EXHIBIT 10.1
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,
▇▇▇▇▇ FARGO FOOTHILL, INC.,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
AND
CIT LENDING SERVICES CORPORATION
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS CO-DOCUMENTATION AGENTS
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$50,000,000 SENIOR SECURED FIRST PRIORITY REVOLVING CREDIT FACILITY
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FIRST 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................................................................................ 27
1.3. INTERPRETATION, ETC............................................................................. 27
SECTION 2. LOANS AND LETTERS OF CREDIT.................................................................... 27
2.1. REVOLVING LOANS................................................................................. 27
2.2. SWING LINE LOANS................................................................................ 28
2.3. ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS THEREIN............................ 30
2.4. PRO RATA SHARES; AVAILABILITY OF FUNDS.......................................................... 34
2.5. USE OF PROCEEDS................................................................................. 35
2.6. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES................................... 35
2.7. INTEREST ON LOANS............................................................................... 35
2.8. CONVERSION/CONTINUATION......................................................................... 37
2.9. DEFAULT INTEREST................................................................................ 38
2.10. FEES........................................................................................... 38
2.11. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.................................................... 39
2.12. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.................................................... 40
2.13. APPLICATION OF PREPAYMENTS/REDUCTIONS.......................................................... 42
2.14. GENERAL PROVISIONS REGARDING PAYMENTS.......................................................... 42
2.15. RATABLE SHARING................................................................................ 44
2.16. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.................................................... 44
2.17. INCREASED COSTS; CAPITAL ADEQUACY.............................................................. 46
2.18. TAXES; WITHHOLDING, ETC........................................................................ 47
2.19. OBLIGATION TO MITIGATE......................................................................... 50
2.20. DEFAULTING LENDERS............................................................................. 50
2.21. REMOVAL OR REPLACEMENT OF A LENDER............................................................. 51
SECTION 3. CONDITIONS PRECEDENT........................................................................... 52
3.1. CLOSING DATE.................................................................................... 52
3.2. CONDITIONS TO EACH CREDIT EXTENSION............................................................. 57
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................................. 58
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION...................................... 58
4.2. CAPITAL STOCK AND OWNERSHIP..................................................................... 58
4.3. DUE AUTHORIZATION............................................................................... 59
4.4. NO CONFLICT..................................................................................... 59
4.5. GOVERNMENTAL CONSENTS........................................................................... 59
4.6. BINDING OBLIGATION.............................................................................. 59
4.7. HISTORICAL FINANCIAL STATEMENTS................................................................. 59
4.8. PROJECTIONS..................................................................................... 60
4.9. NO MATERIAL ADVERSE CHANGE...................................................................... 60
4.10. NO RESTRICTED JUNIOR PAYMENTS.................................................................. 60
4.11. ADVERSE PROCEEDINGS, ETC....................................................................... 60
4.12. PAYMENT OF TAXES............................................................................... 60
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4.13. PROPERTIES..................................................................................... 61
4.14. ENVIRONMENTAL MATTERS.......................................................................... 61
4.15. NO DEFAULTS.................................................................................... 61
4.16. MATERIAL CONTRACTS............................................................................. 61
4.17. GOVERNMENTAL REGULATION........................................................................ 62
4.18. MARGIN STOCK................................................................................... 62
4.19. EMPLOYEE MATTERS............................................................................... 62
4.20. EMPLOYEE BENEFIT PLANS......................................................................... 62
4.21. CERTAIN FEES................................................................................... 63
4.22. SOLVENCY....................................................................................... 63
4.23. RELATED AGREEMENTS............................................................................. 63
4.24. COMPLIANCE WITH STATUTES, ETC.................................................................. 64
4.25. DISCLOSURE..................................................................................... 64
SECTION 5. AFFIRMATIVE COVENANTS.......................................................................... 64
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS.......................................................... 64
5.2. EXISTENCE....................................................................................... 68
5.3. PAYMENT OF TAXES AND CLAIMS..................................................................... 68
5.4. MAINTENANCE OF PROPERTIES....................................................................... 68
5.5. INSURANCE....................................................................................... 68
5.6. INSPECTIONS..................................................................................... 69
5.7. LENDERS MEETINGS................................................................................ 69
5.8. COMPLIANCE WITH LAWS............................................................................ 69
5.9. ENVIRONMENTAL................................................................................... 69
5.10. SUBSIDIARIES................................................................................... 71
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS......................................................... 71
5.12. INTEREST RATE PROTECTION....................................................................... 72
5.13. FURTHER ASSURANCES............................................................................. 72
5.14. POST-CLOSING REFINANCING....................................................................... 72
SECTION 6. NEGATIVE COVENANTS............................................................................. 72
6.1. INDEBTEDNESS.................................................................................... 73
6.2. LIENS........................................................................................... 75
6.3. EQUITABLE LIEN.................................................................................. 76
6.4. NO FURTHER NEGATIVE PLEDGES..................................................................... 77
6.5. RESTRICTED JUNIOR PAYMENTS...................................................................... 77
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS........................................................ 78
6.7. INVESTMENTS..................................................................................... 78
6.8. FINANCIAL COVENANTS............................................................................. 79
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS........................................ 80
6.10. DISPOSAL OF SUBSIDIARY INTERESTS............................................................... 81
6.11. SALES AND LEASE-BACKS.......................................................................... 81
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.................................................. 82
6.13. CONDUCT OF BUSINESS............................................................................ 82
6.14. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS AND DESIGNATED CONTRACTS................... 82
6.15. AMENDMENTS OR WAIVERS OF WITH RESPECT TO SENIOR SUBORDINATED NOTE DOCUMENTS AND TERM
LOAN CREDIT AGREEMENT........................................................................ 82
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6.16. FISCAL YEAR.................................................................................... 83
SECTION 7. GUARANTY....................................................................................... 83
7.1. GUARANTY OF THE OBLIGATIONS..................................................................... 83
7.2. CONTRIBUTION BY GUARANTORS...................................................................... 83
7.3. PAYMENT BY GUARANTORS........................................................................... 84
7.4. LIABILITY OF GUARANTORS ABSOLUTE................................................................ 84
7.5. WAIVERS BY GUARANTORS........................................................................... 86
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC............................................ 87
7.7. SUBORDINATION OF OTHER OBLIGATIONS.............................................................. 87
7.8. CONTINUING GUARANTY............................................................................. 88
7.9. AUTHORITY OF GUARANTORS OR COMPANY.............................................................. 88
7.10. FINANCIAL CONDITION OF COMPANY................................................................. 88
7.11. BANKRUPTCY, ETC................................................................................ 88
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR................................................... 89
SECTION 8. EVENTS OF DEFAULT.............................................................................. 89
8.1. EVENTS OF DEFAULT............................................................................... 89
SECTION 9. AGENTS......................................................................................... 92
9.1. APPOINTMENT OF AGENTS........................................................................... 92
9.2. POWERS AND DUTIES............................................................................... 92
9.3. GENERAL IMMUNITY................................................................................ 93
9.4. AGENTS ENTITLED TO ACT AS LENDER................................................................ 93
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT......................................... 94
9.6. RIGHT TO INDEMNITY.............................................................................. 94
9.7. SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL AGENT AND SWING LINE LENDER.......................... 95
9.8. COLLATERAL DOCUMENTS AND GUARANTY............................................................... 96
SECTION 10. MISCELLANEOUS................................................................................. 96
10.1. NOTICES........................................................................................ 96
10.2. EXPENSES....................................................................................... 97
10.3. INDEMNITY...................................................................................... 97
10.4. SET-OFF........................................................................................ 98
10.5. AMENDMENTS AND WAIVERS......................................................................... 98
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS......................................................... 100
10.7. INDEPENDENCE OF COVENANTS...................................................................... 103
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS......................................... 103
10.9. NO WAIVER; REMEDIES CUMULATIVE................................................................. 103
10.10. MARSHALLING; PAYMENTS SET ASIDE............................................................... 104
10.11. SEVERABILITY.................................................................................. 104
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.................................... 104
10.13. HEADINGS...................................................................................... 104
10.14. APPLICABLE LAW................................................................................ 104
10.15. CONSENT TO JURISDICTION....................................................................... 104
10.16. WAIVER OF JURY TRIAL.......................................................................... 105
10.17. CONFIDENTIALITY............................................................................... 106
10.18. USURY SAVINGS CLAUSE.......................................................................... 106
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10.19. COUNTERPARTS.................................................................................. 107
10.20. EFFECTIVENESS................................................................................. 107
10.21. USA PATRIOT ACT............................................................................... 107
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APPENDICES: A Revolving 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
A-3 Issuance Notice
B-1 Revolving Loan Note
B-2 Swing Line 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"), ▇▇▇▇▇ FARGO FOOTHILL, INC. ("FOOTHILL"), 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"), and CIT LENDING SERVICES
CORPORATION ("CIT") and GENERAL ELECTRIC CAPITAL CORPORATION, ("GECC"), as
Co-Documentation Agent (each of CIT and GECC, in such capacity,
"CO-DOCUMENTATION AGENTS").
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 first priority
revolving credit facility to Company, consisting of $50,000,000 aggregate
principal amount of Revolving Commitments, the proceeds of which will 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, concurrently with the Revolving Commitments provided to
Company on the Closing Date, Company will use 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 Term Loans, (iii) 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, Company has agreed to secure all of its Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a First
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 First 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:
FIRST 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 Foothill 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
FIRST 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,
Collateral Agent and Co-Documentation Agents.
"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, Issuing Bank, 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 States of New York or
California 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
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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 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
Moody's; (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 Moody's; (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 Moody's; 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.
"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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5
"CLOSING DATE MORTGAGED PROPERTY" as defined in
Section 3.1(i).
"CO-DOCUMENTATION AGENTS" as defined in the preamble hereto.
"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,
recapitalizations, option buyouts, assets sales and Permitted Acquisitions,
minus (ii) other
FIRST LIEN CREDIT AGREEMENT EXECUTION
6
non-Cash items increasing Consolidated Net Income for such period (excluding any
such 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 CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding any amount not payable
in Cash.
"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(d) 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.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries determined on a consolidated basis in accordance
with GAAP.
"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,
FIRST LIEN CREDIT AGREEMENT EXECUTION
7
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, any documents or certificates executed by Company
in favor of Issuing Bank relating to Letters of Credit, and all other
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent, Issuing Bank or any Lender pursuant to the requirements of
this Agreement or the Collateral Documents.
"CREDIT EXTENSION" means the making of a Loan or the issuing
of a Letter of Credit.
"CREDIT PARTY" means each Person (other than any Agent,
Issuing Bank 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.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender,
the excess, if any, of such Defaulting Lender's Pro Rata Share of the aggregate
outstanding principal amount of Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Loans) over the aggregate outstanding principal amount of
all Loans of such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender,
the period commencing on the date of the applicable Funding Default and ending
on the earliest of the following dates: (i) the date on which all Revolving
Commitments are cancelled or terminated and/or the Obligations are declared or
become immediately due and payable, (ii) the date on which (a) the Default
Excess with respect to such Defaulting Lender shall have been reduced to zero
(whether by the funding by such Defaulting Lender of any Defaulted Loans of such
FIRST LIEN CREDIT AGREEMENT EXECUTION
8
Defaulting Lender or by the non-pro rata application of any voluntary or
mandatory prepayments of the Loans in accordance with the terms of Section 2.11
or Section 2.12 or by a combination thereof) and (b) such Defaulting Lender
shall have delivered to Company and Administrative Agent a written reaffirmation
of its intention to honor its obligations hereunder with respect to its
Revolving Commitments, and (iii) the date on which Company, Administrative Agent
and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in
writing.
"DEFAULTED LOAN" as defined in Section 2.20.
"DEFAULTING LENDER" as defined in Section 2.20.
"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.
"DISCRETIONARY CONSOLIDATED CAPITAL EXPENDITURES" means
Consolidated Capital Expenditures other than Maintenance Consolidated Capital
Expenditures.
"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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
9
"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.
"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
FIRST LIEN CREDIT AGREEMENT EXECUTION
10
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 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
11
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.
"FINANCIAL PLAN" as defined in Section 5.1(h).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that such Lien
is the only Lien to which such Collateral is subject, other than any Permitted
Lien.
"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.
"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 DEFAULT" as defined in Section 2.20.
"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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
12
"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.
"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
FIRST LIEN CREDIT AGREEMENT EXECUTION
13
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 2.21.
