MODIFICATION NO. 9
THIS SEVENTH AMENDMENT AGREEMENT is made as of the 31st day of
October, 1996.
B E T W E E N:
CINEPLEX ODEON CORPORATION
a corporation incorporated under the
laws of the Province of Ontario
("Cineplex")
- and -
XXXXX THEATRES, INC.
a corporation incorporated under the
laws of the State of Delaware
("Xxxxx")
- and -
CINEPLEX ODEON (QUEBEC) INC.
RKO CENTURY WARNER THEATRES, INC.
THE XXXXXX XXXXX ORGANIZATION, INC.
XXXXX SOUTHERN THEATRES, INC.
XXXXXXX THEATRE CORPORATION
(collectively, the "Guarantors")
- and -
THE BANK OF NOVA SCOTIA
NATIONAL BANK OF CANADA
THE BANK OF NEW YORK
ROYAL BANK OF CANADA
(collectively, the "Banks")
- and -
THE BANK OF NOVA SCOTIA
in its capacity as agent for the Banks
(the "Agent")
- and -
THE BANK OF NOVA SCOTIA
as operating lender
(the "Operating Lender")
WHEREAS:
A.Cineplex, Xxxxx, the Banks and the Agent entered into a credit
agreement dated as of 23 June 1994 pursuant to which the Banks
established a reducing/revolving term credit facility in favour of
Cineplex and Xxxxx, which agreement has been amended by a Waiver
Agreement made as of 25 October 1994, a Second Amendment Agreement
made as of 31 March 1995, a Second Waiver Agreement made as of 19
September 1995, a Third Amendment Agreement made as of 30 September
1995, a Consent made as of 15 December 1995, a Fourth Amendment
Agreement made as of 9 February 1996, a Fifth Amendment Agreement made
as of 26 March 1996 and a Sixth Amendment Agreement made as of 16 August
1996 (such credit agreement as so amended and as further supplemented,
amended, restated or replaced from time to time, the "Credit Agreement").
B.Cineplex and the Operating Lender entered into a letter loan agreement
dated 23 June 1994 (as the same may be amended, supplemented, restated or
replaced from time to time, the "Operating Credit Agreement") pursuant
to which the Operating Lender established in favour of Cineplex a
revolving operating credit facility.
C.Pursuant to the Credit Agreement and the Operating Credit Agreement,
each of the Guarantors has provided a Guarantee.
D.Cineplex has requested that certain provisions of the Credit Agreement
be amended to permit minor amendments to its proposed new business
operation in Budapest, Hungary which was previously approved, to permit
further international developments and to permit the granting of liens
in certain circumstances to landlords of leased theatre locations.
E.The Banks and the Operating Lender have agreed to such requests on the
terms set forth herein and the parties hereto are entering into to this
Agreement to evidence their agreement with respect to such requests, to
set forth the terms and conditions upon which such agreements by the
Banks and the Operating Lender are made and to deal with the other
matters set forth herein.
NOW THEREFORE in consideration of these premises and for other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1 - Interpretation Capitalized terms used herein, unless
otherwise defined or indicated herein, have the respective meanings
ascribed thereto in the Credit Agreement. This Agreement amends the
Credit Agreement effective from and after the date hereof. This
Agreement and the Credit Agreement shall be read together and have
effect so far as practicable as though the provisions thereof and the
relevant provisions hereof are contained in one agreement.
Section 2 - Amendment to Definitions Section 1.01 of the Credit
Agreement is amended by adding the following provision as Section
1.01(bbb.1):
"(bbb.1) "International Exhibition Business" means the
construction, ownership, operation and management of feature length
motion picture exhibition theatres and associated in-theatre concession
facilities outside the United States of America and Canada and
entertainment complexes outside the United States of America and
Canada which include motion picture exhibition theatres owned or
operated by Cineplex, Xxxxx, any Restricted Subsidiary or any Related
Party."
Section 1.01 of the Credit Agreement is amended by adding the
following provision as Section 1.01(bbb.2):
"(bbb.2) "International Structuring Arrangement" means
any arrangement relating to any activity in the International Exhibition
Business by Cineplex, any Subsidiary of Cineplex, or any Affiliate of
either pursuant to which such entity incurs liabilities or obligations,
whether contingent or otherwise, if such arrangements do not otherwise
constitute an Investment hereunder."
