Exhibit 10.10
CREDIT AGREEMENT
BY AND AMONG
CLEARVIEW CINEMA GROUP, INC.,
CCC MADISON TRIPLE CINEMA CORP.
CCC XXXXXXX TWIN CINEMA CORPORATION
CCC MANASQUAN CINEMA CORPORATION
CLEARVIEW THEATRE GROUP, INC.
CCC HERRICKS CINEMA CORP.
CCC PORT WASHINGTON CINEMA CORP.
CCC GRAND AVENUE CINEMA CORP.
CCC WASHINGTON CINEMA CORP.
CCC XXXXXXX CINEMA CORP.
CCC XXXXXXX CINEMA CORP.
CCC NEW CITY CINEMA CORP.
000-000 XXXXXXXXXXX XXXXXX CORP.
Borrowers
THE PROVIDENT BANK,
Agent
AND
VARIOUS LENDERS DESCRIBED HEREIN
dated as of
May 29, 1996
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TABLE OF CONTENTS
Page
ARTICLE I. INTERPRETATION...................................................7
Section 1.1. Provisions Pertaining to Definitions.........................7
Section 1.2. Definitions..................................................7
ARTICLE II. THE LOANS......................................................25
Section 2.1. Commitments.................................................25
Section 2.2. Making the Loans............................................25
Section 2.3. Draws, Advances and Settlement of Payments and Advances.....26
Section 2.4. The Notes...................................................27
Section 2.5. Interest Payable on the Loans...............................27
Section 2.6. Repayments and Prepayments of Principal.....................27
Section 2.7. Payments and Computations...................................31
Section 2.8. Payments to be Free of Deductions...........................32
Section 2.9. Use of Proceeds.............................................33
Section 2.10. Additional Costs, Etc......................................33
Section 2.11. Agent and Lender Statements................................34
Section 2.12. Allocation of Liability....................................34
ARTICLE III. SECURITY AGREEMENT............................................35
Section 3.1. Security Interest...........................................35
Section 3.2. Mortgages and Liens on Real Property........................35
Section 3.3. Pledge of Stock.............................................36
Section 3.4. Financing Statements; Additional Documents..................36
Section 3.5. Accounts; Chattel Paper; Lease Agreements...................37
Section 3.6. Release of Collateral.......................................37
ARTICLE IV. CONDITIONS PRECEDENT TO DISBURSEMENTS..........................37
Section 4.1. Conditions Precedent to Initial Closing.....................37
Section 4.2. Conditions Precedent to Subsequent Loans....................42
Section 4.3. Post Closing Requirements...................................42
ARTICLE V. GENERAL REPRESENTATIONS AND WARRANTIES..........................44
Section 5.1. Existence, Etc..............................................44
Section 5.2. Authority, Etc..............................................45
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Section 5.3. Binding Effect of Documents, Etc............................46
Section 5.4. No Events of Default, Etc...................................46
Section 5.5. Financial Statements........................................46
Section 5.6. Changes; None Adverse.......................................47
Section 5.7. Title to Assets; Material Leases............................47
Section 5.8. Intellectual Property.......................................47
Section 5.9. Indebtedness for Borrowed Money.............................47
Section 5.10. Litigation.................................................48
Section 5.11. No Materially Adverse Contracts............................48
Section 5.12. Taxes and Tax Returns, Etc.................................48
Section 5.13. Contracts with Affiliates, Etc.............................49
Section 5.14. Employee Benefit Plans.....................................49
Section 5.15. Governmental Regulation....................................49
Section 5.16. Securities Activities......................................49
Section 5.17. Disclosure.................................................50
Section 5.18. No Material Default........................................50
Section 5.19. Environmental Conditions...................................50
Section 5.20. Licenses and Permits.......................................51
Section 5.21. General Collateral Representation..........................51
ARTICLE VI. AFFIRMATIVE COVENANTS OF BORROWER..............................52
Section 6.1. Reports and Other Information...............................52
Section 6.2. Maintenance of Property; Authorization; Insurance...........56
Section 6.3. Key Man Life Insurance......................................57
Section 6.4. Corporate Existence.........................................57
Section 6.5. Inspection Rights...........................................57
Section 6.6. Payment of Taxes and Claims.................................57
Section 6.7. Compliance with Laws........................................58
Section 6.8. Notice of Other Events......................................58
Section 6.9. Communication with Accountants..............................58
Section 6.10. Payment of Indebtedness....................................59
Section 6.11. Performance of Obligations Under Certain Documents.........59
Section 6.12. Governmental Consents and Approvals........................59
Section 6.13. Employee Benefit Plans and Guaranteed Pension Plans........59
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Section 6.14. Further Assurances.........................................60
Section 6.15. Interest Rate Risk Management..............................60
Section 6.16. Borrower's Depository Accounts.............................60
Section 6.17. Use of Proceeds............................................60
Section 6.18. Subsidiaries...............................................61
ARTICLE VII. FINANCIAL COVENANTS........................................61
Section 7.1. Interest Coverage Ratio.....................................61
Section 7.2. Debt Service Coverage.......................................61
Section 7.3. Minimum Net Worth...........................................61
Section 7.4. Debt to Cash Flow...........................................61
Section 7.5. Limitation on Capital Expenditures..........................61
ARTICLE VIII. NEGATIVE COVENANTS OF BORROWER...............................62
Section 8.1. Limitation on Nature of Business............................62
Section 8.2. Limitation on Fundamental Changes...........................62
Section 8.3. Restricted Payments.........................................62
Section 8.4. Lease Obligations...........................................63
Section 8.5. Management Compensation.....................................63
Section 8.6. Limitation on Disposition of Assets.........................63
Section 8.7. Limitation on Investments...................................64
Section 8.8. Acquisition of Margin Securities............................65
Section 8.9. Limitation on Mortgages, Liens and Encumbrances.............65
Section 8.10. No Additional Negative Pledges.............................66
Section 8.11. No Restrictions on Subsidiary Distributions to Borrowers...66
Section 8.12. Limitation on Indebtedness.................................66
Section 8.13. Limitation on Sales and Leasebacks.........................66
Section 8.14. Transactions with Affiliates...............................66
Section 8.15. No Additional Bank Accounts................................67
ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES.................................67
Section 9.1. Events of Default...........................................67
Section 9.2. Termination of Commitments and Acceleration of Obligations..69
Section 9.3. Remedies....................................................69
Section 9.4. No Implied Waiver; Rights Cumulative........................71
Section 9.5. Set-Off; Pro Rata Sharing...................................72
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ARTICLE X. CONCERNING THE AGENT AND THE LENDERS............................72
Section 10.1. Appointment of the Agent...................................72
Section 10.2. Authority..................................................72
Section 10.3. Acceptance of Appointment..................................73
Section 10.4. Collateral Matters.........................................73
Section 10.5. Agency for Perfection......................................74
Section 10.6. Application of Moneys......................................75
Section 10.7. Reliance by the Agent......................................75
Section 10.8. Exculpatory Provisions.....................................75
Section 10.9. Action by the Agent........................................76
Section 10.10. Amendments, Waivers and Consents..........................76
Section 10.11. Indemnification...........................................76
Section 10.12. Reimbursement of the Agent................................77
Section 10.13. Sharing of Funds Received.................................77
Section 10.14. Dealing with Lenders......................................77
Section 10.15. Agent as Lender...........................................77
Section 10.16. Duties Not to be Increased................................78
Section 10.17. Lender Credit Decisions...................................78
Section 10.18. Resignation of Agent......................................78
Section 10.19. Assignment of Notes; Participation........................78
ARTICLE XI. PROVISIONS OF GENERAL APPLICATION..............................79
Section 11.1. Term of Agreement..........................................79
Section 11.2. Notices....................................................79
Section 11.3. Survival of Representations................................81
Section 11.4. Amendments.................................................81
Section 11.5. Costs, Expenses, Taxes and Indemnification.................81
Section 11.6. Language...................................................82
Section 11.7. Binding Effect; Assignment.................................82
Section 11.8. Governing Law; Jurisdiction and Venue......................82
Section 11.9. WAIVER OF JURY TRIAL.......................................83
Section 11.10. Waivers...................................................83
Section 11.11. Interpretation and Proof of Loan Documents................83
Section 11.12. Integration of Schedules and Exhibits.....................83
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Section 11.13. Headings..................................................83
Section 11.14. Counterparts..............................................84
Section 11.15. Section Severability.....................................84
Section 11.16. One General Obligation....................................84
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THIS CREDIT AGREEMENT dated as of May 29, 1996 ("Credit Agreement") is by
and among CLEARVIEW CINEMA GROUP, INC., a Delaware corporation (hereinafter,
together with its successors in title and assigns called "Holdings"), CCC
MADISON TRIPLE CINEMA CORP., a New Jersey corporation, CCC XXXXXXX TWIN CINEMA
CORPORATION, a New Jersey corporation, CCC MANASQUAN CINEMA CORPORATION, a New
Jersey corporation, CLEARVIEW THEATRE GROUP, INC., a New Jersey corporation, CCC
HERRICKS CINEMA CORP., a Delaware corporation, CCC PORT WASHINGTON CINEMA CORP.,
a Delaware corporation, CCC GRAND AVENUE CINEMA CORP., a Delaware corporation,
CCC WASHINGTON CINEMA CORP., a Delaware corporation, CCC XXXXXXX CINEMA CORP., a
Delaware corporation, CCC XXXXXXX CINEMA CORP., a Delaware corporation, CCC NEW
CITY CINEMA CORP., a Delaware corporation, and 000-000 XXXXXXXXXXX XXXXXX CORP.,
a New Jersey corporation, (hereinafter, together with their successors in title
and assigns called "Borrowers" and each of which is a "Borrower"), the banks and
lending institutions set forth on Schedule 1 hereto (the "Lenders") and THE
PROVIDENT BANK, an Ohio banking corporation ("Provident") executing this
Agreement in its capacity of Agent for the Lenders under this Agreement
(hereinafter called "Provident" or "Agent").
ARTICLE I.
INTERPRETATION
Section 1.1. Provisions Pertaining to Definitions. For all purposes of this
Credit Agreement (except where such interpretations would be inconsistent with
the context or the subject matter):
(a) The expression "this Agreement" shall mean this Credit Agreement
(including all of the Schedules and Exhibits annexed hereto) as originally
executed, or, if supplemented, amended or restated from time to time, as so
supplemented, amended or restated;
(b) Where appropriate, words importing the singular only shall include
the plural and vice versa, and all references to dollars shall be United
States Dollars; and
(c) Accounting terms not otherwise defined herein shall have the
meanings customarily given in accordance with Generally Accepted Accounting
Principles (as hereinafter defined) and all financial computations or
determinations to be made under this Credit Agreement shall, unless
otherwise specifically provided herein, be made in accordance with the
financial statements delivered pursuant to Section 4.1(v) and shall be made
on a Consolidated basis.
Section 1.2. Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the following meanings in this
Agreement:
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"Accountants" mean Xxxxxxx, Xxxxxx Music and Co., or any nationally
recognized firm of certified public accountants selected by Holdings and
acceptable to Agent and Lenders.
"Account Debtor" means any Person obligated for the payment of an Account.
"Accounts" mean, with respect to any person, such Person's accounts, rental
agreements and other contract rights, rights to payment and other forms of
obligation for the payment of money, whether now existing or existing in the
future, including, without limitation, all accounts receivable (whether or not
specifically listed on schedules furnished to the Agent), all accounts created
by or arising from all of such Person's sales of goods, financial instruments,
documents, permits or other items, or rendition of services, including funds
transfer services, made under any of such Person's trade names or styles, or
through any of such Person's Subsidiaries or divisions, and all accounts
acquired by assignment in the ordinary course of business; unpaid seller's
rights (including rescission, replevin, reclamation and stopping in transit)
relating to the foregoing or arising therefrom; rights to any goods represented
by any of the foregoing, including returned or repossessed goods; reserves and
credit balances held by such Person with respect to any such accounts receivable
or account debtors; guarantees or collateral for any of the foregoing; and
insurance policies or rights relating to any of the foregoing.
"Affiliate" means, in relation to any Person (in this definition called
"Affiliated Person"), any Person (i) which (directly or indirectly) controls or
is controlled by or is under common control with such Affiliated Person; or (ii)
which (directly or indirectly) owns or holds five percent (5%) or more of any
equity interest in any Borrower; or (iii) five percent (5%) or more of whose
voting stock or other equity interest is directly or indirectly owned or held by
such Borrower. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession (directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of such Person, whether through the
ownership of shares of any class in the capital or any other voting securities
of such Person or by contract or otherwise.
"Agent" means Provident acting in the capacity as Agent for the Lenders
under the Loan Documents and includes (where the context so admits) any other
Person or Persons succeeding to the functions of Agent under such documents.
"Agent Deposit Account" has the meaning set forth in Section 2.3(d) hereof.
"Agent Disbursement Account" has the meaning set forth in Section 2.3(b)
hereof.
"Assignments of Option and Operating Agreements" means the (i) Assignment
of Option and Operating Agreement from Holdings, CCC Grand Avenue Cinema Corp.
and CCC Port Washington Cinema Corp. to Agent relating to a certain Agreement
among Holdings, CCC Grand Avenue Cinema Corp. and CCC Port Washington Cinema
Corp. and Cinema Grand Avenue, Inc. and Triplex Movies at Port Washington, Inc.
in connection with the operation of and option to purchase certain theaters
located in Long Island, New York and known as the Grand Avenue Theater and the
Post Washington
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Theater and (ii) the Assignment of Option and Operating Agreement from Holdings
and CCC Herricks Cinema Corp. to Agent relating to a certain Agreement among
Holdings and CCC Herricks Cinema Corp. and Cinema Herricks, Inc. in connection
with the operation of and option to purchase a certain theater located in Long
Island, New York and known as the Herricks Theater, each in the form of Exhibit
A attached hereto.
"Assignment of Patents" means the Assignment of Patents from a Borrower to
Agent in the form of Exhibit B hereto.
"Assignment of Trademarks" means the Assignment of Trademarks from a
Borrower to Agent in the form of Exhibit C hereto.
"Blocked Account Agreement" shall mean the Blocked Account Agreement
between a Borrower and Agent, acknowledged by each depository institution,
pursuant to which such financial institutions shall agree not to permit funds in
such bank accounts to be disbursed except to the Agent Disbursement Account, or
any other account maintained at or controlled by the Agent, in the form of
Exhibit D.
"Business Day" means any day other than a Saturday or Sunday on which
commercial banking institutions are open for business in Cincinnati, Ohio.
"Capital Expenditure" means any amount paid or incurred in connection with
the purchase of real estate, plant, machinery, equipment or other similar
expenditure (including all renewals, improvements and replacements thereto, and
all obligations under any lease of any of the foregoing) which would be required
to be capitalized and shown on the Consolidated balance sheet of Holdings in
accordance with GAAP.
"Capital Lease" means any lease of Property which has been or is required
to be classified and accounted for as a capital lease obligation on a Borrower's
financial statements in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) or corporate stock, whether common or
preferred, including, without limitation, partnership interests.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a Capital Lease and, for the purpose of this Agreement, the amount
of such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"Cash Equivalents" means: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within three (3) months from the date of acquisition thereof;
(ii) investments in certificates of deposit or bankers' acceptances maturing
within three (3) months from the date of acquisition issued by any Lender or any
other commercial bank organized under the laws of the United States or any state
thereof having capital surplus and undivided profits aggregating at least Two
Hundred Fifty Million Dollars ($250,000,000); (iii) investments in commercial
paper of any Lender or of any other Person which, at the time
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of issuance, have a rating of at least A-1 from Standard & Poor's Corporation or
at least P-1 from Xxxxx'x Investors Service, Inc. and maturing not more than six
(6) months from the date of acquisition thereof; (iv) obligations of the type
described in (i), (ii) or (iii) above purchased pursuant to a repurchase
agreement obligating the counterpart to repurchase such obligations not later
than thirty (30) days after the purchase thereof, secured by a fully perfected
security interest in any such obligation, and having a market value at the time
such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of the issuing bank; and (v) time deposits or eurodollar
time deposits maturing no more than thirty (30) days from the date of creation
with commercial banks having membership in the Federal Deposit Insurance
Corporation in amounts not exceeding the lesser of One Hundred Thousand Dollars
($100,000) or the maximum insurance applicable to the aggregate amount of such
Person's deposits in such institution.
"Cash Flow" means, for any period, the following, each calculated for such
period, without duplication: (i) EBITDA, less (ii) income and franchise taxes
actually paid by a Borrower (net of any refunds received) (including decreases
in deferred income taxes resulting from tax payments actually made), less (iii)
Capital Expenditures (to the extent actually made in cash by a Borrower and
excluding the non-current portion of Capital Expenditures which have been
financed) less (iv) the gross amount capitalized for long term assets (net of
cash received in respect of long term assets) and paid in cash.
"Cash Interest Expense" means the aggregate amount of all interest expense
of a Borrower on Indebtedness for Borrowed Money (net of interest income) paid
but not accrued.
"Casualty Loss" means any occurrence or event pursuant to which any asset
or property owned or used by a Borrower is (i) damaged or destroyed, or suffers
any other loss, or (ii) condemned, confiscated or otherwise taken, in whole or
in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purposes
to which such asset or property were used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise, and in either case the amount of the damage,
destruction, loss or diminution in value is in excess of One Hundred Thousand
Dollars ($100,000).
"Change in Control" means the occurrence of any one of the following
events: (i) any Person (including a Person's Affiliates and associates) or group
(as that term is understood under Section 13(d) of the Exchange Act and the
rules and regulations thereunder), other than Seller Group, Midmark, CMNY,
Management Shareholders and Affiliates thereof (the "Control Group") or a group
controlled by the Control Group, has become the beneficial owner of a percentage
(based on voting power, in the event different classes of stock shall have
different voting powers) of the voting stock of Holdings equal to at least ten
percent (10%), (ii) there shall be consummated any consolidation or merger of a
Borrower or Holdings pursuant to which the Borrower's or Holding's capital stock
(or other capital stock) would be converted into cash, securities or other
property, other than a merger or consolidation of such Borrower or Holdings in
which the holders of such capital stock (or such other capital stock)
immediately prior to
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the merger have the same proportionate ownership, directly or indirectly, of
capital stock of the surviving corporation immediately after the merger as they
had of such Borrower's or Holding's capital stock immediately prior to such
merger or other than a merger of any Borrower, other than Holdings, into
Holdings, (iv) all or substantially all of Holding's or a Borrower's assets
shall be sold, leased, conveyed or otherwise disposed of as an entirety or
substantially as an entirety to any Person (including an Affiliate or associate
of such Borrower or Holdings) in one or a series of transactions, or (v) A. Xxxx
Xxxx shall cease to perform his duties as a senior executive manager of
Holdings.
"Chattel Paper" means any "chattel paper" as such term is defined in
Section 9-105(1)(b) of the UCC, now owned or hereafter acquired.
"Closing Date" means the day on which the initial Loans are made pursuant
to this Agreement.
"CMNY" means any or all of CMNY Capital II, L.P., CMCO, Inc. or Xxxxxx X.
Xxxxxxxx.
"Code" means the United States Internal Revenue Code of 1986, as amended
from time to time, or any successor federal tax code, and any reference to any
statutory provision shall be deemed to be a reference to any successor provision
or provisions.
"Collateral" means all Accounts, Inventory, Equipment, General Intangibles,
fixtures, goods, motor vehicles, leasehold improvements, Documents, Instruments,
Chattel Paper, Intellectual Property, inventory subject to leases and rights
under lease agreements for the leasing of inventory, money, deposit accounts,
rights to draw on letters of credit, permits, licenses and the cash or noncash
Proceeds (including insurance or other rights to receive payment with respect
thereto) of any of the foregoing and all accessions and additions to and
replacements of the foregoing, and all books and records (including, without
limitation, customer lists, credit files, computer programs, printouts and other
computer materials and records of Borrower) pertaining to any of the foregoing
or any of the Premises (herein, together with the real property, buildings and
fixtures described in the Mortgages, and all other property and rights assigned
by a Borrower to Agent, on behalf of the Lenders, to secure Borrowers'
obligations under the Loan Documents).
"Compliance Certificate" means a certificate, substantially in the form of
attached Exhibit E, pursuant to which Borrowers shall certify their compliance
with the covenants of this Agreement.
"Computation Date" means the last day of each March, June, September and
December.
"Consolidated" means, with respect to any accounting matter or amount, such
matter or amount computed on a consolidated basis for Holdings and each
Borrower, as the case may be, and any Subsidiaries in accordance with GAAP.
"Contingent Obligation" means any direct or indirect liability, contingent
or otherwise, with respect to any Indebtedness, lease, dividend, letter of
credit, banker's acceptance or other obligation of another Person if the primary
purpose or intent thereof
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in incurring the Contingent Obligation is to provide assurance to the obligee of
such obligation of another Person that such obligation of another Person will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof. Contingent Obligations shall include,
without limitation, (i) the direct or indirect guaranty, endorsement (otherwise
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another Person; (ii) any liability for the obligations of another Person
through any agreement (contingent or otherwise) (A) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), (B) to maintain
the solvency of any balance sheet item, level of income or financial condition
of another, or (C) to make take-or-pay, pay-or-play or similar payments if
required regardless of nonperformance by any other party or parties to an
agreement, if in the case of any agreement described under subclauses (A), (B)
or (C) of this sentence the primary purpose or intent thereof is as described in
the preceding sentence. The dollar amount of any Contingent Obligation shall be
equal to the lesser of the dollar amount of the obligation or portion of the
obligation so guaranteed or otherwise supported.
"Credit Commitment" means, in relation to any particular Lender, the sum of
(i) the maximum amount with respect to the Revolving Credit Loan to be loaned by
such Lender to Borrowers as set forth in Schedule 1 hereof and (ii) the amount
with respect to the Term Loans to be loaned by such Lender to Borrowers as set
forth in Schedule 1 hereof.
"Current Assets" and "Current Liabilities" mean at any time, all assets or
liabilities, respectively, that, in accordance with GAAP should be classified as
current assets or current liabilities, respectively, on a Borrower's balance
sheet.
"Default" means any event or occurrence which, with the giving of notice or
the passage of time, or both, would constitute an Event of Default.
"Default Interest Rate" means an annual rate of interest which shall (to
the extent permitted by applicable law) at all times be equal to two percent
(2%) above the applicable Interest Rate for a Loan.
"Documents" mean any "documents," as such term is defined in Section
9-105(1)(f) of the UCC, now owned or existing or hereafter arising or acquired.
"Draw Date" means in relation to any Revolving Credit Loan, the day on
which such Loan is made or to be made to Borrowers pursuant to this Agreement.
"EBITDA" for any period shall mean, without duplication, (i) Net Income;
plus (ii) for such period any Interest Expense deducted in the determination of
Net Income; plus (iii) any income and franchise taxes paid in cash and included
in the determination of Net Income; plus (iv) amortization and depreciation and
other non-cash charges deducted in determining Net Income for such period; plus
(v) extraordinary losses, losses on sales
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of assets (other than sales of inventory in the ordinary course of business) and
unrealized gains from changes in currency; minus (vi) the sum for such period of
interest income, extraordinary gains, gains from sales of assets (other than
sales of inventory in the ordinary course of business) and unrealized losses
from changes in currency.
"Employee Benefit Plan" means an "employee benefit plan" as defined in
Section 3(3) of ERISA.
"Environmental Indemnity Agreement" means the Environmental Indemnity
Agreement among Agent and Borrowers relating to the Premises, substantially in
the form of attached Exhibit F.
"Environmental Laws" means individually or collectively any local, state or
federal law, statute, rule, regulation, order, ordinance, common law, permit or
license term or condition, or state superlien or environmental clean-up or
disclosure statutes pertaining to the environment or to environmental
contamination, regulation, management, control, treatment, storage, disposal,
containment, removal, clean-up, reporting, or disclosure, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), as now or hereafter amended (including, but not limited
to, the Superfund Amendments and Reauthorization Act ("XXXX")); the Resource
Conservation and Recovery Act ("RCRA"), as now or hereafter amended (including,
but not limited to, the Hazardous and Solid Waste Amendments of 1984); the Toxic
Substances Control Act ("TSCA"), as now or hereafter amended; the Clean Water
Act, as now or hereafter amended; the Safe Drinking Water Act, as now or
hereafter amended; or the Clean Air Act, as now or hereafter amended.
"Equipment" means any "equipment," as such term is defined in Section
9-109(2) of the UCC, now owned or hereafter acquired and shall include, without
limitation, any and all additions, substitutions, and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts
and accessories installed thereon or affixed thereto.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock or that are measured by the value of Capital
Stock (but excluding any debt security that is convertible into, or exchangeable
for Capital Stock).
"Equity Transaction" means (i) the acquisition by Holdings of the assets of
the Seller Group, (ii) the contribution of at least Two Million Dollars
($2,000,000) by the Seller Group into Holdings and (iii) the additional cash
equity contribution to Holdings by Midmark of at least One Million Five Hundred
Thousand Dollars ($1,500,000), each occurring on or prior to the Closing date.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
regulations issued thereunder, as amended from time to time and any successor
statute.
