EXHIBIT 10.2
CREDIT AND GUARANTY AGREEMENT
DATED AS OF FEBRUARY 4, 2004
AMONG
CARMIKE CINEMAS, INC.,
CERTAIN SUBSIDIARIES OF CARMIKE CINEMAS, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS SOLE LEAD ARRANGER, SOLE BOOKRUNNER AND SOLE SYNDICATION AGENT,
AND
NATIONAL CITY BANK,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
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$100,000,000 SENIOR SECURED SECOND PRIORITY CREDIT FACILITY
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SECOND LIEN CREDIT AGREEMENT EXECUTION
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS AND INTERPRETATION........................................................................ 2
1.1. DEFINITIONS...................................................................................... 2
1.2. ACCOUNTING TERMS................................................................................. 25
1.3. INTERPRETATION, ETC.............................................................................. 25
SECTION 2. LOANS ................................................................................................ 25
2.1. TERM LOANS....................................................................................... 25
2.2. REPAYMENT........................................................................................ 26
2.3. RESERVED......................................................................................... 26
2.4. PRO RATA SHARES; AVAILABILITY OF FUNDS........................................................... 26
2.5. USE OF PROCEEDS.................................................................................. 27
2.6. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.................................... 27
2.7. INTEREST ON LOANS................................................................................ 28
2.8. CONVERSION/CONTINUATION.......................................................................... 29
2.9. DEFAULT INTEREST................................................................................. 29
2.10. FEES............................................................................................ 30
2.11. VOLUNTARY PREPAYMENTS/CALL PROTECTION/REPURCHASES............................................... 30
2.12. MANDATORY PREPAYMENTS........................................................................... 33
2.13. APPLICATION OF PREPAYMENTS...................................................................... 34
2.14. GENERAL PROVISIONS REGARDING PAYMENTS........................................................... 34
2.15. RATABLE SHARING................................................................................. 35
2.16. MAKING OR MAINTAINING EURODOLLAR RATE LOANS..................................................... 36
2.17. INCREASED COSTS; CAPITAL ADEQUACY............................................................... 37
2.18. TAXES; WITHHOLDING, ETC......................................................................... 39
2.19. OBLIGATION TO MITIGATE.......................................................................... 41
2.20. REMOVAL OR REPLACEMENT OF A LENDER.............................................................. 41
SECTION 3. CONDITIONS PRECEDENT.................................................................................. 42
3.1. CLOSING DATE..................................................................................... 42
3.2. FURTHER CONDITIONS TO ALL TERM LOANS............................................................. 47
SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................ 48
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION....................................... 48
4.2. CAPITAL STOCK AND OWNERSHIP...................................................................... 48
4.3. DUE AUTHORIZATION................................................................................ 48
4.4. NO CONFLICT...................................................................................... 48
4.5. GOVERNMENTAL CONSENTS............................................................................ 49
4.6. BINDING OBLIGATION............................................................................... 49
4.7. HISTORICAL FINANCIAL STATEMENTS.................................................................. 49
4.8. PROJECTIONS...................................................................................... 49
4.9. NO MATERIAL ADVERSE CHANGE....................................................................... 50
4.10. NO RESTRICTED JUNIOR PAYMENTS................................................................... 50
4.11. ADVERSE PROCEEDINGS, ETC........................................................................ 50
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4.12. PAYMENT OF TAXES................................................................................ 50
4.13. PROPERTIES...................................................................................... 50
4.14. ENVIRONMENTAL MATTERS........................................................................... 50
4.15. NO DEFAULTS..................................................................................... 51
4.16. MATERIAL CONTRACTS.............................................................................. 51
4.17. GOVERNMENTAL REGULATION......................................................................... 51
4.18. MARGIN STOCK.................................................................................... 51
4.19. EMPLOYEE MATTERS................................................................................ 52
4.20. EMPLOYEE BENEFIT PLANS.......................................................................... 52
4.21. CERTAIN FEES.................................................................................... 53
4.22. SOLVENCY........................................................................................ 53
4.23. RELATED AGREEMENTS.............................................................................. 53
4.24. COMPLIANCE WITH STATUTES, ETC. ................................................................. 53
4.25. DISCLOSURE...................................................................................... 54
SECTION 5. AFFIRMATIVE COVENANTS................................................................................. 54
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS........................................................... 54
5.2. EXISTENCE........................................................................................ 57
5.3. PAYMENT OF TAXES AND CLAIMS...................................................................... 58
5.4. MAINTENANCE OF PROPERTIES........................................................................ 58
5.5. INSURANCE........................................................................................ 58
5.6. INSPECTIONS...................................................................................... 59
5.7. LENDERS MEETINGS................................................................................. 59
5.8. COMPLIANCE WITH LAWS............................................................................. 59
5.9. ENVIRONMENTAL.................................................................................... 59
5.10. SUBSIDIARIES.................................................................................... 60
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS.......................................................... 61
5.12. INTEREST RATE PROTECTION........................................................................ 61
5.13. FURTHER ASSURANCES.............................................................................. 61
5.14. POST-CLOSING REFINANCING........................................................................ 62
SECTION 6. NEGATIVE COVENANTS.................................................................................... 62
6.1. INDEBTEDNESS..................................................................................... 62
6.2. LIENS............................................................................................ 64
6.3. EQUITABLE LIEN................................................................................... 66
6.4. NO FURTHER NEGATIVE PLEDGES...................................................................... 66
6.5. RESTRICTED JUNIOR PAYMENTS....................................................................... 66
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS......................................................... 67
6.7. INVESTMENTS...................................................................................... 67
6.8. RESERVED......................................................................................... 68
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS......................................... 68
6.10. DISPOSAL OF SUBSIDIARY INTERESTS................................................................ 69
6.11. SALES AND LEASE-BACKS........................................................................... 69
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES................................................... 69
6.13. CONDUCT OF BUSINESS............................................................................. 70
6.14. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS AND DESIGNATED CONTRACTS.................... 70
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6.15. AMENDMENTS OR WAIVERS OF WITH RESPECT TO SENIOR SUBORDINATED NOTE DOCUMENTS AND
REVOLVING CREDIT AGREEMENT.................................................................... 70
6.16. FISCAL YEAR..................................................................................... 70
SECTION 7. GUARANTY.............................................................................................. 71
7.1. GUARANTY OF THE OBLIGATIONS...................................................................... 71
7.2. CONTRIBUTION BY GUARANTORS....................................................................... 71
7.3. PAYMENT BY GUARANTORS............................................................................ 71
7.4. LIABILITY OF GUARANTORS ABSOLUTE................................................................. 72
7.5. WAIVERS BY GUARANTORS............................................................................ 74
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. ........................................... 74
7.7. SUBORDINATION OF OTHER OBLIGATIONS............................................................... 75
7.8. CONTINUING GUARANTY.............................................................................. 75
7.9. AUTHORITY OF GUARANTORS OR COMPANY............................................................... 75
7.10. FINANCIAL CONDITION OF COMPANY.................................................................. 75
7.11. BANKRUPTCY, ETC. ............................................................................... 76
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR.................................................... 76
SECTION 8. EVENTS OF DEFAULT; CHANGE OF CONTROL.................................................................. 77
8.1. EVENTS OF DEFAULT................................................................................ 77
8.2. CHANGE OF CONTROL................................................................................ 79
SECTION 9. AGENTS................................................................................................ 81
9.1. APPOINTMENT OF AGENTS............................................................................ 81
9.2. POWERS AND DUTIES................................................................................ 81
9.3. GENERAL IMMUNITY................................................................................. 82
9.4. AGENTS ENTITLED TO ACT AS LENDER................................................................. 82
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.......................................... 83
9.6. RIGHT TO INDEMNITY............................................................................... 83
9.7. SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL AGENT................................................. 84
9.8. COLLATERAL DOCUMENTS AND GUARANTY................................................................ 85
SECTION 10. MISCELLANEOUS........................................................................................ 85
10.1. NOTICES......................................................................................... 85
10.2. EXPENSES........................................................................................ 86
10.3. INDEMNITY....................................................................................... 86
10.4. SET-OFF......................................................................................... 87
10.5. AMENDMENTS AND WAIVERS.......................................................................... 87
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.......................................................... 88
10.7. INDEPENDENCE OF COVENANTS....................................................................... 92
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.......................................... 92
10.9. NO WAIVER; REMEDIES CUMULATIVE.................................................................. 92
10.10. MARSHALLING; PAYMENTS SET ASIDE................................................................ 93
10.11. SEVERABILITY................................................................................... 93
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS..................................... 93
10.13. HEADINGS....................................................................................... 93
10.14. APPLICABLE LAW................................................................................. 93
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10.15. CONSENT TO JURISDICTION........................................................................ 93
10.16. WAIVER OF JURY TRIAL........................................................................... 94
10.17. CONFIDENTIALITY................................................................................ 95
10.18. USURY SAVINGS CLAUSE........................................................................... 95
10.19. COUNTERPARTS................................................................................... 96
10.20. EFFECTIVENESS.................................................................................. 96
10.21. USA PATRIOT ACT................................................................................ 96
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APPENDICES: A Term Loan Commitments
B Notice Addresses
SCHEDULES: 1.1-A Closing Date Assets Sales
3.1(i) Closing Date Mortgaged Properties
3.1(p) Counsel Opinions
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Real Estate Assets
4.16 Material Contracts
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
B Term Loan Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-bank Status
G Closing Date Certificate
H Counterpart Agreement
I Pledge and Security Agreement
J Mortgage
K Landlord Waiver and Consent Agreement
L Intercreditor Agreement
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of February 4,
2004, is entered into by and among CARMIKE CINEMAS, INC., a Delaware corporation
("COMPANY"), CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the Lenders party
hereto from time to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P. ("GSCP"), as Sole
Lead Arranger, Sole Bookrunner, and as Sole Syndication Agent (in such
capacities, "SYNDICATION AGENT"), and NATIONAL CITY BANK ("NATIONAL CITY"), as
Administrative Agent (together with its permitted successors in such capacity,
"ADMINISTRATIVE AGENT") and as Collateral Agent (together with its permitted
successor in such capacity, "COLLATERAL AGENT").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have agreed to extend a senior secured second priority
term loan credit facility to Company, consisting of $100,000,000 aggregate
principal amount of Term Loans, the proceeds of which will be used, together
with the net cash proceeds of (i) not less than $89,000,000 pursuant to a public
offering of Company's common stock (the "EQUITY OFFERING"); (ii) the Senior
Subordinated Notes and (iv) cash on hand, to refinance Company's Existing
Indebtedness outstanding on the Closing Date, together with the payment of all
costs, fees and expenses in connection therewith (the "REFINANCING");
WHEREAS, concurrently with the Term Loans provided to Company on the
Closing Date, the Company will enter into the Revolving Credit Agreement which
will provide for Revolving Loans to be used for working capital and general
corporate purposes of Company and its Subsidiaries after the Closing Date
including, without limitation, Consolidated Capital Expenditures and Permitted
Acquisitions;
WHEREAS, Company has agreed to secure all of its Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a Second
Priority Lien on substantially all of its assets, including a pledge of all of
the Capital Stock owned by it in each of its Domestic Subsidiaries and 65% of
all the Capital Stock of each of its Foreign Subsidiaries; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Company
hereunder and to secure their respective Obligations by granting to Collateral
Agent, for the benefit of Secured Parties, a Second Priority Lien on
substantially all of their respective assets, including a pledge of all of the
Capital Stock owned by them in each of their respective Domestic Subsidiaries
and 65% of all the Capital Stock of each of their respective Foreign
Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECOND LIEN CREDIT AGREEMENT EXECUTION
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (and rounding upward to the next
whole multiple of 1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest
1/100 of 1%) equal to the rate determined by Administrative Agent to be the
offered rate which appears on the page of the Telerate Screen which displays an
average British Bankers Association Interest Settlement Rate (such page
currently being page number 3740 or 3750, as applicable) for deposits (for
delivery on the first day of such period) with a term equivalent to such period
in Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (b) in the event the rate referenced
in the preceding clause (a) does not appear on such page or service or if such
page or service shall cease to be available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market by National City for deposits
(for delivery on the first day of the relevant period) in Dollars of amounts in
same day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on such Interest
Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Company or any of its Subsidiaries, threatened against or
directly affecting Company or any of its Subsidiaries or any property of Company
or any of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.16(b).
"AFFECTED LOANS" as defined in Section 2.16(b).
"AFFILIATE" means, as applied to any Person, 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
SECOND LIEN CREDIT AGREEMENT EXECUTION
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"controlling", "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power (i) to
vote 5% or more of the Securities having ordinary voting power for the election
of directors of such Person or (ii) 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.
"AGENT" means each of Syndication Agent, Administrative Agent
and Collateral Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.15.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as
of February 4, 2004, as it may be amended, supplemented or otherwise modified
from time to time.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any
Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any basic marginal, special,
supplemental, emergency or other reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System or other applicable banking regulator.
Without limiting the effect of the foregoing, the Applicable Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by
reference to which the applicable Adjusted Eurodollar Rate or any other interest
rate of a Loan is to be determined, or (ii) any category of extensions of credit
or other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan
shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the Applicable
Reserve Requirement.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than Company
or any Guarantor Subsidiary), in one transaction or a series of transactions, of
all or any part of Company's or any of its Subsidiaries' businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of Company' Subsidiaries, other than (i)
inventory (or other assets) sold, leased or otherwise disposed of in the
ordinary course of business (excluding any such sales or other dispositions by
operations or divisions discontinued or to be discontinued), (ii) sale of the
assets described on Schedule 1.1-A hereto, (iii) sales, leases or other
dispositions of Investments permitted pursuant to Sections 6.7(a), (h), (i), (k)
and (l), and (iv) sales, leases or other dispositions of other assets for
aggregate consideration of less than $2,000,000 with respect to any transaction
or series of related transactions and less than $5,000,000 in the aggregate
during any Fiscal Year.
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"ASSIGNMENT AGREEMENT" means an Assignment and Assumption
Agreement substantially in the form of Exhibit E, with such amendments or
modifications as may be approved by Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any
individual holding the position of chairman of the board (if an officer), chief
executive officer, president or one of its vice presidents (or the equivalent
thereof), and such Person's chief financial officer, treasurer or controller.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Base Rate.
"BENEFICIARY" means each Agent, Lender and Lender
Counterparty.
"BUSINESS DAY" means (i) 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 notices, determinations, fundings and payments in connection with the
Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term "BUSINESS DAY"
shall mean any day which is a Business Day described in clause (i) and which is
also a day for trading by and between banks in Dollar deposits in the London
interbank market.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation), including, without limitation, partnership interests and
membership interests, and any and all warrants, rights or options to purchase or
other arrangements or rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand
or Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) 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
SECOND LIEN CREDIT AGREEMENT EXECUTION
4
one year after such date; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof, in each case maturing within one year
after such date 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 ▇▇▇▇▇'▇; (iii) 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 ▇▇▇▇▇'▇; (iv) 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 (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; (v) shares of any money market mutual fund that
(a) has substantially all of its assets invested continuously in one or more
types of investments referred to in clauses (i) through (iv) above, (b) has net
assets of not less than $500,000,000, and (c) has the highest rating obtainable
from either S&P or ▇▇▇▇▇'▇; and (vi) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(i), (ii) and (iv) above entered into with any financial institution meeting the
qualifications specified in clause (iv) above.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit F.
"CHANGE OF CONTROL" means the occurrence of any of the
following:
(i) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Subsidiaries taken as a
whole to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than to the Principal, any Related Parties of
Principal, PIA, any of PIA's officers or directors or any Affiliates of
PIA (collectively, the "PERMITTED HOLDERS"); or
(ii) the adoption of a plan relating to the liquidation or
dissolution of Company; or
(iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above), other than a Permitted Holder or any
direct or indirect Subsidiary of any Permitted Holder or any Permitted
Group, becomes the beneficial owner, directly or indirectly, of more
than 50% of the Capital Stock of Company, measured by voting power
rather than number of shares; or
(v) any "change of control" or similar event under the Senior
Subordinated Note Indenture shall occur.
"CHANGE OF CONTROL OFFER" as defined in Section 8.2.
"CLOSING DATE" means the date on which the initial Loans are
made.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G.
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"CLOSING DATE MORTGAGED PROPERTY" as defined in Section
3.1(i).
"COKE AGREEMENT" means that certain Amended and Restated
Beverage Agreement, dated December 10, 1998, by and between The Coca-Cola
Company and Company, as amended through the date hereof and as may be further
amended, supplemented, or otherwise modified from time to time, to the extent
such amendment, supplement, or otherwise modification is not prohibited by the
terms of this Agreement.
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL AGENT" as defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security
Agreement, the Mortgages, the Landlord Personal Property Collateral Access
Agreements, if any, the Intercreditor Agreement and all other instruments,
documents and agreements delivered by any Credit Party pursuant to this
Agreement or any of the other Credit Documents in order to (a) grant to
Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or
mixed property of that Credit Party as security for the Obligations and/or (b)
perfect such Liens.
"COLLATERAL QUESTIONNAIRE" means a certificate in form
satisfactory to Collateral Agent that provides information with respect to the
personal or mixed property of each Credit Party.
"COMPANY" as defined in the preamble hereto.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an
amount determined for Company and its Subsidiaries on a consolidated basis equal
to (i) the sum, without duplication, of the amounts for such period of (a)
Consolidated Net Income, and to the extent already deducted in arriving at
Consolidated Net Income: (b) Consolidated Interest Expense, (c) provisions for
income tax, franchise tax, and net worth tax (including all single business tax
expense imposed by state law), (d) total depreciation expense, (e) total
amortization expense, (f) other non-Cash items reducing Consolidated Net Income
(excluding any such non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or amortization of a
prepaid Cash item that was paid in a prior period), (g) unusual or nonrecurring
charges or expenses, (h) non-cash compensation charges and charges related to
the expensing of stock options, (i) charges for the write-off of unamortized
debt costs, (j) charges for the impairment of assets, (k) restructuring charges
incurred in connection with the closure of theatres determined to be
underperforming by the board of directors of the Company in its sole discretion
and (l) Transaction Costs and all other upfront fees, costs and expenses payable
in respect of equity and debt offerings and financings, investments, mergers,
recapitilizations, option buyouts, assets sales and Permitted Acquisitions,
minus (ii) other non-Cash items increasing Consolidated Net Income for such
period (excluding any such
SECOND LIEN CREDIT AGREEMENT EXECUTION
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non-Cash item to the extent it represents the reversal of an accrual or reserve
for potential Cash item in any prior period).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Company and its Subsidiaries during such period
determined on a consolidated basis that, in accordance with GAAP, are or should
be included in "purchase of property and equipment" or similar items reflected
in the consolidated statement of cash flows of Company and its Subsidiaries.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum,
without duplication, of the amounts determined for Company and its Subsidiaries
on a consolidated basis equal to (i) Consolidated Interest Expense and (ii) the
product of (a) all dividends, whether paid or accrued and whether or not in
cash, on any series of preferred stock of Company or any of its Subsidiaries,
other than dividends on Capital Stock payable solely in Capital Stock of Company
(other than Disqualified Stock) or to Company or a Subsidiary of Company, times
(b) a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax rate
of Company, expressed as a decimal, in each case, determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including, without duplication, amortization of debt
issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, any interest on
Indebtedness of another Person that is guaranteed by Company or one of its
Subsidiaries or secured by a Lien on assets of Company or one of its
Subsidiaries whether or not such guarantee or Lien is called upon, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and net costs under Interest Rate Agreements, but excluding, however,
any amounts referred to in Section 2.10 payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP, minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary
of Company) in which any other Person (other than Company or any of its
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
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (c) 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, (d) any after-tax gains or losses attributable to asset sales
or returned surplus assets of any Pension Plan, and (e) (to the extent not
included in clauses (a) through (d) above) any net extraordinary gains or net
extraordinary losses.
SECOND LIEN CREDIT AGREEMENT EXECUTION
7
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any 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.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a
Conversion/Continuation Notice substantially in the form of Exhibit A-2.
"COUNTERPART AGREEMENT" means a Counterpart Agreement
substantially in the form of Exhibit H delivered by a Credit Party pursuant to
Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if
any, the Collateral Documents and all other instruments or agreements executed
and delivered by a Credit Party for the benefit of any Agent or any Lender
pursuant to the requirements of this Agreement or the Collateral Documents.
"CREDIT EXTENSION" means the making of a Loan.
"CREDIT PARTY" means each Person (other than any Agent or any
Lender or any other representative thereof) from time to time party to a Credit
Document.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement, each of which is for the purpose of
hedging the foreign currency risk associated with Company's' and its
Subsidiaries' operations and not for speculative purposes.
"DEFAULT" means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.
"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 CONTRACTS" means (i) the Coke Agreement, (ii) that
certain Employment Agreement, dated as of January 31, 2002, by and between the
Company and the Principal and (iii) the Stockholders Agreement.
"DISQUALIFIED STOCK" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case, at the option of the holder of the
Capital Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the
SECOND LIEN CREDIT AGREEMENT EXECUTION
8
option of the holder of the Capital Stock, in whole or in part, on or prior to
the date that is 91 days after the Term Loan Maturity Date. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 6.5 hereof. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Agreement will be the maximum
amount that Company and its Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the
laws of the United States of America, any State thereof or the District of
Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, asset-based lender or commercial finance company, investment
or mutual fund or other entity that is an "accredited investor" (as defined in
Regulation D under the Securities Act) and which extends credit or buys loans as
one of its businesses; provided, no Affiliate of Company 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 sponsored, maintained or
contributed to by, or required to be contributed by, Company, any of its
Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
foreign or domestic, federal or state (or any subdivision of either of them),
statutes, ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of Governmental Authorities relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity; (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials; or (iii) occupational safety and health, land
use or the protection of human, plant or animal health or welfare, in any manner
applicable to Company or any of its Subsidiaries or any Facility.
"EQUITY OFFERING" has the meaning set forth in the Recitals
hereto.
SECOND LIEN CREDIT AGREEMENT EXECUTION
9
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is 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.
"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, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability to Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 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
reasonably constitutes grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Company, any of its Subsidiaries or any of their respective 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 of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Company, any of its Subsidiaries or any of their respective 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 would give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any 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, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any 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
SECOND LIEN CREDIT AGREEMENT EXECUTION
10
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 LOAN" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set
forth in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING INDEBTEDNESS" means (i) Indebtedness and other
obligations outstanding under that certain Credit Agreement dated as of January
31, 2002 between Company, Eastwynn Theatres, Inc., as borrowers, the lenders
party thereto from time to time and General Electric Capital Corporation, as
agent, as amended prior to the Closing Date, (ii) Indebtedness and other
obligations outstanding under that certain Credit Agreement dated as of January
31, 2002 between Company, the lenders party thereto from time to time and BNY
Asset Solutions LLC, as agent, as amended prior to the Closing Date and (iii)
Company's 10.375% senior subordinated notes due 2009.
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per
annum (expressed, as a decimal, rounded upwards, if necessary, to the next
higher 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided, (i) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate charged to Administrative Agent, in its capacity as a Lender,
on such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the certification
of the chief financial officer, treasurer or controller of Company that such
financial statements 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.
SECOND LIEN CREDIT AGREEMENT EXECUTION
11
"FINANCIAL PLAN" as defined in Section 5.1(h).
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year.
"FIXED CHARGE COVERAGE RATIO" means the ratio as of the last
day of any Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter Period then ending, to (ii) Consolidated Fixed Charges for
such four-Fiscal Quarter Period.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to
a mortgage in favor of Collateral Agent, for the benefit of the Lenders, and
located in an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a
Domestic Subsidiary.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of
Exhibit A-1.
"GAAP" means, subject to the limitations on the application
thereof set forth in ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ generally accepted accounting
principles in effect as of the date of determination thereof.
"GOVERNMENTAL ACTS" means any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each Domestic Subsidiary of Company.
"GUARANTOR SUBSIDIARY" means each Guarantor.
"GUARANTY" means the guaranty of each Guarantor set forth in
Section 7.
SECOND LIEN CREDIT AGREEMENT EXECUTION
12
"HAZARDOUS MATERIALS" means any chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority or which may or could pose a hazard to the health and
safety of the owners, occupants or any Persons in the vicinity of any Facility
or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement entered into with a Lender Counterparty in order to satisfy
the requirements of this Agreement or otherwise in the ordinary course of
Company's or any of its Subsidiaries' businesses.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate,
if any, that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing
Date, (i) the audited financial statements of Company and its Subsidiaries for
Fiscal Years 2001 and 2002, consisting of balance sheets and the related
consolidated statements of income, stockholders' equity and cash flows for such
Fiscal Years, and (ii) the unaudited financial statements of Company and its
Subsidiaries as at the most recently ended Fiscal Quarter for which financial
information is available, consisting of a balance sheet and the related
consolidated statements of income, stockholders' equity and cash flows for the
three-, six-or nine-month period, as applicable, ending on such date, together
with the comparable financial statements of the same period from the same Fiscal
Quarter of the prior Fiscal Year and, in each case of clauses (i) and (ii),
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.
"INCREASED-COST LENDERS" as defined in Section 2.20.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (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; (v) all
SECOND LIEN CREDIT AGREEMENT EXECUTION
13
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; (vi) the
face amount of any letter of credit issued in respect of obligations otherwise
constituting Indebtedness for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (vii) 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 in respect of obligations otherwise constituting
Indebtedness of another; (viii) any obligation of such Person the primary
purpose or intent of which is to provide assurance to an obligee in respect of
obligations otherwise constituting Indebtedness of the obligor thereof will be
paid or discharged, or any agreement relating thereto will be complied with, or
the holders thereof will be protected (in whole or in part) against loss in
respect thereof; (ix) any liability of such Person for an obligation of another
through any agreement (contingent or otherwise) (a) 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 (b) 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
(a) or (b) of this clause (ix), the primary purpose or intent thereof is as
described in clause (viii) above; (x) general unsecured claims against such
Person (excluding trade payables and other current expenses accrued in the
ordinary course of business) and (xi) all actual net obligations of such Person
payable in respect of any exchange traded or over the counter derivative
transaction, including, without limitation, any Interest Rate Agreement and
Currency Agreement, whether entered into for hedging or speculative purposes;
provided, in no event shall obligations under any agreements providing for
indemnification, purchase price adjustments or similar obligations incurred or
assumed in connection with the acquisition or disposition of assets or Capital
Stock be deemed "Indebtedness" for purposes of this Agreement.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including 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 Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for 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, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including 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) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including the Lenders' agreement to
make Credit Extensions or the use or intended use of the proceeds thereof, or
any enforcement of any of the Credit Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) any indemnification obligations contained in
the commitment letter delivered by any Lender to Company with respect to the
transactions contemplated by this Agreement which survive the termination of
such commitment
SECOND LIEN CREDIT AGREEMENT EXECUTION
14
letter; or (iii) any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of Company or any of its
Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INTERCREDITOR AGREEMENT" means an Intercreditor Agreement
substantially in the form of Exhibit L, as it may be amended, supplemented or
otherwise modified from time to time.
"INTEREST PAYMENT DATE" means with respect to (i) any Base
Rate Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date and the final
maturity date of such Loan; and (ii) any Eurodollar Rate Loan, the last day of
each Interest Period applicable to such Loan; provided, in the case of each
Interest Period of longer than three months "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof, after
the commencement of such Interest Period.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate
Loan, an interest period of one-, two-, three- or six-months, as selected by
Company in the applicable Funding Notice or Conversion/Continuation Notice, (i)
initially, commencing on the Credit Date or Conversion/Continuation Date
thereof, as the case may be; and (ii) thereafter, commencing on the day on which
the immediately preceding Interest Period expires; provided, (a) 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 unless no further
Business Day occurs in such month, in which case such Interest Period shall
expire on the immediately preceding Business Day; (b) 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 (c) of this definition, end on the last
Business Day of a calendar month; and (c) no Interest Period with respect to any
portion of any Term Loans shall extend beyond the Term Loan Maturity Date.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement, each of which
is for the purpose of hedging the interest rate exposure associated with
Company's and its Subsidiaries' operations and not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the date that is two Business Days prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"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, any of the Securities of any other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any
SECOND LIEN CREDIT AGREEMENT EXECUTION
15
Person (other than Company or any Guarantor Subsidiary), of any Capital Stock of
such Person; and (iii) any direct or indirect loan, advance (other than advances
to employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Company or any of its Subsidiaries to any other Person (other than Company or
any Guarantor Subsidiary), including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
or services provided 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.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided, in no event shall any corporate Subsidiary of any Person be considered
to be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, pursuant to which, among other things, the
landlord consents to the granting of a Mortgage on such Leasehold Property by
the Credit Party tenant, such Landlord Consent and Estoppel to be in form and
substance acceptable to Collateral Agent in its reasonable discretion, but in
any event sufficient for Collateral Agent to obtain a Title Policy with respect
to such Mortgage.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means
a Landlord Waiver and Consent Agreement substantially in the form of Exhibit K
with such amendments or modifications as may be approved by Collateral Agent.
"LEASEHOLD PROPERTY" means any leasehold interest of any
Credit Party as lessee under any lease of real property, other than any such
leasehold interest designated from time to time by Collateral Agent in its sole
discretion as not being required to be included in the Collateral.
"LENDER" means each financial institution listed on the
signature pages hereto as a Lender, and any other Person that becomes a party
hereto pursuant to an Assignment Agreement.
"LENDER COUNTERPARTY" means each Lender or any Affiliate of a
Lender counterparty to a Hedge Agreement (including any Person who is a Lender
(and any Affiliate thereof) as of the Closing Date but subsequently, whether
before or after entering into a Hedge Agreement, ceases to be a Lender)
including, without limitation, each such Affiliate that enters into a joinder
agreement with Collateral Agent.
"LIEN" means (i) any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing and
(ii) in the case of Securities, any purchase option, call or similar right of a
third party with respect to such Securities.
SECOND LIEN CREDIT AGREEMENT EXECUTION
16
"LOAN" means a Term Loan.
"MARGIN STOCK" as defined in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
and/or material adverse developments with respect to (i) the business
operations, properties, assets, condition (financial or otherwise) or prospects
of Company and its Subsidiaries taken as a whole; (ii) the ability of any Credit
Party to fully and timely perform its Obligations; (iii) the legality, validity,
binding effect or enforceability against a Credit Party of a Credit Document to
which it is a party; or (iv) the rights, remedies and benefits available to, or
conferred upon, any Agent and any Lender or any Secured Party under any Credit
Document.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Credit
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i) (a) any fee-owned Real
Estate Asset having a fair market value in excess of $1,000,000 as of the date
of the acquisition thereof and (b) all Leasehold Properties other than those
with respect to which the aggregate payments under the term of the lease are
less than $350,000 per annum or (ii) any Real Estate Asset that the Requisite
Lenders have reasonably determined is material to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any Subsidiary thereof, including Company.
"MATERIAL SUBSIDIARY" means any Subsidiary of Company having
gross revenues during the period of the most recent four full fiscal quarters of
Company that constituted more than one percent (1%) of the total consolidated
gross revenues of Company and its Subsidiaries for such period.
"MOODY'S" means ▇▇▇▇▇'▇ Investor Services, Inc.
"MORTGAGE" means a Mortgage substantially in the form of
Exhibit J, as it may be amended, supplemented or otherwise modified from time to
time.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance
Commissioners, and any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial
statements for which such narrative report is required, a narrative report
describing the operations of Company and its Subsidiaries in the form prepared
for presentation to senior management thereof for the applicable Fiscal Quarter
or Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate.
SECOND LIEN CREDIT AGREEMENT EXECUTION
17
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, an amount equal to: (i) 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, minus (ii) any bona fide direct costs
incurred in connection with such Asset Sale, including (a) income or gains taxes
payable by the seller as a result of any gain recognized in connection with such
Asset Sale, (b) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets involved in such transaction or that is
otherwise required to be repaid under the terms thereof as a result of such
Asset Sale and (c) a reasonable reserve for any indemnification payments (fixed
or contingent) attributable to seller's indemnities and representations and
warranties to purchaser in respect of such Asset Sale undertaken by Company or
any of its Subsidiaries in connection with such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal
to: (i) any Cash payments or proceeds received by Company or any of its
Subsidiaries (a) under any casualty insurance policy in respect of a covered
loss thereunder or (b) 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 or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, minus (ii) (a) any
actual and reasonable costs incurred by Company or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Company or such
Subsidiary in respect thereof, (b) any bona fide direct costs incurred in
connection with any taking or sale of such assets as referred to in clause
(i)(b) of this definition, including income or gains taxes payable as a result
of any gain recognized in connection therewith, (c) any Indebtedness secured by
the assets involved in such covered loss, taking, or sale, and required to be
repaid as a result thereof, and (d) income or gains taxes payable by Company or
any Subsidiary as a result of any gain recognized in connection with any such
covered loss, taking, or sale; provided, however, that there shall be excluded
from Net Insurance/Condemnation Proceeds any Cash payments or proceeds in
respect of any casualty loss, taking, or sale in any instance in an amount less
than $3,000,000 and less than $7,500,000 in the aggregate during any Fiscal
Year.
"NON-US LENDER" as defined in Section 2.18(c).
"NOTE" means a Term Loan Note.
"NOTICE" means a Funding Notice or a Conversion/Continuation
Notice.
"OBLIGATIONS" means all obligations of every nature of each
Credit Party from time to time owed to the Agents (including former Agents), the
Lenders or any of them and Lender Counterparties, under any Credit Document or
Hedge Agreement (including, without limitation, with respect to a Hedge
Agreement, obligations owed thereunder to any person who was a Lender or an
Affiliate of a Lender at the time such Hedge Agreement was entered into),
whether for principal, interest (including interest which, but for the filing of
a petition in bankruptcy with respect to such Credit Party, would have accrued
on any Obligation, whether or not a claim is allowed against such Credit Party
for such interest in the related bankruptcy
SECOND LIEN CREDIT AGREEMENT EXECUTION
18
proceeding), payments for early termination of Hedge Agreements, fees, expenses,
indemnification or otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"OFFER" as defined in Section 2.11(c).
"OFFER LOANS" as defined in Section 2.11(c).
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PARTICIPANT REGISTER" as defined in Section 10.6(b)(iii).
"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.
"PERMITTED ACQUISITION" means any acquisition by Company or
any Guarantor, whether by purchase, merger or otherwise, of all or substantially
all of the assets of, all of the Capital Stock of, or a business line or unit or
a division of, any Person; provided,
(i) immediately prior to, and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing or would result therefrom;
(ii) all transactions in connection therewith shall
be consummated, in all material respects, in accordance with all
applicable laws and in conformity with all applicable Governmental
Authorizations;
(iii) in the case of the acquisition of Capital
Stock, all of the Capital Stock (except for any such Securities in the
nature of directors' qualifying shares required pursuant to applicable
law) acquired or otherwise issued by such Person or any newly formed
Subsidiary of Company in connection with such acquisition shall be
owned 100% by Company or a Guarantor Subsidiary thereof, and Company
shall have taken, or caused to be taken, as of the date such Person
becomes a Subsidiary of Company, each of the actions set forth in
Sections 5.10 and/or 5.11, as applicable;
(iv) [Reserved];
SECOND LIEN CREDIT AGREEMENT EXECUTION
19
(v) Company shall have delivered to Administrative
Agent at least fifteen (15) Business Days prior to such proposed
acquisition all relevant financial information with respect to such
acquired assets, including, without limitation, the aggregate
consideration for such acquisition and any other information reasonably
requested by Administrative Agent; and
(vi) any Person or assets or division as acquired in
accordance herewith shall be in same business or lines of business in
which Company and/or its Subsidiaries are engaged, or are permitted to
be engaged as provided herein, as of the time of such acquisition.
"PERMITTED GROUP" means any group of investors that is deemed
to be a "person" (as that term is used in Section 13(d)(3) of the Exchange Act)
by virtue of the Stockholders Agreement, as the same may be amended, modified or
supplemented from time to time, provided that no single Person (other than the
Principal and the Principal's Related Parties) beneficially owns (together with
its Affiliates) more of the voting interest in the Capital Stock of the Company
that is beneficially owned by such group of investors than is then collectively
beneficially owned by the Principal and the Principal's Related Parties in the
aggregate.
"PERMITTED HOLDER" as defined in the definition of Change Of
Control.
"PERMITTED LIENS" means each of the Liens permitted pursuant
to Section 6.2.
"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 Governmental Authorities.
"PIA" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. and it Affiliates.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement to be executed by Company and each Guarantor substantially in the form
of Exhibit I, as it may be amended, supplemented or otherwise modified from time
to time.
"PRIME RATE" means the rate of interest quoted in The Wall
Street Journal, Money Rates Section as the Prime Rate (currently defined as the
base rate on corporate loans posted by at least 75% of the nation's thirty (30)
largest banks), as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Agent or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"PRINCIPAL" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"PRINCIPAL OFFICE" means such Person's "Principal Office" as
set forth on Appendix B, or such other office as such Person may from time to
time designate in writing to Company, Administrative Agent and each Lender.
SECOND LIEN CREDIT AGREEMENT EXECUTION
20
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means, with respect to each Lender, the
percentage obtained by dividing (A) the Term Loan Exposure of that Lender by (B)
an amount equal to the sum of the aggregate Term Loan Exposure of all Lenders.
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee, leasehold or otherwise) then owned by any Credit Party in any
real property.
"RECORD DOCUMENT" means, with respect to any Leasehold
Property, (i) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (ii) 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, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to Collateral Agent.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document 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.
"REFINANCING" has the meaning set forth in the Recitals
hereto.
"REGISTER" as defined in Section 2.6(b).
"REGISTERED LOAN" as defined in Section 10.6(b)(i).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED AGREEMENTS" means, collectively, (i) the Revolving
Credit Agreement, and (ii) the Senior Subordinated Notes Documents.
"RELATED ASSIGNEE" as defined in Section 10.6(c)(i).
"RELATED FUND" means, with respect to any Lender that is an
investment fund, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"RELATED PARTIES" means (i) any controlling stockholder, 80%
(or more) owned Subsidiary, or immediate family member (in the case of an
individual) of the Principal; or (ii) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of the
Principal and/or such other Persons referred to in the immediately preceding
clause (i).
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any
SECOND LIEN CREDIT AGREEMENT EXECUTION
21
Hazardous Material into the indoor or outdoor environment (including the
abandonment or disposal of any barrels, containers or other closed receptacles
containing any Hazardous Material), including the movement of any Hazardous
Material through the air, soil, surface water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.20.
"REQUISITE LENDERS" means two or more non-Affiliate Lenders
having or holding Term Loan Exposure and representing more than 50% of the sum
of the aggregate Term Loan Exposure of all Lenders.
"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 the Senior
Subordinated Notes.
"REVOLVING CREDIT AGREEMENT" means the Senior Secured First
Priority Credit and Guaranty Agreement dated as of the Closing Date among
Company, GSCP as sole lead arranger, sole bookrunner and sole syndication agent,
▇▇▇▇▇ Fargo Foothill, Inc., as administrative agent and collateral agent, and
the other agents and lenders party thereto as it may be amended, modified,
renewed, refunded, replaced or refinanced (including as term loans) or otherwise
restructured in whole or in part from time to time whether by the same or any
other agent, lender or group of lenders.
"REVOLVING LOANS" means the senior secured first priority
revolving credit loans in an aggregate principal amount of $50,000,000 under the
Revolving Credit Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SECOND PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that such Lien
is (i) the only Lien to which such Collateral is subject, other than any
Permitted Lien and (ii) second in priority only to the Liens created under or
relating to the Revolving Credit Agreement or any Permitted Lien which is
permitted to have priority pursuant to the terms of Section 6.2.
"SECURED PARTIES" has the meaning assigned to that term in the
Pledge and Security Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or
SECOND LIEN CREDIT AGREEMENT EXECUTION
22
arrangement, options, warrants, bonds, debentures, notes, or other instruments
or evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, 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.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and each other
document executed in connection with the Senior Subordinated Notes, and any
documents executed in connection with any refinancings or replacements thereof
to the extent permitted under Section 6.15, as each such document may be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under Section 6.15.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture dated
February 4, 2004, pursuant to which the Senior Subordinated Notes are issued,
and any indenture pursuant to which the Senior Subordinated Notes are refinanced
or replaced pursuant to a transaction permitted under Section 6.1, in each case
as such indenture may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under Section 6.15.
"SENIOR SUBORDINATED NOTES" means the Senior Subordinated
Notes of Company in the aggregate principal amount of not less than $150,000,000
and issued pursuant to the Senior Subordinated Note Indenture, and any
subordinated promissory notes issued in respect of any refinancing or
replacement of such Senior Subordinated Notes in a transaction permitted under
Section 6.1, in each case as such notes may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under Section 6.15.
"SOLVENT" means, with respect to any Credit Party, that as of
the date of determination, both (i) (a) the sum of such Credit Party's debt
(including contingent liabilities) does not exceed the present fair saleable
value of such Credit Party's present assets; (b) such Credit Party's capital is
not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and 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 (whether at maturity or otherwise); and (ii) 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 (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No.5).
"STOCKHOLDERS AGREEMENT" means that certain Stockholders
Agreement by and among Company and the Principal, GS Capital Partners III, L.P.,
GS Capital Partners III
SECOND LIEN CREDIT AGREEMENT EXECUTION
▇▇
▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ GmbH, Bridge Street Fund 1998,
L.P., Stone Street Fund 1998, L.P., The Jordan Trust, TJT(B), TJT(B) (Bermuda)
Investment Company LTD, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as joint
tenants, Leucadia Investors, Inc. and Leucadia National Corporation, dated as of
January 31, 2002, as amended and in effect on the date hereof.
"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; provided, in determining the percentage of ownership
interests of any Person controlled by another Person, no ownership interest in
the nature of a "qualifying share" of the former Person shall be deemed to be
outstanding.
"SYNDICATION AGENT" as defined in the preamble hereto.
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called, by any Governmental Authority, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided, "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person is organized or in which that Person's
applicable principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a Lender, its
lending office) is deemed to be doing business on all or part of the net income,
profits or gains (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its applicable
lending office).
"TERM LOAN" means a Term Loan made by a Lender to Company
pursuant to Section 2.1(a).
"TERM LOAN COMMITMENT" means the commitment of a Lender to
make or otherwise fund a Term Loan and " TERM LOAN COMMITMENTS" means such
commitments of all Lenders in the aggregate. The amount of each Lender's Term
Loan Commitment, if any, is set forth on Appendix A or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Term Loan Commitments
as of the Closing Date is $100,000,000.
"TERM LOAN EXPOSURE" means, with respect to any Lender, as of
any date of determination, the outstanding principal amount of the Term Loans of
such Lender; provided, at any time prior to the making of the Term Loans, the
Term Loan Exposure of any Lender shall be equal to such Lender's Term Loan
Commitment.
SECOND LIEN CREDIT AGREEMENT EXECUTION
24
"TERM LOAN MATURITY DATE" means the earlier of (i) the 5th
anniversary of the Closing Date, and (ii) the date that all Term Loans shall
become due and payable in full hereunder, whether by acceleration or otherwise.
"TERM LOAN NOTE" means a promissory note in the form of
Exhibit B, as it may be amended, supplemented or otherwise modified from time to
time.
"TERMINATED LENDER" as defined in Section 2.20.
"TITLE POLICY" as defined in Section 3.1(i).
"TRANSACTION COSTS" means the fees, costs and expenses payable
by Company or any of Company's Subsidiaries on or before the Closing Date in
connection with the transactions contemplated by the Credit Documents, the
Equity Offering and the Related Agreements.
"TYPE OF LOAN" means either a Base Rate Loan or a Eurodollar
Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNPAID REFINANCING AMOUNT" as defined in Section 3.1(f).
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein,
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 Section
5.1(a) and 5.1(b) 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 Section 5.1(d), if applicable); provided, however,
that calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial Statements.
1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference. References herein to any Section, Appendix, Schedule or
Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the
case may be, hereof unless otherwise specifically provided. The use herein of
the word "include" or "including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not no limiting language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter.
SECTION 2. LOANS
2.1. TERM LOANS.
SECOND LIEN CREDIT AGREEMENT EXECUTION
25
(a) Loan Commitments. Subject to the terms and conditions
hereof, each Lender severally agrees to make, on the Closing Date, a Term Loan
to the Company in an amount equal to such Lender's Term Loan Commitment. Company
may make only one borrowing under the Term Loan Commitment which shall be on the
Closing Date. Any amount borrowed under this Section 2.1(a) and subsequently
repaid or prepaid may not be reborrowed. Subject to Sections 2.11(a) and 2.12,
all amounts owed hereunder with respect to the Term Loans shall be paid in full
no later than the Term Loan Maturity Date. Each Lender's Term Loan Commitment
shall terminate immediately and without further action on the Closing Date after
giving effect to the funding of such Lender's Term Loan Commitment on such date.
(b) Borrowing Mechanics for Term Loans.
(i) Company shall deliver to Administrative Agent a
fully executed Funding Notice no later than one (1) day prior to the
Closing Date. Promptly upon receipt by Administrative Agent of such
Certificate, Administrative Agent shall notify each Lender of the
proposed borrowing.
(ii) Each Lender shall make its Term Loan available
to Administrative Agent not later than 12:00 p.m. (New York City time)
on the Closing Date, by wire transfer of same day funds in Dollars, at
Administrative Agent's Principal Office. Upon satisfaction or waiver of
the conditions precedent specified herein, Administrative Agent shall
make the proceeds of the Term Loans available to Company on the Closing
Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company at Administrative
Agent's Principal Office or to such other account as may be designated
in writing to Administrative Agent by Company.
2.2. REPAYMENT. The principal amounts of the Term Loans shall be repaid
in consecutive quarterly installments of $250,000 commencing on the day that is
three months after the Closing Date and every quarterly anniversary of the
Closing Date thereafter.
Notwithstanding the foregoing, (x) such quarterly installments shall be
reduced in connection with any voluntary or mandatory prepayments of the Term
Loans in accordance with Sections 2.11, 2.12 and 2.13, as applicable; and (y)
the Term Loans, together with all other amounts owed hereunder with respect
thereto, shall, in any event, be paid in full no later than the Term Loan
Maturity Date.
2.3. RESERVED.
2.4. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made 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 such
other Lender's obligation to make a Loan requested hereunder nor shall any Term
Loan Commitment of any Lender be increased or decreased as a result of a default
by any other Lender in such other Lender's obligation to make a Loan requested
hereunder.
SECOND LIEN CREDIT AGREEMENT EXECUTION
26
(b) Availability of Funds. Unless Administrative Agent shall
have been notified by any Lender prior to the Closing Date that such Lender does
not intend to make available to Administrative Agent the amount of such Lender's
Loan, Administrative Agent may assume that such Lender has made such amount
available to Administrative Agent on the Closing Date and Administrative Agent
may, in its sole discretion, but shall not be obligated to, make available to
Company a corresponding amount on the Closing 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 the
Closing 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 shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from the Closing Date until the date such amount
is paid to Administrative Agent, at the rate payable hereunder for Base Rate
Loans. Nothing in this Section 2.4(b) shall be deemed to relieve any Lender from
its obligation to fulfill its Term Loan Commitments hereunder or to prejudice
any rights that Company may have against any Lender as a result of any default
by such Lender hereunder.
2.5. USE OF PROCEEDS. The proceeds of the Term Loans shall be applied
by Company to fund the Refinancing. No portion of the proceeds of the Term Loans
shall be used in any manner that causes or might cause such Term Loans or the
application of such proceeds to violate Regulation T, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation thereof or to violate the Exchange Act.
2.6. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on
its internal records an account or accounts evidencing the Obligations of
Company to such Lender, including the amounts of the Loans made by it and each
repayment and prepayment in respect thereof. Any such recordation shall be
conclusive and binding on Company, absent manifest error; provided, that the
failure to make any such recordation, or any error in such recordation, shall
not affect Company's Obligations in respect of any applicable Loans; and
provided further, in the event of any inconsistency between the Register and any
Lender's records, the recordations in the Register shall govern.
(b) Register. Administrative Agent shall maintain at its
Principal Office a register for the recordation of the names and addresses of
Lenders and the 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.
Administrative Agent shall record in the Register the Loans, and each repayment
or prepayment in respect of the principal amount of the Loans, and any such
recordation shall be conclusive and binding on Company and each Lender, absent
manifest error; provided, failure to make any such recordation, or any error in
such recordation, shall not affect Company's Obligations in respect of any Loan.
Company hereby designates National City to serve as Company's agent solely for
purposes of maintaining the Register as provided in this Section 2.6, and
Company hereby agrees
SECOND LIEN CREDIT AGREEMENT EXECUTION
27
that, to the extent National City serves in such capacity, National City and its
officers, directors, employees, agents and affiliates shall constitute
"Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a Note or Notes to
evidence such Lender's Loan.
2.7. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Loan shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) if a Base Rate Loan, at the Base Rate plus 2.25%;
or
(ii) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus 3.25%.
(b) The basis for determining the rate of interest with
respect to any Loan, and the Interest Period with respect to any Eurodollar Rate
Loan, shall be selected by Company and notified to Administrative Agent and
Lenders pursuant to the Funding Notice or Conversion/Continuation Notice, as the
case may be. If on any day a Loan is outstanding with respect to which a
Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no
more than six (6) Interest Periods outstanding at any time. In the event Company
fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the
applicable Funding Notice or Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will be automatically converted into a
Base Rate Loan on the last day of the then-current Interest Period for such Loan
(or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event Company fails to
specify an Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, Company shall be deemed to
have selected an Interest Period of one month. As soon as practicable after
10:00 a.m. (New York City 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.
(d) Interest payable pursuant to Section 2.7(a) 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) in the case of Eurodollar Rate Loans, on the
basis of a 360-day year, in each case for the actual number
SECOND LIEN CREDIT AGREEMENT EXECUTION
28
of days elapsed in the period during which it accrues. In computing interest on
any Loan, 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, as the case may be, shall be included, and 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, as the case may be, shall be excluded; provided, if a Loan
is repaid on the same day on which it is made, one day's interest shall be paid
on that Loan.
(e) Except as otherwise set forth herein, interest on each
Loan shall be payable in arrears on and to (i) each Interest Payment Date
applicable to that Loan; (ii) upon any prepayment of that Loan, whether
voluntary or mandatory, to the extent accrued on the amount being prepaid; and
(iii) at maturity, including final maturity; provided, however, with respect to
any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.
2.8. CONVERSION/CONTINUATION.
(a) Subject to Section 2.16 and so long as no Default or Event
of Default shall have occurred and then be continuing, Company shall have the
option:
(i) to convert at any time all or any part of any
Loan equal to $1,000,000 and integral multiples of $250,000 in excess
of that amount from one Type of Loan to another Type of Loan; provided,
a Eurodollar Rate Loan may only be converted on the expiration of the
Interest Period applicable to such Eurodollar Rate Loan unless Company
shall pay all amounts due under Section 2.16 in connection with any
such conversion; or
(ii) upon the expiration of any Interest Period
applicable to any Eurodollar Rate Loan, to continue all or any portion
of such Loan equal to $1,000,000 and integral multiples of $250,000 in
excess of that amount as a Eurodollar Rate Loan.
(b) Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and 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). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (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.
2.9. DEFAULT INTEREST. Upon the occurrence and during the continuance
of an Event of Default, the principal amount of all Loans outstanding and, to
the extent permitted by applicable law, any interest payments on the Loans or
any fees or other amounts owed hereunder, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable on demand at a rate that is 2% per
annum in
SECOND LIEN CREDIT AGREEMENT EXECUTION
29
excess of the interest rate otherwise payable hereunder with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans); provided, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this Section 2.9 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.
2.10. FEES. Company agrees to pay to Agents such fees in the amounts
and at the times separately agreed upon.
2.11. VOLUNTARY PREPAYMENTS/CALL PROTECTION/REPURCHASES.
(a) Voluntary Prepayments.
(i) Subject to the terms of 2.11(b) below and so long
as no Revolving Loans are outstanding under the Revolving Credit
Agreement (or any permitted refinancings thereof, including as term
loans), the Company may from time to time:
(1) with respect to Base Rate Loans, prepay
any such Loans on any Business Day in whole or in part, in an
aggregate minimum amount of $500,000 and integral multiples of
$100,000 in excess of that amount; and
(2) with respect to Eurodollar Rate Loans,
prepay any such Loans on any Business Day in whole or in part
in an aggregate minimum amount of $1,000,000 and integral
multiples of $250,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's
prior written or telephonic notice in the case of Base Rate
Loans; and
(2) upon not less than three Business Days'
prior written or telephonic notice in the case of Eurodollar
Rate Loans;
in each case given to Administrative Agent by 12:00 p.m. (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice for Term Loans by telefacsimile or telephone to
each Lender). Upon the giving of any such notice, the principal amount of the
Loans specified in such notice shall become due and payable on the prepayment
SECOND LIEN CREDIT AGREEMENT EXECUTION
30
date specified therein. Any such voluntary prepayment shall be applied as
specified in Section 2.13(a).
(b) Term Loan Call Protection. In the event that the Term
Loans are prepaid or repaid in whole or in part prior to the third anniversary
of the Closing Date, the Company shall pay to Lenders having Term Loan Exposure
a prepayment premium on the amount so prepaid or repaid as follows:
PREPAYMENT PREMIUM AS
A PERCENTAGE OF THE
AMOUNT SO PREPAID
RELEVANT PERIOD OR REPAID
--------------- ---------------------
On or prior to the first anniversary of 3.0%
the Closing Date
On or prior to the second anniversary of 2.0%
the Closing Date but after the first
anniversary of the Closing Date
On or prior to the third anniversary of 1.0%
the Closing Date but after the second
anniversary of the Closing Date
(c) Certain Permitted Term Loan Repurchases.