Section 1.01 of the Credit Agreement is amended by adding the
following provision as Section 1.01(bbb.3):
"(bbb.3) "International Structuring Mismatched Arrangement"
means an International Structuring Arrangement which, had it been
structured such that it constitutes an Investment hereunder, would have
been a Mismatched International Investment and/or a Non-Repatriation
International Investment."
Section 1.01 of the Credit Agreement is amended by adding the
following provision as Section 1.01(nnn.1):
"(nnn.1) "Mismatched International Investment" means, at
any time, each Investment by Cineplex, Xxxxx, a Restricted Subsidiary
or a Related Party, as applicable, in the International Exhibition
Business in respect of which, at such time:
(i) the operating costs (calculated without inclusion
of amounts for depreciation and amortization) of the business relating
to such Investment which are denominated and payable in a currency other
than the currency in which the revenues generated from such business
are denominated and received;
exceed,
(ii) 15% of the total operating costs (calculated
without inclusion of amounts for depreciation and amortization) of
such business;unless the currency risks associated
with such Investment have been hedged to the reasonable satisfaction
of the Agent, in which case such Investment shall not be considered to
be a Mismatched International Investment for the purposes of this
Agreement."
Section 1.01 of the Credit Agreement is amended by adding the
following provision as Section 1.01(qqq.1):
"(qqq.1) "Non-Repatriation International Investment" means,
at any time, each Investment by Cineplex, Xxxxx, a Restricted Subsidiary
or a Related Party, as applicable, in the International Exhibition Business
in respect of which, at such time, some difficulty exists, or is likely
to exist, in paying, transferring or otherwise distributing the revenues,
profits or income therefrom to Cineplex, Xxxxx, such Restricted
Subsidiary or such Related Party, as the case may be, to the extent that
such payment, transfer or distribution is to be made outside the
jurisdiction of its origin."
Section 1.01 of the Credit Agreement is amended by amending the
definition of "Permitted Indebtedness" in subsection 1.01(uuu) thereof
by deleting the word "and" at the end of subparagraph (xi) thereof, by
deleting the period at the end of subparagraph (xii) thereof and
replacing it with "; and" and by adding the following provision as
subparagraph (xiii) thereof:
"(uuu) (xiii) Indebtedness of Cineplex, Xxxxx or a Restricted
Subsidiary in respect of Permitted Landlord Arrangements."
Section 1.01 of the Credit Agreement is amended by adding the
following provision as Section 1.01(uuu.1):
"(uuu.1) "Permitted International Exhibition Business
Investment" means Investments by Cineplex, Xxxxx, a Restricted Subsidiary
or a Related Party in the International Exhibition Business to the extent
that the following criteria are met with respect to such Investments:
(i) not more than U.S. $10,000,000, in the aggregate
(herein, the "International Limit"), may be expended on all such
Investments;
(ii) not more than U.S. $4,000,000, in the aggregate, of the
International Limit may be expended for or held in Mismatched
International Investments;
(iii) not more than U.S. $2,000,000, in the aggregate, of the
International Limit may be expended for or held in Non-Repatriation
International Investments; and
(iv) at no time may Investments be made in more than five
locations which are Mismatched International Investments and/or
Non-Repatriation International Investments.
