EXHIBIT 10.1
[CONFORMED COPY]
$800,000,000
CREDIT AGREEMENT
dated as of
October 10, 1996
among
Metro-Xxxxxxx-Xxxxx Inc.,
The Lenders Listed Herein,
The L/C Issuers Named Herein
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS
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Page
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions............................................. 2
Section 1.02. Accounting Terms and Determinations..................... 26
Section 1.03. Classes and Types of Loans and Borrowings............... 26
ARTICLE 2
THE CREDITS
Section 2.01. Commitments to Lend..................................... 27
Section 2.02. Method of Borrowing..................................... 30
Section 2.03. Notes................................................... 31
Section 2.04. Maturity of Loans; Mandatory Prepayments; Certain
Commitment Reductions................................... 32
Section 2.05. Interest Rates.......................................... 37
Section 2.06. Fees.................................................... 39
Section 2.07. Optional Termination or Reduction of Commitments........ 40
Section 2.08. Method of Electing Interest Rates....................... 40
Section 2.09. Mandatory Termination of Commitments.................... 42
Section 2.10. Optional Prepayments.................................... 42
Section 2.11. General Provisions as to Payments....................... 42
Section 2.12. Funding Losses.......................................... 43
Section 2.13. Computation of Interest and Fees........................ 44
Section 2.14. Letters of Credit....................................... 44
ARTICLE 3
CONDITIONS
Section 3.01. Closing................................................. 47
Section 3.02. Borrowings and Issuances of Letters of Credit........... 50
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence and Power........................... 51
Section 4.02. Corporate and Governmental Authorization; No
Contravention........................................... 51
Section 4.03. Binding Effect.......................................... 51
Section 4.04. Financial Information; Information Memorandum........... 52
Section 4.05. Litigation.............................................. 53
Section 4.06. Compliance with ERISA................................... 53
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Section 4.07. Environmental Compliance................................ 53
Section 4.08. Taxes................................................... 54
Section 4.09. Subsidiaries............................................ 54
Section 4.10. Regulatory Restrictions on Borrowing.................... 55
Section 4.11. Full Disclosure......................................... 55
Section 4.12. Representations in Transaction Documents True and
Correct................................................. 55
Section 4.13. Intellectual Property................................... 55
Section 4.14. Collateral Documents.................................... 56
Section 4.15. Solvency................................................ 56
ARTICLE 5
COVENANTS
Section 5.01. Information............................................. 56
Section 5.02. Payment of Obligations.................................. 59
Section 5.03. Maintenance of Property; Insurance...................... 60
Section 5.04. Conduct of Business and Maintenance of Existence........ 60
Section 5.05. Compliance with Laws.................................... 60
Section 5.06. Inspection of Property, Books and Records............... 61
Section 5.07. Mergers and Sales of Assets; Licensing Agreements....... 61
Section 5.08. Use of Proceeds......................................... 62
Section 5.09. Negative Pledge......................................... 63
Section 5.10. Limitation on Debt...................................... 65
Section 5.11. Adjusted EBITDA; EBITDA to Interest..................... 66
Section 5.12. Total Borrowed Funds to EBITDA.......................... 67
Section 5.13. Total Borrowed Funds/Library Cash Flow.................. 68
Section 5.15. Minimum Consolidated Adjusted Net Worth................. 69
Section 5.16. Operating Lease Payments................................ 69
Section 5.17. Restricted Payments..................................... 70
Section 5.19. Transactions with Affiliates............................ 73
Section 5.20. No Modification of Agreements Without Consent........... 74
Section 5.21. Limitation on Restrictions Affecting Subsidiaries....... 74
Section 5.22. Holdings Debt........................................... 75
Section 5.23. Hedging Facilities...................................... 75
Section 5.24. Further Assurances...................................... 75
Section 5.25. Minimum Number of Films................................. 77
ARTICLE 6
DEFAULTS
Section 6.01. Events of Default....................................... 77
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Section 6.02. Notice of Default....................................... 81
Section 6.03. Cash Cover.............................................. 81
ARTICLE 7
THE AGENT
Section 7.01. Appointment and Authorization........................... 82
Section 7.02. Agent and Affiliates.................................... 82
Section 7.03. Action by Agent......................................... 82
Section 7.04. Consultation with Experts............................... 82
Section 7.05. Liability of Agent...................................... 82
Section 7.06. Indemnification......................................... 83
Section 7.07. Credit Decision......................................... 83
Section 7.08. Successor Agent......................................... 84
Section 7.09. Agent's Fee............................................. 84
Section 7.10. Arranger................................................ 84
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair 84
Section 8.02. Illegality.............................................. 85
Section 8.03. Increased Cost and Reduced Return....................... 85
Section 8.04. Taxes................................................... 87
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar
Loans................................................... 89
Section 8.06. Substitution of Lender.................................. 89
ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices................................................. 90
Section 9.02. No Waivers.............................................. 90
Section 9.03. Expenses; Indemnification............................... 91
Section 9.04. Sharing of Set-offs..................................... 91
Section 9.05. Amendments and Waivers; Release of Guarantors or
Collateral.............................................. 92
Section 9.06. Successors and Assigns.................................. 93
Section 9.07. Collateral.............................................. 96
Section 9.08. Governing Law; Submission to Jurisdiction............... 96
Section 9.09. Counterparts; Integration; Effectiveness................ 96
Section 9.10. Waiver of Jury Trial.................................... 96
Section 9.11. Confidentiality......................................... 97
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Pricing Schedule
Commitment Schedule
Schedule 1.01(a) - Library Films
Schedule 3.01(h)(x) - Investor Agreements
Schedule 3.01(i) - Terminating Debt
Schedule 4.05 - Material Litigation
Schedule 4.09 - Material Subsidiaries
Schedule 5.09 - Existing Liens
Schedule 5.10 - Outstanding Debt
Schedule 5.18 - Existing Investments
Schedule 5.19 - Transactional Agreements with Affiliates
Exhibit A - Note
Exhibit B - Borrower Pledge Agreement
Exhibit C - Holdings Agreement
Exhibit D - Guarantor Pledge Agreement
Exhibit E - Borrower and Guarantor Security Agreement
Exhibit F - Subsidiary Guaranty Agreement
Exhibit G - Opinion of Xxxxxx, Xxxx & Xxxxxxxx, counsel for the Obligors
Exhibit H-1 - Opinion of Xxxxx Xxxx & Xxxxxxxx, special counsel for the Agent
Exhibit H-2 - Opinion of Xxxxxx, Xxxxxxxxx & Xxxxxxxxx, special counsel for the
Agent
Exhibit I - Assignment and Assumption Agreement
Exhibit J - Capital Call Agreement
Exhibit K - Extension Agreement
Exhibit L - Section 8.04(d) Certificate
CREDIT AGREEMENT
AGREEMENT dated as of October 10, 1996 among METRO-XXXXXXX-XXXXX INC., the
LENDERS listed on the signature pages hereof, the L/C ISSUERS named herein and
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.0. Definitions. The following terms, as used herein, have the
following meanings:
"Accepting Tranche B Lenders" has the meaning set forth in Section
2.04(f)(iii).
"Acquisition" means the purchase by Holdings of all of the issued and
outstanding capital stock of the Borrower and all other transactions
contemplated by the Transaction Documents to be consummated on or before the
Closing Date.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(b).
"Administrative Questionnaire" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Lender.
"Affiliate" means (i) any Person that directly, or indirectly through one
or more intermediaries, controls Holdings (a "Controlling Person") or (ii) any
Person (other than the Borrower or a Subsidiary of the Borrower) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
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"Agent" means Xxxxxx Guaranty Trust Company of New York in its capacity as
agent for the Lenders under the Loan Documents, and its successors in such
capacity.
"Applicable Lending Office" means, with respect to any Lender, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Arranger" means X.X. Xxxxxx Securities Inc. in its capacity as arranger
for the Lenders under the Loan Documents.
"Asset Sale" means any sale, lease, license or other disposition (including
any such transaction effected by way of merger or consolidation) (any of the
foregoing, for purposes of this definition, a "disposition") by the Borrower or
any of its Subsidiaries of any asset, including without limitation any sale-
leaseback transaction, whether or not involving a capital lease, but excluding
(i) dispositions of cash, cash equivalents and other cash management investments
and obsolete, unused or unnecessary equipment and undeveloped real estate, in
each case in the ordinary course of business, (ii) dispositions of any right,
title or interest in an individual Film (other than any Library Film) or slate
of Films (other than any Library Film) or Film Related Asset in the ordinary
course of business in connection with any Investment permitted under Section
5.18, (iii) dispositions of any right, title or interest in an individual Film
(other than any Library Film) or slate of Films (other than any Library Film) or
Film Related Asset in the ordinary course of business in connection with any
financing permitted under Section 5.10(h) , (iv) dispositions pursuant to a
Sale-Leaseback Transaction, (v) dispositions pursuant to a Licensing Agreement
permitted under Section 5.07(d) or (e), (vi) dispositions of inventory,
including Film Related Assets, but excluding any Film (including without
limitation any Library Film), in the ordinary course of business, (vii)
dispositions of any right, title or interest in an individual Film (other than
any Library Film) or slate of Films (other than any Library Film) or Film
Related Asset in the ordinary course of business pursuant to transactions
constituting split-rights deals, coproduction deals or cofinancing deals (as
such terms are generally understood in the movie industry on the date hereof),
(viii) dispositions of accounts receivables pursuant to Receivables Financings
entered into prior to June 30, 1996, (ix) dispositions to the Borrower or any
Guarantor and (x) dispositions of any Film Related Assets, any Film (other than
any Library Film) or slate of Films (other than any Library Film) (any of the
foregoing, for purposes of this clause (x), a "disposed asset") to any Single
Purpose Subsidiary for the purpose of permitting such Single Purpose Subsidiary
to develop, produce, finance, acquire, distribute or exploit such disposed asset
so long as the cash consideration received by the Borrower or the Subsidiary
disposing of such
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disposed asset in any such disposition is at least equal to the amount invested
or spent by the Borrower and its Subsidiaries on or prior to the date of such
disposition with respect to the development, production, acquisition or
financing of such disposed asset (excluding from the calculation of such amount
invested or spent overhead and other selling, general and administrative costs);
provided that a disposition of assets not excluded by clauses (i) through (x)
above during any Fiscal Year shall not constitute an Asset Sale unless and until
(and solely to the extent that) the aggregate Net Cash Proceeds from such
disposition, when combined with all other such dispositions previously made
during such Fiscal Year, exceeds $5,000,000. The description of any transaction
as not constituting an "Asset Sale" does not affect any limitation on such
transaction imposed by Article 5 of this Agreement (other than Section 5.07(b)).
"Assignee" has the meaning set forth in Section 9.06(c).
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"Base Rate Loan" means a Loan which bears interest by reference to the Base
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or the provisions of Article 8.
"Base Rate Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
"Borrower" means Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation, and its
successors.
"Borrower Pledge Agreement" means the pledge agreement substantially in the
form of Exhibit B hereto between the Borrower and the Agent entered into as of
the Closing Date, as amended from time to time.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Call Agreement" means the agreement substantially in the form of
Exhibit J hereto among Tracinda, Seven Network, Holdings, the Borrower and the
Agent entered into as of the Closing Date, as amended from time to time.
"Class" has the meaning set forth in Section 1.03.
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"Closing Date" means the first date on or after the Effective Date on which
all of the conditions specified in Section 3.01 shall have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Collateral" means collateral subject to the Collateral Documents.
"Collateral Documents" means the Pledge Agreements, the Security Agreement,
any additional pledge agreements, security agreements or mortgages required to
be delivered pursuant to the Loan Documents and any instruments of assignment,
laboratory access letters or other instruments or agreements executed pursuant
to the foregoing.
"Commitment" means a Term Commitment, a Revolving Commitment or a Swing
Loan Commitment, and "Commitments" means any combination of the foregoing.
"Commitment Fee Rate" means a rate per annum determined in accordance with
the Pricing Schedule.
"Commitment Schedule" means the Schedule attached hereto identified as
such.
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414(b) or (c) of the Code.
"Consolidated Adjusted EBITDA" means for any period (i) Consolidated EBITDA
for such period plus (ii) the lesser of (A) $50,000,000 and (B) to the extent
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deducted in determining such Consolidated EBITDA for such period, the aggregate
amount of write-offs in excess of $20,000,000 of Film costs with respect to
Films required to be taken during such period under Financial Accounting
Standard Board Statement No. 53 (as in effect on the Closing Date).
"Consolidated Adjusted Net Worth" means at any date (i) the consolidated
stockholders' equity of Holdings and its Consolidated Subsidiaries as reflected
on the balance sheet of Holdings at such date (or as the same would be reflected
on such balance sheet if such balance sheet were prepared at such date) plus
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(ii) the aggregate amount of Specified Non-Cash Charges taken after September
30, 1996
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minus (iii) the aggregate amount of cash payments made by Holdings and its
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Consolidated Subsidiaries after September 30, 1996 with respect to items for
which any Specified Non-Cash Charges have been taken after September 30, 1996
minus (iv) all amounts that are included as assets on such balance sheet at such
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date (or as the same would be included on such balance sheet if such balance
sheet were prepared at such date) in respect of any Film produced or acquired by
the Borrower or any of its Consolidated Subsidiaries which Film has not been
released within 18 months following the date of completion of principal
photography thereof or, if later, the date of acquisition thereof.
"Consolidated Capital Expenditures" means for any period the gross
additions to property, plant and equipment and other capital expenditures of
Holdings and its Consolidated Subsidiaries for such period.
"Consolidated Cash Interest Expense" means for any period the cash interest
expense of Holdings and its Consolidated Subsidiaries determined on a
consolidated basis for such period.
"Consolidated EBITDA" means for any period (i) Consolidated Net Income for
such period plus (ii) to the extent deducted in determining Consolidated Net
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Income for such period, the sum of (x) consolidated interest expense, (y) income
tax expense and (z) depreciation and amortization (other than amortization of
film and television costs and participants' share).
"Consolidated Net Income" means for any period (i) the consolidated net
income of Holdings and its Consolidated Subsidiaries for such period, determined
in any event before payment of any dividends on the Investor Preferred Stock or
any other preferred stock plus (ii) to the extent deducted in determining such
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consolidated net income, any Specified Non-Cash Charges minus (iii) any cash
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payments made by Holdings and its Consolidated Subsidiaries during such period
with respect to items for which any Specified Non-Cash Charges were taken in a
prior period.
"Consolidated Subsidiary" means, with respect to any Person, at any date,
any Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such statements
were prepared as of such date; unless otherwise specified, "Consolidated
Subsidiary" means a Consolidated Subsidiary of Holdings.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all
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obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles (including without
limitation any such obligations under Sale-Leaseback Transactions to the extent
that such obligations are capitalized in accordance with generally accepted
accounting principles), (v) all non-contingent obligations (and, for purposes of
Section 5.09 and the definitions of Material Debt, all contingent obligations)
of such Person to reimburse any Lender or other Person in respect of amounts
paid under a letter of credit or similar instrument, (vi) all Debt secured by a
Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person and (vii) all Debt of others Guaranteed by such
Person; provided however, that (x) the "Debt" of any Person does not include any
(A) commitments of such Person in connection with the development, production,
acquisition, distribution, exhibition or exploitation of Films, (B) guaranteed
payment obligations of such Person of a nature customary in the film industry of
such Person under license agreements with respect to the development,
production, acquisition, distribution, exhibition or exploitation of Films, (C)
obligations of such Person in respect of Profit Participations, Residuals and
Deferred Payments payable to other Persons in connection with the development,
production, acquisition, distribution, exhibition, exploitation or financing of
Films, (D) obligations of such Person in the nature of progress or installment
payment obligations with respect to a Film owed to the owner of such Film or
cast, crew, writers, distributors, directors, producers, owners of rights, bond
companies or similar Persons for such Film, in respect of the deferred purchase
price of such Film or rights to such Film, or services in, or in connection
with, such Film (to the extent entered into in the ordinary course of business
of such Person and not otherwise constituting "Debt" of a type referred to in
clauses (i) or (ii) above), (E) obligations of such Person under performance or
completion bonds which have been posted in the ordinary course of business in
connection with the development or production of Films or (F) any Guaranty of
any obligation referred to in clause (A), (B), (C), (D) or (E) and (y) for
purposes of Section 5.10 and the determination of Total Borrowed Funds, the
amount of "Debt" of the Borrower or any of its Subsidiaries which constitutes
"Debt" solely pursuant to clause (vii) of this definition because the Borrower
or such Subsidiary is a partner in a partnership, shall be equal to the
principal or face amount of such Debt multiplied by the Borrower's or such
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Subsidiary's percentage interest in such partnership, so long as such
partnership is solvent and paying and capable of paying its obligations as they
become due.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
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"Deferred Payments" means deferred payments for services payable to cast,
crew, writers, distributors, directors, producers, owners of rights, bond
companies or similar Persons or payments to producers or investors, in
connection with the development, production, acquisition, distribution or
exploitation of Films or Film Related Assets, the amount or payment of which is
contingent upon the performance of such Films or Film Related Assets or deferred
to a fixed time, tied to the performance of such Film or Film Related Assets or
to the achievements of such Person with respect to such Film or Film Related
Asset.
"Deferred Tranche B Unscheduled Prepayment Date" has the meaning set forth
in Section 2.04(f)(ii).
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City or Los Angeles are authorized by
law to close.
"Domestic Lending Office" means, as to each Lender, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Lender may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 9.09.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment,
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storage, disposal, transport or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation thereof.
"Equity Issuance Reduction Event" means any contribution to the capital of
Holdings or any of its Subsidiaries or the issuance by Holdings or any of its
Subsidiaries of any equity securities not constituting Debt (other than (i) any
contribution by the Borrower or any Subsidiary to the capital of a Subsidiary
and any equity securities issued to the Borrower or any of its Subsidiaries,
(ii) any contribution to the capital of Holdings by Tracinda or Seven Network or
any contribution to the capital of the Borrower by Holdings or any equity
securities issued to Holdings, Tracinda and Seven Network, in each case on or
prior to the Closing Date pursuant to the transactions referred to in Section
3.01(h), (iii) any contribution to the capital of Holdings by Tracinda or Seven
Network or any equity securities issued by Holdings to Tracinda or Seven
Network, in each case pursuant to the Capital Call Agreement and any
contribution to the capital of the Borrower by Holdings, and any equity
securities issued by the Borrower to Holdings, in each case in connection
therewith, (iv) any contribution to the capital of Holdings and any equity
securities issued by Holdings but solely to the extent that the proceeds of such
contribution to capital or the issuance of such securities are applied by
Holdings to repay outstanding Holdings Debt, (v) equity securities issued upon
the exercise of options under the Management Stock Incentive Plan or pursuant to
the Xxxxxxx Employment Agreement or other arrangements to which Xx. Xxxxx X.
Xxxxxxx is a party, (vi) equity securities issued or deemed issued upon the
conversion of any preferred stock into common stock pursuant to the terms of the
Management Stock Incentive Plan or upon the conversion by Tracinda or Seven of
any preferred stock described in clauses (y)(1) and (y)(2) of Section 5.17(d),
(vii) equity securities issued pursuant to contractual anti-dilution provisions
for no cash consideration or other payment by the holder of such securities
(including without limitation any such provisions contained in contracts
governing the issuance of equity securities described in clauses (v) and (vi) of
this definition) and (viii) equity securities issued to any member of senior
management of the Borrower in satisfaction of obligations of the Borrower
pursuant to employment agreements between the Borrower and such member of senior
management in effect prior to the date hereof), but only if, and to the extent
that, the aggregate Net Cash Proceeds from such issuance, when combined with the
Net Cash Proceeds from all other such issuances (excluding any issuances
referred to in clauses (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii))
consummated on or after the Closing Date, exceeds $150,000,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Lender, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Euro-
Dollar Lending Office) or such other office, branch or affiliate of such Lender
as it may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Loan which bears interest at a Euro-Dollar
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or (ii) an overdue amount which was a Euro-Dollar Loan immediately
before it became overdue.
"Euro-Dollar Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.05(b) on the basis of an Adjusted London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(b).
"Event of Default" has the meaning set forth in Section 6.01.
"Excess Cash Flow" means, for any Fiscal Year, (a) the sum of (x) the
amount set forth opposite the caption "Net cash provided by operating
activities" plus (or minus) (y) the amount set forth opposite the caption "Net
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cash provided (used) by investing activities", in each case as set forth in the
consolidated statements of cash flows of Holdings and its Consolidated
Subsidiaries for such Fiscal Year minus (b) the aggregate amount of scheduled
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principal repayments of the Term Loans made pursuant to Sections 2.04(b) and (c)
during such Fiscal Year minus (c) the aggregate amount of optional repayments of
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the Term Loans made pursuant to Section 2.10 minus (d) the aggregate amount of
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principal repayments of the Loans made pursuant to Section 2.04(d) with respect
to Asset Sales or the receipt of Major Casualty Proceeds to the extent that the
proceeds of any such Asset Sale or Major Casualty Proceeds were added in
determining the amounts referred to in clauses (a)(x) or (a)(y) above for such
Fiscal Year, minus (e) the aggregate amount of scheduled principal payments of
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other Debt made
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during such Fiscal Year (including the portion of any payments of Debt described
in clause (iv) of the definition thereof that is allocable to principal).
