and payments in respect of reductions
and terminations described in clauses (i) and (ii) of this Section 3.01(a) may
be made without premium or penalty.
30
(b) Mandatory Prepayments/Reductions.
(i) The Borrowers shall make a mandatory prepayment of all DIP
Loans in an aggregate amount equal to the excess, if any, on any date (x) of the
DIP Credit Obligations over the DIP Commitments or (y) if the DIP Credit
Obligations exceed the projected DIP Credit Obligation by more than $10,000,000
at any one time, the amount over $10,000,000 by which the DIP Credit Obligations
exceed the projected amount of DIP Credit Obligations specified in the Closing
Budget for such Budget Period subject to the budget variance set forth in
Section 2.04.
(ii) Immediately upon any Borrower's receipt of any Net Cash
Proceeds on account of an Asset Sale (other than an Excluded Asset Sale), such
Borrower shall make or cause to be made a mandatory prepayment of the DIP Loans
in an amount equal to such amount as shall have been agreed upon by the
Requisite DIP Lender.
(iii) By no later than 2:00 p.m. (eastern standard time) on
each Business Day, the Borrowers shall make (or cause to be made) a mandatory
prepayment of the Excess Collection Amount, if any.
(iv) Amounts prepaid pursuant to clause (ii) shall, if
required by the Lenders, be applied toward the permanent reduction of the
Commitments; provided, however, if a revised Budget satisfactory to the DIP
Agents in their sole discretion, demonstrating a continued need for the amount
prepaid is delivered by the Borrowers, the DIP Agents agree to negotiate in good
faith with respect to a continuation of some or all of such portion of the
Commitment without payment of additional facility fees.
(v) Nothing in this Section 3.01(b) shall be construed to
constitute the DIP Lenders' consent to any transaction which is not expressly
permitted by Article IX or which requires the DIP Lenders' consent under the
Bankruptcy Code.
3.02 Payments (a) Manner and Time of Payment. All payments of
principal, interest, fees, Reimbursement Obligations and other DIP Obligations
which are payable to the DIP Administrative Agent, or any DIP Lenders shall be
made without condition or deduction for any counterclaim, defense, recoupment or
set-off, in Dollars and in immediately available funds, delivered to the DIP
Administrative Agent (or, in the case of Reimbursement Obligations, to the
Issuing Bank) not later than 1:00 p.m. (eastern standard time) on the date due,
by deposit of such funds to the DIP Administrative Agent's Account (or such
account of the Issuing Bank, as it may designate). The DIP Administrative Agent
shall thereafter cause to be distributed to the DIP Lenders their respective Pro
Rata Shares of such payments in accordance with the provisions of Section
3.02(b) if received prior to 1:00 p.m. (New York time), and on the next
succeeding Business Day, if received thereafter, by the DIP Administrative
Agent.
(b) Apportionment of Payments. (i) All payments of principal in
respect of outstanding DIP Loans shall be applied by the DIP Administrative
Agent to the payment of the DIP Loans owing to the DIP Lenders in accordance
with their respective Pro Rata Shares thereof.
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(ii) Prepayment of DIP Loans made pursuant to Sections
3.0l(b)(i) and (iii) shall be applied in the following order:
(A) first, to pay principal of and interest on any
DIP Loans;
(B) second, to pay all Reimbursement Obligations;
(C) third, to pay all other DIP Obligations in
such order as the DIP Administrative Agent may determine in its
sole discretion.
(iii) Prepayment of DIP Loans made, prior to the Maturity
Date, pursuant to Section 3.0 l(b)(ii) shall be applied in the following order:
(A) first, to pay DIP Obligations in respect of
any fees, expenses, reimbursements or indemnities then due to the
DIP Agents or the DIP Lenders;
(B) second, to pay accrued interest on the DIP
Loans;
(C) third, to pay the principal amount of the DIP
Loans then outstanding in accordance with each DIP Lender's Pro
Rata Share;
(iv) After the occurrence of an Event of Default and while the
same is continuing, the DIP Administrative Agent shall apply all payments and
prepayments of any DIP Obligations and all proceeds of DIP Collateral in the
following order:
(A) first, to pay principal of and interest on any
DIP Loans which the DIP Administrative Agent may have advanced on
behalf of any DIP Lender pursuant to Section 2.0 1(c)(ii) for
which the DIP Administrative Agent has not been reimbursed by
such DIP Lenders or the Borrowers;
(B) second, to pay DIP Obligations in respect of
any fees, expenses, reimbursements or indemnities then due to the
DIP Agents or the DIP Lenders;
(C) third, to pay accrued interest on the DIP
Loans;
(D) fourth, to pay the principal amount of the DIP
Loans then outstanding in accordance with each DIP Lenders' Pro
Rata Share;
(E) fifth, to pay all other DIP Obligations in
such order as the DIP Administrative Agent may determine in its
sole discretion;
32
The order of priority set forth in this Section 3.02(b) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the DIP Administrative Agent and the DIP Lenders among themselves.
(c) Payments on Non-Business Days. Whenever any payment to be
made by the Borrowers hereunder or under the Note is stated to be due on a day
which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day, and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
3.03 Taxes. (a) Except as provided below in this Section 3.03(a),
all payments made by the Borrowers under this Agreement and the Note shall be
made free and clear of, and without deduction or withholding for or on account
of. any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on any DIP Agent or any DIP Lender as a result of a present or former connection
between such DIP Agent or such DIP Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such DIP Agent's or such DIP Lenders having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or the
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to any DIP Agent or any DIP Lender hereunder or under
the Note (i) the Borrowers shall deduct or withhold the full amount of such
Non-Excluded Taxes and pay such Non-Excluded Taxes to the appropriate
Governmental Authority in accordance with applicable law and (ii) the amounts so
payable to such DIP Agent or such DIP Lender shall be increased to the extent
necessary to yield to such DIP Agent or such DIP Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement and the Note; provided that
the Borrowers shall not be required to increase any such amounts payable to any
DIP Lender unless the obligation to pay such increased amounts would not have
arisen but for a change in law (including the Code or applicable tax treaty)
occurring after the Closing Date. If the Borrowers fail to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the DIP
Administrative Agent the required receipts or other required documentary
evidence referred to in Section 3.03(d), the Borrowers shall indemnify the DIP
Administrative Agent and the DIP Lenders for any incremental taxes, interest or
penalties that may become payable by the DIP Lenders as a result of any such
failure. The covenants in this Section 3.03 shall survive the termination of
this Agreement and the payment of the Note and payment of the DIP Obligations
hereunder.
(b) Other Taxes. In addition, the Borrowers agree to pay any
present or future stamp, value-added or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from (i) any payment made
under any DIP Loan Document or (ii) the execution, delivery or registration of.
or otherwise with respect to, this Agreement, the Note or any other DIP Loan
Document (hereinafter referred to as "Other Taxes").
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(c) Indemnification. The Borrowers will indemnify each DIP Lender
and each DIP Agent against, and reimburse each on demand for, the full amount of
all Non-Excluded Taxes and Other Taxes (including, without limitation, any
Non-Excluded Taxes or Other Taxes imposed by any Governmental Authority on
amounts payable under this Section 3.03 and any additional income or franchise
taxes resulting therefrom) incurred or paid by such DIP Lender or such DIP Agent
(as the case may be) or any Affiliate of such DIP Lender and any liability
(including penalties, interest, and out-of-pocket expenses paid to third
parties) arising therefrom or with respect thereto, whether or not such
Non-Excluded Taxes or Other Taxes were correctly or lawfully payable. A
certificate as to any amount payable to any Person under this Section 3.03
submitted by such Person to the Borrowers shall, absent manifest error, be
presumed correct and binding upon all parties hereto. This indemnification shall
be made within thirty (30) days from the date such Person makes written demand
therefor.
(d) Receipts. Within thirty (30) days after the date of any
payment of NonExcluded Taxes or Other Taxes by the Borrowers, the Borrowers will
furnish to the DIP Administrative Agent, at its address referred to in Section
12. 10, the original or a certified copy of a receipt or other documentation
reasonably satisfactory to the DIP Administrative Agent evidencing payment
thereof. The Borrowers will furnish to the DIP Administrative Agent upon the DIP
Administrative Agent's request from time to time an Officer's Certificate
stating that all Non-Excluded Taxes and Other Taxes of which it is aware that
are due have been paid and that no additional Non-Excluded Taxes or Other Taxes
of which it is aware are due.
(e) DIP Lenders Certifications. Without limiting the obligations
of the Borrowers under this Section 3.03, each DIP Lender shall:
(i) deliver to the Borrowers and the DIP
Administrative Agent on or before the Effective Date or the date on
which such DIP Lender becomes a DIP Lender pursuant to Section 12.01,
(1) in the case of a DIP Lender that is not created or organized under
the laws of the United States or any state thereof or that is a foreign
trust (within the meaning of Section 7701 (a)(3 I) of the Code) either
(x) two duly completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form or forms (such as the
W-8BEN, W-8IMY or W-8EC 1), as the case may be, (y) if such DIP Lender
is not a "bank" within the meaning of Section 881 (c)(3)(A) of the Code
and intends to claim exemption from U.S. Federal withholding tax under
Section 87 1(h) or Section 881(c) of the Code with respect to payments
of "portfolio interest", a Form W-8, or any subsequent versions thereof
or successors thereto together with a certificate executed by such DIP
Lender claiming complete exemption from U.S. federal withholding tax on
payments of interest by the Borrowers under this Agreement and the
other DIP Loan Documents and representing that such DIP Lender is not a
bank for purposes of Section 881(c) of the Code, is not a 10 percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the Borrowers and is not a controlled foreign corporation related to
the Borrowers (within the meaning of Section 864(d)(4) of the Code), or
(z), an Internal Revenue Service Form W-8, or successor applicable form
or subsequent applicable version thereof or (2) an Internal Revenue
Service Form W-9, or successor applicable form;
34
(ii) deliver to the Borrowers and the DIP
Administrative Agent two further duly completed copies of any such form
(or deliver the appropriate duly completed successor form of forms) or
certification on or before the date that any such form or certification
expires or becomes obsolete and promptly after the occurrence of any
event requiring a change in the most recent form previously delivered
by it to the Borrowers; and
(iii) obtain such extensions of time for filing and
duly complete such forms or certifications as may reasonably be
requested by the Borrowers or the DIP Administrative Agent;
unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required, which renders all
such forms inapplicable or which would prevent such DIP Lender from
duly completing and delivering any such form with respect to it and
such DIP Lender so advises the Borrowers and the DIP Administrative
Agent. Each Person that shall become a participant pursuant to Section
12.01 shall, upon the effectiveness of the related transfer, be
required to provide to the Borrowers and the DIP Administrative Agent
all the forms and statements required of a DIP Lender pursuant to this
Section. For purposes of this Section 3.03(e), a Form W-8BEN completed
and delivered by a Person claiming a reduced rate of withholding at
source under an income tax treaty will not be considered duly completed
unless the form contains such Person's U.S. taxpayer identification
number.
Notwithstanding anything contained in this Section 3.03, no DIP Lender shall
have any liability owing to the Borrowers or any other GC Party for such DIP
Lender's failure to give the applicable form or certification under this Section
3.03.
3.04 Increased Capital. If any DIP Lender reasonably determines
that (i) the adoption or implementation of or any change in or in the
interpretation or administration of any law or regulation or any guideline or
request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over such
DIP Lender or banks or financial institutions generally (whether or not having
the force of law) effective after the date hereof, compliance with which affects
or would affect the amount of capital required or expected to be maintained by
such DIP Lender or any corporation controlling such DIP Lender and (ii) the
amount of such capital is increased by or based upon the making or maintenance
by any DIP Lender of its DIP Loans, any DIP Lender's participation in or
obligation to participate in the DIP Loans, or other advances made hereunder or
under the Note or the existence of any DIP Lender's obligation to make DIP Loans
then, in any such case, upon demand by such DIP Lender (with a copy of such
demand to the DIP Administrative Agent), the Borrowers agree to immediately pay
to the DIP Administrative Agent for the account of such DIP Lender, from time to
time as specified by such DIP Lender, additional amounts sufficient to
compensate such DIP Lender or such corporation on an after-tax basis therefor.
Such demand shall be accompanied by a statement as to the amount of such
compensation and include a brief summary of the basis for such demand. Such
statement shall be presumed correct and binding for all purposes, absent
manifest error.
35
ARTICLE IV
INTEREST AND FEES
4.01 Interest on the DIP Loans and other DIP Obligations. (a)
Rate of Interest. All DIP Loans and the outstanding amount of all other DIP
Obligations shall bear interest on the unpaid amount thereof from the date such
DIP Loans are made or such other DIP Obligations are due and payable until paid
in full, except as otherwise provided in Section 4.01(c), at a rate per annum
equal to the sum of (I) the Base Rate as in effect from time to time, plus (II)
the Applicable Margin.
(b) Interest Payments. (i) Interest accrued on each DIP Loan
shall be payable in arrears (A) on the last Business Day of each month,
commencing on the first such day following the making of such DIP Loan, and (B)
on the Maturity Date or such other date on which such DIP Loans become due and
payable.
(ii) Interest accrued on the balance of all other DIP
Obligations shall be payable in arrears (A) on the last Business Day of each
month, commencing on the first such day following the incurrence of such DIP
Obligation, and (B) on the Maturity Date or such other date on which the DIP
Loans become due and payable.
(c) Default Interest. Notwithstanding the rates of interest
specified in Section 4.01(a) or elsewhere herein, effective immediately upon the
occurrence of any Event of Default and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all DIP Loans and of all
other DIP Obligations, shall bear interest at a rate which is two percent (2.0%)
per annum in excess of the rate of interest that is otherwise applicable to such
DIP Loans and other DIP Obligations from time to time (the "Default Rate").
(d) Computation of Interest. Interest on DIP Loans and all other
DIP Obligations shall be computed on the basis of the actual number of days
elapsed in the period during which interest accrues and a year of 360 days. In
computing interest on any DIP Loan, the date of the making of the DIP Loan shall
be included and the date of payment made in accordance with Section 3.02 shall
be excluded; provided, however, if a DIP Loan is repaid on the same day on which
it is made, one (1) day's interest shall be paid on such DIP Loan.
(e) Changes; Legal Restrictions. If after the date hereof any DIP
Lender reasonably determines that the adoption or implementation of or any
change in or in the interpretation or administration of any law or regulation or
any guideline or request from any central bank or other Governmental Authority
or quasi-governmental authority exercising jurisdiction, power or control over
any DIP Lender or over banks or financial institutions generally (whether or not
having the force of law), compliance with which, in each case after the date
hereof:
(i) subjects a DIP Lender to charges (other than
Taxes) of any kind which is applicable to the Commitments of such DIP
Lender or changes the basis of
36
taxation of payments to that DIP Lender of principal, fees, interest,
or any other amount payable hereunder; or
(ii) imposes, modifies, or holds applicable, any
reserve special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, commitments made, or other
credit extended by, or any other acquisition of funds by, a DIP Lender;
and the result of any of the foregoing is to increase the cost to that DIP
Lender of making, renewing or maintaining the DIP Loans or its Commitments or to
reduce any amount receivable thereunder; then, in any such case, upon written
demand by such DIP Lender (with a copy of such demand to the DIP Administrative
Agent), the Borrowers shall immediately pay to the DIP Administrative Agent for
the account of such DIP Lender, from time to time as specified by such DIP
Lender such amount or amounts as may be necessary to compensate such DIP Lender
on an after-tax basis, for any such additional cost incurred or reduced amount
received. Such demand shall be accompanied by a statement as to the amount of
such compensation and include a summary of the basis for such demand. Such
statement shall be presumed correct and binding for all purposes, absent
manifest error.
4.02 Fees (a) Facility Fee. The Borrowers agree to pay, on the
date hereof, to the DIP Administrative Agent, for the account of the DIP Lenders
in accordance with their Pro Rata Shares, a fee (the "Facility Fee") in the
amount of $450,000.
(b) Unused Commitment Fee. The Borrowers agrees to pay to the DIP
Administrative Agent, for the account of the DIP Lenders in accordance with
their Pro Rata Shares, a fee (the "Unused Commitment Fee") on the average amount
by which (i) the Commitments exceeds (ii) the DIP Credit Obligations, accruing
for the period commencing on the Effective Date and ending on the Termination
Date, at the Commitment Fee Rate on such average amount, payable monthly in
arrears on the last Business Day of each month, on the date of any Commitment
reduction, and on the Termination Date.
(c) Agency Fees. There shall be no agency fees payable in
connection herewith; provided, that the provisions of this section shall in no
way relieve the Borrowers of their obligation to pay fees an expenses incurred
by the Agents, in accordance with the terms hereof.
(d) Computation of Fees. All of the above fees payable on a per
annum basis shall be computed on the basis of the actual number of days elapsed
in a year of 360 days. All such fees shall be payable in addition to, and not in
lieu of, interest, compensation, expense reimbursements, indemnification and
other DIP Obligations. All fees in this Section 4.02 shall be non-refundable and
shall be deemed fully earned when paid.
37
ARTICLE V
CONDITIONS TO LOANS
5.01 Conditions Precedent to the Effective Date. This Agreement
shall become effective and the obligation of each DIP Lender on the Effective
Date to make its initial DIP Loan requested to be made by it shall be subject to
the satisfaction of all of the following conditions precedent:
(a) Bankruptcy Court Orders. By no later than fifteen (15) days
after the Filing Date, the DIP Administrative Agent shall have received, a copy
of the Interim Order, entered by the Bankruptcy Court and the Interim Order
shall be in full force and effect and shall not have been vacated, stayed,
reversed, modified or amended and shall otherwise be in form and substance
satisfactory to the DIP Agents and the DIP Lenders. All "first day orders"
entered by the Bankruptcy Court in the Chapter 11 Cases shall be in form and
substance satisfactory to the DIP Agents and their counsel.
