Permitted Acquisitions (a) Subject to the provisions of this Section 9.14 and the requirements contained in the definition of Permitted Acquisition, the Lead Borrower and its Restricted Subsidiaries may from time to time after the Closing Date effect Permitted Acquisitions, so long as (in each case except to the extent the Required Lenders otherwise specifically agree in writing in the case of a specific Permitted Acquisition): (i) no Event of Default shall have occurred and be continuing at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto and (ii) at the time of the consummation of any Permitted Acquisition, the Consolidated Total Net Leverage Ratio, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which Section 9.01 Financials were required to have been delivered, does not exceed 5.25 to 1.00; provided that the aggregate consideration paid by the Lead Borrower and its Restricted Subsidiaries in connection with Permitted Acquisitions consummated from and after the Closing Date where the Acquired Entity or Business does not become a Credit Party or owned by a Credit Party, shall not exceed the sum of (x) the greater of $25,000,000 and 2.5% of Consolidated Total Assets (measured at the time of such Permitted Acquisition is consummated), plus (y) the Available Amount.
(b) At the time of each Permitted Acquisition involving the creation or acquisition of a Restricted Subsidiary, or the acquisition of Equity Interests of any Person, the Equity Interests thereof created or acquired in connection with such Permitted Acquisition shall be pledged for the benefit of the Secured Creditors pursuant to (and to the extent required by) the Pledge Agreement; provided that the pledge of the outstanding capital stock of any FSHCO or Foreign Subsidiary that is a CFC directly owned by the Lead Borrower or a Domestic Subsidiary that is a Credit Party shall be limited to (x) no more than sixty-five percent (65%) of the total combined voting power for all classes of the voting Equity Interests of such FSHCO or Foreign Subsidiary that is a CFC and (y) one-hundred percent (100%) of the non-voting Equity Interest of such FSHCO or Foreign Subsidiary that is a CFC; provided that for the avoidance of doubt, no FSHCO, Foreign Subsidiary that is a CFC, or Subsidiary of a CFC shall be required to pledge any of its assets in connection with any such Permitted Acquisition.
(c) Each Borrower shall cause each Restricted Subsidiary (other than an Excluded Subsidiary) which is formed to effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and to execute and deliver all of the documentation as and to the extent required by, Section 9.12, to the reasonable satisfaction of the Administrative Agent.
(d) The consummation of each Permitted Acquisition shall be deemed to be a representation and warranty by each Borrower that the certifications pursuant to this Section 9.14 are true and correct in all material respects and that all conditions thereto have been satisfied and that same is permitted in accordance with the terms of this Agreement, which representation and warranty shall be deemed to be a representation and warranty for all purposes hereunder, including, without limitation, Sections 8 and 11.
(e) Notwithstanding anything to the contrary contained herein, if the Lead Borrower has made a LCT Election pursuant to Section 1.03 in respect of a Permitted Acquisition, then any determination of compliance with the provisions of Section 9.14(a)(i) and 9.14(d) shall be made effective as of the date of entering the definitive agreement for such Permitted Acquisition.
Capital Expenditures The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).
Maximum Capital Expenditures The Parent and the Borrower will, and will cause each Consolidated Subsidiary to, not make Capital Expenditures on a consolidated basis that exceed $30,000,000 in any fiscal year (the “Base Capital Expenditure Amount”). Notwithstanding anything to the contrary, the Base Capital Expenditure Amount shall be increased by the following amounts: (i) to the extent that the aggregate amount of Capital Expenditures made by the Parent and its Consolidated Subsidiaries in any fiscal year is less than the Base Capital Expenditure Amount, the amount of such difference may be carried forward and used to make Capital Expenditures in succeeding fiscal years, provided that in any fiscal year, the amount permitted to be applied to make Capital Expenditures pursuant to this clause (i) shall in no event exceed an amount equal to 75% of the unused portion of the Base Capital Expenditure Amount for such fiscal year (without giving effect to any prior adjustments), (ii) if no Default or Event of Default has occurred and is continuing, or would result after giving effect thereto, the Parent and its Consolidated Subsidiaries may make additional Capital Expenditures to the extent that the amount of such excess is deducted from the Base Capital Expenditure Amount in succeeding fiscal years, provided that in any fiscal year, the amount permitted to be applied to make Capital Expenditures pursuant to this clause (ii) shall in no event exceed an amount equal to 25% of the Base Capital Expenditure Amount (without giving effect to any prior adjustments) and (iii) the Base Capital Expenditure Amount shall exclude any Capital Expenditures that are funded with the Available Credits; provided that, at the time of such Capital Expenditures, the Borrower shall deliver a certificate of a Financial Officer stating the portion of Capital Expenditures that is being made from the Available Credit, and setting forth a calculation of the Available Credit immediately before and immediately after such Capital Expenditures.
