Exhibit 10.17
TERM LOAN AGREEMENT
Dated as of March 21, 2002
among
LOEWS CINEPLEX ENTERTAINMENT CORPORATION,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
and
BANKERS TRUST COMPANY,
as Administrative Agent
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS....................................................................... 2
1.1 Certain Defined Terms............................................................. 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement......................................................................... 36
1.3 Other Definitional Provisions..................................................... 36
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........................................ 37
2.1 Commitments; Making of Loans; the Register; Notes................................. 37
2.2 Interest on the Loans............................................................. 41
2.3 Fees.............................................................................. 45
2.4 Scheduled Payments of Loans; Prepayments of Loans; General Provisions
Regarding Payments................................................................ 46
2.5 Use of Proceeds................................................................... 55
2.6 Special Provisions Governing Eurodollar Rate Loans................................ 55
2.7 Increased Costs; Taxes; Capital Adequacy.......................................... 58
2.8 Obligation of Lenders to Mitigate................................................. 63
SECTION 3. [INTENTIONALLY OMITTED]........................................................... 63
SECTION 4. CONDITIONS TO LOANS............................................................... 63
4.1 Conditions to Restructured Term Loans............................................. 64
4.2 Conditions to Supplemental Term Loans............................................. 71
4.3 Conditions to All Loans........................................................... 71
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES.......................................... 72
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries..... 72
5.2 Authorization of Borrowing, etc................................................... 73
5.3 Financial Condition............................................................... 74
5.4 No Material Adverse Change; No Restricted Junior Payments......................... 75
5.5 Title to Properties; Liens........................................................ 75
5.6 Litigation; Adverse Facts......................................................... 75
5.7 Payment of Taxes.................................................................. 75
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TABLE OF CONTENTS
(continued)
Page
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts...... 76
5.9 Governmental Regulation........................................................... 76
5.10 Securities Activities............................................................. 76
5.11 Employee Benefit Plans............................................................ 76
5.12 Certain Fees...................................................................... 77
5.13 Environmental Protection.......................................................... 77
5.14 Employee Matters.................................................................. 79
5.15 Solvency.......................................................................... 79
5.16 Disclosure........................................................................ 79
5.17 Matters Relating to Bankruptcy Proceedings........................................ 80
5.18 Insurance......................................................................... 80
5.19 Intellectual Property............................................................. 80
5.20 Cash Management System............................................................ 80
5.21 Merged Subsidiaries............................................................... 81
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS................................................... 81
6.1 Financial Statements and Other Reports............................................ 81
6.2 Corporate and Limited Liability Company Existence, etc............................ 86
6.3 Payment of Taxes and Claims; Tax Consolidation.................................... 86
6.4 Maintenance of Properties; Insurance.............................................. 87
6.5 Inspection; Lender Meeting........................................................ 87
6.6 Compliance with Laws, etc......................................................... 88
6.7 Environmental Disclosure and Inspection........................................... 88
6.8 Company's Remedial Action Regarding Hazardous Materials........................... 90
6.9 Execution of Subsidiary Guaranty and Collateral Documents by Future
Subsidiaries...................................................................... 90
6.10 Matters Relating to Additional Real Property Collateral........................... 91
6.11 Cash Management System............................................................ 92
6.12 Unsecured Settlement Distribution................................................. 92
6.13 Ratings........................................................................... 93
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TABLE OF CONTENTS
(continued)
Page
6.14 Employee Benefit Plans............................................................ 93
6.15 Dissolved or Disposed Subsidiaries................................................ 93
SECTION 7. COMPANY'S NEGATIVE COVENANTS...................................................... 93
7.1 Indebtedness...................................................................... 93
7.2 Liens and Related Matters......................................................... 95
7.3 Investments; Joint Ventures....................................................... 98
7.4 Contingent Obligations............................................................ 99
7.5 Restricted Junior Payments; Certain Other Payments................................ 101
7.6 Financial Performance Covenants................................................... 101
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.................. 103
7.8 Fiscal Year....................................................................... 104
7.9 Sale or Discount of Receivables................................................... 104
7.10 Transactions with Shareholders and Affiliates..................................... 104
7.11 Disposal of Subsidiary Stock...................................................... 105
7.12 Conduct of Business............................................................... 105
7.13 Capital Expenditures.............................................................. 106
7.14 Amendments of Documents Relating to Subordinated Indebtedness and
Organizational Documents.......................................................... 107
7.15 CCAA Plan of Arrangement.......................................................... 107
SECTION 8. EVENTS OF DEFAULT................................................................. 108
8.1 Failure to Make Payments When Due................................................. 108
8.2 Default in Other Agreements....................................................... 108
8.3 Breach of Certain Covenants....................................................... 108
8.4 Breach of Warranty................................................................ 108
8.5 Other Defaults Under Term Loan Documents.......................................... 108
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.............................. 109
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc................................ 109
8.8 Judgments and Attachments......................................................... 109
8.9 Dissolution....................................................................... 110
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TABLE OF CONTENTS
(continued)
Page
8.10 Employee Benefit Plans............................................................ 110
8.11 Change in Control................................................................. 110
8.12 Invalidity of Subsidiary Guaranty................................................. 110
8.13 Failure of Security............................................................... 110
SECTION 9. ADMINISTRATIVE AGENT.............................................................. 111
9.1 Appointment....................................................................... 111
9.2 Powers and Duties; General Immunity............................................... 112
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.................................................................. 113
9.4 Right to Indemnity................................................................ 113
9.5 Successor Agent................................................................... 114
9.6 Intercreditor Agreement; Collateral Documents and Subsidiary Guaranty............. 114
SECTION 10. MISCELLANEOUS..................................................................... 115
10.1 Assignments and Participations in Loans........................................... 115
10.2 Expenses.......................................................................... 117
10.3 Indemnity......................................................................... 118
10.4 Set-Off; Security Interest in Deposit Accounts.................................... 119
10.5 Ratable Sharing................................................................... 120
10.6 Amendments and Waivers............................................................ 120
10.7 Independence of Covenants......................................................... 122
10.8 Notices........................................................................... 122
10.9 Survival of Representations, Warranties and Agreements............................ 122
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative............................. 123
10.11 Marshalling; Payments Set Aside................................................... 123
10.12 Severability...................................................................... 123
10.13 Obligations Several; Independent Nature of Lenders' Rights........................ 123
10.14 Headings.......................................................................... 124
10.15 Applicable Law.................................................................... 124
10.16 Successors and Assigns............................................................ 124
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TABLE OF CONTENTS
(continued)
Page
10.17 Consent to Jurisdiction and Service of Process.................................... 124
10.18 Waiver of Jury Trial.............................................................. 125
10.19 Confidentiality................................................................... 125
10.20 Counterparts; Effectiveness....................................................... 126
Signature pages ......................................................................... S-1
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SCHEDULES
1.1C CERTAIN ASSETS TO BE SOLD
1.1E REORGANIZATION COSTS
1.1L EXISTING LETTERS OF CREDIT
1.1W CERTAIN OPERATING LEASES
1.1WH WHOLLY OWNED TOTAL DEBT
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
2.3D ALLOCATION OF FEES
4.1A(i) CERTAIN GOOD STANDING CERTIFICATES
4.1B(i) CAPITAL AND OWNERSHIP STRUCTURE
4.1B(ii) MANAGEMENT STRUCTURE
4.1G CLOSING DATE MORTGAGED PROPERTIES
4.1U CERTAIN FINANCIAL INFORMATION
5.1A LOAN PARTIES NOT IN GOOD STANDING
5.1D SUBSIDIARIES OF COMPANY
5.4 CERTAIN RESTRICTED JUNIOR PAYMENTS
5.6 LITIGATION
5.11(c) CERTAIN EMPLOYEE BENEFIT PLANS
5.12 CERTAIN FEES
5.13 ENVIRONMENTAL MATTERS
5.14 CERTAIN EMPLOYEE MATTERS
5.18 INSURANCE
5.21 MERGED SUBSIDIARIES
6.11 CASH MANAGEMENT SYSTEM
6.15 DISSOLVED SUBSIDIARIES
7.1(vi) CERTAIN EXISTING INDEBTEDNESS
7.2A(v) CERTAIN EXISTING LIENS
7.3A(v) CERTAIN EXISTING INVESTMENTS
7.3B PROHIBITED INVESTMENTS
7.4(v) CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.9 CERTAIN DISCOUNTED RECEIVABLES
7.10(v) AFFILIATE TRANSACTIONS
7.13B SCHEDULED 2003 NEW BUILD CAPITAL EXPENDITURES
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III-A FORM OF RESTRUCTURED TERM NOTE
III-B FORM OF SUPPLEMENTAL TERM NOTE
IV FORM OF COMPLIANCE CERTIFICATE
V FORM OF INTERCOMPANY NOTE
VI-A FORM OF OPINION OF FRIED, FRANK, HARRIS, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
VI-B FORM OF OPINION OF DAVIES ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
VII FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
VIII-A FORM OF ASSIGNMENT AGREEMENT
VIII-B FORM OF ASSIGNMENT AGREEMENT (RELATED FUND)
IX FORM OF CERTIFICATE RE NON-BANK STATUS
X FORM OF COLLATERAL ACCOUNT AGREEMENT
XI FORM OF SECURITY AGREEMENT
XII FORM OF SUBSIDIARY GUARANTY
XIII FORM OF INTERCREDITOR AGREEMENT
XIV FORM OF SUPPLEMENTAL TERM LOAN ACCEPTANCE
XV-A FORM OF CANADIAN MORTGAGE
XV-B FORM OF UNITED STATES MORTGAGE
TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT is dated as of March 21, 2002 and
entered into by and among LOEWS CINEPLEX ENTERTAINMENT CORPORATION, a Delaware
corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS LISTED ON SCHEDULE 2.1
HERETO (each individually referred to herein as a "LENDER" and collectively as
"LENDERS"), and BANKERS TRUST COMPANY ("BTCo"), as administrative agent for
Lenders (in such capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, Company, the Pre-Petition Lenders, and BTCo, as
administrative agent, are parties to the Pre-Petition Credit Agreement (such
terms and other capitalized terms used in these recitals being used as defined
in subsection 1.1).
WHEREAS, on February 15, 2001, Company and Subsidiary Debtors
filed voluntary petitions for relief under the Bankruptcy Code with the
Bankruptcy Court (such proceedings are hereinafter referred to as the "CHAPTER
11 CASES"), and Company and Subsidiary Debtors have continued to operate their
businesses and manage their properties as debtors-in-possession pursuant to
Sections 1107 and 1108 of the Bankruptcy Code.
WHEREAS, on February 15, 2001, Cineplex Odeon and certain of
its subsidiaries applied to the Superior Court of Justice of Ontario for an
order declaring Cineplex Odeon and the other applicants to be companies to which
the CCAA applies.
WHEREAS, Company, Subsidiary Debtors, the DIP Lenders and
BTCo, as administrative agent, are parties to the DIP Credit Agreement.
WHEREAS, Company and Subsidiary Debtors have proposed, their
creditors have approved and the Bankruptcy Court has confirmed the Plan of
Reorganization;
WHEREAS, Cineplex Odeon and the other applicants in the CCAA
Proceedings have proposed, their creditors have approved and the Canadian Court
has sanctioned the CCAA Plan of Arrangement;
WHEREAS, pursuant to the Plan of Reorganization:
A. an aggregate of $300,000,000 of (y) unpaid revolving loans
and unpaid interest thereon under the Pre-Petition Credit Agreement held by or
managed by the Sponsors and (z) loans made under the Post-Default Advances
Sublimit under the DIP Credit Agreement held by or managed by the Sponsors (the
"SPONSOR CONVERSION AMOUNT") shall be converted into equity of Company;
B. an aggregate of $437,590,329.45 of (y) unpaid revolving
loans and unpaid interest thereon under the Pre-Petition Credit Agreement held
by the Lenders having Restructured Term Loan Commitments, and (z) loans made
under the Post-Default Advances Sublimit under the DIP Credit Agreement held by
the Lenders having Restructured Term Loan
Commitments shall be deemed paid in full from the proceeds of the Restructured
Term Loans, the amount of which Restructured Term Loans shall be equal to the
sum of (i) 98.25% of such aggregate amount and (ii) the aggregate amount of
accrued but unpaid letter of credit fees under the Pre-Petition Credit
Agreement; and
C. loans made under the Post-Petition Incremental US Sublimit
and the Post-Petition Incremental Canadian Sublimit and outstanding letters of
credit issued under the DIP Credit Agreement and outstanding letters of credit
issued under the Pre-Petition Credit Agreement shall be refinanced in full under
the Priority Secured Credit Agreement; and
WHEREAS, subject to the terms set forth herein, the parties
wish to provide for the inclusion of Supplemental Term Loans to be made
hereunder;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained and pursuant to the Plan
of Reorganization, Company, Lenders and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACQUIRED INDEBTEDNESS" means Indebtedness assumed by Company
or a Wholly Owned North American Subsidiary of Company in connection with a
Permitted Supplemental Term Loan Acquisition and not incurred in contemplation
of such Permitted Supplemental Term Loan Acquisition.
"ACQUISITION EXPENDITURE AMOUNT" has the meaning assigned that
term in subsection 7.3A(viii).
"ADDITIONAL MORTGAGE" has the meaning assigned to that term in
subsection 6.10B.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to
that term in subsection 6.10B.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to a Eurodollar Rate Loan, the rate per annum
obtained by dividing (i) the offered quotation (rounded upward to the nearest
1/16 of one percent) to first class banks in the interbank Eurodollar market by
BTCo for U.S. Dollar deposits of amounts in same day funds comparable to the
principal amount of the Eurodollar Rate Loan of BTCo for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to the
Interest Period for which such Adjusted Eurodollar Rate will apply as of
approximately 10:00 a.m. (New York time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to
2
any member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"ADMINISTRATIVE AGENT" means BTCo in its capacity as
Administrative Agent hereunder and under the other Term Loan Documents.
"AFFECTED CLASS" has the meaning set forth in subsection
10.6A.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AFFILIATED FUND" means, with respect to any Lender, a fund
that invests in commercial loans and is administered or managed by the same
investment advisor or manager as such Lender, an Affiliate of such Lender or by
an Affiliate of the same investment advisor or manager as such Lender.
"AGGREGATE AMOUNTS DUE FROM COMPANY" has the meaning set forth
in subsection 10.5.
"AGGREGATE CAPITAL EXPENDITURE LIMIT" has the meaning set
forth in subsection 7.13D.
"AGREEMENT" means this Term Loan Agreement dated as of March
21, 2002, as it may be amended, restated, supplemented or otherwise modified
from time to time.
"ALTERNATIVE PRIVATE EQUITY PREPAYMENT AMOUNT" has the meaning
set forth in subsection 2.4B(ii)(d)(2)(B).
"APPLICABLE BASE RATE MARGIN" has the meaning assigned to that
term in subsection 2.2A(i).
"APPLICABLE EURODOLLAR RATE MARGIN" has the meaning assigned
to that term in subsection 2.2A(i).
"APPLICABLE LEVERAGE RATIO" means the Leverage Ratio
calculated as of the date for which an Officer's Certificate or Compliance
Certificate has been delivered pursuant to subsection 4.1F or subsection 6.1(iv)
and such Applicable Leverage Ratio shall remain in effect until the next date of
delivery of a Compliance Certificate (and related financial information required
at such time pursuant to subsection 6.1) pursuant to subsection 6.1(iv);
provided that,
3
without limiting any Event of Default or Potential Event of Default that may
result therefrom, if Company does not deliver any Compliance Certificate
required pursuant to subsection 6.1(iv) by the date specified therefor, then the
Applicable Leverage Ratio shall not be decreased until and following the actual
date of delivery thereof, and if the Applicable Leverage Ratio is required to be
increased as a result of the information in such Compliance Certificate, then
such increase shall be retroactive to the date such Compliance Certificate was
originally required to be delivered hereunder.
"APPLICABLE MARGIN" means, as the context requires, either the
Applicable Base Rate Margin or the Applicable Eurodollar Rate Margin.
"ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any of its Wholly Owned
Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of Company
or any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than (a) inventory sold
in the ordinary course of business, (b) obsolete equipment and (c) any such
other assets to the extent that the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to $500,000 or
less).
"ASSET SWAP" means the exchange by Company or any of its
Wholly-Owned North American Subsidiaries with any Person other than Company or
any of its Subsidiaries, of any theater assets of Company or any of its
Wholly-Owned North American Subsidiaries for like assets of such Person.
"ASSIGNMENT AGREEMENT" means, in the case of an assignment of
Loans to an Affiliate of the assigning Lender, an Assignment Agreement in
substantially the form of Exhibit VIII-A annexed hereto and, in all other cases,
an Assignment Agreement (Related Fund) in substantially the form of Exhibit
VIII-B annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of New York.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BTCO" means Bankers Trust Company.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close, and (ii) with respect to all
4
notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and between
banks in U.S. Dollar deposits in the applicable interbank Eurodollar market.
"CANADIAN BENEFIT PLANS" means all material employee benefit
plans of any nature or kind whatsoever that are not Canadian Pension Plans and
are maintained or contributed to by Company, Cineplex Odeon or any of Company's
Subsidiaries having employees in Canada.
"CANADIAN CCAA CREDIT AGREEMENT" means that certain Canadian
Liquidity Credit Agreement dated as of February 28, 2001 by and among Cineplex
Odeon, as borrower, Company, as lender thereunder, and Deutsche Bank Canada, as
administrative agent for the lender thereunder, as it may be amended, restated,
supplemented or otherwise modified from time to time.
"CANADIAN COURT" means the Superior Court of Justice of
Ontario.
"CANADIAN DOLLARS" or "CN$" means the lawful money of Canada.
"CANADIAN PENSION PLANS" means each plan which is considered
to be a pension plan for the purposes of any applicable pension benefits
standards statute and/or regulation in Canada established, maintained or
contributed to by Company, Cineplex Odeon or any of Company's other Subsidiaries
for their employees or former employees in Canada.
"CAPEX REFERENCED LEVERAGE RATIO" means the Leverage Ratio as
at February 28 or 29, as the case may be, of the Fiscal Year immediately
preceding the Fiscal Year for which limitations of Consolidated New Build
Capital Expenditures or Off-Balance Sheet New Build Capital Expenditures, as the
case may be, are measured.
"CAPITAL EXPENDITURES" means, for any period, the sum of (i)
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases which is
capitalized on the balance sheet of Company and its Subsidiaries) by Company and
its Subsidiaries during that period that, in conformity with GAAP, are included
in "additions to property, plant or equipment" or comparable items reflected in
the consolidated statement of cash flows of Company and its Subsidiaries plus
(ii) to the extent not covered by clause (i) of this definition, the aggregate
of all expenditures by Company and its Subsidiaries during that period to
acquire (by purchase or otherwise) the business, property or fixed assets of
Company and its Subsidiaries, or the stock or other evidence of beneficial
ownership of any Person other than Company or any of its Subsidiaries; provided
that Capital Expenditures shall not include expenditures for Permitted
Investments and Permitted Acquisitions made in compliance with subsections
7.3A(viii) and 7.7(iii) and the non-cash portion of Asset Swaps made in
compliance with subsection 7.7(vii). For the avoidance of doubt, landlord
allowances to the extent received by Company and its Wholly Owned Subsidiaries
in cash in connection with leased properties shall be counted as reductions of
Capital Expenditures.
5
"CAPITAL LEASE," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person; provided that, with respect to Company and its Subsidiaries,
"Capital Lease" shall also include any lease that Company or any of its
Subsidiaries is a party to with respect to a theatre which has been closed by
Company or such Subsidiary, as the case may be, and for which Company or such
Subsidiary, as the case may be, has established a liability on its balance sheet
in accordance with GAAP.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable securities (1) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (2) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (b) 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, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or ▇▇▇▇▇'▇; (c) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
▇▇▇▇▇'▇; (d) certificates of deposit or bankers' acceptances maturing within one
year after such date and issued or accepted by any Lender or by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia that (1) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (2) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (e) shares of any money market mutual fund that (1)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (a) and (b) above, (2) has net assets of not less than
$500,000,000, and (3) has the highest rating obtainable from either S&P or
▇▇▇▇▇'▇.
"CASH MANAGEMENT SYSTEM" means the cash management system of
Company and Subsidiary Guarantors described in Schedule 6.11.
"CCAA" means the Companies' Creditors Arrangement Act, R.S.C
1985, C. C-36, as amended.
"CCAA PLAN OF ARRANGEMENT" means the Plan of Compromise and
Arrangement of Cineplex Odeon and certain of its Wholly Owned Subsidiaries under
the CCAA Proceedings, dated February 22, 2002.
"CCAA PROCEEDINGS" means the proceedings commenced on February
15, 2001 by Cineplex Odeon and certain of its Wholly Owned Subsidiaries under
the CCAA in the Superior Court of Justice of Ontario and having court file no.
01-CL-4024.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit IX annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
6
"CHANGE OF CONTROL" means (x) prior to an Initial Public
Offering, Sponsors and the Sponsor Affiliates shall cease to own or manage at
least 51% of Company's total voting securities and (y) after an Initial Public
Offering either (i) Sponsors and the Sponsor Affiliates shall cease to own or
manage at least 35% of Company's total voting securities or (ii) any other
Person or two or more Persons acting in concert as a group (within the meaning
of Rule 13d-3 under the Exchange Act) shall beneficially own a greater
percentage of Company's total voting securities than Sponsors beneficially own.
"CHANGE IN LAW" means the enactment, promulgation, execution
or ratification of, or any change in, modification of, or amendment to, any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof.
"CHAPTER 11 CASES" has the meaning assigned to that term in
the Recitals hereto.
"CINEPLEX ODEON" means Cineplex Odeon Corporation, a
corporation formed under the laws of the province of Ontario, Canada.
"CLASS" means, as applied to Lenders, each of the following
two classes of Lenders: (i) Lenders making Restructured Term Loans and (ii)
Lenders making Supplemental Term Loans (all of which constitute a single class).
"CLOSING DATE" means the date on or before March 31, 2002, on
which the conditions set forth in subsection 4.1 have been satisfied by Company
or have been waived in writing by Requisite Lenders.
"CLOSING DATE MORTGAGED PROPERTY" and "CLOSING DATE MORTGAGED
PROPERTIES" have the meanings set forth in subsection 4.1G(i).
"CLOSING DATE MORTGAGE" and "CLOSING DATE MORTGAGES" have the
meanings set forth in subsection 4.1G(i).
"COLLATERAL" means, collectively, all of the personal property
(including capital stock) in which Liens are purported to be granted by the
Collateral Documents.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Collateral Agent on the Closing
Date, substantially in the form of Exhibit X annexed hereto, as such Collateral
Account Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.
"COLLATERAL AGENT" means BTCo acting in the capacity of
collateral agent on behalf of the Lenders, the Administrative Agent, the
Priority Secured Lenders and the administrative agent under the Priority Secured
Credit Agreement and other Persons that may become parties to the Intercreditor
Agreement, in each case under the Collateral Documents.
7
"COLLATERAL DOCUMENTS" means the Collateral Account Agreement,
Security Agreement, the Mortgages and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Term
Loan Documents to grant to Collateral Agent, on behalf of the Lenders and/or the
Priority Secured Lenders, a Lien on any real, personal, immovable, movable or
mixed property of that Loan Party as security for the Obligations.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY-FUNDED UNSECURED SETTLEMENT AMOUNT" means the
difference between (1) the lesser of (x) $20,000,000 and (y) the difference
between (i) $50 million and (ii) the sum of (a) the aggregate amount of loans
under the Post-Petition Incremental US Sublimit and the Post-Petition
Incremental Canadian Sublimit of the DIP Credit Agreement outstanding on the
Closing Date, (b) all unpaid reasonable and customary closing expenses, fees and
bankruptcy-related expenses, in each case whether incurred or to be incurred
before, on or after the Closing Date (provided that the fees due to the Lenders
under this Agreement shall be excluded from this amount), (c) all incurred but
unpaid Capital Expenditures related to Designated Projects (provided that
amounts due with respect to the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Project shall be excluded in an
amount equal to $7,392,244.00), and (d) normal working capital levels, as agreed
between Administrative Agent and Company and (2) $5,000,000 .
"COMPETITOR" means any Person engaged directly or indirectly,
or having any Affiliate engaged directly or indirectly, in the production,
distribution or exhibition of motion pictures.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit IV annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 6.1(iv).
"CONFIRMATION ORDER" means that certain Order Confirming Plan
of Reorganization entered by the Bankruptcy Court on March 1, 2002, without
modification, revision or amendment.
"CONSOLIDATED NEW BUILD CAPITAL EXPENDITURE ALLOWANCE" has the
meaning set forth in subsection 7.13B(i).
"CONSOLIDATED NEW BUILD CAPITAL EXPENDITURES" means, for any
period, New Build Capital Expenditures other than Off-Balance Sheet New Build
Capital Expenditures during such period.
"CONTINGENT OBLIGATION," as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the
8
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (iii) under Interest Rate Agreements and Currency
Agreements. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other 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.
"COVERED TAX" or "COVERED TAXES" means all Tax or Taxes other
than any Excluded Tax or Excluded Taxes.
"CURE AMOUNT" means the amount of cash received by Company
pursuant to the exercise by Company of its Cure Rights.
"CURE RIGHTS" means the rights of Company pursuant to
subsection 7.6C to sell Permitted Cure Securities to Sponsors for cash and apply
the proceeds of such sale to cause compliance with the Financial Performance
Covenants in the manner specified in such subsection.
"CURE RIGHTS PROHIBITION PERIOD" means, if Cure Rights are
exercised in any two consecutive Fiscal Quarters, the four consecutive Fiscal
Quarters following the latest date of such exercise, during which no Cure Rights
may be exercised.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement.
"CUTOFF DATE" has the meaning set forth in subsection
2.4(B)(iii)(f).
"DEBT SECURITIES PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(c).
"DEBT SERVICE COVERAGE RATIO" means, as of any date of
determination, the ratio of (i) Wholly Owned EBITDAR for the most recently ended
four Fiscal Quarter period to (ii) the
9
sum of (a) Wholly Owned Total Debt Interest Expense for such four Fiscal Quarter
period plus (b) Wholly Owned Rent Expense for such four Fiscal Quarter period
plus (c) scheduled principal payments on the Loans required to be made under
subsection 2.4A during such four Fiscal Quarter period plus (d) scheduled
principal payments on the Priority Secured Loans required to be made under
subsection 2.4A of the Priority Secured Credit Agreement during such four Fiscal
Quarter period plus (e) scheduled payments of Indebtedness other than the Loans,
the Priority Secured Loans and Indebtedness under the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Loan
Agreement and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Note required to be made during such four Fiscal
Quarter period; provided that, solely for purposes of calculating the Debt
Service Coverage Ratio, (i) Wholly Owned Total Debt Interest Expense for the
four-Fiscal Quarter period ending on the last day of the Fiscal Quarter
including the Closing Date shall equal Wholly Owned Total Debt Interest Expense
for such Fiscal Quarter multiplied by four, (ii) Wholly Owned Total Debt
Interest Expense for the four-Fiscal Quarter period ending on the last day of
the first full Fiscal Quarter occurring after the Fiscal Quarter including the
Closing Date shall equal the aggregate amount of Wholly Owned Total Debt
Interest Expense for such Fiscal Quarter and the Fiscal Quarter including the
Closing Date multiplied by two, (iii) Wholly Owned Total Debt Interest Expense
for the four-Fiscal Quarter period ending on the last day of the second full
Fiscal Quarter occurring after the Fiscal Quarter including the Closing Date
shall equal the aggregate amount of Wholly Owned Total Debt Interest Expense for
such Fiscal Quarter, the immediately preceding Fiscal Quarter and the Fiscal
Quarter including the Closing Date multiplied by four-thirds and (iv) principal
payments under clauses (ii)(c), (d) and (e) above shall be annualized in the
manner that Wholly Owned Total Debt Interest Expense is annualized in clauses
(i), (ii) and (iii) of this proviso; provided further that, solely for purposes
of calculating the Debt Service Coverage Ratio for any four Fiscal Quarter
period including the Closing Date, Wholly Owned Total Debt Interest Expense
shall not include any Interest Expense from the first day of the Fiscal Quarter
including the Closing Date to and including the Closing Date with respect to the
Sponsor Conversion Amount.
"DEEMED MAJOR ASSET SALE PROCEEDS" means Net Asset Sale
Proceeds in excess of $20,000,000 of Net Asset Sale Proceeds in respect of Minor
Asset Sales made in any Fiscal Year.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DESIGNATED PROJECTS" has the meaning assigned to that term in
the DIP Credit Agreement.
"DIP CREDIT AGREEMENT" means that certain Debtor-In-Possession
Credit Agreement dated as of February 15, 2001, as amended, among Company, the
Subsidiary Borrowers named therein, the DIP Lenders, and BTCo, as administrative
agent.
"DIP LENDERS" means the parties identified as lenders and
indemnifying lenders under the DIP Credit Agreement in their capacities as
lenders under the DIP Credit Agreement, together with their successors and
assigns.
10
"DISCLOSURE STATEMENTS" means the Disclosure Statements for
Debtors' First Amended Chapter 11 Plan dated January 14, 2001 approved by the
Bankruptcy Court and soliciting approval of the Plan of Reorganization of the
creditors of Company and Subsidiary Debtors by Company and the Sponsors and the
Notice of Meeting of Creditors and Information Circular dated January 28, 2002
soliciting approval of the Plan of Compromise and Arrangement of Cineplex Odeon
and certain of its Subsidiaries.