"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 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 (I)
obligations under any Interest Rate Agreement or any Currency Agreement be
deemed "Indebtedness" for any purpose under Section 6.8 or (II) 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
14
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 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 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 ended, to (ii) Consolidated Cash Interest Expense for such
four-Fiscal Quarter period.
"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
FIRST LIEN CREDIT AGREEMENT EXECUTION
15
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 the Revolving Loans shall extend beyond the Revolving
Commitment Termination 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 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.
"ISSUANCE NOTICE" means an Issuance Notice substantially in
the form of Exhibit A-3.
"ISSUING BANK" means Foothill or one of its Affiliates as
Issuing Bank hereunder, together with its permitted successors and assigns in
such capacity.
"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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
16
"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.
"LETTER OF CREDIT" means a commercial or standby letter of
credit issued or to be issued by Issuing Bank pursuant to this Agreement.
"LETTER OF CREDIT SUBLIMIT" means the lesser of (i) $5,000,000
and (ii) the aggregate unused amount of the Revolving Commitments then in
effect.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is, or at any
time thereafter may become, available for drawing under all Letters of Credit
then outstanding, and (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of
Company.
"LEVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter or other date of determination of (i) Consolidated Total Debt as
of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period ending on such date (or if such date of determination is not the last day
of a Fiscal Quarter, for the four-Fiscal Quarters period ending as of the most
recently concluded Fiscal Quarter).
"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.
"LOAN" means a Revolving Loan and a Swing Line Loan.
"MAINTENANCE CONSOLIDATED CAPITAL EXPENDITURES" means those
Consolidated Capital Expenditures for general repair and maintenance activities
in connection with the theatre
FIRST LIEN CREDIT AGREEMENT EXECUTION
17
properties of Company and its Subsidiaries which are required to be capitalized
on the consolidated balance sheet of Company and its Subsidiaries in accordance
with GAAP.
"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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
18
"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 $2,000,000 and less than $5,000,000 in the aggregate during any Fiscal
Year.
"NON-US LENDER" as defined in Section 2.18(c).
"NOTE" means a Revolving Loan Note or a Swing Line Note.
"NOTICE" means a Funding Notice, an Issuance 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
19
proceeding), reimbursement of amounts drawn under Letters of Credit, payments
for early termination of Hedge Agreements, fees, expenses, indemnification or
otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"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.
"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
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) Company and its Subsidiaries shall be in
compliance with the financial covenants set forth in Section 6.8 on a
pro forma basis after giving effect to such acquisition as of the last
day of the Fiscal Quarter most recently ended, (as determined in
accordance with Section 6.8(d));
(v) Company shall have delivered to
Administrative Agent at least fifteen (15) Business Days prior to such
proposed acquisition, a Compliance Certificate
FIRST LIEN CREDIT AGREEMENT EXECUTION
20
evidencing compliance with Section 6.8 as required under clause (iv)
above, together with all relevant financial information with respect to
such acquired assets, including, without limitation, the aggregate
consideration for such acquisition and any other information required
to demonstrate compliance with Section 6.8; 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, for each of Administrative Agent,
Swing Line Lender and Issuing Bank, 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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
21
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means, with respect to each Lender, the
percentage obtained by dividing (A) the Revolving Exposure of that Lender, by
(B) an amount equal to the sum of the aggregate Revolving 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.
"REFUNDED SWING LINE LOANS" as defined in Section 2.2(b)(iv).
"REGISTER" as defined in Section 2.6(b).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" as defined in Section 2.3(d).
"RELATED AGREEMENTS" means, collectively, (i) the Term Loan
Credit Agreement and (ii) the Senior Subordinated Notes Documents.
"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
FIRST LIEN CREDIT AGREEMENT EXECUTION
22
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 2.21.
"REQUISITE LENDERS" means two or more non-Affiliate Lenders
having or holding Revolving Exposure and representing more than 50% of the sum
of the aggregate Revolving 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 or the Term Loans.
"REVOLVING COMMITMENT" means the commitment of a Lender to
make or otherwise fund any Revolving Loan and to acquire participations in
Letters of Credit and Swingline Loans hereunder and "REVOLVING COMMITMENTS"
means such commitments of all Lenders in the aggregate. The amount of each
Lender's Revolving Commitment, if any, is set forth on Appendix A-3 or in the
applicable Assignment Agreement subject to any adjustment or reduction pursuant
to the terms and conditions hereof. The aggregate amount of the Revolving
Commitments as of the Closing Date is $50,000,000.
"REVOLVING COMMITMENT PERIOD" means the period from the
Closing Date to but excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to
occur of (i) August 4, 2008, (ii) the date the Revolving Commitments are
permanently reduced to zero pursuant to Section 2.11, and (iii) the date of the
termination of the Revolving Commitments pursuant to Section 8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of
any date of determination, (i) prior to the termination of the Revolving
Commitments, that Lender's Revolving Commitment; and (ii) after the termination
of the Revolving Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender, (b) in the case of Issuing Bank,
the aggregate Letter of Credit Usage in respect of all Letters of Credit issued
by that Lender (net of any participations by Lenders in such Letters of Credit),
(c) the aggregate amount of all participations by that Lender in any outstanding
Letters of Credit or any unreimbursed drawing under any Letter of Credit, (d) in
the case of Swing Line Lender, the
FIRST LIEN CREDIT AGREEMENT EXECUTION
23
aggregate outstanding principal amount of all Swing Line Loans (net of any
participations therein by other Lenders), and (e) the aggregate amount of all
participations therein by that Lender in any outstanding Swing Line Loans.
"REVOLVING LOAN" means a Loan made by a Lender to Company
pursuant to Section 2.1(a).
"REVOLVING LOAN NOTE" means a promissory note in the form of
Exhibit B-1, as it may be amended, supplemented or otherwise modified from time
to time.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"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 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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
24
"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 Offshore, L.P., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, 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.
"SUBJECT TRANSACTION" as defined in Section 6.8(d).
"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.
"SWING LINE LENDER" means Foothill in its capacity as Swing
Line Lender hereunder, together with its permitted successors and assigns in
such capacity.
"SWING LINE LOAN" means a Loan made by Swing Line Lender to
Company pursuant to Section 2.2.
"SWING LINE NOTE" means a promissory note in the form of
Exhibit B-2, as it may be amended, supplemented or otherwise modified from time
to time.
"SWING LINE SUBLIMIT" means the lesser of (i) $5,000,000, and
(ii) the aggregate unused amount of Revolving Commitments then in effect.
FIRST LIEN CREDIT AGREEMENT EXECUTION
25
"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 CREDIT AGREEMENT" means the Senior Secured Second
Priority Credit and Guaranty Agreement dated as of the Closing Date among
Company, GSCP as sole lead arranger, sole bookrunner and sole syndication agent,
National City Corporation, 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 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.
"TERM LOANS" means the senior secured second priority term
loans in an aggregate principal amount of $100,000,000 made on the Closing Date
under the Term Loan Credit Agreement.
"TERMINATED LENDER" as defined in Section 2.21.
"TITLE POLICY" as defined in Section 3.1(i).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any
amount drawn under any Letter of Credit, but not yet so applied), (ii) the
aggregate principal amount of all outstanding Swing Line Loans, and (iii) the
Letter of Credit Usage.
"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 (i) with respect to Revolving Loans, a
Base Rate Loan or a Eurodollar Rate Loan, and (ii) with respect to Swing Line
Loans, a Base 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).
FIRST LIEN CREDIT AGREEMENT EXECUTION
26
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 AND LETTERS OF CREDIT
2.1. REVOLVING LOANS. (a) Revolving Commitments. During the Revolving
Commitment Period, subject to the terms and conditions hereof, each Lender
severally agrees to make Revolving Loans to Company in an aggregate amount up to
but not exceeding such Lender's Revolving Commitment; provided, that after
giving effect to the making of any Revolving Loans in no event shall the Total
Utilization of Revolving Commitments exceed the Revolving Commitments then in
effect. Amounts borrowed pursuant to this Section 2.1(a) may be repaid and
reborrowed during the Revolving Commitment Period. Each Lender's Revolving
Commitment shall expire on the Revolving Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Commitments shall be paid in full no later
than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to 2.3(d), Revolving Loans that
are Base Rate Loans shall be made in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount,
and Revolving Loans that are Eurodollar Rate Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of
$250,000 in excess of that amount.
(ii) Whenever Company desires that Lenders make
Revolving Loans, Company shall deliver to Administrative Agent a fully
executed and delivered Funding Notice no later than 10:00 a.m. (New
York City time) at least three Business Days in advance of the proposed
Credit Date in the case of a Eurodollar Rate Loan, and at least one
Business Day in advance of the proposed Credit Date in the case of a
Revolving
FIRST LIEN CREDIT AGREEMENT EXECUTION
27
Loan that is a Base Rate Loan. Except as otherwise provided herein, a
Funding Notice for a Revolving Loan that is a Eurodollar Rate Loan
shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
(iii) Notice of receipt of each Funding Notice in
respect of Revolving Loans, together with the amount of each Lender's
Pro Rata Share thereof, if any, together with the applicable interest
rate, shall be provided by Administrative Agent to each applicable
Lender by telefacsimile with reasonable promptness, but (provided
Administrative Agent shall have received such notice by 10:00 a.m. (New
York City time)) not later than 2:00 p.m. (New York City time) on the
same day as Administrative Agent's receipt of such Notice from Company.
(iv) Each Lender shall make the amount of its
Revolving Loan available to Administrative Agent not later than 12:00
p.m. (New York City time) on the applicable Credit Date by wire
transfer of same day funds in Dollars, at Administrative Agent's
Principal Office. Except as provided herein, upon satisfaction or
waiver of the conditions precedent specified herein, Administrative
Agent shall make the proceeds of such Revolving Loans available to
Company on the applicable Credit Date by causing an amount of same day
funds in Dollars equal to the proceeds of all such Revolving Loans
received by Administrative Agent from Lenders to be credited to the
account of Company at Administrative Agent's Principal Office or such
other account as may be designated in writing to Administrative Agent
by Company.
2.2. SWING LINE LOANS.
(a) Swing Line Loans Commitments. During the Revolving
Commitment Period, subject to the terms and conditions hereof, Swing Line Lender
hereby agrees to make Swing Line Loans to Company in the aggregate amount up to
but not exceeding the Swing Line Sublimit; provided, that after giving effect to
the making of any Swing Line Loan, in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.2 may be repaid and reborrowed during the
Revolving Commitment Period. Swing Line Lender's Revolving Commitment shall
expire on the Revolving Commitment Termination Date and all Swing Line Loans and
all other amounts owed hereunder with respect to the Swing Line Loans and the
Revolving Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Swing Line Loans.
(i) Swing Line Loans shall be made in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess
of that amount.
(ii) Whenever Company desires that Swing Line Lender
make a Swing Line Loan, Company shall deliver to Administrative Agent a
Funding Notice no later than 12:00 p.m. (New York City time) on the
proposed Credit Date.
(iii) Swing Line Lender shall make the amount of its
Swing Line Loan available to Administrative Agent not later than 3:00
p.m.(New York City time) on the
FIRST LIEN CREDIT AGREEMENT EXECUTION
28
applicable Credit Date by wire transfer of same day funds in Dollars,
at Administrative Agent's Principal Office. Except as provided herein,
upon satisfaction or waiver of the conditions precedent specified
herein, Administrative Agent shall make the proceeds of such Swing Line
Loans available to Company on the applicable Credit Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such
Swing Line Loans received by Administrative Agent from Swing Line
Lender 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.
(iv) With respect to any Swing Line Loans which have
not been voluntarily prepaid by Company pursuant to Section 2.11, Swing
Line Lender may at any time in its sole and absolute discretion,
deliver to Administrative Agent (with a copy to Company), no later than
11:00 a.m. (New York City time) at least one Business Day in advance of
the proposed Credit Date, a notice (which shall be deemed to be a
Funding Notice given by Company) requesting that each Lender holding a
Revolving Commitment make Revolving Loans that are Base Rate Loans to
Company on such Credit Date in an amount equal to the amount of such
Swing Line Loans (the "REFUNDED SWING LINE LOANS") outstanding on the
date such notice is given which Swing Line Lender requests Lenders to
prepay. Anything contained in this Agreement to the contrary
notwithstanding, (1) the proceeds of such Revolving Loans made by the
Lenders other than Swing Line Lender shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to Company) and
applied to repay a corresponding portion of the Refunded Swing Line
Loans and (2) on the day such Revolving Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing
Line Lender to Company, and such portion of the Swing Line Loans deemed
to be so paid shall no longer be outstanding as Swing Line Loans and
shall no longer be due under the Swing Line Note of Swing Line Lender
but shall instead constitute part of Swing Line Lender's outstanding
Revolving Loans to Company and shall be due under the Revolving Loan
Note issued by Company to Swing Line Lender. Company hereby authorizes
Administrative Agent and Swing Line Lender to charge Company's accounts
with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the extent of the
proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender. If any portion
of any such amount paid (or deemed to be paid) to Swing Line Lender
should be recovered by or on behalf of Company from Swing Line Lender
in bankruptcy, by assignment for the benefit of creditors or otherwise,
the loss of the amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by Section 2.15.