Notwithstanding anything to the contrary contained in
this Section 2.11 or any other provision of this Agreement, so long as (i) there
is no Event of Default, (ii) no Event of Default would result therefrom and
(iii) there are no Revolving Loans outstanding under the Revolving Credit
Agreement (or any permitted refinancings thereof, including as term loans),
Company may repurchase outstanding Term Loans on the following basis:
(i) Company may repurchase all or any portion of the
Term Loans of one or more Lenders, at the sole discretion of such
Lender or Lenders, pursuant to an Assignment Agreement, between Company
and such Lender or Lenders in an aggregate principal amount not to
exceed 25% of the initial aggregate principal amount of Term Loans with
respect to all such repurchases pursuant to this clause (i); provided
that, with respect to such repurchases, Company shall simultaneously
provide a copy of such Assignment Agreement and any other agreements
between Company and such Lender with respect to such repurchase to
Administrative Agent and Syndication Agent;
(ii) In addition, Company may make one or more offers
(each, an "OFFER") to repurchase the Term Loans (such Term Loans, the
"OFFER LOANS") of Lenders, up to an aggregate amount of $25,000,000
with respect to all such repurchases pursuant to this clause (ii), at
the sole discretion of such Lenders, provided, (A) Company delivers a
notice of such Offer to Administrative Agent and all Lenders no later
than
SECOND LIEN CREDIT AGREEMENT EXECUTION
31
noon (New York City time) at least five Business Days in advance of a
proposed consummation date of such Offer indicating (1) the last date
on which such Offer may be accepted, (2) the maximum dollar amount of
the Offer, (3) the repurchase price per dollar of principal amount of
such Offer Loans at which Company is willing to repurchase the Offer
Loans and (4) the instructions, consistent with this Section 2.11(c)
with respect to the Offer (which shall be reasonably acceptable to
Company, Administrative Agent and the Syndication Agent), that a Lender
must follow in order to have its Offer Loans repurchased; (B) the
maximum dollar amount of the Offer shall be no less than an aggregate
$1,000,000; (C) Company shall hold the Offer open for a minimum period
of two Business Days; (D) a Lender who elects to participate in the
Offer may choose to tender all or part of such Lender's Offer Loans;
and (E) the Offer shall be made to Lenders holding the Offer Loans on a
pro rata basis in accordance with their Pro Rata Shares; provided,
further that, if any Lender elects not to participate in the Offer,
either in whole or in part, the amount of such Lender's Offer Loans not
being tendered shall be excluded in calculating the pro rata amount
applicable to the balance of such Offer Loans;
(iii) With respect to all repurchases made by Company
pursuant to this Section 2.11(c), (A) Company shall pay all accrued and
unpaid interest, if any, on the repurchased Term Loans to the date of
repurchase of such Term Loans (B) Company shall have provided to all
Lenders all information (any such non-public information being subject
to the confidentiality provisions of Section 10.17 hereof) that,
together with any previously provided information, would satisfy the
requirements of Rule 10b-5 of the Exchange Act with respect to an offer
by Company to repurchase securities registered under the Securities Act
of 1933 (whether or not such securities are outstanding) as if such
offer was being made as of the date of such repurchase of Term Loans
from a Lender, (C) such repurchases shall not be deemed to be voluntary
prepayments pursuant to this Section 2.11, Section 2.13 or 2.15
hereunder except that the amount of the Term Loans so repurchased shall
be applied on a pro rata basis to reduce the scheduled remaining
principal amount on such Term Loans and (D) immediately following
consummation of any such repurchase, Company shall provide notice of
such repurchase to Administrative Agent which notice shall include (1)
the identity of each Lender party to such repurchase and the amount of
each Term Loan being repurchased, (2) the accrued interest thereon, (3)
the date of repurchase and (4) any other information Administrative
Agent may reasonably request in connection with such repurchase;
(iv) Following repurchase by Company pursuant to this
Section 2.11(c), the Term Loans so repurchased shall be deemed
cancelled for all purposes and no longer outstanding (and may not be
resold by Company), for all purposes of this Agreement and all other
Credit Documents, including, but not limited to (A) the making of, or
the application of, any payments to the Lenders under this Agreement or
any other Credit Document, (B) the making of any request, demand,
authorization, direction, notice, consent or waiver under this
Agreement or any other Credit Document or (C) the determination of
Requisite Lenders, or for any similar or related purpose, under this
Agreement or any other Credit Document. Any payment made by Company in
connection with a repurchase permitted by this Section 2.11(c) shall
not be subject to the provisions of either Section 2.14(a) or Section
2.15. Failure by Company to make any
SECOND LIEN CREDIT AGREEMENT EXECUTION
32
payment to a Lender required by an agreement permitted by this Section
2.11(c) shall not constitute an Event of Default under Section 8.1(a);
and
Notwithstanding any of the provisions set forth in this Agreement to the
contrary, Company, the Lenders and Agents hereby agree that nothing in this
Agreement shall be understood to mean or suggest that the Term Loans constitute
"securities" for purposes of either the Securities Act or the Exchange Act.
2.12. MANDATORY PREPAYMENTS.
(a) Asset Sales. In the event there are no Revolving Loans
outstanding under the Revolving Credit Agreement (or any permitted refinancings
thereof, including as term loans) on the date of receipt by Company or any of
its Subsidiaries of any Net Asset Sale Proceeds, no later than the third
Business Day thereafter, Company shall prepay the Loans as set forth in Section
2.13(b) in an aggregate amount equal to such Net Asset Sale Proceeds; provided,
(i) so long as no Default or Event of Default shall have occurred and be
continuing, and (ii) to the extent that aggregate Net Asset Sale Proceeds from
the Closing Date through the applicable date of determination do not exceed
$15,000,000, Company shall have the option, directly or through one or more of
its Subsidiaries, to, subject to the provisions of Section 6.7 hereof, invest
(or commit within ninety days to invest in construction projects to be completed
within 18 months after the date of receipt of such Net Asset Sale Proceeds) Net
Asset Sale Proceeds within one hundred eighty days of receipt thereof in
Consolidated Capital Expenditures or non-current assets useful in the business
of Company and its Subsidiaries.
(b) Insurance/Condemnation Proceeds. In the event there are no
Revolving Loans outstanding under the Revolving Credit Agreement (or any
permitted refinancings thereof, including as term loans) on the date of receipt
by Company or any of its Subsidiaries, or Administrative Agent as loss payee, of
any Net Insurance/Condemnation Proceeds, no later than the third Business Day
thereafter, Company shall prepay the Loans as set forth in Section 2.13(b) in an
aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided, so
long as no Default or Event of Default shall have occurred and be continuing,
Company shall have the option, directly or through one or more of its
Subsidiaries, to, subject to the provisions of Section 6.7 hereof, invest (or
commit within ninety days to invest in construction projects to be completed
within 18 months after the date of receipt of such Net Insurance/Condemnation
Proceeds) such Net Insurance/Condemnation Proceeds within one hundred eighty
days of receipt thereof in Consolidated Capital Expenditures or non-current
assets useful in the business of Company and its Subsidiaries, which investment
may include the repair, restoration or replacement of the applicable assets
thereof. The foregoing provisions shall be applicable to all such Net
Insurance/Condemnation Proceeds notwithstanding any contrary provisions that may
be set forth in the Mortgages.
(c) Prepayment Premium. Any prepayments made pursuant to this
Section 2.12, shall be subject to the Term Loan Call Protection provisions of
Section 2.11(b).
(d) Prepayment Certificate. Concurrently with any prepayment
of the Loans pursuant to Sections 2.12(a) and (b), Company shall deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net
SECOND LIEN CREDIT AGREEMENT EXECUTION
33
proceeds. In the event that Company shall subsequently determine that the actual
amount received exceeded the amount set forth in such certificate, Company shall
promptly make an additional prepayment of the Loans in an amount equal to such
excess, and Company shall concurrently therewith deliver to Administrative Agent
a certificate of an Authorized Officer demonstrating the derivation of such
excess.
2.13. APPLICATION OF PREPAYMENTS.
(a) Application of Voluntary Prepayments by Type of Loans. Any
prepayment of any Term Loan pursuant to Section 2.11(a) shall be applied on a
pro rata basis to reduce the scheduled remaining quarterly installments of
principal on such Term Loan.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount required to be paid pursuant to Sections 2.12(a) or 2.12(b) shall be
applied to prepay the remaining scheduled quarterly installments of principal of
Term Loans in inverse order of maturity.
(c) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of Term Loans shall be applied first to
Base Rate Loans to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by Company pursuant to Section 2.16(c).
2.14. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal, interest, fees and
other Obligations shall be made in 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 p.m. (New York City time) on the date
due at Administrative Agent's Principal 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.
(b) All payments in respect of the principal amount of any
Loan shall be accompanied by payment of accrued interest on the principal amount
being repaid or prepaid.
(c) Administrative Agent shall promptly distribute to each
Lender at such address or by wire transfer to such account as such Lender shall
indicate in writing, such Lender's applicable Pro Rata Share of all payments and
prepayments of principal and interest due hereunder, together with all other
amounts due thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice 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.
(e) Subject to the provisos set forth in the definition of
"Interest Period", whenever any payment to be made hereunder shall be stated to
be due on a day that is not a
SECOND LIEN CREDIT AGREEMENT EXECUTION
34
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.
(f) Company hereby authorizes Administrative Agent to charge
Company's accounts with Administrative Agent in order to cause timely payment to
be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(g) Administrative Agent shall deem any payment by or on
behalf of Company hereunder that is not made in same day funds prior to 12:00
p.m. (New York City time) to be a non-conforming payment. Any such payment shall
not be deemed to have been received by Administrative Agent until the later of
(i) the time such funds become available funds, and (ii) the applicable next
Business Day. Administrative Agent shall give prompt telephonic notice to
Company and each applicable Lender (confirmed in writing) if any payment is
non-conforming. Any non-conforming payment may constitute or become a Default or
Event of Default in accordance with the terms of Section 8.1(a). Interest shall
continue to accrue on any principal as to which a non-conforming payment is made
until such funds become available funds (but in no event less than the period
from the date of such payment to the next succeeding applicable Business Day) at
the rate determined pursuant to Section 2.9 from the date such amount was due
and payable until the date such amount is paid in full.
(h) Subject to the terms of the Intercreditor Agreement, if an
Event of Default shall have occurred and not otherwise been waived, and the
maturity of the Obligations shall have been accelerated pursuant to Section 8.1,
all payments or proceeds received by Agents hereunder in respect of any of the
Obligations, shall be applied in accordance with the application arrangements
described in Section 7.2 of the Pledge and Security Agreement.
2.15. RATABLE SHARING. Subject to the terms of the Intercreditor
Agreement, Lenders hereby agree among themselves that, except as otherwise
provided in the Collateral Documents with respect to amounts realized from the
exercise of rights with respect to Liens on the Collateral, if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with the terms hereof), 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 Credit Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or reduction of a proportion of the aggregate amount of
principal, interest, fees and other amounts then due and owing to such Lender
hereunder or under the other Credit Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (a) notify
Administrative Agent and each other Lender of the receipt of such payment and
(b) 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 to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided, 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
SECOND LIEN CREDIT AGREEMENT EXECUTION
35
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.
2.16. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability to Determine Applicable Interest Rate. In the
event that 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 London interbank 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 Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by Company
with respect to the Loans in respect of which such determination was made shall
be deemed to be rescinded by Company.
(b) 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, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank 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 (1) 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, (2) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the case
may be) a Base Rate Loan, (3) 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 (4) 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
SECOND LIEN CREDIT AGREEMENT EXECUTION
36
Eurodollar Rate Loan then being requested by Company pursuant to a Funding
Notice or a Conversion/Continuation Notice, Company shall have the option,
subject to the provisions of Section 2.16(c), to rescind such Funding Notice or
Conversion/Continuation Notice 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 Section 2.16(b) 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
hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to Lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits) which such Lender may sustain: (i) if for
any reason (other than a default by such Lender) a borrowing of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Funding Notice 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
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment of, 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 (including, without
limitation, pursuant to Section 2.11(c) hereof); or (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.
(d) 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 such Lender.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.16 and under
Section 2.17 shall be made as though such 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 such
Lender to a domestic office of such Lender in the United States of America;
provided, however, 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 Section 2.16 and under
Section 2.17.
2.17. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.18 (which shall be controlling with respect to the
matters covered thereby), in the event
SECOND LIEN CREDIT AGREEMENT EXECUTION
37
that any Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that the
adoption, effectiveness, phase-in or initial applicability after the Closing
Date of 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 or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its
applicable lending office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this Agreement or any of the
other Credit Documents or any of its obligations hereunder or thereunder 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 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 London interbank 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. Such Lender 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 Section 2.17(a), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender
shall have determined that the adoption, effectiveness, phase-in or initial
applicability after the Closing Date 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 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
SECOND LIEN CREDIT AGREEMENT EXECUTION
38
after receipt by Company from such Lender of the statement 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) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Lender under
this Section 2.17(b), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
2.18. TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums payable by any
Credit Party hereunder and under the other Credit 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 Tax (other than a Tax on the overall net income
of any Lender) 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 any Credit Party 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.
(b) Withholding of Taxes. If any Credit Party or any other
Person is required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by any Credit Party to Administrative
Agent or any Lender under any of the Credit Documents: (i) Company shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as Company becomes aware of it; (ii) Company shall pay any
such Tax before the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on any Credit Party) 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; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, 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, withholding or payment been required or made; and (iv) within thirty
days after paying any sum from which it is required by law to make any deduction
or withholding, and within thirty days after the due date of payment of any Tax
which it is required by clause (ii) above to pay, Company shall deliver to
Administrative Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to the relevant
taxing or other authority; provided, no such additional amount shall be required
to be paid to any Lender under clause (iii) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
SECOND LIEN CREDIT AGREEMENT EXECUTION
39
(c) Evidence of Exemption From U.S. Withholding Tax. Each
Lender that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes
(a "NON-US LENDER") shall deliver to Administrative Agent for transmission to
Company, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof on the Closing Date) 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), (i) 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, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to establish that such
Lender is not subject to 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 Credit Documents, or (ii) 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 (i) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender, and such
other documentation required under the Internal Revenue Code and reasonably
requested by Company to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Credit Documents. Each
Lender required to deliver any forms, certificates or other evidence with
respect to United States federal income tax withholding matters pursuant to this
Section 2.18(c) hereby agrees, from time to time after the initial 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
promptly deliver to Administrative Agent for transmission to 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 Internal Revenue
Service Form W-8, as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Company to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence. Company shall not be required to pay any
additional amount to any Non-US Lender under Section 2.18(b)(iii) if such Lender
shall have failed (1) to deliver the forms, certificates or other evidence
referred to in the second sentence of this Section 2.18(c), or (2) to notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence, as the case may be; provided, if such Lender
shall have satisfied the requirements of the first sentence of this Section
2.18(c) on the Closing Date or on the date of the Assignment Agreement pursuant
to which it became a Lender, as applicable, nothing in this last sentence of
Section 2.18(c) shall relieve Company of its obligation to pay any additional
amounts pursuant this Section 2.18 in the event that, as a result of any change
in any applicable law, treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application thereof, such Lender
is no longer properly entitled to deliver forms,
SECOND LIEN CREDIT AGREEMENT EXECUTION
40
certificates or other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described herein.
(d) Treatment of Certain Refunds. If the Administrative Agent,
a Lender or the Issuing Bank determines, in its sole judgment, that it has
received a refund of any Taxes as to which it has been indemnified by the
Company or with respect to which the Company has paid additional amounts
pursuant to this Section 2.18, it shall pay to the Company an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Company under this Section 2.18 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Company, upon the
request of the Administrative Agent, such Lender or the Issuing Bank, agrees to
repay the amount paid over to the Company (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent, such Lender or the Issuing Bank in the event the Administrative Agent,
such Lender or the Issuing Bank is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the
Administrative Agent, any Lender or the Issuing Bank to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to the Company or any other Person.
2.19. OBLIGATION TO MITIGATE. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans 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 payments under Section 2.16, 2.17 or 2.18,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make, issue, fund or maintain its Credit Extensions, including
any Affected Loans, through another office of such Lender, or (b) take such
other measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.16, 2.17 or 2.18 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 office or in
accordance with such other measures, as the case may be, would not otherwise
adversely affect such Loans or the interests of such Lender; provided, such
Lender will not be obligated to utilize such other office pursuant to this
Section 2.19 unless Company agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this Section 2.19 (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.
2.20. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to
the contrary notwithstanding, in the event that: (a) (i) any Lender (an
"INCREASED-COST LENDER") shall give notice to Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.16, 2.17 or 2.18, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such
SECOND LIEN CREDIT AGREEMENT EXECUTION
41
payments shall remain in effect, and (iii) such Lender shall fail to withdraw
such notice within five Business Days after Company's request for such
withdrawal; or (b) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"NON-CONSENTING LENDER") whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender or Non-Consenting Lender
(the "TERMINATED LENDER"), Company may, by giving written notice to
Administrative Agent and any Terminated Lender of its election to do so, elect
to cause such Terminated Lender (and such Terminated Lender hereby irrevocably
agrees) to assign its outstanding Loans, if any, in full to one or more Eligible
Assignees (each a "REPLACEMENT LENDER") in accordance with the provisions of
Section 10.6 and Terminated Lender shall pay any fees payable thereunder in
connection with such assignment; provided, (1) on the date of such assignment,
the Replacement Lender shall pay to Terminated Lender an amount equal to the sum
of (A) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Terminated Lender, and (B) an amount equal to all
accrued, but theretofore unpaid fees owing to such Terminated Lender pursuant to
Section 2.10; (2) on the date of such assignment, Company shall pay any amounts
payable to such Terminated Lender pursuant to Section 2.16(c), 2.17 or 2.18; or
otherwise as if it were a prepayment and (3) in the event such Terminated Lender
is a Non-Consenting Lender, each Replacement Lender shall consent, at the time
of such assignment, to each matter in respect of which such Terminated Lender
was a Non-Consenting Lender. Upon the prepayment of all amounts owing to any
Terminated Lender, such Terminated Lender shall no longer constitute a "Lender"
for purposes hereof; provided, any rights of such Terminated Lender to
indemnification hereunder shall survive as to such Terminated Lender.
SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE. The obligation of any Lender to make a Credit
Extension on the Closing Date is subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions on or before the
Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent
shall have received (i) sufficient copies of each Organizational Document
executed and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender, each dated the Closing Date or a recent date prior
thereto; (ii) signature and incumbency certificates of the officers of such
Person executing the Credit Documents to which it is a party; (iii) resolutions
of the Board of Directors or similar governing body of each Credit Party
approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents and the Related Agreements to which it
is a party or by which it or its assets may be bound as of the Closing Date,
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) a good
standing certificate from the applicable Governmental
SECOND LIEN CREDIT AGREEMENT EXECUTION
42
Authority of each Credit Party's jurisdiction of incorporation, organization or
formation and, subject to Section 5.13(b), in each jurisdiction in which it is
qualified as a foreign corporation or other entity to do business, each dated a
recent date prior to the Closing Date; and (v) such other documents as
Administrative Agent may reasonably request.
(c) Organizational and Capital Structure. The organizational
structure and capital structure of Company and its Subsidiaries shall be as set
forth on Schedules 4.1 and 4.2.
(d) Issuance of Senior Subordinated Notes. On or before the
Closing Date:
(i) Company shall have received the gross proceeds
from the issuance of the Senior Subordinated Notes in an aggregate
amount in cash of not less than $150,000,000;
(ii) Company shall have delivered to Syndication
Agent and Administrative Agent complete, correct and conformed copies
of the Senior Subordinated Note Documents; and
(iii) The proceeds of Senior Subordinated Notes shall
have been irrevocably committed, simultaneously with the application of
the proceeds of the Equity Offering to the payment of the Refinancing.
(e) Revolving Credit Agreement. On or before the Closing Date,
Company shall have delivered to Syndication Agent and Administrative Agent
complete, correct and conformed copies of the Revolving Credit Agreement.
(f) Refinancing. On the Closing Date, Company and its
Subsidiaries shall have (i) repaid in full all Existing Indebtedness, except for
any amounts of the Company's 10.375% senior subordinated notes due 2009 not
tendered as of the Closing Date (the "UNPAID REFINANCING AMOUNT"), (ii)
terminated any commitments to lend or make other extensions of credit
thereunder, (iii) delivered to Syndication Agent and Administrative Agent all
documents or instruments necessary to release all Liens securing Existing
Indebtedness or other obligations of Company and its Subsidiaries thereunder
being repaid on the Closing Date, and (iv) made arrangements satisfactory to
Syndication Agent and Administrative Agent with respect to the cancellation of
any letters of credit outstanding thereunder.
(g) Transaction Costs. On or prior to the Closing Date,
Company shall have delivered to Administrative Agent Company's reasonable best
estimate of the Transactions Costs (other than fees payable to any Agent).
(h) Governmental Authorizations and Consents. Each Credit
Party shall have obtained all Governmental Authorizations and all consents of
other Persons, in each case that are necessary or advisable in connection with
the transactions contemplated by the Credit Documents and the Related Agreements
and each of the foregoing shall be in full force and effect and in form and
substance reasonably satisfactory to Syndication Agent and Administrative Agent.
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 transactions contemplated by the
Credit Documents or the
SECOND LIEN CREDIT AGREEMENT EXECUTION
43
Related Agreements 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.
(i) Real Estate Assets. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid and, subject to
any filing and/or recording referred to herein, perfected Second Priority
security interest in certain Real Estate Assets, Collateral Agent shall have
received from Company and each applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper
form for recording in all appropriate places in all applicable
jurisdictions, encumbering each Real Estate Asset listed in Schedule
3.1(i) (each, a "CLOSING DATE MORTGAGED PROPERTY");
(ii) an opinion of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) in each state in which a
Closing Date Mortgaged Property is located with respect to the
enforceability of the form(s) of Mortgages to be recorded in such state
and such other matters as Collateral Agent may reasonably request, in
each case in form and substance reasonably satisfactory to Collateral
Agent;
(iii) in the case of each Leasehold Property that is
a Closing Date Mortgaged Property, (1) a Landlord Consent and Estoppel
and (2) evidence that such Leasehold Property is a Recorded Leasehold
Interest;
(iv) (a) ALTA mortgagee title insurance policies or
unconditional commitments therefor issued by Commonwealth Land Title
Insurance Company (the "TITLE COMPANY") with respect to each Closing
Date Mortgaged Property (each, a "TITLE POLICY"), in amounts not less
than the agreed-upon values of the Closing Date Mortgaged Properties,
together with a title report issued by the Title Company with respect
thereto, dated not more than thirty days prior to the Closing Date and
copies of all recorded documents listed as exceptions to title or
otherwise referred to therein, each in form and substance reasonably
satisfactory to Collateral Agent and (b) evidence satisfactory to
Collateral Agent that such Credit Party has paid to the Title Company
or to the appropriate Governmental Authorities all expenses and
premiums of the Title Company and all other sums required in connection
with the issuance of each Title Policy and all recording and stamp
taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Mortgages for each Closing Date Mortgaged
Property in the appropriate real estate records; and
(v) evidence of flood insurance with respect to each
Flood Hazard Property that is located in a community that participates
in the National Flood Insurance Program, in each case in compliance
with any applicable regulations of the Board of Governors of the
Federal Reserve System, in form and substance reasonably satisfactory
to Collateral Agent.
SECOND LIEN CREDIT AGREEMENT EXECUTION
44
(j) Personal Property Collateral. In order to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid, perfected
Second Priority security interest in the personal property Collateral,
Collateral Agent shall have received:
(i) evidence satisfactory to Collateral Agent of the
compliance by each Credit Party of their obligations under the Pledge
and Security Agreement and the other Collateral Documents (including,
without limitation, their obligations to execute and deliver UCC
financing statements, originals of securities, instruments and chattel
paper and any agreements perfecting the security interest in the
deposit and/or securities accounts as provided therein);
(ii) A completed Collateral Questionnaire dated the
Closing Date and executed by an Authorized Officer of each Credit
Party, together with all attachments contemplated thereby, including
(A) the results of a recent search, by a Person satisfactory to
Collateral Agent, of all effective UCC financing statements (or
equivalent filings) made with respect to any personal or mixed property
of any Credit Party in the jurisdictions specified in the Collateral
Questionnaire, together with copies of all such filings disclosed by
such search, and (B) UCC amendment financing statements (or similar
documents) duly authorized for filing by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate
any effective UCC financing statements (or equivalent filings)
disclosed in such search (other than any such financing statements in
respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) 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 each jurisdiction in which any Credit Party or any personal
property Collateral is "located" (for purposes of the UCC) and the laws
of other applicable jurisdictions, in each case as Collateral Agent may
reasonably request, in form and substance reasonably satisfactory to
Collateral Agent; and
(iv) evidence that each Credit Party shall have taken
or caused to be taken any other action, executed and delivered or
caused to be executed and delivered any other agreement, document and
instrument required by the Syndication Agent (including without
limitation, any required (i) Landlord Personal Property Collateral
Access Agreement executed by the landlord of any Leasehold Property and
by the applicable Credit Party and (ii) intercompany notes evidencing
Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and
made or caused to be made any other filing and recording (other than as
set forth herein) reasonably required by Collateral Agent.
(k) Environmental Reports. Syndication Agent and
Administrative Agent shall have received reports and other information, if any,
as previously requested in writing by the Syndication Agent. in form, scope and
substance reasonably satisfactory to Syndication Agent and Administrative Agent,
regarding environmental liabilities relating to the Facilities.
(l) Financial Statements, Minimum EBITDA; Projections. Lenders
shall have received from Company (i) the Historical Financial Statements, (ii) a
pro forma consolidated
SECOND LIEN CREDIT AGREEMENT EXECUTION
45
balance sheet of Company and its Subsidiaries as at the Closing Date, and
reflecting the related financings and the other transactions contemplated by the
Credit Documents to occur on or prior to the Closing Date, which pro forma
financial statements shall be in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent and shall demonstrate Consolidated
Adjusted EBITDA of not less than $99,000,000 for the twelve-month period ended
December 31, 2003, and (iii) the Projections.
(m) Evidence of Insurance. 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
Section 5.5 is in full force and effect and that Collateral Agent, for the
benefit of Lenders has been named as additional insured and loss payee
thereunder to the extent required under Section 5.5.
(n) Equity Offering. On or before the Closing Date, the
proceeds of the Equity Offering shall have been irrevocably committed,
simultaneously with the application of the proceeds of the Senior Subordinated
Notes, to the payment of the Refinancing. The terms of the Equity Offering and
the agreements related thereto shall be satisfactory to each of Syndication
Agent and Administrative Agent.
(o) Related Agreements; Designated Contracts. Syndication
Agent and Administrative Agent shall each have received a fully executed or
conformed copy of the Related Agreements and the Designated Contracts and any
documents executed in connection therewith, together with, in the case of the
Related Agreements, copies of each of the opinions of counsel delivered to the
parties under the Related Agreements. There shall be no defaults or events of
default (as may be defined in the applicable Related Agreement or Designated
Contract) under any Related Agreements or Designated Contracts and each Related
Agreement and Designated Contract shall be in full force and effect and no
provision thereof shall have been modified or waived in any respect reasonably
determined by Syndication Agent or Administrative Agent to be materially adverse
to Company or the Lenders, in each case without the consent of the Syndication
Agent or Administrative Agent.
(p) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of those counsel for Credit Parties set forth on
Schedule 3.1(p), in the form of Exhibit D and as to such other matters as
Administrative Agent or Syndication Agent may reasonably request, dated as of
the Closing Date and otherwise in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent (and each Credit Party hereby
instructs such counsel to deliver such opinions to Agents and Lenders).
(q) Fees. Company shall have paid to Syndication Agent and
Administrative Agent the fees payable on the Closing Date referred to in Section
2.10.
(r) Closing Date Certificate. Company shall have delivered to
Syndication Agent and Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
SECOND LIEN CREDIT AGREEMENT EXECUTION
46
(s) Credit Rating. The credit facilities provided for under
this Agreement shall have been assigned a credit rating by S&P and ▇▇▇▇▇'▇ in
each case satisfactory to the Agents.
(t) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent
and Syndication Agent, singly or in the aggregate, materially impairs the
transactions contemplated by the Credit Documents or the Related Agreements, or
that could reasonably be expected to have a Material Adverse Effect.
(u) Completion of Proceedings. All partnership, 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 or Syndication Agent and its counsel shall be
reasonably satisfactory in form and substance to Administrative Agent and
Syndication Agent and such counsel, and Administrative Agent, Syndication Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent or Syndication Agent may
reasonably request.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2. FURTHER CONDITIONS TO ALL TERM LOANS.
(a) Conditions Precedent. The obligation of each Lender to
make any Loan on the Closing Date is subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions precedent:
(i) Administrative Agent shall have received a fully
executed and delivered Funding Notice;
(ii) the representations and warranties contained
herein and in the other Credit Documents shall be true and correct in
all material respects on and as of that Credit 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
and correct in all material respects on and as of such earlier date,
and except as to changes otherwise expressly permitted by the terms of
the Credit Documents; and
(iii) no event shall have occurred and be continuing
or would result from the consummation of the Credit Extension that
would constitute an Event of Default or a Default.
(b) Notices. Any Notice shall be executed by an Authorized
Officer in a writing delivered to Administrative Agent. In lieu of delivering a
Notice, Company may give Administrative Agent telephonic notice by the required
time of any proposed borrowing or conversion/continuation, as the case may be;
provided each such notice shall be promptly
SECOND LIEN CREDIT AGREEMENT EXECUTION
47
confirmed in writing by delivery of the applicable Notice to Administrative
Agent on or before the applicable date of borrowing, continuation/conversion or
issuance. 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 on behalf of Company or for
otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
each Credit Extension to be made thereby, each Credit Party represents and
warrants to each Lender, on the Closing Date, that the following statements are
true and correct (it being understood and agreed that the representations and
warranties made on the Closing Date are deemed to be made concurrently with the
consummation of Refinancing contemplated hereby):
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each
of Company and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite 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 Credit Documents to which it is a party and to
carry out the transactions contemplated thereby, and (c) 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 could not be reasonably expected to have, a Material Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of Company
and its Subsidiaries has been duly authorized and validly issued and is fully
paid and non-assessable. Except as set forth on Schedule 4.2, as of the Closing
Date, there is no existing option, warrant, call, right, commitment or other
agreement to which Company or any of its Subsidiaries is a party requiring, and
there is no membership interest or other Capital Stock of Company or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Company or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Company or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Company or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Company and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date.
4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4. NO CONFLICT. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, any of the Organizational
Documents of Company or any of its Subsidiaries, or any order, judgment or
SECOND LIEN CREDIT AGREEMENT EXECUTION
48
decree of any court or other agency of government binding on Company or any of
its Subsidiaries except to the extent such violation could not be reasonably
expected to have a Material Adverse Effect; (b) 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 Company or any of its Subsidiaries except to
the extent such conflict, breach or default could not reasonably be expected to
have a Material Adverse Effect; (c) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than any Liens created under any of the Credit Documents
in favor of Collateral Agent, on behalf of Secured Parties and Liens securing
obligation under the Revolving Credit Agreement pursuant to Section 6.2(n)); or
(d) require any approval of stockholders, members or partners or any approval or
consent of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders and except for any
such approvals or consents the failure of which to obtain will not have a
Material Adverse Effect.
4.5. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit 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 Governmental Authority except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Collateral Agent for filing and/or recordation, as of the Closing Date.
4.6. BINDING OBLIGATION. Each Credit Document has been duly executed
and delivered by each Credit Party that is a party thereto and is the legally
valid and binding obligation of such Credit Party, enforceable against such
Credit 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.
4.7. HISTORICAL FINANCIAL STATEMENTS. The Historical Financial
Statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position, on a consolidated basis, of the
Persons 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 changes resulting
from audit and normal year-end adjustments. As of the Closing Date, neither
Company nor any of its Subsidiaries has any contingent liability or liability
for taxes, long-term lease or unusual forward or long-term commitment that is
not reflected in the Historical Financial Statements 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 any of its Subsidiaries taken as a whole.
4.8. PROJECTIONS. On and as of the Closing Date, the Projections of
Company and its Subsidiaries for the period Fiscal Year 2003 through and
including Fiscal Year 2009 (the "PROJECTIONS") are based on good faith estimates
and assumptions believed by the management of Company reasonable based on the
information available; provided, the Projections are not to be viewed as facts
and that actual results during the period or periods covered by the Projections
may differ from such Projections and that the differences may be material.
SECOND LIEN CREDIT AGREEMENT EXECUTION
49
4.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 2002, no event,
circumstance or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect.
4.10. NO RESTRICTED JUNIOR PAYMENTS. Since September 30, 2003, 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 would have been permitted pursuant
to Section 6.5.
4.11. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (a) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, 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 have a
Material Adverse Effect.
4.12. PAYMENT OF TAXES. Except as otherwise permitted under Section
5.3, 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 taxes shown
on such tax returns to be due and payable and all 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 prior to delinquency. Company knows of no tax payment delinquency
of Company or any of its Subsidiaries which is not being actively contested by
Company or such Subsidiary in good faith and by appropriate proceedings;
provided, such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.
4.13. PROPERTIES.
(a) Title. Each of Company and its Subsidiaries has (i) good,
sufficient and legal 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), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the pro
forma consolidated balance sheet of Company referred to in Section 3.1(l)(ii)
or, as and when available, in the most recent financial statements delivered
pursuant to Section 5.1, 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 Section 6.9. Except as permitted by this Agreement,
all such properties and assets are free and clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13
contains true and complete lists of all owned Facilities and all leased
Facilities.
4.14. ENVIRONMENTAL MATTERS. Neither Company nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to
any outstanding written order, consent
SECOND LIEN CREDIT AGREEMENT EXECUTION
50
decree or settlement agreement with any Person relating to any Environmental
Law, any Environmental Claim, or any Hazardous Materials Activity that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries has
received 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 any comparable state law. There are and, to each of Company's
and its Subsidiaries' knowledge, have been, no conditions, occurrences, or
Hazardous Materials Activities which could reasonably be expected to form the
basis of an Environmental Claim against Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries has filed
any notice under any Environmental Law indicating past or present treatment of
Hazardous Materials at any Facility, and none of Company's or any of its
Subsidiaries' operations involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent not in compliance with applicable Environmental Laws.
Compliance with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws could not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. No event or
condition has occurred or is occurring with respect to Company or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity which individually or in the
aggregate has had, or could reasonably be expected to have, a Material Adverse
Effect.
4.15. NO DEFAULTS. 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 which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
4.16. MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts 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, could not
reasonably be expected to have a Material Adverse Effect.
4.17. 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 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. Neither Company nor any of its Subsidiaries is
a "registered investment company" or a company "controlled" by a "registered
investment company" or a "principal underwriter" of a "registered investment
company" as such terms are defined in the Investment Company Act of 1940.
4.18. MARGIN STOCK. 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. No
part of the proceeds of the Loans made to such Credit Party will be used to
purchase or carry any such margin stock or to extend credit
SECOND LIEN CREDIT AGREEMENT EXECUTION
51
to others for the purpose of purchasing or carrying any such margin stock or for
any purpose that violates, or is inconsistent with, the provisions of Regulation
T, U or X of said Board of Governors.
4.19. EMPLOYEE MATTERS. Neither Company nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Company or any of its Subsidiaries, or to the best knowledge of Company,
threatened against any of them before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against Company or any of its
Subsidiaries or, to the best knowledge of Company, threatened against any of
them, (b) no strike or work stoppage in existence, or, to the best knowledge of
Company, threatened involving Company or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, and (c) to the best
knowledge of Company, no union representation question existing with respect to
the employees of Company or any of its Subsidiaries and, to the best knowledge
of Company, no union organization activity that is taking place, except (with
respect to any matter specified in clause (a), (b) or (c) above, either
individually or in the aggregate) such as is not reasonably likely to have a
Material Adverse Effect.
4.20. EMPLOYEE BENEFIT PLANS. Company, each of its Subsidiaries and
each of their respective ERISA Affiliates are in compliance in all material
respects with all applicable provisions and requirements of ERISA and the
Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their material obligations under each Employee Benefit Plan. Each Employee
Benefit Plan which is intended to qualify under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal
Revenue Service with respect to all applicable laws in which the Internal
Revenue Service will issue favorable determination letters (or such Employee
Benefit Plan has been or will be timely filed within the remedial amendment
period to enable it to correct any qualification issues raised) and nothing has
occurred subsequent to the issuance of such determination letter which would
cause such Employee Benefit Plan to lose its qualified status. No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Employee Benefit Plan (other than for routine and
reasonable claims for benefits in the ordinary course) or any trust established
under Title IV of ERISA has been or is expected to be incurred by Company, any
of its Subsidiaries or any of their ERISA Affiliates. No ERISA Event has
occurred or is reasonably expected to occur. Except to the extent required under
Section 4980B of the Internal Revenue Code or similar state laws, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates. The present value
of the aggregate benefit liabilities under each Pension Plan sponsored,
maintained or contributed to by Company, any of its Subsidiaries or any of their
ERISA Affiliates, (determined as of the end of the most recent plan year on the
basis of the actuarial assumptions specified for funding purposes in the most
recent actuarial valuation for such Pension Plan), did not materially exceed the
aggregate current value of the assets of such Pension Plan. As of the most
recent valuation date for each Multiemployer Plan for which the actuarial report
is available, the potential liability of Company, its Subsidiaries and their
respective ERISA Affiliates for a complete withdrawal from such Multiemployer
Plan (within the meaning of Section 4203 of ERISA), when aggregated with such
potential liability for a
SECOND LIEN CREDIT AGREEMENT EXECUTION
52
complete withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA is not material. Company, each of its
Subsidiaries and each of their ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan and
are not in material "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan.
4.21. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
4.22. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.23. RELATED AGREEMENTS.
(a) Delivery. Company has delivered to Syndication Agent and
Administrative Agent complete and correct copies of each Related Agreement and
of all exhibits and schedules thereto as of the date hereof.
(b) Representations and Warranties. Except to the extent
otherwise expressly set forth herein or in the schedules hereto, and subject to
the qualifications set forth therein, each of the representations and warranties
given by any Credit Party in any Related Agreement is true and correct in all
material respects as of the Closing Date (or as of any earlier date to which
such representation and warranty specifically relates). Notwithstanding anything
in the Related Agreement to the contrary, the representations and warranties of
each Credit Party set forth in this Section 4.23 shall, solely for purposes
hereof, survive the Closing Date for the benefit of Lenders.
(c) Governmental Approvals. All Governmental Authorizations
and all other authorizations, approvals and consents of any other Person
required by the Related Agreements or to consummate the Refinancing have been
obtained and are in full force and effect.
(d) Conditions Precedent. On the Closing Date, (i) all of the
conditions to effecting or consummating the Refinancing set forth in the Related
Agreements have been duly satisfied or, with the consent of Administrative Agent
and Syndication Agent, waived, and (ii) the Refinancing has been consummated,
except with respect to the Unpaid Refinancing Amount, in accordance with the
Related Agreements and all applicable laws.
4.24. COMPLIANCE WITH STATUTES, ETC. Each of Company and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
property (including compliance with all applicable Environmental Laws with
respect to any Real Estate Asset or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Estate Asset or the operations of Company or any of its Subsidiaries),
except such non-compliance that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECOND LIEN CREDIT AGREEMENT EXECUTION
53
4.25. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated hereby
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 either of
them) 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. 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 not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby (including, without limitation, in the offering circular for the Senior
Subordinated Notes).
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Commitment
is in effect and until payment in full of all Obligations, each Credit Party
shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Company will deliver to
Administrative Agent and Lenders:
(a) Quarterly Financial Statements. As soon as available, and
in any event within forty-five (45) days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, the consolidated balance sheet of
Company and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of income, stockholders' equity and cash flows
of Company and its 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,
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,
together with a Financial Officer Certification and a Narrative Report with
respect thereto;
(b) Annual Financial Statements. As soon as available, and in
any event within ninety (90) days after the end of each Fiscal Year, (i) the
consolidated balance sheet of Company and its Subsidiaries as at the end of such
Fiscal Year and the related consolidated statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such Fiscal Year,
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, in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto; and (ii) with respect to such consolidated financial
SECOND LIEN CREDIT AGREEMENT EXECUTION
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statements a report thereon of PricewaterhouseCoopers LLP or other independent
certified public accountants of recognized national standing selected by
Company, and reasonably satisfactory to Administrative Agent (which report shall
be unqualified as to going concern and scope of audit, 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) together with a written statement by such independent
certified public accountants stating whether, in connection therewith, any
condition or event that constitutes a Default or an Event of Default 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 (it being understood that
such audit examination extended only to financial accounting matters and that no
special or separate investigation was made with respect to the existence of any
Defaults or Events of Default generally);
(c) Compliance Certificate. Together with each delivery of
financial statements of Company and its Subsidiaries pursuant to Sections 5.1(a)
and 5.1(b), a duly executed and completed Compliance Certificate;
(d) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to Section 5.1(a) or 5.1(b) 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, together with the first delivery of such financial statements after
such change, one or more statements of reconciliation for all such prior
financial statements in form and substance reasonably satisfactory to
Administrative Agent;
(e) Notice of Default. Promptly upon any officer of Company
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to Company with respect
thereto; (ii) that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to any event or condition
set forth in Section 8.1(b); or (iii) 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, a certificate of its Authorized Officers specifying the nature
and period of existence of such condition, event or change, or specifying the
notice given and action taken by any such Person and the nature of such claimed
Event of Default, Default, default, event or condition, and what action Company
has taken, is taking and proposes to take with respect thereto;
(f) Notice of Litigation. Promptly upon any officer of Company
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Adverse Proceeding not previously disclosed in writing by Company to Lenders, or
(ii) any material development in any Adverse Proceeding that, in the case of
either (i) or (ii) could be reasonably expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of, or to
SECOND LIEN CREDIT AGREEMENT EXECUTION
55
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;
(g) ERISA. (i) 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, any of its Subsidiaries or any of their
respective 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; and
(ii) with reasonable promptness, (1) after the Administrative Agent's written
request therefor, each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with respect to
each Pension Plan; (2) copies of all notices received by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; and (3) copies of such other documents
or governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(h) Financial Plan. As soon as practicable and in any event no
later than thirty days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and each Fiscal Year (or
portion thereof) through the final maturity date of the Loans (a "FINANCIAL
PLAN"), including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Company and its Subsidiaries
for each such Fiscal Year, together with pro forma Compliance Certificates for
each such Fiscal Year and an explanation of the assumptions on which such
forecasts are based, (ii) forecasted consolidated statements of income and cash
flows of Company and its Subsidiaries for each Fiscal Quarter of each such
Fiscal Year, (iii) forecasts with respect to the financial covenants set forth
in Section 6.8 through the final maturity date of the Loans and (iv) forecasts
of liquidity through the final maturity date of the Loans, together, in each
case, with an explanation of the assumptions on which such forecasts are based
all in form and substance reasonably satisfactory to Agents;
(i) Insurance Report. As soon as practicable and in any event
by the last day of each Fiscal Year, a report in form and substance reasonably
satisfactory to Administrative Agent outlining all material insurance coverage
maintained as of the date of such report 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;
(j) Notice of Change in Board of Directors. Written notice of
any change in the board of directors (or similar governing body) of Company;
(k) Notice Regarding Material Contracts. Promptly, and in any
event within thirty days (i) 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 (ii) any new Material
Contract is entered into, a written statement describing such event, with copies
of such material amendments or new contracts, delivered to Administrative Agent
(to the extent such delivery is permitted by the terms of any such Material
Contract, provided, no such prohibition on delivery shall be effective if it
were bargained for by Company or its
SECOND LIEN CREDIT AGREEMENT EXECUTION
56
applicable Subsidiary with the intent of avoiding compliance with this Section
5.1(k)), and an explanation of any actions being taken with respect thereto;
(l) Environmental Reports and Audits. As soon as practicable
following receipt thereof, copies of all environmental audits and reports with
respect to environmental liabilities of Company or its Subsidiaries which, in
any such case, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;
(m) Information Regarding Collateral. (a) Company will furnish
to Collateral Agent prompt written notice of any change (i) in any Credit
Party's corporate name, (ii) in any Credit Party's identity or corporate
structure or (iii) in any Credit Party's Federal Taxpayer Identification Number
or organizational identification number. Company agrees not to effect or permit
any change referred to in the preceding sentence unless all filings have been
made under the Uniform Commercial Code or otherwise that are required in order
for Collateral Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral and for the
Collateral at all times following such change to have a valid, legal and
perfected security interest as contemplated in the Collateral Documents. Company
also agrees promptly to notify Collateral Agent if any material portion of the
Collateral is damaged or destroyed;
(n) Annual Collateral Verification. Each year, at the time of
delivery of annual financial statements with respect to the preceding Fiscal
Year pursuant to Section 5.1(b), Company shall deliver to Collateral Agent an
Officer's Certificate (i) either confirming that there has been no change in
such information since the date of the Collateral Questionnaire delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section and/or identifying such changes, and (ii) confirming or authorizing
the filing of any additional Uniform Commercial Code financing statements
(including fixtures filings, as applicable) or other appropriate filings,
recordings or registrations, of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security interests under the
Collateral Documents; and
(o) Other Information. (A) Promptly upon their becoming
available, copies of (i) all financial statements, reports, notices and proxy
statements sent or made available generally by Company to its security holders
acting in such capacity or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, and (ii) all regular and
periodic reports and all registration statements and 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 (B) 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 or any Lender.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, no Credit
Party or any of its Subsidiaries shall be required to preserve any such
existence, right or franchise, licenses and permits if such Person's senior
management or board of directors (or similar governing body) shall determine
that the preservation thereof is no longer desirable in the
SECOND LIEN CREDIT AGREEMENT EXECUTION
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conduct of the business of such Person, and that the loss thereof is not
disadvantageous in any material respect to such Person or to Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will
cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, and (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax or claim. No
Credit Party will, nor will it 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).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party 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 material
properties used or useful in the business of Company and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5.5. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Company will maintain
or cause to be maintained (a) flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of
the Board of Governors of the Federal Reserve System, and (b) replacement value
casualty insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses. Each such
policy of insurance shall (i) in the case of each liability insurance policy,
name Administrative Agent, on behalf of Lenders as an additional insured
thereunder as its interests may appear and (ii) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Administrative Agent, that names Administrative Agent, on
behalf of Lenders as the loss payee thereunder and provides for at least thirty
days' prior written notice to Administrative Agent of any modification or
cancellation of such policy.
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58
5.6. INSPECTIONS. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of any Credit Party and any of its
respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested.
5.7. LENDERS MEETINGS. 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 at 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.
5.8. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall
cause each of its Subsidiaries and all other Persons, if any, on or occupying
any Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Company will deliver to
Administrative Agent and Lenders:
(i) as soon as practicable following receipt thereof,
copies of all environmental audits, investigations, analyses and
reports of any kind or character, whether prepared by personnel of
Company or any of its Subsidiaries or by independent consultants,
governmental authorities or any other Persons, with respect to material
environmental liabilities at any Facility or with respect to any
Environmental Claims;
(ii) promptly upon the occurrence thereof, written
notice describing in reasonable detail (1) any Release required to be
reported to any federal, state or local governmental or regulatory
agency under any applicable Environmental Laws, (2) any remedial action
taken by Company or any other Person in response to (A) any Hazardous
Materials Activities the existence of which could reasonably be
expected to result in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect, and
(3) Company's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any material Facility that
could 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;
(iii) as soon as practicable following the sending or
receipt thereof by Company or any of its Subsidiaries, a copy of any
and all written communications with respect to (1) any Environmental
Claims that, individually or in the aggregate, have a
SECOND LIEN CREDIT AGREEMENT EXECUTION
59
reasonable possibility of giving rise to a Material Adverse Effect,
(2) any Release required to be reported to any federal, state or local
governmental or regulatory agency, and (3) 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 any Hazardous Materials Activity which
could reasonably be expected to have a Material Adverse Effect;
(iv) prompt written notice describing in reasonable
detail (1) any proposed acquisition of stock, assets, or property by
Company or any of its Subsidiaries that could reasonably be expected to
(A) expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or (B)
affect the ability of Company or any of its Subsidiaries to maintain in
full force and effect all material Governmental Authorizations required
under any Environmental Laws for their respective operations and (2)
any proposed action to be taken by Company or any of its Subsidiaries
to modify current operations in a manner that could reasonably be
expected to have a Material Adverse Effect; and
(v) with reasonable promptness, such other documents
and information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to
this Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party
shall promptly take, and shall cause each of its Subsidiaries promptly to take,
any and all actions necessary to (i) cure any violation of applicable
Environmental Laws by such Credit Party or its Subsidiaries that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and (ii) make an appropriate response to any Environmental Claim
against such Credit Party or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder where failure to do so could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
5.10. SUBSIDIARIES. In the event that any Person becomes a Domestic
Subsidiary of Company, Company shall (a) promptly cause such Domestic Subsidiary
to become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b), 3.1(i), 3.1(j) and 3.1(m). In the event that any Person becomes a
Foreign Subsidiary of Company, and the ownership interests of such Foreign
Subsidiary are owned by Company or by any Domestic Subsidiary thereof, Company
shall, or shall cause such Domestic Subsidiary to, deliver, all such documents,
instruments, agreements, and certificates as are similar to those described in
Sections 3.1(b), and Company shall take, or shall cause such Domestic Subsidiary
to take, all of the actions referred to in Section 3.1(j)(i) necessary to grant
and to perfect a Second Priority Lien in favor of Collateral Agent, for the
benefit of Secured Parties, under the Pledge and Security Agreement in 65% of
such ownership interests. With respect to each such Subsidiary, Company shall
promptly send to Administrative Agent written notice setting forth with respect
to such Person (i) the date on which such Person became a Subsidiary of Company,
SECOND LIEN CREDIT AGREEMENT EXECUTION
60
and (ii) all of the data required to be set forth in Schedules 4.1 and 4.2 with
respect to all Subsidiaries of Company; provided, such written notice shall be
deemed to supplement Schedules 4.1 and 4.2 for all purposes hereof.
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS.
(i) With respect to any Leasehold Property leased by a Credit Party as
of the Closing Date, but which has not otherwise been made subject to the Lien
of the Collateral Documents in favor of Collateral Agent, for the benefit of
Secured Parties, each such Credit Party shall use its commercially reasonable
efforts to take all such actions and execute and deliver, or cause to be
executed and delivered, all such mortgages, documents, instruments, agreements,
opinions and certificates similar to those described in Section 3.1(i) with
respect to each such Leasehold Property to create in favor of Collateral Agent,
for the benefit of Secured Parties, a valid and, subject to any filing and/or
recording referred to herein, perfected Second Priority security interest in
such Leasehold Property.
(ii) In the event that any Credit Party acquires a Material Real Estate
Asset or a Real Estate Asset owned or leased on the Closing Date becomes a
Material Real Estate Asset and such interest has not otherwise been made subject
to the Lien of the Collateral Documents in favor of Collateral Agent, for the
benefit of Secured Parties, then such Credit Party, contemporaneously with
acquiring such Material Real Estate Asset, shall take all such actions and
execute and deliver, or cause to be executed and delivered, all such mortgages,
documents, instruments, agreements, opinions and certificates similar to those
described in Section 3.1(i) with respect to each such Material Real Estate Asset
that Collateral Agent shall reasonably request to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected Second Priority security interest
in such Material Real Estate Assets; provided, however, that with respect to any
Material Real Estate Asset that is leased, no such requirement shall be
applicable if (i) Company is unable to obtain any requisite consent or agreement
of the lessor after Company uses its commercially reasonable efforts to procure
such consent or agreement and (ii) the Administrative Agent consents to the
inapplicability of such requirement (such consent not to be unreasonably
withheld). In addition to the foregoing, Company shall, at the request of
Requisite Lenders, deliver, from time to time, to Administrative Agent such
appraisals as are required by law or regulation of Real Estate Assets adopted
after the Closing Date with respect to which Collateral Agent has been granted a
Lien.
5.12. INTEREST RATE PROTECTION. No later than ninety (90) days
following the Closing Date and at all times thereafter until the second
anniversary of the Closing Date, Company shall maintain, or caused to be
maintained, if necessary, protection against fluctuations in interest rates
either pursuant to one or more Interest Rate Agreements in form and substance
reasonably satisfactory to Administrative Agent or otherwise, in order to ensure
that no less than 50% of the aggregate principal amount of the total
Indebtedness of Company and its Subsidiaries is either (i) subject to such
Interest Rate Agreements or (ii) fixed rate Indebtedness.
5.13. FURTHER ASSURANCES. (a) At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent or
SECOND LIEN CREDIT AGREEMENT EXECUTION
61
Collateral Agent may reasonably request in order to effect fully the purposes of
the Credit Documents, including providing Lenders with any information requested
pursuant to Section 10.21. In furtherance and not in limitation of the
foregoing, each Credit Party shall take such actions as Administrative Agent or
Collateral Agent may reasonably request from time to time to ensure that the
Obligations are guarantied by the Guarantors and are secured by substantially
all of the assets of Company, and its Subsidiaries and all of the outstanding
Capital Stock of Company and its Subsidiaries (subject to limitations contained
in the Credit Documents with respect to Foreign Subsidiaries).
(b) No later than one hundred twenty (120) days after the Closing Date,
the Company shall have delivered to Administrative Agent a good standing
certificate from the applicable Tennessee Governmental Authority with respect to
the Company's and/or any of its Subsidiaries', as applicable, qualification to
conduct business in Tennessee.