"Excess Licensing Proceeds" means, in respect of any Material New Film
Licensing Agreement, the amount by which payments (other than (i) any payment
calculated by reference to the production budget or negative cost of a Film (a
"Production Payment"), (ii) any payment calculated by reference to performance
of a Film (a "Performance Payment") and (iii) any payment which constitutes an
advance with respect to a Production Payment or Performance Payment to be earned
within 12 months after the date such advance is paid) (all such nonexcluded
payments, "Noncontingent Payments") received by the Borrower and its
Subsidiaries in any transaction year under such Material New Film Licensing
Agreement exceeds the sum of (x) the amount of the Noncontingent Payments that
would be received by the Borrower and its Subsidiaries in such transaction year
if such Noncontingent Payments were made reasonably pro-rata over the period of
availability of the Films which are subject to such Material New Film Licensing
Agreement plus (y) the greater of (1) 10% of the aggregate amount of all
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Noncontingent Payments to be made under such Material New Film Licensing
Agreement during the term thereof and (2) $10,000,000. As used herein, "Material
New Film Licensing Agreement" means any Licensing Agreement or series of related
Licensing Agreements with respect to Films (other than Library Films) or Film
Related Assets (considered as a single agreement for purposes hereof) if the
aggregate amount of all payments payable with respect to such Licensing
Agreement or series of related Licensing Agreements during the term thereof (in
the case of any Performance Payments, as estimated by the Borrower in accordance
with its customary practices) exceeds $50,000,000.
"Existing Credit Agreement" means the Credit Agreement dated as of
September 16, 1994 among the Borrower, the several lenders from time to time
party thereto, and Chemical Bank, as agent, as in effect immediately prior to
the Closing Date.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
11
day shall be the average rate quoted to Xxxxxx Guaranty Trust Company of New
York on such day on such transactions as determined by the Agent.
"Film Related Asset" means any right in and to any motion picture,
television product, literary work, dramatic work or musical work prior to the
time any such asset becomes a "Film".
"Films" means motion pictures including, without limitation, feature films,
shorts, television programs, animated programs or other similar product, and the
components thereof (whether or not now known or recognized) to which the
Borrower or any of its Subsidiaries owns any right, title or interest including,
without limitation, (i) the Library Films, (ii) works in progress comprising
feature length theatrical motion picture or television projects in principal
photography and/or post-production, projects completed but not yet released, and
unreleased or completed but undelivered pick-ups, (iii) underlying rights in and
to the literary, musical and dramatic and other material associated with or
related to or necessary to the exploitation of the works or projects referred to
in clauses (i) or (ii) including, without limitation, copyrights pertaining
thereto, (iv) to the extent related to the works or projects referred to in
clauses (i) or (ii), sequel, prequel and remake rights, all rights to
novelization, merchandising, character, serialization, games and interactive
video, (v) all other ancillary and subsidiary rights throughout the universe
related to such works and projects, (vi) all negative and positive film,
soundtracks, optical, audio, video and advertising materials and supplies
associated with any of such works or projects, and (vii) all contractual and
other rights associated with or related to such works or projects and the
related ancillary and subsidiary rights whether in any media now known or
hereafter developed.
"First Run Feature Films" means at any date any Films which have not
completed their initial theatrical release in the United States at such date.
"Fiscal Quarter" means a fiscal quarter of Holdings.
"Fiscal Year" means a fiscal year of Holdings ending December 31.
"Foreign Subsidiary" means any Subsidiary of the Borrower which is not
incorporated or organized in the United States or in any State thereof.
"Group of Loans" means at any time a group of Loans of the same Class of
Loans consisting of (i) all such Loans which are Base Rate Loans at such time or
(ii) all such Loans that are Euro-Dollar Loans having the same Interest Period
at such time; provided that, if a Loan of any particular Lender is converted to
or
12
made as a Base Rate Loan pursuant to Article 8, such Loan shall be included
in the same Group or Groups of Loans from time to time as it would have been in
if it had not been so converted or made.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the holder of such
Debt or other obligation of the payment thereof or to protect such holder
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantor" means each Person who has executed the Subsidiary Guaranty.
"Guarantor Pledge Agreement"means a pledge agreement substantially in the
form of Exhibit D hereto between a Guarantor and the Agent entered into as of
the Closing Date or from time to time after the Closing Date pursuant to Section
5.22, in each case as amended from time to time.
"Hazardous Substances" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"Holdings" means P & F Acquisition Corp., a Delaware corporation, and its
successors.
"Holdings Agreement"means the agreement substantially in the form of
Exhibit C hereto between Holdings and the Agent entered into as of the Closing
Date, as amended from time to time.
"Holdings Debt" means any Debt issued by Holdings.
"Holdings Debt Incurrence" means the incurrence by Holdings of any Holdings
Debt, other than (i) the incurrence by Holdings of any Holdings Debt
13
the proceeds of which are applied to refinance other Holdings Debt outstanding
immediately prior to the incurrence thereof , (ii) the incurrence by Holdings of
any Holdings Debt owed to the Borrower, but solely to the extent the proceeds of
such Holdings Debt are applied to pay Holdings Expenses permitted by Section
5.17(d) and (iii) the incurrence by Holdings of any Holdings Debt pursuant to
the Holdings Management Notes.
"Holdings Expenses" has the meaning set forth in Section 5.17(d).
"Holdings Management Notes" has the meaning set forth in the Holdings
Agreement.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Information Memorandum" means the confidential descriptive memorandum
dated August 1996 furnished to the Lenders in connection with the transactions
contemplated by the Loan Documents.
"Insolvency" means, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Interest Period" means, with respect to each Euro-Dollar Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding Euro-
Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject to
clauses (c) and (d) below, end on the last Euro-Dollar Business Day of the
calendar month at the end of such Interest Period;
14
(c) if any Interest Period with respect to any Euro-Dollar Term Loan
includes a date on which a scheduled payment of principal of such Term Loans is
required to be made under Sections 2.04(b) or 2.04(c) but does not end on such
date, then (i) the principal amount of each Euro-Dollar Term Loan required to be
repaid on such date shall have an Interest Period ending on such date and (ii)
the remainder (if any) of each such Euro-Dollar Term Loan shall have an Interest
Period determined as set forth above; and
(d) any Interest Period with respect to any Loan which would otherwise end
after the Maturity Date (as in effect on the first day of such Interest Period)
with respect to such Loan shall end on such Maturity Date.
"Investor Preferred Stock" means the preferred stock of Holdings in an
aggregate amount of $500,000,000 purchased by Tracinda and Seven Network on the
Closing Date and referred to in Section 3.01(h) hereof.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means, with respect to any Person, any investment by such
Person in any other Person (including an Affiliate) in the form of direct or
indirect loans, Guarantees of Debt or other payment obligations, advances or
capital contributions, purchases or other acquisitions for consideration of
Debt, equity interests or other securities or warrants, options or other rights
to acquire equity interests or other securities and all other items that are
classified as investments on the balance sheet of such Person in accordance with
generally accepted accounting principles as in effect from time to time or that
would be so classified on such balance sheet if such balance sheet were prepared
at the relevant time.
"Investor" has the meaning set forth in Section 6.01(b).
"L/C Issuer" means Xxxxxx Guaranty Trust Company of New York and any other
Revolving Lender that may agree with the Borrower to issue letters of credit
hereunder (and shall have notified the Agent thereof), in each case as issuer of
a letter of credit hereunder.
"Lender" means a Term Lender, a Revolving Lender or the Swing Lender and
shall include, as the context may require, any L/C Issuer in such capacity.
"Letter of Credit" means a letter of credit to be issued hereunder by an
L/C Issuer.
15
"Letter of Credit Commitment" means, at any time, the lesser of (x)
$15,000,000 and (y) the aggregate Revolving Credit Commitments at such time.
"Letter of Credit Fee Rate" has the meaning set forth in the Pricing
Schedule.
"Letter of Credit Liabilities" means, for any Revolving Lender and at any
time, such Revolving Lender's Revolving Percentage of the sum of (x) the
aggregate unreimbursed amount then owing by the Borrower in respect of amounts
drawn under all Letters of Credit and (y) the aggregate amount then available
for drawing under all Letters of Credit.
"Leverage Ratio" means, on any date, the ratio of (i) Total Borrowed Funds
on such date to (ii) Consolidated EBITDA for the period of four consecutive
Fiscal Quarters most recently ended on or prior to such date (or, if greater,
solely for any date prior to December 31, 1998, Consolidated EBITDA for the
period from and including January 1, 1998 to and including the last day of the
Fiscal Quarter most recently ended on or prior to such date, annualized on a
simple arithmetic basis).
"Library Cash Flows" means for any period the aggregate amount of cash
received by the Borrower and its Consolidated Subsidiaries during such period
with respect to Films released on or prior to September 1, 1996.
"Library Films" means the films listed on Schedule 1.01(a) and all other
Films other than (and only for so long as such Films are) First-Run Feature
Films.
"Licensing Agreements" means any licensing agreements now outstanding or
hereafter executed pursuant to which the Borrower or any of its Subsidiaries
grants or licenses to third parties any right, title or interest with respect to
any Film Related Asset, any Film or any group of Films, as the same may be
amended, supplemented or otherwise modified from time to time.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any of its Subsidiaries shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
16
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means Base
Rate Loans or Euro-Dollar Loans or any combination of the foregoing.
"Loan Documents" means this Agreement, the Notes, the Holdings Agreement,
the Capital Call Agreement, the Subsidiary Guaranty and the Collateral
Documents.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(b).
"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received in connection with one or more related events by the Borrower or any of
its Subsidiaries under any insurance policy maintained by the Borrower or any of
its Subsidiaries covering casualty losses with respect to tangible real or
personal property or improvements or (ii) any award or other compensation with
respect to any condemnation of property (or any transfer or disposition of
property in lieu of condemnation) received by the Borrower or any of its
Subsidiaries, in either case only if the amount of such aggregate proceeds or
award or other compensation exceeds $10,000,000.
"Management Stock Incentive Plan" means the 1996 Management Stock Option
and Bonus Plan of Holdings as in effect on the date hereof.
"Xxxxxxx Employment Agreement" means the employment agreement between Xxxxx
X. Xxxxxxx and the Borrower as in effect on the date hereof.
"Material Adverse Effect" means (i) any material adverse effect upon the
assets or liabilities, or the business, financial position or results of
operations of the Borrower and its Subsidiaries, taken as a whole; (ii) prior to
the Closing Date, a material adverse effect on the ability of the Borrower or
any other Person to consummate the transactions contemplated hereby to occur on
the Closing Date; (iii) a material adverse effect on the ability of the Obligors
to perform their obligations under this Agreement and the Notes and the other
Loan Documents, taken as a whole, or (iv) an adverse effect on the rights and
remedies of the Agent and the Lenders under this Agreement and the Notes and the
other Loan Documents.
"Material Subsidiary" means at any date any Subsidiary of the Borrower,
other than (a) any such Subsidiary which has (i) aggregate assets with a fair
market value of less than $1,000,000 and (ii) annual revenues of less than
---
$1,000,000, in each case calculated on the basis of the latest financial
statements
17
delivered by the Borrower to the Lenders pursuant to Section 4.04(b),
5.01(a) or 5.01(b), as the case may be and (b) Seventeen Leasing Corporation.
"Maturity Date" means, (i) with respect to the Tranche A Loans, September
30, 2002, (ii) with respect to the Tranche B Loans, March 31, 2004, (iii) with
respect to the Revolving Loans, the Revolver Maturity Date, (iv) with respect to
the Swing Loans, the Swing Termination Date and (v) with respect to the Letters
of Credit, the Revolver Maturity Date (or, if any such day is not a Euro-Dollar
Business Day, the next succeeding Euro-Dollar Business Day).
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any Reduction Event, an amount
equal to the cash proceeds received by the Borrower or any of its Subsidiaries
from or in respect of such Reduction Event (including any cash proceeds received
as income or other proceeds of any noncash proceeds of any Asset Sale), less (x)
any expenses reasonably incurred by such Person in respect of such Reduction
Event (including, without limitation, if such Reduction Event constitutes the
issuance and sale of securities, underwriters' discounts or commissions and
expenses) and (y) if such Reduction Event is an Asset Sale, (i) the amount of
any Debt secured by a Lien on any asset disposed of in such Asset Sale and
discharged from the proceeds thereof and (ii) any taxes actually paid or to be
payable by such Person (as estimated by a senior financial or accounting officer
of the Borrower, giving effect to the overall tax position of the Borrower) in
respect of such Asset Sale.
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02(a).
"Notice of Interest Rate Election" has the meaning set forth in Section
2.08(a).
"Notice of Issuance" has the meaning set forth in Section 2.14(b).
"Obligor" means the Borrower and each Guarantor.
"Parent" means, with respect to any Lender, any Person controlling such
Lender.
18
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means, at any time, any employee benefit plan which is covered by
ERISA and in respect of which Holdings 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" has defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Borrower Pledge Agreement or any Guarantor
Pledge Agreement.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means the rate of interest publicly announced by Xxxxxx
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Profit Participation" means the amount, as customarily determined by the
Borrower, of all obligations (other than Residuals and Deferred Payments)
payable by the Borrower and/or its Subsidiaries as compensation for talent or to
producers and for similar services in connection with the development,
acquisition, production, financing, distribution, exhibition or exploitation of
Films or rights with respect thereto, the payment of which is contingent upon or
triggered by and payable only to the extent of the receipt by the Borrower or
any Subsidiary, as the case may be, of revenues from the exploitation of such
Film or such rights.
"Quarterly Dates" means each March 31, June 30, September 30 and December
31.
"Receivables Financing" means any receivables securitization program or
other type of accounts receivable financing transaction by a Person.
"Reduction Amount" means, (i) in respect of any Asset Sale, 100% of the Net
Cash Proceeds thereof, (ii) in respect of any incurrence by the Borrower or any
of its Subsidiaries of any Debt that constitutes a Reduction Event or the
19
receipt of Major Casualty Proceeds that constitutes a Reduction Event, 100% of
the Net Cash Proceeds thereof, (iii) in respect of any Holdings Debt Incurrence,
(x) to the extent that the aggregate amount of Net Cash Proceeds with respect to
such Holdings Debt Incurrence and all other Holdings Debt Incurrences
consummated prior to or contemporaneously therewith and on or prior to the
second anniversary of the Closing Date do not exceed $200,000,000, 50% of the
Net Cash Proceeds thereof and (y) in every other instance, 100% of the Net Cash
Proceeds thereof , (iv) in respect of Excess Cash Flow (a) for any of the 1997
Fiscal Year, 1998 Fiscal Year or 1999 Fiscal Year (any such Fiscal Year, an
"Early Fiscal Year"), 75% of the amount of Excess Cash Flow for such Early
Fiscal Year (such amount, the "Sweep Amount") but only if, and solely to the
extent that, the Sweep Amount for such Early Fiscal Year plus the positive
----
difference (if any) between (I) the Sweep Amount for each prior Early Fiscal
Year (if any) and (II) the aggregate principal amount of the Loans prepaid
pursuant to Section 2.04(d)(i)(B) (if any) in respect of such prior Early Fiscal
Years, exceeds $50,000,000 and (b) for any Fiscal Year thereafter, 75% of the
amount thereof, (v) in respect of any Equity Issuance Reduction Event made prior
to the Target Date, 75% of the Net Cash Proceeds, (vi) in respect of any Equity
Issuance Reduction Event made on or after the Target Date, 50% of the Net Cash
Proceeds thereof, (vii) in respect of any certification as to anticipated
reinvestment of Major Casualty Proceeds set forth in any Proceeds Certificate
being no longer true, 100% of the Net Cash Proceeds from the relevant receipt of
Major Casualty Proceeds not invested prior to such date to repair or replace
affected assets and (viii) in respect of receipt of Excess Licensing Proceeds,
100% of the amount thereof.
"Reduction Event" means (i) any Asset Sale, (ii) the incurrence of any Debt
by the Borrower or any of its Subsidiaries (other than Debt permitted under
Section 5.10), (iii) any Holdings Debt Incurrence, (iv) any Equity Issuance
Reduction Event, (v) receipt of Major Casualty Proceeds, unless, within 5
Domestic Business Days after receipt thereof, the Borrower shall have delivered
to the Agent a certificate (a "Proceeds Certificate") of the chief financial
officer or the chief accounting officer of the Borrower, certifying as to (x)
the aggregate amount of such Major Casualty Proceeds and (y) the fact that the
Borrower shall invest such Major Casualty Proceeds to repair or replace affected
assets with 180 days after receipt thereof, (vi) the first day on which any
certification made pursuant to any Proceeds Certificate shall cease to be true
and (vii) receipt of Excess Licensing Proceeds. The description of any
transaction as falling within the above definition does not affect any
limitation on such transaction imposed by Article 5 of this Agreement or any
rights of any Lender upon the occurrence of an Event of Default under Article 6
of this Agreement.
20
"Reference Lenders" means the principal London offices of Bank of America
National Trust and Savings Association, Societe Generale and Xxxxxx Guaranty
Trust Company of New York, and "Reference Lender" means any one of such
Reference Lenders.
"Refunded Swing Loans" has the meaning set forth in Section 2.01(e).
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.
"Residuals" means the amount, as reasonably determined by the Borrower, of
all obligations (other than Profit Participations and Deferred Payments) payable
by the Borrower or a Subsidiary pursuant to guild agreements or other collective
bargaining agreements in connection with the development, acquisition,
production, financing, distribution, exhibition or exploitation of Films or
rights with respect thereto.
"Responsible Officer" means any senior vice president of the Borrower, and
any more senior corporate officer of the Borrower, in any case appointed to such
office by the Board of Directors of the Borrower or any committee thereof.
"Required Lenders" means at any time Lenders having in the aggregate at
least 51% of the sum of (i) the Revolving Commitments at such time or, if the
Revolving Commitments shall have been terminated, the sum of (x) the aggregate
outstanding principal amount of the Revolving Loans at such time plus (y) the
Letter of Credit Liabilities at such time plus (ii) the aggregate outstanding
principal amount of the Term Loans at such time or, if no Term Loans are then
outstanding, the Term Commitments at such time.
"Restricted Payment" means (i) any dividend or other distribution on any
shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment by the Borrower or any of its
Subsidiaries on account of the purchase, redemption, retirement or acquisition
of (a) any shares of the Borrower's capital stock or (b) any option, warrant or
other right to acquire shares of the Borrower's capital stock (but not including
payments of principal, premium (if any) or interest made pursuant to the terms
of convertible debt securities prior to conversion).
21
"Revolver Maturity Date" means September 30, 2001 or such later date to
which the Revolver Maturity Date shall have been extended pursuant to Section
2.04(a)(ii) (or, if any such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day).
"Revolving Commitment" means, (i) with respect to each Revolving Lender
listed on the Commitment Schedule, the amount set forth opposite the name of
such Revolving Lender on the Commitment Schedule under the heading "Revolving
Commitments" and (ii) with respect to each Assignee that becomes a Revolving
Lender pursuant to Section 9.06(c), the amount of the Revolving Commitment
thereby assumed by it, in each case as such amount may be increased or reduced
from time to time pursuant to Section 9.06(c) or reduced from time to time
pursuant to Sections 2.04(d) and 2.07(b).
"Revolving Credit Period" means the period from and including the Closing
Date to but not including the Revolver Maturity Date.
"Revolving Exposure" means, with respect to each Revolving Lender, at any
time, an amount equal to the sum of (i) the aggregate principal amount of the
Revolving Loans of such Revolving Lender outstanding at such time, (ii) such
Revolving Lender's Revolving Percentage of the aggregate principal amount of the
Swing Loans outstanding at such time and (iii) such Revolving Lender's Letter of
Credit Liabilities at such time.
"Revolving Lender" means each Lender identified as a Revolving Lender on
the Commitment Schedule, each Assignee which becomes a Revolving Lender pursuant
to Section 9.06(c), and their respective successors.
"Revolving Loan" means a loan made by a Revolving Lender pursuant to
Section 2.01(c).
"Revolving Percentage" means, with respect to each Revolving Lender, at any
time, the percentage that such Revolving Lender's Revolving Commitment
constitutes of the aggregate amount of the Revolving Commitments at such time.
"Sale-Leaseback Transaction" means the sale by the Borrower or a Subsidiary
of all of its right, title and interest in and to a Film and the retention by,
or concurrent reconveyance to the Borrower or such Subsidiary of distribution
rights to such Film and an option to repurchase such Film for a nominal purchase
price, in consideration of periodic payments by the Borrower or such Subsidiary
of amounts having an aggregate discounted present value that is less than the
purchase price paid by the purchaser thereof; provided that, concurrently with
22
such reconveyance, the Borrower or such Subsidiary has defeased its obligation
to make the aggregate amount of such periodic payments by depositing in an
escrow account an amount at least equal to the discounted present value of such
amount.
"Security Agreement" means the security agreement substantially in the form
of Exhibit E hereto among the Obligors and the Agent entered into as of the
Closing Date, as amended from time to time.
"Seven Network" means Seven Network Limited ("SNL"), an Australian
corporation and, for so long as it is a wholly-owned subsidiary of SNL,
Miltonstar Pty Ltd., an Australian corporation, and their respective successors.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Single Purpose Subsidiary" means at any date any Subsidiary of the
Borrower (other than a Foreign Subsidiary) (i) that has been established for the
sole purpose of, and does not engage in any business or conduct any activities
other than, the development, production, financing, acquisition, distribution,
exploitation of any one Film or slate of Films (other than Films that are
Library Films determined for this purpose solely at the time of transfer thereof
to such Subsidiary) or any Film Related Asset and (ii) no Debt of which
Subsidiary is Guaranteed or otherwise supported by the Borrower or any other
Subsidiary (other than any other Single Purpose Subsidiary) or subjects any
asset of the Borrower or any other Subsidiary (other than any other Single
Purpose Subsidiary) directly or indirectly, contingently or otherwise, to the
satisfaction thereof.
"Specified Non-Cash Charges" means any non-cash charges with respect to
stock options and "bonus interests", in each case granted pursuant to the
Management Stock Incentive Plan or with respect to stock issued to Xxxxx X.
Xxxxxxx under the Xxxxxxx Employment Agreement.
"Stock Purchase Agreement" means the Stock Purchase Agreement dated as of
July 16, 1996 by and among the Borrower, Consortium de Realisation, MGM Holdings
Corporation, MGM Group Holdings Corporation and the Borrower.