(v) If for any reason Revolving Loans are not made
pursuant to Section 2.1(b)(iv) in an amount sufficient to repay any
amounts owed to Swing Line Lender in respect of any outstanding Swing
Line Loans on or before the third Business Day after demand for payment
thereof by Swing Line Lender, each Lender holding a Revolving
Commitment shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans, and in an amount
equal to its Pro Rata Share of the applicable unpaid amount together
with accrued interest thereon. Upon one Business
FIRST LIEN CREDIT AGREEMENT EXECUTION
29
Day's notice from Swing Line Lender, each Lender holding a Revolving
Commitment shall deliver to Swing Line Lender an amount equal to its
respective participation in the applicable unpaid amount in same day
funds at the Principal Office of Swing Line Lender. In order to
evidence such participation each Lender holding a Revolving Commitment
agrees to enter into a participation agreement at the request of Swing
Line Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Lender holding a Revolving Commitment fails to
make available to Swing Line Lender the amount of such Lender's
participation as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Lender together
with interest thereon for three Business Days at the rate customarily
used by Swing Line Lender for the correction of errors among banks and
thereafter at the Base Rate, as applicable.
(vi) Notwithstanding anything contained herein to the
contrary, (1) each Lender's obligation to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the
second preceding paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional and
shall not be affected by any circumstance, including without limitation
(A) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against Swing Line Lender, any Credit Party or any
other Person for any reason whatsoever; (B) the occurrence or
continuation of a Default or Event of Default; (C) any adverse change
in the business, operations, properties, assets, condition (financial
or otherwise) or prospects of any Credit Party; (D) any breach of this
Agreement or any other Credit Document by any party thereto; or (E) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that such obligations of each
Lender are -------- subject to the condition that Swing Line Lender
believed in good faith that all conditions under Section 3.2 to the
making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, were satisfied at the time such Refunded Swing Line
Loans or unpaid Swing Line Loans were made, or the satisfaction of any
such condition not satisfied had been waived by the Requisite Lenders
prior to or at the time such Refunded Swing Line Loans or other unpaid
Swing Line Loans were made; and (2) Swing Line Lender shall not be
obligated to make any Swing Line Loans (A) if it has elected not to do
so after the occurrence and during the continuation of a Default or
Event of Default or (B) at a time when a Funding Default exists unless
Swing Line Lender has entered into arrangements satisfactory to it and
Company to eliminate Swing Line Lender's risk with respect to the
Defaulting Lender's participation in such Swing Ling Loan, including by
cash collateralizing such Defaulting Lender's Pro Rata Share of the
outstanding Swing Line Loans.
2.3. ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS
THEREIN.
(a) Letters of Credit. During the Revolving Commitment Period,
subject to the terms and conditions hereof, Issuing Bank agrees to issue Letters
of Credit for the account of Company in the aggregate amount up to but not
exceeding the Letter of Credit Sublimit; provided, (i) each Letter of Credit
shall be denominated in Dollars; (ii) the stated amount of each Letter of Credit
shall be an amount not less than $100,000; (iii) after giving effect to such
FIRST LIEN CREDIT AGREEMENT EXECUTION
30
issuance, in no event shall the Total Utilization of Revolving Commitments
exceed the Revolving Commitments then in effect; (iv) after giving effect to
such issuance, in no event shall the Letter of Credit Usage exceed the Letter of
Credit Sublimit then in effect; (v) in no event shall any standby Letter of
Credit have an expiration date later than the earlier of (1) the Revolving
Commitment Termination Date and (2) the date which is one year from the date of
issuance of such standby Letter of Credit; and (vi) in no event shall any
commercial Letter of Credit (x) have an expiration date later than the earlier
of (1) the Revolving Commitment Termination Date and (2) the date which is 270
days from the date of issuance of such commercial Letter of Credit or (b) be
issued if such commercial Letter of Credit is otherwise unacceptable to Issuing
Bank in its reasonable discretion. Notwithstanding the foregoing, Issuing Bank
may agree that a standby Letter of Credit will automatically be extended for one
or more successive periods not to exceed one year each, unless Issuing Bank
elects not to extend for any such additional period; provided, Issuing Bank
shall not extend any such Letter of Credit if it has received written notice
that an Event of Default has occurred and is continuing at the time Issuing Bank
must elect to allow such extension; provided, further, in the event a Funding
Default exists, Issuing Bank shall not be required to issue any Letter of Credit
unless Issuing Bank has entered into arrangements satisfactory to it and Company
to eliminate Issuing Bank's risk with respect to the participation in Letters of
Credit of the Defaulting Lender, including by cash collateralizing such
Defaulting Lender's Pro Rata Share of the Letter of Credit Usage.
(b) Notice of Issuance. Whenever Company desires the issuance
of a Letter of Credit, it shall deliver to Administrative Agent an Issuance
Notice no later than 12:00 p.m. (New York City time) at least three Business
Days (or such shorter period as may be agreed to by Issuing Bank in any
particular instance) in advance of the proposed date of issuance. Upon
satisfaction or waiver of the conditions set forth in Section 3.2, Issuing Bank
shall issue the requested Letter of Credit only in accordance with Issuing
Bank's standard operating procedures. Upon the issuance of any Letter of Credit
or amendment or modification to a Letter of Credit, Issuing Bank shall promptly
notify each Lender of such issuance, which notice shall be accompanied by a copy
of such Letter of Credit or amendment or modification to a Letter of Credit and
the amount of such Lender's respective participation in such Letter of Credit
pursuant to Section 2.3(e).
(c) Responsibility of Issuing Bank With Respect to Requests
for Drawings and Payments. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible
only to examine the documents delivered under such Letter of Credit with
reasonable care so as to ascertain whether they appear on their face to be in
accordance with the terms and conditions of such Letter of Credit. As between
Company and Issuing Bank, Company assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit issued by Issuing Bank, by the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, Issuing Bank shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with
FIRST LIEN CREDIT AGREEMENT EXECUTION
31
any conditions required in order to draw upon such Letter of Credit, other than
the failure to submit to the Issuing Bank documents under such Letter of Credit
that appear on their face to be in accordance with the terms and conditions of
such Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of Issuing Bank,
including any Governmental Acts; none of the above shall affect or impair, or
prevent the vesting of, any of Issuing Bank's rights or powers hereunder.
Without limiting the foregoing and in furtherance thereof, any action taken or
omitted by Issuing Bank under or in connection with the Letters of Credit or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, and in the absence of gross negligence on the part of the Issuing Bank,
shall not give rise to any liability on the part of Issuing Bank to Company.
Notwithstanding anything to the contrary contained in this Section 2.3(c),
Company shall retain any and all rights it may have against Issuing Bank for any
liability arising solely out of the gross negligence or willful misconduct of
Issuing Bank.
(d) Reimbursement by Company of Amounts Drawn or Paid Under
Letters of Credit. In the event Issuing Bank has determined to honor a drawing
under a Letter of Credit, it shall immediately notify Company and Administrative
Agent, and Company shall reimburse Issuing Bank on or before the second Business
Day immediately following the date on which such drawing is honored (the
"REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal to the
amount of such honored drawing; provided, anything contained herein to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and Issuing Bank prior to 10:00 a.m. (New York City time) on the Business
Day immediately following the date such drawing is honored that Company intends
to reimburse Issuing Bank for the amount of such honored drawing with funds
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Funding Notice to Administrative Agent requesting Lenders to make
Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount
in Dollars equal to the amount of such honored drawing, and (ii) subject to
satisfaction or waiver of the conditions specified in Section 3.2, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such honored drawing, the proceeds of which shall be applied
directly by Administrative Agent to reimburse Issuing Bank for the amount of
such honored drawing; and provided further, if for any reason proceeds of
Revolving Loans are not received by Issuing Bank on the Reimbursement Date in an
amount equal to the amount of such honored drawing, Company shall reimburse
Issuing Bank, on demand, in an amount in same day funds equal to the excess of
the amount of such honored drawing over the aggregate amount of such Revolving
Loans, if any, which are so received. Nothing in this Section 2.3(d) shall be
deemed to relieve any Lender from its obligation to make Revolving Loans on the
terms and conditions set forth herein, and Company shall retain any and all
rights it may have against any Lender resulting from the failure of such Lender
to make such Revolving Loans under this Section 2.3(d).
(e) Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Commitment shall be
FIRST LIEN CREDIT AGREEMENT EXECUTION
32
deemed to have purchased, and hereby agrees to irrevocably purchase, from
Issuing Bank a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share (with respect to
the Revolving Commitments) of the maximum amount which is or at any time may
become available to be drawn thereunder. In the event that Company shall fail
for any reason to reimburse Issuing Bank as provided in Section 2.3(d), Issuing
Bank shall promptly notify each Lender of the unreimbursed amount of such
honored drawing and of such Lender's respective participation therein based on
such Lender's Pro Rata Share of the Revolving Commitments. Each Lender shall
make available to Issuing Bank an amount equal to its respective participation,
in Dollars and in same day funds, at the office of Issuing Bank specified in
such notice, not later than 12:00 p.m. (New York City time) on the first
business day (under the laws of the jurisdiction in which such office of Issuing
Bank is located) after the date notified by Issuing Bank. In the event that any
Lender fails to make available to Issuing Bank on such business day the amount
of such Lender's participation in such Letter of Credit as provided in this
Section 2.3(e), Issuing Bank shall be entitled to recover such amount on demand
from such Lender together with interest thereon for three Business Days at the
rate customarily used by Issuing Bank for the correction of errors among banks
and thereafter at the Base Rate. Nothing in this Section 2.3(e) shall be deemed
to prejudice the right of any Lender to recover from Issuing Bank any amounts
made available by such Lender to Issuing Bank pursuant to this Section in the
event that it is determined that the payment with respect to a Letter of Credit
in respect of which payment was made by such Lender constituted gross negligence
or willful misconduct on the part of Issuing Bank. In the event Issuing Bank
shall have been reimbursed by other Lenders pursuant to this Section 2.3(e) for
all or any portion of any drawing honored by Issuing Bank under a Letter of
Credit, such Issuing Bank shall distribute to each Lender which has paid all
amounts payable by it under this Section 2.3(e) with respect to such honored
drawing such Lender's Pro Rata Share of all payments subsequently received by
Issuing Bank from Company in reimbursement of such honored drawing when such
payments are received. Any such distribution shall be made to a Lender at its
primary address set forth below its name on Appendix B or at such other address
as such Lender may request.
(f) Obligations Absolute. The obligation of Company to
reimburse Issuing Bank for drawings honored under the Letters of Credit issued
by it and to repay any Revolving Loans made by Lenders pursuant to Section
2.3(d) and the obligations of Lenders under Section 2.3(e) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms hereof under all circumstances including any of the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit; (ii) the existence of any claim, set-off, defense or other right which
Company or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such transferee
may be acting), Issuing Bank, Lender or any other Person or, in the case of a
Lender, against Company, whether in connection herewith, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between Company or one of its Subsidiaries and the beneficiary for
which any Letter of Credit was procured); (iii) any draft or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) payment by Issuing Bank under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit; (v) any adverse
change in the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries; (vi) any breach
hereof or any other Credit Document by any
FIRST LIEN CREDIT AGREEMENT EXECUTION
33
party thereto; (vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or (viii) the fact that an Event of Default
or a Default shall have occurred and be continuing; provided, in each case, that
payment by Issuing Bank under the applicable Letter of Credit shall not have
constituted gross negligence or willful misconduct of Issuing Bank under the
circumstances in question.