5.14. POST-CLOSING REFINANCING. Within forty-five (45) Business Days of
the Closing Date, the Company shall repay in full the Unpaid Refinancing Amount.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, until payment in full of
all Obligations, such Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, issue, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness; provided, however, that any Credit Party shall be
permitted to create, incur, issue, assume or guaranty any such Indebtedness if,
on the date of such creation, incurrence, issuance, assumption or guaranty and
after giving pro forma effect thereto, (i) no Default or Event of Default shall
have occurred and be continuing or would occur after giving effect to such
creation, incurrence, issuance, assumption or guaranty, and (ii) the Fixed
Charge Coverage Ratio as of the date of such creation, incurrence, issuance,
assumption or guaranty is greater than or equal to 2.0:1.0; provided, further,
notwithstanding the first part of this sentence, Credit Parties may create,
incur, issue, assume or guaranty the following types of Indebtedness:
(a) the Obligations;
(b) Indebtedness of any Guarantor Subsidiary to Company or to
any other Guarantor Subsidiary, or of Company to any Guarantor Subsidiary;
provided, (i) if so requested in writing by the Administrative Agent, all such
Indebtedness shall be evidenced by promissory notes and all such notes shall be
subject to a Second Priority Lien pursuant to the Pledge and Security Agreement,
(ii) all such Indebtedness shall be unsecured and subordinated in right of
payment to the payment in full of the Obligations pursuant to the terms of the
applicable promissory notes or an intercompany subordination agreement that in
any such case, is reasonably satisfactory to Administrative Agent, and (iii) any
payment by any such Guarantor Subsidiary under any guaranty of the Obligations
shall result in a pro tanto reduction of the
SECOND LIEN CREDIT AGREEMENT EXECUTION
62
amount of any Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made;
(c) Indebtedness owed under the Senior Subordinated Notes in
an aggregate principal amount not to exceed $150,000,000, and Indebtedness
incurred to refinance, renew or replace such Indebtedness in whole or in part;
provided that, (i) the terms and conditions of such Indebtedness, taken as a
whole, are no less favorable in any material respect to the obligors or the
Lenders thereon than the Senior Subordinated Note Indenture, (ii) such
refinancing, renewal or replacement is incurred only by the Person who is the
obligor on the Senior Subordinated Notes being refinanced, renewed or replaced
and (iii) the average life to maturity thereof is greater than or equal to that
of the Senior Subordinated Notes;
(d) the Revolving Loans owed under the Revolving Credit
Agreement in an aggregate principal amount of $50,000,000, and Indebtedness
incurred to refinance, renew or replace such Indebtedness in whole or in part;
provided that any refinancing thereof shall be in a principal aggregate amount
not to exceed $60,000,000;
(e) Indebtedness incurred by Company or any of its
Subsidiaries arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from guaranties or letters of
credit, surety bonds or performance bonds securing the performance of Company or
any such Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or Subsidiary of
Company or any of its Subsidiaries;
(f) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations, or
workers' compensation or self-insurance obligations, incurred in the ordinary
course of business;
(g) Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(h) guaranties in the ordinary course of business of the
obligations of suppliers, customers, franchisees and licensees of Company and
its Subsidiaries;
(i) guaranties by Company of Indebtedness of a Guarantor
Subsidiary or guaranties by a Subsidiary of Company of Indebtedness of Company
or a Guarantor Subsidiary with respect, in each case, to Indebtedness otherwise
permitted to be incurred pursuant to this Section 6.1;
(j) Indebtedness described in Schedule 6.1, but not any
extensions, renewals or replacements of such Indebtedness except (i) renewals
and extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this Agreement and (ii)
refinancings and extensions of any such Indebtedness if the terms and conditions
thereof, taken as a whole, are not less favorable in any material respect to the
obligor thereon or to the Lenders than the Indebtedness being refinanced or
extended, and the average life to maturity thereof is greater than or equal to
that of the Indebtedness being refinanced or extended; provided, such
Indebtedness permitted under the immediately preceding clause (i) or (ii) above
shall not (A) include Indebtedness of an obligor that was not an obligor with
respect to
SECOND LIEN CREDIT AGREEMENT EXECUTION
63
the Indebtedness being extended, renewed or refinanced, (B) exceed in a
principal amount the Indebtedness being renewed, extended or refinanced or (C)
incurred, created or assumed if any Default or Event of Default has occurred and
is continuing or would result therefrom;
(k) Indebtedness with respect to Capital Leases and purchase
money Indebtedness (provided such purchase money Indebtedness shall constitute
not less than 75% of the aggregate consideration paid with respect to the assets
purchased or constructed with such purchase money Indebtedness) in an aggregate
amount not to exceed at any time $12,500,000, and all extensions, renewals,
refinancings, and replacements of any such Indebtedness, in whole or in part,
that do not increase the outstanding principal amount thereof or result if an
earlier maturity date or decreased weighted average life thereof; provided any
such Indebtedness shall not be secured by any assets other than those assets
(including replacements and proceeds thereof and, in the case of development and
construction activities, the related real property) acquired, developed or
constructed in connection with the incurrence of such Indebtedness;
(l) Indebtedness of any Persons that become Subsidiaries after
the date hereof, or that is secured by any property or assets acquired after the
date hereof, in all cases pursuant to Permitted Acquisitions in an aggregate
amount not to exceed $12,500,000, together with all extensions, renewals,
replacements and refinancings of any such Indebtedness, in whole or in part,
that do not increase the outstanding principal amount thereof or result in an
earlier maturity date or decreased weighted average life thereof; provided that
such Indebtedness exists at the time of such Permitted Acquisition and is not
created in contemplation of or in connection with such Permitted Acquisition;
and
(m) other unsecured Indebtedness of Company and its
Subsidiaries in an aggregate amount not to exceed at any time $7,500,000.
6.2. LIENS. No Credit Party shall, nor shall it 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 UCC of any State or under any similar recording or notice
statute, except:
(a) Subject to the terms of the Intercreditor Agreement, Liens
in favor of Collateral Agent for the benefit of Secured Parties granted pursuant
to any Credit Document;
(b) Liens for Taxes that are not delinquent or if obligations
with respect to such Taxes are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted;
(c) statutory Liens of landlords, banks (and rights of
set-off), of carriers, warehousemen, mechanics, repairmen, workmen and
materialmen, and other Liens imposed by law (other than any such Lien imposed
pursuant to Section 401 (a)(29) or 412(n) of the Internal Revenue Code or by
ERISA), in each case incurred in the ordinary course of business (i) for
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64
amounts overdue for a period in excess of thirty days) are being contested in
good faith by appropriate proceedings, so long as such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made for any such contested amounts;
(d) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment 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 or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and
other defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any lease
of real estate permitted hereunder;
(g) Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by
Company or any of its Subsidiaries in connection with any letter of intent or
purchase agreement not prohibited hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases, bailments and
consignments of personal property entered into in the ordinary course of
business;
(i) 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;
(j) any zoning or similar law or right reserved to or vested in
any governmental office or agency to control or regulate the use of any real
property;
(k) 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 respect with the ordinary conduct
of the business of Company or such Subsidiary;
(l) Liens described in Schedule 6.2 or on a title report delivered
pursuant to Section 3.1(i)(iv), and any Liens created, granted, or filed in
respect of any extensions, renewals, replacements, or refinancings of the
obligations secured by such Liens that do not increase the outstanding principal
amount thereof or extend to any additional property or assets;
(m) Liens securing Indebtedness permitted pursuant to 6.1(k) and
(l); provided, with respect to Liens securing Indebtedness permitted pursuant to
6.1(k) and (l), any such Lien shall encumber only the assets acquired with the
proceeds of such Indebtedness or pursuant to such Permitted Acquisition, as the
case may be;
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65
(n) Liens on the collateral securing obligations under the
Revolving Credit Agreement;
(o) Liens in effect as of the Closing Date on furniture, trade
fixtures, equipment and other tangible property in favor of landlords and
lessors of theatre Facilities to secure obligations owing under the leases for
such Facilities, provided that such Liens apply only to such tangible property
located at such leased Facilities;
(p) Liens in respect of judgments or other legal process that do
not constitute an Event of Default pursuant to Section 8.1(h); and
(q) other Liens on assets other than the Collateral securing
Indebtedness in an aggregate amount not to exceed $5,000,000 at any time
outstanding.
6.3. EQUITABLE LIEN. If any Credit Party 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 Permitted Liens, it shall make or cause
to be made effective provisions 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, 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 otherwise permitted
hereby.
6.4. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale, (b)
restrictions by reason of customary provisions restricting Liens, assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business (provided that such
restrictions are limited to the property or assets secured by such Liens or the
property or assets subject to such leases, licenses or similar agreements, as
the case may be), (c) as otherwise provided in the Senior Subordinated Note
Documents and (d) as otherwise provided herein or in the Revolving Credit
Agreement, no Credit Party nor any of its Subsidiaries shall enter into any
agreement prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, to secure the
Obligations.
6.5. RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it permit
any of its Subsidiaries or Affiliates through any manner or means or through any
other Person to, directly or indirectly, declare, order, pay, make or set apart,
or agree to declare, order, pay, make or set apart, any sum for any Restricted
Junior Payment except that
(a) Company may make regularly scheduled payments of interest in
respect of the Senior Subordinated Notes in accordance with the terms of, and
only to the extent required by, and subject to the subordination provisions
contained in the Senior Subordinated Note Indenture;
(b) the Company may make (i) required payments of principal and
interest in respect of the Indebtedness incurred under the Revolving Credit
Agreement and any refinancing thereof permitted thereunder and hereunder;
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66
(c) so long as no Event of Default shall have occurred and be
continuing or shall be caused thereby, Company may make other additional
Restricted Junior Payments that are not otherwise permitted pursuant to this
Section 6.5 to the extent such restricted Junior Payments would be permitted
under Section 4.07 of the Senior Subordinated Note Indenture, as in effect on
the Closing Date, at the time of such Restricted Junior Payments; and
(d) the Company may make Restricted Junior Payments to the extent
necessary to pay the Unpaid Refinancing Amount, if any, provided such Restricted
Junior Payment is made within forty-five (45) Business Days of the Closing Date.
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided herein,
in the Senior Subordinated Note Documents or in the Revolving Credit Agreement,
no Credit Party shall, nor shall it permit any of 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 Subsidiary of
Company 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 other than restrictions (i) in agreements
evidencing Indebtedness permitted by Section 6.1(k) or secured by Liens
permitted by Section 6.2 that impose restrictions on the property so acquired or
the collateral securing such Indebtedness, and (ii) by reason of customary
provisions restricting assignments, subletting or other transfers contained in
leases, licenses, joint venture agreements and similar agreements entered into
in the ordinary course of business, and (iii) that are or were created by virtue
of any transfer of, agreement to transfer or option or right with respect to any
property, assets or Capital Stock not otherwise prohibited under this Agreement.
6.7. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) Investments as of the Closing Date in any Subsidiary and
Investments made after the Closing Date in any Guarantor Subsidiary;
(c) Investments (i) received in satisfaction or partial
satisfaction thereof from financially troubled account debtors and (ii)
deposits, prepayments and other credits to suppliers made in the ordinary course
of business consistent with the past practices of Company and its Subsidiaries;
(d) intercompany loans to the extent permitted under Section
6.1(b);
(e) Consolidated Capital Expenditures;
(f) loans and advances to employees of Company and its
Subsidiaries made in the ordinary course of business in an aggregate principal
amount not to exceed $500,000 in the aggregate;
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67
(g) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9;
(h) Investments described in Schedule 6.7;
(i) Investments made after the Closing Date in non-Guarantor
Subsidiaries and Joint Ventures of Company or any Guarantor Subsidiary
(including the purchase of any outstanding equity interests in such Subsidiaries
and Joint Ventures) in an amount not to exceed $10,000,000 at any time
outstanding;
(j) Investments received as non-cash consideration for sales,
transfers, leases, and other dispositions of assets permitted by Section 6.9;
(k) Investments in Interest Rate Agreements required by Section
5.12; and
(l) other Investments made after the Closing Date in an aggregate
amount not to exceed $5,000,000 at any time outstanding.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
Payment not otherwise permitted under the terms of Section 6.5.
6.8. RESERVED.
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, 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 sublessor), exchange, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business, assets
or property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible, whether now owned or hereafter acquired, or acquire by
purchase or otherwise (other than purchases or other acquisitions of inventory,
materials and equipment and Capital Expenditures in the ordinary course of
business) all or substantially all 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 or other business unit of any Person, except:
(a) any Subsidiary of Company may be merged with or into Company
or any Guarantor Subsidiary, or 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 Guarantor Subsidiary; provided, in the case of
such a merger, Company or such Guarantor Subsidiary, as applicable shall be the
continuing or surviving Person;
(b) any non-Guarantor Subsidiary may be merged with or into any
other non-Guarantor Subsidiary, or 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 any other non-Guarantor Subsidiary;
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68
(c) sales, leases, exchanges or other dispositions of assets that
do not constitute Asset Sales;
(d) Asset Sales, the proceeds of which (valued at the principal
amount thereof in the case of non-Cash proceeds consisting of notes or other
debt Securities and valued at fair market value in the case of other non-Cash
proceeds) (i) are less than $7,500,000 with respect to any single Asset Sale or
series of related Asset Sales and (ii) when aggregated with the proceeds of all
other Asset Sales made within the same Fiscal Year, are less than $15,000,000;
provided (1) the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof (determined in good faith by senior
management or the board of directors of Company (or similar governing body)),
(2) no less than 75% thereof shall be paid in Cash, and (3) the Net Asset Sale
Proceeds thereof shall be applied to the extent required by Section 2.12(a);
(e) disposals of obsolete, worn out or surplus property;
(f) Permitted Acquisitions; and
(g) Investments made in accordance with Section 6.7.
6.10. DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.9 and except with respect to Liens securing the
Obligations hereunder or the "Obligations" under and as defined in the Revolving
Credit Agreement, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, (a) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law; or (b) permit any of its
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
another Credit Party (subject to the restrictions on such disposition otherwise
imposed hereunder), or to qualify directors if required by applicable law.
6.11. SALES AND LEASE-BACKS. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other than Company or any of its Subsidiaries),
or (b) intends to use for substantially the same purpose as any other property
which has been or is to be sold or transferred by such Credit Party to any
Person (other than Company or any of its Subsidiaries) in connection with such
lease except to the extent the aggregate book value of all such properties that
are subject to such transactions do not exceed $15,000,000.
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party shall,
nor shall it permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction (including 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 Capital Stock of Company or any of its Subsidiaries or
with any Affiliate of Company or of any such holder, on terms that are
materially less favorable to Company or that Subsidiary, as the case may be,
than those that might be obtained at the time from a Person who is not such a
holder or Affiliate; provided, the
SECOND LIEN CREDIT AGREEMENT EXECUTION
69
foregoing restriction shall not apply to (a) any transaction between Company and
any Guarantor Subsidiary; (b) reasonable and customary fees paid to members of
the board of directors (or similar governing body) of Company and its
Subsidiaries; (c) compensation arrangements for officers and other employees of
Company and its Subsidiaries entered into in the ordinary course of business;
and (d) transactions described in Schedule 6.12 or in the offering circular for
the Senior Subordinated Notes.
6.13. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, be principally engaged in
any business other than (i) the businesses engaged in by such Credit Party on
the Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
6.14. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS AND DESIGNATED
CONTRACTS. Except as set forth in Section 6.15, no Credit Party shall nor shall
it permit any of its Subsidiaries to, agree to any amendment, restatement,
supplement or other modification to, or waiver of, any of its rights under any
Related Agreement or Designated Contract after the Closing Date without in each
case obtaining the prior written consent of Requisite Lenders to such amendment,
restatement, supplement or other modification or waiver in any case where such
amendment, restatement, supplement or other modification, or waiver would be
materially adverse to the interests of Company or the Lenders.
6.15. AMENDMENTS OR WAIVERS WITH RESPECT TO SENIOR SUBORDINATED NOTE
DOCUMENTS AND REVOLVING CREDIT AGREEMENT.
(a) No Credit Party shall, nor shall it permit any of its Subsidiaries
to, amend or otherwise change the terms of the Senior Subordinated Note
Documents, 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 the Senior Subordinated Notes, 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
or otherwise make such event of default or condition less restrictive or
burdensome on Company), change the redemption, prepayment or defeasance
provisions thereof, change the subordination provisions of the Senior
Subordinated Notes (or of any guaranty thereof), 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 the Senior Subordinated Notes (or a trustee
or other representative on their behalf) which would be adverse to any Credit
Party or Lenders.
(b) No Credit Party shall, nor shall it permit any of its Subsidiaries
to, amend or otherwise change the terms of the Revolving Credit Agreement or
make any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the maximum principal amount
of Indebtedness under the Revolving Credit Agreement, except as may otherwise be
permitted by Section 6.1(d) hereof or the Intercreditor Agreement.
6.16. FISCAL YEAR. No Credit Party shall, nor shall it permit any of its
Subsidiaries to change its Fiscal Year-end from December 31.
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70
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section 7.2
and the Intercreditor Agreement, Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty to Administrative Agent for the ratable
benefit of the Beneficiaries the due and punctual payment in full of all
Obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)) (collectively,
the "GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS. All Guarantors desire to allocate among
themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor's Aggregate Payments to equal
its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2 and the Intercreditor
Agreement, Guarantors hereby jointly and severally agree, in furtherance of the
foregoing and not in
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71
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Company to pay
any of the Guaranteed Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), Guarantors will upon demand pay, or cause to be paid, in Cash, to
Administrative Agent for the ratable benefit of Beneficiaries, an amount equal
to the sum of the unpaid principal amount of all Guaranteed Obligations then due
as aforesaid, accrued and unpaid interest on such Guaranteed Obligations
(including interest which, but for Company's becoming the subject of a case
under the Bankruptcy Code, would have accrued on such Guaranteed Obligations,
whether or not a claim is allowed against Company for such interest in the
related bankruptcy case) and all other Guaranteed Obligations then owed to
Beneficiaries as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectibility. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty, to the extent
otherwise enforceable in accordance with its terms, upon the occurrence of an
Event of Default notwithstanding the existence of any dispute between Company
and any Beneficiary with respect to the existence of such Event of Default;
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Company and the obligations of any other guarantor (including any
other Guarantor) of the obligations of Company, and a separate action or actions
may be brought and prosecuted against such Guarantor whether or not any action
is brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or
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72
otherwise change the time, place, manner or terms of payment of the Guaranteed
Obligations; (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guaranteed
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for the
payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guaranteed
Obligations, any other guaranties of the Guaranteed Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Guaranteed Obligations; (v) enforce and apply any security now or hereafter held
by or for the benefit of such Beneficiary in respect hereof or the Guaranteed
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that such Beneficiary may have against any such security,
in each case as such Beneficiary in its discretion may determine consistent
herewith or the applicable Hedge Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against Company or any security for the Guaranteed Obligations;
and (vi) exercise any other rights available to it under the Credit Documents or
the Hedge Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising under the Credit
Documents or the Hedge Agreements, at law, in equity or otherwise) with respect
to the Guaranteed Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions
relating to events of default) hereof, any of the other Credit Documents, any of
the Hedge Agreements or any agreement or instrument executed pursuant thereto,
or of any other guaranty or security for the Guaranteed Obligations, in each
case whether or not in accordance with the terms hereof or such Credit Document,
such Hedge Agreement or any agreement relating to such other guaranty or
security; (iii) the Guaranteed Obligations, or any agreement relating thereto,
at any time being found to be illegal, invalid or unenforceable in any respect;
(iv) the application of payments received from any source (other than payments
received pursuant to the other Credit Documents or any of the Hedge Agreements
or from the proceeds of any security for the Guaranteed Obligations, except to
the extent such security also serves as collateral for indebtedness other than
the Guaranteed Obligations) to the payment of indebtedness other than the
Guaranteed Obligations, even though any Beneficiary might have elected to apply
such payment to any part or all of the Guaranteed Obligations; (v) any
Beneficiary's consent to the change, reorganization or termination of the
corporate structure or existence of Company or any of its Subsidiaries and to
any corresponding restructuring of the Guaranteed Obligations; (vi) any failure
to perfect or continue perfection of a
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security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which Company may
allege or assert against any Beneficiary in respect of the Guaranteed
Obligations, including failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury;
and (viii) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guaranteed Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit
of Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against Company, any
other guarantor (including any other Guarantor) of the Guaranteed Obligations or
any other Person, (ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii) proceed against or
have resort to any balance of any Deposit Account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of Company or any other Guarantor including any defense based on or arising out
of the lack of validity or the unenforceability of the Guaranteed Obligations or
any agreement or instrument relating thereto or by reason of the cessation of
the liability of Company or any other Guarantor from any cause other than
payment in full of the Guaranteed Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon any Beneficiary's errors or omissions in
the administration of the Guaranteed Obligations, except behavior which amounts
to bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof and any legal
or equitable discharge of such Guarantor's obligations hereunder, (ii) the
benefit of any statute of limitations affecting such Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments
and counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any security interest or lien or
any property subject thereto; (f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance hereof, notices of default hereunder, the Hedge Agreements
or any agreement or instrument related thereto, notices of any renewal,
extension or modification of the Guaranteed Obligations or any agreement related
thereto, notices of any extension of credit to Company and notices of any of the
matters referred to in Section 7.4 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or afforded by law which
limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been indefeasibly paid in full, each Guarantor
hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any other Guarantor
or any of its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Company with respect to the Guaranteed
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Obligations, (b) any right to enforce, or to participate in, any claim, right or
remedy that any Beneficiary now has or may hereafter have against Company, and
(c) any benefit of, and any right to participate in, any collateral or security
now or hereafter held by any Beneficiary. In addition, until the Guaranteed
Obligations shall have been indefeasibly paid in full, each Guarantor shall
withhold exercise of any right of contribution such Guarantor may have against
any other guarantor (including any other Guarantor) of the Guaranteed
Obligations, including, without limitation, any such right of contribution as
contemplated by Section 7.2. Each Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against Company or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against Company,
to all right, title and interest any Beneficiary may have in any such collateral
or security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent
for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Company or any
Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR") is
hereby subordinated in right of payment to the Guaranteed Obligations, and any
such indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been paid in
full. Each Guarantor hereby irrevocably waives any right to revoke this Guaranty
as to future transactions giving rise to any Guaranteed Obligations.
7.9. AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF COMPANY. Any Credit Extension may be made to
Company or continued from time to time, and any Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from any
Guarantor regardless of the financial or other condition of Company at the time
of any such grant or continuation or at the time such Hedge Agreement is entered
into, as the case may be. No Beneficiary shall have any obligation to disclose
or discuss with any Guarantor its assessment, or any Guarantor's assessment, of
the financial condition of Company. Each Guarantor has adequate means to
SECOND LIEN CREDIT AGREEMENT EXECUTION
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obtain information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Credit
Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
7.11. BANKRUPTCY, ETC. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against Company or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or any other
Guarantor or by any defense which Company or any other Guarantor may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed Obligations
are paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guaranteed Obligations for all purposes hereunder.
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale. Administrative Agent
agrees to execute and deliver, at the written request of Company and at its sole
cost and expense, such documents
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as may be reasonably requested by Company in order to evidence and confirm the
discharge and release provided by this Section 7.12.
SECTION 8. EVENTS OF DEFAULT; CHANGE OF CONTROL
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions or
events shall occur:
(a) Failure to Make Payments When Due. Failure by Company to pay (i)
when due any installment of principal of any Loan, whether at stated maturity,
by acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; or (ii) any interest on any Loan or any fee or any other amount due
hereunder within five Business Days after the date due; or
(b) Default in Other Agreements. (i) Failure of any Credit Party or any
of their respective Subsidiaries to pay when due any principal of or interest on
or any other amount payable in respect of one or more items of Indebtedness
(other than Indebtedness referred to in Section 8.1(a)) in an individual
principal amount of $5,000,000 or more or with an aggregate principal amount of
$10,000,000 or more, in each case beyond the grace period, if any, provided
therefor; or (ii) breach or default by any Credit Party with respect to any
other material term of (1) one or more items of Indebtedness in the individual
or aggregate principal amounts referred to in clause (i) above or (2) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness, in each case beyond the grace period, if any, provided therefor,
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness (or a trustee on behalf of such holder or holders),
to cause, that Indebtedness to become or be declared due and payable (or
redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; provided, however, with respect to
any failure to pay or breach or default under the Revolving Credit Agreement,
such event shall only constitute an Event of Default hereunder to the extent
there is an Event of Default (as defined in the Revolving Credit Agreement)
under subsections 8.1(a), (f) or (g) of the Revolving Credit Agreement; or
(c) Breach of Certain Covenants. Failure of any Credit Party to perform
or comply with any term or condition contained in Section 2.5, Section 5.2 (as
to maintaining such Credit Party's existence) or Section 6; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit Documents, other than any such term referred to in any
other Section of this Section 8.1, and such default shall not have been remedied
or waived within thirty days after the earlier of (i) an
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Authorized Officer of such Credit Party becoming aware of such default or (ii)
receipt by Company of notice from Administrative Agent or any Lender of such
default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc.. (i) A court
of competent jurisdiction shall enter a decree or order for relief in respect of
Company or any of its Material Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against Company or any of its
Material Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; 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 Material Subsidiaries, or over all or
a substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of Company or any of its Material 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 Material Subsidiaries, and any such event
described in this clause (ii) shall continue for sixty days without having been
dismissed, bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc.. (i) Company or
any of its Material Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, 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 Material Subsidiaries shall make
any assignment for the benefit of creditors; or (ii) Company or any of its
Material 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 (or similar governing body) of Company or any of its Material
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to herein or in
Section 8.1(f); or
(h) Judgments and Attachments. Any money judgments, writs or warrants
of attachment or similar process involving (i) in any individual case an amount
in excess of $5,000,000 or (ii) in the aggregate at any time an amount in excess
of $10,000,000 (in either case to the extent not adequately covered by insurance
or reimbursement or indemnity obligations as to which a solvent and unaffiliated
insurance company, surety, or other financially sound third party has
acknowledged coverage or liability) shall be entered or filed against Company or
any of its Material Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or
(i) Dissolution. Any order, judgment or decree shall be entered against
any Credit Party decreeing the dissolution or split up of such Credit Party and
such order shall remain undischarged or unstayed for a period in excess of
thirty days; or
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(j) Employee Benefit Plans. (i) There shall occur one or more ERISA
Events which individually or in the aggregate results in or might reasonably be
expected to result in liability of Company, any of its Subsidiaries or any of
their respective ERISA Affiliates in excess of $5,000,000 during the term
hereof; or (ii) there exists any fact or circumstance that reasonably could be
expected to result in the imposition of a Lien or security interest under
Section 412(n) of the Internal Revenue Code or under ERISA against the Company
or its Subsidiaries for obligations or liabilities in excess of $2,500,000; or
(k) Guaranties, Collateral Documents and other Credit Documents. At any
time after the execution and delivery thereof, (i) the Guaranty for any reason,
other than the satisfaction in full of all Obligations, shall cease to be in
full force and effect (other than in accordance with its terms) or shall be
declared to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) this Agreement or any Collateral Document ceases to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms hereof or thereof or the satisfaction in full of the Obligations
in accordance with the terms hereof) or shall be declared null and void, or
Collateral Agent shall not have or shall cease to have a valid and perfected
Lien in any Collateral in excess of $2,500,000 purported to be covered by the
Collateral Documents with the priority required by the relevant Collateral
Document, in each case for any reason other than the failure of Collateral Agent
or any Secured Party to take any action within its control, or (iii) any Credit
Party shall contest the validity or enforceability of any Credit Document in
writing or deny in writing that it has any further liability, including with
respect to future advances by Lenders, under any Credit Document to which it is
a party;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of (x) any other
Event of Default or (y) an acceleration of all Revolving Loans under the
Revolving Credit Agreement and/or termination by Requisite Lenders of
commitments thereunder (other than voluntary commitment reductions by the
Company or commitment terminations pursuant to the scheduled commitment
termination date of the Revolving Loans), then at the request of (or with the
consent of) Requisite Lenders, upon notice to Company by Administrative Agent,
(A) each of the following shall immediately become due and payable, in each case
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by each Credit Party: (I) the unpaid principal
amount of and accrued interest on the Loans, and (II) all other Obligations; and
(B) Administrative Agent may cause Collateral Agent to enforce any and all Liens
and security interests created pursuant to Collateral Documents.
8.2. CHANGE OF CONTROL.
(a) Upon a Change of Control, each Lender shall have the right to
require that the Company repurchase all or any portion of the Term Loans of each
Lenders pursuant to an Assignment Agreement, at a purchase price in cash equal
to 101% of the principal amount thereof plus accrued and unpaid interest to the
date of purchase (subject to the right of Lenders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 8.2(b); provided that, with
respect to such repurchases, Company shall simultaneously provide a copy of such
Assignment Agreement and any other agreements between Company and each Lender
with respect to such repurchase to Administrative Agent and Syndication Agent.
In the event that at the time of such Change of
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Control the terms of the Revolving Credit Agreement restrict or prohibit the
repurchase of Loans pursuant to this Section 8.2, then prior to complying with
the provisions of this Section 8.2 but in any event within 90 days following the
date the Company obtains actual knowledge of any Change of Control, the Company
shall (i) repay in full all Indebtedness under the Revolving Credit Agreement or
(ii) obtain the requisite consent under the Revolving Credit Agreement to permit
the repurchase of the Loans as provided for in Section 8.2(b).
(b) Within 30 days following the date the Company obtains actual
knowledge of any Change of Control, the Company shall mail a notice to
Administrative Agent and all Lenders (the "CHANGE OF CONTROL OFFER") stating:
(i) that a Change of Control has occurred and that each Lender
has the right to require the Company to purchase all or a portion of such
Lender's outstanding Loans at a purchase price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest to the date of
purchase (subject to the right of Lenders of record on the relevant record
date to receive interest on the relevant interest payment date);
(ii) the circumstances and relevant facts and financial
information regarding such Change of Control;
(iii) the purchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(iv) the instructions determined by the Company (which shall
be reasonably acceptable to Administrative Agent and the Syndication
Agent), consistent with this Section 8.2, that a Lender must follow in
order to have its outstanding Loans purchased.
(c) With respect to all repurchases made by Company pursuant to this
Section 8.2, (i) Company shall pay all accrued and unpaid interest, if any, on
the repurchased Term Loans to the date of repurchase of such Term Loans together
with all amounts due under Section 2.16(c), (ii) Company shall have provided to
all Lenders all information (any such non-public information being subject to
the confidentiality provisions of Section 10.17 hereof) that, together with any
previously provided information, would satisfy the requirements of Rule 10b-5 of
the Exchange Act with respect to an offer by Company to repurchase securities
registered under the Securities Act of 1933 (whether or not such securities are
outstanding) as if such offer was being made as of the date of such repurchase
of Term Loans from a Lender, (iii) Lenders shall be entitled to withdraw their
election if the Company receives not later than two Business Days prior to the
repurchase date a telegram, telex, facsimile transmission or letter setting
forth the name of the Lender, the principal amount of the outstanding Loan which
was elected for repurchase by the Lender and a statement that such Lender is
withdrawing his election to have such Loan repurchased and (iv) such repurchases
shall not be deemed to be voluntary prepayments pursuant to Sections 2.11,
Section 2.13 or 2.14.
(d) Following repurchase by Company pursuant to this Section 8.2, the
Term Loans so repurchased shall be deemed cancelled for all purposes and no
longer outstanding (and
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may not be resold by Company), for all purposes of this Agreement and all other
Credit Documents, including, but not limited to (i) the making of, or the
application of, any payments to the Lenders under this Agreement or any other
Credit Document, (ii) the making of any request, demand, authorization,
direction, notice, consent or waiver under this Agreement or any other Credit
Document or (iii) the determination of Requisite Lenders, or for any similar or
related purpose, under this Agreement or any other Credit Document.
(e) Notwithstanding the foregoing provisions of this Section, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in Section
8.2(b) applicable to a Change of Control Offer made by the Company and purchases
all outstanding Loans validly tendered and not withdrawn under such Change of
Control Offer.
Notwithstanding any of the provisions set forth in this Agreement to the
contrary, Company, the Lenders and Agents hereby agree that nothing in this
Agreement shall be understood to mean or suggest that the Term Loans constitute
"securities" for purposes of either the Securities Act or the Exchange Act.
SECTION 9. AGENTS
9.1. APPOINTMENT OF AGENTS. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents.
National City is hereby appointed Administrative Agent hereunder and under the
other Credit Documents and each Lender hereby authorizes Administrative Agent to
act as its agent in accordance with the terms hereof and the other Credit
Documents. Each Agent hereby agrees to act upon the express conditions contained
herein and the other Credit Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Agents and Lenders and no Credit Party
shall have any rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties hereunder, each 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. Syndication Agent, without consent of or
notice to any party hereto, may assign any and all of its rights or obligations
hereunder to any of its Affiliates. As of the Closing Date, GSCP, in its
capacity as Syndication Agent, shall not have any obligations but shall be
entitled to all benefits of this Section 9.
9.2. POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is
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intended to or shall be so construed as to impose upon any Agent any obligations
in respect hereof or any of the other Credit Documents except as expressly set
forth herein or therein.
9.3. GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency hereof or any other
Credit 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 any Agent to Lenders or by or on behalf of any
Credit Party to any Agent or any Lender in connection with the Credit Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of any Credit Party or any other Person liable for the payment
of any Obligations, nor shall any 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 Credit Documents or as to the
use of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default or Default or to make any disclosures with respect to the
foregoing. Anything contained herein to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans.
(b) Exculpatory Provisions. No Agent nor any of its officers, partners,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by any Agent under or in connection with any of the Credit Documents
except to the extent caused by such Agent's gross negligence or willful
misconduct. Each Agent shall be entitled to refrain from any act or the taking
of any action (including the failure to take an action) in connection herewith
or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each 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 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 any Agent as a result of such Agent
acting or (where so instructed) refraining from acting hereunder or any of the
other Credit Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 10.5).
9.4. AGENTS 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, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent shall have the same
rights and powers hereunder as any other Lender and may
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exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, 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 for services in connection herewith and otherwise
without having to account for the same to Lenders.
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) 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 Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. No Agent shall 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 no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this Agreement,
shall be deemed to have acknowledged receipt of, and consented to and approved,
each Credit Document and each other document required to be approved by any
Agent, Requisite Lenders or Lenders, as applicable on the Closing Date.
Notwithstanding anything herein to the contrary, each Lender also acknowledges
that the lien and security interest granted to the Collateral Agent pursuant to
the Pledge and Security Agreement and the exercise of any right or remedy by the
Collateral Agent thereunder are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and the Pledge and Security Agreement, the terms of the Intercreditor
Agreement shall govern and control.
9.6. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, to the extent that such Agent shall
not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct. If any indemnity furnished to any Agent
for any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided further, this sentence shall not be deemed
to require any Lender to indemnify any
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Agent against any liability, obligation, loss, damage, penalty, action,
judgment, suit, cost, expense or disbursement described in the proviso in the
immediately preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL AGENT . Administrative
Agent may resign at any time by giving thirty days' prior written notice thereof
to Lenders and Company, and Administrative Agent may be removed at any time with
or without 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. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor 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 promptly (i)
transfer to such successor Administrative Agent all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Administrative Agent under the Credit Documents, and (ii) take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent, whereupon such retiring or
removed Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring or removed Administrative Agent's resignation or
removal hereunder as 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 hereunder. Any resignation or removal of
Administrative Agent pursuant to this Section shall also constitute the
resignation or removal of National City or is successor as Collateral Agent, and
any successor Administrative Agent appointed pursuant to this Section shall,
upon its acceptance of such appointment, become the successor Collateral Agent
for all purposes hereunder and under the Credit Documents and such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Collateral
Agent under this Agreement and the other Credit Documents, and the retiring or
removed Collateral Agent under this Agreement and the other Credit Documents
shall promptly (i) transfer to such successor Collateral Agent all sums,
Securities and other items of Collateral held under this Agreement or the Credit
Documents, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement or the other Credit Documents, and (ii)
execute and deliver to such successor Collateral Agent or otherwise authorize
the filing of such amendments to financing statements, and take such other
actions, as may be necessary or appropriate in connection with the assignment to
such successor Collateral Agent of the security interests created under the
Credit Documents, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Agreement and other Credit
Documents. After any retiring or removed Collateral Agent's resignation or
removal under this Agreement and other Credit Documents, the provisions of this
Section 9 and the other Credit Documents shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement or the other
Credit Documents while it was the Collateral Agent hereunder or thereunder.
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9.8. COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and Guaranty. Each
Lender hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Lenders, to (i) be the agent for
and representative of Lenders with respect to the Guaranty, the Collateral and
the Collateral Documents and (ii) enter into the Intercreditor Agreement, and
each Lender agrees to be bound by the terms of the Intercreditor Agreement.
Subject to Section 10.5, without further written consent or authorization from
Lenders, Administrative Agent or Collateral Agent, as applicable may execute any
documents or instruments necessary to (i) release any Lien encumbering any item
of Collateral that is the subject of a sale or other disposition of assets
permitted hereby or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under Section 10.5) have otherwise consented or
(ii) release any Guarantor from the Guaranty pursuant to Section 7.12 or with
respect to which Requisite Lenders (or such other Lenders as may be required to
give such consent under Section 10.5) have otherwise consented; provided that
Collateral Agent shall not enter into or consent to any material amendment,
modification, termination or waiver of the Intercreditor Agreement without the
prior consent of Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.5).
(b) Right to Realize on Collateral and Enforce Guaranty.
Anything contained in any of the Credit Documents to the contrary
notwithstanding, Company, Administrative Agent, Collateral Agent and each Lender
hereby agree that (i) no Lender shall have any right individually to realize
upon any of the Collateral or to enforce the Guaranty, it being understood and
agreed that all powers, rights and remedies hereunder may be exercised solely by
Administrative Agent, on behalf of Lenders in accordance with the terms hereof
and all powers, rights and remedies under the Collateral Documents may be
exercised solely by Collateral Agent, and (ii) in the event of a foreclosure by
Collateral Agent on any of the Collateral pursuant to a public or private sale,
Collateral Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and Collateral Agent, as agent for and
representative of Secured Parties (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Collateral Agent at
such sale.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given to a
Credit Party, Syndication Agent, Collateral Agent, or Administrative Agent,
shall be sent to such Person's address as set forth on Appendix B or in the
other relevant Credit Document, and in the case of any Lender, the address as
indicated on Appendix B or otherwise indicated to Administrative Agent in
writing. Each notice hereunder shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service and signed for against receipt thereof, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States
SECOND LIEN CREDIT AGREEMENT EXECUTION
85
mail with postage prepaid and properly addressed; provided, no notice to any
Agent shall be effective until received by such Agent.
10.2. EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, Company agrees to pay promptly (a) all the actual and
reasonable out-of-pocket costs and expenses of preparation of the Credit
Documents and any consents, amendments, waivers or other modifications thereto;
(b) all the actual and reasonable out-of-pocket costs of furnishing all opinions
by counsel for Company and the other Credit Parties; (c) the actual and
reasonable out-of-pocket fees, expenses and disbursements of counsel to Agents
(in each case including allocated costs of internal counsel) in connection with
the negotiation, preparation, execution and administration of the Credit
Documents and any consents, amendments, waivers or other modifications thereto
and any other documents or matters requested by Company; (d) all the actual
out-of-pocket costs and reasonable out-of-pocket expenses of creating and
perfecting Liens in favor of Collateral Agent, for the benefit of Lenders
pursuant hereto, including filing and recording fees, expenses and taxes, stamp
or documentary taxes, search fees, title insurance premiums and reasonable fees,
expenses and disbursements of counsel to each Agent and of counsel providing any
opinions that any Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant to the Collateral Documents; (e) all
the actual out-of-pocket costs and reasonable out-of-pocket fees, expenses and
disbursements of any auditors, accountants, consultants or appraisers; (f) all
the actual out-of-pocket costs and reasonable out-of-pocket expenses (including
the reasonable fees, expenses and disbursements of any appraisers, consultants,
advisors and agents employed or retained by Collateral Agent and its counsel) in
connection with the custody or preservation of any of the Collateral; (g) all
other actual and reasonable out-of-pocket costs and expenses incurred by each
Agent in connection with the syndication of the Loans and the negotiation,
preparation and execution of the Credit Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (h) after the occurrence of a Default or an Event of Default, all
actual and reasonable out-of-pocket costs and expenses, including reasonable
attorneys' fees and costs of settlement, incurred by any Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Credit
Party hereunder or under the other Credit Documents by reason of such Default or
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Guaranty)
or in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy cases or proceedings.
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section
10.2, whether or not the transactions contemplated hereby shall be consummated,
each Credit Party agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Agent and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided, no Credit Party shall 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. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 10.3 may be
SECOND LIEN CREDIT AGREEMENT EXECUTION
86
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(b) To the extent permitted by applicable law, no Credit Party
shall assert, and each Credit Party hereby waives, any claim against Lenders,
Agents and their respective Affiliates, directors, employees, attorneys or
agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein, the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof or any act or omission or event occurring in connection
therewith, and Company hereby waives, releases and agrees not to ▇▇▇ upon any
such claim or any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
10.4. SET-OFF. Subject to the terms of the Intercreditor Agreement, 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
continuation of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including 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 such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder and under the other Credit Documents,
including all claims of any nature or description arising out of or connected
hereto or with any other Credit Document, irrespective of whether or not (a)
such Lender shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Section 2 and although such obligations and liabilities,
or any of them, may be contingent or unmatured.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders.
(b) Affected Lenders' Consent. Without the written consent of
each Lender that would be affected thereby, no amendment, modification,
termination, or consent shall be effective if the effect thereof would:
(i) extend the Term Loan Maturity Date;
SECOND LIEN CREDIT AGREEMENT EXECUTION
87
(ii) waive, reduce or postpone any scheduled
repayment (but not prepayment);
(iii) reduce the rate of interest on any Loan (other
than any waiver of any increase in the interest rate applicable to any
Loan pursuant to Section 2.9) or any fee payable hereunder or waive,
amend or reduce any prepayment premium;
(iv) extend the time for payment of any such
interest, fees or prepayment premium;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision
of this Section 10.5(b) or Section 10.5(c);
(vii) amend the definition of "REQUISITE LENDERS" or
"PRO RATA SHARE";
(viii) release all or substantially all of the
Collateral or all or substantially all of the Guarantors from the
Guaranty except as expressly provided in the Credit Documents; or
(ix) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under any Credit
Document.
(c) Other Consents. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall amend, modify, terminate or waive any
provision of Section 9 as the same applies to any Agent, or any other provision
hereof as the same applies to the rights or obligations of any Agent, in each
case without the consent of such Agent.
(d) Execution of Amendments, etc. Administrative Agent may,
but shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such 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 any Credit
Party in any case shall entitle any Credit Party 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 Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. 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 successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns
SECOND LIEN CREDIT AGREEMENT EXECUTION
88
permitted hereby and, to the extent expressly contemplated hereby, Affiliates of
each of the Agents and Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Register.
(i) 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 Loans (each a "REGISTERED LOAN") listed
therein for all purposes hereof, and no assignment or transfer of any
such Loan shall be effective, in each case, unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall
have been delivered to and accepted by Administrative Agent and
recorded in the Register as provided in Section 10.6(e); provided that,
in connection with an assignment or transfer permitted by Section
10.6(c)(i), the failure of an assignor Lender and such assignee to
execute and deliver an Assignment Agreement shall not affect the
legality, validity or binding effect of such assignment. Prior to such
recordation, all amounts owed with respect to the applicable 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 Loans.
In the case of an assignment or transfer permitted by Section
10.6(c)(i), the assigning Lender shall maintain a comparable Register
on behalf of the Company; provided, however that Company and
Administrative Agent shall be entitled to rely solely on the Register
maintained by Administrative Agent.
(ii) A Registered Loan (and the registered note, if any,
evidencing the same) may be assigned or sold in whole or in part only
by registration of such assignment or sale on the Register (and each
registered note shall expressly so provide). Any assignment or sale of
all or part of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by registration of such
assignment or sale on Register, together with the surrender of the
registered note, if any, evidencing the same duly endorsed by (or
accompanied by a written instrument of assignment or sale duly executed
by) the holder of such registered note, whereupon, at the request of
the designated assignee(s) or transferee(s), one or more new registered
notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of
assignment or sale of any Registered Loan (and the registered note, if
any, evidencing the same), the Administrative Agent shall treat the
Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the
purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
(iii) In the event that any Lender sells participations in
a Registered Loan, such Lender shall maintain a register on which it
enters the name of all participants in the Registered Loans held by it
(the "PARTICIPANT REGISTER"). A Registered Loan (and the registered
note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant
Register (and each registered note shall expressly so provide). Any
participation of such Registered Loan (and the
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89
registered note, if any, evidencing the same) may be effected only by
the registration of such participation on the Participant Register.
(c) Right to Assign. Each Lender shall have the right at any
time to sell, assign or transfer all or a portion of its rights and obligations
under this Agreement, including, without limitation, all or a portion of its
Loans owing to it or other Obligation (provided, however, that each such
assignment shall be of a uniform, and not varying, percentage of all rights and
obligations under and in respect of any Loan):
(i) to any Person meeting the criteria of clause (i)
of the definition of the term of "Eligible Assignee" upon the giving of
notice to Company and Administrative Agent (each, a "RELATED
ASSIGNEE"); provided, however, that Company and Administrative Agent
may continue to deal solely and directly with such assignor Lender in
connection with the interest so assigned to such Related Assignee until
such Lender and its Related Assignee have delivered to Company and
Administrative Agent an Assignment Agreement pursuant to Section
10.6(b) hereof; and
(ii) to any Person meeting the criteria of clause
(ii) of the definition of the term of "Eligible Assignee"; provided,
further each such assignment pursuant to this Section 10.6(c)(ii) shall
be in an aggregate amount of not less than $1,000,000 (or such lesser
amount as may be agreed to by Company and Administrative Agent or as
shall constitute the aggregate amount of the Loans of the assigning
Lender).
(d) Mechanics. The assigning Lender and the assignee thereof
shall execute and deliver to Administrative Agent an Assignment Agreement,
together with (i) a processing and recordation fee of $500 in the case of
assignments pursuant to Section 10.6(c)(i) or made by or to GSCP, and $2,000 in
the case of all other assignments (except that only one fee shall be payable in
the case of contemporaneous assignments to Related Funds), and (ii) 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 pursuant to Section 2.18(c);
provided, however, that, so long as no there are no withholding or similar tax
obligations resulting therefrom which would give rise to a payment obligation on
the part of the Company, the assigning Lender and assignee shall not be
obligated to deliver such Assignment Agreement and forms, certificates or other
evidence with respect to withholding tax matters in connection with assignments
or transfers permitted under Section 10.6(c)(i), but until such delivery,
Company and Administrative Agent may continue to deal solely and directly with
such assignor Lender in connection with the interest so assigned, and such
assignment shall nonetheless be legal, valid and binding.
(e) Notice of Assignment. Upon its receipt of a duly executed
and completed Assignment Agreement, together with the processing and recordation
fee referred to in Section 10.6(d) (and any forms, certificates or other
evidence required by this Agreement in connection therewith), Administrative
Agent shall record the information contained in such Assignment Agreement in the
Register, shall give prompt notice thereof to Company and shall maintain a copy
of such Assignment Agreement.
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90
(f) Representations and Warranties of Assignee. Each Lender,
upon execution and delivery hereof or upon executing and delivering an
Assignment Agreement, as the case may be, represents and warrants as of the
Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in loans such as the
applicable Loans; and (iii) it will make or invest in, as the case may be, its
Loans for its own account in the ordinary course of its business and without a
view to distribution of such Loans within the meaning of the Securities Act or
the Exchange Act or other federal securities laws (it being understood that,
subject to the provisions of this Section 10.6, the disposition of such Loans or
any interests therein shall at all times remain within its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions
of this Section 10.6, as of the "Effective Date" specified in the applicable
Assignment Agreement: (i) the assignee thereunder shall have the rights and
obligations of a "Lender" hereunder to the extent such rights and obligations
hereunder have been assigned to it pursuant to such Assignment Agreement and
shall thereafter be a party hereto and a "Lender" for all purposes hereof; (ii)
the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned thereby pursuant to such Assignment Agreement,
relinquish its rights (other than any rights which survive the termination
hereof under Section 10.8) and be released from its obligations hereunder (and,
in the case of an Assignment Agreement covering all or the remaining portion of
an assigning Lender's rights and obligations hereunder, such Lender shall cease
to be a party hereto; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, such assigning Lender shall continue
to be entitled to the benefit of all indemnities hereunder as specified herein
with respect to matters arising out of the prior involvement of such assigning
Lender as a Lender hereunder); and (iii) if any such assignment occurs after the
issuance of any Note 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 Company shall issue and deliver new Notes, if so requested by the
assignee and/or assigning Lender, to such assignee and/or to such assigning
Lender, with appropriate insertions, to reflect the new outstanding Loans of the
assignee and/or the assigning Lender.
(h) Participations. Each Lender shall have the right at any
time to sell one or more participations to any Person (other than Company, any
of its Subsidiaries or any of its Affiliates) in all or any part of its Loans or
in any other Obligation. The holder of any such 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 with
respect to any amendment, modification or waiver that would (i) extend the final
scheduled maturity of any Loan, Note in which such participant is participating,
or reduce the rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and that an
increase in any Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by any Credit Party of any of its rights
and obligations under this Agreement or (iii) release all or substantially all
of the Collateral under the Collateral
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91
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. Company agrees that
each participant shall be entitled to the benefits of Sections 2.16(c), 2.17 and
2.18 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section
2.17 or 2.18 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant, unless the sale of the
participation to such participant is made with Company's prior written consent
and (ii) a participant that would be a Non-US Lender if it were a Lender shall
not be entitled to the benefits of Section 2.18 unless Company is notified of
the participation sold to such participant and such participant agrees, for the
benefit of Company, to comply with Section 2.18 as though it were a Lender. To
the extent permitted by law, each participant also shall be entitled to the
benefits of Section 10.4 as though it were a Lender, provided such participant
agrees to be subject to Section 2.15 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other
assignment permitted pursuant to this Section 10.6, (i) any Lender may assign
and/or pledge all or any portion of its Loans, the other Obligations owed by or
to such Lender, and its Notes, if any, to secure obligations of such Lender
including, without limitation, 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; provided, no
Lender, as between Company and such Lender, shall be relieved of any of its
obligations hereunder as a result of any such assignment and pledge, and
provided further, in no event shall the applicable Federal Reserve Bank, pledgee
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.
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 a Default or an Event of Default if such action is taken
or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.16(c), 2.17, 2.18, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17, 2.18,
9.3(b), 9.6 and 10.17 shall survive the payment of the Loans and the termination
hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit 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. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents or any of
SECOND LIEN CREDIT AGREEMENT EXECUTION
92
the Hedge Agreements. Any forbearance or failure to exercise, and any delay in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any
Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf 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.
10.11. SEVERABILITY. In case any provision in or obligation hereunder
or any Note 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.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations of any other Lender hereunder. Nothing contained herein or
in any other Credit 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 hereof
and it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. 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 LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT
DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT
SECOND LIEN CREDIT AGREEMENT EXECUTION
93
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) 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 THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT
PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES AGENTS AND
LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY 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 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 ITS 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 SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT 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.
SECOND LIEN CREDIT AGREEMENT EXECUTION
94
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public
information regarding Company and its Subsidiaries and their businesses
identified as such by Company and provided to such Lender by or on behalf of any
Credit Party pursuant to the requirements hereof in accordance with such
Lender's customary procedures for handling confidential information of such
nature, it being understood and agreed by Company that, in any event, a Lender
may make (i) disclosures of such information to Affiliates of such Lender and to
their agents and advisors (and to other persons authorized by a Lender or Agent
to organize, present or disseminate such information in connection with
disclosures otherwise made in accordance with this Section 10.17), provided that
each of such Persons is advised of and agrees to be bound by the provisions of
this Section 10.17, (ii) disclosures of such information reasonably required by
any bona fide or potential assignee, transferee or participant in connection
with the contemplated assignment, transfer or participation by such Lender of
any Loans or any participations therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in Hedge Agreements
(provided, such counterparties and advisors are advised of and agree to be bound
by the provisions of this Section 10.17), (iii) disclosure to any rating agency
when required by it, provided that, prior to any disclosure, such rating agency
shall undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any of the Agents
or any Lender, and (iv) disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal or judicial
process; provided, unless specifically prohibited by applicable law or court
order, each Lender shall make reasonable efforts to 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 or
other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information. Notwithstanding anything to the contrary set forth herein, each
party (and each of their respective employees, representatives or other agents)
may disclose to any and all persons, without limitations of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions and other tax analyses) that
are provided to any such party relating to such tax treatment and tax structure.
However, any information relating to the tax treatment or tax structure shall
remain subject to the confidentiality provisions hereof (and the foregoing
sentence shall not apply) to the extent reasonably necessary to enable the
parties hereto, their respective Affiliates, and their and their respective
Affiliates' directors and employees to comply with applicable securities laws.
For this purpose, "tax structure" means any facts relevant to the federal income
tax treatment of the transactions contemplated by this Agreement but does not
include information relating to the identity of any of the parties hereto or any
of their respective Affiliates.
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision
herein, the aggregate interest rate charged with respect to any of the
Obligations, including all charges or fees in connection therewith deemed in the
nature of interest under applicable law shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of
SECOND LIEN CREDIT AGREEMENT EXECUTION
95
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect, then to the extent
permitted by law, Company shall pay to Administrative Agent an amount equal to
the difference between the amount of interest paid and the amount of interest
which would have been paid if the Highest Lawful Rate had at all times been in
effect. Notwithstanding the foregoing, it is the intention of Lenders and
Company to conform strictly to any applicable usury laws. Accordingly, if any
Lender contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at such Lender's option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to Company.
10.19. COUNTERPARTS. This Agreement may be executed in any number of
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.
10.20. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
10.21. USA PATRIOT ACT. Each Lender hereby notifies the Company that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "PATRIOT ACT"), it is required to
obtain, verify and record information that identifies the Company, which
information includes the name and address of the Company and other information
that will allow such Lender to identify the Company in accordance with the
Patriot Act.
[Remainder of page intentionally left blank]
SECOND LIEN CREDIT AGREEMENT EXECUTION
96
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.
CARMIKE CINEMAS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President - Finance
Treasurer and Chief Financial
Officer
EASTWYNN THEATRES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President - Finance
Treasurer and Chief Financial
Officer
MILITARY SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President - Finance
Treasurer and Chief Financial
Officer
WOODEN NICKEL PUB, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President - Finance
Treasurer and Chief Financial
Officer
SECOND LIEN CREDIT AGREEMENT EXECUTION
S-1
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Sole Lead Arranger, Sole Bookrunner,
Sole Syndication Agent and a Lender
By: /s/ ▇ ▇ ▇▇▇▇▇▇
-------------------------------------
Authorized Signatory
SECOND LIEN CREDIT AGREEMENT EXECUTION
S-2
NATIONAL CITY BANK,
as Administrative Agent and Collateral
Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
SECOND LIEN CREDIT AGREEMENT EXECUTION
S-3
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
TERM LOAN COMMITMENTS
LENDER TERM LOAN COMMITMENT PRO RATA SHARE
----------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. $100,000,000.00 100.0%
--------------- -----
TOTAL $100,000,000.00 100%
APPENDIX A-1
SECOND LIEN CREDIT AGREEMENT EXECUTION
APPENDIX B
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
CARMIKE CINEMAS, INC. or any Guarantor
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
in each case, with a copy to:
King & Spalding LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX B-1
SECOND LIEN CREDIT AGREEMENT EXECUTION
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent and a Lender
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SECOND LIEN CREDIT AGREEMENT EXECUTION
APPENDIX B-2
NATIONAL CITY BANK,
as Administrative Agent and Collateral Agent,
National City Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ #▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: 216-222-0192
APPENDIX B-3
SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT A-1 TO
SECOND LIEN CREDIT AGREEMENT
FUNDING NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
February 4, 2004 (as it may be amended, supplemented or otherwise modified, the
"CREDIT AGREEMENT"; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among CARMIKE CINEMAS, INC.
("COMPANY"), certain Subsidiaries of Company, as Guarantors, the Lenders party
thereto from time to time, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as Sole Lead
Arranger, Sole Bookrunner and Sole Syndication Agent, and NATIONAL CITY BANK, as
Administrative Agent and Collateral Agent.
Pursuant to Section 2.1 of the Credit Agreement, Company desires that
Lenders make the following Loans to Company in accordance with the applicable
terms and conditions of the Credit Agreement on February 4, 2004 (the "CLOSING
DATE"):
[ ] Base Rate Loans:
$[___,___,___]
[ ] Eurodollar Rate Loans, with an Initial
Interest Period of ________ Month(s):
$[___,___,___]
Company hereby certifies that:
(i) as of the Closing Date, the representations and
warranties contained in each of the Credit Documents are true, correct
and complete in all material respects on and as of the Closing Date to
the same extent as though made on and as of such date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties are
true, correct and complete in all material respects on and as of such
earlier date, and except as to changes otherwise expressly permitted by
the terms of the Credit Documents; and
(ii) as of the Closing Date, no event has occurred and is
continuing or would result from the consummation of the borrowing
contemplated hereby that would constitute an Event of Default or a
Default.
