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EXHIBIT 10.1
LOAN AGREEMENT
DRAFT COPY
This Loan Agreement (the "Agreement") is made as of this ___ day of
October, 2000, by and between CinemaStar Luxury Theaters, Inc., a Delaware
corporation ("Borrower"), and SCP Private Equity Partners, L.P., a Pennsylvania
limited partnership ("Lender").
A. Subject to the terms and conditions herein, and in other documents to be
executed concurrently herewith, the parties have reached an agreement whereby
Borrower and Lender will enter into a ______ Million Dollars and Zero Cents
($______) Loan ("Loan"). Borrower's obligations to repay the Loan shall be
evidenced by this Loan and secured by a Security Agreement (Security Agreement")
to be executed by Borrower concurrently herewith (as at any time amended,
modified, or supplemented).
NOW, THEREFORE, the Borrower and Lender hereby agree as follows:
1. LOAN. Subject to and upon the terms and conditions set forth herein, and
as set forth in the Note, Lender agrees during the period commencing on the date
hereof and continuing until notice by Lender ("Availability Period") to make
from time to time an advance or advances (each of which is herein called an
"Advance") to Borrower in an aggregate principal amount not to exceed at any one
time outstanding the amount of ______________ Dollars and Zero Cents ($_______).
(a) NOTICE OF BORROWING. Whenever Borrower desires to borrow hereunder
it shall submit a notice of proposed borrowing ("Borrowing Certificate")
specifying the proposed date of borrowing, the proposed term of borrowing, the
amount of the proposed borrowing, a certification of the intended use of the
proceeds of such borrowing, which use shall be satisfactory to Lender. Lender
shall thereupon furnish an Advance of funds in an amount equal to the amount of
such approved Borrowing Certificate to such bank account as the Borrower and
Lender may mutually agree. Advances may be borrowed, repaid and reborrowed;
provided that all Advances, including the requested Advance and all loan or
advances heretofore made under the Loan, shall not exceed in the aggregate
principal amount at any time outstanding the sum of _________ Dollars and Zero
Cents ($_________).
2. REPAYMENT OBLIGATION. For value received, Borrower promises to pay to
Lender, or order, the principal amount of _______________ Dollars and Zero Cents
($______), with interest on such amount until paid, at the rate set forth below.
This Loan shall be secured by the Security Agreement executed concurrently
herewith.
3. REPAYMENT OF LOAN.
(a) The outstanding principal amount of the Loan shall be due and
payable as follows:
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(1) Stated Due Date. The Loan shall be paid on the due date
stated in the respective notices of borrowing, unless demand is sooner made by
Lender.
(2) Demand. The Loan shall be repaid upon the demand of Lender.
(3) Dissolution of Borrower. Lender may demand repayment of the
Loan upon commencement of the dissolution of Borrower.
The Loan may be prepaid in whole or in part at any time without penalty. Lender
shall maintain a separate Loan Account to record Advances hereunder by Lender to
Borrower, it being the intent hereof that all indebtedness of Borrower incurred
hereunder on account of Advances shall be governed exclusively by this
Agreement.
(b) Statement of Account. The debit balance of the Loan Account shall
reflect the amount of the indebtedness of Borrower to Lender from time to time
by reason of Advances hereunder and payments thereof or thereon.
(c) Security Agreement. Pursuant to this Loan, the payment obligations
arising hereunder are secured by that Security Agreement dated October __, 2000,
which Borrower has executed in favor of Lender concurrently herewith.
4. INTEREST. Interest shall be payable on the outstanding principal of the
Loan until repayment at the rate of ten percent (10%) per annum. Interest shall
be calculated on the number of calendar days actually elapsed on the basis of a
year of 365 days and paid on the earliest of (i) on the due date of the
respective Advances, (ii) on demand of Lender and (iii) on the dissolution of
the Borrower.
5. SUBORDINATION TO UNION BANK. Lender and Borrower recognize that Union
Bank of California, N.A. holds a first priority secured position with respect to
all of the assets of Borrower. Lender and Borrower agree that all Advances made
hereunder shall be and shall remain subordinate to the secured position of Union
Bank.
6. REPRESENTATIONS AND WARRANTIES. For the purpose of inducing Lender to
enter into this Agreement and to make the Advances, Borrower hereby represents
and warrants as of the date hereof and as of each drawdown date, that:
(a) Organization and Standing. Borrower is a corporation duly
organized and validly existing under the laws of California, and in all other
jurisdictions in which the conduct, of its businesses or the ownership or lease
of its properties requires such qualification, except where the failure to so
qualify could not have a material adverse effect on the Borrower, its business
or its financial condition. The Borrower now has and will at all times have full
power and authority to own its properties and to conduct its business as now
conducted or contemplated to be conducted. The Borrower has complied with all
filing, permit, license and other requirements of federal, state and local laws
necessary to prevent the Borrower from thereafter being precluded, by reason of
its failure so to comply with any such requirements, from continuing to do
business in respect to applicable jurisdictions and as now conducted, and no
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action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand or notice has been filed or commenced against the Borrower alleging any
failure to so comply. The Borrower has no Affiliates or Subsidiaries.