(g) Indemnification. Without duplication of any obligation of
Company under Section 10.2 or 10.3, in addition to amounts payable as provided
herein, Company hereby agrees to protect, indemnify, pay and save harmless
Issuing Bank from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which Issuing
Bank may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit by Issuing Bank, other than as a result of (1)
the gross negligence or willful misconduct of Issuing Bank or (2) the wrongful
dishonor by Issuing Bank of a proper demand for payment made under any Letter of
Credit issued by it, or (ii) the failure of Issuing Bank to honor a drawing
under any such Letter of Credit as a result of any Governmental Act.
2.4. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all
participations purchased, by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in such other Lender's
obligation to make a Loan requested hereunder or purchase a participation
required hereby nor shall any Revolving 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 or purchase a participation
required hereby.
(b) Availability of Funds. Unless Administrative Agent shall
have been notified by any Lender prior to the applicable Credit Date that such
Lender does not intend to make available to Administrative Agent the amount of
such Lender's Loan requested on such Credit Date, Administrative Agent may
assume that such Lender has made such amount available to Administrative Agent
on such Credit Date and Administrative Agent may, in its sole discretion, but
shall not be obligated to, make available to Company a corresponding amount on
such Credit Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Credit 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 Revolving Commitments hereunder or to prejudice any rights that
Company may have against any Lender as a result of any default by such Lender
hereunder.
FIRST LIEN CREDIT AGREEMENT EXECUTION
34
2.5. USE OF PROCEEDS. The proceeds of the Revolving Loans, Swing Line
Loans and Letters of Credit shall be applied by Company for working capital and
general corporate purposes of Company and its Subsidiaries, including Capital
Expenditures and Permitted Acquisitions. No portion of the proceeds of any
Credit Extension shall be used in any manner that causes or might cause such
Credit Extension 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 any Lender's Revolving Commitments or 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 Revolving Commitments and Loans of each Lender from time to time
(the "REGISTER"). The Register shall be available for inspection by Company or
any Lender at any reasonable time and from time to time upon reasonable prior
notice. Administrative Agent shall record in the Register the Revolving
Commitments and 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
any Lender's Revolving Commitments or Company's Obligations in respect of any
Loan. Company hereby designates Foothill to serve as Company's agent solely for
purposes of maintaining the Register as provided in this Section 2.6, and
Company hereby agrees that, to the extent Foothill serves in such capacity,
Foothill 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 Revolving Loan or Swing Line Loan, as the case may be.
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:
FIRST LIEN CREDIT AGREEMENT EXECUTION
35
(i) in the case of Revolving Loans:
(1) if a Base Rate Loan, at the Base Rate
plus 2.25%; or
(2) if a Eurodollar Rate Loan, at the
Adjusted Eurodollar Rate plus 3.25%; and
(ii) in the case of Swing Line Loans, at the Base
Rate plus 2.25%.
(b) The basis for determining the rate of interest with
respect to any Loan (except a Swing Line Loan which can be made and maintained
as Base Rate Loans only), 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 applicable Funding Notice or Conversion/Continuation
Notice, as the case may be. If on any day a Loan is outstanding with respect to
which a Funding Notice or 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 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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
36
(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.
(f) Company agrees to pay to Issuing Bank, with respect to
drawings honored under any Letter of Credit, interest on the amount paid by
Issuing Bank in respect of each such honored drawing from the date such drawing
is honored to but excluding the date such amount is reimbursed by or on behalf
of Company at a rate equal to (i) for the period from the date such drawing is
honored to but excluding the applicable Reimbursement Date, the rate of interest
otherwise payable hereunder with respect to Revolving Loans that are Base Rate
Loans, and (ii) thereafter, a rate which is 2% per annum in excess of the rate
of interest otherwise payable hereunder with respect to Revolving Loans that are
Base Rate Loans.
(g) Interest payable pursuant to Section 2.7(f) shall be
computed on the basis of a 365/366-day year for the actual number of days
elapsed in the period during which it accrues, and shall be payable on demand
or, if no demand is made, on the date on which the related drawing under a
Letter of Credit is reimbursed in full. Promptly upon receipt by Issuing Bank of
any payment of interest pursuant to Section 2.7(f), Issuing Bank shall
distribute to each Lender, out of the interest received by Issuing Bank in
respect of the period from the date such drawing is honored to but excluding the
date on which Issuing Bank is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of any Revolving Loans),
the amount that such Lender would have been entitled to receive in respect of
the letter of credit fee that would have been payable in respect of such Letter
of Credit for such period if no drawing had been honored under such Letter of
Credit. In the event Issuing Bank shall have been reimbursed by Lenders for all
or any portion of such honored drawing, Issuing Bank shall distribute to each
Lender which has paid all amounts payable by it under Section 2.3(e) with
respect to such honored drawing such Lender's Pro Rata Share of any interest
received by Issuing Bank in respect of that portion of such honored drawing so
reimbursed by Lenders for the period from the date on which Issuing Bank was so
reimbursed by Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by Company.
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
Revolving 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
37
(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 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.
(a) Company agrees to pay to Lenders having Revolving
Exposure:
(i) commitment fees equal to (1) the average of the
daily difference between (a) the Revolving Commitments, and (b) the sum
of (x) the aggregate principal amount of outstanding Revolving Loans
(but not any outstanding Swing Line Loans) plus (y) the Letter of
Credit Usage, times (2) 1.25% per annum; and
(ii) letter of credit fees equal to (1) 3.25% per
annum, times (2) the average aggregate daily maximum amount available
to be drawn under all such Letters of Credit (regardless of whether any
conditions for drawing could then be met and determined as of the close
of business on any date of determination).
All fees referred to in this Section 2.10(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
FIRST LIEN CREDIT AGREEMENT EXECUTION
38
(b) Company agrees to pay directly to Issuing Bank, for its
own account, the following fees:
(i) a fronting fee equal to 0.30%, per annum, times
the average aggregate daily maximum amount available to be drawn under
all Letters of Credit (determined as of the close of business on any
date of determination); and
(ii) such documentary and processing charges for any
issuance, amendment, transfer or payment of a Letter of Credit as are
in accordance with Issuing Bank's standard schedule for such charges
and as in effect at the time of such issuance, amendment, transfer or
payment, as the case may be.
(c) All fees referred to in Section 2.10(a) and 2.10(b)(i)
shall be calculated on the basis of a 360-day year and the actual number of days
elapsed and shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year during the Revolving Commitment
Period, commencing on the first such date to occur after the Closing Date, and
on the Revolving Commitment Termination Date.
(d) In addition to any of the foregoing fees, Company agrees
to pay to Agents such other fees in the amounts and at the times separately
agreed upon.
2.11. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Base Rate Loans, Company
may prepay any such Revolving 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;
(2) with respect to Eurodollar Rate Loans,
Company may prepay any such Revolving 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; and
(3) with respect to Swing Line Loans,
Company may prepay any such Loans on any Business Day in whole
or in part in an aggregate minimum amount of $100,000, and in
integral multiples of $50,000 in excess of that amount.
FIRST LIEN CREDIT AGREEMENT EXECUTION
39
(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;
(2) upon not less than three Business Days'
prior written or telephonic notice in the case of Eurodollar
Rate Loans; and
(3) upon written or telephonic notice on the
date of prepayment, in the case of Swing Line Loans;
in each case given to Administrative Agent or Swing Line Lender, as the case may
be, 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 Revolving Loans by telefacsimile or telephone to each Lender) or Swing Line
Lender, as the case may be. 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 date specified therein. Any such voluntary prepayment shall be
applied as specified in Section 2.13(a).
(b) Voluntary Commitment Reductions.
(i) Company may, upon not less than three Business
Days' prior written or telephonic notice confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each applicable Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Commitments in an amount up to the amount by
which the Revolving Commitments exceed the Total Utilization of
Revolving Commitments at the time of such proposed termination or
reduction; provided, any such partial reduction of the Revolving
Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $250,000 in excess of that amount.
(ii) Company's notice to Administrative Agent shall
designate the date (which shall be a Business Day) of such termination
or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Commitments shall be
effective on the date specified in Company's notice and shall reduce
the Revolving Commitment of each Lender proportionately to its Pro Rata
Share thereof.
2.12. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. No later than the third Business Day
following the date of receipt by Company or any of its Subsidiaries of any Net
Asset Sale Proceeds, 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
40
through the applicable date of determination do not exceed $10,000,000, 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; provided further, pending any such investment all such Net Asset
Sale Proceeds shall be applied to prepay Revolving Loans to the extent
outstanding (without a reduction in Revolving Commitments).
(b) Insurance/Condemnation Proceeds. No later than the third
Business Day following the date of receipt by Company or any of its
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, 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; provided further, pending any such investment all
such Net Insurance/Condemnation Proceeds, as the case may be, shall be applied
to prepay Revolving Loans to the extent outstanding (without a reduction in
Revolving Commitments). 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) Issuance of Equity Securities. No later than the third
Business Day following the date of receipt by Company or any of its
Subsidiaries of any Cash proceeds from a capital contribution to, or the
issuance of any Capital Stock of, Company or any of its Subsidiaries (other than
pursuant to any employee stock or stock option compensation plan), Company shall
prepay the Loans as set forth in Section 2.13(b) in an aggregate amount equal to
75% of such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses; provided, during any period in which the Leverage Ratio
(determined for any such period by reference to the most recent Compliance
Certificate delivered pursuant to Section 5.1(c) calculating the Leverage Ratio)
shall be 2.50:1.00 or less, Company shall only be required to make the
prepayments and/or reductions otherwise required hereby in an amount equal to
50% of such net proceeds.
(d) Issuance of Debt. No later than the third Business Day
following the date of receipt by Company or any of its Subsidiaries of any Cash
proceeds from the incurrence of any Indebtedness of Company or any of its
Subsidiaries (other than with respect to any Indebtedness permitted to be
incurred pursuant to Section 6.1), Company shall prepay the Loans as set forth
in Section 2.13(b) in an aggregate amount equal to 100% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses.
FIRST LIEN CREDIT AGREEMENT EXECUTION
41
(e) Revolving Loans and Swing Loans. Company shall from time
to time prepay first, the Swing Line Loans, and second, the Revolving Loans to
the extent necessary so that the Total Utilization of Revolving Commitments
shall not at any time exceed the Revolving Commitments then in effect.
(f) Prepayment Certificate. Concurrently with any prepayment
of the Loans and/or reduction of the Revolving Commitments pursuant to Sections
2.12(a) through 2.12(d), Company shall deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the calculation of the amount
of the applicable net 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/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type of Loans. Any
prepayment of any Loan pursuant to Section 2.11(a) shall be applied as specified
by Company in the applicable notice of prepayment; provided, in the event
Company fails to specify the Loans to which any such prepayment shall be
applied, such prepayment shall be applied as follows:
first, to repay outstanding Swing Line Loans to the
full extent thereof; and
second, to repay outstanding Revolving Loans to the
full extent thereof.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount required to be paid pursuant to Sections 2.12(a) through 2.12(d) shall be
applied as follows:
first, to prepay the Swing Line Loans to the full
extent thereof;
second, to prepay the Revolving Loans to the full
extent thereof;
third, to prepay outstanding reimbursement
obligations with respect to Letters of Credit; and
fourth, to cash collateralize Letters of Credit.
(c) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
42
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 (other than voluntary prepayments of Revolving Loans) 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 Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Revolving Commitment
fees 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) 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
43
applied in accordance with the application arrangements described in Section 7.2
of the Pledge and Security Agreement.
2.15. RATABLE SHARING. 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, amounts payable in respect of Letters
of Credit, 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 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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
44
(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 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
45
prior to the last day of an Interest Period applicable to that Loan; 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 that any Lender (which term shall include
Issuing Bank for purposes of this Section 2.17(a)) 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
46
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
(which term shall include Issuing Bank for purposes of this Section 2.17(b))
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 Revolving
Commitments or Letters of Credit, or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
47
payable by any Credit Party to Administrative Agent or any Lender (which term
shall include Issuing Bank for purposes of this Section 2.18(b)) 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.