Date: February 4, 2004 CARMIKE CINEMAS, INC.
By: ____________________________
Title:
EXHIBIT A-1-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT A-2 TO
SECOND LIEN CREDIT AGREEMENT
CONVERSION/CONTINUATION NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
February 4, 2004 (as it may be amended, supplemented or otherwise modified, the
"CREDIT AGREEMENT"; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among CARMIKE CINEMAS, INC.
("COMPANY"), certain Subsidiaries of Company, as Guarantors, the Lenders party
thereto from time to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as Sole Lead
Arranger, Sole Bookrunner and Sole Syndication Agent, and NATIONAL CITY BANK, as
Administrative Agent and Collateral Agent.
Pursuant to Section 2.8 of the Credit Agreement, Company desires to
convert or to continue the following Loans, each such conversion and/or
continuation to be effective as of [MM/DD/YY]:
1. TERM LOANS:
$[___,___,___] Eurodollar Rate Loans to be continued with Interest Period of ____
month(s)
$[___,___,___] Base Rate Loans to be converted to Eurodollar Rate Loans with
Interest Period of ____ month(s)
$[___,___,___] Eurodollar Rate Loans to be converted to Base Rate Loans
Company hereby certifies that as of the date hereof, no event has
occurred and is continuing or would result from the consummation of the
conversion and/or continuation contemplated hereby that would constitute an
Event of Default or a Default.
Date: [MM/DD/YY] CARMIKE CINEMAS, INC.
By: __________________________
Title:
EXHIBIT A-2-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT B-1 TO
SECOND LIEN CREDIT AGREEMENT
TERM LOAN NOTE
$[1][___,___,___]
FEBRUARY [ ], 2004 New York, New York
FOR VALUE RECEIVED, CARMIKE CINEMAS, INC., a Delaware corporation
("COMPANY"), promises to pay [NAME OF LENDER] ("PAYEE") or its registered
assigns the principal amount of [1][DOLLARS] ($[___,___,___][1]) in the
installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit and Guaranty Agreement, dated as of February 4, 2004 (as it may be
amended, supplemented or otherwise modified, the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among CARMIKE CINEMAS, INC., certain Subsidiaries of Company,
as Guarantors, the Lenders party thereto from time to time, ▇▇▇▇▇▇▇ SACHS CREDIT
PARTNERS L.P., as Sole Lead Arranger, Sole Bookrunner and Sole Syndication
Agent, and NATIONAL CITY BANK, as Administrative Agent.
Company shall make scheduled principal payments on this Note as set
forth in Section 2.2 of the Credit Agreement.
This Note is one of the "Term Loan Notes" in the aggregate principal
amount of $100,000,000 and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Term Loan evidenced hereby
was made and is to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Principal Office of Administrative Agent or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of the obligations evidenced hereby shall have been
accepted by Administrative Agent and recorded in the Register, Company, each
Agent and Lenders shall be entitled to deem and treat Payee as the owner and
holder of this Note and the obligations evidenced hereby. Payee hereby agrees,
by its acceptance hereof, that before disposing of this Note or any part hereof
it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided, the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligations of Company hereunder with respect to payments
of principal of or interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
----------------------------
[1] Lender's Tranche A Term Loan Commitment
EXHIBIT B-1-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all actual and reasonable out-of-pocket costs
and expenses, including reasonable attorneys' fees, all as provided in the
Credit Agreement, incurred in the collection and enforcement of this Note.
Company and any endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby waive
diligence, presentment, protest, demand notice of every kind and, to the full
extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
EXHIBIT B-1-2
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
CARMIKE CINEMAS, INC.
By: _________________________
Title:
EXHIBIT B-1-3
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT C TO
SECOND LIEN CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:
1. I am the [title of signing Authorized Officer] of CARMIKE
CINEMAS, INC. ("COMPANY").
2. In such capacity, I have reviewed the terms of that certain
Credit and Guaranty Agreement, dated as of February 4, 2004 (as it may be
amended, supplemented or otherwise modified, the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Company, certain Subsidiaries of Company, as Guarantors,
the Lenders party thereto from time to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Sole Lead Arranger, Sole Bookrunner and Sole Syndication Agent, and NATIONAL
CITY BANK, as Administrative Agent and Collateral Agent, and I have made, or
have caused to be made under my supervision, a review in reasonable detail of
the transactions and condition of Company and its Subsidiaries during the
accounting period covered by the attached financial statements.
3. The examination described in paragraph 2 above did not
disclose, and I have no knowledge of, the existence of any condition or event
which constitutes an Event of Default or Default during or at the end of the
accounting period covered by the attached financial statements or as of the date
of this Certificate, except as set forth in a separate attachment, if any, to
this Certificate, describing in detail, the nature of the condition or event,
the period during which it has existed and the action which Company has taken,
is taking, or proposes to take with respect to each such condition or event.
The foregoing certifications, together with the computations set forth
in the Annex A hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered [MM/DD/YY] pursuant to
Section 5.1(d) of the Credit Agreement.
CARMIKE CINEMAS, INC.
By: ________________________________
Name:
Title: [Title of Authorized Officer]
EXHIBIT C-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
ANNEX A TO
COMPLIANCE CERTIFICATE
FOR THE FISCAL [QUARTER] [YEAR] ENDING [MM/DD/YY].
1. Consolidated Adjusted EBITDA: (i) - (ii) = $[___,___,___]
(i) (a) Consolidated Net Income: $[___,___,___]
(b) Consolidated Interest Expense: $[___,___,___]
(c) provisions for income taxes, franchise tax and net
worth tax (including all single business tax expense
imposed by state law): $[___,___,___]
(d) total depreciation expense: $[___,___,___]
(e) total amortization expense: $[___,___,___]
(f) other non-Cash items reducing
Consolidated Net Income[*]: $[___,___,___]
(g) unusual or nonrecurring charges or expenses: $[___,___,___]
(h) non-cash compensation charges and charges
related to the expensing of stock options: $[___,___,___]
(i) charges for the write-of of unamortized debt costs: $[___,___,___]
(j) charges for the impairment of assets: $[___,___,___]
(k) restructuring charges incurred in connection with the
closure of theatres determined to be underperforming
by the board of directors of the Company in its sole
discretion: $[___,___,___]
(l) Transportation Costs and all other upfront fees,
costs and expenses payable in respect of equity and
debt offerings and financings, investments, mergers,
recapitalizations, option buyouts, asset sales and
Permitted Acquisitions: $[___,___,___]
(ii) other non-cash items increasing
Consolidated Net Income[**]: $[___,___,___]
-----------------------------
[*] Excluding any such non-Cash item to the extent that it represents an
accrual or reserve for potential Cash items in any future period or
amortization of a prepaid Cash item that was paid in a prior period.
[**] Excluding any such non-Cash item to the extent that it represents the
reversal of an accrual or reserve for potential Cash items in any prior
period.
EXHIBIT C-A-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
2. Consolidated Capital Expenditures: $[___,___,___]
3. Consolidated Fixed Charges: (i) + (ii) = $[___,___,___]
(i) Consolidated Interest Expense: $[___,___,___]
(ii) (a) X (b) = $[___,___,___]
(a) all dividends, whether paid or accrued and whether or
not in cash, on any series of preferred stock of
Company or any of its Subsidiaries other than
dividends on Capital Stock solely payable in Capital
Stock of Company (other than Disqualified Stock) or
to Company or to a Subsidiary of Company: $[___,___,___]
(b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state
and local statutory tax rate of Company, expressed as a
decimal, in each case determined on a consolidated basis
in accordance with GAAP: [__.__]
4. Consolidated Net Income: (i) - (ii) = $[___,___,___]
(i) the net income (or loss) of Company and its Subsidiaries on a
consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP: $[___,___,___]
(ii) (a) the income (or loss) of any Person
(other than a Subsidiary of Company)
in which any other Person
(other than Company or any of its 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 Subsidiaries by such Person
during such period: $[___,___,___]
(b) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary of Company or is
merged into or consolidated with Company or any of
its Subsidiaries or that Person's assets are acquired
by Company or any of its Subsidiaries: $[___,___,___]
(c) 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
EXHIBIT C-A-2
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
applicable to that Subsidiary: $[___,___,___]
(d) any after-tax gains or losses attributable to asset
sales or returned surplus assets
of any Pension Plan: $[___,___,___]
(e) to the extent not included in clauses (ii)(a) through
(d) above, any net extraordinary
gains or net extraordinary losses: $[___,___,___]
5. Fixed Charge Coverage Ratio: (i)/(ii) =
(i) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter Period then ended: $[___,___,___]
(ii) Consolidated Fixed Charges
for such four-Fiscal Quarter Period: $[___,___,___]
EXHIBIT C-A-3
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT D TO
SECOND LIEN CREDIT AGREEMENT
OPINIONS OF COUNSEL
[TO COME]
EXHIBIT D-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT E TO
SECOND LIEN CREDIT AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "ASSIGNMENT") is dated as
of the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the "ASSIGNOR") and [Insert name of Assignee] (the
"ASSIGNEE"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit and Guaranty Agreement identified below (as
it may be amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed are hereby agreed to and incorporated herein by reference and
made a part of this Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below, the interest in and to all of
the Assignor's rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor's outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, letters or credit and
swingline loans) (the "ASSIGNED INTEREST"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and the Credit Agreement, without representation or warranty by the Assignor.
1. Assignor: ______________________
2. Assignee: ______________________ [and is an Affiliate of a
Lender/Approved Fund[*****]]
3. Credit Agreement: The $100,000,000 Credit and Guaranty Agreement
dated as of February 4, 2004 among CARMIKE
CINEMAS, INC. (the "COMPANY"), the Lenders
parties thereto, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS
L.P., as Sole Lead Arranger, Sole Bookrunner and
Sole Syndication Agent, and NATIONAL CITY BANK,
as Administrative Agent (the "CREDIT AGREEMENT").
4. Assigned Interest:
______________________________
[*****]Select as applicable.
EXHIBIT E-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
Aggregate Amount of Percentage Assigned of
Term Loan Amount of Term Loan Term Loan
Commitment/Loans Commitment/Loans Commitment/Loans
Facility Assigned for all Lenders Assigned [******]
----------------- --------------- -------- ---------------
Term Loan Commitment $______________ $______________ ____________%
Effective Date: ______________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
7. Notice and Wire Instructions:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
Notices: Notices:
__________________________ _______________________
__________________________ _______________________
__________________________ _______________________
Attention: Attention:
Telecopier: Telecopier:
with a copy to: with a copy to:
__________________________ _______________________
__________________________ _______________________
__________________________ _______________________
Attention: Attention:
Telecopier: Telecopier:
Wire Instructions: Wire Instructions:
The terms set forth in this Assignment are hereby agreed to:
-----------------
[******]Set forth, to at least 9 decimals, as a percentage of the Term Loan
Commitment/Loans of all Lenders thereunder.
EXHIBIT E-2
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
ASSIGNOR
[NAME OF ASSIGNOR]
By:_______________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:_______________________
Title:
[Consented to and][********] Accepted:
NATIONAL CITY BANK, as
Administrative Agent
By:_______________________
Title:
[Consented to:][*********]
CARMIKE CINEMAS, INC.
By:_______________________
Title:
------------------------
[********] To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.
[*********] To be added only if
the consent of the Company is required by the terms of the Credit Agreement.
EXHIBIT E-3
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the
Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and
has taken all action necessary, to execute and
deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements,
warranties or representations made in or in
connection with any Credit Document, (ii) the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document
delivered pursuant thereto, other than this
Assignment (herein collectively the "CREDIT
DOCUMENTS"), or any collateral thereunder, (iii) the
financial condition of the Company, any of its
Subsidiaries or Affiliates or any other Person
obligated in respect of any Credit Document or (iv)
the performance or observance by the Company, any of
its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Credit
Document.
1.2 Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has
taken all action necessary, to execute and deliver
this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of
an Eligible Assignee under the Credit Agreement,
(iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement and,
to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement and such
other documents and information as it has deemed
appropriate to make its own credit analysis and
decision to enter into this Assignment and to
purchase the Assigned Interest on the basis of which
it has made such analysis and decision, and (v) if it
is a Non-US Lender, attached to the Assignment is any
documentation required to be delivered by it pursuant
to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i)
it will, independently and without reliance on the
Administrative Agent, the Assignor or any other
Lender, and based on such documents and information
as it shall deem appropriate at that time, continue
to make its own credit decisions in taking or not
taking action under the Credit Documents, and (ii) it
will perform in accordance with their terms all of
the obligations which by the terms of the Credit
Documents are required to be performed by it as a
Lender.
2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after
the Effective Date.]
3. General Provisions. This Assignment shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts,
which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Assignment by telecopy shall be
effective as delivery of a manually executed
EXHIBIT E-4
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
counterpart of this Assignment. This Assignment shall be governed by,
and construed in accordance with, the internal laws of the State of New
York without regard to conflict of laws principles thereof.
EXHIBIT E-5
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT F TO
SECOND LIEN CREDIT AGREEMENT
CERTIFICATE RE NON-BANK STATUS
Reference is made to the Credit and Guaranty Agreement, dated
as of February 4, 2004 (as it may be amended, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among CARMIKE
CINEMAS, INC. ("COMPANY"), certain Subsidiaries of Company, as Guarantors, the
Lenders party thereto from time to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as
Sole Lead Arranger, Sole Bookrunner and Sole Syndication Agent, and NATIONAL
CITY BANK, as Administrative Agent and Collateral Agent. Pursuant to Section
2.18(c) of the Credit Agreement, the undersigned hereby certifies that it is not
a "bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code of 1986, as amended.
[NAME OF LENDER]
By: ____________________________
Name:
Title:
EXHIBIT F-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT G-1 TO
SECOND LIEN CREDIT AGREEMENT
CLOSING DATE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY AS FOLLOWS:
1. I am the Chief Financial Officer of CARMIKE CINEMAS, INC.,
("COMPANY").
2. Pursuant to Section 2.1 of the Credit and Guaranty Agreement, dated
as of February 4, 2004 (as it may be amended, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among Company,
certain Subsidiaries of Company, as Guarantors, the Lenders party thereto from
time to time, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as Sole Lead Arranger, Sole
Bookrunner and Sole Syndication Agent, and NATIONAL CITY BANK, as Administrative
Agent and Collateral Agent, Company requests that Lenders make the following
Loans to Company on February 4, 2004 (the "CLOSING DATE"):
Term Loans: $[ ]
[ ] a. Base Rate Loan(s)
[ ] b. Eurodollar Rate Loans with an initial Interest
Period of ____ month(s)
3. In my capacity as Chief Financial Officer, I have reviewed the terms
of Section 3 of the Credit Agreement and the definitions and provisions
contained in such Credit Agreement relating thereto, and in my opinion I have
made, or have caused to be made under my supervision, such examination or
investigation as is reasonably necessary for an informed opinion as to the
matters referred to herein.
4. Based upon my review and examination described in paragraph 3 above,
I certify, in my capacity as Chief Financial Officer and on behalf of the
Company, that:
(i) as of the Closing Date, the representations and
warranties contained in each of the Credit Documents are true, correct
and complete in all material respects on and as of the Closing Date to
the same extent as though made on and as of such date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties are
true, correct and complete in all material respects on and as of such
earlier date, and except as to changes otherwise expressly permitted by
the terms of the Credit Documents;
(ii) as of the Closing Date, no event has occurred and is
continuing or would result from the consummation of the borrowing
contemplated hereby that would constitute an Event of Default or a
Default; and
(iii) Consolidated Adjusted EBITDA of Company shall not be
less than $99,000,000 for the twelve month period ended December 31,
2003.
5. Attached as Annex A hereto are true and complete (and, where
applicable, executed and conformed) copies of each of the Related Agreements and
each Designated Contract. I have reviewed, or caused to be reviewed
EXHIBIT G-1-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
under my supervision, each of the Related Agreements and Designated Contracts to
the extent reasonably necessary to determine that (i) there are no defaults or
events of default (as may be defined in the applicable Related Agreement or
Designated Contract) under any Related Agreements or Designated Contracts, and
(ii) each Related Agreement and Designated Contract is in full force and effect
and no provisions therof have been modified or waived in any respect materially
adverse to the Company or the Lenders, in each case without the consent of the
Syndication Agent or Administrative Agent.
6. Each Credit Party has requested the counsel set forth in Schedule
3.1(p) to the Credit Agreement to deliver to Agents and Lenders on the Closing
Date favorable written opinions setting forth substantially the matters in the
opinions designated in Exhibit D annexed to the Credit Agreement, and as to such
other matters as Syndication Agent and Administrative Agent may have reasonably
requested.
7. Attached hereto as Annex B are true, complete and correct copies of
(a) the Historical Financial Statements, (b) pro forma consolidated balance
sheet of Company and its Subsidiaries as at the Closing Date, and reflecting the
related financings and the other transactions contemplated by the Credit
Documents and the Related Agreements, and (c) the Projections.
[Remainder of page intentionally left blank.]
EXHIBIT G-1-2
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
The foregoing certifications are made and delivered as of February 4, 2004.
CARMIKE CINEMAS, INC.
______________________________
Title: Chief Financial Officer
EXHIBIT G-1-3
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT H TO
SECOND LIEN CREDIT AGREEMENT
COUNTERPART AGREEMENT
This COUNTERPART AGREEMENT, dated [MM/DD/YY] (this "COUNTERPART
AGREEMENT") is delivered pursuant to that certain Credit and Guaranty Agreement,
dated as of February 4, 2004 (as it may be amended, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among CARMIKE
CINEMAS, INC. ("COMPANY"), certain Subsidiaries of Company, as Guarantors, the
Lenders party thereto from time to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as
Sole Lead Arranger, Sole Bookrunner and Sole Syndication Agent, and NATIONAL
CITY BANK, as Administrative Agent and Collateral Agent.
SECTION 1. Pursuant to Section 5.10 of the Credit Agreement, the
undersigned hereby:
(a) agrees that this Counterpart Agreement may be
attached to the Credit Agreement and that by the execution and delivery
hereof, the undersigned becomes a Guarantor under the Credit Agreement
and agrees to be bound by all of the terms thereof;
(b) represents and warrants that each of the representations
and warranties set forth in the Credit Agreement and each other Credit
Document and applicable to the undersigned is true and correct in all
material respects both before and after giving effect to this
Counterpart Agreement, except to the extent that any such
representation and warranty relates solely to any earlier date, in
which case such representation and warranty is true and correct in all
material respects as of such earlier date, and except as to changes
otherwise expressly permitted by the terms of the Credit Documents;
(c) represents and warrants that no Default or Event of
Default will result from the execution, delivery or performance by the
undersigned of its obligations under this Counterpart Agreement;
(d) agrees to irrevocably and unconditionally guaranty the due
and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that
would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)) and in
accordance with Section 7 of the Credit Agreement; and
(e) (i) agrees that this counterpart may be attached to the
Pledge and Security Agreement, (ii) agrees that the undersigned will
comply with all the terms and conditions of the Security Agreement as
if it were an original signatory thereto, (iii) grants to Secured Party
(as such term is defined in the Pledge and Security Agreement) a
security interest in all of the undersigned's right, title and interest
in and to all "Collateral" (as such term is defined in the Pledge and
Security Agreement) of the undersigned, in each case whether now or
hereafter existing or in which the undersigned now has or hereafter
acquires an interest and wherever the same may be located and (iv)
delivers to Collateral Agent supplements to all schedules attached to
the Pledge and Security Agreement. All such Collateral shall be deemed
to be part of the "Collateral" and hereafter subject to each of the
terms and conditions of the Pledge and Security Agreement.
EXHIBIT H-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
SECTION 2. The undersigned agrees from time to time, upon request of
Administrative Agent, to take such additional actions and to execute and deliver
such additional documents and instruments as Administrative Agent may reasonably
request to effect the transactions contemplated by, and to carry out the intent
of, this Agreement. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party (including, if applicable, any party required to evidence its consent
to or acceptance of this Agreement) against whom enforcement of such change,
waiver, discharge or termination is sought. Any notice or other communication
herein required or permitted to be given shall be given in pursuant to Section
10.1 of the Credit Agreement, and all for purposes thereof, the notice address
of the undersigned shall be the address as set forth on the signature page
hereof. In case any provision in or obligation under this Agreement 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.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
EXHIBIT H-2
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
IN WITNESS WHEREOF, the undersigned has caused this Counterpart
Agreement to be duly executed and delivered by its duly authorized officer as of
the date above first written.
[NAME OF SUBSIDIARY]
By:______________________
Name:
Title:
Address for Notices:
__________________
__________________
__________________
Attention:
Telecopier
with a copy to:
__________________
__________________
__________________
Attention:
Telecopier
ACKNOWLEDGED AND ACCEPTED,
as of the date above first written:
NATIONAL CITY BANK,
as Administrative Agent and as Collateral Agent
By:_____________________
Name:
Title:
EXHIBIT H-3
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT I TO
SECOND LIEN CREDIT AGREEMENT
PLEDGE AND SECURITY AGREEMENT
[TO COME]
EXHIBIT I-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
SECOND LIEN
PLEDGE AND SECURITY AGREEMENT
DATED AS OF FEBRUARY 4, 2004
BETWEEN
EACH OF THE GRANTORS PARTY HERETO
AND
NATIONAL CITY BANK,
AS THE COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS; GRANT OF SECURITY................................................................1
1.1 GENERAL DEFINITIONS...........................................................................1
1.2 DEFINITIONS; INTERPRETATION...................................................................8
SECTION 2. GRANT OF SECURITY.............................................................................8
2.1 GRANT OF SECURITY.............................................................................8
2.2 CERTAIN LIMITED EXCLUSIONS....................................................................9
2.3 SECOND PRIORITY NATURE OF LIENS...............................................................9
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE..............................................9
3.1 SECURITY FOR OBLIGATIONS......................................................................9
3.2 CONTINUING LIABILITY UNDER COLLATERAL........................................................10
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.................................................10
4.1 GENERALLY....................................................................................10
4.2 EQUIPMENT AND INVENTORY......................................................................13
4.3 RECEIVABLES..................................................................................14
4.4 INVESTMENT RELATED PROPERTY..................................................................16
4.5 [RESERVED.]..................................................................................23
4.6 LETTER OF CREDIT RIGHTS......................................................................23
4.7 INTELLECTUAL PROPERTY........................................................................23
4.8 COMMERCIAL TORT CLAIMS.......................................................................26
SECTION 5. FURTHER ASSURANCES; ADDITIONAL GRANTORS......................................................26
5.1 FURTHER ASSURANCES...........................................................................26
5.2 ADDITIONAL GRANTORS..........................................................................27
SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT..................................................27
6.1 POWER OF ATTORNEY............................................................................27
6.2 NO DUTY ON THE PART OF COLLATERAL AGENT OR SECURED PARTIES...................................28
SECTION 7. REMEDIES.....................................................................................29
7.1 GENERALLY....................................................................................29
7.2 APPLICATION OF PROCEEDS......................................................................30
7.3 SALES ON CREDIT..............................................................................31
7.4 DEPOSIT ACCOUNTS.............................................................................31
7.5 INVESTMENT RELATED PROPERTY..................................................................31
7.6 INTELLECTUAL PROPERTY........................................................................31
7.7 CASH PROCEEDS................................................................................33
SECTION 8. COLLATERAL AGENT.............................................................................33
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS..............................................34
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM..............................................34
i
SECTION 11. MISCELLANEOUS...............................................................................35
SCHEDULE 4.1 -- GENERAL INFORMATION
SCHEDULE 4.2 -- LOCATION OF EQUIPMENT AND INVENTORY
SCHEDULE 4.4 -- INVESTMENT RELATED PROPERTY
SCHEDULE 4.5 -- MATERIAL CONTRACTS
SCHEDULE 4.6 -- DESCRIPTION OF LETTERS OF CREDIT
SCHEDULE 4.7 -- INTELLECTUAL PROPERTY - EXCEPTIONS
SCHEDULE 4.8 -- COMMERCIAL TORT CLAIMS
EXHIBIT A -- PLEDGE SUPPLEMENT
EXHIBIT B -- UNCERTIFICATED SECURITIES CONTROL AGREEMENT
EXHIBIT C -- SECURITIES ACCOUNT CONTROL AGREEMENT
EXHIBIT D -- DEPOSIT ACCOUNT CONTROL AGREEMENT
ii
This SECOND LIEN PLEDGE AND SECURITY AGREEMENT, dated as of
February 4, 2004 (this "Agreement"), between EACH OF THE UNDERSIGNED, whether as
an original signatory hereto or as an Additional Grantor (as herein defined)
(each, a "GRANTOR"), and NATIONAL CITY BANK, as collateral agent for the Secured
Parties (as herein defined) (in such capacity as collateral agent, the
"COLLATERAL AGENT").
RECITALS:
WHEREAS, reference is made to that certain Credit and Guaranty
Agreement, dated as of the date hereof (as it may be amended, restated,
supplemented or otherwise modified from time to time, the "TERM LOAN CREDIT
AGREEMENT"), by and among Carmike Cinemas, Inc. ("COMPANY"), certain
Subsidiaries of Company, the lenders party thereto from time to time (the
"LENDERS"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as Sole Lead Arranger, Sole
Bookrunner and Sole Syndication Agent, and National City Bank, as Administrative
Agent and the Collateral Agent;
WHEREAS, subject to the terms and conditions of the Term Loan Credit
Agreement, certain Grantors may enter into one or more Hedge Agreements (as
defined in the Term Loan Credit Agreement) with one or more Lender
Counterparties;
WHEREAS, in consideration of the extensions of credit and other
accommodations of Lenders and Lender Counterparties as set forth in the Term
Loan Credit Agreement and the Hedge Agreements, respectively, each Grantor has
agreed to secure such Grantor's obligations under the Credit Documents and the
Hedge Agreements as set forth herein; and
WHEREAS, in order to secure the obligations under the Revolving Credit
Agreement (as defined herein), Grantors are concurrently granting to the
collateral agent under the Revolving Credit Agreement (the "REVOLVING COLLATERAL
AGENT"), for the benefit of the holders of obligations under the Revolving
Credit Agreement, a first priority security interest in the Collateral (the
"FIRST PRIORITY LIENS"), it being understood that the relative rights and
priorities of the grantees in respect of the Collateral are governed by the
Intercreditor Agreement (as defined in the Term Loan Credit Agreement).
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the Collateral Agent
agree as follows:
SECTION 1. DEFINITIONS; GRANT OF SECURITY.
1.1 GENERAL DEFINITIONS. In this Agreement, the following terms shall
have the following meanings:
"ACCOUNT DEBTOR" shall mean each Person who is obligated on a
Receivable or any Supporting Obligation related thereto.
"ACCOUNTS" shall mean all "accounts" as defined in Article 9
of the UCC.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ADDITIONAL GRANTORS" shall have the meaning assigned in
Section 5.2.
"ASSIGNED AGREEMENTS" shall mean all agreements and contracts
to which such Grantor is a party as of the date hereof, or to which such Grantor
becomes a party after the date hereof, including, without limitation, each
Material Contract, as each such agreement may be amended, supplemented or
otherwise modified from time to time.
"CASH PROCEEDS" means, with respect to payments of
Receivables, all proceeds of any Collateral received by any Grantor consisting
of cash, checks and other near-cash items.
"CHATTEL PAPER" shall mean all "chattel paper" as defined in
Article 9 of the UCC, including, without limitation, "electronic chattel paper"
or "tangible chattel paper", as each term is defined in Article 9 of the UCC.
"COLLATERAL" shall have the meaning assigned in Section 2.1.
"COLLATERAL ACCOUNT" shall mean any account established by the
Collateral Agent.
"COLLATERAL AGENT" shall have the meaning set forth in the
preamble.
"COLLATERAL RECORDS" shall mean books, records, ledger cards,
files, correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.
"COLLATERAL SUPPORT" shall mean all property (real or
personal) assigned, hypothecated or otherwise securing any Collateral and shall
include any security agreement or other agreement granting a lien or security
interest in such real or personal property.
"COMMERCIAL TORT CLAIMS" shall mean all "commercial tort
claims" as defined in Article 9 of the UCC, including, without limitation, all
commercial tort claims listed on Schedule 4.8 (as such schedule may be amended
or supplemented from time to time).
"COMMODITIES ACCOUNTS" (i) shall mean all "commodity accounts"
as defined in Article 9 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4 under the heading "COMMODITIES
ACCOUNTS" (as such schedule may be amended or supplemented from time to time).
"COMPANY" shall have the meaning set forth in the preamble.
"CONCENTRATION DEPOSIT ACCOUNT" as defined in Section
4.4.4(a)(ii).
"CONTROLLED FOREIGN CORPORATION" shall mean "controlled
foreign corporation" as defined in the Tax Code.
"COPYRIGHT LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Copyrights (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(B) (as such schedule may be amended or
supplemented from time to time).
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"COPYRIGHTS" shall mean all United States, and foreign
copyrights, including but not limited to copyrights in software and databases,
and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act),
whether registered or unregistered, and, with respect to any and all of the
foregoing: (i) all registrations and applications therefor including, without
limitation, the registrations and applications referred to in Schedule 4.7(A)
(as such schedule may be amended or supplemented from time to time), (ii) all
extensions and renewals thereof, (iii) all rights corresponding thereto
throughout the world, (iv) all rights to ▇▇▇ for past, present and future
infringements thereof, and (v) all Proceeds of the foregoing, including, without
limitation, licenses, royalties, income, payments, claims, damages and proceeds
of suit.
"DEPOSIT ACCOUNTS" (i) shall mean all "deposit accounts" as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
of the accounts listed on Schedule 4.4 under the heading "Deposit Accounts" (as
such schedule may be amended or supplemented from time to time).
"DOCUMENTS" shall mean all "documents" as defined in Article 9
of the UCC.
"EQUIPMENT" shall mean: (i) all "equipment" as defined in
Article 9 of the UCC, (ii) all machinery, manufacturing equipment, data
processing equipment, computers, office equipment, furnishings, furniture,
appliances, fixtures and tools (in each case, regardless of whether
characterized as equipment under the UCC) and (iii) all accessions or additions
thereto, all parts thereof, whether or not at any time of determination
incorporated or installed therein or attached thereto, and all replacements
therefor, wherever located, now or hereafter existing, including any fixtures.
"FIRST LIEN COLLATERAL AGENT" shall have the meaning set forth
in the Recitals.
"FIRST PRIORITY LIENS" shall have the meaning set forth in the
Recitals.
"GENERAL INTANGIBLES" (i) shall mean all "general intangibles"
as defined in Article 9 of the UCC, including "payment intangibles" also as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
interest rate or currency protection or hedging arrangements, all tax refunds,
all licenses, permits, concessions and authorizations, all Assigned Agreements
and all Intellectual Property (in each case, regardless of whether characterized
as general intangibles under the UCC).
"GOODS" (i) shall mean all "goods" as defined in Article 9 of
the UCC and (ii) shall include, without limitation, all Inventory and Equipment
(in each case, regardless of whether characterized as goods under the UCC).
"GRANTORS" shall have the meaning set forth in the preamble.
"INSTRUMENTS" shall mean all "instruments" as defined in
Article 9 of the UCC.
"INSURANCE" shall mean (i) all insurance policies covering any
or all of the Collateral (regardless of whether the Collateral Agent is the loss
payee thereof) and (ii) any key man life insurance policies.
"INTELLECTUAL PROPERTY" shall mean, collectively, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, the Trade Secrets, and the Trade Secret
Licenses.
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"INVENTORY" shall mean (i) all "inventory" as defined in
Article 9 of the UCC and (ii) all goods held for sale or lease or to be
furnished under contracts of service or so leased or furnished, all raw
materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in any Grantor's
business; all goods in which any Grantor has an interest in mass or a joint or
other interest or right of any kind; and all goods which are returned to or
repossessed by any Grantor, all computer programs embedded in any goods and all
accessions thereto and products thereof (in each case, regardless of whether
characterized as inventory under the UCC).
"INVESTMENT ACCOUNTS" shall mean the Collateral Account,
Securities Accounts, Commodities Accounts and Deposit Accounts.
"INVESTMENT RELATED PROPERTY" shall mean: (i) all "investment
property" (as such term is defined in Article 9 of the UCC) and (ii) all of the
following (regardless of whether classified as investment property under the
UCC): all Pledged Equity Interests, Pledged Debt, the Investment Accounts and
certificates of deposit.
"LENDERS" shall have the meaning set forth in the recitals.
"LETTER OF CREDIT RIGHT" shall mean "letter-of-credit right"
as defined in Article 9 of the UCC.
"MONEY" shall mean "money" as defined in the UCC.
"NON-ASSIGNABLE CONTRACT" shall mean any agreement, contract
or license to which any Grantor is a party that by its terms purport to restrict
or prevent the assignment or granting of a security interest therein (either by
its terms or by any federal or state statutory prohibition or otherwise
irrespective of whether such prohibition or restriction is enforceable under
Section 9-406 through 409 of the UCC).
"OPERATIVE DEPOSIT ACCOUNTS" means all Deposit Accounts of
Grantors, other than the Concentration Deposit Accounts and any payroll or
disbursement accounts used in the ordinary course of business.
"PATENT LICENSES" shall mean all agreements providing for the
granting of any right in or to Patents (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule 4.7(D) (as such schedule may be amended or supplemented from time to
time).
"PATENTS" shall mean all United States and foreign patents and
certificates of invention, or similar industrial property rights, and
applications for any of the foregoing, including, but not limited to: (i) each
patent and patent application referred to in Schedule 4.7(C) hereto (as such
schedule may be amended or supplemented from time to time), (ii) all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations thereof, (ii) all rights corresponding thereto throughout the
world, (ii) all inventions and improvements described therein, (iv) all rights
to ▇▇▇ for past, present and future infringements thereof, (v) all licenses,
claims, damages, and proceeds of suit arising therefrom, and (v) all Proceeds of
the foregoing, including, without limitation, licenses, royalties, income,
payments, claims, damages, and proceeds of suit.
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"PERMITTED SALE" shall mean those sales, transfers,
assignments and other dispositions of assets and property permitted by the Term
Loan Credit Agreement.
"PLEDGE SUPPLEMENT" shall mean any supplement to this
agreement in substantially the form of Exhibit A.
"PLEDGED DEBT" shall mean all Indebtedness owed to such
Grantor, including, without limitation, all Indebtedness described on Schedule
4.4(A) under the heading "Pledged Debt" (as such schedule may be amended or
supplemented from time to time), issued by the obligors named therein, the
instruments evidencing such Indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Indebtedness.
"PLEDGED EQUITY INTERESTS" shall mean all Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust
Interests.
"PLEDGED LLC INTERESTS" shall mean all interests in any
limited liability company including, without limitation, all limited liability
company interests listed on Schedule 4.4(A) under the heading "Pledged LLC
Interests" (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of such
limited liability company or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests.
"PLEDGED PARTNERSHIP INTERESTS" shall mean all interests in
any general partnership, limited partnership, limited liability partnership or
other partnership including, without limitation, all partnership interests
listed on Schedule 4.4(A) under the heading "Pledged Partnership Interests" (as
such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such partnership interests and any interest
of such Grantor on the books and records of such partnership or on the books and
records of any securities intermediary pertaining to such interest and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
partnership interests.
"PLEDGED STOCK" shall mean all shares of capital stock owned
by such Grantor, including, without limitation, all shares of capital stock
described on Schedule 4.4(A) under the heading "Pledged Stock" (as such schedule
may be amended or supplemented from time to time), and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the
books of the issuer of such shares or on the books of any securities
intermediary pertaining to such shares, and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares.
"PLEDGED TRUST INTERESTS" shall mean all interests in a
Delaware business trust or other trust including, without limitation, all trust
interests listed on Schedule 4.4(A) under the heading "Pledged Trust Interests"
(as such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such trust interests and any interest of such
Grantor on the books and records of such trust or on the books and records of
any securities
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intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such trust interests.
"PROCEEDS" shall mean: (i) all "proceeds" as defined in
Article 9 of the UCC, (ii) payments or distributions made with respect to any
Investment Related Property and (iii) whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
"RECEIVABLES" shall mean all rights to payment, whether or not
earned by performance, for goods or other property sold, leased, licensed,
assigned or otherwise disposed of, or services rendered or to be rendered,
including, without limitation all such rights constituting or evidenced by any
Account, Chattel Paper, Instrument, General Intangible or Investment Related
Property, together with all of Grantor's rights, if any, in any goods or other
property giving rise to such right to payment and all Collateral Support and
Supporting Obligations related thereto and all Receivables Records.
"RECEIVABLES RECORDS" shall mean (i) all original copies of
all documents, instruments or other writings or electronic records or other
Records evidencing the Receivables, (ii) all books, correspondence, credit or
other files, Records, ledger sheets or cards, invoices, and other papers
relating to Receivables, including, without limitation, all tapes, cards,
computer tapes, computer discs, computer runs, record keeping systems and other
papers and documents relating to the Receivables, whether in the possession or
under the control of Grantor or any computer bureau or agent from time to time
acting for Grantor or otherwise, (iii) all evidences of the filing of financing
statements and the registration of other instruments in connection therewith,
and amendments, supplements or other modifications thereto, notices to other
creditors or secured parties, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of information
related in any way to the foregoing or any Receivable.
"RECORD" shall have the meaning specified in Article 9 of the
UCC.
"REVOLVING CREDIT AGREEMENT" means the first lien Credit and
Guaranty Agreement dated as of the date hereof among Company as borrower,
certain subsidiaries of Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. as sole lead
arranger, sole bookrunner and sole syndication agent, ▇▇▇▇▇ Fargo Foothill,
Inc., as administrative agent and collateral agent and the lenders party
thereto, as it may be amended, restated, supplemented or otherwise modified from
time to time.
"SECOND PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to this Agreement or any other Credit
Document, that such Lien is second in priority only to the Liens created under
the Revolving Credit Agreement, other than any Permitted Lien.
"SECURED OBLIGATIONS" shall have the meaning assigned in
Section 3.1.
"SECURED PARTIES" shall mean the Lenders and the Lender
Counterparties and shall include, without limitation, all former Lenders and
Lender Counterparties to the extent that any Obligations (excluding contingent
obligations in respect of customary indemnification
6
liabilities that survive termination of the Credit Documents or such Person's
release or discharge therefrom) owing to such Persons were incurred while such
Persons were Lenders or Lender Counterparties and such Obligations have not been
paid or satisfied in full.
"SECURITIES ACCOUNTS" (i) shall mean all "securities accounts"
as defined in Article 8 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4(A) under the heading "Securities
Accounts" (as such schedule may be amended or supplemented from time to time).
"SUPPORTING OBLIGATION" shall mean all "supporting
obligations" as defined in Article 9 of the UCC.
"TAX CODE" shall mean the United States Internal Revenue Code
of 1986, as amended from time to time.
"TERM LOAN CREDIT AGREEMENT" shall have the meaning set forth
in the Recitals.
"TRADEMARK LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Trademarks (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(F) (as such schedule may be amended or
supplemented from time to time).
"TRADEMARKS" shall mean all United States, and foreign
trademarks, trade names, corporate names, company names, business names,
fictitious business names, Internet domain names, service marks, certification
marks, collective marks, logos, other source or business identifiers, designs
and general intangibles of a like nature, all registrations and applications for
any of the foregoing including, but not limited to: (i) the registrations and
applications referred to in Schedule 4.7(E) (as such schedule may be amended or
supplemented from time to time), (ii) all extensions or renewals of any of the
foregoing, (iii) all of the goodwill of the business connected with the use of
and symbolized by the foregoing, (iv) the right to ▇▇▇ for past, present and
future infringement or dilution of any of the foregoing or for any injury to
goodwill, and (v) all Proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages, and proceeds of suit.
"TRADE SECRET LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Trade Secrets (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(G) (as such schedule may be amended or
supplemented from time to time).
"TRADE SECRETS" shall mean all trade secrets and all other
confidential or proprietary information and know-how whether or not such Trade
Secret has been reduced to a writing or other tangible form, including all
documents and things embodying, incorporating, or referring in any way to such
Trade Secret, including but not limited to: (i) the right to ▇▇▇ for past,
present and future misappropriation or other violation of any Trade Secret, and
(ii) all Proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
7
"UNITED STATES" shall mean the United States of America.
1.2 DEFINITIONS; INTERPRETATION. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Term Loan Credit Agreement or,
if not defined therein, in the UCC. References to "Sections," "Exhibits" and
"Schedules" shall be to Sections, Exhibits and Schedules, as the case may be, of
this Agreement unless otherwise specifically provided. Section 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. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. If any conflict or inconsistency
exists between this Agreement and the Term Loan Credit Agreement, the Term Loan
Credit Agreement shall govern. All references herein to provisions of the UCC
shall include all successor provisions under any subsequent version or amendment
to any Article of the UCC.
SECTION 2. GRANT OF SECURITY.
2.1 GRANT OF SECURITY. Each Grantor hereby grants to the Collateral
Agent a security interest in and continuing lien on all of such Grantor's right,
title and interest in, to and under all personal property of such Grantor
including, but not limited to the following, in each case whether now owned or
existing or hereafter acquired or arising and wherever located (all of which
being hereinafter collectively referred to as the "COLLATERAL"):
(a) Accounts;
(b) Chattel Paper;
(c) Documents;
(d) General Intangibles;
(e) Goods;
(f) Instruments;
(g) Insurance;
(h) Intellectual Property;
(i) Investment Related Property;
(j) Letter of Credit Rights;
(k) Money;
8
(l) Receivables and Receivable Records;
(m) Commercial Tort Claims;
(n) to the extent not otherwise included above, all Collateral
Records, Collateral Support and Supporting Obligations relating to any of the
foregoing; and
(o) to the extent not otherwise included above, all Proceeds,
products, accessions, rents and profits of or in respect of any of the
foregoing.
2.2 CERTAIN LIMITED EXCLUSIONS. Notwithstanding anything herein to the
contrary, in no event shall the security interest granted under Section 2.1
hereof attach to, and the definition of Collateral, and all definitions
constituting part of the definition of Collateral, shall not refer to, (a) any
lease, license, contract, property rights or agreement to which any Grantor is a
party or any of its rights or interests thereunder if and for so long as the
grant of such security interest shall constitute or result in (i) the
abandonment, invalidation or unenforceability of any right, title or interest of
any Grantor therein or (ii) in a breach or termination pursuant to the terms of,
or a default under, any such lease, license, contract property rights or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity),
provided however that such security interest shall attach immediately at such
time as the condition causing such abandonment, invalidation or unenforceability
shall be remedied and to the extent severable, shall attach immediately to any
portion of such Lease, license, contract, property rights or agreement that does
not result in any of the consequences specified in (i) or (ii) above; (b) in any
of the outstanding Capital Stock of a Controlled Foreign Corporation in excess
of 65% of the voting power of all classes of Capital Stock of such Controlled
Foreign Corporation entitled to vote; provided that immediately upon the
amendment of the Tax Code to allow the pledge of a greater percentage of the
voting power of Capital Stock in a Controlled Foreign Corporation without
adverse tax consequences, the Collateral shall include, and the security
interest granted by each Grantor shall attach to, such greater percentage of
Capital Stock of each Controlled Foreign Corporation; (c) any of the outstanding
Capital Stock of any Joint Venture or other Person (other than a Subsidiary) in
which the Grantor maintains an Investment, where the organizational documents
for such Joint Venture or other Person, or any agreement among owners of the
Capital Stock of such Joint Venture or Person, prohibit the pledge or grant of
any security interest or other Lien on such Capital Stock (other than to the
extent that any such term would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions)); or (d) any motor vehicles subject to certificates of title or
other similar registration under applicable state or federal law.
2.3 SECOND PRIORITY NATURE OF LIENS. Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Collateral Agent
pursuant to this Agreement is Second Priority and such grant and the exercise of
any right or remedy by the Collateral Agent hereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control.
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.
3.1 SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Collateral is collateral security for, the prompt and complete payment or
performance in full when due,
9
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a) (and any successor provision thereof)), of all
Obligations with respect to every Grantor (the "SECURED OBLIGATIONS").
3.2 CONTINUING LIABILITY UNDER COLLATERAL. Notwithstanding anything
herein to the contrary, (i) each Grantor shall remain liable for all obligations
under the Collateral and nothing contained herein is intended or shall be a
delegation of duties to the Collateral Agent or any Secured Party, (ii) each
Grantor shall remain liable under each of the agreements included in the
Collateral, including, without limitation, any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Collateral Agent nor any
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related thereto nor shall the Collateral Agent nor any Secured Party have any
obligation to make any inquiry as to the nature or sufficiency of any payment
received by it or have any obligation to take any action to collect or enforce
any rights under any agreement included in the Collateral, including, without
limitation, any agreements relating to Pledged Partnership Interests or Pledged
LLC Interests, and (iii) the exercise by the Collateral Agent of any of its
rights hereunder and in accordance with the Intercreditor Agreement shall not
release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 GENERALLY.
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and on each Credit Date, that
except as otherwise expressly provided herein or in the Credit Agreement:
(i) it owns the Collateral purported to be owned by
it or otherwise has the rights it purports to have in each item of
Collateral and, as to all Collateral whether now existing or hereafter
acquired, will continue to own or have such rights in each item of the
Collateral, in each case free and clear of any and all Liens, rights or
claims of all other Persons, including, without limitation, liens
arising as a result of such Grantor becoming bound (as a result of
merger or otherwise) as debtor under a security agreement entered into
by another Person other than the First Priority Liens and Permitted
Liens;
(ii) it has indicated on Schedule 4.1(A)(as such
schedule may be amended or supplemented from time to time): (w) the
type of organization of such Grantor, (x) the jurisdiction of
organization of such Grantor, (y) its organizational identification
number and (z) the jurisdiction where the chief executive office or its
sole place of business is (or the principal residence if such Grantor
is a natural person), and for the one-year period preceding the date
hereof has been, located.
(iii) the full legal name of such Grantor is as set
forth on Schedule 4.1(A) and it has not done in the last five (5)
years, and does not do, business under any other name (including any
trade-name or fictitious business name) except for
10
those names set forth on Schedule 4.1(B) (as such schedule may be
amended or supplemented from time to time);
(iv) except as provided on Schedule 4.1(C), it has
not changed its name, jurisdiction of organization, chief executive
office or sole place of business (or principal residence if such
Grantor is a natural person) or its corporate structure in any way
(e.g., by merger, consolidation, change in corporate form or otherwise)
within the past five (5) years;
(v) other than with respect to the First Priority
Liens, it has not within the last five (5) years become bound (whether
as a result of merger or otherwise) as debtor under a security
agreement entered into by another Person as debtor, which has not
heretofore been terminated other than the agreements identified on
Schedule 4.1(D) hereof (as such schedule may be amended or supplemented
from time to time);
(vi) with respect to each agreement identified on
Schedule 4.1(D), it has indicated on Schedule 4.1 (A) and Schedule
4.1(B) the information required pursuant to Section 4.1(a)(ii), (iii)
and (iv) with respect to the debtor under each such agreement;
(vii) upon the filing of all UCC financing statements
naming each Grantor as "debtor" and the Collateral Agent as "secured
party" \ and describing the Collateral in the filing offices set forth
opposite such Grantor's name on Schedule 4.1(E) hereof (as such
schedule may be amended or supplemented from time to time) and other
filings delivered by each Grantor, upon execution of a control
agreement substantially in the form of Exhibit D hereto with respect to
any Concentration Deposit Account, upon execution of a control
agreement substantially in the form of Exhibit C hereto with respect to
any Securities Account, upon delivery by the applicable Grantor to the
Collateral Agent any certificated Securities together with the
applicable stock power, upon execution of a control agreement
substantially in the form of Exhibit B hereto with respect to any
Uncertificated Securities, upon delivery by any bailee holding any
Collateral of any Grantor, acknowledgment that it is holding such
Collateral for the benefit of the Collateral Agent, upon consent of the
issuer with respect to Letter of Credit Rights, and to the extent not
subject to Article 9 of the UCC, upon recordation of the security
interests granted hereunder in Patents, Trademarks and Copyrights in
the applicable intellectual property registries, including but not
limited to the United States Patent and Trademark Office and the United
States Copyright Office, the security interests granted to the
Collateral Agent hereunder constitute valid and perfected Second
Priority Liens (subject in the case of priority only to the First
Priority Liens, Permitted Liens and to the rights of the United States
government (including any agency or department thereof) with respect to
United States government Receivables) on all of the Collateral, other
than (i) Money not in possession of the Collateral Agent, (ii) any
Operative Deposit Accounts not subject to control agreements pursuant
to Section 9-314 of the UCC, (iii) any assets and property as to which
Article 9 of the UCC does not apply as provided in Section 9-109 of the
UCC and (iv) any aircraft, aircraft engines, or other tangible property
that is subject to certificates of title or other similar registration
under applicable state or federal law;
(viii) all actions and consents, including all
filings, notices, registrations and recordings necessary or desirable
for the exercise by the Collateral
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Agent of the voting or other rights provided for in this Agreement or
the exercise of remedies in respect of the Collateral have been made or
obtained;
(ix) other than the financing statements filed in
favor of the Collateral Agent and the First Lien Collateral Agent, no
effective UCC financing statement, fixture filing or other instrument
similar in effect under any applicable law covering all or any part of
the Collateral is on file in any filing or recording office except for
(x) financing statements for which proper termination statements, or
authorization for the filing of such termination statements, have been
delivered to the Collateral Agent for filing and (y) financing
statements filed in connection with Permitted Liens;
(x) no authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority or
regulatory body is required for either (i) the pledge or grant by any
Grantor of the Liens purported to be created in favor of the Collateral
Agent hereunder or (ii) the exercise by Collateral Agent of any rights
or remedies in respect of any Collateral (whether specifically granted
or created hereunder or created or provided for by applicable law),
except (A) for the filings contemplated by clause (vii) above and (B)
as may be required, in connection with the disposition of any
Investment Related Property, by laws generally affecting the offering
and sale of Securities;
(xi) all information supplied by any Grantor with
respect to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in all
material respects;
(xii) none of the Collateral constitutes, or is the
Proceeds of, "farm products" (as defined in the UCC);
(xiii) it does not own any "as extracted collateral"
(as defined in the UCC) or any timber to be cut;
(xiv) except as described on Schedule 4.1(D), such
Grantor has not become bound as a debtor, either by contract or by
operation of law, by a security agreement previously entered into by
another Person; and
(xv) such Grantor has been duly organized as an
entity of the type as set forth opposite such Grantor's name on
Schedule 4.1(A) solely under the laws of the jurisdiction as set forth
opposite such Grantor's name on Schedule 4.1(A) and remains duly
existing as such. Such Grantor has not filed any certificates of
domestication, transfer or continuance in any other jurisdiction.
(b) Covenants and Agreements. Each Grantor hereby covenants
and agrees that:
(i) except for the security interest created by this
Agreement, it shall not create or suffer to exist any Lien upon or with
respect to any of the Collateral, except the First Priority Liens and
Permitted Liens, and such Grantor shall defend the Collateral against
all Persons at any time claiming any interest therein;
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(ii) it shall not produce, use or permit any
Collateral to be used unlawfully or in violation of any provision of
this Agreement or any applicable statute, regulation or ordinance or
any policy of insurance covering the Collateral;
(iii) it shall not change such Grantor's name,
organizational or federal tax identification number, corporate
structure (e.g., by merger, consolidation, change in corporate form or
otherwise), type of organization or jurisdiction of organization unless
it shall have (a) notified the Collateral Agent in writing, by
executing and delivering to the Collateral Agent a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto, at least ten (10)
days prior to any such change, identifying such new proposed name,
organizational or federal tax identification number, corporate
structure, jurisdiction of organization or trade name and providing
such other information in connection therewith as the Collateral Agent
may reasonably request and (b) taken all actions necessary or advisable
to maintain the continuous validity, perfection and the same or better
priority of the Collateral Agent's security interest in the Collateral
intended to be granted and agreed to hereby;
(iv) upon such Grantor or any officer of such Grantor
obtaining knowledge thereof, it shall promptly notify the Collateral
Agent in writing of any event that may have a Material Adverse Effect
on the value of the Collateral, the ability of any Grantor or the
Collateral Agent to dispose of the Collateral, or the rights and
remedies of the Collateral Agent in relation thereto, including,
without limitation, the levy of any legal process against the
Collateral; and
(v) it shall not take or permit any action which
could have a Material Adverse Effect on the Collateral Agent's rights
in the Collateral.
4.2 EQUIPMENT AND INVENTORY.
(a) Representations and Warranties. Each Grantor represents
and warrants, on the Closing Date and on each Credit Date, that:
(i) all of the Equipment and Inventory included in
the Collateral is kept only at the locations specified in Schedule 4.2
(as such schedule may be amended or supplemented from time to time),
other than any location where the book value of any Equipment and
Inventory at such location does not exceed $250,000;
(ii) any Goods now or hereafter produced by any
Grantor included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as
amended; and
(iii) none of the Inventory or Equipment is in the
possession of an issuer of a negotiable document (as defined in Section
7-104 of the UCC) therefor.
(b) Covenants and Agreements. Each Grantor covenants and
agrees that:
(i) it shall keep the Equipment, Inventory and any
Documents evidencing any Equipment and Inventory in the locations
specified on Schedule 4.2 (as such schedule may be amended or
supplemented from time to time), or at any location where the book
value of any Equipment and Inventory does not exceed $250,000 unless
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it shall have (a) notified the Collateral Agent in writing, by
executing and delivering to the Collateral Agent a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto, at least ten (10)
days prior to any change in locations, identifying such new locations
and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (b) taken all actions
necessary or advisable to maintain the continuous validity, perfection
and the same or better priority of the Collateral Agent's security
interest in the Collateral intended to be granted and agreed to hereby,
or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder, with respect to such Equipment and Inventory;
(ii) it shall keep correct and accurate records of
the Inventory, as is customarily maintained under similar circumstances
by Persons of established reputation engaged in similar business, and
in any event in conformity with GAAP;
(iii) it shall not deliver any Document evidencing
any Equipment and Inventory to any Person other than the issuer of such
Document to claim the Goods evidenced therefor or the Collateral Agent;
and
(iv) if any Equipment or Inventory having a book
value in excess of $250,000 is in possession or control of any third
party, each Grantor shall join with the Collateral Agent in notifying
the third party of the Collateral Agent's security interest and using
commercially reasonable efforts to obtain an acknowledgment from the
third party that it is holding the Equipment and Inventory for the
benefit of the Collateral Agent.