(b) Documents; Other Matters. The DIP Administrative Agent (on
behalf of itself and the DIP Lenders) shall have received on or before the
Effective Date all of the following:
(i) this Agreement, the Note and all other
agreements. documents, instruments, certificates and legal opinions
described in the List of Closing Documents attached hereto and made a
part hereof as Exhibit L each duly executed where appropriate and in
form and substance satisfactory to the DIP Lenders and in sufficient
copies for each of the DIP Lenders;
(ii) the Closing Budget, a June 30, 2000 balance
sheet of Hoyts General Cinema South America, and a detailed summary of
the assets of GCC Investments, Inc. as of October 9, 2000;
(iii) such additional opinions and documentation as
the DIP Agents or the Requisite DIP Lenders may reasonably request.
(c) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and the DIP Administrative Agent
shall not have received any notice that any action, suit, investigation,
litigation or proceeding is pending or threatened in any court or before any
arbitrator or Governmental Authority which (i) purports to enjoin, prohibit,
restrain or otherwise affect the making of DIP Loans on the Effective Date or
(ii) would be reasonably expected to impose or result in the imposition of a
Material Adverse Change.
(d) Consents. Except as set forth on Schedule 5.01(A), and except
for the approval of the Bankruptcy Court pursuant to the Orders, each GC Party
shall have received all consents and authorizations required pursuant to any
material Contractual Obligation with any other Person and shall have obtained
all consents and authorizations of, and effected all notices to and filings
with, any Governmental Authority, in each case, as may be necessary, in the
reasonable judgment of the DIP Agents, to allow such GC Party, lawfully and
without risk of rescission, (i) to execute, deliver and perform its obligations
under each DIP Loan Document to which it is a party and each other agreement or
instrument to be executed and delivered by it
38
pursuant thereto or in connection therewith, (ii) to consummate the transactions
contemplated by the DIP Loan Documents and (iii) to create and perfect or
continue the validity and perfection of the Liens on the DIP Collateral to be
owned by it in the manner and for the purpose contemplated by the DIP Loan
Documents
(e) No Default. No Default or Event of Default shall have
occurred and be continuing or would result from the making of the DIP Loans.
(f) Representations and Warranties. All of the representations
and warranties contained in Section 6.01 and in the other DIP Loan Documents
shall be true and complete in all material respects on and as of the Effective
Date.
(g) Harcourt General, Inc. The Lenders shall have received copies
of all term sheets or other documents between the Borrowers and Harcourt
General, Inc. evidencing all new arrangements entered into, or to be entered
into, just prior to or following the commencement of the Chapter 11 Cases.
(h) GC International Stock. Harcourt General, Inc. shall have
delivered to the Collateral Agent, for the benefit of the DIP Lenders, the stock
held by it in GC International, Inc., along with stock powers executed by the
Company and duly endorsed in blank.
(i) GCC Investments Stock. The Company shall have delivered to
the Collateral Agent, for the ratable benefit of the DIP Lenders, the stock
owned by it in GCC Investments, Inc., along with stock powers duly endorsed in
blank.
5.02 Conditions Precedent to All DIP Loans. The obligation of
each DIP Lender to make any DIP Loan requested to be made by it on any Funding
Date on or after the Effective Date is subject to the following conditions
precedent as of each such date:
(a) Representations and Warranties. As of such date (unless the
representation and warranty exclusively speaks of the Effective Date), both
before and after giving effect to the DIP Loans to be made, all of the
representations and warranties contained in Section 6.01 and in the other DIP
Loan Documents shall be true and complete in all material respects.
(b) No Defaults. As of such date, no Default or Event of Default
shall have occurred and be continuing or would result from the making of the
requested DIP Loan.
(c) No Material Adverse Change. Since the Filing Date, with
respect to the Borrowers and their Subsidiaries, other than the commencement of
the Chapter 11 Cases and all events and circumstances leading thereto and
associated therewith, there has occurred no event which has cause or is
reasonably likely to cause, individually or in the aggregate, a Material Adverse
Change.
(d) Bankruptcy Court Orders. (A) The Interim Order shall be in
full force and effect and shall not have been vacated, stayed, reversed,
modified or amended and shall
39
otherwise be in form and substance acceptable to the DIP Agents, or (B) if (x)
the Funding Date or Issuance Date is more than forty-five (45) days after the
Filing Date or (y) if the principal amount of the requested DIP Loan plus the
DIP Credit Obligations exceeds the maximum amount authorized pursuant to the
Interim Order, a Final Order shall have been entered, in form and substance
satisfactory to the DIP Agents and their counsel, and such Final Order shall not
have been vacated, stayed, reversed, modified or amended. (B) Prior to the entry
of the Final Order, the Commitment shall not at any time exceed the lesser of
$25,000,000 and the amount allowed pursuant to the Interim Order.
(e) Borrowers' Certificates. As of such date, the Borrowers shall
have delivered to the DIP Administrative Agent a Notice of Borrowing and Budget
Compliance Certificate in form and substance acceptable to the DIP
Administrative Agent.
(f) Cash. The Borrowers shall have fully used all available cash
in excess of $4,000,000.
(g) Fees and Expenses Paid. As of such date, the Borrowers shall
have paid the DIP Administrative Agent and the DIP Lenders, all fees and
expenses (including, without limitation, reasonable legal and professional fees
and expenses) due and payable on or before the Funding Date, as applicable.
(h) Chief Financial Officer. The Borrowers shall continue to
employ their current chief financial officer, or another qualified chief
financial officer satisfactory to the Agents.
(i) Material Adverse Change in Theater Subsidiaries. No material
adverse change shall have occurred in the assets, operations, or liabilities of
General Cinema Theatres, Inc. and its subsidiaries, taken as a whole) between
October 11, 2000 and the date of the entry of the Final Order.
(j) Valuation. The Lenders shall have received, not later than
the date of the entry of the Final Order, evidence that value of assets of the
Borrowers, after reduction of the amount of any lien on such assets with a
higher priority than the lien granted to the Lenders pursuant to the Orders
shall be at least $45,000,000, as reasonably determined by the Lenders after
completion of their due diligence, such valuation to be based upon a valuation
methodology selected by the Lenders and reasonably acceptable to the Company
Each request by the Borrowers for a DIP Loan, each submission by the Borrowers
of a Notice of Borrowing, and each acceptance by the Borrowers of the proceeds
of each DIP Loan made hereunder, shall constitute a representation and warranty
by the Borrowers as of the Funding Date in respect of such DIP Loan that all the
conditions contained in this Section 5.02 have been satisfied.
40
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Borrowers. In order to
induce the DIP Lenders to enter into this Agreement and to make the DIP Loans,
the Borrowers hereby represents and warrants as follows:
(a) Organization; Powers. Each GC Party (i) is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and (ii) subject to the approval of the Bankruptcy
Court, as appropriate, has all requisite power and authority to own, operate and
encumber its assets and to conduct its business as presently contemplated.
(b) Authority. (i) Subject to the approval of the Bankruptcy
Court pursuant to the Orders, each GC Party has the requisite power and
authority to execute, deliver and perform each of the DIP Loan Documents to
which it is a party.
(ii) No other action or proceeding on the part of any GC Party
is necessary to execute, deliver and perform each of the DIP Loan Documents to
which it is a party thereto or to consummate the transactions contemplated
thereby.
(iii) Each of the DIP Loan Documents to which any GC Party is
a party has been duly executed and delivered by such GC Party and constitutes
the legal, valid and binding obligation of such GC Party, enforceable against
such GC Party in accordance with its terms.
(c) Ownership. Schedule 6.01(C) sets forth the ownership of the
Borrowers and their Subsidiaries as of the Effective Date. The Borrowers have
delivered to the DIP Administrative Agent true and complete copies of the
Governing Documents for each GC Party. There exists no other agreement or
understanding (written or oral) affecting in any material respect the relative
rights, obligations or liabilities of such GC Party other than said Governing
Documents so delivered and such GC Party is in compliance in all material
respects with all of its Governing Documents.
(d) No Conflict. Except as set forth on Schedule 6.01(D), the
execution, delivery and performance by each GC Party of each DIP Loan Document
to which it is a party and the consummation of the transactions contemplated
thereby do not and will not (i) conflict with the Governing Documents of such GC
Party, (ii) violate any Requirements of Law (including Regulation T, Regulation
U and Regulation X) or any material Contractual Obligation of such GC Party or
require the termination of such material Contractual Obligation by such GC
Party, (iii) constitute a tortious interference with any Contractual Obligation
of any Person or (iv) result in or require the creation or imposition of any
Lien whatsoever upon any of the property or assets of such GC Party, other than
Liens expressly contemplated by the DIP Loan Documents.
(e) Governmental Consents. Except as set forth of Schedule
6.01(E) and except for the approval of the Bankruptcy Court pursuant to the
Orders, the execution, delivery
41
and performance by each GC Party of each DIP Loan Document to which it is a
party and the consummation of the transactions contemplated thereby do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority.
(f) Governmental Regulation. Except for the approval of the
Bankruptcy Court pursuant to the Orders, no GC Party is limited in its ability
to incur indebtedness or its ability to consummate the transactions contemplated
by the DIP Loan Documents by reason of regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
or the Investment Company Act of 1940, or any other federal or state statute or
regulation. No GC Party is an entity that is required to be registered as an
investment company under the Investment Company Act of 1940.
(g) Subsidiaries. As of the Effective Date, the Borrowers have no
Subsidiaries or interests in any joint venture or partnership of any other
Person other than the Subsidiaries set forth on Schedule 6.0 1(C).
(h) Financial Position. True and complete copies of the following
financial statements have been delivered to the DIP Administrative Agent and the
DIP Lenders: (i) the certified unaudited consolidated balance sheet as at the
end of fiscal year ended October 31, 1999, and the related consolidated
statements of operations, cash flows and shareholders equity and the notes
thereto of the Borrowers and their Subsidiaries for such fiscal year then ended,
and (ii) the unaudited quarterly consolidated and unconsolidated financial
report as at July 31, 2000. The foregoing financial statements were prepared in
conformity with GAAP, except as otherwise noted therein, and fairly present the
financial positions and the results of operations and equity of the Borrowers
and their Subsidiaries and the consolidated statement of cash flows for the
Borrowers and their Subsidiaries, in each case as applicable, for each of the
periods covered thereby as at the respective dates thereof. No GC Party has any
Accommodation Obligation, contingent liability or liability for any Taxes,
long-term leases or commitments, not reflected in the foregoing financial
statements which will have or is reasonably likely to have, individually or in
the aggregate, a Material Adverse Change.
(i) Schedule 6.01(i) sets forth an accurate summary of all
intercompany account balances as of July 31, 2000..
(j) Litigation; Adverse Effects. Except as set forth in Schedules
6.0l(J(i)) and 6.01(P), and except for motion(s) brought by the Borrowers
seeking entry of the Orders by the Bankruptcy Court, no GC Party has received
any notice of any action, suit, proceeding, investigation or arbitration before
or by any Governmental Authority or private arbitrator pending nor, to the
knowledge of such GC Party, threatened against such GC Party or any of its
assets (i) challenging the validity or the enforceability of any of the DIP Loan
Documents or any transactions contemplated thereby or (ii) which will or is
reasonably likely to result in, individually or in the aggregate, any Material
Adverse Change. Except as set forth in Schedule 6.0l(J(ii)), there is no
material loss contingency within the meaning of GAAP which has not been
reflected in the financial statements of the Borrowers and their Subsidiaries
with respect to the
42
financial statements referred to in Section 6.01(h) nor in any financial
statements of the Borrowers and their Subsidiaries delivered hereunder. Except
for orders issued in connection with the Chapter 11 Cases, no GC Party is
subject to, or in default with respect to, any final judgment, writ, injunction,
restraining order or order of any nature, decree, rule or regulation of any
court or Governmental Authority which will have or is reasonably likely to have,
individually or in the aggregate, a Material Adverse Change.
(k) No Material Adverse Effect. Since the commencement of the
Chapter 11 Cases, there has occurred no event which has had or is reasonably
likely to have, individually or in the aggregate, a material adverse effect upon
(i) the condition (financial or otherwise), operations, assets, business,
properties or performance of the Borrowers and their Subsidiaries, taken as a
whole, (ii) the ability of the GC Parties to perform their respective
obligations under the DIP Loan Documents, or (iii) the ability of the DIP
Lenders, or any DIP Agent to enforce the DIP Loan Documents.
(l) Payment of Taxes. Except as set forth on Schedule 6.01(L),
all tax returns and reports of each of the Borrowers and their Subsidiaries
required to be filed have been timely filed and all taxes, assessments, fees and
other governmental charges shown to be due and payable on said returns have been
timely paid and all other taxes, assessments, fees and other governmental
charges imposed upon it or any of its property by any Governmental Authority
have been timely paid (other than any taxes, assessments, fees or other charges
(i) which are being contested in good faith by the Borrowers or their
Subsidiary, as the case may be, by appropriate proceedings diligently instituted
and conducted and without danger of any material risk to the DIP Collateral and
(ii) with respect to which a reserve or other appropriate provision, if any, as
is required in conformity with GAAP shall have been made). The Borrowers do not
have any knowledge of any proposed assessment against any Borrower or any
Subsidiary that has or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Change.
(m) Disclosure. The representations and warranties of each GC
Party contained in the DIP Loan Documents, the Budgets and all information,
certificates and other documents delivered pursuant to the terms thereof, taken
as a whole, do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. No GC Party has withheld any fact or facts from the DIP
Administrative Agent or the DIP Lenders in regard to any matter which will have
or is reasonably likely to have, individually or in the aggregate, a Material
Adverse Change.
(n) Requirements of Law. No GC Party is in violation of any
Requirement of Law applicable to it or its business which violation (singularly
or in the aggregate) will have or is reasonably likely to have a Material
Adverse Effect.
(o) Environmental Matters. (i) To the best of each GC Party's
knowledge after diligent inquiry; and except as disclosed on Schedule 6.0 1(P):
43
(A) each GC Party and its operations comply in all
material respects with all applicable Environmental, Health or
Safety Requirements of Law:
(B) each GC Party has obtained all material
environmental, health and safety Permits necessary for its
operation, all such Permits are in good standing and such GC
Party is in material compliance with all terms and conditions of
such Permits;
(C) as of the Closing Date, no GC Party nor any of
its present Property or operations nor its past Property or
operations, are subject to any investigation, judicial or
administrative proceeding, order, judgment, decree, settlement or
other agreement respecting (i) any Environmental, Health or
Safety Requirements of Law, (ii) any Remedial Action or (iii) any
Claims or Liabilities and Costs arising from the Release or
threatened Release of a Contaminant into the environment; which
in the case of clauses (i), (ii), or (iii), individually or in
the aggregate, has had or is reasonably likely to have a Material
Adverse Change;
(D) no GC Party has filed any notice:
(I) reporting a material Release of a
Contaminant except such releases
that are in material compliance
with all Environmental, Health or
Safety Requirements of Law;
(2) indicating past or present
treatment, storage or disposal of a
hazardous waste, as that term is
defined under 40 C.F.R. Part 261 or
any state equivalent, except in
material compliance with all
Environmental, Health or Safety
Requirements of Law; or
(3) reporting a material violation of
any applicable Environmental,
Health or Safety Requirement of
Law;
(E) no GC Party's present Property or, its past
Property is listed or proposed for listing on the National
Priorities List pursuant to CERCLA ("NPL") or on the
Comprehensive Environmental Response Compensation Liability
Information System List ("CERCLIS") or any similar state list of
sites requiring Remedial Action;
(F) no GC Party has sent or directly arranged for
the transport of any waste or Contaminant to any site listed or
proposed for listing on the NPL or on any state list of sites
requiring Remedial Action;
44
(G) there is not now, nor has there ever been on
or in the Property of any GC Party:
(1) any treatment, recycling, storage
or disposal of any hazardous waste,
as that term is defined under 40
C.F.R. Part 261 or any state
equivalent, requiring a Permit;
(2) any landfill, underground storage
tank or surface impoundment; or
(3) any polychlorinated biphenyls
(PCBs) used in hydraulic oils,
electrical transformers or other
equipment or any Asbestos
Containing Material;
(H) no Environmental Lien has attached to any
Property of any GC Party.
(ii) Except as disclosed on Schedule 6.0 1(P):
(A) no GC Party's Property is subject to any
Environmental Property Transfer Act in connection with the
transactions contemplated by the DIP Loan Documents, or to the
extent such Acts are applicable to any such Property in
connection therewith, such GC Party has fully complied with the
requirements of such Acts prior to the Closing Date;
(B) as of the Effective Date, no GC Party has
received any written notice or claim to the effect that it is or
may be liable to any Person as a result of the Release or
threatened Release of a Contaminant into the environment; and
(C) the Borrowers and their Subsidiaries are
conducting and will continue to conduct their respective
businesses and operations in material compliance with all
applicable Environmental, Health or Safety Requirements of Law.
(q) ERISA. Neither any GC Party nor any ERISA Affiliate maintains
or contributes to any Plan other than those listed on Schedule 6.01(Q). Each
Plan which is intended to be qualified under Section 401(a) of the Code as
currently in effect has been determined by the IRS to be so qualified, and each
trust related to any such Plan has been determined to be exempt from federal
income tax under Section 501(a) of the Code as currently in effect. Except as
disclosed on Schedule 6.01(Q), neither any GC Party nor any ERISA Affiliate
maintains or contributes to any employee welfare benefit plan within the meaning
of Section 3(1) of ERISA which provides benefits to employees after termination
of employment other than as required by
45
Part 6 of Title I of ERISA. Neither any GC Party nor any ERISA Affiliate has
breached in any material respect of the responsibilities, obligations or duties
imposed on it by ERISA, the Code, or regulations promulgated thereunder
with-respect to any Plan. No Benefit Plan has any accumulated funding deficiency
(as defined in Section 302(a)(2) of ERISA and 4 12(a) of the Code) whether or
not waived. Neither any GC Party nor any ERISA Affiliate has any liability,
whether direct or indirect, contingent or otherwise, under Section 4063, 4064,
4069, 4204 or 42 12(c) of ERISA. Neither any GC Party nor any ERISA Affiliate
nor any fiduciary of any Plan which is not a Multiemployer Plan (i) has engaged
in a nonexempt prohibited transaction described in Section 406 of ERISA or 4975
of the Code or (ii) has taken or failed to take any action which would
constitute or result in an ERISA Termination Event. Neither any GC Party nor any
ERISA Affiliate has incurred any liability to the PBGC which remains outstanding
other than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and furnished to the DIP
Administrative Agent is complete and accurate. Since the date of each such
Schedule B, there has been no adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither any GC Agent
nor any ERISA Affiliate has an outstanding liability in respect of (i) a failure
to make a required contribution or payment to a Multiemployer Plan or (ii) a
complete or partial withdrawal under Section 4203 or 4205 of ERISA from a
Multiemployer Plan. Neither any GC Party nor any ERISA Affiliate has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment.