Notwithstanding anything else contained in this
Agreement:
(v) if Cineplex or any Subsidiary of Cineplex, or any
Affiliate of either, enters into or becomes subject to any International
Structuring Mismatched Arrangement, then the aggregate amount of the
liabilities or obligations associated with such International
Structuring Arrangement shall be deemed, as applicable, to be a
Mismatched International Investment or a Non-Repatriation International
Investment and (A) if such International Structuring Mismatched
Arrangement is not made in conjunction with an Investment, the
International Structuring Mismatched Arrangement shall be deemed to be
an Investment in the amount of U.S. $500,000, (B) if such International
Structuring Mismatched Arrangement is made in conjunction with an
Investment in an amount less than U.S. $500,000, the International
Stucturing Mismatched Arrangement shall be deemed to be an Investment
in the amount of U.S. $500,000, and (C) if such International
Structuring Arrangement is made in conjunction with an Investment in an
amount in excess of U.S. $500,000, the International Structuring
Mismatched Arrangement shall not be deemed to be an Investment, but,
for greater certainty, the amount of such Investment shall be included
for all purposes of this Agreement; and
(vi) at any time when the aggregate (without duplication) of
earnings before interest, taxes, depreciation and amortization for all
Permitted International Exhibition Business Investments, deemed
Investments as contemplated in paragraph (v) above and International
Structuring Arrangements (whether such aggregate amount is positive or
negative) exceeds 10% of Cash Flow attributable on a reasonable basis
to the North American operations of Cineplex on a consolidated basis
for a comparable period, then no further Investments in the International
Exhibition Business or International Structuring Arrangements shall be
permitted hereunder.
Section 1.01 of the Credit Agreement is amended by amending the
definition of "Permitted Investments" in subsection 1.01(vvv) thereof
by deleting the word "and" at the end of subparagraph (xi) thereof, by
deleting the period at the end of subparagraph (xii) thereof and
replacing it with "; and" and by adding the following provision as
subparagraph (xiii) thereof:
"(vvv) (xiii) Permitted International Exhibition Business
Investments."
Section 1.01 of the Credit Agreement is amended by adding the
following provision as Section 1.01(vvv.1):
"(vvv.1) "Permitted Landlord Arrangements" means an
arrangement entered into between Cineplex, Xxxxx or a Restricted
Subsidiary and the landlord of a theatre location leased to and operated
by Cineplex, Xxxxx or such Restricted Subsidiary which, in substance,
provides an advance of moneys to Cineplex, Xxxxx or such Restricted
Subsidiary, as applicable, which moneys are expended for furniture,
fixtures and equipment used for such theatre location, provided however,
that the aggregate amount of moneys provided to Cineplex, Xxxxx and any
Restricted Subsidiary under all Permitted Landlord Arrangements shall
not exceed U.S. $10,000,000."
Section 1.01 of the Credit Agreement is amended by amending
the definition of "Permitted Liens" in subsection 1.01(www) thereof
by deleting the word "and" at the end of subparagraph (xv) thereof, by
deleting the period at the end of subparagraph (xvi) thereof and
replacing it with "; and" and by adding the following provision as
subparagraph (xvii) thereof:
"(www) (xvii) Liens granted to secure Permitted Landlord
Arrangements hereof to the extent only that such Liens relate to the
property and assets acquired with funds advanced by the landlord under
such Permitted Landlord Arrangements."
Section 3 - Amendment to Security
Section 5.01 of the Credit Agreement is amended by adding the
word "and" after the semi-colon in subsection (l) thereof and by adding
the following provision as subsection (m) thereof:
"(m) to the extent possible with respect to all Permitted
International Exhibition Business Investments, security documentation
and guarantees parallel in scope to that required for Restricted
Subsidiaries hereunder, duly registered, filed or recorded in all
relevant jurisdictions."
Section 4 - Amendment to Reporting Requirements
The Credit Agreement is amended by adding the following provision
as Section 7.01(b.1) thereof:
"(b.1) as soon as possible, but in any event within 45 days after
the end of each fiscal quarter of Cineplex (including the fourth quarter),
detailed reports setting forth, as at the end of such quarter, the
aggregate amount of expenditures made or commitments entered into in
relation to Investments in the International Exhibition Business, with
separate reporting of the aggregate of all such amounts or commitments
in relation to Mismatched International Investments and Non-Repatriation
International Investments;"
Section 5 - Amendment to Negative Covenants The Credit Agreement is
amended by adding the following sentence to the end of Section 8.04
thereof: "For avoidance of doubt, to the extent that any Investment
in the International Exhibition Business (or any part thereof) relates
to a facility which includes ancillary and/or complimentary activities
such as (without limitation) games rooms, virtual reality centres and
sporting facilities, such Investment or, as applicable, the portion
thereof reasonably attributable to such facilities, shall be considered
to be an Ancillary Facility for all purposes of this Agreement including,
without limitation, the limitations on Investments in Ancillary Facility
as set forth herein."
