EXHIBIT 10.2
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CREDIT AGREEMENT
Dated as of January 31, 2002
among
CARMIKE CINEMAS, INC.,
and
EASTWYNN THEATRES, INC.,
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
GECC CAPITAL MARKETS GROUP, INC.
as Lead Arranger
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Table of Contents
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1. AMOUNT AND TERMS OF CREDIT..............................................................................1
1.1 Credit Facilities..............................................................................1
1.2 Letters of Credit..............................................................................4
1.3 Prepayments....................................................................................4
1.4 Use of Proceeds................................................................................7
1.5 Interest and Applicable Margins................................................................7
1.6 [Intentionally Omitted]........................................................................9
1.7 [Intentionally Omitted]........................................................................9
1.8 Cash Management Systems........................................................................9
1.9 Fees...........................................................................................9
1.10 Receipt of Payments............................................................................9
1.11 Application and Allocation of Payments.........................................................9
1.12 Loan Account and Accounting...................................................................10
1.13 Indemnity.....................................................................................11
1.14 Access........................................................................................12
1.15 Taxes.........................................................................................12
1.16 Capital Adequacy; Increased Costs; Illegality.................................................13
1.17 Single Loan...................................................................................14
2. CONDITIONS PRECEDENT...................................................................................15
2.1 Conditions to the Initial Loans...............................................................15
2.2 Further Conditions to Each Loan...............................................................16
3. REPRESENTATIONS AND WARRANTIES.........................................................................16
3.1 Corporate Existence; Compliance with Law......................................................17
3.2 Executive Offices, Collateral Locations, FEIN.................................................17
3.3 Corporate Power, Authorization, Enforceable Obligations.......................................17
3.4 Financial Statements and Projections..........................................................17
3.5 Material Adverse Effect.......................................................................18
3.6 Ownership of Property; Liens..................................................................19
3.7 Labor Matters.................................................................................19
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.....................20
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3.9 Government Regulation.........................................................................20
3.10 Margin Regulations............................................................................20
3.11 Taxes.........................................................................................20
3.12 ERISA.........................................................................................21
3.13 No Litigation.................................................................................22
3.14 Brokers.......................................................................................22
3.15 Intellectual Property.........................................................................22
3.16 Full Disclosure...............................................................................22
3.17 Environmental Matters.........................................................................23
3.18 Insurance.....................................................................................23
3.19 Deposit and Disbursement Accounts.............................................................23
3.20 Government Contracts..........................................................................24
3.21 [Intentionally Omitted].......................................................................24
3.22 Agreements and Other Documents................................................................24
3.23 Solvency......................................................................................24
3.24 [Intentionally Omitted].......................................................................24
3.25 [Intentionally Omitted].......................................................................24
3.26 Other Debt....................................................................................24
4. FINANCIAL STATEMENTS AND INFORMATION...................................................................25
4.1 Reports and Notices...........................................................................25
4.2 Communication with Accountants................................................................25
5. AFFIRMATIVE COVENANTS..................................................................................25
5.1 Maintenance of Existence and Conduct of Business..............................................25
5.2 Payment of Charges............................................................................26
5.3 Books and Records.............................................................................26
5.4 Insurance; Damage to or Destruction of Collateral.............................................26
5.5 Compliance with Laws..........................................................................28
5.6 Supplemental Disclosure.......................................................................28
5.7 Intellectual Property.........................................................................28
5.8 Environmental Matters.........................................................................28
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5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases.........29
5.10 [Intentionally Omitted].......................................................................30
5.11 Further Assurances............................................................................30
6. NEGATIVE COVENANTS.....................................................................................30
6.1 Mergers, Subsidiaries, Etc....................................................................30
6.2 Investments; Loans and Advances...............................................................30
6.3 Indebtedness..................................................................................31
6.4 Employee Loans and Affiliate Transactions.....................................................31
6.5 Capital Structure and Business................................................................32
6.6 Guaranteed Indebtedness.......................................................................32
6.7 Liens.........................................................................................32
6.8 Sale of Stock and Assets......................................................................33
6.9 ERISA.........................................................................................33
6.10 Financial Covenants...........................................................................33
6.11 Hazardous Materials...........................................................................33
6.12 Sale-Leasebacks...............................................................................33
6.13 Cancellation of Indebtedness..................................................................34
6.14 Restricted Payments...........................................................................34
6.15 Change of Corporate Name or Location; Change of Fiscal Year...................................34
6.16 No Impairment of Intercompany Transfers.......................................................34
6.17 No Speculative Transactions...................................................................34
6.18 Leases; Real Estate Purchases.................................................................35
6.19 Changes Relating to Debt; Material Contracts..................................................35
7. TERM...................................................................................................35
7.1 Termination...................................................................................35
7.2 Survival of Obligations Upon Termination of Financing Arrangements............................35
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.................................................................36
8.1 Events of Default.............................................................................36
8.2 Remedies......................................................................................38
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8.3 Waivers by Credit Parties.....................................................................38
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT....................................................39
9.1 Assignment and Participations.................................................................39
9.2 Appointment of Agent..........................................................................41
9.3 Agent's Reliance, Etc.........................................................................42
9.4 GE Capital and Affiliates.....................................................................42
9.5 Lender Credit Decision........................................................................43
9.6 Indemnification...............................................................................43
9.7 Successor Agent...............................................................................43
9.8 Setoff and Sharing of Payments................................................................44
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert......................45
10. SUCCESSORS AND ASSIGNS.................................................................................47
10.1 Successors and Assigns........................................................................47
11. MISCELLANEOUS..........................................................................................47
11.1 Complete Agreement; Modification of Agreement.................................................47
11.2 Amendments and Waivers........................................................................47
11.3 Fees and Expenses.............................................................................49
11.4 No Waiver.....................................................................................50
11.5 Remedies......................................................................................51
11.6 Severability..................................................................................51
11.7 Conflict of Terms.............................................................................51
11.8 Confidentiality...............................................................................51
11.9 GOVERNING LAW.................................................................................51
11.10 Notices.......................................................................................52
11.11 Section Titles................................................................................53
11.12 Counterparts..................................................................................53
11.13 WAIVER OF JURY TRIAL..........................................................................53
11.14 Press Releases and Related Matters............................................................53
11.15 Reinstatement.................................................................................53
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11.16 Advice of Counsel.............................................................................54
11.17 No Strict Construction........................................................................54
12. CROSS-GUARANTY.........................................................................................54
12.1 Cross-Guaranty................................................................................54
12.2 Waivers by Borrowers..........................................................................54
12.3 Benefit of Guaranty...........................................................................55
12.4 Subordination of Subrogation, Etc.............................................................55
12.5 Election of Remedies..........................................................................55
12.6 Limitation....................................................................................56
12.7 Contribution with Respect to Guaranty Obligations.............................................56
12.8 Liability Cumulative..........................................................................57
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (Section 4.1(b)) - Collateral Reports [Intentionally Omitted]
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 9.1(a) - Form of Assignment Agreement
Disclosure Schedule 1.3(b) - Permitted Real Estate Dispositions
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(A) - Financial Statements
Disclosure Schedule 3.4(B) - Pro Forma
Disclosure Schedule 3.4(C) - Projections
Disclosure Schedule 3.5 - Material Adverse Effect since December 31, 2000
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.14 - Brokers
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
This CREDIT AGREEMENT (this "Agreement"), dated as of January
31, 2002 among CARMIKE CINEMAS, INC., a Delaware corporation ("Carmike") and
EASTWYNN THEATRES, INC., an Alabama corporation ("Eastwynn") (Eastwynn and
Carmike are sometimes collectively referred to herein as the "Borrowers" and
individually as a "Borrower"); the other Credit Parties signatory hereto;
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders (in
such capacity, the "Agent"), and the other Lenders signatory hereto from time to
time.
RECITALS
WHEREAS, Borrowers have requested that Lenders extend
revolving credit facilities to Borrowers of up to Fifty Million Dollars
($50,000,000) in the aggregate for the purpose of refinancing certain
indebtedness of Borrowers and to provide (a) working capital financing for
Borrowers, (b) funds for other general corporate purposes of Borrowers and (c)
funds for other purposes permitted hereunder; and for these purposes, Lenders
are willing to make certain loans and other extensions of credit to Borrowers of
up to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrowers have agreed to secure all of their
obligations under the Loan Documents by granting to Agent, for the benefit of
Agent and Lenders, a security interest in and lien upon all of their existing
and after-acquired personal and real property; and
WHEREAS, capitalized terms used in this Agreement shall have
the meanings ascribed to them in Annex A and, for purposes of this Agreement and
the other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available to Borrowers from time to time until
the Commitment Termination Date its Pro Rata Share of advances (each, a
"Revolving Credit Advance"). The Pro Rata Share of the Revolving Loan of any
Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment. The obligations of each Revolving Lender hereunder shall be several
and not joint. Until the Commitment Termination Date, Borrowers may borrow,
repay and reborrow under this Section 1.1(a); provided that the aggregate amount
of all Revolving Credit Advances to be made at any time shall not exceed the
Revolving Loan Commitments at
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such time. Each Revolving Credit Advance shall be made on notice by Borrower
Representative to Agent. Any such notice must be given no later than (1) 11:00
a.m. (New York time) on the Business Day of the proposed Revolving Credit
Advance, in the case of an Index Rate Loan, or (2) 11:00 a.m. (New York time) on
the date which is 3 Business Days prior to the proposed Revolving Credit
Advance, in the case of a LIBOR Loan. Each such notice (a "Notice of Revolving
Credit Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit and such other information as may be
required by Agent. If any Borrower desires to have the Revolving Credit Advances
bear interest by reference to a LIBOR Rate, Borrower Representative must comply
with Section 1.5(e).
(ii) Except as provided in Section 1.12, each Borrower
shall execute and deliver to each Revolving Lender a note to evidence the
Revolving Loan Commitment of that Revolving Lender. Each note shall be in the
principal amount of the Revolving Loan Commitment of the applicable Revolving
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(a)(ii) (each a "Revolving Note" and, collectively, the "Revolving Notes").
Each Revolving Note shall represent the obligation of the applicable Borrower to
pay the amount of the applicable Revolving Lender's Revolving Loan Commitment
or, if less, such Revolving Lender's Pro Rata Share of the aggregate unpaid
principal amount of all Revolving Credit Advances to such Borrower together with
interest thereon as prescribed in Section 1.5. The entire unpaid balance of the
aggregate Revolving Loan and all other non-contingent Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date.
(b) [Intentionally Omitted].
(c) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon Agent's
receipt of any Notice of Revolving Credit Advance with respect to an Index Rate
Loan. Subject to the terms and conditions hereof, the Swing Line Lender may, in
its discretion, make available from time to time until the Commitment
Termination Date advances (each, a "Swing Line Advance") in accordance with any
such notice. The provisions of this Section 1.1(c) shall not relieve Revolving
Lenders of their obligations to make Revolving Credit Advances under Section
1.1(a); provided that if the Swing Line Lender makes a Swing Line Advance
pursuant to any such notice, such Swing Line Advance shall be in lieu of any
Revolving Credit Advance that otherwise may be made by Revolving Credit Lenders
pursuant to such notice. The aggregate amount of Swing Line Advances outstanding
shall not exceed at any time the lesser of (A) the Swing Line Commitment and (B)
the Maximum Amount, less the outstanding balance of the Revolving Loan at such
time ("Swing Line Availability"). Until the Commitment Termination Date,
Borrowers may from time to time borrow, repay and reborrow under this Section
1.1(c). Each Swing Line Advance shall be made pursuant to a Notice of Revolving
Credit Advance delivered to Agent by Borrower Representative on behalf of the
applicable Borrower in accordance with Section 1.1(a). Any such notice must be
given no later than 11:00 a.m. (New York time) on the Business Day of the
proposed Swing Line Advance. Unless the Swing Line Lender has received at least
one Business Day's prior written notice from Requisite Lenders instructing it
not to make a Swing Line Advance, the Swing Line Lender shall, notwithstanding
8
the failure of any condition precedent set forth in Sections 2.2, be entitled to
fund that Swing Line Advance, and to have each Revolving Lender make Revolving
Credit Advances in accordance with Section 1.1(c)(iii) or purchase participating
interests in accordance with Section 1.1(c)(iv). Notwithstanding any other
provision of this Agreement or the other Loan Documents, the Swing Line Loan
shall constitute an Index Rate Loan. Borrowers shall repay the aggregate
outstanding principal amount of the Swing Line Loan one (1) Business Day after
demand therefor by Agent.
(ii) Each Borrower shall execute and deliver to the Swing
Line Lender a promissory note to evidence the Swing Line Commitment. Each note
shall be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(c)(ii) (each a "Swing Line Note" and, collectively, the "Swing Line Notes").
Each Swing Line Note shall represent the obligation of each Borrower to pay the
amount of the Swing Line Commitment or, if less, the aggregate unpaid principal
amount of all Swing Line Advances made to such Borrower together with interest
thereon as prescribed in Section 1.5. The entire unpaid balance of the Swing
Line Loan and all other noncontingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from time to
time in its sole and absolute discretion may on behalf of any Borrower (and each
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Revolving Lender (including the Swing Line Lender) to make
a Revolving Credit Advance to each Borrower (which shall be an Index Rate Loan)
in an amount equal to that Revolving Lender's Pro Rata Share of the principal
amount of the applicable Borrower's Swing Line Loan (the "Refunded Swing Line
Loan") outstanding on the date such notice is given. Unless any of the events
described in Sections 8.1(h) or 8.1(i) has occurred (in which event the
procedures of Section 1.1(c)(iv) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Revolving Lender shall disburse directly
to Agent, its Pro Rata Share of a Revolving Credit Advance on behalf of the
Swing Line Lender prior to 3:00 p.m. (New York time) in immediately available
funds on the Business Day next succeeding the date that notice is given. The
proceeds of those Revolving Credit Advances shall be immediately paid to the
Swing Line Lender and applied to repay the Refunded Swing Line Loan of the
applicable Borrower.
(iv) If, prior to refunding a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(c)(iii), one of the events
described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of Section 1.1(c)(v) below, each Revolving Lender shall, on the date
such Revolving Credit Advance was to have been made for the benefit of the
applicable Borrower, purchase from the Swing Line Lender an undivided
participation interest in the Swing Line Loan to such Borrower in an amount
equal to its Pro Rata Share of such Swing Line Loan. Upon request of Agent, each
Revolving Lender shall promptly transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation interest.
(v) Each Revolving Lender's obligation to make Revolving
Credit Advances in accordance with Section 1.1(c)(iii) and to purchase
participation interests in accordance with Section 1.1(c)(iv) shall be absolute
and unconditional and shall not be affected
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by any circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right that such Revolving Lender may have against the Swing Line
Lender, any Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of any Default or Event of Default; (C) any inability
of any Borrower to satisfy the conditions precedent to borrowing set forth in
this Agreement at any time or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Revolving
Lender does not make available to Agent or the Swing Line Lender, as applicable,
the amount required pursuant to Sections 1.1(c)(iii) or 1.1(c)(iv), as the case
may be, the Swing Line Lender shall be entitled to recover such amount on demand
from such Revolving Lender, together with interest thereon for each day from the
date of non-payment until such amount is paid in full at the Federal Funds Rate
for the first two Business Days and at the Index Rate thereafter.
(d) Reliance on Notices; Appointment of Borrower
Representative. Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of Revolving Credit Advance, Notice of
Conversion/Continuation or similar notice believed by Agent to be genuine. Agent
may assume that each Person executing and delivering any notice in accordance
herewith was duly authorized, unless the responsible individual acting thereon
for Agent has actual knowledge to the contrary. Each Borrower hereby designates
Carmike as its representative and agent on its behalf for the purposes of
issuing Notices of Revolving Credit Advances and Notices of
Conversion/Continuation, giving instructions with respect to the disbursement of
the proceeds of the Loans, selecting interest rate options, requesting Letters
of Credit, giving and receiving all other notices and consents hereunder or
under any of the other Loan Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Borrower or Borrowers
under the Loan Documents. Borrower Representative hereby accepts such
appointment. Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a notice or
communication from all Borrowers, and may give any notice or communication
required or permitted to be given to any Borrower or Borrowers hereunder to
Borrower Representative on behalf of such Borrower or Borrowers. Each Borrower
agrees that each notice, election, representation and warranty, covenant,
agreement and undertaking made on its behalf by Borrower Representative shall be
deemed for all purposes to have been made by such Borrower and shall be binding
upon and enforceable against such Borrower to the same extent as if the same had
been made directly by such Borrower.
1.2 Letters of Credit. Subject to and in accordance with
the terms and conditions contained herein and in Annex B, Borrower
Representative, on behalf of the applicable Borrower, shall have the right to
request, and Revolving Lenders agree to incur, or purchase participations in,
Letter of Credit Obligations in respect of each Borrower.
1.3 Prepayments.
(a) Voluntary Termination; Reduction. In addition,
Borrowers may at any time on at least 10 days' prior written notice by Borrower
Representative to Agent terminate in whole or part ratably the unused portions
of the respective Commitments of the Lenders; provided that each partial
reduction shall be in the aggregate amount of not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, and provided that upon such
termination, all Loans and other Obligations shall be immediately due and
payable in full and all Letter of
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Credit Obligations shall be cash collateralized or otherwise satisfied in
accordance with Annex B. Any such voluntary reduction and any such termination
of the Revolving Loan Commitment must be accompanied by the payment of any
applicable LIBOR funding breakage costs in accordance with Section 1.13(b). Upon
any such termination of the Revolving Loan Commitment, each Borrower's right to
request Revolving Credit Advances, or request that Letter of Credit Obligations
be incurred on its behalf, or request Swing Line Advances, shall simultaneously
be terminated.
(b) Mandatory Prepayments. If at any time the aggregate
outstanding balances of the Revolving Loan and the Swing Line Loan exceed the
Maximum Amount, Borrowers shall immediately repay the aggregate outstanding
Revolving Credit Advances to the extent required to eliminate such excess. If
any such excess remains after repayment in full of the aggregate outstanding
Revolving Credit Advances, Borrowers shall provide cash collateral for the
Letter of Credit Obligations in the manner set forth in Annex B to the extent
required to eliminate such excess.
(i) [Intentionally Omitted].
(ii) (A) Borrowers shall prepay the Loans in an
amount equal to all proceeds of any asset disposition of any Credit Party
(excluding proceeds of asset dispositions permitted by Section 6.8(a)) or any
issuance of Stock, net of (1) commissions and other reasonable and customary
transaction costs, fees (including brokers' fees) and expenses properly
attributable to such transaction and payable by Credit Parties in connection
therewith (in each case, paid to non-Affiliates), (2) transfer taxes, (3)
amounts payable to holders of senior Liens (to the extent such Liens constitute
Permitted Encumbrances hereunder), if any, (4) an appropriate reserve for income
taxes in accordance with GAAP in connection therewith, and (5) with respect to
proceeds received in connection with the issuance by any Credit Party of Stock,
twenty million dollars ($20,000,000); provided, that, Borrowers shall not be
required to make such prepayments to the extent (A) all such proceeds of any
asset disposition are reinvested by one or more Credit Parties in a manner
acceptable to Agent, in its sole discretion, within 180 days of receipt by any
Credit Party of such proceeds (Borrowers acknowledge that no prepayment of
obligations under the Post-Confirmation Credit Agreement shall be deemed a
reinvestment of such proceeds), and (B) no Default or Event of Default exists
from and including the date of such disposition through and including the date
of such reinvestment; provided, further, that so long as no Default or Event of
Default exists at the time of any asset disposition relating to Real Estate
identified as surplus property on Disclosure Schedule 1.3(b), Borrowers shall
not be required to apply the proceeds of such disposition, except for those
proceeds which exceed, in the aggregate with respect to all such dispositions,
the lesser of (I) $18,000,000 or (II) five percent (5%) of the net book value of
all plant, property and equipment of the Credit Parties as shown on the audited
financial information most recently delivered to Agent pursuant to Annex E
(after giving effect to any write-downs subsequent to the reporting period for
which such audited financial information was delivered), to any prepayment
hereunder. Any prepayment required hereunder shall be applied in accordance with
Section 1.3(c).
(iii) Upon any sale of more than fifty percent
(50%) of the issued and outstanding Stock of any Borrower or any sale of Stock
of any Subsidiary of any other Credit Party to any Person other than a Credit
Party, no later than the Business Day following the date
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of receipt of the proceeds thereof, the Borrower or shall prepay the Loans in an
amount equal to all such proceeds (other than proceeds received by a Subsidiary
from the sale of Stock to any Borrower or to another Subsidiary), net of
underwriting discounts and commissions and other reasonable customary
transaction costs, fees and expenses paid to non-Affiliates in connection
therewith. Any such prepayment shall be applied in accordance with Section
1.3(c).
(iv) Until the Termination Date, Borrowers shall
prepay the Obligations on the date that is 10 days after the earlier of (A) the
date on which Borrowers' annual audited Financial Statements for the immediately
preceding Fiscal Year are delivered pursuant to Annex E or (B) the date on which
such annual audited Financial Statements were required to be delivered pursuant
to Annex E, in an amount equal to the greater of:
(1) fifty percent (50%) of the lesser
of (x) Excess Cash Flow for the immediately preceding Fiscal Year and (y) the
amount by which the Credit Parties' cash on hand on the date specified in clause
(A) or (B) above exceeds $15,000,000; and
(2) the amount payable on or about such
date to the lenders under the Post-Confirmation Credit Agreement pursuant to
Section 2.08(b)(ii) of the Post-Confirmation Credit Agreement.