"EBITDA" means, for any period, for any Person the sum of the
amounts, without duplication of component amounts, for such period of (i) Net
Income, (ii) Interest Expense, (iii) any amounts payable under subsection 2.3 of
this Agreement or subsection 2.3 of the Priority Secured Credit Agreement
through to the Closing Date to the extent such amounts have been deducted from
Net Income and excluded from Interest Expense, (iv) provisions for taxes based
on income or equity, (v) total depreciation expense, (vi) total amortization
expense, (vii) all extraordinary losses reducing Net Income, including losses
arising from the sale or disposition of assets, less all extraordinary gains
increasing Net Income, (viii) any amounts representing the amortization of
deferred financing expense (to the extent not already included in (a) Interest
Expense or (b) clause (iii) above), (ix) other non-cash items reducing Net
Income (including Operating Lease adjustments required under GAAP) less other
non-cash items increasing Net Income (including Operating Lease adjustments
required under GAAP), (x) one-time costs and expenses, whether cash or non-cash,
associated with the restructuring and reorganization of Company and its
Subsidiaries pursuant to the Plan of Reorganization and CCAA Plan of Arrangement
incurred during the applicable measurement period, including the costs and
expenses described on Schedule 1.1E (to the extent not already included in
clause (iii) above); provided that to the extent the aggregate actual amount of
the costs and expenses described on Schedule 1.1E, together with any other
restructuring and reorganization costs and expenses paid in cash after the
Closing Date, exceeds the aggregate amount of the costs and expenses set forth
on Schedule 1.1E, such excess shall be deemed to be, and shall be treated as,
non-operating expenses under clause (xii) of this definition of "EBITDA," (xi)
non-cash non-recurring and other one-time non-operating expenses (unless
subsequently paid in cash in the applicable measurement period), (xii)
non-recurring and other one-time non-operating expenses to be paid in cash;
provided that, in the case of Company and its Subsidiaries, to the extent that
such expenses are paid in cash during the applicable measurement period and
exceed $15,000,000 in the Fiscal Year ending February 28, 2003 or $7,500,000 in
any Fiscal Year thereafter, the excess will not be added back in the applicable
measurement period; provided further that if such expenses are less than
$15,000,000 in the Fiscal Year ending February 28, 2003 or $7,500,000 in any
Fiscal Year thereafter, the applicable limit set forth in the preceding proviso
for the immediately succeeding Fiscal Year shall be increased by such
difference, or such greater amount as Administrative Agent may approve, in its
sole discretion, based on such financial information projections and detail as
Company may provide, (xiii) the effect of accounting changes pursuant to opinion
No. 20 of the Accounting Principles Board and (xiv) Management Fees incurred
during such period, all of the foregoing as determined on a consolidated basis
for such Person and its Subsidiaries in conformity with GAAP.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof having a combined
capital and surplus of at least $250,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof having a combined capital and surplus of at least
11
$250,000,000; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof having a combined capital and surplus
of at least $250,000,000; provided that (x) such bank is acting through a branch
or agency located in the United States or (y) such bank is organized under the
laws of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country; and (iv) any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans in the ordinary course of its
businesses including, but not limited to, insurance companies, mutual funds and
lease financing companies; and (B) any Lender and any Affiliate of any Lender
and any Affiliated Fund of any Lender; provided that no Competitor other than
the Sponsors and Sponsor Affiliates shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time, maintained or
contributed to by Company or any of its ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all applicable statutes,
ordinances, orders, rules, regulations, plans, policies or decrees and
requirements having the force of law relating to (i) environmental matters,
including, without limitation, those relating to fines, injunctions, penalties,
damages, contribution, cost recovery compensation, losses or injuries resulting
from the Release or threatened Release of Hazardous Materials, (ii) the
generation, use, storage, transportation or disposal of Hazardous Materials, or
(iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare from environmental
hazards, in any manner applicable to Company or any of its Subsidiaries or any
of their respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601
et seq.) ("CERCLA"), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, and any analogous future or present
local, state, provincial and federal statutes and regulations promulgated
pursuant thereto, each as in effect as of the date of determination.
"EQUIVALENT AMOUNT" in one currency on any day means the
amount of that currency into which a specified amount of another currency can be
converted at the Bank of
12
Canada's noon spot rate of exchange for such currency or Administrative Agent's
noon spot rate of exchange for such currency if such amount is being determined
by Administrative Agent (or at any other rate of exchange for such currency to
which Company and Administrative Agent agree) and if that day is not a Business
Day, on the immediately preceding Business Day.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE," as applied to any Person, means (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue Code of
which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above is a member. Any former ERISA
Affiliate of a Person shall continue to be considered an ERISA Affiliate within
the meaning of this definition with respect to the period such entity was an
ERISA Affiliate of the Person and with respect to liabilities arising after such
period for which the Person could be liable under the Internal Revenue Code or
ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Company or any of its ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which is reasonably likely to result in the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Company or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal by Company or any of its ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan which is reasonably likely
to result in the imposition of withdrawal liability therefor, or the receipt by
Company or any of its ERISA Affiliates of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA, or that it intends to terminate or has terminated under Section 4041A or
4042 of ERISA; (viii) the occurrence of an act or omission which is reasonably
likely to result in the imposition on Company or any of its ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in
respect of any
13
Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company or any of its ERISA
Affiliates in connection with any such Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal Revenue
Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCESS CASH FLOW" means, for any period, an amount (if
positive), equal to (i) the amount for such period of Wholly Owned EBITDA minus
(ii) the sum, without duplication, of the amounts for such period of (a)
voluntary and scheduled repayments of Wholly Owned Total Debt actually made
(excluding (1) repayments of Priority Secured Revolving Loans to the extent the
Priority Secured Revolving Loan Commitments are not permanently reduced in
connection with such repayments and (2) repayments of Indebtedness under the
West ▇▇▇▇ ▇▇▇▇▇▇ Loan Agreement and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Note), (b) Excess Cash Flow
Capital Expenditures (net of any proceeds of any related financings with respect
to such expenditures), (c) Wholly Owned Total Debt Interest Expense to the
extent paid in cash by Company and its Wholly Owned Subsidiaries, (d) Permitted
Investments and Permitted Acquisitions to the extent made in cash by Company or
any of its Wholly Owned Subsidiaries (net of any proceeds of any related
financings with respect to such Permitted Investments and Permitted
Acquisitions) (it being acknowledged and agreed that Investments made pursuant
to subsection 7.3A(x) do not constitute Permitted Investments), (e) provisions
for Taxes based on income or equity of Company and its Wholly Owned Subsidiaries
to the extent paid in cash with respect to such periods, (f) all fees paid in
cash by Company and its Wholly Owned Subsidiaries to Administrative Agent and
the Lenders under subsection 2.3 of this Agreement and to the Priority Secured
Administrative Agent and Priority Secured Lenders under subsection 2.3 of the
Priority Secured Credit Agreement (other than commitment fees payable under
subsection 2.3A of the Priority Secured Credit Agreement) and any fees payable
in connection with an amendment, waiver or other modification to this Agreement
or the Priority Secured Credit Agreement, and (g) amounts paid in cash by
Company and its Wholly Owned Subsidiaries to the extent included in clause (x)
through (xiv) of the definition of "EBITDA."
"EXCESS CASH FLOW CAPITAL EXPENDITURES" means, for any period,
the amount of all Capital Expenditures paid in cash (other than Off-Balance
Sheet New Build Capital Expenditures) for such period less the amount of
Retained Proceeds Available for CapEx used to increase the Consolidated New
Build Capital Expenditure Allowance for such period pursuant to subsection
7.13B(i)(b) to the extent applied as Capital Expenditures during such period.
14
"EXCESS CASH FLOW PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(e).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED TAX" or "EXCLUDED TAXES" means Tax or Taxes imposed
on or measured by a Person's net income, profits or gains (including any
franchise or similar Taxes imposed in lieu thereof and any branch profits Taxes)
by the United States (or any political subdivision or taxing authority thereof
or therein) or by the jurisdiction (or any political subdivision or taxing
authority thereof or therein) under the laws of which the Lender is organized,
has its principal office or has its applicable lending office.
"EXISTING LETTERS OF CREDIT" means letters of credit
outstanding on the Closing Date issued under the Pre-Petition Credit Agreement
and the DIP Credit Agreement and listed on Schedule 1.1L.
"FACILITIES" means all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) and
related facilities now, hereafter or heretofore owned, leased, operated or used
by Company or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate 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, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"FINANCIAL PERFORMANCE COVENANTS" means the covenants of
Company set forth in subsections 7.6A and 7.6B.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created on any Collateral pursuant to any Collateral Document, that such Lien
(or any distribution priority thereof) has priority over any other Lien (or
distribution priority) on such Collateral, other than Liens permitted under
subsections 7.2A(i), (iii), (v) and (vi).
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on February 28 or February 29, as the case may be, of each
calendar year.
15
"FLOOD HAZARD PROPERTY" means a Closing Date Mortgaged
Property or an Additional Mortgaged Property located in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide
hazards.
"FOREIGN SUBSIDIARY" means (a) any Subsidiary of Company which
is organized under the laws of any jurisdiction outside of the United States of
America or Canada or (b) any Subsidiary whose sole assets consist of either (i)
stock of a Subsidiary, (ii) equity Securities in a Joint Venture or (iii) an
Investment in a Person, in each case that is organized under the laws of any
jurisdiction outside of the United States of America or Canada.
"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
(ii) such other office of Administrative Agent as may from time to time
hereafter be designated as such in a written notice delivered by Administrative
Agent to Company and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any domestic or foreign
government including any federal, provincial, state, territorial or municipal
government and any government agency, tribunal, commission or other authority
exercising or purporting to exercise executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state, provincial or local Governmental Authority, agency or court.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," "infectious waste," "toxic substances" or
any other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar meaning and regulatory effect import under any
applicable Environmental Laws; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos in any form; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million; (ix) pesticides; and (x) any other
16
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Governmental Authority.
"INDEBTEDNESS," as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute Contingent Obligations and not Indebtedness. For the
avoidance of doubt, "INDEBTEDNESS" shall not include (i) obligations in respect
of Operating Leases, including, without limitation, Contingent Obligations in
respect of Operating Leases, or (ii) landlord allowances in connection with
leased properties.
"INDEMNIFIED ENVIRONMENTAL LIABILITIES" has the meaning set
forth in subsection 10.3.
"INDEMNIFIED LIABILITIES" has the meaning set forth in
subsection 10.3.
"INDEMNITEES" has the meaning assigned to that term in
subsection 10.3.
"INITIAL PUBLIC OFFERING" means a widely dispersed initial
public offering of Company's common stock made after the Closing Date and
resulting in gross proceeds to Company of at least $75,000,000.
"INSOLVENCY EVENT" means, with respect to any Person, the
occurrence of any of the events described in subsection 8.6 or 8.7; provided
that, solely for purposes of this definition, any references to Company or any
of its Subsidiaries in subsection 8.6 or 8.7 shall be deemed to be a reference
to such Person.
"INSOLVENCY LAWS" means the Bankruptcy Code, the Bankruptcy
and Insolvency Act, R.S.C. 1992, C.27, the CCAA or any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect in the United
States of America or any state thereof or Canada or any province thereof.
"INSURANCE/CONDEMNATION PREPAYMENT AMOUNT" has the meaning set
forth in subsection 2.4B(ii)(b).
"INTELLECTUAL PROPERTY" means all patents, trademarks,
designs, tradenames, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of Company and its Subsidiaries as
currently conducted that are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken as a whole.
17
"INTERCOMPANY NOTE" means a promissory note issued by a Wholly
Owned North American Subsidiary of Company to Company or any other Wholly Owned
North American Subsidiary of Company or by Company to a Wholly Owned North
American Subsidiary of Company to evidence intercompany debt in the form of
Exhibit V annexed hereto, as such Intercompany Note may be amended, supplemented
or otherwise modified in accordance with subsection 7.14A.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement to
be executed and delivered on the Closing Date among Collateral Agent, BTCo, as
Administrative Agent hereunder, BTCo, as US administrative agent under the
Priority Secured Credit Agreement, Deutsche Bank AG, Canada Branch, as CN
administrative agent under the Priority Secured Credit Agreement, and, upon
execution of counterparts to the Intercreditor Agreement by any other Persons
who may become parties to the Intercreditor Agreement in accordance with the
terms thereof, such other Persons, in substantially the form of Exhibit XIII
annexed hereto, as such Intercreditor Agreement may thereafter be amended,
restated, supplemented or modified from time to time.
"INTEREST EXPENSE" for any Person means, for any period, the
difference between (i) total interest expense (including that portion
attributable to Capital Leases in accordance with GAAP, capitalized interest and
letter of credit fees and commitment fees payable under the Priority Secured
Credit Agreement) of such Person and its Subsidiaries with respect to all
outstanding Indebtedness of such Person and its Subsidiaries, including, without
limitation, all commissions, discounts, and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Agreements, but excluding, however, in the case of Company,
any fees payable under subsection 2.3 of this Agreement and any fees payable
under subsection 2.3 of the Priority Secured Credit Agreement (other than
commitment fees payable under subsection 2.3A of the Priority Secured Credit
Agreement) and any fees payable in connection with an amendment, waiver or other
modification to this Agreement or the Priority Secured Credit Agreement
(including any non-cash amortization of such fees in accordance with GAAP) and
(ii) total interest income of such Person and its Subsidiaries during such
period.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each January 15, April 15, July 15, and October 15 of each year,
commencing on the first such date to occur after the Closing Date and (ii) with
respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
longer than three months "Interest Payment Date" shall also include the date
that is three months after the commencement of such Interest Period or an
integral multiple thereof.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
18
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person (other than a Person
that prior to such purchase or acquisition was a Wholly Owned North American
Subsidiary of Company and a party to the Subsidiary Guaranty and the Security
Agreement), (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any Person other
than Company or any of its Wholly Owned North American Subsidiaries that is a
party to the Subsidiary Guaranty and the Security Agreement, of any equity
Securities of such Subsidiary, or (iii) any direct or indirect loan, advance or
capital contribution by Company or any of its Subsidiaries to any other Person
other than a Wholly Owned North American Subsidiary of Company which is a party
to the Subsidiary Guaranty and the Security Agreement, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"INVESTMENT EXPENDITURE AMOUNT" has the meaning set forth in
subsection 7.3A(viii).
"INVESTMENT/ACQUISITION EXPENDITURE AMOUNT" has the meaning
set forth in subsection 7.3A(viii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, limited liability company,
partnership or other legal form; provided that in no event shall any corporate
or limited liability company Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan
Party as lessee under any lease of real or immovable property, other than any
such leasehold interest designated from time to time by Administrative Agent in
its reasonable discretion as not being required to be included in the
Collateral.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on Schedule 2.1 and any Person becoming a Lender pursuant
to subsection 2.1A(ii)(b) together with their successors and permitted assigns
pursuant to subsection 10.1; provided that the term "Lenders," when used in the
context of Restructured Term Loan Commitments, shall mean Lenders having a
Restructured Term Loan Commitment.
"LEVERAGE RATIO" means, as of any date of determination, the
ratio of (a) Wholly Owned Total Debt on the last day of the most recently ended
four Fiscal Quarter period to (b) Wholly Owned EBITDA for such four Fiscal
Quarter period.
"LIEN" means any lien, mortgage, deed of trust, pledge,
assignment, security interest, charge or encumbrance of any kind (including any
conditional sale or other title
19
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Restructured Term
Loans and Supplemental Term Loans.
"LOAN PARTY" means any of Company or any Subsidiary of Company
executing the Subsidiary Guaranty, and "LOAN PARTIES" means all such Persons,
collectively.
"MAINTENANCE CAPITAL EXPENDITURES" means Capital Expenditures
other than New Build Capital Expenditures.
"MAJOR ASSET SALE" means any Asset Sale which is not a Minor
Asset Sale.
"MAJOR ASSET SALE PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(a)(2).
"MANAGEMENT FEES" means fees payable to Sponsors or Affiliates
of Sponsors, subject to the provisions of subsection 7.10, for services in
advising on the management of the business of Company and its Subsidiaries.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
on the business, operations, properties, assets, liabilities, condition
(financial or otherwise) or prospects of the Company and its Wholly Owned
Subsidiaries taken as a whole, or (ii) the impairment in any material respect of
the ability of any Loan Party to perform, or of Administrative Agent, Collateral
Agent or Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Term Loan
Documents and the Priority Secured Loan Documents (as defined in the Priority
Secured Credit Agreement)) which would be required to be filed as an exhibit to
an SEC Report under Item 601(b)(10) of Regulation S-K.
"MERGED SUBSIDIARY" and "MERGED SUBSIDIARIES" have the
meanings set forth in subsection 5.21.
"MINOR ASSET SALE" means an Asset Sale producing Net Asset
Sale Proceeds of less than $10,000,000.
"MINOR ASSET SALE PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(a)(1).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Services, Inc.
20
"MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust, a debenture, a hypothec or a mortgage or by any similar
title) executed and delivered by any Loan Party, substantially in the form of
Exhibit XV-A annexed hereto with respect to Canadian real property and in the
form of Exhibit XV-B annexed hereto with respect to United States real property,
in each case with such changes thereto as may be recommended by Collateral
Agent's local counsel based on local laws or customary local mortgage or deed of
trust practices, or (ii) at Collateral Agent's option, in the case of an
Additional Mortgaged Property, an amendment to an existing Mortgage, in form
reasonably satisfactory to Collateral Agent, adding such Additional Mortgaged
Property to the Real Property Assets encumbered by such existing Mortgage, in
either case as such security instrument or amendment may be amended, restated,
supplemented or otherwise modified from time to time. "MORTGAGES" means all such
instruments, including the Closing Date Mortgages and any Additional Mortgages,
collectively.
"MORTGAGED PROPERTIES" means, collectively, the Closing Date
Mortgaged Properties and the Additional Mortgaged Properties.
"MULTIEMPLOYER PLAN" means a "multiemployer plan," as defined
in Section 3(37) of ERISA, to which Company or any of its ERISA Affiliates is
contributing, or ever has contributed, or to which Company or any of its ERISA
Affiliates has, or ever has had, an obligation to contribute.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received by Company or any of its Subsidiaries from such
Asset Sale, net of any bona fide direct costs incurred in connection with such
Asset Sale, including, without limitation, (i) real property transfer Tax,
recording charges, brokers' fees, investment banking fees and income Taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans and the Priority
Secured Loans) that is secured by a Lien on the equity Securities or assets in
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale.
"NET DEBT SECURITIES PROCEEDS" mean Cash proceeds net of
underwriting discounts, fees and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and expenses,
from the issuance of Indebtedness of Company or any of its Subsidiaries after
the Closing Date (other than the proceeds of Indebtedness permitted pursuant to
subsection 7.1).
"NET EQUITY SECURITIES PROCEEDS" means Cash proceeds net of
underwriting discounts, fees and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and expenses,
from the issuance of equity securities of Company or any of its Subsidiaries
after the Closing Date (other than the proceeds of Permitted Cure Securities to
the extent Company elects to use such proceeds to increase Wholly Owned EBITDA
pursuant to subsection 7.6C(i)(a)).
21
"NET INCOME" of a Person means, for any period, the net income
(or loss) of such Person and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan or Canadian
Pension Plan.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation, expropriation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and reasonable documented costs incurred by Company or
such Subsidiary in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof and, in the case of any such
taking, net of (X) income Taxes reasonably estimated to be actually payable
within two years of the date of such taking as a result of any gain recognized
in connection therewith and (Y) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans and the Priority Secured Loans) that is secured by a Lien on the assets
taken that is required to be repaid under the terms thereof as a result of such
taking.
"NET PROCEEDS AMOUNT" has the meaning set forth in subsection
2.4B(ii)(g).
"NEW BUILD CAPITAL EXPENDITURES" means Capital Expenditures
for the development and/or construction of theatres to be operated by Company
and its Subsidiaries (other than Capital Expenditures incurred in the ordinary
course of business for the maintenance or refurbishment of theatres).
"NON-U.S. LENDER" has the meaning set forth in subsection
2.7B(iii)(a).
"NORTH AMERICAN SUBSIDIARY" means any Subsidiary of Company
other than a Foreign Subsidiary or an Off-Balance Sheet Subsidiary.
"NOTES" means one or more of the Restructured Term Notes or
the Supplemental Term Notes.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to the Loans specified therein.
"OAKTREE" means Oaktree Capital Management, LLC, as general
partner and/or investment manager of certain funds and accounts managed by it.
22
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Collateral Agent,
Lenders or any of them under the Term Loan Documents, whether for principal,
interest (including interest accruing on or after the occurrence of an
Insolvency Event), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
"OFF-BALANCE SHEET NEW BUILD CAPITAL EXPENDITURES" means New
Build Capital Expenditures made by an Off-Balance Sheet Subsidiary and financed
by equity contributions and/or Indebtedness (including Capital Leases) not
included on the consolidated balance sheet of Company and its Subsidiaries and
not guaranteed by Company or any of its Subsidiaries.
"OFF-BALANCE SHEET SUBSIDIARY" means any Subsidiary of Company
(i) that engages in no activities other than the financing and making of
Off-Balance Sheet New Build Capital Expenditures and operating theatres built
with Off-Balance Sheet New Build Capital Expenditures and (ii) no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which is
guaranteed by Company or any other Subsidiary of Company, is recourse to or in
any way obligates Company or any other Subsidiary of Company, or subjects any
property or asset of Company or any other Subsidiary of Company to the
satisfaction thereof.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by its
chief financial officer, its treasurer or controller; provided that every
Officers' Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied with; and provided
further that with respect to any certificate required to be delivered pursuant
to subsection 4.1, such certificate may be executed by any one such officer
approved by Administrative Agent.
"ONEX" means Onex Corporation, an Ontario corporation.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal, immovable, movable or mixed)
that is not a Capital Lease other than any such lease under which that Person is
the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
23
"PERMITTED ACQUISITION" means an acquisition (whether pursuant
to an acquisition of stock, assets or otherwise) by Company or any of its Wholly
Owned North American Subsidiaries from any Person of a business or an interest
in a business in which all of the following requirements are satisfied:
(i) such business is permitted by subsection 7.12;
(ii) immediately after giving effect to such acquisition no
Potential Event of Default or Event of Default shall have occurred and
be continuing or would result therefrom;
(iii) Company can demonstrate in form and substance
satisfactory to Administrative Agent immediately after giving effect to
such acquisition that Company is in compliance on a Pro Forma Basis
with the covenants set forth in Section 7 of this Agreement; and
(iv) immediately after giving effect to such acquisition, such
business or interest in a business (a) is 100% owned by Company or one
of its Wholly Owned North American Subsidiaries and (b) does not
include an Investment in a Joint Venture or a non-Wholly Owned
Subsidiary.
"PERMITTED CURE SECURITIES" means (i) an equity security of
Company (a) having no mandatory redemption, repurchase, retirement, sinking fund
or similar requirements prior to August 31, 2008, (b) upon which all dividends,
at the election of Company, may be payable in additional shares of that equity
security and (c) the terms and conditions of which are otherwise satisfactory to
Administrative Agent or (ii) Subordinated Indebtedness of Company which shall
(a) have no mandatory redemption, principal payment, retirement, sinking fund or
similar requirement prior to ▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) permit, at the election of
Company, the payment of interest by the issuance of additional amounts of that
debt security, (c) be subordinated in right of payment to all other Indebtedness
of Company and its Subsidiaries that is designated as senior to such
Subordinated Indebtedness and (d) contain terms and conditions otherwise
satisfactory to Administrative Agent.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
6.3;
(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set off, statutory Liens of carriers, warehousemen,
mechanics and materialmen, and other Liens imposed by law, in each case
incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith by appropriate proceedings, if (1)
such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor and (2) in the case of a
Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any material
portion of the Collateral on account of such Lien;
24
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance, employment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long
as no foreclosure, sale or similar proceedings have been commenced with
respect to any material portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, encroachments,
minor defects or irregularities in title, and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted under this Agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (b);
(viii) Liens arising from filing UCC or other applicable
personal property financing statements relating solely to leases
permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods; and
(x) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of Company or such
Subsidiary.
"PERMITTED INVESTMENT" means a direct Investment by Company or
a Wholly Owned North American Subsidiary of Company in a Joint Venture,
non-Wholly Owned Subsidiary or Off-Balance Sheet Subsidiary, in each case which
is principally engaged in a business that Company and its Subsidiaries are
permitted to engage in under subsection 7.12. The value of any Permitted
Investment made by Company or a Wholly Owned North American Subsidiary of
Company with an asset other than cash shall be equal to the fair market value of
such asset at the time such Permitted Investment is made, as determined in good
faith by the Board of Directors of Company or such Wholly Owned North American
Subsidiary, as the case may be.
25
"PERMITTED SUPPLEMENTAL TERM LOAN ACQUISITION" means a
Permitted Acquisition financed with Supplemental Term Loans in which both of the
following are satisfied:
(i) the Permitted Acquisition has been approved by Requisite
Lenders; and
(ii) the Applicable Leverage Ratio as of the date of such
Permitted Supplemental Term Loan Acquisition, determined on a Supplemental Term
Loan Pro Forma Basis as of such date, is decreased.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"PLAN OF REORGANIZATION" means the First Amended Chapter 11
Plan of Company and Subsidiary Debtors under Chapter 11 of the Bankruptcy Code
dated January 14, 2002.
"POST-DEFAULT ADVANCES SUBLIMIT" has the meaning assigned that
term in the DIP Credit Agreement.
"POST-CLOSING LETTER" means that certain post-closing letter
agreement of even date herewith among Company, Cineplex Odeon, Administrative
Agent, US Administrative Agent (as defined in the Priority Secured Credit
Agreement) and CN Administrative Agent (as defined in the Priority Secured
Credit Agreement).
"POST-PETITION INCREMENTAL US SUBLIMIT" has the meaning
assigned to that term in the DIP Credit Agreement.
"POST-PETITION INCREMENTAL CANADIAN SUBLIMIT" has the meaning
assigned to that term in the DIP Credit Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PPSA" means the Personal Property Security Act (Ontario) and
any regulations thereunder or any similar personal property security legislation
in any other Canadian jurisdiction, as amended from time to time.
"PRE-PETITION CREDIT AGREEMENT" means that certain Credit
Agreement dated as of May 14, 1998, as amended, among Company, the Pre-Petition
Lenders, BTCo, as administrative agent and as co-syndication agent, Bank of
America, N.A., as a co-syndication agent, The Bank of New York, as a
co-syndication agent, and Credit Suisse First Boston, as a co-syndication agent.
26
"PRE-PETITION LENDERS" means the parties identified as lenders
and indemnifying lenders under the Pre-Petition Credit Agreement in their
capacities as lenders under the Pre-Petition Credit Agreement, together with
their successors and assigns.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by BTCo as its prime commercial lending rate in
effect at its principal office in New York City. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"PRIORITY SECURED ADMINISTRATIVE AGENT" has the meaning
assigned to "Administrative Agent" in the Priority Secured Credit Agreement.
"PRIORITY SECURED CREDIT AGREEMENT" means that certain
Priority Secured Credit Agreement dated as of March 21, 2002 among Company, the
Priority Secured Lenders, BTCo, as US administrative agent, Deutsche Bank AG,
Canada Branch, as CN administrative agent, General Electric Capital Corporation,
as syndication agent and Deutsche Banc Alex. ▇▇▇▇▇ Inc., as sole and exclusive
arranger, as such Priority Secured Credit Agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"PRIORITY SECURED CREDIT AGREEMENT OBLIGATIONS" has the
meaning assigned to the term "Obligations" in the Priority Secured Credit
Agreement.
"PRIORITY SECURED LENDERS" means the parties identified as
lenders and indemnifying lenders under the Priority Secured Credit Agreement in
their capacities as lenders under the Priority Secured Credit Agreement.
"PRIORITY SECURED LOANS" has the meaning assigned to the term
"Loans" in the Priority Secured Credit Agreement.
"PRIORITY SECURED REVOLVING LOAN COMMITMENTS" has the meaning
assigned to the term "Revolving Loan Commitment" in the Priority Secured Credit
Agreement.
"PRIORITY SECURED REVOLVING LOANS" has the meaning assigned to
the term "Revolving Loans" in the Priority Secured Credit Agreement.
"PRIORITY SECURED TERM LOANS" has the meaning assigned to the
term "Term Loans" in the Priority Secured Credit Agreement.
"PRIVATE EQUITY PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(d)(2)(A).
"PRIVATE NON-SPONSOR EQUITY OFFERING" means any offering of
equity securities of Company or any of its Subsidiaries not registered under the
Securities Act (except offerings made in reliance on Rule 144A thereunder and
subject to exchange rights for registered securities) and placed entirely with
Persons other than the Sponsors and their respective Sponsor Affiliates.
27
"PRIVATE SPONSOR EQUITY OFFERING" means any offering of equity
securities of Company or any of its Subsidiaries not registered under the
Securities Act and placed entirely with the Sponsors or their respective Sponsor
Affiliates.
"PRO FORMA BASIS" means, as of any date of determination, the
compliance of Company with the Financial Performance Covenants as of the last
day of the four Fiscal Quarter period most recently ended prior to such date of
determination for which the relevant financial information is available (the
"COMPLIANCE PERIOD"), after giving effect on a pro forma basis to any Permitted
Acquisitions with a purchase price in excess of $5,000,000 individually or in
the aggregate made during such Compliance Period and any dispositions or theatre
closings with EBITDA during the four Fiscal Quarters immediately preceding the
date of such disposition or theatre closing in excess of $2,000,000 individually
or $5,000,000 in the aggregate made during such Compliance Period, other than
sales of inventory in the ordinary course of business and dispositions of
obsolete equipment during such Compliance Period, on the following basis:
(i) any Indebtedness incurred or assumed by Company or any of
its Wholly Owned Subsidiaries in connection with such Permitted
Acquisitions and any Indebtedness of Company or any of its Wholly Owned
Subsidiaries repaid in connection with such Permitted Acquisitions,
dispositions or theatre closings shall be deemed to have been incurred
or repaid, respectively, as of the first day of the Compliance Period;
(ii) if such Indebtedness incurred or assumed by Company or
any of its Wholly Owned Subsidiaries in connection with such Permitted
Acquisitions has a floating or formula rate, then the rate of interest
for such Indebtedness for the applicable period shall be computed as if
the rate in effect for such Indebtedness on the relevant measurement
date had been the applicable rate for the entire applicable period;
(iii) income statement items (whether positive or negative)
attributable to the property or business acquired, disposed of or
closed in such Permitted Acquisitions, dispositions or theatre closings
shall be included as if such acquisitions, dispositions or theatre
closings took place on the first day of such Compliance Period on a pro
forma basis; and
(iv) any historical, extraordinary, non-recurring costs or
expenses or other verifiable costs or expenses that will not continue
after the acquisition, disposition or closing date may be eliminated
and other expenses and cost reductions may be reflected on a basis
consistent with Regulation S-X promulgated by the Securities and
Exchange Commission;
provided that all pro forma adjustments shall be subject to the reasonable
approval of the Administrative Agent.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Restructured Term Loans of any
Lender, the percentage obtained by dividing (x) the Restructured Term Loans of
that Lender by (y) the aggregate Restructured Term Loans of all Lenders (or, in
the case of matters prior to the Closing Date, substituting and utilizing the
Restructured Term Loan Commitments of the Lenders), (ii) with respect to all
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payments, computations and other matters relating to the Supplemental Term Loans
of any Lender, the percentage obtained by dividing (x) the Supplemental Term
Loans of that Lender by (y) the aggregate Supplemental Term Loans of all Lenders
and (iii) for all other purposes with respect to each Lender, the percentage
obtained by dividing (x) the sum of the Restructured Term Loans of that Lender
plus the Supplemental Term Loans of that Lender by (y) the sum of the aggregate
Restructured Term Loans of all Lenders plus the aggregate Supplemental Term
Loans of all Lenders. The initial Pro Rata Share of each Lender for purposes of
clause (i) of the preceding sentence is set forth opposite the name of that
Lender in Schedule 2.1 annexed hereto; provided that Schedule 2.1 shall be
amended and each Lender's Pro Rata Share for purposes of each of clauses (i),
(ii) and (iii) of the preceding sentence shall be adjusted from time to time to
give effect to Supplemental Term Loans made pursuant to subsection 2.1A(ii) and
any assignments pursuant to subsection 10.1B.