"ERISA Affiliate" means, in relation to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which that Person
is a member and which is considered under common control within the meaning of
the regulations promulgated under Section 414 of the Code.
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"ERISA Liabilities" means the aggregate of all unfunded vested benefits
under any employee pension benefit plan, within the meaning of Section 3(2) of
ERISA, of a Borrower or any ERISA Affiliate of a Borrower under any Plan covered
by ERISA that is not a Multiemployer Plan and all potential withdrawal
liabilities of any thereof under all Multiemployer Plans.
"Event of Default" means any event or condition described in Section 9.1 of
this Agreement.
"Excess Cash Flow" shall mean for any fiscal year of Holdings, the excess
of (a) EBITDA over (b) the sum, without duplication, of (i) Fixed Charges, (ii)
the aggregate amount actually paid by Holdings on a Consolidated basis in cash
during such fiscal year on account of Capital Expenditures, (iii) changes in
working capital (calculated as Current Assets minus Current Liabilities as at
the end of such fiscal year), (iv) the amount of taxes actually paid in cash by
Holdings on a Consolidated basis for such fiscal year during such fiscal year or
within a normal payment period thereof.
"Extraordinary Disposition" means, with respect to a Borrower, the sale,
lease, transfer or other disposition of assets, other than assets transferred or
disposed in the ordinary course of business, whether by way of the sale of
assets or the sale of stock or other rights in which a Borrower has any
ownership interest, and whether in one transaction or a series of related or
unrelated transactions.
"Fixed Charges" means, for any period, the following, each calculated for
such period, without duplication: (i) Interest Expense paid or accrued, minus
(ii) interest income earned or accrued by a Borrower as determined in accordance
with GAAP, plus (iii) scheduled payments of principal with respect to all
Indebtedness for Borrowed Money of a Borrower including the principal component
of any cash payments made with respect to any Capital Lease Obligation.
"General Intangibles" means any "general intangibles" as such term is
defined in Section 9-106 of the UCC, now owned or hereafter acquired and, in any
event, shall include, without limitation, all right, title and interest now in
existence or hereafter arising in or to all customer lists, trademarks, patents,
rights in intellectual property, trade names, copyrights, trade secrets,
proprietary or confidential information, inventions and technical information,
procedures, designs, knowledge, know-how, software, data bases, data, processes,
models, drawings, materials, and records now owned or hereafter acquired, and
any and all goodwill and rights of indemnification.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United Sates of America in effect from
time to time, consistently applied.
"Guaranteed Pension Plan" means any pension plan maintained by a Borrower
or an ERISA Affiliate of a Borrower, or to which a Borrower or an ERISA
Affiliate contributes, some or all of the benefits, under which benefits are
guaranteed by the United States Pension Benefit Guaranty Corporation ("PBGC").
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"Hazardous Substances" means any and all hazardous and toxic substances,
wastes or materials, any pollutants, contaminants, or dangerous materials
(including, but not limited to, polychlorinated biphenyls, friable asbestos,
volatile and semi-volatile organic compounds, oils, petroleum products and
fractions, and any materials which include hazardous constituents or become
hazardous, toxic, or dangerous when their composition or state is changed), or
any other similar substances or materials which are included under or regulated
by any Environmental Law.
"Head Office" means, in relation to the Agent, the head office of The
Provident Bank located at Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000 or such
office designated in writing to Borrowers and Lenders by The Provident Bank or
any successor Agent.
"Indebtedness" means, in relation to any Person, at any particular time,
all of the obligations of such Person which, in accordance with GAAP, would be
classified as indebtedness upon a balance sheet including any footnote thereto
of such Person prepared at such time, and in any event shall include, without
limitation, and without duplication:
(i) all indebtedness of such Person arising or incurred under or in
respect of (A) any guaranties (whether direct or indirect) by such Person
of the indebtedness, obligations or liabilities of any other Person, or (B)
any endorsement by such Person of any of the indebtedness, obligations or
liabilities of any other Person (otherwise than as an endorser of
negotiable instruments received in the ordinary course of business and
presented to commercial banks for collection of deposit), or (C) the
discount by such Person, with recourse to such Person, of any of the
indebtedness, obligations or liabilities of any other Person;
(ii) all indebtedness of such Person arising or incurred under or in
respect of any agreement, contingent or otherwise made by such Person (A)
to purchase any indebtedness of any other Person or to advance or supply
funds to the payment or purchase of any indebtedness of any other Person,
or (B) to purchase, sell or lease (as lessee or lessor) Property, products,
materials or supplies or to purchase or sell transportation or services,
primarily for the purpose of enabling any other Person to make payment of
any indebtedness of such other Person or to assure the owner of such other
Person's indebtedness against loss, regardless of the delivery or
non-delivery of the Property, products, materials or supplies or the
furnishing or non-furnishing of the transportation or services, or (C) to
make any loan, advance, capital contribution or other investment in any
other Person for the purpose of assuring a minimum equity, asset base,
working capital or other balance sheet condition for or as at any date, or
to provide funds for the payment of any liability, dividend or stock
liquidation payment, or otherwise to supply funds to or in any manner
invest in any other Person;
(iii) all indebtedness, obligations and liabilities secured by or
arising under or in respect of any Lien, upon or in Property owned by such
-16-
Person, even though such Person has not assumed or become liable for the
payment of such indebtedness, obligations and liabilities;
(iv) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to Property acquired by such
Person, even though the rights and remedies of the seller or lender (or
lessor) under such agreement in the event of default are limited to
repossession or sale of such Property; and
(v) all indebtedness arising or incurred under or in respect of any
Contingent Obligation.
"Indebtedness for Borrowed Money" means at any particular time, all
Indebtedness (i) in respect of any money borrowed; (ii) under or in respect of
any Contingent Obligation (whether direct or indirect) of any money borrowed;
(iii) evidenced by any loan or credit agreement, promissory note, debenture,
bond, guaranty or other similar written obligation to pay money; or (iv) Capital
Lease Obligations.
"Instruments" mean any "instrument," as such term is defined in Section
9-105(1)(i) of the UCC, now owned or hereafter acquired.
"Intellectual Property" shall mean all Patents and all Trademarks, together
with (a) all inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other agreements granted
to any obligor with respect to any of the foregoing, in each case whether now or
thereafter owned or used including, without limitation, the licenses or other
agreements with respect to the Trademarks, in Schedule 5.8 hereto; (c) all
information, customer lists, identification of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, computer and automatic machinery
software and programs; (d) all field repair data, sales data and other
information relating to sales or service of products now or hereafter
manufactured; (e) all accounting information and all media on which or in which
any information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such information,
knowledge, records or data; (f) all licenses, consents, permits, variances,
certifications and approvals of governmental agencies now or hereafter held by a
Borrower; and (g) all causes of action, claims and warranties now or hereafter
owned or acquired by a Borrower in respect of any of the items listed above.
"Interest Expense" means, for any period, the total amount of all charges
for the use of funds (whether characterized as interest or otherwise) payable
during such period with respect to all Indebtedness for Borrowed Money of a
Borrower for such period, including the amortization of debt discounts and the
amortization of all fees payable in connection with the incurrence of such
Indebtedness.
"Interest Rate" means the rate of interest per annum equal to two percent
(2.0%) in excess of the Prime Rate.
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"Inventory" means, with respect to any Person, such Person's inventory,
including without limitation: (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in such Person's
business, wherever located and whether in the possession of such Person or any
other Person; (ii) all goods, wares and merchandise, finished or unfinished,
held for sale or lease or leased or furnished or to be furnished under contracts
of service, wherever located and whether in the possession of such Person or any
other Person; and (iii) all goods returned to or repossessed by such Person.
"Investment" means all investments in any other Person by stock purchase,
capital contribution, loan, advance, guaranty of any Indebtedness or creation or
assumption of any other liability in respect of any Indebtedness of such other
Person (including, without limitation, any liability of any kind described in
clause (i) or (ii) of the definition of the term "Indebtedness" set forth in
this Section ), or the transfer or sale of Property (otherwise than in the
ordinary course of the business) to any other Person for less than payment in
full in cash of the transfer or sale price or the fair value thereof (whichever
of such price or value is higher).
"Leasehold Mortgages" the Leasehold Mortgages granted from time to time by
a Borrower to Agent to secure the Loans in the form of Exhibit G and as they may
be amended or supplemented from time to time.
"Legal Requirements" means all applicable laws, rules, regulations,
ordinances, judgments, orders, decrees, injunctions, arbitral awards, permits,
licenses, authorizations, directions and requirements of all governments,
departments, commissions, boards, courts, authorities, agencies, and officials
and officers thereof, that are now or at any time in the future in effect.
"Lenders" mean collectively each of the banks or lending institutions set
forth on Schedule 1 hereto and their respective successors and assigns; and
"Lender" means any one of the Lenders.
"Lesser Transaction" means the purchase by a Borrower from Kisco Cinema,
Inc. and Bedford Cinema, Inc. of certain assets owned and utilized in connection
with the operation of multiple screen movie theaters at Mt. Kisco, New York and
Bedford, New York for an aggregate amount not to exceed One Million Five Hundred
Thousand and 00/100 Dollars ($1,500,000.00).
"Liabilities" means all indebtedness, obligations and other liabilities of
a Borrower whether matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, joint or several, secured or unsecured arising
by contract, operation of law or otherwise, classified as liabilities in
accordance with GAAP on a balance sheet of a Borrower.
"Licenses and Permits" means all licenses, permits, registrations and
recordings thereof and all applications incorporated into for such licenses,
permits and registrations now owned or hereafter acquired by a Borrower and
required from time to time for the business operations of a Borrower.
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"Lien" means any lien, mortgage, pledge, security interest, charge or other
encumbrance of any kind including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest.
"Litigation" has the meaning set forth in Section 5.10 hereof.
"Loan Documents" mean this Agreement, the Notes, the Warrant Agreement, the
Stockholders Agreement, the Security Documents, the Subordination Agreement and
any other agreement, instrument, certificate or document executed in connection
with or pursuant to this Agreement whether concurrently herewith or subsequent
hereto.
"Loans" mean, collectively, the Revolving Credit Loan and each of the Term
Loans, each singly a "Loan" made or to be made to Borrowers by the Lenders
pursuant to this Agreement.
"Loan Year" means each period of twelve (12) consecutive months, commencing
on the Closing Date and on each anniversary thereof.
"Long-Term Lease" means any lease of real or personal property having an
original term, including any period which the lease may be renewed or extended,
at the option of the lessee, of more than three (3) years.
"Management Shareholders" means A. Xxxx Xxxx.
"Material Adverse Effect" means any event which will, or is reasonably
likely to, have a material adverse effect upon the Collateral or upon the
financial condition, operations, assets or prospects in the aggregate of the
Borrowers.
"Material Lease" means any lease under which a Borrower shall lease (as
lessee) or acquire the right to possess and/or use any Real Estate or other
Property or any other similar agreement (whether written or oral) pursuant to
which a Borrower pays an annual lease payment or rental payment equal to or
greater than Twenty Thousand Dollars ($20,000) or which otherwise is material to
the operation of the business of Borrower.
"Maximum Credit Liability" for any Borrower, other than Holdings, shall
mean, as of any date of determination thereof, the sum of (i) with respect to
each Loan the proceeds of which are used to make or the issuance of which
constitutes a Valuable Transfer to such Borrower, the amount of such Loan plus
(ii) with respect to each Loan the proceeds of which are not used to make or the
issuance of which does not constitute a Valuable Transfer to such Borrower, the
lesser of (A) the outstanding amount of such Loan as of such date or (B) the
greater of (I) ninety-five percent (95%) of the Subsidiary Net Worth at the time
of such Loan or (II) ninety-five percent (95%) of the Subsidiary Net Worth of
such Borrower at the earliest of (x) such date, (y) the date of the commencement
of a case under Title 11 of the United States Code (or any successor provision)
in which such Borrower is a debtor or (z) the date enforcement hereunder is
sought.
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"Maximum Revolving Commitment" means Two Hundred Thousand Dollars
($200,000).
"Midmark" means Midmark Capital, L.P. a Delaware limited partnership whose
general partner is Midmark Associates, Inc., a New Jersey corporation.
"Mortgages" means the real estate mortgages or deeds of trust granted from
time to time by a Borrower to Agent to secure the Loans, substantially in the
form of Exhibit H, and as they may be amended or supplemented from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is maintained for employees of a Borrower, or any
ERISA Affiliate of a Borrower.
"Net Income" means, for any period, the aggregate of the net income (or net
loss) of a Borrower for such period, determined in accordance with GAAP, but
excluding, without duplication: (i) the income of any Person in which a Borrower
has an ownership interest (other than in another Borrower), unless received by
such Borrower in a cash distribution; (ii) any net after-tax gains or losses
attributable to dispositions of assets; (iii) the income of any Subsidiary of a
Borrower to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at that time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary; and (iv) any after-tax extraordinary non-cash gains or extraordinary
non-cash losses.
"Net Proceeds" means the aggregate proceeds paid in cash or Cash
Equivalents received by a Borrower in excess of One Hundred Thousand Dollars
($100,000) in respect of any Extraordinary Disposition, net of direct costs
relating to such Extraordinary Disposition (including without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred or existing as a result thereof, taxes paid or
payable as a result thereof (after taking into account any available tax credits
or deductions in any tax sharing arrangements), amounts required to be applied
in payment of Indebtedness secured by a Lien incurred in accordance with this
Agreement on the assets or assets that are subject of such Extraordinary
Disposition and which Indebtedness is required pursuant to the terms of the
instrument governing such Indebtedness or Lien or in order to obtain the
necessary consent to such sale to be repaid in connection with such
Extraordinary Disposition and any reserve for adjustment in respect of the sale
price of or other liability in respect of such asset or assets.
"Net Worth" means, at any date, Consolidated stockholders' equity
(including the par value or stated value of all outstanding capital stock,
additional paid-in capital and retained earnings) of Holdings determined in
accordance with GAAP, except that there shall be deducted therefrom any amount
of treasury stock reflected as an asset of Holdings or any Subsidiary and except
that any write down in the assets or equity occurring at year-end 1996 shall not
be taken into account.
"Notes" mean, collectively, the Revolving Credit Notes, the Term Loan A
Notes and the Term Loan B Notes, each of which are to be dated, executed and
delivered to
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Lenders by Borrowers on the Closing Date. "Note" shall mean any one of the
Notes, unless specifically identified.
"Obligations" means, collectively, all of the indebtedness, obligations,
covenants, promises, agreements, and liabilities existing on the date hereof or
arising from time to time hereafter, whether direct, indirect, absolute,
contingent, joint or several, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise, of
Borrowers to the Agent or any Lenders (i) in respect of the Loans made pursuant
to this Agreement; or (ii) under or in respect of any one or more of the Loan
Documents. Obligations shall also include all interest, charges and other fees
chargeable hereunder to Borrowers or due hereunder from Borrowers to Lenders
from time to time and all costs and expenses referred to in Section 11.5 hereof.
"Participation Percentage" means, in relation to each Lender, the
percentage set forth with respect to such Lender on Schedule 1 with respect to
each Loan.
"Patents" shall mean all of the following in which a Borrower now holds or
hereafter acquires any interest: (i) all letters patent of the United States or
any country, all registrations and recordings thereof, and all applications for
letters patent of the United States or any other country, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof or any other country, and (ii) all reissues,
continuations, continuations-in-part or extensions thereof.
"Permitted First Liens" means those Liens identified in Section 8.9(a),
8.9(d), and those Liens identified on Schedule 8.9(g).
"Permitted Liens" means those Liens and encumbrances permitted hereunder
pursuant to Section 8.9(g).
"Person" shall include an individual, a company, a corporation, an
association, a partnership, a joint venture, an unincorporated trade or business
enterprise, a trust, an estate, or other legal entity or a government (national,
regional or local), court, arbitrator or any agency, instrumentality or official
of the foregoing.
"Pledge Agreement" means a stock pledge agreement or agreements
substantially in the form of Exhibit I.
"Pledged Stock" means all of the Capital Stock of each Subsidiary of
Holdings whether now existing or hereafter formed or acquired.
"Premises" means collectively, all real property and leasehold interests
now or hereafter acquired by a Borrower, including, without limitation, all the
Premises as defined in the Mortgages and the Leasehold Mortgages.
"Prime Rate" means the rate of interest announced from time to time by
Agent as its prime rate at its Head Office, whether or not Agent shall at times
lend to other borrowers at lower rates of interest, or, if there is no such
prime rate, then such other rate as may be substituted by Agent for its Prime
Rate.
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"Proceeds" means "proceeds," as such term is defined in Section 9-306(1) of
the UCC and, in any event, shall include, without limitation, (i) any and all
proceeds of any insurance, indemnity, warranty, or guaranty payable from time to
time with respect to any of the Collateral, and (ii) any and all payments (in
any form whatsoever) made or due and payable from time to time in connection
with any requisition, confiscation, condemnation, seizure, or forfeiture of all
or any part of the Collateral by any governmental body, authority, bureau, or
agency (or any Person acting under color of governmental authority).
"Projections" means Holding's forecasted Consolidated and consolidating:
(a) balance sheets, (b) profit and loss statements, and (c) cash flow
statements, all prepared on a division by division and Subsidiary by Subsidiary
basis and otherwise consistent with Holding's historical financial statements,
together with, if requested by Agent, appropriate supporting details and
statements of underlying assumptions.
"Property" means all types of real, personal, tangible, intangible or mixed
property whether owned or leased by Borrower.
"Pro Rata Share" means, in relation to any particular item, the share of
any Lender in such item, which shall be in the same proportion which the
aggregate amount of all of the obligations owing to such Lender with respect to
such item at such time shall bear to the aggregate amount of all of the
obligations owing to all of the Lenders with respect to such item at such time
net of any and all charges or fees due and payable to Agent under the Loan
Documents.
"Real Estate" means all real property owned or leased by a Borrower and all
real property hereafter acquired or leased by a Borrower, together with all
fixtures, rights of way, privileges, liberties, tenements, hereditaments, and
appurtenances belonging or in any way appertaining thereto, all easements now or
hereafter benefiting such real property and all royalties and rights
appertaining to the use and enjoyment of such real property, together with all
of the buildings, structures, and other improvements thereto.
"Reference Period" means, with respect to a particular Computation Date,
the period of twelve (12) calendar months ending on such Computation Date except
that with respect to any Computation Date prior to June 30, 1997, the applicable
reference period shall be the period from and including the calendar quarter in
which falls the Closing Date through such Computation Date.
"Requisite Lenders" means at such times as there are any Loans outstanding,
the Lenders whose aggregate Pro Rata Shares of the outstanding Loans are greater
than or equal to sixty-six and two-thirds percent (66 2/3%) of the aggregate
amount of the outstanding Loans, and at all other times, the Lenders whose
aggregate Credit Commitments are greater than or equal to sixty-six and
two-thirds percent (66 2/3%) of the aggregate Credit Commitments of all the
Lenders.
"Restricted Payment" means: (a) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of Holdings or any
of its Subsidiaries now or hereafter outstanding, except a dividend payable
solely in shares of
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that class of stock to the holders of that class; (b) any redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of Holdings or any of its Subsidiaries now or hereafter outstanding; (c)
any payment or prepayment of principal of, premium, if any, or interest on,
redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any subordinated indebtedness; and (d) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of Holdings or
any of its Subsidiaries now or hereafter outstanding.
"Revolving Credit Loan" means all Loans outstanding from time to time made
pursuant to Sections 2.2(a) and 2.3 hereof and any amounts added to the
principal balance of the Revolving Credit Loan pursuant to this Agreement.
"Revolving Credit Notes" means, collectively, with respect to the Revolving
Credit Loan the promissory notes of Borrower, in the face amounts of the
Revolving Credit Commitment of the respective Lenders in or substantially in the
form of Exhibit J-1, annexed hereto. "Revolving Credit Note" shall mean any one
of the Revolving Credit Notes.
"SEC" means the Securities and Exchange Commission or any successor agency.
"Securities" means any stock, shares, voting trust certificates, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participation
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Security Documents" shall mean, collectively, this Agreement, the
Leasehold Mortgages, the Mortgages, the Environmental Indemnity Agreement, the
Blocked Account Agreements, the Assignments of Option and Operating Agreements,
the Pledge Agreements, the Assignments of Trademarks, the Assignments of Patents
and each other agreement, assignment or instrument creating or purporting to
create a lien in favor of Agent for the ratable benefit of the Lenders.
"Seller Group" means the Township of Washington Theater, Inc., Xxxxxxx
Xxxxxxx Cinema, Inc., New City Cinema, Inc. and Xxxxxxx Cinema, Inc. and all of
the shareholders of the foregoing.
"Stockholders Agreement" means the Stockholder's Agreement dated as of May
29, 1996 among Agent, Holdings, A. Xxxx Xxxx, Xxxxx X. Xxxxx, CMNY Capital II,
L.P., Xxxxxxx X. Xxxx, MidMark Capital II, L.P. and Xxxxxxx Theater, Inc.
"Subordinated Debt" means those 8% Subordinated Promissory Notes in the
aggregate principal amount of Five Hundred Thousand Dollars ($500,000.00) each
dated either August 31, 1995 or October 11, 1995 issued by Holdings in favor of
CMNY, and all related documents, instruments and agreements.
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"Subordination Agreement" means the Subordination Agreement executed
contemporaneously herewith by CMNY, Holdings and Agent substantially in the form
of attached Exhibit K relating to the subordination of the Subordinated Debt to
the Obligations.
"Subsidiary" means, as to any Person, a corporation, partnership 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 any Borrower (including each Borrower).
"Subsidiary Net Worth" of any Borrower, other than Holdings, shall mean, as
of any date of determination thereof, the excess of (i) the amount of the
"present fair saleable value" of the assets of such Borrower as of the date of
such determination, over (ii) the amount of all "liabilities of such Borrower,
contingent or otherwise," as of the date of such determination, as such quoted
terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors. In determining the
Subsidiary Net Worth of any Borrower for purposes of calculating the Maximum
Credit Liability, the liabilities of such Borrower to be used in such
determination pursuant to clause (ii) of the preceding sentence shall in any
event include the liabilities of such Borrower hereunder and under the other
Loan Documents in respect of all Loans other than the Loans in respect of which
such calculation is being made.
"Termination Date" means the earlier of (i) July 1, 2001; (ii) the date
upon which the entire principal of the Notes shall become due pursuant to the
provisions hereof (whether as a result of acceleration by Agent or the Requisite
Lenders or otherwise); or (iii) the date upon which the Credit Commitments
terminate pursuant to Section 9.2 hereof.
"Termination Event" means (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, but not including any such
event for which the 30 day notice requirement has been waived by applicable PBGC
regulation; or (ii) the withdrawal of a Borrower or an ERISA Affiliate of a
Borrower from a Guaranteed Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; or (iii) the
filing of a notice of intent to terminate a Guaranteed Pension Plan or the
treatment of a Guaranteed Pension Plan amendment as a termination under Section
4041 of ERISA; or (iv) the institution of proceedings to terminate a Guaranteed
Pension Plan by the Pension Benefit Guaranty Corporation; or (v) the withdrawal
or partial withdrawal of a Borrower or an ERISA Affiliate of a Borrower from a
Multiemployer Plan; or (vi) any other event or condition which might reasonably
be expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Guaranteed Pension Plan.
"Term Loan A" means the loan made pursuant to Section 2.2(b) hereof.
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"Term Loan A Note" means, with respect to the Term Loan A, the promissory
note of Borrowers, in the face amount of each Lender's Participation Percentage
of the Term Loan A in or substantially in the form of Exhibit J-2, annexed
hereto.
"Term Loan B" means the loan made pursuant to Section 2.2(C) hereof.
"Term Loan B Notes" means, collectively, with respect to the Term Loan B,
the promissory notes of Borrowers, in the face amounts of each Lender's
Participation Percentage of the Term Loan B in or substantially in the form of
Exhibit J-3, annexed hereto. "Term Loan B Note" shall mean any one of the Term
Loan B Notes.
"Term Loans" means the Term Loan A and the Term Loan B.
"Trademarks" shall mean all of the following in which a Borrower now holds
or hereafter acquires any interest: (i) all trademarks, trade names, corporate
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature, all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof or any other country, and (ii) all
reissues, extensions or renewals thereof.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of Ohio; provided, however, that in the event that, by
reason of mandatory provisions of law, any or all of the attachment, perfection,
or priority of Lender's security interest in any of the Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of Ohio, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection, or priority and for purposes of definitions
related to such provisions.
"UCC Financing Statements" mean the UCC financing statements naming the
Borrower, as debtor, and Agent, for the ratable benefit of Lenders, as creditor,
which UCC financing statements describe all or some portion of the Collateral
and which together perfect Agent's security interest in the Collateral, which
security interests can be perfected by the filing of such financing statement.
"Valuable Transfers" shall mean, in respect of any Borrower, (i) all loans,
advances or capital contributions made to or for the benefit of such Borrower
with proceeds of Loans, (ii) all debt securities or other obligations of such
Borrower acquired by such Borrower or retired by such Borrower with proceeds of
Loans, (iii) the fair market value of all property acquired with proceeds of
Loans, and transferred, absolutely and not as collateral, to such Borrower, and
(iv) all equity securities of such Borrower acquired by such Borrower with
proceeds of Loans.
