Exhibit 4.3
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$340,000,000
CREDIT AGREEMENT
AMONG
PANAVISION INC.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
CHASE SECURITIES INC.,
AS ADVISOR AND ARRANGER,
CREDIT SUISSE FIRST BOSTON,
AS DOCUMENTATION AGENT
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF MAY 28, 1998
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TABLE OF CONTENTS
Page
SECTION I. DEFINITIONS.................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 26
SECTION II. AMOUNT AND TERMS OF COMMITMENTS............................... 27
2.1 Term Loan Commitments........................................... 27
2.2 Procedure for Term Loan Borrowing............................... 27
2.3 Repayment of Term Loans......................................... 27
2.4 Revolving Credit Commitments.................................... 29
2.5 Procedure for Revolving Credit Borrowing........................ 29
2.6 Repayment of Loans; Evidence of Debt............................ 29
2.7 Fees, etc. ..................................................... 30
2.8 Termination or Reduction of Revolving Credit Commitments........ 31
2.9 Optional Prepayments............................................ 31
2.10 Mandatory Prepayments and Commitment Reductions................ 32
2.11 Conversion and Continuation Options............................ 33
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches...... 33
2.13 Interest Rates and Payment Dates............................... 34
2.14 Computation of Interest and Fees............................... 34
2.15 Inability to Determine Interest Rate........................... 35
2.16 Pro Rata Treatment and Payments................................ 35
2.17 Requirements of Law............................................ 38
2.18 Taxes.......................................................... 39
2.19 Indemnity...................................................... 41
2.20 Illegality..................................................... 41
2.21 Change of Lending Office....................................... 42
2.22 Replacement of Lenders under Certain Circumstances............. 42
SECTION III. LETTERS OF CREDIT............................................ 42
3.1 L/C Commitment.................................................. 42
3.2 Procedure for Issuance of Letter of Credit...................... 43
3.3 Commissions, Fees and Other Charges............................. 43
3.4 L/C Participations.............................................. 44
3.5 Reimbursement Obligation of the Borrower........................ 44
3.6 Obligations Absolute............................................ 45
3.7 Letter of Credit Payments....................................... 45
3.8 Applications.................................................... 46
SECTION IV. REPRESENTATIONS AND WARRANTIES................................ 46
4.1 Financial Condition............................................. 46
4.2 No Change....................................................... 47
4.3 Corporate Existence; Compliance with Law........................ 47
4.4 Corporate or Partnership Power; Authorization; Enforceable
Obligations................................................. 47
4.5 No Legal Bar.................................................... 47
4.6 No Material Litigation.......................................... 48
4.7 No Default...................................................... 48
4.8 Ownership of Property; Liens.................................... 48
4.9 Intellectual Property........................................... 48
4.10 Taxes.......................................................... 48
4.11 Federal Regulations............................................ 48
4.12 Labor Matters.................................................. 49
4.13 ERISA.......................................................... 49
4.14 Investment Company Act; Other Regulations...................... 50
4.15 Subsidiaries................................................... 50
4.16 Use of Proceeds................................................ 50
4.17 Environmental Matters.......................................... 50
4.18 Accuracy of Information, etc................................... 51
4.19 Security Documents............................................. 52
4.20 Solvency....................................................... 52
4.21 Senior Indebtedness............................................ 52
4.22 Year 2000..................................................... 53
5.1 Conditions to Initial Extension of Credit....................... 53
5.2 Conditions to Each Extension of Credit.......................... 56
SECTION VI. AFFIRMATIVE COVENANTS......................................... 57
6.1 Financial Statements............................................ 57
6.2 Certificates; Other Information................................. 57
6.3 Payment of Obligations.......................................... 58
6.4 Conduct of Business and Maintenance of Existence, etc. ......... 59
6.5 Maintenance of Property; Insurance.............................. 59
6.6 Inspection of Property; Books and Records; Discussions.......... 59
6.7 Notices......................................................... 59
6.8 Environmental Laws.............................................. 60
6.9 Additional Collateral, etc...................................... 61
SECTION VII. NEGATIVE COVENANTS........................................... 62
7.1 Financial Condition Covenants................................... 63
7.2 Limitation on Indebtedness...................................... 63
7.3 Limitation on Liens............................................. 64
7.4 Limitation on Fundamental Changes............................... 66
7.5 Limitation on Sale of Assets.................................... 67
7.6 Limitation on Dividends......................................... 67
7.7 Limitation on Capital Expenditures.............................. 68
7.8 Limitation on Investments, Loans and Advances................... 68
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. .......................................... 69
7.10 Limitation on Transactions with Affiliates..................... 70
7.11 Limitation on Sales and Leasebacks............................. 70
7.12 Limitation on Changes in Fiscal Periods........................ 70
7.13 Limitation on Negative Pledge Clauses.......................... 70
7.14 Limitation on Restrictions on Subsidiary Distributions......... 70
7.15 Limitation on Lines of Business................................ 71
7.16 Limitation on Changes to Certificate of Incorporation.......... 71
SECTION VIII. EVENTS OF DEFAULT........................................... 71
SECTION IX. THE ADMINISTRATIVE AGENT...................................... 74
9.1 Appointment..................................................... 74
9.2 Delegation of Duties............................................ 74
9.3 Exculpatory Provisions.......................................... 74
9.4 Reliance by Administrative Agent................................ 75
9.5 Notice of Default............................................... 75
9.6 Non-Reliance on Administrative Agent and Other Lenders.......... 76
9.7 Indemnification................................................. 76
9.8 Administrative Agent in Its Individual Capacity................. 77
9.9 Successor Administrative Agent.................................. 77
9.10 Authorization to Release Liens................................. 77
9.11 The Arranger................................................... 77
9.12 The Documentation Agent........................................ 77
SECTION X. MISCELLANEOUS.................................................. 78
10.1 Amendments and Waivers......................................... 78
10.2 Notices........................................................ 79
10.3 No Waiver; Cumulative Remedies................................. 80
10.4 Survival of Representations and Warranties..................... 80
10.5 Payment of Expenses............................................ 80
10.6 Successors and Assigns; Participations and Assignments......... 81
10.7 Adjustments; Set-off........................................... 84
10.8 Counterparts................................................... 85
10.9 Severability................................................... 85
10.10 Integration................................................... 85
10.11 GOVERNING LAW................................................. 85
10.12 Submission To Jurisdiction; Waivers........................... 85
10.13 Acknowledgements.............................................. 86
10.14 WAIVERS OF JURY TRIAL......................................... 86
10.15 Confidentiality............................................... 86
10.16 Releases of Collateral Security and Guarantee Obligations..... 87
10.17 Releases...................................................... 87
10.18 Effectiveness of Agreement.................................... 87
SCHEDULES:
1.1A Commitments
1.1B Consolidated EBITDA
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E Form of Legal Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
F-1 Form of Term Note
F-2 Form of Revolving Credit Note
G Form of Prepayment Option Notice
H Form of Exemption Certificate
I Form of U.K. Pledge Agreement
J Form of New Zealand Pledge Agreement
CREDIT AGREEMENT, dated as of May 28, 1998, among PANAVISION
INC., a Delaware corporation (the "Borrower") the several banks and other
financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), CHASE SECURITIES INC., as advisor and arranger
(in such capacity, the "Arranger"), CREDIT SUISSE FIRST BOSTON, as
documentation agent (the "Documentation Agent"), and THE CHASE MANHATTAN
BANK, as administrative agent (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, Mafco Holdings Inc. (the "Equity Investor") intends to
acquire, through PX Holding Corporation, a Delaware corporation
("Holdings"), approximately 72% of the outstanding shares of capital stock
of the Borrower in connection with the recapitalization (the
"Recapitalization") of the Borrower and in accordance with the terms and
conditions of the Recapitalization Agreement (as defined herein);
WHEREAS, Holdings has established PX Merger Corporation solely
to consummate the Recapitalization through the merger of PX Merger
Corporation with and into the Borrower, with the Borrower as the surviving
corporation;
WHEREAS, to consummate the Recapitalization and related
transactions: (a) the Equity Investor will make capital contributions to
Holdings as common equity in an aggregate cash amount of approximately
$154,400,000, (b) the Borrower will require senior secured credit
facilities in an aggregate amount of $340,000,000 and (c) PX Escrow Corp.,
a Delaware corporation ("PX Escrow"), and a wholly owned subsidiary of
Holdings, issued, and in connection with the Recapitalization the Borrower
will assume, all obligations in respect to the PX Escrow Notes (as defined
below);
WHEREAS, to finance the Recapitalization and the working
capital needs of the Borrower and its subsidiaries, the Lenders are willing
to make senior secured credit facilities available to the Borrower upon and
subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as
follows:
SECTION I. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the Alternate Base Rate.
"Accepting Lenders": as defined in Section 2.16(d).
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b)
direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"Aggregate Exposure": with respect to any Lender, an amount
equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments and (b) thereafter, the sum of (i) the aggregate
unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Credit Commitment or, if the
Revolving Credit Commitments have been terminated, the amount of such
Lender's Revolving Extensions of Credit.
"Aggregate Exposure Percentage" with respect to any Lender, the
ratio (expressed as a percentage) of such Lender's Aggregate Exposure
to the Aggregate Exposure of all Lenders.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime
Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Administrative Agent as its prime or base
rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by
the Administrative Agent in connection with extensions of credit to
debtors); "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit
of major money center banks in New York City received at
approximately 10:00 A.M., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business
Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Alternate Base Eurodollar
Rate Loans Loans
Revolving Credit Loans 1.25% 2.25%
Tranche A Term Loans 1.25% 2.25%
Tranche B Term Loans 1.50% 2.50%
provided that on and after the first Adjustment Date (as defined
below) occurring after the Closing Date, the Applicable Margin with
respect to Revolving Credit Loans, Tranche A Term Loans and Tranche B
Term Loans will be determined as follows:
Applicable Margin Applicable Margin
for Eurodollar Loans for ABR Loans
-------------------------------- --------------------------------
Consolidated Revolving Tranche A Tranche B Revolving Tranche A Tranche B
Total Leverage Credit Term Term Credit Term Term
Ratio Loans Loans Loans Loans Loans Loans
----------------- ---------- --------- ---------- ----------- ---------- ---------
> 5.50 to 1.00 2.25% 2.25% 2.50% 1.25% 1.25% 1.50%
< 5.50 to 1.00 2.00% 2.00% 2.25% 1.00% 1.00% 1.25%
but > 5.00 to
1.00
< 5.00 to 1.00 1.75% 1.75% 2.00% 0.75% 0.75% 1.00%
but > 4.50 to
1.00
< 4.50 to 1.00 1.50% 1.50% 2.00% 0.50% 0.50% 1.00%
but > 4.00 to
1.00
> 4.00 to 1.00 1.25% 1.25% 2.00% 0.25% 0.25% 1.00%
Changes in the Applicable Margin with respect to Revolving Credit
Loans, Tranche A Term Loans and Tranche B Term Loans resulting from
changes in the Consolidated Total Leverage Ratio shall become
effective on the date (the "Adjustment Date") on which financial
statements are delivered to the Lenders pursuant to Section 6.1 (but
in any event not later than the 50th day after the end of each of the
first three quarterly periods of each fiscal year or the 105th day
after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to
this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such
financial statements are delivered, the Consolidated Total Leverage
Ratio as at the end of the fiscal period that would have been covered
thereby shall for the purposes of this definition be deemed to be
greater than 5.50 to 1.00. In addition, at all times while an Event
of Default shall have occurred and be continuing, the Consolidated
Total Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 5.50 to 1.00. Each determination of the
Consolidated Total Leverage Ratio pursuant to this definition shall
be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by
the relevant financial statements.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender
to open a Letter of Credit.
"Approved Fund": means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in
commercial loans and is managed by the same investment advisor as
such Lender or by an Affiliate of such investment advisor.
"Arranger": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a) or (b) of Section 7.5).
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment over (b) such Lender's
Revolving Extensions of Credit.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as
a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Budget": as defined in Section 6.2(c).
"Business": as defined in Section 4.17(b).
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required
by law to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, all amounts (whether
paid in cash or accrued as liabilities, including all obligations in
respect of Capital Leases), that would in accordance with GAAP, be
set forth as "capital expenditures" on the consolidated statement of
cash flows of the Borrower and its Subsidiaries for such period.
"Capital Lease": any lease of property (real, personal or
mixed) which in accordance with GAAP is or should be capitalized on
the lessee's balance sheet.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities
of one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) repurchase obligations of any
Lender or any commercial bank satisfying the requirements of clause
(b) of this definition having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer
rated at least A-2 by Standard & Poor's Ratings Services or any
successor ("S&P") or P-2 by Xxxxx'x Investors Service, Inc. or any
successor ("Moody's"), (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States or by any
political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A by Moody's, (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition, or (g)
shares of money market mutual or similar funds sponsored by any
registered broker dealer or mutual fund distributor.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by
a member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment
risk classification) within the meaning of 12 C.F.R. ss. 327.4 (or
any successor provision) to the FDIC (or any successor) for the
FDIC's (or such successor's) insuring time deposits at offices of
such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board as in effect from time to time) in respect
of new non-personal time deposits in Dollars having a maturity of 30
days or more.
"Change of Control": (a) the Permitted Holders shall cease to
have "beneficial ownership" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 50% of
the total voting power of all classes of Voting Stock of the Borrower
then outstanding (determined on a fully diluted basis), (b) the board
of the directors of Borrower shall cease to consist of a majority of
Continuing Directors, or (c) there shall occur any "Change of
Control" (as defined in the Senior Subordinated Note Indenture).
"Chase": The Chase Manhattan Bank.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date shall be
no later than June 30, 1998.
"Code": the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment and the Revolving
Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum.
"Commitment Letter": the Commitment Letter dated as of January
23, 1998 among the Equity Investor, Chase and CSI.
"Commonly Controlled Entity": 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 or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, Section 414(m) or (o) of
the Code.
"Compliance Certificate": a certificate duly executed on behalf
of the Borrower by a Responsible Officer substantially in the form of
Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated January 1998 and furnished to the
Lenders.
"Consolidated EBITDA": for any period, for the Borrower and its
Subsidiaries, the sum of the following (without duplication): (a)
Consolidated Net Income for such period (calculated after eliminating
extraordinary gains and losses and unusual items) plus (b) income and
other taxes (to the extent deducted in determining Consolidated Net
Income) for such period plus (c) depreciation and amortization and
other non-cash charges (to the extent deducted in determining
Consolidated Net Income) for such period plus (d) the aggregate
amount of Consolidated Interest Expense for such period minus (e) the
aggregate amount of interest income for such period plus (f) the
aggregate amount of up-front or one-time fees or expenses payable in
respect of Rate Hedging Agreements during such period (to the extent
deducted in determining Consolidated Net Income for such period) plus
(g) the amount of unrealized foreign exchange losses (net of any
gains) (or minus the amount of unrealized foreign exchange gains (net
of any losses)) plus (h) Transaction Charges (to the extent deducted
in determining Consolidated Net Income) plus (i) the items set forth
on Schedule 1.1B with respect to the 1998 second fiscal quarter of
the Borrower. For purposes of this definition, Consolidated EBITDA
for the fiscal quarters ended June 30, 1997, September 30, 1997 and
December 31, 1997 shall be $14,805,000, $21,663,000 and $18,497,000,
respectively.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense": for any fiscal period of the
Borrower, the amount which, in conformity with GAAP, would be set
forth opposite the caption "interest expense" (or any like caption)
on a consolidated statement of earnings of the Borrower and its
Subsidiaries for such fiscal period; provided that the calculation of
Consolidated Interest Expense shall exclude (x) any non-cash interest
expense in respect of any Indebtedness permitted under Section 7.2
and (y) the commitment fees paid on the Closing Date to the Lenders
pursuant to Section 2.7 and to the Administrative Agent pursuant to
the Fee Letter.