"PROCEEDINGS" has the meaning assigned to that term in
subsection 6.1(x).
"PROSPECTIVE LENDER" has the meaning set forth in subsection
2.1A(ii)(b).
"PUBLIC EQUITY OFFERINGS" means an Initial Public Offering and
any other offering of equity securities of Company or any of its Subsidiaries
registered under the Securities Act (except offerings on Form S-8).
"PUBLIC EQUITY PREPAYMENT AMOUNT" has the meaning assigned in
subsection 2.4B(ii)(d)(1).
"PURCHASE MONEY MORTGAGE" has the meaning assigned to that
term in subsection 7.2A(iii).
"PURCHASE MONEY SECURITY INTEREST" has the meaning assigned to
that term in subsection 7.2A(iii).
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by Company or any Subsidiary Guarantor in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Collateral Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "Record Document" means, with respect to any Leasehold
Property, (a) the lease or notice thereof evidencing such Leasehold Property or
a memorandum thereof, executed and acknowledged by the owner of the affected
real property, as lessor, or (b) if such Leasehold Property was acquired or
subleased from the holder of a Recorded Leasehold Interest, the applicable
assignment or sublease document, executed and acknowledged by such holder, or
notice thereof, in each case in form sufficient to give such constructive notice
upon recordation and otherwise in form reasonably satisfactory to Collateral
Agent.
"REGISTER" has the meaning assigned to that term in subsection
2.1D(i).
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"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"REPLACEMENT LENDER" has the meaning set forth in subsection
10.1B(iii).
"REQUIRED PREPAYMENT DATE" has the meaning set forth in
subsection 2.4B(iii)(f).
"REQUISITE CLASS LENDERS" means, at any time of determination,
(i) for Lenders holding Restructured Term Loans, Lenders holding more than 50%
of the aggregate outstanding principal amount of Restructured Term Loans of all
Lenders; and (ii) for Lenders holding Supplemental Term Loans, Lenders holding
more than 50% of the aggregate outstanding principal amount of Supplemental Term
Loans of all Lenders (all of which constitute a single Class); provided that, so
long as Sponsors or Sponsor Affiliates own or manage at least 35% of Company's
total voting securities, all Restructured Term Loans and Supplemental Term Loans
owned or managed by the Sponsors and Sponsor Affiliates shall be disregarded for
purposes of determining Requisite Class Lenders except for any amendment,
waiver, consent, supplement or other modification to this Agreement that would
relatively diminish payment rights of the Sponsors or Sponsor Affiliates or the
Loans owned by them from other Lenders holding the same Class of Loans.
"REQUISITE LENDERS" means Lenders having or holding a majority
of the sum of the aggregate Restructured Term Loans of all Lenders plus the
aggregate Supplemental Term Loans of all Lenders.
"RESPONSIBLE OFFICER" means the chief executive officer,
president, vice president, chief financial officer, principal accounting officer
or treasurer of Company or any of its Subsidiaries.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that 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 stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
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"RESTRUCTURED TERM LOAN COMMITMENT" means the commitment of a
Lender to make a Restructured Term Loan to Company pursuant to subsection
2.1A(i) and "RESTRUCTURED TERM LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"RESTRUCTURED TERM LOANS" means the term loans to be made by
the Lenders to Company on the Closing Date pursuant to subsection 2.1A(i).
"RESTRUCTURED TERM NOTES" means one or more of the promissory
notes of Company issued pursuant to subsection 2.1E(i) on the Closing Date and
any promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of Restructured Term Loans of
any Lenders, in each case substantially in the form of Exhibit III-A annexed
hereto, as they may be amended, supplemented or otherwise modified from time to
time.
"RETAINED PROCEEDS AVAILABLE FOR CAPEX" means, for any Fiscal
Year of Company, the sum of (x) the amount of Net Asset Sale Proceeds realized
subsequent to the Closing Date in respect of all Minor Asset Sales (other than
Deemed Major Asset Sale Proceeds), Net Equity Securities Proceeds from Public
Equity Offerings and Net Equity Securities Proceeds from Private Non-Sponsor
Equity Offerings received during such Fiscal Year or retained during the
immediately preceding Fiscal Year and not required to be applied as mandatory
prepayments of Loans pursuant to subsections 2.4B(ii)(a)(1), 2.4B(ii)(d)(1) and
2.4B(ii)(d)(2), respectively, (y) the amount of Net Equity Securities Proceeds
from Private Sponsor Equity Offerings during such Fiscal Year plus (z) the
amount of Excess Cash Flow for the immediately preceding Fiscal Year not
required to be applied as a mandatory prepayment of the Loans pursuant to
subsection 2.4B(ii)(e); provided that Net Asset Sale Proceeds from Asset Sales
of the assets listed on Schedule 1.1C shall not be included in Retained Proceeds
Available for CapEx to the extent such Net Asset Sale Proceeds do not exceed the
West 34th Street Loan Amount.
"S&P" means Standard & Poor's Ratings Services.
"SCHEDULED 2003 NEW BUILD CAPITAL EXPENDITURES" means New
Build Capital Expenditures during the Fiscal Year ending February 28, 2003
relating to the new theatres listed on, and in amounts not exceeding the amounts
set forth on, Schedule 7.13B.
"SEC" means the Securities and Exchange Commission.
"SEC REPORT" means any annual, quarterly and current report
filed by the Company with the SEC under Section 13(a) of the Exchange Act and
proxy statements mailed by Company to its shareholders.
"SECOND PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that such Lien
(or any distribution priority relating to such Lien) has priority over any other
Liens (or distribution priority) on such Collateral, other than Liens permitted
under subsections 7.2A(i), (iii), (v), (vi) and (ix).
31
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" 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.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Company and the Subsidiary Guarantors on the Closing Date,
substantially in the form of Exhibit XI annexed hereto, as such Security
Agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule
1-02(w) of Regulation S-X under the Exchange Act, substituting 5 percent
whenever 10 percent appears in such Rule.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPECIFIED PRIORITY SECURED LOAN DEFAULT" has the meaning
assigned to the term "First Lien Debt Default" in the Intercreditor Agreement.
"SPONSOR AFFILIATES" means Affiliates of the Sponsors and any
Person that would be an Affiliated Fund of the Sponsors if they were Lenders.
"SPONSOR CONVERSION AMOUNT" has the meaning set forth in the
Recitals.
"SPONSORS" means Onex and Oaktree.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Company
(other than Indebtedness to any of its Subsidiaries) that is subordinated in
right of payment to the Obligations pursuant to documentation containing
maturities, amortization schedules, covenants,
32
defaults, remedies, subordination provisions and other material terms in form
and substance satisfactory to Administrative Agent.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"SUBSIDIARY DEBTORS" means the Subsidiaries of Company that
are the subject of the Chapter 11 Cases.
"SUBSIDIARY GUARANTOR" means, at any time, any of Company's
Wholly Owned North American Subsidiaries that are then a party to the Subsidiary
Guaranty.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
and delivered by Company's Wholly Owned North American Subsidiaries on the
Closing Date and to be executed and delivered by Company's Wholly Owned North
American Subsidiaries from time to time thereafter in accordance with subsection
6.9, substantially in the form of Exhibit XII annexed hereto, as such Subsidiary
Guaranty may be amended, supplemented or otherwise modified from time to time.
"SUPPLEMENTAL TERM LOAN PRO FORMA BASIS" means, as of any date
of determination, the compliance of Company with the Financial Performance
Covenants as of the last day of the four Fiscal Quarter period most recently
ended prior to such date of determination for which the relevant financial
information is available (the "SUPPLEMENTAL TERM LOAN COMPLIANCE PERIOD"), after
giving effect on a pro forma basis to any Permitted Supplemental Term Loan
Acquisitions made during such Supplemental Term Loan Compliance Period on the
following basis:
(i) any Supplemental Term Loans incurred by Company or any of
its Wholly Owned Subsidiaries in connection with such Permitted
Supplemental Term Loan Acquisitions shall be deemed to have been
incurred as of the first day of the Supplemental Term Loan Compliance
Period;
(ii) if such Supplemental Term Loans incurred by Company or
any of its Wholly Owned Subsidiaries in connection with such Permitted
Supplemental Term Loan Acquisitions has a floating or formula rate,
then the rate of interest for such Supplemental Term Loans for the
applicable period shall be computed as if the rate in effect for such
Supplemental Term Loans on the relevant measurement date had been the
applicable rate for the entire applicable period;
(iii) income statement items (whether positive or negative)
attributable to the property or business acquired in such Permitted
Supplemental Term Loan Acquisitions shall be included as if such
Permitted Supplemental Term Loan Acquisitions took place
33
on the first day of such Supplemental Term Loan Compliance Period on a
pro forma basis; and
(iv) any historical, extraordinary, non-recurring costs or
expenses or other verifiable costs or expenses that will not continue
after the acquisition date may be eliminated and other expenses and
cost reductions may be reflected on a basis consistent with Regulation
S-X promulgated by the Securities and Exchange Commission;
provided that all pro forma adjustments shall be subject to the reasonable
approval by the Administrative Agent.
"SUPPLEMENTAL TERM LOAN PRO FORMA LEVERAGE RATIO" means, as of
any date of determination, the Applicable Leverage Ratio in effect as of such
date of determination, determined on a Supplemental Term Loan Pro Forma Basis.
"SUPPLEMENTAL TERM LOANS" means term loans made pursuant to
subsection 2.1A(ii).
"SUPPLEMENTAL TERM LOANS AVAILABILITY EXPIRATION DATE" means
September 21, 2003.
"SUPPLEMENTAL TERM NOTES" means one or more of the promissory
notes of Company issued pursuant to subsection 2.1E(ii) on the dates of the
making of Supplemental Term Loans and any promissory notes issued by Company
pursuant to the last sentence of subsection 10.1(B)(i) in connection with
assignments of Supplemental Term Loans of any Lenders, in each case
substantially in the form of Exhibit III-B annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, including interest, penalties, additions to tax and similar liabilities
with respect thereto, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed.
"TERM LOAN DOCUMENTS" means this Agreement, the Notes, the
Subsidiary Guaranty, the Intercreditor Agreement, the Post-Closing Letter and
the Collateral Documents.
"THIRD PRIORITY" means, with respect to any Lien purported to
be created on any Collateral, that such Lien (or any distribution priority
thereof) has priority over any other Liens (or distribution priority) on such
Collateral, other than Liens permitted under subsection 7.2A(i), (iii), (v),
(vi) and (ix) and Second Priority Liens.
"U.S. DOLLARS" and the sign "$" mean the lawful money of the
United States of America.
"WAIVABLE PREPAYMENT" has the meaning set forth in subsection
2.4B(iii)(f).
"WEST ▇▇▇▇ ▇▇▇▇▇▇ LOAN AGREEMENT" has the meaning assigned to
that term in the DIP Credit Agreement.
34
"WEST 34TH STREET LOAN AMOUNT" means the amount of
Indebtedness outstanding under the West ▇▇▇▇ ▇▇▇▇▇▇ Loan Agreement and ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Note at 11:59 p.m. on the day immediately preceding the Closing Date.
"▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ NOTE" has the meaning assigned to that term
in the DIP Credit Agreement.
"▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ PROJECT" has the meaning assigned to that
term in the DIP Credit Agreement.
"WHOLLY OWNED" means, with respect to any Subsidiary of any
Person, that all of the capital stock or other equity interests, as the case may
be, in such Subsidiary (other than directors' or nominees' qualifying shares to
the extent such qualifying shares are required by applicable law) are owned
directly or indirectly by such Person.
"WHOLLY OWNED EBITDA" means, for any period, the sum of the
amounts for such period of EBITDA of Company and its Subsidiaries (other than
Off-Balance Sheet Subsidiaries); provided that there shall be excluded (i)
EBITDA and/or the income (or loss) of any Person in which any other Person
(other than Company or any of its Wholly Owned Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Wholly Owned Subsidiaries by such Person
during such period, (ii) EBITDA and/or the income (or loss) of any Person
accrued prior to the date it becomes a Wholly Owned Subsidiary of Company or is
merged into or consolidated with Company or any of its Wholly Owned Subsidiaries
or that Person's assets are acquired by Company or any of its Wholly Owned
Subsidiaries, and (iii) EBITDA and/or the income of any Subsidiary of Company to
the extent that the declaration or payment of dividends or similar distributions
by that Subsidiary of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary.
"WHOLLY OWNED EBITDAR" means, for any period, the sum of the
amounts for such period of (a) Wholly Owned EBITDA plus (b) Wholly Owned Rent
Expense.
"WHOLLY OWNED RENT EXPENSE" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries on
a consolidated basis (and not included in Interest Expense) during that period
under all Capital Leases and Operating Leases to which Company or any of its
Subsidiaries is a party as lessee excluding, however, an amount equal to the
amount of all rents paid or payable by any non-Wholly Owned Subsidiary of
Company or any Off-Balance Sheet Subsidiaries (to the extent otherwise included
in the aggregate amount of all rents paid or payable by Company and its
Subsidiaries) but including, however, an amount equal to the aggregate maximum
liability of Company and its Wholly Owned Subsidiaries (other than Off-Balance
Sheet Subsidiaries) for such period in respect of Contingent Obligations of
Company or such Wholly Owned Subsidiary in respect of rent paid under Operating
Leases of any non-Wholly Owned Subsidiary of Company or any Joint Venture of
Company or any of its Subsidiaries or any Off-Balance Sheet Subsidiary (other
than Contingent Obligations of Company existing on the Closing Date in respect
of rent paid under the Operating Leases set forth on Schedule 1.1W). For the
avoidance of doubt, amortization of
35
landlord allowances received by Company and its Wholly Owned Subsidiaries in
connection with leased properties shall not be counted as reductions of Wholly
Owned Rent Expense to the extent such landlord allowances are counted as
reductions of Capital Expenditures.
"WHOLLY OWNED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Wholly Owned Subsidiaries (other than Off-Balance Sheet
Subsidiaries) less cash of Company and its Wholly Owned Subsidiaries (other than
Off-Balance Sheet Subsidiaries), all as determined on a consolidated basis in
accordance with GAAP, plus the aggregate maximum liability of Company and its
Wholly Owned Subsidiaries (other than Off-Balance Sheet Subsidiaries) in respect
of Contingent Obligations in respect of any Indebtedness of any Joint Venture of
Company or any of its Subsidiaries or any non-Wholly Owned Subsidiary of Company
or any of its Subsidiaries (other than Contingent Obligations of Company
existing on the Closing Date in respect of the Indebtedness set forth on
Schedule 1.1WH) or any Off-Balance Sheet Subsidiary.
"WHOLLY OWNED TOTAL DEBT INTEREST EXPENSE" means, for any
period, total Interest Expense of Company and its Subsidiaries with respect to
Wholly Owned Total Debt.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
Whenever this Agreement refers to the calculation of amounts in a currency other
than U.S. Dollars, the maintenance of any Indebtedness, Lien, Contingent
Obligation or Investment in such currency shall be permitted, regardless of
subsequent fluctuations in exchange rates, if such Indebtedness, Lien,
Contingent Obligation or Investment was permitted under this Agreement at the
date on which it was incurred.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference. An Event of Default shall "continue" or be "continuing" until
such Event of Default has been waived in accordance with subsection 10.6 hereof
or cured as provided herein.
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SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. Commitments and Loans.
(i) Restructured Term Loans. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, each Lender having a Restructured Term
Loan Commitment hereby severally agrees, subject to the limitations set forth
below, to lend to Company on the Closing Date an amount equal to its Pro Rata
Share of the aggregate amount of the Restructured Term Loan Commitments then in
effect to be used for the purposes identified in subsection 2.5A. The original
amount of each Lender's Restructured Term Loan Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto, and the aggregate original amount of
the Restructured Term Loan Commitments is $429,932,498.68. Each Lender's
Restructured Term Loan Commitment shall expire on March 31, 2002 if the
Restructured Term Loans are not made on or before that date. Company may make
only one borrowing under the Restructured Term Loan Commitments. Amounts
borrowed under this subsection 2.1A(i) and subsequently repaid or prepaid may
not be reborrowed.
(ii) Supplemental Term Loans.
(a) Supplemental Term Loans. Prior to the
Supplemental Term Loan Availability Expiration Date and upon
not more than two occasions, subject to the requirements of
this subsection 2.1A(ii) and the other terms and conditions of
this Agreement and in reliance upon the representations and
warranties of Company herein set forth, Company may propose to
incur Supplemental Term Loans in accordance with clause (b) of
this subsection 2.1A(ii) to be used solely for the purposes
identified in subsection 2.5B. The aggregate amount of
Supplemental Term Loans shall not exceed (1) if the
Supplemental Term Loan Pro Forma Leverage Ratio at the date of
incurrence equals or exceeds 3.50:1.00, $125,000,000 or (2) if
the Supplemental Term Loan Pro Forma Leverage Ratio at the
date of incurrence is less than 3.50:1.00, $250,000,000.
Supplemental Term Loans must either (A) (y) bear interest
determined solely by reference to the Base Rate plus the
Applicable Base Rate Margin or the Adjusted Eurodollar Rate
plus the Applicable Eurodollar Rate Margin and (z) have
scheduled principal payments precisely proportionate to the
then remaining unpaid installments of principal of the
Restructured Term Loans set forth in subsection 2.4A(i) or (B)
(y) bear interest at floating rates not in excess of the sum
of the Adjusted Eurodollar Rate then in effect plus the
Applicable Eurodollar Rate Margin for Restructured Term Loans
plus 2.00% per annum or at a fixed rate not in excess of the
sum of the Adjusted Eurodollar Rate then in effect plus the
Applicable Eurodollar Rate Margin for Restructured Term Loans
plus 2% per annum and (z) have a weighted average life to
maturity of all scheduled principal installments of such
Supplemental Term Loans longer than the then weighted average
life to maturity of the then remaining unpaid installments of
principal of the Restructured Term Loans. Except as set forth
in the preceding sentence and as expressly set forth elsewhere
in this Agreement, the Supplemental Term Loans will be deemed
to be an additional tranche of Term Loans with terms identical
to the
37
Restructured Term Loans. Supplemental Term Loans may only be
incurred (x) with the written consent of Administrative Agent
and Requisite Lenders, (y) solely in connection with a
Permitted Supplemental Term Loan Acquisition and (z) if at the
time of such incurrence no Event of Default or Potential Event
of Default shall have occurred and be continuing or shall be
caused thereby. Amounts borrowed under this subsection
2.1A(ii) and subsequently repaid or prepaid may not be
reborrowed.
(b) Procedure for Requesting Supplemental Term Loans.
If Company desires to incur Supplemental Term Loans, Company
may request any one or more Lenders, selected by Company in
its sole discretion, to make Supplemental Term Loans up to a
stated maximum aggregate principal amount and at proposed
interest rates, fees and amortization schedule for the
Supplemental Term Loan set forth in such request (provided
that such terms shall be in accordance with subsection
2.1A(ii)(a) and provided further that Company shall,
concurrently with such request, notify Administrative Agent,
and Administrative Agent shall thereafter notify all Lenders,
of such request). Any Lender requested by Company to do so may
(but is not obligated to) make Supplemental Term Loans. If
Lenders (including Lenders not initially selected by Company)
are not willing to provide all of the Supplemental Term Loans
requested on the proposed terms, with the written consent of
Administrative Agent (such consent not to be unreasonably
withheld), Company may request one or more Persons meeting the
requirements of the definition of "Eligible Assignee" (each a
"PROSPECTIVE LENDER"), by execution of a Supplemental Term
Loan Acceptance substantially in the form of Exhibit XIV
hereunder, to become a Lender hereunder and make Supplemental
Term Loans. If one or more Lenders or Prospective Lenders
agree to make Supplemental Term Loans, (a) Company shall give
written notice to Administrative Agent specifying the
aggregate amount of the Supplemental Term Loans to be made,
the amount of Supplemental Term Loans to be made by each
Lender or Prospective Lender, the proposed Funding Date of
such Supplemental Term Loans and the interest rates, fees
payable and amortization schedule of the Supplemental Term
Loans. Company and Administrative Agent shall agree in writing
on all conditions (other than those specified in subsections
4.2 and 4.3) to the making of such Supplemental Term Loans.
Upon the making of the Supplemental Term Loans, subsection
2.4A(ii) shall be deemed amended to provide for the amount and
date of the scheduled payments of principal thereon and
subsection 2.2A(ii) shall be deemed amended to specify the
interest rate or rates applicable to the Supplemental Term
Loans, each Lender making Supplemental Term Loans shall
receive a Supplemental Term Note pursuant to subsection
2.1E(ii), with appropriate insertions, to evidence the
Supplemental Term Loan made by it, and Company shall make
payment to Administrative Agent (for distribution to each
Lender making Supplemental Term Loans) the fees payable for
such Loans.
B. Borrowing Mechanics. Loans made on any Funding Date as
Base Rate Loans shall not be subject to any minimum amounts.
Loans made on any Funding Date as Eurodollar Rate Loans shall be
in an aggregate minimum amount of $1,000,000 and, in the case of
Supplemental Term Loans, in integral multiples of $500,000 in
excess of that amount. Whenever Company desires that Lenders make
Loans, it shall deliver to Administrative Agent a Notice of
Borrowing no later than 11:00 A.M. (New York time) at least three
Business Days in advance of the proposed Funding Date (in the
case of a Eurodollar Rate Loan), or at least one
38
Business Day in advance of the proposed Funding Date (in the case of a
Base Rate Loan). The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount and type
of Loans requested, (iii) in the case of Loans made on the Closing
Date, that such Loans shall be Base Rate Loans, (iv) in the case of
Loans not made on the Closing Date, whether such Loans shall be Base
Rate Loans or Eurodollar Rate Loans, (v) in the case of any Loans
requested to be made as Eurodollar Rate Loans, the initial Interest
Period requested therefor. In lieu of delivering a Notice of Borrowing,
Company may give Administrative Agent telephonic notice by the required
time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of
a Notice of Borrowing to Administrative Agent on or before the
applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to
above that Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized to borrow
on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B, and upon funding of Loans by Lenders in accordance
with this Agreement pursuant to any such telephonic notice Company
shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding
of any Loans if any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by
Company of the proceeds of any Loans shall constitute a
re-certification by Company, as of the applicable Funding Date, as to
the matters to which Company is required to certify in the applicable
Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic
notice in lieu thereof) shall be irrevocable on and after the related
Interest Rate Determination Date, and Company shall be bound to either
(i) make a borrowing in accordance therewith or (ii) pay all amounts
due under subsection 2.6D.
C. Disbursement of Funds. All Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the
Restructured Term Loan Commitment of any Lender to make the particular
type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a
Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), Administrative Agent shall promptly
notify each Lender of the proposed borrowing. Each Lender shall make
the amount of its Loan available to Administrative Agent, in same day
funds in U.S. Dollars, at the Funding and Payment Office, not later
than 11:00 A.M. (New York time) on the applicable Funding Date;
provided that no funds shall be transferred with respect to the
Restructured Term Loans and, upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 and 4.3, such
Restructured Term Loans shall be deemed made, and the proceeds deemed
applied, in full satisfaction of all amounts of loans, unpaid interest
and unpaid letter of credit fees outstanding under the Pre-Petition
Credit Agreement and the Post-Default Advances Sublimit of
39
the DIP Credit Agreement as shown on Schedule 2.1. In the case of
Supplemental Term Loans, upon satisfaction or waiver of the conditions
precedent specified in subsections 4.2 and 4.3, Administrative Agent
shall make the proceeds of such Supplemental Term Loans available to
Company on the applicable Funding Date by causing an amount of same day
funds in U.S. Dollars equal to the proceeds of all such Supplemental
Term Loans received by Administrative Agent from Lenders to be credited
only to the account of Company at the Funding and Payment Office.
In the case of Supplemental Term Loans, unless Administrative
Agent shall have been notified by any Lender prior to the Funding Date
for any Supplemental Term Loans that such Lender does not intend to
make available to Administrative Agent the amount of such Lender's
Supplemental Term Loan requested on such Funding Date, Administrative
Agent may assume that such Lender has made such amount available to
Administrative Agent on such Funding Date and Administrative Agent may,
in its sole discretion, but shall not be obligated to, make available
to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative
Agent by such Lender, Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date
such amount is paid to Administrative Agent, at the customary rate set
by Administrative Agent for the correction of errors among banks for
three Business Days and thereafter at the Base Rate. If such Lender
does not pay such corresponding amount forthwith upon Administrative
Agent's demand therefor, Administrative Agent shall promptly notify
Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from
such Funding Date until the date such amount is paid to Administrative
Agent, at the rate payable under this Agreement for Base Rate Loans.
Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Restructured Term Loan Commitment
hereunder or to prejudice any rights that Company may have against any
Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the
names and addresses of Lenders and the Restructured Term Loan
Commitments and Loans of each Lender from time to time (the
"REGISTER"). The Register shall be available for inspection by Company
or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Restructured Term Loans and Supplemental Term Loans from time to time
of each Lender and each repayment or prepayment in respect of the
principal amount of the Restructured Term Loans or Supplemental Term
Loans of each Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect of the
applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the
amount of each Restructured Term Loan and
40
Supplemental Term Loan made by it and each payment in respect thereof.
Any such recordation shall be conclusive and binding on Company, absent
manifest error; provided that failure to make any such recordation, or
any error in such recordation, shall not affect Company's Obligations
in respect of the applicable Loans; and provided, further that in the
event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders
and owners of the corresponding Restructured Term Loan Commitments and
Loans listed therein for all purposes hereof, and no assignment or
transfer of any such Restructured Term Loan Commitment or Loan shall be
effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted
by Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Restructured Term Loan Commitment or Loan
shall be owed to the Lender listed in the Register as the owner
thereof, and any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on
any subsequent holder, assignee or transferee of the corresponding
Restructured Term Loan Commitments or Loans.
(v) Company hereby designates Administrative Agent to serve
as Company's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and Company hereby agrees that, to
the extent Administrative Agent serves in such capacity, Administrative
Agent and its officers, directors, employees, agents and affiliates
shall constitute Indemnitees for all purposes under subsection 10.3.
E. Notes. Company shall execute and deliver to each applicable
Lender (or to Administrative Agent for that Lender) (i) on the Closing
Date, a Restructured Term Note substantially in the form of Exhibit
III-A annexed hereto to evidence that Lender's Restructured Term Loans,
in the principal amount of that Lender's Restructured Term Loan and
with other appropriate insertions and (ii) on the date of the making of
each Supplemental Term Loan, a Supplemental Term Note substantially in
the form of Exhibit III-B annexed hereto to evidence that Lender's
Supplemental Term Loan, in the principal amount of that Lender's
Supplemental Term Loan and with other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. Rate of Interest. Subject to the provisions of subsections
2.6 and 2.7, each Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the
Base Rate or the Adjusted Eurodollar Rate; provided that Supplemental
Term Loans may bear a fixed rate of interest as permitted by subsection
2.1A(ii)(a) and the provisions of this subsection 2.2 shall not be
applicable to the extent they relate to Loans bearing floating rates of
interest. The applicable basis for determining the rate of interest
with respect to any Loan shall be selected by Company initially at the
time a Notice of Borrowing is given with respect to such Loan pursuant
to subsection 2.1B, and the basis for determining the interest rate
with respect to any Loan may be changed from time to time pursuant to
and in accordance with subsection 2.2D. If on any day
41
a Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of
interest, then for that day that Loan shall bear interest determined by
reference to the Base Rate.
(i) Restructured Term Loans. Subject to the
provisions of subsections 2.2E and 2.7, Restructured Term Loans shall
bear interest through maturity based on the Applicable Leverage Ratio
as follows:
(a) if a Base Rate Loan, then at the sum of
the Base Rate then in effect plus the Applicable Base
Rate Margin per annum then in effect; or
(b) if a Eurodollar Rate Loan, then at the
sum of the Adjusted Eurodollar Rate then in effect
plus the Applicable Eurodollar Rate Margin per annum
then in effect.
"APPLICABLE BASE RATE MARGIN" and "APPLICABLE EURODOLLAR RATE
MARGIN" means for each Base Rate Loan or Eurodollar Rate Loan,
respectively, the percentage per annum set forth below for that type of
Loan based upon the Applicable Leverage Ratio for the applicable
period:
APPLICABLE
EURODOLLAR RATE APPLICABLE BASE
APPLICABLE LEVERAGE RATIO MARGIN RATE MARGIN
(A) Greater than or equal to 6.50:1.00 4.50% 3.50%
(B) Greater than or equal to 6.00:1.00 but less than 6.50:1.00 4.375% 3.375%
(C) Greater than or equal to 5.50:1.00 but less than 6.00:1.00 4.25% 3.25%
(D) Greater than or equal to 5.00:1.00 but less than 5.50:1.00 4.125% 3.125%
(E) Greater than or equal to 4.50:1.00 but less than 5.00:1.00 4.00% 3.00%
(F) Greater than or equal to 4.00:1.00 but less than 4.50:1.00 3.875% 2.875%
(G) Greater than or equal to 3.50:1.00 but less than 4.00:1.00 3.625% 2.625%
(H) Less than 3.50:1.00 3.50% 2.50%
(ii) Supplemental Term Loans. Subject to the
provisions of subsections 2.2E and 2.7, Supplemental Term Loans shall
bear interest determined at the date of incurrence as agreed among
Company, the Lenders making Supplemental Term Loans and Administrative
Agent and as permitted by subsection 2.1A(ii)(a) and this subsection
2.2A(ii) shall be deemed amended on each date Supplemental Term Loans
are made to set forth herein the interest rates borne by such Loans.
42
B. Interest Periods. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three, six or, if available to all
Lenders, twelve month period; provided that:
(i) the initial Interest Period for any such Loan shall
commence on the Funding Date of such Loan, in the case of a Loan initially made
as a Eurodollar Rate Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate
Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would otherwise
expire on a day that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (v) of this subsection 2.2B, end on the last Business
Day of a calendar month;
(v) no Interest Period shall extend beyond the scheduled
maturity date of the applicable Loans;
(vi) there shall be no more than 10 Interest Periods
outstanding at any time; and
(vii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan, in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Loans equal to $1,000,000 and integral multiples of
$1,000,000 in excess of that amount from Base Rate Loans to Eurodollar Rate
Loans; or (ii) upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$1,000,000 and
43
integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate
Loan; or (iii) subject to the payment of all amounts due under subsection 2.6D,
to convert a Eurodollar Rate Loan into a Base Rate Loan at any time.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 11:00 A.M. (New York time) on the proposed
conversion date (in the case of a conversion to a Base Rate Loan) or at least
three Business Days in advance of the proposed conversion/continuation date (in
the case of a conversion to, or a continuation of, a Eurodollar Rate Loan). A
Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and type of the Loan to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan, the requested Interest Period, and (v) in the case
of a conversion to, or a continuation of, a Eurodollar Rate Loan, that no
Potential Event of Default or Event of Default has occurred and is continuing.