Any prepayments from Excess Cash Flow paid pursuant to this clause (iv) shall be
accompanied by written notice signed by Borrower Representative's Chief
Financial Officer and shall be applied in accordance with Section 1.3(c).
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by any Borrower pursuant to Sections 1.3(b)(ii), (b)(iii), or
(b)(iv) above shall be applied as follows: first, to Fees and reimbursable
expenses of Agent then due and payable pursuant to any of the Loan Documents;
second, to the interest then due and payable on Borrowers' Swing Line Loan;
third, to the principal balance of the Swing Line Loan; fourth, to interest then
due and payable on Revolving Credit Advances; fifth, to the principal balance of
Revolving Credit Advances outstanding until the same has been paid in full;
sixth, to any Letter of Credit Obligations to provide cash collateral therefor
in the manner set forth in Annex B, until all such Letter of Credit Obligations
have been fully cash collateralized in the manner set forth in Annex B. The
Revolving Loan Commitment shall be permanently reduced by the amount of any such
prepayments pursuant to Sections 1.3(b)(ii) or (b)(iii).
(d) Application of Prepayments from Insurance and
Condemnation Proceeds. Unless reinvested by one or more Credit Parties in the
absence of an Event of Default, in a manner acceptable to Agent in its sole
discretion, within 180 days of receipt by any Credit Party of insurance or
condemnation proceeds (excluding proceeds relating to Real Estate identified on
Disclosure Schedule 1.3(b) as a permitted disposition or the disposition of
which is permitted by Section 6.8 (a)), prepayments from insurance or
condemnation proceeds in accordance with Section 5.4(c) and the Mortgage(s),
respectively, shall be applied, first, to the Swing Line Loans and, second, to
the Revolving Credit Advances of the Borrower that incurred such casualties or
losses. Neither the Revolving Loan Commitment nor the Swing Line Loan Commitment
shall be permanently reduced by the amount of any such prepayments.
12
(e) No Implied Consent. Nothing in this Section 1.3 shall
be construed to constitute Agent's or any Lender's consent to any transaction
that is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 Use of Proceeds. Borrowers shall utilize the proceeds
of the Revolving Loan and the Swing Line Advances solely for the Refinancing
(provided that not more than $20,000,000 of such proceeds, in the aggregate,
shall be used for the Refinancing and to pay any related transaction expenses),
the making of Restricted Payments with respect to the Post-Confirmation Credit
Agreement Documents (not otherwise prohibited hereunder or by the Intercreditor
Agreement) and for the financing of Borrowers' ordinary working capital and
general corporate needs. Disclosure Schedule (1.4) contains a description of
Borrowers' sources and uses of funds as of the Closing Date, including Loans and
Letter of Credit Obligations to be made or incurred on that date, and a funds
flow memorandum detailing how funds from each source are to be transferred to
particular uses.
1.5 Interest and Applicable Margins.
(a) Borrowers shall pay interest to Agent, for the
ratable benefit of Lenders in arrears on each applicable Interest Payment Date,
the Index Rate plus the Applicable Revolver Index Margin per annum or, at the
election of Borrower Representative, the applicable LIBOR Rate plus the
Applicable Revolver LIBOR Margin per annum, based on the aggregate Revolving
Credit Advances outstanding from time to time.
The Applicable Margins are as follows:
Applicable Revolver Index Margin 1.75%
Applicable Revolver LIBOR Margin 3.25%
Applicable L/C Margin 3.25%
(b) If any payment on any Loan becomes due and payable on
a day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum
basis and interest shall be made by Agent on the basis of a 360-day year, in
each case for the actual number of days occurring in the period for which such
interest and Fees are payable. The Index Rate is a floating rate determined for
each day. Each determination by Agent of an interest rate and Fees hereunder
shall be final, binding and conclusive on Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is
continuing under Section 8.1(a), (h) or (i) or so long as any Event of Default
has occurred and is continuing and at the election of Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Agent to Borrower
Representative, the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%) per annum above the
rates of interest or the rate of such Fees otherwise applicable hereunder
("Default Rate"), and all
13
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fees at the Default Rate shall
accrue from the initial date of such Event of Default until that Event of
Default is cured or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in
Section 2.2, Borrower Representative shall have the option to (i) request that
any Revolving Credit Advance be made as a LIBOR Loan, (ii) convert at any time
all or any part of outstanding Loans (other than the Swing Line Loan) from Index
Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan,
subject to payment of LIBOR breakage costs in accordance with Section 1.13(b) if
such conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan (other than the Swing
Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period
and the succeeding LIBOR Period of that continued Loan shall commence on the
first day after the last day of the LIBOR Period of the Loan to be continued.
Any Loan or group of Loans having the same proposed LIBOR Period to be made or
continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$5,000,000 and integral multiples of $500,000 in excess of such amount. Any such
election must be made by 11:00 a.m. (New York time) on the 3rd Business Day
prior to (1) the date of any proposed Advance which is to bear interest at the
LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to
be continued as such, or (3) the date on which Borrower Representative wishes to
convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by
Borrower Representative in such election. If no election is received with
respect to a LIBOR Loan by 11:00 a.m. (New York time) on the 3rd Business Day
prior to the end of the LIBOR Period with respect thereto (or if an Event of
Default has occurred and is continuing or if the additional conditions precedent
set forth in Section 2.2 shall not have been satisfied), that LIBOR Loan shall
be converted to an Index Rate Loan at the end of its LIBOR Period. Borrower
Representative must make such election by notice to Agent in writing, by
telecopy or overnight courier. In the case of any conversion or continuation,
such election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in
this Section 1.5, if a court of competent jurisdiction determines in a final
order that the rate of interest payable hereunder exceeds the highest rate of
interest permissible under law (the "Maximum Lawful Rate"), then so long as the
Maximum Lawful Rate would be so exceeded, the rate of interest payable hereunder
shall be equal to the Maximum Lawful Rate; provided, however, that if at any
time thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated
14
pursuant to this paragraph, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made. If, notwithstanding the provisions of this
Section 1.5(f), a court of competent jurisdiction shall finally determine that a
Lender has received interest hereunder in excess of the Maximum Lawful Rate,
Agent shall, to the extent permitted by applicable law, promptly apply such
excess in the order specified in Section 1.11 and thereafter shall refund any
excess to Borrowers or as a court of competent jurisdiction may otherwise order.
1.6 [Intentionally Omitted].
1.7 [Intentionally Omitted].
1.8 Cash Management Systems. On or prior to the Closing
Date, Borrowers will establish and will maintain until the Termination Date, the
cash management systems described in Annex C (the "Cash Management Systems").
1.9 Fees.
(a) Borrowers shall pay to GE Capital, individually, the
Fees specified in that certain commitment letter dated as of December 13, 2001
(and executed on December 14, 2001) among Borrowers and GE Capital (the "GE
Capital Letter"), at the times specified for payment therein.
(b) As additional compensation for the Revolving Lenders,
Borrowers shall pay to Agent, for the ratable benefit of such Lenders, in
arrears, on the first Business Day of each month prior to the Commitment
Termination Date and on the Commitment Termination Date, a Fee for Borrowers'
non-use of available funds in an amount equal to the Applicable Unused Line Fee
per annum (calculated on the basis of a 360 day year for actual days elapsed)
multiplied by the difference between (x) the Maximum Amount (as it may be
reduced from time to time) and (y) the average for the period of the daily
closing balances of the aggregate Revolving Loan outstanding during the period
for which such Fee is due.
(c) [Intentionally Omitted].
(d) Borrowers shall pay to Agent, for the ratable benefit
of Revolving Lenders, the Letter of Credit Fee as provided in Annex B.
1.10 Receipt of Payments. Borrowers shall make each
payment under this Agreement not later than 2:00 p.m. (New York time) on the day
when due in immediately available funds in Dollars to the Collection Account.
Payments received after 2:00 p.m. New York time on any Business Day or on a day
that is not a Business Day shall be deemed to have been received on the
following Business Day.
1.11 Application and Allocation of Payments.
(a) So long as no Default or Event of Default has
occurred and is continuing, (i) payments shall be applied first, to the Swing
Line Loan and, second, to the Revolving Loan; (ii) payments matching specific
scheduled payments then due shall be applied to those scheduled
15
payments; (iii) voluntary prepayments shall be applied as determined by Borrower
Representative, subject to the provisions of Section 1.3(a); and (iv) mandatory
prepayments shall be applied as set forth in Sections 1.3(c) and 1.3(d). All
payments and prepayments applied to a particular Loan shall be applied ratably
to the portion thereof held by each Lender as determined by its Pro Rata Share.
As to any other payment, and as to all payments made when a Default or Event of
Default has occurred and is continuing or following the Commitment Termination
Date, each Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of such Borrower,
and each Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations of
Borrowers as Agent may deem advisable notwithstanding any previous entry by
Agent in the Loan Account or any other books and records. In the absence of a
specific determination by Agent with respect thereto, payments shall be applied
to amounts then due and payable in the following order: (1) to Fees and Agent's
expenses reimbursable hereunder; (2) to interest on the Swing Line Loan; (3) to
principal payments on the Swing Line Loan; (4) to interest on the other Loans,
ratably in proportion to the interest accrued as to each Loan; (5) to principal
payments on the other Loans and to provide cash collateral for Letter of Credit
Obligations in the manner described in Annex B, ratably to the aggregate,
combined principal balance of the other Loans and outstanding Letter of Credit
Obligations; and (6) to all other Obligations, including expenses of Lenders to
the extent reimbursable under Section 11.3.
(b) Agent is authorized to, and at its sole election may,
charge to the Revolving Loan balance on behalf of each Borrower and cause to be
paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(a)) and interest and principal, other than principal
of the Revolving Loan, owing by Borrowers under this Agreement or any of the
other Loan Documents if and to the extent Borrowers fail to pay promptly any
such amounts as and when due. At Agent's option and to the extent permitted by
law, any charges so made shall constitute part of the Revolving Loan hereunder.
1.12 Loan Account and Accounting. Agent shall maintain a
loan account (the "Loan Account") on its books to record: all Advances, all
payments made by Borrowers, and all other debits and credits as provided in this
Agreement with respect to the Loans or any other Obligations. All entries in the
Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Agent and Lenders by each Borrower; provided that any failure to so record or
any error in so recording shall not limit or otherwise affect any Borrower's
duty to pay the Obligations. Agent shall render to Borrower Representative a
monthly accounting of transactions with respect to the Loans setting forth the
balance of the Loan Account as to each Borrower for the immediately preceding
month. Unless Borrower Representative notifies Agent in writing of any objection
to any such accounting (specifically describing the basis for such objection),
within 30 days after the date thereof, each and every such accounting shall
(absent manifest error) be deemed final, binding and conclusive on Borrowers in
all respects as to all matters reflected therein. Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrowers.
Notwithstanding any provision herein contained to the contrary, any Lender may
elect (which election may be revoked) to dispense with the issuance of Notes to
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
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1.13 Indemnity.
(a) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) that may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, "Indemnified Liabilities"); provided, that no such
Credit Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person's gross negligence or
willful misconduct, as determined by a court of competent jurisdiction in a
final non-appealable judgment or order. NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING
CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on
the terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall refuse to accept any borrowing of, or shall request a termination
of, any borrowing of, conversion into or continuation of, LIBOR Loans after
Borrower Representative has given notice requesting the same in accordance
herewith; or (iii) any Borrower shall fail to make any prepayment of a LIBOR
Loan after Borrower Representative has given a notice thereof in accordance
herewith, then Borrowers shall jointly and severally indemnify and hold harmless
each Lender from and against all losses, costs and expenses resulting from or
arising from any of the foregoing. Such indemnification shall include any loss
(excluding loss of margin) or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate deposits from which such funds
were obtained. For the purpose of calculating amounts payable to a Lender under
this subsection, each Lender shall be deemed to have actually funded its
relevant LIBOR Loan through the purchase of a deposit bearing interest at the
LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a
maturity comparable to the relevant LIBOR Period; provided, that each Lender may
fund each of its LIBOR Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this subsection. This covenant shall
17
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower Representative with its
written calculation of all amounts payable pursuant to this Section 1.13(b), and
such calculation shall be binding on the parties hereto unless Borrower
Representative shall object in writing within 10 Business Days of receipt
thereof, specifying the basis for such objection in reasonable detail.
1.14 Access. Each Credit Party that is a party hereto
shall, during normal business hours, from time to time upon five days' prior
notice as frequently as Agent determines to be appropriate: (a) provide Agent
and any of its officers, employees and agents access to its properties,
facilities, advisors and employees (including officers) of each Credit Party and
to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If an Event of
Default has occurred and is continuing or if access is necessary to preserve or
protect the Collateral as determined by Agent, each such Credit Party shall
provide such access to Agent at all times and without advance notice. Each
Credit Party shall make available to Agent and its counsel, as quickly as is
possible under the circumstances, originals or copies of all books and records
that Agent may reasonably request. Each Credit Party shall deliver any document
or instrument necessary for Agent, as it may from time to time reasonably
request, to obtain records from any service bureau or other Person that
maintains records for such Credit Party, and shall maintain duplicate records or
supporting documentation on media, including computer tapes and discs owned by
such Credit Party. Agent will give Lenders at least 5 Business Days' prior
written notice of regularly scheduled audits. Representatives of other Lenders
may accompany Agent's representatives on regularly scheduled audits at no charge
to Borrowers.
1.15 Taxes.
(a) Any and all payments by each Borrower hereunder
(including any payments made pursuant to Section 12) or under the Notes shall be
made, in accordance with this Section 1.15, free and clear of and without
deduction for any and all present or future Taxes. If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder (including any sum payable pursuant to Section 12) or under the Notes,
(i) the sum payable shall be increased as much as shall be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 1.15) Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, and
(iii) such Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law. Within 30 days after the date
of any payment of Taxes, Borrower Representative shall make available to Agent
the original or a certified copy of a receipt evidencing payment thereof. Agent
and Lenders shall not be obligated to return or refund any amounts received
pursuant to this Section.
(b) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and, within 10 days of demand therefor, pay
Agent and each Lender for the full amount of Taxes (including any Taxes imposed
by any jurisdiction on amounts payable under
18
this Section 1.15) paid by Agent or such Lender, as appropriate, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which payments
to be made under this Agreement or under the Notes are exempt from United States
withholding tax under an applicable statute or tax treaty shall provide to
Borrower Representative and Agent a properly completed and executed IRS Form
W-8ECI or Form W-8BEN or other applicable form, certificate or document
prescribed by the IRS or the United States certifying as to such Foreign
Lender's entitlement to such exemption (a "Certificate of Exemption"). Any
foreign Person that seeks to become a Lender under this Agreement shall provide
a Certificate of Exemption to Borrower Representative and Agent prior to
becoming a Lender hereunder. No foreign Person may become a Lender hereunder if
such Person fails to deliver a Certificate of Exemption in advance of becoming a
Lender.
1.16 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder below that which
such Lender would have achieved but for such adoption, then Borrowers shall from
time to time upon demand by such Lender (with a copy of such demand to Agent)
pay to Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of
that reduction and showing the basis of the computation thereof submitted by
such Lender to Borrower Representative and to Agent shall, absent manifest
error, be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any
change in any law or regulation (or any change in the interpretation thereof) or
(ii) the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrowers shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower
Representative and to Agent by such Lender, shall be conclusive and binding on
Borrowers for all purposes, absent manifest error. Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances referred to
above which would result in any such increased cost, the affected Lender shall,
to the extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrowers pursuant to this Section 1.16(b).
19
(c) Notwithstanding anything to the contrary contained
herein, if the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender to agree to make or to make or to continue to fund or maintain any LIBOR
Loan, then, unless that Lender is able to make or to continue to fund or to
maintain such LIBOR Loan at another branch or office of that Lender without, in
that Lender's opinion, adversely affecting it or its Loans or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to
Borrower Representative through Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Loans shall be
suspended, and each such Lender shall make an Index Rate Loan as part of any
request for LIBOR Loans and (ii) if the LIBOR Loans are then outstanding, each
Borrower shall immediately convert each such Loan into an Index Rate Loan. If at
any time after a Lender gives notice under this Section 1.16(c), such Lender
determines that it may lawfully make LIBOR Loans, such Lender shall promptly
give notice of that determination to each Borrower and Agent and Agent shall
promptly transmit the notice to each Lender. The Borrowers' right to request and
such Lender's obligation, if any, to make LIBOR Loans shall thereupon be
restored and (ii) each Borrower shall forthwith prepay in full all outstanding
LIBOR Loans owing by such Borrower to such Lender, together with interest
accrued thereon, unless Borrower Representative on behalf of such Borrower,
within 5 Business Days after the delivery of such notice and demand, converts
all LIBOR Loans into Index Rate Loans.
(d) Any demand by a Lender for reimbursement pursuant to
Sections 1.15(a), 1.16(a) or 1.16(b) must be made within one hundred eighty
(180) days of the event which created such right of reimbursement. Within 15
days after receipt by Borrower Representative of written notice and demand from
any Lender (an "Affected Lender") for payment of additional amounts or increased
costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b), Borrower
Representative may, at its option, notify Agent and such Affected Lender of its
intention to replace the Affected Lender. So long as no Default or Event of
Default has occurred and is continuing, Borrower Representative, with the
consent of Agent, may obtain, at Borrowers' expense, a replacement Lender
("Replacement Lender") for the Affected Lender, which Replacement Lender must be
reasonably satisfactory to Agent. If Borrowers obtain a Replacement Lender
within 90 days following notice of their intention to do so, the Affected Lender
must sell and assign its Loans and Commitments to such Replacement Lender for an
amount equal to the principal balance of all Loans held by the Affected Lender
and all accrued interest and Fees with respect thereto through the date of such
sale; provided, that Borrowers shall have reimbursed such Affected Lender for
the additional amounts or increased costs that it is entitled to receive under
this Agreement through the date of such sale and assignment. Notwithstanding the
foregoing, Borrowers shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional
amounts within 15 days following its receipt of Borrowers' notice of intention
to replace such Affected Lender. Furthermore, if Borrowers give a notice of
intention to replace and do not so replace such Affected Lender within 90 days
thereafter, Borrowers' rights under this Section 1.16(d) shall terminate and
Borrowers shall promptly pay all increased costs or additional amounts demanded
by such Affected Lender pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).
1.17 Single Loan. All Loans to each Borrower and all of
the other Obligations of each Borrower arising under this Agreement and the
other Loan Documents shall constitute
20
one general obligation of that Borrower secured, until the Termination Date, by
all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be
obligated to make any Loan or incur any Letter of Credit Obligations on the
Closing Date, or to take, fulfill, or perform any other action hereunder, until
the following conditions have been satisfied or provided for in a manner
satisfactory to Agent, or waived in writing by Agent and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrowers, each other Credit Party, Agent and Lenders; and Agent shall have
received such documents, instruments, agreements and legal opinions as Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as Annex D, each in form and substance
reasonably satisfactory to Agent.
(b) Intercreditor Agreement. Agent shall have received a
fully executed original of the Intercreditor Agreement satisfactory to Agent.
(c) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions or (ii) an officer's
certificate in form and substance reasonably satisfactory to Agent affirming
that no such consents or approvals are required.
(d) [Intentionally Omitted].
(e) Payment of Fees. Borrowers shall have paid the Fees
required to be paid on the Closing Date in the respective amounts specified in
Section 1.9 (including the Fees specified in the GE Capital Letter), and shall
have reimbursed Agent for all fees, costs and expenses of closing due and
payable on the Closing Date.
(f) Capital Structure: Other Indebtedness. The capital
structure of each Credit Party and the terms and conditions of all Indebtedness
of each Credit Party shall be consistent with the terms of the Plan of
Reorganization.
(g) Due Diligence. Agent shall have completed its
business and legal due diligence with results reasonably satisfactory to Agent.
(h) Consummation of Related Transactions. Agent shall
have received fully executed copies of the Related Transactions Documents, each
of which shall be in form and substance reasonably satisfactory to Agent and its
counsel. The Related Transactions shall have been consummated in accordance with
the terms of the Related Transactions Documents.
21
(i) Confirmation Order. The Confirmation Order has been
entered by the Court.
2.2 Further Conditions to Each Loan. Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Advance,
convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit
Obligation, if, as of the date thereof:
(a) any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect as of such
date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted or
expressly contemplated by this Agreement and Agent or Requisite Lenders have
determined not to make such Advance, convert or continue any Loan as LIBOR Loan
or incur such Letter of Credit Obligation as a result of the fact that such
warranty or representation is untrue or incorrect;
(b) any event or circumstance having a Material Adverse
Effect has occurred since the date hereof as determined by the Requisite Lenders
and Agent or Requisite Lenders have determined not to make such Advance, convert
or continue any Loan as a LIBOR Loan or incur such Letter of Credit Obligation
as a result of the fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligation), and Agent or Requisite Lenders shall have
determined not to make any Advance, convert or continue any Loan as a LIBOR Loan
or incur any Letter of Credit Obligation as a result of that Default or Event of
Default; or
(d) after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligations), the outstanding principal amount of the
aggregate Revolving Loan would exceed the Maximum Amount, in each case, less the
then outstanding principal amount of the Swing Line Loan.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in Section 12 and of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of
Credit Obligations, the Credit Parties executing this Agreement, jointly and
severally, make the following representations and warranties to Agent and each
Lender with respect to all Credit Parties, each and all of which shall survive
the execution and delivery of this Agreement.