"Consolidated Net Income": for any fiscal period of the
Borrower, the amount which, in conformity with GAAP, would be set
forth opposite the caption "net income" (or any like caption) or "net
loss" (or any like caption), as the case may be, on a consolidated
statement of earnings of the Borrower and its Subsidiaries for such
fiscal period.
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of the Borrower and its Subsidiaries at
such date, determined on a consolidated basis in accordance with
GAAP; provided that Indebtedness of the types described in clause (j)
of the definition of the term Indebtedness shall not be included for
the purpose of calculating Consolidated Total Debt.
"Consolidated Total Leverage Ratio": as at any date, the ratio
of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for the four full consecutive fiscal quarters most recently ended.
"Consolidated Working Capital": at any date, for the Borrower
and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP): (a) the sum of inventory plus
accounts receivable minus (b) the sum of accounts payable plus
accrued expenses at such date.
"Continuing Directors": the directors of the Borrower on the
Closing Date, after giving effect to the Recapitalization and the
other transactions contemplated hereby, and each other director, if,
in each case, such other director's nomination for election to the
board of directors of the Borrower is recommended by at least 66-2/3%
of the then Continuing Directors or such other director receives the
vote of the Permitted Holders in his or her election by the
shareholders of the Borrower.
"Contractual Obligation": as to any Person, any provision of
any material security issued by such Person or of any material
agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its material Property is bound.
"Cross Default": of any Person, (a) default in the payment of
any amount when due (whether at maturity or by acceleration) on any
of its Indebtedness (other than any such default in respect of the
Loans, the Notes or the Reimbursement Obligations) or in the payment
of any matured Guarantee Obligation in respect of any Indebtedness of
any other Person (except for any such payments on account of any such
Indebtedness and Guarantee Obligations in an aggregate principal
amount at any one time outstanding of up to $5,000,000) or (b)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness (except for any such
Indebtedness and Guarantee Obligations in an aggregate principal
amount at any one time outstanding of up to $5,000,000) or contained
in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, with the giving
of notice if required, such Indebtedness (except for any such
Indebtedness in an aggregate principal amount at any one time
outstanding of up to $5,000,000) to become due or to be required to
be redeemed or repurchased prior to its stated maturity.
"CSI": Chase Securities Inc.
"Debt Service": for any period, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication
in accordance with GAAP), the sum of the following: (a) all regularly
scheduled payments of principal of Indebtedness (including, without
limitation, the principal component of any payments in respect of
Capital Leases) made during such period plus (b) all Consolidated
Interest Expense for such period.
"Default": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Documentation Agent": as defined in the preamble
hereto.
"Dollars" and "$": dollars in lawful currency of the
United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States.
"ECF Percentage": 75%; provided that with respect to each
fiscal year of the Borrower ending on or after December 31, 1998, the
ECF Percentage shall be reduced to 50% if the Consolidated Total
Leverage Ratio for the period of four consecutive fiscal quarters
ending on the last day of such fiscal year is not greater than 4.50
to 1.00.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or
may at any time hereafter be in effect.
"Equity Investor": as defined in the recitals hereto.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Escrow Agreement": the Escrow Agreement between PX Escrow and
The Bank of New York, as escrow agent, dated as of February 11, 1998,
as amended, supplemented or otherwise modified from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect
on such day (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board or
other Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member
bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Dow Xxxxx Markets
service as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Dow Xxxxx Markets service (or
otherwise on such service), the "Eurodollar Base Rate" for purposes
of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of
such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00
A.M., New York City time, two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where its
eurodollar and foreign currency and exchange operations are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the
Borrower:
(a) Consolidated EBITDA for such period; minus
(b) the sum (without duplication) of:
(i) the aggregate amount of Debt Service for
such period; plus
(ii) taxes payable in cash in respect of such period;
plus
(iii) Capital Expenditures made during such
period (other than (x) any such Capital
Expenditures to the extent financed with
the proceeds of Indebtedness incurred
pursuant to Section 7.2(f) during such
period and (y) any Capital Expenditures of
the types described in Sections 7.7(b) and
7.7(c) made during such period); plus
----
(iv) any increase (or minus any decrease) in
Consolidated Working Capital from the beginning of
such period to the end of such period; plus
(v) an amount equal to the aggregate gain on any Asset
Sale or Recovery Event by the Borrower or its
Subsidiaries during such period; plus
(vi) an amount equal to the aggregate gain on any event
which would be a Recovery Event by the Borrower or
its Subsidiaries during such period but for the
parenthetical clause in the definition thereof;
plus
(vii) an amount equal to the aggregate gain on any
Disposition of Property by the Borrower or
its Subsidiaries during such period pursuant
to Section 7.5(a)(i); plus
(viii) the aggregate amount of prepayments made
under Sections 2.9 (to the extent, in the
case of Revolving Credit Loans, of any
corresponding reduction in the Revolving
Credit Commitments) and 2.10(a) during such
period; plus
(c) the sum of:
(i) the aggregate amount of Net Cash Proceeds
received by the Borrower or its Subsidiaries
from any Asset Sale or Recovery Event during
such period to the extent such Net Cash Proceeds
are not applied to the prepayment of Loans
and/or the reduction of the Revolving Credit
Commitments during such period; plus
----
(ii) an amount equal to the aggregate loss on any Asset
Sale or Recovery Event by the Borrower or its
Subsidiaries during such period; plus
(iii) an amount equal to the aggregate loss on any
event which would be a Recovery Event by the
Borrower or its Subsidiaries during such
period but for the parenthetical clause in
the definition thereof; plus
(iv) an amount equal to the aggregate loss on any
Disposition of Property by the Borrower or its
Subsidiaries during such period pursuant to Section
7.5(a)(i).
"Excess Cash Flow Application Date": as defined in
Section 2.10(b).
"Exchange Act": the Securities Exchange Act of 1934,
as amended.
"Exchange Offer": the exchange offer in respect of the Senior
Subordinated Notes permitted by the definition thereof.
"Existing Credit Agreement": the Credit Agreement dated as of
June 5, 1997 among the Borrower, the subsidiary guarantors named
therein, the lenders party thereto and Chase, as administrative agent
for such lenders.
"Facility": each of (a) the Tranche A Term Loan Commitments and
the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Tranche B Term Loan Commitments and the Tranche B
Term Loans made thereunder (the "Tranche B Term Loan Facility") and
(c) the Revolving Credit Commitments and the extensions of credit
made thereunder (the "Revolving Credit Facility").
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"Fee Letter": the Fee Letter dated January 23, 1998 among the
Equity Investor, CSI and Chase.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Fully Satisfied": with respect to:
(a) the Payment Obligations as of any date, that, on or
before such date, (i) the principal of and interest accrued to
such date on such Payment Obligations shall have been paid in
full in cash (other than the Undrawn L/C Obligations), (ii) all
Undrawn L/C Obligations shall have been Fully Secured, (iii)
all fees, expenses and other amounts then due and payable which
constitute Payment Obligations (other than the Undrawn L/C
Obligations) shall have been paid in full in cash and (iv) the
Commitments shall have expired or irrevocably been terminated;
and
(b) the Obligations (and the Borrower Obligations (as
defined in the Guarantee and Collateral Agreement)) as of any
date, that, on or before such date, (i) the Payment Obligations
shall have been Fully Satisfied (as provided in clause (a)
above) and (ii) all Rate Hedging Agreements with any of the
Lenders or their Affiliates shall have been terminated or all
obligations thereunder (other than for fees, expenses and
indemnities) shall have been cash collateralized and all fees,
expenses and indemnity payments then due and payable thereunder
shall have been paid in full in cash.
"Fully Secured": with respect to any Undrawn L/C Obligations as
of any date, that, on or before such date, such Undrawn L/C
Obligations shall have been secured by the grant to the Issuing
Lender by the Borrower of a first priority, perfected security
interest in, and Lien on, (a) cash or Cash Equivalents in an amount
at least equal to the excess, if any, of the amount of such Undrawn
L/C Obligations over the amount of the Total Revolving Credit
Commitments on such date or (b) other collateral security which is
acceptable to the Issuing Lender and the Required Lenders.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower
and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of
Section 7.1, GAAP shall be determined on the basis of such principles
in effect on the date hereof and consistent with those used in the
preparation of the most recent audited financial statements delivered
pursuant to Section 4.1(b).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without
limitation, any securities exchange, self-regulatory organization or
the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any
letter of credit) to induce the creation of which the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase Property,
securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall
be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof
as determined by the Borrower in good faith.
"Holdings": as defined in the recitals hereto.
"Indebtedness": of a Person, (a) indebtedness of such Person
for borrowed money whether short-term or long-term and whether
secured or unsecured, (b) indebtedness of such Person for the
deferred purchase price of services or property, which purchase price
(i) is due twelve months or more from the date of incurrence of the
obligation in respect thereof or (ii) customarily or actually is
evidenced by a note or other written instrument (including, without
limitation, any such indebtedness which is non-recourse to the credit
of such Person but is secured by assets of such Person), (c)
obligations of such Person under Capital Leases, (d) obligations of
such Person arising under acceptance facilities, (e) the undrawn face
amount of, and unpaid reimbursement obligations in respect of, all
letters of credit issued for the account of such Person, (f) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (g) all obligations of such Person upon
which interest charges are customarily paid, (h) all obligations of
such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (even though
the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such
property), (i) obligations of such Person to purchase, redeem,
retire, defease or otherwise acquire for value any Capital Stock of
such Person (with redeemable preferred capital stock being valued at
the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends), (j) all executory obligations of
such Person in respect of interest rate agreements and foreign
exchange and other financial hedge contracts (including, without
limitation, equity hedge contracts), (k) all Indebtedness of the
types referred to in clauses (a) through (j) above for which such
Person is obligated under a Guarantee Obligation and (l) renewals,
extensions, refundings, deferrals, restructurings, amendments and
modifications of any such indebtedness, obligation or guarantee.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to xxx at law or
in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan
is outstanding and the final maturity date of such Loan, (b) as to
any Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period, (c) as to any Eurodollar
Loan having an Interest Period longer than three months, each day
which is three months after the first day of such Interest Period and
the last day of such Interest Period and (d) as to any Loan (other
than any Revolving Credit Loan that is an ABR Loan), the date of any
repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the
case may be, with respect to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the Borrower in
its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days prior
to the last day of the then current Interest Period with respect
thereto; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Scheduled Revolving Credit Termination Date or
beyond the date final payment is due on the Tranche A Term
Loans or Tranche B Term Loans, as the case may be,
shall end on the Scheduled Revolving Credit Termination Date
or such due date, as applicable; and
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business
Day of a calendar month.
"Issuing Lender": Chase, in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $20,000,000.
"L/C Fee Payment Date": the last day of each March,
June, September and December and the last day of the Revolving
Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the Undrawn L/C Obligations and (b) the aggregate amount of
drawings under Letters of Credit which have not then been reimbursed
pursuant to Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the Issuing Lender.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or
other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of
the Term Loans or the Total Revolving Extensions of Credit, as the
case may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to any termination of the Revolving
Credit Commitments, the holders of more than 50% of the Total
Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a) the
Recapitalization, (b) the business, assets, property, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole, (c) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or
thereunder or (d) the ability of the Borrower to perform any of its
obligations under this Agreement.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products
or any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Multiemployer Plan": a Plan (other than a welfare plan as
defined in Section 3(1) of ERISA) which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": in connection with any Net Proceeds Event,
the gross proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but only as and when
received) of such Net Proceeds Event, net of (i) attorneys' fees,
accountants' fees, investment banking fees, underwriting discounts
and commissions and other customary fees and expenses actually
incurred in connection therewith, (ii) the amount of liabilities
(other than intercompany liabilities or liabilities owing to any
Affiliate of such Person), if any, which are required to be repaid at
the time or as a result of any Net Proceeds Event out of the proceeds
thereof and (iii) taxes paid or reasonably estimated to be payable as
a result thereof (after taking into account any available tax credits
or deductions and any tax sharing arrangements).
"Net Proceeds Event":
(i) the issuance by the Borrower or any of its
Subsidiaries of any Capital Stock (excluding (x)
any Capital Stock issued under any compensatory
stock option plan of the Borrower or any of its
Subsidiaries in the ordinary course of business the
Net Cash Proceeds of which shall not exceed
$5,000,000 in the aggregate during the term of this
Agreement and (y) any Capital Stock issued by any
Subsidiary of the Borrower to the Borrower or any
other Subsidiary of the Borrower);
(ii) the incurrence by the Borrower or any of its
Subsidiaries of any Indebtedness for borrowed money
(excluding Indebtedness incurred in accordance with
Section 7.2);
(iii) any Asset Sale; and
(iv) any Recovery Event.
"New Zealand Pledge Agreement": the Share Charge Agreement
dated as of the date hereof pursuant to which the Borrower grants to
the Administrative Agent for the benefit of the Lenders a security
interest in shares of capital stock of Panavision NZ, substantially
in the form of Exhibit J, as the same may be amended, supplemented or
otherwise modified from time to time.
"Non-Excluded Taxes": as defined in Section 2.18(a).
"Non-U.S. Lender": as defined in Section 2.18(d).
"Notes": the collective reference to any promissory
note evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing
after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender (or, in the case of Rate Hedging Agreements,
any affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Rate
Hedging Agreement entered into with any Lender or any affiliate of
any Lender or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender
that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement.
"Panavision Canada Holdings": Panavision Canada Holdings Inc.,
a Canada corporation.
"Panavision NZ": Panavision NZ Limited, a New Zealand limited
company.
"Participant": as defined in Section 10.6(b).
"Payment Obligations": (a) all principal, interest, fees,
charges, expenses, attorneys' fees and disbursements, indemnities,
reimbursement obligations and any other amounts payable by any Person
under any Loan Document (including, without limitation, the L/C
Obligations and interest accruing at the then applicable rate
provided for herein after the maturity of the Loans to the extent any
Loans are then outstanding and interest accruing at the then
applicable rate provided for herein after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding relating to the Borrower whether or not a claim
for post-filing or post-petition interest is allowed in such
proceeding) and (b) any amount in respect of any of the foregoing
that the Administrative Agent or any Lender, in its sole discretion,
may elect to pay or advance under this Agreement on behalf of such
Person after the occurrence and during the continuance of a Default
or an Event of Default.
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower
and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Holders": Xxxxxx X. Xxxxxxxx (or, in the event of
his incompetence or death, his estate, heirs, executor,
administrator, committee or other personal representative).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Potential Withdrawal Liability" shall have the meaning
assigned to such term in Section 5.8.
"Prepayment Amount": as defined in Section 2.16(d).
"Prepayment Date": as defined in Section 2.16(d).
"Prepayment Option Notice": as defined in Section
2.16(d).
"Pro Forma Balance Sheet": as defined in Section
4.1(a).
"Properties": as defined in Section 4.17(a).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Purchase Agreement": the Purchase Agreement dated February 6,
1998 among PX Escrow and Credit Suisse First Boston and Xxxxxxxx &
Co. Inc., as amended, supplemented or otherwise modified from time to
time.