4.3 RECEIVABLES.
(a) Representations and Warranties. Each Grantor represents
and warrants, on the Closing Date and on each Credit Date, that:
(i) except for Receivables in an amount not to exceed
$250,000 individually, each Receivable (a) is and will be the legal,
valid and binding obligation of the Account Debtor in respect thereof,
representing an unsatisfied obligation of such Account Debtor, (b) is
and will be enforceable in accordance with its terms, (c) is not and
will not be subject to any setoffs, defenses, taxes, counterclaims
(except with respect to refunds, returns and allowances in the ordinary
course of business) and (d) is and will be in compliance in all
material respects with all applicable laws, whether federal, state,
local or foreign;
(ii) none of the Account Debtors in respect of any
Receivable in excess of $250,000 is the government of the United
States, any agency or instrumentality thereof, any state or
municipality or any foreign sovereign. No Receivables in excess of
$250,000 requires the consent of the Account Debtors in respect thereof
in connection with the pledge hereunder, except any consents which have
been obtained; and
(iii) no Receivable in excess of $100,000 is
evidenced by, or constitutes, an Instrument or Chattel Paper which has
not been delivered to, or otherwise subjected to the control of, the
Collateral Agent to the extent required by, and in accordance with
Section 4.3(c) and the terms of the Intercreditor Agreement.
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(b) Covenants and Agreements: Each Grantor hereby covenants
and agrees that:
(i) it shall keep and maintain at its own cost and
expense satisfactory and complete records of the Receivables;
(ii) it shall, subject to the terms of the
Intercreditor Agreement, ▇▇▇▇ conspicuously, in form and manner
reasonably satisfactory to the Collateral Agent, all Chattel Paper,
Instruments and other evidence of Receivables in an amount exceeding
$100,000 (other than any delivered to the Collateral Agent as provided
herein), as well as the Receivables Records with an appropriate
reference to the fact that the Collateral Agent has a security interest
therein;
(iii) it shall perform in all material respects all
of its obligations with respect to the Receivables;
(iv) it shall not amend, modify, terminate or waive,
except in the ordinary course of business, any provision of any
Receivables in an amount exceeding $250,000 individually in any manner
which could reasonably be expected to have a Material Adverse Effect on
the value of such Receivables as Collateral. Other than in the ordinary
course of business as generally conducted by it on and prior to the
date hereof, and except as otherwise provided in subsection (v) below
and in the Intercreditor Agreement, following an Event of Default, such
Grantor shall not (w) grant any extensions or renewals of the times of
payment of such Receivables, (x) compromise or settle any dispute,
claim or legal proceeding with respect to any such Receivables for less
than the total unpaid balance thereof, (y) release, wholly or
partially, any Persons liable for the payment thereof, or (z) allow any
credits or discounts thereon;
(v) except as otherwise provided in this subsection,
each Grantor shall continue to collect all amounts due or to become due
to such Grantor under the Receivables and any Supporting Obligation and
use its commercially reasonable efforts to exercise the material rights
it may have under any Receivable any Supporting Obligation or
Collateral Support, in each case, at its own expense, and in connection
with such collections and exercise, such Grantor shall take such action
as such Grantor or the Collateral Agent may reasonably deem necessary
or advisable. Notwithstanding the foregoing, the Collateral Agent shall
have the right at any time, subject to the terms of the Intercreditor
Agreement, to require any Grantor to notify any Account Debtor of the
Collateral Agent's security interest in the Receivables and any
Supporting Obligation and, in addition, at any time following the
occurrence and during the continuation of an Event of Default, the
Collateral Agent may: (1) direct the Account Debtors under any
Receivables to make payment of all amounts due or to become due to such
Grantor thereunder directly to the Collateral Agent; (2) notify, or
require any Grantor to notify, each Person maintaining a lockbox or
similar arrangement to which Account Debtors under any Receivables have
been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to
or deposited in such lockbox or other arrangement directly to the
Collateral Agent; and (3) enforce, at the expense of such Grantor,
collection of any such Receivables and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. If the Collateral Agent
notifies any Grantor that it has elected to collect the Receivables in
accordance with the preceding sentence, any
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payments of Receivables received by such Grantor shall be forthwith
(and in any event within two (2) Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to
the Collateral Agent if required, in the Collateral Account maintained
under the sole dominion and control of the Collateral Agent, and until
so turned over, all amounts and proceeds (including checks and other
instruments) received by such Grantor in respect of the Receivables,
any Supporting Obligation or Collateral Support shall be received in
trust for the benefit of the Collateral Agent hereunder and shall be
segregated from other funds of such Grantor and such Grantor shall not
adjust, settle or compromise the amount or payment of any Receivable,
or release wholly or partly any Account Debtor or obligor thereof, or
allow any credit or discount thereon; and
(vi) it shall use its commercially reasonable efforts
to keep in full force and effect any Supporting Obligation or
Collateral Support relating to any Receivable.
(c) Delivery and Control of Receivables. Subject to the terms
of the Intercreditor Agreement, with respect to any Receivables for amounts
exceeding $100,000 that is evidenced by, or constitutes, Chattel Paper or
Instruments, each Grantor shall cause each originally executed copy thereof to
be delivered to the Collateral Agent (or its agent or designee) appropriately
indorsed to the Collateral Agent or indorsed in blank: (i) with respect to any
such Receivables in existence on the date hereof, on or prior to the date hereof
and (ii) with respect to any such Receivables hereafter arising, within ten (10)
days of such Grantor acquiring rights therein. With respect to any Receivables
for amounts exceeding $100,000 which would constitute "electronic chattel paper"
under Article 9 of the UCC, each Grantor shall at the request of the Collateral
Agent take all steps necessary to give the Collateral Agent control over such
Receivables (within the meaning of Section 9-105 of the UCC): (i) with respect
to any such Receivables in existence on the date hereof, on or prior to the date
hereof and (ii) with respect to any such Receivables hereafter arising, within
ten (10) days of such Grantor acquiring rights therein. Any Receivable not
otherwise required to be delivered or subjected to the control of the Collateral
Agent in accordance with this subsection (c) shall, upon the occurrence and
during the continuation of an Event of Default, be delivered or subjected to
such control upon written request of the Collateral Agent.
4.4 INVESTMENT RELATED PROPERTY.
4.4.1 INVESTMENT RELATED PROPERTY GENERALLY
(a) Covenants and Agreements. Each Grantor hereby covenants
and agrees that:
(i) in the event it acquires rights in any Investment
Related Property after the date hereof, it shall deliver to the
Collateral Agent a completed Pledge Supplement, substantially in the
form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, reflecting such new Investment Related Property and
all other Investment Related Property. Notwithstanding the foregoing,
it is understood and agreed that the security interest of the
Collateral Agent shall attach to all Investment Related Property
immediately upon any Grantor's acquisition of rights therein and shall
not be affected by the failure of any Grantor to deliver a supplement
to Schedule 4.4 as required hereby;
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(ii) except as provided in the next sentence, in the
event such Grantor receives any dividends, interest or distributions on
any Investment Related Property, or any securities or other property
upon the merger, consolidation, liquidation or dissolution of any
issuer of any Investment Related Property, then (a) such dividends,
interest or distributions and securities or other property shall be
included in the definition of Collateral without further action and (b)
such Grantor shall immediately take all steps, if any, necessary or
advisable to ensure the validity, perfection, priority and, if
applicable, control of the Collateral Agent over such Investment
Related Property (including, without limitation, delivery thereof to
the Collateral Agent) and pending any such action such Grantor shall be
deemed to hold, subject to the terms of the Intercreditor Agreement,
such dividends, interest, distributions, securities or other property
in trust for the benefit of the Collateral Agent and shall segregate
such dividends, distributions, Securities or other property from all
other property of such Grantor. Notwithstanding the foregoing, so long
as no Event of Default shall have occurred and be continuing, the
Collateral Agent authorizes each Grantor to retain all ordinary cash
dividends and distributions paid in the normal course of the business
of the issuer and consistent with the past practice of the issuer and
all scheduled payments of interest;
(iii) each Grantor consents to the grant by each
other Grantor of a Security Interest in all Investment Related Property
to the Collateral Agent.
(b) Delivery and Control.
Each Grantor agrees that with respect to any Investment
Related Property in which it currently has rights it shall comply with
the provisions of this Section 4.4.1(b) on or before the Credit Date
and with respect to any Investment Related Property hereafter acquired
by such Grantor it shall comply with the provisions of this Section
4.4.1(b) promptly upon acquiring rights therein, in each case in form
and substance reasonably satisfactory to the Collateral Agent. Subject
to the terms of the Intercreditor Agreement, with respect to any
Investment Related Property having a value in excess of $100,000 that
is represented by a certificate or that is an "instrument" (other than
any Investment Related Property credited to a Securities Account) it
shall cause such certificate or instrument to be delivered to the
Collateral Agent, indorsed in blank by an "effective indorsement" (as
defined in Section 8-107 of the UCC), regardless of whether such
certificate constitutes a "certificated security" for purposes of the
UCC. With respect to any Investment Related Property having a value in
excess of $100,000 that is an "uncertificated security" for purposes of
the UCC (other than any "uncertificated securities" credited to a
Securities Account), it shall use its commercially reasonable efforts
to cause the issuer of such uncertificated security to either (i)
register the Collateral Agent as the registered owner thereof on the
books and records of the issuer or (ii) execute an agreement
substantially in the form of Exhibit B hereto, pursuant to which such
issuer agrees to comply with the Collateral Agent's instructions with
respect to such uncertificated security without further consent by such
Grantor.
(c) Voting and Distributions.
(i) So long as no Event of Default shall have
occurred and be continuing:
(1) except as otherwise provided under the covenants and
agreements relating to Investment Related Property in this
Agreement or elsewhere herein or in the
17
Term Loan Credit Agreement, each Grantor shall be entitled to
exercise or refrain from exercising any and all voting and
other consensual rights pertaining to the Investment Related
Property or any part thereof for any purpose not inconsistent
with the terms of this Agreement or the Term Loan Credit
Agreement; provided, no Grantor shall exercise or refrain from
exercising any such right if the Collateral Agent shall have
notified such Grantor that, in the Collateral Agent's
reasonable judgment, such action would have a Material Adverse
Effect on the value of the Investment Related Property ; and
provided further, such Grantor shall give the Collateral Agent
at least five (5) Business Days prior written notice of the
manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right; it being
understood, however, that neither the voting by such Grantor
of any Pledged Stock for, or such Grantor's consent to, the
election of directors (or similar governing body) at a
regularly scheduled annual or other meeting of stockholders or
with respect to incidental matters at any such meeting, nor
such Grantor's consent to or approval of any action otherwise
permitted under this Agreement and the Term Loan Credit
Agreement, shall be deemed inconsistent with the terms of this
Agreement or the Term Loan Credit Agreement within the meaning
of this Section 4.4(c)(i)(1), and no notice of any such voting
or consent need be given to the Collateral Agent; and
(2) the Collateral Agent shall promptly execute and deliver (or
cause to be executed and delivered) to each Grantor all
proxies, and other instruments as such Grantor may from time
to time reasonably request for the purpose of enabling such
Grantor to exercise the voting and other consensual rights
when and to the extent which it is entitled to exercise
pursuant to clause (1) above;
(ii) Subject to the terms of the Intercreditor
Agreement, upon the occurrence and during the continuation of an Event
of Default:
(1) upon (i) receipt of written notice so proscribing from the
Collateral Agent exercising its rights under this Section by a
Grantor or (ii) notice so proscribing from any Grantor to
Collateral Agent or a Secured Party, all rights of each
Grantor to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled
to exercise pursuant hereto shall cease and all such rights
shall thereupon become vested in the Collateral Agent who
shall thereupon have the sole right to exercise such voting
and other consensual rights; and
(2) in order to permit the Collateral Agent to exercise the voting
and other consensual rights which it may be entitled to
exercise pursuant hereto and to receive all dividends and
other distributions which it may be entitled to receive
hereunder: (1) each Grantor shall promptly execute and deliver
(or cause to be executed and delivered) to the Collateral
Agent all proxies, dividend payment orders and other
instruments as the Collateral Agent may from time to time
reasonably request and (2) the each Grantor acknowledges that
the Collateral Agent may utilize the power of attorney set
forth in Section 6.1.
4.4.2 PLEDGED EQUITY INTERESTS
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(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and on each Credit Date, that:
(i) Schedule 4.4(A) (as such schedule may be amended
or supplemented from time to time) sets forth under the headings
"Pledged Stock, "Pledged LLC Interests," "Pledged Partnership
Interests" and "Pledged Trust Interests," respectively, all of the
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and
Pledged Trust Interests owned by any Grantor and such Pledged Equity
Interests constitute the percentage of issued and outstanding shares of
stock, percentage of membership interests, percentage of partnership
interests or percentage of beneficial interest of the respective
issuers thereof indicated on such Schedule;
(ii) except as set forth on Schedule 4.4(B), or
except in connection with a Permitted Acquisition or a transaction
otherwise permitted pursuant to the Credit Agreement, it has not
acquired any equity interests of another entity or substantially all
the assets of another entity within the past five (5) years;
(iii) it is the record and beneficial owner of the
Pledged Equity Interests free of all Liens, rights or claims of other
Persons other than the First Priority Liens and Permitted Liens and
except as set forth on Schedule 4.4(B) (as such schedule may be amended
or supplemented from time to time), there are no outstanding warrants,
options or other rights to purchase, or shareholder, voting trust or
similar agreements outstanding with respect to, or property that is
convertible into, or that requires the issuance or sale of, any Pledged
Equity Interests;
(iv) without limiting the generality of Section
4.1(a)(v), and except as excluded pursuant to Section 2.2., or except
for consents previously obtained, no consent of any Person including
any other general or limited partner, any other member of a limited
liability company, any other shareholder or any other trust beneficiary
is necessary or desirable in connection with the creation, perfection
or first or second priority status, as applicable (in accordance with
the terms of the Intercreditor Agreement), of the security interest of
the Collateral Agent in any Pledged Equity Interests or the exercise by
the Collateral Agent of the voting or other rights provided for in this
Agreement or the exercise of remedies in respect thereof;
(v) except as otherwise set forth on Schedule 4.4(C)
(as such schedule may be amended or supplemented from time to time),
none of the Pledged LLC Interests nor Pledged Partnership Interests, if
any, are or represent interests in issuers that: (a) are registered as
investment companies or (b) are dealt in or traded on securities
exchanges or markets; and
(vi) except as otherwise set forth on Schedule
4.4(D), all of the Pledged LLC Interests and Pledged Partnership
Interests, if any, are or represent interests in issuers that have
opted to be treated as securities under the uniform commercial code of
the applicable jurisdiction.
(b) Covenants and Agreements. Each Grantor hereby covenants
and agrees that:
(i) without the prior written consent of the
Collateral Agent, or except as otherwise permitted pursuant to the
Credit Agreement, it shall not vote to
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enable or take any other action to: (a) amend or terminate any
partnership agreement, limited liability company agreement, certificate
of incorporation, by-laws or other organizational documents in any way
that materially and adversely changes the rights of such Grantor with
respect to any Investment Related Property or materially and adversely
affects the validity, perfection or priority of the Collateral Agent's
security interest, (b) permit any issuer of any Pledged Equity Interest
to issue any additional stock, partnership interests, limited liability
company interests or other equity interests of any nature or to issue
securities convertible into or granting the right of purchase or
exchange for any stock or other equity interest of any nature of such
issuer, (c) other than as permitted under the Term Loan Credit
Agreement, permit any issuer of any Pledged Equity Interest to dispose
of all or a material portion of their assets, (d) waive any default
under or breach of any terms of organizational document relating to the
issuer of any Pledged Equity Interest or the terms of any Pledged Debt
that could reasonably be expected to have a Material Adverse Effect on
the value of such Collateral, or (e) cause any issuer of any Pledged
Partnership Interests or Pledged LLC Interests which are not Securities
(for purposes of the UCC) on the Closing Date to elect or otherwise
take any action to cause such Pledged Partnership Interests or Pledged
LLC Interests to be treated as securities for purposes of the UCC;
provided, however, notwithstanding the foregoing, if any issuer of any
Pledged Partnership Interests or Pledged LLC Interests takes any such
action in violation of the foregoing in this clause (e), such Grantor
shall promptly notify the Collateral Agent in writing of any such
election or action and, in such event, shall take all steps necessary
or advisable to establish the Collateral Agent's "control" thereof;
(ii) it shall comply with all of its material
obligations under any partnership agreement or limited liability
company agreement relating to Pledged Partnership Interests or Pledged
LLC Interests and shall enforce all of its material rights with respect
to any Investment Related Property;
(iii) subject to the terms of the Intercreditor
Agreement, without the prior written consent of the Collateral Agent,
or except as otherwise permitted pursuant to the Credit Agreement, it
shall not permit any issuer of any Pledged Equity Interest to merge or
consolidate unless (i) such issuer creates a security interest that is
perfected by a filed financing statement (that is not effective solely
under section 9-508 of the UCC) in collateral in which such new debtor
has or acquires rights, and (ii) all the outstanding Capital Stock of
the surviving or resulting corporation, limited liability company,
partnership or other entity is, upon such merger or consolidation,
pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding Capital Stock of any other
constituent Grantor; provided that if the surviving or resulting
Grantors upon any such merger or consolidation involving an issuer
which is a Controlled Foreign Corporation, then such Grantor shall only
be required to pledge Capital Stock in accordance with Section 2.2; and
(iv) each Grantor consents to the grant by each other
Grantor of a security interest in all Investment Related Property to
the Collateral Agent and, without limiting the foregoing, consents to
the transfer, subject to the terms of the Intercreditor Agreement, of
any Pledged Partnership Interest and any Pledged LLC Interest to the
Collateral Agent or its nominee following an Event of Default and to
the substitution of the Collateral Agent or its nominee as a partner in
any partnership or as a member in any limited liability company with
all the rights and powers related thereto.
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4.4.3 PLEDGED DEBT
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and each Credit Date, that:
(i) Schedule 4.4 (as such schedule may be amended or
supplemented from time to time) sets forth under the heading "Pledged
Debt" all of the Pledged Debt owned by any Grantor for an amount
greater than $100,000 individually and $500,000 in the aggregate, and
all of such Pledged Debt has been duly authorized, authenticated or
issued, and delivered and is the legal, valid and binding obligation of
the issuers thereof, and no default under any Pledged Debt has caused,
either in any individual case or in the aggregate, a Material Adverse
Effect, and with respect to all of the issued and outstanding
inter-company Indebtedness evidenced by promissory notes, to the extent
required under the Credit Agreement, such notes are listed on Schedule
4.4 (as such schedule may be amended or supplemented from time to
time);
(b) Covenants and Agreements. Each Grantor hereby covenants
and agrees that:
(i) it shall notify the Collateral Agent of any
default under any Pledged Debt that has caused, either in any
individual case or in the aggregate, a Material Adverse Effect.
4.4.4 INVESTMENT ACCOUNTS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and each Credit Date, that:
(i) Schedule 4.4 hereto (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Securities Accounts" and "Commodities Accounts,"
respectively, all of the Securities Accounts and Commodities Accounts
in which each Grantor has an interest. Each Grantor is the sole
entitlement holder of each such Securities Account and Commodity
Account, and, except with respect to the First Priority Liens, such
Grantor has not consented to, and is not otherwise aware of, any Person
(other than the Collateral Agent pursuant thereto) having "control"
(within the meanings of Sections 8-106 and 9-106 of the UCC) over, or
any other interest in, any such Securities Account or Commodity Account
or securities or other property credited thereto;
(ii) Schedule 4.4 hereto (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Deposit Accounts" all of the Deposit Accounts representing
concentration or money market accounts listed on Schedule 4.4(A) hereto
(each such account, a "CONCENTRATION DEPOSIT ACCOUNT") in which each
Grantor has an interest. Each Grantor is the sole account holder of
each such Deposit Account and, except with respect to the First
Priority Liens, such Grantor has not consented to, and is not otherwise
aware of, any Person (other than the Collateral Agent pursuant thereto)
having either sole dominion and control (within the meaning of common
law) or "control" (within the meanings of Section 9-104 of the UCC)
over, or any other interest in, any such Deposit Account or any money
or other property deposited therein; and
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(iii) Each Grantor has taken all actions necessary or
reasonably requested in writing by the Collateral Agent, including
those specified in Section 4.4.4(c), to: (a) establish Collateral
Agent's "control" (within the meanings of Sections 8-106 and 9-106 of
the UCC) over any portion of the Investment Related Property
constituting Certificated Securities, Uncertificated Securities,
Securities Accounts, Securities Entitlements or Commodities Accounts
(each as defined in the UCC); (b) establish the Collateral Agent's
"control" (within the meaning of Section 9-104 of the UCC) over all
Concentration Deposit Accounts; and (c) subject to the terms of the
Intercreditor Agreement, deliver all Instruments in excess of $100,000
to the Collateral Agent.
(b) Covenant and Agreement.
(i) Subject to the terms of the Intercreditor
Agreement, each Grantor hereby covenants and agrees with the Collateral
Agent and each other Secured Party that it shall not close or terminate
any Investment Account without the prior consent of the Collateral
Agent and unless a successor or replacement account has been
established with the consent of the Collateral Agent with respect to
which successor or replacement account a control agreement has been
entered into by the appropriate Grantor, Collateral Agent and
securities intermediary or depository institution at which such
successor or replacement account is to be maintained in accordance with
the provisions of Section 4.4.4(c); and
(ii) Each Grantor shall transfer any and all funds
held in or credited to any Operative Deposit Account to a Deposit
Account under the "control" of the Collateral Agent (within the meaning
of 9-104 of the UCC) in accordance with the provisions of Section
4.4.4(c), such transfers to be made on a regular basis but in no event
less often than on a weekly basis.
(c) Delivery and Control
(i) With respect to any Investment Related Property
consisting of Securities Accounts or Securities Entitlements, it shall
cause the securities intermediary maintaining such Securities Account
or Securities Entitlement to enter into an agreement substantially in
the form of Exhibit C hereto pursuant to which it shall agree to comply
with the Collateral Agent's "entitlement orders" without further
consent by such Grantor; provided, however, that the Collateral Agent
hereby agrees that no such "entitlement orders" shall be given or
issued except upon the occurrence and during the continuation of any
Event of Default. With respect to any Investment Related Property that
is a Concentration Deposit Account, it shall cause the depositary
institution maintaining such account to enter into an agreement
substantially in the form of Exhibit D hereto, pursuant to which the
Collateral Agent shall have both sole dominion and control, subject to
the terms of the Intercreditor Agreement, over such Deposit Account
(within the meaning of the common law) and "control" (within the
meaning of Section 9-104 of the UCC) over such Deposit Account. Each
Grantor shall have entered into such control agreement or agreements
with respect to: (i) any Securities Accounts, Securities Entitlements
or Concentration Deposit Accounts that exist on the Credit Date, as of
or prior to the Credit Date and (ii) any Securities Accounts,
Securities Entitlements or Concentration Deposit Accounts that are
created or acquired after the Credit Date, as of or prior to the
deposit or transfer of any such Securities Entitlements or funds,
whether constituting moneys or investments, into such Securities
Accounts or Deposit Accounts.
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(ii) In addition to the foregoing, if any issuer of
any Investment Related Property is located in a jurisdiction outside of
the United States, each Grantor shall take such additional actions,
including, without limitation, causing the issuer to register the
pledge on its books and records or making such filings or recordings,
in each case as may be necessary or advisable, under the laws of such
issuer's jurisdiction to insure the validity, perfection and priority
of the security interest of the Collateral Agent. Upon the occurrence
and during the continuation of an Event of Default, subject to the
terms of the Intercreditor Agreement, the Collateral Agent shall have
the right, without notice to any Grantor, to (i) transfer all or any
portion of the Investment Related Property to its name or the name of
its nominee or agent and (ii) to exchange any certificates or
instruments representing any Investment Related Property for
certificates or instruments of smaller or larger denominations.
4.5 [RESERVED.].
4.6 LETTER OF CREDIT RIGHTS.
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and on each Credit Date, that:
(i) all material letters of credit to which such
Grantor has rights are listed on Schedule 4.6 (as such schedule may be
amended or supplemented from time to time) hereto; and
(ii) it has obtained, or used its commercially
reasonable efforts to obtain the consent of each issuer of any material
letter of credit to the assignment of the proceeds of the letter of
credit to the Collateral Agent.
(b) Covenants and Agreements. Each Grantor hereby covenants
and agrees that with respect to any material letter of credit hereafter arising
it shall obtain, or use its commercially reasonable efforts to obtain, the
consent of the issuer thereof to the assignment of the proceeds of the letter of
credit to the Collateral Agent and shall deliver to the Collateral Agent a
completed Pledge Supplement, substantially in the form of Exhibit A attached
hereto, together with all Supplements to Schedules thereto.
4.7 INTELLECTUAL PROPERTY.
(a) Representations and Warranties. Except as disclosed in
Schedule 4.7(H) (as such schedule may be amended or supplemented from time to
time), each Grantor hereby represents and warrants, on the Closing Date and on
each Credit Date, that:
(i) Schedule 4.7 (as such schedule may be amended or
supplemented from time to time) sets forth a true and complete list of
(i) all United States, state and foreign registrations of and
applications for Patents, Trademarks, and Copyrights owned by each
Grantor and (ii) all Patent Licenses, Trademark Licenses, Trade Secret
Licenses and Copyright Licenses, in each case that is material to the
business of such Grantor;
(ii) it is the sole and exclusive owner of the entire
right, title, and interest in and to all Intellectual Property listed
on Schedule 4.7 (as such schedule may be
23
amended or supplemented from time to time), and owns or has the valid
right to use all other Intellectual Property necessary to conduct its
business, free and clear of all Liens, claims, encumbrances and
licenses, except for the First Priority Liens and Permitted Liens and
the licenses set forth on Schedule 4.7(B), (D), (F) and (G) (as each
may be amended or supplemented from time to time);
(iii) all such Intellectual Property is subsisting
and has not been adjudged invalid or unenforceable, in whole or in
part, and each Grantor has performed all acts and has paid all renewal,
maintenance, and other fees and taxes required to maintain such
Intellectual Property in full force and effect;
(iv) all such Intellectual Property is valid and
enforceable; no holding, decision, or judgment has been rendered in any
action or proceeding before any court or administrative authority
challenging the validity of, such Grantor's right to register, or such
Grantor's rights to own or use, any Intellectual Property and no such
action or proceeding is pending or, to the best of such Grantor's
knowledge, threatened, in any case that could reasonably be expected to
have a Material Adverse Effect;
(v) all registrations and applications for such
Intellectual Property are standing in the name of each Grantor, and
none of the Trademarks, Patents, Copyrights or Trade Secrets has been
licensed by any Grantor to any Affiliate or third party, except as
disclosed in Schedule 4.7(B), (D), (F), or (G) (as each may be amended
or supplemented from time to time);
(vi) the conduct of such Grantor's business does not
infringe upon or otherwise violate any trademark, patent, copyright,
trade secret or other intellectual property right owned or controlled
by a third party, in any case that could reasonably be expected to have
a Material Adverse Effect, and no claim has been made that the use of
any Intellectual Property owned or used by Grantor (or any of its
respective licensees) violates the asserted rights of any third party;
(vii) to the best of each Grantor's knowledge, no
third party is infringing upon or otherwise violating any rights in any
such Intellectual Property owned or used by such Grantor, or any of its
respective licensees, in any case that could reasonably be expected to
have a Material Adverse Effect; and
(viii) no settlement or consents, covenants not to
▇▇▇, nonassertion assurances, or releases have been entered into by
Grantor or to which Grantor is bound that adversely affect Grantor's
rights to own or use any Intellectual Property, in any case that could
reasonably be expected to have a Material Adverse Effect.
(b) Covenants and Agreements. Each Grantor hereby covenants
and agrees as follows:
(i) it shall not do any act or omit to do any act
whereby any of the Intellectual Property which is material to the
business of Grantor may lapse, or become abandoned, dedicated to the
public, or unenforceable, or which would adversely affect the validity,
grant, or enforceability of the security interest granted therein;
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(ii) it shall, within thirty (30) days of the
creation or acquisition of any Copyrightable work which is material to
the business of Grantor, apply to register the Copyright in the United
States Copyright Office;
(iii) it shall promptly notify the Collateral Agent
if it knows or has reason to know that any item of the Intellectual
Property that is material to the business of any Grantor may become (a)
abandoned or dedicated to the public or placed in the public domain,
(b) invalid or unenforceable, or (c) subject to any adverse
determination or development (including the institution of proceedings)
in any action or proceeding in the United States Patent and Trademark
Office, the United States Copyright Office, any state registry, any
foreign counterpart of the foregoing, or any court;
(iv) it shall take all reasonable steps in the United
States Patent and Trademark Office, the United States Copyright Office,
any state registry or any foreign counterpart of the foregoing, to
pursue any application and maintain any registration of each Trademark,
Patent, and Copyright owned by any Grantor and material to its business
which is now or shall become included in the Intellectual Property;
(v) in the event that any Intellectual Property owned
by or exclusively licensed to any Grantor that is material to the
business of any Grantor is infringed, misappropriated, or diluted by a
third party, such Grantor shall promptly take all reasonable actions to
stop such infringement, misappropriation, or dilution and protect its
rights in such Intellectual Property including, but not limited to, the
initiation of a suit for injunctive relief and to recover damages;
(vi) it shall promptly (but in no event more than
thirty (30) days after any Grantor obtains knowledge thereof) report to
the Collateral Agent (i) the filing of any application to register any
Intellectual Property with the United States Patent and Trademark
Office, the United States Copyright Office, or any state registry or
foreign counterpart of the foregoing (whether such application is filed
by such Grantor or through any agent, employee, licensee, or designee
thereof) and (ii) the registration of any Intellectual Property by any
such office, in each case by executing and delivering to the Collateral
Agent a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules
thereto;
(vii) it shall, promptly upon the reasonable request
of the Collateral Agent, execute and deliver to the Collateral Agent
any document required to acknowledge, confirm, register, record, or
perfect the Collateral Agent's interest in any part of such
Intellectual Property, whether now owned or hereafter acquired;
(viii) except with the prior consent of the
Collateral Agent, subject to the terms of the Intercreditor Agreement,
or as permitted under the Term Loan Credit Agreement, each Grantor
shall not execute, and there will not be on file in any public office,
any financing statement or other document or instruments, except
financing statements or other documents or instruments filed or to be
filed in favor of the Collateral Agent or the First Lien Collateral
Agent and each Grantor shall not sell, assign, transfer, license, grant
any option, or create or suffer to exist any Lien upon or with respect
to the Intellectual Property, except for the Lien created by and under
this Agreement and the other Credit Documents and the First Priority
Liens;
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(ix) it shall take all steps reasonably necessary to
protect the secrecy of all Trade Secrets material to the business of
any Grantor, including, without limitation, entering into
confidentiality agreements with employees and labeling and restricting
access to secret information and documents; and
(x) it shall continue to collect, at its own expense,
and in accordance with reasonable business practices, all material
amounts due or to become due to such Grantor in respect of the
Intellectual Property or any portion thereof. In connection with such
collections, each Grantor may take (and, at the Collateral Agent's
reasonable direction, shall take) such action as such Grantor or the
Collateral Agent may deem reasonably necessary or advisable to enforce
collection of such amounts. Notwithstanding the foregoing, the
Collateral Agent shall have the right at any time, upon the occurrence
and during the continuance of any Event of Default, to notify, or
require any Grantor to notify, any obligors with respect to any such
amounts of the existence of the security interest created hereby.
4.8 COMMERCIAL TORT CLAIMS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and on each Credit Date that, to
the knowledge of such Grantor's Authorized Officers, Schedule 4.8 (as such
schedule may be amended or supplemented from time to time) sets forth all
Commercial Tort Claims of each Grantor individually in excess of $500,000; and
(b) Covenants and Agreements. Each Grantor hereby covenants
and agrees that with respect to any Commercial Tort Claim individually in excess
of $500,000 hereafter arising, to the knowledge of such Grantor's Authorized
Officers, it shall deliver to the Collateral Agent a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto, together
with all Supplements to Schedules thereto, identifying such new Commercial Tort
Claims.
SECTION 5. FURTHER ASSURANCES; ADDITIONAL GRANTORS.
5.1 FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at the expense
of such Grantor, that it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Collateral Agent may reasonably request, in order to
create and/or maintain the validity, perfection or priority of and protect any
security interest granted hereby or to enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor shall:
(i) file such financing or continuation statements,
or amendments thereto, and execute and deliver or otherwise authorize
the filing of such other agreements, instruments, endorsements, powers
of attorney or notices, as may be necessary or desirable, or as the
Collateral Agent may reasonably request, in order to perfect and
preserve the security interests granted or purported to be granted
hereby;
(ii) take all actions necessary to ensure the
recordation of appropriate evidence of the liens and security interest
granted hereunder in the
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Intellectual Property with any intellectual property registry in which
said Intellectual Property is registered or in which an application for
registration is pending including, without limitation, the United
States Patent and Trademark Office, the United States Copyright Office,
the various Secretaries of State, and the foreign counterparts on any
of the foregoing; and
(iii) at the Collateral Agent's request, appear in
and defend any action or proceeding that may affect such Grantor's
title to or the Collateral Agent's security interest in all or any part
of the Collateral.
(b) Each Grantor hereby authorizes the Collateral Agent to
file a Record or Records, including, without limitation, financing or
continuation statements, and amendments thereto, in any jurisdictions and with
any filing offices as the Collateral Agent may determine, in its sole
discretion, are necessary or advisable to perfect the security interest granted
to the Collateral Agent herein. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner as
the Collateral Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the Collateral Agent herein, including, without
limitation, describing such property as "all assets" or "all personal property,
whether now owned or hereafter acquired"; provided, however, the Collateral
Agent agrees to file or authorize the filing of appropriate amendments or
releases of assets or property not included in the Collateral or that are to be
released from the Collateral pursuant to the terms of the Credit Agreement or
this Agreement. Each Grantor shall furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.
(c) Each Grantor hereby authorizes the Collateral Agent to
modify Schedule 4.7 (as such schedule may be amended or supplemented from time
to time) after obtaining such Grantor's approval of or signature to such
modification to include reference to any right, title or interest in any
existing Intellectual Property or any Intellectual Property acquired or
developed by any Grantor after the execution hereof or to delete any reference
to any right, title or interest in any Intellectual Property in which any
Grantor no longer has or claims any right, title or interest.
5.2 ADDITIONAL GRANTORS. From time to time subsequent to the date
hereof, additional Persons may become parties hereto as additional Grantors
(each, an "Additional Grantor"), by executing a Counterpart Agreement. Upon
delivery of any such counterpart agreement to the Collateral Agent, notice of
which is hereby waived by Grantors, each Additional Grantor shall be a Grantor
and shall be as fully a party hereto as if Additional Grantor were an original
signatory hereto. Each Grantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the addition or release of any
other Grantor hereunder, nor by any election of Collateral Agent not to cause
any Subsidiary of Company to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.
SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
6.1 POWER OF ATTORNEY. Each Grantor hereby irrevocably appoints the
Collateral Agent (such appointment being coupled with an interest) as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, the
27
Collateral Agent or otherwise, from time to time in the Collateral Agent's
discretion to take any action and to execute any instrument that the Collateral
Agent may deem reasonably necessary or advisable to accomplish the purposes of
this Agreement and the Intercreditor Agreement, including, without limitation,
the following:
(a) upon the occurrence and during the continuance of any
Event of Default, to obtain and adjust insurance required to be maintained by
such Grantor or paid to the Collateral Agent pursuant to the Term Loan Credit
Agreement;
(b) upon the occurrence and during the continuance of any
Event of Default, to ask for, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of any
Event of Default, to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral;
(e) to prepare and file any UCC financing statements against
such Grantor as debtor;
(f) to prepare, sign, and file for recordation in any
intellectual property registry, appropriate evidence of the lien and security
interest granted herein in the Intellectual Property in the name of such Grantor
as debtor;
(g) to take or cause to be taken all actions necessary to
perform or comply or cause performance or compliance with the terms of this
Agreement, including, without limitation, access to pay or discharge taxes
(except as otherwise provided in the Credit Agreement or this Agreement) or
Liens (other than the First Priority Liens and Permitted Liens) levied or placed
upon or threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by the Collateral
Agent in its sole discretion, any such payments made by the Collateral Agent to
become obligations of such Grantor to the Collateral Agent, due and payable
immediately without demand; and
(h) upon the occurrence and during the continuance of any
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Collateral Agent were the absolute owner thereof for all purposes,
and to do, at the Collateral Agent's option and such Grantor's expense, at any
time or from time to time, all acts and things that the Collateral Agent deems
reasonably necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's security interest therein in order to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
6.2 NO DUTY ON THE PART OF COLLATERAL AGENT OR SECURED PARTIES. The
powers conferred on the Collateral Agent hereunder are solely to protect the
interests of the Secured Parties in the Collateral and shall not impose any duty
upon the Collateral Agent or any Secured Party to exercise any such powers. The
Collateral Agent and the Secured Parties shall be
28
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
SECTION 7. REMEDIES.
7.1 GENERALLY.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent may, subject to the terms of and in the manner
contemplated by the Intercreditor Agreement, exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it at law or in equity, all the rights and remedies of
the Collateral Agent on default under the UCC (whether or not the UCC applies to
the affected Collateral) to collect, enforce or satisfy any Secured Obligations
then owing, whether by acceleration or otherwise, and also may pursue any of the
following separately, successively or simultaneously:
(i) require any Grantor to, and each Grantor hereby
agrees that it shall at its expense and promptly upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent
that is reasonably convenient to both parties;
(ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process;
(iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent the
Collateral Agent deems appropriate; and
(iv) without notice except as specified below or
under the UCC, sell, assign, lease, license (on an exclusive or
nonexclusive basis) or otherwise dispose of the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and
upon such other terms as the Collateral Agent may deem commercially
reasonable.
(b) The Collateral Agent or any Secured Party may be the
purchaser of any or all of the Collateral at any public or private (to the
extent to the portion of the Collateral being privately sold is of a kind that
is customarily sold on a recognized market or the subject of widely distributed
standard price quotations) sale in accordance with the UCC and the Collateral
Agent, as collateral agent for and representative of the Secured Parties, shall
be entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such sale
made in accordance with the UCC, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any Collateral payable by the
Collateral Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now
29
existing or hereafter enacted. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) days notice to such Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Collateral Agent
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Each Grantor agrees that it may not be commercially
unreasonable for the Collateral Agent to dispose of the Collateral or any
portion thereof by using Internet sites that provide for the auction of assets
of the types included in the Collateral or that have the reasonable capability
of doing so, or that match buyers and sellers of assets. Each Grantor hereby
waives any claims against the Collateral Agent arising by reason of the fact
that the price at which any Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if
the Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree, in any case so long as such action would be
commercially reasonable under the circumstances. If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be liable for the deficiency and the fees of any
attorneys employed by the Collateral Agent to collect such deficiency. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section will cause irreparable injury to the Collateral Agent, that the
Collateral Agent has no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no default has occurred giving rise
to the Secured Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section shall in any way alter the rights of the
Collateral Agent hereunder.
(c) The Collateral Agent may sell the Collateral without
giving any warranties as to the Collateral. The Collateral Agent may
specifically disclaim or modify any warranties of title or the like. This
procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.
(d) The Collateral Agent shall have no obligation to marshal
any of the Collateral.
7.2 APPLICATION OF PROCEEDS. Except as expressly provided elsewhere in
this Agreement and subject to the terms of the Intercreditor Agreement, all
proceeds received by the Collateral Agent in respect of any sale, any collection
from, or other realization upon all or any part of the Collateral shall be
applied in full or in part by the Collateral Agent against, the Secured
Obligations in the following order of priority: first, to the payment of all
actual and reasonable out-of-pocket costs and expenses of such sale, collection
or other realization, including reasonable and actual compensation to the
Collateral Agent and its agents and counsel, and all other actual and reasonable
out-of-pocket expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith, and all amounts for which the
Collateral Agent is entitled to indemnification hereunder (in its capacity as
the Collateral Agent and not as a Lender) and all advances made by the
Collateral Agent hereunder for the account of the applicable Grantor, and to the
payment of all costs and expenses paid or incurred by the Collateral Agent in
connection with the exercise of any right or remedy hereunder or under the
Credit Agreement, all in accordance with the terms hereof or thereof; second, to
the extent of any excess of such proceeds, to the payment of all other Secured
Obligations for the ratable benefit of
30
the Lenders and the Lender Counterparties; and third, to the extent of any
excess of such proceeds, to the payment to or upon the order of such Grantor or
to whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
7.3 SALES ON CREDIT. If Collateral Agent sells any of the Collateral
upon credit, Grantor will be credited only with payments actually made by
purchaser and received by Collateral Agent and applied to indebtedness of the
purchaser. In the event the purchaser fails to pay for the Collateral,
Collateral Agent may resell the Collateral and Grantor shall be credited with
proceeds of the sale.
7.4 DEPOSIT ACCOUNTS.
If any Event of Default shall have occurred and be continuing, subject
to the terms of the Intercreditor Agreement, the Collateral Agent may apply the
balance from any Deposit Account or instruct the bank at which any Deposit
Account is maintained to pay the balance of any Deposit Account to or for the
benefit of the Collateral Agent.
7.5 INVESTMENT RELATED PROPERTY.
Each Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Investment Related Property conducted without prior registration or
qualification of such Investment Related Property under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sale may be at prices
and on terms less favorable than those obtainable through a public sale without
such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances,
each Grantor agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner and that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Investment Related Property for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. Subject to the terms of the
Intercreditor Agreement, if the Collateral Agent determines to exercise its
right to sell any or all of the Investment Related Property, upon written
request, each Grantor shall and shall cause each issuer of any Pledged Stock to
be sold hereunder, each partnership and each limited liability company from time
to time to furnish to the Collateral Agent all such information as the
Collateral Agent may reasonably request in order to determine the number and
nature of interest, shares or other instruments included in the Investment
Related Property which may be sold by the Collateral Agent in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.
7.6 INTELLECTUAL PROPERTY.
(a) Anything contained herein to the contrary notwithstanding
but subject to the terms of the Intercreditor Agreement, upon the occurrence and
during the continuation of an Event of Default:
31
(i) the Collateral Agent shall have the right (but
not the obligation) to bring suit or otherwise commence any action or
proceeding in the name of any Grantor, the Collateral Agent or
otherwise, in the Collateral Agent's sole discretion, to enforce any
Intellectual Property, in which event such Grantor shall, at the
request of the Collateral Agent, do any and all lawful acts and execute
any and all documents reasonably required by the Collateral Agent in
aid of such enforcement and such Grantor shall promptly, upon demand,
reimburse and indemnify the Collateral Agent as provided in Section 10
hereof in connection with the exercise of its rights under this
Section, and, to the extent that the Collateral Agent shall elect not
to bring suit to enforce any Intellectual Property as provided in this
Section, each Grantor agrees to use all reasonable measures, whether by
action, suit, proceeding or otherwise, to prevent the infringement or
other violation of any of such Grantor's rights in the Intellectual
Property by others and for that purpose agrees to diligently maintain
any action, suit or proceeding against any Person so infringing as
shall be necessary to prevent such infringement or violation;
(ii) upon written demand from the Collateral Agent,
each Grantor shall grant, assign, convey or otherwise transfer to the
Collateral Agent an absolute assignment of all of such Grantor's right,
title and interest in and to the Intellectual Property and shall
execute and deliver to the Collateral Agent such documents as are
necessary or appropriate to carry out the intent and purposes of this
Agreement;
(iii) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that the Collateral Agent (or any
Secured Party) receives cash proceeds in respect of the sale of, or
other realization upon, the Intellectual Property;
(iv) within five (5) Business Days after written
notice from the Collateral Agent, each Grantor shall make available to
the Collateral Agent, to the extent within such Grantor's power and
authority, such personnel in such Grantor's employ on the date of such
Event of Default as the Collateral Agent may reasonably designate, by
name, title or job responsibility, to permit such Grantor to continue,
directly or indirectly, to produce, advertise and sell the products and
services sold or delivered by such Grantor under or in connection with
the Trademarks, Trademark Licenses, such persons to be available to
perform their prior functions on the Collateral Agent's behalf and to
be compensated by the Collateral Agent at such Grantor's expense on a
per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of Default;
and
(v) the Collateral Agent shall have the right to
notify, or require each Grantor to notify, any obligors with respect to
amounts due or to become due to such Grantor in respect of the
Intellectual Property, of the existence of the security interest
created herein, to direct such obligors to make payment of all such
amounts directly to the Collateral Agent, and, upon such notification
and at the expense of such Grantor, to enforce collection of any such
amounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor
might have done;
(1) all amounts and proceeds (including checks and other
instruments) received by Grantor in respect of amounts due to
such Grantor in respect of the Collateral or
32
any portion thereof shall be received in trust for the benefit
of the Collateral Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over
or delivered to the Collateral Agent in the same form as so
received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 7.7 hereof; and
(2) Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any
obligor with respect thereto or allow any credit or discount
thereon.
(b) Subject to the terms of the Intercreditor Agreement, if
(i) an Event of Default shall have occurred and, by reason of cure, waiver,
modification, amendment or otherwise, no longer be continuing, (ii) no other
Event of Default shall have occurred and be continuing, (iii) an assignment or
other transfer to the Collateral Agent of any rights, title and interests in and
to the Intellectual Property shall have been previously made and shall have
become absolute and effective, and (iv) the Secured Obligations shall not have
become immediately due and payable, upon the written request of any Grantor, the
Collateral Agent shall promptly execute and deliver to such Grantor, at such
Grantor's sole cost and expense, such assignments or other transfer as may be
necessary to reassign to such Grantor any such rights, title and interests as
may have been assigned to the Collateral Agent as aforesaid, subject to any
disposition thereof that may have been made by the Collateral Agent; provided,
after giving effect to such reassignment, the Collateral Agent's security
interest granted pursuant hereto, as well as all other rights and remedies of
the Collateral Agent granted hereunder, shall continue to be in full force and
effect; and provided further, the rights, title and interests so reassigned
shall be free and clear of any other Liens granted by or on behalf of the
Collateral Agent and the Secured Parties.
(c) Solely for the purpose of enabling the Collateral Agent to
exercise rights and remedies under this Section 7 and at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Collateral Agent, to the extent it
has the right to do so, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to such Grantor), subject, in
the case of Trademarks, to sufficient rights to quality control and inspection
in favor of such Grantor to avoid the risk of invalidation of said Trademarks,
to use, operate under, license, or sublicense any Intellectual Property now
owned or hereafter acquired by such Grantor, and wherever the same may be
located.
7.7 CASH PROCEEDS. Subject to the terms of the Intercreditor Agreement,
any Cash Proceeds received by the Collateral Agent (whether from a Grantor or
otherwise) after an Event of Default shall have occurred and be continuing, may,
in the sole discretion of the Collateral Agent, (A) be held by the Collateral
Agent for the ratable benefit of the Secured Parties, as collateral security for
the Secured Obligations (whether matured or unmatured) and/or (B) then or at any
time thereafter may be applied by the Collateral Agent against the Secured
Obligations then due and owing.
SECTION 8. COLLATERAL AGENT.
The Collateral Agent has been appointed to act as Collateral Agent
hereunder by Lenders and, by their acceptance of the benefits hereof, the other
Secured Parties. The Collateral Agent shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
33
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement, the Term Loan Credit Agreement and the
Intercreditor Agreement; provided, the Collateral Agent shall, after payment in
full of all Obligations (excluding contingent obligations in respect of
customary indemnification liabilities that survive termination of the Credit
Documents or such Person's release or discharge therefrom) under the Term Loan
Credit Agreement and the other Credit Documents, exercise, or refrain from
exercising, any remedies provided for herein in accordance with the instructions
of the holders of a majority of the aggregate notional amount (or, with respect
to any Hedge Agreement that has been terminated in accordance with its terms,
the amount then due and payable (exclusive of expenses and similar payments but
including any early termination payments then due) under such Hedge Agreement)
under all Hedge Agreements. In furtherance of the foregoing provisions of this
Section, each Secured Party, by its acceptance of the benefits hereof, agrees
that it shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Secured Party that all rights
and remedies hereunder may be exercised solely by the Collateral Agent for the
benefit of Lenders/Secured Parties in accordance with the terms of this Section.
Collateral Agent may resign or be removed and a successor Collateral Agent may
be appointed, all in accordance with Section 9.7 of the Term Loan Credit
Agreement.
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, be binding upon
each Grantor, its successors and assigns, and inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent and its successors, transferees and assigns. Without limiting the
generality of the foregoing, but subject to the terms of the Term Loan Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise. Upon the
payment in full of all Secured Obligations (excluding contingent obligations in
respect of customary indemnification liabilities that survive termination of the
Credit Documents or such Person's release or discharge therefrom), the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, the security interest granted
hereby shall terminate hereunder and of record and all rights to the Collateral
shall revert to Grantors. Thereafter, subject to the terms of the Intercreditor
Agreement, this Agreement shall be reinstated if at any time any payment of any
of the Obligations is rescinded or must otherwise be returned upon the
insolvency, bankruptcy or reorganization of any Grantor or any other Person or
otherwise, all as though the payment had not been made. Upon any such
termination the Collateral Agent shall, at Grantors' expense, execute and
deliver to Grantors such documents as Grantors shall reasonably request to
evidence such termination.
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.
The powers conferred on the Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Collateral Agent shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral. The
Collateral Agent shall be deemed to
34
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which the Collateral Agent accords its own property. Neither the Collateral
Agent nor any of its directors, officers, employees or agents shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any Grantor or
otherwise. If any Grantor fails to perform any agreement contained herein, the
Collateral Agent may itself perform, or cause performance of, such agreement,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by each Grantor under Section 10.2 of the Term Loan Credit Agreement.
SECTION 11. MISCELLANEOUS.
Any notice required or permitted to be given under this Agreement shall
be given in accordance with Section 10.1 of the Term Loan Credit Agreement. No
failure or delay on the part of the Collateral Agent in the exercise of any
power, right or privilege hereunder or under any other Credit 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 Credit Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available. In case any provision in or
obligation under this Agreement 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. 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, subject to the terms of the
Intercreditor Agreement, avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists. This Agreement shall be
binding upon and inure to the benefit of the Collateral Agent and Grantors and
their respective successors and assigns. No Grantor shall, without the prior
written consent of the Collateral Agent given in accordance with the Term Loan
Credit Agreement, assign any right, duty or obligation hereunder. This Agreement
and the other Credit Documents embody the entire agreement and understanding
between Grantors and the Collateral Agent and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof. Accordingly, the Credit Documents may not be contradicted by evidence
of prior, contemporaneous or subsequent oral agreements of the parties. There
are no unwritten oral agreements between the parties. This Agreement may be
executed in one or more 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 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW
PROVISIONS (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATION LAWS).
35
IN WITNESS WHEREOF, each Grantor and the Collateral Agent have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
CARMIKE CINEMAS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Finance, Treasurer and
Chief Financial Officer
EASTWYNN THEATRES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Finance, Treasurer and
Chief Financial Officer
MILITARY SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Finance, Treasurer and
Chief Financial Officer
WOODEN NICKEL PUB, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Finance, Treasurer and
Chief Financial Officer
S-1
NATIONAL CITY BANK,
as the Collateral Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
S-2
EXHIBIT A
TO PLEDGE AND SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF
GRANTOR] a [NAME OF STATE OF INCORPORATION] [Corporation] (the "GRANTOR")
pursuant to the Pledge and Security Agreement, dated as of [MM/DD/YY] (as it may
be from time to time amended, restated, modified or supplemented, the "Security
Agreement"), among CARMIKE CINEMAS, INC., the other Grantors named therein, and
NATIONAL CITY BANK, as the Collateral Agent. Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement.
Grantor hereby confirms the grant to the Collateral Agent set forth in
the Security Agreement of, and does hereby grant to the Collateral Agent, a
security interest in all of Grantor's right, title and interest in and to all
Collateral to secure the Secured Obligations, in each case whether now or
hereafter existing or in which Grantor now has or hereafter acquires an interest
and wherever the same may be located. Grantor represents and warrants that the
attached Supplements to Schedules accurately and completely set forth all
additional information required pursuant to the Security Agreement and hereby
agrees that such Supplements to Schedules shall constitute part of the Schedules
to the Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be
duly executed and delivered by its duly authorized officer as of [MM/DD/YY].
[NAME OF GRANTOR]
By:
---------------------------------
Name:
Title:
EXHIBIT A-1
SUPPLEMENT TO SCHEDULE 4.1
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
(A) Full Legal Name, Type of Organization, Jurisdiction of Organization,
Chief Executive Office/Sole Place of Business (or Residence if Grantor
is a Natural Person) and Organizational Identification Number of each
Grantor:
Chief Executive
Office/Sole Place of
Business (or
Jurisdiction of Residence if Grantor
Full Legal Name Type of Organization Organization is a Natural Person) Organization I.D.#
--------------- -------------------- --------------- -------------------- ------------------
(B) Other Names (including any Trade-Name or Fictitious Business Name)
under which each Grantor has conducted business for the past five (5)
years:
Full Legal Name Trade Name or Fictitious Business Name
--------------- --------------------------------------
(C) Changes in Name, Jurisdiction of Organization, Chief Executive Office
or Sole Place of Business (or Principal Residence if Grantor is a
Natural Person) and Corporate Structure within past five (5) years:
Name of Grantor Date of Change Description of Change
--------------- -------------- ---------------------
(D) Agreements pursuant to which any Grantor is found as debtor within past
five (5) years:
Name of Grantor Description of Agreement
--------------- ------------------------
(E) Financing Statements:
EXHIBIT A-2
Name of Grantor Filing Jurisdiction(s)
--------------- ----------------------
EXHIBIT A-3
SUPPLEMENT TO SCHEDULE 4.2
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
Name of Grantor Location of Equipment and Inventory
--------------- -----------------------------------
EXHIBIT A-4
SUPPLEMENT TO SCHEDULE 4.4
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
(A)
Pledged Stock:
Pledged Partnership Interests:
Pledged LLC Interests:
Pledged Trust Interests:
Pledged Debt:
Securities Account:
COMMODITIES ACCOUNTS:
Deposit Accounts:
(B)
Name of Grantor Date of Acquisition Description of Acquisition
--------------- ------------------- --------------------------
EXHIBIT A-5
SUPPLEMENT TO SCHEDULE 4.5
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
Name of Grantor Description of Material Contract
--------------- --------------------------------
EXHIBIT A-6
SUPPLEMENT TO SCHEDULE 4.6
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
Name of Grantor Description of Letters of Credit
--------------- --------------------------------
EXHIBIT A-7
SUPPLEMENT TO SCHEDULE 4.7
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
(A) Copyrights
(B) Copyright Licenses
(C) Patents
(D) Patent Licenses
(E) Trademarks
(F) Trademark Licenses
(G) Trade Secret Licenses
(H) Intellectual Property Exceptions
EXHIBIT A-8
SUPPLEMENT TO SCHEDULE 4.8
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
Name of Grantor Commercial Tort Claims
--------------- ----------------------
EXHIBIT A-9
EXHIBIT B
TO PLEDGE AND SECURITY AGREEMENT
UNCERTIFICATED SECURITIES CONTROL AGREEMENT
This Uncertificated Securities Control Agreement (this "AGREEMENT")
dated as of _____, 200__ by and [NAME OF PLEDGOR], a [STATE OF CORPORATION]
[Corporation] (the "PLEDGOR"), ▇▇▇▇▇ FARGO FOOTHILL, INC., in its capacity as
collateral agent for the First Lien Claimholders (as defined in the
Intercreditor Agreement referenced below, including its successors and assigns
from time to time, the "FIRST LIEN COLLATERAL AGENT"), NATIONAL CITY BANK, in
its capacity as collateral agent for the Second Lien Claimholders (as defined in
the Intercreditor Agreement, including its successors and assigns from time to
time, the "SECOND LIEN COLLATERAL Agent"; and together with the First Lien
Collateral Agent, the "COLLATERAL AGENTS") and ____________, a
________corporation (the "ISSUER"). Capitalized terms used but not defined
herein shall have the meaning assigned in the Intercreditor Agreement dated as
of February 4, 2004, (as amended, restated, supplemented or otherwise modified
from time to time, the "INTERCREDITOR AGREEMENT") among the Pledgor and the
Collateral Agents. All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York.
