EXHIBIT 10.15
EXECUTION COPY
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$360,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
CINEMARK, INC.,
AS THE PARENT,
CNMK HOLDING, INC.,
AS HOLDINGS,
CINEMARK USA, INC.,
AS THE BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
XXXXXX BROTHERS INC.
AND
XXXXXXX SACHS CREDIT PARTNERS L.P.,
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS SYNDICATION AGENT,
DEUTSCHE BANK SECURITIES INC.,
THE BANK OF NEW YORK,
GENERAL ELECTRIC CAPITAL CORPORATION,
AND
CIBC INC.,
AS CO-DOCUMENTATION AGENTS,
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF APRIL 2, 2004
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS................................................................................... 2
1.1 Defined Terms................................................................................. 2
1.2 Other Definitional Provisions................................................................. 29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................................................... 30
2.1 Term Loan Commitments......................................................................... 30
2.2 Procedure for Term Loan Borrowing............................................................. 30
2.3 Repayment of Term Loans....................................................................... 30
2.4 Revolving Credit Commitments.................................................................. 31
2.5 Procedure for Revolving Credit Borrowing...................................................... 32
2.6 Repayment of Loans; Evidence of Debt.......................................................... 32
2.7 Commitment Fees, etc.......................................................................... 33
2.8 Termination or Reduction of Revolving Credit Commitments...................................... 33
2.9 Optional Prepayments.......................................................................... 34
2.10 Mandatory Prepayments......................................................................... 34
2.11 Conversion and Continuation Options........................................................... 36
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches..................................... 36
2.13 Interest Rates and Payment Dates.............................................................. 37
2.14 Computation of Interest and Fees.............................................................. 37
2.15 Inability to Determine Interest Rate.......................................................... 38
2.16 Pro Rata Treatment and Payments............................................................... 38
2.17 Requirements of Law........................................................................... 40
2.18 Taxes......................................................................................... 41
2.19 Indemnity..................................................................................... 42
2.20 Illegality.................................................................................... 43
2.21 Change of Lending Office...................................................................... 43
2.22 Replacement of Lenders under Certain Circumstances............................................ 43
2.23 Addition of Peso Subfacility.................................................................. 44
SECTION 3. LETTERS OF CREDIT............................................................................. 46
3.1 L/C Commitment................................................................................ 46
3.2 Procedure for Issuance of Letter of Credit.................................................... 46
3.3 Fees and Other Charges........................................................................ 47
3.4 L/C Participations............................................................................ 47
3.5 Reimbursement Obligation of the Borrower...................................................... 48
3.6 Obligations Absolute.......................................................................... 48
3.7 Letter of Credit Payments..................................................................... 49
3.8 Applications.................................................................................. 49
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................................ 49
4.1 Financial Condition........................................................................... 49
4.2 No Change..................................................................................... 50
4.3 Corporate Existence; Compliance with Law...................................................... 50
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4.4 Corporate Power; Authorization; Enforceable Obligations....................................... 50
4.5 No Legal Bar.................................................................................. 50
4.6 No Material Litigation........................................................................ 51
4.7 No Default.................................................................................... 51
4.8 Ownership of Property; Liens.................................................................. 51
4.9 Intellectual Property......................................................................... 51
4.10 Taxes......................................................................................... 51
4.11 Federal Regulations........................................................................... 52
4.12 Labor Matters................................................................................. 52
4.13 ERISA......................................................................................... 52
4.14 Investment Company Act; Other Regulations..................................................... 52
4.15 Subsidiaries.................................................................................. 53
4.16 Use of Proceeds............................................................................... 53
4.17 Environmental Matters......................................................................... 53
4.18 Accuracy of Information, etc.................................................................. 54
4.19 Security Documents............................................................................ 55
4.20 Solvency...................................................................................... 55
4.21 Senior Indebtedness........................................................................... 56
4.22 Regulation H.................................................................................. 56
SECTION 5. CONDITIONS PRECEDENT.......................................................................... 56
5.1 Conditions to Initial Extension of Credit..................................................... 56
5.2 Conditions to Each Extension of Credit........................................................ 62
SECTION 6. AFFIRMATIVE COVENANTS......................................................................... 62
6.1 Financial Statements.......................................................................... 63
6.2 Certificates; Other Information............................................................... 63
6.3 Payment of Obligations........................................................................ 65
6.4 Conduct of Business and Maintenance of Existence, etc......................................... 65
6.5 Maintenance of Property; Insurance............................................................ 65
6.6 Inspection of Property; Books and Records; Discussions........................................ 65
6.7 Notices....................................................................................... 66
6.8 Environmental Laws............................................................................ 66
6.9 Additional Collateral, etc.................................................................... 66
6.10 Further Assurances............................................................................ 69
6.11 Designation of Restricted and Unrestricted Subsidiaries....................................... 69
6.12 Maintenance of Separate Existence............................................................. 69
6.13 Maintenance of Fee Owned Properties........................................................... 71
6.14 Post-Effective Date Mortgaged Properties...................................................... 71
SECTION 7. NEGATIVE COVENANTS............................................................................ 72
7.1 Financial Condition Covenants................................................................. 72
7.2 Limitation on Indebtedness.................................................................... 73
7.3 Limitation on Liens........................................................................... 76
7.4 Limitation on Fundamental Changes............................................................. 78
7.5 Limitation on Disposition of Property......................................................... 79
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7.6 Limitation on Restricted Payments............................................................. 80
7.7 Limitation on Capital Expenditures............................................................ 82
7.8 Limitation on Investments..................................................................... 82
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc.................... 84
7.10 Limitation on Transactions with Affiliates.................................................... 85
7.11 Limitation on Sales and Leasebacks............................................................ 85
7.12 Limitation on Changes in Fiscal Periods....................................................... 86
7.13 Limitation on Negative Pledge Clauses......................................................... 86
7.14 Limitation on Restrictions on Subsidiary Distributions........................................ 87
7.15 Limitation on Lines of Business............................................................... 87
7.16 Limitation on Activities of the Parent and Holdings........................................... 87
7.17 Limitation on Hedge Agreements................................................................ 89
7.18 Limitation on New Leases...................................................................... 89
7.19 Limitations on Activities of Class II Restricted Subsidiaries and Unrestricted Subsidiaries... 89
SECTION 8. EVENTS OF DEFAULT............................................................................. 89
SECTION 9. THE AGENTS.................................................................................... 93
9.1 Appointment................................................................................... 93
9.2 Delegation of Duties.......................................................................... 93
9.3 Exculpatory Provisions........................................................................ 93
9.4 Reliance by Agents............................................................................ 93
9.5 Notice of Default............................................................................. 94
9.6 Non-Reliance on Agents and Other Lenders...................................................... 94
9.7 Indemnification............................................................................... 95
9.8 Agent in Its Individual Capacity.............................................................. 95
9.9 Successor Agents.............................................................................. 95
9.10 Authorization to Release Liens and Guarantees................................................. 96
9.11 The Arrangers; the Syndication Agent; the Co-Documentation Agents............................. 96
SECTION 10. MISCELLANEOUS................................................................................. 96
10.1 Amendments and Waivers........................................................................ 96
10.2 Notices....................................................................................... 98
10.3 No Waiver; Cumulative Remedies................................................................ 100
10.4 Survival of Representations and Warranties.................................................... 100
10.5 Payment of Expenses........................................................................... 100
10.6 Successors and Assigns; Participations and Assignments........................................ 102
10.7 Adjustments; Set-off.......................................................................... 105
10.8 Counterparts.................................................................................. 106
10.9 Severability.................................................................................. 106
10.10 Integration................................................................................... 106
10.11 GOVERNING LAW................................................................................. 106
10.12 Submission To Jurisdiction; Waivers........................................................... 106
10.13 Acknowledgments............................................................................... 107
10.14 Confidentiality............................................................................... 107
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10.15 Release of Collateral and Guarantee Obligations............................................... 108
10.16 Accounting Changes............................................................................ 109
10.17 Delivery of Lender Addenda.................................................................... 109
10.18 WAIVERS OF JURY TRIAL......................................................................... 109
10.19 Effect of Amendment and Restatement of the Existing Credit Agreement.......................... 110
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ANNEXES:
A Pricing Grid
B Existing Letter of Credit
SCHEDULES:
1.1 Mortgaged Property
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.13 ERISA
4.15(a) Subsidiaries
4.15(b) Agreements Affecting Capital Stock
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
5.1(q) Local Counsel Opinions
6.9 Real Property Valuation
7.2(d) Existing Indebtedness
7.2(l) Class II Restricted Subsidiary Intercompany Indebtedness
7.3(f) Existing Liens
7.5(k) Permitted Dispositions
7.11 Sale and Leaseback Real Property
EXHIBITS:
A Form of Amended and Restated Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D-1 Form of Mortgage
D-2 Form of Mortgage Amendment
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
F-2 Form of Legal Opinion of Local Counsel
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
H Form of Exemption Certificate
I Form of Lender Addendum
J Form of Borrowing Notice
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 2,
2004, among CINEMARK, INC., a Delaware corporation (the "Parent"), CNMK HOLDING,
INC., a Delaware corporation, CINEMARK USA, INC., a Texas corporation (the
"Borrower"), the several banks and other financial institutions or entities from
time to time parties to this Agreement (the "Lenders"), XXXXXX BROTHERS INC.
("LBI") and XXXXXXX XXXXX CREDIT PARTNERS L.P. ("GSCP"), as joint lead arrangers
and joint bookrunners (in such capacities, the "Arrangers"), XXXXXXX SACHS
CREDIT PARTNERS L.P., as syndication agent (in such capacity, the "Syndication
Agent"), DEUTSCHE BANK SECURITIES INC., THE BANK OF NEW YORK, GENERAL ELECTRIC
CAPITAL CORPORATION and CIBC INC., as co-documentation agents (in such capacity,
the "Co-Documentation Agents"), and XXXXXX COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the "Administrative Agent").
WITNESSETH:
WHEREAS, Popcorn Merger Corp. ("Merger Corp"), a Delaware
corporation and subsidiary of an entity controlled by Madison Dearborn Partners,
LLC, a Delaware limited liability company (the "Sponsor"), and the Parent are
parties to the Agreement and Plan of Merger, dated as of March 12, 2004 (the
"Merger Agreement");
WHEREAS, pursuant to the Merger Agreement, (i) Merger Corp
will merge with and into the Parent, with the Parent continuing as the surviving
corporation (the "Recap Merger") and (ii) simultaneously with the Recap Merger,
an affiliate of the Sponsor will purchase shares of common stock of the Parent,
and certain of the Xxxxxxxx Family (as defined below) and management of the
Parent will retain of a portion of the common stock held by such Person
immediately prior to the merger (such transactions, together with the other
transactions contemplated by the Merger Agreement, collectively, the
"Recapitalization");
WHEREAS, the Parent, Holdings and the Borrower are party to
the Credit Agreement, dated as of February 14, 2003 (as amended, supplemented or
otherwise modified prior to the date hereof, the "Existing Credit Agreement"),
together with the lenders party from time to time thereto and Xxxxxx Commercial
Paper Inc., as administrative agent;
WHEREAS, in connection with the Recapitalization, the Borrower
has requested that the Lenders agree to amend and restate the Existing Credit
Agreement to provide for (i) a $260,000,000 term loan facility and (ii) a
$100,000,000 revolving loan facility; and
WHEREAS, the Required Lenders and, with respect to the
amendment of Section 2.10(a) of the Existing Credit Agreement, Required
Prepayment Lenders (each as defined in the Existing Credit Agreement) have
agreed to amend and restate the Existing Credit Agreement on the terms and
conditions set forth herein, and the Lenders party hereto have agreed to provide
the facilities requested by the Borrower on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, the parties hereto agree that on the Effective
Date, as provided in
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Section 10.19, the Existing Credit Agreement shall be amended and restated in
its entirety as follows:
Section 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent,
the Co-Documentation Agents and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Effective Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Credit Commitment then in effect or, if the
Revolving Credit Commitments have been terminated, the amount of such Lender's
Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the sum of the Aggregate Exposures of all Lenders at
such time.
"Agreement": this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Amount": on any date of determination, the sum of
(a) $275,000,000, (b) the aggregate amount of cash received by the Parent or the
Borrower as common equity after the Effective Date and on or prior to such date
of determination and (c) the amount of the net reduction after the Effective
Date and on or prior to such date of determination, in Investments held by the
Parent, Holdings, the Borrower and its Class I Restricted Subsidiaries in Class
II Restricted Subsidiaries, Unrestricted Subsidiaries and other entities that
are not Class I Restricted Subsidiaries resulting from proceeds realized on the
sale or other Disposition of such Investments, proceeds representing the return
of capital, including redemptions, dividends and distributions, the amount of
all guarantees released and all payments of principal of, or interest on,
Indebtedness and other obligations that constitute such Investments.
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"Applicable Consolidated EBITDA Amount": on any date of
determination, an amount equal to the product of (x) Consolidated EBITDA for the
Fiscal Year ended immediately prior to such date of determination multiplied by
(y) the Capital Expenditure Percentage for the Fiscal Year in which the
determination date occurs.
"Applicable Margin": for each Type of Loan under each
Facility, the rate per annum set forth opposite such Facility under the relevant
column heading below:
Base Rate Loans Eurodollar Loans
--------------- ----------------
Term Loan Facility 1.25% 2.25%
Revolving Credit Facility 1.50% 2.50%;
provided that, on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of the Borrower after the Effective Date,
the Applicable Margin with respect to Loans will be determined pursuant to the
Pricing Grid.
"Application": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
issue a Letter of Credit.
"Arrangers": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clauses
(a) through (l) of Section 7.5) which yields gross proceeds to the Parent,
Holdings, the Borrower or any of its Class I Restricted Subsidiaries (valued at
the initial principal amount thereof in the case of non-cash proceeds consisting
of notes or other debt securities and valued at fair market value as reasonably
determined by the board of directors of the Borrower in the case of other
non-cash proceeds) in excess of $7,500,000.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"Assignor": as defined in Section 10.6(c).
"Assumed Loan Amount": at any time, an amount equal to the sum
of (i) the aggregate unpaid principal amount of the Term Loans then outstanding
plus (ii) the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.
"Available Revolving Credit Commitment": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Revolving Extensions of Credit then outstanding.
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"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus -1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the prime
lending rate as set forth on the British Banking Association Telerate Page 5 (or
such other comparable page as may, in the reasonable opinion of the
Administrative Agent, replace such page for the purpose of displaying such
rate), as in effect from time to time. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Borrowing Notice": with respect to any request for borrowing
of Loans hereunder, a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit J, delivered to the
Administrative Agent.
"Brazilco": Cinemark Brasil S.A.
"Brazilco Acquisition": the acquisition by the Borrower or a
Subsidiary of all or a portion of the outstanding minority interests of
Brazilco.
"Brazilco Agreements": (a) the Amended and Restated
Shareholders' Agreement, dated November 13, 2001 among Cinemark Brasil S.A.,
Cinemark Empreendimentos e Participacoes Ltda., Venture II Equity Holdings
Corporation, Inc., Xxxxxxx Holdings, Inc. and NN Participacoes, Ltda. and (b)
the Option and Voting Agreement, dated November 13, 2001 among Borrower, Xxx Xxx
Xxxxxxxx, Venture II Equity Holdings Corporation, Inc., Xxxxxxx Holdings, Inc.
and NN Participacoes, Ltda.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
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"Calculation Date": (i) the fifteenth and last day of each
calendar month (or, if such day is not a Business Day, the next succeeding
Business Day), (ii) the second Business Day preceding each Borrowing Date, and
(iii) each Peso Borrowing Calculation Date.
"Capital Expenditure Percentage": 35%.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all cash expenditures by such Person for the
acquisition or leasing (pursuant to a capital lease other than on EITF 97-10
Capital Lease Obligations) of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and improvements during such
period) which are required to be capitalized under GAAP on a balance sheet of
such Person, provided that, for the purposes of Section 7.7, "Capital
Expenditures" shall exclude expenditures associated with replacements,
capitalized repairs and improvements. For the purposes of this definition, the
purchase price of equipment which is purchased by a Person simultaneously with
the trade-in of existing equipment owned by such Person or with insurance
proceeds shall be included in the determination of Capital Expenditures only to
the extent of cash paid in excess of the credit granted with respect to the
equipment which is being traded in or the amount of such insurance proceeds, as
the case may be.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": 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)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition and demand deposits, in each case issued by (A) (i) any Lender, (ii)
any commercial bank organized under the laws of the United States of America or
any state thereof having combined capital and surplus of not less than
$100,000,000, or (iii) overseas branches of commercial banks incorporated under
the laws of the United States of America, any state thereof, the District of
Columbia, Canada or any province or territory thereof having combined capital
and surplus and undivided profits in excess of $100,000,000 or any commercial
bank or similar entity organized under the laws of any other country that is a
member of the Organization of Economic Cooperation and Development ("OECD") and
has total assets in excess of $100,000,000 or (B) with respect to any Foreign
Subsidiary, (i) any entity described in the foregoing clause (A) or (ii) any
commercial bank or similar entity organized under the laws of the jurisdiction
in which such Foreign Subsidiary maintains an office or engages in business
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provided that, in the case of deposits under this clause (b)(B)(ii), such
deposits are made in the ordinary course of business for cash management
purposes; (c) commercial paper of an issuer rated at least A-2 by S&P or P-2 by
Xxxxx'x, or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within nine months from the
date of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 30 days with respect to securities issued or
fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, province, commonwealth or territory of the United
States or Canada, by any political subdivision or taxing authority of any such
state, province, commonwealth or territory or by any foreign government, the
securities of which state, province, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Xxxxx'x; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition; (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition; and (h) with respect to any Foreign
Subsidiary having its principal operations in Mexico only, (i) Certificados de
la Tesoreria de la Federacion (Cetes), Bonos de Desarrollo del Gobierno Federal
(Bondes) or Bonos Adjustables del Gobierno Federal (Adjustabonos), in each case,
issued by the Mexican government, and (ii) any other instruments issued or
guaranteed by Mexico and denominated and payable in Pesos; provided, that, in
each case, such investments under this clause (h) are made in the ordinary
course of business for cash management purposes.
"Change of Control": the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), excluding the Permitted Investors, shall become, or obtain rights
(whether by means or warrants, options or otherwise) to become, the "beneficial
owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act),
directly or indirectly, of a greater percentage of the total voting power of all
classes of Capital Stock of the Parent entitled to vote generally in the
election of directors than the corresponding percentage thereof then held by the
Permitted Investors; (b) a majority of the members of the board of directors of
the Parent shall not be Continuing Directors; (c)(x) at any time prior to the
occurrence of the Specified Reorganization, the Parent shall cease to own and
control, of record and beneficially, directly, 100% of each class of outstanding
Capital Stock of Holdings free and clear of all Liens and Holdings shall cease
to own and control, of record and beneficially, directly, 100% of each class of
outstanding Capital Stock of the Borrower free and clear of all Liens and (y) at
any time after the occurrence of the Specified Reorganization, the Parent shall
cease to own and control, of record and beneficially, directly, 100% of each
class of outstanding Capital Stock of the Borrower free and clear of all Liens
(in each case, except Liens created by the Guarantee and Collateral Agreement
and Liens permitted under Section 7.3(a) hereof); or (d) a Specified Change of
Control.
"Change of Control Debt": Indebtedness of the Borrower
incurred to finance the Change of Control Offer in an aggregate principal amount
up to $360,000,000 (plus the amount
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of fees, premiums or penalties paid in connection with the Change of Control
Offer) pursuant to a Change of Control Debt Agreement.
"Change of Control Debt Agreement": a collective reference to
any credit agreement, loan agreement, indenture or other agreement entered into
by the Borrower in connection with the issuance or incurrence of Change of
Control Debt, together with all instruments and other agreements entered into by
the Borrower, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with Section 7.9 or refinanced pursuant to
Section 7.2(f), in each case in form and substance reasonably acceptable to the
Administrative Agent.
"Change of Control Offer": the offer to repurchase the
Borrower's 9% Senior Subordinated Notes due 2013 required to be made pursuant to
the terms of the related Senior Subordinated Note Indenture as a result of the
Recapitalization.
"Class I Restricted Subsidiary": any Restricted Subsidiary
which is not a Class II Restricted Subsidiary. Class I Restricted Subsidiaries
may not be designated as Unrestricted Subsidiaries.
"Class II Restricted Subsidiaries": (a) Cinemark Theatres
Canada, Inc., Cinemark Holdings Mexico, S. de X.X. de C.V., Cinemark de Mexico
S.A. de C.V., Cinemark del Norte S.A. de C.V. and Servicios Cinemark S.A. de
C.V. and any Subsidiary of a Class II Restricted Subsidiary other than an
Unrestricted Subsidiary and (b) any Unrestricted Subsidiary designated as a
Class II Restricted Subsidiary in accordance with Section 6.11.
"Closing Date": February 14, 2003.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Co-Documentation Agents": as defined in the preamble hereto.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": with respect to any Lender, each of the Term
Loan Commitment and the Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
8
"Confidential Information Memorandum": the Confidential
Information Memorandum dated March 2004 and furnished to the initial Lenders in
connection with the syndication of the Facilities.
"Consolidated Adjusted Debt": for any period, the sum of (a)
Funded Debt of the Borrower and its Restricted Subsidiaries for such period plus
(b) the product of Consolidated Lease Expense for such period multiplied by 8.
"Consolidated Adjusted Interest Coverage Ratio": for any
period, the ratio of (a) Consolidated EBITDAR for such period to (b) the sum of
Consolidated Parent Interest Expense (based upon the principal amount of
Indebtedness outstanding as of the end of such period and interest rates then in
effect) for such period plus Consolidated Lease Expense for such period.
"Consolidated Adjusted Leverage Ratio": for any period, the
ratio of (a) Consolidated Adjusted Debt for such period to (b) Consolidated
EBITDAR for such period.
"Consolidated Current Assets": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Restricted Subsidiaries at
such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Restricted Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the Borrower and its Restricted
Subsidiaries and (b) without duplication, all Indebtedness consisting of
Revolving Credit Loans, to the extent otherwise included therein.
"Consolidated EBITDA": for any period, without duplication,
Consolidated Net Income for such period plus, to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, the sum
of (a) income tax expense, (b) Consolidated Interest Expense, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness, (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring expenses or losses (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such
period, (x) net losses on sales of assets outside of the ordinary course of
business and (y) losses arising from lease dispositions), and (f) any other
non-cash charges, including foreign exchange gains and losses not included in
operating income but deducted from earnings in determining Consolidated Net
Income, and minus, to the extent included in the statement of such Consolidated
Net Income for such period, the sum of (a) interest income (except to the extent
deducted in determining Consolidated Interest Expense), (b) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, net gains on sales of assets outside of the ordinary course of
business) and (c) any other non-cash income (other than the amortization of
prepaid cash income), all as
9
determined on a consolidated basis; provided that for purposes of calculating
Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for any
period:
(i) the Consolidated EBITDA of any Person acquired by the
Borrower or its Restricted Subsidiaries during such period shall be
included on a pro forma basis for such period (assuming the
consummation of such acquisition and the incurrence or assumption of
any Indebtedness in connection therewith had occurred on the first day
of such period and without giving effect to clause (a) of the proviso
set forth in the definition of Consolidated Net Income in this Section
1.1) if the consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of
income and stockholders' equity and of cash flows for the period in
respect of which Consolidated EBITDA is to be calculated (x) have been
previously provided to the Administrative Agent and (y) either (1) have
been reported on without a qualification arising out of the scope of
the audit by independent certified public accountants of nationally
recognized standing or (2) have been found reasonably acceptable by the
Administrative Agent;
(ii) the Consolidated EBITDA of any Person Disposed of by
the Borrower or its Restricted Subsidiaries during such period shall be
excluded for such period (assuming the consummation of such Disposition
and the repayment of any Indebtedness in connection therewith had
occurred on the first day of such period); and
(iii) any redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary which occurred during such period shall be deemed
to have occurred on the first day of such period.
"Consolidated EBITDAR": for any period, Consolidated EBITDA
for such period plus, without duplication, Consolidated Lease Expense for such
period.