Consolidated Capital Expenditures (i) Company will not, and will not permit any of its Subsidiaries to, make or commit to make Consolidated Capital Expenditures in any Fiscal Year, beginning with the Fiscal Year ending December 31, 2003, except Consolidated Capital Expenditures which do not aggregate in excess of the corresponding amount set forth below opposite such Fiscal Year: Fiscal Year ending December 31, 2003 $ 5,000,000 Fiscal Year ending December 31, 2004 $ 5,000,000 Fiscal Year ending December 31, 2005 and each Fiscal Year thereafter $ 7,000,000 provided that (a) if the aggregate amount of Consolidated Capital Expenditures actually made in any such Fiscal Year shall be less than the limit with respect thereto set forth above (before giving effect to any increase therein pursuant to this proviso) (the “Base Amount”), then the amount of such shortfall (up to an amount equal to 50% of the Base Amount for such Fiscal Year, without giving effect to this proviso) may be added to the amount of such Consolidated Capital Expenditures permitted for the immediately succeeding Fiscal Year and any such amount carried forward to a succeeding Fiscal Year shall be deemed to be used prior to Company and its Subsidiaries using the amount of capital expenditures permitted by this section in such succeeding Fiscal Year, without giving effect to such carryforward and (b) for any Fiscal Year (or portion thereof) following any acquisition of a business (whether through the purchase of assets or of shares of capital stock) permitted under subsection 6.7, the Base Amount for such Fiscal Year (or portion) shall be increased, for each such acquisition, by an amount equal to the product of (A) the lesser of (x) $5,000,000 and (y) 4% of revenues of the business acquired in such acquisition for the period of four Fiscal Quarters most recently ended on or prior to the date of such business acquisition multiplied by (B) (x) in the case of any partial Fiscal Year, a fraction, the numerator of which is the number of days remaining in such Fiscal Year after the date of such business acquisition and the denominator of which is 365 (or 366 in a leap year), and (y) in the case of any full Fiscal Year, 1.
(ii) The parties acknowledge and agree that the permitted Consolidated Capital Expenditure level set forth in clause (i) above shall be exclusive of the amount of Consolidated Capital Expenditures actually made with the proceeds of a cash capital contribution to Company (including the proceeds of issuance of equity securities) made by Parent from the issuance by Parent of its equity Securities after the Closing Date and specifically identified in a certificate delivered by an Authorized Officer of Company to Administrative Agent on or about the time such capital contribution is made; provided that, to the extent any such cash capital contributions constitute Net Securities Proceeds after the Closing Date, only that portion of such Net Securities Proceeds which is not required to be applied as a prepayment pursuant to Section 2.4B(ii)(c) (or pursuant to the First Lien Credit Agreement) may be used for Consolidated Capital Expenditures pursuant to this clause (ii).
Excluded Expenditures The Recipient undertakes that the proceeds of the Financing shall not be used to finance Excluded Expenditures. If the Association determines at any time that an amount of the Financing was used to make a payment for an Excluded Expenditure, the Recipient shall, promptly upon notice from the Association, refund an amount equal to the amount of such payment to the Association. Amounts refunded to the Association upon such request shall be cancelled.
Investments and Acquisitions Neither the Company nor any of its Subsidiaries shall have outstanding, acquire, commit itself to acquire or hold any Investment (including any Investment consisting of the acquisition of any business) (or become contractually committed to do so) except for the following:
(a) Investments of the Company and its Subsidiaries in Wholly Owned Subsidiaries (a) which are domestic Subsidiaries as of the date of this Agreement or (b) which become domestic Wholly Owned Subsidiaries after the Closing Date and become Guarantors to the extent required by Section 10.09; provided, however, that the aggregate book value of all assets (other than intercompany obligations) owned by Immaterial Subsidiaries shall not exceed $10,000,000.