Neither any GC Party nor any ERISA Affiliate is required to provide security to
a Benefit Plan under Section 401 (a)(29) of the Code due to a Plan amendment
that results in an increase in current liability for the plan year. Except as
disclosed on Schedule 6.01(Q), neither any GC Party nor any ERISA Affiliate has
by reason of the transaction contemplated hereby, any obligation to make any
payment to any employee pursuant to any Plan or existing contract or
arrangement. Except as provided on Schedule 6.01(Q), no GC Party is the grantor
of a grantor trust established pursuant to Subpart E of Subchapter J of the
Code.
(r) Foreign Employee Benefit Matters. Each Foreign Employee
Benefit Plan is in compliance in all material respects with all laws,
regulations and rules applicable thereto and the respective requirements of the
governing documents for such Plan. The aggregate of the liabilities to provide
all of the accrued benefits under any Foreign Pension Plan does not exceed the
current fair market value of the assets held in the trust or other funding
vehicle for such Plan. With respect to any Foreign Employee Benefit Plan
maintained by any GC Party or any ERISA Affiliate (other than a Foreign Pension
Plan), reasonable reserves have been established in accordance with prudent
business practice or where required by ordinary accounting practices in the
jurisdiction in which such Plan is maintained. The aggregate unfunded
liabilities, after giving effect to any reserves for such liabilities, with
respect to such Plan will not result in a material liability. There are no
actions, suits or claims (other than routine claims for benefits) pending or
threatened against any GC Party or any ERISA Affiliates with respect to any
Foreign Employee Benefit Plan.
(s) Labor Matters. Except as provided in Schedule 6.01(s), as of
the Effective Date, no GC Party is a party to any collective bargaining
agreement. There are no strikes,
46
lockouts or other disputes relating to any collective bargaining or similar
agreement to which such GC Party is a party which would have or is reasonably
likely to have, individually or in the aggregate, a Material Adverse Change.
(t) Securities Activities. No GC Party is engaged in the business
of extending credit for the purpose of purchasing or carrying Margin Stock.
(u) Patents, Trademarks. Permits, etc.; Government Approvals.
(i) Except as set forth on Schedule 6.01(U), each GC Party
owns, is licensed or otherwise has the lawful right to use all permits
and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary
for the conduct of its business as currently conducted which are
material to its condition (financial or otherwise), operations or
performance. There are no claims pending or, to the best of such GC
Party's knowledge, threatened that such GC Party is infringing or
otherwise adversely affecting the rights of any Person with respect to
such permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how and processes, except
for such claims and infringements as do not, in the aggregate, give
rise to any liability on the part of such GC Party which has or is
reasonably likely to have, individually or in the aggregate, a
Material Adverse Change.
(ii) The consummation of the transactions contemplated by
the DIP Loan Documents will not impair such GC Party's ownership of or
rights under (or the license or other right to use, as the case may
be) any permits and governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how or processes in any manner
which has or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Change.
(v) Insurance. Schedule 6.01(V) accurately sets forth all
insurance policies and programs in effect as of the Effective Date with respect
to the property and assets and business of each GC Party, specifying for each
such policy and program, (i) the amount thereof and the amount of the deductible
relating thereto, (ii) the risks insured against thereby, (iii) the name of the
insurer and each insured party thereunder, (iv) the policy or other
identification number thereof and (v) the expiration date thereof.
(w) Assets and Properties. Each GC Party has good and marketable
title or leasehold interests, as applicable, to all of its material assets and
property (tangible and intangible), and all such assets and property are free
and clear of all Liens except Liens securing the DIP Obligations and Liens
permitted under Section 9.03. Substantially all of the assets and property owned
by, leased to or used by such GC Party are in good operating condition and
repair, ordinary wear and tear excepted, are free and clear of any known defects
except such defects as do not substantially interfere with the continued use
thereof in the conduct of normal operations, and are able to serve the function
for which they are currently being used, except in each case where the failure
of such asset to meet such requirements would not have or is not
47
reasonably likely to have, individually or in the aggregate, a Material Adverse
Change. Neither this Agreement nor any other DIP Loan Document, nor any
transaction contemplated under any DIP Loan Document, will affect any right,
title or interest of such GC Party in and to any of such assets in a manner that
would have or is reasonably likely to have, individually or in the aggregate, a
Material Adverse Change.
(x) Bank Accounts. Except as set forth on Schedule 6.01(Y), no GC
Party maintains a bank account or deposits funds with any other financial
institution.
(y) Forfeiture Proceeding. No GC Party is engaged in or proposes
to be engaged in the conduct of any business or activity which could result in a
Forfeiture Proceeding and no Forfeiture Proceeding against it is pending or, to
the best of each GC Party's knowledge, threatened.
ARTICLE VII
REPORTING COVENANTS
The Borrowers covenant and agree so long as any Commitment is
outstanding and thereafter until payment in full of the DIP Obligations:
7.01 Financial Statements. The Borrowers shall maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of consolidated financial statements of the
Borrowers and their Subsidiaries in conformity with GAAP, and each of the
financial statements described below shall be prepared from such system and
records. The Borrowers shall deliver or cause to be delivered to the DIP
Administrative Agent:
(a) Monthly Reports. As soon as practicable, and in any event
within fifteen (20) days after the end of each fiscal month, unaudited
consolidated balance sheets of each Borrower and their Subsidiaries as of the
end of such month, and the related consolidated statements of income of each
Borrower and their Subsidiaries for such month and for the calendar year to date
period, in each case certified by the Chief Financial Officer of the Company as
fairly presenting the financial position of each Borrower and their Subsidiaries
as at the dates indicated and the results of its operations and cash flow for
the month and calendar year to date periods indicated in accordance with GAAP,
subject to normal year-end adjustments.
(b) As soon as practicable, and in any event within forty-five
(45) days after the end of the first three fiscal quarters in each Fiscal Year,
consolidated balance sheets of each Borrower and their Subsidiaries as at the
end of such period and the related statements of income and cash flow of each
Borrower and their Subsidiaries for such fiscal quarter, certified by the Chief
Financial Officer as fairly presenting the financial position of each Borrower
and their Subsidiaries as at the dates indicated and the results of its
operations and cash flow for the fiscal
48
quarter indicated in accordance with GAAP, subject to normal year end
adjustments and reviewed by the Chief Financial Officer.
(c) Annual Reports. As soon as practicable, and in any event
within one hundred twenty (120) days after the end of each Fiscal Year, (i) the
audited consolidated (and unaudited consolidating) balance sheet of each
Borrower and their Subsidiaries as of the end of such Fiscal Year and the
related audited consolidated (and unaudited consolidating) statements of income
and cash flow of each Borrower and their Subsidiaries for such Fiscal Year, and
(ii) a report thereon of an independent certified public accounting firm
reasonably acceptable to the DIP Administrative Agent, which report shall be
unqualified (except for going concern qualifications and similar qualifications
relating to the pendency of the Chapter 11 Cases) and shall state that such
financial statements fairly present, in all material respects, the financial
position of each Borrower and their Subsidiaries as at the dates indicated and
the results of its operations and cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and that the
examination by such accountants in connection with such financial statements has
been made in accordance with generally accepted auditing standards.
(d) Certificates. Together with each delivery of any financial
statement pursuant to paragraphs (a), (b) and (c) of this Section 7.01, a
compliance certificate substantially in the form of Exhibit K attached hereto
and made a part hereof (the "Compliance Certificate") stating that such officer
has reviewed the terms of the DIP Loan Documents, and has made, or caused to be
made under his supervision, a review in reasonable detail of the transactions
and consolidated financial condition of each Borrower and their Subsidiaries
during the accounting period covered by such financial statements, that such
review has not disclosed the existence during or at the end of such accounting
period, and that such officer does not have knowledge of the existence as at the
date of such Compliance Certificate, of any condition or event which constitutes
an Event of Default or Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
each Borrower have taken, is taking and proposes to take with respect thereto,
and such Compliance Certificate shall be in form and substance acceptable to the
DIP Administrative Agent.
(e) Weekly Reports. Each Borrower shall deliver or cause to be
delivered to the DIP Administrative Agent on the Weekly Delivery Date, the
Weekly Budget, and the Budget Compliance Certificate, in each case, certified by
the Chief Financing Officer as having been prepared in good faith. Based on the
Weekly Budget, the DIP Administrative Agent may in its sole discretion agree to
adjust or modify the Closing Budget.
(f) Revised Monthly Closing Budget. On or before the day which is
five (5) Business Days prior to the end of each calendar month, the Borrowers
shall deliver to the DIP Administrative Agent a revised and updated Closing
Budget which shall be in the same form as the initial Closing Budget and shall
(i) be accompanied by a comparison on a line item bais of any differences from
the line items previously projected, and including a forecast of expected
borrowings hereunder, all of which shall be in all respects reasonably
acceptable to the DIP Agents and the Requisite DIP Lenders.
49
(g) UCC Search Results. The DIP Administrative Agent shall
receive on or before October 31, 2000 (or such later date as to which the DIP
Administrative Agent shall consent) certified copies of Requests for Information
or Copies (Form UCC- 11), or equivalent reports, dated as of a date reasonably
satisfactory to the DIP Administrative Agent, listing all effective financing
statements that name any Borrower or any GC Party as debtor and that are filed
in the jurisdictions where any Borrower or any GC Party conduct business,
reflecting the absence of Liens on the assets and properties of the Borrowers
and the GC Parties (including, without limitation, the DIP Collateral) other
than Liens acceptable to the DIP Agents in their sole discretion.
(h) Consolidating Financial Statements. Not later than January
13, 2001, a consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of October 10, 2000.
7.02 Management Reports. The Borrowers shall deliver or cause to
be delivered to the DIP Administrative Agent copies of any management reports
delivered to any GC Party or to any officer or employee thereof by the
accountants in connection with the financial statements delivered pursuant to
Section 7.01.
7.03 Other Financial Information. (a) The Borrowers shall deliver
or cause to be delivered to the DIP Administrative Agent such other
non-privileged reports, contracts, schedules, lists, documents, agreements and
instruments with respect to (i) Chapter 11 Cases, (ii) the DIP Collateral and
(iii) the business, condition (financial or otherwise), operations, performance
or properties of any GC Party as the DIP Administrative Agent may, from time to
time, reasonably request. Each GC Party hereby authorizes the DIP Agents and
their representatives to communicate directly with the accountants and the
Restructuring Professionals and hereby authorizes the accountants and the
Restructuring Professionals to disclose to the DIP Agents and such
representatives and the DIP Lenders any and all financial statements and other
non-privileged information of any kind that such accountants and the
Restructuring Professionals may have with respect to the DIP Loans, the DIP
Collateral or the condition (financial or otherwise), operations, properties and
performance of the Borrowers and their Subsidiaries. The Borrowers, within five
(5) Business Days after the Effective Date, shall deliver a letter addressed to
its accountants and the Restructuring Professionals instructing them to disclose
such information in compliance with this Section 7.03(a).
(b) The Company shall deliver or cause to be delivered to the DIP
Administrative Agent copies of all financial statements, reports and notices, if
any, sent or made available generally by the Company to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission, and of all press releases made available generally by the Company to
the public concerning material developments in the Borrowers' business.
7.04 Events of Default. Promptly, and in any event within three
(3) days, upon any GC Party obtaining knowledge (i) of any condition or event
which constitutes a Default or an Event of Default, (ii) of any condition or
event which has or is reasonably likely to have,
50
individually or in the aggregate, a Material Adverse Change or materially
adversely affect the DIP Collateral Agent's interest in the DIP Collateral or
adversely affect the value of the DIP Collateral in any material respect, such
GC Party shall deliver to the DIP Administrative Agent an Officer's Certificate
specifying (A) the nature and period of existence of any such claimed default,
Event of Default, Default, condition or event, (B) the notice given or action
taken by such Person in connection therewith and (C) what action such GC Party
has taken, is taking and proposes to take with respect thereto.
7.05 Lawsuits. Promptly, and in any event within ten (10) day,
upon any GC Party obtaining knowledge of the institution of, or written threat
of, (i) (A) any action, suit, proceeding or arbitration against or affecting
such GC Party or any asset of such GC Party not previously disclosed pursuant to
Schedule 6.0 l(J)(i) or Schedule 6.01(P) involving an alleged liability or cost
in excess of One Million Dollars ($1,000,000) or any actions, suits, proceedings
or arbitration which in the aggregate involve money or property valued in excess
of One Million Dollars ($1,000,000), (B) any investigation or proceeding before
or by any Governmental Authority, the effect of which is reasonably likely to
limit, prohibit or restrict materially the manner in which such GC Party
currently conducts its business or to declare any substance contained in such
products manufactured or distributed by it to be dangerous, except where the
same is fully covered by insurance (other than applicable deductible), or (C)
any Forfeiture Proceeding, such GC Party shall give written notice thereof to
the DIP Administrative Agent and provide such other information as may be
reasonably available to enable such DIP Lenders and the DIP Administrative Agent
and its counsel to evaluate such matters; (ii) as soon as practicable and in any
event within ten (10) days after the end of each month, each GC Party shall
provide the DIP Administrative Agent with a litigation status report covering
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration reported pursuant to clause (i) above
and shall provide such other information at such time as may be reasonably
available to enable the DIP Administrative Agent and its counsel to evaluate
such matters; and (iii) in addition to the requirements set forth in clauses (i)
and (ii) of this Section 7.05, each GC Party upon request of the DIP
Administrative Agent or the Requisite DIP Lenders shall promptly give written
notice to the DIP Administrative Agent of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to clause (i) or (jj) above and provide such other
information as may be reasonably available to it to enable the DIP
Administrative Agent and its counsel to evaluate such matters.
7.06 Insurance. As soon as practicable and in any event by
October 31, 2000, 2000 and within ten (10 Business Days following the expiration
of any policy, the Borrowers shall deliver to the DIP Administrative Agent (i)
an updated Schedule 6.01(V) in form and substance reasonably satisfactory to the
DIP Administrative Agent and the DIP Lenders outlining all insurance policies
and programs currently in effect with respect to the property and assets and
business of the GC Parties, insurance coverage maintained as of the date of such
report by the GC Parties and the loss payment provisions of such coverage and
(ii) evidence that all premiums with respect to such coverage have been paid
when due.
7.07 ERISA Notices. The Borrowers shall deliver to the DIP
Administrative Agent the following information and notices as soon as possible,
and in any event:
51
(i) within ten (10) Business Days after either a GC Party or
an ERISA Affiliate knows or has reason to know that an ERISA
Termination Event has occurred, a written statement of the Chief
Financial Officer of the Borrowers describing such ERISA Termination
Event and the action, if any, which such GC Party or such ERISA
Affiliate has taken, is taking or proposes to take, with respect
thereto, and, when known, any action taken or threatened by the IRS,
the DOL or the PBGC with respect thereto;
(ii) within ten (10) Business Days after either a GC Party
or an ERISA Affiliate knows or has reason to know that a non-exempt
prohibited transaction (defined in Section 406 of ERISA and Section
4975 of the Code) that could reasonably be expected to have Material
Adverse Effect has occurred, a statement of the Chief Financial
Officer of the Borrowers describing such transaction and the action
which any GC Party or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;
(iii) within ten (10) Business Days after the filing thereof
with the DOL, the IRS or the PBGC, upon the written request of the DIP
Administrative Agent copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to each Benefit Plan;
(iv) within ten (10) Business Days after receipt by any GC
Party or any ERISA Affiliate of each upon the written request of the
DIP Administrative Agent copies of each actuarial report for any
Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(v) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by any GC Party or
any ERISA Affiliate with respect to such request;
(vi) within ten (10) Business Days after the occurrence
thereof, notification of any increases in the benefits of any existing
Benefit Plan or the establishment of any new Plan or the commencement
of contributions to any Benefit Plan to which any GC Party or any
ERISA Affiliate was not previously contributing;
(vii) within ten (10) Business Days after receipt by any GC
Party or any ERISA Affiliate of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit
Plan, copies of each such notice;
(viii) within ten (10) Business Days after receipt by any GC
Party or any ERISA Affiliate of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section
401(a) of the Code, copies of each such letter;
52
(ix) within ten (10) Business Days after receipt by any GC
Party or any ERISA Affiliate of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, copies of each such
notice;
(x) within ten (10) Business Days after any GC Party or any
ERISA Affiliate fails to make a required installment or any other
required payment under Section 412 of the Code on or before the due
date for such installment or payment, a notification of such failure;
(xi) within ten (10) Business Days after any GC Party or any
ERISA Affiliate knows or has reason to know (a) a Multiemployer Plan
has been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (c)
the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan; and
(xii) within ten (10) Business Days after receipt by any GC
Party of a written notice from the DIP Administrative Agent, copies of
any Foreign Employee Benefit Plan and related documents, reports and
correspondence as requested by the DIP Administrative Agent in such
notice.
For purposes of this Section 7.07, any GC Party and any ERISA Affiliate shall be
deemed to know all facts actually known by the administrator of any Plan of
which such GC Party or such ERISA Affiliate is the plan sponsor.
7.08 Environmental Reports; Notices. (a) The Borrowers shall
notify the DIP Administrative Agent in writing, promptly, and in any event
within ten (10) days, upon any GC Party's receipt in writing thereof, of any:
(i) notice or claim to the effect that any GC Party is or
may be liable to any Person as a result of the Release or threatened
Release of any Contaminant into the environment;
(ii) notice that any GC Party has been identified as
potentially responsible for, or is subject to investigation by any
Governmental Authority relating to, the Release or threatened Release
of any Contaminant into the environment, or any unsafe or unhealthful
condition at any Property of any GC Party;
(iii) notice that any Property of any GC Party is subject to
an Environmental Lien;
(iv) notice of violation to any GC Party of any
Environmental, Health or Safety Requirement of Law:
53
(v) notice of commencement or threat of any judicial or
administrative proceeding alleging a violation of any Environmental,
Health or Safety Requirement of Law;
(vi) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law which reasonably could be expected
to have a Material Adverse Effect on the Property, operations or
condition (financial or otherwise) of any GC Party; or
(vii) any proposed acquisition of stock, assets, real
estate, or leasing of Property, or any other action by any GC Party
that could subject any GC Party to environmental, health or safety
Liabilities and Costs that could have a Material Adverse Effect.