"Warrant Agreement" means the Warrant Agreement between Provident and
Holdings dated the date hereof pursuant to which Holdings will issue to
Provident a warrant for Capital Stock of Holdings.
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"Working Capital" means the difference between (i) Current Assets,
excluding cash, Cash Equivalents, prepaid taxes and any amounts due from
Affiliates, except for Midmark, the Seller Group and CMNY, and (ii) Current
Liabilities, excluding the current portion of any long term Indebtedness for
Borrowed Money, accrued taxes and any amounts due to Affiliates, except for
Midmark and the Seller Group and CMNY.
ARTICLE II.
THE LOANS
Section 2.1. Commitments. Each Lender, severally and not jointly, agrees,
upon the terms and subject to the conditions contained in this Agreement, to
make the Revolving Credit Loans to Borrowers from time to time prior to the
Termination Date for such Loans, and the Term Loan A on the Closing Date in a
principal amount equal to such Lender's Participation Percentage of the
aggregate principal amount of such Loan requested by Borrowers on each occasion
and to make the Term Loan B upon satisfaction of the conditions contained in
Section 4.2 of this Agreement.
Section 2.2. Making the Loans.
(a) Revolving Credit Loan. Each Lender will, subject to all of the
applicable terms and conditions of this Agreement, make an amount equal to
its Participation Percentage in each Revolving Credit Loan available to
Borrowers at such times and in such amount as shall be requested by
Borrowers in compliance with Section 2.3, and Borrowers may borrow on a
revolving basis from Lenders on the Closing Date and from time to time
thereafter, sums not to exceed the Maximum Revolving Commitment. Borrowers
may borrow, repay and reborrow hereunder on and after the date hereof until
the Termination Date, subject to the terms, provisions and limitations set
forth herein. Amounts repaid hereunder after the Termination Date may not
be reborrowed. The Revolving Credit Loan shall become immediately due and
payable upon payment or prepayment in full of the Term Notes, and in the
case where payment is made in connection with the prepayment of the Term
Loans, a Prepayment Fee (as hereinafter defined) shall be payable in
accordance with the terms of Section 2.6(k) hereof.
(b) Term Loan A. Subject to the terms and conditions of this Agreement
and in reliance upon the representation and warranties of Borrowers herein
set forth, each Lender severally agrees to lend to Borrowers on the Closing
Date its Participation Percentage of the Term Loan A. The aggregate amount
of the Term Loan A shall be Three Million Five Hundred Thousand Dollars
($3,500,000). The Term Loan shall be funded in one drawing on the Closing
Date. Amounts borrowed under this subsection and repaid or prepaid may not
be reborrowed.
(c) Term Loan B. Subject to the terms and conditions of this Agreement
and in reliance upon the representation and warranties of each Borrower
herein set forth, each Lender severally agrees to lend to Borrowers on the
Closing Date its Participation Percentage of the Term Loan B. The aggregate
amount of the Term Loan B shall not exceed Eight Hundred Thousand Dollars
($800,000). The Term Loan B shall be
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funded in one or more drawings of not less than One Hundred Thousand
Dollars ($100,000) each upon request of Borrowers on such date or dates as
Borrowers satisfy the conditions set forth in Section 4.2 and provided that
at the time of such borrowing and taking into account the pro forma effect
of such borrowing, Borrowers' ratio of Loans to EBITDA minus Capital
Expenditures shall not exceed 2.7 to 1.0. Amounts borrowed under this
subsection 2.2(c) and repaid or prepaid may not be reborrowed.
Section 2.3. Draws, Advances and Settlement of Payments and Advances.
(a) On the Closing Date, and upon satisfaction of the conditions set
forth in Section 4.1, Lenders shall make available to Borrowers the Term
Loan A and shall advance the aggregate amount of the Term Loan A to
Borrowers on such date through wire transfer.
(b) All advances or disbursements of the Revolving Credit Loan and
Term Loan B proceeds shall be effectuated at Borrowers' request either
through wire transfer or by receipt by Agent of a check drawn on a central
disbursement account (the "Agent Disbursement Account") of Borrowers
maintained with Agent. Any request for advance by wire transfer may be
transmitted to Agent at its Head Office via facsimile provided Borrowers
immediately notify Agent by telephone of such transmission. All such
requests for wire transfer advances shall be made to and received by Agent
not later than 10:00 a.m. Cincinnati, Ohio time on the Draw Date specified
on such request and each such check or wire transfer request shall be
deemed to be a request for an advance on the Revolving Credit Loan on the
date when received and processed by Agent. Borrowers hereby designate the
President, Treasurer or Chief Financial Officer of Holdings (or any other
officer authorized by Borrowers and designated as such to Agent) acting
individually or jointly to make all requests for draws and advances.
(c) The Agent shall promptly notify each Lender of its Participation
Percentage of each requested Revolving Credit Loan and Term Loan B and the
date of such borrowing. On the borrowing date specified in such notice,
each Lender shall make its share of the borrowing available at the Head
Office of the Agent for deposit to such account as the Agent shall
designate, no later than 1:00 p.m. Cincinnati time in Federal or other
immediately available funds. Upon receipt of the funds to be made available
by Lenders to fund any Revolving Credit Loan or Term Loan B hereunder, the
Agent shall disburse such funds by depositing them into the Agent
Disbursement Account.
(d) Each bank or other financial institution, other than Provident,
with which a Borrower maintains an account for the deposit of funds shall
execute a Blocked Account Agreement pursuant to which such bank or other
financial institution shall agree to direct all funds to an account at
Agent's Head Office (the "Agent Deposit Account"). All deposits to the
Agent Deposit Account shall be the property of Agent for the benefit of
Lenders and shall not be commingled with Borrower's other funds or be
deposited in any bank account of Borrower, or used in any manner except to
pay the Obligations. Agent shall, at the close of business on each Business
Day, automatically debit the Agent Deposit Account and apply the proceeds
against the Loans and other Obligations pursuant to the provisions of
Section 2.7(b). So long as no Event of Default shall have occurred and be
continuing, if funds remain in the Agent Deposit Account following the
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application provided for in the preceding sentence, the balance will be
promptly transferred to the Agent Disbursement Account. The crediting of
items deposited in the Agent Deposit Account to the reduction of the Loans
shall be conditioned upon final payment of the item and if any item is not
so paid, the amount of any credit given for it may be charged to the Loans
or to any other deposit account of Borrower, whether or not the item is
returned.
Section 2.4. The Notes. The absolute and unconditional obligation of
Borrowers to repay to each Lender its respective Pro Rata Share of the principal
of each Loan and the interest thereon shall be evidenced by a separate Revolving
Credit Note, Term Loan A Note and Term Loan B Note, for each Lender in the
amount of its respective Credit Commitment for each Loan dated as of the Closing
Date. All payments under the Notes shall be made to Agent at its Head Office,
for the account of Lenders, and Agent shall allocate all payments on each Loan
received from Borrowers among all Lenders in accordance with each Lender's Pro
Rata Share of such Loan in accordance with Section 2.7(b).
Section 2.5. Interest Payable on the Loans.
(a) Determination of Interest Rate. Agent shall determine the Interest
Rate in effect from time to time in accordance with the terms of this
Agreement. Any change in the Interest Rate shall, for all purposes of this
Agreement and any of the other Loan Documents, become effective on the
effective date of such change as announced by Agent in accordance with
Agent's customary practices.
(b) Monthly Installments. Borrowers shall pay to Agent, for the
account of Lenders in accordance with their respective Pro Rata Share of
such Loan, monthly in arrears on the first Business Day of each month
beginning with the month following the month in which the Closing Date
falls, interest on the outstanding principal amount of the Loans at the
annual rate equal to the Interest Rate applicable to each such Loan.
(c) Interest on Overdue Payments; Default Interest Rate. Upon the
occurrence and during the continuance of any Event of Default, or if the
Agent exercises its rights hereunder to accelerate any of the Notes
pursuant to Section 9.2(b), the outstanding principal and all accrued and
unpaid interest, as well as any other Obligations due Lenders or Agent
hereunder or under any Loan Document, shall bear interest at the Default
Interest Rate, from the date on which such amount shall have first become
due and payable to Lenders or Agent or the date on which such Event of
Default shall have occurred, to the date on which such amount shall be paid
to Lenders or Agent (whether before or after judgment) or such Event of
Default shall have been otherwise waived or cured. Interest will continue
to accrue until the Obligations in respect of the payment are discharged
(whether before or after judgment).
Section 2.6. Repayments and Prepayments of Principal.
(a) Payments on the Term Loan A. Borrowers shall pay to Agent, for the
account of Lenders in accordance with their respective Pro Rata Share on
Term Loan
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A, monthly in arrears on the first Business Day of each month beginning
with the month following the month in which the Closing Date falls,
interest on the outstanding principal amount of the Term Loan A at the
annual rate equal to the Interest Rate applicable thereto. Borrowers shall
pay to Agent, and Borrowers hereby authorize Agent to charge the respective
accounts of Borrowers maintained with Agent, beginning on October 1, 1996
and on each January 1, April 1, July 1, and October 1, thereafter,
quarterly installments of principal in the amounts set forth below (or such
lesser principal amount of the Term Loan A as shall then be outstanding),
plus accrued interest thereon at the Interest Rate applicable to the Term
Loan A; provided that in any event the last installment of principal on the
Term Loan A shall be due and payable on the Termination Date (if not
earlier prepaid) and shall be in an amount sufficient to pay in full the
entire unpaid principal amount of the Term Loan A.
================================================================================
PAYMENT DATE PRINCIPAL INSTALLMENT
--------------------------------------------------------------------------------
October 1, 1996 $125,000
--------------------------------------------------------------------------------
January 1, 1997 $125,000
--------------------------------------------------------------------------------
April 1, 1997 $125,000
--------------------------------------------------------------------------------
July 1, 1997 $125,000
--------------------------------------------------------------------------------
October 1, 1997 $150,000
--------------------------------------------------------------------------------
January 1, 1998 $150,000
--------------------------------------------------------------------------------
April 1, 1998 $150,000
--------------------------------------------------------------------------------
July 1, 1998 $150,000
--------------------------------------------------------------------------------
October 1, 1998 $175,000
--------------------------------------------------------------------------------
January 1, 1999 $175,000
--------------------------------------------------------------------------------
April 1, 1999 $175,000
--------------------------------------------------------------------------------
July 1, 1999 $175,000
--------------------------------------------------------------------------------
October 1, 1999 $200,000
--------------------------------------------------------------------------------
January 1, 2000 $200,000
--------------------------------------------------------------------------------
April 1, 2000 $200,000
--------------------------------------------------------------------------------
July 1, 2000 $200,000
--------------------------------------------------------------------------------
October 1, 2000 $225,000
--------------------------------------------------------------------------------
January 1, 2001 $225,000
--------------------------------------------------------------------------------
April 1, 2001 $225,000
--------------------------------------------------------------------------------
July 1, 2001 $225,000
================================================================================
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(b) Payments on the Term Loan B. The terms of Payments and
amortization of the Term Loan B shall be determined by agreement of
Borrowers and Agent at the time such Loan shall be made.
(c) Repayments on the Revolving Credit Loan. Borrowers shall have the
right to repay the principal of the Revolving Credit Loan in full or in
part at any time and from time to time without any penalty or premium,
unless such payment is made in connection with the prepayment of the Term
Loans under conditions described in Sections 2.2(a) and 2.6(k) and the
termination of the Lenders' Commitments hereunder.
(d) Revolving Credit Loan Overadvance. If at any time the aggregate
amount of the Revolving Credit Loan outstanding to Borrowers exceeds the
Maximum Revolving Commitment, Borrowers shall be obligated to immediately
prepay the amount that exceeds the Maximum Revolving Commitment.
(e) Prepayments from Extraordinary Dispositions. Immediately upon
receipt by a Borrower of Net Proceeds, resulting from an Extraordinary
Disposition other than the issuance of Equity Interests, Borrowers shall
prepay the Loans in an amount equal to the total Net Proceeds then subject
to this subsection in accordance with subsection 2.6(j). Notwithstanding
the foregoing, in the event that a Borrower (1) has an accrued tax
liability with respect to such an Extraordinary Disposition or (2)
reasonably expects the proceeds of such Extraordinary Disposition to be
reinvested within six (6) months of the receipt thereof in productive
assets of a kind then used or useable in the business of Holdings and its
Subsidiaries, or in the case of insurance and condemnation proceeds,
utilized within six (6) months of the receipt thereof (or such longer
period as the Agent may agree to, such agreement not to be unreasonably
withheld if the Borrower has timely begun and is diligently pursuing the
rebuilding or repair in question but reasonably expects that such
rebuilding or repair will not be completed within such six (6) month
period) to repair the loss or damage to or otherwise rebuild the assets in
respect of which the proceeds were paid, then Borrowers shall deliver such
proceeds or portion thereof to Agent to be held by Agent in a cash
collateral account. Upon Borrowers' request, Agent and Lenders shall
release such proceeds to Borrowers for payment of the accrued tax liability
or for reinvestment, repair or rebuilding. In the event such Borrower (1)
is not required to pay all or any portion of the accrued tax liability or
(2) fails to reinvest such proceeds or utilize them for repair or
rebuilding within six (6) months of the receipt thereof (or such longer
period that may be agreed to pursuant to this subsection 2.6(j)), Borrowers
authorize and direct Agent and Lenders to apply such amount as a prepayment
of the Loans to be applied in accordance with subsection 2.6(j).
(f) Prepayments for Excess Cash Flow. Within ninety (90) days after
the end of each Fiscal Year of Holdings beginning with the Fiscal Year
ending December 31, 1996, Borrowers shall prepay the Loans in an amount
equal to twenty-five percent (25%) of Excess Cash Flow for such prior
Fiscal Year calculated on the basis of the audited financial statements for
such Fiscal Year delivered to Lender pursuant to subsection 6.1(c). All
such prepayments of the Term Loans from Excess Cash Flow shall be applied
in accordance with subsection 2.6(j). Concurrently with the making of any
such payment, Borrowers shall deliver to Agent a certificate of Holding's
chief executive
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officer or chief financial officer demonstrating its calculation of the
amount required to be paid.
(g) Prepayment from Equity Offerings. In the event that any Borrower
issues Equity Interests or debt securities, no later than the third
Business Day following the date of receipt of the proceeds from any sale of
such Equity Interests (other than: proceeds of the issuance of a Borrower's
Capital Stock received A) on or before the Closing Date (including funds
received on or prior to the Closing Date under the Equity Transaction) and
B) received after the Closing Date in connection with the Lesser
Transaction, provided such proceeds do not exceed $750,000; proceeds, if
any, from the issuance of a Borrower's Capital Stock to members of the
management of a Borrower or its Subsidiaries or officers, directors or
employees of any of them; proceeds from the issuance of Equity Interests to
a Borrower or any Subsidiary of a Borrower by any Person that was a
Subsidiary of a Borrower immediately prior to such issuance; proceeds
constituting equity contributions to any Subsidiary of a Borrower by a
Borrower or any of its Subsidiaries; (v) proceeds from the issuance of
Equity Interests pursuant to options, rights or warrants issued by a
Borrower that are outstanding as of the date of this Agreement or that are
or may be obligated to be issued under agreements that are outstanding as
of the date of this Agreement; and (vi) the Loans contemplated hereby),
Borrowers shall prepay the Loans in an amount equal to the lesser of (1)
the amount of such proceeds, net of underwriting discounts and commissions
and other reasonable costs associated therewith or (2) the amount of the
Obligations then outstanding. Prepayments made under this subsection 2.6(g)
shall be applied to the Loans in accordance with subsection 2.6(j).
(h) Prepayment from Key Man Insurance. In the event that Holdings or
any other Borrower receives proceeds from payment of the key man life
insurance maintained pursuant to Section 6.3, Borrowers shall prepay the
Loans in an amount equal to the lesser of such insurance proceeds or the
amount of the Obligations then outstanding. Prepayments made under this
subsection 2.6(j) shall be applied to the Loans in accordance with
subsection 2.6(j).
(i) Maturity. Subject to the terms and conditions of this Agreement,
Borrowers will be entitled to reborrow all or any part of the principal of
the Revolving Credit Notes repaid or prepaid prior to the Termination Date.
The Credit Commitments shall terminate and all of the indebtedness
evidenced by the Revolving Credit Notes and the Term Loan B Notes shall, if
not sooner paid, be in any event absolutely and unconditionally due and
payable in full by Borrower on July 1, 2001, the date of the final maturity
of such Notes. The Term Loan A Notes shall, if not sooner paid, be in any
event absolutely and unconditionally due and payable in full by Borrowers
on July 1, 2001, the date of the final maturity of such Notes.
(j) Application of Proceeds. With respect to mandatory prepayments
described in paragraphs 2.6(f) through 2.6(h) above, such prepayments shall
first be applied in the inverse order of maturity to the payment of the
remaining installments on the Term Loan B, and at any time after the Term
Loan B shall have been repaid in full, such prepayments shall be applied in
the inverse order of maturity to the payment of the
-31-
remaining installments on the Term Loan A, and thereafter such payments
shall be applied in repayment of the Revolving Credit Loan.
(k) Prepayment Fees. If Borrowers voluntarily prepay the Term Loans in
full prior to the third anniversary of the Closing Date, the Revolving
Credit Loan shall, in accordance with Section 2.2(a) become due and payable
in full, and Borrowers shall pay to Agent, for the ratable benefit of
Lenders, as liquidated damages and compensation for the costs of being
prepared to make funds available to Borrowers under this Agreement, and not
as a penalty, an amount determined by multiplying (x) the amount of the
Credit Commitment times (y) three percent (3%) upon prepayment during the
first Loan Year; two percent (2%) upon prepayment during the second Loan
Year; and one percent (1%) upon prepayment during the third Loan Year (the
"Prepayment Fee"). Borrowers shall also pay a Prepayment Fee in connection
with any partial prepayment of any Term Loan; provided, however, that if
such prepayment, either in full or in part, occurs as a result of any event
described in paragraphs 2.6(e), 2.6(f), or 2.6(h) above, no such Prepayment
Fee shall be required.
Section 2.7. Payments and Computations.
(a) Time and Place of Payments. Notwithstanding anything in this
Agreement or any of the other Loan Documents to the contrary, each payment
payable by Borrowers to the Agent or any Lender under this Agreement or any
of the other Loan Documents other than payments pursuant to Section 2.3(d)
made as a result of the application of funds in the Agent Deposit Account,
shall be made directly to the Agent, at Agent's Head Office, not later than
12:00 noon Eastern Standard or Eastern Daylight Time, as applicable in
Cincinnati, Ohio, on the due date of each such payment in immediately
available and freely transferrable funds. The Agent will promptly cause to
be distributed to each Lender in immediately available and freely
transferrable funds such Lender's Pro Rata Share of each such payment
received by the Agent. In order to cause timely payment to be made to Agent
of all Obligations as and when due, Borrowers hereby authorize and direct
Agent, at Agent's option to debit the Agent's Disbursement Account (by
increasing the principal balance of the Revolving Credit Loan) when such
Obligations become due.
(b) Application of Funds. Notwithstanding anything herein to the
contrary, the funds received by Agent with respect to the Obligations shall
be applied as follows:
(i) No Default. If the Notes have not been accelerated pursuant
to Section 9.2(b) and if no Default or Event of Default hereunder or
under the Notes or any of the other Loan Documents shall have occurred
and be continuing at the time Agent receives such funds, in the
following manner: first, to the payment of all fees, charges, and
other sums (with exception of principal and interest) due and payable
to Agent or Lenders under the Notes, this Agreement or the other Loan
Documents at such time; second, to the payment of all of the interest
which shall be due and payable on the principal of the Notes at the
time of such payment in accordance with each Lender's Pro Rata Share;
third, to the payment of
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such amount of principal of the Term Loan B Notes that is then due in
accordance with each Lender's Pro Rata Share; fourth, to the payment
of such amount of principal of the Term Loan A Notes that is then due
in accordance with each Lender's Pro Rata Share; fifth, to the payment
of principal of the Revolving Credit Loan Notes in accordance with
each Lender's Pro Rata Share; and sixth, to Borrowers.
(ii) Default. If the Notes have been accelerated pursuant to
Section 9.2(b), or if a Default or Event of Default hereunder shall
have occurred and be continuing hereunder or under the Notes or any of
the other Loan Documents at the time Agent receives such funds, in the
following manner: first, to the payment or reimbursement of Lenders
and Agent for all costs, expenses, disbursements and losses which
shall have been incurred or sustained by Lenders or Agent in or
incidental to the collection of the Obligations owed by Borrowers
hereunder or the exercise, protection, or enforcement by Lenders and
Agent of all or any of the rights, remedies, powers and privileges of
Lenders and Agent under this Agreement, the Notes, or any of the other
Loan Documents and in and towards the provision of adequate indemnity
to the Agent and any of the Lenders against all taxes or Liens which
by law shall have, or may have priority over the rights of the Agent
or Lenders in and to such funds and second, to the payment of all of
the Obligations in accordance with Section 2.7(b)(i) above.
(c) Payments on Business Days. If any sum would (but for the
provisions of this paragraph (c)) become due and payable to Agent or any
Lender by Borrowers under any of the Loan Documents on any day which is not
a Business Day, then such sum shall become due and payable on the Business
Day next succeeding the day on which such sum would otherwise have become
due and payable hereunder or thereunder, and interest payable to Agent or
any Lender under this Agreement or any of the other Loan Documents shall
continue to accrue and shall be adjusted by the Agent accordingly.
(d) Computation of Interest. All computations of interest payable
under this Agreement, the Notes, or any of the other Loan Documents shall
be computed by Agent on the basis of the actual principal amount
outstanding on each day during the payment period and shall be calculated
on the basis of the actual number of days elapsed during such period for
which interest is being charged, predicated on a year consisting of three
hundred and sixty (360) days. The daily interest charge shall be one
three-hundred-sixtieth (1/360th) of the annual interest amount. Each
determination of any interest rate by Agent pursuant to this Agreement, any
Note, or any of the other Loan Documents shall be conclusive and binding on
Borrowers in the absence of manifest error. Absent manifest error, a
certificate or statement signed by an authorized officer of Agent shall be
conclusive evidence of the amount of the Obligations due and unpaid as of
the date of such certificate or statement.
Section 2.8. Payments to be Free of Deductions. Each payment payable by
Borrowers to Agent or any Lender under this Agreement, any Note, or any of the
other
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Loan Documents shall be made in accordance with Section 2.7 hereof, without
set-off or counterclaim and free and clear of and without any deduction of any
kind for any taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any political subdivision or any taxing or other
authority therein, unless Borrowers are compelled by law to make any such
deduction or withholding. In the event that any such obligation to deduct or
withhold is imposed upon Borrowers with respect to any such payment payable by
Borrowers to Agent or any Lender, (a) Borrowers shall be permitted to make the
deduction or withholding required by law in respect of the said payment, and (b)
there shall become and be absolutely due and payable by Borrowers to Agent or
such Lender on the date on which the said payment shall become due and payable
and Borrowers hereby promise to pay to Agent or such Lender on such date, such
additional amount as shall be necessary to enable Agent or such Lender to
receive the same net amount which Agent or such Lender would have received on
such due date had no such obligation been imposed by law. Anything in this
Section 2.8 to the contrary notwithstanding, the foregoing provisions of this
Section 2.8 shall not apply in the case of any deductions or withholdings made
in respect of taxes charged upon or by reference to the overall net income,
profits or gains of Agent or any Lender. Borrowers shall have no obligation to
make any payment pursuant to this Section 2.8 with respect to any Lender who is
not a party hereto on the Closing Date unless no such payments would be payable
to any such Lender on the date it becomes a party hereto and no such payments
could be reasonably expected to be payable to such Lender and if such Lender is
organized under the laws of a foreign jurisdiction, such jurisdiction is exempt
from United States withholding tax and such Lender has provided Borrowers with
an Internal Revenue Form 4224 or Form 1001 or other certificate of document
required under United States law to establish entitlement to such exemption.
Section 2.9. Use of Proceeds.
(a) Permitted Uses of Loan Proceeds. Each Borrower represents,
warrants and covenants to Agent and each Lender that all proceeds of the
Loans shall be used by Borrowers solely for the purpose of refinancing
existing debt, financing working capital, providing acquisition financing
and for general corporate purposes.
(b) Prohibited Uses. Each Borrower represents, warrants and covenants
to Agent and each Lender that no part of the proceeds of the Loans will be
used (directly or indirectly) so as to result in a violation under
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System or for any other purpose violative of any rule or regulation of such
Board.
Section 2.10. Additional Costs, Etc. If any Lender shall reasonably
determine that any future applicable law, rule or regulation, or any change in
any present law or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital, as a
consequence of its obligations hereunder, to a level below that
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which such Lender could have achieved but for such adoption, change or
compliance by any amount deemed by such Lender to be material and is not
otherwise reflected in the interest and other charges payable by Borrowers
hereunder, then Borrowers shall pay to such Lender upon demand such amount or
amounts, in addition to the amounts payable under the other provisions of this
Agreement, or the Notes, as will compensate such Lender for such reduction.