(b) Intercompany loans and advances from any Subsidiary to the Company or any Guarantor that, in the case of loans or advances from Foreign Subsidiaries, are subordinated to the Obligations in accordance with the Foreign Subsidiary Subordination Agreement.
(c) Investments in Cash Equivalents.
(d) Guarantees permitted by Section 6.06.
(e) So long as immediately before and after giving effect thereto no Default exists, and so long as the Company (if the Company is party thereto) or a Guarantor (if the Company is not party thereto) is the surviving entity, the Company and its Subsidiaries may acquire another entity in the same line of business as the Company as described in Section 6.02(a) if:
(i) at all times when the Consolidated Leverage Ratio is greater than 2.50 for the most recent period of four consecutive fiscal quarters (calculated on a pro forma basis giving effect to the proposed acquisition as if such acquisition had been consummated at the beginning of such period) for which financial reports have been (or are required to have been) furnished to the Lenders in accordance with Sections 6.04(a) or 6.04(b), the purchase price for all such acquisitions permitted pursuant to this clause (e)(i) does not exceed, except with the consent of the Required Lenders, $100,000,000 in cash (excluding consideration consisting of Capital Stock, the proceeds of the issuance of Capital Stock or Subordinated Indebtedness) in the aggregate over the term of the Agreement;
(ii) at all times when the Consolidated Leverage Ratio is less than or equal to 2.50 for the most recent period of four consecutive fiscal quarters (calculated on a pro forma basis giving effect to the proposed acquisition as if such acquisition had been consummated at the beginning of such period) for which financial reports have been (or are required to have been) furnished to the Lenders in accordance with Sections 6.04(a) or 6.04(b), the Company and its Subsidiaries may make unlimited acquisitions; provided, however that in the event a transaction permitted pursuant to this clause (e)(ii) would, on a pro forma basis after giving effect thereto, cause the Consolidated Leverage Ratio to exceed 2.50, the portion of the cash purchase price with respect to such transaction attributed to causing the Consolidated Leverage Ratio to be greater than 2.50 shall only be permitted to be paid to the extent the Company has sufficient availability in the $100,000,000 basket set forth in clause (e)(i) to take into account such excess amount; provided, further, that with respect to any acquisition permitted pursuant to this Section 6.08(e)(ii), (i) the acquisition must be approved by the target entity’s board of directors, (ii) the Company must be in compliance with the Computation Covenants immediately after giving effect to such acquisition, (iii) the acquired entity must not have any environmental liabilities which, after giving effect to such acquisition, would reasonably be expected to result in a Material Adverse Effect and (iv) any Subsidiary acquired under this Section 6.08(e) (other than (a) a Foreign Subsidiary or (b) any Immaterial Subsidiary if the aggregate book value of the assets (other than intercompany obligations) of all Immaterial Subsidiaries acquired under this Section 6.08(e) since the Closing Date does not exceed $10,000,000) shall guarantee the Obligations, as contemplated by Section 10.09.
(f) So long as immediately before and after giving effect thereto no Default exists, the Company and its Subsidiaries may make (i) Investments in Unrestricted Affiliates engaged in businesses contemplated by Section 6.02(a) and (ii) Investments consisting of contributions of Property to Unrestricted Affiliates, in an aggregate amount for all such Investments permitted pursuant to this clause (f) (calculated at net book value at the time of such Investment), when taken together with the aggregate amount of all Dispositions permitted pursuant to Section 6.10(e), not to exceed $100,000,000.
(g) Loans or advances to employees of the Company in an amount not to exceed (i) $1,000,000 in the aggregate outstanding at any time for the purchase of capital stock of the Company and (ii) $5,000,000 in the aggregate outstanding at any time for all other purposes.
(h) So long as immediately before and after giving effect thereto no Default exists, Investments of the Company and its Subsidiaries in foreign Wholly Owned Subsidiaries; provided, however, that other than with respect to Investments outstanding as of the Closing Date as described on Schedule 6.08(h), (i) such Investments shall not involve the transfer of substantial noncash assets from the Company and its domestic Subsidiaries to its Foreign Subsidiaries other than up to $35,000,000 in book value of foreign patents and foreign trademarks; and (ii) net cash Investments of the Company and its domestic Subsidiaries in Foreign Subsidiaries made pursuant to this Section 6.08(h) at any one time outstanding shall not exceed $125,000,000 in the aggregate.