(b) The Borrowers shall notify the DIP Administrative Agent in
writing, promptly, and in any event within ten (10) day, upon any filing or
report made by the Borrowers or any other GC Party with any Governmental
Authority with respect to (i) the violation of any Environmental, Health or
Safety Requirement of Law, (ii) any unpermitted Release or threatened Release of
a Contaminant or (iii) any unsafe or unhealthful condition at any Property of
the Borrowers or any other GC Party that with respect to clauses (i), (ii) and
(iii) could have a Material Adverse Change.
7.09 Labor Matters. Each GC Party shall notify the DIP
Administrative Agent in writing, promptly, and in any event within ten (10)
days, after (a) entering into any collective bargaining agreement and (b)
learning of (i) any material labor dispute to which such GC Party may become a
party' any strikes, lockouts or other disputes relating to such GC Party's
plants and other facilities and (ii) any material liability incurred with
respect to the closing of any plant or other facility of such GC Party.
7.10 Other Information. Promptly, and in any event within ten
(10) days, upon receiving a request therefor from any DIP Agent, each GC Party
shall prepare and deliver to the DIP Administrative Agent such other information
with respect to such GC Party or the DIP Collateral, including, without
limitation, schedules identifying and describing the DIP Collateral and any
dispositions thereof, as from time to time may be reasonably requested by any
DIP Agent.
7.11 Chapter 11 Reporting. The Borrowers shall deliver or cause
to be delivered to the DIP Administrative Agent (i) all materials, statements
and reports required to be made or given by the Borrowers or their Subsidiaries
pursuant to the Orders, (ii) all pleadings filed in the Chapter 11 Cases and
(iii) as soon as practicable after completion, all materials, statements and
reports distributed to any official committee in the Chapter 11 Cases.
54
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrowers covenant and agree so long as any Commitment is
outstanding and thereafter until payment in full of the DIP Obligations:
8.01 Existence, etc. Except for those transactions expressly
permitted under Section 9.09, each GC Party shall at all times maintain its
existence and preserve and keep, or cause to be preserved and kept, in full
force and effect its rights and franchises material to its businesses except
where the loss or termination of such rights and franchises does not have or is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Change.
8.02 Powers; Conduct of Business. Each GC Party shall qualify and
remain qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except for those jurisdictions where
failure to so qualify does not have or is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Change.
8.03 Compliance with Laws, Contractual Obligations, etc. Each GC
Party shall, (a) comply with all Requirements of Law (including, without
limitation, Environmental, Health or Safety Requirements of Law), post-Filing
Date Contractual Obligations and restrictive covenants affecting such Person or
the business, property, assets or operations of such Person and (b) obtain as
needed all Permits necessary for its operations and maintain such Permits in
good standing, except in the case where noncompliance with either clause (a) or
(j) above does not have or is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Change.
8.04 Payment of Taxes and Claims. Each GC Party shall pay all
post-Filing Date (a) taxes, assessments and other governmental charges imposed
upon it or on any of its properties or assets or in respect of any of its
franchises, business, income or property before any penalty or interest accrues
thereon, the failure to make payment of which will have or is reasonably likely
to have, individually or in the aggregate, a Material Adverse Change, and (b)
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable prior to the same becoming
subject to a Lien upon any of such Person's properties or assets and prior to
the time when any penalty or fine shall be incurred with respect thereto;
provided, however, that no such taxes, assessments and governmental charges
referred to in clause (a) above or claims referred to in clause (b) above need
be paid if being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if adequate reserves shall have been set
aside therefor in accordance with GAAP.
8.05 Insurance. (a) Each GC Party shall maintain insurance
against loss or damage of the kind customarily insured against by corporations
similarly situated with reputable insurers and with deductibles and on terms
customary for corporations similarly situated. All such policies and programs
shall be maintained with insurers reasonably satisfactory to the DIP
Administrative Agent. Each certificate and policy relating to property damage,
machinery and/or business interruption coverage shall contain an endorsement, in
form and substance reasonably satisfactory to the DIP Administrative Agent,
showing loss payable to the DIP Collateral Agent, for the ratable benefit of the
DIP Lenders, and, if required by the DIP Administrative Agent,
55
naming the DIP Collateral Agent as an additional insured under such policy. Each
certificate and policy relating to coverages other than the foregoing shall
contain an endorsement, if required by the DIP Administrative Agent, naming the
DIP Collateral Agent as an additional insured under such policy. Such
endorsement or an independent instrument furnished to the DIP Administrative
Agent shall provide that the insurance companies will give the DIP Collateral
Agent at least thirty (30) days' written notice before any such policy or
policies of insurance shall be altered adversely to the interests of the DIP
Collateral Agent and the DIP Lenders or canceled and that no act, whether
willful or negligent, or default of any GC Party or any other Person shall
affect the right of the DIP Collateral Agent to recover under such policy or
policies of insurance in case of loss or damage. Borrowers shall deliver to DIP
Administrative Agent a letter from the Borrowers' insurance brokers confirming
that the insurances currently in effect comply with the requirements of this
Agreement. In the event any GC Party, at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required herein or to pay
any premium in whole or in part relating thereto, then the DIP Administrative
Agent, without waiving or releasing any obligation or resulting Event of Default
hereunder, may at any time or times thereafter (but shall be under no obligation
to do so) obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect thereto which the DIP Administrative
Agent deems advisable; provided, however, in the event that the DIP
Administrative Agent decides to obtain and maintain such policies, the DIP
Administrative Agent will give notice to the Borrowers, at least ten days prior
to taking any such action, and an opportunity for the Borrowers to cure such
failure. All sums so disbursed by the DIP Administrative Agent shall be part of
the DIP Obligations hereunder, payable on demand.
(b) Each GC Party will appoint or designate a person, with the
approval of the DIP Administrative Agent, to settle or adjust such claims
individually or in the aggregate not in excess of One Million Dollars
($1,000,000) during any fiscal year without the consent of the DIP
Administrative Agent. In the event such claims exceed the foregoing amount, or
claims individually or in the aggregate have or are likely to have a Material
Adverse Change, such settlements and adjustments thereof shall be made with the
DIP Administrative Agent's consent. As elected by the Requisite DIP Lenders, the
Net Cash Proceeds of any such insurance claim or settlement shall be applied to
replace or repair such asset or to prepay the DIP Loans as provided in Section
3.02(b)(ii), unless the Requisite Lenders otherwise agree, the aggregate
Commitment shall be immediately, automatically, and permanently by the amount of
such Net Cash Proceeds.
8.06 Inspection of Property; Books and Records; Discussions. Each
GC Party shall permit any authorized representative(s) designated by any DIP
Agent to visit and inspect any of the assets of such GC Party, to examine,
audit, check and make copies of its financial and accounting records, books,
journals, documents, orders, receipts and any correspondence and other data
relating to its businesses or the transactions contemplated by the DIP Loan
Documents to inspect any of its Property or operations and to discuss such
Person's affairs, operations, finances, accounts and other matters with its
officers and independent certified public accountants and the Restructuring
Professionals, all upon reasonable notice and at such reasonable times during
normal business hours, as often as may be reasonably requested; provided,
however, that upon the occurrence and during the continuance of an Event of
Default each GC Party shall permit any authorized representative(s) designated
by any DIP Agent or any
56
DIP Lender to do all of the foregoing without notice, at any time and as often
as any DIP Agents or any DIP Lender may request. All such visitations and
inspections shall be at the Borrowers' expense. Each GC Party shall keep and
maintain in all material respects proper books of record and account in which
entries sufficient to prepare financial statements in conformity with GAAP shall
be made of all dealings and transactions in relation to its businesses and
activities, including, without limitation, transactions and other dealings with
respect to the DIP Collateral. If an Event of Default has occurred and is
continuing, each GC Party, upon the DIP Administrative Agent's request, shall
turn over copies of any such records to the DIP Administrative Agent or its
representatives.
8.07 Tax Identification Numbers. Each GC Party shall provide the
DIP Administrative Agent in writing its tax identification number promptly upon
the availability thereof.
8.08 ERISA Compliance. Each GC Party shall, and shall cause each
ERISA Affiliate to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA, the Code, all other applicable
laws, and the regulations and interpretations thereunder and the respective
requirements of the governing documents for such Plans. Each GC Party shall, and
shall cause each ERISA Affiliate to, establish, maintain and operate all Foreign
Employee Benefit Plans to comply in all material respects with all laws,
regulations and rules applicable thereto and the respective requirements of the
governing documents for such Foreign Employee Benefit Plans.
8.09 Maintenance of Property. Each GC Party shall maintain in all
material respects all of its owned and leased property in good, safe and
insurable condition and repair and in accordance with any applicable
manufacturers' specifications and recommendations, and not permit, commit or
suffer any waste (except in the ordinary course of business) or abandonment of
any such property and from time to time shall make or cause to be made all
repairs, renewal and replacements thereof, except in the case where
noncompliance thereof, singularly or in the aggregate, does not have or is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Change.
8.10 Condemnation. Within ten (10) Business Days after learning
of the institution of any proceeding for the condemnation or other taking of any
of the owned or leased Real Property of any GC Party, such GC Party shall notify
the DIP Administrative Agent of the pendency of such proceeding, and permit the
DIP Administrative Agent to participate in any such proceeding, and from time to
time will deliver to the DIP Administrative Agent all instruments reasonably
requested by the DIP Administrative Agent to permit such participation.
8.11 Maintenance of Licenses, Permits, etc. Each GC Party shall
maintain in full force and effect all licenses, permits, governmental approvals,
franchises, authorizations or other rights necessary for the operation of its
business, except where the failure to obtain any of the foregoing would not have
or is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Change; and notify the DIP Administrative Agent in writing,
promptly after learning thereof, of the suspension, cancellation, revocation or
discontinuance of or of any
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pending or threatened action or proceeding seeking to suspend, cancel, revoke or
discontinue any such license, permit, governmental approval, franchise
authorization or right.
8.12 Retention of Restructuring Professionals. The Borrowers
shall continue retaining the Price Waterhouse Copies or such other advisors or
investment bankers acceptable to the DIP Agents (collectively, the
"Restructuring Professionals") pursuant to engagements letters in form and
substance acceptable to the DIP Agents.
8.13 Bank Accounts. (a) At all times maintain the bank accounts
specified in Schedule 6.01(Y) or such other bank accounts acceptable to the DIP
Administrative Agent and the DIP Collateral Agent. All cash collateral and
proceeds of DIP Loans together with all Cash Collateral (as defined in the
Interim Order) shall be deposited and maintained only in a cash concentration
account or in an account permitted by an order of the Bankruptcy Court, as
approved by the DIP Agents, and to the extent not expended by the Borrowers
pursuant to the Closing Budget, used to reduce the DIP Loans.
(b) The Borrowers (i) cause each relevant GC Party and Chase
Manhattan Bank on or before October 31, 2000 (or such later date as to which the
DIP Administrative Agent shall consent) to execute and deliver a Cash Collateral
Pledge Agreement, and (ii) shall exercise commercially reasonable efforts to
cause each other depository institution referred to in clause (a) that is
designated by the DIP Collateral Agent, on or before January 31, 2000 (or such
later date as to which the DIP Administrative Agent shall consent) to execute
and deliver, a Cash Collateral Pledge Agreement.
ARTICLE IX
NEGATIVE COVENANTS
The Borrowers covenant and agree so long as any Commitment is
outstanding and thereafter until payment in full of the DIP Obligations:
9.01 Indebtedness. The GC Parties shall not, directly or
indirectly, create, incur, assume or otherwise become liable with respect to any
Indebtedness, except:
(i) the DIP Obligations;
(ii) post-Filing Date Indebtedness owing by one Borrower
to another;
(iii) post-Filing Date Accommodation Obligations that are
permitted under Section 9.05
(iv) trade payables incurred in the ordinary course of
business in accordance with the Closing Budget; and
(v) Indebtedness expressly permitted pursuant to the
Orders.
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9.02 Sales of Assets. The GC Parties shall not, directly or
indirectly, sell, assign, transfer, lease, convey or otherwise dispose of any
asset, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) the disposition of Equipment if such Equipment is
obsolete or no longer useful in the ordinary course of such GC
Party's business in an aggregate amount not to exceed One Million
Dollars ($1,000,000) during any twelve (12) month period commencing
on the Closing Date;
(ii) the disposition of Property by casualty or
condemnation, provided that the proceeds of any claim or settlement
in connection therewith are applied in accordance with Section
8.05(b)
(iii) assignments, transfers, conveyances and other
dispositions from a Borrower to another Borrower;
(iv) Permitted Dispositions;
(v) all licenses granted in the ordinary course of
business; and
(vi) Excluded Asset Sales.
9.03 Liens. The GC Parties shall not, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with respect to the DIP
Collateral, except:
(i) Liens created by the DIP Loan Documents;
(ii) Liens expressly permitted by the Orders;
(iii) Permitted Existing Liens; and
(iv) Customary Permitted Liens.
9.04 Investments. (a) The GC Parties shall not, directly or
indirectly, make or own any Investment, except:
(i) Investments in Cash Equivalents; and
(ii) Investments by any GC Party in another GC Party,
existing on the Filing Date or an additional investment in Velocom,
Inc. in an amount not to exceed $5,175,000;
(b) No GC Party shall acquire by purchase or otherwise all or
substantially all of the business property or assets of, or stock or other
evidence of beneficial ownership of, any Person.
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(c) No GC Party shall create any new Subsidiary.
9.05 Accommodation Obligations. The GC Parties shall not,
directly or indirectly, create or become or be liable with respect to any
Accommodation Obligation, except: (i) recourse obligations resulting from
endorsement of negotiable instruments for collection in the ordinary course of
business, and (ii) Accommodation Obligations by one GC Party on behalf of
another GC Party but only in connection with Indebtedness permitted under
Section 9.01.
9.06 Restricted Junior Payments. The GC Parties shall not declare
or make any Restricted Junior Payments.
9.07 Change in Nature of Business. The GC Parties shall not make
any material change in the nature of their business from the businesses carried
on as of the Closing Date.
9.08 Transactions with Affiliates. None of the GC Parties shall,
directly or indirectly, enter into or permit to exist any transaction with any
Affiliate of such GC Party except transactions the terms of which are (i)
disclosed to the DIP Agents in detail acceptable to the DIP Agents and (ii) in
the ordinary course of business as determined in good faith by the Chief
Financing Officer, in accordance with customary practice, and not less favorable
to such GC Party than those that might be obtained in an arm's length
transaction at the time from a Person who is not an Affiliate.
9.09 Restriction on Fundamental Changes. (a) No GC Party shall,
directly or indirectly, enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of its business or assets, whether now or
hereafter acquired, except for Permitted Dispositions except the closing of
theaters and the disposition of assets relating to such closed theaters;
provided, that such theaters do not operate at the locations listed in Exhibit B
to the Collateral Assignment of Leases.
(b) No GC Party shall change its corporate, capital or legal
structure.
(c) No GC Party shall issue any Capital Stock.
9.10 Sales and Leasebacks. No GC Party shall become liable, by
assumption or by Accommodation Obligation, with respect to any lease, whether a
Capital Lease or an operating lease, of any Property (whether real or personal
or mixed) (i) which such GC Party has sold or transferred or will sell or
transfer to any other Person or (ii) which such GC Party intends to use for
substantially the same purposes as any other asset which it has sold or
transferred or will sell or transfer to any other Person in connection with such
lease.
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9.11 Margin Regulations. No GC Party shall use all or any portion
of the proceeds of any DIP Loan made under this Agreement to purchase or carry
Margin Stock.
9.12 ERISA. No GC Party shall, nor shall it permit any ERISA
Affiliate to, do any of the following to the extent that such act or failure to
Act would result in the aggregate, after taking into account any other such acts
or failure to act, in a Material Adverse Change:
(i) engage, or permit any ERISA Affiliate to engage, in
any prohibited transaction described in Sections 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available
or a private exemption has not been previously obtained from the DOL;
(ii) fail, or permit any ERISA Affiliate to fail, to
timely pay contributions or annual installments required under
Section 412 of the Code or due with respect to any waived funding
deficiency with respect to any Benefit Plan;
(iii) terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan which would result in any liability of
any GC Party or any ERISA Affiliate under Title IV of ERISA;
(iv) fail to make any contribution or payment to any
Multiemployer Plan which any GC Party or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto;
(v) amend, or permit any ERISA Affiliate to amend, a
Benefit Plan resulting in an increase in current liability for the
plan year such that any GC Party or any ERISA Affiliate is required
to provide security to such Benefit Plan under Section 401(a)(29) of
the Code;
(vi) permit any unfunded liabilities with respect to any
Foreign Pension Plan; or
(vii) fail, or permit any GC Party or ERISA Affiliate to
fail, to pay any required contributions or payments to a Foreign
Pension Plan on or before the due date for such required installment
or payment.
9.13 Amendment of Governing Documents. Except as expressly
permitted under this Agreement, no GC Party shall amend, supplement or otherwise
change its Governing Documents in any material respect which is adverse to the
interests of the DIP Lenders.
9.14 Environmental Liabilities. Except as disclosed in Schedule
6.01(P), no GC Party shall become subject to any Liabilities and Costs arising
out of or relating to environmental, health or safety matters which reasonably
could be expected--to result in expenditures by such GC Party in excess of Two
Million Dollars ($2,000,000) in a particular
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instance or Five Million Dollars ($5,000,000) in the aggregate, for any rolling
twelve month period.
9.15 No Activities Leading to Forfeiture. No GC Party shall
engage in the conduct of any business or activity which are likely to result in
a Forfeiture Proceeding.