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
23
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"Subsidiary Guaranty" means the subsidiary guaranty agreement substantially
in the form of Exhibit F hereto between each Guarantor party thereto and the
Agent entered into as of the Closing Date, as amended from time to time.
"Swing Credit Period" means the period from and including the first
Domestic Business Day after the Closing Date to but not including the Swing
Termination Date.
"Swing Lender" means Xxxxxx Guaranty Trust Company of New York, in its
capacity as the Swing Lender under the swing loan facility described in Section
2.01(d), and its successors in such capacity.
"Swing Loan" means a Loan made by the Swing Lender pursuant to Section
2.01(d).
"Swing Loan Commitment" means $10,000,000 or, if less, the aggregate amount
of the Revolving Commitments.
"Swing Termination Date" means the earlier of (i) August 31, 2001 or such
later date to which the Swing Termination Date shall have been extended pursuant
to Section 2.04(a)(ii) (or, if such day is not a Domestic Business Day, the next
preceding Domestic Business Day) and (ii) the date of termination of the
Revolving Commitments in their entirety.
"Swing Loan Refund Amount" has the meaning set forth in Section 2.01(e).
"Syndication Date" means the earlier of (i) the 45th day after the Closing
Date and (ii) the date on which the Agent and the Arranger determine, in their
sole discretion but after consultation with the Lenders party hereto on the date
hereof (and so notifies the Borrower), that the primary syndication and
resulting addition of institutions as "Lenders" pursuant to Section 9.06 shall
have been completed.
"Target Date" means the first date on which the Leverage Ratio (determined,
for purposes hereof, without reference to the parenthetical set forth in clause
(ii) of the definition of Leverage Ratio) at the last day of each of the two
Fiscal Quarters most recently ended on or prior to such date does not exceed
2.5:1.
24
"Temporary Cash Investment" means any Investment in (i) direct obligations
of the United States or any agency thereof, or obligations guaranteed by the
United States or any agency thereof, (ii) commercial paper rated at least A-2 by
Standard & Poor's Rating Group or P-2 by Xxxxx'x Investors Service, Inc., (iii)
time deposits with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company which is organized
under the laws of the United States or any state thereof and has capital,
surplus and undivided profits aggregating at least $500,000,000 or (iv)
repurchase agreements with respect to securities described in clause (i) above
entered into with an office of any bank or trust company meeting the criteria
specified in clause (iii) above, provided in each case that such Investment
matures within one year from the date of acquisition thereof by the Borrower or
a Subsidiary.
"Term Lender" means a Tranche A Lender or a Tranche B Lender.
"Term Commitment" means a Tranche A Commitment or a Tranche B Commitment.
"Term Loan" means a Tranche A Loan or a Tranche B Loan.
"Total Borrowed Funds" means at any date the aggregate amount of Debt of
Holdings and its Consolidated Subsidiaries described in clauses (i) and (ii) and
(iv) of the definition of Debt (but excluding (a) any obligations under Sale-
Leaseback Transactions which constitute Debt under clause (iv) of the definition
thereof, (b) Debt of any Single Purpose Subsidiary, so long as such Debt
complies with the provisions of clause (ii) of the definition of Single Purpose
Subsidiary and (c) the Holdings Management Notes), determined on a consolidated
basis at such date.
"Tracinda" means Tracinda Corporation, a Nevada corporation, and its
successors.
"Tranche A Commitment" means, with respect to each Tranche A Lender listed
on the Commitment Schedule, the amount set forth opposite the name of such
Tranche A Lender on the Commitment Schedule under the heading "Tranche A
Commitments".
"Tranche A Lender" means each Lender identified as a Tranche A Lender on
the Commitment Schedule, each Assignee which becomes a Tranche A Lender pursuant
to Section 9.06(c), and their respective successors.
25
"Tranche A Loan" means a loan made by a Tranche A Lender pursuant to
Section 2.01(a).
"Tranche B Commitment" means, with respect to each Tranche B Lender listed
on the Commitment Schedule, the amount set forth opposite the name of such
Tranche B Lender on the Commitment Schedule under the heading "Tranche B
Commitments".
"Tranche B Lender" means each Lender identified as a Tranche B Lender on
the Commitment Schedule, each Assignee which becomes a Tranche B Lender pursuant
to Section 9.06(c), and their respective successors.
"Tranche B Loan" means a loan made by a Tranche B Lender pursuant to
Section 2.01(b).
"Tranche B Prepayment Notice" has the meaning set forth in Section
2.04(f)(i).
"Tranche B Unscheduled Prepayment" has the meaning set forth in Section
2.04(f)(i).
"Transaction Documents" means the Stock Purchase Agreement, including the
exhibits and schedules thereto and all agreements, documents and instruments
executed and delivered pursuant thereto or in connection therewith.
"Type" has the meaning set forth in Section 1.03.
"UIP" means United International Pictures B.V., a Netherlands entity, and
its successors.
"Unscheduled Prepayment Date" has the meaning set forth in Section
2.04(f)(i).
"United States" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
"WHV" means Warner Home Video, a division of Time Warner Entertainment,
L.P., and its successors.
"WHV Agreement" means the Video Rights Agreement between the Borrower and
WHV, dated as of November 1, 1990, as amended up to but
26
excluding the date hereof, a true and correct copy of which as in effect on the
date hereof has been delivered to the Agent.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified in the immediately succeeding sentence or otherwise herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with generally accepted accounting
principles as in effect from time to time, applied on a basis consistent (except
for changes concurred in by Holdings' independent public accountants) with the
most recent audited consolidated financial statements of Holdings and its
Consolidated Subsidiaries delivered to the Lenders; provided that, if the
Borrower notifies the Agent that the Borrower wishes to amend any covenant in
Article 5 or any related definition to eliminate the effect of any change in
generally accepted accounting principles on the operation of such covenant (or
if the Agent notifies the Borrower that the Required Lenders wish to amend
Article 5 any related definition for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant change
in generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant or definition is amended in a manner
satisfactory to the Borrower and the Required Lenders.
Section 1.03. Classes and Types of Loans and Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more Lenders to be made
to the Borrower pursuant to Article 2 on the same date, all of which Loans are
of the same Class and Type (subject to Article 8) and, except in the case of
Base Rate Loans, have the same initial Interest Period. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan (or of a
Commitment to make such a Loan or of a Borrowing comprised of such Loans or of a
Group of such Loans) refers to the determination whether such Loan is a Tranche
A Loan, Tranche B Loan, a Revolving Loan or a Swing Loan, each of which
constitutes a Class. The "Type" of a Loan refers to the determination whether
such Loan is a Euro-Dollar Loan or a Base Rate Loan. Identification of a Loan
(or a Borrowing) by both Class and Type (e.g., a "Tranche B Euro-Dollar Loan")
indicates that such Loan is both a Tranche B Loan and a Euro-Dollar Loan (or
that such Borrowing or Group of Loans is comprised of such Loans).
27
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. (a) Tranche A Loans. Each Tranche A
Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make a single loan to the Borrower on the Closing Date in an
aggregate amount not to exceed such Tranche A Lender's Tranche A Commitment.
The Borrowing pursuant to this subsection shall be made from the several Tranche
A Lenders ratably in proportion to their respective Tranche A Commitments;
provided, that the failure of any Tranche A Lender to fulfill its obligation to
make a Tranche A Loan on the terms and conditions set forth in this Agreement
shall not excuse any other Tranche A Lender from its obligation to make a
Tranche A Loan in an amount up to the amount of such Tranche A Lender's Tranche
A Commitment. Loans made pursuant to this subsection are not revolving in
nature and amounts of such loans repaid or prepaid may not be reborrowed.
(b) Tranche B Loans. Each Tranche B Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make a single loan to the
Borrower on the Closing Date in an aggregate amount not to exceed such Tranche B
Lender's Tranche B Commitment. The Borrowing pursuant to this subsection shall
be made from the several Tranche B Lenders ratably in proportion to their
respective Tranche B Commitments; provided, that the failure of any Tranche B
Lender to fulfill its obligation to make a Tranche B Loan on the terms and
conditions set forth in this Agreement shall not excuse any other Tranche B
Lender from its obligation to make a Tranche B Loan in an amount up to the
amount of such Tranche B Lender's Tranche B Commitment. Loans made pursuant to
this subsection are not revolving in nature and amounts of such loans repaid or
prepaid may not be reborrowed.
(c) Revolving Loans. During the Revolving Credit Period, each Revolving
Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make revolving loans to the Borrower from time to time in amounts
such that the Revolving Exposure of such Revolving Lender at such time shall not
exceed the amount of its Revolving Commitment at such time. Each Borrowing under
this subsection shall be in an aggregate principal amount of $5,000,000 or any
larger multiple of $1,000,000 (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.02(c)) and shall be made
from the several Revolving Lenders ratably in proportion to their respective
Revolving Commitments; provided, that the failure of any Revolving Lender at any
time to fulfill its obligation to make a Revolving Loan on the terms and
conditions set forth in this Agreement shall not in itself excuse any other
28
Revolving Lender from its obligation to make a Revolving Loan. Within
the foregoing limits, the Borrower may borrow under this subsection, prepay
Revolving Loans to the extent permitted by Section 2.10 and reborrow at any time
during the Revolving Credit Period under this subsection.
(d) Swing Loans. During the Swing Credit Period, the Swing Lender agrees,
on the terms and conditions set forth in this Agreement, to make loans to the
Borrower pursuant to this subsection from time to time in amounts such that at
any time (i) the aggregate principal amount of Swing Loans outstanding at such
time does not exceed the Swing Loan Commitment and (ii) the aggregate Revolving
Exposure at such time does not exceed the aggregate amount of the Revolving
Commitments at such time. Each Borrowing under this subsection shall be in an
aggregate principal amount of $1,000,000 or any larger multiple thereof (except
that any such Borrowing may be in the aggregate amount of the Swing Loan
Commitment available in accordance with the immediately preceding sentence).
Within the foregoing limits, the Borrower may borrow under this subsection,
prepay Swing Loans to the extent permitted by Section 2.10 and reborrow at any
time during the Swing Credit Period under this subsection.
(e) Conversion of Swing Loans to Revolving Loans. The Swing Lender, at any
time and from time to time in its sole and absolute discretion may, on behalf of
the Borrower (which hereby irrevocably directs the Swing Lender to act on its
behalf), on notice given by the Swing Lender no later than 10:30 A.M. (New York
City time) on the proposed date of Borrowing for the Revolving Loans referred to
below, request each Revolving Lender to make, and each Revolving Lender hereby
agrees to make, a Revolving Loan, in an amount (such amount with respect to each
Lender, its "Swing Loan Refund Amount") equal to such Revolving Lender's
Revolving Percentage of the aggregate principal amount of the Swing Loans (the
"Refunded Swing Loans") outstanding on the date of such notice and with respect
to which such notice relates, to repay the Swing Lender. Unless any of the
events described in clause (g) or (h) of Section 6.01 with respect to the
Borrower shall have occurred and be continuing (in which case the procedures of
Section 2.01(f) shall apply), each Revolving Lender shall make such Revolving
Loan available to the Agent at its address specified in or pursuant to Section
9.01 in immediately available funds, not later than 12:00 Noon (New York City
time), on the date specified in such notice. Each such Revolving Loan shall
initially be made as a Base Rate Loan. The Agent shall pay the proceeds of such
Revolving Loans to the Swing Lender, which shall immediately apply such proceeds
to repay Refunded Swing Loans. Effective on the day such Revolving Loans are
made, the portion of the Swing Loans so paid shall no longer be outstanding as
Swing Loans, shall no longer be due as Swing Loans under the Note held by the
Swing Lender, and shall be due as Revolving Loans under the
29
respective Notes issued to the Revolving Lenders (including the Swing Lender) in
accordance with their respective Revolving Percentages.
(f) Purchase of Participations in Swing Loans. If prior to the time
Revolving Loans would have otherwise been made pursuant to Section 2.01(e), one
of the events described in clause (g) or (h) of Section 6.01 with respect to the
Borrower shall have occurred and be continuing, each Revolving Lender shall, on
the date such Revolving Loans were to have been made pursuant to the notice
referred to in Section 2.01(e) (the "Refunding Date"), purchase an undivided
participating interest in the Swing Loans in an amount equal to such Revolving
Lender's Swing Loan Refund Amount. On the Refunding Date, each Revolving Lender
shall transfer to the Swing Lender, in immediately available funds, such
Lender's Swing Loan Refund Amount, and upon receipt thereof the Swing Lender
shall deliver to such Revolving Lender a Swing Loan participation certificate
dated the date of the Swing Lender's receipt of such funds and in the Swing Loan
Refund Amount of such Revolving Lender.
(g) Payments on Participated Swing Loans. Whenever, at any time after the
Swing Lender has received from any Revolving Lender such Revolving Lender's
Swing Loan Refund Amount pursuant to Section 2.01(f), the Swing Lender receives
any payment on account of the Swing Loans in which the Revolving Lenders have
purchased participations pursuant to Section 2.01(f), the Swing Lender will
promptly distribute to each such Revolving Lender its ratable share (determined
on the basis of the Swing Loan Refund Amounts of all of the Revolving Lenders)
of such payment (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Revolving Lender's participating
interest was outstanding and funded); provided, however, that in the event that
such payment received by the Swing Lender is required to be returned, such
Revolving Lender will return to the Swing Lender any portion thereof previously
distributed to it by the Swing Lender.
(h) Obligations to Refund or Purchase Participations in Swing Loans
Absolute. Each Revolving Lender's obligation to transfer the amount of a
Revolving Loan to the Swing Lender as provided in Section 2.01(e) or to purchase
a participating interest pursuant to Section 2.01(f) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Revolving Lender, the Borrower or any other Person may have against
the Swing Lender or any other Person, (ii) the occurrence or continuance of a
Default or an Event of Default or the termination or reduction of any
Commitments, (iii) any adverse change in the condition (financial or otherwise)
of the Borrower or any other Person, (iv) any breach of this Agreement by the
Borrower, any other
30
Lender or any other Person or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
Section 2.02. Method of Borrowing. (a) The Borrower shall give the Agent
notice (a "Notice of Borrowing") (x) not later than 12:00 Noon (New York City
time) on (1) the date of each Base Rate Borrowing (other than a Swing Borrowing
or a Revolving Borrowing the proceeds of which are to be applied to repay
Refunded Swing Loans) and (2) the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing and (y) not later than 12:00 Noon (New York City time) on
the date of each Swing Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to bear interest
initially at a rate based on the Base Rate or at a Euro-Dollar Rate;
provided that (x) no Loans comprising any Borrowing made prior to the
Syndication Date shall be specified to bear interest at a Euro-Dollar Rate
and (y) all Swing Loans shall bear interest at a rate based on the Base
Rate; and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
In no event shall (i) the total number of Groups of Loans at any one time
outstanding exceed 15 or (ii) the total number of Swing Borrowings made in any
one calendar week exceed 3.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify
each Lender of the contents thereof and of such Lender's ratable share of such
Borrowing (if any) and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing (or, solely in the case of a Swing Borrowing, 1:00 P.M. (New York City
time)), each Lender (or, in the case of a Swing Borrowing, the Swing Lender)
shall make available its ratable share of such Borrowing, in Federal or other
funds immediately available in New York City, to the Agent at its address
31
referred to in Section 9.01. Unless the Agent determines that any applicable
condition specified in Article 3 has not been satisfied, the Agent will make the
funds so received from the Lenders available to the Borrower by crediting an
account of the Borrower maintained with the Agent and specified by the Borrower
prior to the date of such Borrowing or, if no such account has been specified,
at the Agent's aforesaid address.
(d) Unless the Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the Agent such
Lender's share of such Borrowing, the Agent may assume that such Lender has made
such share available to the Agent on the date of such Borrowing in accordance
with subsection (c) of this Section and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such share
available to the Agent, such Lender and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i) in the case
of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section 2.05 and (ii) in
the case of such Lender, the Federal Funds Rate. If such Lender shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Loan included in such Borrowing for purposes of this Agreement.
Section 2.03. Notes. (a) The Loans of each Lender shall be evidenced by a
single Note payable to the order of such Lender for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid principal
amount of such Lender's Loans.
(b) Each Lender may, by notice to the Borrower and the Agent, request that
its Loans of a particular Type or Class be evidenced by a separate Note in an
amount equal to the aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
Type or Class. Each reference in this Agreement to the "Note" of such Lender
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Lender's Note pursuant to Section 3.01, the Agent
shall forward such Note to such Lender. Each Lender shall record the date,
amount, Type and Class of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and may, if such
32
Lender so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding;
provided that the failure of any Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Notes or any other Loan Document. Each Lender is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
Section 2.04. Maturity of Loans; Mandatory Prepayments; Certain Commitment
Reductions. (a)(i) Final Maturity. Each Loan of each Class shall mature, and the
outstanding principal amount thereof shall be due and payable (together with
accrued interest thereon), on the Maturity Date for such Class of Loans.
(ii) Extension of Revolving Credit Period and Swing Credit Period. The
Revolver Maturity Date and the Swing Termination Date may each be extended, in
the manner set forth in this subsection, on September 30, 2001 and on the first
anniversary of such date (an "Extension Date") for a period of one year after
the then current Revolver Maturity Date and Swing Termination Date; provided
that the Swing Termination Date shall not be extended on any Extension Date
unless the Revolver Maturity Date shall also be extended, in the manner set
forth herein, on such Extension Date. If the Borrower wishes to request an
extension of the Revolver Maturity Date and Swing Termination Date on any
Extension Date, it shall give written notice to that effect to the Agent not
less than 90 nor more than 120 days prior to such Extension Date, whereupon the
Agent shall notify each of the Revolving Lenders and the Swing Lender of such
notice. Each Revolving Lender will respond to such request, whether
affirmatively or negatively, within 30 days; provided that any Lender which does
--------
not respond to such request within such period shall be deemed to have responded
to such request negatively. If all Revolving Lenders and the Swing Lender
respond affirmatively, then, subject to receipt by the Agent prior to such
Extension Date of counterparts of an Extension Agreement in substantially the
form of Exhibit K duly completed and signed by all of the parties hereto, the
Revolver Maturity Date and the Swing Termination Date shall each be extended,
effective on such Extension Date, for a period of one year to the date stated in
such Extension Agreement.
(b) Tranche A Scheduled Amortization. In addition, the Borrower shall
repay, and there shall become due and payable, on each date set forth below, an
aggregate principal amount of the Tranche A Loans equal to the amount set forth
below opposite such date (as such amount may be reduced pursuant to Section
2.04(e) and Section 2.10(d)):
33
Date Amount
---- ------
12/31/99 $12,500,000
3/31/00 $12,500,000
6/30/00 $12,500,000
9/30/00 $12,500,000
12/31/00 $18,750,000
3/31/01 $18,750,000
6/30/01 $18,750,000
9/30/01 $18,750,000
12/31/01 $31,250,000
3/31/02 $31,250,000
6/30/02 $31,250,000
9/30/02 $31,250,000
(c) Tranche B Scheduled Amortization. In addition, the Borrower shall
repay, and there shall become due and payable, on each date set forth below an
aggregate principal amount of the Tranche B Loans equal to the amount set forth
below opposite such date (as such amount may be reduced pursuant to Section
2.04(e) and Section 2.10(d)):
Date Amount
---- ------
12/31/96 $ 250,000
3/31/97 $ 250,000
6/30/97 $ 250,000
9/30/97 $ 250,000
12/31/97 $ 250,000
3/31/98 $ 250,000
6/30/98 $ 250,000
9/30/98 $ 250,000
12/31/98 $ 250,000
3/31/99 $ 250,000
6/30/99 $ 250,000
9/30/99 $ 250,000
12/31/99 $ 250,000
3/31/00 $ 250,000
6/30/00 $ 250,000
9/30/00 $ 250,000
12/31/00 $ 1,750,000
3/31/01 $ 1,750,000
6/30/01 $ 1,750,000
34
9/30/01 $ 1,750,000
12/31/01 $ 1,750,000
3/31/02 $ 1,750,000
6/30/02 $ 1,750,000
9/30/02 $ 1,750,000
12/31/02 $10,250,000
3/31/03 $10,250,000
6/30/03 $10,250,000
9/30/03 $10,250,000
12/31/03 $20,500,000
3/31/04 $20,500,000
(d) Contingent Amortization and Revolving Commitments Reduction. (i) In
addition, the Loans shall be prepaid and the Revolving Commitments shall be
reduced in the following amounts:
(A) in the event that any Reduction Event shall occur, an amount
equal to the Reduction Amount with respect thereto; and
(B) an amount, for each Fiscal Year ending after December 31,
1996, equal to the Reduction Amount of Excess Cash Flow for such Fiscal
Year.
(ii) Subject to Section 2.04(f) in the case of a prepayment of the
Term Loans in part, the prepayments and reductions required by clause (i)(A) of
this subsection shall be made forthwith upon receipt by the Borrower or any of
its Subsidiaries, as the case may be, of such Net Cash Proceeds (or, solely in
the case of an incurrence of Holdings Debt, upon receipt by Holdings of such Net
Cash Proceeds); provided that if the Reduction Amount in respect of any
Reduction Event is less than $1,000,000, such prepayment or reduction shall be
made upon receipt of proceeds such that, together with all other such amounts
not previously applied, the Reduction Amount is equal to at least $1,000,000 and
provided further, that, at the election of the Borrower, if the amount of any
such prepayment to be made exceeds the amount of Base Rate Loans then
outstanding, such excess amount shall be deposited in escrow pursuant to
arrangements in form and substance satisfactory to the Agent, and such excess
shall not be required to be prepaid until the last day of the Interest Periods
relating to outstanding Euro-Dollar Loans in an aggregate principal amount equal
to or greater than such excess amount unless an Event of Default has occurred
and is continuing or the Required Lenders otherwise determine in their sole
discretion and so notify the Borrower.