In lieu of delivering the above-described Notice of Conversion/Continuation,
Company may give Administrative Agent telephonic notice by the required time of
any proposed conversion or continuation under this subsection 2.2D; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Conversion/Continuation to Administrative Agent on or before the proposed
conversion or continuation date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of,
a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. Default Rate. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable Insolvency Laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to Base Rate Loans.
Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be
computed (i) in the case of Base Rate Loans, on the basis of a 365-day or
366-day year, as the case may be, and (ii)
44
in the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each
case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, (i) the date of the making of such
Loan or the first day of an Interest Period applicable to such Loan or, with
respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the
date of conversion of such Eurodollar Rate Loan to such Base Rate Loan shall be
included, and (ii) the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.
2.3 FEES.
A. Debt Extension Fee. Company agrees to pay to Administrative
Agent on the Closing Date for distribution to each Lender having a Restructured
Term Loan Commitment (other than the Sponsors, any Affiliate of any Sponsor and
any Affiliate of Company) in accordance with subsection 2.3D a debt extension
fee equal to 1.50% of the aggregate amount of the Restructured Term Loans made
on the Closing Date by such Lenders.
B. Post-Default Advances Sublimit Extension Fee. Company
agrees to pay to Administrative Agent on the Closing Date for distribution to
each Lender having a Restructured Term Loan Commitment (other than the Sponsors,
any Affiliate of any Sponsor and any Affiliate of Company) in accordance with
subsection 2.3D a Post-Default Advances Sublimit extension fee equal to 2.50% of
the aggregate amount of loans made under the Post-Default Advances Sublimit and
refinanced with the Restructured Term Loans made on the Closing Date by such
Lenders.
C. Credit Approval Fee. Company agrees to pay to
Administrative Agent on the Closing Date for distribution to each Lender having
a Restructured Term Loan Commitment (other than the Sponsors, any Affiliate of
any Sponsor and any Affiliate of Company) in accordance with subsection 2.3D a
credit approval fee in an aggregate amount equal to $18,612.37.
D. Allocation of Fees. The aggregate amount of fees payable by
Company pursuant to subsections 2.3A, 2.3B and 2.3C shall be allocated among,
and distributed by Administrative Agent to, the Lenders having a Restructured
Term Loan Commitment (other than the Sponsors, any Affiliate of any Sponsor and
any Affiliate of Company) in the amounts set forth on Schedule 2.3D.
E. Supplemental Term Loan Fee. Company agrees to pay to
Administrative Agent on each date of the making of Supplemental Term Loans for
distribution to each Lender making a Supplemental Term Loan on such date in
accordance with its Pro Rata Share a fee in an amount agreed upon by Company and
the Lenders making Supplemental Term Loans on such date.
45
F. Administrative Agent's Fees. Company agrees to pay to
Administrative Agent such other fees in the amounts and at the times separately
agreed upon between Company and Administrative Agent.
2.4 SCHEDULED PAYMENTS OF LOANS; PREPAYMENTS OF LOANS; GENERAL
PROVISIONS REGARDING PAYMENTS.
A. Scheduled Payments.
(i) Restructured Term Loans. Company shall make principal
payments on the Restructured Term Loans in installments on the dates and in the
amounts set forth below:
DATE SCHEDULED REPAYMENT OF RESTRUCTURED TERM LOANS
---- ----------------------------------------------
May 31, 2002 $1,250,000.00
August 31, 2002 1,250,000.00
November 30, 2002 1,250,000.00
February 28, 2003 1,250,000.00
May 31, 2003 3,750,000.00
August 31, 2003 3,750,000.00
November 30, 2003 3,750,000.00
February 29, 2004 3,750,000.00
May 31, 2004 5,000,000.00
August 31, 2004 5,000,000.00
November 30, 2004 5,000,000.00
February 28, 2005 5,000,000.00
May 31, 2005 5,000,000.00
August 31, 2005 5,000,000.00
November 30, 2005 5,000,000.00
February 28, 2006 5,000,000.00
May 31, 2006 6,250,000.00
August 31, 2006 6,250,000.00
November 30, 2006 6,250,000.00
February 28, 2007 6,250,000.00
May 31, 2007 7,500,000.00
August 31, 2007 7,500,000.00
November 30, 2007 7,500,000.00
February 29, 2008 322,432,498.68
Total $429,932,498.68
46
provided that the scheduled installments of principal of the Restructured Term
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Restructured Term Loans in accordance with
subsection 2.4B(iii); and provided, further, that the Restructured Term Loans
and all other amounts owed hereunder with respect to the Restructured Term Loans
shall be paid in full no later than February 29, 2008 and the final installment
payable by Company in respect of the Restructured Term Loans on such date shall
be in an amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Company under this Agreement with
respect to the Restructured Term Loans.
(ii) Supplemental Term Loans. If any Supplemental Term Loans
are made, Company shall make principal payments on the Supplemental Term Loans
in installments on the dates and in the amounts agreed between Company and the
Lenders making such Supplemental Term Loans at the time such Loans are made, and
this subsection 2.4A(ii) shall be deemed amended on each date Supplemental Term
Loans are made to set forth herein such dates and such amounts.
B. Prepayments.
(i) Voluntary Prepayments. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base Rate
Loans, and three Business Days' prior written or telephonic notice, in the case
of Eurodollar Rate Loans, in each case given to Administrative Agent by 11:00
A.M. (New York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to time prepay any Loans
on any Business Day without premium or penalty in whole or in part in an
aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount; provided, however, that a Eurodollar Rate Loan may only
be prepaid on the expiration of the Interest Period applicable thereto unless
Company complies with subsection 2.6D with respect to any breakage costs
resulting from such prepayment being made on a date prior to the expiration of
the applicable Interest Period. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in subsection 2.4B(iii).
(ii) Mandatory Prepayments. Subject to subsection 2.4B(iii)(e)
regarding the prepayment of the Loans and the Priority Secured Loans upon the
occurrence and during the continuation of a Specified Priority Secured Loan
Default, the Loans shall be prepaid in the amounts and under the circumstances
set forth below, all such prepayments and/or reductions to be applied as set
forth below or as more specifically provided in subsection 2.4B(iii):
47
(a) Prepayments from Net Asset Sale Proceeds.
(1) Minor Asset Sale Proceeds. No later than the third
Business Day following the date of receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any Minor
Asset Sale (other than Deemed Major Asset Sale Proceeds), (A) Company
shall prepay the Loans in an amount equal to 75% of such Net Asset Sale
Proceeds (the "MINOR ASSET SALE PREPAYMENT AMOUNT") and (B) to the
extent the Minor Asset Sale Prepayment Amount exceeds the aggregate
outstanding principal amount of the Loans, Company shall prepay the
Priority Secured Loans, and/or the Priority Secured Revolving Loan
Commitments shall be permanently reduced, in an amount equal to such
excess in accordance with the Priority Secured Credit Agreement;
provided, however, that so long as no Event of Default or Potential
Event of Default has occurred and is continuing at the time of such
sale, Company may retain the first $10,000,000 of Net Asset Sale
Proceeds in respect of Minor Asset Sales in each Fiscal Year (in
addition to the 25% of such proceeds not required to be applied to
prepay the Loans) and any unused amount of such $10,000,000 retention
amount for any Fiscal Year shall be added to the retention amount
provided in this subsection for the next succeeding Fiscal Year.
(2) Major Asset Sale Proceeds. No later than the third
Business Day following the date of receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any Major
Asset Sale or Deemed Major Asset Sale Proceeds, (A) Company shall
prepay the Loans in an amount equal to 100% of such Net Asset Sale
Proceeds or Deemed Major Asset Sale Proceeds (the "MAJOR ASSET SALE
PREPAYMENT AMOUNT") and (B) to the extent the Major Asset Sale
Prepayment Amount exceeds the aggregate outstanding principal amount of
the Loans, Company shall prepay the Priority Secured Loans, and/or the
Priority Secured Revolving Loan Commitments shall be permanently
reduced, in an amount equal to such excess in accordance with the
Priority Secured Credit Agreement.
(3) Notwithstanding anything to the contrary contained in
subsections 2.4B(ii)(a)(1) and (2), Company shall not be required to
use Net Asset Sale Proceeds from Asset Sales of assets listed on
Schedule 1.1C to prepay the Loans to the extent such Net Asset Sale
Proceeds (A) do not exceed the West 34th Street Loan Amount and (B) are
applied in accordance with subsection 7.7(iv).
(b) Prepayments from Net Insurance/Condemnation Proceeds. No
later than the third Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds in excess of $500,000 (determined with respect
to each occurrence or event giving rise to such Net Insurance/Condemnation
Proceeds), (A) Company shall prepay the Loans in an amount equal to 100% of such
Net Insurance/Condemnation Proceeds (the "INSURANCE/CONDEMNATION PREPAYMENT
AMOUNT") and (B) to the extent the Insurance/Condemnation Prepayment Amount
exceeds the aggregate outstanding
48
principal amount of the Loans, Company shall prepay the Priority Secured Loans,
and/or the Priority Secured Revolving Loan Commitments shall be permanently
reduced, in an amount equal to such excess in accordance with the Priority
Secured Credit Agreement; provided, however, that so long as no Event of Default
or Potential Event of Default has occurred and is continuing, no such prepayment
shall be required to the extent Company determines to utilize such Net
Insurance/Condemnation Proceeds to repair, restore or replace the assets in
respect of which such Net Insurance/Condemnation Proceeds were received and
Company so utilizes or contractually commits to utilize such Net
Insurance/Condemnation Proceeds within 360 days of the receipt thereof; provided
further, however, that, unless otherwise required by the terms of the lease for
a Leasehold Property with respect to which such Net Insurance/Condemnation
Proceeds were received, pending such utilization, such proceeds shall be applied
to repay US Tranche Revolving Loans and CN Tranche Revolving Loans (each as
defined in the Priority Secured Credit Agreement) under the Priority Secured
Credit Agreement (but not reduce the Priority Secured Revolving Loan
Commitments) and, after payment in full thereof, deposited into the Collateral
Account.
(c) Prepayments Due to Issuance of Debt. No later than the
third Business Day following the date of receipt by Company or any of its
Subsidiaries of any Net Debt Securities Proceeds, (A) Company shall prepay the
Loans in an amount equal to 100% of such Net Debt Securities Proceeds (the "DEBT
SECURITIES PREPAYMENT AMOUNT") and (B) to the extent the Debt Securities
Prepayment Amount exceeds the aggregate outstanding principal amount of the
Loans, Company shall prepay the Priority Secured Loans, and/or the Priority
Secured Revolving Loan Commitments shall be permanently reduced, in an amount
equal to such excess in accordance with the Priority Secured Credit Agreement.
(d) Prepayments Due to Issuance of Equity Securities.
(1) Proceeds of Public Equity Offerings. No later
than the third Business Day following the date of receipt by
Company or any of its Subsidiaries of Net Equity Securities
Proceeds from a Public Equity Offering, (A) Company shall
prepay the Loans in an amount equal to 75% of such Net Equity
Securities Proceeds (the "PUBLIC EQUITY PREPAYMENT AMOUNT")
and (B) to the extent the Public Equity Prepayment Amount
exceeds the aggregate outstanding principal amount of the
Loans, Company shall prepay the Priority Secured Loans, and/or
the Priority Secured Revolving Loan Commitments shall be
permanently reduced, in an amount equal to such excess in
accordance with the Priority Secured Credit Agreement;
provided, however, that so long as no Event of Default or
Potential Event of Default has occurred and is continuing at
the time Company or any of its Subsidiaries receives such Net
Equity Securities Proceeds (y) if the Applicable Leverage
Ratio is less than 3.50:1.00 but greater than or equal to
3.00:1.00 at the time of such issuance (after giving pro forma
effect to the application of such Net Equity Securities
Proceeds), the Public Equity Prepayment Amount shall be 50% of
such Net Equity Securities Proceeds, and (z) if the Applicable
Leverage Ratio is less than 3.00:1.00 at the time of such
49
issuance (after giving such pro forma effect), no portion of
such Net Equity Securities Proceeds shall be required to be so
applied.
(2) Proceeds of Private Non-Sponsor Equity Offerings. No later
than the third Business Day following the date of receipt by
Company or any of its Subsidiaries of Net Equity Securities
Proceeds from a Private Non-Sponsor Equity Offering,
(A) if, on the date of receipt of such Net Equity
Securities Proceeds, Sponsors own or manage 51% or more
of the common equity of Company, (x) Company shall be
entitled to retain the first $25,000,000 of such Net
Equity Securities Proceeds and (y) (i) Company shall
prepay the Loans in an amount equal to 75% of the
cumulative amount of such Net Equity Securities Proceeds
in excess of $25,000,000 (the "PRIVATE EQUITY PREPAYMENT
AMOUNT") and (ii) to the extent the Private Equity
Prepayment Amount exceeds the aggregate outstanding
principal amount of the Loans, Company shall prepay the
Priority Secured Loans, and/or the Priority Secured
Revolving Loan Commitments shall be permanently reduced,
in an amount equal to such excess in accordance with the
Priority Secured Credit Agreement; provided, however, so
long as no Event of Default or Potential Event of
Default has occurred and is continuing at the time
Company or any of its Subsidiaries receives such Net
Equity Securities Proceeds, (a) if the Applicable
Leverage Ratio is less than 3.50:1.00 but greater than
or equal to 3.00:1.00 at the time of such issuance
(after giving pro forma effect to the application of
such Net Equity Securities Proceeds), the Private Equity
Prepayment Amount shall be 50% of the cumulative amount
of such Net Equity Securities Proceeds in excess of
$25,000,000, and (b) if the Applicable Leverage Ratio is
less than 3.00:1.00 at the time of such issuance (after
giving such pro forma effect), no portion of such Net
Equity Securities Proceeds shall be required to be so
applied; and
(B) if, on the date of receipt of such Net Equity
Securities Proceeds, Sponsors own or manage less than
51% of the common equity of Company, (x) Company shall
prepay the Loans in an amount equal to 75% of such Net
Equity Securities Proceeds (the "ALTERNATIVE PRIVATE
EQUITY PREPAYMENT AMOUNT") and (y) to the extent the
Alternative Private Equity Prepayment Amount exceeds the
aggregate outstanding principal amount of the Loans,
Company shall prepay the Priority Secured Loans, and/or
the Priority Secured Revolving Loan Commitments shall be
permanently reduced, in an amount equal to such excess
in accordance with the Priority Secured Credit
Agreement; provided, however, so long as no Event of
Default or Potential Event of Default has occurred and
is continuing at the time Company or any of its
Subsidiaries receives such Net Equity Securities
Proceeds, (a) if the Applicable Leverage Ratio is less
than 3.50:1.00 but greater than or equal to 3.00:1.00 at
the time of such issuance (after giving pro forma effect
to
50
the application of such Net Equity Securities Proceeds), the
Alternative Private Equity Prepayment Amount shall be 50% of
such Net Equity Securities Proceeds, and (b) if the Applicable
Leverage Ratio is less than 3.00:1.00 at the time of such
issuance (after giving such pro forma effect), no portion of
such Net Equity Securities Proceeds shall be required to be so
applied.
(e) Prepayments from Excess Cash Flow. If there shall be
Excess Cash Flow of Company and its Subsidiaries for any Fiscal Year (commencing
with the Fiscal Year ending February 28, 2003), no later than 90 days after the
end of such Fiscal Year, (A) Company shall prepay the Loans in an amount equal
to the sum of (x) 100% of the first $25,000,000 of Excess Cash Flow of that
Fiscal Year plus (y) 75% of such Excess Cash Flow in excess of $25,000,000 (such
sum, the "EXCESS CASH FLOW PREPAYMENT AMOUNT") and (B) to the extent the Excess
Cash Flow Prepayment Amount exceeds the aggregate outstanding principal amount
of the Loans, Company shall prepay the Priority Secured Loans, and/or the
Priority Secured Revolving Loan Commitments shall be permanently reduced, in an
amount equal to such excess in accordance with the Priority Secured Credit
Agreement; provided that such mandatory prepayment and/or reduction in the
Priority Secured Revolving Loan Commitment for the Fiscal Year ending February
28, 2003, if any, shall be apportioned to relate solely to the period from the
Closing Date until February 28, 2003; and provided further that so long as no
Event of Default or Potential Event of Default has occurred and is continuing,
Company may retain all Excess Cash Flow with respect to any Fiscal Year if (1)
the Leverage Ratio at the last day of such Fiscal Year is 3.50:1.00 or less and
(2) the Leverage Ratio at the last day of the immediately preceding Fiscal Year
was 3.50:1.00 or less.
(f) Prepayments from Permitted Cure Securities. If Company
issues Permitted Cure Securities and the proceeds thereof are required to be
applied to reduce Wholly Owned Total Debt pursuant to subsection 7.6C, on the
date of receipt of such proceeds, Company shall use 100% of the proceeds of such
Permitted Cure Securities first to prepay the Priority Secured Term Loans in
accordance with the Priority Secured Credit Agreement to the full extent
thereof, second, to the extent of any remaining proceeds, to prepay the Priority
Secured Revolving Loans to the full extent thereof (but not reduce the Priority
Secured Revolving Loan Commitments) in accordance with the Priority Secured
Credit Agreement and third, to the extent of any remaining proceeds, to prepay
the Loans.
(g) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations. Concurrently with
any prepayment of the Loans pursuant to subsections 2.4B(ii)(a)-(f), Company
shall deliver to Administrative Agent an Officer's Certificate demonstrating the
calculation of (1) the amount (the "NET PROCEEDS AMOUNT") of the applicable Net
Asset Sale Proceeds, the applicable Net Insurance/Condemnation Proceeds, the
applicable Net Equity Securities Proceeds, the applicable Net Debt Securities
Proceeds, the applicable Excess Cash Flow or the required reduction of Wholly
Owned Total Debt that gave rise to such prepayment and/or reduction, (2) in the
case of a prepayment under subsection 2.4B(ii)(a), the amount of Net Asset Sale
Proceeds in respect of any Minor Asset Sale, the amount of Net Asset
51
Sale Proceeds in respect of any Major Asset Sale, and the amount of any Deemed
Major Asset Sale Proceeds, and (3) in the case of a prepayment under subsection
2.4B(ii)(d), the amount of Net Equity Securities Proceeds from a Public Equity
Offering and the amount of Net Equity Securities Proceeds from a Private
Non-Sponsor Equity Offering. If Company shall subsequently determine that the
actual Net Proceeds Amount was greater than the amount set forth in such
Officer's Certificate, Company shall promptly make an additional prepayment of
the Loans in an amount equal to the amount of such excess, and Company shall
concurrently therewith deliver to Administrative Agent an Officer's Certificate
demonstrating the derivation of the additional Net Proceeds Amount resulting in
such excess.
(iii) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loan. Any
voluntary prepayments pursuant to subsection 2.4B(i) shall be applied ratably
between the Restructured Term Loans and the Supplemental Term Loans in
accordance with the respective amounts thereof.
(b) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of the Loans shall be applied first to
Base Rate Loans to the full extent thereof before application to Eurodollar Rate
Loans, in a manner that minimizes the amount of any payments required to be made
by Company pursuant to subsection 2.6D.
(c) Application of Mandatory Prepayments by Type of Loan.
Subject to subsection 2.4B(iii)(e), any amount required to be applied as a
mandatory prepayment of the Loans pursuant to subsections 2.4B(ii)(a)-(f) shall
be applied ratably between Restructured Term Loans and Supplemental Term Loans
in accordance with the respective amounts thereof.
(d) Application of Prepayments by Maturity of Installment of
Loans. Any voluntary prepayments pursuant to subsection 2.4B(i) and any amount
required to be applied to a mandatory prepayment of the Loans pursuant to
subsections 2.4B(ii)(a)-(f) shall be applied to each unpaid installment of the
applicable Loan set forth or deemed set forth in subsection 2.4A(i) or 2.4A(ii)
on a pro rata basis in accordance with the respective amounts thereof as of the
date of such prepayment.
(e) Application of Mandatory Prepayment upon Specified
Priority Secured Loan Default. Notwithstanding anything to the contrary
contained herein, upon the occurrence and during the continuation of a Specified
Priority Secured Loan Default, any amount Company is required to apply first as
a mandatory prepayment of the Loans under any of subsections 2.4B(ii)(a)-(e)
shall instead be applied first to prepay the Priority Secured Loans (without a
permanent reduction of the Priority Secured Revolving Loan Commitments) in
accordance with the Priority Secured Credit Agreement, and second to the extent
such amount exceeds the aggregate outstanding principal amount of the Priority
Secured Loans to prepay the Loans.
52
(f) Waiver of Certain Mandatory Prepayments. Notwithstanding
anything contained herein to the contrary, so long as any Restructured Term
Loans are outstanding, if Company is required to make any mandatory prepayment
or elects to grant an option with respect to any voluntary prepayment (a
"WAIVABLE PREPAYMENT") of the Supplemental Term Loans pursuant to subsection
2.4B(i) or (ii), then (1) not less than three Business Days prior to the date
(the "REQUIRED PREPAYMENT DATE") on which Company is required to make such
Waivable Prepayment, Company shall notify Administrative Agent of the amount of
such Waivable Prepayment, and Administrative Agent will promptly thereafter
notify each Lender holding an outstanding Supplemental Term Loan of the amount
of such Lender's Pro Rata Share of such Waivable Prepayment and such Lender's
option to refuse such amount, (2) each such Lender may exercise such option by
giving written notice to Company and Administrative Agent of its election to do
so on or before the first Business Day (the "CUTOFF DATE") prior to the Required
Prepayment Date (it being understood that any Lender that does not notify
Company and Administrative Agent of its election to exercise such option on or
before the Cutoff Date shall be deemed to have elected, as of the Cutoff Date,
not to exercise such option), and (3) on the Required Prepayment Date, Company
shall pay to Administrative Agent the amount of the Waivable Prepayment, which
amount shall be applied (x) in an amount equal to that portion of the Waivable
Prepayment payable to those Lenders that have elected not to exercise such
option, to prepay the Supplemental Term Loans of such Lenders (which prepayment
shall be applied to the scheduled installments of principal of the Supplemental
Term Loans in accordance with subsection 2.4B(iii)(d)) and (y) in an amount
equal to that portion of the Waivable Prepayment otherwise payable to those
Lenders that have elected to exercise such option, first to prepay the
Restructured Term Loans (which prepayment shall be applied to the scheduled
installments of principal of the Restructured Term Loans in accordance with
subsection 2.4B(iii)(d)), second, to the extent such portion of the Waivable
Prepayment exceeds the aggregate outstanding principal amount of the
Restructured Term Loans, to prepay the Supplemental Term Loans held by those
Lenders that have elected not to exercise such option (which prepayment shall be
applied to the scheduled installments of principal of the Supplemental Term
Loans in accordance with subsection 2.4B(iii)(d)), third, to the extent such
portion of the Waivable Prepayment exceeds the aggregate outstanding principal
amount of the Supplemental Term Loans held by those Lenders that have elected
not to exercise such option and the Restructured Term Loans, to prepay Priority
Secured Term Loans in accordance with the Priority Secured Credit Agreement,
fourth, to the extent such portion of the Waivable Prepayment exceeds the
aggregate outstanding principal amount of the Priority Secured Term Loans, the
Supplemental Term Loans held by those Lenders that have elected not to exercise
such option and the Restructured Term Loans, to prepay the Supplemental Term
Loans held by those Lenders that have elected not to exercise such option, and
fifth, to the extent such portion of the Waivable Prepayment exceeds the
aggregate outstanding principal amount of the Priority Secured Term Loans, the
Supplemental Term Loans and the Restructured Term Loans, to prepay the Priority
Secured Revolving Loans and to permanently reduce the Priority Secured Revolving
Loan Commitments in accordance with the Priority Secured Credit Agreement.
53
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in U.S. Dollars in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 Noon (New York time) on the date due
at the Funding and Payment Office for the account of Lenders. Funds received by
Administrative Agent after that time on such due date shall be deemed to have
been paid by Company on the next succeeding Business Day. In order to effect
timely payment of any interest, fees, commissions or other amounts due
hereunder, Company hereby authorizes Administrative Agent to charge its accounts
with Administrative Agent to make Loans for its own account.
(ii) Application of Payments to Principal and Interest. Except
as provided in subsection 2.2C, all payments in respect of the principal amount
of any Loan shall include payment of accrued interest on the principal amount
being repaid or prepaid, and all such payments (and, in any event, any payments
in respect of any Loan on a date when interest is due and payable with respect
to such Loan) shall be applied to the payment of interest before application to
principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to which such
payments relate, in each case proportionately to Lenders' respective Pro Rata
Shares of such Loans; provided that payments of interest in respect of Loans
which are Base Rate Loans shall be apportioned ratably among Lenders in
proportion to the average daily amount of such Base Rate Loans of each Lender
outstanding during the period in which such interest shall have accrued.
Administrative Agent shall promptly distribute to each Lender, at its primary
address set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent in respect of Loans. Notwithstanding
the foregoing provisions of this subsection 2.4C(iii), if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate
Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative
Agent shall give effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by granting
participations therein), Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments previously made thereon and of
the date to which interest thereon has been paid; provided that the failure to
make (or any error in the making of) a notation of any Loan made under such Note
54
shall not limit or otherwise affect the obligations of Company hereunder or
under such Note with respect to any Loan or any payments of principal or
interest on such Note.
D. Application of Proceeds of Collateral and Payments Under
Subsidiary Guaranty.
(i) Application of Proceeds of Collateral. Except as
provided in subsection 2.4B(ii)(a) with respect to prepayments from Net Asset
Sale Proceeds, all proceeds received by Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
under any Collateral Document upon the occurrence and during the continuation of
an Event of Default or Potential Event of Default, may, in the discretion of
Collateral Agent, be held by Collateral Agent as Collateral for, and/or (then or
at any time thereafter) applied in full or in part by Collateral Agent against,
the applicable Secured Obligations (as defined in such Collateral Document) in
accordance with the terms of the Intercreditor Agreement.
(ii) Application of Payments Under Subsidiary Guaranty.
All payments received by Collateral Agent under the Subsidiary Guaranty shall be
applied promptly from time to time by Collateral Agent in accordance with the
terms of the Intercreditor Agreement.
2.5 USE OF PROCEEDS.
A. Restructured Term Loans. The proceeds of the Restructured
Term Loans shall be deemed to have been used to repay unpaid revolving loans,
unpaid interest thereon and unpaid letter of credit fees under the Pre-Petition
Credit Agreement held by the Lenders having Restructured Term Loan Commitments
and the loans made pursuant to the Post-Default Advances Sublimit under the DIP
Credit Agreement held by the Lenders having Restructured Term Loan Commitments.
B. Supplemental Term Loans. The proceeds of the Supplemental
Term Loans shall be used solely to refinance Acquired Indebtedness in Permitted
Supplemental Term Loan Acquisitions.
C. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
55
A. Determination of Applicable Interest Rate. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate Determination
Date, Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate is
then being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. If
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and such Lenders that the circumstances
giving rise to such notice no longer exist and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In
the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank Eurodollar market
or the position of such Lender in that market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS"), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection
56
2.6D, to rescind such Notice of Borrowing or Notice of Conversion/Continuation
as to all Lenders by giving notice (by telefacsimile or by telephone confirmed
in writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender). Except as provided in the immediately preceding sentence, nothing in
this subsection 2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar
Rate Loans in accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including, without
limitation, any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence
of and during the continuation of a Potential Event of Default or an Event of
Default, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by
57
Company with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B, if any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
Governmental Authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other Governmental
Authority or quasi-governmental authority (whether or not having the force of
law):
(i) subjects such Lender (or its applicable lending office) to
any Covered Tax with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental, special or
other 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, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 2.7A to the extent that any such increased cost or
reduction in amounts was incurred more than twenty-four months prior to the time
it gives notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such
twenty-four month period so long as such Lender has given such notice to Company
no later than twenty-four months from the time circumstance became applicable to
such Lender. Such Lender
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shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Term Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Covered Tax imposed, levied, collected, withheld
or assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction from
or to which a payment is made by or on behalf of Company or by any federation or
organization of which the United States of America or any such jurisdiction is a
member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person
is required by law to make any deduction or withholding on account of any
Covered Tax from any sum paid or payable by Company to Administrative Agent or
any Lender under any of the Term Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Covered Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or
such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction or withholding with respect to such Covered Tax is
required shall be increased to the extent necessary to ensure that,
after the making of that deduction or withholding, Administrative Agent
or such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction or
withholding been required or made; and
(d) within 30 days after the due date of payment of any such
Covered Tax which it is required by clause (b) above to pay, Company
shall deliver to Administrative Agent evidence reasonably satisfactory
to the Administrative Agent of such deduction, withholding or payment
and of the remittance of such Covered Tax to the relevant taxing or
other authority;
provided that Company will not be required to pay any additional amount
to Administrative Agent or any Lender under clause (c) above with
respect to the deduction, withholding or payment of any Covered Tax or
under clause (i) of subsection 2.7A in respect of any Covered Tax
unless, after the date hereof (in the case of each Lender listed
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on Schedule 2.1) or after the date of the Assignment Agreement pursuant
to which such Lender became a Lender (in the case of each other Lender)
there has been a Change in Law which shall result in a required
increase in the rate of such deduction, withholding or payment with
respect to such Covered Tax from that in effect at the date of this
Agreement or at the date of such Assignment Agreement, as the case may
be, in respect of payments to such Lender or its applicable lending
office on such date.
(iii) Evidence of Exemption from Withholding Taxes.