Determinations by any Lender of the additional amount or amounts required to
compensate such Lender in respect of the foregoing shall be conclusive in the
absence of manifest error. In determining such amount or amounts, Lender may use
any reasonable averaging and attribution methods.
Section 2.11. Agent and Lender Statements. A statement signed by an officer
of any Lender (as the case may be) setting forth any additional amount required
to be paid by Borrowers to Agent or such Lender under Sections 2.8 and 2.10
hereof, and the computations made by Agent or such Lender to determine such
additional amount or amounts, shall be submitted by Agent or such Lender to
Borrowers in connection with each demand made at any time by Agent (and copies
thereof delivered to each other Lender) or such Lender under either of such
Sections. A claim by Agent or any Lender for all or any part of any additional
amounts required to be paid by Borrowers under Sections 2.8 and 2.10 hereof may
be made before or after any payment to which such claim relates. Each such
statement shall, in the absence of manifest error, constitute conclusive
evidence of the additional amount required to be paid to Agent or such Lender,
provided it sets out in reasonable detail the reasons for such notice and the
averaging and attribution methods used by Agent or such Lender to determine the
amounts set forth in such notice.
Section 2.12. Allocation of Liability.
(a) Notwithstanding anything herein to the contrary, each Borrower's
liability (other than Holdings') under the Notes shall be limited to the
Maximum Credit Liability for each Borrower as determined at the earlier of
the date of commencement of a case under Title 11 of the United States Code
(or any successor provision) in which such Borrower is a debtor or the date
enforcement is sought hereunder or under the Notes; provided, however, that
each Borrower shall be jointly and severally liable for all advances,
charges, costs and expenses, including reasonable attorneys' fees incurred
or paid by Agent or any Bank in exercising any right, power or remedy
conferred by this Agreement or any enforcement thereof, including without
limitation those additional costs, claims and damages set forth in Section
11.5.
(b) Each Borrower agrees that in the event of the dissolution or
insolvency of any Borrower, the inability of any Borrower to pay its debts
as they become due, an assignment by any Borrower for the benefit of its
creditors, or the institution of any bankruptcy or other proceeding by or
against any Borrower alleging that such Borrower is insolvent or unable to
pay its debts as they become due, and whether or not such event shall occur
at a time when the Obligations are not then due and payable, the other
Borrowers shall pay the Obligations promptly upon demand as if the
Obligations were then due and payable. Each Borrower agrees that upon the
filing by or against any other Borrower of any proceeding under any present
or future provision of the United States Bankruptcy Code, or any other
similar federal or state statute, other Borrowers
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shall have no right to contribution, indemnification, or any recourse
whatsoever against the bankrupt Borrower for any liability incurred by the
other Borrowers under the terms of the Loan Documents. Each Borrower agrees
that this provision shall continue to be effective or be reinstated, as the
case may be, if at any time any payment, or any part thereof, of principal,
interest or any other amount with respect to the Obligations is rescinded
or must otherwise be restored by Agent or the Banks upon the bankruptcy or
reorganization of any Borrower, any other Person or otherwise.
Each Borrower further agrees that, to the extent that any Borrower makes a
payment to Agent, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside or otherwise required to be repaid to another Borrower, its estate,
trustee, receiver or any other party, including without limitation, under
any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the obligation or part
thereof which has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the date such
initial payment, reduction or satisfaction occurred.
ARTICLE III.
SECURITY AGREEMENT
Section 3.1. Security Interest. To secure the prompt repayment of the Notes
and the Obligations, Borrowers hereby grant, and hereby pledge and collaterally
assign, to Agent, on behalf of the Lenders, a lien and security interest in and
to all of each Borrower's personal property and fixtures, wherever located,
whether now or hereafter owned, existing or acquired or hereafter arising,
including, without limitation, the Collateral of each Borrower; further, each
Borrower has executed and delivered to Agent, on behalf of the Lenders,
certificates of title and the like as necessary from time to time to secure the
Obligations hereunder; and shall deliver to Agent, on behalf of the Lenders, to
the extent required herein or upon Agent's request in accordance with the terms
of this Agreement, all instruments, documents and chattel paper in which
Borrowers from time to time have an interest and such other documents as Agent
may request to perfect a security interest in the Collateral..
Section 3.2. Mortgages and Liens on Real Property. To secure further such
liabilities and obligations, each Borrower has granted or will grant to Agent,
on behalf of the Lenders, a first lien, subject to the Permitted First Liens,
upon all real property owned by such Borrower and a first lien, subject to the
Permitted First Liens, on all leasehold interests (with the exception of the
month-to-month leasehold estate held by CCC Xxxxxxx Twin Cinema Corporation in
Xxxxxx County, New Jersey and a leasehold estate in the Manasquan Cinema located
in Monmouth County, New Jersey) of such Borrower, each of which are identified
on Schedule 3.1, and each such Borrower has executed or shall execute and
deliver to Agent, on behalf of the Lenders, the Mortgages and Leasehold
Mortgages and valid assignments of all other property rights (including, without
limitation, rights to receive rents and rights with respect to operating
agreements, options, judgments and claims) which now exist or which may exist or
arise hereafter from time to
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time including without limitation, the Assignments of Option and Operating
Agreements and any consents relating thereto reasonably required by Agent.
Borrowers represent that the Manasquan Cinema is currently being leased by
CCC Manasquan Cinema Corporation from Algonquin Arts Partnership pursuant to a
certain Lease dated October 5, 1995 (the "Original Manasquan Lease"), and that a
lease for an additional five (5) year term commencing on the expiration date of
the Original Manasquan Lease has been executed by such parties ("Additional
Manasquan Lease" and together with the Original Manasquan Lease, the "Manasquan
Lease"). Holdings represents to Lenders and Agent that its current intention is
to abandon the premises. If at any time Holdings determines not to cancel the
Additional Manasquan Lease, Holdings agrees to notify Agent and CCC Manasquan
Cinema Corporation shall promptly execute a Leasehold Mortgage in favor of Agent
relating to the leasehold estate created by the Manasquan Lease. Further, if
Holdings does not provide satisfactory evidence to Agent of the termination of
the Manasquan Lease prior to the commencement date of the Additional Manasquan
Lease, CCC Manasquan Cinema Corporation shall promptly execute a Leasehold
Mortgage in favor of Agent relating to the leasehold estate created by the
Additional Manasquan Lease. Borrowers covenant and agree that in connection with
such Leasehold Mortgage, they shall provide evidence of title and such other
documentation as Agent may require and Borrowers shall use their best efforts to
obtain a landlord consent and a subordination, attornment and nondisturbance
agreement from any fee simple mortgagee prior to such commencement date.
Section 3.3. Pledge of Stock. As additional collateral for the Loans to be
made hereunder, Holdings shall execute and deliver to Agent, for the ratable
benefit of the Lenders, a Pledge Agreement with respect to all Capital Stock of
all Subsidiaries now owned or hereafter acquired by Holdings.
Section 3.4. Financing Statements; Additional Documents. Borrowers shall
take all necessary action or as requested by Agent or any Lender to continue as
perfected the first lien (subject only to the Permitted First Liens) and
security interest in the Collateral of Lenders and Agent, except for such
Collateral in which a first lien can be perfected only by possession and such
possession is not required by Agent at such time. Such filings shall be in form
and substance required by Agent, and Borrowers shall pay all costs of recording
and filing the financing statements (and any continuation or termination
statements with respect thereto), the Mortgages, Leasehold Mortgages, the
Assignment of Patents, the Assignment of Trademarks, and any other documents,
titles, statements, assignments or the like reasonably required to create,
maintain, preserve or perfect the liens or security interests granted under the
Loan Documents, together with costs and expenses of any lien or UCC searches
required by Agent in connection with the making of the Loans. At Agent's
request, Borrowers shall execute and deliver to Agent, on behalf of the Lenders,
at any time and from time to time hereafter, all supplemental documentation that
Agent may reasonably request to perfect, maintain, preserve or continue the
security interest and liens granted Lenders and Agent hereby and under any of
the other Loan Documents, in form and substance acceptable to Agent, and pay the
costs of preparing and recording or filing of the same. Borrowers agree that a
carbon, photographic, or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement. Except as otherwise provided
in this Agreement,
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Borrowers, immediately on acquiring Real Estate, Inventory, or Accounts or
Proceeds thereof for which separate perfection is necessary or reasonably
considered desirable by Agent, shall deliver to Agent, on behalf of the Lenders,
any and all evidence of ownership of any such property and shall take all such
action as may be reasonably necessary to perfect Agent's security interest in
such Property, including without limitation, the execution and recording or
filing of additional Mortgages, Leasehold Mortgages and UCC financing
statements. Each Lender (by any of its officers, employees or agents, but only
upon authorization of an officer of such Lender) shall have the right, at any
time or times during Borrowers' usual business hours, to inspect the Collateral,
all records related thereto (and to make extracts from such records) and the
premises upon which any of the Collateral is located, to discuss Borrowers'
affairs and finances with any accountant, account debtor or creditor of any
Borrower and to verify the amount, quality, quantity, value and condition of, or
any other matter relating to, the Collateral. Borrowers shall perform all
reasonable acts and execute or cause to be executed all documents, including,
without limitation, the Assignments of Option and Operating Agreements, and the
Assignment of Patents and the Assignment of Trademarks for filing with the
United States Patent and Trademark Office, state offices and corresponding
foreign registries as Agent reasonably deems necessary or desirable, to
establish, perfect, record and maintain the security interest in the
Intellectual Property and the goodwill symbolized thereby (whether now existing
or hereafter acquired).
Section 3.5. Accounts; Chattel Paper; Lease Agreements. After the
occurrence of an Event of Default and during the continuance thereof, Agent
shall have the right at any time to notify any Person obligated to make payments
to a Borrower with respect to Accounts, Chattel Paper and lease agreements to
make such payments directly to Agent, on behalf of the Lenders, or directly into
the deposit accounts subject to a Blocked Account Agreement.
Section 3.6. Release of Collateral. Upon Borrowers' full performance of
their Obligations in respect of the Loans, including, without limitation,
payment in full of the Notes, and termination of Borrowers' right to borrow
under this Agreement, Agent and Lenders shall release their interest in all
Collateral. Upon any sale of Collateral permitted pursuant to Section 8.6, Agent
shall release its interest in the portion of the Collateral being sold, without
prejudice to the continuation of its lien on any other Collateral.
ARTICLE IV.
CONDITIONS PRECEDENT TO DISBURSEMENTS
Section 4.1. Conditions Precedent to Initial Closing. On or prior to the
Closing Date, each of the following conditions precedent shall have been
satisfied:
(a) Certified Copies of Charter Documents and Bylaws. Agent and each
Lender shall have received from each Borrower a copy, certified by the
Secretary or an Assistant Secretary of such Borrower to be true and
complete on and as of the Closing Date, of the charter or other
organization documents and by-laws of such Borrower as in effect on the
Closing Date (together with all, if any, amendments thereto); and the
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charter or other organization documents of each Borrower certified by the
applicable Secretary of State.
(b) Proof of Corporate Authority. Agent and each Lender shall have
received from each Borrower copies, certified by the Secretary or an
Assistant Secretary of such Borrower to be true and complete on and as of
the Closing Date, of records of all action taken by such Borrower to
authorize the execution and delivery of this Agreement and the other Loan
Documents and to which it is or is to become a party as contemplated or
required by this Agreement; its performance of all of its obligations under
each of such documents; and the making by such Borrower of the borrowings
contemplated hereby. Agent shall have received from the Delaware Secretary
of State a Certificate of Good Standing of recent date certifying the
existence and good standing of each Borrower under the laws of the State of
Delaware and its good standing in each state where each Borrower is
required to qualify to conduct business.
(c) Incumbency Certificate. Agent and each Lender shall have received
from each Borrower an incumbency certificate, dated as of the Closing Date,
signed by the Secretary or an Assistant Secretary of each Borrower and
giving the name and bearing a specimen signature of each individual who
shall be authorized to sign, in the name and on behalf of such Borrower,
each of the Loan Documents to which such Borrower is or is to become a
party on the Closing Date; and to give notices and to take other action on
behalf of such Borrower under the Loan Documents.
(d) Officers' Certificates. Agent and each Lender shall have received
from each Borrower a certificate dated as of the Closing Date, signed by a
duly authorized officer of such Borrower and certifying that each of the
representations and warranties made by and on behalf of such Borrower to
Agent and each Lender in this Agreement and in the other Loan Documents was
true and correct when made, and is true and correct on and as of the
Closing Date.
(e) Loan Documents, etc. Each of the Loan Documents shall have been
duly and properly authorized, executed and delivered by each Borrower and
shall be in full force and effect on and as of the Closing Date; executed
originals of each of the Notes shall have been delivered to each Lender in
accordance with their respective Credit Commitments, and executed originals
or (as the case may be) executed counterparts of each of the other Loan
Documents shall have been delivered to Agent and/or each Lender.
(f) Actions to Perfect Liens. Agent shall have received evidence in
form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including without limitation, the filing
of duly executed financing statements on Form UCC-1, necessary or, in the
opinion of Agent, desirable to perfect the Liens created by the Security
Documents shall have been completed.
(g) Insurance. Agent shall have received copies of certificates of
insurance executed by each insurer or its authorized agent evidencing the
insurance required to be maintained by each Borrower pursuant to Section
6.2(b), and a certificate of a nationally recognized insurance broker
reasonably satisfactory to Agent certifying
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that insurance complying with such Section has been obtained and is in full
force and effect.
(h) Mortgages and Title Evidence. Agent shall have received the
following documents, each of which shall be executed (and, where
appropriate, acknowledged) by Persons satisfactory to the Agent:
(i) the following Mortgages and Leasehold Mortgages, in each
case duly executed and delivered by the respective Borrowers
(and where appropriate by the trustee thereunder) in
recordable form (in such number of copies as the Agent shall
have requested), together with such Uniform Commercial Code
financing statements as may be needed in order to perfect
the security interests granted by each of the Mortgages and
Leasehold Mortgages in any fixtures and other property
therein described which may be subject to the Uniform
Commercial Code, in each case appropriately completed and
duly executed and in proper form for filing in all offices
in which required:
(A) Open-End Leasehold Mortgage executed by Clearview
Theatre Group, Inc. relating to a leasehold estate in
property located in Somerset County, New Jersey;
(B) Open-End Leasehold Mortgage executed by CCC Washington
Cinema Corp. relating to a leasehold estate in property
located in Bergen County, New Jersey;
(C) Open-End Leasehold Mortgage executed by CCC Xxxxxxx
Cinema Corp. relating to a leasehold estate in property
located in Passaic County, New Jersey;
(D) Open-End Leasehold Mortgage executed by CCC Xxxxxxx
Cinema Corp. relating to a leasehold estate in property
located in Bergen County, New Jersey; and
(E) Open-End Leasehold Mortgage executed by New City Cinema
Corp. relating to a leasehold estate in property
located in Rockland County, New York.
(ii) an Environmental Indemnity Agreement duly executed and
delivered by each of the Borrowers.
(iii) with respect to the Real Estate covered by the Leasehold
Mortgages identified in (i) above, title evidence
satisfactory to each Lender that each respective Borrower
has a good, marketable leasehold estate in the Real Estate
subject only to the Permitted First Liens.
(iv) with respect to the Leasehold Mortgages identified in (i)
above, consents of the respective landlords consenting to
the mortgaging of the respective Borrower's leasehold
estate.
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(v) with respect to the Leasehold Mortgages identified in (i)
(A) above, non-disturbance and attornment agreements
executed by each of the respective landlords and their
respective mortgage holders, each in form and substance
satisfactory to Agent.
Borrowers shall have paid to the Agent an amount equal to all title search
and exam fees, mortgage and mortgage recording taxes, intangibles taxes, stamp
taxes and other taxes payable in connection with the execution and delivery of
the Mortgages and Leasehold Mortgages and the obligations secured thereby and
the recording of the Mortgages and Leasehold Mortgages in the appropriate land
offices.
(i) Legality of Transactions. No change in applicable law shall have
occurred as a consequence of which it shall have become and continue to be
unlawful for Agent or any Lender to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date; or for Borrower to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date.
(j) Performance, Etc. Each Borrower shall have duly and properly
performed, complied with and observed each of its covenants, agreements and
obligations contained in each of the Loan Documents to which each Borrower
is a party or by which such Borrower is bound on the Closing Date. No event
shall have occurred on or prior to the Closing Date, and no condition shall
exist on the Closing Date, which constitutes a Default or an Event of
Default.
(k) Proceedings and Documents. All corporate, governmental and other
proceedings and consents in connection with the transactions contemplated
by this Agreement, each of the other Loan Documents and all instruments and
documents incidental thereto shall be in form and substance satisfactory to
Agent and Lenders, and Agent and each Lender shall have received all such
counterpart originals or certified or other copies of all such instruments
and documents as Agent and each Lender shall have requested.
(l) Compliance with Laws. The borrowings made under this Agreement are
and shall be in compliance with the requirements of all applicable laws,
regulations, rules and orders, including without limitation, the
Environmental Laws and the requirements imposed by the Board of Governors
of the Federal Reserve System under Regulations U, G and X, and by the SEC.
(m) Legal Opinion. Agent and Lenders shall have received a written
legal opinion or opinions, addressed to Agent and each Lender and dated as
of the Closing Date, from legal counsel for each Borrower, which shall be
substantially in the form of attached Exhibit L and which legal opinions
shall otherwise be acceptable to Agent and each Lender.
(n) Legal Fees. Borrowers shall have reimbursed Agent for all fees and
disbursements of legal counsel to Agent (in its capacity as Agent and a
Lender) which shall have been incurred by Agent through the Closing Date in
connection with the
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preparation, negotiation, review, execution and delivery of the Loan
Documents and the handling of any other matters incidental thereto.
(o) Payment of Closing Fee. Borrowers shall have paid to Agent the
closing fee separately agreed to between Provident and Borrowers.
(p) Post-Closing Availability. After giving effect to the consummation
of the transactions contemplated hereby and in the Equity Transaction the
sum of (I) Borrowers' cash on hand, and (ii) unborrowed amounts of the
Revolving Credit Loan and Term Loan B, shall be at least One Million Three
Hundred Thousand Dollars ($1,300,000) and Holdings shall have delivered to
Agent a certificate as of the Closing Date demonstrating such excess
availability.
(q) Equity Transaction. Borrowers shall have closed, or be prepared to
simultaneously close with the closing of the Loans, the Equity Transaction
on terms and conditions satisfactory to Agent and each Lender.
(r) Key Man Life Insurance. Holdings shall have secured and assigned
to Agent the key man life insurance policy required to be maintained
pursuant to Section 6.3 hereof.
(s) Lien Searches. Agent shall have received the results of a recent
search by a Person satisfactory to Agent, of the UCC, judgment and tax lien
filings which may have been filed with respect to personal property of
Borrowers or any of their Subsidiaries in the jurisdictions listed on
Schedule 5.21, and the results of such search shall be satisfactory to
Agent.
(t) Environmental Assessment. Agent and Lenders shall have received an
environmental survey and assessment by a firm of licensed engineers in form
and substance satisfactory to each, and the conditions disclosed in such
survey and assessment shall be satisfactory to Agent and Lenders.
(u) Changes; None Adverse. From the date of the Current Financial
Statements referred to in Section 5.5 of this Agreement to the Closing
Date, no changes shall have occurred in the assets, liabilities, financial
condition, business, operations or prospects of Borrowers which,
individually or in the aggregate, are materially adverse to Borrower.
(v) Financial Statements. Each Lender shall have received the
financial statements referred to in Section 5.5, certified by an officer of
Holdings and each Lender shall have been satisfied that such financial
statements accurately reflect the financial status and condition of
Borrowers in all material respects.
(w) Warrants. Holdings shall have issued to Provident warrants to
purchase the agreed upon percentage of the fully-diluted Equity Interests
of Holdings in form and substance satisfactory to Provident and
substantially in the form of attached Exhibit M.
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(x) Subordination Agreement. Agent shall have received the
Subordination Agreement, executed by Holdings and CMNY.
Section 4.2. Conditions Precedent to Subsequent Loans. The obligation of
the Lenders to make any Revolving Credit Loan or any disbursement of Term Loan B
shall be subject to the satisfaction, prior thereto or concurrently therewith,
of each of the following conditions precedent:
(a) Legality of Transactions. It shall not be unlawful for any Lender
or the Agent to perform any of its agreements or obligations under any of
the Loan Documents to which such Person is a party on the Draw Date of such
Loan or for any Borrower to perform any of its material agreements or
obligations under any of the Loan Documents.
(b) Representations and Warranties. Each of the representations and
warranties made by or on behalf of Borrowers to the Lenders or the Agent in
this Agreement or any other Loan Document shall be true and correct in all
material respects when made and shall, for all purposes of this Agreement,
be deemed to be repeated on and as of the date of Borrowers' request for
such Loan, as the case may be, and shall be true and correct in all
material respects as of each of such dates (unless specifically stated to
relate only to an earlier date, in which case such representation or
warranty shall be true and correct in all material respects as of such
earlier date), except, in each case, as affected by the consummation of the
Equity Transaction and the Lesser Transaction, each as contemplated by the
terms hereof, and the transactions contemplated by the Loan Documents.
(c) No Default. No event shall have occurred on or prior to such date
and be continuing on such date, and no condition shall exist on such date
which constitutes a Default or Event of Default.
(d) Maximum Credit. The making of such Revolving Credit Loan shall not
result in the sum of all outstanding Revolving Credit Loans exceeding the
Maximum Revolving Credit Commitment.
(e) Term Loan B. Advances under the Term Loan B shall be subject to
the discretion of Agent, and the proceeds thereof shall be used solely for
such purposes as Agent may from time to time approve and shall be repaid on
such terms and conditions as Agent and Borrowers shall agree at the time
such Term Loan B advances are made.
(f) Post Closing Requirements. Compliance with the Post Closing
Requirements set forth in Section 4.3 hereof.
Section 4.3. Post Closing Requirements. Certain closing conditions
originally established to be satisfied at Closing have not been satisfied.
Despite the absence of these closing requirements, Lenders and Agent have agreed
to proceed with Closing provided Borrowers agree to diligently pursue the
satisfaction of the following requirements within the time periods set forth
below:
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(a) Delivery to Agent of the Assignment of Life Insurance acknowledged
by Massachusetts Mutual Life Insurance Company and delivery to Agent of the
original life insurance policy No. 0-000-000, each within twenty-one (21)
days from the Closing Date.
(b) Delivery to Agent within twenty-one (21) days of the Closing Date,
a Non-Disturbance and Attornment Agreement, in form and substance
satisfactory to Agent, executed by landlord and its respective mortgagee
for the Xxxxxxx leasehold located in Passaic County, New Jersey.
(c) Delivery to Agent within twenty-one (21) days of the Closing Date
of the following Blocked Account Agreements:
(i) CCC Madison Triple Cinema Corp. and Chemical Bank New Jersey,
NA;
(ii) CCC Port Washington Cinema Corp. and Fleet Bank;
(iii) Clearview Theatre Group Inc. and Peaport-Gladstone Bank;
(iv) CCC Xxxxxxx Twin Cinema Corp. and PNC Bank, NA;
(v) CCC Manasquan Cinema Group and Somerset Bank;
(vi) CCC Grand Avenue Cinema Group and Fleet Bank;
(vii) CCC Herricks Cinema Corp. and Fleet Bank;
(viii) CCC Washington Cinema Corp. and Midlantic National Bank North;
(ix) CCC Xxxxxxx Cinema Corp. and Midlantic National Bank;
(x) CCC Xxxxxxx Cinema Corp. and Midlantic National Bank North;
(xi) CCC New City Cinema Corp. and Bank of New York.
(d) Delivery to Agent within twenty-one (21) days of the Closing Date
a Consent Agreement executed by Cinema Grand Avenue, Inc. and Triplex
Movies at Port Washington, Inc. relating to the Assignment of Option and
Management Agreement for the Grand Avenue and Port Washington Cinemas;
(e) Delivery to Agent within ten (10) of the Closing Date evidence
satisfactory to Agent that the collateral assignments of the leases by the
Seller Group have been released as the same relates to the Xxxxxxx Cinema
and the New City Cinema;
(f) Delivery to Agent within twenty-one (21) days of the Closing Date
certified copies of each of the real property leases to which a Borrower is
a party, including without limitation, a copy of each lease which is the
subject of the Leasehold
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Mortgages, the Manasquan Lease and the leases which are assignable to a
Borrower upon exercise of the options under the Option and Operating
Agreements; and
(g) Delivery to Agent within twenty-one (21) days of the Closing Date
the general Borrower's counsel's opinion letter in form and substance as
conceptually agreed to between Agent's counsel and Borrower's counsel.
Further, Lenders and Agent have requested that Borrowers use their best
efforts to satisfy certain other post-closing matters. In this regard, Borrowers
covenant and agree to use its diligent and best efforts to secure the execution
of the following documents and deliver the same to Agent as soon as reasonably
possible, if at all:
(a) A Consent Agreement executed by Cinema Herricks, Inc. relating to
the Assignment of Option and Management Agreement for the Herricks Theater.
(b) Landlord consents to each of the Assignments of Option and
Management Agreements, in form and substance satisfactory to Agent, from
each of the respective landlords relating to the Herricks Theater, the
Grand Avenue Theater and the Port Washington Theater.