35
Subject to Section 2.04(f), the prepayments and reductions required by
clause (i)(B) of this subsection shall be made on or before the 105th day
after the end of the related fiscal year. The Borrower shall give the Agent
at least five Euro-Dollar Business Days' notice of each prepayment required
pursuant to this subsection.
(e) Application of Prepayments, Repayments and Revolving Commitment
Reductions. (i) The prepayments and reductions required pursuant to subsection
(d) shall be effected in the following order: first, the Borrower shall prepay
the Term Loans until the Term Loans have been paid in full (subject to Section
2.04(f) in the case of a prepayment of the Term Loans in part), second, the
Revolving Commitments shall be reduced and third, solely if such prepayment is
to be made after the Revolving Credit Period, the Borrower shall prepay
Revolving Loans until the Revolving Loans have been paid in full.
(ii) Subject to Section 2.04(f), each prepayment of the Term Loans
made by the Borrower pursuant to subsection (d) shall be allocated pro rata
on the basis of principal amount between the then outstanding Tranche A
Loans and Tranche B Loans.
(iii) If on the date of any reduction of the Revolving Commitments
pursuant to subsection (d) the aggregate Revolving Exposure on such date
exceeds the aggregate Revolving Commitments on such date, the Borrower
shall apply an amount equal to such excess to prepay the Revolving Credit
Loans or Swing Loans (or both) and/or cash collateralize Letters of Credit
so that after giving effect thereto the Revolving Exposure of each
Revolving Lender does not exceed its Revolving Credit Commitment as then
reduced. Amounts to be applied pursuant to the preceding sentence shall be
applied first to repay the principal amount of the Swing Loans then
outstanding until all such Swing Loans shall have been repaid in full,
second to repay the principal amount of the Revolving Credit Loans then
outstanding until all such Revolving Credit Loans shall have been repaid in
full and third if any excess then remains such excess shall be deposited in
the Cash Collateral Account established pursuant to Section 6(C) of the
Security Agreement to be held, applied or released for application as
provided in the Security Agreement. In determining Revolving Exposure for
purposes of this clause (iii), Letter of Credit Liabilities shall be
reduced to the extent that they are cash collateralized as contemplated by
the previous sentence.
(iv) Subject to clause (ii) of this subsection, each repayment or
prepayment of Loans of any Class made by the Borrower pursuant to this
Section shall be applied to such Group or Groups of Loans of such Class as
the Borrower may designate in the applicable Notice of Borrowing or Notice
of Interest Rate
36
Election (or, failing such designation, as determined by the Agent), and,
except as provided in subsection (f) with respect to Tranche B Loans, shall
be applied to repay ratably the Loans of such Class of the several Lenders
included in such Group or Groups.
(v) The amount of any prepayment of the Term Loans made by the
Borrower pursuant to subsection (d) shall be applied to reduce the amount
of subsequent scheduled repayments of the Term Loans pursuant to
subsections (b) or (c) above, as the case may be, in inverse order of
maturity.
(f) Option of Tranche B Lenders Not to Accept Prepayments. (i) If (x) at
least one Domestic Business Day prior to any date (an "Unscheduled Prepayment
Date") on which any prepayment of the Tranche B Loans (a "Tranche B Unscheduled
Prepayment"), other than a prepayment of the Tranche B Loans in whole, would,
but for the provisions of this subsection (f), otherwise have been made pursuant
to Section 2.04(d) or 2.10(a), the Borrower shall have delivered a notice
conforming to the requirements of subsection (f)(ii) (a "Tranche B Prepayment
Notice") to the Agent and (y) on or prior to such Unscheduled Prepayment Date,
the Borrower shall have deposited in the Tranche B Prepayment Account
established pursuant to Section 6(A) of the Security Agreement an amount equal
to the principal amount that would have been payable by the Borrower pursuant to
Section 2.04(d) or 2.10(a) on such Unscheduled Prepayment Date in respect of
such Tranche B Unscheduled Prepayment, then such Tranche B Unscheduled
Prepayment shall not occur on such Unscheduled Payment Date but shall instead be
deferred as hereinafter provided in this subsection (f). Upon receipt of any
Tranche B Prepayment Notice, the Agent shall promptly notify each Tranche B
Lender of the contents hereof.
(ii) Each Tranche B Prepayment Notice shall be in writing, shall
refer to this Section 2.04(f) and shall (w) set forth the amount of the
Tranche B Unscheduled Prepayment and the prepayment that the applicable
Tranche B Lender will be entitled to receive if it accepts prepayment of
its Tranche B Loans in accordance with this subsection, (x) contain an
offer to prepay on a specified date (each such date, a "Deferred Tranche B
Unscheduled Prepayment Date"), which shall not be less than 20 days or more
than 25 days after the date of such Tranche B Prepayment Notice, the
Tranche B Loans of such Tranche B Lender by an aggregate principal amount
equal to such Tranche B Lender's ratable share of such Tranche B
Unscheduled Prepayment (determined by reference to the outstanding
principal amount of such Lender's Tranche B Loan as a proportion of the
aggregate outstanding principal amount of the Tranche B Loans of all of the
Tranche B Lenders), (y) request such Tranche B Lender to notify the
Borrower and the Agent in writing, no later than the fifth Domestic
Business Day prior to
37
the Deferred Tranche B Unscheduled Prepayment Date, of such Tranche B
Lender's acceptance or rejection (in each case, in whole and not in part)
of such offer of prepayment and (z) inform such Tranche B Lender that the
failure by such Tranche B Lender to reject such offer in writing on or
before the fifth day prior to such Deferred Tranche B Unscheduled
Prepayment Date shall be deemed an acceptance of such prepayment offer.
Each Tranche B Prepayment Notice shall be given by telecopy, confirmed hand
delivery or overnight courier service, in each case addressed to the Agent
and each Tranche B Lender as provided in Section 9.01.
(iii) On each Deferred Tranche B Unscheduled Prepayment Date, the
Agent shall withdraw from the Tranche B Prepayment Account the aggregate
amount required to prepay the Tranche B Loans of each of the Tranche B
Lenders that shall have accepted (or been deemed to have accepted)
prepayment in accordance with the related Tranche B Prepayment Notice
(each, an "Accepting Tranche B Lender") and shall cause such amount to be
applied on behalf of the Borrower to prepay the outstanding Tranche B Loans
of the Accepting Tranche B Lenders.
(iv) Any amount remaining in the Tranche B Prepayment Account on any
Deferred Tranche B Unscheduled Prepayment Date after giving effect to the
prepayments required by clause (iii) above (exclusive of any interest or
profits with respect to amounts held in the Tranche B Prepayment Account)
shall be withdrawn and applied by the Agent to prepay the principal of (x)
the then outstanding Tranche A Loans and (y) the then outstanding Tranche B
Loans of the Accepting Tranche B Lenders, ratably in proportion to their
then outstanding principal amounts and/or to reduce the Revolving Credit
Commitments, all in accordance with subsection (d) above or Section
2.10(a), as applicable.
Section 2.05. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Loan is made to but excluding the date it becomes
due or is converted into a Euro-Dollar Loan, at a rate per annum equal to
the sum of (x) the Base Rate Margin plus (y) the Base Rate for such day.
Such interest shall be payable quarterly in arrears on each Quarterly Date.
Any overdue principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period
applicable thereto, from and including the first day thereof to but
excluding the last day
38
thereof, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof and, with respect to the principal
amount of any Euro-Dollar Loan converted to a Base Rate Loan, on each date a
Euro-Dollar Loan is so converted.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The Adjusted London Interbank Offered Rate shall be adjusted automatically on
and as of the effective date of any change in the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits in dollars are offered to each of
the Reference Lenders in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Reference Lender to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member Lender of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents).
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such
day plus the quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which one day (or,
if such amount due remains unpaid more than three Euro-Dollar Business Days,
then for
39
such other period of time not longer than three months as the Agent may
select) deposits in dollars in an amount approximately equal to such overdue
payment due to each of the Reference Lenders are offered to such Reference
Lender in the London interbank market for the applicable period determined as
provided above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day) and (ii) the sum of 2% plus the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Loan at
the date such payment was due.
(d) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Lenders of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(e) Each Reference Lender agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference
Lender does not furnish a timely quotation, the Agent shall determine the
relevant interest rate on the basis of the quotation or quotations furnished by
the remaining Reference Lender or Lenders or, if none of such quotations is
available on a timely basis, the provisions of Section 8.01 shall apply.
Section 2.06. Fees. (a) During the Revolving Credit Period, the Borrower
shall pay to the Agent for the account of each Revolving Lender a commitment fee
at the Commitment Fee Rate (determined daily in accordance with the Pricing
Schedule) on the daily amount by which such Revolving Lender's Revolving
Commitment exceeds the sum of (x) the aggregate outstanding principal amount of
its Revolving Loans and (y) its Letter of Credit Liabilities. Such commitment
fee shall accrue from and including the Effective Date to but excluding the date
of termination of the Revolving Commitments in their entirety, and shall be
payable quarterly in arrears on each Quarterly Date and on the date of
termination of the Revolving Commitments in their entirety.
(b) The Borrower shall pay to the Agent (i) for the account of the
Revolving Lenders ratably in proportion to their Revolving Commitments a letter
of credit fee accruing daily on the aggregate amount then available for drawing
under all Letters of Credit at the Letter of Credit Fee Rate (determined in
accordance with the Pricing Schedule) and (ii) for the account of each L/C
Issuer a letter of credit fronting fee accruing daily on the aggregate amount
then available for drawing under all Letters of Credit issued by such L/C Issuer
at a rate per annum equal to 1/4 of 1%.
40
(c) Accrued fees under subsections (a) and (b) above shall be payable
quarterly in arrears on each March 31, June 30, September 30 and December 31 and
on the date of termination of the Revolving Commitments in their entirety (and,
if later, the date on which the aggregate Letter of Credit Liabilities shall
have been reduced to $0).
Section 2.07. Optional Termination or Reduction of Commitments. (a) Term
Commitments. Prior to the Closing Date the Borrower may, upon at least three
Domestic Business Days' notice to the Agent, (i) terminate the Term Commitments
of either Class or (ii) ratably reduce from time to time by an aggregate amount
of $5,000,000 or a larger multiple of $1,000,000, the aggregate amount of the
Term Commitments of either Class.
(b) During the Revolving Credit Period the Borrower may, upon at least
three Domestic Business Days' notice to the Agent, (i) terminate the Revolving
Commitments at any time, if no Revolving Loans, no Swing Loans or Letter of
Credit Liabilities are outstanding at such time or (ii) ratably reduce from time
to time by an aggregate amount of $5,000,000 or a larger multiple of $1,000,000,
the aggregate amount of the Revolving Commitments in excess of the aggregate
Revolving Exposure at such time.
Section 2.08. Method of Electing Interest Rates. (a) The Loans included
in each Borrowing shall initially be of the Type specified by the Borrower in
the applicable Notice of Borrowing, subject to the limitations set forth in
Section 2.02. Thereafter, the Borrower may from time to time elect to change or
continue the Type of Loans in each Group of Loans (other than any Group of Loans
which are Swing Loans), subject in each case to the provisions of Article 8, as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day;
provided that no Base Rate Loans shall be converted to Euro-Dollar Loans
(x) at any time prior to the Syndication Date or (y) if at the time such
conversion is to be effective, an Event of Default has occurred and is
continuing; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans as of any Domestic Business Day or to
continue such Loans as Euro-Dollar Loans for an additional Interest Period
as of any Euro-Dollar Business Day, subject to Section 2.12 in the case of
any such conversion or continuation effective on any day other than the
last day of the then current Interest Period applicable to such Loans;
provided that no Euro-Dollar Loans shall be continued as
41
Euro-Dollar Loans if at the time such continuation is to be effective, an
Event of Default has occurred and is continuing.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent not later than 12:00 Noon (New York City time) on
the third Euro-Dollar Business Day before the conversion or continuation
selected in such notice is to be effective. A Notice of Interest Rate Election
may, if it so specifies, apply to only a portion of the aggregate principal
amount of the relevant Group of Loans; provided that (i) such portion is
allocated ratably among the Loans comprising such Group and (ii) the portion to
which such Notice applies, and the remaining portion to which it does not apply,
are each $5,000,000 or any larger multiple of $1,000,000. If no Notice of
Interest Election is timely received prior to the end of an Interest Period for
any Group of Loans, the Borrower shall be deemed to have elected that such Group
of Loans be converted to Base Rate Loans as of the last day of such Interest
Period. In no event shall the total number of Groups of Loans at any time
outstanding exceed 15.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, subject to the provisos set forth in
clauses (i) and (ii) of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the new
Type of Loans and, if the Loans being converted are to be Euro-Dollar
Loans, the duration of the next succeeding Interest Period applicable
thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the Borrower
pursuant to subsection (a) above, the Agent shall promptly notify each Lender of
the contents thereof and such notice shall not thereafter be revocable by the
Borrower.
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(d) An election by the Borrower to change or continue the rate of interest
applicable to any Group of Loans pursuant to this Section shall not constitute a
"Borrowing" subject to the provisions of Section 3.02.
Section 2.09. Mandatory Termination of Commitments. (a) Term Commitments.
The Term Commitments of each Class shall terminate at the close of business on
the Closing Date.
(b) Revolving Commitments. The Revolving Commitments shall terminate on
the Revolver Maturity Date.
(c) Swing Loan Commitment. The Swing Loan Commitment shall terminate on
the Swing Termination Date.
Section 2.10. Optional Prepayments. (a) Subject, in the case of any
Borrowing of Euro-Dollar Loans to Section 2.12 and in the case of any Borrowing
of Tranche B Loans to Section 2.04(f), the Borrower may, upon at least one
Domestic Business Day's notice to the Agent, prepay any Group of Base Rate Loans
or upon at least three Euro-Dollar Business Days' notice to the Agent, prepay
any Group of Euro-Dollar Loans, in each case in whole at any time, or from time
to time in part in amounts aggregating $5,000,000 (or, solely in the case of any
Group of Loans which are Swing Loans, $1,000,000) or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together with, in the
case of a prepayment of Euro-Dollar Loans, accrued interest thereon to the date
of prepayment. Each such optional prepayment shall be applied to prepay ratably
the Loans of the several Lenders included in such Group.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Lender of the contents thereof and of such
Lender's ratable share of such prepayment and such notice shall not thereafter
be revocable by the Borrower.
(c) Subject to Section 2.04(f), each prepayment of the Term Loans made by
the Borrower pursuant to this Section 2.10 shall be allocated pro rata on the
basis of principal amount between the then outstanding Tranche A Loans and
Tranche B Loans.
(d) Each prepayment of the Term Loans of either Class made by the
Borrower pursuant to this Section shall be applied as follows: first, to reduce
the amount of the subsequent scheduled repayments of the Term Loans (if any) of
such Class to be made within 180 days of the date such prepayment is made in
forward order until such amount shall have been paid in full and thereafter to
43
reduce the amount of subsequent scheduled repayments to the Term Loans of such
Class in inverse order of maturity.
Section 2.11. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of Letter of
Credit Liabilities and of fees hereunder (other than fees payable directly to
any L/C Issuer), not later than 1:00 P.M. (New York City time) on the date when
due, in Federal or other funds immediately available in New York City, to the
Agent at its address referred to in Section 9.01. The Agent will promptly
distribute to each Lender its ratable share of each such payment received by the
Agent for the account of the Lenders. Whenever any payment of principal of, or
interest on, the Base Rate Loans or of Letter of Credit Liabilities or of fees
shall be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment, each Lender shall
repay to the Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Agent, at the Federal Funds Rate.
Section 2.12. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted (pursuant to Article 2 , 6 or 8 or otherwise) on any day other than
the last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.05(c) , or if the Borrower fails
to borrow, prepay, convert or continue any Euro-Dollar Loans after notice has
been given to any Lender in accordance with Section 2.02(a), 2.04(d), 2.08 or
2.10, the Borrower shall reimburse each Lender within 15 days after demand for
any
44
resulting loss or expense incurred by it (or, without duplication, by an
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or conversion or failure to borrow, prepay, convert or continue,
provided that such Lender shall have delivered to the Borrower a certificate as
to the amount of such loss or expense, which certificate shall be conclusive in
the absence of manifest error.
Section 2.13. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
Section 2.14. Letters of Credit. (a) Subject to the terms and conditions
hereof, each L/C Issuer agrees to issue letters of credit hereunder from time to
time before the tenth day before the Revolver Maturity Date upon the request of
the Borrower (the "Letters of Credit"); provided that, immediately after each
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Letter of Credit is issued, (i) the aggregate amount of the Letter of Credit
Liabilities shall not exceed the Letter of Credit Commitment and (ii) the
aggregate amount of the Revolving Exposures shall not exceed the aggregate
amount of the Revolving Commitments. Upon the date of issuance by an L/C Issuer
of a Letter of Credit, the L/C Issuer shall be deemed, without further action by
any party hereto, to have sold to each Revolving Lender, and each Revolving
Lender shall be deemed, without further action by any party hereto, to have
purchased from the L/C Issuer, a participation in such Letter of Credit and all
of the related Letter of Credit Liabilities pro rata to their respective
Revolving Percentages.
(b) The Borrower shall give the L/C Issuer notice at least three Domestic
Business Days prior to the requested issuance of a Letter of Credit specifying
the date such Letter of Credit is to be issued, and describing the terms of such
Letter of Credit and the nature of the transactions to be supported thereby
(such notice, including any such notice given in connection with the extension
or renewal of a Letter of Credit, a "Notice of Issuance"). Upon receipt of a
Notice of Issuance, the L/C Issuer shall promptly notify the Agent, and the
Agent shall promptly notify each Revolving Lender of the contents thereof and of
the amount of such Revolving Lender's participation in such Letter of Credit.
The issuance by the L/C Issuer of each Letter of Credit shall, in addition to
the conditions precedent set forth in Section 3.02, be subject to the conditions
precedent that such Letter of Credit shall be in such form and contain such
terms as shall be satisfactory to the L/C Issuer and that the Borrower shall
have executed and delivered such other instruments and agreements relating to
such Letter of Credit as the L/C Issuer
45
shall have reasonably requested. The Borrower shall also pay to the L/C Issuer
for its own account issuance, drawing, amendment and extension charges in the
amounts and at the times as agreed between the Borrower and the L/C Issuer. The
extension or renewal of any Letter of Credit shall be deemed to be an issuance
of such Letter of Credit, and if any Letter of Credit contains a provision
pursuant to which it is deemed to be extended unless notice of termination is
given by the L/C Issuer, the L/C Issuer shall timely give such notice of
termination unless it has theretofore timely received a Notice of Issuance and
the other conditions to issuance of a Letter of Credit have also theretofore
been met with respect to such extension. No Letter of Credit shall have a term
extending or be extendible beyond the date which is ten days prior to the
Revolver Maturity Date.
(c) Upon receipt from the beneficiary of any Letter of Credit of any notice
of a drawing under such Letter of Credit, the L/C Issuer shall notify the Agent
and the Agent shall promptly give notice (a "Draw Notice") to the Borrower and
each Revolving Lender as to the amount to be paid as a result of such demand or
drawing and the payment date. Upon receipt of a Draw Notice by the Borrower,
the Borrower shall be irrevocably and unconditionally obligated to reimburse the
L/C Issuer for any amounts paid by the L/C Issuer upon any drawing under any
Letter of Credit, without presentment, demand, protest or other formalities of
any kind on the second Domestic Business Day following the date of receipt.
Regardless of if and when a Draw Notice is given to or received by the Borrower,
all such amounts paid by the L/C Issuer and remaining unpaid by the Borrower
shall bear interest, payable on demand, for each day from and including the date
of payment by the L/C Issuer until paid at a rate per annum equal to (x) to but
not including the due date determined in accordance with the preceding sentence,
the rate applicable to Base Rate Loans for such day and (y) on and after such
due date, the sum of 2% plus the rate applicable to Base Rate Revolving Loans
for such day. In addition, each Revolving Lender will pay to the Agent, for the
account of the L/C Issuer, immediately upon the L/C Issuer's demand at any time
during the period commencing after such drawing until reimbursement therefor in
full by the Borrower, an amount equal to such Lender's ratable share of such
drawing (in proportion to its participation therein), together with interest on
such amount for each day from the date of the L/C Issuer demand for such payment
(or, if such demand is made after 12:00 Noon (New York City time) on such date,
from the next succeeding Domestic Business Day) to the date of payment by such
Lender of such amount at the Federal Funds Rate. The L/C Issuer will pay to
each Revolving Lender ratably all amounts received from the Borrower for
application in payment of its reimbursement obligations in respect of any Letter
of Credit, but only to the extent such Revolving Lender has made payment to the
L/C Issuer in respect of such Letter of Credit pursuant hereto.
46
(d) The obligations of the Borrower and each Revolving Lender under
subsection (c) above shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
Letter of Credit or any document related hereto or thereto;
(ii) any amendment or waiver of or any consent to departure from all or
any of the provisions of this Agreement or any Letter of Credit or any document
related hereto or thereto;
(iii) the use which may be made of the Letter of Credit by, or any acts or
omission of, a beneficiary of a Letter of Credit (or any Person for whom the
beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or other rights that the
Borrower may have at any time against a beneficiary of a Letter of Credit (or
any Person for whom the beneficiary may be acting), the Lenders (including the
L/C Issuer) or any other Person, whether in connection with this Agreement or
the Letter of Credit or any document related hereto or thereto or any unrelated
transaction;
(v) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(vi) payment under a Letter of Credit against presentation to the L/C
Issuer of a draft or certificate that does not comply with the terms of the
Letter of Credit; or
(vii) any other act or omission to act or delay of any kind by any Lender
(including the L/C Issuer ), the Agent or any other Person, but for the
provisions of this subsection (vii), constitute a legal or equitable discharge
of the Borrower's or the Lender's obligations hereunder.