"PX Escrow": as defined in the recitals hereto.
"PX Escrow Notes": the 95/8% Senior Subordinated Discount Notes
due 2006 issued by PX Escrow pursuant to the Senior Subordinated Note
Indenture.
"Rate Hedging Agreement": any interest rate protection
agreement, interest rate futures contract, interest rate option,
interest rate cap or other interest rate hedge arrangement, foreign
exchange contract or any other agreement or arrangement designed to
provide protection against fluctuations in interest rates or currency
exchange rates to or under which the Borrower or any of its
Subsidiaries is a party or a beneficiary on the date hereof or
becomes a party or a beneficiary after the date hereof.
"Recapitalization": as defined in the recitals
hereto.
"Recapitalization Agreement": the Agreement of Recapitalization
and Merger among Holdings, PX Merger Corporation and the Borrower
dated as of December 18, 1997, as amended by that certain Letter
Agreement dated as of February 6, 1998 between the Borrower and the
Equity Investor, as further amended, supplemented or otherwise
modified from time to time.
"Recapitalization Documentation": collectively, the
Recapitalization Agreement, the Stockholders Agreement and all
schedules, exhibits, annexes and amendments thereto and all side
letters and agreements affecting the terms thereof or entered into in
connection therewith, in each case, as amended, supplemented or
otherwise modified from time to time.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation
proceeding relating to any asset (other than inventory) of the
Borrower or any of its Subsidiaries (excluding to the extent, and
only to the extent, that within 180 days of receipt by the Borrower
or any of its Subsidiaries of cash proceeds in respect of any such
property or casualty insurance claim or condemnation proceeding, such
Person commences and thereafter diligently pursues the repair or
replacement of the Property affected by such event).
"Register": as defined in Section 10.6(d).
"Registration Agreement": the Registration Agreement dated as
of February 6, 1998 among PX Escrow, Credit Suisse First Boston and
Xxxxxxxx & Co. Inc., as amended, supplemented or otherwise modified
from time to time.
"Regulation G": Regulation G of the Board as in
effect from time to time.
"Regulation U": Regulation U of the Board as in
effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts
drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under regulations promulgated under Title IV
of ERISA.
"Required Lenders": the holders of more than 50% of (a) until
the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the aggregate unpaid principal amount of the Term Loans and (ii) the
Total Revolving Credit Commitments or, if the Revolving Credit
Commitments have been terminated, the Total Revolving Extensions of
Credit.
"Required Prepayment Lenders": the Majority Facility Lenders in
respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material Property or to which such Person or any of its
material Property is subject.
"Responsible Officer": any officer at the level of vice
president or higher of the Borrower, but in any event, with respect
to financial matters, the chief financial officer, chief accounting
officer, treasurer or controller of the Borrower.
"Revolving Credit Commitment": as to any Lender, the obligation
of such Lender, if any, to make Revolving Credit Loans and
participate in Letters of Credit, in an aggregate principal and/or
face amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule
1.1A or in the Assignment and Acceptance pursuant to which such
Revolving Credit Lender became a party hereto, as the same may be
changed from time to time pursuant to the terms hereof. The original
amount of the Total Revolving Credit Commitments is $100,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Scheduled Revolving Credit
Termination Date.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section
2.4(a).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving
Credit Commitment then constitutes of the Total Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender
then outstanding and (b) such Lender's Revolving Credit Percentage of
the L/C Obligations then outstanding.
"Scheduled Revolving Credit Termination Date": the date which
is the sixth anniversary of the Closing Date.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Government Authority).
"Security Documents": the collective reference to the Guarantee
and Collateral Agreement, the U.K. Pledge Agreement, the New Zealand
Pledge Agreement and all other security documents hereafter delivered
to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party
under any Loan Document.
"Senior Subordinated Note Indenture": the Indenture dated as of
February 11, 1998 between PX Escrow and The Bank of New York, as
trustee, providing for the issuance of the Senior Subordinated Notes,
together with all instruments and other agreements entered into by
the Borrower or any of its Subsidiaries in connection therewith, as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with Section 7.9.
"Senior Subordinated Notes": (i) the PX Escrow Notes originally
issued by PX Escrow pursuant to the Senior Subordinated Note
Indenture and assumed by the Borrower on the Closing Date, (ii) the
9 5/8% Senior Subordinated Discount Exchange Notes due 2006 of the
Borrower and the 9 5/8% Senior Private Exchange Notes due 2006 of the
Borrower, in each case, issuable pursuant to the Senior Subordinated
Note Indenture, with terms identical in all material respects to
those initially issued and exchanged therefor, or (iii) any
refinancing of such senior subordinated notes of the Borrower on
terms and conditions which either (A) (i) extend the maturity or
reduce the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest thereon
and are otherwise no less favorable to the Lenders (including without
limitation the subordination provisions thereof) and (ii) do not
involve the payment of a consent fee or (B) are otherwise reasonably
satisfactory to the Required Lenders.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as
of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured,
(c) such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured.
"Specified Foreign Subsidiary": Panavision Canada Holdings,
Panavision NZ and Panavision Europe Limited.
"Stockholders Agreement": the Voting and Stockholders
Agreement, dated as of December 18, 1997, by and among Warburg,
Xxxxxx Capital Company, L.P., the Borrower and the Equity Investor,
as amended, supplemented or otherwise modified from time to time.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Foreign Subsidiary.
"Tax Sharing Agreement": any tax allocation agreement between
the Borrower or any of its Subsidiaries with the Borrower or any
direct or indirect shareholder of the Borrower with respect to
consolidated or combined tax returns including the Borrower or any of
its Subsidiaries but only to the extent that amounts payable from
time to time by the Borrower or any such Subsidiary under any such
agreement do not exceed the corresponding tax payments that the
Borrower or such Subsidiary would have been required to make to any
relevant taxing authority had the Borrower or such Subsidiary not
joined in such consolidated or combined returns, but instead had
filed returns including only the Borrower or its Subsidiaries
(provided that any such agreement may provide that, if the Borrower
or any such Subsidiary ceases to be a member of the affiliated group
of corporations of which the Equity Investor is the common parent for
purposes of filing a consolidated federal income tax return (such
cessation, a "Deconsolidation Event"), then the Borrower or such
Subsidiary shall indemnify such direct or indirect shareholder with
respect to any federal, state or local income, franchise or other tax
liability (including any related interest, additions or penalties)
imposed on such shareholder as the result of an audit or other
adjustment with respect to any period prior to such Deconsolidation
Event that is attributable to the Borrower, such Subsidiary or any
predecessor business thereof (computed as if the Borrower, such
Subsidiary or such predecessor business, as the case may be, were a
stand-alone entity that filed separate tax returns as an independent
corporation), but only to the extent that any such tax liability
exceeds any liability for taxes recorded on the books of the Borrower
or such Subsidiary with respect to any such period).
"Term Loan Lenders": the collective reference to the Tranche A
Term Loan Lenders and the Tranche B Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term
Loans and the Tranche B Term Loans.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments at such time.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the
Revolving Credit Lenders at such time.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche A Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Tranche A Term Loan Commitment" opposite
such Lender's name on Schedule 1.1A or in the Assignment and
Acceptance pursuant to which such Tranche A Term Loan Lender become a
party hereto. The original aggregate amount of the Tranche A Term
Loan Commitments is $90,000,000.
"Tranche A Term Loan Lender": each Lender which has a Tranche A
Term Loan Commitment or which has made a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan
Lender at any time, the percentage which such Lender's Tranche A Term
Loan Commitment then constitutes of the aggregate Tranche A Term Loan
Commitments (or, at any time after the Closing Date, the percentage
which the aggregate principal amount of such Lender's Tranche A Term
Loans then outstanding constitutes of the aggregate principal amount
of the Tranche A Term Loans then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to Tranche B Term Loan
Lender, the obligation of such Lender, if any, to make a Tranche B
Term Loan to the Borrower hereunder in a principal amount not to
exceed the amount set forth under the heading "Tranche B Term Loan
Commitment" opposite such Lender's name on Schedule 1.1A or in the
Assignment and Acceptance pursuant to which such Tranche B Term Loan
Lender become a party hereto. The original aggregate amount of the
Tranche B Term Loan Commitments is $150,000,000.
"Tranche B Term Loan Lender": each Lender which has a Tranche B
Term Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time,
the percentage which such Lender's Tranche B Term Loan Commitment
then constitutes of the aggregate Tranche B Term Loan Commitments
(or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender's Tranche B Term Loans then
outstanding constitutes of the aggregate principal amount of the
Tranche B Term Loans then outstanding).
"Transaction Charges": nonrecurring charges related to or
arising out of the transactions contemplated by the Recapitalization
Agreement, the Stockholders Agreement and the Escrow Agreement.
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a ABR Loan or
a Eurodollar Loan.
"U.K. Pledge Agreement": the Share Charge Agreement dated as of
the date hereof pursuant to which Panavision International L.P.
grants to the Administrative Agent for the benefit of the Lenders a
security interest in shares of Panavision Europe Limited,
substantially in the form of Exhibit I, as the same may be amended,
supplemented or otherwise modified from time to time.
"Undrawn L/C Obligations" the portion, if any, of the Payment
Obligations constituting the contingent obligation of the Borrower to
reimburse the Issuing Lender in respect of the then undrawn and
unexpired portions of the Letters of Credit issued by the Issuing
Lender pursuant to Section 3.1.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, as the same may be amended from time to
time.
"United States": the United States of America.
"Voting Stock": as to any Person, Capital Stock of such Person
of the class or classes pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect the
board of directors, managers or trustees of such Person (irrespective
of whether or not at the time Capital Stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency).
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law and in the case of Panavision Canada Holdings,
shares and/or options for shares issued (or to be issued) to its
directors, officers or employees for up to 15% of the Capital Stock
of Panavision Canada Holdings) is owned by such Person directly
and/or through other Wholly Owned Subsidiaries (it being understood
that, in the case of Panavision Canada Holdings, the issuance of such
shares and/or options contemplated above shall not preclude it from
being treated as a Wholly Owned Subsidiary of the Borrower for
purposes of the Loan Documents).
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate
or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined
in Section 1.1 and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION II. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, (a) each Tranche A Term Loan Lender severally agrees to make a term
loan (a "Tranche A Term Loan") to the Borrower on the Closing Date in an
amount not to exceed the amount of the Tranche A Term Loan Commitment of
such Lender and (b) each Tranche B Term Loan Lender severally agrees to
make a term loan (a "Tranche B Term Loan") to the Borrower on the Closing
Date in an amount not to exceed the amount of the Tranche B Term Loan
Commitment of such Lender. The Term Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.2 and 2.11.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, on the
anticipated Closing Date) requesting that the Term Loan Lenders make the
Term Loans on the Closing Date and specifying the amount to be borrowed.
The Term Loans made on the Closing Date shall initially be ABR Loans. Upon
receipt of such notice the Administrative Agent shall promptly notify each
Term Loan Lender thereof. Not later than 12:00 Noon, New York City time, on
the Closing Date each Term Loan Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan or Term Loans to be made by such
Lender. The Administrative Agent shall make available to the Borrower the
aggregate of the amounts made available to the Administrative Agent by the
Term Loan Lenders in immediately available funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of
each Tranche A Term Loan Lender shall mature in 20 consecutive quarterly
installments, commencing on June 30, 1999, each of which shall be in an
amount equal to such Lender's Tranche A Term Loan Percentage multiplied by
the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 1999 $1,250,000
September 30, 1999 1,250,000
December 31, 1999 1,250,000
March 31, 2000 1,250,000
June 30, 2000 2,500,000
September 30, 2000 2,500,000
December 31, 2000 2,500,000
March 31, 2001 2,500,000
June 30, 2001 5,000,000
September 30, 2001 5,000,000
December 31, 2001 5,000,000
March 31, 2002 5,000,000
June 30, 2002 6,250,000
September 30, 2002 6,250,000
December 31, 2002 6,250,000
March 31, 2003 6,250,000
June 30, 2003 7,500,000
September 30, 2003 7,500,000
December 31, 2003 7,500,000
March 31, 2004 7,500,000
(b) The Tranche B Term Loan of each Tranche B Term Loan Lender
shall mature in 24 consecutive quarterly installments, commencing on June
30, 1999, each of which shall be in an amount equal to such Lender's
Tranche B Term Loan Percentage multiplied by the amount set forth below
opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 1999 $250,000
September 30, 1999 250,000
December 31, 1999 250,000
March 31, 2000 250,000
June 30, 2000 250,000
September 30, 2000 250,000
December 31, 2000 250,000
March 31, 2001 250,000
June 30, 2001 250,000
September 30, 2001 250,000
December 31, 2001 250,000
March 31, 2002 250,000
June 30, 2002 250,000
September 30, 2002 250,000
December 31, 2002 250,000
March 31, 2003 250,000
June 30, 2003 5,250,000
September 30, 2003 5,250,000
December 31, 2003 5,250,000
March 31, 2004 5,250,000
June 30, 2004 31,250,000
September 30, 2004 31,250,000
December 31, 2004 31,250,000
March 31, 2005 31,250,000
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time
to time during the Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to such
Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may
use the Revolving Credit Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Credit Loans
may from time to time be Eurodollar Loans or ABR Loans, as determined by
the Borrower and notified to the Administrative Agent in accordance with
Sections 2.5 and 2.11, provided that no Revolving Credit Loan shall be made
as a Eurodollar Loan after the day that is one month prior to the Scheduled
Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Scheduled Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the
case of Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date (or prior to 12:00 Noon, New York City time, on the Closing
Date in the case of Revolving Credit Loans to be made on such date), in the
case of ABR Loans), specifying (i) the amount and Type of Revolving Credit
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the
case of Eurodollar Loans, the length of the initial Interest Period
therefor. The Revolving Credit Loans made on the Closing Date shall
initially be ABR Loans. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$500,000 or a whole multiple of $100,000 in excess thereof (or, if the then
aggregate Available Revolving Credit Commitments are less than $500,000,
such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or
a whole multiple of $100,000 in excess thereof. Upon receipt of any such
notice from the Borrower, the Administrative Agent shall promptly notify
each Revolving Credit Lender thereof. Each Revolving Credit Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by
the Borrower in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the
Administrative Agent in like funds as received by the Administrative Agent.
2.6 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as
the case may be, (i) the then unpaid principal amount of each Revolving
Credit Loan of such Revolving Credit Lender on the Scheduled Revolving
Credit Termination Date (or such earlier date on which the Loans become due
and payable pursuant to Section 8) and (ii) the principal amount of each
Term Loan of such Term Loan Lender in installments according to the
amortization schedule set forth in Section 2.3 (or on such earlier date on
which the Loans become due and payable pursuant to Section 8). The Borrower
hereby further agrees to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in Section
2.13.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.6(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of
the obligations of the Borrower therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to maintain the
Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest)
the Loans made to such Borrower by such Lender in accordance with the terms
of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver
to such Lender a promissory note of the Borrower evidencing any Term Loans
or Revolving Credit Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit F-1 or F-2, respectively,
with appropriate insertions as to date and principal amount.
2.7 Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the
last day of the Revolving Credit Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available
Revolving Credit Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Scheduled Revolving Credit
Termination Date, commencing on the first of such dates to occur after the
date hereof.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender (other than Chase) a fee for the period from and
including March 1, 1998 to the Closing Date, computed at the rate of 1/2 of
1% per annum on the average daily amount of the Commitment of such Lender
during the period for which payment is made, payable in arrears on the
earlier of the Closing Date or the date of the termination of the
Commitments in accordance with the terms hereof.