(c) A Landlord Consent to Leasehold Mortgage relating to the Madison
Theater leasehold estate located in Xxxxxx County. Upon receipt of this
document CCC Madison Triple Cinema Corp. agrees to promptly execute a
Leasehold Mortgage relating to such leasehold estate and deliver the same
to Agent.
(d) A Non-Disturbance and Attornment Agreement in form and substance
satisfactory to Agent, executed by landlord and its respective mortgagee
for the Washington Cinema at such time and in connection with the
landlord's refinancing thereof.
ARTICLE V.
GENERAL REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to Agent and each Lender as follows:
Section 5.1. Existence, Etc.
(a) Each Borrower is duly organized, validly existing and in good
standing under the laws of the State of Delaware; and has full corporate
power and authority and full legal right to own or to hold under lease its
Property and to carry on its business. Each Borrower is qualified and
licensed in each jurisdiction wherein the character of the Property owned
or held under lease by it, or the nature of its business makes such
qualification necessary or advisable. Each Borrower is currently qualified
in good standing as a foreign corporation in each jurisdiction set forth on
Schedule 5.1(a).
(b) After giving effect to the Equity Transaction, the authorized
Capital Stock of each Borrower and each of their respective Subsidiaries is
as set forth on Schedule 5.1(b). All issued and outstanding shares of
Capital Stock of each Borrower
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and each of their respective Subsidiaries are duly authorized and validly
issued, fully paid and nonassessable and such shares were issued in
compliance with all applicable state and federal laws concerning the
issuance of securities. Except as set forth on Schedule 5.1(b) and except
for the Lien of the Pledge Agreements, there are no outstanding options,
rights or warrants issued by any Borrower for the acquisition of shares of
the Capital Stock of such Borrower, nor any outstanding securities or
obligations convertible into such shares, nor any agreements by such
Borrower to issue or sell such shares. Except as set forth on Schedule
5.1(b) after giving effect to the Equity Transaction, there are no options,
sale agreements, pledges (other than the Pledge Agreements in favor of the
Agent), proxies, voting trusts, powers of attorney or any other agreements
or instruments binding upon any of Borrowers' shareholders with respect to
beneficial or record ownership of or voting rights with respect to shares
of the Capital Stock of any Borrower.
(c) No Borrower has any Subsidiaries except as set forth on Schedule
5.1(c). All the Capital Stock of each Subsidiary are free and clear of all
Liens other than those in favor of Agent.
(d) Except for stock of Subsidiaries, no Borrower owns or holds of
record (whether directly or indirectly) any shares of any class in the
capital of any corporation, nor does any Borrower own or hold (whether
directly or indirectly) any legal and/or beneficial equity interest in any
partnership, business trust or joint venture or in any other unincorporated
trade or business enterprise.
Section 5.2. Authority, Etc.
(a) Each Borrower has adequate power and authority and has full legal
right to enter into this Agreement and each of the other Loan Documents,
and to perform, observe and comply with all of its agreements and
obligations under each of such documents, including, without limitation the
borrowings contemplated hereby.
(b) The execution and delivery by Borrower of each of the Loan
Documents, the performance by Borrowers of all of their agreements and
obligations under such documents, and the making by Borrowers of the
borrowings contemplated by this Agreement, have been duly authorized by all
necessary corporate action on the part of each Borrower and do not and will
not contravene any provision of such Borrower's charter documents or
by-laws (each as in effect from time to time); conflict with, or result in
a material breach of the terms, conditions or provisions of, or constitute
a default under, under any agreement, trust deed, indenture, mortgage or
other material instrument to which such Borrower is a party or by which
such Borrower or any other Property of such Borrower is bound or affected;
violate or contravene any provision of any law, rule or regulation
(including, without limitation, Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System) or any order, ruling or
interpretation thereunder or any decree, order or judgment of any court or
governmental or regulatory authority, bureau, agency or official (all as
from time to time in effect and applicable to such Borrower) in any manner
that, individually or in the aggregate (i) would have an adverse effect on
the ability of a Borrower to perform its obligations under any Loan
Document or any agreement to be entered into in connection with the Equity
Transaction
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to which it is a party or (ii) would have a Material Adverse Effect;
require any waivers, consents or approvals by any of the creditors or
trustees for creditors of any Borrower or any other Person; or (v) result
in the certain or imposition of any Lien on any of the property of any
Borrower, except for Liens arising under the Loan Documents.
(c) Other than filings required to perfect the security interests
granted hereunder, no approval, consent, order, authorization or license
by, or giving notice to, or taking any other action with respect to, any
governmental or regulatory authority or agency is required, under any
provision of any applicable law:
(i) for the execution and delivery by Borrowers of this
Agreement, each Note, and the other Loan Documents, for the
performance by Borrowers of any of the agreements and obligations
thereunder or for the making by Borrowers of the borrowing
contemplated by this Agreement or for the conduct by Borrowers of
their business; or
(ii) to ensure the continuing legality, validity, binding effect,
enforceability or admissibility in evidence of this Agreement, the
Notes and the other Loan Documents.
Section 5.3. Binding Effect of Documents, Etc. Each of the Loan Documents
which Borrowers have or is to have executed and delivered as contemplated and
required to be executed and delivered as of the Closing Date by this Agreement
has been so executed and delivered by Borrowers, and each such Loan Document is
or will be in full force and effect. The agreements and obligations of Borrowers
contained in each such Loan Document constitute or shall constitute legal, valid
and binding obligations of Borrowers, enforceable against Borrowers in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, moratorium, fraudulent transfer, preference and other
laws and equitable principles affecting the scope and enforcement of creditors'
rights generally, and are also limited by the Lenders' and Agent's implied
covenants of good faith, fair dealing and commercially reasonable conduct, and
by the effect of judicial discretion on the availability of remedies and
realization of benefits under and enforceability of the Loan Document in all
respects as written.
Section 5.4. No Events of Default, Etc.
(a) No event has occurred and is continuing, and no condition exists,
which constitutes a Default or an Event of Default.
(b) No default by any Borrower and no accrued right of rescission,
cancellation or termination on the part of any Borrower, exists under this
Agreement or any of the other Loan Documents.
Section 5.5. Financial Statements. The Consolidated and consolidating
balance sheets and other financial statements of Holdings and Seller Group each
dated December 31, 1995 previously delivered to Agent ("Current Financial
Statements") have been prepared in accordance with GAAP and subject in the case
of unaudited statements to changes resulting from year-end adjustments. The
balance sheets contained in the
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Current Financial Statements present fairly the financial condition of Borrowers
as of the dates thereof in accordance with GAAP. The statements of income
contained in the Current Financial Statements present fairly the results of
operations of Borrowers for the fiscal periods then ended in accordance with
GAAP. There are no material liabilities or obligations, secured or unsecured
(whether accrued, absolute or actual, contingent or otherwise), which were not
reflected in the audited balance sheets of Borrowers or that as at such date or
in the footnotes thereto, and which should, in accordance with GAAP, have been
reflected in such balance sheets.
Section 5.6. Changes; None Adverse. Except as set forth on Schedule 5.6
attached hereto as of the Closing Date, no changes have occurred in the assets,
liabilities or financial condition of Holdings or Seller Group from those
reflected in the Current Financial Statements, which, individually or in the
aggregate, have been adverse. As of the Closing Date, there has been no adverse
development in the business or in the operations or prospects of Holdings or
Seller Group since the date of the Current Financial Statements.
Section 5.7. Title to Assets; Material Leases. Each Borrower has good,
sufficient and legal title to, or leasehold interest in, all of its respective
Property and assets reflected in the Current Financial Statements. Each Borrower
enjoys peaceful and undisturbed possession of all of its respective Property
subject to Material Leases and all such Material Leases are valid and in full
force and effect. All Material Leases are set forth in Schedule 5.7.
Section 5.8. Intellectual Property.
(a) Schedule 5.8 hereto sets forth a complete and correct list of all
Patents and Trademarks owned by each Borrower on the date hereof which are
material to each Borrower's business or financial condition. Each Borrower
owns and possesses the right to use, and has done nothing to authorize or
enable any other Person to use, any Patent or Trademark listed in said
Schedule 5.8 and all registrations listed in said Schedule are valid and in
full force and effect. Each Borrower owns and possesses the right to use
the respective Patents and Trademarks.
(b) Schedule 5.8 hereto sets forth a complete and correct list of all
licenses and other user agreements included in the Intellectual Property on
the date hereof.
(c) (i) There is no violation by others of any right of any Borrower
with respect to any Patent or Trademark listed in Schedule 5.8 hereto; no
Borrower is infringing in any respect upon any Patent or Trademark of any
other Person; no proceedings have been instituted or are pending against
any Borrower or, to any Borrower's knowledge, threatened, and no claim
against any Borrower has been received by any Borrower, alleging any such
violation.
Section 5.9. Indebtedness for Borrowed Money. Except as set forth on
Schedule 5.9 and except for the Indebtedness incurred under this Agreement, no
Indebtedness of any Borrower is secured by or otherwise benefits from any Lien
on or
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with respect to the whole or any part of such Borrower's properties or assets,
present or future. There exists no default or event or condition which, with the
giving of notice or passage of time, or both, would constitute a default under
the provisions of any instrument evidencing such Indebtedness or of any
agreement relating thereto which would interfere with the priority of Agent's
lien on the Collateral.
Section 5.10. Litigation. Except as set forth on Schedule 5.10, there is no
pending or to any Borrower's knowledge threatened action, suit, proceeding or
investigation before any court, governmental or regulatory authority, agency,
commission or official, board of arbitration or arbitrator against a Borrower or
in which a Borrower is a participant ("Litigation"). There are no proceedings
pending or threatened against any Borrower which call into question the validity
or enforceability of any of the Loan Documents.
Section 5.11. No Materially Adverse Contracts. No Borrower is a party to or
bound by any forward purchase contract, futures contract, covenant not to
compete, unconditional purchase, take or pay or other contracts, agreements or
instruments (whether written or oral) which restricts its ability to conduct its
business or, either individually or in the aggregate has or could reasonably be
expected to have a Material Adverse Effect.
Section 5.12. Taxes and Tax Returns, Etc.
(a) Each Borrower and its Subsidiaries has timely filed (inclusive of
any permitted extensions) or had filed on its behalf with the appropriate
taxing authorities all material returns (including without limitation,
material information returns and other material information) in respect of
taxes required to be filed through the date hereof. The information filed
was complete and accurate in all material respects at the time of filing.
No Borrower nor any group of which a Borrower is or was the common parent
has requested any extension of time within which to file returns (including
without limitation information returns) in respect of any taxes other than
routine extensions of time for filing returns which have not involved the
payment of material taxes (other than taxes immaterial in amount) beyond
the due date thereof.
(b) All taxes and assessments in respect of periods beginning prior to
the date hereof have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as reflected in the most
recent financial statements of Borrowers. No Borrower nor any of its
Subsidiaries has any liability for taxes in excess of the amounts so paid
or reserves so established.
(c) No deficiencies for taxes have been claimed, proposed or assessed
by any taxing authority or other governmental authority against any
Borrower nor any of its Subsidiaries and no tax liens have been filed.
There are no pending or threatened audits, investigations or claims for or
relating to any liability in respect to taxes, and there are no matters
under discussion with any taxing authorities or other governmental
authorities with respect to taxes which are likely to result in an
additional liability for taxes. No extension of a statute of limitations
relating to taxes or assessments is in effect with respect to any Borrower.
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(d) No Borrower nor any of its Subsidiaries has any obligation under
any tax sharing agreement or agreement regarding payments in lieu of taxes.
Section 5.13. Contracts with Affiliates, Etc.
(a) Except as set forth on Schedule 5.13(a) and except as permitted by
Section 5.13(a) hereof, Borrower is not a party to or otherwise bound by
any written agreements, instruments or contracts (whether written or oral)
with any Affiliate.
(b) Except as set forth on Schedule 5.13(b), there is no Indebtedness
for Borrowed Money owing by Borrower to any Affiliate nor is there
Indebtedness for Borrowed Money owing by any Affiliate to Borrower.
Section 5.14. Employee Benefit Plans.
(a) Each Borrower and its ERISA Affiliates are in compliance in all
material respects with any applicable provisions of ERISA and the
regulations thereunder and of the Internal Revenue Code of 1986, as
amended, with respect to all Employee Benefit Plans.
(b) No Termination Event has occurred or is reasonably expected to
occur with respect to any Guaranteed Pension Plan.
(c) The actuarial present value of all benefit commitments under each
Guaranteed Pension Plan does not exceed the assets of that Plan.
(d) No Borrower nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any withdrawal liability under ERISA to
Multiemployer Plans.
As used in this Section, the terms "actuarial present value" and "benefit
commitments" shall have the meanings specified in Section 4001 of ERISA.
Section 5.15. Governmental Regulation. No Borrower is a "public utility
company", a "holding company" or a "subsidiary" or an "affiliate" of a "holding
company," as such terms are defined in the federal Public Utility Holding
Company Act of 1935, as amended. No Borrower is an "investment company" or a
company "controlled" by an "investment company," as such terms are defined in
the Federal Investment Company Act of 1940, as amended. No Borrower is subject
to regulation under the Public Utility Holding Company Xxx 0000, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
to any federal or state statute or regulation limiting its ability to incur
Indebtedness for Borrowed Money.
Section 5.16. Securities Activities. No Borrower is engaged in the business
of extending credit for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulation G, T, U and X
of the Board of Governors of the Federal Reserve System.
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Section 5.17. Disclosure. Neither this Agreement, any other Loan Document,
nor any other document, certificate or written statement furnished to Agent or
any Lender by or on behalf of a Borrower for use in connection with the
transactions contemplated by this Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading as of the date of such document,
certificate or other statement. The assumptions upon which all projected
financial statements which have been delivered to Agent and each Lender are
based as stated therein and provide reasonable estimations of future
performance. There is no fact known to any Borrower which has or which could
reasonably be expected in the future to have a Material Adverse Effect.
Section 5.18. No Material Default. No Borrower is in default under any
material order, writ, judgment, injunction, decree, statute or governmental
rule, indenture, agreement, contract, lease or other instrument or contract
applicable to it, which default would have a Material Adverse Effect or
adversely effect a Borrower's performance of any covenants or conditions
respecting any of its Indebtedness, and no holder of any Indebtedness of
Borrower has given notice of any asserted default thereunder, and no liquidation
or dissolution of a Borrower and no receivership, insolvency, bankruptcy,
reorganization or other similar proceedings relative to a Borrower or its
Property is pending or is to Borrower's knowledge threatened.
Section 5.19. Environmental Conditions.
(a) Borrowers and their Affiliates have obtained all necessary
permits, licenses, variances, clearances and all other necessary approvals
(collectively the "EPA Permits") for use of the Real Estate and the
operation and conduct of its business from all applicable federal, state,
and local governmental authorities, utility companies or
development-related entities including, but not limited to, any and all
appropriate Federal or State environmental protection agencies and other
County or City departments, public water works and public utilities in
regard to the use of the Real Estate and the operation and conduct of its
business, and the handling, transporting, treating, storage, disposal,
discharge, or Release of Hazardous Substances, if any, into, on or from the
environment (including, but not limited to, any air, water, or soil).
Each issued EPA Permit is in full force and effect, has not expired or been
suspended, denied or revoked, and is not under challenge by any Person.
Each Borrower is in compliance with each issued EPA Permit.
(b) Neither any Borrower, the Real Estate, nor any other Property
owned or leased by a Borrower is subject to any material private or
governmental litigation, threatened litigation, Lien or judicial or
administrative notice, order or action relating to Hazardous Substances or
environmental problems, impairments or liabilities with respect to the Real
Estate or such other Property.
(c) There has been no "Release" (as defined in Section 101(22) of
CERCLA) into, on or from any Real Estate and no Hazardous Substances
(except "Household Waste" as that term is defined at 40 C.F.R. 261.4(b)(1)
(1990)) are located on or have been treated, stored, processed, disposed
of, handled, transported to or from,
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disposed of upon the Real Estate during Borrower's ownership or into, upon
or from the environment including, but not limited to, any air, water, or
soil. No Borrower has allowed any Hazardous Substance to exist or be
treated, stored, disposed, Released, located, discharged, possessed,
managed, processed, or otherwise handled on the Real Estate or in the
operation or conduct of its respective businesses in violation of
Environmental Laws, and complied with all Environmental Laws affecting the
Real Estate.
(d) Borrowers and their Affiliates do not transport, in any manner,
any Hazardous Substances except in the ordinary course of business in
compliance with Environmental laws.
(e) No Borrower has received written notice of any circumstances which
would result in any material obligation under any Environmental Law to
investigate or remediate any Hazardous Substances in, on or under the Real
Estate.
Section 5.20. Licenses and Permits. Other than Licenses and Permits, the
lack of which individually or in the aggregate would not have a Material Adverse
Effect, each Borrower owns or possesses all Licenses and Permits and rights with
respect thereto, necessary for the conduct of its business as presently
conducted and proposed to be conducted, without any known conflict with the
rights of others and, in each case, free of any Lien not permitted by Section
8.9 of this Agreement. All of the foregoing Licenses and Permits are in full
force and effect, and each Borrower is in compliance with the foregoing without
any known conflict with the valid rights of others. No event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any such License or Permit, or affect the rights of any
Borrower thereunder, except where such revocation, termination or effect upon
Borrowers would not individually or in the aggregate have a Material Adverse
Effect.
Section 5.21. General Collateral Representation.
(a) Borrowers are the sole owners of and have good and marketable
title to the Collateral, free from all Liens, in favor of any Person other
than the Agent and except Permitted Liens, and has full right and power to
grant the Agent a security interest therein. All information furnished to
the Agent concerning the Collateral is and will be complete, accurate and
correct in all respects when furnished.
(b) No security agreement, UCC Financing Statement, equivalent
security or Lien instrument or continuation statement covering all or any
part of the Collateral is on file or of record in any public office, except
such as may have been filed by any Borrower in favor of Agent pursuant to
this Agreement, or in respect of the items of Collateral subject to the
Permitted First Liens.
(c) The provisions of this Agreement are sufficient to create in favor
of the Agent, as of the Closing Date, a valid and continuing lien on, and
first security interest in (subject to the Permitted First Liens), the
types of the Collateral hereunder in which a security interest may be
created under Article 9 of the UCC. UCC Financing Statements have been duly
executed on behalf of each Borrower and the description of
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such Collateral set forth therein is sufficient to perfect first priority
security interests (subject to the Bernardsville Lien) in such Collateral
in which a security interest may be perfected by the filing of UCC
Financing Statements. When such UCC Financing Statements are duly filed in
the filing offices listed on Schedule 5.21 hereto, and the requisite filing
fees are paid, such filings will be sufficient to perfect security
interests in such of the Collateral described in the UCC Financing
Statements as can be perfected by filing (other than Equipment affixed to
real property so as to become fixtures), which perfected security interests
will be prior to all other Liens (except the Bernardsville Lien) in favor
of others and rights of others, enforceable as such as against creditors of
and purchasers from each Borrower (other than purchasers of Inventory in
the ordinary course) and as against any owner of the Real Estate where any
of the Equipment is located and as against any purchaser of such Real
Estate and any present or future creditor obtaining a Lien on such real
property.
(d) Upon delivery to and possession by Agent of the Pledged Stock
pursuant to the terms of the Pledge Agreement, Agent shall possess a valid,
first priority security interest in such Pledged Stock in accordance with
Article 9 of the UCC; and
(e) No person now having possession or control of any of the
Collateral consisting of Inventory or Equipment has issued, in receipt
therefor, a negotiable xxxx of lading, warehouse receipt or other document
of title.
ARTICLE VI.
AFFIRMATIVE COVENANTS OF BORROWER
Each Borrower covenants with and warrants to Agent and each Lender that,
from and after the Closing Date and until all of the Obligations are paid and
satisfied in full except as otherwise expressly consented to in writing by the
Requisite Lenders (unless the context otherwise requires):
Section 6.1. Reports and Other Information.
(a) Borrowers shall provide to the Agent as soon as available, and in
any event within fifteen (15) Business Days after the close of each month
of each fiscal year of Holdings, balance sheets of Holdings as of the end
of such month and consolidated and consolidating statements of income and
statements of cash flow of Holdings and its divisions and Subsidiaries for
such month, certified by the chief financial officer, principal accounting
officer or chief executive officer of Holdings to the effect that such
financial statements, while not examined by independent public accountants,
reflect in his opinion and in the opinion of senior management of Holdings,
all adjustments necessary to present fairly the consolidated financial
position of Holdings as at the end of such month and the results of its
operations for the month then ended in conformity with GAAP (except for the
absence of footnotes) consistently applied, subject only to year-end and
audit adjustments, together with a certificate of such officer stating that
as of the date of such certificate that, to the best of his knowledge,
after reasonable inquiry, no event has occurred which constitutes an Event
of Default or would constitute an Event of Default with the giving of
notice or the lapse of time or both, or, if an Event
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of Default or such an event has occurred and is continuing, a statement as
to the nature thereof and the action which Borrowers have taken or proposes
to take with respect thereto, and further setting out in such detail as is
reasonably required by the Lenders Borrowers' compliance with the
requirements of Article and Sections 8.9 and 8.12 hereof. Notwithstanding
anything in this Section 6.1(a) to the contrary, Borrowers shall not be
obligated to deliver the monthly balance sheets and cash flow statements
for January and February until such time as the year-end adjustments have
been made and the annual audit has been completed. Together with the
delivery of such financial statements of Holdings, Borrowers will deliver
to the Agent a Compliance Certificate and statements of income and
attendance prepared on a theater by theater basis for such period, together
with a statement of Capital Expenditures (reasonably identified by theater
and project) and corporate overhead expenses for the period then ending for
which such reports are being delivered.
(b) Borrowers shall provide to the Agent as soon as available, and in
any event within fifteen (15) Business Days after the close of each quarter
of each fiscal year of Holdings, balance sheets of Holdings as of the end
of such quarter and consolidated and consolidating statements of income and
statements of cash flow of Holdings and its divisions and Subsidiaries for
such quarter and for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, certified by the chief
financial officer, principal accounting officer or chief executive officer
of Holdings to the effect that such financial statements, while not
examined by independent public accountants, reflect in his opinion and in
the opinion of senior management of Holdings, all adjustments necessary to
present fairly the financial position of Holdings (except for the absence
of footnotes) as at the end of such quarter and the results of its
operations for the quarter then ended in conformity with GAAP consistently
applied, subject only to year-end and audit adjustments, together with a
certificate of such officer stating that as of the date of such certificate
that, to the best of his knowledge, after reasonable inquiry, no event has
occurred which constitutes a Default or an Event of Default or would
constitute a Default or an Event of Default with the giving of notice or
the lapse of time or both, or, if a Default or an Event of Default or such
an event has occurred and is continuing, a statement as to the nature
thereof and the action which Borrowers have taken or proposes to take with
respect thereto, and further setting out in such detail as is reasonably
required by the Lenders Borrowers' compliance with the requirements of
Article and Sections 8.12 and hereof. Together with the delivery of such
financial statements of Holdings, Borrowers will deliver to the Agent a
Compliance Certificate and statements of income and attendance prepared on
a theater by theater basis for such period, together with a statement of
Capital Expenditures (reasonably identified by theater and project) and
corporate overhead expenses for the period then ending for which such
reports are being delivered.
(c) Borrowers shall provide to the Agent as soon as available and in
any event within ninety (90) calendar days after the end of each fiscal
year of Holdings a copy of the annual financial statements for such year
for Holdings, including therein a copy of the balance sheets of Holdings as
of the end of such fiscal year and consolidated and consolidating
statements of income and statements of cash flow and statements of
shareholders' equity of Holdings and its divisions and Subsidiaries,
certified without qualification by the Accountants, together with a
certificate of the chief financial officer,
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principal accounting officer or chief executive officer of Holdings stating
that, as of the date of such certificate, to the best of his knowledge and
after reasonable inquiry, no event has occurred which constitutes a Default
or an Event of Default or, if a Default or an Event of Default or such an
event has occurred and is continuing, a statement as to the nature thereof
and the action which Borrowers have taken or proposes to take with respect
thereto and further setting out in such detail as is reasonably required by
the Lenders Borrowers' compliance with the requirements of Article 7 and
Sections 8.9 and 8.12 hereof. Together with the delivery of such financial
statements of Holdings, Borrowers will deliver to the Agent a Compliance
Certificate and statements of income and attendance prepared on a theater
by theater basis for such period, together with a statement of Capital
Expenditures (reasonably identified by theater and project) and corporate
overhead expenses for the period then ending for which such reports are
being delivered.
(d) Together with each delivery of financial statements of Borrower
pursuant to paragraphs 6.1(a), 6.1(c), or, Borrowers will deliver a
management report: describing the operations and financial condition of
Holdings for the period then ended and the portion of the current fiscal
year then elapsed (or for the fiscal year then ended in the case of
year-end financials); setting forth in comparative form the corresponding
figures for the corresponding periods of the previous fiscal year and the
corresponding figures from the most recent Projections for the current
fiscal year delivered to the Agent pursuant to Section 6.1(e), and (3)
discussing the reasons for any significant variations. The information
above shall be presented in reasonable detail and shall be certified by the
chief financial officer or controller of Holdings to the effect that such
information fairly presents the results of operations and financial
condition of Holdings as at the dates and for the periods indicated.