"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations) of
the Borrower and its Restricted Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Restricted Subsidiaries
(including, without limitation, all commissions, discounts and other fees and
charges owed by the Borrower with respect to letters of credit and bankers'
acceptance financing and net costs of the Borrower under Hedge Agreements in
respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP) other than intercompany Indebtedness owed to
Holdings, the Parent, Borrower or any Restricted Subsidiary.
"Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable in cash by the Borrower and its
Restricted Subsidiaries for such period with respect to leases of real and
personal property, determined on a consolidated basis in accordance with GAAP
(but excluding taxes, common area maintenance and similar amounts in the case of
gross leases), provided, that payments in respect of Capital Lease Obligations
shall not constitute Consolidated Lease Expense.
10
"Consolidated Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters of the Borrower, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its Restricted
Subsidiaries for any period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Restricted Subsidiary of
the Borrower or is merged into or consolidated with the Borrower or any of its
Restricted Subsidiaries, (b) the income (or deficit) of any Person (other than a
Restricted Subsidiary of the Borrower) in which the Borrower or any of its
Restricted Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Borrower or such Restricted Subsidiary
in the form of dividends or similar distributions or payment of principal or
interest of intercompany Indebtedness, (c) the undistributed earnings of any
Restricted Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary is
not at the time permitted by the terms of any Contractual Obligation (other than
under any Loan Document) or Requirement of Law applicable to such Restricted
Subsidiary and (d) expenses, losses and other charges incurred in connection
with or arising out of the Transaction, the tender offer and consent
solicitation relating to the 8-1/2% Senior Subordinated Notes and the Change of
Control Offer.
"Consolidated Parent Interest Expense": for any period, (a)
total cash interest expense (including that attributable to Capital Lease
Obligations) of the Parent, Holdings and the Borrower and its Restricted
Subsidiaries for such period with respect to all outstanding Indebtedness of the
Parent, Holdings and the Borrower and its Restricted Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges owed
by the Borrower with respect to letters of credit and bankers' acceptance
financing and net costs of the Borrower under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP) other than intercompany Indebtedness owed to Holdings, the
Parent, the Borrower or any Restricted Subsidiary plus (b) the amount of any
pay-in-kind interest expense or accretion of original issue discount accrued
during the applicable period with respect to all Indebtedness of the Parent
incurred pursuant to Section 7.2(h)(ii).
"Consolidated Senior Debt": all Consolidated Total Debt other
than the Senior Subordinated Notes.
"Consolidated Senior Leverage Ratio": as of the last day of
any period of four consecutive fiscal quarters of the Borrower, the ratio of (a)
Consolidated Senior Debt on such day to (b) Consolidated EBITDA for such period.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Funded Debt of the Borrower and its Restricted
Subsidiaries at such date, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Working Capital": at any date, the difference of
(a) Consolidated Current Assets on such date less (b) Consolidated Current
Liabilities on such date.
11
"Continuing Directors": with respect to any period of two
consecutive years, individuals who at the beginning of such period constituted
the board of directors of the Parent (together with any new directors whose
election by such board or whose nomination for election by the stockholders of
the Parent was approved by a vote of at least a majority of the directors of the
Parent then still in office who where either directors at the beginning of such
period or whose election or nomination was previously so approved or is a
designee of the Permitted Investors or was nominated or elected by the Permitted
Investors or any of their designees).
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Derivatives Counterparty": as defined in Section 7.6.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof (but excluding the granting of a Lien); and the terms "Dispose" and
"Disposed of" shall have correlative meanings.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"Early Maturity Date": as defined in Section 2.10(e).
"Effective Date": the date on which the conditions precedent
set forth in Section 5.1 shall have been satisfied or waived.
"8 1/2% Senior Subordinated Notes": $105,000,000 aggregate
outstanding principal amount of the Borrower's 8-1/2% Series B Senior
Subordinated Notes due 2008.
"EITF 97 - 10 Capital Lease Obligations": obligations which
are classified as "Capital Lease Obligations" under generally accepted
accounting principles in the United States of America due to the application of
Emerging Issues Task Force Regulation 97 - 10 or similar pronouncement ("EITF 97
- 10") and except for such regulation or pronouncement, would not constitute
Capital Lease Obligations.
12
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, local, municipal
or other governmental authority, regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment or of human
health.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
reasonably selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excess Cash Flow": for any Fiscal Year, the difference, if
positive, of (a) the sum, without duplication, of (i) Consolidated Net Income
for such Fiscal Year, (ii) the amount of
13
all non-cash charges (including, without limitation, depreciation and
amortization) deducted in arriving at such Consolidated Net Income, (iii) the
amount of the decrease, if any, in Consolidated Working Capital for such Fiscal
Year, (iv) the aggregate net amount of non-cash loss on the Disposition of
Property by the Borrower and its Restricted Subsidiaries during such Fiscal Year
(other than sales of inventory in the ordinary course of business), to the
extent deducted in arriving at such Consolidated Net Income and (v) the net
increase during such Fiscal Year (if any) in deferred tax accounts of the
Borrower minus (b) the sum, without duplication, of (i) the amount of all
non-cash credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount of all regularly scheduled principal payments of Funded Debt
(including, without limitation, the Term Loans) of the Borrower and its
Restricted Subsidiaries made during such Fiscal Year (other than in respect of
any revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (iii) the amount of the increase, if any,
in Consolidated Working Capital for such Fiscal Year, (iv) the aggregate net
amount of non-cash gain on the Disposition of Property by the Borrower and its
Restricted Subsidiaries during such Fiscal Year (other than sales of inventory
in the ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, and (v) the net decrease during such Fiscal Year (if
any) in deferred tax accounts of the Borrower.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.
"Existing Credit Agreement": as defined in the recitals
hereto.
"Existing Mortgages": the mortgages and deeds of trust made by
any Loan Party in connection with the Existing Credit Agreement as listed on
Schedule 1.1.
"Existing Title Policies": the collective reference to the
certain existing policies of title insurance issued to the Administrative Agent
pursuant to the Existing Credit Agreement in respect of the Mortgaged Properties
as of the Effective Date.
"Facility": each of (a) the Term Loan Commitments and the Term
Loans made thereunder (the "Term Loan Facility") and (b) the Revolving Credit
Commitments and the extensions of credit made thereunder (the "Revolving Credit
Facility").
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Fiscal Year": the fiscal year of the Borrower.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
14
"Funded Debt": with respect to any Person, all Indebtedness of
such Person of the types described in clauses (a) through (e) of the definition
of "Indebtedness" in this Section, excluding, (i) any intercompany Indebtedness
owed to Holdings, the Parent, the Borrower or a Guarantor and (ii) Theatre
Capital Lease Obligations permitted by clause (iii) of Section 7.2(c).
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time, subject to Section 10.16;
provided, that for purposes of calculating all financial ratios under the Loan
Documents, GAAP shall exclude the application of EITF 97 - 10.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee and Collateral Agreement": the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by the Parent,
Holdings, the Borrower and each Subsidiary Guarantor, substantially in the form
of Exhibit A, as the same may be amended, supplemented or otherwise modified
from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit), if to
induce the creation of such obligation of such other Person the guaranteeing
person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "primary obligations") of any other third
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
15
"Guarantors": the collective reference to the Parent, Holdings
and the Subsidiary Guarantors.
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by the Borrower or its Restricted Subsidiaries
providing for protection against fluctuations in interest rates, currency
exchange rates, commodity prices or the exchange of nominal interest
obligations, either generally or under specific contingencies. For avoidance of
doubt, Hedge Agreements shall include any interest rate swap or similar
agreement that provides for the payment by the Borrower or any of its
Subsidiaries of amounts based upon a floating rate in exchange for receipt by
the Borrower or such Subsidiary of amounts based upon a fixed rate.
"Holdings": CNMK Holding, Inc., a Delaware corporation, unless
and until the Specified Reorganization occurs in which the Parent is the
surviving corporation, and thereafter means the Parent.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such Property, provided that, in such event, the
amount of such Indebtedness shall be deemed to be the lesser of the value of the
Property covered by such agreement and the aggregate principal amount of such
Indebtedness), (e) all Capital Lease Obligations or Synthetic Lease Obligations
of such Person, (f) all obligations of such Person, contingent or otherwise, as
an account party or applicant under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person on or prior to Xxxxx 00, 0000 (xxxxx than for consideration
consisting solely of common stock of the Parent) (excluding up to $60,000,000 of
the aggregate value of the Brazilco Capital Stock subject to the put option or
liquidity option arising as a result of the Recapitalization (such value to be
determined in accordance with the Brazilco Agreements)), (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on Property owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation to the extent of the value of
the Property subject to such Lien and (j) for the purposes of Section 8(e) only,
all obligations of such Person in respect of Hedge Agreements.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
16
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and processes,
and all rights to xxx at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the Borrowing Date or conversion date, as the case may
be, with respect to such Eurodollar Loan and ending one, two, three or six or
(if available to all Lenders under the relevant Facility, as determined by such
Lenders in their sole discretion) nine or twelve months thereafter, as selected
by the Borrower in its Borrowing Notice or notice of conversion, as the case may
be, given with respect thereto; and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six or (if available to all Lenders under the
relevant Facility, as determined by such Lenders in their sole discretion) nine
or twelve months thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days prior to the last
day of the then current Interest Period with respect thereto; provided that, all
of the foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end
on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise
extend beyond the Revolving Credit Termination Date or beyond
the date final payment is due on the Term Loans shall end on
the Revolving Credit Termination Date or such due date, as
applicable; and
(iii) 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
17
in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period.
"Investment Limit": on any date of determination, the sum of
(a) $100,000,000 plus (b) the lesser of (i) $75,000,000 and (ii) 50% of Excess
Cash Flow for each Fiscal Year ended after the Closing Date and on or prior to
such date of determination.
"Investments": as defined in Section 7.8.
"Issuing Lender": (a) any Revolving Credit Lender from time to
time designated by the Borrower as an Issuing Lender with the consent of such
Revolving Credit Lender and notice to the Administrative Agent or (b) Deutsche
Bank Trust Company Americas or any of its Affiliates, including, but not limited
to Deutsche Bank AG, New York Branch.
"L/C Commitment": $15,000,000; provided, that with the consent
of the relevant Issuing Lender and the Administrative Agent, the L/C Commitment
may be increased by up to $25,000,000 if it is necessary to support, with a
Letter of Credit issued hereunder, the obligations of the borrower under the
Peso Subfacility or the Third-Party Peso Loans, as the case may be.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit Commitment
Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the Issuing
Lender that issued such Letter of Credit.
"Xxxxxx Entity": any of Xxxxxx Commercial Paper Inc. or any of
its affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit I, to be executed and
delivered by such Lender on the Effective Date as provided in Section 10.17.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
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"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan Parties": the Parent, Holdings, the Borrower and each
Restricted Subsidiary of the Borrower that is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of (a) in the case of the Term Loan Facility, the
aggregate unpaid principal amount of the Term Loans or (b) in the case of the
Revolving Credit Facility, prior to any termination of the Revolving Credit
Commitments, the Total Revolving Commitments (or, if the Revolving Commitments
are no longer in effect, the Total Revolving Extensions of Credit then
outstanding).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a)
the Transaction, (b) the business, assets, property, operations, condition,
financial condition or prospects of the Borrower and its Subsidiaries taken as a
whole or (c) the validity or enforceability of this Agreement or any of the
other Loan Documents or the material rights or remedies of the Agents or the
Lenders hereunder or thereunder.
"Material Environmental Amount": an amount or amounts payable
by the Borrower and/or any of its Class I Restricted Subsidiaries, in the
aggregate in excess of $1,000,000, for: costs to comply with any Environmental
Laws; costs of any investigation, and any remediation, of any Material of
Environmental Concern; and compensatory damages (including, without limitation
damages to nature resources), punitive damages, fines, and penalties pursuant to
any Environmental Law.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances, whether or not any such
substance is defined as hazardous or toxic under any Environmental Law, that is
regulated pursuant to or could give rise to liability under any Environmental
Law.
"Merger Agreement": as defined in the recitals hereto.
"Xxxxxxxx Family": (a) Xxx Xxx Xxxxxxxx or Xxxxx Xxxxxxxx, or
any descendent of Xxx Xxx Xxxxxxxx or the spouse of such descendent, the estate
of Xxx Xxx Xxxxxxxx, Xxxxx Xxxxxxxx, any descendent of Xxx Xxx Xxxxxxxx or the
spouse of such descendent (each, a "Xxxxxxxx"), (b) any trust or other
arrangement for the benefit of a Xxxxxxxx, any trust established by a Xxxxxxxx
or any trustee, custodian, fiduciary or foundation which will hold the common
stock of the Parent for charitable purposes or for the benefit of any Xxxxxxxx
and (c) any Person at least 80% beneficially owned and controlled by one or more
Mitchells.
"Moody's": Xxxxx'x Investor Services, Inc.
19
"Mortgage Amendments": the amendments to the Existing
Mortgages executed and delivered by any Loan Party, substantially in the form of
Exhibit D-2 hereto (with such modifications thereto as the Administrative Agent
on or before the Effective Date shall reasonably determine are necessary in any
state to maintain the priority of the mortgage Lien encumbering the relevant
Mortgaged Property), as the same may be amended, supplemented or otherwise
modified from time to time.
"Mortgaged Properties": the real properties listed on Schedule
1.1, as to which the Administrative Agent for the benefit of the Secured Parties
has been or shall be granted a Lien pursuant to one or more Mortgages, with a
notation for each Post-Effective Date Mortgaged Property.
"Mortgages": each of (i) the Existing Mortgages and (ii) the
mortgages and deeds of trust made by any Loan Party in favor of, or for the
benefit of, the Administrative Agent for the benefit of the Secured Parties,
substantially in the form of Exhibit D-1 (with such changes thereto as shall be
advisable under the law of the jurisdiction in which such mortgage or deed of
trust is to be recorded), including the Existing Mortgages with appropriate
amendments thereto, in each case, as the same may be amended, supplemented or
otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale,
any Recovery Event or any Sale and Leaseback Transaction permitted by Section
7.11, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received), net of attorneys' fees, accountants'
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness existing prior to such transaction secured by a Lien permitted
hereunder on any asset which is the subject of such Asset Sale, Recovery Event
or Sale and Leaseback Transaction (other than any Lien pursuant to a Security
Document), all distributions and other payments required to be made pursuant to
partnership agreements, limited liability company organizational documents,
joint venture agreements or similar agreements to minority interest holders in
Restricted Subsidiaries as a result of such Asset Sale, Recovery Event or Sale
and Leaseback Transaction, and other arm's length costs, fees and expenses
actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) provided
that, such Net Cash Proceeds shall not include any amounts reserved for purchase
price adjustments and post-closing liabilities in connection with any Asset Sale
or Sale and Leaseback Transaction until such amounts have been released or are
no longer reserved and (b) in connection with any incurrence of indebtedness,
the cash proceeds received from such incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other arm's-length costs, fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 2.18(a).
20
"Non-Recourse Debt": Indebtedness:
(a) with respect to any Unrestricted Subsidiary and any
Class II Restricted Subsidiary, except to the extent of any guarantee
permitted by Section 7.8, (i) as to which none of the Parent, Holdings,
the Borrower nor any of the Class I Restricted Subsidiaries (x)
provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (y) is
directly or indirectly liable (as a guarantor or otherwise), or (z)
constitutes the lender; (ii) no default with respect to which
(including any rights that the holders thereof may have to take
enforcement action against any Unrestricted Subsidiary or Class II
Restricted Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Indebtedness (other than the Obligations
and the Senior Discount Notes) of the Parent, Holdings, the Borrower or
any of the Class I Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and (iii) as to which the lenders
thereunder will not have any recourse to the Capital Stock or assets of
the Parent, Holdings, the Borrower or any of the Class I Restricted
Subsidiaries; and
(b) with respect to the Parent, Holdings, the Borrower or
any of the Class I Restricted Subsidiaries, (1) for which none of the
Parent, Holdings, the Borrower or any of the Class I Restricted
Subsidiaries provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness) or is directly or indirectly liable (as guarantor or
otherwise), other than as primary obligor; and (2) as to which the
lenders thereunder will not have any recourse to the Capital Stock or
assets of the Parent, Holdings, the Borrower or any of the Class I
Restricted Subsidiaries other than the asset financed by such
Indebtedness, additions, accessions and improvements thereto and
proceeds thereof.
"Non-U.S. Lender": as defined in Section 2.18(d).
"Note": any promissory note evidencing any Loan.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans, the Reimbursement Obligations and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender or any
Qualified Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, the
Letters of Credit, any Specified Hedge Agreement or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise; provided, that (i)
obligations of the Borrower or any Class I Restricted Subsidiary under any
Specified Hedge Agreement shall be secured and guaranteed pursuant to the
Security Documents only to the extent that, and for so
21
long as, the other Obligations are so secured and guaranteed and (ii) any
release of Collateral or Guarantors effected in the manner permitted by this
Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Parent": as defined in the preamble hereto.
"Participant": as defined in Section 10.6(b).
"Payment Office": the office of the Administrative Agent
specified in Section 10.2 or as otherwise specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": on any date of determination, the
acquisition in any transaction or series of transactions by the Borrower or any
of its Class I Restricted Subsidiaries of a theatre or theatres (or the Capital
Stock of a Person that owns a theatre or theatres) approved by the board of
directors of the Borrower.
"Permitted Investors": the collective reference to (a) the
Xxxxxxxx Family and the Sponsor and Related Parties or (b) any group which
includes any member or members of the Xxxxxxxx Family if a majority of the
Capital Stock of the Parent held by such group is beneficially owned (including
the power to vote such Capital Stock of the Parent) by (i) such member or
members or (ii) one or more affiliates at least 80% of the equity of which are
owned by one or more of such member or members.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Peso": the coin or currency of the United Mexican States as
at the time shall be legal tender for payment of public and private debt.
"Peso Borrowing Calculation Date": the second Business Day
prior to any date of incurrence of any Third-Party Peso Loan.
"Peso Borrowing Date": any date of incurrence of any
Third-Party Peso Loan.
"Peso Subfacility": as defined in Section 2.23.
"Peso Subfacility Amendments": as defined in Section 2.23.
22
"Peso Subfacility Borrower": as defined in Section 2.23(a).
"Peso Subfacility Commitment": as defined in Section 2.23(a).
"Peso Subfacility Commitment Period": as defined in Section
2.23(a).
"Peso Subfacility Lenders": as defined in Section 2.23.
"Peso Subfacility Loans": as defined in Section 2.23.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pledged Stock": as defined in the Guarantee and Collateral
Agreement.
"Post-Effective Date Mortgaged Properties": each of the
Mortgaged Properties listed as such on Schedule 1.1.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an Affiliate of a Lender.
"Recap Merger": as defined in the recitals hereto.
"Recapitalization": as defined in the recitals hereto.
"Recapitalization Documentation": collectively, the Merger
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Parent, Holdings, the Borrower or any of its Class I
Restricted Subsidiaries.
"Register": as defined in Section 10.6(d).
"Regulation H": Regulation H of the Board as in effect from
time to time.
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"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit issued by such Issuing Lender.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Parent,
Holdings, the Borrower or any of its Class I Restricted Subsidiaries in
connection therewith that are not applied to prepay the Loans pursuant to
Section 2.10(a) or (c) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale, Recovery Event or Sale
and Leaseback Transaction in respect of which the Borrower has delivered a
Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that (i) no Default or Event of Default has occurred
and is continuing and that the Borrower (directly or indirectly through a Class
I Restricted Subsidiary) intends and expects to use all or a specified portion
of the Net Cash Proceeds of a Reinvestment Event to acquire or fund the
construction of assets (other than inventory) useful in its or a Class I
Restricted Subsidiary's business, or to make capital improvements (other than
maintenance capital improvements) to such assets (including leased assets), or
(ii) during the six-month period prior to a Reinvestment Event, the Borrower
(directly or indirectly through a Class I Restricted Subsidiary) used an amount
of funds equal to or greater than all or a specified portion of the Net Cash
Proceeds of such Reinvestment Event to acquire or fund the construction of
assets (other than inventory) useful in its or a Class I Restricted Subsidiary's
business or to make capital improvements (other than maintenance capital
improvements) to such assets (including leased assets).
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date (including
any amount expended during the six-month period prior to such Reinvestment
Event) to acquire or fund the construction of assets (other than inventory)
useful in the Borrower's or a Class I Restricted Subsidiary's business, or to
make capital improvements (other than maintenance capital improvements) to such
assets (including leased assets).
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring six months after such
Reinvestment Event, provided that, such date shall be extended, (x) if the
Borrower or any of its Class I Restricted Subsidiaries shall have entered into a
definitive agreement to acquire or fund the construction of assets useful in the
Borrower's or a Class I Restricted Subsidiary's business, or to make capital
improvements (other than maintenance capital improvements) to such assets
(including leased assets) prior to, or within six months after, such
Reinvestment Event, to the date which is 15 months after such Reinvestment Event
or (y) in the case of a Recovery Event, the Property which was the subject of
the Recovery Event was leased by the Borrower or any of its Class I Restricted
Subsidiaries pursuant to a lease which requires the Borrower or such Class I
Restricted Subsidiary, as the case may be, to rebuild such Property after
completion of any construction necessary by the landlord,
24
to the date which is nine months after the date the landlord has completed such
necessary construction, and, so long as the Administrative Agent is reasonably
satisfied that the Borrower is diligently pursuing such rebuilding, such date
shall be further extended by the number of days during which the Borrower is
reasonably delayed in completing such rebuilding as a result of events of force
majeure, and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or fund the construction of assets
useful in the Borrower's or a Class I Restricted Subsidiary's business, or to
make capital improvements (other than maintenance capital improvements) to such
assets (including leased assets) with all or any portion of the relevant
Reinvestment Deferred Amount.
"Related Fund": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender or an Affiliate of such investment advisor, by such
Lender or an Affiliate of such Lender.
"Related Party": (i) any investment fund or other entity
controlled by or under common control with the Sponsor or the principals that
control the Sponsor; 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 any
one or more of the Sponsor and/or such other Persons referred to in the
immediately preceding clause (i).
"Remaining Applicable Amount": on any date of determination,
the difference of (a) the Applicable Amount on such date of determination, minus
(b) the portion of the Applicable Amount expended on and after the Effective
Date and on or prior to such date of determination for (without duplication) (i)
Capital Expenditures made pursuant to Section 7.7(c), (ii) Investments made
pursuant to Section 7.8(h) and (iii) Permitted Acquisitions made pursuant to
Section 7.8(i). For purposes of this definition, the amount expended for
Investments made pursuant to Section 7.8(h) and Permitted Acquisitions made
pursuant to Section 7.8(i) shall be deemed to include the value of any
consideration paid for any such Investment or Permitted Acquisition in the form
of common stock of the Parent (as such value is reasonably determined by the
board of directors of the Borrower).
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the 30 day notice period
is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Effective Date, the Commitments and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Term Loans then outstanding and
(ii) the Total Revolving Credit Commitments then in effect or, if the Revolving
Credit Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
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"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer or treasurer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Restricted Subsidiary": any Subsidiary of the Borrower that
is not an Unrestricted Subsidiary. Class I Restricted Subsidiaries may not be
designated as Unrestricted Subsidiaries.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans in an
aggregate principal and/or face amount not to exceed the amount set forth under
the heading "Revolving Credit Commitment" opposite such Lender's name on
Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case may
be, in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original aggregate amount of the Total Revolving Credit Commitments
is $100,000,000.
"Revolving Credit Commitment Period": the period from and
including the Effective Date to the Revolving Credit Termination Date or such
earlier date on which the Revolving Credit Commitments are terminated in
accordance with the terms of this Agreement.
"Revolving Credit Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Revolving Credit Lender": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Note": as defined in Section 2.6(e).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments (or, at
any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender's Revolving
Extensions of Credit then outstanding constitutes of the amount of the Total
Revolving Extensions of Credit then outstanding).
"Revolving Credit Termination Date": the date which is six
months after the sixth anniversary of the Effective Date.
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"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then outstanding and
(b) such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding.
"S&P": Standard & Poor's Ratings Services.