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3.1 Corporate Existence; Compliance with Law. Each Credit
Party (a) is a corporation, limited liability company or limited partnership
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization set forth in Disclosure
Schedule (3.1); (b) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not result in exposure to losses, damages or
liabilities in excess of $50,000; (c) has the requisite power and authority and
the legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to conduct its
business as now, heretofore and proposed to be conducted; (d) subject to
specific representations regarding Environmental Laws, has all material
licenses, permits, consents or approvals from or by, and has made all material
filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable requirements of law, except
where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
3.2 Executive Offices, Collateral Locations, FEIN. As of
the Closing Date, the current location of each Credit Party's chief executive
office and the warehouses and premises at which any Collateral is located are
set forth in Disclosure Schedule (3.2), and none of any Credit Party's chief
executive offices or warehouses has changed within the 6 months preceding the
Closing Date. In addition, Disclosure Schedule (3.2) lists the federal employer
identification number and state organizational identification number of each
Credit Party.
3.3 Corporate Power, Authorization, Enforceable
Obligations. The execution, delivery and performance by each Credit Party of the
Loan Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Person's power; (b) have been duly authorized by
all necessary corporate, limited liability company or limited partnership
action; (c) do not contravene any provision of such Person's charter, bylaws or
partnership or operating agreement as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Person other than those in favor of Agent, on
behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in Section 2.1(c), all of which will have been
duly obtained, made or complied with prior to the Closing Date. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms.
3.4 Financial Statements and Projections. Except for the
Projections, all Financial Statements concerning Borrowers and their respective
Subsidiaries that are referred to
23
below have been prepared in accordance with GAAP consistently applied throughout
the periods covered (except as disclosed therein and except, with respect to
unaudited Financial Statements, for the absence of footnotes and normal year-end
audit adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the results
of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial
Statements attached hereto as Disclosure Schedule (3.4(a)) have been delivered
on the date hereof:
(i) The audited consolidated balance sheets at
December 31, 1999 and 2000 and the related statements of income and cash flows
of Borrowers and their Subsidiaries for the Fiscal Years then ended, certified
by Ernst & Young, LLP.
(ii) The unaudited balance sheet(s) at September
30, 2001 and the related statement(s) of income and cash flows of Borrowers and
their Subsidiaries for the three (3) Fiscal Quarters then ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof
and attached hereto as Disclosure Schedule (3.4(b)) was prepared by Borrowers
giving pro forma effect to the Related Transactions, was based on the unaudited
consolidated balance sheets of Borrowers and their Subsidiaries dated as of the
dates in and Section 4.3(a)(ii) and was prepared in accordance with GAAP, with
only such adjustments thereto as would be required in accordance with GAAP.
(c) Projections. The Projections delivered on the date
hereof and attached hereto as Disclosure Schedule (3.4(c)) have been prepared by
Borrowers in light of the past operations of their businesses, but including
future payments of known contingent liabilities and reflect projections for the
five (5) year period beginning on January 1, 2001 on a year-by-year basis. The
Projections are based upon estimates and assumptions stated therein, all of
which Borrowers believe to be reasonable and fair in light of current conditions
and current facts known to Borrowers and, as of the Closing Date (except to the
extent that actual results for the year ending December 31, 2001 varied from
those set forth in the Projections), reflect Borrowers' good faith and
reasonable estimates of the future financial performance of Borrowers and of the
other information projected therein for the period set forth therein.
(d) [Intentionally Omitted].
3.5 Material Adverse Effect. Except as set forth in
Disclosure Schedule (3.5), between December 31, 2000 and the Closing Date: (a)
no Credit Party has incurred any obligations, contingent or noncontingent
liabilities, liabilities for Charges, long-term leases or unusual forward or
long-term commitments that are not reflected in the Pro Forma and that, alone or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect, (b) no contract, lease or other agreement or instrument has been entered
into by any Credit Party or has become binding upon any Credit Party's assets
and no law or regulation applicable to any Credit Party has been adopted that
has had or could reasonably be expected to have a Material Adverse Effect, and
(c) no Credit Party is in default and to the best of Borrowers' knowledge no
third party is in default under any material contract, lease or other agreement
or instrument, that alone or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Between
24
December 31, 2000 and the Closing Date no event has occurred, that alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date,
the real estate ("Real Estate") listed in Disclosure Schedule (3.6) constitutes
all of the real estate owned, leased, subleased, or used by any Credit Party.
Each Credit Party owns good and marketable fee simple title to all of its owned
Real Estate, and valid and marketable leasehold interests in all of its leased
Real Estate, all as described on Disclosure Schedule (3.6), and copies of all
such leases or a summary of terms thereof reasonably satisfactory to Agent have
been delivered to Agent. Disclosure Schedule (3.6) further describes any Real
Estate with respect to which any Credit Party is a lessor, sublessor or assignor
as of the Closing Date. Each Credit Party also has good and marketable title to,
or valid leasehold interests in, all of its personal property and assets. As of
the Closing Date, none of the properties and assets of any Credit Party are
subject to any Liens other than Permitted Encumbrances and except as set forth
on Disclosure Schedule (3.6)) there are no facts, circumstances or conditions
known to any Credit Party that may result in any Liens (including Liens arising
under Environmental Laws) other than Permitted Encumbrances. Each Credit Party
has received all deeds, assignments, waivers, consents, nondisturbance and
attornment or similar agreements, bills of sale and other documents, and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Credit Party's right, title and interest in and to all
such Real Estate and other properties and assets. Disclosure Schedule (3.6) also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Closing Date, no
portion of any Credit Party's fee-owned Real Estate has suffered any material
damage by fire or other casualty loss that has not heretofore been repaired and
restored in all material respects to its original condition or otherwise
remedied. As of the Closing Date, all material permits required to have been
issued or appropriate to enable the Real Estate to be lawfully occupied and used
for all of the purposes for which it is currently occupied and used have been
lawfully issued and are in full force and effect.
3.7 Labor Matters. As of the Closing Date (a) no strikes
or other material labor disputes against any Credit Party are pending or, to any
Credit Party's knowledge, threatened; (b) hours worked by and payment made to
employees of each Credit Party comply with the Fair Labor Standards Act and each
other federal, state, local or foreign law applicable to such matters; (c) all
material payments due from any Credit Party for employee health and welfare
insurance have been paid or accrued as a liability on the books of such Credit
Party; (d) except as set forth in Disclosure Schedule (3.7), no Credit Party is
a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement, employment agreement, bonus, restricted stock,
stock option, or stock appreciation plan or agreement or any similar plan,
agreement or arrangement (and true and complete copies of any agreements
described on Disclosure Schedule (3.7) have been delivered to Agent); (e) there
is no organizing activity involving any Credit Party pending or, to any Credit
Party's knowledge, threatened by any labor union or group of employees; (f)
there are no representation proceedings pending or, to any Credit Party's
knowledge, threatened with the National Labor Relations Board, and no labor
organization or group of employees of any Credit Party has made a pending demand
for recognition; and (g) except as set forth in Disclosure Schedule (3.7), there
are no material complaints or charges against any Credit Party pending or, to
the knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in
25
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of
the Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned by
each of the Stockholders and in the amounts set forth in Disclosure Schedule
(3.8) (except that with respect to the ownership of Carmike, only those
Stockholders holding in excess of five percent (5%) of the issued and
outstanding Stock of Carmike shall be set forth thereon). Except as set forth in
Disclosure Schedule (3.8), there are no outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to which any Credit Party may
be required to issue, sell, repurchase or redeem any of its Stock or other
equity securities or any Stock or other equity securities of its Subsidiaries.
All outstanding Indebtedness and Guaranteed Indebtedness of each Credit Party as
of the Closing Date (except for the Obligations) is described in Section 6.3
(including Disclosure Schedule (6.3)). None of the Credit Parties other than
Borrowers has any Indebtedness or Guaranteed Indebtedness (except the
Obligations) except as set forth on Disclosure Schedule (6.3).
3.9 Government Regulation. No Credit Party is subject to
regulation as an "investment company" under, and as such term is defined in, the
Investment Company Act of 1940. No Credit Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, or any
other federal or state statute that restricts or limits its ability to incur
Indebtedness or to perform its obligations hereunder. The making of the Loans by
Lenders to Borrowers, the incurrence of the Letter of Credit Obligations on
behalf of Borrowers, the application of the proceeds thereof and repayment
thereof and the consummation of the Related Transactions will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.
3.10 Margin Regulations. No Credit Party is engaged, nor
will it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" as such terms are defined in Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). Except for Margin Stock having a value
not in excess of $100,000 (which amount represents less than 25% of the value of
the assets of the Credit Parties), no Credit Party owns any Margin Stock, and
none of the proceeds of the Loans or other extensions of credit under this
Agreement will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any Margin Stock
or for any other purpose that might cause any of the Loans or other extensions
of credit under this Agreement to be considered a "purpose credit" within the
meaning of Regulations T, U or X of the Federal Reserve Board. No Credit Party
will take or permit to be taken any action that might cause any Loan Document to
violate any regulation of the Federal Reserve Board.
3.11 Taxes. Except for pre-petition claims provided for in
the Plan of Reorganization, all tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate
26
Governmental Authority and all Charges have been paid prior to the date on which
any fine, penalty, interest or late charge may be added thereto for nonpayment
thereof (or any such fine, penalty, interest, late charge or loss has been
paid), excluding Charges or other amounts being contested in accordance with
Section 5.2(b). Proper and accurate amounts have been withheld by each Credit
Party from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental Authorities.
Disclosure Schedule (3.11) sets forth as of the Closing Date those taxable years
for which any Credit Party's tax returns are currently being audited by the IRS
or any other applicable Governmental Authority, and any assessments or
threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described in Disclosure Schedule (3.11), no Credit Party
has executed or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any Charges. None of the Credit Parties
and their respective predecessors are liable for any Charges: (a) under any
agreement (including any tax sharing agreements) or (b) to each Credit Party's
knowledge, as a transferee. As of the Closing Date, no Credit Party has agreed
or been requested to make any adjustment under IRC Section 481(a), by reason of
a change in accounting method or otherwise, which would have a Material Adverse
Effect.
3.12 ERISA.
(a) Disclosure Schedule (3.12) lists (i) all ERISA
Affiliates and (ii) all Plans and separately identifies all Pension Plans,
including Title IV Plans, Multiemployer Plans, ESOPs and Welfare Plans,
including all Retiree Welfare Plans. Copies of all such listed Plans, together
with a copy of the latest IRS/DOL 5500-series form for each such Plan, have been
delivered or made available to Agent. Except with respect to Multiemployer
Plans, each Qualified Plan has been determined by the IRS to qualify under
Section 401 of the IRC, the trusts created thereunder have been determined to be
exempt from tax under the provisions of Section 501 of the IRC, and nothing has
occurred that would cause the loss of such qualification or tax-exempt status.
Each Plan is in compliance in all material respects with the applicable
provisions of ERISA and the IRC, including the timely filing of all reports
required under the IRC or ERISA, including the statement required by 29 CFR
Section 2520.104-23. Neither any Credit Party nor ERISA Affiliate has failed to
make any contribution or pay any amount due as required by either Section 412 of
the IRC or Section 302 of ERISA or the terms of any such Plan. Neither any
Credit Party nor ERISA Affiliate has engaged in a "prohibited transaction," as
defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with
any Plan, that would subject any Credit Party to a material tax on prohibited
transactions imposed by Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.12):
(i) no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or
event described in Section 4062(e) of ERISA with respect to any Title IV Plan
has occurred or is reasonably expected to occur; (iii) there are no pending, or
to the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan
27
of any Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041(b)(1) of ERISA, nor
has any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at
any time within the last five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time); (vi) except in the case of any ESOP, Stock of all Credit Parties and
their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair
market value of the assets of any Plan measured on the basis of fair market
value as of the latest valuation date of any Plan; and (vii) no liability under
any Title IV Plan has been satisfied with the purchase of a contract from an
insurance company that is not rated AAA by the Standard & Poor's Corporation or
an equivalent rating by another nationally recognized rating agency.
3.13 No Litigation. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any Credit
Party, threatened against any Credit Party, before any Governmental Authority or
before any arbitrator or panel of arbitrators (collectively, "Litigation"), (a)
that challenges any Credit Party's right or power to enter into or perform any
of its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of any Loan Document or any action taken thereunder,
or (b) that has a reasonable risk of being determined adversely to any Credit
Party and that, if so determined, could be reasonably be expected to have a
Material Adverse Effect. Except as set forth on Disclosure Schedule (3.13), as
of the Closing Date there is no Litigation pending or, to any Credit Party's
knowledge, threatened, that seeks damages in excess of $250,000 or injunctive
relief against, or alleges criminal misconduct of, any Credit Party.
3.14 Brokers. Except as set forth in Disclosure Schedule
(3.14), no broker or finder brought about the obtaining, making or closing of
the Loans or the Related Transactions, and no Credit Party or Affiliate thereof
has any obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
3.15 Intellectual Property. As of the Closing Date, each
Credit Party owns or has rights to use all Intellectual Property necessary to
continue to conduct its business as now or heretofore conducted by it or
proposed to be conducted by it, and each Patent, Trademark, Copyright and
License is listed, together with application or registration numbers, as
applicable, in Disclosure Schedule (3.15). Each Credit Party conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect. Except as set
forth in Disclosure Schedule (3.15), no Credit Party is aware of any
infringement claim by any other Person with respect to any Intellectual Property
owned by it.
3.16 Full Disclosure. No information contained in this
Agreement, any of the other Loan Documents, Financial Statements or Collateral
Reports or other written reports from time to time delivered hereunder or any
written statement furnished by or on behalf of any Credit Party to Agent or any
Lender pursuant to the terms of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which they were made. The Liens granted to
Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents
will at all times be fully perfected first priority Liens in and to the
Collateral described therein, subject, as to priority, only to Permitted
Encumbrances.
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3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as
of the Closing Date: (i) the Real Estate is free of contamination from any
Hazardous Material except for such contamination that would not adversely impact
the value or marketability of such Real Estate and that would not result in
Environmental Liabilities that could reasonably be expected to exceed $250,000;
(ii) no Credit Party has caused or suffered to occur any Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate in
violation of Environmental Laws; (iii) the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance that would
not result in Environmental Liabilities which could reasonably be expected to
exceed $250,000; (iv) the Credit Parties have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as proposed
to be conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities that could
reasonably be expected to exceed $250,000, and all such Environmental Permits
are valid, uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts, circumstances or conditions, including any
Releases of Hazardous Materials, that are likely to result in any Environmental
Liabilities of such Credit Party which could reasonably be expected to exceed
$250,000, and no Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material that seeks damages, penalties, fines, costs or
expenses in excess of $250,000 or injunctive relief against, or that alleges
criminal misconduct by, any Credit Party; (vii) no notice has been received by
any Credit Party identifying it as a "potentially responsible party" or
requesting information under CERCLA or analogous state statutes, and to the
knowledge of the Credit Parties, there are no facts, circumstances or conditions
that may result in any Credit Party being identified as a "potentially
responsible party" under CERCLA or analogous state statutes; and (viii) the
Credit Parties have provided to Agent copies of all existing environmental
reports, reviews and audits and all written information pertaining to actual or
potential Environmental Liabilities, in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or any Credit Party's affairs, and (ii) does not have the capacity
through the provisions of the Loan Documents or otherwise to influence any
Credit Party's conduct with respect to the ownership, operation or management of
any of its Real Estate or compliance with Environmental Laws or Environmental
Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all
insurance policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party.
3.19 Deposit and Disbursement Accounts. Disclosure
Schedule (3.19) lists all banks and other financial institutions at which any
Credit Party maintains deposit or other accounts as of the Closing Date,
including any Disbursement Accounts, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number therefor.
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3.20 Government Contracts. Except as set forth in
Disclosure Schedule (3.20), as of the Closing Date, no Credit Party is a party
to any contract or agreement with any Governmental Authority and no Credit
Party's Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C.
Section 3727) or any similar state or local law.
3.21 [Intentionally Omitted]
3.22 Agreements and Other Documents. As of the Closing
Date, each Credit Party has provided to Agent or its counsel, on behalf of
Lenders, accurate and complete copies (or summaries) of all of the following
agreements or documents to which it is subject and each of which is listed in
Disclosure Schedule (3.22): supply agreements and purchase agreements (excluding
Capital Lease obligations) not terminable by such Credit Party within 60 days
following written notice issued by such Credit Party and involving transactions
in excess of $500,000 per annum; leases of Equipment having a remaining term of
one year or longer and requiring aggregate rental and other payments in excess
of $100,000 per annum; licenses and permits held by the Credit Parties, the
absence of which could be reasonably likely to have a Material Adverse Effect;
instruments and documents evidencing any Indebtedness or Guaranteed Indebtedness
of such Credit Party and any Lien granted by such Credit Party with respect
thereto; and instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party.
3.23 Solvency. As of the Closing Date, both before and
after giving effect to (a) the Loans and Letter of Credit Obligations to be made
or incurred on the Closing Date or such other date as Loans and Letter of Credit
Obligations requested hereunder are made or incurred, (b) the disbursement of
the proceeds of such Loans pursuant to the instructions of Borrower
Representative; (c) the Refinancing and the consummation of the other Related
Transactions; and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is and will be Solvent.
3.24 [Intentionally Omitted].
3.25 [Intentionally Omitted].
3.26 Other Debt. As of the Closing Date, Borrowers have
delivered to Agent a complete and correct copy of the Subordinated Debt
Documents and the Post-Confirmation Credit Agreement Documents (including all
schedules, exhibits, amendments, supplements, modifications, assignments and all
other documents delivered pursuant thereto or in connection therewith). Each
Credit Party has the corporate power and authority to incur the Indebtedness
evidenced by the Subordinated Debt Documents and the Post-Confirmation Credit
Agreement Documents. The subordination provisions of the Subordinated Debt
Documents are enforceable against the holders of the Subordinated Debt Documents
by Agent and Lenders. All Obligations, including the Letter of Credit
Obligations, constitute senior Indebtedness entitled to the benefits of the
subordination provisions contained in the Subordinated Debt Documents. Borrowers
acknowledge that Agent and each Lender are entering into this Agreement and are
extending the Commitments in reliance upon the subordination provisions of the
Subordinated Debt Documents, the payment blockage provisions of the
Intercreditor Agreement and this Section 3.26.
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4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby
agrees that from and after the Closing Date and until the Termination Date, it
shall deliver to Agent or to Agent and Lenders, as required, the Financial
Statements, notices, Projections and other information at the times, to the
Persons and in the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby
agrees that, from and after the Closing Date and until the Termination Date, it
shall deliver to Agent or to Agent and Lenders, as required, the various
Collateral Reports at the times, to the Persons and in the manner set forth in
Annex F.
4.2 Communication with Accountants. Each Credit Party
executing this Agreement authorizes Agent to communicate directly with its
independent certified public accountants, and authorizes and, at Agent's
request, shall instruct those accountants and advisors to disclose and make
available to Agent any and all Financial Statements and other supporting
financial documents, schedules and information relating to any Credit Party
(including copies of any issued management letters) with respect to the
business, financial condition and other affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business.
Each Credit Party shall: do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and use its reasonable
efforts, in the ordinary course and consistent with past practice to preserve
its rights and franchises and continue to conduct its business substantially as
now conducted or as otherwise permitted hereunder; at all times maintain,
preserve and protect all of its assets and properties used or useful in the
conduct of its business, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and transact business only in such corporate and trade names
as are set forth in Disclosure Schedule (5.1).
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5.2 Payment of Charges.
(a) Except as provided in the Plan of Reorganization and subject
to Section 5.2(b), each Credit Party shall pay and discharge or cause to be paid
and discharged promptly all Charges payable by it, including (i) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, (ii) lawful claims for labor,
materials, supplies and services or otherwise, and (iii) all storage or rental
charges payable to warehousemen or bailees, in each case, before any thereof
shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other
than payments to warehousemen and/or bailees) that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met; and (v) Agent has not advised Borrowers in writing that Agent reasonably
believes that nonpayment or nondischarge thereof could have or result in a
Material Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
(3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule (3.18) as in
effect on the date hereof or otherwise in form and amounts customary for its
industry and with insurers reasonably acceptable to Agent. Such policies of
insurance (or the loss payable and additional insured endorsements delivered to
Agent) shall contain provisions pursuant to which the insurer agrees to provide
30 days prior written notice to Agent in the event of any non-renewal,
cancellation or amendment of any such insurance policy. If any Credit Party at
any time or times hereafter shall fail to obtain or maintain any of the policies
of insurance required above, or to pay all premiums relating thereto, Agent may
at any time or times thereafter obtain and maintain such policies of insurance
and pay such premiums and take any other action with respect thereto that Agent
deems advisable. Agent shall have no obligation to obtain insurance for any
Credit Party or pay any premiums therefor. By doing so, Agent shall not be
deemed to have waived any Default or Event of Default arising from any Credit
Party's failure to maintain such insurance or pay any premiums therefor. All
sums so disbursed, including reasonable attorneys' fees, court costs and
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other charges related thereto, shall be payable on demand by Borrowers to Agent
and shall be additional Obligations hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any
Credit Party's risk profile (including any change in the product mix maintained
by any Credit Party or any laws affecting the potential liability of such Credit
Party) to require additional forms and limits of insurance to, in Agent's
opinion, adequately protect both Agent's and Lender's interests in all or any
portion of the Collateral and to ensure that each Credit Party is protected by
insurance in amounts and with coverage customary for its industry. If reasonably
requested by Agent, each Credit Party shall deliver to Agent from time to time a
report of a reputable insurance broker, reasonably satisfactory to Agent, with
respect to its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
Each Credit Party irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Event of
Default has occurred and is continuing or the anticipated insurance proceeds
exceed $500,000, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower Representative shall promptly notify Agent of any
loss, damage, or destruction to the Collateral in the amount of $500,000 or
more, whether or not covered by insurance. After deducting from such proceeds
the expenses, if any, incurred by Agent in the collection or handling thereof,
Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with Section 1.3(d); provided that in the case of
insurance proceeds pertaining to any Credit Party that is not a Borrower, such
insurance proceeds shall be applied ratably to all of the Loans owing by
Borrowers, or permit or require the applicable Credit Party to use such money,
or any part thereof, to replace, repair, restore or rebuild the Collateral in a
diligent and expeditious manner with materials and workmanship of substantially
the same quality as existed before the loss, damage or destruction.