(c) The Borrower agrees to pay to the Arranger and the
Administrative Agent the fees in the amounts and on the dates set forth in
the Fee
Letter.
2.8 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than
three Business Days' notice to the Administrative Agent, to terminate
the Revolving Credit Commitments or, from time to time, to reduce
the amount of the Revolving Credit Commitments; provided that no
such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the Total
Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000,
or a whole multiple thereof, and shall reduce permanently the Revolving
Credit Commitments then in effect. Any termination of the Revolving Credit
Commitments pursuant to this Section 2.8 shall be accompanied by prepayment
in full (together with accrued interest thereon to such date) by the
Borrower of any Loans then outstanding and payment of any other amounts
necessary to cause the Payment Obligations with respect to the Loans and
the L/C Obligations to be Fully Satisfied. Any prepayment required pursuant
to this Section 2.8 or otherwise shall be applied, first, to the Revolving
Credit Loans then outstanding, second, to the reimbursement of all
outstanding Reimbursement Obligations, and, third, to cause the then
outstanding Undrawn L/C Obligations to be Fully Secured.
2.9 Optional Prepayments. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at
least three Business Days prior thereto in the case of Eurodollar Loans and
at least one Business Day prior thereto in the case of ABR Loans, which
notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans or ABR Loans; provided that (i) if a
Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.19 and (ii) if a prepayment of Term Loans is to
be made, Section 2.16(d) shall apply. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If
any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with (except in the
case of Revolving Credit Loans which are ABR Loans) accrued interest to
such date on the amount prepaid. Partial prepayments of Term Loans shall be
in an aggregate principal amount of $1,000,000 or a whole multiple of
$100,000 in excess thereof. Partial prepayments of Revolving Credit Loans
shall be in an aggregate principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof.
2.10 Mandatory Prepayments and Commitment Reductions. (a) If on
any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Net Proceeds Event, such Net Cash Proceeds shall be
applied on such date toward the prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments as set forth in Section
2.10(c); provided that in the case of any Asset Sale or Recovery Event,
such prepayment of the Term Loans need not be made and such Revolving
Credit Commitments need not be reduced pursuant to this Section
2.10(a) until the Borrower or any of its Subsidiaries shall have
received at least $5,000,000 in Net Cash Proceeds in the aggregate
from Asset Sales or Recovery Events, at which time, such $5,000,000 in Net
Cash Proceeds from any Asset Sales or Recovery Events and all further Net
Cash Proceeds from any Asset Sales or Recovery Events shall be promptly
applied to the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.10(c).
(b) If, for any fiscal year of the Borrower commencing with the
fiscal year ending December 31, 1998, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply
the ECF Percentage of such Excess Cash Flow toward the prepayment of the
Term Loans and the reduction of the Revolving Credit Commitments as set
forth in Section 2.10(c). Each such prepayment and commitment reduction
shall be made on a date (an "Excess Cash Flow Application Date") no later
than five days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 6.1(a), for the fiscal
year with respect to which such prepayment is made, are required to be
delivered to the Lenders and (ii) the date such financial statements are
actually delivered.
(c) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 2.10 shall be applied,
first, to the prepayment of the Tranche A Term Loans and Tranche B
Term Loans ratably and, second, to reduce permanently the Revolving
Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving
Credit Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Credit
Commitments as so reduced, provided that if the aggregate principal amount
of Revolving Credit Loans then outstanding is less than the amount of such
excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding
Letters of Credit and/or deposit an amount in cash in a cash collateral
account established with the Administrative Agent for the benefit of the
Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to Section 2.10 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of
the Loans under Section 2.10 (except in the case of Revolving Credit Loans
that are ABR Loans) shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid.
(d) If, as a result of the making of any payment required to be
made pursuant to this Section 2.10, the Borrower would incur costs pursuant
to Section 2.19, the Borrower may deposit the amount of such payment with
the Administrative Agent, for the benefit of the Lenders, in a cash
collateral account, until the end of the applicable Interest Period at
which time such payment shall be made. The Borrower hereby grants to the
Administrative Agent, for the benefit of the Lenders, a security interest
in all amounts from time to time on deposit in such cash collateral account
and expressly waives all rights (which rights the Borrower hereby
acknowledges and agrees are vested exclusively in the Administrative Agent)
to exercise dominion or control over any such amounts.
2.11 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least one Business Day's prior irrevocable
notice of such election, provided that any such conversion of Eurodollar
Loans may only be made on the last day of an Interest Period with respect
thereto. The Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election (which notice shall specify
the length of the initial Interest Period therefor), provided that no ABR
Loan under a particular Facility may be converted into a Eurodollar Loan
(i) when any Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility. Upon receipt of
any such notice, the Administrative Agent shall promptly notify each
relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be
applicable to such Loans, provided that no Eurodollar Loan under a
particular Facility may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the
Majority Facility Lenders in respect of such Facility have determined in
its or their sole discretion not to permit such continuations or (ii) after
the date that is one month prior to the final scheduled termination or
maturity date of such Facility, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph
or if such continuation is not permitted pursuant to the preceding proviso
such Loans shall be automatically converted to ABR Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $100,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
2.13 Interest Rates and Payment Dates. (a) Each
Eurodollar Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the Alternate Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan
or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all of the aggregate
principal unpaid amount of the Loans and Reimbursement Obligations shall
bear interest at a rate per annum which is equal to (x) in the case of the
Loans, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section 2.13 plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to ABR Loans under the
Revolving Credit Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment
fee or other amount payable hereunder shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount
shall bear interest at a rate per annum equal to the rate applicable to ABR
Loans under the relevant Facility plus 2% (or, in the case of any such
other amounts that do not relate to a particular Facility, the Alternate
Base Rate plus 3.5%), in each case, with respect to clauses (i) and (ii)
above, from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of
this Section 2.13 shall be payable from time to time on demand.
2.14 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and
the relevant Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the Alternate
Base Rate or the Eurocurrency Reserve Requirements shall become effective
as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of
each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing the quotations used
by the Administrative Agent in determining any interest rate pursuant to
Sections 2.13(a) or 2.13(b).
2.15 Inability to Determine Interest Rate. If prior
to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility
that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrower and the relevant Lenders at least two Business Days prior
to the commencement of any such Interest Period. Unless the Borrower shall
have notified the Administrative Agent promptly upon receipt of such
telecopy or telephonic notice that it wishes to rescind or modify its
request regarding (i) proposed Loans that the Borrower has requested be
made as Eurodollar Loans, (ii) a Eurodollar Loan that will result from the
requested conversion of all or part of ABR Loans into Eurodollar Loans or
(iii) the continuation of a Eurodollar Loan as such for an additional
Interest Period, then (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made
as ABR Loans, (y) any Loans under the relevant Facility that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans
under the relevant Facility shall be converted, on the last day of the then
current Interest Period, to ABR Loans. Until such notice has been withdrawn
by the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have
the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.16 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made pro rata according to the respective Tranche A Term
Loan Percentages, Tranche B Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders.
(b) Each optional prepayment of Term Loans pursuant to Section
2.9 shall be made pro rata according to the respective outstanding
principal amounts of the Tranche A Term Loans then held by the Tranche A
Term Loan Lenders and the respective outstanding principal amounts of the
Tranche B Term Loans then held by the Tranche B Term Loan Lenders (except
as otherwise provided in Section 2.16(d)). Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Tranche A Term Loans shall be made pro rata according to the respective
outstanding principal amounts of the Tranche A Term Loans then held by the
Tranche A Term Loan Lenders, and each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Tranche B
Term Loans shall be made pro rata according to the respective outstanding
principal amounts of the Tranche B Term Loans then held by the Tranche B
Term Loan Lenders (except as otherwise provided in Section 2.16(d)). Except
as otherwise provided in the following sentence, the amount of each principal
prepayment of the Term Loans shall be applied to reduce the then remaining
installments of the Tranche A Term Loans and Tranche B Term Loans, as the
case may be, pro rata based upon the then remaining principal amount
thereof. If any optional prepayment of Term Loans is made pursuant to
Section 2.9 at any time other than on a scheduled installment date in
respect of the Term Loans, the amount of each principal prepayment of the
Term Loans shall be applied to reduce the next originally scheduled
installment (unless previously prepaid) of the Tranche A Term Loans and the
Tranche B Term Loans, as the case may be, pro rata based upon the then
remaining principal amount thereof, and, if any such prepayment amount
remains after the payment in full (after giving effect to Section 2.16(d))
of the next originally scheduled installment of the Tranche A Term Loans
and the Tranche B Term Loans, any such remaining amount shall be applied in
the manner set forth in the preceding sentence. Amounts prepaid on account
of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of
the Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Sections 2.9,
2.10 or 2.16, so long as any Tranche A Term Loans are outstanding, each
Tranche B Term Loan Lender may, at its option, decline up to 100% of the
portion of any optional prepayment or mandatory payment applicable to the
Tranche B Term Loans of such Lender; accordingly, with respect to the
amount of any optional prepayment described in Section 2.9 or mandatory
prepayment described in Section 2.10 that is allocated to Tranche B Term
Loans (such amount, the "Prepayment Amount"), at any time when Tranche A
Term Loans remain outstanding, the Borrower will, (i) in the case of any
optional prepayment which the Borrower wishes to make, not later than three
Business Days prior to the date on which the Borrower wishes to make such
optional prepayment, and (ii) in the case of any mandatory prepayment
required to be made pursuant to Section 2.10, in lieu of applying such
amount to the prepayment of Tranche B Term Loans as provided in paragraph
Section 2.10(c), on the date specified in Section 2.10 for such prepayment,
give the Administrative Agent telephonic notice (promptly confirmed in
writing) requesting that the Administrative Agent prepare and provide to
each Tranche B Term Loan Lender a notice (each, a "Prepayment Option
Notice") as described below. Within two Business Days after receiving such
notice from the Borrower, the Administrative Agent will send to each
Tranche B Term Loan Lender a Prepayment Option Notice, which shall be in
the form of Exhibit G, and shall include an offer by the Borrower to prepay
on the date (each a "Prepayment Date") that is two Business Days after the
date of the Prepayment Option Notice, the relevant Term Loans of such
Lender by an amount equal to the portion of the Prepayment Amount indicated
in such Lender's Prepayment Option Notice as being applicable to such
Lender's Tranche B Term Loans. On the Prepayment Date, (i) the Borrower
shall pay to the Administrative Agent the aggregate amount necessary to
prepay that portion of the outstanding relevant Term Loans in respect of
which Tranche B Term Loan Lenders have accepted prepayment as described
above (such Lenders, the "Accepting Lenders"), and such amount shall be applied
to reduce the Prepayment Amount with respect to each Accepting Lender, and (ii)
the Borrower shall pay to the Administrative Agent an amount equal to the
portion of the Prepayment Amount not accepted by the Accepting Lenders, and such
amount shall be applied to the prepayment of the Tranche A Term Loans. Each
Tranche B Term Loan Lender that does not return to the Administrative Agent
a correctly completed Prepayment Option Notice in accordance with the terms
thereof and of this Section 2.16(d) shall receive 100% of the Prepayment
Amount allocated to such Tranche B Term Loan Lender on the Prepayment Date.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made
prior to 1:00 P.M., New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Payment
Office, in Dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt
in like funds as received. If any payment hereunder (other than payments on
the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a Eurodollar Loan becomes due and payable
on a day other than a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event
such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes
such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 2.16(f) shall be conclusive
in the absence of manifest error. If such Lender's share of such borrowing
is not made available to the Administrative Agent by such Lender within
three Business Days of such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans under the relevant Facility, within three
Business Days after demand from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the
Borrower is making such payment, and the Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make available
to the Lenders their respective pro rata shares of a corresponding amount.
If such payment is not made to the Administrative Agent by the Borrower
within three Business Days of such required date, the Administrative Agent
shall be entitled to recover, on demand, from each Lender to which any
amount which was made available pursuant to the preceding sentence, such
amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Lender against the
Borrower.
2.17 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not
having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof shall:
(i subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.18 and changes in the rate of tax on the
overall net income of such Lender);
(ii impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise included
in the determination of the Eurodollar Rate hereunder; or
(iii impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary
to compensate such Lender for such increased cost or reduced amount
receivable as reasonably determined by such Lender. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.17, it
shall promptly notify the Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations to lend hereunder or under or in respect of
any Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction; provided that
the Borrower shall not be required to compensate a Lender pursuant to this
paragraph for any amounts incurred more than six months prior to the date
that such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and provided further that, if the circumstances
giving rise to such claim have a retroactive effect, then such six-month
period shall be extended to include the period of such retroactive effect.
(c) A certificate as to any additional amounts payable pursuant
to this Section 2.17 submitted by any Lender to the Borrower (with a copy
to the Administrative Agent) shall contain supporting calculations and an
explanation in connection therewith and shall be conclusive in the absence
of manifest error. The obligations of the Borrower pursuant to this Section
2.17 shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.18 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document).
If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") or Other Taxes are required
to be withheld from any amounts payable to the Administrative Agent or any
Lender hereunder, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender
with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or (e) of
this Section, (ii) that are United States withholding taxes imposed on
amounts payable to such Lender at the time the Lender becomes a party to
this Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.18(a),
or (iii) that are imposed as a result of an event occurring after the Lender
becomes a Lender other than a change in law or regulation or the
introduction of any law or regulation or a change in interpretation or
administration of any law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send
to the Administrative Agent for the account of the Administrative Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section 2.18 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States (or any
jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S.
Lender") shall deliver to the Borrower and the Administrative Agent (or, in
the case of a Participant, to the Lender from which the related
participation shall have been purchased) two copies of either U.S. Internal
Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest" a statement substantially in the form of Exhibit H and a Form
W-8, or any subsequent versions thereof or successors thereto properly
completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date
it becomes a party to this Agreement (or, in the case of any Participant,
on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly
notify the Borrower at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower
(or any other form of certification adopted by the U.S. taxing authorities
for such purpose). Notwithstanding any other provision of this Section
2.18(d), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.18(d) that such Non-U.S. Lender is not legally
able to deliver.
(e) A Lender that is entitled to an exemption from or reduction
of non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed
by applicable law or reasonably requested by the Borrower, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate;
provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender's reasonable judgment such
completion, execution or submission would not materially prejudice the
legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund
in respect of Non- Excluded Taxes or Other Taxes paid by the Borrower,
which in the good faith judgment of such Lender is allocable to such
payment, it shall promptly pay such refund, together with any other amounts
paid by the Borrower in connection with such refunded Non-Excluded Taxes or
Other Taxes, to the Borrower, net of all out-of-pocket expenses of such
Lender incurred in obtaining such refund, provided, however, that the
Borrower agrees to promptly return such refund to the Administrative Agent
or the applicable Lender, as the case may be, if it receives notice from
the Administrative Agent or applicable Lender that such Administrative
Agent or Lender is required to pay such refund.
