Exhibit 4.19
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$136,162,360
AMENDED AND RESTATED CREDIT AGREEMENT
among
PANAVISION INC.,
The Several Lenders
from Time to Time Parties Hereto,
and
JPMORGAN CHASE BANK,
as Administrative Agent
Dated as of May 28, 1998, as amended and restated as of January 16, 2004
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X.X. XXXXXX SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner
Table of Contents
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SECTION I. DEFINITIONS.................................................................5
1.1. Defined Terms.................................................................5
1.2. Other Definitional Provisions................................................25
SECTION II. AMOUNT AND TERMS OF COMMITMENTS............................................26
2.1. Term Loans...................................................................26
2.2. Repayment of Term Loans......................................................26
2.3. Repayment of Term Loans; Evidence of Debt....................................26
2.4. Fees, etc....................................................................27
2.5. Optional Prepayments.........................................................27
2.6. Mandatory Prepayments........................................................28
2.7. Conversion and Continuation Options..........................................29
2.8. Minimum Amounts and Maximum Number of Eurodollar Tranches....................29
2.9. Interest Rates and Payment Dates.............................................29
2.10. Computation of Interest and Fees.............................................30
2.11. Inability to Determine Interest Rate.........................................30
2.12. Pro Rata Treatment and Payments..............................................31
2.13. Requirements of Law..........................................................31
2.14. Taxes........................................................................32
2.15. Indemnity....................................................................34
2.16. Illegality...................................................................34
2.17. Change of Lending Office.....................................................35
2.18. Replacement of Lenders under Certain Circumstances...........................35
SECTION III. LETTERS OF CREDIT..........................................................35
3.1. Outstanding Letters of Credit................................................35
3.2. Commissions, Fees and Other Charges..........................................36
3.3. Reimbursement Obligation of the Borrower.....................................36
3.4. Obligations Absolute.........................................................36
3.5. Letter of Credit Payments....................................................36
3.6. Applications.................................................................37
SECTION IV. REPRESENTATIONS AND WARRANTIES.............................................37
4.1. Financial Condition..........................................................37
4.2. No Change....................................................................37
4.3. Corporate Existence; Compliance with Law.....................................37
4.4. Corporate or Partnership Power; Authorization; Enforceable Obligations.......38
4.5. No Legal Bar.................................................................38
4.6. No Material Litigation.......................................................38
4.7. No Default...................................................................38
4.8. Ownership of Property; Liens.................................................38
4.9. Intellectual Property........................................................38
4.10. Taxes........................................................................39
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4.11. Federal Regulations..........................................................39
4.12. Labor Matters................................................................39
4.13. ERISA........................................................................39
4.14. Investment Company Act; Other Regulations....................................40
4.15. Subsidiaries.................................................................40
4.16. Environmental Matters........................................................40
4.17. Accuracy of Information, etc.................................................41
4.18. Security Documents...........................................................41
4.19. Solvency.....................................................................42
4.20. Senior Indebtedness..........................................................42
SECTION V. CONDITIONS PRECEDENT.......................................................42
5.1. Conditions to Effective Date.................................................42
SECTION VI. AFFIRMATIVE COVENANTS......................................................44
6.1. Financial Statements. Furnish to each Lender, through the
Administrative Agent:.....................................................44
6.2. Certificates; Other Information..............................................44
6.3. Payment of Obligations.......................................................46
6.4. Conduct of Business and Maintenance of Existence, etc........................46
6.5. Maintenance of Property; Insurance...........................................46
6.6. Inspection of Property; Books and Records; Discussions.......................46
6.7. Notices......................................................................46
6.8. Environmental Laws...........................................................47
6.9. Additional Collateral, etc...................................................47
6.10. Pany.........................................................................49
6.11. Cash Control Agreements......................................................49
6.12. Foreign Pledges and Opinions.................................................49
SECTION VII. NEGATIVE COVENANTS.........................................................49
7.1. Financial Condition Covenants................................................49
7.2. Limitation on Indebtedness...................................................50
7.3. Limitation on Liens..........................................................51
7.4. Limitation on Fundamental Changes............................................53
7.5. Limitation on Sale of Assets.................................................54
7.6. Limitation on Dividends......................................................55
7.7. Limitation on Capital Expenditures...........................................55
7.8. Limitation on Investments, Loans and Advances................................55
7.9. Limitation on Optional Payments and Modifications of Debt Instruments, etc...57
7.10. Limitation on Transactions with Affiliates...................................57
7.11. Limitation on Sales and Leasebacks...........................................58
7.12. Limitation on Changes in Fiscal Periods......................................58
7.13. Limitation on Negative Pledge Clauses........................................58
7.14. Limitation on Restrictions on Subsidiary Distributions.......................58
7.15. Limitation on Lines of Business..............................................59
7.16. Limitation on Changes to Certificate of Incorporation........................59
SECTION VIII. EVENTS OF DEFAULT..........................................................59
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SECTION IX. THE ADMINISTRATIVE AGENT...................................................61
9.1. Appointment..................................................................61
9.2. Delegation of Duties.........................................................61
9.3. Exculpatory Provisions.......................................................62
9.4. Reliance by Administrative Agent.............................................62
9.5. Notice of Default............................................................62
9.6. Non-Reliance on Administrative Agent and Other Lenders.......................62
9.7. Indemnification..............................................................63
9.8. Administrative Agent in Its Individual Capacity..............................63
9.9. Successor Administrative Agent...............................................63
9.10. Authorization to Release Liens...............................................64
SECTION X. MISCELLANEOUS..............................................................64
10.1. Amendments and Waivers.......................................................64
10.2. Notices......................................................................65
10.3. No Waiver; Cumulative Remedies...............................................66
10.4. Survival of Representations and Warranties...................................66
10.5. Payment of Expenses..........................................................66
10.6. Successors and Assigns; Participations and Assignments.......................67
10.7. Adjustments; Set-off.........................................................69
10.8. Counterparts.................................................................70
10.9. Severability.................................................................70
10.10. Integration..................................................................70
10.11. GOVERNING LAW................................................................70
10.12. Submission To Jurisdiction; Waivers..........................................70
10.13. Acknowledgements.............................................................71
10.14. WAIVERS OF JURY TRIAL........................................................71
10.15. Confidentiality..............................................................71
10.16. Releases of Collateral Security and Guarantee Obligations....................72
10.17. Releases.....................................................................72
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SCHEDULES:
1.1A Term Loan Allocations
1.1B Non-Core Assets
3.1(a) Existing Letters of Credit
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.15(b) Outstanding Subscriptions, Options, Warnings and Other Agreements
4.18(a) UCC Filing Jurisdictions
6.11 Deposit Accounts
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.10 Affiliate Transactions
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Assumption
E-1 Form of Legal Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
E-2 Form of Legal Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
F Form of Term Note
G Form of Exemption Certificate
H Form of U.K. Pledge Agreement
I Form of New Zealand Pledge Agreement
J Form of Canadian Pledge Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 28, 1998, as
amended and restated as of January 16, 2004, among PANAVISION INC., a Delaware
corporation (the "Borrower") the several banks and other financial institutions
or entities from time to time parties to this Agreement (the "Lenders") and
JPMORGAN CHASE BANK, as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower is a party to the Credit Agreement, dated as of
May 28, 1998 (as amended, supplemented or otherwise modified from time to time
prior to the amendment and restatement on the date hereof, the "Existing Credit
Agreement"), among the Borrower, the banks and other financial institutions or
entities parties thereto, the Arranger and the Documentation Agent referred to
therein and the Administrative Agent;
WHEREAS, the Borrower has requested that the Existing Credit Agreement
be amended and restated as provided herein;
WHEREAS, it is the intent of the parties hereto that this Agreement
not constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement and which remain outstanding or evidence repayment of
any of such obligations and liabilities and that this Agreement amend and
restate in its entirety the Existing Credit Agreement and re-evidence the
obligations of the Borrower outstanding thereunder;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree that the Existing Credit
Agreement shall be, and hereby is, amended and restated in its entirety as
follows:
SECTION I. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the Alternate Base Rate.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors (or persons performing similar
functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Aggregate Exposure": with respect to any Lender, the sum of (i) the
aggregate unpaid principal amount of such Lender's Term Loans and (ii) in
the case of the Issuing Lender, the amount of such Lender's L/C Extensions
of Credit.
"Aggregate Exposure Percentage": with respect to any Lender, the ratio
(expressed as a percentage) of such Lender's Aggregate Exposure to the
Aggregate Exposure of all Lenders.
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"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the
Administrative Agent as its prime or base rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the lowest
rate of interest charged by the Administrative Agent in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction,
the numerator of which is one and the denominator of which is one minus the
C/D Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day
(or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of deposit
of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Administrative
Agent from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Margin": (a) 5.25%, in the case of ABR Loans and (b)
6.25%, in the case of Eurodollar Loans.
"Application": an application heretofore executed requesting the
Issuing Lender to open a Letter of Credit.
"Approved Fund": as defined in Section 10.6(b).
"Arranger": X.X. Xxxxxx Securities Inc., as sole lead arranger and
sole bookrunner.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a) or (b) of Section 7.5).
"Assignee": as defined in Section 10.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit D.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
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"Borrower": as defined in the preamble hereto.
"Budget": as defined in Section 6.2(c).
"Business": as defined in Section 4.16(b).
"Business Day": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the interbank eurodollar
market.
"Canadian Pledge Agreement": the Stock Pledge Agreement, dated on or
before January 30, 2004, pursuant to which the Borrower shall grant to the
Administrative Agent for the benefit of the Lenders a security interest in
shares of capital stock of Panavision Canada Holdings, substantially in the
form of Exhibit J, as the same may be amended, supplemented or otherwise
modified from time to time.
"Capital Expenditures": for any period, all amounts (whether paid in
cash or accrued as liabilities, including all obligations in respect of
Capital Leases), that would in accordance with GAAP, be set forth as
"capital expenditures" on the consolidated statement of cash flows of the
Borrower and its Subsidiaries for such period; provided, that with respect
to any Capital Lease for any period, Capital Expenditures shall mean the
aggregate amount of rental or interest payments for such period under such
Capital Lease.
"Capital Lease": any lease of property (real, personal or mixed) which
in accordance with GAAP is or should be capitalized on the lessee's balance
sheet.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Cash Equivalents": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the
date of acquisition and overnight bank deposits of any Lender or of any
commercial bank having capital and surplus in excess of $500,000,000, (c)
repurchase obligations of any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition having a term of not more
than 30 days with respect to securities issued or fully guaranteed or
insured by the United States Government, (d) commercial paper of a domestic
issuer rated at least A-2 by Standard & Poor's Ratings Services or any
successor ("S&P") or P-2 by Xxxxx'x Investors Service, Inc. or any
successor ("Moody's"), (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States or by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by
Moody's, (f) securities with maturities of one year or less from the date
of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank
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satisfying the requirements of clause (b) of this definition, or (g) shares
of money market mutual or similar funds sponsored by any registered broker
dealer or mutual fund distributor.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.4 (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or such
successor's) insuring time deposits at offices of such institution in the
United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board as in
effect from time to time) in respect of new non-personal time deposits in
Dollars having a maturity of 30 days or more.
"Change of Control": (a) the Permitted Holders shall cease to have
"beneficial ownership" (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of more than 50% of the total voting
power of all classes of Voting Stock of the Borrower then outstanding
(determined on a fully diluted basis), (b) the board of the directors of
Borrower shall cease to consist of a majority of Continuing Directors, or
(c) there shall occur any "Change of Control" (as defined in the Senior
Subordinated Note Indenture) or "Change in Control" (as defined in the
Senior Note Indenture).
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Document.
"Collateral Agency Agreement": the Collateral Agency Agreement, dated
as of January 16, 2004, among JPMorgan Chase Bank, as bank agent and
administrative agent, the Trustee and the Note Trustee, as amended,
supplemented or modified from time to time.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, Section 414(m) or (o) of the Code.
"Compliance Certificate": a certificate duly executed on behalf of the
Borrower by a Responsible Officer substantially in the form of Exhibit B.
"Confidential Information": as defined in Section 10.15.
"Consolidated EBITDA": for any period, for the Borrower and its
Subsidiaries, the sum of the following (without duplication): (a)
Consolidated Net Income for such period (calculated after eliminating
extraordinary gains and losses and unusual items) plus (b) income and other
taxes (to the extent deducted in determining Consolidated Net Income) for
such period plus (c) depreciation and amortization expense (to the extent
deducted in determining Consolidated Net Income) for such period plus (d)
other non-cash charges (to the extent deducted in determining
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Consolidated Net Income) for such period plus (e) the aggregate amount of
Consolidated Interest Expense for such period minus (f) the aggregate
amount of interest income for such period plus (g) the aggregate amount of
up-front or one-time fees or expenses payable in respect of Rate Hedging
Agreements during such period (to the extent deducted in determining
Consolidated Net Income for such period) plus (h) the amount of foreign
exchange losses (net of any gains) (or minus the amount of foreign exchange
gains (net of any losses)) plus (i) Transaction Charges (to the extent
deducted in determining Consolidated Net Income) plus (j) severance
expenses for executive officers of the Borrower accrued prior to December
31, 2003, in an aggregate amount not to exceed $4,600,000 plus (k) non-cash
charges related to long-term incentive compensation for any executive
officer or any non-executive chairman or vice-chairman of the Borrower;
provided, that any cash payments of long-term incentive compensation to any
executive officer or non-executive chairman or vice-chairman shall be
subtracted from Consolidated Net Income in calculating Consolidated EBITDA
for the period that such cash payments were made minus (l) any cash
payments made during such period in respect of items described in clause
(d) above subsequent to the fiscal quarter in which the relevant non-cash
charges were reflected as a charge in the statement of Consolidated Net
Income, all as determined on a consolidated basis. For the purposes of
calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a "Reference Period") pursuant to any determination
required by Section 7.1, (i) if at any time during such Reference Period
the Borrower or any Subsidiary shall have made any Material Disposition,
the Consolidated EBITDA for such Reference Period shall be reduced by an
amount equal to the Consolidated EBITDA (if positive) attributable to the
Property that is the subject of such Material Disposition for such
Reference Period or increased by an amount equal to the Consolidated EBITDA
(if negative) attributable thereto for such Reference Period and (ii) if
during such Reference Period the Borrower or any Subsidiary shall have made
a Material Acquisition, Consolidated EBITDA for such Reference Period shall
be calculated after giving pro forma effect thereto as if such Material
Acquisition occurred on the first day of such Reference Period. As used in
this definition, "Material Acquisition" means any acquisition of Property
or series of related acquisitions of Property that (a) constitutes assets
comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and
(b) involves the payment of consideration by the Borrower and its
Subsidiaries in excess of $1,000,000; and "Material Disposition" means any
Disposition of Property or series of related Dispositions of Property that
yields gross proceeds to the Borrower or any of its Subsidiaries in excess
of $1,000,000.