Notwithstanding the foregoing, if the casualty giving rise to such insurance
proceeds could not reasonably be expected to have a Material Adverse Effect and
such insurance proceeds do not exceed $1,000,000 in the aggregate, Agent shall
permit the applicable Credit Party to replace, restore, repair or rebuild the
property; provided that if such Credit Party shall not have completed or entered
into binding agreements to complete such replacement, restoration, repair or
rebuilding within 180 days of such casualty, Agent may apply such insurance
proceeds to the Obligations in accordance with Section 1.3(d); provided,
further, that in the case of insurance proceeds pertaining to any Credit Party
that is not a Borrower, such insurance proceeds shall be applied ratably to all
of the Loans owing by Borrowers. All insurance proceeds that are to be made
available to any Borrower to replace, repair, restore or rebuild the Collateral
shall be applied by Agent to reduce the outstanding principal balance of the
Revolving Loan of such Borrower (which application shall not result in a
permanent reduction of the Revolving Loan Commitment). All insurance proceeds
made available to any Credit Party that is not a Borrower to replace, repair,
restore or rebuild Collateral
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shall be deposited in a cash collateral account. Thereafter, such funds shall be
made available to Borrowers or such Credit Party to provide funds to replace,
repair, restore or rebuild the Collateral as follows: (i) Borrower
Representative shall request a Revolving Credit Advance or a release from the
cash collateral account be made to Borrowers or such Credit Party in the amount
requested to be released; and (ii) so long as the conditions set forth in
Section 2.2 have been met, Revolving Lenders shall make such Revolving Credit
Advance or Agent shall release funds from the cash collateral account. To the
extent not used to replace, repair, restore or rebuild the Collateral, such
insurance proceeds shall be applied in accordance with Section 1.3(d); provided
that in the case of insurance proceeds pertaining to any Credit Party that is
not a Borrower, such insurance proceeds shall be applied ratably to all of the
Loans owing by Borrowers.
5.5 Compliance with Laws. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including those relating to ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6 Supplemental Disclosure. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of a Default or an
Event of Default), the Credit Parties shall supplement each Disclosure Schedule
hereto, or any representation herein or in any other Loan Document, with respect
to any matter hereafter arising that, if existing or occurring at the date of
this Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or that is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation, or be
or be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite Lenders
in writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect.
5.8 Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any
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Release on, at, in, under, above, to, from or about any Real Estate that is
reasonably likely to result in Environmental Liabilities in excess of $100,000;
and (d) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $100,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be
expected to have a Material Adverse Effect, then each Credit Party shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters
and Real Estate Purchases. For a period of six (6) months from and after the
Closing Date, each Credit Party shall reasonable best efforts to obtain, for
each leasehold location existing on the Closing Date, a landlord's agreement,
mortgagee agreement or bailee letter, as applicable, from the lessor of each
leased property, mortgagee of owned property or bailee with respect to any
warehouse, processor or converter facility or other location where Collateral is
stored or located, which agreement or letter shall contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Agent; provided that no Credit
Party shall be required to pay any consent fees in connection therewith. From
and after the Closing Date, no real estate shall be leased by any Credit Party
unless and until a reasonably satisfactory landlord agreement shall first have
been obtained with respect to such location. Each Credit Party shall timely and
fully pay and perform its obligations in all material respects under all leases
and other agreements with respect to each leased location or public warehouse
where any Collateral is or may be located; provided that no such obligations
need be paid which is being contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set aside on the appropriate
books, but only so long as such obligation does not become a Lien or charge
other than a Permitted Encumbrance, and no foreclosure, distraint, sale, or
similar proceedings shall have been commenced and remain unstayed for a period
thirty (30) days after such commencement. To the extent otherwise permitted
hereunder, if any Credit Party proposes to acquire a fee ownership interest in
Real Estate after the Closing Date, it shall, concurrently with such
acquisition, provide to Agent a mortgage or deed of trust granting Agent a first
priority Lien on such Real Estate, together with environmental audits, mortgage
title insurance commitment, real estate survey, local counsel opinion(s), and,
if required by Agent, supplemental casualty insurance and flood insurance, and
such other documents, instruments or
35
agreements reasonably requested by Agent, in each case, in form and substance
reasonably satisfactory to Agent.
5.10 [Intentionally Omitted].
5.11 Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon written request of Agent, duly execute and deliver, or
cause to be duly executed and delivered, to Agent such further instruments and
do and cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or Stock of, or otherwise combine with or acquire, any Person,
except that any Credit Party may merge with or dissolve into a Borrower,
provided that Borrower Representative shall be the survivor of any such merger
to which it is a party.
6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that: (a) Borrowers may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to any Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
so long as the aggregate amount of such Accounts so settled by Borrowers does
not exceed $100,000 and such Accounts are pledged in favor of Agent; (b) each
Credit Party may maintain its existing investments in its Subsidiaries as of the
Closing Date, provided that, with respect to investments in Wooden Nickel and
MSI, Borrowers may make investments in Wooden Nickel and MSI sufficient to meet
the working capital requirements of Wooden Nickel and MSI (but not, without the
prior written consent of Agent, sufficient to enable either Wooden Nickel or MSI
to expand operations beyond those operations existing as of the Closing Date),
and (c) so long as Agent has not delivered an Activation Notice, Borrowers may
make investments, subject to Control Letters in favor of Agent for the benefit
of Lenders or otherwise subject to a perfected security interest in favor of
Agent for the benefit of Lenders, in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Group or Xxxxx'x Investors Service, Inc., (iii) certificates of deposit
maturing no more than one year from the date of creation thereof issued by
commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and
36
undivided profits of not less than $300,000,000 and having a senior unsecured
rating of "A" or better by a nationally recognized rating agency (an "A Rated
Bank"), (iv) time deposits maturing no more than 30 days from the date of
creation thereof with A Rated Banks and (v) mutual funds that invest solely in
one or more of the investments described in clauses (i) through (iv) above.
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist
any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension fund
and other employee benefit plan obligations and liabilities to the extent they
are permitted to remain unfunded under applicable law, (iv) existing
Indebtedness described in Disclosure Schedule (6.3) and refinancings thereof or
amendments or modifications thereto that do not have the effect of increasing
the principal amount thereof or changing the amortization thereof (other than to
extend the same) and that are otherwise on terms and conditions no less
favorable to any Credit Party, Agent or any Lender, as determined by Agent, than
the terms of the Indebtedness being refinanced, amended or modified, (v)
Subordinated Debt; (vi) Trade Creditor Debt; (vii) Post-Confirmation Credit
Agreement Debt, and (viii) Indebtedness consisting of intercompany loans and
advances made by any Credit Party to any other Credit Party; provided, that: (A)
at the request of Agent, each Credit Party shall have executed and delivered to
each other Credit Party a demand note (collectively, the "Intercompany Notes")
to evidence any such intercompany Indebtedness owing at any time by such Credit
Party to such other Credit Parties which Intercompany Notes shall be in form and
substance reasonably satisfactory to Agent and shall be pledged and delivered to
Agent pursuant to the applicable Pledge Agreement or Security Agreement as
additional collateral security for the Obligations; (B) each Credit Party shall
record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Agent; (C) the obligations of each Credit Party under
any such Intercompany Notes shall be subordinated to the Obligations of such
Credit Party hereunder in a manner reasonably satisfactory to Agent; (D) at the
time any such intercompany loan or advance is made by any Credit Party to any
other Credit Party and after giving effect thereto, each such Credit Party shall
be Solvent; and (E) no Default or Event of Default would occur and be continuing
after giving effect to any such proposed intercompany loan.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with Sections 6.8(b) or (c); (iii) Indebtedness permitted by Section 6.3(a)(iv)
upon any refinancing thereof in accordance with Section 6.3(a)(iv); and (iv)
otherwise permitted in Section 6.14.
6.4 Employee Loans and Affiliate Transactions.
(a) Except as otherwise expressly permitted in this Section 6 with
respect to Affiliates, no Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less
37
favorable to such Credit Party than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate of such Credit Party. In
addition, except for (i) transactions among the Credit Parties and (ii)
compensation of officers and directors, if any such transaction or series of
related transactions involves payments in excess of $250,000 in the aggregate,
the terms of these transactions must be disclosed in advance to Agent and
Lenders. All such transactions existing as of the date hereof are described in
Disclosure Schedule (6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except (i) loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $50,000 to any employee and up to a maximum of
$100,000 in the aggregate at any one time outstanding or (ii) Indebtedness of
employees to any Credit Party in connection with such Credit Party's employee
stock ownership plan as disclosed to Agent on or before the Closing Date.
(c) No Borrower shall amend the terms of any employment agreement
with Xxxxxxx Xxxxxxx in any manner less favorable to such Borrower.
6.5 Capital Structure and Business. No Credit Party shall (a) make
any changes in any of its business objectives, purposes or operations that could
in any way adversely affect the repayment of the Loans or any of the other
Obligations or could reasonably be expected to have or result in a Material
Adverse Effect, (b) make any change in its capital structure as described in
Disclosure Schedule (3.8), or (c) amend its charter or bylaws in a manner that
would adversely affect Agent or Lenders or such Credit Party's duty or ability
to repay the Obligations. No Credit Party shall engage in any business other
than the businesses currently engaged in by it.
6.6 Guaranteed Indebtedness. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, (b) Subordinated Debt, and (c) for Guaranteed Indebtedness
incurred for the benefit of any other Credit Party if the primary obligation is
expressly permitted by this Agreement.
6.7 Liens. No Credit Party shall create, incur, assume or permit
to exist any Lien on or with respect to its Accounts or any of its other
properties or assets (whether now owned or hereafter acquired) except for (a)
Permitted Encumbrances; (b) Liens in existence on the date hereof and summarized
on Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; (c) Liens created after the date hereof by
conditional sale or other title retention agreements (including Capital Leases)
or in connection with purchase money Indebtedness with respect to Equipment and
Fixtures acquired by any Credit Party in the ordinary course of business,
involving the incurrence of an aggregate amount of purchase money Indebtedness
and Capital Lease Obligations of not more than $500,000 outstanding at any one
time for all such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is incurred within 20
days following such purchase and does not exceed
38
100% of the purchase price of the subject assets); (d) Liens described in the
Plan of Reorganization provided that such Liens are subordinated to the Liens in
favor of Agent; and (e) other Liens securing Indebtedness not exceeding $500,000
in the aggregate at any time outstanding, so long as such Liens do not attach to
any Accounts or Inventory. In addition, no Credit Party shall become a party to
any agreement, note, indenture or instrument, or take any other action, that
would prohibit the creation of a Lien on any of its properties or other assets
in favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the Stock of any of its Subsidiaries (whether in a public or a
private offering or otherwise) or any of its Accounts, other than (a) the sale
of Inventory in the ordinary course of business, (b) the sale, transfer,
conveyance or other disposition of the real property identified on Disclosure
Schedule 1.3(b), and (c) the sale, transfer, conveyance or other disposition by
a Credit Party of Equipment or Fixtures that are obsolete or no longer used or
useful in such Credit Party's business and having a sales price not exceeding
$500,000 in any single transaction or $2,000,000 in the aggregate in any Fiscal
Year. With respect to any disposition of assets or other properties permitted
pursuant to clause (b) or clause (c) above, subject to Section 1.3(b), Agent
agrees on reasonable prior written notice to release its Lien on such assets or
other properties in order to permit the applicable Credit Party to effect such
disposition and shall deliver to Borrowers, at Borrowers' expense, appropriate
UCC-3 termination statements and other releases as reasonably requested by
Borrowers.
6.9 ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10 Financial Covenants. Borrowers shall not breach or fail to
comply with any of the Financial Covenants.
6.11 Hazardous Materials. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
6.12 Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.
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6.13 Cancellation of Indebtedness. No Credit Party shall cancel any
claim or debt owing to it, except for reasonable consideration negotiated on an
arm's length basis and in the ordinary course of its business consistent with
past practices.
6.14 Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances among Credit Parties to the
extent permitted by Section 6.3, (b) dividends and distributions by Subsidiaries
of any Borrower paid to such Borrower, (c) employee loans permitted under
Section 6.4(b), (d) payments of principal and interest of Intercompany Notes
issued in accordance with Section 6.3; (e) payments with respect to the Trade
Creditor Debt, (f) any Restricted Payment made in connection with Subordinated
Debt not prohibited under the terms of the Subordinated Debt Documents and (g)
any Restricted Payment made in connection with Post-Confirmation Credit
Agreement Debt not prohibited under the terms of the Intercreditor Agreement.
6.15 Change of Corporate Name or Location; Change of Fiscal Year.
No Credit Party shall (a) change its name as it appears in official filings in
the state of its incorporation or other organization (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which Collateral is held or stored, or the location of its
records concerning the Collateral, (c) change the type of entity that it is, (d)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation or
organization, in each case without at least 30 days prior written notice to
Agent and after Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including to continue the perfection
of any Liens in favor of Agent, on behalf of Lenders, in any Collateral, has
been completed or taken, and provided that any such new location shall be in the
continental United States. Without limiting the foregoing, no Credit Party shall
change its name, identity or corporate structure in any manner that might make
any financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9-503 of the Code or any other then
applicable provision of the Code except upon prior written notice to Agent and
Lenders and after Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including to continue the perfection
of any Liens in favor of Agent, on behalf of Lenders, in any Collateral, has
been completed or taken. No Credit Party shall change its Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of any Borrower
to any Borrower or between Borrowers.
6.17 No Speculative Transactions. No Credit Party shall engage in
any transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
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6.18 Leases; Real Estate Purchases. No Credit Party shall enter
into any operating lease for Real Estate or modify, amend or supplement any
existing leases that would result in an increase in excess of ten percent (10%)
of the aggregate liabilities of Credit Parties under all existing leases (except
for scheduled escalations contained and reflected in the Projections approved by
Agent), except for (a) renewals or extensions of operating leases in effect as
of the Closing Date or (b) leases with respect to the number of proposed theater
locations set forth in the Disclosure Statement. Except as previously disclosed
to Agent in writing prior to the Closing Date, no Credit Party shall purchase a
fee simple ownership interest in Real Estate. No Credit Party shall enter into
any operating lease for equipment if the aggregate of such new operating lease
payments in any year subsequent to the Closing Date, for Borrowers and their
respective Subsidiaries on a consolidated basis, would exceed $500,000.
6.19 Changes Relating to Debt; Material Contracts.
(a) No Credit Party shall change or amend the terms of any
Subordinated Debt, Subordinated Debt Document (or any indenture or agreement in
connection therewith) if the effect of such amendment is to: (i) increase the
interest rate on such Subordinated Debt; (ii) change the dates upon which
payments of principal or interest are due on such Subordinated Debt other than
to extend such dates; (iii) change any default or event of default other than to
delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt; (iv) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (v) grant
any security or collateral to secure payment of such Subordinated Debt; or (vi)
change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Subordinated Debt in a manner adverse to
any Credit Party, Agent or any Lender.
(b) No Credit Party shall change or amend the terms of any
Post-Confirmation Credit Agreement Document in any manner prohibited under the
terms of the Intercreditor Agreement.
(c) No Credit Party shall change or amend the terms of any of the
following material contracts: (i) the Concession Agreement or (ii) the Coke
Agreement.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby
shall be in effect until the Commitment Termination Date, and the Loans and all
other Obligations shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which
41
is required after the Commitment Termination Date. Except as otherwise expressly
provided herein or in any other Loan Document, all undertakings, agreements,
covenants, warranties and representations of or binding upon the Credit Parties,
and all rights of Agent and each Lender, all as contained in the Loan Documents,
shall not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided, that the provisions of Section 11, the payment obligations under
Sections 1.15 and 1.16, and the indemnities contained in the Loan Documents
shall survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Any Borrower (i) fails to make any payment of principal of the
Loans or any of the other Obligations when due and payable, (i) fails to make
any payment of interest on, or Fees owing in respect of, the Loans or any of the
other Obligations within three (3) Business Days of when due and payable, or
(ii) fails to pay or reimburse Agent or Lenders for any expense reimbursable
hereunder or under any other Loan Document within 10 days following Agent's
demand for such reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of Sections 1.4, 1.8, 5.4(a) or 6, or any of the
provisions set forth in Annexes C or G, respectively.
(c) Any Borrower fails or neglects to perform, keep or observe any
of the provisions of Section 4 or any provisions set forth in Annex E, and the
same shall remain unremedied for 5 Business Days or more.
(d) Except as set forth in Section 8.1(m) below with respect to
Mortgages, any Credit Party fails or neglects to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents (other
than any provision embodied in or covered by any other clause of this Section
8.1) and the same shall remain unremedied for 20 days or more.
(e) Except as set forth in Section 8.1(n) and Section 8.1(o) below
with respect to the Subordinated Debt Documents or the Post-Confirmation Credit
Documents, a default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $3,000,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $3,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case (except with respect to the
42
Subordinated Debt Documents or the Post-Confirmation Credit Documents),
regardless of whether such default is waived, or such right is exercised, by
such holder or trustee.
(f) Any representation or warranty herein or in any Loan Document
or in any written statement, report, financial statement or certificate made or
delivered to Agent or any Lender by any Credit Party is untrue or incorrect in
any material respect as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of
$250,000 or more are attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for 30 days or more.
(h) A case or proceeding is commenced against any Credit Party
seeking a decree or order in respect of such Credit Party (i) under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Credit Party, and such case or
proceeding shall remain undismissed or unstayed for 60 days or more or a decree
or order granting the relief sought in such case or proceeding shall be entered
by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner the institution of proceedings thereunder or the filing of
any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or for any substantial part of any such Credit Party's
assets, (iii) makes an assignment for the benefit of creditors, (iv) takes any
action in furtherance of any of the foregoing; or (v) admits in writing its
inability to, or is generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in
excess of $500,000 in the aggregate at any time are outstanding against one or
more of the Credit Parties and the same are not, within 30 days after the entry
thereof, discharged or execution thereof stayed or bonded pending appeal, or
such judgments are not discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any Lien created under any Loan Document ceases to be a valid and perfected
first priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby.
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(l) Any Change of Control occurs.
(m) Any default occurs and is continuing under any Mortgage after
giving effect to any notice or cure periods set forth therein.
(n) Any default or breach by any Borrower occurs and is continuing
under any Subordinated Debt Document or the Concession Agreement, the Coke
Agreement or any Subordinated Debt Document shall be terminated for any reason.
(o) Any Event of Default by any Credit Party occurs and is
continuing under any Post-Confirmation Credit Agreement Document or any
Post-Confirmation Credit Agreement Document shall be terminated for any reason.
8.2 Remedies.
(a) If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, suspend the Revolving Loan facility with respect to
additional Advances and/or the incurrence of additional Letter of Credit
Obligations, whereupon any additional Advances and additional Letter of Credit
Obligations shall be made or incurred in Agent's sole discretion (or in the sole
discretion of the Requisite Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Event of Default has occurred and is continuing, Agent may (and at the written
request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the Loans
and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent
may (and at the written request of the Requisite Lenders shall), without notice:
(i) terminate the Revolving Loan facility with respect to further Advances or
the incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrowers and each other Credit Party; or (iii) exercise any rights and remedies
provided to Agent under the Loan Documents or at law or equity, including all
remedies provided under the Code; provided, that upon the occurrence of an Event
of Default specified in Sections 8.1(h) or (i), the Revolving Loan facility
shall be immediately terminated and all of the Obligations, including the
aggregate Revolving Loan, shall become immediately due and payable without
declaration, notice or demand by any Person.