2.19 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender
may sustain or incur in its reemployment of funds obtained in connection
with the making or maintaining of, or converting to, Eurodollar Loans, as a
consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of
this Agreement, (b) default by the Borrower in making any prepayment of
Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Calculation of all amounts payable to
a Lender under this Section 2.19 shall be made as though such Lender had
actually funded its relevant Eurodollar Loan through the purchase of a
Eurodollar deposit bearing interest at the Eurodollar Rate in an amount
equal to the amount of such Eurodollar Loan, having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States; provided that each Lender may fund each of its
Eurodollar Loans in any manner it sees fit and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
Section 2.19. A certificate as to any amounts payable pursuant to this
Section 2.19 submitted to the Borrower by any Lender shall be conclusive in
the absence of manifest error. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.20 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
such Lender shall promptly notify the Administrative Agent and Borrower
thereof, (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert ABR Loans to
Eurodollar Loans shall forthwith be cancelled and (c) such Lender's Loans
then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period
as required by law. If any such conversion of a Eurodollar Loan occurs on a
day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.19.
2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.17 or
2.18(a) with respect to such Lender, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such
Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided
that such designation is made on terms that, in the sole judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic,
legal or regulatory disadvantage, and provided, further, that nothing in
this Section 2.21 shall affect or postpone any of the obligations of any
Borrower or the rights of any Lender pursuant to Section 2.17 or 2.18(a).
2.22 Replacement of Lenders under Certain Circumstances. The
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.17 or 2.18 or (b)
defaults in its obligation to make Loans hereunder, with a replacement
financial institution; provided that (i) such replacement does not conflict
with any Requirement of Law, (ii) no Event of Default shall have occurred
and be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.21 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.17 or 2.18, (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender
on or prior to the date of replacement, (v) the Borrower shall be liable to
such replaced Lender under Section 2.19 if any Eurodollar Loan owing to
such replaced Lender shall be purchased other than on the last day of the
Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to
the Administrative Agent, (vii) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 10.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such
replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.17 or 2.18, as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights which the Borrower, the Administrative Agent or any other Lender
shall have against the replaced Lender.
SECTION III. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower on
any Business Day during the Revolving Credit Commitment Period in such form
as may be approved from time to time by the Issuing Lender; provided that
the Issuing Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the
date which is five Business Days prior to the Scheduled Revolving Credit
Termination Date, provided that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in clause (y) above),
and provided, further, that the Undrawn L/C Obligations in respect of each
Letter of Credit which expires after the last day of the Revolving Credit
Commitment Period shall be Fully Secured from and after such day.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the
State of New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with,
or cause the Issuing Lender or any L/C Participant to exceed any limits
imposed by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of
Credit by delivering to the Issuing Lender at its address for notices
specified herein an Application therefor, completed to the satisfaction of
the Issuing Lender, and such other certificates, documents and other papers
and information as the Issuing Lender may reasonably request. Upon receipt
of any Application, the Issuing Lender will process such Application and
the certificates, documents and other papers and information delivered to
it in connection therewith in accordance with its customary procedures and
shall promptly issue the Letter of Credit requested thereby (but in no
event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative
Agent, which shall in turn promptly furnish to the Lenders, notice of the
issuance of each Letter of Credit (including the amount thereof).
3.3 Commissions, Fees and Other Charges. (a) The Borrower will
pay a commission on the face amount of all outstanding Letters of Credit at
a per annum rate equal to the Applicable Margin then in effect with respect
to Eurodollar Loans under the Revolving Credit Facility, shared ratably
among the Revolving Credit Lenders and payable quarterly in arrears on each
L/C Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee of 1/4
of 1% per annum of the undrawn and unexpired amount of the Letter of
Credit, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing
Lender in issuing, negotiating, effecting payment under, amending or
otherwise administering any Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce
the Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts
and purchases from the Issuing Lender, on the terms and conditions
hereinafter stated, for such L/C Participant's own account and risk an
undivided interest equal to such L/C Participant's Revolving Credit
Percentage in the Issuing Lender's obligations and rights under each Letter
of Credit issued hereunder and the amount of each draft paid by the Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing
Lender's address for notices specified herein an amount equal to such L/C
Participant's Revolving Credit Percentage of the amount of such draft, or
any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit is paid to the Issuing Lender within three Business Days
after the date such payment is due, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such amount,
times (ii) the daily average Federal Funds Effective Rate during the period
from and including the date such payment is required to the date on which
such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to Section 3.4(a) is
not made available to the Issuing Lender by such L/C Participant within
three Business Days after the date such payment is due, the Issuing Lender
shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans under the Revolving Credit Facility. A
certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with Section
3.4(a), the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds
of collateral applied thereto by the Issuing Lender), or any payment of
interest on account thereof, the Issuing Lender will distribute to such L/C
Participant its pro rata share thereof; provided, however, that in the
event that any such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such L/C Participant shall
return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing
Lender notifies the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by the Issuing Lender for the amount of
(a) such draft so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such payment.
Each such payment shall be made to the Issuing Lender at its address for
notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all
amounts remaining unpaid by the Borrower under this Section from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in Section 2.13(c);
provided that if the Issuing Lender does not notify the Borrower as
provided for above earlier than 11:00 A.M. (New York City time) on the date
such draft is paid, then for such day (and until the next Business Day) all
amounts remaining unpaid in respect of such notice shall bear interest at
the rate set forth in Section 2.13(b). Each drawing under any Letter of
Credit shall (unless an event of the type described in clause (i) or (ii)
of Section 8(f) shall have occurred and be continuing with respect to the
Borrower, in which case the procedures specified in Section 3.4 for funding
by L/C Participants shall apply) constitute a request by the Borrower to
the Administrative Agent for a borrowing pursuant to Section 2.5 of ABR
Loans in the amount of such drawing. The Borrowing Date with respect to
such borrowing shall be the date of such drawing.
3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender,
any beneficiary of a Letter of Credit or any other Person. The Borrower
also agrees with the Issuing Lender that the Issuing Lender shall not be
responsible for, and the Borrower's Reimbursement Obligations under Section
3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred
or any claims whatsoever of the Borrower against any beneficiary of
such Letter of Credit or any such transferee. The Issuing Lender shall
not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Issuing Lender. The Borrower agrees that any
action taken or omitted by the Issuing Lender under or in connection with
any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with
the standards or care specified in the Uniform Commercial Code of the State
of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of
the Issuing Lender to the Borrower in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
SECTION IV. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each
Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at December 31, 1997 (including the notes thereto) (the
"Pro Forma Balance Sheet"), copies of which have heretofore been furnished
to each Lender, has been prepared giving effect (as if such events had
occurred on such date) to (i) the consummation of the Recapitalization,
(ii) the Loans to be made and the Senior Subordinated Notes to be assumed
on the Closing Date and the use of proceeds thereof and (iii) the payment
of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to
the Borrower as of the date of delivery thereof, and presents fairly on a
pro forma basis the estimated financial position of Borrower and its
consolidated Subsidiaries as at December 31, 1997, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as
at December 31, 1996 and December 31, 1997 and the related consolidated
statements of income and of cash flows for the fiscal years ended on such
dates, certified without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by Ernst
& Young LLP, present fairly the consolidated financial condition of the
Borrower as at such date, and the consolidated results of its operations
and its consolidated cash flows for the respective fiscal years then ended.
The unaudited consolidated balance sheet of the Borrower as at March 31,
1998, and the related unaudited consolidated statements of income and cash
flows for the three-month period ended on such date, present fairly the
consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for
the three-month period then ended (subject to normal year-end audit
adjustments and to the absence of footnotes). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed in the notes thereto). The Borrower
and its Subsidiaries do not have any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases
or unusual forward or long-term commitments, including, without limitation,
any interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, which are not reflected in the most
recent financial statements referred to in this paragraph (b) (or in the
notes thereto) or permitted to be incurred under this Agreement. During the
period from December 31, 1997 to and including the date of this Agreement
there has been no Disposition by the Borrower of any material part of its
business or Property, except for the Recapitalization and as permitted by
Section 7.5.
4.2 No Change. Since December 31, 1997 there has been no
development or event which has had or would be reasonably likely to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each Loan Party
and each Specified Foreign Subsidiary (a) is a corporation or partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization (except no representation is made as to
the good standing of any Subsidiary organized under the laws of a
jurisdiction in which there is no concept of good standing), (b) has the
corporate or partnership power and authority, and the legal right, to own
and operate its Property, to lease the Property it operates as lessee and
to conduct the business in which it is currently engaged, (c) is duly
qualified to do business and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification except to the extent
that the failure to so qualify would not, in the aggregate, be reasonably
likely to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably likely to have a
Material Adverse Effect.
4.4 Corporate or Partnership Power; Authorization; Enforceable
Obligations. Each Loan Party has the corporate or partnership power and
authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and, in the case of the Borrower,
to borrow hereunder. Each Loan Party has taken all necessary corporate
or partnership action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case
of the Borrower, to authorize the borrowings on the terms and conditions of
this Agreement. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the Recapitalization and the
borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of this Agreement or any of the Loan Documents, except
(i) consents, authorizations, filings and notices described in Schedule
4.4, which consents, authorizations, filings and notices have been obtained
or made and are in full force and effect, (ii) the filings referred to in
Section 4.19 and (iii) those which, in the aggregate, would not be
reasonably likely to have a Material Adverse Effect if not obtained or
made. Each Loan Document has been duly executed and delivered on behalf of
each Loan Party party thereto. This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such
Loan Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will
not violate any material Requirement of Law or any Contractual Obligation
of the Borrower or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
material properties or revenues pursuant to any Requirement of Law or any
such Contractual Obligation (other than the Liens created by the Security
Documents).
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened by or against the Borrower
or any of its Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which would be
reasonably likely to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which would be reasonably likely to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien
except as permitted by Section 7.3.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted that is
material to the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its Subsidiaries
taken as a whole. No material claim has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property that
is material to the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for
any such claim. The use of such Intellectual Property by the Borrower and
its Subsidiaries does not infringe on the rights of any Person, except to
the extent of any infringements which would not, in the aggregate, be
reasonably likely to have a Material Adverse Effect.
4.10 Taxes. The Borrower and each of its Subsidiaries has filed
or caused to be filed all Federal, state and other material tax returns
which are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
Property and all other taxes, fees or other charges imposed on it or any of
its Property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be); no tax Lien has been filed.
4.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now
and from time to time hereafter in effect or for any purpose which violates
the provisions of the Regulations of the Board. If requested by any Lender
or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation
U.
4.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the
aggregate) would be reasonably likely to have a Material Adverse Effect.
Hours worked by and payment made to employees of the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) would be reasonably likely to have a
Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) would be reasonably likely to have a
Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of the Borrower or the relevant Subsidiary.
4.13 ERISA. No Reportable Event has occurred during the
immediately preceding six-year period with respect to any Plan that resulted
or would be reasonably likely to result in any unpaid liability, and each Plan
(other than any Multiemployer Plan or any multiemployer health or welfare plan)
has complied and has been administered in all material respects with the
applicable provisions of ERISA and the Code, except as such Reportable Event or
such failure to comply or be so administered would not reasonably be likely to
have a Material Adverse Effect. The amount by which the present value of all
accrued benefits under each Single Employer Plan maintained by the Borrower
or any of its Subsidiaries or any Commonly Controlled Entity (based on
those assumptions used to fund the Plans), as of the last annual valuation
date applicable thereto, exceeds the value of the assets of each such Plan
allocable to such benefits, in the aggregate for all such Plans as to which
such present value of benefits exceeds the value of its assets (the
"Unfunded Pension Amount"), is less than $60,000,000, when aggregated with
the Potential Withdrawal Liability. Neither the Borrower nor any of its
Subsidiaries nor any Commonly Controlled Entity has during the immediately
preceding six-year period had a complete or partial withdrawal from any
Multiemployer Plan that resulted or would be reasonably likely to result in
any unpaid withdrawal liability under Section 4201 of ERISA that would be
reasonably likely to have a Material Adverse Effect, and the withdrawal
liability under Section 4201 of ERISA to which the Borrower or any of its
Subsidiaries or any Commonly Controlled Entity would become subject under
ERISA if the Borrower or any of its Subsidiaries or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans
as of the most recent valuation date applicable thereto (the "Potential
Withdrawal Liability") is not in excess of $60,000,000, when aggregated
with the Unfunded Pension Amount. Neither the Borrower nor any of its
Subsidiaries nor any Commonly Controlled Entity has received notice that
any Multiemployer Plan is in Reorganization or Insolvent where such
Reorganization or Insolvency has resulted, or would be reasonably likely to
result in an unpaid liability that would be reasonably likely to have a
Material Adverse Effect nor, to the best knowledge of the Borrower or any
of its Subsidiaries, is any such Reorganization or Insolvency reasonably
likely to occur. The obligations of the Borrower and each of its
Subsidiaries and each Commonly Controlled Entity for post retirement
benefits to be provided to their current and former employees under Plans
which are welfare benefits plans (as defined in Section 3(l) of ERISA) are
not reasonably likely to have a Material Adverse Effect, when aggregated
with their obligations with respect to the Unfunded Pension Amount and the
Potential Withdrawal Liability.
4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. No Loan Party is subject to regulation under any Requirement of
Law (other than Regulation X of the Board) which limits its ability to
incur Indebtedness.
4.15 Subsidiaries. (a) Schedule 4.15 sets forth as of the
Closing Date the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital
Stock owned by any Loan Party.
(b) There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted under compensatory stock option plans and other than directors'
qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except under the Loan Documents.
4.16 Use of Proceeds. The proceeds of the Loans shall be used
to finance a portion of the Recapitalization, to repay amounts outstanding
under the Existing Credit Agreement and to pay fees and expenses related to
the foregoing. The proceeds of the Revolving Credit Loans shall be used to
finance the working capital and general corporate needs of the Borrower and
its Subsidiaries in the ordinary course of business.
4.17 Environmental Matters. Except as individually or in the
aggregate would not be reasonably likely to result in a Material Adverse
Effect:
(a) The facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not contain,
and have not previously contained, any Materials of Environmental Concern
in amounts or concentrations or under circumstances which (i) constitute or
constituted a violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) The Properties and all operations at the Properties are in
material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated
by the Borrower or any of its Subsidiaries (the "Business"). Neither the
Borrower nor any of its Subsidiaries has assumed any liability of any other
Person under Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does the Borrower have knowledge or reason
to believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under
any Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business.
(f) There has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under Environmental
Laws.
4.18 Accuracy of Information, etc. No information, schedule,
exhibit or report or other document furnished by or on behalf of the
Borrower or any of its Subsidiaries to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or pursuant to
the terms of this Agreement, as such information, schedule, exhibit or
report or other document has been amended, supplemented or superseded by
any other information, schedule, exhibit or report or other document later
delivered to the same parties receiving such information, schedule, exhibit
or report or other document, contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the
statements contained therein, in light of the circumstances when made, not
materially misleading; provided that in the case of information, schedules,
exhibits or reports or other documents made, delivered or prepared by
Persons other than the Borrower, its Subsidiaries and their agents, such
representation and warranty is subject to the qualification that it is true
and correct only to the knowledge of the Borrower and its Subsidiaries. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made,
it being recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information
may differ from the projected results set forth therein by a material
amount. As of the date hereof, the representations and warranties contained
in the Recapitalization Documentation are true and correct in all material
respects. There is no fact known to any Loan Party on the date of the
Agreement that would be reasonably likely to have a Material Adverse Effect
that has not been expressly disclosed herein, in the other Loan Documents,
in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when
stock certificates representing such Pledged Stock and stock powers related
thereto duly executed in blank by the relevant pledgor are delivered to the
Administrative Agent, and in the case of the other Collateral described in
the Guarantee and Collateral Agreement, when financing statements in
appropriate form are filed in the offices specified on Schedule 4.19(a) and
such other filings as are specified in Schedule 3 to the Guarantee and
Collateral Agreement, the Guarantee and Collateral Agreement shall constitute
a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any
other Person (except, in the case of Collateral other than Pledged Stock,
Liens permitted by Section 7.3).