Notwithstanding the foregoing, only the products of (x) the percentage
of economic ownership of the Borrower (directly or indirectly) in each of
DHD Ventures, EFILM and any other Subsidiary which is not wholly-owned,
respectively, and (y) the Consolidated EBITDA of DHD Ventures, EFILM or
such other Subsidiary, respectively, shall be included in the calculation
of Consolidated EBITDA; provided, that with respect to the Consolidated
EBITDA of DHD Ventures and EFILM for any quarterly period ending after
December 31, 2003, the Consolidated EBITDA of DHD Ventures or EFILM, as
applicable, shall be included in the calculation of the foregoing only to
the extent that any such income is actually received by the Borrower or a
Subsidiary of the Borrower in the form of cash dividends or similar
distributions.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense (excluding in the case of this clause (b) only any fees paid or
payable to the Lenders and/or holders of the Senior Notes in such period
with respect to waivers or amendments of the Loan Documents or the Senior
Note Indenture, the Senior Notes and related collateral documents,
respectively) for such period.
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"Consolidated Interest Expense": for any fiscal period of the
Borrower, the amount which, in conformity with GAAP, would be set forth
opposite the caption "interest expense" (or any like caption) on a
consolidated statement of earnings of the Borrower and its Subsidiaries for
such fiscal period; provided that the calculation of Consolidated Interest
Expense shall exclude (x) any non-cash interest expense in respect of any
Indebtedness permitted under Section 7.2, (y) the fees payable pursuant to
Section 2.4 and (z) fees payable under the Senior Note Indenture from and
after the Effective Date.
"Consolidated Net Income": for any fiscal period of the Borrower, the
amount which, in conformity with GAAP, would be set forth opposite the
caption "net income" (or any like caption) or "net loss" (or any like
caption), as the case may be, on a consolidated statement of earnings of
the Borrower and its Subsidiaries for such fiscal period.
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP; provided that
Indebtedness of the types described in clause (j) of the definition of the
term Indebtedness and clause (k) of the definition of Indebtedness with
respect to the types of Indebtedness described in clause (j) thereof shall
not be included for the purpose of calculating Consolidated Total Debt.
"Consolidated Total Leverage Ratio": as at any date, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for the four
full consecutive fiscal quarters most recently ended.
"Consolidated Working Capital": at any date, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP): (a) the sum of inventory plus accounts receivable
minus (b) the sum of accounts payable plus accrued expenses at such date.
"Continuing Directors": the directors of the Borrower on the Effective
Date and each other director, if, in each case, such other director's
nomination for election to the board of directors of the Borrower is
recommended by at least 66-2/3% of the then Continuing Directors or such
other director receives the vote of the Permitted Holders in his or her
election by the shareholders of the Borrower.
"Contractual Obligation": as to any Person, any provision of any
material security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which
it or any of its material Property is bound.
"Core Assets": as defined in Section 7.8(e).
"Cross Default": of any Person, (a) default in the payment of any
amount when due (whether at maturity or by acceleration) on any of its
Indebtedness (other than any such default in respect of the Loans, the
Notes or the Reimbursement Obligations) or in the payment of any matured
Guarantee Obligation in respect of any such Indebtedness of any other
Person (except for any such payments on account of any such Indebtedness
and Guarantee Obligations in an aggregate principal amount at any one time
outstanding of up to $5,000,000) or (b) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness (except for any such Indebtedness and Guarantee Obligations in
an aggregate principal amount at any one time outstanding of up to
$5,000,000) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the
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effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, with the giving of notice if
required, such Indebtedness (except for any such Indebtedness in an
aggregate principal amount at any one time outstanding of up to $5,000,000)
to become due or to be required to be redeemed or repurchased prior to its
stated maturity.
"Debt Service": for any period, for the Borrower and its Subsidiaries
(determined on a consolidated basis without duplication in accordance with
GAAP), the sum of the following: (a) all regularly scheduled payments of
principal of Indebtedness (including, without limitation, the principal
component of any payments in respect of Capital Leases) made during such
period plus (b) all Consolidated Interest Expense for such period.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DHD Ventures": DHD Ventures, LLC, a Delaware limited liability
company.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Earnout Payment": as defined in the EFILM Operating Agreement.
"ECF Percentage": 75%; provided, that the ECF Percentage shall be
reduced to 50% if the Consolidated Total Leverage Ratio for the period of
four consecutive fiscal quarters ending on the last day of the most
recently ended fiscal year is not greater than 4.50 to 1.00.
"Effective Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied, which date is January 16, 2004.
"EFILM": EFILM, LLC, a Delaware limited liability company.
"EFILM Agreements": collectively, the EFILM Operating Agreement, the
EFILM Option Agreement and the Digital Laboratory Services Agreement, dated
as of May 17, 2002, between the Borrower, Las Palmas, the other holder of
Capital Stock of EFILM and EFILM.
"EFILM Note": the note issued by Las Palmas to the Equity Investor in
the principal amount of $6,700,000, plus accrued interest.
"EFILM Operating Agreement": the Operating Agreement, dated May 17,
2002, between the Borrower, Las Palmas and the other holder of the Capital
Stock of EFILM.
"EFILM Option Agreement": the Option Agreement, dated as of May 17,
2002, between the Borrower, Las Palmas and the other holder of Capital
Stock of EFILM.
-11-
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Equity Contribution": as defined in Subsection 5.1(b).
"Equity Investor": Mafco Holdings Inc.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such service), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
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"Excess Cash Flow": for any fiscal year of the Borrower:
(a) Consolidated EBITDA for such period; minus
(b) the sum (without duplication) of:
(i) the aggregate amount of Debt Service for such period; plus
(ii) taxes payable in cash in respect of such period; plus
(iii) Capital Expenditures made during such period (other than
(x) any such Capital Expenditures to the extent financed
with the proceeds of Indebtedness incurred pursuant to
Section 7.2(k) during such period and (y) any Capital
Expenditures of the types described in Sections 7.7(b) and
7.7(c) made during such period); plus
(iv) any increase (or minus any decrease) in Consolidated Working
Capital from the beginning of such period to the end of such
period; plus
(v) an amount equal to the aggregate gain on any Asset Sale or
Recovery Event by the Borrower or its Subsidiaries during
such period; plus
(vi) an amount equal to the aggregate gain on any event which
would be a Recovery Event by the Borrower or its
Subsidiaries during such period but for the parenthetical
clause in the definition thereof; plus
(vii) an amount equal to the aggregate gain on any Disposition of
Property by the Borrower or its Subsidiaries during such
period pursuant to Section 7.5(a)(i); plus
(viii) the aggregate amount of prepayments made under Section
2.6(a) during such period; plus
(ix) the portion of any Earnout Payment that is reasonably
estimated to arise from the portion of Consolidated EBITDA
attributable to EFILM for such period; plus
(x) Transaction Charges payable in cash to the extent included
in Consolidated EBITDA for such period; plus
(c) the sum of:
(i) the aggregate amount of Net Cash Proceeds received by the
Borrower or its Subsidiaries from any Asset Sale or Recovery
Event during such period to the extent such Net Cash
Proceeds are not applied to the prepayment of Term Loans
during such period (other than any such Net Cash Proceeds
that are not so applied pursuant to the second proviso to
Section 2.6(a)); plus
(ii) an amount equal to the aggregate loss on any Asset Sale or
Recovery Event by the Borrower or its Subsidiaries during
such period; plus
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(iii) an amount equal to the aggregate loss on any event which
would be a Recovery Event by the Borrower or its
Subsidiaries during such period but for the parenthetical
clause in the definition thereof; plus
(iv) an amount equal to the aggregate loss on any Disposition of
Property by the Borrower or its Subsidiaries during such
period pursuant to Section 7.5(a)(i).
"Excess Cash Flow Application Date": as defined in Section 2.6(b).
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement": as defined in the recitals hereto.
"Facility": each of the Term Loan Facility and the Letter of Credit
Facility.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Foreign Working Capital Line": any committed, advised or unadvised
line of credit or other credit facility made available by any Lender or any
affiliate of any Lender or any other Person to a Foreign Subsidiary and, as
the context may require, any outstanding obligation from time to time of
such Foreign Subsidiary owing thereunder.
"Fully Satisfied": with respect to:
(a) the Payment Obligations as of any date, that, on or before
such date, (i) the principal of and interest accrued to such date on
such Payment Obligations shall have been paid in full in cash (other
than the Undrawn L/C Obligations), (ii) all Undrawn L/C Obligations
shall have been Fully Secured, and (iii) all fees, expenses and other
amounts then due and payable which constitute Payment Obligations
(other than the Undrawn L/C Obligations) shall have been paid in full
in cash; and
(b) the Obligations (and the Borrower Obligations (as defined in
the Guarantee and Collateral Agreement)) as of any date, that, on or
before such date, (i) the Payment Obligations shall have been Fully
Satisfied (as provided in clause (a) above) and (ii) all Rate Hedging
Agreements with any of the Lenders or their Affiliates shall have been
terminated or all obligations thereunder (other than for fees,
expenses and indemnities) shall have been cash collateralized and all
fees, expenses and indemnity payments then due and payable thereunder
shall have been paid in full in cash.
"Fully Secured": with respect to any Undrawn L/C Obligations as of any
date, that, on or before such date, such Undrawn L/C Obligations shall have
been secured by the grant to the Issuing Lender by the Borrower of a first
priority, perfected security interest in, and Lien on, (a)
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cash or Cash Equivalents in an amount at least equal to the amount of such
Undrawn L/C Obligations on such date or (b) other collateral security which
is acceptable to the Issuing Lender.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the
date hereof and consistent with those used in the preparation of the most
recent audited financial statements delivered pursuant to Section 4.1(b).
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government (including, without limitation, any securities
exchange, self-regulatory organization or the National Association of
Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"Holdings": PX Holding Corporation, a Delaware corporation.
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"Incremental Line of Credit Agreement": the Senior Subordinated Line
of Credit Agreement, dated as of November 12, 2003, between the Borrower
and MacAndrews & Forbes Holdings Inc.
"Indebtedness": of a Person, (a) indebtedness of such Person for
borrowed money whether short-term or long-term and whether secured or
unsecured, (b) indebtedness of such Person for the deferred purchase price
of services or property, which purchase price (i) is due twelve months or
more from the date of incurrence of the obligation in respect thereof or
(ii) customarily or actually is evidenced by a note or other written
instrument (including, without limitation, any such indebtedness which is
non-recourse to the credit of such Person but is secured by assets of such
Person), (c) obligations of such Person under Capital Leases, (d)
obligations of such Person arising under acceptance facilities, (e) the
undrawn face amount of, and unpaid reimbursement obligations in respect of,
all letters of credit issued for the account of such Person, (f) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (g) all obligations of such Person upon which interest
charges are customarily paid, (h) all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), (i) obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any
Capital Stock of such Person (with redeemable preferred capital stock being
valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends), (j) all executory
obligations of such Person in respect of interest rate agreements and
foreign exchange and other financial hedge contracts (including, without
limitation, equity hedge contracts), (k) all Indebtedness of the types
referred to in clauses (a) through (j) above for which such Person is
obligated under a Guarantee Obligation and (l) renewals, extensions,
refundings, deferrals, restructurings, amendments and modifications of any
such indebtedness, obligation or guarantee.
"Initial EFILM Stock": 20% of the Capital Stock of EFILM that was
disposed of to the other holder of Capital Stock of EFILM prior to the
Effective Date.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to xxx at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds
and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan
having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day which is three months after the first
day of such Interest Period and the last day of such Interest Period and
(d) as to any Loan, the date of any repayment or prepayment made in respect
thereof.
-16-
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its notice of borrowing
or notice of conversion, as the case may be, given with respect thereto;
and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business
Days prior to the last day of the then current Interest Period with respect
thereto; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend beyond the
date final payment is due on the Term Loans shall end on such due
date; and
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Issuing Lender": JPMorgan Chase Bank, in its capacity as issuer of
any Letter of Credit.
"L/C Extensions of Credit": as to the Issuing Lender at any time, an
amount equal to the L/C Obligations then outstanding.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the date on which no Letters of Credit remain outstanding.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
Undrawn L/C Obligations and (b) the aggregate amount of drawings under
Letters of Credit which have not then been reimbursed pursuant to Section
3.3.
"Las Palmas": Las Palmas Productions, Inc., a California corporation.
"Lenders": as defined in the preamble hereto.
"Letter of Credit Facility": as defined in Section 3.1(a).
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any
of the foregoing).
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"Line of Credit Agreement": the Line of Credit Agreement, dated as of
February 3, 2003, between the Borrower and MacAndrews & Forbes Holdings
Inc.
"Loan": any loan maintained by any Lender pursuant to Section 2.1 of
this Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the Borrower which
is a party to a Loan Document.
"M&F Worldwide": M&F Worldwide Corp., a Delaware corporation.
"Majority Facility Lenders": (i) with respect to the Term Loan
Facility, the holders of more than 50% of the aggregate unpaid outstanding
principal amount of the Term Loans and (ii) with respect to the Letter of
Credit Facility, the holders of more than 50% of the aggregate unpaid
principal amount of the L/C Obligations.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole, (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder or (c) the ability of the Borrower to perform any of its
obligations under this Agreement.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan (other than a welfare plan as defined in
Section 3(1) of ERISA) which is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds": in connection with any Net Proceeds Event, the
gross proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant
to a note or installment receivable or purchase price adjustment receivable
or otherwise, but only as and when received) of such Net Proceeds Event,
net of (i) attorneys' fees, accountants' fees, investment banking fees,
underwriting discounts and commissions and other customary fees and
expenses actually incurred in connection therewith, (ii) the amount of
liabilities (other than intercompany liabilities or liabilities owing to
any Affiliate of such Person), if any, which are required to be repaid at
the time or as a result of any Net Proceeds Event out of the proceeds
thereof and (iii) taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements).