"Sale and Leaseback Transaction": any sale and leaseback
transaction conducted by the Borrower or any Class I Restricted Subsidiary, but
excluding transactions of the type described in EITF 97-10.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": as defined in the Guarantee and Collateral
Agreement.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other security
documents hereafter delivered to the Administrative Agent granting a Lien on any
Property of any Person to secure the obligations and liabilities of any Loan
Party under any Loan Document.
"Senior Discount Note Indenture": the Indenture entered into
by the Parent in connection with the issuance of the Senior Discount Notes,
together with all instruments and other agreements entered into by the Parent in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9 or refinanced pursuant
to Section 7.2(h).
"Senior Discount Notes": the issuance by the Parent of
$360,000,115 gross proceeds of its 9-3/4% Senior Discount Notes due 2014, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with Section 7.9 or refinanced pursuant to Section 7.2(h).
"Senior Subordinated Note Indenture": a collective reference
to the Indentures entered into by the Borrower and the Subsidiary Guarantors in
connection with the issuance of the Senior Subordinated Notes, together with all
instruments and other agreements entered into by the Borrower or any Subsidiary
Guarantor in connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9 or
refinanced pursuant to Section 7.2(f).
"Senior Subordinated Notes": a collective reference to (a) the
8-1/2% Senior Subordinated Notes and (b) $360,000,000 aggregate outstanding
principal amount of the Borrower's 9% Senior Subordinated Notes due 2013, in
each case as the same may be amended, supplemented or otherwise modified from
time to time in accordance with Section 7.9 or refinanced pursuant to Section
7.2(f).
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
27
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Specified Change of Control": a "Change of Control", or like
event, as defined in any outstanding Senior Subordinated Note Indenture.
"Specified Reorganization": any transaction or series of
transactions pursuant to which the Parent and Holdings will be merged or
otherwise combined, with the Parent being the sole surviving corporation of such
transaction(s).
"Specified Hedge Agreement": any Hedge Agreement entered into
by (a) the Borrower or any of its Class I Restricted Subsidiaries and (b) any
Person that, at the time such Hedge Agreement is entered into, is a Qualified
Counterparty.
"Sponsor": as defined in the recitals hereto.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Class I Restricted Subsidiary
that is a Wholly Owned Subsidiary as of the Effective Date and each other
Subsidiary that becomes a party to the Guarantee and Collateral Agreement on or
after the Effective Date, in each case, unless and until released in accordance
with the terms of this Agreement.
"Syndication Agent": as defined in the preamble hereto.
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"Syndication Date": the date on which the syndication of the
Facilities is completed and the entities selected in such syndication process
become parties to this Agreement.
"Synthetic Lease Obligations": all monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention lease
or (b) an agreement for the use or possession of property creating obligations
which do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment).
"Term Loan": as defined in Section 2.1.
"Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Term Loan
Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Term Loan Commitments is $260,000,000.
"Term Loan Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Term Loan Lender": each Lender that has a Term Loan
Commitment or is the holder of a Term Loan.
"Term Loan Percentage": as to any Term Loan Lender at any
time, the percentage which such Lender's Term Loan Commitment then constitutes
of the aggregate Term Loan Commitments (or, at any time after the Effective
Date, the percentage which the aggregate principal amount of such Lender's Term
Loan then outstanding constitutes of the aggregate principal amount of the Term
Loans then outstanding).
"Term Note": as defined in Section 2.6(e).
"Theatre Capital Lease Obligations": Capital Lease Obligations
relating to the lease of theatres.
"Third-Party Peso Loans": as defined in Section 7.2(o).
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"Transaction": a collective reference to the Recapitalization,
the refinancing of the Existing Credit Agreement and the offering of the Senior
Discount Notes.
29
"Transferee": as defined in Section 10.14.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Unrestricted Subsidiary": a collective reference to:
(a) any Subsidiary of the Borrower that does not
directly, indirectly, or beneficially own or hold any Capital Stock of,
or own or hold any Lien on any Property of, the Parent, Holdings, the
Borrower or any of its Class I Restricted Subsidiaries and that, at the
time of determination, shall be an Unrestricted Subsidiary as
designated by the board of directors of the Borrower and upon written
notice to the Administrative Agent or as listed as such on Schedule
4.15(a); provided, that such Subsidiary at the time of such designation
(i) has no Indebtedness other than Indebtedness permitted pursuant to
Section 7.2(j), (k), (l) and (m); (ii) is not a party to any agreement,
contract, arrangement or understanding with the Parent, Holdings, the
Borrower or any of its Class I Restricted Subsidiaries unless the terms
of any such agreement, contract, arrangement or understanding are no
less favorable to the Parent, Holdings, the Borrower or such Class I
Restricted Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not Affiliates of the
Borrower; (iii) is a Person as to which none of the Parent, Holdings,
the Borrower or any of its Class I Restricted Subsidiaries has any
direct or indirect obligation (x) to subscribe for additional Capital
Stock or (y) to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified level of operating
results; and (iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Parent,
Holdings, the Borrower or any of its Class I Restricted Subsidiaries;
and
(b) any Subsidiary of an Unrestricted Subsidiary;
provided that, any Unrestricted Subsidiary may be designated as a Restricted
Subsidiary pursuant to Section 6.11.
"Wholly Owned Subsidiary": as to any Person, (a) any other
Person all of the Capital Stock of which with voting power under ordinary
circumstances to elect directors (or Persons having similar or corresponding
powers and responsibilities) (other than directors' qualifying shares required
by law and shares required by applicable law to be held by a Person other than
the Borrower or its Subsidiaries) is owned by such Person directly and/or
through other Wholly Owned Subsidiaries and (b) any Subsidiary of which the
Parent owns, directly and indirectly, less than all of the Capital Stock having
such voting power, but the Parent and its Affiliates otherwise have the power,
without the consent of any other stockholder or other equity holder, to cause
such Subsidiary to become a Subsidiary Guarantor.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the
30
Parent, Holdings, the Borrower and its Subsidiaries not defined in Section 1.1
and accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in
Section 7.1 and the calculation of the Consolidated Leverage Ratio for purposes
of determining the Applicable Margin shall be calculated to the same number of
decimal places as the relevant ratios are expressed in and shall be rounded
upward if the number in the decimal place immediately following the last
calculated decimal place is five or greater. For example, if the relevant ratio
is to be calculated to the hundredth decimal place and the calculation of the
ratio is 5.126, the ratio will be rounded up to 5.13.
Section 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and
conditions hereof, the Term Loan Lenders severally agree to make term loans
(each, a "Term Loan") to the Borrower on the Effective Date in an amount for
each Term Loan Lender not to exceed the amount of the Term Loan Commitment of
such Lender. The Term Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.11.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice
must be received by the Administrative Agent prior to 10:00 A.M., New York City
time, at least one Business Day prior to the anticipated Effective Date)
requesting that the Term Loan Lenders make the Term Loans to be made on the
Effective Date. The Term Loans made on the Effective Date shall initially be
Base Rate Loans, and no Term Loan may be converted into or continued as a
Eurodollar Loan having an Interest Period in excess of one month prior to the
date which is the earlier of (i) 60 days after the Effective Date and (ii) the
Syndication Date. Upon receipt of such Borrowing Notice the Administrative Agent
shall promptly notify each Term Loan Lender thereof. Not later than 12:00 Noon,
New York City time, on the Effective Date each Term Loan Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender. The Administrative Agent shall promptly make available to the
Borrower the aggregate of the amounts made available to the Administrative Agent
by the Term Loan Lenders, in like funds as received by the Administrative Agent.
2.3 Repayment of Term Loans. The Term Loan of each Term
Loan Lender shall mature in 28 consecutive quarterly installments, commencing on
June 30, 2004, each of
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which shall be in an amount equal to such Lender's Term Loan Percentage
multiplied by the percentage set forth below opposite such installment of the
aggregate Term Loans made on the Effective Date:
Installment Principal Amount
----------- ----------------
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 0.25%
June 30, 2007 0.25%
September 30, 2007 0.25%
December 31, 2007 0.25%
March 31, 2008 0.25%
June 30, 2008 0.25%
September 30, 2008 0.25%
December 31, 2008 0.25%
March 31, 2009 0.25%
June 30, 2009 0.25%
September 30, 2009 0.25%
December 31, 2009 0.25%
March 31, 2010 0.25%
June 30, 2010 23.50%
September 30, 2010 23.50%
December 31, 2010 23.50%
March 31, 2011 23.50%
2.4 Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, the Revolving Credit Lenders severally agree to
make revolving credit loans ("Revolving Credit Loans") to the Borrower from time
to time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding for each Revolving Credit Lender which, when
added to such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.5 and 2.11,
32
provided that no Revolving Credit Loan shall be made as a Eurodollar Loan after
the day that is one month prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving
Credit Loans on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The
Borrower may borrow under the Revolving Credit Commitments on any Business Day
during the Revolving Credit Commitment Period, provided that the Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice
must be received by the Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the case
of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing
Date, in the case of Base Rate Loans). Any Revolving Credit Loans made on the
Effective Date shall initially be Base Rate Loans. Each borrowing of Revolving
Credit Loans under the Revolving Credit Commitments shall be in an amount equal
to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple of
$200,000 in excess thereof (or, if the then aggregate Available Revolving Credit
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $3,000,000 or a whole multiple of $500,000 in excess thereof.
Upon receipt of any such Borrowing Notice from the Borrower, the Administrative
Agent shall promptly notify each Revolving Credit Lender thereof. Each Revolving
Credit Lender will make its Revolving Credit Percentage of the amount of each
borrowing of Revolving Credit Loans available to the Administrative Agent for
the account of the Borrower at the Funding Office prior to 12:00 Noon, New York
City time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be promptly made
available to the Borrower by the Administrative Agent in like funds as received
by the Administrative Agent.
2.6 Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of the appropriate Revolving Credit Lender or Term Loan Lender, as
the case may be, (i) the then unpaid principal amount of each Revolving Credit
Loan of such Revolving Credit Lender on the Revolving Credit Termination Date
(or on such earlier date on which (x) principal payments are required by Section
2.8 or 2.10 or (y) the Loans become due and payable pursuant to Section 8) and
(ii) the principal amount of each Term Loan of such Term Loan Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which (x) principal payments are required by Section
2.10 or (y) the Loans become due and payable pursuant to Section 8) which shall
be applied pursuant to Section 2.16. The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.13.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
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(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 10.6(d), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.6(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any Term
Loans or Revolving Credit Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit G-1 or G-2, respectively (a "Term Note" or
"Revolving Credit Note", respectively), with appropriate insertions as to date
and principal amount; provided, that delivery of Notes shall not be a condition
precedent to the occurrence of the Effective Date or the making of the Loans on
the Effective Date.
2.7 Commitment Fees, etc. (a) The Borrower agrees to pay
to the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Effective Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative
Agent the fees in the amounts and on the dates from time to time agreed to in
writing by the Borrower and the Administrative Agent.
2.8 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the aggregate amount of the
Revolving Credit Commitments; provided that no such termination or reduction of
Revolving Credit Commitments shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the Total Revolving Extensions of Credit would exceed the Total
Revolving Credit Commitments. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Credit Commitments then in effect.
34
2.9 Optional Prepayments. The Borrower may at any time
and from time to time prepay the Loans, in whole or in part, without premium or
penalty (other than pursuant to Section 2.19), upon irrevocable notice delivered
to the Administrative Agent at least three Business Days prior thereto in the
case of Eurodollar Loans and at least one Business Day prior thereto in the case
of Base Rate Loans, which notice shall specify the date and amount of such
prepayment, whether such prepayment is of Term Loans or Revolving Credit Loans,
and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided,
that if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.19. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Credit Loans that are Base Rate Loans) accrued interest to such date
on the amount prepaid. Partial prepayments of Term Loans and Revolving Credit
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $200,000 in excess thereof.
2.10 Mandatory Prepayments. (a) Unless the Required
Prepayment Lenders shall otherwise agree:
(i) if any Non-Recourse Debt permitted by
Section 7.2(i)(i)(A) shall be incurred, then on the date of
such incurrence, the Loans shall be prepaid by an amount equal
to 100% of the amount of the Net Cash Proceeds of such
incurrence, as set forth in Section 2.10(d);
(ii) if any Sale and Leaseback Transaction shall
be consummated in respect of any fee-owned property owned by
the Borrower or any Class I Restricted Subsidiary on the
Closing Date, or acquired by the Borrower or any Class I
Restricted Subsidiary after the Closing Date in a transaction
of the type described in Section 7.5(f) in exchange for any
real property listed on Schedule 7.11 that is not Mortgaged
Property, then, on the date of consummation of such
transaction, unless a Reinvestment Notice shall have been
delivered in respect thereof, the Loans shall be prepaid by an
amount equal to 100% of the amount of the Net Cash Proceeds of
such transaction (excluding any amounts subject to any such
Reinvestment Notice), as set forth in Section 2.10(d);
(iii) if any Sale and Leaseback Transaction shall
be consummated in respect of any fee-owned property acquired
by the Borrower or any Class I Restricted Subsidiary after the
Closing Date (other than a property acquired after the Closing
Date in a transaction of the type described in Section
7.5(f)), then, on the date of consummation of such
transaction, unless (x) if, on the date of consummation of
such transaction, the aggregate value of all leasehold and
fee-owned real property of the Borrower and the Subsidiary
Guarantors subject to a Mortgage (valued in accordance with
Schedule 6.9; such value to be demonstrated to the reasonable
satisfaction of the Administrative Agent) is less than 325% of
the Assumed Loan Amount, the Borrower shall have agreed to
furnish to the Administrative Agent, within 45 days after the
date of consummation of such transaction, a Mortgage with
respect to such real property, together with any
35
certificates and documents reasonably requested by the
Administrative Agent and (y) a Reinvestment Notice shall have
been delivered in respect thereof, the Loans shall be prepaid
by an amount equal to 100% of the amount of the Net Cash
Proceeds of such transaction (excluding any amounts subject to
any such Reinvestment Notice), as set forth in Section
2.10(d); and
(iv) on each Reinvestment Prepayment Date, the
Loans shall be prepaid by an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Sale and
Leaseback Transaction, as set forth in Section 2.10(d);
provided that, if the Consolidated Senior Leverage Ratio for the period most
recently ended prior to the date of consummation of the relevant transaction
described above in this Section 2.10 is less than 1.0 to 1.0, the percentage of
Net Cash Proceeds required to be prepaid pursuant to this Section 2.10(a) shall
be 50%. The provisions of this Section do not constitute a consent to the
incurrence of any Indebtedness by the Parent, Holdings, the Borrower or any of
its Subsidiaries not permitted by Section 7.2 or the consummation of any sale
and leaseback transaction not permitted by Section 7.11.
(b) Unless the Required Prepayment Lenders shall
otherwise agree, if on any date the Parent, Holdings, the Borrower or any of its
Class I Restricted Subsidiaries shall incur any Indebtedness (excluding the
Indebtedness referred to in Section 2.10(a) and any other Indebtedness incurred
in accordance with Section 7.2, other than Indebtedness under Section
7.2(h)(ii)), an amount equal to 100% of the Net Cash Proceeds thereof shall be
applied on the date of such issuance or incurrence toward the prepayment of the
Term Loans and the reduction of the Revolving Credit Commitments as set forth in
Section 2.10(d). The provisions of this Section do not constitute a consent to
the incurrence of any Indebtedness by the Parent, Holdings, the Borrower or any
of its Subsidiaries not permitted by Section 7.2.
(c) Unless the Required Prepayment Lenders shall
otherwise agree, if on any date the Parent, Holdings, the Borrower or any of its
Class I Restricted Subsidiaries shall receive Net Cash Proceeds from any Asset
Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in
respect thereof, on the date of receipt by the Parent, Holdings, the Borrower or
any of its Class I Restricted Subsidiaries of such Net Cash Proceeds, the Loans
shall be prepaid by an amount equal to the amount of such Net Cash Proceeds
(excluding any amounts subject to any such Reinvestment Notice), as set forth in
Section 2.10(d); provided, that, notwithstanding the foregoing, (i) the
aggregate Net Cash Proceeds of Asset Sales that may be excluded from the
foregoing requirement pursuant to a Reinvestment Notice shall not exceed (A)
$250,000,000 in the aggregate during the term of the Facilities and (B)
$50,000,000 not otherwise reinvested or applied to prepay the Loans at any one
time outstanding and (ii) on each Reinvestment Prepayment Date the Loans shall
be prepaid by an amount equal to the Reinvestment Prepayment Amount with respect
to the relevant Reinvestment Event, as set forth in Section 2.10(d). The
provisions of this Section do not constitute a consent to the consummation of
any Disposition not permitted by Section 7.5.
(d) Amounts to be applied as prepayments pursuant to
Section 2.10(a)(i) shall be applied, first, to repay amounts outstanding under
the Revolving Credit Facility, and second, to the prepayment of the Term Loans,
and all other amounts to be applied as prepayments
36
pursuant to this Section shall be applied, first, to the prepayment of the Term
Loans and second, to the prepayment of the Revolving Credit Loans. Any such
mandatory prepayment of the Revolving Credit Loans pursuant to this Section 2.10
shall not result in a mandatory reduction of the Revolving Credit Commitments.
Amounts prepaid in respect of Term Loans pursuant to this Section 2.10 may not
be reborrowed.
(e) If any of the 8-1/2% Senior Subordinated Notes remain
outstanding as of April 30, 2008 (the "Early Maturity Date"), automatically the
Commitments shall immediately terminate and the Borrower shall prepay all
outstanding Loans hereunder, together with any accrued interest thereon, and all
other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) on the Early Maturity Date.
2.11 Conversion and Continuation Options. (a) Subject to
Section 2.19, the Borrower may elect from time to time to convert Eurodollar
Loans to Base Rate Loans by giving the Administrative Agent at least two
Business Days' prior irrevocable notice of such election. The Borrower may elect
from time to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no Base Rate Loan under a particular Facility
may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has, or the Majority
Facility Lenders in respect of such Facility have, determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) The Borrower may elect to continue any Eurodollar
Loan as such upon the expiration of the then current Interest Period with
respect thereto by giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan under a particular Facility may
be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has, or the Majority Facility Lenders in
respect of such Facility have, determined in its or their sole discretion not to
permit such continuations or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility, and provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso, such Loans shall be converted automatically
to Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
2.12 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
37
Tranche shall be equal to $3,000,000 or a whole multiple of $500,000 in excess
thereof and (b) no more than 20 Eurodollar Tranches shall be outstanding at any
one time.
2.13 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day
on which it is outstanding at a rate per annum equal to the Base Rate in effect
for such day plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of
any Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the
case of the Loans, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans under the
Revolving Credit Facility plus 2%, and (ii) if all or a portion of any interest
payable on any Loan or Reimbursement Obligation or any commitment fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to Base Rate Loans under
the relevant Facility plus 2% (or, in the case of any such other amounts that do
not relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Credit Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.14 Computation of Interest and Fees. (a) Interest, fees
and commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request
38
of the Borrower, deliver to the Borrower a statement showing the quotations used
by the Administrative Agent in determining any interest rate pursuant to
Sections 2.13(a) and (b).
2.15 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice
from the Majority Facility Lenders in respect of the relevant Facility
that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans denominated in Dollars under the
relevant Facility requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (y) any Loans under the relevant Facility that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans under the relevant Facility shall be converted, on the last day
of the then current Interest Period with respect thereto, to Base Rate Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans under the relevant Facility shall be made or continued as such,
nor shall the Borrower have the right to convert Loans under the relevant
Facility to Eurodollar Loans.
2.16 Pro Rata Treatment and Payments. (a) Each borrowing
by the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee or Letter of Credit fee, and any reduction of the
Commitments of the Lenders, shall be made pro rata according to the respective
Term Loan Percentages or Revolving Credit Percentages, as the case may be, of
the relevant Lenders.
(b) Each payment (including each prepayment) of the Term
Loans shall be allocated among the Term Loan Lenders holding such Term Loans pro
rata based on the principal amount of such Term Loans held by such Term Loan
Lenders. The amount of each principal prepayment of the Terms Loans shall be
applied first, to the four immediately succeeding installments of such Term
Loans and, second, to the remaining installments of such Term Loans pro rata
based on the remaining outstanding principal amount of such installments.
Amounts repaid or prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving Credit Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Revolving Credit Loans then held by the
39
Revolving Credit Lenders. Each payment in respect of Reimbursement Obligations
in respect of any Letter of Credit shall be made to the Issuing Lender that
issued such Letters of Credit.
(d) The application of any payment of Loans under any
Facility (including optional and mandatory prepayments) shall be made, first, to
Base Rate Loans under such Facility and, second, to Eurodollar Loans under such
Facility. Each payment of the Loans (except in the case of Revolving Credit
Loans that are Base Rate Loans) shall be accompanied by accrued interest to the
date of such payment on the amount paid.
(e) All payments (including prepayments) to be made by
the Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 12:00 Noon, New York City time, on any Business Day shall be deemed to
have been on the next following Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such Lender
is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this paragraph shall be
conclusive in the absence of manifest error. If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans under the relevant Facility, on demand,
from the Borrower.
(g) Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date of any payment due to be
made by the Borrower hereunder that the Borrower will not make such payment to
the Administrative Agent, the Administrative Agent may assume that the Borrower
is making such payment, and the Administrative Agent may, but
40
shall not be required to, in reliance upon such assumption, make available to
the Lenders their respective pro rata shares of a corresponding amount. If such
payment is not made to the Administrative Agent by the Borrower within three
Business Days after such due date, the Administrative Agent shall be entitled to
recover, on demand, from each Lender to which any amount which was made
available pursuant to the preceding sentence, such amount with interest thereon
at the rate per annum equal to the daily average Federal Funds Effective Rate.
Nothing herein shall be deemed to limit the rights of the Administrative Agent
or any Lender against the Borrower.
2.17 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this Agreement, any Letter of
Credit, any Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by
Section 2.18 and changes in the rate of tax on the overall net
income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender that is not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by
41
such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such corporation for such
reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(d) The Borrower shall not be required to compensate a
Lender pursuant to this Section for any amounts incurred more than six months
prior to the date that such Lender notifies the Borrower of such Lender's
intention to claim compensation therefor; provided that, if the circumstances
giving rise to such claim have a retroactive effect, then such six-month period
shall be extended to include the period of such retroactive effect. In addition,
the Borrower shall not be required to compensate a Lender pursuant to this
Section for Eurocurrency Reserve Requirements to the extent such compensation
would duplicate compensation included in the Eurodollar Rate pursuant to the
definition thereof.
2.18 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on any Agent or any Lender as a result of a
present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent's or such Lender's having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or any Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement; provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or (e) of this Section
or (ii) that are United States withholding taxes imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph (a).
(b) In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
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(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the relevant Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the Agents and
the Lenders for any incremental taxes, interest or penalties that may become
payable by any Agent or any Lender as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
2.19 Indemnity. The Borrower agrees to indemnify each
Lender for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a
43
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment or conversion of Eurodollar Loans on a day that is not
the last day of an Interest Period with respect thereto. Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
that would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. The Borrower shall not be
required to compensate a Lender pursuant to this Section for any amounts
incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor. A
certificate as to any amounts payable pursuant to this Section submitted to the
Borrower by any Lender shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.20 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 2.19.
2.21 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.17,
2.18(a) or 2.20 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 2.17, 2.18(a) or 2.20.
2.22 Replacement of Lenders under Certain Circumstances.
The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.17 or 2.18 or gives a
notice of illegality pursuant to Section 2.20 or
44
(b) defaults in its obligation to make Loans hereunder, with a replacement
financial institution; provided that (i) such replacement does not conflict with
any Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.21 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.17 or 2.18 or
to eliminate the illegality referred to in such notice of illegality given
pursuant to Section 2.20, (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 2.19 (as though Section 2.19 were applicable) if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto, (vi) the replacement
financial institution, if not already a Lender, shall be reasonably satisfactory
to the Administrative Agent, (vii) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 10.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.17 or 2.18, as the
case may be, in respect of any period prior to the date on which such
replacement shall be consummated, and (ix) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, the Administrative Agent
or any other Lender shall have against the replaced Lender.