(b) Upon execution and delivery thereof by the parties thereto,
the U.K. Pledge Agreement shall be effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in not less than 65% of the Capital Stock of
Panavision Europe Limited and, when the actions specified in the U.K.
Pledge Agreement have been completed, security interests granted pursuant
thereto shall constitute a perfected first lien on, and security interest
in, all right, title and interest of the pledgor party thereto in such
Capital Stock.
(c) Upon execution and delivery thereof by the parties thereto,
the New Zealand Pledge Agreement shall be effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable security interest in not less than 65% of the
Capital Stock of Panavision NZ and, when the actions specified in the New
Zealand Pledge Agreement have been completed, security interests granted
pursuant thereto shall constitute a perfected first lien on, and security
interest in, all right, title and interest of the pledgor party thereto in
such Capital Stock.
4.20 Solvency. The Borrower is, and after giving effect to the
Recapitalization and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be Solvent on a
consolidated and unconsolidated basis.
4.21 Senior Indebtedness. The Obligations in respect of the
Loan Documents constitute "Senior Debt" of the Borrower under and as
defined in the Senior Subordinated Note Indenture. The obligations of each
Subsidiary Guarantor under the Guarantee and Collateral Agreement
constitute "Senior Debt" of such Subsidiary Guarantor under and as defined
in the Senior Subordinated Note Indenture.
4.22 Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of the Borrower's (i) computer
systems and (ii) equipment containing embedded microchips and the testing
of all such systems and equipment, as so reprogrammed, will be completed in
all material respects by June 30, 1999. The cost to the Borrower of such
reprogramming and testing is not reasonably likely to result in an Event of
Default or a Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of the Borrower and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Borrower to conduct
its business without any development or event which would be reasonably likely
to have a Material Adverse Effect.
SECTION V. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making
of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized officer of the
Borrower and each Subsidiary Guarantor, (iii) for the account of each
relevant Lender, Notes conforming to the requirements hereof and
executed and delivered by a duly authorized officer of the Borrower,
(iv) the U.K. Pledge Agreement, executed and delivered by a duly
authorized officer of each party thereto and (v) the New Zealand
Pledge Agreement, executed and delivered by a duly authorized officer
of each party thereto.
(b) Recapitalization, etc. (i) The following transactions shall
have been consummated, in each case on terms and conditions
reasonably satisfactory:
(x) the Recapitalization shall have been
consummated for an aggregate purchase price not exceeding
$654,600,000 (excluding fees and expenses incurred in
connection therewith);
(y) Holdings shall have received at least
$154,400,000 in cash from the proceeds of common stock
issued by Holdings to the Equity Investor, and such
proceeds shall have been contributed to the Borrower in
exchange for common stock issued by the Borrower; and
(z) (i) PX Escrow shall have issued the PX Escrow
Notes, and (ii) the Escrowed Property (as defined in the
Escrow Agreement) and PX Escrow's right, title and
interest to, and obligations under, the Senior
Subordinated Note Indenture, the Senior Subordinated
Notes, the Registration Agreement, the Purchase Agreement
and the Escrow Agreement shall have been assumed by the
Borrower; and
(ii) no material provision of the Recapitalization
Documentation shall have been waived, amended, supplemented or
otherwise modified in any material respect.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of the Borrower for the 1996 and
1997 fiscal years and (iii) unaudited interim consolidated financial
statements of the Borrower for each fiscal quarterly period ended
subsequent to the date of the latest applicable financial statements
delivered pursuant to clause (ii) of this paragraph as to which such
financial statements are available to the Borrower, and such
financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated
financial condition of the Borrower and its Subsidiaries, as
reflected in the financial statements or projections contained in the
Confidential Information Memorandum.
(d) Approvals. All governmental and third party approvals
(including landlords' and other consents) necessary or reasonably
advisable in connection with the Recapitalization, the continuing
operations of the Borrower and its Subsidiaries and the financings
and other transactions contemplated hereby shall have been obtained
and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by
any competent authority which would restrain, prevent or otherwise
impose adverse conditions on the Recapitalization or the financing
contemplated hereby.
(e) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Administrative
Agent), with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower, of the Recapitalization
Documentation and such other documents or instruments as may be
reasonably requested by the Administrative Agent, including, without
limitation, a copy of the Senior Subordinated Note Indenture and any
other debt instrument, security agreement or other material contract
to which the Loan Parties may be a party.
(f) Termination of Existing Credit Facility. The Administrative
Agent shall have received evidence satisfactory to the Administrative
Agent that the Existing Credit Agreement (and related security
documents) shall be simultaneously terminated, all amounts thereunder
shall be simultaneously paid in full and arrangements satisfactory to
the Administrative Agent shall have been made for the termination of
Liens and security interests granted in connection therewith
(including without limitation the existing U.K. pledge agreement).
(g) Fees. The Lenders, Arranger and the Administrative Agent
shall have received all fees required to be paid, and all expenses
for which invoices have been presented, on or before the Closing
Date.
(h) Business Plan. The Lenders shall have received
a financial model for fiscal years 1998-2005.
(i) Solvency Analysis. The Lenders shall have received a
reasonably satisfactory solvency opinion from an independent
valuation firm satisfactory to the Administrative Agent which shall
document the solvency of the Borrower on a consolidated basis after
giving effect to the Recapitalization and other transactions
contemplated hereby.
(j) Lien Searches. The Lenders shall have received the results
of a recent lien search in each of the jurisdictions where assets of
the Loan Parties are located, and such search shall reveal no liens
on any of the assets of the Borrower or its Subsidiaries except for
liens permitted by Sections 7.3 or 10.1(d) or discharged on or prior
to the Closing Date pursuant to documentation reasonably satisfactory
to the Administrative Agent.
(k) Environmental Due Diligence. The Lenders shall be
reasonably satisfied with the environmental condition of the real
property owned or leased by the Borrower and its Subsidiaries.
(l) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(m) Legal Opinions. The Lenders shall have received
the following executed legal opinions:
(i) the legal opinion (including as to matters of
intellectual property) of Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit E;
(ii) the legal opinion of local counsel in each of
the United Kingdom, New Zealand and Canada.
Each such legal opinion shall cover such other matters incident to
the transactions contemplated by this Agreement as the Lenders may
reasonably require.
(n) Pledged Stock; Stock Power. The Administrative Agent shall
have received the certificates representing the shares of Capital
Stock pledged pursuant to the Guarantee and Collateral Agreement, the
U.K. Pledge Agreement and the New Zealand Pledge Agreement, together
with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof, evidence
that the articles of association of Panavision Europe Limited have
been amended as required by the U.K. Pledge Agreement, and evidence
that all existing Liens over the shares in Panavision Europe Limited
have been released.
(o) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent, for the benefit
of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect
to Liens expressly permitted by Section 7.3), shall be in proper form
for filing, registration or recordation.
(p) Insurance. The Lenders shall have received insurance
certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement.
(q) Working Capital Requirements. The Lenders shall be
reasonably satisfied with the sufficiency of amounts available under
the Revolving Credit Facility to meet the ongoing working capital
needs of the Borrower and its Subsidiaries following the
Recapitalization and the consummation of the other transactions
contemplated hereby.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on
any date (including, without limitation, its initial extension of credit)
is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and
as of such date as if made on and as of such date, except to the
extent that such representations and warranties relate to a
particular date, in which case such representations and warranties
shall be true and correct in all material respects on and as of such
date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION VI. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or the Payment Obligations are not Fully Satisfied, the
Borrower shall and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender,
through the Administrative Agent:
(a) as soon as available, but in any event within 105 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 50
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments).
All such financial statements shall be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender,
through the Administrative Agent, or, in the case of clause (g), to the
relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's
knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and (ii) (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by
the Borrower and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal
quarter or fiscal year of the Borrower, as the case may be, and (y)
in the case of quarterly or annual financial statements, to the
extent not previously disclosed to the Administrative Agent, a
Schedule setting forth each Patent, Trademark and Copyright that has
been registered or for which an application for registration has been
filed with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, since the date of the
most recent Schedule delivered pursuant to this clause (y) (or, in
the case of the first such Schedule so delivered, since the Closing
Date);
(c) as soon as available, and in any event no later than 60
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income) (collectively,
the "Budget"), which Budget shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Budget is
based on reasonable estimates, information and assumptions and that
such Responsible Officer has no reason to believe that such Budget is
incorrect or misleading in any material respect;
(d) within 60 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial
condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter;
(e) as soon as reasonably practicable, copies of substantially
final drafts of any proposed amendment, supplement, waiver or other
modification with respect to the Senior Subordinated Note Indenture;
(f) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to the
holders of any class of its debt securities or public equity
securities and within five days after the same are filed, copies of
all financial statements and reports which the Borrower may make to,
or file with, the SEC; and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be,
all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves with respect thereto to the extent, if any,
required by GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be. Notwithstanding anything to the contrary
in the foregoing sentence, the Borrower shall not be in default under this
Section 6.3 unless the aggregate amount of non-contested Indebtedness or
obligations which the Borrower and its Subsidiaries have so failed to pay,
discharge or satisfy before they become delinquent and which remain delinquent
at the time of determination is more than $5,000,000 in the aggregate.
6.4 Conduct of Business and Maintenance of Existence, etc. (a)
(i) Preserve, renew and keep in full force and effect its corporate
existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of
its business, except, in each case, as otherwise permitted by Sections 7.4
and 7.5 and except, in the case of clause (ii) above, to the extent that
failure to do so would not be reasonably likely to have a Material Adverse
Effect; and (b) comply with all Contractual Obligations and Requirements of
Law except to the extent that failure to comply therewith would not, in the
aggregate, be reasonably likely to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all property
useful and necessary in its business in good working order and condition,
except where the failure to do so would not, in the aggregate, be
reasonably likely to have a Material Adverse Effect and (b) maintain with
financially sound and reputable insurance companies insurance on such of
its property and against such liabilities in at least such amounts and
against at least such risks as are customarily insured against in the same
general area by companies engaged in the same or a similar business and
furnish to the Administrative Agent, upon written request, and to each
Lender which makes a written request through the Administrative Agent,
reasonable information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of accounts and records in which entries in conformity in
all material respects with all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities and
which shall permit the preparation of financial statements in conformity
with GAAP and (b) permit representatives of any Lender to visit and inspect
any of its properties as such Lender may request through the Administrative
Agent and (during such visit or inspection, or otherwise upon request
through the Administrative Agent) examine and make abstracts from any of
its books and records it may reasonably request at any reasonable time and
as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower
and its Subsidiaries with officers and employees of the Borrower and its
Subsidiaries and with its independent certified public accountants.
6.7 Notices. Promptly give notice to each Lender, through the
Administrative Agent of:
(a) the occurrence of any Default or Event of
Default;
(b) any default or event of default by the Borrower or any of
its Subsidiaries under any Contractual Obligation of the Borrower or
any of its Subsidiaries or the institution of, or the occurrence of
any material adverse change in the status or likely result of, any
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any
Governmental Authority or any other Person which, in any of the
foregoing cases, would be reasonably likely to have a Material Adverse
Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which the amount involved is $5,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought, which in any of the foregoing cases would be
reasonably likely to have a Material Adverse Effect;
(d) any of the following events, as soon as practicable, and in
any event, within 30 days after the Borrower knows or has reason to
know thereof:
(i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan; or
(ii) the institution of proceedings or the taking or
expected taking of any other action by PBGC or the Borrower or
any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Single Employer or Multiemployer
Plan and with respect to a Multiemployer Plan, the
Reorganization or Insolvency of such Plan;
if such Reportable Event, termination, withdrawal or partial
withdrawal (and, in the case of any Multiemployer Plan, its
Reorganization or Insolvency) would be reasonably likely to result in
liability to the Borrower and its Subsidiaries, in the aggregate, in
excess of $60,000,000; and
(e) any development or event which has had or would be
reasonably likely to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower or the relevant
Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all
tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities
regarding Environmental Laws, except (i) to the extent that the failure to
perform any of the obligations contained in this Section 6.8(b) would not
be reasonably likely to have a Material Adverse Effect or (ii) to the
extent that such obligations are being contested in good faith by
appropriate proceedings and the pendency of such proceedings would not be
reasonably likely to have a Material Adverse Effect.
6.9 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than a Foreign Subsidiary) (other than (x) any real
property or any Property described in paragraph (b), (c) or (d) below and (y)
any Property subject to a Lien expressly permitted by Section 7.3(g)) as to
which the Administrative Agent, for the benefit of the Lenders, does not have
a perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order
to grant to the Administrative Agent, for the benefit of the Lenders, a
security interest in such Property and (ii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in such Property,
including without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $5,000,000
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than any such real property owned by a Foreign Subsidiary or subject
to a Lien expressly permitted by Section 7.3(g)), promptly (i) execute and
deliver a first priority mortgage in form and substance satisfactory to and
in favor of the Administrative Agent, for the benefit of the Lenders,
covering such real property, (ii) if requested by the Administrative Agent,
provide the Lenders with (x) title and extended coverage insurance covering
such real property in an amount at least equal to the purchase price of
such real estate (or such other amount as shall be reasonably specified by
the Administrative Agent) as well as a current ALTA survey thereof,
together with a surveyor's certificate and (y) any consents or estoppels
reasonably deemed necessary or advisable by the Administrative Agent in
connection with such mortgage or deed of trust, each of the foregoing in
form and substance reasonably satisfactory to the Administrative Agent and
(iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than a Foreign
Subsidiary) created or acquired after the Closing Date by the Borrower
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be a Foreign Subsidiary) or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary
which is owned by the Borrower or any of its Subsidiaries, (ii) deliver to
the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such Subsidiary, as the case may
be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee
and Collateral Agreement and (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the
Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such
new Subsidiary, including, without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form
and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) With respect to any new first-tier Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Domestic Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable in order
to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary which is owned by the Borrower or any of its Domestic
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the Borrower
or such Subsidiary, as the case may be, and take such other action as may
be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Lien of the Administrative Agent thereon, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory
to the Administrative Agent.
(e) If any amount in excess of $5,000,000 payable under or in
connection with any of the Collateral shall be or become evidenced by an
Instrument or Chattel Paper (in each case as defined in the Guarantee and
Collateral Agreement), such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to the Guarantee and Collateral Agreement.
SECTION VII. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or the Payment Obligations have not been Fully Satisfied,
the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Total Leverage Ratio. Permit the
Consolidated Total Leverage Ratio as at the last day of any fiscal quarter
which day shall occur during the following periods to exceed the following
respective ratios:
Consolidated Total
Period Leverage Ratio
June 30, 1998 to March 31, 1999 7.00 to 1.00
April 1, 1999 to September 30, 1999 6.75 to 1.00
October 1, 1999 to September 30, 2000 6.50 to 1.00
October 1, 2000 to June 30, 2001 6.00 to 1.00
July 1, 2001 to June 30, 2002 5.50 to 1.00
July 1, 2002 and thereafter 5.00 to 1.00
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower to be less than 2.50 to 1.00; provided that (i) for the purposes
of determining the ratio described above for the fiscal quarter of the Borrower
ending September 30, 1998 (the first date for which such ratio shall be
calculated hereunder), Consolidated Interest Expense shall be an amount equal
to the Consolidated Interest Expense for the fiscal quarter ending September
30, 1998 multiplied by 4, (ii) for purposes of determining the ratio described
above for the fiscal quarter of the Borrower ending December 31, 1998,
Consolidated Interest Expense shall be an amount equal to the sum of
Consolidated Interest Expense for the fiscal quarters ending September 30,
1998 and December 31, 1998 multiplied by two and (iii) for purposes of
determining the ratio described above for the fiscal quarter of the
Borrower ending March 31, 1999, Consolidated Interest Expense shall be an
amount equal to the sum of Consolidated Interest Expense for the fiscal
quarters ending September 30, 1998, December 31, 1998 and March 31, 1999
multiplied by 4/3.