"Net Proceeds Event":
(i) the issuance by the Borrower or any of its Subsidiaries of
any Capital Stock (excluding (x) any Capital Stock issued
under any compensatory stock option plan of the Borrower or
any of its Subsidiaries in the ordinary course of business
the Net Cash Proceeds of which shall not exceed $5,000,000
in the aggregate during the term of this Agreement,
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(y) any Capital Stock issued by any Subsidiary of the
Borrower to the Borrower or any other Subsidiary of the
Borrower) and (z) any Capital Stock issued by the Borrower
on the Effective Date as contemplated under Section 5.1);
(ii) the incurrence by the Borrower or any of its Subsidiaries of
any Indebtedness for borrowed money (excluding Indebtedness
incurred in accordance with Section 7.2);
(iii) any Asset Sale; and
(iv) any Recovery Event.
"New Zealand Pledge Agreement": the Specific Security Deed, dated on
or before January 30, 2004, pursuant to which the Borrower shall grant to
the Administrative Agent for the benefit of the Lenders a security interest
in shares of capital stock of Panavision NZ, substantially in the form of
Exhibit I, as the same may be amended, supplemented or otherwise modified
from time to time.
"Non-Core Assets": the assets listed on Schedule 1.1B hereto.
"Non-Excluded Taxes": as defined in Section 2.14(a).
"Non-U.S. Lender": as defined in Section 2.14(d).
"Note Trustee": Wilmington Trust Company, as trustee under the Senior
Note Indenture and note collateral agent under the Collateral Agency
Agreement.
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender (or, in the case of
Rate Hedging Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, any other Loan Document, the Letters of Credit, any Rate
Hedging Agreement entered into with any Lender or any affiliate of any
Lender, or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
"OID Fee": as defined in Section 2.4.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement.
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"Panavision Canada Holdings": Panavision Canada Holdings Inc., a
Canada corporation.
"Panavision NZ": Panavision NZ Limited, a New Zealand limited company.
"Pany": Pany Rental, Inc., a New York corporation.
"Pany Loan Agreement": the Loan Agreement, dated as of October 31,
2001, between Pany and Financial Federal Credit Inc., as amended as of July
1, 2003, as further amended, supplemented or otherwise modified from time
to time.
"Pany Note": the promissory note of Pany in favor of Holdings, in the
principal amount of $630,780, plus accrued interest.
"Participant": as defined in Section 10.6(c).
"Payment Obligations": (a) all principal, interest, fees, charges,
expenses, attorneys' fees and disbursements, indemnities, reimbursement
obligations and any other amounts payable by any Person under any Loan
Document (including, without limitation, the L/C Obligations and interest
accruing at the then applicable rate provided for herein after the maturity
of the Loans to the extent any Loans are then outstanding and interest
accruing at the then applicable rate provided for herein after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to the Borrower whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding) and (b) any amount in respect of any of the foregoing that the
Administrative Agent or any Lender, in its sole discretion, may elect to
pay or advance under this Agreement on behalf of such Person after the
occurrence and during the continuance of a Default or an Event of Default.
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and
the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Holders": Xxxxxx X. Xxxxxxxx (or, in the event of his
incompetence or death, his estate, heirs, executor, administrator,
committee or other personal representative) (collectively, "heirs")) and
any Person controlled, directly or indirectly, by Xxxxxx X. Xxxxxxxx or his
heirs.
"Permitted Reorganization": the proposed reorganization of the
Borrower and its Subsidiaries in which (a) Panavision International LLC
shall be created as a first-tier Subsidiary of the Borrower, (b) Panapage
Co. LLC, Panapage One LLC, Panapage Two LLC and Panavision International,
L.P. shall be merged into Panavision International LLC and (c) all
first-tier Subsidiaries of the Borrower (other than Panavision
International LLC) shall become first-tier Subsidiaries of Panavision
International LLC instead, such that, after giving effect to such
reorganization, Panavision International LLC shall be the only first-tier
Subsidiary of the Borrower.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
-20-
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Potential Withdrawal Liability" shall have the meaning assigned to
such term in Section 5.8.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Properties": as defined in Section 4.16(a).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Proposed August 2003 Refinancing": the proposed refinancing of the
Existing Credit Agreement in July and August 2003 to have been arranged by
Credit Suisse First Boston and Bear Xxxxxxx in which the closing thereof
never occurred.
"PX Escrow": PX Escrow Corp., a Delaware corporation.
"Rate Hedging Agreement": any interest rate protection agreement,
interest rate futures contract, interest rate option, interest rate cap or
other interest rate hedge arrangement, foreign exchange contract or any
other agreement or arrangement designed to provide protection against
fluctuations in interest rates or currency exchange rates to or under which
the Borrower or any of its Subsidiaries is a party or a beneficiary on the
date hereof or becomes a party or a beneficiary after the date hereof.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding
relating to any asset (other than inventory and rental assets) of the
Borrower or any of its Subsidiaries (excluding (i) subject to Section 6.10,
Pany and its Subsidiaries and (ii) to the extent, and only to the extent,
that within 180 days of receipt by the Borrower or any of its Subsidiaries
of cash proceeds in respect of any such property or casualty insurance
claim or condemnation proceeding, such Person commences and thereafter
diligently pursues (x) the repair or replacement of the Property affected
by such event, or (y) the repayment of any purchase money Indebtedness or
Capital Lease obligations with respect to any such Property affected by
such event).
"Register": as defined in Section 10.6(b).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.3 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of
its Subsidiaries in connection therewith that are not applied to prepay the
Term Loans pursuant to Section 2.6(a) as a result of the delivery of a
Reinvestment Notice.
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"Reinvestment Event": any sale of Non-Core Assets or sale permitted by
Section 7.5(d) in respect of which the Borrower has delivered a
Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and
that the Borrower (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds from the
sale of Non-Core Assets or the sale permitted by Section 7.5(d), as
applicable, to acquire or repair assets useful in its business (including
by acquisition of the Capital Stock of a Person owning or operating such
assets).
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire or
repair assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring 360 days after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to acquire or repair assets useful in the Borrower's
business with all or any portion of the relevant Reinvestment Deferred
Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under regulations promulgated under Title IV of ERISA.
"Required Lenders": the holders of more than 50% of the sum of (i) the
aggregate unpaid principal amount of the Term Loans and (ii) the Total L/C
Extensions of Credit.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material Property
or to which such Person or any of its material Property is subject.
"Responsible Officer": any officer at the level of vice president or
higher of the Borrower, but in any event, with respect to financial
matters, the chief financial officer, chief accounting officer, treasurer
or controller of the Borrower.
"Revolving Credit Loans": as defined in the Existing Credit Agreement.
"SEC": the Securities and Exchange Commission (or successors thereto
or an analogous Governmental Authority).
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the U.K. Pledge Agreement, the New Zealand Pledge
Agreement, the Canadian Pledge Agreement and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any
Property of any Person to secure the obligations and liabilities of any
Loan Party under any Loan Document.
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"Senior Note Indenture": the Indenture, dated as of January 16, 2004,
between the Borrower and the Note Trustee, providing for the issuance of
the Senior Notes, together with all instruments and other agreements
entered into by the Borrower or any of its Subsidiaries in connection
therewith, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with Section 7.9.
"Senior Notes": the 12 1/2% senior notes due 2009 issued by the
Borrower on the Effective Date pursuant to the Senior Note Indenture.
"Senior Subordinated Line of Credit Agreement": the Amended and
Restated Senior Subordinated Line of Credit Agreement, dated as of January
16, 2004, between the Borrower and MacAndrews & Forbes Holdings Inc., as it
may be amended from time to time to the extent permitted by Section 7.9.
"Senior Subordinated Note Indenture": the Indenture dated as of
February 11, 1998 between PX Escrow and The Bank of New York, as trustee,
providing for the issuance of the Senior Subordinated Notes, together with
all instruments and other agreements entered into by the Borrower or any of
its Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
Section 7.9.
"Senior Subordinated Notes": (i) the 9 5/8% Senior Subordinated
Discount Exchange Notes due 2006 of the Borrower and the 9 5/8% Senior
Private Exchange Notes due 2006 of the Borrower, in each case, issuable
pursuant to the Senior Subordinated Note Indenture, with terms identical in
all material respects to those initially issued and exchanged therefor, or
(ii) any refinancing of such senior subordinated notes of the Borrower on
terms and conditions which either (A) (i) extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the rate
or extend the date for payment of interest thereon and are otherwise no
less favorable to the Lenders (including without limitation the
subordination provisions thereof) and (ii) do not involve the payment of a
consent fee or (B) are otherwise reasonably satisfactory to the Required
Lenders.
"Series D Perpetual Preferred Stock": perpetual preferred stock of the
Borrower, the terms and conditions of which are substantially as set forth
in the draft Certificate of Designation previously delivered to the
Administrative Agent.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date,
as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors, (b)
the present fair saleable value of the assets of such Person will, as of
such date, be greater than the amount that will be required to pay the
liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means
any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right
to an equitable remedy for breach of performance if such breach
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gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.
"Specified Foreign Subsidiary": Panavision Canada Holdings, Panavision
NZ and Panavision Europe Limited.
"Stock Purchase Agreement": the Stock Purchase Agreement, dated July
2, 2001, between M&F Worldwide, Las Palmas and the selling shareholders
named therein.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than (a)
any Foreign Subsidiary and (b) to the extent permitted by Section 10.1,
EFILM and Pany.
"Tax Sharing Agreement": means that certain Tax Sharing Agreement
entered into as of February 1, 1999, among Mafco Holdings, Inc., a Delaware
Corporation, the Borrower and certain Subsidiaries of the Borrower
signatory thereto, as amended, modified or supplemented from time to time.
"Term Loans": the term loans outstanding under the Term Loan Facility.
As of the Effective Date, the aggregate principal amount of the Term Loans
is $135,600,000, and the principal amount of the Term Loans of each Term
Loan Lender is set forth on Schedule 1.1A hereto.
"Term Loan Facility": as defined in Section 2.1.
"Term Loan Lender": each Lender which has made a Term Loan.
"Term Loan Percentage": as to any Term Loan Lender at any time, the
percentage which the aggregate principal amount of such Lender's Term Loans
then outstanding constitutes of the aggregate principal amount of the Term
Loans then outstanding.
"Total L/C Extensions of Credit": at any time, the aggregate amount of
the L/C Extensions of Credit of the Issuing Lender at such time.
"Tranche A Term Loans": as defined in the Existing Credit Agreement.
"Tranche B Term Loans": as defined in the Existing Credit Agreement.
"Transaction Charges": to the extent deducted in determining
Consolidated Net Income in such period, (i) the aggregate amount of
refinancing costs paid by the Borrower in connection with the Proposed
August 2003 Refinancing, not to exceed $2,100,000, (ii) nonrecurring
charges related to or arising out of fees and expenses incurred in
connection with the Sixth and Seventh Amendments to the Existing Credit
Agreement and (iii) nonrecurring charges related to or arising
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out of fees and expenses incurred in connection with the execution of this
Agreement and the financings contemplated hereby, including the issuance of
the Senior Notes.
"Transferee": as defined in Section 10.15.
"Trustee": Wilmington Trust Company, as trustee under the Collateral
Agency Agreement.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"U.K. Pledge Agreement": the Share Charge Agreement, dated as of June
4, 1998, as amended pursuant to a side letter, dated on or before January
30, 2004, pursuant to which Panavision International L.P. shall grant to
the Administrative Agent for the benefit of the Lenders a security interest
in shares of Panavision Europe Limited, substantially in the form of
Exhibit H, as the same may be amended, supplemented or otherwise modified
from time to time.
"Undrawn L/C Obligations": the portion, if any, of the Payment
Obligations constituting the contingent obligation of the Borrower to
reimburse the Issuing Lender in respect of the then undrawn and unexpired
portions of the Letters of Credit issued by the Issuing Lender pursuant to
Section 3.1.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"United States": the United States of America.
"Voting Stock": as to any Person, Capital Stock of such Person of the
class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect the board of directors,
managers or trustees of such Person (irrespective of whether or not at the
time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares
required by law and in the case of Panavision Canada Holdings, shares
and/or options for shares issued (or to be issued) to its directors,
officers or employees for up to 15% of the Capital Stock of Panavision
Canada Holdings) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries (it being understood that, in the case of
Panavision Canada Holdings, the issuance of such shares and/or options
contemplated above shall not preclude it from being treated as a Wholly
Owned Subsidiary of the Borrower for purposes of the Loan Documents).
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
a Wholly Owned Subsidiary of the Borrower.
1.2. Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its
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Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION II. AMOUNT AND TERMS OF COMMITMENTS
2.1. Term Loans. On the date hereof and prior to the effectiveness of
this Agreement, the Borrower prepaid a portion of the Tranche A Term Loans,
Tranche B Term Loans and Revolving Credit Loans outstanding under the Existing
Credit Agreement. Each Lender was given the option of accepting such prepayment
or rejecting such prepayment. The portion of the prepayment rejected by certain
of the Lenders was allocated on a pro rata basis to each accepting Lender's
Tranche A Term Loans, Tranche B Term Loans and Revolving Credit Loans, as
applicable. On the Effective Date, the remaining outstanding Tranche A Term
Loans, Tranche B Term Loans and Revolving Credit Loans shall be converted into a
single term loan facility amortizing as set forth in Section 2.2 (the "Term Loan
Facility"), which shall remain outstanding to the Borrower in dollars hereunder
on the terms set forth herein. After giving effect to the partial prepayment of
the Tranche A Term Loans, the Tranche B Term Loans and the Revolving Credit
Loans referred to above, each Lender agrees that it shall maintain a Term Loan
hereunder as set forth on Schedule 1.1A.
2.2. Repayment of Term Loans. The Term Loan of each Term Loan Lender
shall mature in 12 consecutive quarterly installments, commencing on March 31,
2004 with one final payment on January 12, 2007, each of which shall be in an
amount equal to such Lender's Term Loan Percentage multiplied by the amount set
forth below opposite such installment:
Installment Principal Amount
----------- ----------------
March 31, 2004 $ 1,250,000
June 30, 2004 1,250,000
September 30, 2004 1,250,000
December 31, 2004 1,250,000
March 31, 2005 1,875,000
June 30, 2005 1,875,000
September 30, 2005 1,875,000
December 31, 2005 1,875,000
March 31, 2006 2,500,000
June 30, 2006 2,500,000
September 30, 2006 2,500,000
January 12, 2007 115,600,000
Notwithstanding the foregoing, if any Senior Subordinated Notes remain
outstanding on September 1, 2005, all then outstanding Term Loans shall
automatically become due and payable on such date.