9.16 Management Fees and Consulting Fees. The GC Parties shall
not pay any management fee or consulting fee or transfer any Property to any
Affiliate.
9.17 Capital Expenditures. None of the GC Parties shall make or
incur any Capital Expenditures during any Fiscal Year except as expressly
provided in the Closing Budget.
9.18 DIP Financing. No GC Party shall, directly or indirectly,
incur or apply (or permit the application by any Person) to the Bankruptcy Court
for authority to incur, or suffer to exist, any (i) indebtedness having the
priority afforded by Section 364(c) or (d) of the Bankruptcy Code (including any
Superpriority Claims) other than the financing provided for under this Agreement
and the other DIP Loan Documents or as expressly authorized pursuant to the
Orders or (ii) obligation to make adequate protection payments, or otherwise
provide adequate protection, other than (A) as expressly contemplated by the
Orders or (B) as approved by the DIP Agents.
9.19 Alteration of Rights of DIP Lenders. No GC Party shall,
directly or indirectly, seek to limit, affect or modify, or apply (or permit the
application by any Person) to the Bankruptcy Court to limit, affect or modify
any of the DIP Agents' or the DIP Lenders' rights with respect to the DIP
Obligations (or its liens with respect to the DIP Obligations and the priority
thereof), pursuant to any Reorganization Plan or otherwise.
9.20 Chapter 11 Claims. Except for the Carve-Out and in
connection with, and only to the extent incurred on or after the Consummation
Date in respect of, a Reorganization Plan, no GC Party shall, apply (or permit
the application by any Person) to the Bankruptcy Court for the authority to,
directly or indirectly, incur, create, assume, suffer or permit any claim, Lien
or encumbrance (other than post-Filing Date Customary Permitted Liens) against
any Borrower, any Subsidiary of any Borrower, or any of their respective assets
in the Chapter 11 Cases to be pari passu with, or senior to, the Liens and
claims of the DIP Lenders granted and arising hereunder and under the Orders.
9.21 Critical Vendor Payments. No GC Party shall, directly or
indirectly, make any payments to vendors or suppliers or any other Person on
account of any pre-Filing Date indebtedness without the prior consent of the DIP
Agents or order of the Bankruptcy Court on notice to the DIP Agents or except as
expressly provided in the Closing Budget.
9.22 Reclamation Claims. No GC Party shall make any payments or
transfer any Property on account of claims asserted by any vendors of any GC
Party for reclamation in accordance with Section 546(g) of the Bankruptcy Code.
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9.23 Sale or Pledge of Investment Portfolio. No GC Party
(including subsidiaries of GCC Investments, Inc.) shall pledge, sell, or
otherwise transfer or encumber any marketable securities or other investment
portfolio assets; except that shares of El Sitio may be sold provided that all
proceeds of any such sale are used only to pay expenses of the Borrowers
incurred in the ordinary course of business.
9.24 Minimum EBITDA. The Borrowers shall not permit their
combined EBITDA (earnings before interest, taxes, depreciation and
amortization), before synthetic lease payments, to be less than (a) $1,000,000
during the month of November, 2000, (b) $2,500,000 during the month of December,
2000, and (c) thereafter such minimum EBITDA as shall be required by the
Administrative Agent after consultation with the Borrowers.
9.25 Minimum Sales. The Borrowers shall not permit their combined
gross sales to be less than (a) $22,000,000 during the month of November, 2000,
(b) $25,000,000 during the month of December, 2000, and (c) thereafter, such
minimum gross sales as shall be required by the Administrative Agent after
consultation with Borrowers.
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.01 Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrowers shall fail
to pay any principal of the DIP Loans or the Reimbursement Obligations when due,
or the Borrowers shall fail to pay any interest on any DIP Loan or any other DIP
Obligation (including any prepayment obligation) within three (3) Business Days
after such interest or DIP Obligation shall become due.
(b) Breach of Representation or Warranty. Any representation or
warranty made or deemed to have been made by or on behalf of any GC Party under,
relating to or in connection with this Agreement, the Note, any of the other DIP
Loan Documents or any certificate or statement furnished by any GC Party
pursuant to or in connection with this Agreement shall be false or misleading in
any material respect when made.
(c) Breach of Certain Covenants. Any GC Party shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on such GC Party under Section, 8.12 or Article IX of this Agreement.
(d) Other Defaults. Any GC Party shall fail duly and punctually
to perform or observe any term, covenant or obligation binding on such GC Party
under this Agreement or under any other DIP Loan Document (other than as
described in Sections 10.01(c) above and such failure shall continue for ten
(10) days after written notice from the DIP Administrative Agent.
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(e) Conversion to Chapter 7; Other Matters. The Bankruptcy Court
shall enter an order with respect to any GC Party dismissing its Chapter 11 Case
or converting it to a case under Chapter 7 of the Bankruptcy Code, or appointing
a trustee in its Chapter 11 Case or appointing a responsible officer or an
examiner with enlarged powers relating to the operation of such GC Party's
business (beyond those set forth in Sections 11 06(a)(3) or (4)) under
Bankruptcy Code Section 1106(b).
(f) Lift of Automatic Stay. The Bankruptcy Court shall enter an
order granting relief from the automatic stay applicable under Section 362 of
the Bankruptcy Code to the holder of any Lien other than Liens in favor of the
DIP Collateral Agent in any assets of any of the GC Parties having an aggregate
value in excess of $1,000,000.
(g) Order Modification. An order of the Bankruptcy Court shall be
entered in any of the Chapter 11 Cases amending, supplementing, modifying,
staying for a period in excess of ten (10) days, reversing, vacating or
otherwise modifying any of the Orders or any DIP Loan Document, or any GC Party
shall apply for authority to do so, absent the prior written consent of the DIP
Agents and the DIP Lenders.
(h) Opposition. Any GC Party shall support (in any such case by
way of any motion or other pleading filed with the Bankruptcy Court or any other
writing to another party-in-interest executed by or on behalf of a GC Party) any
other Person's opposition of any motion made in the Bankruptcy Court by any DIP
Lenders seeking confirmation of the amount of such DIP Lenders' claim or the
validity and enforceability of the Liens in favor of such DIP Lenders
(including, without limitation, any existing Liens securing Pre-Petition
Indebtedness owed to such DIP Lenders), or support any other matter set forth in
clauses (e), (g) or (o); provided, however, that this provision shall not be
construed to impair any GC Party's right to assert positions with respect to
valuation of collateral.
(i) Disallowance. Any GC Party shall seek to, or shall support
(in any such case by way of any motion or other pleading filed with the
Bankruptcy Court or any other writing to another party-in-interest executed by
or on behalf of a GC Party) any other Person's motion to, disallow in whole or
in part any DIP Lenders' claim in respect of the Existing Obligations or the DIP
Obligations or to challenge the validity and enforceability of the Liens in
favor of the DIP Collateral Agent or any DIP Lenders (including, without
limitation, any existing Liens securing Pre-Petition Indebtedness owed to such
DIP Lenders); provided, however, that this provision shall not be construed to
impair any GC Party's right to assert positions with respect to valuation of
collateral.
(j) Interim Order Modified or Terminated. From and after the date
of entry thereof, the Interim Order shall cease to be in full force and effect
(or shall have been vacated, stayed, reversed, modified or amended), in each
case without the consent of the DIP Agents, and the Final Order shall not have
been entered prior to such cessation (or vacatur, stay, reversal, modification
or amendment).
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(k) Final Order. The Final Order shall not have been entered by
the Bankruptcy Court on or before forty-five (45) days after the Filing Date.
(l) Final Order Modified or Terminated. From and after the date
of entry thereof, the Final Order shall cease to be in full force and effect (or
shall have been vacated, stayed, reversed, modified or amended), in each case
without the consent of the DIP Agents.
(m) Orders. Any GC Party shall fail to comply with the terms of
the Orders in any material respect.
(n) Pre-Filing Date Payments. Any GC Party thereof shall make (or
shall apply to the Bankruptcy Court for authority to make) any payments on any
Debt, Indebtedness or other obligation or liability of such GC Party (other than
as expressly permitted under the Orders or expressly permitted hereunder,
including under Section 9.21) arising before the Filing Date.
(o) Superpriority Claim. An order of the Bankruptcy Court shall
be entered granting another Superpriority Claim or Lien pari passu with or
senior to that granted to the DIP Collateral Agent and the DIP Lenders pursuant
to the Agreement and the Orders.
(p) Failure to Make Adequate Protection Payments. Any GC Party
shall fail to make an adequate protection payment to the Existing Agents as set
forth in the Orders.
(q) Unsupported Reorganization Plan. Any GC Party shall file a
Reorganization Plan that does not provide for payment in full of the DIP
Obligations in cash on the Termination Date or otherwise on terms acceptable to
the DIP Agents.
(r) Material Adverse Change. Since the Filing Date, there shall
have occurred any Material Adverse Change.
(s) Judgments and Attachments. Any money judgment (other than a
money judgment fully covered by insurance as to which the insurance company has
acknowledged coverage in writing), writ or warrant of attachment, or similar
process against any GC Party or any assets of any GC Party involving in any case
a post-Filing Date amount in excess of One Million Dollars ($1,000,000) is
entered and shall remain undischarged, unvacated, unbonded or unstayed for a
period of thirty (30) days.
(t) DIP Loan Documents; Failure of Security. At any time, for any
reason, (i) any DIP Loan Document ceases to be in full force and effect or any
GC Party seeks to repudiate its obligations thereunder and the Liens intended to
be created thereby are, or any GC Party seeks to render such Liens, invalid and
unperfected, or (ii) Liens in favor of the DIP Collateral Agent and/or the DIP
Lenders contemplated by the DIP Loan Documents shall, at any time, for any
reason, be invalidated or otherwise cease to be in full force and effect, or
such Liens shall be subordinated or shall not have the priority contemplated by
this Agreement or the DIP Loan Documents.
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(u) ERISA Liabilities. Any ERISA Termination Event occurs which
will or is reasonably likely to subject either a GC Party or an ERISA Affiliate
to a liability which will, or is reasonably likely to have, a Material Adverse
Change.
(v) Waiver Application. The plan administrator of any Benefit
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the substantial business
hardship upon which the application for the waiver is based could subject either
any GC Party or any ERISA Affiliate to liability which will or is reasonably
likely to have a Material Adverse Change.
(w) Chief Financial Officer. The Company's current Chief
Financial Officer shall cease to be employed by the Company and shall not,
within 60 days after such cessation of employment be replaced with a new Chief
Financial Officer satisfactory to the Requisite Lenders.
(x) Bankruptcy of Non-Borrower Subsidiaries. Any of the
non-Borrower subsidiaries of any Borrower shall be the subject of any bankruptcy
or insolvency proceeding unless bankruptcy proceedings are commenced in the
Bankruptcy Court and are administratively consolidated with the Cases, and
within thirty (30) days after the commencement of such proceedings, the
Bankruptcy Court enters an order adding the newly filed subsidiary as a
co-Borrower under this Agreement, and ordering that such Subsidiary's assets
shall be subject to a first-priority security interest in favor of the DIP
Lenders under Section 364(d)).
(y) Reorganization Plan. Failure of the Reorganization plan to
(a) be approved by the votes necessary for confirmation by June 30, 2001, (b) to
be confirmed by September 1, 2001, or (c) to be consummated by the Maturity
Date.
An Event of Default shall be deemed "continuing" until cured or
waived in writing in accordance with Section 12.09.
10.02 Rights and Remedies. (a) Acceleration and Termination. Upon
the occurrence and during the continuance of any other Event of Default, the DIP
Administrative Agent shall, at the request, or may with the consent, of the
Requisite DIP Lenders, declare (i) that the Commitments are terminated,
whereupon the Commitments shall immediately terminate, (ii) the unpaid principal
amount of, and any and all accrued interest on, the DIP Obligations and all
accrued fees to be, and the same shall thereupon be, immediately due and
payable; and (j)(y); (iv) set off any monies held as cash collateral and apply
such amounts to the DIP Obligations; and/or (v) exercise any and all remedies
under this Agreement, the DIP Collateral Documents, any other DIP Loan Document,
the Orders, or under applicable law. The foregoing actions may be taken without
presentment, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration, except as may be
specifically provided for herein), all of which are hereby expressly waived by
the Borrowers, provided that before declaring the DIP Obligations as due and
payable or realizing on any part of the DIP Collateral, the DIP Collateral Agent
shall
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have provided five (5) Business Days' prior notice of such action to each
Borrower, any statutory committee and the U.S. Trustee.
(b) Enforcement. Each GC Party acknowledges that in the event any
GC Party fails to perform, observe or discharge any of its respective
obligations or liabilities under this Agreement or any other DIP Loan Document,
any remedy of law may prove to be inadequate relief to the DIP Agents and the
DIP Lenders; therefore, the GC Parties agree that the DIP Agents and the DIP
Lenders shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
ARTICLE XI
THE AGENTS
11.01 Appointment. (a) Each DIP Lender hereby designates and
appoints General Electric Capital Corporation as the DIP Administrative Agent of
such DIP Lender under this Agreement, and each DIP Lender hereby irrevocably
authorizes the DIP Administrative Agent to take such action on its behalf under
the provisions of this Agreement, the Note, and the DIP Loan Documents and to
exercise such powers as are set forth herein or therein together with such other
powers as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement or the other DIP Loan Documents, the DIP
Administrative Agent shall not be required to exercise any discretion or take
any action. Notwithstanding the foregoing, the DIP Administrative Agent shall be
required to act or refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Requisite DIP
Lenders (unless the instructions or consent of all of the DIP Lenders is
required hereunder or thereunder) and such instructions shall be binding upon
all DIP Lenders; provided, however, the DIP Administrative Agent shall not be
required to take any action which (i) the DIP Administrative Agent believes will
expose it to personal liability unless the DIP Administrative Agent receives an
indemnification satisfactory to it from the DIP Lenders with respect to such
action or (ii) is contrary to this Agreement, the Note, the other DIP Loan
Documents or applicable law. The DIP Administrative Agent agrees to act as such
on the express conditions contained in this Article XI.
(b) Each DIP Lender hereby designates and appoints General
Electric Capital Corporation as the DIP Collateral Agent of such DIP Lender
under this Agreement, and each DIP Lender hereby irrevocably authorizes the DIP
Collateral Agent to take such action on its behalf under the provisions of this
Agreement, the Note and the DIP Loan Documents and to exercise such powers as
are set forth herein or therein together with such other powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement or the other DIP Loan Documents, the DIP Collateral Agent shall
not be required to exercise any discretion or take any action. Notwithstanding
the foregoing, the DIP Collateral Agent shall be required to act or refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Requisite DIP Lenders (unless the instructions or
consent of all of the DIP Lenders is required hereunder or thereunder) and such
instructions shall be binding upon all DIP Lenders; provided, however, the DIP
Collateral Agent shall not be required to take any action which (i) the DIP
Collateral Agent believes will expose it to personal liability unless the DIP
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Collateral Agent receives an indemnification satisfactory to it from the DIP
Lenders with respect to such action or (ii) is contrary to this Agreement, the
Note, the other DIP Loan Documents or applicable law. The DIP Collateral Agent
agrees to act as such on the express conditions contained in this Article XI.
(c) Each DIP Lender hereby designates and appoints Fleet National
Bank as the DIP Documentation Agent of such DIP Lender under this Agreement, and
each DIP Lender hereby irrevocably authorizes the DIP Documentation Agent to
take such action on its behalf under the provisions of this Agreement, the Note
and the DIP Loan Documents and to exercise such powers as are set forth herein
or therein together with such other powers as are reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement or the other DIP
Loan Documents, the DIP Documentation Agent shall not be required to exercise
any discretion or take any action. Notwithstanding the foregoing, the DIP
Syndication Agent shall be required to act or refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite DIP Lenders (unless the instructions or consent of all of the DIP
Lenders is required hereunder or thereunder) and such instructions shall be
binding upon all DIP Lenders; provided, however, the DIP Documentation Agent
shall not be required to take any action which (i) the DIP Documentation Agent
believes will expose it to personal liability unless the DIP Syndication Agent
receives an indemnification satisfactory to it from the DIP Lenders with respect
to such action or (ii) is contrary to this Agreement, the Note, the other DIP
Loan Documents or applicable law. The DIP Documentation Agent agrees to act as
such on the express conditions contained in this Article XI.
(d) The provisions of this Article XI are solely for the benefit
of the DIP Agents and the DIP Lenders, and none of the GC Parties shall have any
rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Section 11.07). In performing its functions and duties
under this Agreement, the DIP Agents shall act solely as agents of the DIP
Lenders and do not assume and shall not be deemed to have assumed any obligation
or relationship of agency, trustee or fiduciary with or for any GC Party. The
DIP Agents may perform any of their respective duties hereunder, or under the
DIP Loan Documents, by or through their respective agents or employees.
11.02 Nature of Duties. The DIP Agents shall not have any duties
or responsibilities except those expressly set forth in this Agreement or in the
DIP Loan Documents. The duties of the DIP Agents shall be mechanical and
administrative in nature. The DIP Agents shall not have by reason of this
Agreement a fiduciary relationship in respect of any Holder. Nothing in this
Agreement or any of the DIP Loan Documents, expressed or implied, is intended to
or shall be construed to impose upon the DIP Agents any obligations in respect
of this Agreement or any of the DIP Loan Documents except as expressly set forth
herein or therein. Each DIP Lender shall make its own independent investigation
of the financial condition and affairs of the Borrowers and the other GC Party
in connection with the DIP Loans hereunder and shall make its own appraisal of
the credit worthiness of the Borrowers and the other GC Parties initially and on
a continuing basis, and the DIP Agents shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Holder
with any credit or other information with respect thereto (except for reports
required to be delivered by the DIP Agents
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under the terms of this Agreement). If the DIP Agents seek the consent or
approval of the DIP Lenders to the taking or refraining from taking of any
action hereunder, the DIP Agents shall send notice thereof to each DIP Lender.
The DIP Agents shall promptly notify each DIP Lender at any time that the DIP
Lenders so required hereunder have instructed the DIP Agents to act or refrain
from acting pursuant hereto.