2.23 Addition of Peso Subfacility. The Borrower has
advised the Lenders that, after the Effective Date, the Borrower and certain of
the Revolving Credit Lenders or their Affiliates (in their sole discretion) or
other lenders selected by the Borrower and reasonably acceptable to the
Administrative Agent (the "Peso Subfacility Lenders") may wish to establish a
subfacility (the "Peso Subfacility") whereby up to $25,000,000 of the Revolving
Credit Commitments would be made available by Peso Subfacility Lenders for
revolving credit loans denominated and funded in Pesos ("Peso Subfacility
Loans"). Accordingly, at any time during the Revolving Credit Commitment Period,
the Borrower, the Peso Subfacility Lenders and the Administrative Agent and, in
the circumstances contemplated by paragraph (h) below only, all Revolving Credit
Lenders (in each case, without the consent of any other party hereto) may enter
into amendments (or amendments and restatements), in form and substance
reasonably satisfactory to the Administrative Agent, to this Agreement and the
other relevant Loan Documents (the "Peso Subfacility Amendments") providing for
the following:
(a) The Peso Subfacility Amendments shall provide that
each Peso Subfacility Lender shall make available to the Borrower (or
to a Subsidiary of the Borrower organized under the laws of Mexico and
designated by the Borrower) (any such Mexican Subsidiary or, as the
case may be, the Borrower, as the borrower under the Peso Subfacility,
the "Peso Subfacility Borrower"), a commitment (for each Peso
Subfacility Lender, the "Peso Subfacility Commitment" of such Peso
Subfacility Lender) to make Peso Subfacility Loans during the period
specified in the Peso Subfacility Amendments (which period shall in any
event end not later than the Revolving Credit Termination Date) (the
"Peso Subfacility Commitment Period") in an aggregate principal amount
for all Peso Subfacility Lenders not exceeding the equivalent in Pesos
of $25,000,000. The Peso Subfacility Amendments shall provide that all
Peso Subfacility Loans will be payable no later than the last day of
the Peso Subfacility Commitment Period. The Peso Subfacility Amendments
shall provide for such interest rate basis or bases, applicable
45
margins, and fees and other pricing terms applicable to the Peso
Subfacility and the Peso Subfacility Loans as shall be agreed upon by
the parties thereto.
(b) The Peso Subfacility Amendments shall provide that
the aggregate amount available under the Revolving Credit Commitments
and the Peso Subfacility, plus the amount of any Third-Party Peso
Loans, shall not exceed the Total Revolving Credit Commitments.
(c) In the event that the Peso Subfacility Amendments
provide that a Subsidiary of the Borrower shall be the Peso Subfacility
Borrower, the Peso Subfacility Amendments may provide that the
obligations of the Peso Subfacility Borrower in respect of the Peso
Subfacility Loans will be guaranteed by the Borrower and the Guarantors
pursuant to the Guarantee and Collateral Agreement and such guarantees
will be secured, equally and ratably with all other Obligations,
pursuant to all Security Documents, as applicable.
(d) Subject to satisfaction of the conditions set forth
in paragraph (h) below, the Peso Subfacility Amendments may provide
that, in connection with the Peso Subfacility, the Revolving Credit
Lenders will purchase, ratably in accordance with the Revolving Credit
Commitments and Peso Subfacility Commitments, participating interests
in any such Peso Subfacility Loan, pursuant to participation provisions
substantially equivalent to those set forth in Section 3 in respect of
participating interests in Letters of Credit, mutatis mutandis.
(e) The Peso Subfacility Amendments may provide for the
conversion to Dollars of any amounts owing under the Peso Subfacility
under such conditions and pursuant to such conversion mechanisms as
shall be set forth in the Peso Subfacility Amendments.
(f) The Peso Subfacility Amendments may provide for
amendments of such other provisions of the Loan Documents (including,
without limitation, amendments providing for indemnities, exchange rate
fluctuation protection, tax gross-up provisions and other provisions in
respect of the Peso Subfacility) as the parties thereto shall
reasonably determine to be necessary or advisable to accomplish the
purpose of establishing the Peso Subfacility and causing the Peso
Subfacility to be treated, to the extent practicable and applicable, as
a subfacility of the Revolving Credit Facility, benefiting from the
protections of the Loan Documents equally and ratably with, and in a
manner otherwise equivalent to, the Revolving Credit Facility.
(g) The Peso Subfacility Amendments shall set forth, as
conditions precedent to the availability of credit under the Peso
Subfacility, the delivery of such corporate records, documents,
evidence of corporate approvals, evidence of necessary consents and
approvals of Governmental Authorities and legal opinions as the parties
thereto shall reasonably determine to be necessary or advisable.
(h) In the event that the Peso Subfacility Amendments
provide for Revolving Credit Lenders (other than the Peso Subfacility
Lenders) to purchase participating
46
interests in amounts outstanding under the Peso Subfacility, each of
the Revolving Credit Lenders shall be a party to, or give its written
consent to, the Peso Subfacility Amendments (it being understood that
each Revolving Credit Lender, in its sole discretion, may determine to
consent or withhold consent to becoming obligated to purchase
participating interests in amounts outstanding under the Peso
Subfacility).
Section 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and
conditions hereof, each Issuing Lender, in reliance on the agreements of the
other Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue
letters of credit (the letters of credit issued on and after the Effective Date
pursuant to this Section 3, the "Letters of Credit") for the account of the
Borrower on any Business Day during the Revolving Credit Commitment Period in
such form as may be approved from time to time by such Issuing Lender; provided,
that no Issuing Lender shall issue any Letter of Credit if, after giving effect
to such issuance, (i) the L/C Obligations would exceed the L/C Commitment or
(ii) the aggregate amount of the Available Revolving Credit Commitments would be
less than zero. Each Letter of Credit shall (i) be denominated in Dollars and
(ii) expire no later than the earlier of (x) the first anniversary of its date
of issuance and (y) the date which is five Business Days prior to the Revolving
Credit Termination Date; provided that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in clause (y) above).
(b) No Issuing Lender shall at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause such Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The
Borrower may from time to time request that an Issuing Lender issue a Letter of
Credit by delivering to such Issuing Lender at its address for notices specified
herein an Application therefor, with a copy to the Administrative Agent,
completed to the satisfaction of such Issuing Lender, and such other
certificates, documents and other papers and information as such Issuing Lender
may request. Upon receipt of any Application, an Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed to by such Issuing Lender and the Borrower
(but in no event shall any Issuing Lender be required to issue any Letter of
Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto). Promptly after issuance by an Issuing Lender of a
Letter of Credit, such Issuing Lender shall furnish a copy of such Letter of
Credit to the Borrower. Each Issuing Lender shall promptly give notice to the
Administrative Agent of the issuance of each Letter of Credit issued by such
Issuing Lender (including the amount thereof). Upon the written request of any
Revolving Credit Lender, the Administrative Agent will, within three Business
Days of such request, inform such Revolving Credit Lender of the aggregate
drawable amount of all Letters of Credit outstanding on the date of such
request.
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3.3 Fees and Other Charges. (a) The Borrower will pay a
fee on the aggregate drawable amount of all outstanding Letters of Credit at a
per annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Credit Facility, shared ratably among the
Revolving Credit Lenders in accordance with their respective Revolving Credit
Percentages and payable quarterly in arrears on each L/C Fee Payment Date after
the issuance date of such Letters of Credit. In addition, the Borrower shall pay
to the relevant Issuing Lender for its own account a fronting fee on the
aggregate drawable amount of all outstanding Letters of Credit issued by it at a
rate per annum to be agreed upon by such Issuing Lender and the Borrower,
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date.
(b) In addition to the foregoing fees, the Borrower shall
pay or reimburse each Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) Each Issuing Lender
irrevocably agrees to grant and hereby grants to each L/C Participant, and, to
induce each Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from each Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk, an undivided interest
equal to such L/C Participant's Revolving Credit Percentage in each Issuing
Lender's obligations and rights under each Letter of Credit issued by such
Issuing Lender hereunder and the amount of each draft paid by such Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees
with each Issuing Lender that, if a draft is paid under any Letter of Credit
issued by such Issuing Lender for which such Issuing Lender is not reimbursed in
full by the Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to such Issuing Lender upon demand at such Issuing
Lender's address for notices specified herein an amount equal to such L/C
Participant's Revolving Credit Percentage of the amount of such draft, or any
part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C
Participant to an Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by such Issuing Lender under any Letter
of Credit is paid to such Issuing Lender within three Business Days after the
date such payment is due, such L/C Participant shall pay to such Issuing Lender
on demand an amount equal to the product of (i) such amount, times (ii) the
daily average Federal Funds Effective Rate during the period from and including
the date such payment is required to the date on which such payment is
immediately available to such Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to Section 3.4(a) is not made available to such Issuing
Lender by such L/C Participant within three Business Days after the date such
payment is due, such Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to Base Rate Loans under the Revolving
Credit Facility. A certificate of such Issuing Lender submitted to any L/C
Participant with respect to any such amounts owing under this Section shall be
conclusive in the absence of manifest error.
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(c) Whenever, at any time after an Issuing Lender has
made payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with Section
3.4(a), such Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of
Collateral applied thereto by such Issuing Lender), or any payment of interest
on account thereof, such Issuing Lender will distribute to such L/C Participant
its pro rata share thereof; provided, however, that in the event that any such
payment received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such L/C Participant shall return to such Issuing Lender the
portion thereof previously distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The
Borrower agrees to reimburse each Issuing Lender, on each date on which such
Issuing Lender notifies the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by such Issuing Lender, for the amount of
(a) such draft so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by such Issuing Lender in connection with such payment (the
amounts described in the foregoing clauses (a) and (b) in respect of any
drawing, collectively, the "Payment Amount"). Each such payment by the Borrower
of the Payment Amount shall be made to such Issuing Lender at its address for
notices specified herein in lawful money of the United States of America and in
immediately available funds. Interest shall be payable on each Payment Amount
from the date of the applicable drawing until payment in full at the rate set
forth in (i) until the second Business Day following the date of the applicable
drawing, Section 2.13(b) and (ii) thereafter, Section 2.13(c). Each drawing
under any Letter of Credit shall (unless an event of the type described in
clause (i) or (ii) of Section 8(f) shall have occurred and be continuing with
respect to the Borrower, in which case the procedures specified in Section 3.4
for funding by L/C Participants shall apply) constitute a request by the
Borrower to the Administrative Agent for a borrowing pursuant to Section 2.5 of
Revolving Credit Loans as Base Rate Loans in the amount of such drawing. The
Borrowing Date with respect to such borrowing shall be the first date on which a
borrowing of Revolving Credit Loans could be made, pursuant to Section 2.5, if
the Administrative Agent had received a notice of such borrowing at the time the
Administrative Agent receives notice from the relevant Issuing Lender of such
drawing under such Letter of Credit.
3.6 Obligations Absolute. The Borrower's obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender that such Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The
49
Borrower agrees that any action taken or omitted by an Issuing Lender under or
in connection with any Letter of Credit issued by it or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards or care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of such Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the relevant Issuing Lender
shall promptly notify the Borrower of the date and amount thereof. The
responsibility of the relevant Issuing Lender to the Borrower in connection with
any draft presented for payment under any Letter of Credit, in addition to any
payment obligation expressly provided for in such Letter of Credit issued by
such Issuing Lender, shall be limited to determining that the documents
(including each draft) delivered under such Letter of Credit in connection with
such presentment appear on their face to be in conformity with such Letter of
Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement or the Guarantee and Collateral Agreement, the provisions of
this Agreement or the Guarantee and Collateral Agreement, as applicable, shall
apply.
Section 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Parent, Holdings and the Borrower hereby jointly and severally
represent and warrant to each Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Parent and its consolidated Subsidiaries as at
December 31, 2003 (including the notes thereto) (the "Pro Forma Balance Sheet"),
copies of which have heretofore been furnished to each Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the
consummation of the Transaction, (ii) the Loans to be made and the Senior
Discount Notes to be issued on the Effective Date and the use of proceeds
thereof and (iii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Parent as of the date of delivery thereof, and
presents fairly in all material respects on a pro forma basis the estimated
financial position of the Parent and its consolidated Subsidiaries as at
December 31, 2003, assuming that the events specified in the preceding sentence
had actually occurred at such date.
(b) The audited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as at December 31, 2002 and December
31, 2003, and the related consolidated statements of income and of cash flows
for the fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from Deloitte & Touche LLP, present fairly in all material
respects the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such dates, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended. All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned
50
firm of accountants and disclosed therein). The Parent, Holdings, the Borrower
and its Restricted Subsidiaries do not have any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most recent
financial statements referred to in this paragraph. During the period from
December 31, 2003 to and including the date hereof there has been no Disposition
by the Borrower or any of its Subsidiaries of any material part of its business
or Property.
4.2 No Change. Since December 31, 2003 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the
Parent, Holdings, the Borrower and its Restricted Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority, and
the legal right, to own and operate its Property, to lease the Property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of Property or
the conduct of its business requires such qualification except to the extent
that the failure to do so could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable
Obligations. Each Loan Party has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents to which it is a
party, to consummate the Recapitalization and, in the case of the Borrower, to
borrow hereunder. Each Loan Party has taken all necessary corporate or other
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrower, to authorize
the borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
Transaction, the borrowings hereunder or the execution, delivery, performance,
validity or enforceability of this Agreement or any of the other Loan Documents,
except (i) consents, authorizations, filings and notices described in Schedule
4.4, which consents, authorizations, filings and notices have been obtained or
made and are in full force and effect and (ii) the filings referred to in
Section 4.19 and any other filing required to be made by this Agreement. Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
that is a party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party that is a party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5 No Legal Bar. The execution, delivery and performance
of this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings
51
hereunder, the use of the proceeds thereof and the consummation of the
Recapitalization will not violate any Requirement of Law or any material
Contractual Obligation of the Parent, Holdings, the Borrower or any of its
Restricted Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. Except as set forth on
Schedule 4.6, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Parent, Holdings or the Borrower, threatened by or against the Parent, Holdings,
the Borrower or any of its Subsidiaries or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. Neither the Parent, Holdings, the
Borrower nor any of its Subsidiaries is in default under or with respect to any
of its Contractual Obligations in any respect that could reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.
4.8 Ownership of Property; Liens. Each of the Parent,
Holdings, the Borrower and its Restricted Subsidiaries has title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other Property except for such defects
in title as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, and none of such Property is subject to any
Lien except as permitted by Section 7.3.
4.9 Intellectual Property. The Parent, Holdings, the
Borrower and each of its Restricted Subsidiaries owns, or is licensed to use,
all Intellectual Property necessary for the conduct of its business as currently
conducted. No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does the Parent, Holdings or
the Borrower know of any valid basis for any such claim, other than any such
claim that could not reasonably be expected to have a Material Adverse Effect.
Except as would not have a Material Adverse Effect, the use of Intellectual
Property by the Parent, Holdings, the Borrower and its Restricted Subsidiaries
does not infringe on the rights of any Person.
4.10 Taxes. Each of the Parent, Holdings, the Borrower and
each of its Restricted Subsidiaries has filed or caused to be filed all Federal,
state and other material tax returns that are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments made
against it or any of its Property and all other taxes, fees or other charges
imposed on it or any of its Property by any Governmental Authority, in each case
prior to delinquency (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Parent, Holdings, the Borrower or its Restricted Subsidiaries, as
the case may be); and no tax Lien has been filed, and, to the
52
knowledge of the Parent, Holdings and the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
4.12 Labor Matters. There are no strikes or other labor
disputes against the Parent, Holdings, the Borrower or any of its Restricted
Subsidiaries pending or, to the knowledge of the Parent, Holdings or the
Borrower, threatened that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. Hours worked by and payment made to
employees of the Parent, Holdings, the Borrower and its Restricted Subsidiaries
have not been in violation of the Fair Labor Standards Act (to the extent
applicable) or any other applicable Requirement of Law dealing with such matters
that (individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the Parent, Holdings, the
Borrower or any of its Restricted Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect, if not paid, have been paid or
accrued as a liability on the books of the Parent, Holdings, the Borrower or the
relevant Restricted Subsidiary.
4.13 ERISA. Except as set forth on Schedule 4.13, neither
a Reportable Event nor an "accumulated funding deficiency" (within the meaning
of Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No termination of
a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits by a material amount.
Neither the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan that has resulted or could
reasonably be expected to result in a material liability under ERISA, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. No such Multiemployer Plan is in Reorganization or
Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to
53
regulation under any Requirement of Law (other than Regulation X of the Board)
which limits its ability to incur Indebtedness.
4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule
4.15(a) constitute all the Subsidiaries of the Borrower as of the Effective
Date. Schedule 4.15(a) sets forth as of the Effective Date the name and
jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary, the
percentage of each class of Capital Stock owned by each Loan Party and whether
such Subsidiary is a Class I Restricted Subsidiary, Class II Restricted
Subsidiary or an Unrestricted Subsidiary and, in the case of each Class I
Restricted Subsidiary, whether such Subsidiary is a Wholly Owned Subsidiary and
a Subsidiary Guarantor.
(b) There are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of the Parent, Holdings, the Borrower
or any Subsidiary, except as disclosed on Schedule 4.15(b) or with respect to
such Capital Stock owned by third parties.
4.16 Use of Proceeds. The proceeds of the Term Loans shall
be used (i) for the refinancing of the loans outstanding under the Existing
Credit Agreement and the payment in full of any and all other amounts owing to
the lenders thereunder, (ii) to finance the repurchase or redemption of not less
than $94,000,000 aggregate principal amount of the 8-1/2% Senior Subordinated
Notes and (iii) to pay related fees and expenses. The proceeds of the Revolving
Credit Loans and the Letters of Credit shall be used for general corporate
purposes of the Borrower and its Restricted Subsidiaries in the ordinary course
of business and may also be used to finance (a) the Change of Control Offer to
the extent permitted under Section 7.9(a)(ii)(B), (b) the Brazilco Acquisition,
provided that, if after giving effect to the Brazilco Acquisition, the Borrower
has not designated Brazilco as a Class II Restricted Subsidiary, the Revolving
Credit Loans used to finance the Brazilco Acquisition may not exceed an
aggregate amount equal to $60,000,000 and (c) the repurchase, redemption or
defeasance of up to $11,000,000 aggregate principal amount of the 8-1/2% Senior
Subordinated Notes.
4.17 Environmental Matters. Other than exceptions to any
of the following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) The Borrower and its Subsidiaries: (i) are, and
within the period of all applicable statutes of limitation have been,
in compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect)
required for any of their current operations at any property owned,
leased, or otherwise operated by any of them; (iii) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all of their Environmental Permits; and (iv) reasonably
believe that: each application for renewal of each of their
Environmental Permits will be timely filed and such Environmental
Permits, when renewed, will be complied with, without additional
material expense; any additional Environmental Permits that may be
required of any of them will be timely applied for and complied with,
without material expense; and compliance with any Environmental Law
54
that is or is expected to become applicable to any of them will be
timely attained and maintained, without material expense.
(b) Materials of Environmental Concern are not present
at, on, under, in, or about any real property now or formerly owned,
leased or operated by the Borrower or any of its Subsidiaries, or at
any other location (including, without limitation, any location to
which Materials of Environmental Concern have been sent for re-use or
recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of the Borrower or
any of its Subsidiaries under any applicable Environmental Law or
otherwise result in costs to the Borrower or any of its Subsidiaries,
or (ii) interfere with the Borrower's or any of its Subsidiaries'
continued operations, or (iii) impair the fair saleable value of any
real property owned or leased by the Borrower or any of its
Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which the Borrower or any
of its Subsidiaries is, or to the knowledge of the Borrower or any of
its Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Borrower or any of its Subsidiaries, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it
is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act
or any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or
other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other
forum for dispute resolution, relating to compliance with or liability
under any Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has
contractually assumed or retained any liabilities of any kind, fixed or
contingent, known or unknown, under any Environmental Law or with
respect to any Material of Environmental Concern.
4.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document, certificate or
statement furnished to the Administrative Agent or the Lenders or any of them,
by or on behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished (or,
in the case of the Confidential Information Memorandum, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized
55
by the Lenders that such financial information as it relates to future events is
not to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein by a material amount. As of the date hereof, the representations
and warranties of Parent contained in the Recapitalization Documentation are
true and correct in all material respects. There is no fact known to any Loan
Party that could reasonably be expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Loan Documents, in the
Confidential Information Memorandum or in any other documents, certificates and
statements furnished to the Agents and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock, stock certificates representing such Pledged Stock have been
delivered to the Administrative Agent, and in the case of the other Collateral
described in the Guarantee and Collateral Agreement, financing statements in
appropriate form have been filed in the offices specified on Schedule 4.19(a)
and such other filings as are specified on Schedule 3 to the Guarantee and
Collateral Agreement have been completed and the liens and security interests
created under the Guarantee and Collateral Agreement constitute fully perfected
Liens on, and security interests in, all right, title and interest of the Loan
Parties in such Collateral and the proceeds thereof, as security for the
Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person (except Liens permitted by
Section 7.3(a) and, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 7.3).
(b) Each of the Mortgages (as amended by the respective
Mortgage Amendment, if any) is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof; and when the Mortgages or Mortgage Amendments, as applicable, are filed
in the offices specified on Schedule 4.19(b) (in the case of the Existing
Mortgages and the Mortgages to be executed and delivered on the Effective Date,
as the case may be) or in the recording office designated by the Borrower (in
the case of any Mortgage to be executed and delivered pursuant to Section
6.9(b)), such Mortgage or Existing Mortgage (as amended by the respective
Mortgage Amendment), as the case may be, shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in the Mortgaged Properties described therein and the proceeds thereof, as
security for the Obligations (as defined in the relevant Mortgage or Existing
Mortgage (as amended by the respective Mortgage Amendment), as the case may be),
in each case prior and superior in right to any other Person (other than Persons
holding Liens or other encumbrances or rights permitted by the relevant Mortgage
or Existing Mortgage (as amended by the respective Mortgage Amendment), as the
case may be).
4.20 Solvency. Each Loan Party is, and after giving effect
to the Transaction and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
56
4.21 Senior Indebtedness. The Obligations constitute
"Designated Senior Indebtedness" of the Borrower under and as defined in each
Senior Subordinated Note Indenture. In furtherance thereof, and for avoidance of
doubt, the Company hereby designates all "Indebtedness" (as defined in the
Senior Subordinated Note Indentures in existence on the date hereof) under this
Agreement as "Designated Senior Indebtedness" for purposes of such Senior
Subordinated Note Indentures.
4.22 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968 (except any Mortgaged Properties as to which such flood insurance as
required by Regulation H has been obtained and is in full force and effect as
required by this Agreement).
Section 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each Lender to
make the initial extension of credit requested to be made by it hereunder is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Effective Date, of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Parent, Holdings and the Borrower, (ii) the
Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of the Parent, Holdings, the Borrower and each
Subsidiary Guarantor and (iii) a Lender Addendum executed and delivered
by each Lender and accepted by the Borrower.
(b) Required Lenders and Required Prepayment Lenders
under Existing Credit Agreement. The Administrative Agent shall have
received written consents from Lenders (as defined in the Existing
Credit Agreement) which constitute Required Lenders and, with respect
to the amendment of Section 2.10(a) of the Existing Credit Agreement,
the Required Prepayment Lenders (each as defined in the Existing Credit
Agreement) under the Existing Credit Agreement to the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby (it being agreed that the execution of a Lender
Addendum on the Effective Date, or an Assignment and Acceptance after
the Effective Date, shall constitute such written consent).
(c) Recapitalization, etc. (i) The Recapitalization shall
have been consummated on terms consistent with the Recapitalization
Documentation, and no material provision thereof shall have been
waived, amended or supplemented which would adversely affect the
Lenders.
(ii) The capital structure of the Parent and its
Subsidiaries after giving effect to the Transaction shall be
reasonably satisfactory to the Lenders.
(d) Senior Discount Notes. The Parent shall have received
at least $360,000,000 in gross cash proceeds from the offering of the
Senior Discount Notes and
57
the Net Cash Proceeds thereof shall have been used to purchase the
Parent's Capital Stock and pay related fees and expenses pursuant to
the Recapitalization Documentation.