(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
FIRST LIEN CREDIT AGREEMENT EXECUTION
48
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, 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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
49
2.19. OBLIGATION TO MITIGATE. Each Lender (which term shall include
Issuing Bank for purposes of this Section 2.19) agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans or Letters of Credit, as the case may be, 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 Revolving
Commitments, Loans or Letters of Credit through such other office or in
accordance with such other measures, as the case may be, would not otherwise
adversely affect such Revolving Commitments, Loans or Letters of Credit 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. DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender defaults (a "DEFAULTING LENDER")
in its obligation to fund (a "FUNDING DEFAULT") any Revolving Loan or its
portion of any unreimbursed payment under Section 2.2(b)(iv) or 2.3(e) (in each
case, a "DEFAULTED LOAN"), then (a) during any Default Period with respect to
such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
"Lender" for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Credit Documents; (b) to the
extent permitted by applicable law, until such time as the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero, (i) any
voluntary prepayment of the Revolving Loans shall, if Company so directs at the
time of making such voluntary prepayment, be applied to the Revolving Loans of
other Lenders as if such Defaulting Lender had no Revolving Loans outstanding
and the Revolving Exposure of such Defaulting Lender were zero, and (ii) any
mandatory prepayment of the Revolving Loans shall, if Company so directs at the
time of making such mandatory prepayment, be applied to the Revolving Loans of
other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if
such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender,
it being understood and agreed that Company shall be entitled to retain any
portion of any mandatory prepayment of the Revolving Loans that is not paid to
such Defaulting Lender solely as a result of the operation of the provisions of
this clause (b); (c) such Defaulting Lender's Revolving Commitment and
outstanding Revolving Loans and such Defaulting Lender's Pro Rata Share of the
Letter of Credit Usage shall be excluded for purposes of calculating the
Revolving Commitment fee payable to Lenders in respect of any day during any
Default Period with respect to such Defaulting Lender, and such Defaulting
Lender shall not be entitled to receive any Revolving Commitment fee pursuant to
Section 2.10 with respect to such Defaulting Lender's Revolving Commitment in
respect of any Default Period with respect to
FIRST LIEN CREDIT AGREEMENT EXECUTION
50
such Defaulting Lender; and (d) the Total Utilization of Revolving Commitments
as at any date of determination shall be calculated as if such Defaulting Lender
had funded all Defaulted Loans of such Defaulting Lender. No Revolving
Commitment of any Lender shall be increased or otherwise affected, and, except
as otherwise expressly provided in this Section 2.20, performance by Company of
its obligations hereunder and the other Credit Documents shall not be excused or
otherwise modified as a result of any Funding Default or the operation of this
Section 2.20. The rights and remedies against a Defaulting Lender under this
Section 2.20 are in addition to other rights and remedies which Company may have
against such Defaulting Lender with respect to any Funding Default and which
Administrative Agent or any Lender may have against such Defaulting Lender with
respect to any Funding Default.
2.21. 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 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)
(i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five Business Days after Company's request that it cure such
default; or (c) 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, Defaulting 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 and its Revolving
Commitments, 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, (B) an amount equal to all unreimbursed drawings that have
been funded by such Terminated Lender, together with all then unpaid interest
with respect thereto at such time and (C) 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; provided, Company may not make such election with
respect to any Terminated Lender that is also an Issuing Bank unless, prior to
the effectiveness of such election, Company shall have caused each outstanding
Letter of Credit issued thereby to be cancelled. Upon the prepayment of all
amounts owing to any Terminated Lender and the termination of such Terminated
Lender's Revolving Commitments, if any, such Terminated
FIRST LIEN CREDIT AGREEMENT EXECUTION
51
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 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 Term Loans and the Equity Offering to the payment
of the Refinancing.
FIRST LIEN CREDIT AGREEMENT EXECUTION
52
(e) Borrowings of the Term Loans. On or before the
Closing Date:
(i) Company shall have received the gross proceeds
from the borrowings of the Term Loans in an aggregate amount in cash of
not less than $100,000,000;
(ii) Company shall have delivered to Syndication
Agent and Administrative Agent complete, correct and conformed copies
of the Term Loan Credit Agreement; and
(iii) The proceeds of Term Loans shall have been
irrevocably committed, simultaneously with the application of the
proceeds of the Senior Subordinated Notes and the Equity Offering, to
the payment of the Refinancing.
(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 or the issuance of Letters of
Credit to support the obligations of Company and its Subsidiaries with respect
thereto.
(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 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 First Priority
security interest in certain Real Estate Assets, Collateral Agent shall have
received from Company and each applicable Guarantor:
FIRST LIEN CREDIT AGREEMENT EXECUTION
53
(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.
(j) Personal Property Collateral. In order to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid, perfected
First 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);
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(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 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
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55
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 Term Loans and 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,
Administrative Agent and Co-Documentation Agents, the fees payable on the
Closing Date referred to in Section 2.10(d).
(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.
(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.
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56
(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. CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each Lender to
make any Loan, or Issuing Bank to issue any Letter of Credit, on any Credit
Date, including the Closing Date, are 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 or Issuance Notice, as the case
may be;
(ii) after making the Credit Extensions requested on
such Credit Date, the Total Utilization of Revolving Commitments shall
not exceed the Revolving Commitments then in effect;
(iii) as of such Credit Date, 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;
(iv) as of such Credit Date, no event shall have
occurred and be continuing or would result from the consummation of the
applicable Credit Extension that would constitute an Event of Default
or a Default;
(v) on or before the date of issuance of any Letter
of Credit, Administrative Agent shall have received all other
information required by the applicable Issuance Notice, and such other
documents or information as Issuing Bank may reasonably require in
connection with the issuance of such Letter of Credit;
(vi) (vi) as of such Credit Date, after giving effect
to the contemplated Credit Extension and Company's use of the proceeds
thereof on such date and assuming for purposes hereof, with respect to
any Credit Extension prior to 45 Business Days following the Closing
Date, that the Unpaid Refinancing Amount has been paid to the
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57
extent of any Cash and Cash Equivalents held by Company for such
purpose, Company shall be in compliance with the financial covenants
set forth in Section 6.8 hereof; and
(vii) (vii) after giving effect to such Credit
Extension the aggregate Cash and Cash Equivalents of Company and its
subsidiaries in any concentration account of Company or which have been
recently distributed from such concentration accounts to other accounts
of the Company or its Subsidiaries (other than payroll accounts in the
ordinary course of business, and excluding Cash and Cash Equivalents
held by Company for purposes of paying the Unpaid Refinancing Amount
within 45 Business Days following the Closing Date) will not exceed
$15,000,000.
(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, conversion/continuation or issuance of a Letter
of Credit, as the case may be; provided each such notice shall be promptly
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 and Issuing Bank to enter into this
Agreement and to make each Credit Extension to be made thereby, each Credit
Party represents and warrants to each Lender and Issuing Bank, on the Closing
Date and on each Credit 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
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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
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 Term Loan 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
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59
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.
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.
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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 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
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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 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
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62
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 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.
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(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.
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 and cancellation or
expiration of all Letters of Credit, 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:
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64
(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 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
65
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
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
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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 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
67
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 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
68
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.
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
FIRST LIEN CREDIT AGREEMENT EXECUTION
69
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 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
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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 First 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,
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 First 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 First 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
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71
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 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, so long as any Revolving
Commitment is in effect and until payment in full of all Obligations and
cancellation or expiration of all Letters of Credit, such Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.
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72
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty,
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(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 First 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 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 Term Loans owed under the Term Loan Credit Agreement
in an aggregate principal amount not to exceed $100,000,000, 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 Term Loan Credit Agreement, (ii) such refinancing,
renewal or replacement is incurred only by the Person who is the obligor on the
Term Loans being refinanced, renewed or replaced and (iii) the average life to
maturity thereof is greater than or equal to that of the Term Loans;
(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;
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(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 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 $10,000,000, 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 $10,000,000, 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
(i) 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 (ii) after giving effect to such Indebtedness, the Company shall be in
compliance with the financial covenants set forth in Section 6.8 hereof;
(m) Indebtedness of Company that is subordinated in right of
payment to the prior payment in full of the Obligations pursuant to terms and
conditions that are no less
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74
favorable to the Lenders than the terms and conditions of subordination provided
in the Senior Subordinated Notes Indenture or otherwise acceptable to the
Administrative Agent; provided that after giving effect to such Indebtedness and
Company's use of the proceeds thereof, the Company shall be in compliance with
the financial covenants set forth in Section 6.8 hereof; and
(n) other unsecured Indebtedness of Company and its
Subsidiaries in an aggregate amount not to exceed at any time $2,500,000.
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) 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 amounts
not yet overdue or (ii) for amounts that are overdue and that (in the case of
any such 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;
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75
(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;
(n) Liens on the collateral securing obligations under the
Term Loan Credit Agreement; provided that such Liens are subordinated to the
Liens securing the Obligations in accordance with the terms of the Intercreditor
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 $2,500,000 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
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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 Term Loan 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 Term Loan Credit
Agreement and any refinancing thereof permitted thereunder and hereunder; (ii)
any repurchases of Term Loans to the extent permitted and in accordance with the
terms of the Term Loan Credit Agreement and (iii) so long as there are no Loans
outstanding hereunder, voluntary prepayments of principal in respect of the
Indebtedness incurred under the Term Loan Credit Agreement and any refinancing
thereof permitted thereunder and hereunder;
(c) so long as no Event of Default shall have occurred and be
continuing or shall be caused thereby, Company may make Restricted Junior
Payments in respect of any repurchase, redemption or repayment of the Senior
Subordinated Notes as follows: if the Leverage Ratio at the time of such
Restricted Junior Payments (determined by reference to the most recent
Compliance Certificate delivered pursuant to Section 5.1(c) calculating the
Leverage Ratio and giving pro forma effect to the respective Restricted Junior
Payments) (x) is less than 2.50:1.00, the aggregate amount of such Restricted
Junior Payments shall not exceed the amount that would be permitted to be
repurchased, redeemed or repaid pursuant to the Senior Subordinated Note
Indenture, as in effect on the Closing Date, at the time of such Restricted
Junior Payments, (y) is greater than 2.50:1.00 but less than 4.00:1.00, then the
aggregate amount of such Restricted Junior Payments shall not exceed $10,000,000
in such Fiscal Year and (z) is greater than or equal to 4.00:1.00, then Company
shall not be permitted to make any Restricted Junior Payments pursuant to this
Section 6.5(c);
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(d) so long as no Event of Default shall have occurred and be
continuing or shall be caused thereby, Company may make any other additional
Restricted Junior Payments that are not otherwise permitted pursuant to this
Section 6.5 as follows: if the Leverage Ratio at the time of such Restricted
Junior Payments (determined by reference to the most recent Compliance
Certificate delivered pursuant to Section 5.1(c) calculating the Leverage Ratio
and giving pro forma effect to the respective Restricted Junior Payments) (x) is
less than 2.50:1.00, then Company shall be permitted to make those Restricted
Junior Payments that 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, (y) is greater than 2.50:1.00, but less than
4.00:1.00, then the aggregate amount of such Restricted Junior Payments shall
not exceed $12,000,000 in any Fiscal Year; provided, that such amount may be
increased in any Fiscal Year by the amount not utilized in the previous Fiscal
Year, and (z) is greater than or equal to 4.00:1.00, then Company shall not be
permitted to make any Restricted Junior Payments pursuant to this Section
6.5(d); and
(e) 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 Term Loan 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
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78
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 permitted by Section
6.8(c);
(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 $100,000 in the aggregate;
(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 $2,500,000 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. FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. Company shall not permit the
Interest Coverage Ratio as of the last day of any Fiscal Quarter, beginning with
the Fiscal Quarter ending March 31, 2004, to be less than 2.00:1.00:
(b) Leverage Ratio. Company shall not permit the Leverage
Ratio as of the last day of any Fiscal Quarter, beginning with the Fiscal
Quarter ending March 31, 2004, to exceed 4.50:1.00.
(c) Maximum Consolidated Capital Expenditures. Company shall
not, and shall not permit its Subsidiaries to:
(i) make or incur Discretionary Consolidated Capital
Expenditures in excess of $30,000,000 in any Fiscal Year; provided,
that the amount of Discretionary
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79
Consolidated Capital Expenditures in any Fiscal Year may be increased
by the amount of any Discretionary Consolidated Capital Expenditures
that were permitted but not made in the previous Fiscal Year; or
(ii) make or incur Maintenance Consolidated Capital
Expenditures and Discretionary Consolidated Capital Expenditures in
excess of $35,000,000, plus any carry-over Discretionary Capital
Expenditures from the previous Fiscal Year pursuant to clause (i)
above, in any Fiscal Year;
provided, that if the Leverage Ratio at the time of such Consolidated
Capital Expenditure (determined by reference to the most recent Compliance
Certificate delivered pursuant to Section 5.1(c) calculating the Leverage Ratio
and giving pro forma effect to such Consolidated Capital Expenditure) is less
than 2.50:1.00, then Company shall not be required to comply with the limits of
this Section 6.8(c).