11.03 Rights, Exculpation. etc. (a) Liabilities;
Responsibilities. None of the DIP Agents, any Affiliate of any DIP Agent, or any
of their respective officers, directors, employees, agents, attorneys or
consultants shall be liable to any Holder or any other Person for any action
taken or omitted by them hereunder, under the Note or under any of the DIP Loan
Documents, or in connection therewith, except that no Person shall be relieved
of any liability imposed by law for gross negligence or willful misconduct. No
DIP Agent shall be liable for any apportionment or distribution of payments made
by it in good faith, and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Holder to whom payment was due, but not made, shall be to recover from other
Holders any payment in excess of the amount to which they are determined to have
been entitled. The DIP Agents shall not be responsible to any Holder or any
other Person for any recitals, statements, representations or warranties herein
or for the execution, effectiveness, genuineness, validity, legality,
enforceability, collectability, or sufficiency of this Agreement, the Note or
any of the other DIP Loan Documents or the transactions contemplated thereby, or
for the financial condition of the Borrowers or any other GC Party. None of the
DIP Agents are making any representation or warranty in connection with, and
shall not be required to make any inquiry concerning, the DIP Collateral, the
performance or observance of any of the terms, provisions or conditions of this
Agreement, the Note or any of the DIP Loan Documents, or the financial condition
of the Borrowers or any other GC Party, or the existence or possible existence
of any Default or Event of Default.
(b) Right to Request Instructions. Any DIP Agent may at any time
request instructions from the DIP Lenders (and after all DIP Obligations owing
to the DIP Lenders have been paid in full, from the Holders) with respect to any
actions or approvals which by the terms of any of the DIP Loan Documents such
DIP Agent is permitted or required to take or to grant, and such DIP Agent shall
be absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the DIP Loan
Documents until it shall have received such instructions from those DIP Lenders
or Holders, as the case may be, from whom such DIP Agent is required to obtain
such instructions for the pertinent matter in accordance with the DIP Loan
Documents. Without limiting the generality of the foregoing, no Holder shall
have any right of action whatsoever against any DIP Agent as a result of such
DIP Agent acting or refraining from acting under the DIP Loan Documents in
accordance with the instructions of all DIP Lenders or, where required by the
express terms of this Agreement, a lesser proportion of the DIP Lenders, or of
all Holders (after the DIP Obligations owing to the DIP Lenders have been paid
in full).
11.04 Reliance. Each DIP Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by
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it in good faith to be genuine and correct and to have been signed, sent or made
by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the DIP Loan Documents and its duties hereunder or
thereunder, upon advice of legal counsel, independent public accountants and
other experts selected by it.
11.05 Indemnification. To the extent that any DIP Agent is not
reimbursed and indemnified by the Borrowers, the DIP Lenders will reimburse and
indemnify each DIP Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, reasonable costs,
reasonable expenses or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by, or asserted against it in any way relating to or
arising out of the DIP Loan Documents or any action taken or omitted by such DIP
Agent under the DIP Loan Documents, in proportion to each DIP Lender's Pro Rata
Share; provided that no DIP Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such DIP Agent's gross
negligence or willful misconduct. The obligations of the DIP Lenders under this
Section 11.05 shall survive the payment in full of the DIP Loans and all other
DIP Obligations and the termination of this Agreement. In the event that after
payment and distribution of any amount by the DIP Administrative Agent, or the
DIP Collateral Agent, any DIP Lender or third party, including any GC Party, any
creditor of any GC Party or a trustee in bankruptcy, recovers from the DIP
Administrative Agent, or the DIP Collateral Agent, any amount found to have been
wrongfully paid to the DIP Administrative Agent, or the DIP Collateral Agent, or
disbursed by the DIP Administrative Agent, or the DIP Collateral Agent to DIP
Lenders, the DIP Lenders, in proportion to their respective Pro Rata Shares,
shall reimburse the DIP Administrative Agent, or the DIP Collateral Agent for
all such amounts.
11.06 The DIP Agents Individually. With respect to the DIP Loans
made by any of them, the DIP Agents shall have and may exercise the same rights
and powers hereunder and are subject to the same obligations and liabilities as
and to the extent set forth herein for any other DIP Lender. The terms "DIP
Lenders" or "Requisite DIP Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include each of the DIP Agents in their
respective individual capacities as a DIP Lender or one of the Requisite DIP
Lenders. Each of General Electric Capital Corporation and Fleet National Bank
and their respective Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any GC
Party or any of its Affiliates as if it were not acting as or DIP Agent
hereunder, including, without limitation, engaging in activities under the
Existing Credit Agreement and the Existing Lease.
11.07 Successor DIP Agents. (a) Resignation. Any DIP Agent may
resign from the performance of all its functions and duties hereunder at any
time by giving at least thirty (30) days' prior written notice to the Borrowers
and the DIP Lenders. Such resignation shall take effect upon the acceptance by a
successor DIP Agent of appointment pursuant to this Section 11.07.
(b) Appointment by Requisite DIP Lenders. Upon any such notice of
resignation, the Requisite DIP Lenders shall have the right to appoint a
successor DIP Agent
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selected from among the DIP Lenders, which appointment shall be subject to the
prior written approval of the Borrowers (which may not be unreasonably withheld,
and shall not be required upon the occurrence and during the continuance of an
Event of Default or Default).
(c) Appointment by Retiring DIP Agent. If a successor DIP Agent
shall not have been appointed within the thirty (30) day period provided in
paragraph (a) of this Section 11.07, the retiring DIP Agent shall then appoint a
successor DIP Agent who shall serve as such DIP Agent until such time, if any,
as the Requisite DIP Lenders appoint a successor DIP Agent as provided above.
Each DIP Lender shall indemnify and hold such retiring DIP Agent harmless for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, reasonable costs, reasonable expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against it in any way relating to or arising out of the
appointment of a successor DIP Agent pursuant to the terms of this paragraph
(c).
(d) Rights of the Successor and Retiring DIP Agents. Upon the
acceptance of any appointment hereunder as DIP Administrative Agent or DIP
Collateral Agent or DIP Documentation Agent, as the case may be, by a successor
DIP Agent, such successor DIP Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring DIP Agent,
and the retiring DIP Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring DIP Agent's resignation hereunder as an
DIP Agent, the provisions of this Article XI shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was such DIP Agent under
this Agreement.
11.08 Relations Among DIP Lenders. Each DIP Lender agrees that it
will not take any legal action, nor institute any actions or proceedings,
against any GC Party or any other GC Party or with respect to any DIP
Collateral, without the prior written consent of the Requisite DIP Lenders.
Without limiting the generality of the foregoing, no DIP Lender may accelerate
or otherwise enforce its portion of the DIP Obligations, except in accordance
with Section 10.02(a).
11.09 Concerning the DIP Collateral and the DIP Loan Documents.
(a) Authority. Subject to the terms and conditions hereof, each DIP Lender
authorizes and directs the DIP Collateral Agent to enter into the DIP Loan
Documents relating to the DIP Collateral for the benefit of the DIP Lenders.
Each DIP Lender agrees that any action taken by any DIP Agent or all DIP Lenders
(or, where required by the express terms of this Agreement, a lesser proportion
of the DIP Lenders) in accordance with the provisions of this Agreement or the
other DIP Loan Documents, and the exercise by any DIP Agent or all DIP Lenders
(or, where so required, such lesser proportion) of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the DIP Lenders. Without
limiting the generality of the foregoing, (i) the DIP Administrative Agent shall
have the sole and exclusive right and authority to act as the disbursing and
collecting agent for the DIP Lenders with respect to all payments and
collections arising in connection with this Agreement and the DIP Loan Documents
relating to the DIP Collateral and (ii) the DIP Collateral Agent shall have the
sole and exclusive right and authority to execute and deliver each DIP Loan
Document relating to the DIP Collateral and accept delivery of each such
agreement delivered by any GC Party; act as collateral agent for the DIP Lenders
for purposes of the perfection of all
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security interests and Liens created by such agreements and all other purposes
stated therein; manage, supervise and otherwise deal with the DIP Collateral;
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and Liens created or purported to be created
by the DIP Loan Documents; and except as may be otherwise specifically
restricted by the terms of this Agreement or any other DIP Loan Document,
exercise all remedies given to the DIP Collateral Agent or the DIP Lenders with
respect to the DIP Collateral under the DIP Loan Documents, applicable law or
otherwise.
(b) Release of DIP Collateral. (i) Each DIP Lender hereby directs
the DIP Collateral Agent to release or to subordinate any Lien held by the DIP
Collateral Agent for the benefit of the DIP Lenders (A) against all of the DIP
Collateral, upon payment in full of the DIP Obligations and the Cash Collateral
Loans and termination of this Agreement and (B) against the DIP Collateral sold,
assigned, transferred, conveyed or otherwise disposed of pursuant to Sections
9.02 when the DIP Collateral Agent receives a certificate from the Borrowers
pursuant to which the Borrowers represent and warrant that the DIP Collateral is
being sold, assigned, transferred, conveyed or otherwise disposed of in
compliance with Section 9.02 and, in each case, upon the DIP Collateral Agent's
receipt of satisfactory Bankruptcy Court approvals.
(ii) Each DIP Lender hereby directs the DIP Collateral Agent
to execute and deliver or file such termination and partial release statements
and do such other things as are necessary to release Liens to be released
pursuant to this Section 11.09(b) promptly upon the effectiveness of any such
release. Upon request by the DIP Collateral Agent at any time, the DIP Lenders
will confirm in writing the DIP Collateral Agent's authority to release
particular types or items as DIP Collateral pursuant to this Section 11.09.
(iii) Without in any manner limiting the DIP Collateral
Agent's authority to act without any specific or further authorization or
consent by the DIP Lenders (as set forth in Section 11.09(b)), each DIP Lender
agrees to confirm in writing, upon request by the Borrowers, the authority to
release or subordinate Liens in the DIP Collateral conferred upon the DIP
Collateral Agent under Section 11.09(b). So long as no Event of Default or
Default is then continuing, upon receipt by the DIP Collateral Agent of any such
written confirmation from the DIP Lenders of its authority to release any
particular items or types of DIP Collateral, and upon at least five (5) Business
Days prior written request by the Borrowers, the DIP Collateral Agent shall (and
is hereby irrevocably authorized by DIP Lenders to) execute such documents as
may be necessary to evidence the release of the Liens granted to the DIP
Collateral Agent for the benefit of DIP Lenders herein or pursuant hereto upon
such DIP Collateral; provided, that (A) the DIP Collateral Agent shall not be
required to execute any such document on terms which, in the DIP Collateral
Agent's opinion, would expose the DIP Collateral Agent to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (B) such release shall not in any manner
discharge, affect or impair the DIP Obligations or any Liens upon (or
obligations of the Borrowers in respect of) any interests retained by the GC
Parties all of which shall continue to constitute part of the DIP Collateral.
(iv) The DIP Collateral Agent shall have no obligation
whatsoever to the DIP Lenders or to any other Person to assure that the DIP
Collateral exists or is owned by any
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GC Party or is cared for, protected or insured or has been encumbered or that
the Liens granted to the DIP Collateral Agent pursuant to the DIP Loan Documents
have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the DIP Collateral Agent in this Section 11.09 or in any of the DIP
Loan Documents, it being understood and agreed that in respect of the DIP
Collateral, or in any act, omission or event related thereto, the DIP Collateral
Agent may act in any manner it may deem appropriate, in its sole discretion,
given its own interest in the DIP Collateral as one of the DIP Lenders and that
the DIP Collateral Agent shall have no duty or liability whatsoever to any DIP
Lender unless required to act or refrain from acting upon the instructions of
the DIP Lenders and then only in accordance with Section 11.01.
11.10 DIP Documentation Agent. The parties hereto agree that the
DIP Documentation Agent has no special rights, powers or obligations under this
Agreement but are entitled, in its capacity as DIP Documentation Agent
hereunder, to the indemnities provided under Section 12.05.
ARTICLE XII
MISCELLANEOUS
12.01 Assignments and Participations. (a) Assignments. No
assignment or participation of any DIP Lender's rights or obligations under this
Agreement and the Note shall be made except in accordance with this Section
12.01. Each DIP Lender may assign all or a portion of its rights and obligations
under this Agreement and the Note in accordance with the provisions of this
Section 12.01.
(b) Limitations on Assignments. Each assignment shall be subject
to the following conditions: (i) each assignment shall be of a constant, and not
a varying, ratable percentage of all of an assigning DIP Lender's rights and
obligations in respect of any of its DIP Loans or Commitments being assigned
under this Agreement and the Note and, in the case of a partial assignment,
shall be in a minimum principal amount of One Million Dollars ($1,000,000)
(treating any two or more funds acquiring Loans or Commitments at or about the
same time, which funds are managed or advised by the same investment advisor, as
a single Eligible Assignee for purposes of satisfying such $1,000,000 minimum)
except that such minimum principal amount limitation shall not apply to an
assignment by any DIP Lender of any portion of its rights and obligations to
another DIP Lender, an Affiliate of a DIP Lender, an Approved Fund of any DIP
Lender or an assignment by any DIP Lender of all of its rights or obligations to
another Person, (ii) each such assignment shall be to an Eligible Assignee, and
(iii) the parties to each such assignment, with prior written notice to the DIP
Administrative Agent, shall execute and deliver to the DIP Administrative Agent,
for its acceptance and recording in the Register, of an Assignment and
Acceptance, together with a processing and recordation fee of Three Thousand
Five Hundred Dollars ($3,500) (provided that no fee shall be payable in the case
of an assignment to another DIP Lender, an Affiliate of any DIP Lender or an
Approved Fund; and
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provided further that in the case of contemporaneous assignments by a DIP Lender
to more than one fund managed by the same investment advisor (which funds are
not then DIP Lenders hereunder, Affiliates thereof or Approved Funds), only a
single fee of $3,500 shall be payable for all such contemporaneous assignments).
Notwithstanding the foregoing, any DIP Lender may assign any or all of its
rights and obligations under this Agreement to any of its Affiliates or to any
Approved Fund without notice to or consent of the DIP Administrative Agent and
without being subject to the foregoing conditions other than notice to the DIP
Administrative Agent and the execution and delivery to the DIP Administrative
Agent, for its acceptance and recording in the Register, of an Assignment and
Acceptance. For purposes of this Section 12.01, an "Approved Fund" shall mean,
with respect to any DIP Lender that is a fund that invests in bank loans, any
other fund that invests in bank loans which is managed or advised by the same
investment advisor as such DIP Lender or by an Affiliate of such investment
advisor. Upon such execution, delivery, acceptance and recording in the
Register, from and after the effective date specified in each Assignment and
Acceptance and accepted by the DIP Administrative Agent, (x) the assignment
specified in such Assignment and Acceptance shall be effective, (y) the assignee
thereunder shall, in addition to any rights and obligations hereunder held by it
immediately prior to such effective date, if any, have the rights and
obligations hereunder that have been assigned to it pursuant to such Assignment
and Acceptance and shall, to the fullest extent permitted by law, have the same
rights and benefits hereunder as if it were an original DIP Lender hereunder,
and (z) the assigning DIP Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of such assigning DIP Lender's rights and obligations
under this Agreement, the assigning DIP Lender shall cease to be a party
hereto).
(c) The Register. The DIP Administrative Agent shall maintain at
its address referred to in Section 12.10 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the "Register") for
the recordation of the names and addresses of the DIP Lenders and the Commitment
of each DIP Lender from time to time and whether such DIP Lender is an original
DIP Lender or the assignee of another DIP Lender pursuant to an Assignment and
Acceptance. The DIP Administrative Agent shall incur no liability of any kind to
any GC Party, any DIP Lender or any other Person with respect to its maintenance
of the Register or the recordation of information therein. The Register shall be
available for inspection by the Borrowers or any DIP Lender at any reasonable
time and from time to time upon reasonable prior notice. No assignment shall be
effective unless and until the Assignment and Acceptance has been accepted by
the DIP Administrative Agent and registered in the Register.
Notwithstanding anything to the contrary contained in the
previous paragraph of this Section 12.01(c), the DIP Loans (including the Note
evidencing such DIP Loans) are registered obligations and the right, title, and
interest of the DIP Lenders and their assignees in and to such DIP Loans shall
be transferrable only upon recordation of such transfer and of the transferee
and its interest in and to the loans in the Register. No transfer by a DIP
Lender or an assignee of any interest in any of the DIP Loans shall be permitted
or effective unless and until the transfer and the transferee's interest in the
DIP Loan is recorded in the Register. In addition, notwithstanding anything to
the contrary contained in Section 12.01(e), no sale of a participation
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shall be permitted or effective unless and until such sale of a participating
interest in principal and interest on the DIP Loan and any other amounts owing
under this Agreement is recorded in the Register. In the case of a
participation, the Register shall record the participant's interest in principal
and interest on the DIP Loan and any other amounts owing under this Agreement
that such participant has purchased. All recordations of transfer and of the
transferee's interest shall be conclusive, absent manifest error, as to
beneficial ownership of interests in the DIP Loans. To the extent that the Note
is issued in accordance with the terms hereof, it shall only evidence the DIP
Lender's or an assignee's right title and interest in and to the related DIP
Loan, and in no event is any such Note to be considered a bearer instrument or
obligation. This Section 12.0 1(c) shall be construed so that the DIP Loans are
at all times maintained in "registered form" within the meaning of Sections
163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and any related
regulations (or any successor provisions of the Internal Revenue Code or such
regulations). Solely for purposes of this Section 12.0 1(c) and for tax purposes
only, the DIP Administrative Agent shall act as the Borrowers' agent for
purposes of maintaining such notations of transfer and recordation of the
beneficial ownership of the transferee in the Register. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers and each of their Subsidiaries, the DIP Agent and the
DIP Lenders may treat each Person whose name is recorded in the Register (other
than a participant) as a DIP Lender hereunder for all purposes hereof.
(d) Fee. Upon its receipt of an Assignment and Acceptance
executed by the assigning DIP Lender and an Eligible Assignee and a processing
and recordation fee of $3500 (payable by the assigning DIP Lender or the
assignee, as shall be agreed between them if required pursuant to Section
12.01(b)), the DIP Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in compliance with this Agreement and in substantially
the form of Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrowers and the other DIP Lenders.