(e) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet and (ii)
audited consolidated financial statements of (A) the Parent and its
consolidated Subsidiaries and (B) the Borrower and its consolidated
Subsidiaries for the 2003 Fiscal Year; and such financial statements
shall not, in the reasonable judgment of the Lenders, reflect any
material adverse change in the consolidated financial condition of the
Borrower and its consolidated Subsidiaries, as reflected in the
financial statements or projections contained in the Confidential
Information Memorandum.
(f) Approvals. All material governmental and third party
approvals (including landlords' and other consents, other than with
respect to Post-Effective Date Mortgaged Properties) necessary in
connection with the Transaction, the continuing operations of the
Parent, Holdings, the Borrower and its Restricted Subsidiaries and the
transactions contemplated hereby shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority that would restrain, prevent or otherwise impose adverse
conditions on the Recapitalization or the financing contemplated
hereby.
(g) Related Agreements. To the extent not previously
delivered, the Administrative Agent shall have received true and
correct copies, certified as to authenticity by the Borrower, of (i)
the Recapitalization Documentation, (ii) the Senior Discount Notes
Indenture, (iii) each Senior Subordinated Note Indenture and (iv) such
other documents or instruments as may be reasonably requested by the
Administrative Agent, including, without limitation, a copy of any debt
instrument or security agreement to which the Loan Parties may be a
party.
(h) Repayment of Loans under Existing Credit Agreement.
The Administrative Agent shall have received evidence reasonably
satisfactory to it that (i) the Lenders (as defined in the Existing
Credit Agreement) (the "Existing Lenders") shall have been or shall
concurrently be relieved of all obligations in respect of their
Commitments (as defined in the Existing Credit Agreement), (ii) each
Existing Lender's Revolving Credit Loans (as defined in the Existing
Credit Agreement) outstanding under the Existing Credit Agreement shall
have been or shall concurrently be repaid in full, together with any
accrued interest thereon and any accrued fees payable under the
Existing Credit Agreement to but excluding the Effective Date and (iii)
each Existing Lender's Tranche C Term Loan (as defined in the Existing
Credit Agreement) outstanding under the Existing Credit Agreement shall
have been or shall concurrently be repaid in full, together with any
accrued interest thereon and any accrued fees payable under the
Existing Credit Agreement to but excluding the Effective Date.
(i) Fees. The Lenders and the Administrative Agent shall
have received all fees required to be paid (including the commitment
fee required to be paid pursuant to Section 2.7 of the Existing Credit
Agreement), and all expenses for which invoices have been presented
supported by customary documentation (including reasonable fees,
58
disbursements and other charges of counsel to the Agents), on or before
the Effective Date. All such amounts will be paid with proceeds of
Loans made on the Effective Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or
before the Effective Date.
(j) Business Plan. The Lenders shall have received a
satisfactory business plan for fiscal years 2004-2008 and a
satisfactory written analysis of the business and prospects of the
Borrower and its Subsidiaries for the period from the Effective Date
through March 31, 2011.
(k) Solvency Analysis. The Lenders shall have received a
reasonably satisfactory solvency certificate of the chief financial
officer of the Borrower which shall certify as to the solvency of the
Borrower and its Subsidiaries considered as a whole after giving effect
to the Transactions and the other transactions contemplated hereby.
(l) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions in which Uniform Commercial Code financing statement or
other filings or recordations should be made to evidence or perfect
security interests in all assets of the Loan Parties, and such search
shall reveal no liens on any of the assets of the Loan Party, except
for Liens permitted by Section 7.3.
(m) Environmental Matters. To the extent not previously
delivered, the Administrative Agent shall have received, with a copy
for each Lender, to the extent existing and requested by the
Administrative Agent a written environmental assessment regarding each
Mortgaged Property (other than Post-Effective Date Mortgaged Property)
owned in fee by the Borrower and its Restricted Subsidiaries, prepared
by an environmental consultant acceptable to the Administrative Agent,
in form, scope, and substance satisfactory to the Administrative Agent,
together with a letter from the environmental consultant permitting the
Agents and the Lenders to rely on the environmental assessment as if
addressed to and prepared for each of them.
(n) Appraisals. The Administrative Agent shall have
received with respect to each Mortgaged Property (other than
Post-Effective Date Mortgaged Property), an appraisal of the value, or
a valuation, of such Mortgaged Property, which shall be reasonably
satisfactory to the Administrative Agent.
(o) Expenses. The Administrative Agent shall have
received satisfactory evidence that the fees and expenses (excluding
compensation expenses) to be incurred in connection with the
Transaction and the financing thereof shall not exceed $67,500,000.
(p) Closing Certificate. The Administrative Agent shall
have received a certificate of each Loan Party, dated the Effective
Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments.
(q) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
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(i) the legal opinion of Akin, Gump, Strauss,
Xxxxx & Xxxx, L.L.P., counsel to the Loan Parties,
substantially in the form of Exhibit F-1.
(ii) to the extent consented to by the relevant
counsel, each legal opinion, if any, delivered in connection
with the Recapitalization Agreement, accompanied by a reliance
letter in favor of the Lenders; and
(iii) the legal opinion of each local counsel
listed on Schedule 5.1(q) and of such other special and local
counsel as may be required by the Administrative Agent, in
each case, substantially in the form of Exhibit F-2.
Such legal opinions shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(r) Pledged Stock; Stock Powers; Acknowledgment and
Consent; Pledged Notes. The Administrative Agent shall have received
(i) to the extent not previously delivered, the certificates
representing the shares of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof, (ii) an Acknowledgment and Consent,
substantially in the form of Annex II to the Guarantee and Collateral
Agreement, duly executed by any issuer of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement that is not itself a
party to the Guarantee and Collateral Agreement and (iii) to the extent
not previously delivered, each promissory note pledged pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank satisfactory to
the Administrative Agent) by the pledgor thereof.
(s) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior
in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall have been filed, registered
or recorded or shall have been delivered to the Administrative Agent
and be in proper form for filing, registration or recordation.
(t) Mortgages, etc. (i) The Administrative Agent shall
have received the Mortgage Amendments executed and delivered by a duly
authorized officer of each party thereto.
(ii) In respect of each Existing Title Policy, an
endorsement or endorsements (collectively, the "Endorsements")
or marked up unconditional binder for the issuance of such
Endorsements dated on or about the Effective Date. Each of the
Endorsements shall modify the relevant Existing Title Policy
to (A) insure that the Existing Mortgage (as amended) insured
thereby continues to
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be a valid first Lien on the relevant Mortgaged Property
encumbered thereby free and clear of all defects and
encumbrances, except those permitted by Section 7.3 and as
disclosed therein; (B) name the Administrative Agent for the
benefit of the Secured Parties as the insured thereunder; and
(C) be in form and substance reasonably satisfactory to the
Administrative Agent. The Administrative Agent shall have
received evidence reasonably satisfactory to it that all
premiums in respect of each of the Endorsements, and all
charges for mortgage recording tax and all related expenses,
if any, have been paid. The Administrative Agent shall have
also received a copy of all recorded documents referred to, or
listed as exceptions to title in, the Endorsements referred to
in this subsection and a copy of all other documents affecting
the Mortgaged Property encumbered by the Existing Mortgage (as
amended) as shall have been reasonably requested by the
Administrative Agent.
(ii) The Administrative Agent shall have received
for each Mortgaged Property (other than any Mortgaged Property
subject to an Existing Mortgage and any Post-Effective Date
Mortgaged Property), a Mortgage, executed and delivered by a
duly authorized officer of each party thereto.
(u) Title Insurance; Flood Insurance. With respect to
each Mortgaged Property (other than any Mortgaged Property subject to
an Existing Mortgage and any Post-Effective Date Mortgaged Property):
(i) If requested by the Administrative Agent,
the Administrative Agent shall have received, and the title
insurance company issuing the policy referred to in clause
(ii) below (the "Title Insurance Company") shall have
received, maps or plats of an as-built survey of the sites of
such Mortgaged Properties prepared by an independent
professional licensed land surveyor reasonably satisfactory to
the Administrative Agent and the Title Insurance Company (and
certified by such surveyor to the Administrative Agent and the
Title Insurance Company), which maps or plats and the surveys
on which they are based shall be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping
in 1992, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps,
plats or surveys the following: (A) the locations on such
sites of all the buildings, structures and other improvements
and the established building setback lines; (B) the lines of
streets abutting the sites and width thereof; (C) all access
and other easements appurtenant to the sites; (D) all
roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the
site, whether recorded, apparent from a physical inspection of
the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building
structures and improvements on the sites; (F) if the site is
described as being on a filed map, a legend relating the
survey to said map; and (G) the flood zone designations, if
any, in which such Mortgaged Properties are located.
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(ii) The Administrative Agent shall have received
in respect of such Mortgaged Property a mortgagee's title
insurance policy (or policies) or marked up unconditional
binder for such insurance. Each such policy shall (A) be in an
amount reasonably satisfactory to the Administrative Agent;
(B) be issued at ordinary rates; (C) insure that the Mortgage
insured thereby creates a valid first Lien on such Mortgaged
Property free and clear of all defects and encumbrances,
except as disclosed therein; (D) name the Administrative Agent
for the benefit of the Secured Parties as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970
(Amended 10/17/70 and 10/17/84) (or equivalent policies); (F)
contain such endorsements and affirmative coverage as the
Administrative Agent may reasonably request and (G) be issued
by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or
reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory
to it that all premiums in respect of each such policy, all
charges for mortgage recording tax, and all related expenses,
if any, have been paid.
(iii) If requested by the Administrative Agent,
the Administrative Agent shall have received (A) a policy of
flood insurance that (1) covers any parcel of improved real
property that is encumbered by any Mortgage, (2) is written in
an amount not less than the outstanding principal amount of
the indebtedness secured by such Mortgage that is reasonably
allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968,
whichever is less, and (3) has a term which may be extended
until a date which is after the maturity of the Loans and (B)
confirmation that the Borrower has received the notice
required pursuant to Section 208.25(i) of Regulation H of the
Board.
(iv) The Administrative Agent shall have received
a copy of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies referred
to in clause (ii) above and a copy of all other material
documents affecting such Mortgaged Properties.
(v) Notwithstanding the foregoing provisions of
this paragraph (u), the Borrower shall not be required to take
the actions described in this paragraph (u) in respect of any
Mortgaged Property until such Property is required to be
mortgaged pursuant to Section 6.14.
(v) Lease Conditions. To the extent not previously
delivered, the Administrative Agent shall have received evidence that
short form leases or lease memoranda shall have been duly recorded in
the local real estate records, with respect to each Mortgaged Property
constituting a leasehold interest. To the extent not previously
delivered, the Administrative Agent shall have received with respect to
those Mortgaged Properties consisting of leaseholds so designated by
the Administrative Agent, copies of valid, binding and enforceable
lease amendments or landlord agreements in form and content reasonably
acceptable to the Administrative Agent, conferring on the
62
Administrative Agent rights of default notice, cure opportunity and
such other leasehold lender protections as the Administrative Agent may
reasonably require. Notwithstanding the foregoing provisions of this
paragraph (v), the Borrower shall not be required to take the actions
described in this paragraph (v) in respect of any Mortgaged Property
until such Property is required to be mortgaged pursuant to Section
6.14.
(w) Insurance. The Administrative Agent shall have
received insurance certificates satisfying the requirements of Section
5.3 of the Guarantee and Collateral Agreement.
(x) Real Property Valuation: The Lenders shall have
received a satisfactory third-party valuation of the Mortgaged Property
as at the Effective Date showing a valuation of such Mortgaged Property
equal to 200% of the amount of Term Loan Commitments.
(y) Senior Management. The Lenders shall be satisfied
that, after giving effect to the Transaction, the existing senior
managers shall be available to manage the Borrower and its Restricted
Subsidiaries.
(z) PATRIOT Act. The Lenders shall have received,
sufficiently in advance of closing, all documentation and other
information required by bank regulatory authorities under applicable
"know your customer" and anti-money laundering rules and regulations,
including without limitation the United States PATRIOT Act.
5.2 Conditions to Each Extension of Credit. The agreement
of each Lender to make any extension of credit requested to be made by it
hereunder on any date (including, without limitation, its initial extension of
credit) is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date (except that
any representation or warranty which by its terms is made as of an
earlier date shall be true and correct in all material respects as of
such earlier date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf
of the Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
Section 6. AFFIRMATIVE COVENANTS
The Parent, Holdings and the Borrower hereby jointly and
severally agree that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or
any Agent hereunder, each of the Parent, Holdings
63
and the Borrower shall and shall cause each of its Class I Restricted
Subsidiaries (and, with respect to Section 6.12, Class II Restricted
Subsidiaries and Unrestricted Subsidiaries) to:
6.1 Financial Statements. Furnish to each Agent:
(a) (i) as soon as available, but in any event within 90
days after the end of each Fiscal Year, a copy of the audited
consolidated balance sheet of the Parent and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures as of the
end of and for the previous year, reported on without a "going concern"
or like qualification or exception, or qualification arising out of the
scope of the audit, by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing; and
(ii) as soon as available, but in any event within 90 days
after the end of each Fiscal Year, a copy of the unaudited consolidated
balance sheet of the Borrower and its consolidated Restricted
Subsidiaries as at the end of such year and the related unaudited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year; and
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of
each Fiscal Year, (i) unaudited consolidated balance sheets of the
Parent and its consolidated Subsidiaries and (ii) the unaudited
consolidated balance sheet of the Borrower and its consolidated
Restricted Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures as
of the end of and for the corresponding period in the previous year,
certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments and the
absence of footnotes);
all such financial statements to present fairly in all material respects the
financial position of the Parent and its consolidated Subsidiaries or the
Borrower and its Restricted Subsidiaries, as the case may be, and, in each case,
to be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).
6.2 Certificates; Other Information. Furnish to each
Agent, or, in the case of clause (h), to the relevant Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 6.1(a)(i), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate (it being understood that such
certificate shall be limited to the items that independent certified
public accountants are permitted to cover in such certificates pursuant
to their professional standards and customs of the profession);
64
(b) concurrently with the delivery of any financial
statements pursuant to Section 6.1, (i) a certificate of a Responsible
Officer (A) stating that, to the best of such Responsible Officer's
knowledge, each Loan Party during such period has observed or performed
all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate and (B)
certifying as to any change in designation of any Unrestricted
Subsidiaries and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information and
calculations necessary for determining compliance by the Parent,
Holdings, the Borrower and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter
or Fiscal Year, as the case may be, (y) to the extent not previously
disclosed to the Administrative Agent, a listing of any Intellectual
Property acquired by any Loan Party since the date of the most recent
list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Effective Date) and (z) any UCC
financing statements or other filings specified in such Compliance
Certificate as being required to be delivered therewith;
(c) as soon as available, and in any event no later than
90 days after the end of each Fiscal Year, a detailed consolidated
budget for the following fiscal year (including a projected
consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as
available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by
a certificate of a Responsible Officer stating that such Projections
are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made and that
such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;
(d) within 45 days after the end of each of the first
three fiscal quarters, and within 90 days after the end of each Fiscal
Year, of the Borrower, a narrative discussion and analysis of the
financial condition and results of operations of the Parent and its
consolidated 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, as compared to the comparable periods of the previous
year;
(e) no later than five Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with
respect to any Senior Subordinated Note Indenture or the
Recapitalization Documentation;
(f) within five days after the same are sent, copies of
all financial statements and reports that the Parent, Holdings or the
Borrower sends to the holders of any class of its debt securities or
public equity securities generally and, within five days after the same
are filed, copies of all financial statements and reports that the
Parent, Holdings or the Borrower may make to, or file with, the SEC;
65
(g) as soon as possible and in any event within 20 days
of obtaining knowledge thereof: (i) written notice of any development,
event, or condition that, individually or in the aggregate with other
developments, events or conditions, could reasonably be expected to
result in the payment by the Borrower and its Class I Restricted
Subsidiaries, in the aggregate, of a Material Environmental Amount; and
(ii) any written notice that any governmental authority may deny any
application for an Environmental Permit sought by, or revoke or refuse
to renew any Environmental Permit held by, the Borrower; and
(h) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Parent, Holdings, the Borrower or its Class I
Restricted Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence,
etc. (a) (i) Preserve, renew and keep in full force and effect its corporate or
other existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 7.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law, except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all
Property and systems useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as the Borrower
deems adequate for its business. Additional covenants regarding insurance
coverage are set forth in the Mortgages and in Section 5.3 of the Guarantee and
Collateral Agreement.
6.6 Inspection of Property; Books and Records;
Discussions. (a) Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities
and (b) upon prior notice, permit representatives of any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time during normal business hours and as
often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of the Parent, Holdings, the
Borrower and its Class I Restricted Subsidiaries with officers of the Parent,
Holdings, the Borrower and its Class I Restricted Subsidiaries and with its
independent certified public accountants.
66
6.7 Notices. Promptly give notice to the Administrative
Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Parent, Holdings, the Borrower or any of
its Subsidiaries or (ii) litigation, investigation or proceeding which
may exist at any time between the Parent, Holdings, the Borrower or any
of its Subsidiaries and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be,
could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Parent,
Holdings, the Borrower or any of its Restricted Subsidiaries in which
the amount involved is $5,000,000 or more and not covered by insurance
or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; and
(e) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect. Each notice
pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Parent, Holdings, the Borrower or
the relevant Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material
respects with, and use commercially reasonable efforts to cause compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws, and obtain and comply in all material respects
with and maintain, and use commercially reasonable efforts to cause all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all Environmental Permits.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Additional Collateral, etc. (a) With respect to any
Property acquired after the Effective Date by the Parent, Holdings, the Borrower
or any Subsidiary Guarantor (other than (w) the Capital Stock of any
Unrestricted Subsidiary organized under the laws of any jurisdiction outside the
United States, (x) any Property described in paragraph (c) or (d) of this
Section, (y) any interest in real property and (z) any Property subject to a
Lien expressly permitted by
67
Section 7.3(g), (k) or (m)) as to which the Administrative Agent, for the
benefit of the Secured Parties, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such Property and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority (subject to
Liens permitted by the Guarantee and Collateral Agreement) security interest in
such Property, including without limitation, the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be reasonably requested
by the Administrative Agent.
(b) With respect to (i) any fee interest in any real
property having a value (together with improvements thereof) of at least
$2,000,000 (valued in accordance with Schedule 6.9; such valuation to be
reasonably satisfactory to the Administrative Agent) acquired after the
Effective Date by the Parent, Holdings, the Borrower or any Subsidiary Guarantor
(which, for purposes of this paragraph, shall include any such property owned or
leased by an entity at the time such entity becomes a Subsidiary) or (ii) any
leasehold interest in any real property contemplating an initial annual rent
payment, including projected percentage rent during such initial year, after the
expiration of any free rent or "rent abatement" period, of at least $500,000
acquired or leased after the Effective Date by the Parent, Holdings, the
Borrower or any Subsidiary Guarantor (in each case other than any such real
property subject to a Lien expressly permitted by Section 7.3(g), (k) or (m)),
if, at the time of such acquisition or lease commencement, the aggregate value
of all leasehold and fee-owned real property of the Borrower and the Subsidiary
Guarantors subject to a Mortgage (valued in accordance with Schedule 6.9; such
value to be demonstrated to the reasonable satisfaction of the Administrative
Agent) is less than 325% of the Assumed Loan Amount, then no later than 45 days
after the date of such acquisition or lease commencement: (A) execute and
deliver a first priority Mortgage in favor of the Administrative Agent, for the
benefit of the Secured Parties, covering such real property, subject to any
Liens permitted by such Mortgage, (B) if requested by the Administrative Agent,
provide the Lenders with (w) title and extended coverage insurance covering such
real property in an amount at least equal to the purchase price of such real
property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as an ALTA survey thereof, together with a
surveyor's certificate, (x) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Mortgage, each of the foregoing in form and substance reasonably satisfactory to
the Administrative Agent, (y) appraisals of such real property complying with
Section 5.1(n) and (z) Phase I environmental reports (and where appropriate
based upon such Phase I environmental reports and at the reasonable request of
the Administrative Agent, Phase II environmental reports) with respect to such
real property, all in form and substance reasonably satisfactory to the
Administrative Agent and (C) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than (i) a
Class II Restricted Subsidiary or (ii) an Unrestricted Subsidiary organized
under the laws of any jurisdiction outside
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the United States) created or acquired after the Effective Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that becomes a
Class I Restricted Subsidiary because it ceases to be an Unrestricted
Subsidiary), by the Parent, Holdings, the Borrower or any Subsidiary Guarantor,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by the Parent, Holdings, the Borrower
or any Subsidiary Guarantor (other than any such Capital Stock subject to a Lien
expressly permitted by Section 7.3(m)), subject to the Liens permitted by the
Guarantee and Collateral Agreement, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Parent, Holdings, the Borrower or such Subsidiary Guarantor, as the case may be,
(iii) if such new Subsidiary is a Wholly Owned Subsidiary, cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Secured Parties a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement
with respect to such new Subsidiary, subject to the Liens permitted by the
Guarantee and Collateral Agreement, including, without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Class II Restricted
Subsidiary created or acquired after the Effective Date by the Parent, Holdings,
the Borrower or any Subsidiary Guarantor (which, for purposes of this paragraph
(d), shall include any Unrestricted Subsidiary that becomes a Class II
Restricted Subsidiary), promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority (subject to the Liens permitted by the Guarantee and
Collateral Agreement) security interest in the Capital Stock of such new
Subsidiary that is owned by the Parent, Holdings, the Borrower or any Subsidiary
Guarantor (other than any such Capital Stock subject to a Lien expressly
permitted by Section 7.3(m)) (provided that in no event shall more than 65% of
the total outstanding Capital Stock of any such new Class II Restricted
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the Parent, Holdings, the Borrower or such Subsidiary Guarantor, as the case may
be, and take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Lien of the Administrative Agent
thereon, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
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6.10 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take such actions, as the Administrative Agent
may reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other Property or assets
hereafter acquired by the Parent, Holdings, the Borrower or any Subsidiary
Guarantor which may be deemed to be part of the Collateral) pursuant hereto or
thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
6.11 Designation of Restricted and Unrestricted
Subsidiaries. (a) The board of directors of the Borrower may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that no Default
or Event of Default shall have occurred and be continuing immediately prior to
or after giving effect to such designation.
(b) The board of directors of the Borrower may designate
any Class II Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation complies with paragraph (a) of the definition of the term
"Unrestricted Subsidiary" in Section 1.1.
(c) If, at any time, any Unrestricted Subsidiary fails to
comply with the definition of "Unrestricted Subsidiary" or is redesignated by
the board of directors of the Borrower as a Restricted Subsidiary (i) it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement
and shall be a Restricted Subsidiary, (ii) any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Borrower as of
such date and (iii) any Investments in such Subsidiary shall be deemed to be
Investments in a Restricted Subsidiary of the Borrower as of such date.
(d) If, after giving effect to the Brazilco Acquisition,
the Borrower would own more than 95% of the shares of stock or other ownership
interests of Brazilco having ordinary voting power, concurrently with the
consummation of the Brazilco Acquisition, the board of directors of the Borrower
shall designate Brazilco to be a Class II Restricted Subsidiary and shall take
or cause to be taken all actions necessary to comply with the provisions of
Section 6.9 and take or cause to be taken such other actions required under the
Loan Documents with respect to Brazilco.