(a) Each Lender that is not a United States Person within the
meaning of Section 7701(a)(30) of the Internal Revenue Code (for
purposes of this subsection 2.7B(iii), a "NON-US LENDER") shall deliver
to Administrative Agent and Company, on or prior to the Closing Date
(in the case of each Lender listed on the signature pages hereof) or on
or prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (X) two original copies of Internal Revenue Service Form
W-8BEN or W-8ECI (or any successor forms), properly completed and duly
executed by such Lender, together with any other form, certificate or
statement of exemption required under the Internal Revenue Code or the
regulations issued thereunder, in each case establishing that such
Lender is not subject to any deduction or withholding of United States
federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the
Term Loan Documents or (Y) if such Lender is not a "bank" or other
Person described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form W-8BEN or W-8ECI
pursuant to clause (X) above, a Certificate re Non-Bank Status together
with two original copies of the appropriate Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly executed
by such Lender, together with any other form, certificate or statement
of exemption required under the Internal Revenue Code or the
regulations issued thereunder, in each case establishing that such
Lender is not subject to any deduction or withholding of United States
federal income tax with respect to any payments to such Lender of
interest payable under any of the Term Loan Documents; provided,
however, that if a Non-U.S. Lender is an entity that is not a
corporation for U.S. federal income tax purposes, such Non-U.S. Lender
agrees, for purposes of clause (X) or (Y) of this subsection
2.7B(iii)(a), to take any actions necessary, and to deliver all
additional (or alternative) Internal Revenue Service forms necessary to
establish in accordance with the Internal Revenue Code and the Treasury
Regulations promulgated thereunder that such Non-U.S. Lender is not
subject to any deduction or withholding of United States federal income
tax with respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Loan Documents
(including causing its partners, members, beneficiaries or owners, and
their beneficial owners, to take any actions and deliver any forms
necessary to establish such exemption).
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial
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delivery by such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any material
respect, that such Lender shall (1) promptly deliver to Administrative
Agent and Company, two new original copies of Internal Revenue Service
Form W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and two
original copies of the appropriate Internal Revenue Service Form W-8,
as the case may be, and any such other or additional Internal Revenue
Service forms required to be delivered pursuant to the proviso of
subsection 2.7B(iii)(a) properly completed and duly executed by such
Lender, together with any other form, certificate or statement of
exemption confirming or establishing that such Lender is not subject to
any deduction or withholding of United States federal income tax with
respect to payments to such Lender under the Term Loan Documents
(provided that in the case of a new form or certificate to be provided
under this section 2.7B(iii)(b)(1) due to a lapse in time, Company
shall have first notified the Lender and Administrative Agent in
writing at least 60 days prior to the expiration of such obsolete form
or certificate that such Lender will be required to comply with such
requirements) or (2) notify Administrative Agent and Company of its
inability to deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Lender in respect of any Covered Tax under clause (c) of
subsection 2.7B(ii) or clause (i) of subsection 2.7A or make any
payments pursuant to subsection 2.7C, (x) in the case of a Non-U.S.
Lender, if (1) such Lender shall have failed to satisfy the
requirements of clause (a) or (b) of this subsection 2.7B(iii) and such
Covered Tax would not have been required to be imposed, deducted or
withheld but for such failure or (2) to the extent such amount results
from any Lender being treated as a "conduit entity" within the meaning
of Treasury Regulation Section 1.881-3 or any successor provision
thereto or (y) in the case of any Lender, to the extent that such
Covered Tax would not have been required to be imposed, deducted or
withheld but for the failure of such Lender to comply with any
certification, information or other reporting requirement as to
nationality, residence or identity of such Lender which requirement
such Lender would otherwise be able to comply with on the date
requested by Company, provided that at least 60 days prior to the first
payment date with respect to which Company shall apply this clause (y),
Company shall have notified such Lender, in writing, that such Lender
will be required to comply with such certification, information or
other reporting requirement and provided further that such compliance
is expressly required by law, statute, treaty, ruling regulation or
administrative practice of jurisdiction imposing such Covered Tax as a
necessary precondition to reduction in the rate of, or exemption from,
such Covered Tax; provided that, if any Lender shall have satisfied the
requirements of subsection 2.7B(iii) on the Closing Date (in the case
of each Lender listed on the signature pages hereof) or on the date of
the Assignment Agreement pursuant to which it became a Lender or the
date of request by Company (in the case of each other Lender) and
thereafter the requirements of subsection 2.7B(iii)(b), nothing in this
subsection 2.7B(iii)(c) shall relieve Company of its obligation to pay
any additional amounts pursuant to clause (c) of subsection 2.7B(ii) in
the event that, as a result of any Change in Law occurring after the
date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender becomes a Lender (in the case of each other Lender), such
Lender is no longer
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properly entitled to deliver any forms, certificates, statements
or other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. Indemnification By Borrower. Subject to subsection
2.7B(iii)(c), Company shall indemnify Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full
amount of any Covered Taxes imposed with respect to this Agreement or
any obligations of such Lender or Administrative Agent hereunder or any
payments to such Lender (or its applicable lending office) or
Administrative Agent hereunder (including Covered Taxes imposed or
asserted on or attributable to amounts payable under this Section) that
are paid by Administrative Agent or such Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Covered Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to Company by a Lender, or by Administrative Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
D. Incorrectly Assessed Taxes. Upon the reasonable request of
Company, each Lender shall use reasonable efforts to cooperate with
Company with a view to obtain a refund of any indemnified Taxes or
other Taxes which were not correctly or legally imposed or asserted by
the relevant Governmental Authority and for which Company has
indemnified such Lender under this subsection 2.7 and, to the extent
any such refund is paid to or to the account of such Lender, such
Lender shall promptly refund such amount to Company.
E. Capital Adequacy Adjustment. If any Lender shall have
reasonably determined that the adoption, effectiveness, phase-in or
applicability after the date hereof of any law, rule or regulation (or
any provision thereof) regarding capital adequacy, or any change
therein or in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any
Lender (or its applicable lending office) with any guideline, request
or directive regarding capital adequacy (whether or not having the
force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling
such Lender as a consequence of, or with reference to, such Lender's
Loans or other obligations hereunder with respect to the Loans, in the
case of any Lender to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time,
within five Business Days after receipt by Company from such Lender of
the officer's certificate referred to in the next sentence, Company
shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such controlling corporation on an after-tax
basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) an officer's certificate, setting forth
in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
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2.8 OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the
officer of such Lender or Issuing Lender responsible for administering the Loans
of such Lender, becomes aware of the occurrence of an event or the existence of
a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive any payments under subsection 2.7, it will,
to the extent not inconsistent with the internal policies of such Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (i) to make,
issue, fund or maintain the affected Loans of such Lender through another
lending office of such Lender, or (ii) take such other measures as such Lender
may deem reasonable, if as a result thereof the circumstances that would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts that would otherwise be required to be paid to such Lender or Issuing
Lender pursuant to subsection 2.7 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Loans through such other lending office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Loans or the interests of such Lender; provided that such
Lender will not be obligated to utilize such other lending office pursuant to
this subsection 2.8 unless Company agrees to pay all incremental expenses
incurred by such Lender as a result of utilizing such other lending as described
in clause (i) above. An officer's certificate as to the amount of any such
expenses payable by Company pursuant to this subsection 2.8 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
If any such Lender does not make, issue, fund or maintain such
Loans through such other lending office or take such other measures, as the case
may be, then Company shall have the right, but not the obligation, upon notice
to such Lender and Administrative Agent, either to terminate such Lender's
Restructured Term Loan Commitment and prepay (without premium or penalty) the
then outstanding Loans, together with all unpaid interest and fees in respect
thereof, and all other Obligations owed to such Lender or to cause such Lender
to transfer and assign (without representation or warranty) the then outstanding
Loans and other Obligations owed to such Lender at a purchase price that is no
less than the aggregate amount of such Lender's Loans, together with all accrued
and unpaid interest and fees in respect thereof, plus all other Obligations,
owing to such Lender, to an Eligible Assignee, in accordance with the provisions
of subsection 10.1B(i) and (ii), that is able to make, issue, fund and maintain
such Loans through a lending office that will avoid the need for, or minimize
the amount of, additional amounts or other payments which would otherwise be
required to be paid by Company under subsection 2.7.
SECTION 3. [INTENTIONALLY OMITTED]
SECTION 4. CONDITIONS TO LOANS
The obligations of Lenders to make Loans are subject to the
satisfaction of the following conditions.
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4.1 CONDITIONS TO RESTRUCTURED TERM LOANS.
The obligations of Lenders to make the Restructured Term Loans
are, in addition to the conditions precedent specified in subsection 4.3,
subject to prior or concurrent satisfaction of the following conditions:
A. Loan Party Documents. On or before the Closing Date,
Company shall have delivered and shall have caused each other Loan Party to
deliver to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following with respect to Company or such Loan Party, as the case may be,
each, unless otherwise noted, dated the Closing Date:
(i) Certified copies of the constating documents of such
Person, together, except as set forth on Schedule 4.1A(i), with a good standing
certificate (or equivalent thereto) from its jurisdiction of organization and,
except where failure to be in good standing, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, each
other state or province in which it is qualified as a foreign organization to do
business and, except where failure to be in good standing, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each dated a recent date prior to the Closing Date;
(ii) Copies of the Bylaws or limited liability company
agreement of such Person, as applicable, certified as of the Closing Date by its
secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors or members of such
Person approving and authorizing the execution, delivery and performance of the
Term Loan Documents to which it is a party, certified as of the Closing Date by
its secretary or an assistant secretary as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing this Agreement and the other Term Loan Documents to which
it is a party;
(v) Executed originals of this Agreement, the Restructured
Term Notes (duly executed in accordance with subsection 2.1E, drawn to the order
of each applicable Lender and with appropriate insertions) and the other Term
Loan Documents to which such Person is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. Organizational and Capital Structure, Ownership,
Management, Etc.
(i) Capital Structure and Ownership. The capital and tax
structure and ownership of Company and its Subsidiaries, before and after giving
effect to the effectiveness of the Plan of Reorganization and the CCAA Plan of
Arrangement, shall be as set forth on Schedule 4.1B(i) annexed hereto. After
giving effect to the effectiveness of the Plan of Reorganization
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and the CCAA Plan of Arrangement, (a) the Sponsors shall beneficially own 100%
of the voting stock of the Company and (b) on the Closing Date Company shall
beneficially own 100% of the equity interests of Cineplex Odeon.
(ii) Management; Employment Contracts. The management
structure of Company after giving effect to the effectiveness of the Plan of
Reorganization shall be as set forth on Schedule 4.1B(ii) annexed hereto (except
to the extent that any members of senior management voluntarily decide not to
continue their employment with Company), and Administrative Agent shall have
received copies of, and shall be reasonably satisfied with the form and
substance of, any and all employment contracts with senior management of each of
Company and its Subsidiaries.
C. Necessary Consents. Company shall have obtained all
Governmental Authorizations and consents of other Persons, in each case that are
necessary or advisable in connection with the effectiveness of the Plan of
Reorganization or the CCAA Plan of Arrangement, as the case may be, the
transactions contemplated by the Term Loan Documents and the continued operation
of the business conducted by Company and its Subsidiaries in substantially the
same manner as conducted prior to the effectiveness of either of the Plan of
Reorganization and the CCAA Plan of Arrangement, and each of the foregoing shall
be in full force and effect. All applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the
effectiveness of the Plan of Reorganization or the CCAA Plan of Arrangement, as
the case may be, or the financing thereof, and no action, request for stay,
petition for review or rehearing, reconsideration or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable agency to
take action to set aside its consent on its own motion shall have expired.
Company shall have delivered an Officer's Certificate in form and substance
reasonably satisfactory to Administrative Agent confirming the foregoing matters
and any other evidence requested by Administrative Agent in support thereof.
D. Plan of Reorganization; Confirmation Order; Discharge of
Pre-Petition Credit Agreement, DIP Credit Agreement and Intercompany Debt.
(i) The Plan of Reorganization shall have been approved by
the creditors of Company and the Subsidiary Debtors and confirmed by the
Bankruptcy Court pursuant to the Confirmation Order. The Confirmation Order
shall (a) have been entered by the Bankruptcy Court and (b) grant Second
Priority Liens in the Collateral and the Closing Date Mortgaged Properties
securing the Obligations in favor of the Collateral Agent for the benefit of the
Lenders. There shall have been no determination that Company, the Subsidiary
Debtors or Sponsors did not solicit approvals of the Plan of Reorganization in
good faith pursuant to Section 1125(e) of the Bankruptcy Code. The Confirmation
Order shall be in full force and effect and shall not have been reversed,
modified, amended or stayed pending any appeal, and at least eleven days shall
have elapsed since the entry of the Confirmation Order.
(ii) The Plan of Reorganization and the CCAA Plan of
Arrangement shall have become simultaneously effective in accordance with their
respective terms no later than March 31, 2002 and shall have been substantially
consummated.
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(iii) (a) Indebtedness under the Pre-Petition Credit
Agreement shall be satisfied by application of the Restructured Term Loans
hereunder and the issuance of equity of Company to Sponsors, (b) all Existing
Letters of Credit issued thereunder shall be deemed issued under the Priority
Secured Credit Agreement, (c) commitments to lend and make other extensions of
credit thereunder shall be terminated, (d) Liens securing Indebtedness and the
other obligations thereunder shall be terminated and (e) all documents or
instruments necessary to release and evidence the release of all Liens
thereunder shall be delivered to Collateral Agent.
(iv) (a) Indebtedness under the Post-Default Advances
Sublimit under the DIP Credit Agreement shall be satisfied by application of
Restructured Term Loans hereunder and the issuance of equity to the Sponsors,
(b) all Existing Letters of Credit issued thereunder shall be deemed issued
under the Priority Secured Credit Agreement, (c) all other Indebtedness
thereunder shall have been repaid in full in cash, (d) commitments to lend and
make other extensions of credit thereunder shall be terminated and (e) all
documents or instruments necessary to release and evidence the release of all
Liens thereunder shall be delivered to Collateral Agent.
(v) All Indebtedness of Company to any of its Wholly Owned
Subsidiaries and all Indebtedness of each Wholly Owned Subsidiary of Company to
Company or any other Wholly Owned Subsidiary of Company shall have been
cancelled pursuant to the Plan of Reorganization, and such cancellation shall be
further evidenced by a payoff letter in form and substance satisfactory to
Administrative Agent.
E. CCAA Proceedings; Canadian CCAA Credit Agreement.
(i) The CCAA Plan of Arrangement shall (a) have been
approved by the creditors of Cineplex Odeon and sanctioned by the Canadian Court
and (b) consummated to the satisfaction of Administrative Agent. The aggregate
amount of Cash used to pay allowed claims of Persons that are not Affiliates of
Cineplex Odeon under the CCAA Plan of Arrangement shall not exceed $30,000,000.
(ii) Cineplex Odeon shall have (a) repaid in full all
Indebtedness outstanding under the Canadian CCAA Credit Agreement, (b)
terminated any commitments to lend or make other extensions of credit thereunder
and delivered to Administrative Agent all documents and instruments necessary or
advisable to evidence such termination, in form and substance satisfactory to
Administrative Agent, (c) released all Liens securing Indebtedness or other
obligations of Cineplex Odeon and its Subsidiaries thereunder and delivered to
Administrative Agent all documents and instruments necessary or advisable to
evidence such release, in form and substance satisfactory to Administrative
Agent, and (d) made arrangements satisfactory to Administrative Agent with
respect to the cancellation of any letters of credit outstanding thereunder or
the issuance of letters of credit under the Priority Secured Credit Agreement to
support the obligations of Company and its Subsidiaries with respect thereto.
F. Closing Date Leverage Ratio. Administrative Agent shall
have received an Officer's Certificate reasonably satisfactory to it setting
forth the Leverage Ratio as of the Closing Date, based on the preliminary
February 28, 2002 financial statements and after giving effect to the
effectiveness of the Plan of Reorganization and the CCAA Plan of Arrangement.
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G. Closing Date Mortgages; Closing Date Mortgage Policies;
Etc. Collateral Agent shall have received from Company and each applicable
Subsidiary Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "CLOSING DATE MORTGAGE" and, collectively, the "CLOSING DATE
MORTGAGES"), duly recorded in all appropriate places in all applicable
jurisdictions, encumbering each fee or leasehold Real Property Asset listed in
Schedule 4.1G annexed hereto (each of the foregoing a "CLOSING DATE MORTGAGED
PROPERTY" and, collectively, the "CLOSING DATE MORTGAGED PROPERTIES");
(ii) Opinions of Local Counsel. An opinion of counsel
(which counsel shall be reasonably satisfactory to Collateral Agent) in each
jurisdiction in which a Closing Date Mortgaged Property is located with respect
to the enforceability of the form(s) of Closing Date Mortgages to be recorded in
such jurisdiction and such other matters as Collateral Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Collateral Agent;
(iii) Landlord Consents and Estoppels; Recorded Leasehold
Interests. In the case of each Closing Date Mortgaged Property consisting of a
Leasehold Property located in the United States, the lessor of which has filed
an objection to the confirmation of the Plan of Reorganization, and in the case
of each Closing Date Mortgaged Property consisting of a Leasehold Property
located in Canada, a landlord consent and estoppel with respect thereto in form
and substance satisfactory to Administrative Agent and evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged Property is a
Flood Hazard Property located in the United States and (2) the community in
which any such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgement of receipt of written notification from
Collateral Agent (1) as to the existence of each such Flood Hazard Property and
(2) as to whether the community in which each such Flood Hazard Property is
located is participating in the National Flood Insurance Program, and (c) in the
event any such Flood Hazard Property is located in a community that participates
in the National Flood Insurance Program, evidence that such Loan Party has
obtained flood insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors of the
Federal Reserve System; and
(v) Environmental Indemnity. An environmental indemnity
agreement, satisfactory in form and substance to Collateral Agent and its
counsel, with respect to the indemnification of Collateral Agent and Lenders for
any liabilities that may be imposed on or incurred by any of them as a result of
any Hazardous Materials.
H. Security Interests in Personal Property. Collateral Agent
shall have received evidence satisfactory to it that Company and Subsidiary
Guarantors have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such
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agreements, documents and instruments, and made or caused to be made all such
filings and recordings (other than the filing or recording of items described in
clauses (iii) and (iv) below) that may be necessary or, in the opinion of
Collateral Agent, desirable to create in favor of Collateral Agent, for the
benefit of Lenders, a valid and (upon such filing and recording) perfected
Second Priority security interest in the entire personal and mixed property
Collateral. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to
Collateral Agent of accurate and complete schedules to all of the applicable
Collateral Documents;
(ii) Stock Certificates and Instruments. Delivery to
Collateral Agent of (a) certificates, if any, (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to Collateral Agent) representing
all of the capital stock pledged pursuant to the Security Agreement and (b) all
promissory notes or other instruments (duly endorsed, where appropriate, in a
manner satisfactory to Collateral Agent) evidencing any Collateral;
(iii) Lien Searches; UCC and PPSA Termination Statements.
Delivery to Collateral Agent of (a) the results of a recent search, by a Person
satisfactory to Collateral Agent, of all effective UCC financing statements and
fixture filings, PPSA registrations and all other similar filings, recordings
and registrations and all judgment and Tax lien filings which may have been made
with respect to any personal or mixed property of any Loan Party, together with
copies of all such filings disclosed by such search and (b) UCC termination
statements duly executed by all applicable Persons and financing change
statements or other similar releases and discharges for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements or fixture filings, PPSA registrations and all other similar filings,
recordings and registrations disclosed in such search (other than any such
financing statements or fixture filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement);
(iv) UCC and PPSA Financing Statements and Fixture
Filings. (a) Delivery to Collateral Agent of UCC financing statements and, where
appropriate, fixture filings with respect to all personal and mixed property
Collateral of such Loan Party, for filing in all jurisdictions as may be
necessary or, in the opinion of Collateral Agent, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents and (b) registration of personal property financing statements and all
similar filings, recordings and registrations in each jurisdiction in Canada in
which Company or any of its Subsidiaries (including Cineplex Odeon and its
Subsidiaries) carries on business or in which any assets of such Person are
located with respect to all personal property of such Person as may be necessary
or, in the opinion of Collateral Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral Documents;
(v) PTO Cover Sheets, Etc. (a) Delivery to Collateral
Agent of all cover sheets or other documents or instruments required to be filed
with the United States Patent and Trademark Office to create or perfect Liens in
respect of any Intellectual Property Collateral and (b) delivery to Collateral
Agent of such information as may be necessary to create or perfect
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Liens in Canada in respect of any Intellectual Property Collateral with the
Canadian Intellectual Property Office; and
(vi) Opinions of Counsel. Delivery to Collateral Agent of
an opinion of counsel (which counsel shall be reasonably satisfactory to
Collateral Agent) under the laws of each jurisdiction in which any Loan Party is
organized with respect to the creation and perfection of the security interests
in favor of Collateral Agent in such Collateral and such other matters governed
by the laws of such jurisdiction regarding such security interests as Collateral
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Collateral Agent.
I. Opinions of Company's Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of (i)
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Loan Parties, in form
and substance reasonably satisfactory to Administrative Agent and its counsel,
dated as of the Closing Date and setting forth substantially the matters in the
opinions designated in Exhibit VI-A annexed hereto and as to such other matters
as Administrative Agent acting on behalf of Lenders may reasonably request, and
(ii) Davies, Ward, ▇▇▇▇▇▇▇ & Vineberg LLP, Canadian counsel for the Company, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit VI-B annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
J. Opinions of O'Melveny & ▇▇▇▇▇ LLP. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ LLP, dated as of the Closing Date, substantially in the form
of Exhibit VII annexed hereto and as to such other matters as Administrative
Agent acting on behalf of Lenders may reasonably request.
K. Evidence of Insurance. Company shall have delivered to
Administrative Agent an Officer's Certificate in form and substance reasonably
satisfactory to Administrative Agent certifying as to an attached schedule
setting forth each casualty, liability and business interruption insurance
policy maintained by Company and its Subsidiaries, the expiration date of each
such insurance policy, the amount of insurance coverage provided pursuant to
each such policy, any applicable deductibles and any other information
reasonably requested by the Administrative Agent with respect to such insurance
policies. Collateral Agent shall have received a certificate from Company's
insurance broker or other evidence satisfactory to it that all insurance
required to be maintained pursuant to subsection 6.4 is in full force and effect
and that Collateral Agent on behalf of the Lenders and the Priority Secured
Lenders has been named as additional insured and/or loss payee thereunder to the
extent required under subsection 6.4.
L. Fees. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
M. Priority Secured Credit Agreement. All conditions to the
making of the initial Priority Secured Loans under the Priority Secured Credit
Agreement shall have been satisfied or waived and such initial Priority Secured
Loans shall have been made.
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N. Payment of Certain Amounts. Company shall have paid
(i) all adequate protection payments to which Lenders are
entitled pursuant to the final borrowing order entered by the Bankruptcy Court
on April 4, 2001 for the period ending on the Closing Date; and
(ii) all accrued but unpaid administrative agent's fees
and letter of credit fees under the Pre-Petition Credit Agreement and the DIP
Credit Agreement.
O. Representations and Warranties; Performance of Agreements.
Company shall have delivered to Administrative Agent an Officers' Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 hereof are true, correct and
complete on and as of the Closing Date (after giving effect to the effectiveness
of the Plan of Reorganization and the CCAA Plan of Arrangement) to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete on and as of such
earlier date) and that Company shall have performed in all material respects all
agreements and satisfied all conditions that this Agreement provides shall be
performed or satisfied by it on or before the Closing Date except as otherwise
disclosed to and agreed to in writing by Administrative Agent.
P. Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
Q. Estimate of Company-Funded Unsecured Settlement Amount.
Company shall have delivered to Administrative Agent on the Closing Date an
Officer's Certificate setting forth a good faith estimate of the Company-Funded
Unsecured Settlement Amount and each amount described in the definition of
Company-Funded Unsecured Settlement Amount, all in a level of detail and
otherwise in form and substance satisfactory to Administrative Agent.
R. Cash Contribution; Unsecured Settlement Distribution.
(i) [Intentionally Omitted].
(ii) The Sponsors shall have purchased for cash common
equity of Company, to fund the Unsecured Settlement Distribution (as defined in
the Plan of Reorganization) in accordance with the Plan of Reorganization, in an
amount not less than the difference between (a) $45,000,000 and (b) the
Company-Funded Unsecured Settlement Amount; provided that, notwithstanding
anything to the contrary contained herein, the Company-Funded Unsecured
Settlement Amount shall not exceed 80% of the amount of cash common equity
contributed by the Sponsors to Company to fund the Unsecured Settlement
Distribution.
(iii) Company shall have paid the Unsecured Settlement
Distribution (as defined in the Plan of Reorganization) in accordance with the
Plan of Reorganization.
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(iv) Company shall have delivered to Administrative Agent
on the Closing Date an Officer's Certificate certifying that the conditions in
subsections 4.1R(ii) and (iii) have been satisfied.
S. No Material Adverse Change. Since August 31, 2001, there
shall have occurred no material adverse change in the business, operations,
properties, assets, liabilities, condition (financial or otherwise) or prospects
of Company and its Subsidiaries, taken as a whole, other than as set forth in
the Plan of Reorganization or the CCAA Plan of Arrangement, determined by the
Administrative Agent in its sole discretion.
T. No Litigation. On the Closing Date, there shall not be any
action, suit, investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental instrumentality that purports
to affect the Plan of Reorganization, the CCAA Plan of Arrangement, any of the
Priority Secured Loan Documents (as defined in the Priority Secured Credit
Agreement) or any of the Term Loan Documents that could reasonably be expected
to have a material adverse effect on the Plan of Reorganization, the CCAA Plan
of Arrangement, any of the Priority Secured Loan Documents, any of the Term Loan
Documents or any of the other transactions contemplated hereby or on the
business, assets, liabilities, results of operations, condition (financial or
otherwise), properties or prospects of Company and its Subsidiaries, taken as a
whole.
U. Delivery of Financial Information. Company shall have
delivered financial information, budgets and projections regarding the
confirmation of the Plan of Reorganization and the CCAA Plan of Arrangement and
the reorganization of Company and Cineplex Odeon in form and substance
satisfactory to Administrative Agent; provided that Administrative Agent
acknowledges and agrees that such financial information, budgets and projections
shall be prepared consistent with the methodology set forth on Schedule 4.1U.
V. Merger of Merged Subsidiaries. Company shall have filed or
caused to be filed with the appropriate office of each applicable state all
documents and certificates necessary to cause the merger of each Merged
Subsidiary with and into the Wholly Owned North American Subsidiary of Company
shown opposite its name on Schedule 5.21.
4.2 CONDITIONS TO SUPPLEMENTAL TERM LOANS.
The obligations of the Lenders making Supplemental Term Loans
to make Supplemental Term Loans shall be, in addition to the conditions
precedent specified in subsection 4.3, subject to prior or concurrent
satisfaction of each condition agreed to by Company, all Lenders making
Supplemental Term Loans and Administrative Agent in writing prior to the Funding
Date for such Supplemental Term Loans.
4.3 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing,
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in each case signed by the chief executive officer, the chief financial officer
or the treasurer of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Term Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by such Notice
of Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator
or Governmental Authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date; and
(v) The making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, Company represents and warrants to each Lender, on the date of
this Agreement and, except as otherwise provided, on each Funding Date, that the
following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS AND SUBSIDIARIES.
A. Organization and Powers. Each Loan Party is an organization
duly organized, validly existing and, except as set forth on Schedule 5.1A, in
good standing under the laws of its jurisdiction of organization. Each Loan
Party has all requisite corporate or limited liability company power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Term Loan Documents
to which it is a party and to carry out the transactions contemplated hereby and
thereby and, in the case of Company, to issue and pay the Notes.
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B. Qualification and Good Standing. Each Loan Party is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had and will not have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.12.
D. Subsidiaries. All of the Subsidiaries of Company are
identified in Schedule 5.1D annexed hereto, as said Schedule 5.1D may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvii). The capital stock or limited liability company interests of Company
and of each of the Subsidiaries of Company identified in Schedule 5.1D annexed
hereto (as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock or limited liability company
interests constitutes Margin Stock. Each of the Subsidiaries of Company
identified in Schedule 5.1D annexed hereto (as so supplemented) is a corporation
or limited liability company duly organized, validly existing and, except as set
forth in Schedule 5.1D annexed hereto, in good standing under the laws of its
respective jurisdiction of organization set forth therein, has all requisite
corporate or limited liability company power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate or limited liability
company power and authority has not had and will not have a Material Adverse
Effect. Schedule 5.1D annexed hereto (as so supplemented) correctly sets forth
the ownership interest of Company and each of its Subsidiaries in each of the
Subsidiaries of Company identified therein. The capital and ownership structure
of Company and its Subsidiaries, both before and after giving effect to the
effectiveness of the Plan of Reorganization and the CCAA Plan of Arrangement and
the related transactions contemplated in connection therewith, are as set forth
on Schedule 4.1B(i) annexed hereto.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. Authorization of Borrowing. The execution, delivery and
performance of each Term Loan Document have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by any
Loan Party of the Term Loan Documents to which it is a party and the
consummation of the transactions contemplated by the Term Loan Documents do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to any Loan Party, the constating documents, bylaws or any
shareholders agreement of any Loan Party or any order, judgment or decree of any
court or other agency of government binding on any Loan Party, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of any Loan Party, except for
such conflicts, breaches or defaults that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any of the
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properties or assets of any Loan Party (other than any Liens created under any
of the Term Loan Documents in favor of Collateral Agent on behalf of Lenders),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of any Loan Party, except for such
approvals or consents that will be obtained on or before the Closing Date and
such approvals or consents the failure of which to obtain, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
C. Governmental Consents. The execution, delivery and
performance by any Loan Party of the Term Loan Documents to which it is a party,
the issuance, delivery and payment of the Notes and the consummation of the
transactions contemplated by the Term Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state, provincial or other Governmental Authority or
regulatory body, except for (i) filings required by federal or state securities
laws, (ii) such other registrations, consents, approvals, notices or other
actions which have been made, obtained, given or taken on or before the Closing
Date and (iii) such other filings the failure of which to make, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
D. Binding Obligation. Each of the Term Loan Documents has
been duly executed and delivered by each Loan Party that is a party thereto and
is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, (i) audited financial statements of Company and its Subsidiaries for
Fiscal Year ending February 28, 2001, consisting of a balance sheet and the
related consolidated statements of operations, stockholders' equity and cash
flows for such Fiscal Year, and (ii) unaudited, condensed, combined,
consolidated financial statements of Company and its Subsidiaries for the eleven
months ended January 31, 2002, consisting of a balance sheet and related
statements of operations and cash flow. All such statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position (on a consolidated basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated basis) of the entities described therein for each
of the periods then ended, subject, in the case of any such unaudited financial
statements, to the changes resulting from audit and normal year-end adjustments
and absence of footnotes. None of the Loan Parties has (and none of the Loan
Parties will have following the making of the Restructured Term Loans) any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is required by GAAP to be,
but is not, or to the extent not required by GAAP which is known to or
reasonably should be known to Company, but is not, reflected in the foregoing
financial statements or the most recent financial statements delivered pursuant
to subsection 6.1 or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company and its Subsidiaries, taken as a whole.
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5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since February 28, 2001, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Except as set forth on Schedule 5.4, since February 28, 2001,
neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
Company and each of its Subsidiaries have (i) good and
indefeasible title to (in the case of fee interests in real property), (ii)
valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7. All
such properties and assets are free and clear of Liens other than Liens
permitted under subsection 7.2A.