(e) Participations. Each DIP Lender may sell participations to
one or more commercial banks, lending institutions, finance companies, insurance
companies, other financial institutions or funds in or to all or a portion of
its rights and obligations under and in respect of any and all facilities under
this Agreement (including, without limitation, all or a portion of any or all of
its Commitments hereunder and the DIP Loans owing to it); provided, however,
that (i) such DIP Lender's obligations under this Agreement (including, without
limitation, its Commitments hereunder) shall remain unchanged, (ii) such DIP
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrowers, the DIP Agents and the
other DIP Lenders shall continue to deal solely and directly with such DIP
Lender in connection with such DIP Lender's rights and obligations under this
Agreement, provided, however, that the Borrowers and the DIP Administrative
Agent may deal with participants in respect of participants' rights and
obligations under Section 3.03 as provided therein, and (iv) such participant's
rights to agree or to restrict such DIP Lender's ability to agree to the
modification, waiver or release of any of the terms of the DIP Loan Documents or
to the release of any DIP Collateral covered by the DIP Loan Documents, to
consent to any action or failure to act by any party to any of the DIP Loan
Documents or any of their respective Affiliates,
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or to exercise or refrain from exercising any powers or rights which any DIP
Lender may have under or in respect of the DIP Loan Documents or any DIP
Collateral, shall be limited to the right to consent to (A) the increase in the
Commitment of the DIP Lender from whom such participant purchased a
participation, (B) the reduction of the principal of, or rate or amount of
interest on, the DIP Loans subject to such participation (other than by the
payment or prepayment thereof), (C) the postponement of any date fixed for any
payment of principal of, or interest on, the DIP Loan(s) subject to such
participation (except with respect to any modifications of the provisions
relating to prepayments of Loans and other DIP Obligations), and (D) the release
of all or substantially all of the DIP Collateral except as provided in Section
11.09(b). Upon the sale of a participation, the selling DIP Lender shall notify
the DIP Administrative Agent in writing of the name of the transferee and its
interest in principal and interest on the DIP Loan and the DIP Administrative
Agent shall promptly record such information in the register in accordance with
Section 12.01(c). Such DIP Lender shall notify the DIP Administrative Agent in
writing of the termination of such participation and the DIP Administrative
Agent shall promptly record such information in the Register.
(f) Information Regarding the Borrowers. Any DIP Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 12.01, disclose to the assignee or
participant or proposed assignee or participant, any information relating to the
Borrowers furnished to such DIP Lender by any DIP Agent or by or on behalf of
the Borrowers; provided that, prior to any such disclosure, such assignee or
participant, or proposed assignee or participant, shall agree to preserve the
confidentiality of any confidential information described therein.
(g) Payment to Participants. With the exception of Section 3.03,
anything in this Agreement to the contrary notwithstanding, in the case of any
participation, all amounts payable by the Borrowers under the DIP Loan Documents
shall be calculated and made in the manner and to the parties required hereby as
if no such participation had been sold.
(h) DIP Lenders' Creation of Security Interests. Notwithstanding
any other provision set forth in this Agreement, (i) any DIP Lender may at any
time create a security interest in all or any portion of its rights under this
Agreement and its Note (including, without limitation, DIP Obligations owing to
it and the Note held by it) in favor of any Federal Reserve Bank of the Federal
Reserve Board without notice to or consent of the Borrowers or the DIP Agents,
and (ii) any DIP Lender that is a fund that invests in bank loans may, without
notice to or consent of the Borrowers or the DIP Agents, assign or pledge all or
any portion of its rights under this Agreement (including, without limitation,
DIP Obligations owing to it and the Note held by it) to any holders of
obligations owed, or securities issued, by such fund as security for such
obligations or securities, or to any trustee for, or any other representative
of, such holders; provided that any foreclosure or similar action by such
trustee shall be subject to the provisions of this Section 12.01 concerning
assignments.
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12.02 Relations Among DIP Lenders. Each DIP Lender agrees that it
will not take any action, nor institute any actions or proceedings, against the
Borrowers with respect to the DIP Obligations or any DIP Collateral, without the
prior written consent of the DIP Agents.
12.03 Joint and Several Liability, Etc. Each of the Borrowers
shall be jointly and severally liable for the Obligations. DIP Lenders may,
without notice to or consent of any of the Borrowers and with or without
consideration, release, discharge, compromise or settle with, waive, grant
indulgences to, proceed against or otherwise deal with, any of the Borrowers and
any DIP Collateral given by such Borrower without in any way affecting,
limiting, modifying, discharging or releasing any of the obligations and
liabilities under this Agreement or the other DIP Loan Documents of any other
Borrowers. Each Borrower consents and agrees that (a) none of the DIP Agents or
the DIP Lenders shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of
such Borrower or against or in payment of any or all of the obligations and
liabilities of such Borrower under this Agreement or any of the other DIP Loan
Documents, (b) any rights such Borrower may have against any other Borrowers for
contribution, exoneration from payment or otherwise, in respect of any amounts
paid by such Borrower pursuant to any of the DIP Loan Documents or which
continue to be owing pursuant to any of the Financing Documents, shall be
postponed until the Obligations have been indefeasibly paid in full and no
commitments therefor are outstanding and (c) the DIP Agents and the DIP Lenders
may enforce and collect the obligations and liabilities of such Borrower
hereunder or under the other Financing Documents irrespective of any attempt,
pursuit, enforcement or exhaustion of any rights and remedies the DIP Lenders
may at any time have to collect the obligations and liabilities hereunder or
under the other DIP Loan Documents of any other Borrowers.
12.04 Expenses. (a) Generally. The Borrowers agree upon demand to
pay, or reimburse each DIP Agent for, all of such DIP Agent's reasonable audit,
legal, appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other out-of-pocket costs and expenses of
every type and nature (including, without limitation, the reasonable fees,
expenses and disbursements of legal counsel, auditors, accountants, appraisers,
printers, insurance and environmental advisers, and other consultants and
agents) incurred by such DIP Agent in connection with (i) the preparation,
negotiation, and execution of this Agreement, the other DIP Loan Documents and
the Orders; (ii) the interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article V), the other DIP Loan Documents and the making of the DIP
Loans hereunder; (iii) the creation, perfection or protection of the Liens under
the DIP Loan Documents; (iv) the ongoing administration of this Agreement, the
DIP Loans and the Orders, including consultation with attorneys and
professionals in connection therewith and with respect to such DIP Agent's
rights and responsibilities under this Agreement, the other DIP Loan Documents
and the Orders and, to the extent provided under Section 8.06, such DIP Agent's
periodic inspections and audits of the Borrowers; (v) the protection, collection
or enforcement of any of the DIP Obligations or the enforcement of any of the
DIP Loan Documents; (vi) the commencement, defense or intervention in any court
proceeding relating in any way to the DIP Obligations, the assets of the
Borrowers, this Agreement or any of the other DIP Loan Documents; (vii) the
response to, and preparation for, any subpoena or request for document
production with which such
77
DIP Agent is served or deposition or other proceeding in which such DIP Agent is
called to testify, in each case, relating in any way to the DIP Obligations, the
assets of the Borrowers, this Agreement or any of the other DIP Loan Documents;
(viii) the ongoing monitoring by the DIP Agents of the Chapter 11 Cases,
including attendance by the DIP Agents and their counsel at hearings or other
proceedings and the ongoing review of pleadings, motions, orders or other
documents filed with the Bankruptcy Court or with respect to the Chapter 11
Cases; and (ix) any amendments, consents, waivers, assignments, restatements, or
supplements to any of the DIP Loan Documents or the Orders and the preparation,
negotiation, and execution of the same.
(b) After Default. The Borrowers further agree to pay or
reimburse each DIP Agent and each DIP Lender upon demand for all out-of-pocket
costs and expenses, including, without limitation, attorneys' fees incurred by
such DIP Agent or such DIP Lender after the occurrence of an Event of Default
(i) in enforcing any DIP Loan Document or any of the DIP Obligations or any
security therefor or exercising or enforcing any other right or remedy available
by reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "workout" or in any other or additional insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in any litigation or
in filing a petition, complaint, answer, motion or other pleadings in any legal
proceeding relating to the DIP Obligations, the DIP Collateral, the Property,
the Borrowers and related to or arising out of the transactions contemplated
hereby or by any of the other DIP Loan Documents; (iv) in connection with the
ongoing monitoring by the DIP Agents and each DIP Lender of the Chapter 11
Cases, including attendance by any DIP Agent or DIP Lender and their respective
counsel at hearings or other proceedings and the ongoing review of pleadings,
motions, orders or other documents filed with the Bankruptcy Court or with
respect to the Chapter 11 Cases; and (v) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise) described in clauses
(i) through (iii) above.
12.05 Indemnity. The Borrowers further agree to defend, protect,
indemnify, and hold harmless each DIP Agent, the DIP Documentation Agents, and
each DIP Lender, and each of their respective Affiliates, and their respective
officers, directors, employees, attorneys and agents (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article V) (collectively, the
"Indemnitees") from and against any and all liabilities, obligations, losses
(other than loss of profits), damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(excluding any taxes and including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of
(a) this Agreement, the Note, the other DIP Loan Documents, the Orders, or any
act, event or transaction related or attendant thereto, the making of the DIP
Loans, the management of such DIP Loans, the use or intended use of the proceeds
of the DIP Loans, or any of the transactions contemplated by the DIP Loan
Documents or related to the Cash Collateral Loans, (b) any Liabilities and Costs
relating to or arising from any Environmental, Health or Safety Requirements of
Law, the past, present or future operations of any GC Party or any of its
predecessors in interest, or the past, present or future environmental,
78
health or safety condition of the Property of any GC Party, the presence,
Release or threatened Release of any Contaminant into the environment resulting
from the past, present, or future operations of any GC Party (collectively, the
"Indemnified Matters"); or (c) the Bankruptcy Court proceedings related to the
Chapter 11 Cases; provided, however, the Borrowers shall have no obligation to
an Indemnitee hereunder with respect to Indemnified Matters directly caused by
or resulting from the willful misconduct or gross negligence of such Indemnitee,
as determined by a court of competent jurisdiction in a final non-appealable
judgment or order. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers shall contribute the
maximum portion which they are permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees.
12.06 Change in Accounting Principles. If any change in the
accounting principles used in the preparation of the most recent financial
statements referred to in Section 7.01 are hereafter required or permitted by
the rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrowers and their Subsidiaries with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the covenants, standards or terms found in Article IX, the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the desired result that
the criteria for evaluating compliance with such covenants, standards and terms
by the Borrowers and their Subsidiaries shall be the same after such changes as
if such changes had not been made; provided, however, no change in GAAP that
would affect the method of calculation of any of the covenants, standards or
terms shall be given effect in such calculations until such provisions are
amended, in a manner satisfactory to the Requisite DIP Lenders and the
Borrowers, to so reflect such change in accounting principles.
12.07 Setoff. In addition to any Liens granted under the DIP Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each DIP Lender
and any Affiliate of any DIP Lender is hereby authorized by the Borrowers at any
time and from time to time, without notice to any Person (any such notice being
hereby expressly waived) to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured (but not
including tax, payroll and trust accounts)) and any other Indebtedness at any
time held or owing by such DIP Lender to or for the credit or the account of the
Borrowers against and on account of the DIP Obligations of the Borrowers to such
DIP Lender or any of its Affiliates, including, but not limited to, all DIP
Loans and all claims of any nature or description arising out of or in
connection with this Agreement or the Note, irrespective of whether or not (i)
such DIP Lender shall have made any demand hereunder or (ii) the DIP
Administrative Agent, at the request or with the consent of the Requisite DIP
Lenders, shall have declared the principal of and interest on the Loans and
other amounts due hereunder and under the Note to be due and payable as
permitted by Article X and even though such DIP Obligations may be contingent or
unmatured. Each DIP Lender agrees that it shall not, without the express consent
of the Requisite DIP Lenders, and that it shall, to the
79
extent it is lawfully entitled to do so, upon the request of the Requisite DIP
Lenders, exercise its setoff rights hereunder against any accounts of the
Borrowers now or hereafter maintained with such DIP Lender or any of its
Affiliates.
12.08 Ratable Sharing. The DIP Lenders agree among themselves
that (i) with respect to all amounts received by them which are applicable to
the payment of the DIP Obligations (excluding the fees and amounts described in
Sections 3.03, 3.04 and 4.01(e)) equitable adjustment will be made so that, in
effect, all such amounts will be shared among them ratably in accordance with
their Pro Rata Shares, whether received by voluntary payment, by the exercise of
the right of setoff or banker's lien, by counterclaim or cross-action or by the
enforcement of any or all of the DIP Obligations (excluding the fees and amounts
described in Sections 3.03, 3.04 and 4.0 1(e)) or the DIP Collateral, (ii) if
any of them shall by voluntary payment or by the exercise of any right of
counterclaim, setoff, banker's lien or otherwise, receive payment of a
proportion of the aggregate amount of the DIP Obligations held by it, which is
greater than the amount which such DIP Lender is entitled to receive hereunder,
the DIP Lender receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such DIP
Obligations owed to the others so that all such recoveries with respect to such
DIP Obligations shall be applied ratably in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such party to the extent necessary to adjust for such recovery, but
without interest except to the extent the purchasing party is required to pay
interest in connection with such recovery. The Borrowers agree that any DIP
Lender so purchasing a participation from another DIP Lender pursuant to this
Section 12.08 may, to the fullest extent permitted by law, exercise all its
rights of payment (including, subject to Section 12.07, the right of setoff)
with respect to such participation as fully as if such DIP Lender were the
direct creditor of the Borrowers in the amount of such participation.
12.09 Amendments and Waivers. Unless otherwise provided in this
Agreement, no amendment or modification of any provision of this Agreement or
the Note shall be effective without the written agreement of the Requisite DIP
Lenders and the Borrowers, and no termination or waiver of any provision of this
Agreement or the Note, or consent to any departure by the Borrowers therefrom,
shall be effective without the written concurrence of the Requisite DIP Lenders,
which the Requisite DIP Lenders shall have the right to grant or withhold in
their sole discretion. Notwithstanding the foregoing, any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions of this Agreement and the Note shall be effective only by a
written agreement, signed by each DIP Lender: (a) waiver of any of the
conditions specified in Section 5.02 (except with respect to a condition based
upon another provision of this Agreement, the waiver of which requires only the
concurrence of the Requisite DIP Lenders), (b) increase in the amount of the
Commitment of any DIP Lender, (c) reduction of the principal of, rate or amount
of interest on the DIP Loans or any fees or other amounts payable to such DIP
Lender (other than by the payment or prepayment thereof), (d) postponement of
any Maturity Date or the Termination Date or any other date fixed for any
payment of principal of, or interest on, the DIP Loans or any fees (except with
respect to any modifications of the provisions
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relating to prepayments of DIP Loans and other DIP Obligations), (e) release of
all or a substantial portion of the DIP Collateral (except as provided in
Section 11.09(b)), (f) amendment of the definition of "Requisite DIP Lenders",
(g) amendment of Section 12.08 or this Section 12.09, (h) modify (x) the
provisions of the Orders with respect to the priority of claims thereunder or
(y) the Superpriority Claim status of the DIP Lenders in respect of any DIP
Loans, extensions of credit hereunder or (i) amend, supplement, modify or waive
any provisions of this Agreement which expressly requires the consent of all DIP
Lenders. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
the Borrowers in any case shall entitle the Borrowers to any other or further
notice or demand in similar or other circumstances. Notwithstanding anything to
the contrary contained in this Section 12.09, no amendment, modification, waiver
or consent shall affect the rights or duties of the DIP Agents under this
Agreement or the other DIP Loan Documents, unless made in writing and signed by
the affected DIP Agent in addition to the DIP Lenders required above to take
such action.
12. 10 Notices. (a) Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied, telexed or
sent by courier service or United States certified mail and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
a telecopy or telex or four (4) Business Days after deposit in the United States
mail with postage prepaid and properly addressed. Notices to the DIP Agents
pursuant to Articles II, III or XI shall not be effective until received by the
DIP Agents. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 12.10) shall
be as set forth below each party's name on Exhibit A attached hereto or the
signature page of any applicable Assignment and Acceptance, or, as to each
party, at such other address as may be designated by such party in a written
notice to all of the other parties to this Agreement.
(b) The Borrowers agree to indemnify and hold harmless each
Indemnitee from and against any and all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments, suits, costs, disbursements
and expenses of any kind or nature (including, without limitation, reasonable
fees and disbursements of counsel to any such Indemnitee) which may be imposed
on, incurred by or asserted against any such Indemnitee in any manner relating
to or arising out of any action taken or omitted by such Indemnitee in good
faith in reliance on any notice or other written communication in the form of a
telecopy or facsimile purporting to be from Borrowers; provided that the
Borrowers shall have no obligation under this Section 12. l0(b) to an Indemnitee
with respect to any indemnified matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order.
12.11 Survival of Warranties and Agreements. All representations
and warranties made herein and all obligations of the Borrowers in respect of
taxes, indemnification and expense reimbursement shall survive the execution and
delivery of this Agreement and the other DIP Loan Documents, the making and
repayment of the DIP Loans and the termination of the commitments or this
Agreement and shall not be limited in any way by the passage of time or
81
occurrence of any event and shall expressly cover time periods when any of the
DIP Agents or any of the DIP Lenders may have come into possession or control of
any assets of the Borrowers.
12.12 Failure or Indulgence Not Waiver: Remedies Cumulative. No
failure or delay on the part of any DIP Agent or any DIP Lender in the exercise
of any power, right or privilege under this Agreement, the Note or any of the
other DIP Loan Documents shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this Agreement, the Note and the other DIP
Loan Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
12.13 Marshalling: Payments Set Aside. Neither any DIP Agent nor
any DIP Lender shall be under any obligation to marshal any assets in favor of
the Borrowers or any other Person or against or in payment of any or all of the
DIP Obligations. To the extent that the Borrowers make a payment or payments to
the DIP Agents or the DIP Lenders, or any of such Persons receives payment from
the proceeds of the DIP Collateral or exercises its rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party,
then to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
12.14 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Default if such action is
taken or condition exists.