(d) Certain Calculations. With respect to any period during
which a Permitted Acquisition or an Asset Sale has occurred (each, a "SUBJECT
TRANSACTION"), for purposes of determining compliance with the financial
covenants set forth in this Section 6.8, Consolidated Adjusted EBITDA shall be
calculated with respect to such period on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission, which would include cost
savings resulting from head count reduction, closure of facilities and similar
restructuring charges, which pro forma adjustments shall be certified by the
chief financial officer of Company) using the historical audited financial
statements of any business so acquired or to be acquired or sold or to be sold
and the consolidated financial statements of Company and its Subsidiaries which
shall be reformulated as if such Subject Transaction, and any Indebtedness
incurred or repaid in connection therewith, had been consummated or incurred or
repaid at the beginning of such period (and assuming (x) that such Indebtedness
bears interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans incurred during such period, and (y) that any
outstanding Loans borrowed in connection with such transaction are repaid with
excess cash balances when available).
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:
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80
(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;
(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 $5,000,000 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
$10,000,000; 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 not to exceed an aggregate
consideration of $25,000,000 in any Fiscal Year; 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 Term Loan
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
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81
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 $10,000,000.
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 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 TERM LOAN 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
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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 Term Loan 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 interest rate applicable
thereto, 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 prepayment provisions thereof, or change any collateral therefor (other than
to release such collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of the obligor thereunder or to confer any additional rights on
the lenders under the Term Loan Credit Agreement (or a representative on their
behalf) which would be adverse to any Credit Party or Lenders.
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.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, 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
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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, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
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;
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84
(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 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
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85
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 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
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86
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 and the
Revolving Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled, 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 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 and
the Revolving Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled, 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
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87
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 and the Revolving Commitments shall have terminated and all Letters
of Credit shall have expired or been cancelled. 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 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
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88
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 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
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; (ii) when due any amount payable to Issuing Bank in
reimbursement of any drawing under a Letter of Credit; or (iii) any interest on
any Loan or any fee or any other amount due hereunder within five 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 $2,500,000 or more or with an aggregate principal
amount of $5,000,000 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
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89
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; 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 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
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90
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 $2,500,000 or (ii) in the aggregate at any time an amount
in excess of $5,000,000 (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
(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 $2,500,000
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) Change of Control. A Change of Control shall occur; or
(l) 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;
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91
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 any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Company by Administrative Agent, (A) the Revolving Commitments, if
any, of each Lender having such Revolving Commitments and the obligation of
Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) 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; provided, the
foregoing shall not affect in any way the obligations of Lenders under Section
2.2(b)(iv) or Section 2.3(e); (C) Administrative Agent may cause Collateral
Agent to enforce any and all Liens and security interests created pursuant to
Collateral Documents; and (D) Administrative Agent shall direct Company to pay
(and Company hereby agrees upon receipt of such notice, or upon the occurrence
of any Event of Default specified in Section 8.1(f) and (g) to pay) to
Administrative Agent such additional amounts of cash, to be held as security for
Company's reimbursement Obligations in respect of Letters of Credit then
outstanding, equal to the Letter of Credit Usage at such time.
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.
Foothill 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 of CIT and GECC is hereby appointed a Co-Documentation Agent hereunder, and
each Lender hereby authorizes Co-Documentation Agents 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. Each of Syndication Agent and each Co-Documentation 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, neither GSCP, in its capacity as Syndication Agent, nor either of CIT or
GECC, in its capacity as Co-Documentation Agent, shall 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
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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 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 or the Letter of Credit Usage or the component
amounts thereof.
(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
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Agent in its individual capacity as a Lender hereunder. With respect to its
participation in the Loans and the Letters of Credit, each Agent shall have the
same rights and powers hereunder as any other Lender and may 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.
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 Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.
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9.7. SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL AGENT AND SWING LINE
LENDER. 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 Foothill 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. Any
resignation or removal of Administrative Agent pursuant to this Section shall
also constitute the resignation or removal of Foothill or its successor as Swing
Line Lender, and any successor Administrative Agent appointed pursuant to this
Section shall, upon its acceptance of such appointment, become the successor
Swing Line Lender for all purposes hereunder. In such event (a) Company shall
prepay any outstanding Swing Line Loans made by the retiring or removed
Administrative Agent in its capacity as Swing Line Lender, (b) upon such
prepayment, the retiring or removed Administrative Agent and Swing Line Lender
shall surrender any Swing
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Line Note held by it to Company for cancellation, and (c) Company shall issue,
if so requested by successor Administrative Agent and Swing Line Loan Lender, a
new Swing Line Note to the successor Administrative Agent and Swing Line Lender,
in the principal amount of the Swing Line Loan Sublimit then in effect and with
other appropriate insertions.
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, Administrative Agent, Swing
Line Lender, Issuing Bank or Co-Documentation Agents, shall be sent to such
Person's address as set forth on Appendix B or in the other relevant
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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 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 Revolving Commitments
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
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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
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. 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, the Letters of Credit
and participations therein and under the other Credit Documents, including all
claims of any nature or description arising out of or connected hereto, the
Letters of Credit and participations therein 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 amounts in
respect of the Letters of Credit 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
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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 (other than a Defaulting Lender) that would be affected thereby, no
amendment, modification, termination, or consent shall be effective if the
effect thereof would:
(i) extend the Revolving Commitment Termination Date;
(ii) waive, reduce or postpone any scheduled
repayment (but not prepayment);
(iii) extend the stated expiration date of any Letter
of Credit beyond the Revolving Commitment Termination Date;
(iv) 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;
(v) extend the time for payment of any such interest
or fees;
(vi) reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit;
(vii) amend, modify, terminate or waive any provision
of this Section 10.5(b) or Section 10.5(c);
(viii) amend the definition of "REQUISITE LENDERS" or
"PRO RATA SHARE"; provided, with the consent of Requisite Lenders,
additional extensions of credit pursuant hereto may be included in the
determination of "REQUISITE LENDERS" or "PRO RATA SHARE" on
substantially the same basis as the Revolving Commitments and the
Revolving Loans are included on the Closing Date;
(ix) 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
(x) 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:
(i) increase any Revolving Commitment of any Lender
over the amount thereof then in effect without the consent of such
Lender; provided, no amendment, modification or waiver of any condition
precedent, covenant, Default or Event of Default shall constitute an
increase in any Revolving Commitment of any Lender;
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(ii) amend, modify, terminate or waive any provision
hereof relating to the Swing Line Sublimit or the Swing Line Loans
without the consent of Swing Line Lender;
(iii) amend, modify, terminate or waive any
obligation of Lenders relating to the purchase of participations in
Letters of Credit as provided in Section 2.3(e) without the written
consent of Administrative Agent and of Issuing Bank; or
(iv) 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 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. 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 Revolving Commitments and Loans listed therein for
all purposes hereof, and no assignment or transfer of any such Revolving
Commitment or 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). Prior to such recordation, all amounts
owed with respect to the applicable Revolving Commitment or Loan shall be owed
to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of the
corresponding Revolving Commitments or Loans.
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(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
Revolving Commitment or 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 and
any related Revolving Commitments):
(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; and
(ii) to any Person meeting the criteria of clause
(ii) of the definition of the term of "Eligible Assignee" and (except
in the case of assignments made by or to GSCP), consented to by each of
Company and Administrative Agent (such consent not to be (x)
unreasonably withheld or delayed or (y) required, in the case of
Company, at any time an Event of Default shall have occurred and then
be continuing); provided, further each such assignment pursuant to this
Section 10.6(c)(ii) shall be in an aggregate amount of not less than
$2,500,000 (or such lesser amount as may be agreed to by Company and
Administrative Agent or as shall constitute the aggregate amount of the
Revolving Commitments and Revolving 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).
(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.
(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 commitments or
loans such as the applicable Revolving Commitments or Loans, as the case may be;
and (iii) it will make or invest in, as the case may be, its Revolving
Commitments or Loans for its own account in the ordinary course of its business
and without a view to distribution of such Revolving Commitments or 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
101
such Revolving Commitments or 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, (y) Issuing Bank shall continue to
have all rights and obligations thereof with respect to such Letters of Credit
until the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder and (z) 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); (iii) the Revolving Commitments
shall be modified to reflect the Revolving Commitment of such assignee and any
Revolving Commitment of such assigning Lender, if any; and (iv) 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 Revolving
Commitments and/or 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
Revolving Commitments, 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 or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Commitment Termination Date) 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 or of a mandatory reduction in the Revolving Commitment shall
not constitute a change in the terms of such participation, and that an increase
in any Revolving Commitment or 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 Documents (except as
expressly provided in the Credit Documents) supporting the Loans hereunder in
which such participant is participating.
FIRST LIEN CREDIT AGREEMENT EXECUTION
102
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, the cancellation
or expiration of the Letters of Credit and the reimbursement of any amounts
drawn thereunder, 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 the Hedge Agreements. Any forbearance or
failure to exercise, and any delay in exercising, any
FIRST LIEN CREDIT AGREEMENT EXECUTION
103
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 or Revolving Commitment 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
FIRST LIEN CREDIT AGREEMENT EXECUTION
104
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.
FIRST LIEN CREDIT AGREEMENT EXECUTION
105
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
FIRST LIEN CREDIT AGREEMENT EXECUTION
106
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]
FIRST LIEN CREDIT AGREEMENT EXECUTION
107
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
FIRST LIEN CREDIT AGREEMENT EXECUTION
S-1
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Sole Lead Arranger, Sole Bookrunner and Sole
Syndication Agent
By: /s/ ▇ ▇ ▇▇▇▇▇▇
--------------------------------
Authorized Signatory
FIRST LIEN CREDIT AGREEMENT EXECUTION
S-2
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Administrative Agent, Collateral Agent, Swing
Line Lender, Issuing Bank and a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: S.V.P.
FIRST LIEN CREDIT AGREEMENT EXECUTION
S-3
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent and a Lender
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
FIRST LIEN CREDIT AGREEMENT EXECUTION
S-4
CIT LENDING SERVICES CORPORATION,
as Co-Documentation Agent and a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
FIRST LIEN CREDIT AGREEMENT EXECUTION
S-5
THE FOOTHILL GROUP, INC.,
as a Lender
By: /s/ M. E. ▇▇▇▇▇▇▇
------------------------------------------
Name: M. E. ▇▇▇▇▇▇▇
Title: S.V.P.
FIRST LIEN CREDIT AGREEMENT EXECUTION
S-6
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
REVOLVING COMMITMENTS
LENDER REVOLVING COMMITMENT PRO RATA SHARE
------------------------------------ -------------------- --------------
CIT Lending Services Corporation $15,000,000.00 30.0%
General Electric Capital Corporation $10,000,000.00 20.0%
▇▇▇▇▇ Fargo Foothill, Inc. $12,500,000.00 25.0%
The Foothill Group, Inc. $12,500,000.00 25.0%
-------------- ----
TOTAL $50,000,000.00 100%
============== ====
APPENDIX A-1
FIRST 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-2
FIRST 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: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX B-3
FIRST LIEN CREDIT AGREEMENT EXECUTION
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Administrative Agent, Collateral Agent,
Swing Line Lender, Issuing Bank and a Lender
Administrative Agent's, Swing Line Lender's
And Issuing Bank's Principal Office:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
in each case, with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
APPENDIX B-4
FIRST LIEN CREDIT AGREEMENT EXECUTION
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent and a Lender
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
General Electric Capital Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ Kwik
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX B-5
FIRST LIEN CREDIT AGREEMENT EXECUTION
CIT LENDING SERVICES CORPORATION,
as Co-Documentation Agent and a Lender
CIT LENDING SERVICES CORPORATION
▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Telecopier: ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇.▇▇▇▇▇@▇▇▇.▇▇▇
with a copy to:
Legal
CIT LENDING SERVICES CORPORATION
▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Telecopier: ▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
and
Operations
CIT Structured Finance
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇
Assistant Manager, Funding Operations
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇.▇▇▇@▇▇▇.▇▇▇
APPENDIX B-6
FIRST LIEN CREDIT AGREEMENT EXECUTION
THE FOOTHILL GROUP, INC.,
as a Lender
Principal Office:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
in each case, with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇/7387
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
APPENDIX B-7
FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT A-1 TO
FIRST 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, ▇▇▇▇▇ FARGO FOOTHILL,
INC., as Administrative Agent and Collateral Agent, and GENERAL ELECTRIC CAPITAL
CORPORATION and CIT LENDING SERVICES CORPORATION, as Co-Documentation Agents.