8.3 Waivers by Credit Parties. Except as otherwise provided for in
this Agreement or by applicable law, each Credit Party waives (including for
purposes of Section 12): (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which any Credit Party may in any way be liable, and hereby ratifies and
confirms whatever Agent may do in this regard, (b) all rights to notice and a
hearing prior to Agent's taking possession or control
44
of, or to Agent's replevy, attachment or levy upon, the Collateral or any bond
or security that might be required by any court prior to allowing Agent to
exercise any of its remedies, and (c) the benefit of all valuation, appraisal,
marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may make
an assignment to a Qualified Assignee of, or sell participations in, at any time
or times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and so
long as no Default or Event of Default then exists, the consent of Borrowers
(which consent shall not be unreasonably withheld, delayed or conditioned) and
the execution of an assignment agreement (an "Assignment Agreement")
substantially in the form attached hereto as Exhibit 9.1(a) and otherwise in
form and substance reasonably satisfactory to, and acknowledged by, Agent; (ii)
be conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) after giving effect to any such partial assignment, the assignee
Lender shall have Commitments in an amount at least equal to $5,000,000 and the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; (iv) include a payment to Agent of an assignment fee of $3,500. In
the case of an assignment by a Lender under this Section 9.1, the assignee shall
have, to the extent of such assignment, the same rights, benefits and
obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any assignment shall give rise to a
direct obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, Agent
or any such Lender shall so notify Borrowers and Borrowers shall, upon the
request of Agent or such Lender, execute new Notes in exchange for the Notes, if
any, being assigned. Notwithstanding the foregoing provisions of this Section
9.1(a), any Lender may at any time pledge the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor; provided, that no such pledge to a Federal Reserve Bank shall release
such Lender from such Lender's obligations hereunder or under any other Loan
Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action
45
hereunder except actions directly affecting (i) any reduction in the principal
amount of, or interest rate or Fees payable with respect to, any Loan in which
such holder participates, (ii) any extension of the scheduled amortization of
the principal amount of any Loan in which such holder participates or the final
maturity date thereof, and (iii) any release of all or substantially all of the
Collateral (other than in accordance with the terms of this Agreement, the
Collateral Documents or the other Loan Documents). Solely for purposes of
Sections 1.13, 1.15, 1.16 and 9.8, each Borrower acknowledges and agrees that a
participation shall give rise to a direct obligation of Borrowers to the
participant and the participant shall be considered to be a "Lender;" provided,
however, that all amounts payable by the Borrowers to any Participant under
Section 1.15 and 1.16 hereof shall be determined as if such Lender from whom
such Participant purchased such participation had not sold such participation.
Except as set forth in the preceding sentence no Borrower or Credit Party shall
have any obligation or duty to any participant. Neither Agent nor any Lender
(other than the Lender selling a participation) shall have any duty to any
participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no Lender
shall, as between Borrowers and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist, at
any time and from time to time, any Lender permitted to sell assignments or
participations under this Section 9.1 as reasonably required to enable the
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested and, in the case of a Lender who
was a Lender on the Closing Date, if requested by Agent, the preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants. Each Credit Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their respective affairs contained in any
selling materials provided by them and all other information provided by them
and included in such materials, except that any Projections delivered by
Borrowers shall only be certified by Borrowers as having been prepared by
Borrowers in compliance with the representations contained in Section 3.4(c).
(e) Any Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that
such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 11.8.
(f) So long as no Event of Default has occurred and is continuing,
no Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.16(a), increased
costs under Section 1.16(b), an inability to fund LIBOR Loans under Section
1.16(c), or withholding taxes in accordance with Section 1.15(a).
46
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrowers, the option to provide to Borrowers all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrowers pursuant
to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; (ii) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Loan, the
Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof, (iii) an SPC shall not be entitled to require such Lender to take or
omit to take any action hereunder except actions directly affecting (A) any
reduction in the principal amount of, or interest rate or Fees payable with
respect to, any Loan in which such SPC participates, (B) any extension of the
scheduled amortization of the principal amount of any Loan in which such SPC
participates or the final maturity date thereof, and (C) any release of all or
substantially all of the Collateral (other than in accordance with the terms of
this Agreement, the Collateral Documents or the other Loan Documents). The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrowers and Agent and assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by Borrowers and Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This Section 9.1(g)
may not be amended without the prior written consent of each Granting Lender,
all or any of whose Loans are being funded by an SPC at the time of such
amendment. For the avoidance of doubt, the Granting Lender shall for all
purposes, including without limitation, the approval of any amendment or waiver
of any provision of any Loan Document or the obligation to pay any amount
otherwise payable by the Granting Lender under the Loan Documents, continue to
be the Lender of record hereunder.
9.2 Appointment of Agent. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender. Except as expressly set forth in this Agreement and the
other Loan Documents, Agent shall not have any duty to disclose, and shall not
be liable for failure to disclose, any information relating to any Credit Party
or any of their respective Subsidiaries or any Account Debtor that is
communicated to or obtained by GE Capital or any of its Affiliates in any
capacity. Neither Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or
47
representatives shall be liable to any Lender for any action taken or omitted to
be taken by it hereunder or under any other Loan Document, or in connection
herewith or therewith, except for damages caused by its or their own gross
negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders or all
affected Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders or all affected Lenders,
as the case may be, and Agent shall not incur liability to any Person by reason
of so refraining. Agent shall be fully justified in failing or refusing to take
any action hereunder or under any other Loan Document (a) if such action would,
in the opinion of Agent, be contrary to law or the terms of this Agreement or
any other Loan Document, (b) if such action would, in the opinion of Agent,
expose Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders or all affected Lenders, as applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent: (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form reasonably satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who
48
may do business with or own securities of any Credit Party or any such
Affiliate, all as if GE Capital were not Agent and without any duty to account
therefor to Lenders. GE Capital and its Affiliates may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the
extent not reimbursed by Credit Parties and without limiting the obligations of
Borrowers hereunder), ratably according to their respective Pro Rata Shares,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted to be taken by Agent in
connection therewith; provided, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving not
less than 30 days' prior written notice thereof to Lenders and Borrower
Representative. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Agent and provided no Default or Event of Default
then exists with Borrower's consent, which consent shall not be unreasonably
withheld, delayed or conditioned. If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the resigning Agent's giving notice of resignation, then
the resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within 30 days after the date such notice of resignation was
49
given by the resigning Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower Representative, such approval not
to be unreasonably withheld or delayed; provided that such approval shall not be
required if a Default or an Event of Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Agent. Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent's resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder, 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 acting as Agent under
this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default and subject to Section 9.9(f), each Lender is hereby authorized at any
time or from time to time, without notice to any Credit Party or to any other
Person, any such notice being hereby expressly waived, to offset and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of any Borrower or Guarantor (regardless of whether such
balances are then due to such Borrower or Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for the
credit or for the account of any Borrower or Guarantor against and on account of
any of the Obligations that are not paid when due. Any Lender exercising a right
of setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares (other than
offset rights exercised by any Lender with respect to Sections 1.13, 1.15 or
1.16). Each Credit Party that is a Borrower or Guarantor agrees, to the fullest
extent permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may sell participations in such amounts so offset to other Lenders and holders
and (b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
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9.9 Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or participate in the
Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c). If
the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of Revolving Advance is received,
by telecopy, telephone or other similar form of transmission. Each Revolving
Lender shall make the amount of such Lender's Pro Rata Share of such Revolving
Credit Advance available to Agent in same day funds by wire transfer to Agent's
account as set forth in Annex H not later than 3:00 p.m. (New York time) on the
requested funding date, in the case of an Index Rate Loan, and not later than
11:00 a.m. (New York time) on the requested funding date, in the case of a LIBOR
Loan. After receipt of such wire transfers (or, in the Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof, Agent shall
make the requested Revolving Credit Advance to the Borrower designated by
Borrower Representative in the Notice of Revolving Credit Advance. All payments
by each Revolving Lender shall be made without setoff, counterclaim or deduction
of any kind.
(ii) On the 2nd Business Day of each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent shall pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrowers since
the previous Settlement Date for the benefit of such Lender on the Loans held by
it. To the extent that any Lender (a "Non-Funding Lender") has failed to fund
all such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
Borrowers. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in Annex H or the applicable Assignment Agreement)
not later than 1:00 p.m. (Chicago time) 2:00 p.m. (New York time) on the next
Business Day following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower Representative and Borrowers shall immediately repay such amount
to Agent. Nothing in this Section 9.9(b) or elsewhere in this Agreement or the
other Loan Documents shall be deemed to require Agent to advance funds on behalf
of any Revolving Lender or to relieve any Revolving Lender from its obligation
to fulfill its Commitments
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hereunder or to prejudice any rights that Borrowers may have against any
Revolving Lender as a result of any default by such Revolving Lender hereunder.
To the extent that Agent advances funds to any Borrower on behalf of any
Revolving Lender and is not reimbursed therefor on the same Business Day as such
Advance is made, Agent shall be entitled to retain for its account all interest
accrued on such Advance until reimbursed by the applicable Revolving Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrowers and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to any Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to any Borrower or such other
Person, without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder or to
purchase any participation in any Swing Line Loan to be made or purchased by it
on the date specified therefor shall not relieve any other Lender (each such
other Revolving Lender, an "Other Lender") of its obligations to make such
Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender
to make an Advance, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" or a "Revolving Lender"
(or be included in the calculation of "Requisite Lenders" hereunder) for any
voting or consent rights under or with respect to any Loan Document. At Borrower
Representative's request, Agent or a Person reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent's request, sell and assign to
Agent or such Person, all of the Commitments of that Non-Funding Lender for an
amount equal to the principal balance of all Loans held by such Non-Funding
Lender and all accrued interest and fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
(e) Dissemination of Information. Agent shall use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; provided, that
Agent shall not be liable to any Lender for any failure to do so, except to
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the extent that such failure is attributable to Agent's gross negligence or
willful misconduct. Lenders acknowledge that Borrowers are required to provide
Financial Statements and Collateral Reports to Lenders in accordance with
Annexes E and F hereto and agree that Agent shall have no duty to provide the
same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2. Any letter of interest, commitment letter, or fee
letter (other than the GE Capital Letter) or confidentiality agreement, if any,
between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent,
no amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrowers, and by Requisite Lenders or all
affected Lenders, as applicable. Except as set forth in clauses (b) and
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(c) below, all such amendments, modifications, terminations or waivers requiring
the consent of any Lenders shall require the written consent of Requisite
Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement that waives compliance
with the conditions precedent set forth in Section 2.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective unless
the same shall be in writing and signed by Agent, Requisite Lenders and
Borrowers. Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default or any Event of Default shall
be effective for purposes of the conditions precedent to the making of Loans or
the incurrence of Letter of Credit Obligations set forth in Section 2.2 unless
the same shall be in writing and signed by Agent, Requisite Lenders and
Borrowers.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby:
(i) increase the principal amount of any Lender's Commitment (which action shall
be deemed to directly affect all Lenders; (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
(other than payment dates of mandatory prepayments under Section
1.3(b)(ii)-(iv)) or final maturity date of the principal amount of any Loan of
any affected Lender; (iv) waive, forgive, defer, extend or postpone any payment
of interest or Fees as to any affected Lender; (v) release any Guaranty or,
except as otherwise permitted herein or in the other Loan Documents, release, or
permit any Credit Party to sell or otherwise dispose of, any Collateral with a
value exceeding $5,000,000 in the aggregate (which action shall be deemed to
directly affect all Lenders); (vi) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this Section 11.2 or the definition of the term "Requisite Lenders" insofar as
such definition affect the substance of this Section 11.2. Furthermore, no
amendment, modification, termination or waiver affecting the rights or duties of
Agent or L/C Issuer under this Agreement or any other Loan Document shall be
effective unless in writing and signed by Agent or L/C Issuer, as the case may
be, in addition to Lenders required hereinabove to take such action. Each
amendment, modification, termination or waiver shall be effective only in the
specific instance and for the specific purpose for which it was given. No
amendment, modification, termination or waiver shall be required for Agent to
take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No notice
to or demand on any Credit Party in any case shall entitle such Credit Party or
any other Credit Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not
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obtained (any such Lender whose consent is not obtained as described in this
clause (i) and in clauses (ii), (iii) and (iv) below being referred to as a
"Non-Consenting Lender"),
(ii) requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative's request, Agent or a Person reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Person, all of the Commitments of such Non-Consenting
Lenders for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lenders and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrowers termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
11.3 Fees and Expenses. Borrowers shall reimburse (i) Agent for all
reasonable fees, costs and expenses (including the reasonable fees and expenses
of all of its counsel, advisors, consultants and auditors) and (ii) Agent (and,
with respect to clauses (c) and (d) below, all Lenders) for all fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers),
incurred in connection with the negotiation and preparation of the Loan
Documents and incurred in connection with:
(a) the forwarding to Borrowers or any other Person on behalf of
Borrowers by Agent of the proceeds of any Loan (including a wire transfer fee of
$25 per wire transfer);
(b) any amendment, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the syndication and administration of the
Loans made pursuant hereto or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Borrower or any other Person and
whether as a party, witness or otherwise) in any way relating to the Collateral,
any of the Loan Documents or any other agreement to be executed or delivered in
connection herewith or therewith, including any litigation, contest, dispute,
suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against any or all of the Borrowers or
any other Person that may be obligated to Agent by virtue of the Loan Documents;
including any such litigation,
55
contest, dispute, suit, proceeding or action arising in connection with any
work-out or restructuring of the Loans during the pendency of one or more Events
of Default; provided that in the case of reimbursement of counsel for Lenders
other than Agent, such reimbursement shall be limited to one counsel for all
such Lenders; provided, further, that no Person shall be entitled to
reimbursement under this clause (c) in respect of any litigation, contest,
dispute, suit, proceeding or action to the extent any of the foregoing results
from such Person's gross negligence or willful misconduct;
(d) any attempt to enforce any remedies of Agent against any or
all of the Credit Parties or any other Person that may be obligated to Agent or
any Lender by virtue of any of the Loan Documents, including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; provided, that in
the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the pendency
of one or more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrowers to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or
times, to require strict performance by the Credit Parties of any provision of
this Agreement or any other Loan Document shall not waive, affect or diminish
any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
56
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders, and directed to Borrowers specifying
such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information)
to maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential following receipt thereof, except
that Agent and any Lender may disclose such information (a) to Persons employed
or engaged by Agent or such Lender; (b) to any bona fide assignee or participant
or potential assignee or participant that has agreed to comply with the covenant
contained in this Section 11.8 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (a) above); (c) as required
or requested by any Governmental Authority or reasonably believed by Agent or
such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent's or such
Lender's counsel, is required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation to
which Agent or such Lender is a party; or (f) that ceases to be confidential
through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN CITY OF
ATLANTA, COUNTY OF XXXXXX SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND
57
LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
XXXXXX COUNTY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED
OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT
PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET
FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3
DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered: (a) upon the earlier of actual receipt and 3
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10); (c) 1 Business Day after deposit with a reputable overnight courier with
all charges prepaid or (d) when delivered, if hand-delivered by messenger, all
of which shall be addressed to the party to be notified and sent to the address
or facsimile number indicated in Annex I or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person (other than Borrower Representative or Agent) designated in Annex I to
receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
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11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement. Delivery of a manually executed counterpart hereto by
facsimile transmission shall be deemed delivery of an originally executed
counterpart hereto.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure using the name of GE
Capital or its affiliates or referring to this Agreement, the other Loan
Documents or the Related Transactions Documents without at least 2 Business
Days' prior notice to GE Capital and without the prior written consent of GE
Capital unless (and only to the extent that) such Credit Party or Affiliate is
required to do so under law and then, in any event, such Credit Party or
Affiliate will consult with GE Capital before issuing such press release or
other public disclosure. Each Credit Party consents to the publication by Agent
or any Lender of a tombstone or similar advertising material relating to the
financing transactions contemplated by this Agreement. Agent reserves the right
to provide to industry trade organizations information necessary and customary
for inclusion in league table measurements.
11.15 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Borrower for liquidation or reorganization, should any Borrower become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Borrower's assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be
59
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
11.16 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
12. CROSS-GUARANTY
12.1 Cross-Guaranty. Each Borrower hereby agrees that such Borrower
is jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section 12 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this Section 12 shall be absolute and
unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this Section 12) or any other Loan Document or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect
its Lien against, any security for the Obligations or any action, or the absence
of any action, by Agent and Lenders in respect thereof (including the release of
any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
12.2 Waivers by Borrowers. Each Borrower expressly waives all
rights it may have now or in the future under any statute, or at common law, or
at law or in equity, or otherwise, to compel Agent or Lenders to xxxxxxxx assets
or to proceed in respect of the
60
Obligations guaranteed hereunder against any other Credit Party, any other party
or against any security for the payment and performance of the Obligations
before proceeding against, or as a condition to proceeding against, such
Borrower. It is agreed among each Borrower, Agent and Lenders that the foregoing
waivers are of the essence of the transaction contemplated by this Agreement and
the other Loan Documents and that, but for the provisions of this Section 12 and
such waivers, Agent and Lenders would decline to enter into this Agreement.
12.3 Benefit of Guaranty. Each Borrower agrees that the provisions
of this Section 12 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.
12.4 Subordination of Subrogation, Etc. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, and except as set
forth in Section 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are indefeasibly paid in full in
cash. Each Borrower acknowledges and agrees that this subordination is intended
to benefit Agent and Lenders and shall not limit or otherwise affect such
Borrower's liability hereunder or the enforceability of this Section 12, and
that Agent, Lenders and their respective successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in this
Section 12.4.
12.5 Election of Remedies. If Agent or any Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving Agent or such Lender a Lien upon any Collateral, whether owned by any
Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Section 12. If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to "election of remedies" or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
such action by Agent or such Lender. Any election of remedies that results in
the denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. In the event Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Agent or such Lender may bid all or less
than the amount of the Obligations and the amount of such bid need not be paid
by Agent or such Lender but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Section 12, notwithstanding
that any present or future law or court decision or ruling may have the effect
of
61
reducing the amount of any deficiency claim to which Agent or any Lender might
otherwise be entitled but for such bidding at any such sale.
12.6 Limitation. Notwithstanding any provision herein contained to
the contrary, each Borrower's liability under this Section 12 (which liability
is in any event in addition to amounts for which such Borrower is primarily
liable under Section 1) shall be limited to an amount not to exceed as of any
date of determination the greater of:
(a) the net amount of all Loans advanced to any other Borrower
under this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower; and
(b) the amount that could be claimed by Agent and Lenders from
such Borrower under this Section 12 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Borrower's right of contribution and indemnification from each
other Borrower under Section 12.7.
12.7 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment under
this Section 12 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "Guarantor Payment") that, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower's "Allocable Amount"
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Borrower for the
amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this Section 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This Section 12.7 is intended only to define the relative
rights of Borrowers and nothing set forth in this Section 12.7 is intended to or
shall impair the obligations of Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including Section 12.1. Nothing contained in this
Section 12.7 shall limit the liability of any Borrower to pay the Loans made
62
directly or indirectly to that Borrower and accrued interest, Fees and expenses
with respect thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Borrower to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Credit
Parties under this Section 12.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
12.8 Liability Cumulative. The liability of Borrowers under this
Section 12 is in addition to and shall be cumulative with all liabilities of
each Borrower to Agent and Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrower, without any limitation as to amount, unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
[Remainder of Page Intentionally Left Blank]
63
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWERS
CARMIKE CINEMAS, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
----------------------------------
EASTWYNN THEATRES, INC., an Alabama
corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
----------------------------------
AGENT/LENDERS
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
/s/ Xxxxxxx X. Varolla
----------------------------------------
By: Xxxxxxx X. Varolla
-------------------------------------
Duly Authorized Signatory
64
The following Persons are signatories to this Agreement in
their capacity as Credit Parties and not as Borrowers.
WOODEN NICKEL PUB, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
----------------------------------
MILITARY SERVICES, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
----------------------------------
65
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have
(unless otherwise provided elsewhere in the Loan Documents) the following
respective meanings, and all references to Sections, Exhibits, Schedules or
Annexes in the following definitions shall refer to Sections, Exhibits,
Schedules or Annexes of or to the Agreement:
"Account Debtor" means any Person who may become obligated to
any Credit Party under, with respect to, or on account of, an Account, Chattel
Paper or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex
G.
"Accounts" means all "accounts," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper, or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all health care insurance receivables and (f) all
collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.
"Activation Event" and "Activation Notice" have the meanings
ascribed thereto in Annex C.
"Advance" means any Revolving Credit Advance.
"Affiliate" means, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, 5% or more of the Stock having ordinary
voting power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrowers, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Borrower. For the purposes
of this definition, "control" of a Person shall mean the
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possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall specifically exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders
or its successor appointed pursuant to Section 9.7.
"Agreement" means the Credit Agreement by and among Borrowers,
the other Credit Parties party thereto, GE Capital, as Agent and Lender and the
other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to
the Agreement.
"Applicable L/C Margin" means the per annum fee, from time to
time in effect, payable with respect to outstanding Letter of Credit Obligations
as determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C
Margin, Applicable Unused Line Fee, the Applicable Revolver Index Margin, and
the Applicable Revolver LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum
interest rate margin from time to time in effect and payable in addition to the
Index Rate applicable to the Revolving Loan, as determined by reference to
Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum
interest rate from time to time in effect and payable in addition to the LIBOR
Rate applicable to the Revolving Loan, as determined by reference to Section
1.5(a).
"Applicable Unused Line Fee" means the per annum fee, from
time to time in effect, payable in respect of Borrowers' non-use of committed
funds pursuant to Section 1.9(b), which fee is three quarters of one percent
(0.75%).
"Assignment Agreement" has the meaning ascribed to it in
Section 9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the
United States Code, 11 U.S.C. ss.ss.101 et seq.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrower Representative" means Carmike in its capacity as
Borrower Representative pursuant to the provisions of Section 1.1(d).
"Borrowers" and "Borrower" have the respective meanings
ascribed thereto in the preamble to the Agreement.