2.3. Repayment of Term Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Term Loan Lender
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the principal amount of each Term Loan of such Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.2 (or on such
earlier date on which the Loans become due and payable pursuant to Section 2.2
or Section 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.9.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(b), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans of such Lender,
substantially in the form of Exhibit F, with appropriate insertions as to date
and principal amount.
2.4. Fees, etc. The Borrower agrees to pay to the Administrative Agent
the fees in the amounts and on the dates as set forth in any fee agreements with
the Administrative Agent and to perform any other obligations contained therein,
including, the payment on the Effective Date (the "OID Fee") to JPMorgan Chase
Bank, for the ratable account of the Term Loan Lenders (with the term loan
allocations as reflected on Schedule 1.1A hereto), of an amount equal to the
product of (a) 0.015 and (b) $135,600,000, the aggregate principal amount of the
Term Loans.
2.5. Optional Prepayments. The Borrower may at any time and from time
to time prepay the Term Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.15. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
to such date on the amount prepaid. Partial prepayments of Term Loans shall be
in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000
in excess thereof.
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2.6. Mandatory Prepayments. (a) If on any date the Borrower or any of
its Subsidiaries (other than, subject to Section 6.10, Pany and its
Subsidiaries; provided, that in the event that Pany and/or its Subsidiaries
become a party to the Guarantee and Collateral Agreement, this Section 2.6(a)
shall also apply to them) shall receive Net Cash Proceeds from any Net Proceeds
Event (other than the sale of any Non-Core Assets or any disposition permitted
by Section 7.5(d), which shall be applied as set forth below), such Net Cash
Proceeds shall be applied, to the extent required, on such date toward the
prepayment of the Term Loans as set forth in Section 2.6(c); provided, that in
the case of any Asset Sale or Recovery Event, such prepayment of the Term Loans
need not be made pursuant to this Section 2.6(a) until the Borrower or any of
such Subsidiaries shall have received at least $5,000,000 in Net Cash Proceeds
in the aggregate from Asset Sales or Recovery Events, at which time, such
$5,000,000 in Net Cash Proceeds from any Asset Sales or Recovery Events and all
further Net Cash Proceeds from any Asset Sales or Recovery Events shall be
promptly applied to the prepayment of the Term Loans as set forth in Section
2.6(c); provided, further, that, notwithstanding the foregoing, if EFILM or any
Subsidiary of EFILM receives any Net Cash Proceeds from any Net Proceeds Events,
such Net Cash Proceeds shall be deemed not to have been received by the Borrower
or any of its Subsidiaries for purposes of this Section 2.6(a) except to the
extent actually received by the Borrower or Las Palmas in the form of cash
dividends or cash distributions. Notwithstanding anything herein to the
contrary, in the event that the Borrower or any of its Subsidiaries shall have
received Net Cash Proceeds from the sale of any Non-Core Assets or pursuant to a
disposition permitted by Section 7.5(d), such Net Cash Proceeds shall be applied
toward the prepayment of the Term Loans as set forth in Section 2.6(c) unless a
Reinvestment Notice has been delivered in respect thereof; provided, that, (i)
the aggregate Net Cash Proceeds from such sale that may be excluded from the
foregoing requirement pursuant to a Reinvestment Notice shall not exceed
$25,000,000 during the term of this Agreement, (ii) pending reinvestment, such
Net Cash Proceeds shall be deposited in a cash collateral account maintained
with the Administrative Agent with reasonably satisfactory terms, subject to
release for reinvestment at any time when no Default or Event of Default has
occurred and is continuing and (iii) on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans.
(b) If for any fiscal year of the Borrower commencing with the fiscal
year ended December 31, 2004, there shall be Excess Cash Flow, the Borrower
shall, on the relevant Excess Cash Flow Application Date, apply the ECF
Percentage of such Excess Cash Flow toward the prepayment of the Term Loans as
set forth in Section 2.6(c). Each such prepayment shall be made on a date (an
"Excess Cash Flow Application Date") no later than five days after the earlier
of (i) the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(c) Amounts to be applied in connection with prepayments of Term Loans
pursuant to Section 2.6 shall be applied ratably to the prepayment of the Term
Loans. The application of any prepayment pursuant to Section 2.6 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the
Term Loans under Section 2.6 shall be accompanied by accrued interest to the
date of such prepayment on the amount prepaid.
(d) If, as a result of the making of any payment required to be made
pursuant to this Section 2.6, the Borrower would incur costs pursuant to Section
2.15, the Borrower may deposit the amount of such payment with the
Administrative Agent, for the benefit of the Lenders, in a cash collateral
account, until the end of the applicable Interest Period at which time such
payment shall be made. The Borrower hereby grants to the Administrative Agent,
for the benefit of the Lenders, a security interest in all amounts from time to
time on deposit in such cash collateral account and expressly waives all rights
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(which rights the Borrower hereby acknowledges and agrees are vested exclusively
in the Administrative Agent) to exercise dominion or control over any such
amounts.
2.7. Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor); provided, that no ABR Loan may be converted into a Eurodollar
Loan (i) when any Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Facility Lenders in respect of the Term
Loan Facility have determined in its or their sole discretion not to permit such
conversions or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of the Term Loan Facility. Upon receipt
of any such notice, the Administrative Agent shall promptly notify each relevant
Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Majority
Facility Lenders in respect of the Term Loan Facility have determined in its or
their sole discretion not to permit such continuations or (ii) after the date
that is one month prior to the final scheduled termination or maturity date of
the Term Loan Facility, and provided, further, that if the Borrower shall fail
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.8. Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $100,000
in excess thereof and (b) no more than ten Eurodollar Tranches shall be
outstanding at any one time.
2.9. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all of the aggregate principal unpaid
amount of the Loans and Reimbursement Obligations shall bear interest at a rate
per annum which is equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section 2.9 plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to ABR Loans plus 2%, and (ii) if all or a portion of any interest
payable on any Loan or Reimbursement Obligation or other amount payable
hereunder shall not
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be paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
applicable to ABR Loans plus 2%, in each case, with respect to clauses (i) and
(ii) above, from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
2.9 shall be payable from time to time on demand.
2.10. Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR Loans
the rate of interest on which is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Alternate Base Rate or the Eurocurrency
Reserve Requirements shall become effective as of the opening of business on the
day on which such change becomes effective. The Administrative Agent shall as
soon as practicable notify the Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Sections 2.9(a) or 2.9(b).
2.11. Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders at least two Business Days prior to the
commencement of any such Interest Period. Unless the Borrower shall have
notified the Administrative Agent promptly upon receipt of such telecopy or
telephonic notice that it wishes to rescind or modify its request regarding (i)
proposed Loans that the Borrower has requested be made as Eurodollar Loans, (ii)
a Eurodollar Loan that will result from the requested conversion of all or part
of ABR Loans into Eurodollar Loans or (iii) the continuation of a Eurodollar
Loan as such for an additional Interest Period, then (x) any Eurodollar Loans
under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans under the relevant
Facility that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be continued as ABR Loans and (z) any
outstanding Eurodollar Loans under the relevant Facility shall be converted, on
the last day of the then current Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
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Loans under the relevant Facility shall be made or continued as such, nor shall
the Borrower have the right to convert Loans under the relevant Facility to
Eurodollar Loans.
2.12. Pro Rata Treatment and Payments. (a) Each optional prepayment of
Term Loans pursuant to Section 2.5 shall be made pro rata according to the
respective outstanding principal amounts of the Term Loans then held by the Term
Loan Lenders. Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Loan Lenders. Except as otherwise provided in the following
sentence, the amount of each principal prepayment of the Term Loans shall be
applied to reduce the then remaining installments of the Term Loans pro rata
based upon the then remaining principal amount thereof. If any optional
prepayment of Term Loans is made pursuant to Section 2.5 at any time other than
on a scheduled installment date in respect of the Term Loans, the amount of each
principal prepayment of the Term Loans shall be applied to reduce the next
originally scheduled installment (unless previously prepaid) of the Term Loans
pro rata based upon the then remaining principal amount thereof, and, if any
such prepayment amount remains after the payment in full of the next originally
scheduled installment of the Term Loans, any such remaining amount shall be
applied in the manner set forth in the preceding sentence. Amounts repaid or
prepaid on account of the Term Loans may not be reborrowed.
(b) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
ratable account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(c) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.13. Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof shall:
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(i) subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.14 and changes in the rate of tax on the
overall net income of such Lender);
(ii) impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing Letters of Credit, or to
reduce any amount receivable hereunder in respect thereof, then, in any such
case, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable as reasonably determined by such Lender. If any
Lender becomes entitled to claim any additional amounts pursuant to this Section
2.13, it shall promptly notify the Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations to lend hereunder or under or in respect of any
Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction; provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor; and provided further that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.
(c) A certificate as to any additional amounts payable pursuant to
this Section 2.13 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall contain supporting calculations and an explanation
in connection therewith and shall be conclusive in the absence of manifest
error. The obligations of the Borrower pursuant to this Section 2.13 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.14. Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative
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Agent or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") or Other Taxes
are required to be withheld from any amounts payable to the Administrative Agent
or any Lender hereunder, the amounts so payable to the Administrative Agent or
such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and
Other Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or (e) of this
Section, (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.14(a) or
(iii) that are imposed as a result of an event occurring after the Lender
becomes a Lender other than a change in law or regulation or the introduction of
any law or regulation or a change in interpretation or administration of any
law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms within ten (10) Business
Days after receipt of a written notification from the Borrower that any form
previously delivered by such Non-U.S. Lender is invalid or is due to expire or
to become obsolete. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
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(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender becomes aware that it is
entitled to claim a refund of any Non-Excluded Taxes or Other Taxes as to which
it has been indemnified by the Borrower or with respect to which the Borrower
has paid additional amounts pursuant to this Section 2.14, it shall pay over
such refund to the Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section 2.14 with respect
to the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.
(g) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.15. Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur in its reemployment of funds obtained in connection with the making or
maintaining of, or converting to, Eurodollar Loans, as a consequence of (a)
default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment of Eurodollar Loans after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Calculation of
all amounts payable to a Lender under this Section 2.15 shall be made as though
such Lender had actually funded its relevant Eurodollar Loan through the
purchase of a Eurodollar deposit bearing interest at the Eurodollar Rate in an
amount equal to the amount of such Eurodollar Loan, having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States; provided that each Lender may fund each of its
Eurodollar Loans in any manner it sees fit and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this Section 2.15. A
certificate as to any amounts payable pursuant to this Section 2.15 submitted to
the Borrower by any Lender shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.16. Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) such Lender shall
promptly notify the Administrative Agent and Borrower thereof, (b) the
commitment of such
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Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (c) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.15.
2.17. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.13 or 2.14(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.21 shall
affect or postpone any of the obligations of any Borrower or the rights of any
Lender pursuant to Section 2.13 or 2.14(a).
2.18. Replacement of Lenders under Certain Circumstances. The Borrower
shall be permitted to replace any Lender which requests reimbursement for
amounts owing pursuant to Section 2.13 or 2.14 with a replacement financial
institution; provided, that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.17 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.13 or 2.14,
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.15 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.13 or 2.14, as the case may be,
and (ix) any such replacement shall not be deemed to be a waiver of any rights
which the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.
SECTION III. LETTERS OF CREDIT
3.1. Outstanding Letters of Credit. (a) The letters of credit
outstanding under the Existing Credit Agreement as of the Effective Date and
listed on Schedule 3.1 hereto (the "Letters of Credit") shall be maintained
hereunder by the Issuing Lender (the "Letter of Credit Facility"). The Undrawn
L/C Obligations in respect of each Letter of Credit shall be Fully Secured from
and after the Effective Date. The Issuing Lender shall not at any time be
obligated to issue any additional Letter of Credit hereunder.
(b) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(c) In the event that the Borrower is unable, on or before the date
which is sixty (60) days after the Effective Date, to amend each Letter of
Credit to provide that the expiry date thereof is no later than January 5, 2007,
the Issuing Lender shall have the right not to renew each Letter of Credit not
so amended.
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3.2. Commissions, Fees and Other Charges. (a) The Borrower will pay to
the Issuing Lender a commission on the face amount of all outstanding Letters of
Credit at a per annum rate equal to 6.25% and payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee of 1/4 of 1%
per annum of the undrawn and unexpired amount of the Letter of Credit, payable
quarterly in arrears on each L/C Fee Payment Date after the Effective Date.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.3. Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in lawful
money of the United States and in immediately available funds. Interest shall be
payable on any and all amounts remaining unpaid by the Borrower under this
Section from the date such amounts become payable (whether at stated maturity,
by acceleration or otherwise) until payment in full at the rate set forth in
Section 2.9(c); provided, that if the Issuing Lender does not notify the
Borrower as provided for above earlier than 11:00 A.M. (New York City time) on
the date such draft is paid, then for such day (and until the next Business Day)
all amounts remaining unpaid in respect of such notice shall bear interest at
the rate set forth in Section 2.9(b).
3.4. Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.3 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards or care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.5. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
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3.6. Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION IV. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to maintain the Loans and Letters of Credit hereunder, the
Borrower hereby represents and warrants to the Administrative Agent and each
Lender that:
4.1. Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at September
30, 2003 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies
of which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the transactions
contemplated hereby and (ii) the payment of fees and expenses in connection with
the foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Borrower as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at September 30, 2003, assuming
that the events specified in the preceding sentence had actually occurred at
such date.
(b) The audited consolidated balance sheets of the Borrower as at
December 31, 2001 and December 31, 2002 and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, certified
without a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Ernst & Young LLP, present fairly the
consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited consolidated balance sheet of
the Borrower as at September 30, 2003, and the related unaudited consolidated
statements of income and cash flows for the nine-month period ended on such
date, present fairly the consolidated financial condition of the Borrower as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the nine-month period then ended (subject to normal year-end
audit adjustments and to the absence of footnotes). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as disclosed in the notes thereto). The Borrower and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, which are not reflected in the most recent financial
statements referred to in this paragraph (b) (or in the notes thereto) or
permitted to be incurred under this Agreement. During the period from December
31, 2002 to and including the date of this Agreement there has been no
Disposition by the Borrower of any material part of its business or Property,
except as permitted by Section 7.5.
4.2. No Change. Since December 31, 2002 there has been no development
or event which has had or would be reasonably likely to have a Material Adverse
Effect.
4.3. Corporate Existence; Compliance with Law. Each Loan Party and
each Specified Foreign Subsidiary (a) is a corporation or partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization (except no representation is made as to the
good standing of any Subsidiary organized under the laws of a jurisdiction in
which there is no concept of good standing), (b) has the corporate or
partnership power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified to do business
and in good standing under the laws of each
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jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification except to the extent that the
failure to so qualify would not, in the aggregate, be reasonably likely to have
a Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith would not, in the
aggregate, be reasonably likely to have a Material Adverse Effect.