Pursuant to Section 2.1 and Section 2.2 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 [MM/DD/YY]
(the "CREDIT DATE"):
1. Revolving Loans
- Base Rate Loans: $[___,___,___]
- Eurodollar Rate Loans, with an Initial
Interest Period of ________ Month(s): $[___,___,___]
2. Swing Line Loans: $[___,___,___]
Company hereby certifies that:
(i) after making the Credit Extensions requested on the
Credit Date, the Total Utilization of Revolving Commitments shall not
exceed the Revolving Commitments then in effect;
(ii) as of the Credit 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 such Credit 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;
(iii) as of the Credit 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;
(iv) as of the Credit Date, after giving effect to the
borrowing contemplated hereby and Company's use of the proceeds therof
on such date [and assuming for purposes hereof, with respect to any
Credit Extension prior to 45 Business Days following the Closing Date,
that the Unpaid Refinancing Amount has been paid to the extent of any
Cash and Cash Equivalents held by Company for such purpose], Company
shall be in compliance with the financial covenants set forth in
Section 6.8 of the Credit Agreement; and
(v) after giving effect to the Credit Extensions
requested on the Credit Date, the aggregate Cash and Cash Equivalents
of Company and its Subsidiaries in any concentration account of Company
or
EXHIBIT A-1-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
which have been recently distributed from such concentration accounts
to other accounts of Company or its Subsidiaries (other than payroll
accounts and other disbursement accounts in the ordinary course of
business, and excluding Cash and Cash Equivalents held by Company for
purposes of paying the Unpaid Refinancing Amount within 45 Business
Days following the Closing Date) will not exceed $15,000,000.
Date: [MM/DD/YY] CARMIKE CINEMAS, INC.
By: ________________________________
Title:
EXHIBIT A-1-2
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT A-2 TO
FIRST 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, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as Sole Lead
Arranger, Sole Bookrunner and Sole Syndication Agent, ▇▇▇▇▇ FARGO FOOTHILL,
INC., as Administrative Agent and Collateral Agent, and GENERAL ELECTRIC CAPITAL
CORPORATION and CIT LENDING SERVICES CORPORATION, as Co-Documentation Agents.
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. REVOLVING 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 FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT A-3 TO
FIRST LIEN CREDIT AGREEMENT
ISSUANCE 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, ▇▇▇▇▇ FARGO FOOTHILL,
INC., as Administrative Agent and Collateral Agent, and GENERAL ELECTRIC CAPITAL
CORPORATION and CIT LENDING SERVICES CORPORATION, as Co-Documentation Agents.
Pursuant to Section 2.3 of the Credit Agreement, Company desires a
Letter of Credit to be issued in accordance with the terms and conditions of the
Credit Agreement on [MM/DD/YY] (the "CREDIT DATE") in an aggregate face amount
of $[___,___,___].
Attached hereto for each such Letter of Credit are the following:
(a) the stated amount of such Letter of Credit;
(b) the name and address of the beneficiary;
(c) the expiration date; and
(d) either (i) the verbatim text of such
proposed Letter of Credit, or (ii) a description of the proposed terms
and conditions of such Letter of Credit, including a precise
description of any documents to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date of such
Letter of Credit, would require the Issuing Lender to make payment
under such Letter of Credit.
Company hereby certifies that:
(i) after issuing such Letter of Credit requested on the
Credit Date, the Total Utilization of Revolving Commitments shall not
exceed the Revolving Commitments then in effect and will not exceed the
Letter of Credit Sublimit;
(ii) as of the Credit 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 such Credit 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;
(iii) as of the Credit Date, no event has occurred and is
continuing or would result from the consummation of the issuance
contemplated hereby that would constitute an Event of Default or a
Default;
(iv) as of the Credit Date, after giving effect to the
issuance contemplated hereby and Company's use of proceeds thereof on
such date [and assuming for purposes hereof, with respect to any
EXHIBIT A-3-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
Credit Extension prior to 45 Business Days following the Closing Date,
that the Unpaid Refinancing Amount has been paid to the extent of any
Cash and Cash Equivalents held by Company for such purpose], Company
shall be in compliance with the financial covenants set forth in
Section 6.8 of the Credit Agreement; and
(v) after giving effect to the Credit Extensions
requested on the Credit Date, the aggregate Cash and Cash Equivalents
of Company and its Subsidiaries in any concentration account of Company
or which have been recently distributed from such concentration
accounts to other accounts of Company or its Subsidiaries (other than
payroll accounts and other disbursement accounts in the ordinary course
of business, and excluding Cash and Cash Equivalents held by Company
for purposes of paying the Unpaid Refinancing Amount within 45 Business
Days following the Closing Date) will not exceed $15,000,000.
EXHIBIT A-3-2
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
Date: [MM/DD/YY] CARMIKE CINEMAS, INC.
By: __________________________
Title:
EXHIBIT A-3-3
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT B-1 TO
FIRST LIEN CREDIT AGREEMENT
REVOLVING LOAN NOTE
$[1][___,___,___]
FEBRUARY [ ], 2004 New York, New York
FOR VALUE RECEIVED, CARMIKE CINEMAS, INC., a Delaware corporation
("COMPANY"), promises to pay [NAME OF LENDER] ("PAYEE") or its registered
assigns, on or before August [ ], 2008, the lesser of (a) [1][DOLLARS]
($[1][___,___,___]) and (b) the unpaid principal amount of all advances made by
Payee to Company as Revolving Loans under the Credit Agreement 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 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, ▇▇▇▇▇ FARGO
FOOTHILL, INC., as Administrative Agent and Collateral Agent, and GENERAL
ELECTRIC CAPITAL CORPORATION and CIT LENDING SERVICES CORPORATION, as
Co-Documentation Agents.
This Note is one of the "Revolving Loan Notes" in the aggregate
principal amount of $50,000,000 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 Revolving Loans
evidenced hereby were made and are 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 Revolving Commitment
EXHIBIT B-1-1
EXHIBITS TO FIRST 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 FIRST 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-1-2
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
TRANSACTIONS ON
REVOLVING LOAN NOTE
Amount of Loan Amount of Principal Outstanding Principal Notation
Date Made This Date Paid This Date Balance This Date Made By
---- -------------- -------------- ----------------- -------
EXHIBIT B-1-4
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT B-2 TO
FIRST LIEN CREDIT AGREEMENT
SWING LINE NOTE
$[1][___,___,___]
[2][MM/DD/YY] New York, New York
FOR VALUE RECEIVED, CARMIKE CINEMAS, INC., a Delaware corporation
("COMPANY"), promises to pay to ▇▇▇▇▇ FARGO FOOTHILL, INC., as Swing Line Lender
("Payee"), on or before August [ ],, 2008, the lesser of (a) [1][DOLLARS]
($[___,___,___]) and (b) the unpaid principal amount of all advances made by
Payee to Company as Swing Line Loans under the Credit Agreement 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 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, ▇▇▇▇▇ FARGO
FOOTHILL, INC., as Administrative Agent and Collateral Agent, and GENERAL
ELECTRIC CAPITAL CORPORATION and CIT LENDING SERVICES CORPORATION, as
Co-Documentation Agents.
This Note is the "Swing Line Note" 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
Swing Line Loans evidenced hereby were made and are 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 Swing Line Lender or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement.
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.
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.
--------------------------
[1] Swing Line Sublimit
[2] Date of Issuance
EXHIBIT B-2-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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-2-2
EXHIBITS TO FIRST 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-2-3
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
TRANSACTIONS ON
SWING LINE NOTE
Amount of Loan Amount of Principal Outstanding Principal Notation
Date Made This Date Paid This Date Balance This Date Made By
---- -------------- -------------- ----------------- -------
EXHIBIT B-2-4
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT C TO
FIRST 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, ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as
Sole Lead Arranger, Sole Bookrunner and Sole Syndication Agent, ▇▇▇▇▇ FARGO
FOOTHILL, INC., as Administrative Agent and Collateral Agent, and GENERAL
ELECTRIC CAPITAL CORPORATION and CIT LENDING SERVICES CORPORATION, as
Co-Documentation Agents, 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 FIRST 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 item in any prior
period.
EXHIBIT C-A-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
2. Consolidated Cash Interest Expense: $[___,___,___]
3. 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 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: $[___,___,___]
4. Consolidated Total Debt: $[___,___,___]
EXHIBIT C-A-2
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
5. Interest Coverage Ratio: (i)/(ii) =
(i) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter Period then ended: $[___,___,___]
(ii) Consolidated Cash Interest Expense
for such four-Fiscal Quarter Period: $[___,___,___]
Actual: _.__:1.00
Minimum Required: 2.00:1.00
6. Leverage Ratio: (i)/(ii) =
(i) Consolidated Total Debt: $[___,___,___]
(ii) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period then ended: $[___,___,___]
Actual: _.__:1.00
Maximum allowed: 4.50:1.00
7. Maintenance Consolidated Capital Expenditures: $[___,___,___]
8. Discretionary Consolidated Capital Expenditures: $[___,___,___]
Maximum allowed: $ 30,000,000
9. Total Consolidated Capital Expenditures: (7) + (8) $[___,___,___]
Maximum allowed: $ 35,000,000
EXHIBIT C-A-3
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT D TO
FIRST LIEN CREDIT AGREEMENT
OPINIONS OF COUNSEL
[TO COME]
EXHIBIT D-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT E TO
CREDIT AND GUARANTY 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 $50,000,000 Credit and Guaranty Agreement
dated as of February 4, 2004 among CARMIKE
CINEMAS, INC. (the "COMPANY"), the Lenders parties
thereto, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as
Sole Lead Arranger, Sole Bookrunner and Sole
Syndication Agent, ▇▇▇▇▇ FARGO FOOTHILL, INC., as
Administrative Agent, and GENERAL ELECTRIC CAPITAL
CORPORATION and CIT LENDING SERVICES CORPORATION,
as Co-Documentation Agents (the "CREDIT
AGREEMENT").
4. Assigned Interest:
----------------------------------
[*****]Select as applicable.
EXHIBIT E-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
Aggregate Amount of Percentage Assigned
Revolving Amount of Revolving of Revolving
Commitment/Loans Commitment/Loans Commitment/Loans
Facility Assigned for all Lenders Assigned [******]
----------------- --------------- -------- --------
Revolving 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 Revolving
Commitment/Loans of all Lenders thereunder.
EXHIBIT E-2
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
ASSIGNOR
[NAME OF ASSIGNOR]
By:_______________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:_______________________
Title:
[Consented to and][********] Accepted:
▇▇▇▇▇ FARGO FOOTHILL, INC., 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 FIRST 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 FIRST 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 FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT F TO
FIRST 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, ▇▇▇▇▇ FARGO
FOOTHILL, INC., as Administrative Agent and Collateral Agent, and GENERAL
ELECTRIC CAPITAL CORPORATION and CIT LENDING SERVICES CORPORATION, as
Co-Documentation Agents. 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 FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT G-1 TO
FIRST 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, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as Sole Lead Arranger, Sole
Bookrunner and Sole Syndication Agent, ▇▇▇▇▇ FARGO FOOTHILL, INC., as
Administrative Agent and Collateral Agent, and GENERAL ELECTRIC CAPITAL
CORPORATION and CIT LENDING SERVICES CORPORATION, as Co-Documentation Agents,
Company requests that Lenders make the following Loans to Company on
____________ (the "Closing Date"):
Revolving 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;
(iii) as of the Closing Date, and after giving effect to
Company's use of the proceeds thereof, and assuming for purposes hereof
that the Unpaid Refinancing Amount has been paid to the extent of any
Cash and Cash Equivalents held by Company for such purpose, Company
shall be in compliance with the financial covenants set forth in
Section 6.8 of the Credit Agreement;
EXHIBIT G-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
(iv) as of the Closing Date, and after giving effect to
any borrowing contemplated hereby, the aggregate Cash and Cash
Equivalents of Company and its Subsidiaries in any concentration
account of Company or which have been recently distributed from such
concentration accounts to other accounts of Company or its Subsidiaries
(other than payroll accounts and other disbursement accounts in the
ordinary course of business, and excluding Cash and Cash Equivalents
held by Company for purposes of paying the Unpaid Refinancing Amount
within 45 Business Days following the Closing Date) will not exceed
$15,000,000; and
(v) 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 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-2
EXHIBITS TO FIRST 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-3
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT H TO
FIRST 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, ▇▇▇▇▇ FARGO
FOOTHILL, INC., as Administrative Agent and Collateral Agent, and GENERAL
ELECTRIC CAPITAL CORPORATION and CIT LENDING SERVICES CORPORATION, as
Co-Documentation Agents.