(e) As soon as available and in any event not later than thirty (30)
days prior to the end of each fiscal year, Borrowers will deliver
Projections of Holdings for the forthcoming three (3) fiscal years, year by
year, and for the forthcoming fiscal year, month by month on a consolidated
and theater by theater basis.
(f) Borrowers shall provide to the Agent, promptly after sending or
filing thereof, copies of all reports and communications which each
Borrower sends to its securityholders, and copies of all reports and
registration statements which each Borrower files with the Securities and
Exchange Commission.
(g) Borrowers shall provide to the Agent as soon as possible, and in
any event within fifteen (15) days after a Borrower knows or has reason to
know that any Termination Event with respect to any Plan has occurred, a
statement of the chief financial officer or treasurer of each entity
comprising such Borrower describing such Termination Event and the action
which Borrowers propose to take with respect thereto.
(h) Borrowers shall provide to the Agent as soon as possible, and in
any event within five (5) days after the occurrence of a Default or an
Event of Default, continuing on the date of such statement, a statement of
the chief financial officer or treasurer of Holdings setting forth the
details of such Default or Event of Default, and the action which Borrowers
propose to take with respect thereto.
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(i) If (and on each occasion that) any of the following events shall
occur:
(i) any Loan Document shall at any time be terminated, canceled
or rescinded for any reason whatever; or
(ii) any action at law, suit in equity or other legal proceeding
shall at any time be commenced or threatened in writing by any person
(A) to terminate, cancel or rescind any Loan Document, or (B) to
enforce any other Person's performance or observance of or compliance
with any covenants, agreements or obligations under any Loan Document;
or
(iii) any Person which is a party to or otherwise bound by any
Loan Document shall fail or refuse to perform, comply with or observe
or shall otherwise breach any one or more of the material covenants,
agreements or obligations under such Loan Document;
then Borrowers will promptly (and, in any event, within five (5) Business Days)
after a Borrower shall have first become aware of the occurrence of any such
event, furnish to Agent written notice setting forth brief particulars thereof.
(j) Borrowers shall provide the Agent with the following additional
reports:
(i) as soon as available and in any event within a reasonable
time after the close of each fiscal year of Holdings copies of the
portions of any and all management letters from the Accountants, if
any, to the board of directors of Holdings or to any other entity
comprising Holdings regarding the various accounting practices and
control procedures used by Holdings;
(ii) promptly after a Borrower becomes aware of the commencement
thereof, notice of all actions, suits and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which may adversely affect a
Borrower and which are not fully covered by insurance without the
applicability of any co-insurance provisions or which have not been
bonded and in which either (A) the amount in controversy exceeds
Twenty Thousand Dollars ($20,000) for any single proceeding or Fifty
Thousand Dollars ($50,000) in the aggregate or (B) would cause a
Material Adverse Effect;
(iii) as soon as practicable after becoming aware of a claim by
any Person that a Borrower is in default under any agreement entered
into in connection with Indebtedness for Borrowed Money in excess of
Fifty Thousand Dollars ($50,000), notice of any such claim or default;
(iv) notice of any change in the conduct of the business or
financial condition of a Borrower promptly upon a Borrower becoming
aware of any such change which would have a Material Adverse Effect;
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(v) notice of any release of Hazardous Substances on the Real
Estate that is in material violation of Environmental Laws or would
require remediation pursuant to applicable federal or state law or of
any notification having been filed with regard to a release of
Hazardous Substances on or into Real Estate under the Federal
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Section 9601, et seq., or the Federal Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., or any other
applicable environmental law. Such notice shall indicate the steps
Borrowers have or will take to remediate all hazardous environmental
conditions if any such steps are required of it by applicable
Environmental Law and the estimated costs of such remediation; and
(vi) if (and on each occasion that) any event shall at any time
occur or any condition shall at any time develop which constitutes a
Default or an Event of Default, then, promptly (and, in any event,
within five (5) Business Days) after a Borrower shall have first
become aware of the occurrence or development of any such event or
condition, Holdings will furnish or cause to be furnished to Agent a
written notice specifying the nature and the date of the occurrence of
such event or (as the case may be), the nature and the period of
existence of such condition and what action Borrowers are taking or
proposes to take with respect thereto.
(k) Holdings shall also provide the Agent with such other information
relating to Holdings or any of its Subsidiaries (including, without
limitation, any Employee Benefit Plan) as the Agent may from time to time
reasonably request. To the extent the Agent is obligated to do so by
applicable law, rule or regulation, it may deliver to any regulatory body
having jurisdiction over it, copies of the reports and other information
provided by Borrower to the Agent pursuant to this Section 6.1.
(l) Holdings shall provide the Agent reasonable prior notice of each
meeting of its board of directors (and in any event not less than ten (10)
days prior to such meetings) and Agent shall attend any such meetings as it
may, in its discretion desire.
Section 6.2. Maintenance of Property; Authorization; Insurance.
(a) Each Borrower covenants to keep and maintain all of its Property
in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time to make, or use all reasonable legal
remedies to cause to be made, all proper repairs, renewals or replacements,
betterments and improvements thereto so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times.
(b) At its own cost and expense, each Borrower shall obtain and
maintain during the term of this Agreement insurance against loss,
destruction or damage to its properties as Agent may require from time to
time to fully protect the Agent's and Lenders' interests in the Collateral,
insurance against public liability and third party property damage, with
such insurance companies, in such amounts and covering such risks as are at
all times satisfactory to Agent and naming Agent for the benefit of Lenders
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as mortgagee, loss payee and additional insured as its interests may appear
and (iii) insurance as required by the terms of the Mortgages and Leasehold
Mortgages. Each Borrower agrees to deliver to Agent upon request insurance
certificates or policies evidencing compliance with the above requirements.
Each Borrower covenants, warrants and represents that it will not do any
act or voluntarily suffer or permit any act to be done whereby any
insurance required hereunder shall or may be suspended, impaired or
defeated. In the event that any item of Collateral shall be lost, destroyed
or irreparably damaged from any cause whatsoever during the term hereof,
Borrowers agree to proceed diligently and cooperate fully with Agent and
Lenders in the recovery of any and all proceeds of insurance applicable
thereto, and the carriers named therein are hereby directed by Borrowers to
make payment for such loss to Agent, on behalf of the Lenders, and not to
any Borrower and Lenders jointly. If any insurance losses are paid by
check, draft or other instrument payable to a Borrower and Agent and
Lenders jointly, Agent may endorse the name of such Borrower thereon and do
such other things as it may deem advisable to reduce the same to cash.
Subject to the terms of the Mortgages and Leasehold Mortgages and provided
Borrowers are not in Default in any of their Obligations under any of the
Loan Documents, all loss recoveries received by Agent and Lenders upon any
such insurance shall be paid by Agent and Lenders to Borrowers so long as
such proceeds promptly are reinvested in Borrowers' business. Should a
Borrower then be in default in any of its Obligations to Agent or Lenders
under any of the Loan Documents, such cash resources may be applied and
credited by Agent and Lenders to any obligation, subject to Section 2.7(b).
Each Borrower further covenants that it shall require that the insurer with
respect to each such insurance policy provide for thirty (30) days' advance
written notice to Agent of any cancellation or termination of, or other
change of any nature whatsoever in, the coverage provided under any such
policy.
Section 6.3. Key Man Life Insurance. Holdings shall obtain and maintain a
key man life insurance policy covering A. Xxxx Xxxx in an amount not less than
$4,500,000 and Holdings shall maintain such insurance in full force and effect
until the Loans have been paid in full and all financing agreements among
Borrowers, Agent and the Lenders related thereto have been terminated. Holdings
shall assign such policy to the Agent for the benefit of itself and the Lenders
pursuant to an assignment in form and substance satisfactory to the Agent with
respect to such policy.
Section 6.4. Corporate Existence. Each Borrower shall preserve and maintain
its existence as a Delaware corporation and all of its rights, franchises and
privileges as a corporation.
Section 6.5. Inspection Rights. At any reasonable time, upon reasonable
notice, and from time to time Borrowers shall permit the Agent or any Lender, or
any of their agents, representatives or current or prospective participants in
the Loans, to inspect the Collateral, to examine and make copies of and
abstracts from the records and books of account of, to visit the properties of,
Borrowers and to discuss the affairs, finances and accounts of Borrowers with
any of their officers, employees, agents or the Accountants.
Section 6.6. Payment of Taxes and Claims. Each Borrower shall pay or cause
to be paid all taxes, assessments and other governmental charges imposed upon
its properties or assets or in respect of any of its franchises, business,
income or profits
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before any penalty or interest accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
which have become due and payable and which by law have or might become due and
payable and which by law have or might become a lien or charge upon any of its
properties or assets, provided that (unless any material item of property would
be lost, forfeited or materially damaged as a result thereof) no such charge or
claim need be paid if the amount, applicability or validity thereof is currently
being contested in good faith and if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor.
Section 6.7. Compliance with Laws.
(a) Borrowers will comply with all material applicable federal, state
and local laws, rules, regulations and orders pertaining to the operation
of its business, paying before the same become delinquent all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or its properties, and paying all lawful claims which if
unpaid might become a Lien upon any of its properties, except to the extent
contested in good faith by proper proceedings which stay the imposition of
any penalty, fine or Lien resulting from the non-payment thereof and with
respect to which adequate reserves have been set aside for the payment
thereof.
(b) Borrowers will promptly notify each Lender in the event that any
Borrower receives any notice, claim or demand from any governmental agency
which alleges that a Borrower is in material violation of any of the terms
of, or has materially failed to comply with any applicable order issued
pursuant to any federal, state or local statute regulating its operation
and business, including, but not limited to, the Occupational Safety and
Health Act, the Federal Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and Recovery Act and the
Federal Water Pollution Control Act.
Section 6.8. Notice of Other Events. Immediately upon a Borrower first
becoming aware of any of the following occurrences, Borrowers will furnish or
cause to be furnished to Agent written notice with full particulars of the
business failure, insolvency or bankruptcy of any Borrower; the rescission,
cancellation or termination, or the creation or adoption, of any material
agreement or contract to which any Borrower is a party; any labor dispute, any
attempt by any labor union or organization representatives to organize or
represent employees of any Borrower, or any unfair labor practices or
proceedings of the National Labor Relations Board with respect to any Borrower;
or any defaults or events of default under any material agreement of any
Borrower or any violations of any laws, regulations, rules or ordinances of any
governmental or regulatory body which individually or in the aggregate would
reasonably cause a Material Adverse Effect.
Section 6.9. Communication with Accountants. Each Borrower authorizes Agent
or any Lender to communicate directly with the Accountants and authorizes the
Accountants to disclose to Agent or such Lender any and all financial statements
and other information of any kind, including copies of any management letter or
the substance
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of any oral information or conversation that such Accountants may have with
respect to the business, financial condition and other affairs of Borrowers.
Section 6.10. Payment of Indebtedness. Borrowers will duly and punctually
pay or cause to be paid principal and interest on the Loans and all fees and
other amounts payable hereunder or under the Loan Documents in accordance with
the terms hereunder. Borrowers shall pay all other Indebtedness (whether
existing on the date hereof or arising at any time thereafter) punctually in
accordance with trade practices or within any applicable period of grace except
to the extent that any such obligation is contested in good faith by proper
proceedings or Borrowers have provided Agent evidence that any Lien resulting
from the non-payment thereof has been bonded or with respect to which adequate
reserves have been set aside for the payment thereof.
Section 6.11. Performance of Obligations Under Certain Documents. Borrowers
will duly and properly perform, observe and comply with all of its agreements,
covenants and obligations under this Agreement and each of the other Loan
Documents.
Section 6.12. Governmental Consents and Approvals.
(a) Borrowers will obtain or cause to be obtained all such approvals,
consents, orders, authorizations and licenses from, give all such notices
promptly to, register, enroll or file all such agreements, instruments or
documents promptly with, and promptly take all such other action with
respect to, any governmental or regulatory authority, agency or official,
or any central bank or other fiscal or monetary authority, agency or
official, as may be required from time to time under any provision of any
applicable law:
(i) for the performance by each Borrower of any of its agreements
or obligations under the Notes, this Agreement or any of the other
Loan Documents or for the payment by Borrowers to the Agent at its
Head Office of any sums which shall become due and payable by
Borrowers to Agent or any Lender thereunder;
(ii) to ensure the continuing legality, validity, binding effect
or enforceability of the Notes or any of the other Loan Documents or
of any of the agreements or obligations thereunder of Borrowers; or
(iii) to continue the proper operation of the business and
operations of Borrowers.
(b) Borrowers shall duly perform and comply with the terms and
conditions of all such approvals, consents, orders, authorizations and
Licenses and Permits from time to time granted to or made upon Borrowers.
Section 6.13. Employee Benefit Plans and Guaranteed Pension Plans. Each
Borrower will and will cause each of its ERISA Affiliates to comply with all
requirements imposed by ERISA and the Internal Revenue Code of 1986, as amended,
applicable from time to time to any of its Guaranteed Pension Plans or Employee
Benefit Plans, make full payment when due of all amounts which, under the
provisions of
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Employee Benefit Plans or under applicable law, are required to be
paid as contributions thereto, not permit to exist any accumulated funding
deficiency, whether or not waived, file on a timely basis all reports, notices
and other filings required by any governmental agency with respect to any of its
Employee Benefit Plans, make any payments to Multiemployer Plans required to be
made under any agreement relating to such Multiemployer Plans, or under any law
pertaining thereto, not amend or otherwise alter any Guaranteed Pension Plan if
the effect would be to cause the actuarial present value of all benefit
commitments under each Guaranteed Pension Plan to be less than the current value
of the assets of such Guaranteed Pension Plan allocable to such benefit
commitments, furnish to all participants, beneficiaries and employees under any
of the Employee Benefit Plans, within the periods prescribed by law, all
reports, notices and other information to which they are entitled under
applicable law, and take no action which would cause any of the Employee Benefit
Plans to fail to meet any qualification requirement imposed by the Internal
Revenue Code of 1986, as amended. As used in this Section 6.13, the term
"accumulated funding deficiency" has the meaning specified in Section 302 of
ERISA and Section 412 of the Internal Revenue Code, and the terms "actuarial
present value", "benefit commitments" and "current value" have the meaning
specified in Section 4001 of ERISA.
Section 6.14. Further Assurances. Each Borrower will execute, acknowledge
and deliver and, in the case of third party consents or third party agreements,
diligently seek to obtain the execution, acknowledgement and delivery or
completion, any and all such further assurances and other agreements or
instruments, and take or cause to be taken all such other action, as shall be
reasonably requested by the Agent from time to time in order to give full effect
to any of the Loan Documents. Further, each Borrower shall execute, acknowledge
and deliver and shall, with diligent and best efforts, cause to be executed,
acknowledged and delivered and, in the case of third party consents, seek to
obtain the execution, acknowledgement and delivery or completion, any and all
documents or actions in connection with the Post Closing Requirements set forth
in Section 4.3 hereof.
Section 6.15. Interest Rate Risk Management. Borrowers shall purchase and
maintain in full force and effect during the term of this Agreement, effective
on or before thirty (30) days following the Closing Date, an interest rate swap,
interest rate cap, interest rate collar or similar arrangement designed to
protect Borrowers against the effect of fluctuations in the Interest Rate, such
arrangement and related agreements to be in form and substance reasonably
acceptable to Agent.
Section 6.16. Borrower's Depository Accounts. Borrowers shall concentrate
all of their bank and depository accounts with Agent, including without
limitation, all demand deposit, time deposit, concentration and zero balance
accounts except that Borrowers may maintain operating accounts with any local
financial institution, provided Borrowers shall use their best efforts to
maintain such accounts with one or more of the Lenders.
Section 6.17. Use of Proceeds. Borrowers shall use all Loan proceeds
disbursed only in accordance with the purposes set forth in Section 2.9 of this
Agreement.
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Section 6.18. Subsidiaries. Each Borrower shall pledge to the Agent for the
ratable benefit of the Lenders, the shares of Capital Stock of any Subsidiary
hereafter acquired or created. Further, each Borrower shall grant a Mortgage or
Leasehold Mortgage to Agent, for the ratable benefit of Lenders, on all Real
Estate hereafter acquired by any Borrower.
ARTICLE VII.
FINANCIAL COVENANTS
Section 7.1. Interest Coverage Ratio. Holdings shall not permit the ratio
of EBITDA to Cash Interest Expense for the Reference Period ending on each
Computation Date set forth below to be less than the amount set forth opposite
such Computation Date.
=================================================== ==========================
COMPUTATION DATE RATIO
=================================================== ==========================
June 30, 1996 2.0 to 1.00
--------------------------------------------------- --------------------------
September 30, 1996 2.0 to 1.00
--------------------------------------------------- --------------------------
December 31, 1996 2.0 to 1.00
--------------------------------------------------- --------------------------
March 31, 1997 2.0 to 1.00
--------------------------------------------------- --------------------------
June 30, 1997 2.0 to 1.00
--------------------------------------------------- --------------------------
September 30, 1997 2.0 to 1.00
--------------------------------------------------- --------------------------
December 31, 1997 thru July 1, 2001 2.5 to 1.00
=================================================== ==========================
Section 7.2. Debt Service Coverage. Holdings shall not permit its
Consolidated ratio of Cash Flow to Fixed Charges for the Reference Period ending
on each Computation Date set forth below to be less than 1.50 to 1.00 for each
Computation Date except for July 1, 2001 which ratio shall be not less than 1.25
to 1.00.
Section 7.3. Minimum Net Worth. Holdings shall not permit its Net Worth at
any time while the Loans are outstanding to be less than Four Million and 00/100
Dollars ($4,000,000.00).
Section 7.4. Debt to Cash Flow. As of the last day of each fiscal quarter
of Holdings, the ratio of Consolidated Indebtedness for Borrowed Money
outstanding as of such date to Consolidated Cash Flow for the twelve (12) months
ending on each Computation Date shall not exceed 3.0 to 1.0.
Section 7.5. Limitation on Capital Expenditures. Holdings shall not make or
incur any Capital Expenditures in the aggregate during any fiscal year in excess
of Three Hundred Thousand Dollars ($300,000.00).
If any Borrower enters into a Capital Lease with respect to fixed assets,
for purposes of calculating Capital Expenditures under this Section, the
aggregate amount of
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all payments due for the entire term of such Capital Lease (excluding, however,
the interest portion of capitalized lease payments or the interest portion of
any other permitted Indebtedness) shall be considered expended in full on the
date that such Borrower enters into such Capital Lease.
ARTICLE VIII.
NEGATIVE COVENANTS OF BORROWER
Each Borrower covenants with and warrants to Agent and each Lender that
from and after the Closing Date and until all of the Obligations are paid and
satisfied in full except as otherwise expressly consented to in writing by the
Requisite Lenders:
Section 8.1. Limitation on Nature of Business. No Borrower will at any time
make any material change in the nature of its business as carried on at the date
hereto or undertake, conduct or transact any business in a manner prohibited by
applicable law. No Borrower shall create, capitalize or acquire any Subsidiary
after the Closing Date without the prior written consent of Lender. Lender's
consent to the creation or capitalization of a Subsidiary shall be conditioned
upon such New Subsidiary executing (a) a Joinder Agreement in form and substance
satisfactory to Agent, wherein such New Subsidiary agrees to be bound by the
terms of this Credit Agreement, the Notes and the Loan Documents and (b) such
additional Security Documents as Agent shall require to grant Agent, for the
ratable benefit of Lenders, a first Lien on all of such New Subsidiaries
Property, subject only to the Permitted First Lien.
Section 8.2. Limitation on Fundamental Changes. No Borrower nor any of its
Subsidiaries shall at any time consolidate with or merge into or with any Person
or Persons or enter into or undertake any plan or agreement of consolidation or
merger with any Person, except that any Subsidiary may be merged with and into
Holdings or any other Borrower. No Borrower nor any of its subsidiaries shall
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or substantially all of such Borrower's or any such
Subsidiary's business or property whether now or hereafter acquired. No Borrower
nor any Subsidiary shall make or permit any amendment or modification to its
charter documents or by-laws.
Section 8.3. Restricted Payments. No Borrower will or will permit any of
its Subsidiaries to directly or indirectly declare, order, pay, make or set
apart any sum for any Restricted Payments except that:
(a) Subsidiaries may make Restricted Payments with respect to their
common stock to Holdings or to other Borrowers that are directly
wholly-owned by a Borrower, but only to the extent necessary to permit such
Borrower to pay the Obligations; and
(b) Holdings may purchase any Warrant or Capital Stock of Holdings
held by Provident on the terms and subject to the conditions set forth in
the Warrant Agreement and/or Stockholder's Agreement.
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(c) A Borrower may make interest payments to the holders of
Subordinated Debt but only to the extent set forth in and permitted by the
terms of the Subordination Agreement.
(d) Provided there is no Default or Event of Default under this
Agreement or any other Loan Documents, Holdings may make loans to its
Subsidiaries and the Subsidiaries may make distributions to Holdings but
only to facilitate their normal and customary operating and management
conditions and procedures and provided that all such Restricted Payments
are documented in accordance with standard and acceptable business
practices.
Section 8.4. Lease Obligations. Borrowers will not become obligated to pay
rent under any leases or other rental agreements (excluding Capital Leases and
real estate leases) under which the amount of the aggregate lease or other
payments for all such agreements or arrangements exceeds One Hundred Thousand
Dollars ($100,000.00) per screen for any 12 month period.
Section 8.5. Management Compensation. Neither Holdings nor any other
Borrower or Subsidiary shall pay or enter into an agreement to pay any
Management Shareholder yearly Compensation in excess of the amounts set forth in
the Employment Agreement dated as of May 29, 1996 between A. Xxxx Xxxx and
Holdings (as such Employment Agreement is in effect on the Closing Date) and the
Managing and Monitoring Fee Agreement dated as of May 29, 1996 between Holdings
and MidMark (as such Managing and Monitoring Fee Agreement is in effect on the
Closing Date); provided, however, that upon a Default or Event of Default
hereunder or under any other Loan Document, no Borrower shall be permitted to
make any payments under the Managing and Monitoring Fee Agreement until such
time as such Default or Event of Default has either been waived by Agent or
cured by Borrowers. As used herein, "Compensation" shall mean all forms of
direct and indirect remuneration and include, without limitation, salaries,
commissions, bonuses, securities, property, insurance benefits, personal
benefits and contingent forms of remuneration.
Section 8.6. Limitation on Disposition of Assets.
(a) No Borrower or any of its Subsidiaries will sell, lease, transfer
or otherwise dispose of any of its property, business or assets ("Asset
Dispositions"), or grant any Person an option to acquire any such property,
business or assets except for:
(i) bona fide sales of Inventory to customers in the ordinary
course of business and dispositions of obsolete equipment not used or
useful in the business;
(ii) Asset Dispositions which satisfy the following conditions:
(A) Borrowers shall promptly notify Agent in writing of the
terms of such Asset Disposition, including within such notice the
assets sold and the consideration received;
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(B) the consideration received is at least equal to the fair
market value of such assets;
(C) if the consideration received is not solely in cash, all
non-cash consideration is pledged to the Agent pursuant to
documents satisfactory to the Agent so that the Agent has
received a first priority perfected security interest in such
non-cash consideration to secure the Obligations;
(D) the Net Proceeds of such Asset Disposition are applied
as required by subsection 2.6(e);
(E) after giving effect to the sale or other disposition of
the assets included within the Asset Disposition and the
repayment of Indebtedness with the proceeds thereof, Borrowers
are in compliance on a pro forma basis with the covenants set
forth in Article , recomputed for the most recently ended month
for which information is available and is in compliance with all
other terms and conditions contained in this Agreement; and
(F) no Default or Event of Default shall result from such
sale or other disposition.
(b) Except as permitted elsewhere in this Agreement and except for
agreements or contracts in existence as of the date of this Agreement and
disclosed to Lenders in the schedules hereto, no Borrower will and will not
permit any of its Subsidiaries directly or indirectly to sell, assign,
pledge or otherwise encumber or dispose of any shares of capital stock or
other equity securities in such Borrower or any such Subsidiary including
warrants, rights or options to acquire shares or other equity securities of
any of its Subsidiaries, except to Holdings or another Subsidiary of
Holdings.
Section 8.7. Limitation on Investments. No Borrower shall at any time make
any Investments of any kind whatever in any Person or Persons; excluding,
however from the operation of the foregoing provisions of this Section:
(a) Property to be used in the ordinary course of business of
Borrower;
(b) Assets arising from the sale of goods and services in the ordinary
course of business of Borrower;
(c) Investments in cash and Cash Equivalents.
(d) Investments in any wholly-owned Subsidiary as long as its Capital
Interest is pledged to the Agent and all of the assets of such Subsidiary
are pledged to Agent upon terms and conditions satisfactory to Agent;
(e) Investments in Holdings by any other Borrower.