4.4. Corporate or Partnership Power; Authorization; Enforceable
Obligations. Each Loan Party has the corporate or partnership power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to borrow hereunder.
Each Loan Party has taken all necessary corporate or partnership action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party and, in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 4.4, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect, (ii) the filings referred to in Section 4.18 and (iii)
those which, in the aggregate, would not be reasonably likely to have a Material
Adverse Effect if not obtained or made. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5. No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
material Requirement of Law or any Contractual Obligation of the Borrower or any
of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective material properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents).
4.6. No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which would be reasonably likely to have
a Material Adverse Effect.
4.7. No Default. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which would be reasonably likely to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8. Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other Property, and none of such Property is subject to any Lien except as
permitted by Section 7.3.
4.9. Intellectual Property. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all Intellectual Property necessary for the conduct
of its business as currently conducted that is material to the business,
condition (financial or otherwise), operations, performance, properties or
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prospects of the Borrower and its Subsidiaries taken as a whole. No material
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property that is material to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower and its Subsidiaries taken as a whole or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of
any valid basis for any such claim. The use of such Intellectual Property by the
Borrower and its Subsidiaries does not infringe on the rights of any Person,
except to the extent of any infringements which would not, in the aggregate, be
reasonably likely to have a Material Adverse Effect.
4.10. Taxes. The Borrower and each of its Subsidiaries has filed or
caused to be filed all Federal, state and other material tax returns which are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its Property and all
other taxes, fees or other charges imposed on it or any of its Property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed.
4.11. Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose which violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in Regulation U.
4.12. Labor Matters. There are no strikes or other labor disputes
against the Borrower or any of its Subsidiaries pending or, to the knowledge of
the Borrower, threatened that (individually or in the aggregate) would be
reasonably likely to have a Material Adverse Effect. Hours worked by and payment
made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) would be
reasonably likely to have a Material Adverse Effect. All payments due from the
Borrower or any of its Subsidiaries on account of employee health and welfare
insurance that (individually or in the aggregate) would be reasonably likely to
have a Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of the Borrower or the relevant Subsidiary.
4.13. ERISA. No Reportable Event has occurred during the immediately
preceding six-year period with respect to any Plan that resulted or would be
reasonably likely to result in any unpaid liability, and each Plan (other than
any Multiemployer Plan or any multiemployer health or welfare plan) has complied
and has been administered in all material respects with the applicable
provisions of ERISA and the Code, except as such Reportable Event or such
failure to comply or be so administered would not reasonably be likely to have a
Material Adverse Effect. The amount by which the present value of all accrued
benefits under each Single Employer Plan maintained by the Borrower or any of
its Subsidiaries or any Commonly Controlled Entity (based on those assumptions
used to fund the Plans), as of the last annual valuation date applicable
thereto, exceeds the value of the assets of each such Plan allocable to such
benefits, in the aggregate for all such Plans as to which such present value of
benefits exceeds the value of its assets (the "Unfunded Pension Amount"), is
less than $60,000,000, when aggregated with the Potential Withdrawal Liability.
Neither the Borrower nor any of its Subsidiaries nor any Commonly Controlled
Entity has during the immediately preceding six-year period had a complete or
partial withdrawal from any Multiemployer Plan that resulted or would be
reasonably likely to result in any unpaid withdrawal liability under Section
4201 of ERISA that would be reasonably likely to have a Material Adverse Effect,
and the withdrawal liability under Section 4201 of ERISA to which the
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Borrower or any of its Subsidiaries or any Commonly Controlled Entity would
become subject under ERISA if the Borrower or any of its Subsidiaries or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the most recent valuation date applicable thereto (the
"Potential Withdrawal Liability") is not in excess of $60,000,000, when
aggregated with the Unfunded Pension Amount. Neither the Borrower nor any of its
Subsidiaries nor any Commonly Controlled Entity has received notice that any
Multiemployer Plan is in Reorganization or Insolvent where such Reorganization
or Insolvency has resulted, or would be reasonably likely to result in an unpaid
liability that would be reasonably likely to have a Material Adverse Effect nor,
to the best knowledge of the Borrower or any of its Subsidiaries, is any such
Reorganization or Insolvency reasonably likely to occur. The obligations of the
Borrower and each of its Subsidiaries and each Commonly Controlled Entity for
post retirement benefits to be provided to their current and former employees
under Plans which are welfare benefits plans (as defined in Section 3(l) of
ERISA) are not reasonably likely to have a Material Adverse Effect, when
aggregated with their obligations with respect to the Unfunded Pension Amount
and the Potential Withdrawal Liability.
4.14. Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15. Subsidiaries. (a) Schedule 4.15 sets forth as of the Effective
Date the name and jurisdiction of incorporation of each Subsidiary and, as to
each such Subsidiary, the percentage of each class of Capital Stock owned by any
Loan Party.
(b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted
under compensatory stock option plans and other than directors' qualifying
shares) of any nature relating to any Capital Stock of the Borrower or any
Subsidiary, except (i) under the Loan Documents and (ii) as set forth on
Schedule 4.15(b).
4.16. Environmental Matters. Except as individually or in the
aggregate would not be reasonably likely to result in a Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances which (i) constitute or constituted a
violation of, or (ii) could give rise to liability under, any Environmental Law.
(b) The Properties and all operations at the Properties are in
material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "Business"). Neither the Borrower nor
any of its Subsidiaries has assumed any liability of any other Person under
Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has received or
is aware of any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Properties or the Business,
nor does the Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened.
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(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could give rise to liability under Environmental
Laws.
4.17. Accuracy of Information, etc. No information, schedule, exhibit
or report or other document furnished by or on behalf of the Borrower or any of
its Subsidiaries to the Administrative Agent or any Lender in connection with
the negotiation of this Agreement or pursuant to the terms of this Agreement, as
such information, schedule, exhibit or report or other document has been
amended, supplemented or superseded by any other information, schedule, exhibit
or report or other document later delivered to the same parties receiving such
information, schedule, exhibit or report or other document, contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein, in light of the
circumstances when made, not materially misleading; provided that in the case of
information, schedules, exhibits or reports or other documents made, delivered
or prepared by Persons other than the Borrower, its Subsidiaries and their
agents, such representation and warranty is subject to the qualification that it
is true and correct only to the knowledge of the Borrower and its Subsidiaries.
The projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to any Loan Party on the date of the Agreement that would be reasonably likely
to have a Material Adverse Effect that has not been expressly disclosed herein,
in the other Loan Documents or in any documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
4.18. Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock and stock powers related thereto duly executed
in blank by the relevant pledgor are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.18(a) and such other filings and actions as are
specified in Schedule 3 to the Guarantee and Collateral Agreement, the Guarantee
and Collateral Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Guarantee and Collateral Agreement), in each
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case prior and superior in right to any other Person (except (x), in the case of
Collateral other than Pledged Stock, Liens permitted by Section 7.3 (other than
the Liens securing the Senior Notes), (y) in the case of Capital Stock of EFILM,
to the extent permitted by Sections 7.3(p) and 7.3(q)) and (z) in the case of
Pledged Stock, Liens permitted by Section 7.3(h).
(b) Upon execution and delivery thereof by the parties thereto, the
U.K. Pledge Agreement shall be effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in not less than 65% of the Capital Stock of
Panavision Europe Limited and, when the actions specified in the U.K. Pledge
Agreement have been completed, security interests granted pursuant thereto shall
constitute a perfected first lien on, and security interest in, all right, title
and interest of the pledgor party thereto in such Capital Stock.
(c) Upon execution and delivery thereof by the parties thereto, the
New Zealand Pledge Agreement shall be effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in not less than 65% of the Capital Stock of
Panavision NZ and, when the actions specified in the New Zealand Pledge
Agreement have been completed, security interests granted pursuant thereto shall
constitute a perfected first lien on, and security interest in, all right, title
and interest of the pledgor party thereto in such Capital Stock.
(d) Upon execution and delivery thereof by the parties thereto, the
Canadian Pledge Agreement shall be effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in not less than 65% of the Capital Stock of
Panavision Canada Holdings and, when the actions specified in the Canadian
Pledge Agreement have been completed, security interests granted pursuant
thereto shall constitute a perfected first lien on, and security interest in,
all right, title and interest of the pledgor party thereto in such Capital
Stock.
4.19. Solvency. The Borrower is, and after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith will be Solvent on a consolidated and unconsolidated
basis.
4.20. Senior Indebtedness. The Obligations in respect of the Loan
Documents constitute "Senior Debt" of the Borrower under and as defined in the
Senior Subordinated Note Indenture. The obligations of each Subsidiary Guarantor
under the Guarantee and Collateral Agreement constitute "Senior Debt" of such
Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.
SECTION V. CONDITIONS PRECEDENT
5.1. Conditions to Effective Date. This Agreement shall become
effective upon satisfaction of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the Borrower and each Subsidiary
Guarantor and (iii) the Collateral Agency Agreement, executed and delivered
by a duly authorized officer of the Trustee and the Note Collateral Agent.
(b) Equity Contribution. The Borrower shall have received at least
$23,000,000 in cash from a common equity contribution by the Equity
Investor (the "Equity Contribution").
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(c) Issuance of Senior Notes. The Borrower shall have received at
least $99,999,520.32 of gross cash proceeds (after giving effect to any
original issue discount) from the issuance of the Senior Notes, which notes
and related security documents shall be on terms satisfactory to the
Lenders, including no scheduled amortization prior to the fifth anniversary
of the Effective Date.
(d) Conversion of Certain Debt Instruments to Equity/Equity
Contribution. The Equity Investor or an Affiliate thereof shall have
converted the following Indebtedness into Series D Perpetual Preferred
Stock: (i) the Pany Note, (ii) the EFILM Note and (iii) the Line of Credit
Agreement. The Equity Investor or an Affiliate thereof shall have
contributed its equity interest in Pany, in an aggregate amount of
approximately $700,000, to the Borrower.
(e) Senior Subordinated Line of Credit Agreement. The Equity Investor
shall have entered into the Senior Subordinated Line of Credit Agreement
with the Borrower in the principal amount of $20,000,000 to be available to
the Borrower on a revolving basis on terms and conditions reasonably
satisfactory to the Lenders.
(f) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for the 2001 and 2002 fiscal years and
(iii) unaudited interim consolidated financial statements of the Borrower
for each fiscal quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (ii) of this
paragraph as to which such financial statements are available to the
Borrower, and such financial statements shall not, in the reasonable
judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of the Borrower and its Subsidiaries.
(g) Related Agreements. The Administrative Agent shall have received
(in a form reasonably satisfactory to the Lenders), with a copy for each
Lender, true and correct copies, certified as to authenticity by the
Borrower, of such documents or instruments as may be reasonably requested
by the Administrative Agent, including, without limitation, a copy of the
Senior Note Indenture and any other debt instrument, security agreement or
other material contract to which the Loan Parties may be a party.
(h) Fees. The Lenders and the Administrative Agent shall have received
all fees required to be paid, and all expenses for which invoices have been
presented, on or before the Effective Date, including the OID Fee.
(i) Closing Certificate. The Administrative Agent shall have received
a certificate of each Loan Party, dated the Effective Date, substantially
in the form of Exhibit C, with appropriate insertions and attachments.
(j) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion (including as to matters of intellectual
property) of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit
E-1; and
(ii) the legal opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit E-2.
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Each such legal opinion shall be satisfactory in form and substance to the
Lenders and shall cover such matters incident to the transactions
contemplated by this Agreement as the Lenders may reasonably require.
SECTION VI. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Payment Obligations
are not Fully Satisfied, the Borrower shall and shall cause each of its
Subsidiaries to:
6.1. Financial Statements. Furnish to each Lender, through the
Administrative Agent:
(a) as soon as available, but in any event within 105 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by Ernst & Young LLP or other independent
certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 50 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated and consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated and consolidating
statements of income and of cash flows for such quarter and the portion of
the fiscal year through the end of such quarter, setting forth in each case
in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
(c) as soon as available, but in any event within 105 days after the
end of each fiscal year of the Borrower, a copy of the unaudited
consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related unaudited
consolidating statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects; and
(d) as soon as available, but in any event not later than 30 days
after the end of each calendar month in each fiscal year of the Borrower,
the preliminary unaudited consolidated and consolidating balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such month
and the related unaudited consolidated and consolidating statements of
income and of cash flows for such month and the portion of the fiscal year
through the end of such month, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible Officer
as being fairly stated in all material respects (subject to normal
quarterly and year-end audit and other appropriate adjustments).
All such financial statements (other than those specified in subsection (d) of
this Section 6.1) shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein).
6.2. Certificates; Other Information. Furnish to each Lender, through
the Administrative Agent, or, in the case of clause (g), to the relevant Lender:
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(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor nothing came to their attention
that caused them to believe that the Borrower failed to comply with the
terms, covenants, provisions, or conditions of Sections 7.1(a), 7.1(b) or
7.1(c), except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, each Loan
Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) in the case of quarterly or annual
financial statements, (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by the
Borrower and its Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal year
of the Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a Schedule setting forth each
Patent, Trademark and Copyright that has been registered or for which an
application for registration has been filed with the United States Patent
and Trademark Office or the United States Copyright Office, as applicable,
since the date of the most recent Schedule delivered pursuant to this
clause (y) (or, in the case of the first such Schedule so delivered, since
the Effective Date);
(c) as soon as available, and in any event no later than 60 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following
fiscal year, and the related consolidated statements of projected cash
flow, projected changes in financial position and projected income)
(collectively, the "Budget"), which Budget shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Budget is based on reasonable estimates, information and assumptions and
that such Responsible Officer has no reason to believe that such Budget is
incorrect or misleading in any material respect;
(d) within 60 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter;
(e) as soon as reasonably practicable, copies of substantially final
drafts of any proposed amendment, supplement, waiver or other modification
with respect to the Senior Subordinated Note Indenture;
(f) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to the holders of any class
of its debt securities or public equity securities and within five days
after the same are filed, copies of all financial statements and reports
which the Borrower may make to, or file with, the SEC; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
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6.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves with respect thereto to the extent, if any, required by GAAP have
been provided on the books of the Borrower or its Subsidiaries, as the case may
be. Notwithstanding anything to the contrary in the foregoing sentence, the
Borrower shall not be in default under this Section 6.3 unless the aggregate
amount of non-contested Indebtedness or obligations which the Borrower and its
Subsidiaries have so failed to pay, discharge or satisfy before they become
delinquent and which remain delinquent at the time of determination is more than
$5,000,000 in the aggregate.