7.2 Limitation on Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any
Loan Document;
(b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of
any Subsidiary Guarantor to the Borrower or any other Subsidiary,
(iii) of any Foreign Subsidiary to the Borrower, any Subsidiary
Guarantor or any Specified Foreign Subsidiary in an aggregate
principal amount at any time outstanding not to exceed (I)
$15,000,000 less (II) the amount of any investment permitted under
Section 7.8(g)(iii) that is not Indebtedness and only to the extent
such investment has not been repaid in cash to the Borrower, any
Subsidiary Guarantor or any Specified Foreign Subsidiary (whichever
such Person made such investment) and (iv) of any Foreign Subsidiary
to any other Foreign Subsidiary (other than any Specified Foreign
Subsidiary);
(c) Indebtedness in respect of Rate Hedging Agreements entered
into for non-speculative purposes;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof);
(e) (i) Indebtedness of the Borrower in respect of Senior
Subordinated Notes the gross proceeds of which did not exceed
$150,000,000 and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness; provided that such
Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated
Notes;
(f) additional Indebtedness of the Borrower or any of its
Subsidiaries (including, without limitation, Capital Leases and
Indebtedness secured by Liens permitted by Section 7.3(g)) in an
aggregate principal amount (for the Borrower and all Subsidiaries)
not to exceed $10,000,000 at any one time outstanding;
(g) Guarantee Obligations of any Subsidiary of the Borrower in
respect of Indebtedness of the Borrower or any Wholly Owned
Subsidiary Guarantor to the extent such Indebtedness is not
prohibited by this Agreement;
(h) Guarantee Obligations of the Borrower in respect of
Indebtedness of any Wholly Owned Subsidiary Guarantor to the extent
such Indebtedness is not prohibited by this Agreement; and
(i) Indebtedness of a Person which becomes a Subsidiary after
the date hereof, provided that (i) such Indebtedness existed at the
time such Person became a Subsidiary and was not incurred in
anticipation thereof, (ii) immediately after giving effect to the
acquisition of such Person, no Default or Event of Default shall have
occurred and be continuing and (iii) the aggregate principal amount
of such Indebtedness does not exceed $7,500,000.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except for:
(a) 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
GAAP;
(b) 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 30 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred and statutory or contractual bankers' Liens on
monies held in bank accounts in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto 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 any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided
that no such Lien is spread to cover any additional Property after
the Closing Date (other than a substitution of like property) and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(f) to finance the
acquisition (by purchase, construction or otherwise) of fixed or
capital assets, provided that (i) such Liens shall be created
substantially simultaneously with such acquisition of such fixed or
capital assets or such Liens existed on such Property before the time
of its acquisition and were not created in anticipation thereof, (ii)
such Liens do not at any time encumber any Property other than the
Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security
Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course
of its business and covering only the assets so leased;
(j) attachment, judgment or other similar Liens arising in
connection with court or arbitration proceedings, provided that the
same are discharged, or that execution or enforcement thereof is
stayed pending appeal, within 30 days or (in the case of any
execution or enforcement pending appeal) such lesser time during
which such appeal may be taken;
(k) possessory Liens in favor of brokers and dealers arising in
connection with the acquisition or disposition of investments of the
type permitted in Section 7.8(b); provided that such Liens (i) attach
only to such investments and (ii) secure only obligations incurred in
the ordinary course and arising in connection with the acquisition or
disposition of such investments and not any obligation in connection
with margin financing;
(l) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness of such
Subsidiary permitted by Section 7.2(i); provided that (i) such Liens
and Indebtedness existed at the time such Person became a Subsidiary
and was not created in anticipation thereof, (ii) any such Lien is
not spread to cover any other property or assets of such Person after
the time such Person becomes a Subsidiary, (iii) the amount of the
Indebtedness secured thereby is not increased and (iv) immediately
after giving effect to the incurrence of such Lien, no Default or
Event of Default shall have occurred and be continuing;
(m) Liens in the nature of counterpart deposits or pledges of
cash deposits of any Foreign Subsidiary to secure Indebtedness of any
Foreign Subsidiary, which Indebtedness is permitted pursuant to
Section 7.2, provided that the amount of any such deposit does not
exceed the amount of the Indebtedness it secures;
(n) Liens in the nature of options in respect of up to 15% of
the Capital Stock of Panavision Canada Holdings held by its
directors, officers or employees; and
(o) any extension, renewal or replacement of the foregoing,
provided that the Liens permitted by this paragraph shall not extend
to or cover any additional Indebtedness or Property (other than a
substitution of like Property).
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving
corporation);
(b) any Foreign Subsidiary (other than Panavision Europe
Limited, Panavision NZ and Panavision Canada Holdings) may be merged
or consolidated with or into any other Foreign Subsidiary;
(c) any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Wholly Owned Subsidiary Guarantor and, in the event such
Subsidiary shall so Dispose of all of its assets, such Subsidiary
may liquidate, wind up or dissolve;
(d) the Recapitalization;
(e) any Foreign Subsidiary (other than Panavision Europe
Limited, Panavision NZ and Panavision Canada Holdings) may Dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to
any other Foreign Subsidiary and, in the event such Foreign
Subsidiary shall so Dispose of all of its assets, such Foreign
Subsidiary may liquidate, wind up or dissolve; and
(f) any Foreign Subsidiary that does not have any assets or
Property may liquidate, wind up or dissolve.
7.5 Limitation on Sale of Assets. Dispose of any of its
Property or business (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the
case of any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock (other than director's qualifying shares) to any Person (in
each case other than the Borrower or any Wholly Owned Subsidiary
Guarantor), except:
(a) (i) the Disposition of Property which has become
uneconomic, obsolete or worn out in the ordinary course of business,
(ii) the Disposition of inventory in the ordinary course of business
and (iii) the Disposition of other Property in the ordinary course of
business for fair market value;
(b) Dispositions permitted by Sections 7.3, 7.4 or 7.6; and
(c) the Disposition of other assets having a fair market value
not to exceed $5,000,000 in the aggregate, provided that the
requirements of Section 2.10(a) are complied with in connection
therewith.
Any Collateral which is sold, transferred or otherwise conveyed pursuant to
this Section 7.5 to a Person other than the Borrower and its Subsidiaries
shall, upon the consummation of such sale in accordance with the terms of
this Agreement and the other Loan Documents, be released from the Liens
granted pursuant to the Security Documents and each Lender hereby
authorizes and instructs the Administrative Agent to take such action as
the Borrower reasonably may request to evidence such release.
7.6 Limitation on Dividends. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital
Stock of the Borrower or any Subsidiary or any warrants or options to
purchase any such Capital Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Borrower
or any Subsidiary (collectively, "Restricted Payments"), except that (i)
any Subsidiary may make Restricted Payments to the Borrower or any Wholly
Owned Subsidiary Guarantor or (ii) Panavision Canada Holdings may make
Restricted Payments to repurchase its stock options or repurchase its
outstanding shares from time to time, up to but not exceeding $3,000,000 in
the aggregate.
7.7 Limitation on Capital Expenditures. Make or commit to make
any Capital Expenditure, except (a) Capital Expenditures of the Borrower
and its Subsidiaries in the ordinary course of business not exceeding
$50,000,000 per fiscal year for the 1998-2000 fiscal years of the Borrower
and $52,000,000 in each fiscal year of the Borrower thereafter; provided
that (i) up to $15,000,000 of any such amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over
for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year shall
be deemed made, first, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (i) above and, second, in respect of
amounts permitted for such fiscal year as provided above; (b) Capital
Expenditures made with the proceeds of any event which would be a Recovery
Event but for the second parenthetical clause in the definition thereof;
(c) Capital Expenditures made in connection with a new facility to be
leased by Panavision Europe Limited located at Xxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxx XX0 ONN, United Kingdom with the proceeds of the Disposition of
facilities owned by Panavision Europe Limited located at Xxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxx XXX 0XX, Xxxxxx Xxxxxxx and Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxx XXX 0XX, Xxxxxx Xxxxxxx; (d) Capital Expenditures made with
Excess Cash Flow not required to be applied to the prepayment of the Term
Loans and/or the reduction of the Revolving Credit Commitments pursuant to
Section 2.10(b); and (e) Capital Expenditures made with the proceeds of any
Dispositions of Property by the Borrower or its Subsidiaries pursuant to
Section 7.5(a)(i).
7.8 Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit (by way of guaranty or otherwise)
or capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets constituting all or a material part of a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary
course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees, directors and officers of
the Borrower or its Subsidiaries in the ordinary course of business
(including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount for the Borrower and its
Subsidiaries not to exceed $1,500,000 at any one time outstanding;
(e) the Recapitalization;
(f) investments made by the Borrower or any of its Subsidiaries
with the proceeds of any Recovery Event or any event which would be a
Recovery Event but for the parenthetical clause in the definition
thereof;
(g) (i) any Subsidiary may make investments in the Borrower (by
way of capital contribution loan, or otherwise), (ii) the Borrower
and any Subsidiary may make investments in, or create, any Subsidiary
Guarantor (by way of capital contribution, loan or otherwise),
provided that, in any such case, the requirements of Section 6.9 are
satisfied, (iii) the Borrower, any Subsidiary Guarantor, or any
Specified Foreign Subsidiary may make investments in, or create, any
Foreign Subsidiary (by way of capital contribution, loan or
otherwise), provided that (x) the requirements of Section 6.9 are
satisfied and (y) the aggregate amount of all investments in such
Foreign Subsidiaries that are not Indebtedness and that have not been
repaid in cash to the Borrower, any Subsidiary Guarantor or any
Specified Foreign Subsidiary (whichever such Person made such
investment) shall not exceed (I) $15,000,000 less (II) the aggregate
principal amount of any Indebtedness of any Foreign Subsidiary at any
such time outstanding in accordance with Section 7.2(b)(iii) and (iv)
any Foreign Subsidiary (other than any Specified Foreign Subsidiary)
may make investments in, or create, any Foreign Subsidiary (by way of
capital contribution, loan or otherwise);
(h) investments by the Borrower and its Subsidiaries in the
ordinary course of business in accounts, contract rights and chattel
paper (as defined in the Uniform Commercial Code), put and call
foreign exchange options and foreign exchange forwards and futures to
the extent necessary to hedge foreign exchange exposures and notes
receivable, and in Rate Hedging Agreements;
(i) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers or in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising out of the ordinary course of
business; provided that the Borrower and its Subsidiaries have paid
no new consideration (other than the forgiveness of Indebtedness or
other obligations) therefor; and
(j) so long as no Default or Event of Default shall have
occurred and be continuing, or would result therefrom (including,
without limitation, compliance with Section 7.15), other investments
in Persons not to exceed $7,500,000 in the aggregate at any time
(such investments to be measured by their fair market value at the
time of the investment).
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with
respect to the Senior Subordinated Notes (other than scheduled interest
payments required to be made in cash or pursuant to the Exchange Offer or
any refinancing of the Senior Subordinated Notes contemplated by the
definition thereof), (b) amend, modify, waive or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to,
any of the terms of the Senior Subordinated Notes (other than any such
amendment, modification, waiver or other change which (i) would extend the
maturity or reduce the amount of any payment of principal thereof or which
would reduce the rate or extend the date for payment of interest thereon
and are otherwise no less favorable to the Lenders (including without
limitation the subordination provisions thereof) and (ii) does not involve
the payment of a consent fee) or (c) designate any Indebtedness as
"Designated Senior Debt" for the purposes of the Senior Subordinated Note
Indenture.
7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction
is otherwise permitted under this Agreement, in the ordinary course of
business of the Borrower or such Subsidiary, as the case may be, and upon
fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate; provided,
however, that this Section 7.10 shall not apply to (i) any transaction
contemplated by a Tax Sharing Agreement entered into on or after the date
on which the Borrower becomes a member of the affiliated group of
corporations of which the Equity Investor is the common parent for purposes
of filing a consolidated federal income tax return and (ii) the
transactions contemplated by the Recapitalization Agreement, the
Stockholders Agreement and the Escrow Agreement (as in effect on the date
hereof and as amended, supplemented or otherwise modified from time to time
in a manner that is not materially adverse to the Lenders).
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or
any Subsidiary of real or personal property which has been or is to be sold
or transferred by the Borrower or such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of the Borrower or
such Subsidiary.
7.12 Limitation on Changes in Fiscal Periods.
Permit the fiscal year of the Borrower to end on a day other than December 31
or change the Borrower's method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement which prohibits or limits
the ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property, assets or
revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any guarantor, its obligations under the
Guarantee and Collateral Agreement, other than (a) this Agreement and the
other Loan Documents, (b) the Senior Subordinated Note Indenture and (c)
any agreements governing any purchase money Liens or Capital Leases
otherwise permitted hereby (in which case, any prohibition or limitation
shall only be effective against the assets financed thereby); provided that
any of the Borrower and its Subsidiaries may enter into any such agreement
to the extent that such agreement is in connection with a Lien permitted by
Section 7.3 or a sale of assets permitted by Section 7.5 and any such
prohibitions or limitations apply only to the Property encumbered by such
Lien or subject to such sale.
7.14 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary of the Borrower
to (a) pay dividends or make any other distributions in respect of any
Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to,
the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to the Borrower or any other Subsidiary of the Borrower or (c)
transfer any of its assets to the Borrower or any other Subsidiary of the
Borrower, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents or the
Senior Subordinated Note Indenture, (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement which has been entered into in
connection with the Disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary or (iii) any restrictions with respect
to the Borrower or any of its Subsidiaries imposed pursuant to an agreement
which has been entered into in connection with a Lien permitted by Section
7.3 or a sale of assets permitted by Section 7.5 and any such prohibitions
or limitations apply only to the Property encumbered by such Lien or
subject to such sale.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in
which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or which are reasonably related thereto.
7.16 Limitation on Changes to Certificate of Incorporation.
Amend its certificate of incorporation in any manner materially adverse to
the Lenders without the prior written consent of the Required Lenders.