5.6 LITIGATION; ADVERSE FACTS.
Except as described in Schedule 5.6, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of Company's Subsidiaries) at law or in
equity or before or by any federal, state, provincial, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, pending or, to the knowledge of Company, threatened against
or affecting Company or any of Company's Subsidiaries or any property of Company
or any of Company's Subsidiaries that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. Neither Company
nor any of Company's Subsidiaries is (i) in violation of any applicable laws
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect or (ii) subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material
Tax returns and reports of Company and its Subsidiaries required to be filed by
any of them have been timely filed, and all material Taxes, assessments, fees
and other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company does not know of any
proposed material Tax assessment against Company or any of its Subsidiaries
which is not being actively contested by Company or such Subsidiary in good
faith and by
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appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS;
MATERIAL CONTRACTS.
A. Neither Company nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
B. Neither Company nor any of its Subsidiaries is a party to
or is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. All Material Contracts of each of Company and each of its
Subsidiaries are in full force and effect and no defaults currently exist
thereunder, except where the consequences, direct or indirect, of such default
or defaults, if any, would not have a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
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
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Company only or of Company
and its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument between Company and any Lender or any Affiliate of any Lender
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company and each of its ERISA Affiliates are in compliance
in all material respects with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder and the terms
of each Employee Benefit Plan, and have performed all their material obligations
under each Employee Benefit Plan, except where such
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noncompliance or nonperformance would not reasonably be expected to have a
Material Adverse Effect.
B. No ERISA Event has occurred or is reasonably expected to
occur which would reasonably be expected to have a Material Adverse Effect.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code or as disclosed on Schedule 5.11(c) annexed hereto, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employees of Company or any
of its ERISA Affiliates.
D. In accordance with the most recent actuarial valuation for
any Pension Plan, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), does not exceed $15,000,000.
E. The Canadian Pension Plans are duly registered under the
Income Tax Act (Canada), as amended, and any successor thereto, and any
regulations promulgated thereunder, as in effect on the Closing Date and all
other applicable laws which require registration and no event has occurred which
is reasonably likely to cause the loss of such registered status. All material
obligations of Cineplex Odeon, Company and its Subsidiaries (including
fiduciary, funding, investment and administration obligations) required to be
performed in connection with the Canadian Pension Plans and the funding
agreements therefor have been performed in a timely fashion. There have been no
improper withdrawals or applications of the assets of the Canadian Pension Plans
or the Canadian Benefit Plans. There are no outstanding disputes concerning the
assets of the Canadian Pension Plans or the Canadian Benefit Plans. Each of the
Canadian Pension Plans is fully funded both on an ongoing basis and on a
solvency basis (using actuarial methods and assumptions which are consistent
with the valuations last filed with the applicable governmental authorities and
which are consistent with generally accepted actuarial principles).
5.12 CERTAIN FEES.
Except as set forth in Schedule 5.12 annexed hereto, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of Company and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in the
Facilities) comply with all
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Environmental Laws except for any such noncompliance which would not reasonably
be expected to have a Material Adverse Effect;
(ii) Company and each of its Subsidiaries have obtained
all Governmental Authorizations under Environmental Laws necessary to conduct
their respective operations, and all such Governmental Authorizations are being
maintained in good standing, and Company and each of its Subsidiaries are in
compliance with such Governmental Authorizations except for any such failure to
obtain, maintain or comply which would not reasonably be expected to have a
Material Adverse Effect;
(iii) neither Company nor any of its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be liable to
any Person as a result of or in connection with any Hazardous Materials or (b)
any letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9604)
or comparable state laws, and, to the best of Company's knowledge, none of the
operations of Company or any of its Subsidiaries is the subject of any federal
or state investigation relating to or in connection with any Hazardous Materials
at any Facility or at any other location except for such of the foregoing which
would not reasonably be expected to have a Material Adverse Effect;
(iv) none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative proceeding alleging
the violation of or liability under any Environmental Laws which if adversely
determined could reasonably be expected to have a Material Adverse Effect;
(v) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any outstanding written
order or agreement with any Governmental Authority or private party relating to
(a) any actual or potential violation of or liability under Environmental Laws
or (b) any Environmental Claims except for such of the foregoing which would not
reasonably be expected to have a Material Adverse Effect;
(vi) neither Company nor any of its Subsidiaries has any
contingent liability in connection with any Release of any Hazardous Materials
by Company or any of its Subsidiaries except for such of the foregoing which
would not reasonably be expected to have a Material Adverse Effect;
(vii) neither Company nor any of its Subsidiaries nor, to
the best knowledge of Company, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past or
present treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent, except for such of the foregoing
which could not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(viii) no Hazardous Materials exist on, under or about any
Facility in a manner that would reasonably be expected to give rise to an
Environmental Claim having a Material Adverse Effect, and neither Company nor
any of its Subsidiaries has filed any notice or
78
report of a Release of any Hazardous Materials that would reasonably be expected
to give rise to an Environmental Claim having a Material Adverse Effect;
(ix) neither Company nor any of its Subsidiaries nor, to
the best knowledge of Company, any of their respective predecessors has disposed
of any Hazardous Materials in a manner that would reasonably be expected to give
rise to an Environmental Claim having a Material Adverse Effect;
(x) to the best knowledge of Company, no underground
storage tanks or surface impoundments are on or at any Facility, except which
underground storage tanks or surface impoundments could not reasonably be
expected to result in a Material Adverse Effect; and
(xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been attached to
any Facility except for any such Lien which would not reasonably be expected to
have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
Except as set forth in Schedule 5.14 annexed hereto, there is
no strike or work stoppage in existence or, to the knowledge of Company or any
of its Subsidiaries, threatened involving Company or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect.
5.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations
by such Loan Party on any date on which this representation is made, will be,
Solvent.
5.16 DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries contained in the Plan of Reorganization, the Disclosure Statements,
the CCAA Plan of Arrangement, any Term Loan Document or in any other document,
certificate or written statement furnished to Lenders by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results and that such projections are subject to
significant uncertainties and contingencies, many of which are beyond Company's
control, and that no assurance can be given that such projections will be
realized. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to Company (other than matters of a general economic
nature) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect and that have
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not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.17 MATTERS RELATING TO BANKRUPTCY PROCEEDINGS.
A. Plan of Reorganization; Confirmation Order. There have been
no material modifications, amendments, revisions or restatements of the Plan of
Reorganization. All representations and warranties made by Company or any
Subsidiary Debtor in the Plan of Reorganization are accurate, true, correct and
complete in all material respects as of the Closing Date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were accurate, true, correct and complete in all
material respects as of such earlier date). The Confirmation Order has been
entered by the Bankruptcy Court and has not been stayed pending any appeal.
B. CCAA Plan of Arrangement; Sanctioning. (i) There have been
no material modifications, amendments, revisions or restatements of the CCAA
Plan of Arrangement, and (ii) the CCAA Plan of Arrangement has been sanctioned
by order of the Canadian Court and such order has not been stayed, varied or
overturned, is not subject to any appeal and remains in full force and effect.
5.18 INSURANCE.
Company and its Subsidiaries maintain, with financially sound
and reputable insurers, insurance with respect to its properties and business
and the properties and business of its Subsidiaries, against loss or damage of
the kinds customarily insured against by corporations of established reputation
engaged in the same or similar business of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations all
as determined by the officers of the Company in their reasonable discretion.
Attached as Schedule 5.18 hereto is a complete and accurate description of all
policies of insurance that are in effect for Company and its Subsidiaries.
5.19 INTELLECTUAL PROPERTY.
A. Company and its Subsidiaries possess all of the trademarks,
tradenames, designs, copyrights, patents and licenses reasonably necessary for
the conduct of their respective businesses. Company and its Subsidiaries own, or
are licensed to use, the Intellectual Property and all such Intellectual
Property is fully protected and duly and properly registered, filed or issued in
the appropriate office and jurisdictions for such registrations, filing or
issuances, except for such filings the failure of which to make, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
5.20 CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System set forth in
Schedule 6.11 is accurate and complete in all material respects as of the
Closing Date and does not omit to state any material fact necessary to make the
statements set forth therein not misleading. Neither Company nor any of the
Subsidiary Guarantors owns any Deposit Account that is not subject to the Liens
granted under the Security Agreement or the Collateral Account Agreement. There
has
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been no material change to the Cash Management System since the Closing Date
except such changes as have been disclosed to and approved by Administrative
Agent in writing.
5.21 MERGED SUBSIDIARIES.
On or before the Closing Date, Company has caused each of the
Subsidiaries of Company listed on Schedule 5.21 (each a "MERGED SUBSIDIARY" and
collectively, the "MERGED SUBSIDIARIES") to be merged with and into the Wholly
Owned North American Subsidiary of Company set forth on Schedule 5.21. The total
value of each Merged Subsidiary's assets immediately prior to the effectiveness
of the merger of such Merged Subsidiary with and into the applicable Wholly
Owned North American Subsidiary of Company did not exceed $5,000.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Restructured Term Loan Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations, unless Requisite
Lenders shall otherwise give prior written consent, Company shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent:
(i) Monthly Financials: as soon as possible and in any
event within 45 days after the end of each month, the consolidated balance sheet
as at the end of such month and the related consolidated statements of income
and cash flows of (x) Company and its Subsidiaries and (y) Company and its
Wholly Owned Subsidiaries for such month, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figure from the Financial Plan for
such Fiscal Year;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of the first three Fiscal Quarters,
the consolidated balance sheets of (x) Company and its Subsidiaries and (y)
Company and its Wholly Owned Subsidiaries as at the end of such Fiscal Quarter
and the related consolidated statements of income, stockholders' equity and cash
flows of (x) Company and its Subsidiaries and (y) Company and its Wholly Owned
Subsidiaries for such Fiscal Quarter, and for the period from the beginning of
the then current Fiscal Year to the end of such Fiscal Quarter (including
segment information regarding Company's Canadian and international operations in
accordance with GAAP), setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments and the
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absence of footnotes, and (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, the consolidated balance
sheets of (x) Company and its Subsidiaries and (y) Company and its Wholly Owned
Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income, stockholders' equity and cash flows of (x) Company and its
Subsidiaries and (y) Company and its Wholly Owned Subsidiaries for such Fiscal
Year, (including segment information regarding Company's Canadian and
international operations in accordance with GAAP), setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, (b) a narrative report describing the operations of Company
and its Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, and (c) in the case of such consolidated financial
statements of Company and its Subsidiaries, a report thereon of a nationally
recognized independent accounting firm, which report shall be unqualified as to
scope of audit, shall express no doubts about the ability of Company and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iv) Officers' and Compliance Certificates: together with
each delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of Company
stating that the signers have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of Company and its Subsidiaries during
the accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the date of
such Officers' Certificate, of any condition or event that constitutes an Event
of Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent compliance with
such restrictions is required to be tested at the end of the applicable
accounting period;
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(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the preparation
of the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii), (iii) or
(xiii) of this subsection 6.1 following such change, consolidated financial
statements of Company and its Subsidiaries for (y) the current Fiscal Year to
the effective date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such change, a
written statement of the chief accounting officer or chief financial officer of
Company setting forth the differences (including without limitation any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that their
audit examination has included a review of the terms of this Agreement and the
other Term Loan Documents as they relate to accounting matters, (b) stating
whether, in connection with their audit examination, any condition or event that
constitutes an Event of Default or Potential Event of Default with respect to
the covenants set forth in Section 7, has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit examination nothing
has come to their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant to
subdivision (iv) above is not correct or that the matters set forth in the
Compliance Certificates delivered therewith pursuant to clause (b) of
subdivision (iv) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in connection
with each annual, interim or special audit of the financial statements of
Company and its Subsidiaries made by such accountants, including, without
limitation, any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its security
holders or by any Subsidiary of Company to its security holders other than
Company or another Subsidiary of Company, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar form) and
83
prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press releases and
other statements made available generally by Company or any of its Subsidiaries
to the public concerning material developments in the business of Company or any
of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any
Responsible Officer of Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or becoming
aware that any Lender has given any notice (other than to Administrative Agent)
or taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to Company
or any of its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2, (c) of
any condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on Form 8-K
(Items 1, 2, 4, 5 and 6 of such Form as in effect on the date hereof) if Company
were required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any such Person and
the nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company have taken, are taking and
propose to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
Responsible Officer of Company obtaining knowledge of (1) the institution of, or
non-frivolous threat of, any non-frivolous action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries (collectively, "PROCEEDINGS") not
previously disclosed in writing by Company to Lenders or (2) any material
development in any Proceeding that, in any case:
(x) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(y) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to Company to enable Lenders and their counsel to evaluate such
matters; and (b) within twenty days after the end of each Fiscal Quarter, a
schedule of all Proceedings involving an alleged liability of, or claims against
or affecting, Company or any of its Subsidiaries equal to or greater than
$5,000,000 or the Equivalent Amount in any other currency, and promptly after
request by Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and its counsel
to evaluate any of such Proceedings;
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(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Company or any of its ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA and Pension Notices: with reasonable
promptness, copies of (a) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by Company or any of its ERISA Affiliates with
the Internal Revenue Service with respect to each Pension Plan; (b) all material
notices received by Company or any of its ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; (c) a copy of any notice received by
Company or any of its Subsidiaries that it has failed to deliver to the funding
agent of any Canadian Pension Plan a summary of contributions or that any
contributions have not been paid when due; and (d) such other documents or
governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any
event no later than 30 days prior to the first day of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (the "FINANCIAL
PLAN" for such Fiscal Year), including without limitation (a) a forecasted
consolidated balance sheet and forecasted consolidated statements of income and
cash flows of Company and its Subsidiaries for such Fiscal Year, together with a
pro forma Compliance Certificate for such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, and (b) budgeted consolidated
statements of income and cash flows of Company and its Subsidiaries for each
month of such Fiscal Year, together with an explanation of the assumptions on
which such forecasts are based;
(xiv) Insurance: as soon as practicable and in any event
by the last day of each Fiscal Year, an Officer's Certificate of Company
attaching a schedule in form and substance reasonably satisfactory to
Administrative Agent outlining all material insurance coverage maintained as of
the date of such Officer's Certificate by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, with respect to significant environmental matters at
any Facility or which relate to an Environmental Claim in either case which
could reasonably be expected to result in a Material Adverse Effect; provided
that the delivery of such reports would not in the opinion of counsel to Company
adversely affect the availability of any privilege to which it may be entitled
in respect of such audits or reports; provided, further, that Company shall give
Administrative Agent prompt written notice of any audits or reports not
delivered in accordance with the preceding proviso.
(xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Company; provided that
delivery of a current SEC Report (to the extent that Company is an SEC
registrant) containing a disclosure of such change
85
in the Board of Directors of Company shall be deemed to satisfy the requirements
of this subsection 6.1(xvi).
(xvii) New Subsidiaries: promptly upon any Person becoming
a Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company and (b)
all of the data required to be set forth in Schedule 5.1D annexed hereto with
respect to all Subsidiaries of Company (it being understood that such written
notice shall be deemed to supplement Schedule 5.1D annexed hereto for all
purposes of this Agreement);
(xviii) Material Contracts: promptly, and in any event
within 10 Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially adverse to
Company or such Subsidiary, as the case may be, or any new Material Contract is
entered into, a written statement describing such event with copies of such
material amendments or new contracts, and an explanation of any actions being
taken with respect thereto; provided that Company shall have no obligation to
deliver such written notice to the extent that disclosure of such event would
not be required to be disclosed in an SEC Report (if Company were an SEC
registrant); and provided further that delivery of an SEC Report (to the extent
that Company is an SEC registrant) containing a disclosure of any such event
shall be deemed to satisfy the requirements of this subsection 6.1(xviii);
(xix) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent; and
(xx) Joint Venture Financial Statements: within ten days
of Company's receipt thereof, any audited financial statements for any Joint
Venture of Company or any of its Subsidiaries.
6.2 CORPORATE AND LIMITED LIABILITY COMPANY EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate or limited liability company existence and all
rights and franchises material to its business; provided, however, that neither
Company nor any of its Subsidiaries shall be required to preserve any such right
or franchise and, solely with respect to Company's Subsidiaries, such existence,
if the Board of Directors or members of Company or such Subsidiary determines in
good faith that the preservation thereof is no longer desirable in the conduct
of the business of Company or such Subsidiary, as the case may be, and that the
loss thereof, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to,
pay all material Taxes, assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any material penalty accrues thereon, and all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
86
become a Lien upon any of its properties or assets, prior to the time when any
material penalty or fine shall be incurred with respect thereto; provided that
no such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
B. Company will not, and will not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income Tax
return with any Person (other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Company will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all of their respective material properties
used or useful in the business of Company and its Subsidiaries (including,
without limitation, Intellectual Property) and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof;
provided, however, that (A) Company and its Subsidiaries may dispose of obsolete
equipment in the ordinary course of business and (B) Company and its
Subsidiaries may (i) close, terminate, surrender, reject in bankruptcy or reduce
the term of leases, (ii) amend or otherwise modify leases in a manner that does
not materially and adversely affect Company, any of its Subsidiaries,
Administrative Agent or Lenders or (iii) otherwise cease to operate theatres and
remove fixtures and personalty therefrom upon the expiration or other
termination of the applicable lease if, in the case of clause (i) and (iii)
(other than upon expiration), the Board of Directors of Company or such
Subsidiary, as the case may be, determines in good faith that the maintenance
and continued operation thereof is no longer desirable in the conduct of the
business of Company or such Subsidiary, as the case may be, and that the loss
thereof, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. Company will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and businesses of its
Subsidiaries against loss or damage of the kinds customarily carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses. Each such policy of insurance shall (a) name
Collateral Agent for the benefit of the Lenders and the Priority Secured Lenders
as an additional insured thereunder as its interest may appear and (b) in the
case of each casualty insurance policy, except as otherwise provided for in this
Agreement, contain a loss payable clause or endorsement, satisfactory in form
and substance to Collateral Agent, that names Collateral Agent for the benefit
of the Lenders and the Priority Secured Lenders as the loss payee thereunder for
any covered loss in excess of $500,000 and (c) provide for at least 30 days
prior written notice to Collateral Agent of any modification or cancellation of
such policy.
6.5 INSPECTION; LENDER MEETING.
Company shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of Company or any of its Subsidiaries once during
each Fiscal Year, including its and their financial and accounting records, and
to make copies and take extracts therefrom, and to discuss its and their
87
affairs, finances and accounts with its and their officers and independent
public accountants (provided that Company may, if it so chooses, be present at
or participate in any such discussion) upon reasonable notice and at such
reasonable times during normal business hours as may be reasonably requested;
provided that, at any time after the occurrence and during the continuance of an
Event of Default, Company shall, and shall cause each of its Subsidiaries to
permit such additional audits as Administrative Agent may deem necessary or
advisable, upon reasonable notice and at such reasonable times during normal
business hours as may be reasonably requested. Without in any way limiting the
foregoing, Company will, upon the request of Administrative Agent or Requisite
Lenders, participate in a meeting of Administrative Agent and Lenders once
during each Fiscal Year to be held at Company's corporate offices (or such other
location as may be agreed to by Company and Administrative Agent) at such time
as may be agreed to by Company and Administrative Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall, and shall cause each of its Subsidiaries to,
comply with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority, noncompliance with which could reasonably
be expected to cause, individually or in the aggregate at any time, a Material
Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. Company shall, and shall cause each of its Subsidiaries to,
exercise commercially reasonable due diligence in order to comply in all
material respects, and cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Facilities and (ii) all other Persons on
or occupying such property to comply in all material respects, with all
Environmental Laws, except where failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
B. Company agrees that Administrative Agent may, upon a
reasonable belief that Company has breached any covenant or representation with
respect to environmental matters set forth herein or that there has been a
violation of Environmental Laws at any Facility or by Company which breach or
violation could reasonably be expected to have a Material Adverse Effect,
retain, at Company's reasonable expense, an independent professional consultant
(the selection of which shall be subject to Company's reasonable consent) to
review any report relating to Hazardous Materials prepared by or for Company in
connection with such potential breach or violation and to conduct its own
reasonable investigation of such matter at such Facility currently owned,
leased, operated or used by Company or any of its Subsidiaries which is the
subject of such potential breach or violation, and Company agrees to use its
commercially reasonable efforts to obtain permission for Administrative Agent's
professional consultant to conduct its own investigation of any such matter at
any Facility previously owned, leased, operated or used by Company or any of its
Subsidiaries which is the subject of such potential breach or violation. Company
hereby grants to Administrative Agent and its agents, employees, consultants and
contractors the right to enter into or onto the aforementioned Facilities
currently owned, leased, operated or used by Company or any of its Subsidiaries
upon reasonable notice to Company to perform such assessments on such property
as are reasonably necessary to conduct such a review and/or investigation. Any
such investigation of any such Facility shall be
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conducted, unless otherwise agreed to by Company and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at any such
Facility or to cause any damage or loss to any property at such Facility.
Company and Administrative Agent hereby acknowledge and agree that any report of
any investigation conducted at the request of Administrative Agent pursuant to
this subsection 6.7B may be obtained and may be used by Administrative Agent and
Lenders only for the purposes of Lenders' internal credit decisions, to monitor
and police the Loans and to protect Lenders' security interests, if any, created
by the Term Loan Documents. Administrative Agent agrees to deliver a copy of any
such report to Company with the understanding that Company acknowledges and
agrees that (i) it will indemnify and hold harmless Administrative Agent and
each Lender from any reasonable costs, losses or liabilities relating to
Company's use of or reliance on such report, (ii) neither Administrative Agent
nor any Lender makes any representation or warranty with respect to such report,
and (iii) by delivering such report to Company, neither Administrative Agent nor
any Lender is requiring or recommending the implementation of any suggestions or
recommendations contained in such report. In addition to, and without limiting
the generality of the foregoing, Company shall, at Administrative Agent's
reasonable request and at Company's expense, conduct such investigation of the
Facility located at ▇▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ as is
reasonably necessary to determine whether Hazardous Materials may exist in soil
or ground water in the vicinity. Administrative Agent shall have the right to
reasonably approve consultants to be engaged by Company, and the scope of
investigation proposed by such consultant. Company agrees Administrative Agent
shall be deemed reasonable in disapproving any consultant who is not member of a
nationally-recognized environmental consulting firm or who does not have five or
more years experience with remediation of Hazardous Materials contamination.
C. Company shall promptly advise Lenders in writing and in
reasonable detail of (i) any Release of any Hazardous Materials required to be
reported to any federal, state, provincial or local governmental or regulatory
agency under any applicable Environmental Laws, which Release has a reasonable
possibility of giving rise to a Material Adverse Effect, (ii) any and all
written communications with respect to any Environmental Claims that have a
reasonable possibility of giving rise to a Material Adverse Effect or with
respect to any Release of Hazardous Materials required to be reported to any
federal, state, provincial or local governmental or regulatory agency which
Release has a reasonable possibility of giving rise to a Material Adverse
Effect, (iii) any remedial action taken by Company or any other Person in
response to (x) any Hazardous Materials on, under or about any Facility, the
existence of which has a reasonable possibility of resulting in an Environmental
Claim having a Material Adverse Effect, or (y) any Environmental Claim that has
a reasonable possibility of having a Material Adverse Effect, (iv) Company's
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of any Facility that could reasonably be expected to cause such
Facility or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any Environmental
Laws which restriction would have a reasonable possibility of having a Material
Adverse Effect, and (v) any request for information from any governmental agency
that suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for a Release of Hazardous
Materials, which Release has a reasonably possibility of giving rise to a
Material Adverse Effect. In addition to, and without limiting the generality of
the foregoing, Company shall, within 120 days after the Closing Date, deliver to
Administrative Agent either (i) confirmation reasonably
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satisfactory to Administrative Agent that all underground storage tanks owned or
operated by Company and its Subsidiaries are in material compliance with all
Environmental Laws or (ii) with respect to any underground storage tanks owned
or operated by Company or any of its Subsidiaries that are not in material
compliance with all Environmental Laws, Company shall use its commercially
reasonable best efforts to cause such underground storage tanks to be in
material compliance with all Environmental Laws.
D. Company shall promptly notify Administrative Agent of any
proposed acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have a Material Adverse Effect.
E. Company shall, at its own expense, provide copies of such
documents or information as Administrative Agent may reasonably request in
relation to any matters disclosed pursuant to this subsection 6.7.
6.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all remedial action in connection with
the presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about any Facility to the extent required under all
applicable Environmental Laws and Governmental Authorizations except where
failure to comply, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. In the event Company or any of
its Subsidiaries undertakes any remedial action with respect to any Hazardous
Materials on, under or about any Facility, Company or such Subsidiary shall
conduct and complete such remedial action in compliance with applicable
Environmental Laws, except where failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
6.9 EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL DOCUMENTS
BY FUTURE SUBSIDIARIES.
A. Execution of Subsidiary Guaranty and Collateral Documents.
If any Person becomes a Wholly Owned North American Subsidiary of Company after
the date hereof, or if any Merged Subsidiary fails to be merged with and into
the Wholly Owned North American Subsidiary of Company set forth opposite its
name on Schedule 5.21 within three Business Days after the Closing Date, Company
will promptly notify Collateral Agent of that fact and cause such Subsidiary or
Merged Subsidiary, as the case may be, to execute and deliver to Collateral
Agent a counterpart of the Subsidiary Guaranty and the Security Agreement and to
take all such further action and execute all such further documents and
instruments as may be reasonably required to grant and perfect in favor of
Collateral Agent, for the benefit of Lenders, a Second Priority security
interest in all of the personal property assets of such Subsidiary or Merged
Subsidiary described in the applicable Collateral Documents. With respect to (i)
any Person that becomes a Subsidiary of Company or a Joint Venture of Company or
any of its Wholly Owned North American Subsidiaries after the date hereof and
(ii) any Merged Subsidiary that fails to be merged with and into the Wholly
Owned North American Subsidiary of Company set forth opposite its name on
Schedule 5.21 within three Business Days after the Closing Date, Company
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shall also deliver to Collateral Agent a pledge amendment to the Security
Agreement, granting to Collateral Agent on behalf of Lenders a Second Priority
security interest in one hundred percent (100%) of the equity interests in such
Subsidiary or Merged Subsidiary, as the case may be (sixty-five percent (65%) of
such equity interests if such Subsidiary is a Foreign Subsidiary), or one
hundred percent (100%) of the equity interests owned by Company or any of its
Wholly Owned North American Subsidiaries in such Joint Venture, as the case may
be, and Company shall take, or cause to be taken, all such other actions as
Collateral Agent shall deem necessary or desirable to perfect such security
interest.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company
shall deliver to Collateral Agent, together with the counterpart to the
Subsidiary Guaranty and such Collateral Documents to which it is a party, (i)
certified copies of such Subsidiary's or Merged Subsidiary's constating
documents, together with a good standing certificate (or equivalent thereof)
from the jurisdiction of its organization, each to be dated a recent date prior
to their delivery to Collateral Agent, (ii) a copy of such Subsidiary's or
Merged Subsidiary's Bylaws or limited liability company agreement, as
applicable, certified by its secretary or an assistant secretary as of a recent
date prior to their delivery to Collateral Agent, (iii) a certificate executed
by the secretary or an assistant secretary of such Subsidiary or Merged
Subsidiary as to (a) the incumbency and signatures of the officers of such
Subsidiary or Merged Subsidiary executing the Subsidiary Guaranty and the
Collateral Documents to which such Subsidiary or Merged Subsidiary is a party
and (b) the fact that the attached resolutions of the Board of Directors of such
Subsidiary or Merged Subsidiary authorizing the execution, delivery and
performance of the Subsidiary Guaranty and such Collateral Documents are in full
force and effect and have not been modified or rescinded, (iv) an Intercompany
Note executed and delivered by such Subsidiary or Merged Subsidiary evidencing
all intercompany Indebtedness permitted with respect to such Subsidiary or
Merged Subsidiary pursuant to subsection 7.1(iv) and cause such Intercompany
Note to be pledged to Collateral Agent on behalf of Lenders under the applicable
Collateral Document, and (v) a favorable opinion of counsel to such Subsidiary
or Merged Subsidiary, in form and substance satisfactory to Collateral Agent and
its counsel, as to (a) the due organization and good standing of such Subsidiary
or Merged Subsidiary, (b) the due authorization, execution and delivery by such
Subsidiary or Merged Subsidiary of the Subsidiary Guaranty and such Collateral
Documents, (c) the enforceability of the Subsidiary Guaranty and such Collateral
Documents against such Subsidiary or Merged Subsidiary, and (d) such other
matters as Collateral Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Collateral Agent and its counsel.
6.10 MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
A. Recorded Leasehold Interests. To the extent Company shall
not have delivered to Collateral Agent a fully executed and notarized Mortgage
on the Closing Date with respect to any Leasehold Property designated as a
Closing Date Mortgaged Property, Company shall continue to use its reasonable
best efforts to obtain a Mortgage on such Leasehold Property. If Company or any
of its Subsidiaries acquires any Leasehold Property, Company shall, or shall
cause such Subsidiary to, cause such Leasehold Property to be a Recorded
Leasehold Interest (unless otherwise permitted by Collateral Agent in its
reasonable discretion).
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B. Additional Mortgages, Etc. From and after the Closing Date,
if (i) any Loan Party acquires any fee or leasehold interest in real property or
any Leasehold Property (unless otherwise permitted by Collateral Agent in its
reasonable discretion) or (ii) at the time any Person becomes a Loan Party, such
Person owns or holds any fee or leasehold interest in real property or any
Leasehold Property, in the case of clause (ii) above, excluding any such Real
Property Asset the encumbrancing of which requires the consent of any applicable
lessor or then-existing senior lienholder, where Company and its Subsidiaries
are unable to obtain such lessor's or senior lienholder's consent (any such
non-excluded Real Property Asset described in the foregoing clauses (i) or (ii)
being an "ADDITIONAL MORTGAGED PROPERTY"), such Loan Party shall deliver to
Collateral Agent, as soon as practicable after such Person acquires such
Additional Mortgaged Property or becomes a Loan Party, as the case may be, a
fully executed and notarized Mortgage (an "ADDITIONAL MORTGAGE"), in proper form
to be duly recorded in all appropriate places in all applicable jurisdictions,
encumbering the interest of such Loan Party in such Additional Mortgaged
Property; and such opinions, appraisal, documents, title insurance,
environmental reports that may be reasonably required by Collateral Agent that
would have been delivered on the Closing Date if such Additional Mortgaged
Property were a Closing Date Mortgaged Property.