6.4. Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Sections 7.4 and 7.5 and except, in the
case of clause (ii) above, to the extent that failure to do so would not be
reasonably likely to have a Material Adverse Effect; and (b) comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith would not, in the aggregate, be reasonably likely to
have a Material Adverse Effect.
6.5. Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, except where
the failure to do so would not, in the aggregate, be reasonably likely to have a
Material Adverse Effect and (b) maintain with financially sound and reputable
insurance companies insurance on such of its property and against such
liabilities in at least such amounts and against at least such risks as are
customarily insured against in the same general area by companies engaged in the
same or a similar business and furnish to the Administrative Agent, upon written
request, and to each Lender which makes a written request through the
Administrative Agent, reasonable information as to the insurance carried.
6.6. Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of accounts and records in which entries in conformity in all
material respects with all Requirements of Law shall be made of all dealings and
transactions in relation to its businesses and activities and which shall permit
the preparation of financial statements in conformity with GAAP and (b) permit
representatives of any Lender to visit and inspect any of its properties as such
Lender may request through the Administrative Agent and (during such visit or
inspection, or otherwise upon request through the Administrative Agent) examine
and make abstracts from any of its books and records it may reasonably request
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
6.7. Notices. Promptly give notice to each Lender, through the
Administrative Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any default or event of default by the Borrower or any of its
Subsidiaries under any Contractual Obligation of the Borrower or any of its
Subsidiaries or the institution of, or the occurrence of any material
adverse change in the status or likely result of, any litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority or any
other Person which, in any of the foregoing cases, would be reasonably
likely to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $5,000,000 or more and not
covered by insurance or in which injunctive
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or similar relief is sought, which in any of the foregoing cases would be
reasonably likely to have a Material Adverse Effect;
(d) any of the following events, as soon as practicable, and in any
event, within 30 days after the Borrower knows or has reason to know
thereof:
(i) the occurrence or expected occurrence of any Reportable Event
with respect to any Plan; or
(ii) the institution of proceedings or the taking or expected
taking of any other action by PBGC or the Borrower or any Commonly
Controlled Entity to terminate, withdraw or partially withdraw from
any Single Employer or Multiemployer Plan and with respect to a
Multiemployer Plan, the Reorganization or Insolvency of such Plan;
if such Reportable Event, termination, withdrawal or partial withdrawal
(and, in the case of any Multiemployer Plan, its Reorganization or
Insolvency) would be reasonably likely to result in liability to the
Borrower and its Subsidiaries, in the aggregate, in excess of $60,000,000;
and
(e) any development or event which has had or would be reasonably
likely to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
6.8. Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except (i) to the extent that the failure to perform any of the
obligations contained in this Section 6.8(b) would not be reasonably likely to
have a Material Adverse Effect or (ii) to the extent that such obligations are
being contested in good faith by appropriate proceedings and the pendency of
such proceedings would not be reasonably likely to have a Material Adverse
Effect.
6.9. Additional Collateral, etc. (a) With respect to any Property
acquired after the Effective Date by the Borrower or any of its Subsidiaries
(other than a Foreign Subsidiary) (other than (x) any real property or any
Property described in paragraph (b), (c) or (d) below, (y) any Property subject
to a Lien expressly permitted by Section 7.3(g) and (z) as contemplated by
Section 10.1(b)) as to which the Administrative Agent, for the benefit of the
Lenders, does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent deems necessary or advisable
in order to grant to the Administrative Agent, for the benefit of the Lenders, a
security interest in such Property and (ii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in such Property, including without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent.
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(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Effective Date by the Borrower or any of its Subsidiaries (other than any
such real property owned by a Foreign Subsidiary or subject to a Lien expressly
permitted by Section 7.3(g) and other than as contemplated by Section 10.1(b)),
promptly (i) execute and deliver a first priority mortgage in form and substance
satisfactory to and in favor of the Administrative Agent, for the benefit of the
Lenders, covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (x) title and extended coverage insurance
covering such real property in an amount at least equal to the purchase price of
such real estate (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than a Foreign
Subsidiary) created or acquired after the Effective Date by the Borrower (which,
for the purposes of this paragraph (c), shall include any existing Subsidiary
that ceases to be a Foreign Subsidiary) or any of its Domestic Subsidiaries
(other than EFILM or Pany, as provided in Section 10.1(b)), promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable in
order to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary which is owned by the Borrower or any of its Subsidiaries (other than
EFILM or Pany, as provided in Section 10.1(b)), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, (iii) cause such
new Subsidiary (other than, to the extent contemplated by Section 10.1(b), Pany,
EFILM or any Subsidiary of Pany or EFILM) (A) to become a party to the Guarantee
and Collateral Agreement and (B) to take such actions necessary or advisable to
grant to the Administrative Agent for the benefit of the Lenders a perfected
first priority security interest in the Collateral described in the Guarantee
and Collateral Agreement with respect to such new Subsidiary, including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new first-tier Foreign Subsidiary created or
acquired after the Effective Date by the Borrower or any of its Domestic
Subsidiaries (other than, to the extent contemplated by Section 10.1(b), Pany,
EFILM or any Subsidiary of Pany or EFILM), promptly (i) execute and deliver to
the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
which is owned by the Borrower or any of its Domestic Subsidiaries (provided
that in no event shall more than 65% of the total outstanding Capital Stock of
any such new Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, and take such
other action as may be necessary or, in the opinion of the Administrative Agent,
desirable to perfect the Lien of the Administrative Agent thereon, and (iii) if
requested by the Administrative Agent, deliver to the
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Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(e) If any amount in excess of $500,000 payable to the Borrower or any
Domestic Subsidiary (other than EFILM or Pany, as provided in Section 10.1(b))
under or in connection with any of the Collateral shall be or become evidenced
by an Instrument (other than checks received in the ordinary course of business)
or Chattel Paper (in each case as defined in the Guarantee and Collateral
Agreement), such Instrument or Chattel Paper shall be immediately delivered to
the Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to the Guarantee and
Collateral Agreement.
6.10. Pany. Upon the payment in full of all outstanding amounts and
other obligations under the Pany Loan Agreement, promptly (and in any event by
no later than thirty (30) days after the date such loan agreement is paid off)
cause Pany to become a party to the Guarantee and Collateral Agreement.
6.11. Cash Control Agreements. Use commercially reasonably efforts to
establish (and, in any event, establish within ninety (90) days after the
Closing Date) deposit account control agreements with respect to each of the
accounts of the Borrower listed on Schedule 6.11 hereto, in form and substance
reasonably satisfactory to the Administrative Agent. In the event that the
Borrower or any Subsidiary Guarantor opens any accounts after the date hereof,
the Borrower or such Subsidiary Guarantor shall use commercially reasonable
efforts to establish (and, in any event, establish within ninety (90) days after
the date of opening such account) a deposit account control agreement with
respect to such account, in form and substance reasonably satisfactory to the
Administrative Agent.
6.12. Foreign Pledges and Opinions. Cause to be delivered to the
Administrative Agent on or before January 30, 2004, in form and substance
reasonably satisfactory to the Administrative Agent: (i) the U.K. Pledge
Agreement, executed and delivered by a duly authorized officer of each party
thereto, (ii) the New Zealand Pledge Agreement, executed and delivered by a duly
authorized officer of each party thereto, (iii) the Canadian Pledge Agreement,
executed and delivered by a duly authorized officer of each party thereto and
(iv) the legal opinion of local counsel in each of the United Kingdom, New
Zealand and Canada, with respect to items (i) through (iii) above, respectively.
SECTION VII. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Payment Obligations
have not been Fully Satisfied, the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
7.1. Financial Condition Covenants.
(a) Consolidated Total Leverage Ratio. Permit the Consolidated Total
Leverage Ratio as at the last day of any fiscal quarter which day shall
occur during the following periods to exceed the following respective
ratios:
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Consolidated Total
Period Leverage Ratio
------ ------------------
December 31, 2003 6.75 to 1.00
March 31, 2004 to September 30, 2004 6.25 to 1.00
December 31, 2004 to September 30, 2005 6.00 to 1.00
December 31, 2005 and each quarter thereafter 5.50 to 1.00
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower ending with any fiscal quarter set forth below to be less
than the ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- ---------------------
December 31, 2003 to December 31, 2004 1.65 to 1.00
March 31, 2005 and each quarter therafter 1.75 to 1.00
(c) Consolidated EBITDA. Permit Consolidated EBITDA for any period of
four consecutive fiscal quarters of the Borrower ending with any fiscal
quarter set forth below to be less than the amount set forth below opposite
such fiscal quarter:
Fiscal Quarter Amount
-------------- -----------
December 31, 2003 to June 30, 2004 $50,000,000
September 30, 2004 $52,000,000
December 31, 2004 $54,000,000
March 31, 2005 $56,000,000
June 30, 2005 $57,000,000
September 30, 2005 $58,000,000
December 31, 2005 and each quarter thereafter $60,000,000
7.2. Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of any
Subsidiary Guarantor (other than EFILM) to the Borrower or any other
Subsidiary, (iii) of any Foreign Subsidiary to the Borrower, any Subsidiary
Guarantor or any Specified Foreign Subsidiary in an aggregate principal
amount at any time outstanding not to exceed (I) $15,000,000 less (II) the
aggregate amount of investments permitted under Section 7.8(f)(iii) that
are not Indebtedness and only to the extent such investments have not been
repaid in cash to the Borrower, any Subsidiary Guarantor or any Specified
Foreign Subsidiary (whichever such Person made such investment), and (iv)
of any Foreign Subsidiary to any other Foreign Subsidiary (other than any
Specified Foreign Subsidiary);
(c) Indebtedness in respect of Rate Hedging Agreements entered into
for non-speculative purposes;
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(d) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(d) and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof); provided, that
neither the Borrower nor any Subsidiary shall incur any refinancing
Indebtedness pursuant to this clause (d) if the proceeds thereof are used,
directly or indirectly, to refinance any subordinated Indebtedness unless
the Indebtedness so incurred shall be subordinated to the Obligations, to
at least the same extent as the subordinated Indebtedness being refinanced.
(e) (i) Indebtedness of the Borrower in respect of Senior Subordinated
Notes outstanding on the Effective Date and (ii) Guarantee Obligations of
any Subsidiary Guarantor in respect of such Indebtedness; provided that
such Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated Notes;
(f) Indebtedness of the Borrower in respect of the Senior Subordinated
Line of Credit Agreement in an aggregate principal amount not to exceed
$20,000,000 at any one time outstanding;
(g) Guarantee Obligations of any Subsidiary of the Borrower in respect
of Indebtedness of the Borrower or any Wholly Owned Subsidiary Guarantor to
the extent such Indebtedness is not prohibited by this Agreement;
(h) Indebtedness in respect of any Foreign Working Capital Lines,
provided that the aggregate principal amount outstanding of such
Indebtedness (calculated without duplication of any guarantee thereof at
any time outstanding) does not exceed $4,000,000;
(i) so long as no Default or Event of Default shall have occurred and
be continuing, or would result therefrom, Indebtedness of EFILM to (A) the
Borrower or a Wholly Owned Subsidiary Guarantor (provided, that the
aggregate outstanding principal amount of all such Indebtedness permitted
by this clause (A), (x) when added together with the amount of investments
made pursuant to Section 7.8(j) and then outstanding, does not exceed
$7,750,000 at any one time and (y) shall not exceed at the time of issuance
an amount of Indebtedness, after taking into account all other Indebtedness
owed by EFILM to its equity holders, that is proportionate to the
Borrower's equity interest in EFILM at such time) or (B) any other holder
of Capital Stock of EFILM;
(j) Indebtedness of the Borrower in respect of the Senior Notes and
the Guarantees thereof by the Subsidiary Guarantors;
(k) additional Indebtedness of the Borrower or any of its Subsidiaries
(including, without limitation, Capital Leases and Indebtedness secured by
Liens permitted by Section 7.3(g)) in an aggregate principal amount (for
the Borrower and all Subsidiaries) not to exceed $10,000,000 at any one
time outstanding; and
(l) Indebtedness of the Borrower to a replacement issuing lender
relating to the Letters of Credit in the event that JPMorgan Chase Bank is
replaced as the Issuing Lender with respect to any such Letter of Credit.