Nothing in this subsection (d) is intended to limit the right of the
Borrower to make a claim against the L/C Issuer for damages as contemplated by
the proviso to the first sentence of subsection (e).
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(e) The Borrower hereby indemnifies and holds harmless each L/C Issuer and
the Agent (and, to the extent any other Lender shall have contributed toward
47
or indemnified against any such claim, damage, loss, liability, cost or expense,
incurred by an L/C Issuer or the Agent, each such other Lender) from and against
any and all claims, damages, losses, liabilities, costs or expenses which it may
incur (including, without limitation, any claims, damages, losses, liabilities,
costs or expenses which the L/C Issuer may incur by reason of or in connection
with the failure of any other Lender to fulfill or comply with its obligations
to such L/C Issuer hereunder), and none of the Lenders (including an L/C Issuer)
nor the Agent nor any of their officers or directors or employees or agents
shall be liable or responsible, by reason of or in connection with the execution
and delivery or transfer of or payment or failure to pay under any Letter of
Credit, including without limitation any of the circumstances enumerated in
subsection (d) above, as well as (i) any error, omission, interruption or delay
in transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, (ii) any error in interpretation of technical terms, (iii) any loss
or delay in the transmission of any document required in order to make a drawing
under a Letter of Credit, (iv) any consequences arising from causes beyond the
control of the L/C Issuer, including without limitation any government acts, or
any other circumstances whatsoever in making or failing to make payment under
such Letter of Credit; provided that the Borrower shall not be required to
--------
indemnify any Lender for any claims, damages, losses, liabilities, costs or
expenses, and the Borrower shall have a claim against the L/C Issuer for direct
(but not consequential) damage suffered by it, to the extent found by a court of
competent jurisdiction to have been caused by (x) the willful misconduct or
gross negligence of the L/C Issuer in determining whether a request presented
under any Letter of Credit complied with the terms of such Letter of Credit or
(y) the L/C Issuer's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and conditions
of the Letter of Credit. Nothing in this subsection (e) is intended to limit
the obligations of the Borrower under any other provision of this Agreement. To
the extent the Borrower does not indemnify an L/C Issuer as required by this
subsection, the Revolving Lenders agree to do so ratably in accordance with
their Revolving Commitments.
ARTICLE 3
Conditions
Section 3.01. Closing. The closing hereunder shall occur upon receipt by
the Agent of the following (with respect to each document, dated the Closing
Date):
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(a) a duly executed Note for the account of each Lender dated on or before
the Closing Date complying with the provisions of Section 2.03;
(b) an opinion of Xxxxxx Xxxx & Xxxxxxxx, special counsel for the
Obligors, substantially in the form of Exhibit G;
(c) an opinion of Xxxxx Xxxx & Xxxxxxxx, special counsel for the Agent,
substantially in the form of Exhibit H-1 hereto and Xxxxxx, Xxxxxxxxx &
Xxxxxxxxx, special counsel for the Agent, substantially in the form of Exhibit
H-2 hereto;
(d) duly executed counterparts of each of the Collateral Documents,
together with duly executed financing statements on Form UCC-1 in form
sufficient for filing in all jurisdictions in which such filing is necessary to
perfect Liens created by the Collateral Documents, and all necessary documents
for filing with the U.S. Patent and Trademark Office and the U.S. Copyright
Office, and the delivery of any promissory notes and stock certificates
comprising the Collateral;
(e) a true, complete and correct copy of each Transaction Document as in
effect on the Closing Date, certified as such by a Responsible Officer;
(f) evidence satisfactory to it of the satisfaction (without waiver,
unless such waiver is approved in writing by the Agent) of all conditions to the
closing of the transactions contemplated by the Transaction Documents to be
consummated on the Closing Date as set forth in the Transaction Documents, and
that all such transactions will take place prior to or simultaneously with the
transactions contemplated hereby to take place on the Closing Date;
(g) each opinion of counsel required to be delivered by any Person
pursuant to the Transaction Documents on the Closing Date, with a letter from
each Person delivering any such opinion authorizing reliance thereon by the
Agent and the Lenders, all in form and substance satisfactory to the Agent;
(h) a certificate of the chief financial officer or chief accounting
officer of the Borrower to the effect that Holdings shall have (x) received net
cash proceeds of (i) not less than $200,000,000 from the issuance of shares of
its common stock to Tracinda, (ii) not less than
49
$200,000,000 from the issuance of shares of its common stock to Seven Network
and (iii) not less than $500,000,000 in the aggregate from the issuance of its
preferred stock to Tracinda and Seven Network, in each case on terms and
conditions not materially different in any material respect from those set forth
in the agreements listed on Schedule 3.01(h)(x) hereto, as amended to the date
hereof and substantially on the terms heretofore disclosed to each of the
Lenders, and (y) contributed all such amounts to the Borrower;
(i) evidence satisfactory to it that all outstanding obligations of the
Borrower and its Subsidiaries under the agreements and instruments set forth on
Schedule 3.01(i) (including without limitation principal and interest with
respect to any loans and all accrued fees and expenses) shall have been paid in
full or otherwise discharged concurrently with the making of the Loans to be
made hereunder on the Closing Date, all commitments thereunder have been
terminated and all Liens securing such obligations and all guarantees thereof
have been released or provision made for release thereof that is satisfactory to
the Agent (all Lenders hereunder which are also Lenders under the Existing
Credit Agreement hereby agree that repayment of all outstanding obligations
thereunder may be made on the Closing Date, whether at the end of interest
periods under the Existing Credit Agreement or not);
(j) evidence satisfactory to it that, after consummation of the
transactions contemplated by the Loan Documents and the Transaction Documents to
occur on the Closing Date, the Borrower and its Subsidiaries shall have no Debt
outstanding (other than the Loans and Debt permitted pursuant to Sections
5.10(b) through 5.10(k), inclusive);
(k) the pro forma financial statements referred to in Section 4.04(c),
together with a certificate of the chief financial officer or the chief
accounting officer of the Borrower setting forth in reasonable detail the
calculations required to establish that the Borrower is in compliance with the
requirements of Section 5.15 on the Closing Date;
(l) evidence satisfactory to it of the insurance coverage required by
Section 5.03 and the Collateral Documents;
(m) payment in full of all fees, expenses and other amounts due and
payable hereunder (including fees and expenses payable pursuant to Section 9.03)
or pursuant to any letter agreement between the Borrower
50
and the Agent or the Arranger relating to the transactions contemplated by
the Loan Documents;
(n) all documents the Agent may reasonably request relating to the
existence of the Obligors, the corporate authority for and the validity of
the Loan Documents, and any other matters relevant hereto, all in form and
substance reasonably satisfactory to the Agent;
(o) since the respective dates as of which information is stated in
the Information Memorandum, no event has occurred and no condition has come
into existence which would have caused the projections set forth therein to
be materially misleading; and
(p) the fact that the Closing Date shall have occurred on or prior to
October 15, 1996.
Section 3.02. Borrowings and Issuances of Letters of Credit. The
obligation of any Lender to make a Loan on the occasion of any Borrowing (other
than the obligation of any Lender to make a Refunding Swing Loan), and the
obligation of an L/C Issuer to issue (which shall include, for purposes of this
Section, any renewal or extension of the term of) any Letter of Credit are each
subject to the satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.01 or receipt by the L/C Issuer of a Notice of Issuance as
required by Section 2.14(b);
(b) solely in the case of a Revolving Borrowing, a Swing Borrowing or
issuance of a Letter of Credit the fact that, immediately after such
Borrowing or the issuance of such Letter of Credit, as the case may be, the
aggregate Revolving Exposure will not exceed the aggregate amount of the
Revolving Commitments;
(c) the fact that, immediately before and after such Borrowing or
issuance of a Letter of Credit, as the case may be, no Default shall have
occurred and be continuing; and
(d) the fact that the representations and warranties of the Obligors
contained in the Loan Documents shall be true in all material respects on
and as of the date of such Borrowing.
51
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed
to be a representation and warranty by the Borrower on the date of such
Borrowing or issuance of a Letter of Credit, as the case may be, as to the facts
specified in clauses (b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that (including, in the case of any
such representation and warranty made or deemed made before the consummation of
the Acquisition, at the time such representation and warranty is made or deemed
made and immediately after giving effect to the consummation of the
Acquisition):
Section 4.01. Corporate Existence and Power. Each Obligor is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except to the extent that the failure to have
such licenses, authorizations, consents and approvals could not in the aggregate
reasonably be expected to have a Material Adverse Effect.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by each Obligor of the Loan Documents to
which it is a party (i) are within the corporate powers of such Obligor and have
been duly authorized by all necessary corporate action, (ii) require no action
by or in respect of, or filing with, any governmental body, agency or official,
other than actions or filings which have been taken or made on or prior to the
Closing Date or, solely with respect to filings necessary to perfect any
security interest created under any of the Collateral Documents, will be made on
or prior to 5 Dom estic Business Days after the Closing Date, (iii) do not
contravene, or constitute a default under, any provision (v) of applicable law
or regulation, (w) of the articles or certificate of incorporation or by-laws of
such Obligor, (x) of any agreement or instrument under which Debt has or may be
incurred binding upon Holdings or any of its Subsidiaries, (y) of any other
agreement or instrument binding upon Holdings or any of its Subsidiaries which
contravention or default could reasonably be expected to have a Material Adverse
Effect, or (z) of any judgment, injunction, order or decree binding upon
Holdings or any of its Subsidiaries or (iv) result in the creation or imposition
of any Lien on any material asset of Holdings or any of its Subsidiaries.
52
Section 4.03. Binding Effect. The Loan Documents (other than the Notes) to
which each Obligor is a party constitute valid and binding agreements of such
Obligor and each Note, when executed and delivered in accordance with this
Agreement, will constitute a valid and binding obligation of the Borrower, in
each case enforceable in accordance with its terms except (i) as may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (ii) as may be limited by equitable principles of general applicability.
Section 4.04. Financial Information; Information Memorandum. (a) The
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of December 31, 1995 and the related consolidated statements of income and cash
flows for the fiscal year then ended, reported on by Price Waterhouse LLP, a
copy of which has been delivered to each of the Lenders, fairly present, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such fiscal
year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of June 30, 1996 and the related unaudited
consolidated statements of income and cash flows for the six-month period then
ended fairly present, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements referred
to in subsection (a), the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such six-month period (subject to normal year-end
adjustments).
(c) The pro forma balance sheet of the Borrower and its Consolidated
Subsidiaries as of June 30, 1996, copies of which have been delivered to each of
the Lenders prior to the date hereof, fairly present, in conformity with
generally accepted accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a) , the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such date,
adjusted to give effect (as if such events had occurred on such date) to (i) the
transactions contemplated by this Loan Documents and the Transaction Documents
to occur on the Closing Date, (ii) the application of the proceeds therefrom as
contemplated by this Agreement and the Transaction Documents and (iii) the
payment of all legal, accounting and other fees related thereto. As of the date
of such balance sheet and the Closing Date, the Borrower and its Subsidiaries
had and have no material liabilities, contingent or otherwise, including
liabilities for taxes, long-term leases or forward or long-term commitments,
which are not properly reflected on such
53
balance sheet in accordance with generally accepted accounting principles or the
footnotes relating thereto.
(d) The projections set forth in the Information Memorandum were prepared
in good faith on assumptions believed to be reasonable at the time of
preparation thereof.
(e) Since June 30, 1996 there has been no material adverse change in the
assets or liabilities or the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole, except for any such change as a result of (x) any change resulting from
general economic, financial or market conditions not specific to the Borrower
and its Subsidiaries or the business in which they operate or (y) any change
resulting from conditions or circumstances generally affecting the business in
which the Borrower and its Subsidiaries operate (including losses from the
release of Films in the ordinary course of business).
Section 4.05. Litigation. Except as set forth in Schedule 4.05, there is
no action, suit or proceeding pending against, or to the knowledge of the
Borrower threatened against or affecting, Holdings or any of its Subsidiaries
before any court or arbitrator or any governmental body, agency or official
which could reasonably be expected to have a Material Adverse Effect or which
questions the validity or enforceability of the Loan Documents or the
Transaction Documents or the consummation of the Acquisition.
Section 4.06. Compliance with ERISA. 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, except in each case to the extent that the
same could not reasonably be expected to have a Material Adverse Effect. 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, except to the extent
that the same could not reasonably be expected to have a Material Adverse
Effect. 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, except to the extent that the same could not reasonably
be expected to have a Material Adverse Effect. Neither Holdings nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan,
54
and neither Holdings nor any Commonly Controlled Entity would become subject to
any liability under ERISA if Holdings 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, except in each case to the extent that the same could not
reasonably be expected to have a Material Adverse Effect. No such Multiemployer
Plan is in Reorganization or Insolvent. Neither Holdings nor any of its
Subsidiaries has any liability for any post-retirement welfare benefits.
Section 4.07. Environmental Compliance. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such associated
liabilities and costs, including the costs of compliance with Environmental
Laws, are unlikely to have a Material Adverse Effect.
Section 4.08. Taxes. Holdings and its Subsidiaries have filed all United
States Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by Holdings or any Subsidiary
(other than any such taxes being contested in good faith by appropriate
proceeding and with respect to which appropriate reserves in accordance with
generally accepted accounting principles have been taken). The charges,
accruals and reserves on the books of Holdings and its Subsidiaries in respect
of taxes or other governmental charges are, in the opinion of the Borrower,
adequate.
Section 4.09. Subsidiaries. (a) Each of the Borrower's Material
Subsidiaries is a corporation or other business entity duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, and has all corporate or other
powers and all material governmental licenses, authorizations, consents and
approvals required to
55
carry on its business as now conducted, except to the extent that the failure of
such Material Subsidiaries to maintain their respective good standing or to have
such licenses, authorizations, consents and approvals could not in the aggregate
reasonably be expected to have a Material Adverse Effect (or its existence has
been terminated as permitted under Section 5.04 or it has merged or consolidated
with another Person as permitted under Section 5.07(a)).
(b) Schedule 4.09 lists all of the Material Subsidiaries of the Borrower
(including any Material Subsidiary the existence of which has been terminated as
permitted under Section 5.04 or which has merged or consolidated with another
Person as permitted under Section 5.07(a)). Each Material Subsidiary of the
Borrower (other than Foreign Subsidiaries and Single Purpose Subsidiaries) is a
Guarantor. Each Guarantor is a direct or indirect wholly-owned Subsidiary of the
Borrower.
Section 4.10. Regulatory Restrictions on Borrowing. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or otherwise subject to any regulatory scheme
which restricts its ability to incur debt.
Section 4.11. Full Disclosure. No information heretofore or hereafter
furnished by each Obligor to the Agent or any Lender for purposes of or in
connection with the Loan Documents or any transaction contemplated thereby
contains or, taken together with all information so furnished will contain, any
untrue statement of a material fact or omits or will omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Section 4.12. Representations in Transaction Documents True and Correct.
Each of the representations and warranties of any party contained in the
Transaction Documents is true and correct in all material respects as of the
Closing Date, except to the extent that the failure of such representations and
warranties to be true and correct in all material respects could not in the
aggregate reasonably be expected to have a Material Adverse Effect. The
Transaction Documents have not as of the Closing Date been modified or amended
in any respect and no provision or condition contained therein has been waived,
except with the express written consent of the Agent.
Section 4.13. Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is a licensed to use, all trademarks, tradenames,
copyrights (including without limitation any copyrights relating to Library
Films),
56
technology, know-how and processes necessary for the conduct of their respective
businesses as currently conducted (the "Intellectual Property"), except to the
extent that the failure to own or be licensed to use any such Intellectual
Property could not in the aggregate reasonably be expected to have a Material
Adverse Effect. No 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 such Intellectual Property, nor does the Borrower know
of any valid basis for any such claim, except, in each case, for claims which
could not in the aggregate reasonably be expected to have a Material Adverse
Effect. The use of Intellectual Property by the Borrower and its Subsidiaries
does not infringe on the rights of any Person, except to the extent that such
infringements could not in the aggregate reasonably be expected to have a
Material Adverse Effect.
Section 4.14. Collateral Documents. The representations and warranties
made by the Obligors in the Collateral Documents are true and correct in all
material respects.
Section 4.15. Solvency. As of the Closing Date after giving effect to the
transactions contemplated hereby to occur on the Closing Date, and at all times
thereafter: (i) the aggregate fair market value of the business and/or assets
of the Borrower and each other Obligor will exceed its liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities), (ii) the
Borrower and each other Obligor will have sufficient cash flow to enable it to
pay its debts as they mature and (iii) the Borrower and each other Obligor will
not have unreasonably small capital for the business in which the Borrower and
its Subsidiaries are engaged.
ARTICLE 5
Covenants
The Borrower agrees that, so long as any Lender has any Commitment
hereunder or any amount payable under any Note or any Letter of Credit Liability
remains unpaid:
Section 5.01. Information. The Borrower will deliver to the Agent, with
sufficient copies for all Lenders (and the Agent shall deliver promptly upon
receipt to the Lenders):
(a) as soon as available and in any event within 105 days after the
end of each Fiscal Year, (i) an audited consolidated balance sheet of
57
Holdings and its Consolidated Subsidiaries as of the end of such Fiscal
Year and the related audited consolidated statements of operations and cash
flows for such Fiscal Year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all reported on without material
qualification by independent public accountants of nationally recognized
standing and (ii) an unaudited consolidated statement of cash flows of
Holdings and its Consolidated Subsidiaries for such Fiscal Year, setting
forth (x) in reasonable detail a calculation of consolidated cash flows
from operations of Holdings and its Consolidated Subsidiaries for such
Fiscal Year (determined in a manner consistent with the statements of cash
flows included in the Information Memorandum) and (y) in comparative form
the figures for such statements for such Fiscal Year set forth in the
Information Memorandum;
(b) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, (i) a
consolidated balance sheet of Holdings and its Consolidated Subsidiaries as
of the end of such Fiscal Quarter and the related consolidated statements
of operations and cash flows for such Fiscal Quarter and for the portion of
the Fiscal Year ended at the end of such Fiscal Quarter, setting forth in
the case of such statements of operations and cash flows, in comparative
form the figures for the corresponding Fiscal Quarter and the corresponding
portion of the previous Fiscal Year, all certified (subject to normal year-
end adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial officer or the
chief accounting officer of the Borrower and (ii) an unaudited consolidated
statement of cash flows of Holdings and its Consolidated Subsidiaries for
such Fiscal Quarter and the portion of the Fiscal Year ended at the end of
such Fiscal Quarter, setting forth (x) in reasonable detail a calculation
of consolidated cash flows from operations of Holdings and its Consolidated
Subsidiaries for such Fiscal Quarter and the portion of the Fiscal Year
ended at the end of such Fiscal Quarter (determined in a manner consistent
with the statements of cash flows included in the Information Memorandum)
and (y) in comparative form the figures for such statements for the
corresponding Fiscal Quarter and the corresponding portion of the previous
Fiscal Year set forth in the Information Memorandum;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, (A) a certificate of
the chief financial officer or the chief accounting officer of the
Borrower, (i) setting forth in reasonable detail the calculations required
to establish
58
whether the Borrower and Holdings were in compliance with the requirements
of Sections 5.10 to 5.18, inclusive, on the date of such financial
statements, (ii) listing all new Material Subsidiaries of the Borrower
since the date of the previous certificate delivered pursuant to this
Section 5.01(c), (iii) solely in the case of each set of financial
statements referred to in clause (a) above, setting forth in reasonable
detail the calculations required to determine Excess Cash Flow for the
related Fiscal Year and (iv) stating whether, to his or her knowledge, any
Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto and (B) from the chief
financial officer or the chief accounting officer of the Borrower, a report
setting forth in reasonable detail a discussion and analysis of the
Borrower's financial condition and results of operations for the Fiscal
Quarter then ended;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a)(i) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe that
any Default under Sections 5.11 to 5.16, inclusive, existed on the date of
such statements and (ii) confirming the accuracy of the calculations set
forth in the officer's certificate delivered simultaneously therewith
pursuant to clause (c) above (other than the calculations relating to the
determination of Excess Cash Flow);
(e) reasonably promptly after any Responsible Officer obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the
Borrower is taking or propose to take with respect thereto;
(f) as soon as reasonably practicable after any Responsible Officer
obtains knowledge thereof, notice of any event or condition which has had
or could reasonably be expected to have a Material Adverse Effect and the
nature of such Material Adverse Effect;
(g) as soon as reasonably practicable after any Responsible Officer
obtains knowledge of the commencement of, or of a threat of the
commencement of, an action, suit or proceeding against Holdings or any of
its Subsidiaries before any court or arbitrator or any governmental body,
agency or official which could reasonably be expected to have a Material
59
Adverse Effect or which questions the validity or enforceability of the
Loan Documents or the Transaction Documents or the consummation of the
Acquisition, a certificate of a senior financial officer of the Borrower
setting forth the nature of such pending or threatened action, suit or
proceeding and such additional information with respect thereto as may be
reasonably requested by any Lender;
(h) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) (if any) which the Borrower or Holdings shall have filed
with the Securities and Exchange Commission;
(i) written notice of the following events, as soon as possible
and in any event within 30 days after any of the appropriate officers or
employees of Holdings with responsibility for Holdings' Plans and the
compliance by such Plans with ERISA and the Code knows or has reason to
know thereof: (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, the filing of an application for a waiver
of the minimum funding standard with respect to a Plan under Section 412 of
the Code, the creation of any Lien in favor of 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 Holdings or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, reorganization or Insolvency of, any Plan;
(j) from time to time at the request of the Required Lenders (but
no more frequently than once in any 24-month period), an appraisal made by
a qualified independent appraiser selected by the Borrower and reasonably
satisfactory to the Agent, as to value of the Library Films or any portion
thereof and as of such date as shall each be specified in the relevant
request made by the Required Lenders, performed using the methods and
procedures used in, and prepared in a form substantially consistent with,
the appraisal of the Library Films prepared by Xxxxxx Xxxx LLC and dated
August 1996;
(k) within 30 days prior to the end of each Fiscal Year, the
operating and capital expenditure budgets and cash flow forecasts of
Holdings and its Consolidated Subsidiaries for the immediately succeeding
Fiscal Year, which budgets and forecasts shall be in format and
60
scope reasonably consistent with the projections, budgets and forecasts set
forth in the Information Memorandum; and
(l) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries or any
other Obligor as the Agent, at the request of any Lender, may reasonably
request.