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"Business Day" means any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State of
New York and in reference to LIBOR Loans shall mean any such day that is also a
LIBOR Business Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness but
excluding Capital Lease Obligations and (b) tenant improvement expenses which
are reimbursed or reimbursable to a Credit Party by the landlord) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto that have a useful life of more
than one year and that are required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"Carmike" means Carmike Cinemas, Inc., a Delaware corporation.
"Carmike Pledge Agreement" means the Pledge Agreement of even
date herewith executed by Carmike in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its Subsidiaries and all Intercompany Notes owing
to or held by it.
"Carmike Stockholders" means those stockholders identified on
Disclosure Schedule 3.8 as holders of Stock of Carmike.
"Cash Collateral Account" has the meaning ascribed to it Annex
B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Management Systems" has the meaning ascribed to it in
Section 1.8.
"Change of Control" means any event, transaction or occurrence
as a result of which (a) the Carmike Stockholders cease to own and control all
of the economic and voting rights associated with ownership of at least thirty
percent (30%) of the outstanding capital Stock of all classes of Carmike on a
fully diluted basis, or (b) Carmike ceases to own and control all of the
economic and voting rights associated with all of the outstanding capital Stock
of any of its Subsidiaries.
"Charges" means all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
A-3
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is
defined in the Code, including electronic chattel paper, now owned or hereafter
acquired by any Credit Party.
"Closing Date" means January 31, 2002.
"Closing Checklist" means the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Annex D.
"Code" means the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided, that
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Coke Agreement" means that certain Amended and Restated
Agreement by and between the Coca-Cola Company and Carmike dated December 9,
1998 and effective December 10, 1998.
"Collateral" means the property covered by the Security
Agreement, the Mortgages and the other Collateral Documents and any other
property, real or personal, tangible or intangible, now existing or hereafter
acquired, that may at any time be or become subject to a security interest or
Lien in favor of Agent, on behalf of itself and Lenders, to secure the
Obligations. "Collateral" shall not include Equipment located on, or Real Estate
constituting, the six premises subject to the master leasing agreement with
Movieplex.
"Collateral Documents" means the Security Agreement, the
Pledge Agreements, the Guaranties, the Mortgages, the Trademark Security
Agreement, and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
"Collection Account" means that certain account of Agent,
account number 000-000-00 in the name of Agent at Bankers Trust Company in New
York, New York ABA No. 021 001 033, or such other account as may be specified in
writing by Agent as the "Collection Account."
A-4
"Commitment Termination Date" means the earliest of (a)
October 31, 2006, (b) the date of termination of Lenders' obligations to make
Advances and to incur Letter of Credit Obligations or permit existing Loans to
remain outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrowers of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of all Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, the aggregate of
such Lender's Revolving Loan Commitment (including without duplication the Swing
Line Lender's Swing Line Commitment as a subset of its Revolving Loan
Commitment) as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Revolving Loan Commitments (including without
duplication the Swing Line Lender's Swing Line Commitment as a subset of its
Revolving Loan Commitment) which aggregate commitment shall be Fifty Million
Dollars ($50,000,000) on the Closing Date, as to each of clauses (a) and (b), as
such Commitments may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.
"Compliance Certificate" has the meaning ascribed to it in
Annex E.
"Concession Agreement" means that certain Concession Supply
Agreement by and between Showtime Concessions Supply Company and Carmike dated
May 1, 2000.
"Confirmation Order" means the order of the Court entered
pursuant to Section 1129 of the Bankruptcy Code, reasonably satisfactory in form
and substance to Agent (specifically including, but not limited to, findings of
fact with respect to extending credit hereunder in good faith for purposes,
among other things, and providing for the effective date of Borrowers' Plan of
Reorganization), together with all extensions, modifications and amendment
thereto, which, among other matters but not by way of limitation authorizes
Borrowers to obtain credit and incur indebtedness.
"Contracts" means all "contracts," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement between Agent and
(i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of any Credit Party, or (iii) a futures commission merchant or clearing house,
as applicable, with respect to commodity accounts and commodity contracts held
by any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant disclaims any security interest in
the applicable financial assets, acknowledges the Lien of Agent, on behalf of
A-5
itself and Lenders, on such financial assets, and agrees to follow the
instructions or entitlement orders of Agent without further consent by the
affected Credit Party.
"Copyright License" means any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.
"Court" means the United States Bankruptcy Court for the
District of Delaware.
"Credit Parties" means each Borrower and each of Carmike's
Subsidiaries.
"Default" means any event that, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section
1.5(d).
"Deposit Accounts" means all "deposit accounts" as such term
is defined in the Code, now or hereafter held in the name of any Credit Party.
"Disbursement Accounts" has the meaning ascribed to it in
Annex C.
"Disclosure Schedules" means the Schedules prepared by
Borrowers and denominated as Disclosure Schedules (1.4) through (6.7) in the
Index to the Agreement.
"Disclosure Statement" means Credit Parties' Amended
Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code filed with
the United States Bankruptcy Court for the District of Delaware, dated November
14, 2001.
"Documents" means all "documents," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"Eastwynn" means Eastwynn Theatres, Inc., an Alabama
corporation.
"EBITDA" means, for any period, the net income of Borrowers
and the Credit Parties for such period plus, to the extent such amount was
deducted in calculating such net income: (a) interest expense; (b) income or
franchise taxes; (c) depreciation expense; (d) amortization expense; (e) all
other non-cash items, extraordinary non-cash items, non-recurring
A-6
and unusual non-cash items and the cumulative effects of changes in accounting
principles reducing such net income, less all non-cash items, extraordinary
non-cash items, nonrecurring and unusual non-cash items and the cumulative
effects of changes in accounting principles increasing such net income, all as
determined on a consolidated basis for Borrowers and the Credit Parties in
conformity with generally accepted accounting principles; (f) up front expenses
resulting from equity offerings, investments, mergers, recapitalizations, option
buyouts, asset dispositions, asset acquisitions, and similar transactions to the
extent such expenses reduce net income; (g) restructuring charges incurred in
the Chapter 11 case reducing net income; (h) non-cash charges arising from the
grant of stock or options to management; and (i) gains or losses on asset
dispositions.
"Environmental Laws" means all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. xx.xx. 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. xx.xx. 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. xx.xx. 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. xx.xx. 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. xx.xx. 2601 et seq.); the Clean Air Act (42
U.S.C. xx.xx. 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
xx.xx. 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. xx.xx.
651 et seq.); and the Safe Drinking Water Act (42 U.S.C. xx.xx. 300(f) et seq.),
and any and all regulations promulgated thereunder, and all analogous state,
local and foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person,
all liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
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"Equipment" means all "equipment," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located
and, in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any
trade or business (whether or not incorporated) that, together with such Credit
Party, are treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section
8.1.
"Excess Cash Flow" means, EBITDA in excess of projected EBITDA
(as set forth in Exhibit E to the Disclosure Statement) for the prior Fiscal
Year.
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"Fair Labor Standards Act" means the Fair Labor Standards Act,
29 U.S.C. ss.201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal
to the weighted average of the rates on overnight Federal funds transactions
among members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth
in Annex G.
"Financial Statements" means the consolidated income
statements, statements of cash flows and balance sheets of Borrowers delivered
in accordance with Section 3.4 and Annex E.
"Fiscal Month" means any of the monthly accounting periods of
Borrowers.
"Fiscal Quarter" means any of the quarterly accounting periods
of Borrowers, ending on March 31, June 30, September 30, and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of
Borrowers ending on December 31 of each year.
"Fixtures" means all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party.
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness that by its terms matures more
than one year from, or is directly or indirectly renewable or extendible at such
Person's option under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one year from the
date of creation thereof, and specifically including Capital Lease Obligations,
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrowers, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons. Solely
for purposes of calculating the ratio of Maximum Funded Debt to EBITDA required
by Section (b) of Annex G, "Funded Debt" shall not include Trade Creditor Debt.
"GAAP" means generally accepted accounting principles in the
United States of America consistently applied, as such term is further defined
in Annex G to the Agreement.
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"GE Capital" means General Electric Capital Corporation, a
Delaware corporation.
"General Intangibles" means all "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real estate, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, certificates of deposit, rights to receive tax refunds and
other payments, rights to receive dividends, distributions, cash, Instruments,
certificated securities, mutual fund shares and other property in respect of or
in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" means as to any Person, any
obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation ("primary
obligation") of any other Person (the "primary obligor") in any manner,
including any obligation or arrangement of such Person to (a) purchase or
repurchase any such primary obligation, (b) advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet condition of the primary obligor, (c)
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, (d) protect the beneficiary of such
arrangement from loss (other than product warranties given in the ordinary
course of business) or (e) indemnify the owner of such primary obligation
against loss in respect thereof. The amount of any Guaranteed
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Indebtedness at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranteed Indebtedness is incurred and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"Guaranties" means, collectively, each Subsidiary Guaranty and
any other guaranty executed by any Guarantor in favor of Agent and Lenders in
respect of the Obligations.
"Guarantors" means each Subsidiary of each Borrower, and each
other Person, if any, that executes a guaranty or other similar agreement in
favor of Agent, for itself and the ratable benefit of Lenders, in connection
with the transactions contemplated by the Agreement and the other Loan
Documents.
"Hazardous Material" means any substance, material or waste
that is regulated by, or forms the basis of liability now or hereafter under,
any Environmental Laws, including any material or substance that is (a) defined
as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, or (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"Hazardous Materials Indemnity Agreement" means that certain
Hazardous Materials Indemnity Agreement, dated as of the Closing Date, by Credit
Parties in favor of Agent.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property, but excluding obligations to trade
creditors incurred in the ordinary course of business that are unsecured and not
overdue by more than 6 months unless being contested in good faith, (b) all
reimbursement and other obligations with respect to letters of credit, bankers'
acceptances and surety bonds, whether or not matured, (c) all obligations
evidenced by notes, bonds, debentures or similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations and the present value (discounted at the Index
Rate as in effect on the inception date of such lease) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including
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accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in
Section 1.13.
"Indemnified Person" has the meaning ascribed to in Section
1.13.
"Index Rate" means, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans posted by at least 75% of the
nation's 30 largest banks" (or, if The Wall Street Journal ceases quoting a base
rate of the type described, the highest per annum rate of interest published by
the Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus 50 basis points per annum.
Each change in any interest rate provided for in the Agreement based upon the
Index Rate shall take effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing
interest by reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, wherever
located, and, in any event, including all promissory notes and other evidences
of indebtedness, other than instruments that constitute, or are a part of a
group of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercompany Notes" has the meaning ascribed to it in Section
6.3.
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of the Closing Date by and among Agent and Second Lien
Creditor Agent and agreed to and acknowledged by Credit Parties, in form and
substance satisfactory to Agent.
"Interest Coverage Ratio" means, with respect to any Person
for any period, the ratio of EBITDA to Interest Expense.
"Interest Expense" means, with respect to any Person for any
fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for the relevant period ended on such date,
including, interest expense with respect to any Funded Debt of such Person and
interest expense for the relevant period that has been capitalized on the
balance sheet of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan,
the first Business Day of each month to occur while such Loan is outstanding,
and (b) as to any LIBOR Loan, the last day of the applicable LIBOR Period
provided that, in addition to the foregoing, each of (x) the date upon which all
of the Commitments have been terminated and the Loans have been paid
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in full and (y) the Commitment Termination Date shall be deemed to be an
"Interest Payment Date" with respect to any interest that has then accrued under
the Agreement.
"Inventory" means all "inventory," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and in any event including inventory, merchandise, goods and other personal
property that are held by or on behalf of any Credit Party for sale or lease or
are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process, finished goods, returned goods, or
materials or supplies of any kind, nature or description used or consumed or to
be used or consumed in such Credit Party's business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded software.
"Investment Property" means all "investment property" as such
term is defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the
signature pages of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include any assignee of
such Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex
B.
"Letter of Credit Obligations" means all outstanding
obligations incurred by Agent and Lenders at the request of Borrower
Representative, whether direct or indirect, contingent or otherwise, due or not
due, in connection with the issuance of Letters of Credit by Agent or another
L/C Issuer or the purchase of a participation as set forth in Annex B with
respect to any Letter of Credit. The amount of such Letter of Credit Obligations
shall equal the maximum amount that may be payable at such time or at any time
thereafter by Agent or Lenders thereupon or pursuant thereto.
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"Letters of Credit" means documentary or standby letters of
credit issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Agent and Lenders have incurred
Letter of Credit Obligations.
"Letter-of-Credit Rights" means "letter-of-credit rights" as
such term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including rights to payment or performance under a letter of credit,
whether or not such Credit Party, as beneficiary, has demanded or is entitled to
demand payment or performance.
"LIBOR Business Day" means a Business Day on which banks in
the City of London are generally open for interbank or foreign exchange
transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each
period commencing on a LIBOR Business Day selected by Borrower Representative
pursuant to the Agreement and ending one, two or three months thereafter, as
selected by Borrower Representative's irrevocable notice to Agent as set forth
in Section 1.5(e); provided, that the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that
is not a LIBOR Business Day, such LIBOR Period shall be extended to the
next succeeding LIBOR Business Day unless the result of such extension
would be to carry such LIBOR Period into another calendar month in
which event such LIBOR Period shall end on the immediately preceding
LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond
the Commitment Termination Date shall end 2 LIBOR Business Days prior
to such date;
(c) any LIBOR Period that begins on the last LIBOR
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
LIBOR Period) shall end on the last LIBOR Business Day of a calendar
month;
(d) Borrower Representative shall select LIBOR Periods so
as not to require a payment or prepayment of any LIBOR Loan during a
LIBOR Period for such Loan; and
(e) Borrower Representative shall select LIBOR Periods so
that there shall be no more than 5 separate LIBOR Loans in existence at
any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States
Dollars for the applicable LIBOR Period that appears on Telerate Page 3750 as of
11:00 a.m. (London time), on the second
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full LIBOR Business Day next preceding the first day of such LIBOR Period
(unless such date is not a Business Day, in which event the next succeeding
Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but
without duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to the
beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board that are
required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from
Telerate News Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable to Agent
and Borrower Representative.
"License" means any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, the Notes, the
Collateral Documents, the Hazardous Materials Indemnity Agreement, the Master
Standby Agreement, the Intercreditor Agreement, and all other agreements,
instruments, documents and certificates identified in the Closing Checklist
executed and delivered to, or in favor of, Agent or any Lenders and including
all other pledges, powers of attorney, consents, assignments, contracts,
notices, and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Credit Party, or any employee of any Credit
Party, and delivered to Agent or any Lender in connection with the Agreement or
the transactions contemplated thereby. Any reference in the Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
"Loans" means the Revolving Loan.
"Margin Stock" has the meaning ascribed to in Section 3.10.
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"Master Standby Agreement" means the Master Agreement for
Standby Letters of Credit among Borrowers, as Applicant(s), and GE Capital, as
issuer to be entered into prior to the issuance of any Letters of Credit.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or financial or other condition
of the Borrowers and Credit Parties taken as a whole, (b) any Borrower's ability
to pay any of the Loans or any of the other Obligations in accordance with the
terms of the Agreement, (c) the Collateral or Agent's Liens, on behalf of itself
and Lenders, on the Collateral or the priority of such Liens, or (d) Agent's or
any Lender's rights and remedies under the Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, any event or
occurrence adverse to one or more Credit Parties which results or could
reasonably be expected to result in costs and/or liabilities or loss of
revenues, individually or in the aggregate, to any Credit Party in any 30-day
period in excess of the $600,000 shall constitute a Material Adverse Effect;
provided, however, that the following shall not constitute a Material Adverse
Effect: (i) non-cash accounting charges required by GAAP following the
effectiveness of the Plan of Reorganization; and (ii) events or occurrences
occurring prior to the effective date of the Plan of Reorganization, and claims
arising in connection therewith, to the extent that such claims are resolved by
the Plan of Reorganization.
"Maximum Amount" means, as of any date of determination, an
amount equal to the Revolving Loan Commitment of all Lenders as of that date.
"Mortgaged Properties" has the meaning assigned to it in Annex
D.
"Movieplex" means Movieplex Realty Leasing, L.L.C.
"Mortgages" means each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents delivered by any Credit Party to Agent
on behalf of itself and Lenders with respect to the Mortgaged Properties, all in
form and substance reasonably satisfactory to Agent.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate
is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"MSI" means Military Services, Inc., a Delaware corporation.
"Net Worth" means, with respect to any Person as of any date
of determination, the book value of the assets of such Person, minus the sum of
(a) reserves applicable thereto, and (b) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes and the Swing
Line Note.
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"Notice of Conversion/Continuation" has the meaning ascribed
to it in Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed
to it in Section 1.1(a).
"Obligations" means all loans, advances, debts, liabilities
and obligations for the performance of covenants, tasks or duties or for payment
of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.
"Patent License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right with respect
to any invention on which a Patent is in existence.
"Patents" means all of the following in which any Credit Party
now holds or hereafter acquires any interest: (a) all letters patent of the
United States or of any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of
ERISA.
"Permitted Encumbrances" means the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet due and
payable or which are being contested in accordance with Section 5.2(b); (b)
pledges or deposits of money securing statutory obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business, so long as such Liens attach only to Inventory; (f)
deposits securing, or in lieu of, surety, appeal or customs bonds in proceedings
to which any Credit Party is a party; (g) any attachment or judgment lien not
constituting an Event of Default under Section 8.1(j); (h)
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zoning restrictions, easements, licenses, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders; (j) Liens subordinated in favor
of Agent pursuant to the Intercreditor Agreement, (k) Liens in favor of
Movieplex with respect to the six properties and Equipment located thereon
identified as subject to a master leasing agreement with Movieplex on Disclosure
Schedule (3.6)), and (l) Liens expressly permitted under clauses (b) and (c) of
Section 6.7 of the Agreement and (m) Liens in favor of Xxxxxxx Properties
Management, Inc. or any of its Affiliates so long as such Liens attach only to
Equipment and Fixtures located at or on those locations leased by one or more
Credit Parties from Xxxxxxx Properties Management, Inc. or any of its Affiliates
and a valid leasehold mortgage for such location has been filed in favor of
Agent with respect thereto.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof).
"Plan" means, at any time, an "employee benefit plan", as
defined in Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to or has
maintained, contributed to or had an obligation to contribute to at any time
within the past 7 years on behalf of participants who are or were employed by
any Credit Party or ERISA Affiliate.
"Plan of Reorganization" means that certain Amended Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code (as hereinafter
defined), including, without limitation, all supplements, exhibits, appendices
and schedules thereto, as described in the Confirmation Order.
"Pledge Agreements" means, collectively, the Carmike Pledge
Agreement and the and any pledge agreements entered into after the Closing Date
by any Credit Party (as required by the Agreement or any other Loan Document).
"Post-Confirmation Credit Agreement" means that certain
Post-Confirmation Credit Agreement (as defined in the Plan of Reorganization)
evidencing a term loan facility extended to the Credit Parties by certain
lenders party thereto, together with all other loan documents delivered in
connection therewith, which agreement, among other things, supersedes and
replaces those certain (a) Amended and Restated Credit Agreement among Carmike,
the banks party thereto and the Second Lien Creditor Agent, dated as of January
29, 1999 as amended March 31, 2000 and (b) Term Loan Credit Agreement, among
Carmike, the banks party thereto, Second Lien Creditor Agent, Xxxxxxx Xxxxx
Credit Partners, L.P., as syndication agent and First Union National Bank, as
documentation agent , dated as of February 25, 1999, as amended July 13, 1999
and further amended March 31, 2000.
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"Post-Confirmation Credit Agreement Debt" means the
Indebtedness of Credit Parties evidenced by the Post-Confirmation Credit
Agreement Documents.
"Post-Confirmation Credit Agreement Documents" means the
Post-Confirmation Credit Agreement and all "Loan Documents" as defined therein.
"Proceeds" means "proceeds," as such term is defined in the
Code, including (a) any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"Pro Forma" means the unaudited consolidated balance sheet,
income statement, and cash flows of Borrowers and their Subsidiaries after
giving pro forma effect to the Related Transactions.
"Projections" means Borrowers' forecasted consolidated: (a)
balance sheets; (b) profit and loss statements; (c) cash flow statements; and
(d) capitalization statements, all prepared on a Subsidiary by Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the
historical Financial Statements of the Borrowers, together with appropriate
supporting details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to
any Lender, (a) with respect to all Loans prior to the Commitment Termination
Date, the percentage obtained by dividing (i) the aggregate Commitments of that
Lender by (ii) the aggregate Commitments of all Lenders, and (b) with respect to
all Loans on and after the Commitment Termination Date, the percentage obtained
by dividing (i) the aggregate outstanding principal balance of the Loans held by
that Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of
any Lender and, with respect to any Lender that is an investment fund that
invests in commercial loans, any other
A-19
investment fund that invests in commercial loans and that is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor, and (b) any commercial bank, savings and loan association or
savings bank or any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act of 1933) which extends credit or buys
loans as one of its businesses, including insurance companies, mutual funds,
lease financing companies and commercial finance companies, in each case, which
has a rating of BBB or higher from S&P and a rating of Baa2 or higher from
Xxxxx'x at the date that it becomes a Lender and which, through its applicable
lending office, is capable of lending to Borrowers without the imposition of any
withholding or similar taxes; provided that no Person determined by Agent to be
acting in the capacity of a vulture fund or distressed debt purchaser shall be a
Qualified Assignee, and no Person or Affiliate of such Person (other than a
Person that is already a Lender) holding Subordinated Debt or Stock issued by
any Credit Party, shall be a Qualified Assignee.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Refinancing" means the partial repayment by Borrowers of the
obligations owing to the Second Lien Creditor Agent and other banks under the
Post-Confirmation Credit Agreement on the Closing Date.