6.12 Maintenance of Separate Existence. With respect to
each Unrestricted Subsidiary and Class II Restricted Subsidiary, cause such
Subsidiary to do all things necessary to continue to be readily distinguishable
from the Parent, Holdings, the Borrower and the Class I Restricted Subsidiaries
and maintain its existence separate and apart from that of the Parent, Holdings,
the Borrower and the Class I Restricted Subsidiaries including, without
limitation:
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(a) practicing and adhering to organizational
formalities, such as maintaining appropriate books and records;
(b) observing all organizational formalities in
connection with all dealings between itself and the Parent, Holdings,
the Borrower and the Class I Restricted Subsidiaries;
(c) observing all procedures required by its
organizational documents and the laws of the jurisdiction of its
organization;
(d) acting solely in its name and through its duly
authorized officers or agents in the conduct of its businesses;
(e) maintaining its deposit and other bank accounts and
all of its assets separate from those of any other Person;
(f) maintaining its financial records separate and apart
from those of any other Person;
(g) not suggesting in any way, within its financial
statements, that its assets are available to pay the claims of
creditors of the Parent, Holdings, the Borrower or any Class I
Restricted Subsidiary;
(h) ensuring that the responsible officers of the
Unrestricted Subsidiary or Class II Restricted Subsidiary, as the case
may be, duly authorized in accordance with its organizational
documents, duly authorize all of its actions;
(i) ensuring the receipt of proper authorization, when
necessary, in accordance with the terms of the its organizational
documents for its actions;
(j) not (A) having or incurring any Indebtedness to the
Parent, Holdings, the Borrower or any Class I Restricted Subsidiary
(except for any such Indebtedness permitted by Section 7.2(l) or (m));
(B) guaranteeing or otherwise becoming liable for any obligations of
the Parent, Holdings, the Borrower (other than Peso Subfacility Loans
and Third-Party Peso Loans, if any) or any Class I Restricted
Subsidiary; (C) having obligations guaranteed by the Parent, Holdings,
the Borrower or any Class I Restricted Subsidiary except to the extent
of any guarantee permitted by Section 7.8; (D) making any loans or
advances to the Parent, Holdings, the Borrower or any Subsidiary
Guarantor except for any such Indebtedness that is (i) permitted by
Section 7.2, (ii) unsecured, and (iii) subordinated to the Obligations
on terms and conditions reasonably satisfactory to the Administrative
Agent; (E) holding itself out as responsible for debts of the Parent,
Holdings, the Borrower or any Class I Restricted Subsidiary or for
decisions or actions with respect to the affairs of the Parent,
Holdings, the Borrower or any Class I Restricted Subsidiary; (F)
operating or purporting to operate as an integrated, single economic
unit with respect to the Parent, Holdings, the Borrower or any Class I
Restricted Subsidiary; (G) seeking to obtain credit or incur any
obligation to any third party based upon the assets of the Parent,
Holdings, the Borrower or any Class I Restricted Subsidiary (except to
the extent of any guarantee permitted by Section 7.8); and (H) inducing
any such third
71
party to reasonably rely on the creditworthiness of the Parent,
Holdings, the Borrower or any Class I Restricted Subsidiary (except to
the extent of any guarantee permitted by Section 7.8);
(k) causing the Unrestricted Subsidiaries and the Class
II Restricted Subsidiaries to reimburse the Borrower and its other
Subsidiaries for the respective shares (determined on a commercially
reasonable basis) of the Unrestricted Subsidiaries and Class II
Restricted Subsidiaries of the costs of all shared corporate operating
services, leases and expenses, including, without limitation, those
associated with the services of shared executive officers, employees,
consultants and agents, shared computer and other office equipment and
software and shared telephone numbers; and otherwise refraining from
engaging in any transaction with any of the Parent, Holdings, the
Borrower or any Class I Restricted Subsidiary unless such transaction
is consummated (x) on terms and conditions no less favorable to the
Unrestricted Subsidiary or Class II Restricted Subsidiary, as the case
may be, than transactions consummated on an arms-length basis with
unaffiliated Persons and (y) only with the proper approval and
authorization in accordance with such Unrestricted Subsidiary's or
Class II Restricted Subsidiary's organizational documents, as
applicable;
(l) refraining from filing or otherwise initiating or
supporting the filing of a motion in any bankruptcy or other insolvency
proceeding involving the Parent, Holdings, the Borrower or any Class I
Restricted Subsidiary to substantively consolidate the Parent,
Holdings, the Borrower or any Class I Restricted Subsidiary with such
Unrestricted Subsidiary or Class II Restricted Subsidiary;
(m) remaining Solvent;
(n) conducting all of its business (whether written or
oral) solely in its own name (other than using servicemarks,
trademarks, slogans or similar Intellectual Property which are in
common with those used by the Borrower and its Restricted Subsidiaries)
so as not to mislead others as to the identity of each of the
Unrestricted Subsidiary, Class II Restricted Subsidiary, the Parent,
Holdings, the Borrower and any Class I Restricted Subsidiary; and
(o) maintaining a record with respect to any material
asset purchased from the Parent, Holdings, the Borrower or any Class I
Restricted Subsidiary, including bills of sale (or any similar
instrument of assignment) and, if appropriate, filings under the
Uniform Commercial Code.
6.13 Maintenance of Fee Owned Properties. Cause the
aggregate value of all fee-owned real property of the Borrower and the Class I
Restricted Subsidiaries subject to a Mortgage to be at least $200,000,000 at all
times, such value to be determined in accordance with Schedule 6.9 and
demonstrated to the reasonable satisfaction of the Administrative Agent.
6.14 Post-Effective Date Mortgaged Properties. Within 60
days after the Effective Date, execute and deliver to the Administrative Agent
with respect to each Post-Effective Date Mortgaged Property a Mortgage and each
of the other certificates and documents
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referred to in Sections 5.1(f), 5.1(m), 5.1(n), 5.1(u) and, if applicable,
5.1(v), in each case, in form and substance reasonably satisfactory to the
Administrative Agent. Notwithstanding the foregoing, the Administrative Agent
may, in its sole discretion, extend the date for the foregoing deliveries for a
period of up to an additional 30 days.
Section 7. NEGATIVE COVENANTS
The Parent, Holdings and the Borrower hereby jointly and
severally agree that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or
any Agent hereunder, each of the Parent, Holdings and the Borrower shall not,
and shall not permit any of its Class I Restricted Subsidiaries (and, (i) with
respect to Sections 7.2, 7.3, 7.13(i), 7.14(a), 7.15, 7.17 and 7.19, Class II
Restricted Subsidiaries and (ii) with respect to Sections 7.2 and 7.19,
Unrestricted Subsidiaries) to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Adjusted Interest Coverage Ratio. Permit
the Consolidated Adjusted Interest Coverage Ratio for any period of
four consecutive fiscal quarters to be less than 1.50 to 1.00.
(b) Consolidated Senior Leverage Ratio. Permit the
Consolidated Senior Leverage Ratio for any period of four consecutive
fiscal quarters ending with any fiscal quarter ending during any Fiscal
Year set forth below to exceed the ratio set forth below opposite such
Fiscal Year:
Consolidated Senior
Fiscal Year Leverage Ratio
----------- --------------
2004 2.25 to 1.00
2005 2.25 to 1.00
2006 2.00 to 1.00
2007 1.85 to 1.00
2008 1.75 to 1.00
2009 1.50 to 1.00
2010 1.50 to 1.00
2011 1.50 to 1.00
(c) Consolidated Adjusted Leverage Ratio. Permit the
Consolidated Adjusted Leverage Ratio for any period of four consecutive
fiscal quarters ending with any fiscal quarter ending during any Fiscal
Year set forth below to exceed the ratio set forth opposite such Fiscal
Year:
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Consolidated Adjusted
Fiscal Year Leverage Ratio
----------- --------------
2004 6.00 to 1.00
2005 6.00 to 1.00
2006 5.85 to 1.00
2007 5.75 to 1.00
2008 5.50 to 1.00
2009 5.50 to 1.00
2010 5.50 to 1.00
2011 5.50 to 1.00
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to Holdings, the Parent
or any Subsidiary, and Indebtedness of any Guarantor to the Borrower or
any other Guarantor;
(c) (i) Indebtedness (including, without limitation,
Capital Lease Obligations, but excluding EITF 97 - 10 Capital Lease
Obligations) of the Borrower and the Class I Restricted Subsidiaries
that is unsecured or is secured by Liens permitted by Section 7.3(g) in
an aggregate principal amount not to exceed $5,000,000 at any one time
outstanding, (ii) EITF 97 - 10 Capital Lease Obligations of the
Borrower and the Restricted Subsidiaries in an aggregate amount not to
exceed $50,000,000 at any one time outstanding and (iii) Theatre
Capital Lease Obligations of the Borrower and the Restricted
Subsidiaries in an aggregate amount not to exceed $50,000,000 at any
one time outstanding;
(d) Indebtedness of the Borrower and the Class I
Restricted Subsidiaries outstanding on the date hereof and listed on
Schedule 7.2(d) (other than the Senior Subordinated Notes) and any
refinancings, refundings, renewals or extensions thereof (without any
increase in the principal amount thereof (other than any increase not
exceeding the amount of all accrued and unpaid interest on the
Indebtedness being refinanced, and any fees, premium, if any, and
financing costs relating to such refinancing) or any shortening of the
maturity of any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of
the Borrower or any Subsidiary Guarantor;
(f) Indebtedness of the Borrower and the Guarantors in
respect of the Borrower's 9% Senior Subordinated Notes due 2013,
including any refinancing thereof (including any Change of Control
Debt), provided that, (w) the aggregate principal amount of such
Indebtedness shall not exceed $360,000,000 plus the amount of any fees,
premiums or penalties paid in connection with such refinancing, (x) no
cash principal payment is due under such refinancing prior to December
31, 2011 (excluding any
74
Change of Control Debt), (y) the documents under which the Senior
Subordinated Notes are refinanced shall have covenants taken as a whole
not materially more restrictive than those applicable to the
Indebtedness refinanced thereby (excluding any Change of Control Debt)
and (z) the obligations of the Borrower and the Guarantors in respect
of such refinancing Indebtedness (excluding any Change of Control Debt)
are subordinated in right of payment to the Obligations to at least the
same extent in all material respects as the obligations of the Borrower
in respect of the Senior Subordinated Notes as in effect on the
Effective Date are subordinated to the Obligations;
(g) Indebtedness of the Borrower and the Subsidiary
Guarantors in respect of the 8-1/2% Senior Subordinated Notes;
(h) Indebtedness of the Parent in respect of:
(i) the Senior Discount Notes, including any
refinancing thereof, provided that, (x) the aggregate amount
of such Indebtedness shall not exceed an amount equal to the
Accreted Value (as defined in the Senior Discount Note
Indenture) of the Senior Discount Notes on the date of such
refinancing plus the amount of any fees, premiums or penalties
paid in connection with such refinancing, (y) no cash
principal payment is due under such refinancing prior to
December 31, 2011 and (z) the documents under which the Senior
Discount Notes are refinanced shall have covenants taken as a
whole not materially more restrictive than those applicable to
the Indebtedness refinanced thereby; and
(ii) any other unsecured Indebtedness of the
Parent so long as (w) immediately prior to and after giving
effect to the incurrence of such Indebtedness, the Parent,
Holdings and the Borrower are in compliance with Section
7.1(a), (x) no cash interest is payable with respect to such
Indebtedness prior to June 30, 2009, (y) none of Holdings, the
Borrower or any of its Restricted Subsidiaries has any
Guarantee Obligation with respect to such Indebtedness and (z)
the Net Cash Proceeds of such Indebtedness are applied toward
prepayment of the Loans pursuant to Section 2.10(b);
(i) (i) (A) Non-Recourse Debt of the Borrower or any
Class I Restricted Subsidiary secured by fee-owned real property of the
Borrower or such Class I Restricted Subsidiary that does not constitute
Mortgaged Property and (B) upon transfer of any fee-owned property of
the type described in the foregoing clause (A) to an Unrestricted
Subsidiary, Non-Recourse Debt of such Unrestricted Subsidiary secured
by such property, (ii) Indebtedness in respect of Sale and Leaseback
Transactions permitted by clause (a) of the proviso to Section 7.11 and
(iii) Indebtedness in respect of Sale and Leaseback Transactions
permitted by clause (b) of the proviso to Section 7.11; provided that
(x) the sum of the principal amount of such Non-Recourse Debt pursuant
to clause (i)(A) of this paragraph, plus the aggregate value (in sale
price) of such Sale and Leaseback Transactions pursuant to clause (ii)
of this paragraph shall not exceed an amount equal to $125,000,000
while this Agreement is outstanding and (y) the Net Cash Proceeds of
such Non-Recourse Debt and Sale and Leaseback Transactions are applied
toward prepayment of the Loans to the extent required by Section 2.10;
75
(j) Indebtedness of any Unrestricted Subsidiary or Class
II Restricted Subsidiary consisting entirely of Non-Recourse Debt;
provided that, if any such Indebtedness ceases to be Non-Recourse Debt
of such Unrestricted Subsidiary or Class II Restricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Class I Restricted Subsidiary of the Borrower that was not permitted by
this Section 7.2(j);
(k) Guarantee Obligations of Unrestricted Subsidiaries in
respect of the obligations of other Unrestricted Subsidiaries and Class
II Restricted Subsidiaries not otherwise prohibited hereunder, and
Guarantee Obligations of Class II Restricted Subsidiaries of
obligations of other Class II Restricted Subsidiaries not otherwise
prohibited hereunder;
(l) intercompany Indebtedness of any Class II Restricted
Subsidiary or Unrestricted Subsidiary to the Borrower or any Class I
Restricted Subsidiary outstanding on the date hereof and listed on
Schedule 7.2(l) (including any accrued but unpaid interest thereon
accruing subsequent to the Effective Date) and any refinancings,
refundings, renewals or extensions thereof (without any increase in the
principal amount thereof other than the amount of any accrued interest)
or shortening of the maturity of any principal amount thereof (which
shall not prohibit any prepayments made with cash), which Indebtedness
is evidenced by a promissory note in form and substance reasonably
satisfactory to the Administrative Agent which has been delivered to
the Administrative Agent;
(m) other Indebtedness of an Unrestricted Subsidiary or
Class II Restricted Subsidiary to the Borrower or any Class I
Restricted Subsidiary permitted by Section 7.8(h);
(n) Indebtedness of any Person which is acquired by the
Borrower or any of the Class I Restricted Subsidiaries and becomes a
Class I Restricted Subsidiary or is merged with or into the Borrower or
any of its Class I Restricted Subsidiaries after the Effective Date,
provided that (i) such Indebtedness was in existence on the date such
Person became a Class I Restricted Subsidiary or merged with or into
the Borrower or any of its Class I Restricted Subsidiaries, as the case
may be, (ii) such Indebtedness was not created in contemplation of such
Person becoming a Class I Restricted Subsidiary or merging with or into
the Borrower or any of its Class I Restricted Subsidiaries, as the case
may be, (iii) immediately after giving effect to the acquisition of
such Person by the Borrower or any of its Class I Restricted
Subsidiaries, as the case may be, no Default or Event of Default shall
have occurred and be continuing and (iv) after giving pro forma effect
to such acquisition, the Consolidated Adjusted Interest Coverage Ratio
shall be increased and the Consolidated Adjusted Leverage Ratio shall
be decreased;
(o) Indebtedness of the Borrower or any Class II
Restricted Subsidiary under the Peso Subfacility and/or under a loan
facility denominated in Pesos providing for loans made under
documentation other than the Loan Documents ("Third-Party Peso Loans")
in an aggregate maximum principal amount as of any Peso Borrowing Date
and after giving effect to the borrowings and any repayments to be made
on such date not to
76
exceed the Peso equivalent (calculated as of the Peso Borrowing
Calculation Date) of $25,000,000 and guarantees thereof by the Parent,
Holdings, the Borrower or any Restricted Subsidiary; provided, that the
aggregate amount available under the Peso Subfacility, Third-Party Peso
Loans and the Revolving Credit Commitments shall not exceed the Total
Revolving Credit Commitments; and
(p) the unsecured letter of credit described on Annex B
attached hereto.
7.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes, fees, assessments and other
governmental charges not yet delinquent or which remain payable without
penalty or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Restricted Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, landlords' (whether
statutory or otherwise), mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or remain payable without
penalty or that are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions, minor defects
and irregularities in title and other similar encumbrances incurred in
the ordinary course of business that, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the Property subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of its
Restricted Subsidiaries in a way that deprives the Borrower or its
Restricted Subsidiaries of the substantial value of the use of any
Property that is material to the business of the Borrower and its
Restricted Subsidiaries;
(f) Liens in existence on the date hereof listed on
Schedule 7.3(f), securing Indebtedness permitted by Section 7.2(d), and
any replacements of such Liens in connection with any refinancing of
such Indebtedness permitted by such Section, provided that no such Lien
is spread to cover any additional Property after the Effective Date
(other than additions, accessions and improvements thereto and proceeds
thereof) and that the amount of Indebtedness (plus any fees, premium,
if any, and financing costs) secured thereby is not increased;
(g) Liens securing Indebtedness incurred pursuant to
Section 7.2(c) to finance the acquisition, construction or repair of
fixed or capital assets or to refinance any such
77
Indebtedness, provided that (i) such Liens shall be created
substantially contemporaneously with the acquisition of such fixed or
capital assets, (ii) such Liens do not at any time encumber any
Property other than the Property financed by such Indebtedness (other
than any improvements, proceeds, additions or accessions with respect
thereto) and (iii) the amount of Indebtedness secured thereby is not
increased (other than to the extent of accrued interest, fees, premium,
if any and financing costs);
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in the ordinary
course of its business and covering only the assets so leased;
(j) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; provided that (i)
such deposit account is not a dedicated cash collateral account and is
not subject to restrictions against access by the Borrower in excess of
those set forth by regulations promulgated by the Federal Reserve
Board, and (ii) such deposit account is not intended by the Borrower or
any of its Subsidiaries to provide collateral to the depository
institution;
(k) Liens on fee-owned property of the Borrower and Class
I Restricted Subsidiaries not subject to a Mortgage securing
Non-Recourse Debt or Sale and Leaseback Transactions permitted by
Section 7.11;
(l) Liens on assets of any Class II Restricted Subsidiary
securing Non-Recourse Debt of such Class II Restricted Subsidiary
permitted by Section 7.2;
(m) Liens securing Indebtedness permitted by Section
7.2(n) on property of a Person or on an asset existing at the time such
Person is merged with or into or consolidated with or is acquired by
the Borrower or any Class I Restricted Subsidiary of the Borrower or
such asset is so acquired; provided that such Liens were not incurred
in connection with or in contemplation of such transaction and do not
extend to any assets other than those of the Person merged into or
consolidated with or acquired by, or the asset so acquired by, the
Borrower or such Class I Restricted Subsidiary, as applicable, and
accessions, additions and improvements thereto and proceeds thereof;
(n) Liens on assets of a Subsidiary of the Borrower in
favor of the Borrower or any Guarantor;
(o) Liens in connection with the defeasance of any series
of Senior Subordinated Notes, Senior Discount Notes or Change of
Control Debt covering the proceeds of Indebtedness which constitutes
refinancing Indebtedness of such Senior Subordinated Notes, Senior
Discount Notes or Change of Control Debt permitted by Section 7.2(f),
(g) or (h) and other funds intended for such purpose, provided that,
such Lien covers proceeds in an aggregate amount necessary solely to
defease the principal,
78
interest and premium, if any, due in connection with the defeasance of
such Senior Subordinated Notes, Senior Discount Notes or Change of
Control Debt;
(p) Liens of the trustee under (x) Section 7.7 of the
Senior Subordinated Note Indentures as in effect on the Effective Date
and Section 7.7 of the Senior Discount Notes Indenture (and similar
provisions if the Senior Subordinated Note Indentures and the Senior
Discount Notes Indenture are amended in accordance with Section 7.9 or
refinanced pursuant to Section 7.2(f) or (h)) or (y) any similar
provision in any Change of Control Debt Agreement with respect to any
Change of Control Debt issued after the Effective Date, in each case,
on money or property held or collected by the trustee thereunder;
(q) Liens on assets of any joint venture or partnership
pursuant to the organizational documents of such joint venture or
partnership, provided that, such Liens cover only the assets of such
joint venture or partnership, as the case may be;
(r) Liens arising from judgments, decrees or attachments
in circumstances not constituting an Event of Default under Section
8(h);
(s) Liens in the nature of a right of first refusal,
redemption rights or other restrictions on transfer existing as of the
Effective Date in respect of the shares or partnership interest of
Fandango, Inc., Laredo Theatre, Ltd. or Greeley, Ltd. held by the
Borrower;
(t) the rights of film distributors under film licensing
contracts entered into by the Borrower or any of its Subsidiaries in
the ordinary course of business on a basis customary in the movie
exhibition industry; and
(u) Liens on the stock of and assets of Class II
Restricted Subsidiaries to secure the Peso Subfacility or the
Third-Party Peso Loans.
7.4 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property, except that:
(a) the Parent, Holdings or any Restricted Subsidiary of
the Borrower may be merged, consolidated or amalgamated with or into
the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Guarantor (provided that (i)
a Guarantor shall be the continuing or surviving corporation or (ii)
simultaneously with such transaction, the continuing or surviving
corporation shall become a Guarantor and the Borrower shall comply with
Section 6.9 in connection therewith);
(b) the Parent, Holdings or any Class I Restricted
Subsidiary of the Borrower may Dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to (i) the Borrower or any
Guarantor or (ii) any other Person in connection with the Disposition
of its entire Investment in such Person permitted by Section 7.5;
79
(c) any Person may enter into a merger, consolidation or
amalgamation with any Class I Restricted Subsidiary as a means of
implementing a Permitted Acquisition permitted by Section 7.8 (provided
that such Class I Restricted Subsidiary shall be the continuing or
surviving corporation);
(d) any Person may Dispose of all or substantially all of
its Property pursuant to a transaction permitted by Section 7.5;
(e) the Parent may consummate the Recap Merger; and
(f) the Specified Reorganization may be consummated.
7.5 Limitation on Disposition of Property. Dispose of any
of its Property, whether now owned or hereafter acquired, or, in the case of any
Class I Restricted Subsidiary, issue or sell any shares of such Class I
Restricted Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete, surplus or worn out
property in the ordinary course of business, including the sale of
adjacent parcels of real property not necessary in the business of the
Borrower or any Class I Restricted Subsidiary;
(b) the sale of inventory in the ordinary course of
business;
(c) Dispositions permitted by Section 7.4(a), (b)(i),
(c), (e) and (f) and Sections 7.6 and 7.8;
(d) the sale or issuance of any Subsidiary's Capital
Stock to the Borrower or any Subsidiary Guarantor;
(e) any Recovery Event;
(f) an exchange or "swap" of fixed, tangible assets of
the Borrower or any of its Class I Restricted Subsidiaries for the
assets of a Person other than the Borrower and its Class I Restricted
Subsidiaries; provided that, (i) the assets received by the Borrower or
such Class I Restricted Subsidiary will be used or useful in a similar
line of business that the Borrower and its Class I Restricted
Subsidiaries are engaged in on the date of this Agreement or that are
reasonably related thereto, (ii) the Borrower or such Class I
Restricted Subsidiary receives reasonably equivalent value for such
assets, such equivalent value to be demonstrated to the reasonable
satisfaction of the Administrative Agent (or, in the case of an
exchange or "swap" with a non-Affiliate of any Loan Party, as
determined by the board of directors of the Borrower or such Class I
Restricted Subsidiary, as the case may be) and (iii) if the asset which
is the subject of such exchange or "swap" constituted Collateral
hereunder, the Borrower or such Class I Restricted Subsidiary shall
take such action necessary to create and perfect the security interest
of the Administrative Agent for the benefit of the Secured Parties in
the assets received by the Borrower or such Class I Subsidiary in such
exchange or "swap" pursuant to Section 6.9, provided further that, the
fair market value of all such assets exchanged or "swapped" shall not
exceed $150,000,000 during the term of this Agreement;
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(g) the issuance and sale of directors' qualifying shares
and shares required by applicable law to be held by a Person other than
the Borrower or its Class I Restricted Subsidiaries;
(h) the issuance and sale of minority interests in joint
ventures, partnerships and other entities to third parties to the
extent that the proceeds of such sale are reinvested in the related
joint venture, partnership or other entity;
(i) any sale and leaseback transaction permitted by
Section 7.11;
(j) a sale or other Disposition of the type described in
EITF 97-10 in connection with a sale and leaseback transaction
otherwise permitted hereby;
(k) the Disposition of any real property subject to a
sale contract on the Effective Date as described on Schedule 7.5(k);
(l) the issuance and sale of Capital Stock of Cinemark
Mexico (USA), Inc. in connection with (i) the exercise of options for
up to 1% (on a fully-diluted basis) of the Capital Stock of Cinemark
Mexico (USA), Inc. and (ii) the exercise of conversion rights existing
on the Effective Date;
(m) the Disposition of other assets having a fair market
value not to exceed $250,000,000 during the term of this Agreement; and
(n) the Disposition of cash and Cash Equivalents
permitted under this Agreement.