(b) No Breach; Authorizations and Required Consents. Neither the
execution, delivery nor performance of this Loan Agreement by or on behalf of
Borrower will conflict with or result in a breach of any of the terms,
conditions or provisions of the charter documents of Borrower or any judgment,
order, injunction, decree, regulation or ruling of any court or governmental
authority to which Borrower is subject or is aware, or any material agreement,
contract or commitment to which Borrower is a party, or by which Borrower is
bound or to which Borrower's property or assets are subject, or constitute a
material default thereunder, or give to others any interests or rights,
including rights of termination, cancellation or acceleration, in or with
respect to any of such agreements, contracts or commitments, or otherwise
require the consent or approval of any person, which consent has not heretofore
been obtained.
(c) No Litigation or Adverse Events. Borrower has not received any
notice that an action, proceeding or investigation is pending or threatened that
questions the validity of this Loan Agreement or any action taken or to be taken
pursuant hereto.
(d) Authorization of Agreement. Borrower has full legal right, power,
capacity and authority and any approval required by law to execute and deliver
this Loan Agreement and otherwise to consummate the transactions contemplated by
this Loan Agreement. This Agreement has been duly authorized, executed and
delivered by or on behalf of Borrower and constitutes a valid and legally
binding obligation of Borrower enforceable in accordance with its terms.
(e) No Event of Default. Borrower is not in default in the payment or
performance of any of its obligations under any other agreement, instrument or
undertaking to which it is a party or by which its assets are bound.
7. CONDITIONS PRECEDENT. Prior to the making of any Advance Borrower shall
have complied with the following conditions precedent to the satisfaction of
Lender, unless otherwise waived in writing by Lender:
(a) Supporting Documents. Borrower shall have delivered to Lender the
Borrowing Certificate and such other certificates, resolutions and other
documentation as Lender shall request in connection with each advance.
(b) Compliance by Borrower. Borrower shall be in compliance with all
terms, covenants and conditions of this Agreement and the Note, there shall
exist no event of default and no event which with the giving of notice or the
lapse of time or both would constitute an event of default and each of the
representations and warranties made by Borrower herein and in any of the
ancillary documents shall be true and correct on and as of such date with the
effect as though such representations and warranties had been made on and as of
such date.
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(c) Compliance by Lender. Lender shall be in compliance with all
terms, covenants and conditions of this Agreement and the Note, and there shall
exist no event of default and no event which with the giving of notice or the
lapse of time or both would constitute an event of default. Lender is entitled
to refuse any request for an advance in the event of default or an event which
with the giving of notice or the lapse of time both would constitute an event of
default.
8. COVENANTS. Borrower covenants and agrees that, until payment in full of
all of the outstanding principal and interest due and owing hereunder and the
termination of the Loan, Borrower will:
(a) Permitted Use of Proceeds. Use all the proceeds of the Advances
only to fund the ongoing working capital requirements for Borrower, and to repay
existing indebtedness.
(b) Existence. Comply with all laws and regulations applicable to
Borrower and do or cause to be done all things necessary to preserve, renew and
keep in full force and effect (i) the existence of the Borrower in California
and in all other jurisdictions where Borrower conducts business and (ii) all
rights, licenses, permits and franchises of Borrower.
(c) Books, Records and Other Information. Maintain at all times true
and complete books, records, reports, and accounts in which true and correct
entries shall be made of its transactions in accordance with GAAP, including,
without limitation, books and records with respect to all costs and expenditures
incurred in connection with each of the Products. Borrower shall allow any
representative of Lender to examine all such books, records, reports and files
of Borrower and to make copies thereof, at such reasonable times and on
reasonable prior notice during business hours and as often as Lender may
request, and shall furnish such financial information as Lender may request.
(d) Notice of Events, etc. Promptly give notice in writing to Lender
of (i) any facts or circumstances that vitiate or render any of the
representations or warranties contained in this Agreement untrue or false in any
respect, or (ii) the occurrence of any Event of Default or the occurrence of any
event which with notice and/or the passage of time will result in the occurrence
of any Event of Default.
(e) Further Assurances. At Borrower's cost and expense, duly execute
and deliver, or cause to be executed and delivered to Lender, such further
agreements, documents and instruments and do or cause to be done such further
acts as may be necessary or proper to evidence or otherwise carry out more
effectively the provisions and purposes of this Agreement as Lender may from
time to time reasonably request.
(f) Liabilities. Not create, incur, assume or suffer to exist,
contingently or otherwise, any liabilities or indebtedness of Borrower, except
unsecured liabilities incurred in the ordinary course of the business in
accordance with the budget approved by the venturers of Borrower.
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9. EVENTS OF DEFAULT. An Event of Default shall mean the occurrence of any
of the following events:
(a) Payment Default. If Borrower shall default in the payment of any
part of the principal or interest due under this Agreement, the Note, or any
other obligations when the same shall become due and payable, whether at the
stated maturity or by declaration or otherwise.