SECTION 1. PRIORITY OF LIEN. Pursuant to that certain Pledge and
Security Agreement dated as of February 4, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the "FIRST LIEN SECURITY
AGREEMENT"), among the Pledgor, the other grantors party thereto and the First
Lien Collateral Agent, and that certain Pledge and Security Agreement dated as
of February 4, 2004 (as amended, restated, supplemented or otherwise modified
from time to time, the "SECOND LIEN SECURITY AGREEMENT"; and together with the
First Lien Security Agreement, the "SECURITY AGREEMENTS"), among the Pledgor,
the other grantors party thereto and the Second Lien Collateral Agent, the
Pledgor has granted a security interest in all of the Pledgor's rights in the
Pledged Shares referred to in Section 2 below to each of the First Lien
Collateral Agent and the Second Lien Collateral Agent, respectively. The First
Lien Collateral Agent and Second Lien Collateral Agent, the Pledgor and the
Issuer are entering into this Agreement to perfect each of the First Lien
Collateral Agent and the Second Lien Collateral Agent's security interest in
such Pledged Shares. As between the First Lien Collateral Agent and the Second
Lien Collateral Agent, the First Lien Collateral Agent shall have a first
priority security interest in such Pledged Shares and the Second Lien Collateral
Agent shall have a second priority security interest in such Pledged Shares in
accordance with the Intercreditor Agreement. The Issuer hereby acknowledges that
it has received notice of the security interests of the First Lien Collateral
Agent and the Second Lien Collateral Agent in such Pledged Shares and hereby
acknowledges and consents to such liens.
SECTION 2. REGISTERED OWNERSHIP OF SHARES. The Issuer hereby confirms
and agrees that as of the date hereof the Pledgor is the registered owner of
__________ shares of the Issuer's [common] stock (the "PLEDGED SHARES") and the
Issuer shall not change the registered owner of the Pledged Shares without the
prior written consent of the Collateral Agents.
SECTION 3. INSTRUCTIONS. If at any time the Issuer shall receive
instructions originated by the First Lien Collateral Agent relating to the
Pledged Shares, the Issuer shall comply with such
EXHIBIT B-1
instructions without further consent by the Pledgor or any other person. If at
any time the Issuer shall receive instructions originated by the Second Lien
Collateral Agent relating to the Pledged Shares, the Issuer shall comply with
such instructions without further consent by the Pledgor or any other person;
provided that, prior to receipt by the Issuer of a Notice of Termination of
First Lien Obligations in the form of Exhibit A attached hereto ("NOTICE OF
TERMINATION OF FIRST LIEN OBLIGATIONS"), in the event the Issuer receives
conflicting instructions from the Collateral Agents, the Second Lien Collateral
Agent hereby instructs the Issuer to comply with the instructions of the First
Lien Collateral Agent.. The Issuer may comply with instructions from the Pledgor
until such time as either of the Collateral Agents may instruct the Issuer
otherwise. If the Pledgor is otherwise entitled to issue instructions and such
instructions conflict with any instructions issued by the First Lien Collateral
Agent or the Second Lien Collateral Agent (either with the consent of the First
Lien Collateral Agent or following the receipt by Issuer or a Notice of
Termination of First Lien Obligations), if applicable, the Issuer shall follow
the instructions issued by the applicable Collateral Agent.
SECTION 4. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The
Issuer hereby represents and warrants to the Collateral Agents:
(a) It has not entered into, and until the termination of this
agreement will not enter into, any agreement with any other person relating to
the Pledged Shares pursuant to which it has agreed to comply with instructions
issued by such other person; and
(b) It has not entered into, and until the termination of this
agreement will not enter into, any agreement with the Pledgor or the Collateral
Agents purporting to limit or condition the obligation of the Issuer to comply
with Instructions as set forth in Section 3 hereof.
(c) Except for the claims and interest of the Collateral Agents and of
the Pledgor in the Pledged Shares, the Issuer does not know of any claim to, or
interest in, the Pledged Shares. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Pledged Shares, the Issuer will
promptly notify the Collateral Agents and the Pledgor thereof.
(d) This Uncertificated Securities Control Agreement is the valid and
legally binding obligation of the Issuer.
SECTION 5. CHOICE OF LAW. This Agreement shall be governed by the laws
of the State of New York. Regardless of any provision in any other agreement,
for purposes of the UCC, New York shall be deemed to be the Issuer's
jurisdiction (within the meaning of Section 8-110 of the UCC) and the Pledged
Shares shall be governed by the laws of the State of New York.
SECTION 6. CONFLICT WITH OTHER AGREEMENTS. In the event of any conflict
between this Agreement (or any portion thereof) and any other agreement, now
existing or hereafter entered into, the terms of this Agreement shall prevail.
No amendment or modification of this Agreement or waiver of any right hereunder
shall be binding on any party hereto unless it is in writing and is signed by
all of the parties hereto.
SECTION 7. VOTING RIGHTS. Until such time as the Collateral Agents
shall otherwise instruct the Issuer in writing, the Pledgor shall have the right
to vote the Pledged Shares and shall have the right to receive all interest and
cash dividends paid on the Pledged Shares.
EXHIBIT B-2
SECTION 8. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. Each Collateral Agent may assign its
rights hereunder only with the express written consent of the Issuer and by
sending written notice of such assignment to the Pledgor.
SECTION 9. INDEMNIFICATION OF ISSUER. The Pledgor and the Collateral
Agents hereby agree that (a) the Issuer is released from any and all liabilities
to the Pledgor and the Collateral Agents arising from the terms of this
Agreement and the compliance of the Issuer with the terms hereof, except to the
extent that such liabilities arise from the Issuer's negligence, bad faith or
willful misconduct and (b) the Pledgor, its successors and assigns shall at all
times indemnify and save harmless the Issuer from and against any and all
claims, actions and suits of others arising out of the terms of this Agreement
or the compliance of the Issuer with the terms hereof, except to the extent that
such arises from the Issuer's negligence, bad faith or willful misconduct and
from and against any and all liabilities, losses, damages, costs, charges,
counsel fees and other expenses of every nature and character arising by reason
of the same, until the termination of this Agreement.
SECTION 10. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.
Pledgor: [CARMIKE CINEMAS, INC.]
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
First Lien Collateral Agent: ▇▇▇▇▇ FARGO FOOTHILL, INC.
as First Lien Collateral Agent
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Second Lien Collateral Agent: NATIONAL CITY BANK
as Second Lien Collateral Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: 216-222-0192
Issuer: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
EXHIBIT B-3
SECTION 11. TERMINATION. The obligations of the Issuer to the
Collateral Agents pursuant to this Agreement shall continue in effect until the
security interests of both Collateral Agents in the Pledged Shares have been
terminated pursuant to the terms of the Security Agreement and each Collateral
Agent has notified the Issuer of such termination in writing. The applicable
Collateral Agent agrees to provide notice of termination to the Issuer upon the
request of the Pledgor on or after the termination of such Collateral Agent's
security interest in the Pledged Shares pursuant to the terms of the Security
Agreement. The termination of this Agreement shall not terminate the Pledged
Shares or alter the obligations of the Issuer to the Pledgor pursuant to any
other agreement with respect to the Pledged Shares.
SECTION 12. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
[NAME OF PLEDGOR]
By:
-------------------------------
Name:
Title:
▇▇▇▇▇ FARGO FOOTHILL, INC.
as First Lien Collateral Agent
By:
--------------------------------
Name:
Title:
NATIONAL CITY BANK,
as Second Lien Collateral Agent
By:
--------------------------------
Name:
Title:
EXHIBIT B-4
[NAME OF ISSUER]
By:
--------------------------------
Name:
Title:
EXHIBIT B-5
Exhibit A
To Uncertificated Securities Control Agreement
[Letterhead of ▇▇▇▇▇ Fargo Foothill, Inc.]
NOTICE OF TERMINATION OF FIRST LIEN OBLIGATIONS
[Name of Financial Institution]
[Address]
NATIONAL CITY BANK,
as Second Lien Collateral Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Re: Uncertificated Securities Control Agreement dated as of _______, 200_
(as amended, restated, supplemented or otherwise modified from time to
time, the "Control Agreement") by and among [NAME OF PLEDGOR], ▇▇▇▇▇
Fargo Foothill, Inc., as First Lien Collateral Agent (in such capacity,
the "First Lien Collateral Agent"), NATIONAL CITY BANK, as Second Lien
Collateral Agent (in such capacity, the "Second Lien Collateral Agent")
and [NAME OF FINANCIAL INSTITUTION] re: Pledged Shares issued by [NAME
OF ISSUER].
Ladies and Gentlemen:
You are hereby notified that there has been a Discharge of First Lien
Obligations.
Capitalized terms used but not defined herein shall have the meanings
set forth in the Control Agreement.
Sincerely,
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as First Lien Collateral Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Cc: [PLEDGOR]
EXHIBIT B-A-1
EXHIBIT C
TO PLEDGE AND SECURITY AGREEMENT
SECURITIES ACCOUNT CONTROL AGREEMENT
This Securities Account Control Agreement dated as of _______, 200__
(this "AGREEMENT") among [NAME OF DEBTOR], a [STATE OF INCORPORATION]
[Corporation] (the "DEBTOR"), ▇▇▇▇▇ FARGO FOOTHILL, INC. in its capacity as
collateral agent for the First Lien Claimholders (as defined in the
Intercreditor Agreement referenced below, including its successors and assigns
from time to time, the "FIRST LIEN COLLATERAL AGENT"), NATIONAL CITY BANK., in
its capacity as collateral agent for the Second Lien Claimholders (as defined in
the Intercreditor Agreement, including its successors and assigns from time to
time, the "SECOND LIEN COLLATERAL AGENT"; and together with the First Lien
Collateral Agent, the "COLLATERAL AGENTS") and [____________], in its capacity
as a "securities intermediary" as defined in Section 8-102 of the UCC (in such
capacity, the "SECURITIES INTERMEDIARY"). Capitalized terms used but not defined
herein shall have the meaning assigned thereto in the Intercreditor Agreement,
dated as of February 4, 2004, (as amended, restated, supplemented or otherwise
modified from time to time, the "INTERCREDITOR AGREEMENT") among the Debtor and
Collateral Agents. All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York.
SECTION 1. PRIORITY OF LIEN. Pursuant to that certain Pledge and
Security Agreement dated as of February 4, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the "FIRST LIEN SECURITY
AGREEMENT"), among the Debtor, the other grantors party thereto and the First
Lien Collateral Agent, and that certain Pledge and Security Agreement dated as
of February 4, 2004 (as amended, restated, supplemented or otherwise modified
from time to time, the "SECOND LIEN SECURITY AGREEMENT"; and together with the
First Lien Security Agreement, the "SECURITY AGREEMENTS"), among the Debtor, the
other grantors party thereto and the Second Lien Collateral Agent, the Debtor
has granted a security interest in all of the Debtor's rights in the Securities
Account referred to Section 2 below to each of the First Lien Collateral Agent
and the Second Lien Collateral Agent, respectively. The First Lien Collateral
Agent and Second Lien Collateral Agent, the Debtor and the Securities
Intermediary are entering into this Agreement to perfect each of the First Lien
Collateral Agent and the Second Lien Collateral Agent's security interest in the
Securities Account. As between the First Lien Collateral Agent and the Second
Lien Collateral Agent, the First Collateral Agent shall have a first priority
security interest in the Securities Account and the Second Collateral Agent
shall have a second priority security interest in the Securities Account in
accordance with the Intercreditor Agreement. The Securities Intermediary hereby
acknowledges that it has received notice of the security interests of the First
Lien Collateral Agent and the Second Lien Collateral Agent in the Securities
Account and hereby acknowledges and consents to such liens.
SECTION 2. ESTABLISHMENT OF SECURITIES ACCOUNT. The Securities
Intermediary hereby confirms and agrees that:
EXHIBIT C-1
(a) The Securities Intermediary has established account number
[IDENTIFY ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF ACCOUNT]" (such
account and any successor account, the "SECURITIES ACCOUNT") and the Securities
Intermediary shall not change the name or account number of the Securities
Account without the prior written consent of (i) prior to delivery of a Notice
of Termination of First Lien Obligations in the form of Exhibit A attached
hereto ("NOTICE OF TERMINATION OF FIRST LIEN OBLIGATIONS"), the First Lien
Collateral Agent, (ii) subsequent to delivery of a Notice of Termination of
First Lien Obligations, the Second Lien Collateral Agent, and (iii) prior to
delivery pursuant to Section 9(a) of a Notice of Sole Control in substantially
the form set forth in Exhibit B attached hereto ("NOTICE OF SOLE CONTROL"), the
Debtor; and
(b) All securities or other property underlying any financial assets
credited to the Securities Account shall be registered in the name of the
Securities Intermediary, endorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to the Securities
Account be registered in the name of the Debtor, payable to the order of the
Debtor or specially indorsed to the Debtor except to the extent the foregoing
have been specially indorsed to the Securities Intermediary or in blank;
(c) All property delivered to the Securities Intermediary pursuant to
the Security Agreement will be promptly credited to the Securities Account; and
(d) The Securities Account is a "securities account" within the meaning
of Section 8-501 of the UCC.
SECTION 3. "FINANCIAL ASSETS" ELECTION. The Securities Intermediary
hereby agrees that each item of property (including, without limitation, any
investment property, financial asset, security, instrument, general intangible
or cash) credited to the Securities Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.
SECTION 4. CONTROL OF THE SECURITIES ACCOUNT. If at any time the
Securities Intermediary shall receive any order from the First Lien Collateral
Agent directing transfer or redemption of any financial asset relating to the
Securities Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Debtor or any other person. If
at any time the Securities Intermediary shall receive any order from the Second
Lien Collateral Agent directing transfer or redemption of any financial asset
relating to the Securities Account, the Securities Intermediary shall comply
with such entitlement order without further consent by the Debtor or any other
person; provided that, prior to receipt by the Securities Intermediary of a
Notice of Termination of First Lien Obligations, in the event the Securities
Intermediary receives conflicting instructions from the Collateral Agents, the
Second Lien Collateral Agent hereby instructs the Securities Intermediary to
comply with the instructions of the First Lien Collateral Agent.. The Securities
Intermediary shall comply with entitlement orders from the Debtor directing
transfer or redemption of any financial asset relating to the Securities Account
until such time as the Securities Intermediary has received a Notice of Sole
Control delivered pursuant to Section 9(a). Until such time as the Securities
Intermediary has received a Notice of Sole Control delivered under Section 9(a),
the Securities Intermediary shall be entitled to distribute to the Debtor all
income on the financial assets in the Securities Account. If the Debtor is
otherwise entitled to issue entitlement orders and such orders conflict with any
entitlement order issued by the First Lien Collateral Agent or the Second Lien
Collateral Agent (either with the consent of the First Lien Collateral Agent or
following the receipt by Financial
EXHIBIT C-2
Institution of a Notice of Termination of First Lien Obligations), if
applicable, the Securities Intermediary shall follow the orders issued by the
applicable Collateral Agent.
SECTION 5. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that
the Securities Intermediary has or subsequently obtains by agreement, by
operation of law or otherwise a security interest in the Securities Account or
any security entitlement credited thereto, the Securities Intermediary hereby
agrees that such security interest shall be subordinate to the security interest
of the Collateral Agents. The financial assets and other items deposited to the
Securities Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any person other than the Collateral Agents (except
that the Securities Intermediary may set off (i) all amounts due to the
Securities Intermediary in respect of customary fees and expenses for the
routine maintenance and operation of the Securities Account and (ii) the face
amount of any checks which have been credited to such Securities Account but are
subsequently returned unpaid because of uncollected or insufficient funds).
SECTION 6. CHOICE OF LAW. This Agreement and the Securities Account
shall each be governed by the laws of the State of New York. Regardless of any
provision in any other agreement, for purposes of the UCC, New York shall be
deemed to be the Securities Intermediary's jurisdiction (within the meaning of
Section 8-304 of the UCC) and the Securities Account (as well as the securities
entitlements related thereto) shall be governed by the laws of the State of New
York.
SECTION 7. CONFLICT WITH OTHER AGREEMENTS.
(a) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement, now existing or hereafter entered into, the
terms of this Agreement shall prevail;
(b) No amendment or modification of this Agreement or waiver of any
right hereunder shall be binding on any party hereto unless it is in writing and
is signed by all of the parties hereto;
(c) The Securities Intermediary hereby confirms and agrees that:
(i) There are no other control agreements entered into between
the Securities Intermediary and the Debtor with respect to the
Securities Account;
(ii) It has not entered into, and until the termination of
this Agreement, will not enter into, any agreement with any other
person relating to the Securities Account and/or any financial assets
credited thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the UCC) of
such other person; and
(iii) It has not entered into, and until the termination of
this Agreement, will not enter into, any agreement with the Debtor or
either Collateral Agent purporting to limit or condition the obligation
of the Securities Intermediary to comply with entitlement orders as set
forth in Section 4 hereof.
SECTION 8. ADVERSE CLAIMS. Except for the claims and interest of the
Collateral Agents and of the Debtor in the Securities Account, the Securities
Intermediary does not know of any claim to, or interest in, the Securities
Account or in any "financial asset" (as defined in Section 8-
EXHIBIT C-3
102(a) of the UCC) credited thereto. If any person asserts any lien, encumbrance
or adverse claim (including any writ, garnishment, judgment, warrant of
attachment, execution or similar process) against the Securities Account or in
any financial asset carried therein, the Securities Intermediary will promptly
notify the Collateral Agents and the Debtor thereof.
SECTION 9. MAINTENANCE OF SECURITIES ACCOUNT. In addition to, and not
in lieu of, the obligation of the Securities Intermediary to honor entitlement
orders as agreed in Section 4 hereof, the Securities Intermediary agrees to
maintain the Securities Account as follows:
(a) Notice of Sole Control. If at any time the First Lien Collateral
Agent or the Second Lien Collateral Agent, as the case may be, delivers to the
Securities Intermediary a Notice of Sole Control in substantially the form set
forth in Exhibit B hereto, the Securities Intermediary agrees that after receipt
of such notice, it will take all instruction with respect to the Securities
Account solely from the appropriate Collateral Agent, as provided herein.
(b) Voting Rights. Until such time as the Securities Intermediary and
the Debtor each receives a Notice of Sole Control pursuant to subsection (a) of
this Section 9, the Debtor shall direct the Securities Intermediary with respect
to the voting of any financial assets credited to the Securities Account.
(c) Permitted Investments. Until such time as the Securities
Intermediary receives a Notice of Sole Control signed by the applicable
Collateral Agent, the Debtor shall direct the Securities Intermediary with
respect to the selection of investments to be made for the Securities Account.
(d) Statements and Confirmations. The Securities Intermediary will
promptly send copies of all statements, confirmations and other correspondence
concerning the Securities Account and/or any financial assets credited thereto
simultaneously to each of the Debtor and the Collateral Agents at the address
for each set forth in Section 13 of this Agreement.
(e) Tax Reporting. All items of income, gain, expense and loss
recognized in the Securities Account shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the name and taxpayer
identification number of the Debtor.
SECTION 10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITIES
INTERMEDIARY. The Securities Intermediary hereby makes the following
representations, warranties and covenants:
(a) The Securities Account has been established as set forth in Section
2 above and such Securities Account will be maintained in the manner set forth
herein until termination of this Agreement; and
(b) This Agreement is the valid and legally binding obligation of the
Securities Intermediary.
SECTION 11 INDEMNIFICATION OF SECURITIES INTERMEDIARY. The Debtor and
each Collateral Agent hereby agree that (a) the Securities Intermediary is
released from any and all liabilities to the Debtor and the Collateral Agents
arising from the terms of this Agreement and the compliance of the Securities
Intermediary with the terms hereof, except to the extent that such liabilities
arise from the Securities Intermediary's negligence, bad faith or willful
misconduct and (b) the Debtor, its successors and assigns shall at all times
indemnify and save harmless the
EXHIBIT C-4
Securities Intermediary from and against any and all claims, actions and suits
of others arising out of the terms of this Agreement or the compliance of the
Securities Intermediary with the terms hereof, except to the extent that such
arises from the Securities Intermediary's negligence, bad faith or willful
misconduct and from and against any and all liabilities, losses, damages, costs,
charges, counsel fees and other expenses of every nature and character arising
by reason of the same, until the termination of this Agreement.
SECTION 12. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. Each Collateral Agent may assign its
rights hereunder only with the express written consent of the Securities
Intermediary and by sending written notice of such assignment to the Debtor.
SECTION 13. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.
Debtor: [CARMIKE CINEMAS, INC.]
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
First Lien Collateral Agent: ▇▇▇▇▇ FARGO FOOTHILL, INC.
as First Lien Collateral Agent
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Second Lien Collateral Agent: NATIONAL CITY BANK
as Second Lien Collateral Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: 216-222-0192
Securities Intermediary: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
SECTION 14. TERMINATION. The obligations of the Securities Intermediary
to the Collateral Agents pursuant to this Agreement shall continue in effect
until the security interests of both Collateral Agents in the Securities Account
have been terminated pursuant to the terms of
EXHIBIT C-5
the Security Agreements and the applicable Collateral Agent has notified the
Securities Intermediary of such termination in writing. The applicable
Collateral Agent agrees to provide Notice of Termination to the Securities
Intermediary upon the request of the Debtor on or after the termination of such
Collateral Agent's security interest in the Securities Account pursuant to the
terms of the Security Agreement. The termination of this Agreement shall not
terminate the Securities Account or alter the obligations of the Securities
Intermediary to the Debtor pursuant to any other agreement with respect to the
Securities Account.
SECTION 15. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
EXHIBIT C-6
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Account Control Agreement to be executed as of the date first above written by
their respective officers thereunto duly authorized.
[DEBTOR]
By:
-------------------------------
Name:
Title:
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as First Lien Collateral Agent
By:
-------------------------------
Name:
Title:
NATIONAL CITY BANK,
as Second Lien Collateral Agent
By:
-------------------------------
Name:
Title:
[NAME OF SECURITIES
INTERMEDIARY],
as Securities Intermediary
By:
-------------------------------
Name:
Title:
EXHIBIT C-7
EXHIBIT A
TO SECURITIES ACCOUNT CONTROL AGREEMENT
NOTICE OF TERMINATION OF FIRST LIEN OBLIGATIONS
[Name of Financial Institution]
[Address]
NATIONAL CITY BANK
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Agent Services
Re: Securities Account Control Agreement dated as of_____, 200__ (as
amended, restated, supplemented or otherwise modified from time to
time, the "Control Agreement") by and among [NAME OF DEBTOR], NATIONAL
CITY BANK, as First Lien Collateral Agent (in such capacity, the "First
Lien Collateral Agent"), ▇▇▇▇▇ FARGO FOOTHILL, INC., as Second Lien
Collateral Agent (in such capacity, the "Second Lien Collateral Agent")
and [NAME OF FINANCIAL INSTITUTION] re securities account number
________________ and all financial assets credited thereto.
Ladies and Gentlemen:
You are hereby notified that there has been a Discharge of First Lien
Obligations.
Capitalized terms used but not defined herein shall have the meanings
set forth in the Control Agreement.
Sincerely,
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as First Lien Collateral Agent
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Cc: [Debtor]
EXHIBIT C-A-1
EXHIBIT B
TO SECURITIES ACCOUNT CONTROL AGREEMENT
NOTICE OF SOLE CONTROL
[NAME OF FINANCIAL INSTITUTION]
[ADDRESS]
Re: Securities Account Control Agreement dated as of ________, 200__ (as
amended, restated, supplemented or otherwise modified from time to
time, the "Control Agreement") by and among [NAME OF DEBTOR] (the
"Debtor"), ▇▇▇▇▇ FARGO FOOTHILL, INC., as First Lien Collateral Agent
(in such capacity, the "First Lien Collateral Agent"), NATIONAL CITY
BANK, as Second Lien Collateral Agent (in such capacity, the "Second
Lien Collateral Agent") and [NAME OF FINANCIAL INSTITUTION] re
securities account number ________________ (the "Securities Account")
and all financial assets credited thereto.
Ladies and Gentlemen:
Subject to the terms of the Control Agreement or until you are notified
otherwise in writing by the undersigned, we hereby give you notice of our sole
control over the Securities Account and all financial assets credited thereto.
You are hereby instructed not to accept any entitlement orders with respect to
the Securities Account or the financial assets credited thereto from any person
other than the undersigned, unless otherwise ordered by a court of competent
jurisdiction.
We hereby confirm that a copy of this notice has been
delivered by facsimile transmission to the Debtor.
[▇▇▇▇▇ FARGO FOOTHILL,
INC./NATIONAL CITY BANK]
as [First/Second] Lien Collateral Agent
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Cc: National City Bank
[Debtor]
EXHIBIT C-B-1
EXHIBIT D
TO PLEDGE AND SECURITY AGREEMENT
DEPOSIT ACCOUNT CONTROL AGREEMENT
This DEPOSIT ACCOUNT CONTROL AGREEMENT (this "AGREEMENT"), dated as of
February [__], 2004, and entered into by and among [NAME OF DEBTOR], a [STATE OF
INCORPORATION] [Corporation] (the "DEBTOR"), and ▇▇▇▇▇ FARGO FOOTHILL, INC., in
its capacity as collateral agent for the First Lien Obligations, including its
successors and assigns from time to time (the "FIRST LIEN COLLATERAL AGENT"),
and NATIONAL CITY BANK, in its capacity as collateral agent for the Second Lien
Obligations, including its successors and assigns from time to time (the "SECOND
LIEN COLLATERAL AGENT"; and together with the First Lien Collateral Agent, the
"COLLATERAL AGENTS") and [ ], in its capacity as a "bank" as defined in Section
9-102 of the UCC (in such capacity, the "FINANCIAL INSTITUTION"). Capitalized
terms used herein but not otherwise defined herein have the meanings set forth
in the Intercreditor Agreement, dated as of February 4, 2004, (as amended,
restated, supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT") among Debtor and Collateral Agents. All references
herein to the "UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York.
SECTION 1. PRIORITY OF LIEN. Pursuant to that certain Pledge and
Security Agreement dated as of February 4, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the "FIRST LIEN SECURITY
AGREEMENT"), among the Debtor, the other grantors party thereto and the First
Lien Collateral Agent, and that certain Pledge and Security Agreement dated as
of February 4, 2004 (as amended, restated, supplemented or otherwise modified
from time to time, the "SECOND LIEN SECURITY AGREEMENT"; and together with the
First Lien Security Agreement, the "PLEDGE AND SECURITY AGREEMENTS"), among the
Debtor, the other grantors party thereto and the Second Lien Collateral Agent,
the Debtor has granted a security interest in all of the Debtor's rights in the
Deposit Account referred to in Section 2 below to each of the First Lien
Collateral Agent and the Second Lien Collateral Agent, respectively. The First
Lien Collateral Agent and Second Lien Collateral Agent, the Debtor and the
Financial Institution are entering into this Agreement to perfect each of the
First Lien Collateral Agent's and the Second Lien Collateral Agent's security
interest in the Deposit Account. As between the First Lien Collateral Agent and
the Second Lien Collateral Agent, the First Collateral Agent shall have a first
priority security interest in the Deposit Account and the Second Collateral
Agent shall have a second priority security interest in the Deposit Account
(which relationship between the Collateral Agents is set forth in the
Intercreditor Agreement). The Financial Institution hereby acknowledges that it
has received notice of the respective security interests of the First Lien
Collateral Agent and the Second Lien Collateral Agent in the Deposit Account and
hereby acknowledges and consents to such liens.
SECTION 2. ESTABLISHMENT OF DEPOSIT ACCOUNT. The Financial Institution
hereby confirms and agrees that:
(a) The Financial Institution has established account number [IDENTIFY
ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF ACCOUNT]" (such account
and
EXHIBIT D-1
any successor account, the "DEPOSIT ACCOUNT") and the Financial Institution
shall not change the name or account number of the Deposit Account without the
prior written consent of (i) prior to delivery of a Notice of Termination of
First Lien Obligations in the form of Exhibit A attached hereto ("NOTICE OF
TERMINATION OF FIRST LIEN OBLIGATIONS"), the First Lien Collateral Agent, (ii)
subsequent to delivery of a Notice of Termination of First Lien Obligations, the
Second Lien Collateral Agent, (iii) prior to delivery pursuant to Section 8(a)
of a Notice of Sole Control in substantially the form set forth in Exhibit B
hereto ("NOTICE OF SOLE CONTROL"), the Debtor; and
(b) The Deposit Account is a "deposit account" within the meaning of
Section 9-102(a)(29) of the UCC.
SECTION 3. CONTROL OF THE DEPOSIT ACCOUNT. If at any time the Financial
Institution receives any instructions originated by the First Lien Collateral
Agent directing the disposition of funds in the Deposit Account, the Financial
Institution shall comply with such instructions without further consent by the
Debtor or any other person. If at any time the Financial Institution shall
receive any instructions originated by the Second Lien Collateral Agent
directing the disposition of funds in the Deposit Account, the Financial
Institution shall comply with such instructions without further consent by the
Debtor or any other person; provided that, prior to receipt by the Financial
Institution of a Notice of Termination of First Lien Obligations, in the event
the Financial Institution receives conflicting instructions from the Collateral
Agents, the Second Lien Collateral Agent hereby instructs the Financial
Institution to comply with the instructions of the First Lien Collateral Agent.
The Financial Institution shall comply with instructions from the Debtor
directing the disposition of funds in the Deposit Account until such time as the
Financial Institution has received a Notice of Sole Control delivered pursuant
to Section 8(a). If the Debtor is otherwise entitled to issue instructions
directing the disposition of funds in the Deposit Account and such instructions
conflict with any instructions issued by the First Lien Collateral Agent or the
Second Lien Collateral Agent (either with the consent of the First Lien
Collateral Agent or following the receipt by Financial Institution of a Notice
of Termination of First Lien Obligations), if applicable, the Financial
Institution shall follow the instructions issued by the applicable Collateral
Agent.
SECTION 4. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that
the Financial Institution has or subsequently obtains by agreement, by operation
of law or otherwise a security interest in the Deposit Account or any funds
credited thereto, the Financial Institution hereby agrees that such security
interest shall be subordinate to the security interest of the Collateral Agents.
Money and other items credited to the Deposit Account will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any person
other than the Collateral Agents (except that the Financial Institution may set
off (i) all amounts due to the Financial Institution in respect of customary
fees and expenses for the routine maintenance and operation of the Deposit
Account and (ii) the face amount of any checks which have been credited to such
Deposit Account but are subsequently returned unpaid because of uncollected or
insufficient funds).
SECTION 5. CHOICE OF LAW. This Agreement and the Deposit Account shall
each be governed by the laws of the State of New York. Regardless of any
provision in any other agreement, for purposes of the UCC, New York shall be
deemed to be the Financial Institution's jurisdiction (within the meaning of
Section 9-304 of the UCC) and the Deposit Account shall be governed by the laws
of the State of New York.
EXHIBIT D-2
SECTION 6. CONFLICT WITH OTHER AGREEMENTS.
(a) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement, now existing or hereafter entered into, the
terms of this Agreement shall prevail;
(b) No amendment or modification of this Agreement or waiver of any
right hereunder shall be binding on any party hereto unless it is in writing and
is signed by all of the parties hereto; and
(c) The Financial Institution hereby confirms and agrees that:
(i) There are no other agreements entered into between the
Financial Institution and the Debtor with respect to the Deposit
Account;
(ii) It has not entered into, and until the termination of
this Agreement, will not enter into, any agreement with any other
person relating to the Deposit Account and/or any funds credited
thereto pursuant to which it has agreed to comply with instructions
originated by such persons as contemplated by Section 9-104 of the UCC;
and
(iii) It has not entered into, and until the termination of
this Agreement, will not enter into, any agreement with the Debtor or
either Collateral Agent purporting to limit or condition the obligation
of the Financial Institution to comply with instructions orders as set
forth in Section 3 hereof.
SECTION 7. ADVERSE CLAIMS. The Financial Institution does not know of
any liens, claims or encumbrances relating to the Deposit Account. If any person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Deposit Account, the Financial Institution will promptly notify the Collateral
Agents and the Debtor thereof.
SECTION 8. MAINTENANCE OF DEPOSIT ACCOUNT. In addition to, and not in
lieu of, the obligation of the Financial Institution to honor instructions as
set forth in Section 3 hereof, the Financial Institution agrees to maintain the
Deposit Account as follows:
(a) Notice of Sole Control. If at any time the First Lien Collateral
Agent or the Second Lien Collateral Agent, as the case may be, delivers to the
Financial Institution a Notice of Sole Control in substantially the form set
forth in Exhibit B hereto, the Financial Institution agrees that after receipt
of such notice, it will take all instruction with respect to the Deposit Account
solely from the appropriate Collateral Agent, as provided herein.
(b) Statements and Confirmations. The Financial Institution will
promptly send copies of all statements, confirmations and other correspondence
concerning the Deposit Account simultaneously to each of the Debtor and the
Collateral Agents at the address for each set forth in Section 12 of this
Agreement; and
(c) Tax Reporting. All interest, if any, relating to the Deposit
Account, shall be reported to the Internal Revenue Service and all state and
local taxing authorities under the name and taxpayer identification number of
the Debtor.
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FINANCIAL
INSTITUTION. The Financial Institution hereby makes the following
representations, warranties and covenants:
EXHIBIT D-3
(a) The Deposit Account has been established as set forth in Section 2
and such Deposit Account will be maintained in the manner set forth herein until
termination of this Agreement; and
(b) This Agreement is the valid and legally binding obligation of the
Financial Institution.
SECTION 10. INDEMNIFICATION OF FINANCIAL INSTITUTION. The Debtor and
the Collateral Agents hereby agree that (a) the Financial Institution is
released from any and all liabilities to the Debtor and the Collateral Agents
arising from the terms of this Agreement and the compliance of the Financial
Institution with the terms hereof, except to the extent that such liabilities
arise from the Financial Institution's negligence and (b) the Debtor, its
successors and assigns shall at all times indemnify and save harmless the
Financial Institution from and against any and all claims, actions and suits of
others arising out of the terms of this Agreement or the compliance of the
Financial Institution with the terms hereof, except to the extent that such
arises from the Financial Institution's negligence, and from and against any and
all liabilities, losses, damages, costs, charges, counsel fees and other
expenses of every nature and character arising by reason of the same, until the
termination of this Agreement.
SECTION 11. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. Each Collateral Agent may assign its
rights hereunder only with the express written consent of the Financial
Institution and by sending written notice of such assignment to the Debtor.
SECTION 12 NOTICES. Any notice, request or other communication required
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.
Debtor: [CARMIKE CINEMAS, INC.]
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT D-4
First Lien Collateral Agent: ▇▇▇▇▇ FARGO FOOTHILL, INC.
as First Lien Collateral Agent
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Second Lien Collateral Agent: NATIONAL CITY BANK
as Second Lien Collateral Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: 216-222-0192
Financial Institution: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
SECTION 13. TERMINATION. The obligations of the Financial Institution
to the Collateral Agents pursuant to this Agreement shall continue in effect
until the security interests of both Collateral Agents in the Deposit Account
have been terminated pursuant to the terms of the Pledge and Security Agreements
and the applicable Collateral Agent has notified the Financial Institution of
such termination in writing. The applicable Collateral Agent agrees to provide
notice of termination to the Financial Institution upon the request of the
Debtor on or after the termination of such Collateral Agent's security interest
in the Deposit Account pursuant to the terms of the Security Agreement. The
termination of this Agreement shall not terminate the Deposit Account or alter
the obligations of the Financial Institution to the Debtor pursuant to any other
agreement with respect to the Deposit Account.
SECTION 14. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
[Remainder of page intentionally left blank]
EXHIBIT D-5
IN WITNESS WHEREOF, the parties hereto have caused this Deposit Account Control
Agreement to be executed as of the date first above written by their respective
officers thereunto duly authorized.
[DEBTOR]
By:
------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO FOOTHILL, INC., as First
Lien Collateral Agent
By:
------------------------------------
Authorized Signatory
NATIONAL CITY BANK, as Second Lien
Collateral Agent
By:
------------------------------------
Authorized Signatory
[NAME OF FINANCIAL INSTITUTION],
as Financial Institution
By:
------------------------------------
Name:
Title:
EXHIBIT D-6
EXHIBIT A
TO DEPOSIT ACCOUNT CONTROL AGREEMENT
[Letterhead of the First Lien Collateral Agent]
NOTICE OF TERMINATION OF FIRST LIEN OBLIGATIONS
[Name of Financial Institution]
[Address]
NATIONAL CITY BANK,
as Second Lien Collateral Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention:
Re: Deposit Account Control Agreement dated as of February __, 2004 (as
amended, restated, supplemented or otherwise modified from time to
time, the "Control Agreement") by and among [NAME OF DEBTOR], ▇▇▇▇▇
FARGO FOOTHILL, INC., as First Lien Collateral Agent (in such capacity,
the "First Lien Collateral Agent"), NATIONAL CITY BANK, as Second Lien
Collateral Agent (in such capacity, the "Second Lien Collateral Agent")
and [NAME OF FINANCIAL INSTITUTION] re deposit account number
________________ in the name of ____________.
Ladies and Gentlemen:
You are hereby notified that there has been a Discharge of First Lien
Obligations.
Capitalized terms used but not defined herein shall have the meanings
set forth in the Control Agreement.
Sincerely,
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as First Lien Collateral Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Cc: [Debtor]
EXHIBIT D-A-1
EXHIBIT B
TO DEPOSIT ACCOUNT CONTROL AGREEMENT
NOTICE OF SOLE CONTROL
[NAME OF FINANCIAL INSTITUTION]
[ADDRESS]
Re: Deposit Account Control Agreement dated as of February __, 2004 (as
amended, restated, supplemented or otherwise modified from time to
time, the "Control Agreement") by and among [NAME OF DEBTOR] (the
"Debtor"), ▇▇▇▇▇ FARGO FOOTHILL, INC., as First Lien Collateral Agent
(in such capacity, the "First Lien Collateral Agent"), NATIONAL CITY
BANK, as Second Lien Collateral Agent (in such capacity, the "Second
Lien Collateral Agent") and [NAME OF FINANCIAL INSTITUTION] re deposit
account number ________________ and the funds credited thereto.
Ladies and Gentlemen:
Subject to the terms of the Control Agreement or until you are notified
otherwise in writing by the undersigned, we hereby give you notice of our sole
control over the Deposit Account and the funds credited thereto. You are hereby
instructed not to accept any direction or instructions with respect to the
Deposit Account or the funds credited thereto from any person other than the
undersigned, unless otherwise ordered by a court of competent jurisdiction.
We hereby confirm that a copy of this notice has been
delivered by facsimile transmission to the Debtor.
[▇▇▇▇▇ FARGO FOOTHILL, INC./NATIONAL
CITY BANK],
as [First/Second] Lien Collateral Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Cc: [Second Lien Collateral Agent]
[Debtor]
EXHIBIT D-B-1
EXHIBIT J TO
SECOND LIEN CREDIT AGREEMENT
Prepared By, Recording Requested By,
and After Recording Return To:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
SECOND MORTGAGE AND SECURITY AGREEMENT AND ASSIGNMENT OF
LEASES AND RENTS (FLORIDA)
by and from
[CARMIKE CINEMAS, INC.], "MORTGAGOR,"
to
NATIONAL CITY BANK, AS COLLATERAL AGENT, "MORTGAGEE"
DATED AS OF FEBRUARY 4, 2004
THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING TO BE INDEXED
AGAINST THE RECORD OWNER OF THE REAL ESTATE DESCRIBED HEREIN.
THIS SECOND MORTGAGE AND SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS
(THE `MORTGAGE') EVIDENCES A MULTI STATE LOAN WHICH IS SECURED BY COLLATERAL
LOCATED OUTSIDE OF THE STATE OF FLORIDA AND IN FLORIDA AND SECURES A CREDIT AND
GUARANTY AGREEMENT, WHICH WAS EXECUTED AND DELIVERED OUTSIDE THE STATE OF
FLORIDA. THE MORTGAGE SPECIFICALLY PROVIDES ON PAGE ---- OF THE MORTGAGE THAT
THE MORTGAGEE HAS LIMITED THE AMOUNT OF RECOVERY UNDER THE MORTGAGE TO
$_________________________. PURSUANT TO SECTION 201.08, FLORIDA STATUTES AND
FLORIDA ADMINISTRATIVE CODE RULE 12B-4.053(31)(c), AND CHAPTER 199, FLORIDA
STATUTES, FLORIDA DOCUMENTARY STAMP TAX IN THE AMOUNT OF $_____.00 AND FLORIDA
NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX IN THE AMOUNT OF
$_______________.00 ARE DUE AND BEING PAID UPON RECORDING OF THIS MORTGAGE IN
THE PUBLIC RECORDS OF _________________ COUNTY, FLORIDA.
EXHIBIT J-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
THIS SECOND MORTGAGE AND SECURITY AGREEMENT AND ASSIGNMENT OF LEASES
AND RENTS (this "Instrument") is made and entered into as of this 4th day of
February, 2004, by [CARMIKE CINEMAS, INC., a Delaware corporation ("Mortgagor"),
having an address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇], in favor
of National City Bank, as Collateral Agent in such capacity ("Collateral Agent")
for the lenders ("Lenders") from time to time parties to the Credit Agreement
(as hereinafter defined) and all successor Collateral Agents, and assigns, in
such capacity ("Mortgagee"), having an address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇-▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, Mortgagor is the owner of a fee simple interest in the real
property described on Exhibit A attached hereto and incorporated herein by
reference;
WHEREAS, pursuant to a Credit and Guaranty Agreement, dated as of the
date hereof (as the same may be amended, supplemented, restated or otherwise
modified from time to time, including, but not limited to, any extension,
refinancing, replacement, increase or other restructuring thereof, the "First
Priority Credit Agreement"), Mortgagor has requested and ▇▇▇▇▇ Fargo Foothill,
Inc. (in its capacity as administrative agent and collateral agent for the
lenders party thereto (the "First Priority Lenders"), the "First Priority
Mortgagee"), and the First Priority Lenders have agreed to provide a first
priority secured revolving loan facility to Mortgagee;
WHEREAS, Mortgagor's obligations under the First Priority Credit
Agreement are secured by, among other things, a mortgage on the Secured Property
(as hereinafter defined) (the "First Priority Mortgage"), which First Priority
Mortgage constitutes a First Priority Lien on the Secured Property;
WHEREAS, pursuant to a Second Priority Credit and Guaranty Agreement,
dated as of the date hereof (as the same may be amended, supplemented, restated
or otherwise modified from time to time, including, but not limited to, any
extension, refinancing, replacement, increase or other restructuring thereof,
the "Credit Agreement"), Mortgagor has requested and Mortgagee, as
administrative agent and collateral agent for the lenders listed therein and
party thereto (the "Lenders"), and the Lenders have agreed to provide a second
priority secured term loan facility to Mortgagor (all capitalized terms used
herein and not otherwise defined shall have the same meanings given to such
terms in the Credit Agreement);
WHEREAS, as a condition to the execution of the Credit Agreement, the
Lenders require and Mortgagor has agreed to grant to Collateral Agent on behalf
of the Lenders, a second priority Lien on the Secured Property pursuant to the
terms of this Instrument, which Lien shall at all times be subject and
subordinate to the First Priority Lien granted to First Priority Mortgage
pursuant to the First Priority Mortgage;
WHEREAS, in order to induce the First Priority Lenders to consent to
Mortgagor entering into the Credit Agreement and to induce the First Priority
Lenders to extend credit and other financial accommodations and lend monies to
or for the benefit of Mortgagor, and its subsidiaries, the Collateral Agent, on
behalf of the Lenders, has agreed to the subordination, intercreditor and other
provisions set forth in the Intercreditor Agreement, dated the date hereof (as
the same may be amended, supplemented, restated or otherwise modified from time
to time, the "Intercreditor Agreement");
WHEREAS, Mortgagor intends these Recitals to be a material part of this
Instrument; and
WHEREAS, Mortgagee has required the execution of this Instrument as a
condition to the Loan.
NOW, THEREFORE, Mortgagor, in consideration of the Secured Indebtedness
herein recited and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
EXHIBIT J-2
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
irrevocably grants, mortgages, remises, aliens, assigns, and conveys to
Mortgagee and Mortgagee's successors and assigns, subject to the further terms
of this Instrument, all of the Mortgagor's right, title, and interest
(thereunder or otherwise) in and to the following (all of the following being
hereinafter referred to as the "Secured Property"):
ALL THOSE TRACTS OR PARCELS OF LAND being more particularly described
in Exhibit A attached hereto; together with all right, title, and interest of
Mortgagor, including any after-acquired title or reversion, in and to the
rights-of-ways, streets, and alleys adjacent thereto, all easements, and
licenses, appertaining thereto, all strips and gores of land adjacent thereto,
all vaults, sewers, sewer rights, waters, water courses, water rights and
powers, pumps, pumping plants, pipes, flumes, and ditches appertaining thereto,
all oil, gas, and other minerals located thereunder, all shrubs, crops, trees,
timber and other emblements now or hereafter located thereon, and all estates,
rights, titles, interests, privileges, liberties, tenements, hereditaments, and
appurtenances whatsoever, in any way belonging, relating to, or appertaining to
any of the foregoing (collectively hereinafter referred to as the "Land");
TOGETHER WITH all fixtures, buildings, structures, parking areas,
landscaping, and other improvements of every nature now or hereafter situated,
erected, or placed on the Land and all appurtenances and additions thereto and
substitutions or replacements thereof, including, but not limited to, all
building materials, screens, awnings, shades, blinds, curtains, draperies,
carpets, rugs, furniture and furnishings, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, incinerating and elevator plants,
vacuum cleaning systems, call systems, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, motors, machinery, pipes,
appliances, and fittings (collectively hereinafter referred to as the
"Improvements");
TOGETHER WITH all right, title and interest of Mortgagor in and to all
policies of insurance and all condemnation proceeds, which in any way now or
hereafter belong, relate, or appertain to the Land, or the Improvements, or any
part thereof;
TOGETHER WITH all present and future leases, tenancies, occupancies,
and licenses, and guaranties thereof, whether written or oral ("Leases"), of the
Land or the Improvements or any part thereof, and all income, rents, accounts
receivable, issues, royalties, profits, revenues, security deposits, and other
benefits of the Land or the Improvements, from time to time accruing,
(hereinafter collectively referred to as the "Revenues");
TOGETHER WITH all proceeds, products, substitutions, and accessions of
the foregoing of every type.
TO HAVE AND TO HOLD the Secured Property and all parts, rights,
members, and appurtenances thereof, in fee simple, unto Mortgagee and its
successors and assigns forever.
THIS INSTRUMENT is given to secure the following obligations
(collectively, the "Secured Indebtedness") in such order of priority as may be
determined pursuant to the Credit Agreement and the Intercreditor Agreement:
(i) all obligations and liabilities of every nature of Mortgagor
now or hereafter existing under or arising out of or in connection with the
Credit Agreement and the other Credit Documents;
(ii) all obligations and liabilities of every nature of the
Guarantors now or hereafter existing under or arising out of or in connection
with the Credit Agreement and the other Credit Documents to which it may become
a party;
EXHIBIT J-3
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
(iii) any and all future advances made pursuant to the Credit
Agreement by the Lenders to or for the benefit of Mortgagor or any Guarantor,
direct or indirect, together with interest, fees, costs, and other amounts
hereafter arising;
(iv) the full and prompt payment and performance of any and all
other "Obligations" (as defined in the Credit Agreement) and covenants of
Mortgagor and Guarantors to Mortgagee and the Lenders under the terms of any
other agreements, assignments or other instruments now or hereafter evidencing,
securing or otherwise relating to the indebtedness evidenced by the Credit
Agreement, including, without limitation, any assignment of rents and leases
given by Mortgagor or any Guarantor to Mortgagee;
(v) any and all additional advances made by the Lenders to protect
or preserve the Secured Property or the lien hereof on the Secured Property, or
to pay taxes, to pay premiums on insurance on the Secured Property or to repair
or maintain the Secured Property, or to complete improvements on the Secured
Property (whether or not the original Mortgagor remains the owner of the Secured
Property at the time of such advances and whether or not the original Lenders
remain the owner of the Secured Indebtedness and this Instrument); and
(vi) any and all expenses incident to the collection of the Secured
Indebtedness and the foreclosure hereof by action in any court or by exercise of
the power of sale herein contained, including, without limitation, reasonable
attorneys' fees and costs of collection actually incurred.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, MORTGAGOR AND MORTGAGEE
ACKNOWLEDGE AND AGREE THAT THE MORTGAGEE'S AMOUNT OF RECOVERY IS LIMITED TO
$___________________.
THIS INSTRUMENT is given for the purpose of creating a lien on real
property in order to secure future advances under the Credit Agreement, whether
such advances are obligatory or to be made at the option of the Lenders, or
otherwise, and whether made before or after default or maturity or other similar
events, to the same extent as if such future advances were made on the date of
the execution hereof, even if no advance was made at the time of such execution.
The lien of this Instrument, as to third persons, with or without actual
knowledge hereof, shall be valid as to all such indebtedness and such future
advances, from the date of recordation of this Instrument, shall have priority.
THIS INSTRUMENT shall be voided only upon (i) the complete repayment
and satisfaction of all Secured Indebtedness and (ii) the termination of the
Credit Agreement pursuant to the terms thereof or the written agreement of the
Lenders and Mortgagor.
All the personal property which comprises a part of the Secured
Property shall, as far as permitted by law, be deemed to be affixed to the
aforesaid Land and conveyed therewith. To the extent any portion of the Secured
Property is not or may not be deemed to be affixed to the Land, this Instrument
shall be considered to be a security agreement which creates a security interest
in such items for the benefit of the Mortgagee. In that regard, to secure the
Secured Indebtedness the Mortgagor grants to the Mortgagee such a security
interest with all of the rights and remedies of a secured party under the
Uniform Commercial Code of the State in which the Land is located ("Uniform
Commercial Code").
Mortgagor further covenants and agrees with Mortgagee as follows:
EXHIBIT J-4
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
ARTICLE 1
Covenants of Mortgagor
Section 1.1 Title to the Secured Property. Mortgagor warrants that: (i)
it has title to the Secured Property in fee simple subject only to such
encumbrances approved and permitted by Mortgagee in Schedule B, Section 2 of the
Commitment for Title Insurance issued by Commonwealth Land Title Insurance
Company with respect to the Secured Property (the "Permitted Encumbrances") and
other Liens permitted by the Credit Agreement; (ii) it has full power and lawful
authority to encumber the Secured Property in the manner and form herein set
forth; (iii) it owns or will own all Improvements; (iv) this Instrument creates
a valid and enforceable security title, security interest, and lien on the
Secured Property; and (v) it will preserve such title, and will forever warrant
and defend the same to Mortgagee and will forever warrant and defend the
validity and priority of the lien hereof against the claims of all persons and
parties whomsoever.
Section 1.2 Maintenance of the Secured Property. Except as permitted by
the Credit Agreement, Mortgagor shall maintain the Secured Property in good
repair (normal wear and tear excepted) and shall comply with the requirements of
any governmental authority claiming jurisdiction over the Secured Property.
Mortgagor shall not, without the prior written consent of Mortgagee, threaten,
commit, permit, or suffer to occur any waste, material alteration, demolition,
or removal of the Secured Property or any part thereof, except as permitted by
the Credit Agreement.
Section 1.3 Insurance; Restoration. Mortgagor shall maintain insurance
with respect to the Secured Property in accordance with the requirements set
forth in the Credit Agreement, with Mortgagee named as loss payee and additional
insured. All proceeds of insurance policies maintained hereunder shall be
applied in accordance with the terms of the Credit Agreement.
Section 1.4 Taxes and Other Charges. Except as otherwise provided by
the Credit Agreement, including, without limitation, Mortgagor's right to
contest charges, taxes and claims contained in Section 5.3 of the Credit
Agreement, Mortgagor shall pay and discharge prior to the delinquency date
thereof all taxes of every kind and nature, all water charges, sewer rents and
assessments, levies, permits, inspection and license fees, and all other charges
imposed upon or assessed against the Secured Property or any part thereof or
upon the revenues, rents, issues, income, and profits of the Secured Property
and, unless Mortgagor is making monthly deposits with Mortgagee in accordance
with Section 1.11 hereof, Mortgagor shall exhibit to Mortgagee validated
receipts (or other commercially reasonable evidence of payment) showing the
payment of such taxes, assessments, water charges, sewer rents, levies, fees,
and other charges which may be or become a lien on the Secured Property within
ten (10) days after Mortgagee's request therefor. Should Mortgagor default in
the payment of any of the foregoing taxes, assessments, water charges, sewer
rents, or other charges, Mortgagee may, but shall not be obligated to, pay the
same or any part thereof, and amounts so paid shall be secured by this
Instrument, and Mortgagor shall, on demand, reimburse Mortgagee for all amounts
so paid.
Section 1.5 Mechanics' and Other Liens. Except as otherwise provided by
the Credit Agreement, Mortgagor shall pay, from time to time when the same shall
become due, all lawful claims and demands of mechanics, materialmen, laborers,
and others which, if unpaid, might result in, or permit the creation of, a lien
or claim of lien on the Secured Property or any part thereof and, in general,
Mortgagor shall do, or cause to be done, at the cost of Mortgagor and without
expense to Mortgagee, everything necessary to fully preserve the lien of this
Instrument. In the event Mortgagor fails to make payment of such claims and
demands, Mortgagee may, but shall not be obligated to, make payment thereof, and
all sums so expended shall be secured by this Instrument, and Mortgagor shall,
on demand, reimburse Mortgagee for all sums so expended.