7.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, retirement or
other acquisition for value of, any Capital Stock of the Parent, Holdings, the
Borrower or any Class I Restricted Subsidiary, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Parent,
Holdings, the Borrower or any Class I Restricted Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating the
Parent, Holdings, the Borrower or any Class I Restricted Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of any such Capital Stock (collectively, "Restricted Payments"), except
that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary that owns the common stock (or equivalent
ownership interests) of the Subsidiary making such Restricted Payment;
(b) the Parent may make Restricted Payments in the form
of common stock of the Parent or preferred stock of the Parent,
provided that, in the case of preferred stock, such preferred stock is
not redeemable at the option of the holder thereof and not mandatorily
redeemable in any circumstance until after March 31, 2011;
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(c) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may make Restricted Payments
to Holdings, and Holdings make Restricted Payments to the Parent, to
permit the Parent to purchase, and the Parent may purchase, the
Parent's common stock or common stock options from present or former
officers or employees of the Parent, the Borrower or any Subsidiary
upon the death, disability or termination of employment of such officer
or employee, provided, that the aggregate amount of payments under this
clause shall not exceed $3,000,000 in any twelve month period (with
unused amounts in any twelve month period being carried over to
succeeding twelve months periods subject to a maximum carry-over amount
of $6,000,000);
(d) the Borrower may make Restricted Payments to
Holdings, and Holdings may make Restricted Payments to the Parent, to
permit Holdings and the Parent to pay (i) any taxes which are due and
payable by the Parent, Holdings and the Borrower and their Subsidiaries
as part of a consolidated group, (ii) customary fees to members of its
board of directors, (iii) ordinary course corporate operating expenses,
(iv) principal and interest on Indebtedness permitted under Section
7.2, provided that, no Restricted Payments may be made to pay cash
interest on any Indebtedness permitted under Section 7.2(h) prior to
June 30, 2009 and (v) the management advisory fees and expenses
permitted under Section 7.10;
(e) the Borrower or any Class I Restricted Subsidiary may
make Restricted Payments to any other Person to repurchase minority
interests in any joint venture, partnership or other entity which is a
Subsidiary of the Borrower;
(f) the Parent, Holdings, the Borrower or any Class I
Restricted Subsidiary may purchase, redeem, retire or otherwise acquire
its Capital Stock with the proceeds of a substantially contemporaneous
issuance of new shares of its common stock or preferred stock that is
not redeemable at the option of the holder thereof and not mandatorily
redeemable in any circumstance until after March 31, 2011;
(g) the Borrower and its Subsidiaries may, upon the sale
of any Subsidiary of the Borrower or any assets of such Subsidiary,
make distribution of the proceeds of such sale to any holders of
minority equity interests in such Subsidiary as required by the
partnership agreement, joint venture agreement or other analogous
agreement of such Subsidiary, as the case may be, provided that, such
sale is permitted under Section 7.5;
(h) any Subsidiary of the Borrower that is not 100%
owned, directly or indirectly, by the Borrower may make distributions
to its equity holders as required by its respective partnership
agreement, joint venture agreement or other analogous agreement of such
Subsidiary, provided that, the aggregate amounts distributed pursuant
to this clause (h) to Persons other than the Borrower and its
Subsidiaries shall not exceed $10,000,000 in any Fiscal Year; and
(i) the Parent, Holdings, the Borrower or any Class I
Restricted Subsidiary may make Restricted Payments in connection with
the consummation of the Transaction or as contemplated by the
Recapitalization Documentation.
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7.7 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:
(i) for the Fiscal Year 2004, $75,000,000; and
(ii) thereafter, 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;
and
(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 Remaining 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, no Default or Event of Default shall have occurred and be
continuing.
7.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guarantee or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence
of Indebtedness permitted by Sections 7.2(b), (e) and (l) (and any
Investment consisting of equity interests arising upon the conversion
to equity of any Indebtedness permitted by Section 7.2(l)) and any
guarantee permitted by Section 7.2(a), (f), (g) and (o);
83
(d) Investments in assets useful in the Borrower's or a
Class I Restricted Subsidiary's business (other than inventory) made by
the Borrower or any of its Subsidiaries with the proceeds of any
Reinvestment Deferred Amount;
(e) Investments (other than those relating to the
incurrence of Indebtedness permitted by Section 7.8(c)) by the Parent,
Holdings, the Borrower or any of its Restricted Subsidiaries in the
Borrower or any Person that, prior to such Investment, is a Subsidiary
Guarantor;
(f) equity interests acquired by the Borrower or any
Restricted Subsidiary in a Person engaged in the indoor motion picture
exhibition business if (i) such Person's theaters are managed by the
Borrower or such Restricted Subsidiary, (ii) such equity interest is
acquired solely in exchange for services rendered in connection with
the management of such Person's theaters, (iii) the board of directors
of the Borrower determines that such acquisition is in the best
interests of the Borrower and (iv) promptly after the acquisition of
such equity interests, such equity interests are pledged to the
Administrative Agent for the benefit of the Secured Parties to the
extent required by Section 6.9;
(g) loans and advances to employees of the Parent,
Holdings, the Borrower or any of the Class I Restricted Subsidiaries in
the ordinary course of business (including for travel and entertainment
expenses) in an aggregate amount not to exceed $1,000,000 at any one
time outstanding;
(h) Investments by the Borrower or any of its Class I
Restricted Subsidiaries in Unrestricted Subsidiaries, Class II
Restricted Subsidiaries, partnerships, joint ventures and other
entities that are not Guarantors in an amount not to exceed the
Remaining Applicable Amount at the time of, and immediately prior to
the making of, any such Investment; provided that, (i) any such amounts
invested in any entity that is not a Subsidiary or the business of
which is outside the Borrower's primary line of business shall not
exceed $5,000,000 in any Fiscal Year, (ii) the aggregate amount so
invested in Unrestricted Subsidiaries and partnerships, joint ventures
and other entities that are not Restricted Subsidiaries shall not
exceed, while this Agreement is in effect, the Investment Limit and
(iii) immediately prior to and after giving effect to such Investment,
no Default or Event of Default shall have occurred and be continuing;
and provided further that (x) transfers by the Borrower or the Class I
Restricted Subsidiaries to any Unrestricted Subsidiary of fee-owned
property in connection with the incurrence by such Unrestricted
Subsidiary of Non-Recourse Debt secured by such fee-owned property, as
contemplated by Section 7.2(i)(i)(B) and (y) Investments in Brazilco by
any Unrestricted Subsidiary that is subsequently designated as a Class
I Restricted Subsidiary, in each case shall not constitute Investments
for purposes of determining the Remaining Applicable Amount or the
Investment Limit.
(i) Investments by the Borrower or any of its Class I
Restricted Subsidiaries in Permitted Acquisitions for consideration
(whether in the form of cash, property, common stock of the Parent or
other consideration) in an amount not to exceed the Remaining
Applicable Amount at the time of, and immediately prior to the making
of,
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any such Investment, provided that, (A) to the extent such Investment
results in the creation or acquisition of a Subsidiary of the Borrower
(other than an Excluded Foreign Subsidiary), such Subsidiary must be a
Class I Restricted Subsidiary and (B) immediately prior to and after
giving effect to such Permitted Acquisition, no Default or Event of
Default shall have occurred and be continuing;
(j) Investments permitted by Sections 7.5(f), 7.5(h),
7.6, 7.7 and 7.17;
(k) the Brazilco Acquisition; and
(l) Investments in Subsidiaries of the Borrower resulting
from purchases of minority interests in such Subsidiaries in exchange
for the Parent's common stock.
7.9 Limitation on Optional Payments and Modifications of
Debt Instruments, etc. (a) Except as permitted by Section 7.2(f), (g) or (h),
make or offer to make any optional or voluntary payment, prepayment, repurchase
or redemption of, or otherwise voluntarily or optionally defease, the Senior
Subordinated Notes, any Change of Control Debt or the Senior Discount Notes
(except that the Borrower may (i) repurchase, redeem or defease not less than
$94,000,000 of the 8-1/2% Senior Subordinated Notes with the proceeds of the
Term Loans and up to $11,000,000 of the 8-1/2% Senior Subordinated Notes with
cash or the proceeds of the Revolving Credit Loans and (ii) redeem its 9% Senior
Subordinated Notes due 2013 (A) with the proceeds of any Change of Control Debt
and (B) with the proceeds of Revolving Credit Loans within 65 days after the
Effective Date, provided that, with respect to this clause (ii)(B), (x) the
Borrower has made the Change of Control Offer, (y) the aggregate amount payable
with respect to principal, premium and fees with respect to the 9% Senior
Subordinated Notes due 2013 tendered by the holders thereof shall not exceed
$25,000,000 and (z) no portion of the Change of Control Offer shall be financed
with Change of Control Debt), or segregate funds (except in connection with a
repurchase, redemption or defeasance permitted by the preceding parenthetical)
for any such payment, prepayment, repurchase, redemption or defeasance, or enter
into any derivative or other transaction with any Derivatives Counterparty
obligating the Parent, Holdings, the Borrower or any Class I Restricted
Subsidiary to make payments to such Derivatives Counterparty as a result of any
change in market value of the Senior Subordinated Notes, (b) amend, modify or
otherwise change, or consent or agree to any amendment, modification, waiver or
other change to, any of the terms of the Senior Subordinated Notes, any Change
of Control Debt Agreement or the Senior Discount Notes (other than any such
amendment, modification, waiver or other change which (A) would extend the
maturity or reduce the amount of any payment of principal thereof, reduce the
rate or extend the date for payment of interest thereon or relax any covenant or
other restriction applicable to the Parent, Holdings, the Borrower or any of its
Class I Restricted Subsidiaries or add any Guarantor as a guarantor of the
Senior Subordinated Notes or Change of Control Debt, provided that, in the case
of the Senior Subordinated Notes, such guarantee is subordinated in right of
payment to the Guarantor's guarantee of the Obligations to at least the same
extent in all material respects as the obligations of the Borrower in respect of
the Senior Subordinated Notes are subordinated to the Obligations or (B) does
not require the consent of any holder of the Senior Subordinated Notes, Change
of Control Debt or Senior Discount Notes, as applicable, to (i) cure any
ambiguity, defect or inconsistency or (ii) comply with the requirements of the
SEC in order to effect or maintain the qualification of the Senior Subordinated
Note Indenture, Change of Control Debt
85
Agreement or the Senior Discount Note Indenture, as the case may be, under the
TIA (as defined in the applicable agreement)), (c) designate any Indebtedness
(other than the Obligations) as "Designated Senior Indebtedness" for the
purposes of any Senior Subordinated Note Indenture or (d) amend its certificate
of incorporation in any manner reasonably determined by the Administrative Agent
to be material and adverse to the Lenders.
7.10 Limitation on Transactions with Affiliates. Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the Parent,
Holdings, the Borrower or any Subsidiary Guarantor) unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of the Parent, Holdings, the Borrower or such Subsidiary, as the case
may be, and (c) upon fair and reasonable terms no less favorable to the Parent,
Holdings, the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person that is not an
Affiliate, except for:
(i) so long as no Default or Event of Default shall have
occurred and be continuing, the payment of customary annual fees and
related expenses to the Sponsor and its Affiliates; provided that such
fees shall not, in the aggregate, exceed $1,000,000 (plus out of pocket
expenses) in any twelve-month period commencing after the date of this
Agreement;
(ii) so long as no Default or Event of Default shall have
occurred and be continuing, the payment of customary transaction,
management, consulting and advisory fees and related expenses to the
Sponsor and its Affiliates made pursuant to financial advisory,
financing, underwriting or replacement agreements or in respect of
other investment banking entities, including, without limitation, in
connection with acquisitions or divestures, in each case, which
payments are (a) reasonably related to the services performed and (b)
approved by a majority of the members of the board of directors of the
Borrower not affiliated with the Sponsor;
(iii) the Transaction; and
(iv) such other transactions with transaction values not
exceeding $5,000,000 in the aggregate for all such transactions
consummated during the term of this Agreement.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Parent, Holdings,
the Borrower or any Class I Restricted Subsidiary of real or personal property
which has been or is to be sold or transferred by the Parent, Holdings, the
Borrower or such Class I Restricted Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Parent, Holdings, the
Borrower or such Class I Restricted Subsidiary; provided, that, so long as the
Net Cash Proceeds of any of the following transactions are applied toward
prepayment of the Loans to the extent required by Section 2.10, (a) the Borrower
or any Class I Restricted Subsidiary may consummate Sale and Leaseback
Transactions with respect to any fee-owned property set forth on Schedule 7.11
that does not
86
constitute Mortgaged Property or property acquired in Section 7.5(f) swaps in
exchange for such property set forth on such Schedule and (b) the Borrower or
any Class I Restricted Subsidiary may consummate Sale and Leaseback Transactions
with respect to any real property acquired by the Borrower or any Class I
Restricted Subsidiary after the Effective Date.
7.12 Limitation on Changes in Fiscal Periods. Permit the
Fiscal Year to end on a day other than December 31 or change the Borrower's
method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of the Parent, Holdings, the Borrower or any of its Class I Restricted
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its Property or revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any Guarantor, its obligations under the
Guarantee and Collateral Agreement, other than:
(a) this Agreement and the other Loan Documents;
(b) the Senior Subordinated Note Indentures and the
Change of Control Debt Agreements;
(c) the Senior Discount Note Indenture;
(d) any agreements governing any purchase money Liens or
Capital Lease Obligations otherwise permitted hereby (in which case,
any prohibition or limitation shall only be effective against the
assets financed thereby);
(e) in connection with any Lien permitted under Section
7.3(b), (f), (g), (i), (k), (m) or (o) or any document or instrument
governing any such Lien, provided that such prohibition or limitation
shall only be effective against the assets subject to such Lien;
(f) pursuant to customary restrictions and conditions
contained in any agreement related to the sale of any property
permitted under Section 7.5, pending the consummation of such sale,
provided that such prohibition or limitation shall only be effective
against the assets to be sold;
(g) leases, licenses and other agreements entered into in
the ordinary course of business (other than for Indebtedness);
(h) provisions in corporate charters, bylaws,
stockholders agreements, partnership agreements, limited liability
company agreements and similar agreements entered into in connection
with Investments permitted by Section 7.8 and negotiated in good faith
and not with the purpose of avoiding the restrictions of this Section;
and
(i) any agreements governing the Peso Subfacility or the
Third-Party Peso Loans otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective in respect of the
Capital Stock and assets of Class II Restricted Subsidiaries).
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7.14 Limitation on Restrictions on Subsidiary
Distributions. Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Class I Restricted Subsidiary
(or, in the case of clause (a) only, any Class II Restricted Subsidiary of the
Borrower) to (a) make Restricted Payments in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
Class I Restricted Subsidiary, (b) make Investments in the Borrower or any other
Class I Restricted Subsidiary or (c) transfer any of its assets to the Borrower
or any other Class I Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) any restrictions with respect to a Restricted
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital Stock
or assets of such Subsidiary and (iii) agreements, instruments and documents of
the types described in clauses (b) through (i) of Section 7.13 and negotiated in
good faith and not with the purpose of avoiding the restrictions of this
Section.
7.15 Limitation on Lines of Business. Enter into any
material business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date of
this Agreement or that are reasonably related thereto.
7.16 Limitation on Activities of the Parent and Holdings.
In the case of the Parent and, unless and until the Specified Reorganization
occurs, Holdings, notwithstanding anything to the contrary in this Agreement or
any other Loan Document:
(a) conduct, transact or otherwise engage in, or commit
to conduct, transact or otherwise engage in, any material business or
operations other than those incidental to
(i) in the case of the Parent, (A) issuances and
sales of its Capital Stock and options, warrants and rights
related thereto, and (B) its ownership of the Capital Stock of
Holdings,
(ii) in the case of Holdings, its ownership of
the Capital Stock of the Borrower,
(iii) the Indebtedness permitted under Section
7.2,
(iv) the ownership of intercompany Indebtedness
permitted under Section 7.2,
(v) the transactions permitted under Section
7.10,
(vi) the Transactions, and
(vii) the rights and obligations hereunder and
under the other Loan Documents;
88
(b) incur, create, assume or suffer to exist any
Indebtedness or other material liabilities or financial obligations,
except
(i) nonconsensual liabilities and obligations
imposed by operation of law,
(ii) pursuant to the Loan Documents to which it
is a party,
(iii) liabilities and obligations with respect to
its Capital Stock (and in the case of the Parent, options,
warrants and rights related thereto),
(iv) Indebtedness permitted under Section 7.2,
(v) taxes,
(vi) customary fees to members of its board of
directors,
(vii) ordinary course corporate operating
expenses,
(viii) liabilities and obligations arising out of
Restricted Payments permitted under Section 7.6,
(ix) the transactions permitted under Section
7.10,
(x) the Transactions, and
(xi) liabilities and obligations arising out of
operations permitted under clause (a) of this Section or
ownership of assets permitted under clause (c) of this
Section; or
(c) own, lease, manage or otherwise operate any
properties or assets (including cash and cash equivalents) other than
(i) in the case of the Parent, the ownership of
shares of Capital Stock of Holdings or, after the occurrence
of the Specified Reorganization, the Borrower,
(ii) in the case of Holdings, the ownership of
shares of Capital Stock of the Borrower,
(iii) the ownership of intercompany Indebtedness
permitted under Section 7.2,
(iv) customary minimum balances of cash and cash
equivalents, and
(v) cash and cash equivalents pending
application to an Indebtedness, liability or obligation
permitted under clause (b) of this Section.
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7.17 Limitation on Hedge Agreements. Enter into
any Hedge Agreement other than Hedge Agreements entered into in the ordinary
course of business (i) to protect against changes in interest rates or to reduce
overall interest costs with respect to Funded Debt of the Parent and its
Subsidiaries to the extent that such Hedge Agreements have an aggregate notional
amount equal to or less than an amount reasonably related to the amount of such
Funded Debt, all such determinations to be made at the time of incurrence of
such Hedge Agreement and (ii) to protect against changes in foreign currency
exchange rates versus the Dollar to the extent that such Hedge Agreements are in
an aggregate notional amount equal to or less than an amount reasonably related
to the exposure of the Borrower and its Restricted Subsidiaries to such foreign
currencies at the time of incurrence of such Hedge Agreements.
7.18 Limitation on New Leases. Enter into any
lease of real estate contemplating an annual rental payment of more than
$500,000, unless (i) the leasehold lender protections required by Section 5.1(v)
are incorporated into such lease or a separate landlord's agreement and (ii)
accompanied by a binding and recordable short form lease or lease memorandum.
7.19 Limitations on Activities of Class II
Restricted Subsidiaries and Unrestricted Subsidiaries. Notwithstanding anything
to the contrary in this Agreement, except to the extent the Parent, Holdings,
the Borrower or a Class I Restricted Subsidiary would be permitted to take such
action under this Agreement: (a) permit any Class II Restricted Subsidiary or
Unrestricted Subsidiary to (i) pay any dividend on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement or other acquisition for value of, any Capital
Stock of the Parent, Holdings, the Borrower or any Class I Restricted
Subsidiary, (ii) make any other payment or distribution in respect of any
Capital Stock of the Parent, Holdings, the Borrower or any Class I Restricted
Subsidiary, (iii) enter into any derivatives or other transaction with a
Derivatives Counterparty obligating such Subsidiary to make payments to such
Derivatives Counterparty as a result of any change in the market value of any
Capital Stock of the Parent, Holdings, the Borrower or any Class I Restricted
Subsidiary or the Senior Subordinated Notes or (iv) make or offer to make any
optional or voluntary payment, prepayment, repurchase or redemption of, or
otherwise voluntarily or optionally defease, the Senior Subordinated Notes, or
segregate funds for any such payment, prepayment, repurchase, redemption or
defeasance or (b) furnish any funds to any other Person for purposes of enabling
it to engage in any transaction prohibited by the foregoing clause (a).
Section 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Loan or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof or
thereof; or
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(b) Any representation or warranty made or deemed made by
any Loan Party herein or in any other Loan Document or that is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement
or any such other Loan Document shall prove to have been inaccurate in
any material respect on or as of the date made or deemed made or
furnished; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Parent, Holdings and the Borrower only),
Section 6.7(a) or Section 7, or in Section 5 of the Guarantee and
Collateral Agreement or (ii) an "Event of Default" under and as defined
in any Mortgage shall have occurred and be continuing; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) The Parent, Holdings, the Borrower or any of its
Restricted Subsidiaries shall (i) default in making any payment of any
principal of any Indebtedness (including, without limitation, any
Guarantee Obligation, but excluding the Loans and Reimbursement
Obligations) on the scheduled or original due date with respect thereto
or, with respect to any Capital Lease Obligation, after giving effect
to any grace period with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or to become
subject to a mandatory offer to purchase by the obligor thereunder or
(in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or
condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default unless, at such
time, one or more defaults, events or conditions of the type described
in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $10,000,000; or
(f) (i) The Parent, Holdings, the Borrower or any of its
Restricted Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or
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the Parent, Holdings, the Borrower or any of its Restricted
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Parent,
Holdings, the Borrower or any of its Restricted Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Parent, Holdings, the Borrower or any of its Restricted
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Parent, Holdings, the Borrower or any of its
Restricted Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the Parent,
Holdings, the Borrower or any of its Restricted Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders shall be likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) One or more final judgments or decrees shall be
entered against the Parent, Holdings, the Borrower or any of its
Restricted Subsidiaries involving for the Parent, Holdings, the
Borrower and its Restricted Subsidiaries taken as a whole a liability
(not paid or fully covered by insurance as to which the relevant
insurance company has not disclaimed coverage) of $10,000,000 or more,
and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
(i) (i) Any of the Security Documents shall cease, for
any reason (other than by reason of the express release thereof
pursuant to Section 10.15), to be in full force and effect, and the
Borrower shall not cure such event within three Business Days after
notice
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thereof; (ii) any Loan Party shall assert that any of the Security
Documents are not in full force and effect; or (iii) any Lien created
by any of the Security Documents shall cease to be enforceable and of
the same effect and priority purported to be created thereby, and the
Borrower shall not cure such event within three Business Days after
notice thereof; or
(j) (i) The guarantee contained in Section 2 of the
Guarantee and Collateral Agreement shall cease, for any reason (other
than by reason of the express release thereof pursuant to Section
10.15), to be in full force and effect, and the Borrower shall not cure
such event within three Business Days after notice thereof; or (ii) or
any Loan Party shall assert that the guarantee contained in Section 2
of the Guarantee and Collateral Agreement is not in full force and
effect; or
(k) Any Change of Control shall occur; or
(l) The Senior Subordinated Notes shall cease, for any
reason, to be validly subordinated to the Obligations, as provided in
any Senior Subordinated Note Indenture (other than in the case of the
defeasance of the Senior Subordinated Notes), or any Loan Party, the
trustee in respect of any series of the Senior Subordinated Notes or
the holders of at least 25% in aggregate principal amount of any series
of the Senior Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default and such Event of Default is continuing, either or
both of the following actions may be taken: (i) with the consent of the Majority
Revolving Credit Facility Lenders, the Administrative Agent may, or upon the
request of the Majority Revolving Credit Facility Lenders, the Administrative
Agent shall, by notice to the Borrower declare the Revolving Credit Commitments
to be terminated forthwith, whereupon the Revolving Credit Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. In the case of all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the
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Borrower hereunder and under the other Loan Documents. After all such Letters of
Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrower
hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower within ten Business Days of such expiration (or such other Person as
may be lawfully entitled thereto).