"Related Transactions" means the initial borrowing under the
Revolving Loan on the Closing Date, the Refinancing, the issuance of the
Subordinated Debt Documents and the Post-Confirmation Credit Agreement
Documents, the payment of all fees, costs and expenses associated with all of
the foregoing and the execution and delivery of all of the Related Transactions
Documents.
"Related Transactions Documents" means the Loan Documents, the
Subordinated Debt Documents, the Post-Confirmation Credit Agreement Documents
and Intercreditor Agreement, and all other agreements or instruments executed in
connection with the Related Transactions.
"Release" means any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"Requisite Lenders" means Lenders having (a) more than 66 2/3%
of the Commitments of all Lenders, or (b) if the Commitments have been
terminated, more than 66 2/3% of the aggregate outstanding amount of all Loans.
"Restricted Payment" means, with respect to any Credit Party
(a) the declaration or payment of any dividend or the incurrence of any
liability to make any other payment or distribution of cash or other property or
assets in respect of Stock; (b) any payment on account of the purchase,
redemption, defeasance, sinking fund or other retirement of such Credit Party's
Stock or any other payment or distribution made in respect thereof, either
directly or indirectly;
A-20
(c) any payment or prepayment of principal of, premium, if any, or interest,
fees or other charges on or with respect to, and any redemption, purchase,
retirement, defeasance, sinking fund or similar payment and any claim for
rescission with respect to, any Subordinated Debt or Post-Confirmation Credit
Agreement Debt; (d) any payment made to redeem, purchase, repurchase or retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire Stock of such Credit Party now or hereafter outstanding; (e) any
payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any shares of such Credit
Party's Stock or of a claim for reimbursement, indemnification or contribution
arising out of or related to any such claim for damages or rescission; (f) any
payment, loan, contribution, or other transfer of funds or other property to any
Stockholder of such Credit Party other than payment of compensation in the
ordinary course of business to Stockholders who are employees of such Person;
and (g) any payment of management fees (or other fees of a similar nature) by
such Credit Party to any Stockholder of such Credit Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a)(i).
"Revolving Lenders" means, as of any date of determination,
Lenders having a Revolving Loan Commitment.
"Revolving Loan" means, at any time, the sum of (i) the
aggregate amount of Revolving Credit Advances outstanding to Borrower plus (ii)
the aggregate Letter of Credit Obligations incurred on behalf of Borrower.
Unless the context otherwise requires, references to the outstanding principal
balance of the Revolving Loan shall include the outstanding balance of Letter of
Credit Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances or incur
Letter of Credit Obligations as set forth on Annex J to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances or incur Letter of Credit Obligations, which aggregate commitment shall
be Fifty Million Dollars ($50,000,000) on the Closing Date, as such amount may
be adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section
1.1(a)(ii).
"Second Lien Creditor Agent" means Bank of New York Asset
Solutions LLC, a Delaware limited liability company, as administrative agent
under the Post-Confirmation Credit Agreement Documents, and any successor or
permitted assigns thereto.
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"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Software" means all "software" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person; (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured; (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that can
be reasonably be expected to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or
limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder
of Stock of such Person.
"Subordinated Debt" means the Indebtedness of any Credit Party
evidenced by the Subordinated Debt Documents and any other Indebtedness of any
Credit Party subordinated to the Obligations in a manner and form satisfactory
to Agent and Lenders in their sole discretion, as to right and time of payment
and as to any other rights and remedies thereunder.
"Subordinated Debt Documents" means, collectively, the
Subordinated Notes and that certain Indenture, dated as of the Closing Date,
delivered by one or more Credit Parties in favor of Wilmington Trust Company, as
Trustee.
"Subordinated Notes" means those certain unsecured 10 3/8%
Senior Subordinated Notes due 2009 issued by Carmike as described in the Plan of
Reorganization.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock
A-22
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned legally or beneficially by such Person or one or
more Subsidiaries of such Person, or with respect to which any such Person has
the right to vote or designate the vote of 50% or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than 50% or of which
any such Person is a general partner or may exercise the powers of a general
partner. Unless the context otherwise requires, each reference to a Subsidiary
shall be a reference to a Subsidiary of a Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty of even
date herewith executed by each Subsidiary of Carmike in favor of Agent, on
behalf of itself and Lenders.
"Supporting Obligations" means all "supporting obligations" as
such term is defined in the Code, including letters of credit and guaranties
issued in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"Swing Line Advance" has the meaning ascribed to it in Section
1.1(c)(i).
"Swing Line Availability" has the meaning ascribed to it in
Section 1.1(c)(i).
"Swing Line Commitment" means, as to the Swing Line Lender,
the commitment of the Swing Line Lender to make Swing Line Advances as set forth
on Annex J to the Agreement, which commitment constitutes a subfacility of the
Revolving Loan Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means, as the context may require, at any
time, the aggregate amount of Swing Line Advances outstanding to any Borrower or
to all Borrowers.
"Swing Line Note" has the meaning ascribed to it in Section
1.1(c)(ii).
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"Title IV Plan" means a Pension Plan (other than a
Multiemployer Plan), that is covered by Title IV of ERISA, and that any Credit
Party or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
"Termination Date" means the date on which (a) the Revolving
Loans have been indefeasibly repaid in full, (b) all other Obligations under the
Agreement and the other Loan Documents have been completely discharged (c) all
Letter of Credit Obligations have been cash
A-23
collateralized, canceled or backed by standby letters of credit in accordance
with Annex B, and (d) none of Borrowers shall have any further right to borrow
any monies under the Agreement.
"Trade Creditor Debt" means the "Claims" under Class 5
described in the Plan of Reorganization which are "Allowed Claims" (as those
terms are defined in the Plan of Reorganization) pursuant to the Plan of
Reorganization.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party.
"Trademark License" means rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right to use
any Trademark.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of 5 years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(i) of
ERISA.
"Wooden Nickel" means Wooden Nickel Pub, Inc., a Delaware
corporation.
Rules of construction with respect to accounting terms used in
the Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented,
A-24
and not to any particular section, subsection or clause contained in the
Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; the word "or" is not exclusive; references to Persons include their
respective successors and assigns (to the extent and only to the extent
permitted by the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations. Whenever any provision in any Loan
Document refers to the knowledge (or an analogous phrase) of any Credit Party,
such words are intended to signify that such Credit Party has actual knowledge
or awareness of a particular fact or circumstance or that such Credit Party, if
it had exercised reasonable diligence, would have known or been aware of such
fact or circumstance.
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ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the
Agreement, Agent and Revolving Lenders agree to incur, from time to time prior
to the Commitment Termination Date, upon the request of Borrower Representative
on behalf of the applicable Borrower and for such Borrower's account, Letter of
Credit Obligations by causing Letters of Credit to be issued by GE Capital or a
Subsidiary thereof or a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C Issuer") for such
Borrower's account and guaranteed by Agent; provided, that if the L/C Issuer is
a Revolving Lender, then such Letters of Credit shall not be guaranteed by Agent
but rather each Revolving Lender shall, subject to the terms and conditions
hereinafter set forth, purchase (or be deemed to have purchased) risk
participations in all such Letters of Credit issued with the written consent of
Agent, as more fully described in paragraph (b)(ii) below. The aggregate amount
of all such Letter of Credit Obligations shall not at any time exceed the lesser
of (i) Five Million Dollars ($5,000,000) (the "L/C Sublimit") and (ii) the
Maximum Amount less the aggregate outstanding principal balance of the Revolving
Credit Advances. No such Letter of Credit shall have an expiry date that is more
than one year following the date of issuance thereof, unless otherwise
determined by the Agent, in its sole discretion, and neither Agent nor Revolving
Lenders shall be under any obligation to incur Letter of Credit Obligations in
respect of, or purchase risk participations in, any Letter of Credit having an
expiry date that is later than the Commitment Termination Date.
(b) (i) Advances Automatic; Participations. In the
event that Agent or any Revolving Lender shall make any payment on or pursuant
to any Letter of Credit Obligation, such payment shall then be deemed
automatically to constitute a Revolving Credit Advance to the applicable
Borrower under Section 1.1(a) of the Agreement regardless of whether a Default
or Event of Default has occurred and is continuing and notwithstanding any
Borrower's failure to satisfy the conditions precedent set forth in Section 2,
and each Revolving Lender shall be obligated to pay its Pro Rata Share thereof
in accordance with the Agreement. The failure of any Revolving Lender to make
available to Agent for Agent's own account its Pro Rata Share of any such
Revolving Credit Advance or payment by Agent under or in respect of a Letter of
Credit shall not relieve any other Revolving Lender of its obligation hereunder
to make available to Agent its Pro Rata Share thereof, but no Revolving Lender
shall be responsible for the failure of any other Revolving Lender to make
available such other Revolving Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for any
Borrower to incur Revolving Credit Advances as contemplated by paragraph (b)(i)
above because of an Event of Default described in Sections 8.1(h) or (i) or
otherwise or if it shall be illegal or unlawful for any Revolving Lender to be
deemed to have assumed a ratable share of the reimbursement obligations owed to
an L/C Issuer, or if the L/C Issuer is a Revolving Lender, then (A) immediately
and without further action whatsoever, each Revolving Lender shall be deemed to
B-1
have irrevocably and unconditionally purchased from Agent (or such L/C Issuer,
as the case may be) an undivided interest and participation equal to such
Revolving Lender's Pro Rata Share (based on the Revolving Loan Commitments) of
the Letter of Credit Obligations in respect of all Letters of Credit then
outstanding and (B) thereafter, immediately upon issuance of any Letter of
Credit, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation in such Revolving Lender's Pro Rata Share
(based on the Revolving Loan Commitments) of the Letter of Credit Obligations
with respect to such Letter of Credit on the date of such issuance. Each
Revolving Lender shall fund its participation in all payments or disbursements
made under the Letters of Credit in the same manner as provided in the Agreement
with respect to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrowers are required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, each Borrower will pay to Agent for the
ratable benefit of itself and Revolving Lenders cash or cash equivalents
acceptable to Agent ("Cash Equivalents") in an amount equal to 105% of the
maximum amount then available to be drawn under each applicable Letter of Credit
outstanding for the benefit of such Borrower. Such funds or Cash Equivalents
shall be held by Agent in a cash collateral account (the "Cash Collateral
Account") maintained at a bank or financial institution acceptable to Agent. The
Cash Collateral Account shall be in the name of the applicable Borrower and
shall be pledged to, and subject to the control of, Agent, for the benefit of
Agent and Lenders, in a manner satisfactory to Agent. Each Borrower hereby
pledges and grants to Agent, on behalf of itself and Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due. The Agreement, including this Annex B,
shall constitute a security agreement under applicable law.
(ii) If any Letter of Credit Obligations, whether
or not then due and payable, shall for any reason be outstanding on the
Commitment Termination Date, Borrowers shall either (A) provide cash collateral
therefor in the manner described above, or (B) cause all such Letters of Credit
and guaranties thereof, if any, to be canceled and returned, or (C) deliver a
stand-by letter (or letters) of credit in guaranty of such Letter of Credit
Obligations, which stand-by letter (or letters) of credit shall be of like tenor
and duration (plus 30 additional days) as, and in an amount equal to 105% of,
the aggregate maximum amount then available to be drawn under, the Letters of
Credit to which such outstanding Letter of Credit Obligations relate and shall
be issued by a Person, and shall be subject to such terms and conditions, as are
be satisfactory to Agent in its sole discretion.
(iii) From time to time after funds are deposited
in the Cash Collateral Account by any Borrower, whether before or after the
Commitment Termination Date, Agent may apply such funds or Cash Equivalents then
held in the Cash Collateral Account to the payment of any amounts, and in such
order as Agent may elect, as shall be or shall become due and payable by such
Borrower to Agent and Lenders with respect to such Letter of Credit
B-2
Obligations of such Borrower and, upon the satisfaction in full of all Letter of
Credit Obligations of such Borrower, to any other Obligations of any Borrower
then due and payable.
(iv) No Borrower nor any Person claiming on
behalf of or through any Borrower shall have any right to withdraw any of the
funds or Cash Equivalents held in the Cash Collateral Account, except that upon
the termination of all Letter of Credit Obligations and the payment of all
amounts payable by Borrowers to Agent and Lenders in respect thereof, any funds
remaining in the Cash Collateral Account shall be applied to other Obligations
then due and owing and upon payment in full of such Obligations, any remaining
amount shall be paid to Borrowers or as otherwise required by law. Any interest
earned on deposits in the Cash Collateral Account not applied to the Obligations
upon termination of all Letter of Credit Obligations shall be for the account of
Borrowers.
(d) Fees and Expenses. Borrowers agree to pay to Agent
for the benefit of Revolving Lenders, as compensation to such Lenders for Letter
of Credit Obligations incurred hereunder, (i) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (ii)
for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "Letter of Credit Fee") in an amount equal to the
Applicable L/C Margin from time to time in effect multiplied by the maximum
amount available from time to time to be drawn under the applicable Letter of
Credit. Such fee shall be paid to Agent for the benefit of the Revolving Lenders
in arrears, on the first Business Day of each month and on the Commitment
Termination Date. In addition, Borrowers shall pay to any L/C Issuer, on demand,
such customary fees (including all per annum fees), charges and expenses of such
L/C Issuer in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or otherwise payable pursuant to
the application and related documentation under which such Letter of Credit is
issued.
(e) Request for Incurrence of Letter of Credit
Obligations. Borrower Representative shall give Agent at least 2 Business Days'
prior written notice requesting the incurrence of any Letter of Credit
Obligation. The notice shall be accompanied by the form of the Letter of Credit
(which shall be acceptable to the L/C Issuer) and a completed Application for
Standby Letter of Credit. Notwithstanding anything contained herein to the
contrary, Letter of Credit applications by Borrower Representative and approvals
by Agent and the L/C Issuer may be made and transmitted pursuant to electronic
codes and security measures mutually agreed upon and established by and among
Borrower Representative, Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrowers to
reimburse Agent and Revolving Lenders for payments made with respect to any
Letter of Credit Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
Borrowers and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following:
(i) any lack of validity or enforceability of
any Letter of Credit or the Agreement or the other Loan
Documents or any other agreement;
B-3
(ii) the existence of any claim, setoff, defense
or other right that any Borrower or any of their respective
Affiliates or any Lender may at any time have against a
beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in
connection with the Agreement, the Letter of Credit, the
transactions contemplated herein or therein or any unrelated
transaction (including any underlying transaction between any
Borrower or any of their respective Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Agent (except as otherwise
expressly provided in paragraph (g)(ii)(C) below) or any L/C
Issuer under any Letter of Credit or guaranty thereof against
presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of
Credit or such guaranty;
(v) any other circumstance or event whatsoever,
that is similar to any of the foregoing; or
(vi) the fact that a Default or an Event of
Default has occurred and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere
provided in the Agreement, Borrowers hereby agree to pay and to protect,
indemnify, and save harmless Agent and each Lender from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of internal counsel)
that Agent or any Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or guaranty thereof, or
(B) the failure of Agent or any Lender seeking indemnification or of any L/C
Issuer to honor a demand for payment under any Letter of Credit or guaranty
thereof as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, in
each case other than to the extent solely as a result of the gross negligence or
willful misconduct of Agent or such Lender (as finally determined by a court of
competent jurisdiction).
(ii) As between Agent and any Lender and
Borrowers, Borrowers assume all risks of the acts and omissions of, or misuse of
any Letter of Credit by, beneficiaries of any Letter of Credit. In furtherance
and not in limitation of the foregoing, to the fullest extent permitted by law,
neither Agent nor any Lender shall be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if it should in fact
B-4
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (B) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, that may prove
to be invalid or ineffective for any reason; (C) failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit; provided, that in the case of any payment
by Agent under any Letter of Credit or guaranty thereof, Agent shall be liable
to the extent such payment was made solely as a result of its gross negligence
or willful misconduct (as finally determined by a court of competent
jurisdiction) in determining that the demand for payment under such Letter of
Credit or guaranty thereof complies on its face with any applicable requirements
for a demand for payment under such Letter of Credit or guaranty thereof; (D)
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they may
be in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order to make
a payment under any Letter of Credit or guaranty thereof or of the proceeds
thereof; (G) the credit of the proceeds of any drawing under any Letter of
Credit or guaranty thereof; and (H) any consequences arising from causes beyond
the control of Agent or any Lender. None of the above shall affect, impair, or
prevent the vesting of any of Agent's or any Lender's rights or powers hereunder
or under the Agreement.
(iii) Nothing contained herein shall be deemed to
limit or to expand any waivers, covenants or indemnities made by Borrowers in
favor of any L/C Issuer in any letter of credit application, reimbursement
agreement or similar document, instrument or agreement between or among
Borrowers and such L/C Issuer including a Master Standby Agreement entered into
with Agent.
B-5
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Each Borrower shall, and shall cause its Subsidiaries to,
establish and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the
Termination Date, each Borrower shall (i) establish deposit accounts ("Deposit
Accounts") at one or more of the banks set forth in Disclosure Schedule (3.19),
and (ii) deposit and cause its Subsidiaries to deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all cash, checks, drafts or other similar items of payment
relating to or constituting payments made in respect of any and all Collateral
into one or more Deposit Accounts in such Borrower's name or any such
Subsidiary's name and at a bank identified in Disclosure Schedule (3.19) (each,
a "Relationship Bank"). On or before the Closing Date, the Borrowers shall have
established a concentration account in the name of Carmike (each a "Blocked
Account" and collectively, the "Blocked Accounts") at the bank or banks that
shall be designated as the Blocked Account bank for the Borrowers in Disclosure
Schedule (3.19) (each a "Blocked Account Bank" and collectively, the "Blocked
Account Banks"), which bank(s) shall be reasonably satisfactory to Agent.
Borrowers shall cause all cash, checks, drafts or other similar items of payment
relating to or constituting payments made in respect of any and all Collateral
in the Deposit Accounts to be forwarded by the Relationship Bank, not less
frequently than every third Business Day and in any event, not less frequently
than twice weekly, to a Blocked Account.
(b) Each Borrower may maintain, in its name, an account
(each a "Disbursement Account" and collectively, the "Disbursement Accounts") at
a bank reasonably acceptable to Agent into which Agent shall, from time to time,
deposit proceeds of Revolving Credit Advances made to such Borrower pursuant to
Section 1.1 for use by such Borrower solely in accordance with the provisions of
Section 1.4.
(c) On or before the Closing Date (or such later date as
Agent shall consent to in writing), each Blocked Account Bank, and each bank
where a Disbursement Account is maintained, shall have entered into tri-party
blocked account agreements with Agent, for the benefit of itself and Lenders,
and the applicable Borrower and Subsidiaries thereof, as applicable, in form and
substance reasonably acceptable to Agent, which shall become operative on or
prior to the Closing Date. Each such blocked account agreement shall provide,
among other things, that (i) all items of payment deposited in such account and
proceeds thereof deposited in the applicable Blocked Account are held by such
bank as agent or bailee-in-possession for Agent, on behalf of itself and
Lenders, (ii) the bank executing such agreement has no rights of setoff or
recoupment or any other claim against such account, as the case may be, other
than for payment of its service fees and other charges directly related to the
administration of such account and for
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returned checks or other items of payment, and (iii) from and after the Closing
Date (A) with respect to banks at which a Blocked Account is maintained, such
bank agrees, from and after the receipt of a notice (an "Activation Notice")
from Agent (which Activation Notice may be given by Agent at any time at which
(1) a Default or an Event of Default has occurred and is continuing, (2) Agent
reasonably believes based upon information available to it that a Default or an
Event of Default is likely to occur; (3) Agent reasonably believes that an event
or circumstance that is likely to have a Material Adverse Effect has occurred,
or (4) Agent reasonably has grounds to question the integrity of any Borrower's
Cash Management Systems or any Borrower's compliance with the provisions of this
Annex C or any other provisions of the Loan Documents to the extent related to
such Cash Management Systems (any of the foregoing being referred to herein as
an "Activation Event")), to forward daily all amounts in each Blocked Account
into the Collection Account. From and after the date Agent has delivered an
Activation Notice to any bank with respect to any Blocked Account(s), no
Borrower shall, or shall cause or permit any Subsidiary thereof to, accumulate
or maintain cash in Disbursement Accounts or payroll accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date and amounts necessary to meet minimum balance requirements.
(d) So long as no Default or Event of Default has
occurred and is continuing, Borrowers may amend Disclosure Schedule (3.19) to
add or replace a Relationship Bank or Blocked Account or to replace any
Disbursement Account; provided, that (i) Agent shall have consented in writing
in advance to the opening of such account with the relevant bank and (ii) prior
to the time of the opening of such account, the applicable Borrower or its
Subsidiaries, as applicable, and such bank shall have executed and delivered to
Agent a tri-party blocked account agreement, in form and substance reasonably
satisfactory to Agent. Borrowers shall close any of their accounts (and
establish replacement accounts in accordance with the foregoing sentence)
promptly and in any event within 30 days following notice from Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Agent's reasonable judgment, or as promptly as practicable and in any event
within 60 days following notice from Agent that the operating performance, funds
transfer or availability procedures or performance with respect to accounts of
the bank holding such accounts or Agent's liability under any tri-party blocked
account agreement with such bank is no longer acceptable in Agent's reasonable
judgment.