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
EXHIBIT H-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
the "Collateral" and hereafter subject to each of the terms and
conditions of the Pledge and Security Agreement.
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 FIRST 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:
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Administrative Agent and as Collateral Agent
By:_____________________
Name:
Title:
EXHIBIT H-3
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT I TO
FIRST LIEN CREDIT AGREEMENT
PLEDGE AND SECURITY AGREEMENT
[TO COME]
EXHIBIT I-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
PLEDGE AND SECURITY AGREEMENT
DATED AS OF FEBRUARY 4, 2004
BETWEEN
EACH OF THE GRANTORS PARTY HERETO
AND
▇▇▇▇▇ FARGO FOOTHILL, INC.,
AS THE COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS; GRANT OF SECURITY.........................................1
1.1 GENERAL DEFINITIONS....................................................1
1.2 DEFINITIONS; INTERPRETATION............................................7
SECTION 2. GRANT OF SECURITY......................................................8
2.1 GRANT OF SECURITY......................................................8
2.2 CERTAIN LIMITED EXCLUSIONS.............................................8
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.......................9
3.1 SECURITY FOR OBLIGATIONS...............................................9
3.2 CONTINUING LIABILITY UNDER COLLATERAL..................................9
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS..........................10
4.1 GENERALLY.............................................................10
4.2 EQUIPMENT AND INVENTORY...............................................12
4.3 RECEIVABLES...........................................................13
4.4 INVESTMENT RELATED PROPERTY...........................................15
4.5 [RESERVED.]...........................................................22
4.6 LETTER OF CREDIT RIGHTS...............................................22
4.7 INTELLECTUAL PROPERTY.................................................22
4.8 COMMERCIAL TORT CLAIMS................................................25
SECTION 5. FURTHER ASSURANCES; ADDITIONAL GRANTORS...............................25
5.1 FURTHER ASSURANCES....................................................25
5.2 ADDITIONAL GRANTORS...................................................26
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..............................................................28
7.1 GENERALLY.............................................................28
7.2 APPLICATION OF PROCEEDS...............................................29
7.3 SALES ON CREDIT.......................................................30
7.4 DEPOSIT ACCOUNTS......................................................30
7.5 INVESTMENT RELATED PROPERTY...........................................30
7.6 INTELLECTUAL PROPERTY.................................................31
7.7 CASH PROCEEDS.........................................................32
SECTION 8. COLLATERAL AGENT......................................................32
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.......................33
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.......................33
SECTION 11. MISCELLANEOUS........................................................34
i
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 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 ▇▇▇▇▇ FARGO FOOTHILL, INC., 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 "CREDIT AGREEMENT"),
by and among Carmike Cinemas, Inc. ("COMPANY"), certain Subsidiaries of Company,
the lenders party thereto from time to time (the "LENDERS"), ▇▇▇▇▇▇▇ Sachs
Credit Partners L.P., as Sole Lead Arranger, Sole Bookrunner and Sole
Syndication Agent, General Electric Capital Corporation and CIT Lending Services
Corporation, as Co-Documentation Agents and ▇▇▇▇▇ Fargo Foothill, Inc., as
Administrative Agent and the Collateral Agent;
WHEREAS, subject to the terms and conditions of the Credit Agreement,
certain Grantors may enter into one or more Hedge Agreements (as defined in the
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 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
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.
1
"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).
"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
2
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.
"CREDIT AGREEMENT" shall have the meaning set forth in the
recitals.
"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.
"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.
"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
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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.
"PERMITTED SALE" shall mean those sales, transfers,
assignments and other dispositions of assets and property permitted by the
Credit Agreement.
"PLEDGE SUPPLEMENT" shall mean any supplement to this
agreement in substantially the form of Exhibit A.
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"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 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.
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"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.
"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 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.
"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
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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.
"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 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 Credit Agreement, the Credit Agreement
shall govern. All references herein to provisions of the UCC
7
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;
(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
8
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.
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, 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 shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.
9
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 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 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) 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
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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 first
priority Liens (subject in the case of priority only to 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 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, 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;
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(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 Permitted Liens, and such
Grantor shall defend the Collateral against all Persons at any time
claiming any interest therein;
(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:
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(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 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
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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).
(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 ▇▇▇▇ 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,
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
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foregoing, the Collateral Agent shall have the right at any time 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 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. 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
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(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;
(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 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. 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
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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 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 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
Credit Agreement, shall be deemed inconsistent with the terms
of this Agreement or the 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) 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
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(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
(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 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 priority
status 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
18
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 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) 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) 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
19
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 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.
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 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;
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(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 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
(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) deliver all Instruments in
excess of $100,000 to the Collateral Agent.
(b) Covenant and Agreement.
(i) 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 over such
21
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.
(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, 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:
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(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 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 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.
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(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;
(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 or as permitted under the 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,
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except financing statements or other documents or instruments filed or
to be filed in favor of the 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;
(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
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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 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
26
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 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, 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 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 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
27
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 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
28
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 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
29
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 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, 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. 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.
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7.6 INTELLECTUAL PROPERTY.
(a) Anything contained herein to the contrary notwithstanding,
upon the occurrence and during the continuation of an Event of Default:
(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;
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(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 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) 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. 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
32
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement, the 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 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 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 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, 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 have exercised reasonable care in the
custody and preservation of Collateral in its possession if
33
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 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 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 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 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).
34
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
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as the Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: S.V.P.
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
▇▇▇▇▇ FARGO FOOTHILL, INC., 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
--------------- -------------------------
EXHIBIT A-2
(E) Financing Statements:
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 INCORPORATION]
[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 a 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
EXHIBIT C-3
Section 8-102(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
EXHIBIT C-5
both Collateral Agents in the Securities Account have been terminated pursuant
to the terms of 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 a 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, 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,
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, 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
[__], 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 a
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: National City Bank
[Debtor]
EXHIBIT D-B-1
EXHIBIT J TO
FIRST LIEN CREDIT AGREEMENT
Prepared By, Recording Requested By,
and After Recording Return To:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY
AGREEMENT
([STATE])
by and from
[CARMIKE CINEMAS, INC.], "MORTGAGOR",
to
▇▇▇▇▇ FARGO FOOTHILL, INC., 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
EXHIBIT J-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY AGREEMENT
(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 ▇▇▇▇▇
FARGO FOOTHILL, INC., as Collateral Agent in such capacity ("Collateral Agent")
for the benefit of 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, Mortgagor, Mortgagee, the Lenders and certain other parties
have entered into that certain Credit and Guaranty Agreement dated as of
February 4, 2004 (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") (all capitalized terms used herein and not otherwise
defined shall have the same meanings given to such terms in the Credit
Agreement);
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 "Second Priority Credit Agreement"), Mortgagor has requested and National
City Bank (in its capacity as administrative agent and collateral agent for the
lenders party thereto (the "Junior Lenders"), the "Second Priority Mortgagee"),
and the Junior Lenders have agreed to provide a second priority secured term
loan facility to Mortgagor;
WHEREAS, as a condition to the execution of the Second Priority Credit
Agreement, the Junior Lenders require and Mortgagor has agreed to grant the
Second Priority Mortgagee, a second priority Lien on the Secured Property (as
hereinafter defined), pursuant to the terms of a separate mortgage to be
recorded immediately following the recordation of this Instrument, which Lien
shall at all times be subject and subordinate to the First Priority Lien granted
to Mortgagee pursuant to this Instrument;
WHEREAS, in order to induce Lenders to consent to Mortgagor entering
into the Second Priority Credit Agreement and to induce Lenders to extend credit
and other financial accommodations and lend monies to or for the benefit of
Mortgagor, and its subsidiaries, the Second Priority Mortgagee, on behalf of the
Junior 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, 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"):
EXHIBIT J-2
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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:
(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;
(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;
EXHIBIT J-3
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
(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.
Pursuant to the Credit Agreement, the Lenders have agreed to provide Mortgagor
with a revolving credit facility which permits Mortgagor to borrow certain
principal amounts, repay all or a portion of such principal amounts, and
reborrow the amounts previously paid to the Lenders, all upon satisfaction of
certain conditions stated in the Credit Agreement. The amount of such revolving
credit facility may increase or decrease from time to time as the Lenders
advance, Mortgagor repays, and the Lenders re-advance sums on account of the
revolving credit, all as more fully described in the Credit Agreement. The term
"Secured Indebtedness" includes without limitation all advances and re-advances
under the revolving credit feature of the Credit Agreement.
[THIS INSTRUMENT SHALL CONTINUE TO SECURE THE ENTIRE SECURED INDEBTEDNESS UP TO
A MAXIMUM PRINCIPAL AMOUNT OF FIFTY MILLION DOLLARS ($50,000,000) UNTIL THE
ENTIRE SECURED INDEBTEDNESS IS PAID IN FULL.]
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:
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
EXHIBIT J-4
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
respect to the Secured Property (the "Permitted Encumbrances"); (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 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
EXHIBIT J-5
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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 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
EXHIBIT J-6
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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. 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.
Section 1.12 TRANSFER OF THE SECURED PROPERTY. EXCEPT AS PERMITTED BY
THE CREDIT 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,
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
EXHIBIT J-7
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
(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.
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,
EXHIBIT J-8
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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, 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 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
EXHIBIT J-9
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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 it being the intent to give the Mortgagee a POWER TO SELL the Secured
Property to the fullest extent permitted under applicable law; 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) 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.
(c) 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. 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
EXHIBIT J-10
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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.
(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.
EXHIBIT J-11
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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,
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.
EXHIBIT J-12
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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 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.
EXHIBIT J-13
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
(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 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.
EXHIBIT J-14
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
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 Attorney's Fees. Any and all references in this instrument
to the recovery of attorney's fees by agent or the lenders shall be deemed to
refer to reasonable, actual attorney's fees.
Section 3.12 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 foreclose this Instrument pursuant to the power of sale granted
herein against all or any portion of the Secured Property it chooses in any such
county or counties in the State in which any of the Land is located.
[EXECUTION ON FOLLOWING PAGE]
EXHIBIT J-15
EXHIBITS TO FIRST 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:_____________________________
Title:_______________________________
Attest: _____________________________________
Name:_____________________________
Title:_______________________________
(CORPORATE SEAL)
EXHIBIT J-16
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
STATE OF ____________ :
COUNTY OF __________ :
I, the undersigned, a Notary Public in and for said County and State,
hereby certify that __________________________ and _____________________, whose
names as _______________ ___________________ and _______________________,
respectively, of _____________________________, a corporation, are signed to the
foregoing instrument and who are known to me, acknowledged before me on this day
that, being informed of the contents of the said instrument, they as such
officers and with full authority, executed the same voluntarily for and as the
act of said corporation on the date the same bears date.
Given under my hand and official notarial seal this _______ day of
February, 2004
_____________________________________________
Notary Public
My Commission Expires:_______________
EXHIBIT J-17
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT ▇-▇-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT K TO
FIRST 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 ▇▇▇▇▇ FARGO FOOTHILL, INC., 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,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as Sole Lead Arranger, Sole Bookrunner and
Sole Syndication Agent, ▇▇▇▇▇ FARGO FOOTHILL, INC., as Administrative Agent and
Collateral Agent, and GENERAL ELECTRIC CAPITAL CORPORATION and CIT LENDING
SERVICES CORPORATION, as Co-Documentation Agents, 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
EXHIBIT K-1
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
(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 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 FIRST 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 FIRST 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.
▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Administrative Agent
By: _________________________
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier:
[APPROPRIATE NOTARY BLOCK]
EXHIBIT K-4
EXHIBITS TO FIRST LIEN CREDIT AGREEMENT EXECUTION
EXHIBIT L TO
FIRST LIEN CREDIT AGREEMENT
INTERCREDITOR AGREEMENT
[TO COME UNDER SEPARATE COVER]
EXHIBIT L-1
EXHIBITS TO FIRST 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.
13
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.
15
(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.
22
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
23
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.
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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