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Section 8.8. Acquisition of Margin Securities. No Borrower shall own,
purchase or acquire (or enter into any contract to purchase or acquire) any
"margin security" as defined by any regulation of the Federal Reserve Board as
now in effect or as the same may hereafter be in effect unless, prior to any
such purchase or acquisition or entering into any such contract, Agent and each
Lender shall have received an opinion of counsel satisfactory to Agent and each
Lender to the effect that such purchase or acquisition will not cause this
Agreement or the Notes to be in violation of Regulation G, T, U, X or any other
regulation of the Federal Reserve Board then in effect.
Section 8.9. Limitation on Mortgages, Liens and Encumbrances. No Borrower
shall at any time create, assume, incur or permit to exist, any mortgage, Lien
or other encumbrance in respect of any of its Property, assets, income or
revenues of any character, whether heretofore or hereafter acquired by it;
excluding, however, from the operation of the foregoing provisions of this
Section (each a "Permitted Lien"):
(a) Any Liens for taxes, assessments or governmental charges or claims
the payment of which is not at the time required by Section 6.6 of this
Agreement;
(b) Any statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent;
(c) Any Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security;
(d) Any easements, rights-of-way, encroachments, leases, royalties,
restrictions and other similar title exceptions or encumbrances provided
such do not, in the aggregate, materially interfere with the ordinary
conduct of the business of any Borrower or materially reduce or impair the
value of the Real Estate so encumbered;
(e) Any interest or title of a lessor under any Material Lease listed
in Schedule 5.7 annexed to this Agreement;
(f) Liens granted to Agent for the benefit of Lenders;
(g) The additional existing mortgages, Liens and encumbrances of
Borrowers, listed and described, but only to the extent indicated, in
Schedule 8.9(g) annexed to this Agreement; and
(h) The Liens with respect to Indebtedness of Borrower under or in
respect to any conditional sales agreements, security agreements, equipment
leases in the nature of title retention agreements or security agreements
or other similar title retention agreements entered into by Borrowers on,
prior to or after the date of this Agreement in order to secure the payment
of the purchase price of any equipment purchased, leased or otherwise
acquired by any Borrower for use in the ordinary course of its business;
provided, however, that such Borrower is, by the terms of each of Sections
8.13 or 8.14 hereof, expressly permitted to enter into such agreement or
lease.
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Section 8.10. No Additional Negative Pledges. No Borrower will create or
otherwise cause or suffer to exist or become effective, directly or indirectly,
any prohibition or restriction (including any agreement to provide equal or
ratable security to any other Person in the event a Lien is granted to or for
the benefit of the Agent) on the creation or existence of any Lien upon the
assets of a Borrower; or any contractual obligation which may restrict or
inhibit the Agent's rights or ability to sell or otherwise dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.
Section 8.11. No Restrictions on Subsidiary Distributions to Borrowers.
Except as provided herein, Borrowers will not and will not permit any of their
Subsidiaries directly or indirectly to create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Subsidiary to: pay dividends or make any other
distribution on any of such Subsidiary's Capital Stock owned by a Borrower or
any Subsidiary of a Borrower; subject to subordination provisions, pay any
indebtedness owed to a Borrower or any other Subsidiary; make loans or advances
to Borrower or any other Subsidiary; or transfer any of its property or assets
to a Borrower or any other Subsidiary.
Section 8.12. Limitation on Indebtedness. No Borrower shall at any time
create, incur or assume, or become or be liable (directly or indirectly) in
respect of, any Indebtedness for Borrowed Money, other than:
(a) indebtedness arising under this Agreement and the other Loan
Documents;
(b) Indebtedness described on Schedule 5.9;
(c) Indebtedness evidenced by the Subordinated Debt; and
(d) Indebtedness representing the refinancing of the Subordinated Debt
or any part thereof ("Refinanced Subordinated Debt") provided such
Refinanced Subordinated Debt is on terms that are in Agent's discretion, at
least as favorable to Borrowers, Agent and Lenders as the Subordinated Debt
to be redeemed or refinanced thereby, provided (a) that no covenant
contained in this Agreement or any other Loan Document would be violated on
the proposed issue date of the Refinanced Subordinated Debt after giving
effect to (I) the issuance of notes and or debentures in connection
therewith (II) the payment of all insurance costs, commissions, discounts,
redemption premiums, and other fees and charges associated therewith, (III)
the use of proceeds thereof and (IV) the redemption, repayment, or
retirement of all Indebtedness of the Borrowers to be redeemed, repaid, or
retired in connection therewith; and (B) Borrowers, Agent and the holders
of the Refinanced Subordinated Debt execute a subordination agreement upon
terms satisfactory to Agent.
Section 8.13. Limitation on Sales and Leasebacks. No Borrower shall at any
time, directly or indirectly, sell and thereafter lease back any of its
respective assets or Property.
Section 8.14. Transactions with Affiliates. No Borrower shall at any time
enter into or participate in any agreements or transactions of any kind with any
Affiliates
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of any Borrower, except agreements or transactions entered into in the ordinary
course of business upon fair and terms determined by Agent to be no less
favorable to Borrower than could be obtained in a comparable arms-length
transaction with an unaffiliated Person.
Section 8.15. No Additional Bank Accounts. Except as provided in Section
6.16, Borrowers shall not open, maintain or otherwise have any bank accounts.
ARTICLE IX.
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) Principal and Interest. Any principal shall not be paid when due,
or any interest or any other sum payable under this Agreement or the Notes
shall not be paid within three (3) days after the same is due and payable;
(b) Representation and Warranties. Any representation or warranty at
any time made by or on behalf of any Borrower in this Agreement, any Loan
Document or in any certificate, written report or statement furnished to
Agent or any Lender pursuant hereto or thereto shall prove to have been
untrue, incorrect or breached in any material respect on or as of the date
on which such representation or warranty was made or deemed to have been
made or repeated;
(c) Certain Covenants. Borrowers shall fail to comply with the
covenants set forth in Sections , , 6.8, or 6.17, Article or Article ;
(d) Other Covenants. Borrowers shall fail to perform, comply with or
observe or shall otherwise breach any other covenant or agreement contained
in this Agreement and such failure or breach shall continue for more than
fifteen (15) days after the earlier of the date on which any Borrower shall
have first become aware of such failure or breach or Agent or any Lender
shall have first notified Borrowers of such failure or breach;
(e) Loan Documents. The breach or a failure of Borrowers to perform,
comply with or observe any Loan Document or any other agreement, document,
instrument or certificate executed or delivered in connection with this
Agreement and if such failure shall continue for more than fifteen (15)
days after the earlier of the date on which a Borrower shall have first
become aware of such failure or breach or Agent or any Lender shall have
first notified Borrowers of such failure or breach, or any Loan Document
shall cease to be legal, valid, binding or enforceable in accordance with
the terms thereof;
(f) Litigation. Any action at law, suit in equity or other legal
proceeding to amend, cancel, revoke or rescind any Loan Document shall be
commenced by or on behalf of any Borrower or any other Person bound
thereby, or by any court or any other governmental or regulatory authority
or agency of competent jurisdiction; or
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any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or shall issue a
judgment, order, decree or ruling to the effect that, any one or more of
the covenants, agreements or obligations of any Borrower under any one or
more of the Loan Documents are illegal, invalid or unenforceable in
accordance with the terms thereof;
(g) Default by Borrowers under other Agreements. Any default by any
Borrower or any event of default shall occur under any agreement,
instrument or contract relating to Indebtedness individually or in the
aggregate in excess of Fifty Thousand Dollars ($50,000) to which a Borrower
is at any time a party or by which any Borrower is at any time bound or
affected, or a Borrower shall fail to perform or observe any of its
agreements or covenants thereunder, and such default, event of default or
failure shall continue for such period of time as would permit, or as would
have permitted (assuming the giving of appropriate notice), holders of
Indebtedness of a Borrower to accelerate the maturity of all or any part of
such Indebtedness under any such document;
(h) Insolvency. Any action shall be taken by or on behalf of any
Borrower for the termination, winding up, liquidation or dissolution of a
Borrower; or any Borrower shall make an assignment for the benefit of
creditors, become insolvent or be unable to pay its debts as they mature;
or any Borrower shall file a petition in voluntary liquidation or
bankruptcy; or any Borrower shall file a petition or answer or consent
seeking the reorganization of a Borrower, or the readjustment of any of the
Indebtedness of a Borrower; or any Borrower shall commence any case or
proceeding under applicable insolvency or bankruptcy laws now or hereafter
existing; or any Borrower shall consent to the appointment of any receiver,
administrator, custodian, liquidator or trustee of all or any part of the
Property or assets of a Borrower; or any corporate action shall be taken by
any Borrower for the purpose of effecting any of the foregoing; or by order
or decree of any court of competent jurisdiction, any Borrower shall be
adjudicated as bankrupt or insolvent; or any petition for any proceedings
in bankruptcy or liquidation or for the reorganization or readjustment of
Indebtedness of a Borrower shall be filed, or any case or proceeding shall
be commenced, under any applicable bankruptcy or insolvency laws now or
hereafter existing, against any Borrower, or any receiver, administrator,
custodian, liquidator or trustee shall be appointed for any Borrower or for
all or any part of the Property of a Borrower and such case or proceeding
shall remain undismissed for a period of sixty (60) days, or any order for
relief shall be entered in a proceeding with respect to a Borrower under
the provisions of the United States Bankruptcy Code, as amended;
(i) Judgment. Any judgment, order or decree for the payment of money
in excess of Ten Thousand Dollars ($10,000) shall be rendered against any
Borrower, and such Borrower shall not discharge the same or provide for its
discharge in accordance with its terms, or procure a stay of execution
thereof, within Thirty (30) days after the date of the entry thereof;
(j) ERISA. Any Termination Event shall occur and as of the date
thereof or any subsequent date, the sum of the various liabilities of
Borrowers and their ERISA Affiliates (such liabilities to include, without
limitation, any liability to the Pension Benefit Guaranty Corporation (or
any successor thereto) or to any other party
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under Sections 4062, 4063, or 4064 of ERISA or any other provision of law
and to be calculated after giving effect to the tax consequences thereof)
resulting from or otherwise associated with such event exceeds Ten Thousand
Dollars ($10,000); or any Borrower of any of its ERISA Affiliates as an
employer under any Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plans and the plan sponsors of such
Multiemployer Plans shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability requiring a payment in an
amount exceeding Ten Thousand Dollars ($10,000);
(k) Change of Control. Any Change of Control shall occur;
(l) Material Adverse Change. Any event or occurrence which has a
Material Adverse Effect.
Section 9.2. Termination of Commitments and Acceleration of Obligations. If
any one or more of the Events of Default shall at any time occur:
(a) The Agent may, and upon the request of the Requisite Lenders,
shall, by giving notice to Borrowers, immediately terminate the Credit
Commitments of all of the Lenders in full and each Lender shall thereupon
be relieved of all of its obligations to make any Loans thereunder; except
that if there shall be an Event of Default under 9.1(h) hereof, the Credit
Commitments of all of the Lenders shall automatically terminate in full,
and each Lender shall thereupon be relieved of all of its obligations to
make any Loans hereunder.
(b) The Agent may, and upon the request of the Requisite Lenders,
shall, by giving notice to Borrowers (in this Agreement and in the other
Loan Documents called a "Notice of Acceleration"), declare all of the
Obligations, including the entire unpaid principal of the Notes, all of the
unpaid interest accrued thereon, and all other sums (if any) payable by
Borrowers under this Agreement, the Notes, or any of the other Loan
Documents, to be immediately due and payable; except that if there shall be
an Event of Default under Section 9.1(h), all of the Obligations, including
the entire unpaid balance of all of the Notes, all of the unpaid interest
accrued thereon and all other sums (if any) payable by Borrowers under this
Agreement, the Notes or any of the other Loan Documents shall automatically
and immediately be due and payable without notice to Borrowers. Thereupon,
all of such Obligations which are not already due and payable shall
forthwith become and be absolutely and unconditionally due and payable,
without any further notice or any other formalities of any kind, all of
which are hereby expressly and irrevocably waived.
Section 9.3. Remedies. From and after the occurrence of an Event of Default
which is continuing and which has not been waived by the Agent at the direction
of the Requisite Lenders, the Agent may, and upon the request of the Requisite
Lenders, shall:
(a) subject always to the provisions of Section 10.9 hereof, proceed
to protect and enforce all or any of its or the Lenders' rights, remedies,
powers and privileges under this Agreement, the Notes or any of the other
Loan Documents by action at law, suit in equity or other appropriate
proceedings, whether for specific performance
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of any covenant contained in this Agreement, any Note or any of the other
Loan Documents, or in aid of the exercise of any power granted to Agent
herein or therein. In the event the Agent shall fail or refuse to so
proceed, the Requisite Lenders shall be entitled to take such action as
they shall deem appropriate to enforce their rights hereunder and under the
other Loan Documents;
(b) remove from any premises where same may be located any and all
Inventory or any and all documents, instruments, files and records
(including the copying of any computer records), and any receptacles or
cabinets containing same, relating to the Accounts of each Borrower, or the
Agent may use (at the expense of Borrowers) such of the supplies or space
of Borrowers, at Borrowers' place or places of business or otherwise, as
may be necessary to properly administer and control the Accounts of
Borrowers or the handling of collections and realizations thereon;
(c) bring suit, in the name of any Borrower or the Lenders, and
generally shall have all other rights respecting said Accounts, including
without limitation the right to accelerate or extend the time of payment,
settle, compromise, release in whole or in part any amounts owing on any
such Accounts and issue credits in the name of any Borrower or the Lenders;
(d) sell, assign and deliver such Inventory and Accounts and any
returned, reclaimed or repossessed merchandise, with or without
advertisement, at public or private sale, for cash, on credit or otherwise,
at the Agent's sole discretion, and any Lender may bid-or become a
purchaser at any such sale, free from any right of redemption, which right
is hereby expressly waived by each Borrower;
(e) (i) notify the Account Debtor on any Account or chattel paper of
Lenders' security interest therein; demand that monies due or to become due
be paid directly to Agent for the account of Lenders; open any Borrower's
mail and collect any and all amounts due Borrowers from account debtors;
enforce payment of the accounts receivable or chattel paper by legal
proceedings or otherwise; exercise all of Borrowers' rights and remedies
with respect to the collection of the accounts receivable or chattel paper;
settle, adjust, compromise, modify, extend or renew the accounts receivable
or chattel paper; settle, adjust or compromise any legal proceedings
brought to collect the accounts receivable or chattel paper; to the extent
permitted by applicable law, sell or assign the accounts receivable or
chattel paper upon such terms, for such amounts and at such time or times
as Agent deems advisable; grant waivers or indulgences with respect to,
accept partial payments from, discharge, release, surrender, substitute any
customer security for, make compromise with or release, any other party
liable on, any account receivable or chattel paper; take control, in any
manner, of any item of payment or proceeds from any account debtor;
prepare, file, and sign any Borrower's name on any proof of claim in
Bankruptcy or similar document against any account debtor; prepare, file,
and sign a Borrower's name on any notice of lien, assignment or
satisfaction of lien or similar document in connection with the accounts
receivable or chattel paper; endorse the name of any Borrower upon any
chattel paper, document, instrument, invoice, freight xxxx, xxxx of lading
or similar document or agreement relating to the accounts receivable or
chattel paper or inventory; use any Borrower's stationery and sign any
Borrower's name to verifications of the accounts receivable or chattel
paper and notices thereof to account
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debtors; and use the information recorded on or contained in any data
processing equipment or computer hardware or software relating to the
accounts receivable, chattel paper, inventory, or proceeds thereof to which
any Borrower has access; and
(f) foreclose the security interests created pursuant to the Loan
Documents by any available judicial procedure, or take possession of any or
all of the Inventory and equipment of Borrowers without judicial process
and enter any premises where any such Inventory and equipment may be
located for the purpose of taking possession of or removing the same.
The Agent shall have the right, without notice of advertisement, to sell, lease,
or otherwise dispose of all or any part of the Inventory and Equipment of
Borrowers, whether in its then condition or after further preparation or
processing, in the name of any Borrower, or the Lenders, or in the name of such
other party as the Agent may designate, either at public or private sale or at
any broker's board, in lots or in bulk, for cash or for credit, with or without
warranties or representations, and upon such other terms and conditions as the
Agent in its sole discretion may deem advisable, and the Agent or any other
Lender shall have the right to purchase at any such sale. If any such Inventory
and Equipment shall require rebuilding, repairing, maintenance or preparation,
the Agent shall have the right, at its option, to do such of the aforesaid as is
necessary, for the purpose of putting such Inventory and Equipment in such
saleable form as the Agent shall deem appropriate. Each Borrower agrees, at the
request of the Agent, to assemble such Inventory and Equipment and to make it
available to the Agent at places which the Agent shall reasonably select,
whether at the premises of a Borrower or elsewhere, and to make available to the
Agent the premises and facilities of Borrowers for the purpose of the Agent's
taking possession of, removing or putting such Inventory and Equipment in
saleable form. However, if notice of intended disposition of any Collateral is
required by law, it is agreed that five (5) Business Days notice shall
constitute reasonable notification and full compliance with the law. The Agent
shall be entitled to use all intangibles and computer software programs and data
bases used by each Borrower in connection with its business or in connection
with the Collateral. The net cash proceeds resulting from the Agent's exercise
of any of the foregoing rights (after deducting all charges, costs and expenses
including reasonable attorneys' fees) shall be applied by the Agent to the
payment of the Obligations, whether due or to become due, in such order as the
Agent may elect. Each Borrower shall remain liable to the Lenders for any
deficiencies, and the Lenders in turn agree to remit to Borrowers or their
successors or assigns, any surplus resulting therefrom. The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, all of which shall be
cumulative.
Section 9.4. No Implied Waiver; Rights Cumulative. No delay on the part of
the Agent or any Lender in exercising any right, remedy, power or privilege
under any of the Loan Documents or provided by statute or at law or in equity or
otherwise shall impair, prejudice or constitute a waiver of any such right,
remedy, power or privilege or be construed as a waiver of any Default or Event
of Default or as an acquiescence therein. No right, remedy, power or privilege
conferred on or reserved to Agent or any Lender under any of the Loan Documents
or otherwise is intended to be exclusive of any other right, remedy, power or
privilege. Each and every right, remedy, power and privilege
or privilege
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conferred on or reserved to Agent or any Lender under any of the Loan Documents
or otherwise shall be cumulative and in addition to each and every other right,
remedy, power so conferred on or reserved to Agent or any such Lender and may be
exercised at such time or times and in such order and manner as Agent or any
such Lender shall (in its sole and complete discretion) deem expedient.
Section 9.5. Set-Off; Pro Rata Sharing. Each Borrower hereby confirm to
Agent and each Lender the continuing and immediate rights of set-off of Agent
and each Lender with respect to all deposits, balances and other sums credited
by or due from Agent or such Lender or any of the offices or branches of Agent
or such Lender to each Borrower, which rights are in addition to any other
rights which Agent or such Lender may have under applicable law. If any
principal, interest or other sum payable by Borrowers to Agent or any Lender
under the Notes or any of the Loan Documents is not paid to Agent or such Lender
punctually when the same shall first become due and payable, or if any Event of
Default shall at any time occur, any deposits, balances or other sums credited
by or due from Agent or such Lender or any of the offices or branches of Agent
or any Lender to any Borrower, may, without any prior notice of any kind to
Borrowers, or compliance with any other conditions precedent now or hereafter
imposed by statute, rule or law or otherwise (all of which are hereby expressly
and irrevocably waived by each Borrower), be immediately set off, appropriated
and applied by Agent or such Lender toward the payment and satisfaction of the
Obligations (but not to any other obligations of Borrowers to Agent or such
Lender until all of the Obligations have been paid in full) in such order and
manner as Agent or such Lender (in its sole and complete discretion) may
determine, subject, however, to the provisions of Section 10.13.
ARTICLE X.
CONCERNING THE AGENT AND THE LENDERS
The Agent and the Lenders agree as follows:
Section 10.1. Appointment of the Agent. Each of the Lenders hereby appoints
Provident to serve as Agent, under this Agreement and the other Loan Documents,
and in such capacity, to administer this Agreement, and the other Loan
Documents.
Section 10.2. Authority. Each of the Lenders hereby irrevocably authorizes
the Agent to take such action on such Lender's behalf under this Agreement and
the other Loan Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are delegated to or required of the Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto; and to take such action on such Lender's behalf as the Agent shall
consider necessary or advisable for the protection, collection or enforcement of
any of the Obligations. The Agent will promptly notify each of the Lenders as
soon as it becomes aware of any Default or Event of Default or any failure by
Borrowers to make any payment in respect of any of the Notes, provided, however,
that Agent shall not be deemed to have knowledge of any item until such time as
Agent's officers responsible for administration of the Loans shall receive
written notice thereof or have actual knowledge of such event. If any Lender
becomes aware of any Default or Event of Default by Borrowers, it shall promptly
notify Agent
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thereof provided, however, that Lenders shall not be deemed to have knowledge of
any item until such time as Lenders' officers responsible for administration of
the Loans shall receive written notice thereof or have actual knowledge of such
event.
Section 10.3. Acceptance of Appointment. The Agent hereby accepts its
appointment as Agent for each of the Lenders under this Agreement and the other
Loan Documents, but only on the terms set forth in this Agreement, including the
following:
(a) Agent makes no representation as to the value, validity or
enforceability of this Agreement or of any of the other Loan Documents or
as to the correctness of any statement contained in this Agreement or in
any of the other Loan Documents;
(b) Agent may exercise its powers and perform its duties under this
Agreement and the other Loan Documents either directly or through its
agents or attorneys;
(c) Agent shall be entitled to obtain from counsel selected by it with
reasonable care advice with respect to legal matters pertaining to this
Agreement, or any of the other Loan Documents and shall not be liable for
any action taken, omitted to be taken or suffered in good faith in
accordance with the advice of such counsel;
(d) Agent shall not be required to use its own funds in the
performance of any of its duties or in the exercise of any of its rights or
powers, and Agent shall not be obligated to take any action which, in its
reasonable judgment, would involve it in any expense or liability unless it
shall have been furnished security or indemnity in an amount and in form
and substance satisfactory to it; and
(e) Agent, in performing its duties and functions under this Agreement
and the other Loan Documents on behalf of the Lenders, will exercise the
same care which it normally exercises in making and handling loans in which
it alone is interested, but does not assume further responsibility.
Section 10.4. Collateral Matters.
(a) Release of Collateral. Lenders hereby irrevocably authorize Agent,
at its option and in its discretion, to release any Lien granted to or held
by Agent upon any property covered by the Security Documents upon
termination of the Credit Commitments and payment and satisfaction of all
Obligations; or constituting property being sold or disposed of if
Borrowers certify to Agent that the sale or disposition is made in
compliance with the provisions of this Agreement (and Agent may rely in
good faith conclusively on any such certificate, without further inquiry);
or constituting property leased to a Borrower under a lease which has
expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by such
Borrower to be, renewed or extended. Upon request by Agent at any time, any
Lender will confirm in writing Agent's authority to release particular
types or items of property covered by the Security Documents pursuant to
this subsection 10.4(a).
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(b) Confirmation of Authority; Execution of Releases. Without in any
manner limiting Agent's authority to act without any specific or further
authorization or consent by Requisite Lenders (as set forth in subsection
10.4(a)), each Lender agrees to confirm in writing, upon request by
Borrowers, the authority to release any property covered by the Security
Documents conferred upon Agent under clauses (i) through (iii) of
subsection 10.4(a). So long as no Event of Default is then continuing, upon
receipt by Agent of confirmation from the Requisite Lenders of its
authority to release any particular item or types of property covered by
the Security Documents, and upon at least five (5) Business Days prior
written request by Borrowers, Agent shall (and is hereby irrevocably
authorized by Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to Agent for the benefit of
Lenders herein or pursuant hereto upon such Collateral; provided, however,
that Agent shall not be required to execute any such document on terms
which, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of Borrowers, in respect of), all interests retained by
Borrowers, including (without limitation) the proceeds of any sale, all of
which shall continue to constitute part of the property covered by the
Security Documents.
(c) Absence of Duty. Agent shall have no obligation whatsoever to any
Lender or any other Person to assure that the property covered by the
Security Documents exists or is owned by Borrowers or is cared for,
protected or insured or has been encumbered or that the Liens granted to
Agent herein or pursuant hereto have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or
under any duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to Agent in
this Section 10.4 or in any of the Loan Documents, it being understood and
agreed that in respect of the property covered by the Security Documents or
any act, omission or event related thereto, Agent may act in any manner it
may deem appropriate, it its discretion, given Agent's own interest in
property covered by the Security Documents as one of the Lenders and that
Agent shall have no duty or liability whatsoever to any of the other
Lenders for so acting; provided that Agent shall exercise the same care
which it would in dealing with loans for its own account.
Section 10.5. Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting Lenders' security interest in
assets which, in accordance with Article 9 of the Uniform Commercial Code in any
applicable jurisdiction, can be perfected only by possession. Should any Lender
(other than Agent) obtain possession of any such Collateral, such Lender shall
notify Agent thereof, and, promptly upon Agent's request therefor, shall deliver
such Collateral to Agent or in accordance with Agent's instructions. Each Lender
agrees that it will not have any right individually to enforce or seek to
enforce any Security Document or to realize upon any collateral security for the
Loans, it being understood and agreed that such rights and remedies may be
exercised only by Agent.