Section 5.02. Payment of Obligations. The Borrower will pay and discharge,
and will cause each Material Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities (including,
without limitation, tax liabilities and claims of materialmen, warehousemen and
the like which if unpaid might by law give rise to a Lien), except (i) where the
same may be contested in good faith by appropriate proceedings, and will
maintain, and will cause each Material Subsidiary to maintain, in accordance
with generally accepted accounting principles, appropriate reserves for the
accrual of any of the same and (ii) where the failure to pay or discharge such
obligations and liabilities could not reasonably be expected to have a Material
Adverse Effect.
Section 5.03. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Material Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted , except where the failure to do so could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) The Borrower will, and will cause each of its Material Subsidiaries
to, maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance on
their respective properties in at least such amounts, against at least such
risks and with such risk retention as are usually maintained, insured against or
retained, as the case may be, in the same general area by companies of
established repute engaged in the same or a similar business (but including in
any event public liability insurance and "errors and omissions" insurance); and
will furnish to the Lenders, upon request from the Agent, information presented
in reasonable detail as to the insurance so carried.
Section 5.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Material Subsidiary to continue, to
engage in business of the same general type as now conducted by the Borrower and
its Material Subsidiaries and other businesses reasonably incidental thereto and
will preserve, renew and keep in full force and effect, and will cause each
Material Subsidiary to preserve, renew and keep in full force and effect their
61
respective corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business, except to
the extent that the failure to keep in full force and effect such rights,
privileges and franchises could not in the aggregate reasonably be expected to
have a Material Adverse Effect; provided that (i) the Borrower may liquidate or
terminate the corporate existence of any Material Subsidiary if, prior to or
contemporaneously with such liquidation or termination, substantially all of the
assets of such Material Subsidiary are distributed, contributed or otherwise
transferred to the Borrower or a Guarantor and (ii) nothing in this Section 5.04
shall prohibit any transaction explicitly permitted by the proviso set forth in
Section 5.07(a).
Section 5.05. Compliance with Laws. The Borrower will comply, and cause
each Material Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) except (i) where the necessity of compliance
therewith is contested in good faith by appropriate proceedings or (ii) to the
extent that failure to so comply could not in the aggregate reasonably be
expected to have a Material Adverse Effect.
Section 5.06. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of the Agent, at the
Agent's or the Lenders' expense, to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants, all at
such reasonable times during normal business hours and upon reasonable prior
notice, and as often as may reasonably be desired.
Section 5.07. Mergers and Sales of Assets; Licensing Agreements. (a) The
Borrower will not, and will not permit any Material Subsidiary to, consolidate
or merge with or into any other Person; provided that (i) the Borrower may merge
with another Person if the Borrower is the corporation surviving such merger and
immediately after giving effect to such merger, no Default shall have occurred
and be continuing and (ii) any Material Subsidiary may merge with any other
Person if the corporation surviving the merger is the Borrower or a Guarantor
and immediately after giving effect to such merger, no Default shall have
occurred and be continuing.
62
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
make any Asset Sale in any Fiscal Year, other than (i) Asset Sales the fair
market value of which, when combined with all other such Asset Sales previously
made during such Fiscal Year, does not exceed $10,000,000 and (ii) any Asset
Sale in which (x) the consideration therefor is not less than the fair market
value of the related asset (as determined in good faith by the chief financial
officer or chief accounting officer of the Borrower), (y) the consideration
received therefor consists solely of cash payable at the closing thereof and (z)
after giving effect to such Asset Sale, the aggregate fair market value of the
assets disposed of in all Asset Sales in such Fiscal Year does not exceed
$25,000,000. Notwithstanding the foregoing, the Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Receivable Financing after the
date hereof.
(c) Without limitation of the foregoing, the Borrower will not, and will
not permit its Subsidiaries to, sell, lease or otherwise transfer, directly or
indirectly, all or substantially all of the assets of the Borrower and its
Subsidiaries, taken as a whole, to any other Person; provided that nothing in
this subsection (c) shall prohibit any Subsidiary from distributing,
contributing or otherwise transferring its assets to the Borrower or a
Guarantor.
(d) Without limitation of the foregoing, the Borrower will not, and will
not permit its Subsidiaries to, enter into any Licensing Agreement or series of
related Licensing Agreements with respect to any Library Films if:
(i) the aggregate amount of payments under such Licensing Agreement
or series of related Licensing Agreements exceeds $100,000,000; or
(ii) the Borrower or such Subsidiary conveys, sells, assigns,
transfers or otherwise disposes of, with or without recourse, its rights to
receive payments under any such Licensing Agreement or series of related
Licensing Agreements; or
(iii) the aggregate amount of payments under such Licensing Agreement
or series of related Licensing Agreements exceeds $10,000,000 and the aggregate
---
amount of payments under all such Licensing Agreement or series of related
Licensing Agreements that are not to be made reasonably pro rata over the period
of availability of the Films which are the subject of such Licensing Agreement
or series of related Licensing Agreements would exceed the greater of (x)10% of
the aggregate amount of all payments under such Licensing Agreement or series of
related Licensing Agreements and (y) $10,000,000.
63
(e) Without limitation of the foregoing, the Borrower will not, and will
not permit its Subsidiaries to, enter into any Licensing Agreement or series of
related Licensing Agreements with respect to any Films (other than Library
Films) or Film Related Assets if the Borrower or such Subsidiary conveys, sells,
assigns, transfers or otherwise disposes of, with or without recourse, its
rights to receive payments under any such Licensing Agreement or series of
related Licensing Agreements.
Section 5.08. Use of Proceeds. The proceeds of the Term Loans and the
Revolving Loans made on the Closing Date will be used by the Borrower to finance
the purchase by Holdings of all the issued and outstanding capital stock of the
Borrower, to repay Debt and other obligations outstanding under the agreements
and instruments listed on Schedule 3.01(i) and to pay for transaction costs
incurred in connection with the Acquisition and the financing thereof. The
Letters of Credit and the proceeds of the Revolving Loans made after the Closing
Date and the Swing Loans will be used for general corporate purposes (other than
any of the purposes described in the immediately preceding sentence). None of
such proceeds and none of the Letters of Credit will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U.
Section 5.09. Negative Pledge. Neither the Borrower nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary and not created in contemplation of such event;
(b) any Lien on any fixed or capital asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such asset; provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof;
(c) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(d) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Subsidiary and not created in contemplation of such
acquisition;
64
(e) any Lien on assets of a Foreign Subsidiary securing Debt
permitted under Section 5.10(e);
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is
not secured by any additional assets;
(g) any Lien securing Profit Participations, Residuals and Deferred
Payments and other obligations that do not constitute Debt by operation of
clause (x) of the proviso in the definition of "Debt"; provided that such
Lien attaches solely to cash deposits and the Film or Films or Film Related
Assets that are the subject of such arrangements;
(h) Liens (other than Liens securing Debt) consisting of rights of
licensees under access agreements pursuant to which such licensees have
access to duplicating material for the purpose of making prints of Films
licensed to them, and rights of distributors, exhibitors, licensees and
other Persons in Films created in connection with the distribution and
exploitation of such Films in the ordinary course of business;
(i) Liens securing Debt permitted by Sections 5.10(h) or (i) or
securing obligations of the Borrower or its Subsidiaries incurred in
connection with acquiring rights to Films in the ordinary course of
business, provided that (x) the agreement to grant such Liens shall be
created substantially simultaneously with the acquisition, development,
production or postproduction of such Films and (y) such Liens do not at any
time encumber any property other than the Films being produced, developed
or acquired;
(j) Liens (other than Liens securing Debt) incurred in the ordinary
course of business on any Film or any Film Related Asset constituting
negotiation rights with respect to such Film or Film Related Asset, options
to develop such Film or Film Related Asset or similar rights with respect
to such Film or Film Related Asset;
(k) Liens on cash and cash equivalents arising under the escrow
arrangements referred to in the proviso to the definition of Sale-Leaseback
Transactions and Liens consisting of the rights and interests of the lessor
with respect to Films subject to Sale-Leaseback Transactions permitted
under Section 5.10(i) hereof;
65
(l) Liens arising out of Licensing Agreements or security agreements
entered into pursuant to such Licensing Agreements in respect of Films or Film
Related Assets permitted under Section 5.07(d) or Section 5.07(e) hereof,
consisting of such licensing rights and attaching solely to the Film or Films or
Film Related Assets so licensed;
(m) Liens in existence on the Closing Date and reflected in Schedule
5.09 hereto;
(n) Liens for taxes not yet due 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 Subsidiaries, as the
case may be, in conformity with generally accepted accounting principles (or, in
the case of Foreign Subsidiaries, generally accepted accounting principles in
effect from time to time in their respective jurisdictions of incorporation);
(o) carriers', warehousemen's, 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 60 days or which are being contested in good
faith by appropriate proceedings;
(p) pledges or deposits in connection with workers' compensation,
unemployment insurance or other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(q) Liens on deposits to secure obligations to acquire Films or Film
Related Assets or the performance of bids, trade contracts (other than contracts
under which Debt may be incurred), leases, performance or completion bonds and
other obligations of a like nature incurred in the ordinary course of business;
provided that any such Liens securing the obligation of the Borrower or any of
its Subsidiaries to acquire Films or Film Related Assets shall encumber only
cash;
(r) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, 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 materially interfere
with the ordinary conduct of the business of the Borrower or such Subsidiary;
66
(s) Liens (other than Liens permitted by any of the foregoing
clauses) arising in the ordinary course of its business which (i) do not secure
Debt or Derivatives Obligations, (ii) do not secure any obligation in an amount
exceeding $5,000,000 and (iii) do not in the aggregate materially detract from
the value of its assets or materially impair the use thereof in the operation of
its business; and
(t) Liens created by the Collateral Documents.
Section 5.10. Limitation on Debt. The Borrower will not, and will not
permit any of its Subsidiaries to, incur or at any time be liable with respect
to any Debt except:
(a) Debt under this Agreement;
(b) Debt owed to WHV under the WHV Agreement;
(c) Debt owed to UIP (or any successor thereto) under agreements
between UIP (or such successor) and the Borrower or any of its Subsidiaries
not in excess of $20,000,000 at any one time;
(d) Debt secured by Liens permitted by Section 5.09(a), (b), (c), (d)
or (f);
(e) Debt of any Foreign Subsidiary owed to a Person other than the
Borrower, any Guarantor or any other Foreign Subsidiary incurred for
working capital purposes in an aggregate principal amount not in excess of
$10,000,000 at any time;
(f) (i) Debt of the Borrower owed to a Guarantor, or Debt of a
Guarantor owed to the Borrower or another Guarantor, or Debt of a Foreign
Subsidiary owed to another Foreign Subsidiary or (ii) Debt of a Foreign
Subsidiary owed to the Borrower or a Guarantor and incurred in the ordinary
course of business to finance operating expenditures of such Foreign
Subsidiary and evidenced by a note (which may be a grid note) constituting
Collateral under a Pledge Agreement;
(g) Debt of the Borrower or any of its Subsidiaries incurred to
finance any acquisition of fixed or capital assets permitted pursuant to
Section 5.14 and any Debt of the relevant obligor refinancing such Debt;
provided that the principal amount thereof is not increased;
67
(h) (i) Debt (other than Debt of a Single Purpose Subsidiary) incurred
in connection with the financing or refinancing of the development,
production, acquisition, distribution, exhibition or exploitation of a Film
or Film Related Assets or a slate of Films, but solely to the extent that
under the terms of such Debt the obligations of the Borrower and its
Subsidiaries with respect to such Debt may be satisfied by recourse only to
such Film or slate of Films and rights pertaining thereto and, in each
case, to the proceeds thereof and (ii) Debt of a Single Purpose Subsidiary,
so long as such Debt complies with the provisions of clause (ii) of the
definition of Single Purpose Subsidiary;
(i) Debt in respect of Sale-Leaseback Transactions;
(j) Debt outstanding on the Closing Date and listed on Schedule
5.10; and
(k) Debt not otherwise permitted by the foregoing clauses of
this Section in an aggregate principal or face amount not in excess of
$10,000,000 at any time.
Section 5.11. Adjusted EBITDA; EBITDA to Interest. (a) At the last day of
each Fiscal Quarter of the 1997 Fiscal Year, Consolidated Adjusted EBITDA for
the four consecutive Fiscal Quarters then ended will not be less than $0.
(b) As of last day of any Fiscal Quarter set forth below, the ratio of (i)
Consolidated EBITDA to (ii) Consolidated Cash Interest Expense, in each case for
the period of four consecutive Fiscal Quarters then ended (or, solely as of the
last day of any Fiscal Quarter ended on or prior to September 30, 1998, for the
period from and including January 1, 1998 to and including the last day of such
Fiscal Quarter) shall not be less than the ratio set forth below opposite such
Fiscal Quarter:
Fiscal Quarter
Ending Ratio
-------------- -----
03/31/98 0.750:1
06/30/98 1.000:1
09/30/98 1.250:1
12/31/98 1.500:1
03/31/99 1.500:1
06/30/99 1.625:1
09/30/99 1.625:1
12/31/99 1.750:1
68
03/31/00 2.000:1
06/30/00 2.250:1
09/30/00 2.500:1
12/31/00 3.000:1
03/31/01 3.250:1
06/30/01 3.500:1
09/30/01 3.750:1
12/31/01 4.000:1
03/31/02 4.000:1
06/30/02 4.000:1
09/30/02 4.000:1
Thereafter 5.000:1
Section 5.12. Total Borrowed Funds to EBITDA. At no time during any
Fiscal Quarter set forth below shall the Leverage Ratio be greater than the
ratio set forth below opposite such Fiscal Quarter:
Fiscal Quarter
Ending Ratio
-------------- -----
03/31/98 8.00:1
06/30/98 7.25:1
09/30/98 6.50:1
12/31/98 5.75:1
03/31/99 5.75:1
06/30/99 5.50:1
09/30/99 5.50:1
12/31/99 5.25:1
03/31/00 4.75:1
06/30/00 4.25:1
09/30/00 3.75:1
12/31/00 2.75:1
03/31/01 2.75:1
06/30/01 2.50:1
09/30/01 2.50:1
12/31/01 2.25:1
03/31/02 2.25:1
06/30/02 2.25:1
09/30/02 2.25:1
Thereafter 1.50:1
69
Section 5.13. Total Borrowed Funds/Library Cash Flow. At all times during
any Fiscal Quarter set forth below the ratio of (i) Total Borrowed Funds at such
date to (ii) Library Cash Flows for the period of four consecutive Fiscal
Quarters then most recently ended, will not be greater than the ratio set forth
below opposite such Fiscal Quarter:
Fiscal Quarter
Ending Ratio
-------------- -----
12/31/96 2.750:1
03/31/97 2.750:1
06/30/97 2.750:1
12/31/97 2.750:1
03/31/98 3.500:1
06/30/98 4.250:1
09/30/98 4.750:1
12/31/98 5.250:1
03/31/99 5.375:1
06/30/99 5.500:1
09/30/99 5.625:1
12/31/99 5.750:1
03/31/00 5.625:1
06/30/00 5.500:1
09/30/00 5.375:1
12/31/00 5.250:1
03/31/01 5.000:1
06/30/01 4.500:1
09/30/01 4.000:1
12/31/01 3.500:1
03/31/02 3.500:1
06/30/02 3.500:1
09/30/02 3.500:1
Thereafter 2.500:1
Section 5.14. Maximum Capital Expenditures. Consolidated Capital
Expenditures for any Fiscal Year will not exceed $10,000,000.
Section 5.15. Minimum Consolidated Adjusted Net Worth. Consolidated
Adjusted Net Worth will at no time be less than an amount equal to the sum of
(i) $750,000,000 plus (ii) an amount equal to 50% of Consolidated Net Income for
----
each Fiscal Year ending on or after December 31, 1997 but prior to the date of
determination, in each case, for which such Consolidated Net Income is positive
70
(but with no deduction on account of negative Consolidated Net Income for any
Fiscal Year), plus (iii) 100% of the aggregate net proceeds, including the fair
----
market value of property other than cash (as determined in good faith by the
Board of Directors of Holdings) received by Holdings from the issuance and sale
after the date hereof of any capital stock of Holdings (other than any such
issuances described in Section 3.01(h) in the minimum amounts referred to
therein) or in connection with the conversion or exchange of any Debt of
Holdings into capital stock of Holdings after September 30, 1996 (including
without limitation any contribution to capital) (an "equity issuance"), but
excluding an amount of such net proceeds of up to $100,000,000 in the aggregate
from up to 2 equity issuances, which equity issuances have been specified by the
Borrower by notice to the Agent at the consummation of such equity issuance to
be excepted from the increase otherwise required under this clause (iii).
Section 5.16. Operating Lease Payments. The Borrower will not, and will
not permit any Subsidiary to, incur or assume (whether pursuant to a Guarantee
or otherwise) any liability for rental payments under a lease with a lease term
(as defined in Financial Accounting Standards Board Statement No. 13, as in
effect on the date hereof) of one year or more (other than in connection with
any Sale-Leaseback Transaction) if, after giving effect thereto, the aggregate
amount of minimum lease payments that the Borrower and its Consolidated
Subsidiaries have so incurred or assumed will exceed, on a consolidated basis,
$15,000,000 for any calendar year under all such leases (excluding any lease
which is to be accounted for as a capital lease on the balance sheet of the
Borrower and its Consolidated Subsidiaries).
Section 5.17. Restricted Payments. Neither the Borrower nor any Subsidiary
will declare or make any Restricted Payment; provided that the foregoing shall
not restrict or prohibit dividends or distributions to Holdings at such times
and in such amounts as are necessary to permit:
(a) (A) purchases of shares of (or options to purchase shares of) capital
stock of Holdings from employees of the Borrower or Holdings (including without
limitation Xxxxx X. Xxxxxxx), or any spouse or lineal descendant of any such
employee or any trust for the benefit of any of the foregoing (i) upon their
death, disability, termination or retirement, (ii in accordance with the terms
of the Management Stock Incentive Plan (including without limitation stock
option agreements issued in substantially the forms attached to the Management
Stock Incentive Plan or the Stockholders Agreement dated as of the date hereof
among Holdings, the Borrower, the Investors and certain other stockholders party
thereto from time to time), or (iii), which shares have been issued to Xxxxx X.
Xxxxxxx pursuant to the Xxxxxxx Employment Agreement or (B) payments of
principal of and interest on the Holdings Management Notes, so long as, in each
of cases
71
(A)(i), (A) (ii), (A) (iii) and (B) of this subsection (a), immediately
before and after giving effect to any such dividend or distribution for such
purpose, (x) no Default shall have occurred and be continuing and (y) at any
date prior to the Second Target Date, the aggregate amount of dividends or
distributions made by the Borrower to Holdings pursuant to this clause (a)
during the period from and including the date hereof to and including such date
(after giving effect to all dividends and distributions to be made on such date)
shall not exceed (1) if such date occurs prior to the Target Date, $15,000,000
and (2) if such date occurs on or after the Target Date and prior to the Second
Target Date, $35,000,000.
For purposes of this subsection (a):
"Borrower Total Borrowed Funds" means, at any date, the aggregate amount of
Debt of the Borrower and its Consolidated Subsidiaries described in clauses (i)
and (ii) and (iv) of the definition of Debt (but excluding (a) any obligations
under Sale-Leaseback Transactions which constitute Debt under clause (iv) of the
definition thereof and (b) Debt of any Single Purpose Subsidiary, so long as
such Debt complies with the provisions of clause (ii) of the definition of
Single Purpose Subsidiary), determined on a consolidated basis at such date.
"Second Target Date" means the first date on or after the Target Date on
which (i) Consolidated EBITDA for the period from October 1, 1996 to and
including the last day of the Fiscal Quarter most recently ended on or prior to
such date (treated, for this purpose, as a single accounting period) is at least
equal to $850,000,000 and (ii) Borrower Total Borrowed Funds at such date does
not exceed $150,000,000; provided that on such date the conditions set forth in
the definition of Target Date are met.