(e) The Blocked Accounts and the Disbursement Accounts
shall be cash collateral accounts, with all cash, checks and other similar items
of payment in such accounts securing payment of the Loans and all other
Obligations, and in which each Borrower and each Subsidiary thereof shall have
granted a Lien to Agent, on behalf of itself and Lenders, pursuant to the
Security Agreement.
(f) All amounts deposited in the Collection Account shall
be deemed received by Agent in accordance with Section 1.10 and shall be applied
(and allocated) by Agent in accordance with Section 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Each Borrower shall and shall cause its Affiliates,
officers, employees, agents, directors or other Persons acting for or in concert
with such Borrower (each a "Related Person") to (i) hold in trust for Agent, for
the benefit of itself and Lenders, all checks, cash and
C-2
other items of payment received by such Borrower or any such Related Person, and
(ii) within 1 Business Day after receipt by such Borrower or any such Related
Person of any checks, cash or other items of payment, deposit the same into a
Blocked Account of such Borrower. Each Borrower and each Related Person thereof
acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral. All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly
into the applicable Blocked Accounts.
C-3
ANNEX D (SECTION 2.1(A))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form
and substance satisfactory to Agent.
B. Revolving Notes and Swing Line Notes. Duly executed
originals of the Revolving Notes and Swing Line Notes for each applicable
Lender, dated the Closing Date.
C. Security Agreement. Duly executed originals of the
Security Agreement, dated the Closing Date, and all instruments, documents and
agreements executed pursuant thereto, including duly executed powers of attorney
from each Credit Party in favor of Agent.
D. Insurance. Satisfactory evidence that the insurance
policies required by Section 5.4 are in full force and effect, together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent
(for the benefit of itself and Lenders) has a valid and perfected first priority
security interest in the Collateral, including (i) such documents duly executed
by each Credit Party (including financing statements under the Code and other
applicable documents under the laws of any jurisdiction with respect to the
perfection of Liens) as Agent may request in order to perfect its security
interests in the Collateral and (ii) copies of Code search reports listing all
effective financing statements that name any Credit Party as debtor, together
with copies of such financing statements, none of which shall cover the
Collateral, except for those relating to the Post-Confirmation Credit Agreement
and subject to the Intercreditor Agreement.
(b) Evidence satisfactory to Agent, including
copies, of all UCC-1 and other financing statements filed in favor of any Credit
Party with respect to each location, if any, at which Inventory may be
consigned.
(c) Control Letters from (i) all issuers of
uncertificated securities and financial assets held by each Borrower, (ii) all
securities intermediaries with respect to all securities accounts and securities
entitlements of each Borrower, and (iii) all futures commission agents and
clearing houses with respect to all commodities contracts and commodities
accounts held by any Borrower.
D-1
F. Intellectual Property Security Agreements. Duly
executed originals of the Trademark Security Agreement, dated the Closing Date
and signed by each Credit Party which owns Trademarks in form and substance
reasonably satisfactory to Agent, together with all instruments, documents and
agreements executed pursuant thereto.
G. Subsidiary Guaranties. Guaranties executed by and
each direct and indirect Subsidiary of Carmike that is not a Borrower in favor
of Agent, for the benefit of Lenders.
H. Initial Notice of Revolving Credit Advance. Duly
executed originals of a Notice of Revolving Credit Advance, dated the Closing
Date, with respect to the initial Revolving Credit Advance to be requested by
Borrower Representative on the Closing Date.
I. Letter of Direction. Duly executed originals of a
letter of direction from Borrower Representative addressed to Agent, on behalf
of itself and Lenders, with respect to the disbursement on the Closing Date of
the proceeds of the initial Revolving Credit Advance.
J. Cash Management System; Blocked Account Agreements.
Evidence satisfactory to Agent that, as of the Closing Date, Cash Management
Systems complying with Annex C to the Agreement have been established and are
currently being maintained in the manner set forth in such Annex C, together
with copies of duly executed tri-party blocked account and lock box agreements,
reasonably satisfactory to Agent, with the banks as required by Annex C.
K. Charter and Good Standing. For each Credit Party,
such Person's (a) charter and all amendments thereto, (b) good standing
certificates (including verification of tax status) in its state of
incorporation and (c) good standing certificates (including verification of tax
status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Closing Date and certified by the applicable Secretary of State or other
authorized Governmental Authority.
L. Bylaws and Resolutions. For each Credit Party, (a)
such Person's bylaws, together with all amendments thereto and (b) resolutions
of such Person's Board of Directors, approving and authorizing the execution,
delivery and performance of the Loan Documents to which such Person is a party
and the transactions to be consummated in connection therewith, each certified
as of the Closing Date by such Person's corporate secretary or an assistant
secretary as being in full force and effect without any modification or
amendment.
M. Incumbency Certificates. For each Credit Party,
signature and incumbency certificates of the officers of each such Person
executing any of the Loan Documents, certified as of the Closing Date by such
Person's corporate secretary or an assistant secretary as being true, accurate,
correct and complete.
N. Opinions of Counsel. Duly executed originals of
opinions of Xxxxxxxx Xxxxxxx and Xxxx, Gotshal & Xxxxxx, counsel for the Credit
Parties, together with any local counsel opinions reasonably requested by Agent,
each in form and substance reasonably
D-2
satisfactory to Agent and its counsel, dated the Closing Date, and each
accompanied by a letter addressed to such counsel from the Credit Parties,
authorizing and directing such counsel to address its opinion to Agent, on
behalf of Lenders, and to include in such opinion an express statement to the
effect that Agent and Lenders are authorized to rely on such opinion.
O. Pledge Agreements. Duly executed originals of each of
the Pledge Agreements accompanied by (as applicable) (a) share certificates
representing all of the outstanding Stock being pledged pursuant to such Pledge
Agreement and stock powers for such share certificates executed in blank and (b)
the original Intercompany Notes and other instruments evidencing Indebtedness
being pledged pursuant to such Pledge Agreement, duly endorsed in blank.
P. Accountants' Letters. A letter from the Credit
Parties to their independent auditors authorizing the independent certified
public accountants of the Credit Parties to communicate with Agent and Lenders
in accordance with Section 4.2.
Q. Appointment of Agent for Service. An appointment on
behalf of all Credit Parties by Carmike of CT Corporation as agent for service
of process.
R. [Intentionally Omitted]
S. [Intentionally Omitted]
T. Officer's Certificate. Agent shall have received duly
executed originals of a certificate of the [Chief Executive Officer and Chief
Financial Officer] of each Borrower, dated the Closing Date, stating that, since
December 31, 2000 (a) no event or condition has occurred or is existing which
could reasonably be expected to have a Material Adverse Effect; (b) there has
been no material adverse change in the industry in which any Borrower operates;
(c) no Litigation has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by the
Agreement and the other Loan Documents; (d) there have been no Restricted
Payments made by any Credit Party; and (e) there has been no material increase
in liabilities, liquidated or contingent, and no material decrease in assets of
any Borrower or any of its Subsidiaries.
U. [Intentionally Omitted]
V. Mortgages. Except with respect to the leasehold Real
Estate (with respect to which Borrowers agree to use best efforts to obtain
Mortgages and deliver the following) and the six properties subject to a master
leasing agreement with Movieplex (for which no Mortgage will be required),
Mortgages covering all of the Real Estate (the "Mortgaged Properties") together
with: (a) title insurance policies, as-built surveys, zoning letters and
certificates of occupancy, in each case reasonably satisfactory in form and
substance to Agent, in its sole discretion; (b) evidence that counterparts of
the Mortgages have been recorded in all places to the extent necessary or
desirable, in the judgment of Agent, to create a valid and enforceable first
priority lien (subject to Permitted Encumbrances) on each Mortgaged Property in
favor of Agent for the benefit of itself and Lenders (or in favor of such other
trustee as may be required or
D-3
desired under local law); and (c) an opinion of counsel in each state in which
any Mortgaged Property is located in form and substance and from counsel
reasonably satisfactory to Agent.
W. Intercreditor Agreement. Agent and Lenders shall have
received the Intercreditor Agreement, in form and substance reasonably
satisfactory to Agent, in its sole discretion.
X. Environmental Reports. Agent shall have received
Phase I Environmental Site Assessment Reports, consistent with American Society
for Testing and Materials (ASTM) Standard E 1527-94 and applicable state
requirements, on all of the Real Estate, dated no more than 6 months prior to
the Closing Date, prepared by environmental engineers reasonably satisfactory to
Agent, all in form and substance reasonably satisfactory to Agent, in its sole
discretion; and Agent shall have further received such environmental review and
audit reports, including Phase II reports, with respect to the Real Estate of
any Credit Party as Agent shall have requested, and Agent shall be satisfied, in
its sole discretion, with the contents of all such environmental reports. Agent
shall have received letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
Y. Audited Financials; Financial Condition. Agent shall
have received the Financial Statements, Projections and other materials set
forth in Section 3.4, certified by Borrower Representative's Chief Financial
Officer, in each case in form and substance reasonably satisfactory to Agent,
and Agent shall be satisfied, in its sole discretion, with all of the foregoing.
Agent shall have further received a certificate of the Chief Executive Officer
and/or the Chief Financial Officer of each Borrower, based on such Pro Forma and
Projections, to the effect that (a) such Borrower will be Solvent upon the
consummation of the transactions contemplated herein; (b) the Pro Forma fairly
presents the financial condition of such Borrower as of the date thereof after
giving effect to the transactions contemplated by the Loan Documents; (c) the
Projections are based upon estimates and assumptions stated therein, all of
which such Borrower believes to be reasonable and fair in light of current
conditions and current facts known to such Borrower and, as of the Closing Date,
reflect such Borrower's good faith and reasonable estimates of its future
financial performance and of the other information projected therein for the
period set forth therein (except to the extent that actual results for the year
ending December 31, 2001 varied from those set forth in the Projections).
AA. Confirmation Order. Agent shall have received
evidence of the entry of the Confirmation Order.
BB. Other Documents. Such other certificates, documents
and agreements respecting any Credit Party as Agent may, in its reasonable
discretion, request.
D-4
ANNEX E (SECTION 4.1(A))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrowers shall deliver or cause to be delivered to Agent or
to Agent and Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within 30
days after the end of each Fiscal Month, financial information regarding
Borrowers and their Subsidiaries, certified by the Chief Financial Officer of
Carmike, including monthly balance sheet, cash flow statement reflecting
month-end and year-to-date totals, income statement comparing actual results for
such month to the results for the same month during the prior year and comparing
actual results for the year-to-date to the results for the same period during
the prior year and detailed calculation of the financial covenants set forth in
Annex G to the Credit Agreement for the applicable month (utilizing the
applicable data for the twelve-month period most recently ending); provided,
that, with respect to the Fiscal Months ending January 31 and February 28 (or
29) each year, the financial information required to be delivered to Agent
within 30 days after the end of such Fiscal Months shall be limited to
preliminary income statements and all other financial information (including
without limitation, balance sheets, cash flows and adjusted income statements)
required to be delivered to Agent with respect to such Fiscal Months shall be
delivered to Agent not later than April 19 each year. Such financial information
shall be accompanied by the certification of the Chief Financial Officer of
Borrower Representative that such financial information presented is true,
correct and complete in all material respects and that there was no Default or
Event of Default in existence as of such time or, if a Default or Event of
Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Default or Event of Default.
(b) Quarterly Financials. To Agent and Lenders, within 45
days after the end of each Fiscal Quarter, consolidated financial information
regarding Borrowers and their Subsidiaries, certified by the Chief Financial
Officer of Borrower Representative, including (i) unaudited balance sheets as of
the close of such Fiscal Quarter and the related statements of income and cash
flow for that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter and (ii) unaudited statements of income and cash flows for such Fiscal
Quarter, in each case setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments). Such financial information shall be accompanied
by (A) a statement in reasonable detail (each, a "Compliance Certificate"
showing the calculations used in determining compliance with each of the
Financial Covenants that is tested on a quarterly basis and (B) the
certification of the Chief Financial Officer of Borrower Representative that (i)
such financial information presents fairly in accordance with GAAP (subject to
normal year-end adjustments) the financial position, results of operations and
statements of cash flows of Borrowers and their Subsidiaries, on both a
consolidated basis, as at the end of such Fiscal Quarter and for that portion of
the Fiscal Year then ended, (ii) any other information presented is true,
correct and complete in all material respects and that there was no
F-1
Default or Event of Default in existence as of such time or, if a Default or
Event of Default has occurred and is continuing, describing the nature thereof
and all efforts undertaken to cure such Default or Event of Default. In
addition, Borrowers shall deliver to Agent and Lenders, within 45 days after the
end of each Fiscal Quarter, a management discussion and analysis that includes a
comparison to budget for that Fiscal Quarter and a comparison of performance for
that Fiscal Quarter to the corresponding period in the prior year.
(c) Operating Plan. To Agent and Lenders, as soon as
available, but not later than 45 days after the end of each Fiscal Year, an
annual operating plan for Borrowers, on a consolidated basis, approved by the
Board of Directors of Borrowers, for the following Fiscal Year, which (i)
includes a statement of all of the material assumptions on which such plan is
based, (ii) includes quarterly balance sheets, income statements and statements
of cash flows for the following year and (iii) integrates sales, gross profits,
operating expenses, operating profit, cash flow projections and projections, all
prepared on the same basis and in similar detail as that on which operating
results are reported (and in the case of cash flow projections, representing
management's good faith estimates of future financial performance based on
historical performance), and including plans for personnel, Capital Expenditures
and facilities.
(d) Annual Audited Financials. To Agent and Lenders,
within 90 days after the end of each Fiscal Year, audited Financial Statements
for Borrowers and their Subsidiaries on a consolidated basis, consisting of
balance sheets and statements of income and retained earnings and cash flows,
setting forth in comparative form in each case the figures for the previous
Fiscal Year, which Financial Statements shall be prepared in accordance with
GAAP and certified without qualification, by an independent certified public
accounting firm of national standing or otherwise acceptable to Agent. Such
Financial Statements shall be accompanied by (i) a statement prepared in
reasonable detail showing the calculations used in determining compliance with
each of the Financial Covenants, (ii) a report from such accounting firm to the
effect that, in connection with their audit examination, nothing has come to
their attention to cause them to believe that a Default or Event of Default has
occurred (or specifying those Defaults and Events of Default that they became
aware of), it being understood that such audit examination extended only to
accounting matters and that no special investigation was made with respect to
the existence of Defaults or Events of Default, (iii) a letter addressed to
Agent, on behalf of itself and Lenders, in form and substance reasonably
satisfactory to Agent and subject to standard qualifications required by
nationally recognized accounting firms, signed by such accounting firm
acknowledging that Agent and Lenders are entitled to rely upon such accounting
firm's certification of such audited Financial Statements, (iv) the annual
letters to such accountants in connection with their audit examination detailing
contingent liabilities and material litigation matters, and (v) the
certification of the Chief Executive Officer or Chief Financial Officer of
Borrowers that all such Financial Statements present fairly in accordance with
GAAP the financial position, results of operations and statements of cash flows
of Borrowers and their Subsidiaries on a consolidated basis, as at the end of
such Fiscal Year and for the period then ended, and that there was no Default or
Event of Default in existence as of such time or, if a Default or Event of
Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Default or Event of Default.
F-2
(e) Management Letters. To Agent and Lenders, within 5
Business Days after receipt thereof by any Credit Party, copies of all
management letters, exception reports or similar letters or reports in final
form received by such Credit Party from its independent certified public
accountants.
(f) Default Notices. To Agent and Lenders, as soon as
practicable, and in any event within 5 Business Days after an executive officer
of any Borrower has actual knowledge of the existence of any Default, Event of
Default or other event that has had a Material Adverse Effect, telephonic or
telecopied notice specifying the nature of such Default or Event of Default or
other event, including the anticipated effect thereof, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business Day.
(g) SEC Filings and Press Releases. To Agent and Lenders,
promptly upon their becoming available, copies of: (i) all Financial Statements,
reports, notices and proxy statements made publicly available by any Credit
Party to its security holders; (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any Credit Party with
any securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.
(h) Other Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt, Post-Confirmation Credit
Agreement Debt or all stockholders of Carmike and, within 2 Business Days after
any Credit Party obtains knowledge of any matured or unmatured event of default
with respect to any Subordinated Debt or Post-Confirmation Credit Agreement
Debt, notice of such event of default.
(i) Supplemental Schedules. To Agent, supplemental
disclosures, if any, required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon
learning thereof, notice of any Litigation commenced or threatened against any
Credit Party that (i) seeks damages in excess of $500,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or ERISA Affiliate in connection with any
Plan, (iv) alleges criminal misconduct by any Credit Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities or (vi) involves any product recall.
(k) Insurance Notices. To Agent, disclosure of losses or
casualties required by Section 5.4.
(l) Lease Default Notices. To Agent, within 2 Business
Days after receipt thereof, copies of (i) any and all payment default notices
received under or with respect to any leased location or public warehouse where
Collateral is located, and (ii) such other documents or notices as Agent may
request.
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(m) Good Standing Certificates. Not less frequently than
once during each calendar quarter, each Credit Party shall, unless Agent shall
otherwise consent, provide to Agent a certificate of good standing from its
state of incorporation or organization.
(n) Other Documents. To Agent and Lenders, such other
financial and other information respecting any Credit Party's business or
financial condition as Agent or any Lender shall from time to time reasonably
request.
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ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrowers shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Maximum Capital Expenditures. Borrowers and their
Subsidiaries on a consolidated basis shall not make Capital Expenditures during
the following periods that exceed in the aggregate the amounts set forth
opposite each of such periods:
Period Maximum Capital Expenditures per Period
------ ---------------------------------------
January 1, 2002 through December 31, 2002 $20,000,000
January 1, 2003 through December 31, 2003 $15,000,000
January 1, 2004 through December 31, 2004 $15,000,000
January 1, 2005 through December 31, 2005 $15,000,000
January 1, 2006 through December 31, 2006 $15,000,000
provided, however, that the amount of permitted Capital Expenditures referenced
above will be increased in any period by the positive amount equal to the lesser
of (i) $5,000,000, and (ii) the actual amount, if any, of any Capital
Expenditures committed to during such prior period (the "Carry Over Amount"),
and for purposes of measuring compliance herewith, the Carry Over Amount shall
be deemed to be the last amount spent on Capital Expenditures in that succeeding
year.
(b) Maximum Funded Debt to EBITDA. Borrowers and their
Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Quarter set forth below, a ratio of Indebtedness to EBITDA for the 12-month
period then ended of not more than the following:
7.25:1.00 for the Fiscal Quarters ending March 31, 2002 through
December 31, 2002;
7.00:1.00 for the Fiscal Quarters ending March 31, 2003 through
December 31, 2003;
6.75:1.00 for the Fiscal Quarters ending March 31, 2004 through
December 31, 2004;
6.25:1.00 for the Fiscal Quarters ending March 31, 2005 through
December 31, 2005;
and 5.75:1.00 for each Fiscal Quarter ending thereafter.
(c) Maximum Revolving Credit Advances to EBITDA Ratio.
Borrowers and their Subsidiaries on a consolidated basis shall have, at the end
of each Fiscal Quarter, a ratio of the outstanding amount of Revolving Credit
Advances to EBITDA of not more than 1.00:1.00:
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(d) Minimum Interest Coverage Ratio. Borrowers and their
Subsidiaries on a consolidated basis shall have at the end of each Fiscal
Quarter set forth below, an Interest Coverage Ratio for the 12-month period then
ended of not less than the following:
1.50:1.00 for the Fiscal Quarters ending March 31, 2002 through
December 31, 2002;
1.55:1.00 for the Fiscal Quarters ending March 31, 2003 through
December 31, 2003;
1.65:1.00 for the Fiscal Quarters ending March 31, 2004 through
December 31, 2004;
1.75:1.00 for the Fiscal Quarters ending March 31, 2005 through
December 31, 2005; and
1.85:1.00 for each Fiscal Quarter ending thereafter.
Unless otherwise specifically provided herein, any accounting
term used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by any Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
purchase accounting adjustments resulting from expenditures made subsequent to
the Closing Date (including capitalization of costs and expenses or payment of
pre-Closing Date liabilities) shall be treated as expenses in the period the
expenditures are made and deducted as part of the calculation of EBITDA in such
period regardless of when such expenditures were deducted from net income. If
Agent, Borrowers and Requisite Lenders agree upon the required amendments, then
after appropriate amendments have been executed and the underlying Accounting
Change with respect thereto has been implemented, any reference to GAAP
contained in the Agreement or in any other Loan Document shall, only to the
extent of such Accounting Change, refer to GAAP, consistently applied after
giving effect to the implementation of such Accounting Change. If Agent,
Borrowers and Requisite Lenders cannot agree upon the required amendments within
30 days following the date of implementation of any Accounting Change, then all
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change. For purposes
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of Section 8.1, a breach of a Financial Covenant contained in this Annex G shall
be deemed to have occurred as of the last day of any specified measurement
period, and on the last day of any specified measurement period, Agent may in
its reasonable discretion determine a breach of a Financial Covenant has
occurred as of such date, regardless of when the Financial Statements reflecting
such breach are delivered to Agent.
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