7.3. Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, except for:
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(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred
and statutory or contractual bankers' Liens on monies held in bank accounts
in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the
use of Property or minor imperfections in title thereto which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), provided that no such
Lien is spread to cover any additional Property after the Effective Date
(other than a substitution of like property) and that the amount of
Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(k) to finance the acquisition
(by purchase, construction or otherwise) of fixed or capital assets,
provided that (i) such Liens shall be created within 180 days after such
acquisition of such fixed or capital assets or such Liens existed on such
Property before the time of its acquisition and were not created in
anticipation thereof, (ii) such Liens do not at any time encumber any
Property other than the Property financed by such Indebtedness and any
accessions or attachments thereto, substitutions therefore and any sale or
insurance proceeds thereof and (iii) the amount of Indebtedness secured
thereby is not increased;
(h) Liens created pursuant to the Security Documents and the
Collateral Agency Agreement;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) attachment, judgment or other similar Liens arising in connection
with court or arbitration proceedings, provided that the same are
discharged, or that execution or enforcement thereof is stayed pending
appeal, within 30 days or (in the case of any execution or enforcement
pending appeal) such lesser time during which such appeal may be taken;
(k) possessory Liens in favor of brokers and dealers arising in
connection with the acquisition or disposition of investments of the type
permitted in Section 7.8(b); provided that such Liens (i) attach only to
such investments and (ii) secure only obligations incurred in the
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ordinary course and arising in connection with the acquisition or
disposition of such investments and not any obligation in connection with
margin financing;
(l) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness of such Subsidiary
permitted by Section 7.2(i); provided that (i) such Liens and Indebtedness
existed at the time such Person became a Subsidiary and was not created in
anticipation thereof, (ii) any such Lien is not spread to cover any other
property or assets of such Person after the time such Person becomes a
Subsidiary, (iii) the amount of the Indebtedness secured thereby is not
increased and (iv) immediately after giving effect to the incurrence of
such Lien, no Default or Event of Default shall have occurred and be
continuing;
(m) Liens in the nature of counterpart deposits or pledges of cash
deposits of any Foreign Subsidiary to secure Indebtedness of any Foreign
Subsidiary, which Indebtedness is permitted pursuant to Section 7.2,
provided that the amount of any such deposit does not exceed the amount of
the Indebtedness it secures;
(n) Liens in the nature of options in respect of up to 15% of the
Capital Stock of Panavision Canada Holdings held by its directors, officers
or employees;
(o) Liens on the assets of any Foreign Subsidiary to secure its
obligations in respect of Indebtedness of such Foreign Subsidiary under any
Foreign Working Capital Lines of Credit permitted under Section 7.2(h);
(p) Liens in the nature of options granted to the other holder of
Capital Stock of EFILM in respect of up to 29% of the Capital Stock of
EFILM;
(q) any rights of first offer or first refusal granted by the Borrower
or Las Palmas to the other holder of Capital Stock of EFILM in respect of
the Capital Stock of EFILM owned by the Borrower or Las Palmas contained in
the documents governing the relationship of the holders of the Capital
Stock of EFILM and any other rights granted to the other holder of the
Capital Stock of EFILM substantially on the terms set forth in the EFILM
Agreements and any material modifications thereto that are reasonably
satisfactory to the Administrative Agent;
(r) Liens on the assets of EFILM to secure Indebtedness of EFILM
permitted by Section 7.2(i);
(s) Liens arising under the Senior Note Indenture and the security
documents relating thereto;
(t) (i) Liens created by cash collateral agreements entered into by
the Borrower and the Issuing Lender pursuant to Section 3.1 and (ii) Liens
created by cash collateral agreements entered into by the Borrower and a
replacement issuing lender with respect to the Letters of Credit; and
(u) any extension, renewal or replacement of the foregoing; provided,
that the Liens permitted by this paragraph shall not extend to or cover any
additional Indebtedness or Property (other than a substitution of like
Property);
7.4. Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business except:
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(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Wholly Owned Subsidiary
Guarantor (provided that the Wholly Owned Subsidiary Guarantor shall be the
continuing or surviving corporation);
(b) any Foreign Subsidiary may be merged or consolidated with or into
any other Foreign Subsidiary; provided, that in connection with any merger
or consolidation of Panavision Europe Limited, Panavision NZ, Panavision
(1998) Limited and Panavision Canada Holdings, appropriate arrangements
shall have been made to amend the U.K. Pledge Agreement, the New Zealand
Pledge Agreement and the Canadian Pledge Agreement, respectively.
(c) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Wholly Owned Subsidiary Guarantor and, in the event such Subsidiary shall
so Dispose of all of its assets, such Subsidiary may liquidate, wind up or
dissolve;
(d) any Foreign Subsidiary (other than Panavision Europe Limited,
Panavision NZ and Panavision Canada Holdings) may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to any other Foreign
Subsidiary and, in the event such Foreign Subsidiary shall so Dispose of
all of its assets, such Foreign Subsidiary may liquidate, wind up or
dissolve;
(e) any Foreign Subsidiary that does not have any assets or Property
may liquidate, wind up or dissolve;
(f) pursuant to the Permitted Reorganization;
(g) any Domestic Subsidiary may change its legal form of organization
or convert to a "C corporation"; provided, that is in compliance with
Section 5.6 of the Guarantee and Collateral Agreement; and
(h) any Disposition permitted by Subsections 7.5(c), (d) or (e).
7.5. Limitation on Sale of Assets. Dispose of any of its Property or
business (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock (other than
director's qualifying shares) to any Person (in each case other than the
Borrower or any Wholly Owned Subsidiary Guarantor), except:
(a) (i) the Disposition of Property which has become uneconomic,
obsolete or worn out in the ordinary course of business, (ii) the
Disposition of inventory in the ordinary course of business and (iii) the
Disposition of other Property in the ordinary course of business for fair
market value;
(b) Dispositions permitted by Sections 7.3 (including, without
limitation, Dispositions resulting from the exercise of rights contemplated
by Section 7.3(q)), 7.4 or 7.6;
(c) the Disposition of other assets having a fair market value not to
exceed $5,000,000 in the aggregate; provided, that the requirements of
Section 2.6(a) are complied with in connection therewith;
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(d) the Disposition by the Borrower or Las Palmas to the other holder
of Capital Stock of EFILM of up to 29% of the Capital Stock of EFILM upon
the exercise by such holder of the options in respect of up to 29% of the
Capital Stock of EFILM substantially upon the terms set forth in the EFILM
Option Agreement, provided that (i) the exercise price in respect of such
options is payable solely in cash on the date of exercise and (ii) the
requirements of Section 2.6(a) are complied with in connection therewith;
and
(e) the Disposition of Non-Core Assets by the Borrower or any of its
Subsidiaries, provided, that (i) the requirements of Section 2.6(a) are
complied with in connection therewith and (ii) at least 80% of the
consideration received is in the form of cash or Cash Equivalents.
Any Collateral which is sold, transferred or otherwise conveyed pursuant to this
Section 7.5 to a Person other than the Borrower and its Subsidiaries shall, upon
the consummation of such sale in accordance with the terms of this Agreement and
the other Loan Documents, be released from the Liens granted pursuant to the
Security Documents and each Lender hereby authorizes and instructs the
Administrative Agent to take such action as the Borrower reasonably may request
to evidence such release.
7.6. Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of the Borrower or any
Subsidiary or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary (collectively, "Restricted
Payments"), except that (i) any Subsidiary may make Restricted Payments to the
Borrower or any Wholly Owned Subsidiary Guarantor, (ii) Panavision Canada
Holdings may make Restricted Payments to repurchase its stock options or
repurchase its outstanding shares from time to time, up to but not exceeding
$3,750,000 in the aggregate through December 31, 2003, $5,000,000 in the
aggregate through December 31, 2004 and $6,200,000 in the aggregate through
December 31, 2005, (iii) any Foreign Subsidiary may make Restricted Payments to
any other Foreign Subsidiary that holds its Capital Stock and (iv) EFILM may
make Restricted Payments to the holders of its Capital Stock ratably in
accordance with their respective ownership interests; provided, that no such
Restricted Payment may be made by EFILM in accordance with this clause (iv) at
any time that any Indebtedness permitted by Section 7.2(i) is outstanding
7.7. Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditure, except (a) Capital Expenditures of (x) the Borrower and its
Subsidiaries (other than EFILM) in the ordinary course of business not exceeding
$25,000,000 in any fiscal year of the Borrower commencing with the fiscal year
ended December 31, 2004 and (y) EFILM in the ordinary course of business; (b)
Capital Expenditures made with the proceeds of any event which would be a
Recovery Event but for the second parenthetical clause in the definition
thereof; and (c) Capital Expenditures made with the proceeds of any Dispositions
of Property by the Borrower or its Subsidiaries pursuant to Section 7.5(a)(i)
and (d) Capital Expenditures made with the proceeds of any Dispositions of
Property by the Borrower or its Subsidiaries pursuant to Section 7.5(e);
provided, that with respect to clauses (b) and (c) above, Capital Expenditures
made in respect of EFILM with the proceeds of a Recovery Event or with the
proceeds of any Dispositions of Property by the Borrower or any of its
Subsidiaries pursuant to Section 7.5(a)(i) shall only be permitted under such
clauses (b) and (c) to the extent that such Recovery Event or Disposition of
Property specifically relates to EFILM property.
7.8. Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock,
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bonds, notes, debentures or other securities of or any assets constituting all
or a material part of a business unit of, or make any other investment in, any
Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees, directors and officers of the
Borrower or its Subsidiaries in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in
an aggregate amount for the Borrower and its Subsidiaries not to exceed
$1,500,000 at any one time outstanding;
(e) investments made by the Borrower or any of its Subsidiaries with
the proceeds of (x) any Recovery Event or any event which would be a
Recovery Event but for the parenthetical clauses in the definition thereof
or (y) any Disposition of Property pursuant to Section 7.5(e); provided,
that any such Investment with respect to clause (y) above may only be made
if (i) no Default or Event of Default shall then be continuing or result
therefrom, (ii) the amount of cash consideration paid in connection with
the acquisition does not exceed the Net Cash Proceeds received from the
sale of such Non-Core Assets, (iii) the representations and warranties set
forth in Section 4 shall be true and correct after giving effect to the
acquisition, (iv) no consents or approvals shall be needed for such
acquisition (other than those that have been obtained on or prior to the
date of such acquisition), (v) the Borrower or such Subsidiary uses such
Net Cash Proceeds to acquire 100% of the Capital Stock of one or more
entities engaged in the business of manufacturing, designing, renting
and/or selling cameras, lenses, lighting, lighting grips, power
distribution, generation and related transportation equipment and/or cranes
and remote camera heads or components of or equipment related to any of the
foregoing, or to acquire any such business or assets, whether or not such
business or assets are located within the United States (collectively, the
"Core Assets"), (vi) the Person that owns such Core Assets shall have
become a Subsidiary Guarantor hereunder and (vii) the Borrower or
Subsidiary that owns the Capital Stock issued by the Person that owns such
Core Assets shall have pledged the Capital Stock held by the Borrower or
Subsidiary, as applicable.
(f) (i) any Subsidiary may make investments in the Borrower (by way of
capital contribution loan, or otherwise), (ii) the Borrower and any
Subsidiary may make investments in, or create, any Subsidiary Guarantor
other than EFILM (by way of capital contribution, loan or otherwise),
provided that, in any such case, the requirements of Section 6.9 are
satisfied, (iii) the Borrower, any Subsidiary Guarantor, or any Specified
Foreign Subsidiary may make investments in, or create, any Foreign
Subsidiary (by way of capital contribution, loan or otherwise); provided,
that (x) the requirements of Section 6.9 are satisfied and (y) the
aggregate amount of all investments in such Foreign Subsidiaries that are
not Indebtedness and that have not been repaid in cash to the Borrower, any
Subsidiary Guarantor or any Specified Foreign Subsidiary (whichever such
Person made such investment) shall not exceed (I) $15,000,000 less (II) the
aggregate principal amount of any Indebtedness of any Foreign Subsidiary at
any such time outstanding in accordance with Section 7.2(b)(iii) and (iv)
any Foreign Subsidiary (other than any Specified Foreign Subsidiary) may
make investments in, or create, any Foreign Subsidiary (by way of capital
contribution, loan or otherwise);
(g) investments by the Borrower and its Subsidiaries in the ordinary
course of business in accounts, contract rights and chattel paper (as
defined in the Uniform Commercial Code), put
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and call foreign exchange options and foreign exchange forwards and futures
to the extent necessary to hedge foreign exchange exposures and notes
receivable, and in Rate Hedging Agreements;
(h) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers or in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising
out of the ordinary course of business; provided, that the Borrower and its
Subsidiaries have paid no new consideration (other than the forgiveness of
Indebtedness or other obligations) therefor;
(i) so long as no Default or Event of Default shall have occurred and
be continuing, or would result therefrom, additional capital contributions
to or equity investments by Las Palmas in EFILM to fund any Earnout
Payments;
(j) other investments (by way of capital contribution, loan or
otherwise) by the Borrower or any of its Subsidiaries (that have not been
repaid in cash to the Borrower or such Subsidiary) in EFILM (and, without
duplication, by EFILM in any other Person) or DHD Ventures, which (x)
without duplication, when added together with the aggregate principal
amount of Indebtedness incurred pursuant to Section 7.2(i)(A) and then
outstanding, do not exceed $7,750,000 at any one time (such investments to
be measured by their fair market value at the time of the investment) and
(y) shall not exceed at the time such investment is made an aggregate
amount of Investments, after taking into account all other investments made
to EFILM by its equity holders, that is proportionate to the Borrower's
equity interest in EFILM at such time;
(k) investments resulting from the exercise of rights contemplated by
Section 7.3(q); and
(l) investments made by Panavision International L.P. in the Capital
Stock of Panavision Europe, Ltd. as a result of the conversion of
approximately $12,500,000 of Indebtedness of Panavision Europe, Ltd. owed
to Panavision International, L.P.
7.9. Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment, repurchase
or redemption of or otherwise defease or segregate funds with respect to the
Senior Subordinated Notes (other than scheduled interest payments required to be
made in cash or pursuant to any refinancing of the Senior Subordinated Notes
contemplated by the definition thereof), (b) make or offer to make any optional
or voluntary payment, prepayment, repurchase or redemption of or otherwise
defease or segregate funds with respect to the Senior Notes, (c) amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Senior Notes, the Senior
Subordinated Notes or the Senior Subordinated Line of Credit Agreement (other
than any such amendment, modification, waiver or other change which (x) (i)
would extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment of
interest thereon and are otherwise no less favorable to the Lenders (including
without limitation, in the case of the Senior Subordinated Notes, the
subordination provisions thereof) and (ii) does not involve the payment of a
consent fee or (y) (i) would waive the covenants therein or make the covenants
therein less restrictive and (ii) does not involve the payment of a consent fee)
or (d) designate any Indebtedness as "Designated Senior Debt" for the purposes
of the Senior Subordinated Note Indenture (other than the Obligations and the
Senior Notes).
7.10. Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any
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Wholly Owned Subsidiary Guarantor) unless such transaction is otherwise
permitted under this Agreement, is in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and is upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate; provided, however, that this Section 7.10 shall not
apply to (i) any transaction contemplated by the Tax Sharing Agreement, (ii)
Restricted Payments permitted by Section 7.6, (iii) Investments permitted by
Section 7.8, (iv) any transaction pursuant to which the Equity Investor or
Holdings will provide the Borrower and its Subsidiaries at their request and at
the cost to the Equity Investor or Holdings with certain allocated services to
be purchased from third party providers, such as legal and accounting services,
insurance coverage and other services, (v) the transactions referred to in
Subsections 5.1(b), (d) and (e), (vi) any transaction between the Borrower or a
Subsidiary and its own employee stock option plan, (vii) transactions
contemplated by the trademark license agreement and services agreements between
Panavision International, L.P. and either Panavision Imaging, LLC or Panavision
SVI, LLC relating to the design, manufacture or supply of digital imaging
devices or technology, (viii) the transactions and agreements described on
Schedule 7.10 hereto, and (ix) mergers, consolidations, amalgamations,
liquidations, dissolutions and Dispositions permitted by Section 7.4.
7.11. Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
7.12. Limitation on Changes in Fiscal Periods. Permit the fiscal year
of the Borrower to end on a day other than December 31 or change the Borrower's
method of determining fiscal quarters.