C. Real Estate Appraisals. Company shall, and shall cause each
of its Subsidiaries to, permit an independent real estate appraiser satisfactory
to Collateral Agent, upon reasonable notice, to visit and inspect any Additional
Mortgaged Property for the purpose of preparing an appraisal of such Additional
Mortgaged Property satisfying the requirements of any applicable laws and
regulations (in each case to the extent such appraisal is required under such
laws and regulations as determined by Collateral Agent in its discretion).
6.11 CASH MANAGEMENT SYSTEM.
Company and Subsidiary Guarantors shall maintain the Cash
Management System (including through timely compliance with their obligations to
pay returned items and other Obligations arising in the ordinary course of
operation of the Cash Management System) as described in Schedule 6.11 annexed
hereto. Company shall, and shall cause each Subsidiary Guarantor to, (i) use and
maintain its Deposit Accounts and cash management systems in a manner reasonably
satisfactory to Administrative Agent and (ii) obtain and maintain a deposit
account control agreement in form and substance reasonably satisfactory to
Administrative Agent for each Deposit Account of Company and Subsidiary
Guarantors. Upon Administrative Agent's request, Company shall, and shall cause
each Subsidiary Guarantor to, make such modifications to the Cash Management
System as Administrative Agent shall reasonably request, including, without
limitation, moving any Deposit Account to a different bank, savings and loan
association, credit union or like organization on terms and conditions, and
subject to arrangements, reasonably satisfactory to Administrative Agent.
Company shall not permit the aggregate amount of money or currency held by its
Foreign Subsidiaries in a Deposit Account or otherwise at any time to exceed the
equivalent of $50,000.
6.12 UNSECURED SETTLEMENT DISTRIBUTION.
Company shall pay the Unsecured Settlement Distribution (as
defined in the Plan of Reorganization) in accordance with the Plan of
Reorganization and shall apply the proceeds of
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common equity contributions made by the Sponsors to Company and Company's own
cash-on-hand to the payment of the Unsecured Settlement Distribution prior to
applying the proceeds of any Priority Secured Loans to such payment. Within 90
days after the Closing Date, Company shall deliver to Administrative Agent an
Officer's Certificate setting forth the final calculation of the Company-Funded
Unsecured Settlement Amount, and each amount described in the definition of the
Company-Funded Unsecured Settlement Amount all in a level of detail and
otherwise in form and substance satisfactory to Administrative Agent. In no
event shall Company permit the Company-Funded Unsecured Settlement Amount to
exceed 80% of the amount of common equity contributed by the Sponsors to Company
to fund the Unsecured Settlement Distribution.
6.13 RATINGS.
Upon the request of Administrative Agent, Company shall obtain
ratings of the Restructured Term Loans from S&P and/or ▇▇▇▇▇'▇.
6.14 EMPLOYEE BENEFIT PLANS.
Company and Cineplex Odeon shall and shall cause each of their
respective Subsidiaries to ensure that each Canadian Pension Plan and Canadian
Benefit Plan is administered in a timely manner in all respects in accordance
with the applicable pension plan text, funding agreement, the Income Tax Act
(Canada) and all other applicable laws.
6.15 DISSOLVED OR DISPOSED SUBSIDIARIES.
With respect to each Person listed on Schedule 6.15, Company
shall have either caused such Person to be dissolved, liquidated, or merged out
of existence or sold, transferred, rejected or otherwise disposed of all equity
interests of such Person owned by Company or any of its Subsidiaries, in each
case within 45 days after the Closing Date.
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Restructured Term Loan Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations, unless Requisite
Lenders shall otherwise give prior written consent, Company shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
7.
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to
the Obligations;
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(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its Wholly Owned North American Subsidiaries, and any
Wholly Owned North American Subsidiary of Company may become and remain liable
with respect to Indebtedness to Company or any other Wholly Owned North American
Subsidiary of Company; provided that (a) all such intercompany Indebtedness
shall be evidenced by an Intercompany Note that is pledged to Collateral Agent
pursuant to the terms of the applicable Collateral Document; (b) all such
intercompany Indebtedness shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the Intercompany
Note; (c) any payment by any Wholly Owned North American Subsidiary of Company
under any guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any intercompany Indebtedness owed by such Wholly Owned North
American Subsidiary to Company or to any of its Wholly Owned North American
Subsidiaries for whose benefit such payment is made and (d) in the case of
Indebtedness of Cineplex Odeon and/or any of its Wholly Owned North American
Subsidiaries to Company or any of its Wholly Owned North American Subsidiaries
(other than Cineplex Odeon and its North American Subsidiaries), such
intercompany Indebtedness shall be secured by Third Priority Liens on all of the
assets of Cineplex Odeon and its Wholly Owned Subsidiaries, which Third Priority
Liens are (1) granted pursuant to documentation reasonably satisfactory in form
and substance to Collateral Agent and its counsel and (2) collaterally assigned
to Collateral Agent for the benefit of Lenders pursuant to the applicable
Collateral Document;
(v) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness secured by Liens permitted under subsection
7.2A(iii); provided that the aggregate amount of Indebtedness permitted under
this subsection 7.1(v) outstanding at any time shall not exceed $20,000,000 or
the Equivalent Amount in any other currency;
(vi) Company and its Subsidiaries may remain liable with
respect to Indebtedness existing on the Closing Date set forth in Schedule
7.1(vi);
(vii) Company and its Wholly Owned North American
Subsidiaries may become and remain liable with respect to Indebtedness of a
Person existing at the time such Person is merged into or consolidated with
Company or any Wholly Owned North American Subsidiary of Company or becomes a
Wholly Owned North American Subsidiary of Company; provided that such
Indebtedness was not incurred in connection with, in contemplation of, or with
the purpose of financing such merger, consolidation or acquisition; provided
further that Company can demonstrate in form and substance satisfactory to
Administrative Agent that, immediately before and after giving effect to the
incurrence of such Indebtedness, (a) Company is in compliance on a pro forma
basis with all covenants set forth in Section 7 of this Agreement and (b) there
is no Potential Event of Default or Event of Default; provided still further
that the
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aggregate amount of Indebtedness permitted under this subsection 7.1(vii)
outstanding at any time shall not exceed $20,000,000 or the Equivalent Amount in
any other currency;
(viii) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal amount not
to exceed $5,000,000 at any time outstanding;
(ix) non-Wholly Owned Subsidiaries of Company may become
and remain liable with respect to Investments by the Company and its Wholly
Owned Subsidiaries in such non-Wholly Owned Subsidiaries of Company to the
extent permitted by subsection 7.3A(viii)(a);
(x) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in an aggregate principal amount not
exceeding $140,000,000 under the Priority Secured Credit Agreement and any
refinancings or renewals thereof;
(xi) if Company exercises its Cure Rights pursuant to
subsection 7.6C, Company may become and remain liable with respect to
Indebtedness under Permitted Cure Securities;
(xii) Off-Balance Sheet Subsidiaries may become and remain
liable with respect to Indebtedness used solely to finance Off-Balance Sheet
Capital Expenditures; and
(xiii) Company may issue Subordinated Indebtedness;
provided that the proceeds of such Subordinated Indebtedness are used as a
mandatory prepayment pursuant to subsection 2.4B(ii)(c).
7.2 LIENS AND RELATED MATTERS.
A. Prohibition on Liens. Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State, the PPSA of any province
or territory in Canada or under any similar filing, recording or notice statute,
except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) (A) Liens securing Indebtedness incurred to finance
the acquisition, construction or improvement of any real property assets
acquired or held by Company or any of its Subsidiaries in the ordinary course of
business (hereinafter referred to individually as a "PURCHASE MONEY MORTGAGE"),
and (B) purchase money mortgages or security interests, conditional sale
arrangements and other similar security interests, on motor vehicles
95
and equipment acquired by Company or any Subsidiary (hereinafter referred to
individually as a "PURCHASE MONEY SECURITY INTEREST"); provided, however, that:
(a) the aggregate amount of Indebtedness outstanding at any
time secured by Purchase Money Mortgages and Purchase Money Security
Interests shall not exceed $20,000,000 or the Equivalent Amount in any
other currency;
(b) the transaction in which any Purchase Money Mortgage or
Purchase Money Security Interest is proposed to be created is not then
prohibited by this Agreement;
(c) any Purchase Money Mortgage or Purchase Money Security
Interest shall attach only to the property or asset acquired,
constructed or improved (in the case of a Purchase Money Mortgage) or
acquired (in the case of a Purchase Money Security Interest) in such
transaction and, in each case, shall not extend to or cover any other
assets or properties of Company, or, as the case may be, a Subsidiary;
(d) the Indebtedness secured or covered by any Purchase Money
Mortgage or Purchase Money Security Interest shall not exceed the
lesser of the cost or fair market value of the property or asset
acquired and shall not be renewed, extended or prepaid from the
proceeds of any borrowing by Company or any Subsidiary;
(iv) Other Liens securing Indebtedness in an aggregate amount not
to exceed $10,000,000 or the Equivalent Amount in any other currency at any time
outstanding;
(v) Liens existing on the Closing Date set forth on Schedule
7.2A(v) or extending (without increasing the amount of Indebtedness secured by
such Lien at the time of such extension) any of the Liens set forth on Schedule
7.2A(v);
(vi) Liens securing Indebtedness permitted by subsection 7.1(vii)
on property or assets of a Person existing at the time such Person is merged
into or consolidated with Company or any Wholly Owned North American Subsidiary
of Company or becomes a Wholly Owned North American Subsidiary of Company;
provided that such Liens were not incurred in connection with, in contemplation
of, or for the purpose of facilitating the financing of, such merger,
consolidation or acquisition;
(vii) Liens securing payment of Currency Agreements or Interest
Rate Agreements, in each case to the extent the counterparty to any such
agreement is (or at the time such agreement was entered into, was) a Lender or
an Affiliate of a Lender;
(viii) Third Priority Liens securing Indebtedness of Cineplex
Odeon and/or any of its Wholly Owned North American Subsidiaries due and owing
to Company; provided that (a) such Indebtedness is permitted by subsection
7.1(iv), (b) (1) such Indebtedness is pledged to Collateral Agent for the
benefit of Lenders pursuant to the applicable Collateral Document and (2) such
Third Priority Liens are collaterally assigned to Collateral Agent for the
benefit of Lenders pursuant to the applicable Collateral Document and (c) such
Liens are granted
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pursuant to documentation reasonably satisfactory in form and substance to
Collateral Agent and its counsel;
(ix) First Priority Liens on assets of Company and its
Subsidiaries securing obligations of (a) Company and/or Cineplex Odeon under the
Priority Secured Credit Agreement, (b) Company under the Company Guaranty and
(c) Subsidiary Guarantors under the Subsidiary Guaranty; and
(x) Liens on assets of any Off-Balance Sheet Subsidiary
securing Indebtedness of such Off-Balance Sheet Subsidiary used solely to
finance Off-Balance Sheet New Build Capital Expenditures of such Off-Balance
Sheet Subsidiary.
B. Equitable Lien in Favor of Lenders. If Company or any of
its Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to (i)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale and (ii)
Liens on properties leased in the ordinary course of business with respect to
the property so leased, none of Company or any of its Subsidiaries (other than
any Off-Balance Sheet Subsidiary) shall enter into any agreement prohibiting the
creation or assumption of any Lien for the benefit of the Lenders upon any of
its properties or assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or
Other Subsidiaries. Except (i) as provided herein and in the Priority Secured
Credit Agreement, (ii) as provided in any loan agreement or other document
evidencing Indebtedness of (x) any of Company's Wholly Owned North American
Subsidiaries permitted under subsection 7.1(vi) or (vii) or (y) any Off-Balance
Sheet Subsidiary used solely to finance Off-Balance Sheet New Build Capital
Expenditures, (iii) for any agreement that has been entered into for the sale or
disposition of all or substantially all of the equity ownership interests or
assets of such Subsidiary (provided that (x) the consummation of such sale or
disposition is permitted by this Agreement, (y) such restriction only applies to
the equity ownership interests or assets to be sold pursuant to such agreement
and (z) such restriction terminates upon consummation or abandonment of such
disposition and upon termination of such agreement), (iv) for any security
agreement or other similar document creating or evidencing a Lien permitted by
subsection 7.2A(iii), (iv), (v), (vi), (vii), (viii), (ix) or (x) securing
Indebtedness permitted to be incurred under subsection 7.1, in each case to the
extent that such security agreement or other document imposes restrictions of
the nature described in clause (d) below on the property subject to such Lien,
(v) for restrictions on non-Wholly Owned Subsidiaries, (vi) for customary
provisions restricting subletting or assignment of leases, licenses and other
contractual rights and obligations, and (vii) by reason of applicable law,
Company will not, and will not permit any of
97
its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (a) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Company or any other Subsidiary
of Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (c) make loans or advances to
Company or any other Subsidiary of Company, or (d) transfer any of its property
or assets to Company or any other Subsidiary of Company.
7.3 INVESTMENTS; JOINT VENTURES.
A. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of Company;
(iii) Company and its Wholly Owned North American
Subsidiaries may make intercompany loans to the extent permitted under
subsection 7.1(iv);
(iv) Company and its Wholly Owned North American
Subsidiaries may make and continue to own equity Investments in any Person
which, prior to the making of such Investments, is a Wholly Owned North American
Subsidiary of Company;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3A(v) annexed hereto;
(vi) Company and its Subsidiaries may make Investments
constituting (a) accounts receivable arising in the ordinary course of business,
(b) prepaid film rentals, (c) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of business or
(d) refundable construction advances made with respect to the construction of
properties that are to be used in the business of Company or its Wholly Owned
North American Subsidiaries and that are not outstanding more than one year from
the date made; provided that any Investments made pursuant to the preceding
clause (d) that are not repaid within one year of being made shall be deemed to
be Permitted Investments for the purpose of calculating compliance with
subsection 7.3A(viii) and subsection 7.7(iii);
(vii) Company and its Subsidiaries may make Investments
constituting (a) payroll advances, (b) travel and entertainment advances and (c)
relocation loans to officers and employees of Company or any of its Subsidiaries
in the ordinary course of business; provided, that the aggregate amount of
Investments permitted under this clause shall not exceed $2,500,000 or the
Equivalent Amount in any other currency at any time outstanding;
(viii) Company and its Wholly Owned North American
Subsidiaries may make and continue to own Permitted Investments and Permitted
Acquisitions; provided that Company and its Wholly Owned North American
Subsidiaries shall not (a) make Permitted
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Investments in an aggregate amount (net of the amount of loans, advances and
Contingent Obligations constituting Permitted Investments that are repaid,
released or cancelled, as the case may be, during the term of this Agreement) in
excess of $8,000,000 or the Equivalent Amount in any other currency in any
Fiscal Year (the amount of such Permitted Investments made in such Fiscal Year
being the "INVESTMENT EXPENDITURE AMOUNT") and (b) make Permitted Acquisitions
in any Fiscal Year in an aggregate amount in excess of the difference between
(1) $25,000,000 or the Equivalent Amount in any currency and (2) the sum of (A)
the Investment Expenditure Amount for such Fiscal Year plus (B) the amount of
Consolidated New Build Capital Expenditures for such Fiscal Year (the amount of
such Permitted Acquisitions made in such Fiscal Year being the "ACQUISITION
EXPENDITURE AMOUNT," and together with the Investment Expenditure Amount, the
"INVESTMENT/ACQUISITION EXPENDITURE AMOUNT");
(ix) Company and its Wholly Owned Subsidiaries may make
Investments constituting loans and/or advances to Joint Ventures directly owned
by any of them in an aggregate amount not to exceed at any time $2,000,000 for
the operating needs in the ordinary course of business of such Joint Ventures;
(x) Company and its Wholly Owned North American
Subsidiaries may make and continue to own Investments in Megabox Cineplex, Inc.;
provided that (a) the aggregate amount of such Investments does not exceed
$25,000,000 and (b) the sole source of funds for such Investments is Cash common
equity contributions to Company by Sponsors; and
(xi) any Off-Balance Sheet Subsidiary may make and
continue to own Investments in other Off-Balance Sheet Subsidiaries.
provided that the foregoing shall not prohibit any Subsidiary of Company from
making dividends or distributions to Company or any Wholly Owned North American
Subsidiary of Company; and provided further that any Investment which when made
complies with the requirements of the definition of the term Cash Equivalent may
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements.
B. Notwithstanding anything to the contrary contained in
subsection 7.3A, Company and its Subsidiaries shall not (i) make any Investment
in any Joint Venture if, upon the making of such Investment, such Joint Venture
is or becomes a Subsidiary of Company or any of its Subsidiaries or (ii) make
any Investment in any Person listed on Schedule 7.3B.
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of letters of credit
issued under the Priority Secured Credit Agreement;
(ii) Company may become and remain liable with respect to
Contingent Obligations arising under the Company Guaranty, and each Subsidiary
Guarantor
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may become and remain liable with respect to Contingent Obligations arising
under the Subsidiary Guaranty;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in connection
with Asset Sales or other sales of assets;
(iv) (a) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of any
Indebtedness of Company or any of its Wholly Owned North American Subsidiaries
and (b) Company and its Subsidiaries may become and remain liable with respect
to Contingent Obligations in respect of any Indebtedness, Operating Leases or
other obligations of any Joint Venture or non-Wholly Owned Subsidiary (other
than an Off-Balance Sheet Subsidiary); provided that the aggregate maximum
liability of Company and its Subsidiaries with respect to the Contingent
Obligations permitted under the preceding clause (b) shall not exceed $8,000,000
or the Equivalent Amount in any other currency at any time; provided further
that the aggregate maximum liability of Company and its Subsidiaries with
respect to the Contingent Obligations permitted under the preceding clause (b)
shall be deemed to be a "Permitted Investment" for purposes of calculating
compliance with subsection 7.3A(viii) and subsection 7.7(iii) but shall cease to
be included in such calculation upon the permanent release or cancellation of
such Contingent Obligations.
(v) Company and its Subsidiaries may remain liable with
respect to the Contingent Obligations existing on the Closing Date set forth in
Schedule 7.4(v);
(vi) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations (other than Contingent
Obligations in respect of any Indebtedness or other obligation of any
Off-Balance Sheet Subsidiary); provided that the maximum aggregate liability,
contingent or otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations shall at no time exceed $20,000,000 or the Equivalent
Amount in any other currency;
(vii) Company and its Subsidiaries may become and remain
liable with respect to guarantees of Operating Leases, construction contracts
and other contracts and agreements of Company and its Wholly Owned North
American Subsidiaries entered into the ordinary course of business of Company
and its Wholly Owned North American Subsidiaries;
(viii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of Currency Agreements
and Interest Rate Agreements (other than Currency Agreements and Interest Rate
Agreements of any Off-Balance Sheet Subsidiary), in each case to the extent the
counterparty to any such Currency Agreements and Interest Rate Agreements is (or
at the time such Currency Agreement or Interest Rate Agreement was entered into,
was) a Lender or an Affiliate of a Lender;
(ix) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of leases assumed by
other Persons (other than Off-Balance Sheet Subsidiaries) in connection with
theatres that are sold or closed by Company or
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any of its Subsidiaries, in each case to the extent Company or any of its
Subsidiaries remains liable for any deficiencies thereunder; and
(x) Company's Subsidiaries may become and remain liable
with respect to Contingent Obligations, on a subordinated basis, with respect to
Subordinated Indebtedness incurred by Company pursuant to subsection 7.1(xiii).
7.5 RESTRICTED JUNIOR PAYMENTS; CERTAIN OTHER PAYMENTS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that so long as no Potential
Event of Default or Event of Default has occurred and is continuing or would
result therefrom, Company may purchase, redeem, acquire, cancel or otherwise
retire for value shares of capital stock of Company, or warrants or options on
any such shares or related stock appreciation rights, phantom shares or similar
securities, in each case that are owned by officers or employees (or their
estates or beneficiaries under their estates), upon the death, disability,
retirement, termination of employment or pursuant to the terms of the stock
option plan or any other agreement under which such shares of capital stock,
warrants, options, related rights, phantom shares or similar securities were
issued or under which they may be put or called; provided further that the
aggregate cash consideration paid for such purchase, redemption, acquisition,
cancellation or other retirement for value of such shares of capital stock,
options, related rights or similar securities shall not exceed $10,000,000
during the term of this Agreement.
7.6 FINANCIAL PERFORMANCE COVENANTS.
A. Maximum Leverage Ratio. Company shall not permit the
Leverage Ratio, calculated on a Pro Forma Basis, for any four Fiscal Quarter
period ending during any of the periods set forth below to exceed the
correlative ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
Closing Date - August 31, 2003 5:15 : 1:00
September 1, 2003 - August 31, 2004 4:50 : 1.00
September 1, 2004 - August 31, 2005 4.00 : 1.00
September 1, 2005 - August 31, 2006 3.25 : 1.00
September 1, 2006 and thereafter 2.75 : 1.00
B. Minimum Debt Service Coverage Ratio. Company shall not
permit the Debt Service Coverage Ratio, calculated on a Pro Forma Basis, for any
four Fiscal Quarter period ending during any of the periods set forth below to
be less than the correlative ratio indicated.
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MINIMUM DEBT
PERIOD SERVICE COVERAGE RATIO
Closing Date - February 28, 2006 1.25 : 1.00
March 1, 2006 and thereafter 1.10 : 1.00
C. Company's Rights to Cure.
(i) Financial Performance Covenants. If Company fails to
comply with the requirements of a Financial Performance Covenant, until the
expiration of the 10th day subsequent to the date the Compliance Certificate
calculating such covenant is due pursuant to subsection 6.1(iv) and so long as
no Cure Rights Prohibition Period shall be in effect, Company shall have Cure
Rights, and upon the receipt by Company of Cash following the exercise of such
Cure Rights, the Financial Performance Covenants shall be recalculated giving
effect to one of the following pro forma adjustments specified by Company:
(a) Wholly Owned EBITDA shall be increased by the lesser
of (1) the Cure Amount and (2) an amount equal to 10% of Wholly Owned
EBITDA for the four Fiscal Quarter period utilized in determining
compliance with the Financial Performance Covenant (before giving
effect to the increase in Wholly Owned EBITDA made by the addition of
the Cure Amount); or
(b) provided that the Cure Amount is applied to prepay
the Loans in accordance with subsection 2.4B(ii)(f), Wholly Owned
Total Debt shall be reduced by the amount of the Cure Amount.
If, after giving effect to the foregoing recalculations, Company shall then be
in compliance with the requirements of all Financial Performance Covenants,
Company shall be deemed to have satisfied the requirements of the Financial
Performance Covenants as of the relevant date of determination with the same
effect as though there was no failure to comply therewith at such date, and any
breach or default of the Financial Performance Covenants theretofore occurring
as of the relevant date of determination (but not with respect to any preceding
date of determination) shall be deemed cured for all purposes of this Agreement.
If Company shall have satisfied the requirements of the Financial Performance
Covenants by deeming the Cure Amount to increase Wholly Owned EBITDA pursuant to
subsection 7.6C(i)(a), until such time as Company is in compliance with the
Financial Performance Covenants without the making of any Cure Contribution,
Company may not borrow US Tranche Revolving Loans (as defined in the Priority
Secured Credit Agreement) or CN Tranche Revolving Loans (as defined in the
Priority Secured Credit Agreement) during the period from the date of the making
of such Cure Contribution through the time of such compliance in excess of an
aggregate amount (determined without giving effect to any repayments or
prepayments) equal to two times such Cure Contribution.
(ii) Limitation on Exercise of Cure Rights. Company shall
have the right to exercise Cure Rights during up to two consecutive Fiscal
Quarters and not again thereafter until the expiration of the Cure Rights
Prohibition Period; provided that in no event
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shall Company be entitled to exercise Cure Rights more than four times during
the term of this Agreement.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of its Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sub-lessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any portion of its business, property or fixed assets,
whether now owned or hereafter acquired, or acquire by purchase or otherwise all
or any portion of the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Wholly Owned North American Subsidiary of Company
may be merged with or into Company or any Wholly Owned North American Subsidiary
of Company, or may be liquidated, wound up or dissolved, or all or any part of
its business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Company or any Wholly Owned North American Subsidiary of Company; provided that,
in the case of such a merger, Company or such Wholly Owned North American
Subsidiary shall be the continuing or surviving corporation;
(ii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales; provided
that the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(iii) Company and its Subsidiaries may make Permitted
Acquisitions and Permitted Investments to the extent permitted by subsection
7.3A(viii);
(iv) Company and its Subsidiaries may make Asset Sales of
the assets listed on Schedule 1.1C; provided that (a) until the aggregate,
cumulative amount of Net Asset Sale Proceeds from such Asset Sales exceeds the
West 34th Street Loan Amount, (1) Company shall use such Net Asset Sale Proceeds
to repay Priority Secured Revolving Loans (but not reduce the Priority Secured
Revolving Loan Commitments) in accordance with the Priority Secured Credit
Agreement and (2) to the extent such Net Asset Sale Proceeds exceed the amount
of Priority Secured Revolving Loans outstanding at the time Company receives
such Net Asset Sale Proceeds, Company may retain such excess, and (b) the
aggregate, cumulative amount of Net Asset Sale Proceeds from such Asset Sales in
excess of the West 34th Street Loan Amount shall be applied as a mandatory
prepayment in accordance with subsection 2.4B(ii)(a);
(v) Company and its Subsidiaries may make Asset Sales of
assets having a fair market value not in excess of $10,000,000 in any individual
case or $30,000,000 in the aggregate, in each case in compliance with subsection
2.4B(ii)(a); provided that (a) the consideration received for such assets shall
be in an amount at least equal to the fair market value thereof, (b) at least
90% of the consideration received shall be cash and (c) the proceeds of such
Asset Sales shall be applied as required by subsection 2.4B(ii)(a);
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(vi) Company may cause the dissolution of any Subsidiary
to the extent permitted by subsection 6.2; and
(vii) Company and its Wholly-Owned North American
Subsidiaries may make Asset Swaps; provided that each of the following
conditions is satisfied: (a) the aggregate fair market value (as determined in
good faith by the Board of Directors of Company) of such Asset Swaps shall not
exceed $25,000,000 in any Fiscal Year or $75,000,000 during the life of this
Agreement; (b) the fair market value of the assets received (including Cash not
exceeding 5% of such value) pursuant to such Asset Swap (the "ACQUIRED ASSETS")
shall be equal to at least the fair market value (as determined in good faith by
the Board of Directors of Company) of the assets transferred pursuant to such
Asset Swap (the "TRANSFERRED ASSETS"); (c) the cash portion of any consideration
received by Company or any of its Subsidiaries shall be used to make a mandatory
prepayment in accordance with subsection 2.4B(ii)(a); (d) the Acquired Assets
shall at all times be subject to a Second Priority Lien of Lenders pursuant to
the Collateral Documents; (e) immediately prior to the consummation of such
Asset Swap, Company shall certify to Administrative Agent, and Administrative
Agent shall be satisfied in its sole discretion, that, after giving effect to
such Asset Swap on a pro forma basis, Company and its Wholly-Owned North
American Subsidiaries will be Solvent; and (f) both before and immediately after
consummation of such Asset Swap, no Default or Potential Event of Default shall
have occurred and be continuing.
7.8 FISCAL YEAR.
Company shall not change its Fiscal Year-end from February 28
or February 29, as the case may be, of each calendar year.
7.9 SALE OR DISCOUNT OF RECEIVABLES.
Except as set forth in Schedule 7.9, Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable other than (A) sales for collection of
defaulted receivables over 120 days past due, (B) fees and expenses incurred in
the ordinary course of business in connection with the processing of credit card
transactions and (C) the monetization of receivables received by Company or any
of its Subsidiaries in connection with any Asset Sale.
7.10 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Except for the transactions described on Schedule 7.10,
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any material transaction (including,
without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any class of equity
Securities of Company, any Affiliate of Company or of any such holder or any of
Company's Off-Balance Sheet Subsidiaries or Joint Ventures, on terms that are
less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time in a comparable arms-length transaction from
Persons who are not such a holder, Affiliate, Off-Balance Sheet Subsidiary or
Joint Venture; provided that the foregoing restriction shall not apply to (i)
any
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transaction between Company and any of its Wholly Owned North American
Subsidiaries or between any of its Wholly Owned North American Subsidiaries;
(ii) reasonable and customary fees paid to members of the Boards of Directors of
Company and its Subsidiaries to Persons not employed by or associated with the
Sponsors or their respective Affiliates; (iii) Restricted Junior Payments
permitted by subsection 7.5, or (iv) the issuance of Permitted Cure Securities
upon the exercise of Cure Rights pursuant to subsection 7.6C and the payment of
non-cash pay-in-kind dividends and interest on such Permitted Cure Securities.
Notwithstanding the foregoing sentence, provided that the Applicable Leverage
Ratio is less than 3.50:1.00 and no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby, Company may
pay Management Fees in an aggregate amount of up to $5,000,000 in any Fiscal
Year, and any Management Fees not paid in cash because of the foregoing
restrictions or otherwise may accrue pursuant to provisions approved by
Administrative Agent subordinating such Management Fees to the prior payment in
full of the Obligations and the obligations relating to the Priority Secured
Credit Agreement and such accrued Management Fees may thereafter be paid in Cash
so long as (x) after paying such Management Fees and giving pro forma effect
thereto, Company is in compliance with all covenants under this Agreement, (y)
the Applicable Leverage Ratio after giving pro forma effect to such payment does
not exceed 3.50:1.00, and (z) Company shall deliver to Administrative Agent an
Officer's Certificate executed by its chief financial officer certifying as to
the matters in clauses (x) and (y) above and further stating that, after giving
effect to the Cash payment of such Management Fees, Company shall be able to
make the scheduled payments of principal and interest hereunder and under the
Priority Secured Credit Agreement.
7.11 DISPOSAL OF SUBSIDIARY STOCK.
Except pursuant to the Collateral Documents and except for any
sale (x) of 100% of the capital stock or other equity Securities of any of its
Subsidiaries in compliance with the provisions of subsections 2.4B(ii) and 7.7
and (y) in connection with the formation or sale of interests in Joint Ventures
and non-Wholly Owned Subsidiaries in compliance with subsections 2.4B(ii) and
7.7, Company shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if required
by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries (including
such Subsidiary), except to Company, to a Wholly Owned North American Subsidiary
of Company, or to qualify directors if required by applicable law.
7.12 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than (i) the
business of operating movie theatres and similar or related businesses and (ii)
such other lines of business as may be consented to in writing by Requisite
Lenders.
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7.13 CAPITAL EXPENDITURES.
A. Maximum Maintenance Capital Expenditures. Company shall
not, and shall not permit any of its Subsidiaries to, make Maintenance Capital
Expenditures in any Fiscal Year in excess of $10,000,000; provided that if the
aggregate amount of Maintenance Capital Expenditures made by Company and its
Subsidiaries in any Fiscal Year is less than $10,000,000, the amount of
Maintenance Capital Expenditures Company and its Subsidiaries shall be permitted
to make in the immediately succeeding Fiscal Year shall be increased by such
difference.