12.15 Severability. In case any provision in or obligation under
this Agreement, any of the Note or the other DIP Loan Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
12.16 Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.
12.17 Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PROVISIONS THEREOF
82
OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND, TO THE
EXTENT APPLICABLE, THE BANKRUPTCY CODE.
12.18 Limitation of Liability. No claim may be made by any
Borrower, any DIP Lender, any DIP Agent or any other Person against any other
DIP Agent or any other DIP Lender or the Affiliates, directors, officers,
employees, attorneys or agents of any of them for any special, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement or the Note or the other DIP Loan Documents, or any act,
omission or event occurring in connection therewith; and the Borrower, each DIP
Lender and each DIP Agent hereby waive, release and agree not to ▇▇▇ upon any
such claim for any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
12.19 Successors and Assigns. This Agreement, the Note and the
other DIP Loan Documents shall be binding upon the parties thereto and their
respective successors and assigns and shall inure to the benefit of the parties
thereto and the successors and permitted
assigns of the DIP Lenders. The rights and obligations hereunder of the
Borrowers, or any interest therein, may not be assigned without the written
consent of all DIP Lenders.
12.20 Certain Consents and Waivers.
(a) Personal Jurisdiction. (i) EACH OF THE DIP AGENTS, THE DIP
LENDERS AND THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE JURISDICTION OF THE BANKRUPTCY COURT AND, IF THE
BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION, TO THE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK,
NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN
SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED
TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH
THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURT OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE BORROWERS IRREVOCABLY DESIGNATE AND
APPOINT THE COMPANY, AS THEIR AGENT (THE "PROCESS AGENT"), WITH AN OFFICE
LOCATED AT ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, FOR SERVICE
OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH
OF THE DIP AGENTS, THE DIP LENDERS AND THE BORROWERS AGREE THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER
83
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE BORROWERS WAIVE IN ALL DISPUTES ANY OBJECTION THAT THEY MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) THE BORROWERS AGREE THAT EACH DIP AGENT SHALL HAVE THE
RIGHT TO PROCEED AGAINST THEM OR THEIR PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE THE DIP AGENTS AND THE DIP LENDERS TO REALIZE ON THE DIP COLLATERAL OR
ANY OTHER SECURITY FOR THE DIP OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF ANY DIP AGENT OR ANY DIP LENDER. THE BORROWERS
AGREE THAT THEY WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY ANY DIP AGENT OR ANY DIP LENDER TO REALIZE ON THE DIP COLLATERAL OR
ANY OTHER SECURITY FOR THE DIP OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF ANY DIP AGENT OR ANY DIP LENDER. THE BORROWERS WAIVE ANY
OBJECTION THAT THEY MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY DIP AGENT
OR ANY DIP LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. THE BORROWERS IRREVOCABLY CONSENT TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR THE BORROWERS' NOTICE ADDRESS SPECIFIED
BELOW. THE BORROWERS IRREVOCABLY WAIVE ANY OBJECTION (INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS OR THAT THE AFOREMENTIONED COURTS LACK PERSONAL
JURISDICTION OVER THE BORROWERS) WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTE OR ANY OTHER DIP LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY DIP AGENT OR ANY DIP LENDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY DIP
AGENT OR ANY DIP LENDER TO BRING PROCEEDINGS AGAINST THE BORROWERS IN THE COURTS
OF ANY OTHER JURISDICTION.
(c) WAIVER OF JURY TRIAL. EACH OF THE DIP AGENTS, THE DIP LENDERS
AND THE BORROWERS, IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT, THE NOTE AND THE OTHER DIP LOAN DOCUMENTS.
12.21 Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents, or supplements hereto may be
executed in counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts
84
together shall constitute but one and the same instrument. This Agreement shall
become effective in accordance with its terms against each Borrower, each DIP
Lender and each DIP Agent on the date hereof when each such party hereto
executes and delivers this Agreement. This Agreement and each of the other DIP
Loan Documents shall be construed to the extent reasonable to be consistent one
with the other, but to the extent that the terms and conditions hereof are
actually inconsistent with the terms and conditions of any other DIP Loan
Document, this Agreement shall govern.
12.22 Entire Agreement. This Agreement, taken together with all
of the other DIP Loan Documents and the orders, embodies the entire agreement
and understanding among the parties hereto and supersedes all prior agreements
and understandings, written and oral, relating to the subject matter hereof.
12.23 Confidentiality. The DIP Lenders shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement and
identified as such by the Borrowers in accordance with such DIP Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by a bona fide offeree, transferee or participant
in connection with the contemplated transfer or participation or as required or
requested by any Governmental Authority or representative thereof or pursuant to
legal process and shall require any such offeree, transferee or participant to
agree (and require any of its offerees, transferees or participants to agree) to
comply with this Section 12.23. In no event shall any DIP Lender be obligated or
required to return any materials furnished by the Borrowers; provided, however,
each offeree shall be required to agree that if it does not become a transferee
or participant it shall return all materials furnished to it by the Borrowers in
connection with this Agreement.
12.24 Orders. To the extent that any term or provision of this
Agreement or any other DIP Loan Document is inconsistent with the terms or
provisions of the Interim Order or the Final Order, it is agreed that the
Interim Order and Final Order shall govern.
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WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
GENERAL ELECTRIC CAPITAL
CORPORATION, as DIP Lender
By:___________________________________
Name:
Title:
FLEET NATIONAL BANK,
as DIP Lender
By:___________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as DIP Administrative Agent
By:___________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as DIP Collateral Agent
By:___________________________________
Name:
Title:
FLEET NATIONAL BANK,
as DIP Document Agent
By:___________________________________
Name:
Title:
86
GC COMPANIES, INC.
By:_____________________________________
G. ▇▇▇▇ ▇▇▇▇▇▇▇
President
SUBSIDIARIES:
GENERAL CINEMA THEATRES, INC.
GCC INVESTMENTS, INC.
G.C. THEATRE CORP. OF CALIFORNIA
GENERAL CINEMA CORP. OF ▇▇▇▇▇▇▇
GENERAL CINEMA THEATRE OF COLUMBIA,
INC.
GENERAL CINEMA THEATRES OF
DELAWARE, INC.
GENERAL CINEMA CORP. OF GREENWOOD
GENERAL CINEMA THEATRES OF ILLINOIS,
INC.
GENERAL CINEMA CORP. OF INDIANA
GENERAL CINEMA CORP. OF LANDMARK
GENERAL CINEMA CORP. OF MARYLAND,
INC.
GENERAL CINEMA CORP. OF
MASSACHUSETTS
GENERAL CINEMA CORP. OF MAYFAIR
GENERAL CINEMA CORP. OF ▇▇▇▇▇
GENERAL CINEMA CORP. OF MINNESOTA
INC.
GENERAL CINEMA THEATRES OF NEW
JERSEY, INC.
GENERAL CINEMA THEATRES OF NEW
MEXICO, INC.
GENERAL CINEMA CORP. OF NEW YORK,
INC.
GENERAL CINEMA CORP. OF NORTH
CAROLINA
GENERAL CINEMA CORP. OF
NORTHWESTERN
GENERAL CINEMA THEATRES OF OHIO, INC.
GENERAL CINEMA CORP. OF ▇▇▇▇▇▇ ▇▇▇▇▇
GENERAL CINEMA CORP. OF PARKWAY
POINTE
GENERAL CINEMA CORP. OF
87
PENNSYLVANIA
GENERAL CINEMA CORP. OF PLYMOUTH
MEETING
GENERAL CINEMA CORP. OF SOUTH
CAROLINA
GENERAL CINEMA CORP. OF TEXAS
GENERAL CINEMA CORP. OF VIRGINIA
GENERAL CINEMA CORP. OF WASHINGTON
GENERAL CINEMA THEATRE OF
YORKTOWN, INC.
By:_____________________________________
▇▇▇▇ ▇▇▇▇▇▇▇, Vice President of
each of the foregoing
88
FIRST AMENDMENT TO DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
This FIRST AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREEMENT (the
"Amendment") dated this ____ day of October, 2000, is made among (a) GC
COMPANIES, INC., and certain of its Subsidiaries listed on the signature page
below, as debtors-in-possession in cases pending under Chapter 11 of the
Bankruptcy Code (collectively, the "Borrowers"), (b) GENERAL ELECTRIC CAPITAL
CORPORATION, FLEET NATIONAL BANK and THE BANK OF NOVA SCOTIA, as lenders
(together with all other financial institutions from time to time a party to the
DIP Credit Agreement, the "DIP Lenders"), (c) General Electric Capital
Corporation, in its capacity as administrative agent for the DIP Lenders (in
such capacity, the "DIP Administrative Agent"), (d) General Electric Capital
Corporation, in its capacity as collateral agent for the DIP Lenders (in such
capacity, the "DIP Collateral Agent") and (e) Fleet National BANK, as
documentation agent for the DIP Lenders (in such capacity, the "DIP
Documentation Agent", and collectively with the DIP Administrative Agent and the
DIP Collateral Agent, the "DIP Agents").
RECITALS
Pursuant to that certain Debtor-In-Possession Credit Agreement (as the
same may from time to amended, restated, supplemented, or otherwise modified,
the "DIP Credit Agreement") effective as of October 13, 2000 by and among (a)
the Borrowers, (b) the DIP Lenders, (c) the DIP Administrative Agent, (d) the
DIP Collateral Agent and (e) the DIP Documentation Agent, the DIP Lenders agreed
to make available to the Borrowers DIP Loans (as defined in the DIP Credit
Agreement) in the maximum principal amount not to exceed $45,000,000. The
Borrowers' obligation to repay the DIP Loans with interest was evidenced by a
DIP Loan Note of even date herewith from the Borrowers made payable to the order
of DIP Administrative Agent for the benefit of the DIP Lenders (as the same may
from time to time be amended, restated, supplemented, or otherwise modified, the
"Original Note").
The DIP Credit Agreement, the Original Note, and all other documents
now or hereafter executed and delivered in connection with the DIP Loans are
hereinafter called collectively, the "DIP Loan Documents."
The Borrowers, the DIP Lenders and the DIP Agents have now agreed (a)
to replace the Original Note with individual notes made payable to the
individual DIP Lenders, and (b) to amend certain terms and conditions of the DIP
Credit Agreement subject to and upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the recitals set forth above, the
promises and mutual covenants hereinafter contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged by all
parties hereto, the DIP Lenders and the Borrowers hereby agree as follows:
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AGREEMENTS
1. Recitals. The DIP Lenders and the Borrowers each acknowledge that
the above Recitals to this Amendment are true and correct, and agree that the
same are incorporated by reference into the body of this Amendment. Capitalized
terms used herein and not defined shall have the meanings given to such terms in
the DIP Credit Agreement.
2. Amendments and Modifications to DIP Credit Agreement.
2.1. Effective as of the date hereof, the definition of "Note"
appearing in Section 1.01 of the DIP Credit Agreement is hereby
deleted, and the following is hereby inserted in lieu thereof:
"Note" or "Notes" means a promissory note of the Borrowers so
issued pursuant to Section 2.02.
2.2. Effective as of the date hereof, all references in the
DIP Credit Agreement to the Note shall henceforth mean and refer to the Notes as
defined in the DIP Credit Agreement pursuant to this Amendment.
2.3. Effective as of the date hereof, Section 2.02 is hereby
deleted, and the following is hereby inserted in lieu thereof:
2.02. Promise to Pay; Evidence of Debt. The Borrowers agree to
pay when due the principal amount of each DIP Loan which is
made to the Borrowers, and further agree to pay all unpaid
interest accrued thereon, in accordance with the terms of this
Agreement and the promissory notes evidencing the DIP Loans
owing to the DIP Lenders. Upon a DIP Lender's written request,
the Borrowers shall execute and deliver to such DIP Lender a
promissory note to evidence the DIP Loans owing to such DIP
Lender and agrees to execute and deliver to such DIP Lender
and any assignee of such DIP Lender such promissory notes as
are necessary after giving effect to any assignment pursuant
to Section 12.01, each substantially in the form of Exhibit C
attached hereto and made a part hereof (all such promissory
notes and all amendments thereto, replacements thereof and
substitutions therefore being collectively referred to as the
"Notes"; and "Note" means any one of the Notes).
2.4. Effective as of the date hereof, the following language
is hereby inserted as Section 5.02(k):
k. Revised Monthly Closing Budget. Lenders shall have received
and approved a revised Closing Budget pursuant to Section
7.01(f) for the period within which the DIP Loan is requested.
2.5 Effective as of the date hereof, Subsection 12.01(b)(ii)
is hereby deleted, and the following is inserted in lieu thereof:
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(ii) any assignment may be made to an Eligible Assignee, or to
any other proposed assignee with the consent of Requisite Lenders, which consent
shall not be unreasonably withheld.
3. Fees, Costs and Expenses. Simultaneously with its execution of this
Amendment, the Borrowers shall pay to the DIP Lenders all fees, costs and
expenses incurred by it in connection with the documentation, negotiation and
closing of the transactions contemplated hereby including the fees and expenses
of the DIP Lenders' counsel.
4. Representations and Warranties. In order to induce the DIP Lenders
to enter into this Amendment, the Borrowers represent and warrant to the DIP
Lenders that as of the date hereof: (a) no Default or Event of Default exists
under the provisions of the DIP Credit Agreement or any of the other DIP Loan
Documents, (b) no event exists which with the giving of notice or the lapse of
time, or both, could or would constitute a Default or an Event of Default under
the provisions of the DIP Credit Agreement or any of the other DIP Loan
Documents, (c) all representations and warranties of the Borrowers set forth in
the DIP Credit Agreement (as modified hereby) and other DIP Loan Documents
remain true and correct on the date hereof as if the same were made on the date
hereof, (d) no material adverse change has occurred in the business, financial
condition, prospects or operations of the Borrowers since the date of the
financial statements most recently forwarded to the DIP Lenders by each Borrower
in accordance with the provisions of the DIP Credit Agreement, (e) the DIP
Credit Agreement (as modified by this Amendment) and the other DIP Loan
Documents constitute the legal, valid and binding obligations of the Borrowers
enforceable against the Borrowers in accordance with the terms thereof (except
as such enforceability may be limited by (i) applicable bankruptcy insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditor's rights generally and (ii) general principles of equity regardless of
whether such enforceability is considered in a proceeding in equity or at law).
5. Amendment and Modification Only. This Amendment is only an agreement
amending and modifying certain provisions of the DIP Credit Agreement. All of
the provisions of the DIP Credit Agreement are incorporated herein by reference
and shall remain and continue in full force and effect as amended by this
Amendment. The Borrowers hereby ratify and confirm all of their obligations,
liabilities and indebtedness under the provisions of the DIP Credit Agreement,
as amended by this Amendment, and the other DIP Loan Documents. The DIP Lenders
and the Borrowers agree it is their intention that nothing herein shall be
construed to extinguish, release or discharge or constitute, create or effect a
novation of, or an agreement to extinguish, any of the obligations, indebtedness
and liabilities of the Borrowers or any other party under the provisions of the
DIP Credit Agreement or the other DIP Loan Documents, except as explicitly
stated herein.
6. Applicable Law, Etc. This Amendment shall be governed by the laws of
the State of New York and may be executed in any number of duplicate originals
or counterparts, each of such duplicate originals or counterparts shall be
deemed to be an original and all taken together shall constitute one and the
same instrument.
91
7. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of the DIP Lenders and the Borrowers and their respective successors
and assigns.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed, under seal, by its duly authorized officer or other representative as
of the day and year first above written.
GENERAL ELECTRIC CAPITAL
CORPORATION, as DIP Lender
By:____________________________________
Name:
Title:
FLEET NATIONAL BANK,
as DIP Lender
By:____________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
as DIP Lender
By:____________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as DIP Administrative Agent
By:____________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as DIP Collateral Agent
By:____________________________________
Name:
92
Title:
FLEET NATIONAL BANK,
as DIP Document Agent
By:____________________________________
Name:
Title:
GC COMPANIES, INC.
By:____________________________________
G. ▇▇▇▇ ▇▇▇▇▇▇▇
President
SUBSIDIARIES:
GENERAL CINEMA THEATRES, INC.
GCC INVESTMENTS, INC.
G.C. THEATRE CORP. OF CALIFORNIA
GENERAL CINEMA CORP. OF ▇▇▇▇▇▇▇
GENERAL CINEMA THEATRE OF COLUMBIA,
INC.
GENERAL CINEMA THEATRES OF
DELAWARE, INC.
GENERAL CINEMA CORP. OF GREENWOOD
GENERAL CINEMA THEATRES OF ILLINOIS,
INC.
GENERAL CINEMA CORP. OF INDIANA
GENERAL CINEMA CORP. OF LANDMARK
GENERAL CINEMA CORP. OF MARYLAND,
INC.
GENERAL CINEMA CORP. OF
MASSACHUSETTS
GENERAL CINEMA CORP. OF MAYFAIR
GENERAL CINEMA CORP. OF ▇▇▇▇▇
GENERAL CINEMA CORP. OF MINNESOTA
INC.
GENERAL CINEMA THEATRES OF NEW
JERSEY, INC.
GENERAL CINEMA THEATRES OF NEW
MEXICO, INC.
GENERAL CINEMA CORP. OF NEW YORK,
INC.
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
GENERAL CINEMA CORP. OF
NORTHWESTERN
GENERAL CINEMA THEATRES OF OHIO, INC.
GENERAL CINEMA CORP. OF ▇▇▇▇▇▇ ▇▇▇▇▇
GENERAL CINEMA CORP. OF PARKWAY
POINTE
GENERAL CINEMA CORP. OF
PENNSYLVANIA
GENERAL CINEMA CORP. OF PLYMOUTH
MEETING
GENERAL CINEMA CORP. OF SOUTH
CAROLINA
GENERAL CINEMA CORP. OF TEXAS
GENERAL CINEMA CORP. OF VIRGINIA
GENERAL CINEMA CORP. OF WASHINGTON
GENERAL CINEMA THEATRE OF
YORKTOWN, INC.
By:___________________________________
▇▇▇▇ ▇▇▇▇▇▇▇, Vice President of
each of the foregoing
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