(i) So long as immediately before and after giving effect thereto no Default exists, and provided that the Company complies with Section 10.09, the Company may create a Wholly Owned Subsidiary that constitutes a holding company for the Company’s European Subsidiaries.
Investments; Acquisitions Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make or own any Investment in any Person, including any Joint Venture, or acquire, by purchase or otherwise, all or substantially all the business, property or fixed assets of, or Capital Stock of any Person, or any division or line of business of any Person except:
(i) Company and its Subsidiaries may make and own Investments consisting of Cash and Cash Equivalents; provided that, at any time Revolving Loans or Swing Line Loans are outstanding, the aggregate amount of Cash and Cash Equivalents permitted to be owned by Company and its Domestic Subsidiaries shall not exceed $35,000,000 for any period of five (5) consecutive days;
(ii) Company and its Subsidiaries may continue to own the Investments owned by them as of the Closing Date in the Company and in any Subsidiaries of Company (and may convert any such Investments in the form of Indebtedness into Investments in the form of Capital Stock), and Company and its Subsidiaries may make and own additional Investments in the Company or any Subsidiary Guarantor;
(iii) Company and its Subsidiaries may (a) become liable in respect of Contingent Obligations permitted by subsection 7.4 and (b) make and incur intercompany loans to the extent permitted under subsection 7.1(v);
(iv) Company and its Subsidiaries may make Consolidated Capital Expenditures permitted by subsection 7.8;
(v) Company and its Subsidiaries may continue to own the Investments described in Schedule 7.3A annexed hereto (and may make incremental Investments contemplated in connection therewith) and any extension or renewal thereof; provided that any additional Investments made with respect thereto shall be permitted only to the extent such Investments are described on Schedule 7.3A or made in accordance with the other provisions of this subsection 7.3;
(vi) Company and its Subsidiaries may acquire any business, division, line or assets (including Capital Stock and including Capital Stock of Subsidiaries formed in connection with any such acquisition) for an aggregate purchase price (determined at the time of purchase thereof) not in excess of $75,000,000 in any individual case (provided that such amount may be increased by the amount of any Net Securities Proceeds from the issuance of any Capital Stock, Net Asset Sale Proceeds or Net Insurance/Condemnation Proceeds used to fund such purchase price in accordance with this Agreement, subject, however, to the provisions of subsections 2.4B(iii) and 6.4C hereof (and, with respect to any such Net Securities Proceeds, solely to the extent such Net Securities Proceeds are not applied to increase the limit under subsection 7.8)), and continue to own such assets after the acquisition thereof; provided that (a) no Potential Event of Default or Event of Default shall have occurred and be continuing at the time such acquisition occurs or immediately after giving effect thereto, (b) Company shall, and shall cause its Subsidiaries to, comply with the requirements of subsections 6.8 and 6.9 (within the time period required thereunder or within such other time period as Administrative Agent may permit in its sole discretion) with respect to each such acquisition that results in a Person becoming a Material Subsidiary, (c) all representations and warranties contained herein and in the other Loan Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such acquisition (both before and after giving effect thereto), unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, (d) for any such acquisitions Company shall have provided (I) financial statements for any Person (or line of business) acquired in any such acquisition for the last Fiscal Year of such Person or line of business, audited or reviewed by independent certified public accountants reasonably satisfactory to Administrative Agent or such other financial statements, in each case, available to Company and (II) to Administrative Agent a pro-forma Compliance Certificate certified by a Financial Officer of Company and demonstrating that after giving effect to such acquisition, Company and its Subsidiaries shall be in Pro Forma Compliance, and (e) the amount by which (1) the Revolving Loan Commitment Amount exceeds (2) the Total Utilization of Revolving Loan Commitments after giving effect to such acquisition and any related transactions, is not less than $25,000,000;