SECTION VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within three days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or
deemed made; or
(c) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of
Section 6.4(a) (with respect to the Borrower only), Section VII or
Section 5.6 of the Guarantee and Collateral Agreement; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for
a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall Cross
Default; or
(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the
Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity of the
Borrower 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; provided that, in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events
or conditions, if any, would be reasonably likely to have a Material
Adverse Effect; or
(h) (i) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not covered by insurance) of $5,000,000 or
more or (ii) any non-monetary judgment or order shall be rendered
against the Borrower or any of its Subsidiaries that is reasonably
likely to have a Material Adverse Effect, and in the case of either
clause (i) or (ii), there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect
unless such judgment or order shall have been vacated, satisfied,
discharged or bonded pending appeal; or
(i) Any of the Security Documents shall cease, for any reason
(other than any act on the part of the Administrative Agent or any
Lender), to be in full force and effect, or any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall
cease, for any reason (other than any act on the part of the
Administrative Agent or any Lender), to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than any act
on the part of the Administrative Agent or any Lender), to be in full
force and effect or any Loan Party or any Affiliate of any Loan Party
shall so assert; or
(k) Any Change of Control shall occur; or
(l) The Senior Subordinated Notes or the guarantees thereof
shall cease, for any reason, to be validly subordinated to the
Obligations in respect of the Loan Documents or the obligations of
the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated
Note Indenture, or any Loan Party, any Affiliate of any Loan Party,
the trustee in respect of the Senior Subordinated Notes or the
holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or
both of the following actions may be taken: (i) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
to be due and payable forthwith, whereupon the same shall immediately
become due and payable. With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time
deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under
such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Borrower hereunder and
under the other Loan Documents then due and payable shall have been paid in
full, the balance, if any, in such cash collateral account shall be
returned to the Borrower (or such other Person as may be lawfully entitled
thereto).
SECTION IX. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action
on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties
made by any Loan Party or any officer thereof contained in this Agreement
or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document
or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or the Loan Parties), independent accountants and
other experts selected by the Administrative Agent. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders (or,
if so specified by this Agreement, all Lenders) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received
notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is
a "notice of default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties
to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and
made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which
may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do
so), ratably according to their respective Aggregate Exposure Percentages
in effect on the date on which indemnification is sought under this Section
9.7 (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of, the Commitments, this
Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or
in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements which are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
Section 9.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with any Loan Party as though
the Administrative Agent was not the Administrative Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of Credit issued
or participated in by it, the Administrative Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall (unless an Event of Default under
Section 8(a) or Section 8(f) with respect to the Borrower shall have
occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the
part of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Loans. If no successor agent has accepted
appointment as Administrative Agent by the date that is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is
the subject of a Disposition which is permitted by this Agreement or which
has been consented to in accordance with Section 10.1.
9.11 The Arranger. The Arranger, in its capacity as
such, shall have no duties or responsibilities, and shall incur no liability,
under this Agreement and the other Loan Documents.
9.12 The Documentation Agent. The Documentation Agent, in its
capacity as such, shall have no duties or responsibilities, and shall incur
no liability, under this Agreement and the other Loan Documents.
SECTION X. MISCELLANEOUS
10.1 Amendments and Waivers. (a) Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the
relevant Loan Document may, or (with the written consent of the Required
Lenders) the Administrative Agent and each Loan Party party to the relevant
Loan Document may, from time to time, (i) enter into written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (ii) waive, on such terms and conditions as the
Required Lenders, or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) forgive the principal amount or extend the final scheduled date of
maturity of any Loan, extend the scheduled date of any amortization payment
in respect of any Term Loan, reduce the stated rate of any interest, fee or
letter of credit commission payable hereunder or extend the scheduled date
of any payment thereof, or increase the amount or extend the expiration
date of any Lender's Revolving Credit Commitment, in each case without the
consent of each Lender directly affected thereby; (ii) amend, modify or
waive any provision of this Section 10.1 or reduce any percentage specified
in the definition of Required Lenders or Required Prepayment Lenders,
consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement and the other Loan Documents, release
all or substantially all of the Collateral or release all, or such number
of the Subsidiary Guarantors as represent substantially all of the credit
support for the Obligations provided by the Subsidiary Guarantors at such
time, from their obligations under the Guarantee and Collateral Agreement,
in each case without the written consent of all Lenders; (iii) reduce the
percentage specified in the definition of Majority Facility Lenders without
the written consent of all Lenders under each affected Facility; (iv)
change the allocation of payments among the Tranche A Term Loans, the
Tranche B Term Loans and the Revolving Credit Facility, as applicable,
specified in Sections 2.10(c) or 2.16(b) without the consent of the
Required Prepayment Lenders; (v) amend, modify or waive any provision of
Section 9 without the written consent of the Administrative Agent; (vi)
amend, modify or waive any provision of Section 3 without the written
consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and
shall be binding upon the Loan Parties, the Lenders, the Administrative
Agent and all future holders of the Loans. In the case of any waiver, the
Loan Parties, the Lenders and the Administrative Agent shall be restored to
their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent
thereon.
(b) To the extent that the execution, delivery or performance
of any Loan Document constitutes a Default or an Event of Default under
(and as defined in) the Existing Credit Agreement, each Lender hereunder
which is a party to the Existing Credit Agreement hereby waives such
Default or Event of Default.
(c) To the extent that the existence or performance of any
Basic Document (as defined in the Existing Credit Agreement) constitutes a
Default or an Event of Default hereunder, each Lender hereunder hereby waives
such Default or Event of Default; provided that the Existing Credit Agreement
is terminated in the manner and at the time contemplated by Section 5.1(f).
(d) Each Lender hereby agrees that any Security Document under
(and as defined in) the Existing Credit Agreement, and any financing
statement or similar filing on account thereof, which remains in effect
after the date hereof shall be deemed not to constitute a "Lien" for
purposes of this Agreement; provided that such Security Documents are
terminated in the manner and at the time contemplated by Section 5.1(f) and
the Borrower shall use best efforts to terminate or cause to be terminated
such filings upon the termination of the Existing Credit Agreement.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered, or three Business Days
after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the case of the
Borrower and the Administrative Agent, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the
case of the Lenders, or to such other address as may be hereafter notified
by the respective parties hereto:
The Borrower: Panavision Inc.
0000 XxXxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: 000-000-0000
Telephone: 000-000-0000
The Administrative Agent: The Chase Manhattan Bank,
Loan & Agency Services
Xxx Xxxxx Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
provided that any notice, request or demand to or upon the
Administrative Agent or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents
and in any document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and the Arranger for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent but not including any fees and
disbursements of counsel to the Lenders, (b) to pay or reimburse each
Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents,
including, without limitation, the reasonable fees and disbursements of
counsel to each Lender and of counsel to the Administrative Agent, (c) to
pay, indemnify, and hold each Lender and the Administrative Agent harmless
from, any and all recording and filing fees or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender, the Documentation Agent and the
Administrative Agent and their respective officers, directors, employees,
affiliates, and agents (each, an "indemnitee") harmless from and against
any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and the other Loan
Documents, including, without limitation, any of the foregoing relating to
the use of proceeds of the Loans and other extensions of credit hereunder
or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower any of its
Subsidiaries or any of the Properties and the reasonable fees and expenses
of legal counsel in connection with claims, actions or proceedings by any
indemnitee against the Borrower hereunder (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"); provided that the
Borrower shall have no obligation hereunder to any indemnitee with respect
to (i) indemnified liabilities to the extent such indemnified liabilities
are found by a final decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such
indemnitee, (ii) legal proceedings commenced against any such indemnified
person by any security holder or creditor (other than the Borrower, its
Subsidiaries and its Affiliates) thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity
as such, (iii) legal proceedings commenced against any Lender or any
Issuing Lender (in their respective capacities as such) by any other Lender
or by the Administrative Agent (provided that for purposes of this clause
(iii) only, each of such other Lender, Issuing Lender and the
Administrative Agent shall be entitled to indemnity hereunder to the extent
that such legal proceedings have been commenced by it to enforce the
provisions of the Loan Documents) or (iv) amounts of the types referred to
in clauses (a) through (c) above except as provided therein. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waive and agree to cause its Subsidiaries to so waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
indemnitee. The agreements in this Section shall survive repayment of the
Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) Except as otherwise provided in Section 10.18, this Agreement shall be
binding upon and inure to the benefit of the Borrower, the Lenders, the
Administrative Agent, all future holders of the Loans and their respective
successors and assigns, except that the Borrower may not assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the
other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under
this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Loan for all
purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or
any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal
of, or interest on, the Loans or any fees payable hereunder, or postpone
the date of the final maturity of the Loans, in each case to the extent
subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence
of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement
to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement; provided that, in
purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Lenders the proceeds thereof as provided in
Section 10.7(a) as fully as if it were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of
Sections 2.17, 2.18 and 2.19 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.18, such Participant shall
have complied with the requirements of said Section and provided, further,
that no Participant shall be entitled to receive any greater amount
pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such
transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and with written notice to the Administrative Agent, at any
time and from time to time assign to any Lender or any affiliate or
Approved Fund thereof or, with the consent of the Borrower, the
Administrative Agent and the Issuing Lender (which, in each case, shall not
be unreasonably withheld or delayed), to an additional bank, financial
institution or other entity (an "Assignee") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance (an
"Assignment and Acceptance"), substantially in the form of Exhibit D, executed
by such Assignee, such Assignor, and the Administrative Agent (and, where the
consent of the Borrower is required pursuant to the foregoing provisions,
by the Borrower) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that no such assignment
to an Assignee (other than any Lender or any affiliate or Approved Fund
thereof) shall be in an aggregate principal amount of less than $5,000,000
(other than in the case of an assignment of all of a Lender's interests
under this Agreement), unless otherwise agreed by the Borrower and the
Administrative Agent. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment and/or Loans as set
forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this Section 10.6, the consent of the
Borrower shall not be required for any assignment which occurs at any time
when any Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time and any Notes
evidencing such Loans. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent
and the Lenders shall treat each Person whose name is recorded in the
Register as the owner of the Loan and any Note evidencing such Loan
recorded therein for all purposes of this Agreement. Any assignment of any
Loan whether or not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register (and
each Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and
Acceptance, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee and the old
Notes shall be returned by the Administrative Agent to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate or Approved Fund thereof or a
Person under common management with such Lender, by the Borrower and the
Administrative Agent) together with payment to the Administrative Agent of
a registration and processing fee of $3,500 (except that no such registration
and processing fee shall be payable in the case of an Assignee which is
already a Lender or is an affiliate or Approved Fund of a Lender), the
Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice of
such acceptance and recordation to the Lenders and the Borrower. On or
prior to such effective date, the Borrower, at its own expense, upon
request, shall execute and deliver to the Administrative Agent (in exchange
for the Revolving Credit Note and/or Term Notes, as the case may be, of the
assigning Lender) a new Revolving Credit Note and/or Term Notes, as the
case may be, to the order of such Assignee in an amount equal to the
Revolving Credit Commitment and/or applicable Term Loans, as the case may
be, assumed or acquired by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Revolving Credit Commitment
and/or Term Loans, as the case may be, upon request, a new Revolving Credit
Note and/or Term Notes, as the case may be, to the order of the assigning
Lender in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, retained by it hereunder. Such
new Notes shall be dated the Closing Date and shall otherwise be in the
form of the Note replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of
Loans and Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any
Loan or Note to any Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in
Section 8(f), or otherwise), in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of such
other Lender's Loans or the Reimbursement Obligations owing to such other
Lender, or interest thereon, such Benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each
such other Lender's Loan and/or of the Reimbursement Obligations owing to
each such other Lender, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon both the occurrence of an Event of Default and
acceleration of the obligations owing in connection with this Agreement,
each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, to set off and appropriate and apply
against any indebtedness, whether matured or unmatured, of the Borrower to
such or any other Lender, any amount owing from such Lender to the Borrower
at, or at any time after, the happening of both of the above mentioned
events, and such right of set-off may be exercised by such Lender against
the Borrower or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receivers, custodian or execution,
judgment or attachment creditor of the Borrower, or against anyone else
claiming through or against the Borrower or such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receivers, or
execution, judgment or attachment creditor, notwithstanding the fact that
such right of set-off shall not have been exercised by such Lender prior to
the making, filing or issuance, or service upon such Lender of, or of
notice of, any such petition, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance
of execution, subpoena, order or warrant. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender; provided that the failure to give such
notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof and supersede any
and all other oral or written agreements heretofore made (including,
without limitation, the Commitment Letter and the Fee Letter (except as
expressly provided for therein)), and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of
the United States for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth
in Section 10.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 10.12 any special, exemplary,
punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all Confidential Information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate of any Lender, (b)
to any Participant or Assignee (each, a "Transferee") or prospective Transferee
which agrees to comply with the provisions of this Section, (c) to the
employees, directors, agents, attorneys, accountants and other professional
advisors of such Lender or its affiliates, (d) upon the request or demand
of any Governmental Authority having jurisdiction over the Administrative
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) which has been publicly
disclosed other than in breach of this Section 10.15, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued
with respect to such Lender, (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document or (j) to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty
agrees to be bound by the provisions of this Section 10.15); provided that,
if reasonably requested by the Borrower, the Administrative Agent and the
Lenders shall make commercially reasonable efforts to determine, and inform
the Borrower of, the Persons who received such Confidential Information. As
used herein, the term "Confidential Information" means all information
contained in materials relating to the Borrower and its Subsidiaries
provided to the Administrative Agent or any Lender by any Loan Party or its
representatives or agents other than (x) information which is at the time
so provided or thereafter becomes generally available to the public other
than as a result of a disclosure by the Administrative Agent or one or more
Lenders, (y) information which was available to the Administrative Agent or
any Lender prior to its disclosure to the Lenders by the Borrower, its
representatives or agents and (z) information which becomes available to
the Administrative Agent or any one or more Lenders from a source other
than the Borrower, its representatives or agents.
10.16 Releases of Collateral Security and Guarantee
Obligations. Notwithstanding anything to the contrary contained herein or
in the Guarantee and Collateral Agreement, upon request of the Borrower,
the Administrative Agent shall (without any notice to or vote or consent of
any Lender) take action having the effect of releasing any Collateral
and/or guarantee obligations provided for in the Guarantee and Collateral
Agreement to the extent necessary to permit the consummation of any transactions
not prohibited hereunder, by the relevant Person in accordance with the
provisions of this Agreement and the other Loan Documents.
10.17 Releases. At such time as the Payment Obligations have
been Fully Satisfied, the Collateral shall be released from the Liens
created by the Security Documents and the Security Documents and all
obligations (other than those expressly stated to survive such termination)
of the Administrative Agent, the Borrower or any Subsidiary thereunder
shall terminate, all without delivery of any instrument or performance of
any act by any party, and all rights to the Collateral shall revert to the
Borrower and Subsidiaries. At the request and sole expense of the Borrower
or any Subsidiary following any such termination, the Administrative Agent
shall deliver to the Borrower or such Subsidiary any Collateral held by the
Administrative Agent thereunder and execute and deliver to the Borrower or
such Subsidiary such documents as the Borrower or Subsidiary shall
reasonably request to evidence such termination.
10.18 Effectiveness of Agreement. Notwithstanding the execution
and delivery of this Agreement by the Borrower, the Administrative Agent
and each Lender, during the period from the date of this Agreement to but
not including the Closing Date, the provisions of this Agreement shall be
of no force and effect with respect to the Borrower and the Borrower shall
have no liability or obligation whatsoever to the Administrative Agent or
any Lender under this Agreement or any other Loan Document. On the Closing
Date (without any action by or notice to any party), this Agreement shall
become and thereafter remain effective and binding upon the parties hereto
in accordance with its terms. In the event that (i) the Recapitalization
does not occur on or prior to June 30, 1998 or (ii) the Recapitalization is
abandoned or the Recapitalization Agreement is terminated, in each case, on
or prior to June 30, 1998, this Agreement shall be deemed null and void on
June 30, 1998 or such earlier date, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
PANAVISION INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By: /s/ Xxxxxx Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx Xxxxx
Title: Vice President