Section 1.6 Condemnation Awards. Mortgagor, immediately upon written
notice of the institution of any proceedings for the condemnation of the Secured
Property or any portion thereof, will notify
EXHIBIT J-5
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
Mortgagee of the pendency of such proceedings. Mortgagee may participate in any
such proceedings and Mortgagor from time to time will deliver to Mortgagee all
instruments requested by it to permit such participation. All awards and
compensation for condemnation or other taking or purchase in lieu thereof, of
the Secured Property or any part thereof, are hereby assigned to and shall be
paid to Mortgagee. Mortgagor hereby authorizes Mortgagee to collect and receive
such awards and compensation; and, to give proper receipts and acquittances
therefor. All such awards and compensation shall be applied in the same manner
as provided in the Credit Agreement relating to insurance proceeds. Mortgagor,
upon request by Mortgagee, shall make, execute, and deliver any and all
instruments requested for the purpose of confirming the assignment of the
aforesaid awards and compensation to Mortgagee free and clear of any liens,
charges, or encumbrances of any kind or nature whatsoever.
Section 1.7 Costs of Defending and Upholding the Lien. If any action or
proceeding is commenced to which action or proceeding Mortgagee is made a party
or in which it becomes necessary for Mortgagee to defend or uphold the lien of
this Instrument, Mortgagor shall, on demand, reimburse Mortgagee for all
reasonable expenses (including, without limitation, reasonable attorneys' fees
and appellate attorneys' fees) actually incurred by Mortgagee in any such action
or proceeding and all such expenses shall be secured by this Instrument. In any
action or proceeding to foreclose this Instrument or to recover or collect the
Secured Indebtedness, the provisions of law relating to the recovering of costs,
disbursements and allowances shall prevail unaffected by this covenant, provided
that any such recovery shall not exceed Mortgagee's reasonable, actual
out-of-pocket fees and expenses.
Section 1.8 Additional Advances and Disbursements. Mortgagor shall pay
when due all payments and charges on all mortgages, deeds of trust, deeds to
secure debt, security agreements, liens, encumbrances, ground and other leases,
and security interests which may be or become superior or inferior to the lien
of this Instrument, and in default thereof, Mortgagee shall have the right, but
shall not be obligated, to pay, without notice to Mortgagor, such payments and
charges, and Mortgagor shall, on demand, reimburse Mortgagee for amounts so
paid. In addition, upon default of Mortgagor in the performance of any other
terms, covenants, conditions, or obligations by it to be performed under any
such prior or subordinate lien, encumbrance, lease, or security interest,
Mortgagee shall have the right, but shall not be obligated, to cure such default
in the name and on behalf of Mortgagor. All sums advanced and expenses incurred
at any time by Mortgagee pursuant to this Section 1.8 or as otherwise provided
under the terms and provisions of this Instrument or under applicable law shall
bear interest from the date that such sum is advanced or expense incurred, to
and including the date of reimbursement, computed at the "Default Rate" as
provided in the Credit Agreement (herein called the "Default Rate").
Section 1.9 Costs of Enforcement. Mortgagor agrees to bear and pay all
expenses (including reasonable attorneys' fees and all costs of collection) of
or incidental to the perfection and enforcement of any provision hereof, or the
enforcement, compromise, or settlement of this Instrument or the Secured
Indebtedness, and for the curing thereof, or for defending or asserting the
rights and claims of Mortgagee in respect thereof, by litigation or otherwise.
All rights and remedies of Mortgagee shall be cumulative and may be exercised
singly or concurrently. Notwithstanding anything herein contained to the
contrary, Mortgagor: (a) will not (i) at any time insist upon, or plead, or in
any manner whatsoever claim or take any benefit or advantage of any stay or
extension or moratorium law, any exemption from execution or sale of the Secured
Property or any part thereof, wherever enacted, now or at any time hereafter in
force, which may affect the covenants and terms of performance of this
Instrument, nor (ii) claim, take, or insist upon any benefit or advantage of any
law now or hereafter in force providing for the valuation or appraisal of the
Secured Property, or any part thereof, prior to any sale or sales thereof which
may be made pursuant to any provision herein, or pursuant to the decree,
judgment, or order of any court of competent jurisdiction, nor (iii) after any
such sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to redeem the property so sold or any part thereof; (b) hereby
expressly waives all benefit or advantage of any such law or laws; and (c)
covenants not to hinder, delay, or impede the execution of any power herein
granted or delegated to Mortgagee, but to suffer and permit the execution of
every power as though no such law or laws had been made or enacted. Mortgagor,
for itself
EXHIBIT J-6
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
and all who may claim under it, waives, to the extent that it lawfully may, all
right to have the Secured Property marshaled upon any foreclosure hereof.
Section 1.10 Intangible and Other Taxes. Mortgagor shall pay any and
all taxes, charges, filing, registration and recording fees, excises, and levies
imposed upon Mortgagee by reason of its ownership of this Instrument and the
other Credit Documents, or by reason of the recording or filing thereof, or any
security instrument supplemental hereto, any security instrument or Uniform
Commercial Code financing statement with respect to any fixtures or personal
property owned by Mortgagor at the Secured Property and any instrument of
further assurance (other than income, franchise and doing business taxes), and
shall pay all stamp or intangible taxes and other taxes required to be paid on
any of the Credit Documents. In the event Mortgagor fails to make such payment
after demand by Mortgagee then Mortgagee shall have the right, but shall not be
obligated, to pay the amount due, and Mortgagor shall, on demand, reimburse
Mortgagee for said amount, and until so paid said amount shall become part of
the Secured Indebtedness. The provisions of this Section shall survive the
repayment of the Secured Indebtedness.
Section 1.11 Escrow Deposits. At Mortgagee's request at any time after
an Event of Default (as hereinafter defined) has occurred, Mortgagor shall
deposit with Mortgagee, monthly, one twelfth (1/12th) of the insurance premiums
and real estate taxes, assessments, water, sewer, and other charges which might
become a lien upon the Secured Property. In addition, if required by Mortgagee
at any time after an Event of Default has occurred, Mortgagor shall
simultaneously therewith deposit with Mortgagee a sum of money which together
with the monthly installments aforementioned will be sufficient to make each of
the payments aforementioned at least thirty (30) days prior to the date such
payments are deemed delinquent; provided, however, with respect to ad valorem
taxes and tangible personal property taxes, Mortgagor shall simultaneously
therewith deposit with Mortgagee a sum of money which together with the monthly
installments aforementioned will be sufficient to make the ad valorem taxes and
tangible personal property taxes payments in November of the applicable tax
year. Should said charges not be ascertainable at the time any deposit is
required to be made with Mortgagee, the deposit shall be made on the basis of
the charges for the prior year, and when the charges are fixed for the then
current year, Mortgagor shall deposit any deficiency with Mortgagee. All funds
so deposited with Mortgagee shall be held by it without interest, may be
commingled by Mortgagee with its general funds and shall be applied in payment
of the charges aforementioned when and as payable, to the extent Mortgagee shall
have such funds on hand. If deposits are being made with Mortgagee, Mortgagor
shall furnish Mortgagee with bills for the charges for which such deposits are
required to be made hereunder and/or such other documents necessary for the
payment of same, at least fifteen (15) days prior to the date on which the
charges first become payable. In the event Mortgagor fails to pay any such
amount, Mortgagee may, but shall not be obligated to, make payment thereof, and
Mortgagor shall, on demand, reimburse Mortgagee for all sums so expended, and
until Mortgagee has been so reimbursed, such amount shall be added to the
Secured Indebtedness. As long as that certain Mortgage and Security Agreement
and Assignment of Leases and Rents dated as of even date from Mortgagor in favor
of the First Priority Mortgagee (the "Prior Instrument") remains of record and
is not released, Mortgagee will not enforce its rights under this Section 1.11.
Section 1.12 TRANSFER OF THE SECURED PROPERTY. EXCEPT AS PERMITTED BY
THE CREDIT AGREEMENT OR THE INTERCREDITOR AGREEMENT, MORTGAGOR SHALL NOT SELL,
TRANSFER, PLEDGE, ENCUMBER, CREATE A SECURITY INTEREST IN, OR OTHERWISE
HYPOTHECATE, ALL OR ANY PORTION OF THE SECURED PROPERTY, OR ANY ASSETS INCLUDED
THEREIN, WITHOUT THE PRIOR WRITTEN CONSENT OF MORTGAGEE. THE CONSENT BY
MORTGAGEE TO ANY SALE, TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY
INTEREST IN, OR OTHER HYPOTHECATION OF, ANY PORTION OF THE SECURED PROPERTY
SHALL NOT BE DEEMED TO CONSTITUTE A NOVATION OR A CONSENT TO ANY FURTHER SALE,
TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY INTEREST IN OR OTHER
HYPOTHECATION, OR TO WAIVE THE RIGHT OF MORTGAGEE, AT ITS OPTION, TO DECLARE THE
SECURED INDEBTEDNESS IMMEDIATELY DUE AND PAYABLE, WITHOUT NOTICE TO MORTGAGOR OR
ANY OTHER PERSON OR ENTITY, UPON ANY SUCH SALE,
EXHIBIT J-7
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY INTEREST OR OTHER
HYPOTHECATION TO WHICH MORTGAGEE SHALL NOT HAVE CONSENTED.
Section 1.13 Leases, Contracts, Etc. In addition to, and cumulatively
with, all assignments, rights, and remedies granted by Mortgagor to Mortgagee in
any assignment of leases and rents now or hereafter executed by Mortgagor to
Mortgagee in respect of the Secured Property, Mortgagor hereby further agrees as
follows:
(a) Mortgagor does hereby assign to Mortgagee, the Leases
and Revenues (reserving only to Mortgagor the right to collect currently due and
payable Revenues so long as no Event of Default has occurred and is continuing
hereunder), and Mortgagor agrees to execute and deliver to Mortgagee such
additional instruments, in form and substance reasonably satisfactory to
Mortgagee, as may hereafter be requested by Mortgagee further to evidence and
confirm said assignment; provided, however, that acceptance of any such
assignment shall not be construed to impose upon Mortgagee any obligation with
respect to any Lease (including, without limitation, any liability under the
covenant of quiet enjoyment contained in any lease or in any law of any
applicable state in the event that any lessee shall have been joined as a party
defendant in any action to foreclose this Instrument and shall have been barred
and foreclosed thereby of all right, title, and interest and equity of
redemption in the Secured Property). Mortgagor shall not cancel or permit the
cancellation of any Lease, or materially modify or amend any Lease affecting the
Secured Property, or accept, or permit to be made, any prepayment of any
installment of rent or fees thereunder (except for security deposits and the
usual prepayment of rent which results from the acceptance by a landlord on the
first day of each month of the rent for that month). Mortgagor shall faithfully
keep and perform, or cause to be kept and performed, all of the covenants,
conditions and agreements contained in each of said instruments, now or
hereafter existing, on the part of Mortgagor to be kept and performed and shall
at all times do all things reasonably necessary to compel performance by each
other party to said instruments of all obligations, covenants and agreements by
such other party to be performed thereunder.
(b) Mortgagor shall not execute an assignment of the
Leases or Revenues, or any part thereof unless Mortgagee shall first consent to
such assignment and unless such assignment shall expressly provide that it is
subordinate to the collateral assignment contained in this Instrument and any
collateral assignment executed pursuant hereto or concerning the Secured
Indebtedness.
(c) Mortgagor shall furnish to Mortgagee, within twenty
(20) days after a written request by Mortgagee to do so, a sworn statement
setting forth the names of all lessees and tenants of the Secured Property, the
terms of their respective Leases, the space occupied, and the rentals payable
thereunder, and stating to Mortgagor's best knowledge whether any material
defaults, off-sets or defenses exist in connection with any of said Leases. Any
and all Leases, entered into after the date of this Instrument shall provide for
giving by the lessees or tenants thereunder of certificates with respect to the
status of such Leases and Mortgagor shall exercise Mortgagor's right to request
such certificates promptly upon any demand therefor by Mortgagee. Mortgagor
shall provide Mortgagee with a copy of any written notice of default received by
it from any tenant under any Lease.
(d) Mortgagee shall have the absolute and continuing
right, at all times hereafter, to review and approve any and all Leases and any
other contracts, licenses or permits which, pursuant to their operation and
effect, will (or are reasonably likely to) affect, the Secured Property, or any
part thereof, and any and all modifications to existing agreements, licenses,
and permits which are proposed to be entered into subsequent to the date of this
Instrument prior to their execution and delivery by Mortgagor. Without limiting
the generality of the foregoing, and in any event, each such Lease, shall
contain a provision that the rights of the parties thereunder are expressly
subordinate to all of the rights and title of Mortgagee under this Instrument.
EXHIBIT J-8
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
Section 1.14 Estoppel Certificates. Mortgagor, within twenty (20) days
after receipt of written request, shall furnish to Mortgagee a written
statement, duly acknowledged, setting forth to its knowledge the amount due
under this Instrument, the terms of payment and maturity date related to all
amounts advanced pursuant to or outstanding under the Credit Agreement, the date
to which interest has been paid, whether any offsets or defenses exist against
the Secured Indebtedness and, if any are alleged to exist, the nature thereof
shall be set forth in detail.
Section 1.15 Security Deposits. To the extent required by law or, after
an Event of Default has occurred and during its continuance, if required by
Mortgagee, all security deposits of tenants of the Secured Property shall be
treated as trust funds not to be commingled with any other funds of Mortgagor.
Within twenty (20) days after request by Mortgagee, Mortgagor shall furnish
satisfactory evidence of compliance with this Section 1.15, as necessary,
together with a statement of all security deposits deposited by the tenants and
copies of all Leases not theretofore delivered to Mortgagee, certified by
Mortgagor.
Section 1.16 Indemnity. Mortgagor shall indemnify and hold Mortgagee
harmless from and against any and all suits, actions, claims, proceedings
(including third party proceedings), damages, losses, liabilities, and expenses
(including, without limitation, reasonable attorneys' fees) which may be
incurred by or asserted against Mortgagee as the result of its having made loans
and advances to Mortgagor, including, but not limited to, claims for brokerage
commissions or finder's fees for arranging such loans and advances, claims of
persons claiming mechanics' or similar liens, claims of tenants of the Secured
Property, claims for recording taxes, filing fees, transfer taxes and similar
claims relating to this Instrument, claims for the actual or threatened release
of any "Hazardous Materials" (as defined in the Credit Agreement) from, on,
under, or to any of the Secured Property (occurring or arising from events
occurring prior to the cancellation of or sale under this Instrument) or the
violation by Mortgagor of any law or regulation related to the manufacture,
handling, treatment, storage, or disposal of any Hazardous Materials. The
foregoing indemnities shall survive full payment of the Secured Indebtedness,
the foreclosure of this Instrument, any transfer of the Secured Property, and
any and all other events relating to the foregoing.
ARTICLE 2
Default and Remedies
Section 2.1 Events of Default. The occurrence of an "Event of Default"
(as that term is defined in the Credit Agreement) under the Credit Agreement or
a default with respect to any of Mortgagor's covenants, representations, or
warranties given herein which remains unremedied for twenty (20) days or more
after notice from Mortgagee, subject to any limitations in the Credit Agreement
on the right of the Mortgagor to receive notices of default and provided that no
such cure period is provided with respect to amounts due under the Notes at
maturity, a failure to maintain insurance as required in Section 1.3, any
default under Section 1.12 or any default excluded from any provision for cure
of defaults contained in the Credit Agreement, or any other Credit Documents
securing the Secured Indebtedness, shall constitute an "Event of Default"
hereunder.
Section 2.2 Remedies.
(a) Upon the occurrence of any Event of Default and
during its continuance, Mortgagee may take such action, without notice or
demand, as it deems advisable to protect and enforce its rights against
Mortgagor and in and to the Secured Property. Without limitation of the
foregoing and subject in each case to the terms of the Intercreditor Agreement,
Mortgagee may take any of the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such order as Mortgagee may
determine, in its sole discretion, without impairing or otherwise affecting the
other rights and remedies of Mortgagee hereunder, under the other Credit
Documents, and at law: (1) declare the entire unpaid Secured Indebtedness to be
immediately due and payable; or (2) notify all tenants of the Secured Property
and all others obligated on the
EXHIBIT J-9
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
Leases that all rents and other sums owing on the Leases have been assigned to
Mortgagee and are to be paid directly to Mortgagee, and to enforce payment of
all obligations owing on the Leases, by suit, ejectment, cancellation,
releasing, reletting, or otherwise, whether or not Mortgagee has taken
possession of the Secured Property, and to exercise whatever rights and remedies
Mortgagee may have under any assignment of rents and leases; or (3) enter into
or upon the Secured Property, either personally or by its agents, nominees or
attorneys and dispossess Mortgagor and its agents and servants therefrom, and
thereupon Mortgagee may (i) use, operate, manage, control, insure, maintain,
repair, restore, and otherwise deal with all and every part of the Secured
Property and conduct business thereat; (ii) complete any construction on the
Secured Property in such manner and form as Mortgagee deems advisable in the
reasonable exercise of its judgment; (iii) exercise all rights and power of
Mortgagor with respect to the Secured Property, whether in the name of
Mortgagor, or otherwise, including, without limitation, the right to make,
cancel, enforce, or modify leases, obtain and evict tenants, and demand, ▇▇▇
for, collect, and receive all Revenues, which rights shall not be in limitation
of Mortgagee's rights under any assignment of rents and leases securing the
Secured Indebtedness; and (iv) apply the Revenues to the payment of the Secured
Indebtedness, after deducting therefrom all expenses incurred in connection with
the aforesaid operations (including reasonable attorney fees and just and
reasonable compensation for the services of Mortgagee and its agents and
employees) and all amounts necessary to pay the taxes, assessments, insurance,
and other charges in connection with the Secured Property; or (4) institute
proceedings for the complete foreclosure of this Instrument either at law, or
equity, in which case Mortgagee may bid upon and purchase the Secured Property
and the Secured Property may be sold for cash or upon credit in one or more
parcels; or (5) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Instrument for the portion of the Secured Indebtedness then
due and payable (if Mortgagee shall have elected not to declare the entire
Secured Indebtedness to be immediately due and owing), subject to the continuing
lien of this Instrument for the balance of the Secured Indebtedness not then
due; or (6) sell for cash or upon credit the Secured Property or any part
thereof and all estate, claim, demand, right, title, and interest of Mortgagor
therein and rights of redemption thereof, pursuant to power of sale or
otherwise, at one or more sales, as an entity or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or
permitted by law, and in the event of a sale, by foreclosure or otherwise, of
less than all of the Secured Property, this Instrument shall continue as a lien
on the remaining portion of the Secured Property; or (7) institute an action,
suit or proceeding in equity for the specific performance of any covenant,
condition or agreement contained herein or in any Credit Document; or (8) to the
extent permitted by applicable law, recover judgment on the Credit Agreement
either before, during or after any proceedings for the enforcement of this
Instrument; or (9) as a matter of strict right, obtain from any court of
competent jurisdiction the appointment of a trustee, receiver, liquidator, or
conservator of the Secured Property, without regard for the adequacy of the
security for the Secured Indebtedness and without regard for the solvency of
Mortgagor, or any other person, firm or other entity liable for the payment of
the Secured Indebtedness, and without regard for any other statutory or common
law requirements otherwise applicable to the appointment of a trustee, receiver,
liquidator, or conservator; or (10) pay or perform any default in the payment,
performance, or observance of any term, covenant or condition of this
Instrument, and all payments made or costs or expenses incurred by Mortgagee in
connection therewith, shall be secured hereby and shall be, without demand,
immediately repaid by Mortgagor to Mortgagee with interest thereon the necessity
for any such actions and of the amounts to be paid to be in the sole judgment of
Mortgagee, and Mortgagee may enter and authorize others to enter upon the
Secured Property or any part thereof for the purpose of performing or observing
any such defaulted term, covenant, or condition without thereby becoming liable
to Mortgagor or any person in possession holding under Mortgagor; or (11) pursue
any remedy with respect to the Secured Property available to a secured party
under the Uniform Commercial Code; or (12) pursue such other remedies as
Mortgagee may have under applicable law, in equity or under this Instrument, the
Credit Agreement, or any of the other Credit Documents.
(b) Subject to the terms of the Intercreditor Agreement,
the purchase money proceeds or avails of any sale made under or by virtue of
this Article 2, together with any other sums which then may be held by Mortgagee
under this Instrument, whether under the provisions of this Article 2 or
otherwise, shall be applied to the Secured Indebtedness in the order provided in
the Credit Agreement.
EXHIBIT J-10
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
(c) Subject to the terms of the Intercreditor Agreement,
Mortgagee may adjourn from time to time any sale by it to be made under or by
virtue of this Instrument by announcement at the time and place appointed for
such sale or for such adjourned sale or sales; and, except as otherwise provided
by any applicable provision of law, Mortgagee, without further notice or
publication, may make such sale at the time and place to which the same shall be
so adjourned.
(d) Upon the completion of any sale or sales made by
Mortgagee under or by virtue of this Article 2, Mortgagee, or an officer of any
court empowered to do so, shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument, or good and sufficient instruments,
conveying, assigning, and transferring all estate, right, title, and interest in
and to the property and rights sold. Subject to the terms of the Intercreditor
Agreement, Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, such appointment being coupled with an interest, in its
name and stead, to make all necessary conveyances, assignments, transfers, and
deliveries of the Secured Property and rights so sold and for that purpose
Mortgagee may execute all necessary instruments of conveyance, assignment, and
transfer, and may substitute one or more persons with like power, Mortgagor
hereby ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof. Any such sale or sales made
under or by virtue of this Article 2, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, shall operate to divest all the estate, right,
title, interest, claim, and demand whatsoever, whether at law or in equity, of
Mortgagor in and to the properties and rights so sold, and shall be a perpetual
bar both at law and in equity against Mortgagor and against any and all persons
claiming or who may claim the same, or any part thereof from, through or under
Mortgagor.
(e) In the event of any sale made under or by virtue of
this Article 2 (whether made by virtue of judicial proceedings or of a judgment
or decree of foreclosure and sale) the entire Secured Indebtedness, if not
previously due and payable, immediately thereupon shall, anything in the Credit
Agreement, this Instrument, or any other Credit Document to the contrary
notwithstanding, become due and payable.
(f) Upon any sale made under or by virtue of this Article
2 (whether made by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale), Mortgagee, may bid for and acquire the Secured Property
or any part thereof and in lieu of paying cash therefor may make settlement for
the purchase price by crediting upon the Secured Indebtedness the net sales
price after deducting therefrom the expenses of the sale and the costs of the
action and any other sums which Mortgagee is authorized to deduct under this
Instrument.
(g) No recovery of any judgment by Mortgagee and no levy
of an execution under any judgment upon the Secured Property or upon any other
property of Mortgagor shall affect in any manner or to any extent, the lien and
title of this Instrument upon the Secured Property or any part thereof, or any
liens, titles, rights, powers or remedies of Mortgagee hereunder, but such
liens, titles, rights, powers and remedies of Mortgagee shall continue
unimpaired as before.
(h) Mortgagor agrees, to the fullest extent permitted by
law, that upon the occurrence of an Event of Default, neither Mortgagor nor
anyone claiming through or under it shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension, homestead, exemption
or redemption laws now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Instrument, or the absolute sale of the
Secured Property, or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereat, and Mortgagor, for
itself and all who may at any time claim through or under it, hereby waives to
the full extent that it may lawfully so do, the benefit of all such laws, and
any and all right to have the assets comprised in the security intended to be
created hereby marshaled upon any foreclosure of the lien or title hereof.
EXHIBIT J-11
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
(i) The failure to make any such tenants of the Secured
Property party to any such foreclosure proceedings and to foreclose their rights
will not be, nor be asserted to be by Mortgagor, a defense to any proceedings
instituted by Mortgagee to collect the sums secured hereby.
Section 2.3 Possession of the Secured Property. Upon any foreclosure of
the Secured Property, it is agreed that the then owner of the Secured Property,
if it is the occupant of the Secured Property or any part thereof, shall
immediately surrender possession of the Secured Property so occupied to
Mortgagee, and if such occupant is permitted to remain in possession, the
possession shall be as tenant of Mortgagee and, on demand, such occupant (a)
shall pay to Mortgagee monthly, in advance, a reasonable rental for the space so
occupied, and (b) in default thereof may be dispossessed by the usual summary
proceedings. The covenants herein contained may be enforced by a receiver of the
Secured Property or any part thereof. Nothing in this Section 2.3 shall be
deemed to be a waiver of the provisions of this Instrument prohibiting the sale
or other disposition of the Secured Property without Mortgagee's consent.
Section 2.4 Mortgagor's Actions After Default. Nothing herein shall be
deemed to require the commencement of a suit or the consent of Mortgagor as a
condition precedent for Mortgagee's right to the appointment of a receiver or
the exercise of any other rights or remedies available to Mortgagee.
Section 2.5 Control by Mortgagee After Default. Notwithstanding the
appointment of any receiver, liquidator, or trustee of Mortgagor, or of any of
its property, or of the Secured Property or any part thereof, Mortgagee shall be
entitled to retain possession and control of all property now and hereafter
covered by this Instrument.
Section 2.6 WAIVER OF MORTGAGOR'S RIGHTS. BY EXECUTION OF THIS
INSTRUMENT, MORTGAGOR EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT OF MORTGAGEE TO
ACCELERATE THE SECURED INDEBTEDNESS EVIDENCED BY THE CREDIT AGREEMENT; (B) TO
THE EXTENT ALLOWED BY APPLICABLE LAW, WAIVES ANY AND ALL RIGHTS WHICH MORTGAGOR
MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES, THE VARIOUS PROVISIONS OF
THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF ANY OTHER APPLICABLE
LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE EXERCISE BY MORTGAGEE OF ANY
RIGHT OR REMEDY HEREIN PROVIDED TO MORTGAGEE; (C) ACKNOWLEDGES THAT MORTGAGOR
HAS READ THIS INSTRUMENT AND ITS PROVISIONS HAVE BEEN EXPLAINED FULLY TO
MORTGAGOR AND MORTGAGOR HAS CONSULTED WITH LEGAL COUNSEL OF MORTGAGOR'S CHOICE
PRIOR TO EXECUTING THIS INSTRUMENT; AND (D) ACKNOWLEDGES THAT ALL WAIVERS OF THE
AFORESAID RIGHTS OF MORTGAGOR HAVE BEEN MADE KNOWINGLY, INTENTIONALLY AND
WILLINGLY BY MORTGAGOR AS PART OF A BARGAINED FOR LOAN TRANSACTION.
ARTICLE 3
Miscellaneous
Section 3.1 Credits Waived. Mortgagor will not claim nor demand nor be
entitled to any credit or credits against the Secured Indebtedness for so much
of the taxes assessed against the Secured Property or any part thereof as is
equal to the tax rate applied to the amount due on this Instrument or any part
thereof, and no deductions shall otherwise be made or claimed from the taxable
value of the Secured Property or any part thereof by reason of this Instrument
or the Secured Indebtedness.
Section 3.2 No Release. Mortgagor agrees, that in the event the Secured
Property is sold with the written consent of Mortgagee and Mortgagee enters into
any agreement with the then owner of the Secured Property extending the time of
payment of the Secured Indebtedness, or otherwise modifying the terms hereof,
EXHIBIT J-12
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
Mortgagor shall continue to be liable to pay the Secured Indebtedness according
to the tenor of any such agreement unless expressly released and discharged in
writing by Mortgagee.
Section 3.3 Notices. All notices hereunder shall be in writing, and
shall be deemed to have been sufficiently given, or served for all purposes when
delivered in accordance with the terms of the Credit Agreement in regard to the
giving of notice.
Section 3.4 Binding Obligations. The provisions and covenants of this
Instrument shall run with the land, shall be binding upon Mortgagor and shall
inure to the benefit of Mortgagee, subsequent holders of this Instrument and
their respective successors and assigns. For the purpose of this Instrument, the
term "Mortgagor" shall mean Mortgagor named herein, any subsequent owner of the
Secured Property, and their respective heirs, executors, legal representatives,
successors and assigns. If there is more than one Mortgagor, all their
undertakings hereunder shall be deemed joint and several.
Section 3.5 Captions. The captions of the Sections of this Instrument
are for the purpose of convenience only and are not intended to be a part of
this Instrument and shall not be deemed to modify, explain, enlarge or restrict
any of the provisions hereof.
Section 3.6 Further Assurances. Mortgagor shall do, execute,
acknowledge and deliver, at the sole cost and expense of Mortgagor, all and
every such further acts, deeds, conveyances, assignments, estoppel certificates,
notices of assignment, transfers and assurances as Mortgagee may reasonably
require from time to time in order to better assure, convey, assign, transfer
and confirm unto Mortgagee, the rights now or hereafter intended to be granted
to Mortgagee under this Instrument, any other instrument executed in connection
with this Instrument or any other instrument under which Mortgagor may be or may
hereafter become bound to convey, transfer or assign to Mortgagee for carrying
out the intention of facilitating the performance of the terms of this
Instrument.
Section 3.7 Severability. Any provision of this Instrument which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
Section 3.8 General Conditions.
(a) All covenants hereof shall be construed as affording
to Mortgagee rights additional to and not exclusive of the rights conferred
under the provisions of applicable laws of the State in which the Land is
located.
(b) This Instrument cannot be altered, amended, modified
or discharged orally and no agreement shall be effective to modify or discharge
it in whole or in part, unless it is in writing and signed by the party against
whom enforcement of the modification, alteration, amendment or discharge is
sought.
(c) No remedy herein conferred upon or reserved to
Mortgagee is intended to be exclusive of any other remedy or remedies, and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute. No delay or omission of Mortgagee in exercising any right or power
accruing upon any Event of Default shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default, or any
acquiescence therein. Acceptance of any payment after the occurrence of an Event
of Default shall not be deemed to waive or cure such Event of Default; and every
power and remedy given by this Instrument to Mortgagee may be exercised from
time to time as often as may be deemed expedient by Mortgagee. Nothing in this
Instrument, in the Credit Agreement or in any other Credit Document shall affect
the obligation of
EXHIBIT J-13
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
Mortgagor to pay the Secured Indebtedness in the manner and at the time and
place therein respectively expressed.
(d) No waiver by Mortgagee will be effective unless it is
in writing and then only to the extent specifically stated. Without limiting the
generality of the foregoing, any payment made by Mortgagee for insurance
premiums, taxes, assessments, water rates, sewer rentals or any other charges
affecting the Secured Property, shall not constitute a waiver of Mortgagor's
default in making such payments and shall not obligate Mortgagee to make any
further payments.
(e) Mortgagee shall have the right to appear in and
defend any action or proceeding, in the name and on behalf of Mortgagor which
Mortgagee, in its discretion, feels may adversely affect the Secured Property or
this Instrument. Mortgagee shall also have the right to institute any action or
proceeding which Mortgagee, in its discretion, feels should be brought to
protect its interest in the Secured Property or its rights hereunder. All costs
and expenses incurred by Mortgagee in connection with such actions or
proceedings, including, without limitation, attorneys' fees and appellate
attorneys' fees, shall be paid by Mortgagor, on demand.
(f) In the event of the passage after the date of this
Instrument of any law of any governmental authority having jurisdiction,
deducting the Secured Indebtedness from the value of the Secured Property for
the purpose of taxation, affecting any lien thereon or changing in any way the
laws of the taxation of mortgages or debts secured by mortgages for federal,
state or local purposes, or the manner of the collection of any such taxes, so
as to affect this Instrument, Mortgagor shall promptly pay to Mortgagee, on
demand, all taxes, costs and charges for which Mortgagee is or may be liable as
a result thereof, provided said payment shall not be prohibited by law or render
any obligations under the Credit Agreement usurious, in which event Mortgagee
may declare the Secured Indebtedness to be immediately due and payable.
(g) Mortgagor acknowledges that it has received a true
copy of this Instrument.
(h) For the purposes of this Instrument, all defined
terms and personal pronouns contained herein shall be construed, whenever the
context of this Instrument so requires, so that the singular shall be construed
as the plural and vice versa and so that the masculine, feminine or neuter
gender shall be construed to include all other genders.
(i) No provision of this Instrument shall be construed
against or interpreted to the disadvantage of Mortgagor or Mortgagee by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have drafted, prepared, structured or dictated such
provision.
(j) Upon receipt of evidence reasonably satisfactory to
Mortgagor of the loss, theft, destruction or mutilation of any note or
instrument evidencing a portion of the Secured Indebtedness, and in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory to Mortgagor or, in the case of any such mutilation,
upon surrender and cancellation of such note or instrument, Mortgagor shall
execute and deliver, in lieu thereof, a replacement note or instrument,
identical in form and substance to the original note or instrument and dated as
of the date of the original note or instrument and upon such execution and
delivery all references in this Instrument and the other Credit Documents to the
original note or instrument shall be deemed to refer to such replacement note or
instrument.
(k) Time is of the essence with respect to each and every
covenant, agreement and obligation of Mortgagor under the Credit Agreement, this
Instrument, and the other Credit Documents.
(l) Whenever the Credit Agreement, this Instrument, or
any other Credit Document requires the consent, approval, waiver, acceptance,
satisfaction or expression of opinion of, or the taking of any
EXHIBIT J-14
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
discretionary act by Mortgagee, the right, power, privilege and option of
Mortgagee to withhold or grant its consent shall not be exhausted by the
exercise thereof on one or more occasions, but shall be a continuing right,
power, privilege and option of Mortgagee with respect to any such matters.
Section 3.9 LEGAL CONSTRUCTION. THE ENFORCEMENT OF THIS INSTRUMENT
SHALL BE GOVERNED, CONSTRUED AND INTERPRETED BY THE LAWS OF THE STATE IN WHICH
THE LAND IS LOCATED. NOTHING IN THIS INSTRUMENT, THE CREDIT AGREEMENT OR IN ANY
OTHER AGREEMENT AMONG MORTGAGOR AND MORTGAGEE SHALL REQUIRE MORTGAGOR TO PAY, OR
MORTGAGEE TO ACCEPT, INTEREST IN AN AMOUNT WHICH WOULD SUBJECT MORTGAGEE TO ANY
PENALTY UNDER APPLICABLE LAW. IN THE EVENT THAT THE PAYMENT OF ANY INTEREST DUE
HEREUNDER OR UNDER THE CREDIT AGREEMENT OR ANY SUCH OTHER AGREEMENT WOULD
SUBJECT MORTGAGEE TO ANY PENALTY UNDER APPLICABLE LAW, THEN AUTOMATICALLY THE
OBLIGATIONS OF MORTGAGOR TO MAKE SUCH PAYMENT SHALL BE REDUCED TO THE HIGHEST
RATE AUTHORIZED UNDER APPLICABLE LAW.
Section 3.10 WAIVER OF JURY TRIAL. MORTGAGOR AND MORTGAGEE, ON BEHALF
OF THEMSELVES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THE CREDIT AGREEMENT, THIS INSTRUMENT, OR UNDER ANY OF THE OTHER
CREDIT DOCUMENTS OR RELATING THERETO.
Section 3.11 State Specific Provisions. This Instrument is governed by
the further provisions set forth on Appendix I attached hereto and made a part
hereof which are incorporated herein as if fully set forth herein.
Section 3.12 Attorney's Fees. Any and all references in this Instrument
to the recovery of attorney's fees by Mortgagee or the Lenders shall be deemed
to refer to reasonable, actual attorney's fees.
Section 3.13 Subordination to Prior Instrument. The Lien herein granted
to the Lenders pursuant to the Credit Agreement is expressly subject and
subordinate to the Liens granted to the First Priority Lenders pursuant to the
First Priority Credit Agreement and the First Priority Mortgage with respect to
all of the Secured Property and to all of the terms, covenants and conditions of
this Instrument and all extensions, renewals, modifications, consolidations,
spreaders or replacements of this Instrument and to any other action permitted
or contemplated by this Instrument and to the assignment of leases made to
Collateral Agent as Mortgagee for the First Priority Lenders as additional
security for the obligations secured by this Instrument, and to any assignment
of any other property rights mortgaged or assigned to the First Priority Lenders
as additional security. Notwithstanding anything to the contrary contained
herein, the Lien and security interest granted to Collateral Agent pursuant to
this Instrument and the exercise of any right or remedy by Collateral Agent
hereunder are subject to the provisions of the Intercreditor Agreement. The
foregoing provisions of this paragraph shall remain in full force and effect for
so long as the First Priority Credit Agreement remains outstanding. In the event
of any conflict between the terms and provisions of the Intercreditor Agreement
and the terms and provisions of this Instrument, the terms and provisions of the
Intercreditor Agreement shall govern and control.
Section 3.14 Secured Property in Multiple Counties. This Instrument may
describe Secured Property in more than one county in the State in which the Land
is located, but will be recorded in the real estate records of each such county.
The Mortgagor acknowledges and agrees that upon the occurrence of an Event of
Default and during its continuance, Mortgagee shall have the right, at its
option, to bring an action to foreclose this Instrument against all or any
portion of the Secured Property it chooses in any such county or
EXHIBIT J-15
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
counties in the State in which any of the Land is located, and Mortgagor
consents to such jurisdiction in any such county or counties.
[EXECUTION ON FOLLOWING PAGE]
EXHIBIT J-16
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
IN WITNESS WHEREOF, Mortgagor has executed this Instrument under seal,
as of the day and year first above written.
CARMIKE CINEMAS, INC., a Delaware corporation
By: ______________________________
___________________________ Name: ________________________
Print Name: _______________ Title: _______________________
___________________________
Print Name: ________________ (CORPORATE SEAL)
EXHIBIT J-17
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
STATE OF ___________
COUNTY OF ___________
The foregoing document was acknowledged before me this ______ day of
February, 2004 by __________________________________, as _______________ of
Carmike Cinemas, Inc., a Delaware corporation, on behalf of the corporation, who
is personally known to me or has produced ____________________________ as
identification.
___________________________________________
NOTARY PUBLIC
Name: _____________________________________
Serial #: _________________________________
My Commission Expires:
EXHIBIT J-18
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT J-19
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
APPENDIX I
STATE SPECIFIC PROVISIONS
1. Future Advances. It is agreed that this Instrument shall also secure
such future or additional advances as may be made by Lenders at its option to
Mortgagor, or its successor in title, for any purpose, provided that all those
advances are to be made within twenty (20) years from the date of this
Instrument, or within such lesser period of time as may be provided hereafter by
law as a prerequisite for the sufficiency of actual notice or record notice of
the optional future or additional advances as against the rights of creditors or
subsequent purchasers for valuable consideration. The total amount of
indebtedness secured by this Instrument may decrease or increase from time to
time, but the total unpaid balance so secured at any one time shall not exceed
twice the original principal amount of the Notes plus interest, and any
disbursements made for the payment of taxes, levies or insurance on the Secured
Property with interest on those disbursements. If, pursuant to Florida Statutes
Section 697.04, Mortgagor files a notice specifying the dollar limit beyond
which future advances made pursuant to this Instrument will not be secured by
this Instrument, then Mortgagor shall, within one day of filing such notice,
notify Mortgagee and its counsel by certified mail pursuant to Paragraph 3.3 of
this Instrument. In addition, such a filing shall constitute a default
hereunder.
2. Stamp and Excise Tax. It is contemplated that the Mortgagor will pay
all applicable documentary stamp taxes with respect to this Mortgage and the
Credit Agreement. If any additional stamp or excise tax shall become applicable
with respect to this Mortgage, the Credit Agreement, any loan or credit extended
hereunder, or any security agreement, guaranty, the loan agreement or other
document, the Mortgagor shall promptly pay such tax in full (including interest
and penalties, if any) and shall hold the Mortgagee harmless with respect
thereto. The Mortgagor's liability under this Paragraph will survive the
repayment of indebtedness under the Credit Agreement.
EXHIBIT ▇-▇-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT K TO
SECOND LIEN CREDIT AGREEMENT
LANDLORD WAIVER AND CONSENT AGREEMENT
This LANDLORD WAIVER AND CONSENT AGREEMENT (this "AGREEMENT") is dated
as of [MM/DD/YY] and entered into by [NAME OF LANDLORD] ("LANDLORD"), to and for
the benefit of NATIONAL CITY BANK., as agent for Lenders (in such capacity
"AGENT").
RECITALS
WHEREAS, [NAME OF GRANTOR], a [TYPE OF PERSON] ("TENANT"), has
possession of and occupies all or a portion of the property described on Exhibit
A annexed hereto (the "PREMISES");
WHEREAS, Tenant's interest in the Premises arises under the lease
agreement (the "LEASE") more particularly described on Exhibit B annexed hereto,
pursuant to which Landlord has rights, upon the terms and conditions set forth
therein, to take possession of, and otherwise assert control over, the Premises;
WHEREAS, reference is made to the Credit and Guaranty Agreement, dated
as of February 4, 2004 (as it may be amended, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among CARMIKE
CINEMAS, INC., a Delaware corporation, as a Borrower, certain Subsidiaries of
the Borrower, as Guarantors, the Lenders party thereto from time to time,
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as Sole Lead Arranger, Sole Bookrunner and
Sole Syndication Agent, and NATIONAL CITY BANK, as Administrative Agent and
Collateral Agent, pursuant to which Tenant has executed a security agreement,
mortgages, deeds of trust, deeds to secure debt and assignments of rents and
leases, and other collateral documents in relation to the Credit Agreement;
WHEREAS, Tenant's repayment of the extensions of credit made by Lenders
under the Credit Agreement will be secured, in part, by all Inventory of Tenant
(including all Inventory of Tenant now or hereafter located on the Premises (the
"SUBJECT INVENTORY")) and all Equipment used in Tenant's business (including all
Equipment of Tenant now or hereafter located on the Premises (the "SUBJECT
EQUIPMENT"; and, together with the Subject Inventory, the "COLLATERAL")); and
WHEREAS, Administrative Agent has requested that Landlord execute this
Agreement as a condition to the extension of credit to Tenant under the Credit
Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Tenant hereby represents and warrants to, and covenants and agrees
with, Administrative Agent as follows:
1. Landlord hereby (a) waives and releases unto Administrative Agent
and its successors and assigns any and all rights granted by or under any
present or future laws to levy or distraint for rent or any other charges which
may be due to Landlord against the Collateral, and any and all other claims,
liens and demands of every kind which it now has or may hereafter have against
the Collateral, and (b) agrees that any rights it may have in or to the
Collateral, no matter how arising (to the extent not effectively waived pursuant
to clause (a) of this paragraph 1), shall be second and subordinate to the
EXHIBIT K-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
rights of Administrative Agent in respect thereof. Landlord acknowledges that
the Collateral is and will remain personal property and not fixtures even though
it may be affixed to or placed on the Premises.
2. Landlord certifies that (a) Landlord is the landlord under the
Lease, (b) the Lease is in full force and effect and has not been amended,
modified, or supplemented except as set forth on Exhibit B annexed hereto, (c)
to the knowledge of Landlord, there is no defense, offset, claim or counterclaim
by or in favor of Landlord against Tenant under the Lease or against the
obligations of Landlord under the Lease, (d) no notice of default has been given
under or in connection with the Lease which has not been cured, and Landlord has
no knowledge of the occurrence of any other default under or in connection with
the Lease, and (e) except as disclosed to Administrative Agent, no portion of
the Premises is encumbered in any way by any deed of trust or mortgage lien or
ground or superior lease.
3. Landlord consents to the installation or placement of the Collateral
on the Premises, and Landlord grants to Administrative Agent a license to enter
upon and into the Premises to do any or all of the following with respect to the
Collateral: assemble, have appraised, display, remove, maintain, prepare for
sale or lease, repair, transfer, or sell (at public or private sale). In
entering upon or into the Premises, Administrative Agent hereby agrees to
indemnify, defend and hold Landlord harmless from and against any and all
claims, judgments, liabilities, costs and expenses incurred by Landlord caused
solely by Administrative Agent's entering upon or into the Premises and taking
any of the foregoing actions with respect to the Collateral. Such costs shall
include any damage to the Premises made by Administrative Agent in severing
and/or removing the Collateral therefrom.
4. Landlord agrees that it will not prevent Administrative Agent or its
designee from entering upon the Premises at all reasonable times to inspect or
remove the Collateral. In the event that Landlord has the right to, and desires
to, obtain possession of the Premises (either through expiration of the Lease or
termination thereof due to the default of Tenant thereunder), Landlord will
deliver notice (the "LANDLORD'S NOTICE") to Administrative Agent to that effect.
Within the 45 day period after Administrative Agent receives the Landlord's
Notice, Administrative Agent shall have the right, but not the obligation, to
cause the Collateral to be removed from the Premises. During such 45 day period,
Landlord will not remove the Collateral from the Premises nor interfere with
Administrative Agent's actions in removing the Collateral from the Premises or
Administrative Agent's actions in otherwise enforcing its security interest in
the Collateral. Notwithstanding anything to the contrary in this paragraph,
Administrative Agent shall at no time have any obligation to remove the
Collateral from the Premises.
5. Landlord shall send to Administrative Agent a copy of any notice of
default under the Lease sent by Landlord to Tenant. In addition, Landlord shall
send to Administrative Agent a copy of any notice received by Landlord of a
breach or default under any other lease, mortgage, deed of trust, security
agreement or other instrument to which Landlord is a party which may affect
Landlord's rights in, or possession of, the Premises.
6. All notices to Administrative Agent under this Agreement shall be in
writing and sent to Administrative Agent at its address set forth on the
signature page hereof by telefacsimile, by United States mail, or by overnight
delivery service.
7. The provisions of this Agreement shall continue in effect until
Landlord shall have received Administrative Agent's written certification that
all amounts advanced under the Credit Agreement have been paid in full.
EXHIBIT K-2
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
8. 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, without regard to
conflicts of laws principles.
[Remainder of page intentionally left blank]
EXHIBIT K-3
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered as of the day and year first set forth above.
[NAME OF LANDLORD]
By: __________________________
Name:
Title:
______________________________
______________________________
______________________________
Attention:
Telecopier:
By its acceptance hereof, as of the day and year first set forth above,
Administrative Agent agrees to be bound by the provisions hereof.
NATIONAL CITY BANK,
as Administrative Agent
By: __________________________
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ #▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Agent Services
Telephone:
Telecopier:
[APPROPRIATE NOTARY BLOCK]
EXHIBIT K-4
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT L TO
SECOND LIEN CREDIT AGREEMENT
INTERCREDITOR AGREEMENT
[TO COME UNDER SEPARATE COVER]
EXHIBIT L-1
EXHIBITS TO SECOND LIEN CREDIT AGREEMENT EXECUTION
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, is dated as of February 4, 2004,
and entered into by and among CARMIKE CINEMAS, INC., a Delaware corporation (the
"COMPANY"), and ▇▇▇▇▇ FARGO FOOTHILL, INC. ("FOOTHILL"), in its capacity as
collateral agent for the First Lien Obligations (as defined below, including its
successors and assigns from time to time (the "FIRST LIEN COLLATERAL AGENT"),
and NATIONAL CITY BANK ("NATIONAL CITY"), in its capacity as collateral agent
for the Second Lien Obligations (as defined below, including its successors and
assigns from time to time (the "SECOND LIEN COLLATERAL AGENT"). Capitalized
terms used herein but not otherwise defined herein have the meanings set forth
in Section 1 below.
RECITALS
WHEREAS, the Company, certain Subsidiaries of Company, the
lenders party thereto, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as Sole Lead
Arranger, Sole Bookrunner and Sole Syndication Agent, and Foothill, as
Administrative Agent and Collateral Agent, have entered into that Credit and
Guaranty Agreement dated as of the date hereof providing for a revolving credit
facility (as amended, restated, supplemented, modified or Refinanced from time
to time, the "FIRST LIEN CREDIT AGREEMENT");
WHEREAS, the Company, certain Subsidiaries of Company, the
lenders party thereto, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS, L.P., as Sole Lead
Arranger, Sole Bookrunner and Sole Syndication Agent, and National City, as
Administrative Agent and Collateral Agent, have entered into that Credit and
Guaranty Agreement dated as of the date hereof providing for a term loan
facility (as amended, restated, supplemented, modified or Refinanced from time
to time, the "SECOND LIEN CREDIT AGREEMENT");
WHEREAS, the obligations of the Company under the First Lien
Credit Agreement and any Hedge Agreements with the First Lien Lenders (or any of
their affiliates) will be secured by substantially all the assets of the Company
and certain Subsidiaries (such Subsidiaries and any future Subsidiaries of the
Company providing a guaranty thereof, the "GUARANTOR SUBSIDIARIES"),
respectively, pursuant to the terms of the First Lien Collateral Documents;
WHEREAS, the obligations of the Company under the Second Lien
Credit Agreement will be secured by substantially all the assets of the Company
and the Guarantor Subsidiaries, respectively, pursuant to the terms of the
Second Lien Collateral Documents;
WHEREAS, the First Lien Credit Documents and the Second Lien
Credit Documents provide, among other things, that the parties thereto shall set
forth in this Agreement their respective rights and remedies with respect to the
Collateral; and
WHEREAS, in order to induce the First Lien Collateral Agent
and the First Lien Claimholders to consent to the Grantors incurring the Second
Lien Obligations and to induce the First Lien Claimholders to extend credit and
other financial accommodations and lend monies to or for the benefit of the
Company, or any other Grantor, the Second Lien Collateral Agent on behalf of the
Second Lien Claimholders has agreed to the subordination, intercreditor and
other provisions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. As used in the Agreement, the following
terms shall have the following meanings:
"AGREEMENT" means this Agreement, as amended, renewed,
extended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"ASSET SALE" as defined in the First Lien Credit Agreement
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.
"BANKRUPTCY LAW" means the Bankruptcy Code and any similar
federal, state or foreign law for the relief of debtors.
"BUSINESS DAY" 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.
"COLLATERAL" means all of the assets and property of any
Grantor, whether real, personal or mixed, constituting both First Lien
Collateral and Second Lien Collateral.
"COMPARABLE SECOND LIEN COLLATERAL DOCUMENT" means, in
relation to any Collateral subject to any Lien created under any First Lien
Collateral Document, that Second Lien Collateral Document which creates a Lien
on the same Collateral, granted by the same Grantor.
"DISCHARGE OF FIRST LIEN OBLIGATIONS" means, except to the
extent otherwise provided in Section 5.6, (a) payment in full in cash of the
principal of and interest (including interest accruing on or after the
commencement of any Insolvency or
2
Liquidation Proceeding, whether or not such interest would be allowed in such
Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness
outstanding under the First Lien Credit Documents, (b) payment in full of all
other First Lien Obligations that are due and payable or otherwise accrued and
owing at or prior to the time such principal and interest are paid, (c)
termination or cash collateralization (in accordance with the First Lien Credit
Agreement) of all letters of credit issued under the First Lien Credit Documents
and (d) termination of the Revolving Commitments under the First Lien Credit
Agreement.
"FIRST LIEN CLAIMHOLDERS" means, at any relevant time, the
holders of First Lien Obligations at such time, including without limitation the
First Lien Lenders and the agents under the First Lien Credit Agreement.
"FIRST LIEN COLLATERAL AGENT" has the meaning set forth in the
Recitals hereto.
"FIRST LIEN COLLATERAL" means all of the assets and property
of any Grantor, whether real, personal or mixed, with respect to which a Lien is
granted as security for any First Lien Obligations.
"FIRST LIEN COLLATERAL DOCUMENTS" means the Collateral
Documents (as defined in the First Lien Credit Agreement) and any other
agreement, document or instrument pursuant to which a Lien is granted securing
any First Lien Obligations or under which rights or remedies with respect to
such Liens are governed.
"FIRST LIEN CREDIT AGREEMENT" has the meaning set forth in the
recitals hereto.
"FIRST LIEN CREDIT DOCUMENTS" means the First Lien Credit
Agreement and the Credit Documents (as defined in the First Lien Credit
Agreement) and each of the other agreements, documents and instruments providing
for or evidencing any other First Lien Obligation, and any other document or
instrument executed or delivered at any time in connection with any First Lien
Obligations, including any intercreditor or joinder agreement among holders of
First Lien Obligations, to the extent such are effective at the relevant time,
as each may be modified from time to time; provided that any such modification
does not increase the principal amount thereof beyond the aggregate principal
amount of First Lien Obligations permitted under the Second Lien Credit
Agreement on the date hereof (as such amount may be increased from time).
"FIRST LIEN LENDERS" means the "Lenders" under and as defined
in the First Lien Credit Agreement.
"FIRST LIEN MORTGAGES" means a collective reference to each
mortgage, deed of trust and any other document or instrument under which any
Lien on real property owned by any Grantor is granted to secure any First Lien
Obligations or under which rights or remedies with respect to any such Liens are
governed.
3
"FIRST LIEN OBLIGATIONS" means all Obligations outstanding
under the First Lien Credit Agreement and the other First Lien Credit Documents,
including, without limitation, Hedge Agreements entered into with any First Lien
Lender (or any of their Affiliates). To the extent any payment with respect to
the First Lien Obligations (whether by or on behalf of any Grantor, as proceeds
of security, enforcement of any right of set-off or otherwise) is declared to be
fraudulent or preferential in any respect, set aside or required to be paid to a
debtor in possession, trustee, receiver or similar Person, then the obligation
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred. "First Lien
Obligations" shall include all interest accrued or accruing (or which would,
absent commencement of an Insolvency or Liquidation Proceeding, accrue) after
commencement of an Insolvency or Liquidation Proceeding in accordance with the
rate specified in the relevant First Lien Credit Document whether or not the
claim for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GRANTORS" means the Company and each of the Guarantor
Subsidiaries that have executed and delivered, or may from time to time
hereafter execute and deliver, a First Lien Collateral Document or a Second Lien
Collateral Document.
"GUARANTOR SUBSIDIARIES" has the meaning set forth in the
recitals hereto.
"HEDGE AGREEMENTS" means all interest rate or currency swaps,
caps or collar agreements or similar arrangements entered into by the Company or
any of its Subsidiaries providing for protection against fluctuations in
interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"HEDGING OBLIGATION" of any Person means any obligation of
such Person pursuant to any Hedge Agreements.
"INDEBTEDNESS" means and includes all Obligations that
constitute "Indebtedness" within the meaning of the First Lien Credit Agreement
or the Second Lien Credit Agreement, as applicable.
"INSOLVENCY OR LIQUIDATION PROCEEDING" means (a) any voluntary
or involuntary case or proceeding under the Bankruptcy Code with respect to any
Grantor, (b) any other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Grantor or with respect
to a material portion of their
4
respective assets, (c) any liquidation, dissolution, reorganization or winding
up of any Grantor whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy or (d) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of any Grantor.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.