(vii) so long as no Event of Default has occurred and is continuing, Company and its Subsidiaries may make additional Investments in any Subsidiary that is not a Subsidiary Guarantor; provided that the amount of all such Investments does not (together with Indebtedness permitted by subsection 7.1(v)) exceed $100,000,000 (net of cash amounts paid by any Subsidiary that is not a Subsidiary Guarantor to Company or any Subsidiary Guarantor after the Closing Date in respect of (A) Investments made in such Subsidiary that is not a Subsidiary Guarantor and (B) the share capital of such Subsidiary that is not a Subsidiary Guarantor, including, without limitation, cash payments that are comprised of dividends, share repurchases, share redemptions or other cash returns on such share capital) in the aggregate outstanding at any time for all such Investments;
(viii) Company and its Subsidiaries may make and own other Investments in an aggregate amount not to exceed at any time $25,000,000;
(ix) Company may acquire and hold obligations of one or more officers or other employees of Company or its Subsidiaries in connection with such officers’ or employees’ acquisition of shares of Company’s Capital Stock, so long as no cash is actually advanced by Company or any of its Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(x) Company and its Subsidiaries may receive and hold promissory notes and other non-cash consideration received in connection with any Asset Sale permitted by subsection 7.7;
(xi) Company and its Subsidiaries may acquire and hold Investments in Securities in connection with the full or partial satisfaction, settlement or enforcement of Indebtedness or claims or other obligations due or owing to Company or any of its Subsidiaries or as security for any such Indebtedness or claim;
(xii) any transaction permitted by subsections 7.5 or 7.7;
(xiii) deposits, prepayments and extensions of trade credit in the ordinary course of business;
(xiv) Company and its Subsidiaries may make the Investments described in Schedule 7.3B annexed hereto; provided that the aggregate fair market value of such Investments (as determined as of the date each such Investment is made) shall not exceed $42,000,000; and
(xv) Investments by Company or any Subsidiary Guarantor in any of their respective Subsidiaries (1) consisting of Capital Stock and/or intercompany notes made to achieve cash repatriation strategies or (2) the consideration for which is the cancellation or other settlement of any corresponding intercompany Indebtedness incurred in connection with Investments permitted pursuant to the foregoing clause (1), in each case so long as the net cash Investment by Company or such Subsidiary Guarantor in connection therewith does not (a) exceed zero after the tenth day following the making of such cash Investment and (b) in any event exceed $50,000,000 (taken together with the amount of all other cash Investments then outstanding under this subsection 7.3(xv)) at any time.
Capital Expenditure Make or incur any Capital Expenditure if, after giving effect thereto, the aggregate amount of all Capital Expenditures by Borrower in any fiscal year would exceed the amount set forth on the Schedule;
Limitation on Capital Expenditures Make or commit to make any Capital Expenditures except:
(a) Capital Expenditures made (or deemed made) with the proceeds of any Reinvestment Deferred Amount (including Capital Expenditures made during the six-month period prior to the relevant Reinvestment Event);
(b) Capital Expenditures in any Fiscal Year to finance the acquisition, construction or leasing of fixed or capital assets of the Borrower and its Class I Restricted Subsidiaries in the ordinary course of business not exceeding the Applicable Consolidated EBITDA Amount for such Fiscal Year; provided, that (x) such amounts referred to above, if not so expended in the Fiscal Year for which it is permitted, may be carried over for expenditure in the next succeeding Fiscal Year and (y) Capital Expenditures made pursuant to this paragraph (b) during any Fiscal Year shall be deemed made, first, in respect of amounts permitted for such Fiscal Year as provided above and, second, in respect of amounts carried over from the prior Fiscal Year pursuant to clause (x) above;
(c) to the extent that no amounts under Section 7.7(a) and (b) are available, Capital Expenditures to finance the acquisition, construction or leasing of fixed or capital assets in an amount not to exceed the Applicable Amount at the time of, and immediately prior to the making of, such Capital Expenditure; provided that, immediately prior to and after giving effect to such Capital Expenditure under this paragraph (c), no Default or Event of Default shall have occurred and be continuing; and
(d) notwithstanding anything in this Section 7.7 to the contrary, and without utilization of any amounts described in paragraphs (a) through (c) of this Section 7.7, purchases of digital projectors and other digital cinema equipment from or with DCIP.
Asset Dispositions, etc The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, all or substantially all of the assets of (a) the Borrower or (b) the Subsidiaries of the Borrower, taken as a whole, except sales of assets between or among the Borrower and Subsidiaries of the Borrower.