The Credit Agreement is amended by adding the following provision
as Section 8.13 thereof:
"Section 8.13 Permitted Landlord Arrangements: None of
Cineplex, Xxxxx, any Subsidiary or any Related Party will enter into
any arrangements with a landlord of a theatre location if such
arrangement is in substance an advance by the landlord of moneys to
such party to enable it to acquire furniture, fixtures and/or equipment
for use in such theatre location unless such arrangement is a Permitted
Landlord Arrangement."
Section 6 - Consent to Budapest, Hungary Project Subject to and
in accordance with the provisions of this Agreement and the Credit
Agreement, the Banks agree to permit Cineplex to enter into the
transactions relating to a proposed exhibition location in Budapest,
Hungary strictly on the terms and conditions of the deal memorandum
attached hereto as Appendix A. It is acknowledged and agreed that
such transactions shall constitute a Permitted International Exhibition
Business Investment, subject to all of the terms and conditions of
the Credit Agreement (as amended by, inter alia, this Seventh Amendment
Agreement).
Section 7 - Conditions Precedent to Effectiveness of this Amendment
Agreement
This Seventh Amendment Agreement shall only become
binding on the Banks upon satisfaction of the following conditions
precedent:(a) receipt by the Agent of evidence, in form and
substance satisfactory to the Agent and its counsel, that all terms,
conditions and provisions relating to the subject matter of this Seventh
Amendment Agreement are permitted under the Senior Subordinated
Indenture; and
(b) execution of this Seventh Amendment Agreement by the Super
Majority Banks in accordance with Section 12.01(ii) of the Credit
Agreement.
Section 8 - Confirmation by Guarantors
Each Guarantor confirms that the Guarantee and Collateral made
or granted by it pursuant to the
Credit Agreement and the Operating Credit Agreement remain in full
force and effect notwithstanding the amendments and supplements to
Credit Agreement herein contained.
Section 9 - Continuing Effect of Agreements
Except as amended by this Agreement, the Credit Agreement and
the Operating Credit Agreement shall remain in full force and effect,
without amendment, and each is hereby ratified and confirmed.
Section 10 - Counterparts
This Agreement may be executed in any number of counterparts and
all such counterparts taken together shall
be deemed to constitute one and the same instrument and shall be
effective on the date when each of the parties hereto has signed a
copy hereof and shall have delivered the same to the Agent.
EXECUTED AND EFFECTIVE as of the date first written above.
THE BANKS
---------
THE BANK OF NOVA SCOTIA NATIONAL BANK OF CANADA
By: X. Xxxxxx By: X. Xxxxx
XXX XXXX XX XXX XXXX XXXXX XXXX XX XXXXXX
By: Xxxxxxxx X. Xxxxxx By: X. Xxxxxx
THE BANK OF NOVA SCOTIA, as Agent THE BANK OF NOVA SCOTIA, as
By: X. Xxxx Operating Lender
By: X. Xxxxxx
THE BORROWERS
-------------
CINEPLEX ODEON CORPORATION XXXXX THEATRES, INC.
By: Xxxxx Xxxxx By: Xxxxx Xxxxx
EACH OF THE UNDERSIGNED hereby acknowledges and agrees to and accepts
the terms and conditions set forth in this Agreement as of the date
first written above.
THE GUARANTORS
--------------
CINEPLEX ODEON CORPORATION XXXXX THEATRES, INC.
By: Xxxxx Xxxxx By: Xxxxx Xxxxx
RKO CENTURY WARNER THE XXXXXX XXXXX ORGANIZATION, INC
THEATRES, INC.
By: Xxxxx Xxxxx By: Xxxxx Xxxxx
XXXXX SOUTHERN THEATRES, XXXXXXX THEATRE CORPORATION
INC.
By: Xxxxx Xxxxx By: Xxxxx Xxxxx
CINEPLEX ODEON (QUEBEC) INC.
By: Xxxxx Xxxxx