B. Maximum Consolidated New Build Capital Expenditures.
(i) Company shall not, and shall not permit any of its
Subsidiaries to, make Consolidated New Build Capital Expenditures in any Fiscal
Year in excess of the difference between (x) $25,000,000 (the "CONSOLIDATED NEW
BUILD CAPITAL EXPENDITURE ALLOWANCE") and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of subsection 7.3A(vi); provided that:
(a) the Consolidated New Build Capital Expenditure
Allowance for any particular Fiscal Year shall be increased to
(1) if the CapEx Referenced Leverage Ratio is less than
3.50:1.00 but greater than or equal to 3.00:1.00, $40,000,000,
(2) if the CapEx Referenced Leverage Ratio is less than
3.00:1.00 but greater than or equal to 2.50:1.00, $60,000,000
and (3) if the CapEx Referenced Leverage Ratio is less than
2.50:1.00, $75,000,000; and
(b) the Consolidated New Build Capital Expenditure
Allowance for any particular Fiscal Year shall be increased by
an amount equal to (1) if the CapEx Referenced Leverage Ratio
is greater than or equal to 3.50:1.00, the first $25,000,000
of Retained Proceeds Available for CapEx or (2) if the CapEx
Referenced Leverage Ratio is less than 3.50:1.00, 100% of
Retained Proceeds Available for CapEx;
(ii) Notwithstanding subsection 7.13B(i), Company and its
Subsidiaries may make, during the Fiscal Year ending February 28, 2003, the
Scheduled 2003 New Build Capital Expenditures.
C. Maximum Off-Balance Sheet New Build Capital Expenditures.
Company shall not permit any of its Off-Balance Sheet Subsidiaries to incur
Off-Balance Sheet New Build Capital Expenditures in any Fiscal Year in an amount
exceeding 150% of the Consolidated New Build Capital Expenditure Allowance for
such Fiscal Year.
D. Maximum Aggregate New Build Capital Expenditures.
Notwithstanding anything in subsection 7.13B or 7.13C to the contrary, Company
shall not, and shall not permit any of its Subsidiaries to, incur New Build
Capital Expenditures during any Fiscal Year in an aggregate amount in excess of
(i) if the CapEx Referenced Leverage Ratio is equal to or greater than
3.50:1.00, the difference between (x) $75,000,000 and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of
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subsection 7.3(A)(vi) or (ii) if the CapEx Referenced Leverage Ratio is less
than 3.50:1.00, the difference between (x) $100,000,000 and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of subsection 7.3(A)(vi) (the maximum amount permitted in the foregoing
clause (i) or (ii), the "AGGREGATE CAPITAL EXPENDITURE LIMIT"); provided that if
the aggregate amount of New Build Capital Expenditures made in any Fiscal Year
is less than the amount set forth in the forgoing clause (i) or (ii), as
applicable, then the Aggregate Capital Expenditure Limit for the immediately
succeeding Fiscal Year shall be increased (a) if the CapEx Referenced Leverage
Ratio for such succeeding Fiscal Year is equal to or greater than 3.50:1.00, the
first $25,000,000 of such difference or (b) if such CapEx Referenced Leverage
Ratio is less than 3.50:1.00, by the first $40,000,000 of such difference.
7.14 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED
INDEBTEDNESS AND ORGANIZATIONAL DOCUMENTS.
A. Company shall not, nor shall it permit any of its
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness (or any documents, instruments or agreements pursuant to which such
Subordinated Indebtedness is issued) or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the interest rate on such Subordinated Indebtedness, change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with
respect thereto (other than to eliminate any such event of default or increase
any grace period related thereto), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions thereof (or
of any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or change, together
with all other amendments or changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Subordinated Indebtedness (or a trustee or other representative
on their behalf) which would be adverse to any Loan Party, Administrative Agent
or any Lender.
B. Company shall not, and shall not permit any of its
Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, its Certificate or Articles of Incorporation, Certificate
of Formation, Bylaws, Operating Agreement, Limited Liability Company Agreement,
Certificate of Limited Partnership, Agreement of Limited Partnership or other
organizational documents (other than amendments or waivers that individually, or
together with all other amendments and waivers made, would not be adverse to any
Loan Party, Administrative Agent or any Lender) without, in each case, obtaining
the written consent of Administrative Agent and Requisite Lenders to such
amendment or waiver.
7.15 CCAA PLAN OF ARRANGEMENT.
Company shall not permit the aggregate amount of Cash used to
pay allowed claims of Persons that are not Affiliates of Cineplex Odeon under
the CCAA Plan of Arrangement to exceed $30,000,000.
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SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal on any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by
Company to pay any interest on any Loan or any fee or any other amount due under
this Agreement within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when
due any principal of or interest on one or more items of Indebtedness (other
than Indebtedness referred to in subsection 8.1) or Contingent Obligations in an
individual principal amount of $5,000,000 or the Equivalent Amount in any other
currency or more or with an aggregate principal amount of $10,000,000 or the
Equivalent Amount in any other currency or more, in each case beyond the end of
any grace period provided therefor; or (ii) breach or default by Company or any
of its Subsidiaries with respect to any other material term of (a) one or more
items of Indebtedness or Contingent Obligations in the individual or aggregate
principal amounts referred to in clause (i) above or (b) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of Indebtedness
or Contingent Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.4, 2.5, 6.2, 6.11, 6.15 or Section 7 of this
Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Term Loan Document or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER TERM LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Term
Loan Documents, other than any such term referred to in any other subsection of
this Section 8, and such default shall not have been remedied or waived within
30 days after the earlier of (i) an officer of such Loan Party becoming
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aware of such default or (ii) receipt by Company or such Subsidiary of notice
from Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company or any of its Significant
Subsidiaries in an involuntary case or similar proceeding under the Bankruptcy
Code or under any other Insolvency Laws which decree or order is not stayed; or
any other similar relief shall be granted under any applicable Insolvency Laws;
or (ii) an involuntary case or similar proceeding shall be commenced against
Company or any of its Significant Subsidiaries under the Bankruptcy Code or
under any other Insolvency Laws; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Company or any of its Significant Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment or similar proceeding of an interim receiver, trustee or
other custodian of Company or any of its Significant Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Significant Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days without being
dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Significant Subsidiaries shall have
an order for relief entered with respect to it or commence a voluntary case or
similar proceeding under the Bankruptcy Code or under any other Insolvency Laws,
or shall consent to the entry of an order for relief in an involuntary case or
similar proceeding, or to the conversion of an involuntary case or similar
proceeding to a voluntary case or similar proceeding, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Company or
any of its Significant Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Company or any of its Significant Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors of Company or any
of its Significant Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $5,000,000
or the Equivalent Amount in any other currency or (ii) in the aggregate at any
time an amount in excess of $10,000,000 or the Equivalent Amount in any other
currency (in either case not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against Company or any of its Significant Subsidiaries or any
of their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to
the date of any proposed sale thereunder); or
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8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its Significant Subsidiaries decreeing the dissolution or split up or
similar proceeding of Company or that Significant Subsidiary and such order
shall remain undischarged or unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or would reasonably be expected to result in
liability of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $15,000,000 or the Equivalent Amount in any other
currency during the term of this Agreement; or there shall exist an amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds $20,000,000 or the Equivalent Amount in any
other currency; or
8.11 CHANGE IN CONTROL.
There shall have occurred a Change of Control; or
8.12 INVALIDITY OF SUBSIDIARY GUARANTY.
The Subsidiary Guaranty for any reason, other than the
satisfaction in full of all Obligations or the release of the Subsidiary
Guaranty in accordance with its terms and the terms of this Agreement, ceases to
be in full force and effect (other than in accordance with its terms) or is
declared to be null and void, or any Loan Party denies that it has any further
liability, including, without limitation, with respect to future advances by
Lenders, under any Term Loan Document to which it is a party, or gives notice to
such effect; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in
full force and effect (other than by reason of a release of Collateral in
accordance with the terms thereof) or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Loan Party, or
Collateral Agent shall not have or cease to have a valid and perfected Second
Priority security interest in the Collateral securing the Obligations (other
than as a result of a failure by the relevant recording office to record or to
register any material Closing Date Mortgage or Additional Mortgage (such
materiality to be determined individually and in the aggregate):
THEN (i) upon the occurrence of any Event of Default described
in subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, and (b) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Company,
and the obligation of each Lender to make any Loan shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of
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Requisite Lenders, by written notice to Company, declare all or any portion of
the amounts described in clauses (a) through (b) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan, shall thereupon terminate.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended to
benefit Company and do not grant Company the right to require Lenders to rescind
or annul any acceleration hereunder, even if the conditions set forth herein are
met.
SECTION 9. ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
BTCo is hereby appointed Administrative Agent and Collateral
Agent hereunder by each Lender and each Lender hereby authorizes Administrative
Agent to act hereunder and under the other Term Loan Documents (including
without limitation the Subsidiary Guaranty, the Collateral Documents and the
Intercreditor Agreement) and authorizes Collateral Agent to act under the Term
Loan Documents (including, without limitation, the Subsidiary Guaranty, the
Collateral Documents and the Intercreditor Agreement). Administrative Agent
agrees to act upon the express conditions contained in this Agreement and the
other Term Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Administrative Agent and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties as Administrative Agent under this
Agreement, Administrative Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
For the purposes of holding any security granted by any of Company or its
Subsidiaries pursuant to the laws of the Province of Quebec, Collateral Agent is
hereby appointed by each Lender as the holder of an irrevocable power of
attorney or fonde de pouvoir (within the meaning of Article 2692 of the Civil
Code of Quebec) for all present and future Lenders, and Collateral Agent hereby
accepts such appointment. By executing an Assignment Agreement, any future
Lender shall be deemed to ratify the power of attorney or fonde de pouvoir
(within the meaning of Article 2692 of the Civil Code of Quebec) granted to
Collateral Agent hereunder.
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9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably
authorizes Administrative Agent to take such action on such Lender's behalf and
to exercise such powers, rights and remedies hereunder and under the other Term
Loan Documents as are specifically delegated or granted to Administrative Agent
by the terms hereof and thereof, together with such powers, rights and remedies
as are reasonably incidental thereto. Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Term Loan Documents. Administrative Agent may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees, including, without limitation, appointing an agent to act as
collateral agent in any jurisdiction where such appointment is necessary or
desirable to comply with local law. Administrative Agent shall not have, by
reason of this Agreement or any of the other Term Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Term Loan Documents, expressed or implied, is intended to or shall be
so construed as to impose upon Administrative Agent any obligations in respect
of this Agreement or any of the other Term Loan Documents except as expressly
set forth herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Term Loan Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statements or in any financial or other statements, instruments, reports
or certificates or any other documents furnished or made by Administrative Agent
to Lenders or by or on behalf of Company to Administrative Agent or any Lender
in connection with the Term Loan Documents and the transactions contemplated
thereby or for the financial condition or business affairs of Company or any
other Person liable for the payment of any Obligations, nor shall Administrative
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Term Loan Documents or as to the use of the proceeds of the Loans or
the use of the Letters of Credit or as to the existence or possible existence of
any Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, Administrative Agent shall not have
any liability arising from confirmations of the amount of outstanding Loans or
the Letter of Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor
any of its officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by Administrative Agent or any other agent under
or in connection with any of the Term Loan Documents except to the extent caused
by Administrative Agent's gross negligence or willful misconduct. If
Administrative Agent shall request instructions from Lenders with respect to any
act or action (including the failure to take an action) in connection with this
Agreement or any of the other Term Loan Documents, Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until
Administrative Agent shall have received instructions from Requisite Lenders.
Without prejudice to the generality of the foregoing, (i) Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on
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opinions and judgments of attorneys (who may be attorneys for Company and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Term
Loan Documents in accordance with the instructions of Requisite Lenders.
Administrative Agent shall be entitled to refrain from exercising any power,
discretion or authority vested in it under this Agreement or any of the other
Term Loan Documents unless and until it has obtained the instructions of
Requisite Lenders.
D. Administrative Agent Entitled to Act as Lender. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company or any of its Subsidiaries for services in connection with this
Agreement and otherwise without having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the creditworthiness
of Company and its Subsidiaries. Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent, to the extent that Administrative
Agent shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Administrative Agent in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Term
Loan Documents or otherwise in its capacity as Administrative Agent in any way
relating to or arising out of this Agreement or the
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other Term Loan Documents; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Administrative
Agent's gross negligence or willful misconduct. If any indemnity furnished to
Administrative Agent for any purpose shall, in the opinion of Administrative
Agent, be insufficient or become impaired, Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
9.5 SUCCESSOR AGENT.
Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Company, and Administrative Agent
may be removed at any time with cause by an instrument or concurrent instruments
in writing delivered to Company and Administrative Agent and signed by Requisite
Lenders. Upon any such notice of resignation or any such removal, Requisite
Lenders shall have the right, upon five Business Days' notice to Company, to
appoint a successor Administrative Agent to the retiring or removed
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent to the retiring or removed
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as an Administrative Agent, the provisions of this Section
9 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement.
9.6 INTERCREDITOR AGREEMENT; COLLATERAL DOCUMENTS AND
SUBSIDIARY GUARANTY.
Each Lender hereby authorizes Administrative Agent and
Collateral Agent to enter into the Intercreditor Agreement on behalf of and for
the benefit of that Lender, and agrees to be bound by the terms of the
Intercreditor Agreement. Collateral Agent shall be entitled to all limitations
on liability and indemnification set forth in the Intercreditor Agreement, and
each Lender acknowledges it has provided such benefits to the Collateral Agent
to the extent such Lender is a "Secured Party" under the Intercreditor
Agreement. Each Lender hereby further authorizes Collateral Agent to enter into
each Collateral Document as secured party on behalf of and for the benefit of
Lenders and agrees to be bound by the terms of each Collateral Document;
provided that, subject to any provision of subsection 10.6 requiring the consent
of any additional Lenders, Collateral Agent shall not enter into or consent to
any amendment, modification, termination or waiver of any provision contained in
any Collateral Document, the Intercreditor Agreement or the Subsidiary Guaranty
without the prior consent of Administrative Agent (acting on behalf of Requisite
Lenders), but Collateral Agent may (i) release any Lien covering any items of
Collateral that are the subject of a sale or other disposition of assets
permitted by this Agreement or to which Requisite Lenders have consented and
(ii) release any Subsidiary Guarantor from the Subsidiary Guaranty if all of the
capital stock of such Subsidiary Guarantor is sold to a Person that is not any
Affiliate of Company pursuant to a sale or other disposition permitted hereunder
or to which Requisite Lenders have consented. Anything contained in any of the
Term Loan Documents to the contrary notwithstanding, each Lender agrees that no
Lender
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shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce the Subsidiary Guaranty, it being
understood and agreed that all rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Collateral
Agent for the benefit of Lenders in accordance with the terms of the Collateral
Documents and the Intercreditor Agreement.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. General. Subject to subsection 10.1B, each Lender shall
have the right at any time to (i) sell, assign or transfer to any Eligible
Assignee, or (ii) sell participations to any Person in any Loan or Loans made by
it or any other interest herein or in any other Obligations owed to it; provided
that no such sale, assignment, transfer or participation shall, without the
consent of Company, require Company to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided
further that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until an appropriate Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii); provided still further that no Lender shall sell any participation to
a Person that is unable to comply with the requirements of subsection
2.7B(iii)(a). Except as otherwise provided in this subsection 10.1, no Lender
shall, as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of the Loans or the other Obligations owed to
such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Loan or other
Obligation may (a) be assigned in any amount to another Lender, or to an
Affiliate or Affiliated Fund of the assigning Lender or another Lender, with the
giving of notice to Company and Administrative Agent or (b) be assigned in an
aggregate amount of not less than $1,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Loans and other Obligations of the
assigning Lender) to any other Eligible Assignee with the consent of
Administrative Agent (which consent shall not be unreasonably withheld) and, so
long as no Event of Default shall have occurred and be continuing, Company
(which consent shall not be unreasonably withheld); provided that it is hereby
acknowledged and agreed that (x) Company's right to consent to a proposed
assignment shall be limited to whether or not the proposed assignee is an
Eligible Assignee. To the extent of any such assignment in accordance with
either clause (a) or (b) above, the assigning Lender shall be relieved of its
obligations with respect to its Loans or other Obligations or the portion
thereof so assigned. The parties to each such assignment shall execute and
deliver to Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing and recordation
fee of $3,500 and such forms, certificates or other evidence, if any, with
respect to United States federal income Tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to Administrative
Agent and Company pursuant to subsection 2.7B(iii)(a). Upon such execution,
delivery, acceptance and recordation, from and after the effective date
specified in
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such Assignment Agreement, (y) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment Agreement, shall have the rights and obligations
of a Lender hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights and be released from its
obligations under this Agreement, subject to subsection 10.9B (and, in the case
of an Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto). The Restructured Term Loan Commitments hereunder shall be
modified to reflect the Restructured Term Loan Commitment of such assignee and
any remaining Restructured Term Loan Commitment of such assigning Lender and, if
any such assignment occurs after the issuance of the Notes hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Administrative
Agent for cancellation, and thereupon new Notes shall be issued to the assignee
and/or to the assigning Lender, substantially in the form of Exhibit III-A or
Exhibit III-B annexed hereto, as the case may be, with appropriate insertions,
to reflect the Loans, of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection 10.1B(i) and
any forms, certificates or other evidence with respect to Tax withholding
matters that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment evidenced
thereby (in each case to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence any
required consent of Administrative Agent to such assignment), (b) record or
cause the recordation of the information contained therein in the Register, and
(c) give prompt notice thereof to Company. Administrative Agent shall maintain a
copy of each Assignment Agreement delivered to and accepted by it as provided in
this subsection 10.1B(ii).
(iii) If any Lender shall be or become a Competitor, then
Company shall have the right but not the obligation, upon notice to such Lender
and the Administrative Agent, to replace such Lender with an Eligible Assignee
(a "REPLACEMENT LENDER") acceptable to Company and the Administrative Agent
(such consent not to be unreasonably withheld or delayed; provided that no such
consent shall be required if the Replacement Lender is an existing Lender).
Subject to the preceding sentence, each such Lender which is a Competitor hereby
agrees to transfer and assign all of its Restructured Term Loan Commitments,
Loans or other Obligations owed to it to such Replacement Lender in accordance
with subsection 10.1B(i) and (ii); provided, however, that (a) such assignment
shall be without recourse, representation or warranty (other than to the effect
that such Lender owns the Restructured Term Loan Commitments and Loans or other
Obligations being assigned, free and clear of any Liens) and (b) the purchase
price paid by the Replacement Lender shall be in the aggregate amount of such
Lender's Loans, together with all accrued and unpaid interest and fees in
respect thereof, plus all other amounts, owing to such Lender hereunder. Upon
any such termination or assignment, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of any provisions of this
Agreement which by their terms survive the termination of this Agreement.
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(iv) Upon the effective date of an assignment described in
clause (iii), Company shall issue a replacement Note or Notes, as the case may
be, to such Replacement Lender and such Replacement Lender shall become a
"Lender" for all purposes under this Agreement and the other Term Loan
Documents.
C. Participations. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
and all amounts payable by Company hereunder (including, without limitation,
amounts payable to such Lender pursuant to subsections 2.6D and 2.7) shall be
determined as if such Lender had not sold such participation. Company and each
Lender hereby acknowledges and agrees that, solely for purposes of subsections
10.4 and 10.5, (a) any participation will give rise to a direct obligation of
Company to the participant and (b) the participant shall be considered to be a
"Lender."
D. Assignments to Federal Reserve Banks and Trustees. In
addition to the assignments and participations permitted under the foregoing
provisions of this subsection 10.1, any Lender may assign and pledge all or any
portion of its Loans, the other Obligations owed to such Lender, and its Notes
to (i) any Federal Reserve Bank as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve Bank and (ii) if such Lender is a fund,
(A) the trustee of such Lender as collateral security for the benefit of such
Lender's investors or (B) to a collateral agent providing credit or credit
support to such Lender; provided that (x) no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any such assignment and pledge and (y) in no event shall such Federal Reserve
Bank or trustee be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Term Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the reasonable
costs of furnishing all opinions by counsel for Company (including, without
limitation, any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Term Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Administrative Agent
and Collateral Agent (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Term Loan Documents and any consents, amendments, waivers or other
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modifications thereto and any other documents or matters requested by Company;
(iv) all the actual costs and reasonable expenses of creating and perfecting
Liens in favor of Collateral Agent on behalf of Lenders pursuant to the Term
Loan Documents, including without limitation costs of conducting record
searches, examining Collateral, opening bank accounts and lockboxes, depositing
checks, receiving and transferring funds (including charges for checks for which
there are insufficient funds), and fees and Taxes in connection with the filing
of financing statements, costs of preparing and recording Term Loan Documents,
fees and expenses of counsel for providing such opinions as Administrative
Agent, Collateral Agent or Requisite Lenders may reasonably request, and fees
and expenses of legal counsel to Administrative Agent; (v) all other actual and
reasonable costs and expenses incurred by Administrative Agent and Collateral
Agent in connection with the negotiation, preparation and execution of the Term
Loan Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (vi) after the occurrence
of an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by Administrative Agent, Collateral Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other Term Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Administrative Agent
and Lenders, and the officers, directors, employees, agents and affiliates of
Administrative Agent and Lenders (collectively called the "INDEMNITEES") from
and against any and all other liabilities, obligations, losses, damages, Covered
Taxes, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including, without limitation, securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of this Agreement or the other Term Loan Documents or the
transactions contemplated hereby or thereby (including, without limitation,
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds of any of the Loans) or the statements contained in the commitment
letter delivered by any Lender to Company with respect thereto (collectively
called the "INDEMNIFIED LIABILITIES"); provided, however, that Company shall not
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is permitted
to pay
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and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
Without limiting the generality of the foregoing, Company
further agrees to fully and promptly pay, perform, discharge, defend (subject to
Indemnitee's selection of counsel), indemnify and hold harmless each Indemnitee
from and against any Indemnified Environmental Liabilities; provided that
Company shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Environmental Liabilities to the extent such Indemnified
Environmental Liabilities arise from the gross negligence or willful misconduct
of that Indemnitee as determined by a final judgment of a court of competent
jurisdiction. To the extent that the undertaking to defend, indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Company shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Environmental Liabilities
incurred by the Indemnitees or any of them. As used herein, "INDEMNIFIED
ENVIRONMENTAL LIABILITIES" means any liabilities, obligations, losses, damages
(including, without limitation, natural resource damages), penalties, actions,
judgments, suits, claims (including Environmental Claims), costs (including,
without limitation, the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation, or other response action necessary to
remove, remediate, clean up, or ▇▇▇▇▇ any Hazardous Materials or any activity
relating to Hazardous Materials that is in violation of any Environmental Laws
or that presents a material risk of giving rise to an Environmental Claim),
expenses and disbursements of any kind or nature whatsoever, whether direct,
indirect or consequential and whether based on any federal, state or foreign
laws, statutes, rules or regulations (including, without limitation, securities
and commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of: (i) any Release, threatened Release or disposal of any
Hazardous Materials at any of the Facilities; (ii) the Release, threatened
Release, or disposal at any location of any Hazardous Materials generated at or
originating from any of the Facilities by or at the direction of Company or any
of its Subsidiaries; (iii) any Environmental Claim in connection with any of the
Facilities; or (iv) the operation of or violation of any Environmental Law at
any of the Facilities.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default and after
consultation with Administrative Agent each Lender is hereby authorized by
Company at any time or from time to time, without prior notice to Company or to
any other Person, any such prior 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 trust accounts) and any
other Indebtedness at any time held or owing by that Lender to or for the credit
or the account of Company against and on account of the obligations and
liabilities of Company to that Lender under this Agreement and the other Term
Loan Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement or any other Term
Loan Document, irrespective of whether or not (i) that
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Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Section 8 and although said obligations and liabilities,
or any of them, may be contingent or unmatured. Company hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Term Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code or under any other Insolvency Laws, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to that Lender from Company hereunder or
under the other Term Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE
FROM COMPANY" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due From Company to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Administrative Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due From Company to the other Lenders so that all such
recoveries of Aggregate Amounts Due From Company shall be shared by all Lenders
in proportion to the Aggregate Amounts Due From Company to them; provided that
if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy
or reorganization of Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
A. Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or of the Notes, and no
consent to any departure by Company or any of its Subsidiaries therefrom, shall
in any event be effective without the written concurrence of Company and
Requisite Lenders; provided that (i) any such amendment, modification,
termination, waiver or consent which: increases the amount of any of the
Restructured Term Loan Commitments or reduces the principal amount of any of the
Loans; changes in any manner the definitions of "Pro Rata Share," "Requisite
Lenders" or "Requisite Class Lenders" (it being understood that, with the
consent of Requisite Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of Pro Rata Share, Requisite
Lenders and Requisite Class Lenders on substantially the same basis as the
extensions of credit set forth in this Agreement on the date hereof); changes in
any manner any
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provision of this Agreement which, by its terms, expressly requires the approval
or concurrence of all Lenders; waives, reduces or postpones any scheduled
installment of principal of any of the Loans; waives (other than pursuant to
subsection 2.4B(iii)(f)), reduces or postpones the date on which any interest or
any fees are payable to Lenders; decreases the interest rate borne by any of the
Loans (other than any waiver of any increase in the interest rate applicable to
any of the Loans pursuant to subsection 2.2E) or the amount of any fees payable
to Lenders hereunder; increases the maximum duration of Interest Periods
permitted hereunder; releases any Lien granted in favor of Collateral Agent with
respect to all or substantially all of the Collateral (except as expressly
provided in the Term Loan Documents); or releases any Loan Party from its
obligations under the Subsidiary Guaranty in each case other than in accordance
with the terms of the Term Loan Documents or changes in any manner the
provisions contained in subsection 8.1 or this subsection 10.6 shall be
effective only if evidenced by a writing signed by or on behalf of all Lenders
affected thereby, provided, however, that no such amendment, modification,
termination, waiver or consent shall increase the Restructured Term Loan
Commitments of a Lender over the amount hereof then in effect without the
consent of such Lender. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent, Requisite Lenders and Company, (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the concurrence of the Lender which is the holder of that
Note; (iii) no amendment, modification, termination or waiver of any provision
of Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of Administrative Agent shall be
effective without the written concurrence of Administrative Agent; and (iv) no
amendment, modification, termination or waiver of any provision of subsection
2.4 which has the effect of (x) extending or reducing any interim scheduled
payments applicable to either Class or (y) changing any interim scheduled
payments or voluntary and mandatory prepayments, applicable to either Class (the
"AFFECTED CLASS") in a manner that disproportionately disadvantages such Class
relative to the other Class, shall be effective without the written concurrence
of Requisite Class Lenders of such Class or such Affected Class (it being
understood and agreed that any amendment, modification, termination or waiver of
voluntary or mandatory prepayment, from those set forth in subsection 2.4 with
respect to one Class but not the other Class shall be deemed to disadvantage
such one Class but not to disproportionately disadvantage such other Class for
purposes of this clause (iv)). Administrative Agent may, but shall have no
obligation to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. 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 Company in any case
shall entitle Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.
B. Replacement of Lender. If, in connection with any proposed
change, waiver, discharge or termination to any of the provisions of this
Agreement as contemplated by the first proviso to subsection 10.6A, the consent
of the Requisite Lenders is obtained but the consent of one or more of such
other Lenders whose consent is required is not obtained, then Company shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clauses (A) or (B) below, to either
(A) replace each such non-
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consenting Lender or Lenders with one or more Persons satisfying the
requirements of the definition of Eligible Assignee (each such Person being a
"REPLACEMENT LENDER") so long as at the time of such replacement each
outstanding Loan and other Obligation owed to each such Lender being replaced is
repaid in full and so long as each such Replacement Lender consents to the
proposed change, waiver, discharge or termination or (B) terminate such
non-consenting Lender's Restructured Term Loan Commitments and/or repay in full
each outstanding Loan and other Obligations owed to such Lender; provided that,
unless the Restructured Term Loan Commitments that are terminated, and Loans and
other Obligations repaid, pursuant to preceding clause (B) are immediately
replaced in full at such time through the addition of new Lenders or the
increase of the Restructured Term Loan Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Requisite Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto; provided further that in any event Company shall not have the
right to replace a Lender, terminate its Restructured Term Loan Commitments or
repay its Loans and other Obligations owed to such Lender solely as a result of
the exercise of such Lender's rights (and the withholding of any required
consent by such Lender) pursuant to the first proviso to subsection 10.6A.
10.7 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 would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 NOTICES.
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, telexed or sent by telefacsimile or United States
or Canadian mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States or
Canadian mail with postage prepaid and properly addressed; provided that notices
to Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on Schedule 2.1 or (i) as to Company and Administrative Agent, such
other address as shall be designated by such Person in a written notice
delivered to the other parties hereto and (ii) as to each other party, such
other address as shall be designated by such party in a written notice delivered
to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Company set forth in subsections 2.6D,
2.7, 10.2, 10.3 and 10.4 and the
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agreements of Lenders set forth in subsections 9.2C, 9.4, 10.5 and 10.19
shall survive the payment of the Loans and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Term Loan Document 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 power, right or privilege. All
rights and remedies existing under this Agreement and the other Term Loan
Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their 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 and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes 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.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS'
RIGHTS.
The obligations of Lenders hereunder are several, and no
Lender shall be responsible for the obligations or Restructured Term Loan
Commitments of any other Lender hereunder. Nothing contained herein or in any
other Term Loan Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
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10.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the permitted successors and permitted assigns of Lenders (it
being understood that Lenders' rights of assignment are subject to subsection
10.1). None of Company's rights or obligations hereunder nor any interest
therein may be assigned or delegated by Company without the prior written
consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TERM LOAN DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT, SUCH OTHER TERM LOAN DOCUMENT OR SUCH OBLIGATION. Company hereby
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Company at
its address provided in subsection 10.8, such service being hereby acknowledged
by Company to be sufficient for personal jurisdiction in any action against
Company in any such court and to be otherwise effective and binding service in
every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Lender to bring
proceedings against Company in the courts of any other jurisdiction.
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10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER TERM LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER TERM LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by Company that in any event a Lender may after the proposed recipient of such
information has agreed in writing to be bound by this subsection 10.19, make
disclosures to Affiliates (other than any Affiliate that is a Competitor) of
such Lender or disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein or
disclosures required or requested by any governmental agency or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
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10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of Company and Administrative Agent and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
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TERM LOAN AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY:
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
By: /s/
______________________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President and
Chief Executive Officer
With a copy to:
Loews Cineplex Entertainment Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., General Counsel
S-1
LENDERS:
BANKERS TRUST COMPANY,
as Administrative Agent and as a Lender
By: /s/
______________________________________________
Name:
Title:
Notice Address:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (646) ____________
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