(b) Other Default. If Borrower shall default in the performance of or
compliance with any term contained in this Agreement or the Note, other than
those referred to in Section 9(a), and such default shall not have been
remedied, or affirmative action acceptable to Lender shall not have been taken
to cure the same, within ten (10) days after written notice thereof shall have
been given to Borrower.
(c) Breach of Representations. If any representation or warranty
herein made by Borrower subsequently proves to have been untrue in any material
respect, or any statement, certificate or data furnished by Borrower hereunder
proves to have been untrue in any material respect as of the date as of which
the facts therein were stated or certified.
(d) Bankruptcy. If Borrower shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts as they
become due, or shall file a voluntary petition in bankruptcy, or shall be
adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking for itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, or shall file any answer admitting or shall fail to deny the
material allegations of a petition filed against Borrower for any such relief,
or shall seek or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of Borrower or of all or any substantial part of the
properties of Borrower.
10. REMEDIES ON DEFAULT, ETC. If an Event of Default shall have occurred
and shall be continuing, Lender may (in addition to any other rights Lender may
have under this Loan Agreement or the Note) proceed to (i) terminate its Loan
Agreement, (ii) declare the entire unpaid aggregate principal amount of the then
outstanding loan balance owed to Lender to be forthwith due and payable,
whereupon the same, both as to principal and interest, shall become forthwith
due and payable, without presentment, demand, protest, or notice of any kind,
all of which are hereby expressly waived, and/or (iii) proceed to protect and
enforce the rights of Lender by a suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein, or for an injunction against a violation of any of the terms
thereof or in aid of the exercise of any right, power or remedy granted thereby
or by law, equity, statute, or otherwise. Borrower shall pay to Lender such
amounts as shall be sufficient to cover the cost and expense of any action taken
by Lender to protect and enforce such rights upon an Event of Default, including
(without limitation) reasonable attorney fees. No course of dealing and no delay
on the part of Lender in exercising any right, power or remedy shall operate as
a waiver thereof or otherwise prejudice Lender's rights, powers or remedies. No
right, power or remedy conferred hereby shall be exclusive of any right, power
or remedy referred to herein or now or hereafter available at law, in equity, by
statute or otherwise.
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11. MISCELLANEOUS.
(a) Survival of Representations and Warranties. The parties
acknowledge and agree that the representations and warranties contained in this
Agreement shall survive indefinitely.
(b) Assignment. This Agreement and any rights and obligations
hereunder may not be assigned by Borrower without the consent of Lender, nor may
Lender assign its rights and obligations hereunder without the consent of the
other, provided however, that Lender may assign its rights and obligations
hereunder to its ultimate parent company or to any of the direct or indirect
wholly-owned subsidiaries of such ultimate parent company, without consent.
(c) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties, successors and assigns.
(d) Notices. Any notice to any party hereunder shall be given in
writing (i) by personal delivery, (ii) by prepaid courier service addressed to
the addresses set forth below, (iii) by facsimile or (iv) by certified mail,
postage paid, to the addresses set forth below.
If to Borrower: CinemaStar Luxury Theaters, Inc.
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Attn.: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: SCP Private Equity Partners, L.P.
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Attn.: Treasurer
Facsimile: (---)--------
Any such notice shall be deemed received upon the earlier of (i) actual receipt
or (ii) ten (10) days after mailing as provided above. Notice of change of
address shall be given by written notice in the manner detailed in this Section.
(e) Governing Law. This Agreement and all disputes hereunder shall be
construed in accordance with, and governed by, the laws of California applied to
contracts made and to be performed entirely in California between residents of
California.
(f) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and which together shall constitute a
single agreement.
(g) Expenses. Except as otherwise provided herein, the parties hereto
shall each pay all costs and expenses of their respective performance of, and
compliance with, the agreements and conditions contained herein on their
respective parts to be performed or complied with.
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(h) Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this agreement.
(i) Waivers. No waiver of any of the provisions of this Agreement
shall be valid and enforceable unless such waiver is in writing and signed by
the party to be charged, and, unless otherwise stated therein, no such waiver
shall constitute a waiver of any other provision hereof (whether or not similar)
or a continuing waiver.
(j) Further Assurances. Each of the parties hereto shall from time to
time, without further consideration, execute and deliver such other documents
and take such other actions as may reasonably be requested by another party
hereto in order to effectuate the provisions of this Agreement.
(k) Entire Agreement. This Agreement and the agreements, instruments
and other documents to be delivered hereunder constitute the entire
understanding and agreement between the parties hereto concerning the subject
matter hereof. All negotiations between the parties hereto are merged into this
Agreement, and there are no representations, warranties, covenants,
understandings, or agreements, oral or otherwise, in relation thereto between
the parties other than those incorporated herein and to be delivered hereunder.
Except as otherwise expressly contemplated by this Agreement, nothing expressed
or implied in this Agreement is intended or shall be construed so as to grant or
confer on any person, firm or corporation other than the parties hereto any
rights or privileges hereunder. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties to be bound
thereby.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date set forth above.
CINEMASTAR LUXURY THEATERS, INC.,
a California corporation
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By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Chief Financial Officer
SCP PRIVATE EQUITY PARTNERS, L.P.,
A California partnership
By:
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Its:
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1563630.1