(b) purchases of shares of capital stock of Holdings from Xxxxx X. Xxxxxxx
or his spouse or lineal descendant or any trust for the benefit of any of the
foregoing, which shares have been issued to Xxxxx X. Xxxxxxx pursuant to the
Xxxxxxx Employment Agreement, so long as (x) immediately before and after giving
effect to any such dividend or distribution for such purpose, no Default shall
have occurred and be continuing and (y) immediately after giving effect to any
such dividend or distribution for such purpose, the aggregate amount of
dividends or distributions made by the Borrower to Holdings pursuant to this
subsection (b) during the period from and including the date hereof to and
including such date (after giving effect to all dividends and distributions to
be made on such date) shall not exceed the Basket Amount. "Basket Amount" means,
at any date, (i) the aggregate amount applied by Xxxxx X. Xxxxxxx under the
Xxxxxxx Employment Agreement on or prior to such date to the purchase of P&F
72
Stock Units (as defined in the Xxxxxxx Employment Agreement) pursuant to Section
6(a)(2) of the Xxxxxxx Employment Agreement minus (ii) the aggregate amount of
-----
dividends or distributions made by the Borrower to Holdings pursuant to this
subsection (b) for the period from and including the date hereof to and
including such date (after giving effect to all dividends and distributions to
be made pursuant to this subsection (b) on such date);
(c) at any time after the fifth anniversary of the Closing Date, (x)
payments of interest on Holdings Debt to the extent that such interest is then
payable in cash in accordance with the terms thereof, (y) payment of cash
dividends (1) on the preferred stock (the "Investor Preferred Stock") in the
minimum amount referred to in Section 3.01(h)(x)(iii) and issued on the Closing
Date and on any additional preferred stock of the same class as the Investor
Preferred Stock and issued as payment-in-kind of dividends with respect to the
Investor Preferred Stock, (2) on any preferred stock issued pursuant to the
Capital Call Agreement having substantially the same terms as the Investor
Preferred Stock (including, without limitation, no payment of cash dividends
with respect to such preferred stock for a term of at least five years from the
Closing Date) and on any additional preferred stock of the same class as such
preferred stock issued as payment-in-kind of dividends with respect to such
preferred stock and (3) on any preferred stock of the same class as the Investor
Preferred Stock issued pursuant to the exercise of stock options granted
pursuant to the Management Stock Incentive Plan, in each case only so long as,
immediately before and after giving effect to any such dividend or distribution
for such purpose, no Default shall have occurred and be continuing; and
(d) payments in the ordinary course of business of Holdings of legal fees,
tax preparation fees, franchise taxes and other overhead and general expenses
items (collectively, "Holdings Expenses"); provided that the sum of (i) the
aggregate amount of distributions made by the Borrower pursuant to this clause
(e) and the aggregate amount of Investments made by the Borrower pursuant to
Section 5.18(j) will not exceed in the aggregate $1,000,000 in any Fiscal Year.
Section 5.18. Investments. Neither the Borrower nor any Subsidiary will
hold, make or acquire any Investment in any Person other than:
(a) Investments by the Borrower in the form of equity interests of
Persons which are Guarantors or which, within 30 days after consummation of such
Investment, become Guarantors;
(b) Investments constituting intercompany loans permitted under Section
5.10(f);
73
(c) Investments made by the Borrower or any Subsidiary in the ordinary
course of business pursuant to arm's length transactions in Persons (other than
the Borrower or any Subsidiary) for the development, production, acquisition,
distribution, exhibition or exploitation of Films, copyrights or trademarks in
connection with co-production deals, split-xxxxxx xxxx, overhead deals or
similar arrangements (as such terms are generally understood in the movie
industry on the date hereof), provided that such Investments for the
development, production, acquisition, distribution, exhibition or exploitation
involving payment obligations owing to the Borrower or such Subsidiary (other
than advances against contractual rights to payment or other compensation made
to talent in the ordinary course of business) of Films will be secured, if such
Films are to be made in the United States, by Liens on such Films in favor of
the Borrower or such Subsidiary;
(d) Investments constituting loans and advances by the Borrower or any
Subsidiary to directors, officers and employees of Holdings, Borrower, or any
Subsidiary, in the ordinary course of business aggregating not in excess of
$2,000,000 at any time outstanding;
(e) Investments (other than Investments permitted by any of the foregoing
clauses) in existence on the date hereof and listed on Schedule 5.18;
(f) Investments made after the date hereof pursuant to a commitment to
make such Investments in existence on the date hereof and listed on Schedule
5.18;
(g) Investments (other than Investments permitted by any of the foregoing
clauses) by the Borrower or any Subsidiary in the form of equity interests of
Persons which are not Guarantors; provided that the aggregate net book value of
all Investments permitted by this clause (g) does not exceed $10,000,000;
(h) Investments (other than Investments permitted by any of the foregoing
clauses) on any date by the Borrower or any Subsidiary in Single Purpose
Subsidiaries; provided that the sum of the Invested Amount for all Single
Purpose Subsidiaries shall at no time exceed $25,000,000. For purposes of this
clause (h), "Invested Amount" means at any date, for any Single Purpose
Subsidiary, the aggregate net book value of all Investments made in such Single
Purpose Subsidiary (determined, with respect to each such Investment, at the
time such Investment is made) minus the aggregate return on equity received by
-----
the Borrower and its Subsidiaries on or prior to such date with respect to such
Investments in such Single Purpose Subsidiary;
74
(i) Temporary Cash Investments;
(j) Investments constituting loans made by the Borrower to Holdings but
only to the extent that the proceeds of such loans are applied by Holdings to
pay Holdings Expenses; provided that the sum of (x) the aggregate principal
amount of such loans made by the Borrower pursuant to this clause (j) and (y)
the aggregate amount of distributions made by the Borrower and permitted by
Section 5.17(d) will not exceed $1,000,000 in any Fiscal Year; and
(k) any Investment (other than Investments in Single Purpose Subsidiaries)
not otherwise permitted by the foregoing clauses of this Section if, immediately
after such Investment is made or acquired, the aggregate net book value of all
Investments permitted by this clause (k) does not exceed $25,000,000.
Section 5.19. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Borrower or such Subsidiary than could have been obtained from a third
party who was not an Affiliate; provided that the foregoing provisions of this
Section shall not prohibit (i) any such Person from declaring or paying any
lawful dividend or other payment ratably in respect of all of its capital stock
of the relevant class so long as, after giving effect thereto, no Default shall
have occurred and be continuing, (ii) the consummation of the transactions
contemplated by the Capital Call Agreement, (iii) the consummation of the
transactions contemplated by the agreements set forth on Schedule 5.19, as
amended to the date hereof and substantially in the forms heretofore distributed
to each of the Lenders, (iv) customary indemnification arrangements between the
Borrower and the directors and officers of Holdings, the Borrower, and each
Subsidiary, (v) customary tax sharing arrangements between or among Holdings,
the Borrower, and the Subsidiaries, (vi) dividends and distributions to Holdings
permitted under Section 5.17, (vii) maintenance of "D&O", "keyman" and similar
insurance by the Borrower or Holdings, including with respect to directors and
officers of Holdings, the Borrower, and the Subsidiaries and (viii) the Borrower
from entering into and performing the Xxxxxxx Employment Agreement.
Section 5.20. No Modification of Agreements Without Consent. The Borrower
will not, and will not permit any of its Subsidiaries to, consent to or
75
solicit any amendment or supplement to, or any waiver or other modification of
any Transaction Document or any of the ancillary agreements referred to therein
in any manner which could reasonably be expected to adversely affect the rights
of the Agent or the Lenders under this Agreement or the Notes or the other Loan
Documents or their ability to enforce the same.
Section 5.21. Limitation on Restrictions Affecting Subsidiaries. Neither
the Borrower nor any of its Subsidiaries (other than any Single Purpose
Subsidiary) will enter into, or suffer to exist, any agreement with any Person,
other than this Agreement, which prohibits or limits the ability of any
Subsidiary to (a) pay dividends or make other distributions or pay any Debt owed
to Borrower or any Subsidiary, (b) make loans or advances to Borrower or any
Subsidiary, (c) transfer any of its properties or assets to Borrower or any
Subsidiary or (d) create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired
(other than with respect to assets subject to consensual liens permitted under
Section 5.09); provided that the foregoing shall not apply to (i) provisions
restricting assignment of any lease or other contract, (ii restrictions imposed
by applicable law, (ii restrictions under any agreement relating to any
property, asset or business acquired by the Borrower or any of its Subsidiaries,
which restrictions existed at the time of acquisition, (iv restrictions with
respect solely to a Subsidiary or the Borrower imposed pursuant to a binding
agreement (subject only to customary closing conditions and termination
provisions) that has been entered into for the sale or disposition of all or
substantially all of the capital stock or assets to be sold of such Subsidiary,
provided that such sale is permitted under Section 5.07(b) hereof, (v) customary
restrictions on transfer of Collateral imposed on such Collateral in connection
with Liens on such Collateral securing Debt, to the extent such Liens are
permitted under Section 5.09 hereof , (vi restrictions in effect on the date of
this Agreement contained in agreements governing Debt of Foreign Subsidiaries
outstanding on the date of this Agreement, and (vi restrictions ("New
Restrictions") set forth in replacements of agreements or instruments ("Replaced
Agreements") containing restrictions described in clauses (iii) or (vi);
provided that such New Restrictions are no more restrictive in any material
respect than the restrictions set forth in the relevant Replaced Agreement and
do not apply to any additional property or assets.
Section 5.22. Holdings Debt. The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, redeem, retire, purchase,
acquire, defease or otherwise make any payment in respect of the principal of
any Holdings Debt.
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Section 5.23. Hedging Facilities. Not later than 60 days after the Closing
Date the Borrower will have entered into and thereafter maintain in full force
and effect interest rate agreements in such amounts and on such terms as shall
result in effectively limiting the interest cost to the Borrower on the Term
Loans in an aggregate notional principal amount not less than $300,000,000 for a
period of three years beginning on such date, all on terms and conditions
reasonably satisfactory to the Required Lenders.
Section 5.24. Further Assurances. (a) The Borrower will, and will cause
each Guarantor to, at the Borrower's sole cost and expense, do, execute,
acknowledge and deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment and transfers as the Agent shall from time to
time request, which may be necessary in the reasonable judgment of the Agent
from time to time to assure, perfect, convey, assign and transfer to the Agent
the property and rights conveyed or assigned pursuant to the Collateral
Documents.
(b) All costs and expenses in connection with the grant of any security
interests under the Collateral Documents, including without limitation
reasonable legal fees and other reasonable costs and expenses in connection with
the granting, perfecting and maintenance of any security interests under the
Collateral Documents or the preparation, execution, delivery, recordation or
filing of documents and any other acts as the Agent may reasonably request in
connection with the grant of such security interests shall be paid by the
Borrower promptly upon demand.
(c) The Borrower will not, and will not permit any of its Subsidiaries to,
enter into or become subject to any agreement which would impair their ability
to comply, or which would purport to prohibit them from complying, with the
provisions of this Section.
(d) The Borrower will cause each Material Subsidiary acquired after the
Closing Date and each Subsidiary which becomes a Material Subsidiary after the
Closing Date (in each case, other than a Foreign Subsidiary and a Single Purpose
Subsidiary) (i) to become a party to the Subsidiary Guaranty as guarantor by
executing a supplement thereof in form and substance satisfactory to the Agent
and (ii) to enter into a Security Agreement and any other agreements as may be
necessary or desirable in order to grant perfected first priority security
interests upon all of its assets to secure its obligations under the Subsidiary
Guaranty. In addition, the Borrower will pledge, or cause to be pledged,
pursuant to a Pledge Agreement, all of the capital stock or other equity
interests of such Material Subsidiary owned directly or indirectly by the
Borrower (or, if such Material Subsidiary is a Foreign Subsidiary, 66% of the
capital stock or equity interests of
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such Material Subsidiary). The Borrower shall cause each such Material
Subsidiary to take such actions as may be necessary or desirable to effect the
foregoing within 30 days after such Material Subsidiary is acquired or becomes a
Material Subsidiary, as the case may be, including without limitation causing
such Material Subsidiary to (x) execute and deliver to the Agent such number of
copies as the Agent may specify of such supplements and Security Agreement and
other documents creating security interests and (y) deliver such certificates,
evidences of corporate action or other documents as the Agent may reasonably
request, all in form and substance satisfactory to the Agent, relating to the
satisfaction of the Borrower's obligations under this Section. Upon compliance
by the Borrower with the provisions of this subsection (d), Schedule 4.09 shall
be deemed to have been amended to reflect that such Material Subsidiary is a
Guarantor.
(e) The Borrower will, and will cause each of its Subsidiaries to, take
all action necessary in accordance with good business practices to (i) maintain
in full force and effect (x) all trademarks, service marks, trade names and
licenses and all material rights with respect to the foregoing, necessary for
the conduct of its business as now conducted (collectively, the "Trademarks")
and (y) all copyrights (including without limitation any copyrights relating to
Library Films) and all material rights with respect thereto, necessary for the
conduct of its business as now conducted (collectively, the "Copyrights"), other
than such Trademarks and Copyrights which the Borrower reasonably determines
are, in the aggregate, of insignificant or non-material economic value, or where
the failure to maintain such Trademarks or Copyrights could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, and (ii)
protect all Trademarks and all Copyrights against infringement by third parties,
other than such Trademarks and Copyrights which the Borrower reasonably
determines are, in the aggregate, of insignificant or non-material economic
value or where the failure to maintain such Trademarks or Copyrights could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(f) The Borrower will, and will cause each of its Subsidiaries to, submit
to the United States Copyright Office or other applicable United States
Governmental Authority (with a copy to the Agent) as soon as reasonably
practicable but in any event, with respect to any Film, no later than 90
Domestic Business Days after the date of release of such Film and, with respect
to any screenplay, within 30 Domestic Business Days after commencement of
principal photography of the relevant Film (i) with respect to each screenplay
or Film which is unregistered and to which the Borrower or any Subsidiary owns
the copyright, a completed application for copyright registration and (ii) with
respect to each screenplay and Film which is registered in the name of a Person
other than the Borrower or any of its Subsidiaries, and in which the Borrower
or any
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Subsidiary acquires the copyright or any rights in the copyright, an assignment
to the Borrower or such Subsidiary of the interest owned by it.
(g) The Borrower will, and will cause each other Obligor party to a
Security Agreement to, provide a Laboratory Pledgeholder Agreement (as defined
in a Security Agreement) with each laboratory which holds any material film
and/or sound materials, cause such Laboratory Pledgeholder Agreements to remain
in full force and effect during all times when such laboratory is in possession
of such elements, and, pursuant to the Laboratory Pledgeholder Agreements, with
respect to each Film, deliver to the Agent a laboratory access letter,
substantially in the form of Exhibit B thereto, to each laboratory holding any
material film and/or sound materials.
Section 5.25. Minimum Number of Films. The number of feature Films
produced by the Borrower for general theatrical release during any Fiscal Year
beginning with Fiscal Year 1998 will be at least equal to 9.
ARTICLE 6
Defaults
Section 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower (i) shall fail to pay when due any principal of any
Loan, (ii) shall fail to reimburse when due any drawing under any Letter of
Credit or (iii) shall fail to pay within 5 days after the due date thereof
any interest, any fees or any other amount payable hereunder;
(b) (i) the Borrower shall fail to observe or perform any covenant
contained in Article 5 (other than those contained in Sections 5.01 through
5.06, inclusive and Sections 5.24(a), (b), (c), (e), (f) and (g)) or (ii)
any Obligor shall fail to observe or perform any covenant contained in
Sections 4(A), (E) or (H) of the Security Agreement or (iii) the Borrower
shall fail to observe or perform any covenant contained in Section 3(B) of
the Borrower Pledge Agreement or any other Obligor shall fail to observe or
perform any covenant contained in the Pledge Agreement to which such
Obligor is a party containing provisions substantially similar to those set
forth in Section 3(B) of the Borrower Pledge Agreement or (iv) Holdings
shall fail to observe or perform any covenant contained in Sections 2.1,
2.3, 2.3 or 2.5 of the Holdings Agreement or (v) except with or pursuant to
the prior written consent or waiver of all Lenders, Tracinda, Seven
Network, Holdings or the
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Borrower shall fail to perform any of its obligations under the Capital
Call Agreement (and, solely in the case of any failure by either Tracinda
or Seven Network (each of them, an "Investor") to perform any of their
respective obligations thereunder, such obligations shall not have been
fully performed in a timely manner in accordance with the terms of the
Capital Call Agreement by the other Investor);
(c) any Obligor shall fail to observe or perform any covenant or
agreement contained in the Loan Documents (other than those covered by
clause (a) or (b) above) for 30 days after notice thereof has been given to
the Borrower by the Agent;
(d) (i) any representation, warranty or certification made by any
Obligor in any Loan Document or by any Investor in the Capital Call
Agreement or in any certificate or other document delivered pursuant to any
Loan Document or the Capital Call Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) Holdings, the Borrower or any Subsidiary shall fail to make any
payment in respect of any Debt and/or payment or collateralization
obligations in respect of Derivatives Obligations of Holdings or any of its
Subsidiaries when due or within any applicable grace period, if the
aggregate principal or face amount of Debt and/or payment or
collateralization obligations (regardless of whether such Debt and/or
payment or collateralization obligations arise in one or more related or
unrelated transactions) with respect to which such failure or failures
shall have occurred exceeds $5,000,000;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Debt (other than the Notes) of Holdings
or any of its Subsidiaries or enables the holder of such Debt or any Person
acting on such holder's behalf to accelerate the maturity thereof, if the
aggregate principal amount of Debt (regardless of whether such Debt arises
in one or more related or unrelated transactions) with respect to which
such events or conditions shall have occurred exceeds $5,000,000;
(g) Holdings, the Borrower or any Material Subsidiary shall commence
a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any domestic or
foreign bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
80
its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced
against Holdings, the Borrower or any Material Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any domestic or foreign bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 90 days;
or an order for relief shall be entered against Holdings, the Borrower or
any Material Subsidiary under any domestic or foreign bankruptcy laws as
now or hereafter in effect;
(i) (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
Holdings 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) notice of intent to terminate a Single
Employer Plan shall be filed under Title IV of ERISA by Holdings or a
Commonly Controlled Entity, (v) Holdings or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is 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 reasonably be expected to
have a Material Adverse Effect;
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(j) judgments or orders for the payment of money in excess of $10,000,000
(net of any amount (x) covered by insurance and with respect to which the
relevant insurance carrier has acknowledged coverage or (y) covered by a third-
party indemnity from a solvent third party financially capable of making such
payments (as determined by the Required Lenders on the basis of information
provided by the Borrower) and with respect to which such third party has
acknowledged a contractual obligation to make payment thereunder) shall be
rendered and properly entered against Holdings, the Borrower or any Subsidiary
and such judgments or orders shall continue unsatisfied and unstayed for a
period of 60 days;
(k) any Lien created by any of the Collateral Documents in respect of a
substantial portion of the Collateral shall at any time fail to constitute a
valid and (to the extent required by the Collateral Documents) perfected Lien
securing the obligations purported to be secured thereby, with the priority
required by the Loan Documents, or any Obligor shall so assert in writing;
(l) the Subsidiary Guaranty shall at any time fail to constitute a valid
and binding agreement of each Obligor party thereto, or any Obligor shall so
assert in writing; or
(m) (i) Holdings shall cease to be the record and beneficial owner of 100%
of the issued and outstanding capital stock of the Borrower; or (ii) at any
date, any person or group of Persons (within the meaning of Section 13 or 14 of
the Securities Exchange Act of 1934, as amended) (other than Tracinda and Seven
Network) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said Act) of
20% or more of the outstanding shares of common stock of Holdings and if such
---
date occurs prior to the completion of a Significant Initial Public Offering (as
derined in the Management Stock Incentive Plan) of the common stock of Holdings,
on such date Tracinda and Seven Network fail to beneficially own in the
aggregate stock representing at least 51% of the Voting Power; or (iii) Xxxxx
Xxxxxxx shall cease to be chief executive officer of the Borrower and a
successor shall not have been appointed by the Borrower which successor is of
reasonably comparable stature in the entertainment industry; or (iv), during any
period of 12 consecutive calendar months which period begins on or after the
completion of a Significant Public Offering (as defined in the Management Stock
Incentive Plan), individuals who were either (x) directors of Holdings on the
first day of such period or (y) elected to fill vacancies caused by the ordinary
course resignation
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(including without limitation any such resignation effected by such
director declining to stand for reelection), retirement, death or
disability of any other director and whose nomination or election was
approved by a vote of at least a majority of the directors then still in
office who were directors of Holdings on the first day of such period,
shall cease to constitute a majority of the board of directors of
Holdings; (as used herein, "Voting Power" means, with respect to any
outstanding capital stock of Holdings, the power (expressed as a
percentage) represented by such capital stock of the aggregate voting
power of all outstanding shares of any class of capital stock of Holdings
having ordinary voting power, including the power to vote for election of
the members of the board of directors of Holdings (or, if any class
thereof has power to designate members of the board of directors of
Holdings or any special committee thereof, the power to so designate));
then, and in every such event, the Agent shall (i) if requested by Lenders
having more than 50% in aggregate amount of the Commitments, by notice to the
Borrower terminate the Commitments and they shall thereupon terminate, and (ii)
if requested by Lenders holding more than 50% of the sum of (x) the aggregate
principal amount of the Loans then outstanding and (y) the Letter of Credit
Liabilities then outstanding, by notice to the Borrower declare the Loans and
the Letter of Credit Liabilities (in each case together with accrued interest
thereon) to be, and the Loans and the Letter of Credit Liabilities shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to the Borrower, without any notice to
the Borrower or any other act by the Agent or the Lenders, the Commitments shall
thereupon terminate and the Loans and the Letter of Credit Liabilities ( in each
case together with accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
Section 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by the
Required Lenders and shall thereupon notify all the Lenders thereof.
Section 6.03. Cash Cover. The Borrower agrees, in addition to the
provisions of Section 6.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the Agent upon
the instruction of the Lenders having more than 50% in aggregate amount of the
Revolving Exposure, pay to the Agent an amount in immediately available funds
83
(which funds shall be held as collateral and applied pursuant to the Security
Agreement) equal to the aggregate amount available for drawing under all Letters
of Credit then outstanding at such time, provided that, upon the occurrence of
--------
any Event of Default specified in Section 6.01(g) or 6.01(h) with respect to the
Borrower, the Borrower shall pay such amount forthwith without any notice or
demand or any other act by the Agent or the Lenders.
ARTICLE 7
The Agent
Section 7.01. Appointment and Authorization. Each Lender irrevocably
appoints and authorizes the Agent to enter into and act as its agent in
connection with the Collateral Documents and to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
Section 7.02. Agent and Affiliates. Xxxxxx Guaranty Trust Company of New
York shall have the same rights and powers under the Loan Documents as any other
Lender and may exercise or refrain from exercising the same as though it were
not the Agent, and Xxxxxx Guaranty Trust Company of New York and its affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower as if
it were not the Agent.