"OBLIGATIONS" means any and all obligations with respect to
the payment of (a) any principal of or interest or premium on any indebtedness,
including any reimbursement obligation in respect of any letter of credit, or
any other liability, including, without limitation, interest accruing after the
filing of a petition initiating any proceeding under the Bankruptcy Code, (b)
any fees, indemnification obligations, expense reimbursement obligations or
other liabilities payable under the documentation governing any indebtedness,
(c) any obligation to post cash collateral in respect of letters of credit or
any other obligations or (d) any Hedging Obligations.
"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 Governmental Authorities.
"PLEDGED COLLATERAL" has the meaning set forth in Section 5.5
hereof.
"RECOVERY" has the meaning set forth in Section 6.5 hereof.
"REFINANCE" means, in respect of any indebtedness, to
refinance, extend, renew, legally defease, amend, modify, supplement,
restructure, replace, refund or repay, or to issue other indebtedness, in
exchange or replacement for, such indebtedness in whole or in part. "REFINANCED"
and "REFINANCING" shall have correlative meanings.
"SECOND LIEN CLAIMHOLDERS" means, at any relevant time, the
holders of Second Lien Obligations at such time, including without limitation
the Second Lien Lenders and the agents under the Second Lien Credit Agreement.
"SECOND LIEN COLLATERAL" means all of the assets and property
of any Grantor, whether real, personal or mixed, with respect to which a Lien is
granted as security for any Second Lien Obligations.
"SECOND LIEN COLLATERAL AGENT" has the meaning set forth in
the preamble hereof.
"SECOND LIEN COLLATERAL DOCUMENTS" means the Collateral
Documents (as defined in the Second Lien Credit Agreement) and any other
agreement, document or
5
instrument pursuant to which a Lien is granted securing any Second Lien
Obligations or under which rights or remedies with respect to such Liens are
governed.
"SECOND LIEN CREDIT AGREEMENT" has the meaning set forth in
the Recitals hereto.
"SECOND LIEN CREDIT DOCUMENTS" means the Second Lien Credit
Agreement and the Credit Documents (as defined in the Second Lien Credit
Agreement) and each of the other agreements, documents and instruments providing
for or evidencing any other Second Lien Obligation, and any other document or
instrument executed or delivered at any time in connection with any Second Lien
Obligations, as the same may be modified from time to time; provided that any
such modification does not increase the principal amount thereof beyond the
limit set forth in the First Lien Credit Agreement and is otherwise in
accordance with the provisions of the First Lien Credit Agreement.
"SECOND LIEN LENDERS" means the "Lenders" under and as defined
in the Second Lien Credit Agreement.
"SECOND LIEN MORTGAGES" means a collective reference to each
mortgage, deed of trust and any other document or instrument under which any
Lien on real property owned by any Grantor is granted to secure any Second Lien
Obligations or under which rights or remedies with respect to any such Liens are
governed.
"SECOND LIEN OBLIGATIONS" means all Obligations outstanding
under the Second Lien Credit Agreement and the other Second Lien Credit
Documents, including, without limitation, Hedge Agreements entered into with any
Second Lien Lender (or any of their Affiliates) but only to the extent such
Second Lien Lender is not also a First Lien Lender. To the extent any payment
with respect to the Second Lien Obligations (whether by or on behalf of any
Grantor, as proceeds of security, enforcement of any right of set-off or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. "Second Lien Obligations" shall include all interest accrued
or accruing (or which would, absent commencement of an Insolvency or Liquidation
Proceeding, accrue) after commencement of an Insolvency or Liquidation
Proceeding in accordance with the rate specified in the relevant Second Lien
Credit Document whether or not the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.
"STANDSTILL PERIOD" has the meaning set forth in Section 3.1
hereof.
"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
6
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; provided, in determining the percentage of
ownership interests of any Person controlled by another Person, no ownership
interest in the nature of a "qualifying share" of the former Person shall be
deemed to be outstanding.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform
Commercial Code (or any similar or equivalent legislation) as in effect in any
applicable jurisdiction.
1.2 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified, (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Exhibits or Sections shall be
construed to refer to Exhibits or Sections of this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 2. LIEN PRIORITIES.
2.1 Relative Priorities. Notwithstanding the date, manner or
order of grant, attachment or perfection of any Liens securing the Second Lien
Obligations granted on the Collateral or of any Liens securing the First Lien
Obligations granted on the Collateral and notwithstanding any provision of the
UCC, or any applicable law or the Second Lien Credit Documents or any other
circumstance whatsoever, the Second Lien Collateral Agent, on behalf of itself
and the Second Lien Claimholders, hereby agrees that: (a) any Lien on the
Collateral securing any First Lien Obligations now or hereafter held by or on
behalf of the First Lien Collateral Agent or any First Lien Claimholders or any
agent or trustee therefor, regardless of how acquired, whether by grant,
possession, statute, operation of law, subrogation or otherwise, shall be senior
in all respects and prior to any Lien on the Collateral securing any of the
Second Lien Obligations; and (b) any Lien on the Collateral now or hereafter
held by or on behalf of the Second Lien Collateral Agent, any Second Lien
Claimholders or any agent or trustee therefor regardless of how acquired,
whether by grant, possession, statute, operation of law, subrogation or
otherwise, shall be junior and subordinate in all respects to all Liens on the
Collateral securing any First Lien Obligations. All Liens on the Collateral
securing any First Lien Obligations shall be and remain senior in all respects
and prior to all Liens on the Collateral securing any Second Lien Obligations
for all purposes,
7
whether or not such Liens securing any First Lien Obligations are subordinated
(subject to Section 5.3(b)) to any Lien securing any other obligation of the
Company, any other Grantor or any other Person.
2.2 Prohibition on Contesting Liens. Each of the Second Lien
Collateral Agent, for itself and on behalf of each Second Lien Claimholder, and
the First Lien Collateral Agent, for itself and on behalf of each First Lien
Claimholder, agrees that it shall not (and hereby waives any right to) contest
or support any other Person in contesting, in any proceeding (including any
Insolvency or Liquidation Proceeding), the priority, validity or enforceability
of a Lien held by or on behalf of any of the First Lien Claimholders in the
First Lien Collateral or by or on behalf of any of the Second Lien Claimholders
in the Collateral, as the case may be; provided that nothing in this Agreement
shall be construed to prevent or impair the rights of the First Lien Collateral
Agent or any First Lien Claimholder to enforce this Agreement, including the
priority of the Liens securing the First Lien Obligations as provided in
Sections 2.1 and 3.1.
2.3 No New Liens. So long as the Discharge of First Lien
Obligations has not occurred, the parties hereto agree that the Company shall
not, and shall not permit any Guarantor Subsidiary to, (i) grant or permit any
additional Liens on any asset or property to secure any Second Lien Obligation
unless it has granted a Lien on such asset or property to secure the First Lien
Obligations, and (ii) grant or permit any additional Liens on any asset or
property to secure any First Lien Obligations unless it has granted a Lien on
such asset property to secure the Second Lien Obligations. To the extent that
the foregoing provisions are not complied with for any reason, without limiting
any other rights and remedies available to the First Lien Collateral Agent
and/or the First Lien Claimholders, Second Lien Collateral Agent, on behalf of
Second Lien Claimholders, agrees that any amounts received by or distributed to
any of them pursuant to or as a result of Liens granted in contravention of this
Section 2.3 shall be subject to Section 4.2.
2.4 Similar Liens and Agreements. The parties hereto agree
that it is their intention that the First Lien Collateral and the Second Lien
Collateral be identical. In furtherance of the foregoing and of Section 8.10,
the parties hereto agree, subject to the other provisions of this Agreement:
(a) upon request by the First Lien Collateral Agent or
the Second Lien Collateral Agent, to cooperate in good faith (and to direct
their counsel to cooperate in good faith) from time to time in order to
determine the specific items included in the First Lien Collateral and the
Second Lien Collateral and the steps taken to perfect their respective Liens
thereon and the identity of the respective parties obligated under the First
Lien Credit Documents and the Second Lien Credit Documents; and
(b) that the documents and agreements creating or
evidencing the First Lien Collateral and the Second Lien Collateral and
guarantees for the First Lien Obligations and the Second Lien Obligations shall
be in all material respects the same forms of documents other than with respect
to the First Lien and the Second Lien nature of the Obligations thereunder.
8
SECTION 3. ENFORCEMENT.
3.1 Exercise of Remedies. (a) So long as the Discharge of
First Lien Obligations has not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against the Company or any other
Grantor: (i) the Second Lien Collateral Agent and the Second Lien Claimholders
(x) will not exercise or seek to exercise any rights or remedies (including
setoff) with respect to any Collateral (including, without limitation, the
exercise of any right under any lockbox agreement, account control agreement,
landlord waiver or bailee's letter or similar agreement or arrangement to which
the Second Lien Collateral Agent or any Second Lien Claimholder is a party) or
institute any action or proceeding with respect to such rights or remedies
(including any action of foreclosure); provided, however, that the Second Lien
Collateral Agent may exercise any or all such rights after the passage of a
period of 180 days from the date of delivery of a notice in writing to the First
Lien Collateral Agent of its intention to exercise its right to take such
actions (the "STANDSTILL PERIOD"); provided, further, however, notwithstanding
anything herein to the contrary, in no event shall the Second Lien Collateral
Agent or any Second Lien Claimholder exercise any rights or remedies with
respect to the Collateral if, notwithstanding the expiration of the Standstill
Period, the First Lien Collateral Agent or any First Lien Claimholder shall have
commenced the exercise of any rights or remedies with respect the Collateral
(prompt notice of such exercise to be given to the Second Lien Collateral
Agent), (y) will not contest, protest or object to any foreclosure proceeding or
action brought by the First Lien Collateral Agent or any First Lien Claimholder
or any other exercise by the First Lien Collateral Agent or any First Lien
Claimholder, of any rights and remedies relating to the Collateral under the
First Lien Credit Documents or otherwise, and (z) subject to its rights under
clause (i)(x) above, will not object to the forbearance by the First Lien
Collateral Agent or the First Lien Claimholders from bringing or pursuing any
foreclosure proceeding or action or any other exercise of any rights or remedies
relating to the Collateral, in each case so long as the respective interests of
the Second Lien Claimholders attach to the proceeds thereof subject to the
relative priorities described in Section 2 hereof and (ii) the First Lien
Collateral Agent and the First Lien Claimholders shall have the exclusive right
to enforce rights, exercise remedies (including set-off and the right to credit
bid their debt) and make determinations regarding the release, disposition, or
restrictions with respect to the Collateral without any consultation with or the
consent of the Second Lien Collateral Agent or any Second Lien Claimholder;
provided, that (A) in any Insolvency or Liquidation Proceeding commenced by or
against the Company or any other Grantor, the Second Lien Collateral Agent may
file a claim or statement of interest with respect to the Second Lien
Obligations, (B) the Second Lien Collateral Agent may take any action (not
adverse to the prior Liens on the Collateral securing the First Lien
Obligations, or the rights of any First Lien Collateral Agent or the First Lien
Claimholders to exercise remedies in respect thereof) in order to preserve or
protect its Lien on the Collateral, (C) the Second Lien Claimholders shall be
entitled to file any necessary responsive or defensive pleadings in opposition
to any motion, claim, adversary proceeding or other pleading made by any person
objecting to or otherwise seeking the disallowance of the claims of the Second
Lien Claimholders, including without limitation any claims secured by the
Collateral, if any, in each case in accordance with the terms of this Agreement
(D) the Second Lien Claimholders shall be entitled to
9
file any pleadings, objections, motions or agreements which assert rights or
interests available to unsecured creditors of the Grantors arising under either
the Bankruptcy Law or applicable non-bankruptcy law, in each case in accordance
with the terms of this Agreement, (E) the Second Lien Claimholders shall be
entitled to file any proof of claim and other filings and make any arguments and
motions that are, in each case, in accordance with the terms of this Agreement,
with respect to the Second Lien Obligations and the Collateral and (F) the
Second Lien Collateral Agent or any Second Lien Claimholder may exercise any of
its rights or remedies with respect to the Collateral after the termination of
the Standstill Period to the extent permitted by clause (i)(x) above. In
exercising rights and remedies with respect to the Collateral, the First Lien
Collateral Agent and the First Lien Claimholders may enforce the provisions of
the First Lien Credit Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in the exercise of their sole
discretion. Such exercise and enforcement shall include the rights of an agent
appointed by them to sell or otherwise dispose of Collateral upon foreclosure,
to incur expenses in connection with such sale or disposition, and to exercise
all the rights and remedies of a secured creditor under the Uniform Commercial
Code of any applicable jurisdiction and of a secured creditor under Bankruptcy
Laws of any applicable jurisdiction.
(b) In the event that the First Lien Collateral Agent
receives a notice pursuant to Subsection (a) above when items (a), (b) and (c)
in the definition of Discharge of First Lien Obligations have been met, but the
Revolving Commitments under the First Lien Credit Agreement have not been
terminated, the First Lien Collateral Agent shall provide notice thereof to the
First Lien Claimholders within five (5) days after receipt thereof. If the First
Lien Claimholders elect to terminate the Revolving Commitments in response
thereto, the First Lien Collateral Agent shall promptly give notice to the
Second Lien Collateral Agent that the Discharge of First Lien Obligations has
occurred. If the First Lien Claimholders have not terminated the Revolving
Commitments within five (5) days after receiving such notice from the First Lien
Collateral Agent, the First Lien Collateral Agent shall so notify the Second
Lien Collateral Agent and upon receipt of such notice the Standstill Period
shall end.
(c) The Second Lien Collateral Agent, on behalf of
itself and the Second Lien Claimholders, agrees that, it will not, except as may
be permitted by Section 5.4 hereof, take or receive any Collateral or any
proceeds of Collateral in connection with the exercise of any right or remedy
(including setoff) with respect to any Collateral, unless and until the
Discharge of First Lien Obligations has occurred, except as expressly provided
in the proviso in clause (ii) of Section 3.1(a) of this Agreement. Without
limiting the generality of the foregoing, unless and until the Discharge of
First Lien Obligations has occurred, except as expressly provided in the proviso
in clause (ii) of Section 3.1(a) of this Agreement, the sole right of the Second
Lien Collateral Agent and the Second Lien Claimholders with respect to the
Collateral is to hold a Lien on the Collateral pursuant to the Second Lien
Collateral Documents for the period and to the extent granted therein and to
receive the proceeds thereof, if any, after the Discharge of the First Lien
Obligations has occurred in accordance with the terms of the Second Lien Credit
Documents and applicable law.
10
(d) Subject to the proviso in clause (ii) of Section
3.1(a) of this Agreement, (i) the Second Lien Collateral Agent, for itself and
on behalf of the Second Lien Claimholders, agrees that the Second Lien
Collateral Agent and the Second Lien Claimholders will not take any action that
would hinder any exercise of remedies under the First Lien Credit Documents or
is otherwise prohibited hereunder, including any sale, lease, exchange, transfer
or other disposition of the Collateral, whether by foreclosure or otherwise, and
(ii) the Second Lien Collateral Agent, for itself and on behalf of the Second
Lien Claimholders, hereby waives any and all rights it or the Second Lien
Claimholders may have as a junior lien creditor or otherwise to object to the
manner in which the First Lien Collateral Agent or any First Lien Claimholder
seeks to enforce or collect the First Lien Obligations or the Liens granted in
any of the First Lien Collateral, regardless of whether any action or failure to
act by or on behalf of the First Lien Collateral Agent or such First Lien
Claimholder is adverse to the interest of the Second Lien Claimholders.
(e) The Second Lien Collateral Agent hereby
acknowledges and agrees that no covenant, agreement or restriction contained in
the Second Lien Collateral Documents or any other Second Lien Credit Document
shall be deemed to restrict in any way the rights and remedies of the First Lien
Collateral Agent or the First Lien Claimholders with respect to the Collateral
as set forth in this Agreement and the First Lien Credit Documents.
3.2 Cooperation. Subject to its rights after the expiration of
the Standstill Period and subject to the proviso in clause (ii) of Section
3.1(a) of this Agreement, the Second Lien Collateral Agent, on behalf of itself
and the Second Lien Claimholders, agrees that, unless and until the Discharge of
First Lien Obligations has occurred, it will not commence, or join with any
Person in commencing, any enforcement, collection, execution, levy or
foreclosure action or proceeding (including, without limitation, any Insolvency
or Liquidation Proceeding) with respect to any Lien held by it under the Second
Lien Collateral Documents or any other Second Lien Credit Document.
SECTION 4. PAYMENTS.
4.1 Application of Proceeds. So long as the Discharge of First
Lien Obligations has not occurred, any proceeds of Collateral received in
connection with the sale or other disposition of, or collection on, such
Collateral upon the exercise of remedies, shall be applied by the First Lien
Collateral Agent to the First Lien Obligations in such order as specified in the
relevant First Lien Credit Documents. Upon the Discharge of the First Lien
Obligations, the First Lien Collateral Agent shall deliver to the Second Lien
Collateral Agent any proceeds of Collateral held by it in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct to be applied by the Second Lien Collateral
Agent to the Second Lien Obligations in such order as specified in the Second
Lien Collateral Documents.
4.2 Payments Over. So long as the Discharge of First Lien
Obligations has not occurred, any Collateral or proceeds thereof (together with
assets or proceeds subject to Liens referred to in the final sentence of Section
2.3) received by the Second
11
Lien Collateral Agent or any Second Lien Claimholders in connection with the
exercise of any right or remedy (including set-off) relating to the Collateral
in contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the First Lien Collateral Agent for the benefit of the
First Lien Claimholders in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct. The
First Lien Collateral Agent is hereby authorized to make any such endorsements
as agent for the Second Lien Collateral Agent or any such Second Lien
Claimholders. This authorization is coupled with an interest and is irrevocable
until such time as this Agreement is terminated in accordance with its terms.
SECTION 5. OTHER AGREEMENTS.
5.1 Releases.
(a) If, in connection with:
(i) the exercise of any First Lien Collateral
Agent's remedies in respect of the Collateral provided for in Section
3.1, including any sale, lease, exchange, transfer or other disposition
of any such Collateral; or
(ii) any sale, lease, exchange, transfer or other
disposition of any Collateral permitted under the terms of the First
Lien Credit Documents (whether or not an event of default thereunder,
and as defined therein, has occurred and is continuing),
the First Lien Collateral Agent, for itself or on behalf of any of the First
Lien Claimholders, releases any of its Liens on any part of the Collateral, or
releases any Grantor from its obligations under its guaranty of the First Lien
Obligations, in each case other than (i) in connection with the Discharge of
First Lien Obligations and (ii) after the occurrence and during the continuance
of any Event of Default under the Second Lien Credit Agreement, then the Liens,
if any, of the Second Lien Collateral Agent, for itself or for the benefit of
the Second Lien Claimholders, on such Collateral, and the obligations of such
Grantor under its guaranty of the Second Lien Obligations, shall be
automatically, unconditionally and simultaneously released and the Second Lien
Collateral Agent, for itself or on behalf of any such Second Lien Claimholders,
promptly shall execute and deliver to the First Lien Collateral Agent or such
Grantor such termination statements, releases and other documents as the First
Lien Collateral Agent or such Grantor may request to effectively confirm such
release.
(b) Until the Discharge of First Lien Obligations
occurs, the Second Lien Collateral Agent, for itself and on behalf of the Second
Lien Claimholders, hereby irrevocably constitutes and appoints the First Lien
Collateral Agent and any officer or agent of the First Lien Collateral Agent,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Second Lien
Collateral Agent or such holder or in the First Lien Collateral Agent's own
name, from time to time in the First Lien Collateral Agent's reasonable
discretion, for the purpose of carrying out the terms of this Section 5.1, to
take any and all
12
appropriate action and to execute any and all documents and instruments which
may be necessary to accomplish the purposes of this Section 5.1, including any
endorsements or other instruments of transfer or release.
(c) In the event that First Lien Obligations, plus the
face amount of any letter of credit issued under the First Lien Credit
Agreement, at any date of determination no longer constitute at least 10% of the
total outstanding First Lien Obligations plus the Second Lien Obligations of the
Grantors, then any agreement provided for in Section 5.1(a) above (except for
releases given in connection with asset sales by Grantors permitted pursuant to
the First Lien Credit Documents) shall require the consent of First Lien
Claimholders and Second Lien Claimholders representing in the aggregate more
than 50% of the sum of the First Lien Obligations and the face amount of such
letters of credit plus the Second Lien Obligations.
(d) Until the Discharge of First Lien Obligations
occurs, to the extent that the First Lien Claimholders (i) have released any
Lien on Collateral or any Grantor from its obligation under its guaranty and any
such Liens or guaranty are later reinstated or (ii) obtain any new first
priority liens or additional guarantys from Grantors, then the Second Lien
Claimholders shall be granted a second priority lien on any such Collateral and
an additional guaranty, as the case may be, which shall be in the same form as
the First Lien Claimholders except as to priority.
5.2 Insurance. Unless and until the Discharge of First Lien
Obligations has occurred, the First Lien Collateral Agent and the First Lien
Claimholders shall have the sole and exclusive right, subject to the rights of
the Grantors under the First Lien Credit Documents, to adjust settlement for any
insurance policy covering the Collateral in the event of any loss thereunder and
to approve any award granted in any condemnation or similar proceeding (or any
deed in lieu of condemnation) affecting the Collateral. Unless and until the
Discharge of First Lien Obligations has occurred, and subject to the rights of
the Grantors under the First Lien Credit Documents, all proceeds of any such
policy and any such award (or any payments with respect to a deed in lieu of
condemnation) if in respect to the Collateral shall be paid to the First Lien
Collateral Agent for the benefit of the First Lien Claimholders pursuant to the
terms of the First Lien Credit Documents (including, without limitation, for
purposes of cash collateralization of letters of credit and Hedge Agreements)
and thereafter, to the extent no First Lien Obligations are outstanding, and
subject to the rights of the Grantors under the Second Lien Credit Documents, to
the Second Lien Collateral Agent for the benefit of the Second Lien Claimholders
to the extent required under the Second Lien Credit Documents and then, to the
extent no Second Lien Obligations are outstanding, to the owner of the subject
property, such other Person as may be entitled thereto or as a court of
competent jurisdiction may otherwise direct. Until the Discharge of First Lien
Obligations has occurred, if the Second Lien Collateral Agent or any Second Lien
Claimholders shall, at any time, receive any proceeds of any such insurance
policy or any such award or payment in contravention of this Agreement, it shall
pay such proceeds over to the First Lien Collateral Agent in accordance with the
terms of Section 4.2 of this Agreement.
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5.3 Amendments to Second Lien Collateral Documents.
(a) Without the prior written consent of the First
Lien Collateral Agent, no Second Lien Credit Document may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Second Lien Credit Document,
would contravene the provisions of this Agreement. The Company agrees that each
Second Lien Collateral Document shall include the following language (or
language to similar effect approved by the First Lien Collateral Agent):
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Second Lien Collateral Agent
pursuant to this Agreement and the exercise of any right or
remedy by the Second Lien Collateral Agent hereunder are
subject to the provisions of the Intercreditor Agreement,
dated as of February 4, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT"), among Carmike Cinemas, Inc., ▇▇▇▇▇
Fargo Foothill, Inc., as First Lien Collateral Agent, National
City Bank, as Second Lien Collateral Agent and certain other
persons party or that may become party thereto from time to
time. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control."
In addition, the Company agrees that each Second Lien Mortgage covering any
Collateral shall contain such other language as the First Lien Collateral Agent
may reasonably request to reflect the subordination of such Second Lien Mortgage
to the First Lien Collateral Document covering such Collateral.
(b) In the event any First Lien Collateral Agent or
the First Lien Claimholders and the relevant Grantor enter into any amendment,
waiver or consent in respect of the First Lien Credit Agreement or any of the
First Lien Collateral Documents for the purpose of adding to, or deleting from,
or waiving or consenting to any departures from any provisions of, the First
Lien Credit Agreement or any First Lien Collateral Document or changing in any
manner the rights of the First Lien Collateral Agent, such First Lien
Claimholders, the Company or any other Grantor thereunder with respect thereto,
then such amendment, waiver or consent shall apply automatically to any
comparable provision of the Second Lien Credit Agreement and the Comparable
Second Lien Collateral Document without the consent of the Second Lien
Collateral Agent or the Second Lien Claimholders and without any action by the
Second Lien Collateral Agent, the Company or any other Grantor, provided, that
(A) no such amendment, waiver or consent shall have the effect of (i) removing
assets subject to the Lien of the Second Lien Collateral Documents, except to
the extent that a release of such Lien is permitted or required by Section 5.1
of this Agreement and provided that there is a corresponding release of such
Lien securing the First Lien Obligations, (ii) imposing duties on the Second
Lien Collateral Agent without its consent, (iii) permitting other liens on the
Collateral not permitted under the terms of the Second Lien Credit Documents or
Section 6 hereof or (iv) increasing the aggregate amount of the First Lien
Obligations in excess
14
of the amount permitted by Section 6.1(d) of the Second Lien Credit Agreement
and (B) notice of such amendment, waiver or consent shall have been given to the
Second Lien Collateral Agent within five (5) Business Days prior to the
effective date of such amendment, waiver or consent.
5.4 Rights As Unsecured Creditors. Except as otherwise set
forth in Section 2.1 of this Agreement, the Second Lien Collateral Agent and the
Second Lien Claimholders may exercise rights and remedies as unsecured creditors
against the Company or any Guarantor Subsidiary that has guaranteed the Second
Lien Obligation in accordance with the terms of the Second Lien Credit Documents
and applicable law. Except as otherwise set forth in Section 2.1 of this
Agreement, nothing in this Agreement shall prohibit the receipt by the Second
Lien Collateral Agent or any Second Lien Claimholders of the required payments
of interest and principal and all other amounts payable so long as such receipt
is not the direct or indirect result of the exercise by the Second Lien
Collateral Agent or any Second Lien Claimholders of rights or remedies as a
secured creditor (including set-off) or enforcement in contravention of this
Agreement of any Lien held by any of them. Nothing in this Section 5.4 impairs
or otherwise adversely affects any rights or remedies the First Lien Collateral
Agent or the First Lien Claimholders may have with respect to the First Lien
Collateral.
5.5 Bailee for Perfection.
(a) The First Lien Collateral Agent agrees to hold
that part of the Collateral that is in its possession or control (or in the
possession or control of its agents or bailees) to the extent that possession or
control thereof is taken to perfect a Lien thereon under the Uniform Commercial
Code (such Collateral being the "PLEDGED COLLATERAL") as collateral agent for
the First Lien Claimholders and as bailee for the Second Lien Collateral Agent
and any assignee solely for the purpose of perfecting the security interest
granted under the First Lien Credit Documents and the Second Lien Credit
Documents, respectively, subject to the terms and conditions of this Section
5.5.
(b) Subject to the terms of this Agreement, until the
Discharge of First Lien Obligations has occurred, the First Lien Collateral
Agent shall be entitled to deal with the Pledged Collateral in accordance with
the terms of the First Lien Credit Documents as if no bailee arrangement with
the Second Lien Collateral Agent existed. The rights of the Second Lien
Collateral Agent shall at all times be subject to the terms of this Agreement
and to the First Lien Collateral Agent's rights under the First Lien Credit
Documents.
(c) The First Lien Collateral Agent shall have no
obligation whatsoever to the First Lien Claimholders and the Second Lien
Collateral Agent or any Second Lien Claimholder to ensure that the Pledged
Collateral is genuine or owned by any of the Grantors or to preserve rights or
benefits of any Person except as expressly set forth in this Section 5.5. The
duties or responsibilities of the First Lien Collateral Agent under this Section
5.5 shall be limited solely to holding the Pledged Collateral as bailee in
accordance with this Section 5.5.
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(d) The First Lien Collateral Agent acting pursuant to
this Section 5.5 shall not have by reason of the First Lien Collateral
Documents, the Second Lien Collateral Documents, this Agreement or any other
document a fiduciary relationship in respect of the First Lien Claimholders, the
Second Lien Collateral Agent or any Second Lien Claimholder.
(e) Upon the Discharge of the First Lien Obligations
under the First Lien Credit Documents to which the First Lien Collateral Agent
is a party, the First Lien Collateral Agent shall deliver the remaining Pledged
Collateral (if any) together with any necessary endorsements, first, to the
Second Lien Collateral Agent to the extent Second Lien Obligations remain
outstanding, and second, to the Company to the extent no First Lien Obligations
or Second Lien Obligations remain outstanding (in each case, so as to allow such
Person to obtain control of such Pledged Collateral). The First Lien Collateral
Agent further agrees to take all other action reasonably requested by such
Person in connection with such Person obtaining a first-priority interest in the
Collateral or as a court of competent jurisdiction may otherwise direct.
5.6 When Discharge of First Lien Obligations Deemed to Not
Have Occurred. If at any time a Discharge of First Lien Obligations has occurred
as a result of any Refinancing of any First Lien Credit Document evidencing a
First Lien Obligation which Refinancing is permitted under the Second Lien
Credit Agreement, then such Discharge of First Lien Obligations shall
automatically be deemed not to have occurred for all purposes of this Agreement
(other than with respect to any actions taken prior to the date of such
designation as a result of the occurrence of such first Discharge of First Lien
Obligations), and the obligations under such Refinancing First Lien Credit
Document shall automatically be treated as First Lien Obligations for all
purposes of this Agreement, including for purposes of the Lien priorities and
rights in respect of Collateral set forth herein, and the First Lien Collateral
Agent under such Refinancing First Lien Credit Documents shall be a First Lien
Collateral Agent for all purposes of this Agreement. Upon receipt of a notice
stating that the Company has entered into a new First Lien Credit Document
(which notice shall include the identity of the new collateral agent, such
agent, the "NEW AGENT"), the Second Lien Collateral Agent shall promptly (a)
enter into such documents and agreements (including amendments or supplements to
this Agreement) as the Company or such New Agent shall reasonably request in
order to confirm to the New Agent the rights contemplated hereby, in each case
consistent in all material respects with the terms of this Agreement and (b)
deliver to the New Agent any Pledged Collateral then held by it together with
any necessary endorsements (or otherwise allow the New Agent to obtain control
of such Pledged Collateral). The New Agent shall agree to be bound by the terms
of this Agreement. If the new First Lien Obligations under the new First Lien
Credit Documents are secured by assets of the Grantors of the type constituting
Collateral that do not also secure the Second Lien Obligations, then the Second
Lien Obligations shall be secured at such time by a second priority Lien on such
assets to the same extent provided in the Second Lien Collateral Documents.
5.7 Purchase Right. Without prejudice to the enforcement of
the First Lien Claimholders remedies, the First Lien Claimholders agree at any
time following an
16
acceleration of the First Lien Obligations in accordance with the terms of the
First Lien Credit Agreement, the First Lien Claimholders will offer the Second
Lien Claimholders the option to purchase the aggregate amount of outstanding
First Lien Obligations at par, without warranty or representation or recourse,
on a pro rata basis across First Lien Claimholders. The Second Lien Claimholders
shall accept or reject such offer within ten (10) Business Days of the receipt
thereof and the parties shall endeavor to close promptly thereafter. If the
Second Lien Claimholders accept such offer, it shall be exercised pursuant to
documentation mutually acceptable to each of the First Lien Collateral Agent and
the Second Lien Collateral Agent. If the Second Lien Claimholders reject such
offer, the First Lien Claimholders shall have no further obligations pursuant to
this Section 5.7 and may take any further actions in their sole discretion in
accordance with the First Lien Credit Documents and this Agreement.
SECTION 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS.
6.1 Finance and Sale Issues. Until the Discharge of First Lien
Obligations has occurred, if the Company or any other Grantor shall be subject
to any Insolvency or Liquidation Proceeding and the First Lien Collateral Agent
shall desire to permit the use of cash collateral on which the First Lien
Collateral Agent or any other creditor has a Lien or to permit the Company or
any other Grantor to obtain financing, whether from the First Lien Claimholders
or any other entity under Section 363 or Section 364 of Title 11 of the United
States Code or any similar Bankruptcy Law (each, a "DIP FINANCING"), then the
Second Lien Collateral Agent, on behalf of itself and the Second Lien
Claimholders, agrees that it will raise no objection to such use of cash
collateral or DIP Financing and will not request adequate protection or any
other relief in connection therewith (except, as expressly agreed by the First
Lien Collateral Agent or to the extent permitted by Section 6.3) and, to the
extent the Liens securing the First Lien Obligations are subordinated or pari
passu with such DIP Financing, the Second Lien Collateral Agent will subordinate
its Liens in the Collateral to the Liens securing such DIP Financing (and all
Obligations relating thereto). The Second Lien Collateral Agent on behalf of the
Second Lien Claimholders, agrees that it will raise no objection or oppose a
sale or other disposition of any Collateral free and clear of its Liens or other
claims under Section 363 of the Bankruptcy Code if the First Lien Claimholders
have consented to such sale or disposition of such assets.
6.2 Relief from the Automatic Stay. Until the Discharge of
First Lien Obligations has occurred, the Second Lien Collateral Agent, on behalf
of itself and the Second Lien Claimholders, agrees that none of them shall seek
relief from the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding in respect of the Collateral, without the prior written
consent of the First Lien Collateral Agent.
6.3 Adequate Protection. The Second Lien Collateral Agent, on
behalf of itself and the Second Lien Claimholders, agrees that none of them
shall contest (or support any other person contesting) (a) any request by the
First Lien Collateral Agent or the First Lien Claimholders for adequate
protection or (b) any objection by the First Lien Collateral Agent or the First
Lien Claimholders to any motion, relief, action or proceeding based on the First
Lien Collateral Agent or the First Lien Claimholders
17
claiming a lack of adequate protection. Notwithstanding the foregoing provisions
in this Section 6.3, in any Insolvency or Liquidation Proceeding, (i) if the
First Lien Claimholders (or any subset thereof) are granted adequate protection
in the form of additional collateral in connection with any DIP Financing, then
the Second Lien Collateral Agent, on behalf of itself or any of the Second Lien
Claimholders, may seek or request adequate protection in the form of a Lien on
such additional collateral, which Lien will be subordinated to the Liens
securing the First Lien Obligations and such DIP Financing (and all Obligations
relating thereto) on the same basis as the other Liens securing the Second Lien
Obligations are so subordinated to the First Lien Obligations under this
Agreement, and (ii) in the event the Second Lien Collateral Agent, on behalf of
itself and the Second Lien Claimholders, seeks or requests adequate protection
in respect of Second Lien Obligations and such adequate protection is granted in
the form of additional collateral, then the Second Lien Collateral Agent, on
behalf of itself or any of the Second Lien Claimholders, agrees that the First
Lien Collateral Agent shall also be granted a senior Lien on such additional
collateral as security for the First Lien Obligations and for any such DIP
Financing provided by the First Lien Claimholders and that any Lien on such
additional collateral securing the Second Lien Obligations shall be subordinated
to the Liens on such collateral securing the First Lien Obligations and any such
DIP Financing provided by the First Lien Claimholders (and all Obligations
relating thereto) and to any other Liens granted to the First Lien Claimholders
as adequate protection on the same basis as the other Liens securing the Second
Lien Obligations are so subordinated to such First Lien Obligations under this
Agreement.
6.4 No Waiver. Subject to the proviso in clause (ii) of
Section 3.1(a) of this Agreement, nothing contained herein shall prohibit or in
any way limit the First Lien Collateral Agent or any First Lien Claimholder from
objecting in any Insolvency or Liquidation Proceeding or otherwise to any action
taken by the Second Lien Collateral Agent or any of the Second Lien
Claimholders, including the seeking by the Second Lien Collateral Agent or any
Second Lien Claimholders of adequate protection or the asserting by the Second
Lien Collateral Agent or any Second Lien Claimholders of any of its rights and
remedies under the Second Lien Credit Documents or otherwise.
6.5 Avoidance Issues. If any First Lien Claimholder is
required in any Insolvency or Liquidation Proceeding or otherwise to turn over
or otherwise pay to the estate of the Company or any other Grantor any amount (a
"RECOVERY"), then such First Lien Claimholders shall be entitled to a
reinstatement of First Lien Obligations with respect to all such recovered
amounts. If this Agreement shall have been terminated prior to such Recovery,
this Agreement shall be reinstated in full force and effect, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect
the obligations of the parties hereto from such date of reinstatement.
6.6 Reorganization Securities. If, in any Insolvency or
Liquidation Proceeding, debt obligations of the reorganized debtor secured by
Liens upon any property of the reorganized debtor are distributed, pursuant to a
plan of reorganization or similar dispositive restructuring plan, both on
account of First Lien Obligations and on account of Second Lien Obligations,
then, to the extent the debt obligations distributed on account of the First
Lien Obligations and on account of the Second Lien Obligations are
18
secured by Liens upon the same property, the provisions of this Agreement will
survive the distribution of such debt obligations pursuant to such plan and will
apply with like effect to the Liens securing such debt obligations.
6.7 Post-Petition Interest.
(a) Neither the Second Lien Collateral Agent nor any
Second Lien Claimholder shall oppose or seek to challenge any claim by the First
Lien Collateral Agent or any First Lien Claimholder for allowance in any
Insolvency or Liquidation Proceeding of First Lien Obligations consisting of
post-petition interest, fees or expenses to the extent of the value of the First
Lien Claimholder's Lien, without regard to the existence of the Lien of the
Second Lien Collateral Agent on behalf of the Second Lien Claimholders on the
Collateral.
(b) Neither the First Lien Collateral Agent nor any
other First Lien Claimholder shall oppose or seek to challenge any claim by the
Second Lien Collateral Agent or any Second Lien Claimholder for allowance in any
Insolvency or Liquidation Proceeding of Second Lien Obligations consisting of
post-petition interest, fees or expenses to the extent of the value of the Lien
of the Second Lien Collateral Agent on behalf of the Second Lien Claimholders on
the Collateral (after taking into account the First Lien Collateral).
6.8 Waiver. The Second Lien Collateral Agent, for itself and
on behalf of the Second Lien Claimholders, waives any claim it may hereafter
have against any First Lien Claimholder arising out of the election of any First
Lien Claimholder of the application of Section 1111(b)(2) of the Bankruptcy
Code, and/or out of any cash collateral or financing arrangement or out of any
grant of a security interest in connection with the Collateral in any Insolvency
or Liquidation Proceeding.
SECTION 7. RELIANCE; WAIVERS; ETC.
7.1 Reliance. Other than any reliance on the terms of this
Agreement, the First Lien Collateral Agent, on behalf of itself and the First
Lien Claimholders under its First Lien Credit Documents, acknowledges that it
and such First Lien Claimholders have, independently and without reliance on the
Second Lien Collateral Agent or any Second Lien Claimholders, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into such First Lien Credit Documents and be
bound by the terms of this Agreement and they will continue to make their own
credit decision in taking or not taking any action under the First Lien Credit
Agreement or this Agreement. The Second Lien Collateral Agent, on behalf of
itself and the Second Lien Claimholders, acknowledges that it and the Second
Lien Claimholders have, independently and without reliance on the First Lien
Collateral Agent or any First Lien Claimholder, and based on documents and
information deemed by them appropriate, made their own credit analysis and
decision to enter into each of the Second Lien Credit Documents and be bound by
the terms of this Agreement and they will
19
continue to make their own credit decision in taking or not taking any action
under the Second Lien Credit Documents or this Agreement.
7.2 No Warranties or Liability. The First Lien Collateral
Agent, on behalf of itself and the First Lien Claimholders under its First Lien
Credit Documents, acknowledges and agrees that each of the Second Lien
Collateral Agent and the Second Lien Claimholders have made no express or
implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the
Second Lien Credit Documents, the ownership of any Collateral or the perfection
or priority of any Liens thereon. Except as otherwise expressly provided herein,
the Second Lien Claimholders will be entitled to manage and supervise their
respective loans and extensions of credit under the Second Lien Credit Documents
in accordance with law and as they may otherwise, in their sole discretion, deem
appropriate. The Second Lien Collateral Agent, on behalf of itself and the
Second Lien Obligations, acknowledges and agrees that the First Lien Collateral
Agent and the First Lien Claimholders have made no express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the First
Lien Documents, the ownership of any Collateral or the perfection or priority of
any Liens thereon. Except as otherwise expressly provided herein, the First Lien
Claimholders will be entitled to manage and supervise their respective loans and
extensions of credit under their respective First Lien Documents in accordance
with law and as they may otherwise, in their sole discretion, deem appropriate.
The Second Lien Collateral Agent and the Second Lien Claimholders shall have no
duty to the First Lien Collateral Agent or any of the First Lien Claimholders,
and the First Lien Collateral Agent and the First Lien Claimholders shall have
no duty to the Second Lien Collateral Agent or any of the Second Lien
Claimholders, to act or refrain from acting in a manner which allows, or results
in, the occurrence or continuance of an event of default or default under any
agreements with the Company or any Guarantor Subsidiary (including the First
Lien Credit Documents and the Second Lien Credit Documents), regardless of any
knowledge thereof which they may have or be charged with.
7.3 No Waiver of Lien Priorities.
(a) No right of the First Lien Claimholders, the First
Lien Collateral Agent or any of them to enforce any provision of this Agreement
or any First Lien Credit Document shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or any other
Grantor or by any act or failure to act by any First Lien Claimholder or the
First Lien Collateral Agent, or by any noncompliance by any Person with the
terms, provisions and covenants of this Agreement, any of the First Lien Credit
Documents or any of the Second Lien Credit Documents, regardless of any
knowledge thereof which the First Lien Collateral Agent or the First Lien
Claimholders, or any of them, may have or be otherwise charged with;
(b) Without in any way limiting the generality of the
foregoing paragraph (but subject to the rights of the Company and the other
Grantors under the First Lien Credit Documents and subject to the provisions of
Section 5.3(b)), the First Lien
20
Claimholders, the First Lien Collateral Agent and any of them may, at any time
and from time to time in accordance with the First Lien Credit Documents and/or
applicable law, without the consent of, or notice to, the Second Lien Collateral
Agent or any Second Lien Claimholders, without incurring any liabilities to the
Second Lien Collateral Agent or any Second Lien Claimholders and without
impairing or releasing the Lien priorities and other benefits provided in this
Agreement (even if any right of subrogation or other right or remedy of the
Second Lien Collateral Agent or any Second Lien Claimholders is affected,
impaired or extinguished thereby) do any one or more of the following:
(i) change the manner, place or terms of
payment or change or extend the time of payment of, or amend,
renew, exchange, increase or alter, the terms of any of the
First Lien Obligations or any Lien on any First Lien
Collateral or guaranty thereof or any liability of the Company
or any other Grantor, or any liability incurred directly or
indirectly in respect thereof (including any increase in or
extension of the First Lien Obligations, without any
restriction as to the amount, tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange,
extend, modify or supplement in any manner any Liens held by
the First Lien Collateral Agent or any of the First Lien
Claimholders, the First Lien Obligations or any of the First
Lien Credit Documents;
(ii) sell, exchange, release, surrender,
realize upon, enforce or otherwise deal with in any manner and
in any order any part of the First Lien Collateral or any
liability of the Company or any other Grantor to the First
Lien Claimholders or the First Lien Collateral Agent, or any
liability incurred directly or indirectly in respect thereof;
(iii) settle or compromise any First Lien
Obligation or any other liability of the Company or any other
Grantor or any security therefor or any liability incurred
directly or indirectly in respect thereof and apply any sums
by whomsoever paid and however realized to any liability
(including the First Lien Obligations) in any manner or order;
and
(iv) exercise or delay in or refrain from
exercising any right or remedy against the Company or any
security or any other Grantor or any other Person, elect any
remedy and otherwise deal freely with the Company, any other
Grantor or any First Lien Collateral and any security and any
guarantor or any liability of the Company or any other Grantor
to the First Lien Claimholders or any liability incurred
directly or indirectly in respect thereof.
(c) The Second Lien Collateral Agent, on behalf of
itself and the Second Lien Claimholders, also agrees that the First Lien
Claimholders and the First Lien Collateral Agent shall have no liability to the
Second Lien Collateral Agent or any Second Lien Claimholders, and the Second
Lien Collateral Agent, on behalf of itself and the Second Lien Claimholders,
hereby waives any claim against any First Lien Claimholder or the First Lien
Collateral Agent, arising out of any and all actions which the First Lien
Claimholders or the First Lien Collateral Agent may take or permit or omit
21
to take with respect to: (i) the First Lien Credit Documents, (ii) the
collection of the First Lien Obligations or (iii) subject to Section 4.1, the
foreclosure upon, or sale, liquidation or other disposition of, any First Lien
Collateral. The Second Lien Collateral Agent, on behalf of itself and the Second
Lien Claimholders, agrees that the First Lien Claimholders and the First Lien
Collateral Agent have no duty to them in respect of the maintenance or
preservation of the First Lien Collateral, the First Lien Obligations or
otherwise; and
(d) The Second Lien Collateral Agent, on behalf of
itself and the Second Lien Claimholders, agrees not to assert and hereby waives,
to the fullest extent permitted by law, any right to demand, request, plead or
otherwise assert or otherwise claim the benefit of, any marshalling, appraisal,
valuation or other similar right that may otherwise be available under
applicable law with respect to the Collateral or any other similar rights a
junior secured creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests,
agreements and obligations of the First Lien Collateral Agent and the First Lien
Claimholders and the Second Lien Collateral Agent and the Second Lien
Claimholders, respectively, hereunder shall remain in full force and effect
irrespective of:
(a) any lack of validity or enforceability of any
First Lien Credit Documents or any Second Lien Credit Documents;
(b) except as otherwise set forth in this Agreement,
any change in the time, manner or place of payment of, or in any other terms of,
all or any of the First Lien Obligations or Second Lien Obligations, or any
amendment or waiver or other modification, including any increase in the amount
thereof, whether by course of conduct or otherwise, of the terms of any First
Lien Credit Document or any Second Lien Credit Document;
(c) any exchange of any security interest in any
Collateral or any other collateral, or any amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the First Lien Obligations or Second Lien Obligations or any guarantee
thereof;
(d) the commencement of any Insolvency or Liquidation
Proceeding in respect of the Company or any other Grantor; or
(e) any other circumstances which otherwise might
constitute a defense available to, or a discharge of, the Company or any other
Grantor in respect of the First Lien Obligations, or of the Second Lien
Collateral Agent or any Second Lien Claimholder in respect of this Agreement.
SECTION 8. MISCELLANEOUS.
8.1 Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of the First Lien Credit
Documents or the Second Lien Credit Documents, the provisions of this Agreement
shall govern and control.
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8.2 Effectiveness; Continuing Nature of this Agreement;
Severability. This Agreement shall become effective when executed and delivered
by the parties hereto. This is a continuing agreement of lien subordination and
the First Lien Claimholders may continue, at any time and without notice to the
Second Lien Collateral Agent or any Second Lien Claimholder subject to the
Second Lien Credit Documents, to extend credit and other financial
accommodations and lend monies to or for the benefit of the Company or any
Grantor constituting First Lien Obligations in reliance hereof. The Second Lien
Collateral Agent, on behalf of itself and the Second Lien Claimholders, hereby
waives any right it may have under applicable law to revoke this Agreement or
any of the provisions of this Agreement. The terms of this Agreement shall
survive, and shall continue in full force and effect, in any Insolvency or
Liquidation Proceeding. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
All references to the Company or any other Grantor shall include the Company or
such Grantor as debtor and debtor-in-possession and any receiver or trustee for
the Company or any other Grantor (as the case may be) in any Insolvency or
Liquidation Proceeding. This Agreement shall terminate and be of no further
force and effect, (i) with respect to the Second Lien Collateral Agent, the
Second Lien Claimholders and the Second Lien Obligations, upon the later of (1)
the date upon which the obligations under the Second Lien Credit Agreement
terminate if there are no other Second Lien Obligations outstanding on such date
and (2) if there are other Second Lien Obligations outstanding on such date, the
date upon which such Second Lien Obligations terminate and (ii) with respect to
the First Lien Collateral Agent, the First Lien Claimholders and the First Lien
Obligations, the date of Discharge of First Lien Obligations, subject to the
rights of the First Lien Claimholders under Section 6.5.
8.3 Amendments; Waivers. No amendment, modification or waiver
of any of the provisions of this Agreement by the Second Lien Collateral Agent
or the First Lien Collateral Agent shall be deemed to be made unless the same
shall be in writing signed on behalf of each party hereto or its authorized
agent and each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights of the parties
making such waiver or the obligations of the other parties to such party in any
other respect or at any other time. Notwithstanding the foregoing, the Company
shall not have any right to consent to or approve any amendment, modification or
waiver of any provision of this Agreement except to the extent its rights are
directly affected (which includes, but is not limited to any amendment to the
Grantors' ability to cause additional obligations to constitute First Lien
Obligations or Second Lien Obligations as the Company may designate).
8.4 Information Concerning Financial Condition of the Company
and its Subsidiaries. The First Lien Collateral Agent and the First Lien
Claimholders, on the one hand, and the Second Lien Claimholders and the Second
Lien Collateral Agent, on the other hand, shall each be responsible for keeping
themselves informed of (a) the financial condition of the Company and its
Subsidiaries and all endorsers and/or guarantors of the First Lien Obligations
or the Second Lien Obligations and (b) all other circumstances bearing upon the
risk of nonpayment of the First Lien Obligations or the Second Lien
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Obligations. The First Lien Collateral Agent and the First Lien Claimholders
shall have no duty to advise the Second Lien Collateral Agent or any Second Lien
Claimholder of information known to it or them regarding such condition or any
such circumstances or otherwise. The Second Lien Collateral Agent and the Second
Lien Claimholders shall have no duty to advise the First Lien Collateral Agent
or any First Lien Claimholder of information known to it or them regarding such
condition or any such circumstances or otherwise. In the event the First Lien
Collateral Agent or any of the First Lien Claimholders, in its or their sole
discretion, undertakes at any time or from time to time to provide any such
information to the Second Lien Collateral Agent or any Second Lien Claimholder,
it or they shall be under no obligation (w) to make, and the First Lien
Collateral Agent and the First Lien Claimholders shall not make, any express or
implied representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided, (x)
to provide any additional information or to provide any such information on any
subsequent occasion, (y) to undertake any investigation or (z) to disclose any
information which, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential or is otherwise required
to maintain confidential.
8.5 Subrogation. The Second Lien Collateral Agent, on behalf
of itself and the Second Lien Claimholders, hereby agrees to defer any rights of
subrogation it may acquire as a result of any payment hereunder until the
Discharge of First Lien Obligations has occurred.
8.6 Application of Payments. All payments received by the
First Lien Collateral Agent or the First Lien Claimholders may be applied,
reversed and reapplied, in whole or in part, to such part of the First Lien
Obligations provided for in the First Lien Credit Documents. The Second Lien
Collateral Agent, on behalf of itself and the Second Lien Claimholders, assents
to any extension or postponement of the time of payment of the First Lien
Obligations or any part thereof and to any other indulgence with respect
thereto, to any substitution, exchange or release of any security which may at
any time secure any part of the First Lien Obligations and to the addition or
release of any other Person primarily or secondarily liable therefor.
8.7 SUBMISSION TO JURISDICTION; WAIVERS. (a) ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) 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 THE APPLICABLE PARTY
AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 8.9; AND (d) AGREES THAT
SERVICE AS PROVIDED IN
24
CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE
APPLICABLE PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING HEREUNDER. 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 HEREOF, INCLUDING 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 ITS
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 SECTION 8.7(b) AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
8.8 Each of the parties hereto waives any right it may have to
trial by jury in respect of any litigation based on, or arising out of, under or
in connection with this Agreement or any other First Lien Credit Document or
Second Lien Credit Document, or any course of conduct, course of dealing, verbal
or written statement or action of any party hereto.
8.9 Notices. All notices to the Second Lien Claimholders and
the First Lien Claimholders permitted or required under this Agreement shall
also be sent to the Second Lien Collateral Agent and the First Lien Collateral
Agent, respectively. Unless otherwise specifically provided herein, any notice
hereunder shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed. For the purposes hereof, the addresses of the parties
hereto shall be as set forth below each party's name on the signature pages
hereto, or, as to each party, at
25
such other address as may be designated by such party in a written notice to all
of the other parties.
8.10 Further Assurances. The First Lien Collateral Agent, on
behalf of itself and the First Lien Claimholders under its First Lien Credit
Documents, and the Second Lien Collateral Agent, on behalf of itself and the
Second Lien Claimholders under its Second Lien Credit Documents, and the
Company, agrees that each of them shall take such further action and shall
execute and deliver such additional documents and instruments (in recordable
form, if requested) as the First Lien Collateral Agent or the Second Lien
Collateral Agent may reasonably request to effectuate the terms of and the lien
priorities contemplated by this Agreement.
8.11 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
8.12 Binding on Successors and Assigns. This Agreement shall
be binding upon the First Lien Collateral Agent, the First Lien Claimholders,
the Second Lien Collateral Agent, the Second Lien Claimholders and their
respective successors and assigns.
8.13 Specific Performance. Each of the First Lien Collateral
Agent and the Second Lien Collateral Agent may demand specific performance of
this Agreement. The First Lien Collateral Agent, on behalf of itself and the
First Lien Claimholders under its First Lien Credit Documents, and the Second
Lien Collateral Agent, on behalf of itself and the Second Lien Claimholders,
hereby irrevocably waives any defense based on the adequacy of a remedy at law
and any other defense which might be asserted to bar the remedy of specific
performance in any action which may be brought by any First Lien Collateral
Agent or the Second Lien Collateral Agent, as the case may be.
8.14 Headings. Section 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.
8.15 Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Agreement or any document or instrument delivered in
connection herewith by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement or such other document or instrument, as
applicable.
8.16 Authorization. By its signature, each Person executing
this Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
8.17 No Third Party Beneficiaries. This Agreement and the
rights and benefits hereof shall inure to the benefit of each of the parties
hereto and its respective
26
successors and assigns and shall inure to the benefit of each of the First Lien
Claimholders and the Second Lien Claimholders. No other Person shall have or be
entitled to assert rights or benefits hereunder.
8.18 Provisions Solely to Define Relative Rights. The
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the First Lien Claimholders on the one hand and
the Second Lien Claimholders on the other hand. None of the Company, any other
Grantor or any other creditor thereof shall have any rights hereunder. Nothing
in this Agreement is intended to or shall impair the obligations of the Company
or any other Grantor, which are absolute and unconditional, to pay the First
Lien Obligations and the Second Lien Obligations as and when the same shall
become due and payable in accordance with their terms.
27
IN WITNESS WHEREOF, the parties hereto have executed this
Intercreditor Agreement as of the date first written above.
FIRST LIEN COLLATERAL AGENT
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as First Lien Collateral Agent,
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: S.V.P.
S-1
SECOND LIEN COLLATERAL AGENT
NATIONAL CITY BANK,
as Second Lien Collateral Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
S-2
CARMIKE CINEMAS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Finance, Treasurer and
Chief Financial Officer
S-3