7.13. Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its Property, assets or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
guarantor, its obligations under the Guarantee and Collateral Agreement, other
than (a) this Agreement and the other Loan Documents, (b) the Senior Note
Indenture and the related security agreements, (c) the Senior Subordinated Note
Indenture (d) any agreements governing any purchase money Liens or Capital
Leases otherwise permitted hereby (in which case, any prohibition or limitation
shall only be effective against the assets financed thereby) and (e) the
documents governing the relationship among the holders of the Capital Stock of
EFILM and any agreement relating to the Indebtedness of EFILM permitted by
Section 7.2(i) (in which case any prohibition or limitation shall only be
effective against the assets of EFILM or its Subsidiaries); provided, that any
of the Borrower and its Subsidiaries may enter into or suffer to exist or become
effective any such agreement to the extent that such agreement is in connection
with a Lien permitted by Section 7.3 or a sale of assets permitted by Section
7.5 and any such prohibitions or limitations apply only to the Property
encumbered by such Lien or subject to such sale.
7.14. Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) pay
dividends or make any other distributions in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
other Subsidiary of the Borrower, (b) make loans or advances to the Borrower or
any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents, the Senior Note Indenture, the related security
documents or the Senior Subordinated Note Indenture, (ii) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement which has
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been entered into in connection with the Disposition of all or substantially all
of the Capital Stock or assets of such Subsidiary, (iii) any restrictions with
respect to the Borrower or any of its Subsidiaries imposed pursuant to an
agreement which has been entered into in connection with a Lien permitted by
Section 7.3 or a sale of assets permitted by Section 7.5 and, with respect to
clause (c), any such prohibitions or limitations apply only to the Property
encumbered by such Lien or subject to such sale or (iv) the documents governing
the relationship among the holders of the Capital Stock of EFILM and any
agreement relating to the Indebtedness of EFILM permitted by Section 7.2(i) (in
which case any prohibition or limitation shall only be effective against the
assets of EFILM or its Subsidiaries).
7.15. Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or which
are reasonably related thereto.
7.16. Limitation on Changes to Certificate of Incorporation. Amend its
certificate of incorporation in any manner materially adverse to the Lenders
without the prior written consent of the Required Lenders.
SECTION VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within three days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) Any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to the Borrower only), Section VII or Section 5.6 of the Guarantee
and Collateral Agreement; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall Cross Default; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets,
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or the Borrower or any of its Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against
the Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity of the Borrower shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist, with respect to a Plan; provided that, in
each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, would be
reasonably likely to have a Material Adverse Effect; or
(h) (i) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not covered by insurance) of $5,000,000 or more or (ii) any non-monetary
judgment or order shall be rendered against the Borrower or any of its
Subsidiaries that is reasonably likely to have a Material Adverse Effect,
and in the case of either clause (i) or (ii), there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect
unless such judgment or order shall have been vacated, satisfied,
discharged or bonded pending appeal; or
(i) Any of the Security Documents shall cease, for any reason (other
than any act on the part of the Administrative Agent or any Lender), to be
in full force and effect, or any Loan Party shall so assert, or any Lien
created by any of the Security Documents shall cease, for any reason (other
than any act on the part of the Administrative Agent or any Lender), to be
enforceable and of the same effect and priority purported to be created
thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than any act on the
part of the Administrative Agent or any Lender), to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) Any Change of Control shall occur; or
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(l) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations in
respect of the Loan Documents or the obligations of the Subsidiary
Guarantors under the Guarantee and Collateral Agreement, as the case may
be, as provided in the Senior Subordinated Note Indenture, or any Loan
Party, any Affiliate of any Loan Party, the trustee in respect of the
Senior Subordinated Notes or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes shall so assert; or
(m) the Senior Subordinated Line of Credit Agreement shall for any
reason cease to be in full force and effect in an amount of no less than
$20,000,000 prior to January 12, 2009;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B)
if such event is any other Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time (if it has not already done so
pursuant to Section 3.1) deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the other
Loan Documents. After all such Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Borrower hereunder and under the other Loan
Documents then due and payable shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower (or such
other Person as may be lawfully entitled thereto).
SECTION IX. THE ADMINISTRATIVE AGENT
9.1. Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against Administrative Agent.
9.2. Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
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shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3. Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4. Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower or the Loan Parties), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.
9.5. Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of a Loan
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Party or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7. Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section 9.7 (or, if
indemnification is sought after the date upon which the Loans shall have been
paid in full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements which are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section 9.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8. Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent was not the Administrative Agent. With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
9.9. Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval
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shall not be unreasonably withheld or delayed), whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Administrative Agent under this Agreement and
the other Loan Documents.
9.10. Authorization to Release Liens. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
SECTION X. MISCELLANEOUS
10.1. Amendments and Waivers. (a) Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(with the written consent of the Required Lenders) the Administrative Agent and
each Loan Party party to the relevant Loan Document may, from time to time, (i)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (ii) waive, on such terms and
conditions as the Required Lenders, or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce or forgive the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Loan, reduce the stated rate
of any interest, fee or letter of credit commission payable hereunder or extend
the scheduled date of any payment thereof, in each case without the consent of
each Lender directly affected thereby; (ii) amend, modify or waive any provision
of this Section 10.1 or reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all, or such
number of the Subsidiary Guarantors as represent substantially all of the credit
support for the Obligations provided by the Subsidiary Guarantors at such time,
from their obligations under the Guarantee and Collateral Agreement, in each
case without the written consent of all Lenders; (iii) reduce the percentage
specified in the definition of Majority Facility Lenders without the written
consent of all Lenders under each affected Facility; (iv) change the application
or allocation of payments among the Term Loans specified in Sections 2.6(c),
2.12(a) or 2.12(b) without the consent of the Majority Facility Lenders with
respect to the Term Loan Facility; (v) amend, modify or waive any provision of
Section 9 without the written consent of the Administrative Agent; (vi) amend,
modify or waive any provision of Section 3 without the written consent of the
Issuing Lender. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the
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Lenders and the Administrative Agent shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.
(b) Notwithstanding anything to the contrary contained in any Loan
Document, it is understood and agreed that (a) EFILM and Pany are not and
(except as provided in Section 6.10) shall not be parties to the Guarantee and
Collateral Agreement, (b) the Initial EFILM Capital Stock, all other Capital
Stock of EFILM that has been disposed of to the other holder of Capital Stock of
EFILM prior to the Effective Date and all property and assets transferred to or
otherwise owned by EFILM or, except as provided in Section 6.10, Pany shall not
be subject to the Lien created by the Guarantee and Collateral Agreement, (c)
Section 6.9 shall not at any time apply to Pany or any Subsidiary of Pany
(except as provided in Section 6.10), EFILM or any Subsidiary of EFILM and (d)
the Capital Stock of EFILM owned by the Borrower or any of its Subsidiaries as
of the date hereof shall continue to be subject to the Lien in favor of the
Administrative Agent created by the Guarantee and Collateral Agreement. The
Administrative Agent shall, at the expense of the Borrower, take such action as
the Borrower, EFILM or Pany may reasonably request to evidence the foregoing,
including any releases contemplated by the foregoing.
10.2. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: Panavision Inc.
0000 XxXxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Panavision Inc.
0000 XxXxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
Telecopy: 000-000-0000
Telephone: 000-000-0000
The Administrative Agent: JPMorgan Chase Bank,
Loan and Agency Services Group
0000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
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with a copy to: JPMorgan Chase Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4. Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
10.5. Payment of Expenses. The Borrower agrees (a) to pay or reimburse
the Administrative Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent but not including any fees
and disbursements of counsel to the Lenders, (b) to pay or reimburse each Lender
and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent, (c) to pay, indemnify, and
hold each Lender and the Administrative Agent harmless from, any and all
recording and filing fees or any amendment, supplement or modification of, or
any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent and their respective officers, directors,
employees, affiliates, agents, trustees and advisors (each, an "indemnitee")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement and the other Loan
Documents, including, without limitation, any of the foregoing relating to the
use of proceeds of the Loans and other extensions of credit hereunder or the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower any of its Subsidiaries or any of
the Properties and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any indemnitee against the
Borrower hereunder (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"); provided that the Borrower shall have no obligation
hereunder to any indemnitee with respect to (i) indemnified liabilities to the
extent such indemnified liabilities are found by a final decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such indemnitee, (ii) legal proceedings commenced against any such
indemnified person by any security holder or creditor (other
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than the Borrower, its Subsidiaries and its Affiliates) thereof arising out of
and based upon rights afforded any such security holder or creditor solely in
its capacity as such, (iii) legal proceedings commenced against any Lender or
any Issuing Lender (in their respective capacities as such) by any other Lender
or by the Administrative Agent (provided that for purposes of this clause (iii)
only, each of such other Lender, Issuing Lender and the Administrative Agent
shall be entitled to indemnity hereunder to the extent that such legal
proceedings have been commenced by it to enforce the provisions of the Loan
Documents) or (iv) amounts of the types referred to in clauses (a) through (c)
above except as provided therein. Without limiting the foregoing, and to the
extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waive and agree to cause its
Subsidiaries to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any indemnitee. The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.
10.6. Successors and Assigns; Participations and Assignments The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee") all
or a portion of its rights and obligations under this Agreement (including all
or a portion of the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an affiliate of a Lender, an
Approved Fund (as defined below) or, if an Event of Default under Section
8(a) or (f) has occurred and is continuing, any other Person; and
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of all or any
portion of a Term Loan to a Lender, an Affiliate of a Lender or an Approved
Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount
of the assigning Lender's Loans, the amount of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $1,000,000 unless each of
the Borrower and the Administrative Agent otherwise consent, provided that
(1) no such consent of the Borrower shall be required if an Event of
Default under Section 8(a) or (f) has occurred and is continuing and (2)
such amounts shall be aggregated in respect of each Lender and its
affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and
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(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire.
For the purposes of this Section 10.6, "Approved Fund" means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.14, 2.15 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the principal amount of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent, the Issuing Lender and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Lender and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 10.1 and (2) directly affects such Participant.
Subject to paragraph (c)(ii) of
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this Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.7(b) as though it were a Lender, provided
such Participant shall be subject to Section 10.7(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. Any Participant that is a Non-U.S. Lender
shall not be entitled to the benefits of Section 2.15 unless such Participant
complies with Section 2.15(d).
(d) Any Lender may, without the consent of the Borrower or the
Administrative Agent, at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or Assignee for such Lender as a party hereto.
(e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
10.7. Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement Obligations
owing to it, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans or the Reimbursement
Obligations owing to such other Lender, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan and/or of the Reimbursement
Obligations owing to each such other Lender, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, upon both the occurrence of an Event of Default and acceleration of the
obligations owing in connection with this Agreement, each Lender shall have the
right, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, to set off and
appropriate and apply against any indebtedness, whether matured or unmatured, of
the Borrower to such or any other Lender, any amount owing from such Lender to
the Borrower at, or at any time after, the happening of both of the above
mentioned events, and such right of set-off may be exercised by such Lender
against the Borrower or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receivers, custodian or execution,
judgment or attachment creditor of the Borrower, or against anyone else claiming
through or against the Borrower or such trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receivers, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the making, filing
or
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issuance, or service upon such Lender of, or of notice of, any such petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or warrant.
Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such setoff and application made by such Lender; provided that the
failure to give such notice shall not affect the validity of such setoff and
application.
10.8. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10. Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and supersede any and all
other oral or written agreements heretofore made, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12. Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower, as the case may be at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 10.12 any special, exemplary, punitive or consequential
damages.
10.13. Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
10.14. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15. Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all Confidential Information provided to it
by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate of any Lender, (b)
to any Participant or Assignee (each, a "Transferee") or prospective Transferee
which agrees to comply with the provisions of this Section 10.15, (c) to the
employees, directors, agents, attorneys, accountants and other professional
advisors of such Lender or its affiliates, (d) upon the request or demand of any
Governmental Authority having jurisdiction over the Administrative Agent or such
Lender, (e) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(f) if requested or required to do so in connection with any litigation or
similar proceeding, (g) which has been publicly disclosed other than in breach
of this Section 10.15, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document or
(j) to any creditor or direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such creditor or contractual counterparty or professional advisor to such
contractual counterparty agrees to be bound by the provisions of this Section
10.15); provided that, if reasonably requested by the Borrower, the
Administrative Agent and the Lenders shall make commercially reasonable efforts
to determine, and inform the Borrower of, the Persons who received such
Confidential Information. As used herein, the term "Confidential Information"
means all information contained in materials relating to the Borrower and its
Subsidiaries provided to the Administrative Agent or any Lender by any Loan
Party or its representatives or agents other than (x) information which is at
the time so provided or thereafter becomes generally available to the public
other than as a result of a disclosure by the Administrative Agent or one or
more Lenders, (y) information which was available to the Administrative Agent or
any Lender prior to
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its disclosure to the Lenders by the Borrower, its representatives or agents and
(z) information which becomes available to the Administrative Agent or any one
or more Lenders from a source other than the Borrower, its representatives or
agents.
10.16. Releases of Collateral Security and Guarantee Obligations.
Notwithstanding anything to the contrary contained herein or in the Guarantee
and Collateral Agreement, upon request of the Borrower, the Administrative Agent
shall (without any notice to or vote or consent of any Lender) take action
having the effect of releasing any Collateral and/or guarantee obligations
provided for in the Guarantee and Collateral Agreement to the extent necessary
to permit the consummation of any transactions not prohibited hereunder, by the
relevant Person in accordance with the provisions of this Agreement and the
other Loan Documents.
10.17. Releases. At such time as the Payment Obligations have been
Fully Satisfied, the Collateral shall be released from the Liens created by the
Security Documents and the Security Documents and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent,
the Borrower or any Subsidiary thereunder shall terminate, all without delivery
of any instrument or performance of any act by any party, and all rights to the
Collateral shall be as set forth in the Collateral Agency Agreement. At the
request and sole expense of the Borrower or any Subsidiary following any such
termination, the Administrative Agent shall deliver to the Borrower or such
Subsidiary any Collateral held by the Administrative Agent thereunder and
execute and deliver to the Borrower or such Subsidiary such documents as the
Borrower or Subsidiary shall reasonably request to evidence such termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
PANAVISION INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President & General Counsel
JPMORGAN CHASE BANK, as
Administrative Agent and as a Lender
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
-----------------------------------------------------
Name of Lender
By:
-------------------------------------------------
Name:
Title:
-----------------------------------------------------
Name of Lender
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
Schedule 1.1A
COMMITMENTS: LENDING OFFICES AND ADDRESSES
TERM LOAN ALLOCATIONS
Name of Lender and
Information for Notices Term Loan
----------------------- ------------
JPMorgan Chase Bank $
Total $135,600,000
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