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Section 10.6. Application of Moneys. All moneys realized by the Agent under
the Loan Documents shall be held by Agent to apply in accordance with Section
2.7(b) hereof.
Section 10.7. Reliance by the Agent. Agent shall be entitled to rely on any
notice, consent, certificate, affidavit, letter, telegram, telecopy, facsimile
or teletype message, statement, order, instrument or other document believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons. Agent shall deem and treat the payee of any Note as the
absolute owner thereof for all purposes hereof until such time as it receives
actual notice of an assignment permitted hereunder of such payee's interest,
together with the written agreement of the assignee in form and substance
satisfactory to Agent that such assignee is bound by this Agreement as a
"Lender" hereunder.
Section 10.8. Exculpatory Provisions. Neither Agent nor any of its
shareholders, directors, officers, employees or agents shall be liable in any
manner to any of the Lenders for any action taken, omitted to be taken or
suffered in good faith by it or them under any of the Loan Documents or in
connection therewith, or be responsible for the consequences of any oversight or
error of judgment, except for losses due to gross negligence or willful
misconduct of such Agent, shareholder, director, officer, employee or agent.
Without limiting the generality of the foregoing sentence of this Section 10.8,
under no circumstances shall the Agent be subject to any liability to any Lender
on account of any action taken or omitted to be taken by such Agent in
compliance with the direction of the Requisite Lenders or all of the Lenders, as
the case may be as provided for hereunder.
Agent shall not be responsible in any manner to any of the Lenders for the
due execution, effectiveness, genuineness, validity or enforceability,
perfection or recording of this Agreement, any of the Notes, any of the other
Loan Documents or for any certificate, report or other document used under or in
connection with this Agreement or any of the other Loan Documents, or for the
truth or accuracy of any recitals, statements, warranties or representations
contained herein or in any certificate, report or other document at any time
hereafter furnished or purporting to have been furnished to it by or on behalf
of a Borrower, or any other Person, or be under any obligation to any of the
Lenders to ascertain or inquire as to the performance or observance by
Borrowers, or any other Person of any of the covenants, agreements or conditions
set forth in this Agreement, the Notes or any of the other Loan Documents or as
to the use of any moneys lent hereunder or thereunder.
Agent shall not be obligated to take any action or refrain from taking any
action under any Loan Document that might, in its judgment, involve it in any
expense or liability until it shall have been indemnified to its satisfaction by
or received an agreement to indemnify from each Person which such Agent
reasonably believes may be an intended recipient of such distribution. If a
court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
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Section 10.9. Action by the Agent. Except as otherwise expressly provided
under this Agreement or in any other of the Loan Documents, Agent will take such
action, assert such rights and pursue such remedies under this Agreement and the
other Loan Documents as the Requisite Lenders or all of the Lenders, as the case
may be as provided for hereunder shall direct. Except as otherwise expressly
provided in any of the Loan Documents, Agent will not (and will not be obligated
to) take any action, assert any rights or pursue any remedies under this
Agreement or any of the other Loan Documents in violation or contravention of
any express direction or instruction of the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder. Agent may refuse (and
will not be obligated) to take any action, assert any rights or pursue any
remedies under this Agreement or any of the other Loan Documents without the
express written direction and instruction of the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder. In the event Agent fails,
within a commercially reasonable time, to take such action, assert such rights,
or pursue such remedies as the Requisite Lenders or all of the Lenders, as the
case may be as provided for hereunder, direct, the Requisite Lenders or all of
the Lenders, as the case may be as provided for hereunder, shall have the right
to take such action, to assert such rights, or pursue such remedies on behalf of
all of the Lenders unless the terms hereof otherwise require the consent of all
the Lenders to the taking of such actions. All notices and other material
information required to be delivered by Borrowers to Agent hereunder shall be
delivered within a reasonable time (and in any event not more than five (5)
days) after Agent's receipt of same by Agent to each Lender. No Lender (other
than the Agent, acting in its capacity as Agent) shall be entitled to take any
enforcement action of any kind under any of the Loan Documents, except as
expressly provided in this Agreement. Action that may be taken by Requisite
Lenders or all of the Lenders, as the case may be as provided for hereunder may
be taken pursuant to a vote at a meeting (which may be held by telephone
conference call) of all of the Lenders, or pursuant to the written consent of
such Lenders.
Section 10.10. Amendments, Waivers and Consents. Any provision of this
Agreement, the Notes or the other Loan Documents may be amended or waived upon
the consent of the Requisite Lenders, and after such consent, Agent, on behalf
of the Lenders, may execute and deliver to Borrowers a written instrument
waiving or amending such provision; provided, however, that neither this
Agreement, the Notes, nor any of the other Loan Documents may be amended, waived
or a variation therefrom or forbearance with respect to such variation consented
to without the written consent of the Agent and all of Lenders which effect a
change in the Maximum Revolving Commitment; a change in any Lender's Credit
Commitment; a reduction in the interest rates or reduction of the principal set
forth in the Notes; the extension of the maturity date on the Notes; a change in
the payment schedule or scheduled date for the payment of or amount of any
interest or principal; any change in Article; a change in this paragraph, the
definition of Requisite Lender or any provision of this Agreement which requires
consent or action of all the Lenders for action thereunder; a change in the
obligations and liabilities of Agent; a change which increases the obligations
of any Lender; or a change in any fees or charges hereunder or in Sections 2.10
or 11.5 hereof.
Section 10.11. Indemnification. Each Lender agrees to indemnify Agent (to
the extent Agent is not promptly reimbursed by Borrower), in accordance with its
Participation Percentage from and against any and all liabilities, obligations,
losses,
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damages, penalties, interests, actions, judgments and suits of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against Agent
relating to or arising out of this Agreement or any of the other Loan Documents
or relating to any action taken or omitted by such Agent under this Agreement or
any of the other Loan Documents, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, interest,
actions, judgments or suits resulting from Agent's own gross negligence or
willful misconduct.
Section 10.12. Reimbursement of the Agent. Each Lender further agrees to
reimburse Agent, in accordance with its Participation Percentage, for any
reasonable out-of-pocket costs or expenses incurred by Agent in connection with
its duties under this Agreement (including, but not limited to, reasonable fees
and disbursements of counsel, travel and living expenses away from home of
employees or agents of the Agent and compensation of agents or of experts
employed by the Agent to render services for the Lenders hereunder), but only to
the extent such fees, disbursements, expenses and compensation have not been
promptly reimbursed to the Agent by Borrowers. If any such sums are reimbursed
to the Agent by Borrowers after one or more of the Lenders have reimbursed the
Agent for such sums, the Agent will refund such sums ratably to the Lenders who
contributed such sums.
Section 10.13. Sharing of Funds Received. Each Lender and Agent agrees with
Agent and each of the other Lenders that if such Lender shall receive from any
Borrower or any other Person or Persons, whether by payment received otherwise
than in accordance with the terms of the Loan Documents, exercise of the right
of set-off, counterclaim, cross-claim, enforcement of any claim, or proceedings
against a Borrower or any other Person or Persons, proof of claim in bankruptcy,
reorganization, liquidation, receivership or other similar proceedings, or
otherwise, and shall retain and apply to the payment of any of the Obligations
owing to such Lender any amount in excess of its Pro Rata Share of the payments
received by all of the Lenders and the Agent in respect of all of the
Obligations, such Lender will promptly make such dispositions and arrangements
with the other Lenders and the Agent with respect to such excess, either by way
of distribution, pro tanto assignment of claim, subrogation or otherwise, as
shall result in each of the Lenders receiving in respect of the Obligations
owing to it, its Pro Rata Share of such payments.
Section 10.14. Dealing with Lenders. Agent may at all times deal solely
with the several Lenders for all purposes of this Agreement and the protection,
enforcement and collection of the Notes, including without limitation the
acceptance and reliance upon any certificate, consent or other document executed
on behalf of one or more of the Lenders and the division of payments pursuant to
Sections 2.5, 2.6, 2.7, 10.6, and 10.13 hereof. The Agent shall not have a
fiduciary relationship in respect of any Lender by reason of this Agreement. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action hereunder except any action specifically provided by
this Agreement to be taken by the Agent.
Section 10.15. Agent as Lender. Provident shall have, in its capacity as a
Lender under the Loan Documents, the same obligations and the same rights,
remedies,
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powers and privileges under this Agreement and the other Loan Documents as it
would have were it not also an Agent.
Section 10.16. Duties Not to be Increased. The duties and liabilities of
Agent under this Agreement and the other Loan Documents shall not be increased
or otherwise changed without its express prior written consent. The Agent shall
have no duty to provide information to the Lenders except as expressly set forth
herein.
Section 10.17. Lender Credit Decisions. Each Lender acknowledges that it
has, independently of and without reliance upon Agent or any of the other
Lenders, made its own credit analysis and decision to enter into this Agreement
and the other Loan Documents to which it is a party. Each Lender also
acknowledges that it will, independently of and without reliance upon Agent or
any of the other Lenders, continue to make its own credit decisions in taking or
not taking action under this Agreement or any of the other Loan Documents and in
determining the compliance or lack thereof by Borrower and any other Person with
any provision of any Loan Document or other document or agreement.
Section 10.18. Resignation of Agent. Provident and any successor Agent may
resign as such at any time by giving thirty (30) days' prior written notice of
resignation to each Lender and Borrowers, such resignation to be effective on
the date which is specified in such notice. Upon any such resignation by
Provident as Agent, or in the event the office of Agent shall thereafter become
vacant for any other reason, the Requisite Lenders shall appoint a successor
Agent, by an instrument in writing signed by such Lenders and delivered to such
successor Agent and Borrowers whereupon, such successor Agent shall succeed to
all of the rights and obligations of the retiring Agent as if originally named.
The retiring Agent shall duly assign, transfer and deliver to such successor
Agent all moneys at the time held by the retiring Agent hereunder after
deducting therefrom its expenses for which it is entitled to be reimbursed. Upon
such succession of any such successor Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder, except for its gross
negligence or willful misconduct arising prior to its retirement or removal
hereunder. After any Agent's resignation, the provisions of this Section 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
Section 10.19. Assignment of Notes; Participation.
(a) Each Lender may, with concurrent notice to Agent, assign to one or
more banks or other financial institutions all or a portion of its rights
and obligations under this Credit Agreement and the Notes; provided that
for each such assignment, the parties thereto shall execute and deliver to
Agent an assignment and assumption agreement, in form and substance
acceptable to Agent, together with any Notes subject to such assignment,
and no such assignment shall reduce the assigning Lender's Credit
Commitment to less than Fifty-One Percent (51%) of such Lender's original
Credit Commitment without the consent of Agent, unless such assignment is
to a then-current holder of a Note, provided that the number of Lenders
holding rights hereunder shall not exceed five (5) at any one time. Upon
such execution and delivery of such assignment and assumption agreement to
Agent in form and substance satisfactory to Agent and the
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payment by the Assigning Lender to Agent of a processing and administration
fee of $3,500, from and after the date specified as the effective date in
such Agreement (the "Acceptance Date"), (x) the assignee thereunder shall
be a party hereto, and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such agreement, such assignee shall
have the rights and obligations of a Lender hereunder and (y) the assignor
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such agreement, relinquish its rights
(other than any rights it may have pursuant to Section 11.5 which will
survive) and be released from the obligations so assigned under this
Agreement (and, in the case of an assignment covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(b) Each Lender may sell participations of up to forty-nine percent
(49%) of its rights and obligations under the Loan Documents to one or more
banks or other entities (including, without limitation, up to such portion
of its Credit Commitment, the Loans owing to it, and the Note held by it);
provided, however, that such Lenders' obligations under the Loan Documents
(including, without limitation, its Credit Commitment to Borrowers
hereunder) shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes of the Loan Documents, the participating banks or other entities
shall be entitled to the cost protection provisions of Sections 2.10 and
2.11 hereof, but a participant shall not be entitled to receive pursuant to
such provisions an amount larger than its share of the amount to which the
Lender granting such participation would have been entitled, Borrowers, the
Agent and the other Lenders shall continue to deal solely and directly with
such selling Lender in connection with such Lender's rights and obligations
under the Loan Documents, and no such transfer shall include the transfer
of any of such Lender's rights to grant consents or waivers or approve
amendments or modifications to the Loan Documents except with respect to
those items requiring the action of or consent by all of the Lenders or
affecting the rights and obligations of Agent. It is understood and agreed
that each Lender may share any and all information received by it from or
on behalf of any Borrower pursuant to this Agreement or any of the other
Loan Documents with any participant or prospective participant of such
Lender.
ARTICLE XI.
PROVISIONS OF GENERAL APPLICATION
Section 11.1. Term of Agreement. This Agreement shall continue in full
force and effect and the duties, covenants, and liabilities of Borrowers
hereunder and all the terms, conditions, and provisions hereof relating thereto
shall continue to be fully operative until all Obligations to Agent and each
Lender have been satisfied in full.
Section 11.2. Notices.
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(a) All notices and other communications pursuant to this Agreement
shall be in writing, either delivered in hand or sent by first-class mail,
postage prepaid, or sent by telex, telecopier, facsimile transmission or
telegraph, addressed as follows:
(i) If to Borrowers, at:
Clearview Cinema Group, Inc.
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: A. Xxxx Xxxx, President
Fax Number: (000) 000-0000
with copies to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax Number: (000) 000-0000
(ii) If to Agent, at:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx
Fax Number: (000) 000-0000
with a copy to:
Xxxxxxx, Muething & Klekamp
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: J. Xxxxx Xxxxxxxxx, Esq.
Fax Number: (000) 000-0000
(iii) If to a Lender, at such address set forth on
Schedule 1; or to such other addresses or by
way of such telex and other numbers as any
party hereto shall have designated in a
written notice to the other parties hereto.
(b) Except as otherwise expressly provided herein, any notice or other
communication pursuant to this Agreement or any other Loan Document shall
be deemed to have been duly given or made and to have become effective when
delivered in hand to the party to which it is directed, or, if sent by
first-class mail, postage prepaid, or by telex, telecopier, facsimile
transmission or telegraph, and properly addressed in accordance with
Section 11.2(a), (i) when received by the addressee; or if sent by first
class mail, postage
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prepaid, on the third (3rd) Business Day following the day of the dispatch
thereof, whichever of (i) or (ii) shall be the earlier.
Section 11.3. Survival of Representations. All representations and
warranties made by or on behalf of any Borrower in this Agreement, or any of the
other Loan Documents shall be deemed to have been relied upon by Agent and each
Lender notwithstanding any investigation made by Agent or any Lender and shall
survive the making of each of the Loans.
Section 11.4. Amendments. Each of the Loan Documents may be modified,
amended or supplemented in any respect whatever, only with the prior written
consent or approval of Agent and the Requisite Lenders or all of the Lenders (as
the case may be) and each other Person (other than a Lender) which is a party to
such Loan Document, all in accordance with the terms of Section hereof.
Section 11.5. Costs, Expenses, Taxes and Indemnification.
(a) Each Borrower absolutely and unconditionally agrees to pay to the
Agent, for the respective pro rata account of the Agent and each Lender,
upon demand by Agent or any Lender at any time and as often as the occasion
therefor may require, whether or not all or any of the transactions
contemplated by any of the Loan Documents are ultimately consummated all
reasonable out-of-pocket costs and expenses which shall at any time be
incurred or sustained by Agent or any of its directors, officers, employees
or agents as a consequence of, on account of, in relation to or any way in
connection with the preparation, negotiation, execution and delivery of the
Loan Documents and the perfection and continuation of the rights of the
Lenders and Agent in connection with the Loans, as well as the preparation,
negotiation, execution, or delivery or in connection with the amendment or
modification of any of the Loan Documents or as a consequence of, on
account of, in relation to or any way in connection with the granting by
Agent or any of the Lenders of any consents, approvals or waivers under any
of the Loan Documents including, but not limited to, reasonable attorneys'
fees and disbursements; and all reasonable out-of-pocket costs and expenses
which shall be incurred or sustained by Agent or any of the Lenders or any
of their directors, officers, employees or agents as a consequence of, on
account of, in relation to or any way in connection with the exercise,
protection or enforcement (whether or not suit is instituted) any of its
rights, remedies, powers or privileges under any of the Loan Documents or
in connection with any litigation, proceeding or dispute in any respect
related to any of the relationships under, or any of the Loan Documents
(including, but not limited to, all of the reasonable fees and
disbursements of consultants, legal advisers, accountants, experts and
agents for Agent or any of the Lenders, the reasonable travel and living
expenses away from home of employees, consultants, experts or agents of
Agent or any of the Lenders, and the reasonable fees of agents, consultants
and experts not in the full-time employ of Agent or any of the Lenders for
services rendered on behalf of Agent or any of the Lenders).
(b) Each Borrower shall absolutely and unconditionally indemnify and
hold harmless Agent and each Lender against any and all claims, demands,
suits, actions, causes of action, damages, losses, settlement payments,
obligations, costs, expenses and all other liabilities whatsoever except
for claims arising out of or related to the gross
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negligence or wilful misconduct of Agent or any Lender which shall at any
time or times be incurred or sustained by Agent or any Lender or by any of
their shareholders, directors, officers, employees, subsidiaries,
Affiliates or agents on account of, or in relation to, or in any way in
connection with, any of the arrangements or transactions contemplated by,
associated with or ancillary to this Agreement or any of the other Loan
Documents, whether or not all or any of the transactions contemplated by,
associated with or ancillary to this Agreement, or any of such Loan
Documents are ultimately consummated.
(c) Each Borrower hereby covenants and agrees that any sums expended
by Agent or any Lender which Agent or any Lender is entitled to be
reimbursed for pursuant to this Section 11.5, shall be immediately due and
payable upon demand by Agent or any Lender, and shall bear interest at the
Default Interest Rate applicable to Term Loan B from the date Agent or any
such Lender incurred such expense until the date such payment is made in
full to Agent or such Lender.
Section 11.6. Language. All notices, applications, certificates, reports,
financial statements and other financial information, correspondence and all
other communications from Borrowers to Agent or any Lender pursuant to this
Agreement or any of the other Loan Documents shall be in the English language or
shall be accompanied by an English translation thereof completely satisfactory
to Agent or such Lender.
Section 11.7. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors in title and assigns; provided, however, that no Borrower may assign
or delegate any of its rights or obligations hereunder to any Person or Persons
without the express prior written consent of the Agent and all of the Lenders;
and no Lender may assign or delegate its rights or obligation hereunder to any
Person or Persons except in accordance with Section 10.19 hereof.
Section 11.8. Governing Law; Jurisdiction and Venue. The undersigned agree
that inasmuch as this Agreement, the Notes and the Loan Documents are to be
executed by Borrowers and accepted by Agent and Lenders in Cincinnati, Ohio and
the funds to be disbursed under the Loans are to be disbursed in Ohio, this
instrument and the rights and obligations of all parties hereunder shall be
governed by and construed under the substantive laws of the State of Ohio,
without reference to the conflict of laws principles of such state.
The Agent, each Lender and each Borrower hereby designate all courts of
record sitting in Cincinnati, Ohio, both state and federal, as forums where any
action, suit or proceeding in respect of or arising out of this Agreement, the
Notes, Loan Documents, or the transactions contemplated by this Agreement may be
prosecuted as to all parties, their successors and assigns, and by the foregoing
designations the Agent, each Lender, and Borrower consents to the jurisdiction
and venue of such courts. EACH BORROWER WAIVES ANY AND ALL PERSONAL RIGHTS UNDER
THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN THE STATE OF OHIO
FOR THE PURPOSES OF LITIGATION TO ENFORCE SUCH OBLIGATIONS OF
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BORROWERS. In the event such litigation is commenced, each Borrower agrees that
service of process may be made and personal jurisdiction over Borrowers obtained
by service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon Borrowers' appointed Agent for Service of Process
in the State of Ohio, which the undersigned hereof designates to be: CT
Corporation Systems, Cincinnati, Ohio. Each Borrower recognizes and agrees that
the agency has been created for the benefit of Borrowers, and Agent and each
Lender and agree that this agency shall not be revoked, withdrawn, or modified
without the consent of the Agent.
Section 11.9. WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED INDUCEMENT
FOR THE LENDERS TO EXTEND CREDIT TO BORROWERS, AND AFTER HAVING THE OPPORTUNITY
TO CONSULT COUNSEL, EACH BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO THIS AGREEMENT OR ARISING IN ANY
WAY FROM THE OBLIGATIONS.
Section 11.10. Waivers. Each Borrower waives notice of nonpayment, demand,
notice of demand, presentment, protest and notice of protest with respect to the
Obligations, or notice of acceptance hereof, notice of the Loans made, credit
extended, or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly provided for
herein.
Section 11.11. Interpretation and Proof of Loan Documents. Whenever
possible, the provisions of each Loan Document will be construed in such a
manner as to be consistent with this Agreement and each other Loan Document. If
any of the provisions of any Loan Document are inconsistent with this Agreement,
such provisions of this Agreement will supersede such provisions of such Loan
Document. This Agreement, the Loan Documents and all documents relating hereto,
including, without limitation, consents, waivers and modifications which may
hereafter be executed, documents received by the Agent or any Lender at the
closing or otherwise, and financial statements, certificates and other
information previously or hereafter furnished to the Agent or any Lender, may be
reproduced by the Agent or such Lender by an photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process and the
Agent or such Lender may destroy any original document so reproduced. Each
Borrower agrees and stipulates that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by the Agent of such Lender in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
Section 11.12. Integration of Schedules and Exhibits. The Exhibits and
Schedules annexed to this Agreement are an integral part of this Agreement and
are incorporated herein by reference.
Section 11.13. Headings. The headings of the Articles, Sections and
paragraphs of this Agreement have been inserted for convenience of reference
only and shall not be deemed to be a part of this Agreement.
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Section 11.14. Counterparts. This Agreement may be executed in any number
of counterparts, but all of such counterparts shall together constitute but one
agreement. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart hereof signed by each of the
parties hereto.
Section 11.15. Severability. Any provision of this Agreement which is
prohibited and 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.16. One General Obligation. All Loans and advances by Lenders to
Borrowers under this Agreement constitute one loan, and all Obligations of
Borrowers to Agent and the Lenders under this Agreement constitute one general
obligation. It is expressly understood and agreed that all of the rights of
Agent and each Lender contained in this Agreement shall likewise apply insofar
as applicable to any modification of or supplement to this Agreement.
[The rest of this page intentionally left blank. Signature pages to follow.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by or on behalf of each of the parties as of the day and in the year first above
written in Cincinnati, Ohio.
SIGNED IN THE PRESENCE OF: BORROWERS:
CLEARVIEW CINEMA GROUP, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC MADISON TRIPLE CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC XXXXXXX TWIN CINEMA CORPORATION
By: _____________________________
Name: ___________________________
Title: __________________________
CCC MANASQUAN CINEMA CORPORATION
By: _____________________________
Name: ___________________________
Title: __________________________
CLEARVIEW THEATRE GROUP, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC HERRICKS CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC PORT WASHINGTON CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC GRAND AVENUE CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC WASHINGTON CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC XXXXXXX CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC XXXXXXX CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
CCC NEW CITY CINEMA CORP.
By: _____________________________
Name: ___________________________
Title: __________________________
000-000 XXXXXXXXXXX XXXXXX XXXX.
By: _____________________________
Name: ___________________________
Title: __________________________
THE LENDERS:
THE PROVIDENT BANK
By: _____________________________
Name: ___________________________
Xxxxxxxxxxx X. Xxxxxxx
Title:
Assistant Vice President
AGENT:
THE PROVIDENT BANK, as Agent
By: _____________________________
Name: ___________________________
Xxxxxxxxxxx X. Xxxxxxx
Title:
Assistant Vice President
SCHEDULES
ANNEX I
1 Lenders
3.1 Mortgaged Property and Leasehold Interests
5.1(a) Jurisdictions where qualified to do business
5.1(b) Capital Stock
5.1(c) Subsidiaries
5.2 Authority
8.5 Management Compensation
5.6 Material Adverse Changes
5.7 Material Leases of Property
5.8 Intellectual Property
5.9 Indebtedness for Borrowed Money
5.10 Litigation
5.13(a) Contracts with Affiliates
5.13(b) Indebtedness for Borrowed Money Owing to or by Affiliates
5.21 UCC Filing Offices
8.9(g) Liens
[Schedules are not included herewith, but will be provided by the Company upon
request.]
EXHIBITS
Exhibit A Form of Assignment of Option and Operating Agreements
Exhibit B Form of Assignment of Patents
Exhibit C Form of Assignment of Trademarks
Exhibit D Form of Blocked Account Agreement
Exhibit E Form of Compliance Certificate
Exhibit F Form of Environmental Indemnity Agreement
Exhibit G Form of Leasehold Mortgage
Exhibit H Form of Mortgage
Exhibit I Form of Pledge Agreement
Exhibit J-1 Form of Revolving Promissory Note
Exhibit J-2 Form of Term Loan A Promissory Note
Exhibit J-3 Form of Term Loan B Promissory Note
Exhibit K Subordination Agreement
Exhibit L Form of Borrower's Counsel Opinion Letter
Exhibit M Form of Warrant
[Exhibits are not included herewith, but will be provided by the Company upon
request.]