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Agents as the agents of such Lender under this
Agreement and the other Loan Documents, and each Lender irrevocably authorizes
each Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to such Agent by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 Reliance by Agents. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or
94
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Loan Parties),
independent accountants and other experts selected by such Agent. The Agents may
deem and treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with Section 10.6 and
all actions required by such Section in connection with such transfer shall have
been taken. Each Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders or any other instructing group of Lenders
specified by this Agreement) as it deems appropriate or it shall first be
indemnified to its satisfaction by such Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to take
any such action. Each Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Lender, the
Parent, Holdings or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent shall receive such a
notice, the Administrative Agent shall give notice thereof to the Lenders or if
such notice is from a Lender, to the Borrower. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself
95
as to the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Parent,
Holdings or the Borrower and without limiting the obligation of the Parent,
Holdings or the Borrower to do so), ratably according to their respective
Aggregate Exposure Percentages in effect on the date on which indemnification is
sought under this Section (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), for, and to save each Agent harmless from and
against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Loans and all other
amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Agents. The Administrative Agent may resign
as Administrative Agent upon ten days' notice to the Lenders and the Borrower.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent
96
effective upon such appointment and approval, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans. If no successor agent has accepted appointment as Administrative
Agent by the date that is ten days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.
The Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
duties, rights, obligations and responsibilities of the Syndication Agent, if
any, hereunder shall automatically be assumed by, and inure to the benefit of,
the Administrative Agent, without any further act by the Syndication Agent, the
Administrative Agent or any Lender. After any retiring Agent's resignation as
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 Agent under this
Agreement and the other Loan Documents.
9.10 Authorization to Release Liens and Guarantees. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
10.15.
9.11 The Arrangers; the Syndication Agent; the
Co-Documentation Agents. None of the Arrangers, the Syndication Agent or the
Co-Documentation Agents, in their respective capacities as such, shall have any
duties or responsibilities, or incur any liability, under this Agreement and the
other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) forgive or reduce the principal amount or
extend the final scheduled date of maturity of any Loan or
Reimbursement Obligation, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the
stated rate of any interest or fee payable hereunder or extend
the scheduled date of any payment thereof, or increase the
amount or extend the expiration date
97
of any Commitment of any Lender, in each case without the
consent of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this
Section or reduce any percentage specified in the definition
of Required Lenders or Required Prepayment Lenders, consent to
the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral
or release all or substantially all of the Guarantors from
their guarantee obligations under the Guarantee and Collateral
Agreement, in each case without the consent of all Lenders;
(iii) amend, modify or waive any condition
precedent to any extension of credit under the Revolving
Credit Facility set forth in Section 5.2 (including, without
limitation, the waiver of an existing Default or Event of
Default required to be waived in order for such extension of
credit to be made) without the consent of the Majority
Revolving Credit Facility Lenders;
(iv) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any
Facility without the written consent of all Lenders under such
Facility;
(v) amend, modify or waive any provision of
Section 9 or any other provision of any Loan Document directly
affecting the rights, obligations or duties of any Agent
without the consent of such Agent;
(vi) amend, modify or waive any provision of
Section 2.16 without the consent of each Lender directly
affected thereby;
(vii) amend, modify or waive any provision of
Section 3 without the consent of the Issuing Lender;
(viii) amend or modify Section 10.6 to add any
additional consent requirements necessary to effect any
assignment or participation under such Section (other than the
consent of the Borrower) without the consent of each Lender;
or
(ix) amend, modify or waive any provision of
Section 2.10 without the consent of the Required Prepayment
Lenders.
In addition to the amendments described above, and notwithstanding anything in
this Section 10.1 to the contrary, the Peso Subfacility Amendments may be
effected in accordance with the provisions of Section 2.23.
Any waiver, amendment, supplement or modification effected in
accordance with this Section 10.1 shall apply equally to each of the Lenders and
shall be binding upon the Loan Parties, the Lenders, the Agents and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Agents shall be restored to their former position and rights
98
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
If the Required Lenders shall have approved any amendment
which requires the consent of all of the Lenders, the Borrower shall be
permitted to replace any non-consenting Lender with another financial
institution, provided that, (i) the replacement financial institution shall
purchase at par, all Loans and other amounts owing to such replaced Lender on or
prior to the date of replacement, (ii) the Borrower shall be liable to such
replaced Lender under Section 2.19 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto (as if such purchase constituted a prepayment of such Loans),
(iii) such replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent and, with respect to the
replacement of a Revolving Credit Lender, each Issuing Lender, (iv) the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section 10.6 (provided that the Borrower shall be obligated to pay
the registration and processing fee referred to therein), (v) such replacement
Lender shall consent to the proposed amendment and (vi) any such replacement
shall not be deemed to be a waiver of any rights the Borrower, the
Administrative Agent or any other Lender shall have against the replaced Lender
or of the replaced Lender against the Borrower.
For the avoidance of doubt, this Agreement and any other Loan
Document may be amended (or amended and restated) with the written consent of
the Required Lenders, the Administrative Agent and each Loan Party to each
relevant Loan Document (x) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof
(collectively, the "Additional Extensions of Credit") to share ratably in the
benefits of this Agreement and the other Loan Documents with the Term Loans and
Revolving Extensions of Credit and the accrued interest and fees in respect
thereof and (y) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders, Required Prepayment
Lenders and Majority Revolving Facility Lenders; provided, however, that no such
amendment shall permit the Additional Extensions of Credit to share ratably with
(except pursuant to the Peso Facility Amendments) or with preference to the
Loans in the application of mandatory prepayments without the consent of the
Required Prepayment Lenders (prior to giving effect to clause (y)).
10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Parent, Holdings, the Borrower and
the Agents, as follows and (b) in the case of the Lenders, as set forth in an
administrative questionnaire delivered to the Administrative Agent or on
Schedule I to the Lender Addendum to
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which such Lender is a party or, in the case of a Lender which becomes a party
to this Agreement pursuant to an Assignment and Acceptance, in such Assignment
and Acceptance or (c) in the case of any party, to such other address as such
party may hereafter notify to the other parties hereto:
The Parent: Cinemark, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx, Chief Financial
Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Attention: Xxxxxxx Xxxxxxxx, VP-General
Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Holdings and the Borrower: c/o the Parent
The Syndication Agent: Xxxxxxx Xxxxx Credit Partners L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Telephone:
Telecopy:
The Administrative Agent: Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Xxxxxx Brothers Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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with a copy to: Trimont Real Estate Advisors
Marquis Tower Two
000 Xxxxxxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Issuing Lender: As notified by such Issuing Lender to the
Administrative Agent and the Borrower
provided that any notice, request or demand to or upon the any Agent, the
Issuing Lender or any Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay
or reimburse the Administrative Agent and the Arrangers for all their reasonable
out-of-pocket costs and expenses incurred in connection with the syndication of
the Facilities (other than fees payable to syndicate members) and the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of
counsel to the Administrative Agent and the charges of Intralinks, (b) to pay or
reimburse each Lender and the Agents for all their out-of-pocket costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation, the
fees and disbursements of counsel (including the allocated fees and
disbursements and other charges of in-house counsel) to each Lender and of
counsel to the Agents, (c) to pay, indemnify, or reimburse each Lender and the
Agents for, and hold each Lender and the Agents harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay caused by the Borrower in paying, Other Taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other
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documents, and (d) to pay, defend, indemnify or reimburse each Lender, each
Agent, their respective affiliates, and their respective officers, directors,
trustees, employees, advisors, agents and controlling persons (each, an
"Indemnitee") for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Parent, Holdings, the Borrower, any of its Subsidiaries or any of the Properties
and the fees and disbursements and other charges of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against the Borrower
hereunder (all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities (i) to the extent such
Indemnified Liabilities are found by a final, nonappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence, bad faith
or willful misconduct of such Indemnitee or (ii) arising from claims asserted by
another Indemnitee against such Indemnitee. The Borrower shall have the right to
undertake, conduct and control through counsel of its own choosing (which
counsel shall be acceptable to the applicable Indemnitee acting reasonably), the
conduct and settlement of claims with respect to the related Indemnified
Liabilities, and such Indemnitee shall cooperate with the Borrower in connection
therewith; provided that the Borrower shall permit such Indemnitee to
participate in such conduct and settlement through counsel chosen by such
Indemnitee. Notwithstanding the foregoing, each Indemnitee shall have the right
to employ its own counsel and the reasonable fees and expenses of such counsel
shall be at the Borrower's cost and expense if such Indemnitee reasonably
determines that (i) the Borrower's counsel is not defending any claim or
proceeding in a manner reasonably acceptable to such Indemnitee or (ii) the
interest of the Borrower and such Indemnitee have become adverse in any such
claim or cause of action, provided, however, that in such event, the Borrower
shall only be liable for the reasonable legal expenses of one counsel for all
such Indemnitees. If clause (ii) of the immediately preceding sentence is
applicable, at the option of the applicable Indemnitee, its attorneys shall
control the resolution of any such claim with respect to the related Indemnified
Liabilities. The Borrower shall not, without the prior written consent of each
Indemnitee affected thereby, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification may be sought hereunder (whether or
not such Indemnitee is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (a) includes an unconditional
release of such Indemnitee from all liability arising out of such action or
claim, (b) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of such Indemnitee and (c) does
not require such Indemnitee to pay any form of consideration to any party or
parties (including, without limitation, the payment of money) in connection
therewith. No Indemnitee shall be liable for any damages arising from the use by
unauthorized Persons of information or other materials sent through electronic,
telecommunications or other information transmission systems that are
intercepted by such Persons or for any special, indirect, consequential or
punitive damages in connection with the Facilities. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries
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so to waive, all rights for contribution or any other rights of recovery with
respect to all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise against
any Indemnitee until the date on which all Obligations (other than obligations
in respect of any Specified Hedge Agreement) have been paid in full, all
Commitments have terminated or expired and no Letter of Credit shall be
outstanding. Notwithstanding any other provision of this Section, the Borrower
shall have no obligation hereunder to any Indemnitee for any environmental
claims arising from actions taken by such Indemnitee with respect to any
Property after the exercise of remedies by such Indemnitee with respect to such
Property. All amounts due under this Section shall be payable not later than 30
days after written demand therefor supported by customary documentation.
Statements payable by the Borrower pursuant to this Section shall be submitted
to General Counsel (Telephone No. (000) 000-0000) (Fax No. (000) 000-0000), at
the address of the Borrower set forth in Section 10.2, or to such other Person
or address as may be hereafter designated by the Borrower in a notice to the
Administrative Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the benefit
of the Parent, Holdings, the Borrower, the Lenders, the Agents, all future
holders of the Loans and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
10.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
10.7(a) as fully as if such Participant were a Lender hereunder. The Borrower
and each Lender also agree that each Participant shall be entitled to the
benefits of Sections 2.17, 2.18 and 2.19 with respect to its participation in
the
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Commitments and the Loans outstanding from time to time as if such Participant
were a Lender; provided that, in the case of Section 2.18, such Participant
shall have complied with the requirements of said Section, and provided,
further, that no Participant shall be entitled to receive any greater amount
pursuant to any such Section than the transferor Lender would have been entitled
to receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or, with the consent of (i) the
Administrative Agent and so long as no Default or Event of Default has occurred
and is continuing, the Borrower (which, in each case, shall not be unreasonably
withheld or delayed) (provided that no such consent need be obtained with
respect to any assignment of Term Loans, unless such assignment is to a Person
that is a motion picture exhibitor or an Affiliate or related entity of a motion
picture exhibitor, then such assignment shall require the consent of the
Borrower), and (ii) in the case of any assignment of the Revolving Credit
Commitments, the Issuing Lender (which consent shall not be unreasonably
withheld), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
E, executed by such Assignee and such Assignor (and, where the consent of the
Borrower or the Agents is required pursuant to the foregoing provisions, by the
Borrower and such other Persons) and delivered to the Administrative Agent for
its acceptance and recording in the Register; provided that no such assignment
to an Assignee (other than any Lender or any affiliate or Related Fund thereof)
shall be in an aggregate principal amount of less than $5,000,000, in the case
of any assignment of Revolving Credit Commitments, and $1,000,000, in the case
of any assignment of Term Loans (other than in the case of an assignment of all
of a Lender's interests under this Agreement), unless otherwise agreed by the
Borrower and the Administrative Agent and, after giving effect to such
assignment, the assigning Lender (if it shall retain any Revolving Credit
Commitment or Loans) shall have Commitments and Loans aggregating at least
$5,000,000, in the case of Revolving Credit Commitments, and $1,000,000, in the
case of the Term Loans. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Commitments and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto, except as to Sections 2.17, 2.18 and 10.5 in respect of the period prior
to such effective date and Section 10.14). Notwithstanding any provision of this
Section, the consent of the Borrower shall not be required for any assignment
that occurs at any time when any Event of Default shall have occurred and be
continuing. For purposes of the minimum assignment amounts set forth in this
paragraph, multiple assignments by two or more Related Funds shall be
aggregated.
(d) The Administrative Agent shall, on behalf of the
Borrower, maintain at its address referred to in Section 10.2 a copy of each
Assignment and Acceptance delivered to it and
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a register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, each Agent and the Lenders
shall treat each Person whose name is recorded in the Register as the owner of
the Loans and any Notes evidencing such Loans recorded therein for all purposes
of this Agreement. Any assignment of any Loan, whether or not evidenced by a
Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance; thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee, and the old Notes
shall be returned by the Administrative Agent to the Borrower marked "canceled."
The Register shall be available for inspection by the Borrower or any Lender
(with respect to any entry relating to such Lender's Loans) at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor and an Assignee (and, in any case where the consent of
any other Person is required by Section 10.6(c), by each such other Person)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (treating multiple, simultaneous assignments by or to
two or more Related Funds as a single assignment) (except that no such
registration and processing fee shall be payable (y) in connection with an
assignment by or to a Xxxxxx Entity or (z) in the case of an Assignee which is
already a Lender or is an affiliate or Related Fund of a Lender or a Person
under common management with a Lender), the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Borrower. On
or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the
Revolving Credit Note and/or applicable Term Notes, as the case may be, of the
assigning Lender) a new Revolving Credit Note and/or applicable Term Notes, as
the case may be, to the order of such Assignee in an amount equal to the
Revolving Credit Commitment and/or applicable Term Loans, as the case may be,
assumed or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Revolving Credit Commitment and/or Term Loans, as the
case may be, upon request, a new Revolving Credit Note and/or Term Notes, as the
case may be, to the order of the Assignor in an amount equal to the Revolving
Credit Commitment and/or applicable Term Loans, as the case may be, retained by
it hereunder. Such new Note or Notes shall be dated the Effective Date and shall
otherwise be in the form of the Note or Notes replaced thereby. In the event
that the Administrative Agent has received a Revolving Credit Note and/or a Term
Note, as the case may be, from the assigning Lender, the Administrative Agent
shall promptly return to the Borrower such Note and/or Notes for cancellation.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests in Loans and Notes, including,
without limitation, any pledge or assignment by a Lender of any Loan or Note to
any Federal Reserve Bank in accordance with applicable law.
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(g) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other indebtedness of any SPC, it will
not institute against, or join any other Person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any state thereof. In
addition, notwithstanding anything to the contrary in this Section 10.6(g), any
SPC may (A) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender, or with the prior written consent of the Borrower and the Administrative
Agent (which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans, and (B) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC; provided that non-public
information with respect to the Borrower may be disclosed only with the
Borrower's consent which will not be unreasonably withheld. This paragraph (g)
may not be amended without the written consent of any SPC with Loans outstanding
at the time of such proposed amendment.
10.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to a particular Lender or
to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of the Obligations
owing to it, or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
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(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Parent, Holdings or the Borrower, any such notice being expressly waived by the
Parent, Holdings and the Borrower to the extent permitted by applicable law,
upon any amount becoming due and payable by the Parent, Holdings or the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final, but excluding deposits held by
the Parent, Holdings or the Borrower in a fiduciary capacity for others), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch, agency or
bank affiliate thereof to or for the credit or the account of the Parent,
Holdings or the Borrower, as the case may be. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement or of a Lender Addendum by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
10.9 Severability. Any provision of this Agreement that 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Parent, Holdings, the Borrower,
the Agents, the Arrangers and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Arrangers, any Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents. This Agreement supersedes and terminates the commitment letter among
the Borrower, the Arrangers and the Administrative Agent (other than any
provisions relating to obligations of the Borrower in respect of syndication of
the Facilities) but not the related fee letter.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of the
Parent, Holdings and the Borrower hereby irrevocably and unconditionally:
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(a) submits for itself and its Property in any legal
action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Parent, Holdings or the Borrower, as the case may be at
its address set forth in Section 10.2 or at such other address of which
the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) together with each Lender, each Agent and the
Arrangers, waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13 Acknowledgments. Each of the Parent, Holdings and the
Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Arrangers, any Agent nor any Lender has
any fiduciary relationship with or duty to the Parent, Holdings or the
Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Arrangers,
the Agents and the Lenders, on one hand, and the Parent, Holdings and
the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Arrangers, the Agents and the Lenders or
among the Parent, Holdings, the Borrower and the Lenders.
10.14 Confidentiality. Each of the Agents, the Lenders and
the Arrangers agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent any Agent or
any Lender from disclosing any such information (a) to the Arrangers,
108
any Agent, any other Lender or any affiliate of any thereof, (b) to any
Participant or Assignee (each, a "Transferee") or prospective Transferee that
has agreed to comply with the provisions of this Section, (c) to any of its
employees, directors, agents, attorneys, accountants and other professional
advisors who will be advised of such confidentiality, (d) to any financial
institution that is a creditor or a direct or indirect contractual counterparty
in swap agreements or such contractual counterparty's professional advisor (so
long as such creditor or contractual counterparty or professional advisor to
such contractual counterparty that has agreed to be bound by the provisions of
this Section), (e) upon the request or demand of any Governmental Authority
having jurisdiction over it, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (j) in connection with the exercise of any
remedy hereunder or under any other Loan Document; provided, however, with
respect to clauses (e), (f) and (g), each of the Agents and Lenders and the
Arrangers agrees to give the Parent, Holdings and Borrower prompt notice of any
request for such confidential information so as to permit the Parent, Holdings
or the Borrower to seek a protective order or similar remedy or cause such
information to be accorded confidential treatment. Notwithstanding anything
herein to the contrary, any party to this Agreement (and any employee,
representative, or other agent of any party to this Agreement) may disclose to
any and all Persons, without limitation of any kind, the structure and tax
aspects of the transactions contemplated by this Agreement, and all materials of
any kind (including opinions or other tax analyses) related to such structure
and tax aspects. Further, each party hereto acknowledges that it has no
proprietary rights to any tax matter or tax idea related to the transactions
contemplated by this Agreement.
10.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained
herein or in any other Loan Document, upon request of the Borrower in
connection with any Disposition of Property permitted by the Loan
Documents, the Administrative Agent shall (without notice to, or vote
or consent of, any Lender or any Qualified Counterparty) take such
actions as shall be required to release its security interest in any
Collateral being Disposed of in such Disposition, and to release any
guarantee obligations under any Loan Document of any Person being
Disposed of in such Disposition, to the extent necessary to permit
consummation of such Disposition in accordance with the Loan Documents.
(b) Notwithstanding any other provision of this Agreement
or any other Loan Document, the Borrower may request, and the
Administrative Agent shall (without notice to, or vote or consent of,
any Lender or any Qualified Counterparty) grant, a release of any
specific parcel of real property Collateral if (i) (A) such release is
in connection with a grant by the Borrower or a Guarantor of additional
real property Collateral of similar or greater value (valued in
accordance with Schedule 6.9; such value to be demonstrated to the
reasonable satisfaction of the Administrative Agent) and (B)
immediately after giving effect to such Collateral substitution, no
Default or Event of Default (including, without limitation, under
Section 6.13) shall have occurred and be continuing or (ii) such parcel
109
represents an adjacent parcel of real property not necessary in the
business of the Borrower or any Class I Restricted Subsidiary which has
been separated from another parcel of real property of the Borrower or
a Class I Restricted Subsidiary by means of subdivision and replatting.
(c) Notwithstanding anything to the contrary contained
herein or any other Loan Document, when all Obligations (other than
obligations in respect of any Specified Hedge Agreement) have been paid
in full, all Commitments have terminated or expired and no Letter of
Credit shall be outstanding, upon request of the Borrower, the
Administrative Agent shall (without notice to, or vote or consent of,
any Lender, or any affiliate of any Lender that is a party to any
Specified Hedge Agreement) take such actions as shall be required to
release its security interest in all Collateral, and to release all
guarantee obligations under any Loan Document, whether or not on the
date of such release there may be outstanding Obligations in respect of
Specified Hedge Agreements. Any such release of guarantee obligations
shall be deemed subject to the provision that such guarantee
obligations shall be reinstated if after such release any portion of
any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payment had not
been made.
10.16 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
10.17 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
10.18 WAIVERS OF JURY TRIAL. THE PARENT, HOLDINGS, THE
BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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10.19 Effect of Amendment and Restatement of the Existing
Credit Agreement. On the Effective Date, the Existing Credit Agreement shall be
amended, restated and superseded in its entirety. The parties hereto acknowledge
and agree that (a) this Agreement and the other Loan Documents, whether executed
and delivered in connection herewith or otherwise, do not constitute a novation,
payment and reborrowing, or termination of the "Obligations" (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement as in effect
prior to the Effective Date and (b) such "Obligations" are in all respects
continuing (as amended and restated hereby) with only the terms thereof being
modified as provided in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
CINEMARK, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President-General Counsel
CNMK HOLDING, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Secretary
CINEMARK USA, INC.
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
XXXXXX BROTHERS INC., as a Joint Lead
Arranger
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
XXXXXXX SACHS CREDIT PARTNERS L.P., as a
Joint Lead Arranger and Syndication Agent
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Authorized Signatory
[SIGNATURE PAGE TO THE AMENDED AND RESTATED CREDIT AGREEMENT]
DEUTSCHE BANK SECURITIES INC., as
Co-Documentation Agent
By: /s/ Xxxxxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Director
THE BANK OF NEW YORK, as
Co-Documentation Agent
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-Documentation Agent
By: /s/ Xxxxxxx X. Xxxxxx III
---------------------------------------
Name: Xxxxxxx X. Xxxxxx III
Title: Duly Authorized Signatory
CIBC INC., as Co-Documentation Agent
By: /s/ Xxxxxx X. Xxxxxxxxx III
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx III
Title: Authorized Signatory
XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
[SIGNATURE PAGE TO THE AMENDED AND RESTATED CREDIT AGREEMENT]
Annex A
PRICING GRID FOR TERM LOANS
Applicable Margin for
Term Loans
--------------------------
Eurodollar Base Rate
Consolidated Leverage Ratio Loans Loans
--------------------------- ------------ ---------
> 2.50 to 1.00 2.25% 1.25%
< or = 2.50 to 1.00 2.00% 1.00%
PRICING GRID FOR REVOLVING CREDIT LOANS
Applicable Margin for
Revolving Credit Loans
--------------------------
Eurodollar Base Rate
Consolidated Leverage Ratio Loans Loans
--------------------------------- ---------- ---------
>2.75 to 1.00 2.50% 1.50%
< or = 2.75 to 1.00 and > 2.25 to 1.00 2.25% 1.25%
< or = 2.25 to 1.00 2.00% 1.00%
Changes in the Applicable Margins resulting from changes in the Consolidated
Leverage Ratio shall become effective on the date (the "Adjustment Date") on
which financial statements are delivered to the Lenders pursuant to Section 6.1
(but in any event not later than the date such financial statements are due
pursuant to Section 6.1) and shall remain in effect until the next change to be
effected pursuant to this paragraph. If any financial statements referred to
above are not delivered within the time periods specified above, then, until
such financial statements are delivered, the Consolidated Leverage Ratio as at
the end of the fiscal period that would have been covered thereby shall for the
purposes of this definition be deemed to be greater than 2.75 to 1.00. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Consolidated Leverage Ratio shall for the purposes of this
Pricing Grid be deemed to be greater than 2.75 to 1.00. Each determination of
the Consolidated Leverage Ratio pursuant to this Pricing Grid shall be made as
at the last day of any period of four consecutive fiscal quarters of the
Borrower.
Annex B
EXISTING LETTER OF CREDIT
Borrower presently has one outstanding letter of credit as follows:
Issuing Lender: Bank of America, N.A.
Beneficiary: National Union Fire Insurance Company of Pittsburgh, PA
XX Xxx 000 Xxxx Xxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
Amount $68,557
The purpose of the letter of credit is to cover the IBNR claims on our former
self-insured general liability, casualty and workers compensation plans from the
period when we were self-insured.
Renewed from Feb 18, 2004 to Feb 18, 2005.