Section 7.03. Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6 .
Section 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for any Obligor), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
Section 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Lenders (or, when
expressly required
84
hereby, such different number of Lenders required to consent to or to request
such action or inaction) or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with the Loan Documents or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Obligor; (iii) the satisfaction of any condition specified in
Article 3 , except receipt of items required to be delivered to the Agent; (iv)
the validity, effectiveness or genuineness of the Loan Documents or any other
instrument or writing furnished in connection herewith or (v) the existence or
the value of any of the Collateral. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties. Without limiting the generality of the foregoing, the use of the term
"agent" in the Loan Documents with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine or any applicable law. Instead, such term is used merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.
Section 7.06. Indemnification. Each Lender shall, ratably in accordance
with its Commitment (or, if the Commitments of the relevant Class shall have
terminated, with the aggregate outstanding principal amount of the Loans of such
Class held by such Lender) indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with the Loan Documents or any
action taken or omitted by such indemnitees thereunder.
Section 7.07. Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the 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 decisions in taking or
not taking any action under the Loan Documents.
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Section 7.08. Successor Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent with, so long
as no Default has occurred and is continuing, the consent of the Borrower (which
consent shall not be unreasonably withheld). If no successor Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial Lender organized or licensed under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $100,000,000. Upon the acceptance of
its appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
Section 7.09. Agent's Fee. The Borrower shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon between the
Borrower and the Agent.
Section 7.10. Arranger. The Arranger, in its capacity as such, shall have
no duties or obligations under the Loan Documents and shall not have a fiduciary
relationship with any Lender.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Euro-Dollar Loan:
(a) the Agent is advised by the Reference Lenders that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Lenders in the London interbank market for such Interest Period, or
(b) Lenders having 50% or more of the aggregate principal amount of
the affected Loans advise the Agent that the Adjusted London Interbank
Offered Rate as determined by the Agent will not adequately
86
and fairly reflect the cost to such Lenders of funding their Euro-Dollar
Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Lenders,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Lenders to
make Euro-Dollar Loans or to continue or convert outstanding Loans as or into
Euro-Dollar Loans shall be suspended and (ii) each outstanding Euro-Dollar Loan
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Agent at
least two Domestic Business Days before the date of any Euro-Dollar Borrowing
for which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.
Section 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Lender (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Lender shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Lenders and the Borrower, whereupon until such Lender
notifies the Borrower and the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Lender to make Euro-Dollar
Loans, or to convert outstanding Loans into Euro-Dollar Loans, shall be
suspended. Before giving any notice to the Agent pursuant to this Section, such
Lender shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender. If such
notice is given, each Euro-Dollar Loan of such Lender then outstanding shall be
converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such Euro-Dollar Loan if such Lender may lawfully
continue to maintain and fund such Loan to such day or (b) immediately if such
Lender shall determine that it may not lawfully continue to maintain and fund
such Loan to such day.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable
87
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender (or its Applicable Lending
Office) or shall impose on any Lender (or its Applicable Lending Office) or the
London interbank market any other condition affecting its Euro-Dollar Loans, its
Note or its obligation to make Euro-Dollar Loans or its obligations hereunder
with respect to Letters of Credit and the result of any of the foregoing is to
increase the cost to such Lender (or its Applicable Lending Office) of making or
maintaining any Euro-Dollar Loan or of issuing or participating in any Letter of
Credit, or to reduce the amount of any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Lender to be material, then, within
15 days after demand by such Lender (with a copy to the Agent), the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction.
(b) If any Lender shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Lender (or its Parent) as a consequence of such Lender's obligations
hereunder to a level below that which such Lender (or its Parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, within 15 days after
demand by such Lender (with a copy to the Agent), the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender (or its
Parent) for such reduction.
(c) Each Lender will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Lending Office if such designation will avoid the need for, or
reduce the
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amount of, such compensation and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate of any Lender claiming
compensation under this Section and setting forth in reasonable detail the
additional amount or amounts to be paid to it hereunder and the method of
calculation thereof shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
Section 8.04. Taxes. (a) For the purposes of this Section 8.04, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
any Obligor pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Lender
and the Agent, taxes imposed on its income, and franchise or similar taxes
imposed on it, by a jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or in which its principal executive
office is located or, in the case of each Lender, in which its Applicable
Lending Office is located and (ii) in the case of each Lender, any United
States withholding tax imposed on such payments but only to the extent that
such Lender is subject to United States withholding tax at the time such
Lender first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or
from the execution or delivery of, or otherwise with respect to, any Loan
Document.
(b) Any and all payments by any Obligor to or for the account of any
Lender or the Agent hereunder or under any Note shall be made without deduction
for any Taxes or Other Taxes; provided that, if any Obligor shall be required by
law to deduct any Taxes or Other Taxes from any such payments, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) such Lender or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Obligor shall make such deductions, (iii) such Obligor shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) such Obligor shall furnish to the Agent,
at its address
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referred to in Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be paid within 15 days after such
Lender or the Agent (as the case may be) makes demand therefor.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Agent with either (i) Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which exempts the Lender from
United States withholding tax or reduces the rate of withholding tax on payments
of interest for the account of such Lender or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States or (ii) if such Lender is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit L and (y) two accurate
and complete original signed copies of Internal Revenue Service Form W-8 or any
successor form prescribed by the Internal Revenue Service) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments of interest and fees (if applicable) made under this
Agreement and under any Note.
(e) For any period with respect to which a Lender has failed to provide
the Borrower or the Agent with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Lender shall not be entitled to indemnification under Section
8.04(b) or (c) with respect to Taxes imposed by the United States. In addition,
for any period with respect to which a Lender described in clause (ii) of
Section 8.4(d) above has delivered Internal Revenue Service Form W-8 (or any
successor
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form prescribed by the Internal Revenue Service) pursuant to such Section but
such form does not establish a complete exemption from deduction of withholding
or similar taxes imposed by the United States, such Lender shall not be entitled
to indemnification under Section 8.4(b) or (c) with respect to Taxes imposed by
the United States with respect to payments made under this Agreement or any Note
(other than with respect to any such payments constituting payments of
interest). If a Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take, at the cost of such
Lender, such steps as such Lender shall reasonably request to assist such Lender
to recover such Taxes.
(f) If any Obligor is required to pay additional amounts to or for the
account of any Lender pursuant to this Section, then such Lender will change the
jurisdiction of its Applicable Lending Office if, in the judgment of such
Lender, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Lender.
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Lender to make, or convert outstanding Loans to,
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Lender has demanded compensation under Section 8.03 or 8.04 with respect to its
Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Lender through the Agent, have elected that the
provisions of this Section shall apply to such Lender, then, unless and until
such Lender notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Lender as (or
continued as or converted into) Euro-Dollar Loans shall instead be Base
Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Lenders);
and
(b) after each of its Euro-Dollar Loans has been repaid (or converted
to a Base Rate Loan), all payments of principal which would otherwise be
applied to repay such Euro-Dollar Loans shall be applied to repay its Base
Rate Loans instead.
If such Lender notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be
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converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other
Lenders.
Section 8.06. Substitution of Lender. If (i) the obligation of any
Lender to make or convert Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03 or
8.04, the Borrower shall have the right, with the assistance of the Agent, to
seek a mutually satisfactory substitute lender or lenders (which may be one or
more of the Lenders) to purchase the Note and assume the outstanding Loans, the
Commitment (if any) and the Letter of Credit Liabilities (if any) of such
Lender. Each such Lender agrees to assign all of its outstanding Loans, its
Commitment (if any), its Note or Notes and its Letter of Credit Liabilities (if
any) to any such substitute lender, without recourse or warranty other than
title and outstanding amount; provided that such substitute lender shall have
paid to such Lender in immediately available funds the principal of and accrued
interest to the date of such payment on its outstanding Loans and Letter of
Credit Liabilities (if any) and all fees owed to it hereunder.
ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission (with a copy by Unites States mail) or similar writing) and shall
be given to such party: (w) in the case of the Borrower or the Agent, at its
address, facsimile number or telex number set forth on the signature pages
hereof, (x) in the case of any Guarantor, in care of the Borrower, (y) in the
case of any Lender, at its address, facsimile number or telex number set forth
in its Administrative Questionnaire or (z) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article 2 or Article 8 shall not be effective until received.
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Section 9.02. No Waivers. No failure or delay by the Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Loan
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of each special counsel for the Agent, in connection with the
preparation and administration of the Loan Documents, any waiver or consent
thereunder or any amendment thereof or any Default or alleged Default
thereunder, (ii) the reasonable fees and expenses of consultants and other
experts retained by the Agent or the Required Lenders with the consent of the
Borrower (which consent shall not be unreasonably withheld); provided that, if
such consultants or other experts shall have been retained in connection with
any Default under the Loan Documents, no such consent shall be required and
(iii) if an Event of Default occurs, all out-of-pocket expenses incurred by the
Agent and each Lender, including (without duplication) the reasonable fees and
disbursements of outside counsel and the allocated cost of inside counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Lender, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of the Loan Documents or any actual or proposed use
of proceeds of Loans hereunder; provided that no Indemnitee shall have the right
to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
Section 9.04. Sharing of Set-offs. Each Lender agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest then due with
respect to any Note and any Letter of Credit
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Liabilities held by it which is greater than the proportion received by any
other Lender in respect of the aggregate amount of principal and interest then
due with respect to any Note and Letter of Credit Liabilities held by such other
Lender, the Lender receiving such proportionately greater payment shall purchase
such participations in the Notes held by the other Lenders, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest then due with respect to the Notes and Letter of Credit
Liabilities held by the Lenders shall be shared by the Lenders pro rata;
provided that nothing in this Section shall impair the right of any Lender to
exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of any Obligor
other than its indebtedness hereunder. Each Obligor agrees, to the fullest
extent it may effectively do so under applicable law, that any holder of a
participation in a Note or Letter of Credit Liabilities, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of such Obligor in the
amount of such participation.
Section 9.05. Amendments and Waivers; Release of Guarantors or Collateral.
Any provision of this Agreement or the Notes may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Borrower
and the Required Lenders (and, if the rights or duties of the Agent or any L/C
Issuer are affected thereby, by the Agent or such L/C Issuer, as relevant);
provided that no such amendment or waiver shall:
(a) unless signed by all the Lenders with a Commitment of any Class,
increase or decrease the Commitments of such Class (except for a ratable
decrease in all the Commitments of such Class), subject any such Lender to
any additional obligation, or postpone the date fixed for the scheduled
termination of any Commitment of such Class;
(b) unless signed by all Lenders holding Loans of any Class, reduce
the principal of or rate of interest on any Loans of, or fees with respect
to, such Class, postpone the date fixed for any scheduled payment of such
fees or the principal of or interest on any such Loans, or decrease the
aggregate amount by which such Loans are required to be repaid on any date
scheduled pursuant to Section 2.04 or postpone any date for such repayment;
(c) unless signed by all Revolving Lenders, reduce the amount to be
reimbursed in respect of any Letter of Credit or of any interest with
respect to any Letter of Credit Liabilities or any fees payable by
reference to the Letters of Credit hereunder, postpone the date fixed for
any payment of the amount to be reimbursed in respect of any Letter of
Credit or any interest thereon or any fees payable by reference to the
Letters of Credit
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hereunder or (except as expressly provided in Section 2.14) expiry date of
any Letter of Credit;
(d) unless signed by the Swing Lender and each other Lender affected
thereby, increase the Swing Loan Commitment, postpone the date fixed for
the termination of the Swing Loan Commitment or otherwise affect any of its
rights or obligations hereunder;
(e) unless signed by all the Lenders, postpone the date fixed for any
payment of any fees hereunder, change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes or the Letter of
Credit Liabilities or the number of Lenders, which shall be required for
the Lenders or any of them to take any action under this Section or any
other provision of this Agreement.
Any provision of the Loan Documents (other than this Agreement and the Notes)
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the relevant Obligor and the Agent with the consent of the
Required Lenders; provided that no such amendment or waiver shall, unless signed
by all the Lenders, effect or permit (i) a release of all or substantially all
of the Collateral, (ii) a release of all or substantially all of the Guarantors
from their obligations under the Subsidiary Guaranty or (iii) a release of any
Investor (as defined in Section 6.01(b)) or Holdings from its respective
obligations under the Capital Call Agreement. Notwithstanding the foregoing,
Collateral shall be released from the Lien of the Collateral Documents from time
to time as necessary to effect any sale or pledge of assets permitted by the
Loan Documents, and the Agent shall execute and deliver all release documents
reasonably requested to evidence such release.
Section 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that no Obligor may assign
or otherwise transfer any of its rights under this Agreement and the other Loan
Documents without the prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more Lenders or other
institutions (other than a Competitor) (each a "Participant") participating
interests in its Commitment or any or all of its Loans or Letter of Credit
Liabilities. In the event of any such grant by a Lender of a participating
interest to a Participant, whether or not upon notice to the Borrower and the
Agent, such Lender shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such
95
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Lender will not agree to any modification,
amendment or waiver of this Agreement described in clause (a), (b), (c), or (d)
of, or in the proviso in the penultimate sentence of, Section 9.05 without the
consent of the Participant. The Borrower agrees that, without duplication of
amounts payable to the relevant Lender, each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Lender may at any time assign to one or more Lenders or other
institutions (including any fund that regularly engages in making, purchasing or
investing in loans) (each an "Assignee") all, or a proportionate part of all,
of its rights and obligations under this Agreement and the Notes with respect to
its Commitment of any Class or its outstanding Loans of any Class or its letter
of Credit Liabilities, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in substantially
the form of Exhibit I hereto executed by such Assignee and such transferor
Lender, with (and subject to) the subscribed consent of the Borrower, which
shall not be unreasonably withheld, the Agent and, solely with respect to any
assignment of the Revolving Commitments, Revolving Loans or Letter of Credit
Liabilities, the L/C Issuers and the Swing Lender; provided that (i) if an
Assignee is an affiliate of such transferor Lender or was a Lender immediately
prior to such assignment, no such consent shall be required, (ii) if such
transferor Lender pursuant to such assignment assigns to an Assignee a part (but
not all) of its Commitment or Loans of any Class or its Letter of Credit
Liabilities, then the sum of (x) the aggregate amount of the Commitments of all
Classes (if any), (y) the aggregate outstanding principal amount of the Loans of
all Classes (if any) and (z) the aggregate Letter of Credit Liabilities (if any)
held by such Assignee immediately after giving effect to such assignment and
retained by the transferor Lender immediately after giving effect to such
assignment shall each be at least $5,000,000 and (iii) no Lender shall enter
into any assignment with a Competitor. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be a Lender party to this Agreement and shall have
all the rights and obligations of a Lender with a Commitment as set forth in
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such instrument of assumption, and the transferor Lender shall be released from
its obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Lender, the Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note is
issued to the Assignee. In connection with any such assignment, the transferor
Lender shall pay to the Agent an administrative fee for processing such
assignment in the amount of $3,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall deliver to
the Borrower and the Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.04 .
(d) Any Lender may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Lender from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Lender's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04 than
such Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made (x) with the Borrower's prior written
consent or (y) by reason of the provisions of Section 8.02 , 8.03 or 8.04
requiring such Lender to designate a different Applicable Lending Office under
certain circumstances or (z) at a time when the circumstances giving rise to
such greater payment did not exist.
(f) For purposes of this Section 9.06, "Competitor" means any Person whose
primary line of business is the entertainment industry (any such Person, an
"Entertainment Person"), or any Person controlled by, or under common control
with, any Entertainment Person.
(g) The Borrower hereby designates the Agent to serve as the Borrower's
agent, solely for purposes of this subsection 9.06(g), to maintain a register
(the "Register") on which the Agent will record the Commitments from time to
time of each Lender, the Loans made by each Lender and each repayment in respect
of the principal amount of the Loans of each Lender and to retain a copy of each
Assignment and Assumption Agreement delivered to the Agent pursuant to this
Section. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligation in respect of such
Loans. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders shall treat each
Person in whose name a Loan and the Note evidencing the same is registered as
the owner thereof for all purposes of this Agreement, notwithstanding notice or
any provision herein to the
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contrary. With respect to any Lender, the assignment or other transfer of the
Commitments of such Lender and the rights to the principal of, and interest on,
any Loan made and Note issued pursuant to this Agreement shall not be effective
until such assignment or other transfer is recorded on the Register and, except
to the extent provided in this subsection 9.06(g), otherwise complies with
Section 9.06, and prior to such recordation all amounts owing to the transferor
Lender with respect to such Commitments, Loans and Notes shall remain owing to
the transferor Lender. The registration of assignment or other transfer of all
or part of any Commitments, Loans and Notes for a Lender shall be recorded by
the Agent on the Register only upon the acceptance by the Agent of a properly
executed and delivered Assignment and Assumption Agreement. The Register shall
be available at the offices where kept by the Agent for inspection by the
Borrower and any Lender at any reasonable time upon reasonable prior notice to
the Agent. The Borrower may not replace any Lender pursuant to Section 8.06,
unless, with respect to any Notes held by such Lender, the requirements of
subsection 9.06(c) have been satisfied.
Section 9.07. Collateral. Each of the Lenders represents to the Agent and
each of the other Lenders that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
Section 9.08. Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. Each Obligor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Obligor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
Section 9.09. Counterparts; Integration; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Agent of counterparts
hereof signed by each of the parties hereto (or, in the case of any party as to
which
98
an executed counterpart shall not have been received, receipt by the Agent in
form satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by such
party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND
THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.11. Confidentiality. The Agent and each Lender agrees to keep
any information delivered or made available by any Obligor pursuant to the Loan
Documents confidential from anyone other than persons employed or retained by
such Lender who are engaged in evaluating, approving, structuring or
administering the credit facility contemplated hereby; provided that nothing
herein shall prevent the Agent or any Lender from disclosing such information
(a) to any other Lender or to the Agent, (b) to any other Person if reasonably
incidental to the administration of the credit facility contemplated hereby, (c)
upon the order of any court or administrative agency, (d) upon the request or
demand of any regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by the Agent or any Lender
prohibited by this Agreement, (f) in connection with any litigation to which the
Agent, any Lender or its subsidiaries or Parent may be a party, (g) to the
extent necessary in connection with the exercise of any remedy hereunder, (h) to
such Lender's or Agent's legal counsel and independent auditors and (i) subject
to provisions substantially similar to those contained in this Section, to any
actual or proposed Participant or Assignee.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
METRO-XXXXXXX-XXXXX INC.
By/s/ Xxxxxxx X. Hope
-----------------------------------
Title: Executive Vice President
Address: 0000 Xxxxxxxx Xx.
Xxxxx Xxxxxx, XX 00000
Telex: 000-000-0000
Facsimile: 000-000-0000
000
XXXXXX XXXXXXXX XXXXX
XXXXXXX XX XXX XXXX
By /s/ R. Xxxxx Xxxxxxxxxxxx
---------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxx
---------------------------
Title: Vice President
SOCIETE GENERALE
NEW YORK BRANCH
By /s/ Xxxxxxx X. Xxxxx
--------------------------
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Xxxxxxxx X. Xxxx
--------------------------
Title: Vice President
101
THE LONG-TERM CREDIT BANK OF
JAPAN LIMITED, LOS ANGELES
AGENCY
By /s/ Xxxxxxx Xxxx
---------------------------------
Title: Joint General Manager
THE BANK OF NOVA SCOTIA
By /s/ Xxxx X. Xxxxxxxxxx
---------------------------------
Title: Relationship Manager
CANADIAN IMPERIAL BANK OF
COMMERCE
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Title: Director, CIBC Wood Gundy
Securities Corp., as agent
GENERAL ELECTRIC CAPITAL
CORPORATION
By /s/ Xxxx X. Xxxxxxx
--------------------------------
Title: Duly Authorized Xxxxxx
000
XXXXX XXXX XX XXXXXXXXXX, N.A.
By /s/ Xxxx Xxxxxxxxxxx
-----------------------------
Title: Vice President/Manager
Entertainment Division
FLEET NATIONAL BANK
By /s/ Xxxxxxx X. Xxxxxx
----------------------------
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Title: Senior Vice President
MITSUBISHI TRUST & BANKING
CORPORATION
By /s/ Yasushi Satomi
----------------------------
Title: Senior Vice President
103
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By /s/ Xxxx X. Xxxxx
-----------------------------------------
Title: Managing Director
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By /s/ Xxxxxx Xxxxxxxx, CFA
-----------------------------------------
Title: Authorized Signatory
PROTECTIVE LIFE INSURANCE CO.
By /s/ Xxxx X. Xxxxx CFA
------------------------------------------
Title: Executive Vice President
Protective Asset Management, L.L.C.
BANK OF HAWAII
By /s/ Xxxxxxxxx X. XxXxxxx
------------------------------------------
Title: Vice President
104
BANQUE WORMS CAPITAL CORP.
By /s/ Xxxxxxxx Xxxxx
-------------------------------
Title: Senior Vice President
By /s/ Xxxxxxx Xxxxxx-Breij
-------------------------------
Title: Assistant Vice President
CITY NATIONAL BANK, A NATIONAL
BANKING ASSOCIATION
By /s/ Xxxxxxx X. XxXxxx
-------------------------------
Title: Vice President
PILGRIM AMERICA PRIME RATE TRUST
By /s/ Xxxxxx X. Xxxx
-------------------------------
Title: Portfolio Analyst
THE SUMITOMO BANK, LIMITED
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Title: Vice President
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Title: Vice President
105
ING CAPITAL ADVISORS, AS AGENT FOR
BANK SYNDICATION ACCOUNTS
By /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------
Title: Vice President &
Portfolio Manager
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ R. Xxxxx Xxxxxxxxxxxx
---------------------------
Title: Vice President
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000-0000
Attention: Xxxxxxx Xxxxx
Facsimile number: 000-000-0000
106
